Dinner is served: Here’s what DeFi’s food-meme tokens bring to the table

Food-themed meme tokens are the latest craze in the DeFi world. Here’s a look at the structure of the most popular ones.

Lately, in the crypto scene, everything related to decentralized finance is being considered a gold mine. While DeFi has brought solid projects to the industry, there’s also a hot new craze, and it’s related to food. Everything from yams to burgers is now being converted to a coin and sold like a tasty meal at a food fair, and investors can’t seem to get enough of these food-themed coins.

However, there are growing concerns over the sustainability of these DeFi projects. At the beginning of the month, Hotdog, a food-themed project, shed 99% of its value within minutes. The occurrence stirred a debate on the hype around these new projects.

It’s safe to say that right now, somewhere, a new DeFi food-meme protocol is cooking in some stove across the globe. Let’s explore some of the most popular meme tokens that have hit the market. How legitimate do they look, and do they have solid financial and governance structures?

SushiSwap/SUSHI

SushiSwap is the most recent DeFi liquidity-pool platform to emerge. With SushiSwap, anyone can participate, and investors can add their tokens into the liquidity pool to earn interest. The platform has become quite popular, as it attempts to be an improved, community-based version of the Uniswap decentralized exchange.

The token economics for its native token, SUSHI, are quite interesting, as 10% of its tokens were allocated to developers. Chef Nomi, the creator of SushiSwap, dumped all the tokens from the developer pool, worth around $13 million at the time, and later moved to distance themself from the project. Eventually, the funds were returned, and the project ended up at the hands of Chef Maki and the community.

Unlike traditional exchanges, SushiSwap is community-oriented, where users provide liquidity in return for rewards. With SushiSwap, the users are the market makers. It charges 0.3% on trades, and 0.25% is rewarded to liquidity providers while the remaining 0.05% is converted into SUSHI and rewarded to SUSHI tokenholders. It’s difficult to quantify the value of the protocol, which can only be estimated using the platform’s revenue-sharing model.

BurgerSwap/BURGER

Uniswap brought about a revolution in DeFi technology, and this has inspired a lot of projects. While SushiSwap is all about rewarding liquidity providers on the platform, matters of governance are not fully in the hands of the users. The protocol is entirely undemocratic, with unchangeable low staking rewards. With that in mind, sushi is thought of as food for the elite, but here enters BURGER, which is considered “food for everyone.”

BurgerSwap’s protocol allows for democracy; therefore, parameters are directly determined by the people. Its users can vote to change the exchange parameters, and what’s more, they get rewards whenever they participate in voting.

BurgerSwap was the first such protocol to be developed on the recently launched Binance Smart Chain. The project was seen by some as a clone of SushiSwap, and its token is available for trading paired with Binance Coin (BNB). The launch of BurgerSwap saw the price of BNB shoot up over 33% in less than 48 hours, which caused a stir on the crypto scene, sparking speculation that Binance’s CEO, Changpeng Zhao, is supporting the high-”frying” project.

Following its tremendous performance, a Medium post by the platform gave credit to Binance Smart Chain for its support. According to the blog, the team behind BURGER was spread across the United States, the United Kingdom, China and Turkey.

Yam Finance/YAM

Yam Finance is an experimental protocol with some of the most exciting innovations in programmable money and governance. At the core of Yam is an elastic supply of its native YAM token; it expands and contracts, depending on market conditions.

The price of the first version of YAM crashed to zero within minutes, due to a bug. After the project was called a scam by ShapeShift founder Eric Voorhees, Yam Finance posted a tweet claiming that the platform had a technical bug. An official blog post by Yam’s developers stated:

“At approximately 6PM UTC, on Wed August 12, we discovered a bug in the YAM rebasing contract that would mint far more YAM than intended to sell to the Uniswap YAM/yCRV pool, sending a large amount of excess YAM to the protocol reserve. Given YAM’s governance module, this bug would render it impossible to reach quorum, meaning no governance action would be possible and funds in the treasury would be locked.”

Since the crash, Yam has asked for patience as it carries out a four-week audit of the technical issues. Meanwhile, the development of Yam V3 is underway.

BakerySwap/BAKE

BakerySwap is the next form of Uniswap; it’s very similar, but it claims to be faster and cheaper. The BakerySwap protocol is democratic, and all liquidity providers will be rewarded with BAKE tokens, which will earn them a share of the platform’s trading fees and voting rights. BAKE tokens will be gradually released to liquidity pools, following their respective reward multiplier.

Early farmers will be greatly rewarded in terms of the initial BAKE per block release. An anonymous group of developers will receive a low share of rewards during the whole BAKE farming period. The reward will be 1 BAKE for every 100 BAKE farmed. However, Binance’s CZ has been called out in a tweet by Jay Hao, the CEO of OKEx, for supporting “sketchy DeFi projects.”

Pizza/PIZZA

Pizza is an EOS-based DeFi network that allows users to put their EOS tokens up as collateral to generate a stablecoin called USDE that is pegged to the U.S. dollar. The Pizza platform provides users with financial services that are already built in.

Some of these services include decentralized order-book trading through Pizza DEX, Chinese yuan fiat entry through Morecoin, instant asset swap through Pzaswap, asset liquidation functions, as well as an exclusive USDE investment program. Users generate PIZZA coins through mining. There is over 10 million PIZZA in supply and over 1 million in circulation.

Hotdog.Swap/HOTDOG

Hotdog.Swap is another Uniswap copycat, launched in early September. The HOTDOG token it provided was highly illiquid, surging in price to over $5,000 but then crashing from $4,000 to $1 in just five minutes. The tokens are quite similar to SUSHI, where liquidity providers deposit Uniswap liquidity tokens to earn HOTDOG tokens.

All HOTDOG tokenholders are entitled to earn part of the protocol-accumulated fees. The idea is that liquidity providers are rewarded with 100% community-owned tokens. The original idea was started by Yam Finance, which opened up the gates for numerous copycats such as Hotdog.

Kimchi Finance/KIMCHI

Kimchi Finance is one of the new DeFi products popping up since the introduction of Uniswap. Named after a rather popular dish in Korea, the KIMCHI token’s popularity hit the roof when news emerged that it was able to raise $500 million in a matter of four hours, reaching a value of $6.

Kimchi is following in the footsteps of SushiSwap by using a yield farming protocol, which promises great riches for those willing to invest. However, following the recent Bithumb raid that sunk the whole crypto market, KIMCHI experienced a 67% drop from $6 to around $1.90.

Meme/MEME

Although not food-related, MEME is very much a quintessential meme token. The experimental project came to life as an airdrop to Telegram users. Jordan Lyall created a joke advertisement for "The Degenerator,” which received a lot of engagement on Twitter from the crypto community. Hours later, Lyall shared that someone had minted a token and listed it on CoinGecko under the ticker MEME. 28,000 tokens, which was the asset’s total supply, were distributed to interested parties on Telegram. Now the token has managed to garner a $3 million market capitalization.

Meme is trying to pivot to a niche as a nonfungible token-farming protocol. The project has become the first meme farming experiment. However, a recent tweet from crypto influencer Alex Saunders has revealed that a few people are attempting to create hype around the token.

The future of food-themed meme tokens

There’s no denying that the above tokens have taken the whole crypto space by storm, mainly because of the quick succession in which they were introduced. A deeper look at the trend reveals similarities to the initial coin offering mania of 2017. Money is being pumped into these projects, while information about the developers and founders of most of them remains a mystery or is surrounded by controversy. These projects seem to thrive without the checks and balances of the blockchain network.

Related: Rise of DeFi wars? Uniswap’s UNI token airdrop starts a crypto rivalry

Ryan Selkis, the founder and CEO of crypto data site Messari, recently tweeted: "The DeFi bubble will pop sooner than people expect. 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.” But only time will tell if this sentiment is true and how long the hype will continue. Until then, crypto-entrepreneurs need to remain alert and look for any red flags that may wipe their investments in minutes.

Tether’s Stablecoin Dominance Drops Below 80% as Audit Controversy Lingers On

Tether's Stablecoin Dominance Drops Below 80% as Audit Controversy Lingers On On

The total volume of stablecoins in circulation is closing in on the $20 billion mark, while the market-leading coin, USDT’s share of the total circulating supply continues to shrink, data from Coinmetrics shows. According to the data, USDT now accounts for an estimated at 80% of total supply, and the majority of the coins are now issued on the Ethereum and Tron networks.

Out of the total supply, the USDT-ETH accounted for approximately 53% while USDT-TRX took just over 20% of USDT’s total circulating supply. On the other hand, USDC, which has a market capitalization of $2.53 billion according to Markets.bitcoin.com, now constitutes 13% of the total circulating supply.

