LD Track Weekly Report [2023/08/07]
[Summary]
RWA: According to rwa.xyz, the tokenized scale of U.S. Treasury bonds is approximately $790 million. Following the rate increase of MakerDAO’s DSR, as of writing, the PSM module has seen a 24-hour increase of about $36 million. The volume of Dai in DSR has grown by 120 million, raising the total amount of Dai to 45.2 billion, and the volume continues to grow.
LSD: Last week, the ETH staking rate rose to 21.01%, an increase of 0.68% compared to the previous week. 25.26 million ETH were locked in Beacon Chain, corresponding to a staking rate of 21.01%, an increase of 0.68% week on week. Among them, active validator nodes totaled 712,500, a 2% increase, while validator nodes in queue stood at 72,200, down 11.1%. The number of validators awaiting activation significantly decreased, leading to an overall decline in the staking rate growth.
Ethereum L2: Layer2’s Total Value Locked (TVL) increased by $110 million from the previous week, bringing the total locked value to $10.66 billion. Base’s TVL continues to rise and currently stands at 118 million, ranking above Starknet. Base’s mainnet will be open to the public this week, and opBNB’s mainnet is also set to launch in mid-2023. Competition in Layer2 is intensifying.
DEX: Dex’s combined TVL is $13.2 billion, relatively unchanged from the previous week. Dex had a 24-hour trading volume of $1.77 billion and a 7-day trading volume of $14.31 billion, an increase of $3.5 billion from the previous week. Following the Curve incident, the attacker returned all the stolen funds from Jpeg and Alchemix and retained 10% as a white-hat reward. CRV prices significantly rose over the weekend as funds were returned by providers, leading to a short squeeze.
Derivative DEX: Over the past two weeks (from July 24th to August 6th), the overall trading volume of derivative DEXs was relatively low, with a weekly average of about $7 billion. The decline in trading volume is quite significant, nearing levels seen in late May and early June of 2023, as well as the end of December 2022, representing a relatively low position.
[RWA]
According to rwa.xyz, the tokenized scale of U.S. Treasury bonds is approximately $790 million. Following the rate increase of MakerDAO’s DSR, the volume of Dai in DSR has grown by 120 million, raising the total amount of Dai to 45.2 billion.
Furthermore, the tokenized scale of U.S. Treasury bonds has seen an increase of about $150 million over the past two weeks.
Makerdao
MakerDAO’s DSR (Dai Savings Rate) experienced two adjustments this year. Initially, it was raised from 1% to 3.49%. Subsequently, it was adjusted from 3.49% to 8%. As of the time of writing, the PSM module increased by about 36 million in the last 24 hours, the DSR’s Dai size grew by 120 million, bringing the total Dai amount to 4.52 billion, and the scale continues to grow. At present, the DSR represents 9% of the total Dai volume, so the DSR deposit rate remains at 8%. As of August 6th, the total Dai amount was approximately 4.44 billion, representing a record low in nearly two years of supply. After the DSR adjustment, there was a rebound in the total Dai volume.
Other Proposals:
• The D3M module’s maximum debt ceiling was raised from 20 million to 200 million.
• The RWA004 debt ceiling was reduced from 7 million to 0. As of March 2023, there was a default of 1.3 million, which is currently being coordinated and addressed.
• For Q2, a total of 134.1 MKR was distributed to 10 AVC members.
• RWA007 plans to sell part of its ETFs (1-year/3-year term), with $6.8M being returned to the surplus buffer.
• 2 million DAI has been allocated to be transferred to a contract address, intended as initial funding for the “endgame” plan.
Other Protocol Developments:
- • Clearpool was launched on Polygon’s zkEVM on July 31st.
- • Tangible is migrating USDR and wUSDR to the v3 version.
[LSD]
Last week, the ETH staking rate increased to 21.01%, up 0.68% week-on-week. A total of 25.26 million ETH were locked in the Beacon chain, representing a staking rate of 21.01%, an increase of 0.68% from the previous week. Among these, there were 712,500 active validator nodes (up 2% from the previous week) and 72,200 queued validator nodes (down 11.1%). The number of validators awaiting activation has significantly decreased, leading to a slowdown in the overall staking rate growth.
This week, the staking growth rate has slowed.
