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This Week In DeFi – December 23

This Week In DeFi – December 23

This week, Binance.US agrees to acquire Voyager Digital, Visa considers StarkNet for automatic payments, Uniswap partners with Moonpay and Senator Toomey introduces a stablecoin bill before retirement

December 23, 2022

To the DeFi community,

This week, Binance.US, the American branch of major cryptocurrency exchange Binance, plans to acquire the assets of troubled cryptocurrency lender Voyager Digital for $1.02 billion.

However, the deal includes the transfer of $20 million to Voyager's bankruptcy estate and the acquisition of rights to 3.5 million of Voyager's customer accounts. The final value of the deal will be determined in the future and is subject to approval from the bankruptcy court and a creditor vote.

The acquisition is part of Binance.US' efforts to expand and acquire customers after it recently stopped charging trading fees on bitcoin and ether.

i legit was not that worried about Binance until they said the wanted to now acquire Voyager
makes no sense to me unless they need to keep it afloat for some reason
they had a chance before and hard passed and let SBF take it
why interested now and why spend that money?
— DCinvestor (@iamDCinvestor)
2:08 AM • Dec 20, 2022

Visa has suggested that StarkNet, a layer 2 blockchain built on Ethereum, could be used to facilitate automatic recurring payments through self-custodial wallets.

The payment giant used Argent, a crypto wallet, and the StarkNet scaling platform to test a proof of concept using a concept called account abstraction, which allows smart contracts to carry out transactions for a user.

While automatic payments are common on traditional mobile banking apps, they are more difficult to implement on the blockchain. Visa is interested in exploring programmable payment technologies and is open to discussing ideas with other companies working in the field.

We're really excited to see @Visa experimenting with Argent X and StarkNet to explore what's possible with Account Abstraction, which we view as essential in bringing crypto to the masses
— Argent (@argentHQ)
8:04 AM • Dec 20, 2022

Decentralized exchange Uniswap has announced a partnership with fintech company Moonpay, enabling users to buy cryptocurrency on its web app using debit cards, credit cards, and bank transfers.

The bank transfer option is currently available for users in the US, Brazil, the UK, and the Single Euro Payments Area (SEPA).

Uniswap users will now be able to convert fiat to cryptocurrency on the Ethereum mainnet, Polygon, Optimism, and Artibrum in a matter of minutes. Initially, Uniswap will support Dai, Ether, USD Coin, Tether, Wrapped Bitcoin (wBTC), and Wrapped Ether (wETH), depending on the user's region.

1/ Go direct to DeFi 🚄
Starting today, you can now purchase crypto on the Uniswap Web App using a credit/debit card or bank transfer at the best rates in web3 thanks to our partnership with @moonpay! 💸
uniswap.org/blog/web-fiat-…
— Uniswap Labs 🦄 (@Uniswap)
5:18 PM • Dec 20, 2022

Republican Senator Pat Toomey has introduced the Stablecoin TRUST Act of 2022, a bill that would create a regulatory framework for "payment stablecoins" in the US.

The bill would permit non-state and non-bank institutions to issue stablecoins, as long as they obtain a federal license from the US Office of the Comptroller of the Currency (OCC) and their stablecoins are backed by "high-quality liquid assets". Stablecoin issuers would also be required to comply with a new public disclosure standard, clearly outline redemption policies and provide regular attestations from authorized accounting firms.

1/ Decoding the new Stablecoin bill introduced by Senator Pat Toomey (R-PA), as he exits from Congress. @SenToomey thanks for your service! Ok, a 🧵
— Jason Brett (@RegulatoryJason)
1:40 AM • Dec 22, 2022

The dust from the multiple collapses of centralized entities is beginning to settle, as we begin to reach the resolution stage after the demise of BlockFi, Gemini, Voyager and FTX and others. Although most users will not be made whole, bankruptcy proceedings are clearing the air and making way for the rebuilding process, which likely will see some exodus from the crypto space, as well as a large migration of capital to DeFi rather than CeFi platforms.

It is worth reiterating that other centralized points of failure are still eventuating – so not all remaining entities are safe. This week, Maple Finance has seen another multi-million dollar default by borrower Auros, while other dubious parties are still under operation in the ecosystem.

While some parts of the DeFi system are tearing away from the traditional financial and regulatory world, other parts are being roped in much closer, which will result in an interesting dynamic. Platforms such as Uniswap are integrating fiat on-ramps, Visa considering StarkNet, and stablecoin regulation is getting closer – which will lead to a much closer inspection of the space.

On the other hand, we have parties such as Paxful pulling away from Ethereum among fears of centralization and regulatory influence, as well as CeFi entities being chipped away from the system.

It appears that we are on the verge of the inevitable split of DeFi into a garden-walled system and “the wild west” – an interesting phenomenon indeed.