LD Track Weekly Report [2023/06/26]

【Summary】

Stablecoins:?The overall market value of the stablecoin sector did not change much this week, but BUSD and TUSD were significantly affected by Binance, resulting in large fluctuations in market value.

LSD:?Last week, the ETH pledge rate rose to 19.43%, a week-on-week increase of 1.46%. Last week, 23.3588 million ETH were locked in the beacon chain, corresponding to a pledge rate of 19.43%, a week-on-week increase of 1.46%. The ETH pledge situation has gradually returned to a normal growth trend free from the regulatory pressure of the US SEC; among them, active verification nodes were 632,200, a week-on-week increase of 1.39%, and queued verification nodes were 92,400, a week-on-week increase of 2.30%.

Ethereum L2:?Layer2 TVL total lock-up amount is 9.68 billion USD, still led by the rise of Zksync era, TVL over 600 million USD, the increase broke 20%, at the same time, Zksync chain activity overtook Arbitrum. With Offchain Labs releasing the Arbitrum Orbit development tool and Matter Labs releasing the ZK Stack for developing Hyperchain, the battle of layer2 has spread from the ecosystem itself to a broader L3 network and RaaS field.

DEX:?Dex combined TVL 15.15 billion, a decrease of 0.66 billion from last week. Dex 24-hour trading volume of 2.05 billion, 7-day trading volume of 17.99 billion, a decrease of 0.64 billion from last week. Uniswap V4 is leading the market this week due to its rising popularity and BTC capital sinking into leading track targets.

Derivatives DEX:?Last week (June 19 to June 25), the overall trading volume of Derivatives DEX increased compared to the previous week, making it three consecutive weeks of trading volume increases. The weekly trading volume of the six main derivatives DEX protocols was about 15 billion USD, an increase of about 25%.

【Stablecoins】

According to data from defillama.com, the current total market value of the stablecoin sector is approximately $128.7 billion, an increase of only about $400 million compared to last week. From the stablecoin supply curve, we can see that the overall supply of stablecoins is trending downward. Although the crypto market experienced a large increase last week, there doesn’t seem to be any new major funds entering the market. It is very likely that the internal fund transfer was due to the expectation of institutional entry (BlackRock applies for BTC Trust/Volatility Shares launches 2x BTC Strategy ETF).

According to data from the Circle official website, as of June 22, the total circulation of USDC is $28.5 billion, the reserve is $28.6 billion, of which cash is $3.8 billion, and the government currency market fund Circle Reserve Fund holds $24.9 billion. Over the past week, Circle has issued $900 million USDC and redeemed $600 million USDC, with a circulation increase of approximately $300 million.

Since March 2023, the type of collateral inside MakerDAO has changed significantly. The amount of USDC used as collateral in MakerDAO’s Peg Stability Module (PSM) has dropped from $4 billion to around $500 million. The main reason for the drop in USDC’s share is that MakerDAO is diversifying its balance sheet.

At the same time, the share of the Ethereum derivative stETH as collateral has significantly increased, from $650 million to about $1.1 billion.

【LSD】

The growth of beacon chain verification nodes is gradually recovering

ETH pledge rate of return has dropped to 4.3%

Among the three major LSD protocols, from the price performance perspective, LDO increased by 11.3% in a week, FXS +8.1%, RPL -6.9%; from the perspective of ETH pledge amount, Lido increased by 2.06% in a week, Frax +1.77%, Rocket Pool +1.74%.

Focus on the LDO tiered reward sharing proposal: This proposal aims to expand Lido’s market share, share 5% of the pledge income collected from the Lido treasury (within 12 months) with capable potential pledgers (use Lido to pledge at least 2500 ETH in the next 1–2 years) and evaluate new projects that can promote the Lido market. Pledgers of 0–50,000 ETH can share 30% of the income, and then increase gradually, pledgers of more than 700,000 ETH can share 50% of the income. (Proposal details:?https://snapshot.org/#/lido-snapshot.eth/proposal/0x9279cd4addefdd9185d024f471f1a29561f61556ae209cdda5dffb1fd73b181e)

【Ethereum L2】

TVL

The total Layer2 TVL increased significantly last week, with an overall increase of about $1 billion compared to last week, and a total lock-up amount of $9.68 billion.

The larger increases were Op Mainnet and Zksync Era, still led by Zksync era, with TVL exceeding $600 million, and the increase breaking 20%.

