Cream Finance Partially Delists FTT Amidst Governance Contention

https://defirate.com/cream-ftt-delisting/

Cream Finance – a lending protocol for nascent DeFi tokens – has hosted a governance poll around the collateral parameters for FTX’s FTT token in light of severe borrowing abilities.

What started as a Compound fork has since seen niche demand in providing money markets for DeFi assets that are not listed on other major lending markets due to their nascency and high-risk nature. For example, Cream was the first lending protocol to support lending for YFI, SUSHI, SWRV and UNI.

Now, Cream has come under fire after $75M worth of FTT, the native token of FTX, was used to borrow and short leading DeFi assets like YFI over the weekend. FTX’s CEO Sam Bankman-Fried recently took to Twitter to defend the use of $FTT on CREAM following many prominent community members suggesting Cream should delist FTT.

In his tweetstorm, he seemed to imply that any sort of governance vote on CREAM to change FTT lending parameters would be unfair as a single address holds over 75% of all votes. Sam also goes on to provide evidence that his centralized exchange token has a lower risk of price crash compared to the basket of DeFi tokens that are listed on Cream.

Popular anon accounts pointed out that with FTT being a centralized token, Sam could manipulate it in various ways for his own profit at the detriment of other users on Cream and more broadly the entire DeFi ecosystem.

 

The Snapshot proposal on Cream Finance decided to partially delist FTT by decreasing its borrowing power on the platform. This comes in agreement with reputable names such as Robert Leshner, founder of Compound Finance, suggesting a middle ground of adjusting FTT parameters on Cream instead of getting rid of it entirely.

The decision to reduce the FTT collateral goes to show that decentralized governance really rallies around large scale DeFi price swings, however these decisions historically takes multiple days to resolve in order to give everyone a fair voice.

While FTT’s borrowing power reduction can be seen as a win to the DeFi community, let’s keep in mind that these protocols are designed to support uses exactly like this, and at the end of the day DeFi remains a whale’s game to trade however they see fit.

To get more updates on Cream, follow them on Twitter.

The post Cream Finance Partially Delists FTT Amidst Governance Contention appeared first on DeFi Rate.

MetaFactory Debuts ROBOT Governance Token

https://defirate.com/metafactory-robot/

MetaFactory – a digiphysical creation platform – has released the blueprint for the ROBOT governance token with a retroactive distribution.

We first covered MetaFactory upon the debut of their Genesis Bomber, combining elements of DeFi auctions and scarcity with digiphysical tokenized wearables to offer a unique product blend for web3 natives.

Now, MetaFactory looks to expand on that vision by adding a native token – ROBOT – into the mix to better align stakeholder incentives. Thanks to ROBOT, MetaFactory will now be broken down into three segments:

  • MetaFactory DAO – For all governance decisions
  • MetaFactor LLC – For company operations
  • MetaFactory BotYard – Community multisig for the custody and distribution of ROBOT.

All together, ROBOT is used to govern the growing brand with distribution baked into the platform’s growth. In short, tokens are issued into the supply as more sales are conducted through MetaFactory, with ROBOT being routed to buyers, creators, and community participants relative to their monetary and social contributions.

Citing Placeholder’s Buyback model, excess ROBOT is likely to be recycled for constant liquidity, using Balancer AMMs to continually capitalize the system.

“The revenue from sales will go to the MetaFactory Entity and will be used to pay for recurring expenses and production costs for goods. ROBOT holders can then vote on how the surplus profits should be spent. For example, they could be locked in a Balancer liquidity pool to create a permanent incentive model with continuous issuance while preserving a fixed supply of 420k tokens.”

Here’s a look at how the genesis 420k ROBOT is issues relative to the various sales MetaFactory reaches as a whole.

Outside of the Genesis Bomber, you’ve likely seen MetaFactory’s merch floated around via the YFI hoodie, famously touting the signature tag ‘I Test in Prod’ optimally designed for the YFI logo to be visible on Zoom calls. This close tie between DeFi and physical wearables capturing the latest trend is one that shows strong promise for the community-owned and operated brand platform.

With this new announcement, purchasers of the Genesis Bomber, Wicked Sunday Club or any of MetaFactory’s merch should be on the lookout for ROBOT tokens in their wallet used at purchase in the coming week. There will be no tokensale for ROBOT, and future tokens can only be earned through platform usage.

The launch of ROBOT comes in line with a growing trend of tokenization, with many projects choosing to issue governance power to their most value-added actors in the form of retroactive distributions. Unique to ROBOT is the ability for anyone with more than 500 tokens to receive access to the LLC’s operational expenses, offering a transparent view into the MetaFactory kimono historically kept private by the issue entities.

Overall, the fresh rebrand and launch of ROBOT are a strong signal that MetaFactory aims to stay on the cutting edge of web3 culture, one we’ll be keeping a close eye on here at DeFi Rate.

To stay up with MetaFactory, be sure to follow them on Twitter!

The post MetaFactory Debuts ROBOT Governance Token appeared first on DeFi Rate.

Aave Launches Genesis Governance with AIP1 Token Migration

https://defirate.com/aave-aip1/

Aave – the sector leading lending protocol – has launched its first Aave Improvement Proposal to ratify the migration from LEND to AAVE.

This milestone comes as a huge next step for the project, with tokenholders voting to ratify a token migration that implements the Aavenomics changes including staking incentives, yield farming, and a backstop module on top of decentralized governance.

Detailed in the AIP is the implementation of new Safety Incentives, or rewards to be earned from staking AAVE via a Safety Module as a reserve in the event of shortfalls. The proposal suggests 400 AAVE in rewards per day, good for roughly $20k in rewards each day when taking the 100 LEND > 1 AAVE swap into account.

Outside of the 100:1 tokenswap, AIP1 adds a 3M token Aave Reserve to a community governed treasury, good for Safety and Ecosystem Incentives in tandem with a fortitude of other rewards programs to come.

In the event the proposal passes, the Safety Module will be introduced using a bootstrap period with no slashing, making staking completely risk free to early adopters. There is currently no deadline on when LEND would have to migrate, however, those who are the first to stake to the Safety Module stand to earn the largest portion of the first day’s 400 AAVE rewards.

100 unique participants have voted on the proposal in the first 48 hours of launch, with early support signaling the proposal will pass in spades.

What’s unique about Aave governance is that voting is built directly into the application, utilizing a custom dashboard and governance module built directly by the Aave core team.

Lending Governance Thrives

When it comes to DeFi governance, we’re seeing an ongoing trend of token distribution proposals have the highest engagement to date.

With Aave, governance marks the start of new trends like adding new assets, adjusting interest rate models, and adding new money markets in line with core protocol upgrades like the token migration.

If one thing is for sure, Aave has solidified as a crucial foundation of the DeFi ecosystem. The migration to AAVE is set to kick off Aave V2, adding in a suite of gas optimizations that are sure to take the sector-leading protocols to new highs in the coming months.

To stay up with Aave, follow them on Twitter!

 

The post Aave Launches Genesis Governance with AIP1 Token Migration appeared first on DeFi Rate.

Uniswap Launches UNI Governance Token with Community Airdrop

https://defirate.com/uniswap-uni-token/

Uniswap – the sector leading DEX – has released its UNI governance token with a community airdrop to anyone who has interacted with Uniswap prior to September 1st.

Underpinning the hottest governance token to date was a retroactive airdrop where any account that interacted with Uniswap V1 or V2 contracts received 400 UNI. Liquidity Providers also earned favorable rewards based on historical liquidity while the 220 holders of at least one $SOCKS (a tokenized Uniswap merchandise item) received 1000 UNI.

In total, 150,000,000 UNI – or 15% of the supply – was distributed through the community airdrop, broken down as follows:

  • 4.92% to all 49,192 historical LPs [49,166,400 UNI]
  • 10.06% split evenly across all 251,534 historical user addresses [100,613,600 UNI]
  • 0.02% to 220 SOCKS holders/redeemers [220,000 UNI]

To claim UNI rewards, simply head to Uniswap and look for the purple “UNI” box in the top right. Here you will need to submit a transaction to claim your rewards. Please note that 400 UNI was airdropped to any wallet which has ever interacted with Unsiwap, meaning many users may be eligible for multiple airdrops depending on the different number of wallets used.

