Research Summary
The report discusses the latest developments in the DeFi sector, focusing on the Blast project, which has attracted over $600M in total value locked (TVL) despite concerns about its legitimacy. It also highlights the importance of bridges in DeFi infrastructure and potential opportunities in tokens like Connext, Axelar, and Synapse. The report also mentions several upcoming projects, including Grace Protocol, Penomo Protocol, and KintoXYZ.
Key Takeaways
Blast Project’s Rapid Growth Amid Doubts
- Blast’s Rapid TVL Accumulation: Despite being a new project, Blast has managed to attract over $600M in TVL. The project, backed by Paradigm, is a Layer 2 (L2) solution that offers native yield for stETH/sDAI tokens. It has a points program that rewards users for deposits and referrals, with points redeemable for an airdrop in the coming months.
- Concerns About Blast’s Legitimacy: Despite its rapid growth, many have expressed doubts about Blast. The project is currently a 3/5 multisig with no actual L2, essentially functioning as a wallet holding hundreds of millions of dollars in tokens. Even Paradigm, its backer, has shown hesitance in supporting their launch program. The need for another L2 solution is also questioned.
Importance and Potential of Bridges in DeFi
- Role of Bridges in DeFi: Bridges are a crucial part of DeFi infrastructure, facilitating the transfer of tokens between different blockchains. Despite their importance, bridge tokens have been undervalued due to perceived lack of utility and use case.
- Future Potential of Bridge Tokens: The report suggests that the launch of the Layer Zero token could boost the value of current bridge tokens. As more Layer 1 (L1), L2, and Layer 3 (L3) solutions launch, the need for bridges will increase, potentially benefiting bridge tokens.
Upcoming Projects in the DeFi Space
- New Projects on the Horizon: The report mentions several upcoming projects in the DeFi space, including Grace Protocol, a resilient lending protocol; Penomo Protocol, which aims to tokenize batteries and unlock capital; and KintoXYZ, an L2 solution focused on providing safe access to financial services.
Actionable Insights
- Monitor the Blast Project: Given the rapid growth and controversy surrounding the Blast project, it could be beneficial to keep a close eye on its developments and market sentiment.
- Research the Potential of Bridge Tokens: Despite their current undervaluation, bridge tokens could offer potential growth opportunities, especially with the anticipated launch of the Layer Zero token and the increasing need for bridges in the DeFi space.
- Keep an Eye on Upcoming DeFi Projects: New projects like Grace Protocol, Penomo Protocol, and KintoXYZ could bring innovative solutions to the DeFi space. Monitoring their progress could provide insights into emerging trends and opportunities in the sector.
