🦄 Recap: DeFi Week of May 29
Hello Defiers! Happy weekend!
The reckoning continues… The news this week was filled with stories of reboots and repositionings as the crypto bear tightens its grip. Aleksander Gilbert, The Defiant’s newest writer, wrote a deep dive on how the end of easy money is forcing crypto founders and venture capitalists to pursue more disciplined approaches to DeFi projects. It’s a great take on the importance of building solid platforms with ace teams, and resisting the urge to cut corners.
Likewise, Sam Haig covered Rune Christensen’s cri-de-coeur on the problems assailing MakerDAO, a blue-chip DeFi project that’s defied the malaise striking the space in the wake of Terra’s implosion. At least until now… Never one to mince words, Christensen lamented the “complexity and opaqueness” of Maker’s governance structure, as well as financial losses and apathy in its member ranks. Sam reported on Rune’s plan to turn this situation around.
Meanwhile, the mystery of Terra’s demise deepened with the news that crypto lender Celsius may have played a role. Jason Levin reported on Nansen’s findings that UST’s depeg was linked to action in seven big crypto wallets. And OpenSea made cringe-inducing headlines when a federal grand jury handed down an indictment of Nate Chastain, the NFT marketplace’s former head of product, alleging he committed insider trading last year. Owen Fernau covered the news and the hype that engulfed the space during those heady days in the summer of 2021.
In more inspiring news, Robin Schmidt landed an interview with the indomitable pplpleasr fresh from her star turn at the Cannes Film Festival. The NFT artist shared the story of her rise in the space in a poignant reminder of the creativity and innovation brimming in crypto.
By the same token, Camila Russo spoke with Yoni Assia, the force of nature behind eToro, the trading platform that embraced crypto in its early days (and gave Vitalik Buterin a working home for a spell at the dawn of Ethereum). Yoni described how eToro has steadily grown into a breakthrough player in the retail securities industry with its social media-driven content model. A must-listen!
Enjoy!
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This week:
Curve on Optimism + Gearbox Credit Accounts
Podcast
🎙Yoni Assia on the Rise of Active Trading in a Blockchain-Based World and Building a 27M-User App
Yoni Assia is the founder and CEO of eToro, one of the most successful crypto and stock buying apps with over 27 million users in more than 100 countries. Originally founded in 2007, it was one of the pioneering companies to incorporate crypto as early as 2013. Yoni speaks about what led to being so early and where the idea for Etoro stemmed from. He also dives into the importance of the user experience in creating a mainstream crypto trading app, and how including a social aspect to the product early on helped in accelerating growth.
We talked about the next phase for eToro and the role NFTs and DeFi will play in the platform, as he looks to integrate both. Yoni is convinced finance will become increasingly digital, and believes eToro’s role is to help investors diversify their holdings. He sees a change in investment attitudes as the younger generation is interested in taking a more active role with their assets, and trading is becoming a more social experience. Finally, we talk about some of the lessons he has learned about entrepreneurship and taking big risks.
The Tube
📺 The Defiant Weekly: GoblinTown is the PFP we deserve. But is it all just a big joke?
The Tube
📺 Defiant Interview: Struggling artist to $525,000 NFT mega sale; the story of pplpleasr
📺 Hot Stuff: Have sex. Get paid. Move to earn is officially topped... (narf narf)
📺 Tuesday Tutorial: Do Kwon's folly - Dai was never going to die. Here's why
📺 Quick Take: New Terra Launches - LUNA Dumps, LUNC Pumps
Deep Dive
😬 Crypto Founders Scramble as ‘Outlandish’ Era of Easy Money Ends
VCs are Choosier About Investments in Bear Market
In which Aleksandar Gilbert delves into the changing funding picture…
Last year, crypto founders had it easy: all they needed was an idea and a mediocre team that could put together a semblance of a crypto project. Then bam! Startups could raise $10M in seed rounds and notch $100M valuations, even before they had an actual product.
“The VC market for crypto was ridiculously red-hot, and so you saw outlandish valuations, outlandish seed rounds,” Corbin Page, the former head of fintech products at Consensys, told The Defiant.
That world is now a distant memory. A sell-off in crypto that began late last year turned into a free-fall in May, with bearish investors vaporizing $1.6T in market capitalization over the last six months. The sudden shift has forced crypto entrepreneurs to adapt to a new reality — the days of easy VC money are over.
Venture capitalists that were so quick to cut checks over the past two years are now becoming far more careful when choosing where to invest their money, according to interviews with VCs. Funding rounds that used to close in weeks will probably now take months. Devs won’t land deals with just an idea. They will have to show they have a functioning product that people will pay to use.
Airdrop Chronicle
🌪 Optimism Airdrop Turns ‘Turbulent’ After Demand Overload
In which Samuel Haig explores the perils of demand.
The first phase of Optimism’s debut airdrop took place on May 31, but it was overwhelmed by demand and the project scrambled to fulfill claims on a “turbulent” day. Optimism, an Ethereum Layer 2 scaling solution, set up the airdrop to distribute OP tokens to reward users that have helped it to grow and to entice newcomers to join the network.
But some onlookers were not convinced Optimism is worth the trouble. “I see no reason for [$OP] to exist apart from it being a farm token for ecosystem rewards,” said Wangarian, an angel investor and former principal with DeFiance Capital.
