MakerDAO Votes to Buy $1B+ in Gov't Bonds

ALSO: Tether hits all-time high, CFTC rethinks crypto risk and more |

June 2, 2023 The biggest crypto news and ideas of the day  Were you forwarded this newsletter? Sign up here. Don't want this newsletter? Unsubscribe Supported By Welcome to The Node! This is Daniel Kuhn, here to take you through the latest in crypto news and why it matters.    In the news: MakerDAO may buy an additional $1 billion U.S. government debt. The CFTC is rethinking crypto as it rethinks its risk management standards. And Tether's market cap hit an all-time high of $83.2 billion.   The takeaway: Problems with Apple's new banking service shows where U.S. anti-money laundering standards went wrong, CoinDesk Chief Insights Columnist David Z. Morris writes. By the way, CoinDesk just turned 10. Read about it and what we've learned from a decade of crypto history in Consensus Magazine this week. Learn more DeFi Decisions MakerDAO, the community organization governing the eponymous protocol, voted on Thursday in favor of purchasing an additional $1.28 billion in U.S. government bonds as the DeFi giant looks to diversify the assets backing its $5 billion dai (DAI) stablecoin through alternative yield-generating strategies. There was unanimous support for "Project Andromeda," a plan to open a new treasury vault managed by crypto asset manager Blocktower Capital – a surprise to some given Maker's expansion into "real-world assets" (RWA) has sparked debate. Asset manager Monetalis Clysdale oversees a separate vault holding ~$1 billion in government and corporate bonds for Maker. Meanwhile, DeFi protocol Synthetix approved a plan to hasten the shutdown of its "v1" perpetuals market "in the least intrusive manner" as customers shift to the upgraded Version 2. Elsewhere, a proposal to add fees on Uniswap affecting liquidity providers was voted down Thursday. Finally, new research found at least $54 million was stolen through DeFi scams and hacks in May. That is down more than 50% from the $101.5 million lost in April, security firm De.Fi claims. Demand and Risk The U.S. Commodity Futures Trading Commission (CFTC) included crypto in a list of "technological innovations" that potentially pose challenges for financial firms as the agency works on overhauling its risk management standards. "Integration of digital assets with banks and brokers, and the risks that could be posed, could continue to evolve," Commissioner Christy Goldsmith Romero said, calling out crypto custody in particular for posing risks. The CFTC is inviting public comments on its proposal. Elsewhere, Coinbase Derivatives Exchange will offer bitcoin (BTC) and ether (ETH) futures for institutional clients starting June 5. Coinbase said Thursday it created these products to cater to increased institutional demand following the launch of BTC and ETH derivatives last year. Finally, crypto exchange Huobi expects to receive its Hong Kong trading license within a year, advisor Justin Sun said. The exchange recently moved its headquarters from Singapore to Hong Kong after the city published a regulatory framework, which some suspect could turn it into a virtual asset "hub." Scaling Crypto The market capitalization of USDT, the U.S. dollar-denominated stablecoin, has set an all-time high of $83.2 billion. This follows a gangbuster first quarter for Tether that set the firm on track to erase losses incurred following the implosion of blockchain project Terra more than a year ago. Elsewhere, Taurus, a DeFi-focused service provider that raised $65 million in a round led by Credit Suisse and Deutsche Bank, expanded onto Polygon. Last but not least, a 24-year-old self-taught Bitcoin developer has proposed a new Bitcoin "layer 2" called Ark to address a supposed problem with the Lightning Network. To receive funds on Lightning, users must first "fund a channel," effectively meaning you need to pledge money to be able to receive money, a process Burak Keceli (who pranked Lightning last year) said "simply should not exist." Ark started as a Lightning wallet and expanded its offerings – though it still requires users to run Bitcoin and Lightning nodes.   Introducing CandyBomb - the sweetest new airdrop platform that's been exclusively launched by Bitget, the world's largest crypto copy trading platform!   Participating is a piece of cake, even if you're a beginner. All you need to do is complete a few simple tasks and earn tickets to win fantastic token airdrops! You can even trade and refer friends to CandyBomb to share in the bounty of 60,000 BGB!   So why not join us at CandyBomb today and satisfy your sweet tooth while you earn some crypto rewards?   Join to share 60,000 BGB! The Takeaway: Apple Meets AML   Users of Apple's new Apple Savings service, launched in April in partnership with Goldman Sachs, are reporting severe delays in withdrawing or moving their deposits. Customers have struggled for weeks to retrieve amounts as high as $100,000 stranded in Apple Savings accounts, according to the Wall Street Journal.   