Hypebeast Culture Drives MEME Rally Amid Market Bloodbath

Also, YAM's rebase, tBTC launch

Hello Defiers! Here’s what’s happenin in DeFi:

  • DeFi tokens sell off except for one coin

  • YAM Finance gets new life

  • tBTC launches for a second time

and more :)

The open economy is taking over the old one. Subscribe to keep up with this revolution. Click here to pay with DAI.

🎙Listen to this week’s podcast episode with Jihoz from Axie Infinity:

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We’ll be talking about MEME so check out the epic video we made about it. The video was produced in partnership with Robin Schmidt of Harmony Protocol.


🙌 Together with Zerion, a simple interface to access and use decentralized finance,  Perpetual Protocol, which provides decentralized perpetual contracts for any asset, and HackAtom V, a two-week virtual hackathon organized by Cosmos.


Here’s Why a Meme Coin Rallies Amid a Market Sell-Off

By Matty - DCLBlogger

It was a sea of red in the market yesterday. But while Ether slid by almost 10% and all DeFi tokens plunged even deeper, one project astonished the crypto world accelerating the 10x increase it had seen in the last seven days:

$MEME

A ticker most would pass off as a pump and dump. But is there more than meets the eye? The concept follows the road of coin pairings on DEX protocols like Uniswap, which allow traders to park funds and earn a part of the trading fees generated from volume on the pair. In this case, you would provide ETH-MEME liquidity on Uniswap.

But there's one big difference.

Along with fees, you can earn ‘points’ for staking in the Meme protocol, which are redeemable for Meme NFTs, or scarce non-fungible tokens, tied to unique, crypto-based designs. The release of these rare, exclusive items generate a frenzy similar to that seen in streetware’s hypebeast culture.

This changes the game.

Increased Demand

The proposition of fees alone is strong but adding an arbitrary asset that has a limited supply, (there are only 10 of some cards, and 100’s or 1,000’s of others), gets people fighting for it, which increases the value of these NFTs.

Increased interest in these unique tokens in the past week, with Yearn Finance founder Andre Cronje buying an NFT based on himself and the project’s collaboration with emerging digital artist Sven Eberwein, drove demand and pushed MEME past $1k on Sunday. Crypto exchange Poloniex listed the token Monday, spurring further gains, even as the broader market dumped.  

Backstory

It all started five weeks ago with a tweet from Jordan Lyall, product lead at ConsenSys, making fun of how quick you can copy-paste a DeFi protocol.

Suddenly the community assembled, made a Telegram group, claimed the $MEME ticker and airdropped 26,000/28,000 supply to 73 members there via a Google form. A cool 355.5 $MEME tokens each, or over $600k at the time of writing.

The rest of the 2,000 $MEME tokens were split between the contract creator and the initial liquidity pool on Uniswap to kickstart trading, with the LP tokens sent to Vitalik Buterin’s wallet, effectively burning the keys to claim those 1,000 MEME tokens back. 

Strong Hands

There are currently around 2,200 token holders of $MEME. The core community, which calls itself the “Citadel,” isn’t looking to sell.

“The citadel has strong hands,” MEME holder Gabriel Frank said. “Most believe we’re on to something great and so no one is selling.”

Blockbuster Sales

A scarce card, called “Legendary,” depicting Andre Cronje sold for 48 ETH, for example, while a Legendary Sergey Nazarov sold for 78 ETH on the secondary market.

How's that for a bonus within 15-20 days of staking?

Cronje said he was “amazed” by the project. 

Temporary Hype?

Some will say this is all due to temporary hype. In most cases a project does extremely well, sells out its initial phase of NFTs and people move on to the next shiny thing.

The MEME Community is hoping to prevent that by collaborating with renowned artists, generating a lasting stream of high-quality, desirable digital art.

Eberwein, who has sold pieces for 6-8ETH on Superrare was the first Artist drop.

You can stake your MEME to this pool and claim these Art NFTs.

CoinArtist, one of the famous and early artists in the crypto-art scene who's also the CEO of blockade games, signaled a potential collab.

These multiple cards and collectibles encourage more locking up of $MEME effectively taking them out of circulation.

Tie this with the fact the value of some of these cards can rise due to the scarcity, you get a frenzy of people trying to buy and stake $MEME to claim these before others do.

Which is exactly what's been happening over the last week.

Rewards Portal

Will this sustain?

In my opinion, it has the potential to.

The key is to provide a strong enough ‘rewards portal’ ie, famous artist collabs, rare NFTs, or they can even partner up with projects outside of the digital art world and provide virtual land or game assets.

The possibilities are endless.

