Bitcoin and Gold “Inversely Correlated,” One is a Risk Asset and Other Safe Asset: BofA Head

According to Francisco Blanch, bitcoin is good for “creating a new ecosystem of value transfer” and a new economic organization based on the stakeholder economy as opposed to the current shareholder economy.

For the last few months, Bitcoin price has been moving in the opposite direction of gold as people turn to digital gold as a store of value rather than the traditional safe-haven asset.

But to Francisco Blanch, head of global commodities and derivatives research at Bank of America Securities, Bitcoin is more of a risk-on asset.

Back in March, Blanch argued that Bitcoin had serious environmental issues and that it was completely uncorrelated to the asset classes.

But it “became more of a risk asset in the past twelve months,” which was “highly correlated to equities to Mexican peso to copper,” he said.

Meanwhile, gold as a safe asset is typically correlated to 10-year Treasuries and the Japanese yen.

So, when it comes to whether bitcoin and gold are linked, “in a way they are because one is a risk asset and the other is a safe asset,” said Blanch in an interview with Bloomberg, adding, they have very different characteristics.

According to him, “gold’s been a safe asset for a very very long period of time” as such, he’s pretty confident that precious metal stays that way while bitcoin can keep on changing, “but for now, they’re inversely correlated, quite inversely correlated.”

Bitcoin Is A Better Version

Meanwhile, Michael Novogratz, founder, CEO, and chairman at Galaxy Digital, continues to see the leading cryptocurrency as a better bet than the bullion.

With central banks all over the world printing more and more money, Novogratz said one needs to be long hard assets which are real estate, gold, stocks, and crypto. In a separate Bloomberg interview, he said,

“So, I look at bitcoin in particular as digital gold, and so if you’re going to be long gold, bitcoin is a better version because it’s got the same macro tailwinds, but it’s also very early in the adoption curve.”

While people were scared of bitcoin a few years ago, now from hedge funds to real money managers and insurance companies, they all are ok with it.

“So you’re playing an adoption game, and you’re playing a macro game. And so I’m still a big buyer of Bitcoin.”

Meanwhile, according to Blanch, what bitcoin is good for is “creating a new ecosystem of value transfer.” As opposed to the shareholder economy that we have today, it is creating a new economic organization based on the stakeholder economy, he added.

Bitcoin is the base on which all the other coins are built, and that’s what is ultimately going to shape up — basically, communities of people that transfer value using these cryptocurrencies, said Blanch.

“This is why the IRS is so interested in taxing this because they realize there is a lot of economic activity, real economic activity, not just criminal gangs.”

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Author: AnTy

Solana’s Data Aggregator Step Finance Raises $2 Million in Private Sale

Solana’s ecosystem continues to grow in leaps. One of its projects, Step Finance, saw $2 million infused into the network via a funding round led by Alameda Research.

Step Finance Raises $2 Million In Private Sale

In a press release on Tuesday, Solana-based decentralized finance (DeFi) protocol Step Finance announced that it had raised $2 million in a private sale to scale up its platform.

The project, which was birthed from the Solana hackathon held earlier this year, saw participation from prominent investors.

Among the star-studded roster includes names like Alameda Research, the hedge fund led by pro-crypto investor Sam Bankman-Fried.

Decentralized exchange Raydium (RAY), One Block, 3 Commas Capital, Solidity Ventures, and several new names also placed bets on the project.

Step Finance is touted to be the “front page” of the Solana ecosystem as it enables users to monitor transactions across the Solana network on one interface.

Step Finance is a known competitor to Ethereum’s Zapper as it creates a user-friendly platform for users to monitor all their DeFi transactions.

In speaking on the necessity of the Step Platform to the overall Solana ecosystem and the DeFi world, co-founder of Step George Harrap spoke on the limitations for projects built on Solana.

Harrap argued that most projects on the platform are siloed and separated from one another.

According to Harrap, users cannot verify their token and LP balances, current position sizes, and other tidbits unless they visit each website individually and sign in to understand their portfolio’s performance.

To him, Step Finance is the answer to these disparate efforts.

Step Finance continues to ride on the waves of savvy investors desire to get into a promising project before it grows.

