LD Weekly Track Report [21/08/2023]
[Summary]
RWA: MakerDAO’s DSR (Dai Savings Rate) has been reduced from 8% to 5%. MakerDAO’s founder proposed the revenue-sharing rules for the Spark protocol. Aave v3 is about to launch on the Base chain.
LSD: Last week, the ETH staking rate rose to 21.50%, a sequential increase of 1.16%. A total of 25.84 million ETH was locked in the Beacon chain, corresponding to a staking rate of 21.5%, with a sequential increase of 1.16%. Among these, there were 742,800 active validator nodes, up by 2.1% sequentially, and 59,800 nodes in the queue for validation, a drop of 9.43% from the previous week. The constant increase in the staking volume and the insufficient on-chain transactions led to a decrease in the ETH staking yield to 3.98%. (The consensus layer APR is inversely proportional to the square root of the total staked volume, while the execution layer ARP depends on the Priority fee.)
Ethereum L2: The total TVL (Total Value Locked) in layer 2 decreased by 500 million USD from the previous week, with a total lock-up amount of 10 billion USD. Base continues its momentum with a 19.54% increase in TVL. The social protocol friend.tech reached a new popularity peak.
DEX: DEX’s combined TVL stands at 12.27 billion USD, a decrease of 1 billion USD from the previous week. DEX’s 24-hour trading volume is 1.3 billion USD, and the 7-day trading volume is 15.36 billion USD, an increase of 4.7 billion USD from the previous week. Ethereum’s DEX trading volume accounts for 49%, a decrease of 3% from the previous week.
Derivative DEX: Over the past week (from August 14th to August 20th), the overall trading volume of derivative DEXs saw a significant rebound. The main derivative DEX’s weekly trading volume was approximately 8.9 billion USD, a growth of about 80% from the previous week, which stood at about 5 billion USD. The reason for the surge in trading volume is the sharp decline in Bitcoin and Ethereum prices last week, with a daily drop exceeding 7%.
[RWA]
MakerDAO
Last week, MakerDAO passed a series of governance proposals concerning the EDSR and Stability Fee, with a primary focus on reducing the DSR from 8% to 5%. As of today, the total supply of Dai has decreased from a high of 5.47 billion on August 20th to 5.16 billion, a reduction of 310 million. The amount of Dai within the DSR also fell from 1.476 billion to 1.199 billion, a reduction of 277 million, which accounts for nearly 89% of the total reduction in Dai, indicating a massive outflow of funds from the DSR. The decrease in the DSR rate also implies a substantial reduction in MakerDAO’s expenditures, and its PE ratio has decreased to 14.88.
Due to the reduction in the DSR rate, the Spark Protocol TVL also experienced a significant decline, decreasing by more than $200 million. Besides this, there have been no major changes to the protocol. Last week, MakerDAO’s founder Rune also introduced a proposal to amend the income-sharing rules of the Spark Protocol. According to this proposal, Spark must pay 10% of the revenue generated from its lending functionality based on the Aave codebase. Once approved, payments to the Aave community will commence immediately and must reach a minimum payment level (1 million Dai). If not, the 2-year revenue-sharing term will pause and stop counting down until it reaches the minimum payment level again. Before the launch of the SubDAO token, Maker Governance temporarily pays the “virtual revenue share” on behalf of the Spark Protocol. Once the SubDAO token is launched, the Spark Protocol-Aave revenue-sharing ecosystem protocol will become the standard rule.
Aave
The proposal to activate the Base Network Aave V3 was unanimously approved on the 20th (with a 100% support rate). The proposal has now been executed on-chain. This proposal will allow Aave to complete all initial setups and activate wETH, cbETH, and USDbC foundational liquidity pools on Aave V3 in the Base. Compound launched on the Base network on August 15th and is currently the largest lending protocol on the Base chain with a TVL of approximately $16.22 million.
[LSD]
Last week, the ETH staking rate rose to 21.50%, a week-over-week increase of 1.16%. 25.84 million ETH were locked in the Beacon Chain, corresponding to a staking rate of 21.5%, a week-over-week increase of 1.16%. There were 742,800 active validator nodes, a week-over-week increase of 2.1%, and 59,800 nodes queued for validation, a week-over-week decrease of 9.43%. The continuous increase in staking volume and the insufficient on-chain transactions led to a decrease in the ETH staking yield to 3.98%. (The consensus layer APR is inversely proportional to the square root of the total staking volume, while the execution layer ARP depends on the Priority fee).
