Coinbase Wallet Users Can Now Earn Interest From DeFi DApps Directly In The App

The Coinbase Wallet has just integrated with decentralized finance (DeFi) apps in order to allow its users to lend crypto assets and track the growth of their interest straight from the wallet app.

As an announcement made by Coinbase on Wednesday says, Coinbase Wallet users are already putting millions into DeFi platforms through the wallet’s Dapp browser and WalletLink. Still, Coinbase wants to make their experience even more enjoyable. Until now, they didn’t have the option to compare rates from different providers, nor were they able to see the total of their balance with these providers with out leaving the app itself.

What Does the New Feature Bring?

According to the Coinbase announcement, the new wallet feature allows users who own a Coinbase wallet account to interact with lenders such as dYdX and Compound, which are both DeFi platforms. They can choose their coin and a smart contract provider in order to invest as much crypto as they want into one of the DeFi products.

As said before, they can view how much interest they’re earning and their total balance without having to exit the wallet. iOS users will have the new feature this week, while Android users will still have to wait a few more weeks.

DeFi Products Are Risky

Coinbase wanted to warn investors about the fact that DeFi products are quite new and present a risk. Caution was advised when using them. Here’s what the announcement reads exactly:

“Before you get started, please be aware that DeFi lending apps are relatively nascent and come with risks.

DeFi apps are programs running on the blockchain, and like any computer code they can potentially have bugs that cause you to lose money. Returns are not guaranteed and your deposits are not insured.”

Basic information and the definitions of minimum collateral or contract’s assets under custody are being provided for the wallet’s users to know better what contracts to choose. However, they’re still advised to do their own research in order to understand how the apps work and the risks they’re about to take.

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Author: Oana Ularu

OKEx Launches New C2C Loan Feature; Use BTC As Collateral To Get USDT for Trading

OKEx made a step into the DeFi world and launched its new consumer to consumer (C2C) loan feature that aims to match the demand and supply of idle capital transparently and openly.

The times when crypto exchanges were scrambling to have listings of the most active tokens are long gone. Nowadays, the competition takes place on completely new terrains like the ones of cloud services and IEOs, so OKEx wants to provide a peer-to-peer (P2P) loan service and launched its new C2C loan feature.

Users Will Transact Directly

The exchange says on its blog that the new C2C feature is going to allow direct transactions, whereas the demands for loans and investment will surely be met. Users can use the C2C loan button once they update their OKEx app. In order to buy money from peers, they will have to put Bitcoin (BTC) as collateral, after which they’ll get paid in USDT. More assets are to be supported soon, said OKEx. Some interesting features like choosing the rates for payments and the duration of the loan are also available for them.

What Happens If a Debt Isn’t Paid?

Just like with any other type of loan, there are risks involved with the C2C feature too. For instance, if the borrower is unable to pay the debt, OKEx employs its system especially built for such a situation. In case the collateral declines under the prewarning limit, the borrower is sent a warning message to increase it. If this isn’t done, the platform closes the position as soon as the price gets to the closing line. Borrowers will be in the position of losing their BTC, while lenders will be sure to not be left without their money.

OKEx is expanding more and more, trying to offer better tools and options to a variety of customers. Now it’s no longer a derivatives and spot trading service, but also a precursor of the DeFi’s development.

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Author: Oana Ularu

After Black Thursday, MakerDAO Opens Voting Proposal And Will Hold First-Ever Debt Auction

As Ethereum (ETH) price crashed by 30-40% on “Black Thursday”, the decentralized finance world (DeFi) showed signals of collapse with the largest DeFi protocol, Maker (MKR) contemplating shutting down in response to the value tanking.

However, following talks in the community with MakerDAO –governing council – and a revival of the price of ETH over the early morning on Friday, March 13, 2020, the community will vote on changes of the protocol to further carry out its first-ever debt auction.

