IMF Warns of DeFi & Stablecoin Risks, Biden Administration Taking ‘Aggressive’ Approach to Crypto

IMF Warns of DeFi and Stablecoin Risks, Biden Administration Taking ‘Aggressive’ Approach to Crypto

A senior White House official says the administration ensures a “smart and effective regulatory system” for crypto. Meanwhile, for the IMF, because DeFi is one of the main drivers of the rapid growth of stablecoins, it “warrants close attention.”

The Biden administration is ramping its regulatory scrutiny of cryptocurrency and will make a move to address a range of risks, reported the Wall Street Journal, citing a senior White House official.

Peter Harrell, senior director for international economics and competitiveness with the National Security Council at the WSJ Risk & Compliance Forum on Tuesday, said,

“You’re really seeing the administration at the beginning of what we expect will be an ongoing, quite aggressive effort to make sure we understand and address the whole range of risks that we see in the cryptocurrency space.”

At the same time, the administration seeks to position the U.S. as a leader in digital asset innovation.

According to Harrel, the agencies do think the cryptocurrency industry has “some potential benefits,” such as financial inclusion, but added, “there are clearly a whole range of risks.”

“I think you’re really seeing the administration kind of moving out on a number of different lines of work to make sure that we have a smart and effective regulatory system in place for cryptocurrency.”

A Sound Regulatory Framework

Elsewhere, the International Monetary Fund warned that the rapid growth of cryptocurrencies poses several risks to both investors and policymakers.

While the “crypto ecosystem offers an exciting new world of opportunities,” it also has its challenges in the form of risks to consumers from lack of operational or cyber resilience and anonymity and limited global standards creating data gaps for regulators, which in turn pose a threat to financial integrity, it said.

Moreover, “the advent of crypto assets and stablecoins in emerging markets and developing economies may accelerate dollarization risks,” said the IMF adding these markets can face “destabilizing capital flows” because cryptos are used to circumvent capital controls.

The report also mentions investor protection risks for DeFi, which it says is “gaining momentum by offering new services to users,” and inadequate reserves and limited disclosure for some stablecoins.

Decentralized finance (DeFi), according to the IMF, is actually one of the main drivers of the rapid growth of stablecoins as such “warrants close attention.”

“A sound regulatory framework for crypto assets, and decentralized finance markets more generally, must be a priority on the global policy agenda.”

When it comes to stablecoins, the IMF says regulations should correspond to the risks they pose and the economic functions they perform.

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Author: AnTy

Soros Fund Investing in Crypto Infrastructure Says CEO; Bitcoin Is Taking Gold’s ‘Firebase Away’

Soros Fund Investing in Crypto Infrastructure Says CEO; Bitcoin Is Taking Gold’s ‘Firebase Away’

In her “mysterious response,” Dawn Fitzpatrick refused to answer if she owns any BTC.

Soros Fund Management Chief Investment Officer Dawn Fitzpatrick revealed that the fund is making investments in the cryptocurrency industry as it sees an “inflection point” for Bitcoin and other crypto-assets.

In an interview with Bloomberg, when asked if she owns any Bitcoin, Fitzpatrick replied with a “mysterious” – “I’m not gonna answer that.”

While she didn’t reveal her personal Bitcoin holdings, she talked about her views on the cryptocurrency industry.

“We think the whole infrastructure around crypto is really interesting. We’ve been making some investments into that infrastructure, and we think that is at an inflection point. I’d say it’s everything from kind of exchange asset managers custodians to the mundane like tax reporting on your crypto gains and everything in between. We think that’s interesting.”

She further discussed how the Federal Reserve’s money printing is the factor behind Bitcoin’s success.

“We’re at a really important moment in time in that something like Bitcoin might have stayed a fringe asset. But for the fact that over the last twelve months, we’ve increased money supply in the US by 25 percent. So there is a real fear of debasing of fiat currencies.”

According to her, Bitcoin is not a currency but a commodity that’s easily storable and transferable. The IRS also classifies it as a physical asset that has a finite amount of supply. The fact that Bitcoin’s limited supply halves every four years is “interesting” to her.

