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Weekly Recap: Arbitrum Airdrop, Coinbase vs. SEC

March 26, 2023

Happy weekend Defiers! Here’s what we covered this week!

Arbitrum’s long-awaited airdrop occupied headlines throughout the week, with pre-market speculation and a chaotic launch capturing the attention of the DeFi community.

In other news, U.S. regulators continue to wage with web3. Coinbase, the leading U.S.-based centralized exchange, vowed to do battle with the SEC after receiving a Well Notice — a likely precursor to formal legal action — claiming the exchange violated securities laws.

The White House also devoted an entire chapter of its 2023 Economic Report of the President to panning the digital asset industry and calling for greater regulatory oversight of the sector.

Do Kwon, Terra’s fugitive founder, was also arrested in Montenegro after spending months runing from law enforcement. Authorities in South Korea and the United States both issued charges relating to Kwon’s role in the spectacular collapse of Terra.
And in this week’s podcast, Camila Russo sat down with MetaMask co-founder, to discuss the future trajectory for the popular wallet, his predictions for the next bull run, and the potential for a MASK token.

Enjoy!

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Podcast

Dan Finlay explains how MetaMask will become the Google of Web 3

This week, Camila spoke with Dan Finlay, the co-founder of the popular web3 wallet, MetaMask. We explored Dan’s background prior to co-founding MetaMask, where Dan sees MetaMask heading in the upcoming years, and a potential MASK token. The discussion also dives into the origin story of MetaMask, and touches on Dan’s hopes and dreams for the next bull run.

Today’s Sponsors

DeFi Alpha

Travel The EVM Ecosystem With LayerZero For A Potential Airdrop

https://thedefiant.io/defi-alpha-layerzero-airdrop-guide

Best of the Week

Owen Fernau examined reports from crypto firms claiming they are being de-banked by tradfi institutions in the United States. The Blockchain Association, a non-profit lobbying for the crypto industry, submitted Freedom of Information Act requests to the Federal Reserve, FDIC, and OCC in a bid to understand whether regulators are driving the suspected banking embargo.

Owen also covered the market moves triggered by the U.S. Federal Reserve hiking interest rates by 0.25%, and how less than two weeks after Euler Finance was hit by a nine-figure exploit, the attacker has returned nearly half the stolen assets.

Aleksander Gilbert dived into the SEC’s allegations that Coinbase may be violating securities laws. A former SEC attorney he interviewed said is may be “the defining case of the crypto era.” He also covered the SEC’s subpoena targeting Sushi, a long-standing stalwart of the DeFi sector.

Aleks also reported on the ARB airdrop, and how the frenzy of activity ironically pushed the network to its limits.

Samuel Haig covered Hong Kong’s latest moves to embrace web3. The territory announced it plans to regulate stablecoins next year, in addition to introducing a licensing regime for Virtual Asset Service Providers in mid-2023.

Sam also looked at the forthcoming gaming-focussed zkEVM rollup from Immutable X and Polygon, two of Ethereum’s leading scaling teams.

Defiant Video

How To Use Gains Network – Decentralized Derivatives Trading Tutorial

Today, we’re kicking things off with an exciting, but risky, perpetual futures example. We’ll then explore the gains network, before doing an actual walk through and placing some trades so stick around for some useful tips and tricks on how to generate returns, which you can start using right away. This video was sponsored by Gains Network.

https://www.youtube.com/watch?v=XJXtjXpDsXc

🤑 The Million Dollar Bet on Bitcoin

If you’re into crypto and you spend too much time on Twitter, you’ve likely heard of the million-dollar bet between Silicon Valley thought-leader Balaji Srinivasan and James Medlock, a pseudonymous, left-wing twitter user recently described as “FDR, but not racist and without polio.” Balaji has bet that Bitcoin will hit a million dollars within 90 days, even dumbfounding the most ardent Bitcoin maxis. But why?

https://www.youtube.com/watch?v=GomU0V8vM0g


Friday & Saturday

Hacks

  • Euler Hacker Returns $90M Less than two weeks after Euler Finance was hit by a nine-figure exploit, the attacker has returned nearly half the stolen assets, sending 51,000 ETH ($90M) back to the lending protocol’s deployer wallet.