Remember these NFTs are in most cases BONUS assets being claimed along with staking fees. If you replace the $MEME ticker with something like $REWARD, then it becomes a little clearer. It’s basically a reward portal for those who provide value to the ecosystem.

Risks

What are the risks?

Traditionally we've seen new projects boom and fall flat.

Usually it's due to a bug in the contract or a ‘rug pull', ie, the founder quickly cashes out the initial share of Community tokens, similar to what happened with Sushiswap.

But for MEME, 93% of tokens are distributed equally across the Community. The rest are locked in a liquidity pool with keys thrown away. So there is no way to rug pool. Considering all this is happening within the Uniswap protocol, there being a bug in the process is highly unlikely.

The only risks I can think of is if the supply of these NFTs becomes more than the demand and people find a better asset to put their money in, effectively moving out of the $MEME token.

There's also not much incentive currently for the smaller fish who will find it hard to earn points quickly enough to compete with larger players and thus get the spoils.

Fluctuations

The project will probably see huge fluctuations, big green days, big red days, just like any other 0-hero project.

But as long as the team, who are highly motivated, energized and well respected in their fields continue to build and fine-tune the project, (I believe they will), we should see continued growth. 

Art + DeFi + NFTs are reaching an epic intersection.

Add some meme culture and you have a product that's almost a perfect mix of buzz and incentivization to break through the noise.


YAM Finally Finds Fertile Ground After Succesful Rebase

Yam Finance’s first successful monetary exercise yesterday marks a new start to DeFi’s original food-based token

YAM is an experiment in rebasing cryptocurrencies, plus token incentives (aka yield farming) to drive liquidity, plus full on-chain governance, plus a DAO-like treasury managed by token holders. It’s also testing the power of the emoji 🍠.

Image source: YAM Medium

Its Aug. 11 launch immediately attracted hundreds of millions of dollars and a fierce community rallying around the project. But a bug which rendered governance impossible was found in the unaudited code two days later, prompting it to raise funds for an audit and relaunch an improved version. Yesterday, it passed its first test.

Target Peg

It targets a peg of 1 yUSD (Yearn Finance’s stablecoin) which it tries to achieve by adjusting, or “rebasing,” its supply. Whenever the price of YAM is above 1.05 yUSD, supply expands to lower the price, and when the price is below 0.95, supply contracts to raise it.

When supply expands, Yam’s treasury mints 10% of the rebase amount and sells it to the YAM/yUSD pool in Uniswap. In other words, it buys yUSD, which gets deposited in the treasury, and is managed by token holders. The project also directs 1% of inflows into the treasury to Gitcoin grants funding Ethereum public goods.

Rebase

Monday was YAM’s first successful rebase. Since the YAM price was way above the peg at almost $20, supply expanded and $571k in yUSD was added to the treasury, while $5.71k was contributed to Gitcoin.

The price dropped to below $7, but YAM holders’ wallet balance increased by 2.49x. The rebase happens every 12 hours and is meant to gradually push the price back to 1 yUSD.

The future of Yam Finance is now in the power of YAM holders, who can vote to change anything from protocol parameters, to treasure management to contributors’ compensation.


Bitcoin-on-Ethereum Token tBTC Launches Once More

Bitcoin-backed Ethereum token tBTC shut down four months ago because of a bug. Today, it announced the protocol (tbtc.network) is ready to be used again by BTC holders who want to access Ethereum applications.

The project is relajunching amid surging interest from Bitcoiners to use DeFi. There is now 100k Bitcoin, or $1.1B locked up to be used in Ethereum, most via wBTC, another Bitcoin-backed Ethereum token.

Image source: https://btconethereum.com/

tBTC wants to differentiate itself from wBTC and others, by claiming to be fully permissionless. While users have to trust custodians with their Bitcoin to use wBTC, tBTC says it’s trustless and uses a system which selects random “signers” who have responsibility for the deposited BTC.

“You can convert TBTC to BTC, and vice-versa, whenever you want, with no intermediary needed to sign off. And it’s simple: it only takes three easy steps for people to mint TBTC on tbtc.network and track their Bitcoin,” according to the release.


DeFi Yield Farming Aggregator APY.Finance Raises $3.6M: CoinDesk

APY.Finance, a yet-to-launch decentralized finance (DeFi) yield farming aggregator, announced Monday that it has completed a $3.6M seed funding round joined by investors including Arrington XRP Capital, Alameda Research, Cluster Capital and CoinGecko, CoinDesk reported.

