Hey everyone!
This is a summary of the Happy Hour meeting. Of course, we have not covered more news that led to the fall and facts that indicate that the market will grow. I will tell you more in the following posts
Sup, guys?! How are you doing? First of all, thank you for having me today. I’m Chris and I’m madly obsessed with Defi. There are 2 things that you have to know about me, kidding. I joined Midas a few months ago and my current position is Defi analyst. I’m doing market research, help the community to understand DeFi, developing all kinds of Defi strategies to support the highest APY on the custodial market. We have big and ambitious plans.
I’m really delighted to be here to talk to you about the market, defi and other interesting stuff. Also, we have a channel in Discord about Defi, ask me any questions or share your personal ideas, let’s talk about them. And I’m having a channel on Telegram, publishing new smart ideas in DeFi and some research. Anybody is welcome.
Market
What we had:
1. FUD from China. China banned the mining of bitcoin and forced all miners to change their location and choose other countries in order to start mining again without being afraid of the bans of their countries.
FUD is an acronym for Fear, uncertainty and doubt
2. Tightening by regulators. These are crackdowns on centralized exchanges. In early June, Chinese search engines, including the largest of them — Baidu and Sogou, blocked the showing links to the websites of three cryptocurrency exchanges: Binance, Huobi, and OKEx.
3. Depletion of institutional purchases by public companies. Purchases of Microstrategy and Tesla in a bullish scenario should have started a chain of purchases, but this did not happen.
What we have now:
- Inflation. As you all know, the Fed is still printing and continues to print many billions of dollars. According to the laws of the economy, when the more money becomes the more they are spent, and the cost of goods increases, inflation increases. Also, technology companies that have attracted large funding in 2020 do not have a stable cash flow and therefore the share price may fall. Also, 40% of all companies in the US market do not earn. And as we all know, one of the ways to hedge risks in your portfolio is to buy gold or bitcoin. There is every chance that retail investors will go to buy bitcoins to avoid the risk of large inflation and simply hedge the portfolio
2. A huge influx of money into DeFi from institutions that go for attractive returns:
- S&P Dow Jones Indices launched S&P Cryptocurrency Broad Digital Market Index (BDM). The BDM will provide a wide performance snapshot of the cryptocurrency market and includes more than 240 coins at launch.
- A lot of investments in crypto startups: Nansen raised $22, Zerion raised $8.2 million, and others
- According to the latest report from The United States Securities and Exchange Commission Rothschild Investment bought more than 100 thousand shares of GBTC
3. We are all waiting for the appearance of a working Polkadot ecosystem and the publication of ETH 2.0
4. Twitter. According to CEO Jack Dorsey, Bitcoin will be integrated into existing Twitter products and services — for example, a paid subscription, it will have the ability to support content authors.
5. Bank of America has opened bitcoin futures trading.
6. At The B word Conference Musk said that SpaceX is holding a bunch of BTC
DeFi
What is DeFi?
DeFi (or “decentralized finance”) is an umbrella term for financial services on public blockchains, primarily Ethereum. With DeFi, you can do most of the things that banks support — earn interest, borrow, lend, buy insurance, trade derivatives, trade assets, and more — but it’s faster and doesn’t require a third party. It’s open, transparent, flexible, fast, without dealing with other people.
News:
1 – Grayscale Investments and coindesk indexes launched decentralized finance (DeFi) Fund and Index. That’s great news, there would be a possibility that the money raised from investors in grayscale can be used buying the shares of their own DeFi index, which can potentially give a boost to the market, idk. and also, Goldman Sachs plans to launch an ETF fund focused on DeFi. It’s a good signal
2 – TVL is still at a high level. Total value locked (TVL) has become the most common metric used to measure the growth of the decentralized finance (DeFi) industry. Тotal value locked represents the number of assets that are currently being staked in a specific protocol. Before the fall, the TVL market was $150 billion, at the moment, now the entire TVL of all protocols is $110 billion. So we don’t see a big drop. And as the graph shows from the defilama project, TVL is growing. And as the Duneanalytic project shows, the number of DeFi users, these are users who use DeFi protocols, has increased since the fall in cryptocurrency prices from 2.5 million to 3 million, that’s insane.
3 – There is local news about DEFI:
- DPI (DeFi Pulse Index) is gonna be added as collateral to the AAVE V2 market. That’s big news. I’ve written a post on my telegram channel where I wrote about the big opportunity to use it
- The launch of Uniswap 3v. Uniswap v3 (paper) allows liquidity providers to provide custom amounts of liquidity in selected price ranges. This unlocks tremendous capital efficiency gains for liquidity providers who can manually adjust their exposure.
4 – There are a lot of layer 2 solutions where there are great prospects for using your capital. It allows establishing an additional protocol that is built on top of blockchains like those of Ethereum and Bitcoin to speed up the transaction speed and reduce the cost of gas.
Layer 1 solutions:
Layer 2 solutions or rollups:
- It’s Zero-knowledge rollups: Loopring, Starkware, zkTube
- Optimistic rollups: Optimism, Fuel network
- Bitcoin Lightning Network
- Matic
What are the trends of DeFi?
- Cross-chain technology hopes to solve scalability issues. Layer 2 solutions. New protocols will have been created and allow to speed up transactions and reduce the cost of gas. It is better to look closely at them, disassemble the project and invest if possible
- Ethereum can be the next big thing. With the advent of the second version of ETH, and sharding is expected to be introduced, so the cost of gas may decrease and the speed of transactions will increase, which will affect the acceleration of the adoption of DeFi projects
Concluding my speech, I would summarize it:
– nothing bad and dramatic has happened to the market, just FUD from China
– we have a great future ahead of us: hedging inflation and portfolio through bitcoin
– institutions are purchasing bitcoins
– projects attract a lot of money for development
– many companies want to use bitcoin as payment for services
– DEFI is developing very quickly: new protocols are being created, TVL is growing, new layer 2 solutions are appearing
Chris Meyo-Renn,
DeFi analyst at Midas.Investments
