The DeFi Drop
04 May 2021, by Bittrex Team
Each week, we’ll round up the hottest news across the DeFi ecosystem to help you keep up to speed as things continue to move fast. This is the DeFi Drop, the best way to stay updated on DeFi.
Polygon, the project formerly known as MATIC (their token is still $MATIC), has been making noise again. The project offers a suite of Ethereum scaling solutions, imperative for the DeFi app layer to continue growing and thriving. As of late, Ethereum has earned criticism for high fees during congested times on the network. Polygon’s solutions can bring apps like Aave onto Layer 2, where transactions can happen almost instantly, and for virtually no gas fees. Polygon’s newly announced fund will fund projects in their native MATIC tokens, aiding them to scale onto Layer 2 fast.
Two reputable teams in DeFi have joined forces to create a new DEX called CowSwap which aims to set new standards for UX, pricing, and transparency in DeFi’s extremely competitive AMM (automated market maker) space. The Balancer-Gnosis Protocol (BGP) is shaping itself to be a compelling competitor to Uniswap, at a time where Uniswap itself is about to ship it’s long awaited V3 upgrade. A gasless DEX is just what the space needs for a resurgence of DeFi Summer, a hot period of activity and yields in the Ethereum DeFi space last summer.
One of the hottest new projects in DeFi dropped some alpha in an interview this past week. Alchemix, the disruptive protocol that allows users to unlock future yields on their deposits in the form of loans that pay themselves back (yes, you read that right), announced on the Bankless podcast that ETH and BTC collateral was coming to Alchemix CDPs (collateralized debt positions, where users can put up collateral and take loans in the form of stablecoins from that position). This gives HODLers even more utility with their ETH and BTC (wrapped as WBTC), especially ahead of Ethereum’s Proof of Stake being shipped.
Two fixtures of DeFi: Aave and stablecoins. Aave is a protocol built on Ethereum that allows users to be their own bank and borrow and lend assets on a decentralized platform. Additionally, stablecoins (one of the most common assets deposited and borrowed from Aave) play a significant role in DeFi yields and settlement. What a liquidity mining program does is reward users for borrowing stablecoins, an effort Aave hopes will discourage risky borrowing and boost stablecoin liquidity across their ecosystem.
Synthetix is a synthetic derivatives platform on Ethereum, known as an “OG project” of sorts with its inception in 2018. Their native token SNX is used as collateral against their synthetic products. This week, they just released live functionality for trading synthetic stocks. Per their announcement, users can now trade synthetic stocks versions of these equities: Synthetic Facebook stock (sFB), Synthetic Apple stock (sAAPL), Synthetic Amazon stock (sAMZN), Synthetic Netflix stock (sNFLX), and Synthetic Google stock (sGOOG) –– colloquially known as FAANG stocks. Synthetic Tesla (sTSLA) is also available.