🦄 Recap: DeFi Week of Nov. 20

Stability. That’s the watchword for this febrile moment in DeFi. It’s been two weeks since CeFi bellwether FTX went poof! and lo and behold the world of decentralized finance is still here, still working, still developing, still building.

Just check out Owen Fernau’s dive into the performance of stablecoins since Sam Bankman-Fried’s exchange empire started unraveling. Owen found TVL for the top five stablecoins fell 18%, no surprise, but their yields have settled down. Or read Sam Haig’s story on Layer 2 gas usage — it soared 170% in 2022, a strong sign that Ethereum scaling continues unabated.

Still, contagion and carnage are everywhere to be found in the wake of the FTX disaster. Aleks Gilbert wrote a cracker on the ‘Def Con Scenario’ at Genesis and its parent, Barry Silbert’s DCG.The implications of Genesis’ potential bankruptcy on Grayscale, the family of crypto trusts that comprise the crown jewel in DCG’s empire, are severe.

Then there was the news, reported by Sam Haig, that MakerDAO is liquidating overleveraged vaults. It’s not a big amount — $1.3M — but it is evidence that bad debt is making headlines in DeFi. And Sam also reported on ConsenSys taking heat for collecting MetaMask wallet and IP addresses. Oof.

And The Defiant gives a big shout out to Tegan Kline for her debut podcast! Tegan spoke with Bogdan Alexandrescu, co-founder and VP of engineering at SAGA. Bogdan told Tegan about his departure from Apple after six years to work full-time in crypto and shared his perspective on the metaverse SAGA’s innovator program.

In our Defiant Video series, don’t miss our takes on the Genesis saga, and the insane story of Alexy Pertsev, the Tornado Cash dev who is being detained in the Netherlands.

Great stuff. Enjoy!

Podcast

🎙 Saga’s Bogdan Alexandrescu on Making Web3 More Accessible to Builders

This week on The Defiant Podcast, Tegan Kline speaks with Bogdan Alexandrescu, co-founder and VP of Engineering at SAGA.

SAGA is focused on lowering the barrier of entry for building in Web3 so that developers can spin up a blockchain in a single click, and the company places emphasis on the metaverse.

In this conversation, we dive deep into Bogdan’s departure from Apple after six years to work full-time in crypto, any advice that he has for anyone looking to make a similar switch, what the metaverse is, more about SAGA, and the current innovator program they’re running.

Defiant Video

📺 FTX Contagion: Are DCG and Genesis next?

📺 Tornado Cash Developer’s First Public Hearing

📺 🦃 Thankful for Crypto 🙏

📺 FTX Hacker is on the move

Podcast Video

📺 🎙 Making Web 3 More Accessible

Weekend Read

👀The ‘DEF CON Scenario’: Investors Eye Digital Currency Group After FTX’s Implosion

Genesis Reportedly Considering Bankruptcy As Funding Proves Elusive

Aleksandar Gilbert dives into the precarious

As FTX collapsed — and the tide came in — builders, investors, aficionados and just about anyone with a passing interest in cryptocurrencies wondered: who else had been swimming naked. All eyes are now on Digital Currency Group (DCG).

Read the full story on The Defiant

Stablecoin Dive

🚣 Stablecoins Show Signs of Stabilizing After FTX Storm

TVL for Top Five Stablecoins Falls 18% Since FTX Meltdown

Owen Fernau crunches the numbers to provide state of play on these vital assets.

As FTX collapsed — and the tide came in — builders, investors, aficionados and just about anyone with a passing interest in cryptocurrencies wondered: who else had been swimming naked. All eyes are now on Digital Currency Group (DCG).

Read the full story on The Defiant

DeFi Strategy

🏂 Avalanche Surges to New High in Boost for ‘Subnet’ Strategy

DFK Chain Subnet Drives 51% Jump in Transactions Processed in September

In which Samuel Haig reports on the mojo at Avalanche…

Avalanche is on a roll. Even as crypto wrestles with existential questions in the wake of the FTX disaster, transaction volumes on Avalanche, a Layer 1 network, surged to new highs in the third quarter amid the growth of its DFK Chain subnet.

Read the full story on The Defiant

Trading Dive

💰 Major CRV Trade on Aave Leaves Money Market With $1.6M in Bad Debt

Trader Had Warned Aave of ‘Trading Strategy’ Last Month

Owen Fernau explores some strange moves in the markets…

The Curve wars have become the Curve games. After warning of a trading strategy which could leave Aave with bad debt last month, trader Avraham Eisenberg has put his plan into action. The results have been mixed, but the trader’s actions ultimately left Aave, one of DeFi’s largest protocols with $4.1B in total value locked (TVL), with $1.6M in bad debt.

Read the full story on The Defiant

Opinion

🤔 How Zero Knowledge Proofs Can Restore Digital Trust

New Technology Can Deliver a User-Controlled Web and Propel the Expansion of DeFi

Guest writer Evan Shapiro makes his case for the utility of this technological breakthrough.

Cryptography and encryption have enabled a degree of trust on today’s internet that allows us to use our passwords without having to think about whether someone will be able to watch our connections and steal them.

👉Read the full story on The Defiant👈

Sponsored Post

Waves.Exchange has rebranded to WX.Network and now it is more than a decentralized exchange. Since its launch five years ago, services have expanded and Waves.Exchange became a robust platform for self-sovereign crypto management with a suite of investment tools in a convenient interface.

In just 2 clicks, you can start your own token right from the platform user interface. Get the verification for the token and launch your own liquidity pool.

