Recap: DeFi Week of Sept. 28 🦄

Hello Defiers! Hope you’re having a great weekend.

Summing up: This week began with crypto feeling the hangover from the previous week’s hack of centralized exchange KuCoin as the attacker started selling off his/her stash; DIA founder Paul Claudius wrote about the hard choice DeFi projects faced: to fork or not to fork. Later in the week there was another hack: an attacker was able to steal $15M from contracts that hadn’t even been publicly launched after degen traders rushed in solely based on the project’s connection with Andre Cronje. But the biggest news in crypto was that the CFTC charged BitMEX and its owners for not following KYC and AML procedures, pushing the case for actual decentralization.

That was just one week. Subscribe to get the latest DeFi news and analysis straight to your inbox and you don’t miss a thing. Free-signups get partial content, paid subscribers (only $10/month, $100/year) get everything. Click here to pay with DAI.


🙌 Together with Zerion, a simple interface to access and use decentralized finance,  Perpetual Protocol, which provides decentralized perpetual contracts for any asset, and HackAtom V, a two-week virtual hackathon organized by Cosmos.


Interview

"Fair Launch is a New Way for Founders to Express Themselves:" Gavin McDermott of IDEO CoLab

In this week’s interview, I spoke with Gavin McDermott. He's an investor at IDEO CoLab Ventures, the venture arm of design firm IDEO, and he’s one of the creators of Fair Launch Capital. While the name might suggest otherwise, Fair Launch Capital isn’t an investment firm, or at least it’s not a traditional investment firm. Instead, it gives startups no-strings-attached funding so that they can afford security audits and launch their projects in a safe way. They’re asked to consider paying it forward by returning at least the same amount they got but ideally more, to fund the next project. 

The idea came after the team saw that many founders in crypto were feeling forced to either sell tokens before their platform launched or raise venture capital as one option to pay for audits, or release their projects without the proper security checks. Gavin is hoping fair launch capital provides a viable alternative to venture capital, even if it does end up disrupting his fund's own business model. Since the group unveiled this new funding mechanism late August, the term “fair launch” has taken a life of its own, becoming a gold standard for any new DeFi venture.

🎙Listen to the interview in this week’s podcast episode here:


Op-Ed

To Fork or Not to Fork - A Hack of a Question

By Paul Claudius, co-founder of oracle provider DIA

Paul Claudis, co-founder of oracle provider DIA, on DeFi project’s decision to freeze tokens after KuCoin’s $200M hack: Following the recent hack of Hong Kong-based centralized crypto exchange KuCoin, many DeFi projects were quick to freeze their smart contracts and initiate a token swap to do damage control and undermine the hacker’s ability to monetize on his actions. Others rejected using centralized infrastructure to exert this power. The difference in responses brings up an age-old question in the realm of DLT: How much decentralization do we really want?


Thursday

Dives

  • BitMEX Charges Highlight Case for Real DeFi: CFTC charges against BitMEX are bound to push more cryptocurrency projects towards decentralization — but that means actual* decentralization.

  • Grammy-Winning DJ Releases $RAC Community Token: One of DeFi’s favorite artists - RAC - has released a community token to bypass the music industry’s many intermediaries and create a direct link with fans.

Bytes

  • Yield Farming to Incentivize a Safer DeFi: Nexus Mutual wants to incentivize more coverage by allowing any project listed on the platform to reward providers with their native protocol token using a system they call Shield Mining.

  • DeFi Has a New Primitive; The Structured Token: DEXTF, a non-custodial asset management portfolio, this week unveiled its first structured product, designed to allow buyers to protect against the downside while gaining with its upside of ETH.

Links


Wednesday

Dives

  • DeFi Forks Are Moving Beyond Copy and Paste: In the last month, almost every major DeFi project has been forked. Some of the forks have even been forked themselves. But do these near-copies of projects actually add any value? Or are they simply opportunistic money-grabs?


Tuesday

Dives

  • Eminence Finance Exploit Leads to Degen Trader Rug Pull: The latest ‘test in prod’ experiment from Yearn founder Andre Cronje has many degen traders questioning their YOLO nature following a flash loan attack of contracts which hadn’t been officially released to the public yesterday afternoon.

Bytes

  • Superfluid Unlocks Programmable Cashflows: A new money streaming protocol called Superfluid has showcased its design for a smart contract framework for recurring, gasless token distributions.

Links


Monday

Dives

  • The State of Stablecoins in DeFi, A Deep Dive by DappRadar: Stablecoins are one of the fastest-growing asset types in the crypto world. The purpose of these cryptocurrencies is to track a particular peg (usually the dollar) minimizing volatility and providing a convenient unit for transacting.


💜Community Love💜

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.

About the founder: I’m Camila Russo, author of The Infinite Machine, the first book on the history of Ethereum. 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.