The firm previously said its reserves would be in cash and treasuries.
On Thursday, USD Coin (USDC) operator Circle announced that it had selected financial institution BNY Mellon as the custodian of its USDC reserves. Founded in 1784, BNY Mellon is one of the oldest banks in America and possesses over $46.7 trillion in assets under custody or administration worldwide. It serves as a single point of contact for clients looking to manage their investments. With the new partnership, BNY Mellon said it will also explore the possibility of using digital cash for settlement purposes. Roman Regelman, CEO of asset servicing and head of digital at BNY Mellon, gave the following remarks:
"We are at a point in the evolution of our industry where the digitization of assets presents new and exciting opportunities to a broad range of market participants. As a custodian for USDC reserves, our role supports the broader marketplace and brings value to clients, founded on our role at the intersection of trust and innovation."
Meanwhile, Jeremy Allaire, co-founder and CEO at Circle, added:
"As we continue to see exponential growth in USDC, the opportunity to work with BNY Mellon is one way we build bridges between traditional financial services and emerging digital asset markets without sacrificing trust."
USDC is one of the fastest-growing dollar digital currencies globally with over $52 billion in circulation as of March 2022. As previously reported by Cointelegraph, the total supply of stablecoins hit $180 billion last month. The United States is one of the most regulatory-friendly countries regarding stablecoins, with Fed Governor Waller previously voicing skepticism as to the adoption of a central bank digital currency, saying that it would potentially stifle innovation in the private stablecoin sector.
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With so much drama in the LBC, it’s only right that we drop a dope NFT.
Recording artists Snoop Dogg and Billy Ray Cyrus have teamed up to release a new smash single, “A Hard Working Man.” The hip hop-country mashup, produced by the legendary Avila Brothers, will debut on April 2 during Grammy weekend in Las Vegas.
Cyrus’ 2019 hit remix of “Old Town Road” with rapper Lil Nas X made history by going 16x multi-platinum in the United States. Asked about his genre-bending approach to music, Cyrus replied, “My philosophy to making music is no limitations. No rules, no limits, no preconceived notions. Don’t try to think inside the box or outside the box, just think like there is no box.”
Adding to the excitement of the song’s debut, metaverse entertainment company Animal Concerts is hard at work (pun intended) developing a new 50,000-piece nonfungible token (NFT) drop to accompany the single. Cointelegraph is producing the artwork for this massive collection, which will be featured on Crypto.com NFT. The drop also features an exciting array of redeemables for music fans, from concert tickets and backstage passes to merch and free tickets to Animal Concerts’ “Meta-Concerts.”
Animal Concerts recently burst onto the scene with a host of high-profile live concerts featuring some of the hottest names in music, from Alicia Keys and Future to Meek Mill.
Bridging the NFT world, the metaverse and utility for the community, Cointelegraph and Animal Concerts will be expanding their collaboration beyond this drop. In the coming months, the two will be releasing other high-profile NFT collections, including with beloved celebrity dog Izzy the Frenchie and some of the biggest names in music.
Animal Concerts is reinventing the future of concerts. From interactive metaverse shows to immersive live events, Animal Concerts enables established and emerging artists to deliver amazing next-generation fan experiences. Stay up to date with all upcoming announcements, launches and Meta-Concerts by following Animal Concerts on its social platforms.
Cointelegraph is the world’s largest independent digital media outlet covering a wide range of news on blockchain technology, crypto assets and emerging technology trends. Since 2013, Cointelegraph has delivered the most accurate, up-to-date news from both the decentralized and centralized worlds.
Award-winning entertainer and icon Snoop Dogg has released 19 studio albums, sold over 40-million albums worldwide, reached No. 1 countless times on Billboard charts internationally, and received 20 Grammy nominations. In addition to his extensive work in music, Snoop Dogg has made his mark in the television and film space, with numerous partnership deals with major studios and networks, including TBS, Netflix, VH1 and more.
Billy Ray Cyrus is a critically and commercially acclaimed superstar who has established himself as a household name across multiple areas of the entertainment landscape, including music, television, theater and more. When one scopes out Cyrus’ trophy case, the awards are represented across all genres: Grammy Awards, Billboard Music Awards, BET Hip Hop Awards, MTV VMA Moonmen, Country Music Association Awards and American Music Awards, among many other accolades.
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Analysts are mostly bullish on BTC’s short term price action, even if a retest of the $45,000 level must happen first.
Bitcoin (BTC) saw an 11% gain in the past week after the $46,000 resistance finally broke after 82 days. Many crypto pundits argue that Terraform Labs CEO Do Kwon has played an important role in the price change, but is yet to be determined.
A Bitcoin address thought to belong to Terra has now amassed almost $1.5 billion in BTC following a $139 million purchase on March 29. TerraUSD (UST), an algorithmic stablecoin, aims to acquire up to $10 billion worth of BTC to back its "dollar" reserve.
On the macroeconomic side, there have been mixed feelings. The United Kingdom's Consumer Price Index increased by 6.2% year-on-year, which is above the 5.9% consensus. However, in the United States, the opposite effect occurred as durable goods orders showed a 2.2% decrease.
The current reading is the highest U.S. inflation in 40 years and interest rates near zero provide a bullish environment for scarce assets, including Bitcoin.
Bitcoin is discounted compared to hard assets
Considering that the S&P 500 is only 4% below its 4,819 all-time high, Bitcoin's recent strength should not come as a surprise. Bulls came in stronger after the call (buy) option instruments dominated the April 1 options expiry, and bears were caught off guard after Bitcoin price stabilized above $47,000 on March 30.
Bitcoin options aggregate open interest for April 1. Source: CoinGlass
A broader view using the call-to-put ratio shows a 39% advantage to Bitcoin bulls because the $605 million call (buy) instruments have a larger open interest versus the $435 million put (sell) options. However, the 1.39 call-to-put indicator is deceptive because most bearish bets will become worthless.
For example, if Bitcoin's price remains above $47,000 at 8:00 am UTC on April 1, only $80 million worth of those put (sell) options will be available. That effect happens because there is no value in the right to sell Bitcoin at $45,000 if it's trading above that level.
Bitcoin bulls aim for a $385 million profit
Below are the three most likely scenarios based on the current price action. The number of options contracts available on April 1 for bulls (call) and bear (put) instruments varies depending on the expiry price. The imbalance favoring each side constitutes the theoretical profit:
Between $44,000 and $46,000: 3,000 calls vs. 2,650 puts. The net result is $120 million favoring the call (bull) instruments.
Between $46,000 and $48,000: 7,900 calls vs. 1,700 puts. The net result favors bulls by $290 million.
Between $48,000 and $49,000: 9,350 calls vs. 1,300 puts. The net result favors the call (bull) instruments by $385 million.
This crude estimate considers the call options used in bullish bets and the put options exclusively in neutral-to-bearish trades. Even so, this oversimplification disregards more complex investment strategies.
