😱 Iron Finance: the Biggest One-Day Implosion in DeFi History Explained
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TLDR In a month, Iron Finance has gone from being the darling of yield farmers to one of the biggest crashes in DeFi history.
BY THE NUMBERS The partially collateralized stablecoin project expanded to the Polygon network on May 18 and quickly became the go-to protocol for earning insane yields –– it even received praise from Mark Cuban. The intoxicating combination of truly degen yields soaring into the billions (yes, billions with a B) and cheap transaction fees resulted in an ape frenzy for the ages:
Total Value Locked (TVL) peaked at over $3 billion on June 15
TITAN, the protocol’s collateral token, rose over 100x since its launch to $64
At its peak, the protocol was paying out more than $45 million in TITAN rewards per day!
RUNNING FOR THE EXIT But the party didn’t last long. On June 16, a few large sales kicked off a stampede for the exits, sending TITAN from $62 to nearly zero in just 16 hours.
So how did things go so wrong so quickly?
Kyber Partners with Polygon and Launches ‘Rainmaker’ Liquidity Mining Program
Kyber Network, a hub of liquidity protocols catered to different DeFi use cases, is expanding to the Polygon network on June 30 and launching ‘Rainmaker’.
Kyber DMM (Dynamic Market Maker) is a new liquidity protocol added to Kyber 3.0’s liquidity hub and a next-generation AMM designed to maximize the utilization of capital by enabling extremely high capital efficiency and flexibility for liquidity providers.
Beginning June 30, the Rainmaker liquidity mining program will distribute an estimated total of $30M in rewards over the course of 3 months to eligible Kyber DMM liquidity providers (LPs). Rainmaker aims to incentivize liquidity providers and developers to use Kyber DMM and enhance liquidity for both the Polygon and Ethereum DeFi ecosystems.
Liquidity providers will receive DMM LP tokens (representing their liquidity pool share) which they can stake in the eligible liquidity mining pools to earn additional KNC or MATIC rewards on top of protocol fees during the program period. The reward amount will be dependent on their share of the total staked DMM LP tokens in the pool.
TLDR In the wake of Alchemix’s troubled alETH release, Curve Finance has produced two governance proposals targeting tangential products of the automated loan repayment protocol. There’s also been a flurry of chatter about possible legal action as the dustup accelerates.
LIQUIDITY The first target — Curve’s own alUSD pool. Charlie Watkins, project lead at Curve, proposed removing the alUSD gauge. This would mean that liquidity providers in the alUSD pool would no longer receive Curve’s CRV rewards, which spur liquidity provisions.
SO WHAT The thinking is that Alchemix is essentially propping up alUSD by selling CRV tokens. Achemix uses Yearn Finance’s DAI vault to sell CRV rewards. This generates the yield, which in turn pays off users’ alUSD loans.
TLDR Rival fandoms abound in pop culture. Marvel vs DC Comics. Pokemon vs. Digimon. So it was only a matter of time before NFT artists and fans divided into two camps.
ETHOS Enter Bored Ape Yacht Club vs. Meebits, two projects that embody the contrasting creeds within the NFT movement, perhaps fated to become natural adversaries.
TWO MODELS Meebits represents the influence of early adopters, the latest from the powerhouse Larva Labs whose pixel art CryptoPunks have headlined sales at elite auction houses like Sotheby’s and Christie’s. Bored Apes is the underdog. A collection of 10,000 unique NFTs, it’s a more grassroots project that espouses fair access for buyers, and doesn’t truck with the velvet rope approach of its rival. And in the early innings of the contest, it looks like the apes might have the edge.
OPPOSITES “Punks/Meebits are an elitist crowd,” said an OG NFT collector who has owned Punks since 2018 and is now a member of the Bored Ape Discord. “Apes are the complete opposite.”
TLDR Unsecured loans, long a missing piece in the DeFi puzzle, may finally be coming to open finance. Goldfinch, a DeFi platform that specializes in making no-collateral loans, announced an $11M raise from the likes of Andreessen Horowitz, DeFi Alliance, and other investors.
THE NEWS Goldfinch enables borrowers to garner access to unsecured loans without having to go to traditional banks. Invoking financial inclusion as a prime goal, the platform is betting its proposition will find traction in emerging markets as well as lower-income households in advanced economies frozen out of the banking system.
PROMISE “Mike and I are really excited to bring crypto to the real world,” Blake West, co-founder of Goldfinch, told The Defiant. “We want to fulfill the promise of crypto to expand access of capital and financial inclusion.” Mike Sal is Goldfinch’s second co-founder. Both West and Sal worked together at Coinbase.
NEWS DeFi infrastructure protocol InstaDapp has launched its governance token, INST, on Ethereum Mainnet.
SO WHAT INST holders will be able to discuss and vote on all future InstaDapp protocol upgrades. InstaDapp has minted 100M INST, allocating 55% for community members and the other 45% for team members, investors, and advisors.
TLDR Here comes Hollywood. In the latest sign that global media groups are embracing NFTs, Disney’s Fox Entertainment is launching a $100M creator fund to produce new offerings on blockchain platforms and NFT-related content, the company announced this week.
PLAYERS Dubbed Blockchain Creative Labs, the Los Angeles-based venture is a partnership between Fox Entertainment and its in-house animation studio, Bento Box Entertainment.
WHAT’S NEW Blockchain Creative Labs’ first project is set to be the upcoming animated comedy series “Krapopolis,” helmed by Rick & Morty co-creator Dan Harmon. Fox is billing Krapopolis as “the first-ever animated series curated entirely on the Blockchain,” with plans to launch a digital marketplace for Krapopolis products ranging from NFTs of one-of-a-kind characters to background art to GIFs. Superfans could also buy tokens to experience exclusive events, and to engage with performers and artists behind the scenes.
“Grupo Cinco, which describes itself as Paraguay’s largest entertainment company, will start accepting cryptocurrencies including bitcoin (BTC, -3.94%) in July. The company plans to accept ether (ETH, -4.99%), shiba inu and chiliz alongside the first cryptocurrency as forms of payment at its 24 outlets, which include nightclubs, restaurants and pubs, directors Santiago Sosa and Rodrigo Nogues Bazan told CoinDesk. “
“UMA is scaling to Polygon and laying the groundwork to support multiple Ethereum Virtual Machine (EVM) compatible scaling solutions. Over the past few weeks, the team has been hard at work putting together our scaling strategy, and we are taking the first step with Polygon.”
“Introduce a new Verkle state tree alongside the existing hexary Patricia tree. After the hard fork, the Verkle tree stores all edits to state and a copy of all accessed state, and the hexary Patricia tree can no longer be modified. This is a first step in a multi-phase transition to Ethereum exclusively relying on Verkle trees to store execution state.”
🧑💻 ✍️ Stories in this newsletter were written by Dan Kahan, Owen Fernau, and edited by Edward Robinson and Bailey Reutzel. 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).