Tether's Stablecoin Dominance Drops Below 80% as Audit Controversy Lingers On

The latest data, which was published on September 25, appears to show the continuing growth of the stablecoin circulating supply, a trend similarly observed in a Coinmetrics report of July. According to that report, the circulating supply of stablecoins had doubled to $12 billion. Then, Coinmetrics attributed the growth to an investor practice of converting volatile crypto assets to stablecoins when markets crash.

This practice was apparent in March of 2020 when the crypto market crashed alongside global stock markets. A global shortage of USD meant that many panicking investors were unable to move funds out of the cryptocurrency market quickly enough. Converting assets to stablecoins proved to be a useful option.

The latest stablecoin growth appears to be a result of increased interest in DeFi according to some experts. Defi users reportedly use stablecoins to obtain high returns from various defi platforms.

Meanwhile, in a seemingly unprovoked attack on USDT, a stocks and cryptocurrency rating organization, Weiss Crypto Ratings says USDC is its preferred stablecoin because it is subjected to audits. In a post on Twitter made prior to Coinmetrics’ latest data release, the rating agency asserts that:

“Unlike USDT, the USDC is subject to audits from at least five accounting firms. Based on these reports, USDC is more than 100% backed — which is why it is presently our preferred stablecoin.”

In another tweet, Weiss Crypto Ratings compares USDC to Tether, which it argues is not 100% backed. The rating agency repeats familiar allegations about Bitfinex’s controversial vaults that “are not publicly auditable.” In a recommendation to its followers, Weiss Crypto says “we recommend you avoid exposure to Tether.”

Interestingly, some Twitter users were quick to remind the rating company that auditing firms cannot always be trusted. One user asks:

“Well, but we know accounting firms are not to be trusted as well. Or have you forgotten about Wirecard? None of the accounting firms involved discovered/reported the fraud.”

Tether's Stablecoin Dominance Drops Below 80% as Audit Controversy Lingers On

In the meantime, the continuing defi craze, as well as the high network fees on some blockchains, will likely cause further growth of stablecoin circulating supply. However, it is unclear if the growth rate will match that of earlier in the year.

What do you think of the latest stablecoin supply growth? Share your thoughts in the comments section below.

The post Tether’s Stablecoin Dominance Drops Below 80% as Audit Controversy Lingers On appeared first on Bitcoin News.

This Technical Breakout Suggests Bitcoin Is Gearing For Another Lift-Off

Bitcoin started a fresh increase from the $10,140 swing low against the US Dollar. BTC broke the $10,550 resistance and it seems like the bulls are aiming a clear break above $11,000.

  • Bitcoin stayed above the $10,000 support and started a decent recovery wave.
  • The price is currently trading well above the $10,550 resistance and the 100 simple moving average (4-hours).
  • There was a break above a key bearish trend line with resistance near $10,600 on the 4-hours chart of the BTC/USD pair (data feed from Kraken).
  • The pair is likely to continue higher if there is a clear break above the $10,800 resistance.

Bitcoin Turns Green

This past week, bitcoin found support above the $10,100 level against the US Dollar. BTC remained well bid above the $10,200 level and recently started a steady recovery wave.

There was a break above the $10,350 and $10,400 levels. The main technical breakout was near the $10,550 resistance zone and the 100 simple moving average (4-hours). Moreover, there was a break above a key bearish trend line with resistance near $10,600 on the 4-hours chart of the BTC/USD pair.

Bitcoin climbed above the 50% Fib retracement level of the downward move from the $11,192 high to $10,140 swing low. It has opened the doors for more gains above the $10,700 level.

Bitcoin

Bitcoin price breaks $10,700. Source: TradingView.com

The price is now struggling to clear a key resistance zone near $10,800. It is close to the 61.8% Fib retracement level of the downward move from the $11,192 high to $10,140 swing low. A successful break and close above the $10,800 resistance could open the doors for more gains above the $11,000 resistance.

The next major resistance is near the $11,200 level, above which the bulls are likely to aim a larger increase towards the $11,500 level in the near term.

Dips Supported in BTC?

If bitcoin struggles to climb above the $10,800 resistance or the $11,000 barrier, it might correct lower. An initial support is near the $10,650 level.

The main support on the downside is near the $10,550 level and the 100 simple moving average (4-hours). A close below the $10,550 and $10,500 support levels may perhaps clear the path for a sustained decline.

Technical indicators

4 hours MACD – The MACD for BTC/USD is showing positive signs in the bullish zone.

4 hours RSI (Relative Strength Index) – The RSI for BTC/USD is now well above the 50 level.

Major Support Level – $10,550

Major Resistance Level – $10,800

Chinese Mining Rig Manufacturer Microbt Announces Offshore ASIC Factory

Chinese Mining Rig Manufacturer Microbt Announces Offshore ASIC Factory

On Friday, China-based bitcoin mining rig manufacturer Microbt announced plans to create an offshore facility that produces the company’s Whatsminer devices and parts for North America. The firm revealed the expansion news when it announced a recent partnership with the New York-based Foundry Digital LLC.

Microbt’s Whatsminer mining rigs have become popular during the last few years and the company has been able to obtain a large portion of mining device sales. On September 25, the China-based firm announced a partnership with Foundry and detailed it contracted a Southeast Asian firm to create Whatsminer equipment for U.S. customers.

News.Bitcoin.com reported on Foundry’s introduction at the end of August as the company is Digital Currency Group’s pledge to the bitcoin mining ecosystem.

In a press release sent to news.Bitcoin.com, Microbt said the partnership with Foundry and the creation of the offshore manufacturing operation will “strengthen the foothold in North America.” Moreover, the Southeast Asian manufacturer will allow for American purchases without the taxes invoked by the cold war between China and the U.S.

When U.S.-based individuals and companies purchase miners from China, they have to pay a 25% tariff.

“As a part of the new partnership, Foundry would be the first to receive the new batches of the M30S that Microbt plans to produce in Southeast Asia,” the announcement notes.

“We will continue working closely with Foundry to provide the highest quality of machines and after-sale services to our customers in North America,” Jiangbing Chen, COO of Microbt said during the announcement. “This would not only further decentralize Bitcoin’s hashrate but also secure the global network,” the Microbt executive added.

The news follows Bitmain’s recent partnership with Foundry announced on September 10. Bitmain is also eying North American buyers as well, with a shop set up in Malaysia and the recent partnership with Core Scientific revealed on September 17. The two firms plan to create a cooperative mining rig repair center in North America in order to “significantly reduce machine downtime.”

Mining, according to the third “Global Cryptocurrency Benchmarking Study” published by the University of Cambridge, is steadily reaching an “industrial scale.” Foundry’s collaboration with Microbt and the offshore shop hopes to fuel North American mining capabilities.

During the last few months, U.S. and Canadian mining operations have purchased large amounts of mining rigs from Chinese manufacturers. Firms like Marathon, Hut8, and Riot Blockchain have all announced purchasing next-generation miners from both Bitmain and Microbt.

“With our collaboration and Microbt’s upgraded production capabilities we look forward to continuing to facilitate the timely procurement and delivery of the latest generation bitcoin mining hardware for our clients, who are institutional (cryptocurrency) miners in North America,” said Mike Colyer, CEO of Foundry.

What do you think about Microbt revealing offshore operations and a partnership with Foundry? Let us know in the comments section below.

The post Chinese Mining Rig Manufacturer Microbt Announces Offshore ASIC Factory appeared first on Bitcoin News.

Chinese Mining Rig Manufacturer Microbt Announces Offshore ASIC Factory

Chinese Mining Rig Manufacturer Microbt Announces Offshore ASIC Factory

On Friday, China-based bitcoin mining rig manufacturer Microbt announced plans to create an offshore facility that produces the company’s Whatsminer devices and parts for North America. The firm revealed the expansion news when it announced a recent partnership with the New York-based Foundry Digital LLC.

Microbt’s Whatsminer mining rigs have become popular during the last few years and the company has been able to obtain a large portion of mining device sales. On September 25, the China-based firm announced a partnership with Foundry and detailed it contracted a Southeast Asian firm to create Whatsminer equipment for U.S. customers.

News.Bitcoin.com reported on Foundry’s introduction at the end of August as the company is Digital Currency Group’s pledge to the bitcoin mining ecosystem.

In a press release sent to news.Bitcoin.com, Microbt said the partnership with Foundry and the creation of the offshore manufacturing operation will “strengthen the foothold in North America.” Moreover, the Southeast Asian manufacturer will allow for American purchases without the taxes invoked by the cold war between China and the U.S.

When U.S.-based individuals and companies purchase miners from China, they have to pay a 25% tariff.

“As a part of the new partnership, Foundry would be the first to receive the new batches of the M30S that Microbt plans to produce in Southeast Asia,” the announcement notes.

