According to Sam Reynolds, there is a liquidity issue with decentralized derivatives platforms, but at least one player is certain that things will improve. Although Bitcoin is starting the week by testing $28,000, a consolidation at $25K is not out of the question. At $27,966, Ethereum is slightly outpacing bitcoin at the start of the day, up 1.7%. The 10-year Treasury yield is 3.38%, and the S&P 500’s daily closing is 3,970.99.
The most recent Decentralized Finance (DeFi) crisis, involving the protocol Euler Finance this time, appears to be coming to an end, and ether traders are exhaling a sigh of relief. Over the weekend, CoinDesk reported that the hacker who was responsible for Euler Finance’s $200 million protocol attack has mostly reimbursed the money that was taken.
Solana and Eos, two Layer 1’s, received the news well and started the Asia business day on a positive note. Decentralized derivatives exchanges, however, are experiencing a liquidity crisis because there aren’t enough fiat payment rails. The demise of FTX increased interest in derivatives DEXs, but as competitors run out of liquidity, there are concerns about the viability of the idea.
Only $1.27 million, $450,000, and $1.64 million in open interest were available from Kwenta for long positions in bitcoin and ether, respectively. Although GMX was in a stronger situation, there was little short-term cash available. The open interest in Perpetual Protocol is still increasing, however there aren’t many new crypto traders joining DEXs.
