Lightning Labs Allows Users to Earn Interest on BTC by Providing Capital to LN

Lightning Labs has launched a marketplace for liquidity on the network.

The startup focused on developing the Layer 2 payment channel for Bitcoin, Lighting network, has opened the door to “LiFi” – Lightning financial products.

This non-custodial, peer-to-peer marketplace “transforms” your Lightning liquidity into a tradable asset on the Lightning Pool, allowing the user to buy or sell access to this liquidity.

In simple words, “People can earn interest on their BTC by helping to provide capital to the Lightning Network, while keeping control of their funds.”

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Unlike decentralized finance (DeFi), where a third party is the one with the custody of your funds, as in the case of Wrapped Bitcoin (WBTC), it is BitGo; Lightning Pool allows sellers to earn yields on their BTC without trusting a third party with their sats.

“The yield is earned from buyers on the Pool willing to pay a premium for access to new capital on Lightning without counterparty risk,” reads the announcement.

The lack of liquidity on the liquidity Network has been an obstacle, “one of the most widely felt pain points,” to its adoption, which the marketplace is addressing through Pool, which will allow everyone to participate.

“We developed Pool out of a need in the market that emerged from Lightning users who were looking for new sources of liquidity to enable them to more efficiently receive funds and transact on Lightning.”

In the beginning, the payment channels will have a maximum leasing time limit of two weeks or 2016 blocks, which will be diversified to six months. The liquidity provider will receive fees on their Pool account up-front.

“Pool features a p2p auction mechanism, batched execution, and a new concept called shadowchain using bitcoin script.”

Currently, it is in closed alpha with exchanges and wallets to make sure when it launches, it has enough liquidity. And because this is not DeFi, the maximum account size, for now, is 10 BTC as it is early and needs to be stress tested.

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Author: AnTy

China Planning to Legalize Digital Yuan; Forbids Yuan-backed Digital Tokens

China continues to lead in developing its central bank digital currency (CBDC) as it now considers giving it a legal foundation in an upcoming law revision, reported South China Morning Post.

In the past few weeks, the trial of the digital yuan in the real world took place through the giveaway of 50,000 digital “red packets”— a series of trials have been conducted in Suzhou, Shenzhen, Chengdu, and Xiongan — and now the central bank is also addressing all the problems that emerged in the pilot tests.

According to the media report, The People’s Bank of China (PBoC) published a draft law on Friday that would give the Digital Currency Electronic Payment (DCEP) system a legal status.

For the first time, it included the digital yuan, which was also defined as part of its sovereign fiat currency.

As per the draft law, issuing yuan-backed digital tokens by any party or any plans to replace the renminbi in the market would be forbidden.

DCEP, meanwhile, will be allowed to be circulated and converted like coins and physical banknotes.

“Its centralised management will be good to fight against cryptocurrencies and global stablecoins and prevent their erosion of currency-issuance rights,” Mu Changchun, head of the central bank’s digital currency research institute, said on Sunday at the Bund Summit in Shanghai.

The central government has already made clear that DECP won’t replace cash, but there are some domestic concerns related to its convertibility, privacy, and safety. Mu touched on these potential pitfalls as he said,

“The PBOC will also face anti-counterfeit issues in the digital era, and we must lower the cost.”

He further added that the central bank would be asked: “to coordinate the construction of digital currency application scenarios for the purpose of identification.”

A digital yuan product suitable for those senior citizens that don’t use smart terminals is also in development.

As for the threat the government-led project poses to private mobile tools like WeChat Pay and Alipay, Mu said they are just electronic wallets while the DCEP is the money inside them as such “not competitors.”

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Author: AnTy

SingularityNET to Move ‘A Significant Portion’ Of Operations To Cardano From Ethereum

In an announcement on Sept. 30, SingularityNET, the AI firm developing the human-like Sophia robot, announced its partnership with IOHK, the development team behind Cardano, led by founder, Charles Hoskinson. The strategic partnership between the two firms has been on the table for several months as Ethereum blockchain gas fees spiked to all-time highs – at an average tx cost of $15.

The move between the two will see IOHK transfer Ethereum (ERC-20) based AGI tokens to Cardano-based AGI tokens, similar to the wrapped tokens. Moreover, the statement says there will be significant advantages to switching to Cardano, mainly the new updates coming to the Plutus smart contract language – moving away from Ethereum’s Solidity coding language.

However, the statement did not state the portion of SingularityNET that will move from the Ethereum network,

“Final decisions and details regarding porting of a portion of the SingularityNET network to Cardano have not yet been made and will be discussed in-depth with the SingularityNET community when the time is right.”

The move to Cardano aims to increase the speeds of the transaction while lowering the network fees. The announcement states Ethereum high gas fees and high latency times as the main reason they are looking at other options. Additionally, the never-ending postponement of the ETH 2.0 launch, which will introduce a proof-of-stake (PoS) consensus mechanism, has been a barrier to the growth of SingularityNET.

