The crypto ecosystem continues to evolve with notable shifts across key sectors. Ethereum’s transition into deflationary territory has reignited interest in staking and Layer 2 developments, while decentralized finance (DeFi) protocols adapt to changing market dynamics. Altcoins are showing signs of life, though performance remains uneven across different blockchain categories. This weekly report breaks down the latest trends in lending, liquid staking derivatives (LSD), Layer 2 scaling, decentralized exchanges (DEXs), and derivative platforms—providing a comprehensive view of on-chain activity and market sentiment.
👉 Discover how Ethereum's deflationary shift is creating new opportunities for investors.
Lending: Market Adjustments Amid Rising Risk Appetite
MakerDAO: Strategic Reduction in RWA Exposure
MakerDAO has reduced its real-world assets (RWA) portfolio to $2.975 billion, with DAI Savings Rate (DSR) deposits falling to $1.626 billion. This marks a noticeable downward trend, signaling a strategic pullback amid rising market risk appetite. As users increasingly convert stablecoins like DAI and USDT into higher-yielding assets such as BTC, ETH, and altcoins, MakerDAO is proactively managing liquidity risks to prevent potential DAI de-peg scenarios during mass withdrawals.
Despite the contraction, the protocol continues to generate strong revenue, with estimated annual earnings holding steady at $120 million. The focus remains on maintaining DAI’s stability while navigating macroeconomic uncertainty and shifting capital flows.
Aave: GHO Rate Hike on the Horizon
Aave’s native stablecoin, GHO, has surpassed 30 million tokens in circulation since its July 15 launch on Ethereum. In response to ongoing market conditions, the community initiated a temperature-check vote to increase GHO’s borrowing rate from 3% to 4.72%. The proposal, which concluded on November 8, passed with overwhelming support—99.99% approval—indicating strong consensus around strengthening GHO’s peg and boosting income for the stablecoin module.
However, GHO has consistently traded below $1, raising concerns about its utility and long-term viability. Without broader adoption or compelling use cases beyond borrowing incentives, sustaining its value may remain challenging.
Additionally, Aave V3 has been activated on Gnosis Chain, expanding its multi-chain footprint. Supported assets now include WETH, wstETH, GNO, USDC, wXDAI, EURe, and sDAI—based on recommendations from service providers ACI, Gauntlet, and Chaos Labs.
Liquid Staking Derivatives (LSD): ETH Enters Deflationary Phase
Ethereum’s staking metrics reveal a bullish trend. The ETH staking rate rose to 23.55% this week—an increase of 1.13% week-over-week—with 28.32 million ETH now secured in the Beacon Chain. Active validator nodes reached 875,600, up 1.06%, reflecting growing confidence in the network’s security and yield potential.
The ETH staking yield remains stable at 3.60%, offering consistent returns for participants. More significantly, Ethereum has re-entered a deflationary state, with annualized inflation now at -0.039% due to continued burn from transaction fees exceeding issuance.
LSD Protocol Performance
Among major LSD protocols:
- LDO surged 10.1% weekly
- RPL gained 5.6%
- FXS rose 6.4%
In terms of staked volume growth:
- Lido increased by 1.38%
- Rocket Pool by 1.34%
- Frax by 1.03%
These gains largely mirrored ETH’s 4.5% price appreciation, underscoring the correlation between LSD tokens and underlying ETH performance.
Notably, Lido advanced its Distributed Validator Technology (DVT) module deployment, with potential slashing losses now covered by the Lido Cover Fund—enhancing security and trust in node operations.
⚠️ Watchlist: Brevan Howard Digital continues offloading LDO tokens, transferring 500,000 LDO to Binance and Coinbase last week. Approximately 5 million LDO remain in their wallet, suggesting further selling pressure could emerge.
Rocket Pool’s deposit pool holds 19,537 ETH, with a 50.62% RPL staking rate—slightly down from prior levels—and an effective staking ratio of 92%.
Ethereum Layer 2: Momentum Builds Ahead of Cancun Upgrade
Total TVL across Ethereum Layer 2 networks stands at $12.51 billion, marking a 5.16% increase over the past seven days. Developer momentum is accelerating ahead of the upcoming Cancun-Deneb upgrade, discussed during Ethereum’s 121st All Core Developers Call (ACDC).
