Sweden Is Working with Corda’s DLT for the e-Krona CBDC Proof-of-Concept

Sweden Is Working with Corda’s DLT for the e-Krona CBDC Proof-of-Concept

The Swiss central bank is already working with Corda’s Distributed Ledger Technology (DLT) for its CBDC proof-of-concept in the proposed e-krona digital currency. Cecilia Skingsley, the bank’s deputy governor, confirmed this development while speaking yesterday at the CFC St. Moritz conference panel. Sweden had recently announced the commencement of e-krona’s exploratory phase.

According to Skingsley, Corda was recommended by Accenture, which began working with Riksbank as early as 2019 on the possibilities of a CBDC. This DLT provider was apparently selected because of its current fit with e-krona’s proposed criteria. Skingsley emphasized that,

“The reason we use Corda is not that we necessarily think that Corda is the best and optimal choice for an eventual future e-krona, but when we did our procurement process, the proposal from Accenture based on Corda we found was the one that fitted our criteria the best.”

With the exploratory phase kicking off, Sweden’s population, which is used to cashless money, could soon witness a transition to digital monetary policy as well. The country has been actively involved in CBDC research and development, ranking among the frontrunners in this space. Nonetheless, Skingsley noted that the developments are but an exploration into the CBDC ecosystem,

“Although we are exploring this issue, the Riksbank has not decided to issue an e-krona. We are still in the phase when we are investigating different options.”

Other prominent jurisdictions like the U.S and France have also started the year with a keen interest in the value proposition in CBDCs. The Fed Reserve Chairman Jerome Powell recently mentioned in an interview that CBDCs are of high priority in the combat against ‘bad private money.’ Meanwhile, China has continued with the digital yuan pilot, having rolled out ATMs in the Shenzhen region.

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Author: Edwin Munyui

Bancor’s Approach to Handling Impermanent Loss Shows Financial Viability

Bancor has been working on a reliable method to address impermanent loss and it seems to have struck gold with its insurance-based approach

The Bancor Network has been busy trying to solve the issue of impermanent loss on its decentralized exchange. In a recent report, the protocol showed significant success with its approach, leading to the belief that it might be able to handle the protection of temporary loss of funds in the long term.

Impermanent Loss on DEXs

Yesterday, Bancor released a Protocol Health Report for its v2.1 decentralized exchange (DEX) upgrade.

The report covered the exchange’s financial and operational performance for the past quarter, showing significant liquidity and revenue gains.

As the report showed, liquidity across the DEX rose by 100 percent over the past three months, resulting in about 700,000 BNT (worth $1.12 million) in earnings from swap fees. However, the platform’s strategy on impermanent loss appeared to have faltered.

When Bancor launched the DEX late last year, it focused primarily on effective impermanent loss management.

Also known as divergence loss, the impermanent loss is a problem that affects mostly exchanges that run on the automated market maker (AMM) protocol. It occurs when liquidity providers (LPs) lose funds due to the volatility of a trading pair. It basically describes how much revenue an investor would have earned if they had held on rather than provide liquidity to the market.

The effect of this divergence is a loss of value, compared to the benchmark “buy and hold” portfolio.

The loss is termed “impermanent” because it could be reverted if the prices returned to their original state. However, even in the best scenarios, losses due to divergence will reduce liquidity providers’ profits from price swings.

Possible Long-Term Benefits

Bancor had initially tried to solve the problem with oracles, which reads token prices and render arbitrage virtually unnecessary.

However, front-running issues rendered this approach impractical. So, the exchange deployed an insurance mechanism to cover the cost of impermanent loss.

The project implemented a vesting schedule to incentivize LPs to stake their tokens in the long term.

The protocol’s strategy was to incentivize more altcoin holders to become LPs instead of adopting the buy-and-hold strategy. Another strategy Bancor plans to explore is to encourage projects to use their treasuries to provide liquidity to AMMs. Just like proof-of-stake (PoS) rewards, the method could allow projects with considerable token reserves to increase liquidity on token pairs and also get additional rewards.

The vesting schedule will see Bancor provide one percent coverage on liquidity capital for up to 100 days. However, LPs who make withdrawals before 30 days won’t get any compensation for losses in that period.

