4-6 Gas Surge

L2s Lead Gas Surge, LendFlare Yields, & Maple’s
Loan Growth
Free · APR 6TH, 2022
Joo Kian Jimin
Duncan Reucassel
Delphi L1 / Maple
Ethereum Uncollateralized Lending
Daily L2 Finance
DISCLOSURE: DELPHI VENTURES HAS INVESTED IN RON, AXS, ETH, OFFCHAIN

LABS (ARBITRUM). MEMBERS OF OUR TEAM ALSO HOLD YFI AND AAVE. 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.
Chart of The Day: Gas Spend Surges in March on L2 Activity
Layer-2 rollups post all their transactional data to L1s. This allows L2s to
inherit the security of the L1 it settles on.
In March 2022, L2s settling to Ethereum hit a new monthly high in terms of
gas spent, surpassing 35B. (Note: gas expenditures are not to be confused
with gwei, or the price of gas in ETH.)
The surge in gas spent was propelled by activity from several L2s. The main
contributors were:
Arbitrum, the largest contributor to L2 gas settlements, saw
transactions start to trend upwards, likely due to the attention from
TreasureDAO and Stargate.
Metis also played a significant part as the launch of Hermes Protocol
(a Solidly Fork) attracted yield farmers over to Metis, which was not
surprising given that Solidly had a great launch in Fantom. ImmutableX
started spending more gas as activity re-ignited. The activity will
likely remain high if transactional volumes on IMX continue to soar.
IMX now has the 2nd largest daily transactions of NFTs by Chain.
As Ethereum remains one of the most secure and decentralized L1s, we

can expect continuous development by L2s to utilize its security.
For more detail, read our Delphi Pro report about L1s vs L2s.
Airdrops, Boosted Stablecoin Farm, Lending Market & NFT Staking
[Excerpt from our Apr. 6 Yield Insights]
LendFlare allows Curve investors to borrow against their LPs for a certain
amount of period with a fixed borrow rate and no concerns for assets being
liquidated due to price fluctuations. Curve LPs will not be lent out again but
reinvested in Convex to ensure the maximum profit and give all back to
borrowers. Investors who supplied loan liquidity will gain one of the highest
supplied interest rates compared to current lending platforms. Learn more
about it here.
Yield calculations can be found here. To access Ethereum, you’ll need to
configure your MetaMask to run Ethereum’s Mainnet.
Bridge: You can use Synapse Protocol to bridge assets over to Ethereum.
Ethereum uses ETH for gas.
Tokenomics: Out of a total of 3.03 Billion LFT tokens:
62% for liquidity providers
15% for IDO participants which can be claimed instantly
15% to permanently bootstrap Uniswap liquidity
3% for the team, vested over two years
4% for the community, vested over four years
1% for an airdrop which can be claimed instantly
Emissions: The initial mining rate is about 0.7 million LFT per day. At the end
of each year, the mining rate is lowered. The initial allocation ratio is set by
the team and then changed by community proposals. The allocation ratio
depends on the pool gauge weight.
VeLFT: The longer the user locks LFT tokens, the more VeLFT tokens the
user receives. The VeLFT tokens are not transferrable. The locking
procedure depends on a number of factors:
Holders receive 50% of loan interests on the platform and boost your LFT
rewards up to 2.5X
Holders can create their own proposals and vote.
VeLFT automatically boosts LFT earnings. LFT boosting depends on the total
number of VeLFTs and the total current pool liquidity.
The Race to Build a “Sticky” DeFi Debt Market
[Excerpt from Delphi Pro Report]

Undercollateralized lending makes up less than 5% of the $50B in total
value locked across crypto money markets. In traditional finance, the vast
majority of credit is extended in an uncollateralized or under-collateralized
fashion, allowing companies and individuals access to efficient debt
financing. The lack of infrastructure surrounding these loans has acted as a
massive bottleneck within the crypto economy. Maple Finance provides a
solution via under-collateralized loans to approved borrowers while taking
advantage of the composability and efficiency of public blockchains.
Apart from protocol growth, Maple’s token (MPL) has had a fantastic start to
2022, significantly outperforming competitors and the broader lending
market.
This out-performance from Maple can be attributed to its improving
fundamentals versus other lending protocols. One metric we can use to
illustrate this is comparing TVL between platforms. In this case, TVL makes
sense as it directly relates to the number of loans these platforms can
support and thus revenue that can be generated.
Maple’s loans outstanding have grown over 70% in 2022 with its utilization
hovering above 90%. This high utilization rate versus TrueFi can be
attributed to the caps that Maple has on its lending pools alongside the 90-
day lock-up period. By doing this, Maple can reduce the amount of capital
that is idly collecting yield while providing limited value to the protocol.
A potential problem for both Maple and TrueFi is the fact that lending yields
are currently greater than borrowing costs, which opens up potential
exploitation. This is a result of the cumulative lending yield consisting of
organic yield and a token subsidy. Users could effectively borrow from the
protocol and then lend to themselves, thus pocketing the token incentivized
spread. Maple is in the process of mitigating this by slimming down or
removing token incentives for lenders.
TrueFi has also recently launched its lending marketplace, which is very
similar to Maple Finance’s current design.
For more, you can see our latest Delphi Report on Maple Finance here.
Notable Tweets
Sky Mavis Raises $150m to Restore Ronin Bridge Funds
1/ We’ve raised a 150 million USD funding round led by Binance.
The round combined with Sky Mavis balance sheet funds, will be
used to ensure that all users affected by the Ronin Validator Hack will
be reimbursed.
https://t.co/oViPv4QrZ9
—Axie Infinity (@AxieInfinity) April 6, 2022
Tokenized Vault ERC-4626
You’ve heard of ERC-20s, ERC-721s and ERC-1155s
Soon you shall know ERC-4626s
The Tokenized Vault Standard (ERC-4626) is final. And the Great Vault
Standardization begins now
tl;dr
—yearn.finance (@iearnfinance) April 6, 2022
Interest Compounding ETH
Introducing $icETH
The Interest Compounding ETH Index
— Index Coop | eth(@indexcoop) April 6, 2022
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L2s Lead Gas Surge, LendFlare Yields, & Maple’s

Joo Kian Jimin

DISCLOSURE: DELPHI VENTURES HAS INVESTED IN RON, AXS, ETH, OFFCHAIN

As Ethereum remains one of the most secure and decentralized L1s, we

[Excerpt from our Apr. 6 Yield Insights]

The Race to Build a “Sticky” DeFi Debt Market

[Excerpt from Delphi Pro Report]

Sky Mavis Raises $150m to Restore Ronin Bridge Funds

1/ We’ve raised a 150 million USD funding round led by Binance.

—Axie Infinity (@AxieInfinity) April 6, 2022

Tokenized Vault ERC-4626

You’ve heard of ERC-20s, ERC-721s and ERC-1155s

Soon you shall know ERC-4626s

—yearn.finance (@iearnfinance) April 6, 2022

Interest Compounding ETH

The Interest Compounding ETH Index

— Index Coop | eth(@indexcoop) April 6, 2022

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