FreeCryptoCurrency.Me

Quick Take

• Several payment-card products are available in the cryptocurrency ecosystem, including credit cards, prepaid cards, and debit cards.
• Cryptocurrency companies use rewards as a key incentive to encourage customers to hold and spend their native tokens.
• Crypto-backed credit cards form a new avenue of innovation in the payment card sphere, allowing users to leverage their digital asset holdings as collateral for fiat currency loans.

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Two Sigma Securities, a quantitative liquidity provider and market-making firm, is now a Chainlink data provider.

Two Sigma is one of the largest market makers in the traditional financial markets, and its venture arm recently raised $400 million across two funds that will invest in crypto and DeFi. As part of the process, Two Sigma will contribute its proprietary data to Chainlink’s decentralized oracle networks (DONs) with the goal of expanding the use cases of on-chain smart contract applications.

Chainlink is the most widely used oracle network with over 690,000 active users and has enabled a total value of over $6.1 trillion in transactions (TVE), according to Dune Analytics.

“Deep quantitative expertise to produce highly accurate price data is foundational to the growth and long-term success of the DeFi ecosystem,” said Chainlink’s head of data products Yaser Jazouane.

© 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.

In the world of venture capital, an investor’s network is as good as her net-worth. 

Venture investor Bessemer is hoping that a decentralized network of scouts will help it spot the most innovative startups opportunities in the newfangled world of DeFi and Web3 consumer applications.

Founded in the early 20th century, Bessemer has backed firms like LinkedIn, Shopify, and Bumble, and has close to $20 billion in assets under management at the last count.

On Wednesday, the firm provided an update on the DAO’s scout program that adds a crypto twist to the traditional scouting setup — in which individual angel investors bring deals to larger, more established venture firms. 

Bessemer, which committed $250 million to crypto in March, set up a so-called decentralized autonomous organization, originally dubbed BessemerDAO, to form a community of investors that could share ideas and investment opportunities. The firm said the project is gradually becoming more decentralized, and will now begin assessing prospective deals sourced by a community of 100 scouts, who will commit capital to projects based on governance votes. 

Voting for winners

A majority vote from a committee of DAO leaders is required for a project to be granted funding, the firm said. Bessemer will invest $500,000 to bootstrap the initiative. 

The official vote can be viewed “on-chain” in addition to “broader decisions including: GC membership decisions (e.g., adding/removing members), launching new initiatives, incorporating new processes, etc.”

As part of its ongoing decentralization efforts, the firm is rebranding the DAO to SteelDAO, which “pays homage to Bessemer’s roots and embodies a new and separate brand identity as the community becomes further decentralized and evolves separate from our efforts at Bessemer Venture Partners.”

“The new name was selected by a committee of current DAO members and Bessemer’s community team,” the firm added. Those DAO members hold a non-fungible token that signifies their membership. 

Ethan Kurzweil, a partner at the firm, told The Block that a larger amount of the economic incentives circle back to the scout than in traditional venture schemes, adding that the model represents a potential way to “democratize access” to such deals and leverage “decentralized decision-making.”

Kurzweil thinks that the majority of deals backed by the DAO will be pre-seed stage, moon-shot bets. “Scouts have the inclination to go after change-the-world-ideas,” he said. 

Bessemer is targeting a wide-range of investment opportunities in its own right, including in consumer gaming and NFT marketplaces, decentralized finance, and smart contract and layer one infrastructure. 

Deal proposals and voting on such deals will all be made public on-chain through a partnership with Syndicate, a crypto startup that allows groups to track on-chain investments through a dashboard. 

“Steel DAO is an important step forward in the democratization of investing and transformation of venture capital,” said James Seely of Syndicate. “Community-driven investing models not only increase funding and reach, but also community-led participation, engagement, and support of early stage companies and entrepreneurs.”

Bessemer isn’t new to crypto, having previously backed crypto financial services firm NYDIG. It also has backed startups like Sorare and TRM Labs. 

© 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.

Cryptocurrency exchange Coinbase has hired Usman Naeem as its new head of global derivative sales and agency trading in London, according to a LinkedIn post. 

Naeem spent eight years at Goldman Sachs, most recently as an executive director in the equity derivates division in London. He also worked in the equity derivatives department of Bank of America Merrill Lynch. 

“I want to thank all my colleagues at Goldman Sachs; it has been a privilege to work alongside such talented and driven individuals from whom I have learnt so much,” Naeem wrote in the post. 

Naeem’s hiring demonstrates Coinbase’s push into institutional markets as he will work alongside Brett Tejpaul, Coinbase’s head of institutional, and Greg Tusar, Coinbase’s vice president of institutional products. 

Coinbase jumped into the crypto derivatives market earlier this year after it acquired FairX, a derivatives venue regulated by the Commodity Futures Trading Commission.

In September, Coinbase nano bitcoin and ether futures contracts hit a record amount with over 288,000 contracts traded that day. The exchange launched nano ether futures in August.

Naeem’s hiring is likely to strengthen Coinbase’s push into the derivatives markets. However, it still faces fierce competition from players such as FTX and CME Group, which trade billions of dollars in crypto futures. 

