LD Capital: Weekly Track Report [2023/10/30]
[Summary]
DeFi Lending: With the general market conditions improving, the lending sector has seen an exceptional surge in activity.
LSD: Last week, the ETH staking rate rose to 23.28%, a week-on-week increase of 0.26%. A total of 28 million ETH were locked in the Beacon Chain, corresponding to a staking rate of 23.28%, a 0.26% increase from the week before; active validator nodes reached 866,300, a week-on-week increase of 0.21%.
Ethereum L2: The total TVL (Total Value Locked) for Layer 2 is $11.89 billion, with an overall increase of 7.20% over the past seven days. The 173rd ACDE meeting of Ethereum was held on October 26, which provided updates on the progress and timeline for the Cancun upgrade, expected to be executed on the mainnet in 2024.
DEX: The combined TVL for DEXs is $11.56 billion, up 600 million from last week. DEXs saw a 24-hour trading volume of $1.45 billion and a 7-day volume of $19 billion, an increase of $7 billion from the previous week.
Derivatives DEX: In mid-October, BTC broke through the annual high of $31,500 to reach a new yearly peak near $35,500, after which it fluctuated between $33,500 and $35,500. This breakout led to a surge in bullish sentiment in the market, with a significant increase in open positions and trading volume.
[DeFi Lending]
Aave
The Aave community has launched a new proposal suggesting a collaboration between Aave DAO and TokenLogic to develop various smart bridging contracts from Avalanche, Optimism, and Arbitrum to Ethereum. Once created, these contracts will become public goods within the Aave ecosystem, allowing any participant to draft effective payloads and transfer DAO funds across different networks.
Once the bridging contract from Avalanche to Ethereum is complete, TokenLogic plans to propose transferring funds to the Ethereum vault to support the DAO’s ongoing financial stability.
Aave whale address 0x355e has cumulatively withdrawn approximately 153,000 tokens from Binance since October 23, now holding around 237,000 AAVE, making it the largest personal address holding AAVE. This address initially positioned AAVE in January of this year, with an average cost of around $70.
Galaxy Digital appears to be going long on BTC and ETH on Aave and Compound. On October 28, Galaxy Digital deposited a total of 4,168 WBTC ($142 million) and 16,000 ETH ($28.6 million) into Aave and Compound, then borrowed 71.6 million USDT and 21.9 million USDC.
Liquity
The Liquity stablecoin LUSD has launched on Starknet, currently in the alpha phase with a collateral deposit limit of 0.2 ETH, which is expected to be lifted over time.
Over the past week, LQTY experienced significant price volatility, rising from $1.47 to $2.22, a surge of over 50%. As DWF withdrew its 1.27 million LQTY from the staking pool and transferred 100,000 of them to Gate.io, the LQTY price rally ended, falling from $2.22 to $1.79.
MakerDAO
A whale address starting with 0x8af withdrew a total of 4,077 MKR (valued at approximately $5.88 million) from Bitget at an average price of $1,442 on October 29. Subsequently, this whale deposited these MKR into Aave and borrowed 1.84 million USDC. Afterwards, they exchanged the USDC for DAI and deposited it into MakerDAO, where the current DAI Savings Rate (DSR) is 5%.
In the past 7 days, FalconX has deposited a total of 9,085 MKR (valued at approximately $12.8 million) into OKX and Binance, and currently still holds 7,261 MKR (valued at approximately $10 million).
[LSD]
Last week, the ETH staking rate rose to 23.28%, a week-on-week increase of 0.26%. There were 28 million ETH locked in the Beacon Chain last week, corresponding to a staking rate of 23.28%, an increase of 0.26% from the previous week; with 866,300 active validators, a week-on-week increase of 0.21%. This week, the ETH staking yield rebounded to 3.61%; the on-chain Meme market started to pick up, with Uniswap and BananaGun being the applications that consumed the most gas over the past week, while ETH’s annualized inflation rate decreased to 0.04%.
This week’s ETH staking rate increased by 0.26% week-on-week.
This week’s ETH staking yield rebounded to 3.52%.
This week’s ETH annual inflation rate is 0.035%.
Among the three major LSD protocols, in terms of price performance over the past week, LDO rose by 4.4%, RPL by 17.2%, and FXS by 10.5%. From the perspective of ETH staked, Lido decreased by 0.35% over the week, Rocket Pool increased by 1.07%, and Frax by 1.75%. Last week, the price of ETH rose by 5.8%. The design of Rocket Pool’s RPL as collateral for node staking essentially anchors the price of RPL to ETH to a certain extent. Coupled with factors such as insufficient effective collateral last week, increasing TVL, small market cap, and poor liquidity, RPL’s price saw a significant increase. Currently, the deposit pool balance of Rocket Pool is 19,272 ETH, with a staking rate of 50.79% and an effective staking ratio of 91.81%. FXB is currently in the testnet phase, with attention also on the open redemption of frxETH and the halving of FXS emission, with the current sFRAX scale at 42.96 million and a yield of 6.37%.
