GM, Tim here. Welcome back to The Decentralised, the DeFi newsletter that doesn’t skimp on all the extras. Here’s what you’ll find in this week’s edition:
### dYdX Suffers $9 Million Loss in YFI Trading Incident
Solana DEX trading hits weekly all-time high — again. One of the biggest names in DeFi rebrands. Plus our hand-picked data of the week, top three governance updates, post of the week, and a peek at a developing story we’re keeping an eye on.
### YFI’s Sudden Drop Not a Rug Pull
On November 17, the YFI token from Yearn Finance experienced a shocking decline of over 40% under seemingly inexplicable circumstances. As traders noticed the significant drop on the YFI chart, many speculated that it could be the result of an insider rug pull. However, this steep decline was not caused by major holders selling off their assets. Instead, it seems to be linked to a deliberate attack that aimed to drain the insurance pool associated with the dYdX trading protocol.
### Attack on dYdX’s Trading Protocol
An attacker took advantage of the low margin requirements for YFI trading on dYdX, executing a pump-and-dump scheme that resulted in the extraction of approximately $9 million from the protocol. In response, dYdX has raised margin requirements for its less liquid trading markets. According to Antonio Juliano, the founder of dYdX, the incident has been reported to the FBI. This attack echoes the previous incident involving Avraham Eisenberg and the Mango Markets protocol on Solana, highlighting persistent concerns about low liquidity for long-tail assets like YFI in the DeFi space.
### Solana Traders Drive Record DEX Volumes
Traders on the Solana blockchain have been fervently increasing the volume on its decentralized exchanges, surpassing the previous record of $1.7 billion to set a new peak just under $2.2 billion. The surge in trading activity is largely attributed to the anticipation of token airdrops from Jupiter, Solana’s leading exchange aggregator. As previously noted, Jupiter is planning to distribute a governance token, with 10% of the airdrop earmarked for Solana users who remained active during the challenging crypto winter.
### Avara: The New Name for Aave Companies
Aave Companies, the London-based organization renowned for its DeFi lending platform Aave and the social protocol Lens, has undergone a rebranding and is now referred to as Avara. The name, which translates to “seeing more than you see” in Finnish, aligns with the company’s expansion beyond its original offerings. The rebranding reflects a maturing identity that could stand alongside leading Silicon Valley startups.
### Addressing GHO’s Stability Challenges
While the rebranding may signify a step forward, Avara must first address its internal challenges. Reports indicate that Avara’s GHO stablecoin is still trading below its intended dollar peg. CEO Stani Kulechov has acknowledged that after focusing on expanding GHO’s market presence, the next priority will be stabilizing its price. To this end, a new committee, led temporarily by DeFi veteran Brice, has been established with the goal of raising GHO’s value to $0.985 by November 30, as it currently trades around $0.957.
### Weekly Data Snapshot
Since its launch in August, Avara’s GHO stablecoin has experienced steady growth, reaching a market cap of $32 million despite trading below its dollar target.
### Governance Updates in DeFi
VOTE: Aave proposes converting Ether held in its DAO treasury to Rocket Pool staked Ether. PROPOSAL: Wintermute seeks to initiate trading on the dYdX Chain. VOTE: Arbitrum DAO is considering backfunding successful STIP proposals.
### Post of the Week
NFT artist Degen Alfie showcases his artwork “The Leveraged,” which commemorates the 2021 bull run, alongside his latest piece, “The Survival Game.”
### Ongoing Discussions
The community is buzzing over the Arbitrum staking proposal, with discussions around its comparison to ape staking. A holder of $ARB pointed out that the staking would offer a 15% APR in a scenario where inflation would only amount to 1.5%, suggesting a beneficial trade-off.
Stay connected with us for the latest breaking stories, community polls, and of course — the memes.
