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

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

Web3 Foundation Is Funding a Project To Bring Bitcoin to Polkadot Via BTC-Parachain

The non-profit organization behind Polkadot, which is the Web3 Foundation, has decided to finance a new bridge that links the blockchain Polkadot network to Bitcoin (BTC).

The London-based developer company Interlay is going to be funded by Web3 and build a BTC Parachain that brings BTC-backed assets onto the Polkadot network. The parachain will use the open source XCLAIM framework and leverage collateralized intermediaries.

Polkadot Uses Parachains to Link Other Networks

Polkadot was launched back in 2016 by Gavin Wood, the co-founder of Ethereum. They connect and launch blockchain-based apps by employing parachains to link various networks. As soon as the Polkadot BTC bridge is be finished, users can access and employ the parachain in order to create PolkaBTC on the 1:1 rule by using their deposited BTC. The original BTC will be redeemable at any time. Here’s what Interlay had to say about XCLAIM:

“XCLAIM is on average 95% faster and 65% cheaper than using HTLC atomic swaps with Bitcoin.”

The Parachain Stores DOT Collateral

The parachain is completely interoperable on the Polkadot ecosystem and stores DOT collateral that users can have allocated through a premium in case the redemption process fails. The Web3 Foundation is regulated in Switzerland and has been issuing grants between $3,000 and $100,000 to different projects that aim to improve the Polkadot platform.

According to Web3’s GitHub page, the foundation has financed almost 100 projects in 5 different funding waves until now. Some of its other projects are a Metamask plugin, an EOS interoperability bridge and a parachain that Links Polkadot to the future Libra ecosystem.

The Polkadot Ecosystem Fund

Back in October 2019, Web3 launched a Polkadot ecosystem fund with Polychain Capital. While it hasn’t been mentioned how much this new fund had set aside, the sum was in the millions, said a spokesperson then. How much Interlay is going to receive is not yet clear, as grant amounts for each team are not to be disclosed, mentioned another spokesperson.

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Author: Oana Ularu

G20 Wants Tougher Rules for Cryptocurrencies; Urging Members To Adopt FATF Standards

G20 central bankers and finance ministers want to push for a wider adoption when it comes to the standards compelling crypto exchanges to disclose information about users.

After a weekend summit in Riyadh, the Saudi Arabian capital, G20 members of financial institutions said countries haven’t aligned themselves with the international and intergovernmental standards imposed by the Financial Action Task Force (FATF). Here’s what a communicate released after the summit reads:

“We urge countries to implement the recently adopted Financial Action Task Force (FATF) standards on virtual assets and related providers.”

The Travel Rule Aims to Prevent Money Laundering and Terrorism

Being finalized in the summer of 2019, the FATF’s travel rule requires exchanges and wallet providers, so all virtual asset service providers (VASPs), to share information about users with each other each time funds are being transferred. This action aims to prevent money laundering and terrorism funding done in cryptocurrencies, also to identify those who want to bypass the crypto regulatory measures. In June 2019, the G20 said it will comply with the new FATF rules.

FATF Recommendations Leave Room for Interpretation

FATF rules and recommendations allow authorities to make interpretations according to the local law. Countries that will not respect these rules or refuse to adopt the recommendations are at risk to be blacklisted and eventually cut off from important global trades and from investment. For this reason, many G20 economies and FATF members have adopted the travel rule already.

For example, Singapore and South Korea have passed a VASP compelling legislation built on the new anti-money laundering legal framework. Let’s also not forget that the EU’s 5th anti-money laundering directive (AMLD5) was enforced at the beginning of this year. AMLD5 requires exchanges to be registered with local regulators and to comply with FATF’s new rules.

More Research to Be Done on Global Stablecoins

Since the need for having a global remittance solution to stablecoins is growing, G20 ministers also reiterated an October 2019 statement that calls on countries to do more research in assessing the risks of issuing global stablecoins. The communicate released after the summit furthermore asks authorities to be of assistance to the Financial Stability Board (FSB). The FSB monitors how vulnerable the global financial system is, all while coming up with recommendations on cryptocurrencies’ global regulations.

