The price of Bitcoin (BTC) slumped to $10,500 in the first week of October and has recovered above $11,000 surging by nearly 6.5% since Oct. 2. Crypto traders believe $10,500 remains the most critical level for Bitcoin for numerous reasons in both the ongoing cycle and previous price cycles.
SBI Holdings is planning to run its own security token offerings (STO) allotting shares of SBI e-Sports, tokenizing assets like real estate and fine art in the future. The upcoming STO scheduled to conduct on Oct. 30 using ibet, a blockchain platform developed by digital security startup Boostry.
The Bank for International Settlements (BIS), in collaboration with a group of seven central banks, published its first joint report into central bank digital currencies on Oct. 9, focusing on the foundational principles and core features of CBDCs. The Bank of Japan also released a document outlining its own specific approach to CBDCs from a Japan-centric perspective.
Square Inc. announced the acquisition of 4,709 Bitcoin (BTC) worth $50 million, represents approximately 1% of total assets as of the end of the second quarter of 2020.
#Bitcoin (aka “crypto”) is direct activism against an unverifiable and exclusionary financial system which negatively affects so much of our society. Important to at *least* acknowledge and connect the related societal issues your customers face daily. This leaves people behind: https://t.co/0LMlF1qcmG
— jack (@jack) September 30, 2020
Revolution Populi has released layer one of a blockchain solution that beliefs could be used as a decentralized clearinghouse for crypto and traditional financial transactions.
Cashaa is planning to expand banking services by launching a crypto-friendly neobank — or internet bank — in India, allow Indian businesses and individuals to open a savings account and buy, store and save cryptocurrencies.
Aida Karabaeva, an official representative of the National Bank of the Kyrgyz Republic, announced a temporary suspension of cross-border transactions on the SWIFT financial network in Kyrgyzstan to prevent capital outflow amid widespread unrest over the country’s disputed parliamentary elections.
For the first time since 2016, the Bollinger Band width of Bitcoin (BTC) dropped below 0.95, showing that Bitcoin’s price might see a spike in volatility similar to 2016’s post-having cycle.
ShareRing has partnered with Viator, allow users to book, register, and pay for Viator’s 395,000 global activities and experiences, using local fiat currencies or major crypto assets, including Bitcoin (BTC), Ether (ETH), and its native SharePay token (SHRP).
According to Cole Garner, there is a 2,800 BTC sell wall on Binance, worth $30 million with Bitcoin (BTC) price currently trading at $10,700. BTC likely faces a low-volatility range between $10,500 and $11,000 in the short term.
The United Kingdom’s Financial Conduct Authority (FCA) published the final rules to ban cryptocurrency derivatives products offering such as futures, options and exchange-traded notes, or ETNs, to retail customers.
Blockstream CEO Adam Back predicts $1 trillion Bitcoin（BTC）market cap by 2025.
— Adam Back (@adam3us) October 5, 2020
Xfers announced on Monday the official launched of XSGD stablecoin as part of Xfers’ StraitsX initiative, one of the first Singapore dollar-denominated tokens, giving Singaporean businesses and individuals a way to transact with crypto backed by SGD. XSGD is launched on the Zilliqa and Ethereum blockchains.
There is growing speculation that 150,000 Bitcoin (BTC) from the Mt. Gox trustee could move on Oct. 15. But many factors suggest that is highly unlikely given past records.
KuCoin CEO Johnny Lyu tweeted on Oct. 3 that the exchange now has substantial proof that identifies who hacked the service on Sept. 26, and have now officially involved police in the investigation. #Blockchain #Hackers #Cybersecurity #DEX #KuCoin
A quick update since my last livestream on Sep 30.
After a thorough investigation, we have found the suspects of the 9.26 #KuCoin Security Incident with substantial proof at hand. Law enforcement officials and police are officially involved to take action.
— lyu_johnny (@lyu_johnny) October 3, 2020
Dash (DASH) should not be considered as privacy-focused cryptographic currency.
“No, Dash is a payments cryptocurrency, with a strong focus on usability, which includes speed, cost, ease of use, and user protection through optional privacy.” – Fernando Gutierrez, CMO for the Dash Core Group
HODLers control up to 63.3% of the total BTC supply. Researchers from the Glassnode team demonstrate that the trend towards long-term storage of bitcoin continues to dominate.
