Genesis Records 13 Consecutive Quarter of Growth, Reports Rotation Out of BTC into ETH While DeFi Attracts Funds

New loan originations at Genesis increased over 60% to hit an ATH of $25 billion in Q2, and while utilization of BTC loans sees compression, “the market is currently flush with investors looking for yield.”

Crypto lender Genesis released its Q2 2021 report showing an increase of 22% in the number of entities onboarded to Genesis Custody.

New loan originations at Genesis meanwhile increased over 60% to hit an all-time high of $25 billion, marking the thirteenth consecutive quarter of growth. Originations rose almost 8x year-over-year and were 60.6% higher than at the end of Q1.

Even a 41% decline in BTC price over Q2 only resulted in its total Active Loans Outstanding decreasing by 8.1%.

“Mark-to-market depreciation in book value was offset by organic loan portfolio growth,” noted the report.

The utilization of BTC loans has actually been seeing compression due to the flood of new supply on the market and the institutional market unable to absorb the inventory. Genesis expects this trend to continue “as more yield platforms come together” and persist until a new wave of institutional borrowers enter the market.

While cash lending yields and volumes were the main stories of Q1, since then, a meaningful reduction in new cash borrowing demand has been seen in the institutional market, given the collapse in spot/futures spreads.

But at the same time, the market is currently flush with investors looking for yield, and this supply-demand imbalance is pushing cash rates much lower than over previous quarters.

Changing Roles in the Market

As BTC’s dominance in market cap declined from over 70% from late 2020 to under 45% at the end of Q2 2021, at Genesis, in their loan books, Bitcoin dropped from 54% to 42% during the same period with Ether and smaller assets picking up their difference.

“Activity in the broader market and at Genesis confirms the changing role of bitcoin (BTC) as the industry’s gateway asset and highlights the emerging protagonism of Ethereum and decentralized finance (DeFi),” it states.

The firm also reported increased trading of DeFi tokens, including UNI, SUSHI, and AAVE, and increased trading of Ethereum competitors, including SOL and BNB.

Similarly, despite an overall market trading volume contraction of 33% and an overall market cap reduction of 20%, Genesis’ trading desk completed $29.20 billion in trades, representing a 7% decline from Q1 but a year-over-year increase of 487%.

Interestingly, BTC trading accounted for only 47% of spot trading activity on Genesis, down from about 80% in Q2 2020. And ETH took most of this share, accounting for roughly 25% of overall volumes on the spot desk.

While top crypto assets, BTC and ETH, dominated total notional traded, there was continued demand to trade altcoins with large-cap DeFi products at the forefront of this transition, with the dollar value of tokens locked in decentralized applications more than doubling since Q1.

Genesis reported growing interest from institutions such as Millennium Management, Point72 Asset Management, and Matrix Capital Management as one of the notable drivers of DeFi volumes.

Now, in Q3, while the outlook for crypto prices is uncertain in the face of volatile narratives, confusing macro indicators, and increasing regulatory attention, the technological improvements — Taproot on Bitcoin, London upgrade on Ethereum, and significant progress in Layer-2 protocols — will meaningfully impact the usability, throughput, and valuations of several main crypto applications.

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Author: AnTy

KeeperDAO (ROOK) Poised to Hit $5 Billion in Flash Loan Volume

KeeperDAO (ROOK) Poised to Hit $5 Billion in Flash Loan Volume

The goal is to make a transition to DAO, a process that isn’t clearly defined yet, co-founder Joey Zacherl said the next feature coming out for the hiding game is potentially a higher reward mechanism.

KeeperDAO (ROOK), an on-chain liquidity underwriter for decentralized finance (DeFi), is ready to hit the milestone of $5 billion in flash loan volume since v2 was launched in November last year.

At the beginning of January, the flash loans volume was just under $120 million, and it was at the end of the same month that it first hit the $1 billion mark.

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Source: Dune Analytics

In comparison, DeFi blue-chip lending project Aave has done $2 billion in flash loan volume in its entire lifetime. Aave was launched as ETHLend (LEND) with an ICO in 2017, raising $16.2 million.

