CoinDesk Crypto

Sexy selfies and feminist GIFs are selling like hotcakes on non-fungible token (NFT) markets, but not everyone is thrilled about this trend.  

Blockade Games co-founder Marguerite deCourcelle, who sold more than $160,000 worth of NFTs before the NFT craze really kicked off in August 2020, launched a cypherpunk self-portrait NFT in early September and said she intends to explore more “personal tokens” over the next year. 

“I brought in about $20,000 in a month. I haven’t really focused on selling personal NFTs as a part of my business model,” deCourcelle said. 

Related: Prospective Node Operators Stake $125M in ETH to Participate in NuCypher Encryption Network

She marketed the campaign with photos of herself, portraits that clearly required styling and editing skills, which predictably attracted trolls and harassment on social media. Some trolls suggested models can’t be trusted, the infamous temptress trope, comparing deCourcelle to beauty queen Jessica VerSteeg, who is being charged with fraud. But deCourcelle wasn’t deterred. 

“The bitcoiners that see me with a personal token are outraged that I’m … selling a scam with ‘my good looks.’ Most of my supporters and fans enjoy that I’m so front and center,” she said in an interview. “It brings more transparency as I try to be more personable and engaging.”

Read more: The Inevitable Marriage of Yield Farming and NFTs, Explained

She said haters suggest she must choose to either be a model/influencer or a developer/designer, as if she couldn’t be both. Like many different types of influencers, crypto influencers often market by modeling, which plays out across social media instead of fashion magazines and runways. 

Related: First Mover: Chainlink’s Sorry September Returns Shows DeFi Hysteria Deflating

For example, Rachel “CryptoFinally” Siegel collaborated with a variety of artists using Rarible in September to issue dozens of NFTs inspired by her selfies. She said one of her NFTs sold for hundreds of dollars worth of crypto, 1 ETH, and another of her NFTs is a lingerie photo titled “I’m in it for the money,” listed for $3,614 worth of ETH. 

Siegel said she hasn’t cashed out any of her earnings yet. Instead, she uses them to mint new NFTs, buy collectibles from other artists and pay for other types of transactions. Many of these pieces are complex images, not simple selfies, all using her general vibe and features. 

“The selfies are representative of new demographics starting to enter [the NFT market],” Siegel said.

Some crypto-savvy women are now using NFTs to profit from their public image, selling to fans who understand they’re basically paying a tribute to the creator in exchange for a blockchain-based receipt. If sex workers can sell bathwater or socks, and podcasters can sell stickers, why can’t crypto influencers sell blockchain receipts? 

In response to the haters, who call these women vain and accuse them of harming the industry, Siegel tweeted: “if my selfies alone have the power to destroy crypto then honestly let it burn boys lmao let it burn.”

Gendered markets

While some women find new conduits for artistic expression in NFT markets, others are dismayed to find their images used by strangers. 

For example, the web developer and painter who goes by Ashtoshi said her bikini selfie was put up for auction via Rarible, without her consent, for over $1,051 worth of crypto. 

Although it may be unlawful for a stranger to profit from her misappropriated image, depending on the source, Ashtoshi herself struggled to get support from the platform to sell her art. She’s one of the critics who thinks selfie NFTs are silly. 

“While, of course, my pictures were posted publicly on my Twitter, to have them taken from my page and then attempt to be sold with promises of ‘writing a person’s name on my boobs,’ etc., is a bit unsettling,” Ashtoshi said in an interview. “It’s unfortunate because I did ask to be verified on Rarible the same day I posted my art – but it never happened.”

Read more: The Fast-Growing NFT Market Is Problematic Yet Promising

Women in the crypto community don’t have a choice whether people will attempt to profit from their sexuality. They only have (limited) legal options to fight it like a cat-and-mouse game. This is a tale as old as time, where predominately male circles demean women profiting from their own image as the artist and owner, rather than the passive muse. As a painter who did not want to sell sexy selfies, Ashtoshi said she was disappointed by this dynamic. 

“I won’t be posting anything else on Rarible or using the platform for anything from here on out,” Ashtoshi said. “While the idea of NFTs is super fascinating, I think there absolutely has to be some type of verification measures put in place to guarantee that what you are purchasing is an authentic piece of art.”

Ironically, a blockchain receipt only proves authenticity if the artist (or trading platform) invests legal resources to defend personal brands. No one suggests male influencers “deserve” to have selfies misappropriated, the way women are slut-shamed for selfies taken from Twitter. Some might say the self-portrait NFT trend is part of a wider push by feminist crypto fans to destigmatize self-soveriengty, especially with regards to the female body. 

Read more: ‘Crypto Instagram’ Is Becoming a Thing, Scams and All

Crypto-savvy artists like Kitty Bast, Kamil Juaregui and Caroline Dy blur the lines between evocative portraits and digital collectibles. 

Ashtoshi said she wished she had posted her painting NFTs anonymously, to avoid her debacle. Other artists use anonymity to court controversy, such as the team called ButerinSisters (after Ethereum creator Vitalik Buterin). They made a clitoris GIF NFT for roughly $54, which was traded by several collectors. ButerinSisters said they met other feminists in the space by promoting this NFT, and hope to playfully educate a few men as well. 

“We are feminists and when we discovered the Rarible platform we realized that there were mostly creations made by men and for men, it seemed interesting to us to show feminine creations,” ButerinSisters said in an interview. “We want to use the web 3.0 technology to fight [the patriarchy] and develop feminists representations with decentralized infrastructure, which cannot be censored. … Anatomy is political.”

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Shares of Canaan Creative, one of the few publicly traded cryptocurrency mining equipment manufacturers, closed the July period down only 2%, a negligible decline given they ended the preceding three quarters down double digits.

• While the company’s shares have never ended a quarter on a positive noted since their Nasdaq listing in November 2019, they recently showed signs of stabilizing.
• Since June, every trading session has closed in a tight one-dollar range between $1.75 and $2.75, according to data from TradingView. In November 2019, Canaan shares started trading around $12.60.
• After closing Q2 with a 38% drop in share price, the Hangzhou, China-based company posted a 160% quarter-over-quarter revenue increase, as CoinDesk previously reported.
• Still, Canaan’s lack of share price appreciation and continued operating losses reflect the fierce competition faced from MicroBT and Bitmain, said Ethan Vera, co-founder of Seattle, Wash.-based mining company Luxor Technology, in a private message with CoinDesk.
• Vera called the company’s latest ASIC miner a “step in the right direction” but noted the technology needs continued improvement “if they want to see any gains in market share.”
• And share price.

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Bitcoin’s price tested $10,800 to close out September while despite some market deflation, investors continue pushing crypto into DeFi.

• Bitcoin (BTC) trading around $10,701 as of 20:00 UTC (4 p.m. ET). Slipping 0.27% over the previous 24 hours.
• Bitcoin’s 24-hour range: $10,657-$10,859
• BTC above its 10-day and 50-day moving averages, a bullish signal for market technicians.

Bitcoin’s price dipped down to as low as $10,657 Wednesday, bouncing into the $10,800 range and settling to $10,701 as of press time. 

Read More: BitcoinACKs Lets You Track Bitcoin Development and Pay Coders for Work

Related: DeFi Summer; Bitcoin Fall

Jason Lau, chief operating officer of cryptocurrency exchange OKCoin, said that while bitcoin wasn’t able to hit fresh 2020 highs in September, he’s optimistic the cryptocurrency can still push upward heading into the fourth quarter of 2020. “Bitcoin’s price momentum is still positive, with its pullbacks leaving higher highs,” Lau told CoinDesk. “This is signalling a possible further continuation of this upwards move.”

