DeFi in Ether: SushiSwap saga, Etherscan releases yield farm list, Ren and UMA launch a Bitcoin-backed yield dollar, The DeFi Pulse Index is now available on TokenSets, yEarnfinance’s StableCredit is here, and much more!

Paradigm

Published in

Paradigm

18 min readSep 16, 2020

Biweekly update on Ethereum DeFi ecosystem vol.13, 2nd September — 16th September

TL;DR

Chef Nomi, the pseudonymous founder of decentralized exchange protocol SushiSwap, said that they returned some 38,000 ETH — worth some $14 million at press time — to the project’s treasury fund.
Set and DeFi Pulse announced the launch of the DeFi Pulse Index Set on TokenSets. The DeFi Pulse Index (DFP) is built on Set Protocol’s new v2 infrastructure and consists of 10 of the most popular DeFi tokens available on Ethereum. Check it out here.
UMA announced the Yield Dollar on renBTC. With the launch of uUSDrBTC-OCT on UMA protocol it is now possible to leverage Bitcoin permissionlessly on the Ethereum network. Risk Labs, the foundation supporting the UMA protocol, had announced a gas fees rebate program for governance votes. Coinbase Pro listed UMA token.
RenVM has just surpassed half a billion USD in total volume transacted.
yEarn introduced StableCredit, a new protocol for decentralized lending, stablecoins, and AMMs built as part of the yEarn ecosystem. It has also become a significant stakeholder in the governance of stablecoin exchange Curve. yEarn saw major excitement around the launch of its yETH Vault.
Etherscan releases Yield Farm List: The price and market cap data of all known yield farming tokens are displayed on this new page.
These weeks, Stani Kulechov, Founder and CEO at Aave featured in the scope of podcasts. GHST was introduced — the eco-governance token of Aavegotchi and it powers every activity in the Aavegotchi universe, from participating in the DAICO, to buying Aavegotchis, and even farming rarity.
Compound Labs has launched the beta version of Compound.js, a JavaScript SDK for Ethereum and the Compound Protocol. Since the last newsletter, Proposals 21 and 22 have passed with support from the community. COMP Governance & Distribution update was published.
The Maker Protocol’s Liquidations System Upgrade 1.2 is live. The Maker Foundation Interim Risk Team has placed a series of Governance Polls into the voting system which presents polls to implement Domain Team onboarding, Collateral Onboarding, and more. Read The Maker Governance Review, a monthly recap of all Governance activity, from Governance blog posts and polling/voting history to Governance Cycle progress.
The Augur team announced a new proposal to the community to improve Augur v2.
The Melon Council has been working on assessing the viability of Melon Improvement Proposal #7 (MIP#7) and they shared some initial feedback on the proposal by Tom Shaughnessy (Delphi Digital), Ceteris Paribus and Chris Manessis (Moonchain Capital).
0x Developer and Governance Update — September 2020: New technical developments from 0x Labs and the 0x ecosystem. Good news is, on September 13th, Matcha surpasses $300 million in volume.
1inch surpasses 3 billion in volume. The project partners with TRON for JustSwap and Mooniswap integration. Under the partnership deal, 1inch will fully integrate with JustSwap, TRON’s decentralized trading protocol for automated liquidity provision, and our AMM, Mooniswap, will integrate into TRON’s blockchain. SushiSwap now integrated. Defi Prime interviewed Anton Bukov, the co-creator of 1inch.exchange and Mooniswap.
Check out latest Kyber Ecosystem Report #18 and recap of KyberDAO Community Call #1.
Loopring Swap Announced: Loopring Swap is an interface that sits on top of Loopring’s layer 2 DEX which offers gas-free trading.
Fresh Raiden Weekly issue 135 is out. This week featuring: WebRTC development updates, Cross Token Network Payments, and an overview of new projects building on Raiden.
The Synthetix Volume Program announced: This is a new initiative designed to incentivize native integration of the Synthetix protocol across DeFi platforms and protocols. Meet the new Synthetix grantsDAO interface: The new UI for the grantsDAO introduced.
The Road to V3: YAMv2 Interim Governance Summary: This post from the Yam Finance team summarized all of the changes that will be included with Yam v3 (as voted on by YAM token holders). As part of the roadmap, uses who voted to save the original Yam protocol are going to receive bonus YAMv3 rewards.
DEFI-S announced: DEFI-S is an index for exposure to AMMs (BAL), zkRollups (LRC), derivatives (UMA), asset management (MLN), and interoperability (REN, PNT).
xDai Bridge Governance Proposal: In the past month Dai bridged to xDai has surged 500%. More decentralized governance will help support this growth. Read & comment on a proposal to migrate to Gnosis Safe by Gnosis & extend bridge governance. Fresh xDai weekly recap is here.
MCDEX announces funding round: MCDEX has closed the first funding round from several renowned influencers and key stakeholders of the industry, including Arthur ( DeFiance Capital ), Qiao Wang, DeFi Dad, Daryl Lau, Tarun, Robert Leshner and more.
mStable governance forum now live, where mStable improvement proposals will go for formal discussion, after being surfaced on their Discord server. At the end of this week, the team will begin a series of monthly mStable community calls. Join them!
Cozy Finance, a company that develops risk-management software for decentralized finance, introduced.
Pine is live on mainnet (formerly UniswapEx) limit orders on Uniswap v1 and v2.
The new DODO liquidity provider project launched the Grey Parrot phase of its wider DODO Carnival incentive campaigns.
Swerve, a fork of Curve, reached a TVL of over $380 million within 12 hours of launching.
Perpetual contracts exchange Perpetual Protocol has deferred its mainnet launch due to high gas prices.
Crypto exchange Huobi kicked off a liquidity mining campaign, which offers HT stakers rewards from a USDT pool worth $10 million.
An updated look at The Block’s DeFi Map.
Organic growth in DeFi.
New DeFi podcasts.
And much more!

