Some popular sectors for the next leg up include memes, A.I., DePin, and RWAs.
I asked my X audience on some other ones that they’re excited about. The top ones included GameFi, and a possible DeFi comeback.
Also, Deadpool vs Wolverine was awesome. Go check it out!
Here’s what we got today:
- Governance Gone Wild. Summary of the attack on Compound Finance.
- Best Stablecoin Yields. Some solid places to park your stablecoins.
- Around the web. ZKX Protocol ended operations, New airdrop for Farcaster users, Gnosis created AI department, and more.
Today’s email is brought to you by Anzen $USDz — the RWA backed stablecoin.
Here’s your Edge 🗡️!
Updates
Governance Gone Wild: Compound Edition
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Most DeFi protocols are governed through votes. But what happens when some of these voters gather enough power to start voting for their own needs?
That’s what happened when the “Golden Boys” attacked Compound Finance the past few days.
What happened? The attackers, “Golden Boys,” passed a questionable governance proposal through Compound DAO.
They proposed allocating 5% of the Compound’s treasury to a suspicious yield program. This meant that ~$24 million worth of COMP tokens would be transferred to a multi-sig wallet controlled by the attackers.
How’d They Do This? There are suspicions that they stocked up on COMP tokens in the open market to influence the vote.
Apparently, the attackers control ~10% of the $COMP total supply. If the proposal was executed, they might be able to pass any governance proposal they want.
Something interesting is this isn’t their first Rodeo. The leader of the attackers, Humpy, was involved in previous governance attacks. He was involved with Balancer DAO and SushiSwap as well.
Luckily, we dodged a bullet — or more accurately, a financial disaster. Compound Finance has come to an agreement with the attackers.
- The controversial proposal was canceled.
- Instead, a new staking product that satisfies everyone will be introduced.
So, $COMP is becoming a yield-bearing token.
Why should you care? Crypto protocols are aiming to be the backbone of the future financial system. And we are relying on DAOs to manage these protocols. But DAOs are terrible at it.
The cost of exploiting DAOs is low compared to the potential rewards.
There’s very little governance participation. The attendance is similar attendance at Crypto conference speeches these days – there’s barely anyone showing up. Proposal discussions often see little engagement. Questionable proposals can pass with minimal voter turnout.
Even during this attack, the Compound team seemed to ignore community concerns. This isn’t an isolated incident; the Polkadot treasury funds mismanagement is another example.
There’s also a risk of centralization. Gauntlet has created almost all proposals in the Compound DAO. In the Arbitrum DAO, 14 active addresses control 50% of the voting power. And just 60 active addresses control 97% of the total voting power.
Whenever you’re investing, you gotta be aware of the risks. And we need to add “governance attacks” to this list.
Sponsored by Anzen
USDz: +20% Yield on Stables with Airdrop Eligibility
Anzen’s USDz is not the same as a fiat stablecoin like USDC or USDT. Instead, USDz is a dollar backed by tokenized Real World Assets (RWA). In fluctuating times where markets are unpredictable, being able to earn sustainable yields is a game-changer.
Start using USDz on Anzen Finance
Participating in onchain summer? With USDz, the first RWA-backed stablecoin launched on Base, you can farm z-points with basically $0 gas fees while earning 10-15% yield (currently around 25%).
Here’s how:
- Swap USDC for USDz. Holding USDz gets you 5x z-points/day
- Lend the USDz on Extra.fi. Gain yield + 5x z-points/day
- Deposit USDz in the USDzUSDC LP on Aerodrome. You get weekly $AERO emissions + 20x z-points/day (consider locking for 7 days to earn an additional 20x z-points)
- Leverage on Extra.fi: Earn yield and 20x z-points/day with a 5x leverage. (ExtraFi will also auto-compound the $AERO rewards into the user position)
Anzen is backed by major investors like Circle, FRAX, and Mechanism Capital, with industry experience in underwriting from BlackRock, JP Morgan, and Goldman Sachs.
It’s no surprise that USDz has been quite strong so far, with over $55 million in locked TVL across all USDz pools. Their recent launch on Blast means USDz holders are earning stable yield, z-points, Thruster credits, Hyperlock points, and Blast Gold, a 4-in1 airdrop opportunity.
Strong investors, solid TVL, and a bullish narrative make Anzen a promising opportunity.
Skip the line with the exclusive invite code they shared with us: IFZNNI
The airdrop is close, so don’t sleep on it.
Hit multiple airdrops in one go →
Announcement
We’re Hiring a DeFi Analyst
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Do you love doing DeFi Research and want to get paid for it?
Do you want to work directly with me and other smart people?
We’re hiring a Research Analyst.
The company’s growing and we’re looking for some more people to join the squad. We’re looking for someone with a pulse on the crypto and DeFi space. You live and breathe DeFi. You’re in the trenches of crypto X, Discord, and Telegram. You love learning and sharing knowledge.
As an analyst, you’ll:
- Get paid to do what you love. Research and write about the latest in DeFi.
- Make an impact. We’re a small but elite team. You won’t be just another cog in the wheel.
- Learn and grow. Gain insights directly from me on how to build and scale a successful company.
If you’re ready to break into crypto research and work directly with me, check out the application form below!
Due date is August 23rd 2024.
p.s. If you’re not interested, but know someone who would be a good fit, we’re paying a $1000 usd referral bonus if they get hired. So pass it along!