For instance, a trader could have sold a call option, effectively gaining a negative exposure to Bitcoin above a specific price. Unfortunately, there's no easy way to estimate this effect.
Bitcoin bulls need a small pump above $48,000 to score a $385 million profit on April 1. On the other hand, the best-case scenario requires a 3% price drop from the current $47,200 to reduce their loss to $120 million.
Bitcoin bears had $580 million in short positions liquidated between March 26 and March 30, according to data from Coinglass. Therefore, bulls should continue to display strength by keeping Bitcoin price above $47,000 heading into April 1's options expiry.
The views and opinions expressed here are solely those of theauthorand do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
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Nonfungible tokens have emerged as one of the most popular use cases of blockchain technology, generating billions of dollars in revenue through 2021.
Non-custodial cryptocurrency platform ShapeShift DAO has launched a new nonfungible token (NFT) auction in support of female artists in the nonfungible token and blockchain industries — a segment of the population that remains underrepresented in the rapidly growing digital economy.
The auction for “Block 495559—Crypto Kitties and the Great Hairball in the Tubes,” a collaborative one-of-a-kind NFT series created by female artist LunaHawk and ShapeShift DAO director GrayMachine, will be held on OpenSea between April 4–11. The NFT series was minted on the Ethereum mainnet and will include custom, animal-themed digital art that conveys the history of the cryptocurrency market through various animals.
ShapeShift DAO members approved of LunaHawk’s 10-piece NFT series in October 2021. The collection was first displayed at the ETHDenver conference in February.
According to GrayMachine, the NFT auction will be a first of a series that will launch in the “coming weeks and months.”
A sample of LunaHawk's NFT art collection.
ShapeShift DAO plans to contribute 10% of the NFT proceeds to the Women of Crypto Art Fund, a community group that supports women in the digital art space. The contributions will be made via Giveth, a crypto-focused charitable funding platform.
In addition to promoting women in blockchain, ShapeShift DAO said the auction will also support the needs of the decentralized autonomous organization as it continues to grow.
Now that we're open source, anyone is welcome and encouraged to add new features to https://t.co/RtsJBsfELo
ShapeShift DAO’s Product and Engineering workstreams will provide guidance and support.
The market for NFTs, meanwhile, has slowed considerably from its torrid growth pace in 2021. By early March, monthly NFT buyers had dipped below 800,000 for the first time since October as search volumes for digital collectibles also declined sharply. Despite the pullback, NFT adoption appears to be on an upward trajectory amid broader global awareness.
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BTC and altcoins could enter a short consolidation phase before retesting their breakout levels, a sign that the current price action could be a buying opportunity.
Bitcoin’s (BTC) rally is taking a breather near the 200-day simple moving average (SMA) and that has resulted in what is either a minor pullback or consolidation in BTC and select altcoins.
In the last few days, Terraform Labs has been on a Bitcoin buying spree. The wallet address, which has been speculated to be that of Terra, received $139 million worth of Bitcoin on March 30, taking its total to about $1.5 billion in BTC.
With Terra breathing down its neck, MicroStrategy seems to have taken up the challenge. The business intelligence firm’s subsidiary MacroStrategy has secured a $205 million loan from Silvergate, which will be used to purchase Bitcoin, cover general corporate expenses and pay the necessary fees and interest on the loan.
The buying interest is not limited to the two companies. CoinShares data showed that institutional investors pumped in $193 million into digital asset investment products last week, the largest inflow since early December 2021.
With institutional investors buying in large quantities, could Bitcoin and the major altcoins break above their overhead resistance levels? Let’s study the charts of the top 10 cryptocurrencies to find out.
BTC/USDT
Bitcoin rose to the 200-day SMA ($48,288) on March 28 but the bulls could not push the price above it. The buyers again tried to clear the overhead hurdle on March 29 but failed.
BTC/USDT daily chart. Source: TradingView
The bears will now try to pull the price to the immediate support at $45,400. If the price rebounds off this support, the bulls will again attempt to thrust the BTC/USDT pair above the 200-day SMA. If they succeed, the pair could start its journey to $52,000.
The rising 20-day exponential moving average (EMA) ($43,531) and the relative strength index (RSI) near the overbought zone indicate that bulls are in control.
This positive view will invalidate if the price turns down and plummets below the 20-day EMA. If that happens, the pair could extend its stay inside the ascending channel for a few more days.
ETH/USDT
Ether (ETH) broke and closed above the overhead resistance at $3,411 on March 29 but the bulls could not clear the obstacle at the 200-day SMA ($3,488). This indicates that bears have not yet given up and are attempting to stall the recovery at the 200-day SMA.
ETH/USDT daily chart. Source: TradingView
If the price sustains below $3,411, the bears will try to pull the ETH/USDT pair to the 20-day EMA ($3,042). A strong rebound off this level will suggest that the sentiment has turned positive and traders are buying on dips.
The bulls will then again try to propel the price above the 200-day SMA. If they succeed, the pair could rally toward $4,000.
Contrary to this assumption, if the price breaks below the 20-day EMA, it will suggest that the traders may be rushing to the exit. That could pull the pair down to the 50-day SMA ($2,853).
BNB/USDT
BNB tight range trading between $425 and $445 has resolved to the upside, indicating that bulls have absorbed the supply and are trying to gain the upper hand.
BNB/USDT daily chart. Source: TradingView
The upsloping 20-day EMA ($409) and the RSI in the overbought territory indicate that bulls are in control. If they sustain the price above $445, the BNB/USDT pair could rise to the 200-day SMA ($467) and later to $500.
Conversely, if the price turns down and breaks below $425, the pair could drop to the 20-day EMA. This is an important level to keep an eye on because a break and close below it will suggest that the bullish momentum has weakened. The pair could then oscillate between $350 and $445 for a few more days.
XRP/USDT
Ripple (XRP) broke above the overhead resistance at $0.91 on March 28 but the bears did not allow the price to sustain the higher levels. This indicates that the bears are aggressively defending the zone between $0.91 and $1.
XRP/USDT daily chart. Source: TradingView
The bulls are attempting to sustain the price above $0.86. If they succeed, the XRP/USDT pair could again rise to $0.91. A break and close above this level could open the doors for a possible rally to the psychological level at $1.
Conversely, if the price sustains below $0.86, the bears will attempt to pull the pair below the moving averages. If they manage to do that, it will suggest that the bullish momentum has weakened. The pair could then drop to $0.70.
ADA/USDT
Cardano (ADA) is facing resistance at $1.26 as seen from the long wick on the candlestick on March 28 and 29. A minor positive is that the bulls have not given up much ground.
ADA/USDT daily chart. Source: TradingView
The upsloping 20-day EMA ($1) and the RSI in the overbought territory indicate that the path of least resistance is to the upside. If buyers propel and sustain the price above $1.26, the ADA/USDT pair could rise to the 200-day SMA ($1.51) and thereafter rally to $1.60.
