Three US States Going After BlockFi In Regulatory Crackdown

New Jersey, Texas, and Alabama have individual state regulators issuing concerns that New Jersey-based DeFi firm, BlockFi, is offering unregistered securities. Regulators seem to particularly point to BlockFi’s Interest Account (BIA), which offers rates that consumers are now becoming accustomed to in DeFi – but that have blown traditional banking rates out of the water.

The ‘Unusual Three’

Crypto in it’s relatively early emergence in discussions around regulation and broader adoption, has largely been considered a somewhat bipartisan topic. Which makes the three states going after BlockFi a particularly unusual trio. New Jersey, the company’s home state and traditionally a very Democratic-run state at that, is arguably the most aggressive of the three states making claims against the firm. New Jersey has ordered BlockFi to stop offering it’s BIA product to state residents by July 29 according to a recent cease and desist from the state’s Bureau of Securities.

Texas, a traditionally Republican-led state, has also issued a cease and desist with a hearing date currently set for October. The document also cites BIAs as a concern, stating that BlockFi “is, in part, illegally funding its lending operations and proprietary trading through the sale of unregistered securities in the form of cryptocurrency interest-earning accounts.”

Finally, we have another typically Republican-led state in Alabama issuing a ‘Show Cause Order‘ to BlockFi this past week. The company now has less than 30 days to show the state securities commission why they should not be issued a cease and desist for selling unregistered securities. The show cause document suggests that BIAs should be registered with applicable securities regulators.

It’s becoming pretty clear, at least in the case of BlockFi recently, that regulatory hurdles do not live on any particular side of the political aisle.

Bitcoin's can be deposited into BlockFi's BIA product to yield substantial interest-bearing returns.  | Source: BTC-USD on TradingView.com

Related Reading | Uniswap Limits Access To Certain Tokens, What It Could Mean For The DeFi Sector

Is DeFi In Trouble?

BlockFi issued a recent responding statement in a tweet that stated that the firm wholeheartedly believed that it’s BIAs were “lawful and appropriate for crypto market participants”, adding that the company welcomes “discussions with regulators and believe(s) that appropriate regulation of this industry is key to its future success.”

It’s difficult to say the impacts in such an early stage of aggressive regulatory attacks on DeFi, particularly given that of the major players in the yield-generating space, only BlockFi is being highlighted here. Will other states join these three, and will major BlockFi competitors start facing challenges as well? Or are these state regulators simply cracking a proverbial whip – or are there enough substantial differences in how BlockFi competitors, such as Nexo or Celsius, are funding their interest-bearing accounts that leave them absorbing less regulatory risk? Either way, it is becoming abundantly clear that crypto’s relatively quick mainstream success, paired with slow-moving federal decision making, will leave emerging firms – but hopefully not forward-thinking consumers – with some inherent challenges.

Related Reading | Tether To Conduct An Audit To Negate Claims Concerning Transparency

Featured image from Pixabay, Charts from TradingView.com

Tether To Conduct An Audit To Negate Claims Concerning Transparency

The Tether general counsel has declared an official audit in few months. USDT is a popular stablecoin occupying the third position in global digital assets. As it’s on blockchain that cybersecurity experts deem unhackable, the majority today trusts its security.

Related Reading | Cardano Aims To Facilitate Users With Smart Contracts

However, many people in the crypto community have been waiting for a financial audit of the stablecoin. Now, it seems that the ongoing regulatory issues in the crypto industry have galvanized the Tether team into action. As a result, they’re declaring that an audit will take place soon.

Tether Executives Grants Media Interview

Another rare incident is an interview in which the Tether CTO Paolo Arduino and Stu Hoegner, the general counsel, participated on CNBC.

During the interview, the hosts asked the duo some questions about USDT’s transparency and backing. In response, the general counsel stated that the team is working to be the first in their sector to get financial audits.

Tether To Conduct An Audit In Upcoming Months To Negate Claims Concerning Transparency

The crypto market has just turned bullish as the USDT trades in the green zone | Source: USDTUSD on TradingView.com

He also mentioned that the audits would come in months and not years. As for backing, he stated that the stablecoin is backed with reserves.

But Hoegner mentioned that some of the reserves are not US dollars. But the reserves are more US dollars plus other cash equivalents, secured loans, crypto assets, bonds, and others.

