Clover Finance Raises $3M in Seed Funding; Bringing Ethereum DeFi Apps to Polkadot

Clover Finance Raises $3M in Seed Funding; Bringing Ethereum DeFi Apps to Polkadot

  • Clover Finance, a Polkadot parachain, completes a $3 million seed round funding to launch a developer-friendly framework for DeFi applications to move from Ethereum to Polkadot.
  • Additionally, Clover Finance will also create a two-way peg for Bitcoin and Ethereum blockchains.

Clover Finance, a cross-chain compatibility parachain on Polkadot, completed a $3 million seed funding round led by top firms including Polychain Capital, Hypersphere, Bithumb Global Divergence Ventures, a Medium blog post reads. The firm aims to use the funding to provide easy-to-access infrastructure for developers and a “one-stop EVM-compatible framework” enabling Ethereum-based decentralized finance (DeFi) applications to move to Polkadot.

This places Clover Finance in a tight race with MoonBeam Network and DeFi ecosystem Acala, who recently announced solutions to enhance Ethereum Virtual Machine (EVM) compatibility on Polkadot.

The seed round funding will also enhance and accelerate product development, expand the Clover Finance ecosystem and improve partnerships with other firms in the crypto space. This targets providing a more user-friendly platform fostering the adoption of blockchain technology and DeFi across developers and end-users.

Notwithstanding, Clover Finance is planning a future bridge with Bitcoin and Ethereum. Adding to its innovations such as gas redistribution, gasless transactions, and identity-based fee-schedule (which measures gas according to the frequency of transactions), Clover Finance will launch “trustless 2-way pegs between Ethereum and Bitcoin”.

The two-way pegs for Bitcoin, still at the infancy stage, will use new technology, a built-in SPV chain simulation, to connect two blockchains. The technology provides the “possibility to natively inspect a Bitcoin or Ether transaction without storing/ verifying the entire blockchain history.” Polychain general partner Tekin Salimi said,

“One of the challenges prior Bitcoin-Ethereum bridge attempts faced was in Bitcoin’s limited scripting language. We think the Bitcoin/Ethereum bridge is the most interesting feature, as it’s unique to Clover.”

However, the two-way pegs heavily depend on successful implementations and changes on the Bitcoin core network.

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Author: Lujan Odera

Global Digital Finance Warns Hong Kong’s Proposed Rule Will Send Crypto Investors to Unregulated Exchanges

Global Digital Finance Warns Hong Kong’s Proposed Rule Will Send Crypto Investors to Unregulated Exchanges

Recently, the crypto industry players in Hong Kong have focused on fighting a proposed law that limits crypto trading only to professional investors, which will practically see about 93% of the populace locked out of the crypto market.

A key cryptocurrency advocacy group, Global Digital Finance (GDF), is warning that if the proposed law goes through, most retail investors and traders will move to unregulated and unlicensed platforms.

Global Digital Finance is made up of leading crypto exchanges such as Coinbase, BitMex, OKCoin, and Huobi, steering the efforts against the proposed new legislation.

Their caution comes after the independent Financial Services. The Treasury Bureau (FSTB) came up with a crypto regulation framework late last year that seeks to ban all retail traders from participating in the crypto market. At the time, the regulator stated that the proposal was in line with the Financial Action Task Force (FATF) recommendations. At the time, the regulator explained that the new law was also meant to tighten Anti-Money Laundering (AML) as well as counter-terrorism financing measures.

However, the proposed law exceeds FATF’s recommendations and is in tandem with the stringent stance against crypto trading in mainland China.

The new law is under the public participation phase and is set to end soon before the legislation becomes law.

“Restricting cryptocurrency trading to professional investors only is different to what we have seen in other jurisdictions, such as Singapore, the UK, and the US, where retail investors can buy and sell virtual assets,” Said GDF’s chair, Malcolm Wright.

Wright explained that Hong Kong risks joining other crypto-hostile destinations stating that other FATF members such as the United States, United Kingdom, and Singapore all permit retail investors to participate in the crypto market.

