Decrypting DeFi

Decrypting DeFi is Decrypt’s DeFi newsletter, led each week by this essay. Subscribers to the email get to read the essay first, before it goes on our site. Subscribe here.

Collection

Jul 29

What Makes a Blue-Chip Stablecoin?

Decrypting DeFi is Decrypt’s DeFi email newsletter. (art: Grant Kempster) With the non-profit stablecoin rating agency Bluechip off to the races, so too are concerns around how legit its rankings are. After all, how has BUSD, a stablecoin that the New York State Department of Financial Services (NYDFS) recently halted, earned the top ranking, while USDT, the market’s largest stablecoin by market cap, is at the bottom of the barrel? It all boils down to something called SMIDGE, the six qualities…

NewsDeFi4 min read

Jul 16

Come for The Token, Stay for The Product. Right?

Decrypting DeFi is Decrypt’s DeFi email newsletter. (art: Grant Kempster) Launching a token is a delicate task. On the one hand, you’ll thrill your die-hard audience of early adopters, rewarding them for sticking it out for so long. On the other, you invite hungry whales to come and harvest your project for its incentives, often hogging the lion’s share of the tokens being dished out (before flipping them for a profit shortly after). This latter outcome is especially bad if these tokens also ser…

NewsDeFi5 min read

Liam J. KellyJul 16, 2023

Jul 8

A Fraction of its Former Highs, What’s Next for DeFi?

Decrypting DeFi is Decrypt’s DeFi email newsletter. (art: Grant Kempster) It’s been a pretty dull bear market of late. Bitcoin has flirted with $30,000 for some time, and Ethereum has only briefly managed to get out in front of that pesky $2,000 mark. It feels like a lot of the same in DeFi. Derivative changes lead different projects to temporarily swap TVL for a period; a week later that same money flows back into the first project. Even Uniswap, one of the niche’s defining projects, barely reg…

NewsOpinion3 min read

Liam J. KellyJul 8, 2023

Jun 3

Hop Protocol’s ‘Sybil Hunter’ Payout Unveils Powerful New Airdrop Tool

Decrypting DeFi is Decrypt’s DeFi email newsletter. (art: Grant Kempster) Sybil farming ahead of alleged airdrops has become commonplace in crypto. At the first whiff of a new token, hordes of wallet addresses get to work randomly interacting with a new project in hopes of generating loyalty signals and raking in the yet-to-be-launched cryptocurrency. Airdrops typically retroactively reward a community’s “most loyal users.” Loyalty, though, can mean a lot of different things. Is it measured by t…

NewsDeFi3 min read

Liam J. KellyJun 3, 2023

May 27

When DAOs Self-Execute—What Could Go Wrong?

Decrypting DeFi is Decrypt’s DeFi email newsletter. (art: Grant Kempster) This past week we got two examples of when self-executing proposals go wrong for DAOs. One proposal on Aave resulted in roughly $110 million in assets freezing after the proposal passed, and another on Tornado Cash saw a crafty proposer make off with roughly 372 ETH, worth over $670,000. The Aave proposal has been fixed, and a new proposal executed the fix. As for Tornado Cash, the proposer has made a new proposal to retur…

NewsDeFi4 min read

Liam J. KellyMay 27, 2023

May 20

DeFi Heavyweight Lido Finance Mulls LDO Staking, Token Buyback

Decrypting DeFi is Decrypt’s DeFi email newsletter. (art: Grant Kempster) Liquid staking giant Lido Finance is finally looking to shake up its tokenomics. Specifically, as alluded to in a new proposal, members of the community are looking to add a staking feature to LDO. Remember: In order to stake directly to the mainnet, users need 32 ETH or nearly $60,000 at today’s prices. Given the high barrier to entry, liquid staking services like Lido have emerged, letting users deposit any amount of ETH…

