🦄 Recap: DeFi Week of Nov. 28
Hello Defiers! Happy weekend!
On that latter point, check out Owen Fernau’s dispatch from the fledgling world of DeFi insurance and the fallout from the BadgerDAO hack. There was a kerfuffle in the NFT space, too. The CloneX NFT auction held by RTFKT Studios was fraught with attacks and criticism, and it still sold out. And Sam Haig reported on how Uniswap came under fire for sharing wallet addresses with a blockchain intelligence firm.
Speaking of Uniswap, Sam also reported that the drive to launch Layer 2 liquidity mining on the DeFi stalwart is picking up steam. Amid all that heat, DAOs themselves are also experiencing serious mojo — TVL in the group almost doubled in the fourth quarter, to $15B. For more on how DAOs are shaping up to be a massive story in 2022, see two opinion pieces we published this week: one on the organizations address the problem of aggregation in the culture, and the second on how DAOs are handling the thorny issues of compensation and contributions from members.
Meanwhile, Brady Dale caught up with the Loot project, the NFT/gaming/social networking endeavor that generated so much buzz this summer. Brady found the effort is quietly pursuing its quest to create a truly decentralized community. It’s a great read right in line with The Defiant’s own quest to capture the cultural side of DeFi. To that end, check out Brady’s fascinating interview with metaverse architect Untitled, XYZ, and Owen’s story on Seneca, the artist behind Bored Ape Yacht Club.
Back to airdrops, Camila Russo landed a scintillating podcast with Nick Johnson, the founder of the Ethereum Naming Service (ENS). You may recall its ground-shaking drop a few weeks ago. And Robin Schmidt and The Defiant video crew produced a stream of juicy episodes this week, including a segment on digital fashion and a tutorial on how to find undervalued NFTs.
Finally, you may have noticed that our appearance is changing. We’ve redesigned our website to showcase more stories, video, podcasts, and other content. We’re just getting started on taking The Defiant to the next level so stay tuned!
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In this week’s episode, Camilla Russo speaks with Nick Johnson, founder and lead developer of Ethereum Name Service, or ENS. Nick talks about the journey of ENS, from an internal project within the Ethereum Foundation, to spinning off to become a public good for Ethereum and other blockchains, and recently decentralizing and becoming a DAO controlled by token holders.
He goes into why a DAO was in the plans from the start of the project and what the transition was like to get to a point where it became safer for token holders to control the protocol, instead of a more centralized group of managers. Nick discusses ENS tokenomics, and the initial lessons after distributing the token about a month ago.
📬 Inbox Dump #34
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]
Is the Loot Project going to have a trajectory somewhat like Ethereum circa 2018? There are certainly parallels. Those outside of Loot are dismissing it right now, much the way the public became convinced that crypto was over after the ICO boom.
In both cases, though, after the attention went away, a lot of work was getting done. The trouble is, like Ethereum back then, even enthusiastic community members still aren’t totally sure what Loot is going to be good for.
Loot (for Adventures) was launched in late August by Vine co-founder Dom Hoffmann. It enabled Ethereum users to download a list of items in an NFT, LOOT, that would provide the basis of a game — some game. Then in September, Hoffman burnt the keys that would have allowed him to change the smart contract so that it truly had community control. Since then, he’s largely backed away.
At first, the NFT drop was extremely buzzy. The average sale price in early September was over $50,000. Daily volume peaked at the end of August at 6,027 ETH, and it remained higher than 1,000 ETH until Sept. 9, according to the Loot Ecosystem dashboard on Dune Analytics.
The Defiant Interview
How would building design change if architects didn’t have to think about them lasting for decades? Or if the structure and layout could change with a few mouseclicks?
That’s the opportunity architects can seize in the metaverse. Most architects would probably say that isn’t appealing at all, because they undertook the discipline to design structures people would experience for a very long time, but for Kirk Finkel, better known as Untitled, XYZ, a full time Web3 architect, it’s inspiring to work with virtual buildings that are iterative to a degree that can’t even be fathomed in the physical world.
“There’s a different relationship because it’s not there for 100 years,” he told The Defiant in a phone call from his analog space in Brooklyn. “The visual language of the building can change so quickly.”
In this guest column, Spencer Graham of DAOhaus explores a critical issue in the development of decentarlized autonomous organizations.
As we usher in a new era of work via DAOs, many projects face a similar challenge of determining a scalable formula for compensating their contributors. What works when there are only five core contributors may not work as the community grows, and the best way to measure and reward contributions in one DAO may not be right for another.
Many DAOs currently benefit from the flexibility they are able to offer their contributors. In contrast to traditional companies, individuals can move fluidly between DAOs, often contributing to multiple DAOs at the same time. While this flexibility is appealing to many contributors and is one of the factors that has enabled DAOs to attract top talent, it often leaves contributors to navigate multiple compensation structures. To continue bringing in new contributors, DAOs will need to develop compensation mechanisms that work well with other DAOs.
The problem of aggregation, where rational actions at the individual level lead to an irrational outcome at the collective level, is prevalent in macroeconomics and financial markets. A bank run is a classic example.
