CoinDesk Crypto

Banking veterans who have steered divisions at HSBC, Citigroup and Merrill Lynch in the Asia-Pacific region are ditching traditional finance to invest in cryptocurrencies.

• People familiar with the matter told CoinDesk that Joseph Chang, head of equities trading and prime finance at Merrill Lynch, HSBC and Citigroup Asia-Pacific from 1997 to 2016, and Grahame Webb, formerly head of technology for HSBC and Citigroup Asia-Pacific prime finance and securities services, have been trading cryptocurrencies since June through a new Hong Kong-based fund, Liquibit Capital.
• Liquibit Capital, also managed by a former Barclays Capital vice president and two current JPMorgan and Wells Fargo technicians, will manage assets worth $50 million, the people said.
• Liquibit is said to arbitrage a portfolio of bitcoin, bitcoin cash, ether, litecoin and eos, custodied with Fireblocks.
• It is expected to expand to trading derivatives, options and futures on BitMex, Huobi, OkEx and Deribit – cryptocurrency exchanges with a largely Asia-based presence.
• Chang, now Liquibit Capital’s chief investment officer, said regulatory bloat and a surplus of middlemen at investment banks convinced him and his partners to switch to cryptocurrency markets.
• Webb, chief technology officer at Liquitbit Capital, has also previously structured custody and clearing architecture for securities flowing between wealth managers.

Also read: Diginex Moves Closer to Backdoor Nasdaq Listing With Merger Approval

Related Stories

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• Three Iranian Power Plants Plan to Sell Electricity to Crypto Miners
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• NVIDIA Lawyers Dismiss Investors’ Crypto Mining Doc Requests: Report

It’s pretty much guaranteed at this point that higher inflation is coming.

The Federal Reserve, which has already printed about $3 trillion of new money this year, is now explicitly devoted to reducing the dollar’s purchasing power in a bid to revive the economy. Higher inflation also typically happens when a country gets laden with debt and interest rates are cut to zero, as is now the case in the U.S.

“We’re at a moment where you may see some inflation,” Federal Reserve Bank of St. Louis President James Bullard said last week.   

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

The trend could be good for bitcoin, which many crypto investors believe can serve as a hedge against inflation, a digital and perhaps more portable alternative to gold. As detailed last week by SeekingAlpha contributor Lyn Alden, the trend has been clear since roughly 1980, when the share of wealth held by the world’s richest 0.1% of people began a decades-long rise from about 5% to more than 20%. 

But increasingly, it looks like bitcoin-as-inflation-hedge might be the cryptocurrency’s most compelling investment narrative, and not necessarily as the dominant digital asset for perpetuity, as many so-called bitcoin maximalists have argued. 

Last week, bitcoin’s “dominance” – the market value of all bitcoins in existence, divided by the market value of all digital assets – fell to 57%, from 68% at the start of the year, according to CoinMarketCap.

The primary challenger, of course, is ether (ETH), the native token of the Ethereum blockchain, which has exploded with activity this year as the primary venue for the fast-growing realm of decentralized finance, or DeFi. Ether’s market value has climbed to about 12% of the industry total, from about 6.8% at the start of the year. 

Related: DeFi Yield Farming Aggregator APY.Finance Raises $3.6M in Seed Funding

“The rivalry between Bitcoin ‘maximalists’ and Ethereum enthusiasts has become more polarized in recent months, with each side latching on to narratives that best support the asset to which they have pledged their allegiance,” Kevin Kelly, co-founder of the market-analysis firm Delphi Digital, wrote this month in report. And recently, Ethereum has been “playing catch-up to its ‘digital gold’ counterpart.”

Bitcoin Watch

Bitcoin is again taking cues from traditional markets.

The leading cryptocurrency is dropping alongside stocks, with soaring coronavirus cases across Europe and other parts of the world threatening to snuff out the nascent global economic recovery.

Bitcoin is currently down over 2% at $10,650 and may suffer a more significant drop if the risk aversion worsens, boosting demand for the safe-haven U.S. dollar. The cryptocurrency tanked 40% on March 12 as the global stocks’ coronavirus-induced crash triggered a global dash for cash.

The recent rise in the outflow of coins from miner wallets to exchanges could add to bearish pressures around bitcoin.

On Sunday, 784 BTC were transferred to exchange wallets from miner wallets – significantly higher than the 30-day average daily outflow of 265 BTC, according to data source Glassnode.

– Omkar Godbole

Read more: Bitcoin Down as Stocks Fall Over European Coronavirus Fears

Token Watch

Curve (CRV): Decentralized stablecoin exchange starts new dividend program for holders of governance token.

Ether (ETH): Ethereum transaction fees hit a record as developer Danny Ryan says 2.0 upgrade will radically improve network performance and security.

Enigma (ENG): Privacy-focused blockchain startup says its tokens “lack features” of securities, but registers them with regulators anyway in filing tied to February settlement with U.S. Securities and Exchange Commission.  

What’s Hot

Bank of New York Mellon wired over $100 million in funds linked to crypto Ponzi scheme OneCoin, according to trove of documents leaked from U.S. crimes watchdog FinCEN (CoinDesk)

Kava Labs noses in on DeFi fever with new yield-generating platform featuring deposits of bitcoin, Binance coin (BNB, Binance USD (BUSD) and XRP from Ripple (CoinDesk)

Vitalik Buterin was obsessed with bunnies as a 7-year-old, Bloomberg News reporter Matt Leising writes in new book about the Ethereum and the $55M hack of The DAO (CoinDesk)

Bank of Thailand governor says central bank is conducting test runs to integrate digital currency, aiming to broaden adoption to “enable higher payment efficiency for businesses such as increasing flexibility for fund transfers or delivering faster and more agile payments between suppliers” (TheStar)

Crypto custodians will “catalyze the rotation of fund flows from currency-based blockchain projects into utility/smart contract-based projects over the near term” (Global Digital Assets)

Magazine published by Chinese central bank says country needs to be first to launch digital currency, partly to weaken the dollar’s role in international finance, part of a “new battlefield” between nations (CoinDesk)

Cryptocurrency mining takes off in Iran using cheap energy, with government’s blessing (Tehran Times)

Analogs The latest on the economy and traditional finance

As Federal Reserve backstops company debt, spread between yields on government bonds and corporate bonds shrinks to record low (WSJ)

Minneapolis Fed President Neel Kashkari says pandemic aid was also effectively a “banking bailout” (Reuters)

People are selling “good” stocks to buy into “smoking hot” IPOs, Jim Cramer says (CNBC)

U.S. banks are helping to finance the federal government with $250B increase since February in Treasury bonds and government-backed mortgage bonds (WSJ)

Hopes fade for U.S. stimulus bill to rescue states, cities (Bloomberg)

Middle-class U.S. families have 32% more household debt than in 2004, even after inflation adjustment (WSJ)

HSBC, JPMorgan, Deutsche Bank, Standard Chartered moved large sums of allegedly illicit funds despite reg flags, BuzzFeed reports, based on leaked suspicious activity reports (CNBC)

Tweet of the Day Related Stories

• Bitcoin Down as Stocks Fall Over European Coronavirus Fears
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APY.Finance, a yet-to-launch decentralized finance (DeFi) yield farming aggregator, announced Monday that it has completed a $3.6M seed funding round joined by investors including Arrington XRP Capital, Alameda Research, Cluster Capital and CoinGecko. 

