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🦄 Recap: DeFi Week of June 6
Hello Defiers! Another whirlwind week is done and dusted as we head toward the Summer Solstice in the Northern Hemisphere, and its wintry counterpart in the South. With crypto process relatively, ahem, stable there was ample time to explore a number of breaking stories on the DeFi front.
Where else to begin but El Salvador — the first country in the world to adopt Bitcoin as an official currency. Wow. The news triggered a wave of reactions ranging from unbridled enthusiasm and lots of activated laser eyes in Latin America to more sober questions about the challenges to come, and whether the small nation maybe should have picked a stablecoin instead. Dan Kahan explored the Salvadoran breakthrough in two pieces this week with his usual incisive analysis. And check out our podcast with crypto veteran Mariano Conti, who discusses the significance of the news.
Meanwhile Curve, the automated market maker, took a walk on the wild side this week with the release of its first heterogenous asset pool. The move raises the stakes in its contest with Uniswap, and Owen Fernau dug into the intricacies of what that means for the protocols. Must-read stuff. This week also saw the World Economic Forum, that paragon of the global establishment with its Davos confab, recognize the revolutionary potential of DeFi in a white paper. It provides a valuable preview of how the regulatory response to decentralized finance may take shape, and highlights the risks policymakers should be examining.
In a rollicking dispatch from Bitcoin 2021, Bailey Reutzel called out toxic Bitcoin Maximalists who refuse to truck with the value, and reality, of altcoins. She writes that their knee-jerk dismissal of all things not Bitcoin reminds her of Wall Street’s rejection of cryptocurrenies themselves a few years ago. Ouch! And that’s just a taste of Bailey’s razor-sharp observations, so crack open a beer, kick up your feet, and savor a truly great read.
Of course, no week in DeFi would be complete without the latest on NFTs. It’s astounding to see Sotheby’s and Christie’s, the auction duopoly that has ruled fine art for centuries, go head-to-head in their bid for supremacy in the digital art market. Dan Kahan reported the latest on the art, and the prices, that are hitting the block (including an NFT of Warhol’s iconic Campbell soup can), even as the snobs continue to decry Nifties as a harbinger of Armageddon.
Rounding off this chock-a-block week, we have three probing pieces of research and tutorials. Masha Prusso took the plunge into the world DEX fees and came back with a sharp look at how Uniswap and Pancakeswap better watch their backs. For the latest on state of play in the algorithmic stablecoins, read David Liebowitz’s analysis on why they promise to truly fulfill Satoshi’s dream of digital cash. And DeFi Dad treats us to a primer on yield farming and the protocol Charged Particles. Whew… what a week!
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🙌 Together with:
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, an automated market maker which prioritizes permissionless liquidity contribution and high capital efficiency
"Having Legal Tender in a Currency You Cannot Control Means You Cannot Print Problems Away:" Mariano Conti
In this week’s episode I speak with Mariano Conti, the former head of smart contracts at MakerDAO. Mariano knows the value of having permissionless and uncensorable currencies first hand —he started earning in Bitcoin in 2014 in Argentina because pesos would instantly lose value and it was hard to get dollars. When he learned about Ethereum he went all in and started working at Makerdao before DeFi was even a thing in 2016. When Dai was created, he was one of the first to take out a collateralized loan against his ETH and used that loan to buy a car. It must have been the first DeFi loan used to buy an actual physical thing.
The crypto space has come a long way since with an entire financial system built out of money legos and this week with a huge milestone of El Salvador becoming the first country to adopt Bitcoin as legal tender. Mariano talks about this historical moment and why it’s significant that it was a Latin American country to take this step.
This week’s guest opinion piece delves into what makes decentralized finance tick — our values. It’s easy to forget that underneath DEXs, gas fees, various “agricultural” endeavors, and myriad protocols there is a philosophical reason the community is constructing a new financial system.
Well, Chris Remus hasn’t forgotten and in his dispatch from the front he provides some poignant pointers on how to keep the lodestar well in sight as Ethereum transitions Proof-of-Stake, a new economic system that has the potential to further decentralized the network — only as long as the community keeps these values in sight. It’s a great read, and good reminder of what’s, ahem, at stake in this epic project underway.
