🦄 Recap: DeFi Week of Jan. 23

Hello Defiers! Happy weekend!

Selloffs, scandals, scams… Those were the watchwords this week as a flurry of unsavory news whipped the crypto markets. There was the fiasco at Frog Nationwhen news broke that the influential group’s CFO, Sifu, was none other than Michael Patryn, co-founder of failed Canadian crypto exchange QuadrigaCX. Yyctrader followed with a nice piece of analysis on how the fallout was affecting Wonderland and other names in the Frog Nation pond, and triggering death threats against impresario Daniele Sesta. All this comes right on the heels of Frog Nation’s move to take the reins at SushiSwap, as Brady Dale reported.

In a juicy scoop, Robin Schmidt landed a one-on-one interview with Andre Cronje, the brains behind Yearn Finance, to discuss his recently unveiled joint venture with Sesta in Solid Swap.

We were delighted to welcome our old friend and colleague Dan Kahan back to the The Defiant with an amazing saga about the unraveling of a would-be NFT play involving Naruto, one of the biggest-selling mangas of all time. Dan uncovered a licensing scam that had duped the entrepreneurs behind a project called Bejutsu. In his telling, this type of grift is very easy to perpetrate in the untamed borderlands of NFT creation.

Meantime, the markets were tanking. Owen Fernau delved into how MakerDAO and Aave were coping with liquidations. Owen also reported how MakerDAO broke new ground on the governance front by expelling its content production team in a narrow vote of members. The story is a preview of how DAOs may deal with thorny issues as they mature.

If all that wasn’t enough drama, The Defiant Chiefess Camila Russo sat down with Kain Warwick, a DeFi OG and founder of Synthetix to talk about synthetic assets.

Enjoy!

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📬 Inbox Dump #40

Our Inbox Dump newsletter, which is exclusive to paid subscribers, 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. Sometimes announcements here didn’t meet the bar to become a news story, sometimes they may have slipped through the cracks, or they came late and we haven’t had a chance to cover. We also include a compilation of DeFi and crypto funding rounds in the past week so you have these in one handy place.

Podcast

🎙 Synthetix's Kain Warwick: What it Takes to Scale an Ethereum DeFi Protocol

This week, we sit with Kain Warwick, DeFi OG and founder of Synthetix. In some ways, last year wasn’t a great one for the synthetic assets protocol. As many DeFi projects boomed, SNX’s price and TVL dropped. Kain says he was too optimistic about how soon Synthetix would be able to scale with optimistic roll-ups. If he were to do things again, he would probably use Polygon first and move to Optimism once the solution was ready.

But last year was also a time to build on a strong foundation. He’s looking forward to the months to come, when all of that effort hopefully comes to light, with the protocol fully live on Optimism, with perpetual swaps expected to be launched too. He’s a firm believer that Ethereum and its Layer 2 solutions will capture the most value being built in DeFi and web3.

Defiant Interview

EXCLUSIVE: Head to Head with Andre Cronje || a Defiant SPECIAL

The Tube

📺 Real Vision vs. The Defiant: CAN DEFI WITHSTAND BIG LIQUIDATIONS? w/ RAOUL PAL

📺 First Look: Cardano's first DEX is here. Does it work? | SundaeSwap First Look

📺 Tuesday Tutorials: NFT Scams - How To Avoid Them

📺 Quick Take: Market Dump, NFT pump + Metaverse giants roll in

📺 The Defiant Weekly: DeFi 2.0 is dead, its spirit lives on in Fantom ve(3,3)

Defiant Saga

🥷🏻 ‘Believe It!’ How a Manga-Loving Geek Exposed the Scam Targeting Naruto NFTs

In this exclusive feature for The Defiant, Dan Kahan reveals how he uncovered a copyright scam targeting one of the most beloved mangas of the last quarter century.

“It’s almost like they joined a cult. The more I question, the more they think I’m hating. I just want to protect them.”

By the time I received this message on Dec. 30, I’d already spent a month investigating Bejutsu — a massively hyped NFT project claiming to hold the official license for intellectual property from Naruto, one of the most popular manga series ever published. Fueled by a lifelong passion for anime and manga and a gut feeling, I was convinced Bejutsu was a scam. But I couldn’t prove it beyond a shadow of a doubt.

Until now. The message came from a friend of one of the artists working for Bejutsu. Suspicious about the project’s legitimacy, he sent me a copy of Bejutsu’s purported licensing agreement. As soon as I saw the contract—an elusive piece of evidence that, by this point, I’d been hunting down for days—I knew I’d found Bejutsu’s smoking gun.

Nearly everyone I spoke to who was involved with the project asked me to wait before going public. That included artists, staff, and Clay Taylor, Bejutsu’s self-assured co-founder. They gave me the same cryptic response: Bejutsu’s proof will come on Jan. 7. Just wait until Jan. 7.

