DeFi pays dividends? 💲

GM, Tim here.

• Ethena could start paying revenue to token holders.

• Vitalik Buterin sees a larger purpose for prediction markets.

• Donald Trump’s election win has done little for his DeFi project.

Ethena’s fee switch 🔘 

More DeFi protocols could start sharing revenue with token holders ahead of clearer crypto rules under the coming Trump administration.

The crypto collective behind stablecoin issuer Ethena is the latest such case.

Market maker Wintermute has proposed Ethena set up a committee to look into sharing a portion of the protocol’s revenue with ENA token stakers.

Ethena DAO members broadly support the idea.

The move will strengthen Ethena’s position, and shouldn’t encounter any regulatory hiccups given Donald Trump's incoming administration, DAO member Nickolas Tazes said in response to the proposal.

Ethena isn’t the only protocol considering turning on its so-called fee switch, either:

• Arbitrum DAO is working on a fee sharing and governance token staking system.

• Uniswap is considering sharing revenue from its upcoming layer 2 blockchain with UNI token holders.

Previously, DeFi protocols worried that distributing profits to token holders may violate US securities laws.

With Trump returning to the White House, crypto rules that will allow for such revenue sharing structures could be just around the corner.

Vitalik on prediction markets 🔮 

Ethereum co-founder Vitalik Buterin is taking deeper look at prediction markets, outlining a concept he calls “info finance” in a new blog post.

Buterin argues that Ethereum can improve on prediction markets by aligning financial incentives with accurate information generation.

In his vision, info finance encompasses prediction markets as well as a larger class of applications that could enhance governance, social media, science, and decision-making.

Buterin also envisions integrating AI-driven micro-markets into Ethereum, making prediction markets accessible even for low-stakes questions typically overlooked due to insufficient participation.

Info finance follows six previous posts from Buterin exploring potential futures for Ethereum, outlining user-focused enhancements like reducing the cost to run validators and improving layer-2 interoperability.

WLFI sales flatline 💀 

Trump’s victory in the US presidential election has overall been a boon for the crypto market.

But there’s been one notable laggard: Trump’s own crypto project, World Liberty Financial.

Since the election, the protocol’s cumulative profit from sales of its token, WLFI, are up 4% to $15.4 million, according to onchain data compiled by Dune user Seoulcalibur.eth.

The president-elect’s pro-crypto stance and ties to the project have done little to overcome factors that have limited its appeal to investors.

Most notably, it is unclear whether the token will ever have a monetary value.

WLFI tokens will be “locked” until investors vote to enable trading, according to a “gold paper” — a Trumpian spin on the crypto practice of releasing white papers that provide an overview of new protocols.

Even if WLFI tokens do become tradable in the future, the implied $1.6 billion valuation at which the project is selling them for may leave little upside left for investors.

This week in DeFi governance ⚖️ 

VOTE: GMX looks to update its liquidation mechanics on V2 version

VOTE: ZKsync’s DAO votes on liquidity hub grants programme

VOTE: Stargate DAO votes to launch on Ethereum layer 2 Mode

Post of the week 💥 

With crypto soaring, market watchers think back to the signs of excess that marked the top of the previous bull run.

Got a tip about DeFi? Reach out at [email protected].

DL News is an independent news organisation that provides original, in-depth reporting on the largely misunderstood world of cryptocurrency and decentralised finance. From original stories to investigations, our journalism is accurate, honest and responsible.

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