Quantitative trading firm QCP Capital wrote in a September-capping investor note that bitcoin and ether were able to stay above “key” price points for the month, which it sees as a pragmatic sign. “The key support from the early month lows of $10,000 on BTC and $310 on ETH both saw substantial buying demand,” QCP wrote. “This prevented any cascading short gamma selling into quarter-end, which had been our fear if those levels broke.” 

Constantin Kogan, partner at cryptocurrency fund-of-funds BitBull Capital, noted a jump in the number of new entities on the Bitcoin network, its highest level since October 2018, as a sign of positive sentiment. New unique addresses in Bitcoin are described by data aggregator Glassnode as “entities that appeared for the first time in a transaction of the native coin in the network.”

“We’re seeing a spike in activity by new participants coming into BTC not yet reflected in price. It doesn’t happen often,” Kogan told CoinDesk regarding the new entities metric. “This is what traders call a divergence; in this case the trend looks more bullish.” 

Related: First Mover: Chainlink’s Sorry September Returns Shows DeFi Hysteria Deflating

Over in the bitcoin futures market, funding rates are now mostly in positive territory on major derivatives venues. This is a reversal from the past week and a sign bullish traders are again entering the market, according to OKCoin’s Lau.

“Bitcoin perpetual swaps funding rates have started turning positive,” Lau told CoinDesk. “This indicates that investors are more willing to go long at current price levels.”

DeFi crosses $11 billion locked

Ether (ETH), the second-largest cryptocurrency by market capitalization, was down Wednesday trading around $355 and slipping 0.32% in 24 hours as of 20:00 UTC (4:00 p.m. ET). 

The amount of cryptocurrency “locked” or held in decentralized finance (DeFi) protocols, topped $11 billion on Tuesday, according to data aggregator DeFi Pulse.

Almost 20% of the total locked is in decentralized exchange Uniswap, which despite declining volumes topped $2.29 billion in total liquidity on Tuesday. Alessandro Andreotti, a cryptocurrency over-the-counter trader based in Italy, said that although the DeFi market may be cooling since June’s explosion of protocol token launches, its ascension will continue – although perhaps at not so fast a pace. 

Read More: Compound, Gauntlet Founders Raise $4M for New DeFi Scout Fund

“I think DeFi will keep on growing, even though its growth until now has been parabolic,” said Andreotti. “Many new projects and exchanges are coming out right now, so I see no signs of it slowing down at this time.”

Other markets

Digital assets on the CoinDesk 20 are mostly in the green on Wednesday. Notable winners as of 20:00 UTC (4:00 p.m. ET):

• bitcoin sv (BSV) + 4.3%
• orchid (OXT) + 1.8%
• litecoin (LTC) + 1.2%

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

• eos (EOS) – 1%
• dash (DASH) – 1%
• tezos (XTZ) – 0.26%

Read More: SEC Orders Salt Lending to Refund Investors in Its $47M ICO

Equities:

• Asia’s Nikkei 225 closed in the red 1.5% as consolidation in Japan’s telecommunication sector led stocks lower, dragging down the index.
• Europe’s FTSE 100 ended the day slipping 0.53%, pushed lower by bleak production forecasts from energy provider Royal Dutch Shell.
• In the United States the S&P 500 climbed 1% as talks continue in Washington on parameters for a new round of coronavirus-related economic stimulus.

Commodities:

• Oil was up 2.3%. Price per barrel of West Texas Intermediate crude: $40.05.
• Gold was in the red 0.50% and at $1,887 as of press time.

Treasurys:

• U.S. Treasury bond yields all climbed Wednesday. Yields, which move in the opposite direction as price, were up most on the 10-year, jumping to 0.687 and in the green 5.8%.

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With the first Trump–Biden debate now smoldering behind us, the betting markets have picked their winner. That also means they’ve decided on a loser: President Donald Trump.

Tuesday marked the first time the incumbent squared off face-to-face against his rival, Democratic nominee and former Vice President Joe Biden. The two septuagenarians bickered, insulted, belittled and at times screamed at one another at almost regular intervals, all in hopes of convincing the American public each is the best choice to control the world’s largest nuclear arsenal.

And while conventional, real-time polling may have been unavailable during the roughly hour and a half Trump and Biden squabbled, bets were furiously being made over whom the markets believe will be the person running the U.S. for the next four years.

Related: Fed Reserve Governor Brainard Said to Be Biden’s Choice for Treasury Secretary

So why turn to the so-called predictions markets, where people bet on the outcomes of major events? The theory goes something like this: Those willing to risk their capital provide more accurate information about expectations than those who merely answer a survey. Money talks, as they say.

Trump’s rough night on PredictIt

On PredictIt, a prediction market run by New Zealand’s Victoria University of Wellington, the volume of “shares” on the question “Who will win the 2020 U.S. presidential election?” saw its highest-ever day on Tuesday, coming in at about 708,500.

Bettors buy “shares” in a candidate. When a candidate wins, the payoff is $1 per share; everyone who bet on someone else goes home with nothing. Besides being centralized, PredictIt is also regulated in the United States.

Shares of “Trump” started off the debate trading at around 46 cents, roughly where they had been for much of the month. Early in the debate, as it quickly heated up, buyers began growing a little more optimistic on Trump’s prospects, with shares rising to as high as 48 cents. However, they closed the hour back at 46 cents after roughly 46,000 shares traded hands. Just seven hours before, fewer than 5,000 shares were traded.

Related: What Is DeFi?

As the night wore on and the debate took a turn for the weird, if not troubling, sellers came in where they could, taking prices down to as low as 42 cents, more or less where it was at press time.

Read more: Prediction Markets’ Time Has Come, but They Aren’t Ready for It

Meanwhile, Joe Biden’s shares remained more or less in the 59-cent range during the debate. However, some 39,700 shares were traded. Considering the higher price, that’s a couple of thousand dollars more in volume. Biden’s stock has since been on an upswing, as high as 63 cents as this article was published.

Given the nature of this election, there were a few trades for the nominees’ running mates.

Some 40,000 shares of Kamala Harris were traded between 3 cents and 5 cents during the debates. A buyer or several buyers, perhaps speculating the GOP would want to or need to change the top of their ticket, bought nearly 100,000 shares of Mike Pence at the for between 1 cent and 2 cents.

Florida, man

The American election, of course, isn’t a one-horse race. Rather, it is 51 separate elections for sets of electors from each state and the District of Columbia. And that’s where some of the more interesting price movements have been taking place.

On Wednesday, bettors changed their minds about Florida, moving the Sunshine State from Republican at 52 cents to Democrat at 51 cents. Like presidential shares, state races also pay $1 to the winner and nothing to the loser.

That compounds trouble on the electoral map for Trump, who is seeing traditional southern Republican states like North Carolina and Arizona come into play. Wagers also appear confident Wisconsin, Michigan and Pennsylvania – the three states crucial in Trump’s 2016 victory – will switch to the Democrats.

The moves now give the Democrats a likely 335 votes in the Electoral College, up from 306 several hours before. This puts PredictIt’s numbers close to Nate Silver’s FiveThirtyEight.com’s prediction that Biden will capture 332 electoral votes. Candidates require 270 electoral votes to win the presidency.

Down the ticket

Bets on the Senate haven’t been kind to Majority Leader Mitch McConnell, either.

