DeFi Protocol Synthetix Upgrading to L2 Scaling to Alleviate Gas Costs for Small SNX Stakers

Popular on-chain synthetic assets protocol, Synthetix is in the first phase of its transition to Optimistic Ethereum, a layer two scalability solution for the second-largest network that continues to grapple with congestion and sky-high fees thanks to all the DeFi craze.

Synthetix founder Kain Warwick is “unreasonably excited” about this development who recently hinted at what’s to come by saying those priced out of staking the digital asset will get “unpriced out” soon.

SNX is the 39th largest cryptocurrency with a market cap of $472 million currently trading in green at $4.70. The DeFi protocol also has about $600 million in crypto deposits.

Get those SNX Working

The first phase involves an incentivized testnet that trial SNX staking on Optimistic Ethereum, aimed at SNX stakers with smaller balancers who may have priced out of participating in staking due to high gas prices.

78.54% of SNX is already collateralized to mint synths.

Optimistic Ethereum is the only “generalized” Layer 2solution for Ethereum, meaning it doesn’t require any specific functionality to be built to support the existing L1 protocols.

“This is a huge milestone for Synthetix, Optimistic Ethereum, and indeed the entire Ethereum space,” reads Synthetix’s official announcement. “Launching SNX staking on OE is a crucial step towards full scalability for the burgeoning DeFi ecosystem, truly allowing anyone around the world access to open financial infrastructure without the friction of high gas costs.”

In this incentivized testnet, the eligible SNX stakers, addresses holding between 1 and 2500 SNX that have staked at least once historically, will get a snapshot of their SNX balance on Optimistic Ethereum’s L2 testnet.

It can then be used to stake, mint, and burn sUSD and also to claim rewards for their participation, which are claimable on the mainnet launch L2.

In other news, SNX is getting listed on crypto exchange Bitfinex on Sept. 26 at 10:00 AM UTC.

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Author: AnTy

Whale Alert Analysis Reveals Satoshi Stacked $10.9B Worth of Bitcoin (1.125M BTC)

Satoshi Nakamoto mined around 1,125,150 Bitcoin in the early days, according to a new on-chain analysis released by the Whale Alert. Based on the current market prices, the value of this BTC stash is an estimated $10.9 billion.

Whale Alert detailed, in a Medium post, how a miner dubbed ‘Patoshi,’ who is believed to be Satoshi, acquired this number of Bitcoins within a year given the mining activity could only be tracked up to May 2010.

According to Whale Alert, the anonymous Bitcoin network creator mined such a significant number of coins to prevent a 51% attack, which at the time was likely. The analytics firm further pegs its findings on research by Sergio Demian Lerner back in 2013, which was the first to coin the term ‘Patoshi’.

Lerner’s findings revealed that Satoshi had mined close to 1 million BTC, relying on a technique dubbed ”extra nonce’. Notably, this technique is visible in the early pattern of BTC mining and shows the first transaction link which saw Hal Finney receive the first coins in this network.

The ‘Patoshi Pattern’

Lerner went on to define the probable Satoshi mining as the ‘Patoshi Pattern.’ Whale Alert researchers have since been able to isolate most of the nonce patterns attributed to the Patoshi set, hence the latest Satoshi BTC stack update.

Based on the analysis, most of the early BTC mining was done by one individual whose mining software was more advanced than the industry standard back then. The chart below gives an impression of this situation as the straight lines represent normal mining while the ‘saw-like’ lines paint a picture of the Patoshi pattern:

Source; Whale Alert

Whale Alert also learned from this pattern that Patoshi made adjustments on the block time to maintain an average of 0.6 blocks in every 10 minutes. He also kept a steady hashrate by controlling 60% of the processing power in efforts to prevent a 51% attack.

This was, however, reduced to 1 block in 10 minutes as more miners joined the BTC network in order to give them an opportunity to mine as well. As per Whale Alert’s findings, 48 computers supported this operation with one of these designed to coordinate the entire process.

Will Satoshi Liquidate the position?