A recent survey conducted by CitiBank found that only 504,000 people (7%) owned enough assets that meet a professional investor’s requirements.

The group also explained that the restrictions would also curtail innovation and even financial inclusion.

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Author: Joseph Kibe

Curve Finance Kills the New yv2 Pool After Discovering an Issue

Curve Finance Kills the New yv2 Pool After Discovering an Issue

Both Curve and Yearn team assure that “All funds are safe,” and no other vaults are affected.

Decentralized exchange Curve Finance reported an issue with its new trading pool that involves the DeFi protocol Yearn Finance. Curve reported the vulnerability on Monday morning, further announcing the shut down of the pool. The team noted,

“We have discovered an issue with the new yv2 (@iearnfinance) pool. The pool has been killed in order to protect LPs.”

But they assured that the issue wasn’t fundamental and there has been no loss of funds. Additionally, the funds will be returned to the addresses that supplied them. The team added,

“All funds are safe. Deposits will be sent directly to liquidity providers’ wallets, no further action is required to withdraw.”

The popular stablecoin DEX, Curve, launched in 2020, is the fourth largest DeFi protocol by total value locked (TVL) of $3.85 billion. The native token of the project is currently trading around $3.19, putting its market cap at $680 million.

Curve basically allows users to swap between stablecoins like DAI, USDT, and USDC at low fees and slippage. Users who provide liquidity on the platform earn yields on an annual basis, which comes from the interest paid by stablecoin borrowers.

Today’s issue with Curve was specifically regarding the yearn “v2” pool that got exploited. Yearn Finance is a yield aggregator that saw its “v1 yDAI vault” exploited just last week and lost more than $11 million in the process.

While the attacker got away with $2.8 million, Tether CTO Paolo Ardoino announced that Tether, “a centralized stablecoin using blockchains as transport layer,” had frozen the stolen 1.7 million USDT.

“Recent yv2 pool issue doesn’t affect any of yearn vaults. Funds are safe,” assured the Yearn team on the latest issue with the “v2” pool.

Yearn’s YFI token has a market cap of $1.16 billion and, as of writing, is trading around $31,800.

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Author: AnTy

Yearn Finance Mints 6,666 YFI Tokens ($225M) After Supply Proposal Vote Passes

Yearn Finance Mints 6,666 YFI Tokens ($225M) After Supply Proposal Vote Passes

  • Andre Cronje goes back on his “fair release” mantra.
  • The proposal aims to keep key contributors and attract new talents

Yearn Finance stakeholders have uniformly passed a proposal seeking to increase the amount of YFI tokens currently in the market. The proposal was initiated after Yearn Finance’s creator, Andre Cronje, made a medium post on why the community should make the change.

New Mints To Address “Competitive Disadvantage”

An earlier proposal for YFI tokens to be increased has seen it passed. Andre Cronje, the creator of the Yearn.Finance protocol published a poll asking for input on how best to move forward with the YFI tokens’ supply.

The poll began on January 28. It received input from over 2,000 participants. In the end, 1,671 voters (roughly 84%) supported the move to increase the supply of tokens, while 331 of them (16.5%) voted against it.

Currently, there is a hard cap of 30,000 YFI tokens in circulation. As the results of the poll have shown, the token’s market cap will be increased by 6,666 tokens. The proposal aims to reward key contributors with a third of the minted tokens (2,222 YFI), while the remaining two-thirds (4,444 YFI) will be reserved in the protocol’s treasury.

The expansion proposal aims to use the newly minted tokens to motivate new contributors, fund liquidity mining and staking rewards, acquire talent, and provide new cross-platform incentives. However, most users who voted against it claimed that it contravened the token’s social contract, a problem that could lead to an erosion of the token’s value in the open market.

Eventually, the proposal’s authors decided to increase the token’s supply by just 22 percent, adding that this slight increase will maintain YFI’s competitive advantage over the tokens of other decentralized finance (DeFi) protocols.