KeeperDAO’s mainnet was launched in July 2020, the same month it raised a “seven-figure sum” from crypto venture capital firm Polychain Capital and fund manager Three Arrows Capital in a seed funding round.

With a market cap of $123 million, its token ROOK is currently trading at $367, down 56% from its all-time high of nearly $840 last month.

Today, the total value locked in the project has reached almost $230 million while having $42.5 million in its Treasury, as per Dune Analytics.

The size of the KeeperV2 pool is currently under $300 million after surpassing it earlier last month, with DAI accounting for the highest share (30.8%), followed by WETH, ETH, and USDC.

What’s Coming?

KeeperDAO is a DeFi protocol aiming to alleviate liquidity issues in the beginning sector by providing a ready-to-use liquidity pool for flash loan-like transactions. The project has cited the March 2020 cryptocurrency market crash as an example when having liquidity on-hand would have benefitted the ecosystem.

In an interview on Epicenter Podcast, KeeperDao co-founder Joey Zacherl explained about the project whose goal is to “capture profit opportunities on-chain and distribute them to the various participants.”

Interestingly, there’s a lot of participants who actually don’t see any of this profit even though they participate in making it possible by making a trade or limit order or using a DEX aggregator.

So, KeeperDAO captures profit and helps it redistribute and also coordinate all of the various participants.

About the hiding game, which was launched at the beginning of last month, Zacherl said it “is essentially our implementation to where we align incentives between users and keepers.”

The idea is to take actions that users like to perform that end up resulting in profit opportunities that get gas auctioned or sandwich traded and take some of those actions and put them in such a way that the user and the keeper can actually collude together and prevent that gas auction or sandwich trade from ever happening and in a way that user gets some of that profit when captured, he explained.

The next feature coming out for the hiding game is potentially a higher reward mechanism. Currently, taking the treasury and staking it back in the KeeperDAO lp pool is one option, but the next pool that’s being launched may generate even a higher yield, Zacherl said.

The project basically has a goal to create this entity as a DAO on-chain and enable all the participants to govern the system. While the transition to DAO is not clearly defined because the team is still working through it, and it’s a short-term challenge.

“We’re trying to kind of let the pieces fall where I think the DAO voting comes into high value,” Zacherl said. A transition into a mechanism that allows ROOK holders to make the decisions as opposed to the team doing it internally, he added.

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Author: AnTy

Bitfinex has Repaid the $850 Million Loan Owed to Tether in ‘Full’ and ‘Early’

Bitfinex has Repaid the $850 Million Loan Owed to Tether in ‘Full’ and ‘Early’

Cryptocurrency exchange Bitfinex has repaid the remaining balance of $550 million of the outstanding loan to Tether, which was the center of allegations of fraud made by the New York Attorney General (NYAG).

The payment has been made in fiat currency by Bitfinex, which was wired to Tether’s bank account in January.

The loan and all interest due on the loan has now been repaid, “early and in full” shared the exchange this week, adding “the line of credit has been canceled.” The stablecoin’s website also states,

“Tether acknowledges that in January, it was repaid the remaining balance of $550,000,000 of the outstanding revolving loan facility owed by Bitfinex.”

Tether, the issuer of $29.13 billion market cap stablecoin USDT, is the sister company of crypto exchange Bitfinex, and both are run by the same officials. USDT’s market cap was $21 billion at the beginning of 2021, which has surged from just $4.28 billion on April 1st, 2020.

Reportedly, it was Bitfinex’s performance that made it possible for the exchange to repay the balance early.

Cryptocurrency exchanges have been benefiting from high volatility and transaction volume ever since last year. During this period, the price of Bitcoin has skyrocketed to a new ATH of $42,000, had a 30% pullback, and is now back on its way to new highs. Meanwhile, tons of altcoins and DeFi tokens are also recording a meteoric rise.

Back in 2019, New York Attorney General Letitia James claimed that Bitfinex hid the loss of over $850 million of its clients and corporate funds. Paolo Ardoino, Bitfinex’s chief technology officer told Bloomberg,

“While the repayment of the loan, all interest due, and cancellation of the facility does not directly impact the New York Attorney General’s special proceeding, the credit facility was clearly of interest to the Attorney General’s office.”

