Compound Backers Decreasing the Number of COMP Tokens Issued to Users After Price Explosion

COMP, the governance token of the lending platform Compound exploded in value after the US-based cryptocurrency exchange, Coinbase, listed it. In less than two weeks, the token went live on both the Coinbase retail and Pro platform and is now available on the firm’s Android and iOS apps.

This explosion was one of the fastest Coinbase listings ever since the launch of a digital asset.

Compound was actually the first-ever investment by Coinbase’s venture fund which was part of the $8.2 million seed round led by VC Andreessen Horowitz, crypto hedge fund Polychain Capital and Bain Capital Ventures.

COMP prices dropped 35% this week only to get a jump after the Coinbase listing and Binance’s announcement of opening trading for COMP/BTC, COMP/BNB, COMP/BUSD, and COMP/USDT.

COMP was launched on June 15 with an initial price of $80 that made an all-time high of $375 last weekend, which even Compound team didn’t expect, and is currently trading around $250.

For now, the token has formed a local top as crypto data tracker Santiment noted, “As is our golden rule, when an asset like COMP enters the top 3 on the @santimentfeed emerging trends list, it is generally indicative of an upcoming local top forming.”

The Long & Short of it

The governance token is awarded freely to both borrowers and lenders to incentivize people to use the Etereum-based platform. This led traders to borrow against themselves to receive free tokens.

In order to increase the prices further, traders were also buying COMP tokens from spot markets along with perpetual swaps, futures with no expiry on crypto derivatives exchange FTX.

“Because of the relatively large size of the COMP Perpetual Swap market, it would be profitable to buy the Perp and then buy spot in significant enough size to move the price, amplifying gains in the Perp and squeezing the shorts,” said Tony Sheng from Multicoin Capital. COMP price dropped the same day.

The Proposal

COM’s success saw its supplied assets growing from ~140M to ~870M and borrowed assets from ~30M to ~320M. And just a few days after the launch, a governance proposal 010 was created, succeeded, and is ready to be executed.

The proposal is to “change the reserve factor of BAT, ZRX, REP from 10% to 50%, and correct the COMP Distribution speed to 2,880 COMP/block as intended,” down from the current 3,297~ / day distributed COMP.

As per the proposal, the network encountered two problems; users concentrating extreme liquidation risk into the BAT (and ZRX) market, “placing the protocol in jeopardy” and the majority of existing users, who are using it “honestly”, are receiving little to no COMP Distribution.

Compound founder Robert Leshner proposed several solutions to the problems, including increasing the Reserve Factor on each asset, making interest rate models across all assets more uniform, and reducing the COMP speed.

He also proposed updating the distribution formula to “totalBorrows * USD Value” from “totalBorrows * borrowingRatePerBlock * USD Value.”

The proposal has been approved with 1,198,438 COMP votes, while 189,177 COMP was not in favor. But those in favor have been the ones that put their money into the project.

Given that, the team and investors of the project hold about 46% of the total tokens compared to mere ~0.03% of tokens issued every day; it was to be expected.

But now the question is, how decentralized is this DeFi (Decentralized Finance) project?

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Author: AnTy

Crypto Options Exchange Sparrow Raises $3.5M Led by BitMex’s Parent Firm HDR Global

  • Sparrow, a crypto options trading platform based out of Singapore, has raised $3.5 million in a Series A funding round.
  • The funding round, led by the parent company of Bitmex exchange HDR, also saw participation from the likes of Signum Capital, Du Capital, and FinLab EOS VC.

The options exchange offers Bitcoin and Ethereum options trading on its platform, which is executed via smart contracts. The firm also claimed that current liquidity would set them apart from similar other platforms saying their platform has more liquidity than over-the-counter trading Options.

Kenneth Yeo talked about how Sparrow as a platform is well structured to facilitate options trading in the decentralized space and said:

“Around 90% of our orders are filled within minutes, via a global liquidity book and an extensive network of liquidity providers and market makers.

Our options are settled on Ethereum smart contracts on the NIDUS Chain, enabling automated and transparent settlement of options contracts.

Competing platforms are proprietary and closed systems that rely on trust rather than transparency.”

