DeFi Update: How are you spending your Third Crypto Stimulus Check (DIGG)?

Holyyyy crap guys, I’m sorry. Nick here.

Once again, it’s been a bit of a crazy week. For those that don’t know, I just joined ParaFi Capital. Been a pretty exciting week, that’s for sure.

If you want access to the exclusive interviews with top traders and industry executives, our research about DeFi and crypto trends, and the additional DeFi letter, you will need to subscribe. But have no fear, it’s only $14.99 a month, or $139.99 a year. Get yourself a belated holiday present and subscribe to Alpha Alarm today.

It’s literally the cost of one Uniswap trade a month or a few Starbucks coffees - it’s cheap.

Anyway, here’s the DeFi update.


It may sound like a bit of a broken record but the DeFi market continued to re-rate higher this past week, with a number of coins in the space moving to all-time highs or multi-month highs at the very least.

This price action comes in spite of the fact that bitcoin and ether faced strong drops to $29,200 and $1,100, respectively, just days ago.

To contextualize the growth in altcoins relative to larger caps, Bitcoin Dominance has dropped to 62.7% from 67.5% just 10 days ago.

CRV continued to scale higher this past week toward $2.25. It is now up 93% in the past seven days, making it one of the best-performing large-cap DeFi assets from late 2020’s lows. CRV’s rally comes as a hype has continued to spread around the project’s collaboration with Synthetix. Curve’s new SynthSwap solution allows power users to participate in large-scale swaps across different crypto asset classes often with less slippage and fees than a centralized platform.

“Curve integrates with Synthetix to allow large scale swaps between different asset classes with minimal slippage. Utilizing Synthetix’ zero-slippage synth conversions and Curve’s deep liquidity and low fees, we can perform fully on-chain cross asset swaps at scale with a 0.38% fee and minimal slippage.”

Chart of CRV’s price action over the past two weeks

THORChain’s RUNE token also enjoyed a move to new all-time highs this past week at $2.50. To be honest, I’m not 100% tuned into the RUNE ecosystem but I’ve been hearing good things about the need for cross-chain liquidity pools.

The ongoing rally may also be related to a short squeeze. Fonship shared a tweet earlier this week that showed that the funding rates of the RUNE futures markets were seriously in the negative.

The strength in CRV and RUNE underscores the broader repricing in DeFi assets that began at the start of January, catalyzed by Ethereum passing $1,000.

What I noticed this past week is that there has also been a re-rating in small to medium-cap altcoins, specifically in one sector: Decentralized exchanges of all kinds.

  • Derivadex (DDX) is up 135% this past week

  • 1INCH is up 45% in the past seven days

  • Perp Protocol (PERP), whose CEO we did an interview with for our paying subscribers, is up 125% in the past week

  • And more…

My first thought is that the extreme strength since in UNI and SUSHI last week, along with strength in Coinbase’s pre-IPO shares, is causing a re-rating in these coins. With impending AML regulations/changes coming to centralized exchanges, too, decentralized exchanges are likely to gain even more traction.

Shameless Plug

Ok ok, a bit of a shameless plug: I recently told my crypto story thus far on Twitter.

If you want to know a bit more about where I’m coming from, feel free to check it out.

What We’re Watching This Week

What I’m watching this upcoming week is DIGG.

DIGG, an Ampleforth rebasing token that is pegged to bitcoin, just launched yesterday.

DIGG was distributed to users of the Badger DAO protocol on a semi-quadratic basis on these three key factors:

  • BADGER staked in the protocol.

  • BADGER earned by the user. BADGER could and still can be earned by users by depositing liquidity into the protocol for farming purposes.

  • How much BADGER has been earned by the user relative to the coins they have staked.

That being said, all users that have received BADGER over the past two months should have some DIGG to claim.

I don’t know about you guys but the airdrop I got was quite generous. I staked some of my DIGG, since I’m actually bullish on the team and the community. Badger has one of the strongest communities in DeFi IMO.

Another thing I’m watching is Armor.

Armor is a decentralized insurance platform that was spawned as a result of controversy over SAFE/COVER. Armor is built on top of Nexus Mutual to try and boost coverage demand and coverage capacity.

Armor will be shortly launching an ARMOR liquidity mining program.

I’m interested to see if that garners as much hype as the original SAFE farming.

Watching Whale Addresses in DeFi

What really caught my eye this past week was DSD, Dynamic Set Dollar. For those that don’t know much about the project, we did a breakdown of the basic concept of algo stablecoins in a previous post for subs.

We saw a lot of large holders cash out of DSD this past week, causing some wild swings in this market’s price action. A coalition of DSD whales bought out the biggest DSD whale, “Escobar.eth.” There were some large addresses that cashed out, though, including 0xb1.

I’m interested to see how price action on DSD plays out over the next seven days. In the coming seven days, a lot of coupons are set to expire, which may incentivize some large actors to bid DSD up to $1.00 and beyond so they can claim their coupons.

Again, If you want access to the exclusive interviews with top traders and industry executives, our research about DeFi and crypto trends, and the additional DeFi letter, you will need to subscribe. But have no fear, it’s only $14.99 a month, or $139.99 a year. Get yourself a belated holiday present and subscribe to Alpha Alarm today.

It’s literally the cost of one Uniswap trade a month or a few Starbucks coffees - it’s cheap.


Disclaimer: This author is an analyst at ParaFi Capital. ParaFi Capital may hold positions in assets mentioned in this article. The views displayed in this article are opinions of the author—and the author only.