 

UNI Liquidity Mining & Distribution

Starting tomorrow, four liquidity mining pools will open for UNI rewards. USDT, DAI, USDC, and WBTC pools will each earn an allocation of 5M UNI over the course of the next two months. This breaks down to 83,333.33 UNI per pool per day or 54 UNI per pool per block.

This intro to liquidity mining is set to be followed by formal governance over incentives after the first 30 days in which the community treasury (responsible for future liquidity mining rewards) will be vote on pools & allocations.

Outside of the liquidity mining rewards, UNI’s 1B supply is set to be broken down as follows:

  • 60.00% – Community [600,000,000 UNI]
  • 21.51% – Team  [215,101,000 UNI]
  • 17.80% – Investors [178,000,000 UNI]
  • .069% – Advisors  [6,899,000 UNI]

All team, investor and advisor tokens will be subject to four-year continuous locks, meaning tokens will unlock in real-time. Here’s a breakdown of how these tokens will enter the circulating supply over time.

Perhaps what’s most novel about the distribution is an ongoing 2% perpetual inflation set to kick in once all 1B tokens have been distributed. While this parameter is obviously malleable by governance, it sets a fantastic precedence for protocol sustainability.

With Binance and Coinbase both springing to list UNI less than 12 hours after launch, it’s clear that DeFi has a new cool token on the block.

In the wake of a SushiSwap attack, anon devs have now learned the golden rules of DeFi:

  1. Do not cross Andre Cronje
  2. Do not cross Hayden Adams

To keep an eye on Uniswap, follow them on Twitter or join the conversation on the governance forum.

The post Uniswap Launches UNI Governance Token with Community Airdrop appeared first on DeFi Rate.

Balancer Passes Governance Proposal for BAL Liquidity Staking

https://defirate.com/balancer-liquidity-staking/

Balancer – an automated asset management and liquidity protocol – has amended its liquidity mining distribution to further favor BAL-based pools.

For those unfamiliar, users who provide liquidity to Balancer earn weekly rewards in the form of BAL governance tokens. The project has undergone a suite of changes to better balance this distribution through a variety of factors like fees, wrap, cap, pegs and ratios. In short, the protocol has looked to issue the 145k BAL rewards to the most “useful” liquidity, all of which have resulted in stronger community engagement for Balancer liquidity.

More recently, Balancer added a balFactor which gave BAL liquidity a 1.5x higher return on BAL rewards. Now, that buffer has been boosted even more through the passing of Liquidity Staking.

With the new vote, 45k BAL out of the 145k total weekly distribution will be allocated directly to BAL-based pools which are paired with uncapped ‘useful’ tokens like WETH, USDC and DAI.

“The main goals are to significantly increase liquidity on key BAL pairs and to allow non-shareholders to compound their BAL holdings at a much faster pace, accelerating protocol decentralization.”

The vote over the weekend passed with flying colors, with 98% Yes votes backed by 189k BAL participating in the poll.

Why Should I Care?

With this new change, BAL-based pools are netting upwards of 300% APY, by far the highest Return on Liquidity (ROL) of any Balancer pool today.

A community member put together a great site – pools.vision – allowing users to keep tabs on Balancer pool returns at any given time.

The shift in sentiment towards BAL-favored rewards goes to show that the Balancer community is rallying around protocol decentralization, albeit at the benefit of those who already hold BAL.

Looking at this from the perspective of someone who does not hold BAL, this move could very much be seen as empowering those with the deepest BAL holdings already. Thankfully, this proposal made sure to exclude shareholder addresses from rewards, making this distribution as community-oriented as possible.

The passing of Liquidity Staking comes in tandem with 3 other proposals, all of which passed with the following changes:

  • Increase the MKR capFactor from $10M to $30M
  • Decrease the RPL capFator from $10M to $3M
  • Remove DZAR from the whitelist

This is a great signal that Balancer governance is quickly heating up, due in large part to the snapshot-based voting in which users can vote without having to pay a ~$10 transaction fee as with virtually all other governance systems on mainnet today.

To stay up with Balancer, follow them on Twitter or join the conversation on Discord.

The post Balancer Passes Governance Proposal for BAL Liquidity Staking appeared first on DeFi Rate.

Curve’s Mysterious CRV Governance Token Launch

https://defirate.com/curve-crv-launch/

Curve – the third-largest DeFi DEX – has officially launched its long-awaited governance token, CRV.

As you can see in the tweet, the way in which Curve launched fit right in with the mysterious roots the team has had since launch.

For those who missed it, an anonymous account spent $8k in gas to deploy all of the Curve contracts, leading to a two-hour grey area where community members were told not to engage as the CRV token was not officially *live*. However, this was then confirmed by the team as being secure, admin keyless contracts – hence the weird way in which the token became *official*. Here’s a full recap on the events that transpired yesterday evening.

None the less, Curve quickly pivoted by releasing a front-end for CRV liquidity mining. Users who provide liquidity to Curve stake their positions via ‘Gauges’ to be eligible for CRV rewards. More on how this works here.

Curve has quickly broken it’s previous ATH’s for Total Value Locked, currently sitting at just south of $700M at the time of writing – good for 4th place on the DeFi Pulse leaderboard. This comes in tandem with breaking the $2B cumulative volume mark, one which has only been reached by leading projects like Uniswap so far to date.

As illustrated in our initial coverage of the pre-launch, Curve liquidity providers will compete for a daily allocation of 766k CRV tokens. Each day, 2M CRV is estimated to enter the circulating supply as early LPs and investor tokens unlock in real-time.

For more long-term supporters, CRV can be locked via the Curve DAO to earn a multiplier on liquidity mining rewards. Curve has provided a number of time intervals, with each granting higher bonuses up to a maximum of 2.5x for those who choose to lock for 4 years.

Early LP’s are also able to claim their rewards in real-time through the Vesting dashboard. Seeing as early LP rewards are vested over the course of a year, these LPs will be able to claim 1/365th of their rewards each day.

CRV Madness Ensues

Almost immediately after launch, the race to acquire CRV went ballistic with both Binance and Poloniex listing CRV within 5 minutes of launch.

This was accompanied by DEXs like Matcha having their front-end crash as users rushed to submit limit orders to take advantage of the gas-promotion to save on transaction costs. (which peaked at $30/swap upon launch)

CRV price traded as high as $50/token, giving the project a fully deluded (h/t Gavin for the term) valuation of ~$182B. For reference, that’s over half of Bitcoin’s fully diluted valuation. This token value gave early LPs returns as high as 10,000% APY, with returns now hovering around 2000% APY at the time of writing.

While Curve took extensive time to map out a strong governance model in which time-weighted voting plays a key role in voting, it’s clear that the DeFi token craze has thrown all bets out the window. Many are now theorizing that the mysterious launch may have been coordinated with the Curve themselves, essentially acting as a legal loophole in terms of sufficient decentralization.

Regardless of where you fall, it’s impossible to ignore Curve. To stay up with the project and any new updates, be sure to follow them on Twitter or join the Discord to chime in.

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Balancer Adjusts WrapFactor Through BAL Governance

https://defirate.com/balancer-governance/

Balancer – an automated liquidity and DeFi asset management platform – has passed a vote to change its liquidity mining distribution for pools with soft-pegged assets.

In the lastest BAL governance poll, tokenholders voted on whether or not to reduce the penalty for soft-pegged pools (sETH/wETH, USDC/DAI, wBTC/renBTC, etc.) to further incentivize useful liquidity. In the last round of votes, the community passed a vote to change the factor of soft-pegged pairs from 1 to 0.7 – effectively reducing the amount of BAL a soft-pegged pool would earn.

Today, the latest vote passed, shifting this factor down further to a 0.2x multiplier. As illustrated in the proposal:

“Liquidity in soft-pegged pairs usually attracts relatively little trading volume on Balancer while at the same time exposing liquidity providers to a lower risk of impermanent loss.”

Despite the last round of changes, it was not a drastic enough effect to see liquidity moved out of the protocol. Now, this latest round looks to make the sting on soft-peg LPs a bit harsher by reducing their rewards be another 50+ percent.

“We feel that liquidity composition on Uniswap is natural, while the composition on Balancer is highly skewed towards soft-pegged assets due to very generous rewards. We hope that liquidity composition will improve with wrapFactor 0.2.”

Why Does This Matter?

Interestingly enough, this pool ended up being one of the more contentious votes to date. Despite a final passing ratio of 94% Yes to 6% No, the majority of the voting period was spent on the fence split at 50/50 sentiment.