Alternatively, if the price turns down from the current level and breaks below $1.15, the bears will try to pull the pair to the 20-day EMA. This is an important level to watch out for because a break and close below it could sink the pair to $0.74.
LUNA/USDT
Terra’s LUNA token broke and closed above the overhead resistance at $96 on March 28. Although the long wick on the day’s candlestick showed selling near $100, the bulls did not allow the price to break back below $96.
LUNA/USDT daily chart. Source: TradingView
The buying resumed on March 29 and the bulls thrust the price above the all-time high at $105. If bulls sustain the price above $105, the buying momentum could pick up and the LUNA/USDT pair may rally to $115 and later to $125.
A minor negative is that the RSI is showing signs of forming a negative divergence. If the price breaks and sustains below $105, the pair could drop to $96. This is an important support for the bulls to defend because a break and close below it could aggravate selling. The pair could then drop to the 50-day SMA ($78).
SOL/USDT
After sustaining above $106 for the past two days, Solana (SOL) has risen above the overhead resistance at $122, indicating strong buying by the bulls.
SOL/USDT daily chart. Source: TradingView
If buyers sustain the price above $122, the SOL/USDT pair could start a new uptrend, which could reach the 200-day SMA ($150). This level is likely to act as a stiff resistance but if bulls overcome it, the rally could reach $180.
Contrary to this assumption, if the price turns down from the current level and breaks below $106, it will suggest that the break above $122 may have been a bull trap. The pair could then drop to the moving averages and remain stuck between $81 and $122 for a few more days.
The long wick on the candlestick of the past two days shows that bears are defending the level at $98. However, a minor positive is that the bulls have not allowed Avalanche (AVAX) to drop to the 20-day EMA ($85). This suggests that the traders are in no hurry to exit their positions.
AVAX/USDT daily chart. Source: TradingView
The rising 20-day EMA and the RSI in the positive territory indicate that bulls are in control. If buyers thrust the price above the $98 to $100 resistance zone, the AVAX/USDT pair could pick up momentum and rally to $120.
This positive view will invalidate in the short term if bears sink and sustain the price below the 50-day SMA ($81). Such a move will suggest that the pair could extend its stay inside the $65 to $98 range for a few more days.
DOT/USDT
Polkadot (DOT) has been facing stiff resistance at $23 for the past three days but a positive sign is that the bulls have not ceded ground to the bears. This suggests that the bulls expect a break above the overhead resistance.
DOT/USDT daily chart. Source: TradingView
The 20-day EMA ($20) is sloping up and the RSI is in the positive zone, indicating that the path of least resistance is to the upside. If bulls drive and sustain the price above $23, the DOT/USDT pair could pick up momentum and rally to the 200-day SMA ($29).
Contrary to this assumption, if the price turns down from the current level and breaks below the 20-day EMA, it will suggest that the bullish momentum may have weakened. That could keep the pair range-bound between $16 and $23 for the next few days.
DOGE/USDT
Dogecoin (DOGE) rose above $0.15 on March 28 but the long wick on the day’s candlestick suggests that bears are selling at higher levels.
DOGE/USDT daily chart. Source: TradingView
The moving averages have completed a bullish crossover and the RSI is in the positive territory, indicating that bulls have the upper hand. If the price turns up from the current level and breaks above $0.15, the DOGE/USDT pair could rally to the overhead resistance at $0.17 where the bears may again mount a strong defense.
Contrary to this assumption, if the price continues lower and breaks below the moving averages, it will suggest that the pair may spend some more time inside the range between $0.17 and $0.10.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
If nation-states held their reserves in Bitcoin, instead of fiat, they would be less incentivized to go to war, says chief strategy officer at the Human Rights Foundation, Alex Gladstein.
Alex Gladstein, the chief strategy officer at the Human Rights Foundation, says that if Bitcoin was adopted as a global reserve currency, nation-states would be less incentivized to start wars.
According to Gladstein, the United States was able to sustain its "forever wars" in Iraq and Afghanistan mainly by borrowing capital. That was possible largely because of the Federal Reserve's monetary policy, which has been keeping interest rates relatively low through quantitative easing.
"We literally print money. We sell bonds to the open market for a promise to pay in the future and we use the income from the bond sales to pay for these wars," explained Gladstein in his latest interview with Cointelegraph.
Unlike fiat currency, Bitcoin's total supply is immutable. That means that if nations adopted it as their main reserve, interest rates on borrowed capital would be much higher. That, according to Gladstein, would make unpopular wars harder for governments to sustain.
“These forever wars get probably cut out or reduced in a Bitcoin standard,” said Gladstein.
According to Gladstein, the Russia-Ukrainian conflict could trigger the decline of the U.S. dollar as the dominant reserve currency. As he pointed out, nation-states are looking to reduce their dependency on the greenback after the United States froze Russia's dollar-denominated reserve in response to its attack on Ukraine.
“It is forcing a rethink there where governments are like "well, maybe I don't want all my eggs in one basket. Maybe I don't want the U.S. government to be able to freeze all my stuff,” said Gladstein.
As of March 25, there are 12 firms permitted to “carry out crypto asset activities” under FCA temporary registration status, including CEX.IO, Revolut and Copper.
The Financial Conduct Authority, the United Kingdom’s financial regulator, has extended the temporary registration status of some firms offering crypto services beyond its Friday deadline.
In a Tuesday statement, the FCA said “a small number of firms” in the crypto space will continue to have temporary registration status in the United Kingdom “where it is strictly necessary.” The financial regulator reiterated that temporarily exempting the crypto firms from its previously announced Friday deadline “does not mean that the FCA has assessed them as fit and proper” but included situations in which a company “may be pursuing an appeal” or was still in the process of winding down operations.
“Only firms that are registered with us or on our list of firms with temporary registration can continue trading,” said the FCA. “Other firms must have ceased trading from 10 January 2021. Firms that have not ceased trading are at risk of being subject to the FCA’s criminal and civil enforcement powers.”
The FCA has approved registrations from 33 crypto companies since August 2020 in compliance with the U.K. laws covering Anti-Money Laundering, Combating the Financing of Terrorism and handling transfers of funds. In addition, the financial regulator granted temporary registration status to several companies until Friday, at which time the FCA was expected to reach a decision on the validity of their applications.
As of last Friday, there were 12 firms permitted to “carry out crypto asset activities” under this FCA temporary status, including CEX.IO, Revolut and Copper. The financial watchdog did not specify a new deadline for the firm’s registration to be approved or rejected but previously extended the review period from July 2021 to March 2022.
Many crypto firms withdrew FCA registration applications following the regulator's seeming crack down on AML and CFT compliance in 2020. On March 13, the FCA ordered Bitcoin ATM operators to “shut down or face further action,” citing the lack of regulatory structure and the volatility of certain assets in addition to AML concerns.
