Recap: DeFi Week of Jan. 4 🦄

Hello Defiers! Hope you’re having a great weekend.

Summing up: The first week of 2021 was intense. The crypto bull run continues to heat up, with ETH getting comfortable at over $1k, and Bitcoin doubling its previous 2017 all-time high and climbing over $40k. DeFi made its own milestones, hitting records in total value locked, DeFi index prices and DEX volume. All metrics seemed to point upwards except ETH locked in DeFi, and we explore why. There was also big news on the regulatory front; the OCC decision to allow banks to transact with stablecoins and operate blockchain nodes, and the deadline to make comments on a FinCen proposal to require KYC on self-hosted wallets —which we covered in out Defiant Weekly video.

In other market news, Grayscale products were up to new shenanigans, Deribit introduced a $10k ETH option, technical analysis says an #altszn is around the corner, and while long-term drivers are looking good for ETH, short-term metrics are flashing a correction might be due. Meanwhile, ShapeShift scrapped KYC, and NFTX wants to bring liquidity to NFTs.

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🙌 Together with Zerion, a simple interface to access and use decentralized finance, Neutrino, an algorithmic price-stable protocol that enables the creation of stablecoins tied to real-world assets, Value DeFi Protocol, a suite of DeFi products including the Value Liquid AMM, which allows anyone to create trading pools with flexible ratio pairs, and Cartesi, an optimistic roll-ups solution that aims to revolutionize smart contracts by allowing developers to code with mainstream software stacks, has just launched CTSI Reserve Mining.

Interview

"I'm a Strong Believer in Blockchain; This is Just the Beginning:" Atari CEO Fred Chesnias

In this week’s podcast episode, we interview Fred Chesnias, the CEO of Atari. The video game company now has a token and plans to release a wallet and even an exchange. The token is an erc20, which Atari hopes will get used across any game, not just its own. With the token, users will be able to buy Atari NFTs, which include wearables to make a fashion statement in the metaverse. Chesnias says he’s a big believer in blockchains and thinks it can be a way to make it out of poverty, even leveraging video games themselves. Beyond blockchains he also talks about business; Chesnias was able to take Atari out of deep financial stress and turn it around.

🎙Listen to the interview in this week’s podcast episode here:

Thursday

Dives

• As Rioters Stormed the US Capitol, Markets Rallied On: Pro-Trump rioters lay an unprecedented siege on the U.S. Capitol. Meanwhile, the Dow Jones ended the day on a record high and cryptocurrencies, which are meant to protect from such chaos, also rallied, though it’s unlikely it was a reaction to the turmoil.
• Ethereum’s Growth Catalysts in an Overheated Market: Ethereum has seen a wave of positive events unfold. While these are driving a confluence of improvements for Ethereum’s long-term potential, short-term metrics point to the recent rally being over-extended.

Bytes

• Uniswap Liquidity Near All-Time High – This Time Without Liquidity Mining: Uniswap liquidity is fast approaching an all-time high and this time the most used DEX isn’t riding the wave of its liquidity mining program.
• ShapeShift Embraces DeFi, Axes KYC: ShapeShift will be fully embracing DeFi protocols and getting rid of KYC.
• Deribit Introduces 10K Ether Strike Price: Deribit is introducing an ETH option with a $10K strike price and Dec. 21, 2021 expiry.

Links

• Trading Desks are Staffing Up in Anticipation of a Prolonged Bitcoin Bull Run: The Block
• Ethereum Enters Top 100 of World’s Largest Assets: Decrypt

Wednesday

Dives

• US Banks Can Now Process Stablecoin Transactions: National banks and federal savings associations are now allowed to operate blockchain nodes and use stablecoins for payments. This is a big deal for mainstream crypto adoption.
• ETHE Drops as ETH Climbs Near Record Highs: Wall Street’s favorite ether investment vehicle ETHE is plunging just as the underlying cryptocurrency is near records. But there’s a good reason why.
• Is an Ethereum-Driven Alt-Season Around the Corner?: Ether is surging faster than bitcoin, which may signal small cap tokens will follow.
• NFTX Launches NFT Liquidity Pools: There’s been a lot of optimism about the potential for NFTs to revolutionize digital collectibles, but an important drawback has been hanging over the sector; lack of liquidity. NFTX is seeking to address the issue by debuting an NFT liquidity pool.

Links

• Ripple co-founder Jed McCaleb sold $400 million worth of XRP in 2020: Cointelegraph
• CoinDesk Acquires TradeBlock, Adding Indexes and Pricing to News, Events Offerings: CoinDesk

Tuesday

Dives

• DeFi Tokens, Volume and TVL Heat Up Amid Bull Run: As ETH crosses $1k, DeFi is hitting its own set of milestones, but ETH locked is sliding.
• Ethereum Gas Prices Put a Damper on DeFi Rally: The good news: Ethereum is booming. The bad news: gas fees are, too.

Bytes

• Yam Finance Votes to Remove Rebase Mechanism: YAM holders voted to remove the token’s rebase mechanisms, which expanded and contracted supply seeking to establish a stable price.
• Cover is Migrating Holders to New Token After Exploit: Less than a week after COVER was exploited for $9.4M, a migration portal is now live for holders to claim a new token based on a snapshot that happened prior to the incident.
• Crypto Heavy Weights Rallied Against FinCen Rule Change: Payments giant Square and crypto exchange Coinbase were among major crypto and fintech companies who rallied against FinCen’s proposed rule chain on crypto private wallets.

Links

• OCC Greenlights National Banks to Run Nodes and Stablecoin Networks: Cointelegraph
• Futureswap Announces V2 Beta

Monday

Op-ed

• DeFi10 Returned 370% Thanks to ETH and Airdrops, by Camila Russo: At the start of the year, I invested $1,100 in 10 DeFi applications, plus MakerDAO’s Dai Savings rate as a benchmark. The requirement was that they could give me passive income; I would just send 100 Dai into their smart contracts, never touch it again, and then hopefully have more than 100 Dai at the end of the year, whether it be through interest, LP fees, or automated trading strategies. Fast forward to Dec. 31, and I had just over $5,200 in my wallet.

🧑‍💻 ✍️ Stories this week were written by Daniel Kahan, Owen Fernau, Cooper Turley, Lucas Outumuro and Christopher Attard, and edited by Camila Russo. Videos were produced by Robin Schmidt and Alp Gasimov, with writing from DeFiDad.

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