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CoinDesk Crypto

Christie’s to Auction Bitcoin-Inspired Artwork, Associated Non-Fungible Token

CoinDesk Crypto
6 years ago

Part of an art project that combines 40 paintings carrying a transcription of the code behind the Bitcoin blockchain is set to go under the hammer at Christie’s New York. 

According to a press statement, the sale for 20 such paintings in the project will kick off at Christie’s in New York City through an auction for the artwork “Block 21” which is slated to take place on Oct. 7. 

  • Created by the Robert Alice project, the first half of the paintings (Blocks 0 to 20) were privately offered to collectors and are currently held by some prominent names in the blockchain world including Binance CEO Changpeng Zhao, Bloq Chairman Matthew Roszak, Coinscrum founder Paul Gordon and others.
  • The project was started by London-based artist Benjamin Gentilli to promote blockchain culture in the visual arts. The project and was created solely by Gentilli over a three-year period, according to the statement.
  • The artwork to be auctioned at Christie’s on Oct. 7 will also be put on display in the auction house’s galleries in New York between Oct. 1 and Oct. 7. The firm’s statement also said that “Block 21” will be offered for sale at an estimated price ranging between $12,000 to $18,000. 
  • The auctioned artwork is also associated with an Ethereum-based non-fungible token (NFT), which will serve both as a way to prove authenticity and be a digital representation of the physical painting. “The NFT will be hosted on Ethereum, drawing links between Bitcoin’s codebase as the originator and ground zero for the rest of the ecosystem,” Gentilli said in an email.
  • Said Vivian Brodie, a contemporary art specialist at the auction house: “This is Christie’s first time presenting a work that explores crypto culture at auction and, as ever, we are very excited to welcome new audiences and collecting communities across the globe to Christie’s.”

Read more: As Museums Go Dark, Crypto Art Finds Its Frame

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Robinhood Raises Cool $660M in Extended Funding Round

CoinDesk Crypto
6 years ago

Unicorn trading app Robinhood has taken over $600 million in an extended funding round as it rides the summer’s retail trading wave.

  • Reuters reported Wednesday that Robinhood had raised a total of $660 million in its latest Series G round.
  • The trading app, which lists some cryptocurrencies, took commits from existing investors including Andreessen Horowitz, Sequoia, Ribbit Capital, 9Yards Capital, and D1 Capital Partners.
  • The round had originally raised $460 million, but was extended when D1 Capital offered to invest a further $200 million.
  • That last-minute commit has taken Robinhood’s valuation upwards of $11.7 billion, a spokesperson told Reuters.
  • The funding will be used to support core products and roll out a cash management and recurring investment feature.
  • Robinhood said it will also improve its customer experience after a year with a number of outages – the latest being earlier this month – that have rendered the app temporarily unusable.
  • Retail-orientated platforms like Robinhood have enjoyed a surge of usage during the pandemic as people working from home have piled into stocks betting on a quick market recovery.
  • Some have accused Robinhood of failing to protect its customers by offering complex products to amateurs.
  • A 20-year-old student committed suicide in June after thinking he had got himself into more than $700,000 worth of debt from trading sophisticated options.
  • It later transpired the negative balance was a temporary blip before the contract executed.
  • Still, Wednesday’s raise shows finance apps are thriving as the next generation of unicorns.
  • Earlier this year, digital bank Revolut raised $500 million in a Series D, taking its total valuation up to $5.5 billion.

See also: Robinhood May Face $10M SEC Fine Over Disclosure Failures

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Bitcoin Market Weakening After Macro-Based Sell-Off, On-Chain Data Suggests

CoinDesk Crypto
6 years ago

Key bitcoin (BTC) on-chain metrics have flipped bearish this week, suggesting the top cryptocurrency by market cap may extend its recent price losses in the short term.

  • On Tuesday, the net inflow of bitcoin to exchanges (measured by the total change in exchange balances) was 36,800 BTC – the biggest single-day rise since the markets crash on March 13, according to data source Chainalysis.
  • “Since Sept. 20, the net daily inflow of bitcoins to exchanges have been increasing and trade intensity has been declining,” Philip Gradwell, an economist at Chainalysis, told CoinDesk.
  • This, he said, “indicates a weakening market.”
  • The uptick in net inflows represents an increase in selling pressure, since investors typically move coins from their wallets to exchanges when they see a possible need to liquidate their holdings.
  • Further, bitcoin’s trade intensity, which measures the number of times an inflowing coin is traded, fell to a one-year low of 1.75 on Tuesday.
  • That’s a sign there were not enough buyers to absorb the spiking inflow of coins.
  • Trade intensity has declined from 4.93 to 1.75 in the last three days.
  • “There is a lot of inventory building on exchanges and fewer buyers willing to trade. These conditions tend to lead to price declines,” Gradwell said.
Long-term bull bias intact
  • Bitcoin fell by over 4.5% on Monday as investors bought the safe-haven U.S. dollar, but sold equities, gold and other fiat currencies on renewed coronavirus concerns.
  • The drop set the stage for a continuation of the pullback from August highs above $12,400, according to the technical charts.
  • Immediate supports are seen at $10,000 and $9,868 (Sept. 8 low).
  • However, while bitcoin may suffer deeper declines in the short-term, the overall bias remains bullish.
  • “We are still above $10,000, only the third time bitcoin has maintained this price level for multiple weeks, and long-term investors are buying bitcoin in increasing amounts,” Gradwell noted.
  • The options market is also showing bullish bias on the longer time frames.
  • The three- and six-month put-call skews remain below zero, a sign that bullish call options are drawing higher demand or prices compared to bearish put options.
  • At press time, bitcoin is trading near $10,477, up slightly on the day, according to CoinDesk’s Bitcoin Price Index.

Also read: Bitcoin Traders Say Options Market Understates Likelihood of Chaotic US Election

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Digital Chamber Adds Mulvaney to Board of Advisors; Visa, Goldman Join Executive Committee

CoinDesk Crypto
6 years ago

The Chamber of Digital Commerce, a blockchain advocacy group based in Washington, D.C., announced Wednesday that former acting White House chief of staff Mick Mulvaney has joined the group’s board of advisors.

In a press statement emailed to CoinDesk, the blockchain advocacy group also said Visa, Goldman Sachs and Six Digital Exchange (SDX) have joined the group as executive committee members. 

  • In the statement, the advocacy group’s founder, Perianne Boring, said that diverse leadership with experience in both the public and private sectors was needed to assure the future of blockchain technology in the United States.
  • Mulvaney, a former member of the U.S. House of Representatives, served as the acting White House chief of staff between December 2018 and March 2020. He was later appointed as the U.S. Special Envoy for Northern Ireland in May. 
  • “His experience as a legislator is very very valuable because he can help us navigate Congress, which is a very complicated organism to work with,” said Boring, speaking of Mulvaney. She also said that having served as head of the Consumer Financial Protection Bureau, Mulvaney would also help the chamber understand how regulators could be looking at such technology.
  • “I believe U.S. advancement of blockchain development and policy is crucial to our continued success as a global leader in technological evolution,” Mulvaney said in the statement.