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It feels like a case of "too much too soon" for many, but only a shallow retracement is expected.
Bitcoin (BTC) sentiment is seeing its first significant test of the rally to year-to-date highs as bullish gains dry up.
The start of Wall Street trading on March 30 failed to induce a fresh advance on BTC/USD, which threatened to lose support at $47,000.
From "extreme fear" to "greed" in one week
After gaining nearly 30% since March 14, Bitcoin has managed to cling to its yearly opening price as support, this previously marking the resistance ceiling of its trading range for throughout 2022.
Now, however, hopes of a retracement appear to be coming true, as momentum shows signs of — at least temporary — fatigue.
Data from Cointelegraph Markets Pro and TradingView captured the turnaround overnight on March 30, with $48,000 currently the level proving stubborn for bulls to overcome.
Traders are keenly eyeing the possibility of a support backtest, but remain mixed over how low would be "too low" and end up threatening the uptrend altogether.
Popular trader Crypto Ed highlighted $45,000 as a core bounce zone in the event of a broader pullback, this nonetheless being below the all-important yearly open at $46,200.
A breakdown there and move towards $40,000, he added in his latest YouTube update, was something he "doubted."
Looking at the sentiment gauge of the Crypto Fear & Greed Index, however, the need for a time out becomes all the more apparent. In under a week, its normalized score went from 22/100 — "extreme fear" — to 60/100 — "greed" and its highest level since mid-November.
Since the local top, the score has already begun falling toward "neutral" territory, and measured 56/100 as of March 30.
Crypto Fear & Greed Index (screenshot). Source: Alternative.me
Inflation nightmare scenario playing out
Analyzing the sentiment issue, social media users referenced macro forces at work, which traditionally spell trouble for risk assets in order to argue that enthusiasm around Bitcoin was overheated.
The highest inflation in 40 years and interest rates near zero hardly provide a fertile risk-on environment, they argued.
A look at gold markets, however, could show that the trend is going nowhere despite central bank measures to tame inflation.
Material Scientist, creator of on-chain analytics resource Material Indicators, noted that gold futures deliveries were following the "dysfunctional" path previously forecast by ex-BitMEX CEO, Arthur Hayes.
Hayes had warned that gold would skyrocket once it became apparent that saving in major fiat currencies was a lame bet.
In the same piece, Hayes said that Bitcoin would ultimately benefit from the chaos via a decoupling from traditional equities.
"A gold price of >$10,000 will psychologically shock the global asset markets. As global asset allocators now think chiefly about inflation and real yields, any and all hard monetary assets believed to protect portfolios from this pestilence will get bid to astronomical levels," he wrote.
"And that is the mental shift that breaks the correlation of Bitcoin with traditional risk-on / off assets, such as US equities and nominal interest rates."
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The service would allow users to bridge assets from any blockchain to BNB Chain.
On Tuesday, centralized cryptocurrency exchange Binance announced the rollout of Binance Bridge 2.0. The feature enables users to bridge assets from any blockchain, including tokens not listed on the Binance app, to the BNB Chain. Bridged tokens listed on Binance will be stored in the Funding or Spot Wallet, while unlisted bridged tokens will be transferred to the Funding Wallet only.
Users can bridge-in or bridge-out tokens between their native blockchains and BNB Chain via regular deposit and withdrawal functions. In the future, Binance also plans to create a better version of its mobile app to allow users to facilitate such conversion via a single click. Regarding the development, Mayur Kamat, head of product at Binance, said:
"With Binance Bridge 2.0, we can make decentralized finance accessible to a larger audience worldwide while still providing the seamless user experience that centralized finance offers. We are already seeing this via the tremendous adoption of the PancakeSwap Mini-app."
Binance has also implemented a brand new automated token circulation control system in Binance Bridge 2.0. The exchange will not maintain a surplus of pegged tokens, also known as wrapped assets, except for a buffer size in hot wallets. Instead, it will print additional tokens when users withdraw pegged tokens onto the BNB Smart Chain.
The company indicated that all other circulation will be backed by the native tokens deposited by the users from the original blockchains. When users want to switch from the pegged tokens back to the original tokens, they can deposit the pegged tokens into Binance and withdraw the original tokens. Simultaneously, the excessive tokens will be swept to the cold wallet and burnt automatically.
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Terra’s “liquidity bootstrapping pools” were meant to prevent DeFi protocol token pump and dumps at launch but the model is not as effective as expected.
New protocols are launching every day on different networks in the crypto space and the trend is likely to continue through this year. When looking at the top five networks by total value locked (TVL) — Ethereum (ETH), Terra (LUNA), Binance Smart Chain (BSC), Avalanche (AVAX) and Solana (SOL) — according to data from DeFiLlama, Ethereum have 579 protocols (including L1 and L2); Terra has 25, BSC has 348, Avalanche and Solana have 187 and 64 protocols, respectively. The low number of protocols and high TVL from Terra surely stand out as the outlier here.
Terra’s TVL reached an all-time high at $20 billion in December 2021 before dropping to $13 billion during the January 2022 crash. To date, the ecosystem has managed to boost its liquidity back to $26 billion.
With only 25 protocols built on the chain, Terra has attracted enough TVL to become the second largest network after Ethereum. The recent announcement of backing UST (Terra’s stablecoin) with $1 billion worth of Bitcoin (BTC) reserves and the Mars protocol launch coincide nicely with the sudden rise in LUNA price at the end of February 2022.
The rise in the chain’s governance token is often an indication of confidence in the network and the protocols, but does a new protocol launch always add value to the network and stimulate user activity and engagement?
Let’s take a look at how the price of LUNA changed when new protocols launched on Terra; then investigate how the most recently launched Mars and Astroport protocols impacted native token prices, user engagement and LUNA price.
LUNA is the tool that ensures the UST-USD peg
Before looking into the correlation between LUNA price and the new protocol launch, it is important to understand the LUNA-UST mechanism that ensures the peg of stablecoin UST to USD.
LUNA is used as a counterpart to UST to maintain the price peg of UST to USD. When UST is worth more than $1, it means there is a greater demand for UST than the supply in the Terra ecosystem. So the protocol incentivizes participants to burn LUNA and mint UST to meet the increasing demand for UST until the value of 1 UST is equal to $1. On the contrary, when UST’s price is lower than $1, the supply of UST is larger than the demand so UST will be burnt and LUNA will be minted until UST’s value reaches $1 again.
By regulating the supply of LUNA in the ecosystem, Terra can effectively keep UST pegged to USD. This mechanism also causes LUNA’s price to increase as the demand for UST increases.
LUNA price is highly correlated with new protocol launches
Very often during the initial pre-launch phases of a new protocol, there is a sudden increase in demand for UST. This is because participants wish to obtain airdrop incentive tokens from the new protocol and they are often asked to lock up UST to provide enough liquidity for the protocol when it launches.
