DeFi in Ether: $96B in DeFi, Aave Arc market launched, Gnosis Protocol turns CoW Protocol, Connext and LayerSwap partner up, Set Protocol is live on Optimism, Index Coop launches Bankless GMI index, The new Raiden releases on mainnet, dYdX V4 — a road to full decentralization, The DAO token is now live on Bancor, and much more!

Paradigm

Published in

Paradigm

16 min readJan 18, 2022

Biweekly update on Ethereum DeFi ecosystem vol.45, 4th January — 18th January

TL;DR

$96B in DeFi this week, currently at ~ $95.9B, with Maker dominance 17.80%.
Aave Arc market launched with 30 regulated financial institutions. The lead data scientist for Twitter Spaces is joining Aave as the DeFi protocol ponders a social media play. Latest Aave News: Arc, UST Snapshot, Rainbow, and more. Follow the Aave governance forum.
mStable🤝Abachi — Abachi deploys US$1.5m of its Treasury into mStable Save: Abachi — a platform that builds, funds and acquires tech that will onboard real-world users to DeFi — has deployed US$1m of its treasury funds into mStable Save on both Ethereum and Polygon networks and plans to deploy US$500,000 in the coming days. Introducing the mStable Dashboard: The team launches the mStable Dashboard as the new home page for the mStable App which will give users more context about yield opportunities on mStable from our flagship Save and Feeder Pools. Check out mStable’s latest proposals here.
Compound Proposals 79 ‘Migrate Contributor Streams to Sablier’, and 81 ‘Risk Parameter Updates for ETH’ passed through the governance system with broad community support, Proposals 78 ‘Risk Parameter Updates for ETH’ and 80 ‘Update cSUSHI cToken Implementation failed’.
Gnosis Chain Weekly · 14 January, 2022. Hop Protocol Gnosis Chain integration is live. GNO rewards added to Sushiswap. A new GNO market is now available on Agave.finance along with AGVE and GNO liquidity incentives. To get a 10,000 foot view of the Gnosis ecosystem, checkout this infographic released by HC Capital this week.
Read in the latest Yearn Finance Newsletter #53: Transparency at Yearn; Yearn Web updates; Register for the next iteration of yAcademyDAO; Yearn has received an additional 1M FTM grant from the Fantom Foundation; Vaults at Yearn; Ecosystem News. Andre Cronje talked a week ago also about ve(3,3) , a new protocol, its initial distribution, competition, and how they’re building a protocol for protocols.
dYdX V4 — Full Decentralization: The top priority is to release the next version of the protocol, V4, by end-of-year 2022. dYdX V4 will be fully decentralized, with no central components. No central party (including dYdX Trading Inc.) will have the ability to receive trading fees on dYdX V4. The current dYdX perpetuals protocol will eventually be deprecated after the migration to dYdX V4 is complete. Maximum leverage reduction to 20x: As of January 14, 2022, the maximum initial leverage available to BTC and ETH markets will be reduced to 20x from 25x. This means that initial margin requirements for these markets will be increased to 5% from 4%.
Gnosis Protocol turns CoW Protocol: As the Gnosis Protocol team (aka CowSwap) is on the verge of spinning out, they will rebrand from Gnosis Protocol to CoW Protocol. Scaling prediction markets via pooled liquidity & market creation via oracles. Find out the latest GnosisDAO proposals here.
Learn about GYSR streamed KPI options: GYSR makes it even easier to distribute KPI options with native support on their platform. The EOY and UMA’s Multi-DAO Future: 2021 has been a year of decentralization for the organizations supporting the UMA protocol. The protocol now has two DAOs supporting it: The UMA token holders DAO and the evangelist SuperUMAn DAO. It also has a third organization, which is Not a DAO — the Risk Labs foundation, that operates within a mandate to support the UMA ecosystem. RL has diversified its holdings and has over $50M in non-$UMA token assets to provide years of development runway.
The Enzyme Council recently voted on growing and specializing. The first squad to be split out & separated will be the technical council. If you’d like to consider applying, check out the criteria and apply here. Check out MFP: Enzyme Funding Proposals here.
Index Coop launches Bankless GMI index: Index Coop is on a mission to make crypto investing simple, accessible, and safe for everyone. Conversations with the Coop — Dr. Karl Kreder — Phonon DAO, GridPlus: The Phonon Network is a peer-to-peer network independent of the internet. Transactions occur without the need to broadcast it to an external ledger, and are fully contained between the two parties. Find the latest Index Coop proposals here.
Set Protocol live on Optimism — Enabling Structured Products on Layer 2: Whilst today in this early deployment you can create and invest into Sets natively on TokenSets utilizing the great transactional benefits of Optimism compared to Ethereum, the real focus and excitement lie with our roadmap and platform-native DeFi integrations to come.
