The Dynamo DeFi newsletter covers trends, on-chain analysis and tools in crypto each week. Be sure to also check out my YouTube for more regular content.
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📈Trends and Narratives
Bitcoin Halving and the Runes Takeover
This week Merlin Chain, a Bitcoin Layer 2 protocol, reached the 10th largest TVL of any chain. The chain has seen over 2,000% TVL growth in a month while having only a few protocols, compared to the hundreds on many EVM chains.
Nearly half of this TVL comes from Solv Finance, an uncollateralized lending protocol earning native token yields using trading strategies. Currently, Solv is offering over 8% APY for those willing to stake their BTC. NOTE: Staking redemptions are not available until June, but that’s not stopping nearly 15,000 investors from staking on Solv.
Happy Halving
The Bitcoin halving has cut block rewards to 3.125BTC. While there are fewer rewards per block mined, Bitcoin fees in the days after the halving are off the charts:
To emphasize the massive jump post-halving, here are the last 7 days in Bitcoin fees:
A significant portion of this jump is due to the launch of Runes, a new protocol and improved token standard over BRC-20 tokens. If you haven’t noticed Runes plastered all over your timeline for the last few weeks, here’s a helpful explanation of what they are and why they’re important:
How to Capitalize
Dive into Runes and the Bitcoin ecosystem. I suspect this narrative has not peaked yet, and there are still many opportunities to capture upside as many market participants won’t learn about these new protocols and primitives until after much of the gains are made.
Watch for new protocols on both Merlin and Stacks (both are Bitcoin Layer 2 protocols with burgeoning ecosystems). MERL and STX tokens should accrue value as the ecosystems grow as well.
I’ll have more later this week with a dedicated email about Stacks and its ecosystem.
🔢On-Chain Analysis
Mode Network TVL Surges Amidst Points Program
Mode, a fast-growing Layer 2, accelerated its growth this week, with TVL surging over 30%. Mode stands out, not for its tech, but for its economic incentives.
Mode has an ongoing points program to allocate airdrop rewards towards people that:
Deposit funds into Mode
Use tokens like mBTC, ezETH, and weETH in Mode DeFi
Engage with the Mode ecosystem
While Mode is still relatively early as an ecosystem, its strong performance against much well-funded chains like Base is a strong signal.
🚜Farm of the Week
PENDLE-WETH on Camelot V3
This strategy is available on the Arbitrum network, and Camelot is Arbitrum’s leading native DEX with over $100M in TVL.
How it Works
Pendle has established itself as one of the top yield protocols, and the token has performed very well in the last 12 months. If you hold PENDLE or ETH, this strategy could be for you.
Simply select ‘Auto’ (or Manual if you like to set your own parameters and ranges) and select your favorite provider. Steer’s CRSV strategy auto-rebalances, has plenty of TVL, and currently offers ~165% APY.
Risks
Here are the farm’s details on DefiLlama - while the TVL is considered safe with over $2M in TVL, I wouldn’t personally feel confident strategy if the TVL fell below $1M.
🛠️Tool Spotlight
Track Crypto Events with Layergg
Layergg tracks crypto events, past and present.
Most of their content is on their X page; however, they also have an active Telegram channel. Their monthly calendars are definitely worth a read to keep up-to-date on the coming month’s events.
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📅Key Events This Week
Macro Events
📊 Tesla earnings - April 23rd
📊 Meta earnings - April 24th
📊 Microsoft earnings - April 25th
📊 Google earnings - April 25th
Token Unlocks
🔓 CTSI (0.65%) - April 23rd
🔓 BICO (1.92%) - April 23rd
🔓 DAO (5.98%) - April 24th
🔓 AVAX (8.79%) - April 24th
🔓 YGG (3.49%) - April 24th
🔓 AXL (0.83%) - April 27th
Launches & Updates
Note that these launches are mostly unvetted by the Dynamo DeFi team and this isn’t an endorsement of any of them.
🚀 AxonDAO token launch on Arbitrum - April 24th (Source)
🚀 Entangle mainnet launch - April 24th (Source)
🚀 Forgotten playland game release - April 25th (Source)
🚀 MetaX chain mainnet launch - April 27th (Source)
🚀 Stacks Nakamoto Upgrade - April 15th-29th (Source)
That’s all for this week. For more frequent content, follow me on Twitter and YouTube.
Until next time,
Patrick Scott
Dynamo DeFi
