Welcome to This Week’s Edition
GM, Tim here. Welcome back to The Decentralised, your go-to source for the latest in DeFi news, where we deliver all the essential updates without holding back. This week’s edition features significant developments including: dYdX’s $9 million loss due to a YFI trading exploit, Solana’s decentralized exchange (DEX) trading reaching a new weekly high, a major rebranding in the DeFi space, and a curated selection of data, governance updates, and noteworthy posts.
YFI Price Drop Explained
On November 17, the value of Yearn Finance’s YFI token plummeted by over 40% seemingly without cause. The sudden downturn prompted many traders to speculate about a potential rug pull orchestrated by Yearn Finance insiders. However, investigations revealed that the steep decline was not due to large holders selling off their assets, but rather a deliberate attack on the dYdX trading protocol’s insurance pool.
Details of the dYdX Attack
An attacker took advantage of the low margin requirements in dYdX’s YFI trading market, managing to execute a pump-and-dump scheme that drained approximately $9 million from the protocol. In response to this incident, dYdX has raised margin requirements on less liquid markets. The founder, Antonio Juliano, has stated that the incident will be reported to the FBI. This incident mirrors a previous attack on the Solana protocol Mango Markets and underscores the vulnerabilities faced by DeFi protocols, especially in markets with low liquidity for niche assets like YFI.
Solana DEX Continues to Surge
Traders on the Solana network have propelled the volume of decentralized exchange trading to new heights, exceeding last week’s record of $1.7 billion and reaching nearly $2.2 billion. The reasons behind this surge are becoming increasingly apparent, particularly the anticipated token airdrops from Jupiter, Solana’s leading exchange aggregator. As previously mentioned, Jupiter is set to introduce a governance token and distribute 10% to active users during the recent crypto downturn, with plans for three additional airdrops to follow.
Jupiter’s Incentives Drive Trading
The excitement surrounding these airdrops has led Solana users to engage in token trading to maximize their chances of receiving rewards. A recent social media post from a member of the Jupiter team highlighted that those who have previously traded more would be eligible for additional tokens, further incentivizing trading activity. This trend is expected to keep Solana’s on-chain trading volume elevated until participants identify more rewarding opportunities.
Aave Companies Rebrands to Avara
Aave Companies, the entity behind the DeFi lending platform Aave and the social protocol Lens, has undergone a rebranding and is now known as Avara. The new name, which translates to “seeing more than you see” in Finnish—CEO Stani Kulechov’s native language—reflects the company’s expansion beyond Aave into new projects like Lens and the GHO stablecoin. This rebranding signifies a maturation of the company’s image, aligning it closer to other prominent startups in Silicon Valley.
Challenges Ahead for Avara
Despite the fresh branding, Avara faces challenges, particularly with its GHO stablecoin, which is still trading below its intended peg to the dollar. Kulechov has indicated that the emphasis will now shift from gaining market share to stabilizing GHO’s price. To aid this, Brice Berdah, an experienced figure in DeFi, has been temporarily appointed to lead a committee focused on increasing GHO’s value to $0.985 by the end of November, as it currently trades around $0.957.
Weekly Data Snapshot
Since its launch in August, Avara’s GHO stablecoin has demonstrated consistent growth, achieving a market capitalization of $32 million, although it remains below its target dollar peg.
Governance Updates in DeFi
This week in DeFi governance: VOTE: Aave proposes to convert Ether in its DAO treasury to Rocket Pool staked Ether; PROPOSAL: Wintermute seeks to activate trading on dYdX Chain; VOTE: Arbitrum DAO deliberates on backfunding successful STIP proposals.
Highlighted Post of the Week
NFT artist Degen Alfie has released a comparison between his artwork, The Leveraged, which captures the essence of the 2021 bull market, and his latest piece, The Survival Game.
Ongoing Discussions
Debate continues regarding the Arbitrum DAO’s recent approval of a poll to implement ARB token staking. Social media conversations reflect mixed opinions about this decision, showcasing the ongoing engagement within the community. Have you joined our Telegram channel yet? Stay updated with our News Feed for breaking stories, community polls, and entertaining memes.
