GM, this is your Daily Bolt briefing.
In this Sunday edition, we’re keeping you posted on two of the primary natives circulating in DeFi:
Read up on zkSync Era and how it can help bridge the existing UX gap in crypto.
Learn how LST protocols like Rocket Pool and more are competing with Lido’s dominance. Read how Sommelier Finance’s Real Yield ETH vault earns at a rate competitive with LSTs.
Stay vigilant in the markets ⬇️
1/ zkSync Twitter Space - Closing the DeFi UX Gap on zkSync Era
Preview: PDeFi Dad hosts Mark, Jerome, Michael, and Marc to discuss DeFi UX, zkEVM, and more! Click here to listen to the full episode (70 mins).
Read our Note (7 mins) and save 63 mins.
Here are some key takeaways:
Marc says he likes the feature where a dApp on two chains has an embedded bridge on its website. It offers a streamlined UI where users can deposit, borrow, and transfer assets seamlessly. He thinks this is an essential feature for multi-chain apps.
DeFiDad mentions a feature on zkSync's SyncSwap which allows LPs to compare their deposit values with current values, accounting for impermanent loss. He asks for others' opinions on similar features.
Jerome reveals that Velocore is revamping their entire UI for V2, aiming for a better user experience. They are considering a feature like a 'passport', providing users a detailed portfolio history.
DeFiDad talks about the advancements of zkSync and notes that Arbitrum and Optimism are Layer-2 solutions, are also making important progress. He highlights that Optimism has recently made an update (Bedrock upgrade) that reduces gas costs by 50%.
Jerome talks about two paths in DeFi: native account abstraction (like zkSync) and account abstraction wallets. He says Velocore aims to enhance the user experience by using multiple L2s. This includes eliminating the "approve" button, letting users vote with any token, and enabling one-click actions.
Lee agrees with Jerome's ideas, highlighting how crucial it is to make it easier for users to perform DeFi actions by reducing the number of steps. Lee believes that using abstraction can simplify the user's experience.
DeFiDad expects more economic activity in DeFi with Layer-2 solutions like zkSync. He thinks new users will prefer using zkSync directly instead of L1. He shares his experience using Loopring on L1 and the cost difference when he switched to Optimism, showing how L2s can lower transaction costs. He believes transaction costs on zkSync will eventually be very low. He invites others to share their thoughts on the future of the DeFi user experience.
2/ Sommelier Finance - The State of LST Ecosystem
Preview: Stephen and Sunand introduce Sommelier, and discuss the state of Liquid Staking Tokens, Lido’s share across the ecosystem. Click here to listen to the full episode (61 mins).
Read our Note (5 mins) and save 66 mins.
Here are some key takeaways:
Stephen says that different chains have different personalities. For this reason, he says that the strategies and opportunities for Liquid Staking tokens (LSTs) can vary significantly depending on the chain.
Sunand says that non-Ethereum chains tend to have higher risk tolerances. In this sense, he believes that there are more high-risk, high-reward opportunities for LSTs on these chains.
Both Stephen and Sunand are concerned about Lido's share of the LST and staking market being too large. They say that Lido's dominance could potentially lead to centralization issues, which is a concern in the DeFi space that values decentralization.
Both Stephen and Sunand agree that as the utility and composability of LSTs increase rapidly, it makes sense for the DeFi share of ETH to start moving more towards ETH LSTs.
Sunand says that the proliferation of DeFi integrations and deep liquidity for LSTs is just starting. This is expected to significantly increase the share of LSTs in the market.
He says that deeper liquidity makes it easier for investors to buy and sell LSTs without significantly affecting the price, which can make LSTs more attractive to investors.Stephen says that Sommelier is a platform that allows for the creation of vaults like Real Yield ETH. These vaults can be used to optimize yield in a risk-adjusted way, making them attractive to both individual and institutional investors.
Sunand says that Sommelier offers a variety of automated vaults that implement different investment strategies. These vaults include Real Yield ETH, Real Yield USD, and several others that focus on specific governance tokens like UNI and SNX. Each vault is designed to maximize yield through various strategies such as leveraged staking, liquidity provision, and optimizing positions across different DeFi protocols.
Sunand says that Sommelier might start offering strategies on other chains to cater to a higher risk appetite.
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