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Quick Take

• In this weekly series, we dive into some of the most interesting data and developments across the Layer 1 blockchain landscape, from DeFi and bridges to network activity and funding
• The L2 scaling protocol Optimism has launched its native governance token as the team looks to attract further adoption of its network, but challenges with supporting infrastructure remain
• Avalanche and Solana have made progress on their own approaches to scaling, but they face the need to make additional technical advances before they can achieve sufficient stability at scale

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Bloomberg announced on Thursday that it has expanded its data coverage on the Bloomberg Terminal, which will now include 50 cryptocurrencies. 

Users of its professional terminal will be able to see data on bitcoin (BTC), ether (ETH), binance coin (BNB) and solana (SOL), among others, according to the announcement. This will enable clients to access and monitor intraday pricing for crypto, indices and futures contracts in real-time. 

Cryptocurrency prices were first added to the terminal — a ubiquitous fixture on the desks of Wall Street traders — in 2013 with the introduction of bitcoin. The offering was expanded to 10 cryptocurrencies in 2018 and has now jumped to 50. 

According to its announcement, the company vets potential assets to be added to the terminal based on the following assessments: institutional custody support, trading access, market capitalization and consistency of turnover. 

As the crypto space matures and more institutional investors actively develop investment strategies involving crypto, the demand for reliable and verifiable data on the nascent space has risen. 

Alex Wenham, product manager for cryptocurrencies at Bloomberg, said the company aims to support institutions around the world to incorporate digital assets into their workflows. Before going on to say that “as this market develops, we will continue to evolve our data-driven offerings to help our clients define and develop their strategies in this space.”

Bloomberg competes with The Block to provide news and information on crypto markets.

© 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.

Floor — an upstart project in the non-fungible token (NFT) market — announced on Wednesday the close of a Series A funding round. 

Born out of founder Chris Maddern’s own frustration with managing his portfolio of NFTs, Floor also announced its full leadership team, which includes Siddhartha Dabral, a former colleague of Maddern at software firm Button, and Robinhood’s former crypto boss Christine Brown. 

The fresh raise of $8 million brings 6th Man Ventures, Worklife, B Capital Group and others onto Floor’s cap table. 

“Today’s product market fit is building stupid pictures on the internet. But there are hundreds of use-cases,” Floor CEO Chris Maddern told The Block.

“The most exciting NFTs could be worth zero dollars but give access to community, family and future use-cases. The product will massively evolve in that direction. In order to start: you have to build a product for what exists.”

Prior to today’s launch, only the 3,500 Floor token holders could access the app. But now some Floor features are set to become available to anyone on iOS and Android.

Once a user signs up and connects their wallet, they can watch NFT floor prices fluctuations and price histories — reminiscent of Coinbase’s app design. Users may track NFTs they already own or set up “watch lists” for assets they could be interested in purchasing later. 

Disclosure: Chris Maddern has served as a board member of The Block. 

© 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

• Since the second half of 2021, the bitcoin mining industry has witnessed an increasing number of traditional financial institutions jumping into the miner lending business.
• 11 major public mining firms had outstanding loan payables of $776 million as of March 31 and drew an additional $235 million in the subsequent months.
• As the interest among traditional lenders grows, we take a look at some of the most fundamental metrics for evaluating a miner’s creditworthiness.

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

Starting this summer, residents of Marcy Houses in Brooklyn will be eligible to receive free Bitcoin education classes as part of a new initiative funded by Twitter founder Jack Dorsey and rapper Shawn “Jay-Z” Carter.

Dorsey announced the project, called The Bitcoin Academy, in a series of tweets on Thursday. This isn’t just about bitcoin,” he said, “it’s about long-term thinking, local economies, and self-confidence.”  

The education program, which will be led by educators Lamar Wilson and Najah J. Roberts, was designed in collaboration with Crypto Blockchain Plug and Black Bitcoin Billionaire. The project’s website describes its goal as to reduce existing barriers to financial services among residents and provide education about Bitcoin specifically and finance in general. 

According to the website, the classes will teach residents about Bitcoin, how it works, why they should care, and how they can build their financial future. Participants in the program will receive free MiFi devices and a one-year limited data plan, plus smartphones if needed. 