To paint some context on the opposing side, many (including myself) argued that a blanket wrapFactor harms useful liquidity pairs like sETH/WETH which are fundamental to maintaining Synth pegs in crucial DeFi protocols like Synthetix.

However, many countered that the vast majority of soft-peg pairs see little to no volume and that this proposal is more meant to address them instead of penalizing strong pairs like sETH/WETH.

Additionally, select community members voiced interest in shifting the penalty to be volume-based – meaning that the wrapFactor would be applied to soft-pegged pairs which accrue less than a certain threshold of fees. This too was countered by people suggesting this system was easily gameable and as a result, it seems clear that the vast majority of BAL holders are in favor of the new penalty.

BAL Governance Evolves

Taking a step back, this discussion shines a promising light on the future of Balancer and their liquidity mining distribution. We’ve now seen close to 10 different tweaks to the BAL distribution factors, all of which are honing in on the optimal allocations to pools which are truly benefitting the wider DeFi ecosystem in the most ways.

After seeing a constant decline since it’s listing price of ~$20, BAL seems to have found stable ground near the $10 mark, with new proposals like the BAL factor encouraging users to hold their BAL in exchange for a 1.5x multiplier when allocating it to any given BAL-based pool.

Next, we’re eager to keep an eye on where else BAL can offer added benefits to mitigate the amount of dumping from yield farming. If nothing else, the idea of continually tweaking the distribution model using BAL-holdings as a proxy is a promising step in the right direction of the now leading liquidity protocol holding over half a billion dollars in cumulative capital.

For soft-peg LP’s, please note that this proposal will go into effect starting tomorrow, August 3rd.

For more updates regarding this new update in tandem with all things Balancer, follow the project on Twitter or join the Discord for the most active conversations.

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pTokens Launches pNetwork DAO with PNT Staking

https://defirate.com/pnetwork-dao/

pTokens – a trustless bridge for interoperability – has summoned its DAO to handle all protocol governance using PNT tokens.

Built by Provable Things, pNetwork offers a platform to port assets to and from Ethereum using wrappers called pTokens. The most popular version of these wrappers is pBTC – an Ethereum-based version of Bitcoin similar to renBTC. Underpinning the pNetwork is a set of decentralized validators who post a bond in PNT governance tokens to operate a node on the network. Whereas this aspect was a great way for validators to have skin in the game, it’s largely limited to a technical audience.

Today, PNT rewards can be earned by any user by joining the newly launched pNetwork DAO and participating in governance. Built on Aragon, users stake PNT for governance-wrapped tokens called daoPNT. To encourage users to participate in voting, pNetwork is allocating up to 28.35M PNT (47.25% of the total supply) via governance reward inflation.

Similar to other governance-based rewards like KyberDAO and Nexus Mutual, PNT is only rewarded to active contributors. As illustrated in the DAO interworking post:

“A DAO member is considered active and only becomes eligible for rewards if they are daoPNT holders and the check confirms that they have voted on at least all proposals except one within the two week period.”

The rewards are projected to provide 42% APR in the first year followed by 21% in the second year. Stated another way, if you stake your PNT via the pNetwork DAO and vote on every proposal, you will earn a 42% return on your initial PNT contribution (denominated in PNT).

The pNetwork DAO features a 7 day cooldown period and is expected to kick off it’s genesis governance polls in the coming weeks!

DeFi DAOs Heat Up

The launch of the pNetwork DAO comes in tandem with a suite of other DeFi DAOs from projects like Kyber, Aave, Curve and bZx.

While Curve will also be built on Aragon, it’s interesting to recognize that many DeFi projects have opted in to building their own framework instead of using an out of the box solution like Aragon. Still, Aragon-based tooling offers much more flexibility in the future upgradability of these DAOs, and is quickly becoming the leading platform for large organizations to field future governance.

Backed by the recent ANT liquidity program, Aragon will also look to ship a native chain this year, allowing DAOs to port their governance to a low cost, real-time transaction relayer which harnesses all the benefits of Aragon in a scalable fashion.

Over the next few months, it will be super interesting to see the different levels of engagement each of these DAOs receives. While using liquidity mining to incentivize participation is a step in the right direction, the bigger conversation is around making governance interesting enough that tokenholders would participate with no rewards in mind.

If nothing else, it’s great to see governance taking center stage and is a trend that we at DeFi Rate are extremely excited to watch unfold.

To stay up with pTokens for all DAO related events, be sure to follow them on Twitter or join the conversation on Discord!

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iEarn Releases YFI Governance Token with Liquidity Mining

https://defirate.com/yfi-governance-token/

iEarn – a fan-favorite liquidity aggregator – has shared the blueprints for a YFI governance token in tandem with a suite of new liquidity pools.

Best popularized for the Y Curvepool, iEarn offers a number of avenues for users to earn passive interest for supplying capital to any number of the protocols supported pools. Historically, iEarn pools have earned some of the best lending rates in all of DeFi, with the yearn.finance pool aggregating $8M in AUM in tandem with a historical return of just over 10% APY since launch.

Today, iEarn introduced a suite of new, existing, and discontinued products including:

  • yTrade – Trade top stablecoins DAI, USDC, USDT, TUSD and sUSD with up to 1000x leverage using an initiation fee or 250x without an initiation fee.
  • iLiquidiate – An automated liquidation engine for Aave defaults.
  • iLeverage – Open a 5x leveraged Dai Vault using USDC as collateral.
  • iPool – A y.curve.fi <> sUSD curve.fi meta pool offering the best rates between Curve’s two most popular pools. (Discontinued)
  • ySwap – A stable AMM allowing for single-sided liquidity provision while collecting interest and rewards.
  • *.finance – TBA credit delegation platform using Aave undercollateralized loans.

What emerges is a sophisticated lending and arbitrage protocol that routes liquidity across different corners of DeFi to earn the best returns. Using lending protocols like Curve, dYdX, Compound, and Aave along with AMMs like Uniswap and Balancer opens the door for cross-protocol returns extremely difficult to mimic as an average user.

As if that wasn’t enough, the incentive to use iEarn just got a little sweeter.

YFI Governance Token

Following in line with the wider trend of liquidity mining, YFI can ONLY be earned through usage of any of the aforementioned pools. This is in stark contrast to something like COMP and BAL in which a portion was held by the time and another portion was offered in an Initial DEX Offering. Instead, the only way to earn tokens is through usage, and iEarn was very blatant about stating the token has 0 value outside of governance.

It’s likely that the most popular way to earn will be through the yCurve stablecoin pool, and Curve graciously put together a guide on this works here.

YFI Rewards Pool

Outside of openly memeing that YFI has 0 financial value, the project has created a pretty strong token model under the hood. Off the bat, iEarn pools aggregate a suite of rewards and fees including (but not limited to in the future):

  • yearn.finance interest
  • COMP
  • CRV
  • curve.fi/y trading fees
  • ytrade.finance leverage fees and liquidation bonuses
  • yswap.exchange system fees
  • iliquidate.finance liquidation bonuses
  • system dust (unassigned interest or fees)

All of these fees are collected on a regular basis and routed to a Vault which normalizes all the above-mentioned income to aDAI. Once in aDAI, YFI holders can claim a pro-rata share of that reward pool directly from the contract address by burning YFI tokens.

iEarn has stated that they will be releasing an interface for the burning and redemption of these fees in the coming weeks. Last but not least, iEarn has also shipped a staking dashboard to make it easy for users to stake and unstake their position across any of iEarn’s various liquidity pools.

Closing Thoughts

Underpinning this whole ecosystem is an incredibly meta ecosystem at play. While you need 1000 IQ DeFi knowledge to get involved, those who are savvy enough are sure to reap the rewards of the most organic, strongly-designed DeFi token to date.

As aggregate liquidity continues to heat up, we’ll keep reminding users that it’s a good time to be a yield farmer – so long as you keep in mind that there’s a lot of inherent risks that come with it.

Until then, be sure to keep up with iEarn on Twitter.

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The post iEarn Releases YFI Governance Token with Liquidity Mining appeared first on DeFi Rate.

Rarible Launches NFT Governance Token With RARI Liquidity Mining

https://defirate.com/rarible-rari-token/

Rarible – a leading NFT exchange – has announced details for a native governance token, RARI.

As one of the first to tokenize governance rights in the NFT sector, Rarible is rolling out a unique marketplace liquidity mining scheme to reward its collectors for usage.