• According to a press release emailed to CoinDesk, APY.Finance is building an automated investment service platform that will allow users to earn yields across a variety of DeFi products in a “in a risk/reward optimized way.”
• The seed investment will be used for developing the platform, performing audits and risk insurance.
• DeFi projects offer users incentives to deposit tokens and provide liquidity to their protocols, a practice popularly known as “yield farming.”
• “Yield farming today presents users with a high barrier-to-entry, cost, and risk,” said Will Shahda, CEO of APY.Finance. “APY solves these pain points by giving users a low-cost frictionless way to pool their liquidity and allocate it across a portfolio of strategies.”
• APY.Finance said it’s targeting mid-October for a full-scale rollout of its platform.
• The aggregation platform further plans to issue a native “governance token,” APY, to help decision making on its protocol.
• According to the release, a public sale of APY tokens is expected to kick off this month in what it’s calling an “Initial DEX Offering.”  

Also read: How Normies Are Getting Crypto-Rich With DeFi

Related Stories

• First Mover: Digital Gold Narrative Could Be Bitcoin’s Lone Ace as Ethereum Gains
• New Binance-Backed DeFi Site Lets You Earn Yield on Bitcoin, Other Non-Ethereum Assets
• What Is DeFi?
• Uniswap’s Newly Launched UNI Token Has Already Doubled in Price

Three Iranian power plants with enough output to supply half of New York City will soon begin selling surplus electricity to cryptocurrency miners, in a bid to create a new source of revenue.

• Thermal Power Plant Holding Company (TPPH), which owns and operates plants all across Iran, said crypto miners could now offer to buy electricity from three of its power stations, according to a report from the Tehran Times.
• “The necessary equipment has been installed in three power plants of Ramin, Neka, and Shahid Montazeri, and the auction documents will be uploaded on the SetadIran.ir website in the near future,” said TPPH head Mohsen Tarztalab.
• Together, the three plants have a combined power output of 5,485 megawatt-hours.
• Iran recognized crypto mining as a legitimate business activity in July 2019; it’s estimated the government issued a 1,000 mining licenses in the first six months of the new regime.
• While there has been confusion over the policy, Iran's share of global bitcoin mining output has increased to nearly 4% – almost double that in September 2019.
• Although faced by rising production costs, Iranian power plants have to supply power to the national grid at fixed prices. Tarztalab said selling power to crypto miners would help them remain profitable.
• TPPH would only sell power generated from turbines that don’t supply the national grid, Tarztalab said.
• Both the Ramin and Neka plants rely on natural gas, which releases roughly half the amount of carbon from other fossil fuels, such as coal; Shahid Montazeri is powered by oil from a nearby refinery.

See also: A New York Power Plant Is Mining $50K Worth of Bitcoin a Day

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• NVIDIA Lawyers Dismiss Investors’ Crypto Mining Doc Requests: Report

Bitcoin is facing selling pressure Monday amid coronavirus-led risk aversion in the stock markets.

• Bitcoin is trading in the red near $10,650 at press time, down 2.9% on the day, having faced rejection near $11,000 earlier on Monday.
• A decline in European stocks and U.S. stock futures and a rise in the U.S. dollar look to be weighing over the top cryptocurrency by market cap.
• Major European indices like Germany’s DAX, France’s CAC, and the U.K.’s FTSE are down more than 3%, according to data source investing.com.
• Futures tied to Wall Street’s S&P 500 index are also down nearly 2%, but the dollar index, which tracks the greenback’s value against major currencies, is up 0.5%.
• Investors are selling equities on fears the recent resurgence of COVID-19 cases across Europe could unleash a new round of economic damage.
• The epidemic is doubling roughly every seven days in the U.K., and if the trend continues there would be about 50,000 new cases per day by the middle of October, according to British government’s chief scientific adviser.
• The U.K. may be forced to bring in new lockdowns; other European countries from Denmark to Greece have aready imposed restrictions.
• Bitcoin could suffer a bigger drop if the risk aversion worsens, triggering a dash for the U.S. dollar, a global reserve currency, as happened in March.
• Additionally, a recent rise in the flow of coins from miner wallets to exchanges could add to bearish pressures around bitcoin.

• On Sunday, 784 BTC (worth roughly $8 million) were transferred to exchange wallets from miner wallets – significantly higher than the 30-day average daily outflow of 265 BTC, according to data source Glassnode.
• Miners and investors usually move coins to exchanges to liquidate their holdings.
• As such, a price drop and a pick-up in volatility could be in the offing, unless buying pressure is strong enough to absorb the additional miner supply.

• A possible head-and-shoulders breakdown, a bearish pattern, seen on the hourly chart may expose the 100-day average support located near $10,400.
• Meanwhile, resistances are seen at $11,000 and $11,183 (Sept. 19 high).

Also read: Bitcoin ‘Young Investment’ Wallets at Highest Level Since February 2018

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• Uniswap’s Newly Launched UNI Token Has Already Doubled in Price

One of America’s oldest banks wired over a hundred million dollars in funds linked to the crypto Ponzi scheme OneCoin, according to a trove of documents leaked from the U.S.’ financial crimes watchdog.

In February 2017, the Bank of New York Mellon (BNY Mellon) flagged a number of transactions with the Financial Crimes Enforcement Network (FinCEN) it deemed suspicious as they appeared to be “layered” – a money-laundering technique that hides the source of funds through sending multiple transactions.

Worth a combined $137 million, the bank said these transactions came from entities linked to OneCoin – a crypto scheme the U.S. government accused of being a Ponzi. It’s estimated OneCoin raised a total of $4 billion from investors, making it one of the most successful schemes of its kind ever.

Related: US Moves to Seize $400M From Convicted OneCoin Money Launderer

Buzzfeed received thousands of leaked suspicious activity reports (SARs) from 2011 and 2017 that show instances when a bank’s compliance team flagged a transaction they consider out of the ordinary and possibly suspect with FinCEN.

Dubbed the “FinCEN files,” the trove of 2,657 documents gives an indication of how much dirty money may be passing through some of the world’s biggest banks. As SARs are just the concerns of compliance officers, they are not necessarily evidence of wrongdoing by themselves.

