LayerZero drops their latest innovation for verifiable on-chain contribution and distribution via ColorTrace, centralized exchange (CEX), OKX, announces plans for an L2 chain with Polygon’s support, and EigenLayer reaches the second phase of their testnet.
Big week in the world of DeFi! Let’s dive deeper into what went down in DeFi this past week.
Overview
Total value locked (TVL) across all chains retrace slightly amidst pause regarding the ETF approvals from the SEC. Notable exceptions to the trend include Cosmos-based Ethereum Virtual Machine (EVM) chain, Evmos, and Ethereum zero-knowledge EVM chain, Manta Pacific, which both saw more than 35% jumps in TVL.
Source: https://coinmarketcap.com/chain-ranking/
Welcome to Alpha Central
Li Jin and Jesse Walden of Variant Fund discuss token distribution models and how crypto applications should go about doing so to achieve the desired results.
TL:DR:
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An opt-in, bottom-up approach to token distribution, known as progressive ownership should be adopted by applications
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Instead of using tokens to bootstrap networks and users, tokens should be used to deepen loyalty
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This creates a more targeted strategy for protocols, creating a more committed and loyal community
Crypto Koryo covers some key takeaways from observing the narratives that have taken hold of the markets for 2023 and things to keep in mind when chasing trends.
TL;DR:
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New narratives generally don’t maintain their top position for more than a month and will usually be the worst performing narrative in the subsequent months
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Sophisticated narratives such as options and privacy are rarely ever top narratives
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The strongest performer in a narrative tends to continue performing even after the narrative, as a whole, fades away
Ethereum: LayerZero’s ColorTrace and EigenLayer’s Testnet Phase 2
Omni-chain interoperability protocol, Layer Zero, unveils ColorTrace, a new method of tracing tokens from mint to their current state. In essence, ColorTrace allows the history of a token to be tracked and consequently, this can be used to reward users who participated in value accretive behaviors in the token’s history which contributed to their success.
Ethereum restaking layer. EigenLayer, opens up the second stage of their testnet rollout. Stage two allows operators to register with EigenLayer, restakers to delegate to said operators as well as for rollups to integrate EigenDA for their data availability needs.
Other Product Launches and Updates
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The Verified USD Foundation introduces USDV, a new stablecoin backed by short term treasuries and repos, built on Layer Zero’s latest ColorTrace technology, which allows protocols and ecosystems to be rewarded for contributing to USDV’s distribution.
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Perpetuals decentralized exchange (DEX), dYdX, suffers a $9 million loss from their insurance fund after a suspected manipulated move of the Yearn Finance token, YFI, resulting in liquidation gaps on the platform.
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Privacy-focused protocol, Nocturne, goes live on the Ethereum mainnet, introducing private accounts to users. Users can deposit, swap, stake and transfer funds anonymously via their Nocturne private accounts.
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OmniBot introduces OmniBotX, a tool to enable the use of any DeFi tool, from the Telegram app across any Ethereum Virtual Machine (EVM) chain, be it swaps, bridging, staking or token sniping.