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【Dapp Pocket】DeFi Weekly Report - First Week of May

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【Dapp Pocket】DeFi Weekly Report - First Week of May

This Week Summary
This week marked the strongest week for cryptocurrency prices following Black Thursday, with major mainstream currencies led by Bitcoin performing well. BTC briefly rose above 9000 and ETH reclaimed the $200 mark. In the DeFi lending platform sector, MakerDAO added WBTC as the fourth collateral option to increase liquidity, Compound integrated the largest stablecoin USDT for lending services and modified the cDAI interest rate model, while Kava initiated CDP pre-registration and is expected to launch officially by the end of May. The largest crypto industry venture capital firm a16z completed the second cryptocurrency fund raising $515 million, aiming to build the future blockchain applications in new payment methods, DeFi, and more.

Key insights for this week include Tom Schmidt's perspective on the launch of oracle clubs and how the platform enhances security for oracles, as well as Ryan Sean Adams' unique view on a16z's venture capital: Has the opportunity for Ethereum killers ended? Our expert guest this week is Dominic Letz, CTO of Diode, discussing Web 3.0, blockchain, IoT, and Diode's P2P real-time streaming service. We will also delve into the importance of oracles for DeFi, a critical yet often overlooked issue by users, exploring the risks and how to address them. Additionally, with a16z's $5 billion funding, where will blockchain revolutionize our lives?

DeFi (Decentralized Finance) refers to decentralized financial services. Simply put, it operates in a decentralized manner to address issues in traditional finance such as slow transaction speeds, high costs, vulnerability to hacking, and potential misuse by countries or organizations. The current DeFi ecosystem offers interest-bearing loans, asset shorting, high leverage operations, and unique flash loan services.

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Author Bio

  • Raizel / Economics major at NCCU, got stuck with Bitcoin and turned to focus on DeFi
  • Thomas / DeFi enthusiast working in chip design in Boston
  • Anderson / Founder of Dapp Pocket, believes in DeFi deposits over traditional bank deposits

Week in Review

Bitcoin and Ethereum Prices Double Since Black Thursday

Following a significant surge last Thursday, Bitcoin has reclaimed the $9,000 mark for the first time since the Black Swan event 312 days ago. While some investors are concerned about Bitcoin's correlation with the stock market, the recent surge marked the first time BTC outperformed the S&P 500 since Black Thursday, with a price increase exceeding seven times that of the S&P. On the other hand, the second-largest cryptocurrency by market cap, Ethereum (ETH), has also shown remarkable performance over the last two months, doubling in value since dropping to $109 and rebounding. It is reported that not only retail investors but also digital asset manager Grayscale is currently buying Ethereum.

Source: https://decrypt.co/27066/ethereum-price-doubled-since-black-thursday-crash

Maker Community Approves Adding WBTC as Collateral for Dai Issuance

MakerDAO announced in a recent governance vote that MKR holders have approved adding Wrapped BTC (WBTC) as collateral for the Maker protocol. The addition of WBTC aims to enhance liquidity between Ethereum and DeFi. Currently, cryptocurrencies that can be collateralized to generate Dai include ETH, BAT, USDC added after Black Thursday in March, and now WBTC.

Source: https://blog.makerdao.com/wtbc-approved-as-collateral-by-maker-governance-generate-dai-now-with-bitcoin/

Compound Introduces USDT Lending Services

DeFi lending protocol Compound has started supporting stablecoin USDT lending services. A governance proposal initiated by Compound this week through its public testing governance system on "Adding USDT to the Compound Protocol" received a 90% approval rate. Notably, Polychain Capital had the highest number of votes in favor, followed by Compound CTO and co-founder Geoffrey Hayes.

Source: https://compound.finance/governance/proposals/1

Compound Passes Community Governance Proposal to "Change cDAI Interest Rate Model"

A proposal from crypto lending platform Dharma to DeFi lending protocol Compound regarding the "Change cDAI Interest Rate Model" improvement suggestion was overwhelmingly passed with a 97% support rate. This proposal aims to ensure that suppliers can still earn a certain return even when the capital utilization rate is below 90%, unlike the previous rule where suppliers earned almost nothing if the utilization was below 90%, and the interest rate fluctuated drastically above 90%. This new proposal is expected to mitigate these issues.

Source: https://compound.finance/governance/proposals/2

Kava Launches CDP Pre-Registration, Expected to Go Live by End of May

Reports indicate that cross-chain DeFi platform Kava has announced the opening of Kava CDP (Automated Debt Platform) pre-registration, with an official launch scheduled by the end of May. Kava recently updated its project roadmap earlier this month and is set to complete the Kava CDP mainnet launch for CDP and interoperability, and officially launch DeFi services for BNB.

