🦄 Recap: DeFi Week of June 27
Hello Defiers! Happy Independence Day to those of you in the U.S., and salutations to everyone else as we head toward midsummer’s eve in the north, and midwinter’s day in the south. This week was loaded with a blast of strange news in DeFi, from Twitter jumping into bed with Rarible to the vice chair of the Federal Reserve embracing stablecoins as a perfectly viable alternative to digital USD. Then there was Coinbase and Compound pushing into that most venerable of TradFi businesses — the savings account. The cross-pollination of on-chain and off-chain models was a running theme all week, with new bank Current integrating with Compound for example, and one we expect to see intensify in the months to come.
The Defiant continued to blaze a trail through the rapidly morphing universe that is NFTs… Our Bailey Reutzel tackled an increasingly pertinent question: are NFTs the new ICOs? The digital art market has been out of control, but Bailey’s reporting found that avatars are the real game-changers… At the same time, contributing writer Masha Prusso walked us through why NFTs valuations are ebbing, and what that means for the evolution of the asset class. As ever, her clear-eyed analysis is must-reading for dabbling in the tokens.
In market news, Owen Fernau unpacked how Ethereum hash rates plunged to new lows amid the China mining squeeze. And Dan Kahan reported on the latest exploit to hit DeFi — SafeDollar’s hairy plunge to zero. Fast and furious indeed. Camila Russo spoke with Dan Robinson of Paradigm about how Uniswap’s new liquidity pool design will revolutionize DEXs all over again.
We also had a nourishing crop of research and tutorials: DeFi Dad explained how to farm 30% APRs with alETH by Alchemix, and Lucas Outumuro of IntoTheBlock wrote about Compound’s treasury and the coming symbiosis between DeFi and Fintech. We also had a fascinating dissection of the Iron Finance crash from Herbert Eng.
The Defiant was also delighted to introduce our collaboration with Global Digital Finance with a column on how traditional financial players are as sweet on DeFi as ever. See… that cross-pollination theme was strong this week!
And, of course, on Wednesday our editorial team was psyched to welcome our readers and other members of our community to The Defiant Ones, our debut community call. We rapped about a whole slew of topics, from the mysteries of the DAO to NFTs to the heavy vibe between the Grateful Dead and crypto (lookin’ at you Spinbackwards!). Lots going on and lots to more come :)
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🙌 Together with:
Kraken, consistently rated the best and most secure cryptocurrency exchange, which can get you from fiat to DeFi
Aave, an open-source and non-custodial liquidity protocol where users can earn interest on deposits and borrow assets.
Kyber DMM, an automated market maker which prioritizes permissionless liquidity contribution and high capital efficiency
"V3 is Winding Back a Bit of the Uniswap Revolution; It's Going to be Very Influential:" Dan Robinson
In this week’s episode we speak with Dan Robinson, a research partner at Paradigm, one of the most active VC funds in DeFi and crypto. One of the fund’s investments is Unsiwap, where Dan also had a central role in the design of v3, the latest version of DeFi’s most popular decentralized exchange. Dan talks about why Uniswap was so exciting as an investment, and about what drove the change to v3. He believes the new design will impact DeFi and crytpo, while rolling back the very revolution Uniswap itself prompted by creating a more hybrid model.
By Masha Prusso
In this week’s opinion piece Contributing Writer Masha Prusso unpacks the state of play in the volatile NFT market and finds some fascinating patterns signalling what happens next…
She explains how non-fungible tokens (NFTs) exploded into popular consciousness in the first half of 2021. In particular, the art world really began to take notice of this asset class, which allows for clear ownership of a unique virtual item.
Inbox Dump #15
For paid subscribers only — The Inbox Dump is where we include the updates and announcements that flood our DMs each week and didn’t make it to The Defiant’s content platforms. We also include a compilation of DeFi and crypto funding rounds in the past week so you have these in one handy place.
DeFi Rates are Sliding Closer to TradFi YieldsDeFi’s borrowing and lending rates are trending downwards, opening questions of what will happen to open finance if yields converge with those of traditional finance. Borrowing rates for USDC have declined to 2.5% and 3.1% on Compound and Aave, from over 15% three months ago, according to LoanScan.
