DeFi Weekly Review: BNB Chain's Liquid Staking, Chainlink's Cross-Chain Protocol, and Potential Yield Crisis
Summary:
This week's developments in the decentralized finance (DeFi) sector include BNB Chain's announcement of native liquid staking on its BNB Smart Chain, and Chainlink's launch of a cross-chain protocol for more interoperability across various blockchain networks. In other news, Arkham Research reported potentially lost assets in forgotten DeFi wallets. Furthermore, EigenLayer, an Ethereum-based protocol, is at risk of a yield crisis due to rapid growth. Finally, the DeFi market saw a bearish trend with the total value locked in DeFi protocols falling below $100 billion.
Welcome to this week's edition of Finance Redefined, your one-stop for the latest and most impactful developments in the world of decentralized finance (DeFi). Let's jump straight into the highlights of the past week.
BNB Chain declared that it will be introducing native liquid staking on its BNB Smart Chain (BSC), with the aim of enabling its ecosystem participants to enhance the network's security while maintaining their asset liquidity.
In another advancement, Chainlink, a DeFi protocol, unveiled a cross-chain protocol designed to improve the interoperability of cross-chain smart contracts across nine distinct blockchain networks.
In other developments, Arkham Research warned against five DeFi wallets with assets worth millions that are locked in DeFi bridge contracts.
As for BNB Chain, it confirmed the introduction of native liquid staking on its BSC as part of its plans to move functions of the BNB Beacon Chain to the BSC before its complete shutdown by June 2024.
Although no specific date was mentioned for liquid staking's launch, it is anticipated to occur in April or May, according to BNB Chain.
In other advancements, Chainlink's Cross-Chain Interoperability Protocol (CCIP) has been released for general use to enhance cross-chain connectivity. It enables developers to employ the CCIP for cross-chain token transfers and to implement smart contract messaging across different blockchain networks.
EigenLayer, the Ethereum-based protocol with the highest total value locked (TVL), is potentially staring at a major yield crisis. This is ostensibly due to its rapid TVL growth outpacing its Actively Validated Services (AVS), which could trigger a substantial yield drop.
Reports emerged about numerous crypto whale wallets having their assets, ranging from six to seven figures, locked up in several DeFi bridge contracts. Arkham Research revealed that most of these bridges are native contracts that necessitate manual fund retrieval by users, which many have seemingly forgotten.
A few examples include a wallet linked to Ethereum co-founder Vitalik Buterin, holding over $1 million worth of assets that have been locked for over seven months. Similarly, a wallet linked to Coinbase also appears to have been forgotten for months, and several others have assets unclaimed for over two years.
In an analysis of DeFi market performance, it's visible that the top 100 DeFi tokens have had a bearish week, as the total value locked in DeFi protocols dipped below $100 billion.
That wraps up our review of this week's most critical DeFi changes. Stay tuned for next Friday's insights into this ever-evolving realm.
Published At
4/26/2024 10:25:00 PM
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