🦄 Recap: DeFi Week of Oct. 2
Hello Defiers! Happy weekend!
This week the watchword in DeFi was innovation… Yes, it’s true, that’s long been the animating force in decentralized finance, but when everyone is freaking out in a bear market it can be hard to focus on the industry and creativity at work in the space. No worries… Our reporters returned from various precincts in DeFi with stories on the new and the promising.
Owen Fernau wrote about something called “chicken bonds.” No, it’s not a mashup of crypto and poultry (eww), it’s a new yield-generating mechanism produced by the team at Liquity, and it’s already amassed more than $5M in liquidity, the project said.
Sam Haig weighed in with his latest story on the drama at SushiSwap, a troubled DEX that finally named a new “head chef” this week. Later in the week Tarang Khaitan reported on how Sushi rallied 10% after news broke that GoldenTree invested more than $5M in the project.
Likewise, Aleks Gilbert caught up with the folks at THORChain, the novel bridging protocol to learn how they’re overcoming a rough stretch of hacks. The key: partnerships, including the latest with Avalanche.
Speaking of exploits, the week ended with news of a staggering $560M attack on the Binance Smart Chain, which took down the network until Friday. Bridging has become such a vulnerable area in crypto, which is one of the key lessons Rahul Nambiampurath has described in his series of DeFi Explainers. Check out his latest on gas fees.
This week we also introduced a new vibe and look for The Defiant YouTube channel. Be sure to catch our Market Roundup with Cami Russo and yyctrader. And we produced a series of Quick Takes on the Feds’ crackdown on crypto influencers and DeFi lending.
Rounding out the week we have two podcasts for you: In the first, Cami talks with Uri Kolodny and Eli Ben-Sasson, the co-founders of Starkware, one of the leading Layer 2 scaling solutions for Ethereum. In the second one, Cami hears from Wintermute’s Dave Micley who expanded on the growing role of institutional investors in crypto. The biz dev director at the digital asset market maker talks about arbitrage and “delta-neutral strategies,” among other topics.
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This week on The Defiant Podcast we speak with Uri Kolodny and Eli Ben-Sasson, the co-founders of Starkware, one of the leading Layer 2 scaling solutions for Ethereum.
Post Merge, Ethereum continues to rely on scaling solutions like Starkware and will continue to do so, according to the network’s long-term roadmap.
Visa processes 1700 transactions per second, and that number is often quoted as the Holy Grail for a blockchain to become a viable settlement layer for finance. They explain how that can be achieved with the help of Starkware.
In the early stages of building Starkware, Uri and Eli had decided not to launch a token. After two years of running Starkware and StarkNet being in alpha, is a STARK token on the horizon?
Currently, Starkware is solely used for scaling Ethereum. We talk about Uri and Eli’s plans to expand Starkware’s services to other Layer 1s.
Finally, we discuss the future of scaling solutions, decentralized applications, DeFi, NFTs, and more.
This week on The Defiant Podcast we speak with David Micley, the business development director at Wintermute, one of the largest digital asset market makers in the world. They run delta-neutral strategies with an average daily trading volume of around five billion dollars. Wintermute’s operations span across OTC, market making, and venture capital, so David keeps a close eye on all aspects of crypto markets.
With all the macro headwinds pummeling markets, from the energy crisis in Europe, global inflation, and war in Ukraine, to the recent turmoil with Credit Suisse, we can’t help but feel a sense of deja vu about the 2008 financial crisis.
David believes we’re just in the first inning of what could be a multi-year crypto winter.
But he’s seeing that institutional investors are still signing up to trade with Wintermute’s OTC desk, which indicates that large players are still committed to the space this time around.
Wintermute relies primarily on arbitrage opportunities for profits and we discuss where those opportunities can be found and how the firm is able to leverage both DeFi and CeFi.
David also shares his views on the venture side of crypto. He believes some of the biggest bets right now are blockchain infrastructure plays. With funding getting harder to come by for crypto startups, he provides insights on where he sees the space evolving.
Finally, we discuss the $160M hack that Wintermute suffered recently and the lessons learned.
Cutting Edge DeFi
New Mechanism Quickly Amasses More than $5M in Deposits
Owen Fernau explores how Defiers are pursuing new projects even in the face of a bear market…
It’s been some time since DeFi users have been able to work with a new type of offering. Thank the bear market for that. Yet on Oct. 4 there was an exception — Chicken Bonds, launched by Liquity, a collateralized debt position protocol with a market cap of $176M. Since then, Chicken Bonds have acquired $5.5M in LUSD, Liquity’s stablecoin, according to a Dune Analytics query.
Bridging Protocol Forges Partnerships in Slow and Steady Recovery From Exploits
In which Aleksandar Gilbert reports on how the persistence and focus of a novel blockchain protocols is finally paying off…
Despite a rough start that would have killed many young companies, THORChain continues to build and raise capital, buoyed by its unique place in the crypto ecosystem. This week, THORChain, which has a market cap of $487M, announced its integration with the Avalanche blockchain.
Blockchain Infrastructure Report
The Graph Notches 500 Subgraphs But Some Users Knock Performance
Data may not be the sexiest element in crypto, but it is a key piece of infrastructure. And on Oct. 3, The Graph, a leading provider of decentralized crypto data, recorded 500 subgraphs on its Graph Network.
