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CoinDesk Crypto

Oman Central Bank Warns on Crypto ‘Risk,’ Singles Out Dagcoin

CoinDesk Crypto
6 years ago

The Central Bank of Oman (CBO) has warned citizens and residents of the “high risks” of using cryptocurrencies in a statement issued through the Oman News Agency.

  • The CBO said crypto assets are “are fraught with high risks due to the fluctuation of their value significantly and the risks of being used for electronic piracy and fraud.”
  • The warning, reported by the Times of Oman Tuesday, specifically highlighted the risks of investing in Dagcoin, a cryptocurrency that the BBC recently said in a podcast has seen an influx of promoters from accused Ponzi scheme OneCoin.
  • Jordan’s central bank issued a similar warning mentioning Dagcoin last year.
  • The Oman central bank further clarified that it has not issued any licenses for the trading of cryptocurrencies and that cryptocurrencies are not guaranteed in the Gulf state as money.
  • “Anyone who deals in these cryptocurrencies, … does so on his own responsibility,” reads the statement.

Also read: OneCoin Investors Allege BNY Mellon Aided $4B Fraud

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Guggenheim-Collected Artist to Release Digital Artwork on Blockchain Marketplace

CoinDesk Crypto
6 years ago

A prominent Taiwanese-American multimedia artist considered a pioneer of internet-based art is releasing her first work on a blockchain-based platform.

  • Shu Lea Cheang is a renowned artist whose works have been exhibited at the Walker Art Center in Minneapolis, the Guggenheim Museum in New York City and the Palais de Tokyo in Paris.
  • The artist, whose works are also collected by the Museum of Modern Art, Whitney Museum and the Guggenheim, among others, explores social issues such as race relations and gender roles in her art.
  • Cheang will premier her new media artwork on MakersPlace, an Ethereum blockchain-powered market for rare and collectible digital art, later this week.
  • Having an artist such as Cheang joining the crypto art space, “speaks volumes” to the growth and maturity of rare digital art, Makersplace CEO and co-founder Dannie Chu told CoinDesk.
  • For her new work to feature on the platform, Cheang has created a sci-fi video series called BioNet, consisting of two artworks “BioNet Baby” and “BioNet Blood Cell,” examining the potential impact of technology and science as it relates to human society.
  • The media artwork will be made available on Oct. 8 beginning at 20:00 UTC and will be digitally stamped with an indelible signature from Cheang authenticated and secured through MakersPlace platform.

See also: ‘Wonder Woman’ Illustrator Jose Delbo to Release Comic Book on the Blockchain

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Binance Alliance With Japanese Crypto Platform Abandoned

CoinDesk Crypto
6 years ago

Global virtual asset exchange Binance and Japanese crypto trading platform TaoTao did not reach an agreement on a strategic alliance to launch a joint venture in Japan. 

  • TaoTao announced Monday that negotiations between the two parties to create a crypto trading platform dedicated to Japanese users have ended without agreement and the alliance was abandoned, CoinDesk Japan reported.
  • Binance entered into discussions with Japan’s Z Corporation (a subsidiary of Z Holdings, which owns Yahoo Japan) and its affiliate local crypto trading platform TaoTao in January 2020 with the goal of incorporating Binance’s trading technology and operational know-how to expand its domestic business. 
  • It is unclear why the attempted partnership fell through.
  • In 2018, Japan’s financial watchdog FSA warned Binance against operating without a license, and earlier this year, the firm announced it will phase out services to customers residing in Japan. 
  • Last month, Japanese crypto exchange Fisco (previously Zaif) which suffered a $60 million hack in 2018, filed suit against Binance alleging it knowingly allowed stolen funds to be laundered through its exchange.

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BitMEX Ether Futures Trading Contracts Fall by Half in Wake of US Charges

CoinDesk Crypto
6 years ago

Investor interest in ether futures traded on BitMEX has declined sharply since the Seychelles-based cryptocurrency exchange was charged Thursday with illegally operating an unregistered derivatives-trading platform that accepted U.S. customers.

  • At press time, ether futures contracts worth $63 million (179,000 ETH) are open or active on BitMEX, the lowest since May 15, according to data source Skew.
  • Open interest is down nearly 50% from the $125 million observed on Oct. 1.
  • Last week, the U.S. Commodity Futures Trading Commission (CFTC) filed civil charges against BitMEX, and the Department of Justice brought criminal charges against BitMEX’s owners for facilitating money laundering and other illegal transactions.
  • Open interest in ether futures on BitMEX was declining even before last week’s charges, in line with a downdraft witnessed across the industry. It had peaked at $214 million on Sept. 1.
  • September’s 17% decline in ether’s price likely dented short-term optimism, causing a slide in the open interest across all exchanges.
  • Notably, since Thursday, open positions in BitMEX bitcoin futures have also declined by over 20% from $592 million to $456 million. 

Also read: Open Interest in CME Bitcoin Futures Slides as Market Sapped by Surging DeFi

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CoinDesk

BitMEX Ether Futures Trading Contracts Fall by Half in Wake of U.S. Charges

CoinDesk Crypto
6 years ago

Investor interest in ether futures traded on BitMEX has declined sharply since the Seychelles-based cryptocurrency exchange was charged Thursday with illegally operating an unregistered derivatives-trading platform that accepted U.S. customers.

  • At press time, ether futures contracts worth $63 million (179,000 ETH) are open or active on BitMEX, the lowest since May 15, according to data source Skew.
  • Open interest is down nearly 50% from the $125 million observed on Oct. 1.
  • Last week, the U.S. Commodity Futures Trading Commission (CFTC) filed civil charges against BitMEX, and the Department of Justice brought criminal charges against BitMEX’s owners for facilitating money laundering and other illegal transactions.
  • Open interest in ether futures on BitMEX was declining even before last week’s charges, in line with a downdraft witnessed across the industry. It had peaked at $214 million on Sept. 1.
  • September’s 17% decline in ether’s price likely dented short-term optimism, causing a slide in the open interest across all exchanges.
  • Notably, since Thursday, open positions in BitMEX bitcoin futures have also declined by over 20% from $592 million to $456 million. 

Also read: Open Interest in CME Bitcoin Futures Slides as Market Sapped by Surging DeFi

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CoinDesk

Blockchain Bites: Ethereum’s Economy, Estonia’s CBDC Research, Coinbase’s Severances

CoinDesk Crypto
6 years ago

CoinDesk is preparing for invest: ethereum economy 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 them.

The Top Shelf news you subscribed to is down below. 

Now a few words from CoinDesk’s Managing Director of Events Aaron Stanley:

Making consensus

Related: First Mover: Day in the Life of a Yield Farmer Means Part-Time Gig, Full-Time Risk

The meaning of development
The exploding popularity of decentralized finance, be it “Weird DeFi” or otherwise, has brought a surge of new interest to Ethereum-based applications while highlighting the scalability issues with the platform’s current infrastructure. 

