Weekly Alpha #22 - Scroll Mainnet Is Live 📜
Weekly Alpha #22 - Scroll Mainnet Is Live 📜
Latest DeFi Alphas Delivered in a Concise Newsletter.
Welcome to the latest edition of Weekly Alpha.
Every Friday, I deliver insights on the cryptocurrency market, emerging projects, macroeconomic trends, and DeFi directly to your inbox.
In this edition of The Weekly Alpha:
🗞️ Weekly DeFi News Digest
👩🌾 Latest Yield Farming Opportunities
📈 Market overview
🔍 In-depth Research: Scroll Mainnet Is Live, Now What? 📜
Your Weekly DeFi News Digest 🗞️
In this section, I highlight the week's most impactful DeFi news. This way, you can bypass the chatter on Twitter and concentrate on the essential updates.
Lens Protocol’s V2 Migration To Begin On October 30
Starknet to hand out 50 million STRK tokens to early ecosystem contributors
Bridging Protocols Advocate For Open Tech Standards And Condemn LayerZero
Unibot confirms exploit and promises compensation as token price plunges
DeFi is facing a ‘full frontal assault’ from regulators
Could tokenizing unique real-world assets make DeFi exciting again?
MakerDAO moves $250M from Coinbase to rebuild DAI collateral
WalletConnect restricts use in Russia, citing OFAC guidelines
Modular Blockchain Celestia Goes Live With Traders Receiving TIA Tokens
Observers Suspect Market Manipulation As SUSHI Rallies 20%
EigenLayer Launches Voting Contest To Onboard New LSTs
Aragon To Return $115M Of Treasury Assets To ANT Holders
Alpha Yield Opportunities 👩🌾
If you're looking for the best yield opportunities, I've curated them for you in this section.
Camelot DEX (Arbitrum) - 67.41% APR on the ETH-USDC.e pair
Extra Finance (Optimism) - 347% APY on the SONNE-USDC pair
Stargate Finance (Base) - 6.02% APY on the USDC FARM (STG Token)
ZeroLend (zkSync Era) - 0.48% APY on WETH deposits + Boost
StakeDAO (Ethereum) - 9.89% APR on the frxETH LP
DeFi market overview 📈
Since the end of October until now, I had been expecting a downturn in the market; however, we've received a slew of bullish updates, including the Celestia Airdrop and Bitcoin surpassing $35,000.
The Total Value Locked across all protocols surged to $42 billion, which is a notable achievement considering the performance of the stock market.
For next week, I am personally expecting a slight correction because I feel the market is overbought, but this is just my personal opinion.
TVL across Networks
Regarding the most popular Layer 2 solutions, Arbitrum and Optimism continue to far outperform Solana, so I'm struggling to understand the fundamental reasons behind Solana's strong performance.
Solana experienced a 31.2% surge over the past seven days. While I'm not an Ethereum maximalist, this performance is somewhat puzzling to me.
Uniswap Fee generated
Regarding Uniswap, they have recently implemented swap fees on certain specific pairs within their interface, benefiting Uniswap Labs. This move has already generated over $1 million in cumulative fee revenue.
Although this may be advantageous for Uniswap Labs, it's controversial since it does not benefit the DAO. Nevertheless, I understand that venture capitalists seek a return on investment, and there aren't many options available to generate cash flow.
The volume is likely to remain robust since Uniswap is a recognized brand and the leading decentralized exchange across all networks. However, this gives DEX aggregators an opportunity to capture some value, which is definitely a metric worth monitoring during the bear market.
DeFi Research: Scroll Mainnet 📜
In my free time, I thoroughly enjoy researching new Layer 2 solutions within the Ethereum ecosystem. This week, I spent time delving into DeFi on the Scroll Mainnet. In this section, I would like to present to you several interesting Dapps that enable you to begin farming with a minimal investment.
Today's Status ⚙️
Scroll is a zkEVM Layer 2 solution that benefits from the security of Ethereum and utilizes advanced zero-knowledge proof technology.
The mainnet went live in October 2023 and currently boasts a Total Value Locked of $14.57 million, which is quite impressive for just a few days post-launch.
What To Do On Scroll Mainnet?
Although the Layer 2 is relatively new, there are already some great Dapps deployed on Scroll. This is largely because Scroll is EVM-compatible, making it relatively straightforward for established protocols to deploy new contracts if they have already been launched on other EVM blockchains. Most of the time, it requires just a few parameter adjustments and testing of the protocol on a testnet.
In this section, I would like to introduce you to three Dapps that are currently available on the Scroll Mainnet.
KyberSwap
KyberSwap is one of the original Ethereum protocols. I first purchased the KNC token back in 2019, and since then, they have made significant progress. It is one of the leading DEXes with a TVL of $76.61 million deployed across various networks, and they have recently launched on Scroll.
Although the incentives are currently modest, there is an average APR of 11.97% in the ETH-USDT pool. If you're looking to potentially farm a Scroll Airdrop, Kyber is a promising place to start since the protocol is battle-tested. However, I cannot emphasize enough that exploits in DeFi can occur at any time, so please proceed with caution.
This protocol currently leads in Total Value Locked among those built on top of Scroll.
Skydrome
Skydrome is the first V(3,3) decentralized exchange DEX built on top of Scroll. This project is a fork of Solidly and provides Liquid Locked Positions as NFTs.
Users can swap tokens efficiently and also deposit liquidity into the protocol to earn rewards. Selected pools are offering a pre-mining Annual Percentage Rate (APR) of over 60%. The token functions similarly to how it is used on Velodrome Finance, where you can bribe and vote for pools to earn rewards.
LayerBank
LayberBank is the most popular lending and borrowing protocol on the Scroll network. It boasts a TVL of $566,832. As a relatively new initiative, it was initially launched on Linea under the name LineaBank. The project underwent rebranding to LayberBank, likely in response to expanding its services across multiple blockchain networks.
Currently, LayberBank is running a pre-mining campaign, allowing users to earn the upcoming governance token by supplying liquidity or borrowing from the protocol.
Of course, proceed with caution, especially when considering a leveraged option such as Loop APR.
Final thoughts 🧠
Although Scroll is a relatively new platform, it offers a wealth of DeFi opportunities, akin to those found on Optimism, Base, and other prominent protocols. However, as Scroll is still in Stage 0, it's imperative to approach investments with caution.
I cannot stress enough the importance of vigilance, given the recent spate of rug pulls and exploits within the space. It's challenging to predict which project may be compromised next. Therefore, the most prudent course of action is to avoid investing more than you can afford to lose.
Overall, from a technical perspective, I'm quite excited about zkEVM and the developments at Scroll. The future of Rollups seems very promising, and although I'm almost certain that the next bull market will bring significant network congestion, I'm hopeful that we'll see the emergence of more Stage 2 Layer 2s within the next year—with Scroll potentially being among them.
The fact that Scroll is EVM-compatible greatly simplifies the process for developers to deploy existing smart contracts on the platform. Despite this, I believe it's crucial for protocols to undergo audits before they are deployed on a new chain—even if the code remains unchanged—to ensure that parameters are correctly set for the safety of the users.
Wrapping up for this week. For daily DeFi updates, follow me on Twitter
None of the information in this newsletter constitutes financial advice. While I personally use most of the protocols that I discuss, it's important to understand that they involve substantial risk. Don’t invest what you can’t afford to lose