To the DeFi Community,

This week,

MakerDAO, the protocol behind the Dai stablecoin, is considering a proposal to raise the DAI Savings Rate (DSR) to 3.33%. 

This adjustment is driven by the surging interest rate environment and the US Federal Reserve's efforts to combat inflation. The proposal, put forth by DeFi risk management firm Block Analitica, aims to increase the yield for DAI holders. 

The DSR is funded by the Stability Fee on the MakerDAO network and is paid when DAI is locked into a DSR contract. If approved, the increase in DSR could have significant implications for the broader DeFi ecosystem, increasing demand for holding DAI and potentially driving up borrowing rates across various lending platforms.

The MakerDAO community has also voted for onboarding a new real-world asset vault, which will invest up to an additional $1.28 billion in US Treasury bonds. The DAO has also voted to remove $500M of the Paxos stablecoin from its reserve assets, and added RocketPool’s rETH as a collateral option.

https://twitter.com/MakerDAO/status/1662161508716150785

The Tornado Cash attacker has decided to return control of the protocol’s governance to the community. 

A proposal to hand back control, proposed by the attacker themselves, has been passed with overwhelming support and implemented. 

The attacker had initially stolen a significant number of TORN tokens and converted a significant number of them into Ethereum, while retaining a controlling stake in the protocol’s governance.

Although the takeover resulted in the theft of tokens, it did not affect the protocol’s primary functions.

https://tornado.ws/governance/21 

Magic, a crypto wallet-as-a-service provider, has raised $52 million in a strategic funding round led by PayPal Ventures. 

Magic's wallet creation service enables companies to onboard users to Web3 and reach millions of customers on their apps. Its non-custodial wallet creation infrastructure utilizes a software development kit (SDK) that allows users to create wallets instantly using their existing email, social media accounts, or SMS. 

Magic has already generated more than 20 million unique wallets and its SDK is utilized by over 130,000 developers. Clients of Magic include well-known brands such as Mattel, Macy's, Immutable, and others from various industries.

https://twitter.com/magic_labs/status/1663909048922537987

Popular bridging protocol Multichain has announced the suspension of cross-chain routes and revealed that its CEO, Zhaojun, cannot be reached. 

The protocol has experienced various issues in the past two days, and despite the team's efforts to maintain it, they are currently unable to contact Zhaojun and access the necessary servers for maintenance. 

As a result, the bridges for several projects including Kekchain, PublicMint, Dyno Chain, Red Light Chain, Dexit, Ekta, HPB, ONUS, Omax, Findora, and Planq cannot be kept online without server access. 

The disclosure confirms part of the rumors that have been circulating since last week, indicating that at least one key team member is absent. 

https://twitter.com/MultichainOrg/status/1663941611380965376

DeFi yields are slowly climbing their way back into relevance behind rising Federal Reserve interest rates – with MakerDAO looking to increase its Dai Savings Rate (DSR) from 1% to 3.3% – more than triple its current return.

If successful, the shift may trigger some interesting action as incentives shift and investors reallocate funds across the ecosystem.

Other stablecoins have also had some interesting news this week, as Tether makes new all-time highs in terms of market cap (and therefore tokens in circulation) – despite the majority of its competitors seeing decreases in theirs.

Circle’s USDC has also natively expanded into Arbitrum, which may provide an uptick in activity on the popular Layer-2 platform.

Particular countries have taken big steps affecting Web3 this week, as the European Union finally signs its far-reaching MiCA framework into law. China, on the other hand has released a paper for innovation in the sector, calling it an “inevitable trend.” Beijing seeks to establish itself as a global innovation hub for the digital economy, with around $14 million in funding pledged each year until 2025.

Interest Rates

DAI

Highest Yields: Nexo Lend at 10% APY, Aave at 2.2% APY

MakerDAO Updates

DAI Savings Rate: 1.00%

Base Fee: 0.00%

ETH Stability Fee: 0.50%

USDC Stability Fee: 0.00%

WBTC Stability Fee: 0.75%

USDC

Highest Yields: Nexo Lend at 10% APY, Aave at 2.4% APY

Top Stories

EU Formally Signs New Crypto Licensing, Money Laundering Rules Into Law

Beijing releases white paper for web3 innovation and development

Tether (USDT) market cap breaks ATH, Binance CEO points at regulatory caps

Circle's USDC Stablecoin Headed for Ethereum Scaling Network Arbitrum

Stat Box

Total Value Locked: $46.66B (unchanged since last week)

DeFi Market Cap: $47.61B (up 2.9%)

DEX Weekly Volume: $6.69B (down 9.5%)

DAI Supply: 4.60B (down 0.4%)

Bonus Reads

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[Samuel Haig – The Defiant] – Curve’s Stablecoin Trades Within 0.5% Range For First Month

[Yogita Khatri – The Block] – Avalanche hits 1 million monthly active addresses for the first time