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🦄 Recap: DeFi Week of Sept. 18

Hello Defiers! 

Don’t look. Just don’t look. Pretend the crypto market simply doesn’t exist for a spell. It’s on hiatus. That’s the only sensible thing to do at a time when token prices — and numerous other assets — are cratering in the most challenging macroeconomic environment in generations. 

If you must look, check out our market analysis this week: Aleksandar Gilbert reported on how the smart money is piling into staked ETH, and Sam Haig wrote on how PoW miners are dumping ETH and impacting the market.

The good news is that there is plenty of scintillating action taking place across DeFi, and our writers were all over it this week. Aleks Gilbert covered the surprising performance of Solana in attracting new NFT projects — it’s booming thanks to hot new collections such as the ABC NFT Collection. In this week’s podcast, Camila Russo spoke with another Defier who is putting his head down in these challenging times and working hard: Robert Lauko, the founder and head of research at Liquity, a DeFi lending protocol. 

And Sam Haig reported the latest twist in the SushiSwap search for a new head chef — there are now five candidates. Sam also revealed how the DAO is poised to add new multisig signers and is laboring to establish its legal foundation, a thorny problem vexing many cooperative crypto organizations. 

Meanwhile, Owen Fernau covered the other major challenge for crypto: regulation. The CFTC’s case against a crypto derivatives platform lit a fire under Washington crypto folk such as Jake Chervinsky, and one of the agency’s own commissioners who filed a withering dissent. The battle lines are drawn and the action is getting heavier in DC. 

And make sure to check out Robin Schmidt’s latest post-Merge segments on The Defiant’s YouTube channel. His Tuesday Tutorial on how to earn during the bear market is pretty awesome. 

Enjoy!


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This Week: Earn NFTs By Completing Quests On Optimism

DeFi, NFT & Web3 Insights – The Defiant
⍺ DeFi Alpha: Earn NFTs By Completing Quests On Optimism
Yields: Up to 25% APR on Stablecoins, 7-10% on ETH and BTC Tutorial: Earn NFTs By Completing Quests On Optimism DeFi Alpha is a weekly newsletter published for our premium subscribers every Friday, contributed by Defiant Advisor and DeFi investor at…
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Podcast

🎙 Listen to the Exclusive Interview with Robert Lauko

This week on The Defiant Podcast we speak with Robert Lauko, founder & head of research at Liquity, an overcollateralized DeFi lending protocol and issuer of the LUSD stablecoin.  

Following the fallout from CeFi services such as Voyager, BlockFi, and Celsius, the focus has shifted back to the core values of decentralization, which Liquity tries to apply to the fullest: LUSD is backed purely by Ether and Liquity is governance-free and has no centralized frontend.

What makes Liquity a unique lending protocol is that depositors earn interest from liquidations as opposed to borrowing fees that we usually see in other protocols, such as Maker.   We discuss the incentive mechanisms Liquity employs to maintain this model.

In DeFi, the code that makes projects work is deployed on public blockchains that can’t be stopped or censored.   This is a crucial component of decentralization.   Conversely, the websites that provide an interface to the smart contracts are mostly centralized and only a handful of projects have decentralized frontends. Lauko explains why Liquity chose this route from the outset.

Crypto mixer Tornado Cash was recently sanctioned by the US Department of the Treasury together with addresses that interacted with the protocol.   This prompted other DeFi protocols such as Aave and dYdX to blacklist those addresses in a bid to minimize legal risk.  Robert discusses how DeFi projects can deal with censorship.


Defiant Video

📺 The Open Metaverse Show: Vector Meldrew comes out swinging with Broadside

📺 Tuesday Tutorial: Earn During The Bear

📺 Quick Take: Merge Completed – What’s Next?

📺 The Open Metaverse Show: Josie Bellini is the queen of the Metaverse


DeFi Dive

Proof of Work Mining Craters After Ethereum’s Merge

Ethereum Miners Struggle to Find Their Footing After The Merge

Samuel Haig digs deep into the The Merge’s impact on the PoW community in this Defiant Premium story…

FALLOUT The fallout from The Merge for Proof of Work mining outfits has been swift and profound. As expected, many former Ethereum miners appear to be shutting down their hardware following the execution of its historic upgrade last Thursday. 

To read the full story subscribe to The Defiant newsletter.