The files show Deutsche Bank flagged a total of $1.3 trillion, JPMorgan approximately $500 billion and Bank of America another $384 billion. BNY Mellon underlined a total of $64 billion in 325 separate SARs filed with FinCEN, making it the second-most-frequent filer in the leaked documents.

See also: UK Watchdog Eyes Extension of Money Laundering Risk Reporting to Crypto Firms

Related: Promoters of Crypto Ponzi Scheme OneCoin Murdered in Mexico

Buzzfeed shared the FinCEN files with the International Consortium of Investigative Journalists (ICIJ), which showed one particular transaction in 2016 where Fenero Equity Investments, a British Virgin Islands-based company, wired approximately $30 million from its account at DMS Bank & Trust, a Cayman-based bank, to BNY Mellon.

Fenero described the payment as a “loan for CryptoReal” – an investment trust set up by OneCoin founder Ruja Ignatova, who has not been seen since late 2017.

In a SAR filed at the time, BNY Mellon’s compliance team said Fenero often received wires from shell entities linked to OneCoin. It sent the money on to Hong Kong’s DBS Bank, where it was credited to a local company called Barta Holdings.

Emails seized by U.S. authorities last year shows Mark Scott, the New York attorney convicted last year of laundering $400 million for OneCoin, arranged the $30 million loan from Fenero to allegedly purchase an oilfield from Barta Holdings.

But the seized emails show that the loan was never repaid and that $10 million of the amount sent to Barta Holdings was actually spent by one of the OneCoin co-founders.

“I believe that the €30 million purported “loan” from Fenero to Barta was arranged by Scott to launder OneCoin Ltd. proceeds to CC-2 [OneCoin’s co-founder],” said testimony from special agent Kurt Hafer, attached to the New York Attorney’s office.

See also: US Moves to Seize $400M From Convicted OneCoin Money Launderer

A BNY Mellon spokesperson told ICIJ that the bank fully complied with existing financial regulation and took its role in protecting the integrity of the global financial system seriously. By law, they said the bank was unable to comment on specific SARs.

Likewise, DMS Bank said it took its legal responsibilities for helping to combat fraud and money laundering “extremely seriously.”

OneCoin, Ruja Ignatova, and DBS Bank didn’t respond to ICIJ’s requests from comment.

Related Stories

• FBI Report on Laundering by Private Funds Cites OneCoin Fraud in All but Name
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Unlike many other central banks, China’s sees concrete benefits in being the first to launch a digital currency, according to China Finance, a magazine from the People’s Bank of China (PBoC).

• Reported by Reuters Monday, the article said that among the benefits of the digital currency – dubbed DCEP, for digital currency electric payment – would be the weakening of the dollar’s role in international fiance in favor of the yuan.
• China Finance said that the ability to issue and control a digital currency would herald a new area of competition – a “new battlefield” between nations.
• Another advantage of the DCEP system would be the better feedback of payments data, which could help better promote monetary policy.
• That, in turn, could help economic recovery post-coronavirus, according to the article.
• The digital yuan has been in development for six years and is now in testing at banks and corporations in a number of regions.
• The article also highlighted the extensive research that has gone into the project, citing the 130 patent applications that have been lodged so far.
• These span cryptocurrency issuance, circulations and related apps, forming a supply chain that would support DCEP, the central bank magazine said.

Also read: PBoC Says Digital Yuan Tests Focus on Small Transactions After Rumored Property Sale

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Curve, the robot decentralized exchange for stablecoins, is kicking off a new dividend program for holders of its governance token, CRV.

“We’ll start moving towards a cashflow-based protocol because the numbers are too sweet to not do it,” Curve founder Michael Egorov told CoinDesk in an email.

In order to participate in governance, users need to stake their CRV to the voting contract, exchanging CRV for veCRV (voting escrow CRV). Those escrow tokens will begin receiving half of all the staking fees on Curve starting today.

Related: Why the First US Crypto Bank Is a Big Deal

More details and instructions for the dividend can be found in the Curve documentation.

Each trade on the platform incurs a 0.04% trading fee, which is left in the pool until liquidity providers (LPs) remove their share. With this shift, trading fees will be split between liquidity providers and veCRV holders.

Over the last week, fees on Curve have varied between approximately $70,000 and $150,000 per day. The project just hit a new all-time-high daily volume at over $400,000,000.

For now, 2 million CRV tokens are distributed to LPs annually, though that amount will drop by 15% each year. 

Related: DEX Aggregator ParaSwap Raises $2.7M Seed Round From Deep Roster of Crypto Investors

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

Volume is up in part for another reason: a vampire mining attack by Curve fork Swerve just ended. Egorov wrote, “The fork attracted non-Curve people in initially, but after their inflation ran out, they switched to Curve increasing the TVL [total value locked].”

Curve is now in third place on DeFi Pulse, with $1.18 billion in crypto assets staked. 

CRV is trading at $1.40, off from a seven-day high of $2.07.

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Kava Labs has launched its first application: a yield-generating decentralized finance (DeFi) platform for bitcoin (BTC) and other non-Ethereum assets.

The product, called Harvest and built on the Kava blockchain, allows users to stake their crypto so it can be lent out to other users. Harvest will initially support deposits of BTC, BNB, BUSD and XRP. Soon, Kava Labs plans to debut automated market makers (AMMs) like Uniswap and robo-advisors like Yearn.Finance on the blockchain as well, said Kava Labs CEO Brian Kerr.

Similar to DeFi platform MakerDAO, Kava will allow users to create collateralized debt positions (CDPs) on the Kava protocol in exchange for a stablecoin, USDX, pegged one-to-one with the U.S. dollar. Unlike Maker, though, Kava works with assets outside the Ethereum ecosystem that have largely watched the DeFi craze from afar.

Related: What Is DeFi?

Kava Labs is backed by several large exchanges, including Binance, Huobi and OKEx, which stake kava tokens and participate in the blockchain’s governance.

Yield farming, meet Harvest

Kerr said that Harvest was inspired by Aave and Compound, but that Harvest will bring the same capabilities that these protocols have to a larger array of digital assets. 

“When we were building out Harvest, we saw the design paradigm already working,” Kerr said. “What we can bring to the table is unlocking these much larger-market-cap assets and giving them the same type of lending and borrowing functionality.” 

Read more: Multi-Chain DeFi Protocol Raises $750K in Token Sale With Framework Ventures

Related: Uniswap’s Newly Launched UNI Token Has Already Doubled in Price

Harvest users who borrow or lend on the app will be paid their interest and HARD tokens, the governance token of Harvest, which will also be used to incentivize liquidity on the platform. 

Kava is built on the Tendermint consensus algorithm, which is also employed by the Cosmos blockchain interoperability project. Kava conducted an initial exchange offering (IEO) on Binance in October and counts Arrington XRP Capital as an investor.

