Weekly DeFi/NFT News — October 18, 2021

Weekly DeFi/NFT news is a collection of major weekly events/announcements brought from the most trustworthy data sources, such as The Defiant, Spencer Noon, Week in Ethereum News etc. with comments and extra insight from the Bulldax DeFi labs.

Yearn Finance finally goes multichain — Spenser Noon

• Yearn’s TVL has crossed all time highs, surpassing $5.3 billion. Yearn is currently in the early stages of a multichain push.
• To date, Yearn has launched Vaults and a native Iron Bank on Fantom amassing $63 million in TVL.
• Yearn has signaled future expansion desires onto Arbitrum, Optimism, Polygon, Avalanche and others, and is close to launching Yearn v3, a revamped UI with user experience and the multichain future in mind.

• Cumulative protocol revenue has surpassed $44.5 million. Total protocol revenue in Q3 2021 was $15.2 million, down slightly from $18.4 million in the previous quarter. However, Q3 2021 revenue was still up significantly from $5.5 million in Q1 2021 and over 470% YoY.

The Curve stETH vault has emerged as Yearn’s most popular vault measured by TVL, growing ~10x in Q3’21 to over $788m in TVL today. The Curve stETH vault uses the Curve liquidity mining program to farm CRV, LDO, and trading fees, harvesting rewards into ETH and redepositing ETH/stETH into the vault.

Source: Spenser Noon newsletter Issue #93

Rari Capital Launches Permissionless Lending Pools to Become Uniswap of Lending — The DeFiant

• The new feature allows anyone to create a lending and borrowing pool on the open interest rate protocol, meaning anyone can create a pool for any asset, thereby expanding DeFi possibilities.
• The NFTx project (for NFT fractionalization and trading) deployed a Fuse pool which includes PUNK; PUNK representing a CryptoPunk deposited in NFTX. This opens up the ability for users to now effectively borrow against one of the most valuable NFTs.

• For permissionless pools, creation is open to anyone. No need for a governance vote.
• The permissionless pools are part of the project’s aim to become the Uniswap of lending, Jack Lipstone, co-founder at Rari Capital, told The Defiant. “Uniswap allows anyone to go trade whatever token is out there. Now Fuse allows you to deploy your own lending and borrowing market,” he said.
• Rari provides an automated risk score for the pools and almost all of the permissionless ones are rated “UNSAFE” or “F”.
• With the new feature, much like individuals taking out collateralized loans on Maker in order to maintain exposure to an asset, a project could do the same with a customized basket of tokens. For example Rari could deposit its RGT tokens into a custom pool, as Compound and Aave don’t accept RGT as collateral, and borrow against them, betting that RGT will increase in value in the meantime.
• Permissionless pools also have a whitelist functionality. If a pool’s creator needs to know its counterparty, they can do so by limiting access to the pool based on wallet addresses.

Source: https://thedefiant.io/rari-capital-the-defi-protocol-created-by-teenagers-has-shipped-perhaps-its-biggest-product-to-date-permissionless-lending-pools/

OpenSea delists DAO Turtles project citing financialization concerns — The Block

• OpenSea has suspended trading in a pixelated turtle project claiming it broke rules related to carrying out financial activities.

• The collection of 10,000 DAO Turtles dropped on October 4 and has since recorded trading volume on OpenSea of more than 570 ether (roughly $2 million).

• An employee of the company wrote that DAO Turtles had violated its terms of service, clarifying that it is forbidden to use OpenSea to “carry out any financial activities subject to registration or licensing, including but not limited to creating, listing, or buying securities, commodities, options, real estate, or debt instruments,” or for fundraising for a business or protocol via an array of methods including Initial Coin Offerings.
• The team has now altered language on its website that had promised to pay a percentage of future NFT projects to DAO Turtle owners. It still promises to give each NFT holder a “Turtleshell token,” and to incentivize users in a “non-commercial manner” to quiet concerns about securities rules.
• Since the DAO Turtle ban, Twitter users have pointed out that other big-name NFT projects would also appear to be in breach of OpenSea’s rules.
• Concerns about the attachment of NFTs to financial products has led some to suggest that they could come to be viewed as securities.