Gamblers now see the Democrats picking up enough seats to downgrade the longtime Kentucky Republican senator to Chuck Schumer’s (D-N.Y.) current office as Minority Leader, assuming Republicans in the upper chamber decide to keep him at their helm even if they lose control. According to PredictIt, Democrats will start the next session with 51 senators, picking up states including Arizona, North Carolina and Maine.

Decentralized markets confirm

While PredictIt is a centralized market, more blockchain-friendly exchanges also have bad news for Team Trump.

To be sure, they are smaller in size than others but offer more tailored questions. And since this is an anything-goes election, such bespoke contracts may help those who need to hedge for some reason or else just want to take on an enticing bet. After all, whether Trump will concede the election remains a mystery.

For example, Augur, the most well-known decentralized prediction market, offers one contract on “Will Donald J. Trump win the 2020 U.S. Presidential election?” expiring Jan. 20, 2021. Another one – “Will Donald Trump win the 2020 U.S. Presidential election?” – expires Jan. 7, 2021. “Who will win the 2020 U.S. Presidential election?” expires on Dec. 7, 2020.

In the first two, a “yes” contract (that Trump wins) is at 49%. In the last one, Trump is at 40% to Biden’s 54%. Presumably, the 6% is an unknown factor which, in 2020, is entirely possible.

Polymarket has bettors pricing a Trump win at 46 cents though briefly Tuesday night, it was as high as 52 cents. Just $100,000 worth of contracts have traded on that contract since it began three months ago. PredIQt on the EOS blockchain gives the president nearly the same odds, trading at 45%. Omen, which prices its contracts in DAI, gives Biden a 58.8% chance of winning.

FTX, a market that doesn’t just trade crypto derivatives, also has a market on various election-related contracts. Traders there are also bearish on Trump.

Trump’s “futures contract” on FTX had a rapid sell-off just as the debates came to a close. Prices fell to 40 cents from 43.5 cents on volume of 57,000 contracts. Back in February, it traded as high as 65.2 cents before crashing to as low as 31.8 cents in the midst of the March 12 market crash. It rebounded to 50 cents until June, it began trending lower.

Biden’s price got a boost at about the same moment, albeit on smaller size. His contract on FTX rose to 60.4 cents from 55.5 cents on 10,000 contracts just as the debate commentators were shaking their heads on-air in disbelief at the spectacle they had just witnessed.

Of course, prices fluctuate every day.

Facts change and, as this is 2020, sometimes get invented, too.

Thus what’s true at the time of publication can change on a dime. It is now fewer than five weeks until Election Day. Buckle up!

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Algorand and Blockstack PBC’s joint smart contract language, Clarity, is getting a data boost from Chainlink’s oracle network.

• The planned integration will see Chainlink’s oracles (information source links for blockchain-based applications) feed data into Clarity’s cross-blockchain smart contracts, starting with realtime price points.
• Blockstack said in a press release its users will get access to the entire Chainlink data library “in the near future” but did not provide a timeline.
• The team-up comes ahead of Blockstack’s planned Stacks 2.0 protocol upgrade. The startup’s CEO Muneeb Ali slated mainnet rollout for late Q4 in a recent blog post update.
• Clarity smart contracts, which will ultimately provide Algorand and Blockstack with inter-chain communications, are also set to debut at mainnet launch.

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A Florida crypto trader has been charged with duping $6.8 million from investors in his purported digital asset day trading shop.

• The U.S. Securities and Exchange Commission alleged in its Tuesday complaint that the defendant, Thomas J. Gity, defrauded investors from January 2018 through January 2019 as he claimed to never end a trading day in the red.
• Gity allegedly lured in 18 investors with lofty promises of outsize returns and assertions that he had $100 million under management.
• The SEC claims that Gity cooked his books to sell the lie.
• Only $970,000 of investors’ funds ever landed in Gity’s trading account, the SEC alleged. About $1.8 million allegedly went to Gity’s son. Prosecutors said Gity used the rest to perpetuate his Ponzi-like scheme.
• Gity was charged with multiple violations of securities law in U.S. District Court for the Southern District of Florida on Tuesday.

The case is a reminder that investors in cryptocurrency should watch out for promises too good to be true. Crypto, just like all asset classes, has its share of charlatans preying on the aura of a little-understood but much-hyped investment vehicle.

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Amy Webb, a quantitative futurist and founder of the strategic foresight firm Future Today Institute, thinks the world can, indeed, get worse.

In her most recent book “2020 Tech Trend Report: Strategic Trends that Will Influence Business, Government, Education, Media and Society in the Coming Year,” Webb examines the companies – and the people who run them – that will make the future either a utopia or a new hell.

Webb’s major idea centers around how the G-MAFIA (an invective and acronym of Google, Microsoft, Amazon, Facebook, IBM and Apple) and its Chinese counterpart in BAT (Baidu, Alibaba and Tencent) are becoming increasingly interwoven in our lives.

Related: Better Broadband Will Pave the Way for a ‘Brand New World’

Digital innovations – from artificial intelligence to payments architectures – are not in themselves dangerous. But decisions made today to serve political or shareholder interests, rather than the public good, could destabilize our shared future.

This post is part of CoinDesk’s “Internet 2030” series.

She’s not the only one who sees a dystopian AI arising from the ether, nor the only person to think the G-MAFIA and BAT exert outsized influence over society and politics. However, despite technological revolts and regulatory hamstringing, she admits these companies are not going anywhere.

CoinDesk corresponded with Webb over email. The conversation has been lightly edited and condensed for clarity.

Related: Crypto Co-ops and Game Theory: Why the Internet Must Learn to Collaborate to Survive

What do you suppose will happen to the “G-MAFIA” in a decade? Will they continue to consolidate power and if so, what happens to the rest of the internet? 

The G-MAFIA will continue to consolidate power. Even if antitrust measures pass in the United States, and that’s a big if, it’s unlikely the companies will accept the findings of the investigations and agree to be broken apart. 

So the question is really about how do the G-MAFIA evolve? Amazon, Google and Apple are making bold, decisive moves into health care. From Amazon’s Halo wristband to Apple Fitness+ to Google’s acquisition of Fitbit, big tech players are working now to collect and analyze our health data. 

See also: Zephyr Teachout: Take Back the Economy From Economists

But those are just devices you wear on your wrist – what about the biometric detection algorithms that mine, refine and optimize us? Or the move into electronic health data and records? And insurance in the case of Amazon, and outpatient care in the case of Apple’s employee clinics? 

If we zoom out, big tech getting into health care is just one of many areas where we’re seeing disruptive change happening at a relatively fast clip. Microsoft is building the future of smart agriculture. Facebook is, as you know very well, working on the future of cryptos and DLTs. IBM is always ignored, but it’s making important strides in open enterprise architecture for AI. 

They’re all vying for cloudshare. Power will be consolidated in a way that will be difficult to see if you’re not intentionally gathering data and working to connect dots across products, services and industries. They are amassing more power and influence than our governments.

What might the cultural or political effects be of an ever-greater consolidated and extractive web? 

We talk about privacy a lot, and journalists certainly write a lot of stories about data sharing, privacy and consolidation within the tech sector. But when it comes to everyday consumers and business leaders, it just doesn’t seem like these are priority issues. We’ll feel the effects when there is litigation, new policy or sweeping policy enacted.

You write about the tech giants of America and China as competitive and cooperative forces. What do you expect will happen to the “splinternet” – will the divide between east and west grow wider? 

Unfortunately, with China’s provocative moves to achieve cyber sovereignty, we’re going to see a deeper splinternet. 

