Tag: DeFi

SushiSwap CEO Proposes New Token Model

by Blockchain News

SushiSwap CEO Jared Grey has initiated a pivotal proposal titled “Deploy new tokenomics for Sushi.” This initiative, which seeks to overhaul the platform’s existing token economic model, has now entered the crucial stage of community voting on Snapshot. The voting process, critical for determining the future course of SushiSwap, began recently and is set to conclude on November 25, 2023, at 1:00.

The core of the proposal is to generate a consensus within the community. Its details and the initial draft can be found on the Sushi forum, providing comprehensive insights into the proposed changes. Grey’s initiative emphasizes the need to restructure Sushi’s token model to enhance its role in the protocol’s ongoing success and contribute to its growth trajectory. Since its inception, SushiSwap has been a front-runner in tokenomics with innovative initiatives like MasterChef and xSushi. The new proposal is a culmination of feedback from both the Sushi and DeFi communities, aiming to set the platform on a sustainable growth path.

The proposed model is built on three fundamental pillars: protocol sustainability, token utility enhancement, and treasury diversification. It addresses several key challenges, including improving rewards efficiency to reduce the annual cost of Sushi emissions, establishing a balanced approach to emissions distribution, addressing financial stability concerns, recalibrating LP incentives, and revising xSushi staking mechanisms.

Furthermore, the economic model proposed scales strategically through various innovations. These include generating primary revenue from LP transactions through trading fees, income from trade fees via aggregation, potential revenue from staking rewards, and forming strategic partnerships. The model also considers the interests of key stakeholders such as Liquidity Providers, xSushi holders, traders, token projects, DAOs, and the Sushi Treasury.

The objectives of the revised proposal are manifold. They include promoting decentralized ownership, amplifying liquidity, encouraging sustainable growth, enhancing the protocol’s sustainability, bolstering $SUSHI utility, and diversifying the treasury for robust financial operations. This new model aims to enhance liquidity, offer non-dilutive token rewards, institute a balanced supply, and ensure competitiveness in the evolving DeFi landscape.

The ongoing voting process is a decisive step for SushiSwap. A positive outcome will lead to the enactment of the proposed framework, reshaping Sushi’s token model to align with its ecosystem goals, increase decentralized ownership via the DAO, realign stakeholders optimally, and promote ecosystem growth with sustainable emissions and value.

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Australian Taxation Office Clarifies CGT on DeFi and Crypto Wrapping

by Blockchain News

The Australian Taxation Office (ATO) has provided pivotal guidance on the capital gains tax (CGT) treatment concerning decentralized finance (DeFi) and the process of wrapping crypto tokens. This move is part of the ATO’s ongoing efforts to clarify tax obligations in the evolving domain of digital assets and blockchain-based finance.

DeFi, a form of finance leveraging blockchain technology to operate without traditional financial intermediaries, predominantly runs on the Ethereum blockchain. In DeFi, capital gains can occur, and the ATO has highlighted several CGT events (A1, E2, C2, H2) that might be relevant, depending on the specific arrangement’s nature.

A critical factor in determining CGT events is whether a trust relationship is established within the DeFi arrangement. This becomes significant in scenarios where the legal person holds the same type of asset for other beneficiaries, impacting the sole beneficiary status.

The ATO’s guidance clarifies that many DeFi lending and borrowing arrangements could trigger a CGT event, primarily when beneficial ownership of a crypto asset changes. This can occur through either asset exchange or a future rights exchange.

In DeFi, liquidity pools are mechanisms for pooling crypto assets to facilitate lending and add liquidity to trading. Providers who contribute to these pools receive new assets or rights, representing their pool share. The ATO clarifies that depositing into and withdrawing from these pools can constitute CGT events, determined by the market value of the assets involved.

Rewards or returns from DeFi platforms are treated similarly to interest income for tax purposes. The market value of any crypto asset reward at the time of receipt must be reported as assessable income.

Wrapped tokens, representing another crypto asset, are subject to CGT upon wrapping or unwrapping. This is based on the market value of the wrapped token at the exchange time.

Following the ATO’s clarification, there’s been notable industry response. Chloe White from Genesis Block and Blockchain Australia criticized the ATO’s stance for violating the principle of technological neutrality, potentially impacting the financial future of young Australians.

Adding to the complexities, CoinSpot, a local cryptocurrency exchange, reportedly experienced a security issue leading to a significant financial loss. This incident adds another layer of concern for Australian crypto users in the current regulatory landscape.