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Author: Oana Ularu

DeFi Startup Amber Raises $28M From Pantera, Coinbase To Expand Operations

The Hong Kong-based firm offering crypto finance services Amber Group has managed to raise $28 million in Series A round of funding.

The main investors were Pantera Capital, Paradigm, Coinbase Ventures, Polychain Capital, Fenbushi Capital and Blockchain.com. Dragonfly Capital invested as well. On Friday, Amber Group said the funds are going to be used to add fresh attributes to the platform and expand operations so that client demands are met. Here’s what Michael Wu, the CEO at Amber Group had to say about what the company is planning to do:

“While the industry has come a long way, there is still plenty of work to do in order to meet the growing demands of clients in a fragmented market. We’re thrilled to partner with some of the world’s leading investors and crypto companies to accelerate our mission of strengthening the crypto finance ecosystem.”

Amber Offers its Clients a Plethora of Services

Amber Group offers its clients services like collateralized lending, automated OTC trading and crypto electronic market making. It serves mining pools and companies, hedge funds, wallets and exchanges. The CEO and founder of Pantera Capital, Dan Morehead, had this to say about the investment its company made in Amber:

“Our most successful investments have been when we’ve found companies doing something better than we can ourselves. Amber dramatically improved our electronic execution across a wide spectrum of assets.”

Amber AI Was the First Ever Created Amber Structure

In 2015, Amber started as Amber AI, a company providing artificial intelligence algorithms for trading Chinese stocks and securities. In 2017, it switched to crypto as there were huge opportunities for arbitrage. They could, for example, buy from one exchange Bitcoin (BTC) for $7,300 and sell it on another exchange for $7,700, making this way a 5% profit. In the October – December 2017 time period, Amber gained 100% to 200% each month, even though its total assets were only a few millions of US dollars.

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Author: Oana Ularu

China’s Top Private Bank Chair: Blockchain Tech Adoption Will Upgrade All Areas Of The Economy

China’s Blockchain potential could be unleashed to boost agriculture, finance and manufacturing, Chairman of Minsheng Bank states.

In a report published on the Economic Information Daily, a China based publication, the Chairman of the first Bank in China to adopt blockchain technologies, Minsheng Bank, Hong Qi, said the world of blockchain, digital currencies and decentralized systems is the future to boost overall economic growth.

Qi spoke of the possibilities that blockchain technology presents to accelerate China’s digital transformation in sectors including agriculture, finance, manufacturing. Minsheng Bank has a made a name for itself with offering loans to small and medium sized businesses. They also boast of being the only privately owned National Bank. Hong Qi, Chairman, Minsheng Bank said,

“The full adoption of digital technologies such as Blockchain is expected to accelerate the digital transformation and upgrade its agriculture, manufacturing, finance and other services in the next 10 years.”

China’s accelerated progress in blockchain technology

There seems to be a consensus amongst bankers in China that Blockchain will indeed alter the fundamental principles of the financial systems. This will most likely trigger a major impact foundational systems of the existing banking system and relationships between participants.

In December, reports coming from China seemed to indicate that Bank of China had issued close to 20 billion Yuan ($2.8 billion) in Blockchain special bonds to SME’s. These funds are specifically set aside for the SME’s supporting their continued development in the economy.

Notwithstanding, a recent local report confirmed the massive growth in blockchain projects within the country despite ICO and exchanges ban across mainland China. According to the report over 57 new blockchain projects have hailed from China in the past month representing over 110% month on month increase in projects.

The soaring number of companies getting into the field is also frightening as both top and smaller companies are taking up their fair share of the blockchain market. Top firms such as Alibaba, Tencent and Ant Financial are some of the blockchain adoptees in China.

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Author: Lujan Odera

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

Ethereum’s Decentralized Finance (DeFi) Ecosystem is on the Rise, But Why is ETH Still Bearish?

