🦄 Recap: DeFi Week of June 5

Hello Defiers! Happy weekend! They say the wheels of legislation turn slowly. Well, true, but they do turn and this week the most important and sweeping proposal to regulate the cryptocurrency industry dropped in the U.S. Senate. It’s a bipartisan bill, s...

Hello Defiers! Happy weekend!

They say the wheels of legislation turn slowly. Well, true, but they do turn and this week the most important and sweeping proposal to regulate the cryptocurrency industry dropped in the U.S. Senate. It’s a bipartisan bill, sponsored by Sen. Cynthia Lummis (R-Wy) and Sen. Kirsten Gillibrand (D-NY), and it sets out to define what’s what in the world of digital assets in an unprecedented way.

Aleks Gilbert delved deeply into the bill to learn how it would change DeFi if it becomes law. After talking to a number of influential cryptocurrency lawyers Aleks reported how the legislation appears to strike a middle ground between regulation and support for innovation, but is also “technologically infeasible,” in the words of one source. This is the type of thoughtful, analytical journalism we prize at The Defiant.

In the same vein, Owen Fernau wrote a fascinating and insightful analysis of “quantitative tightening,” or QT, a new policy directed by the Federal Reserve to reverse years of loose money in the economy. Why is this relevant to DeFi? As Owen explains, the Fed’s moves to take debt securities out of the marketplace (and its interest rate moves) are directly impacting the valuations of digital assets. Owen then turned his attention to a dive on the burgeoning rise of DeFi credit protocols such as Masa Finance and Goldfinch. Good stuff.

It isn’t just lawmakers that are focusing on crypto. So, too are law enforcement agencies. Jason Levin produced a nice take on the fallout from the indictment of Nate Chastain, the former head of product at OpenSea. In addition to capturing the fear running through the space, Jason reported that the pursuit of an insider trading case in the NFT market marks a new application of federal securities laws in crypto. Yikes.

The Ethereum network made major strides this week, as it completed The Merge on a public testnet for the first time, Samuel Haig reported.

Meanwhile, on the sunnier side of NFT land our chiefess Cami Russo conducted a wonderful podcast about fashion with Adriana Hoppenbrouwer-Pereira, the co-founder of The Fabricant. And Robin Schmidt and his crew produced an invaluable video on how now to get rekt on OpenSea. (Make sure you check out Robin’s segment on a16Z, too!)

Sticking with NFTs, we debuted a column on the good, the bad, and the zany in the market. In our first installment, yyctrader takes a wry look at the flurry of mints this month, a grab bag of McGoblin burgers, mystery NFTs, and, gulp, nothingness.


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This week:

Create Your Own NFT Contract With Manifold + 32% APR on Stablecoins


🎙 The Fabricant Co-Founder: NFT Fashion Blurs Lines Between Creators and Consumers While Both Share the Upside


Adriana Hoppenbrouwer-Pereira is the co-founder and CMO of The Fabricant, a digital fashion house for the metaverse founded in 2018. Their belief is that fashion is identity, and digital fashion is simply an extension of the digital identity we’re building in web 3. The Fabricant is one of the most prolific digital garment creators today and we discuss how (and if) these pieces are being used and whether the market slump has affected adoption.

Adriana discussed The Fabricant’s collaboration with World of Women and how these two communities are seeking to make sure women feel represented and welcome in web3. We also talk about whether our digital wardrobes will be compatible with all the different competing chains and virtual worlds emerging. Finally, we talk about the bigger vision for the metaverse and digital identity and what to expect from The Fabricant in the coming months.

The Tube

ç📺 The Open Metaverse Show: The Fluf World Futureverse explained w/ Bruno Skvorc (RMRK)

📺 Hot Stuff: Three Metaverse Stories - Merit Circle, Grit, and We Are All Going to Die

📺 Tuesday Tutorial: New scam on OpenSea: How to not get REKT

📺Quick Take: Binance under the spotlight

DC Dispatch

🙇🏻‍♂️ Crypto Lawyers Unpack Contradictions and Challenges in Senate Mega-Bill

In which Aleksandar Gilbert makes the rounds to fathom what this landmark bill means for DeFi…


When Sen.Cynthia Lummis (R-Wy.) and Sen. Kirsten Gillibrand (D-NY) dropped their crypto mega-bill earlier this week, crypto natives breathed a sigh of relief. There were no sweeping prohibitions or bans embedded in its 69-pages of legislation, nor draconian measures that would further damage confidence in a sector struggling to weather a grinding bear market.

