The Balancer Report: Dencun
The Ethereum ecosystem has just received one of its largest upgrades ever. Dubbed Dencun, it aims to reduce gas fees on L2s and make them more accessible to end users.
This should drive L2 adoption even further and help Layer 2 chains scale and grow alongside their user bases. While the long-term effects are yet to be seen, there are some promising short-term developments already.
This week we are taking a deep dive into what Dencun is and how it came about.
Dencun went live on Ethereum on March 13, 2024 and Layer 2s followed almost immediately. The upgrade is not a standalone addition but rather part of Ethereum’s wider roadmap which pushes for further scalability, speed and decentralization. Dencun’s release marked a brand new era called “The Surge”.
In essence, the upgrade reduces L2 fees by introducing something called “proto-danksharding”. It may sound confusing, but the principle behind it is rather straightforward. Proto-danksharding allows more data to be stored onchain without requiring more blockspace. This lets layer 2 blockchains submit more data to Ethereum and therefore reduce gas for their users.
Dencun is a result of implementing several Ethereum Improvement Proposals. It had been in the works for a while and the tech behind it is impressively complex. The end-user experience is, on the contrary, as seamless as it gets. Just like the Merge, Dencun did not require regular users to take any action. They simply had to wait for it to go live and many noticed reduced fees almost immediately.
Some challenges still remain as gas costs are related to network usage and are likely to go up if it continues to grow. Nevertheless, Dencun is an important step towards ensuring that Ethereum is ready for its next chapter and is more scalable moving forward. Even though it is “the most complex fork” since the Merge (per the Ethereum Foundation), Dencun was shipped smoothly and brought immediate scalability improvements, which is a promising sign.
Layer 2s needed governance and / or team approvals for proto-danksharding to go live and many managed to get this done within hours of the upgrade going live. This shows that the ecosystem is aligned on the importance of the upgrade which is promising considering that more upgrades are coming.
Layer 2 scalability has taken a major leap towards making Ethereum more open and accessible to end users, protocols and developers. Ethereum’s roadmap is full of other coming upgrades which will likely make the ecosystem even stronger and will help L2s scale and grow faster.
Balancer is currently available on a variety of L2s and the protocol is gearing up for even more deployments. You can explore pools now on https://app.balancer.fi/#/ .
Now let’s explore the latest ecosystem news:
Balancer’s X account highlights the protocol’s LST growth.
Over $614,890,000 in LST liquidity is held in Balancer pools and the amount has been on the rise. Ve8020 governance positions account for a large proportion of it. This highlights the increasingly important role ve8020 is playing not only within the Balancer ecosystem, but also DeFi in general.
Aura ships incentives for the Tri-LRT pool.
Users can now deposit their pool BPTs into Aura and receive additional protocol incentives on top of points. Those incentives consist of Aura and Balancer APRs
Gyroscope teases something for March 19.
There aren’t any further details at the moment. The protocol has attracted more than $30 million and its monthly volume is almost 3x that.
Beethoven X contributors share 4 DeFi strategies for sFTMx holders.
Holding the token itself generates Fantom staking rewards and those willing to multiply them while keeping their exposure to FTM can use the $sFTMx / $FTM. It is optimized for IL and it provides additional BEETS rewards on top of swap fees.
The 70/30 sFTMx pool offers a way to hedge one’s exposure while capturing the potential FTM upside with the help of USDC. sFTMx can also be used as collateral for borrowing thanks to Polter Finance’s latest integration.
As is always the case, HiddenHand incentives can be explored here, the current round ends on March 21, 2024.
Balancer: TVL and Stats — Defilytica
Balancer’s Total TVL across all networks is sitting at $1.30b.
The Total Mainnet TVL is $967,39 with a dominance of 74,43%.
Speaking of protocol volume metrics, in this last week we were able to see a cumulative volume of $936,95m.
As for protocol fee metrics, we can verify cumulative fees of $428,77k.
As for our liquid wrappers, they are under the following parity to veBAL:
This section will list the top three expected pools to receive most of the next period’s emissions. Voting is open for four more days, and the next period is scheduled to start on Thursday at 00:00 am UTC.
- Mainnet — WETH / rETH — currently at 11.36%
- Arbitrum — GOLD / wstETH / USDC — currently at 5.20%.
- Base — GOLD / WETH / USDC — currently at 4.37%.
You can find an overview of the current incentives on the Balancer Mainnet below:
This week there is just one active vote on Snapshot:
- [BIP-559] Enable ezETH / wstETH [Arbitrum]
If passed, it will introduce one new Arbitrum gauge.
This week Dubstard shares another set of security tips that will help you stay safe:
- Do not open any links sent to you in DMs from any one pretending to be a “mod”, “admin” “staff member” and etc.
- Do not message anybody offering help if you DMs them first, those are scammers.
- Remember, Balancer operates primarily under the following domain: https://balancer.fi/
- Never share private keys, seed phases with anyone.
- Remember, there is NO AIRDROP!
- There is no such thing as “Node RPC fix”, “Encrypt Wallet”, “Node Sync”, “Wallet Synchronization”, “Rectification”, “Remediation”, “Fee Reduction”, “NFT sync”, “Synchronize wallet” and so on. All those are fake sites and imaginary “tech” sounding reasons to bait users to visit the bogus sites.
Balancer has a flourishing ecosystem. You’re welcome to contribute to it whether you’re a dev, a community person, or a graphic designer! We strive toward onboarding every new member in a smooth and personalized way.
Join the Ballers and start your Balancer journey now: http://discord.balancer.fi/
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This article is for informational and educational purposes only. It should not be construed as investment or trading advice or a solicitation or recommendation to buy, sell, or hold any digital assets. Transactions on the blockchain are speculative. Carefully consider and accept all risks before taking action.