Key Updates from ACDC #121
- Devnet 12 is expected to launch in early December, with public testnet upgrades likely rolling out after Q1 2024 holidays.
- Protocol specifications have been simplified: blob sidecar inclusion proofs aim to reduce implementation complexity.
- A new rule allows honest validators to reorganize late-finality blocks, improving network resilience.
Network-Specific Developments
Optimism: Fraud proof development progresses—Canyon network upgrades scheduled for November 14 (UTC) on OP Goerli and OP Sepolia testnets.
Arbitrum:
- DAO governance council elections concluded with six new members elected.
- L3 Rollup solution Orbit is now ready for mainnet deployment.
zkSync: Wallet provider Argent announced it will discontinue support for zkSync Era after six months of alpha testing, shifting focus entirely to Starknet.
Starknet:
- The Starknet Foundation will distribute 50 million STRK tokens to early contributors through its "Early Community Members Program," rewarding developers, educators, and content creators.
A total of 10 billion STRK tokens have been minted but not yet released. Distribution includes:
- Majority held by Starknet Foundation
- 32.9% to core contributors
- 17% to investors
- Token distribution is expected by April 15, 2024.
👉 Learn how Layer 2 innovations are reshaping Ethereum’s scalability and user experience.
Decentralized Exchanges (DEX): TVL Rises Despite Trading Volume Dip
Combined DEX TVL reached **$11.95 billion**, up $500 million from the previous week. However, trading volumes saw a slight decline:
- 24-hour volume: $2.65 billion
- 7-day volume: $18.35 billion (down $700 million)
Notable Performer: RUNE on Ethereum
RUNE emerged as the fastest-growing protocol by TVL within the Ethereum ecosystem this week. Its unique arbitrage mechanism drives high transaction fees and yields for liquidity providers (LPs). Additionally, RUNE enforces a 3:1 locking ratio—for every $1 of non-RUNE assets staked, $3 worth of RUNE must be locked—amplifying demand and creating upward price pressure.
This design creates a powerful flywheel effect: increased usage → higher APY → more TVL → greater token demand.
Derivatives & Altcoin Activity: Mixed Signals Across POW Projects
Bitcoin traded between $33,000 and $35,500, with its market dominance dipping from 54% to 53%. Meanwhile, the ETH/BTC ratio improved from 0.051 to 0.052, indicating relative strength in Ethereum and boosting altcoin sentiment.
Altcoins entered a period of renewed activity, though Proof-of-Work (PoW) projects underperformed:
- KAS led gains with a 22% weekly rise
- Most others posted gains under 5%
- BCH remained in negative territory
Mining Metrics: DNX Shows Value Potential
Despite minimal ranking changes among top mining projects:
- KAS remains firmly in the top three by output
- DNX slipped from 7th to 8th place
DNX’s GPU-based mining algorithm is undergoing adjustments—the network’s GPU hash rate share dropped from a peak of 24% to 20%. Given its relatively low market cap compared to peers with similar hash power, DNX appears undervalued. As capital rotates into under-the-radar PoW assets, DNX could see meaningful revaluation.
Frequently Asked Questions (FAQ)
Q: What does ETH being in deflation mean for investors?
A: A deflationary supply means more ETH is burned through transaction fees than is issued as rewards. This scarcity can support long-term price appreciation if demand remains steady or increases.
Q: Why did MakerDAO reduce its RWA holdings?
A: To mitigate liquidity risk amid rising demand for ETH and BTC. Reducing exposure helps prevent DAI de-pegging during large-scale redemptions.
Q: Is GHO stablecoin safe to use?
A: While backed by Aave’s robust infrastructure, GHO consistently trades below $1 and lacks widespread utility outside borrowing incentives—use with caution until adoption improves.
Q: How does RUNE’s 3:1 locking ratio work?
A: For every $1 of external assets (like BTC or ETH) added to the network, $3 of RUNE must be locked. This amplifies demand for RUNE as TVL grows.
Q: When will STRK tokens be distributed?
A: The full release is expected by April 15, 2024, following the vesting schedule for core contributors and investors.
Q: Why is DNX considered undervalued?
A: Despite solid hash rate and GPU adoption, DNX has a lower market cap than comparable PoW projects—suggesting room for growth if investor interest increases.
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