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🦄 Recap: DeFi Week of Jan. 25
Hello Defiers! Hope you’re having a great weekend.
Summing up: Of course the main news this week was that a community of online traders was able to band together and bring down hedge funds —and just as they were winning, centralized entities were able to stop the game. We covered how, while Wall Street Bets wants to beat Wall Street at its own game, DeFi wants to build an entirely new financial system, where nobody has an off switch. What happened this week shows that it’s only a matter of time the internet of money will rule finance: it’s simply better.
Scaling was also a major theme this week, and that’s a good thing because for Ethereum to actually be the network underlying the future of finance (or at least one of them), it will need to process more than 14 transactions per second. Aave’s aTokens are now on Matic, Synthetix introduced staking on Optimism and Loopring’s mobile app hit the Google Play store. We covered this in the newsletter and also in our Defiant Weekly and Tuesday Tutorial videos.
Erik Voorhees talked about how ShapeShift is leaning into DeFi in the podcast, while Blake West of Goldfinch wrote an op-ed on why decentralized governance is currently broken.
And there was more! There’s a lot going on, but we’ve got you covered :)
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✊ Crypto Devs Are "Building a Life Raft For The World After Fiat Falls Apart:" Erik Voorhees
In this week’s episode, I speak with Erik Voorhees, long-time crypto advocate and founder and CEO of ShapeShift. In this interview, he talks about how he was able to stop gathering information about his customers and take the exchange back to its roots, by leaning into DeFi. His plan is to create a platform that connects with all of the different DeFi applications, starting with decentralized exchanges.
Voorhees holds probably the most extreme view of anyone who has come on this podcast. He thinks we will see the collapse of the US dollar within our lifetime. He argues the level of US debt and continuous erosion of the currency is untenable. When this happens an entire financial ecosystem built on open, immutable blockchains will be the solution. He believes today’s developers aren’t just building a product for their customers. They’re building a life raft for the world after fiat falls apart.
The goal is that in a Web3 future, individuals will have ownership and participation in the platforms they use, in the same way that they are in control of their assets and information. Projects have tried to solve this by creating token-based voting mechanisms, where holders can cast token-weighted votes. The mechanism has been hailed as something akin to token democracy. Blake West, co-founder of Goldfinch, argues why that’s not true. He says the current system isn’t a democracy; it’s a plutocracy. And while that’s become an increasingly common criticism in DeFi, West’s response is more practical: He has come up with actual formulas to measure a protocol’s level of decentralization, and also its level of governance liability.
This piece by Defiant writer Daniel Kahan offers a peek into the minds of the many millennials and Gen-Z traders who bought AMC and GME stock last week inspired by the chance to join a movement against the powerful investors who have controlled finance for too long — and then were stopped in their tracks when Robinhood decided to limit trading.
WSB Wants to Tear Down the Old Financial System; DeFi Wants to Build a New One: The WSB saga has been a fascinating black box for anyone interested in finance (or wealth redistribution, or sticking it to the man), and it centers around an anti-institutional ethos that has many parallels to DeFi. The DeFi community might even be able to take a lesson or two from the memelords at WSB —and vice versa.
Reddit Doubles Down on Web3 With EF Partnership: Reddit announced a partnership with the Ethereum Foundation, a sign it’s betting on a more decentralized internet and doubling down on the leading smart contract platform.
Zora Releases Developer Tools to Build “Cryptomedia”: Zora Protocol has unveiled documentation around its universal media protocol, offering developer tools to create perpetual markets for NFTs by baking an order book directly into the token
Ethereum Transactions Rise as Price Trends in ATH Territory: Transactions on the Ethereum network continue to outpace Bitcoin’s as momentum for decentralized finance protocols snowballs. ETH is testing all-time highs, but has yet to double in price from its record, like BTC did.
Maker Proposal Seeks to Boost DeFi Fixed-Rate Loans: Fixed-rate lending has been slow to take off in DeFi. That’s what one of the latest MakerDAO proposals is seeking to change.
New Lending Protocol Alpha Homora Quickly Catches Up: Alpha Homora is one of the latest DeFi lending protocols. Its token and TVL are soaring, with ALPHA climbing to join the top 100 coins by market cap, while it has attracted $600M of assets in just four months.
Binance Launches High-Yield CRV Staking Option: Binance is offering a new high-yield staking option for CRV holders. Locked CRV staking will be offered on a first-come, first-served basis, and is available for 15, 30, and 60- day durations. Lenders can stake anywhere from one to 5,000 CRV, and earn up to 13.42% APY for a 60-day locked stake.
DeFi Outperforms Amid Crypto Bull Market: As Ethereum pushed past an all-time, DeFi too, broke away. DeFi tokens make up four of the top 10 gainers over the last seven days, and 10 of the top 25.
FlamingoDAO On Why it Paid $760k for Pixelated Jpeg: CryptoPunk 2890, one of nine legendary Alien Punks —the single-rarest kind of Punk out there, was sold for 605 ETH, or ~$760k USD. It’s the first time an Alien Punk has been put up for sale since 2017.
BadgerDAO Airdropped Bitcoin-Pegged Token Digg: BadgerDAO distributed 600 Digg to over 7,898 addresses, which were airdropped tokens based on a snapshot of the user’s engagement with the protocol.
Kyber Overhauled its Protocol and Token Holders Love It: Kyber’s KNC jumped 25% on Thursday to the highest since 2018 after it announced its upgrade, compared with ETH’s 10% increase. The move signals traders are betting Kyber earn more market share and push more value to its token.
dYdX Closes Series B with $10M Investment: dYdX closed its Series B round with an investment of $10M led by Three Arrows Capital and DeFiance Capital. Other investors include Wintermute, Hashed, GSR, SCP, Scalar Capital, Spartan Group, and RockTree Capital.
🧑💻 ✍️ Stories this week were written by Owen Fernau, Daniel Kahan, Cooper Turley, Syndey Lai and Christopher Attard, and edited by Camila Russo. Videos were produced by Robin Schmidt and Alp Gasimov. Podcast was led by Camila and edited by Alp.
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, 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 ($10/mo, $100/yr).