Decentralized Finance Industry Biweekly Report ( Early November )

1. Decentralized Finance Industry Observation

1. Bitcoin reached a historic high of over 90,000 USD

This week, Bitcoin performed strongly, briefly breaking through $90,000, setting a new historical high, and once again refreshing its market capitalization ranking. Since setting new highs last week, Bitcoin's market capitalization has surpassed Meta, firmly establishing itself as the ninth largest asset in the world. Analysts believe that the recent strong rebound of Bitcoin reflects an increasing demand for crypto assets in the market, and also due to the gradually friendly attitude of U.S. policies towards cryptocurrencies, which adds momentum to the subsequent price trends.

2. The new U.S. government's attitude towards cryptocurrency is friendly.

On November 6, 2024, the new U.S. president will take office. During his campaign, he clearly supported cryptocurrency policies, allowing donations in cryptocurrencies such as Bitcoin, and publicly opposed the previous administration's anti-crypto policies. The new president's crypto assets have reached $6.25 million, including a large amount of ETH and meme coins, demonstrating a strong focus on the crypto market. He plans to strengthen support for Bitcoin and the crypto industry after taking office, to ensure that the U.S. becomes a "superpower" in crypto and Bitcoin, and announced that the U.S. will retain all national-level Bitcoin reserves.

3. SynFutures launches Perp Launchpad to create a new model for perpetual contracts

With the expansion of the Base ecosystem, SynFutures has launched a new perpetual contract platform called Perp Launchpad, which lowers the entry threshold for the perpetual contract market with its unique "one-stop launcher" model. The platform attracts a large number of on-chain users, especially participants in the Restaking and Meme coin sectors, with a low Gas environment, deep incentives, and efficient liquidity management, providing a convenient trading pair release channel for new tokens.

The Perp Launchpad aims to simplify the launch process of perpetual contracts, allowing any token to create trading pairs on the platform without permission. Taking Lido as an example, its wstETH/ETH trading pair achieved a trading volume of $260 million and a peak TVL of nearly $920,000 within 2 months of its launch, showcasing the platform's rapid growth potential.

4. The UK pension fund makes its first direct investment in Bitcoin.

Recently, a pension fund in the UK made its first direct investment in Bitcoin, becoming the first of its kind in the country, with the private keys managed by five independent institutions. The fund allocated 3% of its assets to Bitcoin and plans to launch a Bitcoin employee benefits program. This marks a further expansion of pension fund investments in crypto assets, moving beyond indirect methods such as ETFs. Globally, pension funds are gradually entering the crypto space, with several states in the US publicly stating plans to invest in Bitcoin ETFs. This trend reflects that as Bitcoin's status solidifies, more pension funds will consider incorporating crypto assets into their investment portfolios in the future.

5. The change in Ethereum advisors sparks discussions on neutrality.

On November 2, Ethereum Foundation members Dankrad Feist and Justin Drake announced their resignation from certain project advisory roles to focus on "more neutral" work. This change has raised community concerns about whether they are profiting from it. Dankrad stated that the move aims to avoid conflicts of interest, while Justin admitted that accepting the advisory role was a mistake and that he did not receive any tokens.

The Ethereum Foundation, as a public goods foundation, always emphasizes non-profit and neutrality, but its members often participate in advisory roles for different projects, sparking discussions in the community about Ethereum's neutrality. Although the founders of Ethereum often advocate for technological neutrality, balancing interests in a rapidly evolving ecosystem remains a significant challenge.

6. TON ecosystem game users plummet, tokens crash

The once immensely popular Telegram game "Hamster Fight" is facing severe challenges. The latest data shows that the game’s monthly active users have plummeted from 300 million in August to 41 million, a decrease of 86%. In addition, the game token $HMSTR has also crashed by 76% in just over a month, raising concerns in the market about its future.

The decline of the game can be attributed to multiple factors. In addition to the impact of a sluggish crypto market, the game failed to deliver on its promises to the community, coupled with delays in airdrop rewards and returns falling short of expectations, leading users to gradually lose confidence. These issues have sparked widespread skepticism among players regarding the game's integrity and weakened market trust in its tokens.

The game team plans to integrate NFTs as in-game assets in the second season, hoping to enhance user participation. However, whether this plan can save the game's decline remains to be seen. Analysts believe that in order to regain user trust, the development team must improve gameplay, increase reward mechanisms, and strengthen communication with the community; otherwise, it will be difficult to regain a foothold in the competitive market.

7. Ethereum launches Mekong testnet in preparation for Pectra upgrade

The Ethereum development team recently launched a temporary test network named Mekong to prepare for the upcoming Pectra upgrade. This testnet aims to experiment with specific code changes and evaluate their impact on the network. Although Mekong has a short runtime, it includes all proposed Ethereum Improvement Proposals (EIP), and is regarded as a complete functional testing environment for Pectra.

The focus of the Pectra upgrade is to enhance user experience and network efficiency. The main changes include:

• Improve the user experience of cryptocurrency wallets and account abstraction features.
• Increase the maximum staking limit for validators from 32 ETH to 2,048 ETH
• Update deposit and withdrawal mechanisms, etc.

