DeFi Leader, Aave, Rolls Out V2; Adding ‘Collateral Swaps’ to Reduce Loan Liquidations

Aave, a decentralized lending platform, launches Version 2 (Aave v2), bringing along a slew of new features to build more efficient decentralized lending solutions. While the added features all bring better efficiency to the platform, the new collateral swap feature is the poster boy for the Aave v2 launch on Thursday.

Furthermore, the launch coincides with the recent rise in Aave flash loans – reaching $1 billion – and rise to the fourth spot in rankings of the largest DeFi projects in total value locked (TVL) – recording $1.5 billion in TVL (10% of the total DeFi market cap).

The collateral swap feature

As mentioned, the new collateral swap is the most exciting feature in the new upgraded version. If a user wants to borrow across the DeFi ecosystem, users place their crypto as collateral, locking them up until they are repaid. For example, a user can put ETH as collateral against Maker’s DAI stablecoin to use it. However, they wish. However, this forces the user into a long position on ETH since they are locked for a set period.

If the price of ETH tanks, the user will be readily liquidated, as witnessed during the March mega-crash. The new collateral swap feature allows the borrower to swap their collateral for another token efficiently while using low gas costs. In the case that if the ETH price is collapsing, users can switch it for wBTC, AAVE, LINK, or even a stablecoin to protect them from volatile crypto price movements and potentially liquidations. Stani Kulechov, Founder of Aave, wrote in a blog post,

“In DeFi, assets that were being used as collateral were tied up, but now with V2, they are free to be traded,”

“Users can trade their deposited assets, across all currencies supported in the Aave Protocol, even when they are being used as collateral.”

The collateral swap on Aave v2 is supported by a new flash loan, a new feature on the upgrade, allowing users to open and close a loan within one block. The new feature aims to quicken the process and reduce the fees when repaying loans giving users a seamless experience.

“This new feature allows users to close their loan positions by paying directly with their collateral in just 1 transaction — smooth and simple.”

Native credit delegation introduced

Aave v2 encompasses a host of features, including credit delegation aiming to revolutionize the decentralized lending industry. According to Stani’s post, the credit delegation feature will “open up access to liquidity without [the user] needing existing capital.” Introduced back in July, the CD feature remained a hugely centralized feature on version 1, managed by the Aave development team.

The upgrade introduces a more decentralized power to users who wish to delegate their collateral to another account. In a statement to Coindesk, Kulechov called on developers to build systems atop the Aave v2 and solutions to boost credit delegation across the platform.

Other features added on Aave v2 include batch flash loans, flash liquidations, gas optimization, and stable & variable rate borrowing, allowing users to switch conditions on their loans at any given time, switching from regular and irregular rates.

The Aave community also recently passed the AIP-3 proposal that makes a move from v1 to v2 seamless. The statement reads,

“By using a Flash Loan powered migration tool, users will be able to make the transition without having to close their V1 loan positions.”

The migration will be launched later in the month.

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Author: Lujan Odera

Ethereum Rallies Above $400 as Proof of Stake Launch “ETH 2.0” Scheduled for Dec 1

Ethereum 2.0’s v1.0 has been released along with its mainnet deposit address. With this release, ETH 2.0 will have a genesis of 1606824000 — December 1, 2020, at 12 pm UTC.

There must be at least 16,384 32-ETH validator deposits made a week before the deadline for the genesis to trigger. In case the threshold is not met on time, the genesis will be kicked off whenever it does, as per the official announcement.

As expected, the price of Eth jumped above $407 in response to the much-anticipated news. Yesterday, ETH dropped under $375 despite bitcoin rallying.

But today, as BTC went back above $14,200, the crypto market turned green in tandem, and so did ETH, which continues to rise.

As Binance noted last month, the locking of ETH for staking could see a potential supply shock, which means a “dramatic price surge and trigger” due to “unprecedented levels of retail FOMO.”

Unlike the usual when ETH leads the rallies, this time, Bitcoin has been stealing the thunder as it increased by 30% in value than Ether’s mere 12% in the month of October.

But despite Bitcoin being back on the move today to the important $14k level, Ether is the one up 6%, the biggest gainer among the top 35 cryptocurrencies.

And with this, green has splashed across the crypto market.

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Author: AnTy

7 Major Central Banks Collaborate to Release First CBDC Report, Highlighting Key Principles

The Bank of International Settlements (BIS), along with seven other prominent central banks, has published a report on the feasibility of issuing CBDCs to complement monetary policy. According to the 26-page document, CBDC’s should be based on foundational principles and core features that will enable the prospectus digital currencies to function effectively.