Subscribe to ‘Defi in Ether’ newsletter ⬙

Check out our latest biweekly report on Ethereum vol.52: 1st September — 15th September.

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

Total Value Locked in DeFi

Top DeFi Tokens by Market Capitalization

Total Market Cap: $13,997,370,520

DeFi Aggregators

yEarn.finance:

Yearn.finance Updated: yETH, yWETH vaults added, SNX assets updated and the website footer populated with a bunch of relevant links.

Yliquidate.finance was also launched that allows for automated liquidations using flash loans.

Introducing StableCredit: StableCredit is a new protocol for decentralized lending, stablecoins, and AMMs built as part of the yEarn ecosystem.

Check out Official yEarnFinance newsletter.

Also, yEarn is going to compete with Maker.

yEarn has become a significant stakeholder in the governance of stablecoin exchange Curve. yEarn also saw major excitement around the launch of its yETH Vault this week.

mStable:

mStable Governance Forum Now Live: The governance forum is where mStable improvement proposals will go for formal discussion, after being surfaced on their Discord server.

The mStable Community Call: At the end of this week, the team will begin a series of monthly mStable community calls. They will host two calls this month at the following times:

September 17th, 15:30 UTC / 8:30 PT, for EU and US timezones
September 18th, 7:00 UTC / 15:00 SGT, for Asian and ANZ timezones

Lending

Aave:

Introducing GHST: GHST is the eco-governance token of Aavegotchi and it powers every activity in the Aavegotchi universe, from participating in the DAICO, to buying Aavegotchis, and even farming rarity.

These weeks, Stani Kulechov, Founder and CEO at Aave featured in the scope of podcasts:

Compound:

COMP Governance & Distribution Update:

Since the distribution of COMP began in June:

15 governance proposals were created; 12 were implemented
A new interest rate model was developed by Dharma, and deployed for the DAI and USDT markets
The Augur team spearheaded risk management changes for REP, during the upgrade to REPv2
COMP token-holders voted to change the protocol’s price oracle to the Open Price Feed, an open-source project where a set of reporters sign price data which can be posted on-chain by any Ethereum address — and which doesn’t rely on the team
The community built an entirely new feature, market-level Borrowing Caps, to limit risk to the protocol
Autonomous Proposals were created, which allow anybody with 100 COMP to gather support for a Governance proposal

When community governance first went live, the team explained how the total supply of COMP tokens would be allocated. Out of 10,000,000 total COMP, they reserved 775,000 tokens “for the community to advance governance through other means — which will be announced at a future date.”

Here’s how those tokens are being distributed to the community:

In June, they designated up to 500,000 COMP for distribution through Coinbase Earn. COMP tokens will be available through Coinbase Earn until November 2021, at which point Coinbase will transfer all remaining tokens to the Compound protocol’s Reservoir contract
A few days ago, the team sent the remaining 275,000 COMP directly to the Reservoir contract. They believe the best way to promote decentralization is to allow the community to allocate these tokens through the Governance process

In total, 5,004,949 COMP will be distributed to the community — just over half of the total supply.

Compound.js, Governance Updates, Autonomous Proposals, OKEx Integration:

Compound.js in Beta Testing

Compound Labs has launched the beta version of Compound.js, a JavaScript SDK for Ethereum and the Compound Protocol. Rather than programming in Solidity, developers can use Compound.js to interact with Compound’s smart contracts using JavaScript or Node.js.

