Polkadot Launches Testnet for Sharding Cross-Communication

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This DeFi Project Wants to Make Yield Farming Cheaper

This DeFi Project Wants to Make Yield Farming Cheaper

A new DeFi project wants to make the current flavor of cryptocurrencies – yield farming – cheaper to access, run, and operate for retail users, Decrypt reported August 5.

Making Farming Cheaper

Set Protocol, a DeFi project, plans to bring yield farming as one of its automated trading strategies offered as part of its proprietary TokenSets platform.

The project will deploy yield farming strategies, designed by the Set Labs team, and the broader community. These will presumably include straightforward ones like locking up funds on Compound, to more complex ones using a combination of Yield Finance, Curve, and Balancer.

For the uninitiated, yield farming is a new concept in the crypto market that sees traders utilize different protocols – such as Compound, Balancer, Curve, and others – to gain interest, or yield, on their investments. 

And it’s turned out a grand success. Hundreds of millions of dollars worth of various cryptocurrencies are locked in such protocol, paying out anything between 10%-1,000% to investors. However, they still remain a highly risky form of acquiring assets, and caution is advised.

That said, the strategies are usually sophisticated and require several steps to execute. Another prohibition is skyrocketing Ethereum gas costs that make their execution even more expensive for those investing smaller amounts like $100 to $500 (fees alone can reach $150).

While TokenSets had previously supported Compound’s interest-earning cTokens in V1, noted The Defiant, users can now benefit from yield farming by earning and distributing governance tokens like COMP, BAL, CRV, and more from various strategies which use underlying DeFi protocols.

With Set Protocol, users only pay for Ethereum gas fees when entering or exiting a strategy, while enjoying traders will a reduced complexity. So far, the firm has grown to $24M in assets locked in its smart contracts from $500k in just over a year, said Decrypt.

Upgrade Coming for Lowering Costs 

The move is part of a wider upgrade. Set Protocol’s V2 will also include support for a larger array of ERC20 tokens. Only ETH, WBTC, LINK, and a couple of stablecoins were supported in V1. Set is also pledging to “significantly” reduce gas costs. To provide some context, V1 averaged anywhere from $15-50 to buy and sell a Set in the current gas climate.

Meanwhile, V2 aims to increase flexibility for “Set managers” to allow them to create better portfolios while including more sophisticated investment features like margin trading, limit orders, and DEX trading. 

Set Protocol will also be integrating popular primitives and assets offered by Aave, Balancer, Curve, and Synthetix on top of their underlying liquidity mining opportunities.

In all, yield farmers can interesting parties may enjoy the benefits of the new concept without engaging in the complex structure themselves.

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Bitcoin Exchanges Report Massive Withdrawals as Price Eyes $12K-Retest

  • The amount of Bitcoin tokens held across all cryptocurrency exchanges dropped dramatically earlier this week.
  • Traders withdrew over 110,000 BTC on August 3 – a day after the BTC/USD rate plunged from $12,000 to as low as $10,500.
  • On-chain analyst Cole Garner theorized the outflow as a sign of whales buying the Sunday sell-off.

A $1.23 billion worth of Bitcoin tokens moved out of all the cryptocurrency exchanges a day after BTC/USD fell $1,500.

According to data fetched by CryptoQuant, Bitcoin balances on trading platforms fell from roughly 2.50 million to 2.39 million on Monday. It was the same day the cryptocurrency rebounded from its local support level near $10,500 to approach $11,500.

Bitcoin, cryptocurrency, btcusd, xbtusd, btcusdt

Bitcoin held on exchanges dropped dramatically on Monday. Source: Crypto Quant

The sequence led on-chain analyst Cole Garner to assume that Bitcoin whales–entities holding larger quantities of crypto tokens– saved the cryptocurrency from falling anywhere below $10,500. They bought the dip and later withdrew their winnings from exchanges to become “HODLERS” – a slang term for holders.

