Recap: DeFi Week Jan. 1

Hello Defiers! Happy New Year!

The new year opened with a surprise — the market was up! It may not last, of course, but a broad rally across crypto elevated ETH 4% during the week, and a number of DeFi names posted double-digit jumps.

Solana’s 36% spike was especially welcome given the beating SOL took after FTX cratered in November. As Owen Fernau reported, the blockchain appeared to be buoyed by the release of a memecoin — Bonk — on its network. While that may not be the most stable source of growth, weary investors will take any respite they can get.

Crackdown

Even as investors welcomed the rally, the crypto failures of 2022 continued to take a toll. Joining the Feds in cracking down on the sector, New York state authorities delivered a one-two punch this week. As Aleks Gilbert reported, the Empire State’s attorney general sued Celsius ex-CEO Alex Mashinsky for allegedly defrauding the CeFi exchange’s clients, and banking regulators settled a case with Coinbase in which the exchange giant agreed to pay a $50M penalty.

Then there was the fiery dispute between two of crypto’s most high profile evangelists — Cameron Winklevoss and Barry Silbert. As Sam Haig reported, Winklevoss, the co-founder of the Gemini exchange, lambasted Silbert, the CEO of crypto conglomerate DCG, for failing to sort out the return of $900M in assets to Gemini customers. Be sure to check out our episode of The Daily Defiant this week on the dustup.

Innovations

Looking ahead, we featured two provocative and informative opinion pieces this week. Guest writer Christian Seifert wrote how machine learning must play an instrumental role in protecting web3 applications from exploits, and guest columnist JP Bedoya delivered a primer on tools that can bolster cross-chain privacy.

Great stuff. Enjoy!

Today’s Sponsors

Chainalysis is on a mission to build trust in crypto for a global economy built on blockchains. Learn more about our blockchain data platform and the work ahead here.

Defiant Video

$4.2bn belongs to Celsius, not customers

2023’s First Crypto Villain

Will 340,000 Gemini users get their money back from Genesis?

Best of the Week

Market Action

SOL Soars 36% As Bonk Memecoin Becomes First Hit of 2023

NFT Marketplace Magic Eden Generated Record Volume In December

By Owen Fernau

Days after dipping below $10 for the first time in almost two years, the Solana blockchain’s SOL token jumped over 18% on Jan. 3. The move came after the token underperformed competing Layer 1s like ETH, BNB, and others earlier in the week — SOL is now up 36.5% on the week, according to The Defiant Terminal.

Read the full story in The Defiant

Crypto Clashes

Winklevoss’ Salvo on Silbert Opens New Year on Combative Note

Gemini Co-founder Accuses DCG Honcho of Mismanagement and ‘Bad Faith’

By Samuel Haig

In an extraordinary clash that exposes the deepening stress in the cryptocurrency industry, Cameron Winklevoss accused fellow entrepreneur Barry Silbert on Monday of imperiling the life savings of thousands of customers of Earn, an offering supported by the Winklevoss twins’ Gemini exchange.

Read the full story in The Defiant

Defier of the Year

Crypto Sleuth ZachXBT Exposed Chicanery For a Grateful DeFi Community

Deeply Researched Probes of Questionable Projects Proved ‘Invaluable’ in Mad Year

By Aleksandar Gilbert

“The obvious,” one commenter wrote, “needs to be stated again and again.”

And what might that be?

“The space is not only safer and smarter because of you, but unequivocally better,” they told the man who moonlights as crypto sleuth ZachXBT on Twitter. The Defiant community agrees.

Read the full story in The Defiant

Opinion

Machine Learning Best Way to Defend Web3 From Exploits

Bedeviled by Hacks and Exploits ML Web3 Should Tap ML to Protect Its Turf — Here’s How

By Christian Seifert

It’s no secret that crypto-centric data breaches have been soaring recently, with this trend likely to increase in the foreseeable future, especially as cybercriminals continue to employ more sophisticated techniques to facilitate their attacks.

To this point, losses emanating from various cryptocurrency hacks surged by approx. 60% over the first seven months of the year, propelled, in large part, by funds being stolen from various decentralized finance (DeFi) protocols.

Read the full op-ed in The Defiant

Opinion

We Have the Tools to Reshape Cross-Chain Identity

A Primer on the Power of Soulbound Tokens, Decentralized Identifiers, and Verified Credentials

By JP Bedoya

The fractured structure of the greater blockchain ecosystem has made implementing cross-chain identity a massive challenge. This year, Soulbound Tokens (SBTs), Decentralized Identifiers (DIDs), and Verified Credentials (VCs) are poised to shape how identity will ultimately be handled in 2023. These tools have the potential to change how we manage our online identities and provide a more efficient approach to portable and frictionless Web3 experiences.

