Welcome to Finance Redefined, your weekly dose of essential decentralized finance (DeFi) insights — a newsletter crafted to bring you the most significant developments from the past week.
The past week in DeFi saw BNB Chain announce native liquid staking on its BNB Smart Chain (BSC). The move is set to help ecosystem participants secure the network while keeping the liquidity of their assets.
DeFi protocol Chainlink launched a cross-chain protocol that makes cross-chain smart contracts more interoperable across nine blockchain networks.
In other news, Arkham Research flagged nearly half a dozen DeFi wallets with millions in assets stuck in DeFi bridge contracts.
BNB Chain will enable native liquid staking on BSC
BNB Chain said it would enable native liquid staking on its BNB Smart Chain as part of its shift to migrate the BNB Beacon Chain’s functions to BSC as the former is wound down.
In an announcement sent to Cointelegraph, BNB Chain noted that the BNB Beacon Chain will be completely shut down by June 2024. However, the company said it will transfer its features to the BSC before it closes.
BNB Chain said that enabling liquid staking on BSC will allow ecosystem participants to secure the network while keeping the liquidity of their assets. While the organization did not give a specific date for the rollout of the liquid staking feature, BNB Chain said it will happen in April or May.
Chainlink debuts new protocol aimed at boosting cross-chain interoperability
Chainlink’s Cross-Chain Interoperability Protocol (CCIP) has entered general availability to foster more cross-chain connectivity. The protocol lets developers use CCIP permissionlessly for cross-chain token transfers and arbitrary smart contract messaging across different blockchain networks.
Developers will also be able to send and trigger function calls on smart contracts deployed on other blockchains, making cross-chain smart contracts more interoperable.
CCIP’s mainnet general availability will enable a faster and easier implementation for developers, bolstering cross-chain connectivity, according to Sergey Nazarov, co-founder of Chainlink.
EigenLayer on the brink of potential yield crisis
EigenLayer, the largest restaking protocol on Ethereum by total value locked (TVL), could be facing a “major” yield crisis, according to industry watchers.
Due to EigenLayer’s rapid growth in TVL, the protocol may be outgrowing its Actively Validated Services (AVS), which could lead to a major yield reduction, according to Chudnov, a pseudonymous builder at 3Jane derivatives exchange.
EigenLayer removed the limits on all liquid staking tokens (LSTs) on April 16, according to an X announcement. EigenLayer launched on mainnet on April 10.
When a user stakes an LST via EigenLayer, it is automatically delegated to a node operator, which uses the deposits to secure an AVS on EigenLayer while receiving staking rewards.
Part of the staking rewards are passed on to the user. Yet AVS on the protocol require much less staked Ether for security, which could lead to issues in the future.
Wallets linked to Coinbase and Vitalik Buterin have millions “stuck” in bridge contracts
Dozens of crypto whale wallets with assets ranging from six to seven figures are stuck on multiple DeFi bridge contracts.
Arkham Research reported that most of these bridge protocols are native contracts and thus require the users to manually retrieve funds, which many of these whales have forgotten. The firm also tagged and asked linked users to check if they could access and retrieve funds stuck for months.
One of these whale wallets is linked to Ethereum co-founder Vitalik Buterin, who has over $1 million worth of assets stuck for over seven months. Another wallet linked to Coinbase also appears to have been forgotten for several months, and some other wallets have assets unclaimed for over two years.
DeFi market overview
Data from Cointelegraph Markets Pro and TradingView shows that DeFi’s top 100 tokens by market capitalization had a bearish week, with most trading in the red on the weekly charts. The total value locked in DeFi protocols fell below $100 billion.
Thanks for reading our summary of this week’s most impactful DeFi developments. Join us next Friday for more stories, insights and education regarding this dynamically advancing space.
