🦄 Recap: DeFi Week of June 12
Well, this was the kind of week Defiers have long feared, a brutal selloff triggered by not one but two major projects going sideways. First, there was the fallout from the decision by Celsius, the CeFi lender, to suspend withdrawals by its 1.7M depositor...
Well, this was the kind of week Defiers have long feared, a brutal selloff triggered by not one but two major projects going sideways.
First, there was the fallout from the decision by Celsius, the CeFi lender, to suspend withdrawals by its 1.7M depositors. Jason Levin covered the crisis and reported how a bank run threatened to drain the firm of capital.
No sooner had the market absorbed this sobering news than word came that Three Arrows Capital, the multi-billion crypto hedge fund that’s been such a huge supporter of DeFi projects, was facing serious margin calls. Aleksandar Gilbert reported how Three Arrows sold $40M of Lido’s staked Ether and dug into the significance of this liquidation. Jason followed later in the week with a story on how Three Arrows taste for leverage was sowing fear in the broader market about its potential collapse.
Meanwhile, Sam Haig unearthed an important development with two of the most influential DeFi projects: MakerDAO and Aave. Sam reported how MakerDAO members voted to freeze Aave’s ability directly borrow the former’s stablecoin, DAI. The move showed how one of the OGs in DeFi is being super careful with its exposure, and it’s the type of detail we love reporting at The Defiant.
Cami Russo and Robin Schmidt both served up incisive takes on the action. On Cami’s podcast, she spoke with the irrepressible Mati Greenspan, the CEO and founder of Quantam Economics,to get his dive on the state of play in the market. And Robin and his crew produced a series of Market Updates on Celsius and stablecoin pegs, as well as the news that Coinbase was shedding a fifth of its workforce.
Still, for all the fire and brimstone, the crypto market (in tandem with stocks) did stage a relief rally after the Federal Reserve raised rates 0.75% on Wednesday yet signaled it wasn’t committing to such sizeable hikes in the future.
We’re also excited about two new series at The Defiant. Yyctrader delivered the second column in our NFT Roundup franchise with a doozy of a story: Truth Labs revealed itself as the creators of the Goblintown collection. And Claire Gu debuted on The Defiant with our inaugural Bear Market Survival Guide. The first piece focuses on metrics investors should be eying in the market. We can’t wait for her next one!
Enjoy!
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This week:
Using Uniswap V3 To Dollar-Cost Average + Single-Sided LPs on Bancor V3
Podcast
🎙 Mati Greenspan: Only Those Who Are Well Funded or Most Committed Will Make it Through the Bear
This week on The Defiant Podcast we speak to Mati Greenspan. Mati is the CEO & founder of Quantum Economics, a crypto research and advisory firm. Mati believes we’ll keep seeing pain in the market, with crypto and stocks remaining highly correlated, as long as inflation persists. He says most sectors of crypto will be hit by this crash, because of reduced liquidity from dwindling token treasuries, or because demand for their platforms and apps will dry up.
Only those well funded and committed teams will make it through, and any project that survives a bear will see huge gains in the next rally. Still, he remains as bullish as ever on crypto, and believes staking is nothing short of the future of finance, and that DeFi will continue experimenting with different economic models. While most will fail, those that succeed will change the world.
A heads up that this interview was recorded last week, right before the Celsius debacle, in case you’re wondering why we didn’t speak about the elephant in the bear market.
The Tube
📺 Hot Stuff: Coinbase Dumps 18% of staff, 3AC on the rocks
📺 Quick Take: MARKET UPDATE: Ain't no party like a depeg party (USDD, USDT, stETH)
📺 Quick Take: MARKET UPDATE: Celsius, yes it's bad
📺 The Defiant Weekly: Andreesen Horowitz keeps buying web3 and crypto
Celsius Report
🐂 Ethereum Bulls See Opportunity in Celsius Collapse, stETH ‘De-Peg’
In which Aleksandar Gilbert digs into how staked ETH played a role in Celsius’ troubles.
Lido’s stETH, a derivative token representing staked ether, has traded roughly at par with Ether since its inception. The reason was simple: each stETH token represents one staked ETH token and can be redeemed for ETH in the future, after the Ethereum network completes its transition to the proof-of-stake consensus mechanism and withdrawals on that updated network are enabled.
