Avalanche Blockchain Taps into the $10 Billion Market With An Initial Litigation Offering Token

In collaboration with Republic Advisory services and U.S-based law firm Roche Cyrulnik Freedman LLP, Ava Labs has announced the debut of Initial Litigation offering (ILO) using the Avalanche blockchain. This initiative will tap into the $10 billion litigation financing asset class to open up the market to more retail investors. Notably, the token is the first of its kind to be hosted within a blockchain ecosystem.

The initial ILO to be hosted on Avalanche blockchain will be a litigation financing towards an ongoing matter where the plaintiff Apothio LLC is accusing Kern County, California of unlawfully destroying 500 acres of Hemp; an estimated $1 billion according to market value. Apothio LLC, which specializes in the industrial research, development, and commercialization of cannabidiol oil (CBD), is expected to raise its ILO in Q1 2021.

Decentralized Litigation Funding

Litigation funding, which is also dubbed ‘legal financing,’ is an avenue for plaintiffs to raise resources to sustain their court matters to the end. Before the ILO token launch on Avalanche, this process was generally centralized and mainly attracted institutional players such as LexShares, a leading litigation fund.

Well, the field has now been leveled by Avalanche’s ILO; each token will represent a legal claim to a portion of the potential financial recovery. However, the funders will have to bear the full risk of capital erasure if claims that they choose to back are unsuccessful. Ava Labs’ Kevin Sekniqi commented on the value proposition of decentralizing litigation funding,

“ILOs are a breakthrough for both individuals lacking the resources to seek remediation, and for retail investors who are often locked out of the most highly-performant asset classes.”

“They are fundamentally unique from any other investments, and the creation of the ILO marks the first time blockchain technology will be used to democratize financial products at a multi-billion-dollar scale.”

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Author: Edwin Munyui

Malaysia Shariah Advisory Council Sees ‘Great Potential’ in Crypto; Unclear Laws Held Back Adoption

A Shariah Advisory Council chairman in Malaysia believes cryptocurrencies have great potential. The comments were made by Dr. Modh Daud Bakar, the Securities Commission Malaysia (SC) Shariah Advisory Council chairman. However, he also highlighted the challenges in adopting these digital assets, given the lack of understanding about the technology among the masses.

The chairman’s comments come just three months after a monumental judgment allowing transactions and trade of digital assets under the Islamic law.

Mr. Bakar made these bullish comments about cryptocurrencies during SCxSC Fintech Conference 2020 in Kuala Lumpur on Oct. 6. At the conference, Mr. Bakar also noted that only 2% of Malaysians know about the nascent technology. He said that since digital assets were not considered a legal tender under Islamic laws, it was seen as a commodity, quite similar to gold and silver. Bakar explained during the conference,

“It is a medium of exchange, and we cannot stop people [from using] commodities as a medium of exchange. It is as good as buying an e-ticket or commodities in the market.”

“The acceptance of digital assets] can open up so many interesting areas in Malaysia, in which crypto can be deemed as investment assets where people can buy and hold for trading. The potential of this currency is as great as it comes with a growing digital economy of the world.”

How does Shariah Law see Digital Assets?

There has been a great debate on whether digit assets are acceptable under the Islamic laws with differences of opinion based on regions. However, in 2018 an advisor to the Indonesian FinTech firm declared Bitcoin as permissible under sharia law. In July this year, Malaysia’s council declared digital assets trading as permissible.

With a population of over 60% of Muslims, Malaysia has benefited the most from this decision. It helps further the adoption of digital assets and offers more exposure to the new population to nascent technology like Bitcoin. Bakar concluded,

“This has opened opportunities to take advantage of cryptos as a commodity or investment in a company.”

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Author: James W

Zcash Foundation to Elect 5 Members to ZCAP to Control its 420,000 ZEC ($34M) Treasury

The Zcash Foundation has decided to select a new five-member board for Community Advisory Panel (CAP), who would be responsible for the to look after the deployment of 420,000 ZEC worth $36 million.

The selection of 5 member team would be based on the merit where the foundation would look for those people who have a broader understanding of the Zcash ecosystem and its applications. Zooko Wilcox, the founder of Zcash, said that the five-member team would responsible for managing one of the most significant controllers of the funds in the foreseeable future. He tweeted,

“Whoa! Major news! The Zcash Community Advisory Panel is open to new members! The ZCAP is about to elect the new five-person committee that is going to be the largest controller of funds in the Zcash ecosystem for the foreseeable future.”

CAP is the Zcash-powered community responsible for the governance decision on the Zcash blockchain. However, it is essential to note that the CAP community won’t have any unopposed say in any matter, and they cannot determine any significant technical changes such as a hard fork either.