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• First Mover: Uniswap’s Sudden $5B Token Valuation Cements Comeback From ‘Vampire Mining’ Attack
• This DeFi Group Wants to Bring Maturity to the Yield Farming Craze

Bitcoin has lost its market momentum. Meanwhile, the amount of cryptocurrency locked in decentralized exchange Uniswap was nearly doubled on Friday.

• Bitcoin (BTC) trading around $10,867 as of 20:00 UTC (4 p.m. ET). Slipping 0.42% over the previous 24 hours.
• Bitcoin’s 24-hour range: $10,812-$11,039
• BTC below its 10-day and 50-day moving averages, a bearish signal for market technicians.

Bitcoin was only able to eclipse the $11,000 level briefly Friday before dropping to as low as $10,812 on spot exchanges such as Coinbase. 

“Markets are looking weak on drying-up liquidity on exchanges while BTC hardly managed to reach back above the $11,000 level and couldn’t sustain it,” said Jean Baptiste Pavageau, partner at trading firm ExoAlpha. 

Related: ‘I Didn’t Buy It to Sell It. Ever.’ MicroStrategy’s Michael Saylor on His $425M Bitcoin Bet

Indeed, major USD/BTC exchange volumes are looking feeble, with Friday tallying a $211 million total so far while daily averages the past month have been $364 million. 

Rupert Douglas, head of institutional sales at crypto brokerage Koine, is concerned stock markets are in for a correction, potentially hurting crypto as investors look to unload risky assets. 

“I think equities are headed lower and if that happens digital assets will get sucked down, too,” Douglas told CoinDesk. “The tech shares are too frothy,” he added 

Stock markets globally were mixed to cap off the week:

• In Asia the Nikkei 225 ended the day flat, in the green 0.18% as concerns about company earnings in the face of the coronavirus pandemic prompted investor caution.
• In Europe the FTSE 100 closed in the red 0.47% as the U.K. government considers another lockdown due to the coronavirus.
• In the United States the S&P 500 fell 1.7% as losses in the tech sector dragged down the index, including Apple slipping 3%.

Related: New on Bitcoin’s Lightning Network: LND Adds Accounting Feature, c-lightning Gets an Upgrade

Another factor crypto investors are tracking: Bitcoin dominance, a measure of its market capitalization as a percentage of total cryptocurrencies. September has seen bitcoin hit 2020 dominance lows, hovering around 60% Friday.

“So far, bitcoin dominance has largely been sliding downwards since the beginning of 2020,” said Andrew Tu, an executive at crypto quant trading firm Efficient Frontier. “It will be interesting to see if we see a short-term reversion of the bitcoin dominance back upwards.” 

ExoAlpha’s Pavageau says decentralized finance, or DeFi, is captivating the crypto market, and that is causing weakness for bitcoin.

Read More: This DeFi Group Wants to Bring Maturity to the Yield Farming Craze

“The market is focused on DeFi. It seems that locking value is also draining liquidity from exchanges as traders are noticing higher slippage when executing in the market,” Pavageau said. “A question to ask might be: Is the total value locked a threat to market liquidity for active traders?”

Uniswap crosses $1.5 billion locked

Ether (ETH), the second-largest cryptocurrency by market capitalization, was down Friday, trading around $379 and slipping 2.3% in 24 hours as of 20:00 UTC (4:00 p.m. ET). 

The amount of cryptocurrency “locked” in decentralized exchange Uniswap has crossed $1.5 billion for the first time since Sept. 7. Investors have been quickly plowing crypto into Uniswap’s smart contracts over the past 24 hours, an 80% increase in value locked for that time period.

The dynamics of Uniswap have changed due to the decentralized exchange’s decision to release its own token, known as UNI, said Brian Mosoff, chief executive officer for investment firm Ether Capital.

Read More: Uniswap’s Newly Launched UNI Token Has Already Doubled in Price

“Users are likely locking ETH into Uniswap because they want to farm the $UNI token,” Mosoff said. “Many crypto users see Uniswap as the category leader, and rightfully so given the team and its backers. Users want to participate financially in the growth of the platform.”

Other markets

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

• qtum (QTUM) + 7.2%
• neo (NEO) + 5.7%
• tron (TRX) + 3.2%

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

• orchid (OXT) – 6.3%
• chainlink (LINK) – 5.5%
• tezos (XTZ) – 4.6%

Read More: Uniswap’s $5B Token Valuation Cements Comeback From ‘Vampire Mining’ 

Commodities:

• Oil is flat, in the red 0.10%. Price per barrel of West Texas Intermediate crude: $40.90.
• Gold was in the green 0.34% and at $1,950 as of press time.

Treasurys:

• U.S. Treasury bond yields were mixed Friday. Yields, which move in the opposite direction as price, were down most on the two-year bond, in the red 2.8%.

Related Stories

• Uniswap’s Newly Launched UNI Token Has Already Doubled in Price
• First Mover: Uniswap’s Sudden $5B Token Valuation Cements Comeback From ‘Vampire Mining’ Attack

NVIDIA Corp. lawyers are pushing back against investors demanding to pull back the curtain on the chipmaker’s 2017 cryptocurrency mining hardware business.

• According to Law360, NVIDIA’s lawyers argued before a Delaware Court of Chancery official Thursday that plaintiffs lack sufficient evidence to probe the company’s 2017’s “crypto craze.”
• Investors are suing NVIDIA for allegedly understating a crypto mining hardware sales spike they claim undermined NVIDIA’s other chip businesses, according to the report.
• NVIDIA made as much as $1 billion selling graphics processing units (GPUs) to miners during the height of the crypto craze, according to plaintiffs in a different class– action suit.
• The Delaware plaintiffs further claim NVIDIA executives leveraged the unsustainable sales boom to sell $147 million in company stock “at artificially inflated prices,” Law360 reported.
• NVIDIA emerged from the boom with too much inventory and overly rosy revenue projections that had to be adjusted downward to the detriment of the company’s share price, investors claimed.
• NVIDIA lawyers argued the investors are cherrypicking executives’ statements, are being inconsistent in their records requests and may lack standing, according to the Law360 report.

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You’re going to have to wait a little longer for the liquidity mining–powered savings account from Korean stablecoin maker Terra. 

The savings account’s returns will be based on various proof-of-stake currencies, plus additional yield over the first five years in the form of its growth token. The system is called Anchor and was originally expected to go live in October; the latest update from the company has pushed that back to late November. 

That said, the project is riding forward on a wave of momentum. The firm’s Chai payments app, in which the Terra stablecoin is prominently featured, now has over 2 million accounts. 

