Welcome to Finance Redefined, your weekly dose of essential decentralized finance (DeFi) insights — a newsletter crafted to bring you significant developments over the last week.
In the aftermath of a deadly 7.8-magnitude earthquake in southeastern Turkey, the Web3 community has come together to raise awareness and aid for disaster victims.
Stablecoins could prove to be a critical factor in larger DeFi adoption, says Aave founder Stani Kulechov. According to the Aave executive, building the “payment layer,” which involves stablecoins, can potentially hook regular people into the space, eventually introducing them into DeFi. On the other hand, S&P Global Ratings believe DeFi protocols can attract institutional interest if they get securitization right.
Venture capital firm Andreessen Horowitz (a16z) used 15 million Uniswap (UNI) tokens to vote against the deployment of Uniswap v3 on BNB Chain using the Wormhole bridge. Web3 developer ConsenSys has cast 7.03 million UNI votes in favor of its deployment on BNB Chain.
The DeFi market broke its four-week bullish streak after news about Kraken settling with the United States Securities and Exchange Commission and winding down its crypto staking services. The settlement means U.S.-based exchanges must shut down their staking services, which has come at a critical time for Ethereum, as the upcoming Shanghai upgrade will allow Ether (ETH) stakers to withdraw their staked ETH.
The Web3 community responds to Turkish–Syrian earthquake tragedy
A massive earthquake hit southeastern Turkey along the border with Syria on Feb. 6, which has so far caused the death of more than 18,000 people. The quake registered a magnitude of 7.8 on the Richter scale, which is internationally categorized as a “major” earthquake, and occurred along 100 kilometers of the fault line.
Infrastructure in the area suffered significant damage, resulting in a deadly cross-border humanitarian disaster. However, the world was quick to respond. Across the internet and various social media platforms, people have been gathering funds for local and international aid organizations to provide relief to those in the affected areas.
Stablecoin adoption could lead to DeFi growth, says Aave founder
Stani Kulechov, the founder of the DeFi protocol Aave, highlighted several issues within the DeFi space at the StarkWare Sessions 2023, held at The Cameri Theatre in Tel Aviv, Israel.
In a fireside chat titled “DeFi: Resilience in the Face of Global Uncertainty,” Kulechov and Cointelegraph’s managing editor Alex Cohen discussed various topics, including DeFi’s risks compared to traditional finance and how stablecoins can lead to more DeFi adoption.
DeFi securitization of real-world assets poses credit risks, opportunities: S&P
DeFi’s use case in traditional finance could grow in the coming years as new protocols attempt to support the securitization of real-world assets, according to a new research report from credit rating agency S&P Global Ratings.
The financing of real-world assets will likely be a key focus area for DeFi protocols moving forward, S&P said in a report titled “DeFi Protocols For Securitization: A Credit Risk Perspective.” Although the industry is still in its nascent stages, S&P highlighted several benefits DeFi could bring to securitization, including reducing transaction costs, improving transparency on asset pools, reducing counterparty risks and enabling faster payment settlement for investors.
a16z votes against proposal to deploy Uniswap v3 on BNB Chain
Venture capital firm a16z voted against a final proposal to deploy Uniswap v3 on the BNB Chain using the Wormhole bridge, the Uniswap DAO forum shows.
The governance proposal to deploy the latest Uniswap iteration on the BNB Chain was submitted on Feb. 2 by 0xPlasma Labs on behalf of the Uniswap Community after it passed a temperature check with 20 million (80.28%) votes for yes, and 4.9 million (19.72%) votes for no. On Feb. 5, the venture firm used 15 million of its UNI holdings to vote against the move.
ConsenSys adds 7.03M votes to Uniswap BNB Chain migration proposal amid VC battle
Web3 infrastructure developer ConsenSys, the maker of the popular MetaMask digital wallet, cast 7.03 million votes in favor of a proposal that would see decentralized exchange Uniswap’s v3 protocol deployed on BNB Chain, according to data from Tally.
As Cointelegraph reported, venture capital firm Andreessen Horowitz cast a vote against the proposal. A16z, which reportedly holds 55 million UNI tokens, voted 15 million UNI against the move due to its reliance on the Wormhole bridge. The VC firm instead supported using LayerZero as the interoperability protocol. LayerZero Labs is part of a16z’s portfolio and raised $135 million in a funding round in March 2022, with a $1 billion valuation.
DeFi market overview
Analytical data reveals that DeFi’s total market value fell back to $40 billion this past week, trading at about $40.1 billion at the time of writing. Data from Cointelegraph Markets Pro and TradingView shows that DeFi’s top 100 tokens by market capitalization had a bearish week, with most of the tokens bleeding this past week, registering double-digit losses on the weekly charts.
Thanks for reading our summary of this week’s most impactful DeFi developments. Join us next Friday for more stories, insights and education in this dynamically advancing space.