🦄 Recap: DeFi Week of Aug. 22
Hello Defiers! Inflection point, tipping point, mania, frenzy, monster rally… Pick your superlative. Are we tempting fate? The numbers were downright gaudy: OpenSea doubling its transaction volume — to $3B — for the second straight month; Terra’s LUNA up ...
Hello Defiers!
Inflection point, tipping point, mania, frenzy, monster rally… Pick your superlative. Are we tempting fate? The numbers were downright gaudy: OpenSea doubling its transaction volume — to $3B — for the second straight month; Terra’s LUNA up more than 225% in the last 30 days; some of Art Blocks NFTs recording 48,000% returns. Even DeFi domain names are posting triple-digit surges.
Pause. Exhale. Get your bearings. Gulp your Bloody Mary. Those are just some of the stories Brady Dale, Owen Fernau and our contributors covered this week and are featured here for your weekend perusal. And this explosion of enthusiasm is happening in the face of Washington lawmakers chucking any crypto-tax relief out the window in the forthcoming infrastructure bill. Whatevs, eh?
And yet underneath crypto’s virtual ticker-tape parade there’s some truly important developments underway in the technology itself. Ethereum’s scaling story is evolving at a rapid clip — make sure you watch The Defiant’s Jam Session #5 for the latest on the topic, hosted by our chiefess, Camila Russo. While you’re at it, make sure you tune in to Cami’s podcast with Dan Morehead of Pantera Capital — an investor who’s been active in blockchain since crypto’s Bronze Age.
Plus… we’ve got a raft of video tutorials and features from the peerless Robin Schmidt & Friends on MetaMask, fractionalized NFTs, and Mean Finance…
So, on reflection, maybe we can tempt fate and dive into DeFi Era in earnest. This week’s action is ushering it in.
The open economy is taking over the old one. Subscribe to keep up with this revolution. Click here to pay with DAI (for $100/yr) or sub with fiat by clicking on the button below ($15/mo, $150/yr).
With:
- Balancer, one of the leading DeFi automated market makers (AMM) for multiple tokens. Dive into their pools at https://balancer.finance/
- Kraken, consistently rated the best and most secure cryptocurrency exchange, which can get you from fiat to DeFi
- Aave, an open-source and non-custodial liquidity protocol where users can earn interest on deposits and borrow assets.
- The DeFi Pulse Index, by Index Coop - DPI is the easiest way to capture the upside of DeFi with the benefit of diversification. Buy DPI today on your favorite DEX.
Podcast
"There's Been a Zero-to-One Switch for Institutions and Crypto:" Pantera's Dan Morehead
In this week’s episode, we speak with Dan Morehead, the founder of one of the longest-standing and largest crypto funds. Dan founded Pantera Capital in 2003 as a global macro hedge fund. In 2013, Pantera began investing in Bitcoin and quickly shifted its entire focus into crypto. Today, Pantera manages $3.8 billion in digital assets and equity in blockchain companies. Dan said he got into Bitcoin because it was the most asymmetric trade he had seen in his career, and he still believes that’s the case.
🎙Listen to the interview in this week’s podcast episode here:
Video
📺 Jam Session #5: Ethereum Scaling
📺 Defiant Weekly: Deep Dive into Avalanche by Ava Labs
📺 First Look: Dollar Cost Average any ERC20 with Mean Finance
📺 Quick Take: What are fractionalized NFTs and why is Feisty Doge $NFD mooning?
📺 Tuesday Tutorial: How to use the new Metamask
Inbox Dump #22
For paid subscribers only — The Inbox Dump is where we include the updates and announcements that flood our DMs each week and didn’t make it to The Defiant’s content platforms. We also include a compilation of DeFi and crypto funding rounds in the past week so you have these in one handy place.
Weekend Read
✊🏼 Resist Hierarchy and Protect Financial Freedom: A Metaverse Manifesto
We’ve seen a rapid escalation of metaverse projects and build-outs this year — even Mark Zuckerberg is glomming onto the idea of using parallel digital spaces to change the way platforms like Facebook interact with users. In this essay for The Defiant, Shreyansh Singh goes to the barricades and calls for an all-out campaign to make sure the metaverse doesn’t fall prey to the command-and-control ethos of corporates, or any other hierarchical force. It’s a cri de coeur for our time.
While I don’t agree that we are already in the metaverse, it is true that we are staring v1.0 in the face. Humans have already surrendered a portion of their existence and autonomy to the digital world. That includes algorithms that govern our lives the same way a law of nature might, as well as communication, social interaction, and survival skills. We depend on our digital extensions to interface with the world.