0x API is now live on Optimism, aggregating liquidity across Uniswap and Synapse. Initial integration partners include Matcha, DexGuru, DexKit, Mean Finance, Metric Exchange, Coinbase Wallet, Set Protocol, Zapper, and Zerion. 0x Ecosystem 🪐 Update #16: Highlights, network insights, and news from across the 0x ecosystem — November / December 2021.
Curve now live on Optimism.
Tornado Cash live on Optimism: The community has recently deployed Tornado Cash smart contracts on a new blockchain. Through a successful deployment ceremony, the protocol has newly settled on another Ethereum Layer-2. As of now, Tornado Cash is actively spinning on Optimism. With this latest addition, Tornado Cash currently functions on Ethereum, Binance Smart Chain, Polygon, xDAI Chain, Avalanche, Arbitrum and, last but not least, Optimism.
The DAO token is now live on Bancor. CTSI is Now Listed on Bancor. With an overwhelming 99.96% Yes votes, CTSI is now further expanded. DeFi by Design EP59: Building Sustainable Yields in DeFi w Impermanent Loss Protection.
The latest Balancer Report is here. Kia from Balancer Labs published their biweekly community update. Check out the recording from this week’s Technology Update if you missed it. Previously, mStable and Balancer DAO announced Treasury Swap.
Loopring Quarterly Update (Q4) + 2021 Recap: The fourth and final edition of 2021 Loopring Quarterly Updates. You can catch up on the previous quarter here and you can also receive these updates in your inbox every quarter by subscribing here.
Uniswap is partnering with leading crypto tax providers to help US-based Uniswap app users and LPs navigate a cumbersome, costly, and confusing tax filing process, and covering the cost of tax forms through TaxBit. They’ll share more details as the US tax season approaches. In collaboration with Scopelift, Uniswap releases Seatbelt, a new test suite to strengthen DAO governance. UGP Wave 6 — GM 2022. UNI is now on Nexo. Latest Uniswap proposals are here.
Coruscant and Krittika: The new Raiden Releases on Mainnet: The team wrapped 2021 up with newly released mainnet versions of the Python and Light Clients. The Raiden protocol is now stable, has reached highest performance and is feature-complete. The new features provide faster and cheaper use of the protocol. Next steps for Raiden: Deployment on an L2 to further decrease on- and offboarding costs; Empowering our community via community governance to shape the future of the Raiden protocol.
Connext and LayerSwap partner up to enable on-ramp from CEXs to a broader list of chains & L2s. The integration is live starting with Polygon support.
Kyber Ecosystem Report #28 (2021 Recap). New on KyberSwap: Live Price Charts and Trade Route Display: KyberSwap now provides live price charts for all tokens. And back by popular demand, the team has also made your trade routes more prominent, showing you which DEXs and liquidity sources your trade is routed through for KyberSwap to give you the best rates. The Parallel (PRL): Add Liquidity and Trade at the Best Rates on KyberSwap. Find out all Kyber proposals here. Check them out on GitHub.
Squeeth is now live on mainnet: Check out the dApp — squeeth.opyn.co
Euler launches $1M ImmuneFi Bug Bounty Programme: The ImmuneFi Bug Bounty programme aims to strengthen Euler’s security while boosting collaboration with the greater DeFi ecosystem as part of our insurance partnership with Sherlock Protocol.
Vesta Finance announces fundraise: Vesta’s contributors announced a small strategic fundraise from key members of the DeFi community led by Tetranode and DCFGod. Also, Vesta Finance announces a treasury bootstrapping event.
Argent adds Aave to zkSync wallet: Earn interest with up to 100X lower fees than L1.
Zapper collection page is live: This new feature gives you quick access to collection stats such as Floor Price, and a quick view of NFTs you own within that collection.
A lawsuit filed against PoolTogether, a blockchain app that gamifies savings by crypto holders, is challenging DeFi’s claims that its protocols are autonomous and self-governed.
The Union released: Are you a CVX locker, but unhappy due to high Ethereum gas costs, voting manually and/or not knowing what to vote for? Join The Union today.
Element Finance details core principles: As the Element Protocol pursues decentralization and control is handed over to the DAO, the team offers, for debate and consideration, the following as core tenets and principles under which the DAO should consider operating.
Synthetix partners with Gauntlet for risk management modeling: The unique mechanics of the Synthetix protocol require deep analysis to optimize, and Gauntlet has the resources, systems, and experience to ensure that Synthetix has both proper risk management and optimized capital efficiency.
Vitalik’s multidimensional EIP 1559 and a reflection of the past decade.
2021 in review via top 20 Ethereum gas consumers.
Web3 developer next steps.
How to see the value of web3.
Exploring the Ecosystem 2: DeFi on the Arbitrum Rollup.
And more!

