Wallfacer Weekly (#11)Welcome back to our weekly newsletter!BlackRock leads $47M RWA funding round📰 Story: Building upon the momentum observed in Q1, @BlackRock has stepped up its commitment to the real-world asset (RWA) market by leading a $47 million investment round in @Securitize. This investment is aimed at advancing Securitize’s platform, which uses asset tokenization to enhance accessibility to capital markets. This comes after BlackRock's launch of its own tokenized fund on the Ethereum blockchain. Other notable investors include Hamilton Lane, ParaFi Capital, and Tradeweb Markets.💡 Our Take: As discussed in our Q1 recap, the RWA sector is experiencing a significant transformation, characterized by institutional interest and new innovative financial products. BlackRock's recent investment underscores its commitment to the RWA space, signaling a strong endorsement of its potential. Given the current momentum, the sector appears well-positioned for further growth in Q2. As we prepare for our next quarterly recap, we'll focus on evaluating the impact of these developments.Top RWA names apply for Arbitrum’s STEP initiative 📰 Story: Several leading real-world asset (RWA) projects, including @TrueFiDAO, @OndoFinance , @centrifuge, @superstatefunds, and @ethena_labs, have applied for the Arbitrum Stable Treasury Endowment Program (STEP). This initiative by the @arbitrum DAO aims to diversify a portion of its treasury by investing 35 million $ARB tokens—approximately 1% of total holdings—into stable and liquid financial instruments like treasury bills and money market funds. These investments are expected to yield returns akin to U.S. Treasuries. Uniquely, STEP operates as an investment with oversight from Arbitrum governance, allowing for the recall of funds under specific conditions. The program is designed to test and establish a framework for future treasury diversification and to validate the strategic integration of financial products into the ecosystem.💡 Our Take: Arbitrum's STEP initiative illustrates a strategic approach for DAOs to engage with traditional financial markets through RWAs. By investing in assets like tokenized treasury bills, the Arbitrum DAO boosts capital efficiency while mitigating volatility risks. The participation of leading RWA projects sets a precedent and provides a blueprint for other DAOs looking to diversify their treasuries. As the RWA sector expands, we anticipate seeing an increasing number of DAOs allocate a larger portion of their treasuries to RWAs.Aave Labs proposes V4 protocol📰 Story: @aave has proposed the development of a V4 protocol, targeting a full release in 2025. The new version of the protocol aims to enhance user experience and safety features, building on the strengths and feedback from previous versions. Key proposals include refining risk parameters and user interfaces, improving decentralized governance, and integrating more flexible economic strategies to manage the protocol’s reserves more effectively.Aave V3’s mainnet USDC yields compared to alternative “blue-chip” protocols, sourced from @vaultsfyi.💡 Our Take: The DeFi lending landscape has evolved significantly, marked by the emergence of alternative lending protocols like @sparkdotfi, @compoundfinance, @MorphoLabs, @ajnafi, and more. These players have introduced fresh competition to a domain where Aave once ruled the roost. Many of these protocols offer rates superior to those found on Aave, yet as they become more widely accepted as “blue-chip”, Aave will have to do more to stay competitive. V4 could be pivotal in determining whether Aave can maintain its market prominence or if users will gravitate towards greener pastures. We anticipate a future where DeFi users are more evenly distributed, leading to a highly competitive market where protocols vie aggressively for market share.ezETH depeg stokes Aave-Morpho drama📰 Story: Following the depeg of Renzo protocol’s $ezETH, the Gauntlet LRT Core vault on Morpho Blue faced a liquidity crunch as @gauntlet_xyz moved liquidity to a new market with lower borrowing costs, reaching 100% utilization. This led to a scenario where depositors earned yield but could not withdraw their capital. Amidst criticism from DeFi users, Gauntlet argued that the vault was operating as intended, providing higher interest rates during periods of increased demand to compensate lenders. Marc Zeller of @AaveChan publicly criticized Gauntlet and Morpho for their failure to acknowledge any wrongdoing, intensifying the ongoing drama between Aave and its competitors in recent weeks.The Gauntlet LRT Core vault, as seen on @vaultsfyi.💡 Our Take: Zeller’s comments are often humorous to spectators relishing drama yet perhaps embody Aave’s conservative approach. In a more competitive DeFi landscape, Aave is positioning itself as a tried-and-tested protocol committed to protecting its users. While lenders in the Gauntlet LRT Core vault certainly don’t enjoy being locked into the vault, it is true that they are compensated with increased interest rates via Morpho Blue’s AdaptiveCurveIRM model, which is designed to target 90% utilization over time. Since this incident, the vault’s utilization rate now sits at 91%, demonstrating the theory behind Morpho Blue in practice.
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