🦄 Recap: DeFi Week of Sept. 11

Welcome to a post-Merge world!

This week Ethereum finally executed its historic fusion of the Beacon Chain and its mainnet. It’s hard to remember when a technology venture underwent an upgrade with so much fanfare — the release of Apple iPhones of yore comes to mind. It’s impossible to recall a time when an online network switched its engine mid-flight without a hitch. Ethereum’s Merge was a first.

For an account of the moment The Merge went live and its potential impact turn to Sam Haig’s story. Sam also dug deep into how the Proof of Work mining community weathered the blowback from the shift to Proof of Stake. The new fork for PoW miners, ETHPoW, got off to a rocky start.

Sam also reported on how Lido and four big exchanges, including centralized powerhouses Coinbase and Kraken, quickly glommed more than half the staked Ether that will be used to tend the blockchain in the post-Merge era. That raises some thorny questions about decentralization, eh?

Over on The Defiant’s YouTube channel, Robin Schmidt and his crew produced a segment on how to stake ETH, and a roundup on all the ins and outs of the upgrade.

Meantime, Owen Fernau covered the impact on DeFi and the price action in ETH, which plunged 10% after The Merge as investors sold the news. Owen also wrote a preview of The Merge that addresses many of the less known changes Ethereum will feature. And Aleksandar Gilbert covered how centralized exchanges such as Coinbase quickly adjusted to Ethereum’s new era.

Rounding out our weekly report is Camila Russo’s podcast with Robert Lauko, the founder and head of research at Liquity, the DeFi lending protocol. And more DeFi primers, this week on Wrapped Bitcoin, Cosmos, and Tether.

Enjoy!

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The Defiant Weekly: Hours After The Merge — What Happened?

📺 Tuesday Tutorial: Stake Your ETH After The Merge

📺 Quick Take: The Final Merge Video Before The Merge

The Merge Moment

🤗 The Merge Goes Live in Historic Upgrade for Ethereum

After Years of Toil and Tests, Ethereum Shifts to Proof of Stake and Sets Stage for Further Changes

Samuel Haig reports on the moment The Merge went live, and some of the lesser-known changes to look for…

It’s done. The Merge was activated at 6:43 AM UTC time. The long-awaited upgrade to Ethereum occurred at block height 58,750,000,000,000,000,000,000, unifying the Proof of Stake, ‘Eth2’ Beacon Chain consensus layer with the Proof of Work mainnet and execution layer.

👉READ THE FULL STORY IN THE DEFIANT.IO👈

Decentralization Challenge

🔒 Coinbase One of Five Platforms to Lock Up Half of Staked ETH

Rapid Consolidation of Tokens May be Blow to Decentralization

Samuel Haig reports on how market moves may clash with Ethereum’s decentralization mission in this Defiant Premium story…

The Merge was supposed to be a great leap forward in the drive toward decentralization. But one day after the historic upgrade took place, five ventures controlled more than half of the ETH locked up for Ethereum staking. To many, that may look an awful lot like centralization.

To read the full story subscribe to The Defiant newsletter.

Proof of Work Scramble

📉 New PoW Ethereum Fork Plunges 75% Amid Flurry of Problems

ETHPoW Leaves Miners Fuming in Post-Merge Debut

Samuel Haig chronicles the struggles of a new PoW network…

The Merge may have launched without a hitch but ETHPoW, the Proof of Work fork of Ethereum aimed at die-hard miners, is off to a troubled start. In its first 24 hours, its ETHW coin has lost three-quarters of its value and users are complaining they cannot access the network using the information provided by the ETHPoW team, according to reports on Twitter.

👉READ THE FULL STORY IN THE DEFIANT.IO👈

Merge Dive

⛏ What The Merge Means For Proof-of-Work Miners

Ethereum Classic’s Hash Rate Is At An All-Time High

By Samuel Haig

Ethereum is not the only chain changing this week. Rival Proof-of-Work (PoW) chains are also being disrupted by The Merge. The upgrade boots PoW miners off the Ethereum network in favor of Proof-of-Stake (PoS) validators, displacing an estimated $5B worth of mining hardware. As a result, some miners have banded together and pledged to fork Ethereum and maintain the chain using Proof of Work consensus under the ticker ETHW.

