Research Summary
The report discusses the potential instability of the TrueUSD (TUSD) stablecoin due to the insolvency of Prime Trust, the custodian company that held the assets backing TUSD. It also highlights the emergence of ZK Stack, a developer toolkit for creating Zk-rollups on Ethereum, and the shift from Layer 2 (L2) wars to ecosystem wars among major rollup players. The report also covers various updates in the DeFi space and industry news.
Key Takeaways
TrueUSD’s Potential Instability
- Prime Trust’s Insolvency: Prime Trust, the custodian company that held the assets backing TUSD, is insolvent, causing panic about TUSD’s stability. However, TUSD’s exposure to Prime Trust is reportedly only $26k, a small amount that can be easily covered.
- Redemption Issues: TUSD claims to have “multiple USD rails” but has not convinced users of this, as many have been unable to redeem TUSD. The company has not publicly outlined its banking partners.
- Falling Liquidity: As news of Prime Trust’s insolvency spread, liquidity for TUSD on platforms like Curve and Binance.US fell rapidly, with TUSD depegging to 80 cents on Binance.US.
ZK Stack and the Shift from L2 Wars to Ecosystem Wars
- ZK Stack Introduction: zkSync introduced the ZK Stack, a developer toolkit for creating Zk-rollups on Ethereum. This toolkit is part of an ecosystem of L2s with seamless connectivity.
- Shift to Ecosystem Wars: Major rollup players are now providing L2-as-service, competing as ecosystems rather than individual rollups. The goal is to build the best ecosystem for L2s and L3s, focusing on ease of deployment, interoperability, attracting teams, and building network effects.
DeFi Updates and Industry News
- DeFi Updates: Various DeFi platforms have announced updates, including dYdX’s launch of its Cosmos-based blockchain testnet, Velodrome v2’s live status, and Lybra Finance’s v2 competitive audit.
- Industry News: Notable industry news includes MasterCard’s launch of the “Multi-Token Network,” the SEC’s approval of the first leveraged Bitcoin futures, and the European Union’s outline for the Digital Euro.
Actionable Insights
- Monitor TUSD Situation: Given the uncertainty surrounding TUSD, it may be prudent to monitor the situation closely for any developments that could impact its stability.
- Explore ZK Stack: Developers and companies interested in creating Zk-rollups on Ethereum should investigate the potential of ZK Stack.
- Stay Updated on DeFi Developments: With numerous updates and changes in the DeFi space, staying informed can help identify potential opportunities and risks.
