Dune Digest #023 – Weekly On‑Chain Highlights
August 14 2024 – The latest edition of Dune’s data‑driven newsletter spotlights a series of developments that underscore the accelerating convergence of DeFi, CeFi and traditional finance. From governance proposals that reshape revenue streams on Solana to the first credit rating ever granted to a stablecoin, the week’s on‑chain activity offers a clear view of where capital is flowing and where protocol economics are being re‑engineered.
1. Jito DAO pushes for 100 % fee capture through JIP‑24
On August 5, Jito Labs submitted proposal JIP‑24, which would redirect all fees generated by the Jito Block Engine and the newly launched Block Assembly Marketplace (BAM) to the Jito DAO treasury.
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Why it matters:
- The Block Assembly Marketplace introduces a “plugin” architecture that enables programmable block‑building on Solana, allowing third‑party sequencing logic to create additional revenue streams.
- By channeling the full fee share to the DAO, the proposal aligns the protocol’s income more tightly with holders of the JTO governance token, echoing a broader industry trend of consolidating on‑chain value under token‑based governance.
- Financial snapshot: As of August 14, the DAO has reported $20.3 M in cumulative revenue and $6.6 M in net income, with an annualized run‑rate of roughly $26 M, largely driven by Tip Router and JitoSOL fees. BAM’s live deployment is expected to augment this base beyond mere MEV rewards, positioning the DAO for a more diversified cash flow.
2. Aerodrome bridges Base to Coinbase, adds real‑world assets
August 8 marked a dual milestone for Aerodrome, the leading liquidity hub on Coinbase’s Base L2:
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Coinbase integration: A direct link now makes every asset, pool and launch on Base instantly reachable by more than 100 million Coinbase users, effectively lowering the barrier for retail participation in DeFi.
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Launch of $deJAAA: Aerodrome became the premier market for the $deJAAA token—a freely transferable real‑world asset from Centrifuge—signalling the arrival of institutional‑grade assets on Base.
- Scale metrics: The protocol now locks $1.43 B in total value locked, has processed $255 B in cumulative volume and generated $222.7 M in fees. The integration highlights the growing overlap between centralized exchange retail bases and on‑chain liquidity provision.
3. LayerZero proposes a $110 M acquisition of Stargate (STG)
The LayerZero Foundation announced a $110 million bid to acquire the entire Stargate token supply, valuing STG at $0.1675 per token. The move would dissolve the Stargate DAO and fold its operations under LayerZero’s governance.
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Protocol impact:
- Stargate currently processes over 55 M messages—about a third of LayerZero’s traffic—and handles $63.8 B in value transferred, accounting for more than half of LayerZero’s all‑time volume of $120.3 B.
- Post‑acquisition, veSTG holders would retain 50 % of protocol revenue for six months, after which excess earnings would feed ZRO buy‑backs.
- Strategic rationale: LayerZero argues the consolidation will eliminate product overlap, hasten the rollout of new features (e.g., stablecoin and omnichain‑fungible‑token hubs) and strengthen its institutional positioning. Critics caution that the price may undervalue Stargate’s unique yield model and the long‑term revenue share it grants to its community.
4. Ethena’s USDe supply doubles, deepens exposure to Aave & Pendle
In a rapid expansion, USDe—Ethena’s algorithmic stablecoin—saw its supply climb to $10.9 B within a month, propelled by a looping trade between Pendle and Aave.
- Mechanics: Pendle locks staked USDe (sUSDe) as fixed‑rate yield, while Aave leverages that exposure, creating a reflexive growth loop.
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On‑chain positioning: Roughly $6.4 B of Ethena‑related assets sit on Aave, split between principal tokens, USDe and its staked counterpart. This concentration marks Ethena as one of the largest stablecoin issuers, approaching “too‑big‑to‑fail” relevance.
- Risks highlighted: Chaos Labs flagged that a sharp unwind of these leveraged positions could stress Aave’s stablecoin markets, especially given the $580 M of USDe backing already deployed on the platform.
5. S&P Global Ratings assigns first stablecoin credit rating
For the first time, S&P Global Ratings evaluated a stablecoin system, awarding Sky Protocol’s USDS a B‑ rating with a stable outlook.
- Assessment criteria: The rating considered USDS and its interest‑bearing counterpart sUSDS, liquidity buffers in USDC and tokenised money‑market funds, low loan‑loss experience and governance risk.
- Financial standing: Sky now reports $8.59 B in total assets, a $90.5 M surplus buffer and annualised revenue exceeding $327 M. The rating positions USDS as a benchmark stablecoin within S&P’s global framework and outlines a pathway toward an investment‑grade rating, contingent on further decentralisation and risk mitigation.
The rating underscores growing recognition of on‑chain assets by traditional credit agencies, hinting at deeper integration between DeFi and regulated finance.
Analysis & Key Takeaways
| Theme | Insight |
|---|---|
| Revenue capture & governance | Jito’s JIP‑24 reflects a shift toward routing protocol fees directly to token holders, mirroring trends in other ecosystems where governance tokens become the primary claim on economic upside. |
| Retail‑to‑DeFi bridge | Aerodrome’s Coinbase integration demonstrates that large CeFi platforms are now actively funneling retail users into L2 liquidity pools, expanding the addressable market for on‑chain services. |
| Consolidation in bridging | LayerZero’s proposed acquisition of Stargate is a clear signal that the bridging layer is moving toward fewer, larger players, potentially reducing fragmentation but raising questions about competitive pricing and decentralisation. |
| Complex yield loops | Ethena’s explosive growth, powered by a Pendle‑Aave feedback mechanism, showcases how composability can amplify capital deployment—but also how tightly coupled exposures can create systemic risk. |
| Traditional finance endorsement | The S&P rating for USDS marks a milestone for stablecoins, offering a familiar risk‑assessment framework to institutional investors and likely encouraging further capital inflows. |
Strategic Outlook
- DAO‑centric economics are likely to become a default model for emergent protocols seeking to align incentives and attract token‑based capital.
- Cross‑platform integrations (e.g., Base‑Coinbase) will continue to lower friction for retail participation, potentially driving a surge in TVL across L2s that are well‑connected to major custodial services.
- M&A activity in the bridging space may accelerate as projects look to secure market share and streamline product roadmaps, but governance and tokenomics will be scrutinised for fairness and long‑term sustainability.
- Risk management frameworks will become more critical as sophisticated yield strategies intertwine with major lending platforms. Expect to see more on‑chain risk dashboards and possibly third‑party audit standards emerging.
- Credit rating adoption could expand to other stablecoins and DeFi protocols, paving the way for broader institutional participation under familiar regulatory regimes.
The information presented is for educational purposes only and does not constitute financial advice. Readers should perform their own due diligence before making any investment decisions.
Data sources: Dune Analytics dashboards, on‑chain explorer metrics, public announcements from Jito Labs, Aerodrome, LayerZero, Ethena, Sky Protocol and S&P Global Ratings.
Source: https://dune.com/blog/dune-digest-23