See also: China Aims to Be the World’s Dominant Blockchain Power – With Help From Google, Amazon and Microsoft

There are greater forces at play here. China’s Belt and Road Initiative, which swaps infrastructure development in emerging markets for debt, could lead to BRI countries being coerced into using the Chinese internet rather than the existing internet, which to be fair relies on data transfer for monetization. 

Projects like Tim Berners-Lee’s Solid are an interesting example of emerging decentralized approaches to the web, applications and data use. Similarly, I think we’ll see more distributed networks like Golem and Morpheus. 

But it will take a long time for Web 3.0 initiatives to move from the fringes to the mainstream.

Do you see a genuine way out through distributed technologies that may give people control over their own data? 

I worry about people who never update their passwords – should we entrust them to manage sensitive data? There are complex questions about data hygiene, data governance, compliance, risk. Distributed tech solutions solve some of our problems, but not all.

Few people have an understanding of how data are collected, by whom, for what purpose. There are lots of organizations proposing some kind of “ownership” model, where we individually would “own” our data. What does that mean? 

I want consumers to be much better aware of what data they are generating – that includes the digital emissions they’re releasing without realizing it. Think of all the metadata being generated by our connected devices, the ambient sounds in our homes and offices, our movements and gestures. All of those digital emissions, plus the PIIs collected now by contract tracing apps and biometric scanning systems – I mean, we’re swimming in data. 

How can we become better at predicting the future?

As a futurist I’ll be the first person to tell you that I can’t predict the future. The math doesn’t work out. If I’m dealing with a limited quantity of variables, then yes, I might be able to make a prediction. The reason we’re continually surprised is because we’re only thinking tactically about what matters right now, or we’re thinking fancifully about the deeper future. The hard work is finding signals in the present and modeling their next-order impacts using data and rigorous frameworks. Predictions are brittle. The goal of any good futurist is preparation. 

See also: Don Tapscott – A New Social Contract for the Digital Age

The question really is: How can we reduce uncertainty? We should all try to get better at confronting cherished beliefs and accepting chaos and chance as drivers of change. Ultimately, strategic foresight isn’t about making predictions. It’s about creating a state of readiness and knowing when to act. This includes being ready for a sudden chaotic event, like a natural disaster or a global pandemic. The best strategic foresight work results in insights, internal alignment, and faster, data-driven decision-making. I like to use a flywheel analogy. With some pushing and persistent effort, the effect is a reduction in surprise and uncertainty.

I do not believe in “Black Swan” events, which are unpredictable events that come as a total surprise and have severe consequences. Nothing is truly instantaneous. When people talk about the pandemic as a “Black Swan” event, they are wrong. The virus emerged, governments made poor choices, and now we’re dealing with the aftermath. Plenty of models predicted we’d be in this situation back in December if good, disciplined choices were not made. 

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BitFlyer Europe is giving its European bitcoin traders direct access to the Tokyo-based parent exchange’s Japanese liquidity.

• Announced Wednesday, the cross-border initiative opens Japan’s high-volume bitcoin markets to European traders courting the bitcoin/Japanese yen trading pair.
• BitFlyer said in a press statement the new approach eases those traders’ access to liquidity by doing away with multiple account requirements.
• In the long term, bitFlyer said it plans to unlock cross-border trading pairs across its three active regions: Europe, Japan and the U.S.

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Blockchain startup Fluree, already building a distributed data management platform to boost the U.S. Air Force’s decision-making prowess, has raised $2.5 million in additional funding from its venture capital backers.

The fresh capital pushes Fluree Public Benefit Corporation’s total seed funding to $6.5 million. It also unlocks a $1.5 million defense contract pledged as matching funds through the U.S. Air Force’s Small Business Innovation Research (SBIR) program, said Fluree communications manager Kevin Doubleday.

• He said Fluree will now begin working on Phase II of its USAF project: a blockchain-based and cryptographically secured Multi-Domain Command and Control platform for cross-partner information and data sharing.
• “We won the contract with USAF to build a secure communications [platform] between USAF and its worldwide partners, but part of the contract stipulates that we raise” additional venture capital funding, Doubleday told CoinDesk.
• He said the requirement is USAF’s way of ensuring Fluree’s “tech has longevity” and traction in the private sector. It is a common clause in Defense contracts meted out through SBIR.
• First-time Fluree investor Engage Ventures, a Southeast U.S.-focused tech VC, contributed alongside previous backers 4490 Ventures Rise of the Rest, Good Growth Capital and cyber security CEO Ray Rothrock.
• Fluree will use the funds to hire more engineers to work on its verifiable credential and distributed identity infrastructures, Doubleday said.

See also: US Air Force and Raytheon Are Studying How Distributed Ledgers Could Help Command the Skies

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Coinbase will offer non-aligned employees a severance package, Kadena looks to cut into the DeFi market with a new decentralized exchange and Sushiswap is hemorrhaging liquidity. 

Top shelf

Severance offer
Coinbase CEO Brian Armstrong sent his employees a letter telling them to get in line with a new company “culture shift,” offering those unwilling to do so a “generous separation package.” CoinDesk has obtained a copy of the letter. The package includes four months’ severance for employees who have been at the exchange less than three years or six months for longer-term employees. Employees will have until Oct. 7 to submit a form to begin the process of severance if they are unhappy with Armstrong’s public commitments to remaining uncommitted and apolitical. The letter says that “life is too short to work at a company that you are not excited about.”

DeFi fund
Robot Ventures has secured $4 million in funding, led by Galaxy Digital with additional participation by Coinbase co-founder Fred Ehrsam’s Paradigm, for a second DeFi-focused fund, called Scout. This seed level venture fund – run by Compound Labs’ Robert Leshner and Gauntlet Network’s Tarun Chitra – will act as a “scout” for larger funds looking for DeFi investment opportunities, CoinDesk’s Brady Dale reports. Chitra said DeFi has a clear advantage over traditional high-end trading desks because of its speed of product creation and innovation.

Related: First Mover: Chainlink’s Sorry September Returns Shows DeFi Hysteria Deflating

Crypto, copycat
A Chinese video site copycat that raised $2.1 million via an initial exchange offering in August 2019 lost a court battle. Dilidili launched in 2015 as a clear mimic of popular Chinese video streaming site Bilibili. Five years later, the Shanghai Yangpu District Court has said Dilidili has infringed the trademark of its Nasdaq-listed rival and must pay a fine of nearly $500,000. Last year a struggling Dilidili raised funds via crypto and launched a community governance ecosystem and token. “The episode is an example of a failed attempt by Chinese companies to use the concept of cryptocurrency and blockchain decentralization to rejuvenize their businesses,” CoinDesk’s Wolfie Zhao reports.

New Dex
Hybrid blockchain platform Kadena plans to launch a new multi-chain decentralized exchange (DEX) in hopes of wooing business from congestion-plagued Ethereum-based rivals. Called Kadenaswap, the new DEX, unveiled Tuesday and set to debut late this year, will process 480,000 transactions per second, its founder Kadena President Stuart Popejoy claims. Further, Popejoy said Kadena’s existing bridge infrastructure, which currently facilitates cross-chain KDA token transfers via the Pact smart contract language, can easily port over to the coming DEX. CoinDesk’s Danny Nelson reports. 

Overstock overcomes
Overstock.com and former leader Patrick Byrne have prevailed over the dividend-doubting short sellers who cried foul (and filed suit) over the e-commerce site’s issuance of a digital security. Plaintiffs accused Overstock of fraudulently pumping its stock with misleading financial projections, promising to issue a digital dividend to shareholders via its tZERO subsidiary and placing a six month freeze on trading this digital share. On Tuesday, U.S. District Judge Dale A. Kimball tossed the federal class action, saying Overstock had a “legitimate business purpose” for issuing its digital security in its “transition from being a traditional online retailer to a blockchain technology business.”