Source: https://www.theblockcrypto.com/post/120022/opensea-delists-dao-turtles-project-citing-financialization-concerns

Divergence Ventures Returns 702 ETH to Ribbon Finance After Gaming Airdrop — The Defiant

• DeFi venture fund Divergence Ventures tried to game the airdrop of Ribbon Finance, one of its own portfolio companies, and it worked — but it’s returning the tokens.
• The fund, which put $25,000 into Ribbon Finance, returned 702 ETH today after extracting as much from the protocol’s airdrop.

• “One of the goals of Divergence Ventures is to make money. Making money in crypto is generally like playing a game,” the company wrote in the thread. “In playing this game, we try many tactics, all the time. Most fail. This one ‘worked,’ and obviously worked in a relatively big way.”
• The Divergence team used a fairly complex structure that ultimately airdropped 3% of its total RBN supply to 1620 addresses.
• Divergence said it had no insider information and simply guessed there would be an airdrop. While not explaining the precise operation, it admits to attempting to skew the outcome of the airdrop in its favor.

Source: https://thedefiant.io/ribbon-finance-divergence-airdrop/

CyberKongz’ 13,000x Leap Spurs ‘Own to Earn’ NFTs But Regulatory Scrutiny Looms- The Defiant

• Launched six months ago at 0.01 ETH ($40), the collection of 1,000 NFTs now boasts a floor price of 155 ETH ($535K), up an eye-popping 13,000x.
• Prices of Genesis CyberKongz surged after the launch of the project’s BANANA token, as each NFT earns 10 BANANAs per day. At current prices, that’s a daily yield of $750, or $270K annually.

• The primary use for BANANA tokens is breeding. By spending 600 BANANA tokens, two Genesis Kongz can be bred to yield a BabyKong and a VX Kong. These are larger NFT collections with current floor prices of 11 ETH and 1.6 ETH respectively.
• Similarly, Bored Ape Yacht Club (BAYC) has announced that it will issue a “legally compliant” token in the first quarter of 2022.

• The move is intended to “thoughtfully craft dope utility and governance, benefit our club members, and bring the BAYC ecosystem to a much wider audience.”
• As popular NFTs like Bored Apes surge in value — the cheapest Ape is currently listed for sale at 38 ETH, or $131K.

Source: https://thedefiant.io/cyberkongz-soaring-own-to-earn-nfts/

DeFi 2.0 Wave of New Projects Test Liquidity Mining Alternatives — The Defiant

• While DeFi 2.0’s meaning is still congealing, a core component of DeFi’s next evolution includes alternatives to a mainstay of DeFi 1.0: liquidity mining. Projects like OlympusDAO, Fei Protocol, and Alchemix, are all experimenting with new ways of capturing users with the new challenge of getting them to stay.

• The new crop of DeFi projects centers around the idea called protocol controlled liquidity (PCV). This entails projects acquiring funds to support their financial applications, rather than tapping users’ funds by enticing them with liquidity mining rewards.
• In a nutshell, liquidity mining involves protocols giving their native token to users in exchange for depositing assets that other users can borrow or trade.
• The problem is that protocols are watering down their token’s supply in exchange for capital deposits, which are often temporary. So people come in, lend their assets to the protocol while milking its rewards, then leave with both the assets and rewards, leaving the protocol high and dry.
• So what’s this got to do with DeFi 2.0? A swath of projects eschewing liquidity mining and experimenting with alternatives.
• OlympusDAO sells its token at a discount in exchange for tokens like DAI, but also liquidity provider (LP) tokens which include OHM. So for example, a user could trade their OHM-DAI LP token, which represents a liquidity position in the decentralized exchange Sushiswap, for OHM. Olympus calls this mechanism a bond, because the discount is paid out over five days.
• This system has allowed Olympus to own its own liquidity, a major difference from projects which watch liquidity fade away as rewards run out. OlympusDAO’s stats page says the protocol owns over 99% of the OHM-DAI liquidity.
• Olympus has another innovative mechanism — a staking function which pays users in additional OHM tokens in exchange for locking the token up. This counteracts the sell pressure which comes from users’ ability to get OHM at a discount with bonds. Staking is working — over 90% of OHM is staked today according to the project’s primary dashboard.

Source: https://thedefiant.io/olympusdao-uniswap-defi-2-0-liquidity-mining/