🦙 Llama Drama: Decentralization Can Be a Problem

$30B ETH Staked | Web3 Gaming Ecosystem

March 20, 2023

GM, folks 👋🏻 - Happy Monday.

It’s never a dull weekend in crypto. The markets are up with total market cap hitting $1.2T. Also, Balaji is having a meltdown, Arbitrum’s token IOUs trading for $10, and DeFiLlama is having an internal war.

Let's dive into today's issue 🤿

In Today's Email:

What Matters: DeFiLlama drama 🦙
Products: Intella X, web3 gaming ecosystem on Polygon 🎮
Charts: $30B ETH staked, Arbitrum dApps ecosystem 📈

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Narratives: Other than Arbitrum ecosystem, pay attention to potential upcoming airdrops. We’re seeing interests in the upcoming ZK-related chain launches.

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WHAT MATTERS

DeFiLlama Drama

Pixabay | @manfredrichter

State of play: DeFiLlama, the most popular DeFi data aggregator, is having an internal war. Over the weekend, 0xngmi, one of the most known public-facing persona of DeFiLlama, tweeted that DeFiLlama is undergoing a hostile “takeover” 🤔

The original founders of DeFiLlama, who are extremely under the radar, want to launch a token, but many on the team doesn’t want to be associated with.
0xngmi and other team members who are against the token, forked the DeFiLlama website into llama.fi
The original founders of DeFiLlama are Charlie Watkins and Ben Hauser.

What’s next: The situation is still ongoing. Many suggest not touching either the old DeFiLlama website or the new forked version, out of an abundance of security concerns. No further announcements have been made from 0xngmi or the original founders of DeFiLlama.

Our take: No one here is truly right or wrong. This is a simple dispute between two co-founders, that didn’t implement proper organizational controls in the first place. As a result, one founder controls the original domain, idea, and website; while the other holds the operational execution and the public-facing narrative 🤷

this is all so tiring
Let’s get this straight
- ngmi has put almost the same amount of funding into DefiLlama as Llam4
- Llam4 never paid DL employee salaries, ngmi did (until grants started covering)
- ngmi legally owns 70% of DL
- Llam4 has done practically 0 work on DL
— Tendeeno (@Tendeeno_)
7:16 PM • Mar 19, 2023

DeFiLlama’s DeFi Godfather Andre Cronje made a great counter point.

Easy to be ideological when you aren't paying the bills. Charlie has been out of pocket funding all of defillamas expenses for years, it isn't cheap. Watching everyone turn on everything he has done is disgusting. Him trying to stop the bleeding isn't greed, it's sustainability.… twitter.com/i/web/status/1…
— Andre Cronje (@AndreCronjeTech)
2:36 PM • Mar 19, 2023

For builders: DeFiLlama’s original founders lost control of the narrative. Decentralization has created unique working dynamics. In any other business, the action of 0xngmi would be sued out of oblivion. However, it’s not easy to do so in crypto, given the industry's open-source, decentralized, and multiple jurisdictions nature.

0xngmi following and social influence are so critical to DeFiLlama's narrative. As founders, make sure that you hold the narrative.

For investors: Once again, understand whether the projects you’re investing in have a real moat given the decentralized environment. Many projects are just “features” and not actual products. Those can be easily forked away by somebody else with a higher social graph. Assess carefully.

PRODUCTS OF THE WEEK

Intella X: Web3 Gaming Ecosystem 🎮

What is Intella X: Intella is a web3 gaming ecosystem built on the Polygon blockchain. It’s a project out of Neowiz, a South Korea-based gaming giant. The project plans to perpetually distribute rewards to contributors to its ecosystem, including developers and users, via its native token.

Intella X raised $12M on January 2023.
Its products include an NFT marketplace, a launchpad, a DEX, and a crypto wallet.
There are 10 games in the works, with a relatively strong focus on gambling games such as slots, poker, and blackjack.
How it works. Users can download the Intella X wallet on Google Play Store as a gateway to access the Intella X ecosystem. The app will allow users to play games and manage their funds in a decentralized manner (self-custody).

Other cool products:

Unisub, a crypto recurring subscription tool.
Aegis, a web3 exploit detection and prevention tool.
Web3Hook, a tool to automate Ethereum with Zapier.
Lugia, an NFT search engine.
ChatWise, a web3 version of Instagram.
Assisterr, a web3 analytics platform powered by ChatGPT.
Soon, a tool to reimburse spending with crypto gains.

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CHARTS OF THE WEEK

$30 Billion ETH Staked 📈

Delphi Digital

17.5 million or approximately $31.5B worth of ETH is now staked. This number represents 14-15% of ETH in circulation. The number of ETH being staked has been trending upwards in 2023 as the market anticipates the upcoming Shanghai upgrade.

Our take: This number is unsurprisingly up only since withdrawals are impossible. That said, the staked ETH percentage is significantly lower than newer PoS blockchains. This shows that ETH is much more decentralized and that there’s massive room to grow.

To watch: Shanghai will be a tricky event. It shows that Ethereum can continue to develop in a decentralized manner. At the same time, it unlocks a massive supply of ETH, which will undoubtedly create downward pressure, especially amidst the ongoing regulatory scrutiny towards PoS crypto assets.

Arbitrum Decentralized Applications 👀

Nansen

State of Play: Arbitrum is all the hype. With the ARB token releasing in the next few days, let's look at the most active dApps on Arbitrum by share of total transactions.

GMX, a decentralized perpetual trading platform, leads the pack.
Treasure, a decentralized gaming ecosystem, is the runner up.
Top AMMs, Uniswap and SushiSwap, are unsurprisingly the 3rd and 4th

Our take: Having a robust dApp ecosystem is incredibly important. With the launch of the ARB token, projects on Arbitrum will be aggressive at luring the additional 9 figures (might even be 10) worth of capital from the ARB airdrop.

We’ll see ludicrous incentive programs that will help prop up the broader crypto markets at least in the short to medium term.

QUICK BITES

Coinbase explores overseas exchange entity.
Microsoft tests crypto wallet in its Edge browser.
Binance answers Elizabeth Warren’s questions.
Hong Kong confirms crypto ambitions.
Taiwan names FSC as crypto watchdog.
DeFiLlama is having an internal war.
Ex-Coinbase CTO Balaji bets $1M on Bitcoin price and US hyperinflation.

MEME & NOTEWORTHY READS

Tendeeno’s thread on DeFiLlama drama situation.
Arthur Hayes’ thread on Banks swap lines.
Adam Cochran’s thread on why he’s comfortable betting against Balaji’s BTC bet.

Tron founder Justin Sun outbidding UBS for @CreditSuisse 😂
I love this industry
— Erik Voorhees (@ErikVoorhees)
4:00 PM • Mar 19, 2023

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Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.