Blockchain Bites: DeFi's Dividend

Making sense of Kraken's bank, DEXs and Ethereum 2.0

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September 21, 2020 By Daniel Kuhn If you were forwarded this newsletter and would like to receive it, sign up here.  Top shelf China sees its digital yuan as a "new battlefield," DeFi's Curve has a new dividend program and a yet-to-launch platform is pursuing an "Initial DEX Offering." ‘New battlefield’ China’s central bank gave an inside look into its motivations for developing a digital currency (CBDC) for retail and governmental use. In a commentary published by China Finance, a local magazine, People’s Bank of China (PBOC) officials said its DCEP (digital currency electric payment) system is essential in weakening the dollar's role in international finance and could open a "new battlefield" between nations. The DCEP has been in development for six years – during which the government has filed 130 related patents – and is now in testing at banks and corporations in a number of regions.  DeFi dividend Curve, the third largest DeFi project by “total value locked,” has instituted a new dividend program for holders of its governance token, CRV. CoinDesk’s Brady Dale reports that trading fees on the platform now will be split between liquidity providers (LPs) and veCRV holders, a form of escrow token that users obtain by staking their CRV to the voting contract. Each trade on the platform incurs a 0.04% trading fee, which has totalled between $70,000 and $150,000 per day last week, based on daily volumes in the $400,000,000 range. “We’ll start moving towards a cashflow-based protocol because the numbers are too sweet to not do it,” Curve founder Michael Egorov told CoinDesk in an email. Crypto mining Three Iranian power plants will allow cryptocurrency miners to buy energy directly from their facilities, in a bid to create new revenue streams. A Thermal Power Plant Holding Company (TPPH), which owns and operates plants all across Iran, executive said, “the necessary equipment has been installed in three power plants of Ramin, Neka, and Shahid Montazeri, and the auction documents will be uploaded on the SetadIran.ir website in the near future.” Iran recognized crypto mining as a legitimate business activity in July 2019. An estimated 1,000 mining licenses were issued in the first six months under the new rules. IDO? APY.Finance, a yet-to-launch DeFi yield farming aggregator, has completed a $3.6M seed funding round joined by Arrington XRP Capital, Alameda Research, Cluster Capital and CoinGecko. The automated investment service will use the cash to develop and audit its platform, which will offer opportunities to earn yields across a variety of DeFi products in a “in a risk/reward optimized way,” according to its press release. APY.Finance said it’s targeting mid-October for a full-scale rollout of its platform, and has plans for a public sale of its governance token, APY, in what its calling an "Initial DEX Offering" this month.  How to Value Bitcoin: Addresses In the second episode of CoinDesk Research's webinar series on Bitcoin fundamentals, we unpack a novel accounting method used in Bitcoin and explore how entities are represented and transact on the network.  Philip Gradwell, chief economist at Chainalysis, and CoinDesk Research will walk through the structure of Bitcoin addresses and wallets, how exchanges operate and how ownership data and transaction data can be interpreted by investors.  Register to join our 30-minute webinar Sept. 22 at 10:30 a.m. ET on How to Value Bitcoin: On-Chain Transactions. Quick bites Did Ethereum Learn Anything From the $55M DAO Attack? (Daniel Kuhn/CoinDesk) Lyn Alden’s Latest: Why Currency Devaluation Is Inevitable(NLW/The Breakdown) How Does Kraken’s New Crypto Bank Work? (Adam Levine/CoinDesk) Bitcoin Blockchain Grows to 300 Gigabytes in Size (Liam Frost/Decrypt) DEXs rake in the retail volume while institutions stay on the sidelines (Frank Chaparro/The Block) At stake Suspicious circumstances Cryptocurrencies are often dismissed in the circles of traditional banking and finance for their associations with crime. Earlier this year, the New York Times’ crypto reporter, Nathaniel Popper, penned the article “Bitcoin Has Lost Steam. But Criminals Still Love It.” Implicit in the article: What else could unstoppable, non-state backed money be used for but crime?  Frequently absent from the discussion is the role that the dominant banking infrastructure plays in the world of crime. This weekend, Buzzfeed peaked behind the hood.  According to thousands of documents compiled by the Financial Crimes Enforcement Network (FinCEN), a U.S. watchdog, and seen by Buzzfeed, potentially trillions of dollars of dirty money are flowing through the world’s largest banks.  From 2011 and 2017, the banks’ internal compliance teams reported to FinCEN thousands of suspicious activity reports (SARs), or activity deemed out of the ordinary and potentially fraudulent. SARs are just the concerns of compliance officers and not necessarily evidence of fraud.  The files show Deutsche Bank flagged a total of $1.3 trillion, JPMorgan approximately $500 billion and Bank of America another $384 billion. BNY Mellon underlined a total of $64 billion in 325 separate SARs filed with FinCEN, making it the second-most-frequent filer in the leaked documents, CoinDesk reporter Paddy Baker wrote. Further, between 2012 and 2015, nine big banks paid approximately $20 billion in fines for money laundering, Bloomberg reported.   While at least one of the SARs related to the multi-billion dollar OneCoin crypto project, determined to be a pyramid scheme by investigators, the report is a reminder that banks, too, aid and abet criminal behavior.  Market intel Selling pressure Bitcoin is facing selling pressure Monday amid coronavirus-led risk aversion in the stock markets, CoinDesk’s Omkar Godbole reports. The cryptocurrency is trading near $10,650 at press time, down 2.9% on the day, having faced rejection near $11,000 earlier on Monday. This follows a decline in European stocks and U.S. stock futures amid news of worsening pandemic conditions across Europe. Bitcoin could suffer a bigger drop if the risk aversion worsens, triggering a dash for the U.S. dollar, as happened in March. Meanwhile, resistances are seen at $11,000 and $11,183 (Sept. 19 high). Op-ed Kraken open CoinDesk’s Director of Research Noelle Acheson thinks Kraken’s application to become the  U.S.’ first crypto bank is not a repudiation of its founding values, but an indication that the world is adapting to crypto. “The SPDI [Special Purpose Depositary Institution] is a new type of bank charter that was created with the crypto industry in mind. A new set of definitions and protections was drawn up to take into account crypto asset characteristics. A state passed financial legislation for the crypto industry,” she writes in the latest Crypto Long & Short newsletter. You can subscribe here. Internet 2030 Pooja Shah is the product lead for the Filecoin Project. The article excerpted below is a part of the Internet 2030 series, a look at the future of the internet and our digital lives.  Web 3.0 When Satoshi Nakamoto invented Bitcoin in 2009, we began to envision decentralized finance as an alternative to traditional banking. A little more than a decade later, we are starting to see that technologies behind Bitcoin can be used to create a fully reimagined internet – one that leverages our collective computing capacity, data and devices to become far more powerful and resilient than it is today.  To say the internet has created astounding pathways for opportunity and success is an understatement. It has democratized access to information, created boundless economic opportunities and connected people worlds apart. In 1990, fewer than 1% of the world’s population was online. Thirty years later, that number has jumped to 59% of the world’s ever-growing population. Even narrowly defined, the internet today contributed 10% of the U.S. economy. It is undoubtedly one of the most important technologies ever invented. In a few years, all companies will need to rethink their operating models to treat their users as crucial partners from the start. Proprietary platforms might start to become open-source protocols. Companies’ sustained competitive advantages will come from product and technological superiority but also from user loyalty and trust. To succeed, companies will need to move toward more open services with plentiful value capture opportunities for users along the way.  Instead of relying on trusted intermediaries to coordinate users, Web 3.0 systems use mechanisms such as cryptographic proofs and economic incentives to guarantee users that the system is working as expected. As a result, Web 3.0 networks are trustworthy, yet decentralized. And because these projects succeed only if their users cooperate, their creators have strong incentives to align with their users’ best interests.  Instead of extracting value from their users, Web 3.0 networks will capture value by creating opportunities for them. In this way, Web 3.0 protocols essentially turn the economic incentive structure of today’s internet on its head.  CoinDesk’s “Internet 2030” series examines the future of the medium and what role blockchain and crypto will play in it with content and conversations on the future of the decentralized web. If you are interested in submitting an op-ed for the series, please reach out directly to daniel@coindesk.com.  Podcast corner Investors expect With Ethereum 2.0’s much-anticipated move to Proof-of-Stake getting closer, CoinDesk Research Analyst Christine Kim spoke with Ethereum developer Danny Ryan and Liz Steininger, CEO of blockchain security company Least Authority on what users and investors should expect. Who won #CryptoTwitter? ATTENTION: Scammers have been sending fraudulent emails with links to sites disguised to look like coindesk.com. If you are in doubt about a link, type https://www.coindesk.com directly into your browser; do not copy and paste. Remember, if something seems too good to be true, it probably is. Blockchain Bites A newsletter from CoinDesk See previous editions Copyright © 2020 CoinDesk, All rights reserved.  Our mailing address is:  250 Park Avenue South New York, NY, 10003, US  Want to change how you receive these emails? You can update your preferences here.

