⚡Are Stablecoins Crypto's Killer App?
Plus consumer apps come to Base, EigenLayer TVL jumps, and more
The Dynamo DeFi newsletter covers the most interesting stats, trends, and tools in crypto each week.
🔢On-Chain Metrics
Total Value Locked Inches Lower
Continued weakness in the crypto market this week caused DeFi TVL (including liquid staking) to inch lower from $58.62B to $57.99B.
In percentage terms, Solana, Avalanche, and Polygon saw the largest drop of major chains.
There were a few bright spots in the market. Up-and-coming layer 2 rollups, Base, Starknet and Linea all hit all-time highs in TVL this week.
EigenLayer stood out as the large protocol with the most significant growth, increasing its TVL a whopping 200% after it allowed new deposits. EigenLayer allows depositors to re-stake their ETH, securing multiple protocols simultaneously.
Spark, PearlFi, and stUSDT, also posted strong growth numbers. Notably, all 3 of these protocols build upon RWAs.
Cross-Chain Flows to Layer 2s Pick Up
Ethereum and Gnosis had the most significant net 7 day inflows this week, while major Layer 2s, Arbitrum, Optimism, and zkSync Era had net outflows.
Top Earning Protocols
The top earning protocols this week included many familiar faces. friend.tech climbed higher in the rankings to reach number 4. Notably, this growth in friend.tech activity was driven in large part by non-native crypto users.
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📈Trends and Narratives
Are Stablecoins Crypto’s Killer App?
As the speculative bubble of 2021 fades into memory, there’s one question on the mind of the crypto market: what has crypto created that is actually useful?
One obvious example is the stablecoin. This thread lays out how stablecoin adoption has been trekking upwards:
There have also been promising developments in stablecoin payments recently. An integration of Shopify with Solana Pay promises to deliver payments with lower transaction fees than traditional payment processors.
Base Sparks Consumer-Friendly Crypto Apps
Though it might seem counterintuitive for a corporate chain to spark a renaissance of consumer-focused apps, that seems to be exactly what’s happening on Coinbase’s Base chain.
The clearest example is friend.tech, which has quickly grown to over 120K unique users.
Another example is the Not Not Citi Bike Race in which NFTs can be minted to represent real life bikes as part of an interactive game.
The creation Base by a centralized exchange makes more sense if you look at Coinbase’s long-term roadmap from 2016. There, they laid out a plan to eventually build a “mass market interface for digital currency apps” that would be able to service 100M people. A custom chain, with easy onboarding from a major exchange, would fit the profile of that mass market interface.
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🛠️Tool Spotlight
Track Bitcoin Seasonality with CoinGlass
As the importance of timing macro and market cycles has become increasingly clear, I’ve been paying more attention to historical Bitcoin patterns. CoinGlass has an interesting chart that shows Bitcoin’s seasonal performance over the years.
CoinGlass also has other useful stats like open interest and liquidations.
📅Key Events This Week
That’s all for this week. For more frequent content, follow me on Twitter and YouTube.
Until next time,
Patrick Scott
Dynamo DeFi