In a blog post, the crypto startup mentioned that it would launch its native utility token $STEP on April 24. According to the development team, the digital token will play a pivotal role in automated strategies, optimal token swaps, yield farming, staking pools, bridges, and data visualization on the Step Platform.

Ethereum Killer Solana

The Solana ecosystem is reputed to be an Ethereum killer by enthusiasts. According to the DeFi project, its high throughput of 50,000 transactions per second (TPS) makes it a suitable replacement for developers looking at an alternative DeFi platform to save and do more efficiently.

The Ethereum network has been working on a transition to a more sustainable consensus protocol.

Its much-anticipated Eth 2.0 is expected to transition to the proof-of-stake (PoS), which will see it address the challenges of network congestion and high gas fees.

But in the interim, many DeFi facilitators like the Solana ecosystem aim to capitalize on these flaws.

The Solana ecosystem has been rapidly onboarding many projects. The world’s largest stablecoin, Tether’s USDt, announced that it had found a home on the Solana network just like USDC. The Graph (GRT), an Ethereum protocol, also said it was adding support for the Solana network.

In a fundraising round, the Solana Foundation raised $40 million from crypto exchanges like OKEx and others to better develop the Solana network software. It also received support from the digital trading platform AscendEX on the Solana Program Library.

At press time, Solana’s native token SOL trades at $25.37 after falling 7% on the 24hr chart.

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Author: Jimmy Aki

Alpha Begins its “Multi-Chain Ecosystem” with the Launch on Binance Smart Chain (BSC)

Alpha Begins its “Multi-Chain Ecosystem” with the Launch on Binance Smart Chain (BSC)

Alpha Homora is now also running on Binance Smart Chain (BSC), besides the second largest network Ethereum.

“The beginning of a multi-chain Alpha ecosystem and the value accrual mechanism across multiple chains starts now,” stated the Alpha team.

BSC has seen a lot of traction lately as fees on Ethereum remain elevated, helping Binance Smart Chain make new highs in transaction volumes.

This launch on BSC happened today, and in a matter of three hours, the DeFi protocol had about $117.5 million in total value locked (TVL).

Already, Alpha Homora is among the top ten projects on BSC in terms of TVL. Another lending project, Venus, is the leading one with $5.11 billion in TVL, followed by popular PanakeSwap with $3.65 billion, as per BSCProject.

Alpha’s BSC launch means users can now lend BNB, yield farms on the AMM PancakeSwap with leverage, and receive liquidity mining incentives for both activities.

Leveraged pools that went live with the launch are BNB-ALPHA (2.5x), BNB-CAKE (2.5x), BNB-BUSD (3.0x), BNB-BTCB (3.0x), BNB-ETH (3.0x), and BNB-USDT (3.0x).

Alpha Finance Lab is an ecosystem of cross-chain DeFi products backed by The Spartan Group, Multicoin Capital, DeFiance Capital, and Delphi Ventures.

Alpha Homora is its first product which is a leveraged yield farming and leveraged liquidity providing protocol. The lending DeFi protocol has more than $900 million in TVL on Ethereum.

Last month, the protocol launched its v2 supporting leveraged yield farming of Curve and Balancer pools, alongside Uniswap and SushiSwap pools.

The token ALPHA is a $465 million asset trading at $1.83, up 763% YTD.

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Author: AnTy

Norwegian Publicly-listed Oil Company Buys $58 Million Worth of Bitcoin

Aker has established a new unit called Seetee to invest throughout the Bitcoin ecosystem. Co-founder Kjell Inge Røk­ke calls it not investing in Bitcoin the “riskiest decision.”

Norway’s Aker ASA is establishing a new unit dedicated to investing throughout the Bitcoin ecosystem, announced the company on Monday.

The new unit called Seetee AS would have an initial capital of 500 million Norwegian crowns ($58.6 million). The company is planning to keep its liquid assets in BTC, the industrial holding company said.

Seetee has already made its first Bitcoin purchase of 1,170 BTC with a strategy to HODL.

