A previous Compound proposal for COMP yield farming caused a mess in the DeFi market, pushing users to yield farm only in the markets with the highest interest rates. This has caused Compound to soak up over 80 percent of BAT’s liquid supply, reducing the amount borrowed from other protocols such as UADT, WBTC, and ETH. A patch implemented on Jun. 27 managed to resolve the issue.
High-interest rates led to 80% of BAT to end up in Compound
Decentralized liquidity provider Compound has seen its popularity increase with the launch of yield farming, reaching $1 billion in total supply and over $383 million in total borrows. However, the protocol’s massive success brought some of its problems to light, showing that it over-incentivized certain behavior on the platform.
The current COMP distribution system, introduced in proposal no. 10, has two major issues, the first and less important one being a slight issue with flash loans. The second, more major problem, involves the protocol incentivizing users to lend to whichever money market has the highest interest rate.
While this wouldn’t be a problem if the interest rates across various markets remained relatively the same, a huge discrepancy arose when the interest rates for lending the Basic Attention Token (BAT) jumped to the top of the board.
The huge increase in new users meant that the majority of them naturally gravitated towards BAT, which led to Compound soaking up over 80 percent of BAT’s liquid supply.
According to data from DeFi Rate, $319 million worth of BAT out of the $391 million in liquid supply is currently locked in Compound.
New COMP distribution patch fixing issues with high-interest rates
To mitigate this issue, which led to other cryptocurrencies being drastically less represented in yield farming, a new patch was proposed. The proposal, which is the 11th patch issued on Compound, was introduced by Compound Labs CTO Geoffrey Hayes and it addresses both of the above-mentioned problems.
Hayes’ proposal aims to address the risky yield farming by removing the “interest accrued” metric that’s used to allocate COMP tokens across various markets on the platform. Instead of using the accrued interest, the protocol will allocate COMP to markets proportional to the users’ demand for borrowing each asset. This, it explained in the official proposal, should remove the incentive to push markets into “extreme levels” of utilization and prevent yield farmers from gathering in a single market, as is currently the case with BAT.
The patch will affect all borrowers as they’ll receive the same amount of COMP no matter how high the interest rate they’re borrowing at is. Data from Compound has shown that the patch, implemented on Jun. 27, had an immediate effect on the distribution of COMP and has effectively resolved the issue. Nonetheless, the event highlights the need for tight control mechanisms when it comes to yield farming as more and more people enter the market unaware of the risks it carries.
According to the latest paper from Strix Leviathan, Bitcoin’s popular stock-to-flow model is fatally flawed and nothing more than a marketing piece. The quantitative investment management company published a paper detailing several major errors in PlanB’s original analysis, calling it a “chameleon model.”
Bitcoin’s stock-to-flow model stands on a shaky empirical foundation
Despite its popularity in the Bitcoin community, the stock-to-flow model is fatally flawed. These are the words of Nico Cordeiro, the chief investment officer and fund manager at quantitative investment management company Strix Leviathan.
In his latest paper, Cordeiro took a deep dive into the model first popularized by anonymous investor and crypto personality PlanB, highlighting the mistakes made both in the model’s theoretical assumptions and empirical foundation. According to him, the model is based on the assumption that for the USD market capitalization for monetary goods such as gold and silver is derived directly from their rate of new supply.
However, no evidence or research is provided to support the idea in the original stock-to-flow Bitcoin model, Cordeiro said:
“No evidence or research is provided to support this idea other than the singular data points selected to chart gold and silver’s market capitalization against Bitcoin’s trajectory. “
Aside from that, the paper suffers from what Cordeiro calls a “naïve application of a linear regression.” As the S2F model presents incredibly “good” results, many have taken it for granted without diving deeper into the model. Good results alone, however, don’t constitute a meaningful finding and PlanB’s stock to flow model is full of “bias and data dredging.”
Scarcity predicted in S2F has no relationship with value
The paper then went on to note that what PlanB defines as “scarcity” in his original model is different from the true meaning of the word—he uses “scarcity” to describe an asset’s supply growth rate as measured by the stock-to-flow metric. This way of using the word assumes that increasing new supply causes increased selling pressure from producers.
While the assumption is reasonable, it contradicts the fact that a high stock-to-flow ratio means that new supply is insignificant to the current supply. With this in mind, Cordeiro said that it’s not surprising that the SF ratio had no direct relationship with the value of gold in the past 115 years. Gold’s market capitalization ranged from $60 billion to $9 trillion with its SF value remaining stable at around 60.
“While a higher SF value may be a necessary feature for a commodity to serve as “hard money”, the metric itself says nothing about how market participants value said commodity,” it said in the report.
Aside from that, the very fact that the model estimates each of the 21 million bitcoins in existence will be worth $235 billion by 2045 makes this model unrealistic. Therefore, investors should be highly skeptical of the stock-to-flow model even if they do see Bitcoin as “digital gold,” Cordeiro concluded in the report.
With the state of the crypto industry often being distilled down to the performance of two its largest cryptocurrencies, many other altcoins unfairly get forgotten when analyzing the state of the broader market.
There are two days left before the second quarter of the year comes to an end, but it’s not too early to tell which cryptocurrencies experienced the biggest price rallies in the past three months. According to the latest weekly report from IntoTheBlock, the title of the best performing asset went to Bancor (BNT), a smart token liquidity provider, which was followed closely by Swiss cyber bank SwissBorg (CHBS).
At current prices, Bancor’s price is up 500 percent since Apr. 1, with the coin reaching its YTD high of $1.19 on Jun. 24. BNT currently trades at $1.08.
SwissBorg, on the other hand, saw its price increase nearly 400 percent in the past three months, reaching an all-time high of $0.14435 on Jun. 22. CHSB currently trades at $0.112.
Both top performers show a negative correlation to Bitcoin
Aside from tracking the increase in price both of these tokens saw, IntoTheBlock’s report revealed another interesting metric both of the quarter’s top performers share—correlation to Bitcoin.
While most of the crypto market tends to move alongside Bitcoin, there are often outliers that tend to go against the tide.
IntoTheBlock’s analysis calculates the 30-day price correlation between the price of a token and the price of Bitcoin. A correlation coefficient (R) between 1 and 0.5 indicates a strong correlation between the token’s price and Bitcoin, which means they tend to move in the same direction. A correlation below 0.5 points shows that there’s a moderate to low correlation, while a negative correlation shows that the token’s price movements move in the opposite direction of Bitcoin.
Out of the two, Bancor seemed to be the one most correlated with Bitcoin, despite seeing its R coefficient dropping to as low as -0.28 on Jun. 25.
Coinbase recently announced it is considering listing Bancor along with 12 other cryptocurrencies.
SwissBorg, on the other hand, currently has a correlation coefficient of -0.32, showing that there is evidence of a slight inverse relationship between its price and Bitcoin.
Cardano’s proof-of-stake protocol is set to bring about unprecedented decentralization, but the mechanisms that drive it are still a mystery to many. Cardano’s chief scientist professor Aggelos Kiayias dove deep into Ouroboros and detailed the principles on which the ambitious protocol is based on.
The problem of building decentralized systems
Persistence and liveness—these are the hallmarks of successful distributed ledger systems, according to professor Aggelos Kiayias, the chief scientist at Cardano. However, it seems that systems based on the simplest premises are the hardest ones to deliver.
Kiayias dove deep into the problems decentralized systems face and provided a detailed view on how Cardano’s Ouroboros managed to solve those problems.
The persistence and liveness he mentioned are a promise of a consistent view to all participants of a system and a guarantee of responsiveness to the continuous flow of events that result from their actions. This is fairly straightforward and easy to achieve in a centralized system, but gives the system a single point of failure and makes it vulnerable to attacks.
Designing a robust decentralized system is a much more complex task, as they require developing models that systematically encompass all the different threats the system might encounter and prove that both persistence and liveness are upheld at all times.
Therefore, a well-designed decentralized system will continue to function even if some of the parties in it deviate from proper operation. The system should be designed in such a way that it could handle even more significant deviations in its operation without suffering too much damage.
A reliable decentralized system would combine formal guarantees against various types of failure and attack models, with the biggest and most important class of failure being the Byzantine models.
Byzantine models guarantee that the persistence and liveness of the system will be maintained even if a large part of participants in the network arbitrarily deviate from the network’s rules. The second, but equally important class is models of rationality, which assumes that all participants of the network are rational utility maximizers which is why the properties of the system should arise from their pursuit of self-interest.
Analyzing Ouroboros through two types of behavior
According to Kiayias, what makes Ouroboros unique as a protocol is the fact that it combines various design elements that consider both Byzantine and rational behaviors described above.
Namely, Ouroboros uses stake as the primary resource to identify the leverage participants have in the system. Apart from being resistant to attacks native to Proof-of-Work protocols, such as the 51 percent attack, staking makes Ouroboros more environmentally friendly as it requires minimal physical resources to run.
Ouroboros also guarantees the dynamic availability a proof-of-work system never could—Kiayias said that the protocol continues to operate even if an arbitrarily large number of participants decide not to stake and maintain the ledger.
“Of those participants who are active, barely more than half need to follow the protocol—the rest can arbitrarily deviate,” he wrote in the blog post.
