CoinDesk Crypto

Crypto lender Nexo is preparing to enter the prime brokerage space with help from Chainlink-powered audits to bring more transparency to its operations.

The Swiss lender announced an integration with the oracle provider on Wednesday. Chainlink will provide audit trails for Nexo’s lending and borrowing operations, revealing how the firm handles user collateral, Nexo CEO Atoni Trenchev said in an interview.

Read more: DeFi Driving Chainlink’s Link Token to Record Highs

Related: DeFi Driving Chainlink’s Link Token to Record Highs

In cases where interest paid on a loan is in a separate currency than what the loan is denominated in, Chainlink will provide an exchange rate for calculating interest payments. The Chainlink oracle protocol operates as a decentralized and transparent arbiter of asset prices, eliminating the possibility of a central point of failure. 

Nexo hopes this increased security will aid the company’s expansion into the prime brokerage business. The lender revealed in the same announcement it plans to build out a “complete prime brokerage product suite.” Earlier this year, Coinbase, Genesis Trading, Bequant and BitGo all announced plans to become prime brokers.

The news of Nexo’s brokerage plans comes following the company’s announcement in June that, like its competitors in the lending market, it was offering interest on crypto deposits.

Read more: Behind ‘Prime Broker’ Buzzword Lies a Complex Strategy Game for Crypto Firms

Related: Crypto Lender BlockFi Says Monthly Revenue Up 100% After Bitcoin Halving User Boost

Nexo now offers 5% on bitcoin (BTC), bitcoin cash (BCH), ether (ETH), XRP, EOS, stellar (XLM) and litecoin (LTC), half of the 10% that Nexo users earn on fiat currencies and stablecoins like USDT, Dai and PAX. The interest for the product gets deposited into customer accounts daily at 12:00 UTC.  

Trenchev said before launching interest on crypto, he waited until Nexo had found “proprietary, market-neutral” strategies for profiting from loan arbitrage, basis trading and other strategies.

• How Chainlink and Cosmos Fit Into China’s Grand Blockchain Initiative
• Cred Taps Former NSA, Western Union Bosses for Leadership Team

Bitcoin is looking to leap key resistance alongside a strong rally in gold. 

The top cryptocurrency by market value is trading around $9,300 at press time, according to CoinDesk’s Bitcoin Price Index. That’s close to the resistance of a trendline connecting June 1 and June 22 highs. A sustained move past $9,330 would indicate an end of the bearish trend from the June 1 high of $10,429. 

While bitcoin has yet to restore the immediate bullish trend and is trading 50% below its record high of $20,000, gold has jumped to a nine-year high of $1,801 per ounce, as per data source TradingView.

Related: First Mover: With Trading Volumes Slumping, Are There Too Many Crypto Exchanges?

The hedge asset now sits just 6% short of the lifetime high of $1,920 reached in September 2011. 

See also: First Mover: With Trading Volumes Slumping, Are There Too Many Crypto Exchanges? 

The precious metal is likely drawing bids due to negative real (inflation-adjusted) yields offered by the US bonds, as noted by popular macro analyst Holger Holger Zschaepitz. 

As seen above, the real yield has declined from 0.3% to -0.73% over the past 3.5 months. During the same period, gold has rallied from $1,450 to $1,800. Essentially, gold is performing as an inflation hedge. 

Related: Market Wrap: With Low Volatility, Traders Seem to Like $9,000 Bitcoin

Bitcoin also rallied from $3,867 to $10,400 in the two months leading up to its third reward halving on May 11. Since then, however, the rally has stalled and the cryptocurrency has failed multiple times to find a foothold above $10,000. More importantly, bitcoin’s correlation with the S&P 500 index has strengthened, denting its appeal as a safe-haven asset. 

Many analysts, however, remain optimistic about bitcoin’s long-term prospects. 

“In the BTC market, there is an increased institutional acceptance and awareness of the asset class which should bode well for long-term price appreciation. We’ve seen prominent organizations and figures such as [Paul Tudor Jones], JPMorgan, Fidelity, which are publicly involved in the market, yet this is just the tip of the iceberg,” said Stephen Stonberg, COO and CFO at Bittrex Global, a cryptocurrency exchange. 

Legendary hedge fund manager Paul Tudor Jones allocated 1%-3% of his investment portfolio to bitcoin futures in May. 

”Bitcoin volatility has been lower than that of traditional assets throughout this crisis; however, we would argue there is nothing traditional about equity markets and the traditional economy today,” Stongberg added. “In this ‘new normal,’ bitcoin starts to look appealing as a new asset class that is not subject to the constraints and money printing of central banks.”

See also: Nearly $60M in Bitcoin Moved to Ethereum in June

The U.S. Federal Reserve has expanded its balance sheet by more than $3 trillion since the beginning of the coronavirus crisis in early March. However, the unprecedented money printing and the resulting concerns over inflation have mainly benefited gold. It remains to be seen if bitcoin takes up its expected role as an inflation hedge in the long run.

As for the next 24 hours or so, the focus is on the trendline resistance around $9,330. A strong move above that level would open the doors for $10,000. Alternatively, a move below the weekend low of $8,900 may invite stronger chart-driven selling. 

Disclosure: The author holds no cryptocurrency assets at the time of writing.

• Nearly $60M in Bitcoin Moved to Ethereum in June
• Ethereum Activity Metric Hits Highest Level in 2 Years

Bitcoin’s notorious volatility has practically disappeared during the most-recent phase of the coronavirus-induced economic crisis – and that’s now taking a toll on trading volumes at cryptocurrency exchanges around the world.

For more than two months, bitcoin has stayed in a range between roughly $8,500 and $10,200, an astonishing stretch of stability for an asset whose price rose 13-fold in 2017, tumbled 73% in 2018 and then jumped 94% last year. It’s up 29% so far in 2020, after wild gyrations earlier in the year that have mostly faded since late April.

The largest cryptocurrency changed hands Tuesday at $9,257, down 1% on the day. Yawn.

Related: As Gold Hits 9-Year High, Bitcoin Eyes Price Breakout

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According to CoinDesk Research, bitcoin’s 30-day historical volatility has fallen to its lowest in more than a year.

The preternatural calm in the bitcoin market has sapped the enthusiasm of cryptocurrency traders long accustomed to bigger daily price swings and adrenaline rushes. Based on a new report, many traders are moving toward the sidelines.  

The London-based data provider CryptoCompare wrote this week that trading volumes on top-tier cryptocurrency exchanges like Binance, OKEx and Coinbase fell by 36% in June to $177 billion; on lower-tier exchanges, volumes tumbled by 53% to $466 billion.

Related: Cryptocurrency Exchange Kraken Adds New Banking Option for US Users

Trading in cryptocurrency futures has also withered on venues like Chicago-based CME, according to the report. 

“The decline in bitcoin futures trading volume is mainly due to the continued decline in bitcoin volatility,” OKEx CEO Jay Hao wrote Tuesday in a post on LinkedIn. 