Quick bites

• French Authorities Arrest 29 Suspected of Using Crypto to Fund Extremists in Syria (Sebastian Sinclair/CoinDesk)
• Energy Web Is Starting With Ripple in Its Bid to Make Crypto Provably Green (Ian Allison/CoinDesk)
• Hypeman of the Century (Chris Harland-Dunaway/The Verge)
• How MIT’s 'Pool Detective' could help prevent attacks on blockchains (Saniya More/The Block)
• Crypto Community Reacts to US Presidential Debate (Scott Chipolina/Decrypt)

At stake

Funding bitcoin
“If Bitcoin is decentralized, who funds its development?” This longstanding question, historically answered by the quiet work of volunteer Bitcoin developers, now has a new response: a website that allows Bitcoin users to pledge payment for protocol upgrades.

Related: Blockchain Bites: CZ’s Exclusive Interview, California’s Souped-Up Regulator, Alt Season’s End?

The brainchild of Pierre Rochard, BitcoinACKs aggregates pull requests for protocol improvements from the Bitcoin Core GitHub (in coder vernacular, “ACK” means that a proposal or change passes muster), CoinDesk tech reporter Colin Harper writes.

BitcoinACKs’ crowdfunding mechanism is a first in Bitcoin’s open-source landscape. Before, you could sponsor individual developers, but you couldn’t directly fund individual upgrades.

Usually, open-source funding has been the realm of cryptocurrency exchanges or other Bitcoin-related companies. These actors will often offer six-figure lump-sum grants to independent developers to fund their work.

“BitcoinACKs is for funding targeted, specific outcomes. For example, perhaps your business needs a specific API feature, rather than asking for favors or hiring full-time contributors, it’s more convenient to put a bounty on it,” Rochard said.

The website has been around for a couple of years, but Rochard just rolled out a new feature: a pledge option that allows users to commit funding to a specific protocol improvement and pay developers once that improvement is merged into Bitcoin Core.

These pledges can be paid out via Lightning or on-chain payments processed through BTCPay Server. 

Market intel

Sushi’s spoils?
SushiSwap, a DeFi lending protocol modeled on Uniswap, saw $50 million in liquidity exit the system yesterday, the biggest single day drop since September 21. SushiSwap has been on a near-uninterrupted decline since mid-September when its creator made off with, and then returned, the dev fund. After hitting an all-time high of $1.4 billion total value locked (TVL) on September 12, Sushi’s TVL fell by two-thirds to nearly $490 million just a week later. It has declined a further $130 million to $354 million in the past nine days.

Op-ed

See, saw, cycles
Jill Carlson, co-founder of the Open Money Initiative, writes about the cycles of “token” exuberance and actual development in the crypto industry. “There has emerged a pattern of fluctuation back and forth between innovation in crypto assets, discovering the challenges, turning to build blockchain infrastructure, running into roadblocks there and back. Before long (and perhaps sooner than I anticipate) we will see this pendulum of interest swing back from infrastructure to innovation around assets themselves,” she writes.

Podcast corner

Anti-woke or joke?
Coinbase CEO Brian Armstrong’s letter has not just the crypto world but the larger world of tech and business talking about the role of corporations in society. NLW dives in.

Related Stories

• First Mover: Binance CEO Sees Future in DeFi While Bitcoin Volatility Turns Minuscule
• Blockchain Bites: DeFi Meets NFTs, TSLA Beats Bitcoin in Volatility, Uniswap Breaks $2B

The Gibraltar Stock Exchange (GSX) has listed 3iQ’s closed-end fund, five months after it was first listed in Toronto.

• GSX announced Tuesday that The Bitcoin Fund, which provides institutional investors with exposure to bitcoin through a regulated asset class, is now ready for trading.
• Essentially structured as an exchange-traded product (ETP), the underlying assets are held by exchange and custody provider Gemini.
• In a statement, 3iQ’s president and CEO, Fred Pye, said the listing would open the fund to European institutional investors, including pension and sovereign wealth funds.
• Based in Canada, 3iQ spent three years in dialogue with the Ontario Securities Commission (OSC) before it received approval for its fund.
• The Toronto Stock Exchange listed The Bitcoin Fund in April of this year.
• GSX has shown much interest in cryptocurrencies and launched a blockchain trading subsidiary, now based in Estonia, in late 2017.
• Earlier this year, the bourse also launched its "GRID" platform, which allows clients to create and issue tokenized securities.
• Since 2018, Gibraltar’s authorities have taken the usual approach of relying on nine guiding principles to regulate digital assets.
• Earlier this month, the territory updated its regulatory guidance to say crypto derivative products came with much more risk than the underlying assets themselves

See also: It’s Tough Getting Approved in Gibraltar, Says Green-Lighted Crypto Derivatives Exchange

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• DeFi ‘Vampire’ SushiSwap Still Hemorrhaging Liquidity
• French Authorities Arrest 29 Suspected of Using Crypto to Fund Extremists in Syria

Geopolitical jostling accelerated by large-scale private stablecoin initiatives like libra, plus an added dose of COVID-19, means we are now facing a perfect storm for central bank digital currencies (CBDCs).

Such tectonic shifts are being acknowledged by big players like Deutsche Bank, the latest lender to issue a report on CBDCs and their looming impact.

The report, while quite conservative, recognizes the global financial system is in a state of exponential flux. For example, within only a decade of Bitcoin’s arrival, China has begun testing a CBDC in four major cities.

Related: EU Proposes Full Regulatory Framework for Cryptocurrencies

“The e-RMB and the Belt and Road Initiative would give China a chance to increase the importance of that currency overall,” Gerit Heinz, Deutsche Bank’s chief investment strategist, said in an interview with CoinDesk. “That could also imply some changes in the global reserve system.”

Challenging the marriage of convenience between the global financial system and the U.S. dollar may be the technology’s ultimate impact.

“CBDC has the potential to challenge the primacy of the U.S. dollar,” Heinz said.

It’s perhaps no surprise this potential decoupling is being driven hardest of all by China, the anchor of a region that holds half the world’s foreign exchange reserves, not to mention some of the niftiest digital payments infrastructure.

Whither Europe?

Related: Societe Generale to Use as Many as Five Blockchains in Capital Markets Trials

So what’s Europe’s position in this digital currency cold war? Earlier this month, European Central Bank President Christine Lagarde said at a conference in Germany that Europe has fallen behind the competition when it comes to CBDCs. 

A digital euro, which would not replace cash but complement it, is needed to keep Europe at the cutting edge of innovation and to provide an alternative to private digital currency initiatives like libra, Lagarde added in a speech last week.

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

The CBDC race is being run on uneven ground, however. Deutsche’s Heinz pointed out that in a democratic system, governments would have to take time to explain these developments to their people. “And people would probably want to have a say in this, although probably to varying degrees in different countries,” he said, adding:

“In Europe, I would expect a lot of discussions about this. The euro introduced as a currency decades ago has triggered a lot of discussions. So CBDC in a euro system of different countries would, of course, imply much more discussion than in a bigger, more centralized country like China.”

Stepping back, the Deutsche Bank report reminds us that changes to the dominant global reserve currency are a historical recurrence. “The pound was more important in the past and then the dollar took over; the petro-dollar and the fact that commodities are traded in dollars is one reason,” said Heinz.

