Solana’s rise has expanded the DeFi field. We’ve followed from afar, but never had a fresh take to offer. However, the last few months of frenzied activity on Solana has provided a new opportunity to look at its position in the market, and how it might evolve. Zhev has previously written technical explainers of AMMs and other DeFi primitives on his own substack. This month, we’ve teamed up with him for an in-depth look at Solana’s fee markets. MEV has come to dominate the fee market conversation on Ethereum, and as Zhev explores below, it will soon come to dominate on Solana’s as well. Transac ..read more

ICYMI: Dose of DeFi is looking for more paid writers and researchers. Click here for more information and to apply. DeFi yields have continued to surge higher. Until very recently, the lending landscape consisted of stalwarts like Maker* and Aave printing money with higher rates while being challenged by a new crop of lending protocols. These newbies, the likes of Morpho and Ajna, entered with more market-based risk management – as we discussed in our January examination of the lending landscape.  That was more or less the state of play until an emergency proposal was submitted to MakerDA ..read more

Ahoy! Dose of DeFi is looking for a part-time paid researcher. This person would contribute to research and link gathering as well as authoring and publishing their own deep dives. More info here. Send resume & one research sample to careers@caneyfork.co. Below, Denis returns to take stock on the state of the modular blockchain space. He first looked at the market opportunity in November 2022, and then how rollups were advancing in May 2023. Since then, the pendulum definitely swung towards Solana and the monolithic design, but already so early on in 2024, the modular narrative is oscillat ..read more

Hello! Welcome to another year-end look at the world of DeFi. As in 2020, 2021, and 2022, we’ve collated below the top memes of the year for 2023, along with five charts that help explain the year. It’s been a year without euphoria, yet enthusiasm emerged across several key areas. Narrative development is key to success in crypto and DeFi; the memes below are intended to highlight how parts of the industry have tried to build momentum around ideas, problems, or investment opportunities. The charts are snapshots of an industry that now has years of market cycles and competitive battles under it ..read more

Co-written with Lucas Gaylord, co-founder & CEO of Eulith, which builds on-chain trading infrastructure for professional traders DeFi has to date been dominated by investors with either niche technical know-how, or enough hubris to fly blind. Yet when trading goes beyond a browser plugin to institutional levels, a myriad of issues arise. The reality is, DeFi has evolved for a market of individual traders managing their own capital, but operational challenges arise when “OPM” comes into play. Since the beginning of financial markets, and across all asset classes and market cycles, traders h ..read more

This is part 2. Check out part 1, MEV resolutions: Are we there yet? As we discussed last month, the MEV ecosystem is growing rapidly. Instead of trying to solve MEV, focus has shifted to incorporating it into application and protocol design. MEV mitigation and democratization have become the most important things in DeFi (and arguably, all of Ethereum). Yet while MEV mitigation efforts are necessary to make Ethereum easy to use, the solutions emerging over the past year (while competitive), have come at the expense of decentralization.  This has led to soul searching over the true goal o ..read more

Ahoy! Back after a restful summer and now drinking from the MEV firehose. There’s so much happening; it reminds me of DeFi in the fall of 2019. Look out for another MEV piece next month. - Chris A lot has changed in the three years since Flashbots released MEV-Geth in its attempt to “frontrun the MEV crisis”. Ethereum has been through a market boom and bust, and successfully shifted to Proof of Stake – a major technological feat. All the while, the battle for the value that leaks from economic transfers on blockchains has grown more intense. Attempts to eliminate MEV have failed; the realit ..read more

Dose of DeFi will be off for the rest of the summer and back in the fall. Research ideas and suggestions welcome just hit reply. Have a safe and happy for summer. - Chris Automated-market makers (AMMs) are the greatest innovation DeFi has ever seen. Decentralized exchanges were created to allow non-custodial trading, but AMMs took this further with pooled liquidity, which enables passive market making and always ensures there’s a counterparty to trade with. And unlike lending, there’s no dependence on off-chain infrastructure like oracles. Uniswap launched in the fall of 2018 and by DeFi summe ..read more

ICYMI: Check out last month’s post on the expanded ecosystems that Ethereum rollups are building. Chart of the week: The upside of higher rates via makerburn.com Maker has had a busy 2023. It reduced its direct exposure to USDC to just under 10%. Instead, it is reinvesting USDC is has acquired via the PSM into off-chain assets (okay Real World Assets) that generate a higher yield. It has more than $1.2bn invested into short-term treasuries from MIP65 Monetalis Clydesdale Tracker with an estimated yield of 4%. More recently, on June 1 it started earning 2.6% on a deal to re-invest $500m with ..read more

Working out how to scale blockchain to internet levels has been a focal point for researchers ever since Bitcoin launched. There were lots of dead ends (Plasma, state channels, sharding), but the industry eventually coalesced around rollups as the best scaling solution. Rollups have since moved from theoretical discussion to practical development. This month, Denis expands on his analysis of modular blockchains from last November, and examines how the major rollup projects aim to scale past proof-of-concept –  and ultimately build sustainable systems that could underpin a new internet.&nb ..read more