Optimism doled out tokens to 248,699 wallet addresses across the Ethereum and Optimism networks. Eligible users had to meet a variety of criteria, including being on the Optimism chain, voting on proposals or signing multisig wallets for top DAOs within the Ethereum ecosystem, and Gitcoin donors.
Friday
News
Christensen Drops Radical Plan to Remake MakerDAO and Address ‘Fundamental Problems’ Plagued by financial losses and apathy by its members, MakerDAO Founder Rune Christensen proposed on May 31 a radical new restructuring plan for the blue chip DeFi project.
ENS Domain Registrations Surge Even as Token Plummets May was a record-breaking month for Ethereum Name Service domains.
Algorand Woos LUNAtics with New Fund and Migration Tool The Algorand Foundation on Thursday announced the creation of a fund and “automated platform” intended to lure Terra developers stranded by the blockchain’s recent collapse.
The Graph Poised to Expand to Arbitrum in Layer 2 Win More and more of Ethereum’s top protocols are looking to migrate onto Layer 2.
Elsewhere
Thursday
News
OpenSea’s Former Head of Product Arrested by the FBI It was one of last year’s largest scandals — Nate Chastain, the former head of product at OpenSea, left under a cloud after it was discovered that he purchased NFTs before they were featured on his former employer’s homepage and subsequently sold them as the increased exposure led to higher prices.
Flurry of Metrics Show Signs of Potential Recovery for ETH Is the worst over for ETH? The Ethereum markets are giving mixed signals, with on-chain data indicating accumulation is underway in spite of bearish price action.
Velodrome AMM Launches Airdrop on Optimism On June 1, automated market maker Velodrome launched an airdrop of its $VELO governance token on Optimism. The move comes a day after Optimism, a layer-2 scaling solution for Ethereum, kicked off the first phase of its own $OP airdrop.
Elsewhere
Users who sold the initial OP airdrop should become ineligible for all future airdrops: Optimism
Chipotle will now accept cryptocurrency in US stores: The Block
Wednesday
News
Liquid Staking Derivatives Pose ‘Significant Risks’ to Ethereum 2.0: Report Protocols that offer liquid staking derivatives, like Lido and Rocket Pool, could undermine the integrity of Ethereum after its transition to proof-of-stake, according to a researcher at the Ethereum Foundation.
DeFi’s TVL Fell 40% in May But Bright Spots Emerge Should we even look? DeFi protocols recorded a May to forget. The Total Value Locked (TVL) across the sector plummeted more than 40% in the month to $111.4B, according to data from DeFi Llama.
El Salvador Struggles to Adopt Bitcoin Despite Government Push Every country does crypto differently. El Salvador’s government incentivized Bitcoin usage whereas Argentina’s crypto boom has been largely organic. The two routes – top-down and bottom-up – are quite distinct in their approaches and outcomes.
Optimism Airdrop
$OP is Live! A Guide To Claiming the Airdrop Layer 2 season is upon us. Optimism’s OP token is live and eligible users can claim the first phase of the airdrop. Optimism is an Ethereum scaling solution based on optimistic rollup technology. The official token contract was unearthed by Crypto Twitter sleuths last week.
Elsewhere
Dogecoin’s parents are fighting: Musk and Jackson Palmer exchange barbs: CoinTelegraph
Marc Andreessen & Chris Dixon of a16z | Reinventing the Internet: Bankless.
FTX says farmers don't need to worry about its US derivatives proposal: The Block
Tuesday
News
Crypto Markets Rebound After Bitcoin’s Record Losing Streak Crypto bulls went to work as U.S. financial markets remained closed for Memorial Day.
New LUNA Coin Surges While Terra Controversy Escalates The Terra token has approximately doubled in price two days after its launch, even as controversy surrounding Terra and the activities of its founders continues to grow.
Eth2 Beacon Chain Launches on Ropsten Testnet, Paving Way for Merge Venture capital firm a16z has raised $4.5 billion for its fourth crypto fund, the firm announced Wednesday morning.
Crypto Lender Celsius Partly Responsible for Terra Collapse, Says Nansen Blockchain analytics company Nansen linked the de-peg of Terra’s US dollar stablecoin to seven large crypto wallets, among them a wallet associated with crypto lending platform Celsius, whose massive sales of UST triggered a stampede for the exit.
BTC Tracks Nasdaq as Crypto Faces Its First Recession The Crypto market cap is down 57.7% from its Nov. 8 highs, and economists say we could be on the cusp of the first global recession since the 2008 financial crisis. That revives the undying question: is crypto tethered to the stock market?
Welcome to Goblintown “F@#king enter already.”
Elsewhere
Morgan Stanley Says Record Crypto Venture Capital Investment to Slow: CoinDesk
Singapore regulator announces plans to explore blockchain use cases: The Block
Prada Joining Top Luxury Brands in Web3 With Ethereum NFTs: Decrypt
💜Community Love💜
Thanking all the amazing Defiers for the support and love this week (and always)!
🧑💻 ✍️ Stories in The Defiant are written by Owen Fernau, Samuel Haig, Jason Levin, and yyctrader, and edited by Edward Robinson, yyctrader and Camila Russo. Videos were produced by Robin Schmidt and Alp Gasimov. Podcast was led by Camila, edited by Alp.
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