Stablecoin Rush Breaks Out; JPMorgan, DBS and Temasek Launch Partior

Stablecoin Rush Breaks Out; JPMorgan, DBS and Temasek Launch Partior

As the Coinbase public listing approached, many analysts were looking for a $100 billion valuation. The cryptocurrency exchange, founded by Brian Armstrong and Fred Ehrsam, hit that mark briefly after listing, but COIN has settled down to a less-rarified valuation.

Meanwhile, CoinGecko calculates a total market capitalization of $128 billion for decentralized finance (DeFi), the corner of the cryptocurrency industry that represents a wide range of lending, trading and betting activities carried out almost entirely on blockchain networks using tokens as proceeds and collateral. The top five tokens on CoinGecko’s list are UNI, LINK, LUNA, AAVE and CAKE.

The following chart is from a CoinGecko page that tracks the combined market cap of all DeFi tokens:

Related: Stablecoin Rush Breaks Out; JPMorgan, DBS and Temasek Launch Partior

Coinbase, it should be noted, listed DeFi as a potential competitor when it filed for a public listing, but for whatever reason, market caps aren’t how we usually talk about the DeFi market. We usually talk about the value of assets people have deposited in DeFi apps to earn yield.

But that measure gives a similar reading: There is now more than $100 billion worth of assets locked up in DeFi.

These get to be very large numbers, numbers that are worth reviewing to illuminate a story that somehow continues to be missed even as cryptocurrency has started going mainstream.

Here at CoinDesk we have focused on DeFi on Ethereum because DeFi originated on Ethereum, and it is where the best-known entrepreneurs have committed to operating.

Related: Paxos Joins Crypto Unicorn Club After Latest $300M Funding Raise

Those aforementioned deposited assets are referred to as total value locked (TVL). TVL on Ethereum, using the most widely cited data site, DeFi Pulse, is $66 billion as of this writing, more than quadrupling since Jan. 1 when it was $15 billion.

Meanwhile, DeFi has taken off in a big way on Binance Smart Chain (BSC). According to Defistation, the current TVL on there is $38 billion, led by PancakeSwap but also including money markets filling a similar role to Aave and derivative solutions that fill a similar role to dydx.

Story continues

DeFi on BSC has grown much faster than on Ethereum; it first hit $1 billion in TVL only at the end of January.

DeFi vs. ICOs

Here’s a chart that compares funds entrusted to Ethereum’s many DeFi smart contracts in the last year or so to funds that went to founders in initial coin offerings during the 2017-2018 boom (an updated version of one published here):

It should be noted that DeFi Pulse was in the midst of updating how it tracks the TVL for the robo-adviser for yield, Yearn Finance, when this was made, and so those numbers aren’t in this graph. According to Yearn itself, though, it has had several billion dollars tied up.

Read more: DeFi reshapes the CoinDesk 20

While the 2020 surge was known as “DeFi Summer,” it’s already evident the market is much bigger now.

For example, TVL first broke $1 billion in February 2020. It broke $10 billion in September, on Ethereum. Earlier this month, the money market platform Compound broke $10 billion in TVL all on its own.

Tuesday night, the original DeFi protocol, stablecoin minter MakerDAO, also broke $10 billion for the first time.

1 million users? Maybe 2 million?

Richard Chen, at the venture firm 1confirmation, has been assembling on-chain data about users using Dune Analytics. One chart is worth citing here in particular.

This shows there are at least 2 million wallets that have interacted with DeFi protocols. So that probably means something like more than a million individuals, maybe even close to two? It’s very hard to say, but it is also worth noting that sometimes individuals participate in DeFi via third parties. So while some users hold many wallets, it’s also true that some wallets represent many users.

Whatever the real count of users, the amount of money changing hands shows these applications are real businesses. The site Crypto Fees has been tracking usage fees charged on different DeFi applications. The top DeFi applications it lists (Uniswap, SushiSwap and Compound) show a seven-day average of daily fees collected ranging from $1 million to $4 million.

If there’s one kind of finance that everyone understands, it is lending. The blockchain software company ConsenSys just released a first-quarter report on DeFi on Ethereum, showing a growing market for loans:

DeFi represents a much more credible narrative with more substantive businesses because it shows products with genuine returns and provides a way for people to earn impressive yields on deposits rather than making wild bets and hoping.