“Over half of RARI’s total supply is reserved for sellers and buyers on Rarible marketplace, who will receive RARI through weekly distribution according to weekly purchases and sales volumes.”

This unique integration of DeFi’s hottest trend integrated into a more consumer-friendly fashion put Rarible on our radar as they look to introduce a suite of well designed incentives to spur marketplace growth. Best of all, RARI is not being sold in an Initial DEX Offering, a strong signal that the company has all the best intentions in mind for the rollout of their new token.

What’s to Know?

Rarible is set to issue 25,000,000 RARI in total, starting at an initial value of $0.34/token. This valuation comes on the back of the marketplaces $2.5M preseed valuation and is set to issue 75,000 RARI or roughly $25,500 in rewards each week through marketplace mining. Here’s a look at how the supply breaks down.

Just as with Compound‘s even split to lenders and borowers, Rarible will allocate the 75,000 RARI weekly reward pool evenly between buyers and sellers. Rarible has made it clear that the marketplace liquidity mining process can be amended as necessary, and this in and of itself is one of the key areas where RARI governance is likely to come into play.

Over time, Rarible will look to transition to a DAO for the decentralized governance of future protocol decisions. In the meantime, RARI will act as soft signalling for important protocol decisions like fees, features and reserve pool allocation. Rarible has hinted they will be looking into something like Aragon Court for mediation, suggesting that the DAO will likely be Aragon-based.

RARI Airdrop

To kickstart this initiative, Rarible will be hosting two airdrops to reward both new and existing users for their support of the platform. Here’s who it’s set to shape up:

All in all, this airdrop dynamic sets a fascinating retroactive precedent where those who were most active prior to the airdrop being announced receive the most upside. Plus, for any NFT owners who happened to come into possession of a Rarible NFT, there might be an unexpected residual benefit stemming as a result.

Governance Tokens Heat Up

After a multi-year drought in which utility tokens were laughed out of the building, it’s truly amazing to see all the ways in which different crypto-based products are leveraging governance tokens to highlight the best and brightest aspects of web 3 technology.

As someone who has only used Rarible a very select few amount of times, this new incentive program immediately makes me want to dive deeper – a sure signal that many others are likely to do the same.

While it’s unclear if NFT-based governance will be as hot a topic as DeFi governance, there’s no denying the two are closely intertwined. With this, we’ll be sure to keep a close eye on the project as the distribution pans out of the coming months.

To stay up with Rarible, follow them on Twitter or check out the marketplace today!

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Aave Raises $3M for Aavenomics Governance Migration

https://defirate.com/aave-governance-raise/

Aave – a sector-leading lending protocol – has closed a $3M round on the back of LEND tokens in lieu of their upcoming Aavenomics upgrade.

Positioning themselves as a protocol for money market creation, Aave’s latest round saw $3M worth of contributions from Three Arrows Capital and Framework Ventures when LEND was $0.10 per token. Since then, LEND has soared to over $0.25 per token ahead of an Aavenomics governance upgrade in which LEND will migrate to AAVE with a suite of new protocol incentives.

This comes in tandem with other reputable funds like ParaFi and Spencer Noon’s DTC Capital, both of which have made it public that they also hold significant positions in LEND. DeFi Rate has also received intel that many other prominent DeFi funds have been accumulating positions in LEND, giving good credence to the DeFi token‘s parabolic growth in recent weeks.

Aavenomics Teaser

The raise foreshadows the launch of Aavenomics – a governance upgrade in which the migration to AAVE will introduce new protocol incentives through staking and yield farming. In short, users will stake AAVE as insurance against protocol deficits in return for both AAVE rewards and the vast majority of protocol fees. The staking module is expected to offer both vanilla AAVE staking in tandem with an 80/20 AAVE/WETH Balancer pool. This gives flexibility for those looking to stake with just AAVE while incentivizing those to provide market liquidity to Balancer in exchange for BAL rewards and swap fees.

AAVE staking comes in tandem with yield farming rewarding from protocol usage, similar to COMP and BAL liquidity mining schemas which have driven exponential growth in recent weeks. While the details have yet to be released, we expect users to earn AAVE rewards from lending and borrowing any of Aave’s 20+ supported assets along with special liquidity incentives similar to Synthetix‘s LP rewards.

Distributed Governance

Outside of vast protocol incentives, AAVE governance will distribute key decision making to tokenholders though onchain voting. Using Aave Improvement Proposals (AIPs), AAVE holders will dictate key protocol, market and risk policies for both Aave and different money markets like the Uniswap Money Market. Aave has vocalized that its governance process is meant to stimulate large amounts of discussion before going to an onchain vote, contrary to what we’ve seen so far with Compound and it’s 48-hour window voting periods.

These upgrades will be publicized in a formal Aavenomics governance paper in the next two weeks, kicking off a countdown to Genesis Governance in which LEND tokenholders will be able to vote on the start of AAVE migration in tandem with the proposed incentive allocations mentioned above.

Credit Delegation

Last week, we covered Aave’s proposal for Credit Delegation, essentially letting any two parties enter into undercollateralized lending agreements to use a counterparties capital as collateral to draw a line of credit with aTokens. While the program is set to be largely limited to OTC trading desks and exchanges to start, Credit Delegation is another example of Aave’s continuous innovation in the vibrant DeFi sector.

Aave Continues to Shine

As if it wasn’t clear enough, Aave has solidified itself as a force to be reckoned with in the great crypto landscape. With top firms publicizing their token holdings in tandem with the upcoming Aavenomics, it’s clear that the protocol for money market creation has a very bright future lined up for the coming months.

It’ll be interesting to see how the lending wars pan out, with protocols like Aave, Compound and bZx fighting for TVL in a rapidly growing sector full of strong incentives.

If one thing is for sure, DeFi Rate plans to play a big role in Aave governance and will be introducing a formal protocol bid upon the launch of Genesis Governance in a few week’s time.

To stay up with Aave, be sure to follow them on Twitter or join the conversation on Discord.

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mStable Sets Launch Date for MTA Governance Token Distribution

https://defirate.com/mstable-mta-launch/

mStable – a rising liquidity aggregator – will launch its native governance token, MTA, via Balancer on June 15th at 14:00 UTC.

For those who missed it, mStable kicked off a liquidity mining program for seeding the mUSD/USDC Balancer pool. Now, less than two weeks after it’s launch, it’s currently the largest Balancer Pool, with nearly $17M in total liquidity at the time of writing.

What’s interesting to highlight is that mStable now has two attractive yield farming opportunities. Users can either lock mUSD via the mStable SAVE feature to earn an attractive APY (21.69% at the time of writing), or provide mUSD as liquidity to the Balancer pool in exchange for MTA liquidity mining.

The distribution of the native governance token is set to give the rising liquidity aggregator another leg up, quickly capitalizing on the latest trend of token distribution predominantly led by protocol usage.

Why MTA?

As the protocol’s native governance token, MTA tokeholders vote on core protocol parameters like fees, supported assets, and liquidity rewards. In the spirit of decentralized governance, the mStable protocol will look to be incubated by its community, rather than driven entirely by the core team.

Outside of governance, MTA also acts as a line of insurance against and protocol deficits. To account for this risk, users who stake MTA via the upcoming EARN feature are eligible to share a pro-rata claim on trading fess along with the potential for governance incentives.

As if it wasn’t clear already, MTA’s distribution comes just after both COMP and BAL have seen widely successful distribution events, hence why the mUSD stablecoin pool is currently the biggest on Balancer to date.

For the hungry yield farmers out there, please keep in mind that mStable is the newest of these three protocols, and thus we expect the nascency to reflect this token generation event as such.

What’s to Know?

MTA will be seeded at its base price of $0.15/token – giving the token a fully diluted valuation of $15M at the time of issuance. Here’s a look at how the circulating supply is set to start and change in the coming year.

  • Day 1 – 2.8% from liquidity mining
  • 3 months (October 15th) — 11.0%
  • 6 months (Jan 15th) — 18.2%
  • 12 months (July 15th 2021) — 29.3%

This emission model is aimed at anticipating future growth, with liquidity mining rewards set to ramp up over the course of the year and slowly start scaling down come 2021.

The original post goes into further detail about the total supply, however, the key takeaway is that “no one in the mStable team will have access to tokens at the time of the pool’s creation.”

With this in mind, it’ll be quite interesting to see what type of price discovery emerges come to launch this time next week.

