Weekly DeFi Index

This week’s market cap index was positive at +0.40%, while volume and volatility indices were negative at -8.96% and -44.30%, respectively.

Chart of the Week

Curve Finance, one of the biggest crypto decentralised exchanges, is experiencing a massive flight of capital after the platform suffered from an exploit resulting from vulnerabilities in an old version of the programming language Vyper. Curve’s total value locked (TVL) has dropped from US$3.25 billion as of 28 July down to $1.67 billion, representing a 50% plunge.

The MakerDAO community voted in favour of proposal GOV12.1.2, which will introduce the Enhanced Dai Savings Rate (EDSR). As detailed in the proposal, the EDSR will temporarily increase the effective DSR available to users in the early bootstrapping stage when DSR utilisation is low.

News Highlights

• Crypto.com has been approved for registration with De Nederlandsche Bank (DNB) as a provider of crypto services. This licensure milestone follows a comprehensive review of Crypto.com’s business and compliance posture in line with Netherlands’ Money Laundering and Terrorist Financing (Prevention) Act.

• The MakerDAO community voted in favour of proposal GOV12.1.2, which will introduce the Enhanced Dai Savings Rate (EDSR) to temporarily increase the interest rate granted to DAI holders.

• Cardano launched the Mithril protocol on its mainnet on 30 July. The Mithril upgrade aims to increase blockchain speed and efficiency, particularly by reducing node syncing time without compromising security. 

• CLabs, the development team behind the carbon-negative, mobile-first blockchain Celo, passed its proposal to migrate from an EVM-compatible Layer-1 blockchain to an Ethereum Layer-2 solution. 

• Over $47 million in various digital assets have been drained in a series of attacks on the decentralised exchange Curve Finance (CRV) on Sunday. Upwards of $100 million worth of cryptocurrency are at risk because of a reentrancy bug in certain versions of Vyper, a programming language used for writing smart contracts on the Ethereum blockchain. This leaves four Curve Finance pools (alETH/ETH, msETH/ETH, pETH/ETH, and CRV/ETH) vulnerable, but all other pools are safe and unaffected by the bug.

• A month after its launch, zkSync-based DeFi aggregator protocol Kannagi Finance has initiated an exit scam, draining about $2.4 million in the process.

• On 31 July, Twitter users began reporting that the BALD memecoin’s deployer account had removed 1,034 ETH in liquidity, allegedly initiating an exit scam and causing the token’s price to fall to near-zero.

• LeetSwap, a decentralised exchange built on Coinbase’s Layer-2 blockchain Base, has halted trading amid fears of an exploit, with reports that liquidity pairs on Base had been exploited for approximately 340 ETH (roughly $630,000).

Recent Research Reports

• Crypto Market Sizing Report H1 2023: Global crypto owners reached 516 million by the first half of 2023

• Research Roundup Newsletter [June 2023]: We present to you our latest issue of Research Roundup, featuring trending market insights in June, charts of the month, and our latest research exploring ZK rollups and Layer-0 protocols.

• The Development of ZK Rollups: Zero-knowledge rollups (ZK rollups) are still in their nascent stage. However, as the technology evolves, various methods to achieve compatibility with the Ethereum Virtual Machine (EVM) have emerged.

• Layer-0: Infrastructure for Customised Blockchains: Layer-0 protocols are the infrastructure that customised Layer-1 blockchains can be built on. We explore notable projects like Cosmos, Polkadot, Avalanche, LayerZero, and zkLink.

• Alpha Navigator: Quest for Alpha [June 2023]: Asset classes finished the first half of 2023 strongly, with crypto in the lead. Decelerating US inflation readings could ease market concerns for the time being, while BTC options implied volatilities remain muted.

Recent University Articles

• Top Gaming Tokens to Know in 2023: Get to know some of the top crypto gaming tokens of 2023 — their unique features and potential for growth in the ever-evolving world of crypto.

• What Is WorldCoin? The New Digital Identity Token: Delve into the workings of Worldcoin (WLD), an ambitious digital identity token co-founded by the CEO of OpenAI.

• Top Crypto Utility Tokens to Know in 2023: In this guide, we explore the top crypto utility tokens in 2023, delving into their unique use cases and potential growth in the market.

Disclaimer

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