Weekly DeFi Index

This week's market capitalisation and volatility indices were positive at +7.14% and +27.93%, respectively, while the volume index was negative at -0.69%.

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Chart of the Week

Domo, the pseudonymous creator of the BRC-20 token standard, announced that his organisation, Layer 1 Foundation (L1F), will partner with Bitcoin infrastructure company UniSat. They will serve as BRC-20's lead maintainers, addressing governance issues within the ecosystem. The BRC-20 token standard operates on the Ordinals Protocol, enabling the trading of digital assets other than BTC on the Bitcoin network. 

It has sparked a broader discussion about the evolution and governance of BRC-20 within the community, especially when Unisat adopted the Ordinals Jubilee upgrade at the start of 2024 that aims to address the issue of “cursed inscriptions” by reclassifying them with positive numbers, enhancing protocol development and governance. This was then opposed by Domo, citing that the new tech might fragment the BRC-20 ecosystem. The conflict has since divided the crypto community.

With this partnership, Domo highlights the crucial role that UniSat has played in driving BRC-20 tokens forward. UniSat is recognised as one of the leading BRC-20 wallet and marketplace providers, with over 13% of the market share by Ordinals trading volume.

News Highlights

• Ethereum developers are counting down and gearing up for Dencun, a significant network upgrade set to reduce fees and enhance the efficiency of Layer-2 networks on the blockchain slated for 13 March 2024.

• Goldman Sachs, BNY Mellon, and other financial heavyweights have tested an enterprise blockchain called Canton Network. This initiative aims to facilitate seamless transactions and settlements for tokenised assets across various financial services, with participation from major institutions like DRW, Oliver Wyman, and Paxos.

• The Hong Kong Monetary Authority has initiated a regulatory sandbox for stablecoin issuers, inviting businesses with a genuine interest in developing stablecoin issuance to participate in testing operations within a limited scope. 

• Gnosis Chain successfully activated the Dencun hard fork on its mainnet, marking the first time a major Ethereum hard fork has launched on another chain before Ethereum.

• Tether's USDT has been launched on the mobile-focused Layer-1 platform Celo. 

• Ethereum Layer-2 solution Starknet is set to introduce a series of fee-saving enhancements alongside the Dencun upgrade and will begin subsidising transaction fees for users before the upgrade’s roll-out is complete.

• Layer-1 blockchain network Aptos removed daily transaction limits and reduced processing time on its Stargate bridge. This decision, made in collaboration with LayerZero and Stargate, enables unlimited activity for users of the Stargate Aptos bridge, facilitating multi-chain application development and offering educational resources to support developers leveraging the bridge.

• zkLink Nova launched its public mainnet, introducing an aggregated Layer-3 rollup network on Ethereum using ZK Stack. Its integration with various Layer-2 solutions like Arbitrum, Linea, Manta, Mantle, and zkSync acts as a connective layer between the Layer-2 rollups, enhancing liquidity and asset transfers across the Ethereum ecosystem.

• Layer-1 blockchain platform Nibiru Chain launched its public mainnet and secured listings on four major exchanges. At launch, the platform offers various functionalities like staking, decentralised governance, Web3 gaming, NFT minting, and trading.

• Solana MEV startup Jito Labs suspended mempool functionality offered by the Jito Block Engine because of increasing sandwich attacks on the Solana blockchain. Mempool functionality allows validators to capture maximum extractable value (MEV). However, the suspension may impact the value of Jito's native token (JTO) and its ability to provide MEV rewards to token holders. 

• DeFi protocol Unizen experienced a US$2.1 million hack, leading to immediate refunds for users who lost $750,000 or less. Unizen loaned funds to the company to refund affected users in USDC, while those who lost over $750,000 will be dealt with on a case-by-case basis, according to the official announcement.

Recent Research Reports

• Research Roundup Newsletter [February 2024]: We present to you our latest issue of Research Roundup, featuring trending market insights in February, charts of the month, and our deep dive into the DePIN market.

• DePIN: Crypto’s Rising Narrative: DePIN is currently one of crypto’s hottest narratives. We introduce what DePIN is, how it works, and the current market landscape.

• Alpha Navigator [February 2024]: Crypto and equities were up in February, while fixed income was under pressure. Interest rate decisions from major central banks upcoming in March.

Recent University Articles

• What Is Celestia? All About TIA Token: Introducing Celestia and the TIA token, the first modular blockchain network with a pluggable consensus for Layer-2 rollups.

• What Is Restaking? How to Use EigenLayer: Learn how to restake your tokens on Ethereum and how popular projects like EigenLayer and liquid staking work.

• Introduction to Crypto Derivatives, Options, and Futures: What are crypto derivatives? Learn about the main types, including options and futures, and whether to trade them.

Author

Research and Insights Team

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