The report, which is dubbed ‘Central Bank Digital Currencies: Foundational Principles And Core Features,’ is a collaborative effort between the following:

  • Bank of Canada
  • Bank of England
  • Bank of Japan
  • European Central Bank
  • Federal Reserve
  • Sveriges Riksbank
  • Swiss National Bank
  • Bank for International Settlements (BIS)

It was published on October 9 and will mark the first of its series, given that the BIS is expected to advance the CBDC research in collaboration with central banks.

CBDC Foundational Principles & Core Features

According to the report, a functional CBDC will need to meet some criteria when it comes to the underlying principles and core features. It highlighted three principles which include;

  • Coexistence: CBDCs should co-exist with other types of money that already run today’s markets.
  • Innovation and Efficiency: Features should focus on promoting efficiency and innovation.
  • Do No Harm: CBDC introduction should not compromise the current financial or monetary ecosystems but complement them instead.

The 14 core features were, in turn, derived from these principles; some of the notable recommendations that were made include;

  • Secure and Resilient; To uphold the operational integrity of CBDC ecosystems.
  • Convenient; To enable seamless interaction with existing fiat currencies.
  • Value additional; To include the private sector and create a competitive environment for innovation.

The BIS co-chair and head of innovation hub, Benoît Cœuré, said that the newly released report would provide an opportunity to further delve into CBDC’s,

“A design that delivers these features can promote more resilient, efficient, inclusive, and innovative payments.

Although there will be no ‘one size fits all’ CBDC due to national priorities and circumstances, our report provides a springboard for further development of workable CBDCs.”

Recent months have seen a growing interest in the CBDC space; China, which piloted its digital yuan back in Q2, is now boasting close to $162 million e-RMB transactions. This initiative has particularly fueled the CBDC craze as other giant economies look to get a cutting edge.

South Korea announced this week that it will also pilot it’s ‘digital won’ in 2021, although they are yet to settle on whether a CBDC will be necessary. Likewise, the latest BIS CBDC report’s contributing members did not signal that their respective jurisdictions will be launching CBDCs.

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Author: Edwin Munyui

Bitcoin’s Role as a Hedge Against the Global Financial System Back in Question

As markets go through a rough time, along with the bitcoin, people are back to questioning the largest cryptocurrency’s role as a hedge against the macro disorder.

The same was said in March when bitcoin crashed along with the rest of the stocks, oil, gold, and other assets.

That time, the coronavirus pandemic rattled the markets that pushed oil futures into negative for the first time ever and bitcoin to $3,800.

Unlike the traditional markets, crypto markets don’t have any plunge protection, no circuit breakers to prevent the asset from plunging further.

However, crypto derivatives exchange BitMEX did prevent BTC from going to zero by shutting the exchange down because of a DDoS attack, and the digital asset only plummeted to $3,600 level on the platform.

This time again, as markets make a U-turn after flying high since the March crash, bitcoin followed suit.

According to on-chain analyst Willy Woo, this is because bitcoin is still finding its foot and isn’t big enough yet.

Additionally, the asset that has replaced cash as a reserve asset in the balance sheet of three companies in the past month wasn’t the only one to plunge.

Traditional safe-haven asset gold is down just the same. This week, the precious metal lost 3.8% of its value.

Does it mean the bullion is no more a store of value? Not at all!

As a matter of fact, Warren Buffett, for the first time ever, invested in gold after ditching his bank shares.

This move from the billionaire came after the yellow metal crashed hard during the March sell-off, just like it did in 2008 before surging upwards.

The same could be said for the digital gold, which is still a nascent asset class with a growing adoption rate and still down 50% from its all-time high, which means a lot more potential for a new peak.

Why the Pullback?

The flagship cryptocurrency briefly breached $12,000 on Tuesday only to drop to about $10,000 level on Wednesday. The asset has fallen 16% since Tuesday that puts in on pace for its worst two-day stretch since the second week of May.

“Part of the reason for the sell-off is technical in nature; its price broke below key support, confirming a head and shoulders pattern, which accelerated the decline,” noted research firm Delphi Digital.

The short-term pain in the crypto market has come amid the worst daily decline for the S&P 500 since early June and the largest one-day spike for the VIX Index in almost three months.

This sell-off, besides being technical in nature and mirroring the broader sell-off in traditional markets, is also because of the DeFi craze that was “overdue for a pullback.”

According to some like trader Crypto Whale, the digital asset can still go down to $3,500 and fill the CME gap, which has happened 99% of the time.

“I believe there’s still a likely chance Bitcoin drops below $3,500 and fill the lowest CME gap before we see a real bull market,” he said.

