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Decentralized exchange protocol Kyber Network has launched a dynamic market-making (DMM) protocol, which it says is designed to be more capital efficient than its automated market-making (AMM) protocol.

Kyber DMM is also expected to optimize fees and maximize earnings for liquidity providers, Kyber Network announced Monday. That is because of the DMM’s two new features — “dynamic fees” and “programmable pricing curve.”

With the programmable pricing curve, Kyber DMM allows a liquidity provider to customize the price curve for any token pair with a “specific amplification factor (AMP),” Kyber Network CTO Victor Tran told The Block.

“This AMP will virtually amplify the token balance in the pool whenever tokens are added,” said Tran. “This means that given the same liquidity pool and trade size, Kyber DMM can provide much better liquidity and slippage compared to AMMs.”

Slippage can potentially be “100X better” than AMMs for more stable pairs (e.g., USDT/USDC), Tran told The Block. Slippage is the difference between the expected price and the execution price of a trade.

Tran, however, said that the trade-off with the DMM model is that there will be a tradable price range for the token pair in that pool. “If the price goes out of the tradable range, the pool becomes inactive,” he said.

On dynamic fees, Tran said, each liquidity pool will support dynamic fees rather than a fixed fee model.

“With Kyber DMM, fees will increase during high market volatility and decrease during low market volatility to encourage trading and volume,” Tran told The Block. “Overall, this optimizes potential returns for liquidity providers. This is similar to how professional market makers are operating to get the most returns out of their trades.”

Kyber Network said the DMM protocol is the first of many new liquidity protocols that will be launched on Kyber 3.0.

Kyber is currently the tenth-largest decentralized exchange by trading volumes, according to data compiled by The Block.

Decentralized exchange protocols have been working to improve their systems. Last month, Uniswap said its V3 platform is launching in May, which will be 4000x more capital efficient than its current V2 platform.

© 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

• For the first time since January 2018, the infamous “Kimchi Premium” has returned in the last week of March 2021 (premium above 10%).
• While it remains far below the 2017 peak levels, it signals strong retail inflows.

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this Genesis research on The Block.

Gucci and a number of other luxury fashion brands are reportedly close to launching non-fungible tokens (NFTs).

Vogue Business reported the news on Monday, saying Gucci recently confirmed to the news outlet that it’s “only a matter of time” before it will release an NFT. Several other luxury fashion brands are close to releasing NFTs, Vogue Business reported, citing “multiple industry sources.”

Fashion collectibles platform Neuno, for instance, is currently working with five luxury fashion houses on launching NFTs, CEO Natalie Johnson told the news outlet. “We want to be the universal 3D wardrobe that plugs into everything,” said Johnson. “For example, imagine if somebody bought the iconic J Lo Versace dress on our site.”

Neuno is built on Dapper Labs’ Flow blockchain, according to its website. Johnson said customers would be able to buy NFTs with their credit cards, removing the need to own cryptocurrency.

NFTs are digital certificates or tokens tied to unique collectibles. They have grown significantly in popularity in recent months, especially after one of Beeple’s NFTs sold for nearly $70 million last month.

More than $300 million worth of NFTs have been traded in the past 30 days, according to tracker Dappradar.com. NBA Top Shot remains the top marketplace, followed by CryptoPunks and Rarible.

© 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

• Q1′ 21 was a historical quarter in venture funding for the crypto/blockchain sector with roughly $3.18 billion allocated to crypto/blockchain projects
• The first quarter had more private investment in dollar volume than all of 2020 combined
• Five deals this quarter qualified as one of the fifteenth largest crypto/blockchain funding deals of all time, all occurring in March.
• Decentralized Finance (DeFi) continues to be a popular vertical amongst investors, roughly 26% of the private investment rounds that occurred this quarter were DeFi-related projects. 

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

Hong Kong Customs has seized 300 crypto mining graphic process units (GPUs) in an anti-smuggling operation.

The government agency said in a statement on Saturday that it conducted the operation on Friday in the waters off the Hong Kong International Airport and “spotted several suspicious men moving cartons from a fishing vessel onto a speedboat.”

As officers took action on the suspected activities, the men immediately jumped onto the speedboat and fled to mainland China. The government agency subsequently seized goods – worth 30 million HKD ($3.8 million) in the speedboat – that were suspected to be on their way being smuggled to mainland China.

