Crypto exchange FTX has announced plans to launch a decentralized exchange (DEX), called Serum, built on the Solana blockchain within the next few weeks. FTX CEO Sam Bankman-Fried and crew selected Solana over Ethereum because it’s reportedly more scalable and cost-efficient than its counterpart. But the team intends to integrate a cross-chain gateway between Serum and the Ethereum network that will provide an entry point for current DeFi users to start trading on Serum.
Serum also introduces two new tokens: a discount and staking token with limited governance capabilities called Serum (SRM) and a similar second token that allows for even steeper trading discounts dubbed MegaSerum (MSRM). One MSRM is equal to 1 million SRM stacked together. Of the 10 billion SRM supply, the Serum team and contributors kept 43% and sold 3% in a private sale that has raised ~$7 million to date. The remaining tokens will be split evenly between a collaborator fund and ecosystem incentives fund.
While FTX spearheaded the announcement, Serum is a product of the collaboration between FTX and Alameda Research and various external partners that operate under the Serum Foundation. These partners include Multicoin Capital, Kyber Network, CoinGecko, Gauntlet Network, TomoChain, and advisors Robert Leshner and Calvin Liu of Compound.
Why it matters:
The announcement provides a significant boost to the Solana network, which also bagged the Kin cryptocurrency project back in May. It could also reignite interest in base layer platforms outside of Bitcoin and Ethereum, especially if Ethereum’s rising fees ward off potential users.
The push for Ethereum compatibility is an important one. Ethereum houses the majority of on-chain activity, and applications building on alternative layer-1s would do well to plug into its existing user base to bootstrap liquidity. It’s a clear sign that the path to success, if not build on Ethereum, may require bridging to it. In this case, Solana is acting more as an Ethereum sidechain than a true base layer.
Balancer, an automated market maker similar to Uniswap, began distributing its governance token BAL today after launching its liquidity mining program on June 1. Each week 145,000 BAL will be distributed to liquidity providers who deposit assets onto the platform. Since LPs became eligible to earn BAL earlier this month, the total supply locked increased from $15 million to around $45 million today.
Why it matters
As we saw with the Compound liquidity mining going live last week, this incentive mechanism can be incredibly effective in attracting capital. Now that the token is being priced, liquidity providers can gauge the yield earned and may rush to add capital.
In the case of COMP, the frenzy to add capital to the platform had a direct effect on the price making it a top 25 most valuable asset. Already BAL has become the second-largest DeFi token with a market capitalization of $580 million (1.6 billion fully diluted)
The LAO (Limited Liability Autonomous Organization), an initiative developed by OpenLaw to create a for-profit DAO is getting updated with an extension to the Moloch v2/LAO smart contract. The new release by RaidGuild called Minion is an extendable smart contract for Moloch DAOs that will enable subsidiaries to be created within DAOs. These subsidiaries are currently named “Baby DAOs”.
Why it matters:
Currently, only accredited investors can participate in LAOs or for-profit DAOs. Subsidiary DAOs (SubDAOs) enable new organizational structures that may allow participation from non-accredited investors. In the short term, DAO subsidiary components could function like special purpose vehicles in the traditional world. Over time subDAOs may gain additional functionality and enable widespread participation of non-accredited investors.
The creation or transactions from subDAOs will still require approval from the original “parent” DAO. This means that the parent DAO’s community will maintain voting rights and remain in control.
Compound has announced its community governance system and associated COMP token are now live. The new model hands control of the protocol over to COMP holders, enabling them to propose and vote on governance actions such as adding support for new assets. At the moment, token holders include existing shareholders of Compound Labs and the protocol’s current founders and team members.
Coinbase Custody almost simultaneously announced its is launching support for Compound’s new governance system and COMP token. The voting solution will allow clients to use their COMP holdings to participate in governance decisions directly or by way of a third-party without having to move the tokens out of cold storage. Today’s announcement also stated the custodian would open deposits and withdrawals for all Compound c-Tokens, cETH, cZRX, cUSDC, cBAT, cDAI.
Why it matters:
The launch marks is a step forward for Compound in terms of decentralization, as the company removed itself from the decision-making process and handed these responsibilities over to a distributed set of token holders.
While the number of token holders consists of only current team members and company shareholders, Compound reserved over half of the supply for users of the protocol. The team is planning to release more details on the distribution model in the coming weeks.
Compound marks the second governance system support by Coinbase’s custody arm. The custodian launched a voting solution for Maker last fall (Oct. 2019). Aside from its flagship product, Coinbase now is a leading service provider for three of crypto’s most prominent activities: secure storage, staking, and governance.