“By the way when you look at gold price action in the context of a fairly robust inflation narrative of late, it’s struggled getting traction. I think that’s because Bitcoin is taking some of its firebase away.”

Regarding the central bank launching their own digital currencies (CBDC), Fitzpatrick said they are going to be here and even “quicker than people expect.” China is currently leading the race for CBDC as it has already run several digital yuan trials for a while now.

“There are some strategic reasons why they are going to be a first mover. And I do think from a geopolitical perspective; they want to use that digital currency too. They want that to be used around the world. And it is a potential threat to other bitcoin and crypto.”

While she thinks CBDCs are a “real threat” to crypto, it will only be “temporary,” as they won’t be successful in “permanently destabilizing Bitcoin,” she said.

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Author: AnTy

$1.2 Billion Liquidated on Binance, Taking the Lead like Always, on Bitcoin’s Drop to Nearly $50k

$1.2 Billion Liquidated on Binance, Taking the Lead like Always, on Bitcoin’s Drop to Nearly $50k

Binance, which leads in Bitcoin futures volume is accounting for nearly 50% of all the liquidations. The exchange has a default setting of 20x leverage and offers up to 125x, which has been used by 20% of traders in the past.

The price of Bitcoin tumbled to about $50,300 on most of the cryptocurrency exchanges during the latest sell-off.

As of writing, the leading digital currency is trading around $51,500, but it is yet to be known if the market has bottomed or, as we have seen this entire week, BTC would fall further to a new lower level.

Still, there is nothing to be worried about as of yet, as the last two pullbacks were 31% and 26%.

Meanwhile, in the past 24 hours, a whopping $2.44 billion and 328,306 traders have been liquidated, as per Bybt. These liquidations now surpass the level seen on March 14, which sent us to $53,150 the day after hitting the all-time high of nearly $62,000.

Today’s liquidation of both longs ($2.23 billion) and shorts ($190.36 million), however, hasn’t reached the level of Feb. 22nd and is far off from the day before that.

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Source: Bybt.com

Out of these $2.44 billion liquidated, about $28 million belongs to Bitcoin traders and $3.91 million to Ethereum ETH -0.04% Ethereum / USD ETHUSD $ 1,595.51
-$0.64-0.04%
Volume 29.07 b Change -$0.64 Open $1,595.51 Circulating 115.2 m Market Cap 183.8 b
5 h Coinbase Selected By Meitu For $90 Million Crypto Purchase and Custody 6 h $1.2 Billion Liquidated on Binance, Taking the Lead like Always, on Bitcoin’s Drop to Nearly $50k 6 h Theta Mainnet 3.0 Delayed Till June; Devs Needs More Time for Elite Edge Nodes & TFUEL Staking
. Another whopping $1.18 million and $1.03 million belong to Filecoin FIL 5.21% Filecoin / USD FILUSD $ 91.17
$4.755.21%
Volume 2.89 b Change $4.75 Open $91.17 Circulating 60.52 m Market Cap 5.52 b
5 h Decentralized Cloud Storage, Filecoin Integrates Chainlink for Bidirectional Smart Contract Support 6 h $1.2 Billion Liquidated on Binance, Taking the Lead like Always, on Bitcoin’s Drop to Nearly $50k 1 w Grayscale Launches Investment Trusts for LINK, Filecoin, Decentraland, BAT, & Livepeer
and Polkadot DOT 1.43% Polkadot / USD DOTUSD $ 29.94
$0.431.43%
Volume 3.42 b Change $0.43 Open $29.94 Circulating 923.31 m Market Cap 27.64 b
6 h $1.2 Billion Liquidated on Binance, Taking the Lead like Always, on Bitcoin’s Drop to Nearly $50k 3 d Solana (SOL) is ‘Uniquely Positioned’ to Snatch Market Share from Ethereum & ETH Killers, says VC 6 d “Dark Horse”: BNT Burn Is Around the Corner As A Swiss Bank Embraces Bancor
, respectively.

Interestingly, like always, Binance leads in liquidations accounting for nearly 50% of all the liquidations at $1.2 billion, out of which $1.1 billion were longs.

Bitfinex and Deribit traders remain to be level-headed, with their funds accounting for a mere 0.12% and 0.83% of the total exchange liquidation share, respectively.

