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- 🟣 Ethena joins Symbiotic
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Welcome back to 0xResearch. Here's what we’ve got for you today:
ENA and sUSDe staking comes to Symbiotic
ETH issuance
Cega stable yield
CT: ETH ETF inflow prognosticators
Key support levels around $60k for BTC are so far holding, although the bounce from Monday’s downward impulse has been modest. Nothing much has changed from my comment on Monday.
Sideways consolidation from here is generally good.
Ethena’s sUSDe comes to Symbiotic
Ethena aims to create a stable, crypto-native synthetic dollar, USDe, that spans DeFi and CeFi. In its staked variety, the sUSDe token earns a yield derived from the basis trade, which its backers advocate as a superior form of crypto-native stable collateral.
Positioning itself as a bridge between traditional and onchain financial systems, the product aims to attract substantial capital from institutional investors seeking high returns.
Today, sUSDe and Ethena’s native token ENA became the first non-ETH-based restaked assets in Symbiotic, the EigenLayer alternative for Actively Validated Services (AVS).
One of Symbiotic’s unique selling points is that it can accept any token within a shared security framework, not just ether derivatives.
Ethena vaults are managed by Mellow Finance, a protocol that is part of the Lido Alliance and backed by the Lido-aligned venture firm Cyber Fund. It was developed in parallel to Symbiotic.
A $40m initial cap was hit within 15 minutes, although there is still space available for ENA depositors.
Within the Symbiotic framework is a role of "curator" that is crucial for managing deposits. Curators such as MEV Capital ensure that the collateral is optimally allocated to various AVS operators and monitor the performance of AVS providers. They will likely play a role in the governance of the Symbiotic protocol.
One big question with the launch of Symbotic is: Will people withdraw from EigenLayer to shift capital to the new game in town?
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From modularity to restaking, to the intersection of AI and crypto, to the long-awaited consumer-facing apps to the most recent Bitcoin-related innovations.
We’ll be breaking down all of these and more with the help of a few of the thought leaders in crypto at Permissionless.
Eth supply:
Ethereum issuance is almost entirely offset by “the burn,” which curbs inflation based on onchain activity.
Even a $2b spike in ETH in November 2021 was swallowed up by $1.6b in ETH burned that month.
Post Merge, issuance has been much more stable, oscillating between net inflation and deflation. Though currently, it is on the rise.
For Ethereum and Arbitrum users looking to boost their stablecoin yields in a bull market, Cega has introduced new “Shark Bull” vaults, which provide a relatively low-risk alternative to borrow/lending protocols such as Aave.
The vaults lend out deposited USDC and use a portion of the yield to buy out-of-the money call options on BTC or ETH. That results in a guaranteed 12.69% APY, with the potential for up to about 30% over a 27-day period in favorable market conditions.
Vault deposits are locked until option expiry and the first trading day for the product is Thursday.
Risks include credit risk — the lending counterparties are major crypto market makers — and smart contract risk.
Cega is a decentralized protocol without a token or points system in place, though it will eventually have a token. US IP addresses are regrettably, but understandably, geofenced.
Fully onchain gaming has historically struggled with player and developer onboarding. The development experience is subpar, and games are often less complex and "fun" compared to traditional options. This makes it challenging to attract players, especially given the already difficult onboarding process for Web 2.5 games. However, with the launch of new fully onchain gaming tooling and frameworks, such as Argus' World Engine and Lattice's MUD, the sector might see new interest.
A significant portion of the call was dedicated to discussing the proposed ZK-PoS Phase 1, which aims to connect Polygon PoS to the AggLayer using a ZK proof of consensus, in addition to a pessimistic proof. This upgrade is intended to generalize how chains settle while protecting chain health and asset integrity. The implementation will involve deploying new contracts for the LxLy unified bridge for token mapping and migrating existing tokens from the PoS portal to the new deployment.
Plus, FTX creditors can soon vote on the distribution plan proposed by debtors, and it isn’t a fan favorite.
Leaders on both sides of the divide will need to develop new skills to fully harness new tech innovations.
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The insights, views and outlooks presented in the report are not to be taken as financial advice. Blockworks Research analysts are not registered broker/dealers or financial advisors. Blockworks Research analysts may hold assets mentioned in this report, further outlined in the Firm’s Financial Disclosures.
