Artisan – #12 Weekly: Nov 21 – 27

MEV and flashbots, Curve’s LLAMA, Mango Market hacker “loses” millions in failed Aave exploitation, Bitcoin miner selling aggressively, Chainlink staking going live, Crypto firms under pressure to share info about reserves

🤔 Analysis & Thoughts

Flashbots – The future of MEV is SUAVE (Read more)

• After successfully isolating the centralizing effects of MEV to the block builder role, Flashbots hopes to decentralize block building itself with SUAVE (Single Unifying Auction for Value Expression) 
• SUAVE unbundles the mempool and block builder role from existing blockchains and offers a highly specialized and decentralized plug-and-play alternative
• Sharing the same sequencing layer allows crypto to stay decentralized, block builders to capture cross-domain MEV, validators to maximize their revenue, and users to transact with the best execution while reducing the economic centralization pressure on each domain

The MEV landscape (Read more)

• MEV-boost block rewards (median) are 2.66x higher than locally built blocks, while the maximum difference on daily delta windows, reaching as much as 7.9x
• MEV Relays are responsible for facilitating the production of >85% of blocks on Mainnet, and the distribution of >98% of the EL rewards
• 50% of all blocks in the network and almost 70% of all execution block rewards, can be traced back to just 4 builder entities
• The Flashbots relay is attracting the most submissions by the most diverse set of builders, as it is the relay that maximizes the probability of a builder getting their block picked by a proposer–with 90% of validators being subscribed to it

Analysis of Curve’s LLAMA: risk for collateral holders, improvements for liquidations (Read more)

• Lending is inextricably dependent on AMM liquidity and most protocols require active governance to approve or deny new token listings, or to modify LTV ratios in risky times
• LLAMMA solves this by making internalizing the AMM, making the collateral token be LP shares itself
• Some people will probably dislike this, because it puts more responsibility/risk onto the collateral holder

Mango Market hacker “loses” millions in failed Aave scheme, what happened? (Read more)

• Avraham Eisenberg, the trader behind October’s Mango Market hack, recently borrowed 40 million curve (CRV) tokens from decentralized lending platform Aave, according to on-chain data
• The drastic move is part of an apparent scheme to sell off the tokens, plummet CRV’s value as a result, and make away with millions in short positions on the token—leaving Aave saddled with a massive quantity of bad debt. The ploy did not execute as planned
• Weeks ago, Eisenberg publicly outlined a plan to manipulate a loophole in Aave’s lending policies. Yet, in the weeks following it, neither Aave nor Gauntlet—the financial modeling platform employed by Aave—moved to take any precautionary steps to prevent an exploit like the one Eisenberg outlined from occurring

Expanding Uniswap’s addressable market (Read more) 

• Uniswap has successfully launched deployments on Layer-2 scaling solutions, accounting for 65% of all Layer-2 DEX volume in Q3 2022
• A number of projects have taken advantage of Uniswap’s software development kit, either integrating the Uniswap protocol or augmenting its functionality
• Whether or not to turn on the fee switch is a big debate for Uniswap’s growth. The question is whether a new capital pool for growth investments would offset a weaker competitive position with liquidity providers

🌍 Layer-1 / Layer-2

Ethereum node project Akula shuts down in wake of Paradigm competitor (Read more)

• Akula developers pointed to the emergence of a rival project backed by VC interests as the reason for the decision.
• The rival project in question denied that it was based on Akula’s code.

Arbitrum to kick-off devnet 3 for 4844 Nov. 30 (Read more)

• Terence Tsao, a member of the Arbitrum R&D team, announced that Arbitrum is fully supportive of 4844 and a believer in the rollup-centric roadmap. They are working closely on rebasing 4844 on top of Capella hard fork, adding all the new networking changes, and integrating the new KZG library. We are excited to kick off devnet 3 for 4844, which is aimed to launch on Nov 30

Ronin Network announced the release of Saigon– a Ronin testnet for builders and developers (Read more)

• Saigon, a fleshed-out development playground, will allow anyone, anywhere to show the merit of their work and make the case for their deployment on Ronin

ConsenSys says it collects IP addresses of MetaMask users via Infura (Read more)

• Blockchain firm ConsensSys announced an update to its privacy policy
• The firm said it collects IP addresses of MetaMask users who connect to the wallet via Infura

Bitcoin miners selling aggressively as crypto market continues to struggle (Read more)

• Bitcoin miners face increasing sell pressure as the flagship digital asset’s value continues to struggle below the $16,000 mark
• Capriole Fund founder Charles Edwards on Nov. 21 said miners were selling at the most aggressive rate in almost seven years, with a 400% increase in selling pressure over the last three weeks. He added that several Bitcoin miners could go out of business if the digital asset’s value does not rise soon

Chainlink Staking (v0.1) is planned to go live in its beta version on Ethereum mainnet on December 6, 2022 (Read more) 

• Staking is a core initiative of Chainlink Economics 2.0, enabling LINK token holders and node operators to earn rewards for helping increase the cryptoeconomic security of oracle services
• The first phase of Chainlink Staking is a beta release (referred to as v0.1), which will consist of a staking pool that supports the ETH/USD Data Feed on Ethereum mainnet

💰 DeFi / CeFi

Pendel introduced its new V2 AMM (Read more)

• Pendel’s V2 AMM introduces multiple features focusing on friendly liquidity provision, capital efficiency, and flexibility
• Some key points include minimal IL, up to 200x improvement on capital efficiency from V1, low-slippage trades
• AMM can be optimized for any specific yield ranges to optimize liquidity, etc

Bankman-Fried explains why FTX collapsed in new letter to employees (Read more)

• FTX founder Sam Bankman-Fried has offered an explanation of why the crypto exchange failed in a new letter.
• Bankman-Fried thinks there is still a chance to save FTX.

