Aragon Drama Pushes On-Chain Governance Idealists to the Meatspace

Also, taking out a Dai loan with renBTC, Devcon 6 postponed, Polkadot launch.

Hello Defiers, please disregard previous email as it had an incorrect video for the renBTC tutorial embeded. Its’s been corrected here.

Here’s what’s happening in decentralized finance,

  • Aragon governance drama splits Ethereum community

  • Celebrating Bitcoin Pizza Day with renBTC

  • Devcon 6 postponed and to be held in Bogota

  • Polkadot launches network’s first phase

  • Foundation is latest to join red-hot tokenized asset space

and more!

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: Interview with the Winklevoss twins


🙌 Together with Eidoo, a cryptocurrency-powered debit card and platform for easy access to decentralized finance.


On-Chain Idealists Take Legal Dispute to ‘Meatspace’ 

By Cooper Turley

Aragon was built with the vision of helping spur hundreds of communally owned organizations, governed by token-based votes and computer code. But now that problems with one of its own grant recipients have escalated, it’s turning to plain, old, physical courts.

The story broke when Autark posted this May 22 blog post stating that Aragon “filed a baseless legal action in Switzerland against Autark LLC,” a US company, and that it was seeking to nullify the remainder of the grant they were awarded. Aragon replied with its own post saying it stopped paying out Autark’s grant in January “due to breach of the grant agreement,” as the team hadn’t met agreed-upon goals, and that it filed the lawsuit to claim jurisdiction in Switzerland after Autark threatened to sue in the US. Cofounder Luis Cuende wrote in the post that the former grant recipient is asking for a settlement of $800k.

Still, Aragon wants to move on, Cuende told The Defiant. “We want to close this as soon as possible. It's now on Autark to drop their threats and come to their senses,” he said. “Doors are open.”

Autark CEO Yalda Mousavinia said in a message, “we have a strong legal case against him [Cuende] and the Aragon Association. That’s why he decided to sue us first. And that is the way he decides how to spend the Aragon Association’s money.” She also denied that her company is asking for an $800k settlement.

$2.5M in Grants

Aragon, an open source platform enabling users to create and launch DAOs, raised 275k ETH in a 2017 ICO. It used its treasury in part to fund grants programs such as Flock, which was disbanded in February. Autark, a company building tools to enhance DAO coordination, won two grants, AGP-19 and AGP-73, amounting to roughly $2.5M in funding vested over the course of multiple years.

Autark received half of the first tranche of AGP-73 for $200,000 in November, 2019, with the remaining $200,000 agreed to be distributed in January. It was at this time that Aragon stopped making payments and the dispute began. 

“Baseless Complaints”

Autark said in a blog post Aragon’s breach-of-contract claims are “baseless complaints,” and that Aragon stopped payments before giving them a chance to “cure any alleged defects in performance.” 

Cuende said on Twitter his team had tried to solve the problem amicably, but that all they got from Autark was the following answer: “Talk to our lawyers.” Cuende also said in a video posted Tuesday that Aragon isn’t using its own court system because, while “it’s great, it’s not recognized worldwide. This Swiss lawsuit is to protect ourselves so they cannot sue us in a  different jurisdiction than where the agreements” were made. Aragon Court doesn’t replace the traditional legal system when there are problems between two legal entities, he said.

Community is Split

The Ethereum community is split between those who support Aragon’s decision to go to the so-called “meatspace” legal system, while others argue the dispute should have been resolved in the project’s own court.

Cuende said in the May 26 video that Aragon Court is meant to resolve onchain disputes such as 51% attacks, meaning that this particular case is not relevant to the Court’s design. Community members have countered this claim, stating that this case is the perfect testing ground for the highly-anticipated product.

Regardless of whether the Court is used or not, we’ve seen a number of responses on both sides of the table. Here are a few worth reading.

For Aragon:

For Autark:

DAOs Endure

Still, this is just a drop in the wider bucket of the vibrant DAO landscape.

If nothing else, it’s fascinating to see the DAO hypothesis playing out live, and cases such as this demonstrating rare edge cases in which community sentiment runs both ways.

[Post was updated with Autark’s response at 12:30pm EST]


How I Celebrated Bitcoin Pizza Day Late (And on DeFi)

By DeFi_Dad

May 22nd was the epic 10-year anniversary referred to as Bitcoin Pizza Day. By now, you probably have seen a million pizza emojis and references to the fact that one poor guy spent 10,000 BTC on pizza, and not just once, but supposedly eight times! Do the math: if it's true, he spent 80,000 BTC going back to 2010, equal to about $720 MILLION in USD —if you assume a price of $9,000 for BTC.

