Weekly DeFi/NFT News — January 3, 2022

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.

What is the Curve War?

• Curve is a decentralized exchange designed to provide the best possible rates for users who are trading stablecoins. Curve uses various liquidity pools to make trading efficient. Just like most decentralized finance protocols, Curve also has a native token known as $CRV.
• The Curve war can be described as the race between various protocols that are continuously trying to ensure that their preferred pools are offering the highest $CRV rewards (‘bribes’).

https://medium.com/momentum6/the-great-curve-war-is-heating-up-dont-miss-the-alpha-9b70d99cf694#:~:text=What%20is%20the%20Curve%20War,rewards%20('bribes').

• The biggest competitors that are wooing Curve token holders to lock their $CRV with them include StakeDAOHQ, ConvexFinance, and YearnFinance.
• Users who lock $CRV into veCRV are getting huge farming incentives in the form of $CVX, $SUSHI, and $SDT. Convex owns over 51% of the circulating supply of CRV.
• Additionally, users who lock up Curve receive trading fees from the automated market maker, governance rights, and boosted rewards.
• Further reading: https://theknower.substack.com/p/the-curve-wars-rage-on

Sources: 1. https://medium.com/momentum6/the-great-curve-war-is-heating-up-dont-miss-the-alpha-9b70d99cf694

2. https://theknower.substack.com/p/the-curve-wars-rage-on

What is Ribbon finance?

• Ribbon Finance is a new protocol that helps users access crypto structured products for DeFi. It combines options, futures, and fixed income to improve a portfolio’s risk-return profile.
• It’s core protocols include “Theta Vault, which is a yield-focused strategy on ETH and WBTC. The vault earns yield on its deposits by running a weekly automated options selling strategy. The vault reinvests the yield earned back into the strategy, effectively compounding the yields for depositors over time.
• The Theta Vaults run two options strategies to generate yields:
  1. Covered call — Vault writes out of the money covered calls.
  2. Put selling — Vault writes out of the money puts.
• Current APY for stETH (staked ETH on Lido finance) is 12% and for wBTC it is 13.57%.

• Theta Vaults use the Vault terminology because it stems from the idea of depositing your assets into a vault and earning a yield on them, set-and-forget.
• Users can simply deposit their assets into a smart contract and will automatically start running a specific options strategy. This alleviates a majority of the gas problems by socializing the gas costs across all the vault depositors. Instead of doing 3–4 transactions per week per user, the vault will do 3–4 transactions per week for thousands of users at once. This makes the user experience of using these Theta Vaults extremely straightforward and relatively cheap — deposit, wait for yields, and withdraw.

Learn more: https://docs.ribbon.finance/

Korean exchanges will no longer allow withdrawals to unverified external wallets like Metamask: The Block Crypto

• Coinone and Bithumb, two of the “Big Four” crypto exchanges in South Korea, announced that they will no longer allow withdrawals to non-verified external wallets.
• That means users won’t be able to withdraw their funds to wallets that have no KYC, such as MetaMask and Ledger.
• That means Coinone users will have to register their external wallets with the exchange, or else they will no longer be allowed to withdraw their funds held at their exchange accounts.
• External wallets include any wallets that third parties offer, including “hot” (online) and “cold” (offline) storage options. But these wallets must be registerable or verifiable, i.e., they must have know-your-customer (KYC) information in place.
• Coinone said it needs to ensure that customers are not using crypto for illegal activities such as money laundering. Thus, it requires customers to register their wallets to be able to withdraw funds.
• Coinone customers need to submit information such as their full name, email addresses, and registered mobile phone number in order to verify their wallets. This information must be the same as the information recorded in Coinone. That means customers cannot register someone else’s wallets.

Sources: 1. https://www.theblockcrypto.com/post/128735/korea-crypto-exchange-%E2%80%8Ecoinone-withdrawals-external-wallets

2. https://www.coindeskkorea.com/news/articleView.html?idxno=76861

Cross-chain transactions with Li.fi Protocol

• Lifi is a cross-chain liquidity aggregator that calculates the safest, fastest and cheapest routes, with the best UX.
• It simplifies cross chains transactions by using several AMM aggregators and bridges to make cross-chain trading simple.
• In this example below, I swapped 0.1 $BNB on #BSC
• to $MATIC on Polygon. 1. Used 1inch to swap for USDT 2. Bridging USDT via Connext bridge. 3. Swapped USDT to MATIC on Paraswap. Took 5min in total but UX improvement is 100x!

• In this case I swapped 0.1 $BNB on #BSC to $MATIC on Polygon.
  1. Used 1inch to swap for USDT
  2. Bridging USDT via Connext bridge.
  3. Swapped USDT to MATIC on Paraswap.
• Transaction took a 5 min in total.
• There is no token yet, but high chance to get an airdrop if you used the app.

Learn more: https://li.finance/about

Tweet of the year (so far)

• Founder of Ethereum shares “mini-tweetstorm of some of the things I’ve said and written over the past decade, and what I think about those subjects today”