That so-called “peg” broke in dramatic fashion last week, as the value of stETH relative to ETH began to plunge. stETH began trading at about 97 cents to every dollar of ETH in May. Early Friday morning, it fell to 95 cents on the dollar. On Monday morning, it was trading just above 93 cents on the dollar, according to data from Dune Analytics.
The nosedive in the value of stETH prompted Lido, the protocol that issues it, to quell fears of a broken peg and comparisons to Terra’s failed UST stablecoin.
Three Arrows Report
😧 Investors Scramble to Get a Grip on Depth of Three Arrows’ Trouble
Details on Debt Woes in $10B Crypto Fund Are Hard to Come By
In which Jason Levin takes stock of the jitters around the stories fund…
The fear is palpable. Six weeks after Terra collapsed and one week after Celsius, the embattled crypto bank, suspended withdrawals, investors are anxiously watching a $10B hedge fund cope with serious stress.
Three Arrows Capital is sitting on what are believed to be billions of dollars worth loans secured by cryptocurrencies. With the market down 56% this year in its worst bear market since 2018, investors believe the collateral no longer supports the loans. Now the fund is on the hook to start paying them back, and everyone is wondering whether it will default.
On Wednesday, The Defiant reported that Three Arrows sold at least $40M worth of staked Ether as part of an apparent liquidation. It is widely believed that co-founder Su Zhu has been aggressive in using leverage to maximize his potential investment returns.
NFTales
👹 Truth Labs Revealed as Team Behind Goblintown
NFT Roundup: Traders Look to Offload JPEGs in a Wild Week
By yyctrader
Goblintown captured the imaginations of NFT collectors over the past month even as crypto markets burned. Now the team behind the project has unmasked themselves to be Truth Labs, whose previous NFT collections include the Illuminati Collective and The 187.
Of the 1,000 goblins that were retained by the team “because they wanted to”, 900 will be raffled to holders of the existing Truth projects over the next six months at the rate of five per day. And 50 goblins will be retained by the team and the remaining 50 will go to the llluminatiDAO.
The team also revealed that a “McGoblinburger truck” will make an appearance at NFTNYC, and shared plans for merchandise including “goblin sauce”.
Opinion
👉🏼 With Crypto VC Booming It’s High Time to Close the Gender Gap in Web3
Guest writer Li Gong says Web3 needs to get its act together on diversity, now.
A trickle has become a torrent in crypto venture capital. Despite rapid inflation and a bear market, VC investment in blockchain grew to $10B globally in the first quarter of this year. This marks the largest quarterly sum ever at more than double one year ago.
And yet, even as investors stampede towards crypto projects, women will not benefit from the funding bonanza. Less than 5% of crypto founders and less than 10% of crypto fund partners are women. And the numbers aren’t improving.
As one of the few women funding crypto projects, I can tell you that this diversity gap is evident in my day-to-day. For example, out of the roughly 50 DeFi startups that I talk to, just one founder was a woman. This gender skew is now so baked into blockchain — in both funding and founding — it will take many years to undo.
Friday
News
- NFT Fund Starry Night Goes Dark on SuperRareIn another sign of distress at Three Arrows Capital, an affiliated fund that had scooped up dozens of high-priced NFTs has moved much of its multimillion dollar collection into a single wallet, prompting speculation of an upcoming fire sale.
- Two Traders Targeting 3Pool Poleaxed Terra: ReportThe fall of Terra may feel like ancient history now. Two more major crypto ventures — Celsius and Three Arrows — have seized the attention of investors as they struggle to avoid Terra’s fate.
- Merge Update: Devs Advance Closer to Eth2 With Major Step Next WeekDespite the bear market, the Ethereum community still has The Merge to look forward to. And Ethereum’s devs are making significant progress.
- USDC Issuer Circle Announces Euro-Backed Stablecoin Circle, the issuer of USDC, will launch a new stablecoin pegged to the euro, the company announced Thursday.
