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The BitDAO community is currently voting on a governance proposal that would seek to generate a yield from a portion of the organization’s $2.1 billion treasury.

The goal of the proposal is to create yields for holders of BitDAO’s native token, called bit, while also expanding its liquidity on Uniswap.

BitDAO holds the second-largest DAO treasury behind Uniswap. Unlike other DAOs built to administer DeFi projects, BitDAO is an investment DAO. The organization says its goal is to promote crypto adoption on a global scale by issuing grants to projects.

The plan would involve depositing a portion of its $2.1 billion treasury into its token vault on the Ichi platform. Ichi is a DeFi protocol that enables DAOs to mint their own stablecoins, called “oneTokens,” in exchange for their deposited collateral. Each oneToken created in this process is pegged to the U.S. dollar. Projects that mint their own white-label stablecoins from Ichi do so under a specific minting ratio determined by the protocol. Ichi offers these projects an internal rate of return (IRR) that allows projects to earn yields on their deposits.

According to the proposal, BitDAO community members have four deposit options to consider, ranging from 1 million to 20 million bit tokens. This would put the deposit outlay from $425,000 to $8.5 million at the current bit token spot price. The community can also decide to vote no, in which case, the DAO would not go through with the plan.

The vote succeeding is not the only requirement for the deposit plan to happen. According to the proposal, the Ichi DAO would have to commit to a 15% IRR on the BitDAO treasury deposit for the first year. Ichi’s IRR for bit token deposits is currently at 12%.

The vote is scheduled to end on Nov. 10. Early voting figures show only three wallets participating, with two voting for a 20 million bit token deposit, while one favors depositing 10 million bit tokens.

BitDAO’s vote is the latest example of DAOs looking to put their treasuries to work. Inadequate treasury management has seen DAO treasuries decline amid the current bear market, falling as low as $8 billion in the summer from a high of $13 billion last November.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

An office within the Federal Reserve Bank of New York has completed a test of a central bank digital currency for wholesale, cross-border transactions, exchanging a U.S. digital dollar with experimental foreign currencies on separate blockchains.

The experiment known as Project Cedar: Phase One focused on the potential for central bank digital currencies to become viable options for large foreign currency transactions, though Federal Reserve Chair Jerome Powell and other board members of the U.S. central bank have made clear that the creation of a digital dollar is not a foregone conclusion.

The pilot beat the average clearing and settlement of transactions from two days to under 15 seconds, and completed the transaction at an “atomic” level, eliminating the risk that complicated cross-border trades might only partially go through.

Several countries already utilize non-blockchain, real-time payment systems, but they typically operate via a single currency. The New York Fed test cleared payments at a virtually instant speed between a digitized dollar and eight experimental currencies run on separate blockchains.

Despite the experiment’s positive outcome, the paper touting this result from the New York Fed made clear that the experiment was not a definitive conclusion. Still, the group behind the project touted the potential for an American central bank digital currency (CBDC) to improve large-scale cross-border payments.

“Project Cedar Phase I revealed promising applications of blockchain technology in modernizing critical payments infrastructure, and our inaugural experiment provides a strategic launch pad for further research and development regarding the future of money and payments from the U.S. perspective,” said Per von Zelowitz, director of the research center that ran the experiment within the New York Fed.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Quick take

• Rapid Insights provide a deeper analysis of the current crypto landscape in a timely fashion.
• Chainlink is the leading oracle service provider in DeFi by a wide margin. 
• Purely on-chain oracles have a place in DeFi but aren’t always the optimal solution, particularly for latency-sensitive applications. 
• To fulfill this market need, Chainlink recently announced a new product offering with a hybrid infrastructure consisting of both on- and off-chain components. 

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Circle, the issuer of the stablecoin USDC, set up a new fund with BlackRock to help manage the stablecoin’s reserves.

Circle will place a portion of USDC reserves into the Circle Reserve Fund, a new money market vehicle managed by BlackRock Advisors. The portfolio will consist of cash and short-dated U.S. Treasuries, the company said. This new fund will only be open to Circle.

The company said it will use proceeds from maturing holdings to purchase new Treasuries by the fund, and it expects to be fully transitioned by the end of the first quarter of next year.

The new fund will be held in custody by Bank of New York Mellon, which already serves as the custodian for the Treasuries that currently make up the USDC reserve.

