To our DeFi Community,
Your participation is needed now more than ever. As DeFi continues to act as a black hole for ETH, governance will continue to play an increasingly important role in the expansion and sustainability of open finance. With over $1B in new liquidity fueling Ethereum’s hottest sector in the past 7 days alone, it’s impossible to ignore the rapid innovation taking form right before our eyes.
Best exemplified by yEarn and the release of its zero pre-mine, no initial offering governance token – YFI – the DeFi community is driving yEarn into one of the most active conversations around decentralized governance the sector has seen to date. Whether it be the vote to extend YFI liquidity mining incentives, distribute minting capabilities to trusted community members, or amendments to the governance process, the yEarn governance forum has 100k views in under a week of being live.
This discussion is complemented by prominent projects like Balancer debuting their first BAL votes, effectively amending liquidity mining to favor BAL liquidity, lower penalties on high fee pools, and add a small penalty to soft-pegged pools to incentivize useful liquidity. DeFi’s leading insurance platform, Nexus Mutual, also underwent a significant change to its Minimum Capital Requirement (MCR) increment, essentially sacrificing short term price appreciation for NXM in favor of long-term scaling to expand its cover capacity for DeFi users. Even mStable, the new kid on the block, immediately responded to community concerns about investor vesting with extended lockups and complete transparency about MTA emissions in the coming months.
Tying it all together, it’s clear that projects are finally taking governance seriously, and this trend is one that is only going to grow in the coming months. With Aave foreshadowing its new Aavenomics, tokenholders will be directly responsible for curating protocol incentives regarding both safety and economic rewards. KyberDAO’s first vote looks to modify it’s 0.2% fee allocation and Compound is undergoing a vote to upgrade the cDAI interest model.
This has lead to many DeFi Twitter accounts contributing to the conversation in the form of extended governance commentary – a significant upgrade from 2017 chatter of “number go up” and “when Binance”. All and all, DeFi has paved a foundation for users to create what Jesse Walden’s new fund Variant coined as the Ownership Economy.
In pursuit of a more equitable and innovative internet, I'm launching something new 🚀
@VariantFund is early-stage venture capital for crypto networks and founders building The Ownership Economy.
Whats that? I explain here: https://t.co/9Yl7U7WW0w
— Jesse Walden (@jessewldn) July 14, 2020
If you’ve yet to take a look at what’s going on under the hood, you’d be pleasantly surprised by the number of constructive governance discussions happening each and every day. To that, DeFi’s parabolic growth is set to proliferate throughout the rest of 2020 and beyond.
In the meantime, you can read about it all right here on DeFi Rate.
- Highest Yields: Bitfinex at 56.13% (risky & not recommended) or Aave at 9.04%
- Cheapest Loan: Maker at 0% with ETH collateral or Fulcrum at 1.33% APY
- Highest Yield: Nuo at 11.54% APY or BlockFi at 8.6% (centralized!)
- Cheapest Loan: dYdX at 4.00% APY or Aave at 4.53%
Liquidity aggregator yEarn has taken DeFi by storm with the release of its native governance YFI which can only be earned through liquidity mining.
Balancer debuted it’s first BAL votes to introduce a balFactor, changed feeFactors and a soft-peg penalty for BAL liquidity mining.
KeeperDAO debuts v1 of it’s pooled platform for anyone to easily capture arbitrage and liquidation profits in a permissionless fashion.
Aragon debuts ANT incentives for Uniswap v2 liquidity in tandem with a native LP dashboard.
In Other News…
- Synthetix-based dHedge hosts a testnet trading competition
- yEarn shares plans for V2 upgrade
- UMA releases a “yield dollar” with liquidity mining incentives
- mStable responds to criticism about early unlocks for MTA presale investors
- Nexus Mutual changes it’s MCR increment and debuts an NXM wrapper.
The Stat Box
- DeFi lending is starting to create two competing ecosystems
- Aave flips Compound for the #2 spot on DeFi Pulse
- Dai supply reaches ATH of 275M (New ATHs almost every week)
- DEX volumes hit $1.2B in 7 days
- Loopring accumulates $12M in its L2 Rollup
- DeFi total value locked surges 35% in 1 week
- Matcha crosses $20M in cumulative trade volume.
- Nexus Mutual passes Lightning Network on DeFi Pulse with $10M locked
- yEarn has over $477M locked up in its ecosystem
[Jesse Walden – Variant] The Ownership Economy
[Chris Burniske – Placeholder VC] The Balancer Thesis
[Matthew Black – Bankless] DeFi on Bitcoin
[Cooper Turley – yEarn] yEarn Governance Forum
[Andrew Lee – Karma DAO] Announcing Karma DAO: Token-Permissioned Networking
[Tony Sheng – Stuffed Blocks] YFI Ponzinomics
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Cooper is the Editor of DeFi Rate and an active contributor to leading DeFi media outlets like The Defiant, DeFi Pulse, and Bankless. He works with early-stage teams through Fire Eyes DAO to incubate governance models and grassroots community development. He is an ambassador to Set Protocol and an author of a weekly publication called Token Tuesdays. To stay up with Cooper, follow him on Twitter.