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Along with tons of three-point shots, Steph Curry adds the “Curryverse” to the list of things he plans on making.

Today, we look at Arbitrum’s increased activity following the Nitro upgrade and our Research team examines whether Euler Finance can carve out a moat in DeFi lending.

This is the Delphi Daily. Let’s dive in.

🚨 In Case You Missed It

NBA star Steph Curry files an application to trademark “Curryverse” where players can earn NFTs through online gaming.
GameStop‘s NFT marketplace goes live on ImmutableX. The platform has been in public beta since Jul. 2022.
Coinbase seeks permission to file an amicus brief in support of Ripple in its legal battle with the SEC.
STEPN launches MOOAR, the first NFT marketplace to adopt a membership model.
Nikolai Mushegian, an early developer of MakerDAO, was found dead in Puerto Rico.

📊 Arbitrum Activity Accelerates After the Nitro Upgrade

Since August, weekly transactions on Arbitrum are up by over 550%. At the time, Arbitrum had 9% of the weekly transactions of Ethereum’s transactions. Today, Arbitrum has 62% of the weekly transactions of Ethereum’s transactions. Is Arbitrum gaining adoption?
Weekly active users on Arbitrum have also spiked in the past two weeks. Since Oct. 10, weekly active users have grown 125% to reach a new all-time high of 282K, even surpassing numbers recorded during the Arbitrum Odyssey event.
Arbitrum has dropped hints about a much-anticipated airdrop of the ARBI token. Much of the activity is likely from speculators trying to boost their on-chain activity in the hopes of receiving a larger airdrop.
Additionally, the recent success of platforms such as GMX has attracted more users to Arbitrum. Users could also be taking advantage of the various yield farming opportunities offered by protocols on Arbitrum.
Finally, the Nitro upgrade was activated on Aug. 31, leading to faster and cheaper transactions on Arbitrum. After the upgrade, the average number of new contracts deployed on Arbitrum increased from 1.8K per week to 6K per week. This is an important marker for on-chain development activity.
For more on Arbitrum, Delphi members can read our Delphi Pro report here.

⚡Can Euler Finance Carve Out a Moat?

Aave and Compound have paved the path for the basic money market design space in DeFi. While Aave has been continually shipping new features, Compound has made improvements and added token markets at a slower rate.
Along with the overall crypto market, both protocols have been in decline. Aave’s TVL is down 70% from an all-time high and Compound’s TVL is down 80% from its peak.
While Euler’s TVL is incredibly small compared to the likes of Aave and Compound, it has been a standout year for the protocol’s growth. Two factors likely contributing to Euler’s growth are the liquidity mining program and the EUL airdrop.
Under Euler’s liquidity mining program, EUL is distributed to borrowers according to the time-weighted size of the debt they hold of an asset. Every epoch, EUL stakers select which market receives emissions. The aim of this is to increase borrow utilization.
The EUL emission effectively subsidizes the borrow rate to encourage more borrowers, and this in turn gives depositors a higher lending rate as a result of the increased borrow demand.

Taking a look at the WETH market, the unsubsidized borrow rates on Euler are significantly higher than rates on Aave. But after taking the subsidy into account, current borrow rates are roughly around the 2% mark.
The WETH utilization rate on Euler is also significantly higher at ~80% due to this subsidy vs. Aave’s utilization rate of 52%.

Early users who interacted with Euler were rewarded with 1% of the total supply of EUL as a one-off retroactive distribution earlier this year.
Thus far, over 80% of eligible users have collected their airdrop. Unlike other protocols, where usage dropped off after the airdrop, Euler’s usage has remained healthy, if not better, after the airdrop.
This could be because there weren’t many users expecting a retroactive airdrop, reducing the number of mercenary users who were using Euler solely to farm an airdrop.
After the airdrop and as the airdrop was claimed, borrowing activity did dip immediately, but has since recovered and currently exceeds the amount of borrows pre-airdrop.
For more on Euler Finance, Delphi members can read our Delphi Pro report here.

🐣 Notable Tweets

Preparing for the Arbitrum Airdrop

The Arbitrum token (and airdrop) is coming sooner than we think.

People made $10,000-$50,000 from Optimism.

Arbitrum is next.

Don’t miss out on what is potentially the biggest airdrop of the year.

Here’s how to prepare. 👇

– Miles Deutscher (@milesdeutscher) Oct 24, 2022

A Warning for Crypto Influencers

Crypto influencers beware: Commenting on crypto assets in (social) media without disclosure and profiting from the effects of that will be considered market manipulation in the EU once MiCA is in force. @zachxbt

– Patrick Hansen (@paddi_hansen) Nov 1, 2022