Network congestion, a result of increased usage and more complex smart contracts being run on the platform, has helped to create an intense FOMO within the ecosystem while simultaneously erecting an enormous barrier to entry in the form of gas fees for non-power users and whales. 

This isn’t exactly a new problem for Ethereum. This same scalability argument has reared its head plenty of times before (see December 2017 and CryptoKitties), prompting a plethora of “Eth Killer” chains to sprout up in 2018-19 with the goal of beating Ethereum at its own game. 

Those chains haven’t been much of a threat to Ethereum’s volume, but this time the heat is on. Competing smart contract platforms like Polkadot, Cosmos, Solana and Near are queued up to welcome traders and application builders who have grown tired of waiting for an Ethereum scaling solution to emerge. 

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

Amid the craze of vegetable tokens, meme coins, skyrocketing gas fees and all the other crazy DeFi stuff we witnessed in recent months emerged encouraging news about Ethereum 2.0 – the impending transition to proof-of-stake and implementation of sharding. It’s in the final stages of testing and is poised to launch its Phase 0 sometime this fall. 

This migration holds significant impacts for the Ethereum-native DeFi economy and the “Money Legos” that have powered it. A fully scaled blockchain could pave the way for that elusive mass adoption that crypto people talk about so much. 

But then again, Ethereans have been waiting since 2015 for this transition to take place, and to many it’s simply a fantasy. The full roadmap for Eth 2.0 implementation is years long, and skeptics will find plenty of reasons to cast doubt on the likelihood of its completion. 

So what do traders, investors and DeFiers need to know about this transition and how it will affect their bags? This Eth 2.0 migration and its second and third-order implications are the focus of CoinDesk’s upcoming virtual event invest: ethereum economy on Oct. 14, where we’ll be tackling all of these questions surrounding what could well be the most important news development in crypto this year. 

– Aaron Stanley 

At stake

Seeing success
Camila Russo is the founder of The Defiant and author of “The Infinite Machine,” the first book on the history of Ethereum. Here she examines how Ethereum went from concept to a functioning system and economy over the past half decade. 

This excerpted post was originally published in July.

Almost five years ago, on July 30, 2015, part of the Ethereum team had gathered in Berlin to see the network they helped build go live. A big screen overhanging their worktables served as the countdown clock for when the test network reached block 1,028,201. That’s the palindrome and prime number they picked as the key which would launch the mainnet. Others were waiting for the launch in Ethereum hubs in Amsterdam, Toronto, New York and Zug, Switzerland. 

It was the culmination of months of work, where core developers did the heavy lifting on the technical side, but which also included designers, marketers, and community managers. Ethereans knew a distributed network with no community would fail. 

Early Ethereum team members had also spent endless hours with lawyers leading up to the ether sale, some co-founders had gone through bitter fights, while many others had ravaged their savings working with no salaries towards one goal: Making the vision Vitalik Buterin laid out on a white paper in November 2013 a reality.  

It’s happening

When the test network hit the predetermined block at 4:26 p.m. in Berlin, a meme of Ron Paul, jubilant, with his arms up and surrounded in green laser beams and white block letters that read IT’S HAPPENING, popped up on the monitor. The Ethereum team opened a bottle of champagne while rocket emojis filled chat rooms.

The Ethereum network quickly left other blockchain upstarts behind and has since grown to become the second-largest cryptocurrency after bitcoin, with ether’s market capitalization (as of writing) at just shy of $40 billion. 

Minecraft of crypto-finance

But a better measure of success is to examine whether Ethereum builders achieved what they set out to do. Ethereum aims to be a “fully-fledged, Turing-complete (but heavily fee-regulated) cryptographic ledger,” which allows developers to build any application they can dream of on top, Vitalik wrote in the white paper, which inspired early team members to drop everything and join him in building it. 

“Rather than being limited to a specific set of transaction types, users will be able to use Ethereum as a sort of ‘Minecraft of crypto-finance’ – that is to say, one will be able to implement any feature that one desires simply by coding it in the protocol’s internal scripting language,” he wrote. Minecraft is a sandbox-style video game, which gives players flexibility to explore and build whatever they want in the game’s virtual world. 

Vitalik, who was 19 years old at the time, listed on the Ethereum white paper the applications he envisioned could be built on top of this generalized platform: 

Sub-currencies “representing assets such as USD or gold to company stocks and even currencies with only one unit issued to represent collectibles or smart property.”

Financial derivatives, such as “hedging contracts.” He notes that “financial contracts of any form do need to be fully collateralized; the Ethereum network controls no enforcement agency and cannot collect debt.”

Identity and reputation systems where “users can register their names in a public database alongside other data,” for example, for domain-name systems.

Decentralized Autonomous Organizations, which replicate traditional companies but use blockchain technology for enforcement. The entity would have shareholders who collect dividends and decide how the corporation automatically allocates its funds, “using either bounties, salaries or even more exotic mechanisms such as an internal currency to reward work.” 

Also listed were crop and generic insurance, decentralized data feeds, gambling and prediction markets, a full-scale on-chain stock market and an on-chain decentralized marketplace.

Five years later, all of the use cases envisioned by Vitalik have become a reality, though some with more success than others.

A good problem to have

The question isn’t whether there’s demand for Ethereum, but whether the network will continue developing fast enough to meet that demand. The wait for ETH 2.0, which would allow Ethereum to scale, has been a constant in Ethereum’s history. A barebones proof-of-stake chain, which was slated to launch early this year, has been delayed and now it’s unclear whether it will launch this year at all. 

The next five years will be about strengthening these scaling solutions and making these financial applications more robust and secure. It will also be necessary to create better crypto onramps and building apps in the less developed areas of Ethereum, like identity and insurance. The result will be this Minecraft of finance stops being an insiders’ secret and more players can join.

– Cami Russo

Ethereum 101

So what is Ethereum and how does it work? CoinDesk contributor Alyssa Hertig explains what “the world computer” is looking to achieve.

The ‘World Computer’
Before you can understand Ethereum, it helps to first understand the internet.

Today, our personal data, passwords and financial information are all largely stored on other people’s computers – in clouds and servers owned by companies like Amazon, Facebook or Google. Even this CoinDesk article is stored on a server controlled by a company that charges to hold this data should it be called upon.

With this convenience, there is also vulnerability. As we’ve learned, a hacker or a government can gain unwelcome access to your files without your knowledge, by influencing or attacking a third-party service – meaning they can steal, leak or change important information.

While Bitcoin aims to disrupt PayPal and online banking, Ethereum has the goal of using a blockchain to replace internet third parties – those that store data, transfer mortgages and keep track of complex financial instruments.

In short, Ethereum wants to be a ‘World Computer’ that would decentralize – and some would argue, democratize – the existing client-server model.

