Open in app

Sign in

Write

Sign in

DeFi in Ether: 3B TVL milestone, Total DAI is now >200M, yEarn has been making big waves over the weekend, mStable launches MTA on Gnosis-based Mesa DEX, Aave introduces new features, Synthetix’s dHedge is live on testnet, Balancer’s first governance polls, and much more!

Paradigm
Paradigm
Published in
22 min readJul 22, 2020

--

Biweekly update on Ethereum DeFi ecosystem vol.9, 8th July — 22nd July

TL;DR

Subscribe to ‘Defi in Ether’ newsletter ⬙

Check out our latest biweekly report on Ethereum vol.48: 7th July — 21st July.

For more updates, join Paradigm on Medium, Twitter, Telegram, and Reddit.

Total Value Locked in DeFi

Source: defipulse.com

Top DeFi Tokens by Market Capitalization

Total Market Cap: $6,427,636,861

Source: defimarketcap.io

Debt

Aave:

Aave Launches New Features and Listings: The Aave team has been hard at work to provide new features and assets in the protocol for the Aave Fam! As always, synergies within the ecosystem and brand new functionalities are on the menu this week. They introduced new risk parameters giving more freedom to users, new assets listed, the listing of LEND on Loopring, and a brand new fiat onramp for a seamless Fiat to Yield experience.

Understanding the Risks of Aave: Aave’s Risk Framework breaks down some of the key risks of the protocol and the mitigation techniques in place. The team has published a new section focused on liquidity risk.

The liquidity of the protocol is the availability of the capital to face business operations: borrow amounts for loans and redeeming aTokens. It is a key metric, as lack of liquidity will block business operations. To better understand how liquidity risks materialize in the Aave Protocol, the article analyses liquidity risk through the utilization ratio and the valuation of aTokens. It looks at the risk management strategies in place: the interest rate model and the alternative sources of aToken liquidity.

Strategic Investors 3 Arrows Capital & Framework Ventures Take $3m Position in $LEND to Accelerate Growth of the Aave Protocol: Aave announced that Framework Ventures and Three Arrows Capital have invested $3M when the $LEND token was $10cts and now hold over $7M worth of $LEND tokens at their current price. This strategic investment aims to further Aave’s mission of enabling global, permissionless tokenized assets money markets. Both firms will be active market participants in the Aave ecosystem via staking and governance.

  • Framework Ventures is one of the most active investors and liquidity providers in the DeFi ecosystem.
  • Three Arrows Capital is one of the largest market participants in the OTC lending market.

With their hands-on experience in the DeFi and institutional markets, both Framework and Three Arrows are uniquely positioned to help fuel Aave’s growth as investors and major users of the protocol. Aave is excited to work closely with Framework and Three Arrows as we move into our next phase of growth.

“Aave Protocol has grown substantially since the beginning of the year when we launched. Our focus has always been innovation and diligent risk management, which has got the attention of Framework Ventures and Three Arrows Capital. Their involvement will bring substantial expertise to scale the protocol for institutional usage and they will be helpful stakeholders within our community.” — Stani Kulechov, Aave

Official Aavegotchi F.A.G.

Compound:

Governance Updates, Curv Integration, OKCoin Price Feed, Ankr Q&A

Governance Updates:

Five new proposals have passed through Compound’s governance system in July, with two passing, two failing, and one being canceled. Below, the team highlights each proposal, from oldest to newest, and the broader significance for users and stakeholders of the protocol.

Proposal 12: Update cDAI Interest Rate Model (012)

  • Status: Failed July 4th, 2020
  • Proposer: Dharma
  • Voting Results: 133,613 For and 538,486 Against
  • Summary: This proposal from Dharma attempted to make three changes to the interest rate model of cDAI: Increase the supply APY from 15% to 25% at 100% utilization, change the utilization rate ‘kink’ from 90% to 80%, and increase the slope of the interest rate curve before the ‘kink’ (gapPerBlock from 2% to 4%).

Proposal 13: Set WBTC Collateral Factor to 65% (013)

  • Status: Canceled July 5th, 2020
  • Proposer: Alameda Research
  • Voting Results: 125,332 For and 105,049 Against
  • Summary: This proposal sought to increase the WBTC collateral factor from 0% to 65%, allowing users to supply WBTC as collateral to borrow other assets from the protocol. This proposal was canceled before the end of the voting period, as Alameda’s delegated COMP fell below the 100k threshold.

