Ethereum Classic is partnering with security firms to prevent further 51% attacks

Ethereum Classic (ETC) Labs — the code maintainer and non-profit behind the Ethereum fork — announced its partnership with two cybersecurity firms to prevent the repeated 51% attacks that the Ethereum Classic network suffers from.

Repowering Ethereum Classic

In a blog post, the ETC Labs said the ETC Core Dev Team and itself were partnering with cybersecurity teams OpenRelay and ChainSafe as part of the newly-unveiled Network Security Plan. This ensures stakeholders are not affected by another 51% attack on the ETC network.

Such an attack occurs when miners on a proof of work networks, such as Bitcoin or Ethereum Classic, pool together their massive computing power to eventually gain the majority control of the underlying network. This allows them to reorganize blocks, mint more rewards, and present a threat to the network’s true decentralization.

While defenders of the idea state such an attack is difficult to both organize and carry out — Ethereum Classic has suffered such an attack…thrice. Last month, and earlier this year, the network was hit by a quick succession of 51% attacks by a group of unidentified miners.

They were expensive attacks too. The malicious actors behind the doing made away with millions of dollars worth of ETC, which they purported sold on the open market. It presented an existential threat to ETC, which the Dev team sought to solve.

This is where the partnership with OpenRelay and ChainSafe comes to play. Together, with the ETC Labs, the teams will collaborate to increase 51% attack resistance and to implement immediate technical responses to make the network more secure:

“The team is in the process of developing and testing immediate technical responses that will make the network more secure. They will also help address the 51% attack vulnerability that all PoW blockchains have.”

Tackling the 51% attack problem

In a statement, James Wo, the founder and chairman of ETC Labs, said OpenRelay and ChainSafe are both “well acquainted with Ethereum Classic, through working together, will have some of the most brilliant minds in blockchain tackling the 51% problem in tandem.”

Eric Tu,  a developer at ChainSafe, shared the sentiment, stating that the team looks forward to working with the ETC Labs on the research and development of helping secure PoW blockchains against 51% attacks. He said, “Our collaborative efforts will play a crucial role in securing ETC against malicious attackers on the network.”

ETC holders might have something to rejoice about after all.

The post Ethereum Classic is partnering with security firms to prevent further 51% attacks appeared first on CryptoSlate.

Here’s how the Norwegian Government now indirectly holds over 570 Bitcoin

Bitcoin adoption has already reached the high coffers of the Norwegian government, albeit in an indirect manner.

Norway now holds Bitcoin

As per a report by on-chain analytics firm Arcane Research, the Norwegian Government Pension Fund, also known as the Oil Fund, is exposed to the Bitcoin market by way of its holdings in enterprise software firm MicroStrategy, which itself holds over $375 million worth of the pioneer digital asset.

Image: Arcane Research

One may ask, “Why does MicroStrategy holding Bitcoin mean the Norwegian Fund owns Bitcoin?,” it’s because before any publicly-listed company pursues an outsized investment such as real estate in foreign lands or the purchase of other assets using treasury funds, an approval from a majority of the shareholders (or all) is required.

Once approved, all shareholders then conduct a strict due-diligence of the asset their money is flowing into, meaning the Norwegian Fund both approved and accepted the decision of MicroStrategy to purchase and hold Bitcoin.

The fund’s not a small one either. The Norwegian Government Pension Fund, also known as the Oil Fund has over US$1 trillion in assets, including 1.4% of all global stocks and shares, making it the world’s largest sovereign wealth fund, said the report.

Norway’s sovereign fund is one of the largest in the world. Image: Forbes

Arcane noted in its blog, “Through its ownership stakes in MicroStrategy (1.51% as of December 31, 2019),  the Norwegian Government Pension Fund now indirectly holds 577.6 bitcoin (~57.5 MNOK, 6.3m USD).”

More Bitcoin?

The metric makes the Norwegian government one of the first developed countries to be exposed to the burgeoning Bitcoin market. It joins fund managers like Paul Tudor Jones and others to turn to the digital asset class as a hedge against global inflation and a bleak economic outlook.

Arcane further noted that the Pension Fund may have additional Bitcoin exposure via other investments, apart from the exposure to Bitcoin via MicroStrategy.

Meanwhile, two of the world’s largest equity and investment funds — Vanguard and Blackrock Advisors — are also now in the ownership of Bitcoin by way of their investments in MicroStrategy, said Arcane:

“BlackRock (5829.3 BTC ~ 63.8m USD) and The Vanguard Group (4482.9 BTC ~ 49.1m USD) holds sizable Bitcoin exposure through their ownership stakes at MicroStrategy.”

The Norwegian Fund’s approval of the purchase of Bitcoin is an extension of the country’s favorable policies around digital currencies and assets.

Norway intends to become a cashless society by 2030. Image: Conseil de l’Europe

Reports suggest Norway is now “effectively cashless” and is pushing for both regulation and infrastructure to become a wholly cashless nation by 2030.

Only now, Bitcoin’s in for that ride.

The post Here’s how the Norwegian Government now indirectly holds over 570 Bitcoin appeared first on CryptoSlate.

Here’s how the Norwegian Government now indirectly holds over 570 Bitcoin

Bitcoin adoption has already reached the high coffers of the Norwegian government, albeit in an indirect manner.

Norway now holds Bitcoin

As per a report by on-chain analytics firm Arcane Research, the Norwegian Government Pension Fund, also known as the Oil Fund, is exposed to the Bitcoin market by way of its holdings in enterprise software firm MicroStrategy, which itself holds over $375 million worth of the pioneer digital asset.

Image: Arcane Research

One may ask, “Why does MicroStrategy holding Bitcoin mean the Norwegian Fund owns Bitcoin?,” it’s because before any publicly-listed company pursues an outsized investment such as real estate in foreign lands or the purchase of other assets using treasury funds, an approval from a majority of the shareholders (or all) is required.

Once approved, all shareholders then conduct a strict due-diligence of the asset their money is flowing into, meaning the Norwegian Fund both approved and accepted the decision of MicroStrategy to purchase and hold Bitcoin.

The fund’s not a small one either. The Norwegian Government Pension Fund, also known as the Oil Fund has over US$1 trillion in assets, including 1.4% of all global stocks and shares, making it the world’s largest sovereign wealth fund, said the report.

Norway’s sovereign fund is one of the largest in the world. Image: Forbes

Arcane noted in its blog, “Through its ownership stakes in MicroStrategy (1.51% as of December 31, 2019),  the Norwegian Government Pension Fund now indirectly holds 577.6 bitcoin (~57.5 MNOK, 6.3m USD).”

More Bitcoin?

The metric makes the Norwegian government one of the first developed countries to be exposed to the burgeoning Bitcoin market. It joins fund managers like Paul Tudor Jones and others to turn to the digital asset class as a hedge against global inflation and a bleak economic outlook.

Arcane further noted that the Pension Fund may have additional Bitcoin exposure via other investments, apart from the exposure to Bitcoin via MicroStrategy.

Meanwhile, two of the world’s largest equity and investment funds — Vanguard and Blackrock Advisors — are also now in the ownership of Bitcoin by way of their investments in MicroStrategy, said Arcane:

“BlackRock (5829.3 BTC ~ 63.8m USD) and The Vanguard Group (4482.9 BTC ~ 49.1m USD) holds sizable Bitcoin exposure through their ownership stakes at MicroStrategy.”

The Norwegian Fund’s approval of the purchase of Bitcoin is an extension of the country’s favorable policies around digital currencies and assets.

Norway intends to become a cashless society by 2030. Image: Conseil de l’Europe

Reports suggest Norway is now “effectively cashless” and is pushing for both regulation and infrastructure to become a wholly cashless nation by 2030.

Only now, Bitcoin’s in for that ride.

The post Here’s how the Norwegian Government now indirectly holds over 570 Bitcoin appeared first on CryptoSlate.

Uniswap locks up $1.79 billion two days after token launch, UNI surges to $7.50

Decentralized exchange Uniswap has locked up a staggering $1.79 billion in total assets just two days after the launch of UNI, its native governance token.

Uniswap shows who is boss

As per data on DeFi Pulse, Uniswap liquidity pools now lock up over 2.4 million ETH alone, with other assets combining to make a total of $1.79 billion. The figures are over thrice than the first week of September—when investors moved to Uniswap fork SushiSwap to lock their assets up.

Image: DeFi Pulse

For the uninitiated, Uniswap is a fully decentralized on-chain protocol for a token exchange on Ethereum that uses liquidity pools instead of order books. Any users, regardless of nationality or KYC status, can quickly swap between ETH and any ERC20 token and earn fees by supplying liquidity. 

The protocol also allows users to create their own market by supplying an equal value of ETH and an ERC20 token: The market creator can then set the exchange rate, which shifts through trading due to Uniswap’s “constant product market maker” mechanism.

UNI token 101

So far, the platform served as a pure-play DEX without a token. But competition from the likes of SushiSwap — and DEXs on other blockchains like Binance Smart Chain — spurred Uniswap to release its token last week.

