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⚔️ Avalanche Attorney Accused Of Using Lawsuits To Kneecap Rivals

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DeFi Disputes

⚔️ Avalanche Attorney Accused Of Using Lawsuits To Kneecap Rivals

AVAX Has Fallen 15% Since Friday

By Aleksandar Gilbert

LAWSUITS In a series of brief, undercover videos published on a little-known website Friday, lawyer Kyle Roche bragged of his close ties to the founder of the Avalanche blockchain and seemed to suggest he had filed frivolous lawsuits in a bid to weaken its competitors. 

DROPPING Avalanche’s native token, AVAX, has fared worse than other major cryptocurrencies over the weekend, dropping more than 15% since Friday, according to data from The Defiant Terminal. AVAX is one of the world’s 20 largest cryptocurrencies by market capitalization. 

HIT PIECE On Monday, Roche and Avalanche founder Emin Gün Sirer fired back. In a statement, Sirer called a report accompanying the videos a “scurrilous hit-piece” and said Roche had misrepresented his work for Ava Labs, the company behind Avalanche, in an attempt to “impress a potential business partner.”


DeFi Infrastructure

😳 Data Giant Shocks Ethereum With Ban on Mining

Hetzner’s Decision Spurs Debate About Decentralization of Crypto Infrastructure

By Owen Fernau

SERVER FARMS Struggles to decentralize have long shaped the development of smart contract and governance layers in the crypto ecosystem. Last week something else struck: Hetzner, the second largest hosting provider for Ethereum, clarified that crypto miners may not use its server farms to support the blockchain network, or any other crypto venture. 

MESSAGE “Using our products for any application related to mining, even remotely related, is not permitted,” Hetzner said in a message to its customers. It said both Proof-of-Stake and Proof-of-Work activities are prohibited. “Even if you run just one node, we consider it a violation of our [terms of service].” 

POWER The development highlighted the power of a centralized player in blockchain infrastructure. Hetzner, a 25-year-old company based in Gunzenhausen, Germany, is one of the biggest data center operators in Europe. It maintains hundreds of thousands of servers in Germany, Helsinki, and in Virginia in the U.S. 


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👾 Limit Break Raises $200M To Build Web3 Games

DigiDaigaku Floor Price Is Up 70% to 13 ETH

By Aleksandar Gilbert  

MASSIVE Limit Break, the company behind the DigiDaigaku NFT collection, has raised $200M over two funding rounds, it announced Monday. The funding, led by crypto venture capital firm Paradigm, will be used to build massive multiplayer online (MMO) web 3 videogames. 

FOUNDERS “After a decade of pushing ‘Free to Play’ games to their limits, our founders have spent the past year building Limit Break to replace F2P using Web 3. We call this new model ‘Free to Own,’” the company said in a series of tweets announcing the funding.

AIRDROPS “Free to Own (F2O) is built around free mints for Genesis NFTs. These Genesis NFTs lead to other NFTs through airdrops and more, none of which involve gimmicky fundraising tactics.”


DeFi Lending

🧐 Compound III Launches With Emphasis On Simplicity

New Iteration Introduces Segregated Base Assets

By Owen Fernau

VOTE One of DeFi’s oldest lending protocols has launched a major upgrade. Compound Finance, one of DeFi’s oldest lending protocols with $2.72B in total value locked (TVL), deployed Compound III on Aug. 25 following a successful governance vote.

BASE ASSET The biggest change in the new iteration of Compound is that instead of being able to borrow any asset from a pooled set of assets, users will only be able to borrow one “base asset.” 

DEPLOYMENT Compound III will not pay interest on deposited assets, save the base asset. In this initial deployment, USDC will be the base, or borrowable, asset. As of Aug. 26, the USDC deposit yield on Compound III is 2.32%, far higher than the 0.75% offered by Compound V2.

POOLED ASSETS Compound governance will decide on future deployments with different base and pooled assets, according to founder Robert Leshner’s post in the protocol’s Discord. 


Market Action

📉 Ether Dives 10% As Powell Signals More Rate Hikes To Come

Majority Of Investors Now Expect A 0.75% Increase In September

By Aleksandar Gilbert

TUMBLING Hinting at another sharp interest rate hike in September, Federal Reserve Chairman Jerome Powell sent crypto markets tumbling Friday. 

10% Ether has suffered the steepest decline among popular cryptocurrencies, having fallen more than 10% in the preceding 24 hours, according to data from The Defiant Terminal. Solana also dropped 10%, while Bitcoin, Cardano (ADA) and Binance (BNB) each fell 6%. 

INFLATION Data from July showed inflation easing somewhat in the United States. The closely-watched consumer price index was unchanged in July, and annual inflation dropped to 8.5% from 9.1% in June, which was a 40-year high. Nevertheless, one month’s good news was not sufficient to proclaim the Fed’s mission accomplished, Powell said during his brief but highly anticipated speech at Wyoming’s annual Jackson Hole symposium on Friday. 