“Bitcoin is becoming a critical tool for many in Africa and Central and South America,” Dorsey said. “We believe the same potential exists within communities in the US.”

© 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.

Aztec Network will update its Layer 2 rollup solution on Ethereum to a new version called Connect.

The new update, which focuses on smart contract data privacy, will go live Thursday. 

Previously, Aztec has offered a private money protocol called zkmoney, that allowed users to shield data on Ethereum transactions. However, it worked as a standalone solution that didn’t allow Ethereum apps to integrate data privacy.

With the release of Connect, the Aztec team is aiming to position Connect as a privacy-preserving alternative to competing Layer 2s like Optimism, Arbitrum and StarkWare.

Popular DeFi apps such as Lido, Aave, Compound, Ribbon, Uniswap have agreed to launch on Aztec. These apps will soon be able onboard their smart contracts to Aztec Connect through a bridge, according to Jonathan Wu, head of growth at Aztec.

“Aztec Connnect will create private apps on Ethereum by offering software development kit (SDK) for bridge contracts for permissionless privacy,” Wu stated. He further that said unlike other Layer 2s, Aztec Connect will encrypt user activity, from the browser all the way to the processing of transactions on the network.

Aztec Connect is a precursor to Aztec 3, a future version of its Layer 2 rollup that will enable the native deployment of smart contracts. When that happens later this year, Aztec will launch a Rust-based smart contract development language called Noir.

© 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.

Orderly Network, a decentralized exchange protocol, has announced a $20 million fundraise led by a group of DeFi heavyweights.

Three Arrows Capital, Pantera Capital, Dragonfly Capital, Sequoia China, Jump Crypto, Alameda Research, GSR Ventures and MetaWeb.VC all invested in the round, alongside other unnamed strategic partners, according to a press release on Thursday.

Orderly runs on Near Protocol, the blockchain backed by Tiger Global. Near helped incubate Orderly, which was only founded as recently as April this year. Woo Network, a trading platform, also had a hand in developing the protocol. Kronos Research, the market-maker, is providing liquidity for Orderly to help kickstart trading.

The first decentralized app (dApp) to launch on the Orderly Network is a user-friendly interface called Woo Dex, which will offer trading tools to users.

“Bringing deep liquidity and low-fee trading options to the Near blockchain by introducing DeFi protocols like Woo Dex will allow users to enjoy an efficient, permissionless trading experience while also giving builders the best possible platform and build experience to launch their products and services on,” Ran Yi, chief ecosystem officer at Woo Network, said in a statement.

The $20 million will be used to hire staff, develop new and existing products, and forge new partnerships.

© 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.

Terraform Labs and its CEO Do Kwon must comply with Securities and Exchange Commission (SEC) subpoenas related to the Mirror Protocol, according to a ruling on Wednesday from the US Court of Appeals for the Second Circuit. 

The SEC is investigating whether Terraform and Kwon were involved in selling unregistered securities through the Mirror Protocol, which lets users trade crypto tokens that represent popular stocks like Apple and Amazon.

The regulator served Kwon with papers at Messari’s crypto conference, Mainnet, in New York in September 2021. Kwon and Terraform appealed, saying the SEC violated its own rules when it served Kwon in person and the court lacked jurisdiction due to Terraform’s lack of contact with the US.

The court overturned both arguments. It found the SEC followed the rules and that Terraform’s counsel was not authorized to receive filings, hence why Kwon had to be served in person. It said the way Terraform understood the rules would involve “absurd results by allowing a party to insist on service through counsel, but allow the party to block said service by not authorizing their counsel to receive any filings.”

On the second element, the court upheld the view that there were seven contacts with the US. It said that Terraform Labs and Kwon promoted the tokens to US-based consumers and investors, that they retained US employees and had agreements with US-based entities to trade the tokens (noting one $200,000 deal with an unspecified exchange). When setting up an agreement with one company, they said that 15% of Mirror Protocol users are based in the US, according to the filing. The court also dismissed arguments to the contrary.