Regulation Report

🏛 Gensler Rattles DeFi With Suggestion PoS Coins are Securities

Crypto Supporters Decry Move to Treat Ethereum Same as Stocks and Bonds

In which Aleksandar Gilbert analyzes the regulatory and legal effects of the SEC’s approach to Proof of Stake networks…

BATTLE The Merge may be complete, but the battle for legally defining Ethereum 2.0 is just beginning. Hours after Ethereum completed its historic transition to Proof of Stake technology, a top U.S. regulator said cryptocurrencies that use this approach should probably be defined as securities. 

👉READ THE FULL STORY IN THE DEFIANT.IO👈


NFT Dive

📈 NFT Volumes Surge on Solana

Transactions Crossed 1M For The First Time This Month

Aleksandar Gilbert chronicles the surprising performance of Solana in the NFT space.

ALL-TIME HIGH NFT transactions on the Solana network are at an all-time high, surpassing 1M in the week ending Sept. 12 for the first time ever and 900,000 in the week ending Sept. 19. A blockchain created to address Ethereum’s high transaction costs and slow speeds, Solana has been having a moment.

👉READ THE FULL STORY IN THE DEFIANT.IO👈


Ghost in the Machine

⛽️ Little Understood Trading Stratagem Quietly Siphons Money from Ethereum Users

MEV Bolsters Validator Rewards and Poised to Grow Post-Merge

In this Defiant Premium special report, Samuel Haig explores the arcane world of MEV and its impact on Ethereum blockchain mechanics and ETH trading.

UNSEEN FORCE Most crypto users don’t even know it’s happening. It’s an unseen force, quietly and steadily siphoning money out of the marketplace and leaving unwitting Ethereum users none the wiser. 

MEV It’s called Maximal Extractable Value, and it’s costing the average Ethereum user $1,200 over the last 21 months, according to data from Flashbots, a research project dedicated to solving the “MEV crisis.”

To read the full story subscribe to The Defiant newsletter.


Friday

News
👀 Defiant Premium Story for Paid Subscribers
  • SushiSwap’s Search for ‘Head Chef’ Expands to Five Amid Restructuring And then there were five. In what began as a straightforward process to name a new “head chef” of its venture, SushiSwap, the troubled decentralized crypto exchange, has now launched a five-way contest for the job. And Jonathan Howard, the sole candidate just a couple of months ago, is no longer in the running. 
NFT News
  • NFT Volumes Surge on Solana NFT transactions on the Solana network are at an all-time high, surpassing 1M in the week ending Sept. 12 for the first time ever and 900,000 in the week ending Sept. 19.  
  • FIFA Releases Genesis NFTs on Eve of World Cup More than half the world’s population watched the 2018 FIFA World Cup, and with the 2022 edition in Qatar just two months away, football’s governing body is throwing NFTs into the mix.
DeFi Research
DeFi Beginners
  • What Is Avalanche? Avalanche is a third-generation Proof-of-Stake blockchain network. Unlike Ethereum, which relies on Layer 2 scalability networks to increase traffic capacity, Avalanche relies on its main chain for scalability. 

Thursday

News
Markets
DeFi Beginners
  • What Is Yearn Finance? Yearn Finance played a leading role in the decentralized finance (DeFi) boom in the summer of 2020. Running on Ethereum blockchain, Yearn Finance deployed smart contracts to maximize yields on deposits and generate high interest rates.

Wednesday

News
Crypto Regulation
👀 Defiant Premium Story for Paid Subscribers
DeFi Explainers
  • What Is Maker? Maker, a crypto lender, is one of the pioneers of decentralized finance (DeFi), Maker uses smart contracts on the Ethereum blockchain to make loans based on DAI, a stablecoin. 

Tuesday

News
Markets
The Merge
👀 Defiant Premium Story for Paid Subscribers
  • Proof of Work Mining Craters After Ethereum’s Merge The fallout from The Merge for Proof of Work mining outfits has been swift and profound. As expected, many former Ethereum miners appear to be shutting down their hardware following the execution of its historic upgrade last Thursday. 
DeFi Explainers
  • What Is Synthetix? Synthetix operates in one of the riskiest markets in finance — crypto derivatives. These are financial instruments that even professionals find difficult to manage and may punish ill-prepared retail investors. In some nations such as the U.K., regulators have prohibited the sale of crypto derivatives to retail investors. 

💜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 Robin Schmidt and Alp Gasimov. Podcast was led by Camila, edited by Alp.


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