Maker (MKR) is a platform that gives out collateral-based loans by producing Dai (DAI). The DAI is minted by users taking up collateral-based positions, mostly in ETH, and the ETH is stored on a smart contract. Once the collateral is locked, the contracts mint out a portion of the collateral value in DAI to give to the borrower.

Maker to carry out the first-ever Debt Auction

If the borrower cannot fulfill their debt obligations, then the collateralized ETH (asset) enters the liquidation phase allowing the smart contract to auction it off to pay the debts. However, as the crypto market exhibits an extremely bearish structure and the heightened pandemic of the COVID-19, the auctions were shortly not very attractive with some investors paying a total of ZERO DAI to gain the ETH.

One Maker community member said,

“Some vaults were liquidated with 0 DAI coming back in the system, resulting in a net loss for the system. The MakerDAO had a +500k$ surplus before the price drop and now has a -4M$ surplus that needs to be filled.”

With the Maker platform facing a $4 million deficit in debt obligations, the contract will self-execute on March 15 to open up the first-ever Maker Debt Auction. This means the contract will print out extra MKR tokens to reimburse the 44 million USD in DAI which will then be publicly available for auction.

The community is, however, remaining positive after the current carnage on Maker, stating the platform has become stronger. One member said,

“It was a trying day for #Ethereum, Maker, investors, and lots of other ppl in #defi — great to see the system prevail and while not perfect, it lives to see another day.

MakerDAO teams already reacting to work with $MKR governance to modify the system state.”

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Author: Lujan Odera

MakerDAO Partners With Payment Processor Simplex To Create A Fiat On-Ramp For Dai

In a press statement released on March 3, renowned DeFi player MakerDAO stated that it has inked a deal with Simplex, renowned payment processor, to develop a fiat-on-ramp for its decentralized stablecoin, Dai, Cointelegraph reports.

The new deal means that it is now possible to purchase Dai using both debit and credit cards from Simplex’s partner companies. Gustav Arentoft the business development head in Europe for Maker explained that the partnership will be beneficial to users now and in the future. He said:

“Having Dai integrated into Simplex is a benefit to current and future users, […] it gives them a straightforward fiat on- and off-ramp with access to the industry’s biggest players.”

A renowned firm within the DeFi sector, MakerDAO, is firm behind the decentralized stablecoin Dai that operates on the Ethereum network for smart contracts. By publication time, DeFi Pulse, DeFi data website, indicated that the decentralized finance applications have a total of $967.4 million locked in them where $550 million, approximately 56%, is locked within MakerDAO’s protocol.

Simplex holds the coveted European Union license for financial institution and boasts of more than 100 partners which support about 13 divergent cryptos as well as 19 various fiat currencies. At the moment, Simplex supports Bitcoin, Binance USD, Nano, Binance Coin, Dash, Tron, Litecoin, Ether, XRP, Cosmos, and Bitcoin Cash.

Simplex has also partnered with different crypto exchange platforms such as OKEx, Binance, OKCoin and KuCoin to enable card payments.

A spokesperson from Simplex stated that MakerDAO started the contract negotiations and many such contracts are lined up from different crypto-asset teams that are keen on creating on-ramp distribution channels. The spokesperson also explained that the partnership will have a positive effect on demand as well as the price as has been the case with other cryptos that the network has been added to.

DeFi solutions have been on the rise in the recent past and DeFi Pulse indicates that the assets locked in these apps has risen by more than 186% in comparison to an year ago.

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Author: Joseph Kibe

Over $350,000 USD in Ethereum Lost from bZx DeFi Platform in a ‘Complex Transaction’

bZx Exchange, a DeFi based product states it lost over $350,000 USD in ETH following a “malicious attack” or “successful arbitraging” as queries are raised on the overall safety of decentralized finance products. The profiteering party leveraged Compound Finance, wrapped BTC and bZx’s exchange, Fulcrum to successfully carry out the theft.

bZx loses over $350,000 USD in ETH

In a Telegram message on the official bZx channel, co-founder of bZx, Kyle Kistner, informed the community that a “portion of ETH was lost” after an “exploit executed against the smart contract.” Following the announcement, the development team paused all trading on the Fulcrum exchange and have since resumed trading, with the team expected to offer a post-mortem soon.