Bancor’s approach appears to be yielding benefits. As the company reported, the total impermanent loss associated with withdrawn liquidity amounted to 41,000 BNT ($64,000). On the flip side, the protocol also earned 350,00 BNT ($560,000) in fees.

Bancor added that some LPs withdrew their deposits before getting 100 percent insurance. These LPs got partial protection, which was paid based on their coverage level. The report pointed out,

“As the proportion of insurance policies with 100% protection increases over time, it stands to reason that the associated cost to the protocol will rise. However, various factors suggest the protocol is able to handle this insurance burden.”

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Author: Jimmy Aki

South Korea Finalizes New 20% Tax Regime on Crypto Starting in 2023

South Korea has been working towards a suitable tax system for crypto trades and profits for a while now, with different proposals and deadlines.

However, after much deliberation, the government has now put forth a viable tax plan for crypto gains.

Pay the Tax Man

Asia Today reported this week that the South Korean Ministry of Economy and Finance had issued an amendment to introduce a new tax rate for crypto trading profits. The amendment could be enacted into law in February, following a legislative notice that will last until January 21, according to the reports. However, the new tax rates won’t be levied until 2023.

Per the report, the government’s new proposal will introduce different additional taxes on capital gains. Crypto traders who make annual incomes of over 2.5 million won ($2,300) will be taxed 20 percent from their trading activities. Comparatively, the threshold is much lower for traditional stocks, with only gains higher than 50 million won ($46,000) receiving the same tax rate.

The tax rate goes even higher, reaching 25 percent for assets over 300 million won. Investors with annual profits of over 50 million won will also need to pay transfer taxes, regardless of whether they are major shareholders or not.

As for cryptocurrencies owned before the tax schedule’s 2023 implementation, authorities are still considering imposing taxes on the market price immediately before 2023 or the acquisition price.

What Date is Appropriate?

The new tax rate isn’t especially a novel development. The Ministry of Economy finalized the regime last July, following a Tax Development Review Committee meeting. The meeting concluded the government’s mission to ensure effective taxation of individuals’ and corporations’ virtual asset holdings – which, up to that point, had been non-taxable.

However, the new regime also ran into a bit of a hiccup, with industry insiders asking that the government delays its implementation. In October, the Korea Blockchain Association (KBA), one of the country’s most powerful blockchain advocacy groups, asked that the government delay implementation until January 2023

Per a report from News1 Korea, the KBA had explained that companies require a “reasonable period” to prepare for the new tax regime. The advocacy group explained that there was a short window between regulations applying to the old tax scheme and the expected start of the new one as crypto exchanges would still be allowed to report on trades falling under the previous tax code until September 2021.

Since the Income Tax Act is expected to be enforced from October 2021, companies would find it challenging to comply with the new regulations in less than 24 hours.

Last month, the South Korean national assembly ruled to extend the tax regime’s implementation to January 2022. With the new ruling setting an implementation date for 2023, crypto companies now have enough time to get in line.

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Author: Jimmy Aki

Ukraine’s CBDC, the Digital Hryvina, Will Run on Stellar’s Blockchain

Ukraine’s CBDC, the Digital Hryvina, Will Run on Stellar’s Blockchain

Besides working on a central bank digital currency, Stellar Development Foundation (SDF) will also help with the development of digital assets and regulation of stablecoins in the country.

The Ministry of Digital Transformation of Ukraine signed a Memorandum of Understanding and Cooperation with Stellar Development Foundation (SDF) on Dec. 28.

SDF announced on Monday, this week, that as per the memorandum they will work on the development of virtual assets in Ukraine.

In response, XLM recorded gains, going to nearly $0.17 XLM 20.28% Stellar / USD XLMUSD $ 0.19
$0.04 20.28%
Volume 2.57 b Change $0.04 Open $0.19 Circulating 21.95 b Market Cap 4.28 b
2 h Ukraine’s CBDC, the Digital Hryvina, Will Run on Stellar’s Blockchain 2 w Stellar Invests $3 Million in Digital Assets Settlement Network Across LATAM 3 w XLM Records Impressive Volume; Co-founder says Team Is Making Stellar ‘Useful for Real People’
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The latest efforts align with the country working on creating a legal environment for the development of digital assets in Ukraine and enhancing its status as an innovative digital country in the financial market in Eastern Europe.