These liquidations could be in part related to Binance managing $38.16 billion volume in Bitcoin futures in the past 24 hours compared to Bitfinex and Deribit’s $70 million and $2.56 billion, respectively, as per Skew.

Another reason could be the high leverage offered on Binance. While leverage is available up to 125x on crypto perpetual contracts, the default is also 20x.

As we shared before, Binance reported in December 2019 that within its first two months of its futures operations, on average, over 60% of traders use 20x or higher, and 21% of traders use the maximum 125x leverage.

Leverage is extremely popular in crypto and tends to exacerbate Bitcoin’s moves both on the upside and downside. Traders and industry experts have time and again advised people to refrain from using leverage in the crypto space, which already enjoys high volatility.

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Author: AnTy

Crypto Miners Taking Advantage of Hot Market to Raise Funds

Cryptocurrency companies are taking full advantage of the ongoing bull market. There is a lot of euphoria present in the market as Bitcoin becomes a trillion-dollar asset and the overall crypto market cap grows past $1.7 trillion.

Already, we have seen the leading US exchange Coinbase filing to go public with a whopping $100 billion valuation. This is only expected to lift the market mood further, described by some as a watershed moment for the crypto industry.

Another crypto exchange Kraken is on track to do the same, but not until next year. ICE backed Bakkt took the SPAC route, and so did the Bitcoin miner Cipher.

The same can be seen happening in China, attracting millions of dollars.

Chinese Bitcoin mining machine manufacturer Ebang International Holdings conducted two fundraising rounds just last month. The company that debuted on Nasdaq in June raised $170 million.

Eban plans to use the newly raised capital to expand into crypto mining, to open crypto exchanges in Canada and Singapore, and to launch a Robinhood-like Bitcoin trading platform. Guo Yi, COO at Univest Securities, which underwrote the deals said,

“Ebang’s growth story is very attractive to institutional investors … fundraising by all industry players is getting busier thanks to the bitcoin bull.”

Last month, it also announced that it would be launching Dogecoin (DOGE) and Litecoin (LTC) mining operations, for which they completed a design of a chip for simultaneous mining.

A newcomer, another Chinese company, Code Chain New Continent Ltd, the waste recycling company raised $25 million in February to foray into Bitcoin mining, for which it has ordered 10,000 machines. David Feng, co-CEO of Code Chain said,

“Bitcoin prices present us with a unique opportunity to establish mining operations.”

Another Nasdaq-listed Chinese Bitcoin mining machine maker, Canaan Inc., is expanding into mining.

In private markets, “competition is white-hot and filled with sharp elbows,” said Jehan Chu, managing partner at Hong Kong-based blockchain venture capital firm Kenetic Capital. “Every good-quality funding round is oversubscribed within a week of it being announced.”

Crypto miner Argo Blockchain announced this week that it had raised around £26.8mln (nearly $37.5 million) through a placing of new shares to institutional and other investors. It will allow the company to complete an investment in Pluto Digital Assets and pursue strategic opportunities in crypto mining, decentralized finance (DeFi), and Web 3.0 initiatives.

Cobo, a crypto custodian and wallet service provider, is also planning to launch a new round of venture capital funding this month to finance its international expansion. “The market is bullish, and our business is growing very, very rapidly,” said Jiang Changhao, co-founder and CTO of the Beijing-based company, aiming for tens of millions of dollars.

Amidst this, the world’s largest crypto-mining equipment maker, Bitmain, has been the target of an investigation into illegal talent from Taiwanese firms over a period of three years. Taiwan prohibits firms from China from recruiting locally or doing business without prior approval.

In other news, JPMorgan has filed for a “Cryptocurrency Exposure Basket” through companies that invest in digital assets. The referenced stocks are Riot Blockchain, NVIDIA Corporation, Taiwan Semiconductor Manufacturing Company Ltd., and others.

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Author: AnTy

Winklevoss Twins Considering Taking Gemini Public; Acquire Blockrize to Launch Crypto Credit Card

Winklevoss Twins Considering Taking Gemini Public; Acquire Blockrize to Launch Crypto Credit Card

Bitcoin HODLers Cameron and Tyler Winklevoss offering up to 3% reward in BTC and other cryptocurrencies on their Gemini Credit Cards while “still committed” to Bitcoin ETF but not looking to increase their BTC position.