The price action is so uncharacteristically “drowsy” for bitcoin that the market is surely due for an awakening, the Norwegian cryptocurrency analysis firm Arcane Research wrote Tuesday in a report. 

“While the direction for bitcoin’s next move is unclear, a large move is surely approaching,” Arcane wrote. 

In the meantime, the decline in trading volumes could rekindle questions over how many cryptocurrency exchanges are really needed to serve the nascent but fast-growing market. 

The data site CoinGecko lists 391 cryptocurrency exchanges for spot trading and 33 for derivatives. 

The multitude offers a marked contrast with the scenario in traditional financial markets, where trading volumes tend to aggregate on a few large exchanges. Think New York Stock Exchange, Nasdaq and Tokyo Stock Exchange for stocks, or the CME and Intercontinental Exchange for commodity futures.   

Part of the explanation lies in just how fast and easy it is to build an exchange with digital-asset market technology, focused on blockchain-enabled tokens. Setting aside the burden of meeting regulatory or compliance requirements, white label offerings mean it can be almost like setting up a website (with added complexities like secure custody).

ChainUp, a Singapore-based provider of technology services to the blockchain industry, says on its website that it has helped more the 300 crypto exchange clients. 

“Start an Exchange in 10 Minutes,” the site reads.    

Don Guo, CEO of Broctagon Fintech Group, which helps smaller cryptocurrency exchanges tap into bigger pools of liquidity available from large exchanges, says the business model is more akin to that of local or regional stock-brokerage firms that can survive with a smaller clientele. 

“It’s not like traditional finance,” Guo said in an interview via Microsoft Teams. “People want to start exchanges. They want to launch their own netcoins or their own tokens, or they have their own communities.”

Eventually, “there will definitely be consolidation” in the industry because “it’s already a crowded space,” says Stephen Stonberg, a former Goldman Sachs and Brevan Howard executive who now serves as chief operating officer of Liechtenstein-based Bittrex Global.

“The market is so inefficient, which is why there are so many players,” Stonberg said in an interview. “I don’t think you’ll need state and local crypto exchanges. There’s no need for that level of fragmentation.”

For now, cryptocurrency traders and exchanges alike might welcome an industry shake-up – in the form of a fresh bout of bitcoin price volatility.   

BTC: Price: $9,300 (BPI) | 24-Hr High: $9,323 | 24-Hr Low: $9,216

Trend: The path of least resistance for bitcoin is on the higher side, according to daily chart indicators. 

The MACD histogram, an indicator used to identify trend strength and direction, has crossed above zero for the first time since early June, signaling a bullish reversal. The indicator suggests that the bearish trend following the June high of $10,430 has ended.

A similar message is being delivered by the 14-day relative strength index, which has made an upside break of a two-month falling trendline. 

In addition, volatility, as represented by the average true range (ATR) indicator, has declined to the lowest level since December 2019. In the past, BTC has witnessed upside breaks whenever ATR dropped to lows seen at press time, as noted by Adrian Zdunczyk, CEO of trading community The BIRB Nest. 

As such, one may expect bitcoin to soon slice through the immediate resistance at $9,373 (50-day moving average) and challenge the psychological hurdle of $10,000. Bitcoin is currently trading near $9,300, representing a 0.50% gain on the day. 

The cryptocurrency jumped 3% on Monday, confirming an upside break of a 10-day trading range of $8,830 to $9,300. Since then, however, the upside has been capped by the 50-day MA. “The 50-day MA must be broken and reclaimed as support for bulls to continue and add to the local uptrend momentum,” said Zdunczyk. 

On the downside, the weekly opening price of $9,077 is the level to beat for the sellers. A violation there would validate the bearish crossover of the 5- and 10-week averages and could yield a quick drop to $8,630 (May 25 low).

• Market Wrap: With Low Volatility, Traders Seem to Like $9,000 Bitcoin
• Blockchain Bites: Crypto’s Bailout Millions, Brazil’s Binance Ban, Lightning’s Bug

One of the world’s largest freight carriers wants to use an enterprise blockchain from the Alibaba Group to cut costs.

• Shanghai-based Cosco Shipping confirmed earlier this week it would trial Ant Blockchain, a product of Alibaba subsidiary Ant Financial, to streamline its operations.
• Cosco Shipping runs a fleet of 1,330 vessels with a combined cargo-carrying capacity of just under 106 million tons – one of the largest in the world.
• In a statement Monday, the companies said blockchain could be used to distribute verified and tamper-proof key documentation, such as container records and import licenses, to relevant parties.
• Ant Group’s executive chairman Eric Jing said Ant blockchain – which can reportedly process up to a billion transactions daily – can make global shipping more efficient.
• Earlier this year, electric car manufacturer Tesla said it was testing blockchain with Shanghai’s port authority to see whether it made importing goods any easier.
• In May, both Ant and Alibaba began trialing blockchain with the port operator China Merchants.

Also read: TradeLens to Digitize India’s Largest Private Port Operator

• Alibaba Claims Patented Cross-Chain System Is Better Than Cosmos
• VeChain to Develop Drug-Tracing Platform for Pharma Giant Bayer
• TradeLens to Digitize India’s Largest Private Port Operator
• Tradeshift Proposes Plan to Protect Denmark’s Supply Chains From COVID-19 Crisis

Cryptocurrency exchange Kraken has added a new bank to its funding options for U.S.-based customers.

• Users can now make bank wire transfers from their accounts at MDV Bank to fund purchases of cryptocurrency with U.S. dollars, the exchange said Tuesday.
• The addition brings the total number of U.S funding options to seven.
• Kraken recommends its users switch to the new service, saying funding would be faster with MDV.
• The minimum deposit and withdrawal limits have been set at $20, with maximum limits dependent on the user’s account level on Kraken.
• The existing six USD funding options include SWIFT transfers through Signature Bank and Etana Custody, FedWire through Signature and Etana, and the normal FedWire funding option. Businesses can also tap Silvergate Exchange Network.
• Insured by the Federal Deposit Insurance Corporation, MVB Bank was formed in 1997 and is chartered under West Virginia state law.
• InCore Bank AG became the first Swiss financial institution to offer euro banking services to Kraken clients last Friday.

See also: Kraken-Owned Crypto Facilities Wins UK License to Offer Derivatives Trading

• FATF Plans to Strengthen Global Supervisory Framework for Crypto Exchanges
• Crypto Exchanges See Big Drop in Volumes as Bitcoin Volatility Approaches 2020 Low
• Kraken-Owned Crypto Facilities Wins UK License to Offer Derivatives Trading
• E-Gold Claims US Officials Buried Key Report in 2008 Landmark Crypto Ruling

One of the key figures alleged to be behind the massive crypto fraud OneCoin has again had his sentencing control date adjourned.

