$COMP Becomes DeFi Unicorn in Market Frenzy, Spreads Magic to Rest of DeFi
$COMP Becomes DeFi Unicorn in Market Frenzy, Spreads Magic to Rest of DeFi
Also, $ALEX personal token gets even more personal, ConseSys Codefi launches staking-as-a-service, BTC-WBTC swap becomes easier
Hello Defiers! Exciting times in DeFi,
$COMP becomes largest DeFI token by market cap after 1 day of trading
$ALEX holders can now vote on Alex Masmej’s life decisions
Ren and Curve Finance partner to make BTC-WBTC swaps easier
ConsenSys Codefi launches staking-as-a-service platform
and more :)
🎙Listen to this week’s podcast episode with Aragon’s Luis Cuende:
The open economy is taking over the old one. Subscribe to keep up with this revolution. Click here to pay with DAI (for 70 Dai/yr vs $100/yr).
🙌 Together with Quantstamp, a leading blockchain security firm keeping your money legos safe, Kyber Network, the on-chain liquidity protocol for the tokenized world, and Keycard, the secure, contactless hardwallet & open source API.
COMP Soars to Become DeFi’s First Unicorn
By Sebastian Aldasoro
Compound Finance’s COMP became the most valuable token in decentralized finance on its first day of trading. Not only did it become a market cap “unicorn;” it also worked its magic in applications across the space.
Compound Finance, the second-largest DeFi lending platform after MakerDAO, began distributing 4.3M of the total 10M tokens to users of the protocol Monday, in the final step on its road to decentralized governance. Holders with at least 1% of total token supply can submit protocol upgrades, and all holders will be able to vote on these changes. The San Francisco-based company on June 1 abdicated the guardian functionality, which could have allowed it to disable governance.
Image source: Uniswap.info
$1B Market Cap
But beyond access to governance, yesterday’s frenzy signals traders view COMP as a way to gain exposure to one of DeFi’s most successful protocols. Speculation driving demand: Token holders may eventually decide for COMP to receive a share of Compound’s earnings, and/or Coinbase may list COMP, causing it to shoot up further.
COMP’s price doubled in its first day of trading, briefly crossing $100 and now trading at $98.6, which puts its market cap at almost $1B. This makes COMP the largest DeFi token by fully diluted market cap, surpassing MakerDAO’s MKR at ~$530M. COMP’s market cap is at 7 times its total value locked, compared with an almost even ratio for Maker, which may signal the rally went too far.
Image source: Defimarketcap.com
TVL Spiked
The token launch pushed the total value locked on Compound to spike by more than 40% to $143M, the highest since March, according to DeFi Pulse. It’s the second time in one month that a token has caused liquidity on a DeFi protocol to jump. Balancer Labs’s BAL caused volume to surge to more than $1M from $129k in a few weeks.
Image source: DeFiPulse.com
Rocket Fuel
Compound’s token listing was rocket fuel for other DeFi platforms. The COMP-ETH pair pushed Uniswap V2 to surpass Uniswap V1 on liquidity for the first time. COMP-ETH’s liquidity ballooned to over $2M, or the fourth largest trading pool on Uniswap. The token also ranked fourth in terms of volume, with over $1.6M trading hands.
Arbitrage opportunities that opened up with COMP distribution caused volume on stablecoin-focused Curve Finance to soar to over $20M, to become the DEX with the highest volume, according to DeBank.
Arbitrage
In one arbitrage trade, users are taking DAI collateral to borrow USDT and allocating that USDT to its corresponding market on Compound, which is receiving the most significant amount of COMP.
Out of the remaining 5.7M tokens, 24% go to shareholders of Compound Labs, with a16z owning 3.45% of tokens, while Polychain Capital owns 3.26%. Compound’s founders and team get 22.25% of tokens, with 4-year vesting. The rest will be reserved for new team members and future governance participation incentives.
