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This Week In DeFi – November 24

Author

Alex Miguel
November 24, 2023

Happy Friday, DeFi readers!

This week…

  • PYTH debuts at $500M valuation

  • Hacks hit 3 protocols for $140M+

  • PancakeSwap introduces veCAKE mechanism

  • Blast L2 attracts $360M in deposits

PYTH debuts at $500M valuation

Solana-based oracle network Pyth debuted at a market cap of almost $500 million this week, now sitting at a fully diluted valuation of just under $5 billion as PYTH sits near $0.50.

The initial circulating supply of PYTH is 1.5 billion tokens, with the remaining 85% being locked up for 6-48 months. 225 million tokens were allocated for the airdrop, with recipients having 90 days to claim their tokens.

Pyth Network currently stands as the fourth-largest oracle platform, securing $1.5 billion in value across 120 different protocols.

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Hacks hit 3 protocols for $140M+

HTX’s Heco cross-chain bridge has been drained for $85 million, in a suspected private key leak confirmed by Justin Sun.

Cyber, a blockchain security company, flagged suspicious transfers related to the hack, which began with a significant transfer of 10,145 ETH to a suspicious address.

Heco’s attack wasn’t the only 8-figure exploit this week, however, as Kyber also suffered a $47 million loss in a sophisticated “infinite money glitch” attack.

The Kyber attacker managed to trick the protocol smart contract into believing it had more liquidity than it really did, using a flash loan.

Finally, derivatives exchange dYdX had its insurance fund raided via price manipulation of YFI, which saw a $9 million loss.

PancakeSwap introduces veCAKE mechanism

PancakeSwap has launched a new feature following a successful proposal, which will allow token holders to vote on which pools will receive the most rewards.

Voters will need to lock their CAKE tokens into a smart contract for a set period, using a new veCAKE metric that has replaced vCAKE. The longer the token lock, the more voting power will be awarded.

The protocol has also gotten rid of its “syrup pool” reward system, now diverting the additional share of exchange fees to veCAKE holders.

Blast L2 attracts $360M in deposits

Blast, a new Ethereum Layer-2 platform, has attracted more than $360 million in deposits despite withdrawals being closed until March.

The network’s development has been led by one of the co-founders of Blur, the popular decentralized NFT marketplace.

Blast has been credited as the first L2 to incorcorporate “native staking”, however has also been criticized for its apparent centralization and pyramid-like invite strategy.

Is Solana making a comeback?

Solana is looking alive as it welcomes back a flurry of user activity this month – with some metrics saying that the last week has been its best ever. Weekly DEX trading volume has reached an-all time high of $2.1 billion, a 33% increase over the same week last year.

The competing Layer-1 chain had an extremely rough period following the collapse of FTX and Alameda, which not only supported a lot of the Solana ecosystem, but also held mind-blowing proportions of SOL and Solana-based tokens.

It seemed all but dead in the water, before the recent SOL price rally completly flipped market sentiment to the positive.

Solana received a bullish endorsement by renowned investor Cathie Wood earlier this month, who highlighted its efficiency and speed. Soon after, hype began to spread about Solana-based oracle service Pyth Network, which has continued until today.

Throw in a couple of Binance perpetual futures listings for PYTH and the Solana meme token BONK, and it seems that the “dead” chain might not be so dead after all.

The network does still have its own battles to fight if it is to be a major contender, including criticism around its centralization and frequent downtime since its inception, as well as being labelled a security by the US SEC.

On the other hand, the chain presents a lot of opportunity as one of the most likely Ethereum competitors, as users will continue to face increasing gas fees on the leading smart-contract blockchain.

With Layer-2s also indirectly competing with Solana, will it be able to establish itself in an increasingly-competitive ecosystem?

Let’s see.

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Stat Box

Total Value Locked: $47.24B (up 3.0% since last week)

DeFi Market Cap: $65.12B (up 4.2%)

DEX Weekly Volume: $17.0B (down 22%)

DAI Supply: 5.31B (up 0.6%)

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