Source: https://www.chainnews.com/news/646865214499.htm

Libra Association Vice Chairman: Libra Remains Committed to Blockchain Architecture, Plans to Launch Libra in Q4

Libra Association Vice Chairman Dante Disparte stated in an interview that since the release of the Libra whitepaper, Libra remains committed to blockchain architecture as the distributed ledger technology for Libra. Disparte emphasized that interoperability is one of the biggest challenges the global payment network faces. He believes that creating protocols for value transfer is the significant contribution of Libra. Disparte also mentioned that Libra is expected to launch in the fourth quarter of this year, hoping to resolve major issues such as regulatory compliance and transitioning from the testnet to the mainnet environment before that.

Source: https://www.chainnews.com/news/009572359547.htm
https://www.centralbanking.com/fintech/cbdc/7533891/libras-disparte-on-big-techs-move-into-digital-currency

a16z Raises $515 Million for Second Cryptocurrency Fund, Focused on Payments, Value Storage, DeFi, and Web3

It is reported that venture capital firm a16z has announced raising $515 million for its second cryptocurrency fund. The fund is focused on areas such as the next generation of payment methods, modernized value storage, decentralized finance (DeFi), and new incentive mechanisms for creators and Web 3.

Source: https://a16z.com/2020/04/30/crypto-fund-ii/

Other Highlights:

Key Data Metrics

This week's data covers from 2020/4/28 to 5/04, with price data being captured around 8:00 PM. TVL refers to Total Value Locked, an excellent indicator of platform scale. Data sources include: DeFi Pulse, CoinMarketCap, Maker official website, Compound official website, AAVE official website, etc.

DeFi Lending Platform Scale

DEX Scale

Dai APR

Coin & Token Value

Expert Insights

Tom Schmidt: Introducing oracle.clubs

Last Wednesday, Tom Schmidt of Dragonfly Capital introduced their oracle.clubs and its vision on his Twitter. Many DeFi platforms have been vulnerable to attacks due to single oracles being targeted. Oracle.clubs aims to increase the transparency and visibility of oracles, providing a single interface to display the latest status of multiple oracles, enabling users to quickly compare data and gather insights to mitigate such risks.

Source

Ryan Sean Adams: Opportunity for "Ethereum Killers" Seems to Be Closing

Regarding the recent $515 million cryptocurrency fundraise by venture capital firm a16z, Ryan Sean Adams, founder of Mythos, shared his thoughts on Twitter. He anticipates mainstream capital in the crypto industry shifting towards application layers rather than foundational layers, focusing on currency protocols and crypto banks. He believes that the opportunity for so-called "Ethereum killers" is diminishing.

Source

Expert Interview

In the third episode of the DeFi Experts Visit series, we expand our focus to the Web 3.0 ecosystem. We are delighted to have Dominic Letz, CTO of Diode, to discuss the importance of blockchain for the proliferation of the Internet of Things (IoT). He also talks about Diode's innovations in blockchain consensus and super-light clients, enabling even lightweight IoT devices to connect directly to the blockchain, achieving a truly decentralized IoT architecture.

Web 3.0: Permanent, Self-Operating Internet Infrastructure

The mission of Web 3.0 is to ensure that the Internet operates perpetually and autonomously, with services not relying on any single company or jurisdiction. Many of the daily Internet services we use today are provided by large tech companies, with data stored in large servers. Establishing a large-scale decentralized system to provide these services, which have become public goods, will allow competitive companies to allocate resources to more ambitious projects. Through marketization of storage and bandwidth, the network services industry will no longer be dominated by tech giants but will introduce numerous new competitors, significantly reducing costs and opening up innovation on this decentralized infrastructure.

Blockchain as Key to IoT Proliferation

For IoT devices, acquiring the correct time and verifying client authentication is a perennial cyclic dependency issue. Obtaining the current time is essential for verifying client authentication and determining if it has expired. However, the challenge lies in how to verify client authentication before querying the trusted source for the current time, as the trusted source needs to be authenticated first. Current Internet architecture handles server authentication through the Public Key Infrastructure (PKI), which has numerous security vulnerabilities prone to man-in-the-middle attacks. Implementing peer-to-peer secure data transmission through blockchain is a promising solution, with projects like IOTA established to address this issue. However, IoT devices often have limited hardware resources, making it challenging to transmit data directly to the chain, often requiring intermediaries, leading to single-point vulnerabilities.

Through the Diode protocol's point-to-point secure data transmission, a potential solution is presented, aiming to create a low-memory, decentralized verification system for IoT devices, enabling even devices like Raspberry Pi and Arduino to transmit data to the chain directly, realizing a truly decentralized IoT architecture.

Diode: Peer-to-Peer Real-Time Streaming Protocol

If IPFS aims to achieve a persistent and distributed storage interplanetary file system, Diode envisions a persistent, distributed verification, low hardware resource demand "interstellar streaming system," creating a TCP/IP protocol for Web 3.0. The Blockquick paper led by Dominic utilizes an enhanced version of the Nakamoto consensus mechanism, utilizing consensus reputation tables to allow nodes to actively verify miners' credibility with minimal memory requirements. This enables real-time peer-to-peer streaming transmission, even for devices like Raspberry Pi