State of DeFi Leverage: Jun’24

The month of June saw a lot of ups and downs for the ecosystem at large. Lending markets TVL stayed relatively stable over the month.

Starting with the key leverage developments of the month:

• All CRV loans of Michael Egorov were liquidated. The team issued liquidation risk & $CRV Burn Proposal. The team later updated clearance of all bad debt on LlamaLend

• Curve Finance adopts crvUSD for fee distribution

• Proposal to deploy a tailored Aave v3 market for Lido

• Morpho Blue launched on Base, reached $50M deposits in 10 days.

• LlamaRisk introduced an update in interest rate model for crvUSD, adding a time-based mechanism from Frax Variable Rate v2.

• Symbiotic launched permissionless staking protocol, with a modular design to support a mix of restaked collateral

• SparkLend proposed changed for upcoming epoch

• Gauntlet released a dashboard to monitor LRT’s potential market risks

• Asymmetry, Ampleforth launched afUSD to rival Ethena’s synthetic dollar

• FluidDex launched to allow money market users to earn more on collateral & get discount on debt, and for professional LPs to create leveraged LP position.

• Theo launched the framework to leverage assets across protocols. First protocol built on Theo is Straddle that coordinates risk between Aave and Hyperliquid.

• Paxos announced yield-bearing stablecoin Lift Dollar (USDL)

• Defi.money launched an EVM-agnostic stablecoin MONEY, powered by LLAMA. The protocol also entered into a licensing agreement with Curve finance.

• f(x) protocol launched arUSD, powered by rUSD and EtherFi points

• Orbs network launched Perpetual Hub, an intent-based perpetual futures protocol

• Myso introduced Whale match, a convertible debt marketplace on Arbitrum for funding novel debt deals

• Uma protocol’s Oval enabled lending markets deployed by Re7capital on Morpho, enabling OEV capture

• Spectra protocol launched its permissionless DeFi yields protocol

Security Incidents

• DMM, a Japan-based exchange experienced $305 million hack

• UwULend suffered a $19M hack. This was followed by a second exploit of $3.7M

• Holograph was exploited, enabling minting of 1 billion additional HLG

• Prisma issued a reimbursement plan following the security incident last month

Miscellaneous

• Coinbase launched smart wallets

• Layerzero launched on Solana

• Mastercard crypto credential launched for peer-to-peer transactions

• Uniswap postponed fee switch vote

• Paradigm researches MEV taxes

• Robinhood acquiring Bitstamp

• Graph protocol transitioned to Decentralized Data Layer

• Berachain launched Public Testnet bArtio B2

Regulatory

• US SEC closes investigation in Ethereum 2.0

• SEC charges Consensys Software for unregistered offers and sales of securities through its MetaMask staking service. Consensys responded with a statement.