😣Yearn Finance Struggles to Find its Footing as Rates Rise

Hello Defiers! Here’s what we’re covering today: News Yearn Finance Struggles to Find its Footing as Rates Rise The Merge Set For Dress Rehearsal as Anticipation Builds for Launch U.K. Government Takes Step on Making Stablecoins a Form of Payment Bute...

Hello Defiers! Here’s what we’re covering today:



DeFi Essay



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Yield Aggregators

😣Yearn Finance Struggles to Find its Footing as Rates Rise

The Yield Aggregator Trailblazer is Lagging Other DeFi Stalwarts and Ether

By Owen Fernau


LEFT BEHIND Yearn Finance is being left behind. Even as other DeFi heavyweights such as Aave, MakerDAO, and Uniswap are outperforming Ether, the pioneering yield aggregator is losing support and value.

DROPPED This week, as Yearn celebrated its two-year anniversary, the project has fallen out of the public eye as total value locked (TVL) has dropped even in ETH terms by 51% year-to-date, according to DeFi Llama. USD-denominated TVL has dropped by 86% in the same time span as depressed crypto prices contribute to the fall.

TOP FIVE ASSETS Yearn’s YFI token hasn’t fared much better as it has underperformed the top five assets in the DeFi Pulse Index as well as BTC and ETH year-to-date, according to The Defiant’s newly released terminal.


Yearn Finance performance in grey. Source: The Defiant terminal


The Merge

🔥The Merge Set For Dress Rehearsal as Anticipation Builds for Launch

By Samuel Haig


LIVE irtually all that’s left before The Merge takes place is a dress rehearsal. The final testnet deployment for the next iteration of Ethereum is set to go live on the Goerli network in three weeks. Ethereum’s devs hope the code for The Merge will undergo minimal changes between launching on Goerli and hitting the mainnet

DEPLOYMENT The final deployment to a public testnet is scheduled for sometime between August 9 and August 11, according to a Github commit from Tim Beiko, an Ethereum core dev.

BLOCK HEIGHT The Merge will be triggered when the network’s block height reaches total terminal difficulty (TTD), also known as ‘the difficulty bomb’. Beiko’s suggested TTD puts the Goerli merge, which will be the final testnet deployment for Ethereum’s transition from Proof of Work to Proof of Stake around, on track to take place around August 10.


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Stablecoin Regulation

🏛 U.K. Government Takes Step on Making Stablecoins a Form of Payment

By Samuel Haig


BILL On July 19, Nadhim Zahawi, the chancellor of the Exchequer in the U.K., said the government will introduce a bill to set out how stablecoins may be used as a means of payment.

SANDBOX The bill follows the Treasury’s vow to explore measures designed to improve the competitiveness of the U.K. tax system regarding cryptocurrencies, study the legal status of DAOs, and launch a market infrastructure sandbox for digital firms in 2023.

PEGGED The move comes as regulators across the West continue to wrestle with the challenges and opportunities of digital tokens pegged to reserve currencies such as the U.S. dollar, and algorithmic stablecoins that are more opaque.


Blockchain Communities

🌆 Buterin Likes the Idea of ‘Network States’ Built Around the Blockchain

By Jason Levin


STARTUP SOCIETIES Crypto investor Balaji Srinivasan’s book The Network State was released on July 10 and centers around creating startup societies that are founded in the cloud, use an integrated cryptocurrency, and crowdfunded physical territories. In a July 12 blog post, Ethereum founder Vitalik Buterin shared his thoughts on the book.

NARRATIVE Although Vitalik disagrees with Balaji on some points, he’s undoubtedly in favor of experimenting with network states. He writes that network states “can be viewed as attempts to sketch out a bigger political narrative for crypto.” Rather than crypto being just a playground for degen traders and crypto bros, network states offer an opportunity to build entire communities and ecosystems around the blockchain.

NOVEL While this idea of network states sounds like something out of a Ray Bradbury novel, there have been multiple network states initiated during the bull run. CityDAO formed in July 2021 and soon bought a 40-acre plot of land in Wyoming for an undisclosed sum, and Praxis raised $15M to fund their techno-optimistic city.



