🦄 Recap: DeFi Week of March 13
Hello Defiers! Happy weekend!
The Apes conquered DeFi this week. Wow. We’ve been covering how NFTs have defied the undertow pulling the crypto market into a bear market all year. But if there any skeptics still out there they only needed to check out the market action on Thursday and Friday as Bored Ape Yacht Club released its Ape coin. Owen Fernau reported on how investors piled into BAYC NFTs to claim the token, sharply raising its floor price. Check out his story to see what happened next.
We also heard from one of the most enigmatic figures in DeFi. Sifu, the co-founder of Wonderland who was ousted when his past record emerged, told yyctrader all about his new venture in an exclusive interview. The highlight: Sifu is starting an investment fund that aims to raise $100M.
Meanwhile, Robin Schmidt and his crew trekked north, to Svalbard, the archipelago inside the Arctic Circle, for a special segment on the birth of crypto and the promise of DeFi. It’s a, ahem, heart-warming piece of video journalism on what makes our community click.
When it comes to the roots of DeFi, there are few projects as influential as MakerDAO. Lately, the innovator of DAI, the first decentralized stablecoin, has been struggling to strengthen its dwindling surplus fund and stoke more value in its native token. Sam Haig does a deep dive on a new proposal that aims to solve Maker’s problems with a bold move to bring in real world assets and offer equity to investors and venture capitalists alike. Needless to say, it’s riled up all sorts of opinions in the Maker community.
And Defiant Chiefess Camila Russo spoke with Fabian Vogelsteller of ERC20 fame in this week’s podcast. Fabian was involved in Ethereum back in the origin days and he shares his thoughts on the ERC725 standard, which he calls a “seismic shift.”
Lots of great stuff. Enjoy!
Do you want to make a real difference in the Ukraine crisis? Until March 24th, if you donate to help improve the situation in Ukraine on Gitcoin your funds will be matched by a pool of over $700,000 using the power of quadratic funding.
In some cases, 1 DAI can be matched up to 50x, so even small amounts are meaningful. Peace is a global public good, and it's become increasingly clear that we have to work to collectively maintain it. For more details, check out http://gitcoin.co/grants and go to the "Support for Ukraine" category.
Public goods are good.
Gitcoin grants sustain web3 projects with quadratic funding
The open economy is taking over the old one. Subscribe to keep up with this revolution. Click here to pay with DAI (for $100/yr) or sub with fiat by clicking on the button below ($15/mo, $150/yr).
Verse Network by STP, is a Layer 2 for DAOs. Redefining value one DAO at a time.
Eden Rocket RPC, providing the fastest private transactions on Ethereum (90%+ hashrate). Trade better anywhere on Ethereum with Eden Rocket RPC.
Zerion is Mission Control for Web3: an intuitive DeFi portfolio manager, multichain tracking & trading and the best place to show off your NFT collection.
Unstoppable Domains, Unstoppable Domain is the #1 provider of NFT domains. One domain, the entire metaverse - your Unstoppable domain is all you need to verify your humanity and access sites and apps on the decentralized web. Get yours today!
⍺ DeFi Alpha Newsletter
Fabian Vogelsteller is a Blockchain veteran who was part of the Ethereum community in its very early days. He helped shape the Ethereum space, building an ETH Wallet and a web3 Browser, that were one of the first of their kind. Fabian is the co-founder of the Lukso blockchain and together with Vitalik Buterin, created the ERC-20 standard, a foundational building block for Ethereum.
The next standard Fabian is excited about is ERC725, which he says will help introduce blockchain-based profiles as opposed to accounts. Fabian believes this approach would be a seismic shift, improving usability and protecting users’ assets. We also talk about a web3 built on infrastructure that’s made up of proof of stake, sharding and zero-knowledge proofs, which Fabien believes will enable a more scalable and decentralized blockchain ecosystem. We chat about how sustainable this model is and how close we are to see it come to life and being used by the masses.
The Defiant Interview
In which yyctrader lands an interview with the controversial figure who didn’t take long to make his return to DeFi…
0xSifu is back, and he’s got a brand new bag. There’s been no shortage of drama around this enigmatic figure in DeFi. OxSifu, you’ll recall, is the pseudonymous Wonderland co-founder who was ousted from his position as treasury manager at the end of January after he was doxxed as Michael Patryn, a co-founder of defunct Canadian crypto exchange QuadrigaCX. That doomed enterprise folded in 2018 with hundreds of millions in investor losses.
