Twitter going full crypto… Robinhood introducing open wallets… Gary Gensler on the warpath… Ryan Selkis fighting back by (maybe) running for political office. Yeah, that all happened this week, and then some. Our intrepid reporters — Brady Dale and Owen Fernau — covered these goings-on and the upshot of their reporting is clear: DeFi has become an action-packed thriller.
It’s striking that Gensler, the chair of the SEC, is vowing to regulate ALL crypto by defining them as securities, investment contracts, or debt instruments (see our story on Wednesday). That question about how to define crypto has been up in the air with regulators worldwide for some time. Not anymore. It’s also telling that the former Goldman Sachs man is doing this as household names like Twitter, Robinhood, PayPal, Visa, and even Disney quadruple-down on crypto, DeFi, and NFTs. (To be fair, China on Friday reportedly launched a fresh crackdown on crypto mining and trading.)
Just look at what Hollywood is doing — contributing writer R.D. Danes reports fascinating piece about how American Zoetrope, the fabled studio founded by Francis Coppola, is brekaing new ground on using blockchain and tokenomics to produce films for up and coming auteurs.
Our own filmmakers in residence, the indomitable Robin Schmidt and his team, threw caution to the wind and went live this week on The Defiant YouTube channel covering NFTx, Jay Pegs Auto Mart, and Olympus Pro, among other hot topics. Meantime, The Defiant Chiefess Cami Russo rolled up her sleeves and delved into the intricacies of DeFi investing with research guru Matthew Sigel on her weekly podcast.
All in all, a packed week, eh? Now if we can just find some time to relax this weekend!
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In this week’s episode we speak with Matthew Sigel, head of digital asset research at VanEck, an asset management firm overseeing $80 billion, which has shifted its focus heavily into crypto. They started out with investments almost exclusively in Bitcoin, but now, with Matthew on board, the firm is becoming increasingly bullish on Ethereum and DeFi.
In which Owen Fernau, fearless writer for The Defiant, risks the peril and unpredictability of Smooth Love Potion and Axie Infinity to report on the volatile tokenomics of the blockchain-based game.
SMASH Axie Infinity is a blockchain-based game that’s become a smash hit with crypto users. It allows players to earn real money, and lots of it, surpassing the monthly salary for many in the world’s poorest countries.
MASSIVE It’s a massive game, sporting 1.5M daily users, according to its most recent development update. That’s more than Bitcoin’s all-time high of 1.36M active wallets on Apr. 15, according to data provider Glassnode. Earlier this year, Axie grabbed a lot of headlines for its torrid growth.
CRISIS But Axie Infinity is suddenly experiencing a crisis: Smooth Love Potion (SLP), one of its internal tokens and a key instrument in the tokenomics of the game, has been suffering extreme volatility, even by crypto standards. After peaking in May and again in July, it’s lost more than three-quarters of its value, though this week SLP has stabilized at around $0.081.
REAL WORLD For Axie Infinity players who earn the SLP token in-game and sell it to pay real-world bills, the torque is wreaking havoc. It raises significant questions about the potential of games and NFTs to truly create sustainable economies, a rising hope this year as the DeFi community — and Facebook’s Mark Zuckerberg — prepare for the Metaverse.
In this special report, R. D. Danes explores the intersection of blockchain technology and the creative arts in a groundbreaking project backed by the family and studio that produced Apocalypse Now, The Outsiders and numerous other favorites.
After four years of development, Decentralized Pictures — a new project from Frances Ford Coppola’s fabled American Zoetrope production company — is preparing to go live.
The project is just what it sounds like — a decentralized platform leveraging blockchain and digital tokens to select films for financing and production support. It is now wrapping up the beta run of its democratic film-financing application and is weeks from launching the betanet of its underlying blockchain platform. It is the first 501(c)(3) nonprofit to issue digital assets under the Securities Act of 1933.
Blockchain has been touted as a tool for opening up and leveling fortressed institutions of all kinds. The motion picture business — an insular world where the path to a theater release often opens through personal connections, introductions and insider knowledge — may prove a revealing test bed.