Proposal 14: Set WBTC Collateral Factor to 65% (014)

  • Status: Failed July 8th, 2020
  • Proposer: Alameda Research
  • Voting Results: 353,204 For and 669,872 Against
  • Summary: This proposal was a continuation of Proposal 13, where Alameda again proposed a collateral factor increase of 0% to 65% for WBTC. This proposal ultimately failed due to concerns that manipulative WBTC minting would create systemic risk for the protocol.

Proposal 15: Changing SAI collateral factor to 0% (015)

  • Status: Executed July 13th, 2020
  • Proposer: blck
  • Voting Results: 997,005 For and 9 Against
  • Summary: blck completes the process of deprecating SAI by reducing SAI’s Collateral Factor from 35% to 0%.

Proposal 16: Set WBTC Collateral Factor to 40% (016)

  • Status: Executed July 14th, 2020
  • Proposer: Alameda Research
  • Voting Results: 533,998 For and 523,974 Against
  • Summary: In the closest voting outcome in governance thus far, Alameda passed a proposal for a WBTC collateral factor of 40%. The proposal explained that while they still support taking WBTC collateral factor up to 65%, they believe 40% is a good middle ground for the community to get comfortable with having WBTC as collateral for borrowing.

Curv Supply Integration:

Curv is an institutional custodian that uses multi-party computation (MPC) to remove single points of failure in public-key cryptography, and better secure digital assets. The team recently announced a successful Series A fundraising round from investors including CommerzVentures, Coinbase Ventures, Digital Garage Lab Fund, Digital Currency Group, and Team8, and counts eToro, Genesis, and Franklin Templeton Investments as clients.

Curv has integrated Compound’s supply functionality so their institutional clients can earn interest on crypto from the safety of custody. The initial integration will support ETH, with other assets and borrowing being added in the near future.

You can visit Curv’s website for more information on the Compound integration and request a demo.

OKCoin Open Price Feed:

OKCoin, a leading exchange based in San Francisco, has released a signed price feed based on the Open Price Feed standard, which allows any DeFi project to pull OKCoin’s price data into their markets. The Open Price Feed is designed for Reporters like OKCoin to sign price data with a public key, and then have those prices posted on-chain. Any on-chain application can request and decode data out of the Open Price Feed.

Compound CEO Robert Leshner added that “Having a reliable feed for on-chain price data is critical for DeFi growth and use of Compound. This effort from OKCoin is an important contribution to the decentralized finance ecosystem”.

COMP Distribution Analytics:

Source

Links & Discussions

Dharma:

Dharma Votes on Prop 15 & Prop 16. Dharma has voted in favor of Compound Prop 15, and has voted against Compound Prop 16. Prop 15 brings the collateral factor on SAI to zero. This is the natural next step in retiring SAI from Compound, and the team finds this proposal unproblematic. Prop 16 follows on Prop 14 in attempting to add a collateral factor for wBTC. The team believes Prop 16’s proposed collateral factor, 40%, is still too high, given the two concerns that have been raised: a) low spot liquidity; and b) minting collusion. They favor a lower initial CF.

Dharma has voted in support of Compound governance proposal 17. The team believes these are the right steps to take to retire REPv1, and that now is the right time to start this process.

Dharma Promotion — Fee Free Trade: For a limited time only, you could make a Fee-Free Trade on Dharma.

Dharma StackingStreak Week 2.

Maker:

Total Dai is now over 200 million! A new all-time high!

Executive Vote: Raise the ETH Debt Ceiling: The Maker Foundation Interim Governance Facilitator has placed an Executive Vote into the voting system which will enable the community to approve the following alterations to the protocol as outlined in this forum thread: [Signal Request] Should we raise the ETH-A debt ceiling.

Therefore, voting for this Executive will:

  • Raise the ETH-A Debt Ceiling 20M to a new limit of 180M

The Executive Vote (FAQ) will continue until the number of votes surpass the total in favor of the previous Executive Vote. This is a continuous approval vote.

Why Online Merchants Should Accept Dai For Crypto Payments: More merchants accept crypto payments thanks to the DeFi movement and the many benefits crypto provides to e-commerce retailers and customers alike.