Related Reading | Anthony Di Lorio To Leave Cryptocurrency Space For Philanthropic Initiatives

However, in the Transparency report which Tether published, the market cap for USDT stands at $62 billion. Even though the number has increased by 195% since 2021 started, it is still behind competitors such as BUSD and USDC.

When Circle released a reserve report yesterday, July 21, it showed that 61% of the USDC reserves are cash & cash equivalent. The remaining 39% are in treasuries, bonds, and commercial paper accounts.

Taxes Decides To Attack

Paxos is a rival to Tether and recently attacked the stablecoin and Circle through its blog post on July 21, 2021. In the post, Paxos claims that the duo is not operating under financial regulators. In his words, both USDC and Tether are simply Stablecoins in name only.

Paxos disclosed that its stablecoin reserves are a combination of cash or cash equivalents to support its claims.

Related Reading | Ether EFT Gets Approval From Brazilian Securities Regulator

But in May, Tether disclosed the total backing that USDT has, which were cash 3.87%, fiduciary deposits 24.20%, treasury bills 2.94%, cash equivalents, commercial papers, which make up 65.39% plus others. This action was because the US lawmakers are closely scrutinizing its operations.

Also, Tether started submitting reports about its reserves after it reached a settlement agreement with the NY Attorney General’s Office 5 months ago. The firm has continued to send these reports since then.

Featured image from Pexels, chart from TradingView.com

Uniswap Labs Limits Access To Certain Tokens, What It Could Mean For The DeFi Sector

Software development studio Uniswap Labs (UL) announced the restriction of certain tokens via the app.uniswap.org domain. The company claims to be taking part in “creating a better” financial system and has taken the decision after reviewing the regulatory landscape and the actions of other “DeFi interfaces”.

The token removed from the domain represented a “very small portion of overall” trading volume on the platform, UL claims. Amongst the restricted tokens is Gold Tether (XAUt), Grump Cat (GRUMPY), iAAVE, iADA, iBNB, sAPPL, sCOIN, and many more related to options, tokenized stocks, and securities from traditional companies.

The software studio clarified that the Uniswap Protocol is a separate entity from the interface accessible via the app.uniswap.org domain.

(…) It provides unrestricted access to anyone with an Internet connection. Similarly, this action has no impact on the Uniswap Interface code, which remains open source, or the many other portals or locally run instances used to access the Uniswap Protocol.

The same clarification was made by Hayden Adams, inventor of the protocol, via his Twitter account. After receiving a lot of criticism for their decision, Adams reminded his followers about the difference between Uniswap Interface, the open-source GPL code, app.uniswap.org, the domain, and Uniswap the protocol.

Later, he added that true decentralization “doesn’t mean UL lets you do whatever you want on its website”, but that users can access the protocol via other interfaces. He added:

(In my opinion) the Uniswap Protocol remains the most decentralized of the top defi protocols by a wide margin. Why: Non-upgradable and permissionless smart contracts, w/ no admin keys or ability for UNI holders to steal underlying liquidity.

Is Uniswap Labs Trying To Prevent A Government Crackdown?

Of course, Adam’s statements caused different reactions across the crypto community. Stanislav Kulechov, a founder of decentralized protocol Aave, said that “DeFi front-ends should” be hosted on the InterPlanetary File System (IPFS).

In that way, the protocols can be “less dependent on the founding team” and maintain their decentralization. Kulechov also proposed a Bring-Your-Own-Front-End (BYOF) solution that would allow users to download the software into a device to access the protocol.

Gabriel Shapiro, General Counselor at Delphi Labs, pointed out the possibility that anyone who forks the Uniswap front-end could receive a lawsuit from the software development studio UL. Shapiro said that the company “like DMCA (Digital Millennium Copyright Act) takedown requests”.

In a different post, Shapiro addressed the rumors suggesting that UL and other DeFi projects received subpoenas from the Securities and Exchange Commission (SEC).

A few days ago, Senator Elizabeth Warren send a letter to the SEC Chair, Gary Gensler. Warren requested clarity on regulations regarding cryptocurrencies, stablecoins, and DeFi with a deadline set for July 28th, 2021, for Gensler to replied.

Many argued that UL decision could be related to that event and to the aforementioned subpoenas. Shapiro doesn’t completely rule out this possibility but claims that they only rumor to be taken with a grain of salt.

At the time of writing, UNI and other major DeFi tokens haven’t reacted to these events. Uniswap’s governance token trades at $18,17 with a 4.1% in the daily chart.