Elsewhere
- 'Few are Feeling OK': Celsius Investors Unlikely to Fund Bailout: Report: Decrypt
- Ethereum price flash crashes to $950 on Uniswap as whale dumps 93K ETH: CoinTelegraph
- Convicted scammer Anna Sorokin says she is now selling NFTs: NBC News
- Apparently sETH pool is doing really well on those synth swaps: Curve Finance
Thursday
News
- MakerDAO Votes to Freeze Aave’s Direct Borrowing of DAIMakerDAO is taking no chances. As doubts about crypto credit rock the digital asset landscape, MakerDAO, the protocol behind the DAI stablecoin, voted on June 15 to temporarily disable Aave’s DAI Direct Deposit Module (D3M).
- Crypto Liquidations Spike to $480M in Last 24 HoursIn a sign of the magnitude of the crypto crash, more than $1B worth of digital assets were liquidated on June 14, according to data from Coin Glass.
- Nansen Bets Web3 Messaging Will Deter Hacks and SpaCompetition to become the go-to crypto native messaging platform is intensifying with data analytics platform Nansen joining the race.
Markets
- Crypto Markets Sustain Rally After Monster Rate Hike Crypto markets sustained the rally triggered Wednesday when the Federal Reserve raised benchmark interest rates 0.75%, the biggest hike since 1994.
- DEX Trading Volume is About to Drop Below CEX Volume for the First Time in Over a YearDecentralized exchanges have been one of the success stories of DeFi, beating out their centralized counterparts last year.
DeFi Tutorials
- Bear Market Survival Guide: The Metrics You Need to Know in a Tough MarketYes, it’s a bear market, and everything looks grim. But that doesn’t mean investors should despair. Indeed, there are number of steps you can take to evaluate the crypto market at this juncture.
Elsewhere
- Inside a Corporate Culture War Stoked by a Crypto C.E.O.: The New York Times
- A Manhattan Landlord Listed His Office Building in ETH as an NFT. Then Its Price Dropped $12M: CoinDesk
- Mark Cuban: Crypto Firms Sustained by 'Cheap, Easy Money' Will Disappear in Crash: Decrypt
- Proud partner alert @redlion_news released the second edition of their generative art magazine, ARTCODE: Art Blocks
Wednesday
News
- Rumors Swirl About Financial Stress at Three ArrowsOn-chain data has prompted speculation that Three Arrows Capital, a crypto-focused, Singapore-based hedge fund, is insolvent and may become the latest high-flying company to crash in the bear market.
- Coinbase Leads Wave of Layoffs as Crypto Girds for Rough StretchFirst came the market collapse. Now come the layoffs. When Coinbase announced it was laying off almost a fifth of its staff, or 1,100 employees, on Tuesday it was clear a tough period for the young cryptocurrency industry is about to get a whole lot tougher.
- OpenSea To Slash Gas Fees by a Third With Shift to Seaport ProtocolWell, finally! For months now, NFT collectors have been chafing at a raft of issues bedeviling OpenSea’s platform, from high gas fees to its inability to let buyers bid on collections and multiple pieces instead of just individual images.
Elsewhere
- Crypto lender Celsius mulls possible restructuring amid financial woes: WSJ: The Block
- Tether Denies Claims of Asian Commercial Paper Backing, Exposure to Three Arrows Capital: CoinDesk
- Fed begins quantitative tightening on unprecedented scale: The Financial Times
- #NEAR is the first blockchain supporting full fledged #javascript integration: Near Protocol
Tuesday
News
- Uh-oh! Tron’s Stablecoin USDD Slips its Peg as TRX TumblesTron’s algorithmic stablecoin USDD appears to be in trouble despite recent moves from the Tron DAO to overcollateralize the token.
- Celsius Freeze on Withdrawals Craters Crypto MarketCrypto lending platform Celsius has frozen accounts of its 1.7 million users, further undermining trust in the digital assets space on a day with double-digit losses for Bitcoin and Ether and just weeks after the Terra collapse.
- One Group Doing Just Dandy This Week: MEV ExtractorsWhile the bear market has wreaked havoc for many traders, there is one group in crypto that is doing just fine. They’re deploying an obscure tactic involving blockchain mechanics that’s paying off handsomely.