“We will continue working closely with Foundry to provide the highest quality of machines and after-sale services to our customers in North America,” Jiangbing Chen, COO of Microbt said during the announcement. “This would not only further decentralize Bitcoin’s hashrate but also secure the global network,” the Microbt executive added.

The news follows Bitmain’s recent partnership with Foundry announced on September 10. Bitmain is also eying North American buyers as well, with a shop set up in Malaysia and the recent partnership with Core Scientific revealed on September 17. The two firms plan to create a cooperative mining rig repair center in North America in order to “significantly reduce machine downtime.”

Mining, according to the third “Global Cryptocurrency Benchmarking Study” published by the University of Cambridge, is steadily reaching an “industrial scale.” Foundry’s collaboration with Microbt and the offshore shop hopes to fuel North American mining capabilities.

During the last few months, U.S. and Canadian mining operations have purchased large amounts of mining rigs from Chinese manufacturers. Firms like Marathon, Hut8, and Riot Blockchain have all announced purchasing next-generation miners from both Bitmain and Microbt.

“With our collaboration and Microbt’s upgraded production capabilities we look forward to continuing to facilitate the timely procurement and delivery of the latest generation bitcoin mining hardware for our clients, who are institutional (cryptocurrency) miners in North America,” said Mike Colyer, CEO of Foundry.

What do you think about Microbt revealing offshore operations and a partnership with Foundry? Let us know in the comments section below.

The post Chinese Mining Rig Manufacturer Microbt Announces Offshore ASIC Factory appeared first on Bitcoin News.

Yearn.finance (YFI) Just Surged 20%: Moving Averages Show More Upside Is Likely

Yearn.finance (YFI) has surged higher in the past 24 hours despite stagnation in the price of Bitcoin and Ethereum. The leading cryptocurrency, which is in the top 30 by market capitalization, is up 20% in the past 24 hours, having moved from around $25,000 to $29,000 as of this article’s writing. It is one of the top-performing altcoins in the top 100.

Related Reading: MicroStrategy’s Stock Continues to Soar After Bitcoin Purchase

Yearn.finance (YFI) May Have Room to Rally After Retaking $29,000

Analysts say that YFI has room to move higher after gaining 20% in the past 24 hours.

One trader shared the chart below on September 26th. It shows that while YFI remains far below its all-time high, it recently secured a crucial exponential moving average that it held above during the previous rally.

YFI doing so, the trader explains, suggests that the ongoing rally has “juice.”

Image

Chart of YFI's price action over the past few weeks with analysis by crypto trader Crypto Krillin. Chart from TradingView.com
Related Reading: Critical On-Chain Signal Predicts That Bitcoin’s Next Move Will Be Upward

All of DeFi Set to Grow

Analysts think that all of the DeFi space is set to grow. With Yearn.finance acting as a pseudo-index for the entire market, YFI will benefit if the rest of the industry gains traction.

Andrew Kang, the founder of Mechanism Capital, recently touched on the topic of DeFi’s growth in an extensive Twitter thread.

Kang explained that the fundamentals and technicals of this industry suggest that DeFi is poised to move higher. Mechanism Capital previously came out with a report stating that YFI could hit $250,000-350,000 in the coming years assuming a bullish discounted cash flow analysis.

On DeFi as a whole, Kang explained:

“In terms of new funds entering, I’m aware of at least a dozen that have recently raised or just finished raising. Many of these intend to play in the public secondary markets. Unclear how much gets deployed over what timeline… In terms of DeFi activity growth, TVL continues to advance parabolically after a small dip even in the face of price stagnation indicating more assets moving in. For both public and private DeFi projects, the innovation and pace of development continues forward at a blistering pace – even faster than it was two months ago.”

Spencer Noon, head of DTC Capital, has echoed the optimism. He recently said that the fundamentals for Ethereum and Defi “have actually never looked better.”

As aforementioned, YFI stands to benefit from a further recovery in DeFi.

Related Reading: Ethereum Transaction Fees Surge to All-Time Highs After Uniswap Launch
Featured Image from Shutterstock
Price tags: yfiusd, yfibtc, yfieth
Charts from TradingView.com
Yearn.finance (YFI) Just Surged 20%: Moving Averages Show More Upside Is Likely

Chainlink Could Soon Push Towards $12.00 if Bulls Break One Key Level

Chainlink has been one of the most volatile altcoins throughout the past several days and weeks, with its buyers and sellers both vying for control over its near-term trend.

This has resulted in the cryptocurrency seeing some relatively large price movements, with a bout of capitulation sending it down to lows of $7.50 earlier this week before bulls stepped up and sent it surging to nearly $11.20.

The intensity of this rebound has boded well for bulls because it indicates that they still have significant underlying strength that may allow them to continue guiding its price action in the days and weeks ahead.

Some of its near-term trend may depend on Bitcoin, as the benchmark cryptocurrency has been guiding which direction altcoins like Chainlink trend.

One analyst is now noting that a move towards $12.00 could be imminent in the near-term.

He specifically believes that this will come about if bulls can continue holding it above $10.00 in the days ahead.

Chainlink Surmounts $10.00 as Analysts Eye Further Upside

At the time of writing, Chainlink is trading down just over 4% at its current price of $10.33.

Although LINK is still trading up significantly from where it was just a few days ago, the cryptocurrency has declined from daily highs of over $11.00.

It has found some stability around these highs, but this is now in jeopardy as its price drifts back down towards $10.00.

Earlier today, bulls did post an ardent defense of the $10.00 region, which allowed the cryptocurrency to see a slight bounce. If this level continues holding as support, it could enable it to see significantly further upside.

A break back below this level, however, could spark a sharp decline the jeopardizes its technical strength.

Analyst: Continued Defense of $10.00 Could Spark a 20%+ Move Higher

While speaking about where he expects Chainlink to trend in the near-term, one analyst observed that the state of its current uptrend hinges on the defense of $10.00.

He believes that a continued defense of this level could allow it to see some significant upside in the days and weeks ahead.

“Adding to Chainlink one dollar level at a time. After securing $10, will be watching for this break of $11 level. From there – the marines will unit together and storm towards the $12 level.”

Chainlink LINK

Image Courtesy of Josh Rager. Chart via TradingView.

Chainlink’s mid-term trend may remain at the mercy of Bitcoin and the rest of the crypto market, but the intensity of its rebound from its recent lows is promising.

Featured image from Unsplash.
Charts from TradingView.

Ethereum still not ready for DeFi, say some critics

Ethereum needs to fix its problems.

As DeFi projects flock to Ethereum, experts warn the network is not yet ready to support the frenzy.

Martin Froehler, a mathematician, former hedge fund manager, and founder of Austrian crypto trading platform Morpher, told Cointelegraph that although Ethereum is the “best thing [the blockchain industry] has” for DeFi, the current capabilities of the network are not enough:

“Ethereum can only handle about 15 transactions per second and has a block-time of 15 seconds, which is an eternity in finance. By design everyone interacting with it needs Ether. That is a huge barrier to entry and mass adoption.”

Froehler considers Ethereum the most decentralized smart contract platform. But because the network still has issues, developers have had to look for solutions to counter them. 

Froehler added: 

“There is cryptographic proof for everything that happens on the sidechain on Ethereum. (…) People are able [to] trade without needing Ether. They don’t pay any fees, enjoy a settlement time of one second, and are completely independent of the many congestions on the Ethereum network.”

Many industry players feel Ethereum did not anticipate the DeFi hype, and even with the upcoming network upgrade, Ethereum 2.0, the network is still not ready to service DeFi. 

Ethereum 2.0 should improve performance, but its high gas prices may scare off new users. Sergej Kunz, CEO of decentralized exchange 1inch, said during Cointelegraph China’s DeFi Marathon event on Sept. 3, that the Ethereum infrastructure lacks the capacity to host the DeFi environment:

“You have to rethink everything. You can migrate smart contracts to the code but it’s not scalable. To be able to scale, you have to create standards and bring new protocols based on the new sharded architecture, such as NEAR which is similar to Ethereum 2.0.”

At the same event, Mounir Benchemled, founder and CEO of middleware layer ParaSwap, pointed out that the complexity of explaining how layer-2 works to end-users “and the risk of not being able to pay the funds immediately to these users” cause the most concern. Benchemled also said that it is not practical for all DeFi projects to move to Ethereum 2.0:

“For it to work, all applications would need to move towards one single platform. Major projects might have consensus. However, for other projects who have their own agendas, it might be hard. New bridges will be built to allow interoperability.”

Despite the challenges ahead for the Ethereum blockchain, Morpher’s Froehler joins the other pro-DeFi voices in saying, “DeFi is here to stay.”

