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Leviathan News episodes

  • Wrapped in Controversy: WBTC, Justin Sun, and Threshold's tBTC decentralized alternative

    On Friday, On Friday, BitGo, the current custodian for Wrapped Bitcoin (WBTC), announced that they were transitioning to the “world’s first multi-jurisdictional and multi-institutional custody via a unique partnership and joint-venture with BiT Global.”

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    Wrapped BTC (WBTC) is the largest Bitcoin token with 1:1 backing on Ethereum and widely used in almost every major DeFi application as a collateral asset.
    While these types of transfers usually draw little attention, BitGo sparked controversy when they included that the move was “a strategic partnership between BitGo, Justin Sun, and the Tron ecosystem.”
    Justin is a lightning rod in crypto and this move ruffled a lot of feathers.
    The new transitional move exploded across Twitter when Monet Supply of BA Labs who fired the first warning shots on August 11, when they posted on the MakerDAO forum proposing to close all new WBTC debt and prevent new borrowing against WBTC in an upcoming executive vote.
    Monet argued that Justin Sun's involvement would potentially threaten the operational processes and transparency of WBTC, in a similar vein to his takeover of TUSD. He agrued that post TUSD acquisition, several worrying events took place, including the resignation of the previous management team, suspension of real time proof of reserves, and several significant depegs caused by interruptions in redemption service. He also said that several other of Sun's projects showed “worrying signs of possible misappropriation, such as the substitution of Huobi’s USDT reserves with stUSDT, a Sun controlled RWA project that purports to hold a reserve of US treasury bills but has not provided clear audits or evidence that the backing exists.” Ultimately he believed that Sun's involvement “presents an unacceptable level of risk” and so WBTC debt should be frozen.
    BitGo's CEO Mike Belshe replied to the thread soon after, writing that “This seems to be more a reaction to the Justin Sun name than to facts.” He further wrote that
    “The underlying security is the same as what you have today, with https://wbtc.network continuing to provide near-real-time proof of reserves. If that ever changes, you’ll know in real time. Further, BitGo is still co-signing all transactions using the same technology it always had; BitGo simply will not sign a transaction that does not have the corresponding mint (BTC deposit) or burn (token ownership).”
    Regardless of whether the custodians are the same, secured with the same techonology, the new structure is a material change and potentially introduces new risks.
    Weirdly on Ethereum, there is only one wrapped version of Bitcoin…. WBTC. All other competitors have failed to capture any market share at all.
    There are no alternatives. This is what makes the shift so worrisome.
    GFX labs said this move was “extreme” and brought up the fact that other centralized issuers like Ethena and Ether.fi had not undergone the same level of scrutiny.
    Later in the thread, Monet Supply asked for a full detailed summary of the deal and legal structuring questions.
    Belshe replied that he would be happy to provide this info, but only to Maker’s legal representative under an NDA.
    It’s unclear if Maker took up the offer, but Leviathan spoke with an industry insider who told us “[BA Labs & Monet Supply are] technically just an advisor, but it’s their job and can’t think of a time they’ve ever not had their recommendations accepted” So there is a high likelyhood that new DAI minting will be frozen and WBTC eventually offboarded.

    49 min
  • Local Meltdown, Global Market Contagion w/ Noah Seidman

    In this detailed discussion, Sam McCulloch, DeFi Advisoor, and Noah Seidman Captain Rationale unpack recent market movements, including notable Bitcoin price swings and the rise in volatility indices. They delve into the implications of the unwinding U.S.-Japan carry trade due to tightening interest rates, the unexpected spikes in the VIX, and how these factors influence traditional and crypto markets. The conversation explores various economic and psychological aspects of market behavior, the role of political and regulatory elements in shaping financial landscapes, and strategies for asset management and capital preservation. Additionally, they touch on the resilience of DeFi protocols amid market turbulence and forecasts for the broader economic environment going forward.

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    00:00 Introduction and Market Overview
    02:05 Understanding the Carry Trade
    03:55 Volatility and Market Reactions
    08:15 Bitcoin and Crypto Market Dynamics
    11:18 Macro Trends and Predictions
    17:30 Regulatory Issues and Market Impact
    22:25 Investment Strategies and Market Structure
    38:00 Understanding Stable Coins and Cash Flow
    39:26 Resilience of DeFi Protocols
    42:19 Capital Management and Investor Behavior
    46:30 Economic Fluctuations and Debt Market
    57:15 Political Influence on Crypto
    01:06:57 Monetization of Bitcoin and Gold
    01:10:15 Conclusion and Wrap-Up

    1 hr 12 min
  • Llama Party feat. Drake Evans of Agora Dollar

    In this episode of Lama Party aired on Friday, August 10th, the host interviews Drake Evans about his move from Frax Finance to Agora Finance. They discuss Evans' journey in the crypto world, focusing on Frax's engineering culture and innovation such as FraxLend, and Agora's emphasis on efficient and secure stablecoin products. Agora's notable features include low-gas transactions, strategic blockchain expansions, and stringent audit practices through organizations like Spearbit DAO and Sertora. The conversation also highlights Agora's push for regulatory acceptance and their engagement with decentralized applications to drive adoption. The episode concludes with a call to follow Agora and Leviathan News for ongoing updates.


