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🦄 Recap: DeFi Week of Oct. 23

Hello Defiers! Happy Weekend!

The world of Ethereum and its connected blockchain systems is complex and arcane, and it’s also filled with outsize personalities and loads of debate. For readers, this can be an intimidating and strange space to navigate. That’s why The Defiant has been devoted to providing a map through the ether with deeply reported and well-written stories that reveal and explain the mysteries of decentralized finance, in addition to our daily news coverage. 

As it happened, this week we produced quite a crop. For starters, check out Aleksandar Gilbert’s exclusive on L2 Beat’s scrutiny of Multichain. The bridging platform moved $80M worth of stablecoins around in unusual ways — an escrow account?— raising questions about the maneuvers in one of the most troubled segments in DeFi. 

Meantime, Owen Fernau cast his analytical eye on an important emerging trend in network design — modular blockchains. His deep dive on Celestia and its $55M fundraising round takes readers into a little understood facet of DeFi. And Tarang Khaitan reported the ins and outs of USDC’s $10B decline in market cap.

Don’t miss Sam Haig’s latest installment on the reorg drama at MakerDAO, the No. 1 DeFi protocol. Sam spoke with founder Rune Christensen about his Endgame plan to break up the project and the blowback from the DeFi community. For more on that topic, see Cami Russo’s Daily Defiant video on Maker on our YouTube channel

There was loads more: Owen Fernau’s thoughtful take on LooksRare’s controversial move to cut royalty fees for NFT creators; Sam Haig’s deeply reported story on zkSync’s highly anticipated V2 launch; and yyctrader’s smart take on the bullish turn in the markets this week.

What week would be complete with regulatory news? In the latest Defiant Podcast, Cami interviewed Gabriel Shapiro, general counsel at Delphi Labs. Never one to mince words, Shapiro talked about how the crackdown could make “100% of DeFi illegal.” Yikes. Important listening, to be sure…


⍺ DeFi Alpha Newsletter

DeFi Alpha is a weekly newsletter by The Defiant and DeFi Dad, packed with tutorials and tips on how to earn yield in DeFi. DeFi Alpha is exclusive to paid subscribers.

This Week:

Getting Started with NFTs on Cardano

Earn Passive Stablecoin Yield with OUSD + Curve

Yields: Up to 22% APY on Stablecoins, 12-21% on ETH and BTC

DeFi, NFT & Web3 Insights – The Defiant
⍺ DeFi Alpha: Getting Started with NFTs on Cardano
Yields: Up to 22% APY on Stablecoins, 12-21% on ETH and BTC DeFi Alpha is a weekly newsletter published for our premium subscribers every Friday, contributed by Defiant Advisor and DeFi investor at 4RC, DeFi Dad, and our Degen in Chief yyctrader. It aims to educate traders, investors, and newcomers about investment opportunities in decentralized finance, as well as provide primers and guides about its emerging platforms…
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🎙️Delphi Labs’ Gabriel Shapiro on How 100% of DeFi Could Become Illegal

This week on The Defiant Podcast we speak with Gabriel Shapiro, general counsel at Delphi Labs and a member of the LeXpunK group of crypto lawyers. He’s regarded as one of the most prominent voices on regulation in the crypto space, which has lately been a major point of discussion.

Recent developments include the latest draft of the DCCPA bill, Sam Bankman Fried’s industry standards proposal, the CFTC charging Ooki DAO, and the Tornado Cash sanctions. We begin our conversation with Gabriel sharing his thoughts on the current state of the crypto regulatory landscape in the U.S. 

There are currently seven government bodies that govern crypto in the US. These are the SEC, CFTC, CFPB, IRS, FinCEN, OFAC, and Congress. We discuss how setting an overarching framework within which these bodies can operate could prevent them from regulating their own corners of the market.

In comparison to other DeFi projects that offer similar services, Ooki DAO is a relatively small player. With the CFTC coming after Ooki DAO, we explore the potential implications for the biggest players in the space like Aave and Compound.

FTX CEO Sam Bankman-Fried recently published a proposal detailing his beliefs on crypto regulation, which drew widespread criticism from the community. He proposed that every crypto transaction should comply with OFAC sanctions, and also that DeFi protocols and frontends should be considered separately where smart contracts can be deemed permissionless but frontends should register as brokers. Gabriel shares his thoughts on SBF’s proposal.

Defiant Video

📺 Daily Defiant: Did Multichain Use Millions in User Funds Without Permission?