Read more: Ex-CFTC Chair ‘Crypto Dad’ Giancarlo Joins Digital Chamber Trade Group

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Data Site DeFi Pulse Fixes Bug, Says Value Locked Actually Hit $13B Last Week

CoinDesk Crypto
6 years ago

The go-to analytics site for the decentralized finance (DeFi) space has admitted a bug meant it had misreported a crucial metric showing value held on DeFi protocols.

  • DeFi Pulse said on Twitter late Tuesday night that it had identified and fixed a “previously undetected issue.”
  • Although the analytics site didn’t go into specifics into what the issue was, it said it had “backfilled historical data” and that total value locked (TVL) in DeFi had actually exceeded a record $13.2 billion on September 18.
  • Founded in 2019, DeFi Pulse is the primary data site for the decentralized finance space.
  • Monthly web traffic has surged from 95,000 in May to well over 650,000 by August, according to SimilarWeb.
  • “Due to the importance of this milestone to our community, we’re thoroughly reviewing the backfilled data (i.e. crossing $13B TVL) in order to ensure it is 100% accurate,” DeFi Pulse said in a follow-up tweet.
  • TVL represents the dollar amount of tokens locked in protocols and is one of the most popular metrics for assessing the size and popularity of the DeFi space.
  • The past week saw a precipitous drop in TVL on DeFi Pulse, falling from the all-time high figure on September 18 to just above $6 billion earlier this week.
  • Still, Tuesday’s decision is a substantial edit. Archived versions of DeFi Pulse from September 18 show TVL at $9.1 billion – $4 billion below the revised figure.
  • Since the start of 2020, TVL has increased from roughly $675 million to $8.3 billion at press time.
  • CoinDesk reached out to DeFi Pulse for more detail on the undetected issue, but hadn’t received a response by press time.

See also: DeFi Angels, VC Firms Back $2M Round for Data Provider Dune Analytics

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DeFi Angels, VC Firms Back $2M Round for Data Provider Dune Analytics

CoinDesk Crypto
6 years ago

Ethereum data firm Dune Analytics, which has stood out from the pack for its focus on decentralized finance (DeFi) projects, has raised $2 million from a mix of seasoned crypto investors and DeFi angels.

Announced Wednesday, the seed round was led by Dragonfly Capital and included Multicoin Capital, Coinbase Ventures and Digital Currency Group (the owner of CoinDesk). 

The list of angel investors in the round included the likes of Compound’s Calvin Liu, Matteo Leibowitz of Uniswap and Aave founder Stani Kulechov. Yearn creator Andre Cronje, who also participated in the round via a non-dilutive grant, said for the record that “Dune has been a lifesaver.” 

Related: Data Site DeFi Pulse Fixes Bug, Says Value Locked Actually Hit $13B Last Week

Fredrik Haga, Dune Analytics CEO and co-founder, said Cronje of Yearn didn’t want a stake, but simply wanted to support the project. “That was pretty amazing,” Haga said. “I think that type of gratitude and support with no strings attached is amazing. I think you wouldn’t find that in any other industry.”

The Dune Analytics team, based in Oslo, Norway, attributed its success to being open and community-driven. 

“It’s kind of like a GitHub-type of product where you have collaboration built-in, but it also has more of an end-to-end product experience where you can create charts and dashboards,” Haga said of his firm’s flagship offering. “We give people access to the whole dataset and they can build on each other and instantly share what they’re doing. I think that offers powerful insights and details into how these systems operate.”

Armed with the new funding, Dune will be making the service easier for users to interact with each other and lowering the bar a little to engage more with non-technical users. 

Related: Crypto Hedge Fund Looks for $50M to Buy DeFi Tokens Amid Market Pullback

“There’s so much low-hanging fruit that we can grab, it’s great to have the bandwidth to do it,” Haga said.

In addition, the two-man team of Haga and co-founder Mats Julian Olsen will be hiring more staffers across Europe to work remotely and help deal with the thousands of analytics calls being fielded and a 10% growth in visits to the website each week.

“It’s been quite crazy,” Haga said of DeFi’s accelerating insanity. “We try to catch enough sleep but otherwise it’s pretty much around the clock.”

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Crypto Hedge Fund Looks for $50M to Buy DeFi Tokens Amid Market Pullback

CoinDesk Crypto
6 years ago

The cryptocurrency money manager Panxora seeks to raise up to $50 million for a new hedge fund to buy digital tokens associated with the fast-growing decentralized finance (DeFi) sector. 

DeFi is a segment of the blockchain industry consisting of automated lending and trading platforms that aim eventually to displace banks and Wall Street firms. But in a sign of just how fast-moving and fickle digital-asset markets can be, the new fundraising effort is getting underway just as prices are tumbling for some of the leading DeFi projects, including Yearn.Finance and Aave.

“This has got the potential to really change the way finance is carried out,” Panxora CEO Gavin Smith said in an interview. 

Related: Data Site DeFi Pulse Fixes Bug, Says Value Locked Actually Hit $13B Last Week

DeFi projects, often referred to as protocols and mostly built atop the Ethereum blockchain, have soared in popularity this year. It has been fueled by the “yield farming” craze that encourages crypto traders to sock digital assets into the trading and lending systems in pursuit of high interest rates, token rewards and fast gains. Dollar-linked tokens known as stablecoins can fetch annualized rates up to 20% through Yearn.Finance, versus 0.01% for a savings account with JPMorgan Chase, the largest U.S. bank. 

Collateral locked into DeFi projects surged to $13 billion earlier this month, according to DeFi Pulse, a 20-fold increase since the start of the year. Big cryptocurrency exchanges like Binance and Coinbase have rushed to cash in on the trend, listing DeFi tokens while acknowledging that a growing share of market volumes might eventually migrate to decentralized trading platforms. 

Read more: Coinbase Pro Lists Uniswap’s New Token Just Hours After Launch

But just in the past week, the trend has reversed; total collateral in the systems has declined to about $9.5 billion. And as prices tumbled for bitcoin (BTC), the largest cryptocurrency, and ether (ETH), the native token of the Ethereum blockchain, DeFi-affiliated tokens fell even harder. 

Related: DeFi Angels, VC Firms Back $2M Round for Data Provider Dune Analytics

Aave, a decentralized lender, saw its LEND tokens fall by 12% during the seven days through Tuesday, according to Messari, a cryptocurrency data firm. OMG’s OMG tokens have plummeted 54%, while Yearn.Finance’s YFI tokens are down 29%.

