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🚉 Arbitrum Launches with Full DeFi Ecosystem Locked and Loaded
Hello Defiers! Here’s what we are covering today,
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Balancer, one of the leading DeFi automated market makers (AMM) for multiple tokens. Dive into their pools at
Kraken, consistently rated the best and most secure cryptocurrency exchange, which can get you from fiat to DeFi
Aave, an open-source and non-custodial liquidity protocol where users can earn interest on deposits and borrow assets.
The DeFi Pulse Index, by Index Coop - DPI is the easiest way to capture the upside of DeFi with the benefit of diversification. Buy DPI today on your favorite DEX.
Layer 2 Players
TLDR Arbitrum, one of the most awaited Ethereum scaling solutions, has attracted $2.9M on its first day after launch, becoming the 11th largest so-called Layer 2 platform, according to L2BEAT.
FEES Offchain Labs, a blockchain software maker, launched Arbitrum on Aug. 31 with the promise to offer lower fees and faster transactions. So far, it’s delivering: ETH transfers on Arbitrum were going for less than $1, compared with a median cost of almost $11 on Ethereum, according to a Dune Analytics dashboard. That compares with fees of $0.000926 on Polygon, the most popular Ethereum scaling solution, which has $5.29B in assets locked. Worth noting is that Arbitrum is throttling its usage to match Ethereum’s — as Offchain Labs lifts the cap, fees should continue to decrease.
TRADES Simple trades on Uniswap’s Arbitrum deployment are going for under $5 on the day of the launch, according to the Layer 2’s block explorer Arbiscan. That’s roughly ten times cheaper than Uniswap trades on Ethereum’s Layer 1 chain — $81 and change, according to a dashboard by Dune Analytics.
NEWS Fantom’s liquidity mining program is once more showcasing the power incentives can have in markets as total value locked in the smart contract chain’s DeFi projects has nearly doubled in the three days since offering token rewards. TVL on Fantom soared by 80% to $990M from $547M on Aug. 29, the day before the liquidity mining program started, and two projects are largely responsible for the increase. Curve represents 24% of assets locked with $235M, while SpookySwap holds 22% with $220M.
PROJECTS The Fantom Foundation on Aug. 30 announced that it would distribute 370 million Fanton tokens (FTM) — or $346M — to DeFi projects that maintain more than $5M in TVL.
LIQUIDITY Then, it announced this higher tier to entice projects to go big. Early Sept. 1 the Foundation put out a special challenge to developers building decentralized finance (DeFi) applications on its proof-of-stake blockchain: attract more than $200 million in total value locked (TVL) on Fantom and receive 12 million FTM, distributed over a year to the project’s liquidity providers.
In this latest addition to The Defiant’s DeFi 101 curricula, Brian Huang walks us through one of the most important projects in the space — leveraged yield farming. Put on your thinking caps!
CHASING HIGHER YIELDS In DeFi, while it’s not necessarily true that bigger is always better, the beauty of a high APY never fails to turn heads. And regardless of how much higher DeFi yields are compared to traditional finance, there’s no shortage of DeFi users eager to maximize their profits, chasing higher yields from platform to platform and network to network. Therefore, it’s no surprise that leveraged yield farming, with its superior capital efficiency to alternative DeFi products, has become a popular choice for experienced DeFi participants to maximize their yields.
BORROWED FUNDS The concept behind leveraged yield farming isn’t as complicated as it might seem at first mention; If yield farming with X yields you Y returns, then yield farming with 5X yields you 5Y returns. In other words, borrowing funds to ramp up your position X, aka using leverage, multiplies your yields. Of course, it’s not for free; Like any lending platform, you have to pay borrowing interest for the privilege to use borrowed funds. Yet, where leveraged yield farming shines is in its capital efficiency–the ability to borrow more than you put up as collateral.
Software engineering culture has always leaned toward anti-authoritarianism. Many an engineer’s childhood reading list was full of books like Snow Crash and Neuromancer about lone hackers fighting back against enormous corporations, and the mythos of the underdog startup founder is practically a local religion in Silicon Valley.
Binance’s affiliate United States-based cryptocurrency exchange Binance US is targeting an initial public offering (IPO) in 2024, according to Binance CEO and founder Changpeng Zhao.
The Securities and Exchange Commission announced today that it has filed an action against BitConnect, an online crypto lending platform, its founder Satish Kumbhani, and its top U.S. promoter and his affiliated company, alleging that they defrauded retail investors out of $2 billion through a global fraudulent and unregistered offering of investments into a program involving digital assets.
Today’s the day! We’ve opened up Arbitrum One for everyone and couldn’t be more excited to welcome you in! Today’s the culmination of years of work, but in many ways it’s just the beginning. Our vision of scaling Ethereum has been years in the making, but it’s today that we first get the opportunity to bring much-needed gas relief to the incredible Ethereum community.
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🧑💻 ✍️ Stories in this newsletter were written by Brady Dale, YYCtrader, and edited by Bailey Reutzel and Edward Robinson. Videos were produced by Robin Schmidt and Alp Gasimov. Podcast was led by Camila, edited by Alp.
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