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CoinDesk Crypto

On-Chain Real Estate Startup Propy Raised $1.2M in Draper-Backed Round

CoinDesk Crypto
6 years ago

Blockchain-based real estate startup Propy raised at least $1.2 million in a recent funding round that included Tim Draper and Michael Arrington.

  • Propy, which seeks to digitize the real estate transaction process, said in Sept. 15 SEC filings it still intends to raise an additional $500,000 for a total round of $1.7 million.
  • “They have thought through the entire transition from an antiquated system of real estate, from sale to title, to a blockchain based automated one,” Draper told CoinDesk.
  • The serial tech ventures investor did not answer CoinDesk’s questions regarding his stake in Propy.
  • Second Century Ventures’ REACH incubator and Escrow Agent Japan also joined Draper and Arrington in the round.
  • “Nobody believes transaction automation can happen any time soon, but our backers bet on this opportunity now,” Propy CEO Natalia Karayaneva told CoinDesk. 
  • TechCrunch previously revealed Draper’s involvement but left the round’s size a mystery.
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CoinDesk

Blockchain Bites: Crypto’s Top Universities, Bitcoin’s New Addresses, MetaMask’s Token Swaps

CoinDesk Crypto
6 years ago
Making consensus

CoinDesk is preparing for the invest: ethereum economy virtual event on Oct. 14 with a special series of newsletters focused on Ethereum’s past, present and future. Every day until the event the team behind Blockchain Bites will dive into an aspect of Ethereum that excites or confuses us.

The Top Shelf news you subscribed to is down below. 

Now, a few words from CoinDesk tech reporter Colin Harper.

Centralized stablecoins
Stablecoin use on DeFi applications has exploded in 2020. 

Approximately $20 billion of crypto dollars are floating around, and a few billion of these have found their way into the ether by way of yield farming and lending. Even Ethereum’s flagship DeFi application, MakerDAO, is flooded with USDC, making the stablecoin the largest collateral for Maker’s DAI stablecoin.

That’s right, a stablecoin is the primary collateral for another stablecoin. That’s how deep crypto dollars go into DeFi’s liquidity. Outside of Maker, DAI, USDC, TUSD and USDT are the most popular pools on Aave, with a collective market size of $650 million. Uniswap has roughly $780 million in USDC, USDT and DAI staked in market pools. On Compound, DAI and USDC are the first and third most popular markets with a staggering $1.4 billion locked. 

As crypto dollars liquidity floods DeFi markets, will these tokens, which are centrally issued, threaten these application’s presumed decentralization? With bitcoin derivatives exchange BitMEX facing legal actions from U.S. regulators, questions have floated whether exchanges like Uniswap should worry about being targeted next.

Most DeFi proponents argue the “decentralized nature” of the exchange will excuse it from scrutiny. While the act of trading these assets may be considered decentralized, the assets themselves (namely, stablecoins) are not always decentralized. USDC, USDT, TUSD and PAX can be frozen and revoked by their central issuers. 

If regulators wanted to come for DeFi, one weak point could be the stablecoin providers. This would even have implications for DAI, Ethereum’s so-called decentralized stablecoin, considering the bulk of its collateral comes from USDC.

Crypto dollars are obviously beneficial to DeFi’s market structure for the price stability they provide. This is largely why they have taken over as the dominant source of liquidity (even over ETH) in most markets. 

But they are inherently centralized entities, and it remains to be seen how regulators are going to approach their use in DeFi lending and DeFi markets in general. This finally raises the question: Do stablecoins threaten DeFi’s perceived decentralization?

At CoinDesk’s virtual invest: ethereum economy program on Oct. 14, Circle CEO Jeremy Allaire and Aave Finance founder Stani Kulechov will discuss how integral stablecoins have become for DeFi in their talk “Stablecoins, Hyper-Collateralization and the DeFi Economy.”

Looking beyond this question, stablecoin use in yield farming and elsewhere has contributed to Ethereum’s skyrocketing fees. MakerDAO founder Rune Christensen and Near protocol co-founder Illia Polosukhin will discuss DeFi’s impact on Ethereum in their talk “The Fees are Too Damn High: DeFi Pushes Ethereum To its Limit.”

One may ask, how stable is a crypto ecosystem built atop stablecoins?

-Colin Harper

Featured panel

Frontends: Winning the Race for the DeFi User
The emergence of new infrastructure such as automated market makers, portfolio managers and aggregation tools has kick-started an arms race for end users. We explore how these products are lowering barriers to entry in the Ethereum economy, where and how value will accrue with these platforms and the growing migration of centralized exchanges looking to get in on the act. 

Join Dragonfly Capital Partners’ Haseeb Qureshi, Huobi’s Ciara Sun and Zapper.fi’s Nodar Janashia from 5:30 – 6:00 p.m. ET, Oct. 14, for the livestream. 

Related: First Mover: Bitcoin Steady as Trump Tweets and Neo Takes on Ethereum

Weird DeFi
Ethereum’s highly anticipated 2.0 upgrade is poised to bring the network ever closer to fulfilling its original vision to be a “world computer” that plays host to a parallel, decentralized financial system. 

At invest: ethereum economy on Oct. 14, we will address the ramifications for investors as decentralized finance takes the crypto world by storm. 

In a run-up to the event, our two-part CoinDesk Live: Inside the Ethereum Economy virtual miniseries on Oct. 8 and Oct. 12 introduces trending narratives we will break down at the main event: Why all the hype behind yield farming and food-inspired tokens? Should investors take them seriously or are they a fading trend?

On Oct. 8, CoinDesk senior business reporter Brady Dale hosts Priyanka Desai of Open Law, Mason Nystrom of Messari and Sam Bankman-Fried of FTX to assess the newest crazes sweeping the DeFi landscape.

Related: Blockchain Bites: FCA’s Crypto Crackdown, McAfee’s Charges, Ethereum’s Store of Value

Watch DeGeneration: How Ethereum Is Making Finance Weird on Oct. 8.

Ethereum 101

Decentralized finance (DeFi) has seen explosive growth in 2020. This time last year, the total value locked (TVL, a way to quantify how much capital is following through the various decentralized protocols) was around $530 million. Today, there’s more than $10 billion sloshing around.

In February, CoinDesk’s Brady Dale covered the moment the ecosystem crossed the $1 billion milestone, opening the door to further heights and raising questions about its longevity. Here’s why that mattered:

$1B moment
It was only December when the entire decentralized finance (DeFi) market was worth less than $700 million. [On Feb. 7,] it hit $1 billion, a figure that even the most fervent blockchain skeptics would have a tough time dismissing as meaningless.

That figure is the measure of all the crypto held in projects that lend, hedge, abstract, swap or otherwise make structured bets using ethereum’s smart-contract powers, as totaled by DeFi Pulse.

To be clear, $1 billion is not how much money people are making on DeFi, but how much they have committed. Their “locked-in” collateral is used on various protocols to make a wide array of bets, from simple loans to complex derivatives.

“It proves that people around the world want access to more efficient, less biased, money,” Rune Christensen, the creator of DeFi leader MakerDAO, told CoinDesk via a spokesperson.