It’s been “an absolute bloodbath,” Messari analysts wrote Tuesday in their daily newsletter. “DeFi’s casino summer could be coming to an end.”

Cryptocurrency analysts say DeFi systems are likely to grow over the long term, though short-term risks are high in the nascent market, and many of the digital tokens are so new that they can be difficult or even impossible to value using anything resembling traditional financial analysis.  

Read more: Supply of Tokenized Bitcoin on Ethereum Now Tops $1.1B: Here’s Why

Chainlink, a so-called blockchain “oracle” that supplies price feeds to decentralized protocols, is the top-performing digital asset this year among those with a market value of at least $1 billion, climbing more than fourfold in 2020. And that’s after a 45% decline just this month.

Panxora’s new hedge fund, based in the Cayman Islands and scheduled to start trading on Nov. 2, will primarily buy tokens listed on big centralized cryptocurrency exchanges rather than from the roster of decentralized, automated exchanges like assembled by DeFi developers.  

Smith, a former metals-pricing analyst for the Singaporean commodities-trading firm Trafigura, says that’s primarily because few if any decentralized exchanges can guarantee sufficient compliance with anti-money-laundering rules, and also because a token listing from an exchange theoretically implies some level of vetting.   

“We have to offer it as a conventional hedge fund that invests in these protocols,” Smith said.

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Messaging Giant LINE Launches Token Reward Program

CoinDesk Crypto
6 years ago

LINE, which has more than 84 million users in Japan, announced Friday it has started a rewards program where it gives out its token LINK to those that use its digital services.

  • Users will be rewarded with LINK by connecting their accounts to its three mobile apps, including LINE Pay for remittance and settlement, LINE Securities for personal investment and LINE Score for credit evaluation, CoinDesk Japan reported on Sept. 19.
  • The reward program is part of LINE’s effort to promote its blockchain initiative. In 2018, the company created an in-house lab to develop decentralized applications (dapps) based on its patented LINE Blockchain.
  • It launched its digital asset wallet and a development platform for dapp developers in August.
  • The program started on Sept. 18. Under the plan, 10,000 users who have LINE family credit cards issued by LINE Pay will receive 2,000 yen ($19.6) worth of LINK tokens, while LINE Securities users will get up to 500 yen ($4.76) worth of tokens by opening an account and completing a questionnaire. LINE Securities was started in collaboration with Nomura Holdings, one of the largest stock brokerages in Japan. 
  • Users can convert the tokens into fiat currency by the LINE’s crypto asset trading service Bitmax, where they need to open an account to process such transactions. 
  • The company aims to encourage its users to participate in the token economy in which more people would trade or use the LINK token as a way of payment and increase its utility.
  • Other messaging app companies are also developing their own native tokens to leverage their large user bases. Kik and Telegram have also made efforts to launch tokens on a blockchain.
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Origin Debuts OUSD, a Stablecoin That Works Like a Savings Account

CoinDesk Crypto
6 years ago

Peer-to-peer commerce company Origin is announcing Origin Dollars, or OUSD, a stablecoin whose reserves leverage decentralized finance (DeFi) so that balances grow wherever it resides, no staking or account required.

“One thing we’ve all seen in DeFi is a much smaller audience gets it. The barrier to entry is much higher,” Matthew Liu, Origin’s cofounder, told CoinDesk in a phone call. “We want to make DeFi much more accessible.”

OUSD will be backed one-for-one by the three big stablecoins on Ethereum: Tether’s USDT, Circle and Coinbase’s USDC and MakerDAO’s DAI. Users can mint OUSD by depositing any of those three into Origin’s new app, or they can just buy it on Uniswap. Either way, the OUSD will just start growing in their wallet, no further action needed.

Related: Supply of Tokenized Bitcoin on Ethereum Now Tops $1.1B: Here’s Why

“Multiple times a day you should be able to see your balance increase,” Origin co-founder Josh Fraser told CoinDesk.

On the backend, Origin will take deposits and start yield farming them in different protocols, starting with the DeFi money market Compound. Returns will be driven back into OUSD, minting more OUSD that will be distributed proportionally to all the wallets that have it. The company will be able to further boost yield by taking any tokens earned through liquidity mining, converting it to one of the three stablecoins and supplying that to the pool as well.

As of this writing, those three coins have an annual yield on Compound of between 0.5% and just under 3%, though that does not factor in liquidity mining, which can be tough to calculate.

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

Related: Bitcoin-on-Ethereum Token tBTC Relaunches Following Buggy Debut in May

To start, the team expects returns to be in the single digits as its Compound deposits earn both yield and fresh COMP; other pools will be added as OUSD grows.

Origin’s three initial strategies are yields on deposits for lending, fees in automated market makers and growth-token mining.

To get OUSD started, “as a company, we’ll put in probably a few hundred thousand,” Fraser said. “As time passes and we feel more confident we’ll put in millions of dollars.” 

He said the firm is also talking to different entities about adding to the pool and minting additional OUSD.

On-brand OUSD

Origin raised $3 million in a round led by Pantera in 2017 and then sold $6.6 million worth of its OGN token in a sale on Coinlist in 2018. Aimed at disrupting companies it describes as unfairly rent-seeking (such as Airbnb), OGN is used to incentivize people to switch, fully participate in the platform and entice others to join.

So why is a company designed around making it easy for people to set up shops where buyers and sellers interact directly creating a new stablecoin?

Liu argued that OUSD fits into Origin’s larger vision of facilitating peer-to-peer commerce, by removing any friction between earning and spending. OUSD will also be integrated into all the stores in Origin’s DShop, its ecommerce platform.

Read more: Origin Token to Raise $6 Million in CoinList Investor ICO

As noted in the OUSD announcement post, “For merchants that have traditionally been skeptical of receiving cryptocurrency payments, being able to accept a yield-bearing instrument that beats traditional savings accounts is a powerful motivator.”

It should be acknowleged that there is risk here. First, the smart contracts have not been formally audited yet, as mentioned in the announcement post, but one is planned. 

If Origin ever invested in a pool that somehow went south, such as through a hack or a fatal error, then it would have to remove OUSD from circulation, but that’s why it’s starting with Compound and expanding cautiously.

Liu is confident that OUSD should get to double-digit yields soon, the firm just needs to grow the pool so it can cordon off some of the “more exotic strategies” into smaller pools, he explained. Origin’s yield strategies will soon expand from Compound to projects like Aave and dYdX, moving on to Balancer and others shortly thereafter, much as Yearn.Finance was built early on to find the best mix of places to store a set of stablecoins.

But OUSD is also quite different from Yearn. “It’s never going to be the highest yield available because we are targeting more around its safety,” Liu said.

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

CoinDesk Crypto
6 years ago

Bitcoin stuck around $10,400 for most of Tuesday. Meanwhile, ether holders are increasingly choosing smart contracts to park the cryptocurrency.