Farms
The Hottest Stablecoin Farms
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While the markets are choppy, it’s a good idea to allocate some of your portfolio to Stablecoins. They can help lower the volatility of your portfolio, and you can easily buy tokens fast when the tide shifts.
But don’t just let them sit around doing nothing. You should let them earn yield.
If you’re wondering where’s the best places are, we’ve done the homework for you.
Here’s some things we’re looking at:
- Focused on USDC and USDT
- Lower management
- TVL > $10m
Below are a few protocols with good yield for stablecoins.
1. Fluid
Fluid has a liquidity layer at its base. Other protocols, like lending or vault, are built on top of this base layer.
Deposited assets are lent to borrowers. And they pay APR, aka interest, to the protocol, which is then distributed to lenders.
For simple strategies, you can use Fluid’s lending protocol.
- You can deposit Arbirum $USDC and earn 11.69% net APR.
- Or you can deposit Arbitrum $USDT and earn 13.57% in net APR.
If you are keen on more complex strategies, you can leverage sUSDe to earn up to 29% APY. And you don’t have to worry about liquidations due to market price volatility or unpredictable borrowing rates.
2. Kamino Finance
Kamino describes itself as Solana’s hub for liquidity, leverage, and lending. Below are notable stablecoin farms on Kamino.
- Lend $PYUSD for 20.06% APY
- Lend $USDC for 14.65% APY.
- Get 16.29% on PYUSD-USDC liquidity farm.
3. Gearbox
Gearbox is a modular leverage protocol. Users can borrow assets from Gearbox to create leveraged positions.
The APY you earn from depositing comes from the interest payments of borrowers. In contrast to other borrowing protocols, Gearbox borrowers are deploying onchain leveraged strategies.
If you are open to leveraged farming, you can get up to 23.07% APY by leverage farming $sDAI.
For the passive ones, you can earn between >7% APY by depositing the following stables: $USDC, $USDT, $DAI, and $GHO. You can even earn ~14% APY on crvUSD.
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4. Ethena
Ethena is a stablecoin protocol that we have already spoken about several times.
They have a native staking functionality. You can deposit $USDe and get 11% APY.
This APY comes from two sources: Ethereum staking rewards and yield from short positions on exchanges. You can learn more about its mechanics elsewhere.
This isn’t limited to Ethena. Most stablecoin issuers have staking programs. And each will generate yield in its own way. You can deposit $DAI with MakerDAO and get $sDAI. Similarly, Frax Finance has $sFRAX.
5. Goldfinch
Goldfinch is a credit protocol that lends $USDC to businesses in the real world.
Right now, you can deposit $USDC to the Goldfinch Senior Pool and earn 9.33% in APY.
Similar to Fluid, the depositors/lenders get their funds from the interest payments made by borrowers. But the source of this money is different from the source in Fluid. In the case of Goldfinch, real-world businesses are paying the interest.
But the risks are higher with RWA. Businesses might default on the loans. You can read about the protocol mechanics in its documentation.
One of the borrowers from the Goldfinch Senio Pool has already defaulted. Sometimes payments from borrowers can be less than withdrawal demand. So, everyone won’t be able to withdraw.
By the way, if you want to find your own Stablecoin farms, the two best places are DeFiLlama and StableFish
Remember, there are always risks. Ape safely!
🚀 DeFi Catalysts
ZKX Protocol has announced the discontinuation of the protocol. They have listed economic challenges as the primary reason.
Gnosis DAO created the Gnosis AI department. They’ll work at the intersection of web3 and AI.
Jito introduced Jito Restaking. It’ll be a scalable infrastructure for managing staked assets and AVSs.
pStake Finance has shipped Bitcoin Liquid Staking v1 on Babylon Chain with a 50 $BTC deposit cap. Users will get boosted pSats in their SatDrop campaign.
Drift Protocol is planning to create a Prediction Market on Solana. Prediction markets have gained attention due to the presidential elections.
MarginFi introduced The Arena. It’ll allow users to long or short any token on Solana with leverage.
Maple Finance announced a partnership with Jito. It’ll give the lenders on Maple and Syrup Finance access to Jito’s MEV rewards.
🪂 Airdrop Alpha
Farcaster users who joined before July 10th can claim the $MOXIE airdrop. It’s described as a protocol for efficient markets on Farcaster.
Stride Zone‘s airdrop claim for $stTIA holders is live. 5% of total supply was allocated for holders from February – June.
Layer3 has released the airdrop claim & staking for the L3 token. They’re building omnichain infrastructure for distribution, identity, and incentives.
Kwenta passed the proposal for the Kwenta Points Program. All trades dating back to May 23 will be eligible for points.
EtherFi introduced Perks Passport. You can get up to 5x points boost for season 3 by completing passport activities.
🚀 New Launches
Illuvium game Zero Beta went live on the mainnet. Mobile users can now download it on both iOS and Android.
Dumpy.fun has launched the Beta version. It allows Solana users to short memecoins. Early users might earn airdrop as well.
Movement launched its public testnet. It’s an Ethereum L2. Users can start completing quests. This can qualify you for future rewards.
Abstract Chain has launched the Abstract Testnet. It’s an L2 powered by ZK Stack that focuses on consumer crypto.
🐦⬛ X Hits
- ETHE dip bought from Blackrock?
- Tether Q2 report.
- Great opportunity from Stephen.
- Succinct summary of upcoming Fed Decisions.
- Bitcoin monthly candle close.
😂 Meme
