This Week in DeFi – May 7

To the DeFi community,

This week, Uniswap V3 has finally dropped! The upgrade to DeFi’s most popular protocol brings custom liquidity pools with bounded asset prices to protect against impermanent loss and drastically increase capital efficiency, resulting in super low slippage and improved returns for liquidity providers. LP strategies can now be much more targeted and complex, with the upgrade likely to keep Uniswap in the top DEX spot for the foreseeable future.

🎂 It’s been ~24hrs since the launch of @Uniswap v3

Initial stats:

v3 24hr vol: $150m
v3 tvl: $300m
vol/tvl (efficiency) = 50%

v2 24hr vol: $1.1b
v2 tvl: $8.1b
vol/tvl = 13%

🤯 In it’s first day, v3 has already seen more than twice the volume that v2 saw in its first month

— Hayden Adams 🦄 (@haydenzadams) May 6, 2021

 

Following years of work by The Maker Foundation to bring MakerDAO to life, 84,000 MKR worth more than $400 million has been transferred to MakerDAO governance with no strings attached, to be managed by the decentralized governance community. The Foundation is set to dissolve before the end of 2021, offering a textbook example of how DeFi protocols can progress through the necessary stages of centralization and emerge with full community control.

“Earlier today, the Maker Foundation returned 84,000 MKR (~$450m) from the Development Fund to MakerDAO. [They] are now under the control of Maker Governance.”

Wow. The Maker foundation is stepping down and handing control to the community. https://t.co/GE3gRrgi6n

— Hasu (@hasufl) May 3, 2021

 

Impermax kickstarted their LP token leverage protocol with a retroactive airdrop to Uniswap V2 LPs, distributing more than $9 million worth of IMX tokens in the process. The protocol has already attracted more than $10 million in TVL and should help unlock significant additional liquidity in DeFi markets, and, in turn, greater capital efficiency for liquidity providers.

If you’re a UNI v2 LP you have a little surprise waiting for you on @ImpermaxFinance, a platform to leverage your LP tokens.

In our case we got 400 $IMX ($322).

No idea if it’s proportional to the amount of liquidity provided 🤷‍♂️https://t.co/uaacslAq8r

— DeFi Airdrops (@defi_airdrops) May 6, 2021

And IDEX released Hybrid Liquidity, a design combining a programmatic order book and AMM liquidity pools to combat front-running trades and failed transactions. The platform is non-custodial and executes on-chain, but executes trades instantly against pooled liquidity using an algorithmic order book. IDEX cites a Cornell University study that found bots earned up to $20,000 a day front running DEX traders, so IDEX LPs could stand to regain substantial profits if Hybrid Liquidity performs as intended.

Introducing IDEX Hybrid Liquidity – The Solution to DeFi’s Failed Trades, Slippage, & Front-Running: https://t.co/ZNYHYu6Sbs pic.twitter.com/5n108D5lgO

— IDEX (@idexio) May 6, 2021

LPs are in the spotlight this week, and it’s no surprise – they’re the lifeblood of the DeFi ecosystem, providing the capital that makes decentralized exchange possible. And the more liquidity a given protocol can accumulate, the better exchange conditions traders will receive using that platform in terms of slippage and available assets. It’s little wonder the competition continues to heat up to win the hearts and capital of these pioneering DeFi investors.

TVL continues to grow at a healthy pace, but capital efficiency improvements so far have come mostly from increasing complexity and customization among leading DEX platforms like Uniswap V3 and Balancer V2. An essential piece of DeFi adoption has been simplifying UX and UI design to make investing in the crypto space as simple as investing with traditional institutions. Who will crack that code and bring the next wave of capital flowing in is yet to be seen…

Highest Yields: Nexo Lend at 10% APY, Fulcrum at 9.66% APY

Cheapest Loans: Compound at 7.24% APY, Aave at 7.24% APY

MakerDAO Updates

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, Nexo Lend at 10% APY

Cheapest Loans: dYdX at 8.08% APY, Compound at 8.13% APY

Total Value Locked: $77.4B (up 0.64% since last week)

DeFi Market Cap: $135.71B (up 9.24%)

DEX Weekly Volume: $18.68B (up 16.17%)

DAI Supply: 4.27B (up 16.67%)

Total DeFi Users: 2,168,900 (up 5.38%)

[Owen Fernau – The Defiant] – Teens Controlling Multi-Million-Dollar DeFi Protocols Are Not Playing Around

[Anthony Sassano – The Daily Gwei] – DeFi Treasuries – The Daily Gwei #239

[David Hoffman – Bankless] – The Never Sell Plan

[Masha Prusso – The Defiant] – All the Ways to Generate Passive Income With DeFi

[Anthony Sassano – The Daily Gwei] – Ethereum Awareness – The Daily Gwei #240