Welcome to Finance Redefined, your weekly dose of key information on decentralized finance (DeFi), a newsletter put together to bring you some of the biggest happenings from the past week.
This past week, the DeFi ecosystem saw the relaunch of Axie Infinity’s Ronin bridge with a fully backed 1:1 Ether (ETH) nearly three months after the infamous $600 million hacks.
MakerDAO plans to invest $500 million in US bonds and treasuries to weather the current bear market. Polkadot announced that he would transform his governance model to move toward full decentralization. Although decentralized autonomous organizations (DAOs) are considered the future of governance, a recent study shows that less than 1% of all holders hold 90% of the voting power in DAOs.
The top 100 DeFi tokens plunged back into a sea of red after showing some resistance last week. Most of the top 100 tokens posted double-digit losses over the past week.
Ronin Bridge to Axie Reopens After $600M Hack
Sky Mavis, developers of popular non-fungible token (P2E) game Axie Infinity announced the relaunch of the Ronin Bridge on June 28, three months after it was hacked for over $600 million.
On March 29, 173,600 ETH and 25.5 million USD Coin (USDC) were drained from the bridge after hackers gained access to validators’ private keys. The hack was worth more than $620 million at the time.
According to Tuesday’s announcement from the Sky Mavis team, the Ronin Bridge is back online after three audits (one internal and two external), a redesign, and full compensation of stolen user assets.
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MakerDAO Seeks To Invest $500M In “Minimum Risk” Bonds And Treasuries
MakerDAO is currently voting on a proposal intended to help it weather the bear market and use unused reserves by investing 500 million Dai (DAI) stablecoins in a mix of US bonds and treasuries.
Following an opinion poll on a government signal request, DAO members must now decide whether the dormant IAD should be invested entirely in short-term treasuries or split 80% into treasuries and 20 % in corporate bonds.
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Polkadot founder announces steps toward full decentralization with a new governance model
The founder of Polkadot and Kusama, Gavin Wood announced that the governance model of the blockchain would undergo a new transformation. Dubbed Gov2, anyone will be able to initiate a referendum at any time and as many times as they wish in the new setup, similar to initiating new transactions on the blockchain.
Thereafter, pending referendums need a 50% stakeholder vote within 28 days to pass or face rejection by default. Participants can also intervene and launch nullification proposals in time, which require similar voting procedures in case technical flaws are discovered in the referendums themselves.
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Report: Less Than 1% of Holders Have 90% of the Voting Power in DAOs
A recent Chainalysis report analyzed the performance of ten large DAO projects and found that on average less than 1% of all holders hold 90% of the voting power. The finding highlights a high concentration of decision-making power in the hands of a select few, a problem DAOs were created to solve.
This concentration of decision-making power became evident with the Solana-based loan DAO Solend. Solend’s team tried to take over a whale’s account and run the settlement themselves via over-the-counter (OTC) platforms to avoid cascading liquidations on the decentralized exchange’s (DEX) books.
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DeFi Market Landscape
Analytical data reveals that the total value of locked DeFi posted a small decline from last week, falling to a value of $54 billion. Data from Cointelegraph Markets Pro and TradingView shows that the top 100 DeFi tokens by market cap showed high price volatility with most of them trading in the red over the past week.
Compound (COMP) was the only DeFi token in the top 100 to post a weekly green with a 2% gain over the past week. The rest of the other top 100 DeFi tokens showed overall bearish double-digit momentum.
Thanks for reading our roundup of this week’s most impactful DeFi happenings. Join us next Friday for more stories, perspectives, and education in this dynamically moving space.
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