With Ethereum, servers and clouds are replaced by thousands of so-called “nodes” run by volunteers from across the globe (thus forming a “world computer”).

The vision is Ethereum would enable this same functionality to people anywhere around the world, enabling them to compete to offer services on top of this infrastructure.

– Alyssa Hertig

Top shelf

Employees walk
Coinbase employees are beginning to take severance packages, CoinDesk’s Nathan DiCamillo reports. Days after the corporate exchange giant offered non-aligned employees an exit from the exchange’s “apolitical” mission, at least three employees have decided to walk. Coinbase has been the center of a media storm since its CEO Brian Armstrong published a blog post discouraging politics in the office. At least one of the employees said Armstrong could have avoided controversy if he had communicated the company’s new direction only internally. 

Crypto for Congress
The Chamber of Digital Commerce’s Political Action Committee (PAC) is contributing $50 worth of bitcoin to each congressional campaign. According to the group’s founder, Perianne Boring, this is an attempt to raise awareness and give incumbents a chance to interact with blockchain technology and digital assets. In addition to the contribution, the Chamber’s PAC will also provide online training and a toolkit to help members of Congress engage with cryptocurrencies. According to the group, once informed about the contribution, the campaign can either accept it, pass it on to a charity that accepts bitcoin (BTC) or just opt out. 

CBDC test
Eesti Pank, the central bank of Estonia, is undertaking a “multi-year” research project that will investigate the suitability of a blockchain-based digital currency to work alongside cash. The hypothetical CBDC will run on KSI Blockchain, already “a core” part of the infrastructure of Estonia’s e-government system. Guardtime, a corporate developer of KSI, and The SW7 Group, a business development and investment firm will assist the study. Estonia’s experience running a digital form of government “gives us good grounds for launching a project to explore the technological frontiers of digital money,” said Rainer Olt, head of the central bank’s Payment and Settlement Systems Department.

Hackers found?
KuCoin CEO Johnny Lyu tweeted Saturday the South Korean crypto exchange has found what he described as the “suspects” of last month’s $281 million hack. “After a thorough investigation, we have found the suspects of the 9.26 #KuCoin Security Incident with substantial proof at hand,” Lyu said in the tweet. “Law enforcement officials and police are officially involved to take action.” In addition, Lyu said another $64 million of stolen assets have been recovered from “suspicious addresses,” bringing the total value of recovered assets to $204 million since Oct. 1.

Tokenized ETF
Securities and Exchange Commission (SEC) Chairman Jay Clayton said the regulatory body is open to the idea of a tokenized exchange-traded fund (ETF). “We’re willing to try that. Our door is wide open,” the report quoted Clayton as saying in a webinar yesterday with the Chamber of Digital Commerce. While Clayton’s statements expressed a willingness to explore the idea of tokenized stocks, the report also noted recent actions by the regulatory body that would seem to indicate the day those ideas becoming reality is still a ways off.

Quick bites Who won #CryptoTwitter? Related Stories
CoinDesk

Europol Names Privacy Wallets, Coins, Open Marketplaces as ‘Top Threats’ in Internet Crime Report

CoinDesk Crypto
6 years ago

Popular privacy-enhancing cryptocurrency wallets and other technologies were named as “top threats” in Europol’s 2020 Internet Organized Crime Threat Assessment published Monday and reviewed by CoinDesk.

  • According a report by the European Union’s law enforcement agency, “privacy-enhanced wallet services using coinjoin concepts (for example Wasabi and Samurai wallets) have emerged as a top threat in addition to well established centralised mixers.”
  • These statements echo comments made in June by the agency, as CoinDesk reported.
  • Actors labeled as threats in the report have also been “increasingly using hardware wallets” to securely store funds and private keys.
  • Europol’s report also included decentralized marketplace protocols as a “high priority threat”, specifically naming OpenBazaar, developed by cryptocurrency software company OB1, noting “thousands of downloads on Android” for the company’s mobile platform Haven.
  • “Criminals have started to use other privacy-focused, decentralised marketplace platforms, such as OpenBazaar and Particl.io to sell their illegal goods,” the report says.
  • OB1 CEO Brian Hoffman told CoinDesk that his company “only bundle[s] the OB1 search engine” for OpenBazaar, and markets on their Haven product are actively filtered to remove listings that don’t comply with law enforcement and app store requirements.
  • The OpenBazaar protocol itself, however, “can be used by anyone, and there is no middleman to remove listings before being published,” he added.
  • In terms of payment options, bitcoin remains the Darkweb’s most popular method, the report says, “mainly due to its wide adoption, reputation, and ease of use.” But “monero is gradually becoming the most established privacy coin for Darkweb transactions, followed by zcash and dash.”
  • “These privacy coins may present a considerable obstacle to law enforcement investigations,” according to Europol’s report.
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Market Wrap: Bitcoin Gains Steadily to $10.7K; Ethereum Fees at 2-Month Low

CoinDesk Crypto
6 years ago

Bitcoin’s price is steadily increasing after last week’s bad news dump; while Ethereum’s fees fall.

  • Bitcoin (BTC) trading around $10,734 as of 20:15 UTC (4:15 p.m. ET). Gaining 0.51% over the previous 24 hours.
  • Bitcoin’s 24-hour range: $10,621-$10,775
  • BTC above its 10-day and 50-day moving averages, a bullish signal for market technicians.

Bitcoin’s price has been on a steady rise since Saturday, topping out at $10,775 Monday on spot exchanges such as Coinbase. Cindy Leow, portfolio manager for 256 Capital Partners, a multi-strategy trading firm, notes bitcoin’s capacity to rebound from recent unpleasant news. “Bitcoin has quickly recovered from back-to-back news about the [Commodity Futures Trading Commission] and the Department of Justice’s indictment against BitMEX as well as news of [Pres. Donald] Trump contracting COVID, speaking to its short-term resilience.” 

Read More: Bitcoin Volatility Hits 23-Month Low and Shrugs Off BitMEX, Trump’s Illness

Related: Europol Names Privacy Wallets, Coins, Open Marketplaces as ‘Top Threats’ in Internet Crime Report

Despite bitcoin’s bounceback, Constantin Kogan, partner at crypto fund-of-funds BitBull Capital, is concerned as the derivatives market indicates many traders are still sitting out. “Bitcoin has been stuck in a $10,000-$11,000 channel for the last month,” he said. “Lending yields have fallen across the board as investors await the return of volatility and measure the potential impacts of BitMEX’s stunning downfall.” 

A sign of distress can be seen by comparing bitcoin’s funding rates with those of competitors. Funding rates are fees paid by one side of a futures contract to the other. When they’re positive, it usually reflects bullish sentiment, while negative rates are bearish.

But BitMEX’s negative funding rate might be a sign that investors are leaving the venue, according to Vishal Shah, an options trader and founder of derivatives exchange Alpha5.

