DeFi
How DeFi and stablecoins can end the US debt crisis
A version of this article appeared in our Decentralized newsletter of June 18. Register here.
general manager, Tim here.
Here’s what caught my attention about DeFi recently:
- Why stablecoin adoption could contribute to rising US debt.
- ZK token launch causes congestion.
- Tapioca DAO deploys an Andre Cronje-inspired airdrop.
DeFi and US debt
More and more politicians are saying that dollar-backed stablecoins could be the answer to the US government’s $33 trillion debt.
Former House Speaker Paul Ryan is the latest. He made the case for taking stablecoins seriously in a June 13 statement. opinion article for the Wall Street Journal.
He said the promotion of dollar-backed stablecoins could lead to a “sustainable increase in demand for US debt” at a time when previous major buyers are withdrawing.
Indeed, to issue dollar-backed stablecoins, companies like Tether must hold dollars or dollar equivalents like US debt in reserve.
Stablecoins are the lifeblood of DeFi. Traders often look at the stable coin supply to gauge market sentiment.
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Policymakers deciding to take stablecoins more seriously and accelerating the establishment of a regulatory framework for them should benefit DeFi.
Others have also noticed the trend.
“Many Republicans recognize the strategic benefits of a private sector U.S. dollar stablecoin,” said Pranav Kanade, portfolio manager at VanEck’s Digital Assets Alpha Fund. DL News.
ZK launch clogs the network
Airdrop recipients rushing to claim ZKsync’s ZK token clogged the network Monday morning, calling into question the network’s ability to scale.
As with several previous airdrops, remote procedure calls – or RPCs – were the main bottleneck.
(1/2) The network is currently under heavy load. Some RPC services may experience degraded performance.
The teams are working to increase the capabilities of the RPC.
Stay tuned for updates.
— ZKsync (n, ∆) (@zksync) June 17, 2024
RPCs are protocols that allow users to perform tasks involving different servers, such as sending transactions to blockchains.
As of 8 a.m. London time, claims for 3.6 billion ZK tokens were opened for nearly 700,000 addresses.
According to the ZK Nation X account, over 45% of the airdropped ZK token supply was claims by more than 225,000 addresses in the first two hours.
ZKsync is a blockchain built on Ethereum and uses zero-knowledge proofs to offer faster transactions with lower fees.
Tapioca Options Airdrop
Tapioca DAO, a new money market protocol built on LayerZero, is trying something different to combat airdrop attackers.
Instead of giving away free tokens, its airdrop will give users the opportunity to purchase its native token at a discounted price using call options.
The plan seems to be working. Since the start of the drop on June 14, the protocol has brought more $1.5 million.
Matt Marino, co-founder of Tapioca DAO, has already stated DL News the inspiration for the airdrop came from Andre Cronjethe so-called DeFi godfather behind the Yearn Finance, Keeper Network and Solidly protocols.
“He talked about call options and I was a big fan of Keeper Network,” he said. “I really agreed with the principle of what he was talking about, and we followed it.”
Cronje was the first to float the idea of encouraging the use of call options in 2021.
Data of the week
The increase in the total market value of stablecoins has slowed after strong growth through late 2023 and early 2024.
Tether’s USDT and Ethena’s USDe have supported the metric over the past month, while other stablecoins, like Circle’s USDC, suffered a 3% decline.
This week in DeFi governance
VOTE: Jupiter DAO to Fund New Uplink Working Group
PROPOSAL: ACI offers deployment of Aave V3 on ZKsync
VOTE: Seamless DAO votes to adjust interest rates for WETH
Article of the week
Coin Center’s Neeraj Agrawal jokes that President Biden might start sporting a Milady NFT profile picture – a symbol of degenerate crypto culture – to match Donald Trump’s recent photo. pro-crypto posture.
I believe a member of Biden’s campaign team is currently finding the courage to suggest a PFP for Milady.
– Neeraj K. Agrawal (@NeerajKA) June 13, 2024
What we watch
Will process the data and soon produce a research paper on the events triggered by the CRV liquidation. This will involve determining the security parameters of soft liquidations and price oracles.
The search will be applied immediately on @CurveFinance
– Michael Egorov (@newmichwill) June 16, 2024
Curve co-founder Michael Egorov promises a post-mortem after the liquidation of his leveraged CRV token position on Curve Lend caused $10 million in bad debt.
Disclaimer: Both co-founders of DL News were previously major contributors to the Curve Protocol.
Do you have a tip on DeFi? Contact us at tim@dlnews.com.