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🦄 Recap: DeFi Week of Dec. 11
Hello Defiers! Don’t let the choppy market spoil the weekend. Yes, ETH and other DeFi names were down again this week and the last 30 days have been a bit of a bummer. It certainly didn’t help when Sen. Elizabeth Warren unloaded on DeFi and stablecoins in particular at a hearing on Capitol Hill. Regulatory risk is the last thing investors want to see as they try and shake off the selloff.
But simmering underneath all that angst was some truly fascinating stuff. To wit, check out Owen Fernau’s feature on DeFi Kingdoms, which is challenging Axie Infinity’s position in GameFi with a novel NFT play. And Brady Dale reported on how the floor price for NFTs from the Forgotten Runes Wizard Cult nearly doubled last week.
Brady also penned a fascinating story on how Kickstarter’s hookup with Celo might lead to the introduction of a token for the crowdfunding pioneer. No one else twigged onto that possibility and it’s the type of insightful journalism we love at The Defiant! As is our weekly market action report by Sam Haig, published every Monday. In the latest edition, Sam unpacked how Terra had emerged as a DeFi bright spot in the selloff.
With DAOs picking up more momentum as a story to watch in 2022, be sure to read our exclusive report by lawyers Jacqueline Radebough and Yev Muchnik on how Colorado law may provide the answer for legal registration. Not an unimportant issue. In the same vein, Mason Marcabello delivered a master class in DeFi 101 with his ultimate guide on decentralized finance.
Meantime, Robin Schmidt and his crew produced a handy tutorial on how to turn NFTs into cash without selling them, and a review of the NFT space in 2021. Be sure not to miss the latest edition of Real Vision v. The Defiant — it focuses on the threats to unbank crypto and copyright concerns.
Also this week, we opened our Discord server to our entire community, while leaving some channels for paid subscribers only — come join us!
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📬 Inbox Dump #36
Hello Defiers! Welcome to Inbox Dump where we include the updates and announcements that flood our DMs each week and didn’t make it to The Defiant’s content platforms. Sometimes announcements here didn’t meet the bar to become a news story, sometimes they may have slipped through the cracks, or they came late and we haven’t had a chance to cover.
At The Defiant we cover the most important DeFi-related news and developments but we know many of you are hunting for projects before they are fully developed and before they are newsworthy. Our goal with this installment of the newsletter is to help you find them. Look at this as the starting point to DYOR.
We also include a compilation of DeFi and crypto funding rounds in the past week so you have these in one handy place.
Keep in mind these have been unedited. With that —here we go!
[This post is exclusive to subscribers]
📺 Quick Take: Big voices demand to be heard. Some should stay quiet? w/ Do Kwon, Michael Saylor, Brian Brooks
In this research piece, lawyers Jacqueline Radebough and Yev Muchnik provide a lucid and invaluable look at how DAOs can overcome one of their thorniest challenges — establishing a legal structure that protects members from liability and preserves the values of cooperation at the heart of their models.
Self-governing entities like Decentralized Autonomous Organizations (DAOs) are unique and largely incompatible with traditional U.S. legal entities.
Absent the adoption of a new legal entity structure that serves the novel needs of DAOs, we discuss why we believe, at present, the Limited Cooperative Association (LCA) provides the most ideologically aligned legal framework for DAOs.
The LCA integrates cooperative principles and values that are similar to core DAO principles and provides a legal framework for DAOs seeking to wrap a portion or all of their related activities in a legal structure.
I. Evolution of the Corporate Form
The corporation is one of the most significant inventions in history. Corporations allow people to create entities legally distinct from themselves, while giving those entities similar rights attributed to natural persons, including the ability to own assets, pay taxes, enter into contracts, and have legal standing independently of their owners.
Cooperatives, as a form of corporation, have been part of the U.S. economic landscape since the 1700s, but modern cooperative organizations began to flourish in the 19th century. Cooperatives have been created across all business sectors, from producers to consumers, workers to multi-stakeholders and multi-sector coops, and are now present in the digital realm in the form of “Platform Cooperatives,” like Stocksy United, Savvy Cooperative and Fairbnb.coop.
In this exclusive new primer, Mason Marcabello elucidates the state of the art in DeFi and walks us through how it works. Newbies and veterans alike will find a lot to value in this treatise.
Throughout history, money is often moulded to benefit autocratic regimes. But in light of recurrent issues like debasement and rising inflation – alternatives such as decentralized finance, or DeFi, have emerged as an effort to re-establish sovereignty and power to the everyday person.
In short: DeFi is a global, open alternative to the current financial system. It differs through products and services built on open-source technology that anyone can use to borrow, save, invest, trade with and more.
One of the core components of DeFi is known as algocratic or algorithmic governance. In contrast to bureaucracies that rely on established social hierarchies to regulate and enforce law, autocratic governance is when rules and regulations are written into the software (code). In essence, its structure ensures that smart contracts function as intermediaries so that buyers, sellers, lenders, and borrowers may interact peer to peer without the need for centralized entities or institutions to mediate these very transactions.
ADOPTION Although decentralized finance is still in its nascent stages, the total value locked (TVL) in DeFi contracts is more than $200 billion as of November 2021. Ethereum commands more than 60% of the TVL , according to data from DeFi Llama. Although this data may appear significant, it is still notional as many DeFi tokens lack sufficient adoption, liquidity, and volume to trade in the web3 marketplace.
