Uniswap Dominates DeFi Scene, Cross $2.09 Billion In Total Asset Value Locked (TVL)

After a slow start, decentralized finance (DeFi) picked up throughout 2020, with over $11 billion in digital assets locked on these platforms. Uniswap, the decentralized exchange (DEX), becomes the first DeFi platform to cross the $2 billion milestone in total value locked (TVL). Such is the growth of the industry that Uniswap’s TVL was larger than the entire DeFi industry three months ago.

DeFi Pulse UniSwap 2 Billion TVL
Source: DeFiPulse

According to DeFi Pulse, Uniswap’s total locked assets’ value stands at $2.09 billion, as at the time of writing. This represents a sharp 800% surge in the value of assets locked in the DEX since August 8, just a month ago. Ethereum (ETH) leads in value with 2.9 million ETH (or 2.90%of the total ETH) placed in liquidity pools on the platform. ERC-20 based USDT and wrapped Bitcoin (wBTC) close out the top three positions.

The TVL in Uniswap represents 18.67% of the total TVL locked in DeFi products, currently standing at $11.1 billion. Maker, a lending and borrowing platform that allows minting of DAI stablecoin, is second with a total TVL of $1.93 billion.

Uniswap is an Ethereum based DEX that leverages liquidity pools instead of order books utilizing an automated market-making system for users to swap any ERC-20 standard-based token. Liquidity providers are then incentivized with the trading fees collected (about 0.03%) paid out to their addresses.

The spike in Uniswap’s TVL can, however, be greatly attributed to the launch of its native token, UNI, earlier this month. Shortly after losing close to $1.42 in TVL after the launch of Sushiswap, a similar platform, Uniswap has seen its fortunes change with the launch of UNI. It, however, should be noted that the drop in TVL was not fully attributed to Sushiswap.

On Sept. 17, UNI launched, airdropping over $500 million in UNI tokens to Uniswap users, which led to a sharp recovery in assets placed in the platform. In less than 48 hours after UNI’s launch, Uniswap’s TVL grew from $748 million to $1.9 billion, showing a great impact of the DEX.

With 4 billion UNI’s still set to be distributed to the Uniswap users, the DEX is on course to be the first DeFi platform to hit the 410 billion in TVL milestone.

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Author: Lujan Odera

ConsenSys to Lead Phase Two of Hong Kong and Thailand’s Cross-Border CBDC Project

ConsenSys has been awarded the contract to lead phase two of the cross-border payments ‘CBDC’ project between Hong Kong and Thailand. Dubbed project ‘Inthanon-LionRock,’ the initiative follows successful research by the central banks of both jurisdictions, which found an additional value case in building a cross-border CBDC.

According to the press release by ConsenSys, they will work alongside industry giants Forms HK and PriceWaterhouseCoopers (PWC) towards implementing the second phase. Notably, the project has been in the works since May 2019 when the Bank of Thailand (BoT) and Hong Kong Monetary Authority (HKMA) signed a memorandum of understanding to dig deeper into the value proposition CBDC’s.

With ConsenSys now in the picture, the joint CBDC between Thailand and Hong Kong will move past the research phase to a more practical era. ConsenSys has since been tasked with building a proof-of-concept (PoC) cross-border corridor to enable Hong Kong’s Lionrock and Thailand’s Inthanon networks to interact seamlessly. The press release reads,

“Using its enterprise Ethereum stack, ConsenSys will test solutions that prioritize scalability, security, and interoperability.”

This is not the first time ConsenSys works collaboratively with a particular authority towards designing and developing a CBDC. The blockchain software technology firm has, in the past, worked with the South African Reserve Bank and Monetary Authority of Singapore to create decentralized payment networks. ConsenSys Hong Kong Director, Charles d’Haussy, noted that they are thrilled to take on a new initiative in a similar line,

“ConsenSys is thrilled to lead this implementation of CBDC for cross-border payments. We are humbled to work on the development of Hong Kong’s financial infrastructure.”

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Author: Edwin Munyui

Over 2 Million Test Ethereum Staked On ETH 2.0 Medalla Testnet; Q4 2020 Launch In Sight?

  • Over 2 million staked in Ethereum 2.0 Medalla testnet.
  • Over 63,000 active validators are testing the new update.
  • Spadina Testnet set for launch on Tuesday, September 29.

