FreeCryptoCurrency.Me

Decentralized finance (DeFi) company Balancer Labs has launched Balancer V2, the second version of its automated market-making protocol.

Balancer V2, which has been in the works for over a year, features a new user interface, lower gas costs, and an updated community multisig, among other updates.

According to the Balancer Labs team, the platform’s new branding on its website as well as its front-end interface is meant to be more “welcoming” and “accessible to a broader audience as DeFi goes mainstream.”

“The vibrant geometrical shapes and gradients represent the flexibility of the Balancer Protocol and our use of math as a force for good. Handcrafted textures help keep things playful and cheerful,” Balancer Labs CEO Fernando Martinelli told The Block. “We decided to refresh the brand now to better reflect our values and customer promises of being flexible, efficient, and secure. A clean and simple user interface was one thing that was missing in earlier iterations of Balancer and this updated experience makes it much simpler for traders and LPs to use the platform.” 

In terms of backend operations, the team says trades will be routed through the most efficient protocol. They said Balancer v1 will provide the best price until enough liquidity has migrated to V2. At this point, the team says it expects trades to be routed through V2’s Protocol Vault, lowering gas costs and improving prices for users. The team said it anticipates this liquidity migration to start in late May or early June and last for a couple of months. 

According to Martinelli, one of the biggest challenges the team faced while developing Balancer V2 was making the decision to have a single vault hold all assets from all pools. 

“The single vault is one of the reasons why Balancer V2 offers lower gas costs and is easier to use, however, some may say there is more intrinsic risk to having funds in a single smart contract. Security is our number one priority, so we had many discussions on this point,” Martinelli told The Block. “Throughout the design process, we discussed every trade-off in-depth to ensure security at every step.”

In late April, Balancer Labs announced it would offer “ethical” or white hat hackers over $2 million to report any bugs in version 2.0 of its platform. Martinelli said at this time, no bugs have been reported through the bug bounty program. 

Over the next few weeks, the team behind the automated portfolio manager says it plans to share more updates on liquidity migration, BAL liquidity mining, and V2 governance. 

© 2021 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 Association for Digital Asset Markets (ADAM) has hired a former Treasury Official as its head of policy.

Robert Baldwin previously worked in the Office of Domestic Finance and Office of Terrorism and Financial Intelligence before moving to the trade association. At the Treasury, Baldwin oversaw policy development from the Financial Crimes Enforcement Network (FinCEN) and the Office of Foreign Assets Control (OFAC), which report to the office. Prior to the Treasury, Baldwin worked at the Central Intelligence Agency analyzing technological and economic developments throughout the world. On certain rotations, he briefed the president and the U.S. Trade Representative. 

In his latest role at the Treasury, Baldwin was more entrenched in digital asset policy. As an advisor, he worked with FinCEN on its crypto wallet proposal. He also had a hand in the President’s Working Group statement on stablecoins.  

At ADAM, Baldwin will “help execute ADAM’s strategic initiatives” and “engage in policymaking activities,” according to the announcement. His work will help further develop the best practices ADAM has crafted, since the association is committed to primarily being a standards-setting body, according to its CEO Michelle Bond. In the long term, ADAM is aiming to become a self-regulatory organization (SRO).

“Working with our members, I am confident we will develop best practices and policies that facilitate fair, orderly, and efficient digital asset markets,” Bond said in a statement.

© 2021 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.

On May 13, dTrade announced the closing of its seed funding round, which saw $6.4 million in investment from Three Arrows, DeFiance, Huobi and Polychain. 

DTrade aims to be the first derivatives exchange built on Polkadot. A press release shared with The Block said that it enables leveraged derivatives that settle on-chain. The goal is to remove custodial and counterparty risks from such trading.

DTrade co-founder Nikodem Grzesiak told The Block that many of the main contracts are going through audits ahead of a launch date in June. He said the second version of the perpetual swap exchange is now live on the Edgeware testnet, with a public testnet scheduled to go live in a few months.

