4 September

“In a Wednesday letter addressed to the U.S. President Donald Trump and federal officials, lawmakers said blockchain technology can help identify and authenticate individuals set to receive government benefits, streamline supply chains and create a registry of medical professionals.

The letter makes a case for a blockchain-based identification system, to securely store and authenticate an individual’s identity ‘to receive necessary funding or supplies.'”

See Also: Bank of England Governor Wants Global Regulations as Stablecoins Pick Up Steam

“We eventually realized we were converging in the way we saw the law and technology actually being allies and not opposed to one another. Vitalik has been willing to work with me so that we can build a legal system that works for blockchain communities, and eventually, increases the common good.

It is very exciting. Studies show we detect between 10 and 15% of illegal transactions. Blockchain could help in fixing that by creating technical decentralization, which seems to be the philosophy of the Department of Justice right now.

As the crypto and blockchain industry typically feels misunderstood by those in the U.S. Government, the idea that attorneys at the Department of Justice are making the connection to the potential with blockchain technology is encouraging and forward-thinking – something the blockchain industry should celebrate.”

Aave announced yesterday that it’s working with RealT, a company devoted to the tokenization of real estate, to let people stake their tokenized real estate as collateral to take out loans.

So, if you want to pay for a bag of chips, you could stake your RealT tokens—which represent your equity in a house—as collateral on a loan for the dollar you need. Then, when your next paycheck comes in, you can repay that dollar and retrieve your equity in the house.

The next step is that when someone wants to buy a house, the house is tokenized and someone can give a loan directly to that buyer.”

RIPCORD Blockchains: distinguishing blockchain value from blockchain bullshit

“The community is crediting the yearn.finance project, which launched a new yield farming strategy that relies on minting DAI to farm the Curve token, CRV. The yETH vault, which executes this strategy, quickly rose in popularity and created 10% of DAI’s current circulating supply.

The price of DAI consistently hovered around $1.02 in the past 30 days. As of press time, the price came down to $1.”

See Also: Researchers identify 10 security flaws with SushiSwap

“At its current market cap, Bitcoin has a money supply worth more than 170 different fiat currencies. The USD, EUR, CNY, JPY, and INR are the only world currencies with a larger money supply than Bitcoin.

The M0 figure represents the total value of all the banknotes, coins, and other money substitutes that can be easily converted into cash.”

“There could be an overlap between equity sellers and digital currency sellers. The largest equity market decliners this morning are tech stocks, including retail trading darlings, Tesla and the FAANG names [Facebook, Amazon, Apple, Netflix and Alphabet, once Google].

It is unclear if this will push into a continued broader crash in equity markets, which could put more pressure on digital currencies, or if it is just a short-term correction.”

“In a bid to ameliorate soaring fees, Ethereum co-founder Vitalik Buterin released his Ethereum Improvement Proposal (EIP) 2929 Tuesday that proposes making certain heavy contracts more expensive by a factor of three.

For now, individual developers need to incorporate their own individual scaling solutions. Tether, for example, announced its intention to explore zk-rollups for settling tether (USDT) transactions on the Ethereum blockchain Tuesday.

I think the pain is now big enough to push the people to move quicker with L2 (layer 2) solutions.

Opium, a derivatives exchange, has introduced credit default swaps (CDS) for USDT. The product, launched Thursday, insures the buyer in the event of default by Tether.

Investors don’t need to hold USDT to purchase this coverage. They can use CDS to bet against the asset, while those who trust Tether to honor its obligations can earn a premium for standing ready to cover defaults.

You can use it to protect yourself against (or speculate on) a systemic failure of the most widely used stablecoin in crypto. It also allows you to earn interest on your capital in case you are willing to bet on the quality and sustainability of USDT,

Belyakov said Opium’s CDS can act as a hedge for crypto exchanges that have large exposures to Tether’s solvency. The derivative also functions as insurance for “long-tail risks” of rare events that are common to decentralized finance (DeFi) applications and should soon be available for stablecoins USDC, BUSD and even algorithmic stablecoin dai (DAI).

In late August, Opium Exchange rolled out a contract that insures the buyer against defaults on “credit delegation” loans, a form of unsecured borrowing on decentralized money market Aave.”

“The scenario emerged as a result of the burgeoning popularity of Yearn.finance’s yETH vault which has already amassed more than 137,000 ETH on its first day.

The malicious actor “could attack once”, but would be quickly slashed or soft-forked and lose control over the coins needed to maintain the attack.

