Cheap Gas, DAO Updates, & DeFi Perps Plunge

FEB 15, 2022 • 4 Min Read

Joo Kian + 2 others

DISCLOSURE: DELPHI VENTURES HAS INVESTED IN ETH, APW AND DYDX. MEMBERS OF OUR TEAM ALSO HOLD SUSHI AND TRIBE. THESE STATEMENTS ARE INTENDED TO DISCLOSE ANY CONFLICT OF INTEREST AND SHOULD NOT BE MISCONSTRUED AS A RECOMMENDATION TO PURCHASE ANY TOKEN. THIS CONTENT IS FOR INFORMATIONAL PURPOSES ONLY AND YOU SHOULD NOT MAKE DECISIONS BASED SOLELY ON IT. THIS IS NOT INVESTMENT ADVICE.

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Chart of The Day: Gas Is On Sale!

  • Are you looking to move funds around or claim yields? Now’s a good time to do it. Gas prices have significantly decreased from their peak last month of 218 Gwei to just around 60 Gwei today, which translates to a 72% reduction.
  • At the beginning of 2022, gas prices jumped due to surging volume for NFTs. However, as mentioned in yesterday’s Daily, NFT activity has been cooling off in the past week. Opensea is one of Ethereum’s biggest gas guzzlers, and an acute slowdown in NFT volume (and thus transactions) can largely impact the price of gas.
The Blood of Moloch and Ve-Everything

[Excerpt from our weekly DAO Insights]

  • APWine, due to a lack of quorum in the first vote, is voting again to add a treasury fee to their AMM. The entirety of the .05% swap fee would go to the APWine treasury, which is governed by APW holders.
  • Balancer is currently voting on modifying its protocol fees. With the transition to veBAL now occurring, the DAO is considering increasing their protocol fees from 10% to 50%. According to the proposal, this will increase earnings for veBAL holders, which should encourage more locking. Detailed projections can be found here.
  • Fei Protocol is edging closer to releasing its new product Turbo. This proposal earmarks funds for the Codearena security audit of the new product and is required for release. The review will start in a month.
  • For more details, Delphi members can visit the full post here.
Too Early to Call It a Comeback [January 2022]

[Excerpt from our Monthly Chartbook]

  • When it comes to decentralized perpetuals (“perps”), dYdX is still the dominant exchange, boasting ~78% market share. Meanwhile, its native token (DYDX) is down more than 70% from its all-time high and has struggled amid broader market weakness.
  • The reason for dYdX’s poor performance is in part attributable to the lack of value accrual mechanisms, since trading fees are collected by a centralized entity. However, this is set to change with the launch of dYdX V4 by EOY 2022, which could drive more value for DYDX holders (and maybe even some relief to its price action).

  • GMX is now the second-largest decentralized perpetuals exchange to offer spot swaps. Its launch on Avalanche has nearly doubled GMX’s volume, helping drive down its valuation relative to average “earnings” (note: P/E is far from perfect when it comes to analyzing protocol valuations but it does provide additional context on the amount of fee’s generated relative to a protocol’s current market value).
  • GMX differs from many of the other perpetual protocols due to its strong earnings and value accrual mechanisms, which directly benefit token holders; GMX returns 30% of all fees to stakers. Read more about GMX’s design in the following report.
  • For more detail on the state of defi perps, see our latest monthly chartbook.
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Joo Kian + 2 others