U.S. Banks Can Hold Reserve Funds for Stablecoin Issuers: The Block

National banks and federal savings associations can now hold reserve funds for stablecoin issuers, according to new guidance from the U.S. Office of the Comptroller of the Currency. Monday's development notably follows the OCC's decision to allow federally chartered banks to hold custody of cryptocurrencies, The Block reported.


Kain Warwick hints Synthetix is moving to a Layer 2 sclaing solution.


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: I’m Camila Russo, author of The Infinite Machine, the first book on the history of Ethereum. I was previously at Bloomberg News in New York, Madrid and Buenos Aires covering markets. I’ve extensively covered crypto and finance, and now I’m diving into DeFi, the intersection of the two.

Uniswap's UNI Instantly Becomes One of DeFi's Most Widely Held Tokens

Thousands of DeFi traders just got airdropped about $1k.

Hello Defiers! Of course, the big news today is the launch of Uniswap’s UNI token.

DeFi’s largest DEX, the Etheruem dapp that’s processing more fees than Bitcoin itself, and the first decentralized exchange to beat a major centralized counterpart in daily volume, today airdropped 400 UNI directly into the wallets of anyone who had interacted with the protocol at any time, no matter the size of the transaction. More than 50k addresses are holding UNI less than a day after launch, already higher than addresses holding MKR and COMP. With the move, Uniswap proved this retroactive airdrop model can result in decentralized ownership, and provided the DeFi community with a taste of what universal basic income feels like as most in the space woke up with (at least) an additional ~$1k in their wallets.

Image source: Created by digital artist Sven Eberwein for The Defiant. Get the original NFT on SuperRare.

The open economy is taking over the old one. Subscribe to keep up with this revolution. Click here to pay with DAI (for 70 Dai/yr vs $100/yr).

🎙Listen to this week’s podcast episode with musician RAC here:

📺 Watch New Video on The Defiant’s YouTube Channel and Subscribe

Check out the just-released video on The Defiant’s YouTube channel! The amazing story of SushiSwap. The video was produced in partnership with Robin Schmidt of Harmony Protocol.


🙌 Together with Zerion, a simple interface to access and use decentralized finance,  Perpetual Protocol, which provides decentralized perpetual contracts for any asset, and HackAtom V, a two-week virtual hackathon organized by Cosmos.


UNI Instantly Becomes DeFi’s Third Most Decentralized Token Less than 24hrs After Launch

By Cooper Turley

Uniswap dropped the mic with the surprise launch of its native governance token - UNI.

Uniswap,  the leading DeFi DEX averaging more than  $350M in daily volume over the past month, airdropped 15% of the total 1 billion UNI minted at genesis, to anyone who had ever interacted with the protocol since its inception.

UNI is now held by more than 50k Ethereum addresses, making it instantly one of the most decentralized tokens in DeFi, only trailing Dai and LEND among the top 10 by market cap, according to Etherscan.

Uniswap has become a cornerstone of DeFi, the basic building block for other dapps and likely the first DEX most newcomers use, and all of them today are waking up with an extra $1.2k in UNI in their wallets, in a move that feels similar to a DeFi stimulus check or to a universal basic income, at least in this niche within crypto. Each trader who used Uniswap V1 or V2 received 400 UNI, currently valued at around $1,200, regardless of the historical volume transacted.

For historical liquidity providers, that bounty was even sweeter. Uniswap made sure to track liquidity from inception, meaning the earliest LPs stood to earn a larger portion of rewards for their early commitments. For the 220 traders holding at least 1 $SOCKS, or community-favorite tokenized Uniswap merch, 1000 UNI was (not so) quietly available for claim yesterday evening.

Here’s how the tokens are split among three distinct user groups:

  • Historical Liquidity Providers - ~49k addresses (4.92%)

  • Uniswap Traders - ~251k addresses (10.06%)

  • $SOCKS Holders - 220 holders (0.02%)

UNI Records

UNI is shaping up to be DeFi’s biggest token launch to date, with gas prices soaring to over 500 gwei per transaction, the highest it’s ever been in recorded history. Both Binance and Coinbase Pro listed UNI in under 4 hours, the fastest listing of any token on Coinbase.

The UNI/ETH pool has already aggregated nearly $500k in trading fees, putting it on par to have the highest 24h volume of any Uniswap pair to date.

Liquidity Mining

The UNI airdrop precedes a liquidity mining campaign set to go live Sept. 18 at 12:00am UTC. Of the 1B total genesis supply, 5M UNI will be allocated to the USDT, USDC, DAI and WBTC pools over the next two months. Users can provide liquidity and stake their positions via the new UNI mining dashboard to earn a pro-rata claim of the 54 UNI allocated to each pool per block.