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📺 Quick Take: Why crypto is getting smashed

DeFi Explainers

🏦 What Is Aave?

A Step-by-Step Guide to the DeFi Lender

By Rahul Nambiampurath

FANTASY Just a decade ago, the notion that one could borrow money without banks was in the realm of fantasy. After Bitcoin laid the groundwork for Ethereum and other smart contract platforms, this was no longer the case.

LENDING Fast forward to 2022, and we have Aave, an open-source lending service that anyone can use to become a lender or a borrower. In this Aave guide, you will understand how blockchain lending works, and how Aave has become a leading DeFi platform.

INSPIRED In 2017, Stani Kulechov quit his law degree and  founded a venture called ETHLend. The University of Helsinki graduate was inspired by Ethereum to create a peer-to-peer lending and borrowing platform. The next year, Kulechov rebranded ETHLend into Aave, and in January 2020 he launched the platform on the Ethereum mainnet. Since then, Aave has expanded to other blockchain networks, including Avalanche, Fantom, Harmony, Arbitrum, Polygon, and Optimism.



🔗 FBI Issues Warning Over Vulnerable DeFi Platforms: Decrypt

The Federal Bureau of Investigation issued a new warning Monday focused on attacks against decentralized finance (DeFi) platforms, saying that cybercriminals are exploiting vulnerabilities in the smart contracts that govern them.

🔗 Graysca Disclosing SEC Queries, Says Cryptos XLM, ZEC, ZEN May be Securities: CoinDesk

Grayscale Investments LLC has been fielding questions from the U.S. Securities and Exchange Commission (SEC) over the firm’s “securities law analysis” of tokens in some of its less-popular crypto trusts.

🔗 The Path of Compliance and the Path of Decentralization: Why Maker has no choice but to prepare to free float Dai: MakerDAO

Financial regulation trends towards a post-9/11 paradigm of “either you’re with us or you’re against us” with eventual zero tolerance for anything that doesn’t give full control and surveillance powers to the state.


Trending in The Defiant

🧑‍💻 ✍️ Stories in The Defiant are written by Owen Fernau, Aleksandar Gilbert, Samuel Haig, 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.

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🤖 Web3 Games Infested by 200,000 Bots: Report

Jigger Research Finds Bots Rife on Binance and Polygon

By Samuel Haig

NEWS Web3 games are teeming with bots, and many games residing on Binance are seriously compromised, according to research released on Aug. 30 by Jigger, a bot detection tool.

An analysis of more than 60 crypto-native games and services found that four out of 10 users were bots. There were a total of  200,000 bots in play in total, said Levan Kvirkvelia, the co-founder of Jigger. The analysis predominantly looked at projects hosted on Binance Chain, the third-largest smart contract network by total value locked of $5.42B, and found that bots have heavily penetrated its ecosystem.

Jigger said 70% of players on Tiny World, a top three-ranked game launched on Binance Chain with 35,000 monthly average users, were actually bots. Jigger also determined that 55% of accounts interacting with Mobox, a gamified yield farming and NFT platform with a monthly user base of 39,000, did not appear to be human.

Jigger said 70% of players on Tiny World, a top three-ranked game launched on Binance Chain with 35,000 monthly average users, were actually bots. Jigger also determined that 55% of accounts interacting with Mobox, a gamified yield farming and NFT platform with a monthly user base of 39,000, did not appear to be human.

The high rates of bot activity suggest that the rate of GameFi adoption could be lower than raw data suggests. It may also mean that a small number of sophisticated bot operators are scooping up the majority of the profits offered by many GameFi titles, potentially at the expense of users.

Many smaller games were found to be overrun by an even greater number of bots. AnRKeyX hosted extreme rates of bot activity, with 84% of the 9,763 wallets interacting with its token deemed to be bots. Nearly two-thirds of the 5,770 users interacting with the token of Decentral Games, a virtual gaming project backed by Binance Chain’s accelerator program, were found to be bots. 

Chain Hosting

Other protocols were also heavily populated by bots. The introduction of a referral program on the Biswap decentralized exchange was attributed to a third of its 36,301 tokenholders appearing to comprise bots. Half of the 13,305 tokenholders for Seedify Fund, a gamefi incubator and launchpad, also demonstrated bot-like behavior.

Binance is not the only chain hosting a high number of bots, with Polygon-based games also exhibiting significant bot activity, Jigger found.

Clusters of Wallets

A third of the 5,654 accounts interacting with Aavegotchi’s GHST Token on Polygon were flagged as bots, half of the 7,116 users interacting with Sunflower Land appeared not to be human players, and a whopping 96% of the 11,529 wallets interacting with Karmaverse Zombie Serum were labeled as bots.

The Jigger tool works by linking clusters of wallets believed to be operated by a single entity. Jigger analyzed wallets interacting with the native tokens of various web3 games over the past 60 days to determine the scale of botting activity present on each platform.

Representatives from Binance and Polygon did not respond to requests for comment.



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