YOLO
With COMP and BAL, we may be witnessing the start of a new Ethereum-token bull market. Unlike 2017 though, when so many teams sold coins in ICOs for platforms that never shipped, this time not only are platforms live, but tokens are meant to incentivize use and participation. It’s a healthier model, but one that inspires FOMO and YOLO trading nonetheless.
$ALEX Holders Can Now Have Say in Alex’s Life
By DeFi_Dad
Alex Masmej, the first person to tokenize themselves on Ethereum, launched a simple tool for voting on his life choices, appropriately named: Control My Life.
The voting tool was built by beloved Ethereum hacker and founder of the Burner Wallet, Austin Griffith. Anyone holding the $ALEX token can now connect their MetaMask (or WalletConnect compatible wallet) to vote on choices that will impact Alex's life.
Alex pioneered the personal token offering in April. He raised $20k by selling $ALEX to fund his goal of moving to San Francisco and building a crypto startup. In exchange 30 investors will get a share of any money he makes in the next three years, with the total payout capped at $100k, and will now get to have a say on Alex’s life decisions.
Alex shared his first public vote on-chain as “Choose My Daily Habit in July.” You can watch a short video tutorial below by DeFi Dad on how to vote without paying any gas and simply signing a transaction.
ConsenSys Codefi Launches Eth Staking Service
ConsenSys Codefi is launching a staking-as-a-service platform for exchanges, custodians, wallets, and other institutions to offer their customers the ability to easily stake ETH on Ethereum 2.0.
Binance, Huobi Wallet, Matrixport, Crypto.com, DARMA Capital, and Trustology are the first to participate in Codefi Staking’s Pilot Program. The companies will provide feedback for the Codefi Staking API ahead of the Ethereum 2.0 launch.
“The mission is to provide a white-label institutional grade API, with easy and efficient access to the Ethereum 2.0 network to enable enterprises to safely and profitably engage with the next phase of Ethereum’s evolution,” ConsenSys Codefi wrote in a press release.
Proof-of-Stake
Ethereum developers are building the network’s biggest upgrade so far, as they plan to transition into an entirely new chain, which uses the proof-of-stake consensus mechanism to validate transactions, instead of proof-of-work. Those who stake at least 32 ETH earn ETH as a reward for participating in securing the network.
But staking can be complex, wrote Tim Lowe, Codefi Staking product lead. “Some of the risks associated with running your own validator include theft or loss of withdrawal keys, incorrect transfer of funds to the Eth 2 deposit contract, and not to mention hardware or internet connectivity failures which result in a loss of validator rewards.” The platform aims to simply this process.
Ren and Curve Finance Simplify BTC to WBTC Swap
By Cooper Turley
Ren partnered with Curve Finance and WBTC to launch WBTC Cafe - a one-stop-shop for converting BTC to WBTC without intermediaries or going through KYC.
The platform allows users to swap BTC to WBTC, an Ethereum token pegged at 1-to-1 with BTC. It will also help DeFi applications abstract the integration of Bitcoin into their products. Applications can prompt users to deposit native Bitcoin and seamlessly connect to lending, borrowing and margin trading, all with the click of a button. RenVM has ported over $1M in BTC to Ethereum since its launch on May 27.
Onboarding
Under the hood, native BTC is wrapped as renBTC and instantly converted to WBTC using Curve Finance’s low-slippage liquidity pool. As an end-user, you never see this step and simply receive the most popular Ethereum-based wrapper of Bitcoin (WBTC) to use anywhere in the wider DeFi landscape.
This product marks a big step for the WBTC onboarding flow as there is no longer KYC or third-parties required to tap into the dozens of platforms like Maker, Compound and Aave, which support WBTC. Previously, only approved merchants could swap BTC for wBTC via BitGo, or they’d have to go through KYC on CoinList. wBTC still relies on BitGo for custody.
Placeholder Ventures cofounder Chris Burniske has some bullish pice predictions.
Stablecoins blast through $10 billion market cap, Mati Greenspan tweeted.
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.
Click here to pay with DAI.There’s a limited amount of OG Memberships at 70 Dai per annual subscription ($100/yr normal price).
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.