Blocked USDC in Ethereum Address Proves Decentralization Purists Right
Also, Kyber Network upgrade, MTA tokens, Binance SNX listing.
Hello Defiers! Here’s what’s going on in decentralized finance:
Centre blacklists Ethereum address holding $100k of USDC
DeFi traders flood into Kyber after upgrade
MTA tokens launch next week
Binance lists SNX
and more.
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Blocked USDC Proves Decentralization Purists Right
This is exactly what decentralization advocates warn about: CENTRE, the issuer of USDC, has blacklisted an Ethereum address holding $100k of the tokens.
Centre called a “blacklist(address investor)” function on an Ethereum address holding USDC, effectively freezing the money in the address. The entity, which is a joint venture between Coinbase and Circle, said it was complying to law enforcement.
Image source: Etherscan
“Centre can confirm it blacklisted an address in response to a request from law enforcement. While we cannot comment on the specifics of law enforcement requests, Centre complies with binding court orders that have appropriate jurisdiction over the organization,” according to a company statement cited by CoinDesk.
USDC is backed at 1-to-1 with US dollars held in banks, and issuing and redeeming the token for dollars requires complying with know-your-customer procedures. Advocates of alternatives that don’t rely as much on third parties have long criticized USDC and others like it, for being susceptible to censorship and interference. The blacklisted Ethereum address, whose owner is unknown, is an example of that.
Questions on Dai
The blocked address also raises question about the most popular decentralized stablecoin Dai, as USDC is used as collateral to issue it. This means law enforcement could potentially interfere with USDC held in MakerDAO. Still, the stablecoin is just under 12% of total ETH collateral, which means Dai would likely survive the shock.
DTC Capital’s Spencer Noon made the point that only 31 addresses have ever been frozen for holding USDT out of 1.47 million (0.002%), and only 1 address has ever been frozen for holding USDC out of 182k (0.0005%).
Still, the fact that it can be frozen undermines the very point of cryptocurrencies: To provide a censorless financial system, that’s a viable alternative to the incumbent one.
DeFi Traders Flood Kyber Network After Revamp
By Sebastian Aldasoro
Almost $20M worth of $KNC has flooded into Kyber Network after the decentralized exchange’s revamp, signaling demand for DeFi tokens is still surging.
New DeFi Token Set to Go Live Next Week
By Cooper Turley
mStable, a liquidity aggregator behind the mUSD stablecoin, introduced liquidity incentives to distribute MTA tokens to those depositing funds in Balancer’s mUSD/USDC pool. Next week, those liquidity providers will finally start receiving their rewards.
Binance Lists SNX Signals DeFi Token Demand
By Cooper Turley
Today, the world’s largest cryptocurrency exchange, Binance, added support for SNX - the native token fueling Synthetix’s permissionless derivatives protocol.
The listing is the second DeFi token the exchange has added after COMP, solidifying centralized exchanges’ interest in the rapidly growing sector.
Averaging over $1B in 24h trading volume, the Binance listing gives Synthetix a strong secondary market for retail users, an issue which has long-plagued the project as it has lacked widespread price discovery outside of niche audiences.
Following the release of binary options, total value locked in Synthetix has surged, currently sitting at $370M at the time of writing. Now, SNX spartans are reaping rewards from the suite of liquidity incentives offered by one the communities favorite yield farming strategies.
Cryptocurrency exchange Coinbase readies stock market listing: Reuters
Coinbase Inc has started plans for a stock market listing that could come as early as this year, making it the first major U.S. cryptocurrency exchange to go public, Reuters reported, citing three people familiar with the matter.
ParaFi invests $4.5 million in DeFi lending protocol Aave: Decrypt
ParaFi, a Silicon Valley venture capital firm, announced it has invested $4.5 million in DeFi lending protocol Aave.
Detailed thread on some of the trends Ethereum watchers should expect in the coming months.
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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 at $10/month or $100/year, while free signups get only part of the content.
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About the founder: I’m Camila Russo, a financial journalist writing a book on Ethereum with Harper Collins. (Pre-order The Infinite Machine here). I was previously at Bloomberg News in New York, Madrid and Buenos Aires covering markets. I’ve extensively covered crypto and finance, and now I’m diving into DeFi, the intersection of the two.