Uniswap UNIUSDT
UNI with small losses in the daily chart. Source: UNIUSDT Tradingview

Cardano Aims To Facilitate Users With Smart Contracts

According to the announcement from IOHK, “Project Alonzon testnet” has moved from Blue to White and is making it possible for Cardano to launch smart contracts.

IOHK is the development team of the Cardano blockchain. The team made the announcement recently, revealing that the testnet is successful.

Related Reading | Anthony Di Lorio To Leave Cryptocurrency Space For Philanthropic Initiatives

In their announcement, the development team shared the success of the “#Alonzon testnet” fork to a new version, “#AlonzonWhitenode.” The announcement also disclosed that the latest version has commenced making blocks immediately.

This new fork is taking the network a step further to launching smart contracts, which will be beneficial for its users.

Cardano Testnet Had Limitations

The first Cardano testnet may have offered smart contracts, but there were some limitations. The smart contract features it had were only for some people who are core insiders of the blockchain.

Related Reading | Ether EFT Gets Approval From Brazilian Securities Regulator

Given the upgrade that the team has announced, the network can now accommodate up to 500 validators, developers, and stake pool operators who will test the features.

According to the announcement, the new Fork “Alonzon white” will run for 2 to 4 weeks. Then, it will upgrade to the Alonzo Purple, which is the final testnet for this current phase of its development.

Before now, there has been some backlash against the network from the community.

However, even with all those issues, the Cardano blockchain founder Charles Hoskinson assured the community that the project is moving as they planned it. He made this statement on Youtube, saying that the team is following the roadmap they set earlier for the project.

Hoskinson also noted that Cardano had facilitated the sale of over $10 million worth of NFTs on its network. Also, apart from the NFTs, the founder mentioned that the network had facilitated assets sales worth tens of thousands.

Cardano Aims To Facilitate Users With Smart Contracts

The ADA market is flourishing after a hectic week of trading in the red zone | Source: ADAUSD on TradingView.com

He continued to assure the community that the release of Alonzo White to the Cardano mainnet will enable developers to launch NFTs, dApps, and other projects.

More Developments in DeFi

After the announcement of the Alonzo white fork, a DeFi and NFT marketplace, Spores Network disclosed that it had raised a whopping $2.3 million through its fundraising event yesterday, July 16, 2021.

According to the company, it plans to utilize the best features of Cardano, such as low transaction costs, higher transaction throughput, and low carbon footprint, to make NFTs available for mainstream users.

Related Reading | Nifty’s Inc. Partners With Warner Bros To Roll Out A Social NFT Platform

In recent times, more and more artists and companies are joining the NFT market. Some notable ones include Dolce & Cabbana plus Sorare, a “fantasy soccer NFT platform.”

In addition, Sorare recently closed a $532M in a funding round. All these interests and collaboration mean more gains to the Cardano network and the people who use it.

Featured image from Pexels, chart from TradingView.com

BSC Flash Loan Attack: The Three Copycats

A series of attacks compromised several Binance Smart Chain (BSC) projects in May. Following PancakeBunny, its three forks projects — AutoShark, Merlin Labs, and PancakeHunny — were also attacked using similar techniques. PancakeBunny suffered the most costly attack of the four, which saw nearly $45M in total damages. In this article, Dr. Chiachih Wu, Head of the Amber Group Blockchain Security Team, elaborates on the details behind the attacks on the three copycats.

Copycats

AutoShark was attacked five days after PancakeBunny, followed by Merlin Labs and PancakeHunny, respectively. The following is an analysis of the problems and possible attack techniques for these three forked projects.

In the SharkMinter.mintFor() function, the amount of rewarding SHARK tokens to be minted (i.e., mintShark) is derived from sharkBNBAmount computed by tokenToSharkBNB() in line 1494. However, tokenToSharkBNB() references the current balance of flip, which makes it a vulnerable point. One could assume that the amount of tokens received in line 1492 is equal to the amount of the flip balance. Still, a bad actor could manipulate the flip balance simply by sending in some flip tokens right before the getReward() call and indirectly breaking the logic of tokenToSharkBNB().

In the underlying implementation of tokenToSharkBNB() , there’s another attack surface. As shown in the above code snippet, _flipToSharkBNBFlip() removes liquidity from ApeSwap (line 1243) or PantherSwap (line 1262) and converts the LP tokens into SHARK+WBNB. Later on, the generateFlipToken() is invoked to convert SHARK+WBNB into SHARK-BNB LP tokens.

