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🇰🇷Bitcoin's "Kimchi Premium" Just Blew Up Again
Hello Defiers! Here’s what we’re covering today,
Bitcoin’s “Kimchi premium” signals rising demand for the cryptocurrency in South Korea —and the same is happening with ETH and DeFi tokens
Single whale moves the needle on Compound TVL
C.R.E.A.M. Finance introduces cross-protocol flash loans
NEAR Rainbow Bridge to Ethereum is live
dYdX launches Layer 2 perpetuals powered by StarkWare
New DeFi 101: DeFi Aggregators
and more :)
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TLDR The so-called “Kimchi Premium,” the difference between Bitcoin’s price on South Korean exchanges versus the international price spiked to 23% before dropping to roughly 14% at the time of writing. This meant that BTC traded for almost $70K on Apr. 5 in South Korea, while the price was around $58K internationally.
CRACKING THE ARB The knife-like drop to a 14% premium, which is still historically high, is likely due to a party finally cracking the arbitrage code. Bithumb, one of South Korea’s largest exchanges, saw massive inflows to its Bitcoin wallets relative to average inflows in the past few days. It’s likely arbitrageurs purchased BTC and then sent it to Bithumb to be sold at the premium.
CAPITAL CONTROLS The premium comes from South Korean retail demand for Bitcoin combined with the country’s closed off exchanges and strict capital controls which make it difficult for South Koreans to exchange their currency for another.
BEYOND BITCOIN The South Korean premium on crypto assets extends beyond Bitcoin. ETH, UNI, and others show similar spikes, suggesting the South Koreans are not favoring one cryptocurrency in particular, but the sector as a whole.
TLDR Compound has been ahead of other DeFi protocols, with over $ 10 billion supplied since March. when users take out a loan. The recent rise in Compound’s deposits comes after a whale deposited over 629,000 Ether in a single transaction.
JUSTIN SUN The address has since been linked with Justin Sun and his deposit is expected to be earning him roughly $80,000 worth of COMP per day. The $1.2 billion invested by Justin Sun in the pool brought the total to over $5 billion.
As of April 7, 2021 using IntoTheBlock’s Compound Protocol insights
LOWER BORROWING COSTS Recall that borrow and lending rates are updated dynamically in protocols such as Compound based on demand and supply. In this case, the high influx of supply resulted in reduced earnings for other depositors, but also lower borrowing rates for Ether. Total amount of ETH borrowed quickly spiked as a result, but has since dropped.
TOTAL BORROWED Total amount borrowed from Compound has been growing steadily, reaching over $6 billion compared to Maker’s $3 billion and Aave’s $600 million. While the COMP rewards are certainly a factor in the growth in Compound loans, it is worth noting that borrowing rates for Maker have on average been lower even after accounting for farming earnings.
As of April 7, 2021 using IntoTheBlock’s lending insights
TLDR DeFi lending protocol C.R.E.A.M. Finance is launching a protocol-to-protocol flash loan product through its Iron Bank, with the aim to increase capital efficiency and expand the scope of decentralized finance.
“More assets than ever are now available for flash loans, and at cheaper rates than before,” Leo Cheng, Co-Founder and Project Lead at C.R.E.A.M. Finance, said in an interview.
TLDR The Rainbow Bridge, which connects the NEAR blockchain to Ethereum, is live. The Rainbow Bridge is a decentralized, permissionless bridge protocol built by NEAR Protocol that allows anyone to use an existing bridge or deploy a new bridge. With the Rainbow Bridge, users will now be able to move any ERC-20 token back and forth between NEAR and Ethereum.
TLDR dYdX launched its cross-margined perpetuals product on a Layer 2 scaling solution powered by blockchain software developer StarkWare.
VOLUME StarkWare co-founder and CEO Uri Kolodny said that within 24 hours, dYdX’s layer 2 Perpetuals protocol exceeded $10M in trading volume. During dYdX’s closed alpha period, which launched in February, the protocol moved $90M in trading volume across 25k trades.
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