Crypto.com Weekly DeFi Update (Week 53, 28/12/2020 - 03/01/2020)
REN volume & volatility surged +165% and +143.08%; top 100 DeFi tokens market cap reached $20.9B
Market Recap
According to CoinGecko, the market capitalization of the top 100 DeFi tokens reached new highs of $20.9B on Sunday. Meanwhile, their dominance in the crypto space shrank from 2.97% on Monday to 2.48% on Sunday as Bitcoin and Ethereum enjoyed strong bull runs.
According to DeFi Pulse, the total value locked in DeFi surged to new record-highs above $16B on Sunday; around 7M ETH and 25K BTC were locked in DeFi by the end of the week.
Overall, the price index and the volatility index increased by 9.46% and 3.34% respectively, while the volume index decreased by 1.39%.
Spotlight of the Week
Cover Protocol Exploited
Some attackers exploited the Cover Protocol, creating 40 quintillion COVER tokens and sold $5 million worth of it last Monday. Grap.Finance claimed responsibility for the attack as a white hacker, saying all liquidated funds had been returned. According to the official explanation, a bug in the smart contract caused the updating of the pool state to be ineffective on the miner’s state when depositing, and this loophole caused the contract to mint more rewards to miners. The price of COVER token plunged by over 97% in response to the exploit. Cover Protocol announced a compensation plan which includes issuing new COVER coins to token holders on a one-to-one ratio with their initial wallet balance.
Yearn.Finance founder Andre Cronje launching new DeFi protocol yCredit
Yearn.Finance founder Andre Cronje has released an experimental DeFi protocol called yCredit. It allows users to deposit ERC-20 tokens and receive a 99.5% US dollar-based credit line in the form of yCREDIT ERC-20 tokens. For instance, if a user deposits $100 worth of AAVE, they will receive $99.5 yCREDIT. If they burn $100 worth of yCREDIT, then they will receive their AAVE. With yCredit, users can borrow or purchase any ERC-20 token that is supported as collateral in the system. Cronje specified that the protocol is still "experimental" and can be "economically exploited," implying that users should use it at their own risk.
Price Index
All tokens, except for KNC (-3.16%) and ZRX (-0.6%) increased in price.
Top 3 gainers: NXM (+36.91%), CRV (+30.35%), BAL (+23.28%)
NXM was supported by strong demand as its trading volume soared by 165%. By the time of writing, the TVL in Nexus Mutual had grown from $119M on Saturday to new highs of $157M.
The TVL in Balancer also recorded a new all-time high at $703M.
Volume Index
Top 3 increase: REN (+165%), CRV (+69.32%), NXM (+49.25%)
Top 3 decrease: SNX (-43.62%), ZRX (-20.60%), BAL (-19.02%)
The surge in the price of REN (+20.5%) was supported by a jump in trading volume. It is potentially caused by the ecosystem update of the protocol as well as the rising popularity of RenBTC as collateral in other protocols (ref).
The trading volume in Curve surpassed $624M on Sunday, ranking first among liquidity pool protocols (ref).
Volatility Index
Top 3 increase: REN (+143.08%), COMP (+72.98%), NXM (+71.79%)
Top 3 decrease: SNX (-38.95%), KNC (-33.43%), MKR (-29.90%)
Top DeFi News
DeFi protocol Cover exploited, attackers minted at least 40 quintillion tokens
Cover Protocol announces compensation plan following mining contract attack
Cover Protocol Attack Perpetrated by ‘White Hat,’ Funds Returned, Hacker Claims
Yearn.Finance founder Andre Cronje releases new DeFi protocol yCredit
Opyn Upgrade Aims to Add Capital Efficiency and Liquidity to DeFi Options Market
Dynamic Set Dollar faces ‘massive test’ as stablecoin falls as low as $0.27
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