Inside generateFlipToken() , the current SHARK and WBNB balances of SharkMinter (amountADesired, amountBDesired) are used to generated LP tokens and the amount of LP tokens are returned to mintFor() as sharkBNBAmount. Based on that, the bad actor could transfer SHARK+WBNB into SharkMinter to manipulate the amount of SHARK tokens to be minted as well.

The loophole in PancakeHunny is identical to that found in AutoShark, in that the bad actor can manipulate HUNNY reward minting with HUNNY and WBNB tokens.

Compared to AutoShark and PancakeHunny, Merlin Labs’ _getReward() has a more obvious vulnerability.

The code snippet above shows that the performanceFee could be manipulated by the balance of CAKE, which indirectly affects the MERL rewards minting. However, the nonContract modifier gets rid of flash loans.

Even without an exploit contract, the bad actor could still profit through multiple calls.

Reproducing AutoShark Attack

To reproduce the AutoShark hack, we need to first get some SHARK-BNB-LP tokens from PantherSwap. Specifically, we swap 0.5 WBNB into SHARK (line 58) and transfer the rest WBNB with those SHARK tokens into PantherSwap for minting SHARK-BNB-LP tokens (line 64). Later on, we deposit those LP tokens into AutoShark’s StrategyCompoundFLIP contract (line 69) to qualify for rewards. Note that we purposely only deposit half of the LP tokens in line 69.

The second step is to make getReward() go into the SharkMinter contract. In the above code snippet, we know that the reward can be retrieved by the earned() function (line 1658). Besides, 30% of the reward (i.e., performanceFee) should be greater than 1,000 (i.e., DUST) to trigger the SharkMinter.mintFor() in line 1668.

Therefore, in our exploit code, we transfer some LP tokens to the StrategyCompoundFLIP contract in line 76 to bypass the performanceFee > DUST check and trigger the mintFor() call. Since we need a lot of WBNB+SHARK to manipulate SharkMinter, we leverage PantherSwap’s 100k WBNB via a flash-swap call in line 81.

In the flash-swap callback, pancakeCall(), we exchange half of the WBNB into SHARK and send the SHARK with the remaining 50,000 WBNB to the SharkMinter contract to manipulate the reward minting.

The next step is to trigger getReward() when the SharkMinter receives the WBNB+SHARK tokens to mint a large amount of SHARK to the caller.

The last step is to convert SHARK to WBNB, pay the flash loan, and walk away with the remaining WBNB tokens.

In our experiment, the bad actor starts with 1 WBNB. With the help of flash loans, he profits from more than 1,000 WBNB being returned in one transaction.

Reproducing PancakeHunny Attack

The theory behind the PancakeHunny attack is similar to the AutoShark attack. In brief, we need to send a lot of HUNNY+WBNB to HunnyMinter before triggering getReward(). However, the HUNNY token contract has a protection mechanism called antiWhale to prevent large amount transfers. Therefore, flash loans do not work here.

To bypass antiWhale, we create multiple child contracts and initiate multiple CakeFlipVault.deposit() calls via said contracts.

In the above exploit code snippet, the LP tokens gathered in line 116 are divided into 10 parts and transferred to 10 Lib contracts in line 122 followed by Lib.prepare() calls for each of them.

Inside Lib.prepare(), we approve() the CakeFlipVault to spend the LP tokens and invoke CakeFlipVault.deposit() to enable the later getReward() calls for minting rewarding HUNNY tokens.

After preparing 10 Lib contracts, the main contract iterates each of them to: 1) swap WBNB to the maximum allowable amount of HUNNY; 2) transfer WBNB+HUNNY to HunnyMinter; 3) trigger getReward() via lib.trigger(); and 4) swap HUNNY back to WBNB.

In the end, the bad actor with 10 WBNB earns around 200 WBNB from 10 runs of 10 Lib contracts operations.

Reproducing Merlin Labs Attack

As mentioned earlier, Merlin Labs has the noContract modifier to get rid of flash loan attacks. However, we could use a script to trigger the attack with multiple transactions initiated from an EOA (Externally Owned Account) address. The only difference is that someone may front-run the bad actor’s transaction to steal the profits.