Investor Spencer Noon of DTC Capital struck a similar note in an email to CoinDesk:

“No other smart contract platform comes close in terms of its developer mindshare, tooling and infrastructure, to the point where I don’t believe DeFi could exist anywhere else today. And perhaps most surprisingly, we’re finally seeing a credible case for ETH to accrue a long-term monetary premium as the only truly trustless collateral type in decentralized finance.”

But nothing big happens on Ethereum without Bitcoin diehards mocking it. In this case, former bitcoin developer Peter Todd weighed in, tweeting, “Decentralized smart contracts can’t hold people accountable for debt. For that you need guns.” 

And rapid growth doesn’t always continue. For comparison, Kickstarter, the leading crowdfunding site, launched in 2009. It hit $1 billion in pledges in 2014. Six years later, it still hasn’t quite touched $5 billion.  

Still, DeFi got there a lot quicker, and it’s much more complex than crowdfunding. 

Ryan Sean Adams, a crypto investor and ETH booster on Twitter, tweeted the news, writing: “Software eating money. Software eating banks. The next decade will be wild.”

– Brady Dale

At stake

Of course, much of this explosive growth was prefigured by the success of the decentralized lending platform MakerDAO. One of the earliest DeFi protocols, how Maker works still boggles many minds. 

CoinDesk’s multimedia team broke down how “the Godzilla of DeFi” creates DAI, why stablecoin interest rates fluctuate and what it means to collateralize crypto in this video from 2019. 

Making MakerDAO
Stablecoins. The name is a bit of a misnomer. In theory, stablecoin prices are pegged to various fiat currencies or hard monies, like gold or silver, in an effort to keep the crypto tokens price, you guessed it, stable.

The benefits to a business that a stable token could provide are great. A stablecoin makes finance far easier than a volatile coin. Since the price is predictable, budgeting becomes less of a headache. But in practice this is a tough solution to make work. Take dai (DAI) for instance, the stablecoin designed by the Ethereum project MakerDAO.

In the last four years MakerDAO has become the most popular decentralized finance application on Ethereum. The MakerDAO project includes two tokens: MKR and dai: Dai is the stablecoin, MKR is the governance token.

While both tokens can be purchased directly on exchanges, dai is created when users of the system lock up ether (ETH). When users lock up ETH they can withdraw dai, which maintains a soft peg to the U.S. dollar.

Users can withdraw up to two thirds of the value of ether that was locked up. So someone depositing three hundred in ETH at today’s prices could then borrow up to around 50,000 dai, which would be worth roughly $50,000.

Yet, because the price of ether fluctuates so much, the MakerDAO system encourages users to over-collateralize. Meaning they’ll have to lock in more ether than they’ll get back in dai. 

Much like a traditional credit card, dai loans accrue interest. In January of 2019, the interest rate, or stability fee, for a dai loan, was 0.5%. Sounds like a good interest rate compared to what banks offer.

Fluctuations
But that low rate hasn’t remained. Over the spring of 2019, dai interest rates have fluctuated dramatically. Dai’s price is kept one-to-one with the dollar by backing the token with an equal amount of debt. If there is more dai in the world than the market demands, an oversupply, the price will drop. So the system began to adjust by increasing the interest rate on all borrowers in order to encourage them to pay down part of the amount they took a loan for or close the line of credit altogether.

When people pay down their debt they pay it with dai, that dai gets burned or destroyed, which contracts the overall supply. A smaller supply should drive the price back up.

In order to close a loan, the user can only repay the principal with dai. They have to repay the interest accrued in MKR, both those coins are then burned as debt gets retired. Dai is destroyed because dai is only backed by debt. So without that debt in the ecosystem those coins are not needed. MKR is destroyed as an incentive for the MakerDAO community.

A dai loan could also be liquidated automatically. Should a person’s collateral dip below the minimum 150% collateralization, the system will liquidate their ETH holdings with a 13% penalty fee. That’s on top of the interest owed as well.

It’s a fee big enough few users want to get hit with. This is why rapid increases in the interest rates has been so controversial.

DAOs and decision makers
So who decides when to increase the interest rate and by how much. To explain that we have to explain one more concept: decentralized autonomous organizations or DAOs.

The idea of the DAO is that lots and lots of people can manage and run an organization taking advantage of the wisdom of the crowd to make the optimal choice.

MakerDAO is a programmatic loan system but it’s also a DAO, governed by people who hold its MKR token. They get to decide on things like the interest rate, how much of one type of loan can be issued and more.

The MKR token has been attractive to hold: As long as people keep taking out dai loans and repaying them, the value should go up as MKR tokens get burned and interest is repaid.

Holding MKR also gives participants the chance to be a decision maker in an interesting new kind of financial organization. Collectively these people pay attention to the price of DAI and decide whether or not the interest rate needs to go up and down.

As pioneers of a new financial instrument there’s not much prior data for MKR holders to draw on to make an optimal decision. Nevertheless, as of this recording dai’s price appears to have returned to a steady dollar valuation across major cryptocurrency exchanges and over-the-counter trading desks.

In that way MakerDAO functions as one of the best versions of a  decentralized autonomous organization the industry can point to so far.

– Christine Kim, Brady Dale and Bailey Reutzel

The ledger

Snap back to 2020 again and you can see how much the ecosystem has evolved. MakerDAO is just one of many multi-billion dollar protocols. A range of other lending, trading and minting tools have either launched or finally gained tractions. 

Last month, during the heady days of the “Weird DeFi” moment, my former colleague Leigh Cuen wrote about the “normies” getting filthy rich using this ecosystem of products. 

Making money
Ethereum whales undoubtedly drive the decentralized finance (DeFi) movement, but many people making money on DeFi trends are just regular Joes, so to speak. 

One such trader, Joe, is a math student at a Canadian university. Just by playing with Ethereum software and his own calculations, he managed to make hundreds of thousands of dollars in 2020. This wasn’t his first rodeo, however; he’s been trading on decentralized exchanges (DEXs) for more than a year.

“I’m not a whale in the crypto world but I’m one of the top users of the DeFi protocol I use,” he said. “Before, when DeFi was smaller, there was a lot less competition.” 

Since Weird DeFi’s food craze began, Joe said “high yields” are now available to newcomers “without a lot of technical knowledge.” 

DeFi infrastructure
The DeFi mentality emphasizes open-source access to tools, services with low barriers to entry and distributed teams. Sometimes, this includes low barriers to entry for high-risk games. 

According to Uniswap founder Hayden Adams in June 2020, most of the Uniswap ecosystem relies on ConsenSys infrastructure services, like Infura. This has also proven to be the common pattern for copycat DeFi projects like SushiSwap. ConsenSys spokesperson James Beck said the Ethereum conglomerate restructured to make infrastructure and wallet services, like Infura and the DeFi-friendly wallet MetaMask, pillars of the company’s “core software business.” 

ConsenSys’ head of product for Infura, Michael Godsey, said his team handled the “increased usage” from the food-themed yield farming spike, watching closely to understand “these new usage patterns.” Such DeFi experiments provide inspiration and research data for Ethereum startups, not chagrin. 

In reference to the DEX tools people use to access these trading games, Godsey added, “Uniswap and MetaMask are two of our amazing customers and many yield farmers are utilizing their platform to participate in this new activity.”