  • Bitcoin (BTC) trading around $10,494 as of 20:00 UTC (4 p.m. EDT). Gaining 0.10% over the previous 24 hours.
  • Bitcoin’s 24-hour range: $10,357-$10,532
  • BTC above its 10-day moving average but below the 50-day, a sideways signal for market technicians.

After bitcoin prices fell sharply Monday, the world’s oldest cryptocurrency stayed near the $10,400 mark on spot exchanges such as Coinbase Tuesday. 

“Bitcoin remains in pullback-mode after having seen an initial reaction to short-term oversold conditions that left strong support intact in the $10,000 area,” said Katie Stockton, an analyst for Fairlead Strategies. “The loss of momentum has been significant, but overbought conditions are no longer an issue and the intermediate-term uptrend that began in March still has a hold.”

Related: 0x, Kraken and Stellar Awarded Board Seats at Top Crypto Lobbying Association

Read More: Equity Markets Turmoil Could Push Bitcoin Below $10K, Say Analysts

Momentum has certainly slowed down since Monday, when massive selling and $34 million in derivatives liquidations on BitMEX led to a $507 million volume day on major spot exchanges. Tuesday did not even approach that level, and was at $210 million in spot volume as of 4 p.m. ET.

“We are at 50% of all-time-highs, which is a good area for future consolidation, but the perpetual funding rate for BTC is showing negative,” said Jason Lau, chief operating officer for cryptocurrency exchange OKCoin. 

Like futures contracts, perpetual swaps allow traders to long or short a position, taking advantage of movements in a cryptocurrency’s price. The difference is there is no expiration date in the swap, hence the term “perpetual” and the requirement of a funding rate, which rolls over between long and short traders at eight hour increments. Essentially, short traders are paying those going long for exposure when the funding rate is negative. 

Related: Supply of Tokenized Bitcoin on Ethereum Now Tops $1.1B: Here’s Why

“This signals there is a lot of indecision in the BTC market,” added Lau. “We could continue to see short term sell-offs and an overall more bearish outlook in the coming months.”

Michael Gord, CEO of cryptocurrency brokerage firm Global Digital Assets, has seen a shift in sentiment heading into a fourth quarter full of precariousness. “I think we’ve got to be close to the bottom,” Gord said. “Leading up to the U.S. election and debates, more institutional holders of bitcoin are preferring to hold cash and determine whether or not to re-enter afterwards.”

Ether supply in smart contracts at 2020 high

Ether (ETH), the second largest cryptocurrency by market capitalization, was down Tuesday trading around $343 and slipping 0.44%% in 24 hours as of 20:00 UTC (4:00 p.m. EDT). 

The amount of ether parked in smart contracts is at its highest level since 2016, when investors plowed into The DAO, an early decentralized finance (DeFi) precursor. The percentage of ether supply in smart contracts is at 15.96%, the highest level since July 25 2016.

Brian Mosoff, CEO of investment firm Ether Capital, says this metric proves Ethereum’s ability to offer DeFi capabilities which its cryptocurrency competition simply does not provide. 

Read More: What Is DeFi?

“The ETH in various DeFi contracts is probably an indicator that ETH holders want to continue to hold the asset but are looking for ways to generate yield,” said Mosoff. “This shows how ETH acts as a productive asset, contrasted with bitcoin, where it may be a great store of value but it lacks the productive yield layer that ETH does.”

Other markets

Digital assets on the CoinDesk 20 are mixed Tuesday, mostly in the green. Notable winners as of 20:00 UTC (4:00 p.m. EDT):

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

Read More: Uniswap Users Say Uniting Can Strengthen UNI

Equities:

Commodities:

  • Oil was flat, in the red 0.02%. Price per barrel of West Texas Intermediate crude: $39.76.
  • Gold was in the red 0.52% and at $1,902 as of press time.

Treasurys:

  • U.S. Treasury bond yields were mixed Tuesday. Yields, which move in the opposite direction as price, fell most on the 2-year, in the red 1.4%.
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0x, Kraken and Stellar Awarded Board Seats at Top Crypto Lobbying Association

CoinDesk Crypto
6 years ago

Cryptocurrency industry advocacy group the Blockchain Association bolstered its board Tuesday with members from 0x, the Stellar Development Foundation and Kraken.

  • Decentralized finance and regulatory precedence are some hallmarks of the association’s new board members. 0x powers a decentralized exchange, Stellar maintains the Stellar ecosystem and Kraken is a crypto exchange that also just became a chartered U.S. crypto bank.
  • “With DeFi being such a trend these days we wanted to make sure we had representation” on the board, Association Executive Director Kristin Smith told CoinDesk.
  • Stellar’s General Counsel Candace Kelly, who has experience in the law enforcement community, Kraken’s Chief Legal Officer Marco Santori and 0x’s Senior Counsel Jason Somensatto will represent their respective organizations on the association’s board, which was expanded from nine seats to 10.
  • The two openings being filled were created in the last three months. The first vacancy came about when a seat held by a representative of custody firm Anchorage left that company. The second was created when Coinbase left the association and the board in protest of Binance U.S. being awarded membership in the organization.

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Supply of Tokenized Bitcoin on Ethereum Now Tops $1.1B: Here’s Why

CoinDesk Crypto
6 years ago

To the surprise of many, bitcoin (BTC) has been a breakout star in Ethereum’s decentralized finance (DeFi) moment. Taking the form of wrapped or tokenized bitcoin, the digital asset takes the best of both blockchains – bitcoin’s price value and brand along with Ethereum’s programmability – into one highly in-demand token. 

Last week alone, the supply of BitGo’s wrapped bitcoins (WBTC) topped 76,000 after setting an all-time record of nearly 21,000 wrapped bitcoins minted within one week. 

The week before held the previous record of over 12,200 tokens minted in a single week, according to Dune Analytics.

Related: Bitcoin Traders Say Options Market Understates Likelihood of Chaotic US Election

Overall, investors have made tokenized bitcoin one of the largest assets on DeFi with nearly 107,000 BTC worth some $1.1 billion minted from seven issuers, mostly lured in by high rates of return on lending when compared to other options such as BlockFi. 

Why use tokenized bitcoin?

What bitcoin on Ethereum does is simple: It provides liquidity for growing decentralized exchanges (DEX), such as Uniswap. Bitcoin’s current market cap is five times larger than the second largest cryptocurrency, ether (ETH), according to The CoinDesk 20. That money can be put to use making more money.

Tokenized bitcoin allows investors to bring large amounts of value over to the Ethereum network and its young DEX market in a few clicks. 

DeFi is considered vastly immature when compared to traditional or centralized exchange (CEX) markets. This can be seen in the large price spreads between orders on exchange books between different DeFi markets. 

