DeFi denizens apathetic to new DAOs

DeFi denizens apathetic to new DAOs

The slew of blockchains released over the past year has left most DeFi denizens apathetic to new launches. There was Aptos, Sei, and Sui, not to mention about half a dozen new Ethereum layer 2s.

Celestia, another potential contender for the helm, just announced it's about to join the fray.

Even if you don't pay attention to Celestia, you could still be eligible for an airdrop on its TIA token if you've been active on one of Ethereum's many layer 2 networks.

Token airdrops have proven themselves as a great way to bootstrap users and liquidity - look no further than the top layer 2 Arbitrum. Celestia probably has a better shot than most because its focus is on something special: Modularity.

In contrast to a single blockchain, Celestia uses interconnected modules that are each responsible for specific functions.

Celestia notes that this specialization brings significant advancements in scalability, flexibility, and interoperability. The arrest of Su Zhu, the co-founder of Three Arrows Capital, last week offers a few lessons.

Among them: going on a soul-searching trip to Bali and then spinning up another crypto business isn't enough to shirk responsibility for the collapse of your $3 billion trading firm.

Zhu's arrest in Singapore influenced his latest venture, OPNX, a crypto exchange that also allows users to buy and sell bankruptcy claims for FTX, Voyager, and Three Arrows Capital. The token, OX, crashed more than 44% on the news and has little sign of recovery.

On the bright side, those who lost money lending to Three Arrows Capital may have a better chance at getting some of it back now that Zhu is being forced to cooperate with liquidators.

Singapore authorities also have an arrest warrant for Kyle Davies, the co-founder of Three Arrows. He was last seen in Dubai, where he was planning to open a restaurant focusing on chicken-based cuisine.

Lastly, he wrote a similar story on DAO rage quitting, this time at Jade Protocol.

Rage quitting is becoming more common among DeFi protocols.

There are dozen of DAOs that raised funds, often by selling tokens, trying to make something work, but failed. tokenholders are now voting to dissolve what's left to recoup some of their losses.

I expect the DAO rage to continue. There are still many other DAOs in similar positions, and with an increase in competition for a decreasing pool of blockchain-based liquidity, it's going to be harder for many projects to justify burning investors' cash.

If tokenholders have the motivation to keep team members accountable, they can be a positive influence on the team.

As of 2023, blockchain projects have airdropped users a whopping $2.2 billion worth of tokens.

In order not only to acquire users and cut out middlemen, airdrops have also become a way to decentralise ownership.

A heatmap of over 2.1 billion native Ether transfers has been created by Yearn Finance developer Banteg.

Over the past seven years of Ethereum activity, transfer patterns have been hidden within the noise, which visualise liquidation cascades and likely Sybil attacks.

For me, the purple hue of Banteg's chart makes it all the more mesmerizing, and demonstrates how, with the right approach, data doesn't have to be soulless and dry - it can be beautiful, too.

The legal process at FTX began this week when the federal court gave the defunct cryptocurrency exchange the go-ahead to liquidate its crypto holdings.

But former customers are still worried that FTX's new management may try to clawback funds from those who exited the exchange in the 90 days before its collapse.

The precedent set in the liquidation of crypto lender BlockFi could protect those who withdrew less than $250,000 or are based outside the US.

Tim Craig, a DL News correspondent in Edinburgh, Scotland, co-runs the DeFi Correspondent. Tim has over $1,000 worth of Ether, Swell staked Ether, Redacted Cartel, and GMX. He also holds an insignificant share of NFTs.