[Ethereum L2]
TVL
The total TVL of Layer2 is $11.89 billion, with the overall TVL rising by 7.20% over the past 7 days.
Cancun Upgrade
On October 26th, the 173rd Ethereum ACDE meeting was convened, which provided updates on the progress and timeline for the Cancun upgrade, with the mainnet upgrade expected to occur in 2024.
（1） Devnet10: Developers initiated Devnet-10 on Monday, October 23, to test the Cancun/Deneb upgrade. This development network created 330,000 active validators to trigger changes to the validator outflow limit.
（2） Deneb Test Schedule: The Deneb upgrade is set to be activated on the Goerli testnet at the earliest by the end of November. Historically, the interval between activations of Ethereum upgrade testnets has been two weeks. For instance, if Dencun is activated on Goerli at the end of November, say on Wednesday, November 22nd, the subsequent testnet upgrades on Sepolia and Holesky would likely take place in early and mid-December, respectively.
Tim Beiko noted that even under the most ideal timeline, the Dencun mainnet activation would fall during the holiday period at the end of December. It is more likely that developers will postpone the mainnet activation of the Dencun upgrade to the beginning of 2024.
（3） The meeting also covered simplifications of Deneb, EIP7523, KZG ceremony verification, and layer-2 standardization development details.
OP
At 12:00 PM on October 30th, Optimism (OP) will unlock approximately 24.16 million tokens (equivalent to about $34.31 million USD), accounting for 2.74% of the circulating supply.
ARB
Blockworks Research has initiated a community proposal on Arbitrum, planning to establish an Arbitrum Alliance led by Blockworks Research, Gauntlet, and Trail of Bits for a duration of 12 months. This initiative aims to assist Arbitrum DAO members in turning ideas into reality. The total cost for the one-year alliance will be based on the 30-day VWAP price of ARB the day before the on-chain proposal, estimated to require about 2.2 million ARB tokens. A quarter of the funds will be pre-paid to each alliance member 91 days after the AIP execution, with the remaining three-quarters paid over the following 274 days. The flow of funds will remain under the control of the DAO, with the possibility of cessation at any time via an on-chain DAO proposal.
On-Chain Activity
[DEX]
The combined Total Value Locked (TVL) of DEXs is $11.56 billion, an increase of $600 million from the previous week. The 24-hour trading volume of DEXs is $1.45 billion, and the 7-day trading volume is $19 billion, marking an increase of $7 billion from the previous week.
Ethereum
ETH L2/sidechain Ecosystem
BTC L2/Sidechain
Influenced by the surge in BTC prices, the TVL (Total Value Locked) of ALEX, a DEX within the BTC L2 Stacks ecosystem, has seen a significant increase over 7 days (+62%)
Alt L1
[Derivatives DEX]
BTC broke through the annual high of $31,500 in mid-October, reaching a new annual peak near $35,500, and subsequently fluctuated between $33,500 and $35,500. This breakthrough led to a surge in bullish sentiment in the market, with both open interest and trading volume showing significant growth.
The current open interest stands at $30.3 billion, having reached the high for the year 2023, and is close to restoring the levels seen before the FTX event in 2022. The market has taken nearly a year to recover.
On October 23 and 24, the trading volume exceeded $150 billion, which is among the higher levels for the year 2023. Thereafter, the volume dipped slightly but still represented nearly double the levels seen from August to September.
There has also been a significant recovery in the trading volume of derivatives DEXs. On October 23 and 24, the daily trading volume on DYDX was around $2 billion, and in the following days, it remained around $1 billion; liquidity pool-based derivatives DEXs also saw a combined daily trading volume of around $2 billion at the peak. DYDX accounts for about 50% of the market share in terms of trading volume, followed by protocols such as GMX, Kwenta, ApolloX, Vertex, HMX, etc.
The number of users on derivatives DEXs has also recovered. During the peak trading period, GMX’s daily active users reached 2,500, and even after a decline, the number stood at around 1,000; Vertex/ApolloX had about 500 users; other protocols had between 300–500 users. DYDX’s weekly active users reached 3,700. In terms of user numbers, DYDX and GMX still have the most active user bases.
LD Capital
As a global blockchain investment firm, we have built a portfolio of over 250 investments since 2016, spanning across various sectors, including infrastructure, DeFi, GameFi, AI, and the Ethereum ecosystem. We focus on investing in projects with disruptive innovations, actively taking on the role of primary investors, and providing comprehensive post-investment services to these projects. We employ a combination of direct investment from our own funds and a distributed fund model to cover all-stages of investment.
Trend Research
Trend Research division specializes in crypto hedge funds focusing on secondary areas within the crypto market. Our team members come from top platforms and institutions like Binance and CITIC. We excel in macroeconomics, industry trends, and project data analysis, with trend, hedge, and liquidity funds.
Cycle Trading
We specialize in Web3 project investment and service, with a strong emphasis on Infra, applications, and AI. We have a team of nearly 20 senior engineers and dozens of crypto experts as advisors, assisting projects in strategic design, capital platform relations, and liquidity enhancement.
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