“The amount of #Bitcoinheld on exchanges just dropped off a cliff,” tweeted Mr. Garner. “It happened two days ago – whales bought up the selloff. $BTC flowing out of exchanges is bullish.”

As it appears, the massive withdrawal shortly followed a modest spike in the Bitcoin price. As of Thursday, BTC/USD had established a weekly top at $11,615.

Parallel Theories

Mr. Garner’s bullish theory met with limited skepticism. One of the respondents to his tweet, CryptoQuant itself, argued that exchanges, too, periodically migrate cryptocurrencies from their hot wallets to cold wallets.

The practice limits the risks of losing all the coins should there be a security breach.

On Tuesday, Binance, one of the largest cryptocurrency exchanges by volume, moved nearly 68,101 BTC to a newly created wallet. CryptoQuant noted that it was still not clear whether the address belonged to a custodian service or an offline wallet. The portal nevertheless made a bullsh case, stating:

“Even if it’s Binance’s, it could be a bull signal since Binance decided to reduce the portion of hot wallets in charge of user withdrawals.”

Bitcoin Eyeing $12K-Retest

The theories appeared as Bitcoin continues to trade below $12,000, its year-to-date high. Observers noted that the cryptocurrency could attempt a close above the said level as long as it trades under the macro influence.

In retrospect, Bitcoin broke above $10,500 on increasing bids for safe-haven assets among mainstream investors. As the bond market became too expensive, yields fell to their record lows, and US dollar continued its decline, hedging assets such as gold, silver, and bitcoin surged higher.

“If the dollar continues to depreciate, there is a high probability that #Bitcoin will continue to rise,” said Jay Hao, the CEO of cryptocurrency exchange OKEx.

Bitcoin, cryptocurrency, btcusd, xbtusd, btcusdt

BTCUSD rebounded by more than $1,000 from its support near $10,500. Source: TradingView.com

That also explains why the HODLING sentiment lately surged among the Bitcoin investors.

Analyst Explains Why KAVA Could Rise Further Atop Its 170% QTD Rally

  • DeFi token KAVA has caught investors’ attention following its 170 percent rally in the third quarter.
  • Luke Martin, a cryptocurrency analyst, listed two reasons why KAVA/USD should continue its bullish momentum in the coming sessions.
  • One of them is its potential listing on US-based crypto trading platform Coinbase Pro.

KAVA is trading 170 percent higher on its quarter-to-date timeframe – and the emerging DeFi token has significant growth potential in the sessions ahead.

So sees Luke Martin, a cryptocurrency analyst, who gave two reasons why KAVA price could keep rising in the coming future. First, he backed his bullish belief by referring to Coinbase Pro, a US-based crypto trading firm that recently mentioned KAVA among the tokens it may want to list on its platform.

Second, Mr. Martin highlighted the euphoria among KAVA traders following Coinbase Pro’s announcement last week. The analyst called them out for pumping the cryptocurrency’s rate above a crucial resistance area, a move that could set it en route towards new quarterly highs.

KAVA, DeFi, cryptocurrency, KAVABTC, KAVAUSD

KAVA/BTC exchange rate jumped above the red resistance area on Thursday. Source: TradingView.com

The BAND Reference

The performance of BAND token under similar conditions prompted Mr. Martin to predict the same scenario for KAVA, he admitted in a tweet.

“I’ve been skeptical about the “Coinbase effect” for altcoins,” the analyst wrote. “But that has completely changed in the current market. $BAND ripped for 45% when it got added yesterday. I think there’s a really attractive trading opportunity for the other potential adds on their list.”

Both BAND and KAVA are DeFi tokens. Both serve as collateral to issue dataset tokens, stake to participate in on-chain governance. Their common features make it further possible for Coinbase Pro to list KAVA on its platform, just as it has listed BAND.

“They have never added 100% of coins they review so blindly buying all likely isn’t [the] best approach,” Mr. Martin commented about Coinbase Pro. “Based on the $BAND‘s [addition], I give more weight to a Defi coin being picked.”