“Aker’s de­ci­sion to en­ter Bit­coin through See­tee is the re­sult of a long and fun­da­men­tal dis­cus­sion about val­ue,” states the shareholder letter. It further calls, not investing in Bitcoin the “riskiest decision.” Aker co-founder Kjell Inge Røk­ke wrote,

“Bitcoin may still go to zero. But it can also become the core of a new monetary architecture. If so, one bitcoin may be worth mil­lions of dollars. The asym­me­try is in­ter­est­ing to a port­fo­lio.”

As of writing, Bitcoin is trading around $51,000.

Besides using Bitcoin as a treasury asset, the company will also build and in­vest in projects and companies in Bit­coin’s ecosystem.

The unit will also establish mining operations and integrate blockchain technology with Aker’s industrial operations. For this, the company would collaborate with Canada’s Blockstream. Aker ASA Chief Executive Oeyvind Eriksen said,

“These technologies have the potential to reduce frictions in our day to day lives, enhance the security of our digitally-driven economies, and unlock new business models for innovation.”

Aker, controlled by Norwegian billionaire investor Kjell Inge Roekke, derives most of its income from the oil and gas industry. And the company doesn’t see “a long-term problem related to Bit­coin’s electricity consumption.”

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Author: AnTy

Secret Network Launches Ethereum Bridge; ERC20 Tokens Get XMR & ZEC Like Privacy Features

  • Secret Protocol promises privacy-enabled ERC 20 tokens.
  • A new secret DeFi ecosystem bubbles on Secret Network.

Secret Network, an open-source privacy blockchain that turns Ethereum (ETH) and ERC20 tokens into wrapped coins with privacy features like Monero (XMR) and Zcash (ZEC), announced the long-awaited launch mainnet platform this Tuesday. The mainnet is an Ethereum bridge that introduces a host of features, including secret tokens, secret decentralized finance (DeFi), Secret-based AMMs, Secret NFTs, Secret vaults, and pretty much everything to introduce a private DeFi ecosystem.

At launch, the mainnet will support ETH alongside 14 other ER20 tokens as the development team prepares to add support for more tokens in the future, the statement reads. The tokes available on the platform include Ethereum (ETH), Yearn Finance (YFI), Uniswap (UNI), Band Protocol (BAND), Compound (COMP), Chainlink (LINK), Aave (AAVE), Kyber Network (KNC), Synthetix (SNX), Ocean Protocol (OCEAN), Maker (MKR), Wrapped Bitcoin (wBTC), and DAI, USDT, and TUSD stablecoins.

Secret Ethereum Bridge provides a “front-running resistant and cross-chain system” designed to allow Ethereum (ETH) and ERC20 token users to create privacy-enabled tokens on the network. As the “first and only privacy-enabled blockchain, featuring smart contracts,” the Secret Ethereum Bridge allows users to convert their assets into privacy-enabled tokens and interact with the Ethereum blockchain.

Announced back in September, the Secret network introduces secret tokens, where users will need to lock up their ETH or ERC20 tokens to create synthetic (wrapped) tokens on the Secret Network. The process ensures a highly secure network while minimizing the transaction fees to create the privacy-enabled tokens.

Additionally, the mainnet will also introduce bridge mining, whereby users can lock up their ETH or ERC 20 tokens and start earning SCRT token rewards. These rewards are expected to go live in January 2021 to give users time to get “familiar and comfortable with the Ethereum bridge.”

Following the SCRT token rewards launch, the network is looking to launch an automated market maker (AMM) with special and unique rewards for AMM users and liquidity providers. In total, the Secret Network development team expects to disburse over 2 million SCRT tokens to the community to incentivize the use of DeFi products on its network.

Users will need a Keplr or Metamask wallet to be able to connect to the Secret Network.

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Author: Lujan Odera

BProtocol Uses $7 Million Flash Loan to Push Through Governance Vote On The Maker Platform

  • A first in the DeFi ecosystem, a protocol uses a flash loan to vote and influence its own governance decisions.

BProtocol Foundation, a platform concentrated on developing Bancor Network, raised a governance proposal vote on the Maker platform using a quick $7 million flash loan to pass its proposal. Maker warned users of the possibility of governance proposals being “rigged” through the use of flash loans following the successful vote completed by BProtocol last week.

