In this latest installment of DeFi Uncovered, we welcome a new addition. This time Gabe (@0xGabe_) joins Ed (@Defi_Maestro) and Derek (@0xavarek) for episode 6. As usual, the team dives deep into all things DeFi, exploring current trends within the DeFi landscape and providing updates on the latest developments within Mantle Ecosystem. Here is a summary of what was discussed.

What are the recent developments in the DeFi space right now?

E: The DeFi landscape is experiencing a notable shift toward points systems as users seek engaging ways to interact with protocols. Projects are increasingly delaying their token generation events (TGE) to allow users to accumulate points and interact with their platforms, fueling speculation about the future value of their tokens. A prime example of this is Ethena Shards, which was Ethena's version of points. It's created a huge buzz around the release of $ENA and its potential value.

There's also been a resurgence in the popularity of memecoins across various blockchains, including Avalanche and Solana. This revival indicates a growing risk appetite among traders, likely spurred by recent market trends that have seen many in profit and willing to invest in memecoins.

Another emerging trend in the DeFi space is the rising interest in AI-related cryptocurrencies. Where there were once only a few players, we now see more projects as the community gains a deeper understanding of their potential benefits and use cases within the ecosystem.

What is the Dencun Upgrade, and what implications does it have for the DeFi landscape?

E: The Dencun upgrade represents a step forward for layer-2 (L2) solutions and the Ethereum ecosystem, as the upgrade introduces blobs that significantly reduce transaction fees. Blobs provide a cost-effective way for L2s to store temporary data on the blockchain. The Dencun upgrade is an initial step towards implementing full danksharding. While danksharding is anticipated to provide a more comprehensive solution to scalability and cost issues, it is still a few years away from being introduced. In the meantime, the Dencun upgrade offers a significant stride forward in making DeFi applications more accessible and economical.

G: The Dencun upgrade is a crucial milestone for Ethereum scaling. Over the past few months, we've observed a significant increase in gas prices for standard transactions, even on L2s. When Ethereum's gas prices climb, it becomes more expensive for L2s to settle transactions on the mainnet. The Dencun upgrade effectively addresses these challenges.

The timing of the upgrade is particularly fortunate, as it coincides with the current bull market phase, during which an increasing number of users are engaging with the Ethereum ecosystem. This increased activity naturally drives up gas prices. However, the upgrade has played a pivotal role in reducing these costs, making interactions within the DeFi space more affordable for users.

What are the upcoming developments within Mantle Ecosystem that the community can look forward to?

E: Firstly, it's worth noting that Ethena and Pendle are expected to launch on Mantle shortly. While I can't provide a specific launch date, it's definitely a development our listeners will want to keep an eye on. Additionally, we're looking forward to the launch of IntentX, a perpetual DEX (decentralized exchange), which is one of the projects supported by our EcoFund.

Beyond these launches, our showcase applications are also rolling out significant updates. Merchant Moe is set to introduce its "liquidity book" feature on its DEX, enhancing the trading experience. Then we have INIT Capital, who are going to extend the range of liquidity hooks it offers to users. For example, it's launching a USDe liquidity hook, which will enable users to earn Sats — for a complete guide on the Ethana Sats campaign, please visit here.

What does it take to become a DeFi paradise?

G: To become a true DeFi paradise, we need more innovation. Recently, there has been a slowdown in innovation within the DeFi space. From a user acquisition point of view, the most notable innovation we've had has been the introduction of point systems. Then, from a user retention aspect, we've seen restaking, but other than that, we've seen little more come out of the DeFi space. With that being said, I know many protocols are working on some exciting concepts at the moment, so it'll be interesting to see what comes out over the next few months.

E: To achieve the ideal state of a DeFi paradise, one critical issue we must address is the problem of liquidity fragmentation. Currently, having liquidity dispersed across various platforms is highly inefficient. Consolidating this liquidity into a single pool would be far more effective. This way, despite the liquidity being sourced from different blockchain networks, users could access it seamlessly, enhancing overall efficiency.

Furthermore, it's crucial that the foundational assets used within the ecosystem are optimized for capital efficiency. Many ecosystems are now focusing on maximizing value for users, for example, by incorporating yield-bearing ETH and stablecoins as native components. Mantle has done a great job of achieving this by introducing $mETH, USDY/mUSD, and USDe, for example.

What is Mantle doing to become a DeFi paradise?

G: Mantle aims to create an environment that nurtures innovation for builders and users in the DeFi sector. One way Mantle is achieving this is by wielding its sizeable treasury to support projects and developers who choose to build on Mantle Network. The treasury is something Mantle uses to attract innovative dApps to the ecosystem, ultimately helping us become a DeFi paradise.

The introduction of Mantle Rewards Hub is also helping us become a DeFi paradise. By introducing the rewards hub, a feature that allows users to earn rewards within Mantle Ecosystem by locking $MNT in exchange for mShards, it provides another way for users to maximize value within the ecosystem.

With a multitude of developments happening within Mantle Ecosystem, our recent AMA covered a wide array of topics. To catch all the insights and ensure you didn’t miss any alpha, we recommend listening to the full recording available on our X/Twitter.