Sparrow exchange was launched back in June 2019, and CEO Yeo claims that since its launch, the trading platform has seen its volumes grow by three folds peaking at $150 million.

With the crypto derivatives market flourishing and registering all-time high trading volumes, sparrows Series A fundraiser could prove to be a big boon and provide them with a push start in the already thriving market. At present, both the Options and Futures crypto derivatives market are seeing higher volumes than the spot markets.

Crypto Derivatives Market Thriving

The crypto derivatives market has seen a significant surge in volumes for both futures and options market. While the options market is comparatively just a fraction of the futures market, it still registered an amount of $3.1 billion last month. In comparison, the futures market clocked a whopping $558 billion in the same period.

The options market’s volume might look like a small fraction when compared to futures and spot markets that seem to be growing at a rapid pace. The ratio between spot trading volume and options trading volume has surged from 0.009 to 0.029.

Sparrow is planning to utilize the recently raised capital on expanding its service and workforce. The options trading platform has also applied for a payment license in Singapore.

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Author: James W

Signature Bank Uses Fireblocks to Launch Blockchain-Based Payment Platform, Signet

Signature, a New-York based commercial bank, has launched its blockchain-based digital payment platform, called Signet, on Fireblocks network. This integration also makes Signature the first bank to debut its digital payment platform on the Fireblock network.

Fireblocks is an enterprise-grade blockchain platform known for facilitating the storage, moving, and issuance of digital assets and helping traditional institutions like banks, exchanges, and custodians to scale their digital asset infrastructures. However, Signature is the first bank to integrate with the blockchain scaling platform.

Michael Shaulov, Chief Executive Officer of Fireblocks, commented on their recent association with Signature bank and said:

“Fireblocks and Signature Bank share the same core philosophy when it comes to ensuring the accessibility and security of customer assets 24/7/365. Naturally, Signature Bank is a vital partner for us as we continue to grow the Fireblocks Network.”

Signet is a tokenized representation of the US Dollar made to facilitate instant settlements. The commercial bank also released an Application Program Interface (API) for Signet, which can be easily integrated by its clients and banks in their respective systems and access full transactional capabilities.

The API also helps the bank clients to settle the transaction in real-time and low cost. Signature Bank clients and Signet users can now use Fireblocks to initiate their transactions using the API.

President and Chief Executive Officer Joseph DePaolo, of Signature Bank, commented on their Fireblocks integration:

“The integration with Fireblocks will offer an enhanced service for our clients. With this latest banking technology innovation, Signature Bank remains at the forefront as we advance our Signet product and its capabilities.

As the digital needs of our clients continue to evolve and the broader adoption of asset tokenization increases, Signet APIs are yet another example of how we continuously strive to help our clients deliver better business performance and improve their operations,”

Signet was launched back in January 2019 and was the only platform of its kind to be approved by the New York State Department of Financial Services.

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Author: Rebecca Asseh

Goodbye Stellar, Kin Project Approves Switch To Solana Blockchain Due To Scalability Issues

In a move to increase the scalability and speed of its platform, Kin Foundation, the lead development team of the Kin crypto, voted to move from its Stellar blockchain fork to Solana blockchain.

The Kin Foundation lead team voted on the proposal to move to Solana blockchain to solve the scalability constraints on the Stellar blockchain. According to a the KIN community, the company has been exploring the possibility of the move for the past month, raising the proposed move to Solana.

The proposal on GitHub, raised by Kik Interactive Inc., was overwhelmingly supported by the board and community of the project set off plans to start the move in the coming weeks.

The journey of Kin crypto started in mid-2018, with the founder of the Kik messaging app, Ted Livingstone, building it on the Ethereum network. Scalability issues on ETH caused Kin to move its transactions to Stellar’s blockchain and successively create its fork on the blockchain.

The trouble with Stellar

Stellar’s latency times of five seconds and the scalability constraint of only 100 transactions per second is “not great consumer experience,” the report on GitHub reads. With a growing customer base, currently, at 3 million and over 50+ partnering applications, Kin Foundation turned to Solana for solutions.

Solana’s co-founder, Anatoly Yakovenko, says the platform can settle over 6000 times more transactions per second and 400ms block times. This will boost the overall transaction speeds while reducing latency times on the Kin platform. Anatoly further said,

“In addition to speed, Solana’s natural ability to scale turned out to be a major determining factor in their (Kin’s) decision.”