Markets

  • New Lending Protocol Boosts Optimism TVL Optimism has grown faster in terms of total value locked (TVL) than any other top-12 blockchain over the past month, in part because of rising interest in a five-month-old DeFi lending protocol.

SEC Fight

Thursday

Regulation & Enforcement

Tech Updates

  • ARB Airdrop Pushes Arbitrum To Its Limit Almost four hours after ARB was launched, nearly half of the more than 600,000 eligible wallets have claimed Arbitrum’s long-awaited token. The frenzy of activity briefly pushed Arbitrum to its limit Thursday morning.
  • Uniswap V3 To Be Deployed On Avalanche Uniswap, the leading decentralized exchange by trading volume, is set to launch its V3 iteration on Avalanche, an Ethereum-compatible Layer-1 blockchain with over $1.5B in total value locked.
  • DRPC Launches With Aim to Decentralize Ethereum Access DRPC is trying to provide decentralized access to Ethereum. The provider, which launched Thursday, claims to be the first decentralized remote procedure call, or RPC. RPCs are communication protocols used by dApps to interact and share transaction information on blockchains.

Wednesday

Markets

  • Markets Trade Lower After 0.25% Rate Hike The US Federal Reserve has hiked its benchmark interest rate by 25 basis points in a widely expected decision. Markets turned lower after Fed chair Jerome Powell said that central bank officials “don’t see rate cuts this year,” in a press conference following the release.

Airdrops

  • Arbitrum Earmarks 112M ARB Tokens For Ecosystem DAOs DeFi protocols will soon control a significant share of the circulating supply for Arbitrum’s imminent native token. On Tuesday, the leading Ethereum Layer 2 network said that ecosystem DAOs will receive 112M ARB, roughly 10% of the 1.15B tokens earmarked for the airdrop.

Regulation

  • White House Report Calls For Greater Oversight of Web3 The White House’s 2023 Economic Report of the President includes a damning overview of web3 and calls for greater regulation of the sector. The report, which was compiled by the U.S. Council of Economic Advisors and published on Monday, slams cryptocurrencies as an ineffective means of payment and store of value.

Tuesday

Tech Updates

  • Polygon and Immutable Team Up On Gaming Focused zkEVM Polygon and Immutable, two of Ethereum’s top scaling teams, are joining forces to launch an Ethereum-compatible rollup powered by zero-knowledge proofs designed to support web3 gaming. Immutable zkEVM, the forthcoming Layer 2 solution, combines Polygon’s zkEVM technology with Immutable’s gaming-focused blockchain architecture.

TradFi

Regulation

  • Hong Kong To Release Licensing Details For Virtual Asset Businesses In June Hong Kong is moving quickly to regulate and foster a digital asset industry, with plans to introduce stablecoin regulations next year. Hong Kong’s secretary for financial services and the treasury, Christopher Hui, broke the news during the Aspen Digital Web3 Investment Summit on Monday.
  • Sushi Braces for Legal Fight After SEC Subpoena Sushi, a decentralized exchange with almost $600M in user deposits, and its “head chef” have been subpoenaed by the Securities and Exchange Commission. The exchange’s governance token, SUSHI, dropped 5% after Head Chef Jared Grey — a position akin to CEO — asked token holders to approve a $3M fund to cover Sushi’s expected legal expenses.

Monday

Tech Updates

DAOs

  • DeFi Llama Team Resolves Conflict Over Token Plans The infighting that engulfed DeFi Llama, a popular data website, over the weekend appears to be at an end. DeFi Llama’s Twitter account has put out a statement indicating that the internal conflict has been resolved.

Markets

  • Traders Bet Arbitrum Will Have the Second-Biggest Layer 2 Token Traders are betting Arbitrum tokens will trade above $1 when they hit users’ wallets on Thursday. Derivatives for ARB tokens, to be issued on March 24, are trading from just above $1 to as high as $9. These early bets would make Arbitrum the second-largest Layer 2 token.

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