LEND, the DeFi darling up 5,000% in 2020, is about to undergo a critical upgrade

Aave has quickly become a flagship product in Ethereum’s DeFi ecosystem. The decentralized money-market, where users can trustlessly borrow and lend crypto-assets like stablecoins, currently has over $1 billion worth of value locked in its contracts. Per DeFi Pulse, it is the third-biggest Ethereum protocol by total locked value.

While a flagship product in decentralized finance, the protocol is not entirely decentralized.

Governance of the protocol, meaning the direction it moves in, has largely been dictated by the organization behind the deployment of the protocol. Of course, users could voice their opinions online if they wanted something change, but there has been no formal governance structure to allow retail users to participate.

This is changing, though, with the introduction of “Aavenomics,” where the protocol’s native Ethereum-based token, LEND, will be swapped for a new token called AAVE that will help govern the protocol.

We broke down Aavenomics in a prior post.

It was recently revealed that Aavenomics is now being rolled out, with it falling on the community if this upgrade should be released now or later.

Aavenomics is being rolled out, bolstering a top Ethereum DeFi protocol

According to an announcement by the Aave team on Sep. 25, “Aave Governance is officially on mainnet, giving the decisional power to the community!” This comes after a period of governance on the Ropsten and Kovan testnets, which proved successful.

The first proposal is to activate Aavenomics, “making it the new governance token of the Aave Ecosystem.” This will give users the opportunity to trade LEND for AAVE at a 100:1 ratio, giving the cryptocurrency a price closer to that of many other tokens in the DeFi ecosystem.

Should the community agree on AIP1, which outlines this migration, a new system called “Safety Mining” will be activated. The module will allow users to “earn AAVE as a Safety Incentive (SI) in exchange for securing the protocol.” This effectively marks Aave’s first foray into yield farming despite it already being the third-largest DeFi protocol.

The vote has already swung well in favor of the activation of this upgrade.

100% of the 55,000,000 votes thus far are “yae,” nearly reaching the 65 million quorum threshold.

LEND reacts positively to the development

LEND has reacted positively to the development. Per CryptoSlate market data, the coin is up nearly 10 percent in the past 24 hours, outperforming Bitcoin’s relatively mild one percent gain.

On the day Aavenomics was announced, the coin surged in excess of 20 percent as the market saw this as a strong step forward for the DeFi coin.

Presumably, the activation of Aavenomics should drive LEND, then AAVE further to the upside, barring a drop in the price of Bitcoin or Ethereum anyway.

Chart of LEND’s price action over the past day. Chart from TradingView.com

The post LEND, the DeFi darling up 5,000% in 2020, is about to undergo a critical upgrade appeared first on CryptoSlate.

Bitcoin Holding This Key Macro Level Suggests the Next Bull Market is Nearing

  • Bitcoin’s price action has been somewhat stagnant throughout the past few days and weeks, with bulls and bears both reaching a clear impasse
  • The aggregated cryptocurrency market has been following in Bitcoin’s lead and is struggling to garner any decisive momentum
  • One analyst is now noting that BTC has been holding above a key macro level throughout the past few months
  • He believes that the recent consolidation above this level bodes well for its near-term outlook and could indicate that significantly further upside is imminent in the weeks and months ahead

Bitcoin’s price action over the past few weeks has done little to offer investors with insights into its near-term trend.

The cryptocurrency has formed a relatively wide trading range between $10,200 and $11,200, with both of these levels being confirmed as areas of heightened buying/selling activity.

The aggregated market’s near-term outlook remains somewhat foggy, as all eyes are closely watching to see what happens to BTC. This has led altcoins to trend lower as of late.

One analyst is now pointing to Bitcoin’s 21-week EMA, explaining that its ability to continue holding above this crucial level is incredibly bullish.

Bitcoin Pushes Towards Key Resistance as Bulls Try to Reverse Downtrend

At the time of writing, Bitcoin is trading up marginally at its current price of $10,770. This is around the price at which it has been trading throughout the past couple of weeks.

Earlier this past week bears pushed Bitcoin’s price down towards $10,200, which is around the point at which it found some significant buying pressure that ultimately allowed it to rocket higher.

$10,800 may pose a slight challenge for BTC, but breaking the resistance here should be enough to propel the digital asset to its $11,200 range highs.

Here’s how Bitcoin’s 21-Week EMA Could Kickstart the Next Bull Run

This consolidation has all taken place above Bitcoin’s weekly 21 EMA, which is a positive sign that seems to indicate that upside could be imminent for the cryptocurrency.

He notes that this could suggest that BTC will never close beneath $10,000, and will soon begin its next major ascent.

“In the last bull market BTC kept holding the Weekly 21 EMA. Has the bull market started? If this is the case we will never close below 10k.”

Bitcoin

Image Courtesy of Wolf. Chart via TradingView.

How the market trends in the days and weeks will likely depend entirely on Bitcoin.

Featured image from Unsplash.
Charts from TradingView.

Spikes in gas prices slowing growth of new NFT marketplaces

New NFT marketplaces may even leave Ethereum altogether to deal with high gas fees.

High gas prices have become a problem for non-fungible token (NFT) marketplaces, especially as they look to mint at scale, the founder of a start-up said. 

Sean Papanikolas, founder of NFT marketplace Cargo, told Cointelegraph in an interview that the NFT sector is at an inflection point. But scalability weighs on new players in the sector now that gas prices have spiked. He said:

"Now, in 2020, platforms are starting to see the scaling issue now due to the spikes in gas prices. Some platforms have halted minting while gas is high and other platforms see a major decline in activity."

High gas prices have caused some platforms to start working on layer-2 solutions and some are eyeing other chains, leaving Ethereum altogether, warned Cargo's founder. To counter higher gas fees, Papanikolas said Cargo launched a solution based on ERC-721 and ERC-2309 standards. 

But if blockchain companies want to expand their businesses within the NFT landscape, Papanikolas warned it’s not going to be as easy as they think:

“I think blockchain companies need to be prepared for the level of software engineering effort it will take to overcome the technical hurdles and the limitations of smart contract development on Ethereum and then how those pieces will work with traditional systems. The competition will continue to increase as well.”

Currently, users can spend a small amount of Ether (ETH) at current prices to secure gas that can be used later without the risk of the price going up. This is something other industry players have talked about in the past. In a previous interview with Cointelegraph, Qtum co-founder and lead developer Jordan Earls said this causes the network “to not respond properly to an increase in gas prices like we see today, as some people with access to these tokens ca use this cheap gas now, but also get their transaction highly prioritized without actually spending any ETH.” Other companies also pointed out that NFT firms are exploring other means to avoid high gas prices.

Russia Proposes Harsh Penalties for Unreported Cryptocurrency Holdings

Russia Proposes Harsh Penalties for Unreported Cryptocurrency Holdings

Russia’s Ministry of Finance has drafted a bill with harsh penalties for anyone who does not report their cryptocurrency holdings above a certain level. Penalties include jail terms and fines.

New Russian Crypto Bill

The Russian Ministry of Finance has sent out a new draft bill addressing the circulation of cryptocurrency in Russia to interested government departments, local news outlet Kommersant reported this week. The bill contains amendments to the Russian Criminal Code, the Criminal Procedure Code, the Administrative Code, the Tax Code, and the law on combating money laundering, the publication conveyed, claiming to be familiar with the bill.

The main changes from the previous bill concern the obligation of citizens to declare their cryptocurrency operations as well as the content of their cryptocurrency wallets. The ministry proposes requiring exchanges and users to inform the tax authority about cryptocurrency transactions.

Noting that the market views the previous draft law as posing significant restriction to the circulation of cryptocurrency in Russia, Kommersant reported that the new draft law is even more strict. “In particular, any person (natural or legal) who has received digital currency or digital rights of more than 100,000 rubles [$1,280] in a calendar year is obliged to inform the tax authority and submit an annual report on transactions with such assets and the balances of these assets.”

Bryan Cave Leighton Paisner (Russia) LLP’s senior tax lawyer Dmitry Kirillov explained that if the amendments are adopted, the first report will have to be submitted by April 30, 2021, for the 2020 tax filing year. He added:

For failure to report to the tax authority, you can get a fine of 30% of crypto assets, but not less than 50,000 rubles.

Roman Yankovsky, a member of the commission on legal support of the digital economy of the Moscow branch of the Russian Lawyers’ Association, noted that foreign cryptocurrency businesses, including crypto exchanges and depositories, must send the tax authority quarterly information about their Russian cryptocurrency operations. While believing that “hardly anyone will take this rule seriously,” he elaborated:

The liability is not limited to fines. Non-declaration of a crypto wallet if more than 1 million rubles [$12,796] have passed through it per year becomes a criminal offense of up to three years in prison. Also, forced labor can be used as a punishment.

