ver the past six months, DeFi, the colloquial term for decentralized finance built on open-source blockchain technology, has experienced explosive growth – the total amount of value under contract has ballooned from under $1b to over $12b in just 6 months.
If 2020 was the “summer of DeFi,” it was certainly capped off recently by the much anticipated Uniswap token launch. Any wallet address that had ever traded or supplied liquidity to Uniswap, an automated market maker built on Ethereum that has a triumphant rainbow unicorn as its logo, was rewarded with 400 free UNI tokens – an amount equal to $1,600 at the time of distribution.
So what makes the Uniswap token launch so unique and just how close did the project come from seeing its own demise?
Given DeFi operates in a world of open-source code, a project named SushiSwap, led by pseudonymous developer Chef Nomi (yes, this is real), forked (read: stole) the code base of Uniswap and attached its own native token to incentivize participation in the new SushiSwap protocol. In nearly a week, SushiSwap nearly surpassed the total liquidity of Uniswap at over $1b – a true existential risk to Uniswap’s long term viability.
In turn, Uniswap was forced to consider its own token, in an attempt to claw back its vital liquidity and turn the competitive tide. The Uniswap team and its VC backers successfully distributed 60% of total UNI tokens to the protocol’s 250k users and 50k LPs – a nod to the community that has supported over $20b of trading volume on Uniswap.
Ultimately, using some very savvy token design and rainbow unicorn magic, one of the oldest and most foundational pieces of DeFi has taken back its throne for now. Stay tuned...
Behind MoneyLion’s shift to an ‘à la carte’ subscription model - Throughout its history, the company has offered subscription bundles at varying price points. By 2019, it offered a free checking account; a Credit Builder Plus membership that included managed investing and InstaCash (cash advances) at $19.99 per month, along with a $9.99 Instacash with banking tier. Now, MoneyLion has unbundled its offerings into smaller, bite-sized pieces: checking accounts at $1 per month; managed investing at $1 per month; and a Credit Builder Plus bundle, which includes access to credit builder loans and banking, for $19.99 a month. Read more
NextCapital raises $30m in Series D funding - Congratulations to portfolio company NextCapital, a digital service for retirement planning, raised $30m in Series D funding led by Francisco Partners. Read more
This is why residential real estate is becoming more popular as an investment option - Portfolio company IMMO explains to German newspaper WirtschaftsWoche how it helps financial giants to buy up apartments, refurbish, and rent them out. Read more
Uniswap’s DeFi Stimulus Check
Uniswap takes lead over SushiSwap less than 24 hours after SUSHI Rewards drop - Uniswap has more value locked (TVL) than its upstart rival, SushiSwap, less than a day after SUSHI block rewards for liquidity providers (LPs) dropped from 1,000 tokens to 100. Read more
SushiSwap receives 130,000 UNI tokens from Uniswap, crypto community outraged - Decentralized exchange platform Uniswap launched its own governance token UNI on September 17th, and 130,000 UNI tokens were gifted to its hard fork SushiSwap. Uniswap has minted 1b tokens that will be released to the community in the next four years. Read more
Industry News
Ant launches blockchain-based cross-border trade platform ahead of $35b IPO - Its new platform “Trusple”, a contraction of “trust made simple”, is based on the company’s blockchain technology Antchain. Buyers and sellers can upload trading orders to the platform, which automatically generates a smart contract with information such as logistics. The banks of both buyers and sellers can then process payments using Antchain. Read more
Leaked Treasury documents prompt fresh calls for updated anti-money-laundering regulations - Many former top Treasury officials have joined banks in saying that existing regulations don’t give them the tools they need to better surveil the trillions of currency transactions they handle every day. Rather, they report so much data—many with unnecessary red-flagged transactions—that the information flow often obscures illicit activities. Read more
Walmart, Goldman partner to offer credit to marketplace sellers - Initially, approved sellers will have access to lines of credit from Marcus between $10,000 and $75,000, and plans are to substantially increase the maximum line amount available in the future. The rates are competitive, with the most creditworthy businesses qualifying for the lowest rates. Read more
ECB's Christine Lagarde pushes for digital Euro - The idea of an official digital coin has been touted by several countries and companies worldwide as of late, particularly as the pandemic moves the world in a more digital direction. However, despite the newly mainstream status for digital coins, regulators still want to see cryptocurrencies, including stablecoins, heavily policed. Read more
JPMorgan is set to pay $1b in record spoofing penalty - Spoofing typically involves flooding derivatives markets with orders that traders don’t intend to execute to trick others into moving prices in a desired direction. The practice has become a focus for prosecutors and regulators in recent years after lawmakers specifically prohibited it in 2010. Read more
TransferWise doubles profits despite ‘volatility’ from pandemic - The 10-year-old money transfer company has expanded rapidly since the co-founders started it as a way to reduce the fees they paid to move funds between London and their native Estonia. In the 12 months to March 31 it reported a pre-tax profit of £20.4m, up from £10.1m in the previous year. Revenues rose 70 per cent to £302.6m. Read more
Veterans of FX’s wilder days are loving Bitcoin’s volatility - There’s been a lot of action in the past year for those who heard the crypto market calling. Bitcoin, the largest digital coin, dropped from about $13,800 in June 2019 to below $4,000 in March. It’s currently hovering around $10,000. The monthly price change for Bitcoin so far this year averages 8%. Read more
Citigroup halts market making in retail options - Its decision to pull out of retail options leaves Morgan Stanley as the sole major Wall Street bank in the business, which is dominated by market makers such as Citadel Securities, Susquehanna, Simplex Trading and Optiver. Citi pulled out because it was unable to compete in a technology arms race to be among the fastest and most reliable venues on Wall Street, people familiar with the talks said. Read more
U.S. household net worth hits highest level ever - The component that was most severely affected by the pandemic was the value of corporate equities owned by households, which fell 25% in the first quarter from the end of 2019. But most of those losses were recouped in the second quarter, when the value of equities stood at $19.52t, just 8.3% below their year-end level. Read more
SEC, OCC issue first regulatory clarifications for stablecoins - In recent months, the OCC has told banks they can provide services to crypto startups and floated a national payment charter for exchanges and other fintech firms. According to the letter, stablecoin issuers can point to the fact that regulated banks hold their reserves to convince the general public that they are safe. Read more
Checkout-free shopping: it’s bigger than you think - Purchasing goods without having to check out saves customers time and annoyance while allowing retailers to upgrade their operations. While the promise of convenience and streamlined operations fuels funding for checkout-free technology, replacing existing payment solutions is an even bigger opportunity. Read more
How traders use google searches to see the economic recovery in real time - The speed of the COVID market crash and recovery happened so fast, it was clear that traditional numbers weren’t timely enough to get a read on what was going on. This Bloomberg podcast digs into how Arbor Data Science was able to monitor thousands of different categories of Google Search queries to know instantly when the recovery started and what sectors of the economy were leading the way. Read more
The IRS sets a trap for cryptocurrency tax cheats - The U.S. Internal Revenue Service plans to alter the standard 1040 form by putting this question on the front page: At any time during 2020, did you sell, receive, send, exchange or otherwise acquire any financial interest in any virtual currency? The taxpayer must check the box “Yes” or “No.” Read more
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