Wake Up Ser, New RWA Yield Trading Just Dropped

A weekly recap of the largest crypto events and narratives, with an extra dose of insight.

Here’s what we have for you:

• Pendle RWAs

• Liquid restaking token

• Aerodrome launching soon

• Bumper early incentives

• friend.tech data

Another week, another DeFi vulnerability. This time it wasn’t as bad as Curve though. On Tuesday, Balancer announced that they had discovered a critical vulnerability affecting a number of V2 pools. In response, Balancer took emergency mitigation procedures, including activating its emergency subDAO so that users can exit from still vulnerable pools.

As of the last update, only 0.89% of the total TVL remains at risk, and at most, only 4% of the protocol’s TVL was ever at risk. If you are a Balancer LP, you are advised to withdraw ASAP using the UI. Crypto is still a very scary place.

In other news, EigenLayer raised its deposit caps again, and surprise surprise, those were filled up immediately again. There is now $241M in EigenLayer that literally does nothing, and I bet you if they raised caps again, it would fill up immediately again.

Similarly, on the LST front, Mantle invested 40,000 ETH into Lido. Through this agreement, Mantle is aiming to bootstrap itself as the LST network. This is the first time that Lido’s tiered rewards share program is being utilised, so Mantle will also receive a percentage share of Lido’s revenue.

Wake up babe, it’s RWA season. On the back of increased interest in RWAs, including MakerDAO’s eDSR which is passing back real yield of 5% to sDAI holders, and various tokenised treasury bills, more and more protocols are entering the RWA space.

Money printing season from RWA’s is in full steam, with some staggering numbers being reported across the board. We have Tether reporting a net profit of $850M on the back of treasury bills in Q2, Coinbase 10x’ing their interest income since a year ago, and Maple Finance launching on Solana. I’m starting to think I should raise for a protocol, and then just yeet the seed round into treasury bills and live off that.

RWA’s are all about yield. And who else but one of the largest yield protocols, Pendle, the premier yield trading protocol, joins the party. Pendle just announced a whole host of RWA markets, namely sDAI by Spark Protocol and fUSDC by Flux Finance.

Now users will be able to trade and hedge their yield on sDAI and fUSDC on Pendle. Think interest rates are going up later this year? There’s a trade for that. Want to fix your returns? You can do that. Want to yeet whenever Jerome Powell says money printer go brrr? The fUSDC market on Pendle’s got you.

Expect to see more RWA integrations across DeFi, whether that’s passing along yield from real world loans, or interesting derivatives built on RWAs. The world of RWAs is much much larger than we think, and you would be silly to ignore it.

Oh sorry, one last point. Binance Labs (WOAH) made an investment in Pendle Finance. It seems like even CEXs are onto the RWA and yield trading narrative. Imagine if one day Binance decided to integrate Pendle into their CEX UI 👀

It’s liquid restaking token season

• Stader Labs, a multi-chain liquid staking middleware platform recently announced $rsETH. Before you think, omg, not another liquid staking token, this one’s a little different.
  

• This will be a liquid staking token for restaked ETH, or more colloquially known as ETH/LSTs deposited into EigenLayer. Did someone say capital efficiency upon capital efficiency. Stader Labs is always out here innovating with the newest tech.

Aerodome poised for takeoff

• Aerodrome will officially launch next week on August 28. On that day, the airdrop will be distributed to veVELO holders. As a reminder, 40% of the initial locked supply will be distributed to the veVELO community.

   

• As of Wednesday evening, there’s still time to buy and lock some VELO as the snapshot hasn’t been taken yet. Velodrome has been seeing significant success on Optimism, especially after they lifted fee caps. Base still doesn’t have a “main” DEX that’s well known to the crypto community yet. Could Aerodrome be it?

Bumper incentives for early adopters

• Bumper, a DeFi protection protocol that allows you to hedge against price risk, is launching on 31st August 2023. With Bumper, one will be able to protect against downside volatility, lock in profits, and earn yield by providing stablecoins.

• They just announced a massive incentives program for early users, with up to $250K worth of incentives to be distributed. You can earn incentives by protecting your crypto or earning yield on stables. The rewards will be paid out in BUMP, the native token of the protocol.

I’m sure you are so so so sick of hearing about friend.tech by now. It’s dominated your Twitter feed for one week straight. Same my friend, same. But how do you evaluate if the party is really over? That’s right, you guessed it. Data.

The chart above shows that friend.tech TVL has ever so slowly been on the downtrend, from a peak of $7.25M a few days ago. On a similar metric, it looks like the number of new users has begun to slow down, with cumulative # of users peaking at roughly 100K.

Users and the amount of $ on the protocol are only one side of the equation. You would also want to take a look at user activity. And there is no better graph to see user activity than number of traders and trading volume. From the graph below, we can see that the trading volume has fallen off a cliff. From a peak of over $15M to less than $3.2M a few days ago. At this point, I think it’s safe to say the party is over.

One big winner of friend.tech were the MEV bots. We can see that the top MEV bot made off with nearly $580K in profits, while the second highest profit was $177K. These all add up to more than $1M or so, which is fairly staggering considering the TVL of the protocol only amounts to $6M or so.

One can use data like this to tell when a project has peaked. This type of data analylsis isn’t limited to a protocol like friend.tech. Data always shows the insights before the market prices it in.

BAG is criminally undervalued

Crazy things we have seen this year

DeFi TVL is at an all time low since the beginning of the last bull

Why crypto will 10x in the coming years

Aerodrome going live next week

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