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Defi Digest
June 23, 2023

Defi Digest

đź’ˇThis article is AI generated

We are constantly evolving and adopting innovation to see how they can help further defi. Using AI to generate digests is one of these efforts, as well as to generate some visual representation. Let us know what you think and join in on the discussion on Discord!

Curve Expands CRV/USD Collateral, Driving Defi Growth

Source: The Defiant

Curve is looking to expand the range of collateral assets supported by its crvUSD stablecoin. The proposal includes adding wrapped Bitcoin (wBTC) as a collateral asset, with a $200M debt ceiling and a maximum loan-to-value ratio of 89%. Voting is currently ongoing. Additionally, Curve has proposed onboarding native Ether as crvUSD collateral with a $200M debt limit.

These moves by Curve aim to capitalize on opportunities in the stablecoin sector and enhance the platform’s offerings. While crvUSD faces competition from other money market protocols, its stability mechanisms have proven effective in maintaining the stablecoin’s peg. In related news, a proposal to freeze the CRV lending market on Aave V2 has been unanimously voted down by the Aave community. Curve’s expansion plans demonstrate its commitment to innovation and meeting the evolving needs of the defi community.

Stablecoins and Defi on SEC’s Radar: Potential Impact on Crypto Industry

Source: Coindesk

According to a research report by Berenberg, stablecoins and defi are expected to be the next targets in the U.S. Securities and Exchange Commission’s crackdown on the crypto industry. The SEC’s focus may include bringing stablecoins like Tether and USD Coin, along with defi protocols, into regulatory compliance. By targeting stablecoins, the SEC could potentially weaken the defi ecosystem. If USDC is targeted, it could significantly impact Coinbase’s revenue, as the exchange generated a substantial portion of its net revenue from interest income earned on USDC reserves. The report also suggests that Bitcoin could benefit from the regulatory scrutiny, as it has been recognized as a commodity by the SEC. Consequently, companies like MicroStrategy , which focus on acquiring and holding bitcoins, may outperform in this regulatory environment.

Polygon Proposes Zero-Knowledge Upgrade for PoS Chain, MATIC Surges 6%

Source: The Defiant

Polygon has proposed a zero-knowledge overhaul for its Proof-of-Stake sidechain. This upgrade aims to transform the PoS Chain into a rollup-like zero-knowledge-powered validium, enhancing its security and performance. With a defi TVL of $930 million and processing 2.5 million daily transactions, the PoS Chain is a vital network within Polygon’s ecosystem. The proposed transition would allow existing dApps to operate seamlessly. Polygon’s MATIC token has already rallied over 6% in response to the news.

This proposal aligns with Polygon’s larger vision of reorganizing into Polygon 2.0, a unified multichain ecosystem of zero-knowledge-secured networks. The upgrade is expected to go live before Q1 2024, pending consensus. By leveraging validium, a lower-cost and high-throughput alternative to rollups, Polygon aims to reduce fees and increase scalability. The ecosystem’s validators will provide data availability and transaction sequencing services. This transition to a zkEVM-based PoS Chain demonstrates Polygon’s commitment to innovative scaling solutions and enhanced security.

Frax Finance to Launch Fraxchain: Accelerating DeFi with Hybrid Rollup and frxETH

Source: Blockworks

Frax Finance, renowned for its decentralized stablecoins, is set to launch its own layer-2 blockchain, Fraxchain, by the end of 2023. The company’s frxETH stablecoin has experienced remarkable growth, reaching $378 million in under eight months. Fraxchain will utilize a hybrid rollup approach, combining optimistic rollup architecture with zero-knowledge proofs, offering faster transactions and decentralized sequencer capabilities.

The chain will employ frxETH as its gas token, enhancing its utility. Fraxchain may also incorporate an EIP-1559-like mechanism for burning transaction fees, benefiting veFXS token holders. This innovative launch highlights Frax Finance’s commitment to driving liquidity and incentives in the defi space.

Optimism Launches $40M RetroPGF Funding Round to Reward Contributors

Source: The Defiant

Optimism, Ethereum’s second-largest Layer 2 network, has unveiled a $40 million public goods funding round called RetroPGF. This initiative aims to reward builders, creators, and educators who have contributed to the Optimism ecosystem. By distributing 30 million OP tokens, Optimism provides an alternative to traditional venture capital funding, encouraging collaboration and open repositories. RetroPGF empowers developers to focus on delivering value without immediate monetization concerns.

The previous rounds have already supported numerous projects, and the upcoming third round will introduce improvements such as a redesigned user interface and community-based grant nominations. Additionally, Optimism recently launched its Bedrock upgrade, resulting in reduced transaction fees and increased project deployments. With ongoing advancements, the OP Stack-based networks are set to merge into a symbiotic “Superchain” in the future.

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