What to Expect

As we alluded to above, the yield farming based launch of MTA is sure to draw attention from DeFi token enthusiasts. Given the project has executed extremely well since it’s public launch less than two months ago, it’s no surprise many are quietly talking about MTA in closed circles.

To further iterate the above point, it will be interesting to see how something like MTA does given how new the protocol really is. As community members have pointed out, the reason why COMP was so successful was due to the protocol’s 2+ year track record of success long before COMP was ever introduced.

Now, looking at projects like mStable in the light of the DeFi bull market, it will be fascinating to see if MTA has the legs to make noise outside of the small (yet growing) yield farming sector that many have come to lay claim on.

Regardless, we’ll be keeping a close eye on this distribution event and look forward to participating in governance as a Meta Govenor in the coming months!

To stay up with mStable, follow them on Twitter or join the conversation on Discord.

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The post mStable Sets Launch Date for MTA Governance Token Distribution appeared first on DeFi Rate.

Introducing xToken: Simplified DeFi Token Staking & Governance

https://defirate.com/introducing-xtokens/

When it comes to keeping up with DeFi’s ever-evolving token landscape, passive investors can get lost in the thick of new upgrades, governance polls, and incentive changes. A new project called xToken looks to solve this.

Offering liquid staking strategies through native token wrappers called xTokens, the project is teaming up with two of the biggest DeFi projects to kickstart their set-and-forget onramps.

Starting with Kyber Network and their KNC token, xTokens will be releasing xKNC – a wrapped version of KNC which allows users to participate in governance through two different flavors xKNCa and xKNCb. Seeing as Kyber’s first set of governance polls will dictate how fees are allocated across staking rewards, rebates, and burns, xKNC gives users a means to always vote in favor of a specific strategy.

With xKNCa, wrapped tokens will always vote in favor of increased staking rewards while xKNCb will vote in favor of rebates. This gives KNC holders a way to passively put their tokens to work without having to worry about constantly check the governance dashboard for new proposals (and thus spending more gas on tx fees).

What’s more is that all ETH earned from KyberDAO voting is automatically converted to KNC, giving those who are long on the token an easier mechanism to convert passive rewards into larger stakes.

xSNX

The second xToken, xSNX takes Synthetix‘s native token and wraps it into a liquid asset which represents a claim on underlying SNX which is staked via Mintr. What’s more, is that xSNX routes the underlying SNX to a communal staking pool which captures SNX inflation by minting sUSD. However, instead of having to keep an eye on sUSD, the xSNXa flavor automatically converts the debt to Set Protocol‘s ETH20MACO Set to leverage automated asset management form one of the best performing trading strategies to date.

The Bigger Picture

If anything, xTokens focus on KNC and SNX as their first integrations goes to show the project has their finger on the pulse. The premise of taking popular DeFi tokens and helping to automate their token utility provides a strong mechanism for passive users to take advantage of yield farming without any prior knowledge of how it works within various systems.

We expect xTokens to continue exploring other DeFi ecosystems, likely capitalizing on new tokenomic trends and liquidity incentives – like AMPL and their Geyser program – to double down on the yield farming trend.

For our fellow farmers out there, the time for free yield is quickly dwindling. As projects like xTokens help new users get onboarded, we’ll have to stay savvy to capture alpha before an xToken comes along to rain on the parade.

All jokes aside, I’m excited to see how xTokens play out in the wild, and if the average tokenholder is savvy enough to take advantage fo something like this which saves time and earns profits by taking advantage of DeFi’s best and brightest tokenomics.

To stay up with xTokens, follow them on Twitter.

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Compound Interview: Strategy Lead Calvin Liu Talks COMP Governance

https://defirate.com/compound-interview/

Compound – the sector-leading lending protocol – has continued to reach new highs following the launch of their native governance token – COMP.

With over $1B in assets now being supplied to the fasted growing DeFi product on the market, yield farmers are racing to get their hands on the hottest new DeFi token.

Meanwhile, anyone who’s been following Compound knows that this launch was the cumulation of years of hard work and perfect timing. COMP’s launch has triggered a new wave of governance, one in which the community is entirely responsible for dictating how the biggest DeFi protocol will address rapidly growing demand.

In this interview, I took some time to chat with Calvin Liu, the Strategy Lead at Compound responsible for coordinating all partnership and ecosystem interactions that have made Compound so well connected to date. Throughout our discussion, it’s evident that Compound has placed safety and the top of their priorities, perfectly exemplifying how the protocol has stood strong despite seeing more volume in the past two weeks than the last three years combined.

The goal of this conversation was to highlight the true value of COMP governance – a discussion we’re actively involved in as a delegate through DeFi Rate.

This also signals the first of our video-recorded interviews, all of which will be posted on the newly launch DeFi Rate YouTube channel.

 

For those looking a synopsis, here’s a recap of all the top talking points!

What has the reaction to COMP’s success looked like on your end?

It’s been a lot of fun – a bit of a rollercoaster. Kind of stressful, more than stressful actually.

We’re three years into building Compound and this is only inning two. We have visions that are 100x bigger for the protocol and its adoption.

What were the early days of Compound like?

I joined as the second employee in January 2018 while the company was founded in October or November of 2017 . When I joined, we were working out of an attic of an advertising agency.

This COMP launch has been a long time coming. We fundraised a strong seed round in April 2018. V1 of Compound was released in September of 2018. Compound V2 was shipped in May of 2019. COMP and governance shipped early this year.

The pace has always been very high and we always look to ship big, game-changing products quite slowly. It’s truly a marathon, not a sprint.

What was it that stood out to you about Compound in 2018?

DeFi didn’t exist at that time. I think Dharma had existed as a concept. Now it’s easy to see that was one of the first DeFi concepts with their peer to peer lending protocol.

The original idea for Compound was to build a bank on top of Ethereum. As we drilled further and further into the idea, it was narrowed down to the core primitives of simple interest rate markets.

We decided to build a primitive to do that but even at the beginning, we were figuring out how to define what we were doing. There was an idea that was shaped through fundraising and V1 of the protocol by seeing how people were using it.

The reason I was excited was less about the idea being super clear at the time. What was really compelling was that Rob and Geoff (CEO & CTO) this was their third company together. They knew how to start a startup. It was pretty easy to see that they were pretty good at decision making in a general startup way.

It was easy to see that they knew how to sequence the decision making to spend time on the right things.

What lead to making the choice that now is the time to decentralize decision making?

We very authentically believe the protocol can have the most impact if it’s governed in a decentralized way. I think there’s a lot of decentralized theatre and that people are underestimating how authentically we actually want to reach that goal. If Compound is going to be around in 100 years, the only way is if it’s community governed. This only works if users are stakeholders in the system.

With that in mind, there are no best practices. It’s a day by day transition. Governance is no longer a product and engineering problem – it’s a human problem.

Rob is almost like a steward of the community along with being the CEO of Compound Labs.

What was the rollout process for COMP and what can other teams takeaway from that? 

The biggest difference between Compound and other teams today is that V1 of Compound was launched in May of 2018. The token launched in June 2020 – 2 years later.

Meanwhile, Balancer (a project which I love) launched in April and now has a token in June. Compound has a 2-year track record of safety. For the past year, there were anywhere from $100-200M of assets in Compound with no incidents.

Safety is the most important thing for any project. It’s been our priority since day one.

In terms of the rollout itself, we always look through the lens of safety. Given that, what can we do that would work and would be effective that if wrong would not be the end of the world.

The COMP distribution is being changed daily – Proposal 11 is a big change. The great thing is that we built it in a way that (COMP) could be upgraded. We’re fortunate to have a community of people who care.

These proposals will need to change again and we need to prepare for that. We put a lot of time into this rollout both from a product and a team perspective. We’ve never rushed anything.

Even before COMP, the growth of assets was starting to plateau. Despite this, we decided not to make a short term decision of adding new assets and instead looked at the bigger inflection point.

Who is the ideal governance participant? 

The direction it goes organically is where we want it to go.

We’re not trying to guide anyone to do anything. When we first envisioned the distribution, we assumed the applications on top of Compound would either accumulate COMP or be in a position for their users to delegate to them.

What we envisioned was something like the Federal Reserve model. We imagined companies that use (or will use) Compound like Dharma, Argent, Binance, and Coinbase to all have their own users and be representing their own political parties.

Did you imagine the pace of proposals to be this fast?

It has been very fast.

However, it’s important to note that from a safety perspective, all the proposals are tweaks of existing parameters. There’s been no new code, new features, no markets. They don’t add risk or surface area of attack so they’re all ok.

