⚡Solana DeFi Breaks Records
Plus ETH Dencun upgrade, Gamma on Polygon, and more
The Dynamo DeFi newsletter covers trends, on-chain analysis and tools in crypto each week. Be sure to also check out my YouTube for more regular content.
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📈Trends and Narratives
ETH Dencun Upgrade Reduces Layer-2 Transaction Fees 50-98%
On March 13th, the Ethereum Foundation shipped an upgrade to the Ethereum network. Let’s quickly break down what happened. The upgrade is called Dencun, and it contained a few improvements - but the highlight of the upgrade is called EIP-4844.
If you’ve used any L2’s over the last few months, you’ll notice that while transaction fees were certainly cheaper than on the ETH chain, they were still expensive compared to many L1s - over $2 per transaction in many cases.
EIP-4844 changes the way transactions are done through lLayer-2’s like Arbitrum, Optimism and Base. The upgrade utilizes a concept called danksharding (in this case it’s ‘proto-danksharding’, an initial implementation of danksharding), to replace gas-intensive transaction data with BLObs, or Binary Large Objects.
Now that the upgrade is live, transaction fees on L2’s have fallen dramatically:
While transaction fees will still fluctuate, the ETH Foundation deserves some credit for this execution as much of the extended ETH ecosystem just became much cheaper to navigate.
Here’s a helpful Dune dashboard to visualize the drop in fees.
How to Capitalize
It’s hard to airdrop farm when transactions are expensive. Each transaction essentially cuts into your own future profit; however this also likely means less competition for sybilling if you have enough size to make farming worthwhile.
For smaller ecosystem users, this is a huge deal - with L2’s like Base having $0.01 transactions, they become much more appealing for retail users. Base’s low fees, combined with its support from Coinbase could make it an appealing chain for new DeFi users to onboard to.
Here’s a DeFiLlama dashboard displaying potential L2 airdrops with at least $2M in TVL, if you’re looking for some potential airdrop farming opportunities.
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🔢On-Chain Analysis
Solana DeFi Breaks Records
On-chain activity on Solana exploded this week, as memecoin traders flooded the chain. To highlight a few milestones:
Solana DEX volume was larger than Ethereum and all its L2s combined for a 24 hour period.
The top 50 trending tokens on DEX Screener were all on Solana at one point.
TVL and stablecoin supply on Solana both hit multi-year highs.
Price, volume, and TVL have a virtuous cycle where increased prices increase liquidity in the ecosystem, allowing tokens to perform better. More stories of people making money attracts more traders, increasing volume. Increased volume means higher APRs on-chain, which attracts even more liquidity. And the cycle continues.
🚜Farm of the Week
Gamma on Polygon
Gamma.xyz is a liquidity management protocol with over $100M in TVL backed by heavyweights such as Electric Capital, GSR and Blockchain Capital.
How it works
It’s a narrow vault, but it rebalances automatically as the price of ETH moves, so it’s mostly hands-off. The vault currently has almost $2M in TVL. If you don’t hold USDC.e, a bridged form of USDC, here’s a link to get USDC.e and WETH on the Vault’s page.
The APR will fluctuate a good amount, and will likely fall, but even at half of the current rate, it’s an extremely substantial yield. Here’s DefiLlama’s synopsis of the yield.
Risks
Watch the TVL - if it falls below $1.5M, consider searching for a vault with higher TVL
🛠️Tool Spotlight
Track Memecoins with Memecoin Monitor
Memecoins are all the rage right now. If you’re looking to make your research more systematic, Memecoin Monitor tracks the performance of various memecoins, organized by:
Blockchain
Category (Dog, Cat, etc)
Market Cap
You can also easily click into a memecoin to find key information like its official socials and contract address.
Prepare for the Bull Market with Double Your DeFi
The bull market is here. Are you prepared to make the most of it?
My friend The DeFi Edge and I are teaching another cohort of our Double Your DeFi course this April. This is an intensive course to transform your DeFi skills in 5 weeks.
Spots are limited and this course is on track to sell out.
📅Key Events This Week
Macro Events
📊 Federal interest rate decision - March 20th
📊 FOMC statement - March 20th
📊 FOMC Member Barr speaks - March 21st
📊 FOMC Chair Powell speaks - March 22nd
📊 FOMC Member Barr speaks - March 22nd
📊 FOMC Member Bostic speaks - March 22nd
Token Unlocks
🔓 MANTA (2.66%) - March 18th
🔓 PIXEL (7.05%) - March 19th
🔓 IMX (2.46%) - March 21st
🔓 ID (18.23%) - March 21st
Launches
Note that these launches are mostly unvetted by the Dynamo DeFi team and this isn’t an endorsement of any of them.
🚀 Hercules DEX launch - Mar 18th (Source)
🚀 Aethir node sale - March 18-19th (whitelisted individuals) March 20th (Public) (Source)
🚀 Solareum’s surge city launch- March 19th (Source)
🚀 Electrum-Dime Beta- March 20th (Source)
🚀 StratisEVM launch - March 20th (Source)
🚀 Zignaly Ninja NFT launch - March 21st (Source)
🚀 Ice blockchain testnet- March 22nd (Source)
That’s all for this week. For more frequent content, follow me on Twitter and YouTube.
Until next time,
Patrick Scott
Dynamo DeFi