WX.Network team wants to welcome new projects, so they are giving away up to $70,000 to those users who start the best tokens, with real utility!

You should just be clear on the use case for your token and create something of value that people would actually want to use.

1. Go here to the token creation page (create an account first)

1. Fill in the form describing your token economics

1. Click “Create Token:

1. Your token is created and you’re entered into the lottery

1. The campaign will run until December 1st

Thursday

News

• Layer 2 Gas Usage Up 170% in 2022 as Adoption Surges Ethereum’s Layer 2 (L2) ecosystem is seeing record network activity despite the bear market, with the monthly gas spent on settling L2 transactions set to post its second consecutive all-time high.
• ConsenSys Under Fire for Collecting MetaMask Users’ Wallet and IP Addresses Consensys, the New York-based blockchain software company behind the leading Ethereum wallet, MetaMask, has shocked decentralization advocates with new changes to its privacy policy.
• MakerDAO to Liquidate Overleveraged Vaults and Absorb $1.3M in Bad Debt DAI degens beware. MakerDAO, the largest DeFi protocol with $6.4B in total value locked (TVL), has said it will liquidate heavily leveraged vaults in a bid to prevent the protocol from accruing excessive bad debt.
• Tornado Cash Developer to Remain in Detention for Another Three Months Dutch authorities have ruled that Alexey Pertsev should remain behind bars until Feb.20, 2023, calling him a flight risk.
• Ethereum Foundation To Test Withdrawals of Staked ETH Ethereum’s developers are making progress towards enabling Beacon Chain withdrawals for ETH stakers.

Wednesday

News

• Stablecoins Show Signs of Stabilizing After FTX Storm Just as stablecoins were becoming, well, stable again after the $60B collapse of the Terra ecosystem in May, the FTX disaster struck and pegged tokens have been whipsawed ever since. The total value (TVL) of the top five stablecoins in DeFi has dropped 18%, to $2.64B since Nov. 6, according to DeFi Llama. 
• Curve Releases Whitepaper for crvUSD Stablecoin Curve, the second largest decentralized exchange on Ethereum, has released a whitepaper detailing its forthcoming stablecoin, sending the price of its CRV governance token soaring.
• Crypto Perpetual Open Interest Dives 43% in Wake of FTX Collapse As the shockwaves from the collapse of FTX continue to ripple through crypto, open interest in perpetual swaps has taken a massive hit. The now-defunct exchange accounted for nearly a quarter of the market prior to its downfall, according to data analytics firmMessari.
• World Cup Fan Tokens Rise and Fall With Action on the Pitch When Saudi Arabia stunned Argentina in the World Cup 2-1 on Tuesday, the Middle Eastern nation’s fans rejoiced and sports pundits discussed every facet of the most shocking upset in the tournament’s history. Oh, and ARG also lost a third of its value in two hours.

Tuesday

News

• MakerDAO Brings Aboard Rocket Pool’s LSD Token In a deal that may ratchet up competition for staking giant Lido, MakerDAO, the No. 1 DeFi protocol, has embraced Rocket Pool’s liquid staking derivative (LSD) token.
• FTX Hacker Offloads Over $59M of ETH and Sells for BTC The hacker behind one of the wallets that drained the failed FTX exchange is offloading several millions of dollars worth of Ether, causing a further slide in the cryptocurrency. 
• Uniswap Riles Up Users With Plan to Share Wallet Addresses Uniswap, the top decentralized exchange by trade volume, is taking flak after its new privacy policy revealed on Nov. 17 that Uniswap Labs may share wallet addresses with third parties in the event of regulatory or legal proceedings.
• FTX Hack Mystery Deepens with Statement from Bahamian Regulators Bahamian regulators are not responsible for the $477M hack of bankrupt crypto exchange FTX on Nov. 11, according to blockchain research firm Chainalysis. Chainalysis is among several firms hired by FTX’s new leadership to assist in bankruptcy proceedings, according to court documents filed this week. 
• Grayscale Reassures Investors After Sister Firm Seeks Emergency Funding Grayscale, the issuer of the world’s largest publicly traded crypto fund, is hoping to reassure investors that the digital assets backing its products are safe.

💜Community Love💜

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

Thanks @CamiRusso & @DefiantNews for a great convo on the DeFi trade we did recently. Tune in to learn more about the details & how we used @AaveAave on @0xPolygon. The crypto world has changed since then but the value of blockchain has not. https://t.co/MJidDAjQtH

— Ty Lobban (@TyLobban) November 21, 2022

So @AaveAave ended up w $1.5m in bad debt, everyone knew immediately.

DCG ended up in $1.5B in bad debt? No one knew after 6 months lol.

This is why we #defi

— 💜☀️🌿👀 (@chainyoda) November 22, 2022

Can’t believe it’s a been a year already… and still @ETHMovie is the best web3 project I’ve been involved in, it has everything that was promised about crypto… I’ll never be able to thank you enough for making me a part of it @Tropical_Jewel pic.twitter.com/07uUZQKsEL

— AiirA | PƧYFΛM (@AiiraMeridA) November 24, 2022

John Ray woke up and chose violence

let us all learn from his ways pic.twitter.com/NGlxb06g4p

— _gabrielShapir0 (@lex_node) November 17, 2022

✍️ News stories in The Defiant are written by Owen Fernau, Aleksandar Gilbert, Samuel Haig, yyctrader, and contributors, and are edited by Edward Robinson, yyctrader and Camila Russo. The video team is led by Alp Gasimov. The podcast is led by Camila.

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