“The ambitious Ethereum 2.0 design holds promise, but the timing of the rollout of different aspects of this next-generation Ethereum remains unclear, along with many of the practical particulars.”

In a 90-minute video chat with Hoskinson, SingularityNET CEO, Ben Goertzel, stated the company still aims at having a multi-chain approach when building blockchain-agnostic solutions to AI. This means that the company, more than likely, will not fully move the blockchain operations from Ethereum, Goertzel stated.

He states it will be left to the community to decide which blockchain offers the best properties, given Cardano has its own flaws. He stated:

“If it turns out the Ethereum portion is more powerful and useful for some purposes, and the Cardano portion is useful for other purposes, then so be it, right?”

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Author: Lujan Odera

Over 100M Unique Users in the Crypto Ecosystem; University of Cambridge Digital Asset Study

The 3rd Global CryptoAsset Benchmarking Study, an initiative by Cambridge researchers to analyze the developing growth of the industry, has estimated that over 100 million people in the world currently hold BTC or alternative crypto assets. According to this publication, the number of new digital wallets increased significantly, with around 191 million accounts opened in Q3, 2020 alone.

Going by these stats, the number of new people who own crypto assets has skyrocketed compared to the 2018 estimates, which barely hit 36 million. The research attributes this growth to an increase in activity and awareness within the main functions of the crypto ecosystem. Other metrics highlighted include mining, off-chain service provision, regulatory compliance, and improvement in IT infrastructure.

A Vibrant Outlook

Despite taking a hit after the 2017 ICO boom, crypto onboarding has been at its highest post the bubble. More off-chain service providers have launched to on-ramp newbies through fiat-crypto ecosystems and vice versa. Notably, the usage demographics were found to vary between different regions greatly; for instance, crypto exchanges domiciled out of APAC emerged as more crypto-focused trading platforms. Reads the report:

“While North American and European firms primarily serve crypto asset hedge funds and traditional institutional investors …

a notable share of APAC service providers deals with miners (41%), in part explained by the high level of mining activities in the region, especially in China.”

Regulatory and Compliance

As for the regulatory scope, much still has to be done according to figures revealed by the research. Over 2 out of 5 firms surveyed have obtained a license or are in the process of doing so. This is despite the FATF Travel Rule coming in place last year, requiring all Virtual Asset Service Providers (VASPs) to comply with new KYC/AML standards.

However, the research also argues that general compliance has increased, and some of those who are not licensed are because their activities do not fall within current regulatory frameworks or established guidelines.

“However, the remaining 58% should not be perceived as the share of entities conducting unregulated activities or evading regulations: some surveyed service providers are engaged in activities that do not yet warrant any authorization process.”

IT Security

With scamming being prevalent in the crypto ecosystem, the research notes that at least 90% of the VASPs keep the entrusted assets in cold storage. Nonetheless, there’s always a downside risk attributed to insurance since this line of service is yet to make in-roads into the crypto market. Had it not been the case, ‘Those who do have insurance plans are primarily insured against cybercrimes, professional errors, hazards, and loss or theft of private keys.’

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Author: Edwin Munyui

People’s Bank of China (PBoC) Testing Digital Yuan (DCEP) for Credit Card Payments

China has been aggressively developing its central bank-issued digital currency (CBDC), popularly known as digital yuan. As per the latest reports, the People’s Bank of China is currently running a pilot project to test the use cases of its digital yuan for card payments, fees, credit card payments, and more.

China has been at the forefront of developing a national digital currency called DCEP. The government authorized the research for the project more than five years ago, and many people were speculating for an official launch by September last year. However, digital yuan was eventually made public at the start of 2020, and the PBOC jas been testing various use case for the digital currency ever since.

The first pilot program for DCEP saw it being used as a travel subsidy for government employees in 4 cities. Later the pilot program was expanded to several universal fast food and beverage companies operating in China, which included Starbucks and McDonald’s as well.

Chinese Central Bank Tests Final Use Case for DCEP

As per a report published in the local daily 8BTC, the PBOC is currently testing digital yuans use a case in the credit card ecosystem as it could be a key to bringing in more customers. The trials in the credit card domain are also being seen as the final trial before the much anticipated public launch.

The central bank also revealed three new pilot-free trade zones (FTZ), in addition to the one already functioning in the Zhejiang province. These free trade zones are key to China’s dream of becoming a blockchain hub for enterprises.

The central bank of China also announced three large innovation trial projects, namely the National Small and Micro Enterprise Digital Credit Reporting Pilot, Digital Currency, and Financial Technology Innovation supervision.