This is an underrated key fundamental advantage of PoS over PoW.”

“From next February, citizens and companies based in Zug will be able to pay up to 100,000 CHF (around $109,000) of their taxes in either bitcoin (BTC) or ether (ETH).

For the initiative, authorities have partnered with the Zug-based crypto broker and custodian Bitcoin Suisse, which will convert cryptocurrency payments into Swiss francs and hand them over to the tax office.”

“This “Global Value Chain” (GVC) passport would allow firms already following their host country’s financial rulebook to tout their credentials elsewhere, easing trade and increasing financial access globally.

Blockchain technology would provide the GVC Passport a distributed, trusted, real-time source for global regulators to verify business’ accreditation claims.

The result: a more efficient financial system with firms cut free from repetitive, redundant, cross-border regulatory burdens.”

See Also: US Air Force and Raytheon Are Studying How Distributed Ledgers Could Help Command the Skies
See Also: Blockchain voting hailed a success at Michigan Democrat convention

“The Electronic Frontier Foundation (EFF) argued that the U.S.-based cryptocurrency exchange should begin releasing regular transparency reports.

These should detail the number of government and law enforcement requests for information Coinbase receives and how it goes about dealing with those requests.

Unlike Coinbase, Kraken, a rival U.S.-based crypto exchange, received high praise for its apparently transparent behavior around requests for information.”

3 September

The amount that Ethereum miners bring in from transaction fees on a daily basis skyrocketed on September 1, reaching $16.5 million. Daily Ethereum transaction fees hovered between roughly $140,000 in January and $2 million on August 8.

In comparison, Bitcoin miners generated $1.5 million in fees yesterday – only 9% of Ethereum miners.

“yETH brings ETH, MakerDAO and Curve together. It’s the smart contract equivalent of “set it and forget it.”

Users will deposit ETH on Yearn, which will in turn deposit it in MakerDAO in order to borrow dai (DAI). The DAI will then be deposited in CRV in order to withdraw its liquidity provider (LP) tokens and earn CRV tokens, both of which can then be plugged into whatever the optimal place to farm them might be.

You are earning a lot of money on your ETH without losing exposure to your ETH.

Notably, the writer of the yETH smart contract will earn a small portion of all profits on it. The idea here is that it gives developers an incentive to write strategies for the project.”

“Research published by cryptocurrency data firm Messari today shows that more than half a billion dollars worth of Bitcoin, or 0.3% of its total supply, has been sent to Ethereum this year. The reason? This summer’s indomitable rise of decentralized finance, or DeFi.

With only 0.3% of all bitcoin on Ethereum and DeFi booming, the opportunity for decentralized bridges between the two chains is hard to ignore.”

See Also: Bitcoin Share of Crypto Market Cap at Lowest Point in Year

“There’s a new DeFi project called Hotdog. There’s also Kimchi, Noodle, and Harvest, and they all sprang up in the past day or two. But what’s more impressive is this: Some claim to offer annual yields in the seven figures. That’s 1,000,000%. Yes: Million. Percent. Yield.

Here’s what’s actually going on.

Developers simply copy the code of those who came before it, creating websites that look identical. They mint tokens and attach a catchy name and emoji to it.

They create a market for the token on Uniswap. By controlling the supply of ETH relative to the token, they’re also able to set an inflated price for a highly illiquid token. The flashy numbers will draw in more buyers. That’s how the early farmers, and very likely the creators of the project themselves, will be able to cash out and make a juicy profit.

It’s a bit like musical chairs. The latecomers that were providing liquidity for that specific token will lose money when the early farmers start cashing out.

Still, let’s not forget there’s innovation at the heart of this craze. Worthless projects and tokens will come and go, but the space will gain a valuable new way of raising funds and rallying communities.

Yield farming is highly risky, but the core idea of incentivizing specific behavior is insanely powerful.”

See Also: New DeFi Protocol, Kimchi, Locks in $500M in Hours
See Also: SushiSwap’s founder emphasizes that the $27M they hold is for devshare

After integrating with OMG Network, stablecoin issuer Tether is now planning to add support for another Layer-2 scaling solution — ZK-Rollups.

The idea behind ZK-Rollups is aggregating multiple operations into one single L1 [Layer1] transaction that ‘compresses’ all the underlying transactions.”