Coinbase declined to comment on the hiring. Naeem did not respond to a request for comment from The Block by the time of publication.

© 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.

Robert Miller, product lead and steward at Flashbots, has stated three ways in which the project is currently working to reduce its influence in the MEV market, which could serve to make Ethereum more decentralized and censorship-resistant.

Flashbots is a service that provides suggested blocks for validators to process, ones that will give them extra rewards. It has become very dominant in the block production process since it consistently offers blocks with the highest rewards. Yet it is by default censoring all transactions related to Tornado Cash, causing widespread concerns among the Ethereum community.

“We hear you all that having more & more blocks go through our centralized pipes today is problematic,” said Miller on Twitter. “So, what can we do on top of what we’ve been doing so far?”

According to Miller, Flashbots is exploring ways to reduce its dominance. For one, the project recently open-sourced its relay source code. Now, Miller says the project will open source more of its knowledge base and infrastructure in the coming weeks.

The Flashbots steward also said that the project will submit blocks from its builders to other relays. This is to help those relays bootstrap their own adoption. In Ethereum, block producers build and propose blocks to the network that are then validated by validators. MEV relay services like Flashbots help validators extract the maximum value from these blocks.

The third action plan stated by Miller is the creation of a relay monitor. Miller stated that Flasbots will issue a grant for the development of such a service. Users will be able to evaluate and monitor the performance of the available relays in the MEV market using the monitoring service.

“These 3 things should accelerate the on-going maturation of the market as more relays and builders come to market and compete for market share,” Miller stated.

In the long term, Miller said that the platform is working towards a decentralized solution. It’s possible this could be free of the constraints that Flashbots faces today.

“We believe that a decentralized block building network is existential to the mass adoption of Ethereum and other technologies building towards the same vision,” he said.

What are the key problems?

These assurances are coming at a time when Flashbots is dominating the block building process post-Merge having become popular among validators.

At the time of The Merge, 12% of all Ethereum blocks were using Flashbots. Now, this value has gone up to 40%, raising censorship concerns as Flashbots has been censoring Tornado Cash-related transactions after the US Treasury sanctioned the crypto mixer.

Critics say Flashbot’s dominance of the MEV and block production market could threaten Ethereum’s base layer neutrality. This refers to the condition where blockchain infrastructure participants such as relays, block producers, and validators, among others do not censor transactions. This follows a similar principle to the way core infrastructure participants of the Internet like ISPs, routers, email programs, and network switches among others, are supposed to abide by the principle of net neutrality.

What is MEV?

MEV stands for maximal extractable value. It is a special fee that block producers can charge to order transactions in a certain way that will be beneficial to the user. This special fee is a premium on top of the usual network transaction fee and boosts profits for validators that run the network.

Flashbots is a service that provides MEV solutions for Flashbots. It offers a service called MEV-Boost for more transparent value extraction from blocks and has become the dominant player in the Ethereum MEV market.

© 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.

National representatives in the European Council made preliminary strides to regulate crypto in the region, as they voted through the European Union’s Markets in Crypto-Assets (MiCA) regulation on Wednesday.

MiCA sets out to bring the issuance of cryptocurrencies under the wing of institutional regulation, and establishes a first-time regime for crypto-asset service providers across the EU’s member states. 

The next step towards formal adoption of the legislation comes on Oct. 10, when the European Parliament’s economic affairs committee will also vote on the proposal.

Then, after translating the text into the EU’s more than 20 official languages, the file is projected to be adopted into the EU’s Official Journal to formalize its enforcement. MiCA includes a 12-18 month adaptation period to prepare for the new laws set in place. We can expect the laws to be in place at the start of 2024 at the earliest.

While the regulation is generally welcomed by the industry for harmonizing an otherwise fragmented legislative landscape on the continent, concerns were raised on the limitations set on non-euro denominated stablecoins.

While the harsh measures were removed, they swiftly made their way back into the legislation last Wednesday in a last-minute move by French officials who were worried for the euro’s sovereignty. 

The European institutions reached a political agreement on MiCA back in June, and over the summer they negotiated the technical details of the regulation. Once MiCA reached the EU’s official journal early next year, further details on how to implement the rules for crypto-asset service providers will be ironed out by the European supervisory bodies.

© 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.

Polkadot’s DeFi-focused parachain Acala announced on Wednesday that it has fully reopened its services to users three weeks after a major security incident. This comes after its governance body approved the third and final vote to do so.

“The community referendum for stage 3/3 of resuming Acala operations has been executed. All functionalities on Acala are now live,” the project tweeted.

Acala works as an app-specific parachain that aims to be a finance hub on Polkadot. It offers a native decentralized stablecoin called Acala USD (aUSD) that can be minted using collateral tokens — including polkadot (DOT), kusama (KSM), acala (ACA) and karura (KAR) — and then be staked for yield.