As for Joe, the Canadian college student, he said he plans to keep stacking tokens because the broader DeFi movement is “sustainable and has been growing at a relatively slow pace for years.” 

On the other hand, he said the trends over the past few months were heavily influenced by Compound’s token model. Joe reasoned these DeFi experiments might end in a “big crash” or slow fizzle.   

“As long as risk-adjusted yield is higher than for other opportunities, I will keep using them,” he said.

– Leigh Cuen

Top shelf

U.S. constraints
Ripple Executive Chairman Chris Larsen threatened to pull his fintech firm out of the U.S. if what he termed the country’s hostile stance toward cryptocurrency companies does not soon change, according to Fortune. Ripple is battling investor allegations that XRP is a security as well as mixed signals from the U.S. Securities and Exchange Commission. Larsen acknowledged that Ripple’s leaving the U.S. would do little to stop top-line federal regulatory oversight but said a softer host government would nonetheless help, adding nearly every other country has a better handling of crypto than the U.S. Larsen named Singapore and the U.K. as possible countries to rebase in.

New addresses
Bitcoin has seen a rapid rise in the creation of new addresses on the blockchain so far this month, with one industry executive saying it’s likely due to traders moving funds off the legally troubled BitMEX exchange. Others point elsewhere. Glassnode’s “entities net growth” metric rose sharply by 244% from 9,750 to 33,620 in the first six days of October. The surge in new entities picked up pace in the wake of BitMEX’s legal woes users’ panicked migration of funds to other exchanges. However, on-chain analyst Cole Garner said the spike probably represents an entry of new investors into the market, because the growth in new entities has kept pace, even after BitMEX withdrawals slowed.

CoinDesk U
CoinDesk researched and assembled a ranking of universities that provide the best blockchain education. This in-depth analysis measured the school’s scholarly impact, post-graduation job prospects and campus blockchain offerings – as well as survey responses – to determine the 46 top U.S. universities. Topping the list are Massachusetts Institute of Technology (MIT); Cornell University; University of California, Berkeley; Stanford University and Harvard University. Many smaller regional, or liberal arts, universities also made the list. Read the full methodology.

Digital yuan
An official for China’s central bank has unveiled usage statistics of state-backed digital currency trials that were conducted in three Chinese cities. Fan Yifei, deputy governor of the People’s Bank of China, said on Monday the bank opened 113,300 consumer digital wallets and 8,859 corporate digital wallets for residents of Shenzhen, Suzhou and Xiong’an to pilot a digital yuan. The digital wallets processed RMB 1.1 billion ($162 million) across 3.1 million digital yuan transactions between April and August when the pilots launched and ended, Fan said, making it the most widely used central bank digital currency (CBDC) in a commercial setting. 

Token swaps
MetaMask announced a new feature Tuesday: token swaps directly within the popular Ethereum browser extension and mobile application. The token-swapping feature will release first on its Firefox browser extension, before adding extensions for other browsers and MetaMask mobile. Up to now, to make a swap of tokens, an Ethereum user would need to go to the website of a specific decentralized exchange or exchange aggregator, sign in and run the swap. By building a token-swapping function into MetaMask itself, it should improve the user experience by automatically routing users to a service, cutting out a step. 

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CoinDesk

‘It’s Something We’re Studying’: Deputy Treasury Secretary Discusses US CBDC Plans

CoinDesk Crypto
6 years ago

The U.S. Treasury Department is evaluating the merits of a government-sponsored digital currency, said one of its top officials Wednesday.

Deputy Treasury Secretary Justin Muzinich, speaking to the Atlantic Council during a digital seminar on trans-Atlantic economic relations, said the administration is studying a potential central bank digital currency (CBDC) tied to the dollar, alongside the Federal Reserve, the U.S.’ central bank.

“It’s something we’re studying … [T]his is really a decision which sits as much with the Fed as it does with Treasury,” he said. 

Related: South Korea’s Central Bank to Test Digital Currency in 2021

Muzinich noted the Boston branch of the Federal Reserve is already evaluating CBDCs, pointing to Governor Lael Brainard’s recent comments and the group’s work with MIT’s Digital Currency Initiative to research different technologies.

The Boston Fed has confirmed it’s evaluating a potential CBDC, though it may take years to proceed.

Read more: The Federal Reserve Is Experimenting With a Digital Dollar

The Federal Reserve and the Treasury Department are both part of an international working group evaluating digital currencies as well, Muzinich said. 

Related: Inside the Estonian CBDC Experiment That Could Shape the Digital Euro

“There are clearly efficiency benefits and cost benefits to using a distributed ledger,” he said. “And I also think, more broadly, it’s important for government to embrace innovation and not be scared by it.”

At the same time, Muzinich said finding a balance between preventing illicit activity and respecting consumer privacy will be a challenge. 

“Because how much of a consumer’s daily transactions should the government see, in a digital world, for instance? So there are a variety of factors that we are thinking through,” he said.

Regulating crypto

During prepared remarks prior to the Q&A, Muzinich also said the U.S. and Europe must cooperate in regulating cryptocurrencies. 

“Cryptocurrencies are a fascinating topic, because they have implications not only for private business but also for a number of activities,” he said. 

Read more: Boston Fed Is Looking at ’30 to 40′ Blockchain Networks for Digital Dollar Experiments

Cryptocurrencies can be used as more than just a means of payment, but can also provide some functions typically performed by governments. 

However, he said the government would be concerned by the fact that cryptocurrencies can be used to evade anti-money laundering (AML) rules. There are also monetary base and financial stability concerns. (While Muzinich did not mention libra, regulators and policymakers worldwide warned of financial instability after Facebook unveiled the stablecoin initiative in June 2019.)

Read more: Bank of England Governor Wants Global Regulations as Stablecoins Pick Up Steam

“Treasury has made it clear that the obligation to comply with U.S. laws is the same, regardless of whether a transaction is denominated in traditional fiat currency or digital currency. Existing laws apply to digital assets in no uncertain terms,” he said. 

Even digital currency efforts that comply with the spirit and letter of AML laws might raise concerns, such as if a stablecoin shifts from being fully reserved to being partially reserved or decides to change the makeup of its underlying basket of reserve currencies. 

“This could alter money supply or cause financial disruption when such a decision is being made by a private governing association, or by a majority of coin holders,” Muzinich said. “What if foreign hackers had acquired a majority of the coins? In any case, would important decisions about our economic system have been taken out at the hands of governments accountable to the people?”

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CoinDesk

Bill to Give Blockchain Records Legal Clout Reintroduced in US House

CoinDesk Crypto
6 years ago

Leaders of the Congressional Blockchain Caucus have reintroduced a bill that would give legal status to blockchain-secured records and smart contracts.

  • Rep. David Schweikert (R-Ariz.) and Rep. Darren Soto (D-Fla.) submitted the Blockchain Records and Transaction Act of 2020 on the House floor Wednesday, a measure similar to one introduced in 2018 but which never came up for a vote.
  • The current bill would prohibit individuals from denying an electronic record legal effect “solely because it is created, stored or secured on or through a blockchain.”
  • Further, the bill would enshrine blockchain and smart contracts in the Electronic Signatures in Global and National Commerce Act of 2000, the cornerstone federal law protecting electronics signatures more broadly.
  • The authors said in a statement this would legitimize blockchain records as a legal instrument in interstate and foreign commerce.
  • Several states have already implemented similar provisions, most recently Illinois.

