Welcome to your #1 source for crypto news, DeFi, and everything in between. If you want to know what's happening in the world onchain, well, you've come to the right place.
What's in this edition:
- Aave is the new king of DeFi
- Reserve takes Curve's crown
- Sony enters the arena, launches Soneium L2
Don't forget to check out the best longform "Good Reads" at the end of the newsletter
Aave is the new king of DeFi
A new era is upon us. Staking is dead. Aave is rising.
Since July, the two behemoths of DeFi, Lido and Aave's tokens have diverged significantly. Lido is getting crushed, down 62% on the year, while Aave is up 7%. If you took this long/short trade, you would be up nearly 200%.
Lido was able to keep its position throughout the year, even as the restaking wars were hotly contested and several new entrants appeared. However, since the Summer market sell off, LDO has been in freefall.
Even with the introduction of Lido's own restaking protocol Symbiosis, its not been enough to stop outflows from Ethereum's #1 liquid staking derivative.
Aave, on the other hand, is super hot right now.
TVL in ETH-denominated terms is rapidly growing, Since the beginning of this year it's nearly doubled. In dollar terms its up 150%.
And this has led to their fee revenue increasing to levels not seen since 2021 when we were in a bull market.
Comparing Aave to its top 10 competitors, excluding Tron, they have a majority share of all lending TVL at 53% and growing.
And yet.... AAVE is sitting well below its ATH of $650. Price's are close to breaking out of a 2 year channel, driven by the upcoming fee switch activation, Aave v4 and expansion to new L2s. Aave is also planning on integration RWA projects like Blackrock's BUIDL token into its ecosystem.
Aave is the only "S-Tier" project that has solid fundamentals, a 10x dev team, and surging future growth narratives.
Keep an eye on AAVE into the end of this year...
Reserve takes Curve's crown
ABC Labs, an investment arm connected to stablecoin issuer Reserve, announced its acquisition of 6.5M $sdCRV, giving Reserve Protocol the most voting power of any non-founder entity in the Curve DAO.
Our friend Curve Cap detailed in his blog today about their increasing growth:
Reserve in particular has seen good success bootstrapping liquidity on Curve. As stablecoin yield farmers, we’ve enjoyed farming a variety of Reserve’s pools. Stablecoin yield farming is always fraught, given the risk of depegs. The alphabet soup of stablecoins can confuse investors.
For at least our sake, we personally feel a lot of confidence when we find a good yielding pool containing Reserve’s various stablecoins, as we have a decent understanding of the robust underlying mechanism of Reserve’s rTokens. Not financial advice of course!
Russia + Crypto
link https://watcher.guru/news/brics-russia-to-officially-use-cryptocurrency-for-trade-settlements
Binance seizes Palestinian assets
link https://x.com/ray_noOnes/status/1828006618539212919
Sony enters the arena, launches L2
On August 23rd, 2o24, Sony and Startale announced that they would be expanding their reach into the world of crypto with Soneium, their latest Ethereum L2.
The aim with Soneium, as mentioned in their docs, is to:
Realize the Open Internet that Transcends Boundaries. On Soneium, everyone is a creator, no matter where you are or what you do. We dream of an open internet that transcends cultural differences and brings together people with diverse values. Here, innovation overcomes social, economic, and regional constraints, allowing every idea to flourish. With our community, we aim to go mainstream with this public blockchain, empowering individuals and communities to collaborate, create, and fill the world with emotion together.
After a first look at it all, Soneium may be the next institutionally backed Zora. However, with early launch partners such as Astar Network, Alchemy, Chainlink, Circle, Optimism, and The Graph, it seems like Soneium is starting off with some strong footing.
Soneium Minato - Testnet Now Live
Yesterday, Sony Block Solutions Labs announced that their Minato Testnet is live. The testnet is EVM-compatible and uses Optimism's OP stack.
Right now, there isn't much you can do on their test net other than bridge from Sepolia to Minato.
This release is directed toward devs and creators who aim to build different applications and communities within their network. During this phase, the core team at Soneium will gather feedback from developers and users to further improve their L2 and ecosystem.
Soneium Spark
In addition to yesterday's live testnet announcement, Sony teased their own native incubator, "Soneium Spark":
Soneium Spark, a builder-focused program, will transform groundbreaking ideas into market-ready solutions. We're not just encouraging innovation; we're fueling the future!
Applications for the incubator program will open in a few weeks, and the first cohort will start in mid-October. In addition to the marketing, business, technical, and financial support Soneium is offering, anyone interested in building on Soneium can potentially receive up to $100k USD in investments per team.
Here are some of the categories they are looking for to build within their ecosystem: DEX (AMM), DEX Aggregator, Lending, Yield and Points Farming, Perpetuals and Synthetics, Options, Derivatives, CDP Stablecoins, NFTs, Gaming, Entertainment, Social, and many more.
It will be interesting to see where Soneium is in the next year/cycle and whether they will truly be the L2 of mass adoption.
Good Reads
- AzFlin thread on the hierarchy of yields
- Brian Quintenz opines on Opensea receiving a Wells notice
- Cecilia Avlso thread on "Why was Aave Redesign so Successful and Well-Received by their Audience?"
- DoveyWan shares her thoughts on Solana
- Jonathan Blanco writes an article "NFTs Are Not Securities But They Can Be if You Treat Them As One"
- Vitalik threads on what he thinks should be the goal of airdrops
- YieldNestRisk analysis on Current State of Symbiotic