Wild bets are the best way to describe much (though certainly not all) of the investing that took place in the initial coin offering boom of 2017 to 2018. That boom drove the prior bull run, and the public appeared capable of making that connection.

Four years later, the cryptocurrency industry is in a bull run again, but the public appears incapable of connecting it to these billion-dollar deposits into this new iteration on finance. For whatever reason, the main topics are, again, bitcoin’s price and, somehow, non-fungible tokens and dogecoin.

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Tether Releases Consolidated Reserves Report, Backing $50B in Assets

National Review

Three Kims have ruled North Korea since 1948. Two Assads have ruled Syria since 1970. Two Castros have ruled Cuba since 1959. But now, Raúl Castro, at 89, is retiring. How long will the Communist government outlast the Castros? That is a question that is consuming the Cuban people and their well-wishers. Few thought that North Korea would be subjected to a third Kim — a grandson of the founding dictator, Kim Il-sung. Allow me to quote a couple of sentences from a book published in 2015: Whether Jong-un will be the last dictator from his family, no one can know. It seems unlikely the dynasty can continue. Then again, it seemed unlikely that it could endure, strangling North Korea, for as long as it has. I have quoted from my Children of Monsters: An Inquiry into the Sons and Daughters of Dictators. Could there be a fourth Kim — a fourth dictator from the same family? I would not bet on it, but I would not rule it out either. When people are determined to hang on to power, and can organize the violence to do so, they do. As you remember, the heir of Hafez Assad was supposed to be his eldest son, Bassel. But Bassel was killed in a car accident, in 1994, at age 31. So, succession fell to Bashar, an eye doctor, who did not seem to have the dictatorial mettle. But he has done plenty of killing to keep the family business going — more than Hafez probably dreamed of. Will there be a third Assad on the throne? There is chatter about his elder son, Hafez — Hafez II, born in 2001. There has been chatter about this young man’s future leadership since he was about eight. Some thought that Raúl Castro’s son, Alejandro, might take over when Raúl stepped down. Alejandro is a heavy in the interior ministry. But it seems that the reins, for now, will fall to a non-family member, Miguel Díaz-Canel. I am sobered by the Soviet Union and Communist China. The Soviet Union lasted a lot longer than Lenin and the Old Bolsheviks. Communist China has lasted a lot longer than Mao and the other revolutionaries. Indeed, the current No. 1, Xi Jinping, is presiding over the most oppressive period since the Cultural Revolution (1966–76). In the speech announcing his retirement, Raúl Castro said, “I believe fervently in the strength and exemplary nature and comprehension of my compatriots.” Obviously, he and his fellow Communists do not believe in them enough to allow a free press and free elections. They don’t believe in them enough to allow them a say in their own government. An evil regime, too long in the saddle — like a lot of other regimes, blighting the globe. • In his speech to Congress on Wednesday night, President Biden said, “The autocrats will not win the future.” Is that so? I hope so. Not sure. • Last week, Donald Trump gave an interview to Sean Hannity. “I got along great with President Putin,” said Trump. “I liked him, he liked me.” Of Kim Jong-un, he said, “He writes me letters. I like him, he likes me. There’s nothing wrong with that.” I think there is something wrong with that. Kim Jong-un is a murderous dictator, and so is Vladimir Putin, though on a (much) lesser scale. Both of them are anti-American. They represent everything that America has traditionally stood against. They represent everything that America has long existed to oppose. Does it matter, what Trump says? What he thinks and says? He’s out of office, right? I think it does matter — because he is the leader and hero of the Republican Party, which is half the country; he is the leader and hero of the conservative movement. (If you doubt this, take a look at CPAC. CPAC is the annual gathering of the conservative movement. You have a zillion groups and organizations under one roof. Trump is, far and away, their No. 1, their leading light.) Last fall, I wrote a piece called “Trump and Dictators: A review.” This question — democracy versus dictatorship; freedom versus unfreedom; what the United States will stand for in the world — is important to a lot of us. Not all, but a lot. I often have occasion to quote a Lyle Lovett lyric: “It may be no big deal