Weekly DeFi Index

This week's market cap, volume, and volatility indices were negative at -12.58%, -17.13%, and -24.84%, respectively.

Check Price

Chart of the Week

The Bank for International Settlements (BIS) unveiled its strategic priorities for 2024, with a particular emphasis on central bank digital currencies (CBDCs) and tokenisation. The 2024 roadmap points to a continuation of its engagement with digital financial technologies, including the development of Project Promissa, an initiative that aims to revolutionise financial instruments by digitising promissory notes using blockchain technology.

This signals a continued growing interest in RWA and tokenisation, which is further bolstered by a sizeable increase in tokenised treasuries in the past year. Data suggested that tokenised US Treasuries experienced a 657% yearly growth rate in terms of market cap, rising from US$113 million to US$866 million as of 20 January. The expansion is likely to be attributed to existing platform growth as well as an increase in the number of companies entering the tokenised treasury space.

News Highlights

• Polygon's Chain Development Kit (CDK) received a significant boost from NEAR Protocol, which has integrated its data availability layer with the Polygon CDK. It boasts data storage costs that are much lower than the Ethereum mainnet.

• Stablecoin protocol Frax Finance completed its V3 rollout with the launch of Frax Bonds (FXB). FXB is a utility token that can be redeemed for FRAX at par upon maturity. FXB will be usable across DeFi protocols, including Curve Finance pools, trading pairs in search of leverage, and trustless debt repayment.

• Restaking protocol EigenLayer announced its plans to adopt a ’shared security’ system. It aims to enhance security by enabling the amount of ETH re-stakes on EigenLayer to be supplied to all services developed on the network simultaneously for the sake of a common security mechanism. This makes it economically impractical for attackers to target any single service or protocol.

• The Cosmos Hub community rejected a proposal to decrease the ATOM inflation parameter from 7% to 0%. 48.6% of validators voted against the proposal, and have raised concerns about its implication regarding the impact on the Hub’s security.

• A bug in Ethereum’s Nethermind client software took down a significant portion of the blockchain’s key operators during the weekend. Nethermind is a tool validators use to interact with the network, which powers around 8% of Ethereum validators. The incident was resolved within hours. However, it was critical enough to force the validators offline. It also reignited community discussions around Ethereum’s problem with ‘client diversity’, which posits that a network becomes more resilient if it’s not dependent on a single client software.

• Manta Network, a ZK proof-powered Layer-2 blockchain, was hit by a distributed denial of service (DDoS) attack a day after it issued its MANTA token. A DDoS attack is a common attack vector in which a server is flooded with internet traffic to prevent user access to connected online services and sites. This resulted in longer-than-expected withdrawal times and low network speeds for Manta.

• Aevo, a derivatives platform built on its own Ethereum-based rollup, has migrated to use Celestia as its data availability layer as part of its roadmap to support other protocols and expand its ecosystem.

Recent Research Reports

• Crypto Market Sizing Report 2023: Global crypto owners reached 580 million by the end of 2023.

• Exploring the Future of Blockchain Gaming: Trends and Opportunities: A comprehensive review of the blockchain gaming industry, the state of the gaming market, current challenges and opportunities, and what lies ahead for on-chain games.

• 2023 Year Review & 2024 Year Ahead: 2023 has been an eventful year for the cryptocurrency industry. In this report, we curate the top crypto events and trends of 2023, followed by our outlook for 2024.

Recent University Articles

• What Is Copy Trading and How Does It Work?: Copy trading allows users to benefit from the expertise of other traders without having to learn market analysis. Here’s how to get started.

• What Big Data Is and How It Might Change With Web3: Big data refers to the vast, complex datasets that shape our online experiences. Here’s a guide to understanding how it’s used.

• What Is the BRC-20 Token Standard for Bitcoin?: Learn about the BRC-20 token standard for the Bitcoin blockchain and the tokens that have been minted on it so far.

Disclaimer

The information in this report is provided as general market commentary by Crypto.com and its affiliates, and does not constitute any financial, investment, legal, tax, or any other advice. This report is not intended to offer or recommend any access to products and/or services. While we endeavour to publish and maintain accurate information, we do not guarantee the accuracy, completeness, or usefulness of any information in this report nor do we adopt nor endorse, nor are we responsible for, the accuracy or reliability of any information submitted by other parties.

This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of, or located in a jurisdiction, where such distribution or use would be contrary to applicable law or that would subject Crypto.com and/or its affiliates to any registration or licensing requirement.

The brands and the logos appearing in this report are registered trademarks of their respective owners.

We’re all ears.

Your feedback has always helped us provide insightful crypto market trends. Tell us how we can improve this newsletter further by taking a quick survey below (it will only take less than a minute). Thank you!

Take our survey now

Thank you for reading! We hope you find our Weekly DeFi and Layer 1 & Layer 2 News Update enlightening!

Hungry for more? Visit our Research Hub and University to access other insightful crypto research! 

Share with a friend if you like our email!

Share