MakerDAO Reports $12.57 Million in Net Income for April

MakerDAO Reports $12.57 Million in Net Income for April

Original decentralized finance (DeFi) protocol, MakerDAO has released the financial report for April 2021.

Yet again, the protocol recorded growing income for the month. Maker DAO broke past the $12 million this time, up 44% from the previous month’s $8.7 million. These insane numbers show that the stablecoin minter has come a long way over the past year, as in April 2020, its net income was less than $51k.

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Maker has three business lines — 1: Lending where DAI is lent against strong collateral, i.e., non-dollar backed stablecoins. 2: Trading, which involves exchanges of DAI with other dollar-backed stablecoins. 3: Liquidation, which involves liquidating loan collateral before losing money.

MakerDAO’s latest income resulted from increasing interest income due to loan demand accounting for $10.3 million, up 27% from the previous month, of all the net income. The average yield during the month was 5.15%, about the same as March.

Project’s trading business saw a deep decline, down 61% due to slowing demand on the USDC PSM and lower fees (0.04% vs. 0.10%) on PSM outflow. Liquidations provided it with $2.2 million, which was mainly because of one big ETH-B vault.

When it comes to stablecoin on-chain volume, DAI recorded 63% MoM growth, increasing its market share from 4% last year to 11% now.

MakerDAO is also currently dominating the Ethereum DeFi scene with $11.52 billion in total value locked (TVL), as per DeFi Pulse. In response to all the growth amidst the bull market, the MKR price is hitting new all-time highs; today’s new one was at $5,644.

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“Thanks to a good business performance and some MKR burning, we have generated $10 for each token this month. The market decided that the price that was too cheap it seems,” said Sébastien Derivaux, head of real-world finance at MakerDAO.

MakerDAO also made its very first real-world asset-backed loan with real estate project New Silver, currently at $588k and growing.

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Author: AnTy

ClearShares ETF (PIFI) with No Involvement in Bitcoin, Changes its Ticker to “BTC”

ClearShares Piton Intermediate Fixed Income (PIFI) ETF with No Involvement in Bitcoin, Changes its Ticker to ‘BTC’

During the last bull market, companies pulled similar moves, and before that, similar behavior provided the firms with “a large and permanent value increase during the dot-com bubble.”

ClearShare has filed with the US Securities and Exchange Commission (SEC) to change the ticker for its ClearShares Piton Intermediate Fixed Income ETF from PIFI to “BTC.”

This name change will be effective from April 16, 2021, as per the official document.

ClearShares is an investment advisory service provider which launched this Fund late last year on the New York Stock Exchange (NYSE). This Fund invests in corporate bonds, U.S. government treasuries, and government agency debt with no mention of crypto assets.

But the company is riding the cryptocurrency wave and filed for this ticker change just the day before the largest crypto exchange in the US, Coinbase, went public with a whopping $100 billion valuation.

The ticker “BTC” that the firm is trying to copy here explicitly points to only Bitcoin, a trillion-dollar asset that surged to a new all-time high at nearly $65,000 this week, up more than 1,600% from March lows.

Meanwhile, PIFI is a mere $29.64 million market cap fund as its shares trade at $98.81, barely moved from its jump to $100 when it was launched six months back.

This Fund that can be purchased on popular online brokerage accounts, WeBull, Vanguard Brokerage Services, TD Ameritrade, E*TRADE, Robinhood, Fidelity, and Charles Schwab, pays an annual dividend of $0.02 per share and currently has a dividend yield of 0.02%.

This filing to change the ticker to “BTC” is clearly a blatant and “cheap” move to ride on the crypto market’s ongoing bull rally.

As we saw during the 2017 bull market, several companies like Kodak tried to ride on the crypto market’s coattails, announcing a blockchain platform and launching its own coin (KodakCoin), resulting in an immediate pump only to die soon after.

This behavior of ClearShaers is actually no different from what the market saw during the dot-com bubble, a phenomenon noted by a research paper from 2001, saying regardless of the firm’s involvement with the internet, a mere association was enough to “provide a firm with a large and permanent value increase.”

“We document a striking positive stock price reaction to the announcement of corporate name changes to Internet-related dotcom names. This “dotcom” effect produces cumulative abnormal returns on the order of 74 percent for the 10 days surrounding the announcement day. The effect does not appear to be transitory; there is no evidence of a post-announcement negative drift,” reads the abstract.

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Author: AnTy

Korea’s National Assembly Suggests Delaying Income Tax Rule on Crypto Assets to Jan 2022

South Korean lawmakers have allegedly proposed to delay the upcoming income tax rule on crypto-assets by three months from its scheduled commencement date in October 2021. According to the Dong-a Ilbo, a South Korean media which first reported this news, the law might come into effect later in January 2022.

