DeFi thriving on new Binance Smart Chain with more than $10B TVL
In this week’s highlights from the DeFi market we dive into a $38 million exploit that happened at Alpha Homora. We also see growth at Binance, while Uniswap reached an incredible milestone.
The yearn ecosystem came under attack again. This time Alpha Homora was exploited for around $38M. The attacker utilized the integration with the Iron Bank and an “evil spell” and left Alpha Homora owing money to CREAM. The latter has seen its TVL plunge despite the fact that it wasn’t exploited. It remains to be seen how the projects resolve the issue of outstanding debt. However, it might be easier for projects belonging to the same ecosystem to deal with such issues.
Uniswap reached $100B in cumulative trading volume as DeFi continues to mature and over alternatives to centralized products. Ethereum has been at the center of this, but other chains are starting to catch up.
Binance Smart Chain continues to reach new milestones. Its DeFi sector now has over $10B TVL. The growth is impressive given that most of the TVL has been added over the past 3 weeks. There remains a lot of skepticism around BSC, particularly in the Ethereum community, but the lower fees and growing TVL may provide enough incentive for more developers and users to give the rival chain a try.
A number of competing L1s came out with updates recently. Polkadot released a plan for the parachains, the Cardano community is expecting the Mary hardfork in early March, and Cosmos launched Stargate.
The news around Polkadot and Cosmos is particularly interesting since the two projects offer competing approaches to the interoperable multichain vision. Polkadot has been getting more attention lately, and now Adoriasoft’s Cosmos SDK Parachain Development Kit will enable projects from the Cosmos ecosystem to integrate with the Polkadot one. This may lead to projects migrating away from the Cosmos ecosystem, as the costs of doing so may now be significantly lower.
Bitwise launched the Bitwise DeFi Crypto Fund, a product that will enable institutional investors to get index-like exposure to the DeFi sector. For now, it appears that the fund will only be taking positions in Ethereum DeFi projects, and it will be interesting to see if and when it starts to expand to other networks.
1inch conducted another airdrop and this time some of the tokens went to users who never used the aggregator, as a way to generate new interest in its product. If the approach is successful, distributing tokens to a particular user group may become part of projects’ marketing strategies.
A new stable coin RAI has launched. Rai is focused on minimal governance and relative stability, and is designed to dynamically “reprice debt” in order to maintain it. Algorithmic stable coins continue to attract attention. The end of 2020 and the beginning of 2021 saw a lot of experiments with the multi-token rebase model, and it will be interesting to see if RAI’s “relative stability” starts a new trend.
The information provided here is for informational purposes only. This is not investment advice and should not be treated as such. Strategic Round Capital and/or the author of this article holds a position in ETH, YFI.