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Quick Take

• Solana is a blockchain platform designed for high throughput and decentralized applications

• Solana advocates argue that one of the benefits to its network is that it can scale without breaking composability or the need for sharding, whereas, with Ethereum, layer-2 solutions and sharding will break or at least limit the composability of smart contracts

• In total, The Block has identified 90 projects and companies across 11 different verticals currently expanding on its ecosystem.

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Quick Take

• Since their initial launch in 2016, perpetual swaps have exploded in popularity. 
• Protocols enabling perpetual swaps in DeFi have the potential to increase capital efficiency, improve market transparency, and enable permissionless market access.
• Providing adequate market depth and performance without compromising decentralization can be achieved through a variety of trade-offs which will be explored in this report.

This research piece is available to
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Tidal Finance, the yet-to-launch Polkadot-based decentralized insurance protocol, has raised $1.8 million in a private token sale round.

The round was led by Hypersphere Ventures, the venture firm co-founded by Polkadot co-founder Robert Habermeier, with participation from Spartan Capital, Kenetic Capital, and QCP Capital.

With fresh capital at hand, Tidal looks to launch its protocol in mid-April, co-founder and CEO Chad Liu told The Block. Tidal has been under development since last September and will launch the testnet in about two weeks, said Liu.

When launched publicly, Tidal will help users buy and sell insurance against decentralized finance (DeFi) protocols. The buying part is self-explanatory. As for sellers, they will have to provide liquidity for DeFi protocols they want to back and get Tidal (TIL) tokens in return.

Tidal will charge a “small percentage of transaction fee” from cover sellers, said Liu, commenting on the protocol’s business model.

Nexus Mutual and Cover Protocol are two existing Ethereum-based DeFi insurance protocols. When asked what Tidal’s competitive edge is, Liu said it is designed to increase capital efficiency at reduced risks.

“Tidal combines different protocols into coverage pools to allow liquidity providers (LPs) to stake their capital to provide coverage on multiple protocols at the same time. These pools are assembled to offer LPs the ability to leverage their capital while mitigating the risks. Risks are reduced by combining protocols with low correlation and by limiting the duration of each coverage cycle,” Liu told The Block. “This approach gives our LPs the ability to generate above-average returns while offering coverage seekers highly competitive pricing.” 

Tidal said it has partnered with over 20 DeFi protocols to bring coverage for its users. Some of these protocols include bZx, Reef Finance, Equilibrium, StakeDAO, and others.

Tidal also plans to launch an insurance product for different proof-of-stake protocols, including Ethereum 2.0 or Eth2. That will allow validators of these protocols to buy insurance against slashing risks.

The private token sale round brings Tidal’s total funding to date to $3.8 million. Last December, the project raised $2 million in a token seed round.

Looking ahead, Tidal plans to raise more money via a public token sale, Liu told The Block. 

© 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.

Cboe Global Markets—the global equities and derivatives exchange—filed a request with the Securities and Exchange Commission to list and trade shares of VanEck’s bitcoin ETF. The firm’s filing reignites VanEck’s journey to launch an ETF tied to bitcoin in the US. 

“Our filing builds on VanEck’s earlier S-1 filing from December 30 and represents the next steps in bringing what could be the first U.S. bitcoin ETF to market,” a spokeswoman for Cboe said in an email to The Block. 

Up north, Canada has approved two bitcoin ETFs that launched with much fanfare. The Purpose Bitcoin ETF quickly surpassed $400 million in assets under management since launching late last month.

“A pretty strong start,” as noted by JPMorgan in a note to clients Monday morning.

It’s not clear when US regulators will approve a bitcoin ETF. Although, Cboe is hopeful, noting that it “believes that approval of a bitcoin ETF could provide investors access to bitcoin exposure through a transparent, regulated vehicle.”

Here’s Cboe in the filing making the case for the product: “Exposure to bitcoin through an ETP also presents certain advantages for retail investors compared to buying spot bitcoin directly. The most notable advantage is the use of the Custodian to custody the Trust’s bitcoin assets. The Sponsor has carefully selected the Custodian, a trust company chartered and regulated by NYDFS, due to its manner of holding the Trust’s bitcoin.”

The Chicago exchange operator announced late last year its intention to dive back into the bitcoin market through a data product. At the time, the firm told The Block the business could lead to new indexes tied to bitcoin and tradable products.

In 2019, the firm notably sunset its bitcoin futures product, which it launched in 2017. 

© 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 February with the highest monthly volume on record, according to data gathered by The Block. 

February’s monthly volume hit a new high of approximately $72.89 billion, increasing by $12 billion from January. 

Uniswap continued to lead in the DEX space, making up most of the monthly volume with $36.6 billion. This is the exchange’s third consecutive month posting a monthly volume of above $30 billion. SushiSwap and Curve came in second, hitting $14.93 billion and $4.42 billion respectively.