• Konstantin Ignatov was expected to be sentenced on Wednesday.
• Acting U.S. Attorney Audrey Strauss asked for the date to be moved by four months because Ignatov’s cooperation with prosecutors is still in progress, according to a court filing dated July 7.
• It appears the request has been granted, as Judge Edgardo Ramos at the District Court of the Southern District of New York is now presiding over a different case on the same time slot, Inner City Press pointed out.
• No official court order has yet been filed on the matter.
• Four sealed documents were filed last month, on June 16, relating to Ignatov and the OneCoin Ponzi scheme.
• Ignatov was arrested by U.S. prosecutors in New York in March 2019 for his high-level involvement in the Ponzi scheme which is said to have stolen billions of dollars stolen from investors.
• He is accused by U.S. prosecutors of acting as the personal assistant to Ruja Ignatova, OneCoin’s top leader who is currently on the run from law enforcement. He is also her brother.
• Konstantin has already had his sentencing adjourned from April 8, again to allow his cooperation to be completed.
• He faces 90 years in prison, even after a plea deal on multiple counts of money laundering.
• A jury convicted OneCoin's Lawyer Mark Scott on charges of fraud in November 2019 after it was revealed he laundered $400 million for the scheme.
• Konstantin’s testimony played a key role in the conviction.
• Last Friday, a Singapore man was fined $72K after he was found guilty for promoting OneCoin based on the country’s Multi-Level Marketing and Pyramid Selling (Prohibition) Act, 2000.

See also: Crypto Scams Targeting Pacific Communities on the Rise, Say New Zealand Regulators

• Singapore Man Fined $72K for Promoting Crypto Ponzi OneCoin
• DC Lawyers Can Now Accept Crypto for Legal Fees
• Wirecard Fallout: Auditor EY Accused of Not Flagging $2.1B Black Hole Sooner
• Kleiman Bitcoin Case Heads to Trial as Motion for Sanctions Against Craig Wright Is Denied

DiDi, the Chinese equivalent of Uber, is forming a task force to design and implement a trial of China’s central bank digital currency (CBDC) on its transportation platform.

A spokesperson of the Chinese ride-hailing mobile service told CoinDesk in an email response that it has entered into a strategic partnership with the Digital Currency Research Institute of the People’s Bank of China (PBoC) in an effort to accelerate the application of the CBDC, known as Digital Currency Electronic Payment, or DCEP.

“Under PBoC’s overall DCEP strategy and operation timeline, DiDi’s DCEP taskforce will design and implement pilot DCEP projects in accordance with rigorous safety, security and governance standards,” the firm said.

Related: First Mover: Even Bank of America Acknowledges China Winning Digital-Currency Race

“The partnership is a key milestone in DiDi’s ongoing initiatives to enhance the interconnectivity of online and offline economic sectors in China, as the government seeks to support the development of the real economy sectors with innovative financial services,” the firm added.

DiDi is currently the dominant ride-hailing mobile service in China, after merging with a notable local rival in 2015 and acquiring Uber China, backed by investments from SoftBank, Apple, Alibaba and Tencent since its establishment in 2012.

While the details of the roll-out are not yet clear, the pilot plan could see one of the first real applications of China’s digital Yuan initiative as Didi touts a reach of over 500 million users in China, offering taxi-hailing, private car hailing, automobile solutions, two-wheelers, logistics and delivery.

In May, DiDi completed a $500 million fundraise for its autonomous driving subsidiary. The firm was most recently valued at over $60 billion, although the U.S. media outlet The Information said in a report in last October that investors had tried to exit at a valuation lower than that.

Related: FATF Under Germany: Expand Digital AML/CTF Efforts

In recent months, leaked UI screen shots showed that China’s four largest state-owned commercial banks have been on a development and test run for a wallet application that’ll be used to store, send and receive the DCEP.

It was further reported that the test phase is ongoing in four cities in China with selected commercial shops such as McDonald’s, Starbucks and Subway as well as government entities to participate on the trial.

In one instance, as reported by a local news outlet in April, selected government agencies were set to receive and consume their transportation allowances in the form of the PBoC’s DC/EP.

Read more: Chinese State-Owned Bank Offers Test Interface for PBoC Central Bank Digital Currency

• China Police Said to Detain Crypto OTC Traders Amid Money Laundering Crackdown
• How Chainlink and Cosmos Fit Into China’s Grand Blockchain Initiative

DiDi, the Chinese equivalent of Uber, is forming a task force to design and implement a trial of China’s central bank digital currency (CBDC) on its transportation platform.

A spokesperson of the Chinese ride-hailing mobile service told CoinDesk in an email response that it has entered into a strategic partnership with the Digital Currency Research Institute of the People’s Bank of China (PBoC) in an effort to accelerate the application of the CBDC, known as Digital Currency Electronic Payment, or DCEP.

“Under PBoC’s overall DCEP strategy and operation timeline, DiDi’s DCEP taskforce will design and implement pilot DCEP projects in accordance with rigorous safety, security and governance standards,” the firm said.

Related: First Mover: Even Bank of America Acknowledges China Winning Digital-Currency Race

“The partnership is a key milestone in DiDi’s ongoing initiatives to enhance the interconnectivity of online and offline economic sectors in China, as the government seeks to support the development of the real economy sectors with innovative financial services,” the firm added.

DiDi is currently the dominant ride-hailing mobile service in China, after merging with a notable local rival in 2015 and acquiring Uber China, backed by investments from SoftBank, Apple, Alibaba and Tencent since its establishment in 2012.

While the details of the roll-out are not yet clear, the pilot plan could see one of the first real applications of China’s digital Yuan initiative as Didi touts a reach of over 500 million users in China, offering taxi-hailing, private car hailing, automobile solutions, two-wheelers, logistics and delivery.

In May, DiDi completed a $500 million fundraise for its autonomous driving subsidiary. The firm was most recently valued at over $60 billion, although the U.S. media outlet The Information said in a report in last October that investors had tried to exit at a valuation lower than that.

Related: FATF Under Germany: Expand Digital AML/CTF Efforts

In recent months, leaked UI screen shots showed that China’s four largest state-owned commercial banks have been on a development and test run for a wallet application that’ll be used to store, send and receive the DCEP.

It was further reported that the test phase is ongoing in four cities in China with selected commercial shops such as McDonald’s, Starbucks and Subway as well as government entities to participate on the trial.

In one instance, as reported by a local news outlet in April, selected government agencies were set to receive and consume their transportation allowances in the form of the PBoC’s DC/EP.

Read more: Chinese State-Owned Bank Offers Test Interface for PBoC Central Bank Digital Currency

• China Police Said to Detain Crypto OTC Traders Amid Money Laundering Crackdown
• How Chainlink and Cosmos Fit Into China’s Grand Blockchain Initiative

Social media has thrown dogecoin traders a treat.

Trading volumes for the Shiba Inu meme-based cryptocurrency spiked nearly 2,000% in the last two days, according to data from Messari, as videos on TikTok encouraged users to invest. The whimsical asset’s price climbed 35% to $0.035 over the same period. 

Dogecoin is a “joke cryptocurrency,” according to one of its founders, Jackson Palmer. As such, impromptu social media-based frenzies may be a fitting use case. Daily volume for the cryptocurrency stayed well below $5 million for the past two months. 