to you, but it’s a very big deal to me.” • On the subject of Trump’s influence, did you see this story? “Staten Island man gets COVID-19 vaccine because Donald Trump said so.” That’s good. I thought of Jack Nicklaus — Jack and me. Long ago, I was big into golf. (Sort of still am.) I was just about the last to switch to a metal driver. I thought they were an abomination. So did Jack Nicklaus, my main man. But, in the end, he switched. And then I did too. If it was okay by Jack . . . • Lately, I have been thinking of hunger strikes, a very grim subject — a complicated one, too, morally. Over the years, I have interviewed many who have gone on hunger strike (and lived, of course) (some don’t). They all say essentially the same thing: My back was to the wall. I was out of options, out of hope. There was no other way. I could do no other. In 2010, I explored this subject, briefly, in a piece called “Death by Hunger Strike.” An incredibly brave Cuban political prisoner, Orlando Zapata Tamayo, had just died, in a hunger strike. So, why am I thinking about it now? Luis Manuel Otero, a Cuban artist, is on hunger strike, as reported by this bulletin, an “urgent appeal.” I say, spare a thought for him. • In Russia, Alexei Navalny is off hunger strike. He is that country’s opposition leader — and the life expectancy for such leaders is not long, regardless. Navalny is a political prisoner, at Penal Colony No. 2, in Pokrov, about 60 miles from Moscow. The Russian state is busy shutting down Navalny’s network of organizations, including his Anti-Corruption Foundation. The director of that foundation, Ivan Zhdanov, commented, “They are screaming out with this move: We are afraid of your activities, we are afraid of your rallies, we are afraid of smart voting.” Yes. To a journalist friend, Navalny wrote, “Everything will be all right. And, even if it isn’t, we’ll have the consolation of having lived honest lives.” I think of Solzhenitsyn’s famous admonition: “Live not by lies.” • John Kerry, the former secretary of state and senator, is now the U.S. special presidential envoy for climate. Sergey Lavrov is the Russian foreign minister. Let me quote a comment that Garry Kasparov, the former chess champion, now a human-rights champion, just made: I used to joke that if you left Kerry and Lavrov together in a room long enough, Kerry would give Alaska back to Russia. Now he’s eager to legitimize Putin & Xi Jinping for a handful of magic climate beans so he can boast of more brilliant dealmaking. The phrase “magic climate beans” is one I think should enter general currency. • There have been a lot of changes in my neighborhood — all for the worse. Many shops and restaurants have closed. One was a French bakery and café. Earlier this week, I noticed that this establishment has been replaced — by a “cannabis dispensary.” Just what the neighborhood does not need (trust me). I don’t want to freight this development with too much meaning, too much symbolism. But I’m afraid I do regard it as symbolic. I fear “a nation of zombies,” as Mark Helprin once put it. Or are we there already? When I expressed these thoughts on Twitter, a man replied, saying, “We’ve been living in a nation of angry drunks. I’m willing to give the zombies a try.” Ha, yeah, I had thought of that too. • So much more to say, but I need to let you get on with your weekend and whatnot. Let’s have some language — language mixed with politics. Joe Biden, like all Democrats — and maybe some Republicans as well — learned something from Bill Clinton: WJC referred to federal spending as “investment.” Biden did the same thing, in his speech on Wednesday. Clinton’s trick has stuck. • A little music? Christa Ludwig, the great mezzo-soprano, has died. I did a post, here. Let me quote the opening paragraph, please: As a political journalist, I have interviewed presidents and prime ministers, kings and queens. I have interviewed many other people, from various walks of life. I have been starstruck . . . maybe three or four times. It definitely happened when I met and interviewed Christa Ludwig. Do you know that Russian athletes are not allowed to use their national anthem in the upcoming Olympics Games? It is one of the penalties for doping. Russian officials proposed some replacement music, which has been approved. I have a brief post on the subject, here. I bet you know Scott Immergut, the Ricochet maestro. One of his activities is to create drone videos, where he lives, in stunning California. Here is a sunset video, with music by Richard Strauss: “Im Abendrot” (“At Sunset”) from the Four Last Songs. Bless you all. Talk to you soon. Later. If you’d like to receive Impromptus by e-mail — links to new columns — write to jnordlinger@nationalreview.com.