See Also: ZK-Rollups & Optimistic Rollups Compete to Scale DeFi Smart Contracts

“The Vienna Stock Exchange, or Wiener Börse, has become just the third “official regulated market” worldwide to list a Bitcoin (BTC) product. Wiener Börse’s listings mean that the Bitcoin ETPs are now available to all three ‘DACH’ nations — Germany, Austria, and Switzerland.

In another boost to the institutional adoption of cryptocurrency, Singapore Exchange (SGX) announced it would list price indexes for Bitcoin and Ethereum.”

See Also: Swiss crypto bank Sygnum scores approval for digital asset trading
See Also: CFTC Greenlights LedgerX Request to Move Beyond Digital Currency Products

“The police action was apparently linked to a $25 million token sale hosted on Bithumb and a proposed acquisition by a Singapore platform, BTHMB, that never materialized.

Some investors said they lost millions participating in the sale.
Bithumb’s chairman, Lee Jung-hoon, has been accused of fraud and illicitly sending funds overseas.

See Also: Cryptocurrency Markets Crash as Coinbase, Binance Suffer Issues

“The Bitcoin ABC development team yesterday released a new version of its latest, controversial upgrade. It would result in eight percent of mining rewards being used for infrastructure development, sent to an account owned by the Bitcoin ABC team.

An overwhelming amount of the BCH community doesn’t support the ABC development team’s proposals. The upgrade [is set] to take place on November 15.

Diverting part of the Bitcoin Cash block reward to pay a single development team is a Soviet style central planner’s dream come true.”

2 September

Recommended read.

“The common-denominating theme since the launch of yield farming and liquidity mining is this: fair launches.

In the world of Ethereum, there has been a long-standing assumption that rent-seeking protocol fees will generally trend towards 0, or at least as low as possible because any protocol that introduces a fee also introduces the incentive to fork it, and offer the same product/service but without the fee.

Swap out ‘fee’ with ‘early VC investment’, and you get the current state of DeFi. Now, for every VC-backed protocol with a high percentage of tokens held by teams and investors, there is an opportunity to fork the code, introduce some yield-farming incentives, and redeploy the same product/service under new management.

The incentives for this are so dumbfoundingly simple, that it’s a pretty safe bet to expect that every single DeFi app will have a ‘fair-launch’ carbon-copy spin-off.

We’ve just invented a new way to allow retail to gain the same level of access as VCs! With Ethereum, not only can you be your own bank, but you can be your own VC. That’s game-changing.

Case in point:

“A liquidity war is brewing between Uniswap and a fork of DeFi’s darling DEX, called SushiSwap. In less than a week, SushiSwap has aggregated more than $800M worth of tokens, or about 80% of total Uniswap assets.

This isn’t just another liquidity-pool based DEX that’s popped up to compete with Uniswap: SushiSwap is coming to directly take Uniswap’s liquidity.

APYs on these pools currently range from about 500% to over 2,000% for the highest yielding option, the UMA-ETH pool. SushiSwap’s plan to bootstrap its native AMM by sucking Uniswap’s liquidity is aptly called “Vampire Mining.

Popular anon accounts have signaled their support for a “community-owned AMM LP protocol,” versus VC funded projects, like Uniswap which raised $13M from giants including a16z and USV.

SushiSwap is an experiment in protocol governance to see if the community is ready to lead themselves.

See Also: Uniswap Rises to Top of DeFi Charts Thanks to Rival Looking to Unseat It

“As of Tuesday, average and median transaction fees have skyrocketed to record highs of $10.33 and $5.68, respectively.

Steep network fees are a double-edged sword. ‘They can ward off potential users, but rising fees also signify an increase in network utilization and demand for block space.’

As transaction fees continue to increase, this is causing DeFi to ‘slowly become a game reserved for the wealthy.’ Entities responsible for large on-chain transaction volume are searching for techniques to reduce pressure on the network.

Zk-rollups are at the moment the most comprehensive L2 solution for the Ethereum scalability problem.”

See Also: Ethereum Miners Earn $500,000 in Just One Hour
See Also: Decentralized Exchange Volume Rose 160% in August to $11.6B, Setting Third Straight Record

“Analysts predict that the imminent launch of yETH by Yearn Finance could trigger a renewed surge in buying pressure on the ETH markets. The product will automatically find the highest yielding decentralized finance (DeFi) protocol/strategy for Ether (ETH) deposits.

This adds to a long list of catalysts for Ethereum, but it also reduces the available supply.

YFI currently ranks as the 27th-largest crypto asset and is trading for nearly $34,000.”

