Welcome to our second month of DeFi ticker – a monthly collection of quick takes surrounding signals from the DeFi ecosystem. These takes are meant to cover niche updates, with larger stories meriting their own article. This page will be updated gradually over the course of the month, with recent new items featured at the top of the page.
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1inch Exchange Reaches $40M in Monthly Volume
1inch.exchange, the DeFi liquidity aggregator, reaches $40M in total volume through its platform. The exchange doubled its previous monthly volume of only $20M.
— 1inch.exchange (@1inchExchange) February 27, 2020
According to Dune Analytics, 1inch has aggregated nearly $85M in total volume since inception. The liquidity aggregator experiences around $12M in weekly volume with just shy of $2M in daily volume. The record volumes come at a time when the market for liquidity aggregators is intensifying. With the recent launch of 0x’s liquidity aggregator earlier this year, we can expect to see new entrants into the space offering intuitive UX’s with lower and lower slippage.
Ultimately, the increased competition for liquidity providers is a net benefit for the broader DeFi ecosystem. More volumes and lower slippage minimize arbitrage opportunities while driving DeFi towards becoming efficient markets.
dYdX Breaks Record Daily Volumes
dYdX, an open platform for margin trading, lending, and borrowing, reached $7.2M in total daily volume.
Though the price may be down, dYdX is up over its all-time high 24H volume with over $7.2M traded!!
— dYdX (@dydxprotocol) February 27, 2020
dYdX’s continued growth is no surprise as the platform reached $75M in total loans originated earlier this month. The power for anyone to access leveraged trading positions or lending out popular crypto assets is beginning to be realized by the broader DeFi community as the platform continues to break protocol records.
MakerDAO’s Liquidity Pool Drops -70% in Fear of Governance Attack
MakerDAO, the protocol behind the popular DeFi stablecoin Dai, saw over 12,000 MKR removed from its Uniswap liquidity pool in fear of governance attack.
In the past 24 hours, 12k MKR has been removed from Uniswap and it now takes 150k MKR to pull off this attack.
Also, the governance delay (a prevention mechanism) will be voted on starting Friday. https://t.co/cXV41J2wUQ
— eric.eth (@econoar) February 19, 2020
The significant drop in liquidity comes after bZx’s back-to-back flash loan exploits where hackers where leveraging flash loans to execute on complex arbitrage opportunities across a multitude of DeFi protocols. Fears of more attacks spread across the community as the potential for flash loans to break protocols grows. Specifically, the MakerDAO community realized that an attacker could easily manipulate governance polls through flash loans. As such, there’s an upcoming executive vote to add-in a delay, where all voters have their MKR locked for 24 hours upon voting. By implementing this mechanism, the protocol can prevent against flash loan attacks where loans must be borrowed and paid back in a single block.
The removal of 12,000 MKR makes it significantly harder to manipulate the upcoming governance poll. This may have been done by the MakerDAO Foundation or a honest acting community member to help prevent this attack before the new delay-mechanism is added.
dYdX Originated over $75M in Loans In January
dYdX, the crypto margin trading platform, originated over $75M in loans throughout the month of January.
dYdX has originated over $75M of loans in the past month! 📈 pic.twitter.com/z0jiZsn7IT
— dYdX (@dydxprotocol) February 5, 2020
The rise dYdX over the past month should come as no surprise as Ether performed rather positively in the same month. It is likely that DeFi users capitalized on dYdX’s permissionless margin trading to get leveraged on Ether given wide-spread bullish sentiment in the community. According to LoanScan, the protocol led the field in terms of loans originated over the past 30 days, distributing $76.2M in loans which represent 68% of the total loans originated.
Other lending platforms, Compound and MakerDAO, originated $27.4M and $8.78M respectively. It is important to note that LoanScan only includes loans originated from MakerDAO’s Single Collateral Dai – likely misrepresenting the total amount of loans originated at large. With the high-yielding DSR embedded within Multi-Collateral Dai, MakerDAO has likely originated a significantly higher amount of loans through MCD than depicted on LoanScan.
Regardless, the substantial amount of loans originated through dYdX signals an increased usage on margin trading from the DeFi community as we enter what many believe to be the next bull run for DeFi and Ethereum at large.
PoolTogether Launches Daily Prize Pool
PoolTogether, the world’s first no-loss lottery, has officially launched its daily prize pool. The new pool leverages interest-bearing USDC to distribute prizes on a daily basis to ticket holders.
This daily pool uses the stable coin USDC and has been seeded with $200,000 of Sponsored USDC.
More details here: https://t.co/KnnKIBiVZT
Dive in! 📈
— PoolTogether (@PoolTogether_) February 4, 2020
The prize pool has been subsidized with $200,000 in sponsored USDC. For those unfamiliar, PoolTogether leverages Compound to earn interest on the pooled funds for both its daily and weekly prize pool. Compound’s lending interest rate currently sits at 4.1% APR for USDC. The $200,000 in sponsored capital (which is ineligible to win) generates around ~$22 on a daily basis. To date, the daily prize pool has distributed $63, $39, and $39 over the past three days since launching.
The addition of the USDC daily prize pool comes right after PoolTogether raised $1M in capital from prominent crypto funds including Spencer Noon’s DTC Capital, IDEO Venture Capital, and ConsenSys Labs. Looking forward, we should expect PoolTogether to continue its expansion with this unique web3 concept of a no-loss lottery.
Maker Protocol Passes New Round of Executive Votes
Added: February 4th, 2020
MakerDAO, the permissionless lending protocol for Dai, passed a new round of executive votes surrounding the Dai Savings Rate, ETH and BAT stability fees, as well as new dynamics with Single Collateral Dai (SAI).
Maker Protocol update:
Executive Vote passed:
– Dai Savings Rate ⬆️ from 7.75% to 8.75%
– ETH and BAT Stability Fees ⬆️ from 8% to 9%
– Sai Stability Fee ⬆️ from 9% to 10%
– Sai ETH Debt Ceiling ⬇️ from 45 million to 30 million
— Maker (@MakerDAO) February 4, 2020
The Dai Savings Rate (DSR) increases another percentage point, up to 8.75%. Users with Dai locked in the DSR will now receive additional interest on their savings. Naturally, with an increase in the DSR, there’s also an increase in the underlying stability fees. Users who decide to open vaults will now be subject to a 9% APY interest on their loans, up from 8%. The spread on the DSR and the SF remains at 0.25%.
While Multi-Collateral Dai continues to garner more and more traction, MakerDAO is also decided to lower the debt ceiling on Sai while bumping up the stability fee to 10%. This is meant to incentivize the remaining Sai holders to migrate over to #MuchCoolerDAI. With that, there’s now an arbitrage opportunity for any Sai holders. By migrating their Sai to Dai, they can save 1% on annualized stability fees, while also being able to capitalize on the high-yielding Dai Savings Rate.
Analyst at Bankless – one of the leading resources for open finance. Lucas is an active contributor to the DeFi ecosystem with appearances in other notable DeFi outlets including The Defiant and Our Network. He has years of experience working with dozens blockchain and token startups where he focused on token economics, marketing, and growth.