While most of the countries have shown interest in researching and developing their own national digital currency (besides Australia), China managed to complete the research and development of its national yuan quietly and is slated to become the first country to launch its own digital currency. It is also important to note that while the national yuan project is being propagated as one of the true CBDCs, but many have warned that digital yuan would not work on a decentralized blockchain. Rather it is a sophisticated way for the government to control the flow of money outside the country.

Whether the project turns out to be what many are speculating, it would be interesting to see how digital currency is rolled out for the world’s most populated country.

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Author: Rebecca Asseh

Nexus Mutual Sees Active Cover Growing 10x, Now Token Price ‘Directly Linked to Adoption’

“DeFi is developing faster than you can say ‘protect me from the risks in DeFi’,” said Kayleigh Petrie, Director of Engagement at Nexus Mutual, an Ethereum based insurance protocol.

Given the sector’s high risk, high gain motto, it makes sense the need for insurance coverage is growing in line with the sector, which has yet again over $9 billion of total value locked, as per DeFi Pulse.

Nexus Mutual contributes nearly $80 million of deposits to 3% of TVL in DeFi with the active cover up to $235,241,926 (635,531 ETH).

In light of this, the team of Nexus Mutual is working on increasing the capacity and scaling the capital. Just this week, they have made a new milestone in the scaling process with MCR – minimum capital requirement.

This means the amount of funds the project requires to operate (reserves) is now driven by cover amounts and not the capital floor, “this implies that token price is directly linked to adoption.”

With a market cap of $372 million, NXM is trading at around $50, as per CoinGecko.

The token that has been only available to members of Nexus Mutual requiring KYC verification has already been roped in by the DeFi blue-chip yEarn, which allows people to earn it through yInsure, which is non-KYC insurance underwritten by Nexus Mutual.

The protocol has sold nearly $250 million in cover, and much of this “enormous demand” has been because of the new entrants in the market, including wNXM (wrapped NXM) and yinsure (yNFT where cover is converted into an NFT).

SAFE is another project which involves staking wNXM and yNFTs to earn SAFE tokens that are behind this demand. The project remained in the limelight this week for being a “sh*tshow” only to be relaunched as a COVER protocol.

As happens in the DeFi market, the launch of a new protocol sees heightened demand, and the same was the case for yieldfarming.insure (SAFE). As a result, the token’s price surged to a new high only to dump soon after as people sold their positions, which also affected the price of NXM.

After this, the blame game started, with anon Chef insurance accusing the investor Azeem Ahmed of unethical decisions while Azeem hit rebuttal.

But now that the project is relaunched, and the SAFE tokens are to be migrated to the new protocol after November 1st, things seem to be coming on track. The token today hit a new ATH at over $800, and NXM is also seeing movement.

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Author: AnTy

Japan’s Govt. Is Strongly Considering Launching A CBDC In Cooperation With The US and Europe

Japan is increasing its efforts in developing a central bank digital currency (CBDC), reported the largest financial paper in Japan, Nikkei on Wednesday. The post further confirms that the Japanese government plans to add the development of a digital yen into its policy framework this year.

Governments and central banks are looking at digital payments and currencies more seriously in a bid to plan for future financial systems. With China and Russia leading the field of digital payments, Japan is trying to catch up on developing its own.

Lawmakers in the country have long been calling for regulations and policies to be set in developing a digital yen. Moreover, cooperation with the US and Europe is on the cards to build a local electronic payment system.

Earlier this month, the Bank of Japan (BoJ) released a technical study report on launching a digital yen but said they had no plans to launch it soon. The BoJ has had a knack for CBDCs and digital payment systems for a while now since China’s announced it’s digital yuan is nearly complete.

Other top banks in the country are also exploring the digital asset world as seen with the recent joining of three top Japanese banks – Mizuho Financial Group, Sumitomo Mitsui Financial Group and Mitsubishi UFJ Financial Group (MUFG) – to a crypto exchange-led study group.

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Author: Lujan Odera

Fintech Startup Yield To Roll Out Tokenized Zero-Coupon Bonds Using ERC20-Based yTokens

Yield, a fintech startup is developing a new protocol for the Ethereum network on the issuance of fixed-rate lending and borrowing. In traditional finance, such issuance is called a zero-coupon bond, where the buyer can only cash out once the bond reaches its maturity stage and they are guaranteed to receive a higher amount than what they invested.

Yield’s first product would be called yTokens or yDAI, an ERC-20 token which would be used to issue tokenized zero-coupon bonds. Yield’s CEO Allen Niemerg believes zero-coupon bonds is the need of the hour for Ethereum and it would be a novel primitive which can be further implemented in other systems too.

The Defi ecosystem has emerged as a viable lending and borrowing option for many where people put their crypto in collateral using smart contracts and withdraw loans in stablecoins. The borrower can always take out their collectivized crypto asset, but they are required to return the borrowed loan along with the interest rates. As the popularity and demand for the collectivized loan in defi soared, so did the interest rates.