Then, as everyone read the fine print, came the head-scratching. Some of its provisions appear to be “technologically infeasible,” in the words of one crypto lawyer.

The Responsible Financial Innovation Act is the most comprehensive and important piece of proposed legislation on crypto to hit Capitol Hill to date. Even as lobbyists, lawyers, and legislators digest and analyze its measures, a bevy of potential changes have already made headlines.

For starters, the bill would classify most cryptocurrencies as commodities, rather than securities, potentially saving the industry from the U.S. Securities and Exchange Commission’s hard line toward the industry and costly reporting and registration requirements.

Market Analysis

🏦 Fed’s Quantitative Tightening Program Poised to Whipsaw Crypto

QT Ends Loose Money Era and Augurs More Pressure For Token Values

In which Owen Fernau spotlights the next major force to exert its influence on token prices…


With crypto’s market cap already down $1T for the year, digital asset holders are hoping the bear market’s worst damage is done. They may be out of luck, however, as the U.S. Federal Reserve began quantitative tightening (QT) on June 1, according to a press release by the central bank.

QT is a monetary policy tool with which the Fed decreases the amount of liquidity in the economy by allowing securities on its balance sheet to reach their maturity date. These securities are primarily Treasury bonds, whose debt is serviced by the U.S. government, and mortgage-backed securities.


The first tranche of debt won’t mature until June 15, according to Alfonso Peccatiello, the former head of fixed income portfolio management at ING Deutschland, so the actual effects of QT have yet to hit the U.S. economy. Further, the rate of balance sheet reduction will double from $47.5B for the next three months, to $95B in September.


🍔 Defiant NFTs: McGoblin Burgers, a Mystery Mint, and a Death Cult

A Month of Manic Mints is the Focus of The Defiant's Inaugural Weekly NFT Dispatch

In which yyctrader makes the rounds in NFT land…


Non-fungible tokens, or NFTs, are so hot right now. Still. In the last 18 months Bored Apes and Mutant Apes and Art Blocks wonders and Space Doodles have come out of nowhere and formed a global market with an estimated $40B traded in 2021.

While there’s been a slow down in the grinding bear market of 2022, the space continues to leap forward at breakneck speed, with new trends popping up (and dying off) every other week. If that’s not a cultural-technological phenomenon then what is?

We at The Defiant thought it was high time to chronicle the madness with a weekly column. We want to take aim at all the good, bad, and downright zany developments in NFT land.


🎀 IntoTheBlock: How One DeFi Protocol is Sustaining Growth in the Bear Market


On-Chain Markets Report by Pedro NegronIntoTheBlock

Bear markets are a prime environment for young startups to adjust and make a statement with bold strategic choices. This phase allows companies to reorganize, in order to achieve efficiency.

Smart decision making is needed to endure a long bear market. It’s a time for startups to focus on the key ingredients in crypto: revenue, total value locked (TVL), and a community that uses the product or service.

We looked at one early-stage protocol that has managed to sustain its growth despite the market downturn: Ribbon Finance. It is a decentralized structured products protocol, which automates option selling strategies for depositors to generate yield on their assets.

Revenue is the total amount of income generated by the protocol. In Ribbon’s case, its revenue comes from the premium gained from selling options. On the graph below Ribbon Finance’s monthly revenue from inception and the fully diluted token value since its launch can be seen.


🧐 Starting a DAO in the USA? Steer Clear of DAO Legislation

A Primer on DAO Legislation in Multiple States

Guest writer Jordan Teague provides an invaluable state-by-state primer on DAOs and regulation.


When decentralized autonomous organizations (DAOs) blew up last year, the web3 community quickly realized that forming legal entities around their operations could save them a lot of trouble. Legal entities could limit the liabilities of their participants, increase certainty about tax jurisdiction, and make it easier to transact with the real world.

Before lawmakers wrapped their heads around DAOs, a number of projects used existing U.S. legal structures, such as unincorporated nonprofit associations, cooperatives, and LLCs. However, none of these options were created with blockchain in mind.

Things changed when some U.S. states passed legislation to create new types of legal entities custom-made for DAOs and crypto-native companies, including Vermont’s BBLLC, Wyoming’s DAO LLC, and Tennessee’s DO LLC.1

















DeFi Guide


💜Community Love💜

Thanking all the amazing Defiers for the support and love this week (and always)!


