🦄 Recap: DeFi Week of April 17
Hello Defiers! Happy Weekend!
Ever since Ethereum ushered in decentralized finance there’s been a shadow of doubt about whether a new paradigm for the internet had truly arrived. Skeptics decried the volatility of cryptocurrencies, and the ultimate utility of these innovations in the marketplace. Crypto was likened to tulip mania and dismissed as a fad that would eventually evaporate like a summer heat wave. Even though it’s been seven years since Vitalik Buterin & Co. introduced the Ethereum network, not a quarter goes by when the doubters argue this is it: the so-called world computer is doomed to fail.
Well, this was a week when our reporting showed a lot of those doubts were addressed. We saw cryptocurrencies outperforming tech stocks such as Netflix, and, gasp, exhibiting less volatility, as Sam Haig reported. We saw Coinbase introduce its beta version of an NFT marketplace in yet another vote of confidence for an app that’s captured the imagination of consumers. That piece was reported by the newest addition to our staff, Jason Levin. He also reported on MakerDAO’s push into multichains. Welcome Jason!
In our weekly podcast, venture capitalist Jill Gunter told Camila Russo how crypto is taking root in emerging markets such as Latin America and providing an answer to the financial control over people’s livelihoods. And in a special report, IOSG Ventures provided a deep dive on how rollups have the power to write a new chapter for DeFi and the financial system writ large.
It’s true, for all the progress, we need to ask hard questions about the evolution of DeFi and crypto. To that end, Bailey Reutzel wrote a must-read essay on her takeaway from Bitcoin 2022 and asked the most fundamental question of them all: What is this all for? Likewise, Robin Schmidt and his crew produced an excellent segment on the ethics of the metaverse.
Yet we couldn’t help but feel the mojo in DeFi is building when Scott Free Productions, the outfit led by legendary director Ridley Scott, inked a deal to make The Infinite Machine movie based on the book of the same name by our chiefess, Camila Russo. Wow. To have the story of Ethereum produced by the same filmmaker who gave us Blade Runner and Alien? Oh yeah… That works. And as Jill Gunter tweeted, “Storytelling in the mainstream is how you onboard the nest 100 million crypto users.”
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🎙 Jill Gunter Talks Crypto's Role in Emerging Markets and Building Scaling Solution Espresso Systems
Jill Gunter is the co-founder and chief strategy officer at scaling solution Espresso Systems and a venture partner at Slow Ventures. She became interested in Bitcoin via her experience with Latin American markets — which is somewhat of a pattern in the space. She was a debt trader at Goldman Sachs, focusing on Argentina and Venezuelan bonds, and saw crypto’s potential to help those in corrupt or repressive regimes. She continued exploring how crypto can help skirt currency controls and enable more global and efficient markets, and we discuss how those themes are playing out right now in the war in Ukraine.
We talk about how Jill went from Wall Street to crypto, and from VC to founder. Her latest venture is Espresso Systems, which aims to bring scalability and privacy to web3. She explains how this scaling solution works and how it’s different from others in the space. Finally, we chat about what the potential unforeseen consequences of crypto might be, and whether we might be seeing glimpses of that with CBDCs. Jill is optimistic central bank digital currencies won’t lead to the dystopia feared by some in crypto.
📺 Real Vision vs. The Defiant: CAN COINBASE CHANGE THE NFT GAME?
📺 The Open Metaverse Show: Is there any place for ethics in the Metaverse?
📺 Hot Stuff: Red Hot DeFi Opportunity | 67% APY on Mars Protocol
📺 Tuesday Tutorial: Beginners guide to crypto in 2022
😳 Black Pilled at Bitcoin 2022: Do We Know What All This Is For?
Soul Searching Amid the Glitz and Glamour
In which Bailey Reutzel wanders the wilderness of excess at Bitcoin 2022 and comes back with some hard truths…
As I’m watching men struggle on the mechanical bull (thinking, shouldn’t they only be using one hand?) at Bitcoin 2022 in Miami last week, a thought from the deep recesses of my mind emerges: What is all this for? A documentarian who has been patiently listening to another one of my cynical rants echoes my thoughts and asks: “So why are you still here?”
And I have to admit that, well, I haven’t really thought about that in awhile. And then I also have to admit, that the reason why I haven’t been thinking about whether all this aligns with my principles and goals, is probably that, well, the money’s good here.