The scope has been pretty tight. I expect this to slow down and I’m personally curious in the first major change such as adding a new asset market that affects the economics and risk parameters of the protocol. This should happen much slower with a lot more discussion.

We want to see Compound grow for 100 years so there’s no rush.

Was it intentional to wait to add new assets until distributed governance went live?

Adding assets was always attractive as a low hanging fruit to grow the usefulness of the protocol.

Instead, we focused on things we could do to increase the AUM by 10-100x, similar to the inflection point we just had with COMP.

This always took priority and we knew assets could come later through governance.

What’s your take on the rippling effects with tokens like BAT and DAI?

We didn’t see it coming. Honestly, we didn’t expect this type of uptick by the ecosystem. We thought it would be slower and more gradual.

It’s a good thing that governance is able to move fast to react. What’s happening with BAT was in-organic and Proposal 11 fixes that. Seeing as that trade was discovered about a week ago, the fact we’re already addressing it is great.

What’s happening to Maker is really interesting as a fan of DeFi. Compound and Maker have always had a strong relationship but Compound was never big enough until now to affect Maker big enough.

Selfishly I care that Compound users are safe so I hope to see this carried through the governance system.

What’s your take on the centralized players getting involved?

Since the very beginning, it’s been largely my job to talk to large hedge funds.

For two years, they thought it was cool – but they never wanted to use it. With the introduction of COMP they all piled in.

We’re seeing massive players put huge amounts of capital in, specifically because Compound has a track record of safety. Even when FTX put tokens into Balancer, they maintained centralized control so they couldn’t be used against them if for some reason they were hacked or stolen – their capital was not at risk.

But, I think we’ll see Compound capturing this new liquidity because people can trust it.

Many people messaged me saying they’ve never had DeFi positions on before but now everyone does. Hopefully Compound can play a small part in bringing CeFi to DeFi.

How does it feel to be largely responsible for the Yield Farming meme and the new DeFi interest?

People have said it feels like Compound has kicked off a new bull run.

I’m very active in other projects as an investor so it’s certainly fun but I don’t think we can claim the credit. There was a fuse waiting to be lit.

Hopefully, this yield farming wave draws in new participants. This will really blow up when people who aren’t even in crypto hear about these things.

As someone new to DeFi, what’s a good starting point?

It’s really hard to understand all the risks that there are – or to even quantify them.

I’m biased to say Compound is the most proven option out there. But, even so, there are risks. I saw a tweet about a stablecoin yield farmer who got liquidated because they did not think of interest accruing back to their position.

Quite frankly it depends on your risk tolerance.

If you wanted to pick one thing, I think one of the safest assets is USDC and one of the safest protocols of Compound. You’re still beating your bank savings by 100x and just trusting Coinbase to be safe with their bank accounts.

How does this new model of giving users control of the protocols they use set crypto products apart? 

It’s extremely exciting and I’m pretty impatient to see it play out.

COMP distribution is pretty slow. Being able to delegate makes a difference but it’s amazing watching our leaderboard.

We have a dashboard on delegation and at this point, a16z has almost 100 different addresses delegating to them.

I participate in governance in other projects as well. It’s so crypto native. Even the idea that a project doesn’t have a Telegram or Discord to talk to their team, it’s weird.

There’s a lot of room for more infrastructure. The Compound forum doesn’t have a lot of features I wish were there.

What are you thinking of building next for Compound Labs?

We’re done with handling the core protocol. We’re going to assist and educate but that’s done and handed off.

Our rate of shipping is every 6 or 8 months. It’s gonna be a while in crypto terms before anything goes public.

This framework we have towards interest rate protocols and uncollateralized borrowing. You’re starting to see projects represent off-chain assets (like Bitcoin on Ethereum). Now we’re wondering if there’s a way to generalize it to be any asset so that one day you can represent off-chain assets on Ethereum and use them as collateral.

Someday you could even represent intangible assets like reputation and identity.

It’s going to take a while but it will probably be in that general direction.

How should people join the conversation?

Our website has a ton of information. Our Discord is a great place to talk with the team.

Resources like DeFi Rate are fantastic. One of if not the best places to aggregate information about all things Compound.

Compound’s governance system is one of the first where, as a user, no matter how little COMP you have you can have a voice.

I would encourage people to check it – it’s not up to us anymore!


As you can tell, Compound is backed by an all-star team with a perfect viewpoint on user safety.

Now, as the protocol decentralizes it’s power, it’s fascinating to consider how things will change in the coming months.

If one thing is for sure, we’ll be keeping a close eye on governance, and doing our best to vote on behalf of the community as a Compound delegate.

To stay up with Calvin, follow him on Twitter.

To stay up with Compound, follow them on Twitter!

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Easter egg: The first person to read this and shoot me a DM on Twitter saying “COMP Easter Egg” will receive 10 DAI 😉

The post Compound Interview: Strategy Lead Calvin Liu Talks COMP Governance appeared first on DeFi Rate.

bZx Releases BZRX Governance Token Model

https://defirate.com/bzrz-token-model/

bZx – the lending protocol behind Fulcrum and Torque – has just unveiled a finalized model for the distribution of their native governance token – BZRX

While the project has been quiet in recent months, the release of an upgraded BZRX token model shows that bZx is set to make a major comeback with the release of bZx V2 in the coming weeks.

Given that BZRX has been ideated on since 2018, it’s now undergone a suite of workshops to incorporate the best ideas DeFi has to offer including governance, insurance, and a bZx DAO. Today, that model got a little sweeter through the introduction of fee sharing and liquidity mining.

Here’s what you need to know.

BZRX Fee Sharing

bZx has three key fees broken down as follows:

  • Origination fee: 0.09%
  • Trading fee: 0.15%
  • Interest fee: 10% of interest paid

With this new model, those fees are directed to two Balancer pools. Rather than issuing them directly to BZRX token holders, those who stake their tokens on bZx will receive Balancer Pool Tokens (BPTs) representing a claim on the assets in the revenue pools. This design not only encourages staking, but it also gives stakers a means of capturing BAL governance tokens from liquidity mining in tandem with a fraction of every asset supported on the lending protocol.

“There will be two Balancer fee token pools, a stablecoin pool with no impermanent loss, and a variable fee pool that holds more volatile assets such as ETH and other ERC20s.”

Here’s a visual representation of what this looks like:

This update will also be accompanied by a staking dashboard to easily participate in Fee Sharing, along with viewing historical stats about earnings and rewards collected to date.

BZRX Liquidity Mining

Next on the docket is the BZRX Protocol Disbursement Program aka Liquidity Mining. With this program, 20% of the total supply will be allocated through liquidity mining as follows:

  • BZRX Rebates (17 %) – Each time a user pays a fee, 50% of the value of the fee is refunded to them in the form of BZRX.
  • Protocol Usage (3%) – BZRX will be distributed in batches of 2,575,000 (0.25% of the supply) every week for the first three months in accordance with the fees generated from lending and borrowing – similar to the COMP model.

On top of this, bZx will look to incentivize BZRX LP staking similar to the SNX/USDC liquidity incentives, basically rewarding those who stake their proof of staking participation with extra governance weight and perhaps higher staking rewards.

Token Distribution

With BZRX set to go live in the coming weeks, here’s a look at how the supply is being broken down.

According to the original blog post, the distribution is set to start in September. bZx will also introduce an interesting governance model in which the top 3 BZRX delegates will form a Legislative branch while two members of the core team head an Executive branch. While Legislative delegates (aka the community) will hold all the power, the Executive branch is an interesting solution to keep the community in line.

“Much like the executive branch in traditional political systems, the executive has no power to propose or pass proposals on its own. Instead, the executive is to simply act as a check on the legislative branch, vetoing malicious proposals and attempts by representatives to form cartels.”

Last but not least is the Judicial branch – aka the smart contracts which dictate how the protocol can actually be used.

bZx’s Comeback

As someone wondering how bZx would respond to the Flash Loan attacks back in February, this new token model suggests that the protocol is set to make strong headway upon the launch of V2.

With the best aspects of the past few months fused with a new, battle-hardened foundation, BZRX is definitely worth keeping an eye on as the distribution goes live.

In the wake of so many yield farming opportunities, it will be interesting to see how bZx fairs against competitors like Compound and Aave. If one thing is for sure, it’s a great time to be a DeFi power user, and token models like this go to show how rapidly DeFi tokens are advancing relative to other assets in the wider cryptocurrency industry.