The increasing demand in UST from participants during pre-launch phases of the new protocol causes more UST to be minted and more LUNA to be burnt, resulting in a sudden increase in LUNA price during these pre-launch phases.
Here is an example of the recently launched Mars protocol, where LUNA price jumped from sub $50 to over $60 in two days right after the new protocol pre-launch phases started.
LUNA February 2022 price. Source:CoinGecko
Here is another example of how LUNA price went up from sub $60 to over $90 in December 2021 right after Astroport’s pre-launch phases started.
LUNA November to December 2021 price. Source:Flipside Crypto
The new protocol launch in the past two recent cases did help push up LUNA’s price, which can be seen as a positive effect on the Terra network. But to know whether they add value to the Terra ecosystem, one needs to also look at the protocol’s token price and user engagements after the launch.
ASTRO price and volume after the launch
Astroport accumulated $90 million in the lockdrop, but the token price of ASTRO has experienced a downturn after the launch of the protocol due to the bearish market environment at the beginning of 2022. The price has picked up since the beginning of March and now is trading its launch valuation.
ASTRO/UST price since Astroport launch. Source:TradingView
The daily number of swaps on Astroport has been gradually increasing since the launch for about three months, indicating active user engagement on the platform after the airdrop.
Astroport total swap count. Source: Flipside Crypto
The total trading volume transacted on Astroport has also shown a strong increasing trend since the launch, which peaked in the middle of March.
Astroport trading volume in USD. Source: Flipside Crypto
The Astroport launch was successful and the post launch data also show that the platform has been able to maintain user activities and engagements. The story of Mars protocol is however quite different.
Mars price and volume after the launch
Immediately after the Mars launch on March 7, 2022, MARS token price dropped off a cliff within an hour from 1.65 UST to 0.7 UST. This is very different from the price reaction right after Astroport’s launch. So what happened to MARS?
It turns out that the protocol couldn’t load successfully in the web browser at the time when it was scheduled to go live on March 7, 2022, 11 am GMT. Users who attempted to claim the airdrop tokens through the protocol’s website failed to do so and had to wait until the website became functional.
However, sophisticated users who knew how to interact with the Terra chain directly called the claim rewards method on Terra station and managed to claim MARS ahead of the non-tech savvy users. They dumped the tokens immediately in the market, causing an immediate drop in price.
MARS/UST price 4-hour. Source: TradingView
To explain a bit more in detail how one could claim MARS by interacting with Terra chain, the investor first needs to know Mars protocol’s airdrop contract address, which is publicly available on etfinder; then they need to know which method in the code to call on Terra Station to claim the rewards, which is the tricky part.
Since the protocol just launched, the code is often not available in the public domain for people to find the claim method. But a wild guess most of the tech-savvy investors had was that Mars protocol was forked from Astroport. So the claim method was highly likely the same as Astroport’s. It turned out to be true and these investors managed to claim the MARS airdrop using the same function “claim_rewards_and_unlock” on the chain.
Three hours after the official launch time, Mars protocol’s website was still not functioning and the airdrop MARS still couldn’t be claimed from the website. The price of MARS had already dropped to $0.64 from $1.65 — a 60% drop in three hours and nothing could be done if the investor did not know how to interact with Terra chain.
Protocol is still not working... and $MARS are getting dumped like trash...
Let’s have a look at the two major products on Mars protocol right after the launch. Red Bank, the saving and lending space, has failed to maintain user engagements after the airdrop. The number of transactions peaked on the third day after the launch to almost 5,000 a day and has been dropping since then. The daily volume in USD has also been decreasing since day 1 from $212 million to $13 million as of March 27.
Mars Red Bank transaction count and volume in USD. Source: Flipside Crypto
Fields is the space in Mars protocol for yield farming strategies where users can provide liquidity to ANC-UST, LUNA-UST and MIR-UST. Fields’ historical transaction and volume after the launch show a similar story. The product struggles to maintain the same level of activity as the launch day and the number of transactions is 1/8 of what it was at the peak while the volume in USD is less than 1/30 of the launch day.
Mars Fields transaction count and volume in USD. Source:Flipside Crypto
Although it’s not certain that the incident at the launch affected Mars protocol’s user engagements and confidence, the data shows the protocol has been struggling to attract volumes and activities since the launch.
A new protocol launch does not necessarily always add value to the network, as shown in the comparison between Astroport and Mars, which have very similar pre-launch strategies but very different outcomes post launch.
Incidents on the launch day jeopardize not only the protocol, but could also affect user confidence in the ecosystem. An airdrop incident allowing only the tech savvy investors to claim first will drive away the vast majority of future investors. New protocols launching on Terra chain in the future should make greater efforts to prevent such incidents, otherwise investors’ long-term interests and trusts could evaporate sooner than one could imagine.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
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The agency’s $365 million proposed FY2023 budget includes significant allocation for CPAs and whistleblowers.
The U.S. Commodity Futures Trading Commission, or CFTC, has released its Fiscal Year 2023 (FY2023) budget request, seeking $365 million. This marks a 9.9% increase over the previous year and 20% over FY2021. The commission regulates the country’s derivatives market and has been increasingly active in recent years in policing financial products that incorporate cryptocurrencies.
According to the agency’s request document, the CTFC focuses on digital asset custodian risk, ensuring secure storage, as well as on accounting. The agency has its own staff of certified public accountants due to the lack of guidance on digital asset accounting from sectoral oversight bodies. In addition, the agency ensures derivative clearing organizations “employ strong segregation of duty processes and procedures to safeguard against theft of the collateral from [their] employees,” and it has extensive plans to increase educational efforts.
The request was more modest than what commissioner Rostin Behnam had been angling for. He told the Senate Agriculture Committee in February that his agency needed an additional $100 million and additional authority to regulate Bitcoin (BTC) and Ethereum (ETH), the cryptocurrencies the government treats as commodities.
The CFTC now depends heavily on whistleblowers in its enforcement efforts. Behnam told a Futures Industry Association audience this month that the agency had received over 600 tips since October, of which “a large number allege cryptocurrency fraud, such as pump-and-dump schemes, refusals to honor requests to withdraw money, and romance scams.” The agency announced a $10 million whistleblower award on March 18.
The price of Bitcoin is $47,806 at the time of publication, making MicroStrategy's current 125,051 BTC holdings worth roughly $6 billion.
MacroStrategy, a subsidiary of business intelligence firm MicroStrategy, said it will purchase Bitcoin after obtaining a multimillion dollar loan from Silvergate Bank.
In a Tuesday announcement, MicroStrategy said Silvergate issued a $205 million loan “secured by certain Bitcoin held in MacroStrategy’s collateral account.” The firm's subsidiary MacroStrategy will be using the proceeds of the loan to purchase Bitcoin (BTC), pay fees and interest related to the loan, and handle general corporate expenses.