KAVA Upside Targets

Meanwhile, the KAVA/BTC breakout above its resistance area of 26,600-27,738 sats clears its path towards its all-time high.

KAVA, DeFi, cryptocurrency, KAVABTC, KAVAUSD
KAVA/BTC price targets. Source: TradingView.com

At first, the pair is clearly attempting to move above its Bull Pennant pattern. One can notice a high selling pressure near the local top via the large upside wick. Meanwhile, bulls are buying the pullback move while trying to attempt a close above the Pennant range.

In case of a pullback, KAVA/BTC risks falling towards the Pennant support, following which it would attempt another bull run towards and above the Pennant resistance. In case of a full-blown breakout, the pair would jump towards the 31,183-38,950 sats target.

Exchange’s Bitcoin Balance Just “Dropped Off a Cliff” as Bullish Undercurrent Grows

Bitcoin is currently growing incredibly strong from a technical and fundamental perspective.

One indicator of the digital asset’s fundamental strength is the massive exchange outflows seen throughout the past several weeks.

The trend has been picking up steam as of late, and just a couple of days ago, the balance of BTC within exchange wallets fell off a cliff, hitting the lowest level seen in ages.

Analysts are noting that this is a highly bullish development, as it suggests that the cryptocurrency is well-positioned to see organic growth as the selling pressure from exchanges starts to evaporate.

From a technical perspective, the cryptocurrency is also showing immense signs of strength. One trader is noting that bears conducted a failed breakdown yesterday. This opens the gates for further near-term upside in the days ahead.

Bitcoin Flashes Signs of Strength as Technical Outlook Grows Bright

Throughout the past several days, Bitcoin has been caught within a consolidation phase in the upper-$11,000 region. This came about following the rejection at $12,000 that the crypto posted on Saturday.

Although bulls have yet to successfully surmount this key resistance level, their ability to hold BTC directly beneath it for an extended period of time is a positive sign.

At the time of writing, Bitcoin is trading up just over 1% at its current price of $11,850. It has been trading around this level for the past day, and each dip has been quickly absorbed by buyers.

While speaking about the fleeting Bitcoin dip seen yesterday, one analyst explained that this “failed breakdown” is a positive sign for the cryptocurrency’s near-term outlook.

He notes that although he would ideally like to long $11,450, the break back above $11,800 suggests it may not decline this low anytime soon.

“BTC – Eyes on the local highs. Failed breakdown yesterday. Bounced directly at a key HTF S&R. Grinding back up since then. Ideally, I would prefer to long $11,450 but I’m not opposed to a long above $11.8k if there’s a strong reaction. I’ll take what I can get,” he explained while pointing to the chart seen below.

Bitcoin

Image Courtesy of UB. Chart via TradingView.

BTC’s Fundamental Outlook Grows Brighter by the Day

Bitcoin’s fundamental outlook has been growing brighter alongside its technical outlook.

One metric showing its current fundamental strength is the amount of BTC on exchanges, which has been declining sharply in recent times.

“The amount of Bitcoin held on exchanges just dropped off a cliff. It happened two days ago – whales bought up the selloff. BTC flowing out of exchanges is *bullish*” one analyst noted.

Image Courtesy of Cole Garner. Chart via CryptoQuant.

The confluence of Bitcoin’s technical and fundamental strength is likely to continue lifting it higher in the weeks and months ahead.

Featured image from Unsplash.
Charts and pricing data from TradingView.

Bitcoin’s Patronage System Is an Unheralded Strength

CoinDesk columnist Nic Carter is partner at Castle Island Ventures, a public blockchain-focused venture fund based in Cambridge, Mass. He is also the cofounder of Coin Metrics, a blockchain analytics startup.