Related: Bitcoin-on-Ethereum Token tBTC Relaunches Following Buggy Debut in May

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

Price differences on markets can be exploited by traders in what is called arbitrage opportunities.

Wrapped bitcoin is often the asset of choice for investors seeking arbitrage. Bitcoin packs a large punch in terms of price value. More money on DeFi trading platforms makes the markets themselves stronger as additional buying and selling options are presented. 

But tokenizing bitcoin isn’t without risks, particularly software risk. Investors who want exposure to bitcoin’s liquidity pay higher interest rates to cover the risk of losing an asset in addition to getting exposure to the first cryptocurrencies liquidity.

How this works in practice has taken on a few different forms.

Security of bitcoin investments

Different tokenizing models represent different security assumptions for investor funds.

For tokenized bitcoin, security boils down to the type of custodianship and if the investment is collateralized. Three major models exist: a centralized firm like BitGo; a smart contract system with collateral, such as tBTC; or a complete, synthetic-asset backing employed by sBTC.

BitGo’s Wrapped Bitcoin (WBTC) is the breakout star of the last few months with some $808.5 million in circulation, according to Etherscan.

It’s centralized, meaning deposited bitcoin is held by BitGo. Parties wanting WBTC give BTC to BitGo and then receive an ERC-20 token-equivalent of BTC in return. That ERC-20 can then be sold on secondary markets or plugged into a DeFi application to earn yield.

Keep Network’s tBTC, which launched Tuesday, is similar to WBTC but replaces the centralized BitGo model with a network of nodes, wallets and smart contracts. This network aims at bringing more decentralization to BitGo’s process by allowing both parties – the bitcoin depositor and custodian – to interact trustlessly through software.

Read more: Bitcoin-on-Ethereum Token tBTC Relaunches Following Buggy Debut in May

A few features make this possible, such as the bitcoin depositors being able to choose who holds their bitcoin and a 150% security bond (held in ETH) pledged by the custodians on the off-chance they run to the hills with the deposits.

Ren’s rBTC that makes up about 20% of all wrapped bitcoin in the wild, according to Dune Analytics. It works in a similar manner to tBTC’s node network by having the Ren Virtual Machine, RenVM, act as a trustless agent between the Bitcoin and Ethereum blockchains.

Lastly, sBTC is an ERC-20 version of bitcoin. But this time it’s backed by another token, the Synthetix Network Token (SNX). Each sBTC is not backed by BTC, but 800% of a BTC’s value in SNX, the token for minting synthetic assets (Syns) on the Synthetix DEX.

An example of how wrapped bitcoin works

Take a recent transaction from Alameda Research (sister firm of the trading platform FTX).

FTX allows users to swap between BTC and WBTC. When users swap bitcoin for wrapped bitcoin, FTX pulls from Alameda’s pool of BTC/WBTC. Users may send BTC to FTX (Alameda) and receive WBTC. When Alameda’s pool of WBTC is exhausted, they replenish it directly with BitGo.

Read more: BitGo Weighs Building a Sidechain for WBTC as Ethereum Fees Climb

Alameda is a merchant and part of the WBTC decentralized autonomous organization (DAO), meaning it can initiate mints for new WBTC using BTC. They send BTC to BitGo and create a minting request on the Ethereum chain as a merchant. 

BitGo validates the BTC has been deposited to a preminted address and approves a mint of the number of WBTC equal to Alameda’s request. The WBTC can then be used on FTX or swapped with another token atomically (meaning via a peer-to-peer exchange) or even within a DeFi market.

To redeem, the process is reversed: The buyer will send the WBTC back to the merchant who will then provably burn the tokens. 

The future of tokenized assets

The wild success of BitGo’s WBTC and WETH (wrapped ether) may lead to more constructions of other coin holdings. Ben Chan, CTO at WBTC co-creator BitGo, told Coindesk in August that the firm was looking at wrapping other cryptocurrencies.

WBTC’s 2020 success has largely been thanks to DeFi, he said.

“What we’ve seen this year is that WBTC traction has been largely thanks to the highly composable DeFi industry,” Chan said.

Zack Voell contributed reporting.

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Bitcoin Traders Say Options Market Understates Likelihood of Chaotic US Election

CoinDesk Crypto
6 years ago

The November U.S. presidential election could be contentious, yet the bitcoin market is pricing little event risk. Analysts, however, warn against reading too much into the complacency suggested by the volatility metrics. 

Bitcoin’s three-month implied volatility, which captures the Nov. 3 election, fell to a two-month low of 60% (in annualized terms) over the weekend, having peaked at 80% in August, according to data source Skew. Implied volatility indicates the market’s expectation of how volatile an asset will be over a specific period. 

The one- and six-month implied volatility metrics have also come off sharply over the past few weeks. 

Related: Supply of Tokenized Bitcoin on Ethereum Now Tops $1.1B: Here’s Why

The declining price volatility expectations in the bitcoin market cut against growing fears in traditional markets that the U.S. election’s outcome may not be decided for weeks. Traditional markets are pricing a pickup in the S&P 500 volatility on election day and expect it to remain elevated in the event’s aftermath. 

“Implied volatility jumps around election day, pricing an S&P 500 move of nearly 3%, and the term structure remains elevated well into early 2021,” analysts at investment banking giant Goldman Sachs recently said. 

One possible reason for the decline in bitcoin’s volatility expectations ahead of the U.S. elections could be the leading cryptocurrency’s status as a global asset, said Richard Rosenblum, head of trading at GSR. That makes it less sensitive to country-specific events. 

“The U.S. elections will have relatively less impact on bitcoin compared to the U.S. equities,” said Richard Rosenblum, head of trading at GSR. 

Implied volatility distorted by option selling

Related: Bitcoin-on-Ethereum Token tBTC Relaunches Following Buggy Debut in May

Crypto traders have not been buying the longer duration hedges (puts and calls) that would push implied volatility higher. In fact, it seems the opposite has happened recently. “In bitcoin, there has been more call selling from overwriting strategies,” Rosenblum said. 

Call overwriting involves selling a call option against a long position in the spot market, where the strike price of the call option is typically higher than the current spot price of the asset. The premium received by selling insurance (or call) against a bullish move is the trader’s additional income. The risk is that traders could face losses in the event of a sell-off.

Selling options puts downward pressure on the implied volatility, and traders have recently had a strong incentive to sell options and collect premiums. 

“Realized volatility has declined, and traders holding long option positions have been bleeding. And to stop the bleeding, the only option is to sell,” according to a tweet Monday by user @JSterz, self-identified as a cryptocurrency trader who buys and sells bitcoin options.

Bitcoin’s 10-day realized volatility, a measure of actual movement that has occurred in the past, recently collapsed from 87% to 28%, as per data provided by Skew. That’s because bitcoin has been restricted mostly to a range of $10,000 to $11,000 over the past two weeks.

