CEO of DeFi YFI Token Fork, Asuka, Exit Scams 2 Days After Launching; Binance To Investigate

Over the past few months, the crypto world has taken off with a helping hand from the DeFi market. The yield farming craze has seen blockchains like Compound, Balancer, etc. take off in a massive way, as investors chase the crazy annual yields these DeFi platforms offer. However, a report from Korea points to a DeFi exit scam conducted by a well-known person in the Korean crypto community – Jongchan Jang.

Jongchan Jang, CEO of Asuka token, a Yearn Finance (YFI)-fork token, is said to have exit scammed the project just two days after launch, on August 3. This was revealed by Korean media outlets. Jang also shut down the project’s website and social pages, causing the price of the ASUKA token to collapse from $1600 early on Monday GMT to about $18 per token at 1 PM GMT.

According to the Asuka.Finance website (now closed), the ASUKA token, once dubbed the Dogecoin of DeFi, has a limited supply and distribution like YFI, with only about 21,000 tokens ever to be produced. More details on the token reveal that the “YFI clone” aimed at ‘farming’ nearly half of the tokens.

To stake Asuka tokens, users had to buy the Maker stablecoin – DAI – and place the tokens in a Balancer liquidity pool. Once in the pool, the deposit earns a certain “BPT” token, which is then farmed (staked back) into the protocol. Almost 10 billion Won was staked in the liquidity pool fund, but Jang could not access this amount as he burned the key to the pool.

Binance set to Trace Jang

According to some sources, the DAI exit scam was made clear to Binance leaders, and now the exchange is looking into the matter to freeze these accounts. In a statement released to one of the crypto news outlets, Binance stated,

“We have identified the relevant account(s). Binance will assist Korean law enforcement in their investigation once we receive a request from them. As always, we will continue to strive for heightened security both on our platform and for the greater crypto space.”

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Author: Lujan Odera

World Bank Releases Research On The Impact Of Smart Contracts For Financial Inclusion

The World Bank released its report on smart contracts and the impact it’ll have on the development of financial systems across the globe. A brief report on the working paper, titled ‘Smart Contract Technology and Financial Inclusion,’ states the research focused on digital financial inclusion in leveraging communities that suffer from access to formal financial services.

Smart contracts is a self-executing agreement coded on blockchain technology. Over the years, smart contracts have been lauded for their potential to reduce the cumbersome contract processes involved across the financial industry by allowing trustless transactions and reducing the costs involved.

According to the research, smart contracts can be utilized by micro, small, and medium businesses to drive the inclusion of consumers in particular financial services such as index-linked insurance and supply chain finance.

However, the authors write that the smart contract technology impact may be bound to some challenges in other areas of finance, such as short term unsecured credit.

Read More: World Bank: The Potential of Blockchain In Bid For Financial Inclusion

Limited Scope for Smart Contracts

As mentioned above, the research found out that smart contracts’ impact on digital financial inclusion may have a more significant effect on some areas than others. One of the regions bound to benefit from smart contract integration is index-linked insurance, such as weather linked insurance.

Smart contracts enhance the overall trust, transparency, and product suitability on the insurance, but there remain some issues unfixable by integrating smart contracts, the authors conclude.

Alternatively, the issue of integrating smart contracts on the unsecured loans market may turn out to be less impactful than the retail insurance market. Smart contract integration could help “yield efficiency gains across various phases of a loan lifecycle,” the paper writes, but the application and approval of unsecured credit are “already highly automated.”

A Closer Focus on Blockchains

Governments and financial authorities across several states are closely monitoring the impact of smart contracts in a digital financial system despite the slow adoption of the technology. To this end, the research recommends regulators take a closer look at the impact of smart contracts in accommodating financial consumer protection, KYC/AML compliance, and legal foundation requirements.

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Author: Lujan Odera

Total Value Locked On DeFi Platforms Soars Past $2 Billion; Compound Overtakes Maker by $67M

The decentralized finance (DeFi), also popular as open finance, world is growing to unseen proportions with the total value locked (TVL) on DeFi apps setting an unprecedented $2 billion mark on Tuesday. The top DeFi platform leads the charge, Compound, which has seen explosive adoption since launching its governance token, COMP, in mid-June, which led to a “yield farming craze.”