BProtocol submitted a vote on Maker to be whitelisted to access the latter’s decentralized price oracle on October 23. To make it happen, the team manipulated the governance vote by borrowing a flash loan and voting for themselves – winning the vote. However, this raised questions on the negative impact of flash loans on the emerging DeFi space.

Flash loans are lending agreements that allow a user to borrow a certain amount of Ethereum and return it within the same block. These loans allow holders to simultaneously buy lower-priced tokens and sell them at a higher price on another platform. However, as seen in the latest and former exploits such as the bZx exchange, flash loans cause unexpected risks and security qualms across the largely untested DeFi ecosystem.

In BProtocol’s case, the team proposed the vote on October 23 and three days later carried out the flash loan. Here’s how it worked:

BProtocol locked 50,000 ETH tokens on dYdX exchange to borrow wrapped ETH, wETH. The team then transferred the wrapped Ether to Aave Protocol to borrow $7 million in Maker governance tokens, MKR. These tokens were then transferred and locked on Maker’s platform to vote on their whitelisting. Once the vote was complete, BProtocol unlocked the funds and paid back the loan.

In a statement on the flash loan vote by Maker, the DAO claimed the increase of flash loan attacks is causing a “risk of malicious governance action [becoming] unacceptably high.” At current times over 63,400 MKR tokens are at susceptible risk of being accessed in flash loans. Still, there is no risk of a governance attack yet – only new executive governance proposals are at risk when submitted. The statement reads,

“In the event of a malicious governance attack that leads to a redeployment of the Maker Protocol before the introduction of flash loan guards into the governance process.”

“The community and domain teams should do everything possible to burn the MKR involved in the attack, regardless of whether the owner was directly involved in the attack.”

Maker DAO is currently looking at solutions to prevent such security breaches and flash loans affecting the decentralized voting process. The team plans to increase the waiting time to execute a proposal from 12 hours to 72 hours to give the community enough time to rectify contentious proposals. They also plan to increase MKR on the hat proposal to over 100,000 MKR to prevent flash loans executions.

The executive plan to add Yearn.finance (YFI) and Balancer (BAL) as collateral on Maker has also been delayed due to the recent attacks.

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Author: Lujan Odera

What the Painful DeFi Correction Did, Actually Good For the Market?

The DeFi ecosystem started to recover this week thanks to Bitcoin’s positive momentum that drove the crypto market upwards.

While the likes of YFI, SUSHI, UNI, CRV, RUNE, BAL, and KNC are experiencing mild losses today, less than -5%, considerable gains are recorded by UMA (+32%), AST (-28%), MFT (+27%), and AKRO (+24%) with less than 10% gains seen by YFII, LRC, KAVA, LEND, MKR, COMP, SNX, ZRX, and others.

As a result, the total value locked (TVL) in the sector also saw an uptick, approaching $11 billion yet again.

With this, the DeFi tokens look to be finding the bottom, after all, following the deep correction that went on for a few weeks, that came after a wild rally, resulting in many popular tokens to lose 80% to 90% of their value.

Still, some are glad the pullback happened because “as painful as it was, it accomplished a few things: 1. Washed out the weak hands 2. Gave us a sense of where value for DeFi assets are in a big drawdown 3. Hopefully killed off random food coins offering 10000% APY farming,” noted a former partner at Goldman Sachs who is now part of the crypto fund, The Spartan Group.

According to him, even some of the family offices and high net worth individuals (HNWI) are now “starting to get curious, and they will get into the action via funds as it is too hard for them to do it themselves.”

The Macro Trend

The overall crypto market is currently experiencing the greens, with Bitcoin and altcoins seemingly belonging to the same asset class and being correlated to each other.

However, according to the quant trader and entrepreneur Qiao Wang, “Reality is BTC is increasingly behaving like a macro asset whereas alts are still very much venture bets.”

In the macro world, the markets are eagerly waiting for the US presidential election, coming in November, to end the uncertainty prevalent in the market currently. Moreover, the stimulus package isn’t expected to be approved until then, either.