Related: Crypto Exchanges See Big Drop in Volumes as Bitcoin Volatility Approaches 2020 Low

“The recent rise of dogecoin, a meme coin, should serve as a reminder to everyone in the space that the most popular use case for crypto is still purely speculation,” said Anil Lulla, former analyst at Bloomberg and co-founder of cryptocurrency research firm Delphi Digital.

Global search interest in “how to buy dogecoin” also skyrocketed from a score of 25 to 100, the highest possible search popularity score, over the past few days, according to 12-month Google Trends data analyzed by CoinDesk. 

Some of the videos on TikTok, a newly popular social media platform, garnered more than 100,000 “likes,” while all videos with the “dogecoin” hashtag amassed several million.

For speculators and meme aficionados, dogecoin offers a different value proposition than other cryptocurrencies, according to Qiao Wang, an independent cryptocurrency trader formerly at Tower Research.

The value of most top cryptocurrencies “comes from monetary premium,” said Wang. “Dogecoin’s value comes from memetic premium.”

• Decentralized Exchange Volumes Up 70% in June, Pass $1.5B
• Messari
• Kin Foundation Publishes First Transparency Report Amid SEC Court Fight

The Taiwanese startup Bitmark, which participated in a government-sponsored hackathon in May, was unable to promote its blockchain solution due to Apple’s pandemic moderation policy. 

“We were trying to essentially build a weather forecast but for public health,” said Bitmark CEO Sean Moss-Pultz. “It allowed people to volunteer their symptoms and what they are trying to do to get better, and connect that to public data from public health offices.”

Precisely because the World Health Organization excludes Taiwan, the small Asian nation has developed a unique set of software tools for combatting COVID-19. However, the Apple store only lists health apps published by government entities or nonprofits. This means the small nation’s startup community has limited access to mobile device users. (Apple did not respond to requests for comment by press time.)

Related: Why Bitcoin Bulls Are Betting on Explosive Growth in India

According to a report by the analytics and accelerator company AppWorks, there are now roughly 112 blockchain startups in Taiwan, including the supply chain management startup BSOS, which received an investment from Taiwan’s National Development Fund earlier this year.

Read more: Austrian Government Funds Development of Blockchain-Based COVID-19 App

“What are the next growth opportunities for blockchain? Everyone has different interpretations and expectations,” the AppWorks report said. “However, currently, conversations are mostly centered around the pandemic, with criticisms mainly targeted at the limitations and failures of centralization.”

Moss-Pultz said his firm experienced those limitations first-hand. The mainstream app stores would only accept the resulting app, called Autonomy, if the Taiwanese government itself released the mobile app.

Related: Swiss Government Makes Moves to Encourage Crypto Businesses

“People all around the world are getting their apps blocked,” Moss-Pultz said. “We spent most of June trying to figure out what type of strategy we could have. … Most likely we’re just going to [release Autonomy] as a web thing.”

Apple and Google are hardly the only tech giants defining the public pandemic narratives. Amazon, for example, forced bitcoin advocate Knut Svanholm to remove a brief mention of the coronavirus from his self-published book in order to distribute it through Kindle in April. 

As the Svanholm incident illustrated, moderating health tools during a pandemic without resulting in blunt-force censorship is a difficult task to automate.

Colin Steil, co-founder of the Taiwanese blockchain startup Cartesi, said tech companies “always have to proceed with caution” to avoid their software being “used to cause unrest or disrupt in political issues.” 

Internet giants can be accused of censorship regardless of whether they moderate content. Companies like Facebook and Twitter are both heavily criticized for rampant misinformation campaigns on their platforms, although they took radically different approaches to moderation. (Facebook has since recanted and said it will change its policies, due to public pressure.) Critics seem to consider the opposite of censorship to be, not digital anarchy, but consistently high-quality moderation. 

Read more: Social Media Bans ‘Highlight the Profound Censorship on Web 2.0’

Steil said that, compared to stringent but relatively healthy Taiwan, American leaders were “stalled for many reasons” in reacting to the pandemic and “reliant on tech companies” to offer solutions. 

“Taiwan took the pandemic very seriously due to its prior experience with viruses, and reacted in a method that used whatever tools and tech they had available,” Steil said, highlighting the contrast in public policies. 

Blockchain Commons founder Christopher Allen, who collaborated with Bitmark at the May hackathon and is an advocate for decentralized identity tech, said “good actors” at Silicon Valley’s tech giants are often “stymied” by company objectives. 

So far, American tech companies dominate public services, sometimes even running servers for government agencies, he said, in ways other private companies cannot compete with.

“Their strategies have been to vertically integrate and limit other people,” Allen said of companies like Google, Facebook and Apple. “I don’t think their intent is malicious in any fashion, but the nature of keeping competition out has a potential harm.”

• South Korean Government Turns to Blockchain Tech to More Securely Store Clinical Diabetes Data
• Binance-Backed Blockchain Auditing Firm Partners With Hdac to Track Internet-of-Things Devices

Chainlink’s link token jumped to record highs on Monday, far surpassing bitcoin’s returns since the start of 2020. The ever-increasing use of Chainlink’s price oracles in decentralized finance (DeFi) is driving the cryptocurrency higher, according to analysts. 

The 12th largest cryptocurrency by market value clocked a lifetime high of $5.72 at 11:45 UTC (7:45 a.m. ET) and was last trading at $5.65, representing over 200% gains on a year-to-date basis.

Meanwhile, bitcoin is down more than 50% from its lifetime high of $20,000 reached in December 2017 and has gained only 29% so far this year, according to data source Coin Metrics. 

Related: Delta Exchange Predicts $40 Price for COMP Ahead of Governance Token Deluge

The link cryptocurrency has decoupled from bitcoin, the crypto market leader. Observers are associating link’s massive rally with Chainlink’s increased usage in the decentralized finance space. 

“We’re attributing this short-term price spike to Chainlink’s scaled usage in the DeFi space,” said Vance Spencer, co-founder of Framework Ventures, which is one of the largest private holders of link tokens. “The market cap for DeFi projects have quintupled in the last half year, and most of the ecosystem is now relying on (or planning to rely on) Chainlink for connecting on-chain DeFi smart contracts to off-chain data feeds like commodities and crypto price data.“

Read more: Investment Firm Plans ETF-Like Product for Compound Yield Farmers

Meanwhile, Simon Peters, crypto market analyst at investment platform eToro said, “The crypto asset has been displaying a bullish trend for some time now, with Chainlink making all the right noises by partnering with a number of projects in the decentralized finance (DeFi) space.” 

Related: Gelato Gives Developers a New ‘Money Lego’ Tool for DeFi Applications

Chainlink is a system of oracles built on top of the Ethereum blockchain that supplies data to decentralized blockchains. For example, if two users bet on the outcome of a binary event, the oracle will tell the smart contract which user won, so it can pay the winning bettor.