The token briefly traded at under a dollar, as per data on CoinGecko, but surged shortly after to $2.4. Investors then piled into the token over the next two days, with UNI briefly trading at over $8.40 on Friday night — a rise of over 500%. It trades at $6.32 at press time.

Image: TradingView

Much of the buying pressure could be explained by the lure of taking part in community proposals, discussions, and governance on Uniswap. As per its token prospectus, a total of 1 billion UNI tokens will ever be available, of which 60.00% belongs to Uniswap community members, 21.51% to team members, and future employees with 4-year vesting, 17.80% to investors with similar vesting, and 0.069% to advisors.

Image: Uniswap

Over 110 million UNI are in circulation at press time. A perpetual inflation rate of 2% per year will start after 4 years, ensuring continued participation and contribution to Uniswap at the expense of passive UNI holders, the prospectus said.

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Here’s how Twitter and active wallets predicted insane DeFi gains

Predicting the crypto markets does not have to be a hard science necessarily. New research shows a simple strategy of tracking sentiment on social media, such as Twitter, about certain tokens and projects could have proven a profitable venture for traders.

But as always: It works until it doesn’t.

Predicting DeFi token movements

According to a report by decentralized application tracking firm DappRadar, social media can be a “powerful tool” for predicting token price movements, especially as the DeFi space remains heavily driven by retail hype.

The firm used a proprietary method to map DeFi token prices against those of Bitcoin, alongside weighting them with social volumes, Twitter follower changes, and active dApp wallets.

In the case of decentralized lending provider Aave (LEND), Dappradar ran regression analytics using the four metrics. Its findings? A massive 75.9% of LEND price fluctuation was majorly impacted by the two metrics — Twitter followers and Aave active wallets.

Data from the survey. Image: Dappradar

The firm found a similar result on stablecoin lender Curve, whose CRV token nosedived recently by over 84% compared to its all-time high. It currently hovers at $2, as per CryptoSlate’s price tracking page.

The firm said, “Similar to Aave, we can observe the same trends of correlation and regression analysis in Curve on the provided metrics. All four metrics have a positive correlation to CRV price.”

CRV has fallen over 84% from its ATHs. Image: TradingView

It added Curve’s Twitter follower changes and active wallets showed the strongest correlation of 86.4% and 84.7% respectively with each other. The firm further noted:

“While running regression analysis for the Twitter followers and Active wallets, the results were exceptional, indicating that 80% of CRV price is majorly impacted by these two metrics.”

Meanwhile, MKR, the governance token of MakerDAO, was impacted the more by Bitcoin price and Twitter follower change, as opposed to the rise in active wallets having an impact on  MKR prices.

Do Twitter followers affect price? Yes.

In conclusion, the firm said that the narrative Bitcoin prices affecting altcoin prices continue to hold true. However, active wallets and the increase in Twitter users serve a better correlation for the prices of some DeFi altcoins such as LEND and CRV.

However, the firm did point out some limitations that existed in the calculations, such as the tests being conducted on only three DeFi tokens and that social media sentiments were taken only from Twitter, with sites like Reddit not included.

Still, it’s alpha for those who dare.

The post Here’s how Twitter and active wallets predicted insane DeFi gains appeared first on CryptoSlate.

Bitcoin’s social sentiment level is at a new low – could prices surge?

The social sentiment for Bitcoin — a metric that tracks the asset’s public perception on social media and forums — has reached a record low level, according to on-chain tracking firm Santiment.

Historically, a surge in price usually follows each time the social sentiment values fall this low, the firm said.

Bitcoin sentiment reaches record low

Santiment noted that as Bitcoin crossed above $11,000 for the first time since September 3, the asset’s sentiment — such as mentions, hashtags, and comments — on  Twitter fell “surprisingly” to an all-time low.

The firm used a proprietary method that calculated Bitcoin’s overall volume of mentions and weighted them against positive and negative commentary on the platform.

The firm added that “negative sentiment at extremely low levels correlates with price rises, whereas extreme highs correlate with price retracements,” indicating that Bitcoin prices may see a leg-upwards in the coming weeks if historical data were to be considered.

Meanwhile, sentiment data from crypto analytics firm The TIE, another on-chain provider, also shows Bitcoin is showing bullish action in both short- and mid-term trades.

The chart below maps the “long-term sentiment score” with Bitcoin’s price, showing the latter has just begun to catch up with the public perception of the pioneering digital asset:

Image: The TIE

Sentiment remained stable even when Bitcoin suffered the infamous “Black Thursday” event in March when prices fell by over 45 percent over two trading sessions. However, public perception stably grew since, with prices catching on to reflect the metric.

Just going by the data alone — Bitcoin has still not converged with the long-term public sentiment. A “gap” still remains, showing BTC is undervalued according to this particular metric.

Meanwhile, additional metrics show the Twitter-verse is starting to be less concerned about Bitcoin’s price. Tweet dominance is just 42 percent even as prices go up. This can be attributed to the rise of Ethereum, DeFi, and DEX-based altcoins in recent weeks — with the trio featuring massive retail interest after some tokens surged 1000x in a few days.

Image: TradingView

At press time, Bitcoin trades at $10,900 and is continuing its short-term uptrend. The asset trades about its 34-period exponential moving average and has local support in the $10,500-$10,600 price range.

The post Bitcoin’s social sentiment level is at a new low – could prices surge? appeared first on CryptoSlate.

DeFi project Teller Finance announces Compound integration and launch of TLR token

Teller Finance, a DeFi project for decentralized unsecured lending, today announced the launch of its governance token (TLR), a liquidity program, and an integration with lending protocol Compound, as per a release shared with CryptoSlate.

Mining TLR on Compound

At launch, Teller will allow users to mine the TLR token via contributing to its liquidity pool. The firm’s lending application will have an immediate Compound interface and will enable users to earn an additional TLR and COMP (Compound’s native token) by participating as lenders, the report said.

It added that the Compound integration will allow Teller’s liquidity providers to earn Compound’s c-token interest rate on the unlent funds, allow users to earn an additional return on the protocol’s overall APY and liquidity mining rewards.

Ivan Perez, the COO of Teller Finance, said that the DeFi industry had grown roughly 675% in the last 12 months to more than $10 billion in value, with most of its capital locked in debt markets.

Perez added:

“Beyond lending, the ability to price out risk will accelerate DeFi’s unprecedented growth. We plan to create a new class of financial instruments that combine traditional credit assessment with decentralized networks.” 

Teller said it had sourced over $8 million worth of $DAI and $USDC in liquidity for loans via various institutional partnerships and through the DeFi Alliance’s newly launched Liquidity Launchpad Program.

The participation for that was capped at 10 participants, or $10 million in total liquidity provided, and was limited to an institutional rewards pool equal to 1% of the total supply of its forthcoming governance token.

Additionally, Teller has also imposed a 3-month lockup on all capital contributed to the program, restricting all earned tokens to a vesting schedule equal to the length of the lock-up, the release said.

Community governance to arrive soon

For now, Teller Labs, consisting of founding team members, will dictate major governance decisions and regulate the protocol. However, the company will shift to a community-based proposal system once the network achieves “sufficient adoption and distribution of TLR, the network’s governance token.”

Unlike a standard ERC-20 governance token, TLR’s initial core functionality is to allow for ongoing, decentralized governance of the protocol’s credit risk features. At launch, TLR owners will be able to submit, confirm, or reject pull requests to upgrade the protocol’s credit risk features.

Meanwhile, Compound founder Robert Leshner commented on the launch:

“The Teller Protocol is resolving an essential problem for DeFi. Namely, lowering the barrier to entry for new DeFi users by pricing out risk, and reducing the industry’s need for collateralized debt positions.”

DeFi fanatics have got another project to look out for.

The post DeFi project Teller Finance announces Compound integration and launch of TLR token appeared first on CryptoSlate.

There are now over 10,000 Bitcoin ATMs in the world

The past few months have been marked by increasing fears of inflation, excessive money printing, and an increased conversation about the role of Bitcoin and gold amidst such a bleak outlook.

While investors like Paul Tudor Jones and companies like MicroStrategy have already adopted the so-called “Bitcoin Standard,” there’s increased avenues for the retail crowd to purchase Bitcoin as well.

Bitcoin ATMs see a bump in 2020

A metric in this regard is the large number of Bitcoin ATMs that sprung up this year, with research stating there are over 10,000 machines scattered around the world that now dispense Bitcoin, or take cash for Bitcoin.

According to a report by AksjeBloggen, the total number of Bitcoin ATMs hit 9,680 at the beginning of September, representing a 167% jump year-on-year. Such outlets have emerged as one of the most convenient and quickest ways as opposed to crypto exchanges.

Starting from December 2017, there were 1,932 such crypto ATMs in the world. This figure soared to over 4,009, a 107% jump, by 2018. The growth continued in 2019 and hit 5,795 in December last year, said the report.

However, nothing beats the impressive figures in 2020. There were over 3,885 new Bitcoin ATMs officially launched and in operation in the first nine months of 2020, representing a 67% increase.

