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The Luna Foundation Guard (LFG), a Singapore-based nonprofit building reserves for the stablecoin Terra (UST), announced Thursday that it will buy $100 million worth of AVAX tokens from the Avalanche foundation to augment its reserves.

LFG had bought $231 million in bitcoin the day prior to also boost its UST reserves, but this appears to be the first time LFG is buying into another cryptocurrency. With the AVAX market share significantly smaller than bitcoin’s, LFG is now a significant market buyer of AVAX. 

“Welcoming $AVAX as the second major layer one crypto asset next to $BTC as part of the $UST Reserve,” LFG wrote on Twitter. “The inclusion of @avalancheavax’s native token marks the start of a diverse pool of layer one crypto assets helping support the $UST peg.”

LFG plans to buy up $3 billion worth of bitcoin to keep in its reserve to support UST, which has a roughly $16.7 billion market capitalization and stands as the fourth largest stablecoin, The Block previously reported.

© 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

• Crabada is a play-and-earn idle game that is currently running on the Avalanche C-chain and is in the process of migrating to its own subnet, Swimmer Network.
  
• Crabada uses a three-token model to shape its game ecosystem, leveraging tokenized loyalty point system to attract and retain its base players.
  
• With the introduction of the Swimmer Network, the Crabada community can gain greater control over the game economy and help foster a more sustainable game economy.

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Robinhood is widening access to its much-anticipated crypto wallet transfer functionality, the company announced Thursday.

The rollout began in September to a select group of users, as reported at the time, and in December the company inked a deal with blockchain analytics firm Chainalysis to prepare for the offering’s wider rollout. Robinhood said in a press statement that it has now granted wallet transfer capabilities “to every eligible person on the 2 million+ WenWallets waitlist of more than two million people.”

Access is not available to those based in Hawaii, New York and Nevada, the firm said.

Robinhood also unveiled a pending feature on the horizon, in keeping with the theme of its announcement at the bitcoin-centric conference in Miami. The brokerage app will support the Lightning network, which is focused on smaller bitcoin transactions. 

“We will be adding the ability to transact on the Bitcoin Lightning Network, an open-source ‘layer-2’ for Bitcoin transactions in the near future,” Robinhood said, adding that more updates on this front would be pending “in the coming months.” 

As previously reported, the expanded rollout comes as Robinhood is teeing up more crypto functionalities. The firm posted a decline in crypto transaction-based revenue during the fourth quarter of 2021.

Still, during a presentation on Thursday, chief product officer Aparna Chennapragada remarked that bitcoin has been this year’s top recurring buy on the Robinhood app. 

© 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.

On Wednesday, Polygon revealed that it plans to launch a testnet for a new blockchain called Avail, according to a Twitter post. The blockchain aims at the scalability space and its testnet will go live in the second quarter of 2022.

Avail will be joining Polygon’s existing arsenal of scalability solutions. These are led by its main flagship proof-of-stake blockchain — which is seen as a sidechain to Ethereum — along with others like Edge, Miden, Zero, Hermes and Nightfall. 

Avail will be a standalone network under the Polygon umbrella, helping to host and verify off-chain data for blockchains that have integrated with it.   

While blockchains employ a myriad of datasets with decentralized applications, they don’t store data by themselves as that can be very expensive. The data is usually hosted on third-party servers, and even verifying it repeatedly can be cost-prohibitive on its own.

With that challenge, Avail will focus on improving the scalability of blockchains both within and outside the Polygon ecosystem and attempting to meet their data demands. 

“In terms of validity, the Avail chain specializes in ordering transactions and keeping them available, and does not validate any transaction unlike monolithic chains,” Polygon co-founder Anurag Arjun told The Block. Here monolithic refers to the idea of a blockchain operating on its own.

The team said Avail will serve as a “data availability layer” for Ethereum’s Layer-2 solutions — Optimism and Validium — and other zero-knowledge scalability solutions offered by Polygon, to help contribute to their data requirements. The complete details of how Avail will work together with those solutions will be announced later, the team said.

“The data availability technology has many uses, but one key use-case we are interested in is in allowing rollups settling to Ethereum to scale better by offloading transaction data to Avail,” said Arjun. Rollups are a technology used for building Layer-2 solutions.