I think it's kinda ironic that 10 years later it doesn't feel much easier to spend BTC on pizza and even more ironic, no one spends their BTC! It's been deemed digital gold by the Bitcoin community and Wall St. People buy and hold BTC versus spending it on simple transactions like pizza or coffee. Thankfully we have over $7B in stablecoins on Ethereum that we can increasingly depend on as a medium of exchange.

So what about my BTC?! Well, I can hold it in cold storage or transfer it wallet-to-wallet, but aside from that, I'm pretty much stuck having to use centralized services to open a collateralized loan (ie BlockFi) or use BTC to trade on perpetual markets like the most popular centralized ones at BitMex, Deribit, and Bybit. 

I'm DeFi Dad, not CeFi Dad! So this got me wondering, what can I do in DeFi to put my native BTC to use?

A New Day With renBTC

As luck would have it, Ren Protocol came through just yesterday! Ren unveiled the long awaited RenBridge at bridge.renproject.io, where I can swap my BTC for renBTC without any middleman or KYC, just the usual DeFi experience of connecting my Ethereum (and now Bitcoin) wallet while trusting only the Ren smart contracts.

(Btws, please be aware the Ren team does still have a pause function in their control as an emergency precaution. I think it's very pragmatic when launching new smart contracts that could present a risk to newly deposited funds, even if they've been through audits. In the future when this admin right is abstracted away from the control of the Ren team, these smart contracts can then be deemed "trustless.")

Tutorial: How to Swap BTC for renBTC and Open a MakerDAO Loan

I don't have much else to share about this huge moment for DeFi and my first experience today using renBTC because I'd rather show you! Watch the following video as I:

  • Start with BTC in a Nano Ledger hardware wallet

  • Swap BTC for renBTC using the RenBridge

  • Then swap renBTC to WBTC with 1inch.exchange

  • Lastly, use WBTC to open a leveraged loan in MakerDAO to get Dai

Risks and Cautions Using These DeFi Apps

This is not financial advice and you should approach this new RenBridge with caution. There is always risk in using DeFi apps and protocols, including technical risks (ie smart contracts bugs), financial risks (ie liquidity crises), and admin risk. 

You should also be cautious and aware of the following risks: As I called out earlier, there is a pause function in control of the Ren team, meaning they can shut down the Ren network. It's a precaution while these smart contracts are new, but you should be aware of it. If you use 1inch.exchange, renBTC is still very illiquid on Ethereum. You could end up with a terrible exchange rate and/or lots of slippage if trying to swap more than the small amount I demonstrated (ie. $100 of renBTC).

If you use DeFi Saver, you're trusting their smart contracts to open a vault for you, which entails some risk. By opening a vault with MakerDAO, there's risk of liquidation if the price of WBTC drew down to your liquidation price, if you don't maintain a collateralization ratio of 150%. There's also risk of a congested network like what we saw on March 12th when people were having trouble getting through their transactions on the Ethereum network. Please do your own research and never follow this tutorial as financial advice. I'm a DeFi product enthusiast, not a financial advisor.

Devcon 6 Was Postponed to 2021 & Will be Held in Bogota

Ethereum’s annual gathering will be postponed for the first time due to the COVID19 pandemic and held next year in Bogota, Colombia.

The large Argentine Ethereum community had been lobbying for the next Devcon to be held in Buenos Aires for the past several months. The push made the Ethereum Foundation look South and apparently Colombia’s more stable economy and venue options won out.

“Agora [the venue] presented us with an ideally-located and fully modern conference center that is built to handle the catering, WiFi, meeting-space and other needs of an event like Devcon,” the EF’s blog post said.

The EF decided to postpone Devcon rather than organize a virtual event or be subject to last-minute changes in travel and lockdown measures . This year, the plan is to hold “a set of worldwide and independent events this fall.”

First Phase of Polkadot Network Goes Live

After four years of development, the Web3 Foundation on Tuesday launched the first phase of the Polkadot network, a sharded protocol that allows decentralized blockchain networks to operate together.

The current mainnet will operate via a Proof-of-Authority consensus mechanism, in which the Web3 Foundation retains control of the chain, “to execute critical logic and security audits and calibrate final aspects of the network,” Web3 wrote in a blog post. In this phase, holders of Polkadot’s native DOT tokens will be able to claim their tokens and submit their intention to stake, Messari reported. The Web3 Foundation may conduct a “DOT allocation sale to further decentralize the token distribution,” the Web3 Foundation said.