Could this happen, sure, but will this happen, that’s to be seen. The market already saw it in March, and after falling momentarily to this level, it went back to $6,000 level the next day.

For now, bitcoin is struggling at the key psychological level of $10,000, having fallen under it today.

The fall in price had the open interest in CME bitcoin futures continuing its correction that started last week, shedding another 1000 contracts this week. While Leveraged Funds increased their shorts positioning noticeably this week as did the asset managers long.

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Author: AnTy

Liquid Exchange Set To Delist Zcash (ZEC) And 28 Other Privacy Enabled Cryptocurrencies

Japan’s crypto exchange, Liquid, has delisted the privacy-enabled Zcash (ZEC), along with 28 other coins in order to comply with Singapore’s regulations. The exchange plans to get an operating license in Singapore, hence with the swift changes made.

The Electric Coin Company (ECC), a non-profit organization overlooking the development of the Zcash public blockchain, however, dismissed the delisting: claiming ZEC is compliant with regulatory authorities.

Liquid Delists ZEC to Comply with Singapore Laws

In a tweet sent out on Friday, July 24, 2020, ECC said Liquid had notified them of their plans to shut down buying, selling, and trading of ZEC on the platform in compliance with Singapore’s laws. This follows a frenzy across Korean and Singapore based crypto exchanges delisting privacy coins due to the FAFT Travel rule notice issued at the tail end of 2019.

However, there is no official communication from Liquid exchange yet. We will follow up with the full list of delisted cryptocurrencies on the exchange.

Also Read: Coinbase Delists Privacy-Focused Cryptocurrency, Zcash (ZEC), In The U.K.

A Rash Decision to Delist?

According to the statement put out by the ECC, Liquid has made a rash decision to quickly gain the Singaporean license.

The argument revolves around whether privacy-focused cryptocurrencies such as Zcash (ZEC) and Monero (XMR) are regulatory compliant. ECC believes so. Jack Gavigan, the products and regulations head at the ECC, wrote a blog post in March 2019 explaining how ZEC can be AML/CFT compliant.

He explains that personal finance privacy is essential in the growing digital world, hence the need for privacy enabled currencies. On being compliant, Jack states that ZEC can be as quickly regulated as cash is regulated today. He wrote:

“The techniques and processes that have been honed and perfected over decades to detect and discourage the use of cash for money laundering and terrorist financing can be applied to Zcash, including customer due-diligence checks, record-keeping, and making Suspicious Activity Reports (SARs) when appropriate.”

No other exchanges in the 28 have been revealed yet. The ECC is willing to help exchanges understand how to become compliant with AML/CFT rules while trading ZEC in the future.

See More: BitOasis Removes Privacy Coins Zcash & Monero Without Notice to Users

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Author: Lujan Odera

Abra to Venture Into Global Financial Services Powered by Stellar’s Blockchain

Abra, a popular crypto-fiat wallet along with an exchange application, is planning to create a decentralized global banking solution built on top of Stellar blockchain. The move could be inspired by Stellar’s $5 million investment in Abra earlier this year.

Bill Barhydt, CEO of Abra during the SDF’s digital second quarter review meeting on July 15, talked about the company’s roadmap and emphasized particularly on “interest-earning capability,” which will be one of the most sought after features in coming days. Barhydt while talking about the upcoming services and features and the interest-earning services commented:

“This allows consumers, for example, people who aren’t even familiar with cryptocurrency, to store dollars and earn significant interest on those dollars.”

During the meeting, Barhydt also said that the interest-earning features would also be made available for cryptocurrencies along with the staking services.

How Does Abra Work?

Abra being a crypto/fiat wallet exchange app and now collaborating with banks, exchanges, and other financial entities and acts as a liquidity provider through its platform. Recently it has shifted its focus towards retail players to offer its application and expand its reach.

Elaborating on his plans for introducing interest-earning, Barhydt explained that they would partner with large institutional players who would work in tandem with its backend infrastructure to offer “a very sophisticated lending system.” Talking about their plans and how Abra aims to create the global banking solution, Barhydt said:

“For us to take this to another level, Abra is building an entirely new part of our business to facilitate the movement of funds globally, in real-time, using the Stellar network. What this will enable for us in all forms of global lending.”

He also explained that the success of defi in the past couple of years made him believe that the crypto market is more than ready to accept crypto lending and interest-earning potential that these digital assets posses. He explained:

“We want to take this to another level, and use the Stellar platform to enable traditional banking applications at a global scale truly.”

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Author: Silvia A

Ripple Price Jumped 24% Despite Co-founder Jed Mccaleb Selling 1.8M XRP A Day in April

In April, the price of XRP jumped from $0.174 to just under $0.23 along with the rest of the market after bitcoin’s price rallied. The digital asset ended the month with about 24% gains.

