Welcome to Finance Redefined, your weekly dose of essential decentralized finance (DeFi) insights — a newsletter crafted to bring you significant developments over the last week.
This past week, Celsius’s financial troubles mounted further as a new coin report showed the company had a balance gap of $2.85 billion, more than double what it had shown in the bankruptcy filing. Aave called upon community members to commit to the Ethereum proof-of-stake (PoS) Merge.
Coinbase’s CEO said the exchange would rather wind down its staking services than implement on-chain censorship in the form of regulatory compliance. The crypto market saw another depeg this week, with the Acala ecosystem seeing its native stablecoin lose the peg.
With a sudden price drop toward the end of the week, the majority of the DeFi tokens registered a sea of red, falling in double digits on the weekly charts.
Celsius Network coin report shows a balance gap of $2.85 billion
A new bankruptcy coin report filed on Aug. 14 shows that troubled crypto lender Celsius’ actual debt stands at $2.85 billion against its bankruptcy filing claims of a $1.2 billion deficit.
The latest report shows that the company has net liabilities worth $6.6 billion and total assets under management at $3.8 billion. While in their bankruptcy filing, the firm has shown around $4.3 billion in assets against $5.5 billion in liabilities, representing a $1.2 billion deficit.
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Coinbase would rather shut down staking than enable on-chain censorship — Brian Armstrong
In light of the recent ban on crypto mixing tool Tornado Cash and the subsequent arrest of the Tornado Cash developer, there has been a growing debate over whether crypto services providers would choose decentralization or censorship as a form of compliance.
When asked whether Coinbase and others would choose to adhere to compliance requests and impose protocol-level censorship or shut down staking services, Brain Armstrong, the CEO of Coinbase, chose the latter.
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Another depeg: Acala trace report reveals 3 billion aUSD erroneously minted
High-profile security incidents continue to be a theme in 2022, with the Acala network joining a long list of stricken platforms to fall prey to exploits.
The Acala USD (aUSD) token, which acts as a native stablecoin for the Polkadot and Kusama blockchains, saw its value plummet 99% after a misconfiguration of the iBTC/aUSD liquidity pool was exploited after its launch on Aug. 14. Initial estimates from Acala noted that 1.2 billion aUSD was minted without the necessary collateral, seeing the token’s value depeg from its 1:1 peg with the United States dollar to a bottom of $0.01.
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Aave calls on members to commit to the Ethereum PoS chain
Aave token holders have been asked to take part in an Aave Request for Comment (ARC) that would require them to ”commit” to Ethereum’s proof-of-stake consensus.
The ARC, proposed on Aug. 16, comes in light of Ethereum’s upcoming transition to proof-of-stake. It calls for members to select the Ethereum mainnet running under PoS consensus as the new “canonical” governance system while also giving power to an authority to shut down any Aave deployments on any alternative Ethereum forks.
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DeFi market overview
Analytical data reveals that DeFi’s total value locked remained mostly unchained from the past week thanks to the market dip toward the end of the week. The TVL value was about $66.21 billion. Data from Cointelegraph Markets Pro and TradingView shows that DeFi’s top 100 tokens by market capitalization had a bearish end of the week, with several tokens registering double-digit losses.
Gnosis (GNO) was the only token in the top 100 to be trading in the green on the weekly charts. The rest of the tokens registered double-digit losses over the past week.
Thanks for reading our summary of this week’s most impactful DeFi developments. Join us next Friday for more stories, insights and education in this dynamically advancing space.