Well according to the community, the theft can be traced in one transaction on Etherscan.io. The inciting tx is a complex form of transactions that saw the hacker borrow a 10,000 ETH flash loan from dYdX protocol and split the funds into two. One half was sent to Compound Finance as collateral and the other half sent to bZx’s Fulcrum exchange.

Once the amounts were deposited, the hacker borrowed around 112 wrapped BTC (Bitcoin on Ethereum), wBTC, on Compound finance, worth about $1.1 million at the time and shorted wBTC on Fulcrum causing the price to effectively drop. Furthermore the hacker sold the borrowed wBTC on Kyber Uniswap to trigger his short position. Paid back the loan and made off with $350,000 USD in profits.

Total cost of transactions? Only $8.

‘Steps to Maturity for DeFi’

While the lenders and users with funds on the platform remain protected from further hacks, there remains concerns on the overall security on DeFi platforms and the effect of having limited oracles. While bZx denied on a tweet that the hack was caused by relying on Uniswap as an oracle, Chainlink CEO, speaking during the ETHDenver conference discouraged the use of one oracle saying,

“You can’t rely on [only] one oracle connected with an exchange API.”

However, there remains optimistic bZx users who believe this is a learning step for DeFi products to reach maturity. Tim Oligive, CEO of Staked, a company that has ETH stored on bZX, said,

“DeFi is an experiment….I think this is the maturation process for DeFi. You have to get battle-hardened, and if somebody puts out a product that has vulnerabilities, someone else is going to exploit it and that’s part of the system getting stronger.”

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Author: Lujan Odera

Pushing ETH’s Trillion-Dollar Case? DeFi Hits Historic Day With $1 Billion in Total Locked Value

  • DeFi breaks $1 billion record, seeing a growth of over 200% in the past year
  • Moving towards the trillion dollar case for ETH

In a new milestone, Decentralized Finance has surpassed $1 billion in total locked value, according to Defi Pulse.

DeFi leverages decentralized networks to transform the traditional financial products into transparent and trustless protocols.

Earlier this year, this amount was under $700 million and now in just a month, we crossed the $1 billion threshold. Over the past year, the total value locked in DeFi has recorded a growth of more than 200%.

“DeFi AUM: from one million to *ONE BILLION* in only 878 days. A historic day,” commented Spencer Moon, Head of Crypto Investments at DTCCapital, a crypto-focused investment fund.

Out of these $1 billion locked amount, $678 million belongs to Ethereum as 3.1 million ETH are locked in DeFi projects in comparison to 1.6k of Bitcoin (worth $15.6 million) and 66.5 million of DAI (worth about $67 million).

Currently, the Ethereum-based lending platform Maker has a dominance of 59.75% in DeFi space.

Ethereum Enjoying DeFi’s Success

Ethereum is clearly establishing itself as the protocol to become the foundation for the new decentralized financial economy. According to ConsenSys’ 2020 prediction,

“There will be an explosion of synthetic assets and new derivatives which will create tens of millions in value in 2020 and eventually billions in value.”

Blockchain Capital also made a bold prediction of DeFi hitting $5 billion in 2020. This would also mean more locked ETH which would push its prices up.

Already, the second-largest cryptocurrency by market cap is surging in value. Up 68.09% YTD, ETH is trading at $219, a price level last seen in September.

As we reported, Lucas Campbell of DeFi rate also talked about a trillion-dollar case for Ethereum with DeFi creating “a new paradigm for global finance” with one common theme Eth.

“A trustless economy requires trillions in economic bandwidth. And that’s the trillion-dollar case for ETH,” summarized Mythos Capital founder Ryan Sean Adams.