In fact, Ouroboros could even tolerate spikes above the 50 percent threshold as long as they don’t last too long. This flexibility allows Ouroboros to be more resilient and adaptable than the classical Byzantine fault tolerance protocols and their model adaptations. These protocols need to have a relatively certain prediction of the participation they expect from the network in order to work—any deviation could easily cause them to stop operating.
Another thing that sets Ouroboros apart from other PoS protocols is its trustlessness. Kiayias explained that the process of joining and participating in the protocol doesn’t require the availability of any special shared resource such as a checkpoint. When engaging in the protocol requires nothing more than the public genesis block of the chain and access to the network, it eliminates the point of failure that is a trusted shared resource.
But, no matter how advanced these features are, it takes more than a well-designed network to attract users. This is something that IOHK spent a lot of time and effort on when designing Shelley, Cardano’s proof-of-stake era. Knowing that a well-oiled machine is essentially worthless without someone driving it, Cardano introduced a fairly advanced rewards mechanism.
While payouts for those staking their coins on the network are nothing new, Ouroboros incorporated a reward-sharing mechanism that incentivized network participants to organize themselves in operational nodes. These nodes, known to most as stake pools, offer a quality of service independently of how stake is distributed among the user population, Kiayias said:
“In this way, all stakeholders contribute to the system’s operation – ensuring robustness and democratic representation – while the cost of ledger maintenance is efficiently distributed across the user population.”
However, encouraging the creation of organizations can inadvertently lead to centralization. This wasn’t overlooked when designing Ouroboros, which comes with its own set of countermeasures that de-incentivize centralization. With a tight control over stake pools, the protocol prevents a situation in which only a handful of operators would be responsible for maintaining the blockchain.
There’s more to Ouroboros than meets the eye
While the developments inside Cardano seem to be happening at lightning speed recently, in reality, work on the protocol began all the way back in 2015 when the blockchain was first announced. Scratching the surface reveals an almost incredible amount of research that went into Ouroboros, which is something Kiayias proudly described in his post.
He noted that the design elements of Ouroboros were never to be self-evident to the average protocol user. Instead, they were delivered in peer-reviewed papers with meticulous documentation attached to them. All of the papers published on Cardano, of which there are so far more than 50, have appeared both in conferences and publications in the area of cryptography and cybersecurity.
Each of those papers is explicit about the specific types of models used to analyze the protocol and lays out the results derived from them in concrete terms.
“Building an inclusive, fair and resilient infrastructure for financial and social applications on a global scale is the grand challenge of information technology today.”
This is why Ouroboros is considered to be a game-changing protocol in the industry—not only does it present unique characteristics available to all through its open-source code, but also in presenting a design methodology that highlights first principles, modeling, and analysis.
Akoin, the Stellar (XLM) based blockchain network and cryptocurrency developed by artist Akon, has partnered with healthcare solution provider Jeev to help improve access to healthcare to millions of people in Rwanda and the rest of Africa.
In a press release shared with CryptoSlate, the company said that it plans to digitize patient health interactions by putting them on a blockchain.
Akon’s blockchain company plans on digitizing healthcare in Africa
Akoin, a digital asset platform founded by global artist and crypto investor Akon, has been expanding its presence in Africa in the past few months, a move that has pushed the company out of relative obscurity into the forefront of blockchain development on the continent.
And now, the company has turned to healthcare by establishing a partnership with Jeev, a blockchain-based platform used to connect patients with healthcare professionals.
The company said that the partnership is a natural extension of Akoin’s goal to improve social opportunities and access to financial services to countries across the African continent.
The partnership will allow Jeev to use the Stellar-based Akoin token to provide its blockchain-based medical service for digitizing healthcare across the entire patient life-cycle—from in-person interactions with doctors and patient records, to diagnostics.
Dr. Sanjeev Kaila, a U.S.-based surgeon and founder of Jeev, said that the Akoin token will power all of the financial and reward exchanges throughout the Jeev platform and enable the service to expand its reach across Africa:
“Offering the Jeev application within the Akoin platform extends our reach beyond Rwanda into other countries throughout Africa, together improving the quality and cost of healthcare in developing countries.”
Akoin’s powerful relationships across Africa
Jon Karas, the co-founder and current president of Akoin, said the company was very proud of its partnership with Jeev and was looking forward to bringing digital healthcare services to the broader masses together.
When considering what the best way to make the biggest social impact is, Akoin looked at businesses and business models that allowed both for growth and sustainability. Jeev, Karas said, was a natural choice as it enabled Akoin to provide and scale healthcare services to critically underserved areas of Africa.
Akoin has been establishing major partnerships across Africa—it announced that it was to become the main currency for the Mwale Medical and Technology City (MMTC) in Western Kenya earlier this year and has pushed forward with the plans to build the eponymous Akon City in Senegal.
The company awarded the contract for building and executing the $6 billion futuristic city to KE International, a U.S.-based consulting and engineering firm. The firm, which secured $4 billion from investors for the first and second phases of Akon City, was also responsible for the design and execution of the Mwale Medical and Technology City (MMTC), set to be completed in December 2020.
Blockchain network Digibyte (DGB) has seen the price of its native token DGB skyrocket after it was listed on Binance earlier today. The exchange listed the token without any demands from the company and without requiring a listing fee, DigiByte said on Twitter.
Binance announces it has listed DigiByte
DigiByte, a decentralized cryptocurrency network that sought out to compete with Bitcoin back in 2013, has just been listed on Binance.
The exchange announced the news in a blog post earlier today, saying that trading for DGB will be open at 2:00 PM UTC. Binance’s users will be able to trade DGB against three pairs—DGB/BTC, DGB/BNB, and DGB/BUSD.
This is a huge step forward for the company, as this isn’t the first time Binance mulled listing DGB. DigiByte’s founder Jared Tate reported in September last year that Binance requested a $300,000 listing fee and 3 percent of all DGB in circulation in order to list the coin. The exchange reportedly said that the percentage of the circulating supply would be used as “insurance” for their customer against hacks and defects.
Being listed on a trading platform as big as Binance is a huge deal for DigiByte. Despite being one of the oldest cryptocurrencies, created way back in 2013, the network struggled to gain mainstream adoption and find its place on some of the larger exchange platforms.
The coin reacted strongly to the listing, seeing its price increase by almost 30 percent less than two hours after the news broke, jumping from $0.017 to $0.022.
DGB is currently trading at $0.0233 but is still trading 83.6% lowe than it’s ATH of $0.135 on Jan. 6 2018.
While the enthusiasm seems to have died down around the $0.022 mark, forcing DGB to enter into a consolidation phase that will result in a more realistic price, it certainly managed to lift the coin out of the rut it entered in the second half of June.
Cardano (founder) Charles Hoskinson discussed the time and effort that has been put into developing Cardano, saying that the bulk of the work needed to launch it has already been done, in an interview with Messari’s Ryan Selkis. However, despite constant comparison with Ethereum, he believes that there won’t be any winners in the space for a long time, as the industry is now in the same state the internet was in 1991.
Recapping six months of hard work
After a hugely successful shipping of the Shelley testnet, Cardano has entered into the last stage of the race towards complete decentralization. Once Shelley, the era of the Cardano blockchain that will enable staking, is launched, the blockchain will have transitioned from a static and federated system to a dynamic and decentralized one.
In an interview with Messari’s Ryan Selkis, Charles Hoskinson, the CEO of IOHK, looked back on the effort that has been put into the project so far. The outspoken creator of Cardano said that it has been incredibly gratifying to see the products of five years of painstaking work finally come together all at once.
This year has been going great, he said, as the company has been hitting all of the benchmarks and deadlines it set. The same couldn’t be applied to the past two years, Hoskinson explained, as Cardano kept facing hurdles on every corner. These hurdles, which were a consequence of having two separate teams working on Cardano simultaneously, helped it become notorious for being “slow.”
Nowadays, however, speed and efficiency seem to be the only epithets that could describe developments at Cardano. Hoskinson said that the mainnet candidate for Shelley will be shipped as early as Jun. 30 if everything goes well with the testnet. Shelley will be turned on on Jul. 29, while all registered staking pools will be able to begin mining pools as early as Aug. 18.
To fill up a tiny open slot between major releases, IOHK organized the Cardano virtual summit, which will take place on Jul. 2 and Jul. 3. The event, Hoskinson revealed, will see everyone from heads of state and government officials to partners from the Wyoming research lab and IOHK’s commercial partners come together to discuss Shelley. But, with most of the major points of the impending mainnet launch already covered, the speakers will also focus on Cardano after Shelley—its UTXO, Plutus, smart contracts, etc.
Cardano virtual summit will also host one of the founders of the internet—Vint Cerf.
An upper hand built on formal methods
None of this happened overnight—Hoskinson explained that Cardano began its journey with a competitive advantage provided by the Haskell programming language. While using Haskell requires a huge up front in terms of tooling and development cost, it pays out later as it requires 5 to 10 timeless less code than C++ or Java programming languages do.
This kind of research-first approach enabled IOHK to harness good ideas from the entirety of the scientific community, instead of relying on a single, closed-off group of scientists. This can only lead to the creation of a closed-off system that cannot support cross-chain communication and is a mistake of the 1990s that shouldn’t be repeated.
Diversity of thought is what facilitated a rather unusual approach to Cardano’s development. The team working on Goguen, the era of Cardano that will bring about smart contracts, has been around for three years, despite smart contracts still being months away.