But in the hype-fueled NFT space, even unknown projects can sell out within minutes of an unannounced stealth launch. Naruto sits at the intersection of pop culture nostalgia and rabid anime fandom. Officially licensed Naruto NFTs possessed the potential to skyrocket. And Bejutsu was designed to turn its characters and imagery into NFTs that would sell for millions. At least, that was the plan. And Clay’s instincts were spot on — Bejutsu attracted 40,000 followers to its Twitter account before it even launched. And 10,000 users flooded its Discord server within a minute of opening. I wanted to stop the scam before it reached wider audiences.

Research

🖼 Exclusive DappRadar Report: Why are NFTs Sidestepping the Crypto Crash?

It’s one of the most intriguing questions in the market during this turbulent period. Our friends at DappRadar unpack the forces that are charting a separate course for NFTs.

In recent weeks, a combination of macroeconomic events has shaken the markets, reminding everyone about the industry’s latent risks and ubiquitous volatility. The problems in Kazakhstan around Bitcoin mining made waves. With a new COVID outbreak, the unease about a likely rise in the interest rates by the Federal Reserve and the latest political issues in Ukraine created a hostile environment dragging capital markets down.

The correlation between crypto and traditional markets made the effect widely felt in blockchain assets, with Bitcoin and Ethereum’s ETH losing half their value since all-time highs in November. The same goes for BNB, ADA, SOL, AVAX, SAND, MANA, GALA, and several other cryptocurrencies performing well historically. The total crypto market cap shrunk to $1.6T from $2.9T in that period.

Source: DappRadar

Without question, the crypto market is currently experiencing a challenging period. The sentiment in the market signals fear. However, the metrics related to the performance of specific blockchain verticals like NFTs might suggest otherwise.

Understanding NFT Macroeconomics

While a group of events has hampered the crypto market, a series of factors have positively impacted the outlook of NFTs at a macroeconomic level.

Firstly, the inclusion of celebrities and big brands in the NFT world appears to be growing by the day. Stars with a massive social reach like Neymar Jr. (+200M followers on Twitter and Instagram) and Kevin Hart (+192M followers on Twitter and Instagram) have publicly announced their recent entries into the Bored Ape Yacht Club (BAYC), one of the premiere NFT projects.

Friday

News

Links

Thursday

News

Anchor Protocol Burns Through Its Reserves As Deposits Pile UpTerra’s DeFi protocol for savers is burning through its savings account. Anchor is the DeFi protocol meant to offer a safe, predictable return for DeFi’s conservative investors. It’s widely considered the benchmark yield for the whole industry and currently sits at 19.33%.
Frog Nation Hops into SushiSwap to ‘Clean Up’ Tumultuous ExchangeThe Frog Nation, a collective of crypto protocols meant to work together across multiple chains, has added SushiSwap to its ranks. What this means remains to be seen, but in a blog post from Frog Nation lead Daniele Sesta, it seemed that the team behind protocols such as Abracadabra and Wonderland will be taking over top level management at SushiSwap.
Google Searches for ‘NFT’ Outrun ‘Crypto’ As Asia Dominates ActionIn a sign that nonfungible tokens are picking up serious mojo despite market angst, Google searches for the term “NFT”are now firmly ahead of ‘crypto’ and “Ethereum”, according to Google Trends.

Links

Wednesday

News

MakerDAO’s Expulsion of Content Team Stirs Debate About Tougher GovernanceMakerDAO is DeFi’s oldest and arguably most effective protocol, punching well above its weight of $1.6B in market cap. Yet it’s still going through growing pains.
Messaging App May Bolster NFT Market by Connecting Ethereum UsersBlock explorer Etherscan has just launched Blockscan Chat, a messaging app that allows Ethereum users to chat with each other simply by connecting their wallets. Metamask and Wallet Connect are currently supported.
Investors Pile Into Opyn’s ‘Crab Strategy’ to Profit from a Sideways MarketOn Monday, the DeFi derivatives platform Opyn offered a way to bet on a sideways market, and investors took the wager.

Links

Tuesday

News

DeFi Investors Brace for Liquidations as MakerDAO and Aave Call in CollateralNow comes the liquidation phase. As crypto investors reckon with a 45% plunge in the value of the crypto market since November’s all-time high, the focus is now turning to the impact on leverage many investors use to amplify their earnings.
Cancel Your Old OpenSea Listings Or Risk Your Precious NFTs Being Spirited AwayA ‘bug’ discovered a few weeks ago in OpenSea, the leading NFT marketplace, enabled more than $1M worth of non-fungible tokens to be bought at huge discounts on Jan. 24.
Startup Aims to Give Crypto Investment Clubs a Web3 MakeoverPeople are teaming up all over crypto, but, according to the founders of Syndicate Protocol, investors lack web3 native ways to do so. “I’ve been an investor for eight years in the crypto and fintech space, and I’ve come to realize that literally builds the world,” Ian Lee, co-founder of Syndicate, told The Defiant in a phone call.
Polymarket Shuts Out U.S. Traders to Comply with CFTC SettlementPolymarket has shut U.S. traders out of its bets, but the prediction market remains live everywhere else. That’s the company’s solution following its recent settlement with the Commodity Futures Trading Commission (CFTC).

