🔥 Almost $1B Burned: A Month Into EIP-1559
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Special Research Report
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NEWS Two DeFi projects tasked with helping traders in the space hedge risk announced they are shutting down on Saturday.
TOKEN HOLDERS Cover, an insurance protocol, and Ruler, a debt market without liquidations, lost their developer team and determined that they could not continue, according to a blog post authored by a cofounder of both projects who goes by the online name of DeFi Ted. The projects pledged all treasury assets would return to token holders.
CORE “The decision to do this did not come easy and is a final decision the remaining team made after reviewing the path forward, after the core developers suddenly left the projects,” DeFi Ted wrote.
RULER As of Monday morning, DeFi Pulse shows a total value locked in the Cover Protocol of $836M dollars and $668,000in Ruler. The amount locked in Cover is relatively unchanged since Friday but Ruler is down considerably, from $2.7M. The Ruler token has fallen precipitously since Friday, from $11 to $0.75. The COVER token has fallen from $275 on Friday to $208 Monday morning.
TLDR It’s been a month, almost to the day, since Ethereum’s EIP-1559 upgrade went live, and the milestone was met with the first-ever deflationary day for ETH, where more of the cryptocurrency was burned than issued.
UPGRADE The upgrade promised more predictable gas fees, an improved user experience and the potential for a lower ETH inflation rate. Here, we take stock of the first 30 days of the “ultra-sound money” regime.
STELLAR ETH has enjoyed a stellar month, trading 35% higher at $3920 Monday afternoon New York time. Let’s dive into the numbers. Metamask, the most popular Ethereum browser wallet, was quick to add support for EIP-1559 transactions. However, hardware wallets such as those made by Ledger and Trezor are yet to enable EIP1559. Consequently, security-conscious DeFi users continue to utilize the old gas estimation system and only half of the transactions on the Ethereum network currently take advantage of EIP-1559, according to a Dune Analytics dashboard.
In this special research report, Momir Amidzic of IOSG Ventures analyzes how decentralized exchanges have defied their centralized rivals and demonstrated the value of using Ethereum-inspired blockchains to trade tokens. Now they are poised to bring the same efficiencies to other tradable assets. This primer is chock full of datapoints, definitions, and explanations of the forces at work in DEXes and will be a handy reference for all Defiers.
DOOMED Early on, many believed DEXes would stand no chance against CEX giants in terms of cryptocurrency trading. How in the world could simple constant product AMM replace the likes of Binance and Coinbase. Moreover, DEX is so expensive to use. Doomed to failure, right?
OUTPERFORM Wrong. Fast forward two years, DEXes are still inefficient relative to CEXes and trading is still expensive. Even so, few question the value of the AMM model and DEXs combined market cap is worth tens of billions of dollars with Uniswap alone being valued at $15B. The moral of the story: Many failed to see how DEXes can outperform CEXes.
DOUBT Still, even now we continue to see the same pattern of doubt. This time it’s all about derivative exchanges. Can DEXes compete with giants such as FTX? FTX, after all, has an amazing user experience, efficient and robust liquidation, and cross margin engines, it is available 24/7, provides fair and non-exclusive access to services (upon completing the KYC process) with extremely low cost for the users.
ADVANTAGES Indeed, centralized exchanges such as FTX will likely remain the most efficient derivatives venues in the medium term. But does that mean DEXes will have to become as efficient as FTX to get significant traction? This time we should avoid making the same wrong assumptions or underestimate the advantages of smart contract-based exchanges. What are those advantages?
El Salvador president Nayib Bukele confirmed Monday that his government has purchased its first 200 Bitcoin (BTC) ahead of the Sept. 7 rollout of a new law set to make the cryptocurrency legal tender.
Avanti Bank and Trust CEO Caitlin Long has posted a rebuttal to a recent New York Times article claiming that crypto and decentralized finance is “disrupting the banking industry” so fast regulators can’t keep up.
Does development of the core protocols that power the Ethereum blockchain excite you? Are you interested in getting involved at the most fundemental and technical levels of the Ethereum protocol? I am excited to announce that we are now accepting applications for the second cohort of the Core Developer Apprenticeship Program (CDAP)!
🔗 DeXe is Integrating Chainlink Price Feeds and Chainlink Keepers to Power Charts and Limit Swaps: Dexe Network
On the evening of 7 December 2010, in a hushed San Francisco auditorium, former Google engineer Patri Friedman sketched out the future of humanity. The event was hosted by the Thiel Foundation, established four years earlier by the arch-libertarian PayPal founder Peter Thiel to “defend and promote freedom in all its dimensions”.
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🧑💻 ✍️ Stories in this newsletter were written by Brady Dale, YYCtrader, and edited by Bailey Reutzel and Edward Robinson. Videos were produced by Robin Schmidt and Alp Gasimov. Podcast was led by Camila, edited by Alp.
The Defiant is a daily newsletter focusing on decentralized finance, a new financial system that’s being built on top of open blockchains. The space is evolving at breakneck speed and revolutionizing tech and money. Sign up to learn more and keep up on the latest, most interesting developments. Subscribers get full access, while free signups get only part of the content. Click here to pay with DAI (for $100/yr) or sub with fiat by clicking on the button above ($15/mo, $150/yr