The Eurosystem Task Force, which included experts from the European Central Bank (ECB) and 19 national central banks in the euro area, reported that the increased demand for electronic payments in the eurozone may require the introduction of European risk-free digital payment methods.
“Technology and innovation are changing the way we consume, work and relate to each other,” says Fabio Panetta, member of the ECB’s executive board and chair of the task force. “A digital euro would support Europe’s drive towards continued innovation. It would also contribute to its financial sovereignty and strengthen the international role of the euro, ” – Fabio Panetta, ECB board member and chairman of the working group
The Santiment team recently announced that the Ethereum (ETH) network activity has expanded rapidly recently with more than 13.2% over the past two weeks, largely driven by a surge in decentralized finance (DeFi) transactions.
The number of addresses interacting with the #Ethereum network has risen from a daily average of 338,375 from Sep 1-16, to 389,947 in the past 12 days. During this recent stretch of days, network growth for $ETH is up +13.2%! 🤝📈 https://t.co/umW5TeD0B3 pic.twitter.com/eOP6bLOhDf
— Santiment (@santimentfeed) September 30, 2020
The Bitcoin (BTC) price dropped to as low as $10,374 across major exchanges as the Dow Jones Industrial Average (DJIA) sharply dropped 358 points in pre-market trading, but a larger pullback is unlikely.
Aleksandr Lebedev is backing new decentralized finance (DeFi) startup project named InDeFinEco (Independent Decentralized Finance Ecosystem), aims to compete across a broad spectrum of financial products, as reported by Russian financial publication RBC.
Venezuela’s National Securities Superintendency has announced a 90-day pilot trial for a crypto-powered Decentralized Stock Exchange supporting “alternative digital assets” and fiat currencies in the country that aims to have a global reach despite international sanctions, as published in the country’s official gazette, issue 6,578, Sept. 29.
IoTeX partnered with Tenvis to launch Ucam, the first blockchain-powered privacy-protecting home security camera that gives users the freedom to exclusively own, control and share all the videos captured. Ucam is now for sale on Amazon.
Mass production of Ucam is now complete — mass adoption is next. 🌎
— IoTeX (@iotex_io) September 8, 2020
The United States Commodity Futures Trading Commission （CFTC）filed a civil enforcement action in the Southern District of New York to charge BitMEX owners with operating an unregistered cryptocurrency derivatives trading platform and violating Anti-Money Laundering regulations.
New data from Flipside Crypto shows that one month after SushiSwap’s vampire mining attack actually made Uniswap stronger by bringing new money into its liquidity pools. After forking from Uniswap, SushiSwap created an incentive structure for users to switch to their protocol by issuing SUSHI tokens as rewards.
Australian Securities Exchange will delay the launching of the planned DLT-based system to replace its blockchain-based CHESS due to huge trading volumes happen earlier March, looking to triple the capacity.
China’s Blockchain Services Network (BSN) will launch cross-chain interoperability on its testnets by the end of October, will integrate Poly Enterprise and Irisnet’s Inter-Realm Industry Trust Alliance (IRITA) framework to build decentralized applications (dapps).
Ant Bank and Ping An OneConnect Bank launched virtual banks in Hong Kong following Livi Bank, WeLab Bank, ZA Bank, Airstar Bank, and Mox Bank.
Crypto Finance Conference to host industry experts in-person in January 2021. The world’s most relevant digital asset and blockchain conference for sophisticated investors and decision-makers. #cfcstmoritz
Chainalysis and Integra FEC win $625,000 IRS contracts to track transactions on privacy tokens Monero and layer-two protocols.
The president of Venezuela, Nicolas Maduro, says that the Venezuela government is now studying the possibility of using various cryptocurrencies in both domestic and foreign trade as a potential way to overcome the impact of United States sanctions.
A 36-year-old Indian man named Nishad, from Malappuram district of the south Indian state of Kerala has arrested due to operating a cryptocurrency fraud via ‘Morris Coin’ scheme. Nishad has been charged under the Prize Chits and Money Circulation Schemes (Banning) Act by the district police chief U Abdul Karim.
DeFi’s pitfalls burn hackers and degens alike
This week highlighted a few key limitations of the DeFi space as it exists today. One of them is quite obvious — piling on unaudited, and even unreleased contracts.