“They weren’t waiting for Shelley to be done,” Hoskinson said, adding that they have been developing their code parallel to Shelley. The University of Lancaster saw their first papers on Voltaire, the governance era of Cardano, published around the same time.
It took years to formally model Cardano of Bitcoin’s proof-of-work, despite the many shortcomings of the protocol, he told Selkis. Nonetheless, with all its flaws and limitations, proof-of-work actually provided Cardano’s own Ouroboros protocol both with solid fundamentals and the ability to introduce incredible innovations.
This, Selkis noted, is what many believe gives Cardano an upper hand over its competitors, the main one being Ethereum. But, despite its obvious “upper hand,” Selkis believes that Cardano still has a long way to catch up to Ethereum’s network effect. History, he said, seems littered with examples of superior technology losing the race to technology with better network effects.
Hoskinson met the remark with a good deal of annoyance and just a little bit of animosity, not towards Ethereum, but the rhetoric that puts network effect above science.
“It’s the biggest lie ever told in the space.”
There’s no network effect on Ethereum, he explained, not because Ethereum is inherently bad, but because the crypto industry is still so small that it’s virtually pointless to speculate on its effects. For every one dApp created on Ethereum, another thousand are created for mobile phones, a comparison that puts the network’s size into perspective. Being a big fish is, after all, relative:
“You’re a big fish in a very tiny pod next to the ocean.”
He went on to explain that not a single project in the crypto industry has managed to achieve network effect so far and that it will take another decade before any one of them manages to.
This isn’t theory however—Hoskinson went on to explain that the winning blockchain will be the one that best connects on and off chain and maximizes flexibility. Only a flexible blockchain whose protocol facilitates easy onboarding and offloading will be able to host what the industry refers to as “killer apps.” These killer apps, in his words, won’t be payment services, but supply chains, medical records, identity solutions, and voting solutions.
Coexisting, peer review, and plans after Shelley
With this in mind, it’s not at all surprising to hear Hoskinson say that we’re heading towards a world where a fully grown Cardano and a fully grown Ethereum can easily coexist. Any talk of one taking over the other is futile and leads to a toxic and unproductive environment no one can thrive in.
That isn’t to say that Cardano is heading into the battle unarmed.
When asked about how IOHK backs some of the claims it makes about Cardano, such as the protocol being “provably secure,” Hoskinson defended the company’s rigorous screening process.
Calling Cardano “provably secure” doesn’t mean that other proof-of-stake protocols aren’t—it means that peer-reviewed scientific research found proof that the protocol is able to defend itself from a particular adversary. The original paper that modelled Cardano after Bitcoin’s proof-of-work has over 800 citations, providing the company with a rock-solid foundation both in the academic and crypto circles.
All of the paper submitted by IOHK or any of its partnering organizations or scientists have been peer-reviewed, Hoskinson said, taking a jab at the self-proclaimed creator of Bitcoin:
“When we write these papers we don’t just write them and say ‘Here’s the paper, we’ve solved the problem.’ We’re not Craig Wright.”
These peer-reviewed, formally modeled proofs used in Cardano have for sure been an ambitious goal. But, both Hoskinson and the rest of the small army of people working on Cardano seem to be incredibly confident that they will be able to reap success.
He laid out big plans for the next couple of years, with the first major thing they want to focus on issuing assets on Cardano. The existing ecosystem already supports much of the functionality Hoskison would like to see out of this, which is automatic Daedalus support for tokens and an easy way to deploy tokens on exchanges that already list ADA.
The second thing will be making a major play for the Haskell community as a whole and getting them into the Cardano ecosystem. An influx of experienced and ambitious Haskell developers would enable a rich DeFi system to flourish on Cardano, as the blockchain operates from a native Haskell base. More about this will be discussed at the upcoming virtual summit, Hoskinson said, hinting that there will be talks about upcoming hackathons.
And finally, onboarding more stake pool operators to Cardano will be a major goal for the company in the coming months. Hoskinson said that he would like to see people running sustainable businesses on Cardano’s servers, an adoption effort that will most likely first catch on in developing regions such as Africa.
The interview ended on a positive note, with Hoskinson announcing a “pleasant surprise” for everyone regarding the first governance vote set to unravel during the virtual summit.
Cardano (ADA) parent—IOHK has announced that it has released a version of Daedalus for the Shelley testnet. The lightweight Cardano wallet version 1.0.0-STN1 was designed purely for stake pool operator testing and is the first out of many Daedalus releases that is compatible with the Shelly (Haskell) testnet.
Stake pool operators can now test the Haskell version of the Daedalus Wallet
Less than two weeks after opening up the Shelley testnet to all stake pool operators, IOHK has released new functionality for operators to test. According to the company’s announcement, the first Daedalus version for the Shelley testnet was just released. This marks the beginning of a long line of iterations that will be released on the testnet and will eventually become the wallet that all ADA holders will use on the mainnet.
We've just released our first version of Daedalus for the Shelley testnet. This first version is available just for stake pool operators for early functional testing (via GitHub download). Here's the lowdown https://t.co/tFeOZTw9hPpic.twitter.com/jPcZiaRkvA
The newly released version of the wallet, Daedalus 1.0.0-STN1, will offer only basic functionality in order to allow stake pool operators to test it. This release also won’t affect those currently holding ADA, with IOHK saying that they don’t need to do anything for now.
Delegating and transacting on Shelley through Daedalus
The Haskell-optimized Daedalus will allow users to create, delete, and restore Shelley wallets, as well as transact on the network. Funding the Shelley wallet will be available through the Shelley Testnet faucet.
When it comes to accessing Daedalus, IOHK noted that it is only available via the company’s GitHub repository and won’t be open for the general ADA holder. However, future versions of Daedalus will be available through the usual web download.
The company encouraged all interested stake pool operators to download and try the latest version of Daedalus. This, they said in a blog post, will enable the company to get invaluable early input for developing the following versions of Daedalus.
These versions will be released during the Shelley rollout and introduce new features such as viewing stake pools, delegating stake, and checking earned rewards. Support for legacy Byron wallets will also be introduced eventually, allowing users to move their funds from legacy Byron wallets to the new Shelley wallets.
Breanne Madigan, the head of global institutional markets at Ripple (XRP) , believes that institutional money is yet to come to the blockchain industry. In order to attract and then harness the institutional money, the industry will need to achieve a liquidity significantly deeper than it is today.
The crypto market mimics the traditional financial market, only backwards
After suffering a devastating crash in mid-March, the crypto industry has been slowly recovering, with most major digital assets regaining their pre-COVID-19 strength. The fact that the industry once thought to be resilient to financial crashes suffered as badly as they did brought a major problem to light—are cryptocurrencies actually correlated to the broader market?
According to Breanne Madigan, the head of global institutional markets at Ripple, the correlation is there, but its intensity seems to be decreasing with time. In an interview with Ripple’s CTO David Schwartz, she noted that while the beginnings of the crypto industry were rooted in anarchy, its progress follows the historical patterns of traditional markets.
The only difference being that the crypto market seems to be developing backwards.
To make things clearer, Madigan said that while traditional markets were first driven by institutional investors, cryptocurrencies were built on the backs of retail investors. The money from hedge funds, venture capitalists, and banks began pouring into the space almost a decade in.
She went on to explain that traditional markets such as stocks first developed index funds and margin trading, after which they welcomed various other trading products such as leveraged derivatives. The crypto market, on the other hand, went head first into derivatives.
Despite many differences, Madigan said that the two markets share many similarities. Investor demand in both traditional markets and cryptocurrencies is driven almost entirely by speculation at the moment, which is why digital assets had a tendency to move alongside stocks and commodities.
However, putting cryptocurrencies in the same basket as other assets is not only lazy, but entirely wrong. She told Schwartz that cryptocurrencies have now begun to decouple from other markets, most likely as a consequence of the ongoing COVID-19 pandemic.
The pandemic created what Madigan calls “a perfect testnet for cryptocurrencies,” as financial measures such as quantitative easing and negative interest rates have shaken the confidence people have in their governments. Destabilizing fiat currencies has also pushed macro investors into the crypto space, as more companies become cynical towards traditional financial institutions.
Thriving in a state of chaos, cryptocurrencies as an asset class have shown that they can be used as a hedge against inflation and currency devaluation, opening up new use cases and attracting more users.
Where does Ripple fit in?
The abundance of retail users, however, won’t be enough to make cryptocurrencies mainstream, at least in Madigan’s opinion. What will help it gain momentum and reach the masses will be institutional money, she said in the interview.
In order to attract institutional money, the industry will need to achieve what she calls “deep liquidity.” There are four primary attributes to this kind of liquidity, which, if achieved by any single digital asset, would make it a perfect investment vehicle both for retail and institutional players.
The first attribute is low transaction costs, a feature of a network that would attract all kinds of users. Immediacy and resiliency come second, and are followed by breadth. Madigan defined breadth as the number of trading pairs and instruments available for a cryptocurrency that enable its users to move funds. The final, and probably the most important attribute of a liquid cryptocurrency is depth, or the abundance of orders slightly above or below the current trading price of an asset.
An asset with deep liquidity traders with greater frequency and is more attractive both to retail and institutional investors, Madigan said.
When it comes to Ripple’s position in the crypto market, she said that it wants to build products that leverage the kind of liquidity provided by XRP and solve one of the biggest hurdles investors face today—cross-border transactions.