US leads in Bitcoin ATMs 

Bitcoin ATM installations were, unsurprisingly, higher in developed economies, such as the United States, Canada, and the United Kingdom. However, developing markets and regions with volatile currencies, such as Venezuela, are also seeing an uptick in the number of Bitcoin ATMs installed as citizens lose their faith in their fiat currencies, the report said.

It added:

“Analyzed by geography, the United States represents the leading crypto ATM market, with 78% of all Bitcoin ATMs globally.”

The report also revealed the number of BTMs operating in the United States significantly increased in the last year. In September 2019, the US citizens could use 3,332 crypto ATMs all around the country. 

Image: CoinRadar

Statistics showed the number of crypto ATMs in the United States hit 7,567 in September 2020, a 127% jump in a year.

Canada, ranked as the second-largest BTM market globally, with 869 Bitcoin ATMs as of September. The United Kingdom, Austria, Spain, and Switzerland follow, with 278, 150, 106, and 81 BTMs, respectively.

Meanwhile, Genesis Coin emerged as the leading Bitcoin ATM manufacturer globally, with a 35% market share and 3,406 ATMs operating worldwide as of September. Second was General Bytes, with a 29% market share and 2,893 ATMs.

The post There are now over 10,000 Bitcoin ATMs in the world appeared first on CryptoSlate.

There are now over 10,000 Bitcoin ATMs in the world

The past few months have been marked by increasing fears of inflation, excessive money printing, and an increased conversation about the role of Bitcoin and gold amidst such a bleak outlook.

While investors like Paul Tudor Jones and companies like MicroStrategy have already adopted the so-called “Bitcoin Standard,” there’s increased avenues for the retail crowd to purchase Bitcoin as well.

Bitcoin ATMs see a bump in 2020

A metric in this regard is the large number of Bitcoin ATMs that sprung up this year, with research stating there are over 10,000 machines scattered around the world that now dispense Bitcoin, or take cash for Bitcoin.

According to a report by AksjeBloggen, the total number of Bitcoin ATMs hit 9,680 at the beginning of September, representing a 167% jump year-on-year. Such outlets have emerged as one of the most convenient and quickest ways as opposed to crypto exchanges.

Starting from December 2017, there were 1,932 such crypto ATMs in the world. This figure soared to over 4,009, a 107% jump, by 2018. The growth continued in 2019 and hit 5,795 in December last year, said the report.

However, nothing beats the impressive figures in 2020. There were over 3,885 new Bitcoin ATMs officially launched and in operation in the first nine months of 2020, representing a 67% increase.

US leads in Bitcoin ATMs 

Bitcoin ATM installations were, unsurprisingly, higher in developed economies, such as the United States, Canada, and the United Kingdom. However, developing markets and regions with volatile currencies, such as Venezuela, are also seeing an uptick in the number of Bitcoin ATMs installed as citizens lose their faith in their fiat currencies, the report said.

It added:

“Analyzed by geography, the United States represents the leading crypto ATM market, with 78% of all Bitcoin ATMs globally.”

The report also revealed the number of BTMs operating in the United States significantly increased in the last year. In September 2019, the US citizens could use 3,332 crypto ATMs all around the country. 

Image: CoinRadar

Statistics showed the number of crypto ATMs in the United States hit 7,567 in September 2020, a 127% jump in a year.

Canada, ranked as the second-largest BTM market globally, with 869 Bitcoin ATMs as of September. The United Kingdom, Austria, Spain, and Switzerland follow, with 278, 150, 106, and 81 BTMs, respectively.

Meanwhile, Genesis Coin emerged as the leading Bitcoin ATM manufacturer globally, with a 35% market share and 3,406 ATMs operating worldwide as of September. Second was General Bytes, with a 29% market share and 2,893 ATMs.

The post There are now over 10,000 Bitcoin ATMs in the world appeared first on CryptoSlate.

Bitcoin futures volumes on US exchange Bakkt hits record

Bakkt, the fully-regulated institutional US exchange for cryptocurrencies, reported the highest-ever volume for its Bitcoin futures product yesterday, after several dismal months.

The demand came on the back of enterprise software firm MicroStrategy stating it scooped up an additional $175 million in Bitcoin yesterday.

Record day for Bakkt

Bakkt said it traded over $200 million in its 15,955 Bakkt Bitcoin futures product on Tuesday, a 36% increase from its previous all-time high. 

Despite the figures, the exchange pales in comparison to most crypto exchanges that offer a similar futures product. For example, the daily volume on Bitcoin futures on Binance and OKEx was over $2.3 billion and $2.1 billion respectively on Tuesday alone — ten times as much as Bakkt’s, as per data on on-chain analytics firm Skew.

Image: Skew

Meanwhile, the open interest (OI) on Bakkt — a metric that calculates the number of contracts or commitments outstanding in futures and options trading on an exchange at any time — was just $13 million. In comparison, OI on OKEx was a mammoth $881 million, while that on BitMEX was $803 million.

Image: Skew

Still, the $200 million on Bakkt shows substantial interest from regulated firms interested in gaining exposure to Bitcoin with Bakkt’s physically-delivered futures product — one that deposits Bitcoin to investors upon expiry instead of US dollars.

The development came as US software provider MicroStrategy announced it purchased another 16,000 Bitcoin, worth $175 million, yesterday. The purchase brought the firm’s total Bitcoin holdings to be valued at over $375 million, with MicroStrategy touting Bitcoin’s properties as a hedge against inflation on traditional currencies as a reason behind its decision.

Bakkt’s muted crypto presence

Crypto fanatics once regarded Bakkt as Bitcoin’s “killer app” — a so-called slang for products/services that revolutionize industries and rival products.

However, since its launch in September 2019, Bakkt has no substantial metric or use case to boast about. On the first hour of trading post-launch, only five contracts changed hands. At the end of the session, only 28 contracts were traded — a number smaller than the worse ranked crypto exchanges.

The exchange’s main selling point — that of physical-settled Bitcoin futures — turned out a disappointing farce. Only 63 percent of contracts were reportedly settled in the digital currency.

Still, with the volumes it recorded yesterday — it may be wise to write off Bakkt as a contender in the Bitcoin futures space just yet.

The post Bitcoin futures volumes on US exchange Bakkt hits record appeared first on CryptoSlate.

Bitcoin futures volumes on US exchange Bakkt hits record

Bakkt, the fully-regulated institutional US exchange for cryptocurrencies, reported the highest-ever volume for its Bitcoin futures product yesterday, after several dismal months.

The demand came on the back of enterprise software firm MicroStrategy stating it scooped up an additional $175 million in Bitcoin yesterday.

Record day for Bakkt

Bakkt said it traded over $200 million in its 15,955 Bakkt Bitcoin futures product on Tuesday, a 36% increase from its previous all-time high. 

Despite the figures, the exchange pales in comparison to most crypto exchanges that offer a similar futures product. For example, the daily volume on Bitcoin futures on Binance and OKEx was over $2.3 billion and $2.1 billion respectively on Tuesday alone — ten times as much as Bakkt’s, as per data on on-chain analytics firm Skew.

Image: Skew

Meanwhile, the open interest (OI) on Bakkt — a metric that calculates the number of contracts or commitments outstanding in futures and options trading on an exchange at any time — was just $13 million. In comparison, OI on OKEx was a mammoth $881 million, while that on BitMEX was $803 million.

Image: Skew

Still, the $200 million on Bakkt shows substantial interest from regulated firms interested in gaining exposure to Bitcoin with Bakkt’s physically-delivered futures product — one that deposits Bitcoin to investors upon expiry instead of US dollars.

The development came as US software provider MicroStrategy announced it purchased another 16,000 Bitcoin, worth $175 million, yesterday. The purchase brought the firm’s total Bitcoin holdings to be valued at over $375 million, with MicroStrategy touting Bitcoin’s properties as a hedge against inflation on traditional currencies as a reason behind its decision.

Bakkt’s muted crypto presence

Crypto fanatics once regarded Bakkt as Bitcoin’s “killer app” — a so-called slang for products/services that revolutionize industries and rival products.

However, since its launch in September 2019, Bakkt has no substantial metric or use case to boast about. On the first hour of trading post-launch, only five contracts changed hands. At the end of the session, only 28 contracts were traded — a number smaller than the worse ranked crypto exchanges.

The exchange’s main selling point — that of physical-settled Bitcoin futures — turned out a disappointing farce. Only 63 percent of contracts were reportedly settled in the digital currency.

Still, with the volumes it recorded yesterday — it may be wise to write off Bakkt as a contender in the Bitcoin futures space just yet.

The post Bitcoin futures volumes on US exchange Bakkt hits record appeared first on CryptoSlate.

Mark Cuban-backed $31 million ICO “Unikrn” agrees to US SEC fines

Unikrn, a Seattle-based e-sports platform, has agreed to pay a $6 million fine to settle a complaint by the US Securities and Exchange Commission that said it raised $31 million by selling unregistered securities, according to a release.

$6 million fine agreed

The firm previously boasted celebrity investors like Ashton Kutcher and Mark Cuban, and capitalized on 2017’s ICO boom by offering UnikrnGold tokens in June that year. It managed to raise over $31 million in a short span.