A DeFi craze cashing in

Total Value Locked On DeFi Platforms Soars Past $2 Billion As Compound Emerges Top App!
Source: DeFiPulse

Those yet to understand the magnitude of DeFi’s growth would do well to check the TVL charts provided by DeFi Pulse. The first billion locked in DeFi took close to 30 months to build up as decentralized exchanges tried to build up the industry’s values. In less than a month, the DeFi space has gained its second billion with the introduction of ‘yield farming’ playing an important role.

The committed value in DeFi protocols exponentially grew from approximately $50 million locked at the start of January 2018, reaching a peak of $1.275 billion in mid-February this year. However, the March 12th crash heavily affected the field, wiping off 56% of the value locked.

In mid-June, the launch of Compound (COMP) and Balancer (BAL) governance tokens re-sparked the DeFi craze, rising from $1.031 billion on June 16th to a current value of $2.022 billion in TVL.

[Read more: Techemy Capital plans to launch Compound (COMP) investment portfolio for yield farmers]

Compound leads DeFi resurgence.

It seems “yield farming” is the cause of the recent resurgence of the DeFi market, Compound leading the charge. Currently, the platform has the highest TVL, dominating 32.82% of the total value locked on DeFi platforms.

Using technical strategies on the borrowing and lending of digital assets on Compound, users earn higher yields, which has seen crypto enthusiasts dive into the market in huge numbers. In light of borrowing and lending, users are able to gain COMP tokens, which experienced a huge demand once launched.

Maker, a lending platform that prints DAI, is second on the log with a total locked value of $594 million; Synthetix, Balancer, and Aave close out the top five with $321 million, $157.8 million and $157.1 million locked respectively.

A burgeoning DeFi market cap

While the TVL shows the appetite for DeFi products in the market, the metric lacks to account for some areas such as the volumes transacted on decentralized exchanges (DEXes), transaction volumes across DeFi, etc.

The market, however, shows signals of surpassing the $10 billion dollar mark, with DeFi Market Cap, a data aggregator for the top 100 DeFi tokens, showing the total market cap of these tokens is at $7.4 billion.

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Author: Lujan Odera

Binance’s BNB Gets A Branded Twitter Emoji As the Exchange Celebrates Turning 3

The largest crypto exchange in the world in terms of trading volume, Binance, becomes the third crypto-based firm to get a branded emoji on Twitter. Binance joins Bitcoin (BTC) and (CRO), which also have branded emojis.

Anybody that tweets using the hashtag: #BNB or #Binance will get to see the signature Binance logo. Binance CEO revealed the new branded emoji by tweeting #BNB to his over 500k followers on Twitter. CZ, as he is usually referred to, was thrilled by the new emoji saying that he could just sit there and randomly start retweeting other people using the new emoji.

Branded Twitter hashtags are a lesser-known form of advertisement service offered by Twitter to renowned brands. However, Binance did not reveal the amount it paid for the emoji. Although billion-dollar brands such as Pepsi, Anheuser-Busch, and IBM have, in the past, paid about $1 million to get branded emojis, the amount for crypto-based firms is believed to be much lesser. Larry Cermak, a researcher, working for TheBlock, recently revealed that a company that uses about $50,000 in Twitter ads qualifies to get a branded emoji.

The Twitter emoji comes just days before Binance prepares to celebrate its third anniversary, on July 14. The emoji speculated to be part of the anniversary celebrations. The firm has since started a new hashtag dubbed #BinanceTurns3 that also comes with an emoji.

As part of the celebrations, the firm is giving out Binance non-fungible tokens (NFT). To receive the tokens, one must follow the exchange on all of the social media platforms as well as share various content using the anniversary hashtag. The campaign is set to run until July 7. The Binance team believes that the emoji will help in creating a bigger and more visual buzz that will also lead to more mass adoption of the Binance Coin (BNB).

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Author: Joseph Kibe

WEF to Tackle Corruption In Public Procurement Across Colombia Using Ethereum’s Blockchain

  • The World Economic Forum (WEF) is launching a proof-of-concept (PoC) blockchain, based on the Ethereum blockchain, to reduce corruption across governments’ public procurement deals.
  • The “Transparency Project” will first be tested in Colombia to distribute the tenders for PAE public school meals program.