NewsDeFi3 min read

Liam J. KellyMay 20, 2023

May 13

Eigen What? How EigenLayer Is Putting $34B in Staked Ethereum Back to Work

Decrypting DeFi is Decrypt’s DeFi email newsletter. (art: Grant Kempster) Crypto Twitter has been awash the past few weeks with talk of a strange new protocol called EigenLayer. Some are going as far as calling it the next Ethereum Meta, while others are already whipping up speculative airdrop guides. And at least one person is doing God’s work, helping us all pronounce the project’s name. So, what in the hell is EigenLayer? Well, think of it as being like blockchain security-as-a-service. Inste…

NewsDeFi3 min read

Liam J. KellyMay 13, 2023

May 6

Ethereum Staking Deposits Outpace Withdrawals by $189M in ETH

Decrypting DeFi is Decrypt’s DeFi email newsletter. (art: Grant Kempster) With Ethereum’s historic Shanghai upgrade completed and the dust (more or less) settled, it’s time to revisit some of the key staking takeaways. The Shanghai upgrade allowed Ethereum stakers to finally withdraw their funds from the mainnet. Some had been waiting to do so since the staking feature was first introduced in December 2020. Perhaps the most important development revealed by the event is that Kraken U.S. staking…

NewsDeFi

Liam J. KellyMay 6, 2023

Apr 15

$598M in Ethereum Still Waiting on Updated Withdrawal Credentials: Nansen

Decrypting DeFi is Decrypt’s DeFi email newsletter. (art: Grant Kempster) Ethereum defied the odds again. With the latest Shapella upgrade executed, developers have again demonstrated that it’s possible to swap out key parts of a $252 billion rocket mid-flight. The last time they pulled off such a feat was last September with “the merge.” Unfortunately, the same can’t necessarily be said for the 18.5% of Ethereum network validators that don’t have the correct validator credentials. Per data draw…

NewsDeFi

Liam J. KellyApr 15, 2023

Apr 8

3 Ways DAO Treasuries Will Hit $100B in Balances

Decrypting DeFi is Decrypt’s DeFi email newsletter. (art: Grant Kempster) The cumulative dollar amount across all DAOs hit a new milestone last week of $25 billion, per data from DeepDAO. That’s some serious cash, with this figure pegged at only $10 billion at this time last year. The new milestone was certainly helped along by the launch of Arbitrum’s whopping $4.4 billion DAO two weeks ago. Taking a closer look at the largest treasuries, in fact, reveals that three of the top five projects are…

NewsDeFi

Liam J. KellyApr 8, 2023

Apr 1

An Arbitrum Airdrop and Two zkEVM Launches: Welcome to Rollup Season

Decrypting DeFi is Decrypt’s DeFi email newsletter. (art: Grant Kempster) A layer-2 airdrop and two mainnet launches has the market clamoring for more scaling action. On March 23, Arbitrum finally distributed its highly-anticipated ARB token, decentralizing its inventory into the hands of its most dedicated users. The hype was so fierce, though, that it took down the project’s main website as well as that of Arbiscan—Arbitrum’s Etherscan equivalent—because eligible wallets could claim their aird…

NewsDeFi

Liam J. KellyApr 1, 2023

Mar 25

All Centralized Firms Are Alike—But Every DAO Is Decentralized in Its Own Way

Decrypting DeFi is Decrypt’s DeFi email newsletter. (art: Grant Kempster) Just as DAOs find more traction in the industry, so too have a series of different tools to measure how decentralized autonomous organizations stack up alongside one another. Now the question emerges: What makes one DAO better than another? Sure, you can use the size of their treasury as a metric, but it’s also important that an autonomous organization is also decentralized, something one may crudely measure by determining…

NewsDeFi

Liam J. KellyMar 25, 2023

Mar 18

How Damaging Was the Euler Hack to DeFi’s ‘Money Legos’ Promise?