With Chainlink, the advantage is that it supplies data to smart contracts in a decentralized way, or from multiple sources. That ensures the security and reliability of the blockchain, which can be compromised in case the oracle depends on a single source. For instance, lending protocol bZx suffered multiple hacks in February as the platform once used Kyber Network as a single oracle, or supplier of asset prices. 

Hence, the DeFi industry has turned to Chainlinks. Major names in the DeFi space including Kyber Network, AVA, Graph Protocol, Opium Network, Synthetix and now bZx have integrated Chainlink’s oracles, according to its official blog. Chainlink’s official twitter handle has announced at least two partnerships every week over the last two months. 

The cryptocurrency may have received an additional boost from Chainlink’s association with China’s national blockchain project. “The importance of the Chinese government choosing to integrate Chainlink oracles into their national blockchain services network (BSN) cannot be understated,” said Spencer. 

“Long term, we expect Chainlink’s value to continue to appreciate. We believe that the smart contract platform that eventually becomes the standard for Web3 will be valued at several factors higher than Ethereum’s current market cap. If that is the case, then it’s natural to assume that its security layer, Chainlink, will significantly grow in value as well,” said Spencer. 

Some observers are of the opinion Chainlink is best positioned to benefit from the ongoing multi-year shift in focus from base layer chains to the middleware services that provide security for data feeds.

Read more: Tether CTO Claims USDT Stablecoin Can Boost DeFi Liquidity

Further, the lure of earning additional by staking link tokens could drive demand for the cryptocurrency. “The idea that users could someday earn a steady income stream for participating in the crowdsourcing of useful data for smart contracts is likely to be attractive to institutional and educated retail investors alike,” said Spencer. 

In Chainlink’s ecosystem, staking involves depositing link tokens in a node in order to be able to undertake jobs that require collateral or joining a staking poll in order to connect blockchain to off-chain data, as noted by crypto exchange Exodus.

With the flow of coins toward exchanges recently jumping to the highest level since March, there’s a chance the cryptocurrency could witness a short-term pullback. 

Exchange net flow, or the difference between volume flowing into and out of exchanges, rose to 3,482, the highest since March 14, according to data provided by the blockchain analytics firm Glassnode. 

Investors tend to move cryptocurrency from their wallets to exchanges to be able to more quickly liquidate holdings during a price crash or when they expect a price pullback. 

“From a technical perspective, link just broke past its largest resistance level at ~$4.90 and is now in price discovery mode both in terms of BTC and USD,” said Connor Abendeschien, crypto research analyst at Digital Assets Data. 

• Ethereum Activity Metric Hits Highest Level in 2 Years
• What Is Yield Farming? The Rocket Fuel of DeFi, Explained

Over the past month, while market action has been relatively quiet, crypto traders have punched the buy button when bitcoin’s price drops below $9,000.

• Bitcoin (BTC) trading around $9,208 as of 20:00 UTC (4 p.m. ET), slipping 0.80% over the previous 24 hours.
• Bitcoin’s 24-hour range: $9,201-$9,379
• BTC above 10-day and 50-day moving average, a bullish signal for market technicians, although trading volumes on Tuesday are lower than Monday.

“Bitcoin managed to approach the level of $9,300, after which immediately rolled back to the $9,250 area,” said Constantine Kogan, partner at cryptocurrency fund of funds BitBull Capital. “The coin continues to trade in a narrow price range,” he said, adding that crypto markets are experiencing record low volatility. 

Read More: Exchanges See Drop in Volumes as Bitcoin Volatility Approaches 2020 Low

Related: Nearly $60M in Bitcoin Moved to Ethereum in June

“Such low volatility is uncharacteristic of bitcoin,” said Vishal Shah, an options trader and founder of derivatives exchange Alpha5. “However, this sentiment has permeated through the trading community.” 

Less volatility has translated into fewer options bets. Open interest has dropped since the June 26 expiration date and is now hovering at the $1.1 billion mark. That’s quite a bit off from where it was in June, when it hit a record $1.8 billion high, according to derivatives data aggregator Skew.

The lack of action is causing vigilant traders to change their strategies. For example, there appears to be sentiment that bitcoin at $9,000 is a good price point for traders to buy. “Every time the market has poked its nose below $9,000, buyers have stepped in,” said Rupert Douglas, head of institutional sales at London-based broker Koine. 

Indeed, over the past month, when the world’s oldest cryptocurrency dipped below $9,000, traders scooped it up on spot markets like Coinbase. 

Related: Crypto Exchanges See Big Drop in Volumes as Bitcoin Volatility Approaches 2020 Low

Douglas says the narrow bitcoin price action might not last because most traders surely would like more volatility, which is what attracts many to crypto in the first place. “Bitcoin is coiled for a big move,” he told CoinDesk. “I still favor the upside. I think we will see bitcoin heading above $11,000 in short order when a move comes.” 

Read More: Lightspeed Invests $2.8M in Crypto Market Maker Wintermute

Ether (ETH), the second-largest cryptocurrency by market capitalization, was in the red Tuesday, trading around $237, down 0.66% in 24 hours as of 20:00 UTC (4:00 p.m. ET).

Read More: Ethereum Activity Metric Hits Highest Level in 2 Years

Ethereum-based decentralized exchanges, or DEX, have shined in 2020, with over $5 billion in volume this year so far, according to aggregator Dune Analytics. Kyber Network, a DEX and token project, recently upgraded to its Katalyst and KyberDAO protocol version. This has led to its governance token, Kyber Network Crystal, or KNC, to jump from $0.18 at the start of 2020 to $1.64 Tuesday. 

Traders are purchasing the Kyber token for its rewards as “staking” KNC generates an ether-based return on fees paid for using the DEX. “Kyber has upgraded to Katalyst,” said Peter Chan, a quantitative trader at Hong Kong-based OneBit Quant. “There has been a staggering 6 million staking in KNC already, very impressive.”

Read More: Industry Group Seeks to Get Ahead on Staking Regulations

Digital assets on CoinDesk’s big board are mixed Tuesday. Notable winners as of 20:00 UTC (4:00 p.m. ET):

• cardano (ADA) +14.2%
• dogecoin (DOGE) +13%
• ethereum classic (ETC) +5.2%

Read More: Cardano at One-Year High on Shelley Upgrade

Notable losers as of 20:00 UTC (4:00 p.m. ET):

• bitcoin sv (BSV) -3.8%
• tron (TRX) -3.8%
• xrp (XRP) -1.4%

Equities:

• In Asia, Japan’s Nikkei 225 ended the day down 0.44%. The index was dragged down by losses in the real estate and transportation sectors.
• The FTSE 100 index closed in the red 1.5%. Coronavirus concerns and fresh lockdowns sent European stocks lower Tuesday.
• The S&P 500 lost 1.1%. Losses in travel stocks ended the U.S. index’s five-day run of gains.

Commodities:

• Oil is down 0.58%. Price per barrel of West Texas Intermediate crude: $40.35
• Gold rallied in late trading Tuesday, up 0.78% at $1,796 per ounce

Treasurys:

• U.S. Treasury bonds were mixed Tuesday. Yields, which move in the opposite direction as price, were down most on the 10-year, in the red 6.3%.