As the Wonderland episode fades, OxSifu is now applying his treasury management skills to a new venture, Sifu’s Vision, which is an investment fund built around the SIFU token that he launched a month ago. About 1M tokens are available for sale at $100 apiece, implying a $100M raise if fully subscribed.
The project’s website is short on details, to say the least.
Project Considers Tapping Real World Assets and Equity Offer
In which Samuel Haig continues his stellar coverage of the drama at this OG DeFi project…
MakerDAO, the trailblazing DeFi lending and savings project, has reached a crossroads. Its token, MKR, is languishing. Rivals are challenging its position as the go-to decentralized stablecoin provider. And more worrisome, its dwindling surplus fund is raising fears that the platform might suffer heavy liquidations in a long bear market.
But help is on the way, maybe. On March 17, Hexonaut, a protocol engineer at MakerDAO, joined forces with colleagues and submitted a new governance proposal called “Aggressive Growth Strategy.” It’s urging Maker’s membership to consider a bevy of radical moves to rejuvenate the popular DeFi project, including tapping real world assets to shore up its surplus fund. The authors estimate that move will generate an additional $20M to $40M in annual revenues.
It’s striking to see that MakerDAO, a five-year-old OG in the DeFi movement, is considering cosying up to TradFi to stabilize its financial bedrock. The project remains a steadfast and sizable force in decentralzied finance, with a market cap of $1.8B and total value locked of $16B, according to DeFiLlama. But Hexonaut and the engineer’s fellow authors say the problem has become acute.
Guest columnist Ryan Berkun argues that regulation presents DAOs with an opportunity to organize and strengthen their systems.
More than $200M is currently locked in DeFi protocols, which indicates massive market potential given DeFi’s relatively recent rise. Regulators are paying attention and cracking down on centralized platforms offering DeFi services. BlockFi’s recent $100M settlement with the U.S. Securities and Exchange Commission and agreement to register its crypto lending product is a warning to all DeFi platforms of what’s to come.
Regulator enforcement is inevitable, as President Biden’s executive order last week made clear. Rather than resisting this certainty, DAOs (decentralized autonomous organizations) should welcome compliance as a strategic way to legitimize and grow DAO membership. Just look at the success of Syndicate DAO, which grew to encapsulate 10% of all DAOs in weeks. Why the rapid growth? Syndicate DAO provides users launching through their platform with all the legal documentation needed to set up investing groups compliantly.
DAOs may be disruptive, but that doesn’t mean they won’t thrive within legal boundaries. It’s time for DAO creators and lawmakers to redraw the lines. DAOs are self-governing entities: instead of relying on CEOs and CFOs to control organization funds, DAOs are enforced by blockchain-based smart contracts, the rules of which are determined by DAO member votes. Put simply, DAOs offer entrepreneurial groups a radically democratized way to run their organizations, whether they are investment companies, social groups, or artifact hunters.
Guest writer Tushar Aggarwal digs into a big challenges in DeFi.
Bitcoin and Ethereum, the two largest cryptocurrencies in terms of market cap, have led the nascent crypto sector to a valuation of $1.63T. Yet their Proof-of-Work (PoW) consensus mechanism carries fundamental issues.
For starters, Ethereum entails exorbitant fees for transactions that are relatively slow and very energy-intensive. Innovations like the Bitcoin Lightning Network and Ethereum 2.0 are trying to address the issues but it will take time. On the other hand, many blockchain networks have embraced the Proof-of-Stake (PoS) consensus mechanism to overcome the aforementioned challenges.
Replacing the energy-intensive PoW miners, PoS token holders stake (lock) their assets on-chain to help validate transactions and receive governance rights. Since decision-making and on-chain transaction settlements depend on proportional staking, PoS networks no longer require massive computational power.
How To Guides
This Defiant guide by contributing writer Arya Ghobadi is designed to help you navigate and use MetaMask, a crypto wallet and a gateway to blockchain apps.
MetaMask allows you to store cryptocurrencies and makes interaction with decentralized applications or DApps. Currently, Metamask has more than 21Musers. If you want to transfer Ethereum to your friend, you will need to set up a node and use your private key to sign and approve the transaction.
This contains an amount of coding and at some points, difficult to do if you have no knowledge in coding. MetaMask, similar to any crypto wallet, gives you the chance to do that with a simple click of a button. MetaMask is a software crypto wallet that comes as a browser extension. It also has a mobile application.The browser extension is available for:
It doesn’t matter what type of device you are using, this mobile application is available both for IOS and Android devices. MetaMask performs two main functions:
Learn About A Leading Crypto Lender in This DeFi Guide
Kurt Ivy walks you through the basics.