Decrypting DeFi is Decrypt’s DeFi email newsletter. (art: Grant Kempster) DeFi faced its very own contagion event this past week after Euler Finance was drained of nearly $200 million via six flash loans and a vulnerability. It was a major blow to the sector; Euler had been seen as the next great building block after Compound and Aave. Beyond flinging long-tail assets into the protocol and gambling risk à la Cream Finance, the popular crypto lender created isolated lending pools to help silo col…

NewsDeFi

Liam J. KellyMar 18, 2023

Mar 11

Coinbase’s Plan to Go ‘On-Chain Native’ Is a Smart Play for Fees

Decrypting DeFi is Decrypt’s DeFi email newsletter. (art: Grant Kempster) Founded in 2012, Coinbase used to just be a simple market to buy and sell Bitcoin. A lot has changed since, and the decade-old firm is working to keep up with the times. Last month, Coinbase announced the launch of its native layer-2 scaling solution called Base. It’s built using the OP Stack, which is to say the new product is using a lot of Optimism’s technology. It’s an interesting play, especially for a highly-centrali…

NewsDeFi

Liam J. KellyMar 11, 2023

Mar 4

Just 16% of Ethereum Stakers Are in Profit Ahead of Shanghai Upgrade

Decrypting DeFi is Decrypt’s DeFi email newsletter. (art: Grant Kempster) Ethereum’s Shanghai upgrade is just around the corner and that means users are starting to place their bets. All of the attention on this specific upgrade revolves around one thing: withdrawing staked Ethereum. Since staking launched back in December 2020, the network just embarking on its journey to a proof-of-stake consensus algorithm, those who locked up their funds haven’t been able to withdraw those funds. That’s expe…

NewsCoins

Liam J. KellyMar 4, 2023

Feb 25

Borrowing Against a Bored Ape NFT—What Could Go Wrong?

Decrypting DeFi is Decrypt’s DeFi email newsletter. (art: Grant Kempster) Non-fungible tokens (NFTs) are getting a major facelift. “Life was a whole lot better when you bought a jpeg, enjoyed the jpeg, and didn’t expect anything to come with it,” wrote Robness V2 on Twitter earlier this week. It’s a comment on NFTs as exclusively pieces of art; pico top pet-rockness. They were to be admired in all their pixelated glory somewhere on the blockchain. They were maybe swapped from time to time, with…

NewsDeFi

Liam J. KellyFeb 25, 2023

Feb 18

DAI Finds Its Spark With Spark Lend

Decrypting DeFi is Decrypt’s DeFi email newsletter. (art: Grant Kempster) Last week a Maker DAO cluster launched a new lending market. Think Aave, because, well, it is actually using much of the same code. And the term cluster here is intentional; the group of developers who built what is now called Spark Protocol were quite literally called the “Crimson Cluster.” Now, they’re called Phoenix Labs, and they’re led by protocol engineer Sam MacPherson. He told Decrypt that the key motor behind the…

NewsDeFi

Liam J. KellyFeb 18, 2023

Feb 11

BlackRock ETF? There’s a Token For That

Decrypting DeFi is Decrypt’s DeFi email newsletter. (art: Grant Kempster) The integration of real-world assets, or RWAs, into the world of DeFi has been one of the hottest narratives so far in 2023. And emerging just in time to meet that red-hot trend head on is a crypto startup looking to soak up the interest. This week, Switzerland-based Backed Finance launched a tokenized version of a BlackRock ETF (CSPX) that includes tons of big names like Apple, Microsoft, Amazon, Alphabet, and 496 other l…

NewsDeFi

Liam J. KellyFeb 11, 2023

Jan 28

Fluidity Aims to Reward Actual DeFi Users Over Profit Farmers

Decrypting DeFi is Decrypt’s DeFi email newsletter. (art: Grant Kempster) If you’ve been in DeFi for a while, you already know about yield farming and the Curve Wars. But what about utility farming? A new project called Fluidity claims to be ushering in a new era for handing out crypto coins for different projects. This time, it wants to reward active users—not just mercenary farmers. Previously, whales would simply deposit their massive holdings into a new protocol, harvest its token launch, wi…

NewsDeFi

Liam J. KellyJan 28, 2023

Jan 21