🦄 Recap: DeFi Week of July 10
Hello Defiers! Happy weekend!
The drama continues… Yes, it was another week of fire and brimstone in crypto. Celsius finally threw in the towel and filed for bankruptcy protection. Aleks Gilbert, who’s been doing yeoman’s work covering the fall of Three Arrows Capital and Voyager Digital, reported on Celsius’ scramble to pay back debt.
Robin Schmidt and his crew also fired in with analysis and perspective on the fallout from the crash on our YouTube channel. It’s Robin at his mordant best!
Still, life goes on for other projects with less exposure to the falling fortunes of the marketplace. Jason Levin reported the wild tale of ritual sacrifices in NFT land as WZRDS implemented a “novel burn mechanism” for its NFT holders. Jason also wrote about Multicoin’s eye-opening $430M web3 fund.
Speaking of NFTs, check out yyctrader’s latest roundup on GameStop’s new NFT marketplace, OpenSea’s layoffs, and Art Blocks’ rebound.
Looking ahead to the brilliant moment when all this madness is behind us Camila Russo had a fascinating chat with Arthur Breitman, the co-founder of Tezos, in this week’s podcast. It’s a most-welcome look at the power of no-hype crypto.
While we’re getting back to basics, we’re delighted to have Rahul Nambiampurath writing a series of excellent primers on the building blocks of crypto. Rahul weighed in this week with pieces on DEXs, Ethereum, and Layer 1s and Layer 2s. Never hurts to get a refresher on DeFi!
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This week on the Defiant Podcast we speak to Arthur Breitman, the co-founder of Tezos. Created together with his wife Kathleen way back in 2014, Tezos mainnet was launched in 2018 as a proof of stake chain with smart contracts, a combo that has now become the industry standard. They were very much ahead of their time.
Yet, Tezos has been slower to pick up than other Layer 1s such as Ethereum & Solana. We discuss its upcoming upgrades and roadmap, and how Arthur sees a deeper DeFi and NFT ecosystem evolving on the network. He argues that with the hype and vanity metrics of the bull run fading away, Tezos approach of what he considers is more thoughtful building, will shine through.
We also talk about how this current bear market compare to previous ones, as Arthur has seen a fair share of volatility during his time in the space. We also talk about governance, as on-chain governance is a key difference between Tezos and other Layer 1s. Arthur dives into Tezos experience so far and how that can apply to DAOs.
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📺 The Defiant Weekly: Crypto Contagion: Mapping the fallout from $LUNA, 3AC, Celsius, Voyager and Blockfi
Aleksandar Gilbert reports on the latest twist in the Three Arrows saga…
Su Zhu, the co-founder of Three Arrows Capital, has accused the hedge fund’s liquidators of operating in bad faith, breaking a month-long silence during which his firm suffered a stunning fall from grace.
“Sadly, our good faith to cooperate with the Liquidators was met with baiting,” Zhu wrote. The tweet included screenshots of a pair of emails his attorney had sent liquidator Russell Crumpler of Teneo.
The last time Zhu tweeted or otherwise posted any public comments was on June 14, as rumors swirled that his $10B fund was insolvent. At the time, Su tweeted cryptically, “We are in the process of communicating with relevant parties and fully committed to working this out.” Who those parties were and what “this” was were left unsaid. But it didn’t take much time for people to figure it out.
Jason Levin reports on the bold move to take web3 mobile…
To go mainstream, Web3 needs to go mobile — at least that’s how the argument goes. Like phones and laptops going mobile before it, web3 teams are making serious bets that mobile is the future of the industry.
Solana is going forward with a Solana-native smartphone called Saga while HTC has released a phone designed for a VR metaverse. A team of developers quietly released an Ethereum-based operating system, and Polygon is partnering with a mobile phone startup called Nothing to release the Nothing Phone (1).
As of 2019, it was forecast that over 2 billion people accessed the internet via their smartphones alone. The World Advertising Research Center (WARC) has predicted that 72.6% of internet users or nearly 3.7 billion people will access the web via smartphones by 2025.
OpenSea Makes Job Cuts and Art Blocks Rebounds
When GameStop said that it would launch an NFT marketplace earlier this year, many in the web3 community were sceptical of the meme stonk retailer’s plans.
Yet, in just two days since going live, GameStop’s NFT marketplace has seen more sales activity than the much-vaunted Coinbase NFT has managed in the two months since it launched.
The top 50 collections have generated over 3,500 ETH ($4M) in sales volumes, according to the website. The action is dominated by the MetaBoy collection, which accounts for just under a third of the total volume.