Market Roundup
- Crypto Investors Dig In For Long Winter as Market Erases Two Years of GainsIt happens in every bear market — total capitulation. For months, investors hang on to the hope that the market will shake off a short-term funk and get back to its bullish ways. Then bam! Something happens and the market knows… This is going to be a long-term bummer.
Elsewhere
- Crypto Lender Celsius Taps Horizen for 'Proof-of-Reserves' Proof of Concept: CoinDesk
- The Fed May Discuss the Biggest Interest Rate Increase Since 1994: The New York Times
- A Memo to the Celsius Community: Medium
- A new Signal Request proposes to temporarily set the @AaveAave D3M Debt Ceiling to zero: MakerDAO
💜Community Love💜
Thanking all the amazing Defiers for the support and love this week (and always)!
The Defiant @DefiantNewsToday is The Defiant’s 3rd birthday! 🥳 On June 11, 2019, @CamiRusso sent the first @DefiantNews newsletter. Three years later we’re a multi-media news and content platform drawing millions of views.10:59 PM ∙ Jun 11, 2022152Likes15Retweets
Nick ⚒️,💰💻 @LeanGeekInvests@DefiantNews @CamiRusso My favorite place for DeFi news. Congrats!2:16 PM ∙ Jun 12, 20228Likes1Retweet
Xavier Chamoiseau (gojita972.crypto) @GoJiTa972Protocol neutral and reliable, happy birthday!
The Defiant @DefiantNewsToday is The Defiant’s 3rd birthday! 🥳 On June 11, 2019, @CamiRusso sent the first @DefiantNews newsletter. Three years later we’re a multi-media news and content platform drawing millions of views.2:02 PM ∙ Jun 12, 20224Likes1Retweet
Jean-André 🦇🔊 | 🦉 @JeanAndreV@DefiantNews @CamiRusso Happy birthday! 🎂 Thanks for such valuable resource 🤓👏🏼👏🏼👏🏼1:57 PM ∙ Jun 12, 20225Likes1Retweet
Santiago R Santos | #9159 🦇🔊🐒🤖 @santiagoroel@DefiantNews @CamiRusso Congrats @CamiRusso - keep up the great work! Space needs quality reporting like yours 👏🏻1:54 PM ∙ Jun 12, 202220Likes1Retweet
Diego ✊ @DiegoCabralETHThanks @DefiantNews for this beautiful #NFT designed by @pprhsk and created by @yyctrader1! 🙌 It was rewarded for those who have boosted our Discord server. Btw, if you’re not there yet, join us: discord.gg/thedefiant
2:47 PM ∙ Jun 11, 202219Likes3Retweets
The Defiant @DefiantNewsIn today's Defiant ✊ 💳 DeFi credit protocols raising millions at a rapid clip 🔴 @optimismPBC exploiter returns 90% of tokens 📉 Global markets dive after U.S. inflation hit 8.6% in May Get free daily DeFi news straight to your inbox 📥👇 https://t.co/uCtZWBBfWj7:41 PM ∙ Jun 10, 202227Likes6Retweets
Mark 🟠 @meritcirclorrThanks for the coverage @DefiantNews <3
youtube.comThree Metaverse Stories - Merit Circle, Grit, and We Are All Going to DieIn this week’s Hot Stuff we’re covering three metaverse stories:2:27 Merit Circle’s Sphere8:48 Gala Games’ blockchain game Grit will debut on the Epic Games ...2:22 PM ∙ Jun 10, 202217Likes4Retweets
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, 20224Likes1Retweet
11:27 PM ∙ Jun 14, 202253Likes17Retweets
The Defiant @DefiantNewsToday is The Defiant’s 3rd birthday! 🥳 On June 11, 2019, @CamiRusso sent the first @DefiantNews newsletter. Three years later we’re a multi-media news and content platform drawing millions of views.4:18 AM ∙ Jun 12, 202230Likes1Retweet
The Defiant @DefiantNewsToday is The Defiant’s 3rd birthday! 🥳 On June 11, 2019, @CamiRusso sent the first @DefiantNews newsletter. Three years later we’re a multi-media news and content platform drawing millions of views.11:01 PM ∙ Jun 11, 202253Likes5Retweets
3:08 AM ∙ Jun 10, 202272Likes15Retweets
🧑💻 ✍️ 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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