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Uniswap’s Front-End Fees Surpass $1 Million

by Blockchain News

Uniswap, a leading decentralized exchange (DEX), has reached a significant milestone. The protocol’s front-end fees have accumulated over $1 million, a feat achieved within just 24 days. This article delves into the details of this achievement, its implications, and the context surrounding Uniswap’s revenue model.

Data from Dune Analytics reveals that Uniswap’s front-end fees have exceeded $1 million​​. This rapid accumulation of fees highlights the growing activity and user engagement on the platform. Notably, this milestone was reached in less than a month, indicating a significant surge in transactions processed by Uniswap.

Following this achievement, projections for Uniswap’s annualized revenue are impressive. On-chain data platform Token Terminal estimates the annualized revenue at approximately $15.2 million​​​​. This figure not only underscores the financial success of Uniswap but also reflects the robust nature of its operational model within the DeFi ecosystem.

In the backdrop of this milestone, Uniswap’s daily fee rate has experienced noteworthy fluctuations. There was a remarkable surge of 69.8% in the last seven days, despite a decline of 43.5% in one day​​. These dynamics suggest a volatile yet strong market performance and user engagement on the platform.

The front-end fees contribute a substantial portion to Uniswap’s total revenue. In the last 24 days, these fees accounted for 17.4% of Uniswap’s total fees​​. This proportion highlights the significance of front-end fees in Uniswap’s overall revenue model.

The introduction of front-end fees by Uniswap in October sparked some controversy​​​​. The decision to implement a 0.15% exchange fee was a notable shift in the platform’s approach to revenue generation. This move, while contributing significantly to Uniswap’s income, also brought about discussions and debates within the DeFi community regarding the implications for users and the broader ecosystem.

Uniswap’s surpassing of $1 million in front-end fees in a short span signifies not only its growing prominence in the DeFi space but also the evolving dynamics of revenue generation in decentralized exchanges. As the platform continues to adapt and innovate, it remains a key player in shaping the landscape of decentralized finance.

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Curve Founder Proposes Venus Protocol Deployment on Ethereum Mainnet

by Blockchain News

Curve Finance founder Michael Egorov has put forth a proposal to deploy the Venus Protocol on the Ethereum Mainnet, signaling a strategic expansion in the decentralized finance (DeFi) sector. This proposition, aimed at tapping into Ethereum’s substantial liquidity, also includes the integration of Curve’s native tokens crvUSD and CRV as collateral options, paired with a mutually beneficial rewards system.

Ethereum, recognized for its significant liquidity and the volume of on-chain transactions, presents a ripe environment for DeFi protocols. Curve, holding a pivotal position with a Total Value Locked (TVL) of $1.8 billion and a widely used stablecoin (crvUSD) with a supply of $130 million, is set to extend its influence by supporting pools with Venus assets on the Ethereum Mainnet.

The proposed deployment is poised to deliver several advantages: Enhanced visibility and brand recognition for Venus on a premier blockchain network. Additional adoption and utility for Curve’s crvUSD as a stablecoin within lending protocols. The establishment of liquidity pools that further integrate the offerings of both Venus and Curve.

Egorov details the potential for creating core and isolated pools on Venus, presenting specific supply and borrow caps to align with risk-managed approaches. A notable feature is the proposed liquidity mining incentive, which could see an injection of 500,000 CRV tokens to stimulate supply-side participation, with the aspiration of achieving a 10% Annual Percentage Rate (APR) over a span of 120 days.

The response within the community forum has been overwhelmingly positive, with leaders and members expressing strong support for the deployment. The enthusiasm underscores the community’s eagerness for cross-chain collaboration, acknowledging Ethereum’s high gas fees but valuing its considerable volume of transactions.

A gauge system within Curve’s DAO is highlighted as a mechanism to distribute rewards, emphasizing decentralized decision-making. Successful implementation hinges on community votes, with historical precedence showing favorable outcomes for such gauges.

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Aptos Unveils Winners of the Singapore World Tour Hackathon

by Blockchain News

Aptos is a well-known network that is known for encouraging innovation, and it has now made the winners of the Singapore leg of its World Tour Hackathon public announcements. On October 27, 2023, the network revealed 14 projects that stood out in different tracks via a series of tweets, emphasizing how the Aptos platform can serve as a fertile environment for generating real-world solutions. This highlighted how the Aptos platform can serve as a fertile foundation for producing real-world solutions.