USDC reserves are currently $44.1 billion, which is split between $8.4 billion in cash and $35.7 billion in short-term Treasuries, according to Circle’s weekly reserve breakdown.

BlackRock’s relationship with Circle began when the world’s largest asset manager, with around $8 trillion under management, invested in the startup’s $400 million funding round and became a strategic partner to the crypto payments firm.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Immutable is rolling out a product on Ethereum that it says will help enforce the payment of creator royalties.

It will work as a community-governed whitelist and blacklist for smart contracts that honor royalty fees, according to a release. NFT creators will be able to use these lists to control the smart contracts which can transfer or receive NFTs from their collection, ensuring that users will only be able to trade through royalty-respecting contracts. 

The solution is already in use on ImmutableX, the company’s Ethereum-scaling Layer 2 NFT platform. The lists will be controlled by IMX token holders.

Immutable co-founder Robbie Ferguson has come out in support of NFT royalties even as major marketplaces began to make them optional. Buyers can now opt out of paying royalties on NFTs on almost all major marketplaces, the largest exception being market leader OpenSea.

In October, Ferguson said that NFT royalties on Immutable are guaranteed and that this was enforced at a protocol-wide level on any marketplace. 

“Our vision is an ecosystem where creators have a choice over their royalty model and level of enforceability, and users can vote with their feet when it comes to the projects they feel strike the best balance. Soft-enforced royalties only serve to punish users who are trying to support projects and massively reduce the confidence creators and game studios can have in their revenue streams,” Alex Connolly, co-founder and CTO of Immutable, said in today’s release. 

While creators will have to decide how strictly they want to enforce royalty payments, Immutable’s new tool takes the burden of enforcement from marketplaces — something the likes of Magic Eden have been pushing for. Previous proposed systems, such as Magic Eden’s own MetaShield product, have been able to identify NFTs that have bypassed royalty payment, but it’s been left up to a third party to take action. 

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

The developers of pNetwork, an independent cross-chain bridge protocol used to transfer assets across different chains, ethically took $4.3 million in pgala (pegged gala) tokens that it had issued to bridge users.

The “white hat” exploit was executed today as the team said it had discovered a “misconfiguration” in the token’s smart contract, according to on-chain analysis by security firm BlockSec, which informed The Block. The developers of pNetwork attempted to front-run any malicious hackers by “draining” pgala tokens locked in PancakeSwap pools. These tokens, issued by pNetwork itself, represent a 1:1 tokenized version of the gala tokens used in play-to-earn project Gala Games.

The tokens are issued whenever users bridge gala tokens from its original chain, Ethereum, to BNB Chain via pNetwork bridge. Anyone can use pNetwork to lock their assets, including gala tokens, as collateral in the bridge contract and mint tokenized gala, also known as pgala. 

The pgala tokens are maintained via smart contracts controlled by the pNetwork team, and can traded on decentralized exchanges on BNB Chain, including PancakeSwap. Today, the team said that it had discovered a misconfiguration that could allow anyone to steal from the pgala smart contract. Because of this, the contract had to be urgently patched and redeployed. “A misconfiguration of the pNetwork bridge necessitated the redeployment of pGala,” pNetwork said. 

It added that it had to drain the token in liquidity pools, performing the white hat attack to protect the value of gala tokens locked in the bridge contract before it could redeploy the token contract. To drain pgala liquidity on PancakeSwap, the pNetwork developers minted billions of pgala tokens out of thin air and swapped them to BNB tokens. The team was able to mint these tokens because it had the privileged access from the contract.

BlockSec said: “Our investigation shows that pNetwork had a privileged address and could mint the token. This address minted lots of tokens. As explained by pNetwork, the reason they minted and sold such a large number of pNetwork, is because they intentionally drained the pool to deploy a new pGala contract.”

On-chain data provided by security firm Beosin showed that an address, now believed to be pNetwork team, minted 55 billion gala tokens and swapped them for more than 12,976 BNB tokens worth about $4.3 million across multiple transactions.

PNetwork clarified that all gala tokens on Ethereum as well as the underlying bridge collateral were safe, adding that it plans to reimburse pgala and BNB to user addresses in proportion to their positions in the PancakeSwap pool, after taking a snapshot of their positions. 