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CoinDesk

BitMEX Says It’s ‘Business as Usual’ Despite 30% Drop in Bitcoin Balance After CFTC, DOJ Action

CoinDesk Crypto
6 years ago

One week after charges were brought by the U.S. Commodity Futures Trading Commission and Department of Justice, nearly 30% of BitMEX’s bitcoin (BTC) balance has been withdrawn by customers.

  • A spokesperson for the derivatives exchange told CoinDesk that, despite the significant withdrawals, “It is business as usual for the BitMEX platform.”
  • Total BTC held on BitMEX addresses dropped from 192,986 BTC on Sept. 30 to 135,619 BTC Tuesday, a 29.73% decline, according to data provided by Coin Metrics.
  • Aggregate open interest for BitMEX BTC futures also took a hit in the past week, falling by over $100 million from $732 million on Sept. 30.
  • The “fundamentals” of the exchange “remain strong,” however, according the spokesperson, specifically BitMEX’s “resilient open interest and liquidity.”
  • On-chain transaction data reviewed by CoinDesk suggests that much of the withdrawn coins were deposited to addresses at Binance, which also prohibits American users, and U.S.-based Gemini and Kraken.
  • Even though customers are withdrawing coins, one BitMEX balance that is not shrinking is the exchange’s Insurance Fund, a pool of funds nominally used to prevent auto-deleveraging of traders’ positions.
  • Since Thursday, the fund has grown by nearly 20 BTC (or over $200,000) to 36,588 BTC (or over $388 million), by far the largest insurance fund of any cryptocurrency derivatives exchange.
  • The Seychelles-based business consistently ranks fourth by 24-hour volume and second by open interest, according to bitcoin futures data from Skew.
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CoinDesk

Japanese Crypto Exchange TaoTao Agrees to SBI Purchase After Binance Talks End

CoinDesk Crypto
6 years ago

Financial conglomerate SBI Holdings’ market infrastructure subsidiary, SBI Liquidity Market said Wednesday it has acquired the Japanese cryptocurrency exchange TaoTao from the Z Corporation for an undisclosed sum.

  • TaoTao will become a wholly owned subsidiary of SBILM under the deal’s terms.
  • The pair said they intend to utilize each entity’s market assets: TaoTao’s existing crypto customer base and SBI’s knowledge of the financial landscape.
  • The acquisition bolsters SBI’s crypto trading operations, currently managed by SBI VC Trade Co.
  • Just yesterday, partnership talks between TaoTao and Binance fell through.
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CoinDesk

New Non-Custodial Crypto Exchange ‘Brings Bitfinex Liquidity to EOS’

CoinDesk Crypto
6 years ago

Eosfinex, a non-custodial digital asset exchange, has launched a beta version of its mainnet, saying it brings liquidity from the Bitfinex cryptocurrency exchange to the EOS community.

  • Direct access to Bitfinex’s liquid markets will provide an opportunity to “economically” trade large orders of EOS, tether (USDT) and other cryptos, Eosfinex product lead Steven Quinn said in a press release Wednesday.
  • The beta mainnet launch is said to enable off-chain order matching while retaining custody and settlement on-chain.
  • This would increase the speed of trades since they are not tied to (sometimes tardy) block confirmation times.
  • The usual large-cap digital assets will be supported including bitcoin (BTC), ether (ETH), litecoin (LTC) and stablecoin tether, Eosfinex spokesperson Chi Zhao told CoinDesk via email.
  • Eosfinex – which is built on EOSIO technology – will also offer Equilibrium (EOSDT), Everipedia (IQ) and interoperability bridging assets known as pTokens at launch.
  • The firm said the launch would help solve the issue of illiquidity in token trading for the EOS community, which it called a “major obstacle to growth.”
  • In addition, Eosfinex said it will stake assets on behalf of users, “covering the costs of network resources for traders.”
  • This would free up users’ locked EOS tokens on the network, further increasing liquidity within the EOS ecosystem, Zhao said.
  • Verification of an Eosfinex account is not mandatory to trade or transact with its various digital assets; it features a three-tiered system of individual authentication levels.
  • According to CoinMarketCap data, Bitfinex is the sixth-largest crypto exchange by trading volume.

See also: Judge Orders Bitfinex to Turn Over Tether Loan Documents (Again)

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CoinDesk

First Mover: Bitcoin Steady as Trump Tweets and Neo Takes on Ethereum

CoinDesk Crypto
6 years ago

Chinese tech companies were once seen as copycats of their Western peers: Alibaba was a knockoff of eBay and Baidu imitated Google. More recently, Chinese firms like TikTok and Huawei have established such dominant international positions that U.S. authorities have tried to hold them back. 

Now, the technological arms race is playing out in the cryptocurrency industry, where one Chinese company is taking on Ethereum, the world’s second-largest blockchain, which U.S.-based developers have used to build semi-automated trading and lending networks under the rubric of decentralized finance, or DeFi.   

Neo took aim at DeFi in late September with its launch of a new platform called Flamingo. Da Hongfei, a Neo co-founder, told CoinDesk in an interview the protocol will eventually provide users with features found on popular Ethereum-based projects like Uniswap, Curve Finance, yearn.finance and Synthetix. 

Related: Analysts Can’t Agree What Prompted Big Spike in New Bitcoin Addresses

Flamingo is not simply a product of “copy and paste,” the co-founder said in an interview. “It’s like rebuilding a parallel universe.”

– Muyao Shen

Read More: Amid US-China Tech War, Can Neo’s DeFi Stack Rival Ethereum’s?

Bitcoin Watch

Bitcoin defended the psychological support of $10,500 early Wednesday as Asian stocks shrugged off overnight weakness on Wall Street, reducing haven demand for the U.S. dollar. 

Related: Amid US-China Tech War, Can Neo’s DeFi Stack Rival Ethereum’s?

European stocks, too, are trading higher at press time alongside gains in the S&P 500 futures. 

Risk sentiment, which weakened Tuesday following U.S. President Donald Trump’s decision to abort the fiscal stimulus negotiations, was restored earlier today after he reversed course and urged Congress to approve a series of coronavirus relief measures, including a new round of $1,200 stimulus checks. 

That said, a large-scale stimulus is unlikely to come through any time soon. As such, both bitcoin and stocks may have a tough time scoring significant gains. 

Indeed, minutes of the latest Federal Reserve meeting, due at 18:00 GMT, are expected to reiterate tolerance for high inflation. That dovish message, however, has already been priced in by markets. 

For now, the cryptocurrency remains trapped in a narrowing price range. Contracting triangles usually end with violent moves on either side.  

Growth in the new bitcoin addresses has recently picked up. According to blockchain analyst Cole Garner, that has bullish implications for price. However, according to Alex Melikhov, CEO and founder of Equilibrium & EOSDT stablecoin, the address growth has been fueled, at least in part, by the recent mass exodus of bitcoins from controversial crypto derivatives exchange BitMEX to other major exchanges like Kraken, Binance, and Gemini. 

