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🦄 Recap: DeFi Week of June 14
Hello Defiers! This was a week heavy with torque, and some downright zaniness. In the markets we watched with mouths agape as Iron Finance went into freefall. The popular yield farmer, championed by the likes of Mark Cuban, had been boasting a TVL of $3B — yeah, you read that right — when suddenly, on Thursday, it crashed hard. Our yyctrader was there every step of the way chronicling the ape frenzy so read the report to get the blow-by-blow.
If that wasn’t enough, yyctrader also wrote about the bug that wreaked havoc on Alchemix Finance’s alETH contract on Wednesday morning. Users were able to withdraw collateralized funds without repaying their loans first…. Not a good situation. The Alchemix team rallied with an incident report, among other moves. Check out the full story to see what happened next, and what it means for alETH.
Dan Kahan, our resident sage on NFTs, filed a nice dive into the budding rivalry between Meebits and Bored Ape Yacht Club. The two platforms are taking very different approaches to showcasing and selling NFTs of avatars and characters, highlighting the rising tension between community-building and fortune-hunting in the digital art world. Meantime, Disney’s Fox Entertainment group is raising an eye-opening $100M fund to support blockchain and NFT projects. Whoa… You know things are getting crazy when the Hollywood suits show up.
There was also a flurry of activity with Curve. Our Owen Fernau has been tracking the CRV Wars and this week he plumbed the ins and outs of two new governance proposals that are shaking up the protocol. Intriguingly enough, very TradFi spectre of litigation is materializing as Curve looks to enforce its intellectual property rights. Owen’s story on Kwenta also spotlights an increasingly important trend in DeFi: Hot side projects are emerging, issuing their own tokens, and threatening to render the major protocols they’re running on (eg Uniswap, Yearn, Synthetix) little more than middleware. There were also newsy announcements from Goldfinch and InstaDapp.
Plus, dig into this week’s opinion piece on Algo Season 2.0 and the story of how an algo stable depegged in about 48 hours (written by yyctrader, who was everywhere this week!). And of course, we have out usual slate of must-see videos on Polygon, Mark Cuban’s wilde ride on Iron Finance. Last but not least, Camila Russo’s Podcast with Soona Amhaz of Volt Capital, who talks about how community provides an edge in investing.
So this weekend exhale, pour a glass of your favorite beverage, and unwind with a full slate of The Defiant’s stories and videos and podcasts. You’ll be so much smarter by Monday!
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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.
Kyber DMM (Dynamic Market Maker), a next-gen AMM designed to maximize the use of capital by enabling high capital efficiency and dynamic fees to optimize returns for liquidity providers.
In this week’s episode, I speak with Soona Amhaz of Volt Capital. Soona saw the value of crypto from very close when her family lost most of their savings after Lebanon’s currency crashed. She immediately told them to move their money to Bitcoin to protect themselves against further currency devaluation and currency controls.
She was working on a startup as an engineer while trying to learn about bitcoin and onboard others into the space, and she realized there was very little information about crypto. So she decided to start the newsletter called Token Daily. The newsletter went from being a network of information to a network of people thanks to live events.
That’s how she got to meet great teams building interesting projects in crypto and see their progress before anyone else did. When she saw big funds come in and invest in the projects she also knew had potential, she realized she had an edge and decided to start her own fund, Volt Capital.
This week’s guest opinion piece is a dispatch from Algo Season 2.0. Our intrepid correspondent reports on the wild rollout of the Malt Protocol over the weekend. This latest algorithmic stablecoin made quite a splash in the market, so much so that trouble ensued and the protocol couldn’t keep its head above water.
We’ll save the juicy details for the article itself but suffice it to say that algo stables are bucking their monikers with loads of drama. Kind of makes sense, though, with so much action moving into that quadrant amid the larger crypto selloff. Author yyctrader explains the design limitations on Malt that led to congestion on Polygon, and how a nice little gas war cranked up the torque on this latest algo stable. Great stuff…
Inbox Dump #13
For paid subscribers only — The Inbox Dump is where we include the updates and announcements that flood our DMs each week and didn’t make it to The Defiant’s content platforms. We also include a compilation of DeFi and crypto funding rounds in the past week so you have these in one handy place.
