This Week in DeFi – August 27

To the DeFi community,

This week, Aave announced plans for more robust cross-chain governance as the Ethereum community supporting the initial Aave framework branch out to other chains and L2 solutions. The announcement was also paired with news that Aave will open source the Aave UI, allowing anyone around the world to contribute to, utilize, and spin off from the existing interface.

Aave released cross-chain governance module that enables multi-chain protocol governance.🔥

also feat. open sourcing the Aave user interface to decentralize the development of the user experience 👻 https://t.co/PT9t327Uui

— stani.jpg (👻,🐻‍❄️) (@StaniKulechov) August 26, 2021

Sushiswap joined the Avalanche Rush project, with the two protocols pledging $7.5 millon each for liquidity mining incentives for AVAX and SUSHI pairs over a three month period, with the exact starting date to be announced soon. Sushiswap has now been deployed on 20 blockchains, making it easily one of the most prolific DeFi partners in the industry. 

Just in time for @SushiSwap‘s 1st birthday.

It’s incredible to see a community-centric project find success. It just goes to show how decentralized tech can maximize collaboration.

$15M is now committed to #AvalancheRush thanks to Sushi and #Avalanche! https://t.co/1QoG37pHKC

— Emin Gün Sirer🔺 (@el33th4xor) August 24, 2021

Pyth Network launched its mainnet beta, bringing oracle pricing data for more than 30 assets including cryptocurrencies, traditional equities, commodities, and fiat currencies to the Solana blockchain. Pyth has partnered with dozens of institutional data providers to deliver accurate pricing data, with updates every 400ms and many more assets to come.

Since our introduction to the world, now more than 4 months ago now, we are ecstatic to finally release this new oracle solution to the @solana mainnet and enable any builders to leverage HiFi price feeds to build the future of finance!🎉🥳https://t.co/gQjbWwWSUb

— Pyth (@PythNetwork) August 26, 2021

And Ribbon Finance announced the Ribbon V2 launch, bringing greater decentralization to and governance controls to options-strategy vaults. The transition to V2 will be gradual as many features are highly experimental, with initial V2 vaults rolling out with conservative caps on investment and a limited access testing period.

Today we are super excited to announce Ribbon V2 🎀

Ribbon V2 is a huge improvement to the current vaults, and introduces a bunch of new exciting features 👇 https://t.co/rU2IDMuXxZ

— Ribbon Finance (@ribbonfinance) August 23, 2021

After years of waiting in the wings, crypto is now fully in the spotlight of US legislators and regulators as DeFi and crypto capital markets continue to rapidly expand. It’s also forcing ‘decentralized’ finance protocols to take their governance and accessibility more seriously, after regulator callouts noting that in some aspects, including front-end UI access and token distribution structures, many projects are still highly centralized. 

There are a variety of approaches to avoiding the wrath of regulators and DeFi protocols continue to raise funds and scale, from changing jurisdictions to open sourcing large swathes of previously proprietary code to reduce central points of failure. But in the long run, new regulations are bound to emerge, and even fully decentralized protocols will likely need to interact with regulatory structures in some way.

The situation can seem intimidating, but the potential for abuse through money laundering, financing bad actors, and manipulation by malicious market participants is too great to ignore. Plus, institutions will never get involved in a meaningful capacity without regulatory blessings.

The process will take years or decades, and the successful blue-chip protocols of today are the most likely to succeed at becoming truly integral parts of the global economy. And, there will always be crypto innovation on the bleeding edge of technology and creativity where the adventurous can play, learn, and gamble. Just don’t invest more than you can afford to lose 😉

Thanks to our partner:

Total Value Locked: $82.09B (down -1.31% since last week)

DeFi Market Cap: $126.27B (down -0.02%)

DEX Weekly Volume: $15.5B (down -9.09%)

DAI Supply: 5.84B (up 1.21%)

Total DeFi Users: 3,267,260 (up 1.24%)

[Fabian Klauder – DeFi Times] – Why Is ETH A Scarce Asset?

[Ben Giove – Bankless] – The Liquidity Singularity

[Anthony Sassano – The Daily Gwei] – An EIP-1559 Update – The Daily Gwei #321

[Helena Flack – Centrifuge Blog] – Going, going…. Gone! Why parachains auction slots are crucial for the future of blockchain development

[Dennis Suslov – Dose of DeFi] – Can USD-independent stable assets survive – and thrive?

Alex is a Content Writer at Circle, with previous experience at tech startups, Fortune 500 corporations, and as a freelance writer and analyst. Interests include cutting-edge technologies in blockchain, energy, supply chains, transportation, urban living, and more and he has been in the crypto community since 2014.