How to Use Simulations, Benchmarks and other Methods to Weather the Selloff
Guest writer Jordan Kruger lays out a detailed and thorough plan for navigating a challenging cycle…
It’s no secret that the recent retrenchment in the crypto market has left many — even industry veterans — in a state of shock. In 2022, the term “DeFi Summer” is earning a connotation that is 180 degrees out-of-phase from the heady days that inspired the term just two years ago.
This means that the entire cryptocurrency sector is undergoing stress testing at levels unseen since the COVID-driven crash in March 2020, a time before most DeFi protocols existed. Cascading liquidations continue to crater major crypto assets, with many overleveraged and underwater.
Much of DeFi was built out during the DeFi Summer of 2020 and, therefore, the sector was saddled with many inaccurate, underlying assumptions. So what can we learn from the current environment and what does it take to build sustainable DeFi services?
As the smart contract wars heat up, Layer 1 vs. Layer 2 blockchains are differentiating. From Proof-of-Work to Proof-of-Stake blockchains, each has its own way to scale to accommodate transaction volume.
All computer networks rely on bandwidth to relay data, including blockchain networks. However, the latter are more susceptible to a bandwidth scaling problem than highly centralized networks:
What Is the Blockchain Scalability Problem?
Blockchain networks are decentralized, composed of nodes (computers in a network holding the entire ledger). This means that each node has to exert considerable computing, bandwidth, and storage resources to provide and maintain access to the ledger.
The more decentralized a blockchain is, the more nodes it will have. While this redundancy is great for the network’s security, it is not good for its speed. That’s because more nodes are contributing to transaction verification.
This balancing act between security, decentralization, and scalability is known as the Blockchain Trilemma. Simply put, if a blockchain network is highly centralized, it is less secure and more scalable. The low node count would make transactions faster because the computing power would be less distributed.
DeFiance Founder Had ‘No Visibility’ on Three Arrows’ Condition: Statement DeFiance Capital said it has been “materially affected” by the liquidation of Three Arrows Capital in a statement released Friday. The investment firm sought to distance founder Arthur Cheong from the failed $10B crypto hedge fund.
What Is a DEX? Decentralized exchanges (DEXs) are the cornerstone application of smart contracts and blockchain technology. While Bitcoin popularized blockchain, Ethereum popularized smart contracts by tying them to a web interface and delivering dApps.
StarkNet Testers Fume After Token AnnouncementCrypto Lender StarkWare, the company behind Ethereum layer-2 scaling solution StarkNet, plans to launch a native token designed to decentralize control and maintenance of the network.
Celsius Files for Bankruptcy Protection Celsius, the crypto lender that last month halted withdrawals, has filed for Chapter 11 bankruptcy protection, the company said in a press release. User withdrawals will remain halted.
Multicoin Raises New $430M Web3 Fund Despite the bear market, venture capitalists are still raising money and looking to deploy capital. On July 12, crypto venture capital fund Multicoin Capital said it has raised $430M to invest anywhere between $500K-$25M in early-stage opportunities and up to $100M in mature projects.
What Is Ethereum? When Bitcoin first launched in January 2009, it was effectively valueless. In fact, it took two years for Bitcoin to reach $1. It took many subsequent years for the cryptocurrency to popularize the concept of blockchain assets, paving the way for other types of blockchain networks.
WZRDS Project Punishes Flippers By Burning Listed NFTS Ritual sacrifices are being carried out on the blockchain. An NFT collection called WZRDS has implemented a novel burn mechanism that allows NFT holders to vote to burn WZRDS NFTs listed below a certain price.
Soaring Inflation Wallops Crypto and Stocks as Investors Gird for Rate Hikes Consumer prices in the United States rose a scorching 9.1% in June, according to data released by the Bureau of Labor Statistics at 830am ET.
Celsius Withdraws $400M Worth of Staked Ether from Aave Celsius Network withdrew more than $400M in staked Ether from Aave on Tuesday as it continues to settle outstanding loans on DeFi protocols.
Celsius Continues To Rapidly Repay DeFi Loans Embattled crypto lender Celsius Network is aggressively paying down its DeFi debts as user withdrawals remain suspended.
Phishing Villain Targets Uniswap Users with Airdrop Grift “Our threat intel detected a potential exploit on Uniswap V3 on the ETH blockchain…” tweeted Binance founder Changpeng Zhao (CZ) on Monday evening. The news spread like wildfire across Twitter and Discord.
Thanking all the amazing Defiers for the support and love this week (and always)!
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🧑💻 ✍️ Stories in The Defiant are written by Owen Fernau, Aleksandar Gilbert, Claire Gu, Samuel Haig, Jason Levin, and yyctrader, and edited by Edward Robinson, yyctrader and Camila Russo. Videos were produced by Robin Schmidt and Alp Gasimov. Podcast was led by Camila, edited by Alp.
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