Buying Crypto Just Got Easier in the US and Europe

Transak and Wyre partnered to allow residents of most US states and European countries to buy 300+ cryptocurrencies with their debit cards in minutes, without having to go through a centralized exchange or extensive KYC. Easier fiat to crypto on ramps are key to mainstream adoption and this is a good step forward.

Tokenized Goods Space Heats Up With New Player

Foundation is the latest in a series of projects seeking to provide a marketplace for tokenized assets —these are real-world assets linked to tokens which trade in secondary markets. Tokens provide traceability, allows creators to more directly profit from their work, and fans the chance to support artists, speculate on their success, and simply buy their goods. The first Foundation Market is live at NeueGoods.com


Crypto Chicks and DAOstack are hosting a virtual hackathon. Here’s the info:

Planet Wide SOS Hackathon -Solutions to Heal the World

Join Planet Wide SOS Hackathon to fund your ideas and solutions that help local communities (Anything Local Track) or create global remote platforms (Everything Remote Track). The prize fund is being raised and governed by the people from 40 countries via a digital decentralized coop The Builder Collective. Join to become a coop member with a voice to select which projects to fund. Open to all technologies, all countries, all genders. No programming experience is required - Top Business Ideas Awards are available. Diverse teams will be recognized with the Top Women-Led Teams Awards. Your solution matters - register to maximize your contribution and voice now at https://soshackathon.com!


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.

Click here to pay with DAI.There’s a limited amount of OG Memberships at 70 Dai per annual subscription ($100/yr normal price).

About the author: I’m Camila Russo, a financial journalist writing a book on Ethereum with Harper Collins. (Pre-order The Infinite Machine here). 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.

Aragon Drama Pushes On-Chain Governance Idealists to the Meatspace

Also, taking out a Dai loan with renBTC, Devcon 6 postponed, Polkadot launch.

Hello Defiers! Here’s what’s happening in decentralized finance,

  • Aragon governance drama splits Ethereum community

  • Celebrating Bitcoin Pizza Day with renBTC

  • Devcon 6 postponed and to be held in Bogota

  • Polkadot launches network’s first phase

  • Foundation is latest to join red-hot tokenized asset space

and more!

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: Interview with the Winklevoss twins


🙌 Together with Eidoo, a cryptocurrency-powered debit card and platform for easy access to decentralized finance.


On-Chain Idealists Take Legal Dispute to ‘Meatspace’ 

By Cooper Turley

Aragon was built with the vision of helping spur hundreds of communally owned organizations, governed by token-based votes and computer code. But now that problems with one of its own grant recipients have escalated, it’s turning to plain, old, physical courts.

The story broke when Autark posted this May 22 blog post stating that Aragon “filed a baseless legal action in Switzerland against Autark LLC,” a US company, and that it was seeking to nullify the remainder of the grant they were awarded. Aragon replied with its own post saying it stopped paying out Autark’s grant in January “due to breach of the grant agreement,” as the team hadn’t met agreed-upon goals, and that it filed the lawsuit to claim jurisdiction in Switzerland after Autark, which is asking for an $800k settlement, threatened to sue in the US.

Still, Aragon wants to move on, cofounder Luis Cuende told The Defiant. “We want to close this as soon as possible. It's now on Autark to drop their threats and come to their senses,” he said. “Doors are open.”

Autark had yet to respond to a request for comment. The company’s CEO Yalda Mousavinia has previously said this is not the first time Aragon has had issues regarding its community grants and defends the company’s work.

$2.5M in Grants

Aragon, an open source platform enabling users to create and launch DAOs, raised 275k ETH in a 2017 ICO. It used its treasury in part to fund grants programs such as Flock, which was disbanded in February. Autark, a company building tools to enhance DAO coordination, won two grants, AGP-19 and AGP-73, amounting to roughly $2.5M in funding vested over the course of multiple years.

Autark received half of the first tranche of AGP-73 for $200,000 in November, 2019, with the remaining $200,000 agreed to be distributed in January. It was at this time that Aragon stopped making payments and the dispute began. 

“Baseless Complaints”

Autark said in a blog post Aragon’s breach-of-contract claims are “baseless complaints,” and that Aragon stopped payments before giving them a chance to “cure any alleged defects in performance.” 

Cuende said on Twitter his team had tried to solve the problem amicably, but that all they got from Autark was the following answer: “Talk to our lawyers.” Cuende also said in a video posted Tuesday that Aragon isn’t using its own court system because, while “it’s great, it’s not recognized worldwide. This Swiss lawsuit is to protect ourselves so they cannot sue us in a  different jurisdiction than where the agreements” were made. Aragon Court doesn’t replace the traditional legal system when there are problems between two legal entities, he said.

