🦄 Recap: DeFi Week of Nov 1
Hello Defiers! Happy weekend!
Governance. A sobering and vital function in DeFi. It was a major theme this week with Aave, the DeFi lending giant, poised to vote on ushering in its V3. Sam Haig reported how Stellar became the first Layer 1 to incorporate an AMM in its platform. Brady Dale delved into how the governance at Curve, the biggest DeFi project, is being shaped by its symbiosis with Convex. It’s a deeply researched piece on the mechanics of new operating structures in DeFi, and one that epitomizes The Defiant’s coverage of the space.
Our writers and contributors also explored the cultural side of DeFi with some eye-opening dispatches. Brady caught up with The Worm in Times Square and learned how the sharing of its “travelling NFT” is stoking a community of like-minded souls. David Liebowitz, meantime, showed off his new tattoo and described how Ink DAO is embracing the punk vibe in NFTs and creating a community of its own. In this week’s podcast, Camila Russo had a fascinating conversation with Eric Wall, the chief investment officer at Arcane Assets, that touched on his conversion from a Bitcoin maximalist to an aficionado of myriad DeFi projects.
No surprise, there was also plenty of buzz this week about the metaverse. We saw a couple $100M deals announced, including one featuring all-star investors Marc Andreessen and the Winklevoss twins. A Web3 gaming deal came in on Friday led by Solana and FTX. Even as big names amassed war chests, there was action on the trading front, with the biggest NFT-backed loan hitting the market on NFTfi. Owen Fernau reported on the surging NFT lending market and how $1M-plus loans on 30 day terms are picking up serious mojo.
The Defiant also featured loads of thought-provoking research this week. DappRadar weighed in with a must-read primer on Axie Infinity and what comes next in the play-to-earn world (by Friday we saw how Axie had attracted $115M to its new AMM). IntoTheBlock weighed in with an incisive look at MakerDAO upgrade and strengthening links with Aave.
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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.
We’re excited. We’re getting ready to launch The Defiant Terminal, a platform for investors and analysts to track all DeFi data in one place. Join the waitlist today to be notified as soon as it’s live. You’ll want to be the first to get your eyes on that alpha.
In this week’s episode Camila Russo speaks with Eric Wall, chief investment officer at Arcane Assets. Eric has many claims to fame. One is the now renowned Bitcoin rainbow chart which overlays the color scheme over the bitcoin price in a way that would imply it helps predict future prices. But that’s exactly what he wanted to debunk. After diving into the math and statistics of technical analysis he has become resolutely against it as an investment tool.
His other claim to fame is that he used to be known as the Altcoin Slayer, thanks to his brutal takedowns of non-bitcoin tokens in the 2017 ICO era, which made him popular among Bitcoin maximalists. But he’s not a maximalist anymore, and sees value in other blockchains as he has recognized they can fulfill use cases that Bitcoin can’t. He even argues Bitcoin risks being overtaken by Ethereum if it doesn’t adopt some ETH’s own features and developments, such as a fee-burning mechanism and a more expressive scripting language.
🎙 Eric Wall of Arcane Assets: "Bitcoiners Protect BTC Against 'Shitcoinism' But They're Also Keeping it From Valid Technical Ideas":
📬 Inbox Dump #31
Hello Defiers! Welcome to Inbox Dump where we include the updates and announcements that flood our DMs each week and didn’t make it to The Defiant’s content platforms. Sometimes announcements here didn’t meet the bar to become a news story, sometimes they may have slipped through the cracks, or they came late and we haven’t had a chance to cover.
At The Defiant we cover the most important DeFi-related news and developments but we know many of you are hunting for projects before they are fully developed and before they are newsworthy. Our goal with this installment of the newsletter is to help you find them. Look at this as the starting point to DYOR.
We also include a compilation of DeFi and crypto funding rounds in the past week so you have these in one handy place.
Keep in mind these have been unedited. With that —here we go!
[This post is exclusive to subscribers]
In which David Liebowitz, the head of growth at Gelato, falls in love with a ‘silly idea’ and winds up with ink on his skin and a new community.