Most analysts have said that Satoshi stopped mining at block 54,316, with 22,503 being mined by the Bitcoin creator. While this may not be the true position, there seems to be a consensus on the fact that Satoshi indeed holds a significant number of Bitcoins.

That said, the possibility of liquidation cannot be ruled out given these coins were not burned and have been in recent projects borrowing from Bitcoin’s decentralized architecture. Whale Alert now suggests that it unlikely that Satoshi will sell his Bitcoins since the initial accumulation was solely for network fundamentals and not financial gain:

“The timing of the shutdown, the mining behavior, the systematic decrease in mining speed, and the lack of spending strongly suggest that Satoshi was only interested in growing and protecting the young network. The bitcoin mined by Patoshi was possibly a mere byproduct of these efforts, and it is unlikely that the remainder will ever be spent, although the question remains why Satoshi didn’t simply burn them in this case.”

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Author: Edwin Munyui

OKCoin Exchange Debuts Price Oracles for the DeFi Market; Compound to Integrate First

San Francisco based crypto exchange, OKCoin, has launched on-chain pricing feeds for the burgeoning DeFi market. An announcement on July 15, the firm debuted ‘OKCoin Oracle’ which will use API’s to support interoperability with crypto markets for reliable pricing on digital assets.

According to the announcement, the OKcoin Oracle API’s will be verified via public keys, leveraging smart contract infrastructure to integrate more price feeds. On this end, OKCoin is set to kick off this new pricing oracle in collaboration with leading DeFi protocol, Compound.

The former will use Compound’s open oracle smart contracts to harmonize data from various points into finer industry medians. OKCoin’s Communications Director, Will McCormick elaborated on the underpinnings of OKCoin’s Oracle:

“OKCoin Oracle acts as a trusted source of market data, and anyone can publish OKCoin pricing on-chain. Once on-chain, OKCoin is verifiable as the source of the data, using the OKCoin Oracle public key.”

OKCoin Oracle Value Proposition in DeFi Market Pricing

As more traditional assets find their way to decentralized economies, bad actors get a bigger window to swindle off the crypto markets’ contributors. This has been on the rise especially within the DeFi ecosystem.

In Q2 alone, close to $26 million was compromised by malicious players, although most of it was returned in a surprising turn of events. An analysis of these events now reveals that arbitrage has found its way into Decentralized Finance via flash loans. Speaking to Decrypt, OKCoin CEO, Hong Fang, has emphasized on the seriousness of this threat:

“Earlier this year, some bad actors took advantage of fake pricing information guise as exchange pricing posted on-chain, which led to two hackers using flash loans to attack the margin trading protocol bZx, first in a $350,000 attack and later in a $600,000 copycat attack”

Therefore, a pricing feed solution was in line with the market needs according to OKCoin’s latest move. Hang went on to note that.

“Oracle Price feeds ensure accurate pricing, which helps plug this vulnerability.”

OKCoin has been operational since 2013 and grown to over 1,000 employees within this period. This move towards a better pricing feed adds to the firm’s portfolio which includes exposure to a wide range of crypto assets through its exchange and donations to the Bitcoin community like the recently launched ‘Let’s Build Bitcoin Together’ initiative which was allocated $10 million.

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Author: Edwin Munyui

Kyber Network to Roll Out Katalyst Upgrade on July 7th; Launching KyberDAO & Liquidity for DeFi

Kyber, an on-chain liquidity protocol, has announced July 7 as the date for the launch of its Katalyst upgrade, which would bring some significant changes to the in-house token, to attract more consumers.

The announcement suggests that the upgrade aims at lowering the friction liquidity contributions along with DApp integration to the Kyber network and the introduction of rebates for the high-performing reserves.

Another major upgrade would be the launch of KyberDAO, which would be a community platform allowing KNC holders to participate in the essential on-chain governance process. KNC holders can participate in this process by staking their tokens, which will enable them to vote on significant protocol parameters and changes along with the KyberDAO proposal.

