Completely satisfied Wednesday fellow DeFi degens!
I used to be anticipating to spend a big portion of this version of Finance Redefined analyzing Aave’s liquidity mining program. There was some nervousness from traders that the emission of two,200 $AAVE per day (which might translate to roughly 5% of the ecosystem reserve fund of two.eight million AAVE per yr) may find yourself dragging down the token’s value as farmers earn and dump.
I might really feel very uncomfortable holding an asset if the governance token of an important protocol results in the arms of people that solely take into consideration quick time period features.
— Grogu (@eip1559) April 26, 2021
Seems, it is pointless: this system’s an unmitigated success. The AAVE token is up practically 15% because the launch of liquidity mining to $462, and the protocol’s complete worth locked determine has surged to $11.eight billion — up from simply over $7 billion since liquidity mining started.
Properly-researched liquidity mining works. Solely query now could be, if this system is discontinued, how a lot of that TVL will likely be sticky?
Different narratives to regulate:
Cash legos preserve stacking
At first of the yr there was hypothesis that in 2021 DeFi would see one thing of a novelty: one protocol buying one other, doubtless by way of a governance token buyout. The Synthetix 2021 roadmap specifically opened the door to such a chance, evaluating it to acquisitions in TradFi and trying to Yearn’s merger/acquisition/collaboration spree for inspiration.
Giant-scale mergers and acquisitions have but to play out, nevertheless. There are some smaller examples brewing — Inverse Finance is at present trying to purchase out Tonic for some $1.6 million, as an example — however as a substitute what we’re seeing is a growth in deep integrations on the protocol and frontend layers.
https://twitter.com/InverseFinance/standing/1387335256462798848
On Monday, Badger DAO and RenVM launched the Badger Bridge, a brand new interface for depositing native BTC into Badger vaults with just some clicks. The combination stands out for 2 causes. One is that it’s so clearly helpful for each events: an idiot-proof method to earn yield on BTC is engaging for hodlers, that means Ren will see an uptick in exercise on its bridge (and subsequently protocol charges), whereas Badger likewise will get a lift in TVL.
The opposite angle, nevertheless, is the willingness with which Ren subordinated its branding, letting Badger — which, I’d argue, has the stronger group — take over the touchdown web page. Had been it not for absurd token valuations, one might need been an acquisition goal for the opposite, given the apparent wants every fills — however by working collectively Ren will get every little thing they’d need from a protocol like Badger, and the identical applies to Badger and Ren.
This raises the query: why trouble with takeovers when a pleasant integration can accomplish the identical results?
One other prime instance is as we speak’s Balancer-Gnosis Protocol announcement. You’ll be able to see the small print in my piece, however successfully Balancer v2 is bringing some neat improvements to AMM liquidity provision and Gnosis’ CowSwap is a liquidity aggregator and offchain transaction batching protocol that may reportedly reduce on miner extractable worth. The mixture of the 2 will make for a considerably extra feature-rich DEX from each a LP and dealer’s perspective — presumably even positioning the Balancer-Gnosis-Protocol as a Uniswap v3 competitor.
In an announcement to Cointelegraph, Balancer CEO Fernando Martinelli famous that such a deep collaboration can be unimaginable within the conventional finance world:
“Every of the 2 protocols can be unimaginable to implement within the conventional finance world just because there isn’t any such factor as trustlessness there (you at all times want an middleman). Even when that have been doable, combining these two protocols can be as a lot of a problem as it could be to combine Constancy Index Funds (Balancer) with Nasdaq (Gnosis) below one single platform.”
Acquisitions could also be an outdated mannequin. Interoperability and composability signifies that protocols can profit from each other with out hostile takeovers.
The branding may nonetheless must get discovered, nevertheless — Balancer-Gnosis-Protocol isn’t precisely the perfect identify.
Are you talking my language?
The goalposts preserve shifting for Ethereum maximalists as natural exercise begins to unfold to different chains.
On Solana, as an example, $COPE and $STEP have attracted important group following and funding from main gamers (together with from funds aside from famous SOL supporters Alameda Analysis!), and this morning introduced a hackathon aiming to kick off the hashtag “solanaszn.” Folks have bandied round “Solana Summer time” within the mould of final yr’s DeFi Summer time, however no matter your most well-liked sobriquet the competitors is for actual.
The success has — maybe predictably — led some observers to attempt to poke holes in SOL’s progress thesis. Whereas, like several chain, there’s loads of assault floor, one rising criticism is that…