Author: Michelle Lazo

MakerDAO, one of the most prominent and long-standing players in the decentralized finance space, is undergoing a significant transformation. The $7 billion crypto lender announced on Tuesday that it has rebranded to “Sky” as part of a broader overhaul that includes the introduction of new stablecoin and governance tokens. This strategic shift, known as the “Endgame,” is poised to reshape the landscape of DeFi and position the protocol for future growth.

MakerDAO Rebranding: The Shift to Sky

The rebranding from MakerDAO to Sky marks a new chapter for the DeFi protocol, which has been a cornerstone of decentralized finance since its inception. Alongside the rebrand, Sky is rolling out upgraded versions of its well-known stablecoin and governance token. The new stablecoin, named USDS, and the new governance token, SKY, will coexist with the existing DAI and MKR tokens, which will remain in circulation.

Token holders will have the option to exchange their DAI tokens 1:1 for USDS, while MKR tokens can be swapped for 28,000 SKY tokens. This voluntary exchange process will begin on September 18, 2024, allowing holders to choose whether to adopt the new tokens or continue using the originals.

Strategic Goals and Market Impact

Rune Christensen, co-founder of MakerDAO, has been the driving force behind this transformation, which is part of a multi-year plan aimed at scaling DeFi to new heights. “The fundamental factor was how to grow DeFi to gigantic scale, something as big as Tether or even bigger,” Christensen explained in a recent interview. Tether, with its $116 billion USDT stablecoin, currently dominates the stablecoin market.

The market responded positively to the rebranding news, with the price of MKR gaining over 4% immediately after the announcement and rising by 2% over the following 24 hours. This performance outpaced both Bitcoin and the broader crypto market, as measured by the CoinDesk 20 index. The introduction of USDS and SKY is seen as a pivotal move that could significantly increase MakerDAO’s market presence and drive further adoption of DeFi.

The Endgame Plan: Decentralization and Growth

The rebranding and token launch are just one aspect of the broader Endgame plan. This ambitious initiative also involves breaking up the protocol into smaller, independent entities, each with its own token. These entities, previously referred to as SubDAOs, will now be called Stars under the new branding.

The first of these Stars is Spark, a lending platform built on top of the Maker/Sky protocol. Spark will be the first to test the waters of this decentralized approach, with more entities expected to follow in the coming months. This strategy aims to decentralize the ecosystem further, promoting innovation and reducing the risks associated with centralized governance.

In addition to decentralization, the Endgame plan also includes the launch of the Sky.money application, a new user interface that will facilitate interaction with the protocol. The application will offer native token rewards for USDS and SKY holders, although these rewards will be restricted in certain jurisdictions, including the U.S. and the UK, due to regulatory considerations.

Future Outlook: A New Era for DeFi

The rebranding of MakerDAO to Sky, coupled with the launch of the USDS stablecoin and SKY governance tokens, represents a bold step forward for the DeFi protocol. By positioning itself as a major player in the decentralized finance space, Sky aims to attract a broader user base and compete with industry giants like Tether.

The introduction of the Stars entities and the Sky.money application further underscores the protocol’s commitment to innovation and growth. As the transformation unfolds over the coming months, Sky’s success will likely serve as a bellwether for the future of DeFi, influencing how other protocols approach scaling, governance, and user engagement.

As the DeFi landscape continues to evolve, Sky’s strategic overhaul could set a new standard for decentralized finance, making it a critical development to watch in the coming years.

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Xapo Bank, in collaboration with Hilbert Capital, the asset management arm of Swedish investment firm Hilbert Group, is set to launch a Bitcoin-denominated hedge fund with an initial capital of $200 million. This strategic move, announced on Tuesday, reflects the growing institutional interest in cryptocurrency, particularly in structured investment products that go beyond mere exposure to Bitcoin’s price. The fund is scheduled to launch in September and will be available to corporates, businesses, and professional investors.

The Rise of Bitcoin-Denominated Hedge Funds

The launch of this Bitcoin-denominated hedge fund marks a significant milestone in the evolution of cryptocurrency as a mature asset class. Unlike traditional investment funds that are typically denominated in fiat currencies, this hedge fund will operate in Bitcoin, allowing investors to grow the Bitcoin value of their investments in a structured manner.