A quietly important phenomenon has gained steam in the last few months. And I’m not referring to Grayscale gobbling up all the new coins or Cash App’s bitcoin volumes exploding

Bitcoin’s patronage system – how future network development is funded – has gained unheralded strength, with many more entities signing on as sponsors. These groups recognize that sponsoring the core developers who keep the system running is profoundly important to keeping this public infrastructure moving ahead. 

For a long time, Blockstream, Chaincode and the MIT Digital Currency Initiative were the major patrons sponsoring core developers. Thanks to their support, a handful of the most critical and engaged developers were able to commit their time fully to Bitcoin. However, many more developers active on the Bitcoin codebase or ancillary projects remained unfunded and had to split their time between Bitcoin development and day jobs.

In 2019, Square Crypto burst on the scene and announced its intention to fund a variety of Bitcoin projects, both relating to the main codebase but also targeting less conventional improvements to Bitcoin’s design and user experience. Notably, its first grant was to BTCPayServer, a project dedicated to facilitating bitcoin acceptance among merchants. This signaled a broadening of the universe of grant-worthy projects and inspired several other organizations to throw their hat into the ring.

Today, the Bitcoin patronage environment is encouragingly vibrant and diverse. Numerous organizations have recognized the favorable economics of supporting Bitcoin development. In 2020 alone, BitMEX has added to its commitments, venture fund Paradigm has jumped into the ring with a sponsorship of Anthony Towns, exchanges Kraken, BTSE and OKCoin made material grants to BTCPayServer, and Square Crypto made a blizzard of grants to a wide variety of entities.

No other public blockchains have Bitcoin’s combination of industry buy-in, accumulated credibility, and neutrality from inception.

For a fuller accounting of Bitcoin patronage initiatives, see this piece from BitMEX Research, with supplemental information here. In short, Bitcoin’s patronage environment has gone from one in which a half dozen core developers were subsidized by a handful of institutions, to a setting where dozens of individuals and projects – many of which lie entirely outside the domain of “Core” – are able to obtain financing from a much larger variety of donors.

Until recently, it had been virtually impossible for individuals to make tax-deductible donations to Bitcoin development (one shudders in recollection of the Bitcoin Foundation). This changed when the Human Rights Foundation announced its Bitcoin Development Fund last month, which comes wrapped in a helpful 501(c)(3) format. For individuals who want to donate directly to core developers, several Bitcoin developers have signed up to Github’s new Sponsors program.

This is incredibly encouraging. Not only is essential but costly security review being funded, but non-Core public goods like BTCPayServer and Lightning are now supported. And critically, the broadening of the donor base means that allegations of capture or co-option ring hollow. Gone are the days where Blockstream faced allegations of hoarding all the most influential developers.

One imagines that the fundamental logic – firms that rely on Bitcoin should support development, not because it’s the right thing to do, but because it’s the economically rational thing to do – will eventually persuade even the most recalcitrant among them. At this point, large exchanges, custodians and brokers who resist giving back to the protocol which powers their businesses face a PR black eye.

For those versed in the dynamics of open source, Bitcoin’s patronage system as a funding model should come as no surprise. Bitcoin works in ways that are not short-term expedient, but pay dividends in the final analysis. Of course, a protocol-derived pool of rewards with which to pay developers would have been much more convenient, but it would have completely undermined the political neutrality of the monetary system.

Every now and again, critics bemoan the lack of a protocol-financed slush fund with which to pay for improvements and public goods. Such pools of capital, derived either through pre-mines or the ongoing diversion of block rewards, exist in Ethereum, XRP, EOS, Zcash, Dash and many other Bitcoin alternatives. But far from enhancing the prospects for these networks, these funds are a source of bickering, self-dealing and graft. They endow the protocol-proximate individuals who control the purse strings with total discretion to direct funds to allies and friends. Governance controls are generally weak and token holders lack the effective ability to monitor and police these expenditures.

When it comes to monetary neutrality, projects with protocol financing are no better than the deeply politicized USD.