Gala Games commented on the incident, saying its token was “not hacked, breached, or exploited in any way,” and pointed users to pNetwork’s posts on the white hat activity. Still, the incident caused turbulence in the gala token market. The token traded down 13% on the day, according to CoinGecko.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Crypto markets rose on Friday following a busy week in markets and a slew of crypto-related earnings. Bitcoin rose 1.8% and was trading at $20,610 at 7 a.m. ET, according to CoinGecko data. Meanwhile, ether was up 2.6% to $1,584. 

Altcoins led the charge as Ripple’s XRP shot up 8% over the past day. Meanwhile, Binance’s BNB rose 4.9%, while Cardano’s ADA and Solana’s SOL rose 2.8% and 2.5%, respectively.

Polygon’s MATIC shot above $1 over the past 24 hours — rising 14.6% to trade at $1.10. The token’s initial price increase appeared to be linked to its partnership with Instagram, announced on Wednesday.

The global crypto market cap rose by 1.8% to $1.07 trillion. 

Macro matters

Nonfarm payrolls — a measure of new jobs in the U.S. — for October will be released at 8:30 a.m. ET on Friday. Forecasts suggest nonfarm payrolls increased by 200,000, having risen by 263,000 in September. 

Attention then turns to U.S. inflation data, which will be out next Thursday. Inflation was hot in September, rising 0.4% month-on-month and 8.2% year-on-year. Additionally, Eurozone inflation hit a record high of 10.7% last week as central banks across the globe continue to grapple with rising prices.

Interest-rate hikes remain the weapon of choice when it comes to inflation, as evidenced by the Fed’s latest rate hike on Wednesday and Jerome Powell’s hawkish comments during the press conference afterward. 

Crypto earnings

Coinbase’s third-quarter earnings on Thursday showed expenses were falling. Total expenses fell to $1.1 billion from $1.8 billion in the previous quarter. However, the exchange also reported dwindling volumes of $159 billion — below estimates of $191 billion. 

Jack Dorsey’s Block Inc. reported earnings after the close last night. The firm had a net loss of $14.7 million in the third quarter, while bitcoin sales volume was $1.76 billion. Block’s bitcoin gross profit fell to $37 million during the quarter, down from $41 million in the second quarter. 

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

DeFi yield platform Texture has raised $5 million in a round co-led by P2P Capital and Sino Global, and is now live in private beta testing.

Other investors in the round include Wintermute, Semantic Ventures and Jane Street Capital. The funds were raised in the stablecoin USDC and the valuation was not disclosed.

Texture is a DeFi platform running on the Solana blockchain. Its first product provides higher yields to those looking to stake their SOL tokens. It is using a leveraged staking strategy to achieve this, similar to tokens on Ethereum like the Interest Compounding ETH Index (icETH) and the ETH Max Yield Index (ETHMAXY). 

“We are excited to bring automated leveraged staking to Solana through a one-click solution. This is a fundamentally DeFi-native product that appeals to users who value higher real yield as much as transparent on-chain execution and risk management,” said Texture Co-founder Oleg Ravnushkin.

The platform intends to offer a yield of up to 15% for those looking to stake their SOL.

Texture uses a few platforms to make this happen. It uses Lido Finance for the core liquid staking element. It uses Solend, which was hacked for $1.26 million on Nov. 2, for lending and borrowing, plus Orca for compounding the rewards.

Texture will open to the public once an audit has been completed, which may happen by the end of the year.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Boson Protocol launched a revamped version of its NFT platform that allows people to sell real items — in the form of nonfungible tokens — that can be burned and redeemed for the actual product within a certain time period, it announced at NFT.London.

The idea is that buyers can then trade, gift and transfer these NFTs without actually ever possessing the physical item — similar to a forward contract for a physical thing programmed within smart contracts. “Rather than tokenizing physical assets themselves, redeemable NFTs tokenize the right to receive a physical asset within a given time period,” Boson Protocol explained on its website.

The platform will be geared towards luxury goods.”We’ve got a number of projects where they’re tokenizing luxury wine and luxury whiskey,” explained co-founder Justin Banon. “Someone will get a redeemable NFT that they can hold or trade for five or 10 years while the whiskey matures,” he continued, adding that “those sort of items would create a commodities market for luxury whiskey.”

