Summary

Lending: EraLend encountered a hacker attack, with a significant outflow of liquidity; Maker DSR interest rates may be raised to 8%.

LSD: Last week, ETH collateralization rate increased to 20.87%, a month-on-month growth of 1.70%. There were 25.09 million ETH locked in the beacon chain last week, corresponding to a collateralization rate of 20.87%, with a month-on-month growth of 1.70%, and a continuous four-week growth rate improvement. Among them, there were 698,600 active validating nodes, a month-on-month increase of 2.14%, and 81,200 queuing validating nodes, a month-on-month decrease of 1.64%.

Ethereum L2: Layer 2 TVL total value locked surpassed $10 billion again. With the drive of Op Mainnet and worldcoin, TVL increased significantly by 28.15%. A large amount of funds flowed into Base yesterday, with a daily inflow of $58.557 million.

DEX: Dex combined TVL 13.15 billion, decreased by 1.6 bln compared to last week. Dex 24-hour trading volume 2.26 billion, 7-day trading volume 11.15 billion, decreased by 8.1 billion compared to last week. Multiple old versions of the Vyper compiler underlying Curve had recursive lock failures, issues with versions 0.2.15, 0.2.16, and 0.3.0 have not been fixed yet. In theory, any protocol using these Vyper versions could be attacked. Currently affected protocols include Curve's alETH/msETH/pETH pools, as well as the CRV ETH pool. Other affected protocols include deBridge and Ellipsis pools, with a cumulative loss of 52 million USD. This includes 21 million USD in eth, 26 million USD in weth, 5.3 million USD in crv, and 70,000 USD in wbnb.

Derivatives DEX: The overall trading volume of derivatives DEX continued to decline last week (July 24th to July 30th). The weekly trading volume of 9 major derivatives DEX protocols was about 7.4 billion USD, compared to about 7.6 billion USD in the previous week, a decrease of about 2%. The contraction of trading volume is quite severe, approaching the levels at the end of May and early June 2023, as well as the end of December 2022, and is at a relatively low position.

Loan

Eralend

zkSync Era native lending protocol Eralend was hacked on July 25th, causing a loss of $2.76 million in the USDC pool by manipulating the oracle price. After the incident, TVL dropped from $18.51 million to $5.5 million in a single day, a decrease of over 70%. Liquidity has continued to be withdrawn, and the current amount of funds locked in the protocol is only $2.83 million.

Source: defillama

To limit further impact, EraLend has temporarily paused borrowings, USDC supply, and SyncSwap LP supply, while significantly reducing the interest rates in the USDC pool to protect the affected borrowing positions from potential liquidation.

MakerDAO

On July 28th, the Maker community voted in favor of a proposal to introduce Enhanced DSR (EDSR), which adjusts the DSR deposit rate based on DSR utilization. EDSR is a one-way temporary mechanism that initially sets its value to the highest and decreases as DSR utilization increases, but DSR will no longer increase after the utilization decreases.

Source: Maker Forum

According to the utilization rate standard mentioned above, the total DAI supply in DSR is about 358 million, accounting for about 8% of the total circulation (4.29 billion). Therefore, the DSR interest rate may be raised to 8%.

Maker's goal with this measure is to stimulate the adoption of Dai by directly increasing deposit interest rates, stabilize the current declining Dai supply, and provide long-term growth support for Dai demand. However, the biggest challenge is the direct increase in expenses for the Maker protocol, which needs to be subsidized by protocol revenue to cover this interest. The existing cost of DSR expenditure will increase by about 10 million per year.

Alchemix

The total staking amount has seen a continuous four-week growth rate increase.

Source: LD Capital

ETH staking yield rate 4.27%

Source: LD Capital

Among the three LSD protocols, in terms of price performance, LDO decreased by 6.1% in the past week, RPL dropped by 4.8%, and FXS declined by 0.1%. In terms of ETH staking, Lido rose by 1.60% in the past week, Rocket Pool increased by 0.18%, and Frax rose by 0.97%. Last week, LDO early investor KR 1 continued to sell 500,000 LDO tokens. After Nexus made a large deposit, RPL saw a large unstaking of 6,720 ETH tokens, and the current Rocket Pool deposit pool balance is 2,750 ETH tokens. The Mini Pool queue was cleared, and RPL staking rate is 47.34%. FXS is expected to release FRAX V3 within a month, and founder Sam mentioned in an interview with Ouroboros Capital that Frax is entering the RWA field and will officially announce the progress of its business soon. In addition, SSV will hold its second mainnet conference call at 1 p.m. UTC on August 1st, entering the Limited Launch phase and introducing partner operators.

