cmdefi

Unichain's $UNI mining incentives are shifting from traditional pools to Hooks Pool, and this is expected to be the trend in the future, similar to the transition from WBTC to WBTC0. It's important to adjust mining strategies in advance.

In terms of pool performance, Hooks Pool does not seem to demonstrate significant superiority, at least not when it comes to fee capture. Looking at the ETH/WBTC pool, the TVL is basically equal, but the trading volumes are not on the same level.

(If the data provided by Uniswap is correct)

Most projects in the early stages are castles in the air. In 2018-2019, I even thought that on-chain lending, such a high-cost and high-friction thing, who would use it? But this did not stop the grand DeFi Summer from beginning. It is very difficult to precisely grasp the pulse of the times, but what is easy to do is to keep trying new things.

Maintain a mindset of "Wow, amazing."

. The syrupUSDC from @maplefinance has been proposed to go live on Aave V3. Currently, the underlying yield of syrupUSDC is 8%-10%. The Lego strategy brought by going live on Aave will visibly increase, and there are some hidden details in this proposal:

(1) Maple can help Aave promote the adoption of GHO, for example, by providing GHO loans to institutions.

(2) In the future, Aave may fully support Maple-related assets, such as Maple BTC.

I didn't expect that $SYRUP would increase the most in the bag. At that time, my reasoning for allocating a bit was that after regulatory easing, the lending business in this area would become easier, and the wind might blow in this direction. However, from an aesthetic perspective, it feels quite similar to web2 products, and the risks of the intermediary pool still exist. It seems far from reaching this position in terms of regulation. But there are quite a few people who are willing to buy into this concept, so I might need to do some homework again.

My DeFi T2 Holdings - Pendle

$Pendle should be the DeFi altcoin I hold the most after $AAVE $SKY $UNI. Let me share my understanding:

(1) One point I agree with the most is that it provides an environment for small funds to participate in DeFi, which is something other projects cannot achieve, no exceptions. This is the moat in my mind.

(2) I have personally bought PT a few times, but I don't do circular lending unless the returns are high enough, and I rarely buy YT.

(3) The interest rate market theoretically has great potential, but before the points appeared, the returns in the DeFi market were mostly predictable. What Pendle needs is the unpredictability and volatility of returns. Points and Pendle are simply a match made in heaven, which is an important reason for Pendle's rise, but it also brings corresponding issues. If points exit the historical stage, the returns market may revert to a predictable trend in the future, which could shrink Pendle's market.

(4) Of course, without points, there may still be other ways to increase return volatility in the future. This is a market trend, so this issue is considered a missing piece but not a fatal flaw.

Finally, Pendle's team and product development capabilities are outstanding, and it's quite rare to surf during this DeFi drought.

Some Understandings of Aave V4:

The core concept is the Liquidity Hub and its associated Spokes, with the central idea being the centralized management of assets to address the problem of capital fragmentation and improve liquidity utilization.

This action will occur in two phases:

(1) Currently, it is addressing the issue of liquidity fragmentation caused by establishing different markets within the same network. For example, on Ethereum, there are currently Core Market, Prime Market, and EtherFi Market. With the introduction of the Liquidity Hub, there will be no different markets within the same network, allowing for centralized liquidity management, and then using Spokes to customize lending parameters, thus eliminating friction from new market creation and the inefficiency of liquidity fragmentation.

(2) The ultimate version in the future is centralized management across networks, which means eliminating the fragmentation between chains and transforming into a unified market. However, this change must rely on a third-party cross-chain facility. Currently, Aave is primarily utilizing Chainlink CCIP, which will maximize efficiency and represent the complete form of traditional lending models, but it will also introduce a layer of cross-chain risk.

Spokes are the entry point for lending in Aave V4, connecting to the Liquidity Hub for customized lending functionalities. Independent rules and risk parameters can be set. Its main role is to maximize lending flexibility, somewhat akin to the Hooks in Uniswap.

Overall, the first step of the V4 upgrade focuses on enhancing the experience, while the qualitative change will come in the later phase of full-chain integration. This may also represent the final version of traditional lending models. For cross-chain solutions, Aave will likely continue to choose Chainlink CCIP, as Chainlink has gradually and invisibly penetrated the very foundations of DeFi.

Talking about the DeFi revival in terms of positions:
My largest position currently is $AAVE
Followed by $SKY $UNI

For now, I believe it's at T1 level

AAVE should have little controversy; it's a hexagon warrior, almost no blind spots can be found. The data for SKY is straightforward enough, the founder buys coins, and as for the occasional issues with the brand and community, I find them acceptable.

(T1 does not represent a rating, it's just a way of expressing positions, NFA)

The 19% subsidy on borrowing from Compound has been ongoing for a while now, and there is still quite a bit of arbitrage space for borrowing.

It is basically suitable for all nested Lego strategies; just pay attention to the capacity of the lending pool, as once it is full, the interest rates will soar. Borrow slowly, and depositors will gradually add funds. It is suitable for medium to small DeFi users.

At this time, you can only play the mainstream of each sector; at least that's the case for DeFi. Attention is too scattered in this cycle, and alpha opportunities that rely on small investments to gain large returns have all been captured by memes, making it very difficult for smaller assets in other sectors to survive.

