Ethena increases rewards by 50% to enhance USDe with Bitcoin; ENA surges 19%. EigenLayer is launched on Ethereum mainnet. Lido's market share drops below 30%, raising concerns about centralization.
April 10, 2024
Weekly DeFi Index
The market capitalization index was positive for the week at +0.99%, while the volume and volatility indices were -16.90% and -13.82%, respectively.
This week's focus
Ethena Labs, the creator of the stablecoin USDe, announced a "second quarter" reward increase. As of April 8, users can lock Ethena's native token ENA for at least seven days. Users who lock 50% or more of ENA relative to their USDe balance will receive a 50% reward increase. Users must hold at least $5,000 worth of ENA positions to receive the reward increase. In addition, the initial cap on ENA lockup is $200 million, which will be adjusted later to increase further.
In addition, Ethena Labs has also included Bitcoin as a backing asset in its synthetic dollar-pegged product. This move aims to expand the supply of USDe from the current $2 billion, and within less than a week of its launch, USDe's Bitcoin collateral has exceeded $500 million.
Following the Ethena Labs announcement, ENA prices surged 19%, from $1.09 to $1.31. The Ethena protocol, which was launched in December 2023, has reached a total locked value (TVL) of $22 billion and has grown 6.5% since the announcement.
News Highlights
The re-collateralization protocol EigenLayer was launched on the Ethereum mainnet on April 9, successfully completing the protective launch phase. Its TVL has now exceeded $13 billion, making it the second largest DeFi protocol on Ethereum.
Frax Finance recently voted through governance to allocate Ethena Labs’ USDe to a new liquidity pool. This move is part of Frax’s “Singularity Roadmap” and will enable automated market operations (AMOs) to back the minting of new FRAX tokens with over-collateralized debt.
Ethereum staking protocol Lido’s market share fell from 32% in December 2023 to below 30% on April 4. The drop eased concerns about Lido’s growing influence on the Ethereum ecosystem, as the community fears that any entity controlling more than 33% of the market could influence every aspect of the blockchain.
Due to defects in the smart contract, Solana (SOL) currently has more than $24 million locked in Lido's staking agreement, making withdrawals difficult, highlighting the potential risks of the DeFi system. Lido stopped serving Solana in October 2023, resulting in at least 112,900 SOL being locked (approximately $24 million), affecting 31,588 users.
On April 4, 75.3% of non-voting transactions on Solana failed. The network, driven by a large volume of transactions (driven by Meme coins and dominated by bots), experienced a high rate of failed transactions, which led to network congestion. Solana developers plan to implement a fix for the issue of "implementation errors" causing transaction failures on April 15.
dYdX experienced a major outage on April 8th, which halted block production for approximately 9.5 hours due to an incorrect version of a bug fix included in the planned v4 upgrade. Block production was resumed after a fix for the bug was released and sufficient validator support was obtained.
