DeFi. Analytical review. 28.06.2021

The total capitalization of the DeFi market continues to decline following stagnation in the overall cryptocurrency market. The ten largest projects capitalization as a rough indicator of the industry situation has fallen approximately by half from the May highs and is about $45 billion now.

The total value locked (TVL) of Ethereum and Binance Smart Chain, the two largest ecosystems by volume, also fell from their highs but with different dynamics. The BSC network taking advantage of its relative centralization and increased the amount of liquidity raised in June, unlike ETH blockchain projects. The Binance network has about 25 billion USD locked, while Ethereum has 48 billion USD.

DeFi ecosystems on second-order blockchains, Polygon and Solana, are also in diverging dynamics. After a strong liquidity incentive program in Polygon’s side-chain launched in April, the project has not slowed down and continues to cooperate with the most prominent blockchain protocols AAVE, Curve, SushiSwap, and the largest decentralized exchange on its platform — QuickSwap. As a result, TVL continues to grow faster than the market recovery and has reached 5 billion USD. The Solana ecosystem’s success is more modest — 530 million USD. After attracting an investment of 313 million USD earlier, there might be an increase in the team’s activity in terms of partnerships and development. Hopefully, the results will not belong in coming.

Uniswap

The fourth round of grant applications from the Uniswap grants program has concluded. The 14 winners include initiatives related to learning, visualization of various platform usage metrics, and collaborative grants (along with AAVE and Compound) to research optimal ways to organize DAOs in a DEFI environment.

Aave Token

The work within the previously launched program of using L2 Ethereum — Polygon continues. Judging by the increase in the volume of locked funds — this mutually beneficial cooperation has excellent prospects. We will closely monitor further steps.

Compound

The latest protocol news is related to the vote on Proposition 049, dedicated to the development of native cToken and its application in 7 new markets, as well as the transfer of some funds from liquidated positions to the compensation fund to have a more significant reserve for prevention of cascading liquidations in the future. Judging by the fact that the largest holders of the token — a16, Pantera capital, and Gauntlet lab voted FOR the proposals, it will adapt very soon.

MakerDao

The company’s blog continues to publish educational materials designed for a wide range of users. The latest posts dedicate to DeFi applications and an entertaining selection of books devoted to the crypto industry.

SushiSwap

The project team has released a short interview with one of the leading creators (Product Designer) about the mobile version development and the changes in internal protocols.

Balancer

As a result of community voting, the Polygon team accepted the proposal to launch a joint liquidity attraction project: 5 mln Matic and 200K BAL will be allocated in the next eight weeks to encourage users to use the Polygon network platform. Thus, the total cost of the program will be approximately 9 million USD.

Mirror Protocol

Last week, the team released a protocol update to version 2, closing a number of weaknesses from version #1.

Lido Finance

Listing of wrapped stETH (wstETH) offer on the Bancor decentralized exchange with an additional investment of 350K BNT.

PanCake

The application became the most popular (considering that DeltaTheta has not yet been released on the mainnet) on the BSC network. The number of network transfers, by the way, reached a local daily high of 11.9 mln.

yearnfinance

The project announced the launch of new storage and earning channel — yvTricrypto (based on the liquidity provision token on the Curve platform consisting of a USDT, wBTC, and wETH pool). We will review the possible use of this tool in the next section.

Yield review

Farming and incentive rates as part of the capital provision in the liquidity pools are constantly changing. As you could notice from the news above, new incentive programs to stimulate protocols appear rather quickly and often contain exciting conditions. However, in providing an overview of several fascinating and relevant options for how you can use funds while the market is in a phase of uncertainty, we would like to remind you of the risks and preservation of capital. With the launch of DeltaTheta Options, it will be possible to control these risks to some extent, but for now, the responsibility is entirely in your hands. Once again: this is not investment advice but an overview of opportunities in the current crypto market.

Option 1.

Use Convex or yearnfinance protocols to “accelerate” liquidity mining on the Curve platform. Since the original Curve platform provides a 2.5x increase in reward in case of Crv award tokens lock for up to 4 years. Convex creates a shared pool of Crv tokens and issues a derivative proprietary cvxCrv token that allows receiving complimentary tokens in addition to the initial bid to take advantage of this benefit. Currently, the maximum rate is about 54% (dynamic) for the USDT\wBTC\wETH pool.

Option 2.

The ongoing liquidity incentive program from the Alchemix protocol (the main feature of providing loans with self-default function) on the SushiSwap platform allows you to claim relatively high returns if you invest in the wETH\ALCH pool.

Investing in liquidity protocols involves many risks, and even the participation of significant capital or prominent investors does not guarantee investment success, as the story with Iron Finance showed. Always do your research and independently assess the risks you are willing to take.

If you have any questions, you can contact us as follows

via Telegramm — @DeltaTheta_Research

via email — Research@deltahteta.tech

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