Hello Defiers!
Donât look. Just donât look. Pretend the crypto market simply doesnât exist for a spell. Itâs on hiatus. Thatâs the only sensible thing to do at a time when token prices â and numerous other assets â 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 â itâs booming thanks to hot new collections such as the ABC NFT Collection. In this weekâs 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 â 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 CFTCâs case against a crypto derivatives platform lit a fire under Washington crypto folk such as Jake Chervinsky, and one of the agencyâs 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 Schmidtâs latest post-Merge segments on The Defiantâs YouTube channel. His Tuesday Tutorial on how to earn during the bear market is pretty awesome.
Enjoy!
âș 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: Earn NFTs By Completing Quests On Optimism
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Podcast
đ 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
đș The Open Metaverse Show: Vector Meldrew comes out swinging with Broadside
đș Tuesday Tutorial: Earn During The Bear
đș Quick Take: Merge Completed – What’s Next?
đș The Open Metaverse Show: Josie Bellini is the queen of the Metaverse
DeFi Dive
â Proof of Work Mining Craters After Ethereumâs Merge
Ethereum Miners Struggle to Find Their Footing After The Merge
Samuel Haig digs deep into the The Mergeâs impact on the PoW community in this Defiant Premium storyâŠ
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
đ 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 SECâs approach to Proof of Stake networksâŠ
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.
đREAD THE FULL STORY IN THE DEFIANT.IOđ
NFT Dive
đ 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 Ethereumâs high transaction costs and slow speeds, Solana has been having a moment.
đREAD THE FULL STORY IN THE DEFIANT.IOđ
Ghost in the Machine
âœïž 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 donât even know itâs happening. Itâs an unseen force, quietly and steadily siphoning money out of the marketplace and leaving unwitting Ethereum users none the wiser.
MEV Itâs called Maximal Extractable Value, and itâs costing the average Ethereum user $1,200 over the last 21 months, according to data from Flashbots, a research project dedicated to solving the âMEV crisis.â
To read the full story subscribe to The Defiant newsletter.
Friday
News
- CFTC Action Against DAO Outrages Crypto and One of Its Own Commissioners In a case that has roiled the crypto community and triggered a dissent from one its own officials, the U.S. Commodity Futures Trading Commission (CFTC) brought an enforcement action yesterday that challenges fundamental tenets of decentralized finance.
- Korean Crypto Bank Inks Deal to Offer Ethereum Staking to Investors In a deal that indicated Ethereum staking may rapidly industrialize, Delio Bank, South Koreaâs largest Virtual Asset Service Provider, teamed up on Sept. 22 with blockchain infrastructure firm, Blackdaemon, to offer the service to retail users.
- Cardano Deploys âVasilâ Upgrade Cardano, the worldâs fifth-largest blockchain with a market capitalization of $15B, successfully deployed a highly-anticipated upgrade Thursday that aims to improve smart contract performance and network throughput.
đ Defiant Premium Story for Paid Subscribers
- SushiSwapâs Search for âHead Chefâ Expands to Five Amid Restructuring And then there were five. In what began as a straightforward process to name a new âhead chefâ 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 worldâs population watched the 2018 FIFA World Cup, and with the 2022 edition in Qatar just two months away, footballâs governing body is throwing NFTs into the mix.
DeFi Research
- Exploring Ethereumâs On-Chain Activity After The Merge On September 15, 2022 Ethereum completed its transition to Proof of Stake consensus from the Proof of Work.
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
- âSmart Moneyâ Plows $33M into Staked ETH Tokens After Merge Almost six months after it first âde-peggedâ from Ether, investors have flocked to Lidoâs stETH token, pushing it back up to par with the second-largest cryptocurrency.
- On-Chain Action Disappears on Terraâs Luna Classic Token On-chain activity appears to have dried up on the Luna Classic, the network token of the failed and abandoned Terra chain, after it imposed a 1.2% tax on transactions that is burned from supply.
- Boba Network Becomes the First Layer 2 to Launch on Avalanche Boba Network, a Layer 2 chain leveraging Optimistic rollups, is the first L2 to launch on Avalanche, a Layer 1 smart contract network.
Markets
- Crypto Markets Dive After Another Rate Hike From The Fed Global markets took a beating after the U.S. Federal Reserve announced a 0.75% interest rate hike on Sept. 21.
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
- Wintermute DeFi Operations Hacked for $160M Crypto market maker Wintermute has lost $160M in a hack that targeted its DeFi operations early Tuesday.
- OpenSea To Support Arbitrum NFTs
Crypto Regulation
- U.S. Legislation Would Ban Algo Stablecoins for Two Years: Report Influential members of the U.S. Congress appear to be working on legislation that would temporarily ban certain types of algorithmic stablecoins, according to a Sept. 21 report from Bloomberg News.
- Balina Decries âBad Precedentâ After SEC Sues Influencer Anyone who doubted the U.S. Securities and Exchange Commission isnât serious about expanding its scope across crypto might want to check out a lawsuit the agency filed this week.
đ Defiant Premium Story for Paid Subscribers
- Little Understood Trading Stratagem Quietly Siphons Money from Ethereum Users Most crypto users donât even know itâs happening. Itâs an unseen force, quietly and steadily siphoning money out of the marketplace and leaving unwitting Ethereum users none the wiser.
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
- Gensler Rattles DeFi With Suggestion PoS Coins are Securities 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.
- ENS Regains Control Of eth.link Domain Ethereum Name Service (ENS) has regained control of the eth.link domain, according to the projectâs Twitter account.
- Cosmosâ ATOM Bucks Broader Bearish Trend Even as the price of Ether has sunk this week despite a successful Merge, another blockchain ecosystem is on the rise.
Markets
- âMassive Dumpingâ by Ethereum Miners Punishes ETH Ever since The Merge took place on Sept. 15 investors have looked on in dismay as Ether lost a fifth of its value over the next four days. What was going on?
The Merge
- Ether Not Quite âUltrasoundâ Money As Inflation Persists Proponents hoping to immediately proclaim Ether to be an âultra soundâ form of money canât celebrate just yet.
đ Defiant Premium Story for Paid Subscribers
- Proof of Work Mining Craters After Ethereumâs 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 â 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.
đCommunity Loveđ
Thanking all the amazing Defiers for the support and love this week (and always)!
Had such a great time talking with @CamiRusso, @humancapitol, @jensenhaji, and @ericksoncc at our event last night: âReal World, On-Chain: Cocktails & Conversationsâ! with @centrifuge
thank you everyone who came out! pic.twitter.com/5Z77FzvQIk
— lucasvo ê© (@lucasvo) September 22, 2022
đ§âđ» âïž 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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