DeFi Produces $COMP Short Selling & Put Options Overnight
Also, mStable joins the liquidity race.
Hello Defiers! I usually publish the weekly interview and podcast today, but will send tomorrow and instead pushing out a quick update with all that’s happened in just the last 48hrs, only for paid subscribers.
- It’s now possible to short $COMP with a synthetic UMA token
- Opyn launches $COMP put options
- mStable is latest to join liquidity wars
and more :)
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You Can Now Protect Against a $COMP Pullback
DeFi developers have created was to short COMP and hedge against its volatility, basically overnight.
Shorting COMP
Compound Finance’s COMP token has surged more than 10x to $260 since it first listed two weeks ago. Think the rally has gone too far? Now you can short it.
UMA released synthetic COMP token yCOMP on mainnet today, which enables traders to permissionlessly short Compound’s token.
UMA @UMAprotocol1/ Synthetic $COMP (yCOMP) is live on mainnet. It is now possible to permissionlessly short $COMP.1:57 PM ∙ Jun 26, 2020157Likes46Retweets
Traders can either become a “sponsor” who shorts COMP or a holder who earns yield on COMP. To short $COMP, the user deposits Dai as collateral and mints yCOMP. If the price of $COMP falls, the trader sells yCOMP on Uniswap, and unlocks collateral for less than what they gained by selling the yCOMP.
Holders of yCOMP earn yield because the token will trade at a discount to COMP as it reflects the funding rate to short. As the yToken approaches expiry, on August 1, it will approach the COMP price (that’s because it will be redeemable for the underlying Dai at the price of COMP).
UMA implied traders will soon be also able to short Balancer’s BAL.
$COMP Put Options
Decentralized options platform Opyn created put options contracts for Compiund’s governance token. Traders can now buy oTokens, which provide the option to sell COMP at $150 on July 3, no matter what the market price is.
On the other side of the trade, users put up USDC collateral to mint oTokens, and receive a premium and their collateral back if the asset stays above the strike price until expiry.
mStable Latest to Join DeFi’s Liquidity Wars
Stablecoin aggregator mStable is the latest DeFi project to use its native governance token to incentivize liquidity. Less than 24 hours after launch, nearly $3M worth of capital has flocked to the hottest new plantation from farmers hoping to earn MTA.
mStable 🧮 @mstable_1/ Today we are excited to detail mStable’s protocol token Meta ($MTA), along with our ecosystem reward program — which begins today on @BalancerLabs Get started: tinyurl.com/y9lvylyc Learn more:
tinyurl.comIntroducing Meta (MTA) — mStable’s Protocol TokenThe first MTA ecosystem reward pool is now live on Balancer!12:25 PM ∙ Jun 26, 202061Likes19Retweets
Those who mint mStable’s stablecoin mUSD and provide liquidity to the mUSD/USDC Balancer pool are eligible to share a pro-rata claim on 200,000 MTA distributed for the month of July. Monthly rewards are set to ramp up over the course of the first year - ultimately leveling back out in years 3-5.
MTA holders stand to collect protocol fees when staking, along with voting on supported assets and interest rate models as Meta Governors. Here’s how the distribution is set to span out.
It’s important to note that MTA is not live yet and that rewards will be issued retroactively in batches of 50,000 MTA via 4 snapshots which will be shared in the mStable Discord.
mStable has seen strong traction since it’s launch on May 29th, with over $4.2M worth of mUSD minted since inception. With the combination of industry-leading APYs and the opportunity to collect both MTA and BAL, mStable is leveraging yield farming to perfection.
5:52 AM ∙ Jun 20, 202025Likes7Retweets
DeFi Temporarily Broke Data Company The Graph
DeFi is growing so fast that it caused an outage on The Graph, a query protocol for blockchains.
Over the past two weeks, The Graph has seen query volume grow from 25M queries/day to 45M queries/day. This is largely due to the recent growth in adoption of DeFi applications; including product launches, liquidity mining programs, and crypto price appreciation.
Despite having 50% headroom in our Google Cloud database, on June 23, our database CPU maxed out at 100%, causing requests to fail. While we always plan for growth, the resources required to support queries were greater than our projections.
This is Why We DeFi: Wirecard Auditors Say ‘Elaborate’ Fraud Led to Missing Billions
It’s harder to get away with something like this when funds are held in an open network:
“It is frightening how long Wirecard AG was able to operate without being objected to by the auditors,” Wolfgang Schirp, a lawyer who has filed suit against EY on behalf of investors, said in a statement. Schirp’s claim, which was filed this month before the fraud was disclosed, alleges that EY failed to flag that 1 billion euros in assets were improperly booked in 2018.”
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The Defiant is a daily newsletter focusing on decentralized finance, a new financial system that’s being built on top of open blockchains. The space is evolving at breakneck speed and revolutionizing tech and money.
About the editor: Camila Russo, is a financial journalist writing a book on Ethereum with Harper Collins. (Pre-order The Infinite Machine here). She was previously at Bloomberg News in New York, Madrid and Buenos Aires covering markets. She has extensively covered crypto and finance, and is now diving into DeFi, the intersection of the two.
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