Over the past four or so years, the Ethereum community has worked tirelessly in developing Ethereum 2.0, an update aiming to switch the current proof-of-work (PoW) consensus mechanism to a proof-of-stake (PoS) mechanism. According to data provided by Beaconcha.in, Eth 2.0 is edging closer to reality with huge participation in staking on the recently launched Medalla testnet.

The testnet block explorer shows over 2 million test ETH, named Görli ETH, are collectively staked on the Medalla testnet and a further 63,395 validator nodes activated. Over 5,200 validators are in queue to take up validator nodes, as at the time of writing.

Ethereum 2 0 Beacon Chain Phase 0 Block Chain Explorer beaconcha
Source: Beaconcha.in

Such a huge uptake in the testnet version shows an increasingly positive appreciation of ETH 2.0 as the staked amount increases. The participation range of the validators on Medalla testnet has ranged between 70% and 80% in the past 24 hours, averaging 63% since its launch a month or so ago.

ETH 2.0 is set to usher in a new world for Ethereum users allowing any ETH holder to stake 32 ETH to get rewards. Shifting the blockchain to a PoS network will set in a new consensus that will see a network of node validators stake their ETH to verify blocks added to a chain.

Staking on ETH 2.0 is, however, risky for malicious and careless node validators, who may see some of their staked ETH slashed. A validator can be slashed if they violate the Casper FFG rules or if they create two beacon blocks in one epoch. This discourages bad behavior and maliciously trying to cheat the blockchain into accepting a ‘bad block.’

ETH 2.0’s Spadina “small scale” Testnet

Today, Sept. 29, another testnet, Spadina, is set to launch a small-scale experiment to prepare the Phase 0 ETH 2.0 launch. Developers of Spadina aim a three-day “dress rehearsal” for the community to practice sending deposits, launching beacon nodes, and validator clients starting from genesis.

The small scale test net will only involve 1024 validators during the 72-hour rehearsal with the main net spec requiring 16384 validators to launch. Spadina’s mainnet launch will run co-currently with Medalla testnet in a bid to check for any bugs and risky activities in the process of launching ETH 2.0 Phase 0.

Medalla testnet hit 1 million staked ETH at the start of August, fueling the discussions that the ETH 2.0 launch could be fast-tracked to launch before the end of 2020. However, the process to fully transition to the proof-of-stake blockchain could take up to 2 years.

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Author: Lujan Odera

Crypto Funds Reporting ‘Impressive’ Performance This Year

Bitcoin had a good start in 2020, starting the year at around $7,200. During the market-wide crash in March, the digital asset crashed to $3,800 but only to surge to the yearly high of $12,630 in mid-August.

Up until August 31st, bitcoin recorded a return of 66.6%.

During the same period, Pantera unveiled returns of over 100% across various funds the firm manages, with its bitcoin fund gaining 61%, revealed the firm in its September 2020 investor letter. It was the company’s digital asset fund that recorded 168% returns and the ICO fund having a whopping 323% uptrend while the long-term ICO fund had a 270% return.

The outperformance of other funds has been primarily because of DeFi tokens that rallied hard between May and September of this year. The firm had invested in about 40 ICOs over the years.

Pantera’s Chief Investment Officers also pointed to DeFi as the main driver behind their portfolio performance. “We’ve been positioning the funds towards decentralized finance,” which they started acquiring some years back.

One of the largest digital currency funds in the space, Pantera, has reportedly nearly $500 million in AUM, compared to the largest asset manager Grayscale’s $5 billion AUM.

Also Read: Grayscale Bought 17,100 BTC Last Week, Now Holds 2.4% of Bitcoin’s Supply

Promise for value investing in crypto

Off The Chain Capital is another one that saw returns of 93% YTD compared to 57.2% returns posted by crypto funds during the same period.

The $40 million fund is also in talks to purchase about 1% of crypto-payments processor BitPay and another stake in the crypto exchange Kraken. Back in March, the Florida-based company bought 1% of Polychain Capital and then a year ago a stake in Digital Currency Group.

Additionally, Off The Chain has been buying claims of creditors of Mt.Gox every week and is its largest buyer.

“I learned about Bitcoin” in 2014, said Brian Estes, who runs the fund. “Coming from traditional finance, I thought it was just a scam. After the Mt. Gox hack, my value instincts kicked in, I started doing due diligence. I read the Satoshi white paper, and it clicked with me.”

