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GM, Tim here.
Pump.fun is in decline.
New analysis finds “shocking” concentration of power in DAOs.
Compound’s Robert Leshner is bullish XRP DeFi.
Pump.fun plummets
Users are evaporating from top memecoin platform pump.fun after a spate of controversies and a ban from the UK’s financial watchdog.
On November 20, the number of memecoins created in a 24 hour period hit an all-time high of 69,000. Now, that number has more than halved to just 33,000.
Daily active users, which peaked at 261,000 on November 29, are now down to 161,000 — a 38% drop.
Other key metrics — such as fees, revenue, and trading volume — have also nosedived.
The decline could signal the beginning of the end for one of the biggest drivers of crypto attention this year.
In 2024, memecoins created on pump.fun minted millionaires and helped slingshot the Solana blockchain to an all-time high in user activity.
To be sure, many memecoins that predate pump.fun are still soaring.
But the platform has in recent months been marred by controversy.
Anyone can create a memecoin on pump.fun. There are no checks, and users often choose to stay anonymous. Racist memecoins, dangerous stunts, even a fake suicide have all brought negative attention.
After pump.fun disabled its livestreaming feature on November 25, revenue dropped 33%.
Since then, the UK’s Financial Conduct Authority has warned pump.fun isn’t authorised to operate in the country, and blocked the platform.
Are DAOs decentralised?
DeFi protocols aren’t as decentralised as they appear, a new analysis from the Cambridge Centre for Alternative Finance finds.
The University of Cambridge-based research institute examined the level of centralisation among the 10 biggest decentralised autonomous organisations — or DAOs — as part of the launch of its new DeFi analytics tool, the Cambridge DeFi Navigator.
Among the DAOs analysed, the consolidation of power was “shocking,” Christopher Jack, the Cambridge DeFi Navigator programme lead, told DL News.
Jack’s team applied the Gini coefficient — a widely used metric for assessing income or wealth inequality within a population — to evaluate the concentration of power within DAOs.
The analysis found that the DAOs behind DeFi protocols exhibit levels of power concentration comparable to the world’s most unequal countries, with governance often dominated by a few large players.
“When I speak to industry participants, they’ve all said to me governance is quite concentrated in the hands of a few large players,” Jack said. “That’s really what you see here as well.”
Leshner’s XRP bet
Robert Leshner, one of the earliest DeFi founders on Ethereum, is now looking to back crypto entrepreneurs building DeFi apps on the XRP Ledger — Ripple’s answer to public blockchains like Ethereum.
“What makes DeFi on Ripple exciting is the massive retail userbase they’ve built, even in the absence of onchain applications,” he told DL News.
Leshner launched Compound Finance in 2017, one of the very first lending protocols on Ethereum.
There’s just one problem.
The XRP Ledger doesn’t yet have generalised smart contract programmability, making it difficult to develop on.
That’s expected to change with the launch of the Ripple EVM sidechain, which would make the network a lot more like Ethereum.
Leshner wants to be there before it arrives.
“We see it as an inflection point for the arrival of DeFi on Ripple,” he said. “We’re interested in meeting teams building for Ripple DeFi in advance of its readiness.”
This week in DeFi governance
VOTE: Across DAO mulls bridge support for Kraken’s Ink blockchain
VOTE: Arbitrum DAO elects members for its research and development collective
VOTE: BNB Chain votes to enable new token recovery feature
Post of the week
Crypto Twitter weighs in on quantum computing after Google unveiled its new Willow chip.
Quantum computing has been “right around the corner” for like 30 years. Same with “the next 1 billion users” and “a non-ponzi use case.” No need concern to ourselves with these things.
— Gwart (@GwartyGwart) December 9, 2024
Got a tip about DeFi? Reach out at tim@dlnews.com.