Loi Luu – CEO of Kyber Network – talked about the upcoming major upgrade and believed the update would prove pivotal in their effort to offer on-chain liquidity for taker and maker. He said:

“Katalyst will harmonize our efforts towards providing a single on-chain liquidity endpoint for all takers and makers, and establish a long term virtuous loop where the success of the DeFi space, growth of the Kyber ecosystem, and value creation for KNC holders go hand in hand.

The Katalyst upgrade and KyberDAO support three key groups of Kyber stakeholders: reserves who provide liquidity to Kyber, DApps who connect takers to the Kyber protocol, and KNC holders who form the heart of the network.”

Luu further commented on the plans for the network, and how it aims to bring in more options for KNC token holders that can do more by staking their tokens. These plans also include integration to new wallets, which allow easy access to Kyber.org and its dapp ecosystem. The firm also plans to add more third-party staking options.

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Author: Hank Klinger

Bitcoin Setting Up For Another Bull Run After COVID-19 Pandemic ‘Killed’ the First Set-up

According to a new model that on-chain analyst Willy Woo is working on, bitcoin was setting up for a bull run when coronavirus pandemic – the white swan “killed the party.”

The model picks the start of exponential bull runs and it suggests that we are close to yet another bull run and it could take yet another month to go.

But the time taken by the bitcoin to start this bull run is actually a good thing because “the longer this bull market takes to wind up, the higher the peak price,” he said.

The market is currently in an accumulation mode with holders taking this time to stack the sats, and “a long sideways accumulation band is ultimately a good thing.”

”Very clearly shows how COVID was a model breaking outlier” – On-chain analyst Willy Woo

As we reported, there are several indicators pointing out that the accumulation is going on in the market and investor confidence is growing.

Bitcoin daily active addresses are approaching levels not seen since 2018 but at the same time, active supply has been falling. Active supply is a measurement of the amount of supply moved on-chain within the last x days or years and while short-term supply surged in early 2020, longer-term active supply has dropped.

The fact that 1 year and 2 years active supply has dropped to two-year lows implies that “supply is increasingly being held for periods longer than one year, which supports the narrative that BTC is used as a store of value,” said Nate Maddrey, Research Analyst at Coin Metrics.

About 10.35 million BTC has moved on-chain within the last two years and about 7.4 million within the last year. Also, only 38.93% of bitcoin supply was active within the last year, the last time it was under 40% was in May 2016.

At the same time bitcoin balance on exchanges has been dropping since March sell-off.

Glassnode Bitcoin Exchange Balance
Source: Glassnode Bitcoin Exchange Balance

Currently, 14.3% of bitcoin’s circulating supply, 2.6 million BTC is in centralized exchange wallets, as per Glassnode.

The largest bitcoin holder is Coinbase at 954k BTC. At 2nd spot is Huobi but with not even half of Coinbase’s balance at 364k BTC, followed by Binance’s 267k BTC.

Coin Metrics also notes that Gemini which has been a relatively small exchange compared to its competitors at the beginning of 2017 now holds more bitcoin than Bitfinex, Bitstamp, Bittrex, Kraken, and Poloniex.

Amidst this, bitcoin realized capitalization has recovered and reached a new all-time high of $106.97 billion. In contrast to traditional market capitalization which values each unit of BTC supply uniformly at current market price, realized cap is calculated by valuing each unit at the price it was last moved on-chain or transacted.

Meanwhile, bitcoin continues to rebound three months after the March crash, currently trading under $9,100 in red while managing a mere $767 million in ‘real’ trading volume.

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Author: AnTy

Investor Activity in Bitcoin Is ‘Fizzing Out’ As Market Undergoes A Black Swan Event

  • On-chain analyst Willy Woo says his call of “no chance this a top” when Bitcoin was just below $10k was “totally wrong”
  • In the short term, the market not looking good but long term looks solid

Earlier last month, Bitcoin broke above $10,000 that on-chain analyst Willy Woo said was the “real deal”. “Fundamental investment activity is backing this $10k breakout,” said Woo at that time.