“The SEN Leverage loan gives us an opportunity to further our position as the leading public company investor in Bitcoin,” said MicroStrategy CEO Michael Saylor. “Using the capital from the loan, we’ve effectively turned our Bitcoin into productive collateral, which allows us to further execute against our business strategy.”
Launched in 2020, the Silvergate Exchange Network leverage service allows firms to secure BTC-collateralized loans for U.S. dollars. According to the bank, it had roughly more than $570 million in commitments as of Dec. 31.
Since making a $250-million BTC investment in August 2020, MicroStrategy now holds billions in the crypto asset following separate buys using the company’s cash on hand and proceeds of sales of convertible senior notes in private offerings to institutional buyers. With the BTC price $47,806 at the time of publication, the firm’s 125,051 coins are worth roughly $6 billion.
Silvergate has helped provide capital to many companies involved in the crypto and blockchain industry. In October, the bank issued a $100-million credit line to crypto mining firm Marathon Digital to be used for funding its operations as well as expanding the number of BTC miners. Crypto.com announced a partnership with Silvergate in November aimed at allowing institutional clients to deposit and withdraw from the crypto exchange using U.S. dollars.
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"We are in touch with security teams at major exchanges and will be reaching out to all in the coming days," said the team at Ronin.
According to Axie Infinity's official Discord and Ronin Network's official Twitter thread, along with its Substack page, the Ronin bridge and Katana Dex have been halted after suffering an exploit for 173,600 Ethereum (ETH) and 25.5 million USD Coin (USDC), worth a combined $612 million at Tuesday's prices. In a statement, its developers said they are "currently working with law enforcement officials, forensic cryptographers and our investors to make sure that all funds are recovered or reimbursed. All of the AXS, RON and SLP [tokens] on Ronin are safe right now."
As told by Ronin developers, the attacker used hacked private keys in order to forge fake withdrawals, draining the funds from the Ronin bridge in just two transactions. More importantly, the hack occurred on March 23 but was only discovered on Tuesday after a user allegedly uncovered issues after failing to withdraw 5,000 in ETH from the Ronin bridge. At the time of publication, RON, Ronin's primary governance token, has fallen nearly 20% to $1.88 in the past hour.
Sky Mavis’ Ronin chain currently consists of nine validator nodes, of which at least five signatures are needed to recognize a deposit or withdrawal event. The attacker managed to gain control over five private keys, consisting of Sky Mavis’s four Ronin validators and a third-party validator run by Axie Decentralized Autonomous Organization, or DAO. Obtaining unauthorized access to the latter was especially time-consuming.
Last November, when Sky Mavis, the developer of the Axie Infinity and Ronin ecosystems, requested help from the Axie DAO, to distribute free transactions due to a surge in the number of users. The Axie DAO whitelisted Sky Mavis to sign various transactions on its behalf, and the process was discontinued in December. However, access to the whitelist was not revoked.
Once the attacker obtained access to Sky Mavis systems, they acquired the final signature from the Axie DAO validator, thereby completing the node threshold required for the illicit siphoning of funds from Ronin. At the time of publication, most of the hacked funds are still sitting inside the attacker's wallet.
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The fruits of President Biden’s EO will not materialize until months from now, but the need for regulatory change is far-reaching.
United States President Joe Biden’s Executive Order on Ensuring Responsible Development of Digital Assets was widely praised for acknowledging cryptocurrency and blockchain technology’s place in the world and setting the U.S. on a path toward more comprehensive regulation of the sector. The order, or EO, sets a research agenda that encompasses consumer protection, financial stability, crime and national security, U.S. leadership, servicing the underbanked and responsible development.
With a number of reports being commissioned for delivery over the course of months and no specific actions prescribed, it is impossible to gauge the effect the order will ultimately have on the sector, or even foresee how its goals will be met. However, that does not prevent some conclusions from being drawn from other things that are not in the text of the EO.
Tangible effects
Senator Cynthia Lummis, a highly visible proponent of crypto, commented, “I think his executive order misses the fact that the overwhelming majority of digital asset users are law-abiding and trying to make our financial system better.”
Lummis’ comment points to the emphasis in the EO on crime-stopping, with three reports coming out related to that area. Market building received far less explicit attention. Consumer protection was brought to the front and center with the demand for input from the Consumer Financial Protection Bureau. The Commodity Futures Trading Commission was seemingly given a more prominent place in the EO than the Securities and Exchange Commission.
Aaron Cutler, partner at Hogan Lovells and former senior adviser to majority leader Eric Cantor, did not read much meaning into the relative amounts of ink devoted to the various regulatory agencies. Cutler told Cointelegraph:
“The executive order spreads potential regulation around, acknowledging that a lot of agencies have a role here, possibly to the chagrin of [SEC] Chairman Gensler.”
He added that Gensler “has a lot on his plate” already.
The need for regulation is immediate. An editorial in Traders Magazine said the EO “was a meaningful step forward, but the markets need tangible further development for financial institutions to commit more to the space.”
Futures Industry Association president and CEO Walt Lukken spoke in a similar vein at the organization’s annual conference shortly after the release of the EO, saying:
“Several major crypto exchanges have purchased regulated futures exchanges, identifying our markets and its regulatory framework as strategically important. […] We have a resilient and thriving industry because of well-crafted regulation.”
Lukken went on to highlight a non-intermediated derivatives clearing model under consideration by the CFTC that his organization “welcomes.”
Regulators vs. legislators
The current legislative environment — with the Senate closely divided along partisan lines and the Democratic party split internally over its position on crypto — dampens hopes of regulation through legislation. Senator Lummis is expected to introduce a bipartisan bill that will offer regulatory clarity and consumer protections. Representative Don Beyer introduced the Digital Asset Market Structure and Investor Protection Act last summer that will do the same things if it emerges from the committee. Apparently, the agencies called upon in the EO will produce similar results in due course.
A rare piece of bipartisan crypto legislation was the “fix” last year to the section of the Infrastructure Investment and Jobs Law that instituted reporting requirements for certain crypto transactions, beginning in 2026. This provision contributes to compliance and gives clarity to tax requirements. The EO could have addressed implementing the existing tax legislation from the infrastructure law, although historically, EOs have not provided tax legislation. Instead, presidents submit tax proposals to Congress with a budget for tax legislation.
Tax guidance is another gap in the crypto playbook. “What we have now is guidance in the form of notices and FAQs on the IRS website, while we wait for future judicial decisions and code sections to establish formal tax guidance,” Jesse Rodriguez, a certified public accountant at Kaufman Rossin, told Cointelegraph. “There is no timeline available on the expected formal guidance.”
Treasury to IRS
The Treasury Department is one of the busiest agencies under the EO, taking the lead on five reports, including one on regulatory gaps, and providing support for many of the other eight, including central bank digital currency research. So, more complete Internal Revenue Service guidance might be in the works as well.
Rodriguez was stoic about tax guidance. “I don’t find it incredibly challenging to follow the reporting requirements and navigate the income reporting issues,” he said. “The general framework of tax principles that apply to property can be applied in this current environment of uncertainty.”