This was the case for Eminence, an upcoming project by Andre Cronje, the founder of Yearn Finance. Over the European night of Sept. 28, the project managed to get discovered, get $15 million in funds locked and then get hacked for $15 million.
Some $8 million of those wound up in the Cronje-controlled deployer wallet, and he promised to return that money. The contract is part of Cronje’s “I test in prod” adage, as they were deployed to mainnet at least three weeks before the planned release.
It’s hard to really blame Cronje here, though this event highlights why testnets exist. The DeFi space seems to have gotten addicted to crazy yields and unaudited contracts being largely successful despite all odds. The hack is an important reminder of why putting money in these hastily developed projects is an extremely risky move.
There’s another hack that is bound to be much more consequential for DeFi though.
Is DeFi really decentralized?
The KuCoin hack was the big news of this week as more than $200 million was stolen on Sept. 26. This one hack surprisingly puts all DeFi breaches to shame, as they rarely amounted to more than a few million dollars and the funds were often returned in full.
The hacker was not so kind this time, but the crypto space still found a few tricks to mitigate the losses from this hack.
Overall, some $130 million in funds were frozen or hard forked as projects cooperated with KuCoin to mitigate its losses.
Among these are the centralized stablecoin providers, notably Tether. Over $33 million was hastily frozen by the company, so now the hacker can’t move that money.
This is definitely not a criticism of Tether — it was the right move and it was wholly expected. If some people still don’t know it, this is a great reminder: Tether maintains control over the tokens at all times. They can arbitrarily freeze any wallet, and frequently use this tool in response to law enforcement requests. Many centralized stablecoins have this ability, including USDC, PAX, GUSD and TUSD.
Of course, while it’s great to mitigate hacks, this feature runs counter to the very foundation of Bitcoin and crypto in general — you, and only you are in control of your funds. It’s what makes crypto truly decentralized and resistant to regulatory capture.
You’ll pardon my surprise then when I saw a few DeFi projects, namely Ampleforth and Akropolis, freeze tokens in a very similar manner to USDT. Ampleforth went to great lengths to do so, quickly deploying a new contract that would let them freeze the hacker’s tokens. BZX also used the freezing feature during its earlier hack.
The fact that they have admin keys is well known, but still. DeFi is likely triggering more than a few curious looks from the SEC, but the traditional defence is that these protocols can neither be controlled nor stopped by a specific entity.
Disregarding for a bit the questionable strength of this argument, if a company openly shows that it has control over the DeFi protocol, it really becomes just another fintech startup, which could be bound by stringent regulations.
Whether these regulations are useful or worthwhile can be a touchy subject, but it’s obvious that regulators will want to enforce their rules when possible. Many DeFi projects are ultimately U.S-based, which is an important thing to consider.
A deeper dive into “impermanent” loss
An interesting paper published by a French economics professor and researcher, Alexis Direr. He provided a fairly in-depth but accessible review of Uniswap, and by extension other decentralized exchanges like Balancer, Curve etc.
Liquidity providers on Uniswap will be keenly aware of impermanent loss — a money transfer from LPs to arbitrage traders arising from fundamental properties of these exchanges. It was termed “impermanent” because it derives from price changes of one asset against the other. If these changes revert, the losses do too.
I’ve always been bugged by a fairly simple question: if the impermanent loss is arbitrageurs extracting value from LPs, how can they suddenly return to an even position if they’re being exploited both one way and the other?
Direr answered that question quite elegantly. In reality, Uniswap LPs would make a trading profit from these fluctuations. Arbitrage traders “steal” that profit, making the losses quite permanent in any scenario. It’s just that in the optimistic case it becomes missed gain instead of an outright loss.
The proper name is now “divergence loss” which seems quite a bit less misleading.
Non-Ethereum DeFi takes some of the spotlights
NEO, one of the earliest “Ethereum-killers” that had kind of disappeared off the map lately, returned with a vengeance by launching Flamingo. It’s kind of a mish-mash of every major DeFi category on Ethereum, including lending, stablecoin creation, DEXs, perpetual futures etc.
It attracted over $1.6 billion in total value locked, which definitely looks impressive considering that it does not have Ponzi pools. It is also not a literal clone of Ethereum projects, which is something another “Ethereum-killer” likes to do. Another project on Ontology also collected more than $180 million in TVL.
Expect that we’ll see more and more competition outside Ethereum. The space is crowded though, and for now, it’s too soon to make predictions on winners.