Prepare for a $2bn Blast đŸ’„

Author

Adam Morgan-McCarthy
February 27, 2024

GM, Ryan here.

Here’s what caught my DeFi-eye recently:

  • Blast prepares to unlock $2b in Ether and stablecoins

  • Uniswap fee switch inspires others to follow suit

  • Ethena begins Phase Two of its airdrop campaign

Blast prepares unlock

Blast, an Ethereum layer 2 blockchain created by the team behind Blur, an NFT marketplace, is launching its mainnet on February 29.

Blast’s key feature is that it offers native yield for Ether and stablecoins, derived from the Ether staking yield and real-world asset protocols.

Prior to its launch, over 3,000 protocols participated in Blast’s “Big Bang” competition where projects building on Blast were critiqued by a panel of judges. 50% of the future community airdrop is allocated to its winners and future Blast mainnet protocols.

Since launching on November 20, Blast has reached over $2 billion in total value of crypto assets deposited, but users have not been able to withdraw. 

Until the mainnet goes live, deposits have been locked in Blast while they earn points, which will convert to tokens in May 2024. 

With the unlock just days away, protocols launching on Blast have the opportunity to attract users and capital from what will be the second largest layer 2 by total value locked.

Uniswap fee switch inspires others

The price of UNI, Uniswap’s governance token, increased nearly 70% in one day as Erin Koen, the governance lead at Uniswap Foundation, put forth a proposal to activate the fee switch.

The Uniswap Foundation is a non-profit organisation that supports the growth of Uniswap. In October, the foundation received 10.7 million UNI, now worth $113 million, to provide grants to ecosystem participants.

The proposal will direct a portion of trading fees generated by Uniswap to UNI token holders who stake their tokens. Since its launch in November 2018, Uniswap has generated close to $5 billion in fees.

In the last week, Uniswap did $8.9 billion in total volume, generating close to $20 million in total fees for the same period.

This proposal has already inspired a number of other protocols to consider turning on their fee switches.

Tieshun Roquerre, the founder of Blur, an NFT marketplace with 77% of the total NFT volume in the last week, said in a post on X that the Blur community will be looking to learn from Uniswap’s experience.

Back in October, Arca Investments, a crypto investment firm, posted a lengthy governance proposal on activating a 1% fee switch.

Frax Finance, the project behind stablecoin FRAX, also took to X posing the question of whether protocol revenue should be sent to stakers of Frax’s governance token FXS.

Uniswap UNI token soars 50% amid DAO proposal to flip on $3.3bn ‘fee switch’

Uniswap’s UNI native token soared 65% to cross $12 for the first time in two years.

Ethena’s airdrop Phase Two

Ethena, the project behind an Ethereum “synthetic dollar” USDe, began Phase Two of its shard campaign today. 

Ethena’s shard campaign is similar to points campaigns like those offered by EigenLayer, where the expectation is that shards will convert to Ethena governance tokens in the future.

USDe is backed by Ether and Ether derivatives, and can be minted with $1 in Ether, unlike other Ether-backed stablecoins, which require over-collateralization.

Phase One of the campaign, from February 19 to 26, saw the total circulating supply of USDe rise to over $453 million while offering stakers a 24% annual yield. 

In the first phase, users could earn a certain number of shards per day for staking USDe, buying and holding USDe, or providing USDe liquidity on decentralised exchange, Curve Finance.

For Phase Two, Ethena is increasing the amount of USDe that can be locked to earn shards, adding a new Curve liquidity pool, and rewarding users for depositing USDe in yield trading market, Pendle.

Last week, Ethena ignited a debate about whether USDe should be considered a stablecoin. DL News’ Aleks Gilbert covered the details here.

Ethena’s $400m USDe token sparks renewed debate over stablecoin label

With its eye eye-popping yield, Ethena’s “synthetic dollar,” USDe, has attracted major investors. But its launch has also drawn scrutiny from prominent investors and developers who say it is too risky to be considered a “stablecoin.”

Data of the week

The most popular Ordinals project, NodeMonkes, just moved into the fifth largest profile picture NFT collection by market cap, according to data from CoinGecko.

In the last month, NodeMonkes have risen from 0.15 Bitcoin to 0.40 Bitcoin, or about $20,000.

This week in DeFi governance

Post of the week

Popular crypto YouTuber Ben Armstrong, also known as BitBoy Crypto, engaged in a striking match against James Slammeron on February 24. 

James is the lead developer of the memecoin HarryPotterObamaSonic10Inu, which trades under the ticker $BITCOIN — not to be confused with the world’s biggest cryptocurrency Bitcoin. 

Armstrong won the three-round fight, causing $BITCOIN to fall from $0.051 to $0.043. That’s an almost 16% drop in only 15 minutes. $BEN surged more than 60%.

As trader Andrew Kang pointed out, the performance of $BITCOIN and $BEN following the results of this fight may indicate a wider trend, where memecoins are evolving into SocialFi attention markets.

What we’re watching

The first user interface for Curve’s new lending product, LlamaLend, was deployed by the team at DeFi Saver, a DeFi management tool.

LlamaLend will help to increase the crvUSD supply, as users deposit tokens like wstETH, CRV and tBTC to borrow crvUSD. crvUSD has evolved into a key revenue driver for the Curve DAO, generating $4.6 million in fees since launching in May 2023.

Disclaimer: The two co-founders of DL News were previously core contributors to the Curve protocol.

Got a tip about DeFi? Reach out at [email protected].

DL News is an independent news organisation that provides original, in-depth reporting on the largely misunderstood world of cryptocurrency and decentralised finance. From original stories to investigations, our journalism is accurate, honest and responsible.

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