Joey Garcia, Director of Xapo Bank, emphasized the importance of this development, stating, “We believe that offering the right products for participants in the space who are aiming not only for exposure to the Bitcoin price, but also structured ways to grow the Bitcoin value of those investments is a natural evolution of the asset class.” This approach caters to sophisticated investors seeking to maximize their returns in Bitcoin rather than in traditional fiat currencies.

Competitive Edge in Fee Structure

One of the distinguishing features of the new Bitcoin-denominated hedge fund is its fee structure. While the specifics of the fees have not been disclosed, Xapo and Hilbert Capital have indicated that the fees will be “at a lower level than other 2% and 20% hedge funds.” This refers to the standard fee structure in the hedge fund industry, where managers typically charge a 2% management fee and a 20% performance fee on the fund’s gains.

By offering a more competitive fee structure, Xapo and Hilbert Capital aim to attract a broader range of institutional investors who are looking for cost-effective ways to invest in Bitcoin. This move could set a new standard in the cryptocurrency hedge fund space, where fee structures have often been a point of contention among investors.

Implications for Institutional Adoption of Crypto

The launch of the Xapo-Hilbert Bitcoin-denominated hedge fund is a clear indicator of the increasing institutional adoption of cryptocurrency. As more sophisticated investment products become available, institutional investors are likely to view Bitcoin and other cryptocurrencies as viable components of their portfolios.

The growth of Bitcoin-denominated hedge funds, in particular, could serve as a barometer for this trend. By offering products that appeal to professional investors, Xapo and Hilbert Capital are positioning themselves at the forefront of this shift, providing a gateway for more traditional financial institutions to enter the crypto space.

The Road Ahead: What to Expect

The success of the Xapo-Hilbert Bitcoin-denominated hedge fund could pave the way for more similar products in the future. As institutional interest in cryptocurrency continues to grow, the demand for innovative investment vehicles is likely to increase. This could lead to the development of a wide range of crypto-based funds, catering to different risk appetites and investment strategies.

Moreover, the launch of this fund could encourage other asset management firms to explore the potential of Bitcoin-denominated products. As the crypto market matures, the introduction of more sophisticated investment options will be crucial in attracting institutional capital and driving the next phase of growth in the industry.

In conclusion, the collaboration between Xapo Bank and Hilbert Capital to launch a $200 million Bitcoin-denominated hedge fund represents a significant step forward in the institutionalization of cryptocurrency. With a competitive fee structure and a focus on growing the Bitcoin value of investments, this fund is poised to attract a wide range of professional investors, further solidifying Bitcoin’s role as a legitimate asset class.

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The world of non-fungible tokens continues to thrive, with Polygon emerging as a significant player in the market. On August 25, the Polygon-based NFT collection MKgirl led the market in daily sales, recording an impressive $1.1 million. This surge highlights the growing importance of Polygon in the NFT ecosystem, as it increasingly competes with established blockchain networks like Ethereum and Solana. The rise of NFT sales on Polygon underscores the platform’s ability to attract creators and collectors alike, offering a viable alternative to its more prominent counterparts.

MKgirl: The Market Leader on Polygon

The MKgirl collection, which launched on August 24, quickly made waves in the NFT market. In just one day, it recorded 421 transactions, leading to $1.1 million in sales. Despite the relatively small number of unique sellers—just four—the collection managed to capture significant attention and financial investment. MKgirl’s success is a testament to the growing appeal of NFTs on Polygon, which offers lower transaction fees and faster processing times compared to Ethereum.

As of now, MKgirl has 233 active owners, indicating a strong and engaged community behind the collection. This level of activity so soon after its launch positions MKgirl as a potential long-term player in the NFT space on Polygon. The success of MKgirl could inspire more creators to explore Polygon as a platform for launching their NFT projects, further boosting NFT sales on Polygon.

Competition in the NFT Market

While MKgirl led the market on August 25, other NFT collections also saw significant sales. DMarket, a collection residing on the Mythos Chain, ranked second with nearly $792,000 in sales across 27,387 transactions. DMarket’s all-time sales volume has now surpassed $495 million, putting it on the brink of joining the half-billion dollar club—a milestone achieved by only 14 other collections.

Ethereum-based CryptoPunks secured the third spot with over $604,000 in sales from just seven transactions. CryptoPunks remains one of the most iconic NFT collections, with an all-time sales volume of $2.87 billion, ranking third in the industry.