However, as we saw in the past few weeks, bitcoin has been acting like a risky asset following the stock market, going from above $10,500 in mid-February to $7,630 on Monday.

In his latest update, Woo shared that he was “totally wrong” on his call of “no chance this a top” when Bitcoin was just below $10k. “The market right now, crypto and traditional, is undergoing a black swan,” said Woo.

A black swan is an unpredictable event that goes beyond what is normally expected and has potentially severe consequences.

Long term investor activity looking “solid”

We made a good start of 2020, with everything surging only to come to a crashing halt as coronavirus hit the market. This led to the biggest drop in the Dow Jones Industrial Average since the 2008 financial crisis. Over the weekend, the oil price war started by Saudi Arabia and Russia not only lead the oil prices to plunge but the global markets to undergo extreme sell-off.

Bitcoin wasn’t left unaffected either. Macro events hurt the digital asset hard as it dropped more than 27% in less than a month, however, it wasn’t nowhere near the carnage the global markets saw.

Today, bitcoin is yet again moving up just like the stock market on the hopes of stimulus from the central banks. The crypt asset is trading above $8,000, up nearly 4%. Woo said,

“This is a chart of on-chain “investor activity” right now. Long term looks solid. Short term is very weird, normally it’s smooth oscillations, not anymore, it’s like something hit it (COVID19?), it’s fizzing out. Waiting for this to reverse before we put in a bottom. Maybe soon.”

The positive movement in the bitcoin price also resulted in growth in the network. In the last 24 hours, as the BTC price increased, so did the addresses. Since March 4th, they have been declining but on March 9th, recorded an uptick, as per crypto data provider IntoTheBlock.

Daily Active Addresses
Source: @IntoTheBlock

During this time, 822 thousand addresses were active while 421.8 thousand new addresses were created. Network Net Growth has been 25.7 thousand new addresses. However, this jump in price saw 405.58 thousand addresses going to zero, that is, no balance in BTC.

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Author: AnTy

On-Chain Fundamentals Point To High Investor Confidence in Bitcoin Despite Price Dip

  • On-chain bitcoin fundamentals paint an positive outlook for the price as it finds gains back up over $9,000
  • BTC has “more room to grow imminently”

Yesterday, Bitcoin climbed back above $9,000 and continues to hold above this level. After falling to nearly $8,400 last week, bitcoin is now exhibiting signs of rebounding in the past 24 hours. However, the stock-to-flow model price puts BTC’s value at about $8,646.

But it’s not just the price that is showing signs of recovering but on-chain fundamentals as well. When it comes to the on-chain US Dollar volume average in seven days period, seems to have gone lower following the dip in price earlier in the week, absolute values were on course, with the volumes seen a month or so ago. Crypto data provider Glassnode states,

“While coronavirus fears threatened to push prices below this support level, this threat appears to have passed for the time being as markets recover both in and out of crypto.”

The Reserve Risk of bitcoin is currently at low levels, making for an appealing risk/reward ratio for investing in bitcoin. This standard of measurement is used to assess the confidence of long-term holders relative to price and the numbers show, “high investor confidence in BTC at current price levels.” Combined, the on-chain fundamental suggests BTC has “more room to grow imminently.”

Bitcoin- Reserve Risk, Source: Glassnode

Reserve Risk is calculated by dividing the HODL Bank, delayed spending as a result of HODLing, by the current price. When belief is high and the price is low, there is an attractive risk/reward to invest in BTC which is currently the case.

Another indicator shows “strong investor confidence.” The Average Spent Output Lifespan (ASOL) metric also represents long-term investor stamina by showing when long-term HODlers leave the market.

Bitcoin- ASOL (7d Moving Average), Source: Glassnode

Historically, an increase in this metric came all at once to see big sell-offs as investors sold their positions. Over the past couple of days, there has been a “significant spike” in ASOL but this has been due to an exchange aggregating BTC dust from Omni transactions.

Filtering this out presents ASOL levels at low meaning long-term investors are not backing out of their positions. This suggests investor confidence in the digital asset remains high despite bitcoin’s recent dip.

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Author: AnTy