BitMEX’s funding rate is currently around  -0.0124%, while funding rates for major competitors have been at or close to zero for the past three days.  

Related: First Mover: Day in the Life of a Yield Farmer Means Part-Time Gig, Full-Time Risk

“It’s a function of unwinds,” Shah said. “Long positions are coming unwound to an extent, open interest has fallen materially, as expected.”

“This makes BitMEX a relatively cheaper venue for BTC-denominated players to gain topside leverage,” Shah said. “But that discount isn’t material; you’d have to justify the risk for a 5-10% annualized gain given the regulatory overhang.” 

While many investors are justifiably losing interest in BitMEX due to its looming legal issues, bitcoin’s dominance, its market share in relation to the total crypto capitalization, has been bouncing back from 2020 lows in September.

Dominance starting to trend upwards could affect price, especially if there is sell pressure on both bitcoin and altcoins, said 256 Capital’s Leow. “While this may seem bullish for BTC, it is also a cautionary signal: When low-cap alts dump while BTC stays flat, BTC tends to follow suit in the short-term.”

Daily Ethereum fees drop

The second-largest cryptocurrency by market capitalization, ether (ETH), was down Monday trading around $351 and slipping 0.37% in 24 hours as of 20:15 UTC (4:15 p.m. ET). 

Read More: CME Bitcoin Futures Open Interest Slides as Market Sapped by Surging DeFi

Fees on Ethereum totalled 5,560 ETH Saturday, the lowest amount spent on the network since August 8. Used to conduct transactions and interact with smart contracts that constitute decentralized finance or DeFi, Ethereum fees have been hitting all-time highs as of late. On Sept. 17, for example, a record 42,763 ETH in fees were paid to miners.

Jean-Marc Bonnefous, managing partner of Tellurian Capital, an investment firm, doesn’t expect Ethereum fees, also known as gas, to stay low. “I suspect this is a temporary lull only as the structural issue of the gas costs has not gone away,” he said. Traders could take advantage of the respite in fees to rebalance, Bonnefous noted. “It may be a good time to readjust portfolios at a cheaper cost.”

Other markets

Digital assets on the CoinDesk 20 are mostly green Monday. Notable winners as of 20:15 UTC (4:15 p.m. ET):

Notable losers as of 20:15 UTC (4:15 p.m. ET):

Read More: KuCoin CEO Says Suspects in $281M Hack Identified

Equities:

Commodities:

  • Oil is up 6.3%. Price per barrel of West Texas Intermediate crude: $39.35.
  • Gold was in the green 0.78% and at $1,913 as of press time.

Treasurys:

  • U.S. Treasury bond yields climbed Monday. Yields, which move in the opposite direction as price, were up most on the two-year, jumping to 0.149 and in the green 11.8%.
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CoinDesk

John McAfee Arrested in Spain on US Criminal Charges

CoinDesk Crypto
6 years ago

John McAfee, the 74-year-old software magnate-turned-crypto-bull, has been arrested in Spain on allegations of tax evasion, according to the Department of Justice. His extradition to the U.S. is pending.

  • On Monday DOJ prosecutors unsealed a criminal indictment against McAfee, who faces charges of tax evasion and willful failure to file tax returns that could land him behind bars for over five years if convicted.
  • The announcement comes the same day that U.S. Securities and Exchange Commission (SEC) sued McAfee for allegedly pumping initial coin offerings (ICOs) without disclosing he was being paid to do so.
  • McAfee allegedly received BTC and ETH worth more than $11.6 million for promoting seven ICOs in 2017 and 2018.
  • He also allegedly received $11.5 million in the promoted tokens. The SEC does not name the projects in the suit.
  • The SEC outlined the securities violations in a 55-page complaint filed Monday in the U.S. District Court for the Southern District of New York.
  • According to the SEC, McAfee raised a total of $23.2 million from projects which raised a cumulative $41 million.
  • “McAfee’s extravagant posts (such as tweeting predictions about BTC price increases and promising to ‘eat my d**k on national television’ if such predictions did not pan out) … generated an enormous amount of publicity,” the SEC said in its complaint.
  • The SEC is seeking civil penalties and an order prohibiting McAfee from serving as a public officer again in future.
  • The SEC also sued McAfee’s personal security guard, Jimmy Gale Watson, in the complaint.
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CoinDesk

Record $616M of Wrapped Bitcoin Minted in September

CoinDesk Crypto
6 years ago

Wrapped Bitcoin minted a record $616 million worth of tokenized bitcoins in September, according to transaction data analyzed by CoinDesk, a more than 160% increase over the $232 million minted in August.

  • Record minting comes as strong over-the-counter demand for wrapped bitcoin continues, according to Chicago-based firm Grapefruit Trading, one of the first OTC desks to mint WBTC through BitGo.
  • Getty Hill, trader at Grapefruit, told CoinDesk their clients’ interest in converting BTC to WBTC reflects market participants capitalizing on the growing number of opportunities for using pseudo-BTC in the growing decentralized finance (DeFi) ecosystem.
  • At FTX, CEO Sam Bankman-Fried told CoinDesk OTC demand for WBTC is also significant, even if it’s not at the same level as during the height of the DeFi craze over the past few months.
  • Even if it cools off a bit in the coming months, he expects client demand for tokenized bitcoin to “sustain itself at a way higher level than before.”
  • Alameda Research has been the leading wrapped bitcoin merchant for the past two months due to over-the-counter demand at its sister company, FTX. In August, Alameda minted $160 million worth of WBTC followed by $306 million minted in September.
  • September’s growth also benefited from the activity of some large merchants who minted no WBTC the month before.
  • Beyond WBTC, the supply of all forms of tokenized bitcoins grew 120% in September, according to data from Dune Analytics, to over 121,000 BTC, up from nearly 55,000 BTC in August, as growth among smaller BTC tokenization projects continues.
  • Clients have inquired about renBTC, tBTC, and others, Hill told CoinDesk. But volume has been “100% in WBTC.”
  • Some OTC desks like FTX offer alternate tokenized bitcoin products, like renBTC, in addition to wrapped bitcoin. But wrapped bitcoin represents over 73% of the tokenized bitcoin market, and, not surprisingly, the “vast majority” of OTC clients want wrapped bitcoin, Bankman-Fried told CoinDesk.
  • The value of all BTC tokenized through Wrapped Bitcoin passed $1 billion at last check, according to OnChainFX.
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CoinDesk

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

CoinDesk Crypto
6 years ago

Three of the largest asset managers are diversifying their funds to hold blockchain stocks, throwing more establishment financial might behind bitcoin’s technology.

Charles Schwab has begun purchasing shares of Riot Blockchain, joining Fidelity and Vanguard – already investors in Riot, HIVE Blockchain Technologies, Hut 8 and BC Group – in allocating mutual fund holdings to a cryptocurrency company, according to financial filings with the U.S. Securities and Exchange Commission.

