To Our DeFi Community,
Another week in the books chock-full of progression and innovation!
This Week in #DeFi
🦄 @UniswapProtocol launches V2
🚀 @argentHQ rolls out DeFi update
💉 @UMAprotocol releases first synthetic token
😯 @TheRealBlockFi experiences data breach
📈 @WrappedBTC surges on Ethereum
— DeFi Rate (@DefiRate) May 22, 2020
This week featured the launch of two new, key products for the DeFi ecosystem. First and foremost, one of Ethereum’s favorite money legos – Uniswap – went live with the second version of its liquidity protocol. After initially launching V1 on mainnet back in November 2019, Uniswap has quickly grown to become a key piece in the DeFi ecosystem. The launch features some fancy new bells and whistles including ERC 20 <> ERC 20 token pairs, a native price oracle, and a novel DeFi liquidity mechanism called flash swaps.
Want to learn more about the upgrade? Check out our coverage here.
The second new product launch came from the leading DeFi smart wallet, Argent. The London-based startup rolled out the full version of V1, featuring a suite of top DeFi integrations. With the update, users can now directly interact with our favorite DeFi products including but not limited to Set Protocol, PoolTogether, Aave, and Compound. The most unique piece to Argent’s mobile experience is that rather than taking users out of the product by using an in-app mobile browser (like WalletConnect), everything happens natively in the application. In other words, mobile users across the world now have a one-stop-shop for interacting with the growing ecosystem of Ethereum’s DeFi protocols. With Argent now getting more aggressive with their rollout, we can expect more DeFi protocols to launch within the app in the coming future. Maybe we’ll see more derivatives protocols like Synthetix and UMA or even some native insurance options from Nexus Mutual or Opyn.
The last key piece of news from this week comes from Wrapped Bitcoin (WBTC). After Maker governance elected to support the asset in early May, the Ethereum-based version of BTC has seen a massive increase in usage. Since May 11th, WBTC’s circulating supply has surged by 3x to a total of $35M in value. The increase comes as Maker offers the cheapest access to leverage for BTC holders on the market – a mere 1% APY on your holdings. For reference, centralized providers like BlockFi offer 5-10% while Compound offers borrowing rates at 3.45%. Aave is the only DeFi protocol to offer lower interest rates on WBTC than Maker, offering a slim 0.44% APY. However, the rising lending protocol has barely seen an increase in WBTC locked despite the spike in circulating supply.
Maker’s low stability fee has driven BTC to flip USDC in terms of DAI minted as 68% of all WBTC is locked in Maker. As of writing Dai from WBTC collateralizes 7.66% of the total supply while USDC sits at 7.57%. ETH still dominates the capital pool with 84% of all DAI coming from Ethereum’s native asset.
Are you tired of a 0% DSR? Cause I sure am.
It’s been roughly 2 months since the Dai Savings Rate (DSR) went offline and lending rates across the board have stabilized at historic lows. While most lending protocols have recovered from the <1% interest rate environment, the sector is averaging around 1-2% APY on Dai deposits. Compound continues to sit at the bottom of the standings, offering 0.53% APY for Dai holders. The highest yielding protocols are Aave and dYdX which offer depositors identical rates of 2.29% and 2.28% APY, respectively. This is followed by Fulcrum and Nuo which are offering its users 1.99% and 1.6% on Dai loans. That said, the permissioned crypto bank CoinList – which is only available to accredited investors and institutions – offers the highest rates on the market for Dai loans at 2.4%.
USDC rates have actually seen a fair uptick for some DeFi lending protocols. Most notably, Compound has increased its offering from a 30D average of only 0.83% to 1.2% APY. With that, dYdX offers a similar rate for its users as the interest rate is only a few percentage points higher at 1.39%. The highest yielding DeFi lending protocol for USDC deposits today is Nuo, which has seen a fair increase in the past month as it’s beating out its 30D average with 8.46% APY. BlockFi, the Winklevoss-backed crypto lending bank, continues to offer the best rates on the market with 8.6% APY on deposits for the Coinbase-issued stablecoin. All in all, if DeFi protocols want to better compete with centralized providers, we’re likely going to need to see the Dai Savings Rate come back online as the interest rate offered by Maker generally dictates the rest of the lending market.
Uniswap goes live with it’s highly ancipated V2 protocol upgrade. If you haven’t already, migrate your liquidity from v1 to v2 today!
Argent launched a suite of new DeFi integrations, further solidifying it’s lead as the leading mobile smart wallet.
UMA – the highly ancipated synthetic asset platform – launched it’s first priceless token, ETHBTC, letting users go long or short on ETH’s performance against BTC.
BlockFi – the leading centralized lending provider suffered a data breach in which users email addresses were leaked. Despite no funds being lost, this resulted in BlockFi seriously ramping up their security.
WBTC sees a huge spike in supply, with over $3M being minted and locked in Maker – ultimately spiking the supply of DAI to near ATHs
In Other News…
- [Adoption] /r/EthTrader DONUT Surges Following Reddit Launch & Issuance Halving
- [DAOs] Legal Battle Between Aragon vs. Autark Over Grant Payout
- [Events] IDEO CoLab Ventures Announces DeFi Product Validation Workshop
- [Funding] MetaCartel Ventures makes its first investment into Reflexer Labs
- WBTC mints another 1,499 BTC
- dYdX Perpetual Swaps Moon
- Dai supply nears ATHs
- Stablecoins comprise for 63.7% of all token volumes on Kyber
- TokenSoft Issues $4M to Investors Using Ethereum
- [Our Network] Issue #22: WBTC, Uniswap, Kyber, dYdX, and 0x
- [Ryan Selkis] On “Real” Crypto Trading Volumes
- [Nic Carter] The Last Word on Bitcoin’s Energy Consumption
- [Emanuel Coin] 5 Ways Crypto is like early Visa
- [Nemil Dalal] 3 Things DeFi Should Learn from the Financial Crisis
- [Andy Boyan] Ethereum’s Popularity Problem: Fees are Surging
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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.