Polygon Avail will work quite differently from popular blockchain networks, per its team. Rather than generating and keeping a record of all data within blocks — as is the case with Ethereum, Avalanche, Cosmos and the main Polygon blockchain, it will use “transaction ordering” based on a couple of cryptographic protocols — called GRANDPA and BABE — for data validation and consensus, the team told 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.

MicroStrategy CEO Michael Saylor said that two years ago, Merrill Lynch laughed him out the door when he said he wanted to buy bitcoin.

“They said ‘not only are we not going to sell it to you, we’ll get fired if we talk about it,’ so I promptly wired $175 million to another bank,” he remarked. 

Now, MicroStrategy’s bitcoin holdings total over $6 billion, according to Saylor, and sometimes he finds Merrill Lynch’s crypto research in his inbox.

He and ARK CEO Cathie Wood discussed their hopes for bitcoin during a Bitcoin 2022 fireside chat in Miami. Most notably, the two agreed they’re not worried about coming regulations given recent moves from President Biden’s Administration.

“I don’t think there’s any outcome that’s not favorable for bitcoin,” said Saylor.

Wood seemed to agree, saying there’s been a radical shift in the political attitude surrounding bitcoin since she first began investing, and especially in the months since the Biden Administration took office.

“Politicians have come to me and said I want to pull together a room of bitcoin enthusiasts and learn from them what they want from us,” she remarked.

She contrasted Treasury secretary Janet Yellen’s initial statements on cryptocurrency – which painted it as a money-laundering tool used by nefarious actors – to how the Treasury secretary has recently spoken about the ecosystem, still with a cautious attitude but recognizing the merits of innovation.

Wood and Saylor posited that Yellen could have been advised about the importance of keeping innovation, and crypto, in the US by Securities and Exchange Commission chair Gary Gensler.

Regardless of if Gensler has advised Yellen on the importance of crypto, Wood said she feels bitcoin is definitively in the regulatory clear under Gensler’s regime. 

Saylor sees the Biden Administration’s recent executive order addressing crypto’s possible money laundering risks as a green light going forward since the executive order contains no mention of forthcoming punitive action. 

© 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.

Frax, an algorithmic stablecoin protocol, is mulling the idea of buying billions of dollars’ worth of native tokens of major blockchains to use as reserve collateral for its stablecoin. 

The stablecoin, called FRAX, maintains its dollar value by being partially collateralized by USDC, along with an algorithm that buys and sells FRAX with another token called Frax Shares (FXS). When the stablecoin was launched, it was collateralized fully by USDC, but as it expanded, it used the algorithmic elements to maintain its peg to the dollar.

It was always an idea that the project would consider other coins as collateral. The project’s documentation states that non-stable cryptocurrencies like ether and bitcoin could be added as collateral once the system becomes more robust. Yet only recent has this plan to establish another “stability fund” made of various crypto assets been discussed as an imminent possibility.

Frax Finance founder Sam Kazemian told The Block that such a multi-chain approach for acquiring collateral backing will incentivize the flow of FRAX-denominated transactions on these blockchains. According to Kazemian, the system will contribute to a significant corresponding demand for the native tokens of these Layer 1 chains.

“Keep in mind, this strategy means every L1 chain (including BTC/lightning) will have an incentive to have FRAX stablecoins flowing through their economy as that creates a central bank-size market demand for their L1 token,” said Kazemian.

The decision bears similarities to Terra, a DeFi-centric blockchain, that has recently been making large bitcoin buy-ins to create a stability fund that will back its related stablecoin Terra USD (UST). But instead of buying only bitcoin as is the case with Terra, Frax intends to acquire the native assets of all blockchains where the stablecoin has been issued. 

While FRAX’s largest presence is on Ethereum, it also trades on 12 other blockchains including Avalanche, BNB Chain, Fantom, Harmony, Polygon, and Solana, along with Ethereum scaling solution Arbitrum.

According to Kazemian, this chain-agnostic collateral acquisition will be proportional to the demand for the FRAX stablecoin across these networks. Thus, FRAX’s balance sheet will reflect the proportion of the stablecoin’s supply in each network.

The stablecoin may set aside a portion of the seigniorage — the protocol’s revenue generated from issuing FRAX — to accumulate the assets. The details have, however, yet to be finalized and may go through a governance vote first.

Besides going multi-chain, Frax Finance will take a route different from Terra’s manual Bitcoin purchases.

