A positive reaction was observed within the DeFi ecosystem after the successful completion of the Shapella upgrade this week.
Prior to the recent update of the Etheruem network, some predicted that the mass sale of the ETH stack would negatively affect its market price. But in the end the opposite happened. Despite the lack of significant amounts of ETH on Thursday and Friday, its trading price remained elevated, reaching an eleven-month high.
The price of DeFi tokens such as UNI and AAVE also reflects the overall market’s optimistic response to the Shapella upgrade. Both assets have seen their prices rise along with Ethend in the coming months, the DeFi ecosystem will continue to adapt to the new changes.
One potential effect is a reshuffling of the Ethereum deck as investors look to redistribute their previously locked assets. With Ether holders now able to easily unsubscribe and restore as part of a different pool, decentralized exchanges could become the beneficiaries of any such change. Likewise, more Ethereum-based assets can now flow to different decentralized protocols.
Olympus DAO supports more exposure to decentralized assets
So far, decentralized organizations are reacting positively to the new Ethereum model. For example, Olympus DAO on Friday voted in favor of an amendment Cabinet frame. After the changes, Olympus Treasury, which supports OHM tokens, is now able to hold more “volatile assets” such as Ether.
Previously, Olympus’ treasury consisted of about 79% of stable assets and 21% of volatile assets. But the new framework adjusts the ratio to just 75% of stablecoin holdings.
The proposal approved by the treasury team at Olympus states that increasing exposure to ether is one step in the direction of ending its reliance on centrally backed stablecoins. However, she acknowledges that there is also a need for more focus on purely decentralized stablecoins.
To that end, the new framework increases the cap on holdings of the decentralized stablecoin LUSD to 10%. In line with the changes, Olympus DAO hopes to reduce its exposure to centralized stablecoins by more than 10%.
Aiming to further move away from centrally managed assets, the treasury team said that as Olympus matures, the DAO should reassess these ratios every six months. “This may include increasing exposure to ETH or introducing more purely decentralized stablecoins as they become available,” a statement noted.
The Securities and Exchange Commission moves to regulate the DeFi ecosystem
The news that Chabela’s upgrade is going smoothly comes as the US Securities and Exchange Commission (SEC) moves to regulate decentralized exchanges.
On Friday, the Securities and Exchange Commission voted to approve an updated proposal to regulate cryptocurrency exchanges first published last year. The recent changes include a number of tweaks that seem to target DeFi platforms specifically. And updated definitions could bring a lot to the agency’s regulatory scope.
Although the SEC approved the new amendments, it was not unanimous in its decision. The two commissioners, Hester Pearce and Mark Ueda, voted against making changes to the proposal.
During an open meeting before the vote, Pearce argued that the new script “multiple the flaws” of the original. Furthermore, it warned that the proposed rules could place limits on decentralized governance which is critical to DeFi. “Have we thought about how centralizing might benefit the American public?” she asked. “It seems perverse to me that we would encourage centralization,” Pearce added.
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