A community treasury will retain  43% of the supply to be allocated for future incentives including contributor grants, community initiatives, and liquidity mining, as seen fit by governance. Here’s how the rest of the supply breaks down. 

Token Supply

The 1 billion UNI supply will be put in circulation over the next four years, with 60% going to users, 21.51% to team members and future employees, 17.80% to investors and .069% to advisors. Team, investor and advisor tokens are subject to four-year continuous lockups, meaning their positions become liquid in real-time. 

After the four-year genesis supply is distributed, a perpetual inflation rate of 2% will start, to incentivize participation in the protocol over passive ownership.

More than an Airdrop

The stories underpinning the airdrop is what makes this launch truly unique. From children testing Ethereum for the first time to marginalized individuals in third world countries receiving enough token to feed their families for months, this global wealth distribution event is one which shuts down all indicators that DeFi has lost its way.

VC Backed Narrative

UNI comes in the wake of a rising narrative which painted VC-backed projects as misaligned with their communities, while fully community-owned projects were hailed as the new gold standard. In this context, Uniswap was criticized for raising $11M in its latest round from big Silicon Valley funds and SushiSwap leveraged this sentiment to fork the project and try to lure away liquidity providers with its SUSHI token. 

UNI’s rollout following the vampire mining attack from SushiSwap shows that the most well-respected team in DeFi can pack a punch and that “VC-backed=bad” was a gross oversimplification.

Path to Decentralization

If DeFi teams can learn anything, retroactive incentives to value-added actors is a clear path to decentralization. While it was widely speculated that Uniswap would launch a token, the timing and distribution mechanics were unknown, which means nobody could prepare for the drop, a fact that has been met with high praise in the DeFi community.

Best shown by the price of UNI, the token given away for free is now trading at $3, up 300% from its first liquid market price of $1.

UNI holders will have the power to govern key protocol decisions from day one, except for control over the treasury, which will be delayed until October 17. One change UNI holders are likely to consider is to turn on Uniswap V2’s 0.05% protocol fee (which is now disabled), good for ~1/5th of the protocols $438M project annualized revenue according to Token Terminal following a 180 day timelock.

While it’s still early days for UNI, it's safe to say that food coins just got served.


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: I’m Camila Russo, author of The Infinite Machine, the first book on the history of Ethereum. I was previously at Bloomberg News in New York, Madrid and Buenos Aires covering markets. I’ve extensively covered crypto and finance, and now I’m diving into DeFi, the intersection of the two.

"Be Greedy in Private," Urges DeFi Investor Riding Fair Launch Trend

Also, Zerion's Uniswap integration, Kraken banking license, YFI cap

Hello Defiers, here’s what’s happening,

  • SAFE shows DeFi hunger for righteous founders can backfire

  • Zerion integrates with Uniswap

  • Kraken becomes first US regulated crypto bank

  • YFI holders want to cap supply at 30k

The open economy is taking over the old one. Subscribe to keep up with this revolution. Click here to pay with DAI (for 70 Dai/yr vs $100/yr).

🎙Listen to this week’s podcast episode with musician RAC here:

📺 Watch New Video on The Defiant’s YouTube Channel and Subscribe

Check out the just-released video on The Defiant’s YouTube channel! The amazing story of SushiSwap. The video was produced in partnership with Robin Schmidt of Harmony Protocol.


🙌 Together with Zerion, a simple interface to access and use decentralized finance,  Perpetual Protocol, which provides decentralized perpetual contracts for any asset, and HackAtom V, a two-week virtual hackathon organized by Cosmos.


SAFE Shows Toxic Undercurrent to Fair Launch Trend

In the latest DeFi drama a developer and investor behind a token called SAFE made a mistake when deploying a piece of code and now they’re both calling each other out and publishing their private chats, as the token tanks.

But this petty squabble points at a bigger problem: the latest DeFi trend of community-owned projects and fair launches has raised the bar to a level of virtuosity that most can’t or won’t reach.

Greed is good, Gordon Gekko said. But just… quietly.

Setting the Stage

Projects will do everything possible to look like they’re abiding by the new unwritten DeFi rules (no pre-mine, no VC money, 100% community-owned “valueless” token, decentralized governance). Once they’ve set the stage, they’ll look for ways to make a quick profit as soon as the project gains steam. Chef Nomi is one example with SushiSwap, Chef Insurance of SAFE is another.

YieldFarming.Insure launched with the commendable stated goal to incentivize DeFi traders to protect their investments with insurance instruments. Yield farmers who buy cover on their assets on Yearn Finance’s yinsure.finance, can stake the yNFTs tokens they get in exchange, on YieldFarming.Insure. Stakers would then receive $SAFE tokens in return.

