Hola de Miami
All MEV solutions are off-chain, plus Uniswap v3's quick success
Hello from Florida! Just arrived and will be attending the Bitcoin (only) conference on Friday & Saturday, but I’m on the prowl for DeFi degens. If you’re in Miami, get in touch - it’d be great to connect.
Tweet of the Week: MEV is solved off-chain
As MEV extraction grows, attention has shifted to new methods of submitting trades to the blockchain that do not broadcast them to the public mempool, where they can be frontrun. Flashbots are the most well-known, but Dragonfly Capital’s Haseeb Qureshi contemplates the difference between three different projects that use off-chain messaging to match buyers and sellers. Cowswap, 0x and KeeperDAO all have solutions to prevent gas-bidding wars to trade against large on-chain trades before they are confirmed. Cowswap relies on Gnosis Protocol v2’s network of solvers that match orders in five minute batches and then submits the solution on chain. 0x Founder Will Warren explains the difference between 0x and KeeperDAO, “KeeperDAO's hiding game is a trade execution coordinator (TEC)….0x protocol explicitly leaves trade execution up to the developer. This allows for distinct pools of off-chain 0x orders, each with custom rules around trade execution.”
Related: Cowswap’s Felix Leupold was on the Uncommon Core Podcast and 0x announces Matcha v2 with built in MEV protection.
Chart of the Week: Stablecoin resiliency
The latest edition of Coin Metric’s State of the Network looks at how stablecoins fared in the latest market crash (or, maybe we can call it a correction now?). ETH and BTC’s decline was the sharpest since Black Thursday in March 2020, but this time DeFi protocols performed without major problems. Dai was able to maintain liquidity, no doubt due to the Peg Stability Module, which allows liquidity providers to always trade 1:1 USDC to Dai, helped. This raises centralization concerns as around 45% of Dai is now backed by USDC, but its current positioning is more desirable compared to where Maker was after Black Thursday. Presumably, Maker governance will unwind its exposure to USDC over the coming months, which is probably easier than having to re-instill investor confidence in the peg as with Black Thursday. UST and Terra/Luna (not covered by Coin Metrics) deviated the most from its peg during the market volatility but seems to have recovered.
Odds and Ends
WSJ: DeFi is helping to fuel the crypto market boom Link
Arbitrum launches mainnet beta, opens to developers Link
GameStop unveils plans for NFT platform on Ethereum Link
Token Terminal launches v2 with additional on-chain revenue data Link
Total stablecoin supply passes $100bn Link
Flipside’s Uniswap v3 Fee Calculator makes it easier to provide liquidity Link
ARCx announces raise, unveils DeFi passport for on-chain credit score Link
Yearn competitor Convex reaches $1bn in TVL Link
Thoughts and Prognostications
Technical Scalability Creates Social Scalability [Kyle Samani/Multicoin]
Isomorphism in DAO Governance [Mario Laul/placeholder]
Booby Trapping the Ethereum Blockchain [samczsun/Paradigm]
Stability, Money and Why Maxis are Wrong [Sam Kazemian/Frax]
Overview of Yearn Competitor Convex, which reached $1bn in TVL [David.eth]
Here’s how China’s crypto FUD will play out [Shuyao/da bing]
That’s it! Feedback appreciated. Just hit reply. Written in Florida, where it smells like summer. Excited to interact with people again. Hit me up if you’re at the conference or have a super secret party to invite me too. Casual beers are pretty cool too.
Dose of DeFi is written by Chris Powers. Opinions expressed are my own. I spend most of my time contributing to DXdao. All content is for informational purposes and is not intended as investment advice.