“Another important aspect of this cooperation is contributing to the development of the infrastructure for a Ukrainian national digital currency,” said Oleksandr Bornyakov, Deputy Minister of Digital Transformation for IT Development.

The National Bank of Ukraine has been researching the possibility of CBDC implementation since 2017, Bornyakov said.

As per the memorandum, both will cooperate on the development of the virtual assets market in Ukraine, supporting projects related to virtual assets; implementation and regulation of stablecoin circulation in the country; and development of the digital currency of the Central Bank (CBDC) in Ukraine.

“We look forward to working with the Ministry and other stakeholders to digitize the hryvnia, to bring Stellar-based tools and services to the people and businesses of Ukraine, and to introduce new partnership opportunities in Ukraine to businesses in the Stellar ecosystem.”

Denelle Dixon CEO: Stellar Development Foundation

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Author: AnTy

Bitcoin Hits a New All-Time Record High Against the Traditional Safe Haven Gold

The Bitcoin market is working on broadening the universe of its investors even more.

On New Year’s Day, Bitcoin made yet another all-high against USD at about $29,620.

But in 2020, USD and several other fiat currencies aren’t the only ones against BTC which made new highs. Even against gold, the digital asset hit new highs.

Bitcoin made a new all-time record high against gold at the end of the year.

2020 has been a roller coaster ride for the world and the asset classes as we saw deep retracement in March. But ever since then, every other asset class has jumped to new highs.

Bitcoin, however, was the clear winner of the year, with 318% gains.

While oil still remains deep in red, -22% returns in 2020, other asset classes rallied but are nowhere even close to Bitcoin’s levels. Private assets were up 9% while equities recorded a 15% uptrend in the year, cash 16%, and bonds 20%.

The precious metal had only 28% year-to-date performance after breaking the ATH in August, which was last seen in 2011. After the consolidation for the last nearly four months, the bullion managed to rise back to $1,900 to mark the end of the year.

Bitcoin, on the other hand, had a wild year. Up 675% from the March lows, and in the past fortnight, it broke several levels in succession without any meaningful pullbacks ever since the uptrend started in Sept.

Broaden the Universe Some More

This year, things are going to get even more interesting as the rate at which institutions started to trickle in gained speed towards the end of the year will flood in in 2021.

Another exciting and bullish thing is the Bitcoin ETF. After getting rejected every single time over the past couple of years, this week VanEck filed another proposal for a Bitcoin exchange-traded fund (ETF) with the SEC, and this one will also physically hold BTC.

A change in SEC leadership, Jay Clayton not being a chairman anymore, has the cryptocurrency market’s hopes high of approval this time. Also, with all the institutions, big names, corporates, insurance companies, and high net worth individuals jumping on Bitcoin, the odds of regulatory approval have improved.

“All indications from the SEC are that a bitcoin ETF still faces an uphill battle,” said Nate Geraci, president of the ETF Store, an investment advisory firm.

“That VanEck has the confidence to file for a Bitcoin ETF might indicate some shifting viewpoints within the SEC. Clearly, a key to watch as this drama continues unfolding is who President Biden taps as SEC chair.”

In the case of the precious metal, the launch of the gold ETF had a very significant impact on the gold market. The first gold-backed ETF in the US was launched in Nov. 2004. The largest gold ETF, GLD, is one of the biggest funds in terms of the value of the assets it manages.

And the same is expected to happen with the digital gold – Bitcoin, once its ETF gets approved.

An ETF “could be taken as bullish for Bitcoin because it does broaden the universe of investors who could be aware of Bitcoin,” said Everett Millman, a finance expert with Gainesville Coins.

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Author: AnTy

Trezor Incorporates ‘Tor Switch’ in its Desktop App for Increased Privacy

The popular hardware wallet, Trezor, is working on providing its users’ privacy.

In its desktop app “Trezor Suite,” the cold wallet service provider has implemented the privacy project Tor to allow its users to obscure their connection.

Tor is an open-source network which has its servers distributed around the world run by volunteers and uses a special protocol that encrypts data at multiple levels. One can now not only enjoy the safety of the hardware wallet but the anonymity of Tor as well on Trezor.