To stay up with bZx, be sure to follow them on Twitter!

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Curve Releases Blueprint for CurveDAO and CRV Governance Token

https://defirate.com/curvedao-crv/

Curve – a leading liquidity aggregator – has just released the first iteration of their framework for their upcoming governance token – CRV.

For our frequent readers, you may recall us covering CRV when they teased the governance token a month ago. Since then, we’ve seen CRV pop up in a number of places like the sBTC Curvepool incentives from Synthetix and Ren. Today, that rollout got one step closer with a formal proposal for the release of CRV – all of which is subject to change relative to the community feedback.

Here’s what you need to know.

CurveDAO

Underpinning the Curve ecosystem is a DAO based on the Aragon framework. For those unfamiliar with Aragon, it’s a highly modular protocol allowing DAOs to customize their governance framework as needed. We’ve seen DeFi projects like PieDAO leveraging Aragon and with Aragon Court and the forthcoming release of a native Aragon blockchain for governance optimization, the choice to leverage Aragon rather than starting from scratch makes a lot of sense.

CurveDAO will use time-weighted voting to give those who lock their tokens more governance weight than someone who participates for the first time. This weighting is likely to be modified relative to how the community sees fit and is really geared at trying to mitigate the 1 token 1 vote model which drastically favors those with deeper pockets.

CRV Distribution

The current proposal suggests CRV will be issued with a supply of 1B CRV which will be gradually inflated to a max supply of 3.03B Curve. Inflation is set to be the highest in the first year and scale up over time, suggesting early adopters will see the most upside from protocol usage.

Just as with Compound and Balancer, CRV will be earned by those who provide liquidity to the protocol. As previously stated, this distribution model is likely to be retroactive, meaning those who have been providing liquidity to Curve will earn an allocation from the initial distribution.

The key thing to keep in mind here is that in order to claim inflation, users will need to lock their LP tokens, similar to how Synthetix issues rewards for their liquidity incentives. We expect Curve will add a new feature specifically for this in the near future.

Fee Distribution

The paper suggests that Curve will collect all protocol fees and redirect them to the DAO, ultimately being used to burn CRV off the open market.

Taking a page out of the KyberDAO book, we expect that CRV tokenholders will have a say in how those fees will be distributed in the long term, possibly including voting incentives or direct dividends to tokenholders.

The Next Plantation

For those who have not been keeping an eye on Curve, it’s definitely time to start paying attention. As a leading aggregator of stablecoins and their newly implemented Bitcoin liquidity pools, Curve is quickly shaping up to be the most optimal market to exchange top tokens at minimal slippage.

Plus, with a suite of underlying programs like Synthetix’s sUSD and sBTC liquidity incentives, the value prop to supply liquidity to earn retroactive CRV is two-fold.

Please note that the model proposed today is still a work in progress and that anything mentioned above is subject to change.

In the meantime, be sure to stay up on all things Curve by following them on Twitter or by joining the Telegram channel.

Until then, get your tractor ready cause it’s farmin’ season!

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Maker Opens Governance Polls for KNC & ZRX Collateral

https://defirate.com/maker-knc-zrx/

Maker – the sector-leading lending protocol – has opened a suite of new governance polls including the addition of Kyber Network‘s KNC & 0x Protocol‘s ZRX as collateral types to mint Dai.

While this is merely the first step in formally introducing new assets as collateral, all previous tokens which have made it to this point have subsequently been added to the protocol. With both the KNC and the ZRX votes signalling strong support, it’s highly likely that both will pass – leading them to an Executive Vote to ratify their addition in a few weeks time.

Why DeFi Tokens?

The timing of the integration of two leading DeFi tokens comes in parallel with a larger trend in which assets like KNC and ZRX are experiencing enhanced demand in recent weeks. For those unfamiliar, both KNC and ZRX are currently listed on Binance and Coinbase Pro – an indicator that out of all the wider DeFi tokens, these have the most reach in terms of diverse liquidity pools.

At the time of writing 0X Protocol (ZRX) currently boasts a market cap of $344M while Kyber Network Crystals ($KNC) is now not far behind at $244M. Both assets have identical Risk Parameters including 4% Risk Premiums, 175% Liquidation Ratios and 5 Million Dai Debt ceilings.

Seeing as BAT is currently the only other ERc20 token outside of USDC and WBTC supported as collateral, the introduction of KNC and ZRX would signal a strong shift in narrative as Maker begins to expand its asset pool. For context, only 525k DAI has been created using BAT relative to the 10M DAI minted using WBTC as collateral.

We expect the integration of KNC and ZRX to fall somewhere in between these two, further boosting the potential for Dai to continue reaching ATH’s in terms of outstanding supply.

As for the individual projects themselves, Kyber is currently gearing up for it’s Katalyst token rework – introducing new governance features and value accrual mechanisms via the KyberDAO. With 0x Protocol currently testing its native DEXMatcha – in closed beta, it’s safe to assume that ZRX is also likely to experience strong demand in the coming months.

Maker Continues To Diversify

For those following along last week, Maker was noted as considering the introduction of Centrifuge real-world assets like Paperchain DROPS – tokenized invoices representing a claim on future music royalties. While we all know that Maker will inevitably include the support for more diverse asset types, the introduction of tested tokens like KNC and ZRX feels like the right move in terms of slowly easing into more rich collateral.

Similarly, the sheer number of governance polls in Maker appears to have reached a new high, with dozens of polls to whitelist new actors to provide more oracle information to better battle harden the system.

 

If one thing is for sure, Dai’s surge in supply despite a 0% Dai Savings Rate signals that DeFi continues to move the needle forward despite the promise of attractive lending rates.

For those eager on keeping up with Maker’s new collateral types, follow them on Twitter or join the conversation via Maker Chat.

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DeFi Governance Tokens Heat Up: pNetwork & Curve DAO

https://defirate.com/defi-governance-ptokens-curve/

For those who have been keeping up with DeFi Rate, you’ve surely heard us talk ad nauseam about the growing trend of DeFi products tokenizing governance rights over major protocol roles and decisions. In the past 48 hours, we saw two more projects – pTokens and Curve – join the movement.

This Friday announcement was compliment by Curve sharing this Tweet earlier today.

With both Provable and Curve playing growing roles in the DeFi ecosystem through interoperability and lending, the introduction of a tokenized governance vehicle places even more power in the hands of its users.

Here’s what you should know about each.

pNetwork & PNT

For those unfamiliar with Provable, you may recall our interview with the project when they launched pTokens – an interoperable onramp for assets like Bitcoin to be ported to Ethereum in the form of pBTC.

To ensure a smooth launch, pTokens went live with a centralized model in which pTokens were backed by a single validator node. Now, with 27 pBTC (~$270,000 at the time of writing) currently circulating, Provable will transition to a decentralized validation system via the pNetwork.

“Validators are node operators having special signing capabilities — these are an essential component of the network as they validate the asset switch from one blockchain to another (peg-in and peg-out) in a secure and decentralized fashion. Validators can cooperate and perform the cross-chain movement of assets after they have all verified independently the external blockchains’ conditions.”

Validation will be permissioned to start, with the intent to become permissionless over time. In order to become a validator, node operators will need to post a bond of 200k PNT – the network’s native governance token.

Outside of validation, PNT will mark the introduction of a pNetwork DAO in which validators can govern pegs, fees, and resource allocation while earning interest for participating in governance and contributing in value-added ways to the Provable ecosystem.

Provable is set to incentivize validation by providing PNT issuance with a 63% return split across a two-year period, granting a higher reward during the first year (42%) and transitioning to half that rate (21%) during the second year.

What this goes to say is that it will pay to be involved from day one – and that by validating on the network you stand to earn both PNT inflation and fees collected from cross-chain tokenswaps.

Curve

Curve – a rising liquidity aggregator – was popularized through its interest-earning stablecoin wrapper – yTokens. For those unfamiliar, users can pool a suite of stablecoins like Dai, USDC and sUSDCand receive yCurve – a token that collects interest by routing liquidity between different trades and lending protocols.

This week, Curve has been making waves with its introduction of a BTC Curve pool – supporting a way to earn interest by supplying renBTC and wBTC. This goes to signal that Curve is quickly evolving to more than just stabelcoin, hence the need to govern what new pools are introduced.