Experts criticize the amendments are too harsh. Malta-based broker Exante co-founder Anatoly Knyazev, for example, believes that the penalties are disproportionate to the violations.

The Ministry of Finance also emphasized that recommendations by the Financial Action Task Force (FATF) are being considered, but noted that no final decision has been made on the regulation of cryptocurrencies in Russia.

The Ministry of Justice has confirmed that the proposed bill is under consideration for adoption in connection with the law on digital financial assets and digital currencies which will enter into force on Jan. 1, 2021.

What do you think about Russia’s crypto proposal? Let us know in the comments section below.

The post Russia Proposes Harsh Penalties for Unreported Cryptocurrency Holdings appeared first on Bitcoin News.

Crypto hedge funds and mining regulations: Bad crypto news of the week

Check out this week’s Bad Crypto podcast.

It’s been a difficult week for Bitcoin this week. The price has fallen about 5 percent over the last seven days to drop beneath $10,400. It could bounce but if it continues downwards, it might drop below $10,000 and get dangerously close to the CME gap.

One sign that the price might fall further has been a decline in the number of Bitcoin addresses holding a single Bitcoin. They’ve reached a four-month low. But Tyler Winklevoss still thinks that Bitcoin is better than gold, and  Microstrategy CEO Michael Saylor has moved from bear to bull. His company recently bought almost 16,800 Bitcoins over 74 hours, spending about $175 million. Paypal is bearish too. The payments firm is working on a way to allow merchants to accept cryptocurrencies.

In Brazil, fund manager Hashdex has made an agreement with Nasdaq to launch the world’s first crypto asset exchange-traded fund. The fund will trade on the Bermuda Stock Exchange. And while Hashdex is deepening crypto trading, meat processing firm JBS is using the blockchain to monitor its supply chain and ensure that none of its suppliers are raising cattle on illegally deforested land.

Australia also sees an opportunity to secure food supplies with the blockchain. The government-backed agricultural supply chain platform, Entrust, will use Hedera Hashgraph to ensure that wine from the Clare Valley region isn’t counterfeit.

In Russia, the government has said that it will prioritize the development of blockchain technologies, while in Venezuela, the Maduro government has issued a decree to regulate crypto mining. Miners in the country now need a license.

If you want to buy a country, or at least parts of one, a new partnership between Upland and Tilia, the makers of Second Life, lets players sell their virtual property and turn digital cash into fiat. Alternatively, you can hang around in Bakersfield. A Bitcoin Cash fan has been leaving stickers around the city with QR codes, enabling people to download gifts of up to $500 worth of the cryptocurrency. The “Bitcoin Man of Bakersfield” is trying to encourage the take-up of cryptocurrencies.

The Bitcoin Man has already given away $1,100 and plans to give away another $2,000 but the airdrop of 28,000 MEME tokens has helped to push the price of the token up to $1,175. The giveaways were made up of batches of 250 tokens each.

Craig Wright could have done with some of that luck this week. The Satoshi-pretender lost a plea for summary judgment and will go to trial in January in a billion-dollar Bitcoin lawsuit. And finally, Brock Pierce is hoping to do better. The former Mighty Ducks child star and Bitcoin billionaire has managed to get onto 15 states in his run for the presidency. He believes that cryptocurrency is the 21st-century cure for America’s 21st-century problems.

Check out the audio version here:

Joel Comm is an internet pioneer, New York Times best-selling author, futurist speaker and co-host of The Bad Crypto Podcast. That’s a fancy way of saying he writes words, says things and loves to play with cryptos.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Chainlink Weekly MACD Bearish For First Time Since Parabolic Rally Began

Chainlink may have rebounded with a record-breaking single-day rally, it did so after a 60% fall from its all-time high set just over a month ago.

A key indicator measuring momentum has flipped bearish on weekly timeframes for the first time since the parabola began. Is this a sign that momentum is about to slide further to the downside?

Chainlink Flips Bearish For First Time Since Parabolic Rally Started

Chainlink cryptocurrency tops the list of the industry’s best-performing tokens in 2020 and the years before it. Chainlink was launched during the bear market and has never had a drawdown phase like most other cryptocurrencies.

Even devastating flash crashes to nearly zero have always bounced back by stronger than ever, setting record high after the next.

Related Reading | Chainlink 30% Rally Closes Record “Best” 2020 Daily Performance

After breaking its previous record in May, the crypto asset went into full price discovery mode and reached a peak of $20 per LINK coin.

The cryptocurrency since crashed to just $8, then from there rebounded to $11 in a shocking record recovery rally. But before bulls begin celebrating, the weekly MACD could be signaling a major momentum change and that a deeper correction could be next.

chainlink linkusd

LINKUSD Daily MACD Indicator Bearish Flip | Source: TradingView

Weekly Close Critical For Continuation, According To MACD Indicator

This week’s close in Chainlink is critical for the unstoppable cryptocurrency’s rally to continue. The MACD, the moving average convergence divergence indicator, has just flipped bearish on weekly timeframes for the first time since April.

The indicator flipping bullish in late April resulted in an over 500% climb to $20 per token. And now that the asset’s parabola is broken, a 60% correction may not be enough.

Chainlink’s weekly bull trend line is currently still holding, however, and the weekly candle has yet to close. If bulls can uncross the MACD moving averages within the next 24 hours, the altcoin could keep on climbing.

Related Reading | Mega Bitfinex Bitcoin Whale: Chainlink FOMO Will Eventually Fizzle

At the same time that Chainlink is giving such a signal, so is Bitcoin, suggesting that a greater crypto market correction could be ahead of both assets collapse together.

Chainlink throughout its lifecycle has always shocked and surprised the industry with its astronomical rise. After such a strong rebound, regardless of what the MACD says, LINK could keep on climbing.

It’s also worth noting that the MACD is often considered a lagging indicator, which could mean this bearish crossover will be short-lived and another bull cross could happen within the next week or two.

Featured image from Deposit Photos, Charts from TradingView

Chinese state TV just shilled DeFi and Ethereum to hundreds of millions of users

Over the past few years, Chinese authorities have undergone a strong crackdown on most things crypto in the country. Late last year, the Shanghai bank of the People’s Bank of China targeted ICOs, deeming them illegal; earlier this year, there were reports of local governments looking to crack down on local Bitcoin and Ethereum mining operations.

In the west, the view is that China has been cracking down on cryptocurrencies in preparation for the rolling out of its government-controlled digital currency.

But this view may be misconstrued.

A branch of Chinese state television that has hundreds of millions of viewers recently did a segment on cryptocurrencies in which it discussed Ethereum, DeFi, amongst other topics.

Chinese state television just did a segment on Ethereum, DeFi, and more

In an unexpected turn of events, the China Central Television, a state broadcaster with one billion viewers across its channels, aired a segment to one of its top channels on cryptocurrencies. Matthew Graham, an investor with a focus on crypto-assets based in China, shared the segment aired to CCTV2 viewers to his Twitter feed.

Contradicting the sentiment that China is staunchly against crypto, the segment purportedly covered how digital assets are the best-performing asset class year to date, outperforming gold and stocks.

And in a key part of the clip, the anchors discussed Ethereum, mentioning how it is a top performer in the cryptocurrencies markets, having outpaced Bitcoin, XRP, and a number of other top altcoins.

As to why this is the case, DeFi was cited, as was the fears of inflation in fiat currencies.

No reports or rough translations of the segment mention animosity towards the industry despite prior comments and moves from government branches and officials.

A key driver of growth moving forward

A number of analysts in the space see the entrance of Chinese investors as crucial for DeFi’s trajectory of growth moving forward.

Andrew Kang, the founder of Mechanism Capital, commented in July of this year that Chinese investment in crypto is its “own beast,” presumably referencing the craze of 2017 and 2018 and how China was a key force in that.

Others have made similar comments, pointing to the importance of hundreds of millions of investors and their view on crypto-assets. With the DCEP and the last Bitcoin craze, most are aware of cryptocurrency and basic subjects but will be waiting on the government or some authority to give direction on what they should do.

Jason Choi, an investor at the Hong Kong-based The Spartan Group, summed up the China situation well when he wrote:

“Broke: DeFi gaining traction, still under 5% of total crypto market cap. Woke: Record QE & stim back on table, it’s all one trade. Bespoke: 1.2B retails just heard about DeFi.”

The post Chinese state TV just shilled DeFi and Ethereum to hundreds of millions of users appeared first on CryptoSlate.

Cardano Rejects at Pivotal Resistance After 30% Surge: The ADA Bear Case

Cardano (ADA) has undergone a strong surge to the upside over recent days. Per data from TradingView.com, the coin is up around 30% since it bottomed just two days ago.