The stock purchases also double down on the mutual fund managers’ equity investments and experiments in the space. Schwab this summer invested in Alchemy, an ethereum application platform, while Vanguard has been piloting Symbiont’s blockchain for foreign exchange transactions, and Fidelity has a digital assets arm – set to launch a trading service and a bitcoin index fund – and has backed Coin Metrics, Fireblocks and Everledger.

Related: DeFi Has a Front-Running Problem. Sparkpool’s Potential Fix Is Launching This Month

Filings for the first half of this year show that Charles Schwab Investment Management, Inc. purchased 22,977 Riot shares for $52,000. Two Vanguard funds – the Vanguard Index Fund and Vanguard Valley Forge Index Fund – were invested in 954,229 Riot shares worth $2,118,000, and two Fidelity funds were separately invested in 176,242 Riot shares worth $230,115 (split between a NASDAQ index and three market indices) and 2,769,759 HIVE shares worth $1,003,163.

Riot Blockchain, based in the U.S., and HIVE Blockchain Technologies, based in Canada, provide services for mining bitcoin, a process where new cryptocurrency is minted.

Outside the U.S., a third Fidelity fund – Fidelity International – first acquired this year 10,451,094 shares valued at $1.80 each of Hut 8, a Canadian bitcoin mining company, and 17 million shares priced at HK$6.50 (US$8.30) of BC Group, a Hong Kong-based digital asset platform, earlier filings indicate.

The Riot shares in the two Vanguard funds and a third Vanguard fund – the Vanguard Institutional Index Fund – are back up from the last three years, which ended with them holding a combined 269,610 shares for $7,912,000 in 2017, 187,049 shares for $282,000 in 2018 and 826,391 shares for $925,000 in 2019.

Related: Record $166M Ethereum Fees Last Month Were 6 Times Bigger Than Bitcoin’s

Holdings also ticked up again for the Fidelity fund invested in Riot – the Fidelity Concord Street Trust – which bought 188,277 shares for $1,185,607 ending in 2018 and 159,263 shares for $270,375 ending in 2019. They dipped for the Fidelity Securities Fund invested in HIVE, with 5,792,880 shares for $82,433,000 ending in 2017, 4,972,700 shares for $821,000 ending in 2018 and 2,784,259 shares for $367,980 ending in 2019.

Vanguard’s Institutional Index Fund and The Blackstone Group’s Alternative Investment Fund were also holding Riot Blockchain stock last year, but stopped including it in their portfolios.

Also read: Fidelity’s Chief Strategist Starts Bitcoin Index Fund

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CoinDesk

US Senator Toomey Highlights Digital Currency Regs as He Eyes Banking Panel Chairmanship

CoinDesk Crypto
6 years ago

Senate Banking Committee member Pat Toomey (R-Pa.) said Monday that he intends to take up digital currency regulation and payments system reform if he becomes the committee’s next chairman.

  • “There’s very exciting things happening in technology, fintech, payment systems, the possibility of  a digital currency – all of these things are really important and exciting changes and they’re going to require some new legislation, some new regulation,” Toomey said.
  • Toomey is the likely pick for the Banking committee chairmanship if Republicans maintain control of the chamber this November. 
  • A former Wall Street banker and longtime proponent of deregulation, Toomey has praised blockchain in the past. He once said the government shouldn’t “strangle this baby in its crib.”
  • The two-term senator also disclosed Monday he will not seek reelection in highly competitive Pennsylvania in 2022. 
CoinDesk

First Mover: Day in the Life of a Yield Farmer Means Part-Time Gig, Full-Time Risk

CoinDesk Crypto
6 years ago

One is a Grammy Award-winning musician with lots of spare time. Another is a software engineer with nowhere to go during the pandemic. There’s also an editor for a data site and a fund manager who invests in digital assets. 

What these people have in common is an obscure side gig known as “yield farming,” a type of cryptocurrency trading and investing that didn’t really even exist until 2020. Yield farming is producing fixed income-like returns that can, at least for brief stretches, provide annualized interest rates equivalent to percentages investors cannot find anywhere else. 

As documented in First Mover over the past few months, the yield farming boom, itself a subsector within the fast-evolving realm of decentralized finance, or DeFi, started in June when the projects Compound and Aave launched. They were soon followed by Kyber, Balancer and Yearn.Finance. More creative names like Spaghetti, Tendies and SushiSwap followed. 

Related: Open Interest in CME Bitcoin Futures Slides as Market Sapped by Surging DeFi

CoinDesk’s Daniel Cawrey spoke to four yield farmers to get their stories. Here’s a link to his highly recommended piece, along with a video interview he conducted with André Allen Anjos, also known as RAC, who finds time for yield farming in his spare time, when he’s not producing and recording music. 

Read More: Meet the Yield Farmers Plowing Cryptocurrency’s Riskiest Trend

Bitcoin Watch

Bitcoin’s low volatility consolidation continues as the dust settles on the BitMEX controversy. 

On Thursday, the U.S. authorities charged the crypto derivatives exchange for facilitating illegal transactions. 

Related: Meet the Yield Farmers Plowing Cryptocurrency’s Riskiest Trend

Initially, bitcoin fell from $10,900 to $10,450 but recovered to $10,500 on the following day. The cryptocurrency held ground even though the regulator probe triggered massive outflow of bitcoins from BitMEX and the drop in the futures open interest, a sign of panic among traders. 

However, while the cryptocurrency has jumped to $10,700 over the weekend, it remains trapped in a contracting triangle, as seen on the daily chart. 

A breakout would confirm an end of the pullback from the August high of $12,476 and a reversal higher. That would expose resistance lined up at $11,183 (Sept. 19 high). 

Alternatively, a range breakdown may invite a stronger chart driven selling pressure. 

– Omkar Godbole

Read More: Open Interest in CME Bitcoin Futures Slides as Market Sapped by Surging DeFi

Token Watch

Bitcoin (BTC): 180-day volatility falls to lowest mark since November 2018 as market mostly unfazed by President Donald Trump’s positive coronavirus test and U.S. charges against BitMEX cryptocurrency exchange. 

Ripple (XRP): Job listing indicates XRP-affiliated blockchain sponsor is preparing to launch a next-generation trading platform. 

What’s Hot

Hybrid decentralized exchanges with on-chain custody and a centralized off-change trade-matching engine could prove next market evolution, IDEX CEO writes (CoinDesk Opinion)

SEC Chair Jay Clayton says U.S. regulator is open to the idea of a tokenized ETF (Decrypt)

Binance, Gemini and Kraken appear to be benefiting from bitcoin flows as traders defect from BitMEX following CFTC, DOJ charges (CoinDesk)

Coinbase employees reportedly take up CEO Armstrong’s offer for severance adopting policy on non-engagement with societal issues (CoinDesk)

Bitcoin use rises in Egype amid economic recession (Cointelegraph)

Analogs The latest on the economy and traditional finance

Pandemic could accelerate depletion of U.S. Social Security trust fund reserves (Brookings) 

Movie-theater chain Cineworld closing U.S. and U.K. locations, including Regal chan (FT)

U.S. Treasuries lose their edge as hedge against stock-market plunge (WSJ)

Negative-yielding bonds could profit from deflation, currency swings (WSJ)

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CoinDesk

OFAC Warns That Firms Helping Victims With Ransomware Payouts Risk Violating Its Rules

CoinDesk Crypto
6 years ago

The Office of Foreign Assets Control (OFAC) has warned that paying out to recover from ransomware attacks can be a breach of its rules.

