DODO #Megascope brings you this week’s Highlights:

1. Uniswap v4 Whitepaper Released

2. DeFi Project Introduction: Penpie

3. DeFi Project Introduction: Archi Finance

4. Data Check

👀 Weekly Digest

Uniswap v4 Whitepaper Released

Since the launch of Uniswap v1, Uniswap has remained a market leader in the DEX space and has become an indispensable infrastructure in the world of DeFi. It has been two years since the last update, Uniswap v3, which introduced the concept of concentrated liquidity, significantly improving the capital efficiency of DEX. The Business Source License (BSL) for v3 is set to expire on April 1st of this year. Yesterday, Uniswap Labs released a whitepaper for Uniswap v4, and the following is a brief summary of the information that has been made available thus far.

The key features of the Uniswap v4

• Hooks

  In previous versions, developers were limited to customizing LP (liquidity provider) and LP fee structures. With v4 Hooks, developers can now innovate further on top of Uniswap's liquidity and security foundations. Uniswap Labs provides the following examples to showcase the product features:

  • A time-weighted average market maker (TWAMM)

  • Dynamic fees based on volatility or other inputs

  • Onchain limit orders

  • Depositing out-of-range liquidity into lending protocols

  • Customized onchain oracles, such as geomean oracles

  • Autocompounded LP fees back into the LP positions

  • Internalized MEV profits are distributed back to LPs

  These examples highlight the flexibility and customization options available through Uniswap v4 Hooks, empowering developers to create unique and innovative liquidity pools on the Uniswap Protocol.

• The Singleton

  Known as the "singleton" or "flash accounting" feature, this concept involves consolidating all funds into a single contract where internal accounting logic is handled. In previous versions, each liquidity pool had its own separate contract, requiring contract redeployment whenever a new pool was created. This resulted in high gas usage. In contrast, Uniswap v4 utilizes a single contract for all pools, which brings two advantages:

  1. Gas Efficiency: By consolidating pools into a single contract, Uniswap v4 significantly reduces gas costs compared to previous versions. Swaps no longer require transferring tokens between different contracts, resulting in more efficient transactions.

  2. Improved Capital Efficiency: The singleton architecture allows for efficient routing across all pools. This means that liquidity can be utilized more effectively, improving the overall capital efficiency of the Uniswap Protocol.

The introduction of the singleton contract in Uniswap v4 enhances gas savings and enables a more streamlined and efficient trading experience for users.

The main objective of The Singleton is to reduce gas fees for users, whether it's during liquidity deployment or token swapping. Uniswap states that in early trials, v4 has been able to reduce the Gas Fee for creating liquidity pools by 99%. Additionally, this update may also consider the increasing usage of DEX aggregators, where the ability of Uniswap's liquidity pools to reduce gas fees becomes more significant and widely utilized.

• License and Governance

  Furthermore, in terms of governance and licensing, Uniswap states that the v4 code will be released under the Business Source License 1.1. This license will restrict the use of the v4 source code in commercial or production environments for a period of four years, after which it will permanently convert to a GPL license.

  Similar to v3, Uniswap Governance and Uniswap Labs have the authority to grant exceptions to the license. The protocol fee mechanism will also follow the model of v3, allowing governance to vote on adding a protocol fee to any pool, up to a certain capped amount.

What This Means for DeFi

Uniswap v4 will bring more changes to the DEX landscape and help Uniswap maintain its position as the largest decentralized exchange by trading volume. The introduction of Hooks in v4 improves the protocol's capital efficiency compared to v3, while also providing more customization and gas efficiency. Additionally, the ability to create different types of orders, such as Time-Weighted Average Price (TWAP) and limit orders, helps Uniswap attract more sophisticated traders to the DEX and enhance its competitiveness against centralized exchanges. The Uniswap v4 update makes Uniswap a more composable protocol, and we can expect to see an increasing number of projects built on top of Uniswap v4, contributing to the growth of the DeFi ecosystem.

Epilogue

Uniswap v4 does not have a confirmed release date at the moment, and the information released so far is not final. Substantial changes may still be made in the future

DeFi Project Introduction: Penpie

Penpie is a new project launched by the magpie team, the creators of the Wombat yield aggregator protocol. It serves as a yield aggregator for the Pendle ecosystem, aiming to provide income generation and veTokenomics enhancement services to Pendle users.

Penpie Mechanism

Similar to how Convex is to Curve, Penpie serves as a yield aggregator for the Pendle ecosystem. It collects users' Pendle and converts it into mPENDLE to provide higher yields to Pendle holders.

Penpie offers the following benefits to $Pendle holders:

• Increased Income for PENDLE Holders: PENDLE holders have the option to convert their tokens into mPENDLE, allowing them to earn a portion of the income generated by Penpie in the form of PENDLE and ETH.

• Expanded Diversification of User Base: Risk-averse liquidity providers can earn higher yields without the need to lock PENDLE or hold vePENDLE themselves. The amount of vePENDLE held by Penpie enables the platform to offer higher passive income to depositors.