One of the most notable aspects of the event was the division of the #AptosWorldTour Hack Singapore competition into five distinct tracks, each of which has its own distinct emphasis. The tracks included ‘NFTs, Social, and Gaming,’ ‘DeFi & Payments,’ ‘Infrastructure, Tooling, and Public Goods,’ ‘Move’s Most Innovative,’ ‘Web3 x AI: Hacking the Future of Content Creation,’ and ‘Move’s Most Innovative,’ with the first two being sponsored by Alibaba Cloud and Google Cloud, respectively.

The winner of the ‘NFTs, Social, and Gaming’ track was @IntoTheVerse_, followed by @stickman_apt and @TowneSquarexyz. TowneSquarexyz came in third place. In the ‘DeFi & Payments’ track, @aptospayment was able to come out on top, followed by @AmnisFinance and fxSwap (by @theISCTeam) in second and third place, respectively.

Following dAptoRator (by @NetSepio), Dddappp and Delegate took the second and third places, respectively, in the competition that was centered on the topics of “Infrastructure, Tooling, and Public Goods.” @EconiaLabs emerged victorious in the ‘Move’s Most Innovative’ track, with @ZabavaLabs and @Aptomingos coming in a close second and third, respectively.

Last but not least, in the ‘Web3 x AI: Hacking the Future of Content Creation’ competition, @aptscan_ai came out on top, while @SwapGPT took home the prize for second place.

Aptos expressed its heartfelt congratulations to the victors and praised the efforts of all of the hackers who participated in the competition. Additionally, it conveyed thanks to the event’s sponsors, guest speakers, and community members, all of whom contributed to the successful outcome of the event via their support.

The announcement of the winners highlights the ability of the Aptos network to stimulate creativity and create solutions that are applicable in the real world. The Aptos community is already vibrating with excitement in preparation for the next part of the #AptosWorldTour as the hackathon came to a triumphant conclusion.

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Chainlink Unveils Constellation: A Grand Hackathon Event

by Blockchain News

Chainlink has taken the wraps off its most extensive hackathon event to date, dubbed Constellation, set to commence on November 8 and run through December 10, 2023. This announcement comes on the heels of Chainlink’s evolution since its initial virtual hackathon in 2020, which had garnered over 1,000 registrations and 70+ project submissions from enthusiasts spanning 45 countries. The initiative was a frontier at the time when the Decentralized Finance (DeFi) space was in its nascency, and Non-Fungible Tokens (NFTs) were just beginning to make a mark.

Hackathon’s Progression Over Years

The narrative of Chainlink’s hackathons over the years is one of growth, advancement, and betterment. Each subsequent hackathon has surpassed its predecessors in scale and sophistication, culminating in the upcoming Constellation event. This platform has been meticulously crafted to offer a straightforward success pathway for Web3 engineers of all experience levels, through the Chainlink platform, which serves as a universal conduit to myriad blockchain networks. Over the years, these hackathons have morphed into a launchpad for developers to interact with state-of-the-art infrastructure elements, thereby reshaping the global perception and utilization of Web3.

Prize Distribution and Categories

The Constellation hackathon boasts a prize pool of $350,000, spread across seven core prize tracks. The prize tracks are designed to cover a broad spectrum of blockchain applications.

Grand Prize ($25,000): This top accolade is set aside for the project that exemplifies superior implementation, irrespective of its vertical or theme.

DeFi and Payments ($22,500): A call to arms for developers to forge lightning-fast DeFi applications that could serve as the financial bedrock of the future.

Cross-Chain Solutions ($22,500): Capitalizing on Chainlink’s CCIP, developers have the chance to pioneer secure cross-chain projects.

Web3 Gaming and Dynamic NFTs ($15,000): This track focuses on expanding the horizons of Web3 gaming and NFT collections.

SocialFi Innovation ($15,000): An avenue to explore the amalgamation of Web3 and social platforms.

Web3 and AI ($15,000): This confluence of two tech frontiers offers a playground for connecting AI with smart contracts.

Tech for Good ($15,000): A category for those with a penchant for creating tech-driven solutions for societal betterment.

Additionally, 20 Top-Quality Prizes of $500 each will be awarded to projects that showcase exceptional implementation.

Technical Recommendations and Evaluation Metrics

The evaluation of submissions will be executed via a point system, encapsulating factors like User Experience (UX), technical implementation, practicality, and creativity. The anticipation is for projects that not only embody creativity but are polished, practical, and stretch the boundaries of Web3 tech. Bonus points are on the table for projects incorporating multiple Chainlink services in a meaningful manner.

