Last Week in DeFi - USDC Depeg, Euler Exploit, Sunsetting Aztec Connect, and More...

1 year ago 333

USDC Depeg🚨

SVB Bank Run
USDC went depegged during the weekend as Circle has $3.3b out of its $40b reserve stuck at its partner bank Silicon Valley Bank (SVB).
SVB is the 16th largest commercial bank in the US that mainly works with tech startups. The bank suffered a bank run and collapsed on Friday morning and was taken over by federal regulators.

FED Taking Over
Later on Sunday, the FED announced that all depositors with SVB (and Signature Bank) will be made whole.
Circle CEO then tweeted that Circle’s USDC operations will open for business on Monday morning, including with new automated settlement via their new partnership with Cross River Bank.

Impacts on DeFi

Maker passed an emergent Executive Vote to make parameter changes to its vault types, PSM, D3M, and the GSM Pause Delay, mainly to mitigate potential risks and allow the protocol to react faster to market events.

Compound paused USDC minting on V2 and is about to vote to resume minting.
The Compound risk team proposed to pause borrowing for all assets on Compound V2 temporarily, as some existing USDC suppliers are still able to borrow against their collateral.

Aave has frozen USDC, USDT, DAI, FRAX, and MAI on Aave v3 Avalanche to prevent new positions from adding risk to the protocol.

Abracadabra’s $MIM went depegged as the Curve MIM-3Pool is the largest liquidity pool for trading MIM, and MIM price was pulled downward by the other major stablecoins in the pool: USDC and DAI.

Other DeFi projects that were affected:

GMX’s GLP pool is 50% backed by USDC

Gains Network is fully reliant on DAI, which is 40% backed by USDC

Frax’s stablecoin is ~78% backed by USDC

Because of USDC’s repegging and Circle’s pending bailout for its SVB deposits, the above issues are probably temporary/resolved.

Product Launches 🚀

IndexCoop gtcETH Live
IndexCoop launches gtcETH, a staked ETH index with diversified allocation on RockerPool rETH, Lido stETH, and StakeWise sETH2.

LsETH Live
Liquid Collective launches lsETH, an ETH staking service that provides KYC/AML compliance. LsETH is now supported on Coinbase Prime and Bitcoin Suisse.

Shibareum Beta Live

Shiba Inua launches Puppynet, the early beta test of the Shibarium L2.

Maverick V1 Live
Maverick v1 is now live on Ethereum. Maverick AMM automates the concentration of liquidity as price moves to increase capital efficiency.

Instadapp Avacado Live
Instadapp launches the Avacado wallet. Avacado provides network, gas, and account abstraction, enabling use cases such as batching transactions, unified cross-chain executions, and unified gas pay.

Numoen V1 Live on Celo, Arbitrum
Numoen, an oracle-less leverage trading platform, is now live on Celo and Arbitrum. Numoen allows users to create a long or short market on any token.

EAS Live
Ethereum Attestation Sevicve (EAS) is now live on the mainnet. EAS acts as a bridge between the Ethereum network and an external source of trust to verify the validity of transactions and blocks on the network.

DeFi Llama Browser Extension
DeFi Llama launches a browser extension that allows users to access more information on Etherscan, including wallet tags, coin prices, and an icon that helps identify scam sites.

Project Updates 🚩

Compound V3 on Polygon
Compound V3 is now live on Polygon, allowing users to borrow USDC using major assets including WETH, WBAC, and MATIC as collateral.

Convex Live on Plygon
Convex is now live on Polyon. Initial pools including aMATICb+WMATIC, axlUSDC+USDC, CRV+amDAI+amUSDC+amUSD+amWBTC+amWETH, etc.

Trader Joe Live on BnB Chain
Trader Joe is now live on BnB Chain, supporting markets BUSD, USDT, USDC, BNB, BTC.b, ETH, JOE, and CAKE.

Kwenta Lists Options
Kwenta integrates options liquidity on Lyra and now enables options trading/LPing on Optimism and Arbitrum.

WooFi Supports Cross-chain Swaps
WooFi integrates with Stargate and now supports cross-chain swaps across seven chains. WooFi also added new features that allow users to specify different recipient addresses on the destination chain and grab a small number of the destination chain’s native tokens as gas.

Governance Highlights 📝

Stargate to NOT Reissue STG
Stargate is voting to unwind the re-issuance of STG. If passed, the protocol will continue to use the original STG token, and the tokens purchased by Alameda should remain in the vesting contract as requested by liquidators.

MakerDAO to Extend US Treasury Investments
MakerDAO community proposes to increase the investments in US treasury bonds from 500m to 1.25b.

Hacks/Issues 👾

Euler Exploit
Lending protocol Euler is under attack and has lost around $197m in DAI, WBTC, sETH, and USDC. The attackers seem to be the same ones that exploited some BSC projects a few weeks ago.

Sunsetting Aztec Connect
The Aztec team announced the closure of Aztec Connect. Deposits will be disabled in a week, users will continue being able to withdraw with no fees for one year. The team will focus on the development of the Noir language and their new blockchain.

Hedera HTS Exploit
Attackers exploited Hedera and transferred away tokens from dApps using the Hedera Token Service (HTS). The Hedera network got turned off for a while but is now accessible.

Iron Bank Unpaused Alpha Homora
Iron Bank now allows user withdrawals on Optimism, Avalanche, and Fantom after pausing Alpha Homora accounts for a week.

Mt. Gox Repayment Delayed
Mt. Gox pushed back registration and early repayment deadlines from Mar 10 to April 6.

Upcoming ⏳

PancakeSwap V3
Pancakeswap sets to launch V3 the first week of April. Early and new LPs will be eligible to receive airdrops and an NFT.

MEV on Osmosis
Osmosis will launch ProtoRev in the upcoming V15 upgrade. ProtoRev is a revenue module that captures MEV as protocol revenue and is expected to generate $10k - $35k per $100m in DEX volume.

Solend V2
Solona-based lending protocol Solend released a litepaper for V2. The upgrade will introduce features such as Protected Collateral, TWAP Oracle, Borrow Weights, etc.

Consensys zkEVM
Consensys will launch the testnet of its own zkEVM on March 28th.

Amazon NFT Marketplace
Amazon is reported to launch its own digital marketplace on April 24. The NFTs will tie digital ownership to physical goods delivered to customers’ doors.

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