The Central Bank of Brazil on 21st August announced that it will be setting up a world-wide study group to research the issuance of central bank digital currencies (CBDC). The central bank, in its official statement, noted the growing impact and adoption of digital assets, especially CBDCs.
The new study group will look into various aspects of digital assets and how it can help in the economic uplifting of citizens while ensuring to mitigate all risks associated with digital assets.
The main intention of the study will be to improve commercial transactions between public and private entities, along with improving international or cross-border remittance services. Some of the critical areas of this worldwide CBDC Study include,
The study group tasked at looking into different aspects of CBDC will also study the security vulnerabilities involved with these digital assets like data protection and regulatory compliance risks involved.
CBDCs have been a priority for many countries, especially after China’s aggressive approach towards blockchain and the launch of its native CBDC. Most of the countries are quite receptive to blockchain technology despite being critical of cryptocurrencies. This is the reason most of the countries are looking for ways to launch their own CBDC.
Compound (COMP) is setting an impressive rise since its launch a fortnight ago with the coin’s price, popularity, and total value locked have seen multiple times growth rates since then. Additionally, several crypto exchanges have rushed to list the token after its impressive performance. After additions to Coinbase Pro, Coinbase, and FTX derivatives exchange, COMP is now set to start trading on OKEx and Binance.
OKEx launches COMP spot trading
Big exchanges are jumping on to listing Compound’s governance token in what can only be described as a FOMO move listing a two-week-old token. OKEx becomes the latest exchange to launch trading pairs of the coin, including the Tether (USDT) and Bitcoin (BTC) pairs.
Users can buy, sell, deposit, and withdraw COMP from the exchange as of Monday, Jun 29, the announcement reads. Trading opened at 9 AM UTC, and as at the time of writing, only 228 COMP has been traded on both pairs on the exchange.
COMP currently trades at an average of $235 across major exchanges representing a 4.31% drop in the past 24 hours. The daily trading volumes remain high at $11 million across 31 listed pairs on over ten exchanges – COMP reached an all-time high daily trading volume of $31 million on Friday.
Safe or not? Binance launches futures trading
In a similar breath, Binance launched futures trading of the COMP token offering USDT settled contracts starting Tuesday, June 30. The statement reads,
“Binance Futures will launch COMP/USDT perpetual contract, with the trading opening on 2020/06/30 09:00 AM (UTC). Users will be able to select between 1-50x leverage.”
However, a section of crypto traders has come forward criticizing the exchange for its high leverage positions on a relatively new token in the market. It is a question of making a profit vs. a safe environment for traders.
Binance, which has been at the forefront in speaking on the need to protect users, faces a dilemma as the volatility of an unproven token may cause a similar flash crash to Matic Network’s in December 2019 and with it liquidate users’ funds.
Rise to the top
Compound is a platform that allows users to earn interest by lending and borrowing digital assets. Launched in 2019, the company ascend to the top of the DeFi industry comes as a shock to many. Compound is currently the largest DeFi platform overtaking Maker (MKR) in total asset value locked (TVL), according to Defipulse.com.
Compound dominates the industry with $626 million in digital assets locked on the platform, representing 38.2% of the total value in decentralized finance.
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.
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.
Hoping ADA to jump into top three cryptos with the launch of Shelley is setting yourself up for failure – said Charles Hoskinson
Bitcoin will maintain the store of value status & be a multi-billion dollar ecosystem, just like gold
Central banks’ stimulus for too long can force a banking crisis which will be the time for crypto to shine and “we’re building for that”
Proof-of-stake (PoS) blockchain Cardano (ADA) Founder Charles Hoskinson conducted his latest AMA last week where he shared the delay of its Shelley era has been due to several factors. As Hoskinson explained,
“Byron reboot and the Shelley Haskell testnet – once those two events happen then we are a hundred percent confident.”
Recently, there have been reports that the Shelley update has been postponed because of the coronavirus (Covid-19) which Hoskinson was quick to deny, calling it “fake news.”
The most significant release, Byron Reboot has been said to be “100% re-written code, security audited, built with formal methods and it’s 100% built in-house.” This critical milestone will enable the migration from the Rust programming to Haskell.
Hoskinson isn’t concerned about the delays or the time taken to release Shelley on the mainnet. But he did share that even such a big release won’t affect the price of ADA.
“We are in a market condition right now where if you launch Shelley it’s actually not going to significantly impact the price of ADA. So if you are hoping for Cardano to somehow become top three cryptocurrencies the minute Shelley comes out, I think you are setting yourself up for unrealistic expectations and failure.”
And if you wanna know why the cryptocurrency price is currently so low — $0.024, down 63% in the past month and 98% from its ATH — that’s because
“everything else is low and when everything else goes back up it goes back up. Real decoupling takes years.”