Key protocol methods like mint, redeem, borrow, and repayBorrow can now be executed using simple 1-liners, making it easier and faster for developers to build applications on top of Compound. In addition to Compound methods, developers can also make generic Ethereum read and write calls to any smart contract.

You can read more about Compound.js in the Medium announcement, view the source code on GitHub and NPM, and review developer documentation on the Compound website.

Governance Updates

Since the last newsletter, Proposal 22 has passed with support from the community:

Proposal 22: New Feature: Borrow Caps

Submitted by community member @blck on behalf of @Arr00, Proposal 22 implements a new Comptroller with a “Borrow Caps” feature. This proposal has been discussed at length in the community forums — see this post for full context.

Borrow caps would enable governance to set limits for total borrowing in each market. For each new borrow request in a market, the new total borrows would be checked against the borrow cap and revert if the new total borrows is too high.

Borrow caps are intended to be used as a safeguard for the protocol, for example to defend against “infini-mint” risk, where a collateral position is inappropriately given a value approaching infinity, and a bad actor tries to borrow all $300 million of Ether currently held in the protocol.

This proposal does not actually implement any borrow caps — usage of the feature must be set through future proposals.

Proposal 21 has passed with 85% support from the community:

Proposal 21: Reduce COMP emissions by 20%

Status: Executed August 31st, 2020
Proposer: Gauntlet
Voting Results: 1,119,629 For and 195,969 Against
Summary: CompSpeed has been lowered from to 0.176 COMP per Ethereum block. This lower emission rate helps ensure that the protocol has a large reserve of COMP to incentivize positive community and user participation.

Ongoing Discussions

See below for highlights from the Compound governance forum, and join in the discussion:

“Community Gas Fund” — @arr00 suggests the creation of a community gas fund funded by SAI reserves, in order to subsidize new contract deployments and gas-less governance voting.
“Lower Proposal Threshold to 100 COMP” — @lay2000lbs suggests lowering the governance proposal threshold from 100k COMP to 100 COMP, which has sparked a vibrant discussion around empowering more users to participate in governance.
“Financially Incentivizing voting/voting delegation” — @odette introduces the concept of COMP emissions going to governance participants.
“Update cUSDC interest rate model” — @arr00 suggests updating the cUSDC interest rate model to match the current cDAI and cUSDT interest rate models.
“YFI Listing Proposal” — @paraficapital suggests adding YFI as a supported market on Compound.

Be sure to either vote on proposals with your COMP, or delegate your COMP voting rights to a representative of your choice.

Introducing Autonomous Proposals

Compound Labs has released a new tool to make it easier for community members to gather votes for a proposed protocol upgrade: Compound Autonomous Proposals (CAPs).

In the current governance system users need 100k delegated COMP to submit a formal proposal into the voting process — which can be a daunting ask for many community members. With this tool users can now create a CAP with only 100 COMP. They can then collect votes to be delegated to the CAP itself, and once the CAP has reached the 100k delegated COMP threshold it can be submitted as a formal proposal into the governance voting process.

Here is the first-ever Autonomous Proposal: Set Pause Guardian to Community Multi-Sig. It needs >100,000 delegated votes to be submitted as a formal proposal. To delegate to it, visit the Vote page of the Compound App, and delegate your votes to the address of the CAP (0x0cde9622b23ababfccef9755b5f7c9e759ef4820).

You can read more about Autonomous Proposals in the announcement on Medium.

OKEx Launches Compound Integration

OKEx, one of the top spot and derivative exchanges by volume, has integrated Compound to allow users to earn interest on all of the assets that the protocol supports (BAT, DAI, ETH, USDC, USDT, WBTC, ZRX). The Earn product features no minimum holding period aside from 1-day redemption processing, and additional COMP bonuses for certain assets.

OKEx has also built a flexible borrowing product that will launch in the near future, marking the first time a major exchange will have integrated Compound’s borrowing functionality.

Links & Discussions

Multis shared a map of the next-generation financial system, with Compound powering the core crypto infrastructure.
Binance Academy published a report on the basic functionality and purpose of the Compound Protocol.
Frontier Wallet launched a Compound integration inside of the mobile application, giving users access to Compound by linking Trust Wallet, imToken, Fortmatic, Metamask Mobile, or Coinbase Wallet.
One day after the release of Autonomous Proposals, developer Dennison Bertram shared a fork called “COMP — RFP”, which intends to create an incentivized bounty market to crowdfund the creation of Compound governance proposals.

Dharma:

Dharma has voted in support of COMP Proposal 22.

