Weekly DeFi Index

This week's market cap, volatility, and volatility indices were positive at +8.63%, +28.69%, and +70.08%, respectively.

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Chart of the Week

Bitcoin transaction fees recently reached a five-month peak, as a resurgence of Ordinals inscriptions boosted competition for block space. Nearly 1 million Ordinals mints occurred in the first week of November alone, the highest since May. Bitcoin miners were able to capitalise on this renewed interest, securing around 8.5% (worth approximately US$30.7 million) of transaction fees within the first ten days of the month, which came from the uptick in fee rates.

News Highlights

• Cryptocurrency exchange Crypto.com's Dubai entity, CRO DAX Middle East FZE, was granted a Virtual Assets Service Provider (VASP) license by Dubai's Virtual Assets Regulatory Authority (VARA), pending operational approval. Once fully approved, the license will allow Crypto.com to offer retail and institutional investors exchange, broker-dealer, and lending and borrowing services in Dubai. Visit Crypto.com for more details.

• Circle has released the V2.2 upgrade for its USDC and EURC stablecoins, which brings reduced gas fees, improved support for account abstraction, and enhanced security for transactions on EVM blockchains. The upgrade includes six smart contract changes, is fully backwards-compatible, and has been audited by the blockchain security firm Halborn.

• Circle's Cross-Chain Transfer Protocol (CCTP), an on-chain programme that enables users to migrate USDC between supported blockchains without a custodial bridge, will go live on Cosmos's Noble main network at the end of the month. The implementation of CCTP will allow for simple onboarding and bring significant liquidity to decentralised exchanges like dYdX and the rest of the Cosmos ecosystem. 

• LayerZero Labs launched ColorTrace, a novel value attribution algorithm to achieve globally consistent, economically feasible fungible token colouring. It serves as an on-chain attribution solution for fungible tokens, allowing verified minters to mark their tokens in circulation and enabling any form of fair tracking of contribution across a protocol’s success. 

• Polygon and NEAR are collaborating to introduce zkWASM to WebAssembly (WASM) blockchains in efforts to enhance scalability and decentralisation of the NEAR Layer-1. The zkWASM prover will simplify the proving process for NEAR validators and enable developers to work in programming languages other than Solidity. 

• The Nil Foundation is set to launch a new Ethereum rollup network, ‘=nil;’, which will be the first ZK rollup to enable sharding. It will leverage zero-knowledge proofs to validate transactions from shards before they get submitted to the primary Ethereum network. 

• Decentralised social media platform Lens has launched its V2 upgrade on Polygon’s main network, introducing new features such as multisig-managed profiles and tipping on ‘smart posts’. 

• Raft, a decentralised US dollar stablecoin protocol, experienced a security exploit resulting in a $6.7 million loss. The hacker leveraged a smart contract glitch to mint 6.7 million R tokens and subsequently swapped the unauthorised funds through liquidity pools on DEXes. Despite multiple security audits by blockchain security firms, the vulnerabilities that led to the incident were not previously detected.

Recent Research Reports

• Research Roundup Newsletter [October 2023]: We present to you our latest issue of Research Roundup, featuring trending market insights in October, charts of the month, and our insights on friend.tech and SocialFi trends.

• Friend.Tech: Explore what friend.tech is, its success factors and criticisms, and some of the competing platforms that have emerged.

• Alpha Navigator: Quest for Alpha [October 2023]: US Federal Reserve holds steady on interest rates. BTC starts Q4 strong, outperforming other asset classes.

Recent University Articles

• What Is a Strike Option and How Does It Work?: Strike Options are a straightforward way to predict where prices will be above the strike price at a certain time. 

• What Is Uniswap (UNI)?: Learn about Uniswap, an exchange on the Ethereum blockchain that uses the automated market maker model and liquidity pools for decentralised trading.

• Proof of Work vs Proof of Stake: Ever wonder what the difference between a PoS and PoW network is? Learn about the two most popular consensus mechanisms and how they work.

Disclaimer

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