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🔥 On Eve of The Merge Skeptics and Supporters Gird for Raft of Changes

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DeFi Explainers
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The Merge

🔥 On Eve of The Merge Skeptics and Supporters Gird for Raft of Changes

Shift to PoS Will Reduce ETH Issuance and Impact Staking Yields

By Owen Fernau

MOMENT The moment has finally arrived. Ethereum is poised to execute the most historic upgrade in its eight-year history. And the DeFi community is giddy with anticipation that the shift to Proof-of-Stake consensus will revitalize the blockchain network’s usefulness and value. Richard Craib’s response? Meh. 


After The Merge

🏷 ETH Fire Sale Unlikely After Shanghai Upgrade: Nansen

More Than 70% Of Stakers Are Currently Nursing Losses

By Aleksandar Gilbert  

UPGRADE Unless The Merge sends Ether to the moon, Ethereum die-hards shouldn’t fear a fire sale when the post-Merge “Shanghai” upgrade takes effect next year, according to a new report from crypto analytics firm Nansen.


Sponsored Post

Trailing Stop now available to MakerDAO and Liquity users

Fans of Maker and Liquity protocols can now rely on the advanced trailing stop strategy for managing their DeFi positions using DeFi Saver, an all-in-one dashboard for sophisticated DeFi management. 

A trailing stop is a dynamic type strategy that allows users to configure a percentage drop from peak market value that would trigger the full closing of a position once reached. While with a standard Stop loss, a position would get closed at a fixed price, a Trailing stop actively follows any upward market movements by the set percentage, instead continuously increasing the stop price.

The new strategy is another in the series of automated trading strategies introduced to MakerDAO and Liquity by DeFi Saver, following Stop loss and Take Profit. Setting up is straightforward. Existing Maker and Liquity users need to visit DeFi Saver and switch to the Automate tab in the dedicated protocol dashboard. Users just need to input the percentage that they want the stop price to be below the reached market peak and to select the asset to which they want their position to be closed (e.g. collateral asset or debt asset).

A trailing stop is a great method to reduce losses or lock in profits. For example, when one is using these lending protocols to go long on ETH. It’s recommended to combine a trailing stop with a standard stop loss to further minimize potential losses in case of a market downturn. Users can find both of these options available in the dedicated protocol dashboards within the DeFi Saver app.

Check out the new Trailing Stop automation for Maker and Liquity by DeFi Saver.

Market Action

🔆 Ether and PoW Coins Outshine Rivals as Merge Looms

Terra’s LUNA Is Up 130% In A Week

By Samuel Haig

GAINS Ethereum is outperforming most leading digital assets as the Merge rapidly approaches, with ETH last changing hands for $1,700 — a 14% gain since Sep. 7.


DeFi Lending

😲 MakerDAO Users To Mint DAI for Free After Debt Ceiling Rises

DeFi Lender’s Move Punctuates Overhaul of Model

By Samuel Haig

DEBT CEILING MakerDAO’s users can now mint DAI for free. A recent MakerDAO executive vote raised the debt ceiling for its stETH vault to 200M DAI. Maker’s Wrapped stETH vault currently maintains a 0% stability fee, meaning users can create DAI against WstETH collateral without paying any fees on the position to Maker.


Defiant Video

📺 Quick Take: The Final Merge Video Before The Merge

DeFi Explainers

💵 What Is Tether?

A Step-by-Step Guide to the No. 1 Stablecoin in Crypto

By Rahul Nambiampurath

STABILITY Tether (USDT) offers the familiarity and stability of the dollar, but in digital form, moving across blockchain networks. As one of the first stablecoins of its kind, Tether is the No. 1 stablecoin by market capitalization.



🔗 The Merge: Anthony Sassano explains why Ethereum’s ‘final boss’ is still the nation state

The Block sat down with EthHub’s Anthony Sassano to discuss Ethereum’s ‘social layer’ and its biggest challenges going forward. 

🔗 Abra to Launch US Chartered Bank, Crypto Yield Accounts: Decrypt

Abra, a financial services company and crypto trading firm, announced the launch of three new products: Abra Bank, Abra International, and Abra Boost. 

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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Defiant Premium Story for Paid Subscribers

👀 Maple Revives Crypto Lending With $40M Deal

Months After Three Arrows Meltdown Unsecured Lending Returns

By Samuel Haig

HEATING UP Just months after the crypto loan sector cratered, unsecured lending appears to be heating back up. On Sep. 9, Wintermute, a crypto market making company, took out an uncollateralized 40M USDC loan via Maple Finance, a company impacted by the drama that threatened the sector earlier this year.

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The Wintermute loan is the largest made on Maple since the platform launched in May 2021. “Access to uncollateralized capital is critical for market makers to continue providing healthy liquidity in any market conditions,” Wintermute tweeted

The loan was financed by Maven 11 Capital, a digital asset investment firm.

Tough Year

The increased activity shows how investors’ appetite for uncollateralized loans in the crypto sector is on the rise even as the market weathers a tough year. In July, Maple founder Sidney Powell reported that new loan activity had slowed amid the credit crisis wracking many centralized crypto lenders. 

Maple was an early mover that enabled firms to operate uncollateralized lending pools. The platform has originated $1.7B worth of loans since its launch in May 2021, according to its website.

Wintermute’s record loan follows an impressive August performance for Maven 11. The firm launched its third pool on Maple last month, with the $40M pool attracting borrowing from crypto trading firms Wintermute and Auros. 

Poignant Trend

The publicly traded Dutch market maker, Flow Traders, also borrowed 16M USDC from the pool on Aug. 12 in the company’s first reported foray into DeFi. Flow Traders borrowed an additional 8.7M USDC on Sep. 12.

The trend is poignant given the meltdowns that rocked crypto in the spring. 

The collapse of Terra and its UST stablecoin in May triggered a domino effect and poleaxed some big firms. Three Arrows Capital, a venture capital firm with $10B in assets, went bankrupt the following month after defaulting on unsecured loans. It had aggressively leveraged its portfolio including big bets on Terra.

Three Arrows’ Debts

Three Arrows’ debts included a $75M loan from the ten-figure centralized lender, Celsius, which suspended withdrawals in June. Celsius filed for bankruptcy in July, revealing a $1.2B hole in its balance sheet. Three Arrows also borrowed $700M from Voyager Digital, the Canadian crypto exchange, which filed for bankruptcy in early July.

Lenders operating on Maple were caught in the cross-fire. Celsius launched a lending pool offering $30M worth of Wrapped Ether on Maple in February. 

Outstanding Loans

Celsius asked Maple to help them retrieve the outstanding loans in July, but Maple informed the company it needed to speak to its borrowers directly to organize an early release of the funds — several of which refused the request.

In July, Orthogonal Trading also liquidated a $10M loan position taken out via Maple by Babel Finance, a centralized platform that suspended customer withdrawals during the previous month. Orthogonal recovered $7.8M, resulting in a loss to lenders of about 3.2%.



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