🐋 Solend's Proposed Freeze of Whale’s $216M Account Scrapped as ‘Opposite of DeFi’
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The Money Market dApp on Solana is Anxious About Liquidation Exposure
By Samuel Haig
EXPOSURE Solend, a money market dApp and the largest Solana-based protocol, is scrambling to address exposure from a whale that’s holding 5.7M SOL worth $215.7M, according to governance proposals.
REVERSAL Over the last three days, Solend’s community has approved a plan to take control of the whale’s account, then reversed course after the move was criticized by decentralization advocates, and is now weighing a third proposal to introduce account limits that will result in borrowed positions exceeding $50M being progressively liquidated.
JITTERY The flurry of action comes as fears of liquidations continue to roil the DeFi market. Solana has rallied alongside Ether, jumping 34% in the last seven days, according to CoinGecko. Yet investors and protocols remain jittery about fallout from loanbooks backed by digital assets. Solend’s token, SLND, has tumbled almost 16% in the last seven days.
Arrival of Christie's Noah Davis Marks New Phase for OG NFT Collection
By Jason Levin
BRAND LEAD 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.
ECLIPSED Davis, who coordinated the $69M sale of Beeple’s NFT piece “Everydays — the First 5,000 Days” last year, is expected to rejuvenate a collection that blazed the trail for the NFT revolution. Lately, it’s been eclipsed by BAYC and its spinoffs, which have caught fire with celebrities such as Tom Brady and Jimmy Fallon and NFT collectors alike.
PROJECTS Straight away, Yuga Labs plans to turn over intellectual property rights to Punks-holders, said co-founder Wylie Aronow in a tweet. Yuga did the same with BAYC and the move has spawned derivative projects, most notably an upcoming book by Jenkins the Valet and Seth Green’s upcoming TV show. Maybe the same thing will happen with the Punks.
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By Owen Fernau
FEES There’s always a bull market somewhere. Today, that somewhere may be Uniswap, one of DeFi’s most recognizable decentralized exchanges. With $4.3M in fees generated in the past 24 hours, Uniswap has surpassed even its home network, Ethereum, as of June 20. In fact, the decentralized exchange (DEX) has jumped to the top of CryptoFees’ leaderboard.
CASH FLOWS Notably, 100% of Uniswap fees go to liquidity providers (LPs), who are users who deposit assets and are exposed to impermanent loss. So, while the DEX’s UNI token has jumped 7.2% in the last 24 hours, its holders don’t get a piece of the cash flows, which come from users paying a fee when swapping between digital assets.
ACTIVITY Still, as the leading base layer for DeFi and other smart contract-enabled activity, it’s noteworthy whenever a protocol leads Ethereum in terms of fee generation.
Wary of “cartelization”, core members of the Lido team have proposed changing the way the liquid staking protocol is governed.
Proponents believe it would prevent validators from amassing undue power, if successful, and give holders of Lido’s staked ETH token (stETH) veto powers over proposed changes to the protocol. Lido currently accounts for almost 32% of ETH staked in Ethereum’s Beacon chain.
When Ethereum completes its transition to a proof-of-stake consensus mechanism later this year, its security will be depend on users who stake their Ether to the network, allowing them to run block-producing nodes called validators while earning staking rewards.
Lido and similar protocols, such as Rocket Pool, allow users to simultaneously stake their Ether and access their locked liquidity using derivative tokens backed 1:1 by their staked ETH. These tokens, like stETH and rETH, can be used to earn yield in the wider DeFi ecosystem.
Key Metric May Signal Fading Confidence in Sector
By Samuel Haig
CONFIDENCE In a sign that investors may be losing confidence in the long term prospects of DeFi, the total value locked in the sector’s protocols has increased just 5% even though the price of Ether has rebounded 30% since bottoming out on June 18.
TOKEN PRICES That means users are continuing to remove assets from DeFi even though token prices are starting to recover. The bear market has exposed the risks in many popular DeFi products, with algorithmic stablecoins, yield farms, and staking derivatives among the hardest hit.
PEGGED Algorithmic stablecoins are not backed by collateral, meaning they can quickly post spiralling losses should they fail to remain pegged to the dollar. Staking derivatives are also vulnerable to losing price parity with the underlying assets they represent.
The Next and Final Step is a So-called ‘Executive Vote.’
NEWS MakerDAO, the largest DeFi lender by total value locked, could soon allow another Ether derivative as collateral on its network. As a decentralized autonomous organization, or DAO, the proposal to add rETH was put to a vote among holders of MakerDAO’s governance token, MKR. People holding almost 41,000 MKR voted in favor of the proposal, while those holding 22,000 MKR voted in opposition.
NEXT STEP The next and final step is a so-called “executive vote.” If the proposal passes the executive vote, rETH will be added as collateral in the MakerDAO network.
STAKING When it was originally proposed, in March of last year, rETH was in testnet, according to AmethystWizard, who authored the proposal on the MakerDAO governance forum. It went live on mainnet in November, and quickly became the second-largest liquid staking provider for Ethereum as measured by total value locked.
Crypto companies Bitfinex and Tether, which share a parent company, have no plans to reduce staff, unlike some of their rivals.
Cardano's development lab, Input Output (IOG), did not push out June 20’s planned "Vasil" hard fork on the Cardano testnet citing technical bugs, the team said on Tuesday.
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DeFi Alpha: Using Uniswap V3 To Dollar-Cost Average + Single-Sided LPs on Bancor V3 DeFi Alpha is a weekly newsletter published for our premium subscribers every Friday, contributed by Defiant Advisor and DeFi investor at 4RC, DeFi Dad, and our Degen in Chief yyctrader.
Merge Update: Devs Advance Closer to Eth2 With Major Step Next Week Despite the bear market, the Ethereum community still has The Merge to look forward to. And Ethereum’s devs are making significant progress.
MakerDAO Votes to Freeze Aave’s Direct Borrowing of DAI MakerDAO is taking no chances. As doubts about crypto credit rock the digital asset landscape, MakerDAO, the protocol behind the DAI stablecoin, voted on June 15 to temporarily disable Aave’s DAI Direct Deposit Module (D3M).
🧑💻 ✍️ 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 and Alp Gasimov. Podcast was led by Camila, edited by Alp.
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