This Week: Dissecting Proof-of-Reserves in DeFi
Also: Vote for Vesper’s FRAX pool on StakeDAO, high-yield strategies now available for select pools
VSP Rewards Now Available on StakeDAO
This week we are taking advantage of Stake DAO’s new Vote Market. The Vote Market enables FXS stakers to vote for the Vesper FRAX pool and earn VSP. Through the Vote Market, users can see information regarding the payout per vote as well as the duration of the vote campaign.
Vesper on Proof-of-Reserves
In the aftermath of the FTX meltdown, centralized exchanges have been racing to prove to users that they do in fact have the tokens in their reserves that their users have deposited (otherwise known as Proof of Reserves).
While it is an important and noteworthy step, proof of reserves alone doesn’t give a clear indication that an exchange is a solvent, as it only reflects the custody of the exchanges’ assets and doesn’t reflect their potential outstanding liabilities (debt).
When Satoshi Nakamoto offered bitcoin to the world, it was under the premise that this technology would allow users to self-custody of their digital assets without the need for an intermediary, yet, in the years that followed a huge percentage of transactions, trading, and yield generation of crypto has occurred through centralized entities. DeFi fixes this.
The pain of FTX was felt by many, and perhaps there is more pain to come. With all wounds however come lessons, and the race for self-custody hasn’t been this pronounced across the crypto ecosystem since Mt. Gox imploded in 2013. Over time this will likely be a large net positive for DeFi at large. It is encouraging to see large exchanges showing their PoR, but there is still more work to be done.
New Strategy Deployments
Over the course of the last two weeks, we’ve gradually ramped up weight across our USDC and FRAX pools towards new, high-yield strategies across Stargate and Convex for Frax.
These strategies will gradually increase the yield across all major pools on Vesper as more weight is attributed to those new and improved strategies.
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Vespernauts Michael, Errin, and Zane contributed to this report. Edited by Phil Gomes.