The first three token pools added were for yNFT-ETH, yNFT-DAI and yNFT-WNXM. WNXM is insurance provider Nexus Mutual’s token.

The project had good initial traction with SAFE soaring by more than 10x to over $4k in just one day.

Raking in Millions

In the very early days of the project, Chef Insurance, who also goes by the name Alan, was approached by Azeem Ahmed, an investor who had been one of the first to farm SAFE thanks to an “accidental degen bet on NFTs,” and made “millions” by selling near the top, according to a leaked chat.

The problems started with the deployment of the fourth liquidity pool, a DAI-SAFE liquidity pool on Balancer. The pool would provide additional incentives for SAFE liquidity providers.

Chef Insurance asked Ahmed if he could help to deploy the pool by adding SAFE tokens. Ahmed, who was staking in all pools and earning SAFE, agreed, according to Chef’s and Ahmed’s leaked chats.

Rushing to Deploy

Ahmed started pushing the developer to start offering incentives for the fourth pool immediately. Ahmed’s concern was that if there were no incentives to stake SAFE, traders would “farm and dump” the token, and he’d be stuck holding SAFE in the pool. Chef Insurance was reticent as he didn’t want to blind-side other investors, but he finally agreed.

Amid the flurry of messages, Ahmed ended up opening the Balancer pool ahead of time, and in a panicked move, immediately removed the liquidity he had added. When he removed tokens, the pool locked up and left 10k SAFE inside.

Blame Game

Next, the blame game started between Ahmed and Chef, with both criticizing the other publicly and privately. The messages leaked are not a good look for either.

Beyond the pool deployment mess, it also transpired that the developer had been asking Ahmed for a $500k salary to take a gap year to develop the project, which would cover his living expenses and student debt payments.

Ahmed had agreed to this payment but was concerned that the agreement stays between them: publicly he should say he’s taking a $9k/month salary in line with what Yearn’s Andre Cronje is paid.

Be Greedy

“Be greedy privately,” Ahmed said. “You must look like a saint. Privately I’ll make sure you cash in hard.”

“Ok that’s a good idea,” the developer said.

If this expectation that open source developers and teams need to work for free, this private scheming will continue. There need to be better and transparent incentives for DeFi builders, or else they’ll either find some backhanded way to get paid market rates or go to another industry.


Zerion Integrates Uniswap for Seamless Token Trading

By Cooper Turley

Zerion unveiled a new Uniswap integration, allowing users to buy and sell 170+ tokens directly from a sleek asset management dashboard.

Outside of adjusting gas prices and executing orders, Zerion’s portfolio tracks token performance and trade history in USD value, an aspect not currently displayed on Uniswap’s trade history. There will be no additional fees to trade on Zerion.

The integration marks the first of many native trading and yield farming opportunities set to make its way to Zerion, offering a trusted platform (also supported on mobile) to track holdings with native onramps to DeFi’s top yield opportunities. It’s also a sign of DeFi portfolio managers’ efforts to start to become a one-stop-shop to track and also execute investments. 

As hinted in the Tweet, Uniswap is the first of many DEXs to be integrated into the platform with SushiSwap and Matcha being next on the docket.


Kraken Wins Bank Charter Approval

The State of Wyoming approved Kraken’s application to become the world’s first Special Purpose Depository Institution (SPDI). The new banking model allows Kraken to maintain custody and transact in both fiat and digital assets.

“Kraken Financial is the first digital asset company in U.S. history to receive a bank charter recognized under federal and state law, and will be the first regulated, U.S. bank to provide comprehensive deposit-taking, custody and fiduciary services for digital assets,” the release said.

The entity, tentatively called Kraken Financial, will enable clients to bank seamlessly between digital assets and national currencies, including paying bills and receiving salaries in crypto, as well as incorporate digital assets into investment and trading portfolios.


YFI Holders Vote to Make Sure No More Tokens Are Minted

Almost 92% of poll participants want to eliminate Yearn Finance’s ability to issue more of its YFI governance token so that total supply is capped at the current 30k.

“Burn the timelock on the YFI token so that no minting can ever take place again,” the proposal says.

The proposal could become the first governance decision that’s enforced when Yearn’s on-chain governance is deployed in the next two weeks, pending audits.


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: I’m Camila Russo, author of The Infinite Machine, the first book on the history of Ethereum. I was previously at Bloomberg News in New York, Madrid and Buenos Aires covering markets. I’ve extensively covered crypto and finance, and now I’m diving into DeFi, the intersection of the two.

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