Unfortunately, technical signs show that the cryptocurrency is primed to reverse lower after the rally. This is in line with some analysts that expect Bitcoin’s ongoing recovery to taper off as it faces resistance in the $10,800-11,200 region.

Related Reading: MicroStrategy’s Stock Continues to Soar After Bitcoin Purchase

ADA Primed to Correct After 30%+ Surge

Cardano is primed to correct to the downside after undergoing the aforementioned surge that came as Bitcoin saw a strong recovery.

An analyst shared the ADA chart seen below on September 25th.

It shows that Cardano’s recent price action has formed a textbook bearish divergence between its trend and a crucial trend indicator. This divergence suggests a loss of momentum in the uptrend, increasing the chance the cryptocurrency reverses lower. Adding to this, ADA is now flirting with the upper band of a range indicator, indicating it may be overbought on a short-term time frame.

Image

Chart of ADA's price action over the past few weeks with analysis by crypto trader Cold Blooded Shiller (Coldbloodshill handle on Twitter). Chart from TradingView.com

Another trader echoed the assertion that Cardano could be reaching a top in the near term. This trader’s analysis showed that ADA has entered a short-term downtrend as it fails to retake the highs at $0.098 per coin.

Related Reading: Critical On-Chain Signal Predicts That Bitcoin’s Next Move Will Be Upward

Shift Towards DeFi Could Help Cardano

Cardano shifting towards decentralized finance could help ADA catch a bid, similar to how DeFi has boosted Ethereum over recent months.

Charles Hoskinson, the founder of the blockchain, announced in August that he is obsessed with DeFi. He said he’s been poring over “hundreds of pages of reports, lots of interviews and discussions” because he sees value in some of the most popular trends in decentralized finance.

Should Cardano developers move to capture some of the DeFi market share as Ethereum faces high transaction fees, ADA could begin to gain more traction.

Especially with the current iteration of DeFi applications, where users often need a blockchain’s native currency to act as a collateral or reserve asset, ADA will benefit if DeFi takes off on Cardano.

Related Reading: Ethereum Transaction Fees Surge to All-Time Highs After Uniswap Launch
Photo by Fabian Wiktor on Unsplash
Price tags: adausd, adabtc
Charts from TradingVIew.com
Cardano Rejects at Pivotal Resistance After 30% Surge: The ADA Bear Case

US SEC issues no-action letter on compressed digital asset settlement process

In issuing a no-action letter, the SEC took a more nuanced position on virtual assets.

The U.S. Securities and Exchange Commission (SEC) took a major step toward streamlining digital asset securities settlement by compressing the previous four-step process into three in a bid to reduce operational risk for broker-dealers.

The SEC issued a no-action letter on Sept. 25, stating it will not penalize any broker-dealer operating an alternative trading system (ATS) that trades digital asset securities — if they adhere to the new guidelines.

According to the regulator, several ATS want to follow a streamlined model in cases where there is no custody over the assets traded. Most ATS follow a four-step process: first, the buyer and seller send orders to the ATS, second, the ATS matches the orders, third, the ATS notifies the buyer and seller about the matched trade, and lastly, the transaction is settled bilaterally, either with each other or through their custodians.

But the Financial Industry Regulatory Authority (FINRA) requested more clarity on this process in cases in which the broker-dealer may not take physical custody of the asset.

Some broker-dealers felt this four-step model exposed them to too much risk. The ATSs requested that they be allowed to streamline the process. According to the no-action letter, this process would involve:

Step 1 - the buyer and seller send their respective orders to the ATS, notify their respective custodians of their respective orders submitted to the ATS, and instruct their respective custodians to settle transactions in accordance with the terms of their orders when the ATS notifies the custodians of a match on the ATS;

Step 2 - the ATS matches the orders;

Step 3 - the ATS notifies the buyer and seller and their respective custodians of the matched trade and the custodians carry out the conditional instructions.

Broker-dealers, under paragraph (b) of Rule 15c3-3 of the SEC (the Customer Protection Rule) are required to “obtain and maintain physical possession or control of all fully paid or excess margin securities carried by a broker-dealer for the account of customers.” The rule protects customers from losses or delays in accessing their security in case the ATS fails. But this becomes difficult when dealing with digital assets.

The SEC said that broker-dealers that choose the streamlined model would not face any enforcement action in connection with the Customer Protection Rule. The letter notes that broker-dealers seeking to implement this process have addressed concerns over their custodial role by noting that they operate with a minimum of $250,000 in capital, and that they clearly inform their customers that the broker-dealer operator cannot guarantee or take responsibility for settling trades. They have also explained that they ensure they have procedures to assess security tokens’ registration with the SEC and that the assets comply with federal law.

The regulator, however, made it clear that the no-action letter “solely addresses an ATS trading digital asset securities under the circumstances set forth in this letter and does not otherwise address broker-dealer custody or control of digital asset securities.”

Although the letter expresses the SEC’s staff opinion on enforcement, and is not a legal determination, it is nevertheless one more indication that regulatory oversight of virtual assets is becoming more refined and nuanced.

The SEC has been more focused on regulating digital assets in the past few years and throughout the tenure of chairman Jay Clayton.

US Federal Reserve Actively Working on Digital Dollar

US Federal Reserve Actively Working on Digital Dollar

The Federal Reserve Board of Governors and several Federal Reserve Banks are actively working on the digital dollar. Legislation has proposed that each American could have an account at the Fed for transacting in the central bank digital currency.

Several Digital Dollar Initiatives

The president of the Federal Reserve Bank of Cleveland, Loretta J. Mester, outlined the Fed’s work on the country’s central bank digital currency (CBDC) during a speech at the 20th Anniversary Chicago Payments Symposium on Wednesday. Noting that the experience with emergency payments led by the coronavirus pandemic has accelerated the work in this area, Mester detailed:

Legislation has proposed that each American has an account at the Fed in which digital dollars could be deposited, as liabilities of the Federal Reserve Banks, which could be used for emergency payments.

She added that “Other proposals would create a new payments instrument, digital cash, which would be just like the physical currency issued by central banks today, but in a digital form and, potentially, without the anonymity of physical currency.”

Mester explained that some designs of the digital dollar allow the central bank to directly issue the CBDC into end users’ wallets using central-bank-facilitated transfer and redemption services, without the involvement of commercial banks.

She further confirmed that “The Federal Reserve has been researching issues raised by central bank digital currency for some time,” emphasizing that various Federal Reserve Banks are part of initiatives to explore the use of a central bank digital currency.

The Federal Reserve Board of Governors has a technology lab called Techlab that has been building platforms and testing a range of technologies relevant to digital currencies and other payment innovations. Staff members from several Federal Reserve Banks, including software developers, are contributing to this effort.

“Given the dollar’s important role, it is essential that the Federal Reserve remain on the frontier of research and policy development regarding central bank digital currencies,” Federal Reserve Board Governor Lael Brainard previously commented.

As for individual Federal Reserve Banks, Mester highlighted that the Federal Reserve Bank of Boston is collaborating with the Massachusetts Institute of Technology (MIT) to experiment with existing and new technologies that could be used for a digital dollar. This multi-year initiative was launched in August.

The Federal Reserve Bank of New York has established an innovation center in partnership with the Bank for International Settlements (BIS) to identify critical trends and financial technology relevant to central banks.

Mester also stressed the need to evaluate potential risks, costs, benefits, and policy issues surrounding a digital dollar, such as “financial stability, market structure, security, privacy, and monetary policy.” She emphasized that the demand and uses of a CBDC must be assessed to ascertain “whether such a central bank digital currency would allow for quicker and more ubiquitous payments in times of emergency and more generally.”

Meanwhile, a number of central banks worldwide have been accelerating their CBDC research in response to the Libra cryptocurrency project, proposed by social media giant Facebook, and the soon-to-launch China’s digital yuan which is already being tested in several major cities, including Beijing and Hong Kong.

What do you think about having an account at the Fed for digital dollars? Let us know in the comments section below.

The post US Federal Reserve Actively Working on Digital Dollar appeared first on Bitcoin News.

A minster’s look at regulation and innovation: A necessity to strike a balance

Without constant nurturing through communication and collaborative efforts, the pursuits of legislators and businesses would be fruitless.

Repeatedly, proponents of disruptive technologies have proven that regulation and innovation have an immense potential to actualize a mutually beneficial existence. The often delicate relationship between innovators and regulators — which may be mired by antagonism — is fundamental to the functioning of the global economy, especially at times as challenging as we are facing now. 

The fuel that keeps the fire of the important relationship between regulators and businesses alight — like any — is communication and collaboration. This could not be more apt when it comes to the innovators behind distributed ledger technology and the regulators in overseeing the space.