The current team consists of 11 full-time employees. According to Grzesiak, dTrade’s native DET token will go live in June. He said that “55% of the tokens will be split between community treasury and liquidity mining incentives. The remaining 45% are for investors, team and advisors.”

Polychain led an earlier pre-seed funding round into DTrade that ended in March. It did not disclose the investment amount.

Polkadot-based DeFi projects have grown in stature in recent months, alongside rising buzz around the “multichain” alternative to Ethereum. Equilibrium, for example, saw a $2.5 million Series A at the beginning of April. 

DTrade will not be available in the U.S., whose regulators do not look kindly upon leveraged derivatives trading for retail investors. 

© 2021 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 Grayscale Bitcoin Trust (GBTC) product, which has been consistently trading at a discount for almost three months, hit a new record low on Tuesday.

GBTC’s discount hit -20.48% — its lowest point in history, according to data compiled by The Block. The discount means the market price of GBTC shares is over 20% lower than its net asset value or NAV.

GBTC first started trading at a discount in late February. As The Block reported, there are several factors behind the GBTC’s fall, including new competitive products in the market, such as Canadian bitcoin exchange-traded funds (ETFs).

The consistent GBTC discount recently led investment management firm Marlton, which holds a considerable amount of GBTC shares, to write an open letter to Grayscale. Marlton asked Grayscale to conduct a tender offer of its shares since the discount has caused heavy losses for stakeholders.

DCG is buying large amounts of GBTC shares

Earlier this month, Grayscale’s parent company, Digital Capital Group, announced plans to buy an additional $500 million worth of GBTC shares, taking its total limit to up to $750 million. As of April 30, the group has purchased $193.5 million worth of GBTC shares.

Market experts recently told The Block that converting GBTC into a bitcoin ETF could be the best solution for Grayscale. The firm recently said that it is “100% committed” to turning GBTC into a bitcoin ETF, but the firm’s CEO Michael Sonnenshein said the regulatory environment in the U.S. still isn’t ready.

U.S. regulators have yet to approve a bitcoin ETF in the country. The Securities and Exchange Commission recently delayed a determination on a proposed bitcoin ETF from VanEck.

In separate news, Grayscale announced Thursday that it voluntarily filed for Form 10 with the SEC for its Grayscale Digital Large Cap Fund (GLDC) product. If effective, it would designate GDLC as Grayscale’s third crypto investment product to become an SEC reporting company, following GBTC and Grayscale Ether Trust in the U.S.

© 2021 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.

On May 12, seven members of the U.S. Congress sent a letter urging the Financial Accounting Standards Board to establish clearer guidance on digital assets. 

The letter says that “lack of thoughtful and carefully developed authoritative guidance from the FASB threatens the ability to create accurate and consistent financial reporting of a large and fast-growing
financial asset class.” It presents four different accounting categories as suitable for a company’s holdings of digital assets, depending on the manner of usage: cash and cash equivalents, financial instruments, intangibles and inventory. 

A non-profit, the FASB is nonetheless the recognized leading force in establishing standards for publicly traded companies. In presenting the need for the FASB to step in, the letter points to the growth of Bitcoin on the balance sheets of firms like MicroStrategy and Grayscale.

The letter came from the office of Tom Emmer, who leads the Congressional Blockchain Caucus. The signatories were six other members of the caucus, including lawmakers like Darren Soto and Warren Davidson. 

A spokesperson for Congressman Emmer told The Block that the Blockchain Caucus was in the process of preparing a new series of educational briefings for lawmakers and their staff “to learn more about what they’re reading in the news, whether that’s NFTs or how blockchain could be used to achieve settlements in trading.”

© 2021 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.

Point72, the hedge fund founded by billionaire Steve Cohen, is set to make a sizable entrance into the crypto market, according to several people familiar with the firm’s business. 