However, XRP still lost the third position, yet again, to the most popular stablecoin Tether (USDT) whose market cap has surpassed $8 million, over 33% in just two weeks.

Interestingly, XRP’s gains came despite Ripple co-founder Jed McCaleb selling 1.8 million XRP a day in April (about $400,000 worth of XRP) as per the report of The Crypto Associate.

“Ripple co-founder sells 54 million XRP. No one will ever sell 54 million BTC,” tweeted Urdi Wertheimer.

McCaleb made $12 million from the sale of XRP last month.

Does it really affect the price?

McCaleb received about 9 billion XRP as part of his compensation for his role at the San Francisco-based fintech startup Ripple.

The former Ripple CTO also sold 19 million of his XRP in February and the same as this time, the price of XRP spiked over 27% that month.

McCaleb, who is also the founder of the now-defunct infamous Mt. Gox and Ripple’s competitor Stellar Lumens (XLM) said earlier this year, “date shows there is no impact on the market (of his XRP sell-off) and I don’t see any reason why that will change.”

This was after a report from Whale Alert that tracks top blockchains analyzed McCaleb’s XRP sales activity as “insignificant” compared to XRP’s total trading volume per day but added that the “economic power and consequences of whales cannot be ignored.”

Whale Alert also stated at that time that at the rate McCaleb is selling his XRP, it would take him 20 years to sell all of it while acknowledging his settlement agreement with Ripple, to be expired sometime in 2020, that limited his selling activities.

A Quiet Quarter

In its first quarter of 2020 report, Ripple, the owner of more than half of XRP’s total supply, revealed that it sold $1.75 million in over-the-counter but zero XRP through exchanges, the second time.

It also talked about the success of its ODL that leveraged XRP digital asset, the USD transaction value jumped by 294%.

Ripple’s partner MoneyGram that is compensated to use its digital asset however, recently divulged that Q1 was a “quiet quarter” in terms of Ripple partnership.

During the earnings call, MoneyGram chairman and CEO Alex Homes said this partnership is “transformative for both the traditional money transfer and digital asset industry,” which allows them to settle currencies in seconds.

“This initial success encourages us to expedite expanding our use of On-Demand Liquidity,” he said.

The company has a variety of new services in the pipeline that will be rolled out later this year, he added.

Although it is a “good partnership,” Holmes said Ripple continues to work on its product and how they want to target various markets.

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Author: AnTy

US Treasury Dept and Industry Leaders Met to Discuss The Challenges In Crypto Compliance

The US Treasury Department, along with important figures in the crypto industry, have met to discuss the regulatory challenges in the crypto space.

On March 2nd, the Treasury made an announcement that it will be meeting with crypto experts and leaders in order to address the supervision and regulation of crypto assets.

Steven Mnuchin, the secretary of the Treasury, said he welcomes any responsible innovation that has the potential to make the financial system more efficient.

Innovation Compromising National Security?

Mnuchin also mentioned that national security may be threatened by innovation in the financial system, noting that:

“We must ensure that we balance innovation with the need to protect our national security and maintain the integrity of our financial system.”

According to the announcement released yesterday, the US Treasury Department focuses on preventing money laundering, terrorist financing and other illegal activities done with the help of crypto assets.

It further added that the US will fight for crypto regulation and that it won’t tolerate cryptocurrencies being used for any illegal activity.

The US Has Always Been in Conflict with Cryptocurrencies

Many US financial regulators have been very cautious and even hostile towards the subject of cryptocurrencies.

Even Mnuchin insisted last summer that Bitcoin (BTC) is laundered more than cash. In December, one of the US Federal Reserve’s governors stated that one-fourth of the people who use BTC are criminals and half of the BTC transactions are related to crimes.

The association of cryptocurrencies with illegal activities leads to the financial system being deprived of collaborations involving crypto assets.

Not long ago, the ChangeOutput blockchain communications shop’s founder, Justin O’Connell, mentioned that there are many banks not facilitating crypto-operating businesses just because there’s a belief that cryptocurrencies are being used for all sort of illicit actions.

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Author: Oana Ularu

SEC Files Charges Against Ohio-Based Business For Running A $33M Cryptocurrency Fraud

  • Michael W. Ackerman along with two business partners defrauded about 150 investors including physicians
  • Ackerman allegedly used $7.5 million of investor funds to personally enrich himself
  • SEC’s complaint charges Ackerman with violation of the anti-fraud provisions of the federal securities law

The US Securities and Exchange Commission has filed charges against an Ohio-based businessman, Michael W. Ackerman on Tuesday who allegedly orchestrated a cryptocurrency scheme to defraud about 150 investors including many physicians.

