TAO Tanks on Subnet Drama

Happy Friday, Defiers!

TL;DR

TAO dropped 20% after a major subnet dev exited
Polygon, Frax, Curve target FX market
Kamino rolls out post-Drift exploit security feature
WLFI’s DeFi lending setup raises eyebrows
Why Now Is the Best Time to Stake ETH on Rocket Pool [SPONSORED]

Let’s dive in.

Markets are mostly flat today, with BTC just below $73K and ETH above $2.2K, both up about 1% on the day.

On the downside, Bittensor’s TAO is leading losses among the top-100 large-caps, dropping 20% in the past 24 hours on a public dispute between a major subnet developer and Bittensor’s founder. The founder of Covenant AI announced the project's departure from the Bittensor ecosystem last night, and accused Bittensor’s founder of exercising unilateral control over a network that presents itself as decentralized, going so far as to call it “decentralization theatre.”

TAO plummeted as much as 25%, bringing the subnet sector down 26% on the day, with Covenant’s SN3 alone down over 60%.

In DeFi, Solana’s largest lending protocol, Kamino, just introduced new smart contract-level security across its lending vaults. The move comes just over a week after (and as a direct response to) the ~$270 million Drift Protocol exploit, in which attackers used social engineering and compromised admin keys.

Polygon is seeing some DeFi action as Polygon Labs, Frax, Curve Finance, and DFB Network launch a suite of FX liquidity pools on the network, using Frax's frxUSD as the base dollar pairing. The move aims to target the global FX market, which processes $6.6 trillion daily.

Finally, Trump family-linked project World Liberty Financial is getting heat for its DeFi borrowing practices. The firm leveraged its treasury to borrow roughly $75 million in stablecoins from Dolomite, with total WLFI collateral positions on Dolomite currently valued at roughly $460 million as of April 9.

The problem is, Dolomite isn’t just any DeFi lending protocol. It’s co-founded by World Liberty Financial’s own chief technology officer, Corey Caplan. The dynamic has kicked off a slew of responses and comparisons to some of DeFi’s most cautionary tales.

Nexo is a digital wealth platform offering crypto yield up to 15% and crypto-backed credit lines from 1.9%. Join and get 30-day access to exclusive rates. Terms apply.

TICKER	VALUE	24H
BTC	$72,141	▲ 1.33%
ETH	$2,218.4	▲ 1.75%
XRP	$1.34	▲ 0.95%
BNB	$602.96	▲ 0.07%
SOL	$83.57	▲ 1.67%

Forwarded this newsletter? Subscribe for daily insights and curated news from The Defiant team, Monday-Saturday. It’s free.

Subscribe to Defiant Daily

How to Put Bitcoin to Work in DeFi

In episode 4 of Beyond Digital Gold: A Bitcoin DeFi Docu-series together with StarkWare, we break down the real ways people are putting their Bitcoin to work right now:
• borrowing against BTC without selling it
• earning yield through lending and staking
• spending BTC through Lightning
• providing liquidity in DeFi
• using more advanced structured BTC yield strategies

If you hold BTC and want to understand the real options for using it without just selling it, this episode is for you.