Iron Finance: the Biggest One-Day Implosion in DeFi History Explained In a month, Iron Finance has gone from being the darling of yield farmers to one of the biggest crashes in DeFi history. The partially collateralized stablecoin project expanded to the Polygon network on May 18 and quickly became the go-to protocol for earning insane yields –– it even received praise from Mark Cuban.
Meebits or Bored Apes? NFT Rivalry Pits Commerce vs CommunityRival fandoms abound in pop culture. Marvel vs DC Comics. Pokemon vs. Digimon. So it was only a matter of time before NFT artists and fans divided into two camps. Enter Bored Ape Yacht Club vs. Meebits, two projects that embody the contrasting creeds within the NFT movement, perhaps fated to become natural adversaries.
Curve Drama Intensifies as New Proposals Target alUSD and Saddle FinanceIn the wake of Alchemix’s troubled alETH release, Curve Finance has produced two governance proposals targeting tangential products of the automated loan repayment protocol. There’s also been a flurry of chatter about possible legal action as the dustup accelerates. The first target — Curve’s own alUSD pool. Charlie Watkins, project lead at Curve, proposed removing the alUSD gauge. This would mean that liquidity providers in the alUSD pool would no longer receive Curve’s CRV rewards, which spur liquidity provisions.
No Collateral, No Problem: Goldfinch Raises $11M to Bring Unsecured Loans to DeFiUnsecured loans, long a missing piece in the DeFi puzzle, may finally be coming to open finance. Goldfinch, a DeFi platform that specializes in making no-collateral loans, announced an $11M raise from the likes of Andreessen Horowitz, DeFi Alliance, and other investors.
InstaDapp Releases Governance Token with 55% for Community MembersDeFi infrastructure protocol InstaDapp has launched their governance token, INST, on Ethereum Mainnet. INST holders will be able to discuss and vote on all future InstaDapp protocol upgrades. InstaDapp has minted 100M INST, allocating 55% for community members and the other 45% for team members, investors, and advisors.
Fox’s NFT Play Signals Big Media Stampede into Blockchain ContentHere comes Hollywood. In the latest sign that global media groups are embracing NFTs, Disney’s Fox Entertainment is launching a $100M creator fund to produce new offerings on blockchain platforms and NFT-related content, the company announced this week.
Bug in Alchemix’s New ETH Vault is Allowing Borrowers To Withdraw Their CollateralA bug has just been discovered in the Alchemix Finance alETH contract. Alchemix Finance recently launched alETH, a synthetic yield derivative that lets DeFi users borrow 1 alETH for every 4 ETH pledged as collateral. The ETH collateral is deployed into Yearn vaults, and the resulting yield is used to automatically pay off the outstanding alETH debt over time.
Synthetix-Based Exchange Declares IndependenceKwenta, an exchange interface for Synthetix’s derivatives, has declared itself an “independent project operating outside of the Synthetix core contributors,” according to an announcement post.
The World Wide Web Is Now an NFTThe source code for the World Wide Web is being turned into an NFT. Created by World Wide Web inventor Sir Tim Berners-Lee, the NFT is composed of four elements: the time-stamped files containing the source code, a moving visualization of the code, a letter written by Berners-Lee reflecting on the code’s creation, and a digital poster of the full code created from the original files using Python.
Liquidations Whack SynthetixIn a sign of volatility in the blockchain-derivatives market, liquidations on the Synthetix platform skyrocketed to $19.4M, on June 11, a 30-fold jump from the next highest level on May 13, according to data from The Graph.
Alchemix Allows Users to Stay Long ETH With Auto-Loan RepaymentLast weekend, Alchemix, which offers automatically repaying loans, shipped a vault that accepts ETH. Alchemix users will now be able to borrow alETH, Alchemix's token that's soft-pegged to ETH, using ETH as collateral. The collateralization ratio: 400%. The launch came with a debt cap of 2,000 alETH and it was reached within a day of launch, according to the project’s founder, Scoopy Trooples.
Zapper Zaps Its Own Vulnerability Before Hackers DoTwenty days after upgrading its “Polygon Bridge” smart contract, Zapper found a vulnerability in its own deprecated version. According to a tweet, the Zapper project “exploited the vulnerability ourselves and all of the funds have been rescued.”
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 ($15/mo, $150/yr).