Weekly DeFi Index

This week's market capitalisation and volatility indices were positive at +12.80% and +45.74%, respectively, while the volume index was negative at -32.65%.

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Chart of the Week

Trading activity on decentralised exchanges has seen a surge from the previous month, with volume showing a 99.28% increase from US$98 billion in February to $176 billion today. This coincides with the wider crypto market bouncing back, with Bitcoin and Ethereum reclaiming $70,000 and $3,600, respectively.

Of the top chains, Avalanche and Solana emerged as the top performers with notable gains; Avalanche has seen its volume reach $9 billion (+228%) while Solana surpassed $54 billion (+143%) during the period. A few key developments and players have contributed to the recent upsurge – the positive performance of Avalanche may be attributed to its efforts to boost its meme coin ecosystem through a $1 million liquidity injection program, as well as the integration of Alipay's ordering solution, Alipay+ D-store with a Web3-enabled voucher program. Solana is also having its meme coin moment, however, the recent rise in meme coin tokens has attracted bots to the network.

News Highlights

• The Cronos Titan Upgrade successfully went live on the mainnet on 26 March. The upgrade introduces major node and RPC performance enhancements, paving the way for improved synchronisation speed and network robustness. It also focuses on boosting performance and interoperability with the Cosmos SDK ecosystem, laying the groundwork for future features like Interchain Accounts and Account Abstraction.

• BlackRock has initiated its asset tokenisation efforts by launching the BlackRock USD Institutional Digital Liquidity Fund, an asset fund tokenised on the Ethereum blockchain with an ERC-20 token called ‘BUIDL’.

• Vitalik Buterin announced ‘Ethereum Rainbow Staking’, a new framework aiming to balance the allocation between heavy and light services by allowing solo and professional staking providers to access differentiated tiers of staking depending on their needs.

• Stablecoin issuer Circle has introduced its cross-chain transfer protocol (CCTP) to Solana to enhance interoperability, enabling Solana developers to natively swap USDC tokens directly from Ethereum and other ecosystems.

• Polygon implements Napoli hard fork, integrating Dencun upgrades and a new Rollup Improvement Proposal (RIP), RIP-7212. RIP-7212 introduces a precompiled contract for secp256r1 curve support, allowing for cheap, secure, and fast P256 curve verification. 

• Frax Finance founder Sam Kazemian introduced a fee switch proposal under the Frax Singularity Roadmap that unveils a new tokenomics model, focusing on activating a protocol fee switch to enhance value distribution to veFXS holders.

• DeFi protocol Angle launched USDA, a U.S. dollar stablecoin which distributes yield to holders from its real-world asset (RWA) backing and DeFi lending revenue.

• Mysten Labs has demonstrated linear scaling capabilities through its Sui Network's Pilotfish extension, allowing it to increase throughput by eight times with eight machines and showcasing the potential for low-latency transactions.

• After a Layer-1 reorganisation, Polygon zkEVMfaced issues around its sequencer which is responsible for organising and combining transactions into batches before relaying to the Ethereum mainnet via Polygon smart contract. This only impacts the network's rollup but does not affect other parts of the ecosystem like Proof of Stake (PoS) and chain development kit (CDK).

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 Pepe Coin and How to Buy PEPE: Pepe the Frog leapt over Dogecoin and Shiba Inu in early 2024. Here’s what Pepe Coin is and why it’s so successful — and how you can buy PEPE on Crypto.com.

• Seed Phrases for Crypto Wallets: How They Work to Protect Your Assets: Seed phrases ensure that you always have access to your cryptocurrency wallet, even if you lose your private key. Here is how they work and how to use them.

• What Is dogwifhat and How to Buy WIF: dogwifhat has taken the meme coin narrative by storm. Here’s what to know about the latest dog coin and why it’s so popular.

Author

Research and Insights Team

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