For example, MakerDAO’s stability fee was at 0.5%at the start of the year and it has peaked to 20.5% by now. Thus, something like fixed-rate borrowing and lending would really help the ecosystem become more accessible and viable.

The zero-coupon bonds would provide the exact future projection about the cost of capital for investors. Niemerg described Yield as,

“a standard for a token that settles based on the value of a target asset on a specified future date, and which is backed by some quantity of a collateral asset.”

Yield became the first company to be incubated by blockchain research firm Paradigm and they also announced a seed funding which will be utilized by the startup to develop their first product called YTokens.

How Do yTokens Work?

yTokens will be an ERC-20 token which would act as a bridge currency for people to access zero-coupon bonds. Users can deposit their collateral in a vault governed by smart contracts and in return mint the yTokens. During the starting phase, users can deposit Ether as collateral and the borrowers can issue these tokens with different redeemable time periods ranging from a week to a month and even a year. These tokens will be fungible and would trade at a floating price.

Once the maturity period of the bond expires the collateralized ETH would be automatically transferred to the vault of the user. The CEO also revealed that they are developing a mechanism that can liquidate uncollateralized vault which could occur due to a sudden drop in the price of the collateralized asset.

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Author: James W

Shyft To Bridge Polkadot Parachains With An ‘Identity Layer’ to Comply With FATF’s Travel Rule

Shyft Network has revealed they are developing a Polkadot parachain which will be based on Parity Technologies platform. This is one of the ways that Shyft is banking on the creation of a global standard that will ensure compliance with the set crypto regulations. The new addition will further cement Polkadot’s initial focus on interoperability.

In a statement shared with CoinDesk, after deployment, the new Shyft chain will allow Polkadot clients to easily bridge identities from various networks as well as DApps developed on different platforms to the entire Polkadot parachain. The statement also clarified that Polkadot users will now have the capacity to access various interactions on different DApps developed in various ecosystems.

The statement explained that Shyft is determined to be an “Identity Layer for Parity’s permissionless blockchain network.” Every person will now be able to create their own parachain on Polkadot.

Joseph Weinberg, Shyft co-founder, explained that the company can be looked at in two ways; a virtual ID application platform like the one developed for Bermuda as well as architecture to enhance compliance among governments, blockchain companies as well as users.

Concerning the recent FATF global regulation popularly known as the Travel Rule, Weinberg stated:

“To the best of our ability, we want to be able to provide open tools and infrastructure so that companies or smart contracts or non-custodial wallets … are able to at least partially solve the problem.”

Weinberg explained that he played a vital role in creation of crypto governance regulations for various jurisdictions comprising Mauritius and Bermuda. Shyft is now adding these standards to each blockchain to make it easy to use.

Shyft has been contracted by many crypto and blockchain based firms to develop solutions to comply with the Travel Rule. World’s largest crypto exchange in terms of volume, Binance, recently partnered with Shyft to help in complying with the Travel Rule.

The Travel Rule guidance was introduced in 2019 and deals with the movement of crypto from one country to the other. Shyft has since added two ex-FATF executives to its team of advisors.

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Author: Joseph Kibe

British Virgin Islands (BVI) and LifeLabs Share BVI~LIFE Digital Currency Stablecoin Backed by USD

  • LifeLabs, the blockchain-based startup has announced that it’s developing a new digital currency together with the British Virgin Islands.

A press release from December 3rd says the new currency comes as a start of a wider initiative to help the fintech sector develop. It will be introduced at the symposium held by the DVI Digital Economy, and function as a stablecoin 1:1 pegged to the US dollar. The BVI have been using the US dollar ever since 1959. The new digital coin is expected to reduce fees for transactions and to increase the speed at which payments take place. It will be accessible to tourist and people from outside the BVI too.

What Other Plans LifeLabs Has?

LifeLabs is also working to develop a fund called Rapid Cash Response and to provide aid if a national emergency takes place. BVI’s Premier Andrew Fahie has said this about the new digital currency:

“The importance of blockchain technology and the significant benefits it offers the BVI, are paramount to the Territory. We welcome this innovation with open arms. Our partner, LIFElabs, has demonstrated with their proven track record that their ideology is not just mere words, and we look forward to continuing our partnership with them on the rollout of BVI~LIFE, our digital currency.”

Marshall Islands Are Trying to Move Away from the US Fiat Currency

According to Coin360, the price for a Life token has increased by almost 31% in the last 24 hours and reached $0.000083. BVI is seriously considering a dollar-pegged digital currency while the Marshall Islands are trying to develop a token so that they no longer use the US’s fiat currency. Earlier in 2019, official announcements were made, saying the Pacific island is trying to develop the digital Sovereign, which will be transmittable in the islands making up the country.

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Author: Oana Ularu