1/

@AerodromeFi is a "MetaDEX" that combines elements of various DEX primitives such as Uniswap V2 and V3, Curve, Convex, and Votium. Since its launch on Base, it has become the largest protocol by TVL with more than $495B in value locked, doubling Uniswap's Base deployment. 2/

Aerodrome's success can be attributed to its unique architecture which aligns incentives between each category of protocol participant, including traders, LPs, and protocols looking to seed liquidity for their token. It does so through its vote-lock governance model.

1/ ArbitrumDAO governance has reached a critical juncture with three new proposals that could significantly shape the DAO's future:
- ARB staking
- New transaction ordering policy
- Increasing the base gas fee
What is Blockworks' research perspective on these proposals? A 🧵 2/ It's important to understand the gravity of these proposals. Staking would allocate 50% of surplus sequencer fees to ARB stakers. In the post, it is assumed that with 12,000 ETH accrued annually, and ARB at $1, the reward rate for staking would be around 7%.

1/ In just 3 months, USDe has skyrocketed to a $3.5B TVL, making it the fourth largest "stablecoin", trailing only USDT, USDC, and DAI.

Coined "The Internet Bond", @ethena_labs aims to create a synthetic dollar with yield derived solely from crypto-native sources. 2/ Stablecoins have long proven their product-market fit by effectively enabling DeFi as a financial system. However, 90% of the stablecoin supply is dependent on traditional banking.

Ethena is highly relevant today as it strives to create a crypto-native store of value.

Reinventing @AVAX Subnets.

With the competition of dedicated blockchain solutions heating up, the Avalanche community is proposing a structural change in how Subnets launch.

Potentially making them as cost-effective as operating a Celestia-based rollup.

What is ACP-77? 🧵 ACP-77 introduces a new type of validator, “Subnet Validators."

No longer would a prospective Subnet validator be required to stake at least 2,000 AVAX (~$70k today) to become a P-Chain validator.

1/

Crypto gaming projects and funds raised nearly $1 billion in November 2021

Yet 30 months later we have only a handful of games that have attracted real users apart from mercenary capital and sustained activity for longer than just a few months. 2/

Most of the games that have "launched" over the past two years can be categorized into three segments:
- Games that never launch
- Games that launch and never have success
- Games that launch, have early success but fail later due to a change in market dynamics

DePIN is ripe to disrupt a range of traditional infrastructure networks.

Let's unpack how investors can best gain long-term exposure to the sector and where the opportunity lies in our latest report, free to read thanks to @POKTnetwork and @AIOZNetwork.

app.blockworksresearch.com/unlocked/decen…
1/ Successfully growing the supply side through granular token emissions is crucial to kickstarting the DePIN flywheel.

With this, network effects can be established, with the flywheel being maintained by the demand side.

Have you ever wondered how workflows for processing transactions differ across L1 nodes and a shared decentralized sequencer?

@0x___Brick gives an overview of @EspressoSys' answer to the question👇🏼 1/ L1 Nodes

A set of L1 nodes has to agree on a sequence of transactions, subsequently executing the sequence.

This system has to function even if a subset of the L1 nodes are Byzantine faulty.

The future is cross-chain.

Rather than forcing a bridge security model on a dApp, what if you let it choose from a marketplace?

@purplepill3m introduces you to @LayerZero_Labs 1/ LayerZero is a cross-chain network that allows anyone to deliver data or messages across supported blockchains permissionlessly.

On July 25, 2023, the network reached a milestone of 50M LayerZero messages transmitted.

https://twitter.com/LayerZero_Labs/status/1683856838285230080

MakerDAO has faced headwinds in the form of a convoluted governance process, low value accrual to MKR, and non-differentiating DAI characteristics.

The protocol is now seeking to shake things up—enter Endgame.

@0x___Brick breaks down the roadmap👇🏼 1/ MakerDAO Governance

MakerDAO has experienced an identity crisis, with governance complexities ping-ponging between decentralized expansion and growth through a centralized, traditional corporate structure.

For an overview of MakerDAO's business model, see the thread below.

https://twitter.com/blockworksres/status/1687463480847433729

The Curve Finance founder, Michael Egorov, is swimming in some deep water.

He's facing liquidation on ~$85M worth of loans, which could cascade across the whole DeFi ecosystem.

Hold onto your horses, @0x___Brick breaks down what is happening 🧵 1/ All of this started with Curve being exploited on Jul 30.

Almost $65M worth of tokens were drained, although some of these tokens were obtained by whitehat hackers and MEV bots, meaning that at least some of the funds have been recovered.

Soon, Ethereum will scale through a network of natively composable L2s and L3s.

Using @zksync's ZK Stack, developers can easily deploy fully customizable ZK rollup execution environments.

@MattFiebach introduces you to the Cosmos SDK of ZK Rollups 🧵 1/

At the heart of the ZK Stack are Hyperchains: Layer 2 (or 3, 4, etc) rollups.

