OKX Ventures May 2023 Monthly Report: Invested in Prisma, Rage Trade, and Shutter Network, covering LSD, decentralized derivatives, and MEV tracks.

Source: OKX Ventures

In the past month, the encryption industry has been rapidly developing, and OKX Ventures has witnessed the rapid development of the industry:

BTC ecosystem continues to develop rapidly, and OKX introduces the concept of BRC-30. BRC-30 adopts the design principles of BRC-20 and introduces pledge-related operations such as deposit, minting, and extraction. BRC-20 experienced a rapid growth in May, with Total Market Cap reaching $475 million and 24k+ BRC-20 tokens. The demand for block space raised by BRC-30 can allow miners to earn higher income, and it can bring new communities to Bitcoin, enhance the vitality of the Bitcoin community. OKX Ventures will firmly keep an eye on the development of the Bitcoin ecosystem and continue to explore with partners such as Unisat, leading the industry.

ZK Layer2 ecosystem is developing rapidly. The leading zkSync Era TVL has exceeded $440 million and is steadily ranked third in the entire Layer 2 ecosystem with a significant upward trend. In just three months, the cumulative number of depositors has soared from 10k to 770k, achieving nearly 80 times user expansion. About 20k accounts contributed over $27 million in transactions within three months. Although there is still a big gap compared to Arbitrum and Optimism in terms of TVL, zkSync's daily user fees have gradually surpassed the former two.

The head project of LayerZero, Stargate, in the multi-chain ecosystem has grown by over 300% since March, with a 30-fold increase in active users, and a user base of around 150k. Stargate provides users with more convenient trading methods, cheaper transfer fees, and safer cross-chain methods. The MEV field also maintains a good momentum, with the MEV TAM currently accumulating to around 450 million, and Flashbots launching new features such as SUAVE.

OKX Ventures has continued to pay attention to the industry in May, and remains optimistic about ZK ecology, infrastructure, DeFi, Web3.0 and other tracks. They have invested in projects such as Prisma, Rage Trade, and Shutter.

Prisma

Project Overview

Prisma Finance is an LSD stablecoin protocol that focuses on realizing the full potential of Ethereum liquidity collateralized tokens.

Prisma allows users to mint a stablecoin (acUSD) fully collateralized by a liquidity pool token. This stablecoin will be incentivized on Curve and Convex Finance, creating an efficient capital flywheel where users can earn trading fees, CRV, CVX, and PRISMA in addition to Ethereum staking rewards.

Prisma's codebase is completely immutable, based on Liquity, to create a powerful protocol and truly decentralized stablecoin with advantageous and flexible collateral parameters, making it attractive for those who want to fully utilize LST without the risk of other stablecoins. The Prisma DAO will be responsible for parameters, emissions, and protocol fees.

Project Highlights

Prisma allows users to mint Prisma's native over-collateralized stablecoin (acUSD) using any of the following LSTs, providing unparalleled capital efficiency for ETH token holders who provide liquidity. With the help of Ethereum staking rewards, loans secured by LST are automatically repaid.

Prisma's code is based on Liquity, with complete immutability, aiming to create a powerful protocol and truly decentralized stablecoin. Its flexible collateral parameters attract users who want to fully leverage the potential of their liquid staking tokens. Prisma DAO will be responsible for managing parameters, issuance, and protocol fees. The project has received support from top industry founders such as Curve Finance, Convex Finance, and FRAX Finance.

OKX Ventures believes that the market for Ethereum liquidity staking tokens (LST) has grown rapidly in recent years, with a current market value of $18 billion, accounting for approximately 10% of the entire Ethereum market value. It has become the largest DeFi category in terms of TVL and one of the most promising markets. Prisma Finance may represent one of the most promising directions in the LST race.

Rage Trade

Project Overview

Rage Trade is a perpetual futures protocol based on the Arbitrum ecosystem. It creates deep liquidity by recycling underutilized LP through innovative UNI v3 treasury strategies. The project officially launched on the Arbitrum network on December 13, 2022.