It is unclear how the protocol plans to distribute the newly minted token. However, it is expected that the distribution process will be handled by a Compensation Working Group. The group will present its recommendations to the multisig committee (YFI’s version for a board of directors) for a review. Once approved, the compensation plan will be executed. Yearn has stated that the process of minting new tokens will take three days.

The decision to reward key contributors shows a change of perspective in the community who are known for not giving preferential treatments for insiders. Andre Cronje began this practice and it has stuck. But the new proposal sets out to break this practice citing cases of some of their contributors being “poached” by other projects.

Cronje Backtracks

The decision to make this change started when Andre Cronje, creator of the YFI space, spoke on the difficulties of operating in the decentralized finance industry. In a medium post from February 2020, Cronje explained that many people demanded too much from him, and running the Yearn Finance platform was getting costlier by the day.

The developer additionally questioned his decision to limit the number of YFI tokens in his “fair launch,” adding that minting more tokens could be the best way to reward developers. Although a lot of reactions followed his public address, Cronje has expressed his pleasure at the proposal’s acceptance.

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Author: Jimmy Aki

Saddle Finance Raises $4.3M; Launches A Slippage-Free AMM for DeFi Tokens

Saddle Finance Raises $4.3M; Launches A Slippage-Free AMM for DeFi Tokens

  • Saddle Finance, an automated market maker, launches a $4.3 million funding round from top VC firms in the crypto sphere.
  • The platform will offer Bitcoin backed tokens, including wrapped Bitcoin (wBTC).
  • DeFi AMM platform, Curve, accuses Saddle of copying its algorithm.

Saddle, a VC-backed AMM, went live earlier this week, allowing users to deposit, withdraw, swap, and provide liquidity on the platform. The project raised $4.3 million from top crypto venture capital firms, including PolyChain Capital Framework Ventures and Electric Capital. Other investors who participated in the funding round include Coinbase Ventures, Dragonfly Capital, Alameda Research, Divergence Ventures, and Nascent.

The volatility of crypto markets increases the slippage chances, difference between expected (order) price and the execution price, even across stablecoin pairs, Sunil Srivatsa, founder of Saddle and a former Uber senior software engineer, said in an interview.

Saddle is built to minimize slippage chances across different tradable assets such as stablecoins and tokenized assets. Saddle users can now choose amongst four tokenized Bitcoin liquidity pools, namely tBTC, wBTC, renBTC, and sBTC, to swap tokens or provide liquidity. Sunil further stated,

“So one of the problems that we’re setting out to solve is to unlock deep on-chain liquidity for pegged value crypto assets basically. That means you’re able to make trades and lose a very minimal amount to slippage and transaction fees.”

The platform will use Synthetix’s virtual synths, ensuring the trades are completed instantly and prevent any slippage while trading.

Curve claims Saddle copied their code

The launch of Saddle has not been taken on good terms with another AMM platform, Curve Finance, who claim the former copied their algorithm. Curve Finance is an AMM that provides stablecoin liquidity pools, different from Saddle’s tokenized Bitcoin liquidity pools.

In a tweet responding to the difference the two platforms had, Curve Finance blasted the similarities in code between the platform, claiming they have “the same math.”

In a statement first made public on Crypto Briefing, Curve Finance elaborated that Saddle “used the same algorithm.” Furthermore, the QuantStamp audit on the project stated they “were not able to determine how the developers derived formulas copied from Curve’s StableSwap whitepaper.”

The audit further claims that Saddle could be vulnerable to an attack previously noticed on Curve since the smart contract is typically the same.

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Author: Lujan Odera

Yield Farming & NFT’s Led 2020’s DeFi Boom; Boosting DApp Volume by 1178%: DappRadar

The decentralized finance (DeFi) space has arguably been the most impressive component of the entire crypto industry in 2020.

With Bitcoin rallying to record highs, total assets locked in DeFi protocols have reached record levels too. However, it now appears to be bringing in an influx of users to decentralized apps (dApps), again.

DeFi is Pulling DApps Use

This week, top DApp tracking platform DAppRadar published its 2020 DApp Industry Report, revealing that there has been over $270 billion in transaction volumes in 2020. The platform noted that a staggering 95 percent of these volumes came from the Ethereum-based DeFi ecosystem, marking a jump from $21 billion last year.