According to Bloomberg’s latest crypto newsletter, while Joe Biden’s win as the president would be good for Bitcoin, in contrast with Donald Trump’s “hands-off policy,” it would hamper DeFi’s growth.

“The world has morphed into one big macro trade. Asset prices are increasingly driven by global policy expectations rather than underlying fundamentals. Deflation + insolvency risk is rising,” noted Kevin Kelly, co-founder Delphi Digital.

The current environment outlines the bull case for Bitcoin and crypto, “the backdrop has never been more conducive for this industry to thrive,” with historical Q4 performance suggesting we could push to new highs.

But the “risk of deflation, insolvencies, and upside dollar risk are of paramount concern for markets,” including bitcoin and crypto alike, added Kelly.

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Author: AnTy

Coinbase, Huobi, & Dragonfly Invest $500k into Uniswap Rival CoFix

CoFix, a decentralized exchange (DEX) focused on solving the pricing issues in the DeFi ecosystem, has received funding of $500,000 from prominent crypto firms, including Huobi, Dragonfly Capital, and Coinbase.

The project, founded in March by a China domiciled team, is set to launch tomorrow as it looks to disrupt the DEX market with its decentralized oracle pricing solution. Currently, Uniswap and peer competing DEX’s leverage external price feeds, which in some cases is derived from Centralized Exchanges or other DEX’s. This has since presented an arbitrage issue when it comes to pricing the DeFi market products.

CoFix’s value proposition is to solve this shortcoming; the DEX derives its pricing mechanism form a decentralized pricing oracle dubbed ‘NEST.’ It also leverages an underlying risk model to enhance the DeFi market efficiency further. The NEST protocol introduces various financial parameters for price information and a mathematical model to account for the associated risk, hence an on-chain computable finance ecosystem.

According to an earlier press release by CoFix, its newly designed approach for pricing DeFi, essentially reduces associated risks and arbitrage opportunities. This gives traders a better opportunity to participate in the DeFi market, given the pricing harmonization. CoFix CEO, Sharlyn Wu, said that,

“CoFiX is trailblazing a new path in DeFi with an innovative solution that can truly attract institutional traders and market makers to the space,” said Chief Investment Officer Sharlyn Wu … It leads DeFi into a new chapter of ‘Computable Finance.”

CoFix is also set to launch a liquidity mining initiative later in the month, where the firm will distribute 90% of its native token $COFI to the platform users. Founding members of this DEX include devs from the Alpha Wallet DeFi project and the SECBIT blockchain security team.

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Author: Edwin Munyui

As Decentralized Finance Continues to Evolve, Big Four Audit Firms Will Play a Major Role in DeFi

Big four audit firms are set to be a significant part of the Decentralized Finance (DeFi) ecosystem according to the latest blockchain industry report by German-based non-profit, dGen.

The DeFi space, which has seen tremendous capital gains in TVL, will grow even more prominent in the coming decade as per dGen insights on its report. Jake Stott, the co-founder of dGen, noted that support from other financial market stakeholders would be inevitable going forward. Tom Howard, Chief Strategy Officer at Mosendo, said;

‘Over time, traditional financial institutions will have no choice but to interact with  decentralized finance tools, slowly disinter-mediating the industry from the inside out.’

Functions like verifying the authenticity of an invoice, tracking payment settlements, and insurance claims could occur faster with the help of a blockchain. Their role will be to act as an intermediary between DeFi and traditional finance.

Dubbed the ‘Decentralised Finance: Usecases & Risks for Mass Adoptionreport, dGen paid particular attention to the DeFi space. Currently, over $2.5 billion in funds is locked within DeFi based products. It is an area that has been hailed as the future of markets given almost all traditional assets are finding their way onto Ethereum based protocols. Though still at its infancy stages, dGen acknowledged this underlying potential in DeFi stating that it,

“could leapfrog the current FinTech industry, providing a new structure of financial services.”

Consequently, this optimistic narrative has gained massive support from across financial services, tech, and the academia elite. DGen’s researchers are bullish that the market could grow past the trillion-dollar mark by 2030. The report highlights that DeFi will: “Provide income for thousands of gamers, streamers, and influencers”

It will also be adopted by European financial institutions who will switch to offering “DeFi-enabled savings and pension accounts.”

