This Week in DeFi - November 12

This week, Raydium and Serum announce LP rewards, Wormhole support for Polygon, Polkadot's Acala raises $400m, and Maple permissioned DeFi

Nov 12

To the DeFi community,

This week, Solana-based DEX Raydium announced a partnership with liquidity aggregator Serum to kickstart cross chain transactions with liquidity mining rewards. ERC20 tokens for popular protocols including dYdX, Uniswap, And Axie Infinity will get new incentivized trading pools over the coming weeks, with assets bridged using Wormhole.

Raydium @RaydiumProtocol

The Solana ecosystem is thriving, but there's still big opportunity in the cross-chain galaxy 🚀✨ That's why Raydium is partnering with @ProjectSerum to drive trading for cross-chain assets & launch Fusion Pools w SRM rewards! Check out details below: raydium.medium.com/bridge-the-gap…

Bridge the Gap: Cross-chain Assets come to RaydiumWith Solana Summer shining new light on the growing ecosystem, Raydium has seen a whole new wave of users eager to participate. And while seasons may be changing, there’s no cooling down as Solana…raydium.medium.com

Wrapped token cross-chain bridging solution Wormhole announced support for Polygon this week, the first L2 solution to be added to the wormhole network that currently connects Ethereum, BSC, Terra and Solana. With more than $5 billion currently on the Polygon chain, the move could unlock significant additional cross chain liquidity for popular protocols and tokens.

Polygon | $MATIC - We're hiring! @0xPolygon

1/2 🙌 @wormholecrypto is coming to #Polygon 🤩 Wormhole, the generic cross-chain messaging protocol, launches a bridge to Polygon that will seamlessly connect tokens and #NFTs to Wormhole’s existing network! 🌐 Experience now: bit.ly/WormholeBridge…

Acala, a Polkadot-based DeFi hub for decentralized exchange, DOT liquidity staking, and sporting its own decentralized stablecoin, raised more than $400 million in DOT tokens in the first parachain auction for the Polkadot ecosystem. More than 50,000 investors participated in the ‘crowdloan’, which will need to be paid back over time by the Acala protocol.

Ξlias Simos @eliasimos

.@AcalaNetwork’s crowdload campaign has hit over $400M in contributions making it the front-runner for winning the first parachain auction on Polkadot. But what’s Acala and why does it matter? Roll on 👇🏻

And Maple Finance launched a permissioned DeFi pool with an eye towards giving financial institutions the regulatory certainty they need to start using smart-contract based protocols in their business. The Pool will only accept interactions from verified KYC entities and will aim to collect $20 million in liquidity in the first month after launch.

Maple Finance @maplefinance

Proud to welcome @BlockTower and @GenesisTrading to the Maple ecosystem! BlockTower will be joining @OrthoTrading and @Maven11Capital as a Pool Delegate on Maple This is the first undercollateralized lending pool in DeFi where both institutional lenders & borrowers are KYC'd

CoinDesk @CoinDesk

Uncollateralized lending is taking a step forward with a permissioned @maplefinance pool between @BlockTower and @GenesisTrading. @Blockanalia reports https://t.co/OBvFNvO5aC

As the number of blockchains seeing significant traction in DeFi, NFTs, and other use cases continues to multiply, it can be harder than ever to know where to allocate capital for the best returns. Ethereum finds itself in an awkward position as a victim of its own success, now almost entirely reliant on L2 solutions to onboard users into the Ethereum ecosystem, just as L1 alternatives like Solana, Avalanche, and several others are hitting inflection points in UI, UX, and liquidity.

L1 Ethereum will likely remain on the sidelines until protocol upgrades can bring greater transaction throughput, but the remainder of the crypto market is highly fractured, limiting both composability and localized liquidity. The good news is a multitude of cross-chain bridges and swap protocols have emerged to begin meeting the demand for portable value across the overall crypto ecosystem.

The proliferation of these bridges raises a classic dilemma for the crypto investor - over time, are returns greater at the protocol layer, or the application layer? Much of the excitement of 2020’s DeFi summer revolved around the then-novel notion that protocols like Yearn or Aave, operating across multiple chains, would deliver better returns than betting on the growth of any one smart-contract platform like Ethereum or Solana.

The jury is still out on this question, but for application-layer fans, cross chain bridges represent the newest opportunity to get in on the ground floor. So much of application-layer investments turn on the particular tokenomics of a given project, so a shotgun strategy might yield less than optimal returns; always do your research. But for projects with the right market fit and well designed distribution strategies, life changing money could be on the table once again.

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