It is very easy to imagine what v2.0 might look like. A true metaverse should be a persistent destination where users can go to experience a parallel “reality”. It would need to be highly interoperable between existing major platforms, as self-sufficient as possible, and with clear ground rules and protections that could not be broken. Essentially, it would be an autonomous zone for users to explore and create. No individuals or organizations should have leverage over the operations, or the people.
This picture is a joke, but it sums up technology talk this year. After the success of Ready Player One, everyone wants to create their own version of the metaverse. However, most, if not all, new projects fail to meet the basic qualifications for what a metaverse must be — a safe, fair environment where real money can be earned.
Opinion
🧞♂️ The Lowly Fixed Income Interest Rate is the Magical Motor DeFi Needs
In this opinion piece, Hasan Furkan Gök makes a great case for why that staple of TradFi, the fixed-income interest rate, has a valuable role to play in the evolution of DeFi. The upshot: By mitigating risk, such rates can draw more liquidity to the space, and a handful of platforms are already taking the plunge…
Have you watched Howl’s Moving Castle from Hayao Miyazaki? If you haven’t, please go check it out, it’s an amazing movie. As the name suggests, a magical castle roams across the landscape on a pair of spindly legs.
I find quite a parallel between this wonderful contraption and DeFi. The castle, devoid of symmetry and striking with its eye-catching distorted shape, is a hodge-podge of unrelated parts just like the protocols in the DeFi ecosystem. And the castle moves thanks to the fire demon Calcifer residing in its hearth. That’s not too different from the way the spirit of innovation and creativity motors the DeFi space.
Sound crazy? Well, consider how DeFi transitioned from a set of experiments conducted by tech geeks to the warzone of degen speculations. At this time, the implementation of fixed returns will be a reliable fuel in DeFi’s engines. It will stoke further adoption and let it roam the earth even more freely. And now that I’m done with metaphors, let’s dive into why we need fixed interest rates and how some of the current DeFi protocols bring it to space.
Research
🎆 48,000% Returns? Popping the Hood on NFT Mania
In this week’s IntoTheBlock column, Lucas Outumurocrunches the numbers on the soaring valuations in the NFT space.
WAVE NFT mania continues to grow, with new drops popping up everyday and Ethereum’s gas prices consistently back above triple digits. The recent wave into NFTs was further amplified by Visa’s acquisition of a CryptoPunk and Budweiser’s buy of the beer.eth domain.
IMPRESSIVE Prices of notable NFT collections such as CryptoPunks and Bored Ape Yacht club had already been climbing throughout the past month and accelerated this week amidst the institutional interest coming into the space. This has led to impressive growth in volumes trading at OpenSea and increased demand for the Ethereum blockchain.
PRICE The average price for a CryptoPunk recently reached 67 ETH, representing a 730% increase year-to-date. The even simpler Art Blocks Squiggles have done even better, with their average price up an astonishing 48,000% this year.
DEMAND The success of NFT collections like these has led to a flood of new projects launching their NFTs seemingly everyday now. From apes to penguins to koalas, and with several copycats of CryptoPunks, the supply of NFTs appears to be increasing to fill the large surge in demand.
Friday
News
- Bug in Leading Ethereum Node Software Has Caused the Chain to Fork: A bug in outdated versions of the leading Ethereum client for node operators, Geth, is causing forks on the chain, according to research by the Block.
- Axie Infinity Maker Reminds Players to Pay Taxes: Axie Infinity, the gigantically popular play-to-earn game in the style of Pokemon, is helping gamers supplement their incomes and even make a living. Now the maker of the game and regulators are reminding users internet money will not free them from the tax man.
- Owners of Internet Domain Names Can Start Receiving Crypto With Their Addresses:Domain name owners can now start receiving crypto, including BTC, ETH and NFTs thanks to an integration with Ethereum Name Service.
- Lyra Plunges into Layer 2 Options Pool with Offering for Hedge Hungry InvestorsWith the market for Layer 1 tokens such as AVAX red hot this month, it would be easy to overlook a development on the Layer 2 side of the DeFi universe. Yet three days ago Lyra, a cryptocurrency options platform, released a new offering that will let investors trade on Layer 2, a catch-all term for applications that improve the scale and speed of blockchains tied to Ethereum.
- The Uniswap of Avalanche Is Having its Biggest Week EverThe decentralized exchange Pangolin, the Uniswap of the Avalanche blockchain, is having its biggest week to date, and the week isn’t over.
