Innovation & Launches
LUNA Reboot Plummets Over 70% Just Hours After Debut (2 minute read)
A new version of the Terra blockchain was launched early Saturday. The new LUNA token lost 73% of its value in its first 12 hours. LUNA is currently traded across seven exchanges. None of the exchanges have enabled LUNA futures trading. Do Kwon was mostly quiet during the launch except for retweeting announcements from exchanges. Only 21 million out of the 1 billion new LUNA tokens were airdropped on Saturday. The rest will be airdropped in phases.
Tether Expands With Introduction of Dollar-Pegged Stablecoin on Polygon (1 minute read)
Tether has launched its USDT token on Polygon. The stablecoin is now available on more than 11 blockchains. USDT will provide a stable currency for investors on Polygon to generate yield and to move in and out of the network. Polygon has more than 19,000 decentralized applications running on its network with more than 142 million unique user addresses.
Guides & Resources
Visualising the 7-block reorg on the Ethereum beacon chain (7 minute read)
This article looks at the 7-block reorganization that recently occurred on the Ethereum beacon chain. It aims to provide a guide on understanding the Ethereum Proof-of-Stake protocol and why the reorg happened. The reorg happened due to a recent fork choice update. The update was rolled out at its own pace, resulting in only some validators using the update, which caused a split. An incorrect implementation of when the update was expected to run led to the persistence of the fault. The reorg did not result in the loss or delay of finality.
What is the end-game for Frax Finance? (7 minute read)
Frax Finance's end-game is to achieve the holy trinity of DeFi. The protocol aims to have its own stablecoin, liquidity ecosystem, and lending market. This will allow Frax to issue its own currency and control the supply and demand of that currency, similar to a central bank. The protocol still faces significant challenges such as smart contract risk, custodial and regulatory risk, and execution risk. Frax Finance is highly experimental and risky, but it has the potential to occupy a strong position in the crypto space over the long term.
"Where is the money coming from?" (6 minute read)
It is important to identify DeFi protocols with true revenue sources. Examples of real revenue in DeFi include trading fees for liquidity pools, transaction fees for services, options/insurance premiums, and borrower interest. Examples of unsustainable yields include inflationary yields, staking yields from new token issuance, and unsustainable revenue. This Twitter thread discusses how to analyze a project to make sure its rewards are sustainable. It provides resources and tools for tracking money flow and researching protocols.
What is @LensProtocol? (3 minute read)
Lens Protocol is a fully on-chain social graph created by Aave. It makes it simple for developers to create social decentralized apps. Lens Protocol works by making everything an NFT. Users can add modules to profiles and posts so that only users who fit certain conditions can interact with them, for example, they can make it so only subscribers can see, comment, or mirror posts. Mirrors are the equivalent of retweets or shares. Lens Protocol provides a simple GraphQL API for developers to work with the protocol. More details are available in the thread.
On-Chain Forensics: Demystifying TerraUSD De-peg (20 minute read)
An analysis of on-chain events revealed that a small number of players identified vulnerabilities early into the UST depeg and exploited them by withdrawing UST from the Anchor protocol, bridging the funds from Terra to Ethereum via the Wormhole infrastructure, swapping UST to other stablecoins through Curve, and arbitraging between various centralized and decentralized exchanges. This was likely done by several well-funded entities rather than a single attacker. This article looks at the depegging of Terra's UST through on-chain activity to see what triggered the stablecoin's collapse.