Cross-chain capital situation

Arbitrum cross-chain capital is quite active, and it has been over 30,000 Ethereum for two consecutive weeks in terms of TVB data.

Chain activity

Chain activity zkSync outperforms Arbitrum, in the order zkSync era > Arbitrum > Optimism > Starknet.

Event review

Arbitrum

On June 22nd, Offchain Labs released the Arbitrum Orbit development tool, aiming to help developers more easily develop and manage their own Arbitrum Rollups and AnyTrust chains on the L3 blockchain Arbitrum Orbit. Previously, on March 16th of this year, Arbitrum launched Arbitrum Orbit, allowing developers to easily launch their own Layer3 blockchain in the Arbitrum ecosystem without permission. Later, on April 27th, AltLayer’s RaaS solution (Rollups-as-a-Service) claimed to support Arbitrum Orbit.

Optimism

On June 22nd, Optimism launched the third round of retrospective public product fundraising, planning to distribute 30 million OPs to builders, creators, and educators who have a positive impact on the Optimism Collective this fall.

On June 24th, Optimism was renamed to OP Mainnet.

zkSync Era

On June 26th, Matter Labs released the ZK Stack for developing Hyperchain. Developers of Hyperchain can choose to create a Layer 2 network parallel to zkSync Era or run a Layer 3 network on top of it, while zkSync Era will be considered the first Hyperchain, with chains being able to cross-chain through Hyperbridges.

The ZK Stack and Hyperchain can correspond to the Op Stack and Superchain concepts of OP Mainnet’s Op Stack respectively, while also overlaying the zkSync Era L3 similar to Arbitrum Orbit. It can be seen that the fierce competition between Layer 2 has spread from the ecosystem itself to the broader L3 network and RaaS field. Currently, the more advanced development is OP Mainnet, which is supported by Base and Opbnb. We look forward to seeing how the major Layer 2 public chains will show their capabilities and seize territory in future development.

【DEX】

Dex combined TVL is 15.15 billion, down 0.66 billion from last week. Dex’s 24-hour trading volume is 2.05 billion, with a 7-day trading volume of 17.99 billion, down 0.64 billion from last week. With the rising popularity of Uniswap V4 and BTC capital sinking, UNI leads the rise this week.

Ethereum

ETH L2/sidechain

BTC L2/sidechain

Alt L1

【Derivative DEX】

Graph: Weekly trading volume changes of six major derivative DEX protocols

This week, TVL has significantly recovered. As of June 25,?GMX TVL increased by 13.26% this week, with the most capital returning, rising from 540m to 623m. DYDX and MUX 30-day TVL both increased, with a monthly growth rate of 3% to 5%. Level TVL increased by more than 50% this week, almost recouping its 30-day decline. Gains network and Apollo X performance are relatively weak, 30-day and 7-day TVL are still in a declining trend, but the decline is not large.

The rapid return of GMX TVL is mainly due to the recovery of earnings.?Since Binance was sued by the SEC in early June, market volatility has increased, derivative trading volumes have increased, and several large-scale liquidations have occurred in the market, significantly increasing protocol revenue.

As shown in the figure below, on Arbitrum, the protocol fee income exceeded 3 million dollars on June 14 and exceeded 1.7 million dollars on June 19, which is far higher than the usual 100,000 to 500,000 dollars.

Graph: GMX protocol revenue diagram (left: Arbitrum, right: Avalanche)

GMX’s staking rate also returned to 80% this week, reaching a new high. Previously, the staking rate reached a high of 79% in mid-April. The increase in the staking rate, in addition to being affected by the increase in protocol income, may also be related to the GMX community’s ongoing vote to modify the multiplier points mechanism.

GMX’s multiplier points system aims to reward users who stake for a long time. Staking GMX can earn multiplier points, which can be used to boost the staking yield of GMX. The current multiplier point APR is 100%, which means that when a user stakes 1000 GMX for a year, the user can get 1000 points.

According to community discussions, since GMX has been operating since the end of 2021, it has been more than a year, and the number of accumulated multiplier points is increasing, currently accounting for about 50% of protocol income. This is not conducive to the entry of new stakers. Therefore, the new proposal suggests that once the accumulated multiplier points of staked users exceed a certain percentage of the staked tokens, the excess points cannot be used to boost staking yields. Users can stake additional tokens to use their multiplier points.

The vote is currently underway and will end on June 27. Currently, the option of a 150% limit ratio for multiplier points has received 65.4% support.

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