👉READ THE FULL STORY IN THE DEFIANT.IO👈

NFT Roundup

🏆 NFT Collector Spends $50,000 To Immortalize Ethereum’s Last PoW Block

Starbucks Makes Web3 Move on Polygon

In which yyctrader reports on a Merge-inspired trophy hunter…

Yesterday, as crypto enthusiasts watched Ethereum transition to Proof of Stake consensus without skipping a beat, one investor decided that the occasion merited a serious memento.

👉READ THE FULL STORY IN THE DEFIANT.IO👈

Friday

News

• New PoW Ethereum Fork Plunges 75% Amid Flurry of ProblemsThe Merge may have launched without a hitch but ETHPoW, the Proof of Work fork of Ethereum aimed at die-hard miners, is off to a troubled start.
• Exchanges Resume ETH Transfers After Successful MergeCentralized crypto exchanges have re-enabled withdrawals and deposits of Ether and related tokens on Thursday, after a brief pause due to uncertainty surrounding the Merge, Ethereum’s biggest upgrade in its seven-year history.

Markets

• ETH Plummets Post-Merge as DeFi Chugs AlongMaybe the Merge was a sell-the-news event after all. ETH has fallen just under 10% in the past 24 hours, while Bitcoin, the world’s largest cryptocurrency, has only dropped 2%. The DeFi Pulse Index (DPI), the largest index focused on DeFi, is down 6%.

👀 Defiant Premium Story for Paid Subscribers (📜Scroll to the end!)

• Coinbase One of Five Platforms to Lock Up Half of Staked ETHThe Merge was supposed to be a great leap forward in the drive toward decentralization. But one day after the historic upgrade took place, five ventures controlled more than half of the ETH locked up for Ethereum staking. To many, that may look an awful lot like centralization.

NFT Roundup

• NFT Collector Spends $50,000 To Immortalize Ethereum’s Last PoW BlockYesterday, as crypto enthusiasts watched Ethereum transition to Proof of Stake consensus without skipping a beat, one investor decided that the occasion merited a serious memento.

DeFi Explainers

• What Is Wrapped Bitcoin?Incompatibility is inevitable when you have dozens of blockchain networks with their own smart contract formatting. This is why Bitcoin cannot simply be transferred to Ethereum in its original state. Bitcoins can be wrapped as Ethereum-compatible ERC-20 tokens, making that into Wrapped Bitcoin (WBTC).

Thursday

The Merge

• The Merge Goes Live in Historic Upgrade for EthereumIt’s done. The Merge was activated at 6:43 AM UTC time. The long-awaited upgrade to Ethereum occurred at block height 58,750,000,000,000,000,000,000, unifying the Proof of Stake, ‘Eth2’ Beacon Chain consensus layer with the Proof of Work mainnet and execution layer.
• Miners Pile Into Ethereum Classic Minutes After Merge as Hashrate Spikes 71%It only took minutes for Proof of Work miners to flock to Ethereum Classic after The Merge activated at 6:43 UTC on Thursday morning. With Ethereum no longer reliant on mining as it changed to the Proof of Stake consensus mechanism, the hash rate of the Ethereum Classic network is at a record 106 terahashes per second (TH/s).
• What The Merge Means For Proof-of-Work MinersEthereum is not the only chain changing this week. Rival Proof-of-Work (PoW) chains are also being disrupted by The Merge. The upgrade boots PoW miners off the Ethereum network in favor of Proof-of-Stake (PoS) validators, displacing an estimated $5B worth of mining hardware. As a result, some miners have banded together and pledged to fork Ethereum and maintain the chain using Proof of Work consensus under the ticker ETHW.

