🐳 Solend and Mango Markets Team Up to Handle Whale’s $207M Debt
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By Samuel Haig
LARGEST USER Risky debt is spreading across Solana’s DeFi ecosystem as the drama around a whale and Solend shifts into a new phase. Solend, the top lending protocol on Solana, has agreed with rival, Mango Markets, to share the debts of its largest user — an unidentified whale holding $207.3M of SOL, according to governance proposals.
THREAT The sum comprised one quarter of Solend’s total value locked (TVL) and posed a threat to the protocol. On June 22, the whale paid down $11.5M of the debt, according to Solend. It’s unclear exactly how much has been paid back in the last few days.
PLAN “This shows commitment to working things out and solves Solend’s USDC utilization problem… We’re in touch with the Mango team and [the whale] to figure out a long-term plan,” Solend posted. “This doesn’t completely solve the problem however, since the large liquidation wall still exists,” the team added, meaning a big chunk of the position may still be subject to a margin call.
NEWS Three Arrows Capital has until June 27 to cough up $658M or it will be pushed into default by a lender that is running out of patience. That’s the latest challenge the embattled $10B hedge fund is confronting as its vast loanbook goes sideways under pressure from the historic crash in cryptocurrencies.
EXTRAORDINARY The fund owes a crypto exchange called Voyager Digital the sum — and shows no signs of paying it back, the exchange said Wednesday in an extraordinary statement.
FAILURE TO REPAY Voyager Digital, a Vancouver-based firm, said it may issue a notice of default to Three Arrows for “failure to repay its loan.” The company said Three Arrows owes it 15,250 Bitcoins, which were worth more than $308M in midday trading New York time. Voyager said the hedge fund also owes it $350M worth of USDC, the stablecoin supported by Coinbase.
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By Owen Fernau
BLOCKCHAIN Pivoting to build an independent blockchain isn’t often done by established DeFi projects. But that’s exactly what’s in the works as derivatives-focused decentralized exchange dYdX has released plans to develop its own chain.
FOURTH ITERATION dYdX chain will be built using the Cosmos SDK and Tendermint Proof-of-Stake consensus protocol. These technologies are part of the Cosmos ecosystem, an interconnected system of application-specific blockchains. The new chain will be released to support dYdX’s fourth iteration (V4).
CONSENSUS The announcement post cited the protocol’s dYdX token as “the most natural fit for use as the L1 token of dYdX V4.” This means that validators will need to stake the token, which was airdropped last September, to secure the network under a proof-of-stake consensus mechanism. In addition, transaction fees on the new chain would be payable in dYdX tokens.
By Samuel Haig
GAINS Venture capitalists are famed for being patient. It often takes more than a decade for them to realize gains from their moves. That may be why 1confirmation, a venture firm backed by Peter Thiel, Marc Andreessen, and Mark Cuban, launched a $100M fund to double down on NFTs during the worst bear market in crypto in four years.
FLIP “We think that NFTs are going to flip cryptocurrencies in the next decade [because] people care more about culture (games, brands, art, music, sports) than finance,” Nick Tomaino, the firm’s founder, tweeted.
FUND The fund, launched June 22, will focus on new projects in the “gaming, art, photography, and music” sectors, as well as segments that will exist in the future. The fund will also be used to gain exposure to bluechip collections such as CryptoPunks and Nouns.
NEWS Tether, the issuer of USDT, the largest stablecoin by market capitalization, plans to launch a new stablecoin on Ethereum pegged to the British Pound next month.
RIPE It’s a market ripe for the taking – according to CoinGecko, one of the only Pound-pegged stablecoins on the market, the Jarvis Synthetic British Pound, had a 24-hour trading volume below $10,000 as of Wednesday. An earlier entrant, TrueGBP, has a market cap of $80M with just 1,581 holders, according to Etherscan.
STABLECOIN Dubbed GBPT, the new token will be Tether’s fifth stablecoin, the company said Wednesday. In addition to USDT, Tether offers the Euro-pegged EURT, the Yuan-pegged CNHT and the recently-announced MXNT, pegged to the Mexican peso.
Guest writer Blake West roadmaps a way to reignite explosive growth for DeFi.
CRYPTO NATIVE How does DeFi go 100x? There are two basic approaches. One is to focus on banking “crypto native” activity. This means that NFTs, crypto gaming (”GameFi”), web3 social, and other uniquely-web3 innovations could all be DeFi’s savior.
PRIMED The idea is that as these markets grow, they will need financial services. DeFi is primed to capture 100% of that growth. The problem? Even if these activities 10x from their current states, it still puts a low ceiling on DeFi’s growth.
BORING The other approach is to go non crypto-native. Specifically, DeFi should go after boring, everyday economic activity — sectors such as payments, lending, e-commerce, salaries, or savings. That’s right, be boring! When you look at the numbers, this is actually DeFi’s only viable path to 100x growth. And like all major disruptive technologies from the past, DeFi must do so by solving the same old problems in a better way.
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Coinbase announced today that it plans to discontinue its advanced, trader-focused Coinbase Pro service by the end of the year.
U.S. Federal Reserve Chairman Jerome Powell said on Wednesday that a recent, much-debated move by the Securities and Exchange Commission (SEC) has thrown a potential wrench into common practice for how the U.S. central bank and banking regulators view digital assets held by lenders.
eBay Inc. (Nasdaq: EBAY), a global commerce leader that connects millions of sellers and buyers around the world, and KnownOrigin, one of the most innovative non-fungible token (NFT) marketplaces, today announced that eBay has acquired KnownOrigin.
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Celsius Defies Fear of Implosion as Token Soars 218% After crypto lending platform Celsius suspended withdrawals of deposits last week, it seemed unlikely that its native token would move higher. Yet the crypto bank’s CEL token has soared 218% since June 13. What gives? A short squeeze, that’s what.
Yuga Vows ‘Slow and Thoughtful’ Approach to Reviving CryptoPunks CryptoPunks are done playing second string. That’s the upshot of the news that Yuga Labs, the NFT studio that manages the CryptoPunks collection as well as the blockbuster Bored Ape Yacht Club franchise, has poached Noah Davis from Christie’s as a brand lead for the punks.
‘All Operations Are Normal’ Says Bankman-Fried as FTX Provides $250M Credit to BlockFi BlockFi, a crypto lending platform, has secured a revolving line of credit of $250M with FTX, the second-largest crypto exchange by trading volume, leaders of both companies said Tuesday.
🧑💻 ✍️ Stories in The Defiant are written by Owen Fernau, Aleksandar Gilbert, Claire Gu, Samuel Haig, Jason Levin, and yyctrader, and edited by Edward Robinson, yyctrader and Camila Russo. Videos were produced by Robin Schmidt, Daniel Flynn, and Alp Gasimov. Podcast was led by Camila, edited by Alp.
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