“Tor is the perfect match for users who are concerned about sharing identifying data with a third-party service or anyone who might be observing their communications,” said Trezor in its announcement.

By downloading the latest public beta version of Trezor Suite, one can start using Tor with Bitcoin and other cryptocurrencies. Currently, The Tor switch is only available in the desktop app, located in the top-right of the Suite window.

Used by the likes of whistleblowers such as Julian Assange and Edward Snowden to evade espionage from the US governments and from journalists, security specialists, governments to individuals worldwide, Tor has helped protect human rights and individual freedoms.

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Author: AnTy

COVER Protocol to Update Tokenomics After Receiving Backlash from the Community

  • So, the new lease on life is not really working out well for SAFE.
  • The token price dropped nearly 170% in the past 24 hours to under $100, only to find its ground just above $150 today.
  • This severe drop in the token price has been the result of the latest update shared by the rebranded COVER protocol.

Over the weekend, Cover protocol, originally called SAFE, shared its tokenomics with the community that the maximum supply of COVER tokens will be 160,000. The token generation will start on Nov. 20.

While 1% will be vested to the treasury, 12% of the COVER supply will go to the team. But what the community is finding problematic is the “significantly diluted early supporters of the project.”

Out of the 87% COVER token supply allocated to its community members, only 12% goes to original SAFE token holders “who backed the project,” with 90 days vesting period.

70% of the new supply is to be earned through shield mining in a new yield farm that is to be launched in the following 12 months.

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“Early supporters of COVER ( SAFE holders, not farm and dumpers) are now diluted by 5.8x,” noted Jason Choi of crypto fund the Spartan Group. He added,

“Was hopeful that COVER Protocol could be a viable addition to DeFi insurance, but the team’s repeated reckless decisions suggests otherwise. Still Nexus Mutual’s market to lose.”

The COVER protocol aims to “allow anyone to buy coverage on anything.” It is basically insurance coverage on smart contract risk.

The crypto community had questions for all the prominent advisers of the project, including YFI’s Andre Cronje, FTX CEO Sam Bakman-Fried, @bluekirby — who was involved in the Eminence.Finance $15 Million rug pulling, NFT project Off Blue chaos, and YFI dump and has now disappeared after making millions — and others.

Around the mid of September, SAFE enjoyed a pump after its revival as the COVER protocol. More importantly, it was the names of these advisors that had the community excited about the project again following the initial setback of inexperienced developers and early dumping.

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To clear his name from the COVER debacle, Sam said he has “no idea” what’ is happening with the project and that he is “not involved in any of the decision making.”

In response to the heavy criticism, the COVER team shared its intention behind the new tokenomics was to “ensure users who participate in the product directly benefit the most” which they say will “benefit the product in the long-term.”

But they acknowledged that the proposed plan has neglected the existing supporters and “reached out to ALL our advisors” and is now working on a revised tokenomics plan that will be released shortly.

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Author: AnTy

Tron’s DeFi Push, JustSwap, Partners with Decentralized Exchange (DEX) 1inch & Mooniswap

The DeFi aggregator, 1inch Exchange, is working on integrating several blockchains. Today, they announced a partnership with Ethereum’s competitor Tron.

The DEX that offers swaps limit orders, and has an interface for finding the best liquidity pool where everyone can provide liquidity and earn on the APR, according to its founders Sergej Kunz and Anton Bukov, will also be working with NEAR blockchain and Polkadot as well.

As of now, 1inch will fully integrate with Tron’s decentralized trading protocol JustSwap and its automated market maker (AMM) Mooniswap will be integrated into Tron blockchain.

With this partnership, users will enjoy “faster, cheaper service, high-throughput scalability, huge developer community, and a massive social media following,” said Kunz, the CEO of 1inch.

While supporting Tron blockchain means best rates for Tron assets for 1inch users, Mooniswap’s addition will help improve Tron’s DeFi ecosystem.

Additionally, liquidity providers on the Tron blockchain will be prevented from arbitrage traders taking advantage of swap slippages, thus increasing LPs earnings.

Tron’s regular users will also “get an extra level of protection from front running attacks.”

In turn, Tron plans to reward the LPs on Mooniswap with TRX tokens as an “additional incentive and reward.”

