Welcome to Finance Redefined, your weekly source of essential insights into decentralized finance (DeFi) – a newsletter created to bring you the most significant events from the past week.
In the world of DeFi, Solana is gaining momentum and could potentially surpass Ethereum in terms of transaction fees within the next week. The Financial Conduct Authority (FCA) in the United Kingdom is working towards creating a comprehensive crypto framework by incorporating the best aspects of traditional finance (TradFi) and DeFi-related regulations.
Unfortunately, a trader lost over a million dollars worth of crypto assets due to the 0L Network hard fork. It was a challenging week for the top 100 DeFi tokens by market cap, as some experienced double-digit growth while others faced losses on the weekly charts.
According to a report, Solana is on track to overtake Ethereum in transaction fees, a significant development for Solana’s reputation as the “Ethereum killer.” On May 7, Solana’s total economic value reached $2.8 million, very close to Ethereum’s $3.1 million.
Dan Smith, a senior research analyst at Blockworks, believes that Solana could surpass Ethereum’s transaction fees within the week. However, Solana still has a long way to go to catch up to Ethereum’s daily transaction fees. On May 8, Ethereum generated over $2.75 million in fees, compared to Solana’s $1.49 million, as reported by DefiLlama.
The FCA aims to regulate cryptocurrencies like Bitcoin by combining the best practices from TradFi and DeFi. Matthew Long, the director of payments and digital assets at the FCA, believes that a combination of different approaches is the right way to regulate the industry.
In an unfortunate turn of events, a trader known as NN lost over $1 million in cryptocurrency due to the 0L Network hard fork. The trader purchased 147 million Libra tokens in February 2023, valued at approximately $1.47 million at the time. However, the value of Libra has dropped over 58% since May 3, currently trading above $0.001.
Hermetica has introduced the first-ever Bitcoin-backed synthetic United States dollar with yield-generating capabilities. Set to launch in June, the synthetic dollar, USDh, will offer users yields of up to 25%. This development allows Bitcoin holders to earn yield on their U.S. dollars without relying on the traditional banking system or non-Bitcoin-related products.
In terms of market performance, the top 100 DeFi tokens had a bearish week, with most experiencing losses on the weekly charts. However, the total value locked in DeFi protocols exceeded $90 billion.
Thank you for reading our summary of the most impactful DeFi developments this week. Join us next Friday for more stories, insights, and education on this rapidly evolving space.