With a real use case, she expects both XRP and other cryptocurrencies will see their liquidity improve significantly. Another thing that will help will be increasing accessibility to cryptocurrencies by creating more ways to trade the asset.
However, there are hurdles ahead, both for Ripple and the rest of the crypto market. Madigan said that creating new institutional-grade products and instruments requires regulation not just in the U.S., but globally as well. The current lack of clarity is a huge problem to everyone in the industry, and it certainly doesn’t help attract regulation-conscious companies into the space.
But, setting laws in stone isn’t the best approach either, she said. The fast pace of the industry requires flexibility governments aren’t very good at.
“Flexibility will be key to account for the different products and also changing technologies. We need clarity from regulators but then we don’t want it to be too prescriptive and specific that we stifle innovation. A number of global jurisdictions have started in a positive way to take the lead around setting frameworks. That’s been extremely helpful, but we need a consistent approach across the globe.”
Having the same set of standards applied across the world will ensure that no country and no business misses out on the opportunities presented by cryptocurrencies and blockchain technology in general. She believes lagging behind global efforts to regulate the industry would prove to be detrimental.
“If the U.S. isn’t fast enough to develop constructive policy, you may see strong innovators and leaders in this space set up their businesses in other jurisdictions.”
Binance, one of the largest cryptocurrency exchanges in the world, will be launching a U.K. platform this summer. The platform will enable both retail and institutional investors fiat on-boarding in GBP and EUR, and will be registered with the U.K. Financial Conduct Authority.
A new Binance platform to launch this summer in the UK
After launching a U.S. only platform in September 2019, Binance will be launching another subsidiary in the next few months, this time in the U.K. The company announced the launch of Binance U.K. in an interview with Reuters, saying that the British subsidiary will be regulated by the U.K. Financial Conduct Authority.
The launch is an answer to an increasing demand from both retail and institutional investors in the country, Teana Baker-Taylor, the newly appointed director of Binance U.K. said.
“Interest and participation in the UK digital asset markets is growing; not just in-depth with its current participants, but also in breadth.”
Partnerships have already been established with the U.K. Faster Payments Service and the Single Euro Payments Area network, which will enable deposits and withdrawals for buying and selling digital currencies through direct bank transfers.
The platform is expected to launch this summer, but the exchange didn’t disclose the exact launch date.
65 different digital assets aimed at retail and institutional investors
When launched, the platform will enable users to trade up to 65 different digital assets, the company said. Both the design and the interface of the platform were devised to attract every kind of investor.
While institutional investors will benefit from Binance’s liquidity and global reputation, retail investors will find the company’s simple interface and easy fiat on-boarding appealing.
Binance said that both institutional and retail investors will be able to buy and sell cryptocurrencies using two different fiat currencies—the British pound and the European euro.
Baker-Taylor suggested that the platform might offer more than just trading services in the future, potentially introducing staking and passive staking in the following months.
Mark Rakhmilevich, the senior director of blockchain product management at Oracle, and Julian Sevilliano, a senior advisor at IBM, will be hosting roundtable discussions on regulation and compliance during the upcoming BlockDown conference. The roundtables will be available to business and VIP ticket holders, while the rest of the conference will be free to attend.
Compliance and regulation will be the main focus on BlockDown’s roundtables
Scheduled to take place from Jun. 18 to Jun. 19, the BlockDown virtual conference will feature some of the most prominent voices in the crypto industry. After a successful conference in April, the company decided to reuse the popular virtual summit format in the upcoming event, where regulation and compliance in the blockchain industry will be the main focus.
While the conference will be free for all to attend, requiring only a quick email registration, those holding higher-tier tickets—the business and VIP deals—will be able to attend the exclusive roundtables.
In a press release shared with CryptoSlate, Erhan Korhaliller, CEO and founder of blockchain PR agency EAK Digital, and organizer of BlockDown, said the roundtables were a way for business and VIP ticket holders to get the ultimate BlockDown experience.
“BlockDown roundtables give business and VIP ticket holders the chance to have their say in the most important discussions surrounding blockchain and cryptocurrency at the moment, including defi and custody.”
Real-time problem solving with IBM and Oracle execs
According to Korhaliller, between six and eight roundtables are planned for the virtual conference, where diverse topics such as decentralized finance, enterprise blockchain, and custody will be discussed.
Oracle’s senior director of blockchain product management, Mark Rakhmilevich, will host one of the roundtables, organizers have confirmed. Rakhmilevich’s session will be called “Lessons from Blockchain Cloud PaaS implementations in Financial Services and Supply Chain projects: Progress and Challenges.”
Julian Sevillano, the senior advisor at IBM’s Promontory Financial group will host a roundtable discussion on regulation and compliance in the blockchain space, as will representatives from blockchain companies Neo and Tomochain.
Those holding VIP tickets will also be able to participate in the exclusive “Mastermind sessions,” where some of the leading voices in the industry, including high-up executives from companies such as IBM and founders of innovative blockchain projects, will participate in live problem-solving.
A week after the Cardano (ADA) Shelley friends and family testnet opened up to all operators, IOHK reported that the network count of stake pools has surpassed 200.
According to the company’s weekly product update, this week is set to see the implementation of Shelley functionality within the Daedalus wallet, as well as minor upgrades to KPIs and the overall user experience of the network.
Hundreds of new stake pools set up on the Shelley testnet
It seems to be that nothing but good news is coming out of IOHK, the company behind the Cardano blockchain. As Shelley, the era of the network set to bring about staking, is being thoroughly tested, the company’s weekly product update has continued the streak of positive reviews and promising launches.
According to the company’s latest update, there has been an overwhelming response from stake pool operators who have joined the testnet after a select group of “pioneers” have gone through all of the network’s functions.
Four days into the testnet, IOHK reported that there were almost 200 stake pools running on the Shelley testnet. While some of the pioneers that have joined the network have set up more than one pool, the company said that this was still a major achievement for the network:
“But to see this number already is testament to the competency and commitment of the Cardano community and the experience we all gained through the build-out of the ITN in the early part of this year.”
Cardano’s latest product update keeps the good news coming
Charles Hoskinson, the CEO of IOHK, praised the new operators and the effort they’ve put in, saying that, come August, there will be hundreds of operators running the network. In a few years, he added, there will be thousands of them.
Hoskinson’s optimistic attitude towards Cardano isn’t baseless, either—the development team has been churning out major updates throughout the past week and has set quite a busy schedule for the weeks ahead.
Most of the development effort last week was focused on the wallet release, set for next week. The wallet back end team has been implementing a set of features that will, in time, allow Shelley functionality within the Daedalus Wallet. Next week, a test wallet will be released to the pioneer stake pools for backend integration testing, IOHK said.
Once the pioneers have tested out features such as creating wallets and funding pledge addresses, other ADA holders will be able to try out the wallet. While the company plans on starting slowly, it said that UI features for Shelley could be implemented sooner than expected. Aside from the wallet, minor updates on the Node CLI and cardano-db-sync have been made.
The next week will mark the beginning of a migration towards a testnet that everyone can get involved with, IOHK said in the product update.
Albert Wenger, the author of the book “World After Capital,” believes that cryptocurrencies will be one of the things that facilitate the move from the industrial age to the knowledge age.
During Messari’s Mainnet conference, Wenger said that he didn’t believe tech companies would willingly disrupt themselves and that the change in paradigm will have to come from smaller companies in the crypto industry.
The connection between attention and cryptocurrencies
According to Albert Wenger, we’re currently living in a world where the most valuable, and as such the most scarce asset, is human attention. The head of venture capital firm Union Square Ventures said that humankind has evolved from having food as its most prized asset to living in a world where one of the most important resources in the industry is awareness.
Attention and its value in today’s world was the main topic discussed between Wenger and Messari’s Ryan Selkis during the virtual Mainnet conference earlier this month. Wenger found an interesting and thoughtful connection between cryptocurrencies and the monetization of human attention:
“Attention is to time what velocity is to speed.”
Speed, he explained, is mostly a worthless metric unless we know the direction in which the object is moving towards. The same applies to attention—we all have an equal and finite amount of time in a day, but it’s not the time that matters. Where we decide to put our focus on during that time is something that can be monetized.
This was a relic of an outdated, industrial-era we’re still living in. Everything from our educational systems to our institutions was made in order to sustain a world that was entering an industrial boom at the beginning of the 20th century, which Wenger believes is long gone.
What we’re entering now he calls the “knowledge age,” an era that will mitigate the discrepancies between rapid tech development and mindfulness.
However, to fully transition to the knowledge era and leave the inefficient relics of the industrial age behind us, three things need to be obtained—psychological freedom, freedom of information, and economic freedom.
Cryptocurrencies, Wenger explained, will play a significant role in at least two of the three aspects.
Applying cryptocurrencies to freedoms
Wenger spent quite a bit of time reflecting on the increased use of mobile phones and tech devices in general, telling Selkis that it’s more than obvious that most have already become slaves to the tech that was supposed to serve them. Achieving psychological freedom doesn’t require any tech solutions—he explained that it’s just a simple realization that our brains didn’t evolve to function in the high tech environment that we all live in today.
While cryptocurrencies can do little to provide the psychological freedom Wenger was referring to here, they will be a major driving force in the rest of the transitional process.
When it comes to economic freedom, Wenger said that he believes the only way to achieve it is “through some form of universal basic income (UBI).” He discussed politics mentioning ex-presidential hopeful Andrew Yang, saying that his message regarding UBI resonated with a lot of people within the crypto community despite disagreements with the rest of his political ideas.
