Updates
CEXes are Coming Onchain
For crypto natives, centralized exchanges are supposed to be just fiat on & off-ramps. But every exchange is changing its strategy.
Byreal from ByBit
What's Byreal? It's a DEX built by ByBit, a leading crypto exchange based in Dubai.
But it isn't another Uniswap fork. It's described as "onchain extension of a global exchange". ByBit will use its massive CEX liquidity to fulfil orders on the DEX.
This is huge. CEX liquidity can make it the best place to trade onchain.
At the technical level, they're using a hybrid model with the following
- Request For Quote mechanism like CowSwap to bring in CEX Liquidity.
- Concentrated Liquidity Market Maker like Uniswap v3 for onchain tokens.
Additionally, it'll also have a Launchpad and Revive Vault to earn yield on assets like SOL.
So their ambition isn't limited to creating the next big DEX. It's to build an integrated ecosystem of DeFi apps.
Mantle, an ETH L2, is a close partner of ByBit. But they are not launching Byreal on it. Their decision to launch on Solana is a noteworthy decision and makes me wonder about the thought process.
Byreal testnet will be on June 30th. Full launch is expected in Q3.
Coinbase Announcements
Coinbase is bringing DEX trading to its centralized app.
App users will be able to trade tokens on Base DEXes directly from Base. This is huge for everyone.
- Crypto projects can access Coinbase customers by just creating liquidity on Base.
- Normies can trade onchain from the familiar UX of the Coinbase app. No complex onchain UX.
- More total value locked, trading volume, and fees for Base chain & Coinbase.
Memecoins were the biggest narrative of this cycle. CEXes were unable to list most of them before they died out due to obvious reasons. With enabling DEX access, memecoins can be on Coinbase without going through a complex & biased listing process.
There could be some legal issues, but in the Trump administration, I'm sure the Coinbase legal team has it handled. TLDR; Bullish Base DEXes like Aerodrome.
In their State of Crypto Summit, they had many other announcements as well.
USDC checkouts on Shopify are the most impactful among those.
Traditional online payments aren't like usual peer-to-peer payments in crypto. It has complex requirements like refunds. They're important to protect customers and merchants.
Coinbase spent 9 months working with Shopify to build an open-source protocol called Commerce Payments Protocol. It meets the requirements of online commerce. You can learn more about it here.
This is a BIG DEAL. Since we've already figured out the protocol, we can now extend it to all online stores. Base is already reaching out to big players like Amazon and Spotify. Imagine ordering from Amazon using USDC? That's mass adoption.
The Larger Trend
All the above announcements are part of a larger trend. Offchain finance is moving onchain.
Here's a chart comparing the volume on DEX vs CEX. The trend is clear.
And CEXes have recognized that trend & are adapting their strategies. It's not just ByBit & Coinbase that have onchain strategies
- Binance has BNB Chain & its Alpha program.
- Kraken has its own L2 called Ink. It's also tokenizing stocks on Solana.
- Even TradFi players like Robinhood & Deutsche Bank are launching it's own Ethereum L2.
The world is moving onchain. And getting ahead of the trends has value.
Sponsored by Mantle
Mantle: Over $1.5M in $MNT Rewards Still Available
Charlie Munger used to say, "Show me incentives and I'll show you the money."
In DeFi, mercenary capital chases short-term rewards, leaving when incentives dry up.
Mantle designed their MNT Reward Booster to fix this. A long-term rewards engine backed by one of the deepest treasuries in crypto.
You can check the distributed rewards in the image above. You're not late to the party yet. There's still over $ 1.5M $MNT in rewards.
Here's how to get in:
- Lock your MNT to join all events and earn rewards.
- Select your lock-in period (the longer the better for your MNT power)
- Allocate your MNT power to various rewards pools, and automatically join all lottery pools to maximize your earnings
- Reap the earnings
Mantle has one of the deepest treasuries across DeFi, don't fade their capacity to run incredible incentive programs.
With less than a month left in the booster phase, now's the time to get in.
Analysis
$SPK: The First SubDAO in DeFi
Spark is launching its token today. And its special features have gotten some people's attention.
What's Spark? It has two user products: a lending protocol called SparkLend and a Savings product to earn yield on your stablecoins. On the backend, it also has a Spark Liquidity Layer to allocate capital.