The solution in TradFi is often centralized agency in the form of (government) institutions, powered by a countervailing incentive structure. In regards to the example of a bank run, individuals are rationally motivated to withdraw their deposits in a mad dash for the exit, despite having this action exacerbating the effects at the collective level.
As a response to this problem of aggregation – the FDIC was instituted as a countervailing agency, incentivized by the need to provide stability to the banking system. Similarly, in the spring of 2020, the Federal Reserve was a neutralizing force against the rational behaviour of investors fleeing the market. The Fed’s agency is motivated by its mandate for macroeconomic stability.
Curve is now the largest DeFi protocol with $22B in Total Value Locked across seven blockchains. We’ve covered the Curve Wars extensively and the consensus among investors seems to be that Curve will consolidate and build on its position as the leader in stablecoin swaps. Convex Finance makes it possible for yield farmers to obtain boosted $CRV yields without locking any $CRV tokens themselves.
In this tutorial, we’re going to show you how to maximize your $CRV and $CVX earnings through leveraged yield farming on Abracadabra, a collateralized lending platform and issuer of the Magic Internet Money (MIM) stablecoin.
Whether you’re looking to build a position in $CRV and $CVX through yield farming or just looking for a good yield on your crypto assets, you can use Abracadabra to leverage your position based on your risk tolerance.
DeFi Insurer Nexus Mutual Weighs Whether to Pay Out on BadgerDAO Hack In the aftermath of the $120M hack of BadgerDAO on Dec. 1, Nexus Mutual, the insurance protocol, will not pay out to people who bought coverage if it was a frontend attack, according to the project’s Twitter.
Upstart Silo Finance Preps Token Sale in Challenge to Aave and Compound An upstart is about to take on DeFi lending giants Compound Finance, Aave and Rari Capital. It’s called Silo Finance and the protocol is opening a token sale on Dec. 6 in its bid to win web3 glory. Silo’s edge: a new model.
Hybrid AMM DeversiFi Delivers Airdrop and Trading Rewards DeversiFi, a decentralized exchange (DEX) on the Ethereum blockchain, has launched trading rewards for users who swap tokens on its platform and announced a retroactive airdrop for early adopters.
TVL in DAOs Almost Doubles to $15B in Q4 Surge This quarter Decentralized Autonomous Organizations (DAOs) have grown dramatically, with the total value locked (TVL) of DAO Treasuries gaining 90% since the start of October to $15.2B.
Push to Launch Layer 2 Liquidity Mining on Uniswap Gains Steam A Uniswap community member has called for the decentralized exchange (DEX) to launch a liquidity mining program and incentivize users to migrate to its Layer 2 deployments on Arbitrum and Optimism.
On First Anniversary Ethereum 2.0 Beacon Chain Solidifies Proof-of-Stake Shift The Ethereum community is celebrating the first anniversary of the Ethereum 2.0 Beacon Chain, which set the network’s roadmap toward Eth2 into motion with its launch on Dec. 1, 2020.
Yellen Waives Non-Custodial Crypto Protocols From New Reporting Standards U.S. Treasury Secretary Janet Yellen said non-custodial protocols will not be subjected to stringent reporting obligations in line with updated guidance concerning crypto assets from the Financial Action Task Force (FATF), an intergovernmental organization that sets anti-money laundering guidelines for dozens of nations.
CloneX NFTs Sell Out in Auction Roiled by Attacks and Controversy On Nov. 29, RTFKT Studios was all set to begin the public sale of its CloneX avatars. Then the attacks on its website started. At just after midnight on Nov. 30, the metaverse-first design outfit hit the pause button. “Minting will start tomorrow,” the firm tweeted. “Apologies for this fck up, we had way too many attacks.”
Surging Ether Hits 42-month High Against BTC Ethereum has made another leg up against Bitcoin, with the ETH/BTC chart tagging its highest level since May 2018. On Dec. 1, ETH traded for 0.0837 BTC after rallying 12% over three days to test prices not seen since May 2018. The move coincides with combined total value locked (TVL) of the DeFi sector posting a new record high of $277.6B, according to DeFi Llama.
Bancor Launches V3 AMM In Bid to Regain Dominance Bancor was the first-ever automated market maker (AMM) and holds a special place in crypto lore after attracting $153M in 2017 in what was then the largest initial coin offering (ICO).
Inspired by Aaron Swartz’ Ideals New DAO Takes Aim at Academic Publishing Industry A new decentralized autonomous organization is drawing inspiration from ConstitutionDAO and the ideals of information liberation exemplified by the late activist Aaron Swartz.
Zero-Knowledge Pioneer StarkWare Launches Layer 2 Rollup Network StarkWare, the team that pioneered zero-knowledge-based rollups in 2018, has launched the mainnet alpha of StarkNet — the team’s much anticipated Layer 2, zero-knowledge (ZK) rollup network. The alpha launch was revealed on Nov. 29, with the release initially supporting general computation and composability.
Thanking all the amazing Defiers for the support and love this week (and always)!
🧑💻 ✍️ Stories in The Defiant are written by Brady Dale, Owen Fernau, Sanuel Haig, Bailey Reutzel, and yyctrader, and edited by Edward Robinson, yyctrader, 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.