He acknowledged that, while promising, UBI came with a set of its own problems and obstacles. However, he noted that there were a number of different cryptocurrency and blockchain projects that are focused on developing solutions for tracking and distributing basic income.
Aside from facilitating UBI, cryptocurrencies by definition are a step in the right direction when it comes to providing economic freedom. Without a trusted third party and the ability to transact peer-to-peer, it’s safe to say that the very concept of digital assets has changed the way we see economic freedom.
Obtaining freedom of information is where cryptocurrencies and the tech that underlies them will have the most impact in, Wenger said. However, it’s worth noting that the freedom of information he referred to both in his book and during the conference is much more complex than just having the freedom to access information.
He explained that having total freedom of information means having a total control over the systems that surround us. These systems include everything from mainstream media and social media platforms to the government entities tasked with policing them.
None of those platforms, at their current state, are programmable, Wenger explained. Implementing protocol changes to platforms as big and complex as Facebook and Twitter are would require such a deep overhaul that it’s unlikely they would ever happen.
Regulating these entities presents an equally complex problem. Wenger believes that all efforts currently coming from the U.S. government when it comes to regulating Facebook and Twitter are focused on the “wrong kind of impedances.” In his book, he talks about requiring social media companies to have APIs and make them programmable. This, he said, would shift the power from the center of the network back to the end-user.
When asked whether the efforts made by companies such as Twitter, which have been working on open-sourcing their backend and making their platform more transparent, are a move in the right direction, Wenger laughed the notion off:
“I’m not honestly super bullish on waiting for big companies to disrupt themselves.”
He explained that it won’t be existing tech giants that will push the world into the age of decentralization, but cryptocurrency companies and various blockchain initiatives. A sensible approach to regulation combined with intense efforts from crypto companies will be what “gets the job done.”
Nonetheless, he warned that the immense network effect of Facebook and Twitter won’t be beaten by a decentralized competitor. This, as history has shown, stands true—none of the social media platforms, blockchain-based or not, that were marketed as an alternative Twitter or alternative Facebook have succeeded so far.
There is, however, hope. Wenger said that only when the current incumbents are “heavily regulated” and a smart approach was taken when designing those regulations, could the market open up for blockchain-based, decentralized platforms.
The two Ethereum transactions where senders paid millions of dollars in fees for transactions worth as little as $130 are widely believed to be blackmail. According to research from analytics company PeckShield, the hackers were reportedly blackmailing an unknown exchange by sending out transactions with exorbitant fees in order to circumvent the multi-signature security of the exchange and get away with the funds they stole through a phishing attack.
Over $5 Million Paid in Ethereum Transaction Fees
Earlier this week, separate transactions were sent on the Ethereum network that accrued over $5.6 million in fees for the mining pools that processed it. According to data from Etherscan, an unknown wallet sent out transactions worth just several hundred dollars, but paid tens of thousands of ETH in fees.
The news about the exorbitant Ethereum transaction fees spread fast through the crypto community, leading many to believe that it could be more than an honest mistake in which the sender switched the amount they wanted to send with the fee they wanted to pay.
Many prominent voices in the industry noted that this could be a malicious act done by a hacker either to blackmail or cause another type of harm to a company. PeckShield, a blockchain analytics company based in China, believes that this is a classic case of blackmail, where the exorbitant Ethereum transaction fees were actually gas price ransomware attacks.
What Most Likely Happened
According to PeckShield’s report, the “attacks” most likely began when an exchange’s hot storage fell victim to a phishing attack, in which hackers took over the company’s servers. However, as most exchanges have a private key that requires multi-signature verification, the hackers wouldn’t have been able to access its funds and transfer them to their own addresses.
Instead, PeckShield researchers speculated, they realized that there was a group of addresses whitelisted by the exchange where funds could be sent without the need for multi-signature verification. By sending out minuscule transactions with exorbitant fees, the hackers were literally burning the exchange’s funds. According to ChainNews, this was most likely done in order to pressure the exchange to pay a ransom to the hackers.
This, however, couldn’t last forever, as the address taken hostage by the hackers has a balance of 21,000 Ethereum.
While certainly feasible, it’s important to note that this is still only a theory. PeckShield’s report didn’t identify the exchange they believe was affected, nor did they provide any other information about the hackers.
IOHK, the company behind the Cardano (ADA) blockchain, has joined Hyperledger, an open-source community focused on developing blockchain technology. In a press release shared with CryptoSlate, the company said that this will allow it to collaborate with other companies in the blockchain community and further improve Cardano. Apart from IOHK, seven more entities joined Hyperledger yesterday.
IOHK becomes an associate member at Hyperledger
Input Output Hong Kong (IOHK), the company behind the ambitious Cardano blockchain, has announced that it has joined Hyperledger, an open-source community focused on building enterprise-grade blockchain technology.
In a press release shared with CryptoSlate, the company said that becoming part of this consortium will enable IOHK to collaborate with other companies and entities in the blockchain community. Working together with some of Hyperledger’s other members will provide IOHK with an opportunity to refine the architecture of its product and expand its interoperability.
Roman Pellerin, the CTO at IOHK, said that the blockchain community’s overall success will largely depend on its ability to collaborate.
“It’s great to be involved in an organization which shares that philosophy and is working towards utilising blockchain to create a better industry, and more open, accessible world.”
Hyperledger’s 250+ members working together to build new business collaborations
By entering the Hyperledger community, IOHK will be able to tap into its “exceptional wealth of shared knowledge and expertise.” This, Pellerin said, will enable the company to develop new industrial and business collaborations.
Brian Behlendorf, Hyperledger’s executive director, said that IOHK’s “strong vision” for decentralized networks makes it a great addition to its community. The consortium has been adding new members since the beginning of the year, with seven new members joining this week alongside IOHK.
Aside from IOHK, Atomyze by Tokentrust AG, Binarystar, DB Systel GmbH, IOVlabs and Public Mint have all joined Hyperledger this week, while Global Blockchain Business Council and the InterWork Alliance joined earlier this month.
“As our line-up of new members underscore, the Hyperledger community is about putting blockchain to work in impactful ways around the world and across industries.”
Cryptocurrency payments platform Crypto.com has received its own Twitter emoji, not Ethereum. The emoji automatically appears alongside the hashtag #CRO. The company’s native cryptocurrency has become the second coin to receive a designated emoji on Twitter after Bitcoin, a feat that some think is set to bring more recognition to the platform.
Twitter Adds Its Second Ever Cryptocurrency Emoji. It’s Not Ethereum
The second automatic emoji to appear behind a hashtag of a crypto ticker wasn’t Ethereum or another major cryptocurrency such as USDT or XRP. According to the company’s announcement, crypto payments platform Crypto.com now has its own Twitter emoji.
The company, which is set to celebrate its 4th birthday later this month, has seen both its user base and the value of its native CRO token skyrocket in 2020, which is largely due to the fact that they have been introducing new features and pushing new deals almost every month.
While adding a small, colorful graphic that represents the logo or the symbol of a company might not sound like a big deal, it’s widely considered to be a major step for coins and companies in the crypto industry.
Many believe that with emojis comes recognition, both from the platform that enables the emoji and from the platform’s other users who might take interest in the coin or service. The debate around Bitcoin getting its own emoji was a long and tiring one, lasting several years and spanning multiple social media platforms.
Twitter, whose founder and CEO Jack Dorsey is a well-known Bitcoin supporter, was the first to break the ice with the addition of a yellow Bitcoin emoji last year. The crypto community as a whole saw this as such a major step, that a massive, industry-wide joke popped up on Twitter mocking Ethereum and other cryptocurrencies for not getting their own emojis.
Therefore, the addition of a CRO emoji came as a surprise to most, as it was widely believed that an asset with a market cap of almost $27 billion would be the next in line. It remains unclear why the native token of the Crypto.com platform was given its own emoji—some Redditors have speculated that it might have been paid for by the company as part of its larger marketing effort.
Emurgo, a blockchain company tasked with driving the adoption of Cardano, has announced a strategic company with Ergo, a PoW protocol providing financial contracts. The company said that the two will jointly explore stablecoins and financial services applications, while Ergo’s native token ERG will be integrated into Yoroi Wallet.
Emurgo to offer tailored DeFi solutions with Ergo
Following the major developments in the Cardano blockchain, the companies tasked with facilitating its adoption have begun announcing new partnerships and projects that are set to bring Cardano to the masses.
The latest major news to come out of Emurgo is that the company has partnered with Ergo, a proof-of-work (PoW) platform that facilitates financial contracts. Founded by former IOHK engineers, Ergo provides customized privacy for stakeholders on its network.
According to the announcement, the two companies will collaborate on research and development of stablecoins, as well as providing financial services through decentralized applications.
“EMURGO’s strategic partnership with Ergo aligns with the objective to also meet the increasing needs for tailored decentralized financial (DeFi) solutions moving forward,” the company said.
Utilizing Ergo’s private smart contracts
Although over $1 billion in total value is currently locked away in DeFi solutions, both Emurgo and Ergo believe that there is huge potential to grow. Emurgo described its partnership with Ergo as “strategic,” as it will allow it to develop solutions that are in line with the rising demand for DeFi services.