Point72 — which managed as much as $17 billion as recently as July 2020 — is said to be taking a very holistic approach to the $2 trillion crypto market, investing from both its venture capital arm, Point72 Ventures, and deploying long/short strategies on the hedge fund side. The fund is among several large investment firms currently eyeing the market. 

Millennium, a $40 billion fund, has been dabbling in the crypto market via exposure from Grayscale’s Bitcoin Trust, according to TheStreet. Ray Dalio’s Bridgewater, meanwhile, has warmed up to the market, although it has not publicly made any sort of allocation on behalf of its clients. 

As for Point72, the firm is poised to “get big in crypto,” according to one source who spoke with Cohen. Another source corroborated that view, noting the firm is trying to bring on the right talent. 

Outside of the crypto market, Point72 raised $1.5 billion after suffering losses from its stake in Melvin Capital, which found itself on the losing end of the surge in GameStop. At the time, Business Insider reported the new capital would help the firm “take advantage of new opportunities in the market.”

© 2021 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.

Stablecoin issuer Tether, for the first time since its launch in 2014, has revealed a breakdown of its reserves.

The breakdown, shared with The Block on Thursday, is dated as of March 31, 2021. It shows that Tether held nearly 76% of its reserves in cash and cash equivalents and other short-term deposits and commercial paper.

Commercial paper, in fact, formed the majority of its cash and cash equivalents category, with a 65% share. Fiduciary deposits formed 24% of the category, reverse repo notes 3.60%, treasury bills about 3%, and actual cash only 3.87%.

When asked why actual cash formed only a tiny part of the total reserves, Tether’s general counsel Stuart Hoegner told The Block that it is “misleading to focus exclusively on cash” within the cash and cash equivalents category. “Readers should not confuse items not in ‘actual cash’ with a lack of liquidity,” he said.

As for commercial paper details, Hoegner declined to share the names of counterparties “in line with standard commercial practice.”

The other 25% of the reserves

The rest of the reserves were divided across three categories: Secured loans — of which none is to affiliated entities — forming 12.55% of the total reserves; corporate bonds, funds, and precious metals forming nearly 10% and other investments, including digital tokens, comprising 1.64%.

The secured loans are issued by Tether, Hoegner told The Block. As for the bonds, funds, and precious metals category, he declined to share further details, and as for digital tokens, Hoegner said that refers exclusively to bitcoin.

“We have seen BTC become an important component of the balance sheets of several large corporations in both the public and private markets. This serves to diversify risk,” Hoegner told The Block. “Tether’s use of BTC and other forms of investment is in line with this practice.”

Tether’s market cap as of March 31 was $42.35 billion, according to data compiled by The Block.

Tether’s path to transparency

When Tether launched, it originally claimed each tether (USDT) was backed 1:1 with US dollars. In March 2019, it updated its website to state that “all Tether tokens are backed 100% by Tether’s reserves.” It later created a transparency page outlining the company’s assets and liabilities measured in three currencies and gold. But until now, it had not given a detailed breakdown of these reserves.

The breakdown of Tether’s reserves comes nearly three months after the company settled with the New York Attorney General’s office with an $18.5 million fine.

“Tether proposed ongoing publication of the reserve breakdown as part of our settlement agreement with the New York Attorney General’s Office, and we committed to make that information available to both the Attorney General’s office and the public,” said Hoegner. “Today’s publication reflects our ongoing dedication to transparency and setting the standard in our industry.”

Tether’s usage has surged in recent months. Its current market capitalization stands at nearly $58 billion, according to data compiled by The Block.

Last week, Tether’s adjusted on-chain volume surpassed the $1 trillion mark on a yearly basis for the first time. On-chain transaction volume is any value transfer within a blockchain network, including buys, sells, and remittances.

© 2021 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

• Appreciating DeFi’s first internet owned non-custodial credit facility: MakerDAO
• Maker is currently running north of $150 million in annualized 30-day protocol revenue (<$10 million a year ago), with nearly $5B in outstanding credit (DAI supply – +4,000% Y/Y) 

This research piece is available to
members of The Block Genesis.
You can continue reading
this Genesis research on The Block.