Justin Sun’s stab at DeFi opportunity in the form of JustSwap has been reportedly seeing a daily volume of $100 million.

JUST token price meanwhile remains in the red at $0.0415, much like TRX, which bucked the trend and dropped despite the market enjoying gains, trading at $0.0328.

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Author: AnTy

FBI Prevents Ransomware Attack At Tesla’s Gigafactory; Hacker Sought $4M Bitcoin Payment

US-based electric carmaker Tesla working closely with the Federal Bureau of Investigations (FBI) has thwarted a planned ransomware attack that involved millions worth of Bitcoin payments.

According to a complaint that was filed by the FBI, the attackers were targeting Tesla’s Gigafactory situated in Nevada.

The FBI revealed that it arrested a 27-year-old Russian. Pavel Kriuchkov, who was residing in Los Angeles. he had lived almost a month in the United States looking to rope in as a Tesla employee for what he called a ‘special project.’

The FBI’s claim states that the ‘special project’ involved a lucrative incentive of a bribe amounting to $500,000, which was later upgraded to $1 million. An advance bribe was to be paid into the employee’s Bitcoin wallet that was installed via a Tor browser to avoid detection.

The Tesla employee was to help in the installation of malware into Tesla’s servers that were to be carried out in two stages consisting of a distributed denial-of-service attack as well as stealing of sensitive company data.

The attack was to involve holding Tesla to a ransom with threats of making vital private data and information public. The FBI states that Kriuchkov was eyeing a $4 million ransom from Tesla.

However, the Tesla employee who remains anonymous alerted the company’s management following the first meeting with Kriuchkov. It is at this juncture that Tesla informed the FBI about the hacking plot.

The FBI then went ahead to surveil a number of meetings in August between Kriuchov and the anonymous employees. This allowed the FBI to collect vital intelligence in regards to the hacking plot against Tesla and other related cyberattacks by Kriuchov and his accomplices.

The conspirator was planning to deposit a $1 million to the Russian-speaking anonymous Tesla employee’s Bitcoin account. Kruichov revealed to the staffer that the money would be deposited in a few days but was to leave the country on August 22. However, the hacker was arrested by the FBI on August 22.

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Author: Joseph Kibe

Binance Helped Ukraine Police Catch Cybercriminals Laundering $42 Million in Crypto

Working together, Binance and the Ukrainian authorities captured the criminal gang that ran a ransomware campaign and laundered $42 million in cryptocurrencies over the last two years. The exchange revealed this security project just yesterday. Still, it had been in the works given it collaborated with Ukraine’s authorities back in November 2019, has signed an MoU with the country’s ministry of Digital Transformation.

According to the Binance revelation, these malicious actors who leveraged its ecosystem to commit crimes both locally and internationally were arrested in June. Upon their arrest, Ukraine’s cyber police found $200,000 worth of ammunition, assault rifles, cash, and computer equipment. The suspects are now facing charges and could face up to 8 years in custody if found guilty.

Binance detailed that it used the ‘Bulletproof Exchanger’ tact to clamp down on suspicious transactions. This initiative basically allows the exchange to run extensive due diligence on transactions between Binance wallets and high-risk players. In this case, they include other crypto exchanges whose KYC/AML protocols are more relaxed or operate in jurisdictions with minimal or no enforcement when it comes to crypto activity.

Notably, Binance’s Sentry division, which is tasked with detecting high-risk transactions, collaborated with analytics firm TRM Labs. The two entities further worked in liaison with the Ukrainian cyber police, as highlighted earlier, leading to the apprehension of suspected individuals.

Change in Tact Towards Oversight by Crypto Exchanges

This is not the first time Binance is assisting authorities to identify rogue actors, the exchange reportedly handles a couple of law enforcement requests globally. In fact, Binance had earlier on helped U.K. authorities in the investigation of an online fraud that led to the loss of $51 million. Looking back, the tone towards authorities appears to be changing to a positive one over time. The exchange highlighted that this change infact is necessary to uphold the crypto industry reputation,

“For the health and sustainability of the entire industry, it is important to identify and help bring to justice those who abuse cryptocurrency and negatively affect the industry and its reputation.”

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Author: Edwin Munyui