Other notable collections include Guild of Guardians Heroes on Immutable, which recorded $541,450 in sales, and Ethereum-based Pudgy Penguins, with $447,641 in sales. On the Solana blockchain, Solana Monkey Business and DogeZuki Collection also made significant contributions, with sales of $371,874 and $324,468, respectively.

Blockchain Performance: Ethereum, Solana, and Polygon

Ethereum continues to dominate the NFT market, leading all blockchains in sales on August 25 with a total of $4.06 million. Although this was a slight decrease from the previous day’s $4.22 million, Ethereum’s position as the leading blockchain for NFTs remains unchallenged.

Solana followed closely with $2.2 million in daily sales, showcasing its growing influence in the NFT space. Solana’s lower transaction fees and faster processing times make it an attractive option for NFT creators and buyers, much like Polygon.

Polygon, which has rapidly gained popularity, came in third with $2.18 million in daily sales. The success of collections like MKgirl demonstrates Polygon’s potential to rival Ethereum and Solana in the NFT market. With its lower fees and robust infrastructure, Polygon is becoming a preferred platform for both new and established NFT projects.

Conclusion

The rise of NFT sales on Polygon, highlighted by the success of the MKgirl collection, signifies a shift in the NFT landscape. As Polygon continues to attract high-profile projects and a growing number of users, it is poised to become a major player in the NFT market. While Ethereum remains the dominant blockchain, and Solana continues to gain ground, Polygon’s unique advantages are likely to fuel its ongoing growth.

As the NFT market evolves, the competition among blockchains like Ethereum, Solana, and Polygon will drive innovation and provide more opportunities for creators and collectors alike. The success of MKgirl and other collections underscores the dynamic nature of the NFT space and the potential for new platforms to emerge as leaders in this rapidly expanding market.

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Rumpel Labs, a pioneering startup backed by venture capital heavyweights like Dragonfly and Variant, is set to redefine the crypto loyalty points market. The company, emerging from stealth mode, is building a robust infrastructure that allows for the tokenization and trading of loyalty points distributed by decentralized finance and Web3 projects. This new platform addresses the growing demand for a more efficient and liquid market for airdrop-related points, which have become a crucial tool in the crypto space for incentivizing user engagement and rewarding early adopters.

The Rise of Crypto Loyalty Points

In the evolving landscape of cryptocurrencies and decentralized finance, loyalty points have become a popular mechanism for engaging users and driving growth. These points are often linked to the promise of future airdrops—free tokens or coins distributed to users who participate in a blockchain network. According to Rumpel Labs, close to 50% of recent airdrops were distributed to holders of these loyalty points, underscoring their significance in the crypto ecosystem.

Projects like NFT marketplace Blur and Ethena’s USDe stablecoin have demonstrated the power of these points programs, leveraging them to build robust communities and accelerate growth. However, while these programs have brought value to many projects, they have also encountered challenges, particularly around unmet expectations and the lack of a formalized market for trading these points.

Addressing the Challenges in the Crypto Loyalty Points Market

Kenton Prescott, CEO of Rumpel Labs and a former developer at MakerDAO, recognizes the issues that have plagued the crypto loyalty points market. Users often find that the value of their airdropped tokens is significantly lower than anticipated, leading to dissatisfaction and missed opportunities. Additionally, there is a growing demand from users who wish to gain more exposure to specific projects through loyalty points, but the lack of a secondary market makes it difficult to achieve this.

Prescott believes that the solution lies in creating a more formalized and efficient market for these points. “These issues are just caused by not having the ability to effectively transfer and trade points,” Prescott stated in an interview. He emphasized the need for a secondary marketplace with capital efficiency, deep liquidity, and robust price discovery mechanisms. Such a platform would not only address the current inefficiencies but also unlock new opportunities for users and projects alike.

Rumpel Labs’ Vision for the Future

Rumpel Labs is set to launch its own points program in mid-September, marking the first step towards revolutionizing the crypto loyalty points market. The platform aims to provide a secure and efficient marketplace where users can trade their loyalty points with confidence, knowing that they have access to accurate pricing and sufficient liquidity. By addressing the existing gaps in the market, Rumpel Labs seeks to empower users to maximize the value of their loyalty points while providing projects with a more effective tool for driving engagement and growth.

The backing from prominent venture capital firms like Dragonfly and Variant highlights the confidence in Rumpel Labs’ vision and its potential to transform the crypto space. As the platform goes live, it will be closely watched by industry stakeholders eager to see how it reshapes the market for airdrop-related points.