The difference today is that it’s not just the dominance of the dollar, it’s the dominance of U.S.-centric infrastructure and technology in payment systems, said Rashid Hoosenally, CEO of Lacero, a builder of infrastructure connecting digital assets to regular businesses. 

“I think that in the CBDC story, there is potentially an evolution to a more distributed version of that power, something that looks more like a global consortium rather than being overly centered around any one country or economic bloc,” said Hoosenally. “If that also leads to more harmonization of regulation and technology standards, that could bring huge financial and social benefits by making the system much more efficient.”

Loveless marriage 

As such, CBDC could be the next front in a technology-based cold war, which has included things like the Google tax, and in which regard it’s not at all surprising to find that Europe appears to be more outraged than anyone over Facebook’s libra plans. 

(It’s also interesting to note that Europe’s broad proposals for its digital finance future, which include a framework for the regulation of all digital assets, also aims at gaining some kind of oversight of U.S. cloud providers like Amazon Web Services, Microsoft Azure, Google Cloud Platform and IBM Cloud.)

Read more: Leaked EU Draft Proposes All-Encompassing Laws for Crypto Assets

On the banking side of things, there are some who even see CBDC as a possible revenge catalyst for putatively protectionist policies introduced by the U.S. post-2008.

“I’m not sure I would call it a ‘war’ or a ‘battle’ because I think really what central banks are doing is responding to what’s going on in the economy,” said Gary Smith, founder of Sovereign Focus, a consultancy based in London.

However, Smith did refer to the arrangement regarding America and Europe, as well as many other places as something of a loveless marriage, citing as an example U.S.-imposed sanctions on Iran.

“The U.S. walked away from the Iran agreement. Europe hasn’t and would like to do some trade with Iran, but they are being bullied by the U.S. Treasury,” said Smith. “So having an alternative payment system that Europe can use without falling foul of the U.S. Treasury is something that probably has some appeal.”

Also last week, the International Association of Trusted Blockchain Applications (INATBA), a trade association with close ties to the European Commission, showed its support for the creation of a level playing field for digital assets in Europe, by stating in a blog post:

“Europe is not just carving out its own place in the ‘tech cold war.’ It is seeking to rise above it with a cunning strategy.”

The situation regarding CBDCs on the global stage is not about being anti-American, or anti-Chinese, said Marc Taverner, INATBA’s executive director.

“What we are seeing is the tectonic plates shifting and a great opportunity around digital currencies and DLT,” Taverner said. “What Europe is aiming at is to be is a place for innovation.”  

Read the full report:

Related Stories

• Wyoming Bank Regulator Taps Chainalysis to Boost Crypto Tracing Efforts
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The top U.S. financial watchdog has ordered Salt Lending to offer investors refunds for its 2017 initial coin offering (ICO).

• The Securities and Exchange Commission (SEC) told Salt Blockchain Inc., the owner of the lending platform that offers dollar-denominated loans collateralized by cryptocurrencies, that it would have to begin the process of offering refunds to investors.
• It will have 14 days to issue a press release, announcing the order, on its website.
• In a public letter, the SEC said Salt’s ICO violated securities regulations by not registering the sale beforehand.
• The SEC said the token counted as a security because Salt told investors they could expect to make a return on their investment.
• Investors will have three months to submit a claim to Salt, who will be obligated to pay back their investment along with any agreed interest.
• Salt has agreed to settle the action and will pay a $250,000 civil penalty to the Commission in the next 10 days.
• The lending platform has also agreed to register its SALT tokens – currently trading at $0.05 – as securities with the SEC.
• The settlement means Salt will not have to agree or deny the Commission’s findings.

See also: SEC Seeks Trial of Swedish National Over Alleged Fraud That Took $3.5M in Crypto

EDIT (Sept. 30, 16:50 UTC): This article has been updated to specify that the SEC is ordering Salt Lending to offer investors refunds, rather than issue refunds directly.

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• Data Management Startup Fluree Unlocks $1.5M Air Force Contract With Latest VC Raise
• 3iQ’s Bitcoin Fund Gets Second Listing of 2020 – This Time on Gibraltar’s Stock Exchange
• DeFi ‘Vampire’ SushiSwap Still Hemorrhaging Liquidity
• French Authorities Arrest 29 Suspected of Using Crypto to Fund Extremists in Syria

Money is evolving, and as more people join the Bitcoin network, the world may see a decline in the use of cash with the wider adoption of cryptocurrencies as legitimate assets.

DeFi deflated.

That was the story in cryptocurrency markets in September as prices tumbled for digital tokens from “decentralized finance” (DeFi), the fast-evolving arena of blockchain-based lending and trading platforms.

Chainlink, which supplies data feeds to DeFi systems, saw its LINK token fall 42% month to date, the worst return among digital assets in the CoinDesk 20.

Related: Reef Finance Raises $3.9M for Cross-Chain DeFi on Polkadot

The DeFi market correction came at a time when traditional markets also were hit hard by growing anxiety over the increasingly contentious U.S. presidential elections in November and resurgent coronavirus cases in the U.S. and Europe, according to Anil Lulla, co-founder of the cryptocurrency research firm Delphi Digital.

It was a reality check after DeFi’s ebullient August during which traders speculated that the emerging sector would reap fast revenue growth buoyed by well-received debuts of DeFi protocols. Tokens mooned from Aave’s LEND to Yearn.Finance’s YFI and Spaghetti’s PASTA. Total collateral locked in DeFi rocketed to $9 billion at the end of August from $2 billion at the start of July. It is currently at $11 billion.  

The slowing rate of growth in September translated to a sell-off in DeFi tokens. 

“If you look at August, crypto came off probably with one of the best months of performance ever,” Lulla said. “So I don’t think it’s unusual to see a breakdown, a little dip like this.”

Related: DeFi ‘Vampire’ SushiSwap Still Hemorrhaging Liquidity

The DeFi tokens’ monthly swings were bigger than for bitcoin (BTC), which slid 7.9% in September, after a 2.6% rise in August. 

Matthew Hougan, global head of research at Bitwise Asset Management, noted that LINK’s decline followed a 10-fold rise in the 12 months through August. The token is still the best-performing digital asset the CoinDesk 20, up 458% year-to-date.  

“That’s the crypto shuffle,” Hougan told CoinDesk in an email. “I don’t think anything has fundamentally changed about the story or the investment case. The DeFi market got a little bit ahead of itself and now it’s resetting.”

CoinDesk’s Zack Voell reported Tuesday that some crypto traders are shifting funds from alternative tokens into bitcoin in a bet that the largest cryptocurrency, with a market capitalization of about $200 billion, might prove a better bet over the next several months. And CoinDesk’s Omkar Godbole reported that data from the cryptocurrency options markets suggest that ether, the native token of the Ethereum network which serves as the backbone of DeFi, might start to take its cues from bitcoin’s price direction.

Bitcoin closed Tuesday at $10,836, setting a record of 65 consecutive daily closes above $10,000, the longest period in history. 

The Norwegian crypto research firm Arcane Research also noted that the number of daily active addresses on the Bitcoin blockchain surged last week to its highest level since January 2018.

“This is a healthy sign and shows that the adoption and use of bitcoin is increasing,” the newsletter wrote.

– Muyao Shen

Bitcoin Watch

Cryptocurrency analysts are daring to venture into a categorization of bitcoin that would have been unthinkable a few years ago: That historically volatile bitcoin prices now be above $10,000 to stay. 

“It is safe to say that the leading cryptocurrency has established itself as a 5-digit cryptocurrency this year,” the Norwegian digital-asset analysis firm Arcane Research wrote Tuesday in a weekly report. 