  • In an advisory issued Friday, OFAC – a wing of the U.S. Department of the Treasury – said there’s a sanctions risk with complying with such demands, which have increased since the start of the coronavirus pandemic.
  • The Office specifically pointed to companies that facilitate negotiations with cyber attackers regarding ransomware payouts.
  • Firms including financial institutions, insurance firms and others working in digital forensics, “not only encourage future ransomware payments demands but also may risk violating OFAC regulations,” it said.
  • Ransomware is malicious software that propagates across computer networks and will lock up systems using encryption.
  • In order to receive a key to unlock their files and infrastructure, victims normally need to pay out a ransom in cryptocurrency.
  • OFAC cites data from the Federal Bureau of Investigation indicating ransomware demands rose by 37% in from 2018 to 2019, while the level of losses to such attacks rose 147% over the same period.
  • With OFAC responsible for issuing economic and trade sanctions against foreign nations or entities considered to infringe the U.S.’s foreign and security policies, it said that paying ransoms to those on its Specially Designated Nationals And Blocked Persons List could result in fines.
  • Civil penalties can be applied even if the payer did not know the recipient was on the list, the Office warned.
  • Such a situation may be mitigated if the entity facing a ransom demand submits a “timely and complete” report on the attack to law enforcement. Victims should also reach out to OFAC, according to the advisory.
  • The warning came the same day the U.S. Financial Crimes Enforcement Network (FinCEN) issued its own advisory on ransomware, stressing that governmental entities and financial, educational and health care institutions have been seeing more of these attacks.

Also read: Over $1M in Ryuk Ransomware Bitcoin Was ‘Cashed Out’ on Binance: Report

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CoinDesk

Open Interest in CME Bitcoin Futures Slides as Market Sapped by Surging DeFi

CoinDesk Crypto
6 years ago

Bitcoin futures listed on the Chicago Mercantile Exchange (CME) have lost their shine in recent weeks, and that’s due in part to explosive growth in decentralized finance (DeFi), an analyst says.

  • According to data source Skew, open interest or open positions in CME bitcoin futures fell to $345 million on Friday – the lowest level since May 4. The CME is considered synonymous with institutional activity.
  • Open interest is down nearly 64% from the record high of $948 million on Aug. 17. On the same day, bitcoin’s price clocked a 12-month high of $12,476.
  • Open position in bitcoin futures across all cryptocurrency exchanges stood at $3.6 billion on Friday, having peaked at $5.7 billion on Aug. 17.
  • While futures open interest has subsided, the total value locked into the DeFi platforms has nearly tripled to $10.9 billion over the past two months, according to data provider DeFi Pulse.
  • “Crypto money has gone into DeFi and yield farming, suppressing futures premium and making cash and carry trades unattractive for traditional/institutional investors,” Denis Vinokourov, head of research at London-based prime brokerage Bequant, told CoinDesk.
  • As money began flowing into DeFi from the futures market in the second half of August, the spread between futures and spot prices, known as the “futures premium,” began falling.
  • The premium on major exchanges declined from 12% to 2.5% in the second half of August and has remained sidelined near 7% ever since, per Skew data.
  • The near-halving of the premium in August has likely kept traditional investors and institutions from putting money into futures over the past four weeks.
  • That’s because returns on cash and carry trades, a popular strategy among institutions, dropped with the premium.
  • Cash and carry trades involve buying an asset in the spot market and selling a futures contract when the latter is trading at a premium to the spot price.
  • The strategy seeks to profit from the premium, which eventually converges with the spot price on the expiry date. The higher the premium, the higher is the reward on the carry trades and vice versa.
  • Additionally, bitcoin’s 7.5% price drop seen in September, the biggest monthly decline since March, likely contributed to the decline in open interest on CME and other exchanges.
  • “September’s decline in bitcoin has significantly affected short-term optimism in the market with Open Interest falling across all exchanges and derivatives products,” said Matthew Dibb, CEO of Singapore-based Stack Funds.
  • “We expect that further enhanced selling pressure will lead open interest to sub-$3 billion levels seen in April,” Dibb said.
  • Bitcoin is currently trading largely unchanged on the day at $10,688, according to CoinDesk’s Bitcoin Price Index.

Also read: Bulls Exit BitMEX Bitcoin Futures Market

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CoinDesk

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

CoinDesk Crypto
6 years ago

Eesti Pank, the central bank of Estonia, is undertaking a “multi-year” research project that will investigate the suitability of a blockchain-based digital currency to work alongside cash.

  • In a news release Friday, Eesti Pank said the initiative will gauge the suitability of the KSI Blockchain, already “a core” part of the infrastructure of Estonia’s e-government system, in supporting a central bank digital currency (CBDC).
  • The research will be carried out with assistance from Guardtime, an Estonian company that developed the KSI Blockchain, and The SW7 Group, a London-based business development and investment firm with a focus on innovative technologies.
  • The work will further look at new payment solutions that might arise from the use of electronic identity and other Estonian e-government solutions, though it will be technology agnostic in its approach.
  • Eesti Pank said the research is being instigated as user habits are already changing regarding payments, and to assist research on a possible digital euro announced last week by the European Central Bank.
  • Estonia’s experience running a digital form of government “gives us good grounds for launching a project to explore the technological frontiers of digital money,” said Rainer Olt, head of the central bank’s Payment and Settlement Systems Department.
  • Estonia joined the EU in 2004 and adopted the euro at the start of 2011.

Also read: Digital Euro Will ‘Protect’ Eurozone From Foreign Issuers, Says ECB Exec

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CoinDesk

Pro-Crypto PAC Giving $50 in Bitcoin to the Campaign of Each Member of Congress

CoinDesk Crypto
6 years ago

If your elected representative to the U.S. Congress has never heard of cryptocurrencies, how do you start telling them about it? Hoping to raise awareness, blockchain advocacy group Chamber of Digital Commerce’s Political Action Committee (PAC) wants to start by contributing $50 worth of bitcoin to the campaign of each congressperson. 

Announced Monday, the advocacy group said under its new “Crypto for Congress” initiative all members of the U.S. legislative body would receive campaign contributions in bitcoin. 

