Welcome to Finance Redefined, a weekly newsletter providing you with essential decentralized finance (DeFi) insights, designed to bring you the most important developments of the past week.
In the past week, everything from the U.S. Commodity Futures Trading Commission (CFTC) investigation into multiple DeFi protocols, to Binance CEO Changpeng Zhao predicting that DeFi will be in the next bull market.
While CZ expects a bright future for DeFi, a report from the Bank for International Settlements (BIS) argues that DeFi in its pure form cannot survive on its own, with few real-world use cases.
The Shibarium ecosystem’s layer 2 network, Shibarium, has continued to grow rapidly following its reboot, with over 1 million wallets created; however, its progress has yet to impact the price of the Shiba Inu (SHIB) token.
Prices of the top 100 DeFi tokens surged late Friday, with most posting positive weekly gains.
Binance CEO CZ Predicts DeFi to Outgrow CeFi in Next Bull Run
Binance CEO Changpeng Zhao predicted that in the next round of bull market, DeFi has the potential to surpass the centralized CeFi.
During an X (formerly Twitter) Spaces livestream called CZ AMA on Sept. 1, Zhao shared his thoughts on the future of DeFi. “I think the more decentralized the industry, the better,” he declared, adding that it might not be long before it takes over CeFi volume.
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CFTC cracks down on DeFi protocols Opyn, ZeroEx and Deridex
The U.S. Commodity Futures Trading Commission (CFTC) is taking regulatory action against three DeFi protocols for allegedly failing to register various derivatives trading products. The U.S. commodities regulator announced in a statement on Sept. 8 that it had issued orders targeting the Opyn, ZeroEx and Deridex protocols.
Deridex and Opyn were charged for failing to register as swap execution agencies or designated contract markets and for failing to register as futures commission merchants. Both agreements also failed to comply with customer terms set forth in the Bank Secrecy Act, the CFTC said.
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‘Pure’ DeFi has little chance of real-world use due to need for oracles: BIS
The authors of the BIS bulletin say that the need for oracles in DeFi is a major barrier to real-world adoption. The problems with oracles are both practical and principled, and the authors of the study see no way around them.
Oracles are third parties that provide real-world data flowing into or out of DeFi protocols. The authors say that oracles are inherently centralized, and their presence means that the protocol is not fully decentralized — if tolerated, trustlessness disappears. For real-world assets, this can be a fatal flaw, the authors write.
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Binance to Compensate Users $1 Million for Cyber Earn Incident
Cryptocurrency exchange Binance has refunded $1 million in Tether (USDT) to users for its handling of the CyberConnect (CYBER) token incident.
As the exchange noted on Sept. 7, listed CYBER tokens saw price divergence a week ago as a liquidity crunch limited the CYBER cross-chain bridge on South Korean cryptocurrency exchange Upbit. This caused arbitrageurs to borrow CYBER from Binance to profit from the difference. In turn, Binance users who have staked CYBER in the Flexible Yield Program are also prohibited from redemption because the staked assets have been borrowed and the loan limit has been reached.
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Shibarium grows rapidly, surpasses 1 million wallets, SHIB has yet to catch up
The total number of wallets on Shibarium, Shiba Inu’s new layer-2 network, has skyrocketed since its relaunch, surpassing the 1 million mark.
The milestone, announced by the official Shibarium team in a blog post on September 3, means at least 900,000 wallets have been created since the Shibarium reboot on August 28, just two weeks before the Shibarium network first went live — although There are some technical issues.
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DeFi Market Overview
Data from Cointelegraph Markets Pro and TradingView shows that the top 100 DeFi market capitalization tokens are seeing a late-stage bullish surge, with most tokens trading in green on weekly charts. The total value locked in DeFi protocols reached $49.73 billion.
Thanks for reading our roundup of the week’s most impactful DeFi developments. Join us next Friday for more stories, insights and education about this dynamically developing field.
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