How did the Idea of a new 5-Member CAP Community Come up?

The decision to bring in a 5-member new governance team arose from the community Zcash governance forum, where many demanded that the ZCash foundation must bring in a new 5-member team for CAP. After this, almost 35 members shared their interest in joining the new board.

After the demand surfaced in the community forum, the Zcash Foundation, along with Electric Coin Company, the Zcash code maintainer agreed upon the community demand. The foundation released an official statement after that which read,

“The Foundation wholeheartedly agrees with this sentiment and believes we can more broadly increase participation legitimately before the September 1 candidacy deadline. We believe opening up the CAP with this process is completely aligned with the community interest, and would result in a more effective and legitimate outcome based on experience similarly collecting community sentiment for the dev fund Zcash Implementation Proposals.”

New members can join the CAP can either participate by an official invite or any member from the existing 62 members from the Community Advisory Panel can join in the new board by September 1.

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Author: Silvia A

CFTC Tech Advisory Meeting Features Possible Fed-backed CBDC Scenarios

The CFTC Technical Advisory Committee (TAC) discussed a Fed-backed digital currency in the latest remote meeting which it held last week. This comes as more jurisdictions move to consider CBDC’s following China’s progress in this space and the COVID-19 pandemic that has since raised the need for digital money.

One of the keynote speakers, Georgetown Law Professor, Chris Brummer, presented some scenarios under which the U.S Fed could issue a CBDC, comparing the solution to that being advocated by stablecoins. Brummer was keen to highlight that not all CBDC’s are created equal hence multiple scenarios for a dollar-backed CBDC.

Dollar-backed CBDC Design Suggestions

In his presentation, Brummer further detailed six CBDC approaches that the Fed could take in developing a digital dollar. Most notably was the decision of whether to create an account or token backed ecosystem. The former is pretty similar to today’s bank accounts, only that into. A token ecosystem, on the other hand, will be less strict since no identification would be required to operate in the network.

Another suggestion was whether to have the CBDC on both retail and wholesale markets or only on the latter. Wholesale markets encompass commercial banks and other large financial institutions, while a retail market refers to the general public.

Brummer noted that this was another angle the Fed should consider before transforming the CBDC niche idea into a reality. He further summarized that the future of CBDC’s could only be dictated by the issuing authority since some central banks could decide to use commercial banks or issue the currency directly.

Greater Value Than Stablecoins

Recent months have seen stablecoins like the USDT gain popularity as stakeholders in the crypto market seek to preserve value while doing other activities such as yield farming. Brummer now says that CBDC’s set out to achieve a similar goal and could have the upper hand since trusted monetary authorities back them. Brummer said,

“Central bank currencies can be seen as trying to provide more certainty and safety, if one will, behind the utility that a traditional stablecoin aspires to achieve.”

While the underlying value compared to stablecoins is clear, Brummer, however, warned that adopting CBDC’s could destabilize the whole financial ecosystem as well. This is because central authorities might overlap the role of financial institutions in onboarding and serving clients, should they choose to roll out something like an account-based CBDC run by the Fed.

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Author: Edwin Munyui

CoinShares Reveals 5 Possible Scenarios Post BTC Halving; Which Outcome Is Likely?

CoinShares, a crypto investment advisory firm released a research report discussing various outcome scenarios of the upcoming Bitcoin block reward halving and its impact on the crypto industry. The halving event has brought back the attention on Bitcoin more than ever as it is evident from Google metrics data showing that the searches for the ‘Bitcoin Halving’ term have risen by 4 times that of pre-2016 halving event. Apart from that many other metrics such as the number of non-zero bitcoin wallets, numbers of new users, have peaked significantly as well showing the mammoth interest that the event has generated.

The pre-halving period has also brought back the trend of price predictions among several trade pundits many of whom believe that post halving Bitcoin price would rise to 5-figure mark. While price prediction in the crypto space has never aged well, that does not seem to deter these analysts from putting their bet on Bitcoin. A majority of the crypto-verse is highly bullish about the outcome, however, there are few others who also believe the halving event won’t have any major impact on BTC price.

CoinShares research on such possible outcomes was published on May 4th where the investment advisory firm’s head of research, Christopher Bendiksen discussed five possible outcomes of the event.

CoinShares Research on Possible Outcomes

1. The Halving Would Cause a Mining Death Spiral:

The first possible outcome of the halving which was considered by CoinShares was the chances of Halving leading to a Mining death spiral, where it was speculated whether the low cost of Bitcoin post halving would force miners to bailout from the Bitcoin game, which in turn would have a catastrophic impact on the network as no miners mean no transaction confirmation which would completely shut the Bitcoin network down.