The first major development to come out of the partnership is the integration of ERG, Ergo’s native cryptocurrency, into the Yoroi Wallet. The company’s token will be the first coin aside from Cardano’s native ADA to be supported by Yoroi, a lite Cardano wallet that is set to process various dapps in the future.
“The integration with EMURGO’s flagship Yoroi Wallet will place Ergo before one of the largest user bases in the crypto space,” Ergo core developer Alexander Chepurnoy said in the announcement.
Coinbase is currently exploring the addition of 18 new digital assets, which include DeFi tokens such as Aave, Bancor, Ren, VeChain, Aragon, and DigiByte. The company said that its users could expect more announcements like this in the near future as most of the tokens it mentioned showed growth between 8 and 25 percent in the past several hours.
Coinbase mulls expanding the list of tokens it supports
One of the largest cryptocurrency exchanges in the U.S., Coinbase, could be adding a significant number of new tokens to its platform, a move that would enable the company to grab an even bigger part of the U.S. market.
According to the company’s announcement, Coinbase is exploring the addition “of a range of new assets,” which include 18 DeFi tokens. The announcement warned users that the “exploratory” process required to list such tokens could result in public-facing APIs and other signs of engineering work being done on the platform.
No indication as to when a new asset will be added
While the possibility of these DeFi tokens being listed on Coinbase has certainly affected the market, will all of the 18 mentioned tokens growing between 8 and 25 percent in the light of the news, the company said that it was still uncertain whether they would get listed at all.
Listing tokens requires significant technical and compliance review, as well as regulatory approval in many U.S. states, Coinbase said. Therefore, the company can’t guarantee when any of the mentioned coins would be listed and whether they would be listed at all.
However, if any of these tokens are to be listed, it would happen on a jurisdiction-by-jurisdictions basis, in line with Coinbase’s listing process. The fact that only 18 tokens were mentioned in the announcement doesn’t mean the company will be focusing only on them in the process, it said in the announcement.
“Our customers can expect Coinbase to make future, similar announcements as we continue to explore the addition of numerous assets across the platform.”
The search interest for Cardano (ADA) is the highest it has been this year, data from Google Trends has shown. The rising interest in the promising blockchain platform follows the rise in the network’s on-chain strength and major developments coming from IOHK, all of which indicate that ADA could be up for a bull rally.
More people than ever are talking about Cardano
While the promises made by the platform have remained the same in the past five years, it seems that it took time for Cardano to become the talk of the town. Shelley, the network update that will bring about staking to the platform, is now closer than ever, and will finally pull Cardano from the realm of possibility and push it right at the forefront of the crypto market.
The testnet for Shelley was opened to all stake pool operators earlier this week, bringing a lot of attention to the platform.
Data from analytics company LunarCrush showed that almost 6,000 social media posts mentioning Cardano were published in the past 24 hours alone. The company’s metric measuring overall social engagement showed that there were over 10.7 million posts, comments, retweets, and favorites across all social media.
People search for Cardano as number of addresses grow
It’s not only social media posts that are growing for Cardano. Data from Google Trends has shown that searches for the platform are the highest they have been in the past two years.
All of the online traction Cardano has been getting comes at a time when the network has seen its strength increase significantly. Blockchain analytics firm IntoTheBlock reported on Jun. 6 that more Cardano addresses are holding ADA than ever before, with the metric reaching 385,080 addresses late last week. This count has seen near consistent growth since the 2018 bubble, according to the firm’s data.
This indicates that ADA is becoming less and less concentrated over time, showing that the coins are leaving the hands of whales and going into the hands of more retail users. That isn’t to say that institutional money is ignoring Cardano—as reported by CryptoSlate, the latest ADA surge was most likely fueled by large investors. Data from IntoTheBlock showed that $7 billion worth of ADA, which is more than 300 percent larger than its current market capitalization, was transacted by large-size holders on May 31 alone.
Furthermore, three of the company’s seven core metrics — Net Network Growth, Smart Price, and the Bid/Ask Volume Imbalance — are currently “bullish,” adding to Cardano’s bull case. The overall social sentiment towards Cardano is almost 80 percent bullish, data from LunarCrush has shown, further proving that ADA could be up for an interesting few months.
Viewed as a sector, decentralized finance (DeFi) has shown a much better performance than the broader crypto market. Data has shown that major DeFi projects such as the Kyber Network, Loopring, Aave, and Republic Protocol have all shown significant returns between 165% and 300% this year, vastly outperforming major players such as Bitcoin and Ethereum.
Strong Winners in Ethereum DeFi This Year
While decentralized finance has long been touted as the true driving force of change in the crypto industry, the abundance of projects made it extremely hard to track it as a single sector.
However, data has shown that not only is DeFi as a whole thriving but that the projects built to facilitate decentralized finance have been the best performers this year.
When it comes to year-to-date performance, the absolute leader in returns is liquidity provider Kyber Network, with data from CoinCodex showing its KNC token increased in value almost 313% this year.
LEND, the native token of the Aave platform, increased by 287% since the beginning of the year, while Loopring’s LRC saw its value jump 265%.
These coins have benefited from a parabolic explosion in the number of DeFi users, something that has been observed by crypto investor Spencer Noon.
Graph showing the YTD returns for Kyber Network (KNC), Loopring (LRC), and Aave (LEND). (Source: CoinCodex)
Outperforming BTC and ETH Might Bring More Investments to DeFi
Decentralized dark pool exchange Republic Protocol was also among the top performers in the DeFi sector, showing returns of over 171% since the beginning of the year. Smart contract platform Bancor Network saw its BNT token grow 196% this year, data from CoinGecko has shown, while GNO, the native token of the Gnosis protocol, grew 188%.
On the other hand, two of the largest cryptocurrencies on the market, Bitcoin and Ethereum, have both shown much smaller gains of 32% and 84%, respectively.
Graph showing the YTD returns of Republic Protocol (REN), Bitcoin (BTC), and Ethereum (ETH). (Source: CoinCodex)
And while massive gains aren’t a new thing in the world of altcoins, where some saw returns of several thousand percents during the 2017 ICO boom, the steady growth these projects have experienced might indicate that this is more than a passing fad.
When combined with the fact that DeFi protocols have vastly outperformed the investor favorites Bitcoin (BTC) and Ethereum (ETH), it could lead to more institutional investors coming into the DeFi space both for diversifying its assets and utilizing the projects.
Featured Image from Shutterstock
The market cap of Tether’s dollar-pegged stablecoin USDT has been steadily increasing this year and could soon reach $10 billion. According to the company’s CTO Paolo Ardoino, Tether has minted $5 billion in the past six months alone.
The Market Cap of USDT On Its Way to $10 Billion
The third-largest cryptocurrency and the largest stablecoin in the world, Tether, has seen its market cap grow substantially this year. According to the latest data from crypto analytics company Skew, USDT’s market capitalization currently stands at over $9.3 billion.
The company’s data has shown that half of the growth USDT has seen happened in 2020, with the past two months seeing record upticks.
Graph comparing Bitcoin’s price with Tether’s market capitalization from 2016 to 2020 (Source: Skew)
Market capitalization isn’t the only metric that has seen significant growth—data has shown that Tether recorded 282,000 transactions on Jun. 8. This wouldn’t be major news weren’t it for the fact that Tether surpassed Bitcoin for the first time since its inception, as Bitcoin recorded only 254,000 transactions the same day.
Significant day for USDT on Ethereum yesterday. For the first time since its inception, it had more daily transactions than Bitcoin (282k vs 254k). It's dominating the Ethereum network. Currently, Tether has 10x more transcations than any other ERC20. @paoloardoino @Tether_to pic.twitter.com/RxARMXaT5U
— Vivek (@realvivek_) June 9, 2020
More USDT Printed To Keep Up With Demand
The reason why Tether’s market capitalization has gone parabolic this year is “increased demand.” According to Paolo Ardoino, the CTO of Tether and Bitfinex, the demand for USDT was driven by exchanges strapped for cash.
In an interview on the “On The Bring With Castle Island” podcast, Ardoino said that the market crash that took place in mid-March caused many to get stuck on fiat on-ramp exchanges as they couldn’t turn their diminishing crypto holdings into fiat fast enough.
The biggest inflow of money into Tether wasn’t coming from new investors looking to get into the market, he explained. Almost all of the demand for Tether in the past several months was driven by exchanges who wanted more USDT on their platform in order to obtain more liquidity, he told the podcast’s host Nic Carter.
“I believe that Tether is absorbing part of the cash wealth that is sitting in cash in bank accounts on many other exchanges,” he said, adding, “We have seen OTC desks that have started dealing massively in Tether as well.”
Tether market-cap unlike other cryptocurrencies rarely goes down and therefore will continue to be a top cryptocurrency by market cap for a long time.
A new Bitcoin scam has emerged on YouTube, using the name of Elon Musk and his company SpaceX. The video is a live stream of a legitimate SpaceX event with Bitcoin addresses superimposed on the video asking viewers to send Bitcoin in order to join a “live conference.”
Another Elon Musk Bitcoin Scam Attracts 33,000 viewers
Viewers beware—another obvious Bitcoin scam has popped up on YouTube. The scam poses as a legitimate livestream, broadcasting the launch of SpaceX Falcon 9 launch and the conference that preceded it.
