Social Tokens; Plague or Paradigm Shift?
Also, Shanghai blockchain week recap, LiquidStake USDC loans for staked ETH, PieDAO's DeFi++ index
Hello Defiers! Here’s what’s going on in DeFi,
- New Defiant video on social tokens
- A recap of Shanghai blockchain week
- LiquidStake wants to give you USDC in exchange for staked ETH and here’s what CEO Jame Slazas said about the loan’s interest rate
- PieDAO launches a new DeFi token index
- Zerion adds P&L analysis
📺 Watch The Defiant’s New YouTube Video on Social Tokens
Video producer Robin Schmidt dives into social tokens in the latest Defiant video, produced in partnership with Harmony Protocol.
“In this episode we cover a range of social tokens, explore the pitfalls, the idiosyncracies and the value of a community when reduced to only the most committed members.”
🎙Listen to this week’s podcast episode with SBF & Solana’s Anatoly:
If you’re receiving this email, that means you’re a paid subscriber of The Defiant, (thank you!) You’re getting the full content of this newsletter, while free subscribers are getting only a portion of it. Subscribers also get exclusive access to The Defiant’s Discord chat group for the community, here’s a new link to join.
🙌 Together with Zerion, a simple interface to access and use decentralized finance, Sorare, a fantasy football game with officially licensed cards on Ethereum, and Near, a high-performance proof-of-stake blockchain that interoperates with Ethereum.
DeFi Takes Shanghai Blockchain Week by Storm
DeFi is meant to be global, interconnected and open, but there’s still a gap between East and West. Each side of the globe isn’t communicating of working together very much, which doesn’t make much (economic or business) sense. For example, did you know last week was Shanghai Blockchain Week?
If you didn’t (even if you did but), we got you. Vivian Hu of blockchain infrastructure firm Second State was there has a break down of the DeFi projects that stood out the most. Read her take here.
LiquidStake to Issue USDC Loans for Staked ETH
LiquidStake is the latest venture that wants to make it easier to stake ETH by giving validators liquidity on their deposits.
The DARMA Capital-backed project will issue USDC loans to users who deposit ETH to Ethereum 2.0 through them. Users will get USDC and staking rewards on their ETH.
$50M in ETH
DARMA Capital, co-founded by early ConsenSys employees Andrew Keys and James Slazas, is contributing to the new Eth2 proof-of-stake chain by staking $50M of ETH. At today’s prices, that amount would be around 20% of the required ETH for the chain to launch of mainnet.
Loan Interest Rate
As for the rate on the loans, LiquidStake and DARMA Capital CEO Slazas said they plan to release it next week, but that they are “unable to rehypothecate the assets which obviously is more costly.” Though if the ETH price rises, “even a 1% reward rate can return much more than a much higher interest rate on USD.”
Deposit Contract Released
Last week the deposit contract for Ethereum’s new proof-of-stake chain was released, allowing anyone to deposit ETH in exchange for staking rewards of an annual 15–20% when there is less than 1 ETH staked. The catch is validators won’t be able to withdraw their staked ETH or rewards until transfers are enabled on an unknown date that’s likely at least two years from now.
Another risk is that validators risk getting penalized for acting maliciously or if their nodes are offline. When staking directly to the contract, users are required to stake at least 32 ETH, or multiples of 32.
Projects like LiquidStake are trying to minimize these risks and inconveniences. Like other providers, Liquidstake has no minimum staking amount. It will allocate ETH to the user’s chosen service provider, including Bison Trails, ConsenSys Codefi, and Figment.
Zerion Adds Profit & Loss Analysis
Zerion now offers DeFi traders a way to easily track their profits and losses on any supported token in its asset management dashboard.
While Zerion has long displayed the price at which trades were entered and exited, this new feature showcases a clear-cut return, making it easy to see whether or not a trade is in the green.
The new update comes with average cost analysis, network fees on farming and daily returns on both trades and yields.
With its recent addition of social tokens, Zerion is continuing to offer traders a trusted home to track and manage their portfolio across an ever growing sector of tokens and farming opportunities.
PieDAO Launches New Small+Large Cap DeFi Index
PieDAO has fused its small-cap DeFi+S and large-cap DeFi+L index tokens to form DeFi++, a basket of the most popular DeFi tokens.
PieDAO’s DeFI index has 13 tokens instead of 12 for Synthetix’s sDEFI and 11 for Set Protocol’s and DeFi Pulse’s DPI. Another major difference is that the token with the highest weight (13.2%) is LINK, while the other two baskets don’t hold the asset at all. It charges no streaming fees, compared with DPI’s 0.95%.
The DeFi++ index outperformed DPI sDEFI, in backtests over the course of October - though by just 2.23 and 3.58 percentage points, respectively.
As competition to become the go-to DeFi basket of top tokens, PieDAO and DeFi Pulse feature liquidity mining incentives to purchase and provide liquidity for their indexes.
With DeFi++, traders earn PieDAO governance tokens called DOUGH, while the DeFi Pulse Index allows users to earn Index Coop governance tokens called INDEX.
For DeFi++, traders are only required to stake to the basket, whereas with INDEX farming traders must stake the DPI/ETH liquidity token.
As blue chips continue to rebound, we’re now seeing a strong sector emerge around index management and creating permissionless ways for communities to better govern baskets that offer users passive exposure to the ‘best’ DeFi tokens.
Bitcoin and Ethereum will process over $1 trillion worth of transfers this year.
Ryan Selkis @twobitidiotI just remembered that both Bitcoin and Ethereum will process over $1 trillion worth of real value transfers this year. And we didn't even really celebrate that.
3:05 PM ∙ Nov 11, 2020329Likes56Retweets
The Defiant is a daily newsletter focusing on decentralized finance, a new financial system that’s being built on top of open blockchains. The space is evolving at breakneck speed and revolutionizing tech and money. Sign up to learn more and keep up on the latest, most interesting developments. Subscribers get full access at $10/month or $100/year, while free signups get only part of the content.
About the founder and editor: Camila Russo is the author of The Infinite Machine, the first book on the history of Ethereum, and was previously a Bloomberg News markets reporter based in New York, Madrid and Buenos Aires. She has extensively covered crypto and finance, and now is diving into DeFi, the intersection of the two.