– Omkar Godbole

Read More: Analysts Can’t Agree What Prompted Big Spike in New Bitcoin Addresses

Token Watch

XRP (XRP): With Ripple executives threatening relocation from the U.S., volatility could be expected for the world’s fourth-largest crypto by market cap.

Uniswap (UNI): Uniswap’s big correction from Oct. 1 heights of $4.46 has some investors worried, but that hasn’t fazed users of the Ethereum-based wallet MetaMask as it registered 1 million active users per month hinting at continual growth in the DeFi sector.

What’s Hot

South Korean cryptocurrency exchange KuCoin restarts deposits, withdrawals for bitcoin, ether following $281M hack (CoinDesk)

BitMEX case highlights balance between “being a disruptive financial services innovator” and regulatory compliance (CoinDesk Opinion)

OCC Comptroller Brooks says “criminals will take advantage of whatever system is at their disposal,” noting that the percentage of fraud or criminal activity involving cryptocurrency remains low compared with traditional banking system (WSJ) 

Third quarter “felt in many ways like a watershed in crypto asset markets” (CoinDesk Research)

Silvergate Bank says SEN network getting added traffic from DeFi and surge in stablecoin usage (CoinDesk)

Survey reveals “scams, excessive hype and market manipulation” are seen as main obstacles to DeFi growth (Finder)

Survey by crypto insurance provider Evertas says 90% of institutional investors plan to invest more in cryptoassets like bitcoin over the next five years (Evertas)

Chicago-based bitcoin derivatives market Bitnomial raises $11.6M (CoinDesk)

New feature on browser-extension wallet MetaMask lets users swap tokens using DeFi exchanges like Uniswap, Kyber, Paraswap, 1inch.exchange and dex.ag (CoinDesk)

MIT wins ranking as top blockchain university for 2020, followed by Cornell, Berkeley, Stanford, Harvard, Columbia, Carnegie Mellon (CoinDesk):   

Analogs The latest on the economy and traditional finance

A report by Swiss bank UBS found billionaires increased wealth by more than a quarter from April to July, as central-bank stimulus helped buoy markets (The Guardian)

U.S. President Donald Trump rejects possibility of further COVID-19 stimulus until after the elections (CNBC)

Federal Reserve Chairman Jerome Powell calls for Congress to do more by continuing aggressive economic and fiscal policy (CNBC)

U.S. trade deficit for August increases to $67B, highest in 14 years (CNN Business)

Australian shares rise as federal government discloses plan to run record budget deficit for 2021 fiscal year (Reuters)

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CoinDesk

Analysts Can’t Agree on What Prompted Big Spike in New Bitcoin Addresses

CoinDesk Crypto
6 years ago

Bitcoin has seen a rapid rise in the creation of addresses on the blockchain so far this month, with one industry executive saying it’s likely due to traders moving funds off the legally troubled BitMEX exchange. Others point elsewhere.

  • The “entities net growth” metric from analytics firm Glassnode, which measures the daily change in unique entities or clusters of addresses controlled by a single participant, rose sharply by 244% from 9,750 to 33,620 in the first six days of October.
  • Tuesday’s tally of 33,620 was the highest since Oct. 3, 2018.
  • The surge in new entities noticeably picked up the pace in the wake of U.S. authorities’ recent decision to bring civil and criminal charges against cryptocurrency derivatives trading platform BitMEX and users’ resulting panicked migration of funds to other exchanges.
  • BitMEX has witnessed an outflow of at least 40,000 BTC (worth around $424 million at press time) since the charges were announced on Oct. 1.
  • Many of these coins have migrated to addresses belonging to major exchanges like Kraken, Binance and Gemini, and a good number of these addresses have been newly generated, according to Alex Melikhov, CEO and founder of Equilibrium and the EOSDT stablecoin.
  • “That has been a viable reason for the spike in new entities,” Melikhov told CoinDesk in a Telegram chat.
  • However, on-chain analyst Cole Garner disagrees, saying the spike in new entities probably represents an entry of new investors into the market and has little to do with the BitMEX issue.
  • That’s because the metric has continued to rise over the past five days even though BitMEX withdrawals cooled following an initial spike from Oct. 1–2.
  • “If BitMEX were responsible for address growth, the metric would have moved in lockstep with the outflow of funds from the exchange,” Garner tweeted Tuesday.
  • Melikhov countered that bitcoin’s flat price undermined that argument, adding, “If new investors entered market, the cryptocurrency would have rallied.”.
  • A third theory making the rounds is that Chinese media's recent and unusual reports calling cryptocurrency the year’s best-performing asset maybe have caused local investors to put some cash into the bitcoin market.
  • Melikhov said that was a more speculative theory.
  • The cryptocurrency is trading near $10,600 at press time, having faced rejection near $10,800 on Tuesday.
  • Disclosure: The author holds small positions in bitcoin and litecoin.

Also read: Bitcoin’s Options Market Retains Long-Term Bull Bias Despite Sluggish Price

Related Stories
CoinDesk

Analysts Can’t Agree What Prompted Big Spike in New Bitcoin Addresses

CoinDesk Crypto
6 years ago

Bitcoin has seen a rapid rise in the creation of new addresses on the blockchain so far this month, with one industry executive saying it’s likely due to traders moving funds off the legally troubled BitMEX exchange. Others point elsewhere.

  • The “entities net growth” metric from analytics firm Glassnode, which measures the daily change in unique entities or clusters of addresses controlled by a single participant, rose sharply by 244% from 9,750 to 33,620 in the first six days of October.
  • Tuesday’s tally of 33,620 was the highest since Oct. 3, 2018.
  • The surge in new entities noticeably picked up the pace in the wake of U.S. authorities’ recent decision to bring civil and criminal charges against cryptocurrency derivatives trading platform BitMEX and users’ resulting panicked migration of funds to other exchanges.
  • BitMEX has witnessed an outflow of at least 40,000 BTC (worth around $424 million at press time) since the charges were announced on Oct. 1.
  • Many of these coins have been migrated to addresses belonging to major exchanges like Kraken, Binance, and Gemini, and a good number of these addresses have been newly generated, according to Alex Melikhov, CEO and founder of Equilibrium and the EOSDT stablecoin.
  • “That has been a viable reason for the spike in new entities,” Melikhov told CoinDesk in a Telegram chat.
  • However, on-chain analyst Cole Garner disagrees, saying the spike in new entities probably represents an entry of new investors into the market and has little to do with the BitMEX issue.
  • That’s because the metric has continued to rise over the past five days even though BitMEX withdrawals cooled following an initial spike from Oct. 1–2.
  • “If BitMEX were responsible for address growth, the metric would have moved in lockstep with the outflow of funds from the exchange,” Garner tweeted Tuesday.
  • Melikhov countered that bitcoin’s flat price undermined that argument, adding, “If new investors entered market, the cryptocurrency would have rallied.”.
  • A third theory doing the rounds is that Chinese media's recent and unusual reports calling cryptocurrency the year’s best-performing asset maybe have cause local investors to put some cash into the bitcoin market.
  • Melikhov said that was a more speculative theory.
  • The cryptocurrency is trading near $10,600 at press time, having faced rejection near $10,800 on Tuesday.
  • Disclosure: The author holds small positions in bitcoin and litecoin.

