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Forcing Utility On The SEC

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Beginners guide to crypto in 2022

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Trending in The Defiant

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New NFT Index Token

🦍Index Coop’s New NFT Index Fund Includes Blue Chips Like CryptoPunks and Bored Apes

By Owen Fernau

When day traders grew tired of sleepless nights day trading Tesla stock, they turned to index funds: passive investment vehicles that exposed them to huge swathes of the market at once. But the crypto market offered little respite to exhausted NFT traders – until today.

Index Coop, a DAO that creates on-chain indices for the cryptocurrency market, just released a index fund for NFTs. Called “JPG”, the index exposes holders to high-value NFTs, such as CryptoPunks, Bored Ape Yacht Club, Meebits and Tyler Hobbs’s Fidenza.

JPGs lead product designer, the pseudonymous Joseph Knecht, told The Defiant that the index was made possible by “the emergence of a number of new protocols for effectively liquifying NFTs.”

Rather than holding the NFTs themselves, the index exposes holders to DeFi projects that fractionalise ownership over NFTs, such as NFTX, WHALE and Jenny DAO. Knecht said the DeFi products on which JPG relies only launched in the past couple months.

While JPG features most major NFTs – the inclusion criteria is “high liquidity” and a market cap over $2 million – Knecht said that the NFT market is too illiquid to grant exposure for several major projects. Notable omissions include Doodles and the Mutant Ape Yacht Club.

👉READ THE FULL STORY IN THE DEFIANT.IO👈

Ethereum Foundation Discloses Financials

💸Ethereum Foundation Reveals 80% of Treasury Holdings Are ETH

By Samuel Haig

The Ethereum Foundation, few would be surprised to learn, is bullish on ETH. The non-profit disclosed yesterday that it holds 80% of its $1.61B treasury fund in the blockchain’s native currency.

“The EF believes in Ethereum’s potential, and our ETH holdings represent that long-term perspective,” said the non-profit, which oversees the development of Ethereum, in a treasury disclosure report published April 19.

In the report, the Foundation shared the size of its treasury (as of March 31, 2022) and detailed how it spent money last year. The report marks the first time the Ethereum Foundation has disclosed its treasury holdings.

The Foundation said that it holds non-crypto investments worth $302M, without disclosing further details about those investments.

Approximately 99% of its crypto holdings, or $1.29B are in Ether, equating to about 0.3% of the circulating ETH supply. The foundation holds $11M in other cryptocurrencies.

👉READ THE FULL STORY IN THE DEFIANT.IO👈

Cronje Preaches Virtues of Regulation

👀 Yearn Creator Andre Cronje Slams Crypto Culture, Pivots to ‘Regulated Crypto’

By Samuel Haig

Andre Cronje, the DeFi developer behind Yearn Finance and several other unregulated financial protocols, has voiced his disdain for crypto’s culture of egotism and greed, and remodeled himself as a pioneer of regulated crypto.

After abruptly exiting DeFi in March (again) and remaining silent ever since, the South African developer published two Medium posts on April 18 and April 19 that took aim at the “enrichment and ego” he thinks embodies decentralized finance, and argued that the DeFi sector should embrace regulation.

Cronje said that the rules that govern traditional finance exist for a reason, and that DeFi developers ignore them at their own peril. “[DeFi is] like a child trying to stick their finger into a electric outlet, you stop them, before they can learn why they shouldn’t. One day they will understand, but not today” he wrote.

The former developer is no stranger to the perils of unregulated finance. Disgruntled investors sued Cronje in late 2020 after his unreleased project, Eminence, was hacked for $15M. In February 2021, Cronje’s flagship project, Yearn Finance, lost $11M to hackers.

Cronje said that crypto should work with regulators rather than rally against them. “I now more than ever see the need, or even necessity for regulation, not as a mechanism to prevent, but as a mechanism to protect,” he wrote.

👉READ THE FULL STORY IN THE DEFIANT.IO👈

Moonbirds Soar To 20 ETH Floor

🦉Moonbirds Shatter OpenSea Records With $240M Traded In Four Days

By yyctrader

Trading volume on NFT marketplace OpenSea hasn’t been this high since January. That’s thanks to Moonbirds, a collection of 10,000 owl avatars that launched on Apr. 16.

The profile-picture collection now boasts a floor price of 20 ETH ($62,000) – eight times its launch price of 2.5 ETH ($7,800).

Sales of the collection accounted for nearly 40% of OpenSea trading volume over the past four days. More than $110M worth of Moonbirds changed hands on Apr. 16 alone.

That’s a lot of volume. Indeed, Moonbirds generated more secondary sales this week than blue chip NFT collections like Bored Apes and Azuki mustered in the past month.

👉READ THE FULL STORY IN THE DEFIANT.IO👈

Op-Ed

🏛️Forcing Utility On The SEC

By Carla Carriveau

The U.S. Securities and Exchange Commission under Chair Gensler is a rigid challenger of the crypto industry in its aggressive application of an age-old regime to digital assets. Even without the 97 enforcement actions and billions in imposed penalties, the SEC has effectively impaired the industry from advancing digital innovation and technology by stalling approval of broker-dealers, denying ETFs, and thwarting lending programs. The SEC’s inflexible approach is now being tested by President Biden and Congressional members, and for the first time in years, I am cautiously optimistic for the future of crypto and digital assets in the US.