Links

💜Community Love💜

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

Locke 🦇 🔊 @Locke0x1689AD.@CamiRusso and #thedefiant one of most trusted Web3 news organisation out there, for impartial non-chain biased well researched news on Crypto can't go pass The Defiant.

The Defiant @DefiantNewsIn this week's podcast, @CamiRusso chats with @kaiynne, founder of @synthetix_io Synthetix took a big risk in being the first to move to @optimismPBC. While that didn't work out for $SNX last year, Kain believes they'll see their bet play out in 2022. https://t.co/V9mdA9Zn7f 6:49 AM ∙ Jan 25, 20226Likes1Retweet

Skyflop @_SkyflopReminder, cults are profitable. Even if your product doesn't work. Great video by @DefiantNews , they keep it real.

youtube.comCardano’s first DEX is here. Does it work? | SundaeSwap First LookSundaeSwap is a Decentralized Trading Protocol on Cardano. It’s a native, scalable decentralized exchange and automated liquidity provision protocol.https://...7:19 PM ∙ Jan 27, 20225Likes1Retweet

X Spark @XSpark10The Defiant News @DefiantNews You get the need to know No BS, it was their article that got me in to my first liquidity farm. It was like a lightning bolt, all of a sudden I understood how to do. #liquidity #crypto #AlphaNFT #news $snx $link $btc $ada $matic $bnc $gramf

kain.eth L222 @kaiynneThe last time @CamiRusso interviewed me I was in a stairwell at ETHBerlin in 2019, it was one of the first Defiant interviews. In 2022 the @DefiantNews is one of the most important media outlets in crypto, we cover DAO first, embracing FUD, Optimism & maintaining high conviction. https://t.co/ebo2sZkspw 7:55 PM ∙ Jan 25, 20223Likes1Retweet

DAOGEN @Daogenio1) The Defiant (@DefiantNews) - News If we were forced to follow just 1 media company covering Web3, it would probably take us 1 microsecond to choose The Defiant. They cover Defi, Web3, and NFTs better than most.4:43 PM ∙ Jan 24, 202211Likes1Retweet

Defi For Degens @defi4degensExplaining crypto to normies can be tiring, but the one area I always get pumped explaining is DeFi. I just go straight for @DefiantNews. #DeFi #defidaily #finance #decentralized 3:08 AM ∙ Jan 19, 202216Likes2Retweets

Guto Martino @gutomartino What a beauty of a convo @CamiRusso @IamSuperMassive open.spotify.com/episode/0W7OqF…10:36 PM ∙ Jan 27, 20227Likes2Retweets

Brightfield @Brightfieldmusic NFTs are pumping right now - get caught up with this stream from @DefiantNews #NFTs #crypto

youtube.comMusic NFTs Are So Hot Right NowGuestsVerite - https://twitter.com/VeriteDarlington - https://twitter.com/MonstercatCooper Turley - https://twitter.com/CooopahtroopaVector Meldrew - https:/...7:04 PM ∙ Jan 27, 202214Likes1Retweet

Cristobal Pereira @cristpereirag #Recap #DeFi de la semana gracias a @DefiantNews 🔊 Esta semana se abordan los problemas en #OlympusDAO, la importancia de la interoperabilidad y cómo las comunidades se están enfrentando a organizaciones como #OpenSea. 👉 defiantes.substack.com/p/-recap-defi-…

10:54 PM ∙ Jan 23, 202220Likes9Retweets

TzTok-Chad (💎, 💎) @tztokchad youtu.be/WW47MQ6YjIg nice vid on @dopex_io by @DefiantNews

youtu.beGet Paid to be a Loser with Dopex Rebates - ❓Dopex is a maximum liquidity and minimal exposure options protocolhttps://www.dopex.io/Our sponsorshttps://gmx.io/https://www.edennetwork.io/Follow The Defia...2:07 PM ∙ Jan 19, 202283Likes9Retweets

Tom Bilyeu @TomBilyeuTechnology is a one way street. Thank you @DefiantNews for having me on. 5:38 PM ∙ Jan 19, 202282Likes17Retweets

brooke (💖,💖) @miaobrookeexcited to finally read this! ✨

8:14 PM ∙ Jan 26, 202214Likes2Retweets

Dexible @DexibleAppThis week's @DefiantNews podcast with @CamiRusso interviewing @kaiynne is a must watch. Good discussion about conviction of decentralization and how that applies spanning stable coins and other synthetic assets to fundraising to protocol governance structures. Speaks to our soul!6:43 PM ∙ Jan 26, 20227Likes2Retweets

🧑‍💻 ✍️ Stories in The Defiant are written by Brady Dale, Owen Fernau, Sanuel 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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🦄 Recap: DeFi Week of Jan. 23

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