While news of Curve’s new governance token remains vague, we can assume it will follow a SAFG model like Compound or FutureSwap in which those using the protocol are the first to earn the native token. As stated in the original tweet:

“All liquidity providers since the inception in January 2020 will be considered for the initial distribution proportionally.”

To this end, we also know that Curve is exploring the use of an Aragon DAO to introduce unique voting frameworks for the growing liquidity aggregator.

More so, they’ve stated they will look to make enhancements on the “one token one vote model” likely introducing some sort of weighted voting schema where those who actually earned and used the protocol might have more voting power than someone who comes across tokens otherwise.

DeFi Governance

Across the board, the charge for DeFi protocols to introduce a native token AFTER they’ve found product-market fit is one we can certainly get behind.

Better yet, the capacity to distribute tokens to users – rather than pure speculators – is thought to better align incentives and encourage participation as those holding the tokens are the very people who care the most about the products’ future.

With Kyber, Aave, Compound and Balancer all joining the governance movement in recent weeks, its set to be an exciting year for DeFi power users.

In the meantime, we recommend keeping an eye on pTokens and Curve on Twitter – and we’ll be sure to keep you in the loop on any new updates as they’re announced!

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DAO Legal Battle: Aragon vs Autark Community Grant Dispute

https://defirate.com/aragon-autark/

When it comes to the growing DAO movement, virtually all of our coverage has been sunshine and rainbows. With the rare exception of DigixDAO, we’ve yet to see any major contention when it comes to distributed communities fighting for a common goal. However, we just saw one of the first major DAO disagreements in the form of a legal dispute between Aragon – a leading DAO provider – and Autark, a project building coordination tools for digital cooperatives.

This post sparked a wider response from the Aragon Foundation themselves, namely in the form of a thread from Aragon’s co-founder Luis Cuende.

 

What’s interesting about this story is that Autark were once core contributors to Aragon, with the project primarily being funded by Aragon’s ecosystem grant program. Now, we’ve seen quite conflicting stories and feel it’s our duty to share both sides.

What’s To Know?

Back in 2018, Aragon launched a program called Flock – a grants funnel to reward Aragon contributors with capital to build out extensions and tools to further the Aragon ecosystem. Some of the more notable outcomes of this program include projects like 1Hive and Aragon Mesh.

Autark was one of those grant recipients, originally receiving funding to the tune of 390k DAI and 350k ANT (vested over 4 years) via AGP-19.

However, Flock was ultimately disbanded for a suite of reasons including lack of accountability, high coordination costs, and difficult KPIs to monitor success. Looking at this from both sides, it’s understandable that the Aragon Foundation would cut the ties on a program that as hemorrhaging money to initiatives – like Autark – that had little tangible value to the existing ecosystem.

On the flip side, many of the grant recipients – again, Autark – were entirely reliant on this project to keep the lights on. While all seemed to be going well when Autark applied (and passed a vote) for their second grant – AGP-73 – it looks like this is where things get rocky.

Following the dissolution of Flock, Aragon cut off funding to their grants, hence the lawsuit from Autark requesting that Aragon fulfill their original commitment of AGP-73. In total, Autark requested an $800k settlement from Aragon, resulting in a countersuit from Aragon themselves.

Looking at this for the first time, the size of these grants is pretty wild. As stated in the AGP, Autark was set to receive 1.6M (yes million) Dai over the course of a year, split into 400k Dai each quarter. While my experience with grants is not deep whatsoever, these amounts are drastically higher than anything I’ve seen.

To that end, this story reaches an interesting tipping point when it comes to how this dispute will be resolved.

Enter Aragon Court?

Perhaps the most exciting addition to the Aragon stack in the last year was the deployment of Aragon Court – a decentralized dispute portal in which any Aragon DAO can file a claim for governance from ANJ tokenholders. The cool thing about Aragon is that this is just one of the many exciting features (many of which have yet to be released) that shows why it is the industry-leading DAO platform. Taking this a step further, it’s products like Aragon Court that Flock was looking to incentivize.

Now that the story has gone public, community members are calling to have the issue with Autark resolved directly in Aragon Court, using ANJ holders (and the wider community) as a proxy for the dispute resolution.

While the Aragon Foundation has voiced that this is a special case in which legal action *should* be resolved in a tangible jurisdiction (in this case Switzerland) it does open up an interesting can of worms. How involved does the wider Ethereum community deserve to be in this dispute?

While it’s far too early to answer any of these questions, this development poises a really fascinating discussion around DAO resolution. As someone actively contributing to wider protocol governance, this topic is increasingly interesting to us as a potential protocol politician.

To stay up on the case, be sure to follow both Aragon and Autark on Twitter. We’ll be sure to update you on any new developments as they unfold!

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Balancer Announces Governance Tokens BAL for DEX Liquidity Mining

https://defirate.com/balancer-bal-governance/

Balancer – a non-custodial portfolio manager, liquidity provider, and price sensor – has just announced the release of BAL – a native governance token that rewards users for providing liquidity to Balancer Pools.

Just two months after the closing of a $3M seed round and a full mainnet launch Balancer has been steadily growing in liquidity, currently sitting at ~$2.5M across all pools to date.

Now, with the addition of BAL, there’s not only an incentive for pool creators to collect pool swap fees, but also earn governance tokens for a term coined “liquidity mining”.

“We believe that these protocol users should get to participate early on in deciding how the protocol evolves. This is why we are proposing to implement the concept of liquidity mining: Balancer protocol would distribute BALs to liquidity providers, starting imminently”

What’s To Know

The total supply of BAL will be capped at 100M token spilt as follows:

  • 25M to founders, core devs, advisors and investors, all subject to vesting periods.
  • 75M distributed to the community through liquidity mining

As for how those community tokens enter the circulating supply, 145,000 BAL will be issued per week, coming out to roughly 7.5M per year. What’s interesting to note is that while the first year distributions are relatively fixed, Balancer has stated that future distribution will ultimately be decided by BAL holders.

Seeing as the seed price of BAL was sold at $0.60/token, this makes the max supply currently valued at a modest $60M, with the expected first-year supply of 32.5M BAL ~$19.5M at the time of writing.

For reference, at a fully diluted supply, this would place BAL in the top 10 of the DeFi Market Cap, signalling that should the protocol actually accrue volume (and fees) as expected, that there is room for growth for the sector rising asset management DEX.

As for how BAL is earned, all liquidity providers will receive BAL so long as a USD price can be extracted from CoinGecko for at least 2 tokens present in their liquidity pools. Balancer is also implementing a feeFactor which looks to level out liquidity mining across all pools, regardless of their underlying pool swap fee.

Valuing Governance Tokens

With the recent launch of the UMA governance token, COMP and Aave’s upcoming governance migration, prominent community members have pointed out that it’s interesting to consider how governance tokens should be properly valued. Especially with new frameworks like the SAFG rolling out which allows users to earn governance tokens with no economic value (for now) it’s interesting to consider what level of demand these protocols will see for their native tokens.

More so as it relates to Balancer, with the upcoming launch of Uniswap V2 it’s interesting to consider whether or not the ability to earn native tokens for providing liquidity will outweigh a desire to collect direct protocol fees.

If one thing is for certain, DeFi is slowly reducing the barriers to maximum liquidity, especially with the ability to provide capital in the form of one asset, instead of having to split it into two (like how Uniswap works today). While it’s unclear who the biggest benefactor of this added liquidity will be, we can only assume that DeFi products at large stand to benefit from deeper, permissionless liquidity in the coming years.

To stay up with Balancer, follow them on Twitter. To join the conversation, join their Discord!

The post Balancer Announces Governance Tokens BAL for DEX Liquidity Mining appeared first on DeFi Rate.

Aave Teases New DeFi Collateral & LEND Governance System

https://defirate.com/aave-lend-governance/

For those who have been keeping an eye on the DeFi Pulse leaderboard, you’ve surely seen the spooky project Aave creeping into the #4 spot – recently passing Uniswap in the past 48 hours.

While we’ve covered Aave extensively here on DeFi Rate in the past, we’ll be using this article to shed some light on what makes the sector rising lending protocol unique to money market protocols like Compound. We’ve seen quite a lot of attention on crypto Twitter as of late are hoping to show why this is the case.

 

TLDR: Aave recently showcased a sneak peek at their new collateral system in which users can post Uniswap liquidity tokens and TokenSets as collateral all while having those assets insured using the protocol’s native token – LEND and a backstop of stablecoins like Dai and USDC.