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Author: AnTy

EOS’s Loss is TRON’s Gain as it Officially Becomes the Second-Largest Dapp Ecosystem

  • Defi apps saw the “most impressive” growth while the investment hype of gambling dapps dwindling
  • Ethereum a go-to choice for gamers & financial dapp users while gambling and high-risk dapps rule TRON
  • One dapp causes all the pain to EOS

In 2019, just like price decentralized applications (DApps) sector also saw a boost. The number of dapp users doubled last year in comparison to 2018, with 2.77 million new users, as per the Dapp.com 2019 Annual Dapp Market Report. However, not all of them were active, only 348k old users, 11% of all active users, remained active.

The report finds that nine leading blockchains recorded transactions of 3.26 billion, a whopping more than 2.3 billion belonged to EIDOS on EOS alone.

Interestingly, financial services, like lending dapps registered the “most impressive” growth as the number of financial dapp users increased by 610% while transaction volume by 251%. DeFi dapps are the second-largest category with a total of 1 million active users.

When it comes to gambling users, they increased by 372%, the same as the high-risk dapp users’ growth. However, their investment/presale hype has weakened and its volume dropped significantly, 60% compared to 2018.

Ethereum a go-to choice for gamers & financial dapp users

When it comes out smart contract platforms, Ethereum remained the king with the launch of 690 new dapps and over 1.4 million active users throughout the year, accounting for 10% of the total amount of active users. But recorded one of the lowest activities at 62%.

About half of active Ethereum dapp users have used DeFi apps as evident from the fact that 70% of the volume generated by Ether was through the use of DEXs and financial services.

It also remains the first choice for game developers, having over 200k gamers, which is twice the sum of EOS and TRON games.

Gambling and high-risk dapps rule TRON

Ethereum is followed by Tron which officially become the second-largest dapp ecosystem. 411 new apps built on its blockchain last year. The number of TRON’s mainnet accounts has grown significantly. These over 3.260 million new accounts have been driven by its partnerships, especially with the Samsung, Opera, and issuance of TRC-20 standard USDT.

The TRON-based USDT has actually surpassed $900 million, which is about 20% of the total USDT supply. Gambling and high-risk apps, however, still dominate TRON, accounting for over 75% of the active users and volume.

One dapp causes all the pain to EOS

EOS has taken a beating by seeing only 260 new dapps but they generated a volume of $5 billion, nearly 50% of the total volume. This volume surpasses those of Ethereum and Tron to emerge at the top. They also have the highest activity among all the platforms, reaching 97%. The highest dapp usage rate from its mainnet accounts at 48.9% is also of EOS.

The most important launch on EOS was EIDOS that increased the number of transactions by over 4 times. Prior to its launch, EOS has the largest number of daily active users that dropped by 80% after EIDOS went live on Nov. 1. Although EIDOS’s unique on-chain users were only 2.8% of the total active users on EOS, they contributed 85% of the total amount of transactions.

The migration of its most active dapps EOSbet (Earnbet), Prospectors and Karma to Wax Blockchain also caused great loss to the EOS ecosystem in 4Q19.

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Author: AnTy

Here’s How DeFi’s Smashing Growth Puts a Trillion-Dollar Case for Ethereum

  • Total USD value locked in DeFi surpasses $800 million creates “a new paradigm for global finance” with one common theme Ether
  • The trillion-dollar case for ETH puts in a crazy number for Ether price but at one point $1 billion was crazy as well
  • Caveat Emptor: No Fed to bail you out here and “on a long enough timeline its very likely that many will get rekt” – Mati Greenspan of Quantum Economics

Decentralized Finance or DeFi for short is one of the fastest-growing sectors of the crypto industry.

After a massive upswing in 2019, 2020 is promising to be another great year. Already the total value in USD locked in DeFi has surpassed $800 million. To date in 2020, this amount has surged over 22%, after the price of cryptocurrencies surged in the past 15 days.