According to the group’s founder, Perianne Boring, this is an attempt to raise awareness and give congresspeople a chance to interact with blockchain technology and digital assets. In addition to the contribution, the Chamber’s PAC will also provide online training and a toolkit to help members of Congress engage with cryptocurrencies. 

  • “One of the biggest challenges we’ve always had is people just really don’t understand what the heck it is we’re talking about,” said Boring. 
  • She added that letting senior government officials interact with crypto assets through such an initiative could aid the group’s advocacy efforts for an industry that faces multiple public policy challenges such as taxation and regulatory jurisdiction.
  • According to the group, once informed about the contribution, the representative’s campaign can either accept it, pass it on to a charity that accepts bitcoin (BTC) or just opt out. 
  • “Crypto for Congress brings an opportunity for our entire Congressional community to join this generational shift in finance and technology,” said Rep. Tom Emmer (R-Minn.), chairman of the National Republican Congressional Committee (NRCC), in an emailed statement. Emmer is widely regarded as one of the most pro-crypto members of Congress.
  • Boring added that all of the bitcoin being given away as contributions has been mined by its U.S. based tech partners, Core Scientific and Luxor. “We’re getting clean bitcoin that was mined here,” she said. 

Related: Digital Chamber Adds Mulvaney to Board of Advisers; Visa, Goldman Join Executive Committee

Read more: Digital Chamber Adds Mulvaney to Board of Advisers; Visa, Goldman Join Executive Committee

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CoinDesk

Meet the Yield Farmers Plowing Cryptocurrency’s Riskiest Trend

CoinDesk Crypto
6 years ago

One is a Grammy Award-winning musician with lots of spare time. Another is a software engineer with nowhere to go during the pandemic. There’s also an editor for a data site and a fund manager who invests in digital assets. 

What these people have in common is an obscure side gig known as “yield farming,” a type of cryptocurrency trading and investing that didn’t really even exist until 2020. Yield farming is producing fixed-income-like returns that can, at least for brief stretches, provide annualized interest rates equivalent to percentages investors cannot find anywhere else. 

Yield farming, simply put, is when cryptocurrency holders sock digital assets like bitcoin (BTC) and ether (ETH) or dollar-linked tokens like tether (USDT) and dai (DAI) into blockchain-based, semi-autonomous lending and trading platforms in exchange for additional tokens as rewards. In the fast-growing subsegment of the crypto industry known as decentralized finance, or DeFi, yield farming offers a quicker and more lucrative way of making money than, say, parking extra dollars in a JPMorgan Chase savings account at a paltry 0.01% interest rate. 

Related: CEXs vs. DEXs: The Future Battle Lines

The yield farming DeFi boom started in June when the DeFi projects Compound and Aave launched. They were soon followed by Kyber, Balancer, and Yearn.Finance. More creative names like Spaghetti, Tendies and SushiSwap followed. 

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

Partly because cryptocurrency traders realized they could make so much money simply from using the protocols, the growth has been staggering: Since June, these systems have mushroomed eightfold, with a total of $11 billion of crypto collateral locked into them according to DeFi Pulse. According to the site DeFi Rate, it is possible to net an annual percentage yield of more than 53% APY staking crypto on lender Fulcrum  – and sometimes much more on new projects for those who get in early. 

But who are these yield farmers? Why have they flocked to this arcane corner of the digital-asset industry, and how did they learn how it all works? Is it a full-time or part-time endeavor? How insanely risky is all this?

Related: ‘Good Reason to Worry’: What the BitMEX Indictment Means for DeFi and Bitcoin, Feat. Stephen Palley and Preston Byrne

CoinDesk talked to several yield farmers to get their stories. 

THE ARTIST

André Allen Anjos, also known as RAC, is a music producer and recording artist with over 2 million monthly listeners on Spotify, winning a Grammy in 2015 for Best Remixed Recording.  “I discovered Ethereum around late 2016,” he said. 

In 2017, Anjos worked with the Consensys-backed Ujo Music to sell the first full-length album of music via Ethereum’s blockchain. Fans sent ether to a smart contract on the blockchain, and the album’s files were hosted on the decentralized interplanetary file system, or IPFS, a distributed storage system. 

Just as Anjos was getting involved with the crypto-verse, by 2018 cryptocurrency prices came crashing down. Interest in the space waned, but Anjos stuck with it. He learned about a DeFi project called MakerDAO and was quickly captivated by the concept of collateral locked into the software protocol to create dollar-linked stablecoins called dai (DAI). “That was my entry to what we call DeFi,” Anjos says. “At the time there wasn’t really a name for it.” 

The irregular schedule of a music-maker lends Anjos ample hours to explore yield farming. “I’m obviously a musician,” he said. “That’s what I do full time. Because of my job, my day-to-day is pretty loose. I can kind of do whatever I want.” That includes spending time on social media and reading up on new DeFi projects. “You pull up Twitter, and everyone’s freaking about Yams,” Anjos said, referring to one DeFi yield-farming project that exploded in popularity in August before quickly flaming out once a bug was discovered in the unaudited software protocol. 

Spend a few minutes chatting with Anjos and it gets deep into the weeds pretty fast. He’s fascinated by the stablecoin decentralized exchange Curve. “It’s a pool of stable tokens and it’s on a more efficient bonding curve.” 

Yield farmers like Anjos are able to reap trading fees from the exchange in return for providing their tokens as liquidity. Other cryptocurrency users can then borrow them to deploy in trades, or even engage in another round of yield farming. 

“Curve generates a fair amount of fees, which then go to the pool, which attracts more attention,” Anjos says. More recently, Anjos has become obsessed with a Curve copycat called Swerve; he recently Tweeted that while his traditional bank account reduced savings-account interest rates to zero, the project Swerve was offering 250% returns.

Anjos continues to think of ways to use DeFi in music. He recently sold 100 limited-edition tokenized cassettes called $TAPE of his newest album via Ethereum with help from a startup called Zora. “I think there’s a lot of opportunity to do something in music,” said Anos. “We’re sort of riddled with intermediaries. It’s kind of like the perfect use case.”

THE DAYTRIPPER

Arising early and firing up a MacBook Pro, a yield farmer who goes by “devops199fan” on Twitter checks his feed. He’s on the prowl for new ways to make money in DeFi. 

Finding the opportunities means spending a lot of time on Twitter. Devops199fan follows about 144 people ranging from Robert Leshner, founder of the DeFi lender Compound, to pseudonymous actors like himself such as Hasu, a researcher with almost 30,000 followers. Then it is over to the website Yieldfarming.info, which has a terminal-like user interface providing a wealth of resources. 

“At any given time, there are a bunch of different opportunities that are available,” devops199fan told CoinDesk via videoconference, speaking on condition that his real name not be used. “And then as time is going on, more and more opportunities are launching.” 

