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This Week In DeFi – December 29

This Week In DeFi – December 29

Alex Miguel
December 29, 2023

Happy Friday, DeFi readers!

This week…

Solana flips Ethereum for DEX volumes and NFT sales
$BONK and other meme tokens lose steam
Blast L2 reaches $1.1B TVL
zkSync passes Ethereum in transaction volume

Solana flips Ethereum for DEX volumes and NFT sales

Solana has surpassed Ethereum in weekly DEX trading volume this week, registering $10 billion compared to Ethereum's $8.8 billion.

Solana also took the lead in non-fungible token (NFT) sales, processing $109 million, outpacing Ethereum by $30 million.

As if that wasn’t enough, the network also set new all-time highs for monthly new and active addresses, as well as a yearly high for non-vote transactions.

🚨NEW: Solana Ecosystem continues to grow and dominate in key Metrics
- Solana dominates Ethereum in daily & weekly DEX Trading Volume
- Solana dominates Ethereum in daily and weekly NFT trading volume
- Solana dominates Ethereum in Daily and weekly active addresses
— SolanaFloor | Powered by Step Finance (@SolanaFloor)
9:36 AM • Dec 27, 2023

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BONK and other meme tokens lose steam

Solana meme tokens have experienced a downturn, as early investors take profits. BONK, Dogwifhat and Analos have all taken significant hits over the last several days.

The pullbacks, likely driven by investors cashing in on significant returns, contrasted with Solana's DEX trading volumes – which have remained high.

Despite the profit-taking, Solana's ecosystem has been booming, with rapid token price increases, strong trading volumes, and a surge in TVL on dApps.

📉 #Solana's native token $SOL dipped nearly 10% to just under $100, wiping out recent gains.
Despite this, SOL remains up 75% since late Nov & a whopping 776% YTD. Meme coin $BONK also fell 58% from its peak this month, yet it's up 11,411% over the past year.
— Satoshi Club (@esatoshiclub)
4:15 PM • Dec 28, 2023

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Blast L2 reaches $1.1B TVL

Layer-2 blockchain Blast – developed by the creators of the NFT platform Blur – has already attracted over $1.1 billion in deposits, despite not being scheduled to go live until February.

Depositors, undeterred by concerns about the one-way bridge to Blast, have contributed $1 billion in Lido Staked Ether (stETH) and $103 million in the Dai (DAI) stablecoin, earning around a 5% yield on their staked assets and accumulating "Blast Points" for a promised airdrop in May.

While some critics view the project as having characteristics of a pyramid scheme, spurred by early deposits and affiliate referrals, the surge in deposits reflects the broader optimism in the crypto industry amid rising asset prices.

Blast has reached $1.1 Billion in TVL!
85,836 community members are now earning yield (~4% for ETH and 5% for stables) + Blast Points.
Excited to share all that we've been working on behind the scenes in the new year!
— Blast (@Blast_L2)
7:09 PM • Dec 27, 2023

zkSync passes Ethereum in transaction volume

zkSync, another layer-2 scaling solution for Ethereum, has outperformed the Ethereum mainnet in monthly transaction volume, processing 34.7 million transactions in the past 30 days, to Ethereum's 34.2 million during the same period.

The surge in zkSync's transaction volume has been attributed to the adoption of inscriptions spreading to EVM networks, including most layer-2 chains.

zkSync's monthly transaction surge peaked on December 16, with inscriptions contributing significantly to its overall activity.

Congrats to @zksync 🥳 the first project to process more txs in a month than Ethereum itself
— donnoh.eth 💗 (@donnoh_eth)
9:43 AM • Dec 28, 2023

DeFi 2023 – The Highlights (and Lowlights)

For the most part, 2023 was a quiet year in terms of market activity for the DeFi sector – that is, until the flurry of activity we’ve seen over the last month.

However, the year was surprisingly productive in terms of development, innovation and action unrelated to token prices. Let’s take a look at some of the standout moments:

Shapella

Q1 of 2023 was dominated by the lead-up to the highly anticipated Ethereum “Shapella” upgrade – which would finally enable withdrawals of ETH staked in Ethereum’s new proof-of-stake beacon chain. All eyes were on the upgrade’s heavily-delayed implementation date, its success (or failure), and possible dumping of staked ETH on the open market.

Much to the community’s delight, it was a successful upgrade and price ended up holding up perfectly.

LSTs

Liquid staking tokens (LSTs) took significant market share and attention, as competing protocols created their own utility-boosting tokens representing a claim on staked Ether. This theme continued throughout the year, and has even led to recent second-order LST innovations such as Eigenlayer.

Stablecoins

Stablecoins were all over the place this year, as BUSD faded away with regulatory troubles, USDC briefly lost its peg with a US banking crisis, and several other projects launched new stablecoins, albeit with underwhelming success. This included PayPal’s PYUSD, Aave’s GHO, Curve’s crvUSD and more.

Most recently and somewhat surprisingly, we had Tether blacklisting hundreds of addresses and cooperating with US law enforcement – not something I had on my bingo card!

Telegram Bots

Telegram trading bots were another trend that had the community in a frenzy, providing users with a never-before-seen way of interfacing with DEXes and the DeFi world.

Base L2

Coinbase launched their own Layer-2 network to the public, which had the DeFi community in a chokehold with meme token trading – despite no promises of a token airdrop.

Solana Season

If you hadn’t read about it enough, we’re closing the year with a vibrant Solana season, capped off with an emphatic “flippening” of Ethereum in terms of on-chain activity for this final week.

So, what can we expect in 2024?

With so many innovations and unfinished trends popping up in 2023, it’s hard to say whether there will be a sole standout theme for 2024.

Expect plenty of healthy L1 and L2 competition (maybe even L3!). More LST innovations. More real-world asset integrations, GameFi and more! We may not have a crystal ball, but we’ll be sure to cover it all as it unfolds.

Happy holidays!