Recap: DeFi Week of Feb. 24 🦄

Hello Defiers, hope your’e having a great weekend!

Summing up last week: A potential change to Ethereum’s mining algorithm, known as ProgPow, prompts a blacklash. Compound Finance plans to issue a governance token to move into a more decentralized system. There were a few platform launches and upgrades: PoolTogether is tokenizing lottery tickets, decentralized asset manager Melon released a new interface, Loopring’s scalable exchange is now on mainnet, Coinbase introduces human-readable Ethereum addresses. Roll co-founders talked about social money, while Quantstamp’s CEO wrote that the bZx exploits could be prevented. And there’s lots more.

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Op-ed

Bug Hunting Isn’t Enough; DeFi Code Should be Financial-Attack Proof: Quantstamp's Richard Ma

Last week DeFi suffered its biggest test yet: Two exploits worth almost $1 million, which leveraged some of the ecosystem’s most distinctive features, composability and flash loans. As tensions from the very immediate aftermath of those days ease, it’s time to think about some of the deeper lessons the space can take from these exploits. One of the best people to do this is Richard Ma, CEO of security firm Quantstamp, which has helped deploy blockchain solutions managing $1 billion worth of assets. Ma believes contrary to what some have argued, vulnerabilities like the ones exploited last week were not strictly financial attacks and can be minimized with smart contracts audits.

Interview

Social Money is How We Take a Piece of the Trillions in Value Captured by Social Media: Roll Co-Founders

This week’s interview was with Bradley Miles and Sid Kalla, the co-founders of Roll, a platform that enables the issuance and distribution of so-called ‘social money.’ Roll is one of those projects building something that just couldn’t be possible without a decentralized network; personal tokens, which can be issued by anyone and used as money-less incentives for others to do what the issuer deems valuable or accepted as payment by the issuer, too. These currencies are portable and can be used to strengthen bonds among communities on different platforms, and take some of the value being captured by social media platforms.

Friday

Dives

• Compound's New Governance Token Helps Platform Coins Further Shed Stigma: Compound Finance wants to decentralized governance by introducing a token to its system. The plan shows platform-specific coins are losing their stigma and becoming more sophisticated.
• DeFi Shows Improving Sentiment Amid Crypto Slump: Ether bulls are getting whiplashed. Last week, ETH crossed $280 and $300 was in the horizon. This week, Ethereum’s cryptocurrency has slumped 20 percent from those highs to a little over $220, causing liquidations on decentralized finance to spike and value locked to drop. But there are signs that traders are regaining confidence.

Sums

• PoolTogether is Tokenizing Lottery Tickets: Users can now buy tokens to participate in the PoolTogether lottery. The protocol’s new plDAI and plUSD tokens represent ownership of tickets eligible to win prizes, and can be stored in users’ wallets and transferred to others.
• Loopring Launches First zkRollup Exchange: Loopring, a protocol for scalable Ethereum exchanges, islaunching the Loopring Exchange on Ethereum mainnet. It’s the first publicly accessible exchange using the zkRollup technology.

Bytes

• Actor Steven Seagal Fined by SEC for Touting Token Offering: Bloomberg
• Why Flash Attacks will be the New Normal: Haseeb Qureshi

Wednesday

Dives

• ProgPow Approval Spurs Ethereum Influencer Uproar: A controversial change to Ethereum’s mining algorithm known as ProgPow was unexpectedly approved in the most recent developers’ call, spurring a backlash from the community. A look at the pros and cons.

Sums

• Nexus Mutual Patched Two Vulnerabilities: Nexus Mutual last week moved to prevent two potential ways to exploit the decentralized insurance system after it was alerted to the vulnerabilities by securities experts Mudit Gupta and Samczsun.
• Coinbase Introduces Human-Readable ETH Addresses: Coinbase Wallet launched support for sending crypto to Ethereum Name Service addresses.
• Melon Launches New Interface for Decentralized Asset Management: Melon protocol’s lead developer Avantgarde Finance launched the Melon Terminal, a new, browser-based interface to improve user experience, performance and stability of the decentralized fund management platform.
• CryptoKitties Maker Dapper Labs Partners With UFC: Dapper Labs, the creator of CryptoKitties and the non-fungible token standard, announced a new licensing partnership with Ultimate Fighting Championship.
• Chainlink Paving the Way to Become Polkadot’s Price Oracle Provider: Chainlink completed an initial integration with a Substrate-based blockchain.

Bytes

• Risky Business: #DeFi and Ethereum’s Coming of Age Story: Taylor Monahan
• Introducing DeFi Watch, Curated Info on DeFi Security & Risk: Chris Blec

💜Community Love💜

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

Benjamin Whitby @benjaminjwhitby@CamiRusso your latest newsletter is epic. 🙏9:24 AM ∙ Feb 28, 20205Likes1Retweet

Quantstamp @QuantstampVery happy to be featured in today's issue of the Defiant - the best newsletter on the #DeFi industry. In today's letter, CEO Richard Ma weighs in on the bZx attacks and how the industry should move forward.

Camila Russo @CamiRusso⚔️DeFi is raising the stakes. Code must be more airtight than ever. Not only should it be bug proof, it should also be financial-attack proof. Move slow and test things, says Richard Ma of @Quantstamp. Here's his column on DeFi's toughest test yet. https://t.co/lJtcUgcM7s9:08 PM ∙ Feb 27, 202032Likes8Retweets

Sid Kalla @sidkal1/ The Defiant has become THE place for the best Ethereum content. @CamiRusso is really knowledgeable about the space and not afraid to ask the hard questions. Was a really fun chat about Roll (@tryrollhq) - a quick thread 👇J

Camila Russo @CamiRussoSocial Money is so uniquely Web3🌈 Anyone can issue personal tokens & earn/trade/send them to 1) exchange value w/out exchanging $ 2) strengthen ties global in communities 3) reclaim capital captured by tech giants @tryrollhq cofounders explain here: https://t.co/SqvGOzq2NN5:24 PM ∙ Feb 25, 202025Likes6Retweets

Bradley Miles @Bradley_Miles_🥳 It feels like a rite of passage to get featured in The Defiant! 🙏 Humbled to be a small part of what @CamiRusso is doing, she's building an institution. Learn more about the incredible opportunities social money opens up below RII

Camila Russo @CamiRussoSocial Money is so uniquely Web3🌈 Anyone can issue personal tokens & earn/trade/send them to 1) exchange value w/out exchanging $ 2) strengthen ties global in communities 3) reclaim capital captured by tech giants @tryrollhq cofounders explain here: https://t.co/SqvGOzq2NN5:01 PM ∙ Feb 25, 202023Likes2Retweets

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. Sign up to learn more and keep up on the latest, most interesting developments. Subscribers get full access at $10/month or $100/year, while free signups get only part of the content.

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About the author: I’m Camila Russo, a financial journalist writing a book on Ethereum with Harper Collins. (Pre-order The Infinite Machine here). 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.