WEF talks DeFi regulation, HKDA integrates stablecoin Chainlink: Finance redefined
Welcome to Finance Redefined, your weekly volume of decentralized finance (DeFi) insights – a newsletter designed to bring you the most relevant developments from the past week.
This week, the World Economic Forum (WEF) endorsed a “sandbox-first approach” to DeFi adoption, urging regulators to use regulatory sandboxes to foster innovation and manage risks in DeFi.
In other news, IDA Finance has announced that it has joined forces with Chainlink's blockchain services for the upcoming HKDA stablecoin, aiming to improve transparency and security in cross-chain operations.
WEF advocates a “sandbox-first approach” to DeFi adoption
The World Economic Forum (WEF) urged regulators and policymakers to experiment with DeFi-related innovations and regulatory sandboxes.
The WEF statement aims to focus on risk reduction and transparency assurance to create a tailored approach to DeFi regulation.
In a global assessment of nine economies, the WEF identified this need in countries such as the United States, the United Kingdom, Japan and the United Arab Emirates.
Countries that have adopted the WEF “funny, sandbox approach” have shown signs of promoting DeFi innovation by addressing inherent risks in the DeFi ecosystem.
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IDA integrates HKDA stablecoin with Chainlink using secure cross chain
On October 9, Hong Kong-based digital assets IDA Finance announced that it will integrate Chainlink's blockchain services into its upcoming HKDA stablecoin.
The collaboration aims to improve the transparency and security of cross-chain operations by integrating ChainLink's Oracle services with a Hong Kong dollar-backed stablecoin.
As part of the integration, implementing proof-of-chain (PoR) technology will enable onchain verification of assets backing IDA Finance's HKDA stablecoin.
By establishing a medium to monitor the HKDA guarantee, PoR technology can help reduce the risks of insufficient backup and functionality to provide reliability and security to consumers.
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Trump crypto project presented Aave link in the administration proposal
World Freedom Finance (WLF), a crypto project launched by former US President Donald Trump, has submitted a management proposal to Aave, confirming plans to build on the DeFi platform.
The WLF project proposed to launch its service as Aave v3 on the Ethereum mainnet as the protocol's backend for the platform.
The Trump-backed project has offered AaveDAO, a governance group of Aave tokenholders that oversees the protocol, 20% of the generated fee and 7% of the platform's management token.
WLF says the success of the proposal will increase the liquidity of the stablecoins it plans to host, Ether (ETH) and bundled Bitcoin (WBTC), as Aave expands its user base.
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RedStone, backed by Arrington Capital, has launched talks to settle on Bitcoin.
On October 8th, Redstone Oracles, a provider of oracle data for smart contracts, launched an oracle designed to explicitly leverage Bitcoin (BTC) staking.
The new implementation allows users to exchange BTC for BTC-based liquid-stacking tokens (LSTs) on the Ethereum blockchain, such as Lombard Stacked BTC (LBTC).
Marcin Kasomirchak, co-founder and CEO at RedStone, told Cointelegraph that the development showed for the first time that BTC LSTs can be used for loans and other uses in DeFi.
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EigenLayer eyes consumer adoption post-EIGEN opening, says the founder
On October 7, EigenLayer founder Sreeram Kannan told Cointelegraph that the protocol will be prioritized in consumer Web3 applications after opening its native EIGEN token from October 1.
According to Kanan, EigenLayer will initially target applications in crypto-native segments, including Defin and games, before expanding beyond Web3.
We'll start with an inside-out approach, focusing on high-end consumer applications like DeFi and gaming, but once we grow a bit and gain critical mass, we'll go outside and start targeting broader consumer markets.
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Overview of the DeFi market
According to data from Cointelegraph Markets Pro and TradingView, the 100 largest cryptocurrencies by market capitalization ended the week with both gains and losses, still recovering from early October losses.
Of the 100, Coinbase's Wrapped Staked ETH (CBETH) token was the biggest gainer of the week, rising 38.29%, followed by Zcash (ZEC), which rose 29.85%.
Total value is locked in DeFi. Source: Defillama
Thanks for reading this week's roundup of the most impactful DeFi developments. Join us next Friday for more stories, insights and lessons about this dynamic and evolving space.