Despite the progress of the Kin crypto project, the U.S. Securities Exchange Commission (SEC) is on the company’s neck challenging its ICO process. These recent troubles with the SEC are causing a slow growth to Kin’s project, one analyst argued.

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Author: Lujan Odera

Algorand To Record Chess Player Data And Ratings For FIDE Online Arena on Its Blockchain

The official online Body of Chess has selected Algorand’s blockchain platform to record FIDE Online Arena World Chess Player’s data, which would include ratings and titles of players updated in real-time. People would be able to view the details of the online chess tournaments with a click of a button.

FIDE was founded in 1942, and it acts as a governing body for the sport of Chess and also responsible for creating various international chess tournaments. Fide Online Arena is the server which is often used to host official online tournaments and world champions where participants can earn global ratings and titles.

Silvio Micali, the founder of Algorand, also played a game of Chess against grandmaster Sergey Karjakin as the inaugural game for the FIDE Online Arena, and was recorded on the Algorand’s blockchain and broadcasted via World Chess.

Ilya Merenzon, CEO of World Сhess, commented on the decision to move to blockchain stating that it would bring more transparency in record keeping. He said:

“It’s exciting to continue bringing innovation to Chess. The advent of digital games on the internet made Chess more popular than before, and now we can’t wait to further explore blockchain innovation for digital Chess.”

How Algorand’s Blockchain Would be Utilized?

The Official online body of Chess aims to use Algornad’s blockchain to store game results and verify player’s ratings in a way that cannot be manipulated or altered. World Chess would also make use of the blockchain ledger to develop new reward systems and offer incentives to players in using the internal currency.

Blockchain-based ledger would help World Chess to explore the extents of blockchain technology, and they would also like to examine various aspects of the nascent technology.

Sean Ford, COO of Algorand, called their association with World Chess as a historical event and believe the blockchain technology would not only help World Chess to create a robust system for record-keeping but also help in mainstream adoption of the decentralized tech. He said:

“This historical moment brings the blockchain community one step closer to mainstream adoption, as a widely popular competitive game like chess leverages distributed ledger technology to serve as the official record for the trust of millions of online chess players and fans.”

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Author: Hank Klinger

Crypto.com Rolls Out New Infrastructure Upgrades In Preparation of Derivative Products

Crypto.com, a cryptocurrency trading platform, announced its plans to extend its services to margin and crypto derivatives trading, challenging the big hotshots in the field, including OKEx, Huobi, and Binance.

The announcement further confirmed the addition of new specs and features to improve the overall scalability, speed, and security of the platform.

The new key infrastructure upgrades include a reduction in fees, 10x faster trading speeds with the introduction of a new matching engine, and an order management system (OMS).

Crypto.com Introduces Crypto Derivatives

Crypto.com launched its beta exchange trading platform at the end of 2019 to cater for crypto traders with a need for speed and security for their funds. The company focuses on different aspects of the crypto ecosystem, including the issuance of crypto debit cards and custody services, but the exchange remains the critical driver of growth.

In a bid to improve the trading experience, Crypto.com added improvements. This included its matching engine – OMS – which has increased the throughput and speed by 10x; unified REST and Websocket API allowing high-frequency trading; and a new redesigned infrastructure to improve scalability, security, and eliminating the single point of failures.

CEO of Crypto.com Kris Marszalek said in response to the new improvements:

“With the enhanced performance of the exchange and new features in the pipeline, we want to eliminate any reason for users to go elsewhere and function as their trusted ‘one-stop-shop’ for their digital asset needs.”

The improvements will culminate with the launch of crypto margin trading and crypto derivatives in the latter months of the year once the test phase is complete. However, the exchange will not waiver on holding 100% of its customer’s funds in an offline cold storage wallet despite introducing new products and the need for liquidity on the exchange.

To celebrate the changes, Crypto.com is offering users up to 50% in trading fee discounts, a 2% deposit interest rate, and 0% trading fees for new users.

A Challenge for Crypto.com?