As I pulled up to Zutto’s in Tribeca on the crisp autumn New York evening for the inaugural Ink DAO dinner, I couldn’t help but think about how absurd the entire occasion was. What started as a joke a little over a month ago has turned into a thriving group chat of 27 members all who have inked “ERC-721” someplace on their bodies, and a substantial percentage of people got it as their first tattoo.
At dinner, it was nice catching up with new friends that I knew by their cartoon profile pictures. All of us have our own stories and are at different places in our lives, yet we’ve bonded with one tattoo and were lucky enough to share a moment together IRL at a Japanese restaurant in Tribeca.
Ink DAO is still in its very early stages, but it’s quite obvious that we all feel like we are a part of something special.
Ink DAO is a living hive mind of individuals collectively writing a story together…
Ink DAO is a living hive mind of individuals collectively writing a story together. That’s how Diana Chen, whose shitpost on Twitter led to the inception of the group, describes the group. The story she speaks of is our subjective sliver of what we are experiencing in the massive real-life MMORPG currently referred to as the Metaverse that is being “played” right now by thousands of participants around the world.
In this Deep Dive, Brady Dale unpacks the extraordinary interdependency of Curve and Convex and reports how a new proposal could tighten the latter’s grip on the stablecoin giant’s governance forum.
Even fairly sophisticated DeFi watchers might be baffled why so many are so obsessed with Curve, the automated market maker known for trading stablecoins.
What’s so exciting about stablecoins after all? But the market gets it. Curve‘s token is up 50% over the last month. And Curve has become, crucially for what’s to follow, inextricably linked to another product built to work atop it: Convex Finance.
Convex’s CVX token is up roughly as much. Convex exists to help Curve liquidity providers maximize their returns, so the two products have always been symbiotic. But now they’ve grown so interdependent that the pair are poised to effectively merge, and to do so in such a way that no other team could ever disrupt Convex again.
“Our view with Convex and Curve, whoever controls this stuff essentially controls the liquidity of stablecoins,” said Sam Kazemian, founder of the algorithmic stablecoin protocol Frax Finance.
In this exclusive report, DappRadar takes an invaluable tour of state of play in blockchain gaming and explores what’s coming next on tokenomics and in-game monetization.
Generating income while playing a game sounds like a utopia for most of us. However, thanks to the play-to-earn movement, that scenario is not far from reality.
Since May 2021, blockchain-based games have enjoyed a significant amount of success. The number of accounts or wallets connected to blockchain games reached 754,000. When compared to Q2, the game-connected unique active wallets (UAW) increased in 25%, and an impressive 509% year-over-year. Even though the number of UAW is an on-chain metric that does not necessarily translate into users1, there is enough evidence that supports a growth in the demand.
It finally seems that people have started to realize the potential behind the combination of games with blockchain technologies. Especially with intriguing concepts like the metaverse gaining visibility across mainstream media. But what exactly is play-to-earn? What were the main drivers behind the surge of this latest trend in the game sector? And, where is the blockchain game industry heading?
Blockchain is one of the most disruptive technologies created in the last decades. It enables individuals to transact securely among peers without recurring to a third party, while also proving the ownership of the underlying asset. This technology has the potential to transform any industry if the use case is applied correctly. And it is no different with games.
On-Chain Markets Update by Juan Pellicer, IntoTheBlock
This week, IntoTheBlock explores new features from the big DeFi lending platform.
MakerDAO is back in the spotlight both for its new feature release as well as the surge of its token, MKR, by 24% in the last seven days. A proposal was passed this week to launch a new feature called Dai Direct Deposit Module (D3M).
This will allow Maker to directly interact with its secondary market by actively controlling the DAI supply according to its market demand. The effect will be better rates for its users and an increment in DAI supply. Such an increment will directly impact the MKR holders due to Maker auctions and token burns. We will show here some on-chain indicators about the current DAI growth and how the MKR holders are reacting.
Periods of high demand in DeFi produce high spikes in borrowing rates that negatively affect users that have to pay higher than expected costs over their loans. D3M will act over the main DAI lending market (Aave) by stabilizing its DAI interest rates. When the demand for it is high, DAI will be minted and supplied over Aave to decrease its interest rates. Conversely, if demand is low DAI liquidity will be removed from Aave in order to increase its interest rate.