The report notes that South Korea’s National Assembly, led by its planning and finance committee, recently tabled a report to suggest this law’s delay. This is because local crypto exchanges have asked for more time to develop proper tax infrastructures to meet the reporting requirements.

Through the Ministry of Economic and Finance, South Korea’s government made amendments to its tax code back in July. The new framework, which is yet to be approved by the National Assembly, proposed a 20% capital gains tax on crypto trading activity for income above 2.5 million Won ($2000).

As earlier reported by BEG, the suggested South Korea tax code details how transacting parties will annually report their taxes. It outlines that tax payments associated with crypto assets will be paid in May, per the ‘Taxation on Virtual Asset Transaction Income’ section on the new tax code.

Notably, the proposed tax on virtual assets is applied to both residents and non-residents that leverage South Korea-based crypto exchanges for their digital asset activity. With the commencement dates pushed back, the planning and finance committee is expected to update in the coming days.

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Author: Edwin Munyui

Abra Rolls Out Interest-Earning Accounts; Up to 9% on Cryptocurrency and Stablecoin Deposits

Abra users will now be allowed to generate extra income on the crypto investment application. Their customers are set to earn interest for their deposits on their Abra interest accounts as announced on their website.

In a short YouTube video, they have illustrated how by holding their deposits in the Abra interest accounts, they will earn income interests. The up to 9% interest rates yearly compounded at the end of every business day.

They are currently extending support for some popular crypto and stablecoins in the markets currently. The array of crypto assets to be deposited for interest generation are such as: Bitcoin (BTC), Ether(ETH) inclusive of some stablecoins like USDT, PAX, USDC and TUSD.

The BTC and ETH generating 4.1% and 4% respectively with the stablecoins accruing 9% interest rates according to Lomesh Dutta, the VP in charge of Abra’s growth. He however added that pending on the demand from their institutional borrowers the interest rates will be subject to evaluation. He remarked that their interest rates have surpassed what banks can currently offer in interest rates.

They have consolidated their place in crypto sphere receiving overwhelming response from the Philippine, US and UK markets garnering over a million users. They have collaborated with Prime Trust for custodial services in the project. This will obligate all the users that are to benefit from the initiative to confirm their identities with the Prime Trust as per the KYC policies.

Notably, Abra are onset to create a decentralized global banking solution on Stellar’s Blockchain. This move could have been inspired by Stellar’s Development Fund (SDF) $5 Million cash injection to the crypto wallet provider.

Abra’s recent tussle with the SEC and CTFC saw the digital asset firm fork over $300k in fines after the futures commission filed charges against Abra and their Philippine affiliate Plutus. According to the financial watchdogs, Abra failed to verify the eligibility of the clients to whom they offered their unregistered security swaps.

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Author: Lujan Odera

Korean Government Brings the Hammer Down on Bithumb, Taxing The Crypto Exchange $68 Million

  • Bithumb has been hit with an additional tax of 80 billion won ($63 million) by the IRS
  • The tax was imposed on income tax withholding for foreign users using the platform
  • However, there is no taxation policy related to cryptocurrency in the country

The Internal Revenue Service has imposed an obligation on cryptocurrency exchange Bithumb to “withhold withholding” on income from cryptocurrency transactions by foreign users, reported local sources.

As per this, Bithumb has to pay about 80 billion won, about $68 million in income tax on behalf of its foreign users.

The exchange has to pay its taxes first and can then ask its foreign users to pay taxes for their previous trades to the exchange. However, given that these foreign users might be based out of South Korea, it’s really isn’t possible.

Bithumb in response is planning to take legal action against the National Tax Service request. However, the concern here is that there is no exact taxation system related to cryptocurrency in the country yet.

No Income Tax Policy on Crypto Transactions

The government has decided to set a tax policy on income tax on cryptocurrency transactions next year. The government plans to include the tax measures in the tax law revision to be announced in August 2020.

For now though there are no laws or specific guidelines laid down. Nonetheless, the IRS currently classifies cryptocurrency income as other income and not capital gains.

And before the government issued “emergency measures for overheating virtual currency speculation” and “prohibited the opening and trading of cryptocurrency accounts for minors and foreigners altogether,” foreigners were free to use the domestic Korean exchanges.

As such, the IRS assumes all foreigners’ withdrawals are taxable and Withholding tax on other income is 22%.

A Bad Time for Korean Exchanges

It is certainly a bad time for exchanges, especially for Bithumb who suffered a loss of $180 million in 2019.

It is one of the top four exchanges other than Upbit, Coinone, and Korbit that offer Korean Won (KRW) on and off-ramps.

Bithumb used to be the number one crypto exchange in Korea but after hacking by North Korea, wash trading, and failed acquisition attempt by a consortium struck a bad blow to its reputation. The exchange has already cut down its staff by 40%.

This move by the government, @DooWanNam of MakerDAO says could be,

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Author: AnTy