Global public procurement consists of over ten trillion dollars in expenditure but close to 10-30 percent of this money is swallowed up by corruption; something the WEF seeks to solve. The process offer tenders have switched from manual systems to a digital system to increase accountability, but certain loopholes still exist in the chain.

The close relationship between governments and private sectors with vast resources involved raises the incentives for corruption to take place. Moreover, the digital systems also increase the level of corruption due to low transparency levels, a highly bureaucratized system, and no reporting platform, all of which encourage acts of fraud.

Colombian Government Adopts Blockchain to Fight Corruption

An insight report compiled by the Inter-American Development Bank (IDB) and WEF, the Office of the Inspector General of Colombia, agreed to test the Transparency Project. The PoC aims at improving government contracting processes starting with the public meals program worth billions of dollars in Colombia.

The adoption of a public and permissionless Ethereum blockchain platform provides transparency, immutability, and direct access to records of the government procurement contracts reducing the cases of corruption. Additionally, the system decentralizes the processes involved in vendor bidding and bid evaluation phases of procurement. Ashley Lannquist, the WEF’s project lead for blockchain and digital currency said,

“I think the strongest value proposition is that you could have high confidence that no records are being deleted, no vendor bids are being denied.

This came out as a key value-add and, of course, it comes the most from permissionless blockchains like Ethereum.”

A Work in Progress

Public blockchains features of data permanence and censorship resistance qualities make a case for the integration of these systems in procurement. However, the platform is far from perfect as questions of data privacy and scalability on public blockchains arise. How does this affect the Colombian government’s PoC integration?

According to Colombian law, the process of procurement must be anonymous to avoid collusion by suppliers or unfair selection of tenders. As such public blockchains, which are pseudonymous, do not meet the cut of total anonymity.

In a bid to solve this issue, WEF and the Colombian IG are looking into the possibility of launching hybrid blockchains, employing the anonymity of a permissioned blockchain, but keeping the permissionless features alive. Lannquist said,

“We thought of the pairing of public Ethereum with Hyperledger Fabric, for instance.”

“Some transactions happen on either one or the other, and you do want public [Ethereum] for the permanent record keeping.”

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Author: Lujan Odera

Six Blockchain Startups Selected On World Economic Forum’s (WEF) 2020 Tech Pioneers List

The World Economic Forum (WEF) has announced the list of technology pioneers, and among them were six blockchain-based startups. The announcement was made earlier today through the official WEF Twitter account.

The six firms consist of:

  • MakerDAO
  • Chainlink
  • Veridum Labs
  • Lightning Labs
  • Ripio
  • Elliptic

The WEF Technology Pioneers of 2020 list brings together 100 startups from across the globe, which are set to introduce or pioneer new technologies as well as innovations in different sectors, including Artificial Technology (AI), Robotics, Internet of Things (IoT) and Machine Learning.

The listing of technology pioneers by WEF started in 2000, where outstanding tech pioneers are acknowledged and recognized. The startups are incorporated in various WEF initiatives as well as events to shed more light and insights into various critical world discussions.

According to WEF, the six blockchain-based startups will be incorporated into the organization’s initiatives, events, and activities for two years to bring their fresh thinking in various global discussions.

The six blockchain startups will also become members of the WEF’s Global Innovators Community, which is an invite-only group bringing together the globe’s most promising startups.

The six startups will also be part of WEF Strategic Intelligence ecosystem that assists industry leaders as well as policy and decision-makers to navigate different transformations in various industries, economies as well as global issues. In other words, the six startups will be taken as experts to help in making important decisions by global leaders and decision-makers.

Blockchain-based startups have been recognized previously with Bitfury, which offers blockchain solutions, making it to the list last year. In 2015, Ripple made it to the list.

The recognition is essential as it helps the startups to access a wide range of expert insights as well as the market. The startups can exchange notes with other firms from across the globe. The listing will also give the six blockchain startups the much-needed exposure to potential clients.

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Author: Joseph Kibe

Buy Bitcoin, Buy Everything: Federal Reserve’s Current Monetary Madness to Continue

Stock market indices around the world have tumbled after a pessimistic outlook for economic growth was shared by Federal Reserve Jerome Powell, suggesting it would be a long time before the central bank would be able to pull out support for the economy. The statement said,

“The ongoing public health crisis will weigh heavily on economic activity, employment, and inflation in the near term, and poses considerable risks to the economic outlook over the medium term.”