These projects choose the unfortunate path of granting fiscal privileges to network administrators, effectively creating poorly-run bureaucracies. Corruption and malinvestment have been the predictable result. For networks aspiring to become critical financial infrastructure on a global scale, this constitutes a significant liability. When it comes to monetary neutrality, projects with protocol financing are no better than the deeply politicized U.S. dollar.

Even projects that do not currently expropriate validator revenue for development funds are not immune. The siren song of cheap money for development constantly rings in their ears. One notable example is Bitcoin Cash, which is currently embroiled in an ugly civil war over protocol financing. 

Due to a paucity of developers on BCH, the most influential among them can effectively extort the community into granting them remuneration financed by the protocol itself. As such, major BCH stakeholders proposed an “Infrastructure Financing Plan” that would divert block rewards to a fund dedicated to development. This would constitute an effective redistribution from the already-questionable security budget towards a fund controlled by a small handful of individuals doled out to cronies.

Because BCH never developed a meaningful patronage system, token holders can now be shaken down to divert funds to certain developers. Even if this plan is rejected, the idea will linger. The only remedy is a stable patronage system. But no other public blockchains have Bitcoin’s combination of industry buy-in, accumulated credibility, and neutrality from inception, so the emergence of similar patronage models appears unlikely. 

This is one of Bitcoin’s underappreciated advantages: by committing to a stable set of rules, Bitcoin has insulated itself from the expropriation of its supply for political expediency.

Disclosure

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Goldman Sachs Eyes Own Token as Bank Appoints New Head of Digital Assets

Goldman Sachs is seriously considering its own cryptocurrency, possibly a stablecoin, as it significantly expands its digital assets team and appoints a new head to spearhead efforts.

Disclosure

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Younger Investors Prefer Bitcoin While Older Go With Gold, JPMorgan Says

A team of strategist led by Nikolaos Panigirtzoglou at JPMorgan Chase have made a case that younger investors often prefer bitcoin when choosing an alternative investment, while older investors go with gold.

According to Bloomberg, in a note sent on August 4 the JPMorgan Strategists pointed out that millennials prefer tech stocks, while older investors are selling their shares and buying bonds. The strategists were quoted as saying:

The older cohorts continued to deploy their excess liquidity into bond funds, the buying of which remained strong during both June and July.

So far this year, retail investor demand has jumped, according to Bloomberg, as evidence by the stock market’s jump from its March lows, which came shortly after the World Health Organization (WHO) declared the COVID-19 outbreak a pandemic. At the time the price of bitocin and other cryptocurrencies also plummeted, and since then cryptos have outperformed equities.

As both young and older investors see the case for an “alternative” currency, the strategists wrote the inflows to gold and bitcoin-related products have been increasing over the past five months. The prices of both assets have also been moving up steadily.

CNBC reports gold broke past the $2,000 mark this week for the first time in history, as the ultra-low interest rate environment and hopes for more government stimulus to safeguard the economy have seen investors bet on the precious metal.  Bitcoin, on the other hand, broke through the $10,000 mark last month and has been hovering over $11,000 since.

CryptoCompare data shows BTC has been outperforming gold, represented in the chart via the Paxos Gold (PAXG) cryptocurrency, an ERC-20 token backed by physical gold. Per Paxos, one PAXG token is backed by one fine troy ounce of a 400 oz London Good Delivery gold bar.

Source: CryptoCompare

Both bitcoin and gold are likely moving up as they are seen as safe havens. Over the last few months the Federal Reserve’s balance sheet has swollen past the $7 trillion mark, while the U.S. dollar has tested lows not seen for about two years. This, coupled with ultra-low interest rates, has seen investors move towards alternative assets.

Featured image by Dmitry Demidko on Unsplash.

Bitmain Delays Antminer Shipments Amid Internal Conflicts

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If you are on a personal connection, like at home, you can run an anti-virus scan on your device to make sure it is not infected with malware.

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