Rage Trade's core products include Delta Neutral Vault and 80-20 Vault. Delta Neutral Vault allows users to earn ETH rewards on GMX in a Delta-neutral manner through fully recyclable liquidity. 80-20 Vault ensures that at least 80% of LP tokens continue to generate returns on the original protocol, while the remaining 20% is used as virtual liquidity for Rage Trade.

Project Highlights

Full-chain recyclable liquidity: Through LayerZero, all liquidity funds in other existing protocols can be brought in, including AMMs (such as Curve), money markets (such as Aave), and derivative protocols (such as GMX), which can expand the depth of the funding pool.

80-20 Vaults Strategy: can help protocols achieve risk balance, which improves capital efficiency while maintaining fund security.

Delta Neutral Vault: Provides liquidity on GMX in a Delta Neutral manner (by shorting ETH and BTC through Risk-Off Vault and Risk-On Vault on Aave to reduce risk exposure), while earning ETH rewards on GMX. The advantage is to ensure GLP stakers receive returns by reducing market risk.

Using the vAMM model for easy arbitrage: The vAMM model does not rely on oracles to peg prices to asset prices, and is an independent market, allowing arbitrageurs to hedge their positions on CEX and profit from price differentials.

OKX Ventures believes that Rage Trade can provide users with higher capital efficiency, more abundant liquidity, smoother trading experience, and more substantial LP returns through the above features.

Shutter

Project Overview

Shutter Network is an MEV protocol that uses threshold encryption to counter front-running/anti-cheating. Their main work is to collaborate with L2 and sidechains to integrate this mechanism, add an encrypted or shielded mempool, protect the entire rollup/sidechain's MEV, and improve anti-censorship features.

Project Highlights

The current mainstream adoption of MEV in DEFI is still a huge obstacle and barrier, and the current ecosystem heavily relies on centralization and trust assumptions to address this issue, such as solving this problem in relayers or sorters. Shutter can improve this situation, provide lower trust assumptions for the MEV problem, improve user experience, and enhance the robustness of the decentralized market.

The product landing progress of the Shutter team is very rapid, and it is expected that the first instance of this type of front-running and review protection will be implemented in the Gnosis chain. In addition, they have also received funding from Optimism DAO as the first step in adding encrypted mempool to the OP stack. Shutter's product has been recognized and demanded by multiple ecosystems.

OKX Ventures is optimistic about the MEV track and believes that Shutter can effectively prevent the malicious parts of MEV (front-running, sandwich attacks), preserving "benign" MEV (arbitrage, liquidation). Additionally, based on its technical architecture, Shutter can provide more use cases, such as using the same threshold encryption DKG to provide masking/encrypted voting in snapshots.

About OKX Ventures

OKX Ventures firmly embraces the future of decentralized development and is committed to betting on decentralization and serving the innovative Crypto industry. OKX Ventures is not a traditional financial investor, not only providing funding, but also willing to provide services and resources, and willing to accompany all "entrepreneurial partners" to grow together. It not only discovers excellent teams, excellent products, and innovative technologies, but also empowers excellent entrepreneurial projects. At the same time, OKX Ventures is also a link between projects and OKX. The OKX ecosystem support includes OKX Wallet, NFT Marketplace, OKX Chain, etc. OKX Ventures leverages the accumulation of OKX's many years of deep cultivation in the industry to provide multi-dimensional platforms and support for project development.

Despite the less optimistic global macroeconomic environment and the continuous occurrence of black swan events, OKX Ventures focuses on the development of the industry itself rather than the so-called bull or bear market. We pay more attention to real theoretical innovation, realizable new applications, real user inflows, and the real growth of the entire industry. We are optimistic about the development of the Ethereum ecosystem, multi-chain ecosystem, Bitcoin ecosystem, infrastructure construction, and innovative applications in the coming months.

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