Related: Monetary Policy Is Finished and Macro Debates Are Boring, Feat. Raoul Pal

“Growth over the last couple months has been largely driven by volume lift from COVID-friendly categories,” Terra co-founder Do Kwon told CoinDesk via email. “For example, some of the high performing recent integrations include [Korean food-delivery service] Yogiyo and [online grocer] Hello Nature, both of which have seen tremendous growth in the recent months.”

Taking a page from Square’s playbook, Terra has a card called the Chai Card. Users accumulate points and can redeem them for outsized rewards with specific merchants who are seeking user acquisitions, much like Boosts on Square’s Cash App.

Read more: Proof-of-Stake Chains Team Up to Prove DeFi Is Bigger Than Ethereum

Terra should soon have more visibility in the Western market as it bridges to Ethereum, offering a wrapped version of its stablecoin on the leading decentralized finance (DeFi) blockchain. 

Related: Dapper Labs–USDC Integration Helps NBA Collectibles Game Clear $2M in Revenue Since June

Kwon noted, “USDC and tether have non-trivial seizure and collateral risks, as the underlying USD deposits can either be seized or censored.” Further, DAI lags demand, he said, because it’s too costly to mint.

Terra has the additional advantage of offering versions that mirror several other fiat currencies beyond U.S. dollars, with Terra-based stablecoins for Korea, the Philippines and Mongolia.

“Wrapped Terra stablecoins will become available on Ethereum starting mid-October soon after our Columbus-4 mainnet upgrade on [Oct. 3],” Do wrote, adding: 

“We are already in conversations to integrate wrapped Terra stablecoins with a range of popular DeFi primitives as well as centralized exchanges, so look forward to seeing Terra as a serious contender for stablecoin dominance on Ethereum.”

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• ‘No Other Option but More Collateral’: The Short- (and Long-) Term Fixes for Dai’s Broken Peg

Decentralized finance (DeFi) has gone viral, but it’s not a new phenomenon.

Blockchain startup Enigma filed a registration statement for its ENG token with the U.S. Securities and Exchange Commission.

According to the document published on the SEC’s portal Friday, the registration statement is tied to the privacy-focused firm’s February settlement with the regulatory body regarding the project’s 2017 initial coin offering (ICO). 

• The project’s registration statement notes the ENG tokens are currently used as a payment tool on the project’s data network and shouldn’t be viewed as resembling traditional securities. 
• “ENG tokens lack features of such securities, including the right to receive a dividend or distribution; ENG tokens also do not provide holders with any voting, liquidation or preemption rights,” the project’s registration statement notes. 
• According to the filing, once the registration statement becomes effective Enigma would be subject to the Exchange Act, which means it would be required to file an annual 10-K, quarterly 10-Q and current 8-K reports. 
• Enigma is one of the development companies working on the Secret Network. Earlier this week, “secret smart contracts” were also launched on the network’s mainnet and the “Secret Network” is now focusing on scaling and building connections to public networks such as Ethereum and Cosmos Hub.
• The Secret Network also announced a partnership with, and investment from, Hashed, a blockchain firm in Asia. The investment is for an undisclosed amount. 
  
  Benjamin Powers contributed reporting.

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Roughly 210 of the more than 500 registered and whitelisted investors in INX’s initial public offering (IPO) on Ethereum have put money into the sale as of Friday, Sept. 18, three days after the first distribution transaction took place.

The cryptocurrency and security token exchange’s blockchain IPO is the first of its kind and gives observers and issuers a ground-level view of what’s going on through the Etherscan block explorer. 

The public can see roughly the number of investors receiving INX tokens after putting money into the sale by watching the number of holders on the token tracker. (Some of these are internal operational transactions, however, such as when Tokensoft loads the distribution smart contract.)

Related: First Mover: Uniswap’s Sudden $5B Token Valuation Cements Comeback From ‘Vampire Mining’ Attack

Traditionally, to get information on who beneficially owns an interest in shares held at central securities depositories like the Depository Trust Company, investors or issuers would have to go to the investment banks or broker-dealers who coordinated the sale. 

“I love that investors can purchase and get the tokens directly from the issuer the same day,” said Mason Borda, CEO of Tokensoft.  “Over time, as our technology and processes mature, this will all occur in real time.”

Read more: How to Watch INX’s IPO in Real Time on the Ethereum Blockchain

Per INX’s IPO prospectus, the company was required by U.S. regulators to first raise $7.5 million before being able to distribute tokens or raise funds in the form of crypto.

Related Stories

• Ethereum Smashes Records as DeFi Hype Sends Transactions and Miner Revenue Soaring
• Ethereum Gas Fees Drive Gnosis-Powered Prediction Market to xDai’s Layer 2
• First Mover: Federal Reserve Does What It Wants to Do as Bitcoin Hits $11K

Germany’s money-hemorrhaging effort to build a sleek new airport for Berlin might have convinced one political party that a blockchain for megaproject transparency was in order, but on Thursday the center-right Free Democrats (FDP) proved unable to persuade anyone else.

• FDP’s call for a blockchain to hold “major state projects” accountable fell on deaf ears in the Bundestag after it failed to receive backing from even one other parliamentary group.
• If passed, the proposal would have urged the German government to host big-euro projects on an open blockchain. Citizens could then view audit trails and provide feedback with ease, the bill read.
• Such a tool could salvage the public’s confidence in the wake of the Berlin Brandenburg Airport (BER) fiasco, FDP pointed out.

• BER is set to open to the public in October 2020 – nine years behind schedule and at least four billion euros over budget. Its history of cost overages and design failures have turned the hulking transit hub into a case study of mismanagement.

• “Citizens’ trust in the control abilities and competence of government contractors suffered enormously because of these and other failures” FDP argued.
• “The medium-term goal must be to make tax-financed large-scale projects more transparent for taxpayers,” they said.
• FDP offered an accessible blockchain as the solution.
• But the other members of Bundestag’s Building committee did not agree. On Wednesday, they recommended the parliament reject FDP’s blockchain proposal outright. It died the next day on the Bundestag floor. 

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While so-called “DeFi degens” are busy bidding up the price of food-themed tokens, on the other end of crypto’s DeFi spectrum two teams working on the most popular implementations of Bitcoin’s Lightning Network have been busy pushing out new features. 

This week, both Lightning Labs, which maintains the Lightning Network Daemon (LND) implementation of the Lightning Network, and Blockstream, which maintains the c-lightning implementation, updated their tech stacks. 

Read more: What Is Bitcoin’s Lightning Network?

Related: First Mover: Uniswap’s Sudden $5B Token Valuation Cements Comeback From ‘Vampire Mining’ Attack

For Lightning Labs, the update comes to its Faraday suite with the addition of an automated accounting feature to make bookkeeping easier for node operators and Lightning Network service providers (LSPs). For Blockstream, the 0.9.1 release of c-lightning improves channel opening and routing mechanisms to make opening channels (and sending payments) easier than before.

