Daily DeFi Alpha 01/13 | Yield Farming Updates, Selected Technical Analysis, And Liquid Staking Derivatives (LSD) Overview
🥷 Yoooooo crypto aficionados! It is Thursday. 🗓
It is yet another fantastic day in the crazy world of cryptocurrencies. Let’s get after it relentlessly! If you’ve managed to find any hidden gems that will make you a zillionaire, let us know on Reddit!
This is a collection of alpha from all over the web, particularly CT (Crypto Twitter), and we’re always on the lookout for those elusive alpha projects. So, if you come across any top-secret info or your own research that could make us all rich beyond our wildest dreams, don’t keep it to yourself, and let’s get a discussion goin’ on Discord!
But seriously, all the stuff we post here is just our interpretation of the general markets and different ecosystems based on what we’ve heard from fellow degens. So, don’t take anything we say as gospel truth. Always do your own due diligence (#DYOR) and never invest more than you can afford to lose.
Cheers,
The Gate Blog Team
Crypto Fundamentals: Part One
Crypto Volatility (per CVI FInance): Though on an uptrend, CVI remains neutral at 54.9, up from 54.5 yesterday and 53.2 a week ago, but still remains the lowest since December.
Crypto Market Cap (per Tradingview): Currently at $844B. Made a breakout above a trendline in January and is still rising; 1st target was $827B; 2nd target is $854B; 3rd target is $889B. It has risen 11.65% in 2023 but is still down 58% YTD.
Crypto Fear & Greed Indices: BTC lifted from extreme fear (24) to fear (30) and ETH continues to rise to 55 from 50 yesterday, which means the latter has been lifted from neutral to greed.
Long/Short Ratios on CEXs (per Coinglass): As of 01/12 07:00 UTC, BTC L/S Ratio surged to 1.96 in anticipation of US CPI due for release at 1:30 UTC. On the other hand, ETH L/S Ratio drops to 0.57, perhaps in an attempt to dodge volatility.
Significant Movers in Tiers (per Crypto Bubbles):
- 1st Tier (top 5 among top 100 coins): AVAX +22.9%, FTT +13.6%, NEAR +11%, AAVE +9.7%, HEX +8.3%
- 2nd Tier (top 5 among top 200 coins): ONE +12.4%, ERG +11.4%, RPL +10.5%, TFUEL +9.1%, BTG +7.3%
- 3rd Tier (top 5 among top 300 coins): CFG +25.2%, ALPHA +7.8%, MOB +6.7%, SYN +6.7%, TRIBE +5.3%
Yield Farming Alpha: Part Two
Top 10 DeFi Protocol Performance By Total Locked Volume (TVL):
- By TVL: LDO remains #1 at $6.92B, followed by MKR at $6.58B, and AAVE at $4.19B; By contrast, Ethereum has a TVL of $25.35B.
- By Performance: LDO remains #1 at +5.1% (24H) and +12.4% (7D), followed by AAVE at +3.6% (24H) and +11.2% (7D), and Instadapp at +2.7% (24H) and +8.9% (7D).
Top 10 Single Exposure Stablecoin Pools By 24hr APY Changes:
(Beware of protocol security and stablecoin depeg when you’re chasing yields!)
- Drops on Ethereum is offering an impressive 43% APY for its USDC pool; its lowest APY was 24.7% within a month. The current TVL is $37.5k.
- Green Planet on BSC is offering 41.5% APY for its GFRAX pool; its APY has been steadily declining from 47.6% since a month ago. The current TVL is $11.4k.
- Friktion on Solana is offering a more than decent 27.2% APY for its USDC pool. Its APY ranges between 25% to 30% within a month. The current TVL is $65.5K.
Top 8 Gate.io HODL & Earn Coins By APR
(DeFi can be risky and cumbersome if you don’t know how to navigate. Gate.io got your back!)
Selected Technical Analysis: Part Three
Loopring (LRC)
- Awaiting trendline breakout: $0.2396
- If the price action does a clean break, then enter.
- Target I: $0.3682; Target II: $0.5000; SL: $0.2142
Polkadot (DOT)
- 1st trendline breakout confirmed on Jan. 9; 2nd breakout confirmed on Jan. 11
- Target I: $5.628; Target II: $7.117; Target III: $9.525; SL: $4.604
Ether (ETH)
- 1st trendline breakout confirmed on Jan. 09
- Awaiting 2nd breakout as of Jan. 12
- Target I: $1,645; Target II: $1,774; Target III: $1,983; SL: $1,236
Liquid Staking Derivatives Deep Dive: Part Four
Topics Covered:
- The upcoming Shanghai Upgrade
- Key players driving its growth
- Potential risks to be aware of
Ready to embark on an adventure into the world of Liquidity Staking? This exciting new era of crypto yields is not only profitable but also filled with potential opportunities.
