This Week in DeFi – April 8

To the DeFi community,

This week Terra founder Do Kwon has declared war against prominent Dai stablecoin (DAI), via the launch of “4pool” – a stablecoin liquidity pool on Curve with an emphasis on UST and FRAX. The pool is attempting to attract liquidity from “3pool”, a similar pool containing DAI, by using large quantities of CVX to drive incentives.

Grayscale has shaken up its DeFi fund with the first quarterly rebalance of 2022, removing Synthetix (SNX) and Sushi (SUSHI) from its basket of assets. Both tokens failed to meet the minimum market cap threshold to remain in the fund. Taking their place are Avalanche (AVAX) and Polkadot (DOT).

A new Ethereum-based token standard is on the horizon, with proclaimed support from multiple high-profile protocols. The ERC-4626 token standard is designed for interest-bearing yield tokens, intended to be more secure and solve composability issues.

NEAR Protocol has raised a massive $350 million in funding from Tiger Global, FTX Ventures and others. The protocol has plans to blaze its own trail as a decentralized application (DApp) platform, already bridging to the Ethereum main chain.

Stablecoins have become a very hot topic over the recent weeks, both directly in DeFi and broader cryptocurrency headlines. As we all know, stablecoins play an integral part across most DeFi protocols and will continue to do so for a long time – especially until major decentralized currencies reach a saturation point for adoption. 

Governments and regulators are slowly closing in with their own influences, as highlighted by Treasury Secretary Janet Yellen in yesterday’s speech; the US government is more closely inspecting stablecoins, along with the risks they may pose to the traditional financial system. This influence will likely most strongly impact centralized stablecoins, which may eventually find themselves in direct competition with central bank digital currencies (CBDCs). As a result, this is placing increasing importance on decentralized alternatives. Newer examples such as Frax and TerraUSD have climbed the ranks quickly as of late, giving the well-established Dai a run for its money. 

In other news, stablecoin use has even crept as far as Bitcoin’s Lightning Network, as the “Taro” protocol receives tens of millions in fresh funding.

There’s a lot to be watching in the stablecoin space, with massive implications for the wider DeFi space – time will tell us how it all plays out.

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Highest Yields: BlockFi at 8.50% APY, Nexo Lend at 8.10% APY

Cheapest Loans: Celsius at 1%, Aave at 2.99% APY

MakerDAO Updates

DAI Savings Rate: 0.01%

Base Fee: 0.00%

ETH Stability Fee: 0.50%

USDC Stability Fee: 0.00%

WBTC Stability Fee: 0.75%

Highest Yields: BlockFi at 8.04% APY, Nexo Lend at 8.00% APY

Cheapest Loans: Celsius at 1%, Aave at 3.22% APY

 

 

Total Value Locked$79.78B (down 0.75% since last week)

DeFi Market Cap$136.68B (down 0.51%)

DEX Weekly Volume$17B (up 6.25%)

DAI Supply: 8.97B (down 2.71%)

[Aislinn Keely – TheBlock] – Convex Finance addresses bug that could’ve led to a $15 billion rug pull

[Osato Avan-Nomayo and Vishal Chawla – TheBlock] – Frax Finance may buy large amounts of major cryptos to back its stablecoin

[Omkar Godbole – CoinDesk] – Luna Foundation Guard Adds Nearly $230M of Bitcoin to Stack

[Helen Partz – The Daily Gwei] – Ledger launches NFT-focused hardware wallet Nano S Plus