Links
- Cuba Regulates the Use of Virtual Assets for Commercial Transactions: CoinDesk
- Cross-chain governance and open-sourcing the Aave UI: Medium
- 3LAU Launches Blockchain Music Investment Company Backed By Paradigm And Peter Thiel’s Founders Fund: Forbes
- Get the lowdown on crowdloans on @Polkadot and @kusamanetwork and how to participate, and upcoming crowdloans: DeFi Pulse
- DIA Product Update: DIA
Thursday
News
- Layer 1 Boom Drives Terra’s LUNA Token to the MoonAnd you thought Solana was hot. Well, it is, but Terra’s LUNA token has eclipsed SOL in the last month. LUNA has skyrocketed about 265% in the last 30 days compared to SOL’s 150% performance, according to CoinGecko. While Avalanche’s AVAX token has more than tripled in value in that period one thing seems clear amid all this froth — investors love Layer 1 protocols.
- Decentralized Domain Name Sales Jump 300% Amid Budweiser’s Buy of “Beer.eth”Anheuser-Busch InBev now owns the Web3 domain “beer.eth.” Meanwhile, no one is doing anything with Web 1.0’s beer.com. Beer.eth sold for 30 ETH on August 12, and AB InBev, which owns Budweiser, Bud Lite and many other major beer brands, confirmed to CoinDesk Wednesday that it was the buyer.
- Can Anyone Say Exponential? OpenSea Doubles NFT Sales for Second Straight MonthIt wasn’t too long ago — two-and-a-half weeks, to be precise — that Nate Chastain urged restraint. The NFT market had yet to reach an inflection point, the head of product at OpenSea told The Defiant’s Camila Russo in her weekly podcast. There was still plenty of room to run.
Links
- How to Use SIREN v2 on Polygon: DeFi Pulse
- Into the Chef’s Jacket with Mudit-San: Head of Exploit Prevention & Spicy Tweets: SushiSwap
- Crypto soars to account for 73% of trading commissions on eToro in Q2: CoinTelegraph
- Facebook Considering NFT Support in Novi Digital Wallet: CoinDesk
Wednesday
News
- Washington Forgets About Crypto With Infrastructure Bill Set to PassThe Speaker of the House, Nancy Pelosi, on Tuesday committed to pass the President’s bipartisan infrastructure bill by the end of September. Many in the cryptocurrency industry in the past few weeks have rallied to fight the legislation under the argument that the Internal Revenue Service will place excessive reporting requirements for participants in blockchain’s consensus-making process.
- Circle Dials Back Risk in USDC Reserves Ahead of Going PublicCorporate debt is no longer good enough for Circle, the blockchain powerhouse. That’s the upshot of a move Circle announced on Sunday as it unveiled a rebalancing of the reserves that support USDC, its widely used stablecoin. Circle, a peer-to-peer payment platform powered by blockchain technology, will now solely use cash and short-duration U.S. Treasury instruments instead of a mix of government and corporate bonds.
- Defiers Are Apeing Into Avalanche Pushing Benqi Finance to $1B in TVLAvalanche, a smart contracts platform, now has its first DeFi protocol with $1B in total value locked. The protocol, Benqi Finance, launched just four days ago on Aug. 19 and has been distributing $3M in AVAX tokens to users. AVAX tokens are from Ava Labs, the company that created Avalanche, and the distribution is part of its recent announcement to offer $180M in liquidity mining incentives to DeFi apps built on its blockchain.
Links
- MicroStrategy Acquires 3,907 Additional Bitcoins with Proceeds from ATM Facility Sales: MicroStrategy
- Project Galaxy Announces “Shadowy Super Coder” NFT Pack with $300 Million Worth of Perks: Medium
- Penguin Finance Will Integrate Chainlink VRF to Secure the Penguin Arena Gamified dApp: Medium
- Sushi Joins Avalanche Rush Incentive Program with Combined $15M Allocation: Avalanche
- Philippine regulator tells Axie Infinity players they must pay tax on income from game: CoinTelegraph
Tuesday
News
- NFT Rally Paves Way for Fractionalization and DerivativesNFTs are a simple idea, but not for long. We’ve already seen how they’re being tapped as collateral for loans. Now more complex instruments are coming, thanks in part to projects breaking NFTs into pieces in a process called fractionalization.
