Wallfacer Weekly (#8)

Welcome back to our weekly recap!

MakerDAO allocates additional $200M to sUSDe

📰 Story: We’ve covered @MakerDAO’s aggressive moves in recent weeks, culminating in their decision to allocate 100M $DAI to Ethena’s $sUSDe. This stirred controversy in #DeFi, with many citing risk concerns connected to the rapid adoption of sUSDe. This week, MakerDAO upped this exposure by an additional $200M via @sparkdotfi, earning an APY of ~44% (7d yield average).
300M $DAI deployed in a Morpho vault with sUSDe exposure, as seen on @vaultsfyi.

💡 Our Take: While it is no surprise that MakerDAO upped their exposure to sUSDe, considering it was outlined in their initial proposals, the speed of adoption is worth noting. $USDe is now the fastest-growing dollar-based asset in the history of crypto, as noted by @leptokurtic_, founder of @ethena_labs, in this post: https://t.co/jdK7TXuw7Z. It's particularly striking that even as the supply of staked USDe (sUSDe) decreases while total USDe supply surges, yields remain high, underscoring Ethena's sophisticated tokenomics.

Governance controversy unfolds at SushiSwap

📰 Story: @SushiSwap has launched a controversial proposal that significantly changes its organizational structure. Under the proposal, "$Sushi Labs" will independently take over operations from the $Sushi DAO and control over $50 million in assets, relegating the DAO's role to managing the treasury. This proposal comes amid allegations from @jaredgrey, CEO of SushiSwap, who claims a hostile governance attack by whale @Titanium_32, accusing him of manipulating governance to benefit low-value pools, thus harming SushiSwap’s market cap. Critics of the proposal argue that the team is attempting to seize control of the DAO and its assets, highlighting suspicious activities such as the strategic addition and subsequent removal of liquidity during the vote to manipulate voting power, raising questions about the integrity of the process.

💡 Our Take: The drama at SushiSwap illustrates the complex and often messy nature of decentralized governance, perhaps highlighting why newer crypto protocols lean towards more streamlined and centralized models to avoid such disputes. While this proposal may enhance operational efficiency, it raises valid concerns about transparency and the centralization of power, which could undermine the foundational principles of decentralization. Balancing these elements is crucial for maintaining trust and the decentralized ethos that underpins projects like SushiSwap.

Protocols experiment with airdrops to crypto-natives

📰 Story: Last week, @ethena_labs launched $ENA, the governance token for their renowned DeFi protocol, quickly reaching a circulating market cap of over $2 billion. Despite the protocol's significance, the choice of $ENA airdrop recipients raised eyebrows, including holders of the Milady Maker, Redacted Remilio Babies, and SchizoPosters NFT collections. This strategy was echoed this week by @OmniFDN, which announced its own airdrop for similar crypto-native NFT communities.

💡 Our Take: At first glance, the inclusion of such diverse communities in these airdrops might seem unconventional, but it underscores a fundamental principle in crypto: attention is a valuable commodity. By targeting highly active and socially influential groups within the crypto space, these protocols effectively mobilize a powerful marketing force. This strategy could set a precedent for future airdrops, potentially creating deeper interplay between serious protocols and crypto-native culture.

Cicada Partners to serve as Credit Risk Manager for TrueFi

📰 Story: @cicadacredit has recently gained approval from @TrueFiDAO to become a Credit Risk Manager on the TrueFi platform. This role enables Cicada to facilitate non-custodial lending services for market-neutral trading firms. This strategic move is aimed at rejuvenating institutional lending after a lull in borrowing demand and several high-profile defaults in previous years. Cicada will be structuring and underwriting non-custodial lending transactions, creating tailored vaults for borrowers, and actively managing risk on behalf of the DAO.

Watch our podcast with Sefton Kincaid of Cicada Partners here: https://t.co/z1vjzwMce0

💡 Our Take: We discussed these developments and more on this week's Wallfacer Podcast with Sefton Kincaid from Cicada Partners, exploring the past, present, and future of onchain credit. Revitalizing crypto-native lending on TrueFi has been a significant goal for us, and working with Cicada Partners is a pivotal step. We believe that their involvement will be crucial in re-establishing and expanding secure and efficient lending practices, revitalizing a critical segment of the DeFi ecosystem.