Silicon Valley relies on DeFi and Uniswap wants to set up a lobby

The decentralized finance (DeFi) market has had a turbulent month and a report in the Financial Times shows that investors from Silicon Valley are betting on the young sectors on a large scale – why are investors so convinced of DeFi?

The month of May was not only a catastrophic month for Bitcoin, it also went steeply downhill for the DeFi sector. As a result, many projects had to go through a stress test due to the crypto crash. You can read here how the individual sectors performed in this stress test.

Despite the poor price development in May, the capital managed by DeFi protocols (Total Value Locked) was able to slowly recover compared to the previous week. Total Value Locked (TVL) rose over $ 10 billion to $ 115.59 billion at press time.

Source: DeFi Llama, Total Value Locked in US dollars

Ethereum DeFi projects still dominate the emerging sector and only the TVL of the Binance smart chain project PancakeSwap (CAKE) currently makes it into the top five.

DeFi
Source: DeFi Llama, TVL Ranking

In particular, the decentralized exchange (DEX) Curve (CRV) was able to increase its TVL this week. This was probably due to the fact that Curve, like Aave (AAVE) and Sushiswap (SUSHI), relied on Polygon’s scaling solution puts and thereby was able to attract new users and capital.

Uniswap wants to set up a lobby for cryptocurrencies

A group of influential people from the Uniswap (UNI) community wants a lobby for cryptocurrencies and especially decentralized finance establish. The group suggests that some of the UNI Community’s assets should be used to fund a lobby group. Among other things, this should serve to promote the interests of Uniswap in politics.

The proposal stipulates that between one and 1.5 million UNI should be set aside. That currently equates to between $ 27 million and $ 40 million. The funds are to be used to set up and finance an organization monitored by the UNI community. The organization should then target itself for the crypto community in politics deploy. To be precise, the organization should work to educate political decision-makers in order to create greater regulatory clarity for the crypto space.

While the majority passed the proposal in one vote have agreed, the suggestion was extreme among many community members controversial. Because not everyone wants a single organization to decide how lobbying funds are used. Those who oppose the proposal do not believe that the organization is acting in the interests of all UNI owners and therefore reject it.

Silicon Valley investors rely on DeFi on a large scale

DeFi protocols like Uniswap are still extremely young and the entire sector is barely regulated. Still, venture capitalists already have millions investing in decentralized finance earned. The entire sector is becoming more and more popular with investors and the graphic from PitchBook is an impressive illustration of this rapid development.

According to the data from PitchBook venture capitalists have already financially supported over 72 DeFi projects in 2021. This number already exceeds last year’s figure by more than 25 percent. In addition, from a report the Financial Times shows that a lot of venture capital from Silicon Valley in particular is convinced that DeFi has the potential to turn the traditional financial system inside out. As soon as there is more regulatory clarity for decentralized finance, it is therefore quite possible that institutional investors will also invest in DeFi, according to the Financial Times.

First DeFi project goes live on Algorand

Yieldly is another DeFi project that started on June 5th as the first DeFi project by Algorand. The project was founded by Sebastian Quinn in 2020 and aims to be the first decentralized exchange on Algorand. In addition, Yieldly wants to finally have solved the blockchain trilemma and be both decentralized, secure and scalable.

In addition to multi-asset staking and no-loss prize games, Yieldly also wants cross-blockchain trading enable.

As the first DeFi project on Algorand, Yieldly wants to fundamentally change the DeFi space. The next few weeks will show whether this mission can succeed.