In its latest dispatch, Global Digital Finance lays out how the crypto climate change issue is more nuanced than many assume.
The extraordinary growth that we have seen in the crypto and digital asset sector throughout this year has brought with it much attention from across media platforms, not all of which has been positive.
With the industry in the spotlight, our global community has a welcome opportunity to communicate the nuances of the crypto-energy consumption debate, as well as the broader social utility of digital assets. For our report, Digital Assets: Laying ESG Foundations, we asked the members of Global Digital Finance to contribute their insight and research to help deepen the wider understanding of the role of digital assets in building sustainable financial systems.
We were privileged to include the Cambridge Centre for Alternative Finance’s observations on Bitcoin’s carbon footprint. Michel Rauchs and Alexander Neumueller call for those on both sides of the debate to raise the level of public discourse: neither the argument that Bitcoin is a climate disaster, nor that it has no environmental impact, holds up well in the face of the available data.
In this provocative guest column, Derek Alia, the CEO of Futureswap, writes about how NFTs are increasingly trading like securities and enabling investors to express bullish and bearish views on specific pieces.
The NFT market is bizarre, brilliant, or both, depending on who you ask. One thing is for sure, the $10.7 billion in trading volume during Q3 is enough loot to make ignoring NFTs futile. NFTs are, like many things today, a polarizing subject. But now, NFT pessimists can put their money where their Tweet is and short that CryptoPunk they loathe so much.
It was not so long ago that NFT collectors could only buy, hold, and sell an NFT. Those were simpler times. Today, thanks partly to oracles, permissionless protocols, fractionalized NFTs, and the creativity of the commons, traders can short, go long, and use leverage via perpetual contracts.
Perpetuals are crypto-native derivative contracts similar to futures with no expiration date or settlement, allowing them to be held or traded for an indefinite amount of time. Essentially, this enables traders to get some skin in the game and lay financial claim to what they feel the true underlying value of a particular NFT is — all without owning it.
The DeFi market has captured the imagination of investors after multiplying in value 18 times in the last 12 months, reaching $244B in total value locked (TVL) on Nov. 1, according to DeFi Llama. Traditional investors are now seeing the immense opportunity that DeFi has to offer as well as the returns. But there is a lot of work to be done. The DeFi projects have to match the sophistication of traditional financial services in risk diversification and eradicate the red tape and bias toward the wealthy that has long plagued traditional finance (TradFi).
First off, DeFi is not just TradFi 2.0. There are core differences, which is one reason I stepped away from my TradFi job as the Head of FX & EM sales to set up Tranchess, a decentralized yield-enhancing protocol with varied risk-returns solutions. One key reason is that DeFi is truly liberating.
However, TradFi is not a system that welcomes or promotes innovation, at least not at the speed necessary for investors now. With its open and permissionless characteristics, DeFi is free of bias. Anyone who can get their brain around DeFi can jump in for lucrative returns. There is no emphasis on prioritizing the wealthy, and the barriers to entry are relatively low.
The Defiant Interview
One of the biggest challenges confronting the DeFi community is founding and managing new ventures. It’s uncharted territory, so for guidance we turned to Diane Dai, the cofounder of DODO, an automated market maker. She shares some sage advice on how to lead in DeFi.
The Defiant: Can you introduce yourself and explain your role?
Diane Dai: My name is Diane Dai. I’m the co-founder and Chief Marketing Officer at DODO, where I oversee marketing, branding, and growth. I also handle investor relations.
TD: Talk about your journey into leadership — what would you say was the biggest obstacle or most challenging skill to develop?
DD: While still a university student, I was fortunate enough to have acquired internship experience as a columnist at 36kr, an enterprise tech news site, where I learned about the power of proper storytelling. I also was a marketing intern at ZhenFund, a Beijing-based venture capital firm.
My ZhenFund experience was crucial, as it exposed me to the emerging world of crypto, both within mainland China and in the West. The collaborative and supportive culture at ZhenFund, which strongly encouraged young people to innovate and build, was a major inspiration for me. Following that, I moved to DDEX as a marketing associate and quickly rose through the ranks to become the Head of PR and Marketing.