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    00:00 Introduction and Guest Introduction

    00:44 Sponsorship Announcement

    01:15 Drake Evans' Background and Journey into Crypto

    02:15 Early Crypto Experiences and Mining

    07:07 Joining Frax Finance

    09:08 Frax Finance Innovations and Security

    17:51 Transition to Agora Finance

    22:49 Agora Finance Vision and Strategy

    30:09 Technical Insights and Gas Optimization

    35:47 Mining the Vanity Address

    37:07 ERC Standards and Feature Parity

    41:02 The Importance of Freezing Functions

    43:49 Managing Stablecoin Funds Safely

    46:45 Trends in the Stablecoin Market

    51:16 Agora's Strategy for On-Chain Liquidity

    55:20 Exploring Non-USD Backed Stablecoins

    01:00:33 Future Plans and Partnerships

    01:04:36 Audit Transparency and Initial Deployments

    01:06:56 Conclusion and Final Thoughts

    1 hr 8 min
  • Open Season is Coming to Web 3 Gaming! FU Money coming by FU Studios

    Krypticrooks, founder of FU Studios, is on to talk about their new Flasgship game - Open Season!


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    Feel free to add comments and talk to us everyone!
    Enjoy!

    1 hr 4 min
  • Convergence Hacked, Tether Printing, Compound Gov and stuff - Weekly Panel

    The guys assemble to discuss weekly events - Samuel, Colin, Deo and DAdvisoor. Bryan Colligan from Alphagrowth joins later!


    00:00 - intro

    04:48 - trump BTC shoes

    06:42 - Nashville BTC speech - Trump

    08:52 - Bitcoin becoming the Trump trade and a partisan issue?

    14:05 - hopes for better regulation

    15;24 - Nashville BTC speech - Fitzgerald

    19:08 - Tether printing revenues, Circle IPO valuation

    30:32 - Convergence Hack, smart contract risks vs. TradFi risks, people are in it for the yield

    52:28 - Compound governance situation update, staked COMP coming!

    1:05:16 - wrapping up


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    Feel free to add comments and talk to us everyone!


    Enjoy!


    1 hr 8 min
  • Dinero's ipxETH as Insitutional DeFi w/ @0xSami

    Dinero (formerly Redacted) has unveiled ipxETH, an institutional-grade Ethereum liquid staking product developed in partnership with Nomura's Laser Digital and Galaxy Digital. ipxETH is designed to provide accredited investors and institutions access to Ethereum staking yields using Dinero’s on-chain suite of products while adhering to strict compliance standards.

    0xSami, Dinero's founder, explained the significance of this collaboration: "We realized very early on... as we tried to appeal to this new set of users coming in to crypto as a whole... it's all about trust. And if we were to just build ipxETH by ourselves... I don't think we would have been able to get the traction we did."

    ipxETH builds upon Dinero's existing Pirex ETH system, which uses a unique two-token model for Ethereum liquid staking first popularized by Frax. This model, consisting of pxETH and apxETH, offers users flexibility while maximizing yield-earning opportunities for their ETH.

    pxETH functions as a redeemable wrapper for ETH, maintaining a 1:1 peg to ETH's price. It allows holders to pursue various DeFi opportunities such as providing liquidity across multiple DEXes, borrowing, and lending. apxETH, on the other hand, is an ERC-4626 vault share that users receive when staking their pxETH, offering boosted ETH staking yields.

    The institutional version, ipxETH is essentially a wrapper for apxETH that employs segregated infrastructure to keep institutional funds separate from retail deposits, addressing key regulatory concerns. As 0xSami, Dinero's founder, explained: "When it comes into ipxETH... We're stacking up until we get to 32 ETH to spin up a validator. Whereas with deposits from the KYC address, we're stacking up... on a separate tally, to create the validator."

    This is the first institutional grade DeFi product and we can’t deny the future significance of what Dinero has built for future unlocking of institutional capital for the Ethereum staking ecosystem. With its compliance-focused approach, competitive yield potential, and the ability to incorporate advanced features like restaking, ipxETH is setting a high standard for our entire industry. 

