EthHub Weekly #142

Eth2 phase 0 launch imminent, Loopring Wallet beta released, MCDEX heads to layer 2, GnosisDAO announced and much more!

Nov 30, 2020

Curated by Anthony Sassano (@sassal0x) and Eric Conner (@econoar)

[Sponsored] ZKSwap is the first zk-Rollups-based layer2 dex that is using an AMM model. The team recently closed a $1.7 million Angel Round and the code is being audited by CertiK.

Developed by L2lab, ZKSwap users zk-Rollup technology to move ETH and ERC20 tokens to layer-2. It uses zkSNARKs to verify the consistency between the Ethereum mainnet and layer-2. All swap transactions execute on layer-2 in real-time with zero gas fees, providing a smooth user experience like centralized exchanges while allowing users to have full custody over their funds.

ZKSwap has been live on the Ethereum Ropsten testnet since Nov 16th, 2020 and will launch on Ethereum mainnet in 1-2 weeks. To give back to the community, ZKSwap has launched several testnet incentive programs from November 27th, 2020. Please follow ZKSwap Twitter or discord to learn more.

🥩 Eth2 Cometh

Well, it’s finally here - the eth2 Beacon Chain genesis (phase 0) is set to happen in just a few hours. What an absolutely monumental occasion we’re about to witness - the culmination of 6 years worth of research and development to create a novel proof of stake consensus mechanism that is maximally decentralized. I gave some thoughts about it all in The Daily Gwei newsletter here. Oh and don’t forget to keep an eye on Twitter for a link to the EthHub x Bankless x DeFi Dad eth2 genesis livestream event - we’d love to see you there!

I had my monthly recap with Alex Saunders of Nugget’s News this week where we covered the last months worth of Ethereum updates - check that out here. I was also interviewed for a piece on DeFi for Stockhead which you can check out here.

Lastly, don’t forget to check out and subscribe to The Daily Gwei YouTube channel for recaps on everything that happened within the Ethereum ecosystem every week day.

Have a great week everyone!

- Anthony

News of the Week

⚖️ DAI Price Increase Leads to Mass Liquidations on Compound

A momentary price increase in the DAI stablecoin earlier this week led to massive liquidations at decentralized finance (DeFi) protocol Compound.

The protocol witnessed $88.4 million worth of liquidations, according to on-chain data analyzed by The Block. Data from tracker LoanScan, however, shows the liquidations at $103 million, which isn't accurate. Market conditions also led to liquidations at DeFi protocol dYdX, worth about $8 million, according to both on-chain data and LoanScan. Together, both the protocols liquidated more than $96 million worth of collateral.

How exactly did DAI's price increase lead to the liquidations? Compound allows users to borrow funds, including DAI. In all cases, a borrowed amount should always be lower than the collateral provided. In other words, all loans should be over-collateralized.

In this week’s case, the liquidations occurred because DAI's price momentarily increased by 30% on Coinbase Pro (source of Compound's price oracle), which led to under-collateralized loans on the protocol. In other words, the increased DAI price also increased the value of DAI borrowed on Compound, as compared to the collateral provided.

🤔 Facebook's Libra Could Launch its First Stablecoin in January

The Facebook-led Libra Association is reportedly targeting the launch of its first stablecoin in January of next year.

The Financial Times reported the news on Thursday, citing "three people involved in the initiative." According to one of the persons, the first stablecoin would be dollar-backed, while other planned single-currency and multi-currency stablecoins would be launched later.

The actual launch date of the dollar-pegged stablecoin would depend on when Libra gets a payment services license from the Swiss Financial Market Supervisory Authority, FINMA. The license could be granted as early as January, the three people said. Libra applied for the permit in April of this year.

Facebook's other subsidiary, Novi (formerly Calibra), is also preparing to launch its digital wallet for Libra stablecoins. The wallet is "ready from a product perspective," one person involved in Novi told FT, but initially, it would not be globally launched.