Crypto exchange Huobi has regrouped its investment arms into Huobi Ventures, with $100 million as starting capital.

The exchange group said in an announcement on Thursday that it has consolidated Huobi Eco Fund, Huobi Capital and Huobi DeFi Labs into one that is spearheaded by its new chief financial officer Zhang Li, who joined the firm last August.

Zhang was a former vice president at Bitcoin mining company Canaan. He was responsible for its finances and led the manufacturer’s initial public offering in the U.S.

Huobi said the new venture arm will initially allocate $100 million into early-stage blockchain and decentralized finance (DeFi) projects throughout the next three years, in addition to making mergers and acquisitions. It’s also establishing a $10 million fund that will focus on the non-fungible token (NFT) ecosystem.

Zhang said, in an interview with The Block, that although the $100 million proprietary capital will be a starting point, the allocation can be increased by up to 10 times if needed. She didn’t disclose any specific M&A deals that are in Huobi’s pipeline but said her focus will be on any upstream or downstream services that could diversify Huobi’s exchange offerings. 

The firm said to date it has invested $69.42 million on blockchain projects and media outlets with a return on its balance sheet of about $215 million.

Last month, Huobi Asset Management, a subsidiary of publicly traded Huobi Technology, launched passive bitcoin and ether funds for institutional investors in Hong Kong, which it said has already received $50 million in commitments. 

Huobi Technology is tied to the Huobi exchange group via common ownership of Huobi’s founder Li Lin but they operate independently. Zhang didn’t rule out the potential of restructuring Huobi Group’s exchange assets into the Hong Kong-based, publicly listed firm.

“Anything is possible but it depends on a right timing and the compliance environment,” Zhang said. “I’m not saying we definitely will restructure the exchange to the public firm but also not that we will never do it in the future.”

© 2021 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.

Bitcoin’s mining difficulty, a measure of the network’s security and how hard it is to compete for block rewards, is poised to adjust to a new high.

The average bitcoin block production interval since the last adjustment on May 2 is around 8.25 minutes, which is more than 17% faster than the intended 10-minute-per-block interval.

Bitcoin’s mining difficulty is designed to adjust itself every 2,016 blocks based on the average block production intervals throughout the period, which typically lasts for 14 days.

If the average interval is shorter than 10 minutes, which means more hash rate during the period has been plugged in, the network will increase the difficulty in reaction to the rising level of competition on the network. Similarly, if the average block interval is longer than 10 minutes, the network difficulty will fall. 

Data sources from BTC.com and Poolin currently estimate that the upcoming difficulty epoch is about to jump by over 20%, which is due at block height 683,424, or around 10:00 UTC time on Thursday. 

The last time a single bitcoin mining difficulty adjustment above 20% took place in October 2017. The expected largest difficulty jump in 42 months comes after a speedy recovery of the network’s hash rate from recent incidents in China’s Xinjiang province.

Security accidents at several coal mines in China’s northeastern region took place in mid-April, causing power plants in Xinjiang to shut down electricity supplies to data centers in the region. As a result, most of the bitcoin mining facilities in the area shut down for about a week before gradually returning to life on April 22. That was also a primary factor behind the bitcoin mining difficulty’s 12% decline posted on May 2. 

Further, newly shipped mining equipment from major Chinese manufacturers is hitting the market and coming online as well.

Overall, the average bitcoin hash rate between May 2 and Thursday was around 178 exahashes per second (EH/s), which has increased by 6% in comparison to the previous average high of 168 EH/s recorded between April 2 and 16.

That means, on average, around 10 EH/s of computing power from newly delivered machines have been connected to the network over the past month. That amount of hashing power is equal to roughly 100,000 units of the newest generation of bitcoin mining hardware.

Screenshot of BTC.com

© 2021 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.