Read the full column in The Defiant

Friday

News

• China Reverses Course on NFTs With Platform Launch After years of hostility towards the digital asset sector, China appears to be taking steps toward embrace nonfungible tokens.
• Crypto Crackdown Intensifies as NY Hits Coinbase and Mashinsky In a one-two punch, New York state authorities slapped Coinbase with a $50M penalty on Wednesday, and sued former Celsius CEO Alex Mashinsky for allegedly defrauding investors on Thursday.
• Mojo Builds for Hong Kong CBDC Could Hong Kong get a digital dollar? That’s what Wu Jiezhuang, a member of the Legislative Council of Hong Kong, is calling for.

Markets

• New Year Brings Some Relief To Crypto Investors The first week of 2023 is shaping up to be a good one for crypto markets. Leading smart contract platform Ethereum saw its native token rise 5%, while Bitcoin, which recently turned 14, posted a more modest gain of 2

Opinion

• We Have the Tools to Reshape Cross-Chain Identity The fractured structure of the greater blockchain ecosystem has made implementing cross-chain identity a massive challenge. This year, Soulbound Tokens (SBTs), Decentralized Identifiers (DIDs), and Verified Credentials (VCs) are poised to shape how identity will ultimately be handled in 2023.

Trends to Watch 2023

• Stablecoins Seek to Regain, Well, Stability in 2023 Of all the instruments in crypto, stablecoins may have the most utility. These assets, often pegged to the U.S. dollar, provide the benefits of holding value on-chain without the drawbacks of volatility.

Thursday

News

• SOL Soars 36% As Bonk Memecoin Becomes First Hit of 2023 Days after dipping below $10 for the first time in almost two years, the Solana blockchain’s SOL token jumped over 18% on Jan. 3.
• SEC Fires Warning Shot at Binance By Opposing Voyager Deal In a move that suggests regulators are increasingly wary of Binance, the U.S. Securities and Exchange Commission said Wednesday that the exchange’s American affiliate should not be allowed to make its $1B purchase of Voyager Digital, the failed crypto lender.
• Court Rules $4B Of Client Assets to Stay With Celsius More than $4B in cryptocurrencies that were deposited in so-called “Earn Accounts” of bankrupt crypto lender Celsius do not belong to the customers that made those deposits, Chief US Bankruptcy Judge Martin Glenn ruled Wednesday.

Opinion

• Machine Learning Best Way to Defend Web3 From Exploits It’s no secret that crypto-centric data breaches have been soaring recently, with this trend likely to increase in the foreseeable future, especially as cybercriminals continue to employ more sophisticated techniques to facilitate their attacks.

Trends to Watch 2023

• DAOs Make Peace With ‘Legacy Legal’ Requirements With the anarchic days of DeFi Summer long past, many DAOs have finally succumbed to the inevitable — they’re establishing formal legal structures.

Wednesday

News

• Winklevoss’ Salvo on Silbert Opens New Year on Combative Note In an extraordinary clash that exposes the deepening stress in the cryptocurrency industry, Cameron Winklevoss accused fellow entrepreneur Barry Silbert on Monday of imperiling the life savings of thousands of customers of Earn, an offering supported by the Winklevoss twins’ Gemini exchange.
• Sam Bankman-Fried Pleads Not Guilty To Fraud Charges Disgraced FTX founder Sam Bankman-Fried posted his $250M bail bond with the help of his parents and two unnamed people. Now, a judge has granted his request to keep the names of those people secret.

Trends to Watch 2023

• DeFi To Widen Gap With CeFi After Stormy Year To the outside observer, if an application uses digital assets, that’s part of “crypto” — there’s no distinction between the now-bankrupt FTX and on-chain exchanges like Uniswap and Curve Finance.

DeFi Explainers

• What is Ethersic? Securing peace of mind is an indispensable part of finance. The multi-trillion-dollar insurance industry sprung out of this need, and for hundreds of years, it has operated on the basis of calculating risks down to fractional degrees.

Tuesday

News

• Crypto Sleuth ZachXBT Exposed Chicanery For a Grateful DeFi Community “The obvious,” one commenter wrote, “needs to be stated again and again.” And what might that be? “The space is not only safer and smarter because of you, but unequivocally better,” they told the man who moonlights as crypto sleuth ZachXBT on Twitter. The Defiant community agrees.
• Adams Defies a Rough Year to Make Uniswap a True Unicorn By his own admission, Hayden Adams didn’t really know what he was doing.
• UkraineDAO Showed Power of Web3 in War Zone When Russia invaded Ukraine in February crypto culture may have been the last thing on the minds of a horrified population. Lines of communication and supply routes were broken. Families rushed to get news of loved ones left behind in Kyiv and eastern Ukraine.

Community Love

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

The Defier of the Year is someone who did meaningful work to have a positive impact and push the crypto space forward this year 🌍🏆

The first round of voting is over, and we have our finalists…

Now, WHO SHOULD WIN DEFIER OF THE YEAR 2022?! 👇

— The Defiant (@DefiantNews) December 19, 2022

Our values at The Defiant transcend any one person✊

We're driven by the beliefs that:

🌐 The world will become increasingly decentralized

⛓️ Blockchains will be the underlying infrastructure of the global financial system

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— The Defiant (@DefiantNews) December 17, 2022

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and I cover the latest yield farming strategies and airdrop opportunities👨‍🌾

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