The Fed also projected an economic contraction of 6.5% in 2020, the election year, after months of coronavirus-induced lockdowns, and unemployment rate to be 9.3% at year’s end. But the Fed has promised to support the economy on its “long road” to recovery.

The central bank also sees GDP rebounding 5% in 2021 and a further 25% in 2022.

The Fed further suggested that interest rates would remain near zero throughout 2022 and that they are not even “thinking about thinking about raising rates.” This, according to Deutsche Bank analysts led by Jim Reid, is a “strong signal” that the Fed believes the effects of the crisis will be lasting.

Markets’ Reaction

Despite the COVID-19 crisis, the S&P 500 is almost at the level it reached the beginning of the year. The US stocks initially pushed up by the announcement and so did the US dollar and Bitcoin but the bullish move didn’t last.

Meanwhile, gold has managed to keep the gains and is trading at $1,732 an ounce.

“The Fed met expectations, but at the same time it’s brought the focus back on the economy,” said Moh Siong Sim, FX analyst at the Bank of Singapore.

The 10-year Treasury note plunged to 0.6984% and on 30-year bond, the yield fell to 1.4634% after Fed policymakers voted unanimously to hold the federal funds’ target rate at 0%-0.25% for next two years.

On this note, crypto enthusiasts suggested buying bitcoin. “Buy everything. Seriously. Everything but Ripple,” said trader and economist Alex Kruger.

More Stimulus Coming

The Fed’s dovish tone is suggesting the stimulus will keep on coming. Given the way the market is performing lately, this will only further widen the gap between Main Street and Wall Street.

“The takeaway is the Fed remains fully committed to its ultra easy monetary polices,” said NAB’s Catril which “should be supportive for risk assets.”

Policymakers stepping in to support COVID-19 ravaged market through trillions of dollars in stimulus was “unlike any response that we’ve ever seen before, and so this is not your garden-variety recession,” said legendary hedge fund manager Paul Tudor Jones who recently put a small percentage of his firm’s assets in Bitcoin. He said, as such,

“Our citizenry has more cash now than they had going into what will be the shortest recession in the history of the United States.”

According to him, inflation will be impossible to check because the economy is already heavy with debt. The US national debt has already hit $26 trillion, adding $2 trillion in just the last two months.

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Author: AnTy

Despite the Selloff, Bitcoin Generated Far ‘Superior Returns’ than Traditional Assets During COVID-19

In March, as COVID-19 spread throughout the world, every asset, be it US equities, bitcoin, gold, or bonds, they all accelerated declines. Initially, bitcoin experienced significant losses but only to stage a strong rally of 155%.

Just like bitcoin recovered its losses, gold initially declined as investors fled to cash only to rebound and reclaim its safe-haven status.

Source: TradeBlock

Now, if we compare the performance of three investment portfolios, the one with 60% equity and 40% bonds, the second one comprising 55% equities, 45% bonds, and 10% gold; and the one with the same composition as the previous one but bitcoin replacing gold, the portfolio with the digital asset is the best choice.

With an investment of $1000, even a modest allocation to hard assets provided better returns, and in the case of bitcoin, it triumphed over the other two.

Source: TradeBlock

Moreover, a modest bitcoin allocation would also have generated greater risk-adjusted returns as measured by the Sharpie ratio found TradeBlock. Risk-adjusted returns analyze the attractiveness of returns based on the unit of risk undertaken to generate those returns.

As such, the Sharpe ratio of the three portfolios is calculated at 0.259, 0.276, and the one with the bitcoin having the highest one at 0.608. But still, bitcoin generated more returns than the other two portfolios during the coronavirus pandemic.

During this period, the US Federal Reserve expanded its balance sheet to a new high at over $7 trillion. Fed has been ramping up its asset purchasing programs since 2008 only to reduce it in 2017 but it accelerated dramatically in recent months to prevent the economic fallout triggered by the pandemic.

Meanwhile, the economic downturns saw several large money managers that have been staying away from digital currencies jumping into bitcoin. Just last month, Paul Tudor Jones announced that his firm’s BVI fund has a 1 to 2% allocation to bitcoin through the purchase of cash-settled futures contracts.