See Also: Yearn.Finance’s New Vault Leverages DeFi ‘Triforce’: ETH, MakerDAO and Curve
See Also: UMA overtakes Yearn.Finance as the biggest ‘DeFi’ protocol on Ethereum
See Also: Vitalik Buterin compares DeFi tokenomics to the Fed’s money printer

Investors may be entering the crypto market via ether and decentralized finance protocols rather than bitcoin, which served as a gateway to crypto markets during the 2017 bull run.

On-chain metrics suggest ether’s price rally has legs. The options market, too, is biased bullish on ether with the one-, three- and six-month put-call skews hovering below zero.”

Acting Comptroller of Currency Brian Brooks is spearheading the move that would empower payment firms to operate across state lines with a single set of consolidated rules.

The charter would simultaneously enable such firms to expand their financial service offerings and avoid having to apply for licencing in each state individually.

Brooks told Politico the OCC would be ready by Tuesday to begin processing applications for the charters, which could potentially include companies like Paypal and Coinbase.

The news has sparked outrage among traditional banks, credit unions and elsewhere.”

“Pornhub is a year older than Bitcoin, having been founded in 2007 in Montreal, Canada. Currently, it stands as the world’s ninth most popular website with 3 billion monthly visitors.

As a leader in adult content with over 130 million visitors per day, Pornhub is excited to now offer two widely-used and leading digital currencies for our users.”

Maker (MKR) holders have voted to prioritize adding Gemini USD, Binance USD, and several other tokens as collateral assets to the Maker DAO protocol so those tokens can be used to generate DAI stablecoins.

Community members also gave thumbs-ups to TrueGBP, TrueAUD, TrueCAD, Ren, Huobi Global BTC, UniswapV2 USDC-ETH Liquidity Token, New Silver DROP, and Harbor Trade Credit DROP.

Just because an asset has passed a greenlight does not necessarily indicate it will become a collateral type in the Maker Protocol. First, it has to go through a “thorough review by the [elected] Domain Teams in areas such as risk, oracles, and smart contracts to ensure the protocol can handle them in a secure manner.”

“Armstrong told O’Shaughnessy his product will streamline clients’ token launches from custody to smart contract creation to governance to distribution. It will ‘hand hold people through the process.’

Armstrong projected it could power ‘a thousand new startups.'”

See Also: BitMEX Launches Mobile Trading App in 140 Countries
See Also: Binance Launches Smart Contract-Enabled Blockchain, Adds Staking for Its Coin

The popular privacy coin might not be so private anymore, as CipherTrace claims to have developed tools to trace it. CipherTrace claims that its tools will allow investigators to search, explore, and visualize Monero transactions.

Furthermore, CipherTrace plans on adding further functionality to the current version of the toolset, with features such as ‘entity transactions clustering, wallet identification, [and] exchange attribution‘ planned for the future.”

“According to CCB’s Terms, a DC/EP hardware wallet is a physical medium that is activated upon users’ request at a bank’s counter or a digital channel for carrying DC/EP. With the addition of a hardware wallet, users could keep custody of larger sums of their digital yuan off-line without relying on a third-party mobile app.

There is one key difference, however. The DC/EP hardware wallets can be traceable and would strip off the anonymity feature of paper cash as users would need personal information such as IDs and phone numbers to activate the wallet in the first place.

The Terms indicated China’s DC/EP wallets could be offered in the future in a four-tier system, which would potentially put a cap on how much users can spend their digital yuan. Under the Terms, for instance, a user could only maintain a balance of up to 10,000 ($1,500) yuan in a tier-2 DC/EP wallet.”

See Also: Government of Bermuda Pilots Stimulus Token in Response to COVID-19 Crisis

“Researchers at ZenGo have properly disclosed a vulnerability discovered in the Diogenes protocol proof. The proof is designed to provide the raw entropy for a Verifiable Delay Function (VDF) for the Ethereum 2.0 random beacon chain.

Ligero Inc., the team behind Diogenes, is redrafting the proof of the protocol to iterate away the vulnerability.

VDFs are necessary for building a truly secure random beacon chain. The vulnerability is part of an ongoing security audit of the protocol commissioned by the Ethereum Foundation and the VDF Alliance.

The ‘quality of the bug attests to the high quality of the project and the amount of scrutiny that is put into testing this protocol,’ and Eth 2.0’s burgeoning tech stack appears to be ‘highly resilient.‘”

“The complaint, a class action for those who invested in the Tezos ICO, alleged defendants violated U.S. securities law by hosting an unregistered sale.