But, like all investments, it’s not without its share of drawbacks. So come along as we uncover the ins and outs of Liquidity Staking, from its history to its current state, including the potential risks and rewards.
Overview of Liquidity Staking
Liquidity Staking is a method of generating yields for investors in the cryptocurrency market.
Traditional staking methods, while still lucrative, have certain drawbacks such as lack of accessibility, immovability, and illiquidity.
DeFi protocols, which have been the primary method for staking crypto assets, often have lockup periods that restrict users from trading or withdrawing their assets.
Liquidity Staking addresses these drawbacks by allowing investors to receive liquid derivatives in exchange for staking their assets, which represents their claim on the stake pool and its yield.
For example, depositing ETH on Lido would result in receiving stETH. This method allows stakers to receive yields on their assets while still having the ability to trade, lend, and use their assets as collateral on other protocols, without the need for becoming a validator.
Shanghai Upgrade
The Ethereum Shanghai Upgrade, scheduled for the first quarter, is highly anticipated as it will allow users to unstake their ETH.
Currently, users are unable to withdraw ETH and can only utilize the derivative for trading on DeFi protocols. The Ethereum Shanghai Upgrade will bring significant changes to this aspect.
The current staking ratio for ETH is at 13.79%, with a total of over $15 million in ETH deposited.
This represents a small portion of the overall Ethereum network.
The upgrade is expected to not only enable the withdrawal of ETH but also accelerate the growth of certain liquidity service providers (LSPs).
Key Players
CT: LidoFinance (stETH): Lido Finance, a pioneer in the liquidity staking protocol and the largest in terms of market share, controls approximately 16.03% of the total value locked (TVL) in the DeFi market.
Users can deposit ETH in exchange for stETH on a 1:1 ratio and can deploy them on other platforms, increasing capital efficiency. The platform takes 10% of all staking rewards, which are split between Lido DAO and node operators.
CT: Rocket_Pool (rETH): Rocket Pool, the second major player in the Liquidity Staking market with about 7% market share, is permissionless and highly decentralized.
Similarly, you’ll receive rETH for every ETH deposit on a 1:1 ratio.
They’ve experienced significant growth and have a focus on node operator diversification as a key driver for their growth.
Amazing article that is packed full of useful info by jasperthefriendlyghost.eth
CT: stakewise_io (SWISE): Stakewise is another innovative LSP that is growing rapidly, and they are set to launch their v3 upgrade before the Ethereum Shanghai Upgrade.
This upgrade aims to increase solo stakers’ ability to participate in liquid and delegated staking and will also bring more utility to SWISE holders, such as the ability to use it for insurance.
CT: fraxfinance (frxETH): Frax Finance, which allows users to deposit ETH in exchange for $frxETH, offers one of the highest annual percentage rates (APR) at 8% among LSPs.
They are also experiencing exponential growth, particularly with the upcoming Ethereum Shanghai Upgrade.
Risks of LSPs
Investing in Liquidity Service Providers (LSPs) may come with certain risks. It’s important to be aware of these risks and conduct thorough research before making any investment decisions.
- Smart contract risk: There is a risk that a smart contract may contain errors or vulnerabilities that could lead to the loss of funds.
- De-peg risk: LSPs often use a stablecoin as the collateral for their liquidity pools. This can result in the risk of the stablecoin losing its peg to the underlying asset, which can lead to a loss of value for the investor.
- Slashing risk: Some LSPs use a proof-of-stake consensus mechanism, where validators can be penalized for misbehavior by “slashing” a portion of their stake. This can lead to a loss of funds for the investor.
It is important to conduct thorough research and not make investment decisions based on fear of missing out (FOMO) due to recent market pumps. It is essential to take calculated risks when investing in any financial product.
Hey you, thank you for tuning in to today’s edition of the Daily DeFi Alpha Newsletter. 🫶
We hope you found the information collected in this DeFi Alpha Newsletter to be insightful and informative.
As always, we strive to bring you the latest and greatest in the exciting world of decentralized finance.
But don’t just take our word for it - come back tomorrow and see for yourself what the future of finance has in store. Trust us, you won’t want to miss it!
🐝 Until then, cheers to another day of staying ahead of the curve in the DeFi game.