In this piece by Masha Prusso, we explore how Uniswap and PancakeSwap have become household names in decentralized exchanges but a new crop of platforms are coming online with the promise of lower fees and more pricing transparency.
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.
Curve Finance Releases Protocol’s First Heterogeneous-Asset Pool Curve Finance, long distinguished by its homogenous-asset pools, has taken a walk on the wild side. The automated market maker (AMM) rocked DeFi yesterday by releasing a pool containing USDT, WBTC, and ETH on Ethereum and another including USDC and DAI as well on Polygon. This was a first for Curve, which had up until then only served trade between different versions of the same asset, such as WBTC and renBTC.
The Davos Crowd Dives Into DeFi with Policy-Maker ‘Toolkit’ The World Economic Forum, a bastion of the global establishment and ultra-exclusive club for heads of state, billionaires, and policymakers, is embracing DeFi. Well, sort of. In another sign that decentralized finance has spurred serious study in influential think tanks, the Geneva-based WEF issued a “Policy-Maker Toolkit.”
Latin American Bitcoin Backers Scramble to Follow El Salvador’s Lead Lots of laser eyes….but little actual legislation, at least for now. El Salvador’s adoption of Bitcoin as legal tender this week has captured the imagination of lawmakers across Latin America.
Algorithmic Stablecoins Breakdown: Attempting to Fulfill Satoshi’s Dream Stablecoins are taking big leaps forward toward achieving Satoshi’s goal of a pure peer-to-peer cash system, but there is still a raft of technical and market structure challenges that lie ahead. David Liebowitz of DeFi protocol Gelato goes through the advantages and disadvantages of different stablecoins’ designs.
Holaswap Enters Murky Waters After Challenging Uniswap License DeFi’s most well-known proprietary license is getting put to the test. A new project, Holaswap, has forked Uniswap’s V3, despite a license theoretically protecting decentralized exchange’s code from use in production settings.
Stablecoins Prove Their Worth During Crypto’s Slide If a long bear market is truly beginning in cryptocurrencies, then be thankful for stablecoins. With the Defi Pulse Index (DPI) down 40% on the month and the overall crypto market losing a third of its market value, the stablecoin supply has continued to march upward.
El Salvador Adopts Bitcoin But a Stablecoin May Have Worked Better Ever since El Salvador’s president Nayib Bukele activated his laser eyes and made Bitcoin the nation’s legal tender this week, crypto communities have been gushing about this latest milestone. But in his bid to provide his citizens with more financial freedom, did Bukele pick the wrong token?
Not All DEXs are Created Equal: Here’s the Math Uniswap and PancakeSwap have become household names in decentralized exchanges but a new crop of platforms are coming online with the promise of lower fees and more pricing transparency.
Defiant Degens: How to Farm IONX on Charged Particles This is a weekly tutorial on the most compelling opportunities to consider yield farming, written by our friend DeFi Dad, an advisor to the Defiant and member of the core team at Zapper. The goal is to expose more Defiant readers to new DeFi applications and their associated liquidity mining programs.
1% of Bitcoin Supply is Now Wrapped onto Ethereum They just couldn’t resist. Many Bitcoin diehards disdain other digital tokens but when it comes capturing yields it’s hard not to embrace Ethereum’s DeFi ecosystem.
Silly Maxis, Calm Down…You Can Love Bitcoin and Other Coins at the Same Time Toxic Bitcoin Maximalism is dumb. I tried to lead this article with something more poetic but it honestly boils down to that. Ever since altcoins started surging in value, and the DeFi story increasingly captured the spotlight, Bitcoin’s “murder hornets” can’t seem to hide their jealousy or their rage.
Sotheby’s NFT Auction Fires Up Duel with Christie’s in Digital Art Art snobs may loathe NFTs, deeming them bastardizations of a lineage defined by Da Vinci, Michelangelo, Picasso and Rothko. But don’t tell that to the auctioneers at Christie’s and Sotheby’s.
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).