However, the research found that the likelihood of such an outcome is zero and it is next to impossible that anything of that magnitude would occur.

2. Bitcoin Would Follow Stock-to-Flow and Rise to New Highs:

The second possible outcome post halving could be that the Bitcoin price follows the stock-to-flow chart and reach new highs. Stock-to-flow chart measures the scarcity of an asset and how the supply-demand scenarios play in. Bitcoin with its 21 million limited supply is only behind Gold in terms of scarcity and the upcoming halving event would make it even scarcer than gold.

The research believes there is a high likelihood of Bitcoin following the stock-to-flow chart which predicts its price to reach near $288k by the end of 2024

3. Traders Who Bought the Rumors Would Sell the News:

The third scenario under consideration was that a majority of the traders have jumped in prior to the bitcoin halving event based on rumors of a possible bull run. The Coinshares analysis suggested that although it is hard to analyze this outcome since it would require hard data on what percentage of trades bought in based on the rumors.

However, traders mostly invest based on retail demands, and thus they concluded that the chances of this scenario playing out are highly unlikely and even if traders sell their assets it wouldn’t be on a scale that it would impact bitcoin’s price.

4. The Halving Will Cause Extra Selling Pressure From Miners, Driving Prices Down:

The fourth scenario under consideration was that the block reward halving would cut down the profits of miners and if the prices don’t pick up they might be forced to sell their holdings leading to falling in Bitcoin price.

The Coinshares research analyzed that miners enjoy Bitcoin prices higher than their ROI breakeven mining costs, can help them in saving coins they get in the mining process, which in turn helps the Bitcoin price as well. However, if the Bitcoin price falls below the ROI breakeven line and is less, miners are not only forced to sell their mined coins but also their reserves which could lead to a decline in Bitcoin price.

CoinShares concluded that the chances of this scenario playing out is quite thin and chances of it even occurring would require a few other factors to play in especially scenario three.

5. The Halving Will be a Big Fat Nothing-Burger (At Least Initially):

The final possible scenario that might occur is actually, ‘nothing.’ This scenario suggests that Bitcoin halving would not have any impact on its prices i.e bitcoin would move between 1%-5% on both sides, but nothing out of the blue or headlines worthy would follow the Bitcoin halving event.

This scenario is based on the assumption that the supply-demand dynamics would take some time to kick-in but it would not have any impact right after the halving. CoinShares research suggest that the chances of this scenario playing out is highly likely and has been the case in the past event. Where Bitcoin halving in 2016 did not have any impact on BTC price almost for one and a half years before BTC broke into a bull run by the end of 2017

The study concludes saying,

“In our opinion, the likely outcome of the halving is a positive supply-side impact over the mid- to longer-term. The dual mining shakeout from the recent drop plus the halving has accelerated a reinvestment cycle among the lowest cost miners who have been the last ones to make the switch into the most modern generation of mining gear.”

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Author: James W

US Customs and Border Protection Advisory Group To Launch Blockchain Shipping Proof-of-Concept

An advisory committee for the US Customs and Border Protection (CBP) has revealed that they are intending to launch a live test of its blockchain-based intellectual property rights proof of concept.

The panel is called Commercial Customs Operations Advisory Committee (COAC) and has been monitoring the agency’s blockchain tests and had been expected to submit related recommendations at its quarterly meeting in December. The POC strives to facilitate shipments based on known licensing relationships through the use of blockchain.

Their most recent report says:

“The working group has been active with the current POC on IPR. Since the last in person meeting in March, the working group has progressed through the overall project design, implementation of the initial engineering plan, and integration of Trade and CBP systems. Live testing of the system will start at the end of August and conclude late September.”

The COAC advises the Secretaries of the Department of the Treasury (Treasury) and the Department of Homeland Security (DHS) on the commercial operations of U.S. Customs and Border Protection (CBP) and related Treasury and DHS functions. They are involved in three ongoing proof-of-concept projects involving blockchain technology.

This is particularly a remarkable movement towards blockchain adoption because CBP is the largest federal law enforcement agency of the United States Department of Homeland Security, and is the country’s primary border control organization.

Just last year, the agency launched a live test of a blockchain-based shipment tracking system. While testing, the agency intended to establish standards of interaction between different blockchains to ensure that all firms and software will be easily connected to customs without the need for additional customization.

In similar news, the Department of Homeland Security is seeking from the private sector solutions that use blockchain to digitally issue and verify licenses, certifications, and other documents related to supply chain security and other issues.

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Author: Sritanshu Sinha