Governance Poll: Base Rate Adjustment, Vault Compensation, and MIPs: The Maker Foundation Interim Risk Team has placed a series of Governance Polls into the voting system which presents adjustments to the Base Rate, Vault Compensation, and a series of Maker Improvement Proposals (MIPs).

MakerDAO Approves 4 New Light Feeds For Oracles: MakerDAO’s Oracles are smart contracts in the Maker Protocol; Feeds submit price data to the Oracles and Keepers to help Dai maintain its peg to the US Dollar.

xDai:

Derivatives, Swaps and Prediction Markets

Augur:

Augur v2 will launch on July 28, 2020.

REP Naming Update. After careful consideration of feedback from a variety of ecosystem participants, it has been deemed that the simplest and best path forward is for the current token to simply maintain its name “REP”, and to not be renamed REPv1.

The Augur Master Plan (Part 2):

  • Create beautiful easy to use mobile-first interfaces
  • Create open-source tools that make it easier for liquidity to form
  • Bring the offline social betting experience online through comments and chat
  • Now that the team has built a core platform that people can use, focus on growth and user activation
  • Build an open-source betting view for Augur, so it’s accessible to bettors in addition to traders

Read more>>>

More on Augur:

dYdX:

Update for all of dYdX programmatic traders and developers:

Trader Spotlight: Andrew Kang: This is episode #02 of Trader Spotlight, a series on trading insights & strategies used by well-known cryptocurrency investors.

Gnosis:

How manipulation-resistant are Prediction Markets?: The Undertaking in Empirical Cryptoeconomics.

Gnosis Safe Apps Recap — #1: Two and half months ago the team introduced Gnosis Safe Apps and the reception from the community has blown away their expectations. Since launch, 7 apps have been added to the interface, giving multisig users an easy way to interact with great applications built on Ethereum. They believe this is becoming the Safe-st way to DeFi. This article is is a summary of the applications launched to date.

UMA:

A handful of UMA Improvement Proposals (UMIPs) are in the works:

Fund Management

Melon:

Q2 Melon Update: Q2 update on the Melon ecosystem.

Melon in numbers:

Next up in protocol development

  • Integration of lending through Compound and Chai
  • Funds denominated in other currencies, eg. DAI (currently only possible in ETH)
  • Uniswap v2 integration
  • Limiting invest to currency of denomination
  • Significantly reducing the number of steps to speed up fund set-up time (reduces gas cost and time)
  • Reducing Ethereum gas requirements across the board where possible
  • Smart order book router for trading
  • Performance fee enhancements
  • Fund upgradability

Next up in interface development

  • V2.0 compatibility with the latest protocol contracts
  • Updating the subgraph to be compatible with new (v2.0) protocol contracts
  • Enhanced trading features & usability
  • UX/UI improvements raised by users

The Melon DAO: Past, present and future.

Set Protocol:

Set Community Update #12 — June 2020.

Grant (SmartHODL) — Set Social Trader AMA Series.

Harvard Economist and Tech Entrepreneur aim to Deepen DeFi Adoption in Latin America — Set Social Trader Spotlight.

The Arb & Yield Stablecoin Set release:

The BTC Momentum Trigger Set release:

Securities, Insurance and NFTs

Nexus Mutual:

Understanding pooled staking.

Liquidity Relays

0x project:

0x Developer Update — July 2020: New technical developments from 0x Labs and the 0x ecosystem

The 0x community has voted to pass ZEIP-79, which implements a protocol fee multiplier of 70k (a fee reduction of 50%.

Matcha:

Surpassed $10 million in cumulative volume with over $11.8m traded since launch:

1inch.exchange:

On July 20th 1inch.exchange passed $777,777,777M of total volume:

1inch added to Gnosis Safe Multisig App: 1inch has been added to the Gnosis Safe Multisig App, making one-click, best-price swaps available to all users of Gnosis, a top crypto storage platform.

1inch uses from now YFI as a connector token in the pathfinder. You can swap from any token into YFI and Curve iearn pool token.

MTA is s already listed on 1inch for limit orders.

BZRX is now available is already integrated into their pathfinder:

1inch.exchange launches a Discord server.

Welcome to the official 1inch Discord server! https://discord.gg/Xyxv2Yz

Balancer:

All three Balancer proposals have been approved by the vast majority of voters. A more detailed outcome of the voting will be published later this week.