Ackerman along with his two business partners raised at least $33 million by claiming that he had developed an algorithm that can generate “extraordinary profits while trading in cryptocurrencies.”

One of the partners was also a physician who defrauded other physicians, taking advantage of a common profession. The victims particularly made investments in two entities, Q3 I LP and A3 Trading Club when introduced to the digital currency investment opportunity, as per the SEC complaint.

Exploiting popular interest in digital assets

The complaint alleges that Ackerman misled investors about the digital currency performance, use of investor funds, and the safety of these funds. The perpetrator is also accused of doctoring computer screenshots of Q3’s trading account to show it extraordinarily profitable.

The doctored screenshots also created the illusion that the account was heavily invested in digital currencies, holding assets of as much as $310 million when in reality there was no more than $6 million.

“As alleged in our complaint, Ackerman lured investors, many in the medical profession, into falsely believing that he generated extraordinary profits from his algorithmic trading strategy,” said Eric I. Bustillo, Director of the SEC’s Miami Regional Office.

“Ackerman exploited popular interest in digital assets as a means to obtain millions of dollars for his personal use.”

Ackerman is accused of using $7.5 million of investor funds to personally enrich himself that included purchasing and renovating a house, purchasing multiple cars, high-end jewelry and pay for personal security services.

Filed in federal court in New York, the SEC’s complaint charges Ackerman with violation of the anti-fraud provisions of the federal securities law and seeks a permanent injunction, civil penalty, and disgorgement plus prejudgment interest.

The case is currently under investigation and apart from SEC, the Commodity Futures Trading Commission (CFTC) and the U.S. Attorney’s Office for the Southern District of New York has also filed charges against Ackerman for similar conduct.

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Author: AnTy

Bitcoin Poised for a Run at $8k Says Trader but Extreme Low Volume Not a Positive Trend

  • Bitcoin, an uncorrelated asset moved along with gold as demand for safe-haven assets rose due to geopolitical tensions in the Middle East
  • Bitcoin might Moon if there is a war with Iran as it is the “best place” for flight capital – Clem Chambers of ADVFN.com
  • Trading volume meanwhile is below $200 million and dropping further on weekends

Four days into 2020 and Bitcoin saw a surge of 8% where it went from $6,850 to above $7,400.

As we reported, Bitcoin spiked in value just like gold which was because of the geopolitical tensions in the Middle East after the US airstrike killed Iranian general Qaseem Soleimani that pushed the demand for safe-haven assets.

Iran has been one of the “hotbeds” for Bitcoin adoption, propelled by the crippling US sanctions and its unstable economy.

Mati Greenspan, founder of investment firm Quantum Economics in his Friday newsletter points out how

“Until today bitcoin has largely been seen as an uncorrelated asset that does not usually react directly to what’s happening in other markets.”

Iran an unlikely driver

However, he notes that the Iranian market in itself is likely “too small and slow” to have caused this 8% upwards move in BTC price single-handedly.

What’s more likely is “one or several players have been waiting on the side for a good buying opportunity below $7,000 per coin and it seems one has presented itself.”

Economist and trader Alex Kruger also said that the narrative of Bitcoin being a safe haven and soaring because of Iran is “absolute nonsense.”

But Bitcoin might Moon if there is a war with Iran

Clem Chambers, CEO of private investors website ADVFN.com, however, says, Bitcoin will “moon” if the US has a war with Iran.

In the longer term, he says whenever there is trouble in the capital controlled countries like China and Iran, Bitcoin will be a “key asset.” This is because,

“while there are trillions in gold and oil to suck up demand, there is only a smattering of bitcoin to take the sort of buying surge a country like Iran could create were the situation to spin up into a large scale conflict.”

Bitcoin, according to him, is the “best place” for flight capital for those wanting to protect their assets.

In the short term, $8k is next

No matter the reason, Kruger sees Bitcoin heading higher.

Currently, the world’s leading cryptocurrency is trading at $7,298 with 24 hours gains of 0.72%, as per Coincodex. Meanwhile, trading volume is still low at below $200 million.

The 7-day average real trading volume has been continuously moving down. On January 1st, 2020, the volume was as low as $192 million. This level was last seen in April 2019.

During the weekends also the volume remains low. In fact, the middle of the week sees over 50% more volume than weekends, unlike earlier last year. Arcane Research notes,

“Although this could be related to the holiday period and less activity during weekends, this is not a positive trend for the leading cryptocurrency in the space.”

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Author: AnTy