Weekly DeFi Index

This week, the market capitalisation and volume indices dropped by -9.18% and -4.35%, respectively, while the volatility index increased significantly by +53.06%.

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• Aave is considering significant changes to its tokenomics, such as eliminating token slashing, introducing AAVE token buybacks, and distributing excess revenue. This strategy aims to better align incentives for both users and token holders.

• Aave launched its lending markets on Sonic, previously known as Fantom. The blockchain offers innovative fee monetisation strategies which could create new revenue streams for the decentralised finance (DeFi) platform. The expansion includes substantial liquidity commitments, and coincides with Aave discontinuing its lending operations on Polygon.

Chart of the Week

Virtuals Protocol experienced a 95% drop in trading volume on decentralised exchanges (DEXes), which was attributed to changing market dynamics and increased competition within the DeFi sector. The protocol is facing challenges in maintaining user engagement and liquidity, raising concerns about its viability and sustainability.

News Highlights

• Cronos and Crypto.com’s new partnership lets users transfer funds from a non-custodial wallet via Cronos EVM or Cronos zkEVM to top up their Crypto.com Card. The feature is a milestone in bridging decentralised and traditional finance.

• Tokenised real-world assets (RWA) issuer Ondo Finance joined the Mastercard network to improve cross-border payments. Ondo Finance’s Short-Term US Government Treasuries Fund (OUSG) product will be available on Mastercard's Multi-Token Network (MTN), giving businesses access to yields via tokenised assets.

• Ethereum’s Pectra upgrade deployed on the Holesky testnet, but failed to finalise because of a misconfiguration in the deposit contract addresses used by execution clients. This led to chain splits that resulted in network instability. The setback complicates Ethereum's upgrade process, leading developers to explore alternative testnets, such as Sepolia, for further testing.

• Ripple Labs announced a roadmap for building an institutional DeFi ecosystem on the XRP Ledger network. Key components of the roadmap include a permissioned DEX, a credit-based DeFi lending protocol, and a new token standard.

• Ethereum-based cryptocurrency wallet MetaMask partnered with Transak to simplify the process of converting digital assets to fiat. The collaboration added support for ten blockchains, allowing users to convert a broader range of tokens directly to fiat.

• Uniswap’s partnership with Robinhood and two payment platforms allow users to sell cryptocurrencies and deposit the funds directly into their bank accounts. This move comes after the US Securities and Exchange Commission (SEC) dropped its investigation into Uniswap Labs.

• MegaETH, a high-performance Ethereum Layer-2, plans to deploy its public testnet on 6 March. The testnet will be rolled out in phases, with applications and infrastructure teams being onboarded from 6 to 10 March, followed by user onboarding.

Recent Research Reports

• Research Roundup Newsletter [Jan 2025]: We present to you our latest issue of Research Roundup, featuring our deep dives into The Significance of Meme Coins and DeFAI.

• DeFAI: DeFi x AI: DeFi is witnessing a fresh wave of innovation, with one of the most exciting developments being the fusion of DeFi and AI — often referred to as DeFAI. In this report, we look into the DeFAI landscape, and delve into Griffain and HeyAnon as case studies, both of which are notable examples in the abstraction protocol category.

• From Trading to Broader Adoption: The Significance of Meme Coins: The launch of US President Donald Trump and his wife Melania’s meme coins, — $TRUMP and $MELANIA, — drove the meme coin hype to a new level. Meme coins are going beyond acting as an investment vehicle and becoming tools for community engagement, capital raising, and user acquisition.

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

• APY vs APR — What Do They Mean?Learn the differences between Annual Percentage Yield (APY) and Annual Percentage Rate (APR) in the crypto market.

• Ethereum vs Polygon: Scaling, Collaboration, and the Future of BlockchainExplore the symbiotic relationship between Ethereum and Polygon, comparing Ethereum's robust ecosystem with Polygon's innovative scaling solutions.

• What Is DeFi Lending?Learn how decentralised finance (DeFi) lending platforms can offer users potential passive income and access to loans without needing intermediaries.

Author

Research and Insights Team

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