Unikrn positioned the tokens as an attractive proposition for investors and even stated they would become more valuable — and hence more profitable — for early buyers as it released crypto-based gambling platforms.

But things went downhill from there. Such promises meant the token offering was a red flag in the SEC’s books. A complaint was then filed against Unikrn, alleging it was in violation of regulations requiring companies to register initial public offerings with the federal government. A three-year-long court battle followed.

Yesterday, it came to an end with Unikrn agreeing to pay over $6 million to cover investor losses among other fines. However, as reported by the Seattle Times, the company noted that the SEC’s guidelines for ICOs were published after it started selling UnikoinGold.

It added that in those guidelines, the SEC rejected the industry’s position that cryptocurrencies were not securities, and pledged to regulate them as such.

Fines too high for Unikrn

Despite the judgment industry observers say the fines levied on Unikrn has been unusually high, compared to what most other crypto firms have paid out relative to the amount they raised.

For example, when blockchain-based dApp developer Block.one, settled an SEC investigation in 2019, it paid just $24 million, a tiny amount considering it raised nearly $4 billion in its ICO.

An SEC spokesperson did not immediately respond to a question about why the Unikrn settlement was so high by comparison, the report stated.

SEC Commissioner Hester Peirce, also known as “Crypto Mom” for her progressive stance on regulations for the blockchain and cryptocurrency industry, argued that the $6.1 million settlement could force Unikrn to go out of business.

“It really is time for us to provide some guidance on this issue so that we can move on and think about other issues that are going to be even more challenging to sort through,”  commented Pierce on the judgment.

She noted:

“Registration violations, even standing alone, are serious, and our enforcement actions can serve to deter such violations and protect harmed investors. “We should strive to avoid enforcement actions and sanctions, however, that enervate innovation and stifle the economic growth that innovation brings. I believe that this action and its accompanying sanctions will have such consequences.”

Meanwhile, Unikrn CEO Rahul Sood noted to Seattle Times that he had no plans to shut Unikrn down. The company will “move forward” and “continue growing our business,” he said.

The post Mark Cuban-backed $31 million ICO “Unikrn” agrees to US SEC fines appeared first on CryptoSlate.

Security report finds Monero (XMR) leads in “cryptojacking” exploits

A new cybersecurity report said privacy protocol Monero was used in most of the cryptojacking attacks traced this year. The cryptocurrency remains one of the most-used among illicit groups due to its strong privacy-features, one that even the US Security and Exchange Commission is trying to break into.

Monero emerges on top

Titled “Attacks in the Wild on Container Infrastructure,” the report by Aqua Security claimed to have analyzed over 16,371 attacks on software containers and cloud-native infrastructure over June 2019 and July 2020.

It said cloud servers, which power a majority of the world’s enterprising computing software in an online location, remain a major target for cryptojacking, or the illicit mining of cryptocurrencies using a victim’s computing power without thier knowledge. Such attacks are said to siphon hundreds of millions of dollars each year.

Per the report, cryptojacking attacks in the second half of 2019 and the first half of 2020, surged by over 250%. Overall, cryptojacking accounted for a staggering 95% of the 16,371 cyber attacks registered during that period, the report added.

The firm said hackers mainly used Monero-based mining tools in the cryptojacking attacks. For the uninitiated, Monero is a privacy-first cryptocurrency that obfuscates user addresses and transactional trails, making it extremely difficult to accurately trace.

Aqua Security said XMRig, a well-known Monero mining app, was used in most instances to deploy the attacks. The firm explained:

“Although Bitcoin has better publicity than Monero, the last is preferred by the adversaries. We speculate that they choose Monero since it is considered significantly more anonymous than Bitcoin.”

Attacks increasing

Aqua Security said that the involvement of organized cybercrime groups had led to both an increased occurrence of such attacks and their complexity. This had, in turn, caused the proceeds earned by cryptojacking to increase each year, the firm said.

From scanning the internet for cloud servers exposed online without a password, exploiting vulnerabilities in unpatched systems, and carrying out brute-force attacks, hacker groups have been recently orchestrating supply-chain attacks, the firm noted.

Meanwhile, it added that the malware stored inside malicious software directories on victim computers perform malicious actions only after being installed, making it impossible to detect static analysis or signature-based security systems.

The report confirms the findings of Symantec, another cybersecurity firm. Earlier this year, the firm said cryptojacking attacks had risen by over 163% in the second quarter of 2020 alone and was expected to rise further.

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Chainlink oracles will now power Crypto.com’s DeFi Wallet

Chainlink’s famed decentralized price oracles will now provide data to Crypto.com’s newest DeFi-focused product, as per an announcement on Monday.

Crypto.com onboards Chainlink oracles

A few days after Hong Kong-based crypto exchange and crypto card provider Crypto.com unveiled its DeFi Swap — a Uniswap fork and automated market maker — the firm onboarded Chainlink’s oracles to provide data to all its listings.

For the uninitiated, oracles are third-party tools that fetch data from outside a blockchain to within, as the latter can store data immutably but not verify its authenticity. And while the crypto space is dotted with various oracle providers, Chainlink has emerged as the market leader due to its trusted developer team and a battle-tested oracle network.

In a blog post, Crypto.com said it had integrated Chainlink’s Price Reference Data into the Crypto.com DeFi Wallet on its mainnet to provide decentralized price feeds for DeFi tokens. 

The firm added it will first launch the decentralized price reference data feeds first for its own coin, the CRO, with two trading pairs — CRO/ETH and CRO/USD.

Image: Crypto.com

While the DeFi Swap is a new product, Crypto.com launched its native DeFi Wallet earlier this year, allowing users to store their own private keys and access an open-marketplace based on the CRO token. Now, with the integration of Chainlink’s Price Reference Data, the firm  said it ensures that “users receive highly accurate and transparent prices for DeFi assets held within it.”

Kris Marszalek, the co-founder and CEO of Crypto.com commented on the launch:

“Chainlink will help us decentralize and give our users more control to verify where and how price data is received and used within the Crypto.com DeFi Wallet.”

He added that the integration gives users more control of their money, data and identity without needing to trust centralized entities, such as centralized crypto exchanges.

Verified data prevents “Black Thursday” mishap

As per the release, all Chainlink Price Reference Data is secured by decentralized oracle networks made up of Sybil resistant node operators, which secure millions of dollars in similar protocols. Each node sources data from high-quality off-chain data aggregators, which maintain strong volume-adjust market coverage across all trading environments.

By pooling the data fees from several sources instead of one, applications utilizing the feeds have access to highly available, accurate, and manipulation resistant price feeds that are protected against any single point of failure.

This vastly helps in times of a drastic market drop. An example is the now-colloquially known “Black Thursday” event in March 2020 when the crypto market fell an average of over 45% in a single day. At the time, the lack of a verifiable oracle provider to Maker caused its users to lose over $4.1 million to “zero-bid” offers on the network, as CryptoSlate reported.

But with the verifiable price oracles using various data sources, instances like the above are avoided. Sergey Nazarov, the founder of Chainlink, explained:

“By shifting key financial product processes like calculating interest rates and managing a portfolio to more transparent and decentralized alternatives, users receive even greater guarantees that those services are reflective of true market conditions and not be subject to any form of human tampering.”

At press time, Chainlink’s native LINK tokens trade at $11.93 while CRO exchanges hands at $0.16.

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DeFi protocol bZx suffers $8 million hack, customer funds safe

Blockchain protocol bZx suffered a hack early Monday, with hackers making away with almost $8 million in various cryptocurrencies before the vulnerability was patched.

bZx hit thrice

bZx is a decentralized margin lending protocol & liquidation oracle marketplace on the Ethereum blockchain. Its protocol allows users to deploy smart contracts atop Ethereum to lend and margin trade without relying on third parties.

But security concerns have hit the project hard…thrice. Earlier this year, the protocol was compromised by malicious actors twice in the space of a week who managed to capture nearly $1 million in illicit funds. At the time, the firm promised to install more vigorous security services on its platform to avoid such a hack again.

And while there wasn’t any untoward incident so far, a “duplication” vulnerability earlier today cost the protocol millions of dollars in various cryptocurrencies.

bZx said in a blog post, “Due to a token duplication incident, the protocol insurance fund has transiently accrued a debt. The insurance fund is backstopped by both the token treasury in addition to protocol cash flows.”

It added that bZx’s risk management system is capable of “absorbing black swan events that would otherwise negatively impact lender assets.” With that, the $8 million vulnerability would be “wiped clean” and the protocol will move forward unimpeded.

Here’s what allowed the hack: Every ERC20 token has a transferFrom() function that is responsible for transferring tokens. In the bZx case, hackers found that it was possible to call this function to create and transfer an iToken to yourself, allowing them to artificially increase their balance.

The following then occurred:

  1. The team noticed a strange movement in the protocol TVL.
  2. Identified anomalous behavior with the _internalTransferFrom() function on the iToken contract.
  3. Minting and burning of iTokens was paused as the fix was identified.
  4. Borrowing and trading was not impacted.
  5. A new version of the affected iToken contracts were deployed with the balances corrected for duplications.
  6. The patched code was sent to Peckshield and Certik for review.
  7. Minting and burning of iTokens were unpaused.