Blink. Blink. Blink. Ohhhhh shiiiiit. Am I a grifter?!
Let’s get a few things out of the way: This piece really isn’t about chiding Bitcoin Magazine’s conference (like I did last year). All that BS still remains, but it has taken a bit of a backseat. It isn’t about that ugly-ass eunuch bull or the confusion of telling your attendees to never sell while also hurraying innovations meant to make bitcoin the payment method for your morning coffee or evening beer. This isn’t about any of the actual content.
🏛 Forcing Utility On The SEC
Guest writer Carla Carriveau makes a forceful case for why the SEC needs to adapt to the new realities of crypto.
The U.S. Securities and Exchange Commission under Chair Gensler is a rigid challenger of the crypto industry in its aggressive application of an age-old regime to digital assets.
Even without the 97 enforcement actions and billions in imposed penalties, the SEC has effectively impaired the industry from advancing digital innovation and technology by stalling approval of broker-dealers, denying ETFs, and thwarting lending programs. The SEC’s inflexible approach is now being tested by President Biden and Congressional members, and for the first time in years, I am cautiously optimistic for the future of crypto and digital assets in the US.
At this point, we’re all accustomed to the SEC’s analysis of digital assets under the Howey test, the rather inapt 1946 Supreme Court case that has lawyers telling clients that their token should be like an orange.
Despite the four prongs of the test itself and the many, many factors the SEC staff put out to analyze those prongs, at its core, this test broadly speaking turns on whether or not a digital asset has use or utility outside of speculation (i.e., an orange grove you buy so you can eat the oranges versus an orange grove you buy for the hope of profits).
⚙️ IOSG Report: A New Financial System Will Be Built on Rollups
A Deep Dive Into What Comes Next for DeFi
Momir Amidzic delves deep into the promising future of DeFi with a definitive analysis of rollups.
After five years of expansion, the DeFi market is largely consolidating around the winners in each sector.
With the lack of new primitives, multichain DeFi became the main narrative with most chains replicating the Ethereum DeFi map.
While the multichain narrative combined with saturated Ethereum led to increased activity on other chains, large capital holders have shown a strong preference for safety. The largest Ethereum protocol Curve.fi alone still has more TVL than the aggregated TVL of all the apps built on top of Avalanche and Solana
On the other hand, more scalable chains led to the inclusion of user groups priced out of Ethereum. However, the contribution of such users to the general on-chain activity is rather marginal.
Nevertheless, it is clear that none of the monolithic blockchains in their current forms are able to support the global adoption of DeFi.
In the long term, we expect most applications to be built on top of rollups which are the only solutions that could eventually support billions of users in an economically sustainable way without sacrificing fundamental principles such as decentralization, censorship resistance, security, and trustlessness.
TRON’s Sun Vows to Rock Stablecoin Market With his Own $10B Play Justin Sun, the provocative founder of TRON with a taste for drama, is at it again.
OlympusDAO Strives to Revive with ‘Inverse Bonds’ Offering It may not be quite a Hail Mary, but the OlympusDAO community is voting on whether to deploy the project’s Protocol-Owned Liquidity for its new Inverse Bonds product.
DEX Volume Plunges 50% Since November In a sign that Automated Market Makers may be falling out of fashion, activity on decentralized exchanges has plummeted by roughly half since November, according to data from Token Terminal.
Makers of Alien, Gladiator and Blade Runner to Produce The Infinite Machine Movie Makers of Alien, Gladiator and Blade Runner to Produce The Infinite Machine Movie
Don’t Look Now But Cryptocurrencies Are Outperforming Tech Stocks Cryptocurrencies may not be the most volatile asset class of 2022 after all.
Scott Free Boards Feature Adaptation Of Camila Russo’s ‘Infinite Machine’: Deadline Hollywood
a16z Crypto is launching an academic research lab focused on web3: The Block
Anti-corporate in all we do Where businesses are machines, DAOs are organisms with a thousand interwoven minds: Yearn Finance
@stefan_contiero is bringing @MacTuitui @shvembldr @Hanrgb and @nicolasdnl to the Venice Biennale - stop by @dartpavilion to check it out!: Art Blocks
Aave V3 Depositors Can Pocket Avalanche Token Rewards Token rewards for in-app deposits are in a state of flux. DeFi 2.0 was expected to provide an alternative for paying out tokens in exchange for deposits. Compound Finance may cut rewards. In other parts of DeFi, the money is still flowing.