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Total Value Locked in DeFi

$96B in DeFi this week, currently at ~ $95.6B, with Maker dominance 17.80%.

Top DeFi Tokens by Market Capitalization

Total Market Cap: $92,930,729,087

DeFi Aggregators

mStable:

mStable🤝Abachi — Abachi deploys US$1.5m of its Treasury into mStable Save: Abachi — a platform that builds, funds and acquires tech that will onboard real-world users to DeFi — has deployed US$1m of its treasury funds into mStable Save on both Ethereum and Polygon networks and plans to deploy US$500,000 in the coming days.
Introducing the mStable Dashboard: The team launches the mStable Dashboard as the new home page for the mStable App which will give users more context about yield opportunities on mStable from our flagship Save and Feeder Pools.
Check out mStable’s latest proposals here.

Yearn Finance:

Andre Cronje talked a week ago also about ve(3,3) , a new protocol, its initial distribution, competition, and how they’re building a protocol for protocols.

-Read in the latest Yearn Finance Newsletter #53:

Transparency at Yearn
Yearn Web Updates
Register for the Next Iteration of yAcademyDAO
Yearn Has Received An Additional 1M FTM Grant From the Fantom Foundation
Vaults at Yearn
Ecosystem News

Lending

Aave:

Aave Arc market launched with 30 regulated financial institutions.
The lead data scientist for Twitter Spaces is joining Aave as the DeFi protocol ponders a social media play.
Latest Aave News: Arc, UST Snapshot, Rainbow, and more.
Follow the Aave governance forum.

Compound:

Compound Proposals 79 ‘Migrate Contributor Streams to Sablier’, and 81 ‘Risk Parameter Updates for ETH’ passed through the governance system with broad community support, Proposals 78 ‘Risk Parameter Updates for ETH’ and 80 ‘Update cSUSHI cToken Implementation failed’.
Find the latest Compound proposals here.

Gnosis Chain (formerly xDai Chain):

Gnosis Chain Weekly · 14 January, 2022

To get a 10,000 foot view of the Gnosis ecosystem, checkout this infographic released by HC Capital this week.

Interviews from Gnosis co-founder Stefan George and prominent developer Auryn Macmillan bring context around the xDai-Gnosis Chain merger, cover some Gnosis history, and layout some of the goals and opportunities they see for the Gnosis Chain. These are great and informative watch/listens if your are an original xDai community member looking to get up to speed, or a new community member just joining GC.

Hop Protocol Gnosis Chain integration is live.
GNO rewards added to Sushiswap.
A new GNO market is now available on Agave.finance along with AGVE and GNO liquidity incentives.
Genuino.world dropped the @ACFFiorentinaEN Season 2 Pack, including NFTs that match with game-worn player jerseys.
CoinQuest, a free-to-play, play-to-earn Blockchain MMORPG launched on the Gnosis Chain.

