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🦄 Recap: DeFi Week of May 17
Hello Defiers! Hope you’re having a great weekend and holding up amid the sell-off.
Summing up: It's been a bad week for crypto — ETH is down moe than 40% in the past seven days and so are the top DeFi tokens, while BTC is down more than 20%. Analysts looking for explanations for the downturn point to China regulation concerns and Elon Musk turning on BTC. Most likely, crypto had simply gone up too far, too fast. An over-leveraged market led to cascading liquidations, worsening the fall. Our Defiant Weekly video goes into all the drivers of the fall. But if you want to keep things light, head over to our “Wait for It” video, a hilarious production created for CoinDesk’s Consensus, which pokes fun at high Ethereum gas prices and features a deep fake of Vitalik and Terry Crews .
We covered how DeFi protocols held up better than centralized exchanges, never losing uptime amid record volume and liquidations. We wrote about how DeFi on-chain metrics remain strong, with Yearn taking advantage of the dip, buying back is own token, while BSC’s Venus didn’t handle the downturn as well and was left with a pile of bad debt.
Speaking of Yearn, we have a breakdown of the protocol’s complex ecosystem, diving into how each of its merger partners fit and work with each other. We also dug into BSC’s main applications and how its users are proving to be more fickle in the market rout. We also have an explainer on Ethereum’s MEV bots and the projects trying to solve this problem.
In this week’s launches and upgrades, Coinbase announced a new wallet browser plugin that will more directly compete with MetaMask, Sushi released its Miso token launchpad, and Aave hinted at a product for institutions. In our tutorials, we go through how to yield farm using Convex Finance, and how to become a liquidity provider for free by playing APY Vision’s LP Royale game. If you’re looking to keep your eye on the long term vision for web3 amid the market blood-bath, head to our podcast where Kayvon Tehranian talks about how blockchains are adding a value layer to the internet.
And there was more! There’s a lot going on, but we’ve got you covered :)
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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.
The DeFi Pulse Index, a capitalization-weighted index that tracks the performance of selected DeFi assets across the market.
In this week’s episode I interview Kayvon Tehranian, founder & CEO of Foundation, a platform for minting, buying and selling non-fungible tokens. We talked about the future of the internet —Kayvon believes blockchains are adding property rights to the internet. He also thinks that instead of having to wait for old institutions to come online, new ones in the form of decentralized autonomous organizations, or DAOS, will be built. He foresees a future when a lot of people will start saying, ‘why aren't you asking me to connect my wallet? Why do I have to log in this other way, that I don't have control over what I'm doing?’ I also believe that future is not so far away.
DeFi Protocols Show Resilience Amid Market Crash: In a selloff which saw Ethereum’s ETH and the DeFi Pulse Index basket of DeFi tokens dropping over 20% in an hour and more than 40% overall yesterday, DeFi protocols never stopped running and generally behaved as designed.
DeFi Outperforms Post Crash as On-Chain Indicators Remain Strong: DeFi tokens in the DeFi Pulse Index dropped 50% versus ETH from March to early May. Since then, we have seen a reversal over the past few weeks with DPI rebounding over 30% with on-chain activity turning bullish for DeFi.
BSC’s Venus Protocol Left With Bad Debt After Liquidations: Binance Smart Chain’s most popular lending protocol, Venus, experienced a massive string of market liquidations totaling over $200M on May 18, and Venus, itself, has been left with $100M in bad debt because of it.
Yearn Finance Ecosystem Breakdown: Yearn Finance surprised the DeFi world late last year when the project announced a flurry of mergers with Cream, Pickle, SushiSwap, Akropolis, and Cover in the span of a week. While the mergers were well-publicized, the nature of the integrations were less so, so we dug into how the teams work together, on both a technical and social level.
Crypto Makes First Attempt to Recover After Worst Bloodbath in Over a Year: It’s bad out there — in the past 24 hours Bitcoin plunged more than 30%, while Ether fell more than 40%, crypto exchanges were down, price tracking websites collapsed, China crackdown news flashed, crypto Twitter panic ensued. All in all, a classic crypto sell-off. But there are signs the market is starting to recover.
Yearn Seizes Dip and Buys Back $1.47M of YFI Token: Yearn Finance is buying its own YFI token dip. The protocol recently announced it would buy 8.15 YFI, when the average price was $50,121. Because of today’s market crash, the organization is down $12K at the time of writing. Yearn doesn’t seem concerned by the drop, doubling down today and announcing another purchase of 21.35 YFI for $1.2M.
Sushi Introduces Miso Token Launchpad: The Sushi community voted and the protocol listened and is now introducing a token launchpad. The launchpad, called MISO, which stands for “Minimal Initial SushiSwap Offering,” is the latest product to arise from the community governance protocol that was built around the Ethereum-based decentralized exchange SushiSwap. It will be launched on May 20.
Coinbase Wallet Could Give MetaMask a Run for Its Money: Coinbase Wallet has a new Chrome browser extension that will be competing directly with MetaMask, DeFi’s long-standing go-to browser wallet.
Defiant Degens: How to Yield Farm with Curve LPs in Convex Finance: There are 2 very different opportunities with Convex depending on whether you are a Curve liquidity provider vs those who hold CRV and wish to be a CRV/cvxCRV LP to earn yield farming rewards in the form of CVX.
Crypto Market Downturn Mostly Shakes Out Short-Term Bitcoin Traders: It’s been a rough week for the crypto market̶ and it appears to be at the hands of n00bs. Bitcoin (BTC) has been hit especially hard with a 25% loss over the past seven days, and the majority of people selling BTC since the end of April have been traders that have been holding onto the cryptocurrency for less than one month, according to data from IntoTheBlock.com.
Polygon’s Rise Comes with Increased Scrutiny of the Scaling Solution’s Security: Polygon, which in the past month soared to become the most popular Ethereum scaling solution, is coming under fire as critics say it is too centralized to be considered secure.
What Is Binance Smart Chain? Low Transaction Fees But Fickle DeFi Users: BSC has seen impressive growth, but users are proving to be fickle in the recent sell-off. The chain’s decentralized exchange Pancake Swap concentrates much of the chain.
Aave Hints at New Institutional Product: Aave is hinting at a new product for allowing institutions to practice DeFi. On Monday, Aave founder Stani Kulechov tweeted the words “Aave Pro for institutions” alongside a cryptic screenshot. Kulechov previously teased Aave Pro on May 12, when he tweeted about a private pool for institutions to “practice before aping into DeFi.”
Ethereum’s MEV Bots: Explainer and Project Map: Blockchain miners can extract value by excluding, including or re-ordering the transactions on the block they produce. This is known as MEV (miner extractable value) and it’s only bound to increase in the future as DeFi volume and complexity increases.
Eco-Friendly Chia Network Gets Elon Musk Boost: The Chia network and its XCH cryptocurrency got a boost from Elon Musk’s recent lambasting of Bitcoin’s energy consumption.
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 below ($15/mo, $150/yr).