DeFi Milestone, Buying ETH With Apple Pay, Uncollateralized Loans

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

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

Record 3 Million ETH Locked in DeFi

There’s now a record 3 million ether locked in decentralized finance protocols.

This metric refers to all digital assets being used as collateral in decentralized finance, priced in ETH terms. While total value locked in dollar terms is still below the June record, total ETH is a more meaningful metric because the dollar amount locked depends on the price of ether, not necessarily on DeFi adoption.

Quick reminder of why value locked in DeFi matters: Value locked refers to the assets that are being used as collateral —> lending in DeFi is collateralized —> most of DeFi is lending.

When looking at individual tokens locked in DeFi, there is 2.23 million ETH locked and 21.4 million Dai, both marginally below records touched in April and September, respectively. BTC is lagging, with 1,472 BTC locked or about 6 percent below the July record. The space has taken some time to break the previous ETH record, which means growth has at least a temporally plateaued.

Image source: DeFi Pulse

Total value locked has been climbing since August, but at $530 million it’s still far from the high of $685 million in June, when ETH climbed over $300. The next round number to get really excited about will be $1 billion total locked in DeFi.

[Correction: This post previously said there was $3 million in ETH, instead of 3 million ETH in DeFi]

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.