🦄 Recap: DeFi Week of Sept. 11
Welcome to a post-Merge world!
This week Ethereum finally executed its historic fusion of the Beacon Chain and its mainnet. It’s hard to remember when a technology venture underwent an upgrade with so much fanfare — the release of Apple iPhones of yore comes to mind. It’s impossible to recall a time when an online network switched its engine mid-flight without a hitch. Ethereum’s Merge was a first.
For an account of the moment The Merge went live and its potential impact turn to Sam Haig’s story. Sam also dug deep into how the Proof of Work mining community weathered the blowback from the shift to Proof of Stake. The new fork for PoW miners, ETHPoW, got off to a rocky start.
Sam also reported on how Lido and four big exchanges, including centralized powerhouses Coinbase and Kraken, quickly glommed more than half the staked Ether that will be used to tend the blockchain in the post-Merge era. That raises some thorny questions about decentralization, eh?
Meantime, Owen Fernau covered the impact on DeFi and the price action in ETH, which plunged 10% after The Merge as investors sold the news. Owen also wrote a preview of The Merge that addresses many of the less known changes Ethereum will feature. And Aleksandar Gilbert covered how centralized exchanges such as Coinbase quickly adjusted to Ethereum’s new era.
Rounding out our weekly report is Camila Russo’s podcast with Robert Lauko, the founder and head of research at Liquity, the DeFi lending protocol. And more DeFi primers, this week on Wrapped Bitcoin, Cosmos, and Tether.
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The Merge Moment
After Years of Toil and Tests, Ethereum Shifts to Proof of Stake and Sets Stage for Further Changes
Samuel Haig reports on the moment The Merge went live, and some of the lesser-known changes to look for…
It’s done. The Merge was activated at 6:43 AM UTC time. The long-awaited upgrade to Ethereum occurred at block height 58,750,000,000,000,000,000,000, unifying the Proof of Stake, ‘Eth2’ Beacon Chain consensus layer with the Proof of Work mainnet and execution layer.
Rapid Consolidation of Tokens May be Blow to Decentralization
The Merge was supposed to be a great leap forward in the drive toward decentralization. But one day after the historic upgrade took place, five ventures controlled more than half of the ETH locked up for Ethereum staking. To many, that may look an awful lot like centralization.
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Proof of Work Scramble
ETHPoW Leaves Miners Fuming in Post-Merge Debut
Samuel Haig chronicles the struggles of a new PoW network…
The Merge may have launched without a hitch but ETHPoW, the Proof of Work fork of Ethereum aimed at die-hard miners, is off to a troubled start. In its first 24 hours, its ETHW coin has lost three-quarters of its value and users are complaining they cannot access the network using the information provided by the ETHPoW team, according to reports on Twitter.
Ethereum Classic’s Hash Rate Is At An All-Time High
By Samuel Haig
Ethereum is not the only chain changing this week. Rival Proof-of-Work (PoW) chains are also being disrupted by The Merge. The upgrade boots PoW miners off the Ethereum network in favor of Proof-of-Stake (PoS) validators, displacing an estimated $5B worth of mining hardware. As a result, some miners have banded together and pledged to fork Ethereum and maintain the chain using Proof of Work consensus under the ticker ETHW.
Starbucks Makes Web3 Move on Polygon
In which yyctrader reports on a Merge-inspired trophy hunter…
Yesterday, as crypto enthusiasts watched Ethereum transition to Proof of Stake consensus without skipping a beat, one investor decided that the occasion merited a serious memento.
New PoW Ethereum Fork Plunges 75% Amid Flurry of Problems The Merge may have launched without a hitch but ETHPoW, the Proof of Work fork of Ethereum aimed at die-hard miners, is off to a troubled start.
Exchanges Resume ETH Transfers After Successful Merge Centralized crypto exchanges have re-enabled withdrawals and deposits of Ether and related tokens on Thursday, after a brief pause due to uncertainty surrounding the Merge, Ethereum’s biggest upgrade in its seven-year history.
ETH Plummets Post-Merge as DeFi Chugs Along Maybe the Merge was a sell-the-news event after all. ETH has fallen just under 10% in the past 24 hours, while Bitcoin, the world’s largest cryptocurrency, has only dropped 2%. The DeFi Pulse Index (DPI), the largest index focused on DeFi, is down 6%.
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Coinbase One of Five Platforms to Lock Up Half of Staked ETH The Merge was supposed to be a great leap forward in the drive toward decentralization. But one day after the historic upgrade took place, five ventures controlled more than half of the ETH locked up for Ethereum staking. To many, that may look an awful lot like centralization.
NFT Collector Spends $50,000 To Immortalize Ethereum’s Last PoW Block Yesterday, as crypto enthusiasts watched Ethereum transition to Proof of Stake consensus without skipping a beat, one investor decided that the occasion merited a serious memento.