During his livestream, Hoskinson also talked about working on implementing commercial infrastructure, which can be expected in the coming months. According to Hoskinson, it is what Cardano needs “to be competitive against other cryptocurrencies.”
ADA “significantly better crypto” than Bitcoin
The CEO of IOHK, the company behind the cryptocurrency, also believes ADA will surpass Bitcoin, the world’s leading cryptocurrency.
This is because “we have more utility and we’re just a significantly better cryptocurrency.” According to him, Cardano is the first to offer the same security principles as of Bitcoin but with none of the downsides which “makes no sense for Bitcoin to rule the roost.”
Cardano, he said, is the first one to “come at it with the same overall technological goals of Bitcoin but do so in a way that vastly surpasses it,” in terms of extended UTXO, matched all of its security properties, and has smart contracts.
He further talked about how Bitcoin mining spends more power than the country of Switzerland while Cardano only spends 10 kilowatts. Hoskinson said,
“We have so much utility and we can complete the entire enhanced transactions so the asset the identity component; the metadata component, the contractual component as well as the regulatory component, given that we can do all those things and Bitcoin cannot, there’s just no reason to use Bitcoin as a medium of exchange or as a Dapp platform.”
The only good thing bitcoin can be, according to him, is a good store value and,
“I believe firmly it will maintain that status and it will still be a multi-billion dollar ecosystem. But it’s just like gold and it’s just one of many options. It has its place in purpose but it doesn’t do everything.”
Central bank stimulus to force a banking crisis
During his AMA, the co-founder of Ethereum also touched upon the central banks’ stimulus and how too much of it will lead to a crisis.
“We can’t have trillion-dollar quantitative easing and stimulus packages and zero percent or negative percent interest rates. You just can’t do that. If you do it too long, the system will start crunching and then those of if they’re too heavy will force a banking crisis.”
But that would mean, cryptos will be at the center stage and that’s what Cardano is preparing and building for, said Hoskinson.
“That’s going to be the time for crypto to shine, can’t tell you when it’s gonna happen but I tell you it will happen and when it does that’s our time and we’re building for that.”
The ongoing environment he said is a very risky time, where a bank run can take Bitcoin to $100k or collapse it to a thousand dollars.
Jiang Zhuoer, founder of mining pool BTC.TOP proposes miners voting, setting up an ETH Foundation like foundation, and 2-3% of miners’ donation ratio.
In the second round of the Bitcoin Cash development fund, mining pool BTC.TOP founder Jiang Zhuoer said he is open to debate on this and “if the test turns out positive, we continue, otherwise we stop.”
The plan for the development fund received much flak from the Crypto Twitter. But Zhuoer said he is open to discussion and to make a decision, he proposes hash rate voting because miners have the right to vote on how to spend their coinbase production.
For this, Zhuoer proposes 3-month miners vote to be conducted and if two-thirds of the hash power votes are in favor — only those votes will be truly value that have cost — then the donation plan can be included as part of the protocol upgrade in May 2020 or for the next one in November 2020. The funding will last for six months until the next upgrade.
A Foundation Like ETH Foundation
Though many facets of the donation plan still need to be fixed, Zhuoer says miners will donate directly to the development projects they want to donate to. This he said would see the removal of the companies as otherwise, donation recipients may lead to the centralization.
He further recommends setting up one or various foundation and may refer to ETH Foundation for the same which he believes is “working well.” And if a miner doesn’t want to donate to a project, they can donate to the foundation.
Or another option is to send the coinbase rewards to “BCH Black Hole address to destroy these coins — this is in fact a donation to all BCH holders.”
But before this plan is officially kicked off, the BCH Miner Fund will be established to accept donations from miners and other individuals and corporations. This Foundation will run for a pilot period to show its effect to the community.
What’s to come?
Zhuoer believes a decentralized community shouldn’t rely on centralized companies’ donations for a long time and hence the development fund. As for the miners’ donation ratio, while 12.5% is other mining pools’ opinion, he believes 2-3% is sufficient for now which could even be as little as 1% in 2021 because of the “incoming bull market in 2020-2021/22” which he said will see BCH price rise sharply.
He holds 3500 P hash power and can influence almost 10,000 hash powers. Because his total hash power amount will be “sufficient” for this plan, Zhuoer said he will allocate his personal hash power to a new mining pool as being one of the shareholders of the BTC.TOP mining pool, he “can not ask the company to lose money as I wish.”
Also, he will vote against the donation to ensure the donation stops after the 6 months as “further development will be decided by the community.”
Zhuoer wants everyone to share their comments and opinions on this plan and if the final result is negative, he said he would be “happy to accept” that as well.