To Our DeFi Community,

Boom. Another week in the books!

The week kicked-off with Balancer, the DeFi non-custodial liquidity and asset management protocol, launching Liquidity Mining. Users can now earn BAL tokens by becoming a liquidity provider. With these tokens following the SAFG framework, BAL has no economic rights and are non-transferable. They simply represent voting power for future protocol changes. However, it’s important to recognize that upon a successful distribution, nothing is stopping the protocol’s governance system from changing and/or lifting these restrictions. That’s the beauty of the SAFG. It’s a simple framework for legally distributing protocol tokens in almost any jurisdiction. Even Compound – a US company based out of SF – is taking a similar model with its public COMP distribution. Be on the lookout for that to begin later this month.

What’s interesting with the Balancer model is that the liquidity pools with the lowest fees will actually receive a higher allocation of BAL tokens (which are distributed pro-rata based on total liquidity). In other words, if two Balancer liquidity pools have the same amount of liquidity, the pool with the lower trading fees will receive more BAL on a weekly basis. As stated in our article this week:

“Ultimately, this creates a rather elegant design as pool creators (as well as liquidity providers) will have to factor in whether they’d prefer to play the short-game and potentially earn higher trading fees or play the long-game by minimizing trading fees to maximize their BAL earnings.”

Moreover, with many Balancer pools now charging marginal fees (some as low as 0.001%), we may see the protocol begin to siphon away volumes from Uniswap which charges 0.30% on trades. For those interested, you can stay up to date on Balancer via this Dune Analytics Dashboard from Matteo Leibowitz.

The week capped off with another amazing milestone. DeFi reached $1B in total value locked for the second time this year. With DeFi comprising of dozens of money protocols on Ethereum (and growing), it’s further evidence that our nascent industry is maturing into open financial infrastructure for the world. As intended. The wild part is that despite the milestone only being 4 months apart, the landscape looks surprisingly different. DeFi governance is trending. Bitcoin on Ethereum is hitting its stride while composability continues to flourish.

But we’re not done at a billion. The proliferation of DeFi will be realized with hundreds of billions in value locked. Maybe trillions. We’re still quite a ways away.

And that’s only a drop in the ocean of value.

Till next week, stay safe out there!

-Lucas


Interest Rates

DAI

  • Highest Yield: dYdX at 3.28% APY
  • Cheapest Loan: MakerDAO at 0% when using ETH as collateral or Compound at 0.94%
  • Biggest Mover: CoinList now offers a 2.4% APY (up from 0%) on Dai deposits. Institutions/accredited investors only
  • MakerDAO

USDC

  • Highest Yield: Nuo at 8.63% APY or BlockFi at 8.6%
  • Cheapest Loan: dYdX at 3.25% APY
  • Biggest Mover: Nuo borrowing rates decreased from 21% down to 13.11%

 


 

Top Stories

Balancer Kicks-Off Liquidity Mining

Liquidity providers can now earn BAL, the protocol’s native governance token.

OMG Network Launches Layer 2 Scaling

OMG Network – an Ethereum L2 scaling solution – deployed their Beta version on mainnet with support for Tether (USDT).

Numerai Closes $3M Token Sale for Erasure Expansion

The protocol behind Erasure closed a $3M investment round from Placeholder VC and Union Square Ventures.

DeversiFi Releases New Privacy DEX Using StarkWare

DeversiFi, a self-custodial DEX, deployed a new version of the privacy-focused DEX leveraging StarkWare scaling solution.

DeFi Reaches $1B TVL for Second Time Since February

The DeFi sector is holding over $1B in value across dozens of money protocols, reaching this milestone for the second time since February.

 


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