Wallet Updates:

Gnosis Chain integrated with the imToken Wallet.
D’CENT wallet updates include support for the Gnosis Chain.
TokenPocket now supports the GC.

Derivatives, Swaps and Prediction Markets

dYdX:

dYdX V4 — Full Decentralization:

The top priority is to release the next version of the protocol, V4, by end-of-year 2022
dYdX V4 will be fully decentralized, with no central components
No central party (including dYdX Trading Inc.) will have the ability to receive trading fees on dYdX V4
🪦The current dYdX perpetuals protocol will eventually be deprecated after the migration to dYdX V4 is complete

Maximum leverage reduction to 20x: As of January 14, 2022, the maximum initial leverage available to BTC and ETH markets will be reduced to 20x from 25x. This means that initial margin requirements for these markets will be increased to 5% from 4%.

Gnosis:

Scaling prediction markets via pooled liquidity & market creation via oracles: A guest post by the Azuro team.
Gnosis Protocol turns CoW Protocol: As the Gnosis Protocol team (aka CowSwap) is on the verge of spinning out, they will rebrand from Gnosis Protocol to CoW Protocol.
Find out the latest GnosisDAO proposals here.

UMA:

Learn about GYSR streamed KPI options: GYSR makes it even easier to distribute KPI options with native support on their platform.
The EOY and UMA’s Multi-DAO Future: 2021 has been a year of decentralization for the organizations supporting the UMA protocol. The protocol now has two DAOs supporting it: The UMA token holders DAO and the evangelist SuperUMAn DAO. It also has a third organization, which is Not a DAO — the Risk Labs foundation, that operates within a mandate to support the UMA ecosystem. RL has diversified its holdings and has over $50M in non-$UMA token assets to provide years of development runway.

Fund Management

Enzyme Finance (formerly Melon):

The Enzyme Council recently voted on growing and specializing. The first squad to be split out & separated will be the technical council. If you’d like to consider applying, check out the criteria and apply here.
Check out MFP: Enzyme Funding Proposals here.

Index Coop:

Index Coop launches Bankless GMI index: Index Coop is on a mission to make crypto investing simple, accessible, and safe for everyone.
Know Your DeFi Pulse Index (DPI) Token: Yearn.finance (YFI): YFI is one of 17 tokens currently held in the DPI product. Here’s a basic overview of what you need to know about this exciting token.
An Introduction to Cryptocurrency: To understand the fundamentals of crypto, it is important to first understand what a blockchain is.
Can Numerai become the Last Hedge Fund? Numerai is a data-based protocol disrupting the $8T hedge fund industry.
DeFi 101: What is DeFi?
Conversations with the Coop — Dr. Karl Kreder — Phonon DAO, GridPlus: The Phonon Network is a peer-to-peer network independent of the internet. Transactions occur without the need to broadcast it to an external ledger, and are fully contained between the two parties.
Find the latest Index Coop proposals here.

Liquidity Relays

0x project:

0x Ecosystem 🪐 Update #16: Highlights, network insights, and news from across the 0x ecosystem — November / December 2021.
0x API is now live on Optimism, aggregating liquidity across Uniswap and Synapse. Initial integration partners include Matcha, DexGuru, DexKit, Mean Finance, Metric Exchange, Coinbase Wallet, Set Protocol, Zapper, and Zerion.

1inch:

Why should you integrate 1inch APIs into your service? In this article, the team explains the advantages that you can get from integrating the 1inch Aggregation API and 1inch Limit Order API into your project.