Bitcoin has now had 65 consecutive daily closes above $10,000, a record, and over the past six days the largest cryptocurrency has stayed in a tight range between roughly $10,600 and $10,800. 

Diginex’s Matt Blom wrote Tuesday that he sees price-support levels at $10,500, with “more solid support” at $10,350. Barring that, the next level of $10,150 would likely be “well defended by the bulls, should we reach it.” 

So the logical question is whether prices can sustainably break above $11,00 and maintain that higher plateau. 

“Once the markets make up their mind direction-wise, we usually expect some sort of breakout from the short-term ranges,” Greenspan wrote. “None looks more ready for this than bitcoin right now.” 

– Bradley Keoun

Token Watch

Yearn.finance (YFI): Governance deployment error that temporarily charged an additional fee of 5% for each withdrawal instead of the originally set 0.5% has been fixed.

Ethereum (ETH): Ethereum 2.0 developers have launched yet another testnet, this time to give on-boarding stakers a dry run before the launch of network upgrade later this year.

Zcash (ZEC): Gemini exchange adds “shielded” withdrawals of privacy token.  

Cosmos (ATOM): Coinbase adds 5% staking rewards on blockchain-interoperability project’s tokens. 

Uniswap (UNI): Trading volume on decentralized exchange has declined over the course of September. 

What’s Hot

Traders using crypto derivatives and automated market maker HoneySwap to get liquidity in Reddit’s MOON tokens (CoinDesk)

Coinbase CEO Armstrong to staff: If you don’t like our “culture shift,” here’s a severance package (CoinDesk)

Hybrid blockchain platform Kadena plans to launch a new multi-chain decentralized exchange in hopes of wooing business from congestion-plagued Ethereum-based rivals (CoinDesk)

Analogs The latest on the economy and traditional finance

Fed stimulus helped push up total U.S. household net worth to all-time high in Q2 (Lyn Alden Investment Strategy)

ECB to consider inflation overshoot in echo of Fed strategy (Bloomberg)

Conference Board’s consumer confidence index jumps most for a month in 17 years as stocks rally (Reuters)

Chinese yuan posts strongest quarter versus dollar in more than a decade (WSJ)

Negative real interest rates seen “as far as the eye can see” (WSJ)

JPMorgan Chase will pay a $920 million to resolve probes from three federal agencies for role in manipulating global metal markets and Treasuries (CNBC)

Disney to cut 28K jobs as pandemic hits theme-park, cruise-line and retail businesses (Bloomberg)

Tweet of the Day Related Stories

• Compound, Gauntlet Founders Raise $4M for New DeFi Scout Fund
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As the limitations and costs of running decentralized finance (DeFi) apps on Ethereum continue to ride high, a growing list of projects are lining up on competing blockchains.

Adding to this trend, Polkadot-based Reef Finance has closed a $3.9 million seed funding round for its cross-chain suite of DeFi services, the company announced Wednesday. Included in the round were NGC Ventures, AU21 Capital, QCP Capital, Kenetic Capital and Woodstock Fund.

Reef aims to solve the high technical barrier investors face when attempting to participate in DeFi, said Reef Finance CEO Denko Manceski, not to mention doing away with gas fees on Ethereum that are currently running at near-record highs.

Related: First Mover: Chainlink’s Sorry September Returns Shows DeFi Hysteria Deflating

“The average retail investor entering the DeFi landscape is confused,” said Manceski. “They don’t know the names of the projects or how to keep up with the best strategies and stay safe and well-diversified. They have to go through, like, five different websites and use different [user interfaces] made by different vendors. It’s overwhelming. And while you do this, you’re missing out on different opportunities.”

Read more: Polkadot-Based Acala Raises $7M as DeFi Grabs Land on Another Blockchain

To remove the headache from a typical DeFi user experience, Reef offers a kind of one-stop shop, combining a global liquidity aggregator, yield farming aggregator and asset-management product, said Manceski.

So far, Reef has partnered with Polkadot projects like Plasm, a dapp platform on Substrate; and Crust Network, an incentive layer for decentralized storage. The company said it also plans to integrate with leading oracle service providers including Chainlink and Bluzelle. 

Related: DeFi ‘Vampire’ SushiSwap Still Hemorrhaging Liquidity

“The Holy Grail of decentralized asset exchange is seamless interoperable movement of assets along the paths of least resistance, and Reef is attempting to address this challenge by building on top of Polkadot,” Kenetic Capital partner Jehan Chu said in a statement.

Related Stories

• Compound, Gauntlet Founders Raise $4M for New DeFi Scout Fund
• So Now They’re Hacking DeFi Protocols Before They’ve Even Launched?

The crypto industry, with its questionable carbon footprint, now has a convenient way to showcase its green cred on a verified (rather than trusted) basis.

But that raises a tricky question: The likes of Amazon and Google, whose processing largely takes place within directly owned and controlled data centers, are able to contract clean energy with relative ease and precision. But who do you ask for if you want to make Bitcoin greener? 

Announced Wednesday, Energy Web, a non-profit focused on decentralized approaches to decarbonizing the grid, wants to show how a large blockchain platform can switch to a zero-carbon footprint. To start with, the organization is teaming up with San Francisco-based Ripple and the XRP Ledger Foundation.

Related: World’s Biggest Meat Processor to Tackle Amazon Deforestation Using Blockchain Tech

Ripple’s support of this venture is intended to open the door to other blockchains with more energy-intensive operations like Bitcoin, said Jesse Morris, Energy Web’s chief commercial officer.

To make all this possible, the non-profit has released an open-source app called EW Zero that makes it easy for individuals, businesses or even entire blockchain ecosystems to make the transition. This initial deployment uses energy attribute certificates (EACs) from renewable energy sources to decarbonize electricity, the companies said.

“Blockchains are a massive energy hog and a lot of that electricity is not coming from wind, solar, hydro or other sustainable facilities,” said Morris. “So we have been thinking for a while now about how we could help the crypto industry decarbonize blockchains, given the distributed nature of the technology.”

First, Ripple

In the case of Ripple, a 500-person fintech company focused on crypto-powered banking, there is an obvious starting point when it comes to reducing the firm’s carbon footprint. Moreover, Ripple uses a consensus system quite unlike Bitcoin’s proof-of-work (PoW) mining, an algorithm that by definition must burn through a ton of electricity. (At last count, the top five PoW blockchains currently use up to 170 terawatt-hours (TWh) of electricity per year – more than the state of New York.) 

Related: Market Wrap: Bitcoin Clings to $10.4K; Ether in Smart Contracts Highest Since 2016

As such, bitcoin isn’t really comparable to something like pre-mined XRP running on Ripple, which many would argue comprises much more of a centralized system.

Presented with these observations, Ken Weber, Ripple’s head of social impact, said in this case it would be beneficial to put technology-based tribal differences aside and adopt more of an “all in this together” approach.

Read more: Can Bitcoin Survive the Climate Change Revolution?

“It’s early days for all these currencies, which right now have a tiny share of global finance, but further down the line [green energy adoption] is gonna be much more difficult to reverse engineer,” said Weber. “We wanted to help make it easy to adopt these practices. This is not a proprietary wish on Ripple’s part; it’s a whole system wish. As with other social change movements, the idea is not to make anybody feel bad or shamed, but to give them a means to do this that is reasonable, beneficial and participatory.”

Crypto ESG

Alex de Vries, the founder of Digiconomist, which identifies trends in cryptocurrencies, said carbon offsetting is happening at the level of crypto exchanges looking to do business with traditional financial institutions that follow environmental, social and corporate governance (ESG) mandates.