A low-volatility price consolidation erodes options’ value. As such, big traders who took long positions following Sept. 4’s double-digit price drop may have sold options to recover losses. 

In other words, the implied volatility looks to have been distorted by hedging activity and doesn’t give an accurate picture of what the market really expects with price volatility. 

Moreover, despite the explosive growth in derivatives this year, the size of the bitcoin options market is still quite small. On Monday, Deribit and other exchanges traded roughly $180 million worth of options contracts. That’s just 0.8% of the spot market volume of $21.6 billion. 

Activity concentrated at the front-month contracts

The activity in bitcoin’s options market is primarily concentrated in front-month (September expiry) contracts. 

Over 87,000 options worth more than $1 billion are set to expire this week. The second-highest open interest (open positions) of 32,600 contracts is seen in December expiry options. 

With so much positioning centered around the front end, the longer-duration implied volatility metrics again look unreliable. Denis Vinokourov, head of research at the London-based prime brokerage Bequant, expects re-pricing the U.S. election risk to happen following this week’s options expiry. 

Spike in volatility does not imply a price drop

A re-pricing of event risk may happen next week, said Vinokourov. Still, traders are warned against interpreting a potential spike in implied volatility as an advance indicator of an impending price drop as it often does with, say, the Cboe Volatility Index (VIX) and the S&P 500. That’s because, historically, bitcoins’ implied volatility has risen during both uptrends and downtrends. 

The metric rose from 50% to 130% during the second quarter of 2019, when bitcoin rallied from $4,000 to $13,880. Meanwhile, a more significant surge from 55% to 184% was observed during the March crash. 

Since that massive sell-off in March, the cryptocurrency has matured as a macro asset and could continue to track volatility in the stock markets and U.S. dollar in the run-up to and post U.S. elections. 

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CoinDesk

Blockchain Bites: OCC’s Stablecoin Guidance, EU’s Digital Euro Plans, Chamath’s Bitcoin

CoinDesk Crypto
6 years ago

The OCC published guidance clarifying that federally-regulated banks can work with stablecoin issuers, the ECB thinks stablecoin is a “misleading” term and a group of banking veterans has spun up a new crypto fund. 

Top shelf

Bitcoin funds
Banking veterans who have steered divisions at HSBC, Barclays, Citigroup and Merrill Lynch in the Asia-Pacific region are ditching traditional finance to invest in cryptocurrencies. Their new crypto fund, Liquibit Capital, will manage assets worth $50 million and will arbitrage a portfolio of bitcoin, bitcoin cash, ether, litecoin and eos, custodied with Fireblocks, with an eye to expand into derivatives trading. Elsewhere, tech legend and part-owner of the Golden State Warriors, Chamath Palihapitiya’s Social Capital invested in bitcoin (BTC) in 2013, when it was trading around $10. Palihapitiya disclosed the holdings in an investment call as he mulls taking the fund public. The exact amount of bitcoin Social Capital has bought and sold is unknown.

National security? 
The United States Space Force (USSF), the newest branch of the U.S. military, is looking to blockchain to render its computer systems, on earth and in space, unhackable. Xage Security, which is currently working with the U.S. Air Force, won a contract for a data-encryption system. Meanwhile, the Central Intelligence Agency (CIA) launched a new R&D laboratory on Monday to study blockchain technology, along with wireless telecommunications, quantum computing and artificial intelligence.

Related: First Mover: Bitcoin’s Latest Sell-Off Gets Crypto Traders Mulling Election Chaos

MicroStrategy effect
Coming on the heels of publicly-traded MicroStrategy’s multi-million dollar investment into BTC, financial services firm Unchained Capital has released an “advanced business account” for firms that want to hold bitcoin and handle their own private keys. “We have companies that you wouldn’t expect, like your local bakery or your local liquor store that hold bitcoin in treasury,” Parker Lewis, Unchained’s head of business development, told CoinDesk. “They are not Bitcoin-centric businesses, but they hold bitcoin and they hold their own keys; both small and large, like the MicroStrategies of this world.”

UNI unity
A group of anonymous Uniswap users is trying to unite the many small holders of the UNI governance token to deal with potential problems in the automated market maker’s (AMM) governance, CoinDesk’s Muyao Shen reports. The group, seemingly backed by unii.finance, is aiming to issue a community token called UNI Innamorare (or UNII). The idea is to create a faction of UNII token holders to counter the power from the founding team and investors, who still hold an outsized amount of control over the decentralized protocol despite a governance token distribution, the group alleges. “We are all minions in terms of voting power,” according to a pre-launched page by the anonymous group. It is unclear whether the proposal will catch on.

Wright’s move?
The District Court for the Southern District of Florida has denied Craig Wright’s request for summary judgment in a case that involves claims over ownership of about 1.1 million bitcoin (worth over $11 billion). In an order signed on Monday, Judge Beth Bloom at the Florida court denied the self proclaimed inventor of Bitcoin’s motion seeking summary judgment that would have prevented the matter from proceeding to a full trial. According to an order issued by the Florida court on Sept. 4, the trial involving Wright’s bitcoin fortune has now been moved to Jan. 4, 2021. 

Quick bites At stake

Stablecoin junction
European and U.S. financial regulators independently have issued positive statements regarding the viability of fiat-backed digital currencies. 

Related: Blockchain Bites: DeFi’s Dividend, China’s ‘New Battlefield,’ the Big Banks’ ‘Suspicious Activity’

The U.S. Office of the Comptroller of the Currency (OCC) and the Securities and Exchange Commission (SEC) yesterday published official guidance clarifying national banks can provide services to stablecoin issuers in the U.S. 

This is the first instance of federal clarity around stablecoins, referring specifically to tokens backed on a one-to-one basis by fiat currencies rather than their algorithmically derived counterparts, CoinDesk regulatory reporter Nikhilesh De said. 

Acting OCC Comptroller Brian Brookes said that stablecoin services are responsible for “billions of dollars each day” flowing through the financial plumbing. 

The statements are also the first indication that certain stablecoins might not be securities under federal law.

Meanwhile, European Central Bank (ECB) President Christine Lagarde said the supranational bank is looking into the benefits and risks of a bloc-wide digital currency.

Rather than as a replacement for cash, a digital euro would “complement” traditional money and provide an alternative to “private digital currencies” for EU citizens. This, she told the EU Parliament on Monday, would “ensure that sovereign money remains at the core of European payment systems.” 

The comments come a month after Lagarde said Europe is losing ground in payments innovation and signals a continued skeptical line over private “stablecoins” like Libra. 

Elsewhere, ECB officials wrote the term stablecoin is “misleading,” adding the term “should be replaced by a choice of terminology to shift the emphasis away from the issuer’s promise of stability.”