Community is Split

The Ethereum community is split between those who support Aragon’s decision to go to the so-called “meatspace” legal system, while others argue the dispute should have been resolved in the project’s own court.

Cuende said in the May 26 video that Aragon Court is meant to resolve onchain disputes such as 51% attacks, meaning that this particular case is not relevant to the Court’s design. Community members have countered this claim, stating that this case is the perfect testing ground for the highly-anticipated product.

Regardless of whether the Court is used or not, we’ve seen a number of responses on both sides of the table. Here are a few worth reading.

For Aragon:

For Autark:

DAOs Endure

Still, this is just a drop in the wider bucket of the vibrant DAO landscape.


If nothing else, it’s fascinating to see the DAO hypothesis playing out live, and cases such as this demonstrating rare edge cases in which community sentiment runs both ways.


How I Celebrated Bitcoin Pizza Day Late (And on DeFi)

By DeFi_Dad

May 22nd was the epic 10-year anniversary referred to as Bitcoin Pizza Day. By now, you probably have seen a million pizza emojis and references to the fact that one poor guy spent 10,000 BTC on pizza, and not just once, but supposedly eight times! Do the math: if it's true, he spent 80,000 BTC going back to 2010, equal to about $720 MILLION in USD —if you assume a price of $9,000 for BTC.

I think it's kinda ironic that 10 years later it doesn't feel much easier to spend BTC on pizza and even more ironic, no one spends their BTC! It's been deemed digital gold by the Bitcoin community and Wall St. People buy and hold BTC versus spending it on simple transactions like pizza or coffee. Thankfully we have over $7B in stablecoins on Ethereum that we can increasingly depend on as a medium of exchange.

So what about my BTC?! Well, I can hold it in cold storage or transfer it wallet-to-wallet, but aside from that, I'm pretty much stuck having to use centralized services to open a collateralized loan (ie BlockFi) or use BTC to trade on perpetual markets like the most popular centralized ones at BitMex, Deribit, and Bybit. 

I'm DeFi Dad, not CeFi Dad! So this got me wondering, what can I do in DeFi to put my native BTC to use?

A New Day With renBTC

As luck would have it, Ren Protocol came through just yesterday! Ren unveiled the long awaited RenBridge at bridge.renproject.io, where I can swap my BTC for renBTC without any middleman or KYC, just the usual DeFi experience of connecting my Ethereum (and now Bitcoin) wallet while trusting only the Ren smart contracts.

(Btws, please be aware the Ren team does still have a pause function in their control as an emergency precaution. I think it's very pragmatic when launching new smart contracts that could present a risk to newly deposited funds, even if they've been through audits. In the future when this admin right is abstracted away from the control of the Ren team, these smart contracts can then be deemed "trustless.")

Tutorial: How to Swap BTC for renBTC and Open a MakerDAO Loan

I don't have much else to share about this huge moment for DeFi and my first experience today using renBTC because I'd rather show you! Watch the following video as I:

  • Start with BTC in a Nano Ledger hardware wallet

  • Swap BTC for renBTC using the RenBridge

  • Then swap renBTC to WBTC with 1inch.exchange

  • Lastly, use WBTC to open a leveraged loan in MakerDAO to get Dai


Risks and Cautions Using These DeFi Apps

This is not financial advice and you should approach this new RenBridge with caution. There is always risk in using DeFi apps and protocols, including technical risks (ie smart contracts bugs), financial risks (ie liquidity crises), and admin risk. 

You should also be cautious and aware of the following risks: As I called out earlier, there is a pause function in control of the Ren team, meaning they can shut down the Ren network. It's a precaution while these smart contracts are new, but you should be aware of it. If you use 1inch.exchange, renBTC is still very illiquid on Ethereum. You could end up with a terrible exchange rate and/or lots of slippage if trying to swap more than the small amount I demonstrated (ie. $100 of renBTC).

If you use DeFi Saver, you're trusting their smart contracts to open a vault for you, which entails some risk. By opening a vault with MakerDAO, there's risk of liquidation if the price of WBTC drew down to your liquidation price, if you don't maintain a collateralization ratio of 150%. There's also risk of a congested network like what we saw on March 12th when people were having trouble getting through their transactions on the Ethereum network. Please do your own research and never follow this tutorial as financial advice. I'm a DeFi product enthusiast, not a financial advisor.

