DeFi Weekly #46

Kyber Non-Custodial Limit Orders, Set Protocol's New Set, Loopring SNARK DEX 10x Improvement

Latest this week

  • Congrats to the Kyber team for launching on-chain limit orders for their DEX! It’s going to take time for this to grow although it marks a small step towards bridging the gap between centralised and decentralised exchanges. Another key thing is that it raises the expectations for other DEXs to include this feature. I know that dYdX users are already begging for limit orders after Kyber announced it ;) Till date DEXs have been looked at as toys with a more mainstream crowd because censorship resistance doesn’t really mean much - until it does. Libra has made this much more of a talking point as it looks unlikely that it’s going to launch based on the hearings last week, Binance is moving their new listings to Binance DEX to encourage more liquidity and Veil is shutting down because they weren’t fully decentralised or fully compliant. All of these factors suggest that we’re going to finally start seeing decentralisation as a value proposition whereas it was a marketing gimmick for 2017 ICOs. Once more liquidity moves to DEXs as a whole, we’re going to start seeing tokens come in a much larger wave than before since token listings won’t have exchanges as gatekeepers.

  • Massive shoutout to Set Protocol for launching their new rebalancing Set! The really cool thing about it is the fact that it would have sold right before the recent drop where over $100m+ was liquidated across the ecosystem. I can’t find exact statistics but the DeFi liquidations accounted for a large chunk of overall long liquidations across the space. Two factors contribute to this: DeFi dominance increased as a way to get cheap leverage (in comparison to Bitmex) or centralised exchanges are still behind when it comes to their margin lending platforms. Either way, special things are happening in this space and decentralised finance is evidently becoming the first major use case for crypto. I know other chains such as Cosmos and Tezos are rushing to build their DeFi ecosystem but it’s uncertain whether they’ll be able to succeed since a good chunk of liquidity and network effects exist on Ethereum (decentralised smart contract platform). One major threat I see to Ethereum’s dominance is the liquidity effect of Binance on their DEX and subsequently their smart contract platform (yes, it’s coming).

  • Loopring has also made some major improvement by using a different hashing algorithm which increases the throughout of their SNARK DEX from 500 tx/second to over 5,200 tx/second. I’ve said it before but I’ll say it again, any layer 1 chain who’s core value proposition is scalability or privacy will die from the onslaught of Etheruem layer 2 scaling solutions that will proliferate the market by the end of next year. The train for investing and building value on a layer 1 chain which competes on technical specifications has gone, major investment opportunities are moving up to the next layer of the stack. If the past decade was about layer 1, the next decade will be about layer 2. Adding to this, most layer 1 chains which are propped by crazy high VC valuations will end up being retail dumps by the time they launch - not the best way to build a community.

On Chain Statistics

Total Locked in DeFi: $465M. After last week’s liquidations ETH heads are slowly recovering from the losses.

Biggest Gainer: InstaDApp with over $40m locked up. Fat apps > fat protocols?

Interesting Stat: Compound is taking away MakerDAO’s dominance bit by bit.

Project Updates

  • KyberSwap launches non-custodial Limit Orders 🚀 Great tool for any trader that values speed, convenience, and security.

    • No deposits & withdrawals needed

    • Control your own funds

    • Seamless UI/UX

    • Low fees

  • To celebrate the launch we are running a 50,000 KNC💰trading campaign! Just make one successful order to participate, that's it! Campaign ends: 21 July 11.59pm (GMT+8).

  • Loopring v3 switching to a more SNARK-friendly hashing function, Poseidon, has led to substantial throughput increases, going from 660 trades/second to 5200 trades/second! Specifically, ~4x constraint reduction by switching to Poseidon hash function, and ~2x reduction for committing/verifying a proof on-chain by using batched verification. These numbers are for the case of no on-chain data availability. On-chain data availability numbers have increased from 200 trades/sec to 290/sec. 

  • As a catchup: here is a high level overview of how v3 uses zkSNARKs for scalability. 

  • We released a bug bounty program for Loopring v3 smart contracts, with 1M LRC available for those finding critical vulnerabilities. Please help us find them! 

  • Given our sizeable share of Reputation in the dxDAO (10.54%), we discuss that we want to distribute/donate/auction 0.5% of it in a manner decided by the dxDAO itself. This is an important first step for us in this governance experiment. 

  • Keyrock and AirSwap joined forces with the vision of democratizing liquidity and token accessibility. With this initiative, any individual or team can add their token to AirSwap and receive free liquidity services from Keyrock. Learn more about the initiative on Keyrock’s website.

  • On July 18, AirSwap product lead Gal Eldar shared his expertise regarding decentralized trading solutions alongside MakerDAO, IdeanomicsHQ, and Blockdriven at General Assembly NYC. 

  • Looking to trade Ethereum tokens instantly with no trading fees? Try AirSwap Instant today!