Lightning meets accounting

Lightning Labs updated its Faraday suite this week to bake in accounting tools for both Lightning and on-chain transactions. 

As LND’s tech stack has increased to include advanced features like Lightning Loop, the accounting burden for businesses running Lightning services has likewise become more cumbersome. 

Seemingly a simplistic update, the new Faraday accounting feature will automate what was formerly a manual process – a welcome tool for LSPs that have to wrestle with hundreds of Lightning channels swimming with several thousand dollars worth of liquidity.

Related: Bitcoin Rises Back to $11K Despite Signs of Indecision in the Market

Read more: Lightning Labs Releases ‘Loop’ Feature for Bitcoin Payments Channels

All the data collected by the automated accounting tool can be imported into Google Sheets or Microsoft Excel.

“By adding accounting reports to Faraday’s suite of tools, we hope to free up engineering time that has been spent auditing nodes, and allow businesses and builders to focus on delivering the uniquely Lightning features that we all love to end users. Accounting has been a common pain-point in integrating Lightning, one that we ourselves have felt when dealing with our own accounting internally,” Lightning Labs developer Carla Kirk-Cohen told CoinDesk. 

According to Bitcoin service and payment provider OpenNode, the new accounting feature will help them save money by making channel-related data easier to parse in real time.

“Faraday allows us to easily calculate bitcoin-related operational expenditures and monitor channels’ activity, allowing us to make data-driven decisions on where to deploy capital on the network in order to maximize its potential earnings” OpenNode CTO João Almeida told CoinDesk

Multi-channel, multi-part

Concurrent with Lightning Lab’s Faraday release, Blockstream pushed improvements to its c-lightning implementation’s channel management and routing tools.

Version 0.9.1 of c-lightning ostensibly improves “multi-part payments,” (MPP) a method for splitting larger Lightning Network payments into fractions and routing these pieces through multiple payment channels. This method improves the likelihood that larger transactions will be able to find a route between sender and receiver, and the new version rids c-lightning of bugs to make the process more efficient.

Read more: ‘Multi-Part’ Payments Could Bring Bigger Bitcoin Sums to Lightning Network

Complementing this are improvements to c-lightning’s “route hint” feature, which gives a payer a warning if there isn’t enough liquidity along a given payment route to complete the transaction. The upgrade now provides multiple route hints to the benefit of multi-part payments.

But perhaps the most exciting update comes in the form of c-lightning’s multifundchannel plugin. With this feature, it’s now possible to open multiple channels with a single commitment transaction with c-lightning. 

When trialing the feature on testnet, Blockstream’s team was able to open up 106 channels with a single transaction, though theoretically, even more channels could be opened simultaneously with the feature.

“With MPP, we go from a single channel being the bottleneck to being able to aggregate the capacity of multiple channels, and thus enable a much wider range of payments,” Blockstream c-lightning developer Christian Decker told CoinDesk.

“This increases the efficiency of both the Bitcoin network and node operation, ultimately making it easier and less expensive for nodes to open multiple smaller channels and it encourages them to contribute to the structural resilience of the Lightning network by reducing single points of failure.”

Different implementations, complementary parts

In our correspondence, Kirk-Cohen claimed that the new Faraday release, when taken in tandem with other recent LND updates, signals that the Lightning Network is ready for business and enterprise adoption.

“The recent release of Wumbo in lnd v0.11.0 was a sign that we believe the software has matured to the point where businesses and serious node operators can start to move more capital onto the network. The release of accounting reports in Faraday is a continuation of that message, Lightning is ready for the big leagues.”

Read more: Ready to Wumbo: LND Enables More, Larger Bitcoin Transactions on Lightning

LND and c-lightning are two distinct implementations, but their respective features provide complementary building blocks to improve the Lightning Network’s overall tech stack. LND’s Wumbo features, for example, allows high-liquidity node operators to open larger channels and thus increase their ability to route incoming payments. 

For its part, c-lightning’s multi-part payments and multifundchannelplugin complement Wumbo channels by making it easier for smaller-account holders to open multiple channels, Decker said.

“MPP and multifundchannel are complementary with Wumbo channels, which mostly enable the operation of larger nodes that have the necessary funds available to open large backbone channels. While a stable network backbone of large channels is good to get payments from one end of the network to another, they may also pose a risk, since they increase the reliance on individual channels. It is our belief that maintaining a balance between large node operators (to build a solid backbone) and smaller node operators is paramount for the survival of the network.”

Related Stories

• Market Wrap: Bitcoin Slumps to $10.7K; Ethereum Fees Rise Again
• First Mover: Federal Reserve Does What It Wants to Do as Bitcoin Hits $11K

There is now more than $1 billion worth of bitcoin on Ethereum, record-setting transaction volume is boosting Ethereum miners’ revenue and VeChain joins China’s food safety watchdog to build track and trace capabilities. 

Top shelf

Token reflections
Uniswap’s decision to airdrop its new governance token was less about competing with its genetic clone SushiSwap, and more about building a community, CoinDesk’s Brady Dale reports. “I think it’s genius in every way,” Robert Leshner, Compound’s founder, said. “It brought a huge number of users into the fold.” Tokens were airdropped not just to liquidity providers (LPs), but essentially anyone who has played with the app – meaning upwards of 250,000 unique Ethereum addresses that have made trades on it could come into possession. This could help Uniswap achieve the effective decentralization necessary to avoid the prying eyes of the U.S. Securities and Exchange Commission. While the token is likely to spur a new round of liquidity mining, bumping up transactions fees on the platform, Dale also suggests UNI could be a means for the protocol – which raised an $11 million Series A – to repay its investors. 

Ethereum records
Ethereum miners earned a record $16.5 million on Thursday as the number of transactions on the network ticks up. More than 42,763 ether (ETH) were paid out in transaction fees for 1.4 million transactions – another all-time high. CoinDesk’s Paddy Baker points to a meteoric rise in decentralized finance (DeFi) to make sense of the surging Ethereum activity. There is currently over $9 billion worth of assets locked in DeFi applications, according to DeFi Pulse, up from approximately $675 million at the start of the year. Decentralized exchanges too are growing – led by Uniswap, Curve and Balancer – having recently surpassed $16 billion in total monthly volume. 

Related: Money Reimagined: Climate-Friendlier Crypto

Community points
The number of monthly users who earned T-Points, or loyalty points, for bitcoin (BTC) payments on the bitFlyer exchange in Japan reached a record high in August. Though the exchange did not specify the number of users of the service, CoinDesk Japan previously reported approximately 30% of new visitors to the exchange are in their 20s. BTC was trading at 1.3 million Japanese yen ($12,400) in August for the first time in a year. Midori Kanemitsu, a market analyst at bitFlyer, indicated that this reflects a larger trend: against the backdrop of COVID-19 and global monetary easing, bitcoin is shifting from a speculative investment for individuals to an institutional hedge against inflation. 