Patched and all funds safe

bZx was quick to handle the issue and used a backdoor admin access system to stop hackers from steaking more funds. A patched version of the source code was later sent to two blockchain security firms, Certik and Peckshield, who approved the changes.

In terms of covering losses, a collection of affected crypto funds, such as Chainlink, Ethereum, and Tether, were added to the insurance fund, said bZx.

No customer funds were affected or lost during the breach.

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Coinbase CEO blasts Apple’s “restrictive” policies towards crypto and DeFi

Apple, the Californian producer of software and consumer electronics, has been no fan of cryptocurrency ever since the sector gained steam back in 2012. 

But until its competitors, like Google PlayStore — which is relatively better in terms of supporting the listing of crypto apps — Apple’s anti-crypto policies have proven difficult for entrepreneurs in the space hoping to cater to the iOS market.

And it’s not only smaller upstarts facing the burnt. Even behemoths like Coinbase —  a firm rumored to have an $8 billion valuation as per earlier reports — face perennial issues, which CEO Brian Armstrong detailed in a Twitter thread last week.

Coinbase CEO questions Apple policies

Armstrong started off by noting, “Why would Apple want to prevent people from earning money during a recession? They seem to not be ok with it if it uses cryptocurrency. This is what our Coinbase Earn product does.” He was referring to the broader burrowing and lending market in the crypto space, one that was gained prominence in recent months across both centralized players and “DeFi” protocols like Curve and Yearn Finance.

He then stated that even while Coinbase liaises with Apple to develop a product that conforms with the latter’s policies, it ends up diminishing the user experience. “We sometimes end up in bizarre negotiations with them, modifying the product, and asking users to jump through hoops (do a task on mobile, then move to the web to claim your reward!) to comply with their guidelines,” said Armstrong.

Armstrong said that DeFi and dApps are a “major area of innovation in financial services that has seen rapid growth lately.” The firm has listed several DeFi-centric projects in recent times, such as Compound and YFI. However, Apple’s policies mean users cannot easily interact with the networks via Coinbase.

He explained the view:

“There are many unbanked and underbanked people in the world who have no ability to get a loan to buy a home or start a business, so this kind of technology has enormous potential to improve the world over time, even if it is still early days.”

He ended:

“Recently Apple announced a way for developers to suggest updates to the App Store policies. Our team is planning to submit a formal request for Apple to allow its users to earn crypto and see a list of decentralized finance apps.”

Apple policies understandable?

Meanwhile, not everyone was against Apple’s decision to delist crypto applications based on security issues and consumer concerns. The general consensus was that Apple had a good reason to disallow cryptocurrencies based on the infamous aspects of the crypto market — the frauds, the scams, and the malicious actors.

 “CryptoWhale,” a popular, anonymous commentator of the crypto markets on Twitter, said of the Coinbase CEO’s comments:

Gabor Gurbacs, the director of digital assets at ETF provider VanEck, shared the sentiment:

Which side are you on?

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Crypto.com launches CRO-centric DeFi Swap as competition builds up

Hong Kong-based crypto exchange and wallet provider Crypto.com announced its new DeFi Swap service for all users, as per an announcement today.

Centralized exchanges are starting to take note of the burgeoning DeFi industry. Sky-high yields provided by protocols like SushiSwap and Yearn Finance have caused a massive migration of liquidity from traditional crypto exchanges to DeFi.

But not one to be left behind, exchanges are coming out with their own products. While Binance launched its Binance Pool earlier this week, Crypto.com came out with its DeFi Swap Service on Friday.

A CRO farming DeFi Swap

As per details, the DeFi Swap is based on the Ethereum mainnet and allows users to farm tokens by contributing to liquidity pools in three ways:

  1. Swap Fee Sharing: LP’s will be rewarded by sharing 0.3% of the trading volume of respective liquidity pools.
  2. CRO DeFi Yield: for LP’s who also stake CRO: LP’s can stake CRO to boost their yield by up to 20x and harvest the daily yield in as little as 30 days.
  3. Bonus LP Yield: for LP’s of selected pools: LPs will receive tokens redeemable for additional coins of participating DeFi projects

Users can use any compatible wallet to engage with the protocol, such as MetaMask. Crypto.com will also launch its own DeFi Wallet in the coming days, creating value for its own ecosystem in that manner.

Image: DeFiSwap by Crypto.com

For starters, Crypto.com will guarantee a minimum reward pool of 14,000,000 CRO for the first 14 days (1,000,000 CRO per day). At launch, users can swap between any two supported tokens including both CeFi and DeFi tokens, such as Wrapped Ether, Tether, DAI, Chainlink, Compound, and Crypto.com Coin.

To quell any concerns around potential users, Crypto.com said that DeFi Swap is a fork of Uniswap V2, and has in turn been audited by Crypto.com’s security team and blockchain researchers at SlowMist, a third-party blockchain security service.

Managed by Crypto.com

DeFi Swap is open-source and all community proposals are welcome for the betterment of the application. But as such, Crypto.com will act as the maintainer of the underlying code and will actively contribute towards its development.

Meanwhile, Crypto.com’s CRO tokens experienced an immediate price surge on the announcement:

Image: TradingView

The tokens went up almost 10% as traders presumably picked up CRO for the purpose of earning yields on their investment and engaging with the protocol.

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More than 20,000 Bitcoin was poured into DeFi last week

Fanatics of the burgeoning decentralized finance (DeFi) space injected a record amount of Bitcoin into Ethereum-based protocols, searching for high yields and finding a way to earn funds on their capital.

Bitcoin moves to DeFi

According to tracking site DeFiPulse, more than 20,000 Bitcoin was poured into DeFi protocols last week. The move came as the crypto market temporarily saw declines of over 10-20% across the board.

The massive injection of Bitcoin meant a record level of the pioneering digital asset is now locked onto Ethereum-based dApps. This is as most “yield farms” are based on the latter, allowing users to lock up capital and gain over 1,000% annualized interest rates, while uses for Bitcoin range from only transfer of money to speculation.

Total USD locked on to DeFi protocols. Image: DeFi Pulse

The locked BTC increased from over 67,038 BTC (approximately $694 million) on Sep 2 to the current all-time high of 87,752 BTC (approximately $904 million), representing an increase of 30.9%. The figure is almost 20 times more than the amount of Bitcoin on the Lightning Network.

At press time, more than 50% (51,295 BTC) of the locked BTC sits on Ethereum in wBTC, which accounted for 63% of the BTC growth in the past week, locking an additional 13,000 wBTC on the network.

Another such protocol, RenVM, also holds 17,630 BTC locked at press time: A growth of more than 2,500 BTC since the start of the month.

Growth higher than the famed Lightning Network

Compared to those figures, Bitcoin’s Lightning Network holds just 1.2% (1,061 BTC) of the total Bitcoin locked in DeFi. It also grew by just 4 BTC, less than 0.02% of BTC’s total growth, in the first week of September.

Meanwhile, the 198 BTC added to the layer-2 network in 2020 represented a growth of over 23%, but it is dwarfed by wBTC’s addition of over 50,000 BTC — a growth of over 8600%.

Despite 600,000 Ether being removed from DeFi protocols, Bitcoin is still in a distant second place. It accounts for less than half the $2 billion value of Ethereum’s 5.6 million locked coins. In total, almost 5% of Ethereum’s circulating supply is now locked in DeFi.

Ethereum is still the choice of blockchain among issuers. As per CryptoSlate’s data page, the top-15 DeFi tokens and projects operate on the Ethereum network and lock up billions of dollars.

Image: CryptoSlate

As a consequence, the activity has caused immense congestion and strain on the network with fees spiking up to over $60 per transfer.

And that might just be getting started, especially if the market attracts billions of dollars from new users in China.

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Why a top analyst says Ethereum DeFi is a bubble that will pop soon

The decentralized finance (DeFi) market has been jeweled with equal parts optimism and suspicion. There have been both extremes: Some have made millions of dollars “farming” yields by locking up their crypto holdings while some have lost big amounts to DeFi scams.

But while space continues to develop and such teething problems can be expected from any rising innovation, a prominent analyst says the DeFi market shows all classic signs of a bubble — one that ends in tears.

Insiders dumping on retail

Ryan Selkis, the founder of crypto data and analytics site Messari, said on a tweet thread that the DeFi space will end similar to how initial coin offerings (ICOs) did, eating up millions of dollars from gullible investors while rewarding the few.

“The DeFi bubble will pop sooner than people expect,” said Selkis. He added, “We’re nearing the apex of Ponzi economics, rug pulls, and ‘yield’ hopping and ETH fees are going to eat too heavily into non-whale profits.”

Even since DeFi project Compound launched in June, it led to a frenzy of new yield farms — with oft-funny sounding and their corresponding meme coins — that advertised returns of 1,000%, even 100,000%.

While there are legitimate projects like Yearn Finance, there have been many more scams, like Kimchi Finance, Soft Yearn, and others. Another project, SushiSwap, also almost hinged on being an exit scam when its anonymous founder, “Chef Nomi,” said he sold nearly $13 million worth of SUSHI tokens.

