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So, what has happened in the DeFi this week? X (former Twitter) is blooming with news and updates. Let’s scroll through the most intriguing highlights together.

• The Initial Trading Event Hits on Reya DEX

• Lido Has Voted Against Making stETH a Restaking Token

• USDe Current Supply Has Exceeded $2.5B

• EigenLayer's TVL Has Exceeded $18B

• Taiko Has Announced the Airdrop & Launched the Eligibility Checker

• deBridge Has Introduced the $DBR Token

• Renzo Additional Boosts For $REZ Stakers

• Cyber Has Started Mainnet Staking For Early Users

• Aevo Has Introduced a New $AEVO Staking Program

Let’s have a look at the on-chain and DeFi analytics to use the latest trends on the market in our favor.

US Hot Crypto Politics

The U.S. Securities and Exchange Commission has recently approved ETH ETFs which caused a boom in crypto-twitter and other social media. The community excitement even brought down the SEC's website for a while.

The ETH price has not spiked as expected, and there are several reasons for this. The ETH ETF has not yet been launched and may not be for several weeks. Although the SEC has approved a form for ETH ETFs, the regulatory process will take time. Therefore, no money has been invested yet, and the real impact on the ETH price has not been reflected. Moreover, the case of BTC ETFs shows that the price does not rise significantly even after trading begins. The most likely scenario is that the ETH price will gradually increase as more investors enter the crypto market.

The United States House of Representatives voted for the Financial Innovation and Technology for the 21st Century Act (FIT21). The act defines blockchain, and digital assets and introduces rules for citizens' interaction with them. Moreover, FIT21 introduces stringent consumer protection measures, including the segregation of customer funds, mandated lock-up periods for token insiders to curb speculative practices, limitations on annual sales volumes, and comprehensive disclosure requirements.

Over the past several years, the SEC has been particularly conservative regarding large crypto players, scrutinizing Coinbase, Binance, and Ripple. This new law is likely to decrease tensions in American crypto politics and build a more transparent legal sphere for all web3-projects.

Ethena Yields Go Wild

Ethena is an emitter of USDe, the yield bearing stabletoken that allows investors to get more than 20% APR. This is the first mass stable coin solution not tied to USD by collateral. Ethena uses the deposited dollars by buying ETH/wstETH and hedging them with perpetual contracts. The yield comes from staking and funding fees from futures. But, why does it reach >30%? ETH staking does not exceed 4% while funding rate fluctuates around 11% APR.

Ethena is running the airdrop program and offers an additional boost program for USDe liquidity providers. Therefore, the current APR also includes the yield from the upcoming airdrop. Pendle fixed yields on USDe and sUSDe are >30% and >40% respectively.

The $ENA token plays a crucial role in Ethena governance. By locking the token, users get the maximum 30x airdrop boost, contributing to the token's success. This feature has enabled the token to achieve the >80% fixed APR on Pendle. Additionally, the token can be hedged on popular exchanges, eliminating directional risk for this strategy. Few other industries offer such lucrative and stable returns!

Airdrops Are Shrinking

Renzo, LayerZero, Taiko…these are just a few big names that have recently announced or airdropped tokens. A common issue is that many in the community are dissatisfied with the amounts received. While complaints are common after any airdrop, current data proves that this is not just hot air.

Previously, protocols allocated around 15-30% of tokens to the community, but this has decreased to about 10-12%, often divided into portions. The absolute value in dollars has also declined in 2023, and this trend appears to be continuing.

Why is this happening? There are a few reasons. First, companies have realized that airdrops have become a large "business" involving wallet farms and professional software. Crypto protocols aren’t interested in sharing money with "ghosts" who stop participating in the project's ecosystem after receiving the airdrop. Thus, protocols are banning those wallets from participation and simultaneously decreasing the amount of money they allocate. LayerZero is undoubtedly the top sybil-identifier in the current market, striving to minimize the number of fake users as much as possible.

Second, protocols focus on investors. As the crypto market matures, the role of investors becomes more prominent, relegating the community to a secondary position. Large funds monopolize the market, demanding larger allocations to ensure profitability even if the token scams or significantly loses its value. This explains the growing investor share in tokenomics.

Finally, the business models of crypto projects have become more sophisticated and geared towards sustained growth. Protocols are adopting “season” models, dividing tokens into baskets, extending the unlocking periods, and making staking mechanics more favorable. Many tokens are now reserved for reward incentives planned for 2-3 years after the initial airdrops. Consequently, the share of tokens dedicated to airdrops has significantly decreased.

Should the crypto community worry about this trend? Probably not. If you are an investor willing to actively participate in the projects, they have incentives to reward you. This is one of the main reasons why point systems have become so popular: they make it easier to identify the real contributions a person has made to a protocol.

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