📉Crypto Markets Stabilize After $693B Sell-Off
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Markets Bounce Back After Terra Crash
MARKETS Crypto markets have stabilized, ending a market free-fall that erased $693B from crypto’s market capitalization from May 5 to May 12.
Crypto’s market capitalization fell from $1.81T on May 5 to lows of $1.12T on May 12. The market started to rise on Friday, and now rests at $1.28T, data from CoinMarketCap shows.
The crash was exacerbated by the collapse of Terra, the stablecoin protocol that fell into a death spiral after traders lost confidence in the volatile token that propped up the network, LUNA.
DeFi TVL On May 5, traders had locked $205 billion in DeFi protocols, according to DeFi Llama. On Friday, DeFi’s combined TVL had fallen to $111 billion and has not budged much since.
Decentralized Web3 Support
ConsenSys Launches Its First DAO
By Jason Levin
NEWS Blockchain technology company ConsenSys revealed its plans to create VillageDAO, a decentralized autonomous organization (DAO) that will provide customer care services to other web3 projects – with the first client being Metamask, its own blockchain wallet.
DETAILS To provide customer support at scale, ConsenSys has partnered with LivePerson, a US-based company focused on conversational AI. While AI will play a role, VillageDAO community members will be incentivized to contribute to the platform and its clients.
INCENTIVES Arguably the most important part of the project – the incentive structure – is still being finalized. “There are versions of this that could make a ton of sense and other versions that would be destined for failure,” wrote Jon Hillis, founder of Cabin, a DAO building a decentralized city.
Robinhood Reveals DeFi Wallet
By Owen Fernau
It gets harder to tell the difference between DeFi and TradFi by the day.
As the two financial sectors continue to blend, popular stock trading app Robinhood has announced a non-custodial mobile wallet for web3. The wallet won’t charge “network fees,” according to the company’s blog post on the release — gas fees are often a major pain point in interacting with DeFi protocols. If Robinhood pays them, users will be able to access DeFi with far less friction.
“There’s gotta be a way to get all the security and privacy benefits of self-custody with the low cost, simplicity, and mobile-first design that you’re accustomed to from a TradFi product like Robinhood,” Vlad Tenev, co-founder of Robinhood, said.
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In 2021, Ethereum traders lost over $250 million dollars to malicious bots exploiting their trades. As DeFi continues to gain popularity, this number is expected to rise.
Eden Rocket RPC is a next-generation private transaction service for Ethereum, providing traders with MEV protection by submitting transactions directly to miners and away from the prying eyes of harmful bots. Using Eden Network for Ethereum transactions results in better and safer trades.
While MEV protection does not require any stake, traders who stake $EDEN and use the Eden RPC on MetaMask, receive transaction block priority n and now with the release of staker extractable value (SEV), they are paid for every trade they make on Ethereum.
Eden Rocket RPC compiles some of Ethereum’s fastest private transaction networks, resulting in 90%+ effective hashrate. This makes Eden Rocket RPC the fastest private transaction network available protecting you from bots. On top of that Eden Rocket RPC users are paid to trade on Ethereum.
Launched on August 5th with EIP-1559, Eden Network successfully closed a $17.4 million dollar seed round led by Multicoin Capital with participation from Alameda Research, Jump Capital, Wintermute, GSR and DeFiance Capital. Genesis Capital executive Joshua Lim and Andre Cronje of Yearn.finance also participated as angel investors.
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Coinbase Unveils Dapp Browser
By Samuel Haig
Coinbase is making it easier for users to access DeFi on Ethereum.
On May 16, the American cryptocurrency exchange shared a wallet that lets customers access Ethereum-based dapps in the Coinbase app.
Supported DeFi protocols include decentralized exchanges Uniswap and Sushiswap, borrowing and lending platforms Curve and Compound, and NFT marketplaces OpenSea and Coinbase NFT.
Coinbase is rolling out the new features to a small group of U.S.-based Android users. Coinbase did not mention whether it will charge extra fees to use the dapps.
Aurora Launches Membership Program
By Samuel Haig
Near Protocol’s Ethereum-compatible platform, Aurora, is having a rough year. Despite backing from Pantera Capital, Three Arrows Capital and Alameda Research, its token has fallen by 64% since January and its TVL is down from $1.3B to $465M.
So what next for Aurora? Aurora+, a membership program.
Launching today, it offers 50 free transactions a month (currently worth just $1, but means new users don’t have to buy the sparsely traded token elsewhere, then move it to Aurora), a staking interface, and airdrops.
Amid the dramatic events surrounding last week’s TerraUSD collapse, Tether (USDT), the crypto industry’s largest stablecoin, has dropped more than $7 billion. Tether’s market capitalization plummeted from an all-time high above $83 billion on May 11 to $75.6 billion today. The decrease in USDT supply coincided with the stablecoin briefly losing its dollar peg by 5% last week before recovering to trade at a slight discount of $0.998 within the next 36 hours.
Crypto derivatives trading should be restricted to wholesale markets, a senior Dutch financial regulator said recently. “I maintain that the trade in crypto derivatives should be restricted to wholesale trade,” said Paul-Willem van Gerwen, head of Capital Markets and Transparency Supervision at the Dutch Authority for Financial Markets (AFM).
The ongoing saga with Terraform Labs, the blockchain developer behind Terra (LUNA), took a turn following a supposed change in employment status for many on the firm’s legal team. According to their LinkedIn profiles, Terraform Labs general counsel Marc Goldich, chief litigation and regulatory counsel Noah Axler and chief corporate counsel Lawrence Florio have all stopped working for the blockchain firm as of May 2022.
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UK Proposes Regulations That Would Recognize Stablecoins As A Form Of Payment Stablecoins haven’t looked so stable recently. The United Kingdom doesn’t seem to be too worried. Despite the recent collapse of Terra’s UST stablecoin, the U.K. government will move forward with proposed regulations that would facilitate stablecoins’ use “as a recognised form of payment,” according to a report from The Telegraph.
Luna Foundation Guard Spent $3B In Unsuccessful Bid To Defend UST Peg On May 7, the Luna Foundation Guard (LFG), the reserve fund for the Terra ecosystem, controlled over $3.1B in assets. Today, it holds just $87M. Over the last week and a half, the Terra ecosystem collapsed after the TerraUSD (UST) stablecoin lost parity with the U.S. dollar. The LFG reportedly spent $3B to defend the UST peg but UST still collapsed and now sits at $0.11.
Do Kwon Wants to Save Terra by Creating a New Chain With 1B of Tokens for LUNA and UST Holders The Terra ecosystem’s notorious leader is trying to salvage the resources and talent left behind in the wreckage that is UST’s depegging. Do Kwon, the maligned founder and CEO of TerraForm Labs, has posted a plan to fork the Terra blockchain and distribute 1B of a new token to stakeholders in the Terra ecosystem. Kwon proposes salvaging Terra’s developer ecosystem, users and recognizable brand by launching a new Layer 1 blockchain, while putting the idea of creating a decentralized stablecoin on hold for the time being.
🧑💻 ✍️ Stories in The Defiant are written by Owen Fernau, Samuel Haig, Jason Levin, DeFiDad, Aleksandar Gilbert, and yyctrader, and edited by Edward Robinson, yyctrader, and Camila Russo. Videos are produced by Robin Schmidt, Alp Gasimov and Daniel Flynn. Podcast is 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. Subscribers get full access, while free signups get only part of the content.
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