🦄 Recap: DeFi Week of July 31

Hello Defiers! Happy weekend!

In a week filled with surprises perhaps the biggest one was Ethereum Classic. Long overlooked as a strange vestige of an ancient era, ETC rocketed 174% in recent weeks. So what’s going on? Sam Haig, who’s been covering The Merge, delved into the market mystery and reported on the forces driving the surge in ETC’s value.

Speaking of The Merge, Sam also wrote a deeply reported story on how PoW die-hards are girding to fork Ethereum after it shifts to Proof-of-Stake. They’re miffed by the prospect of losing their investments in mining hardware.

Someone else who’s miffed is Arctic Alpha, one of the many users who got burned when a ‘crowd-hack’ ripped off Nomad, the cross-chain bridge, for $190M. Aleksandar Gilbert interviewed Arctic Alpha and Federico Kunze Küllmer, the co-founder and director of the Evmos blockchain, to report on how bridges have become a highly exploitable component of crypto’s architecture. The future of these ventures has been called into serious question.

As for the future of decentralized exchanges, Camila Russo engaged Will Warren of Ox in a fascinating discussion on the challenges and opportunities in this crucial space. Warren shared his insights on the impact of the bear market and miner-extractable value (MEV).

Meanwhile, on the NFT front Owen Fernau reported on the surprising decision by Yuga Labs, the Bored Ape creator, to charge fees on sales of Meebits collection in the secondary market. Robin Schmidt and his team picked up on that news, too, and asked which collections might be next (CryptoPunks???) with a wry Quick Take on our YouTube channel.

If all that isn’t enough, check out Sam Haig’s deep dive into the drama surrounding the appointment of a new “head chef” at SushiSwap. The DEX has been roiled by a bitter battle over the selection process and compensation package for the prospective new chief. It’s a rare look inside the debates that are shaping the future of governance in DAOs.

Last but not least, check out our new look… The Defiant website has undergone a makeover. Coming on the heels of the soft launch of The Defiant Terminal, we’re delighted to be cranking out new offerings for you all!

Enjoy!

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⍺ DeFi Alpha: Earn Higher Stable Pool Yields With Velodrome On Optimism

Podcast

🎙 Listen to the exclusive interview with Ox’s Will Warren:

This week on The Defiant Podcast, we speak with Will Warren, founder and CEO of 0x labs, one of the oldest and largest decentralized exchanges. 0x API is currently the 5th largest DEX by trading volume but is structurally different from other DEXs as it aggregates liquidity from multiple venues.

We talk about the effect this bear market has had on the DEX ecosystem and how sliding prices have affected DEX volumes in 2022.

We discuss the evolution of DEXs, having seen some massive innovations such as concentrated liquidity with Uniswap V3. Will goes on to talk about the major impact that miner-extractable value (MEV) has had on the DEX sector.

Will hopes to see more real-world DeFi adoption in terms ofstablecoins, decentralized exchanges and trustless lending and borrowing solutions, so people can have an alternative to their local financial systems.

Finally, Will talks about 0x’s vision to see a world where all forms of value are tokenized on public blockchains, from fiat currencies, stocks and bonds, to video game items and airline miles.

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The Tube

📺 Hot Stuff: Volatility's Best Friend: VOLT #05

📺 Tuesday Tutorial: Is this a better way to do multi-chain DeFi?

📺 Quick Take: Yuga adds royalties to Meebits, what's next?

📺 The Defiant Weekly: Ben Mauro spent 10 years bringing Huxley to life. WORTH IT. (with Steven Ilous -Feature)

Special Report: The Merge

👀 PoW Die-Hards Plan to Fork and Mine Their Own Ethereum Chains After The Merge

In which Samuel Haig reports on the ramifications of Ethereum’s big move…

There is no doubting the excitement in DeFi. The biggest upgrade in the history of Ethereum is rapidly approaching. The Merge will convert Ethereum into a Proof-of-Stake-based blockchain from a Proof-of-Work one. The shift will make the No. 1 blockchain for smart contracts and dApps faster and more affordable. Jazzed investors have sent Ether soaring 52% in the last 30 days.

But not everyone is happy. Some die-hard miners are facing the obsolescence of billions of dollars worth of mining hardware and a fall in revenue. And they are threatening to maintain the original, Proof-of-Work version of the Ethereum network to protect their investment.

To protest, they could fork off and create their own PoW versions of Ethereum when the upgrade takes effect. The forked networks would maintain the same wallet balances and transactional history as Ethereum prior to the chain-merge.

