Welcome back to The Breakdown, an everyday analysis breaking down the most important stories in Bitcoin, crypto, and beyond, with your host, NLW.

The Breakdown is distributed by CoinDesk.

Welcome back to the Breakdown.

It is Wednesday, January 15th, and we are going to be talking first today about Defi,

what it did during the rally yesterday and what it might look like for Defi's interplay

with the rest of the industry throughout this year.

Second, we're going to almost have a cautionary tale and look at what's going on from a slightly different lens and ask whether this rally is really the banner headline or whether there's still big questions for the industry underlying.

And third, and finally, we're going to look at a story coming out of the UN warnings about a Korea or North Korea-based blockchain conference and ask about

an emergent or maybe perhaps better put underlying narrative around rogue state money and

ask to what extent we should be worried about this. But first, let's dive in on Defy.

So yesterday at 10 a.m., Defy Pulse tweeted out,

New all-time high for Defy, strap in because the year has just begun.

They pointed out a graph that said 739.5 million had been locked in Defy.

That number continued to rise throughout the day.

Camilla Rousseau, who runs the Defiant, wrote $1 billion held in Defi by quarter one.

TVL approaching $800 million today, a record driven by ETH USD rally, but also by net increase of assets locked.

So what's going on?

Part one of the rise in DeFi simply has to do with the Ethereum price. The value of

USD locked in Defi, if we're denominating that in Ethereum, is going to rise naturally as the

price of Ethereum rises. But the second part of the story is about the way that people were using

defy as a way to go participate in other parts of the market as they started to soar.

So yesterday, Brady Dale on Coin desk wrote, traders turned to defy to capitalize on Tuesday's

...