Market intel

Follow the leader
Bitcoin (BTC) is once again taking cues from the stock markets and prices may fall below $10,000 if equities see further sell-off, according to analysts. The top cryptocurrency fell by 4.5% on Monday to register its biggest single-day decline since Sept. 4. That came as global stock markets nursed sharp losses and the safe-haven U.S. dollar gained ground on renewed coronavirus fears and uncertainty over the 2020 U.S. election. “Sustained risk-off in broader equity markets will lead to heavy offers across major cryptocurrencies,” Matthew Dibb, Stack Funds’ co-founder and COO, told CoinDesk. “Bitcoin may revisit September lows [around $9,870].”

Op-ed

Activism
Jeff Dorman, a CoinDesk columnist and chief investment officer at Arca, argues that activist investors can help the digital assets industry mature. “The digital assets ecosystem needs to adopt the best practices of traditional finance. A strong governance system is one element that will help keep companies in this space on track and will hold them accountable,” he writes.

Podcast corner

Banks care?
The FinCEN Files, a leaked cache of more than 2,000 suspicious activity reports (SARs) filed by banks with the U.S .Financial Crimes Enforcement Network, show that banks are happy to file their reports and then keep on banking likely money launderers, NLW argues.

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CoinDesk

Startup Behind Siacoin Storage Platform Raises $3M, Rebrands as Skynet Labs

CoinDesk Crypto
6 years ago

The startup formerly known as Nebulous has raised a $3 million funding round led by Paradigm with participation from Bain Capital Ventures, Bessemer Venture Partners, A.Capital, Collaborative Fund, Dragonfly Capital Partners, Hack VC, INBlockchain, First Star Ventures and others. 

The startup also rebranded, as Skynet Labs, to focus on promoting the namesake application hosting platform, which uses the token-fueled Sia network.

  • Launched in 2014, the Boston-based firm has a staff of 11 and has raised over $9 million to date.
  • CEO David Vorick said there are more than 100 applications and 10 web portals already using Skynet as a decentralized storage alternative, including the popular exchange Uniswap. Skynet launched in February 2020.
  • “It’s just another means of accessing Uniswap, if Infura goes down people can still access the interface,” Vorick said, referencing Ethereum-friendly infrastructure options. “This offers the ability for anyone to run their own portal and get full trustless access to the network. If we turn off all our infrastructure tomorrow, Skynet still exists.”
  • Paradigm partner Dan Robinson said in a press statement he’s keen to see decentralized storage lead to social networking without distinct silos, like YouTube and Twitter, adding, “The project has enabled a growing ecosystem of builders to quickly prototype censorship-resistant applications and interactive websites.”
  • In reference to the Skynet app store that popped up following rumors that TikTok might get delisted from popular app stores, Vorick said, “This is a third-party app that comes from the community. … Quick responses to things like TikTok being banned don’t need to ask us for permission.”
  • This rebrand comes nearly one year after the startup reached a $225,000 settlement with the U.S. Securities and Exchange Commission for an unregistered token sale in 2014. Skynet users now rely on those tokens if they run a full Sia node.

Read more: Sia Network Raises $3.5 Million From Bain Capital to Become Crypto Hulu

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CoinDesk

Bitcoin-on-Ethereum Token tBTC Relaunches Following Buggy Debut in May

CoinDesk Crypto
6 years ago

A decentralized way to copy bitcoin (BTC) over to Ethereum is relaunching today after a smart-contract bug sunk the project in May.

Called tBTC, the Thesis-built protocol was first announced in April, and is now ready for a fresh start. BTC holders who want to use Ethereum but worry about censorship risk with BitGo’s WBTC are invited to deposit BTC and mint TBTC tokens.

Putting bitcoin on Ethereum gives the godfather cryptocurrency access to the yields of decentralized finance (DeFi) and has taken off in earnest since tBTC’s aborted launch. Over $1 billion in bitcoin is now tokenized on Ethereum.

Related: First Mover: Bitcoin’s Latest Sell-Off Gets Crypto Traders Mulling Election Chaos

According to Thesis strategy lead Carolyn Reckhow, tBTC already had $24.21 million staked as of early Tuesday morning ($22.69 million is in KEEP, $1.39 million in ETH and $0.26 million in BTC).

The tBTC protocol works on both the Bitcoin and Ethereum blockchains, with users locking up BTC on Bitcoin so that nodes in the Keep network can mint TBTC, staking 150% of the BTC’s value in ETH. 

The Keep nodes control the multisig that can re-release the BTC if a TBTC token is redeemed. The tBTC protocol has been audited by ConsenSys Diligence and Trail of Bits, Reckhow said. 

For additional security, the smart contract also is posting 1 million KEEP for insurance from Nexus Mutual, which Thesis estimates should be worth 200-1,200 BTC in coverage.

Related: Equity Markets Turmoil Could Push Bitcoin Below $10K, Say Analysts

“A decentralized version of tokenized bitcoin is key to catalyzing the next stage of growth in DeFi,” Scalar Capital’s Linda Xie said in a press release.

Read more: Bug Forces Shutdown of Bitcoin-Backed Ethereum Token tBTC

Supply caps will moderate participation over the first nine weeks of testing in production, starting at 100 BTC and rising to 3,000, until the supply cap is finally removed.

On May 22, following the emergency shutdown of the first version, Thesis announced that tBTC would move to a release candidate cycle. 

The team behind tBTC believes that certain BTC holders would like to access DeFi but are waiting for a trustless path to do so. Another alternative to WBTC is renBTC, which has minted more than 20,000 BTC worth of ERC-20 tokens since launching in May.

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Nasdaq, SEC-Registered Fund Manager to Launch First-Ever Crypto ETF in Bermuda

CoinDesk Crypto
6 years ago

The first exchange-traded fund (ETF) to broadly track the digital asset market has been accepted to list on the Bermuda Stock Exchange (BSX).

  • BSX announced last week the Hashdex Nasdaq Crypto Index ETF had been admitted to list on its trading platform.
  • The ETF is the brainchild of Hashdex, a Brazilian-based fund manager that has been registered with the Securities and Exchange Commission (SEC) since 2018.
  • An ETF is a basket of different assets bundled together and traded as a single traditional instrument. The development of such a product for crypto is considered bullish as it makes the asset class more accessible to mainstream investors.
  • This particular product, which will be denominated in USD, will track an index currently being developed by Nasdaq. Its composition is still under wraps, but CoinDesk understands it will give a broad exposure to the asset class.
  • A total of three million shares are available via private placement at $1,000 apiece. At the time of the initial announcement, 10 shares had been sold.
  • A number of companies have unsuccessfully tried to get the SEC to approve a bitcoin ETF for the U.S.
  • The SEC has expressed concern that a bitcoin ETF remains vulnerable to market manipulation. Most recently, it rejected an application from Wilshire Phoenix in February.
  • Like the neighboring Bahamas, Bermuda has expressed an openness to try digital assets. Earlier this month, the government announced a pilot program for a digital token that could quickly distribute financial aid to citizens.
  • While small compared to either the New York Stock Exchange or the Nasdaq, the BSX says its market cap is just under $300 million.
  • CoinDesk reached out to both Hashdex and BSX for comment but hadn’t had a response at press time.
  • Nasdaq declined to comment.

