Research Summary
The report provides an overview of the latest developments in the decentralized finance (DeFi) sector, focusing on Ethereum Reserve Dollar, a lending platform, and Equation, a PerpDex on Arbitrum. It also covers updates in DeFi, vital news, on-chain data, and macro metrics.
Key Takeaways
Ethereum Reserve Dollar’s Innovations
- Introduction of $USDE: Ethereum Reserve Dollar has introduced a lending platform that allows users to borrow $USDE, a USD-pegged stablecoin native to the platform, using liquid staking derivatives and blue-chip DeFi tokens as collateral. The protocol maintains a minimum collateralization ratio of 110%.
- Blue-chip DeFi tokens as collateral: The platform is the first to extend collateral support for blue-chip DeFi tokens, enabling $USDE to mirror the market dynamics of the entire ERC-20 DeFi ecosystem and reducing exposure to the price volatility of a single token.
Equation’s Unique Features
- High Leverage and Token Issue: Equation, a PerpDex on Arbitrum, allows LPs to turn their volatile losses into temporary losses and traders to leverage up to 200x. For holding a 200 leveraged BTC position, users can receive 14433% APR in token $EQU.
- Zero Fee Trading Event and Position Mining: Equation has launched a Zero Fee Trading Event and Position Mining, where holding contract positions on Equation will earn $EQU token rewards. This part allocated 40% of the daily EQU emission.
On-Chain Data
- Binance’s Dominance: Binance began the year in its most dominant position ever, holding close to 70% of the spot volume market share amongst all centralized exchanges.
- Hard Finality of Different L2 Chains: The report provides a Dune Dashboard to monitor Hard Finality of Different L2 Chains and L1 data posting delay in real-time.
Macro Metrics
- US Equity Markets: The report suggests that US equity markets are not contesting between performance with other developed countries, raising questions about whether this narrative will continue.
- Employment Costs and Bankruptcies: Employment costs remain elevated, despite a very aggressive hiking cycle. The report also notes an alarming number of bankruptcies.
Actionable Insights
- Monitor the Performance of Ethereum Reserve Dollar: Given the innovative features of Ethereum Reserve Dollar, such as the introduction of $USDE and the use of blue-chip DeFi tokens as collateral, it would be beneficial to monitor the performance of this platform.
- Consider the Potential of Equation: With its unique features such as high leverage and token issue, and the launch of a Zero Fee Trading Event and Position Mining, Equation presents an interesting case for further exploration in the DeFi space.
- Keep an Eye on Binance’s Market Share: As Binance holds a significant market share amongst all centralized exchanges, it would be worthwhile to keep an eye on its performance and any potential impacts on the broader crypto market.
- Assess the Impact of Macro Metrics on Crypto Market: The report’s macro metrics, such as US equity markets’ performance and the number of bankruptcies, could have implications for the crypto market. Therefore, it would be beneficial to assess their potential impact.