ETH staking yield is at 4.24%.
Among the three major LSD protocols, in terms of price performance: LDO fell by 3.3% in a week, RPL decreased by 5.5%, while FXS increased by 6%. From the perspective of ETH staking volume: Lido increased by 0.93% in a week, Rocket Pool rose by 1.51%, and Frax increased by 0.69%. Lido announced the upcoming introduction of the LDO+stETH dual governance model, allowing all stakeholders to participate in governance, ensuring the healthy development of the protocol. This adjustment also indirectly highlights the limited utility of the LDO token. L2 network Mantle has initiated a proposal vote to stake 200,000 ETH with Lido. Coinbase Wallet has launched Rocket Pool’s staking window, providing a traffic channel for Rocket Pool. Currently, Rocket Pool’s deposit pool balance stands at 14,200 ETH, a significant level since the Atlas upgrade, with the Minipool queue cleared and an RPL staking rate of 47.27%. Frax’s founder initiated governance proposal FIP-277, proposing to implement the Frax V3 US bond RWA strategy through FinresPBC. FinresPBC is currently partnering with banks such as Lead Bank and is actively building relationships with more compliant financial institutions serving the crypto sector.
[Ethereum L2]
TVL
The total TVL on Layer 2 increased by $110 million compared to last week, with the overall locked amount reaching $10.66 billion.
Zksync’s TVL has halted its rapid decline trend, and recent volatility has reduced. Currently, its TVL has decreased by about 36% from its historical peak.
Base’s TVL continues to grow, surpassing Starknet.
After a single-day inflow of nearly $60 million on July 30th, Base cross-chain funds have stabilized, with a recent average net inflow of over $7 million daily.
Base’s mainnet will be publicly released on August 9th for full public access. Simultaneously, Base will launch a month-long on-chain event called Onchain Summer on August 9th, which includes a grant of 100 ETH to projects built on Base and an online hackathon, Superhack, in collaboration with Superchain members. Base’s official Ethereum bridging feature is now live, ending its previous one-way status. The withdrawal confirmation time is approximately 7 days.
opBNB’s mainnet will also launch in mid-August 2023, initially open to infrastructure providers and later to the general public by the end of August or early September. Before the mainnet launch, tests will be conducted on usability, performance, transaction costs, and security. opBNB will also offer various grants, builder programs, and sponsorship plans to promote ecosystem development.
On-chain Activity
[DEX]
The combined TVL for Dex is $13.2 billion, roughly the same as last week. Dex’s 24-hour trading volume is $1.77 billion, and the 7-day trading volume is $14.31 billion, an increase of $3.5 billion from last week.
Following the Curve incident, the attacker has returned all stolen funds from Jpeg and Alchemix, retaining 10% as a white-hat reward. The CRV price significantly increased over the weekend as funds were returned by providers, leading to a short squeeze. The CRV/ETH pool still has funds worth 18.5 million CRV not yet returned, and Curve has expanded the reward scope to the public (offering 10% of the reward). Since the incident, Curve’s TVL decreased from $3.64 billion before the incident to a low of $1.96 billion, a 50% decline, and has now rebounded to $2.73 billion, still 25% lower. Currently, Curve Founder Michael’s main four loans are: $40 million repaid on Aave, with a remaining debt of $21 million, a liquidation price of $0.276; borrowed 10.7 million FRAX on FRAXlend with a health factor of 2.03; almost no debt on Abracadabra; and borrowed $7.68 million and $1.68 million Dola from two pools on Inverse with health factors of 1.85 and 1.93, respectively.
Ethereum
ETH L2/Sidechain
Arbitrum’s GMX swap saw a rapid trading volume increase of 105%, with a 7-day volume of 40.5 million.
BTC L2/Sidechain
Alt L1
[Derivative DEX]
In the past two weeks (from July 24 to August 6), the overall trading volume of derivative DEXs has been at a relatively low level, averaging around $7 billion per week. The shrinkage in trading volume is quite severe, approaching levels seen at the end of May to early June 2023, as well as the end of December 2022.
Regarding TVL, the overall TVL of derivative DEXs is also declining, with funds slowly flowing out over the past 7 days.