The motivation behind this was the implications of unprecedented bond-buying and fiscal spending by global central banks in recent months.

“As central banks ramp up asset purchasing efforts, ‘hard-money’ inflation hedges are seeing renewed interest.”

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Author: AnTy

Enjin Rolls Out Minecraft Plugin, EnjinCraft, to Drop Blockchain Assets into the Game

One of the most popular video games in the world, Minecraft, now has a plugin that lets its players spawn blockchain assets.

The plugin is called EnjinCraft, and has been built by Enjin, a well-known gaming startup. EnjinCraft is open-source and allows players to place blockchain assets in the Java Edition of Minecraft without the need for any code.

When it comes to how the tool works, users put the file ‘EnjinCraft’ into the players server folder for plugins, where the integration and distribution of blockchain assets as tokens can begin.

It’s Not the First Minecraft Plugin by Enjin

EnjinCraft is the second Enjin release for Minecraft. The first Minecraft plugin by Enjin was released in 2013 after a collaboration with Bukkit. It’s called DonationCraft and has reached 5.1 million downloads, as it allows Minecraft players to grow their servers through the creation of a donation store and server website.

With this new offering, server hosts can create localized Minecraft economies. Providing players with tangible ownership over currencies and in-game items. Furthermore, they can securely trade assets in the peer-to-peer (P2P) manner on the server, via chat rooms or in the Enjin Marketplace, which is a digital trading platform.

Enjin Also Released a Java SDK

Enjin has also released a Java open-source development kit (SDK) that allows developers the ability to implement the blockchain into Java-based web, mobile or desktop apps. Here’s what the company’s CTO and co-founder, Witek Radomski, had to say about what’s happening at Enjin at the moment:

“EnjinCraft is the beginning of a new era for sandbox games. Players now have a tangible stake in their gaming worlds, and server owners can create new kinds of addictive experiences by using branded collectibles and items with scarcity and value in the digital universe.”

Expansion into Asia

Back in February, Enjin introduced its development platform on Ethereum to allow developers the integration of their crypto assets into apps and games without any blockchain coding.

The startups gaming project became active this year. In April this year, Enjin said it’s going to open its crypto wallet in China, as it wants to expand into Asia and already asked for the China’s Ministry of Industry and Information Technology’s approval to do so.

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Author: Oana Ularu

Can RippleNet Cloud be a Game Changer for Post-COVID Banks and Financial Institutions?

The COVID-19 pandemic has undoubtedly increased the adoption of emerging technologies. Since the world was challenged by this virus, innovations by the FinTech community ranging from blockchain tech to cloud infrastructure have been accelerated. A company like Ripple, prominent for its blockchain built cross-border payment solutions, is now touting its cloud services as well, RippleNet Cloud.

As tech evolved, it became evident that existing on-premises infrastructure is in fact a huge cost in today’s business world. This is because of the underlying operations in staffing, maintenance, and migration to new systems. Therefore, cloud solutions are slowly taking over starting with tech giants like Microsoft and IBM who are among the largest service providers in this niche. However, financial institutions led by banks are still skeptical of moving their systems to cloud platforms given the sensitivity of clients’ data.

RippleNet Cloud

While cloud services may seem a concept of the future, their value proposition beats existing on-premises that are outdated, expensive to maintain, and inflexible. According to recent a publication on Ripple Insights, cloud services are now considered essential for the going concern of businesses post-COVID.

“Now, cloud-based technologies are considered essential to any business wishing to survive the pandemic—and keep up with rapidly changing consumer demands.”

Ripple’s cloud-based solution has since been hailed as a game-changer for banking ecosystems. Basically, the firm provides a platform for businesses to interact seamlessly on RippleNet via a common Ripple Payment Object (RPO). Compared to on-premises, clients on RippleNet can go live five weeks faster while cutting the costs attributed to staffing and hardware requisition.

In addition, RippleNet Cloud provides financial institutions the option to leverage on-demand liquidity for their settlements. Notably, clients also don’t have to stress with upgrades as they are handled with Ripple’s team. Given these underlying factors, RippleNet has attracted a number of prominent financial service providers including MoneyGram and India-based, Federal Bank.

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Author: Edwin Munyui