• Market Wrap: As Stocks Rally, Bitcoin Trades Above $9.3K for the First Time in 10 Days
• Bitcoin Up 27% in First Half of 2020, Beating Gold, Silver and Platinum

Nearly $60 million worth of bitcoins moved to Ethereum during June, according to data estimates from Dune Analytics. Wrapped Bitcoin, the oldest tokenized bitcoin protocol on Ethereum, is responsible for roughly 75% of that growth after moving more than 4,800 BTC to Ethereum last month. 

Demand has increased for using bitcoin in a variety of decentralized financial services as Ethereum continues to be the most popular off-chain destination for bitcoins. More specifically, yield farming and MakerDAO adding tokenized bitcoin as collateral are likely strong catalysts, said Medio Demarco, former associate at Deutsche Bank and co-founder of cryptocurrency research firm Delphi Digital.

“The recent trend shouldn’t come as a surprise and will probably continue,” Demarco told CoinDesk.

Related: Market Wrap: With Low Volatility, Traders Seem to Like $9,000 Bitcoin

The increasing popularity of tokenized bitcoin is also no surprise to Ben Chan, CTO at BitGo, the cryptocurrency payments processor that spearheaded Wrapped Bitcoin. “The purpose of WBTC is to bring bitcoin to the world of decentralized finance,” Chan said. “Yield opportunities for lending and supplying WBTC” in Ethereum-based applications are driving recent growth, he added.

Currently $132 million worth of bitcoin is on Ethereum, at the time of publication, or roughly 0.08% of the leading cryptocurrency’s market capitalization, according to OnChainFX.

Is the growing demand to use bitcoin on Ethereum a positive signal for the leading cryptocurrency? According to Demarco, the trend has a “synergistic” effect for both blockchains. 

Chan agreed, telling CoinDesk that, for Ethereum, growth in the value of assets on decentralized finance applications is “a step towards the maturation of trustless and transparent financial services.” For Bitcoin, the benefit comes from being able to earn yield and collateralize bitcoin,” which “adds incentive” for users to invest in the cryptocurrency, according to Chan. 

Related: Delta Exchange Predicts $40 Price for COMP Ahead of Governance Token Deluge

Using bitcoin on Ethereum is “potentially bullish for both networks,” Chan said.

• Gelato Gives Developers a New ‘Money Lego’ Tool for DeFi Applications
• Ethereum Activity Metric Hits Highest Level in 2 Years

One startup founder has done the math and he thinks the true value for the COMP token right now should be more like $40.

The governance token for the Compound lending platform has been trading between $172 and $215 over the last seven days, according to CoinGecko, after touching a yield-farming-fueled high of $373 on June 21.

Pankaj Balani, CEO of Delta Exchange, a derivatives marketplace for cryptocurrency, ascribed COMP’s high prices to “initial euphoria.” 

Related: Gelato Gives Developers a New ‘Money Lego’ Tool for DeFi Applications

Read more: What Is Yield Farming? The Rocket Fuel of DeFi, Explained

Delta Exchange said the analysis was provided to help the market better price governance tokens as other startups look to replicate COMP’s success. In an email to CoinDesk sent via an external PR firm, Delta Exchange said it hoped to deflate the typical boom-and-bust cycle for new crypto tokens.

Compound began distributing its governance token on June 15, kicking off a yield farming craze throughout the decentralized finance (DeFi) ecosystem. COMP remains the most sought-after asset of the nascent crop of DeFi governance tokens. The asset remains lucrative to “mine” by using the Compound product.

Delta Exchange analyzed the price and determined that a reasonable estimate for a market price is much lower, however. The high price right now can be explained in part by a lack of liquidity, the firm said. The smart contract that governs COMP allows for 10 million tokens to exist, but not even close to that many are actually on the market. 

Related: Ethereum Activity Metric Hits Highest Level in 2 Years

“As more and more supply is released every day, an equilibrium will be established and price will start to normalize,” Balani said via a spokesperson.

CoinGecko shows the circulating supply at 3 million tokens. The COMP governance design sets aside 40% of the 10 million token supply to be distributed to Compound users each day over the next four years.

Read more: Some Numbers That Show Why Yield Farming COMP Is So Seductive

In late June, Andrey Belyakov gave a similar price estimate (when COMP’s liquidity was $70 million lower) in a Medium post on ways to short COMP, including on his company’s own platform, Opium. He placed the price at $30 at that time.

At a price more in line with these estimates, Belyakov noted, it would no longer be profitable to take out a loan on Compound. Instead, fresh COMP would provide a light discount on a loan’s interest rate, in the form of cashback, which he describes as a “healthy and sustainable mechanism.”

Delta’s estimate is based on fundamentals in a world where all COMP are liquid. Co-founder Jitender Tokas provided the analysis that justified the $40 price estimate. 

Tokas assumed that eventually much of the current borrowing will unwind as COMP price recedes and people borrow less just to earn COMP and borrow for more organic reasons. He estimated the natural borrowing rate at approximately $400 million. Then he suggested a 5x multiple of Compound’s book, noting that a 2x to 3x multiple is typically allowed for a normal bank, as a way of capturing stronger potential growth for a new product. 

Read more: Delta Exchange Launches Crypto Interest Rate Swaps

The most generous allowance Tokas made was for the value of governance rights. He noted that in the equities market the value of voting versus non-voting shares is typically only about 5%, but there are many differences in Compound. It has less oversight and COMP holders have more powers. So Delta estimated the governance powers at 20% of the economic value of Compound.

So Delta’s analysis can be written as follows:

COMP Value = ($400 million loan book X a forward valuation multiple of 5 X 20% value for governance powers ) / 10 million total tokens = $40

The Delta Exchange team believes there will be many more tokens like this. Tokas wrote:

“The aim of this report is to give the people in the ecosystem a framework for valuing governance tokens. The success of COMP will inevitably result in many more governance tokens to hit the market. If we are to avoid creating pump and dump cycles, we need market consensus on how to value these tokens.”

• Market Wrap: As Stocks Rally, Bitcoin Trades Above $9.3K for the First Time in 10 Days
• What Is Yield Farming? The Rocket Fuel of DeFi, Explained

Wintermute, an algorithmic liquidity provider, has received a $2.8 million investment from the prominent early-stage firm Lightspeed Venture Partners.

• The London-based firm distributes liquidity with techniques similar to those used in high-frequency trading and traditional market making.
• Founded in 2017, Wintermute provides liquidity on more than 500 spot trading pairs, on dYdX perpetual swaps and a handful of crypto exchange-traded products (ETPs) from 21Shares (formerly Amun).
• The market maker will use the funding to expand further into crypto derivatives, as well as into the over-the-counter and decentralized finance spaces.
• The Series A comes months after Wintermute raised an undisclosed seven-figure sum in a seed round led by Blockchain.com’s venture arm in February.
• Lightspeed was the first outside investor into Snap, the company behind the popular video messaging app Snapchat, in 2012; it also participated in an angel round for Ripple, when it was still known as OpenCoin, in April 2013.
• Partner Jeremy Liew said market makers were fast becoming essential infrastructure providers as the growth of new crypto market subsets and diverging regulatory regimes had seen the number of standalone exchanges explode.
• In 2014, Lightspeed led Blockchain.com's $30.5 million Series A; the California-based investment firm raised a total of $4.1 billion across three funds in April this year.