From a user perspective, daily active users peaked in February and March but have recently been in a slump. Currently, GMX remains the protocol with the highest number of daily active users, around 1,000. However, GMX had over 3,000 daily active users at its peak, which has now decreased by nearly 60%. While other protocols with token incentives saw an increase in trading volume, with Kwenta and Vertex even briefly surpassing GMX, their user numbers did not significantly grow. Kwenta uses protocol tokens and OP as incentives but maintains around 500 users. Vertex has airdrop expectations for its token, maintaining around 300 users.
Overall, the growth of Derivative DEXs is currently stagnant. On one hand, the user experience lags significantly behind centralized exchanges (CEX), and fees are also relatively high. Ordinary users are more inclined to use CEX, with little motivation to switch. On the other hand, there’s a proliferation of GMX forks, intensifying competition within the sector and diluting the already limited users and trading volume.
Weekly Project Update:
GMX V2 Officially Launched
GMX V2 was officially launched on August 3, 2023. Users can now choose between V1 or V2 for trading on the official website. The main updates in V2 include:
1) Introduction of an isolated pool (GM Pool), launching multiple trading pairs, adding new pairs such as SOL, XRP, LTC, DOGE, and ARB. Traders can select the pool they wish to trade in, and LP providers can supply liquidity to specific pools.
2) A new oracle system will provide quotes for every block, resulting in faster execution speeds and reduced slippage.
3) Opening and closing fee rates have been reduced from 0.1% to a range between 0.05% and 0.07%.
4) Measures such as funding fees, borrowing fees, and a price impact factor have been introduced to maintain balance between long and short positions.
5) For V1, the protocol revenue distribution was: 30% to GMX stakers and 70% to GLP holders. For V2, the distribution is: 27% to GMX stakers, 63% to LP providers, 8.8% to the protocol (project team), and 1.2% to the oracle (Chainlink).
Impact:
There are more tradeable assets available, faster execution speeds, and reduced slippage. The long-short balance mechanism has also been improved. However, there remains room for enhancing user experience, and transaction fees may be perceived as high for average users, limiting its appeal.
• GNS Token Economic Model Revision
GNS is revising its token economic model, centralizing protocol benefits into the GNS token. This is planned for launch in September 2023. Currently, GNS protocol revenue distribution is as follows:
33.5% goes to GNS token stakers, 17.2% to DAI stakers (LP providers), 16.33% to the Governance Fund (protocol wallet), 16.33% to the Development Fund (founders’ wallet), 14.2% goes to NFT bots, and 2.44% is designated for commissions.
The proposed changes include:
1) 100% of the Development Fund’s income will be distributed to GNS token stakers.
2) NFTs will no longer be in use. The income previously allocated for NFTs will be distributed in an 80:20 ratio to GNS stakers and the oracle. Previously, NFTs served to reduce trading spreads, increase $GNS staking rewards, and run liquidation/limit order bots. It was found that most holders only used NFTs to increase GNS staking rewards without providing liquidation/limit order services, thus rendering its continued use unnecessary. Hence, NFTs will be discontinued.
3) An additional 4.36 million GNS tokens will be minted. Out of this, 1 million will be allocated to the Development Fund, locked for a year, and can be staked to earn rewards. The remaining 3.36 million will be used to redeem NFTs. NFT holders can choose to instantly receive GNS tokens at a 25% fee or wait for 6 months for a complete release.
4) With these changes, the income for GNS stakers will increase from the previous 33.5% to around 60%.
Impact:
In the short term, this is likely to boost GNS token values. However, there’s no new incentive for LP providers, and TVL (Total Value Locked) is currently experiencing a slow outflow, affecting the platform’s available liquidity depth. For traders, there’s no new incentive or improvement in user experience, leading to minimal growth in daily active users.
LD Capital is a leading crypto fund who is active in primary and secondary markets, whose sub-funds include dedicated eco fund, FoF, hedge fund and Meta Fund.
LD Capital has a professional global team with deep industrial resources, and focus on develivering superior post-investment services to enhance project value growth, and specializes in long-term value and ecosystem investment.
LD Capital has successively discovered and invested more than 300 companies in Infra/Protocol/Dapp/Privacy/Metaverse/Layer2/DeFi/DAO/GameFi fields since 2016.
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