First screengrabs of the scam were shared by Garry Tan, the co-founder of Initialized Capital, showing that a QR code with a Bitcoin address was superimposed on the video. The channel behind the livestream, posing as SpaceX, used a textbook example of a crypto scam—asking for users to send Bitcoin in order to get a chance to win more Bitcoin back.
The livestream attracted as many as 33,891 concurrent viewers at one point, but it was unclear how long it lasted.
Image of Bitcoin scam shared by Garry Tan
Screengrab of the Livestream video. (Source: Youtube)
Handling YouTube Scams Is a Double-Edged Sword
The aforementioned scam wasn’t the only SpaceX themed livestream that popped up in the past few days. Many members of the crypto community shared screengrabs of other, almost identical scams that attracted even more viewers.
As of now, it is unclear whether YouTube reacted to the numerous reports and suspended the channels.
Twice as many live viewers and zero action by @YouTube. pic.twitter.com/rj7jpgsHd2
— Evgeny Tchebotarev (@tchebotarev) June 8, 2020
The abundance of cryptocurrency scams on YouTube has caused many members of the crypto community to lose faith in the platform. Reports have shown that many of these livestream scams showed up in a central position on YouTube’s main page among the most popular live videos.
Considering the fact that YouTube has been clamping down on creators on its platform that produce crypto-related content, the resentment the community feels towards the company becomes understandable.
Earlier this year, NewsBTC found that there were a handful of “giveaways” held for every prominent cryptocurrency and crypto company at any given time. Some of the addresses shared in these scams were shown to have amassed large sums of money from unsuspecting victims.
The Youtube scams continue to get more sophisticated day by day.
Featured Image from Shutterstock
A new phase for Shelley is about to begin, as the testnet for Cardano’s staking era will be open to all stake pool operators on June 9. As of May, the “friends and family” testnet was open only to a select group of about 50 stake pool operators who were set to pave the way for more operators that want to join in.
Any stake pool operator can now join the Shelley testnet
Just over four weeks into the friends and family Shelley testnet, the network closed off to a select group of pioneers will be opening its doors to the wider public. According to IOHK’s marketing and communications director Tim Harrison, the Shelley testnet is set to enter a new, final phase, which will bring the network closer to mainnet release.
In a video shared on Twitter, Harrison announced that the Shelley testnet will be open to all stake pool operators on Jun. 9. Any stake pool operator will be free to join the testnet, including those that set up and ran stake pools on the Shelley Incentivized Testnet (ITN).
Users will be able to test delegation and stake pool operating, as well as learn to navigate the Shelley network. Harrison said that there are currently over 60 pools running on the testnet, adding that he hopes more users would join in the following days.
However, he noted that users shouldn’t expect smooth sailing all the way—despite this being the closest thing to the actual Shelley mainnet, the environment is still a testnet that’s bound to be ripe with bugs and issues.
Will other operators share the pioneers’ sentiment towards Shelley?
Last week, Cardano’s head of delivery Christopher Greenwood commented on the progress made in the friends and family testnet, saying that the pioneers have been “overwhelmingly” satisfied with the experience or running stake pools.
The pioneers have gone through all of the exercises in the testnet, which include delegating, changing pool parameters, and transaction submitting, with most saying that the only bugs they encountered were “cosmetic.” This, according to Greenwood, will help them educate the rest of the operators that join in on the testnet, removing much of the burden from IOHK itself.
Those interested in setting up and running stake pools on the Shelley testnet can access all of the documentation necessary on the official testnet website.
Shelley’s testnet opening to all stake pool operators tomorrow is on track with previously laid out plans. Letting more people into the Shelley testnet environment is the final step the company will take in order to transition Cardano from a federated to a decentralized proof-of-stake system.
When it comes to future plans for Shelley, Harrison said earlier today that staking on the Shelley mainnet will be available in August. That means that those holding ADA will have to wait until the end of summer in order to be able to participate in the network by staking or delegating.
The Norwegian Court of Appeals has dismissed Craig Wright’s appeal against the decision made in January, which stated that Norway had jurisdiction against his case with Hodlonaut. Wright sued the anonymous Twitter analyst for defamation last year, but the case got dismissed in a U.K. court due to a lack of jurisdiction.
Norwegian court rules it has jurisdiction in Wright’s case against Hodlonaut
Hodlonaut, a prominent figure in the crypto sphere, has claimed another small victory in his long and tiring legal battle with Craig Wright, the chief scientist at nChain. The self-proclaimed creator of Bitcoin sued Hodlonaut for defamation after the anonymous analyst called him a fraud on Twitter.
After a U.K. High Court ruled in January that the country didn’t have jurisdiction over the matter, as Hodlonaut was a Norwegian citizen, the case was set to continue in Norway.
And now, the Norwegian Court of Appeals handed down judgment on Craig Wright’s appeal on the decision made by the U.K. court. The appeal, according to Hodlonaut, was denied.
The court ruled that Norway did, in fact, have jurisdiction over the matter, and ordered Wright to pay all costs incurred by Hodlonaut both at the District Court and the Norwegian Court of Appeals.
This, however, doesn’t mean the case is closed.
A small victory for Hodlonaut, but the worst is yet to come
The decision made by the court regarded only the matter of jurisdiction, which means that the actual case is yet to begin.
“Not even close to closing the chapter yet though. This was only about whether or not Norway has jurisdiction,” Hodlonaut wrote on Twitter, adding that he expects Wright to appeal this decision even further, possibly taking it as high as the Supreme Court.
He believes that Wright will do whatever is necessary to avoid the lawsuit taking place in Norway, focusing all efforts on bringing the case back to the U.K. Many believe that the U.K.’s loose laws on what constitutes defamation is what is behind Wright’s tactics.
As CryptoSlate covered earlier this year, Craig Wright is yet to win a court case, despite being involved in at least a dozen libel and defamation lawsuits in the past couple of years alone.
Apart from his ongoing saga with the estate of his former partner Dave Kleiman, Wright has taken several high-profile figures from the crypto industry to court. Last year, Wright’s case against Bitcoin Cash advocate Roger Ver, whom he sued for defamation, was also dismissed by the High Court. At the time, Judge Sir Matthew Nicklin said that the case was “weak” and “inappropriate.”
Peter McCormack, the host of “What Bitcoin Did” podcast, was also among the many recipients of Wright’s libel lawsuits. The case is still ongoing.
The daily network fees on the Ethereum network have reached almost $500,000 on Jun. 7 for the fourth time in the network’s history. The huge uptick in-network fees now mean that Ethereum has surpassed Bitcoin, whose network fees on the same date reached only $308,000.
Ethereum Miners Earned $200,000 More Than Bitcoin Miners
The Ethereum network had a pretty good day yesterday, both in terms of network activity and network fees.
According to the latest data from cryptocurrency analytics company Glassnode, the daily network fees on Ethereum surpassed those on Bitcoin by almost $200,000. The uptick in network activity on Ethereum pushed the total amount of fees recorded on Jun. 8 to reach almost $500,000. Yesterday was the fourth time this year that Ethereum miners earned that much money.
Bitcoin, on the other hand, had a rather disappointing performance yesterday, as it recorded only $308,000 in daily network fees.
Graph comparing the daily network fees on Bitcoin and Ethereum in 2020. (Source: Glassnode)
Analyzing Changes in Network Fees
Data from Glassnode has shown that the network fees on Ethereum have rarely outperformed the network fees on Bitcoin. Despite the abundance of DeFi projects and various dApps, this has only happened on 141 days so far, meaning that during the existence of both networks, miners on Ethereum earned more only 8% of the time.
The last time this year Ethereum miners saw much higher profits than Bitcoin miners was in mid-March, right around the time when the crypto market took a heavy hit caused by the coronavirus pandemic and stock market crash. The massive sell-off of various altcoins could have resulted in a congested network, with traders racing to pay the biggest transaction fees in order to liquidate their holdings faster.
On the other hand, the transaction fees on Bitcoin skyrocketed in the first half of May, with the biggest spike in network fees coinciding with the Bitcoin halving. With the block mining reward reduced from 12.5 to 6.25 BTC, transaction fees skyrocketed in order to keep miners profitable. However, as the network recovered from the immediate impact of the halving, the transaction fees reduced, which explains the sharp drop in fees the Bitcoin network has seen since May 18.
Ethereum fees majorly were primarily contributed by Tether with the last 30 USD value at $2.3 million, followed by MMM which is a scam project at $782k according to Eth Gas Station.
PlanB, the anonymous cryptocurrency analyst who popularized the stock-to-flow model, said that Bitcoin has now entered the “fear” zone, meaning that it is currently positioned below the S2F model value. This has historically indicated the beginning of a bull rally.
Bitcoin Moving Away From S2F Model Value Into The Fear Zone
Bitcoin’s inability to break through the $10,000 barrier has left many convinced that a price rally won’t happen for another few months. However, some metrics suggest that we might have already made the first steps towards an explosive bull rally.
According to anonymous cryptocurrency analyst PlanB, Bitcoin has now entered the “fear” zone, a period of time when Bitcoin is gearing up for a price increase.
Historically, every time BTC has positioned itself above or below the value predicted by the stock-to-flow model, the market entered either a “greed” or a “fear” zone. Unlike the fear zones, which have historically lasted for well over a year, greed phases were usually short-lived, as they represented a moment in the history of Bitcoin when it was largely overvalued by the market.
Greed and fear zones according to Bitcoin’s stock-to-flow model. (Source: Twitter)
How Correct is the Stock-To-Flow Model?