February also had the highest-ever level of monthly revenue for Ethereum miners, roughly half of which has come in the form of transaction fees. The revenue numbers reflect the price of ETH, which exceeded the $2000 mark briefly this month. 

© 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.

Total Ethereum mining revenue reached $1.37 billion in February — a new record, according to data from The Block. 

Ethereum mining revenue grew 65.1% between January and February. During that time, transaction fees grew 122.1%.

Ethereum mining revenue often features a relatively high ratio of transaction fees to block subsidies. Of the total revenue in February, $722.8 million, or 52.8%, came from fees. The remaining $644.4 million came from block subsidies. 

Meanwhile, The Block recently reported that Ethereum’s top mining pools remain divided on whether to reduce miner transaction revenue through the Ethereum Improvement Proposal (EIP)-1559. While F2Pool, the third-largest ETH mining pool, F2Pool has said it supports EIP-1559 for its ability to reduce transaction revenue variability. But the largest pool, Sparkpool, opposes the proposal.

© 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.

Goldman Sachs is reigniting its bitcoin trading desk operation, according to people familiar with the move. 

The move, reported earlier by Reuters, comes as bitcoin’s price flirts once more with $50,000. The bank first launched a bitcoin desk — which cleared futures and traded non-deliverable forwards — in 2018. But the firm apparently shut the desk down at some point.

Goldman Sachs declined to comment. 

Now the desk is set to re-open in mid-March, according to a source. Reuters reported the desk would launch next week. 

In any case, it will not be trading bitcoin itself — at least to start.  For now, it is trading derivatives tied to the asset and exploring how it can work with a third party custody provider to offer sub-custody for bitcoin. 

Still, a source at the bank said that sustained trading above $50,000 could make bitcoin an appealing asset for a bank like Goldman to trade.

© 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 mining total revenue surpassed $1.36 billion in February, according to data from The Block. That breaks the previous all-time high reached in December of 2017.

A small portion of February’s total mining revenue — $186.4 million, or 13.7% — came from the transaction fees. The remaining $1.18 billion came from the network’s block subsidies, accruing in value as bitcoin broke $50,000 in price and $1 trillion in market capitalization for the first time in February.

Total mining revenue grew 21.4% from January’s $1.12 billion.

While equipment for Bitcoin mining experienced shortages in December, some mining infrastructure providers have recently announced their intention to expand operations. Compute North announced on February 12 that it raised $25 million to grow its team and facilities. And China-based Bitcoin mining firm Poolin announced it acquired its rival NovaBlock’s hashrate, which Poolin will use to expand across North America.

© 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.

New York Attorney General (NYAG) issued a stern warning on Monday to crypto firms in the state: “you either play by the rules or we will shut you down.” She also warned investors that the crypto market carries “extreme risks.”

In a statement, Attorney General Letitia James says she’s committed to “leveling the playing field” for investors by cracking down “greedy industry players.”

Just last week, James’s office settled its legal battle with crypto exchange Bitfinex, which allegedly co-mingled funds with its sister company Tether to cover an $850 million loss. And two weeks ago, it filed a suit against crypto investment app Coinseed, alleging the firm failed to register as a broker-dealer in New York state. Today’s statement suggested that more enforcement actions could be on the horizon.

The statement reminds crypto firms that they are not exempt from state registrations since virtual currencies are considered commodities in New York. “The OAG reminds industry members that those parties who are obligated to register, but do not, are subject to both civil and criminal enforcement under the law.”

James also advised investors to proceed with “extreme caution” when investing in virtual currencies. “Cryptocurrencies are high-risk, unstable investments that could result in devastating losses just as quickly as they can provide gains,” she said.

© 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.

Given the current economic backdrop, investors might want to start considering adding bitcoin to their portfolio, argues Jurrien Timmer, the director of global macro at Fidelity Investments.

In a note titled “Understanding Bitcoin,” Timmer — a 26-year veteran of the asset management giant — said that bitcoin could be seen as a form of “digital gold” and could offer protection against inflation. 

“In my view, some investors may wish to consider bitcoin, alongside other alternatives, as one component of the bond side of a 60/40 stock/bond portfolio,” he said. Fidelity oversees over $9.8 trillion in total customer assets. 

The statement adds to an ongoing wave of support for bitcoin from big-name investors, like Paul Tudor Jones and Anthony Scaramucci, who see it as a gold-like asset. The essay also reflects the growing chorus calling for the end of the traditional 60/40 portfolio allocation. 

“In a 60/40 stock/bond world, gold and bitcoin are poised, in my view, as potential disruptors to the 40 side of the allocation,” Timmer said. 

Timmer also highlighted Bitcoin’s limited supply as a unique attribute relative to gold.

“We know that bitcoin’s supply growth is flattening. Note how the production of gold has been quite steady throughout the years: No asymptote here!”

Source: Fidelity

© 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.