News

• All The ETH On Aave Borrowed Ahead Of The MergeInvestors have borrowed 100% of the ETH available on Aave, a DeFi lending protocol with $6.5B in total value locked according to The Defiant Terminal. That’s around 643,660 ETH worth over $1B as of Sep. 14.
• Compound Treasury Launches Institutional Lending ServiceCompound Treasury, a business that streamlines access to the Compound DeFi lending protocol on behalf of institutional clients, announced a new borrowing service Wednesday.

DeFi Explainers

• What Is Cosmos?When it comes to decentralized finance, the networks that make it run are divided into layers. What lies below Layer 1 blockchains are made up of stalwarts such as Bitcoin or Ethereum. Layer 2 networks comprise next-generation projects such as Aribitrum. And Layer 0 networks may be the least understood.

Wednesday

News

• U.S. Permits Tornado Cash Users to Access Crypto DepositsU.S. residents with crypto trapped on Tornado Cash may now apply for a license from the U.S. Treasury Department to retrieve their funds.
• Doodles NFT Project Raises $54M At $704M ValuationAfter over a month of silence on Twitter, Doodles are back with a bang. The popular NFT project announced a $54M raise on Sep. 13 that values Doodles at an eye-popping $704M. Alexis Ohanian, the co-founder of Reddit, led the funding round through his venture firm Seven Seven Six, according to Forbes.

Markets

• Macro Trumps The Merge As Crypto Dives After Hot Inflation DataWorse-than-expected U.S. inflation numbers sent global markets tumbling Tuesday despite mounting excitement over the Merge, the most significant upgrade to Ethereum in its seven-year history.

Tuesday

News

• On Eve of The Merge Skeptics and Supporters Gird for Raft of ChangesThe moment has finally arrived. Ethereum is poised to execute the most historic upgrade in its eight-year history. And the DeFi community is giddy with anticipation that the shift to Proof-of-Stake consensus will revitalize the blockchain network’s usefulness and value. Richard Craib’s response? Meh.
• ETH Fire Sale Unlikely After Shanghai Upgrade: NansenUnless The Merge sends Ether to the moon, Ethereum die-hards shouldn’t fear a fire sale when the post-Merge “Shanghai” upgrade takes effect next year, according to a new report from crypto analytics firm Nansen.
• MakerDAO Users To Mint DAI for Free After Debt Ceiling RisesMakerDAO’s users can now mint DAI for free. A recent MakerDAO executive vote raised the debt ceiling for its stETH vault to 200M DAI. Maker’s Wrapped stETH vault currently maintains a 0% stability fee, meaning users can create DAI against WstETH collateral without paying any fees on the position to Maker.

Markets

• Ether and PoW Coins Outshine Rivals as Merge LoomsEthereum is outperforming most leading digital assets as the Merge rapidly approaches, with ETH last changing hands for $1,700 — a 14% gain since Sep. 7.

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• Maple Revives Crypto Lending With $40M DealJust months after the crypto loan sector cratered, unsecured lending appears to be heating back up. On Sep. 9, Wintermute, a crypto market making company, took out an uncollateralized 40M USDC loan via Maple Finance, a company impacted by the drama that threatened the sector earlier this year.

DeFi Explainers

• What Is Tether?Tether (USDT) offers the familiarity and stability of the dollar, but in digital form, moving across blockchain networks. As one of the first stablecoins of its kind, Tether is the No. 1 stablecoin by market capitalization.

💜Community Love💜

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

And we finalized!



Happy merge all. This is a big moment for the Ethereum ecosystem. Everyone who helped make the merge happen should feel very proud today.



— vitalik.eth (@VitalikButerin) September 15, 2022

🧑‍💻 ✍️ Stories in The Defiant are written by Owen Fernau, Aleksandar Gilbert, Samuel Haig, and yyctrader, and edited by Edward Robinson, yyctrader and Camila Russo. Videos were produced by Robin Schmidt and Alp Gasimov. Podcast was led by Camila, edited by Alp.

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