“We look forward to continuing our productive and constructive discussions with the Attorney General’s office.”

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Author: AnTy

DeFi Warp Protocol Losses $7.7 Million in a Flash Loan Attack

Lending protocol, Warp was exploited with a complex flash loan attack for $7.7 million worth of stablecoins. Hacken Club audited the project.

The attack on Thursday allowed the hacker to borrow more than their collateral value resulting in a loss of stablecoin lender funds. Later on Thursday or earlier on Friday, the team took to Twitter to share with the community,

“We are investigating irregular stablecoin loans taken out in the last hour, we recommend that you do not deposit anymore stablecoins until we have clarity on the irregularities.”

Out of the lost $7.7 million, the team plans to recover about $5.5 million that is still “secured in the collateral vault.”

“Upon successful recovery, these will be distributed to users who experienced a loss,” announced the team. Additional plans are also in place to compensate for users’ loss over time, they added.

The decentralized finance project team said they would share a detailed analysis of the attack in the coming days once they have more understanding of the exploit.

Just a day before the attack, the lending protocol that powers a liquidity engine migrated to Warp Finance v2 with a 24 hours grace period. The latest version enabled borrowing for protocol users against LP tokens and be rewarded with the to-be-released governance token WARP.

The TVL of the project has more than halved after the attack. Only $6 million funds are currently locked in the project, down from $17 million, as per DeBank.

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Author: AnTy

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

Crypto Lender Celsius Drops Its Minimum Loan Request To Help Borrowers During COVID-19

The minimum loan request with Celsius Network went down to $1,000 as a result of the new coronavirus’ effects on the market. Furthermore, the loaning platform is looking to introduce the gold on gold paid out interest.

If the minimum is lowered, more Celsius users will be able to take out loans and know that their cash is secure at hand because they don’t have to sell their assets when the market is down. The CEO and founder of Celsius, Alex Mashinsky, said the minimum has been previously lowered from $3,000 to $1,500, but that with the $1,000 new minimum, users will be able to borrow smaller amounts, all without selling their crypto, even if they will have to put a collateral that’s twice the sum of the loan.

Celsius Will Work Almost as a Bank

Talking about what makes the Celsius business model different from traditional banking, Mashinsky said:

“We do the same thing as the banks, the main difference is that we give 80% back to the users while the banks keep 99%. Because we don’t have to pay dividends to the shareholders.”

He added that when it comes to volume, there are many larger borrowers that dominate Celsius’ portfolio and some of the platform’s loans exceed $10 million. Yet when it comes to sheer numbers, it seems that smaller loans are the ones making up the bulk of the loans.

There’s Also the Gold on Gold Interest

Very soon, more precisely in May, Celsius is going to introduce 2 tokens to its ecosystem, tokens that will be backed by gold: CoinShares’ (DGLD) and Tether Gold (XAUT). The users depositing these tokens will receive interest in gold. Discussing the news, Mashinsky had this to say:

“This is revolutionary, typically, with the gold you have negative yields, you have to pay the bank or another custodian for the privilege of ownership. With Celsius, not only you’ll benefit from the gold’s upside, but you’ll be earning interest in gold.”

Do Americans Need More Loaning Options?

Furthermore, Mashinsky talked about how the Federal Reserve and the US government are addressing the economic situation brought on by the coronavirus crisis. His opinion is that politicians are scared of implementing painful but necessary solutions. He also mentioned that the growth in the economy from before has been achieved by Americans borrowing money. However, this doesn’t mean they will no longer need loans.

What Else Does Celsius Have to Offer?

Celsius users can borrow US dollars or stablecoins such as USDC, USDT, TUSD, EOS and GUSD at the lowest rates in the crypto space and against their digital assets. The yearly rates start at 3.47%, not to mention users are being given the opportunity to receive big discounts if they complete monthly payments in the Celsius’ native CEL token.

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Author: Oana Ularu

OKEx Launches New C2C Loan Feature; Use BTC As Collateral To Get USDT for Trading

OKEx made a step into the DeFi world and launched its new consumer to consumer (C2C) loan feature that aims to match the demand and supply of idle capital transparently and openly.