The explanation for the delays is reasonable – at least, by the bizarre standards of the traditional finance system. In most cases the frozen funds were under "security review" – that is, Goldman is making sure its depositors aren't engaged in criminal money laundering.   The absurdity of this is layered and nuanced, like a souffle of clumsy, anti-customer banking practices. One trigger for such a bank security review, you see, is making a large deposit into a new account. But Apple has been heavily marketing the above-average interest rate on its savings service (4.15%), so it shouldn't be a surprise people are depositing large amounts – which is also kind of what normal people do with a savings account already? And the savings service was only launched a few weeks ago, so all of the accounts are new.   In other words, if you followed Apple's marketing cues and opened a big new savings account managed by Goldman, the default assumption baked into the system appears to be that you are a money launderer whose funds must be frozen immediately and indefinitely.   This becomes even more of a dystopian nightmare when you look at the specific people targeted by Goldman's hamfisted anti-money laundering effort.    One victim who spoke to the Journal was Antonio Sanchez, a Grammy-winning musician who has collaborated with Dave Matthews and Trent Reznor. This is a person who a quick Google search and phone call could easily have determined is unlikely to be a money launderer. But instead Sanchez, like the other customers profiled, wound up fighting through a Kafkaesque customer service maze for weeks, trying to pry loose a frozen $100,000 intended for a down payment on a house – a true nightmare scenario.   And if you're not a Grammy winner? Well, that's certainly not going to improve how you're treated.   Goldman Sachs is not a retail-focused bank, and has struggled acutely with its efforts to serve smaller depositors. But the incident also tracks a larger shift in traditional banking away from any kind of meaningful customer service, towards an increasingly automated, disinterested and even hostile approach to its piddling retail depositors.   What makes this anti-customer bias truly toxic, though, is that it's combined with an utterly opaque anti-money laundering regime that seems to have uncontested effective control over every bank deposit in the United States. Make one wrong move – something that looks even vaguely suspicious to a mute algorithm or an underpaid data analyst – and suddenly your property is "under review," until they say otherwise.    That suspicious activity apparently now includes "opening a bank account" and "depositing money in it."   So ask yourself this. When your bank doesn't care who you are, and has the power to freeze your funds any time, without explanation, for an indefinite period … is that money really yours at all?   – David Z. Morris @davidzmorris david.morris@coindesk.com Yieldflow is Driving Web3 Adoption by Making It Easy to Earn Passive Income Safely.   Since the collapse of large crypto projects like FTX and BlockFi, investors have been cautious about parking their funds with centralized exchanges, which, some believe, are susceptible to collapse in ways that might leave their customers empty-handed.   To access services like staking rewards, centralized exchanges often require customers to "lock up" their tokens in accounts that can't be accessed for a period of time, or might be used by an exchange for other purposes. So when panic strikes or there's a bank run, as in the case of FTX, customer funds can be lost altogether. With the collapse of these firms, investors learned that when their funds are delegated to a third party, it no longer fully belongs to them. As the expression goes, "not your keys, not your crypto."  Continue Reading   *This is sponsored content by Yieldflow Off-Chain Signals  Plaintiffs in Dogecoin Lawsuit Against Musk Make Wild New Allegations – Blockworks Cosmos Boards the DeFi Train with Native USDC Support – Blockworks Kenya's central bank shares thoughts on CBDCs, find them wanting – webpage Memecoin Fever Drove Record Number Of Traders To Uniswap In May – The Defiant Avalanche hits 1 million monthly active users for the first time  – The Block OpenAI exec's Twitter account hacked to steal crypto – Protos Crypto token MULTI crashes as Multichain confirms CEO missing – Protos Europe's right-wing political groups find cause in crypto – Cointelegraph Demox Labs raises $4.5M, readies private crypto wallet – Axios Binance loses market share after regulatory clampdown – FT (paywalled) Permanent Record The Node: A newsletter from CoinDesk Were you forwarded this newsletter? Sign up here.  Don't want this newsletter? 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Amazon in talks for Prime wireless plans / Meta threatens to block news content in CA / Twitter head of trust and safety resigns