It’s the season to go public!

After Coinbase, Bakkt, this time its cryptocurrency exchange Gemini.

Bitcoin billionaire brothers Cameron and Tyler Winklevoss told Bloomberg that they are considering taking Gemini Trust Co. public amidst the heightened demand in the crypto market.

“We are definitely considering it and making sure that we have that option,” said Cameron Winklevoss, co-founder of the New York-based digital-asset firm.

“We are watching the market and we are also having internal discussions on whether it makes sense for us at this point in time. We are certainly open to it.”

With this news on Thursday came the announcement of the launch of the Gemini Credit Card.

The card will function like a traditional one but with an additional feature to earn crypto rewards on everyday purchases with up to 3% back in bitcoin and other cryptocurrencies. These rewards will be deposited into cardholders’ Gemini’s accounts automatically.

“Cash is trash,” said Gemini chief executive Tyler Winklevoss. “So as you spend your cash, you get Bitcoin — it’s a pretty good trade-off.”

The launch of these upcoming cards has been accelerated by the acquisition of Blockrize, a fintech startup building a credit card with crypto rewards, for an undisclosed sum. Customers can sign up to the waitlist for the cards that will come later this year.

This the second acquisition by Gemini as back in Nov. 2019, the company acquired Nifty Gateway.

Gemini is making a lot of waves and is further looking to make more with its Bitcoin exchange-traded fund (ETF).

The Winklevoss twins were the first to file for a Bitcoin ETF in the US years ago but got rejected by the SEC in 2017. But they are still interested and hired David Abner as Gemini’s global head of business development in December. Abner previously ran ETF efforts at Bear Stearns, BNP Paribas, and WisdomTree Europe.

“We still believe in this product, we are still committed to this product,” said Cameron Winklevoss, but only to add that they don’t have anything to share in this regard at the moment.

Gemini is actually the sub-custodian of the Bitcoin held by the ETF filed by Arxnovum Investments Inc. on Monday with the Ontario Securities Commission in Canada.

Meanwhile, the crypto market is rejoicing all the bullish development going on in the crypto space, with Bitcoin going back to $40k today. While the Winklevoss brothers predict Bitcoin reaching $500,000 in a decade, they are “not actively looking to increase our position” because they have “a lot of exposure as it is.”

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Author: AnTy

Solana Launches SOLAR Bridge; Bringing Arweave’s Decentralized Storage to Its Blockchain

The Solana blockchain is taking little time to expand as it recovers from a significant downtime earlier this week. In its latest development effort, the blockchain announced a partnership with decentralized data storage protocol Arweave.

Data Storage for High-Performance Blockchains

Solana announced a partnership with decentralized data storage protocol Arweave to launch the SOLAR Bridge. The bridge signifies a major milestone for Solana, making it the first blockchain platform to transfer and store transaction history on Arweave’s dedicated network.

Solana is a high-performing blockchain that processes substantial amounts of data. The partnership with Arweave takes the burden of designing an in-house data storage infrastructure off Solana.

With the SOLAR Bridge, Solana’s node validators will validate transactions and store them on Arweave. As such, there won’t be a need to validate one transaction twice.

Solana handles one newly-produced block every 400 milliseconds, with its network already passing 50 million cumulative blocks since it started operations in March 2020.

The company added that its blockchain could handle more than twice the number of blocks produced by the Bitcoin, Ethereum, Polkadot, Cosmos, and Algorand blockchains combined.

This is not difficult to comprehend. Data storage is critical for a network that handles historical data for users. Solana’s growth as a decentralized solution hinges on how it safely and securely stores data.

The blockchain now seeks to leverage Arweave’s decentralized and immutable network to ensure permanent and reliable data storage. Solana stated,

“It’s important to note that Arweave is not expensive; it’s more costly to store data short-term — this is because when you store data on Arweave, it’s permanent. Ledger transition data and indexing from the Solana network will be entirely stored on Arweave with future development efforts to support richer indexes.”