📺 Daily Defiant: MakerDAO Just Voted on Plan That Changes Everything

📺 Daily Defiant: Everything you need to know about Reddit Avatar NFTs

📺 Daily Defiant: INTERPOL is training officers to fight crime in the metaverse

📺 Weekly Recap: SBF’s Regulation Proposal, ETH Goes Deflationary, Controversial Aptos Launch, Vitalik’s THE Protocol

Exclusive Report

🤨 Multichain Questioned About Management of Millions in User Funds

Bridging Platform’s Use of Escrow Accounts Come Under Scrutiny

Aleksandar Gilbert breaks news on the latest snafu to strike the bridging space.

Multichain, a bridging platform with $1B in total value locked, has transferred almost $80M in stablecoins and 300 Bitcoin in unusual moves that bear scrutiny, according to L2 Beat, a research project that analyzes the Layer 2 blockchain space.

Multichain transferred millions in user funds from escrow to provide liquidity elsewhere in its network, said L2 Beat, which is raising questions about the purpose of the transfers. The moves and L2’s scrutiny have not been reported before.


Emerging Trend

⚙️ Celestia’s ‘Modular Blockchain’ Attracts Investors Looking for Scaling Breakthrough

Warm Reception to Network Design Contrasts With Aptos Rollout

Owen Fernau delves into the vital yet little understood world of blockchain design in this report…

Last week, a blockchain called Aptos launched its mainnet only to be slapped with withering criticism from a crypto crowd jaded by promises of decentralization for the masses. 

Two days later, a similar project called Celestia announced a $55M raise to noticeably less groaning and even a solid dose of enthusiasm. 

The key difference: Celestia uses a newish design called “modular blockchain architecture” while Aptos is considered a “monolithic blockchain.” Investors and devs appear to be far more excited about the former rather than the latter. 


MakerDAO Drama

🔥 Christensen Under Fire After MakerDAO Members Vote for His Reorganization Plan

Christensen Tells The Defiant the Endgame Plan Will ‘Overcome Fundamental Challenge’

In which Samuel Haig reports the latest developments in the rerog of DeFi’s No. 1 protocol…

Rune Christensen has won. But now the real contest begins. That’s the upshot of a just-closed vote taken by MakerDAO members and the backlash to its implications in the DeFi community.

The members of DeFi No. 1 protocol voted overwhelmingly in favor of making big changes to the project’s structure in line with the Endgame roadmap laid out by Christensen, MakerDAO’s founder, in May.


Deep Dive

🚀 zkSync Launches ‘Baby Alpha’ V2 as Skeptics Decry Marketing Hype

Matter Labs Says Network is First ‘Product Ready’ Rollup with ZK-powered EVM

Samuel Haig investigates the controversial rollout of the highly-anticipated iteration.

Matter Labs deployed zkSync 2.0 to the mainnet on Friday but skeptics questioned whether the iteration was ready for prime time. For weeks, Matter Labs has been promoting the Layer 2 blockchain network V2 as the first ever “product-ready” rollup with a zero-knowledge-powered Ethereum Virtual Machine. But not everyone is convinced by zkSync 2.0’s claim to have launched the first ever production-ready ZK-EVM rollups. 



🧐 Crypto Offers Plenty For the Political Right and the Left

Bitcoin Originated as Libertarian Cause But the Left Should Also Embrace the Asset

Guest writer Will Szamosszegi says surprising developments are making crypto more appealing across the divide.

For its first decade of existence, Bitcoin was largely associated with the libertarian values of freedom from state control. The digital store-of-value was born out of an online community of cypherpunks, a group of idealistic computer scientists and cryptography enthusiasts. They sought to create an internet-native currency as a means of avoiding government censorship and control within the burgeoning world of cyberspace. 



Deep Dive
NFT Roundup


Defiant Explainers
  • What Is Phantom? Phantom is the main digital wallet for the Solana blockchain. An Ethereum rival, Solana offers faster transaction speeds and more affordable transfer fees. 


DeFi Explainers
  • What Is 0x Protocol? Ethereum is positioning itself as the open-source infrastructure for digital assets. Smart contracts that automate loans, NFT trading, play-to-earn games, exchanges are just some of the offerings designed to transform traditional finance into decentralized finance (DeFi).


Regulatory Report
NFT News
DeFi Explainers
  • What Is Stacks? Bitcoin provides a global, decentralized payment network. It’s also a virtual wealth vault. But what if Bitcoin could become an ecosystem of dApps equivalent to Ethereum? Is that possible? Stacks aims to do that.

💜Community Love💜

Thanking all the amazing Defiers for the support and love this week (and always)!

🧑‍💻 ✍️ 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 Alp Gasimov. Podcast was led by Camila, edited by Alp.

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