Phil McKenzie @PAWmckenzieWell balanced article on the current state of the market and what to expect in the near future as a web3 company or founder looking for funding - overall a reset to focus on well built companies w appropriate DD & valuations - thanks ⁦@DefiantNews⁩


thedefiant.ioCrypto Founders Scramble as ‘Outlandish’ Era of Easy Money Ends - The DefiantLast year, crypto founders had it easy: all they needed was an idea and a mediocre team that could put together a semblance of a crypto project. Then bam! Startups could raise $10M in seed rounds and notch $100M valuations, even before they had an actual product.8:57 AM ∙ Jun 4, 202214Likes4Retweets


Chris Okada @ChrisOkadaGreat interview by @DefiantNews | first publications to ask about the difficulties tying blockchain to ACRIS (NYC’s real estate registration systems)


The Defiant @DefiantNewsThe future of real estate? 🏠 A $26.5M building in one of New York City’s most fashionable neighborhoods appeared on NFT marketplace @Opensea this week. “Yes, you get the property after buying the NFT.” says @ChrisOkada @aleks_gilbert reports 🔗👇 https://t.co/tXnAqyUVBZ3:47 AM ∙ Jun 4, 20229Likes2Retweets


Shibuya @shibuyaxyz🐇🔥 Our amazing founder @pplpleasr1 gives @DefiantNews a run down on what White Rabbit is all about! Full podcast found here: youtube.com/watch?v=Ankdo6…8:26 PM ∙ Jun 2, 202295Likes13Retweets


zico.eth 🤖ᵍᵐ 🔴✨🏴 @zico_ethenjoyed this! give it a listen if you're into web3 fashion


The Defiant @DefiantNewsIn this week's podcast 🎙 @CamiRusso is joined by @AHoppenbrouwer, co-founder of @thefabricant, a digital fashion house for the metaverse. 👤 Fashion as digital identity 👜 Purpose and compatibility of digital garments 🖼️ Development of the metaverse 👇 https://t.co/71yi3Vy1Fs1:27 AM ∙ Jun 9, 20223Likes1Retweet


The Defiant @DefiantNewsDid you know we have a public Discord server? 👀 Come chat with OGs, make frens, meet like-minded alpha hunters, and talk everything DeFi Open to everyone 💚✊ discord.gg/FQQ8CCKKZK


discord.ggJoin the The Defiant Discord Server!Check out the The Defiant community on Discord - hang out with 4,260 other members and enjoy free voice and text chat.9:28 PM ∙ May 17, 202245Likes9Retweets


Messari @MessariCrypto.@kunalgoel's recent report on the valuation of @optimismPBC was linked in an article from @DefiantNews on claiming the $OP airdrop. Check out the full article below:


thedefiant.io$OP is Live! A Guide To Claiming The Airdrop - The DefiantA step-by-step guide to claiming Optimism’s $OP airdrop.8:15 PM ∙ Jun 1, 202220Likes5Retweets


Camila Russo @CamiRusso💜 The Infinite Machine NFT collection first IRL event! Thank you @YAPGlobalTeam for organizing, @luxviridi1 for hosting, @HPictur for tonight's art, @yyctrader1 for the tech, @megdematteo, @elaineyyly, @AiiraMeridA and Ale Miranda for the fun panels & everyone who joined!


3:47 AM ∙ Jun 10, 202249Likes14Retweets


mikest.eth 🐼 @mikestepanovicJust finished this work of art from @CamiRusso! Some takeaways: 1. Ethereum has always been deeply international. As a network; as a team. 2. Eth today is the result of many small, tough leadership decisions. Not luck. 3. Wtf CryptoKitties was a devcon project?! Go read it!


3:08 AM ∙ Jun 10, 202256Likes10Retweets


Megan DeMatteo @megdematteoHanging on every word of @elaineyyly and @CamiRusso’s convo tonight at #Consensus2022. #WAGMAM


2:03 AM ∙ Jun 10, 20225Likes1Retweet


Diego Tovar.eth @diego_tovarFeliz que consegui entrar em mais um projeto NFT que acredito bastante. Se chama @ETHMovie e vai contar a história da Ethereum baseado no livro da chilena @CamiRusso. Todos os detentores do NFT terão benefícios antes, durante e depois do filme. #NFTCommunity @nftfyofficial


8:28 PM ∙ Jun 9, 202224Likes6Retweets

🧑‍💻 ✍️ Stories in The Defiant are written by Owen Fernau, Aleksandar Gilbert, Claire Gu, Samuel Haig, Jason Levin, 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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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, 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.