Improving its Current Blockchain Infrastructure

The development comes following a massive network outage that affected the blockchain recently. Over the weekend, Solana confirmed that an issue had originated on its Mainnet Beta cluster, causing it to stop producing blocks after the 53,180,900th block suddenly.

The break essentially put a hold on the blockchain’s ability to confirm transactions, with the outage lasting for about six hours. It was eventually fixed after 200 network validators forced a restart sequence. The forced restart allowed the blockchain to resume operations optimally.

With some data moving to a separate network, Solana is hoping to free up space on its blockchain and possibly prevent issues like these in the future. The SOLAR bridge is also the second development coming to the blockchain in recent months.

In October, Solana announced Wormhole, a decentralized bridge supporting ERC-20 tokens that allow users to transfer value between different blockchains quickly. Wormhole works based on the action of “guardians,” which were selected from the current Solana validators. Guardians will read data from both blockchains, verifying that the bridge operates optimally.

When two-thirds of the validators sign that a transaction is correct, both sides’ smart contracts will trigger the transfer by minting and burning the appropriate tokens.

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Author: Jimmy Aki

Tether’s Supply on Exchanges Declining Rapidly, Total Stablecoins’ Market Cap at $22.7 bln

Bitcoin is taking a breather around $18,500 after rallying 72.5% In this quarter. Analyst PlanB said,

“Current Bitcoin price action is nice, but we are waiting for a real jump (like the red arrows early 2013 and 2017).”

“IMO that will be the start of the real bull market, and indeed phase5. January 2021?”

Just yesterday, BTC took a pullback to about $17,640, and today, it is back around $18,500.

Amidst this, the percentage of Tether supply on cryptocurrency exchanges is rapidly declining, reaching 13.06% after being at a 2020 high of 44.84% in mid-march following Black Thursday.

The last time, Tether supply was decreasing at such a pace was on July 20th. During that time, the price of Bitcoin rose by 28.2%.

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The market cap of the popular stablecoin has climbed to nearly $17 billion, having increased more than 300% since April this year.

Not just USDT but other fiat-pegged cryptos have also seen explosive growth in 2020. The total market cap of stablecoins has jumped to $22.5 billion, up from $6 billion in early March.

USDC is the second-largest stablecoin that has been growing like crazy, even faster than the dominant USDT. With a market cap of $2.8 billion, Coinbase and Circle’s stablecoin had seen an increase of 500% since March when the prices of digital assets tanked hard along with other assets in the traditional world.

Other notable mentions include $683 million BUSD, $400 million Pax, and $255 million HUSD.

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Author: AnTy

Dutch Crypto Exchanges Want a Screenshot of Your Wallet to Prove the Legitimate Ownership of BTC

Bitcoin exchanges in The Netherlands are taking additional verification measures regarding BTC addresses in reference to the Dutch Central Bank (DNB)’s Sanction Act.

One such exchange Bitonic announced on Monday that it is now “forced” by the DNB to provide additional details regarding the intention behind BTC purchases and the kind of wallet you are using. As such, Bitonic is now,

“Obligated to verify that you are the legitimate owner of the given bitcoin address by requesting you to upload a screenshot from your wallet, or by signing a message.”

As per the Sanction Act, released in Nov. 2019, no funds are to be made available to the individuals and entities that are on the Dutch and EU sanction list by the crypto service providers.

In the event of an actual hit in a sanctions list, the institution needs to notify DNB and either freeze any assets, block the transaction, or do both.

The exchange is against the measure and has pleaded with Bitonic to drop the requirement as it is ineffective and disproportionate. Bitonic is inviting its customers to send their complaints to [email protected] as an “opportunity to formally object to these additional measures and the registration of this data.”

According to the exchange, the Netherlands is currently the only country in the European Union to demand such “far-reaching measures.”

Reportedly, Switzerland also mandates such information from the cryptocurrency exchanges.

Earlier this month, 39 crypto companies, including exchanges and custodial wallet providers, applied for registration with the Dutch central bank to provide crypto services.

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Author: AnTy

Bitcoin’s Moon Target Set at $318,000 in Dec. 2021 by Citibank Report

With Bitcoin turning bullish, the mainstream institutions are also taking a special interest in the leading digital asset. The latest is Citibank, whose bitcoin technical analysis sees lofty price targets at over $300k per BTC by the end of 2021.