• Veteran Commodities Trader Chris Hehmeyer Goes All In on Crypto
• ‘Party Starters’: Stellar Event Sees Frank Discussion of Crypto Market Makers
• Blockstack Will Pay Liquidity Provider GSR to Trade Its STX Token
• Bain, Lightspeed Back First ICO With $133 Million Basis Funding

At least 75 crypto and blockchain firms received approximately $30 million in government-backed PPP loans during the COVID-19 economic crunch while Binance continues to donate personal protective equipment equipment through its charitable wing. Here’s the story:

You’re reading Blockchain Bites, the daily roundup of the most pivotal stories in blockchain and crypto news, and why they’re significant. You can subscribe to this and all of CoinDesk’s newsletters here. 

Crypto Loans
More than 75 companies in the blockchain and cryptocurrency industry collected at least $30 million from the Paycheck Protection Program (PPP), a program meant to provide loans to small businesses affected by the COVID-19-led economic fallout, CoinDesk has found. According to information published Monday by the U.S. Small Business Administration, loan recipients include Zcash developer Electric Coin Company, Ethereum venture studio ConsenSys and several crypto venture firms. 

Related: Blockchain Bites: E-Gold Claims, Arca’s New Fund and Generation Z

Binance: Wins and Losses
Binance, the world’s biggest crypto exchange by trading volume, has donated 27,000 KN95 masks worth more than $60,000 to the U.K. National Health Service’s Pru Trust. Binance Charity recently created the PPE Token stablecoin, which has been used to track the delivery of masks and other equipment to hospitals. That’s as the exchange acquired crypto wallet app Swipe.io. Swipes wallet is available in more than 30 countries and allows users to purchase items with crypto via a Visa debit card. In less positive news, the Brazilian Securities and Exchange Commission (CVM) on Monday ordered Binance to immediately cease offering derivatives trading in the country. 

Lightning Bug
Researchers at the Hebrew University of Jerusalem have detailed vulnerabilities in Bitcoin’s Lightning Network that could lead to a loss of funds. The attack, explained in a paper called “Flood & Loot: A Systemic Attack on the Lightning Network,” games the slow confirmation times on Bitcoin’s network, Lightning’s “hash time-locked contracts” and the difference in settlement times. 

Benz on the Blockchain?
Ocean Protocol has completed a proof-of-concept with Mercedes-Benz maker Daimler, showing how blockchain can begin monetizing data streams within the company and across its supply chains. Announced Tuesday, the Singapore-based Ocean collaborated with Daimler AG to explore the decentralized sharing of internal sales and financial data among the multinational’s production hubs, and externally between some of its supply chain procurement partners. 

Mining Disclosures
Iran’s vice president issued a directive Monday that states crypto miners in the nation will have to disclose their identities, the size of their mining farms and their mining equipment type with the Ministry of Industry, Mines and Trade within a month.  

• Confused what yield farming is? CoinDesk has an explainer
• Viral TikTok video boosts the price of dogecoin by 20% (Decrypt)
• Social network Voice, built on the EOSIO blockchain, has launched (The Block)
• Alphabet subsidiary Loon launched a balloon-powered internet in Kenya (NYT)
• Crypto entrepreneur Brock Pierce is officially a presidential candidate after filing paperwork with the Federal Election Commission (FEC) on Monday.

Related: First Mover: As Bitcoiners Watch Dollar, Deutsche Bank Sees Trump Win Hurting Reserve Status

Unique Addresses
The seven-day moving average of the number of active ether addresses rose to 405,014 on Friday – a threshold not seen since May 2018, according to data provided by the blockchain analytics firm Glassnode. Active addresses are the number of unique addresses that are active in the network either as a sender or receiver. The increased ether activity could be associated with the explosive growth of Ethereum-based decentralized finance (DeFi) platforms, as well as the number of daily tether (USDT) transactions on the network. 

ADA Gains
Cardano’s ADA token has recorded a 170% return in the second quarter, propelling the crypto to its highest price level since June 2019. According to Daniel Ferraro, marketing director at blockchain intelligence firm IntoTheBlock, ADA’s impressive rally is the result of the excitement surrounding the “Shelley” upgrade, which would make Cardano 50 to 100 times more decentralized than other prominent blockchain networks, according to the company. Further, it will introduce an incentive scheme, or staking, designed to reach equilibrium around 1,000 stake pools.  

Exchange Losses 
Trading volumes on “top tier” crypto spot exchanges fell by 36% in June, according to a report from London-based data provider CryptoCompare, potentially related to bitcoin’s recent low volatility. Similarly, crypto derivatives exchanges experienced a 35.7% drop in volume to $393 billion – the lowest monthly volumes since the start of 2020.

The Pirate Bay Age of Money
Lex Sokolin, a CoinDesk columnist and Global Fintech co-head at ConsenSys, writes about a pyramid scheme called Forsage that is eating up 25% of Ethereum’s bandwidth. Currently the most popular decentralized app, Forsage is just one example of the type of software that can take advantage of a permissionless system and cheat people out of their funds. “[W]e are in the Pirate Bay age of money: There is nothing to shut down, many will argue,” Sokolin writes, but “white hat hackers should come together to protect their users against naked pyramid schemes. If we don’t, there may never be real money in the system. Or worse yet, there will be no real decentralized system at all.”

• Blockchain Bites: BlockFi’s Revenue, DEX Volume and a Wallet Bug
• Blockchain Bites: DeFi and DEXs Surge, Bitcoin’s Negligible Adjustment and an ICO Class Action

The Financial Action Task Force (FATF), whose advice is heeded by more than 200 countries, will meet in October to discuss ways to create a stronger global framework for the regulation of cryptocurrencies.

• In a report Tuesday to the G-20 finance ministers and central bank governors, the international financial watchdog said regulators need to cooperate to make measures such as the Travel Rule more effective.
• As such, the organization will work to develop an international framework for authorities to coordinate and share information about virtual asset service providers (VASPs).
• As defined by FATF, a VASP is an open-ended term for crypto exchanges and peer-to-peer services as well as wallet providers and custodians. It can also include any business that trades or transacts in digital assets.
• This would make the global regulation of cryptocurrencies and stablecoins, in particular, more effective, FATF said.
• The end goal would be the framework forming the base of a global network of supervisors for the crypto industry.
• While details are currently sparse, an FATF spokesperson confirmed the watchdog would convene this autumn to discuss how to improve international cooperation.
• FATF is also planning to make available a list of red flags indicating possible criminal activity to regulators at the same time.
• Siân Jones, a senior partner at XReg Consulting, told CoinDesk the framework would help regulators get up to the same speed worldwide.
• The report gives an overview of stablecoins, cryptocurrencies that attempt to offer price stability by being pegged to a reserve currency such as the U.S. dollar. FATF said it will be providing guidance for regulators at some future point.

