Hello defiers! hope you’re all doing great. This is what’s going on in DeFi:
Nasdaq releases DeFi index
Tether to issue yuan-backed Ethereum stablecoin
ConsenSys Labs-hosted DeFi accelerator accepting applications
Nasdaq Lists a DeFi Index With a Weird Composition
Nasdaq, which operates one of the most followed U.S. stock indexes, partnered with London-based brokerage firm EXANTE to list DeFix, an index tracking the performance of the digital tokens of decentralized finance projects.
“DeFiX is the first altcoin index that reflects the dynamics of the most promising blockchain projects working in decentralized finance…” Nasdaq states in its website.
“… Augur, Gnosis, Amoveo, Numerai, Maker, 0x.”
The other five tokens make sense (kind of), but Amoveo, with its VEO coin, is a tiny, little known project. VEO, which has price data only going back to March this year, has $6.4 million market cap, and virtually no volume, traded in only one exchange, according to Messari. It’s a blockchain made to support derivatives for use cases including prediction markets, and it does have a platform for making bets, but the two markets there have zero volume on them. Its Medium page has 27 followers, and its Github has four contributors.
Just 19 months ago Zack Hess, Amoveo founder, was tweeting this.
And it’s not like it has just a tiny fraction of the index. It has a 20 percent weight! The same as Augur’s REP and 0x’s ZRX, with market caps of $115 million and $99 million respectively, and at least some users and volume on their platforms.
Image source: defix.fund
Maybe Amoveo is building groundbreaking tech and will go on to be a big part of DeFi in the future. But it’s not right now. There were many other options to choose from to get a better representation of the most active DeFi projects. Synthetix’s SNX, Melon’s MLN, Bancor’s BNT, are some examples.
The weights on the other projects in the index are also off. Why would Maker have similar weights to Augur and 0x, when it holds half of the collateral in DeFi and MKR’s market cap is about four times higher? There’s not much information on how the index was calculated, just that it was a result of analysis done by a “team of experts.” I guess that’s what you get when traditional finance makes a decentralized finance index.
Tether Releases Ethereum Stablecoin Pegged to the Chinese Yuan
And the list continues… more stablecoins on Ethereum! Last week it was Binance, the largest crypto exchange. This week it’s Tether, the largest, and probably most controversial, stablecoin issuer.
Tether is launching an an Ethereum-based ERC20 token that it says will be backed by Chinese yuan called CNHT. Tether’s dollar-backed USDT has a Bitcoin-based and an Ethereum-based version. Both coins have the highest traded volume among stablecoins and the Ethereum version is about to overtake the Bitcoin version on many metrics, including total addresses with more than $10.
Image source: Coin Metrics
The move shows companies continue to choose Ethereum to build and issue assets, and increases options for DeFi platforms, which are mostly based on Ethereum.
Still, Tether’s parent company iFinex is under investigation for securities fraud. The investigation has confirmed concerns that Tether isn’t fully backed by dollars as the company previously claimed, and there’s long been speculation that Tether is used to manipulate the price of Bitcoin. It’s not necessarily the project Ethereum and DeFi bulls should want to associate with.
Public Utility Announcement: ConsenSys Labs-Sponsored DeFi Accelerator Accepting Applications
Applications are open for Tachyon III, a new accelerator for open finance startups, hosted by ConsenSys Labs. winning teams receive $150,000 investment, office space in NYC, daily 1-on-1 mentorship, and access to a global network of blockchain and industry experts, over 12 weeks this winter. Deadline to apply is September 16.
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About the author: I’m Camila Russo, a financial journalist writing a book on Ethereum with Harper Collins. I was previously at Bloomberg News in New York, Madrid and Buenos Aires covering markets. I’ve extensively covered crypto and finance, and now I’m diving into DeFi, the intersection of the two.