Similar to the AutoShark attack, we need to prepare enough LINK and WBNB (line 23), use them to mint WBNB-LINK-LP tokens (line 34), and deposit LP tokens into VaultFlipCake contract (line 38).

The remaining actions are:

  1. Swapping WBNB to CAKE (line 42).
  2. Manipulating MERL minting by sending CAKE to VaultFlipToCake contract (line 50).
  3. Triggering getReward() in line 55 (a large amount of MERL tokens are minted).
  4. Swapping MERL back to WBNB and repeating the above steps multiple times.

As mentioned earlier, if someone front runs step 3 right after step 2, that person could remove a large amount of MERL.

In our experiment, the bad actor starts with 10 WBNB and walks away with around 165 WBNB by repeating the four steps 10 times.

About Amber Group

Amber Group is a leading global crypto finance service provider operating around the world and around the clock with a presence in Hong Kong, Taipei, Seoul, and Vancouver. Founded in 2017, Amber Group services over 500 institutional clients and has cumulatively traded over $500 billion across 100+ electronic exchanges, with over $1.5 billion in assets under management. In 2021, Amber Group raised $100 million in Series B funding and became the latest FinTech unicorn valued at over $1 billion. For more information, please visit www.ambergroup.io.

Investing In Bitcoin Mining Businesses Is Also A Sign Of Institutional Acceptance

Last quarter, the New Jersey Pension Fund invested heavily in two Bitcoin mining giants. A small step for institutional investors, the move might represent something much bigger. There’s a hunger for Bitcoin exposure at the highest levels, but just owning the asset might be too risky or inconvenient for some of those big players. And, until the US government approves the long-awaited Bitcoin ETF, miners provide a much safer target. 

Related Reading | Marathon Digital Holdings Reported A 17% Spike In Bitcoin Mining

According to Coindesk:

The state-managed pension ended June with $3.66 million in Riot Blockchain (NASDAQ: RIOT) and $3.39 million in Marathon Digital Holdings (NASDAQ: MARA), according to disclosure documents.

New Jersey’s Common Pension Fund D has $30 billion in total assets for state employees.

The New Jersey Pension Fund’s intent is clear, and they put their money where their mouth is. However, is there a reason that explains why they don’t want to hold the asset? A legal reason, perhaps? The polemic Michael Saylor explains their rationale in this tweet

Many institutional investors find publicly traded Bitcoin miners to be attractive investments because they want BTC exposure but prefer to hold securities rather than property due to tax, accounting, & business considerations.

So, there are several reasons besides Bitcoin’s volatility. Nevertheless, there’s a hunger.

RIOT price chart - TradingView

RIOT price chart on Nasdaq | Source: RIOT on TradingView.com

Is Bitcoin Feasible As An Institutional Investment?

Bitcoin is maturing and spreading. The title phrase is the same NewsBTC used three years ago in an article that came to the conclusion that the asset wasn’t ready. We said:

In its current state, the market is highly speculative, with a majority of investors looking to make a quick buck. Institutional investors have seen that, and have mostly shied away from opening their wallets for the industry. These investors are looking for long-term returns, securing the trust of consumers over time rather than making a quick buck.

The tables turned. The situation changed. At the present, we are in an era in which some of the more innovative institutions already invested and drove the price to insane all-time highs… only to take their earnings and let it drop again. In any case, Bitcoin is proving its worth as institutional investment. About this situation, NewsBTC said:

These high wealth players with decades of market experience and all kinds of tactics on their side were paramount to driving prices up to $60,000 per coin. Unfortunately, the data above suggests they were also instrumental to the selloff that left retail traders with a bloody aftermath.

Related Reading | Brazil approves Bitcoin ETF – SkyBridge files for its own

What About a Bitcoin ETF? Is That In The Cards?

The only factor left unexplored is the possibility of a Bitcoin ETF in the US. As you should know, every financial institution and their mothers applied, and some of them have already been rejected. NewsBTC quoted Hester Pierce, Securities and Exchange Commission (SEC) Commissioner, who said about the situation:

(Institutions) want access to crypto through a regulated market. It makes sense for us to consider how to do that (…). We’ve dug ourselves into a little bit of a hole. A lot of people are looking for a way to access the asset class. We waited a long time to approve this kind of product.

Sadly for us, we’re still waiting.