Each Hyperchain is fully customizable. Developers can choose their sequencer, data availability layer, whether to use the shared prover at L1, and more.

The codebase is 100% free and open source.

DeFi rails have the potential to increase economic freedom by lowering the barriers of entry to access capital and compound wealth.

Unfortunately, DeFi still requires knowledge on how to capitalize on market opportunities.

@sommfinance fixes this.

@EffortCapital explains 🧵 1/ In TradFi, investors can leverage wealth management advisors and multi-strat investment funds that actively manage investments on behalf of clients.

With $88T of capital forecasted to be actively managed by 2025 (60% of global AUM), this is a HUGE industry.

What is the dominant crypto interface of the future?

Is it a wallet? Is it an aggregator? Why not both!

@purplepill3m introduces @Instadapp 🧵 1/ Instadapp is a platform that aggregates various DeFi protocols such as lending markets and DEXs while providing its own value-added services.

These services range from simple staking vaults to solutions for DeFi power users to flash loan aggregators for various protocols.

Very soon devs will be able to code smart contracts on @arbitrum in Rust, C, C++, and more.

Meet Arbitrum Stylus: the dual runtime environment that will bring more developers, cheaper gas fees, and new potential use cases to Arbitrum and its L3s.

🧵 by @MattFiebach 1/

The core innovation of Stylus is allowing WebAssembly (WASM) contracts to run in addition to EVM contracts, while maintaining synchronous composability between either type.

WASM contracts allow for cheaper gas fees than its Solidity counterparts.

Throughout 2023, @fraxfinance maintained peg stability and bootstrapped a widely successful liquid staking product.

What's next for the innovative protocol?

Our resident fraximalist @0xpibblez breaks it down 🧵 1/

frxETH comprises 2.4% ($435M) of all liquid staked ETH, and has provided 30D avg staking rewards of 5%

Its next stop? Maybe flipping Rocket Pool 👀

Is Uniswap V4 the spot DEX final boss?

Will it kill all these new DEX innovations 👇?

Curve's new tri-crypto contracts, Ambient Finance, Osmosis upgrades, Duality's launch, Velodrome V2.

@purplepill3m dives into where @Uniswap V4 stands among the competition. 1/ V4 is Uniswap’s next major upgrade of the protocol.

A slew of new features were announced, including a redesigned architecture that uses a single smart contract and hooks to enable LP and swap customizability.

Unlike the perp DEX market, onchain options haven't taken off yet.

With the launch of @aevoxyz, could @ribbonfinance change this?

Hold on to your hats, @0x___Brick dives in 🧵 1/ Market Position

Ribbon is known as the onchain options market leader, but the protocol has lost volume share since Q4 2022.

This is a result of Ribbon not having offered a marketplace for options trading until recently and its structured options products losing traction.

In the midst of a bear market and with OSMO near all-time lows, you'd think Osmosis was DOA.

On the contrary!

Osmosis has grown beyond its DEX roots to become a fully-fledged DeFi Hub, is launching concentrated liquidity, AND revamped its tokenomics.

@EffortCapital explains 🧵 1/ While known for being a DEX appchain, Osmosis added permissioned CosmWasm smart contract capabilities.

This enabled developers to launch:

- lending markets
- yield farming vaults
- fiat on/off ramps
- perps 🔜
- decentralized stablecoin 🔜

.@dydx V4 is posed to shake up the perps landscape.

The application-specific blockchain is expected to launch as early as September.

Learn all the latest details you might have missed with @MattFiebach 🧵⬇️ 1/

dYdX’s move into the Cosmos resulted in serious concerns about losing Ethereum-based users due to a lack of native USDC, bridging trust assumptions/UX, and required Cosmos tooling.

Circle announced both CCTP and USDC native to the Cosmos, providing solutions for dYdX chain.

https://twitter.com/blockworksres/status/1663577685656997888

Rollups are becoming increasingly important for Ethereum to reach mass adoption.

To further accelerate rollup scalability on the L1, Proto-Danksharding is tentatively set to be implemented in Q4 2023.

An overview of Proto-Danksharding by @0x___Brick 👇🏼 1/ Rollups

Generally speaking, when a rollup fully utilizes Ethereum, it relies on the L1 for data availability ("DA"), transaction settlement, and consensus.

In this context, data availability refers to a rollup storing batches of transaction data on Ethereum.

Liquid staking is all the rage, but what does it look like on Solana?

The room for growth is huge, with only ~2% of staked SOL liquid staked.

Say hello to @MarinadeFinance. @purplepill3m dives in 🧵 1/ Marinade Finance is Solana’s leading liquid staking protocol with a 75% market share.

However, only 2.15% of SOL is liquid staked vs 42.67% for ETH.

This is likely due to a few reasons, such as ETH starting as a PoW network and original SOL investors being risk-averse.