Constellation is not merely a competition but a comprehensive learning experience. It offers a plethora of educational resources, technical workshops, and real-time support to cater to developers at different stages of their Web3 journey. The gamut of learning tracks spans from beginner to expert levels, each laden with tailored resources to expedite the learning and development process.

Conclusion

At the core, Constellation aims to act as a catalyst in nurturing the new generation of Web3 developers by equipping them with the requisite tools, networking opportunities, support, and incentives. Chainlink provides a fertile ground for developers, featuring access to scalable blockchains, secure cross-chain operability, and seamless API connectivity, thereby setting the stage for breakthrough projects that could potentially redefine the Web3 landscape and elevate the industry to unprecedented heights.

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dYdX Transitions to Public Benefit Corporation

by Blockchain News

In a bid to realign its organizational structure with the broader interests of the web3 community, dYdX Trading Inc. has amended its charter to transition into a Public Benefit Corporation (PBC). This change was publicly announced on 17 October 2023 by Antonio, the founder of dYdX, through a series of tweets. The key objective behind this transition is to foster economic and technological advancements globally, especially by democratizing access to financial opportunities through decentralized and open-source crypto asset exchanges among other technologies.

Antonio divulged that dYdX’s new status as a PBC will not alter its for-profit nature. However, it does enable the board and himself to focus not just on maximizing shareholder value but acting in the public interest. This strategic shift reflects a growing commitment to aligning with the builders, traders, and stakeholders within the web3 community, beyond just the shareholders. dYdX views this transition as an innovative step not only in product and technology but also in legal and organizational structure, marking a historic moment in the decentralized finance (DeFi) sector. This is noted to be the first instance where a major DeFi corporation has morphed into a Public Benefit Corporation.

The amendment to the charter articulates the specific public benefit that dYdX aims to promote. In Antonio’s words, “The specific public benefit to be promoted by this corporation is building and supporting protocols that, and industry members who, promote and facilitate economic or technological advancement of the global community, including but not limited to the democratization of access to financial opportunity through open source and decentralized crypto asset exchanges and other technologies.” The new charter mandates the company to balance the interests of various stakeholders, thus not solely concentrating on shareholder value.

Community responses have been largely supportive, with some urging dYdX to publish the exact wording of their charter as an additional step towards transparency. The notion of returning the fees from the previous version (v3) to adhere to the new charter’s principles was also brought up by a community member. These interactions highlight the community’s keen interest in dYdX’s move towards a more open and aligned operational framework.

The company anticipates the dYdX Chain’s open-source release, underscoring the pivotal role the v4 open source code will play in realizing their mission of democratizing financial access. The change is also seen as a response to the evolving global economic conditions, emphasizing the necessity for transparent, open, and permissionless financial products.

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Fantom Foundation Wallets Compromised in Suspected Chrome Exploit

by Blockchain News

Fantom Foundation announced that several of their wallets were compromised. Reports confirmed that a number of Fantom wallets were affected earlier today, which involved a loss of approximately $550K in Fantom Foundation funds. However, it’s reassuring to note that over 99% of the Fantom Foundation’s funds remain unaffected by this breach and are currently secure.

Initial speculations suggest a zero-day exploit in Google Chrome might be the underlying cause. Although the exact nature and mechanism of the attack are still under investigation, it’s apparent that the vulnerabilities extended beyond just the Foundation’s official wallets. One of the Foundation’s employees had their personal wallets compromised, further solidifying the suspicion of a targeted attack against the organization and its affiliates. This particular breach emphasizes the importance of continuous cybersecurity vigilance and the potential vulnerabilities that might exist in commonly used platforms.

Spreek, a reputed crypto commentator, brought attention to the event through a series of tweets. According to the shared data, the compromised addresses included https://etherscan.io/address/0x1bffb3a232e06e06a5d9e93c8df3321f768197c2 on Ethereum and https://ftmscan.com/address/0x596288a9090c9eedf87bb5f2da5d8e1bbc7bb935 on Fantom.

However, subsequent updates from Spreek indicated that multiple other Foundation wallets were drained both on Ethereum and Fantom. Furthermore, some non-tagged wallets, believed to be personal ones belonging to team members, were also impacted.

The attacker’s knowledge and skill were notably advanced. They managed to unwind complex DeFi configurations, suggesting a deep understanding of the DeFi ecosystem. The total profit accrued by the attacker is estimated at approximately $6.7 million. One of the wallets, believed to belong to a team member, incurred a significant loss of $3.4 million.