Featured Image by MayoFi from Pixabay - Charts by TradingView

Ethereum EIP-3675 For ETH 2.0 Upgrade Launches On GitHub

The Ethereum Improvement Proposal (EIP) 3675 has now launched on GitHub. EIP-3675 contains the ETH 2.0 proof of stake merge that is coming to the network. Although this does not mean that the move to proof of stake is happening anytime soon, it is bringing the Ethereum network one step closer to the move from proof of work to proof of stake.

Consensus researcher Mikhail Kalinin creating a pull request for the EIP-3675 on GitHub formalized the chain merge as an improvement proposal for the first time ever. The pull request was made on Thursday 22nd July 2021.

Related Reading | Ethereum Price Could Go Up Over 860% To Break $10,000, Crypto Analyst

Ethereum developers continue to work towards the merging of the Ethereum Mainnet with the already up and running Beacon Chain, which would mark the final step for the move to proof of stake.

The EIP-3675 is meant to set the stage for “The Merge,” which is slated to be discussed at a core developers’ meeting that will be held on Friday, July 23rd.

ETH 2.0 Delays

Ethereum co-founder Vitalik Buterin had confirmed that the move to ETH 2.0 had been delayed. But according to the CEO, a couple of factors had contributed to the delay of the project.

Firstly was that they had expected it to take a much shorter time than it would have. When the project was first proposed, the team had believed the move to proof of stake would only take a year. It turned out to be a project that would take at least six years to accomplish.

Ethereum price chart from TradingView.com

ETH price shows downwards movement post-recovery | Source: ETHUSD on TradingView.com

Another problem that the Ethereum upgrade had encountered had been team conflicts. It had been speculated that technical difficulties had been the reason for the continuous delays but in the end, Buterin confirmed that the problem was in fact not related to technical problems. One of the major causes for the delays had been with the people working on the project.

Related Reading | Ethereum Whales Go On Buying Spree, Top 10 Addresses Now Own 20% Of All ETH

One of the biggest problems I’ve found with our project is not the technical problems,” said Buterin. “It’s problems related to people. We have a lot of internal team conflicts in these five years.”

Continous disagreements and team conflicts seem to plague the project. The CEO is quoted saying, “if you are building a team, it is important to know who you are working with.”

Ethereum Progression So Far

Expectations for the network continue to remain high. Ethereum price itself has taken hits over the past months as the crypto market continues to be beaten down by bears. But despite the declining prices, holders continue to stake their coins ahead of the move to proof of stake.

Over 6.3 million ETH have been staked on the Ethereum network, accounting for over 5% of the current circulating supply of ETH.

Related Reading | As Ethereum Price Suffers, Investors Wonder If ETH Can Become Deflationary

Investors had hoped shard chains would be rollout this year but this is unlikely as the possible date of launch for the shard chains has now been moved to 2020.

Ethereum’s price continues to trade above $2,000 after the boost it received from Elon Musk. With a current market cap of $234.05B.

Solana to Launch Stake Pools, This Is How It Will Enable Rewards For SOL Holders

The Solana Foundation has announced Stake Pools to increase the network’s security, promote censorship resistance, and rewards SOL holders in the process. The announcement was made via their official Twitter handle.

The Stake Pool program was enabled via an on-chain governance process, as the Solana Foundation said. Any SOL holder can participate in the process via SolFlare, a non-custodial wallet that allows users to connect with this network.

SOL token holders can earn rewards and help secure the network by staking tokens to one or more validators. Rewards for staked tokens are based on the current inflation rate, total number of SOL staked on the network, and an individual validator’s uptime and commission (fee).

The program was launched to increase the network ability to withstand disruption or attacks, the Solana Foundation said. This capacity is partially measured by looking at the “superminority”, the smallest number of validators capable of launching a successful attack.

Thus, the Stake Pools operate as incentives for the users to place their SOL funds between independent validators, the announcement clarified. As the stake distribution increase, so does the network’s security.

Solana is already one of the most censorship resistant networks (our superminority group is currently 16), but the Solana Foundation can do even more to increase stake distribution.

How To Earn Rewards While Securing Solana

When a user stakes their SOL token, these are distributed across “a larger number of validators”. Then, users earn tokens for delegators represented by the amount deposited, as stated above, plus rewards for staking.

The rewards can be use in other decentralized finance (DeFi) apps, the Solana Foundation said. For example, in the automated market maker Raydium or the decentralized exchange (DEX) Serum.