- NFT Roundup: Floors Up 2X, Visa Apes In, and a Fidenza Sells for $3.3MNFTs have pulled in huge money and a notable financial incumbent fan in the past couple days. Investor appetite for NFT art and collectibles shows no signs of abating. Sales volumes on OpenSea, the largest NFT marketplace, topped $100M for three consecutive days, a new record for the platform.
Links
- A better design for defi grant programs: Cryptoeconomics
- How Large is the Market for NFTs?: Mechanism Capital
- Eligible $ALPHA and $SUSHI communities can now claim a special Alpha-Sushi NFT: Alpha Finance Lab
- Institutional investors bet big on Solana while BTC outflows persist: CoinTelegraph
- NFT unicorn OpenSea sets sights on improving customer experience with $100 million war chest: The Block
💜Community Love💜
Thanking all the amazing Defiers for the support and love this week (and always)!
youtu.beDeFi & Fintech Roundtable: Who eats who?This roundtable dives into how and if the gap between Fintech and DeFi will be bridged. The all-star panel discusses whether Fintech will adopt DeFi on the b...6:52 PM ∙ Aug 22, 202124Likes5Retweets
RichBuffalo.eth 🦇🔊 @RichBuffalo_ETHCrazy valuation. Excellent video from @DefiantNews was all over Fidenza from earlier this month. youtube.com/watch?v=vsQQWj…
eric.eth @econoarSomeone just bought a Fidenza for 1,000 ETH. https://t.co/RL6Au4yDga7:52 PM ∙ Aug 23, 20214Likes1Retweet
Pendle @pendle_fiGood overview (and graphics) on the yield landscape by @DefiantNews
The Defiant @DefiantNews📊Yield volatility may be an impediment to adoption, as those looking to replace a savings account look for predictable cash flows. Hasan Furkan Gök explores #DeFi protocols that offer fixed yields👇 @88mphapp @pendle_fi @element_fi @NotionalFinance https://t.co/5K0YRBG8Qi https://t.co/CDydqnOO0M2:38 AM ∙ Aug 24, 202132Likes5Retweets
The Defiant @DefiantNews⏰Jam Session on #Ethereum Scaling starts in 60 minutes, join us live! ⭐️Panel⭐️ @MihailoBjelic / @0xPolygon @EliBenSasson / @StarkWareLtd @ben_chain / @optimismPBC @gluk64 / @the_matter_labs @sgoldfed / @OffchainLabs @jbaylina / @PolygonHermez 👇 https://t.co/XMb79hIhZi8:36 PM ∙ Aug 26, 2021105Likes18Retweets
Cristobal Pereira @cristpereiragGran trabajo de @NatyShi_ traduciendo la guía de #DeFi101 de @DefiantNews al español!! Para toda la comunidad hispano-hablante. Recuerda suscribirte al newsletter 👉🏻 defiantes.substack.com https://t.co/i7HicATpZh
NatyShi 🦇🔊 @NatyShi_Nuevo artículo en español en el substack the @DefiantNews sobre #DeFi101 👉La importancia de la confianza, y evitar los intermediarios y censuras🤯 Suscribete en https://t.co/GEbcE4QQIP para recibir gratis estos articulos y más! https://t.co/l5X8c5wW6J @cristpereirag @CamiRusso1:10 PM ∙ Aug 25, 202111Likes1Retweet
3:11 PM ∙ Aug 25, 202117Likes2Retweets
YIELD App @YIELDappHear what @CamiRusso of @DefiantNews has to say about how the internal governance led by Decentralized Autonomous Organizations (DAOs) plays out in practice. ⬇️ (1/2) 1:00 PM ∙ Aug 25, 202158Likes19Retweets
The Defiant @DefiantNews📯The crypto industry sprang to action earlier this month when the infrastructure bill came with a provision to expand the definition of brokers to include blockchain ecosystem participants. @davesaidthat_ dives into the current regulatory landscape👇 https://t.co/ekLYPM530P11:47 PM ∙ Aug 20, 202111Likes3Retweets
8:05 PM ∙ Aug 24, 202139Likes3Retweets
The Defiant @DefiantNews📊Yield volatility may be an impediment to adoption, as those looking to replace a savings account look for predictable cash flows. Hasan Furkan Gök explores #DeFi protocols that offer fixed yields👇 @88mphapp @pendle_fi @element_fi @NotionalFinance https://t.co/5K0YRBG8Qi https://t.co/CDydqnOO0M6:42 AM ∙ Aug 24, 20216Likes2Retweets
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)
Free newsletters
Good reporting. Delivered.
Choose your coverage: crypto and DeFi, the future of finance, or both.
Free. Unsubscribe anytime.