On 13 August, Acala suffered a security exploit as a result of a code misconfiguration in a smart contract that controlled a  liquidity pool. The misconfiguration led liquidity providers (LPs) to “error mint” nearly 3 billion of aUSD when they withdrew their assets. The LPs then repeatedly added more liquidity to receive more aUSD in a loop. In total, about 300 addresses had illegitimately taken out 3.02 billion aUSD in their wallets. Only a a small portion was transferred out to other parachains. The incident resulted in aUSD losing its peg with the US dollar.

After this was detected, the team quickly suspended the network through an emergency governance vote. Subsequently, the team froze the large majority of exploited funds traced on the Acala network and burned them. 

Following the token burn, it planned a phased approach to resuming the operations with each phase getting approved with a governance vote. In the first phase, the Acala governance body voted to turn on the network on Sept. 26 in the initial phase, letting users manage or close their positions while advanced services like oracles, and collateralized lending remained shut. These services have now been turned on in an effort to bring the DeFi chain back to pre-exploit state.

The team told The Block that all of the 10.9 million aUSD stablecoin in present circulating supply across user wallets and Acala’s liquidity pools remain fully backed 1:1 by crypto assets. It added all of the aUSD error mints were recovered in value except 5.8 million. This amount has been re-collateralized by the team using its own funds.

“A series of community governance votes have been passed, such that all liquidity pools are now re-capitalized and rebalanced, and all aUSD in circulation are now fully collateralized,” Bette Chen, co-founder of Acala told The Block in a statement.

Despite this, the aUSD stablecoin currently trades at just $0.96, according to Karura Swap via 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.

In the latest institutional play in crypto, digital asset exchange EDX Markets (EDXM), announced today it will work with Paxos as its custodian. 

Paxos is regulated by the New York Department of Financial Services and will hold all EDXM customer assets in a bankruptcy-remote trust, in fully segregated U.S. accounts, it said in a release.

The exchange, which is backed Citadel Securities, Charles Schwab and Fidelity Investments, plans to launch towards the end of the year, the firm’s CEO Jamil Nazarali told The Block in an interview. Compliance and security are key differentiators of EDXM’s offering, Nazarali added. 

MEMX is a market operator founded in 2019, it will provide the technology infrastructure for EDXM. MEMX was founded by Bank of America Merrill Lynch, Charles Schwab and Citadel Securities, among others — Nazarali was involved in the founding in his role as global head of business development. 

“Paxos’ best-in-class solutions along with MEMX’s technology powering the exchange, EDXM now has all the tools to make institutional-grade digital asset trading available to investors for the first time,” he told The Block.  

Paxos solution enables the movement of all assets at any time in a trustworthy way, said Paxos’ Head of Strategy, Walter Hessert. “Together with EDXM, we are creating an easy path for banks and other financial institutions to access crypto markets in the most regulated way available,” he concluded.

Paradigm, Sequoia Capital and Virtu Financial are also part of the consortium backing EDXM, and it’s anticipated additional market participants will partner with the exchange over time. 

© 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.

DeBridge, a cross-chain bridging platform that pioneered the popular “locked liquidity” bridging model, has announced deSwap Liquidity Network (DLN), which aims to make cross-chain transfers and applications more secure by no longer locking assets.

DLN is expected to go live by November, and currently has integrations with Ethereum, Arbitrum, Solana, Avalanche, and Optimism, among others.

DeBridge claims that DLN will enable zero slippage transfers of any size and that it will have the lowest fees across all bridges. It also claims that DLN transferring liquidity instead of locking it avoids the risk of Maximum Extractable Value, Automated Market Maker (AMM) fees for wrapped assets, and the creation of honeypots from hackers.

DLN differs from the current popular bridging model in which users lock a token and receive a wrapped asset. This has been one of the largest bridge vulnerabilities exploited this past year. Instead, DLN transfers the liquidity between chains, which removes the need to lock assets.

© 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.

Investing and banking app Stash has announced that customers will be able to buy eight of the largest and most established cryptocurrencies through a separate crypto account. 

Powering the investments, which will include bitcoin and ether, will be infrastructure provider Apex Crypto, according to a release. 

Founded in 2015, Stash is a fintech unicorn that offers banking and investing services through its digital platform. The startup most recently raised $125 million in a Series G funding round, bringing its total funding to $427 million, according to Crunchbase.  

Stash’s backers include T. Rowe Price, Eldridge and Union Square Ventures. 

“Stashers are intrigued by crypto and we are here to help them as a trusted partner,” said Brandon Krieg, co-founder and CEO of Stash, in the release.  

This is Stash’s second push into crypto. The first occurred earlier this year when the startup introduced crypto exposure in its fully-managed Smart Portfolio accounts.  

It’s also rolling out a new crypto calculator that aims to help customers build balanced portfolios. They will receive in-app alerts if the portfolio has too much crypto exposure relative to their risk profile, the company said. 

Doug Feldman, Stash’s chief investment officer, told TechCrunch that customers won’t be able to store their own crypto in a wallet. However, he didn’t rule out a crypto wallet launch in the future. 

Stash has more than 2 million active customers and nearly $3 billion in assets under management, according to the release. Total customers are down roughly 60% compared to the five million outlined in January 2021 while AUM is up by around 20%.

© 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.