Crypto.com was launched back in 2016 as Monaco, a crypto debit card company, offering MCO tokens as incentives.

However, with the growth of the crypto industry, the company switched to a fully-fledged exchange, raising $100 million in Q3 2019 to offer crypto insurance. The insurance pool has since grown to over $360 million from its 2 million customers across the world.

Now, the company is aiming to compete with the largest companies in the crypto futures business, including Huobi, OKEx, Binance, and BitMEX. They control billions of dollars in the BTC futures market.

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Author: Lujan Odera

CME Records Over 20x Growth in Total Bitcoin Options Open Interest Since May

Institutional grade Bitcoin derivatives platform, CME, is experiencing a superficial growth in options interest from its clients. The total open interest is on a skyrocketing path, witnessing a 2500% increase, from the May 1 at $13 million to over $360 million as of Monday, June 15, 2020.

However, the total daily volume of BTC options traded has dropped significantly during the past week as price levels faltered below the $9,000 mark.

Institutional Interest in BTC Options Explodes

CME Bitcoin options launched in early January this year, starting on a slow note before the market exploded about five months later in May. Across the past six weeks, CME Bitcoin options open interest increased from $13 million on May 1 to an all-time high of $373 million recorded on June 10, 2020.

Source: Skew Markets

Despite the slight retrace to $368 million on Monday, the 2000%+ growth signals a growing interest in institutional investment interest into trading regulated crypto derivatives. CME now holds over 23 percent of the total global OI on Bitcoin options, surpassing the OKEx and LedgerX markets.

A spokesperson of the company, however, said the company “has no plans to introduce additional cryptocurrency products” despite the demand.

A one-Sided Battle in Institutional Investment

According to Matt Kaye, a managing partner at Blockhead Capital, a crypto hedge fund, the increasing open interest gives a “strong signal that regulated institutions are exposing their books to bitcoin.” Investing in regulated BTC products comes at a higher cost, but it seems the institution is ready to pay it, Kaye said.

“CME has a higher cost of capital and is closed on weekends, so anyone trading there is likely making those sacrifices because they have to.”

However, CME’s largest competitor, Intercontinental Exchange’s Bakkt, is not experiencing similar fortunes despite institutional demand growth. Since launching in December 2019, the total OI on Bakkt BTC options has only crossed the $1 million mark thrice (from January 9 to 11th), currently languishing at $66,000 as of June 15.

Skew Markets BTC Open Interest
Source: Skew Markets

Bitcoin options interest has also ballooned in retail markets, given the extremely volatile prices of the top crypto so far. Deribit, the largest exchange dealing in BTC options, has recorded a 300% increase in total open interest since the start of the year. Deribit crossed the billion-dollar mark in the final week of May, setting an all-time high on June 12 at $1.2 billion.

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Author: Lujan Odera

Bison Trails Launches Validator Support For Smart Contract Platform, NEAR Protocol

In an announcement released on June 9, 2020, Bison Trails, an infrastructure as a service platform, announced the addition of NEAR Protocol validator support. As a member of the NEAR Protocol Advisory board, Bison Trails aims at easing the transition of NEAR protocol nodes through the integration of its Proof of Authority (PoA) consensus mechanism and the “Restricted Mainnet” scheduled to launch next quarter.

CEO at Bison Trails, Joe Lallouz, statement on the NEAR Protocol integration acquired by BEG reads,

“We are excited to support the NEAR team as they launch the protocol. I’ve been following the team at NEAR for some time now and am blown away by their focus on the developer experience.

NEAR’s incredible technical team understands building a strong developer ecosystem will help drive success.”

Bison Trails Supports NEAR Protocol Validators

The NEAR Protocol is a proof of stake (PoS) decentralized app that enables the management of high-value assets to give the power of open finance and open web to the user. The system employs a PoA consensus mechanism that delegates the power to approve and verify transactions to validators.

Anyone can become a validator on NEAR Protocol but for those who do not wish to be one, Bison Trails offers its platform to run the node on the users’ behalf.

According to the statement, any participant who runs their nodes on the Restricted Mainnet will be awarded a stipend while the validators “warded special voting rights.” It reads,

“The voting power of these validators will be magnified in the community stage by having the additional delegated tokens on the validator.”