Track and trace
The VeChain Foundation has become the first blockchain-based entity to join the China Animal Health and Food Safety Alliance (CAFA). According to a blog post, VeChain joins the 130 strong member group as its only public blockchain technology provider, and will further provide technical and infrastructural support for member firms. According to the post, CAFA intends to build a “farm to table” traceability system across China that would record the various stages of the food supply process on the blockchain in order to build trust with consumers.

Wallet challenge
U.S. Homeland Security’s Science and Technology Directorate (S&T), wants you to build its next digital wallet. CoinDesk’s Danny Nelson reports the directorate is putting $25,000 up for grabs in their new digital wallet challenge, a user interface design competition to pair with DHS’s work in the blockchain and decentralized identity space. Finalist wallets must demonstrate “ease of use and visual consistency, while supporting interoperability, security, and privacy,” said Anil John, technical director of S&T’s Silicon Valley Innovation Program (SVIP). Applications are open through Oct. 15, with the chance for three finalists to win $5,000 and an additional $10,000 to the competition winner.

Quick bites

• Investment Firm Blockchain Capital Joins Libra Association (Paddy Baker/CoinDesk)
• Ex-Employee at Australian Science Agency Avoids Prison After Mining Crypto on Supercomputers (Sebastian Sinclair/CoinDesk)
• How US States Are, and Aren’t, Easing Crypto Firms’ Compliance Burden (Nikhilesh De/CoinDesk)
• US Space Force Uses Blockchain to Bolster Security (Will Heasman/Decrypt)
• Turkey the Crypto King of the Middle East: Report (Mathew Di Salvo/Decrypt)

At stake

Tethered together?
A New York Supreme Court justice reiterated his call for Bitfinex and Tether to turn over documents detailing their financial relationship and history, in a Thursday hearing. 

Related: First Mover: Uniswap’s Sudden $5B Token Valuation Cements Comeback From ‘Vampire Mining’ Attack

Judge Joel M. Cohen, the judge who has been overseeing the New York Attorney General’s (NYAG) office’s examination pertaining to the sister firms’ alleged $850 million cover-up, is applying pressure in what appears to be an attempt to speed up what has become a 17-month-long investigation. 

Bitfinex’s legal fight with the NYAG began in April 2019, when the state prosecutor first alleged that Bitfinex had lost access to $850 million in funds held by Crypto Capital Corp., a payment processor whose operators were later indicted by the U.S. Department of Justice. 

Stablecoin issuer Tether extended a line of credit and provided a loan to Bitfinex to cover the shortfall. The NYAG’s office requested access to the documents surrounding this deal.

Specifically, the NYAG wants to know where the funds went, whether any of the funds went to company executives and why transfers from Tether to Bitfinex were necessary. 

Bitfinex and Tether are now appealing this request for documentation, with its representatives saying it is “literally impossible to comply with,” because the NYAG’s office has asked for “all documents” around USDT. A legal representative compared the request to “asking GM for all documents about cars,” earlier this week. 

Defendant’s counsel also argues the investigation is past its prime. “We’ve now had 17 additional months of disclosure. All the dirty laundry about Crypto Capital has been aired … Whatever risk there may have been 17 months ago is gone,” Charles Michael, an attorney with Steptoe and Johnson, representing Bitfinex, said. 

Cohen didn’t set a firm deadline for when Bitfinex and Tether would have to produce these documents, leaving that decision to a special referee, but said a deadline would need to be set. As part of his order, he extended an injunction that would have ended in the next few weeks barring Tether from loaning funds to Bitfinex by 90 days.

Market intel

Indecision reigns?
Bitcoin clocked highs of $11,104 and $11,050 on Wednesday and Thursday, respectively, but printed a UTC closing price below $11,000 on both occasions. Indecision is now the mood of the market. Increasing amounts of bitcoin are leaving wallets associated with miners for exchanges, an indication of selling pressure. According to data source Glassnode, 1,113.85 BTC were transferred to exchange wallets from miner wallets on Sept. 13 – the biggest single-day outflow since December. Should the latest indecisive price action end with an upward move, the focus would shift to the next hurdle at $11,200, CoinDesk’s Omkar Godbole reports. 

$1B bitcoin
Over $1 billion worth of bitcoin has been tokenized on Ethereum as of Thursday, CoinDesk news reporter Zack Voell found. In January, less than 1,200 BTC were tokenized worth less than $7 million. There are now more than 92,600 tokenized bitcoins (BTC), representing 0.42% of the total BTC supply. Wrapped bitcoin (WBTC), the largest tokenized bitcoin project, has minted over 60,500 tokenized BTC since its launch in early 2019, representing over 65% of the total tokenized BTC supply, while RenBTC, the second largest tokenized bitcoin project, has issued 22,000 tokenized bitcoins since May. 

Op-ed

A little reality
Preston Byrne, a CoinDesk columnist and Anderson Kill partner, wants American companies to stop issuing tokens and airdrops. Reflecting on Uniswap’s decision to distribute their new governance token widely, Byrne writes, “Cheerleaders will say that entrepreneurs are leaving money on the table by not doing a Uniswap-style airdrop to the American public. … But as a practical matter, many, if not most, of [token sales are securities]. No mental gymnastics, no think-pieces, no cryptographic magic dust, no novel naming conventions, and no “gotchas!” can work around the fact that courts work with economic reality, and economic reality on this most recent DEX token airdrop looks a lot like an investment contract.”

Podcast corner

Pal’s polemic
Raoul Pal, CEO and co-founder of Real Vision, joins the latest episode of The Breakdown for a wide-ranging conversation into the mechanics behind the Federal Reserve, stablecoin disruption and why all macro debates are boring. (Editor’s note: Not this one.)

Who won #CryptoTwitter? Related Stories

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Uniswap’s UNI token may be only two days old, but its price has already risen by around 100%.

• Data from CoinGecko shows the UNI token price has surged from just under $2.80 to a high of $5.80 in the past 24 hours.
• The so-called governance token’s market cap is now over $430 million, which makes it the 39th largest cryptocurrency in the space on CoinGecko’s rankings.
• The token started Thursday morning with a total value of approximately $50 million, meaning it’s seen a near nine-fold increase in the past 36 hours or so.
• UNI is trading around $5.48 at press time.