Insane Money and a Hype-Drunk Market: Are NFTs the New ICOs? “If you have seven figures in JPEGs…” Deeze doesn’t have to finish the thought as he scrolls through his gallery of NFTs. The 27-year-old collector doesn’t have his camera on, but his profile photo is an NFT avatar with a hoodie and 3D glasses blowing bubbles from a pipe. It’s an aesthetic he searches for across NFT projects.
Twitter Drops 140 Free NFTs on Rarible Twitter is on Rarible. Yes, the gigantic social media platform. That Twitter. On June 30, the official Twitter account tweeted that it was giving away 140 free NFTs based on the platform’s aesthetic, brand and memes. These one-of-twenty edition NFTs included a furry Twitter bird, an overflowing bottle of blue Twitter vitamins, and a Twitter “reply guy” whose head is literally an egg (in reference to the dudes with Twitter’s default egg profile picture who “mansplain” in the comments).
Compound Treasury is the First Step in a Symbiotic DeFi-FinTech Relationship DeFi is gearing up for broader adoption. Currently most DeFi protocols are looking at layer 2 scaling solutions or a multi-chain approach to be able to make transactions more affordable and scalable. While this reduces new users’ barriers to entry in terms of cost, they still have to go through a steep learning curve to set up and be ready to use applications on layer 2. Having users skip this learning process altogether is a promising alternative to benefit both users and token holders. .
Coinbase and Compound Vow to Manage Risks in Crypto Savings Push Whopping interest rates on offer from crypto lending platforms have been a big story over the last several months. Now Coinbase and Compound, two giants in the space, are wading in with their own reinventions of an old banking staple — the savings account.
Federal Reserve Bigwig Defends Stablecoins as Alternative to Digital Dollars There’s nothing to be afraid of with stablecoins. That’s the main message Randal Quarles, the vice chair for supervision at the Federal Reserve and a member of its board, delivered on June 28, surprising a DeFi community that’s become inured to getting dissed by the financial establishment.
NFTX Aims to Spike Liquidity with New Release The second version of NFTX is designed to refine one of the core needs in the NFT market — liquidity. NFTX has long served as a liquidity hub for people who want to buy and sell the cheapest NFTs from any given collection (ie: the lowest-value Cryptopunks).
Defiant Degens: How to Farm Up to 30% APR with alETH by Alchemix Imagine if you could deposit your money in a savings account but then instantly capture the yield from the future and then turn around and spend it however you choose. Alchemix has captured all of the DeFi community’s attention the last three months for its creative use of money legos to enable borrowers to lock up collateral in an automated yield-earning strategy, while simultaneously borrowing an advance on their yield in the form of synthetic assets.
Not Just a Bank Run: New Evidence Shows Iron Finance Crashed Due to Code Exploit $2B of market value lost in even less time than what would be considered an “overnight disaster” will be recognized as one of DeFi’s darkest days. Now, the community is still looking for answers with some sleuthing about to identify any culprits. And some members are claiming they found a smoking gun.
SafeDollar Stablecoin Plummets to Zero After Exploit The value of SafeDollar (SDO), an algorithmic stablecoin intended to be pegged to $1, has dropped to zero after a $248K exploit on Polygon.
Hashrate Plummets to New Lows as China Squeezes Crypto Mining Just 40 days after Ethereum’s hashrate hit an all-time high, the key metric has plunged 17% in the last 10 days, according to data from Glassnode, a blockchain and intelligence provider. That’s the worst drop in a 10-day span in Ethereum’s history.
DeversiFi Unveils Governance Token The decentralized Ethereum exchange DeversiFi plans to launch a governance token called DVF. DVF will be distributed via an open and fair launch mechanism called DeversiFi Launch Market (DLM). The proceeds will be placed in a community-governed treasury.
Synthetix Founder Announces Return to “Save the Project” Kain Warwick, founder of derivatives liquidity protocol Synthetix, is back. The founder had previously stepped away from the protocol to take on a “more passive role,” but has now declared his intention to run for the Spartan Council, an eight-member governance DAO that votes on and manages changes to the protocol.
By Global Digital Finance Bitcoin-indexed products were launched on Euronext stock exchanges in Paris and Amsterdam at the beginning of June. Four investment firms, WisdomTree, VanEck, 21Shares, and ETC group, listed nine bitcoin and Ethereum ETPs.
Thanking all the amazing Defiers for the support and love this week (and always)!
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).