3 proposals passed which:

  • White heavy check mark Introduces the balFactor
  • White heavy check mark Modifies the feeFactor
  • White heavy check mark Adjusts the wrapFactor

Bancor:

Guide: How to Stake Liquidity in Bancor Pools.

Announcing Chainlink and ENJ as a Bancor V2 Launch Pool.

Breaking Down Bancor V2 Dynamic Automated Market Makers: In this post, the team explores the dynamic weighting and staking features of a new type of liquidity pool in Bancor v2 called a Dynamic Automated Market Maker (DAMM).

As the launch of BancorV2 approaches, the announced the open-sourcing of Bancor V2 contracts with a public bug bounty:

  • As the launch of version 2 of the Bancor Protocol approaches, the team is announcing the Bancor V2 Bug Bounty.
  • This public bounty program supports the ongoing professional audits and formal verification of Bancor V2 contracts.
  • Awards for bugs discovered in the first two weeks of this program (July 16-July 30, 2020) will receive a 20% bonus.

Kyber:

Vote on the first KyberDAO Proposal: BRR-1: Only two days left. If you had staked KNC earlier in Epoch 0, make sure you vote now. Only voters get ETH rewards in Epoch 2.

renBTC and bZx Protocol (BZRX) are now available on Kyber Network.

Live Video AMA with Loi Luu, Co-Founder & CEO of Kyber Network, on @cryptocom Twitter, July 23rd, 10pm HKT (2pm UTC).

Loopring:

BZRX-ETH Liquidity Mining on Loopring Exchange. The Loopring and bZx teams announced that the BZRX token is listed on Loopring.io, Ethereum’s zkRollup exchange, trading against ETH. Further, this BZRX-ETH pair is launched with a month-long liquidity mining incentive campaign.

renBTC-USDT Liquidity Mining on Loopring Exchange.

Democratizing Liquidity Mining on Loopring.

Loopring first month’s liquidity mining campaigns are complete. The $6,000 has been paid out to ETH-USDT and LRC-USDT liquidity providers. Check your Loopring layer 2 accounts: anyone with >$1 accrued will see their rewards.

Loopring founder and CEO, Daniel Wang, did an AMA last week with Asia Blockchain Community. Here is the summary. Learn about him, zkRollups, and bringing Ethereum to the masses in a scalable and secure way.

Uniswap:

Switcheo Exchange has now integrated liquidity from Uniswap V2.

Payments Networks

Raiden Network:

Raiden Pulse #12: News from May and June. Another two months have gone by. Here’s a digest of what happened since April in the Raiden Project.

Raiden Weekly:

Synthetix:

dHedge, a new decentralised asset management protocol powered by Synthetix, which is now live on Ropsten testnet.

Muscovite Product Release: COMP, LEND, KNC, and REN are now available as binary options markets on the Synthetix platform.

Binance lists SNX: Details about the new listing of SNX on Binance.

Two-Week Notice for sDEFI and sCEX Rebalancing: Actions required if you hold s/iDEFI or s/iCEX ahead of their rebalancing.

Privacy protocols for DeFi

Ren protocol:

Ren just crossed $50m total volume:

REN is now supported in the Aave Market. And it is now available on Kyber Network.

renBTC Liquidity Mining on Loopring Exchange: The renBTC asset is now listed on Loopring.io, Ethereum’s zkRollup Exchange, trading against USDT.

Ren partners with Bancor in launching REN and renBTC liquidity pools in the upcoming BancorV2.

More updates

yEarn — an automated liquidity aggregator created by Andre Cronje and his team — has been making big waves over the weekend through the release of its native governance token — YFI. Andre describes YFI as “0 financial value” token. It is an ecosystem that relies on other DeFi services such as Aave, Balancer, Curve, Compound, Uniswap, Synthetix, and many more. One of the main usage of yearn is that you can stake your stablecoins such as DAI, USDC, TUSD, USDT, etc to earn passive income — a way to participate in crypto without exposure to volatile assets.

For those who missed it, the YFI token launch was met with unprecedented demand, despite the literature openly stating that the token has zero value outside of governance. To synthesis the root of demand, yield farmers flocked to the three different pools in which YFI could be ONLY be earned through liquidity mining. Given there was no premine and no IDO, this launch provided an open playing field for anyone to get involved at the ground level.