The most challenging leadership skill to develop was an intuitive and nuanced understanding of cultural differences in media and crypto between Asia and elsewhere. In a global industry like crypto, deep cultural understanding is key to leading with empathy.
Aave V3 is About to Pass in Governance Vote All signs point towards lending giant Aave getting a V3 soon. Voting is now live on Snapshot, with well over 99.9% of the votes supporting the protocol releasing its next iteration.
There’s Already $115M on Axie Infinity’s New Automated Market Maker Axie Infinity has launched an automated market maker called Katana for its sidechain Ronin, and it had 25,000 people interact with it less than 10 hours into its existence, according to Jiho Zirlin, co-founder of the team that built the game.
Play-to-Earn Gaming’s Massive Growth Will Weather a Crypto Bear Market: Panel What will happen when a bear market hits blockchain gaming, a sector that hasn’t really seen a downturn before? The most obvious game to look at is the market leader, Axie Infinity, the game of teams of cute playable characters battling it out much like Pokemon.
Solana Powers Up Web3 Gaming Projects with $100M Funding Deal You know a new iteration of the Web is ready to take off when the gamers get on board. Web3 just picked up serious mojo with a $100M fundraising deal designed to build out the next generation of gaming apps and ventures.
NFT-backed Lending Market Surges with $1M-Plus Loans and 20% Interest Rates The NFT-backed loan market is off the hook. The latest sign? A $1.42M loan secured by Autoglyph #488, an NFT produced by CryptoPunks’ creators, Larva Labs, was approved on Oct. 28. It’s the largest NFT-backed loan ever, according to Stephen Young, the founder of NFTfi, the peer-to-peer lending protocol that facilitated the transaction.
Payments DEX Stellar First L1 to Offer Integrated Automated Market Making After years of exclusively maintaining an order book-based decentralized exchange, Stellar (XLM) has launched automated market-maker (AMM) functionality native to its protocol.
The Worm Wriggles Through Times Square Dispensing NFT Blessings (and Tokens) The next blessing of The Worm is coming, with a commemorative token raining down on the first Ethereans lucky enough to have been visited by the digital invertebrate.
DeFi Founders Debate Whether to Resist or Embrace Regulation Top DeFi founders and VCs engaged in a lively debate on how the sector should be regulated and do business with traditional institutions during a panel called Rise of Resistance at the LA Blockchain Summit on Nov. 3.
Own a .ETH Address? $ENS Tokens Are Headed Your Way in Major Airdrop ENS Domains, the protocol that issues and manages domain names on the Ethereum blockchain, has announced plans to issue a token and form a DAO to govern the future of the protocol.
DeFi Lending Hub Goldfinch Fuses NFTs and User IDs to Attract Wary Investors There’s been NFTs for original artworks, sports stars’ game highlights, and a wide variety of apes, penguins, and punks. Now Goldfinch is creating NFTs for a potentially more impactful purpose — establishing users’ identities to satisfy Know-Your-Customer requirements.
Gary Vaynerchuck Warns New York NFT Fans to Do Their Own Homework Serial entrepreneur Gary Vaynerchuck is completely sold on non-fungible tokens (NFTs) but he still sees the red flags.
Avalanche Joins Layer 1 Funding Boom with $200M War Chest for Devs Lots of Layer-1 blockchains have announced large developer funds to encourage more applications in their ecosystems. Avalanche is the latest.
Marc Andreessen and Winklevoss Twins Back Sfermion’s $100M NFT Fund As if NFTs needed any more buzz. An all-star lineup of angel investors and venture capitalists has plowed more than $100M into a fund raised by a firm called Sfermion.
Thanking all the amazing Defiers for the support and love this week (and always)!
The Defiant @DefiantNewsFacebook's Metaverse may not be ready yet, but you can explore the existing ones where so much is already going on🤯 In this #TuesdayTut, @IamSuperMassive takes you on a tour of @decentraland, the OG of Metaverses. Here's how you can get started👇 https://t.co/qk2K3UEQWv
🧑💻 ✍️ Stories in The Defiant are written by Brady Dale, Owen Fernau, Sanuel Haig, Bailey Reutzel, and yyctrader, and edited by Edward Robinson, Bailey Reutzel, 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.