DODO Megascope this week’s Highlights:
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Lido Ethereum staking withdrawal design;
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Lending protocol earns more profit on #LSD than LSD itself;
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Guardian Contract provides on-chain protection for hot wallets;
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Recent Performance of gTrade.
👀 Weekly Digest
Headlines
Since the beginning of 2023, the cryptocurrency market has performed strongly, and the median growth rate of the L1 ecology since the beginning of the year is about 50%. In the past week, the cryptocurrency market showed a fluctuating upward trend. Among them, tokens such as Aptos, Conflux, Magic, and Injective had the highest price increases.
Affected by the rise in token prices, the public chain TVL has seen a good rise in the past month. FTM saw the biggest change week-over-week, continuing to maintain a TVL value of around $5.14M, clearly ahead of competitors such as Solana ($264M), Aptos ($58M) and NEAR ($85M). The FTM token price has stood out.
On-chain data shows that the top three dApps/smart contracts in terms of Gas consumption on Ethereum are Opensea's Seaport, Manifold and Uniswap. Among them, the total volume of NFT transactions has shown an upward trend since December last year. The current total transaction volume is basically the same as that of May last year, and the proportion of Wash Trading has decreased significantly. The NFT market is showing signs of recovery.
DeFi
- Lido Ethereum Pledge Withdrawal Design
The upgrade of Ethereum Shanghai is coming soon, and the ETH pledge to unlock is imminent. The ETH pledged by the user through the LSD protocol will also be unlocked and withdrawn immediately. Taking Lido as an example, LSD Ethereum pledge withdrawal mainly faces several problems:
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Malicious users repeatedly send withdrawal requests and cancel requests repeatedly. By repeating this process, the attacker effectively reduces the protocol APR by forcing Lido validators to spend time in the activation queue without accumulating rewards;
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The open redemption may cause frequent fluctuations in the stETH/ETH pair, and arbitrageurs reduce the APR of the agreement through frequent deposits and redemptions;
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Withdrawals can cause slashing: While slashing penalties are usually small when the network is functioning normally, the penalty can become severe when the network enters "inactivity leak" mode due to lack of finality for more than four consecutive epochs ;
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Experienced stakers can choose to exit their positions during Negative Rebasing by observing the state of the blockchain, and re-add their positions after Slashing ends. This can lead to arbitrage at the expense of inexperienced stakers.
In the third community meeting of Lido DAO, the following feasible solutions were given for the above problems:
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Withdrawal requests cannot be canceled;
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The redemption rate of the request cannot be better than the redemption rate when the request was created;
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Avoid arbitrage by delaying withdrawal requests;
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Use the "buffer" of ETH to facilitate quick withdrawals, this includes:
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The user exists in the Lido contract, waiting to be pledged to the ETH of the verification node;
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MEV rewards and transaction fee rewards received by the executive layer every day;
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Part of the pledge reward received by the Lido verification node every day (the part exceeding 32 ETH will be automatically transferred to the withdrawal address).
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The withdrawal process adopts two modes: Turbo and Bunker:
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Turbo: once there is enough ether, the protocol will satisfy the withdrawal request;
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Bunker: When slashing may occur, the system will predict the possible loss. When losses are large, users must wait until all losses that could be predicted based on the observable blockchain state at the time the withdrawal request was created are shared among all users.
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Since withdrawal requests have a certain lock-in period, withdrawal requests should be transferable for user experience reasons. This will also allow for the formation of a secondary market for "Lido Withdrawal Queue Positions".
Currently, the withdrawal design plan is seeking community opinions, and friends who have ideas can participate in community discussion.
Other Opinions
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The unlocking of Ethereum pledge may bring increment to the loan agreement: it is not new to participate in lending activities through the loan agreement mortgage LSD pledge certificate, and many LSD agreements have achieved scale growth through leveraged pledge. With the arrival of the Shanghai upgrade, the withdrawal of Ethereum pledges will make the LSD market more prosperous, and the demand for leveraged pledges will further increase. Related automated strategy products and leverage management tools will also be further developed. Related potential projects include DeFiSaver, cian.app, etc.:
https://twitter.com/NintendoDoomed/status/1619635396014645249
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Guardian Contract provides on-chain protection for hot wallets: users can set up a multi-signature wallet/hardware wallet as their "guardian", and the guardian has the right to lock, unlock, unlock and transfer the user's assets. Once the assets are locked by the guardian, they cannot be transferred, but the user still has the ownership of these assets. If the user's private key is compromised, the contract call will allow the guardian to automatically unlock the asset and transfer it to a safe recipient.
https://medium.com/@owl_of_moistness/on-chain-2fa-is-that-a-thing-95f3fff7f1cc
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Datacheck
Decentralized Leverage Trading Platforms have outstanding performances lately, especially @GainsNetwork_io. $GNS roughly flipped @GMX_IO in revenue on Jan 25th. and reached ATH of $6.8 on Jan. 29. Explore more in #Datacheck for gTrade’s recent performance.
1/ Since its last month’s launch on Arbitrum
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Total Trade Volume: $ 18.5B, mainly on Crypto and Forex asset types;
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Total users: nearly 1000, with around 200 DAU at its peak;
2/ gDAI Vault
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TVL on Arbitrum had a rapid growth in January, surpassing Polygon;
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APR of $gDAI Vault on Arbitrum also surpassed Polygon. Arbitrium reached nearly 30% while Polygon had 15%;
Notes: You can only open trades with $DAI collateral, regardless of the trading pairs.
3/ TVL & Fee (compared with GMX)
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TVL: GMX has over $500M of liquidity vs. gTrade's $37M;
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Fee: GMX's fee income is always higher than gTrade's;
4/ Flipped GMX on revenue and txs
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Revenue: gTrade surpassed GMX on Jan.25;
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Txs: gTrade had more txs than GMX last week.
🚄 Bullet News
Infrastructure
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Decentralized exchange Sushiswap is launching a decentralized perpetual futures exchange on Sei Network.
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Founder of SlowMist: Found new security risks in some mainstream wallets, and plans to take measures to help fix them.
VC
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Fund custody platform Tholos closed a $1.5 million pre-seed round led by North Island Ventures, Lattice Capital, Chainforest and Dispersion Capital.
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Vest Exchange, a decentralized perpetual contract exchange, announced the completion of a seed round of financing. Investors include Jane Street, QCP Capital, Big Brain Holdings, Ascendex, Builder Capital, Infinity Ventures Crypto, Robert Chen (Ottersec), Pear VC, Cogient, Moonshot Research, Fugazi Labs. It is reported that Vest Exchange is a decentralized perpetual contract exchange on Arbitrum, enabling users to trade perpetual contracts of almost any asset.
GameFi & NFT
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According to the "2022 Electric Capital Developer Report", in the past year, 80% of the wallet's first transaction was related to NFT, which far exceeds DeFi. In addition, the number of monthly active developers in the NFT field reached 929 in the past year, showing an obvious growth trend.
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Pudgy Penguins released the soulTransport protocol, which allows users and clubs to deploy their own SBT and rewards users for participation to develop the Pudgy ecosystem. soulTransport will start with a limited number of individuals and clubs, but as test cases grow, soulTransport will also be open to everyone. Prior to this, Pudgy Penguins had released two SBTs: truePengu, which was released on the occasion of the first anniversary; and penguPins, which recognized the digital influence and participation of the holder in the Pudgy Penguins ecosystem.
About us:
「Dr. DODO」is the research arm of DODO. We track the evolvement of DeFi and related sectors. Dr.DODO leads a group of researchers to decode the crypto world, conduct in-depth research, publish distinctive views and predict the future value of the crypto world
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