ETH staking yield decreased to 3.98%.
Among the three major LSD protocols, in terms of price performance, LDO has decreased by 7.9% in the past week, RPL fell by 8.3%, and FXS dropped by 6.1%. From the perspective of ETH pledge volume, Lido increased by 1.94% in a week, Rocket Pool rose by 0.72%, and Frax went up by 1.97%. Last week, the overall market underwent significant adjustments, with BTC falling by 11.3% and ETH by 9.3%. The LSD sector had a relatively smaller drop compared to other altcoin sectors, and the Lido MC/TVL reached a new low for the year. The Rocket Pool deposit pool is full, and the growth rate of Minipool nodes needs improvement. The RPL pledge rate stands at 47.6% (with an increase of 0.24%), and the effective pledge rate is 99.5%. Frax is still awaiting the launch of the FRAX V3 version. Last week, Brevan Howard Digital continued to sell 10,000 tokens, leaving a balance of 560,000 tokens in their wallet. Moreover, attention is given to whether the Secure Signer technology will bring changes to the current LSD market (Puffer).
[Ethereum L2]
TVL
The total volume of layer2 TVL decreased by 500 million USD from the previous week, with a total locked amount of 10 billion USD.
Base continues its growth momentum, with the TVL further increasing by 19.54%.
Aave unanimously passed the proposal to deploy V3 on Base, allowing Aave to complete all initial setups and activate fundamental liquidity pools such as wETH, cbETH, and USDbC on Aave V3.
The social protocol friend.tech reached a new peak in popularity, with a total transaction volume of 25,633.5 ETH, protocol revenue of 1,165.2 ETH, and a total user market value of 10,663.3 ETH.
Shiba Inu launched its Shibarium mainnet as an Ethereum L2 expansion solution. Applications built on this network will use tokens such as BONE, TREAT, SHIB, and LEASH. Shibarium will focus on the deployment and development of metaverse and gaming applications. A flaw was discovered in the cross-chain bridge on August 17, and the Shibarium RPC website was shut down last week, set to reopen to the public this week.
On-chain activity
[DEX]
Dex has a combined TVL (Total Value Locked) of 12.27 billion, a decrease of 1 billion USD from the previous week. Dex’s 24-hour trading volume is 1.3 billion, with a 7-day trading volume of 15.36 billion, showing an increase of 4.7 billion from the previous week. Ethereum Dex’s trading volume accounts for 49%, a 3% decrease from the previous week.
Ethereum
ETH L2/sidechain
BTC L2/Sidechain:
Alt L1:
[Derivative DEX]
In the past week (from August 14 to August 20), the overall trading volume of derivative DEX has shown a significant rebound. The main derivative DEX’s weekly trading volume was approximately $8.9 billion, an 80% increase compared to the previous week’s $5 billion. The surge in trading volume is due to the significant drop in Bitcoin and Ethereum last week, with a single-day decline exceeding 7%.
In terms of TVL, the overall TVL of derivative DEX is still declining, with funds slowly flowing out.
In terms of users, the daily active users of the derivative DEX increased compared to the previous week. Last week’s GMX daily active users were 729, while the previous week’s daily active users were 580, an increase of about 25%.
New Project Overview:
The derivative protocol HMX, which migrated from polygon to arbitrum, was launched at the end of July and achieved a good trading volume. The main features of this protocol are as follows:
1. It offers a full margin mode, which is more convenient than the step-by-step margin and has a higher fund utilization rate.
2. It accepts multi-asset collateralization, allowing traders to have richer trading strategies.
3. It provides a wider range of trading assets, including cryptocurrencies, foreign exchange, commodities, and U.S. stocks.
4. It offers higher leverage, with some products’ leverage reaching up to 1000 times.
5. Through abstract accounts, it offers a one-click trading feature. Traders can set this feature first, and then the trading process will be simplified, eliminating the need for multiple signatures for each transaction.
The current TVL is approximately $15.1 million, and the specific distribution is as shown in the following chart:
The trading volume showed a significant increase in mid-August, with the highest single-day trading volume reaching $148 million. There are currently multiple trading incentive measures, including loyalty points for traders, incentive rewards for open positions, rewards for liquidity providers, and referrer rewards.
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