Unless it's a groundbreaking innovation, like the level of AMM during DeFi Summer, if you think there is one, feel free to discuss.

Many people have asked, the WBTC/WBTC Pool mining on Unichain has about 8% $UNI subsidy returns, what are these two WBTCs and what are the risks?

(1) First of all, initially there was only one WBTC native version that came from the Superchain bridge on Unichain, this version is closer to the mainnet's WBTC, but it must wait for a challenge period of 7 days to return to the mainnet.

(2) The other WBTC is actually WBTC0, a full-chain token version supported by LayerZero. The advantage is that cross-chain transfers are very fast and do not require a 7-day wait, but its security also relies on LayerZero, technically it can be equated with USDT0.

Currently, this version of WBTC0 is strongly supported by Unichain and plans to continue subsidizing it. The incentives for WBTC on the Superchain bridge will gradually decrease, and this WBTC/WBTC Pool is actually used for asset transition. Whether there will be long-term incentives is unknown, but according to the latest Gauntlet incentive plan, there are incentives for the next 15 days, with the amount slightly increased compared to before.

Plume is currently pushing many combinations of RWAfi and DeFi strategies. RWAfi involves depositing money into RWA Vaults, which differ based on the underlying asset composition, such as government bonds, private credit, oil and gas, and Crypto Carry Fund. Once deposited into the Vault, a new token is minted, which can then be paired with stablecoin on-chain assets, using $PLUME to incentivize this liquidity, representing a prototype of RWAfi + DeFi.

I haven't tried it personally yet, but I've observed that the yields indicated by the Vault are estimated values based on past performance. After exploring further, there is a certain discrepancy between this and the current APR, which may be due to yield fluctuations and changes in TVL. Additionally, it’s important to note that the funds in the RWA Vault have a lock-up period for redemption, so if you deposit, you should be prepared for a long hold. However, the incentives provided by $PLUME are relatively stable (with the trade-off being that Royco also requires locking up). If you can accept the lock-up and the systemic risks of RWA, the overall returns still seem to be higher than the current market yield levels.

DYOR

Plasma was秒了, as if saying the market isn't out of money, but rather the projects you are looking at just aren't being bought. 😂

Let AI help people mine in DeFi; I think this track is still too early.

With the current technology, identifying the most profitable mines is not a problem, but whether AI can better identify the risks of smart contracts is still questionable.

In the long run, this track is a trend, but when will it work? I think it will only come to fruition on the day that AI can replace auditing; otherwise, there will be mostly concepts and gimmicks.

The Aave Umbrella new staking module is now online. The current yield is acceptable, but the growth of TVL needs to be considered. Each pool has a target APR set, which simulates the yield when TVL reaches the estimated target. The target yield reference value for USDC is around 8%.

Total yield = Aave Yield + Umbrella rewards

The Umbrella rewards part is Yield outside of interest and comes from a portion of the protocol's income.

Let's calculate the account of Spark Points:

What is currently uncertain is how many $SPK will be allocated to the Points event.
The known data is as follows:

- Pre-Farming 1: 130M
- Pre-Farming 2: 14.48M/month, ~174M
- Aave: 7.24M/month, ~87M

The known distribution is 130+174+87=391M.
The total known allocation for the first year is 1.63B.
So what remains unknown is 1630-391=1239M.

Let's break it down:

There is still over 1.2 billion left, which is actually quite a lot, far exceeding the previous Pre-Farming mining. The question is how to balance between Pre-Farming and Points, after all, those who invested real money have been saving for 1-2 years. If a large proportion is given to Points, it is likely to be criticized, but if too little is given to Points, many people may be disappointed, as the current market expectations are quite high. It's time to test the actuaries at Spark.

(I personally think it's basically certain that this 1.2 billion will not all be given to Points; even if it is all given, new Points events will come out later to dilute it.)

A game of strategy among actuaries.

I found that some deposits of BTCFi are really quite high, but they have no presence in the market at all. Who is depositing, is it an information cocoon?

DeFi projects, in fact, the best way to promote is for the official team to share earnings and arbitrage opportunities. For veteran players, there are many such opportunities that are rarely discussed. It's impossible to rely on players to share, because the profit logic of DeFi is completely opposite to that of trading. In trading, everyone is willing to shout because it requires mutual support, but there are very few people willing to talk about the real profitable mining/arbitrage opportunities. However, for project parties, this is the best advertisement.

Stablecoin Bill and Its Relation to DeFi
Microstrategy on ETH Version
Feeling the market activity is increasing

Reflections on DeFi over the past week
( - /12)🧵

The Lending AMM model has already gnawed off a piece of meat from the red ocean of the DEX market:

The first to use this model, Fluid @0xfluid, has daily trading volumes that consistently rank among the top three alongside Uniswap and Curve. Euler @eulerfinance is also preparing to launch EulerSwap to join this battlefield, which is one of the few DeFi innovations seen in this cycle that genuinely change the trading environment and improve capital efficiency.

Ripple's $RLUSD subsidy is very aggressive. After quickly filling 150 million on Aave, it has started to distribute funds on Euler.

(The 150 million amount on Aave maintains an 8%-9% APR)