The biggest contributor to this growth is Maker which has a 56.67% dominance. The growth in Total Value Locked (TVL) has pushed the amount of DAI locked above 500 million. The curve of DAI locked in DeFi has been steepening lately, with 13 million added since Jan. 1st. Just a month ago, this number was 30 million and now at 60 million, it has grown by 65%.

Ethereum: A new, alternative, permissionless & trustless system

Maker’s dominance means, DeFi is dominated by Ethereum, with ETH locked in Defi exceeding $3 million.

Initially, it was largely comprised of two projects, MakerDAO and Bacon but since then we have seen the explosion of Uniswap, Compound, and InstaDApp. Synthetix is another one seeing “absurdly” high growth.

Projects like these, Lucas Campbell of DeFi rate says, are creating “a new paradigm for global finance” which has one common theme, Ether. This he said means,

“Ether is trustless value supplying economic bandwidth for Ethereum’s permissionless money protocols.”

With Ethereum creating a new, alternative, permissionless, trustless system, it means there will be no shortage of future demand for ETH as an economic bandwidth. Campbell says the next decades are nothing short of exciting for the permissionless finance and proliferation of DeFi. Campbell notes:

“However, in order for Ether to successfully deliver permissionless, trustless finance to the world it will require a massive amount of economic bandwidth to support it.”

The Trillion Dollar Case for ETH

To build a trustless economy, you need a trustless value that is only possible with decentralized crypto-native assets that settle on-chain.

The total bandwidth of Ethereum however, is just about $19 billion, its market cap, and with this, it can’t even support a small nation-state economy. But Campbell argues there is no shortage of addressable market with $250 trillion of global debt, $542 trillion in derivatives, and $90 trillion of equity markets.

MakerDAO already has a goal of Dai to hit 1 billion in circulating supply by 2020 end. On the assumption that a country like Argentina adopts Dai as its primary currency for commerce as “the appetite for the Argentine Peso dwindles,” and if it is able to capture 51% of the country’s M1 supply, that would mean Ether price has to reach between $2,500 to $10,000 to provide a sustainable amount of economic bandwidth.

But that was just for Argentina, the ambitions are bigger. Campbell theorizes Dai competing with US Dollar which puts Ether price at $50,000.

These are “crazy” numbers but investor and Mythos Capital founder Ryan Sean Adams says at one point even $10 billion for ETH was crazy.

Although these numbers should be taken with a grain of salt, Adams says what needs attention is that,

“A trustless economy requires trillions in economic bandwidth. And that’s the trillion-dollar case for ETH.”

Caveat Emptor: No Fed to bail you out here

All of this is very ambitious and shiny but DeFi has its own issues. For starters, the sector is still “very much under construction and new economic models are currently being tested,” points out, Mati Greenspan, founder of Quantum Economics in his daily newsletter.

It isn’t too dissimilar to traditional finance but brings in a high level of transparency and is obviously devoid of any central banks, which “could make all the difference in the world.”

But another big question is the APR they offer on lending the crypto asset.

While the US Federal Reserve offers you 1.5% to lend money to a government in the bond market and the highest yield one can get is less than 7%, it is mostly negative in developed countries like Japan and Germany, so how come these projects offer as much as over 9%?

The thing is they are lending the same crypto-asset out many times and taking a fee from each of the transactions, much like what happens in traditional finance. But as Greenspan notes,

“the only difference is there’s no Fed to bail you out when things do turn sour and on a long enough timeline its very likely that many will get rekt.”

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Author: AnTy

Decentralized Finance (DeFi) Grew To $668 Million In 2019, How Will Taxes Be Calculated?

2019’s decentralized finance (DeFi) boom that has led to more than $785 million being locked in crypto assets is giving accountants serious headaches.

Antoine Scalie, the CEO of accounting startup Cryptio says complex assets and transactions make it for the accounting to be more difficult. For this reason, Winklevoss Capital and Dragonfly Capital have invested millions in accounting startups like TaxBit. Alex Pack, the co-founder of DragonFly Capital thinks there are many blockchain attacks around pseudonymity and anonymity, and that the IRS doesn’t really know how to stack DeFi products, since clear categories for experimental assets don’t exist.

