DeFi Bulletin: TVL Declines as Lido Enables Ethereum Withdrawals

The DeFi sector continues to attract heightened attention from crypto investors. ForkLog has compiled the most important events and news of the past weeks in a digest.

Key DeFi Segment Metrics

Total value locked (TVL) in DeFi protocols declined to $47.11 billion. The leader is Lido with $11.83 billion, followed by MakerDAO ($6.87 billion) and AAVE ($5.19 billion).

TVL in Ethereum-based applications fell to $27.12 billion. Trading volume on decentralized exchanges (DEX) over the last 30 days stood at $74.6 billion.

Uniswap continues to dominate the non-custodial exchange market — accounting for 53.4% of total turnover. The second DEX by volume is PancakeSwap (29.7%).

Lido Opens Ethereum Withdrawals With Activation of Protocol v2

On May 15, the liquid staking platform Lido Finance deployed the second version of the protocol after a successful community vote.

The update received 100% support.

Major points in the Lido v2 protocol update included:

• the ability to withdraw from staking Ethereum, burning stETH at a 1:1 ratio;
• the launch of a Staking Router designed to diversify the validator set and promote further decentralisation.

Some other changes, including the smart contract Oracle updates and the off-chain PoW, are designed to support the two new key options.

Lido v2 underwent several security audits by Sigma Prime, ChainSecurity, Oxorio, Statemind, HEXENS, MixBytes() and Certora.

Bakkt Delists DeFi Tokens from Apex Crypto

Bakkt delisted most of the DeFi tokens previously listed on Apex Crypto. The move was explained as an effort to comply with regulatory requirements.

Bakkt closed the deal to acquire Apex Crypto in April 2023. The latter is a platform for integrated cryptocurrency trading, which provides trade execution, clearing, as well as custodial services and tax-related calculations.

The company removed 25 of the 36 assets previously available, including Aave (AAVE), Avalanche (AVAX), Cosmos (ATOM), Fantom (FTM), Filecoin (FIL), GALA (GALA), Sushiswap (SUSHI) and Uniswap (UNI).

The deal with Apex Fintech Solutions (the former owner of Apex Crypto) was part of the company’s shift to a B2B model. In February the platform closed its retail crypto trading app.

Unstoppable Finance to Launch Europe’s First DeFi Bank

The German startup Unstoppable Finance announced the launch of Europe’s first fully regulated DeFi bank and stablecoin.

The project promises full reserve backing for the new “stablecoin”, as envisaged under EU law.

On April 20, the European Parliament approved rules for regulating the crypto-asset market. The new provisions will come into force in 2024.

Co-founder Peter Grosskopf said that the traditional banking system is far from stability, and the recent crash of the financial sector proved the need to rethink it from the ground up.

“With the advent of stablecoins, money has become programmable, they are transferred around the clock in seconds, and they provide transaction transparency. It is time to use this important innovation and rebuild the financial system as we would build it today,” he explained.

According to Grosskopf, the euro-backed stablecoin will be classified as a “token of electronic money” and will serve as a bridge between traditional finance and the decentralized economy.

Co-founder noted that thanks to the DeFi bank they will be able to deposit funds with the ECB at any time to back their “stablecoin” and other operations.

MakerDAO Launches Competitor to Aave’s Lending DeFi Project

The MakerDAO developers launched Spark Protocol — a liquidity market based on the DAI stablecoin and collateral assets backing the DeFi platform.

Spark Protocol is set to become Maker’s first native lending interface. The DeFi platform could gain an additional revenue stream from lending its users under a strategy for using reserve assets.

The functionality of the solution is based on the third version of the project’s smart contract system Aave.

Initially, users will be able to borrow DAI at an annual rate of 1.11%.

Interest rates for Spark Lend are set by the community via voting. This differentiates the project from competitors where rates are formed by supply and demand.

Also on ForkLog:

• DeFi protocol Deus Finance was hacked for $6 million.
• The Swaprum DEX team is suspected of an exit scam worth $3 million.
• The Optimism team will activate the Bedrock upgrade.
• Aave launched the third version of the protocol on the Metis Network.