Weekly DeFi Index

This week's market cap, volume, and volatility indices were positive at +15.99%, +82.73%, and +239.28%, respectively.

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Chart of the Week

The introduction of Friend.tech has revitalised the dapp ecosystem and inspired new Friend.tech forks to rapidly develop, which have driven great interest in the SocialFi space. Friend.tech has been dominating the market since its launch; however, contenders such as Post.tech and Stars Arena are experiencing a major uptick in their activity from September — even outpacing Friend.tech at one point — while newer social platforms like Bitcoin-based New Bitcoin City are also quickly emerging as competitors and vying for a share of the market.

News Highlights

• Decentralised derivatives exchange dYdX has released the open-source code for its independent blockchain, dYdX Chain, which marks the initial phase of its mainnet launch. dYdX Chain is the DEX’s upgraded version (dYdX V4), which involves transitioning from an Ethereum-based Layer-2 blockchain to a Cosmos-based Proof-of-Stake protocol, secured and governed by dYdX token holders. 

• Celestia, a project dedicated to building a modular blockchain ecosystem, is preparing for the upcoming launch of its mainnet beta. It will introduce features such as a modular data availability layer with data availability sampling (DAS) light nodes, the Celestia-node API for rollups, and support for up to 8 MB blocks that can be scaled through on-chain governance. 

• Bitcoin Layer-2 infrastructure firm Lightning Labs has released the mainnet alpha of Taproot Assets, a protocol to enable stablecoins and real-world assets (RWAs) to be issued on the Bitcoin and Lightning Network. This version, Taproot Assets V0.3, will provide a "feature-complete developer experience" to issue, manage, and explore stablecoins and other assets on the Bitcoin blockchain.

• The Ethereum community has unveiled details of a new Ethereum Improvement Proposal called EIP-7540. It aims to introduce asynchronous deposit and redemption flows as an extension to the existing ERC-4626 tokenised vault standard, which some consider to have the potential to benefit protocols that deal with RWAs, cross-chain lending, and liquid staking. 

• Solana liquid staking provider Marinade Finance and Solana-based DEX Orca Finance have blocked users in the United Kingdom from accessing the site because of “compliance concerns” relating to Financial Conduct Authority (FCA) regulations.

• Safereum, a meme-based cryptocurrency project, is suspected of conducting an exit scam worth ~US$1.3 million, according to blockchain security analysts. CertiK confirmed the incident, and the developers of Safereum reportedly unlocked the supply of the token and dumped more than 600 ETH worth of its holdings, causing the price of the SAFEREUM token to plunge more than 94%. 

• Ethereum-based DeFi protocol Hope Lend has been drained of almost all its assets after a hack on 18 October. According to multiple blockchain security firms, two individuals reportedly stole a combined 526 ETH (worth approximately $825,357 at the time of writing). However, its developers claim that only a single hacker ran off with the 526 ETH, paying 263.91 in bribes to a validator allegedly managed by Lido Finance, eventually netting a profit of 264.08 ETH.

Recent Research Reports

• Research Roundup Newsletter [September 2023]: We present to you our latest issue of Research Roundup, featuring trending market insights in September, charts of the month, and our insights on the Ethereum Dencun upgrade.

• Ethereum: Dencun Upgrade and Proto-Danksharding: Ethereum’s next major upgrade is Dencun, which introduces Proto-Danksharding. We explore what it is and its benefits.

• Alpha Navigator: Quest for Alpha [September 2023]: Risk assets end 3Q 2023 mostly down on a QoQ basis, but YTD paints a more positive picture. Inflation retreats. The US avoids a government shutdown.

Recent University Articles

• What Is Chainlink (LINK)?: Learn how Chainlink, a decentralised oracle network, bridges the gap between smart contracts and real-world data.

• What Is Shiba Inu (SHIB)?: Hailed as the ‘Dogecoin killer’ by some, here’s all there is to know about the canine-inspired meme coin Shiba Inu.

• What Is Impermanent Loss? How to Manage It in DeFi Liquidity Pools: Learn about Impermanent Loss, a crucial concept in DeFi liquidity pools, and how to navigate and leverage it.

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