Devcon 6 Was Postponed to 2021 & Will be Held in Bogota

Ethereum’s annual gathering will be postponed for the first time due to the COVID19 pandemic and held next year in Bogota, Colombia.

The large Argentine Ethereum community had been lobbying for the next Devcon to be held in Buenos Aires for the past several months. The push made the Ethereum Foundation look South and apparently Colombia’s more stable economy and venue options won out.

“Agora [the venue] presented us with an ideally-located and fully modern conference center that is built to handle the catering, WiFi, meeting-space and other needs of an event like Devcon,” the EF’s blog post said.

The EF decided to postpone Devcon rather than organize a virtual event or be subject to last-minute changes in travel and lockdown measures . This year, the plan is to hold “a set of worldwide and independent events this fall.”

First Phase of Polkadot Network Goes Live

After four years of development, the Web3 Foundation on Tuesday launched the first phase of the Polkadot network, a sharded protocol that allows decentralized blockchain networks to operate together.

The current mainnet will operate via a Proof-of-Authority consensus mechanism, in which the Web3 Foundation retains control of the chain, “to execute critical logic and security audits and calibrate final aspects of the network,” Web3 wrote in a blog post. In this phase, holders of Polkadot’s native DOT tokens will be able to claim their tokens and submit their intention to stake, Messari reported. The Web3 Foundation may conduct a “DOT allocation sale to further decentralize the token distribution,” the Web3 Foundation said.

Buying Crypto Just Got Easier in the US and Europe

Transak and Wyre partnered to allow residents of most US states and European countries to buy 300+ cryptocurrencies with their debit cards in minutes, without having to go through a centralized exchange or extensive KYC. Easier fiat to crypto on ramps are key to mainstream adoption and this is a good step forward.

Tokenized Goods Space Heats Up With New Player

Foundation is the latest in a series of projects seeking to provide a marketplace for tokenized assets —these are real-world assets linked to tokens which trade in secondary markets. Tokens provide traceability, allows creators to more directly profit from their work, and fans the chance to support artists, speculate on their success, and simply buy their goods. The first Foundation Market is live at NeueGoods.com


Crypto Chicks and DAOstack are hosting a virtual hackathon. Here’s the info:

Planet Wide SOS Hackathon -Solutions to Heal the World

Join Planet Wide SOS Hackathon to fund your ideas and solutions that help local communities (Anything Local Track) or create global remote platforms (Everything Remote Track). The prize fund is being raised and governed by the people from 40 countries via a digital decentralized coop The Builder Collective. Join to become a coop member with a voice to select which projects to fund. Open to all technologies, all countries, all genders. No programming experience is required - Top Business Ideas Awards are available. Diverse teams will be recognized with the Top Women-Led Teams Awards. Your solution matters - register to maximize your contribution and voice now at https://soshackathon.com!


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.

Click here to pay with DAI.There’s a limited amount of OG Memberships at 70 Dai per annual subscription ($100/yr normal price).

About the author: I’m Camila Russo, a financial journalist writing a book on Ethereum with Harper Collins. (Pre-order The Infinite Machine here). 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.

DeFi Hackathon Might Produce Next Top Money Lego; Here's Five Great Projects

Also, RenVm Bitcoin-to-Ethereum bridge is live, Centrifuge launches.

Hello Defiers! Here’s what’s going on in decentralized finance:

  • ETHGlobal’s DeFi-focused hackathon wrapped up over the weekend yielding over a 100 projects

  • RenVM launches Bitcoi-to-Ethereum bridge

  • Centrifuge wants to bring trillions of dollars in real world assets to DeFi

and more :)

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: Interview with the Winklevoss twins


🙌 Together with Eidoo, a cryptocurrency-powered debit card and platform for easy access to decentralized finance.


Developers Built More than 100 DeFi Apps in Past Month

by Cooper Turley

There was probably more innovation in DeFi this month than in traditional finance this decade.

Developers built more than 100 projects in ETHGlobal’s DeFi-focused hackathon in the past 30-days. From stablecoins, to automated investments, and fractional digital ownership, Ethereum builders pushed the envelope on what’s possible in open finance even further.

This is the first event of its kind for ETHGlobal, which has held over a dozen weekend-long, in-person hackathons for the past three years, but had never organized a month-long, virtual event, under a common theme. The goal is for developers to build an entirely new project within the span of the event, with the best projects winning prizes offered by sponsors. For HackMoney, there were $30k in prizes offered across leading projects like Compound, Uniswap and Aave.

We’ll touch on a few of submissions along with these projects’ wider implications on the DeFi landscape.