“Ripple is leveraging the fact that people associate heavy energy consumption with blockchains, but that’s only really proof-of-work,” said de Vries. “With Bitcoin, you’re talking about an extreme carbon footprint of 300 kilograms per transaction. I haven’t done the math on Ripple, but it’s gonna be closer to a Visa transaction, which is 0.4 grams per transaction.”

Read more: Hyperledger Conference Shows Where Blockchain Can Fight Global Warming

Nonetheless, this is a step in the right direction for a relatively young industry that could become one of the first to be carbon-neutral, said Energy Web’s Morris. In the same way that large corporates use certificates to decarbonize complex supply chains, blockchain users can purchase certificates from different places around the world (EW Zero also uses a blockchain system to track and account for these certificates). 

“Imagine in the future having a wallet interacting with some blockchain, and as a part of that wallet you can actually increase your transaction fee just a bit and you’ve just contributed to decarbonizing the blockchain by purchasing a certificate somewhere,” said Morris. “Or if you are a bitcoin miner in a mining pool, you’re also able to use this application to directly purchase certificates in a specific part of the world.”

The impetus to give this is a go is two-fold, said Energy Web CEO Walter Kok.

“Firstly, on the supply side, it will be useful to hook up existing green energy producers already servicing Bitcoin, which might have an overcapacity of green energy,” Kok said, adding: 

“The other part won’t happen overnight, but in the end, everybody wants to be assured they are contributing to a better world. So let’s get to the point where we can say with confidence that all blockchains, including Bitcoin and all its miners, produce in a green way.”

Related Stories

• YouTube Ignored Warnings About XRP ‘Giveaway’ Scams, Ripple Says
• Australian Payments Firm Sues Ripple for Use of PayID Trademark

DeFi trading protocol SushiSwap, which threatened to sap the life out of rival Uniswap just two weeks ago, is still losing crucial liquidity.

• Data from DeFi Pulse shows total value locked (TVL) in SushiSwap has dropped nearly 8% in the past 24 hours.
• TVL represents the dollar value of the tokens locked into a protocol’s smart contracts. While not universally accepted, it’s generally considered a key success metric for decentralized finance (DeFi) projects.
• This is particularly true for automated market maker (AMM) exchanges, such as SushiSwap and Uniswap, which rely on users depositing tokens in order to provide liquidity and create the trading experience.
• As such, Wednesday’s figures don’t make for good reading; SushiSwap has been on a near-uninterrupted decline since mid-September when its creator made off with, and then returned, the dev fund.
• After hitting an all-time high of $1.4 billion on September 12, Sushi’s TVL fell by two-thirds to nearly $490 million just a week later.
• While that rate of decline has shallowed, TVL has still fallen a further $130 million to $354 million in the past nine days.
• Wednesday’s drop of nearly $50 million is the biggest since TVL fell by $100 million on September 21.

• This marks a significant change in SushiSwap’s fortunes, which just weeks ago looked to supersede Uniswap after it took $830 million in vital liquidity.
• However, a $500 million UNI airdrop and concerns over SushiSwap’s founder saw most of that liquidity bounce back to Uniswap.
• Indeed, from just $430 million in TVL in mid-September, Uniswap has made a dramatic snapback, becoming the first protocol to break the $2 billion milestone this week.
• In the past 24 hours, Uniswap’s TVL has risen by approximately 2%.

See also: UNI Market Cap Rebounds $120M as Rest of Crypto Market Falters

Related Stories

• Reef Finance Raises $3.9M for Cross-Chain DeFi on Polkadot
• Compound, Gauntlet Founders Raise $4M for New DeFi Scout Fund
• French Authorities Arrest 29 Suspected of Using Crypto to Fund Extremists in Syria
• Coinbase Offers Severance Package to Employees Unsatisfied With ‘Apolitical’ Mission

“I would call this the ‘moving fast as hell’ era,” Robert Leshner said of decentralized finance (DeFi) right now.

CoinDesk spoke to Leshner, founder of the Ethereum-based money market Compound Labs, and Tarun Chitra, of crypto financial modeler Gauntlet Network, about the new fund they are running together.

It’s the second fund created by Leshner’s firm, Robot Ventures, and it has secured $4 million in funding, led by Galaxy Digital with additional participation by Coinbase co-founder Fred Ehrsam’s Paradigm.

Related: Reef Finance Raises $3.9M for Cross-Chain DeFi on Polkadot

Scout funds act as seed investors but with ties to institutional funds, helping the larger entities get an early read on opportunities for later rounds. Robot Ventures was first announced in April 2019.

Read more: Bain Capital and Ripple’s Xpring Invest in DeFi Founder’s ‘Scout Fund’

“It’s quite hard to understand which ones make sense and don’t make sense,” Chitra said, because it can be difficult for those who aren’t in the trenches to assess the quality of a project’s relevance. “We can serve as the bridge.”

Chitra and Leshner bring complementary skill sets to the space. Leshner is the one who set up a DeFi company and brought it to a market-leading position. Tarun, as Leshner put it, “is probably the lead quant within DeFi and has done a lot of the structuring of token distributions and economic analysis for probably every project you’ve heard of.”

Related: DeFi ‘Vampire’ SushiSwap Still Hemorrhaging Liquidity

Quipped Leshner: “He’s the brains, I’m the brawn.”

Chitra said DeFi today has a clear advantage over traditional high-end trading desks that won’t even consider creating a derivative for less than millions of dollars. DeFi is cranking out new derivatives every day, completely upending the model. This is what big investors want to get some kind of exposure to.

Read more: Why DeFi on Ethereum Is Like Algorithmic Trading in the ‘90s

“I think it feels a little bit like when traditional markets turned electronic in the ’90s, when people were able to, like, start their own exchange in their backyard, and those over time congealed into the current modern trading ecosystem,” Chitra said. “I think [DeFi] will converge to a happy medium that replaces a lot of traditional investment banking functions.”

Other large operations might need to get in soon or miss out on an unusual moment.

“When I started Compound there was like three things that would call themselves DeFi projects,” Leshner said. “This is the lightspeed era of DeFi, where one week feels like one year. The pace of people trying new things is the highest it’s ever been.”  

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In a major operation on Tuesday, French police arrested 29 people suspected of funding Islamist extremists in Syria using cryptocurrency.

• As reported by ABC News on Wednesday, the operation was an attempt to crack a complex scheme of terrorist funding said to have been masterminded by two French extremists who have been residing in northwestern Syria and have still not been apprehended.
• The 29 people arrested for questioning from across France are suspected of funding terrorist activities as part of an elaborate financing network.
• Two of the 29 are suspected of being key in the cyber-financing system and for providing logistical aid to keep the network – active since last year – running.
• The network was discovered by Tracfin, a French economy ministry that tracks fiscal fraud, terror financing and money laundering.
• Hundreds of thousands of euros are suspected to have been supplied through the network benefiting members of al-Qaida and the Islamic State group still holding out in the region.
• According to ABC’s report, the network members in France purchased cryptocurrency coupons and transferred the details by secure messaging to jihadis in Syria.
• The French prosecutor’s office detailed that a score of people in France would regularly buy the coupons worth between €10 to €150 euros (US$11 to $165), which were credited to accounts opened by jihadis abroad and then cashed out on an exchange platform.
• France initiated its investigation in January when Tracfin detected the Syrian network.

See also: US Woman Gets 13 Years in Jail After Funding ISIS With Cryptocurrency

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