This Week In DeFi – February 5

To the DeFi Community,

This week in DeFi, Alpha Homora and Balancer rolled out V2 protocol upgrades, adding new ways to take advantage of the composability of DeFi money legos and increase capital efficiency, as ETH pushes to new all-time highs and gas fees approach levels not seen since the 2020 summer of DeFi.

Alpha Homora is increasing their focus on leveraged yield farming services, with v2 offering up to 9x margin on designated liquidity pools. Alpha Homora and Yearn Finance are both whitelisted clients of the CREAM Iron Bank, allowing development of investment strategies that require less collateral than before. Alpha is also bringing leveraged yield farming to Curve Finance and Balancer pools, adding even more variety to the menu of potential leveraged plays.

Alpha has now originated over $1 billion in loans since they launched just a few months ago.

They’re now consistently doing more daily volume than @AaveAave

Probably not worth paying attention to though 😏 pic.twitter.com/tyXUBdkKhi

— Jack Purdy (@jpurd17) February 4, 2021

 

Balancer is upgrading their highly adaptable liquidity pool infrastructure, aggregating all assets into a single vault to allow internal transactions that should help slash gas fees. V2 also adds asset manager capabilities that let external smart contracts control tokens in a pool, even sending them to other protocols to earn additional yield for pool contributors. Contracts for this release are still under audit and should arrive in a few weeks.

Synthetix is also making moves with the Bellatrix update, adding synths for DeFi tokens like UNI, AAVE, YFI, and DOT that add even more implements to the growing DeFi toolbox.

Taken together, these developments and other recent advancements including super low-slippage asset swaps through Curve and Synthetix and the introduction of the CREAM Iron Bank all point in one direction: DeFi is leveling up rapidly, increasing capital efficiency with each new iteration and becoming increasingly fundamentals-based investments while traditional finance still seems to be asleep at the wheel.

Let’s compare fintech vs. DeFi:

DeFi protocols scale faster (see Aave 0 to 1)
Composability = synergies & efficiency
DeFi protocols have zero marginal cost & low overhead
Networks become easier to bootstrap thru programmed incentives & community ownership

Welcome to fintech 2.0

— Santiago R Santos (@santiagoroel) February 4, 2021

 

As the cross pollination between DeFi protocols continues to accelerate, it becomes easier for professional traders and retail minnows alike to put their money to work earning yields banks would otherwise keep for themselves, assuming those DeFi participants had access to a bank in the first place. And that might be DeFi’s most important revolution of all–giving people all around the world, some who may have never set foot in a bank in their lives, equal access to the fruits of high finance that for centuries has been locked away behind the banker’s desk.

There’s obviously a long road yet to travel before DeFi is ready for the masses, but innovations and integrations made today will have colossal impacts on the future of finance just a few years down the road. Remember, in 2017, most of what we’re excited about today in cryptoland didn’t even exist yet. Now that the momentum is building, who knows what the next few years could deliver? Keep your finger on the pulse. We’re all going to make it.

Highest Yields: dYdX at 47.16% APY, Fulcrum at 13.59% APY

Cheapest Loans: CoinList at 3.00% APY, Aave at 5.33% APY

MakerDAO Updates

DAI Savings Rate: 0.00%

Base Fee: 0.00%

ETH Stability Fee: 2.50%

USDC Stability Fee: 0.00%

WBTC Stability Fee: 4.50%

Highest Yields: dYdX at 28.64% APY,  Fulcrum at 15.27% APY

Cheapest Loans: CoinList at 1% APY, Aave at 14.13% APY

Alpha Homora adds new AMM protocols and offers up to 9x leverage in a new protocol upgrade.

Balancer gears up for a major protocol revamp, slashing gas costs and offering new ways for pools to earn yield.

Opyn on-chain options protocol get a funding boost led by Paradigm to reduce margin requirements and add new assets to the platform.

Bitwise adds a par of popular DeFi tokens to the Large-Cap Index fund.

0x picks up $15 million in Series A funding led by Pantera Capital to advance the cause of globally accessible markets.

Hashmasks take the NFT world by storm, selling out in just a few days.

Total Value Locked: $35.37B (up 30.28% since last week)

DeFi Market Cap: $66.71B (up 40.26%)

DEX Weekly Volume: $13.54B (up 6.03%)

DAI Supply: 1.82B (up 11%)

Total DeFi Users: 1,355,000 (up 3.67%)

[Dan Kahan – The Defiant] – Ren Project Joins Forces With Alameda Research

[Lucas Campbell – Bankless] – Aave: Road to Billions

[Anthony Sassano – The Daily Gwei] – Apes Together Strong – The Daily Gwei #175

[Owen Fernau – The Defiant] – Engineer Becomes His Own Lender in First DeFi Mortgage

[Anthony Sassano – The Daily Gwei] – DeFi to Finance – The Daily Gwei #176