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🎢Weekly Recap: Markets Bounce Back, EigenLayer TVL Surges, Dencun Scheduled

The Defiant

Weekly Recap

Happy weekend Defiers!

Volatility is returning to the crypto markets, with both Bitcoin and Ethereum gaining more than 8% over the past seven days to post multi-week highs. BTC retested its January high near $48,000 while ETH rallied past $2,500 for the first time in three weeks.

Spot Bitcoin ETF flows sank to their lowest level since launching, with just $106.5M passing through the funds on Feb. 6, despite the funds from BlackRock and Fidelity ranking among the top 10 ETFs in January overall with more than $2B worth of inflows. However, flows picked back up at the end of the week alongside bullish market momentum, with $400M entering Bitcoin ETFs on Feb. 8.

Ethereum’s highly-anticipated Dencun upgrade is set to go live on mainnet come March 13, paving the way for transaction costs to drop on Layer 2 . The date was penciled in following Dencun’s third and final testnet deployment going off without a hitch.

The total value locked of EigenLayer, the pioneering Ethereum restaking protocol is up more than triple since temporarily removing the limits on its liquid staking pools from Feb. 5 through Feb. 9. EigenLayer’s TVL ballooned from $2.2B to $6B, including a $1.5B inflow within the first 24 hours, with the protocol amassing roughly 11% of circulating liquid staking tokens.

Airdrops remain a hot narrative within web3, with Wormhole becoming the latest project to announce a token generation event retroactively rewarding early adopters, team members, and ecosystem projects. Dymension also completed its mainnet launch and $300M token drop, while Pyth Network announced plans to distribute tokens to 160 projects for the second phase of its airdrop campaign.

Solana suffered its major outage in nearly one whole year. The incident forced Solana’s validators to restart the network, culminating in five hours of downtime.

The SEC is ramping up its attack on DeFi, with the regulator expanding its definition for financial “dealers” to encompass liquidity providers on decentralized exchanges commanding at least $50M worth of securities assets. Web3 proponents, including some of the SEC’s own commissioners, took exception to the move, criticizing the regulator for failing to offer clear guidelines for what comprises a digital asset security.

In other news, Aave’s GHO stablecoin has finally achieved USD-parity six months after launching, the prominent NFT collector GMoney has taken out a 1M USDC loan against a single CryptoPunk, and the TVL of Morpheus AI surged past $80M on launch day.

Plus, check out our podcast with Chris Amani, the freshly appointed CEO of Terraform Labs, to learn about Terra’s strategic pivot and the company’s decision to file for bankruptcy.

Enjoy!

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Podcast & Interviews

How Terra is Trying to Rise from its Ashes with Terraform Labs' New CEO Chris Amani

Cami Russo was joined by Chris Amani, the CEO of Terraform Labs.

The conversation with Chris unfolded in two parts. Initially recorded on January 17th, we begin by catching up on the latest developments and the new strategic direction of the Terra ecosystem following its collapse in May 2022.

Intriguingly, just days after the initial discussion, Terraform Labs announced its filing for bankruptcy. In the latter part of the conversation, Amani delved into the intricacies of the decision and explores the potential implications and expected outcomes that could result from the bankruptcy filing.


Research

Decoding DeFi Risks: Exploring the Data Behind $50B+ in DeFi Losses

IntoTheBlock, a crypto-focused analytics firm, explores the vulnerabilities that allowed hackers to steal nearly $59B from DeFi users between 2020 through 2023. The article discusses technical and economic risks prevalent among dApps, and shares what types of DeFi protocols have been most susceptible to exploits so that you can stay safe when exploring web3.


Explainers

What Are Layer 3 Blockchains?

With an increasing number of teams working on blockchain scalability increasingly allocating resources towards building out Layer 3 solutions to mitigate fees and bolster throughput, we dive into everything you need to know about the nascent L3 sector.


Op-Ed

DePIN: Crypto's Biggest Sector of 2024

Raullen Chai, the co-founder and CEO, of IoTeX, a platform seeking to drive convergence between blockchain and the Internet-of-Things, offers his thesis for why projects operating within the Decentralized Physical Infrastructure Networks (DePIN) sector are set to take off in 2024.

"DePIN has become a major area of focus for VCs curious about exploring the potential of this rising new sector. Already, DePIN projects have reached a $29B market cap... Combine the ubiquity of devices with the advantages of community ownership, public verifiability, and incentivized sharing implicit in Web3, and it's clear the opportunity for DePIN is almost incalculably broad."


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