A recent Q2 report by industry giant, ConsenSys, concurs on the possibility of a DeFi future given historical growth rates in the past three months. It goes on to detail that Bitcoin tokenization protocols and Yield farming frenzy are the fundamental factors behind this growth as per now.

While the DeFi space has emerged as an avenue to make better interest compared to zero percent in some jurisdictions, it continues to face security threats arising from the core infrastructures.

“Knowledge and security risks will continue to reduce, on top of a growing number of securities in the event of a hack. It appears the solutions the industry needs to scale will come from within the industry itself.”

The team is, however, optimistic the underlying issues might be resolved in as little as one year. Kain Warwick, Founder of Synthetix told dGen,

‘Insurance on DeFi is still extremely limited[…] DeFi still has significant tail risk, so insurance is likely to remain very costly in the short term, but as protocols mature, costs should come down[…] allowing for simpler and more useful insurance to emerge’.

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Author: Edwin Munyui

Microsoft’s Blockchain-Based Identity System, ION, Launches Amidst Data Privacy Concerns

Decentralized Identity Foundation (DIF), a non-profit organization aiming at building a digital identity ecosystem, announced the launch of the beta version of Microsoft’s Identity Overlay Network, a Bitcoin-based identity platform.

At the mainnet launch, Microsoft’s ION will enable over 1.1 billion people who lack a legal ID to acquire one and also help in identifying and contact tracing COVID-19 patients.

The accelerating progress in government partnerships to develop decentralized digital ID systems, however, is facing resistance from several experts who believe it may lead to privacy concerns, hacks, and breaches of personal information.

Microsoft’s ION Partnership With Casa Wallet

The spread of COVID-19 has seen multiple digital identity and contact tracing apps come up in a bid to curb the spread of the pandemic. Microsoft’s ION will partner with Casa, a startup known for its Casa HODL Bitcoin wallet, to improve the “authentication, privacy and security” of users’ digital identities on the platform. ION’s project lead, David Buchner said:

“We are thrilled to have Casa collaborating on ION with us, which showcases the potential of building real-world applications that leverage the strong foundation Bitcoin provides.”

The ION project employs a tagging system, whereby instead of including all the data on a specific transaction on the platform, the info is given a reference number. The number is then added to the ledger, and is easy to retrieve the transaction at any time from the ION nodes.

Several other initiatives, including ConsenSys, backed the project, Uport, form the DIF, and this will allow the interoperability of the systems across the DIF platform. DIF leader Rouven Heck said:

“Everybody wants to move fast and has a high interest in demonstrating this technology can be very powerful.”

The miners on the BTC network validate and verify the reference numbers for a small fee.

A Race to Form Partnerships With Governments

Competition across the blockchain digital identity industry is spiking as governments continue to show interest in citizens’ medical and financial records. The targeted blockchain contact tracing on COVID-19 platforms has seen adoption by several governments and corporations.

In compliance with the World Wide Web Consortium (W3C) credentials, over sixty corporations around the world formed the COVID-19 Credentials Initiative (CCI) to develop digital identity passports. Late last year, eleven South Korean startups announced plans to launch the blockchain-based digital identification service within the government’s regulatory sandbox.

However, some analysts remain skeptical of the actual safety and security of the personal data collected on these platforms.

‘Data Collected is Extremely Hard to Protect.’

On the subject of contact tracing and data collection by these decentralized identifiers, Blockchain Commons founder Christopher Allen said the project would have a hard time upholding user privacy as the data such as the location of the patient is “incredibly hard to protect.”

Microsoft and IBM, who have been at the forefront of funding and developing digital identifiers, have faced much criticism, Harry Halpin, CEO of privacy-tech startup Nym, the latest industry player branding these systems “feel-good rhetoric.” Harry sarcastically said:

“Governments need to establish identities of who owns these keys, so they say, ‘OK, we’ll have an open standard, call it decentralized, and make it mandatory.’”

As the digital id systems grow, the Financial Action Task Force (FATF) released guidance for government regulation on financial institutions that use these systems.

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Author: Lujan Odera