Usually reserved for determining the value of commodities such as gold and silver, the stock-to-flow model was first applied to Bitcoin last year by the above-mentioned analyst. Driven by the idea that Bitcoin acted more like a commodity than as a currency, the analyst applied the model to the world’s first digital currency in order to predict its price.
Put simply, the stock-to-flow ratio is the amount of a commodity held in inventories divided by the amount produced annually. Bitcoin’s stock-to-flow ratio of 25 puts right above silver, with a SF of 22, and below gold, which currently has the highest SF ratio of all the commodities at 62.
In his original analysis, PlanB said that BTC had a 95% R squared correlation to the S2F model. The latest data shared with the analyst, while showing the correlation to be marginally smaller, corroborates this.
Chart showing BTC’s correlation and cointegration with the stock-to-flow model. (Source: PlanB)
Therefore, the S2F model has historically been fairly accurate. However, with the market getting larger each year, and more and more factors affect BTC’s price, it’s hard to conclude whether or not the model will hold true in the years to come.
Featured Image from Shutterstock
Price tags: xbtusd, btcusd, btcusdt
Binance Pool has become the 11th largest Bitcoin mining pool in the world, according to data from BTC.com. The exchange’s CEO Changpeng Zhao shared the news earlier today, using older data that showed Binance Pool ranked 8th with 4.23% of the total hashrate.
Binance Pool Sees Slow and Steady Growth in Hashrate
Binance, one of the largest and fastest-growing cryptocurrency exchanges in the world, has seen its Bitcoin mining pool grow slowly and steadily. Launched at the end of April, the Binance Pool was initially met with skepticism, as many members of the crypto community criticized the company for aiding the further centralization of Bitcoin mining.
However, the pool launched with solid performance, ranking 11th in the world in its first week of existence. It made up for 2.91% of the total hashrate and mined a total of 116 blocks.
Chart showing the mining pool hashrate distribution in the past 30 days. (Source: BTC.com)
As of Jun. 5, the hashrate from the Binance Pool represents 3.68% of the total hashrate on the Bitcoin network. The exchange’s mining pool, which aimed to attract miners from Huobi and OKEx’s pools, has recorded a hashrate of 3.96 EH/s in the past 24 hours.
Table showing Bitcoin mining pools ranked by hashrate. (Source: BTC.com)
CEO Claimed Binance’s Pool Ranks 8th in The World
The news about the growth Binance’s mining pool has shown was first shared by the exchange’s founder and CEO, Changpeng Zhao. Zhao, however, seems to have used an older set of data, as his announcement showed that Binance Pool was the 8th largest mining pool by hashrate in the world.
“A month later, Binance mining pool is ranked 8th in the world now,” Zhao tweeted earlier today celebrating the company’s success.
The screengrab he shared from btc.com showed that Binance Pool was responsible for a 4.23% share of Bitcoin’s total network hashrate and has mined 19 blocks. There is no information about the time reference for the data in the image.
With most of the crypto community still worried about companies such as Binance acquiring too much power over the supposedly “decentralized” crypto market, we are yet to see how the company’s performance will stand in the long-run.
Screengrab of mining pool ranking shared by Changpeng Zhao. (Source: Twitter).
HackMoney Hackathon, a 30-day virtual Aave hackathon organized by Ethereum developer group ETHGlobal, has announced its three winning projects—Learn&Earn, a gamified online learning platform, YieldHero, a suite for managing Aave, and MagicBet, a no-loss betting platform that enables users to stake DAI.
Hacking Lending and Money Maker Protocol Aave
Organized by ETHGlobal, an organization focused on onboarding users and developers to the Ethereum community, the HackMoney Hackathon has attracted over 50 projects that competed for $300,000 worth of prizes by hacking the Aave protocol.
The money maker protocol was utilized in innovative ways, ranging from online education to one-stop suites for managing interest and yields. Judges Vitalik Buterin, Stani Kulechov, Andreas Antonopolous, Thomas Bertani, Ashleigh Schap, and Robert Leshner announced the three winning hacks—Learn&Earn, YieldHero, and MagicBet.
According to HackMoney’s announcement, Learn&Earn placed first with its novel approach to online learning. The platform gamifies the learning process and gives its students the ability to earn financial incentives for completing various online courses. Out of all the submissions, the company said that his hack has “real-world applications” and the potential to scale in the public sector.
Innovative Ethereum Products
The second place in HackMoney’s hackathon was awarded to YieldHero, a protocol that provides users a one-stop suite for managing their Aave yield. Aave enables users to deposit cryptocurrencies to the platform and earn yearly interest on their funds. The hack utilized several features to enable users to get the best yield by swapping their cryptocurrencies for aTokens, Aave’s native cryptocurrency.
It also has a user interface that allows users to redirect their interest to support Ethereum developers. A built-in leaderboard also shows which user is redirecting most of their yield.
MagicBet, which ranked third on the hackathon, utilized Aave’s yield capabilities for betting. The no-loss betting platform enables users to bet on real-life future events by staking DAI.
All of the staked DAI accrues interest for the user via Aave until the event occurs and the outcome is known. Users that predicted the outcome correctly get a share of the total accumulated interest, while all of the users who lost the bets get all of their stakes back.
Featured Image from Shutterstock
In the fourth development update regarding the Shelley testnet, Cardano’s head of delivery Christopher Greenwood said that the team received overwhelmingly good reviews from users. More than 50 pioneers have set up and operated 81 stake pools, achieving major success that is set to open up the testnet to the wider public next week.
“Things are progressing really well”
The friends and family Shelley testnet has entered its 4th week with raving reviews from users. In the latest Shelley testnet development update, Cardano’s head of delivery Christopher Greenwood commented on the progress made so far and shared some of the plans the company has set in the weeks that lie ahead.
According to Greenwood, the pioneers that have been testing Shelley have been overwhelmingly satisfied with the experience. There are currently over 50 pioneers, which include some of the stake pool operators from the Incentivized Testnet (ITN), which have set up 81 stake pools that have so far run successfully.
The pioneers have gone through all of the exercises in the testnet, which include delegating, changing pool parameters, and transaction submitting, with most saying that the only bugs they encountered were “cosmetic.”
All of this means that the testnet is ready to accept more stake pool operators. Greenwood said that extending the testnet to additional, public stake pool operators will happen next week, which is on track with previously laid out plans.
What lies ahead for Cardano
At the end of this week or at the beginning of next week, there will be a “wrap up” of the pioneer testnet, where the Cardano team and stake pool operators will discuss on how to move the testnet to the next level.
The wrap-up, according to Greenwood, will be followed by other major developments the team has scheduled for this month.
The Adrestia API integration has been progressing really well, he said in the product update video, adding that it will be released by the end of the month. Cardano’s hard fork combinator, which will essentially allow it to bridge the difference between the Byron and the Shelley era. It’s getting its own internal testnet for the Cardano team to use in the next few weeks.
The balance check for the Incentivize Testnet (ITN), which will be used to confirm the balances stake pool operators have amassed during the testnet, is also on schedule and should be deployed this month.
Cardano wallet Daedalus and the Cardano blockchain explorer are currently being integrated into the Shelley mainnet, but Greenwood didn’t share any concrete dates for their deployment.
Cryptocurrency exchange BitMEX announced that its $100,000 one-year grant has been awarded to Gleb Naumenko, a Bitcoin Core contributor and researcher. Awarded by HDR Global Trading, which owns BitMEX, the developer grant program complements the company’s efforts that support the development of open-source protocols.
Chaincode Labs Researcher Awarded BitMEX Grant
Gleb Naumenko, a Bitcoin Core contributor and researcher with Chaincode Labs, has received the Bitcoin developer grant from BitMEX. According to the company’s announcement, Naumenko is the second person to be awarded the grant, following on Michael Ford, who received the grant last year.
Naumenko will be awarded a $100,000 one year grant by HDR Global Trading Limited, the company that owns and operates the BitMEX cryptocurrency trading platform. The company announced the “no strings attached” grant earlier in May, saying that it wants to continue the practice of awarding grants to working on Bitcoin, NodeJS, Java or Kubernetes.
To date, HDR has awarded a total of $650,000 in grants to open-source projects, which includes a $150,000 grant to Ford last year and a $500,000 grant to the Digital Currency Initiative at MIT.
Supporting Open Source Bitcoin Development
The Bitcoin Development grant agreement states that HDR will pay Naumenko the $100,000 in 12 equal monthly installments, either in fiat or Bitcoin. During the 12-month period, Naumenko will only be obliged to send two “short reports” every six months related to the work he does on projects related to Bitcoin development.
All of the work done should be made available both to HDR and the public through an open-source software license without any restrictions. As for the type of work Naumenko chooses to pursue, HDR said that it was up to his “sole discretion.”
The latest grant puts BitMEX at the very top when it comes to companies financing Bitcoin development. The company has joined the likes of Blockstream and Lightning Labs, as well as other exchanges such as Bitfinex, Bitmain, BitPay, and OKCoin in financing ongoing development of the Bitcoin network.
It’s also worth noting that the company has been donating to various causes that are fighting against the COVID-19 outbreak. Back in April, BitMEX confirmed that it donated $2.5 million to four organizations, which include the Gates Philanthropy Partners.
Many traders on Twitter who probably got liquidated recently rejoiced to hear the news that their rekkt money was being spent for a good cause.