Tether Flippening to Ethereum is Almost Complete

Good morning defiers! Here’s what’s going on in decentralized finance,

• Tether migration to Ethereum continues
• MakerDAO is the cheapest place to borrow Dai
• Synthetix raises $3.8 million from Framework Ventures

MakerDAO is Now the Cheapest Place to Borrow Dai

MakerDAO is the cheapest place to borrow USD-pegged stablecoins on decentralized finance after MKR holders cut interest rates this week.

MKR holders cut the so-called stability fee on MakerDAO, the equivalent of a loan interest rates, to 5.5 percent from 9.5 percent, and down from as high as 20.5 percent in July. That compares with Dai borrow rates of 11.6 percent on Compound Finance and 7.8 percent on dYdX, according to LoanScan.

Borrowing on DeFi has been usually reserved for speculators, as paying high rates only makes sense if you’re able to trade your way to an even higher return. If rates continue to decline, that means borrowing on DeFi becomes attractive to a wider audience.

Image source: LoanScan

That means it’s now cheaper to generate Dai directly from the source (which means putting up 150 percent of the loan with ether as collateral) than to borrow it elsewhere. It’s also cheaper to borrow Dai on Maker than to borrow USDC, which has borrow rates of 10 percent on Compound and 6.9 percent on dYdX. USDC is also pegged to the dollar, but it’s backed by fiat held in banks, rather than by ether.

It’s likely that the wide gaps between Dai borrowing rates will start to narrow and rates should converge as traders arbitrage the differences. Before that happens though, Dai supply should start climbing and MakerDAO’s share of the DeFi loan market, which had been declining as other platforms grew, should start increasing again. ETH locked in Maker is already picking up.

Image source: DeFi Pulse

Tether Moved 300 Million USDT to Ethereum

Synthetix Raises $3.8 Million from Framework Ventures

Synthetic assets platform Synthetix raised about $3.8 million from Framework Ventures, which bought 5 million SNX tokens, currently trading at almost $0.77, the company said in a blog post.

The majority of the tokens are escrowed for up to 24 months, and the firm is “committed to staking their SNX to contribute to the system by adding to the Synth supply, as well as through the community governance process,” according to the post.

Last week SNX rallied on speculation that a16z was buying up tokens.

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About the author: I’m Camila Russo, a financial journalist writing a book on Ethereum with Harper Collins. 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.