At its peak, YFI traded at $2,500/token, representing a nearly 80x gain from it’s first recorded listing price of ~$30/token. This high price fueled APY’s as high as 1800%, as the value to be earned from farming attracted over $150M worth of new capital in the span of 72 hours.

These returns in tandem with extensive composability built on unaudited contracts led many prominent community members to head caution on those flocking to these pools with little to no prior insight or semblance of risk awareness. The contention peaked with the discovery of YFI minting belonging to yEarn’s founder — Andre Cronje — who *could* have minted infinite tokens to drain the DAI/YFI pool of $66M worth of DeFi’s defacto stablecoin at the time of writing.

Balancer responded to this issue by posting a severe warning message, doing everything in their power to warn users from entering a pool with risky assets. Still, yield farmers flocked into yEarn pools in heaps, as yEarn’s Proposal 0 looks to suggest that the supply will be capped at 30,000 YFI in perpetuity following the end of it’s voting period on July 23rd.

mStable Launches MTA Token: mStable launched their protocol token (MTA) over the weekend on the Mesa platform (built by Gnosis). This token will be used for governance, staking and more. The team also announced that they have received investment from Alameda Research/FTX and partnered with them for integration.

Check out A Recap of MTA Rewards: mStable now incentivises 3 liquidity pools on Balancer. For the remainder of July, they have allocated a full 325,000 MTA to be emitted through this program.

MTA Emission: Important Update: The community observed an unexpected unlock of MTA tokens.

DeversiFi Launches Celebrity Trader: Celebrity Trader is a competition where if you pick the winning trader, you’ll win their entire portfolio (that was initially funded by the DeversiFi team). The trades are made based on the sentiment of each Twitter celebrities tweets.

Chicago DeFi Alliance Cohort #1 Results: An update from the Chicago DeFi Alliance where they recap some of their work and announced new cohort members including Gauntlet, Three Arrows Capital and Aave.

MCDEX Liquidity Mining Guide: Users can earn MCB tokens by providing liquidity on the platform to the AMM. This guide will walk you through how to participate in this program. Get started here.

Podcasts

Compound: How Will COMP Holders Shape the Future of Compound? on Into the Ether.

Opyn: Protecting Your DeFi Deposits and Hedging ETH Risk on Into the Ether.

DeFi Yield Farming: Why It’s All the Rage But Risky on Unchained.

Anthony Sassano talks Ethereum Education, Maximalism, Decentralized Finance and more on Ethereum Entrepreneur Podcast.

Yield Farming & Bootstrapping Liquidity | Ethereal Sessions 002 on Ethereal Sessions 002.

Dan Elitzer of IDEO CoLab Ventures and Will Price of Flipside Crypto discuss liquidity mining’s impact on the DeFi space on Laura Shin’s Unchained Podcast.

MISC

Mashable: DeFi could become the next big thing in finance.

DeFi Momentum Accelerates.

Aggregation Theory Applied to DeFi.

YFI, explained by weeb.

Bankless Q2 Token Report: The analysis on the state of crypto capital assets in Q2 2020.

The Q2 2020 Ethereum DeFi report by ConsenSys Codefi has been published: A data-driven analysis of the performance of DeFi throughout Q2, including reviews of major & emerging protocols as well as significant events and milestones of the DeFi ecosystem.

Takeaways:

1. Cross-chain interoperability is the future

2. DeFi has super users but needs more new users

3. Security matters. Open source helps. Many eyeballs = shallow bugs

Deribit, the popular derivatives exchange, provides an overview of the growth, opportunities, and risks in DeFi.

Yield Farming with Synthetix, Balancer and Curve.

A list of yield farming opportunities.

The DeFi farmers at work:

  • DeFi Conference: 5 Aug 2020
  • Crypto Fest: 30 Oct 2020
  • Blockchain Africa Conference: 18–19 Mar 2021

This is not financial advice.

Subscribe to ‘Defi in Ether’ newsletter ⬙

Check out our latest biweekly report on Ethereum vol.48: 7th July — 21st July.

For more updates, join Paradigm on Medium, Twitter, Telegram, and Reddit.

Defi
Decentralized Finance
Ethereum
Blockchain
Finance

--

--

Paradigm
Paradigm

Written by Paradigm

3.7K Followers

In chaos lies the truth

Help

Status

About

Careers

Press

Blog

Privacy

Terms

Text to speech

Teams