TaxBit Working on Tax Optimization

It seems DeFi users who used financial products not offered by exchanges and MakerDAO loans have to enter details about their transaction manually, so they pretty much rely on the help of the Certified Public Accountants and tax attorneys working for TaxBit’s support line.

The Requirements Are Unclear

Both Cryptio and TaxBit are making efforts to make their systems capable of automatically flagging the events in the DeFi ecosystem that have potential to be taxed. Cryptio doesn’t provide retail users a Turbo Tax option like TaxBit does. However, it helps its DeFi clients record information on smart contracts that have been “touched” by the asset.

Since the accounting requirements aren’t at all clear, Credit Karma has conducted a survey and discovered only 0.04% of Americans have reported their crypto transactions for the 2018 taxation, whereas 4% of the population in the country reported they used crypto that time.

This had the IRS issuing an update on the crypto-oriented guidance, back in 2019. Crypto and TaxBit representatives agree the complexity of tax reporting is impeding the crypto adoption. People have no idea how the technology for this works without filling in paperwork. The startups’ role is to make the usage more compliant and mainstream.

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Author: Oana Ularu

ETH Price To Go Parabolic As Ethereum And DeFi Become A ‘Two-Headed Monster’

  • DeFi has been the “growth gist” of Ethereum in 2019
  • Ethereum and DeFi – each leading the growth of further development in the other

Following Bitcoin, Ethereum price has also fallen back to $138 after rising to the early December level. In the past 7 days, the second-largest cryptocurrency has only seen an increase of 6.81% in its value.

ETH has a long way to go in terms of price as it is still down 91% from its all-time high of $1,570.

Trader Scott Melker feels Ethereum will only rise in value if Bitcoin rises as well, like any USD pair as ETH is currently sitting at the top of a descending channel and pushing against resistance.

But according to analyst CryptoWolf, Ethereum price will soon go parabolic and the reason behind this sentiment is the significant increase in the amount of ETH locked in DeFi.

Ethereum’s network growth is already on an upward trend while Ernst & Young is doubling down on its bet on Ethereum.

The Two-Headed Monster

Ethereum started 2020 on a good note as the ETH locked in DeFi shot past $3 million for the first time ever. In less than two months, the ETH locked in DeFi surged by 40% and 84% in the past 6 months, as per DeFi Pulse.

Decentralized Finance has become one of the most significant areas for Ethereum with over 100 projects and team-building protocols and applications in 2019.

This growth where most of the decentralized financial ecosystem is built on Ethereum has been a continuing one despite the price of Ether fluctuating within a $100-$135 range.

“Ethereum and DeFi have become a two-headed monster, each leading the growth of further development in the other,” stated Binance in its latest research.

DeFi actually has been the “growth gist” of Ethereum in 2019, from the users’ perspective as 90% of all on-chain volume for Ethereum-based Dapps come from DeFi-related applications.

Ethereum DeFi Growth & The Future

Taking a dive into the DeFi space reveals that Kyber was the most used project, with a total of 35,570 unique users last year. Compound follows behind which is the leader in the finance sub-category.

MakerDAO, which has been historically at the heart of DeFi still has a 56% dominance but found its nemesis in USD Coin (USDC), a fiat collateralized stablecoin issued by Centre consortium by Circle and Coinbase.

Although DeFi still “represents a tiny segment of the crypto-industry,” it is one of its “most vibrant areas.”

In the Ethereum-based DeFi sector, Binance expects several trends to follow this year including the end of Maker’s dominance and its Dai savings Rate (DSR) to become one of the most important rates in the DeFi space.

Popular stablecoin USDT (Tether) is also likely to be integrated in the near future into some DeFi protocols. The leading cryptocurrency exchange further forecasts the launch of DeFi derivatives on Ethereum mainnet.

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Author: AnTy