• Uniswap only unveiled its new token, which will be used to power on-chain governance, late on Wednesday but it has quickly gained traction.
• Coinbase – an exchange that’s usually picky about the assets it lists – added UNI to its Pro trading platform just hours after the launch.
• The project plans to issue all one billion UNI tokens to the community, founder and the team over the next four years.
• Further, the project gave away a minimum of 400 UNI to anyone who had used Uniswap prior to September – an amount now worth over $2,000.
• Should UNI continue at its present trajectory it could soon take over from decentralized lender Compound’s COMP token – currently with a $540 million cap – which itself experienced a major price hike back in late June.
• Uniswap is already the number one DeFi project by crypto locked in, according to DeFi Pulse.
• Its $1.47 billion locked is nearly triple that of rival decentralized trading protocol, SushiSwap

See also: Uniswap’s Distribution Is Built on Something That Can’t Be Forked: Actual Users

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Earlier this week, analysts with the cryptocurrency analysis firm Arcane Research were musing that new developments appeared to have slowed in the fast-growing blockchain arena of decentralized finance, known as DeFi. But they predicted any lull was likely to be temporary.

“A new boost for DeFi tokens could be right around the corner,” Arcane wrote Tuesday in a report. “The sector seems determined to grow further.”

As if on cue, the decentralized exchange Uniswap late Wednesday made a surprise delivery of its new governance tokens to anyone who had ever used the project. Traders each got at least 400 of the UNI tokens, worth about $1,200 – prompting some witty commentators to call  it “stimulus for Ethereum users,” since it was the same amount as the coronavirus aid checks mailed out earlier this year by the U.S. Treasury Department. By mid-day Thursday, more than 50,000 addresses were holding UNI tokens.  

Related: INX Crypto Exchange Has Started Distributing Tokens From Its Blockchain-Based IPO

The project also allocated tokens to its team members, investors and advisers, for a total supply of 1 billion of the UNI coins. And just like that, the token issuance gave Uniswap an implied market token valuation of $3.7 billion on a fully diluted basis, making it instantly one of the largest projects in DeFi and even pushing Uniswap into the top 10 of the entire crypto industry. 

By early Friday, the value had grown to $5.4 billion, according to Token Terminal, a digital-asset market data website. 

CoinDesk’s Muyao Shen described the early trading action as a “roller-coaster ride,” perhaps because nobody really had any idea what the tokens should be worth. But the token issuance represented a quick paper profit for big venture-capital investors like Andreesen Horowitz that had joined an $11 million funding round for the project just last month. 

The capital event also cemented a comeback for Uniswap, which last week had many of its users lured away to a two-week-old copycat project called SushiSwap, via an apparently legal maneuver known as a “vampire mining” attack. SushiSwap managed to migrate more than $800 million in crypto assets from Uniswap.

Related: Money Reimagined: Climate-Friendlier Crypto

The new token’s debut touched off a flurry of announcements by major centralized exchanges like Binance and Coinbase Pro looking to cash in on the hot demand for DeFi-related anything; they listed the UNI tokens within just a few hours of the release. The OKEx exchange even offered a full set of trading tools for hedging UNI, including for spot trading, margin, swap trading and coin-margined perpetual swaps. Coinbase is among the project’s investors.

According to CoinDesk Senior Reporter Brady Dale, the UNI launch could touch off a “fresh new boom” in the phenomenon of liquidity mining, where users of projects are rewarded for their patronage with extra tokens, similar to credit-card rewards programs. Liquidity mining on Uniswap was set to start Sept. 18 at midnight, coordinated universal time. 

“With their new token and broad distribution model, I believe it will significantly help them grow and retain their liquidity while building trust,” Paul Veradittakit, partner at Pantera Capital, told Dale.

Ethereum congestion

The Uniswap rollout may have contributed to congestion on the Ethereum blockchain, pushing up already-inflated transaction fee rates, CoinDesk’s Daniel Cawrey reported. 

The average transaction fee on the Ethereum network rose to about 0.03 ether, a 10-fold increase from June levels, with the fee rates themselves set based on market conditions, according to data aggregator Blockchair.

Jean-Marc Bonnefous, managing partner of Tellurian Capital, which invests in DeFi, told Cawrey that Uniswap’s surprise token launch could only make the situation worse. 

“There has been a fair amount of congestion for some time already and we now have the very popular one-off airdrop of the much awaited Uniswap token UNI that is the talk of the town,” said Bonnefous. “DeFi definitely sets the agenda in the digital assets markets this month.” 

Bitcoin Watch

Bitcoin is up 6% this week despite the recent spike in flow of coins from miner wallets to exchanges. 

According to data source Glassnode, 1.1 million BTC were transferred to exchange wallets from miner wallets on Sept. 13. That was the biggest single-day outflow from miners to exchanges since December. 

An increase in inflows into exchanges implies increased selling pressure. That’s because miners and investors usually move coins to exchanges when they want to liquidate their holdings. 

So far, however, bitcoin has remained resilient. 

“The rotation of money out of alternative cryptocurrencies and into bitcoin seems to be pushing bitcoin higher,” senior cryptocurrency trader at Zurich-based Crypto Broker AG, told CoinDesk in a Twitter chat. 

– Omkar Godbole

Read More: Bitcoin Rises Back to $11K Despite Signs of Indecision in the Market

Token Watch

SushiSwap (SUSHI): On-chain data analysis by IntoTheBlock appears to show yield farmers “dumping their SUSHI on retail investors.” 

Wrapped Bitcoin (WBTC): Tokenized-for-Ethereum-blockchain version of bitcoin surpasses $1B supply as cryptocurrency traders seek yield opportunities in DeFi.

What’s Hot

Prompted by surge in Ethereum blockchain fees, prediction-market technology firm Gnosis is copying all its smart contracts over to sidechain xDai, where fast and stable transactions can be had for fractions of a penny each (CoinDesk)

Cryptocurrency brokerage firms and prime brokers “have become the equivalent of supernodes” in digital asset-markets (Binance) 

Bitcoin network becomes less dominated by whales, with “smaller accounts comprising an increasing proportion of the aggregate supply” (Coin Metrics)

The tech arm of Societe Generale has confirmed plans to use up to five different blockchains to test digital securities and a central bank digital currency​​​​​​​ (CoinDesk)

In just eight weeks, Yearn.Finance has exploded in value, from its humble beginnings as a yield aggregator to a complex DeFi ecosystem managing more than $1 billion in assets (Messari)

Increasing transfer volume on Bitcoin blockchain might represent rising over-the-counter trading deals (Arcane Research):

Analogs The latest on the economy and traditional finance

Key U.S. markets pricing in risk of delayed or inconclusive result from upcoming presidential election, JPMorgan says (Bloomberg)

Trump says he “agrees with a lot” of $1.5T bipartisan House stimulus plan (Bloomberg)

Asian stocks on Friday mustered limited gains as investors continued to worry about a faltering recovery in the economy (Reuters)

Indonesia’s rupiah clocked a two week high Friday, a day after the country’s central bank decided not to change interest rates, saying it wouldn’t be influenced by politics on monetary policy (Reuters)

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