“ICOs boomed for a while because everyone (laughably) thought there would be a coordinating utility token for every industry,” noted Selkis said in a follow-up tweet. He added:

“DeFi is just one big pool of capital sloshing around a small group of insiders and mercenaries who will soon run out of victims to fleece.”

DeFi similar to ICO boom

Selkis referred to how ICOs — back in 2017 — similarly promised world-changing returns to investors and raised millions of dollars with just a website and a meaningless whitepaper (not even the latter in some cases). 

That said, the Messari founder maintained he remains bullish on the underlying premise of how yield farms or DeFi projects could contribute in the broader economy:

“Fwiw [for what it’s worth], I LOVE this experimentation. Like ICOs, yield farming / incentivized liquidity provisioning is a novel innovation in capital formation. But I don’t recommend DeFi to most people because I don’t recommend high-stakes Vegas poker to fish.” 

Meanwhile, ex-Messari product head Qiao Wang said on Twitter that this year’s DeFi boom was similar to pre-2013 Bitcoin and pre-2015 Ethereum levels. He stated it represented a “once-in-a-lifetime asymmetric bet.”

It’s all about the horse you pick to bet on.

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Bitcoin and gold are at their highest correlation ever, data shows

The case for Bitcoin as a proven hedge for the global equity market may have failed temporarily, at least per recent data.

Bitcoin, gold correlation reaches record high

Data analytics and media firm Bloomberg said in its latest crypto newsletter that as per recent findings, the correlation between Bitcoin (BTC) and gold is at its highest level since 2010.

Bitcoin and gold correlation. Image: Coin Metrics.

The findings come as Bitcoin, gold, and the broader financial markets have been one trade since March this year — everything dumped by over 40% that month over fears of the coronavirus, only to regain that value and surge higher in the coming months.

Same chart, different assets. Image: TradingView

As the above chart shows, regardless of the tracking service you use, the correlation of prices between Bitcoin and gold are similar. They start rising around the same date, show pullbacks and spikes on the same date, and start moving around the same dates as well.

However, despite their visual similarity, Bloomberg argued the correlation ratio isn’t exactly one.

“On a 12-month basis, the quasi-currencies are about 0.80 correlated, the highest in our database since 2010, explained Mike McGlone, the firm’s senior commodity analyst and author of the newsletter. He added:

“Bloomberg default and simple percentage change function. The percentage monthly changes on a rolling 12-month basis, past 12-months, the highest in our database.”

Meaning that instead of determining the correlation daily, Bloomberg calculates the interrelation of this data on a monthly basis, hence the difference.

Tech stocks behind the plunge?

Meanwhile, McGlone said that the recent plunge in Bitcoin and cryptocurrency prices last week were a result of a dip in the NASDAQ tech index, a collection of US-listed technology are infamous for their volatility and quick price movements.

However, he had good news for Bitcoin bulls. McGlone added that if gold were to maintain its price above the $1,900 level, Bitcoin was to similarly stay above $10,000.

While the development is odd considering Bitcoin’s ethos of being uncorrelated to fiat currencies or equities, the resemblance could be the result of trading firms operating similar strategies across asset classes, as quant trader Qiao Wang noted in a tweet:

Wang added it was likely high-frequency teams trading at short time intervals that were making the two asset classes correlate instead of a discretionary fund.  “Well look at the high-frequency data. The correlation is strong at a very high frequency / short time frame. It’s more likely algo than discretionary trading,” said Wang.

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RenBTC and UMA are bringing yield farming to Bitcoin holders

Bitcoin fanatics may not need to wait much longer for them to farm sky-high yields on the digital asset if an upcoming product launch goes as planned.

Permissionless synthetic asset platform UMA and trustless cross-chain bridge Ren have partnered to launch a Bitcoin-backed yield dollar called uUSD, as per an announcement. The collab will also see the start of a joint liquidity mining reward program that utilizes Bitcoin.

Yield farming your Bitcoin

For the uninitiated, yield farming sees stablecoin and Ethereum holders lock up their tokens on pools like Uniswap, Curve, and Balancer, in turn receiving a portion of fees accrued from the traders on those platforms. 

Holders of these pool tokens can, in turn, go lock up their tokens on newer products, like Sushiswap, in turn receiving — or “farming” — tokens like Sushi. And so far, the frenzy caused some tokens to surge over 100,000% from initial prices and even attracted billions of dollars in locked liquidity.

But Bitcoin’s coming for that. As per details of the Uma-Ren partnership, the product would allow investors to leverage their Bitcoin holdings on the Ethereum network. Doing so would provide a “uUSD” token. 

The product will be UMA’s second such yield dollar offering after the firm launched the Ethereum-backed yield dollar, the yUSD, in July 2020.

Here’s how yield dollars — which are similar to stablecoins but have a key difference — work: They have an expiry date, similar to how futures contract trade on exchanges and prices are engineered to approach $1 closer to that date. 

After expiry, holders can redeem their tokens for $1 worth of the collateral asset at the exact time of expiry. And as they are minted at less than a dollar, holders stand to gain a fixed amount.

RenBTC and UMA pools

To engage in the offering, users will have to purchase renBTC, a tokenized Bitcoin, and lock it as collateral with UMA in order to mint uUSD tokens. The newly-minted tokens can then be used to purchase more renBTC, which can be pooled in turn, or for investments on other DeFi protocols that offer uUSD pools.

In the start, to incentivize yield farmers, the new joint pool will receive 10,000 UMA and 25,000 REN tokens per week. However, an annual percentage rate — like the current 1,000 APYs on some SushiSwap pools — is not fixed and will depend on how much liquidity is provided over the entire seven day period.

The development comes as the amount of Bitcoin tokenized on the Ethereum network has surged 1350% since July, and currently stands at just below 78,000 BTC.

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FTX founder proposes a plan for DeFi project SushiSwap

After being handed over the admin keys for the Uniswap fork project SushiSwap this weekend, Sam Bankman-Fried, the founder of crypto exchange FTX, proposed a future plan for the project over Twitter.

Tokenomics and a multisig vote

Bankman-Fried said that first and foremost was ensuring the project’s migration was successful. This means moving over $180 million worth of Sushi tokens locked up on a liquidity pool from decentralized exchange Uniswap to SushiSwap.

Next was making sure multisig transition happens, said the FTX founder. This implied nominating nine members of the SushiSwap community to hold the private keys to SushiSwap’s treasury and to vote on any further changes proposed by the community. Voting for this is currently active and ends on September 9.

Next was “getting as much TVL through the transition as possible,” said Bankman-Fried.

He then suggested changes to Sushi’s token economics. As per tracking site CoinGecko, the token’s current circulating supply is 75 million SUSHI tokens, with a total supply of 77.4 million. At current prices, the protocol is valued at over $195 million.

But Bankman-Fried said “supply should be reduced.  Part of this will happen naturally as the inflation dies down,” refering to the community’s demand for diminishing Sushi’s total supply.

He then stated that Sushi rewards must be locked for holders. Currently, the strategy for Sushi “farmers” is to dump their newly harvested Sushi tokens on the open market for capitalizing on gains or to repurchased at a lower price.

This has, understandably, created constant downward pressure on the token. However, Bankman-Fried proposed a solution in regard:

“Maybe take the current schedule, but make 1/6 of the SUSHI unlocked, 1/3 locked for 1 year, and reduce the rate by 50%. That means that SUSHI stakers have a long term interest in the health of the platform, and also that circulating supply is lowered.”

Sushi on Serum?

Apart from the above proposals, Bankman-Fried suggested building a Sushi branch on Serum, a decentralized exchange developed and headed by the entrepreneur.

As CryptoSlate reported earlier, Serum is a Solana-based platform that boasts one-second latency times for users and transaction fees less than 1/100th of a cent. It recently announced that high-frequency trading firm Jump Trading will become a liquidity provider on the exchange, ensuring fast fills and low slippage for users.

And Bankman-Fried could merge those capabilities with Sushi. “That’s 1-second orders, $0.00002 gas, 100% on-chain order book/matching engine.  Imagine if Sushiswap was that fast and cheap and powerful,” he said in a tweet, concluding the brief thread.

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Here’s why analysts say SUSHI tokens are worth only $0.31

Sushi, the governance-cum-liquidity pool tokens for SushiSwap, have seen an unexpected boom in their nascent lifespan in terms of both prices and controversies.

Not only did the token’s founder, the anonymous Twitter account “Chef Nomi,” sell over $10 million in return for their “week’s worth” of work before handing over admin keys to FTX founder Sam Bankman-Fried, but Sushi prices also zoomed nearly 1,300% from a few cents to over $12.40.

However, one company says that the supposed utility of the Sushi token, that of allowing decentralized governance based on community inputs, is overstated and is likely behind the token’s massive overvaluation.

Inflation leading to unsustainable prices

In a blog post this week, on-chain analytics firm Glassnode said Sushi served these two fundamental points for users:

  1. Revenue share – The SushiSwap protocol takes a 0.3% fee on each trade; 0.25% goes to liquidity providers, and the remaining 0.05% is converted into SUSHI and distributed to SUSHI token holders as the 0.05% reward amount.
  2. Governance – SUSHI holders can use their tokens to vote on governance proposals regarding changes and upgrades to the protocol.