Conclusion

Rumpel Labs is poised to make a significant impact on the crypto loyalty points market with its innovative platform. By offering a formalized marketplace with deep liquidity, capital efficiency, and price discovery, Rumpel Labs addresses the key challenges that have hindered the growth of this market. As the company prepares to launch its points program in September, it is set to become a major player in the crypto space, providing users and projects with the tools they need to succeed in a rapidly evolving landscape.

The introduction of such a platform not only enhances the trading of loyalty points but also strengthens the overall ecosystem, making it easier for users to engage with and benefit from the projects they support. Rumpel Labs’ efforts are a promising step forward in the ongoing development of the crypto market, offering new possibilities for both users and developers in the world of decentralized finance and Web3.

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In a significant shift within the crypto ETFs market, BlackRock (NYSE:BLK) has overtaken Grayscale in assets under management for publicly-listed crypto products. This change, noted by James Butterfill, Head of Research at CoinShares, highlights the growing dominance of traditional financial giants in the rapidly evolving cryptocurrency space. The competition between these two titans is reshaping the landscape of crypto ETFs, particularly in the realms of Bitcoin and Ethereum investments.

BlackRock’s Rapid Ascent in Crypto ETFs

BlackRock, known for its extensive range of exchange-traded funds, has swiftly climbed to the top of the crypto ETFs market. Just eight months after the introduction of spot Bitcoin ETFs, BlackRock’s spot Bitcoin and Ethereum ETFs have amassed a staggering $22 billion in AUM. This impressive growth has allowed BlackRock to surpass Grayscale, which now holds $20.7 billion in AUM, including funds for other cryptocurrencies like Solana and Chainlink.

The launch of spot Ethereum ETFs in July played a crucial role in accelerating BlackRock’s rise. Investors have flocked to these new products, drawn by their lower expense ratios and the trusted reputation of BlackRock in the ETF market. In particular, BlackRock’s spot Ethereum ETF saw significant inflows, netting $966 million, while Grayscale’s Ethereum Trust faced persistent outflows, totaling $2.3 billion.

The Competitive Landscape of Crypto ETFs

The competition between BlackRock and Grayscale is most evident in their Bitcoin ETFs. Grayscale’s Bitcoin Trust remains a leader with $18.7 billion in AUM, but BlackRock’s iShares Bitcoin Trust is closing the gap, now holding $17.2 billion. This narrowing margin underscores the shifting preferences of investors, who are increasingly drawn to the lower fees and robust infrastructure offered by established financial institutions like BlackRock.

Grayscale, which was an early pioneer in the crypto ETFs market, is now facing challenges in maintaining its dominance. The company has invested heavily in advertising, promoting its products in airports and New York City subways. Despite these efforts, the higher expense ratios of Grayscale’s products are becoming a deterrent for cost-conscious investors. For instance, while BlackRock’s Ethereum ETF has an expense ratio of 0.25%, Grayscale’s spot Ethereum ETF comes in much higher at 2.5%. Even with the more competitive 0.15% expense ratio offered by Grayscale’s Ethereum Mini Trust, the company is struggling to keep pace with BlackRock’s rapid growth.

The Future of Crypto ETFs

James Butterfill of CoinShares believes that Grayscale’s ability to reclaim its leading position in the crypto ETFs market will be challenging, particularly as investors gravitate towards cheaper and more established alternatives. “Keeping fees high will deter many investors,” Butterfill noted, emphasizing the importance of competitive pricing in the increasingly crowded crypto ETFs space.

The competition between BlackRock and Grayscale is likely to intensify as more traditional financial institutions enter the crypto market. Companies like Fidelity and Invesco are also making significant strides with their own crypto ETFs, offering investors a growing array of choices. As the market for crypto ETFs continues to expand, the battle for AUM will be determined by factors such as fee structures, product offerings, and the ability to innovate within this fast-moving sector.

Conclusion

The rise of BlackRock in the crypto ETFs market marks a pivotal moment in the evolution of cryptocurrency investments. By surpassing Grayscale in AUM, BlackRock has demonstrated the growing influence of established ETF providers in the crypto space. As the competition between these financial giants heats up, the landscape of crypto ETFs will continue to evolve, offering investors more options and potentially driving down costs. For Grayscale, the challenge now lies in adapting to this new environment and finding ways to retain its once-dominant position in the market.

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