April was yet another rollercoaster of a month for the leverage landscape. Bitcoin halving was the biggest event of the month for the broader web3 ecosystem.

Key developments within the lending landscape this month:

• Maker x Aave feud continued, settling post Chaos Lab’s analysis and a conservative recommendation to reduce DAI LTV across Aave markets by 12%, instead of reducing to 0, which was agreeable to the Aave community.

  • We wrote extensively about both the turn on events and ecosystem impacts of these events.

• Renzo protocol’s ezETH suffered a depeg (1:0.27),  leading to a liquidation cascade of ~$340M worth of leverage positions, which resulted in a profit of 400k for a trader (czsamsunb.eth) in just within two hours.

• Aave Chan Initiative’s founder, Marc Zeller shared news of exploring to enable the "fee switch" to distribute transaction fees, estimated at $60 million annually, to Aave token holders.

  • The protocol also introduced FastPass - allowing a portion of safety module stakers to bypass cooldown periods.

• Chaos Labs announced its efforts on oracles for real-time risk assessment for Aave and plans to extend support for additional protocols and risk parameters through the Chaos Risk Oracle.

• Curve Finance founder Michael Egorov proposed for Arbitrum DAO to match his donation of 237,500 ARB to bootstrap Curve lending on Arbitrum where He plans to introduce a unique feature of ‘soft-liquidation’. The ARB donation by Michael will be used to incentivize the crvUSD/CRV/ARB pool and upcoming LRT/WETH AMM pools on arbitrum.

• Synthetix v3 launched on Base, allowing users to provide liquidity, earn trading fees, and receive USDC/SNX LP incentives. In the future, Synthetic v3 will also support increased open interest and introduce new markets.

Stablecoins

• Ripples announced its plans to launch a USD-backed stablecoin. The stablecoin will be available on the XRP Ledger (XRPL) and Ethereum (ETH) blockchains, with plans to expand to additional blockchains andDeFi protocols and apps over time.

• Ethena onboarded BTC as a backing asset to USDe. This was a crucial unlock that would enable USDe to scale significantly from the current $2bn supply.

• Angle protocol opened access to its USDA stablecoin with 10% native yield and exposure to RWAs. Angle’s USDA is positioning itself to become the reliable Superconductor of DeFi.

• Lambda Finance announced btcUSD, a permissionless and efficient BTC-backed stablecoin.

• Reserve protocol introduced revenue generation USD (rgUSD), which is an overcollateralized stablecoin that deploys its capital into high-yield, market-neutral, low-risk venues across DeFi.

Key Raises

• Berachain announced a $100M raise in series B funding to bolster its ecosystem growth initiatives and engineering resources.

• Movement Labs announced series A funding of $38M led by Polychain. Movement is on a mission to “make blockchain security sexy”.

These raises will play a key role in fostering DeFi activity in the respective ecosystems.

Regulatory Updates

• The Department of Justice opposed a motion from Roman Storm, a developer who worked on Tornado Cash, a sanctioned crypto mixing protocol, to dismiss criminal charges against him.

• Consensys filed a lawsuit against the SEC to protect Ethereum and its native token ETH from regulations.

• Two SEC lawyers reportedly resigned after the agency was sanctioned by federal court over “gross abuse of power” in the SEC’s case against Debt Box.

• Uniswap, one of the biggest DeFi Exchanges gets enforcement notice from SEC. Uniswap’s CEO says “ready to fight”.

Miscellaneous

• Hong Kong Bitcoin and Ethereum ETFs had a soft debut but failed to lift off their volume. The six listed crypto ETFs pushed $11 million in volume.

• Arbitrum DAO deployed the BOLD testnet and shared BOLD AIP on the forum. BOLD proposes unlocking greater decentralization, enhanced security, and pooled challenge funding.

• Worldcoin introduced WorldChain, a Layer-2 based on the OP Stack. Aims to build the world's largest human network to improve trust online and access to the global economy.

• Lido announced the launch of its Simple DVT Module, whose groundwork was laid after Lido DAO voted on its deployment 6 months ago, significantly diversifying the Lido Node Operator set with the participation of community stakers.

• Wormhole launched $W token at a price of $1.66 at a $3B market cap. Based on the debut price, the project’s W token has a fully diluted value (FDV) of $16.5B.

• Safe governance forum enabled transferability of the $SAFE token post reaching the milestone of $100Bn AUM.

Another key development from Lucidity’s core team was the launch of our closed Alpha v1 on Ethereum mainnet together with a Simulation mode that received an overwhelming response from the community and waitlisted users. If you have not tried the product yet, visit Lucidity discord to get your hands on the access code.