It was when he started investing in bitcoin and crypto startups like Coinbase. His son actually grew his money from $500k to almost $10 million at the end of the 2017 bull run, which Estes then bought and opened to outside investors last year.

Additionally, it is packaging Bitcoin and Ether into equity-like investments to sell them through brokerage firms.

“Even if Bitcoin doesn’t move, we are making 40-60% a year on harvesting these premiums,” Estes said.

“Off The Chain’s reported performance this year has been impressive and may indicate promise for value investing in the crypto space, even as it has fallen out of favor with traditional equity investors,” said Josh Gnaizda, CEO of CryptoFundResearch.

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Author: AnTy

Binance Launches Decentralized Stablecoin Via; Forked From Compound & MakerDAO

On September. 28, Binance announced the launch of Venus Protocol, an algorithmic money market platform that allows borrowing of over-collateralized loans, lending, and generation of new synthetic stablecoins, VAI. According to a tweet by Joselito Lizarondo, founder of Swipe Wallet and Venus Protocol, the BSC-based platform is a fork from Compound (COMP) and Maker (MKR).

Venus does not include any VC pre-mined tokens or team allocation funds in a bid to fully decentralize the project. The VAI token is a multi-collateralized stablecoin offering cross-chain collateral with other crypto assets based in the BEP-20 format.

The platform allows over-collateralized lending with 75% or lower of the assets supplied on the Venus Protocol and interest-earning on collateral supplied. Users can also stake their vTokens (e.g., vETH) to mint VAI stablecoin, which is pegged to the dollar at a ratio of 1:1. The statement from Binance reads,

“VAI is minted by the same collateral that is supplied to the protocol. Users can borrow up to 50% of the remaining collateral value they have on the protocol from their vTokens to mint VAI”.

The protocol is, however, governed by its governance token, XVS, which allows users to vote on issues on the platform such as adding collateral assets, initiating product developments, and major changes on Venus. At the start, Swipe wallet’s native token, SXP, will be used for governance “until there’s enough quorum of XVS mined to be sufficiently decentralized,” Lizarondo said.

A total of 20% of the mined XVS tokens will be allocated to the Binance launch pool, 1% to the Binance Chain Ecosystem, and the rest will be distributed to the miners. A total of 30 million XVS governance tokens will be mined by May 2024. Miners will be able to stake their Binance Coin (BNB), Binance USD stablecoin (BUSD), and Swipe’s SXP tokens to receive XVS tokens.

Binance also announced the XVS trading pairs would be listed in its Innovation zone, including the XVS/BTC, XVS/USDT, XVS/BUSD, and XVS/BNB pairs.

In September 2019, BEG reported Binance’s Venus project launch as a government-friendly replacement of Facebook-led stablecoin, Libra. But the Venus Protocol was clear to say that this wasn’t the same as the open project from Binance.

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Author: Lujan Odera

‘Large-Scale’ Crypto Exit Scams Detected in Estonia’s E-Residency Program

Estonia had granted foreigners remote access to its digital infrastructure through its e-residency program, which is now linked to cryptocurrency frauds abroad.

Amidst Europe working on improving its anti-money laundering rules, with EU banking watchdog calling for a single set of regulations after going through several related scandals, companies headed by Estonian e-residents have been involved in “a few large-scale exit scams,” where clients are unable to withdraw their assets.

The police’s Finance Intelligence Unit form last week said these companies that are registered overseas are also linked to organizing “suspicious initial coin offerings and the misappropriation of large sums within them.”

The Baltic nation’s reputation recently got a hit after seeing Europe’s biggest scandal with Danske Bank accused of funneling $230 billion in illicit funds through the Estonian branch.

Estonia, which has a 1.2 million population, has also been seeing the issuance of digital IDs, a program that started in 2014, to e-residents down from the 2018 peak, having already issued 70,000 from 174 countries.

In June this year, the nation also canceled the licenses of 500 crypto firms, 30% of the total, as part of the clampdown on illicit financial flows.

Still, a new set of frauds have been detected. Officials had warned earlier that the e-residency program, allowing non-residents to run businesses from abroad, needed changes to avoid criminal abuse and improve its security.

Police have also moved to curb down on companies that exchange and help clients hold digital currencies.

The e-residency team is currently working “hand in hand” with the police and the FIU. “The survey doesn’t show that all fraudsters have been e-residents, but that there have also been e-residents among fraudsters,” said its head Ott Vatter.

