Weekly Wrap #4
Week of April 4th - April 10
This week in the world of crypto, Do Kwon continues on his mission to make UST the #1 stablecoin in crypto while expanding the Terra ecosystem, following in the footsteps of Terra & Do Kwon the NEAR protocol teased the launch of their very own stablecoin, the UK gov takes the opposite approach to the EU government and takes measures to ensure that the UK becomes the crypto hub of the world. As is common with every week in the crypto space, we also saw multi-million dollar funding rounds and multi-million dollar exploits of protocols. To end the week, we got a surprise return of a prominent DeFi figure. Let’s dive in.
Do Kwon continues to make moves
Last week the talk was about the new foundation started by Terra named the Luna Foundation Guard (LFG). This foundation has $3B dollars which is going to be used to buy BTC in order for BTC to become a reserve asset for the native stablecoin UST.
This week we found out that the plans of Do Kwon do not stop at BTC. On the 8th of April, Terra announced that they have made a deal to buy $100m worth of AVAX which will be added directly to the LFG treasury. This move signifies that Avalanche and Terra have both shown each other long-term faith in the success of their individual blockchains.
It does not stop there, Terra also announced integrations with two different protocols. Namely Frax finance & Synapse. FRAX is an algorithmic stablecoin of its own, so Terra & Frax Finance decided to come together to make a FRAX/UST 4pool on the Curve Finance platform. By creating this pool, the two protocols have essentially aligned their incentives with each other by ensuring that their stablecoin prices remain similar. They have also announced that projects such as OlympusDAO, Redacted cartel, BadgerDAO, and Tokemak will be involved with the 4pool in some way.
Another integration has been made with the Synapse protocol. Synapse is a bridging protocol that allows users to transfer native assets from one chain to another in one transaction, Synapse has amassed $754m in TVL so far. Recently, they announced the integration of UST into their platform marking the first time they have integrated a non-EVM chains native token into their platform.
NEARs new stablecoin
Taking a leaf out of Terra notebook, the NEAR protocol decided to launch a stablecoin of their own. The NEAR protocol is a Layer 1 blockchain which is highly scalable due to its sharding architecture. Seeing the success of Terra fueled by the adoption of UST, NEAR decided to follow suit and launch their own stablecoin USN. With the announcement it was said that they will offer 20% APR on USN making it one of the highest yielding stablecoin farms. This started off as a rumour circulating on twitter but was later confirmed by the BLOCK.
UK governments regulatory steps
Last week, the EU was passing regulatory bills that could be perceived as anti-crypto. This week the UK government announces that they are looking to make the UK a global hub for cryptocurrencies. This is a part of their sustained effort to remain on the cutting edge of financial technology.
There were two major takeaways from this announcement. The first being that they will now be accepting stablecoins as a form of payment within the country. The other major announcement was that the Royal Mint will create their own NFT. It is still unclear what the purpose of the NFT is but what can be said is that these announcements are a major step forward in terms of the mainstream adoption of crypto.
Inverse Finance hacked for $15m
Inverse finance is a lending and borrowing protocol that also has its own native stablecoin DOLA. On the 3rd of April it was announced that they fell victim to a very sophisticated hack. The hacker withdrew 900 ETH through tornado cash and dispersed it amongst many wallets, they then used 500ETH to buy 1.7k INV through sushiswap on the INV/WETH pair. This sent the price of INV very high, almost a 50x. They then started simultaneously spamming transactions to be the first one in the next block. With this, the Inverse finance oracle then returned a price which was very high. The attacker then used his 1.7K INV, which was supposed to be $644k, as collateral to borrow $15.6m worth of tokens.
This week there were 4 notable funding rounds that took place.
Boba Network is a layer 2 scaling solution for Ethereum. They recently secured $45m in funding at a $1.5b valudation in a round that featured over 400 participants. This round included exchanges, VC funds, and some celebrity personalities. The purpose of this fundraising round is to help build out their team and also drive ecosystem adoption through making developer incentive programs.
Lightning labs raised $70m in their series A round led by Valor Equity Partners and Baillie Gifford. The purpose of their raise was to support their protocol named Taro Protocol. The purpose of Taro is to “bitcoinize the dollar” by introducing stablecoins to the lightning network. So we will see stablecoin payments being used on the Bitcoin blockchain very soon.
Improbable is a company focused on building tools for virtual experiences. They recently raised $150m in a round led by Anderseen Horowitz and Softbank. The goal is to allow companies and individuals to build their metaverse experience on their platform which is interoperable with many different blockchains.
Certik is a blockchain security firm, their role is to audit smart contracts rigorously to ensure that they are safe to be launched. They raised $88m in a round that involved firms such as Sequoia capital, Goldman Sachs, Lightspeed ventures, and Tiger Global just to name a few. This round valued the company at $2 billion and came on the back off a massive increase in revenue generated by the company.
The return of frog nation?
To end the week, we saw the return of a popular figure in the crypto space, Daniele Sesta. He had a meteoric rise to popularity in 2021 on the back of his 3 protocols Abracadabra.money, Popsicle Finance, and Wonderland. His success was quickly halted after it was outed that the person who was working closely with him and running some of the treasuries was a known felon going by the twitter username @0xsifu.
On April 9th he suddenly made a return to twitter by announcing that he is making a new protocol that will allow users to conduct leveraged stablecoin yield farming. He states that some of the strategies offered will generate upwards of 80% APY.
That is all for this weeks recap of the events that took place in the crypto space, tune in next week for another edition of the newsletter.