Maker:

Governance Poll: Domain Team Onboarding, Collateral Onboarding, and more: The Maker Foundation Interim Risk Team has placed a series of Governance Polls into the voting system which presents polls to implement Domain Team onboarding, Collateral Onboarding, and more.

Executive Vote: Changes to USDC-A and PAX Parameters, Reduce Box Parameter:The Governance Facilitators and the Maker Foundation Smart Contracts Team have placed an Executive Vote into the voting system which will enable the community to approve the following alterations to the protocol.

The USDC-A collateralization ratio will be decreased from 110% to 103%.
The PAX collateralization ratio will be decreased from 120% to 103%.
The USDC-A debt ceiling will be increased from 100 million to 200 million.
The PAX debt ceiling will be increased from 5 million to 30 million.
The Vat global line parameter will increase from 823 million to 948 million.
The box parameter will be changed from 30 million to 15 million.

Executive Vote: Increase the USDC-A Debt Ceiling, Whitelist tBTC on the ETHBTC Oracle:
The Governance Facilitators and the Maker Foundation Smart Contracts Team have placed an Executive Vote into the voting system which will enable the community to approve the following alterations to the protocol.

The USDC-A Debt Ceiling will be increased from 40 million to 100 million.
The Vat global line parameter will increase from 763 million to 823 million.
tBTC will be whitelisted on the ETHBTC Oracle.

Maker Governance Review: August 2020: The Maker Governance Review is a monthly recap of all Governance activity, from Governance blog posts and polling/voting history to Governance Cycle progress.

Meet Sandy Khaund, the Maker Foundation’s Newest Board Member: The Maker Foundation Board has appointed Sandy Khaund, Vice President of Blockchain Products at Ticketmaster, as its third non-executive director.

Executive Vote: Onboard USDT and PAX; Multiple Other Changes: The Governance Facilitators and the Maker Foundation Smart Contracts Team have placed an Executive Vote into the voting system which will enable the community to approve the following alterations to the protocol.

The Maker Protocol’s Liquidations System Upgrade 1.2 Is Live: The Maker Protocol’s Liquidations System 1.2 upgrade has been released and contains several improvements.

xDai:

xDai Bridge Governance Proposal: In the past month Dai bridged to xDai has surged 500%. More decentralized governance will help support this growth. Read & comment on a proposal to migrate to Gnosis Safe by Gnosis & extend bridge governance.

Derivatives, Swaps and Prediction Markets

Augur:

Augur AMM, L2 & Para Augur: The Augur team announced a new proposal to the community to improve Augur v2.

Despite a successful launch there is a lot left to do for Augur. Liquidity and usage are orders of magnitude lower than what most envision for the protocol for a variety of reasons, the two most notable being:

Transactions are expensive. During most of Augur V2’s development, gas prices hovered in the 5 gwei range. While the system was tailored around that expectation, it is clearly no longer the case and Augur needs to adapt.
Demand for DAI trading isn’t as high as expected. In particular there is a competing demand to be able to trade using ETH like in Augur V1, especially in a bull market. This sentiment existed and was vocal during Augur V2 development, so it’s not entirely surprising, but the decision was made to focus on one user experience for launch.

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

dYdX:

How DeFi is Eating Traditional Finance.

Gnosis:

Crypto hedge fund Arca called on Gnosis to return money to investors, arguing the project hasn’t delivered value to token holders.

UMA:

UMA — Announcing the Yield Dollar on renBTC: With the launch of uUSDrBTC-OCT on UMA protocol it is now possible to leverage Bitcoin permissionlessly on the Ethereum network. You can mint renBTC from Bitcoin, then lock that renBTC into UMA. With this as collateral, you can mint uUSD, which can be used to purchase more renBTC and create a permissionless leveraged position.

Risk Labs, the foundation supporting the UMA protocol, had announced a gas fees rebate program for governance votes. These rebates will be paid out in UMA tokens, and will be automatically distributed to anyone who both commits and reveals their votes. The current plan is to airdrop these rebates within 1–2 weeks of a vote.

Coinbase Pro listed UMA Protocol’s UMA token.

Fund Management

Melon:

Melon Council comments on MIP#7: The Melon Council has been working on assessing the viability of Melon Improvement Proposal #7 (MIP#7) and they shared some initial feedback on the proposal submitted on June 25th, 2020 by Tom Shaughnessy (Delphi Digital), Ceteris Paribus and Chris Manessis (Moonchain Capital).

Set Protocol:

Introducing the DeFi Pulse Index on TokenSets: Set and DeFi Pulse announced the launch of the DeFi Pulse Index Set on TokenSets! The DeFi Pulse Index (DFP) is built on Set Protocol’s new v2 infrastructure and consists of 10 of the most popular DeFi tokens available on Ethereum. Check it out here.