At the most basic level, Compound is an autonomous protocol that calculates interest rates using algorithms. It is permissionless, meaning anyone can access the tools provided at any time. There is no verification process and no user identification mechanism. This real-time interest rate calculation can be used for a variety of financial applications.
For individuals, Compound is primarily used as a cryptocurrency borrowing and lending protocol. Users can deposit one of the supported tokens into a shared pool at any time and receive interest. Or, after depositing their tokens, they can borrow a smaller amount of tokens and pay interest. The amount of interest is determined by the supply and demand of tokens deposited and borrowed in the pool.
To lend with this protocol, all you need to do is supply the cryptocurrency that you want to provide liquidity for. Lenders deposit tokens into a liquid fund. Once you do that, you will immediately start earning interest, which is controlled by the supply and demand of the currency.
When Lenders put their cryptocurrency in the market, they receive the native token of Compound called a “cToken.” The token value of the cToken is equivalent to the token that was placed in the liquid market. The value will increase as the interest on that cryptocurrency appreciates. The value of the cToken will also fluctuate with the value of the token in the market, of course.
Bored Ape’s Floor Price Seesaws as Investors Claim New Coin “F*ck doing expected things. Back to the lab.”
A Radical Proposal to Revive MakerDAO Roils Community MakerDAO, the trailblazing DeFi lending and savings project, has reached a crossroads.
Ether Bulls Ascendant as Anticipation Builds for The Merge MakerDAO, the trailblazing DeFi lending and savings project, has reached a crossroads.
Bored Apes Founders Reject Pitch Deck Plans “F*ck doing expected things. Back to the lab.” So tweeted the co-founder of Bored Apes Yacht Club (BAYC) who goes by Gordon Goner, just minutes after an article was published by The Block about the NFT collection’s parent company, Yuga Labs.
Aave Launches Souped Up V3 on Fantom and Avalanche Aave, DeFi’s largest money market by cross-chain TVL, has launched its new v3 protocol across six different networks. The upgrade promises faster load times and lower gas costs.
ConsenSys’ Lubin Confirms MetaMask Token in the Works Rumors of a token from MetaMask, ConsenSys’ popular Ethereum wallet, have long circulated in the crypto community. Now the token appears to be a reality though a potential airdrop remains unknown.
Crypto Investors Shrug Off Fed Rate Hike as Bitcoin and Ether Post Modest Gains This is what we call baking in the bad news. Crypto markets jumped modestly after the U.S. Federal Reserve raised its benchmark interest rate on Wednesday by 0.25%, a hike that was widely expected by investors and was apparently factored into token prices leading up to the decision.
Proposal Aims to Shake up MakerDAO’s Tokenomics and Light a Fire Under MKR Utility doesn’t always lead to value. That’s the hard lesson holders of MKR, the token of MakerDAO, have been learning in the past year. MKR has dropped 11% in the last 12 months even as DAI, the protocol’s stablecoin, has increased by a multiple of 3.5 times.
Ethereum’s Passes Major Test in Shift to Proof of Stake The Ethereum community has a lot to look forward to. On March 15, The Ethereum Foundation announced that The Merge was successfully completed on Kiln — the final merge testnet before the upgrade will be deployed on Ethereum’s public testnets.
ConsenSys Notches $7B Valuation Amid Flurry of Legal Challenges For the last few months the headlines around ConsenSys, the trailblazing blockchain lab and Ethereum dev shop, have smacked of controversy.
Degen Who Slammed Terra as ‘Ponzi’ Dares Founder to Bet $1M on LUNA — and He Did On March 14, ‘Sensei Algod’, a pseudonymous degen and investor who’s called Terra a ponzi scheme, made the project’s community an offer it shouldn’t refuse: a cool $1M if the price of LUNA is higher in 12 months.
Yuga Labs’ Acquisition of CryptoPunks’ IP Sends Bored Apes Soaring It’s not everyday that the hottest two projects in an explosive asset class merge. That’s what happened on March 11 when Yuga Labs, the company behind Bored Apes Yacht Club (BAYC), announced the acquisition of the intellectual property rights (IP) of CryptoPunks.
Crypto Balks At Bored Apes’ KYC Requirement In crypto, the land of the pseudonymous, dating back to the space’s masked founder Satoshi Nakamoto, asking for personal information is often considered a dealbreaker.
Thanking all the amazing Defiers for the support and love this week (and always)!
🧑💻 ✍️ Stories in The Defiant are written by Owen Fernau, Sanuel Haig 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.
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.