Last week was an eventful one in the world of decentralized finance (DeFi). Several major developments took place, including the launch of Base mainnet, the introduction of new stablecoins, and the rollout of important updates to existing protocols. However, there were also some setbacks, such as the delay of a Bitcoin exchange-traded fund (ETF) approval by the U.S. Securities and Exchange Commission (SEC) and a security exploit that resulted in a substantial loss for a yield optimizer.
One of the highlights of the week was the launch of Base mainnet, which is now open to the public. Base is a decentralized platform that offers over 100 decentralized applications (dApps) for users to explore and engage with. To encourage user participation, the team behind Base initiated the Onchain Summer campaign, which includes daily non-fungible token (NFT) mints.
In the realm of stablecoins, PayPal made a significant move by launching its own USD-pegged stablecoin called PYUSD. This stablecoin will be gradually made available to eligible users with US PayPal balance accounts. Notably, PayPal does not charge any fees for transactions involving PYUSD, although there is a fee for converting between PYUSD and other cryptocurrencies.
Another stablecoin introduced last week was USDY, launched by Ondo. USDY is a tokenized note secured by US Treasuries and bank deposits, and it can be used as a stablecoin. Holders of USDY will earn a yield of 5% annual percentage yield (APY).
The popular decentralized exchange (DEX) Uniswap also made a significant move by going live on Base. This integration expands Uniswap’s reach and provides Base users with access to a wide range of decentralized trading options.
In terms of protocol updates, Angle deployed its V2, which includes more diversified assets for its agEUR stablecoin. This update incorporates bC3M, a tokenized short-term and risk-free Euro bonds exchange-traded fund (ETF).
Tenet also launched its bridge between Layer 1 (L1) and multiple Layer 2 (L2) chains supported by LayerZero. This bridge allows for the seamless transfer of major assets between different chains, including stablecoins like USDC, USDT, and DAI.
Other notable developments include the pre-launch token futures introduced by Aevo, which allows users to trade perpetual futures on tokens that have not yet launched. Sphere Finance launched Preon, a cross-margin lending protocol, while Friend.tech went live on Base, enabling the trading of shares of Twitter accounts. PancakeSwap, a Binance Smart Chain-based DEX, also expanded its reach by going live on Arbitrum.
Despite these positive developments, there were some setbacks in the DeFi space. The SEC has once again delayed its decision on approving a Bitcoin spot ETF application submitted by Ark Invest and 21Shares. The new deadline for a decision is set for November 11, with a final date scheduled for January 10, 2024.
In addition, a yield optimizer called Zunami fell victim to an exploit that resulted in a loss of approximately $2.1 million. The hack was related to price manipulation and highlighted the need for robust security measures in DeFi protocols.
Furthermore, SpiritSwap, a DEX built on the Fantom blockchain, is looking for a team to take over its operations. If no team steps forward, the project will cease operations on September 1. Similarly, Hundred Finance, a Compound fork lending protocol, is voting on whether to close the protocol after suffering a hack earlier this year.
Other protocols, such as Sentiment and Saddle, are also planning to wind down their operations. Goldfinch, a protocol for real-world asset (RWA) lending, defaulted on a $5 million loan to Kenyan motorcycle company Tugende due to a breach of the loan agreement.
On a positive note, Thorchain is testing ThorFi Lending, which allows users to create loans using native assets as collateral without any interest, liquidations, or expiration dates. Additionally, the Shibarium Layer 2 solution is expected to launch in mid-August.
All in all, last week was a mix of both positive and negative developments in the DeFi space. While there were exciting launches, partnerships, and updates, there were also setbacks and security issues that highlighted the need for robust security measures and diligence in the DeFi ecosystem. As the industry continues to grow and mature, it is essential for participants to stay informed and exercise caution when engaging with decentralized finance protocols.
