This Week in DeFi - April 9

August 4, 2022 - 4 Min Read

To the DeFi community,

This week, Chainswap raised $3 million in a funding round led by Alameda Research and the OKEx OK Block Dream Fund, while also taking the rare step of announcing an upcoming airdrop before the snapshot has been taken. Chainswap currently bridges between Ethereum, BSC, and the Huobi ECHO chain, with plans to integrate the Bitcoin, Polkadot staking, and Solana blockchains in the near future.

UMA and Sushiswap, two of the fastest moving and innovative projects in the DeFi arena, have teamed up to offer call options for xSushi tokens. The first set of options will expire on May 31st, allowing options buyers to buy xSushi at $25 regardless of the spot price on that date. If the xSushi price is above that price, options holders can execute the contracts and flip xSushi for instant profit.

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Balancer was in the headlines this week after announcements that an implementation of the crypto swap protocol would be coming to Algorand, with some confusion over who would be engineering the project. The Balancer team will remain focused on building Balancer V2 on Ethereum, while participants from Reach and the Algorand team plan to have a Balancer implementation up and running in Q3. Reach received a small $5k grant from Balancer to support the mission of expanding to new crypto frontiers.

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Kyber is making moves to further increase the capital efficiency of one of the earliest token swap protocols with the beta release of the Kyber Dynamic Market Maker. The DMM will use variable fees to offer liquidity providers some protection against impermanent loss, and will reduce slippage slippage for traders. Kyber’s DMM will also allow LPs to define active price ranges similar to the Uniswap V3 implementation, adding further protection against impermanent loss while potentially limiting prices at which price ranged liquidity pools will be used for swaps.

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It’s undeniable; if you’re willing to go hunting for opportunity, DeFi is back in business and stronger than ever, with multiple low-cost chains to choose from and major developments flowing out of some of the most established and innovative teams in the industry. With so many new capabilities cropping up after months of research and development, the density of alpha-rich asymmetric bets is approaching levels last seen in the spring of 2020, when DeFi was just starting to ramp up as users came to realize the full potential of composable protocols and the increasing demand for sources of non-traditional returns.

It’s true, there’s more ground to cover between old reliable plays on Ethereum, BSC, Algorand, and a rising number of cross-chain protocols that don’t call any single base layer home. But a focus on good tokenomics and projects with a long-term view are likely to outperform over time, even if they’re not the most popular flavor of the day. In a fast moving market, slow research might just still be your best friend. Few...

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