This Week in DeFi – May 7

This post was originally published on Defirate

To the DeFi community,

This week, Uniswap V3 has finally dropped! The upgrade to DeFi’s most popular protocol brings custom liquidity pools with bounded asset prices to protect against impermanent loss and drastically increase capital efficiency, resulting in super low slippage and improved returns for liquidity providers. LP strategies can now be much more targeted and complex, with the upgrade likely to keep Uniswap in the top DEX spot for the foreseeable future.

 

Following years of work by The Maker Foundation to bring MakerDAO to life, 84,000 MKR worth more than $400 million has been transferred to MakerDAO governance with no strings attached, to be managed by the decentralized governance community. The Foundation is set to dissolve before the end of 2021, offering a textbook example of how DeFi protocols can progress through the necessary stages of centralization and emerge with full community control.

 

Impermax kickstarted their LP token leverage protocol with a retroactive airdrop to Uniswap V2 LPs, distributing more than $9 million worth of IMX tokens in the process. The protocol has already attracted more than $10 million in TVL and should help unlock significant additional liquidity in DeFi markets, and, in turn, greater capital efficiency for liquidity providers.

And IDEX released Hybrid Liquidity, a design combining a programmatic order book and AMM liquidity pools to combat front-running trades and failed transactions. The platform is non-custodial and executes on-chain, but executes trades instantly against pooled liquidity using an algorithmic order book. IDEX cites a Cornell University study that found bots earned up to $20,000 a day front running DEX traders, so IDEX LPs could stand to regain substantial profits if Hybrid Liquidity performs as intended.

LPs are in the spotlight this week, and it’s no surprise – they’re the lifeblood of the DeFi ecosystem, providing the capital that makes decentralized exchange possible. And the more liquidity a given protocol can accumulate, the better exchange conditions traders will receive using that platform in terms of slippage and available assets. It’s little wonder the competition continues to heat up to win the hearts and capital of these pioneering DeFi investors.

biswap

TVL continues to grow at a healthy pace, but capital efficiency improvements so far have come mostly from increasing complexity and customization among leading DEX platforms like Uniswap V3 and Balancer V2. An essential piece of DeFi adoption has been simplifying UX and UI design to make investing in the crypto space as simple as investing with traditional institutions. Who will crack that code and bring the next wave of capital flowing in is yet to be seen…

Interest Rates

DAI

Highest Yields: Nexo Lend at 10% APY, Fulcrum at 9.66% APY

Cheapest LoansCompound at 7.24% APY, Aave at 7.24% APY

MakerDAO Updates

DAI Savings Rate: 0.00%

Base Fee: 0.00%

ETH Stability Fee: 5.50%

USDC Stability Fee: 0.00%

WBTC Stability Fee: 4.50%

USDC

Highest YieldsFulcrum at 11.63% APY, Nexo Lend at 10% APY

Cheapest Loans: dYdX at 8.08% APY, Compound at 8.13% APY

Top Stories

Introducing Lido for Solana

Introducing the Open DeFi DAO

Announcing Alpha Grants Program

Balancer Labs Launches Incentive Program for IDO Token Sales

Formation Fi Closes $3.3M Strategic Sale

Stat Box

Total Value Locked$77.4B (up 0.64% since last week)

DeFi Market Cap$135.71B (up 9.24%)

DEX Weekly Volume$18.68B (up 16.17%)

DAI Supply: 4.27B (up 16.67%)

Total DeFi Users2,168,900 (up 5.38%)

Bonus Reads

[Owen Fernau – The Defiant] – Teens Controlling Multi-Million-Dollar DeFi Protocols Are Not Playing Around

[Anthony Sassano – The Daily Gwei] – DeFi Treasuries – The Daily Gwei #239

[David Hoffman – Bankless] – The Never Sell Plan

[Masha Prusso – The Defiant] – All the Ways to Generate Passive Income With DeFi

[Anthony Sassano – The Daily Gwei] – Ethereum Awareness – The Daily Gwei #240

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