🟣 Show Me the Volume

The total crypto market cap drew down another 2.5% over the last 24 hours, continuing its slide over the course of this week. The recent success of Ethereum's Shapella upgrade is however still reflected in its price action, as ETH remains up 5.5% over the last 30 days while BTC is down -0.5% over the same period.

The total crypto market cap drew down another 2.5% over the last 24 hours, continuing its slide over the course of this week. The recent success of Ethereum's Shapella upgrade is however still reflected in its price action, as ETH remains up 5.5% over the last 30 days while BTC is down -0.5% over the same period.  Liquid staking protocols were the talk of the town heading into Shapella. The narrative was easy to understand as withdrawals lead to better price parity and more participation, and the cash flow potential is a straightforward calculation based on ETH staking yield. Lido stETH still dominates the market with nearly 75% market share of all LSDs. Coinbase cbETH, Rocket Pool rETH, and Frax frxETH round out the top four with 14%, 6%, and 2% of market share respectively.  Will market dynamics shift as these protocols roll out their withdrawal process? Rocket Pool and Coinbase have already rolled out support for LSD redemptions, while Lido is aiming for a May upgrade and Frax has yet to finalize and publish its upgrade plan.  Yield and decentralization are also likely to be demand drivers for the next wave of LSD users. Frax's two-token model leverages its flywheel to increase the staking yield that flows to its LSD, while Rocket Pool's use of minipools decreases the amount of control any single party has over the protocol.  The DEXs that hold deep LSD liquidity stand to benefit from swap fees generated by the increased activity around these tokens. Even with withdrawals enabled, there is still a time delay to receive deposits, and some users may demand instant liquidity. The current withdrawal queue is about 12 days.  Also, liquidity remains an important piece in the usefulness and composability of LSDs. For example, many users like the idea of using LSDs as collateral against loans. They can earn ETH staking rewards while also increasing the productivity of their capital. Capital efficiency baby. However, a key requirement to be a listed collateral in a lending market is liquidity. If you default on your loan, liquidators must sell your collateral on a DEX to close the loan! This dashboard tracks LSD swap volume flowing through the DEX market. While Uniswap is the clear leader in total DEX volume, it's Curve that processes around 66% of all LSD volume. Much of that is driven by Curve's $1.5B of stETH liquidity that accounts for 60% of all LSD volume. If LSDs continue growing at the pace most in the industry anticipate, this is a worthy metric to track DEX performance and sustainability.  Have an excellent weekend! - Dan Smith   Flashbots recently surpassed all vanilla builders in terms of number of blocks built. For those unfamiliar, a vanilla builder is someone who really likes ice cream. In all seriousness, a vanilla builder is a proposer who builds their own blocks. Before you get all stingy with me and go, wasn't MEV boost meant to be an implementation of proposer-builder separation (PBS), why are there still so many blocks being built by proposers? I wouldn't worry too much about that as only 8-15% of slots have been captured by vanilla builders in the past 7 days. After Flashbots and vanilla builders, the next largest block builder is builder0x69 with a 25% market share in terms of slots per hour. However as @rajiivpoc pointed out, it's not always about the number of blocks you land, but rather when you land them and what they contain. For example, when crypto prices are volatile, or if there's a hack that someone really wants included in a block, then MEV bribes could be much higher than normal. If you look at MEV-Boost Payments over the last 7 days, Flashbots had a median of 0.05 ETH, compared to builder0x69 with a median of 0.08 ETH. Flashbots had a max payment of 6 ETH whereas builder0x69 had a max payment of 50 ETH. I think it's fair to say there's a pretty large variance between builder payoffs.   Another day, another governance proposal for a legal defense fund. This time it's the Cosmos Hub's prop 791. The vote would provide 50,000 ATOM, worth approximately $610K at current prices, to fund a legal defense team for Grace Yu.  On March 23, All in Bits, the company behind Tendermint and founded by Jae Kwon, filed a legal complaint against Grace Yu, a former AIB contractor. The complaint was for an alleged breach of a mutual non-disparagement clause. A non-disparagement clause states that you won't say anything negative about the company or its products, services, or leaders - in any form of communication. Rather than examining the legal basis of the complaint and what's happening, the more important question to ask is, should DAO treasuries be used for personal legal defense funds? This isn't something new, we've been seeing requests for legal defense funds pop up from protocols such as Sushi, especially as the SEC increases its enforcement actions across the space.  On one hand, if the legal matters contain a specific individual and aren't really related to the protocol, I would argue that legal funds should not be taken from a DAO treasury. On the other hand, if the legal matters could potentially be a life or death situation for the protocol, then perhaps it's worth tapping the DAO treasury just a little. Silent Protocol: Enabling Confidential DeFi on Ethereum Silent Protocol aims to bring privacy to Ethereum dapps without sacrificing application composability or UX. Read More → Skip Protocol: Sovereign MEV Skip Protocol is building toward a sovereign MEV value chain where a protocol, and its community, decide how a block is constructed and how to distribute MEV across all stakeholders. Read More → Bitcoin Security for Proof of Stake? Why Not, Says Babylon Babylon's testnet is currently integrated with 16 different chains with plans to eventually expand beyond Cosmos Read More → Texas 'Proof of Reserves' Bill Advances to Senate The bill focuses on digital asset providers who have $10 million in customer funds or over 500 customers Read More → 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. 133 W 19th St, New York, NY, 10011 Unsubscribe