DeFiDollar

While Dai has taken the lead as DeFi’s defacto stablecoin, it should come as no surprise that it frequently varies from its peg. To this end, we’ve seen a number of solutions aiming to create the “perfect stablecoin” - i.e. one which is both stable and trustless with manageable collateralization ratios. 

DeFiDollar - a basket-backed stablecoin project - aims to do just that. By leveraging Aave’s interest earning aTokens and Balancer’s liquidity tools, DeFiDollar accepts existing stablecoins like Dai and sUSD to mint new Dtokens. To mint tokens, users lock collateral via Aave. The interest earned on the tokens are directed to an earnings pool which is used to supplement and stabilize the peg in the event DUSD collateral falls below their $1 pegs.

Zapper Pool Pipes

Zapper, a DeFi asset management dashboard that resulted from the merger of DeFiZap and DeFiSnap, unveiled Pool Pipes - a way for users to seamlessly transfer liquidity between various capital pools in the click of a button.

Pool Pipes are geared at solving liquidity fragmentation, ultimately creating channels to bridge capital between leading projects like Uniswap, Curve and Balancer. Best exemplified by Synthetix and their recent SNX incentive adjustments, Pool Pipes helps people migrate sETH Uniswap liquidity to sUSD Curve liquidity all in one transaction for a fraction of the cost.

What the Frac

Building off NFTs playing an ever-growing role in the Ethereum landscape comes a hack called What The Frac. As the name suggests, users can leverage the platform to create fractional claims on a given NFT - all of which are backed by DAI using a Balancer pool.

Auction creators commit to locking their NFTs in exchange for the right to create fractional shares. What The Frac allows creators to issue a fixed amount of “Fracs” which are claimable by those who contribute to the Balancer Pool. At the end of an auction, the winning bidder deposits Dai to the Balancer pool to unlock the NFT.

YieldHero

With the core premise of allowing users to redirect interest to open-source developers, YieldHero created a novel solution for users to swap to and from different Aave aTokens using an iEarn-like interface. By leveraging an Aave-specific Balancer pool, users can contribute and manage liquidity in a permissionless fashion, with top donors being signalled via a leaderboard for their Yield philanthropy.

While the idea of redirected interest is something we’ve seen before, the practice of using that interest to empower open-source development in a Gitcoin Grant-like fashion has some great implications. Plus, an easier tool to swap aTokens is a sure win for Aave!

Umbra

As a privacy preserving tool for stealth payments on Ethereum, Umbra allows any two parties to transact with one another without revealing their identity to the wider Ethereum network. Built with a simple password-based login system, users can generate ENS names to receive payments from a sender to a newly deployed stealth address.

The receiver then withdraws the payment from the stealth address, leveraging the Gas Station Network to use part of that withdrawal as the funds to cover the transaction fee. This means someone can get started and withdraw payment without having any ETH in their wallet, and withdraw across dozens of newly created stealth addresses all from one common end-point.

Wider Trends

Across all the HackMoney submissions, it seemed like Balancer pools were being used quite frequently for their ability to customize and compose different asset pools to meet specific liquidity needs. Redirecting interest was also a common theme, along with the general trend to capture arbitrage opportunities using flash loans and pool bridging.

Overall, it will be interesting to see if any new building blocks come out of HackMoney and it was pretty evident that giving teams 30 days to build resulted in far better products and submissions than what generally came out of the 48 hour sessions.

To learn more about HackMoney and the winning submissions, be sure to tune into the live stream which will showcase all submissions with a 3-minute Q&A session.


RenVM Launches as Bitcoin on Ethereum Surges

RenVM, which aims to allow interoperability between blockchains, launched on mainnet today. It’s the latest in a long list of projects which users hope will be able to trustlessly bridge Bitcoin and Ethereum.

There were almost 28 BTC deposited on RenVM after launch, according to btconethereum.com, in exchange for which Ethereum ERC20 tokens were issued. About 23 of those came from the Ren team to bootstrap liquidity. Ren’s launch is fueling a red-hot trend, as Bitcoin on Ethereum more than doubled in just the past two weeks.

Image source: btconethereum.com

“Anyone can now use real Bitcoin (BTC), Bitcoin Cash (BCH), and Zcash (ZEC) in your favorite DeFi application. This allows you to trade, lend, and leverage these assets as you would with any other ERC20,” Ren CEO Taiyang Zhang wrote in a Medium post.

A Trustless Alternative

There are now almost 5.2k BTC on Ethereum (~$47m), according to btconethereum.com, most of which are coming from wBTC, which relies on trusted third parties including BitGo. DeFi users have been hoping for a more decentralized alternative. Keep Network’s tBTC was one, but the project was paused after finding a bug. RenVM has been heralded as another viable, more trustless alternative.

