🛑Weekly Recap: DeFi Derivatives Crackdown

This week, our resident DeFi degens explore the strategies for yield generation enabled by Prisma’s mkUSD, a new stablecoin backed by Ethereum liquid staking derivatives. In addition to the yields on offer for direct Prisma users, juicy returns are also available for liquidity providers operating on Curve and Convex.

If you feel like the 'crypto for good' ethos is getting buried by scandals and theatrics — you're not alone.

It's as if we've switched from a Shakespearean tragedy, where the FTX scandal is the cunning antagonist, to a Greek drama, where the chorus amplifies our concerns while diverting us away from the core ideals and the promise of Cryptah. In both theatrical traditions, the plot thickens, but what remains constant is our drift away from the original script.

Today, we've got some serious questions to dive into. Now that crypto veterans and community members have united to question the missing magic — it's high time we confront some hard truths. Are we living through an intermission or the unavoidable, tragic finale?

• Hacker Steals Over $700K After Hijacking Vitalik’s X Account Earlier on Saturday, the social media account of Ethereum founder Vitalik Buterin was hijacked. A malicious actor used Buterin’s X handle to post a phishing link. Taken in by Buterin’s apparent endorsement, a number of users lost high-value NFTs.

• Ark Invest and 21Shares Apply For Spot ETH ETF Ark Invest and 21Shares filed an application for a spot exchange-traded fund tracking the price of Ether on Sept. 6. The proposed Ark 21Shares Ethereum ETF was the first application for a spot Ether ETF filed in the United States. If approved, the trust would directly hold ETH.
• Ether Turns Inflationary As On-chain Activity Slides Ethereum’s on-chain activity receded this past week, with transaction fees dropping to an eight-month low. Data from Bit Info Charts shows average transaction fees on Ethereum dipped to their lowest level since January last weekend, with users paying less than $2.60 for simple token transfers. Average gas fees were just 9 gwei at the time of writing.
• CFTC Fines Opyn, ZeroEx, and Deridex The U.S. Commodity Futures Trading Commission (CFTC) initiated enforcement actions against three Delaware-based DeFi companies, accusing them of offering illegal digital asset derivatives to U.S. customers. The companies were charged with offering leveraged and margin commodity transactions without the required licenses.
• Arcade Facilitates $1.1M Loan Against Supreme T-Shirt Collection On Sep.1, 4K, a decentralized protocol for bringing physical assets on-chain, validated a complete collection of Supreme box logo T-shirts spanning from 1994 to 2020, to serve as collateral for a $1.1M loan on lending platform Arcade.xyz.roducts and securing funding.

• Coinbase and Aave Form Coalition to Promote Tokenized Assets Major players including Coinbase, Circle, and Aave Companies have formed the Tokenized Asset Coalition to serve as a steward of the burgeoning space. “We’re trying to work together to make this technology mature faster,” said Lucas Vogelsang, CEO of founding member, Centrifuge.
• MetaMask ‘Sell’ Feature Enables Ethereum Users To Cash Out Leading crypto wallet provider MetaMask has launched a new feature that allows users to sell their crypto and receive payments in USD, EUR, or GBP directly in their bank or PayPal accounts. However, early users are reporting steep fees associated with the service.
• Starknet Activity Surges On Token Speculation Starknet consistently ranked as the second most active L2 by transaction volume, posting a record-high throughput of 9 transactions per second on Sep. 3. Activity trended up after Braavos, a Starknet wallet provider, published and then quickly deleted an article last week revealing that Starknet’s long-awaited STRK token will soon be available to the public.
• Vitalik Buterin Co-authors Paper Addressing Blockchain Privacy Ethereum chief scientist, Vitalik Buterin, teamed up with top blockchain researchers to review the code for Privacy Pools, a new coin-mixing protocol. Privacy Pools lets users anonymously verify that a wallet is not interacting with sanctioned addresses.

• Visa Taps Solana For Merchant Settlements In USDC Payments giant Visa is launching a pilot program that will enable merchants to receive USDC payments on Solana. “By leveraging stablecoins like USDC and global blockchain networks like Solana and Ethereum, we're helping to improve the speed of cross-border settlement,” said Cuy Sheffield, Head of Crypto at Visa.
• Unstoppable Domains Launches On-Chain Encrypted Messaging Unstoppable Domains launched a new feature allowing users to send and receive messages between web3 domains including addresses with the popular “.eth,” “.NFT,” and “.crypto” suffixes. Ethereum-based messaging leverages the Extensible Message Transport Protocol (XMTP), making it interoperable with other popular web3 tooling.

• SEC Settles Landmark NFT Enforcement Action For $6M Impact Theory, a media company that raised over $30M from NFT sales in 2021, settled an SEC lawsuit filed against it last week for $6.1M without admitting any wrongdoing. Analysts are speculating the SEC may lean on the case as precedent for future actions targeting NFT issuers.
• Stake Crypto Casino Resumes Operations After $41M Exploit Stake, a leading Australian-Curaçaoan crypto gambling platform, has resumed operations after losing $41 million in a hot wallet exploit. The company said that user funds remain unaffected and that users who transacted during the hack will be reimbursed.
• Gitcoin Founder Kevin Owocki To Return Kevin Owocki, the founder of Gitcoin, plans to return to the project after exiting last June. The news comes as Gitcoin is garnering controversy for recently partnering with the global energy conglomerate, Shell, and introducing a “diversity mandate” informing how grant funding is distributed to recipients.he announcement.

• Vitalik Offloads MKR After MakerDAO Founder Pitches Solana Fork Tensions are flaring between MakerDAO and the broader Ethereum community after Maker’s founder proposed forking Solana for its future appchain migration. Maker’s MKR governance token dipped 5.6% after Ethereum founder, Vitalik Buterin, sold his stake of 500 MKR for 353 ETH ($580,000), apparently in response to the news.