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Balancer Labs is offering a 1,000 ETH — or about $2 million — bounty prize to anyone that finds vulnerabilities in version 2 of its decentralized finance protocol.

The outsized bug bounty is meant to incentivize “ethical” or white hat hackers to look for and report any issues in Balancer V2, the next iteration of the automated portfolio manager and liquidity provider.

Per the company’s website, vulnerabilities are set on a scale from “critical” to “low” with critical severity reports receiving 1000 ETH and low severity reports receiving 5 ETH. 

Some examples of critical vulnerabilities include draining or permanently locking significant funds in Vault, while less significant vulnerabilities include minor rounding errors that enable an attacker to “manipulate balances to their advantage.”

“Apart from being the largest on record, our bug bounty is innovative in that it scales as ETH goes up, in correlation with the broad crypto market and likely with the total value locked in Balancer protocol,” said Balancer Labs CEO Fernando Martinelli. “The more there is at stake, the higher we believe our bug bounty rewards should be. The bug bounty program empowers everyone in the developer community to help us build a better Balancer.”

As The Block previously reported, many DeFi projects have made use of such bounty programs to ensure their platforms are secure and regulated. Using third-party hackers is a way for projects to show their users that they are prioritizing the security of their funds. 

© 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.

First Foundation, the publicly traded company that counts a bank and a financial advisory firm among its subsidiaries, has made a strategic investment in NYDIG.

First Foundation will also work with the investment firm to provide its clients with bitcoin-related products. 

First Financial did not disclose the size of the strategic investment in NYDIG in its announcement, but it does open the door to considerable collaboration. The partnership will use NYDIG’s services and connections to integrate bitcoin services into its existing offerings, according to an announcement from First Foundation.

First Foundation is already working with core processing provider Fiserv to “integrate Bitcoin into its existing banking environment.” Fiserv will integrate NYDIG into the bank’s platform, allowing customers to buy, sell and hold the digital asset. 

NYDIG has been on a fundraising spree this year, securing more than $300 million since the start of 2021 with this new investment from First Financial.

In March, it secured $200 million from Morgan Stanley and New York Life, among others. A month later, NYDIG raised another $100 million from strategic partners like Liberty Mutual Insurance and Starr Insurance. 

© 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.

Tech giant IBM and global patent marketplace IPwe plan to turn patents into non-fungible tokens (NFTs).

Announcing the news on Tuesday, the two companies said NFTs would make patents more easily saleable, tradeable and monetizable, and bring liquidity to this asset class.

“Think of an NFT as a certificate of title,” IPwe CEO Erich Spangenberg told The Block. “The people that interact with the NFT for a particular patent will be comfortable that it exists and who owns it.”

If the owner wants to sell or fractionalize ownership of the NFT, they could do so, said Spangenberg.

NFTs will be stored on IPwe’s platform, which is powered by IBM Blockchain.

IPwe will begin trials of their patent NFTs in Q2 of this year. The tests will focus on both large as well as small and medium enterprises, Spangenberg told The Block.

IBM intends to be a participant in the trials “alongside other large corporate patent holders,” the company’s general manager of global strategic partnership, Jason Kelley, told The Block.

“IPwe’s platform and NFTs are definitely of interest to IBM,” said Kelley.

IBM and IPwe have worked together for the last three years. IPwe’s offerings are powered by IBM’s blockchain, artificial intelligence, and cloud technologies.

© 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.

Three ether (ETH) exchange-traded funds (ETFs) began trading on the Toronto Stock Exchange on Tuesday.

The ETFs are by Canada-based asset managers: Purpose Investments, CI Global Asset Management, and Evolve Funds Group.

The three firms received the green light from the Ontario Securities Commission last week.

The move follows shortly after the regulator approved the world’s first bitcoin ETFs by the three firms earlier this year.

All three ETFs — the Purpose Ether ETF, the CI Galaxy Ethereum ETF, and the Evolve Ether ETH — provide exposure to the price of Ethereum’s native ETH without the need to possess it.

CI and Evolve have waived off management fees until June 15 and May 31, respectively. The former charges 0.40% and the latter charges 0.75% of net asset value, or NAV.

Purpose, on the other hand, charges a 1% management fee and has already accumulated C$12 million ($9.5 million) worth of assets for the ETH ETF, according to its website.

Evolve has gathered around $2 million in assets under management (AUM) for its ETH ETF. CI’s AUM information isn’t available on its website yet.

All three firms also operate bitcoin ETFs. Meanwhile, in the U.S., a number of companies have filed applications for bitcoin ETFs or refiled previous ones with the Securities and Exchange Commission. Several of those submissions are now under active consideration by the agency.

© 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

• Visa recently became the first major payments network to use a stablecoin to settle a transaction.
• Now it has its sights set on facilitating central bank digital currency payments.
• The Block sat down with Cuy Sheffield, Visa’s head of crypto, to discuss the firm’s vision for CBDCs.

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this Daily feature on The Block.

In an April 16 speech before Texas A&M’s Bitcoin Conference, commissioner Dawn Stump outlined a number of often-overlooked limits to the Commodity Futures Trading Commission’s purview.