But it's not your usual lending protocol. It's a Star/SubDAO of the Sky ecosystem (formerly MakerDAO). Here's how it works.
- Spark borrows USDS from Sky.
- Then it deploys that capital across DeFi, CeFi, and RWAs to earn yield. SparkLend is a venue to earn yield as well.
- On the user front, it enables USDS borrowing against crypto collaterals. It also provides yield using the savings product.
So this relationship is more like the relationships between central banks and commercial banks. Sky, aka the central bank, will determine the bigger monetary policy using its lending rates & debt ceilings. Commercial banks like Spark will grow the money supply by underwriting capital allocation.
That's cool. But now, everyone's looking into Spark.
What happened? $SPK is launching today. And it's noteworthy.
At the genesis, the total supply of SPK is 10B. It's allocated in the following manner.
- 12% to contributors to reward and align their work with the protocol.
- 65% of $SPK will be distributed to those who farm it using $SKY & USDS over the next 10 years. This adds utility for the parent token.
- 23% will be used for Spark Ecosystem growth. A portion of it is used for "Ignition Airdrop".
The eligibility criteria of the airdrop are very vast, from holding USDS to yield-tokens from Pendle. If you'd been active in DeFi, claim your airdrop here.
There'll be one more phase of the SPK airdrop. The qualification criteria is complex, like staking their entire allocation from the fist airdrop. You can read more about it here.
For many reasons, including the token launch, Spark has been crushing it lately.
- Spark TVL rose from ~$2.2B on April 1st to the current ~$6.6B. That's a 200% increase.
- The value of assets allocated by Spark Liquidity Layer also increased from $1.27B to ~$4B during the same period.
- It has made >13M in revenue in the last month alone. Projected annual revenue for the next 12 months is ~$180M. You can monitor the data here.
So, this is a protocol that generates a ton of value. And that value will be captured by the $SPY token.
But it's also really bullish for its parent token $SKY.
- SubDAOs are incentivized to increase USDS supply, which will increase Sky revenue.
- $SKY & USDS will be used for genesis farming of the SubDAO tokens like SPK. This creates utility and value for the parent $SKY token.
- According to the Sky founder's reply in the Sky community call, we might see around 6 such SubDAOs under Sky. That's huge for $SKY.
There are additional bullish catalysts for $SKY. Like profit sharing with $SKY stakers, token migration from $MKR to $SKY possibly burning as much as ~11% of its token supply by people losing keys, and more.
If DeFi summer is coming back, both Spark and Sky should be on your radar.
🚀 DeFi Catalysts
Gryoscope released Dynamic E-CLPs on Superchain. It has benefits like real yield from volatile pairs and enhanced liquidity management.
Bungee Exchange has added support for Solana. It now allows users to buy any Solana token from 30+ chains.
Ondo Finance has expanded OUSD, its flagship short-term US Treasuries fund, to XRPL. It'll enable seamless conversion between it & Ripple's RLUSD.
Tether Gold has expanded XAUt0 to the HyperLiquid ecosystem. XAUt0 is a token that represents gold, the oldest store of value.
Liquity's BOLD and sBOLD can now be used as collateral on Euler Finance. Looping with auto-compounding sBOLD yield can increase exposure to over 20 fork airdrops.
🚀 New Launches
RuneShot went live. It introduces itself as a cross-chain trading platform for Bitcoin assets.
Trendsdotfun is a new app that enables trading of X/Twitter posts. Jupiter Exchange has already integrated it.
Skate Chain has launched $SKATE. They've already introduced value accrual mechanisms like real-yield for stakers and token buyback.
📰 Industry News
Vietnam has passed a law officially recognizing crypto assets. It's the first Southeast Asian nation with a comprehensive legal framework.
JPMorgan is the largest bank in the world. Rumors suggest they've filed a trademark for what appears to be a stablecoin called 'JPMD'.
🐦⬛ X Hits
- Onchain CLOB wars.
- Tips on hunting the next big thing.
- A $7B valuation framework for Pumpfun.
- Value of social markets vs attention markets.
- Research on how MEV has become the limit to scaling blockchains.
😂 Meme
Until next time,
Edgy
p.s. The DeFi Edge Pro membership is open until Friday. If you want deeper research, early trend spotting, and a no-hype community, this is for you.
Today's email was written by Edgy and Yayya.
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