The report pointed out that the DeFi space had also contributed to Ether’s growth, with money flowing from Bitcoin to the asset all through the year. DAppRadar explained that this cash influx’s primary driver was the theoretical yields in DeFi, with renBTC and Wrapped Bitcoin (wBTC) allowing dApps to tap some of Bitcoin’s liquidity.

Moving on, DAppRadar explained that only ten DeFi dApps accounted for 87 percent of the total transaction volumes on Ethereum. The report echoed findings from November when DAppRadar’s rankings showed that dApps had attracted over a million users in 30 days.

At the time, the top three DApps – DeFi Swap, Uniswap, and Compound, respectively – accounted for over 930,000 users between them. None of the remaining dApps in the top ten rankings had over 30,000 users that month.

Data from Dune Analytics also found that a single DeFi user could have used multiple addresses to interact with several dApps on several occasions during a month. It would be challenging to accurately estimate the actual number of users from DAppRadar’s numbers. As Dune estimated, the total cumulative DeFi wallet addresses were about 901,000.

Even at that, the numbers seem pretty impressive, especially considering that the DeFi space was almost nowhere this time in 2019.

Problems Remain

While the report was positive, it also highlighted some of the challenges plaguing the DeFi space. As expected, it touched issues such as the apparent dependence on the Ethereum blockchain, which has led to challenges like network congestion and higher gas fees.

Hacks and security breaches have also become common, with crafty hackers capitalizing on security flaws in DeFi smart contracts to steal users’ funds. As DAppRadar estimates, hackers have stolen over $120 million across 12 hacks this year. The tracking platform adds that the industry should improve insurance in 2021, which will enhance user confidence.

In general, DAppRadar notes that the future is bright for DeFi. Issues like the coronavirus pandemic and more have brought decentralized platforms into the forefront, and dApps have benefited from that rise in prominence.

With DeFi set to play a more prominent role in the global economy, it should spread its benefits to components like gaming, non-fungible tokens (NFTs), and dApps.

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Author: AnTy

Compound to Release a New Cross-Chain Protocol with CASH Token Next Year

Compound Finance has released a new Compound Chain project — “a distributed ledger capable of transferring value & liquidity between peer ledgers.”

The team is currently building a testnet implementation, which is expected to be released in the next quarter. The project will also be bringing other popular DeFi projects like Polkadot, Solana, Quorum, and Celo into the protocol.

Designed to complement the Ethereum contracts, it would be controlled by COMP governance and extend DeFi network effects.

COMP, the $694 million digital asset, is currently trading at $158, up 40.4% in the past 30 days but down 36% YTD. The white paper reads,

“The Compound Chain is designed from the ground up to enable bridging value between its connected ‘peer’ chains.”

The Compound Chain will have CASH as its native unit of account, created through borrowing, much like MakerDAO’s DAI. CASH will be borrowable against any supported asset as collateral.

This CASH unit will be used to pay traction fees on the Chain, and interest would be paid to the CASH holders.

The value of one CASH is set at one US dollar, but through governance, it would later begin to track an alternate index, such as a basket of currencies.

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Author: AnTy

G7 Finance Ministers Strongly Support Regulating Digital Currencies

Central bankers and finance ministers from the Group of Seven (G7) advanced economies have “strong support” on the need to regulate digital currencies. The U.S. Treasury Department in a statement after a virtual meeting of the officials on Monday. Steven Mnuchin, the current US Treasury Secretary, tweeted,

“Productive #G7 call this morning. We discussed the effective actions in response to COVID19, strategies to achieve a robust recovery, and cryptocurrencies.”

The official discussed domestic and international responses to achieve a robust global recovery along with the responses to the “evolving landscape of crypto assets and other digital assets and national authorities’ work to prevent their use for malign purposes and illicit activities,” the statement reads.

