Money Legos keep stacking! Finance Redefined 4/21-4/28


Happy Wednesday fellow DeFi degens! 

I used to be anticipating to spend a big portion of this version of Finance Redefined analyzing Aave’s liquidity mining program. There was some nervousness from traders that the emission of two,200 $AAVE per day (which might translate to roughly 5% of the ecosystem reserve fund of two.8 million AAVE per 12 months) may find yourself dragging down the token’s value as farmers earn and dump.  

Turns out, it is pointless: this system’s an unmitigated success. The AAVE token is up practically 15% for the reason that launch of liquidity mining to $462, and the protocol’s complete worth locked determine has surged to $11.8 billion — up from simply over $7 billion since liquidity mining started.

Well-researched liquidity mining works. Only query now could be, if this system is discontinued, how a lot of that TVL will likely be sticky? 

Other narratives to keep an eye fixed on: 

Money legos keep stacking

At the beginning of the 12 months there was hypothesis that in 2021 DeFi would see one thing of a novelty: one protocol buying one other, probably by way of a governance token buyout. The Synthetix 2021 roadmap specifically opened the door to such a risk, evaluating it to acquisitions in TradFi and trying to Yearn’s merger/acquisition/collaboration spree for inspiration. 

Large-scale mergers and acquisitions have but to play out, nevertheless. There are some smaller examples brewing — Inverse Finance is currently trying to purchase out Tonic for some $1.6 million, for example — however as a substitute what we’re seeing is a growth in deep integrations on the protocol and frontend layers.

https://twitter.com/InverseFinance/status/1387335256462798848

On Monday, Badger DAO and RenVM launched the Badger Bridge, a brand new interface for depositing native BTC into Badger vaults with only a few clicks. The integration stands out for 2 causes. One is that it’s so clearly useful for each events: an idiot-proof method to earn yield on BTC is engaging for hodlers, that means Ren will see an uptick in exercise on its bridge (and subsequently protocol charges), whereas Badger likewise will get a lift in TVL.

The different angle, nevertheless, is the willingness with which Ren subordinated its branding, letting Badger — which, I’d argue, has the stronger neighborhood — take over the touchdown web page. Were it not for absurd token valuations, one may need been an acquisition goal for the opposite, given the plain wants every fills — however by working collectively Ren will get every part they’d need from a protocol like Badger, and the identical applies to Badger and Ren.

This raises the query: why hassle with takeovers when a pleasant integration can accomplish the identical results?

Another prime instance is immediately’s Balancer-Gnosis Protocol announcement. You can see the details in my piece, however successfully Balancer v2 is bringing some neat improvements to AMM liquidity provision and Gnosis’ CowSwap is a liquidity aggregator and offchain transaction batching protocol that may reportedly in the reduction of on miner extractable worth. The mixture of the 2 will make for a considerably extra feature-rich DEX from each a LP and dealer’s perspective — presumably even positioning the Balancer-Gnosis-Protocol as a Uniswap v3 competitor.

In an announcement to Cointelegraph, Balancer CEO Fernando Martinelli famous that such a deep collaboration can be inconceivable within the conventional finance world:

“Each of the two protocols would be impossible to implement in the traditional finance world simply because there is no such thing as trustlessness there (you always need an intermediary). Even if that were possible, combining these two protocols would be as much of a challenge as it would be to integrate Fidelity Index Funds (Balancer) with Nasdaq (Gnosis) under one single platform.”

Acquisitions could also be an outdated mannequin. Interoperability and composability implies that protocols can profit from each other with out hostile takeovers.

The branding may nonetheless have to get discovered, nevertheless — Balancer-Gnosis-Protocol isn’t precisely the very best title.

Are you talking my language? 

The goalposts keep shifting for Ethereum maximalists as natural exercise begins to unfold to different chains. 

On Solana, for example, $COPE and $STEP have attracted vital neighborhood following and funding from main gamers (together with from funds aside from famous SOL supporters Alameda Research!), and this morning introduced a hackathon aiming to kick off the hashtag “solanaszn.” Other of us have bandied round “Solana Summer” within the mould of final 12 months’s DeFi Summer, however no matter your most popular sobriquet the competitors is for actual.

The success has — maybe predictably — led some observers to try to poke holes in SOL’s development thesis. While, like every chain, there’s loads of assault floor, one rising criticism is that Solana’s flagship language, Rust, is each tough and unique.

In an announcement to Cointelegraph, Solana founder and present Solana Foundation president Anatoly Yakovenko rejected that view. 

“Rust is a modern language with wide adoption suitable for writing high performance secure code. It has ranked on Stack Overflow as one of the most loved programming language by 65,000 people who code, so we are confident this plays a key role in driving the organic growth in our developer community to date,” he stated.

He additionally famous that the Foundation has counted 2,000 builders constructing on Solana (he didn’t point out methodology or definitions used to reach on the determine, and it appears maybe a contact inflated given {that a} 2019 examine from ConsenSys found that there’s about 1,300 Ethereum builders, and in 2020 Electric Capital pegged the full variety of ETH devs round 2,300), and that Solana devs aren’t excited about “copy/pastes” of Ethereum tasks.

He’s additionally proper in regards to the Stack Overflow study, although a 2018 survey from the Rust Blog confirmed that over 20% of builders working with the language felt unproductive after a 12 months of use.

Whatever you’re feeling about Rust, nevertheless, it’s probably an issue that cash can repair. And to that finish Solana is urgent the pedal: the hackathon will characteristic “up to $1 million” in prizes and/or seed funding. I believe I might study a troublesome language for that.

Other tales this week:

Uranium Finance loses $50 million, likely rug

ETH cracks all-time highs

Aave’s liquidity mining program a success out of the gate

NYSE president bullish on DeFi