DeFi Weekly Update: Established Projects Revitalize, New Public Chains Launch

Ethereum Engine Reconstruction Plan Sparks Discussion

The co-founder of Ethereum recently proposed a bold idea: to replace the existing EVM with the RISC-V architecture as the long-term execution layer. This proposal aims to improve Ethereum's computational efficiency, address the potentially massive computational demands it may face in the future, and break through the performance bottlenecks under the current EVM framework.

It is worth noting that this transformation only involves the underlying execution engine and will not change Ethereum's account model and contract calling method. For ordinary users and developers, the interaction method with smart contracts will remain unchanged.

In the long run, this proposal aims to address the verification difficulties and hardware requirements that the Ethereum execution layer may face. RISC-V, as a general-purpose and efficient computing model, has a more mature hardware and software ecosystem, and is considered a feasible solution to these potential problems.

However, the proposal is still in the discussion phase. Given the scale of the changes, if it is ultimately implemented, it is expected to take several years.

New Public Chain Choosing Arbitrum Ecosystem

A certain emerging public chain project announced its decision to join the Arbitrum ecosystem, a decision that surprised many. In contrast, the OP Superchain camp has multiple well-known projects, giving it a clear advantage in the competition.

Arbitrum Orbit and OP Superchain, as L2-based scaling solutions, have some differences in their design concepts:

• Orbit allows developers to create dedicated Rollup or AnyTrust chains that can be directly anchored to Ethereum (L2) or Arbitrum (L3).

• The vision of OP Superchain is to build a network composed of multiple parallel L2s, these L2( are called OP Chains) and are based on a shared OP Stack standard codebase.

In short, Orbit focuses more on vertical scalability, while Superchain emphasizes horizontal scalability. Both adopt different strategies in terms of modularity and flexibility. Orbit emphasizes openness and supports various data availability options. Superchain, on the other hand, pays more attention to consistency with Ethereum and multi-chain standardization, being more cautious about modular changes.

Dynamics of Established DeFi Projects

liquidity mining situation of a certain DEX

The liquidity mining program of the new version of this DEX offers decent returns, but the requirements for participants have increased. Compared to the previous version, the thresholds and difficulties have risen, mainly attracting experienced miners. Although the participation of newcomers is low, veteran miners are still actively involved. This strategy may struggle to help Decentralized Finance achieve widespread adoption.

A certain multinational bank's stablecoin enters Decentralized Finance

A stablecoin issued by a multinational bank has entered mainstream Decentralized Finance protocols:

• Added to the V3 version of a certain lending platform.
• Deployed $53 million in liquidity on a certain DEX.

Stablecoins have once again become a hot topic this year. In different market environments, stablecoins can always find suitable development angles, from algorithmic stablecoins to compliant stablecoins, each with its own stage.

A well-established DeFi protocol expands to a new chain

A certain established DeFi protocol recently launched on a new chain and introduced an incentive program. Although the rewards are good, the scale is limited. While the project has not become an industry leader, it is still actively developing, including collaborations with the ecosystem and continuous updates and iterations. As an established DeFi project, it faces unique challenges, lacking both the advantages of leading projects and the token issuance bonuses of new projects. Its development prospects largely depend on the overall growth of on-chain activities.

New Trends in the Payment Sector

A certain payment giant has launched a new network aimed at serving the global payment market. This network provides financial institutions with a compliant, seamless, and programmable framework that supports global payment coordination for fiat currencies, USDC, and other payment stablecoins.

The design goal of this network is to overcome the infrastructure obstacles faced by stablecoins in mainstream payments, including unclear compliance requirements, technical complexity, and the secure storage of digital cash.

The primary goal of this network is to solve the issue of cross-border payments, aiming to replace traditional inefficient and high-cost payment methods. At the same time, it offers programmability, which is expected to promote the widespread adoption of blockchain technology. This initiative may encourage more countries to issue compliant stablecoins, thereby changing the global payment landscape.

Competition in the Cross-Chain Communication Track Intensifies

The competition in the cross-chain communication field is becoming increasingly fierce:

• A certain DEX chooses a certain cross-chain protocol as the information transmission bridge for its multi-chain expansion plan.
• A well-known venture capital firm purchased a large amount of a certain cross-chain protocol token and committed to holding it for the long term.
• Another cross-chain protocol has released its future development plan.

Although the demand in this sector is strong, competition is also fierce. Most projects primarily rely on transaction fees for profit, which may lead to a continuous decline in fees, benefiting users. For protocol integration, stability and security are the primary considerations.

From the perspective of economic models, such projects may be more suitable for the independent development of dedicated chains or integrating their mechanisms into the token model of PoS chains.

Established DeFi Projects Exploring New Domains

A well-known DeFi project's derivative protocol has deployed funds for the first time in the non-U.S. Treasury field, with an amount of $50 million and a total cap of $100 million.

The fund recipient is a platform focused on connecting on-chain and off-chain unsecured lending. This platform primarily targets qualified investors and institutions, while also expanding to regular on-chain users through derivative products.

The core of the platform is the "fund pool representative" mechanism, where these representatives are usually reputable institutions or trading companies responsible for managing the loan pool, assessing borrower credit, setting loan terms, supervising loan execution, and handling defaults.

This project was not popular in the last market cycle, mainly because its business model involves absorbing on-chain deposits and providing unsecured loans to off-chain clients in a centralized manner. However, with the changing compliance environment and user perceptions, this model has gradually been accepted. Nevertheless, the aforementioned capital deployment is still considered a relatively high-risk move.