However, Glassnode analyst Liesl Eichholz expressed her concerns, “although the value of protocol governance should not be understated, it is difficult to quantify.”

“Similarly, the hype value of yield farming projects (especially in markets such as these) is not easily quantifiable,” she said.

Image: Glassnode

Eichholz pointed out that SushiSwap’s primary mechanism of rewarding liquidity providers with Sushi tokens to sell on the open market to book profits led to drastic inflation, one that benefited pool holders but not retail investors.

“Investors should be aware: anyone holding SUSHI without providing liquidity will be diluted. As such, investors looking at buying SUSHI should do so with caution and with an understanding of the risks behind the underlying token mechanics.”

Sushi just $0.13?

While SushiSwap has an in-built 0.05% buyback mechanism that can help maintain its inflation rate; a certain amount of daily trading volume must be sustained to maintain a given price.

Image: Glassnode

And that’s wherein the valuation issue arises. The report said that without significantly high volumes, SUSHI prices above $10 were “preposterous and unsustainable.”

Eichholz noted:

“In reality, assuming that SushiSwap captures a more realistic daily trading volume of $400 million, the sustainable price for SUSHI would be $0.31 – a full 97% lower than its all-time high of $11.93.”

But that does not necessarily mean a decline for Sushi prices in the short-term. Eichholz stated prices were likely to remain inflated in the short term due to hype and a lack of fundamental understanding among retail investors.

Sushi trades at $2.30 at press time as per data on FTX. It is down over 81% from an all-time high of $12.40 on September 1.

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Here’s why analysts say SUSHI tokens are worth only $0.31

Sushi, the governance-cum-liquidity pool tokens for SushiSwap, have seen an unexpected boom in their nascent lifespan in terms of both prices and controversies.

Not only did the token’s founder, the anonymous Twitter account “Chef Nomi,” sell over $10 million in return for their “week’s worth” of work before handing over admin keys to FTX founder Sam Bankman-Fried, but Sushi prices also zoomed nearly 1,300% from a few cents to over $12.40.

However, one company says that the supposed utility of the Sushi token, that of allowing decentralized governance based on community inputs, is overstated and is likely behind the token’s massive overvaluation.

Inflation leading to unsustainable prices

In a blog post this week, on-chain analytics firm Glassnode said Sushi served these two fundamental points for users:

  1. Revenue share – The SushiSwap protocol takes a 0.3% fee on each trade; 0.25% goes to liquidity providers, and the remaining 0.05% is converted into SUSHI and distributed to SUSHI token holders as the 0.05% reward amount.
  2. Governance – SUSHI holders can use their tokens to vote on governance proposals regarding changes and upgrades to the protocol.

However, Glassnode analyst Liesl Eichholz expressed her concerns, “although the value of protocol governance should not be understated, it is difficult to quantify.”

“Similarly, the hype value of yield farming projects (especially in markets such as these) is not easily quantifiable,” she said.

Image: Glassnode

Eichholz pointed out that SushiSwap’s primary mechanism of rewarding liquidity providers with Sushi tokens to sell on the open market to book profits led to drastic inflation, one that benefited pool holders but not retail investors.

“Investors should be aware: anyone holding SUSHI without providing liquidity will be diluted. As such, investors looking at buying SUSHI should do so with caution and with an understanding of the risks behind the underlying token mechanics.”

Sushi just $0.13?

While SushiSwap has an in-built 0.05% buyback mechanism that can help maintain its inflation rate; a certain amount of daily trading volume must be sustained to maintain a given price.

Image: Glassnode

And that’s wherein the valuation issue arises. The report said that without significantly high volumes, SUSHI prices above $10 were “preposterous and unsustainable.”

Eichholz noted:

“In reality, assuming that SushiSwap captures a more realistic daily trading volume of $400 million, the sustainable price for SUSHI would be $0.31 – a full 97% lower than its all-time high of $11.93.”

But that does not necessarily mean a decline for Sushi prices in the short-term. Eichholz stated prices were likely to remain inflated in the short term due to hype and a lack of fundamental understanding among retail investors.

Sushi trades at $2.30 at press time as per data on FTX. It is down over 81% from an all-time high of $12.40 on September 1.

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These countries are leading Bitcoin adoption, and it’s not the US

The current economic superpowers would have been a surefire bet some years ago to lead blockchain and cryptocurrency adoption in the world. However, the data shows this is not the case.

LatAm leads in Bitcoin adoption

In its latest report on global crypto adoption, on-chain analytics firm and security provider Chainalysis said that of the top ten nations where the usage of Bitcoin is the highest, only two feature in the list: China and the US.

The firm used its proprietary tracking tool, the so-termed Global Crypto Adoption Index, to chalk out the listings. The latter measures each country’s population and the total size of its economy when assessing four factors, namely: on-chain cryptocurrency valued received, on-chain retail value transferred, number of on-chain crypto deposits, and exchange trade volume.

Image: Chainalysis

As per Chainalysis, such a method helps find the “intention to highlight the countries where most residents have moved the biggest share of their financial activity to cryptocurrency.”

The firm added that while trading and speculation are important to the cryptocurrency economy, “we wanted our index to emphasize grassroots adoption by everyday users.”

On the Global Crypto Adoption Index accounts for the 154 countries that Chainalysis tracked, it found that Russia, Venezuela, and Ukraine lead in terms of crypto adoption. Others on the list are China, Kenya, the US, South Africa, Nigeria, Colombia, and Vietnam.

What’s up with Venezuela and Columbia?

In South America, Venezuela and Colombia — two countries marred with a corrupt government and rising inflation — have led the way in Bitcoin trading volume. Of those, Venezuela has been a “case study” for Chainalysis:

“Venezuela represents an excellent example of what drives cryptocurrency adoption in developing countries and how citizens use it to mitigate economic instability.”

The firm said Venezuelans have started to use more cryptocurrency more as its “native fiat currency is losing value to inflation,” which in turn suggests that using the new asset class is a way to “preserve savings they may otherwise lose.”

Meanwhile, Columbia, ninth on the Chainalysis list, apparently leads crypto adoption despite the strict regulations governing the industry in the country.

A Bitcoin ATM in Columbia. Image: Bitcoin ATM

However, the firm noted that lawmakers in Colombia are actively working to make the country more “Bitcoin friendly” by instilling new regulations for crypto trading and related activities. 

One added fundamental point is the rising number of Bitcoin ATMs and payment fintech in Colombia, that show a potential boom in the country’s local crypto industry, said Chainalysis.

The post These countries are leading Bitcoin adoption, and it’s not the US appeared first on CryptoSlate.

This “Bitcoin bank” wants to offer a £40 million IPO in London

A London-based Bitcoin wallet company is reportedly considering a public listing in the UK in the coming months, according to British news outlet Telegraph.

Bitcoin app plans to go public

Weeks after a new Bitcoin exchange-traded fund (ETF) was approved to trade in Europe, a Bitcoin-centric company is plotting out a public offering of its own.

Mode Banking, based in London and providing banking support for British pounds, US dollars, and Bitcoin, is reportedly in talks with regulators to file a £40 million stock listing on the UK equity markets. 

It is also looking to raise £7.5 million ($9.87 million) from investors ahead of the flotation, said the report. The firm had raised £4 million ($5.26 million) from earlier investors in a private round.

The platform is available to users globally, except in the US. A Mode account can be opened in less than 60 seconds, with Know Your Customer requirements completed in less than two minutes through AI-enabled identity verification technology. Once users are whitelisted, depositing GBP via bank transfer and buying Bitcoin takes seconds.

Mode said its launch came after immense demand for digital currencies among the general public, and research suggested most crypto users were “unhappy” with the types of platforms and services on offer.

At the time, the firm cited an independent survey that found over 42% of people who currently own Bitcoin plan to buy more, whereas 51% of people surveyed indicated they may buy Bitcoin soon. Only a small fraction of respondents, around 7%, said they have no intention of currently buying the digital asset, as per the research.

BitGo to serve as Bitcoin custodian

Meanwhile, all customer assets on Mode will be held on custodial provider BitGo, which itself boasts insurance coverage for up to $100 million through Lloyds of London.

BitGo provides institutional clients with security, custody, and liquidity solutions. BitGo processes over 20% of all global Bitcoin transactions and the company’s client base spans more than 50 countries – including some of the world’s largest cryptocurrency exchanges.

A Bitcoin app may go public on the London Stock Exchange. Image: Rediff

Through BitGo, Mode users will have their own highly secured, individual Bitcoin accounts with full, round-the-clock access to their holdings. Assets will be held collectively across cold, warm, and hot wallets.

Behind Mode Banking is Jonathan Rowland, who previously founded online investment company Jellyworks in 2000, around the time when the infamous internet boom took place.

Jellyworks was listed on the London Stock Exchange and soared to over $300 million on its first day, before the hype gradually died down and brought the stock back to $67 million. The firm was later acquired by investment bank Shore Capital for £60 million in 2002.