The times when crypto exchanges were scrambling to have listings of the most active tokens are long gone. Nowadays, the competition takes place on completely new terrains like the ones of cloud services and IEOs, so OKEx wants to provide a peer-to-peer (P2P) loan service and launched its new C2C loan feature.

Users Will Transact Directly

The exchange says on its blog that the new C2C feature is going to allow direct transactions, whereas the demands for loans and investment will surely be met. Users can use the C2C loan button once they update their OKEx app. In order to buy money from peers, they will have to put Bitcoin (BTC) as collateral, after which they’ll get paid in USDT. More assets are to be supported soon, said OKEx. Some interesting features like choosing the rates for payments and the duration of the loan are also available for them.

What Happens If a Debt Isn’t Paid?

Just like with any other type of loan, there are risks involved with the C2C feature too. For instance, if the borrower is unable to pay the debt, OKEx employs its system especially built for such a situation. In case the collateral declines under the prewarning limit, the borrower is sent a warning message to increase it. If this isn’t done, the platform closes the position as soon as the price gets to the closing line. Borrowers will be in the position of losing their BTC, while lenders will be sure to not be left without their money.

OKEx is expanding more and more, trying to offer better tools and options to a variety of customers. Now it’s no longer a derivatives and spot trading service, but also a precursor of the DeFi’s development.

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Author: Oana Ularu

Bitbond Small Business Loan Company Gets Legal Approval to Launch Security Token Offering (STO)

Bitbond Small Business Loan Company Gets Legal Approval to Launch Security Token Offering (STO)

Small Scale Loan provider Bitbond is raising €3.5 million up in a Security Token Offering (STO) to help SMEs in Asia. This denotes the first STO to be endorsed by German administrative body BaFin.

As a private venture involved in loan provision, Bitbond boasts of facilitating business loans worth over €13 million to support SMEs with the use of eCommerce platforms such as Amazon, eBay, and Etsy.

The funds generated from the potential Security Token Offering will be invested in loans to aid the growth and expansion of SMEs and online retailers across Asia.

First Of It’s Kind

Notably, the Bitbond STO happens to be the first STO in Germany to have its outline endorsed by BaFin- the country’s top financial regulatory body- as it looks to encourage crypto adoption.

The platform already bolsters more than 150,000 clients in 80 nations utilizing blockchain innovation to encourage suitable cross-border settlements as well as machine-based learning for effective credit-scoring.

According to CEO and founder of Bitbond Radoslav Albrecht;

“We are still in the process of uncovering the potential of emerging technologies like blockchain and machine learning, so it’s exciting to be at the forefront of this developing space.”

What The First Regulated STO In Germany Could Mean

It is impressive and applaudable that the German supervisory body is ready for advanced securities contributions. Undoubtedly, blockchain innovation could serve as a credible source of capital for independent businesses and small ventures across the globe. Albrecht also clarified on the conventional monetary framework as he was quoted saying:

“The traditional financial system is acting as an obstacle for countless entrepreneurs across the world. With this STO, we will continue to offer accessible loans to the small business that need them, so that they can grow and invest in their own communities in turn.”

Numerous organizations are already profiting the Bitbond platform. One of such is the case of Dr. Joemar Taganna, a bioengineer, who got a business loan from Bitbond to aid the launch of his software product development business; SciBiz. He enthused:

“It’s much easier to secure a Bitbond loan than more traditional routes to seed finance. There’s a lot less hassle, which makes it quicker to launch a business and achieve sustainable growth.”

This STO will keep running until the 8th of July and is available to financial specialists around the globe with the exception of the United States.

Could This Be A False Start?

Although many industry specialists already predicted the approval and endorsement of a Regulation A+ STO, the Bitbond STO– being the first government-authorized STO in Germany- just about shows the level of advancement being made in the country and Europe at large, although the U.S. appears to keep hauling its heels.

A Regulation A+ will be an extraordinary achievement for the cryptocurrency and blockchain space, however, the need for an ‘Exchange Agent’ seems to be a noteworthy hindrance that restricts crypto firms in the U.S making such significant moves.

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Author: Damola