📲 Three Trends to Watch As the SocialFi Era Dawns

You've Heard of DeFi and GameFi... Here Comes SocialFi and the Fusion of Web3 and Social Media

Guest writer Li Gong highlights the forces at work in crypto’s next phase.


SOCIALFI SocialFi is web3’s answer to social media — combining networking and finance to create decentralized social applications. It is one of this year’s fastest-growing blockchain segments even in the face of a severe bear market.

MONETIZE This merging of decentralized finance and social media promises better data control, freedom of speech and the ability for users to monetize their online following. Fulfilling these ambitions is far from certain, and it remains to be seen whether SocialFi is just another fad or the next big thing.

METAVERSE Whether the segment booms or bombs depends on three key areas: the user, the metaverse, and the experience. Let’s explore… What’s a social network without users? SocialFi must attract crypto and non-crypto users to give life to the online platforms. Currently, the segment counts many platforms similar to web2 giants such as Facebook and Twitter.


DeFi Essay

🧐 The Center Will Not Hold: How Select Crypto Projects are Decentralizing

Part Two: Optimism, Hop and Loot Provide Key Lessons on the Future of Decentralization

Guest writers Bruno Lulinski and David Kerr unpack how key projects are putting decentalization to work.


Part Two of a three-part series on Decentralization.

This article is part of a limited series of overviews on DAO fundamentals, a collaboration between the DAO Research Collective and The Defiant. Visit www.daocollective.xyz for more information and continue following The Defiant for future pieces on DAO governance, treasury management, community, employment and other topics.

ENERGY For almost any complex project, a certain level of activation energy is necessary to get the project off the ground. Individual leaders driving change, rapid iteration cycles, well-informed roadmaps — projects that want to move forward with some momentum naturally find it near-impossible to be decentralized in any significant way in the early days. Jesse Walden wrote a useful playbook for progressive decentralizationfor founders in crypto.

APPLICATIONS The normal course of action for blockchain-based applications undergoing the process of decentralization today is roughly:

  1. Create a governance token that gives holders the right to vote in some sort of directly- democratic process;
  2. Distribute governance tokens, usually as an airdrop to past users and stakeholders based on specific criteria determined by the initial project team;
  3. Invest in processes that relinquish the founding team’s control over the project, like creating a constitution to help navigate future challenges, forming internal working group structures, passing control of administrative controls and treasury management to the community of stakeholders, and providing a venue for stakeholders to participate in governance discussions.

PROCESS Below, we will walk through a few examples of projects that have used different iterations of this general methodology to begin the continual process of decentralization. These case studies demonstrate the different ways that application-level decentralization can manifest.


The Tube

📺 Hot Stuff: Is the fud over? Market is Up Only despite more 3AC fud



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🔗 The Most Important Scarce Resource is Legitimacy: Vitalik Buterin

The Bitcoin and Ethereum blockchain ecosystems both spend far more on network security - the goal of proof of work mining - than they do on everything else combined. The Bitcoin blockchain has paid an average of about $38 million per day in block rewards to mine

🔗 China’s Top Influencer Is Cancelled Over a Piece of Cake: Vice

The career of the country’s “Lipstick King” is in jeopardy after he accidentally touched on Beijing’s taboo in his livestream.

🔗 Is the Ethereum ‘Merge’ Driving This Rally?: CoinDesk

A proposed date for the transition from a proof-of-work to proof-of-stake protocol signaled a return of optimism to crypto markets.


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🧑‍💻 ✍️ Stories in The Defiant are written by Owen Fernau, Aleksandar Gilbert, Claire Gu, Samuel Haig, Jason Levin, and yyctrader, and edited by Edward Robinson, yyctrader and Camila Russo. Videos were produced by Robin Schmidt and Alp Gasimov. Podcast was led by Camila, edited by Alp.

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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, while free signups get only part of the content.Click here to pay with DAI (for $100/yr) or sub with fiat by clicking on the button above ($15/mo, $150/yr.