Banon also sees NFTs as a way to bundle together different products, including digital twins — real-life items that have a twin in the metaverse, such as a physical t-shirt that is also a metaverse wearable. “You could go to a football game and have the ticket, a redeemable shirt and a token that enables you to access a digital download of the game,” he provided as an example. “It’s a kind of solution for creating bundles of digital, physical and experiential things,” he added.

Promoters of redeemable NFTs argue that they have the potential to give more control to consumers. For example, if your one-year gym membership was an NFT and you decided you no longer wanted to use it, you could sell it to someone else who could use the remaining time left on it — rather than you being locked into a contract.

The downside is that this can lead to price increases. In August, BarrelDAO launched a collection of 333 NFTs redeemable for a limited edition 16-pack of Solana-themed beer. It quickly sold out. The original NFTs sold for 1.35 SOL (then $45) each, but the ones listed on Magic Eden had a floor price of 2.49 SOL (then $79.61).

For e-commerce, this creates an issue in cases where sellers don’t actually deliver a product. “Let’s say someone tokenizes a $1,000 pair of sneakers and then they go out and sell that token on an NFT website for $5,000,” Banon noted, explaining that “there’s a challenge here — if the seller doesn’t deliver, the second buyer has paid $5,000 for something, and there’s only $1,000 in the protocol that they will get back in the case of the thing not being delivered.” 

Boson Protocol has called its solution for this “sequential commit” — where, instead of the exchange of the redeemable NFT happening outside of the protocol, subsequent buyers will actually pay their money into the protocol. “The protocol will custody that money and, therefore, protect subsequent buyers from this kind of partial rug pool,” said Banon.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Episode 107 of Season 4 of The Scoop was recorded live with The Block’s Frank Chaparro and Abra Co-Founder & CEO, Bill Barhydt.

Listen below, and subscribe to The Scoop on Apple, Spotify, Google Podcasts, Stitcher or wherever you listen to podcasts. Email feedback and revision requests can be sent to podcast@theblockcrypto.com.

Full-service crypto platform Abra announced plans in September to establish the first fully regulated bank for digital assets in the U.S.

Abra Bank is expected to go live in early 2023 and it will enable U.S. citizens to deposit their digital assets in a U.S.-regulated manner similar to traditional banking.

In this episode of The Scoop, Abra Co-Founder and CEO Bill Barhydt explains the advantage crypto banks have over traditional banks and how Abra Bank will enable fully regulated, interest-bearing accounts in the U.S.

Whereas traditional banking services are available only during specific hours, Abra Bank will allow customers to interact with their assets at any point in time.

“We fundamentally believe in this mantra of ‘not your keys, not your crypto.’ The irony of that in running a bank is not lost on me, but the point is that we are 100% committed to saying, ‘Okay, if it’s your stuff and you want to move it to a Trezor or Ledger on Sunday at 2 a.m., please do it right now’” said Barhydt.

In addition to giving customers full control over their assets at any point in time, the fact that Abra Bank will be a U.S. state-charted institution means that it will be able to provide interest-bearing accounts. According to Barhydt,

“Abra Boost, which is going to be our new offering for paying interest going forward, will be for accredited users, and then the goal is to make it available to retail once the bank fully launches.”

During this episode, Chaparro and Barhydt also discuss:

• The SEC and crypto regulation;
• Macro headwinds and market liquidity;
• Why bitcoin could one day be an inflation hedge.

This episode is brought to you by our sponsors Tron, Ledn

About Tron
TRON is dedicated to accelerating the decentralization of the internet via blockchain technology and decentralized applications (dApps). Founded in September 2017 by H.E. Justin Sun, the TRON network has continued to deliver impressive achievements since MainNet launch in May 2018. July 2018 also marked the ecosystem integration of BitTorrent, a pioneer in decentralized web3 services boasting over 100 million monthly active users. The TRON network completed full decentralization in December 2021 and is now a community-governed DAO. | TRONDAO | Twitter | Discord |

About Ledn
Ledn was founded on the unshakeable conviction that digital assets have the power to democratize access to the global economy. We help you to experience the real life benefits of your Bitcoin without having to sell it. Start a savings account, take out a loan, or double your Bitcoin. For more information visit Ledn.io

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.