The CFTC, as its name suggests, regulates commodity futures markets, not spot markets, Stump reminded the audience. The commission can bring enforcement against certain criminal conduct in spot markets for commodities, but it actively keeps tabs on futures markets for commodities and certain securities.

As Stump said:

“I often worry that the CFTC’s exercise of that authority may leave the public with the impression that we are the frontline regulator of cash digital asset markets. This is simply not the case, nor in my opinion is this what the CFTC is best tasked to do.”

Referencing CFTC enforcement actions against Derivibit, BitMEX and TeraExchange, Stump denied that the commission had been targeting crypto in particular:

“As for enforcement activities related to bitcoin (and other digital assets), the CFTC has taken actions against unregistered derivatives exchanges, and registered derivatives exchanges that have violated requirements imposed on them by the CEA and CFTC regulations. These are the same types of actions the CFTC would take against exchanges offering derivatives involving any other commodity.”

In keeping with the overall reminder of the CFTC’s limits, Stump told the audience that she was also waiting for a resolution to SEC v. Ripple, which will have major ramifications for which cryptocurrencies end up in the regulatory purviews of which agencies.

In her words: “I am watching the outcome of this case closely because it will help to establish the scope of the SEC’s authority in the digital assets space.”

© 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.

An array of crypto industry investors led by a16z has backed the $28 million funding round for Aleo, a platform designed to support decentralized, private applications.

The project is aimed at making it easier for developers to create applications that employ blockchain tech and zero-knowledge cryptography, the latter of which effectively enables one party to prove to another that they possess certain, private information without actually having to reveal it. Zero-knowledge cryptography has been applied to varying areas in the crypto sphere, including privacy-focused blockchain networks. 

Aleo’s platform “offers a full-stack solution for zero-knowledge, making ZK programmable at every level of the application stack for real-world use to enable decentralized private computing at scale,” the startup said Tuesday.

“Aleo’s platform provides end-to-end tools that enable the development, deployment, and sustainability of privacy-preserving applications. With Aleo, applications and user interactions are private-by-default,” the firm said in its announcement.

As noted by The Block’s John Dantoni in a February breakdown of its crypto investment portfolio, a16z already has stakes in several privacy-oriented projects. These include Oasis Labs, Keep and Orchid.

“We are thrilled to support the stellar team behind Aleo as they bring private programmable applications to the wider market,” Kathryn Haun, a general partner at a16z, said in a statement. “Privacy-preserving applications allow users to navigate digital interactions without bias, which coupled with blockchain technology, will create new opportunities for value creation.”

Other investors in the Aleo round include Placeholder, Coinbase Ventures, Galaxy Digital, Polychain Capital, Scalar Capital, Slow Ventures, Variant Capital, Balaji Srinivasan and Ethereal Ventures, among others. 

© 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.

Decentralized derivatives exchange Injective Protocol has raised $10 million in a new funding round.

Several investors, including billionaire entrepreneur Mark Cuban, Pantera Capital, BlockTower, Hashed Ventures, CMS Holdings, and QCP Capital, participated in the round.

“This was a private placement token sale,” Mirza Uddin of Injective Protocol told The Block. “We sold tokens with a lockup period at a $1 billion+ valuation.”

The lockup period is one year, said Uddin.

Injective Protocol’s native token INJ is already live and trading, but new tokens were issued to the investors from the protocol’s treasury, Uddin told The Block. “It’s difficult to buy in the market because the size is quite large,” he said.

With fresh capital at hand, Injective looks to enhance its platform and double its current team of 22 by next year, Uddin told The Block.

“In addition, we are setting up an internal proprietary trading desk to help provide liquidity to our exchange,” he said. “In that effort, we have recruited a head trader from Tower Research and are quickly ramping up that internal desk.”

Injective Protocol was launched last December and is built on Tendermint, a Layer-2 scaling solution. The protocol allows users to trade crypto, stocks, forex, crypto, non-fungible tokens, as well as synthetic assets.

The private token round brings Injective Protocol’s total funding to date to over $17 million. The protocol has previously raised $7.1 million, according to Crunchbase.

© 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.

© 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.

J. Christopher Giancarlo, the former Commodity Futures Trading Commission chairman who left office in 2019, is joining the board of directors of BlockFi.

BlockFi is a crypto neobank that allows users to earn interest on deposited crypto funds, which BlockFi lends out to institutions to use for arbitrage. Effectively, the firm provides high-interest savings accounts.

In Tuesday’s announcement, BlockFi said in a statement: “Giancarlo will provide valuable guidance to the company’s leadership on strategic matters, namely blockchain innovation, regulatory developments and growth initiatives.”

“As the adoption of digital assets accelerates, it is critical for the financial industry to consider how to adapt and integrate these innovations in a way that best serves investors and the broader economy,” Giancarlo said in a statement.

During his tenure at the CFTC, Giancarlo earned the nickname “CryptoDad” for his support for the growing industry. These activities included the launch of the commission’s fintech unit, LabCFTC. Since leaving, that reputation has only grown based on his work with the Digital Dollar Project, through which he has advanced the concept of a digitized version of the U.S. dollar. 

© 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.