Hello Defiers! Here’s what’s going on in DeFi:
Users coming back to DeFi after meltdown
Celsius to use Chainlink oracles in decentralization push
MakerDAO votes on whether to shut down Single Collateral Dai
Interest-gaining-based system to reward creators spurs deep fake video of Vitalik
And more 🙂
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Trust in a Trustless Financial System is Returning
Assets held in decentralized finance are ticking up for the first time since the market meltdown two weeks ago with ETH locked in DeFi gaining 18% in the past seven days to 2.8 million, according to DeFi Pulse. That’s still down from the record of 3.2 million on Jan. 28.
Image source: DeFi Pulse
With ether held in DeFi platforms climbing, total value locked in the ecosystem rose almost 10% in the past week to about $590 million. A recovering ETH price is also helping total value locked climb.
Users had pulled their digital assets from DeFi platforms as ether plunged more than 40% in one week and MakerDAO’s liquidation system broke down on March 12 on what came to be known as its “Black Thursday.” Users pulling assets from the system and ETH price plunging caused value locked to slide to as low as $487 million on March 22 from a record $1 billion.
Recovery Led by MakerDAO
The biggest contributor to the increase in value locked is MakerDAO, as ETH in the platform rose by 130k ETH, or 6%, in the past seven days to 2.2 million ETH, a sign that 0.5% cost to borrow Dai with ETH collateral is luring users back in.
After Maker, smaller projects by value locked, Aave and Uniswap, were the biggest contributors in the recovery in terms of amount of assets added. ETH in the other two DeFi heavy wrights, Compound Finance and Synthetix dropped.
Bitcoin in DeFi is flat over the past seven days but jumped 6.5% in the past month. Still, at only 1.9K BTC, it represents a small fraction of total value locked. Dai remained flat at 12.2 million.
Celsius to Use Chainlink Oracles in Decentralization Push
Lending platform Celsius Network plans to use blockchain data company Chainlink’s price feeds to calculate interest payment amounts, according to an emailed press release.
Chainlink, which uses a network of independent nodes to collect data and feed it to applications, is popular in decentralized finance with platforms including Synthetix and Aave using the service to connect smart contracts to the outside world and reduce dependency on centralized parties. Celsius, which has more than $600 million of assets, or roughly the same as all of DeFi, holds custody and centrally manages users’ funds.
With the move to use Chainlink’s oracles, Celsius seeks to offer a more decentralized and transparent service, as the integration “creates a smart contract audit trail of its lending operations,” the press release said.
With the partnership, Chainlink will use Celsius’ treasury management solution for its BTC and ETH cryptocurrencies.
MakerDAO Likely to Shut Down Sai Next Month
The MakerDAO community is participating in a poll on whether to shutdown the Single Collateral Dai system through an executive vote on April 24. So far, 95% of participants have voted to shutdown SCD, with 2% of MKR holders voting.
Image source: vote.makerdao.com
MakerDAO started accepting collateral other than ether to back its Dai stablecoin last year, creating Multi-Collateral Dai. SCD, also known as Sai, is the previous version of the stablecoin, backed only by ether. The Maker Foundation is putting the shutdown for a vote as Dai in circulation has largely overtaken Sai, and as the community weighs the resources needed to manage two credit systems, especially when the Dai system broke down during the market crash two weeks ago.
A shutdown means collateral in the SCD system will be returned to borrowers, who would normally need to pay a so-called stability fee when closing out their debt. The community still needs to decide on whether to tax collateral owners in the Sai system at shutdown, or forgive their stability fees.
Money Printer Meme Spurs Deep Fake Video of Vitalik
The latest installment of Money Printer Go Brrr is a deep fake video of Vitalik Buterin singing Money by Pink Floyd. Highly recommend you watch here.
The “Money Printer Go Brrr” meme has served as comic relief for crypto Twitter’s frustration that central banks are printing billions to stimulate economies ravaged by the coronavirus epidemic, which some argue debase currencies and cause inflation, instead of actually helping those in need.
Beyond the meme, the way the video came about is interesting in itself. It was created by a project called MemePool, which allows users to stake (or deposit) Dai into a smart contract, and the interest generated from the staked Dai goes to support content creators. The community of stakers can vote on which deep fake videos the project will create next, and participants are able to “unstake,” and get all their DAI back.
CoinGecko’s “How to DeFi” book is targeted at beginners interested to learn more about the fast-growing DeFi ecosystem. CoinGecko Earn is a newly-launched section on CoinGecko providing an overview of the various lending platforms with information on return rates, security audit records, DeFi risk scores, and more.
Daily activity across all dapps running on Ethereum was up 104% year-on-year, with DeFi activity up 294%. Activity on TRON rose 8%, while activity on EOS plunged 80%.
Tron Launches Dai Copycat
Tron founder Justin Sun launched a dollar-pegged stablecoin backed by TRX tokens called Djed, in a system that closely resembles MakerDAO’s Dai. Two data dashboards for Djed looks almost exactly like MakerDAO’s portal and Mike McDonald’s mkr.tools.
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About the author: I’m Camila Russo, a financial journalist writing a book on Ethereum with Harper Collins. (Pre-order The Infinite Machine here). I was previously at Bloomberg News in New York, Madrid and Buenos Aires covering markets. I’ve extensively covered crypto and finance, and now I’m diving into DeFi, the intersection of the two.