DEEP DIVE

🦹🏻‍♂️ Blockchains Wrestle with ‘Significant Threat’

Nomad Hack Exposes Weakness of Cross-Chain Bridges

Aleksandar Gilbert talks to a victim of the Nomad hack and a blockchain chief to report on the future of bridges…

Earlier this year, a Cardano user going by the pseudonym Arctic Alpha was frustrated there were no dollar-pegged cryptocurrencies on his preferred blockchain. So he decided to use a bridge protocol called Nomad to bring “multiple six figures” of USDC he’d purchased on Ethereum to Cardano.

Arctic Alpha deposited the USDC on Nomad, and Cardano minted an equal number of “wrapped” USDC. He put the wrapped USDC into a liquidity pool on Cardano and, for a while, earned between 20% and 30% APR on his deposit.

When the crypto market tanked this year, the APR on his deposit tanked with it, and Arctic Alpha decided to withdraw the USDC, leaving a hair over $100,000 in Nomad, just in case.

Monday night, scrolling through Twitter, he saw something that made his heart sink. “Someone said, ‘Hey, [here’s] a little breakdown of what happened on Nomad,’” he told The Defiant in an interview this week, “and I was like, ‘You gotta be kidding me.’”

Special Report: The DAO Dilemma

🍣 SushiSwap ‘Head Chef’ Narrowly Wins Vote

Contentious Debate Over Pay Continues as New Poll Approaches

In which Samuel Haig continues his coverage of the drama roiling SushiSwap’s quest for a new chief executive…

Governance has spoken, and the SushiSwap community remains divided on a proposed candidate for its leadership position of “head chef”. In a poll, members of the decentralized exchange’s governance forum voted to elect Jonathan Howard, a software engineer, as its chief executive by a slim majority of 53%.

The result comes after more than a week of inflamed and divisive discourse within the SushiSwap community. Many governance forum members were miffed by what they considered Howard’s exorbitant pay package: the head chef may have pocketed more than $10M if certain SUSHI token price targets and other bonus criteria are met.

The poll was a “temperature check” to determine the sentiment of the membership. Now Howard’s appointment will move to a binding poll in which tokenholders will vote proportionately to the SUSHI they hold. No date has been set for the next vote.

Even so, many community members and Sushi insiders believe there should be a separate vote on the prospective head chef’s compensation package. “It doesn’t feel like we negotiated the compensation package,” community member Nickjrishwait posted. “This probably should have been two proposals.” So the drama is far from over.

Friday

NFT Roundup

• Moonbirds’ Public Flight Sparks Debate About Intellectual Property RightsMoonbirds are now in the public domain. On Aug. 4, project founder Kevin Rose said that the popular owl-themed NFTs would be moving to a CC0 public license along with Oddities, their companion collection.

DeFi Tutorials

• What Is a Bear Market?Bulls and bears are powerful animals. A bull tends to charge ahead, pitching its horns upwards. Bears tend to pummel downward and eviscerate their prey.

Elsewhere

• Master of Anons: How a Crypto Developer Faked a DeFi Ecosystem: CoinDesk
• Voyager approved to return $270 million in cash deposits to customers: The Block
• Coinbase selected by BlackRock; provide Aladdin clients access to crypto trading and custody: Coinbase
• An explanation—and sincere apology—for the @tezos outage on@rarible that lasted nearly three weeks.

Thursday

News

• Wallet Provider Slope Blamed For Solana BreachSolana wallet provider Slope has been identified as the source of a hack in which attackers stole an estimated $8M in USDC, SOL and other crypto assets, according to a brief analysis released Wednesday by the Layer 1 blockchain.
• Plumbing Google Search Data for Clues on Crypto Market’s DirectionCalling the bottom of the market is one of the toughest tasks for investors. How do you know when the worst is over and maybe, just maybe, it’s time to get back in and do some buying?
• Filecoin Storage Up 128% This QuarterWe live in the age of data. Whether it’s backing up our cell phones and photos or corporations storing their records, our appetite for storage continues to grow, with global data storage predicted to hit 181 ZB (zettabytes or 1021 bytes) by 2025.

DeFi Explainers

• What Is Cryptocurrency Market Cap? Investors use market capitalization as the yardstick to measure both stocks and cryptocurrencies. A publicly-traded company’s market capitalization is synonymous with its value.