In this guest column, Hisham Khan urges the DeFi community to take more care in designing platforms and apps so they are accessible to the people who truly need them.
DeFi’s purpose is to create greater financial inclusion. That’s the core mission, to lower the barriers of access to wealth generation so anyone with the internet can participate.
How do we get a mother in Mozambique to be empowered and participate? She’s not looking to day trade and purchase a Lamborghini. She might be looking to seek passive income so she can afford to pay bills or put her children through school.
For her, the DeFi user experience needs to be easily accessible, and easily understandable. She should be able to access it from her phone via a simple app, and be aware of the different options available to her.
But so far, it is those with the time and resources to understand and access the underlying technology and new financial tools who are reaping the benefits. This is a serious problem.
CryptoPunks and Bored Apes Rule New Index Fund for NFT Blue Chips In the latest sign that NFTs are rapidly morphing into a new type of security, an index fund has hit the market, and CryptoPunks and Bored Apes are firmly in charge.
Liquidity Providers Hold the Line in DeFi Selloff The crypto market is down, but liquidity providers in decentralized finance are staying in regardless — some are even upping their positions. “We’re hodling and investing more into new DeFi stuff,” Matti, of the reflexivity-oriented VC firm Zee Prime Capital told The Defiant over Telegram.
Video Game News Pushes Forgotten Runes NFT Floor Up 88% The floor price for NFTs from the Forgotten Runes Wizard Cult has nearly doubled since Tuesday on the news that it’s got a new game coming out to make use of its Wizards.
Polygon’s Surprise Code Change Triggers Questions and Controversy In web3, there aren’t many words more fought over than “decentralization.” So if someone calls a blockchain’s decentralization into question, it’s going to draw a crowd.
Index Coop Makes 2X ETH Leverage Token Cheaper with Move to Polygon Index Coop, a decentralized index token provider, has launched its 2x leveraged Ether index token (ETH2x-FLI-P) on the Polygon network. These tokens allow users to access leverage while mitigating liquidation risks by holding the token in their Ethereum wallets.
Balancer Launches Boosted Pools to Generate More Yield on Liquidity Deposits DeFi is trending towards capital efficiency as protocols look to maximize users’ bang for their smart contract controlled-buck. Balancer, an automated market maker (AMM), is trying to take advantage of the trend with the launch on Dec, 15 of a protocol called Boosted Pools. It allows unused liquidity to earn yield in Aave, the DeFi lending protocol.
Warren Calls for Clampdown on DeFi and Stablecoins ‘Before It is Too Late’ Scammers, cheats and swindlers. That’s how Sen. Elizabeth Warren (D-Mass.) described the denizens of DeFi in an anxiously anticipated U.S. Senate hearing on stablecoins on Dec. 15. She said stablecoins must be regulated to safeguard the financial system.
Avalanche Accelerates AVAX Adoption with BitGo Deal Avalanche may have started as a favorite of DeFi enthusiasts. Now financial institutions are poised to hop aboard. On Thursday, BitGo, a crypto platform that caters to Wall Street, said it would support Avalanche’s token, AVAX, and assets launched natively on its C-chain, the company said in the statement.
Aave Latest DeFi Protocol to Delay Open Source and Lock Down V3 Code Is the open-source era in DeFi ending? Aave, one of the top decentralized finance (DeFi) money market protocols, looks set to upgrade to version 3 under a business license that restricts use of their code for something like a year, according to a poll of AAVE holders that closed on Dec. 13.
DeFi Kingdoms Challenges Axie Infinity’s GameFi Supremacy with NFT Play Questioning the utility of NFTs as simple collectables may be missing the point. DeFi Kingdom, an entrant to the blossoming GameFi sector, is expanding the definition of NFTs by offering its version of the tokens, called Heroes.
Questions Swirl as Solana Loses a Fifth of its Value in Seven Days The carnage has been widespread in this latest selloff. Yet no major DeFi name has tumbled as much as Solana, the would-be challenger to Ethereum.
CloneX NFT Prices Spike on Nike’s Acquisition of Studio RTFKT Nike, Inc. has made a running start into the metaverse. On Dec. 13, the sporting goods behemoth announced that it has acquired RTFKT, an NFT studio that blurs the lines between the digital and physical through virtual sneakers and collectibles like one of a kind sneakers.
Layer 2 Optimism to Remove Whitelist and Open Floodgates to Devs Optimism, the Ethereum Foundation-backed Layer 2 optimistic rollup network, will remove its whitelist “very soon,” opening the floodgates to developers working with Ethereum Virtual Machine (EVM).
Market Action: Terra a Bright Spot in Worst Slump Since October Peak The crypto market is still in the doldrums. That’s the upshot of the last seven days. The combined capitalization of the DeFi sector slid to its lowest level since all-time highs in early October.
Kickstarter’s Embrace of Celo Blockchain May Lead to Token for Crowdfunding Giant Are governance tokens a public market by another name? Kickstarter, the crowdfunding leader, announced on Dec. 8 that it would begin work on a decentralized crowdfunding platform on the mobile-friendly Celo blockchain.
Thanking all the amazing Defiers for the support and love this week (and always)!
🧑💻 ✍️ Stories in The Defiant are written by Brady Dale, Owen Fernau, Sanuel Haig, Bailey Reutzel, and yyctrader, and edited by Edward Robinson, yyctrader, Bailey Reutzel, 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.