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⏰ Dev Pinpoints Exact Minute The Merge Goes Live

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Tornado Fallout
Deep Dive
DeFi Explainers
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The Merge

Dev Pinpoints Exact Minute The Merge Goes Live

Analysts Expect ETH May be Deflationary post-Merge

By Samuel Haig

EXACT MOMENT First it was the third quarter. Then it was sometime in September. Next it was around Sept. 15. Now we know the precise minute The Merge, the most sweeping upgrade in Ethereum’s history, will take place: 20:57:34 U.K. time, on Sept. 14.

MERGE On Monday, Marius Van Der Wijden, an Ethereum developer, tweeted that he had run some code to pinpoint the exact moment Ethereum’s Proof-of-Stake Beacon chain will merge with its mainnet and usher in a new era for the No. 1 smart contract network worldwide.

DIFFICULTY BOMB The key, Van der Wijden said, was measuring when Ethereum’s Total Terminal Difficulty (TTD) will be triggered. TTD, also known as the “difficulty bomb,” is a hardcoded deadline that will force The Merge to occur at a specific block height.


DeFi Privacy

🌪 Tornado Sanctions Test Resilience of DeFi Privacy Community

Privacy Mavens Tout ZK-Proofs as Solution for Users and States

By Aleksandar Gilbert

PRIVACY-FIRST In the wake of the U.S. government’s sanction of Tornado Cash last week, it feels like the Feds have declared war on privacy-first crypto projects. Now several of those ventures are hoping for a truce. 

SOLUTION Representatives of those projects say there’s a solution that can benefit all parties — users, protocols, and the state. The solution, they argue, stems from technology that allows a user to conceal blockchain-based transaction history but reveal it on demand by law enforcement. 

PROTECTIONS Jon Wu, head of growth at Aztec Network, a self-styled VPN for Ethereum, said that anti-money laundering protections can be put in place without sacrificing user privacy. 

BALANCE “I think the industry would be ignorant not to think that we could get away with technologies that are not proactively compliant, and I think Aztec and many other privacy networks are committed to finding that middle balance,” he said on a Twitter Spaces discussion hosted Thursday by Forta, a blockchain security firm.


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DAO Governance

🍣 SushiSwap May Overhaul its Entire Structure

Drama Builds at DEX as Members Weigh New Revenue Model

By Samuel Haig

PAY A few weeks ago SushiSwap plunged into controversy when it moved to pay a prospective new “head chef” what many of its members deemed an exorbitant compensation package.

DRAMA Turns out the drama was only just beginning at the $1.2B decentralized crypto exchange. Now SushiSwap’s community is backing a sweeping proposal to overhaul the project’s DAO, voting process, and revenue model. 

MEIJI The proposal is called Meiji Restoration and it aims to do nothing less than revitalize a DeFi project that has been struggling to find its footing after suffering a leadership crisis and losing ground to rivals such as Uniswap and Curve. SushiSwap’s token has dropped 85% this year compared to a 50% decline at Uniswap. 

NEW DAO The plan calls for a new DAO funded by protocol fees and directed by voting shares. It also seeks to introduce Curve-style Vote Escrow (VE) tokenomics in a bid to motivate tokenholders to lock their assets over the longer term. The idea is this would kickstart SUSHI out of the doldrums.


Tornado Fallout

😳 Growing List Of DeFi Apps Ban Tornado Cash Users

Aave, Uniswap, dYdX and Balancer Have Banned Addresses After U.S. Sanctions

By Claire Gu

SANCTIONS Several dapps on Ethereum have started to ban users in the wake of sanctions levied on Tornado Cash. Major protocols currently include Circle, dYdX, Aave, Uniswap, and Balancer.

ANONYMIZE As a crypto mixer operating on Ethereum, Tornado Cash has been accused of laundering stolen crypto and was banned by the U.S. Treasury’s Office of Foreign Assets Control (OFAC) on Aug. 8. Crypto mixers anonymize blockchain transactions by breaking the on-chain link between source and destination addresses.

DEBATE The sanctions, however, have sparked debate within the crypto community — proponents of Tornado Cash argue that the sanctions pose a serious threat to financial privacy, while critics agree with the ban since it can be an effective weapon to fight against cybercriminals.

ARREST The Aug.12 arrest of Tornado Cash developer Alexy Pertsev by Dutch authorities has been widely condemned by the crypto community. The Block identified the dev in an article published on Aug. 12 after interviewing his wife Ksenia Malik. It does not appear that the authorities have charged Pertsey with a crime.