Plus: VW reveals electric version of iconic Microbus for North America

Inside Tech For June 02, 2023

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1 Amazon is reportedly exploring the idea of offering affordable or free mobile phone service to its Prime subscribers in the U.S. Talks are underway with Verizon, T-Mobile, Dish Network, and AT&T, as reported by Bloomberg, though T-Mobile and Amazon have denied the report. More: Amazon aims to provide wireless plans for $10 per month or less to its members, sources told Bloomberg. The company could become a reseller or MVNO, allowing it to set its own pricing structure. Earlier reports suggested that Dish was considering offering wireless plans through Amazon. Following the news, AT&T, Verizon, and T-Mobile saw a 4% or greater decrease in morning trading, while Amazon's stock rose by around 2%. An Amazon spokesperson said the company is constantly exploring new benefits for Prime members but has no current plans for wireless services. Zoom out: Amazon's possible entry into mobile phone services could boost loyalty among its Prime members as it faces increased competition from Walmart+. Likewise, the move could address an apparent slowdown in Prime subscriptions. Consumer Intelligence Research Partners estimates that Prime had 168 million subscribers at the end of 2022, down from 170 million the year before, which is the first time ever that the service didn't see annual growth.

2 The news: Apple's App Store facilitated an estimated $1.1 trillion in developer billings and sales in 2022, up 29% from the year before, according to an Apple-sponsored study conducted by Analysis Group. The figures include money from in-app advertising, apps and subscriptions, and physical goods and services, with the latter covering mobile commerce like retail, ride-hailing, and travel, along with digital payments conducted through the App Store. What the numbers say: The study emphasizes that more than 90% of billings and sales went to developers alone, with Apple not taking a commission of 15% to 30%. Of the $1.1 trillion total, in-app advertising contributed $109B, digital goods and services accounted for $104B, and $910B came from sales of physical goods and services. Since the App Store launched in 2008, iOS developers have also earned a total of $320B, up from the previously reported $260B in 2021. Apple also highlighted that small developers saw 71% earnings growth between 2020 and 2022, surpassing larger app developers. Quotable: "As this report shows, the App Store is a vibrant, innovative marketplace where opportunity thrives," Chief Executive Officer Tim Cook said in a statement. Why it matters: While the study downplays the notable high costs of doing business on the platform, it does break down the data of Apple's ecosystem and shows the continued growth of the App Store. The figures have grown significantly since the marketplace facilitated $519B in commerce in 2019, with $61B coming from digital goods and services. The study emphasizes the popular and expanding app categories, specifically noting a significant rise in travel sales (84%) and ride-hailing apps (45%).

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3 Meta says it may remove news content from Facebook and Instagram in California if the state passes a bill that would force tech companies to pay a fee for news. The company made a similar threat over U.S. federal legislation attempted last year and is now blocking some news content in Canada as part of a test over a similar proposal. More: California's Journalism Preservation Act would require digital companies to pay a journalism usage fee to news publishers, with 70% of the profits dedicated to journalism jobs in the state. While the bill aims to support the struggling local news industry, a Meta claims that it benefits out-of-state media companies instead of California publishers. A spokesperson, Andy Stone, argued that publishers voluntarily share their content on their platforms, and the consolidation in California's local news industry predates Facebook's widespread use. California State Assemblymember Buffy Wicks, the bill's sponsor, dismissed Meta's threat as a scare tactic that has failed in other countries. Related: In 2021, Australia passed a similar law that resulted in a brief shutdown of Facebook's news feeds in the country. Eventually, agreements were reached after amendments were made to the legislation. A government report later confirmed the law's effectiveness. On Thursday, Meta announced plans to test blocking news content for a small percentage of users in Canada in response to the proposed Online News Act, which is similar to California's proposed legislation.

4 Twitter's head of trust and safety, Ella Irwin, has stepped down, leaving the platform without a content moderation executive, Reuters reports. After Elon Musk acquired the platform, Irwin assumed the position, replacing Yoel Roth who resigned in November. More: Irwin declined to comment on her departure. According to the WSJ, she has publicly defended the company's content-moderation actions since Musk took over. In April, she tweeted that employees had been "working hard to develop a balanced approach to free speech and keeping people safe from ongoing, repeated harassment." Under Musk's leadership, the company has drastically reduced costs, resulting in the layoffs of thousands of employees including those working on content moderation. Musk recently appointed Linda Yaccarino, former NBCUniversal advertising chief, to replace him as Twitter's CEO. Zoom out: Twitter recently pulled out of a voluntary agreement with the European Union aimed at combating disinformation. However, the platform said it's committed to adhering to forthcoming internet regulations in the EU.

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5 According to investment firm Morgan Stanley, Apple's highly anticipated AR/VR headset is set to go into mass production in October and release to consumers by December. Apple is expected to reveal the headset at its WWDC event on Monday. More: Availability of the headset is anticipated before the holiday season, according to Erik Woodring, an Apple analyst at Morgan Stanley. Woodring added that Apple's supply chain aims to manufacture a conservative 300,000 to 500,000 units this year. Confirming previous rumors, he said the headset's starting price could be around $3,000. Woodring expects the gross margins will be low, with Apple initially having limited profitability from the device. Zoom out: At WWDC, Apple could offer tools for developers to start building apps for the headset, which will have its own dedicated App Store.

6 Volkswagen revealed the North American version of its electric van, the ID. Buzz. The retro-style van, a modern version of the iconic Microbus, is expected to arrive in the U.S. in June 2024. The exact EPA range hasn't been disclosed yet. More: The ID. Buzz pays homage to the Volkswagen T1, known as the Microbus or VW Bus, which was popularized by the hippie movement in the 1960s and 1970s. The new model for the North American market has three rows of seats for more passenger and cargo space while maintaining the Microbus' retro-futuristic design. The base version will be rear-wheel-drive with an electric motor capable of 282 horsepower. An all-wheel-drive variant with around 330 horsepower will also be available VW hasn't disclosed the pricing yet. In the U.K., the closest comparable model, the two-row Buzz Style, is priced at £63,715 ($79,240) including tax. Source: Volkswagen

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Knowledge Hub Term of the Day Vesting: Vesting is the process of granting employees the right to keep employee-provided benefits, such as stock options, after a specified period of time. Read More Question of the Week Should companies take steps to avoid employee burnout, or should it be the individual's responsibility to manage it themselves? Join the conversation

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Beth Duckett AI and technology writer Beth is a writer and editor at Inside.com covering artificial intelligence and daily technology news. She has written the Inside AI newsletter since 2019. You can reach her at Beth.Duckett@inside.com. This newsletter was edited by Eduardo Garcia

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