Also read: Bitcoin’s Options Market Retains Long-Term Bull Bias Despite Sluggish Price

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CoinDesk

Huobi, Dragonfly, Coinbase Invest $500K in New DEX With Alternative Oracle Solutions

CoinDesk Crypto
6 years ago

Decentralized exchange CoFiX, which aims to offer more accurate and less costly trading with a new oracle solution, has raised half a million dollars from several crypto investors including Huobi’s DeFi Labs, Dragonfly Capital and Coinbase Ventures. 

Many existing decentralized finance (DeFi) platforms such as UniSwap and Compound use oracles that fetch external data from centralized exchanges and other DEXs to provide price feeds on-chain. 

This process can create a deviation between oracle price and the actual market price, where arbitrage trading occurs during price discovery and liquidity pool rebalancing. Traders and market makers will bear the arbitrage cost.

Related: Fidelity, Vanguard, Schwab Funds Have Been Loading Up on Crypto Mining Stocks

However, CoFiX claims to have better token price feeds based on a pricing mechanism derived from a decentralized price oracle called NEST and the DEX’s risk-assessment model.  

In NEST Protocol, miners receive NEST token rewards by paying commissions and providing price quotations, while verifiers profit from the difference between miners’ quotations and market price. Thus, CoFiX said, the protocol can have a set of financial parameters to verify prices and generate arbitrage-free price feeds. 

CoFiX will also factor in other price risks such as time via a mathematical model. In particular, it receives a market price “P” from NEST and factors a risk coefficient “K” into P to account for time delay and volatility. The platform then produces a new reference price that traders and market makers refer to when making transactions. 

“CoFiX is trailblazing a new path in DeFi with an innovative solution that can truly attract institutional traders and market makers to the space,” said chief investment officer Sharlyn Wu. “It leads DeFi into a new chapter of ‘Computable Finance.’” 

Related: Crypto Long & Short: Coinbase’s ‘Apolitical’ Stance Isn’t Nearly as Simple as It Sounds

Founded in March, the development team behind CoFiX include developers from DeFi project AlphaWallet and blockchain security team SECBIT, according to AlphaWallet founder Victor Zhang.

The new funding will be used to cover the costs of protocol auditing and early development. 

CoFiX’s official launch is slated for early October and there will also be a liquidity mining program to distribute 90% of its $COFI tokens to users, according to the firm.

Also read: Ripple Wins US Patent for New Oracle-Based Smart Contract Design

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CoinDesk

KuCoin Restarts Deposits, Withdrawals for Bitcoin, Ether Following $281M Hack

CoinDesk Crypto
6 years ago

Cryptocurrency exchange KuCoin is bringing more services back online after suffering a major hack late last month.

  • In a service update early on Wednesday, the South Korean platform said it is once more allowing deposits and withdrawals for bitcoin (BTC), ether (ETH) and the tether (USDT) stablecoin after upgrading wallet security for those cryptocurrencies.
  • KuCoin noted that wallet addresses for these coins had been refreshed and, while the older addresses would still work, it recommended users update.
  • The USDT versions for Tron, EOS, Omni and the Ethereum blockchain are all now open for deposits and withdrawals.
  • Full services have been resumed for 65 other cryptocurrency projects, it added.
  • After the breach, which saw $281 million in various crypto assets such as XRP and Ethereum-based coins stolen, KuCoin had moved to freeze all wallets and disable services.
  • On Oct. 3, the company’s CEO, Johnny Lyu, claimed the suspected hackers had been traced and that it had informed law enforcement agencies.
  • Lyu further claimed that another $64 million of stolen cryptos had been recovered, bringing the total value of recovered assets to $204 million at the time.
  • In its latest update on the incident, also posted Wednesday, the exchange said other entities are continuing to help retrieve funds, with Tether having frozen “about $22 million” in stolen USDT.
  • Other projects like Ocean Protocol have returned recovered coins to KuCoin wallets, though the amount involved wasn’t disclosed.
  • It also provided a list of suspicious addresses related to the hack and recommended they be added to blacklists.
  • Blockchain analytics firm Elliptic said Sept. 29 that the hackers had already exchanged millions of stolen tokens for $7.5 million in ETH on the decentralized exchanges Kyber Network and Uniswap.

Also read: Israeli Government Reportedly Investigating Unsuccessful Hack Targeting Crypto CEOs

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CoinDesk

South Korea’s Central Bank to Test Digital Currency in 2021

CoinDesk Crypto
6 years ago

The Bank of Korea (BoK) is to run trials of a possible central bank digital currency (CBDC) through next year.

  • As reported by The Korea Herald Wednesday, the move follows the progress of research to the technical phase in the summer and will see testing of distribution and circulation of the digital coin.
  • With China fast moving toward the launch of its CDBC and having already held tests across the nation assisted by banks and firms, South Korea moved to accelerate its work on a CBDC in April.
  • The BoK reportedly said the tests do not necessarily mean it will go ahead with the CBDC launch.
  • Originally saying it saw no need for a CBDC, the central bank has quickly shifted gear on the project: Phase one – designing and reviewing the technology – was completed in several months and phase two – looking at the likely infrastructure with an outside partner – started at the end of August.
  • While China has been testing its digital yuan with other entities, the BoK will test the blockchain-based CBDC in a virtual environment initially, said The Herald.
  • According to the Korea Times, the BoK said it will simulate transactions on a blockchain platform that would be similar to those for cash or traditional means of payment.
  • “The CBDC will be issued and circulated in the virtual world and we are going to test a number of transaction scenarios under a variety of circumstances,” an official said.
  • In June, the central bank formed a legal committee to advise on the possible launch of the digital currency.
  • Edit (14:20 UTC, Oct. 7 2020): This article previously stated that the BoK tests would be held in conjunction with banks, as per the Korea Herald report. This has now been corrected after the Herald amended its article.

Also read: Inside the Estonian CBDC Experiment That Could Shape the Digital Euro

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CoinDesk

South Korea’s Central Bank to Test Digital Currency With Banks in 2021

CoinDesk Crypto
6 years ago

The Bank of Korea (BoK) is to run trials of a central bank digital currency (CBDC) through next year, the institution announced Wednesday.

  • As reported by The Korea Herald, the move follows the progress of research to the technical phase in the summer and will see testing of distribution and circulation of the digital coin.
  • With China fast moving toward the launch of its CDBC and having already held tests across the nation assisted by banks and firms, South Korea moved to accelerate its work on a CBDC in April.
  • While the BoK reportedly said that the tests do not necessarily mean it will go ahead with the CBDC launch, they would be the final stage of the development.
  • Indeed, the central bank has been moving quickly, phase one – designing and reviewing the technology – was completed in several months, and phase two – looking at the likely infrastructure with an outside partner – started at the end of August.
  • As with China’s digital yuan tests, the BoK will test the blockchain-based CBDC with partner banks to test the circulation process, said The Herald.
  • In June, the central bank formed a legal committee to advise on the possible launch of the digital currency.