Local broadcaster TVB reported in a segment on Sunday that the seized goods during the operation included 300 crypto mining GPUs that were just launched last month, which could be the Cryptocurrency Mining Processor rolled by NVIDIA. 

The case is yet another sign of how far miner operators in China would go in terms of sourcing GPUs and ASIC mining equipment when the market supply of these machines runs dry amid the surging prices of BTC and ETH in the past few months and also the ongoing global chip shortage.

Apart from the GPUs, the officers also seized bottles of expensive alcohol and cosmetic products from the suspected smugglers. The government agency said it’s launching a subsequently investigation into the case.

“Smuggling is a serious offense. Under the Import and Export Ordinance, any person found guilty of importing or exporting unmanifested cargo is liable to a maximum fine of HK$2 million and imprisonment for seven years,” the government said in the 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.

Bitcoin is trading near $66,000 levels in South Korea as “Kimchi Premium” has returned.

Kimchi Premium is the spread between bitcoin’s price on South Korean crypto exchanges and Western exchanges.

Bitcoin is currently trading at around $66,200 on Bithumb, according to TradingView. That is whopping about 15% or $9,000 higher than bitcoin’s price of around $57,000 on Coinbase.

Ether (ETH) is also trading higher at around $2,350 on Bithumb compared to $2,020 on Coinbase, according to TradingView.

The Kimchi Premium suggests rising demand for bitcoin and ether in South Korea as the cryptocurrency market continues to soar worldwide.

The Kimchi Premium first appeared in 2016, according to the University of Calgary. Between 2016 and 2018, the Kimchi Premium averaged nearly 4.80% and was as high as almost 55% in January 2018, per the report.

© 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 Bank of Japan announced Monday that it has begun central bank digital currency (CBDC) experiments.

The first phase of experiments will focus on testing the basic functions of CBDC as a payment instrument, i.e., issuance, distribution, and redemption. This phase will be carried out through March 2022.

The Bank of Japan will then move to Phase 2 to test more detailed functions of CBDC, as it announced last October. If necessary, the central bank will then move to Phase 3, in which private businesses and end-users will participate in a pilot program.

The Bank of Japan currently has no plans to issue a CBDC, but it wants to remain prepared if the need arises in the future, the central bank’s executive director Shinichi Uchida said last month.

“We believe that initiating experiments at this stage is a necessary step,” said Uchida at the time. “Given the current factors at play, including technological developments at home and abroad, there is a reasonable possibility for CBDC to provide a means of payments and settlements and for such systems to become global standards.”

Central banks around the world are looking at developing digital currencies, as The Block’s recent CBDC report noted. Currently, China leads the pack since it is closer to launching digital yuan in the near 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.

Ethereum miners set a record for monthly revenue in March after doing the same thing in February,  according to data gathered by The Block. 

Mining revenue totaled $1.38 billion in March, whereas February saw $1.37 billion — a 0.73% increase.

Ethereum transaction fees, as a share of miner revenue, dropped 9.94% from February to March while subsidies rose 12.89%. Of March’s total revenue, 47.22% of it came from transaction fees whereas that number in February was 52.87%.

© 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 exchanges (DEXs) ended the month of March with a total monthly volume of $67.32 billion, falling by 8.12% from the previous month, according to data gathered by The Block. 

This marks the first time since November 2020 that the monthly DEX volume has decreased.

Uniswap continued to account for the majority of the monthly volume with $41.02 billion. Sushiswap and Curve accounted for  $10.06 billion and $5.08 billion respectively. 0x and Bancor Network accounted for another $4.76 billion and $2.59 billion respectively.

© 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.

Fei Labs, the firm behind the Fei Protocol stablecoin, raised 639,000 ETH, roughly $1.27 billion at current prices, in commitments for its Fei Protocol stablecoin on Saturday.

The ETH raised will be used as collateral to mint Fei stablecoins. According to Fei Labs, over 17,000 unique addresses participated in the “Genesis” event of the Fei stablecoin. As The Block Research writes, the Fei stablecoin uses a “Protocol Controlled Value” to sell and buy back supply to maintain its $1 peg. The Fei Protocol also disincentivizes sellers of its stablecoin below its peg by enacting a growing burn penalty for Fei sales.

With its raise, Fei Labs also provided liquidity on Uniswap, immediately making it the largest pool on the decentralized exchange with over $2.6 billion in liquidity.

© 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.