RenVM can hold tokens from one blockchain and mint tokens of another chain in exchange. For example, Bitcoin holders who want to use Ethereum’s DeFi apps can deposit their BTC and get renBTC, an Ethereum token, in exchange at a 1:1 ratio. This ensures renBTC is always backed by the same amount of BTC. RenVM also supports Bitcoin Cash and Zcash.

A network of nodes, called Darknodes make up RenVM. Anyone with 100K REN can run a node, thought some technical skill is needed. Darknodes earn fees (in BTC, BCH, and ZEC) for powering RenVM. There were 44 Darknodes online after launch.

READ The Defiant’s Interview with Ren CTO Loong Wang


Centrifuge Wants to Bridge Real-World Assets to DeFi

Centrifuge launched Tuesday with the aim to feed DeFi with real-world assets such as invoices and mortgages, and to allow holders of these assets to borrow against them on the Ethereum network.

The system enables users to tokenize real-world assets in the form of non-fungible tokens (NFTs), which they can then use as collateral to take out loans. Meanwhile, investors can buy tokens representing this collateral and expect returns that are less correlated with cryptocurrencies than most or all other assets in DeFi.

Here’s how it works: NFTs representing real-world assets are pooled together. Next, two sets of ERC20 tokens are issued against them, TIN and DROP. TIN takes the risk of default first but also receives higher returns. DROP is protected against defaults by the TIN token and receives stable and usually lower returns. Investors can purchase TIN and DROP tokens with Dai or USDC. The user who put up the collateral takes the stablecoins used to buy TIN and DROP as a loan. TIN and DROP holders receive interest asset holders pay for their loan. 

Image source: centrifuge.io

Centrifuge has two parts: Centrifuge Chain and Tinlake. Centrifuge Chain is a proof-of-stake blockchain built with Parity Technologies’ Substrate framework, which is where assets are tokenized. It had 10 validators at launch. Tinlake is an open source Ethereum app which enables the creation of asset pools for users to borrow against and invest in. 

MakerDAO Collateral

Centrifuge submitted two MIP6 applications for MakerDAO to include asset pools as collateral for Dai. MakerDAO opened up Dai to different types of collateral to make sure there’s enough liquidity to back the stablecoin. It has already included trusted assets like USDC and wBCT as collateral, and tokenized real-world could very well come next. Factoring alone is expected to grow to a market of more than $2.8T by 2022, Business Wire data shows

Beyond adding liquidity to DeFi, tokenizing real-world assets could also be an opportunity for businesses, particularly small businesses or companies in developing nations with little access to credit. This system would allow them to access investors from all over the world, while give those DeFi investors exposure to real-world assets.

Post with assistance from Sebastian Aldasoro

Why Bitcoin might not survive a Bitcoin Standard: Hasu

“There is an implicit assumption in Bitcoin that users will pay more to use the base layer or its trustless extensions like the Lightning network. In practice, Bitcoin doesn’t just compete with fiat money or even other cryptocurrencies, but also with custodial Bitcoin banks,” researcher who goes by the name of Hasu writes in Deribit.

Ethereum Network Activity Reaches All Time High As Price Stalls: Ethereumprice

“Ethereum’s daily gas used; a metric that signifies demand for the Ethereum blockchain and one that hit a new all time high on May 23rd (…) This growth in gas used follows the issuance of stablecoins on Ethereum (to the tune of ~$4 billion) and the continued growth of decentralized financial applications that are seeing tens of thousands of transactions each day,” Ethereum Price’s Nick Cannon writes.

Data-packed thread by Spencer Noon on why he’s bullish on ETH.


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.

Click here to pay with DAI.There’s a limited amount of OG Memberships at 70 Dai per annual subscription ($100/yr normal price).

About the author: I’m Camila Russo, a financial journalist writing a book on Ethereum with Harper Collins. (Pre-order The Infinite Machine here). 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.

Recap: DeFi Week of May 18 🦄

Hello Defiers! Hope you’re having a good weekend! And a long one if you’re in the US, like me :)

Summing up the past week: Bitcoin holders are increasingly tokenizing their coins to use them on Ethereum. While the amount of wBTC surged by 5x in one day, tBTC had a false start and was paused shortly after launching because of a bug in the code. Rising gas fees continued to be a common gripe among Ethereum users. Lots of protocol upgrades and launches, with Uniswap releasing its long awaited V2, Argent including more DeFi integration, Gnosis releasing a desktop app and a way to interact directly with Ethereum smart contracts, and IdleFinance upgrading to give users more control over investments. This week’s interview was with the Winklevoss twins: The Defiant broke news that the Bitcoin billionaires are also Ethereum whales.

