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$1B Leveraged in DeFi as ETH/BTC Moves Sharply Upwards

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Ethereum Price: $220.35
Ethereum Price (BTC): 0.022427BTC
ETH Locked in DeFi: 3.12M (2.85% of circulating supply)
Market Cap: $24.16B
ETH Network Dominance*: 68.69%
7 Day Candle**: $189.45 / $231.23 / $183.94 / $220.35

Last week a rallying cryptocurrency market pushed the total value leveraged in decentralized finance (DeFi) over the $1 billion mark. The milestone, which was reached in 2 short years, goes a long way to validate Ethereum’s role as the foundation for decentralized financial applications.

In the process, ETH rose 10.72% against BTC over the last 7 days, reaching a peak of 0.023150 and returning to a level not seen since July 2019.

ETH Price (BTC)

While major DeFi players like MakerDAO and Compound.finance continue to grow, new projects are sprouting up at an increasing clip. In recent weeks we’ve seen the launch of:

  • ZeroCollateral – borrow from the system with as little as… zero collateral.
  • GelatoFinance – “if this then that” service for trading tokens.
  • AaveProtocol – lending and borrowing protocol.
  • iearn.finance – market aggregator that rebalances for the highest yield.
  • CurveFinance – stablecoin swaps (DAI and USDC). Liquidity providers have so far averaged ~12% APR.

Note, some of these platforms are in alpha or beta – treat with caution!

The DeFi space is now growing so quickly that keeping up with new projects requires a full-time job. The list above scratches the surface of the ideas that are being formulated and deployed on Ethereum; the decentralized stablecoin Dai, for example, now has over 20 derivatives on mainnet and a dozen others in development.

One project that caught some attention this week came from Ameen Soleimani, who noted the need for an Ethereum-based stablecoin that provided a greater degree of decentralization than Dai.

The stablecoin, currently dubbed “MetaCoin”, would provide a two-coin system similar to Maker (DAI – medium of exchange; MKR – governance), however it would instead opt for a “minimum viable governance” (MVG) model.

While in Maker voting power can – in theory – be used to attack the system and steal funds, MetaCoin would only allow votes to decide on a couple of low-risk parameters, with everything else being determined programatically.

We can expect MetaCoin to be fleshed out in greater deal during the ETH Denver hackathon later this week.

ETH 2.0 Deposit Contract Expected July 2020

In a Reddit “ask me anything” last week, developers from the ETH 2.0 research team responded to questions from the community on a number of topics including – of course – the launch date.

After a series of setbacks that pushed ETH 2.0’s Phase 0 launch beyond Q4 2019 and then beyond Q1 2020, researcher Justin Drake said that he is 95% confident the deposit contract will “go live by July 30, 2020 (the 5th anniversary of Ethereum 1.0)”. Ethereum Foundation member, Danny Ryan, followed up with his thoughts that he doesn’t “see a reality in which Phase 0 does not launch in 2020”.

The deposit contract is a core feature of ETH 2.0 and enables staking in the system—the first step towards moving Ethereum from Proof of Work consensus to Proof of Stake. It is also a major boon for investors, who will be able to earn interest on idle ETH.

The biggest delay at this point, seems to be in reaching the minimum number of working clients available at launch. Currently, the aim is to have 3 working clients in place to ensure a good distribution of validators – a core tenet of the Ethereum community’s desire to have the base layer be maximally decentralized.

With both Ethereum’s deposit contract and Bitcoin’s halving due within months of each other, we can expect a huge amount of price volatility in the build up.

– Nick, Owner EthereumPrice.org

* calculated as: (ETH Market Cap / Ethereum Network Market Cap)
** open / high / low / close

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Nick Cannon
Nick Cannon Founder