Elsewhere

• Sam Bankman-Fried: Solana is the most underrated token right now: Fortune
• Crypto VC firm Hashed confirms losing more than $3 billion in luna crash: Bloomberg
• Goerli/Prater Merge Announcement: Ethereum Foundation
• Proposal by @lemiscate to freeze Fantom Market due to unbalanced risk/reward: Stani Kulechov

Wednesday

News

• Wallets Drained In Ongoing Solana Breach as Network Solicits Input from UsersLayer 1 blockchain Solana is in the midst of an apparent system-wide breach, with users finding their wallets emptied and NFT marketplace Magic Eden urging others to change their wallet settings to protect any remaining assets.
• Nomad ‘Crowd-Looting’ Triggers Exodus From Other BlockchainsUsers have fled blockchains affiliated with Nomad, the bridge protocol that was emptied in an exploit Monday evening. By Tuesday, users had withdrawn more than half of the value locked in Moonbeam, and one-third of the value locked in Cardano since the attack began, according to data on Defi Llama.

Markets

• Ethereum Classic Shakes Off the Dust and Rockets 174%It’s one of the mysteries of the summer rally. Ethereum Classic, that often-overlooked fork from the early days of the Ethereum, has skyrocketed 174% since July 13.

Elswehere

• Ethereum Name Service Domain Registrations Hit All-Time High as Merge Approaches: Decrypt
• The zkEVM Wars | zkSync and Scroll: Bankless
• MicroStrategy's Bitcoin Maximalist CEO Saylor Hands Job to Deputy, Takes Executive Chairman Role: CoinDesk

Tuesday

News

• New Aave Stablecoin Clears First HurdleIn a move that may disrupt the stablecoin market, Aave, the leading money market protocol, is poised to create a fully collateralized stable token called GHO.
• CryptoPunk Holders Unfazed By Meebits’ Move To Add RoyaltiesYuga Labs doesn’t appear to be printing money the same way they were in 2021. Meebits, a popular NFT project, sent shockwaves through the NFT space when it activated a 5% royalty fee on secondary sales of its NFTs on July 28.
• Nomad Bridge Hacked With $45M StolenNomad, a protocol allowing users to move digital assets between different blockchains, is being actively hacked on Monday evening.

Markets

• The Merge Drives Value of ETH Options Past BitcoinIf investors needed any more evidence The Merge is driving a rally in Ethereum here’s one more compelling datapoint: Open interest on ETH options just leapfrogged Bitcoin.

Elsewhere

• Why DeFi Giants Aave, Curve May Want Their Own Stablecoins: CoinDesk
• CryptoPunk Ethereum NFT Sales Jump 248% After Tiffany Launch: Decrypt
• Open Source Ethereum 2.0 Beacon Chain Explorer: Beaconchain
• Thanks to everyone at @lollapalooza for another great weekend: Solana

💜Community Love💜

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

ConsenSys @ConsenSys🎙️In this episode of the #SignalPodcast, listen to @CamiRusso, Founder of @DefiantNews, as she talks about: ✨Ethereum and the crypto space from a journalist POV ✨Why financial markets are an objective way to look at reality ✨NFTs and more! bit.ly/3cV9JH110:00 PM ∙ Aug 2, 202227Likes7Retweets

Camila Russo @CamiRusso🗻"Everything seems to be crashing downhill, but we are actually climbing this web3 mountain" with use cases like decentralized storage and carbon credits. great talk @PiscioneAndrew! youtube.com/watch?v=Htl4Eg…

5:27 PM ∙ Aug 2, 202218Likes3Retweets

The Defiant @DefiantNewsNew website, who dis? 😎 Redesigned from the ground up with huge speed improvements for a much better user experience Check it out and let us know what you think! ✨👇 thedefiant.io

thedefiant.ioDeFi News | Your trusted guide to DeFi, Ethereum & Web 3.0 - The DefiantThe latest DeFi, Ethereum, and Web3 news from The Defiant. In-depth DeFi guides and analysis to help you find the important developments in DeFi.5:42 PM ∙ Aug 4, 202228Likes9Retweets

Sergito / KingofMeebits.eth ⌐◨-◨ @sergitosergitogm! Have y’all read “The Infinite Machine” by @CamiRusso? Feels like it should be canon for anyone in NFTs.2:46 PM ∙ Jul 30, 202245Likes6Retweets

The Defiant @DefiantNews🔗: techcrunch.com/2022/08/03/sta…

techcrunch.comStarbucks to unveil its web3-based rewards program – TechCrunchStarbucks plans to enter the web3 space, noting its NFTs wouldn’t just serve as digital collectibles, but would provide owners with access to exclusive content.10:47 PM ∙ Aug 3, 202213Likes2Retweets

🧑‍💻 ✍️ 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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