It’s still a part time gig. Devops199fan has a day job as a software engineer, and he doesn’t intend to quit, despite the fact that his profits from yield farming are becoming a more significant part of his income. The coronavirus pandemic and the associated lockdowns have meant work from home for devops199fan, and there are long hours in quarantine sequester for the pursuit, which he still considers a hobby. 

Devops199fan particularly likes a DeFi platform called Yearn.Finance, which directs users toward profitable opportunities by aggregating various projects and taking a cut in return. “It’s one of the coolest things to happen in DeFi,” according to devops199fan. 

THE TROOPAH

Cooper Turley was working as a writer and editor for the website DeFi Rate when the yield-farming craze hit. “I was just trying to figure out what the next trend in crypto is, sort of at the end of the bear market,” said Turley, also known Coopertroopah on Twitter. “The yield farming thing started coming to my attention with Synthetix when they were doing their liquidity trial,” he said, referring to a DeFi project that serves as an automated manufacturer of cryptocurrency derivatives.

Cooper said the amount of yield doesn’t matter when he’s plowing crypto into a project. 

“It’s more about the legitimacy of the farm that’s presented – basically the people who are either behind it or sort of the amount of time that was put into curating whatever the product is,” he said. 

Cooper usually spends a couple hours researching new projects to make sure they’re legit. Getting in at the beginning is key. 

“That’s kind of the weird nature of these opportunities popping up is that those first 24 hours are by far the most lucrative,” Cooper said. 

Most projects offer extra-juicy token rewards during the first few days. “So literally like getting in in that first hour or so can actually make a world of difference for what returns you’re getting on your capital,” he said. 

The nominal interest rates often look high, sometimes 1,000% or upward, because they’re only available for short spurts. “The reason why SushiSwap was so hot is because there were 10-to-one rewards for the first week,” he said. 

“I think just cycling into new farms as they pop up and sort of getting that first window has proven to be the most lucrative opportunity for the vast majority of these products,“ he added.

THE FUND MANAGER

Even professional cryptocurrency investors are getting into yield farming. Jake Brukhman is managing partner of the five-year-old digital-asset investment firm CoinFund, which puts money directly into various crypto projects but also yield farms. 

As of September, according to Brukhman, about 20% of CoinFund’s liquid portfolio was devoted to yield farming and liquidity mining. 

“The liquidity profile of tokens is now significantly better than it was a few years ago,” said Brukhman, a Brooklynite who has been following and investing in crypto for well over half a decade. “A few years ago, it was very hard to get a token listed on a centralized exchange,” he added. 

Now, liquidity is easy: Any Ethereum-based token can easily be listed on a number of decentralized exchanges. The trend has provided a foundation for the growth of yield farming. 

Brukman defines yield farming as “optimizing yield across many yield opportunities, sometimes by stacking them on the same capital.” 

In March 2018, CoinFund launched Grassfed Network for what it called “generalized mining strategies,” defined as “crypto economic games implemented by decentralized protocols that users can play to earn cryptocurrency-denominated compensation.” Essentially, it was an early iteration of yield farming. Even the most die-hard yield farmers will acknowledge that it all does feel like a big game, played with digital tokens but with real-money equivalents. 

Brukhman is a fan of decentralized exchanges like Balancer because providing liquidity in return for fees charged on the exchange is the best yield farming play on the market today – also known as liquidity mining. 

When Brukhman talks about yield farming, it’s with a casual, matter-of-fact stream of DeFi lingo that almost obscures the fact that none of this really even existed until recently. “Anyone can go on the supply side of these protocols and provide liquidity for some of these assets,” he said. “With Uniswap version 2 it’s only two assets per pool. With Balancer, you can provide up to eight assets per pool.” 

It’s all part of the job.

THE RISK FACTOR

While this may seem very ephemeral, yield farming could result in promising developments in the cryptocurrency ecosystem. Nonetheless, each yield farmer told CoinDesk the same thing: This stuff is really, really risky. 

“I’m sure there’s all kinds of risks that we don’t really know,” said the musician Anjos. 

Perhaps the most foreboding warning came from Cooper Turley: “I see this as incredibly risky – f*cking mad risky,” he said. 

And while the early returns were perhaps great, the cryptocurrency market is entering an uncertain fourth quarter. 

Farmer beware.  

CoinDesk’s invest: ethereum economy is a fully virtual event Oct. 14 exploring the ramifications for investors of the sweeping changes underway within the Ethereum ecosystem. Learn more.

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CoinDesk

Italian Payments Giants Merging to Form Entity That Will Dominate Local Market

CoinDesk Crypto
6 years ago

Nexi, Italy’s biggest payments provider, is to merge with rival SIA, creating a group with an estimated 70% share of the local market.

  • According to Reuters, the firms announced the expected merger Monday, saying the new group is likely to bring in 1.8 billion euros ($2 billion) in annual revenue.
  • As well as eclipsing Italian rivals, the new group is planned to expand across Europe.
  • Merger talks have been ongoing for at least 18 months – held up by disagreements over valuation and governance of the new group, Reuters said.
  • The new group will handle around 120 million payments cards and manage payments for some 2 million merchants.
  • The Italian government, which has an indirect stake in SIA through Cassa Depositi e Prestiti (an investment bank dating back to 1850), will end up owning roughly 25% of the new group.
  • Nexi will own around 70% of the new entity after the merger.
  • Italy is behind other nations when it comes to digital payments infrastructure, but the coronavirus pandemic is helping drive change in the nation.
  • As long as certain conditions are met, the merger is expected to be completed by next summer, seeing the creation of a company with an expected market value of over 15 billion euros.

Also read: Digital Euro Will ‘Protect’ Eurozone From Foreign Issuers, Says ECB Exec

Related Stories
CoinDesk

Italian Payments Giants Merging to Form New Entity That Will Dominate Local Market

CoinDesk Crypto
6 years ago

Nexi, Italy’s biggest payments provider, is to merge with rival SIA, creating a group with an estimated 70% share of the local market.

  • According to Reuters, the firms announced the expected merger Monday, saying the new group is likely to bring in 1.8 billion euros ($2 billion) in annual revenue.
  • As well as eclipsing Italian rivals, the new group is planned to expand across Europe.
  • Merger talks have been ongoing for at least 18 months – held up by disagreements over valuation and governance of the new group, Reuters said.
  • The new group will handle around 120 million payments cards and manage payments for some 2 million merchants.
  • The Italian government, which has an indirect stake in SIA through Cassa Depositi e Prestiti (an investment bank dating back to 1850), will end up owning roughly 25% of the new group.
  • Nexi will own around 70% of the new entity after the merger.
  • Italy is behind other nations when it comes to digital payments infrastructure, but the coronavirus pandemic is helping drive change in the nation.
  • As long as certain conditions are met, the merger is expected to be completed by next summer, seeing the creation of a company with an expected market value of over 15 billion euros.

Also read: Digital Euro Will ‘Protect’ Eurozone From Foreign Issuers, Says ECB Exec

Related Stories
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