At this point, we’re all accustomed to the SEC’s analysis of digital assets under the Howey test, the rather inapt 1946 Supreme Court case that has lawyers telling clients that their token should be like an orange. Despite the four prongs of the test itself and the many, many factors the SEC staff put out to analyze those prongs, at its core, this test broadly speaking turns on whether or not a digital asset has use or utility outside of speculation (i.e., an orange grove you buy so you can eat the oranges versus an orange grove you buy for the hope of profits).

How much use is enough? What kind of use is sufficient? Where are the lines? Good questions. No idea. I believe it would be relatively easy to draft quantitative measures of utility into a workable framework which sets clear boundaries to divide jurisdiction between the SEC and CFTC. The Blockchain Association and others advocated for a bright-line test approach years ago, but nothing has been adopted in that direction.

Instead, our industry is forced to prove utility to the SEC for every asset. We lawyers live in a constant state of anxiety, worried that we will be the next target of the SEC and, without the unlimited resources of the U.S. government, our companies will be coerced into some settlement that would harm our business.

👉READ THE FULL STORY IN THE DEFIANT.IO👈

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The Tube

📺 Beginners guide to crypto in 2022

Job Board

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We are a fast growing crypto content agency focused on memes, animation and art. We have a large need for meme makers and illustrators who understand various internet sub-cultures especially useful if you have been or participated in the following:

- /biz/ on 4chan
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Elsewhere

🔗 Blockchain-based Games Raised $2.5 Billion in Q1 2022: Crypto Potato

A recent DappRadar study estimated that blockchain-based games raised $2.5 billion in Q1, 2022 from investors. If this pace maintains, the total investments by the end of the year will be 150% higher than in 2021. Additionally, in March, blockchain games attracted 1.22 million Unique Active Wallets (UAW) and accounted for 52% of the industry’s activity.

🔗 MakerDAO to integrate StarkNet to cut DAI transaction costs: The Block

MakerDAO, one of the oldest and largest DeFi protocols and the creator of the DAI stablecoin, is set to integrate the Ethereum Layer 2 network StarkNet on April 28 as part of its multichain strategy.

Deploying MakerDAO on StarkNet will allow users to mint and trade DAI faster and at a cheaper cost. "It's going to be about 10x improvement in cost compared to Ethereum," Louis Baudoin, facilitator for the StarkNet core unit at MakerDAO, told The Block.

🔗 First Australian Spot Bitcoin, Ether ETFs to Go Live Next Week: Blockworks

The first Australian ETFs to invest directly in bitcoin and ether are set to hit the market next week while US fund issuers continue to work with regulators to secure a listing. Switzerland-based 21Shares, the world’s largest issuer of crypto exchange-traded products (ETPs), has teamed up with ETF Securities to launch the funds.

The ETFS 21Shares Bitcoin ETF (EBTC) and the ETFS 21Shares Ethereum ETF (EETH), which track the price of bitcoin and ether in Australian dollars, are fully backed by the respective assets held in cold storage by Coinbase.

🔗 Bitcoin Outflows From Crypto Funds Top $73 Million Amid 'Hawkish' Fed Policy: Decrypt

A mix of profit taking and newly banned investment products has likely contributed to $97 million outflow across all institutional crypto investment products last week, with $73 million just in Bitcoin, according to a new report from CoinShares.

Two weeks ago, most of the outflows were from the U.S., but 88% of last week’s outflows were from Europe. That could be a delayed reaction to the "hawkish FOMC statement,” writes CoinShares investment strategist James Butterfill in the report.

🔗 FCA Names Interim Head for Digital Assets Unit: CoinDesk

The U.K.'s Financial Conduct Authority appointed Victoria McLoughlin as interim head of its digital assets department as the country ramps up its efforts to regulate the crypto industry and establish its credentials as a global crypto hub, according to her LinkedIn profile.

McLoughlin started her new position earlier this month, her profile shows. For the past two years she has been the financial-services regulator's supervision manager of crypto assets and digital markets. Prior to a one-year break, she had been at the FCA for more than nine years.

Trending in The Defiant

Why Compound Might Ditch its Yield Farmers In the summer of 2020, Ethereum lending protocol Compound worked out that if you give away free governance tokens for borrowing and lending crypto, people will flock to your platform and pump the value of your new token. Almost two years later, the price of Compound’s token has fallen 83% from its all-time high, and the protocol has lost considerable ground to its rivals. Now the Compound community is using those governance tokens to redesign the incentives that attract people to the platform.
Ethereum Foundation, AMD, Polkadot Launch $7M Competition to Boost Zero-Knowledge Scaling Leading crypto projects have banded together to offer $7M in prizes to teams innovating using zero-knowledge (ZK) proofs, a privacy-preserving scaling technology for blockchain transactions. Announced on April 19, ZPrize is an industry-sponsored contest supported by 21 Web3 organizations including Polygon, Polkadot, Mina, and the Ethereum Foundation. AMD-Xilinx will also provide competing teams with high-powered computing equipment.
Ethereum Mixer Blocks North Korean Hacker Group Behind $600M Axie Infinity Heist Tornado Cash has banned Lazarus, the North Korean hacking group the FBI says is behind last month’s $600 million hack on Axie Infinity’s Ronin bridge, from using its Ethereum mixing service. The state-sponsored hacking group, which the U.S. government also holds responsible for the 2017 WannaCry ransomware campaign, is one of 24 addresses banned by the service, which obscures the provenance of Ethereum transactions.

🧑‍💻 ✍️ Stories in The Defiant are written by Owen Fernau, Samuel Haig, DeFiDad, 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.

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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. Signest, 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)

DeFi, NFT & Web3 Insights - The Defiant

🦍Index Coop’s New NFT Index Fund Includes…