This Week in DeFi – November 19

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To the DeFi community,

This week, Paraswap distributed PSP tokens to approximately 20,000 active users of the protocol, a small fraction of total users defined based on a fairly strict criteria of consistent recent use of the protocol and exclusion of ‘gaming’ wallets and address clusters. 




Injective launched Astro, a liquidity mining program that will distribute 10 million INJ tokens currently worth $120 million to market makers and traders on the platform. Rewards will be distributed over five years, with more than 162,000 INJ available in the first month.



Pendle Finance, allowing users to lock tokens with future yield potential to receive those rewards immediately, launched on Avalanche, with LP tokens from Trader Joe and BENQI eligible for staking. Deposits of these trading pairs will also be eligible for PENDLE rewards of 125% of the base rewards for pools during launch week.


And Polysynth raised $1.5 million for synthetic assets on Solana, aiming to make available more than 100,000 synth assets following mainnet launch. The funds will go towards building a development team and completing smart contract security audits, as well as development of a Virtual Market Maker (VMM) that Polysynth claims will eliminate the need for bootstrapped liquidity from LPs and risks like impermanent loss.


Airdrops have come a long way since emerging around the ICO era, where crypto startups would simply airdrop hundreds or thousands (sometimes millions or more!) of their protocol token to every address on the Ethereum blockchain in the hopes that such generosity would foster interest and investment in their project. As with most ICOs, these early airdrops were poorly designed, rarely had the intended effect, and for the most part ended up as worthless dust in wallets of the day.


Not everyone is thrilled with the Paraswap airdrop, many having their own particular argument about how they should be entitled to a greater share of tokens, or any tokens at all. But a close reading of the structure and reasoning behind the tightly controlled PSP distribution reveals a thoughtful effort to only distribute tokens not to users that happened to try the protocol early, or that had made one or two large trades, but that had consistently and meaningfully used the liquidity aggregation service and were likely to continue to do so. 

Remember, airdrops are not a reward for showing up early or throwing around lots of value – they’re a distribution channel for the keys to the castle, and ideally a reflection on the type of community distributing protocols want to foster long term. Uniswap and ENS are examples of other approaches to performing airdrops, but Paraswap has set a new bar for thoughtful investigation and ultimate distribution to those accounts most likely to strengthen the protocol long-term.

One last reminder; if you genuinely believe in a protocol, and aren’t just looking for the next free bag of tokens to dump, there’s nearly always ample opportunity to grab PSP or other protocol tokens at a discounted valuation on the secondary market. Don’t expect to get rich on airdrops, but instead work to identify quality projects and consider the economics of distribution from the founders perspective, and you shall be richly rewarded.



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Interest Rates


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Cheapest LoansCompound at 4.95% APY, Aave at 5.37% APY

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Top Stories

pSTAKE Raises $10M to Bootstrap Liquid Staking Protocol


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Stat Box

Total Value Locked$102.64B (down -7.76% since last week)

DeFi Market Cap$152.5B (down -9.30%)

DEX Weekly Volume$25.96B (down -0.42%)

DAI Supply8.61B (up 0.47%)

Total DeFi Users3,979,800 (up 2.35%)

Bonus Reads

[Samantha – Bankless] – DAOs: Changing the course of human life

[Samuel Haig – The Defiant] – ConstitutionDAO Members Decry High Gas Fees After Narrowly Losing Auction

[Jack Melnick – The Tie] – Unipilot and Popsicle.Finance: $6bn+ TAM for Liquidity Optimization

[ycctrader – The Defiant] – Ape Diaries: Gasless Yield Farming on Aurora, NEAR’s EVM-Compatible Blockchain

[Anthony Sassano – The Daily Gwei] Strong Hands – The Daily Gwei #379

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