Recap: DeFi Week of Dec. 7 🦄
Hello Defiers! Hope you’re having a great weekend.
Summing up the past week: DeFi tokens continued to climb, signaling ETH/BTC may be ready for take-off. Basis Cash, a fork of shuttered algorithmic stablecoin, is offering DeFi-summer-like yields. Idle Finance assets surge past $100M in another example of how token rewards can impact protocol liquidity. Rari said it’s switching to Melon once v2 launches, and SuperRare introduced permissionless auctions.
Institutions are more than dipping their toes in crypto; they’re jumping in the pool. Grayscale buys more than $300M of BTC and ETH, JPMorgan settled a repo trade on its private blockchain, MicroStrategy raised funds to buy more Bitcoin, Fidelity Digital to hold Bitcoin as collateral for loans, and S&P backs digital asset data firm Lukka.
TrustToken’s Rafael Cosma said in an op-ed, traditional finance and institutions will adopt DeFi or get left behind. Stefan George of Gnosis talked about how introducing GnosisDAO will boost the GNO token in this week’s podcast episode.
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"The Only Thing Where I Probably Agree With Arca is That GNO is Under-appreciated:" Gnosis' Stefan George
In this week’s episode I speak with Stefan George, the cofounder and CTO of Gnosis. Gnosis is one of the OG Ethereum projects. It was founded in 2015 by Stefan and Martin Koppelman as a prediction market platform on Ethereum and it’s now an ecosystem of financial applications, with a decentralized multi-sig wallet, called Gnosis Safe, and a decentralized exchange. Most recently, Gnosis announced it will join other DeFi projects and launch a DAO, where it would transfer a large chunk of the ether and GNO tokens in its treasury for the community to manage.
This treasury is sizeable at around $100M dollars, due to the rising price of the 250,000 ETH they raised in a 2017 ICO. And this stash has been the core of a dispute with one of Gnosis token holders, hedge fund Arca. Arca claims the Gnosis token is trading below the value of the Gnosis treasury, and so they have proposed that Gnosis buy back their tokens at a value that’s between the current market value and the value of the treasury —or the book value.
Stefan argues the GNO market cap is miscalculated because it’s not counting the actual number of tokens in circulation and should be higher. He also says the Gnosis DAO should drive more value to GNO holders.
"DeFi Returns are Eating Traditional Finance," by TrustToken's Rafael Cosma
Ether is up 320% so far this year, Bitcoin is up 160%, and DeFi, as measured by FTX’s index, is up 80%. This compares with a 10% increase in US stocks and 20% in gold. While cryptocurrencies offer distinct advantages over traditional assets —portfolio differentiation, always-on market, instant settlement — what will really move the needle for institutions is returns that are not in percentages, but in multiples, argues TrustToken CEO Rafael Cosman. It’s already happening with BTC. Bitcoin was still a Wild West for institutions in 2017, but now that the infrastructure is in place, they are falling over themselves to invest.
The same will likely happen with DeFi, Cosman writes, together with TrustToken marketing head Michael Gasiorek. But the unicorn-themed protocols and degen farmers won’t need to put on a suit and tie to great this new cohort of investors. Instead, they will have to adapt. And if they don’t, they’ll get left behind.
DeFi Rally Signals ETH/BTC is Ready for Take-Off: If history is a guide, an accelerating DeFi rally is a sign that ETH/BTC may be ready for take-off.
Idle Finance Assets Soar After Issuing $IDLE Token: Assets in Idle Finance have shot up by 100x since it started rewarding users with its native IDLE token, highlighting once more the power of incentives in DeFi protocols.
DeFi Platform YIELD Raises $4.9M: YIELD has raised $4.9 million from a private venture round, its YLD token pre-sale, and in an online equity crowdfunding platform.
Basis Revives Algorithmic Stablecoin With 10,000% Yields: Basis Cash, a fork of shuttered algorithmic cryptocurrency Basis, is touting DeFi-summer-like APYs as the newly launched stablecoin - BAC - trades at $57 despite targeting a $1 peg.
Rari Capital Plans to Run DeFi Robo-Advisor on Melon: Rari Capital is planning to migrate its $57M of assets to Melon Protocol following the release of Melon v2 (to be rebranded as Enzyme Finance).
SuperRare Introduces Permissionless Auctions: SuperRare, a marketplace for digital assets, is introducing an automated auction system built on Ethereum.
Thanking all the amazing Defiers for the support and love this week (and always)!
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 at $10/month or $100/year, while free signups get only part of the content.
About the founder and editor: Camila Russo is the author of The Infinite Machine, the first book on the history of Ethereum, and was previously a Bloomberg News markets reporter based in New York, Madrid and Buenos Aires. She has extensively covered crypto and finance, and now is diving into DeFi, the intersection of the two.