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🛹 Teens are Building Decentralized Banks
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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.
The DeFi Pulse Index, a capitalization-weighted index that tracks the performance of selected DeFi assets across the market.
As a teenager, I was mostly concerned with getting decent grades, obtaining terrible liquor, and attracting girls with a rock band despite only playing the saxophone. Today, teenagers are running multi-million dollar DeFi protocols.
Jai Bhavnani, 19, David Lucid, 20, and Jack Lipstone, who just turned 20, founded Rari Capital in April 2020, less than a month after the founders’ home state of California went into COVID lockdown. That was also shortly after Bhavnani graduated from the college preparatory school which ties together six of the seven members of the Rari team.
Today, Rari Capital holds $112M in its smart contracts.
No Diplomas Needed
Rari is a striking example of the open nature of decentralized finance. Anyone can access financial services being offered in this ecosystem, and anyone can build on these open networks, too. Blockchains don’t ask for college diplomas or past experience, which means developers who aren’t of legal age to buy a beer in the US, can already start building applications that handle millions of dollars.
Two of the team’s employees, Jet, then 14, and Ben, who didn’t want to disclose his age, joined later in 2020 once COVID forced their school to go remote. The flexible online school schedule, combined both with DeFi’s permissionlessness, and the team’s drive, led to Rari Capital, a protocol that’s closest analogue is a bank, a fired-up Bhavnani told The Defiant in an interview.
“Before, we were probably closer to a hedge fund,” he said, “but now we’re a fucking bank and that’s so fucking cool.”
Rari aims to become a full-stack financial services organization…
TLDR Want to play tennis with serial entrepreneur and tech investor Gary Vaynerchuk? You’ll have to snag a VeeFriends non-fungible token. Gary Vaynerchuck, also known as Gary Vee, is working on a new project combining collectible NFTs with social token utility. The result is a novel project with big potential benefits for Vaynerchuk fans, including annual tickets to his in-person, multi-day conference; direct access to Gary Vee himself; and other exclusive gifts.
THE COLLECTION The VeeFriends collection will consist of 10,255 NFTs depicting 268 unique characters created by Vaynerchuck, and will also function as admission and access gateways in various forms.
ADMISSION VeeFriends Admission NFTs are the base level, acting as three-year access tickets for VeeCon, a marketing, business and entrepreneurship conference. The date and location of VeeCon has not yet been determined.
GIFT VeeFriends Gift NFTs, all 555 of which depict the same drawing of a goat, provide the same three-year access pass to VeeCon, but also promise owners “a gifting experience curated by Gary and the VeeFriends team.”
ACCESS Along with the VeeCon conference pass, VeeFriends Access NFTs grant the owner special, direct access to Vaynerchuck. These Access NFTs are the most unique and limited in quantity, with benefits ranging from group meals with Vaynerchuck to one-on-one fishing, workout sessions, or checkers.
TVL DOUBLES Almost a year since the initial release of COMP fueled DeFi Summer, Aave’s governance voted to implement a similar incentive program. The effects were just as momentous. Aave’s total value locked more than doubled within less than two weeks. This sharp increase took Aave from fourth largest TVL to second within a couple of weeks.
LARGEST PROTOCOL In terms of total liquidity, Aave has grown into the largest protocol with $14.33 billion supplied across its three sets of markets. Another key driver for this growth has been its Polygon market, propelled by the MATIC liquidity mining incentives.
LOANS OUTSTANDING The total amount of loans outstanding in Aave has increased by approximately 7x within a month to $4.72 billion. Tied to the growing borrowing demand, the fees accrued by Aave have grown substantially.
TLDR Uniswap launched its third and most comprehensive update yet. This new version of DeFi’s largest decentralized exchange by traded volume has the potential to usher in a new era for automated token swaps. The most notable change is that with Uniswap V3 decentralized trading becomes more capital efficient as liquidity providers can now set price ranges between which to provide liquidity.
BACKGROUND Uniswap popularized automated market-making in DeFi. AMMs rely on pools of tokens and prices set by a standardized formula, allowing for swaps to happen between any two tokens, even if there are no counterparties, as the swap happens directly with smart contracts. The mechanism also encourages anyone to provide liquidity to the DEX in exchange for trading fees.
PROTECTED NEW MODEL While this model has ruled DeFi, Uniswap might be about to change that with this upgrade. This time though, it has protected its code to prevent dozens of copies from springing up, like they did in its past iteration. Integrating with the project’s contracts, for example through DEX aggregators, will remain accessible.
CAPITAL EFFICIENCY OVER TVL V3’s concentrated liquidity means that DeFi’s most popular metric, total value locked, won’t have as much significance relative to trading volume. The ratio between volume and TVL should highlight AMMs’ increased capital efficiency.
The ratio between the $2.3M in volume that the $19.55M locked in the V3 USDT/USDC trading pair has facilitated is 0.12. That’s higher than the ratio of 0.07 for the same pair on V2, which has $6.68M in 24-hour volume on $101.59M of TVL. The former is almost twice as high as the latter, showing that the capital in V3 is almost twice as efficient as in V2 for the USDT/USDC trading pair.
“Warning: EsterFinance is in beta. Please understand the risks and do your own research.We are excited to announce EsterFinance, the first native yield farming optimizer on Fantom Opera network.”
“2 for 1, that’s Value DeFi: The first protocol to feature twice on the rekt leaderboard. When we first covered Value in November of 2020, they had just lost $7,000,000 after bragging about their ‘flash loan protection.’ Back then we learned that Value DeFi did not really know flash loan. Now they have lost another $10,000,000, and we find out that Value DeFi do not really know copy paste either.”
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🧑💻 ✍️ Stories in this newsletter were written by Dan Kahan, Owen Fernau, Andras Beak, and DeFiDad, and edited by Camila Russo. Videos were produced by Robin Schmidt and Alp Gasimov. Podcast was led by Camila, edited by Alp.
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).