September 01, 2023

This Week In DeFi – Sept 1

Happy Friday, DeFi community!

This week, Coinbase added support for PayPal’s recently-launched stablecoin, PYUSD, which began trading yesterday.

The exchange has begun by offering PYUSD trading with an "experimental" label, which is often assigned to new or low-volume assets.

PYUSD was launched in partnership with Paxos, and while several exchanges like Huobi, Kraken, and Crypto.com have listed it, adoption has been slow – possibly due to some hesitancy from crypto users.

PayPal aims to simplify payments and facilitate digital money usage for big brands with PYUSD. Whether Binance will list PYUSD remains uncertain.

https://twitter.com/CoinbaseAssets/status/1697284972535488655

Several projects, including Arrakis, Gamma, and Maverick, are now offering automated investment strategies for Uniswap v3 liquidity providers (LPs).

LPs face a tough task of continually rebalancing their assets, incurring gas fees, and facing impermanent losses.

Maverick Protocol, recently deployed on Coinbase's Layer 2 network, offers a simplified approach to DeFi trading with various strategies, while Gamma has also seen substantial growth. Arrakis remains the largest liquidity manager despite a recent decline in total value locked (TVL).

Maverick's focus on Coinbase Wrapped ETH (cbETH) and unique features like follow-up prices in liquidity pairs make it a standout choice for DeFi users on Coinbase's Base network.

https://twitter.com/ArrakisFinance/status/1697234280655786484

Binance has announced that it will discontinue support for the BUSD stablecoin by February 2024, following BUSD issuer Paxos’ halting of the creation of new BUSD tokens earlier this year.

Although Binance assures users that BUSD will continue to be backed 1:1 with USD, it encourages them to convert BUSD into the FDUSD stablecoin before February 2024.

Starting from September 7, Binance will halt withdrawals of Binance-Peg BUSD tokens on various chains and delist BUSD trading pairs, with additional adjustments to services related to BUSD planned by the end of the year.

https://twitter.com/MessariCrypto/status/1697327012166205846

Cryptocurrency wallet provider Zengo has introduced a new feature called Legacy Transfer, allowing users to designate a beneficiary who will inherit their crypto assets in a non-custodial manner if they become inactive for a specified period.

This feature is built upon Zengo's Multi-Party Computation (MPC) infrastructure, which eliminates the need for traditional private keys and relies on user controls and three-factor authentication (3FA) for added security.

The system divides private key responsibilities between the user's device and Zengo's servers, enhancing asset security by avoiding a single point of failure. Zengo's Legacy Transfer offers a multi-chain inheritance-style solution for crypto assets, focusing on secure self-custody.

https://twitter.com/ZenGo/status/1696547305627820505

PYUSD has been picked up by several crypto exchanges over the last week, with Coinbase becoming the most major platform to offer support the budding stablecoin.

The new contender offers an interesting mix of characteristics for crypto users, and may perhaps be one of the most reliably-stable stablecoins to hit the market yet. At the same time, it may also be one of the most censorable stablecoins to date – something which goes almost completely against the ethos of crypto.

It will be interesting to see if native crypto users will sacrifice some control on the censorship front, in order to tap into improved stability, or if they will snub PayPal’s token altogether. After all, will they want to trust a company that threatened users with $2,500 fines for “misinformation"?

Starknet appears to be upping the ante in the Layer-2 race, as its partnership with Argent has sprouted a new venture studio: Hito Studios.

Hito Studios is looking to incentivize and fund development on Starknet, by backing startups on the scaling platform. The entity has begun its journey already with two portfolio companies – NFT marketplace Unframed, and decentralized exchange Ekubo (launched by a former Uniswap lead engineer).

Lastly, an important emerging trend is automation. First came the Telegram bots, promising a hands-off experience for users. Next, it looks like we’re witnessing the rise of liquidity managers, to take the heat and costs off liquidity providers’ hands.

We can expect to see these platforms continue to grow over time, as users fight to minimize their administrative costs, as well as impermanent losses on Uniswap pools.

Overall, there may be a big tightening of efficiency in the AMM world – helping both liquidity providers and traders.