To the DeFi Community,
In the midst of a yield farming frenzy, governance tokens are starting to show signs of true value.
Despite Curve’s APY’s constantly dropping, we saw the Compound pool returns spike to over 300%, a direct result of someone tossing millions worth of CRV into the DAO to boost weighing in their favor. While the YFI community was busy celebrating the yFlippening (where 1 YFI passed the price of 1 BTC), competition ensued for both projects to lock tokens to increase their respective rewards (yCRV in the case of yEarn).
What emerges is an interesting paradigm in which projects aggregate governance weight to better influence their standing relative to competitors. We’ve seen this today with partner projects like Dharma’s participation in Compound governance and less favorably with FTX’s gaming of Balancer rewards. Now, we’re seeing yEarn leverage Nexus Mutual as an underwriter for their new yInsurance. All protocol changes are discussed in the open, and teams are starting to use this to their advantage.
https://t.co/enY8w7wIwG a new insurance primitive https://t.co/ONkO0BsUWZ
— yearn.finance (@iearnfinance) August 17, 2020
But what happens when the big dogs join the conversation?
This week we saw BINANCE flexing their “DeFi” participation with a series of Savings projects geared towards retail participation. While this is all good and fun for Binance to leverage Compound, we’re entering dangerous territory in which centralized giants *could* bend DeFi protocols at whim through governance. It’s no surprise they’re quickly starting to list any and all DeFi tokens in a means to aggregate as many deposits (and therefore as much voting power) as possible.
Luckily, we’ve yet to see any monumental governance votes which make or break these protocols.
Still, we need to stay on our toes. While key community members are rallying around sustainable governance, the sharks are lurking.
In the meantime, let’s keep a positive mind and recognize that DeFi isn’t slowing down anytime soon.
And this trend goes to solidify the sector is one which simply cannot be ignored.
– Cooper
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Interest Rates
DAI
- Highest Yields: Nuo at 9.2% or dYdX at 6.32%
- Cheapest Loan: Maker at 0% with any collateral or Aave at 3.6%
- MakerDAO Updates
- Dai Savings Rate: 0.00%
- Base Fee: 0.00%
- ETH Stability Fee: 0.00%
- USDC Stability Fee: 0.00%
- WBTC Stability Fee: 0.00%
- Updates: There’s an executive vote to increase the base rate from -6% to -4%. Also, the ETH debt ceiling has been raised to 420 million!
USDC
- Highest Yield: dYdX at 11.5% or Nuo at 11.1%
- Cheapest Loan: Aave at 3.6%
Find more lending & borrowing rates on our Rates page!
dYdX Partners with StarkWare for L2 Scaling
dYdX is partnering up with Starkware to scale its margin trading platform
USDT Begins OMG Network Migration
The gas-guzzling stablecoin on Ethereum begins its migration to OMG Network to minimize congestion issues
yEarn Announces yInsurance for DeFi coverage
The prominent DeFi yield aggregator announced yinsure.finance – a new kind of tokenized insurance
Binance launches DeFi Savings Product
The leading crypto exchange has launched a DeFi savings product featuring three stablecoins.
Wrapped Bitcoin Mints More BTC than Mined
The custodial version of Bitcoin on Ethereum has minted more WBTC this week than mined on the Bitcoin network
In Other News…
- xTokens launches xSNX for easy Synthetix Staking
- Ampleforth expands AMPL Geyser Liquidity Mining to 1inch’s Mooniswap
- Opyn is back in action with new WETH & YFI Puts
Stat Box
- Total Value Locked: $6.62 (up +19% from last week)
- DeFi Market Cap: $11.7B (up +19%)
- DEX 7 Day volume: $2.5B (up +4%)
- DAI supply: 433.8M (up +5%)
- Total DeFi users: 277,000 (up 5%)
Bonus Reads
- [Jon Itzler – Bankless] A framework for token value flows
- [Haseeb Qureshi – Dragonfly] Unbundling Uniswap
- [Lucas Campbell – Bankless] Why Pomp is wrong about ETH
- [Nadir Akhtar – Coinbase] Securing an ERC20 token for launching on Coinbase
- [Tushar Jain – Multicoin] Exploring the liquidity mining design space
Shoutout to Aave for supporting This Week in DeFi!
Aave is a leading lending protocol supporting dozens of the top DeFi tokens. Just today, Aave showcased their V2 upgrade complete with gas optimizations, new lending features, and governance upgrades in preparation for the LEND token migration to AAVE in the coming weeks.
We’ve done an extensive amount of coverage on Aavenomics – a new suite of protocol upgrades that incentives protocol safety through AAVE rewards and protocol fees. The best part about Aavenomics is that all of its parameters – including the logistics of Aave yield farming – are governed by tokenholders. There’s a ton of good activity happening on the Aave governance forum and we’d definitely recommend checking it out if you fancy yourself to be an Aavenger.
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Analyst at Bankless – one of the leading resources for open finance. Lucas is an active contributor to the DeFi ecosystem with appearances in other notable DeFi outlets including The Defiant and Our Network. He has years of experience working with dozens blockchain and token startups where he focused on token economics, marketing, and growth.