According to the police, a “considerable connection” with e-residents is raising the risk of reputational damage in the crypto sector of Estonia, where about a third of companies, 554, providing crypto services have at least one e-resident as a related party.

Compared to 1,234 companies with cryptocurrency licenses at the end of last year in the country, as of August, there were only 353.

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Author: AnTy

Grayscale Bought 17,100 BTC Last Week, Now Holds 2.4% of Bitcoin’s Supply

As the bitcoin price continues to remain under $13,000 for over a year now and around $10,000 for more than the past month, there is no better time to stack some sats.

With the leading digital currency still 45% away from its peak of $20,000, ‘buy the dip’ opportunities are being taken advantage of not just by small players but also big ones.

Grayscale Bitcoin Trust (GBTC) added 17,100 BTC to its coffers the past week, increasing its aggregate bitcoin position to 449,900 BTC. With this, Grayscale now holds 2.4% of the current bitcoin supply.

September has been a dull month, not just for the price of bitcoin but also for Grayscale. While BTC price is down -8% this month, Grayscale barely saw any change in its total bitcoin position up until Sept. 22nd, as per the data provided by Bybit.

This latest accumulation could be why bitcoin price didn’t dip further despite strong bearish market expectations.

“What’s interesting about Grayscale Bitcoin Trust is it’s Hotel California, those coins are free to come in, but they can never leave. It’s quite brilliant to perpetually drive more coins into the Trust, at the sacrifice of decentralisation,” said on-chain analyst Willy Woo.

“Investors can sell. Doesn’t mean coins in the Trust get released, just means the Trust becomes undervalued, attracting new investment. It’s a smart “one way valve” to ensure assets grow, including the fees over the long run,” he added.

More and more institutional players are taking an interest in bitcoin this year, especially after the central bank started printing money. Just last month, we saw MicroStrategy added bitcoin as an inflation hedge to its reserve. Then this month, it added more BTC, bringing the total to 37,800 BTC.

Interestingly, with this, MicroStrategy’s biggest investors that include major asset managers BlackRock and Vanguard and Norway’s $1 trillion oil fund — having a combined holding of about $100 million — also have indirect exposure to bitcoin.

As Micah Erstling, a trader at crypto market maker GSR, said, “Institutional curiosity and explorations continue to increase.”

Also Read: Bitcoin Scales Just Fine As A Store Of Value Says MicroStrategy CEO

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Author: AnTy

EY Debuts First ERP Solution on Ethereum and Enhances On-Chain Analytics Explorer

Consulting giant Ernest & Young (EY) has launched an enterprise procurement solution based on the Ethereum public blockchain. This initiative will leverage smart contract capabilities to enable participants to design and implement procurement contracts on a public blockchain. Dubbed the EY OpsChain Network, it will oversee a shift of Enterprise Resource Planning (ERP) into decentralized networks instead of the current frameworks, which are fundamentally centralized.

EY announced this development on September 27, noting that it will be the first of its kind to facilitate day-to-day ERP activities while benefiting from Ethereum’s decentralized architecture; interested prospects can try out the beta version for free. The press release further highlights that building on Ethereum’s public blockchain will increase efficiency through the automation of figures in procurement pipelines,

“It has become difficult to manage network-level agreements from inside a single enterprise resource planning (ERP) system. The solution allows buyers and sellers to operate as networks, automatically keeping track of total volumes and spend, and using globally agreed terms and pricing.”

The EY OpsChain Network is built on Baseline protocol, an open-source initiative developed by EY earlier in the year. This protocol is the base of fundamental core features given that it leverages zero-knowledge proofs, distributed identity tech, and off-chain storage. This will allow firms to interact with each other on the EY OpsChain Network without exposing sensitive or private data on the public blockchain.

EY’s global blockchain leader, Paul Brody, has since expressed bullish sentiments on adopting enterprise blockchain solutions. He had previously informed Decrypt that EY believes that more than half of all business contracts will be made on the blockchain by 2030. Brody said,

“Competition is increasing between networks of companies, their partners, and suppliers. The ability to work as a network, above the level of any single ERP system, is crucial. Doing so on a public blockchain means not having to persuade a company or supplier to join a costly, closed proprietary network.”

