In brief
- DeFi Money Market, a project backed by Tim Draper, has raised $6.5 million in a token sale.
- It’s an Ethereum-based yield farm that claims to offer consistent interest rates.
- The interest rates are backed by real-world assets, mostly cars.
A project backed by top Silicon Valley VC and billionaire investor, Tim Draper, has raised $6.5 million in a token sale.
The sale was for the governance token of a decentralized finance (DeFi) ecosystem called the DeFi Money Market. Termed the DMM, it’s an Ethereum-based yield farm that claims to offer consistent interest rates of 6.25% on Ethereum (ETH), decentralized US dollar stablecoin DAI and centralized US dollar stablecoin USDC. That means if you lend these coins, in theory you get a consistent rate of interest.
The public sale was an “Initial DEX Offering” that took place across two decentralized exchanges. Decentralized exchanges are those that don’t assume custody over your Bitcoin, unlike centralized exchanges like Binance.
DeFi governance is finding its Balance.
Balancer Labs announced today the launch of the Balancer governance protocol token BAL on the Ethereum mainnet. The distribution closely follows the mainnet release of Compound’s COMP governance token that saw its value skyrocket 500% last week.
In just one day of trading so far, BAL has more than tripled in price—from $6.65 to almost $22—in a sign of just how valuable it is for DeFi users to have a say in the development of these protocols.
BAL is live!...
The token sale concerns the governance token, which is used to vote on the future of the network. Those holding it can vote on what new tokens should be added, or what new real-world assets should be used to back up these tokens.
The interest rates are backed by “real-world, income generating assets,” which DMM claims “don’t fluctuate in the interest rate they pay, helping you find stability in the volatile world of crypto.”
All of DMM’s $8.8 million of assets are backed by cars; interest rates will be pegged to the worth of cars like the 2008 Ford Expedition and the 2000 Lincoln Navigator. Cars often depreciate in value over time, but the loans are “overcollateralized,” meaning that the value of the assets should exceed that of the loan.
Huobi and Chainlink are among the project’s partners, as is Tim Draper’s network, the Draper Venture Network.
Those from countries with larger gross domestic product (those with the biggest economies), such as the US and China, will have more members. Members are the leaders of their region and they get a larger cut of the profits.
The rapidly growing decentralized finance industry has a new top crypto.
Compound’s COMP token went live for trading yesterday, and it has already overtaken Maker, the previous king of DeFi, in market capitalization by a wide margin.
COMP not only surpassed MakerDAO, it now has close to twice as much total market cap at roughly $859 million versus $551 million, according to DeFi data tracking website DeFiMarketCap. What’s more, the addition of COMP to the ranking has sent the total market capit...
The token sale follows in the heels of decentralized lending platform Compound’s recent distribution of its nascent COMP tokens (albeit not a token sale). These tokens have shot up in value since they were handed out, with the token having reached a $550 million market cap.
While Compound was already DeFi’s biggest project, its recent growth shows that there’s real interest in the DeFi space, and DMM will be hoping to replicate its success.
Editor's note: This article was updated to remove a reference stating that Coinbase is a partner of DMM. Coinbase told Decrypt that they have not formed an official partnership with DMM.
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