Ideas surrounding DLT first arose in the early 90s, however, it was not until 2009 that the first block of what we now know as blockchain was mined. In 11 short years, blockchain and DLT more generally have had tremendous success in garnering attention from the financial community and the wider public. Just this year, Big Four audit firm Deloitte’s 2020 Global Blockchain Survey found that business leaders now see blockchain as “integral to organisational innovation,” while analytics agency Gartner has forecasted that blockchain technology will have generated $3.1 trillion of value-add to companies around the world by 2030.

Related: A minister’s look at healthcare: Providing fertile ground for blockchain innovation

The regulation necessity

While mainstream adoption of the blockchain industry is gathering pace, I believe it will not succeed without regulation; in fact, it needs it to survive and, indeed, to thrive. It is incumbent on regulators to strike a balance and allow companies operating in this industry with the space to continue operating at the cutting edge of innovation in a sensible and safe manner. Finding this balance and the future success of decentralized finance is inexorably linked. It will take a whole-of-industry approach where all stakeholders uphold a commitment of communication and collaboration with the regulators to ensure the harmony that the industry needs.

However, the burden of finding this balance is not just on the industry itself but on regulators and policymakers, too. Standards are commonplace across every industry, and this one is no different if it is to thrive and succeed in the main street of finance.

Meanwhile, overregulation could stifle crypto markets that are based on distributed ledger technology. Of course, it is possible to find the equilibrium point that allows the realization of the full potential of this technology within the boundaries of the regulations that govern traditional markets.

Some governments are working closely with key players in the field. In January 2018, Gibraltar became among the first jurisdictions to introduce a regulatory framework for DLT providers. Since then, the Gibraltar Financial Services Commission has awarded multiple licenses to global industry leaders, with a number of active applications currently under review. This measured regulatory response was only possible through open communication between the regulators and the innovators.

Similarly in Switzerland, its remarkably progressive stance toward cryptocurrencies and distributed ledger technologies has propelled the country ahead of the pack and closer to its aim of becoming the first “crypto nation.”

In short, there are at least 45 central banks around the world that have publicly expressed their efforts to develop central bank digital currencies by utilizing DLT. This proves that the appetite to embrace these technologies not only exists among business leaders, it is burgeoning among legislators.

There is little doubt that regulators will follow suit by working with the private industry to achieve the desired equilibrium but in order to achieve this, much more needs to be done when it comes to communication and collaboration.

The establishment of working groups between DLT companies and regulators, and government bodies and watchdogs should become commonplace.

DLT will not reach its full potential if there is still a semblance of distrust among the general public. Through open dialogue, we can work together to ensure that the market is regulated and trustworthy and that regulators have faith in the technology, while those involved in the creation and use of the technology can enjoy the immense benefits it brings.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Albert Isola is Gibraltar’s minister for digital and financial services with the primary responsibility of raising Gibraltar’s profile as a well-regulated financial services center, leading the way in DLT and online gaming regulation. Minister Isola previously served as Gibraltar’s minister for commerce where he played a central role in spearheading Gibraltar’s purpose-built DLT regulatory framework, which was introduced in January 2018 for firms using blockchain to store or transfer value.

CEX.IO to Provide One-Click DeFi Access, Lists New Tokens, and Offers Instant 0% Fee Visa Deposits

LONDON, the United Kingdom, September 26 – CEX.IO, one of the leading international cryptocurrency exchanges, announces its plans for entering the decentralized finance (DeFi) market. To set the stage, CEX.IO lists major DeFi tokens on its exchange platform and offers instant, 0% fee Visa deposits to its customers for a limited time period. The UK-based company’s ultimate goal is to provide CEX.IO customers one-click access to the most popular DeFi solutions and activities, such as borrowing, lending, and yield farming, in the near future.

CEX.IO is listing the following tokens of major decentralized finance solutions on its cryptocurrency exchange platform:

  • UniSwap (UNI)
  • Aave (LEND)
  • Yearn.Finance (YFI)
  • Compound Finance (COMP)
  • Balancer (BAL)
  • Curve DAO Token (CRV)
  • Wrapped Bitcoin (WBTC)
  • SushiSwap (SUSHI)
  • Cream Finance (CREAM)
  • 0x (ZRX)
    and others.

Listing the tokens on the CEX.IO platform provides benefits for various participants of the digital asset market. While cryptocurrency enthusiasts can get involved in the thriving $10 billion DeFi market, current participants can trade the tokens to hedge their risks, manage their exposure, and fix the value of their profit. Furthermore, the involvement of CEX.IO’s international user base of over 3 million customers adds a level of diversity to the DeFi industry’s participants.

For easier onboarding to the DeFi market and to show CEX.IO’s commitment, the cryptocurrency exchange offers instant, 0% fee Visa card deposits for its users as part of a limited promotional period lasting until the end of September. In addition to that, CEX.IO users can use their balance to trade not only the newly listed DeFi tokens but also any other assets on the platform.

“DeFi can offer many avenues to participate in the open financial system. A number of projects with sizable valuations that sprung into existence in a short period of time and accumulated an impressive amount of locked capital show that the interest is there. Yet the very participation in the DeFi economy remains technically complex. Our role here is to remove those hurdles”, – stated Oleksandr Lutskevych, CEX.IO’s founder and CEO.

CEX.IO has already shown its commitment to the DeFi industry by recently expanding its ecosystem with new crypto-finance solutions. Earlier in September, the UK-based firm launched CEX.IO Loan to allow its international user base to borrow against their digital asset holdings instantly without credit checks. In January, CEX.IO introduced its cryptocurrency staking service. With CEX.IO Staking, the exchange’s customers can earn rewards for holding digital assets in their exchange wallets. The service’s users receive the rewards as automatic payouts for nine different cryptocurrencies.

About CEX.IO

Founded in 2013, the London-based CEX.IO operates one of the largest international exchanges of the cryptocurrency market. With a multi-functional digital asset exchange and a team of over 250 professionals at offices in the UK, USA, Ukraine, Cyprus, and Gibraltar, CEX.IO serves over 3 million customers worldwide. As part of an ever-expanding ecosystem, CEX.IO suits the needs of various crypto market participants, from entry-level cryptocurrency users to professional traders as well as institutions and businesses, with a reliable, high-security digital asset service.


This is a press release. Readers should do their own due diligence before taking any actions related to the promoted company or any of its affiliates or services. Bitcoin.com is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in the press release.

The post CEX.IO to Provide One-Click DeFi Access, Lists New Tokens, and Offers Instant 0% Fee Visa Deposits appeared first on Bitcoin News.

Venezuela eist dat Bitcoinminers minen via ‘nationale miningpool’

Nieuwe Venezolaanse regelgeving introduceert miningvergunningen en vereist dat alle miners in Venezuela zich aansluiten bij een nationale miningpool onder beheer van de toezichthouder. Dat is voor de gedecentraliseerde miners van Venezuela een zorgwekkende ontwikkeling. Het is voor het eerst dat een nationale overheid een actieve rol inneemt in het miningproces.

De Venezolaanse toezichthouder Superintendency of Crypto Assets and Related Activities (SUNACRIP) introduceerde op 21 september nieuwe regelgeving voor Bitcoinminers in Venezuela.

Volgens de nieuwe regels zijn Venezolaanse Bitcoinminers voortaan verplicht een vergunning aan te vragen bij SUNACRIP. Ook moeten zij zich aansluiten bij een nationale miningpool, waarover SUNACRIP het beheer voert. De aankondiging vermeldt mogelijke (belasting)voordelen en andere stimulansen voor miners die zich bij de nationale miningpool aansluiten. Bitcoinminers die dat niet doen riskeren sancties.

Centralisatie

Het zal voor veel Venezolaanse Bitcoinminers waarschijnlijk zorgwekkend nieuws zijn. Het gaat immers ten koste van de decentralisatie onder Venezolaanse miners en zij zullen erdoor, mits zij zich aan de wet willen houden, veel afhankelijker zijn van de staat.

Het is namelijk onwaarschijnlijk dat de nationale miningpool van Venezuela op basis van protocollen werkt die de decentralisatie onder miners bevorderen. Waarschijnlijker is dat het een systeem is waarbij SUNACRIP alle touwtjes in handen heeft. Dat zou kunnen betekenen dat de Venezolaanse overheid uitbetalingen naar miners kan blokkeren of confisqueren, of belastingen kan inhouden over de verdiensten.

Dat doet af aan een aantal eigenschappen die Bitcoin interessant maken. Bitcoin is onder meer bijzonder omdat het een decentraal en open netwerk is dat geen censuur kent, maar juist die aspecten komen in Venezuela door de nieuwe regels onder druk te staan.

Slecht voor Venezuelanen, goed voor Bitcoin?

