Ethereum’s final testnet & on losing $280m of users' funds trading

Launching DeFi 101: An Introduction to DeFi - For Beginners

Welcome to the #20th edition of DeFi Fridays!

101 today:

• Major happenings in the ecosystem —

  Harmony may mint new tokens; Ethereum’s final testnet merge scheduled; and Babel lost ~$280m of user funds!

• A topic we explain — 

  A recap on Lending in DeFi

Tweet of the week:

Ignas | DeFi Research @DefiIgnas

1/ What's next for #DeFi?🤔 I researched roadmaps of 25 major protocols to find out. A lot is coming up: protocol-owned-stablecoins, new tokenomics, decentralization plans, The End Game for Maker and more. These are the top 7 trends coming for DeFi 🧵

A topic we explain:

A recap on Lending in DeFi

Why do people take crypto loans when they already own crypto?

1. To maintain price appreciation on crypto assets and unlock their value (liquidating) for daily use without selling them.

2. DeFi overcollateralized loans enable traders to do leverage trading.

3. Crypto gains are taxable income. DeFi lending lets users liquidate crypto assets without paying tax on them. 

TradFi loans vs DeFi loans

Traditional Loans:

1. Loan is only given out to people who qualify for them. 

2. Low & potential negative interest rates. 

3. Wide range of fees.

4. Long wait time for international transactions and weekends. 

DeFi Loans:

1. Anyone can borrow in DeFi. 

2. Fairly high yield. 

3. No intermediary to pay, hence no fees. 

4. 24/7 instantaneous transactions.  

Early days of Lending & Borrowing in DeFi

Peer-to-Peer Model

Bitcoin was the first blockchain that made peer-to-peer payments possible. It powered innovation behind now successful blockchains such as Ethereum & Solana -platforms that let developers build some of the very first DeFi Protocols on top of it.

MakerDAO

MakerDAO was one of the first P2P DeFi Lending Protocols built and was launched in 2017. It allowed people to lend and borrow cryptocurrencies.

The first iteration of the protocol was a single-collateral stablecoin backed by the US Dollar called SAI. A single-collateral stablecoin could only be borrowed by keeping a crypto token as collateral on the protocol.

It was later re-launched as a Multi-Collateral DAI in 2019 & is one of the top DeFi lending Protocols to date. At its peak, Maker DAO had a market cap of $10.38b (15th of Feb, 2022.)

We are Launching🚀

DeFi 101: An Introduction to DeFi For Beginners

Find it on Product Hunt Soon!

Be on the lookout for the awesome DeFi cheatsheet. Stay tuned!

Brew Money @brew_defi

We've been brewing something for over a month & it's finally here! Launching a DeFi 101 Guide for Beginners on Product Hunt in 3 days in collaboration with 30+ influential DeFi voices! What is the DeFi 101 Guide & Why is it required? 👇

Major News in the Ecosystem:

⚠Harmony proposes minting billions of ONE token to compensate for the bridge hack:

Harmony 💙 @harmonyprotocol

The reimbursement proposal is posted and available for feedback. We encourage the #HarmonyONE community to read and engage in conversation with each other and the core team. Thank you for your patience as we work to move forward together as ONE. Link:

talk.harmony.oneReimbursement Proposal [Horizon Incident]Introduction The Horizon bridge incident resulted in the loss of $99,340,030.00 worth of digital assets across approximately 65,000 wallets and 14 different asset types (details in the table below). The Harmony team feels it is important for the overall strength of the ecosystem that harms to impact…

🔰Ethereum’s final tested merge, named the Goerli/Prater merge scheduled between the 6th-12th of August.

Cobie @cobie

Final testnet merge is scheduled

🔰Babel lost $280m trading with user funds

The Block @TheBlock__

SCOOP: Babel Finance lost over $280 million in proprietary trading with customer funds By @Yogita_Khatri5 theblock.co/post/160230/ba…

🔰Wharton Business school launches its metaverse-focused business course.

💎 Wait for Brew Findouts💎

In this edition - we’ve found a not-so-hidden gem for our readers. 💎

Investrly

Let’s be honest, markets make a lot of noise. And the web3 market is no less. Scrolling away on #cryptotwitter will make sure you know that. And so, we have brought you a source that separates insights from the noise. 

Investrly is a newsletter publication on substack that empowers its readers to invest early in Web3 and learn & earn through their newsletter & podcast.

Find their recent edition here.

More Good Reads:

✍️Yield leveraging and their protocols:

Timeless Finance @Timeless_Fi

The state of yield leveraging protocols. Featuring @MIM_Spell @AlchemixFi @GearboxProtocol @Timeless_Fi 🧵👇

✍️Tips for web3 founders:

Jason Choi @mrjasonchoi

28 principles for Web 3 founders. Insights distilled from 100s of conversations & investments in crypto in the past 4 years.

✍️Institutional (or Centralized) Loans:

iWitty @ianw888

1/ Institutional Loans in Crypto Massive deleveraging has occurred recently due to the failure of many centralized lenders. @CelsiusNetwork has a mere $98M of outstanding loans, @coinbase bonds trade at a 10%+ yield and leading market makers (MMs) have had trading cap reduced

Did you like this edition? Help us improve! 💪

• ⚡Great read!

• 😐Meh - was ok.

• 👎 Not interesting to me.

That’s it for today, folks. See ya next Friday. 🧢

Disclaimer: Nothing included in DeFi Fridays should be taken as financial advice. DeFi Fridays & investrly have mutually decided to mention each other in their newsletters.