Ardana, a decentralized stablecoin ecosystem built on Cardano, is halted (Read more)

• According to the official, due to recent developments with regards to funding and project timeline uncertainty, the Ardana project has had to come to a halt. Ardana’s code will remain open source for builders to continue our work going forward as they wish

dYdX has completed the second of five milestones of dYdX V4 Blockchain (Read more) 

•  dYdX now has two working internal blockchain networks running in perpetuity. One serves as a developer playground, and the other serves as a general testnet. Functionally, the blockchain allows for core trading functionality, with leverage, fees, oracle price updates, hourly funding rates, and liquidations

Cardano-based decentralized stablecoin Djed will hit mainnet in January (Read more) 

• Djed, Cardano’s first decentralized stablecoin, will go live on the main network in January
• Developers announced the move at the Cardano Summit event in Lausanne, Switzerland. Djed is a decentralized stablecoin soft-pegged to the U.S. dollar that will exist on Cardano’s Layer 1 blockchain
• Backed with crypto assets instead of fiat money, Djed has been developed by a firm called Coti in collaboration with Cardano lead developer Input Output

Uniswap’s new privacy policy says it collects data tied to user wallets (Read more)

• Uniswap has released a new privacy policy, according to its official website
• The privacy policy states that the DEX collects certain on-chain and off-chain data connected to users’ crypto wallets
• On-chain data is public information that occurs on the blockchain. This includes things like purchases, transactions, wallet transfers, and interactions with smart contracts. Off-chain data is external to a blockchain, such as a user’s device type and operating system, but can nevertheless be linked to a wallet and its activity

Grayscale won’t share proof of reserves, citing ‘security concerns’ (Read more) 

• Grayscale will not show proof of reserves due to “security concerns,” after its bitcoin and ether products fell to all-time lows this week
• Crypto firms are under pressure to share information about the health of their reserves after FTX filed for bankruptcy protection

🖼️ NFT / 🎮 Gaming / 🎭 Metaverse

GMX, Perp and Drift have teamed up to launch the DeFi Derivatives Alliance (Read more)

• They aim to provide greater visibility into their DEXs
• They are working with Nansen to build a new aggregated analytics dashboard showing exchange reserves and health

🏢 Institutional Adoption / DAO

J.P. Morgan’s crypto wallet trademark submission approved by the U.S. Patent and Trademark Office (Read more)

• The trademark covers virtual currency transfer + exchange, crypto payment processing, virtual checking accounts, and financial services

Top Japan banks and BOJ to begin trials of digital yen next year (Read more)

• The Nikkei reported that the Bank of Japan has started working on a CBDC with three megabanks as well as regional banks in the Asian nation—and next year will trial a digital yen

Binance introduces the Web3 Industry Recovery Initiative (Read more)

• Binance introduced the Web3 Industry Recovery Initiative
• Binance and a number of key industry partners have joined together to commit $1B+ to provide financial support to the most promising and highest-quality companies that need it most

Polygon’s ‘Secret Sauce’: Why Starbucks, Meta, and Reddit Chose the Ethereum Scaler (Read more)

• Brands like Starbucks, Reddit, Meta, Nike, Disney, and Coca-Cola have built on the Ethereum scaling network or announced plans to.
• Despite the FTX collapse, Polygon Studios CEO Ryan Wyatt told Decrypt to expect Web3 brand momentum to continue to build.

Apollo and Hamilton Lane launch blockchain investment vehicles with Figure (Read more)

• Apollo and Hamilton Lane are launching investment vehicles on the blockchain-leveraging fintech platform Figure
• Apollo and Figure first announced plans to collaborate on a series of blockchain-enabled initiatives in July 2021

Snag Solutions is launching the official ApeCoin DAO marketplace (Read more)

• The custom marketplace includes unique features built specifically for the BAYC and Otherside communities, including ApeCoin staking and NFT metadata integrations
• Staking and daily rewards are directly embedded within the buy and sell flow, and they’ll continue improving the experience by adding filters for Apes with $APE staked, listed sets, and more

🧑🏻‍⚖️ Regulations

Bill Ackman believes that crypto can benefit the legitimate business under completed regulations (Read more) 

• The telephone, the internet, and crypto share one thing in common. Each technology improves on the next in terms of its ability to facilitate fraud
• Despite crypto’s ability to facilitate fraud, with the benefit of sensible regulation and oversight, crypto technology’s potential for beneficent societal impact may eventually compare with the impact of the telephone and internet on the economy and society

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