Hello Defiers! Hope you’re having a great, self-isolated weekend :)
Summing up: The past week was all about the aftermath of ether’s +40% crash on the previous week and MakerDAO’s crisis, which resulted from that. The largest lending platform in DeFi cut borrowing rates to 0.5% and lending rates to 0%, and added USDC as collateral, to increase the Dai stablecoin liquidity. It also started to auction off its governance token MKR to raise enough Dai to cover the its bad debt, which resulted from the ether sell-off as the system to liquidate underwater loans broke down. While a flurry of measures have been taken, vault owners who got their entire position liquidated are wondering whether they’ll get compensated. As a result of the crisis, financial dapps had record activity, according to DappRadar. In non-MakerDAO and ether crash news, Alethio dug into its latest DeFi ecosystem map, which shows exploding growth. Ganesh Swami, co-founder of data firm Covalent, posted his first installment of our Flippening Series, where he’ll dig into the metrics which pulled him back to crypto and Ethereum when he was on his way out. And there’s more!
And this was just one week. Subscribe so you get the latest DeFi news and analysis straight to your inbox and you on’t miss a thing. Free-signups get partial content, paid subscribers (only $10/month, $100/year) get everything.
Alethio, a ConsenSys-backed data analytics firm, has mapped the DeFi ecosystem since it just started to emerge in 2018. Its latest update shows a growing, interconnected web of users in a galaxy that’s lighting up with new platforms. Alethio digs into its findings from the most recent map, and how it found that the ecosystem has grown in three key aspects: scale, diversity and connectivity.
The biggest losers of MakerDAO’s black Thursday are arguably Dai borrowers who got their entire collateral —about $5 million worth of ether— liquidated as ether plunged. While the DeFi community has come together to make sure there’s a buyer of last resort for MKR, somewhat limiting MKR token holders’ losses, there hasn’t been a decision on how and if collateral holders who lost 100% of their funds will be compensated. In this interview, one of the vault owners who got liquidated explains why he’s been put off MakerDAO and possibly all of DeFi.
Part I of the Flippening Series with Covalent’s Ganesh Swami: How Climbing Mt. Everest Drove One Disillusioned Entrepreneur Back to Crypto
Dai Health Improves After MakerDAO’s Drastic Measures: It’s been two days since MakerDAO slashed rates and welcomed USDC into its system, a controversial move regarded by some purists as going against Dai’s very reason for being. Still, DeFi has kept defying and Dai health is improving.
MKR Climbs Ahead of Today’s Auction: MakerDAO’s governance token MKR is climbing as the system prepares to sell newly minted tokens to refinance bad debt resulting from last week’s ether sell-off.
Developer Builds Tool to Make Aave Liquidations Easy: iEarn Finance founder Andre Cronje built an interface to make it easy to liquidate loans on lending platform Aave.
Billionaire Bitcoin Bull Tim Draper Investing in DeFi: Billionaire bitcoin bull Tim Draper’s Draper Goren Holm Ventures is investing in DeFi Money Markets DAO (DMM DAO) in the form of DMG.
MakerDAO’s Drastic Times Call for Drastic Measures: MakerDAO, which makes up roughly half of DeFi, has millions in bad debt resulting from ether plunging more than 40% last week, and is scrambling to contain damages with drastic measures.
Ether Plunge, MakerDAO Crisis Spur Record Dapp Activity: It’s not all bad news in Ethereum as ether plunged for than 40% and MakerDAO deals with its liquidity crisis —activity on some decentralized applications is surging to the highest ever.
Coronavirus Spurs Virtual NY Blockchain Week
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 at $10/month or $100/year, while free signups get only part of the content.
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About the author: 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.