March witnessed a flurry of activity in the decentralized finance (DeFi) space, with groundbreaking developments and significant updates shaping the landscape. From innovative upgrades to exciting airdrops, the month showcased the resilience and dynamism of the DeFi ecosystem.
The protagonist for the month of March was Ethereum where the Dencun upgrade went live, with EIP 4844 being the biggest push, which enables posting L2 rollup data to the Ethereum mainnet via “blobs”. This is a major headwind for the L2 DeFi ecosystem, owing to reduced fees and better UX.
Another major headwind was BlackRock unveiling ‘BUIDL’ - Tokenized Asset Fund on Ethereum—With a $5 Million Buy-In.
Now let’s have a look at all the major key updates within the lending space for this month:
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Liquity announces v2, which will feature user-set interest rates and will launch on Ethereum main net with the new stablecoin $BOLD.
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MakerDAO made urgent changes to its borrowing rates after the protocol’s peg-stability mechanism, or PSM, almost ran out of funds last week. Most notably, the DAI savings rate was increased from 3% to 15%. This was clubbed with a significant borrow rate surge across leverage protocols. Check out Lucidity’s detailed blog here.
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MakerDAO raised the $DAI stability fee from 6.41% & 7.18% to 15% & 17.25% through an ‘accelerated’ executive proposal. The yield paid on $DAI deposits also increased from 5% to 15%.
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Venus Protocol, one of the leading money market launches on Ethereum.
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Thorchain, a cross-chain liquidity protocol crosses the TVL by $500M.
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AAVE is set to drop the token incentives to zero while the activity continues to climb. Marc Zeller, founder of AAVE Chan Initiative (ACI) said, “We don’t need token incentives anymore”.
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Prisma finance, an Ethereum-based CDP protocol got hacked for ~$11.6M. Although the hacker offers to return the funds under specific conditions.
Note: We will be extensively covering the developments around Maker’s DAI deployments, and Aave’s governance developments unveiled in the past week in a dedicated blog series.