Introducing Lisk Service

We are excited to announce the release of Lisk Service, a completely new product joining our ecosystem.

Hey there, We are excited to announce the release of Lisk Service. Lisk Service is a completely new product joining our ecosystem. It acts as a service layer between blockchain data and user interfaces by providing accessible and powerful API calls. We use it, amongst others, to provide Lisk Desktop with enriched data from the Lisk network, such as delegate or network statistics. Read the entire blog post here Lisk Service After completing the development process, we are happy to announce that a new product is joining the Lisk ecosystem - Lisk Service. Lisk Service is an essential part of the Lisk product line-up, as it offers the possibility to access and browse blockchain data, by providing accessible and powerful new API calls. Lisk Service acts as a service layer, meaning it is a proxy between blockchain data and user interfaces. Whilst the Lisk SDK is focused on providing a developer with important blockchain functionalities, such as a public key infrastructure or the consensus algorithm, Lisk Service comes into play when blockchain data has to be provided fast and efficient to user interfaces.  Lisk Service is fully written in JavaScript and runs on the Node.js V8 virtual machine. It's based on an extensible microservices architecture and combined with a high-performance database, which makes providing data in an uncomplicated manner effortless. Each microservice is focused on providing one particular functionality and data is always served in JSON format and exposed by a public RESTful API. Easily Accessible Blockchain Data Lisk Service can be used with any blockchain application built with the Lisk SDK and following the Lisk protocol. The key principle is to provide services and features that are complementary to the blockchain application. Internally, we use it to provide our user interfaces blockchain data, specifically all blockchain data persisting within Lisk Core to Lisk Desktop and Lisk Mobile. Lisk Service makes it possible to access real-time blockchain data in a similar approach to the regular Lisk Core API. However, to keep the Lisk SDK flexible and lean, we minimized it's API capabilities which are mirrored on Lisk Core. That's where Lisk Service comes into play by providing developers with much more powerful capabilities. Read more in our blog post.   Stay updated with Lisk:              Newsletter Settings Want to change how you receive these emails? You can update your preferences or unsubscribe from this list. Lisk Foundation ・ Dammstr. 16 ・ 6300 Zug・ Switzerland