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Platypus Recovers 90% of Stolen Funds from Recent Exploit

by Blockchain News

Decentralized finance (DeFi) protocol Platypus has made significant strides in recovering assets stolen in a recent exploit. On 17 October 2023, the protocol announced via its Twitter handle, Platypusdefi, that it had successfully negotiated with the exploiter and recovered 90% of the funds siphoned off from the sAVAX pool during an exploit on 12 October 2023. The recovery reduced the net loss to approximately 18,000 AVAX. The announcement came as a relief to the Platypus community, who had been on tenterhooks since the exploit occurred.

The episode on 12 October 2023 was not the first time Platypus had been targeted. The protocol had suffered two previous flash loan attacks in 2023, losing $8.5 million in February and around $157,000 in July. Platypus had since been on a mission to enhance its security infrastructure to prevent further occurrences. However, the attacks in October, where three consecutive exploits led to a loss of over $2 million, demonstrated the persistent vulnerabilities within the protocol’s system. The hackers managed to extract $1.2 million in the first attack, $575,000 in the second, and $450,000 in the third, all within a span of hours.

Platypus acknowledged the crucial role that the community played in resolving the crisis swiftly. The community’s support facilitated the quick identification and resolution of the hacking incident, enabling a prompt response. The protocol expressed its gratitude towards its community members for their assistance during this trying period.

In light of these attacks, Platypus halted all pools and initiated a thorough investigation to pinpoint the root cause of the recurrent exploits. The protocol is also making arrangements for the withdrawal of all existing liquidity providers and is in the process of sharing detailed withdrawal instructions with its community. Additionally, the DeFi protocol has been working on a compensation plan for users who lost their assets in the previous attacks, demonstrating its commitment to making amends and ensuring such security breaches are averted in the future.

Meanwhile, efforts to bring the culprits to book saw some success earlier in the year when French police arrested two suspects related to the February hack, seizing around $222,000 worth of crypto assets on 25 February 2023. This action was supported by crypto investigator ZachXBT and the Binance exchange, showcasing a collaborative effort in combating crypto-related crimes.

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Uniswap V4 Open-Source Directory Sparks Controversy Over New KYC Hook

by Blockchain News

The unveiling of an open-source directory dedicated to Uniswap v4 hooks has recently incited discord within the cryptocurrency realm. At the heart of the contention is a newly introduced hook, now accessible on this directory. This hook facilitates the execution of Know Your Customer (KYC) checks on users prior to engaging in token pool trading activities, thereby intertwining regulatory compliance with decentralized operations, a notion often deemed incongruent in the decentralized finance (DeFi) domain.

In the technical lexicon, a hook is defined as a tool that empowers developers to modify code without altering the core architecture of the software. This capability is often termed as “hookability.” In the forthcoming Uniswap version 4, this particular hook will equip developers with the means to incorporate KYC verification within the decentralized financial protocol, marking a significant stride towards bridging the gap between regulatory mandates and decentralized operations.

Know Your Customer (KYC) is a standard practice among financial institutions aimed at validating the identity of clients and evaluating the associated business risks. Primarily, KYC endeavors to curb money laundering and thwart the financial conduits to terrorist entities. This practice, while common in traditional finance, is viewed with skepticism within the DeFi sector due to its centralized nature and potential infringement on privacy.

A proactive community developer integrated the KYC hook into the Uniswap v4 directory as an opt-in feature, granting users the autonomy to choose its application. However, the prerequisite to complete the KYC verification is the possession of a non-fungible token (NFT), an innovative digital asset verifying the uniqueness of an item or individual in the digital realm.

The introduction of this hook comes at a time when the decentralized finance (DeFi) sector is under amplified governmental scrutiny globally. Regulatory bodies across various jurisdictions are endeavoring to rein in the freewheeling DeFi sector, which often operates outside the conventional financial regulatory framework.

The forthcoming public release of Uniswap v4, slated for early 2024, will delineate access to pre-sanctioned organizations only, as per governance mandates. Additionally, the updated version will feature hooks for aesthetic customization, reflecting a balance between user personalization and regulatory compliance.

The amalgamation of KYC procedures within a prominent DeFi protocol like Uniswap signifies a notable paradigm shift, potentially setting a precedent for other DeFi platforms to follow suit. This juxtaposition of regulatory compliance with decentralized ethos is poised to foster heated debates within the crypto community, as it navigates the complex terrain of global financial regulations.

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