TLDR 📃

• DeFi took a 10% hit this week as BTC couldn’t quite break the $30K mark. Leading the downhill charge were Solana, Ethereum, Optimism, BSC, and Avalanche.
• Ethereum liquid staking protocols remain strong, with Lido, Frax, and RocketPool increasing TVL.
• Avalanche has seen a significant uptick in on-chain activity after the Cortina upgrade, but no rise in token price yet.

Disclaimer: Not financial or investment advice. Any capital-related decisions you make are your responsibility and yours only.

DeFi overview 👀

It’s been a bad week for DeFi, with the market losing about $6.5 billion in total value locked.

Leading the week’s TVL drop are Solana at -5.5%, Ethereum at -5%, Optimism at -4%, Binance Smart Chain at -3.6%, and Avalanche at -3.3%.

The week's big losers include:

• Hex, an Ethereum-based staking platform, lost a whopping 20.4%, with TVL dropping from $4.2B to $3.5B. 
• Curve-based yield-farming protocol Convex Finance lost 20.5%, dropping from $3.3B to $2.9B.
• PancakeSwap, a DEX built on Binance Smart Chain, lost 14%, dropping from $3.2B to $2.8B.

Despite the market turmoil, Ethereum liquid staking protocols held significant value:

• Lido saw a gain of 1.68%, taking TVL up to $11.64B.
• RocketPool was a clear winner, breaking the $1B TVL mark with a 12% gain. This is a great reward for launching the Atlas upgrade and reducing barriers to entry for validators.
• Frax gained 8.8%.

Key developments 🔑

• TrustWallet discloses vulnerability. Binance’s widely used TrustWallet suffered from a security flaw that put funds at risk for users who created wallets 14-23 November 2022. Binance says it will reimburse losses, which were due to a vulnerability discovered by the exchange’s bug bounty program. 
• CosmosHub considers a liquid staking module. If the proposal is approved, Cosmos will implement a staking model allowing up to 25% of staked ATOM to be liquid. This new use case for ATOM will increase protocol productivity.

Hot narratives 🔥

Avalanche upgrade boosts activity

Avalanche has launched the Cortina upgrade on mainnet. The upgrade optimises the Avalanche development environment by standardising consensus mechanisms across Avalanche component chains.

The Cortina Upgrade is coming! This latest version of AvalancheGo migrates the X-Chain to run Snowman++ consensus, making the X-Chain compatible with Avalanche Warp Messaging and making it easier for exchanges to support the X-Chain.

Cortina will activate on Fuji on March 30th. pic.twitter.com/IVCvKIbCkz

— Avalanche 🔺 (@avax) March 23, 2023

All Avalanche chains now run Snowman++ consensus. The numbers reveal new interest in Avalanche:

Transactions spiked to all-time highs, up 60% from the average.

Similarly, the user count has skyrocketed. 

And as gas usage indicates, on-chain activity has reached levels not seen since early 2022. 

Avalanche is in the midst of a resurgence, but the AVAX token price doesn’t reflect increased ecosystem activity. Still, there may be an AVAX rally if BTC’s price reverses course.

SushiSwap makes users whole after exploit

🚨 Sushi RouteProcessor2 Claim Portal Is Live!

👉 You can now claim your lost tokens here: https://t.co/fG9kK0oZZe

ℹ️ Note: this claim portal only works for users with tokens that ended up in the 0x74ebb8e8d0b0cc65f06040eb0f77b5da0e33ffee rescue contract! pic.twitter.com/GD6pU7MhqI

— Sushi.com (@SushiSwap) April 25, 2023

After suffering a $3.3M exploit two weeks ago (one of a series that rocked DeFi that week), SushiSwap promised to make affected users whole again. It appears they have delivered. Users are encouraged to follow the claim process even if they aren’t sure they’ve been affected. 

Tokens from successful claims will be airdropped to users in batches, subject to verification and approval. 

Crypto investment corner 📈

• Berachain raises $42 million to build a Cosmos-based liquidity protocol.
• Liquidity-as-a-service protocol iZUMi Finance raises $22 million.
• Thetanauts Finance raises $17 million to create a new options market.

Other news 🔔

• After the exploit, SushiSwap to adopt Uniswap V3.
• The Wintermute exploiter has become one of Curve’s top liquidity providers with a $160 million position.
• Binance introduces Wrapped Beacon ETH.
• Circle launches cross-chain transfer protocol for the USDC stablecoin on Ethereum and Avalanche.

Cryptonary’s take 🧠

It’s hard to characterise a week as good if it sees a $6.5B drop in market valuation. If it’s any consolation, DeFi activity is significantly higher than at the beginning of the year. TVL is tied to the token prices of the top protocols, which in turn are tied to BTC. 

We would love to see a decoupling between BTC and DeFi. But until that day comes, a downturn in BTC performance equates to an even bigger downturn in DeFi.

Avalanche’s activity boost is likely an early indicator of future performance for AVAX. The upgrade will attract more developers because it’s now easier to create apps on the platform. Make developers’ lives easier, and you get more of them. 

Finally, we’re glad to see SushiSwap making users whole after its exploit.