Also read: Germany Seeks to Expand Digital Efforts at FATF as It Takes On Watchdog’s Presidency

UPDATE (July 7, 16:55): This article has been updated to include comment from Siân Jones.

• Crypto Exchanges See Big Drop in Volumes as Bitcoin Volatility Approaches 2020 Low
• FATF Under Germany: Expand Digital AML/CTF Efforts
• Iran Gives Crypto Miners One Month to Register With the State
• Kraken-Owned Crypto Facilities Wins UK License to Offer Derivatives Trading

Cryptocurrency exchange Binance has teamed with settlement provider Etana Custody to increase the options for users buying digital assets with fiat currencies.

• Announced Tuesday, Binance users can now fund their accounts with 15 national currencies through the fiat gateway that serves the Europe, Asia, North America and Oceania markets.
• The 15 funding options include the United Arab Emirates dirham (AED), Czech koruna (CZK), Danish krone (DKK), Hungarian forint (HUF), Mexican peso (MXN), Norwegian krone (NOK), Polish złoty (PLN), and Swedish krona (SEK).
• Other options like the euro (EUR), Australian dollar (AUD), Canadian dollar (CAD) and Swiss franc (CHF) are also included.
• Once set up with a funded Etana account, users will not need to leave Binance’s website in order to fund purchases of cryptocurrencies such as bitcoin (BTC) and ether (ETH).
• Etana provides Know Your Customer (KYC) and Anti Money Laundering (AML) standards that are compliant with the Bank Secrecy Act, per the announcement.
• Brandon Russell, Etana founder and CEO, explained that users would be able to trade digital assets on Binance while maintaining their fiat balance on Etana.
• Also providing services for crypto exchange Kraken, Etana Custody is a third-party custodian and settlement provider of both fiat and digital assets for brokers, traders and exchanges.
• The addition brings the number of countries and regions in which Binance customers can fund accounts with fiat to 170, according to the firm.

See also: Binance Acquires Crypto Debit Card Provider Swipe for Undisclosed Sum

• Binance Acquires Crypto Debit Card Provider Swipe for Undisclosed Sum
• Binance Gives 27,000 COVID-19 Masks to UK National Health Service
• Binance Ordered to Halt Offering Derivatives Trading in Brazil
• Travala.com Lets Travelers Once Again Book Expedia Hotels in Crypto

Cryptocurrency intelligence firm Chainalysis said Tuesday it has raised $13 million in additional Series B financing from Ribbit Capital and Sound Ventures, bringing its total for the round to $49 million.

• As part of the deal, the New York City-based company, which builds software that traces crypto transactions, is adding Ribbit Capital general partner Sigal Mandelker as an adviser. Mandelker is a former high-ranking Treasury Department official.
• Chainalysis said the new investments will help it “grow and deepen its government relationships.” America’s federal agency alphabet soup frequently inks seven-figure software licensure deals with Chainalysis: The Internal Revenue Service and the Securities and Exchange Commission in the U.S. have together shelled out nearly $2 million in the past two months alone. 
• There are signs that Chainalysis’ tracing tools are growing in use beyond the U.S. government. Reactor, its flagship investigative product, increased its revenue from new foreign government customers by 400% since 2019, according to the company.
• Chainalysis has found more success plugging into the massively lucrative public sector money funnel than any other tracing firm. But the crypto analytics competition is growing: Coinbase closed its first U.S. government deal (with the Secret Service) in May.

See also: Crypto Forensics Firm Chainalysis Adds Tracing Support for Zcash, Dash

• Elliptic Follows Chainalysis in Adding Zcash to Monitoring Platform
• Fireblocks Adds Crypto-Tracing Tool to Guard Against Money Laundering
• Tezos and Algorand Latest to Integrate Tech for Anti-Money Laundering Compliance
• Crypto Forensics Firm Chainalysis Adds Tracing Support for Zcash, Dash

A new decentralized finance (DeFi) “money Lego” will allow app developers to make it possible for users to automate their transactions. Called Gelato, the protocol moved from alpha to a live and audited v1 on Ethereum’s mainnet on July 3.

And, according to a blog post shared early with CoinDesk, decentralized exchange (DEX) Gnosis will be the first major platform to integrate Gelato, allowing users to swap and withdraw tokens in a “seamless Uniswap-like UX.”

“It’s a network that transacts on behalf of users or even dapps themselves, based on some conditions, like price or the collateralization ratio of a debt position,” Gelato co-founder Hilmar X. Orth told CoinDesk. 

Related: Ethereum Activity Metric Hits Highest Level in 2 Years

In short, the project gives developers simple infrastructural pieces to plug DeFi into decentralized applications (dapps). 

Gnosis did not return requests for comment by press time.

Blockchains do not easily lend to trading without a little tech wizardry. They are slow and expensive to keep up, and users must bid against one another to record a transaction on the ledger.

Regardless of the difficulties, DeFi projects have attempted to build a new financial system on top of blockchains because of their other valuable features, namely their permissionless nature. The Ethereum blockchain has been a common choice for DeFi – quickly approaching $2 billion currently “staked,” or pledged, as collateral – for numerous reasons, mostly boiling down to Ethereum’s rich programming language which makes building projects easier.

Related: What Is Yield Farming? The Rocket Fuel of DeFi, Explained

See also: What Is Yield Farming? The Rocket Fuel of DeFi, Explained

Money Lego are tech stacks that allow different applications to fit (or be shoved) into other projects. For example, you can deposit ether (ETH) into MakerDAO, receive the stablecoin dai (DAI) and then lend it on Compound to a trader in order to earn the network’s governance token COMP.

That being said, the infrastructure for connecting these crypto-financial Lego is still being cast. Gelato is just one such project bringing composability to DeFi and dapps, Orth said.

“For example, we have a developer building Gelato into his smart contracts, which will withdraw funds from the wallet of his users to his smart contract every month, as an insurance premium payment. If the user then runs out of cash, the insurance will automatically be cancelled and the claims of the user [will] be burned,” Orth said.

Gelato has integrated with data provider Chainlink to supply gas rates on the Ethereum network as well, according to a July 3 blog. The pairing allows users to select gas prices based on current network congestion in order to lower settlement costs.

See also: Money Reimagined: Bitcoin and Ethereum Are a DeFi Double Act

Orth said the project’s code base will hopefully transfer by “the end of the year” to a decentralized autonomous organization (DAO) for maintenance consisting of dapps using Gelato. Gelato will self-finance through network fees collected by the DAO, he said.

“It’s just really a new way of building dapps that schedule asynchronous transactions right from their smart contracts,” Orth added.

• Visa Seeks Ethereum Developer for New ‘Distributed Application’
• Compound’s ‘Yield Farmers’ Briefly Turned BAT Into DeFi’s Largest Coin