The Set V2 Rollout Explained: This post explains the 3 phases of the Set v2 rollout — phase 1 brings with it multi-asset support and index Sets, with phase 2 comes yield farming, and with phase 3 comes improvements for Set Managers.

Securities, Insurance and NFTs

Nexus Mutual:

Liquidity Relays

0x project:

0x Developer and Governance Update — September 2020: New technical developments from 0x Labs and the 0x ecosystem.

Matcha:

1inch.exchange:

3 billion in volume:

1inch partners with TRON for JustSwap and Mooniswap integration: Under the partnership deal, 1inch will fully integrate with JustSwap, TRON’s decentralized trading protocol for automated liquidity provision, and our AMM, Mooniswap, will integrate into TRON’s blockchain.

SushiSwap now integrated.

Defi Prime interviewed Anton Bukov, the co-creator of 1inch.exchange and Mooniswap.

Balancer:

Kyber:

Kyber Ecosystem Report #18:

ATH 30-day trading volume: $397M in Aug vs $389M for the entire 2019
Hosting the 1st KyberDAO Community Call with Ambassador DeFi Dude
New Smart Reserve Routing system to save gas
Tokens $REPv2 $KAI $MATIC $pLTC $STMX

Recap: KyberDAO Community Call #1:

Why Market Make On-Chain?

Genesis Vision (GVT) is now available on Kyber Network

Loopring:

Loopring Swap Announced: Loopring Swap is an interface that sits on top of Loopring’s layer 2 DEX which offers gas-free trading.

Payments Networks

Raiden Network:

Fresh Raiden Weekly issue 135 is out. This week featuring:

WebRTC development updates
Cross Token Network Payments
Overview of new projects building on Raiden

Synthetix:

The Synthetix Volume Program Announced: This is a new initiative designed to incentivize native integration of the Synthetix protocol across DeFi platforms and protocols.

Meet the new Synthetix grantsDAO interface: The new UI for the grantsDAO introduced.

The Synthetix Volume Program: The new program incentivising Synth trading volume across DeFi.

Privacy protocols for DeFi

Ren protocol:

RenVM has just surpassed half a billion USD in total volume transacted:

Announcing the Yield Dollar with UMA and renBTC: Permissionlessly Leverage or Yield Farm with Bitcoin.

More updates

Pseudonymous SushiSwap Founder Returns 38,000 ETH: Chef Nomi, the pseudonymous founder of decentralized exchange protocol SushiSwap, said Friday that they returned some 38,000 ETH — worth some $14 million at press time — to the project’s treasury fund. The development comes less than a week after Nomi converted some of the SUSHI tokens apportioned to the project’s development team into ETH, sparking furor and triggering a market drop in the process, as well as allegations of an exit scam. That move ultimately kicked off a process that saw control of SushiSwap shifted to the chief executive of FTX. Earlier this week, more than $800 million in funds was then moved from Uniswap liquidity pools to SushiSwap as part of a migration process.

“I would like to apologize to everyone who I have caused troubles to. I was emotional, I was greedy, I was afraid. I made bad controversial decisions under pressure. And it hurt everyone. I failed your expectation and I am sorry,” Nomi wrote in one post.

The Road to V3: YAMv2 Interim Governance Summary: This post from the Yam Finance team summarized all of the changes that will be included with Yam v3 (as voted on by YAM token holders). As part of the roadmap, uses who voted to save the original Yam protocol are going to receive bonus YAMv3 rewards.

DEFI-S Announced: DEFI-S is an index for exposure to AMMs (BAL), zkRollups (LRC), derivatives (UMA), asset management (MLN), and interoperability (REN, PNT).

MCDEX Announces Funding Round: MCDEX has closed the first funding round from several renowned influencers and key stakeholders of the industry, including Arthur ( DeFiance Capital ), Qiao Wang, DeFi Dad, Daryl Lau, Tarun, Robert Leshner and more.

Introducing Cozy Finance: Cozy Finance is a company that develops risk-management software for decentralized finance.

Pine is live on mainnet (formerly UniswapEx) limit orders on Uniswap v1 and v2.

The new DODO liquidity provider project launched the Grey Parrot phase of its wider DODO Carnival incentive campaigns.

Swerve, a fork of Curve, reached a TVL of over $380 million within 12 hours of launching.

Perpetual contracts exchange Perpetual Protocol has deferred its mainnet launch due to high gas prices.

Crypto exchange Huobi kicked off a liquidity mining campaign, which offers HT stakers rewards from a USDT pool worth $10 million.