    Dinero’s new product is just one of many new TradFi crypto products released this year, the biggest being the recently launched Ethereum ETFs. Staking is not allowed yet for these products, but its assumed it will be added in the future. 

    0xSami expressed confidence in the face of potential competition from Ethereum ETFs adding staking capabilities: "If staked Ethereum is deemed compliant enough to be a part of the ETF, then I think we're in the best position we've ever been because we've just proven that ipxETH is the only institutional grade LSD on the market right now that's working with big names."

    As the liquid staking derivatives (LSD) market becomes increasingly crowded, Dinero's approach with ipxETH sets it apart. They aren’t implementing new points systems chasing the meta or making wild claims about the future returns from restaking. The product's ability to offer institutional-grade compliance while maintaining the benefits of DeFi yields positions it uniquely in the market.

    As crypto evolves from its roots as a fringe, gray market technology to a global financial powerhouse, products like ipxETH are at the forefront of this transformation. The days of regulatory arbitrage and operating in the shadows are giving way to a new era of institutional adoption and mainstream acceptance. 

    ipxETH bridges the gap between the wild west of early DeFi and the regulated world of traditional finance. As 0xSami noted, "We've been able to prove now that [ipxETH] could be used in a variety of different applications." 

    This adaptability and compliance-focused design could set a new standard for the industry.

    As crypto continues its journey from the fringes to the heart of global finance, projects like ipxETH are not just participating in this evolution – they're actively shaping it, paving the way for a future where decentralized and traditional finance seamlessly coexist.


    48 min
  • Compound Governance Attack! w Bryan Colligan of Alpha Growth

    In a shocking turn of events, Compound Finance, one of DeFi's pioneering lending protocols, has fallen victim to what many are calling a blatant governance attack. The incident has sent shockwaves through the crypto community, raising serious questions about the vulnerabilities of decentralized autonomous organizations (DAOs) and the apparent apathy plaguing some corners of DeFi.

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    Compound is one of the oldest DeFi protocols, has never experienced a hack, was the pioneer of “liquidity mining” and remains today a major lending facility with over $2bn of deposits across multiple networks.
    The saga unfolded over the past few days, culminating in the passage of Proposal 289 - a controversial measure that allocates a staggering 499,000 COMP tokens (worth approximately $24 million and representing 5% of the total supply) to an LSD-style liquid locker controlled by a group known as the "Golden Boys." Led by a whale investor going by the handle "Humpy," this group managed to amass enough voting power on the open market to force through their proposal, despite vocal objections from key community members and security advisors.
    What's particularly alarming about this situation is the brazen escalation of the attackers' demands. An initial proposal for 92,000 COMP tokens was spotted and flagged by Compound's security advisor, Michael Lewellen. Despite Lewellen's warnings, the proposal received minimal attention on the DAO forum. After this first attempt failed, Humpy audaciously increased the requested amount by 5.4x in the successful third proposal.
    The lack of engagement from the broader Compound community is perhaps the most concerning aspect of this debacle. Only 57 addresses participated in the crucial vote, a pitiful showing for a protocol of Compound's size and importance. This apathy extends beyond this single incident - Compound's governance forums have been eerily quiet, with most proposals originating from a single entity, Gauntlet, which is paid to manage the DAO.
    This governance attack isn't Humpy's first rodeo. The investor has a history of similar behavior, having been involved in contentious governance struggles with other prominent DeFi protocols like Balancer and SushiSwap. These past incidents make the current situation at Compound all the more inexcusable.
    The implications of this attack are far-reaching. If a single whale investor can so easily sway the governance of a major DeFi protocol, what's to stop similar or even more damaging proposals in the future? The security of user funds could be at risk if this trend continues unchecked.
    For now, Compound Finance finds itself at a crossroads. The protocol's reputation has taken a significant hit, and rebuilding trust will be an uphill battle. As for the wider DeFi community, this incident should serve as a wake-up call. The promise of decentralized governance can only be realized if participants remain vigilant and engaged. Otherwise, we may see more instances of brazen governance attacks that undermine the very foundations of DeFi.

    43 min
  • Crypto Needs Customer Support w/ Glue

    It's a tough world out there in crypto. Hacks are happening left and right. All it takes is one transaction to lose it all. Can we do better? Glue thinks we can. Snapshot joins this episode to talk about their new network and how they are building the safest fully on-chain network for all people to use.


    https://glue.net/

    Snapshot: https://x.com/0x_SnapShot

    19 min

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