Weekly DeFi Index

This week's market capitalisation index was positive at +6.33%, while the volume and volatility indices were negative at -21.88% and -24.83% respectively.

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• Aave DAO is evaluating a strategic partnership with Lido to leverage its staking capabilities and boost the staked Ethereum market. By joining the Lido Alliance, Aave DAO could potentially increase the volume of Lido’s stETH token, which would benefit the overall Ethereum ecosystem.

• A MakerDAO governance delegate fell victim to a sophisticated phishing attack, resulting in the loss of US$11 million in digital assets. The attack involved the delegate signing a malicious permit phishing signature, which allowed the attacker to steal 3,657 MKR tokens (worth $8.7 million) and 2.56 million PT Ethena tokens (worth $2.4 million). As a result of the theft, the MKR token price dropped by 7% to $2,280, though it has since recovered to $2,374.

Chart of the Week

Stablecoin issuers are now the 18th largest holders of US debt. Collectively, they hold over $120 billion in US Treasury notes. This makes stablecoin issuers larger holders of US debt than some major current account surplus nations like South Korea, Mexico, and Germany.

The largest stablecoin issuers holding US debt are Tether (USDT), with around $91 billion in Treasuries, and Circle (USDC), with $29 billion in short-dated US debt, according to the data from Tagus Capital.

News Highlights

• The Ethereum Layer-2 network Blast will be launching an airdrop on 26 June, where 17% of the total token supply will be distributed to early users. According to the report, 50% of the Blast total token supply will eventually be distributed to the community. The breakdown of the airdrop allocation is as follows: 

  • 7% will go to users who have bridged Ether (ETH) or US Dollar Blast (USDB) to the Blast network;

  • 7% will go to users who have contributed to the success of decentralised applications (dApps) on Blast.

  • 3% will go to the Blur Foundation for future airdrops to its community.

• The Fantom Foundation announced a commitment of up to 200 million Fantom (FTM) tokens (~$120 million), to support the launch and growth of Sonic, a new network being developed on the Fantom platform.

• Solana introduced a new feature called 'ZK Compression' developed in collaboration with Light Protocol and Helius Labs. ZK Compression uses zero-knowledge (ZK) proofs to compress on-chain data, allowing developers to store crucial data on Solana's more cost-effective ledger space without compromising security or performance.

• Tether, the stablecoin USDT issuer, announced that it will halt the minting of its USDT stablecoin on the EOS and Algorand blockchain networks starting 24 June 2024. After the termination, Tether will continue to redeem USDT on EOS and Algorand “as usual” for the next 12 months, after which further changes may be evaluated.

• 41% of the top 10,000 wallets that received the new zkSync (ZK) token have already sold their entire allocation from the airdrop. An additional 29.2% of the top 10,000 wallets sold at least some of their ZK tokens. In total, over 486 million ZK tokens were sold across both groups. The top 10,000 wallets only represent around 1.4% of the 695,232 wallets that were eligible for the ZK airdrop and contributed to a 34.5% drop in the ZK token price since its launch, falling from a high of $0.32 to around $0.20.

• The newly launched ZRO token from cross-chain protocol LayerZero has fallen 17% since its launch on 20 June, amid controversy over its donation claiming mechanism. The controversy centres around LayerZero's requirement for users to donate $0.10 in USDC, USDT, or ETH per ZRO token they claim. LayerZero argues this is “not an airdrop” but rather a way to support the Protocol Guild and combat issues like airdrop farming and Sybil attacks. However, many in the crypto community criticised this as essentially a “tax” that changes the nature of the token distribution. LayerZero co-founder Bryan Pellegrino has defended the approach, saying users are not entitled to the tokens and can simply choose not to claim them if they do not want to donate.

Recent Research Reports

• Points Farming – Development, Significance and Controversies: Points farming has become ubiquitous in crypto recently. The report looks into its development and case studies, Friend.tech and EigenLayer, before delving into its significance and controversies.

• SocialFi – Business Models and New Developments: SocialFi in Web3 empowers users with enhanced data control and direct creator compensation without intermediaries, leveraging blockchain for better user engagement and innovative monetisation methods. 

• Research Roundup Newsletter [May 2024]: We present to you our latest issue of Research Roundup, featuring our deep dives into points farming and SocialFi, and many more.

Interested to know more? Access exclusive reports by signing up as a Private member, joining our Crypto.com Exchange VIP Programme, or collecting a Loaded Lions NFT.

Recent University Article

• What Are Yield-Bearing Stablecoins and How Do They Work?: Yield-bearing stablecoins sound like the best of both worlds — earning interest without volatility. Here’s how they work and how much yield holders can earn.

• What Is CorgiAI (CORGIAI) and How to Buy CORGIAI: Find out why CorgiAI, the cryptocurrency blending meme culture with AI on the Cronos blockchain, is catching the attention of crypto traders.

• How to Trade With Time-Weighted Average Price (TWAP) in the Crypto.com App: Retail investors can now set Time-Weighted Average Price (TWAP) orders in the Crypto.com App. Here’s how to give it a try for better price averages.

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Research and Insights Team

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