These changes will be tested on the Mekong testnet, followed by deployment to other public testnets, and finally implemented on the Ethereum mainnet. Developers have stated that while there may be some minor specification changes or slight EIP adjustments, the features included in the Mekong testnet will gradually enter the public testnet and ultimately be deployed on the Ethereum mainnet.

8. Solv Protocol promotes the standardization of Bitcoin staking

As the demand for Bitcoin staking increases, Solv Protocol is leading market standardization by launching the staking abstraction layer (SAL). SAL provides a unified technical framework for staking, addressing the challenges of decentralization and liquidity management in Bitcoin staking, allowing users to easily participate in cross-chain staking and earn rewards. Solv not only enhances the liquidity of assets but also offers DeFi users more flexible yield strategies, facilitating the maturation and diversification of the Bitcoin staking market, becoming an important cornerstone in the future DeFi ecosystem.

9. Exploring New Architecture for UniFi Layer2 Solutions

Puffer Finance recently launched the UniFi Layer2 solution, centered around Based Rollup + native AVS verification system, creating a new generation of Layer2 architecture. This Rollup As A Service model based on Ethereum mainnet functionality ( Proposer + AVS ) not only enhances the security and decentralization of Layer2 but also provides broader market potential for Based Rollup and AVS services.

The transaction process of UniFi utilizes Layer1 Proposer for ordering, which is then verified by AVS to provide pre-confirmation. Unlike traditional Layer2, transactions initiated on UniFi can receive quick confirmation instantly, without long waiting times, which is more user-friendly for needs such as fast withdrawals.

To accelerate final confirmation, UniFi adopts TEE secure enclave isolation processing verification, achieving millisecond-level consensus and establishing a standardized security guarantee mechanism, enhancing the overall verification efficiency and reliability.

Through these innovations, UniFi not only addresses the centralization issue of Layer2 but also builds a decentralized interoperability platform that will provide standardized cross-chain services for more Layer2 applications in the future, promoting asset circulation and liquidity sharing.

( 10. Aerodrome becomes the main liquidity engine on the Base chain.

Aerodrome is an innovative liquidity engine that combines various decentralized exchanges such as Curve, Convex, and Uniswap v3 ) DEX ### models. As the main DEX on Base, it allows holders to vote on liquidity pool fees and emissions through the "veAERO" incentive mechanism, and utilizes the automated market maker ( clAMM ) to enhance capital efficiency. These mechanisms make Aerodrome the preferred liquidity platform on Base.

Aerodrome addresses the challenges faced by traditional DEX in liquidity provision, fee distribution, and sustainable growth. LPs receive 100% AERO emission incentives, while traders benefit from high liquidity and better execution outcomes. These designs have contributed to the rapid growth of Aerodrome, which now holds 63% of the market share on Base.

With the close cooperation between Base and Coinbase, the economic activity on the Base platform has rapidly grown, with DAU and trading volume gradually increasing, which has greatly boosted the usage rate of Aerodrome. It is expected that with the steady growth of Base and Aerodrome, the TVL will reach 4 billion USD within a year, and the monthly trading volume will reach 50 billion USD. As the core liquidity engine of the Base ecosystem, Aerodrome will continue to benefit from the vigorous development of Decentralized Finance and the blockchain market.

2. Decentralized Finance Data Panel

( 1. TVL Data

This week's TVL has not changed much compared to last week and remains stable.

( 2. Stablecoin Issuance Volume

The total market capitalization of stablecoins is currently reported at $178.22 billion, with a 7-day increase of 3.04%. Among them, USDT accounts for 69.22%, slightly down.

( 3. DEX Data

In the decentralized exchange ) DEX ### market, Uniswap continues to maintain its leading position. This week, the DEX on the Solana chain has performed impressively, with an on-chain DEX trading volume of $14.634 billion over the past 7 days, ranking first across all chains.

( 4. Token Unlock Data

Aptos)APT### will unlock approximately 11.31 million tokens at 2 PM on November 11, UTC+8, accounting for 2.18% of the existing circulating supply, valued at around 128 million USD. The unlocking event may have an impact on the market, and investors should closely monitor relevant developments.

3. Market Trend Insights

As Bitcoin hits a new high of 90,000, the market begins to anticipate that the overflowing funds can drive other sectors and lead a wave of altcoin season. Currently in the DeFi ecosystem, the once-prominent Restaking narrative has fallen from grace, and the market has shifted to the issuance narrative of Meme assets led by pumpfun.

The meme frenzy on Solana is already well-known throughout the entire market, and other chains are bound to want to emulate it. The Base chain, backed by Coinbase, has seen a continuous increase in net capital inflow within its ecosystem, with net inflows in the past month even surpassing Solana, making it worthy of attention.

Recently, the largest contract DEX on Base, SynFutures, launched the Perp Launchpad, allowing projects with a market cap of under $1 million to apply, making it very suitable for low market cap Memes. This is equivalent to adding a contract market on pumpfun, promoting the liquidity of low market cap tokens and the utilization rate of on-chain funds, and can be seen as a new variant track.

Investors can pay attention to the native tokens on SynFutures' Perp Launchpad. If SynFutures wants to seriously operate a Meme contract market, it is essential to pump a leading native Meme. However, the volatility of Memes themselves is huge, and coupled with contracts, it will sharply increase the risks. Proper hedging and protection are necessary conditions for long-term survival in the market.