Ethereum L 2 

TVL

Layer 2 TVL increased by $600 million compared to last week, with a total locked amount of $10.55 billion, once again surpassing $10 billion.

Data Source: l 2 b eat

Op Mainnet experienced significant growth in TVL with the support of worldcoin, reaching an increase of $480 million, a growth of 28.15%. The newly launched layer 2 solutions base, mantle, and linea have impacted zksync and starknet. Zksync's TVL has been declining for the past month, while Starknet's TVL has reached a turning point in its continuous upward trend, with a decrease of 22% last week.

Rapid Growth of New layer 2 TVL

Base mainnet is expected to be officially released in early August. Although the mainnet has not been officially released to users, a large amount of funds have already flowed into Base (currently only incoming cross-chain funds). On July 30, Base received a daily inflow of 58.557 million US dollars, sparking discussions about meme $BALD on Base.

On-chain Activity

DEX

Dex combined TVL 13.15 billion, decreased by 1.6 billion compared to last week. Dex 24-hour trading volume is 2.26 billion, 7-day trading volume is 11.15 billion, decreased by 8.1 billion compared to last week.

Multiple old versions of the Vyper compiler used by Curve encountered recursive locking issues. The issues in versions 0.2.15, 0.2.16, 0.3.0 have not been fixed yet. In theory, any protocol using these Vyper versions will be vulnerable to attacks. Currently affected protocols include Curve's alETH/msETH/pETH pools and the CRV ETH pool. Other affected platforms include deBridge and Ellipsis, with a total loss of 52 million US dollars. This includes 21 million US dollars in ETH, 26 million US dollars in WETH, 5.3 million US dollars in CRV, and 70,000 US dollars in WBNB.

The event has resulted in a decrease of 1.5 billion Curve TVL, a decrease of 44%. Due to Curve Founder Michael mortgaging a large amount of CRV to borrow stablecoins, the main 4 loans are: 65 million USD borrowed on Aave at a liquidation price of 0.37 USD; 21 million FRAX borrowed on FRAXlend at a liquidation price of 0.4 USD; 18 million USD borrowed on Abracadabra at a liquidation price of 0.39 USD; 7 million USD borrowed on Inverse at a liquidation price of 0.4 USD. The market may once again witness a bull vs bear battle. Curve, as an important infrastructure for stablecoins, RWA, LSDfi, and other multi-track projects, faces a significant challenge and test to DeFi.

Ethereum

ETH L 2/sidechain

Impacted by the rise of Base, Velo's volume and TVL have both increased.

BTC L 2/sidechain

Alt L 1

Derivative DEX

The overall trading volume of Derivative DEX continued to decline last week (July 24th to July 30th). The weekly trading volume of 9 major Derivative DEX protocols was about 7.4 billion US dollars, compared to the previous week's weekly trading volume of about 7.6 billion US dollars, a decrease of about 2%. The contraction of trading volume is relatively severe, approaching the level at the end of May to early June 2023 and the end of December 2022, and is at a relatively low position.

Source：tokenterminal

GMX's trading volume has experienced the most severe decline, showing similar performance during the downturn in late May and early June 2023. SNX's 7-day trading volume is $1.7 billion, while GMX is only $330 million. This has also led to SNX having more protocol revenue than GMX.

Contract trading on SNX (through frontends such as Kwenta) comes with OP tokens as incentives. Recently, OP has gained a significant amount of trading volume. This incentive will end on August 30th, and it is currently uncertain whether the incentive will continue.

In addition to SNX, GMX is also facing the impact of second and third-tier perpetual contract projects. When trading on these platforms, besides the fee rewards,secondary title

Cryptocurrency incentives, higher yield.

In terms of TVL, the overall TVL of derivative DEX track is also declining, with funds in a slow outflow state in the past 7 days.

Source: Defillama