DeFi Milestone, Buying ETH With Apple Pay, Uncollateralized Loans

Good morning defiers! Here’s what’s going on in decentralized finance,

• Record $3 million of ETH locked in DeFi
• Wyre’s new fiat/crypto onramp
• Aave is trying to do uncollateralized DeFi loans

Record $3 Million Locked in DeFi is Kind of Meh

People were getting excited because there’s now a record $3 million worth of ether locked in decentralized finance protocols.Round numbers and records are nice, but this milestone is a little misleading …

Going From Fiat to DeFi Just Got Easier

Crypto on-ramp Wyre released their Version 2, enabling users to get ETH on their wallets in a few minutes using Apple or Google pay.

This is is good news for adoption. One of the toughest parts about using open finance is getting ETH in the first place: You have to go to a centralized exchange, like Coinbase in the U.S., create an account, link it to your bank, wait about three days before the crypto you bought shows up in your wallet, and wait even more time to withdraw it and send it to an ETH wallet to finally be able to use in DeFi. The whole process can take two weeks. It’s a huge improvement if you can use Apple or Google pay to skip all this.

Applications can integrate a Wyre-branded Apple Pay/Google Pay checkout, making it easier to pay with crypto and use digital tokens.

Users still have to download an ETH wallet and they still have to go through KYC, but instead of doing it in a crypto exchange, Wyre is using information provided by Apple Pay and Google Pay.

Some caveats:

• Transactions are limited to $250 the first time, and $1,500 total. Additional documentation will be required to increase limits.
• The feature is only available in some U.S states, and doesn’t work in: New Hampshire, North Carolina, Connecticut, Hawaii, Vermont, Virginia and New York. They’re hoping to add Europe and South East Asia next year.
• Wyre charges fees of 2.9 percent plus $0.30, which they say will drop in the future. This compares with 4 percent on Coinbase for debit/credit purchases.

Aave is Giving Uncollateralized Loans a Try

Uncollateralized loans, or the ability to borrow without locking up an amount of crypto that’s greater than the loan itself, is becoming the holy grail of DeFi. Aave is trying to crack it.

The lending protocol is getting ready to release to mainnet a feature called Flash Loans, developer Emilio Frangella said, which will allow anyone to take liquidity out of the Aave protocol, provided that the same liquidity plus a fee is returned “within the context of the same transaction.” The transaction gets reverted if it’s not returned. Users depositing tokens in the protocol will earn the fees collected from borrowers.

Devs will be able to write contracts that will receive liquidity from the protocol, and do whatever they want with it.

Use cases include arbitrage between exchanges and refinancing CDPs. Interest rates and terms of the loans are TBD.

Sign up to get the best and only daily newsletter focusing on decentralized finance news, complete with analysis, exclusive interviews, scoops, and a weekly recap. Those who become paying subscribers in the current 60-day beta period which started Oct. 1 get early supporter discount :)

Subscribe now

About the author: I’m Camila Russo, a financial journalist writing a book on Ethereum with Harper Collins. I was previously at Bloomberg News in New York, Madrid and Buenos Aires covering markets. I’ve extensively covered crypto and finance, and now I’m diving into DeFi, the intersection of the two.