Also read: Inside the Estonian CBDC Experiment That Could Shape the Digital Euro

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CoinDesk

Amid US-China Tech War, Can Neo’s DeFi Stack Rival Ethereum’s?

CoinDesk Crypto
6 years ago

Chinese tech companies were once seen as copycats of their Western peers: Alibaba was a knockoff of eBay and Baidu imitated Google. More recently, Chinese firms like TikTok and Huawei have established such dominant international positions that U.S. authorities have tried to hold them back. 

Now, the technological arms race is playing out in the cryptocurrency industry, where one Chinese company is taking on Ethereum, the world’s second-largest blockchain, which U.S.-based developers have used to build semi-automated trading and lending networks under the rubric of decentralized finance, or DeFi.   

Neo took aim at DeFi in late September with its launch of a new platform called Flamingo. Da Hongfei, a Neo co-founder, told CoinDesk in an interview that the protocol will eventually provide users with features found on popular Ethereum-based projects like Uniswap, Curve Finance, yearn.finance, and Synthetix. 

Related: SEC Commissioner Peirce Chats About DeFi, Tokens and Her Unikrn Dissent at LA Blockchain Summit

Flamingo is not simply a product of “copy and paste,” the co-founder said in an interview. “It’s like rebuilding a parallel universe.”

Within a few days of its launch, Flamingo had attracted more than $1.6 billion of collateral locked into the protocol, according to a tweet from its official Twitter account. That was despite unexpected delays in the project’s early days due to “an overwhelming amount of network traffic,” as company officials described it.

The amount represents more than half of the $2.35 billion of crypto collateral locked into Uniswap, the top-ranked DeFi project, according to DeFi Pulse.

Some developers focused on the Ethereum blockchain say Flamingo is little more than a knockoff. 

Related: CryptoPunk Bounties: Ark.Gallery Rolls Out Blind Bids on 8-Bit NFT Collectibles

“It’s the first credible, wholesale, blockchain-scale ‘vampire’ attempt,” money market protocol Compound’s founder Robert Leshner tweeted on Sept 27. He described Flamingo as an attempt to “clone and launch” all the popular DeFi projects on Ethereum at the same time. 

“The success or failure of the project has extremely important ramifications for how we think of Ethereum’s network effect and composability lock-in,” Leshner wrote.

Neo is not the first project that has been trying to challenge Ethereum’s dominance and on the list of “Ethereum Killers.” The roster also includes EOS, Tron and Algorand. And for Neo, one of its biggest “selling points” to developers has been its nearly zero-transaction-fee model since its birth.

As of Tuesday, Ethereum’s average transaction fee was at $2.24, according to BitInfoCharts.

Neo’s DeFi ambition comes amid heightened geopolitical tensions between the U.S. and China, and while there’s no evidence yet of any intervention on behalf of either country’s government, the brewing competition for Ethereum’s business might represent a new front in the technological arms race. 

Ethereum’s native token, ether (ETH), has been beating its Chinese challenger in digital-asset-markets this year, with an approximate 170% gain in 2020 versus around 100% for Neo’s NEO token, according to data from Messari.

A rare recent report from Chinese state-controlled media labeled cryptocurrencies “the top performing investment” of the year, seen as a sign the central government is encouraging development in the space.

Da says approximately 90% of the people he talks to on Neo’s group chats on Discord are English speakers. That suggests Neo has a broad, geographically diversified user base, he said.

“We are not attracting people,” Da said. “We are attracting crypto assets. As long as it’s an asset, then it is welcomed. We don’t care if the private key is Chinese or American.”

One question that might loom in the minds of crypto traders is how much control or oversight Neo might cede to Chinese authorities.

Neo is currently working with the Blockchain-based Service Network (BSN), a Chinese state-sanctioned blockchain infrastructure project, which aims to attract international decentralized applications (dapps) developers to build their projects on it, according to Da.

Neo is like any other startup working furiously to bring new products to market, he says. 

“We don’t want to simply do a Uniswap copycat,” he said. “We are trying to do something original.”

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CoinDesk

Inside the Estonian CBDC Experiment That Could Shape the Digital Euro

CoinDesk Crypto
6 years ago

At the height of 2017’s ICO boom, European Union member Estonia said it had the digital backbone to issue its citizens a national cryptocurrency, an “Estcoin.”

At the time, then-European Central Bank (ECB) President Mario Draghi slapped down Estonia’s plans. But in an interesting indication of how far things have come, Estonia’s latest round of experimentation in building a central bank digital currency, or CBDC, is a rare example of a project publicly linked to the ECB’s now-energetic digital euro ambitions.

The ECB’s changed position today signifies how serious the discussion around a digital euro has become, said Luukas Ilves, head of strategy and innovation at Guardtime, the technology provider assisting Eesti Pank, the central bank of Estonia.  

Related: South Korea’s Central Bank to Test Digital Currency With Banks in 2021

It’s a plum assignment for Guardtime, which has a long history helping secure Estonia’s core government infrastructure using a novel industrial-grade blockchain system called KSI (Keyless Signature Infrastructure).

“We know the ECB is going to be appraised of the work we are doing with Eesti Pank,” said Ilves. “Looking ahead, we hope to pull in other eurozone central banks and make a compelling case that a retail CBDC can be deployed at scale for the entire European economy.”

Weighing scale 

The appropriate technical solution for wholesale or retail CBDCs may incorporate elements of blockchain architecture, but these have to be arranged in a way that can meet the necessary scaling requirements, said Guardtime CEO Mike Gault.

Building such as a system for a large economy and taking into consideration areas like micro-payments and internet of things (IoT), could run to millions of transactions per second, Gault said. That sort of scale really rules out the notion of multi-party validators reaching consensus to provide proof of a transaction being submitted to the ledger, he said.

Related: China Central Bank Official Reveals Results of First Digital Yuan Pilots

“The only reason you have these multiple validators is for censorship resistance,” said Gault. “We’ve yet to meet a central bank or a government that is interested in having censorship resistance. They are the censors.”

Eesti Pank did not return requests for comment by press time.

Read more: Digital Euro Would Provide Alternative to Cryptos, ECB President Lagarde Says

Working within the security parameter of a central bank, Gault explained that the KSI mechanism provides proof the system is operating without fault, using a system of hashes rather than slowing things down with public key infrastructure (PKI).  

Current blockchain technology might be fine for launching a wholesale CBDC, added Ilves, which basically amounts to “better clearing of transactions, and bringing some tokenized assets on top of the way banks do things today.” But a retail CBDC requires a different approach.

Identity politics

Meanwhile, the COVID-19 pandemic has highlighted the need for more digitization of the financial system, particularly in adverse circumstances when a government may want to disburse funds directly to its citizens. So would Estonia’s lauded e-government and digital identity system make this an easier lift from the perspective of the central bank?

The exact question of how Estonia’s CBDC will interface with other services is what the research is setting out to explore, said Ilves. What’s clearly the case, he added, is that Estonia’s existing payments and banking landscape is much less prone to things like fraud and identity theft. 