Things can be tougher for crypto users. The use of cryptocurrency in retail will remain “an overwhelming administrative burden on brokers until there is clarity provided through legislation,” Rodriguez said. But “crypto tracker software applications are a great approach to the basis tracking and reporting requirements for customers.”
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The blockchain technology landscape is shifting in Austria, with public institutions and private firms experimenting with the tech.
Austria has been actively transforming into an attractive location for providers of blockchain-based products, with the government itself experimenting with the technology and trying to create a legal basis upon which companies can use it.
With regard to blockchain-based applications in the economy, however, Austria is still in the experimental phase, with most firms still running pilot projects. Still, politicians and economists alike see potential for select industries.
Public administration reform via blockchain
The Austrian government is quite open to blockchain innovations, cryptocurrencies aside, and has supported various projects in the public and private sectors.
In 2019, a consortium of public administration institutions founded the Austrian Public Service Blockchain (APSB). Active participants in the APSB — i.e., operators of their own blockchain nodes — include the Austrian Economic Chamber, City of Vienna, Federal Computing Center, and Vienna University of Economics and Business Administration. One participant, Kontrollbank, is still in the set-up phase.
Meanwhile, private sector blockchain infrastructure is developing in parallel, and the Blockchain Initiative Austria (BIA) association was founded at the beginning of 2021 to advance this purpose. Austriapro — a developer of electronic business standards — is working together with the Austrian Blockchain Center to support the establishment of a secure infrastructure for private-sector blockchain use in Austria. Association members will jointly operate the blockchain nodes in the form of a “consortium chain.”
The first pilot project of the APSB and BIA involves data certification and notarization. Here, digital fingerprints of files are placed on the blockchain to be able to prove the unaltered nature of the data at a later point in time.
In addition, the Austrian Economic Chamber has provided companies and startups with information about blockchain tech, including a detailed guidebook to help determine whether blockchain makes sense for specific applications.
To more strongly promote the technology in the economy, the Austrian Economic Chamber set up a blockchain working group. Its participants primarily exchange information on blockchain topics, discuss current initiatives and best practices, and regularly organize events.
Increasing interest from traditional financial institutions
The blockchain market in Austria and its areas of application are constantly changing. In addition to the government, fintech companies and small financial institutions are also pushing ahead with the technology.
Areas of application include, but are not limited to, crypto trading, mining, and custody and payment services, as well as financing via initial coin offerings, initial token offerings and security token offerings.
Recently, however, the decentralized technology has also piqued the interest of traditional financial institutions. For example, Raiffeisen Bank — Austria’s second-largest bank — began experimenting with its own euro-pegged stablecoin in the fall of 2020. Employees can already use it to make purchases at the company’s in-house cafeteria.
Raiffeisenbank cooperative banks are also big on innovation. Volksbank Raiffeisenbank Bayern Mitte, for example, has been offering Bitcoin (BTC) investment consultants since 2021. It also intends to offer cryptocurrency trading services to clients sometime this year.
A ski-jumper in Innsbruck, Austria. Source: Rubblebutz.
Oesterreichische Nationalbank (OeNB), Austria’s central bank, is also experimenting with blockchain. In 2021, a new research project known as the Delivery vs. Payment Hybrid Initiative, or DELPHI, launched in Austria. Its goal is to test the issuance of federal bonds against the issuance of a digital euro. Participants in DELPHI include the OeNB; the Austrian Federal Financing Agency, which manages the country’s public debt; and OeKB CSD, which specializes in the central custody of securities and is a subsidiary of credit institution Oesterreichische Kontrollbank.
In the process, Austrian financial institutions are researching how to onboard and settle federal bonds using blockchain technology. The OeNB also plans to develop a central bank digital currency.
The listing of a Bitcoin product on the Vienna Stock Exchange in September 2020 was another important step, marking the world’s third official regulated market to list such a product. As a result, both Bitcoin and Ether (ETH) products from the Swiss issuer 21Shares AG can be traded on the exchange. In August 2021, the Vienna Stock Exchange also announced the listing of crypto exchange-traded products from ETC Group.
Electricity sharing as the energy model of the future
Wien Energie, Austria’s largest energy supplier, is currently testing the possible uses of blockchain and smart contracts in electricity sharing models. Together with the startup Riddle & Code, the Austrian electricity provider developed blockchain infrastructure in June 2021 that enables the peer-to-peer trading of electricity.
People can join together to form a residential P2P energy community and sell their self-produced solar electricity to each other via the blockchain. Typically, the feed-in, distribution and resale of energy via the electricity grid see high fees charged. But with the electricity sharing model, this process can take place without intermediaries, thanks to the blockchain.
Wien Energie plans to expand its solution through smart grids, which decentralized suppliers will use to feed in energy based on the determined supply and demand within a grid.
Salzburg AG and Verbund AG, two leading energy companies in Austria, are also working on blockchain-based peer-to-peer trading solutions.
Crypto tax reform on the rise
Austrian crypto investors are facing new tax regulations. A tax exemption that investors previously enjoyed disappeared on March 1, and crypto income will now incur a 27.5% tax, regardless of how long the assets are held. The new tax applies to all cryptocurrencies acquired since Feb. 28, 2021.
Austrian crypto investors are facing new tax regulations. A tax exemption that investors previously enjoyed disappeared on March 1, and crypto income will now incur a 27.5% tax, regardless of how long the assets are held. The new tax applies to all cryptocurrencies acquired since Feb. 28, 2021.
The new crypto tax reform is another step toward treating cryptocurrencies the same way as the traditional stock and bond markets. With these new regulations, the state wants to create more legal clarity for investors and, thus, inspire confidence in the new technology. However, it remains to be seen whether the Austrian government will succeed in pushing forward new business models and applications in the blockchain sector.
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LBMA CEO Ruth Crowell said the new blockchain-based initiative can help to promote “confidence” in the “integrity and accountability” of the gold that is traded.
Some of the most prominent organizations in the gold industry have joined forces to launch a new “integrity program” that utilizes blockchain technology for supply chain management — a move that’s intended to help market participants verify the authenticity of their bullion.
London Bullion Market Association (LBMA) and the World Gold Council (WGC) announced Monday that they are collaborating to develop an “international system of gold bar integrity, chain of custody and provenance” that’s based on blockchain technology developed by companies aXedras and Peer Ledger. The ledger will be used to register and track gold bars at each stage of the production and distribution cycle, including mining, vaulting and purchase by jewelry manufacturers.
The so-called Gold Bar Integrity Programme is being supported by organizations such as CME Group, Metalor, Barrick Gold, Brinks, Royal Canadian Mint, Newcrest Mining, Hummingbird Resources, Argos Heraeus SA, Asahi, Aura Minerals, Perth Mint and others.
Initially developed as a pilot, the program will eventually be promoted for use across the gold industry, LBMA and WGC said.
