Weekly DeFi Index

This week's market cap index was negative at -15.93%, while volume and volatility indices were positive at +16.73 and +74.40, respectively.

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Chart of the Week

• Layer-2 blockchain Optimism saw a noticeable drop in network fees after it successfully completed its Bedrock upgrade on 6 June. The latest upgrade involved optimising batch compression and using Ethereum as a data availability layer, which reduced network costs by 56% (from over 6,000 to ~3,000), according to data from Dune Analytics. This resulted in about US$150,000 in total user savings in a matter of days after the upgrade. 

News Highlights

• Google Cloud joined blockchain startup accelerator Cronos Labs to enhance its Accelerator Programme, which seeks to support startups by providing them with resources to develop AI-enabled Web3 applications within the Cronos ecosystem. 

• Stablecoin issuer Circle has rolled out its native USDC on the Arbitrum network, the leading Layer-2 scaling solution in Ethereum. This allows businesses with Circle accounts to seamlessly swap USDC across supported chains while leveraging Arbitrum’s Optimistic rollup technology to boost transaction throughput. Several key applications will support Arbitrum USDC, including Aave, Balancer, Curve, GMX, Trader Joe, and Uniswap. The rollout comes amid Arbitrum experiencing a bug on 8 June, which resulted in the network temporarily halting transaction processing for several hours.

• Ethereum scaling solution Polygon unveiled its blueprint for Polygon 2.0, a series of enhancements that will build the “value layer of the internet”. By incorporating ZK technology, Polygon 2.0 aims to unify Layer-2 chains through a novel cross-chain coordination protocol and will introduce upgrades to the blockchain’s architecture, tokenomics, and governance.  

• Decentralised exchange Uniswap announced its plans around the next iteration of its crypto exchange platform, Uniswap v4, which will bring customisable features and release the draft core code for the community to build on top of.

• Tether has announced a major chain swap to convert 750 million USDT from the Tron blockchain to Ethereum. According to the firm, this is part of its inventory replenishment, and the total supply of USDT will not change during the process. 

• Polkadot submitted a proposal to increase the active set of validators on its network, gradually adding five new validators in each era over a span of 20 eras and increasing the maximum number of validators from 297 to 500. 

• Stablecoin TrueUSD (TUSD) lost its US dollar peg after disclosing that it paused minting activities through its technology partner Prime Trust “until further notice”. The announcement sent the price to a low of $0.9951 on 10 June, recovering to $1 as of writing. 

• Decentralised lending platform Sturdy Finance experienced an exploit on 12 June, suffering a loss of nearly $800,000 in funds. Security firms confirmed that faulty price oracle caused the exploit, and the hack was carried out through a reentrancy attack. Sturdy Finance is offering a $100,000 bounty for returned funds.

Recent Research Reports

• Research Roundup Newsletter [May 2023]: In our latest issue of Research Roundup, we feature trending market insights in May, charts of the month, and our latest research reports exploring memes — what makes them successful, their role in crypto and Web3, and the resurgence of meme mania. 

• The Evolution of Memes and What Makes Them Successful: What are memes, how have they evolved, and what makes them successful? We also explore the role they play in crypto and Web3, and what the future holds for memes

• Alpha Navigator: Quest for Alpha [May 2023]: Asset classes mostly dipped in May and crypto remains the best performer YTD. US debt ceiling dispute defused. Interest rate decisions from multiple central banks in the coming month.

Recent University Articles

• What is Cryptocurrency: Still wondering what cryptocurrency actually is, how it works, and how to use it? We’ve got the answers in this crypto beginner’s guide.

• A Short History of Bitcoin Price: The price of BTC has experienced peaks and valleys ever since it launched in 2009. Learn all about Bitcoin's price history.

• How to Buy Bitcoin and Other Cryptocurrencies: Wondering how to buy your first Bitcoin? Or cryptocurrency in general? Here's a step-by-step guide on crypto buying for beginners.

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