Facebook’s stablecoin Diem (renamed from Libra just last week), in a statement after the video conference, German Finance Minister Olaf Scholz said it would take more than renaming the cryptocurrency to address regulators’ concerns regarding its launch in Germany and Europe. He added,

“A wolf in sheep’s clothing is still a wolf.”

“It is clear to me that Germany and Europe cannot and will not accept its entry into the market while the regulatory risks are not adequately addressed.”

“We must do everything possible to make sure the currency monopoly remains in the hands of states.”

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Author: AnTy

S&P Dow Jones Indices to Launch Cryptocurrency Indexes in 2021; Easing Access for Investors

“Slowly, at first, then all at once.” The latest major finance company to join the crypto bandwagon is S&P Dow Jones Indices. A division of finance data provider S&P Global Inc, the company said on Thursday, would be launching cryptocurrency indices in 2021.

It will be working with the New York-based virtual currency company Lukka to provide data on more than 550 of the top traded cryptos. S&P’s clients will also work with the index provider to create customized indices and other tools on digital assets, it said in a joint statement. Peter Roffman, the global head of innovation and strategy at S&P Dow Jones Indices said,

“With digital assets such as cryptocurrencies becoming a rapidly emerging asset class, the time is right for independent, reliable, and user-friendly benchmarks.”

They further said that the idea is to make it easier for investors to access more reliable pricing data about this new asset class and reduce some of the volatile and speculative market risks.

Bitcoin adoption has been gradual up until 2020, when suddenly, everyone wants in.

This is just another step this year that takes crypto into the mainstream. As Bitcoin rallies 170% in 2020, everyone wants to adopt the leading digital currency and enter the realm of cryptos. One analyst noted,

“Having mainstream indexes which represent crypto performance will only bolster adoption, and lead to the creation of fund which represent those indexes.”

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Author: AnTy

Yearn Finance to Join Forces with Akropolis; Fourth Merger In a Week

Yearn Finance continues its landmark week with yet another collaboration, as the project appears to be leveraging its name and capabilities to improve its reach.

This time, the decentralized finance (DeFi) protocol is partnering with Akropolis, a fellow DeFi project.

Mutual Benefit Going Forward

According to a press release published earlier today, lending and savings protocol, Akropolis confirmed that it had partnered with yield farming project Yearn Finance. The announcement explained that both projects would merge to leverage each other’s strengths, thus enabling each other to “do what they do best.”

Diving deeper, the announcement explained that Akropolis’ developers would use Yearn Finance’s infrastructure to enhance their operational strategies. They will benefit from the expanded Yearn Finance ecosystem, which now includes lending protocol Cream.

Yearn Finance also announced a partnership with Cream last Thursday. At the time, protocol founder Andre Cronje explained that both projects would collaborate to launch Cream v2, an upgrade to the latter’s protocol. They will also merge their development resources and strengthen the integrations between each other.

As for Yearn, the protocol will benefit from Akropolis’ institutional contacts and business development acumen. Akropolis has also committed to deprecate Spart and AkropolisOS, two of its products that aren’t related to yield farming. Both products will be moved to an open-source development mode, focusing on a front end that will allow professional traders to access the new ecosystem from both companies.

Better Insurance Cover

The merger also includes a commitment to help Akropolis recover funds lost in a recent security breach. Earlier this month, the protocol confirmed a hack that was executed across several smart contracts in its savings pools. Akropolis explained that the hackers had targeted areas which it already audited twice. Nevertheless, the Curve sUSD and Curve Y savings pools were affected.

Blockchain records on the Ethereum chain show hackers managed to steal over 2,030,000 DAI tokens by exploiting smart contract vulnerabilities. They moved the funds to a different address shortly after.

Akropolis confirmed that the majority of its assets locked were safe in an official statement. However, it has paused all stablecoin pools, adding that it looked into ways to reimburse affected users.

Looking to leverage Yearn Finance, the protocol explained that it would introduce an IOU token to track the stolen funds. Akropolis will also redirect profits into its token fund to reimburse all affected users, adding that it would streamline insurance protocol integrations to ensure that more users get coverage going forward.

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Author: Jimmy Aki