Supply chain management is cited as one of the most promising use cases of blockchain technology. As Cointelegraph reported, more than half of the companies added to Forbes’ 2021 Blockchain 50 list were enterprises actively using distributed ledger technology to solve their supply chain and logistics issues. In April 2021, American defense contractor Lockheed Martin said it was using blockchain technology for supply chain management in Switzerland.
Our CEO David Tait and LBMA CEO Ruth Crowell today announce the launch of a new Gold Bar Integrity Programme. Together with @lbmaexecutive, we will develop and implement an international system of gold bar integrity, chain of custody and provenance: https://t.co/jcZ6V1wYLBpic.twitter.com/x7klqZ8WTL
Issues such as illegal mining, laundered gold, fake bullion bars and human rights abuses have made the gold industry especially vulnerable to supply chain opacity. In 2020, the Organization for Economic Cooperation and Development released a report that provides guidance on how gold producers could avoid contributing to “serious abuses” in the mining and production process.
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“Owning a Mt. Gox NFT proves you’re OG... you were there in the early days of Bitcoin, and now you can prove it on the blockchain," said the project's whitepaper.
The former CEO of thnow-defunct crypto exchange Mt. Gox has announced that certain users will be eligible to receive commemorative nonfungible tokens, or NFTs.
In a Monday announcement on Twitter, Mark Karpelès said that crypto users who were Mt. Gox customers between 2010 and 2014 — during which time the exchange was hacked and subsequently declared bankruptcy — could register to claim a free NFT. According to the CEO, the offer extends to users who had a balance or have claimed losses from the defunct exchange.
“Mt. Gox customers are early adopters, some of them were on BitcoinTalk when Satoshi Nakamoto was still posting,” said the project website. “A new token or NFT airdrop is a great way to engage users and at the same time erase a bit of the loss incurred in Mt. Gox.”
You can claim your @MtGox NFT on https://t.co/uUVPsXtCYC if you were a MtGox customer between 2010 and 2014. The NFT is airdropped for free, and available no matter if you had a balance or filed a claim with the bankruptcy.
Mt. Gox users are required to verify they were customers of the exchange who registered accounts before Feb. 25, 2014. The NFTs will be ERC-721 compliant, issued on the Polygon blockchain and identified according to users’ Mt. Gox account numbers as well as their remaining balances in Bitcoin (BTC) and Japanese yen — though including the balance is optional.
“A hardcoded limit will prevent any NFT from being created outside the range of Mt. Gox accounts. This minting method will not have owner-only limitation, but instead will require an externally signed token to be issued to users who have completed verification.”
First launched in 2010 by programmer Jed McCaleb and later purchased by Karpelès, Mt. Gox was once one of the largest exchanges in the world. However, a 2011 hack, which resulted in the loss of 850,000 BTC — $460 million at the time and roughly $40 billion at the time of publication — as well as the exchange’s collapse, left thousands of crypto holders out of pocket.
Nobuaki Kobayashi, the trustee for Mt. Gox, has worked to compensate creditors of the exchange for years, announcing in November 2021 that a rehabilitation plan filed in the Tokyo District Court had become “final and binding.” However, according to the commemorative NFT website, the NFTs are “fully independent” from the Mt. Gox bankruptcy case and “100% self-funded.”
Though the recently announced NFTs are seemingly the only "official" ones to have come out of the Mt. Gox collapse, some crypto users have latched onto the controversy surrounding the exchange’s hack and bankruptcy since 2014. One of the cards from Spells of Genesis, a blockchain-based game featuring trading cards, parodies a photo of crypto trader Kolin Burges protesting outside the exchange’s Tokyo headquarters in 2014 with a sign asking “Where is our money?” The game issued 700 of the "Gox, the Fallen Mountainlord" cards in 2015.
The project’s whitepaper also said the NFTs could be modified to include art after being published and hinted at other use cases:
“Owning a Mt. Gox NFT proves you’re OG. You were there in the early days of Bitcoin, and now you can prove it on the blockchain [...] it is possible to leverage this in the future in ways that aren’t known yet.”
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STG price rallied after excited investors piled into Stargate Finance, an interoperability-focused multi-chain DeFi platform.
"Stargate Finance" has been trending on Twitter for the past week and while it's too early to call for a full-blown DeFi bull market, traders have been shoveling funds into the project, which claims to be a “composable omni-chain native asset bridge.”
Data from Cointelegraph Markets Pro and TradingView shows STG was listed on exchanges on March 17 and its price has climbed 438% from a low of $0.665 to a high of $3.58 on March 25.
STG/USDC 1-hour chart. Source: TradingView
Here’s a look at some of the developments with the protocol that have attracted DeFi users and boosted the price of STG ahead of its initial community auction.
Cross-chain composability
Interoperability has been a growing theme across the cryptocurrency ecosystem and this theme continues to expand as investors realize that the future Metaverse will be comprised of multiple interconnected blockchains.
While many of the older DeFi protocols have yet to develop a plan to integrate the most popular chains, Stargate was designed with cross-chain composability as its main feature. This allows a cross-chain transfer to be composed with smart contracts on the destination chain.
According to Startgate Finance, this helps to simplify the swap process and maximizes the degree of flexibility by making the process more convenient for users and opening new opportunities for cross-chain applications.
The project also offers instant guaranteed finality, which ensures that any transfer request committed on the course chain will also be committed on the destination chain as well. Unified liquidity eliminates the need for intermediate tokens as each supported chain has a pool of liquidity for the supported native assets.
The networks currently supported by Stargate F include Ethereum (ETH), BNB Smart Chain (BSC), Polygon (MATIC), Avalanche (AVAX), Arbitrum, Optimism and Fantom (FTM).
Hype builds over community auctions
A community auction begins on March 30 and users that obtained pre-approval for their wallets or bonded funds before March 17 are eligible for SGT tokens at a price of $0.25. Tokens bought during the auction include a one-year lock-up, followed by a linear unlock period that lasts six months.
Pre-approved accounts are able to purchase a maximum of 18,657 STG, while those that bonded can obtain up to 4,668 STG. Any tokens that remain after Round 1 will be split equally and made available to buy in Round 2 for those who obtained the maximum eligible amount during Round 1.
A third factor helping to attract attention and users to Stargate Finance are the attractive stablecoin farming yields across its supported networks.
Top yielding stablecoin farms on Stargate. Source: Stargate
The high yields on stablecoins have already managed to attract $2.95 billion in liquidity locked on the protocol, according to data from Defi Llama, which makes Stargate Finance the thirteenth largest DeFi protocol by TVL.
Total value locked on Stargate. Source: Defi Llama
While it's still too early to tell how Stargate Finance will perform in the long term and whether its token price can hold its recent gains, it appears as though interoperability and a focus on stablecoin liquidity are the two key factors required for DeFi protocols looking for longevity in the crypto ecosystem.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
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