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The Defiant

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💸DeFi Faces Liquidity Crunch

The Defiant

DeFi Daily

Together with

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We look into how DeFi lenders are turning risk-averse in the wake of the Curve exploit. Next, we delve into Base's mainnet launch, set for Aug 9 with a host of major brands set to participate.

In regulatory news, we examine the intriguing prospect of Ethereum ETFs, as the SEC seemingly softens its stance towards digital assets. But it's not just finance that's feeling the blockchain impact - Starbucks, the world's largest coffeehouse chain, has dipped its toes into the NFT space, and initial buyers are holding on tight.

Finally, we scrutinize a recent IRS ruling on the immediate taxability of staking rewards, a decision that has sent ripples through the Web3 community.

✍️ In today’s newsletter:

  • Stablecoin borrowing rates spike on Aave
  • Base mainnet will open to the public on Aug 9
  • Major asset managers file Ethereum ETF applications
  • Starbucks NFTs buck bear market
  • IRS says staking rewards are immediately taxable

📈 Markets in last 24 hrs:

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ETH$1,870 0.67%
S&P 500$4,513 -1.38%
GOLD$1,937 -0.17%
Arch WEB30.88pts -1.87%
FINANCE0.94pts -2.69%
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Arch WEB3

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🎬 WATCH

Watch our video on the SEC's lawsuit against Richard Heart and HEX. And check out our podcast with Aya Kantorovich, the co-CEO and co-founder of Fractal.


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DeFi

DeFi Lenders Spooked By Curve Exploit

TLDR The $70M exploit of Curve Finance has led to a liquidity crunch on major DeFi lending platforms like Aave, with borrowing costs for major stablecoins at their highest in over a year. The leading DeFi money market has seen borrowing rates for USDC and USDT spike to over 22% and 18%, respectively.

SO WHAT The current situation represents a significant moment for DeFi as it challenges the perceived safety of core DeFi protocols. Moreover, it renews discussions about risk management in DeFi, as other platforms also grapple with how to handle CRV-backed loans.


SPONSORED POST

DeCommas Introduces Mission Control API for Web3 Developers.

DeCommas has been building Web3 and DeFi products since 2021, launching products like defi Strategies, cross-chain swap, portfolio-tracking and recently the revolutionary “Pathfinder feature”. In order to realize these tools a tremendous web3 toolstack has been developed. Today, DeCommas is announcing it’s making these tools available to Web3 builders across the globe!

DeCommas’ “Mission Control API” is a developers toolstack that offers a wide range of capabilities web3-, web3-curious and web2 developers build a multitude of web3 applications and features, such as portfolio trackers, web3 searchbars, asset swap features and activity feeds.

With response times under 250ms and a free tier allowing for up to 10,000,000 Computing Units the API is both the fastest and the most cost-efficient option available

Get free access, read documentation or learn more about Mission Control here: https://build.decommas.io/


Ethereum Scaling

Coinbase Layer 2 Base to Open Access for all Users on August 9

TLDR Base, the Layer 2 network developed by Coinbase, is set to launch its general access mainnet on August 9. The network will host over 50 entities, including big brands such as Coca-Cola and Atari, along with NFT marketplace OpenSea. Base has stated that it will offer daily NFT drops as part of its celebratory "Onchain Summer" campaign.

SO WHAT The project's association with Coinbase, one of the most recognized names in the cryptocurrency space, as well as partnerships with prominent brands, could potentially accelerate its adoption.


Markets

Seven Major Asset Managers File Ethereum ETF Applications

TLDR Seven applications for Ether futures ETFs have been filed with the SEC in recent days. Observers suggest the flurry of applications may be driven by a belief that the SEC is more likely to approve a spot Bitcoin ETF, which could in turn increase the chances of Ethereum ETFs getting approved.

SO WHAT If approved, these Ethereum ETFs could offer retail investors an accessible way to gain exposure to digital assets without dealing with the technical complexities of crypto. However, there is also criticism about the futures contracts underpinning these proposed ETFs, with some arguing that these financial instruments enable Wall Street manipulation while spot ETF approvals remain elusive.


NFTs

Starbucks' New NFT Collection Holds Up Amid Depressed Market

TLDR Despite a broader market downturn, the floor price of Starbucks' Green Apron NFTs remains resilient. Each NFT also comes with 1,500 points that can be used to upgrade Starbucks' loyalty-based Odyssey pass.

SO WHAT This move by Starbucks signifies another major brand recognizing the potential of NFTs and the broader digital asset space. By integrating the NFTs with their loyalty program, Starbucks is potentially setting a trend for other corporations to follow, linking digital assets with real-world benefits.


Taxes

IRS Rules Staking Rewards Are Immediately Taxable, Web3 Advocates Push Back

TLDR Web3 advocates are challenging the IRS's recent ruling that staking rewards are immediately taxable. According to the IRS's Revenue Ruling 2023-14, stakers must report the fair market value of rewards as gross income in the year they are received.

SO WHAT The IRS ruling adds to the increasing regulatory scrutiny faced by staking, with both Kraken and Coinbase having faced legal action from the SEC related to their staking services. Critics argue that the IRS's ruling overlooks the economic and practical reality of cryptocurrencies.


🔎 OUR REPORTERS ARE WATCHING


🌍 ELSEWHERE

  • Bitfinex Hacker Revealed: Razzlekhan's Husband Admits He Stole Billions in Bitcoin ( Decrypt)
  • Michael Saylor Says Bitcoin ETFs Will Be the ‘Super Tanker’ for His MicroStrategy ‘Sports Car’ ( Coindesk)
  • Monthly NFT sales fell for fifth consecutive month to $495M in July ( TechCrunch)

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