A positive response has been seen in the DeFi ecosystem following the successful completion of this week’s Shapella upgrade.
Prior to the latest Ethereum network upgrade, some speculated that the massive sell-off of staked ETH would negatively affect its market price, but in the end, the exact opposite happened.
Despite the large volume of ETH not being staked on Thursday and Friday, its trading price was still supported to hit an 11-month high.
The prices of major DeFi tokens like UNI and AAVE also reflect the overall market’s optimistic reaction to the Shapella update. Both assets have seen their price increase with Etend in the coming months, the DeFi ecosystem will continue to adapt to the new changes.
A probable implication could be Ethereum’s reshuffling of the card game as investors look to redeploy their previously locked assets.
Now that Ether holders can delete and stack again as part of a diverse pool, decentralized exchanges could become the beneficiaries of such a reorganization. Likewise, many Ethereum-based assets can now migrate to various decentralized protocols.
Olympus DAO Backs Greater Exposure to DeFi Assets
So far, decentralized organizations are responding positively to the new Ethereum model. For example, on Friday, the Olympus DAO voted in favor of the revised treasury framework. Following the changes, the Olympus Treasury, which supports the OHM token, can hold more “volatile assets” like Ether.
Previously, Olympus’s cash position consisted of approximately 79% of stable assets and 21% of volatile assets. But the new framework adjusts the rate down to just 75% of stablecoin holdings.
The proposal approved by the Olympus treasury team indicates that increasing exposure to Ether is a step in the direction of ending reliance on centrally-backed stablecoins. However, he acknowledged that there is also a need to focus more on fully decentralized stablecoins.
As a final point, the new framework upswings the holding limit for decentralized stable coins LUSD to 10% as part of these changes, Olympus DAO plans to reduce its exposure to centralized stablecoins by more than 10%.
In an effort to move away from centrally managed assets, the treasury team said that as Olympus matures, the DAO should reassess these ratios every six months. They indicated that “This could include increasing exposure to ETH or introducing more pure decentralized stable coins as they become available.”
SEC Moves to Regulate the DeFi Ecosystem
News that the Shapella update went smoothly comes as the U.S. Securities and Exchange Commission (SEC) moves to regulate decentralized exchanges.
On Friday, the SEC voted to approve an updated proposal on cryptocurrency exchange regulation first publicized last year. The latest changes include several that appear to specifically target DeFi platforms, and updated definitions could bring more people into the scope of the committee’s rules.
Although the SEC approved the new amendments, their decision was not unanimous. Two commissioners, Hester Peirce, and Mark Uyeda, voted against the changes to the proposal.
In a public meeting before the vote, Peirce argued that the new text “duplicates the flaws” of the original text. Additionally, he warned that the proposed rules could impose limits on the decentralized governance that is the foundation of DeFi.
“Have we thought about how forced centralization will benefit the American public?” she asked. To me, it seems wrong that we are promoting centralization,” added Peirce.
By Marina Meza
