To the DeFi community,
This week, Polygon (formerly Matic) has broken away from the pack of competing Layer 2 solution providers for the Ethereum Network, with DEX like Quickswap that live on Polygon surging to hundreds of millions in transaction volume each day.
L2 DEX trading volume in the last 24hrs:
— L2_Dex_Wars (@L2Wars) April 27, 2021
Faced with such success in a sector of the industry that has been seen as critical to the continued success of DeFi on Ethereum, Polygon also announced an allocation of $150 million in MATIC tokens as the #DeFiForAll Fund, designed to bring the benefits of DeFi to a far larger audience.
1/ 🔥Pleased to announce a 150M$ DeFi Fund to make DeFi more accessible and cost-effective and bring the next million users to DeFi.
— Polygon (previously Matic) (@0xPolygon) April 28, 2021
Details on exactly how fund recipients are selected are scarce for now, but big players like Curve and Aave have already become some of the most notable success stories using Polygon, with Aave already locking more than $12 billion in the Polygon L2.
Speaking of Aave, decentralized governance for one of DeFi’s most popular protocols also approved liquidity mining rewards for the first time this week, for users who make the jump to Polygon’s L2.
— Aave (@AaveAave) April 14, 2021
Rewards are paid in MATIC tokens, and close to a million dollars are slated to be paid out by the end of July 2021. Given the size of the war chest now associated with the DeFiForAll Fund, more Polygon-based liquidity mining programs could be soon to follow.
Balancer and Gnosis announced the Balancer-Gnosis Protocol, a hybrid non-custodial DEX with professional market makers, batched auctions, and off-chain order placement with access to on-chain liquidity.
Introducing the crossover event of the summer 💥
Balancer x @gnosisPM are teaming up to deliver the best experience to DEX traders . ⚖️🦉
Here’s what you need to know⬇ https://t.co/AanDBSUKPE
— Balancer Labs (@BalancerLabs) April 28, 2021
BGP is to lower gas fees for DEX transactions by simplifying smart contract architecture and taking advantage of professional market makers, while also providing protection against MEV extraction, where miners are able to front run or otherwise use blockchain data to extract maximum value from everyday participants and traders. The BGP train is getting started via Cowswap, a proof-of-concept alpha build where gas prices are 90% subsidized for the time being.
The Opyn on-chain options protocol is teaming up with DeFiDollar to introduce Opeth, a synthetic asset combining yield farming with put options to maximize capital efficiency.
DefiDollar 🤝 @opyn_
Capital efficient Stablecoin loans with Opeth! 🤩
Opeth is a synthetic asset – fusing a put option with the underlying collateral. Opeth thus has a lower bound and can be used as collateral to issue stablecoins.
Learn More: https://t.co/384MoT1BXH
— DefiDollar (@defidollar) April 27, 2021
Using Opeth, put option contract writers can put their collateral to work farming yield across various DeFi platforms, then either exercise the option for a profit or let it expire if out of the money, while only paying the option premium. From the bottom to the top, DeFi protocols of every size are generating creative new ways to improve earnings on user capital.
Gas prices on Ethereum have been at their lowest level in recent memory this past week after hiking the gas limit to 15 million per block. It’s a huge relief, but the gas limit has been increased several times over the past year, only to be quickly filled to capacity again within just days. This time is different because much of the DeFi demand has found its way into other parts of the ecosystem, from BSC and Optimism to the now seemingly dominant Polygon solution.
DeFi is moving through challenges and attracting capital and top-tier talent more quickly than any other industry in human history. It’s exciting and at times hard to believe, and not without pitfalls, but do your best to stay grounded, and we all might just make it after all…
(Note: Going forward, interest rate graphics will use 30 day average rates)
Highest Yields: Nexo Lend at 10% APY, Fulcrum at 9.78% APY
Cheapest Loans: Compound at 7.23% APY, Aave at 7.99% APY
DAI Savings Rate: 0.00%
Base Fee: 0.00%
ETH Stability Fee: 5.50%
USDC Stability Fee: 0.00%
WBTC Stability Fee: 4.50%
Highest Yields: Fulcrum at 11.63% APY, Celsius at 10.39% APY
Cheapest Loans: Celsius at 9.35% APY, Compound at 9.67% APY
pNetwork and Algorand link up to deliver more cross-chain capabilities.
Hashflow raises $3.2 million from investors including Dragonfly Capital and Alameda.
RenVM helps Badger make better Bitcoin bridges.
mStable joins the Polygon party.
Impermax brings yield to your yield so you can farm while you farm.
Total Value Locked: $76.91B (up 33% since last week)
DeFi Market Cap: $124.23B (up 11.27%)
DEX Weekly Volume: $16.08B (down -16.25%)
DAI Supply: 3.66B (up 6.09%)
Total DeFi Users: 2,058,200 (up 8.16%)
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Alex is a Content Writer at Circle, with previous experience at tech startups, Fortune 500 corporations, and as a freelance writer and analyst. Interests include cutting-edge technologies in blockchain, energy, supply chains, transportation, urban living, and more and he has been in the crypto community since 2014.