Kiffmeister’s #Fintech Daily Digest (08/19/2020)

DeFi’s explosive growth may be overstated, says report
The recent growth of Ethereum’s decentralized finance (DeFi) ecosystem may be significantly overstated, according to a DappRadar. 75% of DeFi’s growth has been fueled by surges in token prices, says DappRadar. When the total value locked in DeFi grew $800 million, the inflation-adjusted increase was just $200 million.
As Ethereum 2.0 gets bogged down in delays, Algorand pounces for DeFi market
DeFi-focused blockchain Algorand is launching smart contract capabilities that will allow DeFi solutions and dApps to be created that are more scaleable than on Ethereum. Specifically it is implementing stateful smart contracts within layer-1. These are more flexible than stateless smart contracts, which require all conditions to be met at once before the funds are unlocked. Stateful smart contracts, one of Ethereum’s strengths, can release funds when a sequence of interactive steps have been taken or conditions met, allowing for more sophisticated DApps and DeFi solutions. Algorand already supports stateless contracts, atomic swaps, and Algorand Standard Assets within layer-1. Algorand also says that its blockchain provides “negligible” transaction fees, a pointed reference to “first-generation” networks such as Ethereum.
Tether on OMG Network could slash Ethereum congestion 15%
Tether announced today the launch of USDT stablecoin transfers on the OMG Network, one of the first viable Ethereum Layer 2 scaling solutions. The launch will bring increased speeds and reduce transaction costs for Tether transfers, currently the number one source of transactions on the Ethereum network. If meaningful volume from Tether transfers shifts to the OMG network, it could generate a much needed reduction in the fees paid to interact with the Ethereum blockchain. The launch of OMG Network was a big step toward a more scalable Ethereum but its effects may not be felt just yet.
Congress, not the OCC, decides what is and isn’t a bank
The Office of the Comptroller of the Currency (OCC) recently announced its pivot to focus a fintech charter on nonbank payments companies. To accomplish this, Brooks claims the OCC has blanket authority under the National Bank Act to define what it means to be a bank. In some eyes this is an overstep of its reach to call anything that touches money a bank, which in the process, preempts state authority. Plus, the courts have previously determined the OCC lacks authority to issue charters to fintech companies that do not receive deposits because, under federal banking laws, the “business of banking” requires receiving deposits. And the court explicitly said that its decision applies nationwide.
YAM prepares for a second life
Yam Finance, the yield farming sensation which aggregated $600M in assets in less than 48 hours before being shut down, is set to see a second life. After $115,000 was donated for a security audit, Yam presented a two-phase rollout to transition the protocol transitions to a fully audited system. In the great DeFi migration, YAMv1 holders will migrate to YAM2 – a 1:1 match of YAMv1 with no rebases in place. YAM expands and contracts (or rebases) its supply twice a day to keep its $1 peg. Once the results of the audit have been implemented, YAM2 will undergo a migration to YAM3 – the final form of the protocol (for now) which incorporates all code updates and re-enables both rebases and community governance of Yam’s treasury in Curve Finance’s liquidity pool yCRV.
Posted from Diigo: