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This is the weekly newsletter powered by DeFi Talks, with the help of the Defi Talks Intern Team :
Hope you will enjoy it, feel free to share and ask questions in the comment section.
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Let’s start…
MACRO TALKS:
They speak, we bleed.
"If we were to overtighten, we could use our tools to support the economy later on, but if we failed to tighten enough, inflation would become entrenched and that would be a much bigger problem''.
Another Fed meeting happened, and the markets again missed by calling a pivot. The market widely discounted the 75 bps hike, the focus was on Powell's words.
He chose to be hawkish and immediately swept away the possibility of a pause.
The Chairman was very clear about wanting to bring inflation back to 2%.
From this sentence, we can see how the 'soft landing' is unlikely and the central bank will not stop until something breaks.
This image below of fed funds futures shows us what the market is currently discounting: we are currently at 3.75%.
Forecasts expect a peak around June 2023 of around 5.1% or +1.35% from now and after that a less restrictive fed with rates for June 2024 expected at 4.4%, -0.7% from the previous year's peak.
Certainly, the faster they raise rates the faster they have to lower them, at the moment we are still seeing a very strong US economy, a sign that the rate hike has not yet fully penetrated the country's economy.
Tightening and high rates will surely lead to a broad deterioration in macro data because that is what the fed wants.
For next week, eyes will be on the release of the inflation data on Thursday,
forecasts are:
Cpi MoM 0.7%
Core Cpi MoM 0.5%
INTO THE RABBIT HOLE:
DeFi TVL (7d change) according to Defi Llama:
Ethereum: $50b (+0,4%)
Bnb chain: $7,08b (+3,1%)
Tron: $5,32b (-2,1%)
Polygon: $1,54b (+7,25%)
Avalanche: $1,52b (-1,9%)
Top protocol revenues (last 7d) according to Token Terminal:
Opensea: $11,3m (+27%)
Uniswap: $10,3m (-9%)
Lido Finance: $8,6m (+10,2%)
Pancake Swap: 5,5m (+40%)
Convex Finance: -0,1% (+3,2%)
Venture capital rank by Mcap according to CryptoRank:
Alameda Research: $96,85B (+11,65%)
Multicoin Capital: $84,55B (+12,4%)
Fundamental Labs: $69,5b (+13,5%)
Weekly winners: (data from CoinGecko)
$ AR +52%
$ CHZ +42,4%
$ OKB +39%
Weekly losers: (data from CoinGecko)
$ WBT-38,6%
$ KLAY -24,5%
$ TKX -24,3%
Top stable farm:
PUSD-3CRV on Convex Finance (Ethereum) → 19% APY
PROTOCOL OF THE WEEK:
Did you ever suffer a “sandwich attack”?
Let me walk you through it!
A sandwich attack is an attack performed by a MEV bot (Maximal Extractable Value) by front-running a transaction driving the price up and selling right afterward making a profit.
You can see in practice how it will look from the example below:
This attack is most of the time made in illiquid pool, why?
Because even with a small amount of $$ you can move the price significantly.
As you can see the transaction in the middle was done by a simple user who was just trying to buy some tokens, unfortunately for him, a bot saw his Tx in the mempool (which is like the waiting room for transactions before they get processed) and automatically bought the token before him, leading the user to buy at a higher price and selling afterward profiting 9$.
How can you prevent it from happening to you?
There are some solutions, one of which is Omnia Protocol, a decentralized infrastructure that allows you to generate your own endpoint to securely access the blockchain.
What do I mean by this?
For us DeFi users it means processing transactions through “flashbot” allowing the transaction in question to be processed directly without “waiting” in the mempool.
Do you get where this is going?
It will make your DeFi journey in illiquid pool easier.
Nonetheless, it is recommended to use this tool if you need to swap a large number of tokens to prevent incurring substantial losses.
ALPHA:
If you visit OMNIA Dapp you can generate an endpoint on Ethereum, Avalanche, Polygon and Bnb chain for free so far.
Obviously, there are plenty more features released and to be released by OMNIA so make sure to join their discord!
Do you want to support our job? Don’t miss these opportunities:
EXCLUSIVE BONUS:
CRYPTO.COM: 45$ BONUS only if you use this link
https://crypto.com/app/defitalks/
- 10$ If you trade 500$ volume in the first 30 days
- 25$ if you activate a card
- 10$ if you spend at least 100$ in the first 30 days of usage
Support us:
Donate using any EVM compatible crypto: 0x1db2bC5951A75C61E12C1A5e8C0475FBb9df95eD
And don’t forget to follow us on:
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Twitter: https://twitter.com/myDeFiTalks
Telegram: https://t.me/defitalks_updates