Hello Defiers! here’s what we’re covering today,
Synthetic assets trading is picking up after Robinhood fail
Balancer announced v2 upgrade
Mark Cuban is latest DeFi advocate
Ren joins forces with Alameda
and more :)
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🙌 Together with Zerion, a simple interface to access and use decentralized finance. Ledger, a hardware wallet combined with the Ledger application to securely buy, sell, exchange, stake, lend & manage your crypto, Kraken, consistently rated the best and most secure cryptocurrency exchange, which can get you from fiat to DeFi, and Casper, an enterprise-focused blockchain which aims to introduces unprecedented security, speed and scale for businesses.
TLDR Synthetic assets trading in decentralized finance is picking up after stock buyers were locked out of traditional markets last week. Platforms like Mirror, FTX, and Synthetix, which are live, and others still in the works like Injective Protocol, allow investors to gain access to traditional stocks and assets via tokens which replicate their price.
Daily volume on Mirror has surged above $30M, more than three times the average in December, while liquidity climbed to a record $171M.
SILVER SHORT SQUEEZE IN DEFI Silver futures started surging late last week after Wall Street Bets Redditors turned their attention from GME and AMC to the metal. And while many in the WSB gang were likely waiting for markets to re-open, DeFi traders were able to front run traditional finance by trading silver over the weekend. Increased demand for the token representing silver on Mirror pushed its price on the platform up by 24% from Friday to a high of $37 on Sunday.
SO WHAT Amounts traded are still negligible compared to overall crypto volumes of billions per day, let alone traditional stocks trading volume, but the jump points to increased demand to access stocks like Tesla and Netflix, and commodities like Silver, without relying on centralized entities.
STOCKCHAIN DREAM The writing may be on the wall for a crypto-native stock exchange. The blockchian-native exchange could allow global-access to trading securities, instead of current country-based restrictions; 24/7 trading compared with 9:30am-4pm on weekdays; and settlement in minutes instead of the two-day standard of today. That’s in addition to self-custody and censorship resistance.
TLDR Balancer unveiled its V2 protocol upgrade, offering a generalized AMM solution for DeFi liquidity. Balancer allows users to create token pools with flexible constituents, weights and trading fees. With V2, Balancer will aggregate all its liquidity in one vault, while users will maintain an internal balance of the tokens they hold. The change is meant to optimize on gas costs and increase capital efficiency.
NEW MECHANISM The new mechanism, which separates liquidity from each pool’s logic, allows creators to design custom strategies such as stable pools for soft-pegged assets like Curve. Projects looking to offer custom liquidity solutions, can get familiar with the specs prior to the March upgrade with Balancer’s launch partner program.
PROTOCOL FEES Baked into the upgrade are levers for protocol fees, giving BAL token holders a way to turn on trading and withdrawal fees through governance. V2 will also include a flash loan fee, set at 25 bps at launch.
TLDR Mark Cuban, the billionaire entrepreneur and investor who stars on Shark Tank and owns the Dallas Mavericks, thinks that blockchain is the future of mainstream finance.
WSB AMA After vocally supporting Reddit’s WallStreetBets during their GME stock rally aimed against Wall Street hedge funds, Cuban made himself available to WSB community members for an AMA (Ask Me Anything).
When one user asked Cuban what current small industry might have the potential to blow up over the next few years, the conversation took a turn towards DeFi.
“De-Fi, NFT, but there will be a lot of ups and downs along the way,” wrote Cuban, who also noted that he currently owns AAVE, Sushi, ETH, BTC, and LTC.
Cuban responded to another question asking if the future of exchanges would be decentralized, answering: “I think block chain is the future, i don’t know if it’s decentralized or private.”
TLDR Ren Project, an open protocol that facilitates value transfer between blockchains, has joined forces with quantitative trading firm Alameda Research. Ren Project said in a Medium post that it will be prioritizing support for the Solana blockchain as part of its new partnership with Alameda.
A BOOST FOR SERUM They plan to bridge assets between Solana and Ren’s multi-chain library by Q2, and expect this to have a “profound impact” on Solana’s main decentralized exchange, Serum. Serum is an offshoot of FTX, the crypto derivatives exchange founded and run by Sam Bankman-Fried—who is also the CEO of Alameda Research.
HOT TAKES Some expressed concern that the partnership may negatively impact Ren’s efforts towards becoming more decentralized.
“Alameda's track record for decentralization isn't great, with their prized project SushiSwap being governed by a multisig admin key. It's very unclear whether this new partnership will help or hurt Ren's quest for decentralization,” DeFi researcher Chris Blec told The Defiant.
Others felt that even if Ren remained centralized, centralization under a trusted company like FTX might be better than an unknown alternative.
“Previously: Ren was controlled by a central party I don‘t know and don‘t trust,” tweeted crypto researcher Hasu. “Now: Ren is controlled by a central party I know and trust.”
“This report is intended to outline important considerations for valuing Ether. While Bitcoin is widely considered digital gold, Ether’s designation is less clear. This paper explores three approaches and relevant metrics associated with each: Ether as money, Ether as a consumable community, and Ether as a cash generating asset,” Grascale said.
“Opyn, a decentralized finance platform for options, has raised $6.7 million in a new Series A funding round,” The Block reported. “Industry venture capital firm Paradigm led the round, according to Opyn, with participation from existing investor Dragonfly as well as Synthetix co-founder Kain Warwick and Stani Kulechov, who founded Aave.”
“Stone Ridge Asset Management’s bitcoin spinoff firm – NYDIG – already has enough institutional buy orders lined up to push its bitcoin (BTC) holdings over $25 billion by the end of 2021, according to CEO Ross Stevens,” CoinDesk reports.
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🧑💻 ✍️ Stories in this newsletter were written by Daniel Kahan, Owen Fernau, and Cooper Turley, and edited by Camila Russo. Videos were produced by Robin Schmidt and Alp Gasimov. Podcast was led by Camila and 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 ($10/mo, $100/yr).