Decrypting DeFi

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

May 20

Lido Finance is a popular staking platform for cryptocurrencies. Source: Shutterstock

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

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

May 6

Ethereum has merged. Image: Shutterstock

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

Apr 15

ERC-20 tokens are the standard token built on Ethereum. Image: Shutterstock.

$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

Apr 8

A DAO is a decentralized autonomous organization. Image: Shutterstock.

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

Apr 1

Rollup technologies have become quite popular in crypto. Image: Shutterstock.

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

Mar 25

It ain't easy comparing DAOs. Image: Shutterstock.

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

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

Mar 11

Base is Coinbase's Ethereum layer-2 network. Image: Coinbase

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

Mar 4

Shanghai is an upcoming Ethereum upgrade slated for April 2023. Image: Shutterstock.

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

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

Feb 18

A spark is all it takes to start a fire. Image: Shutterstock

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

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

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

Jan 21

Wooden house or barn burning on fire at night. Image: Shutterstock

$4.6 Billion in Ethereum Up in Flames Since EIP-1559

Decrypting DeFi is Decrypt's DeFi email newsletter. (art: Grant Kempster) Over the past week, Ethereum is burning hotter than ever. As part of EIP (Ethereum Improvement Proposal) 1559, launched all the way back in August 2021, the protocol has been burning ETH (crypto lingo for destroying) at a massive rate. As per EIP-1559, a portion of all Ethereum transactions are destroyed: a piece of every NFT trade, yield strategy, and even simple token transfers. It’s all getting torched. Since EIP-1559 w

Jan 14

Why Ethereum Bulls Are Turning to LSD

Decrypting DeFi is Decrypt's DeFi email newsletter. (art: Grant Kempster) The second week of the new year has been a heady week for the coins, with Bitcoin, Ethereum, and Solana racking up serious gains. Zooming in closer, however, the market’s biggest winners are none other than liquid staking tokens, also called “liquid staking derivatives” (LSD). The tokens behind projects like Lido Finance (up 50.3%) and Rocket Pool (up 23.3%) have absolutely soared over the last few days. The reason? Ethere

Dec 27

What Would Crypto Look Like Without Centralized Exchanges Like FTX?

Decrypting DeFi is Decrypt's DeFi email newsletter. (art: Grant Kempster) Whether the politicians currently talking tough about the latest crypto crisis agree or not on the matter, crypto isn’t dead (yet). Or at least the crypto that exists outside of a particular three-letter centralized crypto exchange isn’t dead yet. Along with a harsh lesson for many, the collapse of FTX also presents an interesting question for DeFi (which some argue is the only real crypto thing that currently exists): Wha

Dec 19

Large token holders are called whales in crypto. Image: Shutterstock.

How Balancer DAO Achieved Peace With a Clever Whale Named Humpy

Decrypting DeFi is Decrypt's DeFi email newsletter. (art: Grant Kempster) If there’s a DAO, there’s a whale—and it’s probably vying for domination. In this case, Balancer has taken an interesting pivot against a crypto cetacean roaming its digital waters. After roughly eight months harvesting the popular DeFi project’s coin, Humpy has agreed to a peace treaty of sorts. Yes, Humpy is really the name the community gave to this whale. Balancer is a portfolio management tool that lets anyone spin up

Dec 10

SushiSwap is a DeFi protocol. Image: Sushiswap

Why Some SushiSwap Stakers Are Jumping Ship

Decrypting DeFi is Decrypt's DeFi email newsletter. (art: Grant Kempster) SushiSwap, the popular decentralized exchange, made a tough call this week as it navigates the ongoing bear market. On December 5, project lead Jared Grey proposed that all staking fees on the platform be redirected to the project’s treasury for a year. He added that a new tokeonomics model for the project is also “on the horizon,” suggesting quite a shake-up for SushiSwap. Currently, users that stake their SUSHI—the proje

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