EY Blockchain Analyzer

Apart from the OpsChain Network, EY also made some new enhancements to its blockchain analyzer and explorer product suite. The newly integrated functions will enable clients to analyze on-chain crypto activity in-depth, an approach that could improve the management of compliance, legal, and fraud risks. Currently, the beta release supports only BTC, although plans are underway to feature Ethereum as well,

“The Explorer & Visualizer solution makes it possible for internal audit teams and forensics accountants to search for specific transactions, addresses, and blocks to gather relevant information.”

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Author: Edwin Munyui

YFI Founder Andre Cronje ‘Still Building’ the DeFi Project that Got Hacked for $16 Million

Amidst the craze and shift toward non-fungible tokens (NFT), DeFi sweetheart yEarn’s founder Andre Cronje’s latest project saw rug pulled on $16 million.

The project was Eminence Finance (EMN), an unreleased and unfinished gaming multiverse project whose smart contracts were deployed last night but without any announcement.

But nothing remains out of the sight of crypto, especially the DeFi degens, more so when Cronje is involved.

The community soon discovered the project that had zero information available about it except for the two tweets subtweeted by Cronje, who, in his explanation, today, said the project is “at least ~3+ weeks still away.”

The twitter account of eminence.finance already has over 5,900 followers.

As is natural in high-risk DeFi projects, people rushed in with their funds to get in on a new YFI-related project. In a matter of a few hours, $15 million funds were used to mint EMN tokens.

Liquidity soon hit the largest DEX Uniswap, and the EMN-ETH market saw volume rising to millions, still at $11.7 million. Meanwhile, the price of EMN that went to $0.00003739 has crashed to $0.00003052.

And just as is normal in the DeFi world, an attacker exploited the unaudited code and swept away with all the $16 million.

The exploit was a “simple one” – “mint a lot of EMN at the tight curve, burn the EMN for one of the other currencies, sell the currency for EMN.”

The hacker sent $8 million of the stolen funds to Cronje’s deployer account, all of which yEarn treasury will be refunding to the holders after he received “a fair amount of threats.”

Despite the debacle, Cronje hasn’t given up on the project and is still building Eminence Finance.

“I am also going to continue deploying test contracts. I have over ~100 deployed contracts, of which probably >half have vulnerabilities. Please wait for official announcements,” he said today.

Trader and economist Alex Kruger noted that the hack losses are small in comparison to the 20% crash in YFI, following the news, currently trading at $25,275, “where the real damage was inflicted.”

“Price will likely recover fast, markets have short memories for this sort of events. Hopefully there are some lessons in there for everyone involved,” he added.

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Author: AnTy

New Zealand Tax Authority Tells Crypto Firms to Disclose Traders Info & Transaction History

  • New Zealand’s tax authorities dialing down on cryptocurrency users and transactions in the country.

In a statement obtained by the local radio news station, Radio New Zealand (RNZ), New Zealand-based crypto firms must submit their customer’s crypto transaction information to the country’s top taxation authority, Inland Revenue Department (IRD).

According to the report, all companies dealing with crypto assets must “pass on customers’ personal details as well as the type and value of their crypto assets.” This is in a bid for the tax authorities to keep up with the virtual asset industry and formulate a policy that will best help New Zealanders report their crypto tax obligations.

Global tax regulators are heavily hitting on the crypto asset world. Recently, the U.S. Internal Revenue Service (IRS) introduced crypto laws on its 2020 tax laws, altering form 1040 to make it harder for crypto users and traders to escape their tax obligations.

However, Janine Grainger, chief executive of Easy Crypto, a New Zealand based crypto firm, said the latest effort by the IRD goes against the fundamentals of crypto – privacy. Terming the new rules as “heartbreaking,” Grainger said she would comply but questioned the law.

“Privacy is really important to us… one of the tenets [of] cryptocurrency in general is around having freedom and autonomy and privacy,” she said.

“[..]the point of privacy isn’t to aid people who have something to hide, it’s to ensure we have a fair, open and free society”.

Russia recently introduced an amendment that would see cryptocurrency miners forego their mining rewards and a law that forces crypto traders to disclose their crypto transactions or face criminal charges.

Related Global Crypto Tax News:

Read: Israeli Draft Bill Proposes Bitcoin be Defined as Currency to Cut Down the Hefty Capital Gain Tax

Also Read: Switzerland’s Canton to Allow its Citizens to Pay Taxes in Bitcoin & Ether Starting 2021

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Author: Lujan Odera