“There are all sorts of ways that digital signatures and a government-issued digital identity could be built into how to manage a wallet and authorize transactions,” said Ilves. “We don’t have any one particular scenario in mind, but we’re sure that a CBDC ecosystem that uses e-ID will work better, faster, safer, cheaper.”

Read more: Estonia’s Central Bank to Research if Blockchain Can Support a Digital Euro

It’s also worth noting that the European Commission, the executive arm that implements the decisions of the European Parliament, has an ambitious proposal to make digital identity systems more interoperable across its various member states. 

“I think by the time a CBDC gets deployed across Europe, the different ID systems will play better with each other and that interoperable infrastructure will be in place,” Ilves said.

Summing up, Guardtime chief Gault acknowledged CBDCs have become a busy and febrile space but reiterated the need for speed when it comes to deploying a truly retail offering.

“We think there are a lot of horses in this race,” said Gault, “but we’ve invented the first combustion engine.”

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CoinDesk

Japan’s LINE Starts Crypto Lending Service

CoinDesk Crypto
6 years ago

LVC, the crypto exchange operator and blockchain business unit of LINE, is launching a service that allows users to lend crypto assets like bitcoin and ethereum to its exchange BITMAX. In return lenders will receive a rental fee, which is like the interest on a bank loan.

  • Between Oct. 7- Oct. 30, the company will run a campaign that will let users earn up to 10% per annum of the fee from the lending service, according to a statement filed by LINE at the Tokyo Stock Exchange on Tuesday, CoinDesk Japan reported.
  • LINE is a popular messaging app in Japan, with more than 80 million local users. 
  • LINE Corp, a Tokyo-based subsidiary of the South Korean internet search engine provider NAVER, launched its crypto exchange BITMAX last year after receiving a license from Japan’s financial watchdog FSA, opening up trading services to its messaging app users.  
  • The rental fee is incurred every day starting on the day after the rental. 
  • As reported by CoinDesk Japan, Bitcoin (BTC), Ethereum (ETH), XRP (XRP), Litecoin (LTC) and Bitcoin Cash (BCH) are eligible for the lending service. 
  • In August, LINE launched a digital asset wallet and blockchain development platform. 
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CoinDesk

SEC Commissioner Peirce Chats About DeFi, Tokens and Her Unikrn Dissent at LA Blockchain Summit

CoinDesk Crypto
6 years ago

U.S. Securities and Exchange Commissioner Hester Peirce discussed some major trends in the digital asset world during a chat with journalist Laura Shin, at the LA Blockchain Summit on Tuesday. 

While the talk kicked off with Peirce’s letter of dissent against the recent SEC decision to levy a $6.1 million fine on Unikrn, the commissioner spoke about a range of topics including decentralised finance (DeFi), her safe harbor proposal for token issuers, and, whether token airdrops and DeFi governance tokens could run into securities regulations. 

Right at the beginning of the talk, Peirce noted the views laid out in the chat were her own and in no way represent the SEC or her fellow commissioners.

  • Regarding the Unikrn settlement, Peirce said that she felt it was a “rather heavy- handed” settlement over allegations of registration violation. “The message that we send with a case like that is one that is basically if you want to do innovation, go somewhere else to do it,” she said. 
  • Addressing regulations around token airdrops, Peirce stressed that people should come talk to the SEC about how they intend to distribute tokens. While the SEC has previously indicated that airdrops could be seen as security offerings, Pierce said giving something away was clearly distinct from selling something. 
  • “But again, I caution people that I’m one person on the commission, there are other people on the commission who might look at the same facts and circumstances differently than I do,” said Peirce.
  • Speaking about whether governance tokens used by many DeFi platforms could be treated like a securities offering, Peirce said that even though the tokens carry some equity-like benefits, multiple questions regarding regulatory structure and how these tokens could affect corporate governance continue to linger.
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CoinDesk

China Central Bank Official Reveals Results of First Digital Yuan Pilots

CoinDesk Crypto
6 years ago

An official for China’s central bank has unveiled usage statistics of state-backed digital currency trials that were conducted in three Chinese cities.

Speaking virtually at the Sibos 2020 conference on Monday, Fan Yifei, deputy governor of the People’s Bank of China, said the bank opened 113,300 consumer digital wallets and 8,859 corporate digital wallets for residents of Shenzhen, Suzhou and Xiong’an to pilot a digital yuan.

The digital wallets processed RMB 1.1 billion ($162 million) across 3.1 million digital yuan transactions between April and August when the pilots launched and ended, Fan said, making it the most widely used central bank digital currency (CBDC) in a commercial setting. 

Related: European Central Bank Moves to Trademark ‘Digital Euro’

Hooked up to facial recognition, barcode scanning and tap and go payment technologies, the digital yuan transactions spanned over 6,700 types of use cases. These applications included retail, hospitality, transportation, utility payments, government services and electronic versions of red envelopes gifted to healthcare workers in Shenzhen’s Luohu district, Fan detailed.

Also known as DC/EP, an acronym that stands for digital currency/electronic payment, the digital yuan is a part of a longstanding initiative by the Chinese government since 2014 — when it established a digital currency research institute — to use cryptocurrency-inspired technology to modernize payments, bypass international trade networks and exert geopolitical strength.

“To protect fiat currency from crypto-assets and safeguard monetary sovereignty, it is necessary for the central banks to digitize bank notes through new technologies,” Fan stressed in his Sibos talk about the importance of a digital yuan.

The digital yuan’s use in tourism will also be explored in a forthcoming pilot at the 2022 Winter Olympic Games in the nation’s capital of Beijing, the People’s Bank of China said in April, when it announced Shenzhen, Suzhou, Xiong’an and Chengdu were chosen as the first sites for trials.

Related: The Bahamas Reveal Details, October Date of Landmark Central Bank Digital Currency Debut

The trials have expanded to Beijing, the Yangtze River Delta region, the provinces of Tianjin, Hebei and Guangdong, and the cities of Hong Kong and Macau, the country’s Commerce Ministry said in August, and they could roll out to central and western China in the future.

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CoinDesk

Ripple Chairman Says Firm Could Leave US if Regulatory Environment Doesn’t Change

CoinDesk Crypto
6 years ago

Ripple Executive Chairman Chris Larsen threatened to pull his fintech firm out of the U.S. if what he termed the country’s hostile stance toward cryptocurrency companies does not soon change, according to Fortune.

  • Speaking to Fortune’s Jeff John Roberts at the LA Blockchain Summit on Tuesday, Larsen named Singapore and the U.K. as possible countries the San Francisco-base company could move to if the environment doesn’t improve.
  • He acknowledged that Ripple’s leaving the U.S. would do little to stop top-line federal regulatory oversight but said a softer host government would nonetheless help.
  • His payments company is battling investor allegations that XRP is a security as well as mixed signals from regulators at the U.S. Securities and Exchange Commission.
  • Larsen, saying nearly every other country has a better handling of crypto than the U.S., and claimed the U.S. is letting China lead the way on digital currency innovation.
  • He said a Biden administration may be beneficial in “repatriating” miners currently domiciled in China, noting that 65% of all miners are domiciled there.

Read more: Ripple Has Mixed Success in Motion to Dismiss Lawsuit Alleging Securities Fraud

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