DeFi Recap: Lending

Citadel.One
Dec 2, 2020 · 7 min read

Biweekly update, 19th November — 2nd December

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Welcome to the 5th DeFi Report curated by Citadel.one team! We picked up 4 leading DeFi projects from among Lending Platforms for you to keep track of the most important governance votes, discussions, and incentives. The general market overview, selected metrics, articles, and hot tweets — it’s time for our DeFi Recap. Let’s get started!

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We are happy to announce that this DeFi Recap is brought to you in collaboration with AAVE team. More news, updates & AAVE metrics inside! It’s never enough, right?

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Market Overview

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Source: debank.com
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Source: duneanalytics.com
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Source: duneanalytics.com
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Source: loanscan.com
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Source: loanscan.com
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Source: loanscan.com
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Aave

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Platform: aave.com
Value Locked:
$1.8B
Open Votes: none.
Governance Forum:
governance.aave.com
Twitter: twitter.com/AaveAave

The Aavengineers have been hard at work on Aave V2, so stay tuned!

November saw the first Governance Call take place, where we discussed many of the hot topics on the governance forum. Keep up with all the discussion on the governance forum here.

AIP-2 and AIP-3 both came to governance vote and were passed with overwhelming “yae” votes from $AAVE and $stkAAVE holders.

For a deeper dive into these proposals, check out this twitter thread.

Catch the episode of Yield TV where Stani talks the much-anticipated V2! Stani also gave a talk “Demystifying DeFi with Aave Protocol” at Hong Kong Blockchain Week, and Stani also spoke on a panel at Istanbul FinTech Week.

If you’ve missed out on any events, you can watch many of them on the official Aave YouTube channel!

In other news, Aavegotchi frens are doing an epic Aave-themed NFT raffle, and Aave has also teamed up with Axie Infinity to bring you a cool new collab. Be sure to check it out — gaming + NFTs + DeFi = 🔥!

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November saw a recovery across the cryptocurrency market with a 34% price increase across the protocol’s liquidity. Transaction volumes across the protocol are growing towards the record set in September with nearly $3m in deposits and liquidity close to its peak level. This is accompanied by good utilisation, in particular across stablecoins, leading to $1.6m of monthly income for depositors from borrow rates and Flash Loans. The table below shows a breakdown of the $1.9B in the protocol as well as the yields generated by each reserve.

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Flash Loans have become a key financial primitive of the DeFi ecosystem, reaching a cumulative volume of $1B on Aave, with $300m just this month. The $900k Flash Loan fees have been distributed to depositors. In November, Flash Loan fees represent 17% of the income.

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The Aave Protocol V2
It’s the moment we’ve all been waiting for… V2 of the Aave Protocol on mainnet!
Today, the Genesis Team is happy to introduce some Aavesome new features to unlock more value in DeFi and make the overall experience more seamless.

The Genesis Team is excited about this glow up, and your feedback throughout the V1 phase has been the inspiration for these updates. For more details on V2, feel free to read the Whitepaper. More details in the article.

Aave takes stake in Aavegotchi’s Pixelcraft Studios | by Isa Kivlighan
Aave is excited to announce its investment into Pixelcraft Studios, the Singapore-based company developing Aavegotchi — a Tamagotchi-inspired NFT collectibles game powered by the Aave Protocol.

Demystifying DeFi with Aave Protocol

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Maker

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Platform: makerdao.com
Value Locked:
$2.6B
Open Votes: 5

  1. Increase ETH-A Debt Ceiling
  2. Add renBTC as a Collateral Type
  3. Whitelist Yearn Finance on YFIUSD Oracle
  4. Add RWA-001 (6s Capital) as a Collateral Type
  5. Add UNI (Uniswap) as a Collateral Type

How Ethereum 2.0 Will Address Gas Issues and Enable Dai and DeFi to Scale
Soaring interest in DeFi has accelerated the Ethereum network reaching the limits of its capacity. The current architecture is able to process a maximum of 15 transactions per second (tps). That small number forces users to either accept long delays or pay high transaction fees.

Introducing DssGovRewards
Maker security relies on binding MKR holders to the consequences of their votes. This assumption is broken for MKR that is borrowed on a lending platform. The most extreme version of this problem with flash loans has been solved, but the underlying problem remains. Fundamentally, Maker is not secure if there is more MKR available to borrow than there is locked in Chief/DssGov. The simplest and probably most robust way to solve this is to pay people to lock their MKR in chief and thus keep their MKR off the market.

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Compound

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Platform: compound.finance
Value Locked:
$1.6B
Open Votes: none.

DAI Liquidation Event
From approximately 12:00am to 1:00am PT on Thanksgiving morning, the price of DAI on Coinbase Pro began trading at increasing prices and volume across the DAI/USDC, DAI/USD, and ETH/DAI pairs, reaching as high as $1.30. This coincided with a decline in ETH prices globally, of approximately 8% during the same time period.

Integrate Chainlink Price Feeds
This post is response to the recent DAI Liquidation Event (see above) and was originally intended to be a response to that thread, but is still awaiting moderator approval so I (Chainlink God) am posting my comment here on the proposal board.

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Cream

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Platform:app.cream.finance
Value Locked:$167.4M

Open Votes: 1
Increase DAI Collateral Factor to 75%

Increase DAI Collateral Factor to 75%
DAI is the most trust-worthy decentralized stable coin, and it’s the ERC20 token governed by MakerDAO. Increasing its collateral factor would definitely bring high benefit and low risk to the protocol without doubt.

$HUSD Listed on CREAM Ethereum
CREAM token holders voted in favor of adding a HUSD market on C.R.E.A.M., with 45.67k yes votes. Collateral factor for HUSD is 0%, meaning users can deposit HUSD but cannot use HUSD as collateral to borrow other assets until the collateral ratio is increased through a governance vote.

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