Lido’s Share in Ethereum Staking Hits 90% as The Merge Approaches Lido’s dominance over Ethereum staking continues to grow. According to data from Dune Analytics, Lido, a liquid staking provider, is the single-largest Ethereum staking service with almost 29% of all Ether staked on the Eth2 Beacon Chain.
Coinbase Launches NFT Marketplace Beta Crypto exchange Coinbase has opened the beta version of its NFT marketplace to a waitlist of 3 million users. Launched on Apr. 20, Coinbase’s NFT platform has already been likened to a web3 Instagram as users can make profiles, follow accounts, browse a “For You” feed, and comment on NFTs.
Binance embarrassed after unveiling swastika-like emoji on Hitler’s birthday: CoinTelegraph
Near-Based DeFi Protocol Bastion to Launch BSTN Token at a $180M Valuation: CoinDesk
FIP-55: Shifting resources away from the Convex AMO: Mechanism Capital
Aave Grants is excited to be sponsoring #HackMoney2022: Aave Grants DAO
v2 time! Due to a bunch of new v2 pools being accepted into fee conversion process by the DAO, earnings this week will be slightly elevated: Curve Finance
Index Coop’s New NFT Index Fund Includes Blue Chips Like CryptoPunks and Bored Apes When day traders grew tired of sleepless nights day trading Tesla stock, they turned to index funds: passive investment vehicles that exposed them to huge swathes of the market at once.
Ethereum Foundation Reveals 80% of Treasury Holdings Are ETH The Ethereum Foundation, few would be surprised to learn, is bullish on ETH. The non-profit disclosed yesterday that it holds 80% of its $1.61B treasury fund in the blockchain’s native currency.
Yearn Creator Andre Cronje Slams Crypto Culture, Pivots to ‘Regulated Crypto’ Andre Cronje, the DeFi developer behind Yearn Finance and several other unregulated financial protocols, has voiced his disdain for crypto’s culture of egotism and greed, and remodeled himself as a pioneer of regulated crypto.
Moonbirds Shatter OpenSea Records With $240M Traded In Four Days Trading volume on NFT marketplace OpenSea hasn’t been this high since January. That’s thanks to Moonbirds, a collection of 10,000 owl avatars that launched on Apr. 16.
Blockchain-based Games Raised $2.5 Billion in Q1 2022: Crypto Potato
MakerDAO to integrate StarkNet to cut DAI transaction costs: The Block
First Australian Spot Bitcoin, Ether ETFs to Go Live Next Week: Blockworks
Bitcoin Outflows From Crypto Funds Top $73 Million Amid 'Hawkish' Fed Policy: Decrypt
Why Compound Might Ditch its Yield Farmers In the summer of 2020, Ethereum lending protocol Compound worked out that if you give away free governance tokens for borrowing and lending crypto, people will flock to your platform and pump the value of your new token.
Ethereum Mixer Blocks North Korean Hacker Group Behind $600M Axie Infinity Heist Tornado Cash has banned Lazarus, the North Korean hacking group the FBI says is behind last month’s $600 million hack on Axie Infinity’s Ronin bridge, from using its Ethereum mixing service.
Ethereum Foundation, AMD, Polkadot Launch $7M Competition to Boost Zero-Knowledge Scaling Leading crypto projects have banded together to offer $7M in prizes to teams innovating using zero-knowledge (ZK) proofs, a privacy-preserving scaling technology for blockchain transactions.
Indian crypto exchange CoinDCX tops $2 billion valuation in new $135 million funding: TechCrunch
Republican lawmakers accuse SEC of restricting crypto exchanges in recent rulemakings: The Block
U.S. Government Issues Alert on Malicious North Korean Crypto Activity: Decrypt
Hackers steal $655K after picking MetaMask seed from iCloud backup: Bleeping Computer
Terra’s LUNA Surges 17% as UST Becomes Third Largest Stablecoin: CoinDesk
Thanking all the amazing Defiers for the support and love this week (and always)!
🧑💻 ✍️ Stories in The Defiant are written by Owen Fernau, Samuel Haig 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.
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.