Thomas Fitzpatrick, Global head of CitiFXTechnicals product, the author of the report, traces the historical price performance of Bitcoin, which reflects that timeframes for the rally are getting longer, which puts this rally to peak in December 2021 at $318k.

“Improbable though that seems it would only be a low to high rally of 102 times (the weakest rally so far in percentage terms),” with arguments in favor of Bitcoin at their most persuasive ever, he wrote.

The report notes how Bitcoin is all about “unthinkable rallies followed by painful corrections” but a type of pattern that sustains a long term trend.

As such though it’s to be seen if such lofty levels will be hit, “the price action we are looking at clearly suggest the potential for a major move higher nonetheless in the next 12-24 months,” reads the report whose snippets were first shared by trader and economist Alex Kruger.

Although “this kind of technical analysis is of little value,” Kruger noted, “what matters here is Citi’s clients being exposed to the bitcoin moon.”

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Citibank compared the digital asset’s first rally that took it to the mainstream with gold, which similarly “was allowed to float in the early 1970s after 50 years of trading in a $20-035 range.”

And that was a “structural change in the modern-day monetary regime” ushering in a world of fiscal indiscipline, deficits, and inflation. As for Bitcoin, its move happened in the aftermath of the Great Financial crisis.

In 2020, with all the MMT, gold is likely to gain from this, but the author of the report noted that gold has restrictions such as storage, non-portable, and could possibly be even called “yesterday’s news” in terms of a financial hedge.

“Bitcoin is the new gold,” reads the report.

The leading digital asset has a limited supply, is easy to move across borders, and offers opaque ownership. But the author also says that Bitcoin may be subject to more regulatory constraints going forward.

The report further mentions CBDC, which though a much more effective mechanism for distributing stimulus, “makes capital confiscation easier.” In both the scenarios, Bitcoin will give us the digital equivalent (Bitcoin versus Fiat digital) of what we saw in the 20th century when the financial regime changed (Gold versus FIAT paper).

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Author: AnTy

Altcoins & DeFi Back in the Game as Bitcoin Consolidates

After having a run-up of over 20% this week, Bitcoin is taking a breather.

On Thursday, the leading digital asset went to nearly $16,000 after starting the month just above $13,000. This started in October when BTC traded around $10,000 and got into action towards the end of the month.

Now, we are trading under $15,330, at the time of writing, in the red with $2.51 billion in ‘real’ trading volume.

But while Bitcoin is consolidating after scoring a 34-months high, this is a good time for the depressing altcoins to finally do something.

Ether that has been silent during Bitcoin’s run-up finally scored above $465, a level not seen since July 2018, which in part was because of the announcement about ETH 2.0 finally coming in December. For the launch of Beacon Chain, the core of ETH 2.0, ETH deposits have started flowing in too.

While almost everything is enjoying gains, it is yet again the DeFi party, which seems to have finally capitulated.

After dominating the Q2 and exploding in Q3, the decentralized finance sector topped out in September. While the total amount locked in the sector tried to keep up, the price of DeFi tokens took a severe beating.

CRV actually went down 99% from its high while the majority of them dropped 75% to 95%.

But now, the DeFi tokens are being exciting once again, especially YFI. The DeFi darling that went above $40,000 crashed to $7,500 on Thursday and has been looking hideous this week when the volume shot up, and YFI price started trending up.

As a matter of fact, in just two days, it gained over 118% of its value back. As of writing, YFI has been trading at $14,200.

“YFI pushed +33% in an hour. No news. Just a monster buyer/s. This is how potential trend reversals look like,” noted one trader.

Other notable gainers include SOL (+35%), Aave (+30%), SNX (+27%), SRM (+24%), and CRV (+20%).

“Do not underestimate the power of what may seem like superfluous narratives in this space. There’s a reason alts have been pulling the same for years; it works,” said trader Hsaka. “AAVE continues to be the DeFi leader with the largest % change in OI too.”

And these gains can be seen reflected in the record DeFi TVL at $12.48 billion, as per DeFi Pulse.

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Author: AnTy