• Lower Voting Threshold: Penpie provides a cost-effective way to gain voting power in Pendle Finance, facilitated by the accumulation of vePENDLE on the platform. Users can purchase PNP tokens and lock them as vlPNP on Penpie, allowing them to control the vePENDLE accumulated by Penpie and have influence over the governance of Pendle Finance.

Current Status of the Penpie

Penpie recently completed its token fundraising campaign, raising a total of 340 ETH, equivalent to approximately $600K . The protocol's token, $PNP, is also scheduled to launch in the near future.

Within less than a week of its launch, Penpie has gained nearly a 20% market share of vePENDLE, making it a strong competitor in the Pendle Wars alongside Equilibria. Although its locked-in amount may have been influenced by the previous Pendle Rush activity (where depositing Pendle tokens provided an opportunity to receive fundraising allocation of $PNP tokens), this has not hindered its successful debut.

DeFi Project Introduction: Archi Finance

Archi Finance is a leveraged yield aggregator in the GMX ecosystem that utilizes the GLP Real Yield for generating profits. It allows users to freely choose farming strategies that suit their preferences through lending and leverage options.

Archi Finance Mechanism

Archi divides its farming strategies into two parts based on users' risk preferences:

• Passive liquidity providers:

Users with low risk tolerance can deposit single assets such as ETH, BTC, USDC, or USDT into the protocol to provide lending liquidity. They do not need to bear the losses associated with GLP due to GMX protocol traders' profits or impermanent loss caused by multi-asset combinations.

• Degen farmers:

On the other hand, users with high risk tolerance can borrow from the lending pool to leverage their positions and implement related strategies to enhance their returns. They can choose to utilize Archi Finance's Delta Hedged strategy or design their own strategies.

Archi Finance Current Status

Archi Finance currently has a TVL of approximately 4.5 million. It has achieved a relatively good performance among various GMX Vault protocols. The protocol utilizes GMX v1 as its underlying component, and the deployment of GMX V2 and other Perp Dex Vaults is actively underway.

Furthermore, the project is also conducting a token fundraising campaign, with a fundraising cap of 2 million USDC. Currently, they have raised 700K. The fundraising activities will conclude and the project's token, $archi, will be launched at 0:00 AM on June 16th (Beijing time).

DataCheck

https://twitter.com/DodoResearch/status/1668240746330333184?s=20

🚄 Bullet News

Crypto

• On last Thursday, June 8th, the Ethereum Layer 2 network Arbitrum experienced another sudden halt due to sequencer issues, which lasted for approximately one hour. For more details, you can refer to @DodoResearch's tweet.

• Ethereum founder Vitalik has published a new article discussing the necessary transformations of Ethereum, including L2 scaling, wallet security, and privacy. These three aspects are interconnected and essential for the ecosystem's transformation. For more details, you can refer to @DodoResearch's tweet.

DeFi

• The BNB token has experienced significant depreciation due to the recent SEC lawsuit against Binance, drawing attention to a potential ticking time bomb within the BNB Chain.

  Last October, there was a cross-chain bridge hack on the BNB Chain, resulting in losses of nearly $700 million. The hacker deposited a large amount of BNB into the Venus protocol to cash out. Currently, the hacker has a 924,830 BNB lending position Venus Protocol. If the price of BNB drops to $220, it will trigger liquidation. Users are concerned that this substantial liquidation could further accelerate the rapid decline of the BNB token or result in significant bad debt for the Venus protocol.

  In response, the Venus team stated that in November 2022, the BNB CHAIN team submitted a governance proposal that was approved by the community. According to a governance proposal passed by the community last year, the BNB CHAIN will whitelist the liquidation of the hacker’s position to prevent the impact on the price due to sell-off. BNB CHAIN is the official whitelist liquidator, providing assurance to users that there will be no bad debt generated from this incident.

• According to Beosin Alert, the lending protocol Atlantis Loans on the BSC has fallen victim to a governance attack. The hacker gained control over the protocol's contracts through a governance proposal and replaced them with malicious contracts containing backdoors. These malicious contracts have the ability to transfer authorized user tokens. Currently, the hacker has stolen nearly $1 million worth of user assets.

• According to BlockSec, the DeFi lending protocol Sturdy has been targeted in a hacker attack. This attack follows the classic method of price manipulation through flash loans to steal assets from the lending pool. Currently, a total of 442 ETH (approximately $800K ) has been lost in this incident.

• Curve Finance has recently been involved in several scandals. In late May, founder Michael Egorov was exposed for spending $59 million to purchase two luxury homes in Australia. As a result, ParaFi, Framework Ventures, and 1kx, three prominent crypto venture capital firms, jointly filed lawsuits against him for fraud and misappropriation of trade secrets, leading to economic losses for the VCs. Additionally, this week it was discovered that Michael's address deposited over 33% of circulating CRV tokens on Aave and borrowed 71 million USDT, essentially selling assets. This has caused the Curve token to decline by nearly 25% since June.