This lawsuit is unrelated to the dramatic collapse of the Terra blockchain last month, which saw its native token luna suffer a death spiral as its supply rose exponentially. This was due to its relationship with the stablecoin TerraUSD (UST), which lost its peg to the US dollar and lost nearly all of its value. Both projects lost a combined market cap of around $40 billion.

The blockchain has since been recreated with a token airdrop to former holders but investors only received a fraction of what they lost.

© 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.

One of the largest trading firms in the decentralized finance market has been quietly incubating a product aimed at the masses. 

Wintermute — the crypto firm led by high-speed trading veteran Evgeny Gaevoy — on Thursday unveiled a new decentralized trading platform, dubbed Bebop. It is a unique instance of an institutional market participant gate-crashing the retail trading world, with the product set to go head-to-head with decentralized exchange aggregators like 1inch.

Wintermute makes markets on both centralized and decentralized crypto exchanges, trading billions of dollars per month. 

The move is somewhat comparable to a powerhouse of the traditional financial world, like Virtu Financial or Citadel Securities, launching a platform to rival Robinhood. 

The project aims to solve for the inefficiencies that exist in decentralized finance trading, which is plagued by high gas fees and poor user interfaces. 

“The universe of DeFi is fragmented,” a press release shared with The Block notes. “The quality of platforms and offerings is inconsistent, making it difficult to navigate the landscape and to assess which can be most trusted.”

Leveraging the trading expertise of Wintermute, Bebop aims to solve these problems by offering ordinary DeFi users the execution quality that is available to institutional traders. To that end, the project plans to offer users the ability to swap one token for several different types of tokens through one transaction.

“This allows you to enter or exit positions ‘in one go,’ which can be especially important in fast markets. Not to mention enabling our users to save money on the network fees that would have been associated with each individual transaction,” Wintermute said in the release.

The project also claims that users won’t face slippage costs when trying to execute a swap. Typically, during periods of low liquidity, DeFi users might have to pay additional costs to execute a DeFi trade. Wintermute’s Gaevoy said the project plans to fix this by showing the end-client a more direct price.

“By showing a firm price in the first place. Other aggregators are showing price, then receive request from a user, but by the time they hit blockchain with their order the price on, for example, Uniswap could have changed and so user could pay more as a result.”

As for how it fits into the broader Wintermute story, Gaevoy said that the idea to launch the product stemmed from its existing role in DeFi as one of the largest non automated market makers behind 1inch. 

“At some point we thought, if we are so good pricing wise, we can launch our own RFQ [request for quote] platform,” he said. “And then on top of it we can improve on user experience, start with features nobody has (one to many, many to one) and ultimately target to become leading DeFi cross chain trading platform.”

© 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.

After a $5 million exploit on Osmosis on Wednesday, one of its network validators called FireStake came forward to admit that they were responsible for draining $2 million of it.

Osmosis is a blockchain that runs a large decentralized exchange (DEX) in the Cosmos ecosystem. The project suffered losses due to a security bug in Osmosis’ liquidity pools that allowed anyone to withdraw more than 50% of their position in the pools.

FireStake, which runs a staking service for the Cosmos ecosystem, said that two of its team members took $2 million in repeated withdrawals using merely $226. FireStake claimed that what started as testing to see if the bug existed, “grew into a temporary lapse in good judgment.”

“We were thinking about our family’s future, and not the future of our community,” the firm affirmed. However, later it decided to notify Osmosis team to return the drained funds, the team added.

“They stepped forward themselves”, Osmosis co-founder Sunny Agarwal said on FireStake’s actions.

Osmosis said that the vulnerability was related to an error in the calculation of liquidity pool (LP) tokens shares when adding and removing funds on its DEX. When the Osmosis team first discovered it, they froze the entire chain to prevent users from draining all of the funds. 

Out of the 5 million drained, it is expected that FireStake will return the $2 million. It’s unclear if the team knows the whereabouts of the remaining $3 million. If those funds are not recovered, Osmosis said it will replace them from its own treasury.

In the meantime, the Osmosis blockchain remains halted. A pop-up on its website reads that the bug has now been fixed and validators are preparing for a network restore. 

© 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.