Terra has been buying bitcoin either by exchanging USDT or burning excess LUNA supply in exchange for BTC. Frax will, instead, utilize its Flaxswap platform to execute these large purchase orders on-chain. Fraxswap is a decentralized exchange designed to allow the execution of large-size orders at minimal slippage. This design feature is especially useful for Frax if it goes ahead to acquire a large volume of major cryptocurrencies over a long 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.

The Treasury has staked out its vision for crypto policy, sort of.

On April 7, Treasury Secretary Janet Yellen gave a speech on digital assets — the first of its kind during her term. The speech is an early response to President Biden’s March executive order calling for agencies to coordinate efforts on cryptocurrency policy. In that respect, it is the first response of its kind from any agency.

Speaking at American University’s Don Myers Technology & Innovation Building, Yellen took the stage to Stevie Wonder’s Superstition and left to Creedence Clearwater Revival’s Have You Ever Seen the Rain, setting up a notable contrast between a sleek contemporary lecture hall and 50-year-old pieces of Americana. 

Yellen’s speech featured no bombshells — indeed, it seemed careful not to alarm stakeholders in the cryptocurrency industry. Instead, she carefully framed cryptocurrencies and her prognosis for their regulation in relation to historical parallels.

Casting back to Alexander Hamilton and the private banknotes that precipitated the National Banking Act under Lincoln, Yellen affirmed “A crisis catalyzed reform.”

What does this mean in the context of cryptocurrencies? Like others in the administration — most conspicuously Securities and Exchange Commission Chair Gary Gensler — have suggested, cryptocurrencies and the firms that handle them largely fall under existing statutory categories. 

“Digital assets may be new, but many of the issues they present are not. We have enjoyed the benefits of innovation in the past, and we have also confronted some of the  unintended consequences,” said Yellen, explaining:

“The principle of tech neutrality is also applicable to concerns related to tax evasion, illicit  finance, and national security – topics that are particularly pertinent in the world today. It’s illegal to evade taxes, launder money, or avoid sanctions. It doesn’t matter whether you’re using  checks, wires, or cryptocurrency.”

Despite this, Yellen maintained the President’s Working Group’s push for new legislation when it comes to stablecoins. She did not, however, explicitly support the PWG’s original push to restrict stablecoin issuance to insured depository institutions. 

The Treasury in general and Yellen, in particular, have had a busy week.

On Wednesday, she appeared before the House Financial Services Committee to testify on the state of international finance, a conversation that focused heavily on the Treasury’s sanctions on Russia. The day before, the Treasury sanctioned Russia-based darknet market Hydra and associated crypto exchange Garantex, an action that Yellen made mentioned in her two subsequent appearances. 

© 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

• According to Dealroom, fintech funding has raised $8.3 billion last month, compared to $12.2 billion in January 2022.
• In March, Cross River Bank and Acorns scored some of the biggest rounds, raising $620 million and $300 million respectively. 

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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
• Ethereum and Avalanche are nearing critical stages of development in their scaling roadmaps
• Terra’s UST continues its spread across multiple chains while incentives on Fantom are beginning to fuel a new chapter for the ecosystem

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Payments app Cash App, operated by Block, is enabling customers to receive their compensation in bitcoin.

The firm announced the new suite of products affiliated with its debit card, dubbed Paid in Bitcoin, at Miami’s Bitcoin 2022 conference today.

Starting today, customers with Cash Cards can set the percentage of their direct deposits to be automatically invested into bitcoin.

In the coming weeks, Cash App will roll out additional features. Including in the upcoming batch are Round Ups, or the ability to automatically invest the change on debit transactions. That change can be invested in bitcoin, stocks or exchange-traded funds.

CashApp is also further building out its integration with Bitcoin’s Lightning payments network. The firm integrated with Lightning Network in January of this year. Now, customers can make instantaneous bitcoin transfers by scanning their QR codes, cutting down the transaction time by minutes. 

“This new feature furthers Cash App’s mission to make bitcoin usable as a currency,” the firm said Thursday.

Jack Dorsey, the founder of Block (formerly known as Square prior to a rebrand), spoke at last year’s conference, saying he was committed to making bitcoin “the native currency for the internet.” Block has pursued numerous bitcoin-related initiatives, including one focus on mining and another on decentralized exchanging. 

© 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.