What Is Wrapped Bitcoin? Incompatibility is inevitable when you have dozens of blockchain networks with their own smart contract formatting. This is why Bitcoin cannot simply be transferred to Ethereum in its original state. Bitcoins can be wrapped as Ethereum-compatible ERC-20 tokens, making that into Wrapped Bitcoin (WBTC).
The Merge Goes Live in Historic Upgrade for Ethereum It’s done. The Merge was activated at 6:43 AM UTC time. The long-awaited upgrade to Ethereum occurred at block height 58,750,000,000,000,000,000,000, unifying the Proof of Stake, ‘Eth2’ Beacon Chain consensus layer with the Proof of Work mainnet and execution layer.
Miners Pile Into Ethereum Classic Minutes After Merge as Hashrate Spikes 71% It only took minutes for Proof of Work miners to flock to Ethereum Classic after The Merge activated at 6:43 UTC on Thursday morning. With Ethereum no longer reliant on mining as it changed to the Proof of Stake consensus mechanism, the hash rate of the Ethereum Classic network is at a record 106 terahashes per second (TH/s).
What The Merge Means For Proof-of-Work Miners Ethereum is not the only chain changing this week. Rival Proof-of-Work (PoW) chains are also being disrupted by The Merge. The upgrade boots PoW miners off the Ethereum network in favor of Proof-of-Stake (PoS) validators, displacing an estimated $5B worth of mining hardware. As a result, some miners have banded together and pledged to fork Ethereum and maintain the chain using Proof of Work consensus under the ticker ETHW.
All The ETH On Aave Borrowed Ahead Of The Merge Investors have borrowed 100% of the ETH available on Aave, a DeFi lending protocol with $6.5B in total value locked according to The Defiant Terminal. That’s around 643,660 ETH worth over $1B as of Sep. 14.
Compound Treasury Launches Institutional Lending Service Compound Treasury, a business that streamlines access to the Compound DeFi lending protocol on behalf of institutional clients, announced a new borrowing service Wednesday.
What Is Cosmos? When it comes to decentralized finance, the networks that make it run are divided into layers. What lies below Layer 1 blockchains are made up of stalwarts such as Bitcoin or Ethereum. Layer 2 networks comprise next-generation projects such as Aribitrum. And Layer 0 networks may be the least understood.
U.S. Permits Tornado Cash Users to Access Crypto Deposits U.S. residents with crypto trapped on Tornado Cash may now apply for a license from the U.S. Treasury Department to retrieve their funds.
Doodles NFT Project Raises $54M At $704M Valuation After over a month of silence on Twitter, Doodles are back with a bang. The popular NFT project announced a $54M raise on Sep. 13 that values Doodles at an eye-popping $704M. Alexis Ohanian, the co-founder of Reddit, led the funding round through his venture firm Seven Seven Six, according to Forbes.
Macro Trumps The Merge As Crypto Dives After Hot Inflation Data Worse-than-expected U.S. inflation numbers sent global markets tumbling Tuesday despite mounting excitement over the Merge, the most significant upgrade to Ethereum in its seven-year history.
On Eve of The Merge Skeptics and Supporters Gird for Raft of Changes The moment has finally arrived. Ethereum is poised to execute the most historic upgrade in its eight-year history. And the DeFi community is giddy with anticipation that the shift to Proof-of-Stake consensus will revitalize the blockchain network’s usefulness and value. Richard Craib’s response? Meh.
ETH Fire Sale Unlikely After Shanghai Upgrade: Nansen Unless The Merge sends Ether to the moon, Ethereum die-hards shouldn’t fear a fire sale when the post-Merge “Shanghai” upgrade takes effect next year, according to a new report from crypto analytics firm Nansen.
MakerDAO Users To Mint DAI for Free After Debt Ceiling Rises MakerDAO’s users can now mint DAI for free. A recent MakerDAO executive vote raised the debt ceiling for its stETH vault to 200M DAI. Maker’s Wrapped stETH vault currently maintains a 0% stability fee, meaning users can create DAI against WstETH collateral without paying any fees on the position to Maker.
Ether and PoW Coins Outshine Rivals as Merge Looms Ethereum is outperforming most leading digital assets as the Merge rapidly approaches, with ETH last changing hands for $1,700 — a 14% gain since Sep. 7.
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Maple Revives Crypto Lending With $40M Deal Just months after the crypto loan sector cratered, unsecured lending appears to be heating back up. On Sep. 9, Wintermute, a crypto market making company, took out an uncollateralized 40M USDC loan via Maple Finance, a company impacted by the drama that threatened the sector earlier this year.
What Is Tether? Tether (USDT) offers the familiarity and stability of the dollar, but in digital form, moving across blockchain networks. As one of the first stablecoins of its kind, Tether is the No. 1 stablecoin by market capitalization.
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 Robin Schmidt and Alp Gasimov. Podcast was led by Camila, edited by Alp.
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