Ethereum’s blockchain network has been on a fundamental uptrend with more Decentralized Finance (DeFi) launching within its ecosystem. The network is now hitting record highs of 2.7 million ETH; this activity is however not reflecting on the price of its native coin. The ETH altcoin is currently down by 1.75% in the past 24 hours trading at $146.20 as per coinmarketcap stats.

The ETH Network Fundamental Growth

Vitalik’s blockchain has survived the times despite criticisms from other communities like Bitcoin and DApp oriented networks. The Ethereum network has grown to dominate the DApp arena and ultimately secured a number 2 market cap position. Analysis within the blockchain space shows that the ETH network is pretty healthy based on its activity and hash rate.

A recent tweet by into the block highlighted the ETH network’s health status based on the past day. According to the stats, ETH blockchain had over 244k active users while the number of newly created addresses stood at 70.7k. It is also notable that only 23.9k addresses had left the network in a span of 24 hours.

Last month’s Ethereum performance summary further highlights the general improvement within the blockchain’s ecosystem. The use of DApps had significantly grown with ETH miners hitting over 9 million blocks. In addition, over 15 million ETH addresses had a positive balance. November also marked the launch of a multi collateral DAI by MAKERDAO; this DApp now accepts both ETH and Basic Attention Token (BAT) for collateralization.

ETH Still Plunging?

Despite the DeFi’s success, the general outlook of the crypto market has not spared ETH’s price. It’s been struggling to maintain support at $150 but the bears pulled it below this level as it slid further down this quarter. However, the last crypto winter was worse than the ongoing downtrend; ETH was trading at around $90 as the peak of 2018’s bear market. The price uncertainty is an inevitable consequence of speculation but the ETH fundamental growth and gradual roadmap realization still stands out.

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Author: Lujan Odera

Fidelity Collaborates with TokenSoft to Use a ERC-1404 Token ‘BBT’ for Rewarding Employees

According to a recent report by Finance Magnates, Fidelity Investments is incentivizing employees with digital currencies. The company’s Center for Applied Technology (FCAT), which focuses on research and development, is collaborating with TokenSoft to bring the ERC-1404 token.

TokenSoft shared in a Medium post that before issuing the token, it integrated the BBT token contract into its Token Administration which can be used by financial institutions, such as fidelity.

Fidelity also plans to launch a crypto custodian service and trading platform, according to the Finance Magnates report. Further, Fidelity Digital Assets received a license from authorities in New York to offer digital asset trading services. The company stated,

“The ERC-1404 standard enables TokenSoft clients to place a digital representation of an asset onto the Ethereum blockchain with the confidence that their compliance requirements are being adhered to while preventing unauthorized transactions from occurring.”

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Author: Silvia A

Ex-China Central Bank Governor Talks About Upcoming Digital Yuan and Its Benefits

The current president of the Chinese Finance Association, Zhou Xiaochuan, has recently talked about the upcoming digital yuan. According to the economist, who has worked as the former head of the People’s Bank of China, the country’s central bank, China will continue on its path to create a digital yuan to be used for both retail and international transactions.

He has recently discussed the influence that global banks can have in creating digital currencies and believes that the most economically powerful nations should be cautious when approaching this new technology. Taking a pragmatic approach when deciding what to do with its sovereign currencies is a good idea, in his opinion, because they are very important.

Xiaochuan defends the idea that any bad decision can be really catastrophic to a country and it could lead to people losing all their trust in their national currency, which would start a financial crisis that would destroy the economy. He defends that national fiat currencies are a symbol of national sovereignty and they should be protected, so no rushed decisions can be taken.

According to the economist, implementing this new system has two main goals. One of them is to create a digital payment to support retail payments in the country. The other one is to expand on international settlements using this new digital currency.

Xiaochuan points out that digital currencies should be studies in-depth and that they can bring many opportunities to the industry if they are well regulated.

China will release its new digital yuan “soon” and the world will be a different place after that. We can only wait and see how the financial system will be affected by this change.

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Author: Hank Klinger