Balancer:

The latest Balancer Report is here.
Kia from Balancer Labs published their biweekly community update
Check out the recording from this week’s Technology Update if you missed it
Previously, mStable and Balancer DAO Announce Treasury Swap

Bancor:

The DAO token is now live on Bancor:

Kyber:

New on KyberSwap: Live Price Charts and Trade Route Display: KyberSwap now provides live price charts for all tokens. And back by popular demand, the team has also made your trade routes more prominent, showing you which DEXs and liquidity sources your trade is routed through for KyberSwap to give you the best rates.
The Parallel (PRL): Add Liquidity and Trade at the Best Rates on KyberSwap
Find out all Kyber proposals here. Check them out on GitHub.
Kyber Ecosystem Report #28 (2021 Recap)

Loopring:

Loopring Quarterly Update (Q4) + 2021 Recap: The fourth and final edition of 2021 Loopring Quarterly Updates. You can catch up on the previous quarter here and you can also receive these updates in your inbox every quarter by subscribing here.

Uniswap:

Uniswap is partnering with leading crypto tax providers to help US-based Uniswap app users and LPs navigate a cumbersome, costly, and confusing tax filing process, and covering the cost of tax forms through TaxBit. They’ll share more details as the US tax season approaches.
In collaboration with Scopelift, Uniswap releases Seatbelt, a new test suite to strengthen DAO governance
UGP Wave 6 — GM 2022.
UNI is now on Nexo.
Latest Uniswap proposals are here.

Payments Networks

Raiden Network:

Coruscant and Krittika: The new Raiden Releases on Mainnet: The team wrapped 2021 up with newly released mainnet versions of the Python and Light Clients.
The Raiden protocol is now stable, has reached the highest performance and is feature-complete. The new features provide faster and cheaper use of the protocol. Next steps for Raiden:

1. Deployment on an L2 to further decrease on- and offboarding costs

2. Empowering our community via community governance to shape the future of the Raiden protocol

Synthetix:

Synthetix partners with Gauntlet for risk management modeling: Synthetix partners with the Gauntlet team to provide automated financial risk management simulations for the Synthetix protocol. The unique mechanics of the Synthetix protocol require deep analysis to optimize, and Gauntlet has the resources, systems, and experience to ensure that Synthetix has both proper risk management and optimized capital efficiency. Gauntlet is a simulation platform for on-chain risk management. Gauntlet uses battle-tested techniques from the algorithmic trading industry to help protocols manage risk, fees, capital efficiency, and rewards. Their risk scoring and agent-based simulation models optimize parameter decisions for tens of billions of dollars in DeFi TVL.

More updates

Curve now live on Optimism
Tornado Cash is live on Optimism: The community has recently deployed Tornado Cash smart contracts on a new blockchain. Through a successful deployment ceremony, the protocol has newly settled on another Ethereum Layer-2. As of now, Tornado Cash is actively spinning on Optimism. With this latest addition, Tornado Cash currently functions on Ethereum, Binance Smart Chain, Polygon, xDAI Chain, Avalanche, Arbitrum and, last but not least, Optimism.
Argent adds Aave to zkSync wallet: Earn interest with up to 100X lower fees than L1.
Connext and LayerSwap partner up to enable on-ramp from CEXs to a broader list of chains & L2s. The integration is live starting with Polygon support.
Squeeth now live on mainnet: Check out the dApp — squeeth.opyn.co
Euler launches $1M ImmuneFi Bug Bounty Programme: The ImmuneFi Bug Bounty programme aims to strengthen Euler’s security while boosting collaboration with the greater DeFi ecosystem as part of our insurance partnership with Sherlock Protocol.
Vesta Finance announces fundraise: Vesta’s contributors announced a small strategic fundraise from key members of the DeFi community led by Tetranode and DCFGod. Also, Vesta Finance announces a treasury bootstrapping event.
Zapper collection page now live: This new feature gives you quick access to collection stats such as Floor Price, and a quick view of NFTs you own within that collection.
A lawsuit filed against PoolTogether, a blockchain app that gamifies savings by crypto holders, is challenging DeFi’s claims that its protocols are autonomous and self-governed.
The Union released: Are you a CVX locker, but unhappy due to high Ethereum gas costs, voting manually and/or not knowing what to vote for? Join The Union today.
Element Finance details core principles: As the Element Protocol pursues decentralization and control is handed over to the DAO, the team offers, for debate and consideration, the following as core tenets and principles under which the DAO should consider operating.