The plaintiff’s attorneys will take more than $8.5 million, a third of the total settlement, in fees and expenses. The remaining $16.5 million will be divided among those who invested in the Tezos ICO and had a monetary loss.

Those who gained from their investment, through selling at a profit or staking (dubbed “baking”) their XTZ tokens will not be able to claim damages.”

1 September

“If you want to build over Ethereum today, and are held up by scale and rising gas prices, if you want to build a real business that requires a production-grade toolchain with high feature velocity, do reach out to us.

The Great Reddit Scaling Bake-off was a significant milestone for us at StarkWare. Not so much because of what we achieved — 300,000 transactions in a single STARK proof — but rather because of how we achieved it. The Reddit Bake-off was the first time we deployed Cairo, our production-grade Turing-complete¹ platform for producing STARK proofs for general computation, to Ethereum Mainnet.

Cairo is the first production-grade proof system implementing a Turing Complete von Neumann Architecture: each Cairo program P resides in the virtual machine’s memory, alongside the data D processed by it.”

“The Acala team wants to build a DeFi powerhouse for the Polkadot ecosystem with a host of financial primitives. Its first product is a cross-chain-capable, multi-collateralized, and decentralized stablecoin Acala Dollar (aUSD). Acala has also shipped a testnet lending protocol and a decentralized exchange.

Su said the team had considered using the Cosmos Network, another cross-blockchain protocol, but ruled it out given a lack of security guarantees that make bootstrapping a DeFi product harder.

With approximately 14,500 new accounts, 142,000 transactions, and $52 million total value locked during a 3-week testnet campaign, Acala is likely the most prominent and active parachain on Polkadot.

We hope to deploy smart contracts and Link oracles on Acala in the near future.”

See Also: Aave’s path to decentralization hopes to attract institutional investors

“Secret Network announced its intention to add privacy-based secret contracts to its mainnet on September 15. Secret contracts could enable many different blockchains to utilize private data in decentralized apps without compromising their user’s personal security.

Secret contracts allow for programmable privacy, allowing for arbitrarily complex data privacy controls to be implemented inside applications.”

Joseph Lubin on JPMorgan’s Quorum (Good Interview)

“Binance Card, a newly launched cryptocurrency debit card powered by Binance and the Binance-owned crypto commerce company Swipe, could soon enter the United States.

USD checking accounts will be enabled on the platform through a partnership with Evolve Bank & Trust — a banking institution operating in the United States. The new feature is expected to be available ‘in [the] next few weeks.‘”

“The Bank of Korea (BoK) is now seeking a consulting partnership to bring the second phase of its CBDC plan to fruition. A pilot is planned for late 2021.

The successful local company would assist the central bank in building the architecture for the CBDC, which is being prepared in the face of China’s drive to be the first major nation to launch a digital version of its fiat currency.”

“CoinMarketCap CEO Carylyne Chan has left the company today. Both Spencer Yang, vice president of operations, growth and revenue, and Jeremy Seow, vice president of product, have also left the company within the last two weeks.

The departures come just a few months after the company was acquired by crypto exchange Binance. It saw controversy after a major change was made on the site that pushed Binance to the top of its rankings.”

“The question centered around whether crypto earned by an individual for performing a microtask through a crowdsourcing or similar platform was a taxable income.

Yes, the convertible virtual currency received is taxable as ordinary income.”

“At a high level, Torus splits and distributes sensitive data needed to construct a user’s private key between the user and nodes on the Torus network, which includes Binance, Ethereum Name Service (ENS), Etherscan, Matic Network, Ontology, Skale, Tendermint Core and Zilliqa.

Similar to other 2FA systems, as long as the user has access to two out of three of their secret shares, they will be able to retrieve their private keys and login.

Our goal is to make key management convenient to the mainstream user – my parents, for example – to be able to use crypto, while still retaining the level of security and non-custodiality which is needed for decentralized applications.”

“Bitcoin (BTC) sidechain RSK will soon be equipped with Chainlink (LINK) oracles, enabling developers on the smart contract-enabled blockchain to tap into market price feeds and other off-chain data to build their applications. It is currently live on testnet and expected to be launched on mainnet in less than a month.

RSK is a Bitcoin sidechain that uses a pegged version of BTC as its native currency. The peg process is facilitated by a federation that maintains custody, similar to solutions adopted by WBTC or Liquid.”