Decentralized Pictures, or DCP, was co-founded by Roman Coppola, Francis’ son and the writer of critically acclaimed films such as Moonrise Kingdom and the forthcoming The French Dispatch. Co-founders Michael Musante, American Zoetrope’s vice president of production & acquisitions, and Leo Matchett, the Emmy Award-winning film engineer join Coppola in the project. DCP’s website states that its mission is to support “burgeoning independent filmmakers and filmmakers from underserved and underprivileged communities.”
In the latest installment of IntoTheBlock, Lucas walks us through the latest performance dynamics in DeFi. Read and learn
On-Chain Markets Update by Lucas Outumuro, IntoTheBlock
PERFORMERS Smart contract platforms’ tokens have been amongst the top performers of 2021. While Ether has recorded a remarkable 330% return year-to-date, newer platforms such as Solana, Avalanche and Terra have seen their tokens grow over 1,000% in 2021.
SCALABILITY The rise in these platforms has been driven initially by their lower fees and more scalable blockchains, but more recently sizable incentives programs have also buoyed their tokens. At the same time, Ethereum is pushing further with upgrades improving its proposition as a store of value and scalability. As so-called “Ethereum killers” have quickly grown, it is worth taking a step back and analyzing the evolution of the space to better understand how the multi-chain universe is unfolding and creating opportunities for both users and investors.
VALUATION In terms of market cap, the top 10 smart contract platforms reached an all-time high in early September with an aggregate valuation of over $750 billion.
ALL-TIME HIGHS The recent run-up in valuations has been driven by platforms such as Cardano and Solana hitting new all-time highs. While Ethereum has remained below its May high, Luna, Avalanche, Solana, Cardano, Algorand and Cosmos reached new heights in late August or early September. This has resulted in Ethereum’s market share dropping in terms of valuations.
Oracle Pyth Goes Haywire on Solana with Bad Prices The Pyth Network malfunctioned on Sep. 20 as the data provider reported a Bitcoin price of $5,402 on a day when other sources like CoinGecko didn’t report a BTC price below $40K.
Robinhood’s New Crypto Policy Poised to Bolster DeFi and NFTs Robinhood, the wildly popular brokerage app, just made a move that could be a shot in the arm for DeFi. It plans to introduce crypto wallets in 2022 that will enable customers to deposit and withdraw Bitcoin, ETH, and other digital tokens from their accounts to external wallets.
Crypto is Hungry for a Political Leader From its Own Ranks The blockchain industry is ready for one of its own to join the U.S. Congress, whether it’s Messari founder Ryan Selkis or someone else. That’s judging by reactions on the floor of Messari’s conference, Mainnet 2021, taking place at the Marriott Marquis in Manhattan this week.
Gensler Vows Action Against DeFi Platforms That Operate ‘Outside the Perimeter’ All cryptocurrencies will be regulated. Or else. That was the clear and unambiguous message Gary Gensler, the chair of the U.S. Securities and Exchange Commission, delivered Tuesday in a livestream with The Washington Post.
Messari Founder Announces Senate Run as SEC Shadow Hangs Over Mainnet Conference Messari founder Ryan Selkis said he’s planning to run for the U.S. Senate in 2024. Selkis has become increasingly vocal against stringent cryptocurrency regulation but the final straw, he said, was when securities regulators allegedly showed up at the conference he organized and served one of the speakers with a subpoena.
DeFi Market Stabilizes After White Knuckle Drops Monday Crypto markets Tuesday morning appeared to be shaking off gut-wrenching falls in the last 24 hours. At one point Monday, ETH nosedived 2.8% in an hour.
DeFi Lending Venture Rides Solana’s High-Speed Chain to $100M in Deposits Solend, a lending platform built on the proof-of-stake blockchain, Solana, has hit $100M in deposits, according to its team. Solend has done so without liquidity mining opportunities, but those are coming.
Derivatives Protocol Raises $3.75M in Sale of Governance Token The Tracer Protocol has completed a sale of 50M TCR tokens for 3.75M DAI, giving its total supply a valuation of $75M at the sales end. It has since nearly doubled to $137M, according to CoinGecko.
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.