See also: WisdomTree Proposes ETF With 5% Bitcoin Exposure Despite SEC’s Long-Standing Blockade

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CoinDesk

Facebook’s Libra Co-Founder Morgan Beller Departs to Return to VC

CoinDesk Crypto
6 years ago

Libra digital currency project co-founder Morgan Beller has left Facebook in a pivot back to her venture capital roots.

  • Beller, 27, will become a general partner at early stage startup-focused VC firm NFX, according to TechCrunch.
  • At Facebook, which she joined in 2017, Beller reportedly helmed the social media giant’s blockchain initiatives, working behind the scenes to bring Libra and its Calibra digital wallet (now rebranded as Novi) to life.
  • “Shortly after joining, I realized there was no one focused full-time on blockchain, crypto, etc.” Beller said in an NFX profile. “So I made my full-time job figuring out what Facebook should do, if anything, in that space.”
  • She assisted in talent recruitment, worked alongside David Marcus and pushed forward Facebook’s blockchain initiatives – sometimes alone, according to CNBC.
  • Beller told TechCrunch she caught the “crypto virus” as a partner at VC firm Andreessen Horowitz and brought it with her to Facebook.
  • That bug may now get squashed, however, as NFX currently does not focus on crypto or blockchain even though a handful of its portfolio companies intersect with the space.

Read more: Libra’s Long Road From a Facebook Lab to the Global Stage: A Timeline

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CoinDesk

IoT Startup Helium Floats New Hardware Device for Mining Its HNT Crypto Tokens

CoinDesk Crypto
6 years ago

Helium’s plan to create a decentralized wireless network may be about to gain altitude.

The company, which aims to create a token-powered wireless network for Internet of Things (IoT) devices, announced Tuesday it’s no longer the sole manufacturer of Helium hotspots, which create the Helium network by mining the project’s HNT cryptocurrency. 

RAK Wireless, a China-based manufacturer of IoT hardware will begin selling a new, cheaper version of the hotspot, potentially giving the whole enterprise a lift.

Related: US Space Force Enlists Blockchain Firm to Deploy Hack-Proof Data Defenses

Quick refresher: Helium aims to create a new kind of wireless network, one that’s suited for data from low-power applications like tracking location, but also is completely separate and independent from existing telecom networks. While Helium maintains the network, it’s peer-to-peer, meaning it’s created by individuals owning and operating their own nodes.

Enter the Helium hotspot. For over a year, individuals have been able to buy and deploy one of the bologna-sandwich-sized hotspots, which both acts as a node in the network (via low-bandwidth wireless tech called LongFi) and rewards the owner by mining HNT crypto tokens.

Read more: Crypto-Powered IoT Networks Are on Their Way to Over 250 US Cities

Until now, the only way to get a hotspot was to buy one from Helium for $495 apiece. The RAK Hotspot Miner, available today in North America and coming “soon” to Europe and Asia, costs $249, or roughly half. It’ll be sold exclusively through Cal-Chip, an online vendor of IoT devices. The components are nearly identical to Helium’s model, according to the company, but RAK can offer a lower price since it can take advantage of economies of scale that Helium can’t.

Related: China’s BSN to ‘Localize’ 24 Public Blockchains by Making Them Permissioned

“This is the first of what we hope will be many third parties building compatible hardware,” Helium CEO Amir Haleem said in an interview. “It’s an enormous step for us because up until now, we’ve been the only manufacturer and we’ve been the bottleneck. We can’t be the only entity contributing to [the network], both from a price point of view but also it doesn’t speak well to the decentralization story.”

Helium hardware

The buyers of Helium’s hotspots have typically been enthusiasts who see the value in a low-power network or companies that want to leverage the technology itself. 

A company that wants to use the network to, say, track the location of its rental scooters can exchange HNT for data credits, which Helium also manages, and have a fixed price in dollars. The more hotspots in an area, the better the tracking – which also would likely fuel demand for HNT, which was trading at $1.75 as of press time, according to Messari.

You can see where this is going. With the RAK Hotspot lowering the bar to entry, more Helium owners may start to purchase them just to mine the cryptocurrency. If that happens, and those people are spread out in enough different places, Helium’s dream of decentralized wireless (which it calls, with a straight face, “DeWi”) might start to solidify, turning all those hotspots into valuable investments.

“Building wireless infrastructure this way and having access to the internet be decentralized and not controlled by one entity is a must-have step in the evolution of the internet,” said Haleem. The existing universe of low-power access points and gateways is, quite frankly, a clusterf**k. So it’s great to have a third party start to get involved in the foundational infrastructure.”

Read more: IoT App Nodle Moves From Stellar Blockchain to Polkadot

Helium’s technology is promising, but far from ubiquitous. The company says it’s sold about 12,000 hotspots, although public network stats say only 8,641 are active. And while that still sounds like a lot, it takes between 100-200 hotspots to bring a single city “online.” 

A few well-known companies, including Lime and Salesforce, have used Helium’s tech, but it’s early days.

In short, Helium needs to rise a lot further to reach its decentralized wireless utopia in the clouds, and its bubble could pop anytime. But at least with RAK Wireless coming on board, the weight of that journey is a little lighter.

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CoinDesk

US Government Darknet Drug Raids Seize $6.5M in Cash and Crypto

CoinDesk Crypto
6 years ago

The U.S. government has made one of the biggest drug busts in history, with half a tonne of narcotics and millions of dollars in cash and cryptocurrencies taken from dealers that use the dark web.

  • The Department of Justice (DoJ) announced the results of Operation DisrupTor on Tuesday – calling it one of the largest attempts to combat criminal activity on the dark web, and in particular opioid trafficking.
  • Over 500 kilograms of drugs were seized worldwide, as well as approximately $6.5 million held in both cash and cryptocurrencies.
  • One particular bust saw the seizure of 111 kilograms of fentanyl, which FBI director Christopher Wray said was enough for approximately 5.5 million lethal doses.
  • In total more than 170 arrests were made worldwide, including Canadian citizen Arden McCann who is alleged to be responsible for smuggling more than 10 kilograms of fentanyl and over 300,000 counterfeit Xanax pills into the U.S.
  • Agencies including the Secret Service, the DEA, Homeland Security as well as international bodies Europol and Five Eyes all participated in Operation DisrupTor.
  • At a press conference, DoJ Attorney General Jeffrey Rosen said the operation had dealt a “powerful blow” to the criminal underworld.

Also read: US Treasury Sanctions Russians Using Crypto for Election Interference

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