NEAR Protocol also adopts dynamic sharding, which means the number of shards changes in response to usage demands, scaling up and down, in a bid to increase scalability on the platform. The system is yet to be built on to the platform but Bison Trails stated they will be supporting the NEAR’s sharding – as it also helps in Bison’s scalability.

Future of NEAR Protocol

Bison Trails and NEAR Protocol have worked together since March 2019, when the latter become the first company to launch NEAR’s testnet. The co-founder of NEAR Protocol, Illia Polosukhin, believes Bison Trails will provide mentoring and further development on their validator program in the future. On the partnership between the two blockchain firms, Illia said,

“Bison Trails has been at the forefront of what is now considered the professional validator industry, making participation in blockchain networks more accessible and helping to provide more high-quality operators to the network.”

NEAR Foundation, the development lead on the platform, in May announced a $21.8 Million funding led by VC firm, a16z, in its plan to launch the mainnet. Illia said the company will be moving into layers 1, 2, and 3 in the summer of 2020 in preparation for the Restricted mainnet.

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Author: Lujan Odera

OKEx Crypto Exchange Launches ETH Options Contract; EOS Options Trading to Follow

One of the largest cryptocurrency trading and derivative platform OKEx, announced the launch of its Ether options contract on June 4th.

On June 18th, the trading platform will also launch the EOS/USD options as well. The trading platform also confirmed that they had put 1000 ETH in the ETH Options insurance fund to avoid a clawback.

OKEx has managed to make a name for itself in the derivatives market, offering a range of derivative products, including crypto futures and perpetual swaps for BTC and ETH.

Before launching the Ether/USD options, the firm has already launched BTC/USD options, which has proven to be a hit among traders. As per a recent data set released by Skew, OKEx’s BTC/USD options brought in an average daily transaction volume of over $10 million. Jay Hao, CEO of OKEx.commented on the launch of Ether options contract and said:

“The launch of the ETH/USD options provides our users with more trading tools to fulfill their needs of executing different trading strategies. Based on the success of the OKEx BTC/USD options, we are confident to bring users better options trading experience. “OKEx will never stop innovating our products and provide users with one-stop trading services. For example, EOS/USD options will open soon on OKEx. Stay tuned!”

OKEx’s success in the derivatives market meant that it successfully overtook Bitmex to become the largest bitcoin futures market share.

Derivative products help in hedging risks in hard times and maximize profits. Among these numerous derivative products, options and futures are the most popular ones.

Options contracts allow the traders to buy/sell depending on the type of contract, and the underlying asset, be it Bitcoin or Ether, helps traders to hedge risk.

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Author: Rebecca Asseh

Payment Platform Crypto.com Receives ISO/IEC 27701:2019 Certification for Data Privacy

Crypto.com, a crypto payment platform has become the first crypto service provider to obtain an ISO/IEC 27701:2019 privacy certification, announced the payment platform on June 2nd. After numerous third-party audits, SGS which is a leading inspection certification provider, granted the golden privacy certification to Crypto.com.

The privacy certification is considered as the new standard for data privacy as it set the standards for Privacy Information Management System within an organization. The certification also requires the assessment of information security risk. The firm seeking this certification can determine the scope of the audit.

Crypto.com underwent a rigorous audit of multiple departments including the mobile application. SGS mainly focused on the privacy information management system that has been put in place to help mitigate privacy risks. SGS examined the company’s privacy risks against the ISO/IEC 27701:2019 standard, The certification for crypto.com for sure is a big achievement, but it needs to continuously maintain the same standard of privacy and data security to maintain its certification status. Jason Lau, Chief Information Security Officer of Crypto.com stated,

“Rather than focusing on one data privacy regulation, our strategy is to work towards having a global data privacy governance model, allowing us to adapt more readily to changing regional regulations. ISO/IEC 27701:2019 is validation to our employees and our customers that our focus is not just security, but also upholding the privacy rights of individuals, and an organizational-wide commitment towards constantly enhancing our global privacy program.”

Crypto.com was founded in 2016 and currently boasts of over 2 million customers. The platform has managed to garner high interest for its privacy features and ease of use. The privacy certification would only boost its contention further.

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Author: Rebecca Asseh