😏 Royalty-Free Sudoswap Is Finding Favor With NFT Traders

Cumulative Trading Volume On sudoAMM Has Crossed $10M

By Owen Fernau

VOLUME With all the regulatory news threatening fundamental tenets of DeFi, it’s easy to forget about NFTs. Not everyone has forgotten, however, as NFT traders pushed cumulative trading volume on sudoAMM, a recently launched NFT marketplace, over $10M on Aug. 11.

MILESTONE The milestone comes 35 days after the project was launched. In contrast, Coinbase’s NFT marketplace is yet to cross the $10M total volume mark — it’s at just $6.7M, 100 days after launching on May 4.

FEES Kofi Kufuor, a partner at crypto-focused investment firm 1confirmation, sees sudoAMM as bringing two major value propositions to the table. First, sudoAMM allows anyone to easily become a liquidity provider for NFTs and earn fees. 


Token Burns

🔥 Acala To Burn $1.2B aUSD After Minting Bug

Some LPs Were Able To Claim Excessive Rewards

By Aleksandar Gilbert

MINTED The Acala blockchain is poised to destroy more than $1.2B in erroneously minted tokens. Acala Dollar (aUSD), the network’s native stablecoin, lost its dollar peg in UST-esque fashion on Saturday after a bug caused the network to erroneously mint over 1.2B aUSD.

PLUNGE Trading at about $1.02 on Saturday evening New York time, aUSD plunged to less than a penny per token, according to data from CoinMarketCap.

NINE TEAMS The blockchain remains paused while the team works to resolve the situation. In March, nine Polkadot parachain teams launched a $250M Ecosystem Fund to support early-stage startups building Polkadot-based dApps that support aUSD – a crypto-backed, overcollateralized stablecoin.


Crypto Deals

👀 SBF Eyes Huobi In Potential Billion Dollar Deal

Huobi Founder Leon Li Is Reportedly Looking To Offload His 60% Stake

By Jason Levin

NEWS Leon Li, the founder of Huobi, the world’s 13th largest crypto exchange, is reportedly looking to sell his near-60% stake in the exchange for over $1B.  Bloomberg reported that FTX founder Sam Bankman-Fried (SBF) and Tron founder Justin Sun have been in contact with Huobi’s parent company about the deal, but Sun has denied any involvement. The deal would value Huobi at $2B to $3B.  

SURGE Huobi’s native HT token has surged 18% since the news broke this morning. 

SPREE Sam Bankman-Fried, the 30-year-old dealmaker with a reported net worth of $24B, has built a reputation as one of crypto’s biggest sharks and has been extending lifelines to cash-strapped companies during the bear market. 


The Tube

📺 Quick Take: Tornado Cash OUTLAWED, Shkreli TORRENTS, & Penguins FLY

DeFi Explainers

💸 What Is an Airdrop?

A Step-by-Step Guide to One of Crypto’s Most Used Marketing Gambits

By Rahul Nambiampurath

POPULAR Airdrops are one of the most popular features in crypto. In exchange for minor social media engagement, airdrops allow users to receive free cryptocurrencies in their wallets. 

ROADMAPS In return, new blockchain projects receive public attention and liquidity as their roadmaps are finalized. Likewise, large corporations like Coca-Cola can use NFT airdrops to popularize their brands within the upcoming Web3 metaverse.

TOKENS Blockchain and crypto startups copied this marketing methodology. Instead of products, they gave away their project’s tokens, and instead of email addresses, the users had to provide their wallet addresses.

AIRDROPS Thanks to streamlined web browser wallets like MetaMask, it is now easier than ever to participate in airdrops. It is no secret that blockchain startups don’t really have marketing budgets. Crypto airdrops filled the gap by becoming marketing events.



🔗 Analysis: What is and what is not a sanctionable entity in the Tornado Cash case: Coin Center

Last Monday, the Treasury Department’s Office of Foreign Assets Control (OFAC) made a designation adding Tornado Cash to the Specially Designated Nationals And Blocked Persons (SDN) List that it administers.

🔗 The Crypto Geniuses Who Vaporized a Trillion Dollars: New York magazine

The boat was a beauty of a thing: some 500 tons across 171 feet of glass and steel as white as Santorini.

🔗 Vault it, wear it or resell it? Inside Gmoney’s luxury label launch: Vogue

Eight months after landing on fashion’s radar with a landmark Adidas collab, the Web3 investor and influencer known as Gmoney is ready to reveal his interpretation of luxury fashion fit for Web3.


Trending in The Defiant

🧑‍💻 ✍️ Stories in The Defiant are written by Owen Fernau, Aleksandar Gilbert, Claire Gu, Samuel Haig, Jason Levin, and yyctrader, and edited by Edward Robinson, yyctrader and 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 beinglt 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.



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