Blast prepares to unlock $2bn in Ether and stablecoins

A version of this story appeared in our The Decentralised newsletter on February 27. Sign up here.

GM, Ryan here.

Here’s what caught my DeFi eye recently:

• Blast prepares to unlock $2 billion in Ether and stablecoins.
• Uniswap fee switch inspires others to follow suit.
• Ethena begins Phase Two of its airdrop campaign.

Blast prepares unlock

Blast, an Ethereum layer 2 blockchain created by the team behind NFT marketplace Blur, is launching its mainnet on February 29.

Blast’s key feature is that it offers native yield for Ether and stablecoins, derived from the Ether staking yield and MakeroDAO’s onchain T-bill protocol.

Prior to its launch, more than 3,000 protocols participated in Blast’s “Big Bang” competition, where projects building on Blast were critiqued by a panel of judges. Some 50% of the future community airdrop is allocated to its winners and future Blast mainnet protocols.

Since launching on November 20, Blast has reached over $2 billion in total value of crypto assets deposited, but users haven’t been able to withdraw.

Until the mainnet goes live, deposits have been locked in Blast while they earn points, which will convert to tokens in May 2024.

With the unlock just days away, protocols launching on Blast have the opportunity to attract users and capital from what will be the second largest layer 2 by total value locked.

Uniswap fee switch inspires others

The price of UNI, Uniswap’s governance token, increased nearly 70% in one day as Erin Koen, the governance lead at Uniswap Foundation, put forth a proposal to activate the fee switch. The Uniswap Foundation is a nonprofit organisation that supports the growth of Uniswap. In October, the foundation received 10.7 million UNI, now worth $113 million, to provide grants to ecosystem participants.

The proposal will direct a portion of trading fees generated by Uniswap to UNI token holders who stake their tokens. Since its launch in November 2018, Uniswap has generated close to $5 billion in fees.

In the last week, Uniswap had $8.9 billion in total volume, generating close to $20 million in fees.

This proposal has already inspired a number of other protocols to consider turning on their fee switches.

Tieshun Roquerre, the founder of Blur, an NFT marketplace with 77% of the total NFT volume in the last week, said in a post on X that the Blur community will be looking to learn from Uniswap’s experience.

Back in October, Arca Investments, a crypto investment firm, posted a lengthy governance proposal on activating a 1% fee switch.

Frax Finance, the project behind stablecoin FRAX, also took to X, posing the question of whether protocol revenue should be sent to stakers of Frax’s governance token FXS.

Ethena’s airdrop Phase Two

Ethena, the project behind an Ethereum “synthetic dollar” USDe, began Phase Two of its shard campaign today.

Ethena’s shard campaign is similar to points campaigns like those offered by EigenLayer, where the expectation is that shards will convert to Ethena governance tokens in the future.

USDe is backed by Ether and Ether derivatives, and can be minted with $1 in Ether, unlike other Ether-backed stablecoins, which require over-collateralization.

Phase One of the campaign, from February 19 to 26, saw the total circulating supply of USDe rise to over $453 million while offering stakers a 24% annual yield.

In the first phase, users earned a certain number of shards per day for staking USDe, buying and holding USDe, or providing USDe liquidity on decentralised exchange Curve Finance.

For Phase Two, Ethena is increasing the amount of USDe that can be locked to earn shards, adding a new Curve liquidity pool, and rewarding users for depositing USDe in yield trading market, Pendle.

Last week, Ethena ignited a debate about whether USDe should be considered a stablecoin. DL News’ Aleks Gilbert covered the details here.

Data of the week

The most popular Ordinals project, NodeMonkes, just moved into the fifth largest profile picture NFT collection by market cap, according to data from CoinGecko.

Ordinals is a protocol that allows users create NFTs and crypto tokens on the Bitcoin blockchain.

In the last month, NodeMonkes have risen from 0.15 Bitcoin to 0.40 Bitcoin, or about $20,000.

This week in DeFi governance

PROPOSAL: GMX explores launching their own low fee blockchain

VOTE: AAVE DAO doubles rewards given to stkGHO

PROPOSAL: SYN DAO proposes a $1 million one-time buyback and future monthly buybacks

Post of the week

Popular crypto YouTuber Ben Armstrong, also known as BitBoy Crypto, engaged in a striking match against James Slammeron on February 24.

Slammeron is the lead developer of the memecoin HarryPotterObamaSonic10Inu, which trades under the ticker $BITCOIN — not to be confused with the world’s biggest cryptocurrency Bitcoin.

Armstrong won the three-round fight, causing $BITCOIN to fall from $0.051 to $0.043. That’s an almost 16% drop in only 15 minutes. $BEN surged more than 60%.

As trader Andrew Kang pointed out, the performance of $BITCOIN and $BEN following the results of this fight may indicate a wider trend, where memecoins are evolving into SocialFi attention markets.

What we’re watching

The first user interface for Curve’s new lending product, LlamaLend, was deployed by the team at DeFi Saver, a DeFi management tool.

LlamaLend will help to increase the crvUSD supply, as users deposit tokens like wstETH, CRV, and tBTC to borrow crvUSD. crvUSD has evolved into a key revenue driver for the Curve DAO, generating $4.6 million in fees since launching in May 2023.

Disclaimer: The two co-founders of DL News were previously core contributors to the Curve protocol.

A version of this story appeared in our The Decentralised newsletter on February 27. Sign up here.

https://www.dlnews.com/articles/defi/blast-prepares-to-unlock-2b-in-ether-and-stablecoins/

Got a tip about DeFi? Reach out at ryan@dlnews.com.