Subgraphs are application programming interfaces (APIs) that enable software programs to interact with other programs. In the case of the Graph, subgraphs pull, process, and store data from the blockchain so the information can be easily accessed.
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DAO Governance Journal
Grey Pledges to Help DEX Move Past Tumultuous Period and Scale Up
For months, Samuel Haig has been covering the ins and outs of the DEX’s struggle to find its footing and hire a new chief… It reached a, ahem, head this week…
After months of debate and controversy, the community of SushiSwap has finally elected a new “head chef” to lead the decentralized crypto exchange.
Binance Smart Chain Back Online After $560M Bridge Hack Another major DeFi bridge has been exploited, and Binance’s Ethereum-compatible blockchain is the target.
Sushi Rallies After GoldenTree Discloses $5M Position GoldenTree, a privately-held firm with $50B in assets under management, has bought and staked $5.2M worth of SUSHI tokens. The American asset manager disclosed its position on Oct. 5 in Sushi’s governance forum.
THORChain Breaks Free of Early Troubles With Move to Avalanche Despite a rough start that would have killed many young companies, THORChain continues to build and raise capital, buoyed by its unique place in the crypto ecosystem.
ETH and BTC Skid After Strong Jobs Report Augurs More Rate Hikes Global markets traded lower on Friday after the latest report from the U.S. Bureau of Labor Statistics showed that the job market remains resilient in the face of the Federal Reserve’s efforts to dampen inflation by cooling the economy.
Cool Cats Inks Partnership With Animoca Brands Cool Cats, a popular collection of 9,999 feline-themed profile picture NFTs, has closed a strategic investment from Animoca Brands, the web3 gaming powerhouse.
What Is Tezos? Tezos is a unique blockchain network that paves the road for dApps, decentralized applications, which are powered by smart contracts. Although the same can be said of Ethereum, Tezos is ahead of the decentralized game thanks to its on-chain governance system.
Liquity Breaks DeFi Doldrums With ‘Chicken Bonds’ Offering It’s been some time since DeFi users have been able to work with a new type of offering. Thank the bear market for that.
Three Arrows’ Prized NFT Collection Heads For The Block Starry Night Capital, a subsidiary of bankrupt crypto hedge fund Three Arrows Capital, is moving its cherished NFT collection to Teneo, Three Arrows’ court-appointed liquidator.
Dwindling Ethereum Revenue Pressures Staking Yield Ethereum revenue “fell off a cliff” in the third quarter of 2022, squeezing staking yields in the process, according to a recent report from crypto research firm Messari.
GMX Soars 17% After Twin Listing on FTX and Binance GMX has emerged as that rare thing in crypto these days — a high flyer posting double-digit returns.The decentralized perpetual exchange may have Binance and FTX to thank for the performance.
BNB Chain Slips as No. 1 Ethereum-Compatible Chain: Report Binance’s BNB Chain is losing its edge as the world’s most-used Ethereum-compatible blockchain.
OpenSea Streamlines NFT Launches for Artists OpenSea, the leading NFT marketplace, has launched SeaDrop, an open-source smart contract that allows NFT project creators to skip the tedious task of deploying their own custom smart contracts.
Blockchain Data Provider for Uniswap and Other DeFi Platforms Quietly Scales Up Data may not be the sexiest element in crypto, but it is a key piece of infrastructure. And on Oct. 3, The Graph, a leading provider of decentralized crypto data, recorded 500 subgraphs on its Graph Network.
What is UMA? Universal Market Access (UMA) is an Ethereum-powered protocol that tracks off-blockchain assets such as gold and tokenizes them into synthetic on-chain assets.
SushiSwap Elects Grey New ‘Head Chef’ After Months of Drama After months of debate and controversy, the community of SushiSwap has finally elected a new “head chef” to lead the decentralized crypto exchange.
DeFi Lender Euler Finance Accepts USDT as Collateral Skepticism about whether USDT is fully backed by reserve assets has been around since 2017. Despite this, crypto’s largest dollar-pegged stablecoin, with a $68B market capitalization, has continued to make inroads into DeFi.
ENS Registrations Hit All-Time High In September Demand for .eth domains remains strong despite the ongoing market downturn. Ethereum Name Service (ENS) had a stellar September as both registrations and renewals hit all-time highs above 437,000 and 45,000 respectively.
Ribbon Targets Institutional Investors for Unsecured Lending Offering Institutional investors just got one more high-risk way to play the crypto market. On Oct. 3, Ribbon Finance, a DeFi derivatives platform, launched an offering called Lend that allows users to make unsecured loans to institutions.
What are Gas Fees? For a system to be decentralized, it must be self-funded. In other words, there is no need for outside money to make it work. Self-funding must be incentivized to be effective.
Thanking all the amazing Defiers for the support and love this week (and always)!
🧑💻 ✍️ Stories in The Defiant are written by Owen Fernau, Aleksandar Gilbert, Samuel Haig, and yyctrader, and edited by Edward Robinson, yyctrader and Camila Russo. Videos were produced by Alp Gasimov. Podcast was led by Camila, edited by Alp.
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