Hoewel de nieuwe regels ten koste gaan van de decentralisatie onder Venezolaanse miners, maakt het voor de rest van het Bitcoinnetwerk en de gemiddelde gebruiker eigenlijk weinig uit. De wereld is immers veel groter dan Venezuela en ook met een Venezolaanse staats-miningpool werkt het Bitcoinnetwerk prima. Misschien wordt het netwerk er in zekere zin zelfs sterker door, omdat zo'n miningpool van de overheid in sommige aspecten weerbarstiger zou kunnen zijn dan andere miningpools.

Het is de eerste keer dat een nationale overheid een actieve rol inneemt in het draaiende houden van het Bitcoinnetwerk en dat is eigenlijk best interessant. Je zou dat misschien zelfs als een soort adoptie kunnen zien. Wordt de Venezolaanse overheid op deze manier een stakeholder in het ecosysteem en heeft het straks financiële incentives om aan eraan bij te dragen?

Venezuela en Bitcoin

Venezuela heeft een uitgebreide voorgeschiedenis wanneer het op Bitcoin en cryptovaluta aankomt. Het land wordt al jaren geteisterd door armoede als gevolg van hyperinflatie en wordt daarom vaak aangemerkt als één van de landen waar Bitcoin de meeste impact zou kunnen hebben. Uit diverse berichten, onderzoeken en handelsinformatie blijkt ook telkens dat de adoptie van Bitcoin in Venezuela vooruit loopt op andere landen.

In een poging het succes van Bitcoin na te bootsen lanceerde de Venezolaanse overheid in 2018 een gecentraliseerde nationale digitale valuta genaamd

The UN’s ‘decade of delivery’ needs blockchain to succeed

Emerging technologies are essential to fasten SDGs, but this shouldn’t come at the expense of prudence and careful evaluation.

When the Sustainable Development Goals, or SDGs, were conceived back in 2012, blockchain technology was in its early days. Few could have foreseen the trajectory and the potential of blockchain for advancing these ambitious targets.

But today, we see opportunities for blockchain technology to recast conventional approaches to sustainable development — and accelerate progress if deployed responsibly.

Macro trends of 2020

There are a number of macro trends this year in the world of blockchain and sustainable development that provide context. This has been — and will continue to be — an important year for laying the groundwork for major disruptors like digital currency and digital identity.

The trajectory of blockchain technology, in some ways, chimes with that of its predecessors. Following buzz around ambitious aims such as financial inclusion and data ownership, there has been limited work to define what this means and looks like. In fact, if risks and benefits are not carefully evaluated, there is potential for widening existing gaps or the exploitation of vulnerable populations.

Related: Financial inclusion, cryptocurrency and the developing world

It has been encouraging to see momentum toward defining and self-regulating around user protection, such as the Global Digital Finance Code and the Presidio Principles, but it’s important that these conversations stay grounded in the realities of consumer protection, infrastructure capabilities, and the influence of politics and cultural notions to ensure that the technology is able to meaningfully contribute to sustainable development aims.

Related: Blockchain digital ID — Putting people in control of their data

While some organizations such as the Human Rights Foundation and American Red Cross have long-accepted cryptocurrency donations, we have seen an increase in the number of players looking at digital currency as an avenue for financing the SDGs. For instance, the UNICEF Cryptocurrency Fund announced its largest round of investments this year, and a number of platforms have been supporting a crypto version of Giving Tuesday for some time.

Related: The future of philanthropy lies in blockchain technology

As conversations around central bank digital currencies and stablecoins pick up, so are those on how digital currency may be a tool for direct aid delivery, as we’ve seen with the World Food Programme’s Building Blocks project, which uses blockchain technology to authenticate and register transactions.

There has also been a sustained focus on digital identity as a key enabler of the SDGs. While many of these efforts are in early stages — like the recently-launched PayID that brought together a number of industry leaders — this will certainly be a space to watch as a foundational element for future progress.

A closer look: Three areas of focus

  • Building resilient and transparent supply chains.

The United Nations’ Sustainable Development Goal 9 states:

“Build resilient infrastructure, promote sustainable industrialization and foster innovation.”

As widely reported, the COVID-19 pandemic has highlighted the challenges and vulnerabilities in global supply chains, increasing calls for transparency and traceability. In response, we’ve seen several initiatives investigating — or accelerating existing investigations — into blockchain technology to meet these needs.

Central to everything from global trade to aid delivery, supply chains are an important component of the sustainable development equation. Blockchain technology for supply chain use cases has reflected this variety. For instance, multi-national development banks such as the Asian Development Bank and Inter-American Development Bank are investigating the use of blockchain for trade single window projects in South Asia and Latin America, respectively.

Related: Empowering supply chain digital transformation with distributed ledgers

StaTwig, an India-based company and graduate of the UNICEF Innovation Fund, has piloted the use of blockchain technology to track vaccine delivery in an eastern state. Anheuser-Busch InBev, a multinational drink and brewing company, piloted the technology in Zambia to facilitate transparency in pricing around locally sourced crops such as cassava, for which farmers had been historically underpaid.

However, challenges remain. Effectively rethinking global supply chains requires unprecedented cooperation among industry players and careful consideration of elements such as interoperability and data integrity.

  • Creating stronger and more accountable public institutions.

The United Nations’ Sustainable Development Goal 16 states:

“Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels.”

Public procurement is one of the largest sources of government spending and, relatedly, the greatest source of official corruption worldwide. The complexity, relative opacity and subjectivity involved contribute to a large amount of wasted money. To increase external oversight, the government of Colombia undertook a proof-of-concept for a blockchain-based procurement system. While the technology alone is not enough, it can be a powerful tool when partnered with “monitorship” models, such as those established by Transparency International or the Partnership for Transparency Fund.

Related: Bribery gets blocked: Stamping out corruption with blockchain tech

In addition, tax administration can be an important tool or a barrier when it comes to domestic targets for the SDGs. According to the World Bank, “30 of the 75 poorest countries collect less than 15% of GDP in taxes” — a critical threshold for providing basic services. The Prosperity Collaborative, a coalition of several public and private-sector actors, is examining how open-source technologies, including blockchain, may have a role to play in public finance.

  • Spurring responsible sourcing and consumption.

The United Nations’ Sustainable Development Goal 12 states:

“Ensure sustainable consumption and production patterns.”

As climate change and human rights are at the forefront of consumers’ minds, responsible consumption has become a critical area of focus for many businesses.

This year, we’ve seen blockchain technology at the center of many of these conversations. For example, the Mining and Metals Blockchain Initiative launched last year and was brought together by seven industry heavyweights, including De Beers and Eurasian Resources Group, to explore the use of blockchain technology to track carbon emissions and supply chain transparency. Around the same time, the Responsible Sourcing Blockchain Network brought together automotive players including Ford and Volkswagen to pilot the use of blockchain for the ethical sourcing of minerals.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Sumedha Deshmukh is the platform curator on the Blockchain and Digital Assets team at the World Economic Forum. She oversees the team’s engagement with a wide array of public and private sector actors and manages a portfolio of projects covering regulation, DeFi and user-centric development. With a background in economics and policy, she previously held positions at Devex, a media company focused on global development, and Deloitte.

Crypto lending rates are low and DeFi is not competition says Nexo co-founder

It's all about location and perception.

Much has been said about attractive interest rates offered by popular crypto lending platforms like BlockFi, Celsius Network and Nexo. However, there are two sides to every coin. Paying out high interest rates requires charging even higher rates to the borrowers. 

Yet, Nexo co-founder Antoni Trenchev disagrees that crypto lending rates are high. In an interview with Cointelegraph, he said that this reflects the “Western” view, where the prevailing interest rates tend to be low. But it is not the case in the developing world, he said:

“But for people in Third World countries or even emerging markets, such as Asia, we get as low as 5.99% APY. So this is still very, very low, no matter how you compare it with the traditional financial sector. And the reason why it is like that is that it again has to do with the risk of the underlying assets and the collateral and the fact that we do not do credit checks on you.”

Everything is relative. Although the rates offered by the lending platforms may look relatively high when compared to bank savings accounts or even money market instruments, they pale in comparison to the yields offered by DeFi projects. When asked if he views DeFi projects as competition, Trenchev said Nexo does not see DeFi as direct competition. He said that though he likes the concept of DeFi, having a traditional finance background, he finds the space too risky for his personal taste. He has not participated in any yield farming either. He added:

“In order for it to be decentralized, it has to be all on blockchain and not fiat related. Right now, Nexo is positioned as a bridge between traditional financial markets and the crypto space. And we just see ourselves doing something slightly different.”

But does this mean most of Nexo's borrowers come from the developing world?  Trenchev did not have precise numbers at his disposal but noticed that they typically see an influx in demand from countries that have experienced inflationary pressure like Turkey.