That was just one week. Subscribe to get the latest DeFi news and analysis straight to your inbox and you don’t miss a thing. Free-signups get partial content, paid subscribers (only $10/month, $100/year) get everything. Click here to pay with DAI ($70/year).

🐦Reminder to follow @DefiantNews on Twitter if you haven’t!

🧢And to get your Defiant swag!


🙌 Together with Eidoo, a cryptocurrency-powered debit card and platform for easy access to decentralized finance.


Interview

Winklevoss Twins Say Stablecoins Are Still Missing Their "Facebook Moment"

Tyler and Cameron Winklevoss, CEO and president of the Gemini exchange, respectively, sat to chat with The Defiant about everything from crypto in the pandemic, to Libra and stablecoins, to DeFi and their ETH holdings. They say the stablecoin race hasn’t really started yet and they’d rather see greater adoption when there’s finally a crypto app that breaks into the mainstream and needs a stablecoin for payments, than compete with coins inflating their balance sheets. The twins said it may very well be that Facebook’s stablecoin Libra will be the global, digital means of exchange, and if that’s the case, they’d be happy to welcome it on Gemini.

As for their ether holdings, the Winklevoss brothers, who have a book about them who are known “Bitcoin billionaires,” disclosed they have “a material amount” that’s “in the same galaxy” as their bitcoin holdings.

🎙Listen to this week’s podcast: Interview with the Winklevoss twins

Friday

Dives

  • Ethereum’s Popularity Problem: Fees are Surging: There’s a common gripe among Ethereum users these days —gas is too damn high. Transaction fees are surging as Tether continues to move to the second-largest blockchain network.

  • Bitcoin in DeFi Surges by 5X in One Day: It looks like bitcoin “hodlers” are getting tired of just holding. They’re increasingly locking up their coins in exchange for Ethereum tokens which can be used in DeFi.

  • Over Half of ZRX Holders Are Making Money After Rally: Almost 51% of all ZRX holders bought the token at over $0.36, so if all ZRX holders sold today, over half would make a profit, according to IntoTheBlock.

Bytes

Wednesday

Dives

  • dYdX’s BTC Perpetual Swaps are Mooning: DeFi traders are snatching up dYdX’s BTC derivatives, pushing the non-custodial trading platform to surpass Uniswap and become the leading decentralized exchange by trading volume. [update: dYdX has slid to 5th in trading volume, Uniswap back at 1st]

  • DXdao Fundraiser Just Surpassed $1 Million: DXdao, an organization which has no hierarchy and is communally owned by more than 600 Ethereum addresses, yesterday crossed the $1 million mark in a decentralized fundraiser.

Bytes

  • Idle Finance Upgrade Increases User Control Over Funds: Idle Finance, which automatically allocates user deposits across a number of lending protocols, has upgraded to give users more control over how their funds are invested.

  • Keep Releases Details on tBTC Deposit Pause: Keep Network released details of the bug which caused it to pause tBTC, an Ethereum token representing BTC deposits.

  • The Crypto Price-Innovation Cycle: a16z

Tuesday

Dives

  • Uniswap V2 to Boost Profitability for Traders and Protocol: Uniswap Exchange, the largest decentralized exchange by trading volume, was overhauled to improve profitability for liquidity providers, reduce price slippage for traders, limit attack vectors, and pave a path to sustainability.

  • Latest Bitcoin on Ethereum Project Was Cut Short: The team behind tBTC, an Ethereum token representing BTC deposits, paused the system after finding a bug. The project had gone live just two days earlier. 

Bytes

  • Argent Upgrades to Include Full Suite of DeFi Apps: Argent, a non-custodial Ethereum wallet, upgraded so that users can access at least seven DeFi apps from the non-custodial wallet.

  • Gnosis Wallet Users Can Now Directly Talk to Ethereum: Gnosis Safe Multisig, a non-custodial Ethereum wallet, launched an interface to allow users to directly interact with Ethereum smart contracts.


💜Community Love💜

Thanking all the amazing Defiers for the support and love this week (and always)!


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.

Click here to pay with DAI.There’s a limited amount of OG Memberships at 70 Dai per annual subscription ($100/yr normal price).

About the founder: I’m Camila Russo, a financial journalist writing a book on Ethereum with Harper Collins. (Pre-order The Infinite Machine here). 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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