The decentralized finance (DeFi) sector continues to attract heightened attention from cryptocurrency investors and traders. ForkLog has compiled the most important events and news from the last three weeks in a digest.
Key metrics of the DeFi segment
The total value locked (TVL) in DeFi applications surpassed $40 billion on February 13.
As before, the segment is led by lending protocols — Maker with TVL of $6.55 billion, Aave ($5.91 billion) and Compound ($4.56 billion).
Among DEXs, Curve Finance for the first time surpassed Uniswap in terms of total value locked — $4.1 billion vs $3.99 billion.
The vast majority of DeFi tokens have grown significantly over the last 7 and 30 days, and since the start of the year.
The total value of tokenized Bitcoins surpassed $8 billion (in the second half of January the figure neared $5 billion).
Trading volume on decentralized exchanges (DEX) over the last 30 days stood at $54.83 billion.
More than 50% of turnover in the segment is accounted for by Uniswap. The second-largest DEX by trading volume is SushiSwap, and Curve is third.
Against a backdrop of record-high Ethereum transaction fees, the DeFi projects built on Binance Smart Chain and Huobi Chain are gaining popularity.
As of writing, the aggregate TVL of applications on the Binance Smart Chain reached $4.51 billion.
Applications on Huobi Chain have a corresponding figure approaching $2 billion.
Among the advantages of dapps built on alternative blockchains are high transaction speeds and extremely low fees compared with Ethereum.
1inch project conducts an additional airdrop of native tokens
The decentralised exchange liquidity aggregator 1inch distributed governance tokens 1INCH among users.
The 1inch Foundation, in the course of the token distribution, sent:
- 3.57 million 1INCH — to 1,308 participants of the second liquidity mining program;
- 4.8 million tokens — to 9,094 Mooniswap users;
- 375,000 tokens to wallets Argent, Authereum, Gnosis and Polp, supporting transaction broadcasting;
- 310,000 1INCH — to users with limit orders.
Eligible to receive tokens were all users who interacted with the protocol before 00:00 UTC on December 24, 2020 and met one of the conditions:
- made at least one trade before September 15;
- made trades totaling at least $20;
- number of trades — at least four.
The 1inch Foundation also distributed 6 million 1INCH among Uniswap traders who had never exchanged tokens on the 1inch and Mooniswap platforms. Another condition was at least 20 days of trading and at least three trades conducted in 2021.
0x team unveils new protocol version with lower gas costs
The developers of the Ethereum-based DEX 0x unveiled its fourth version. Among the changes are lower gas costs and new capabilities for combining various platforms.
The project team promised to cut transaction fees by 70% on quote requests and by 10% on placing limit orders.
The new version will reduce user costs when using liquidity with Uniswap and SushiSwap compared with trading directly on those DEXs.
v4 includes an intelligent order-routing algorithm. It enables providing liquidity to a pool with any arbitrary token, exchanging liquidity pool tokens or collateral on lending platforms such as Compound or Aave ‘in a second’.
0x gains a ‘plug-and-play liquidity’ feature. The protocol will allow adding user liquidity pools through a standard interface before aggregating with other sources.
ChainSafe creates a bridge to move DeFi assets between Avalanche and Ethereum
The ChainSafe developers group has built a bridge between the Avalanche and Ethereum blockchains to move DeFi assets between the two ecosystems.
The bridge was built in collaboration with Protofire, Hashquark, POA Network, Avascan and Meter.io, which provided security as relays.
Thanks to the solution, Ethereum-based DeFi project developers will be able to offer users an alternative platform to perform transactions.
To use the new solution, users must lock Ethereum assets in the ChainBridge contract on Ethereum. Then Avalanche will issue equivalent tokens and deposit them at the desired address, after which the assets can be used in DeFi apps on the new network.
Ava Labs said that the issued tokens will be identical to the ones locked in ChainBridge. The appeal lies in low fees and high processing speed — under a second.
Equilibrium to build a Curve Finance version on Polkadot
The Equilibrium platform has begun work on implementing Curve Finance on Polkadot.
“Equilibrium will collaborate with Curve Finance to provide platform users and the Polkadot ecosystem with a Curve automated market maker version built on Substrate”, says the project’s blog.
In Singapore, a $50 million fund launched to invest in DeFi projects
Singapore-based investment firm Spartan Group has created a venture fund with $50 million in assets to support DeFi projects.
In the first closing, Spartan DeFi Venture Fund raised $30 million. A further $20 million is expected to be raised in March/April.
The firm has participated in financing MakerDao, Kyber Network, yEarn.Finance, Synthetix and other well-known projects.
Galaxy Digital and Coinbase invest $25 million in the Terra ecosystem
The Terra stablecoin developer Terraform Labs raised $25 million.
Investors included Galaxy Digital, Coinbase Ventures, Pantera Capital and others.
“The investments will go toward building protocols. Mirror — for synthetic stocks and Anchor — for savings, as well as other DeFi applications. The latter will form additional elements of the Terra algorithmic stablecoin ecosystem,” said Do Kwon, co-founder.
The startup also plans to expand interactions with other blockchains.
dYdX platform raises $10 million
The crypto-derivatives DEX dYdX raised $10 million in a Series B round led by Three Arrows Capital and DeFiance Capital.
Participants also included Wintermute, Hashed, GSR, SCP, Scalar Capital, Spartan Group and RockTree Capital.
The funds will be used for the following goals:
- increasing protocol decentralisation;
- expansion of the number of supported base assets in perpetual contracts and enhancing their functionality;
- forming partnerships with infrastructure players to bridge the gap between centralized and decentralized finance;
- expansion into new markets, notably China;
- growing the team with highly skilled professionals.
In February, dYdX plans to launch StarkDEX, a Layer-2 solution from StarkWare. The aim is to reduce user costs and increase throughput. StarkDEX is based on zero-knowledge proofs.
Opyn options platform attracts $6.7 million
The decentralized options platform Opyn raised $6.7 million in a Series A round.
The round was led by venture firm Paradigm. It also included Synthetix co-founder Kane Warwick and Aave founder Stani Kulechov.
“The funds will be directed toward further development and security of the Gamma protocol, as well as expanding the Opyn team. We will focus on key research and hiring new developers,” said Zubin Koticha, CEO and co‑founder of Opyn.
The alpha version of the options platform was launched in the summer of 2019.
Balancer DeFi protocol attracts $5 million via token sale
Balancer Labs raised $5 million from Three Arrows Capital and DeFiance Capital through a direct sale of BAL tokens.
Funds will go toward developing the second version of the protocol. Balancer v2 is expected to significantly reduce transaction costs and improve the user interface. The developers can expect easier integration with DEX.
Hacks and scams
Earlier today it emerged that an unknown hacker drained $37.5 million from the DeFi service Iron Bank (the second version of Cream Finance).
Exploiting a vulnerability in the protocol, the attacker conducted a series of operations on various lending platforms to generate stablecoins using flash loans.
On February 5, an unknown hacker withdrew $2.8 million from the yEarn.Finance pool. Shortly after, the DeFi project reimbursed the pool’s losses as a result of the attack.
Users of DeFi projects on alternative platforms are not immune to scams. Recently it emerged that four projects on Binance Smart Chain carried out exit scams, misappropriating user funds.
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