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Ethereum devs discuss high Gas fees…but there’s no quick solution

Core developers of the Ethereum network discussed the network’s unusually high fees in recent weeks on an All Cores Devs call. Among the topics were various Ethereum Improvement Programs (EIPs) to help alleviate the fee issue.

DeFi brings Ethereum to an old issue

The booming decentralized finance (DeFi) space has brought forth the same issues that Ethereum faced back in 2018 as the blockchain game CryptoKitties rose to prominence: high fees and a congested network leading to transactions stuck for hours or costing over $60 to be executed quickly.

Three years later, the issue still exists. The rise of DeFi applications, yield farming dApps, and funny-sounding token games has strained the Ethereum network once again, with fees costing a minimum of $15 to execute a smart contract. They even reached over $1,200 in an isolated instance last month.

But Ethereum developers have taken note. Various EIPs are lined up to battle the high fee issue, the latter representing a critical part of Ethereum’s long-term growth. On the Ethereum All Core Devs call last Friday, they discussed a variety of such proposals.

Alexey Akhunov, an independent Ethereum researcher, started with a comment on the existence of Gas-pegged tokens and how they could push prices higher than normal.

Current fees on the Ethereum network. Image: ETH Gas Station

He said Ethereum’s mempool is cluttered with several transactions which automatically bid a certain gas price to mint new tokens, similar to a strategy used by centralized exchanges to fill their order book for influencing traders.

Akhunov added that while orders can be canceled repeatedly at no cost on centralized exchanges, they, by design, cannot on the Ethereum network and hence lead to ever-increasing Gas prices. However, he noted such instances may account for only 2% of the current Gas usage.

“Batched transactions”

The EIP-2711 also saw a discussion on the call, with developers pointing out it could have a significant impact on the broader user experience. Per details, this proposal calls for a user’s Gas fees paid by other users by creating “batched transactions” that executed in the same order as they were submitted.

The discussion comes ahead of Ethereum upcoming 2.0 shift to a proof of stake consensus design, which sees the network move away from the current proof of work system in order to scale efficiently and reduce costs for network transactions.

But 2.0 may not be coming anytime soon. While some reports earlier said the update would be rolled out by December this year, developers have since suggested further delays can be expected.

The post Ethereum devs discuss high Gas fees…but there’s no quick solution appeared first on CryptoSlate.

Ethereum devs discuss high Gas fees…but there’s no quick solution

Core developers of the Ethereum network discussed the network’s unusually high fees in recent weeks on an All Cores Devs call. Among the topics were various Ethereum Improvement Programs (EIPs) to help alleviate the fee issue.

DeFi brings Ethereum to an old issue

The booming decentralized finance (DeFi) space has brought forth the same issues that Ethereum faced back in 2018 as the blockchain game CryptoKitties rose to prominence: high fees and a congested network leading to transactions stuck for hours or costing over $60 to be executed quickly.

Three years later, the issue still exists. The rise of DeFi applications, yield farming dApps, and funny-sounding token games has strained the Ethereum network once again, with fees costing a minimum of $15 to execute a smart contract. They even reached over $1,200 in an isolated instance last month.

But Ethereum developers have taken note. Various EIPs are lined up to battle the high fee issue, the latter representing a critical part of Ethereum’s long-term growth. On the Ethereum All Core Devs call last Friday, they discussed a variety of such proposals.

Alexey Akhunov, an independent Ethereum researcher, started with a comment on the existence of Gas-pegged tokens and how they could push prices higher than normal.

Current fees on the Ethereum network. Image: ETH Gas Station

He said Ethereum’s mempool is cluttered with several transactions which automatically bid a certain gas price to mint new tokens, similar to a strategy used by centralized exchanges to fill their order book for influencing traders.

Akhunov added that while orders can be canceled repeatedly at no cost on centralized exchanges, they, by design, cannot on the Ethereum network and hence lead to ever-increasing Gas prices. However, he noted such instances may account for only 2% of the current Gas usage.

“Batched transactions”

The EIP-2711 also saw a discussion on the call, with developers pointing out it could have a significant impact on the broader user experience. Per details, this proposal calls for a user’s Gas fees paid by other users by creating “batched transactions” that executed in the same order as they were submitted.

The discussion comes ahead of Ethereum upcoming 2.0 shift to a proof of stake consensus design, which sees the network move away from the current proof of work system in order to scale efficiently and reduce costs for network transactions.

But 2.0 may not be coming anytime soon. While some reports earlier said the update would be rolled out by December this year, developers have since suggested further delays can be expected.

The post Ethereum devs discuss high Gas fees…but there’s no quick solution appeared first on CryptoSlate.

Yield farming frenzy has led to massive Ethereum, Tether withdrawals in China

The ongoing rush for “yield farming” in the crypto market has reportedly led to Chinese investors withdrawing funds from exchanges in the country to lock them up on obscure protocols that promise high yields, said local outlet WuBlockchain earlier today.

Ethereum withdrawals surge in China

Colin Wu, a reporter focused on the local blockchain and cryptocurrency sector in China, said that on September 6, “many exchanges in China experienced difficulties in withdrawing coins and shutdowns.”

He claimed it was caused by the Chinese crypto community withdrawing liquidity en masse and transferring millions of dollars worth of Tether and other altcoins to yield farming projects like Yearn Finance and SushiSwap.

Wu supported the claim using data from CryptoQuant, an on-chain analytics firm. He said the recent price drop over this weekend caused investors to buy the dip and then transfer to decentralized exchanges, like Uniswap, to exchange to other tokens.

The data showed exchange “reserves” — or the number of cryptocurrencies present on any exchange at a given time for trading — saw a significant dip. Bitfinex and Kucoin, two popular crypto exchanges, were the most affected.

Wu added in a follow-up tweet:

“The “withdrawal movement” is widely spread, but the actual impact is uncertain. Exchanges are also starting to defend, such as a crazy listing of DeFi coins to make users gamble in the secondary market, and helping users with yield farming.”

DeFi’s “crazy” rush

Wu’s comment came as crypto exchange Binance launched its “Launch Pool” service on Sunday to provide yields using its BNB token. In an announcement, Binance said BNB holders opting for Launch Pool will automatically receive interest on projects that issue their tokens on the Binance chain, starting with Bella Protocol yesterday.

The rush for DeFi listings and yield farming has picked up massively in the past month, with projects locking up hundreds of millions upon launch in a reminiscent of 2017’s infamous ICO bubble.

Ethereum is still the choice of blockchain among issuers. As per CryptoSlate’s data page, the top-15 DeFi tokens and projects operate on the Ethereum network and lock up billions of dollars.

Image: CryptoSlate

As a consequence, the activity has caused immense congestion and strain on the network with fees spiking up to over $60 per transfer.

And that might just be getting started, especially if the market attracts billions of dollars from new users in China.

The post Yield farming frenzy has led to massive Ethereum, Tether withdrawals in China appeared first on CryptoSlate.

Inside 12 hours of Sushi: Chef sells, community laughs, FTX founder gains

Expect crypto to deliver even if you’re not searching. Over just 12 hours starting September 5, Uniswap fork SushiSwap saw its founder sell their holdings, to the community terming it a “rug pull,” to the founder of FTX eventually taking over the doomed project’s private keys.

Sushi founder dumps tokens

On Saturday, “Chef Nomi,” the anonymous founder of the SushiSwap project and issuer of SUSHI tokens, said they sold their holdings to “stop caring about price” and instead “focus on the technicality of the migration.”

But instead of being heralded, the announcement was met with criticism from both the SushiSwap community and other industry observers. Some even suggested Chef Nomi had “exit scammed” after working for just two weeks on forked Uniswap code and ending up with $10 million worth of Ethereum after the sale.

However, Chef Nomi claimed there was no such intention of the project being a scam. They argued they would continue to develop SushiSwap into a better version of decentralized exchange Uniswap despite the selling.

FTX founder gains admin keys

In the hours since — facing heat on Twitter and attracting criticism from Ethereum co-founder Vitalik Buterin — Chef Nomi said they would transfer the project’s private keys to a worthy party; one that hopefully drives adoption, development, and the community further without SUSHI and SushiSwap ending up in the wastebins.

And that’s where FTX founder Sam Bankman-Fried stepped in. Bankman-Fried said on a tweet he was ready to temporarily take control. He added a diligent voting process will be carried out, one the broader crypto community could meet consensus on.

Nomi then transferred the control of SushiSwap to Bankman-Fried by handing over admin keys. “I hope SushiSwap does well without me,” they tweeted. “Again I did not intend to do any harm. I’m sorry if my decision did not follow what you expected.”

Governance to continue

At press time, Bankman-Fried holds the literal keys to SushiSwap’s future. Over the next weeks, governance votes on the project’s immediate future shall be carried by a team of to-be-elected multisig holders.

Meanwhile, Yearn Finance founder Andre Cronje raised questions about Chef Nomi “leaving” the project, even as the latter had earlier said they would continue with SushiSwap’s development after the tokens were sold.

For now, the Hollywood-worthy saga is closed. But you never know for sure when it comes to crypto.

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