The stake pool system is comprised of 3 main actors: the manager, capable of earn and update the fess, the staker, capable of adding and removing validators to a pool and rebalancing stake, and the users, those that provide the SOL for an existing stake pool. The Solana Foundation said:

(…) the stake pool only processes totally active stakes. Deposits must come from fully active stakes, and withdrawals return a fully active stake account. This means that stake pool managers, stakers, and users must be comfortable with creating and delegating stakes, which are more advanced operations than sending and receiving SPL tokens and SOL.

Stake pool participates will be able to profit from additional incentives if they meet any of 3 criteria, the Foundation said. First, if they launch a stake pool by August 30, 2021, promoting a definition of censorship resistance. These managers will be eligible for a 100 SOL reward.

If they also reached 100,000 SOL deposit to their pool, they wil receive a 200 SOL grant or a 1,000 SOL grant if they reached 1,000,000 SOL staked.

At the time of writing, SOL trades at $27,01 with a 2.9% loss in the daily chart.

Solana SOL SOLUSDT
SOL with small losses in the daily chart. Source: SOLUSDT Tradingview

This Bitcoin Indicator Might Suggest Bull Run Is Still On

The MVRV ratio, a Bitcoin indicator, might suggest that the current bull run isn’t over, and the price of the crypto is yet to peak.

The MVRV Ratio Indicates The Cycle Isn’t Over Yet

As pointed out by a Crypto Quant post, past cycles seem to follow a specific pattern on the MVRV charts. This might suggest that the current bull run hasn’t peaked yet.

MVRV stands for “Market Value to Realized Value”. The ratio is defined as Bitcoin’s market capitalization divided by realized capitalization.

Related Reading | SpaceX Has Bitcoin On Its Balance Sheet, Elon Musk

MVRV Ratio = Market Cap ÷ Realized Cap

The MVRV ratio is useful for knowing whether the current price is fair or not. If the value is very high, it means Bitcoin’s price might be overvalued, and thus investors would tend to have selling pressure.

On the other hand, if the value of the indicator is low, it might suggest that the price of BTC is undervalued, which could result in buying pressure in the market.

Related Reading | Bitcoin Volume Continues To See Yearly Lows As Price Struggles To Recover

Now, here is how the Bitcoin MVRV ratio chart looks like for the 2013 cycle:

Bitcoin MVRV 2013 Cycle

The BTC MVRV zones seem to decide bottom and top

In the above chart, the blue zone indicates a bottom. The MVRV ratio line only touches this zone during a bear market, while the red box signifies a top.

In the middle is another box with the color green. The MVRV ratio seems to touch this zone once after reaching a top in the middle of the bull run, only to go back up again for the true top.

Because of this, when the MVRV ratio touches the green zone after a correction, buying Bitcoin might be a good choice.

Below is the chart that shows the 2017 cycle as well as the current run.

Bitcoin MVRV current

BTC MVRV shows current cycle may not have reached the top yet

As is clear from the chart, the 2017 cycle also seemed to have followed a similar pattern where a top happened mid-cycle and then a correction brought it into a green zone.

From the looks of it, the current cycle might just be in the middle right now, and a new top might be ahead.

Bitcoin Price

At the time of writing, BTC’s price is around $k, down % in the last 7 days. Here is a chart showing the trend in the crypto’s price:

Bitcoin Price Chart

BTC's price seems to be back on a uptrend | Source: TradngView

If the pattern of the MVRV ratio holds true, the bull run may not have reached a top in this run yet. So that the price might be heading up soon. However, this cycle could end up being different nonetheless, and a bear market might be ahead instead.

Featured image from Pexels.com, charts from CryptoQuant, TradingView.com

Harmony Organizes $1M Hackathon To Bridge DeFi and Traditional Finance

According to the information available, Harmony Hackathon will last for six weeks. The Hackathon will commence on August 15, 2021, and ends on September 30, 2021.

Related Reading | Ether EFT Gets Approval From Brazilian Securities Regulator

There will be three categories, and each one will have four challenges for the experts to complete.

Presently, the organizers, Harmony blockchain, have disclosed that the registration for the event will start in August. Also, there are more than one million dollars available in seed funds and participant prizes. The company made the announcement on Thursday through Twitter.

According to the announcement, the hackathon aims to achieve cooperation between traditional finance and decentralized finance.

Furthermore, the team aims at bringing more people from the traditional finance sector to tackle the challenges affecting both their industry and the DeFi sector.

A Brief On Upcoming Hackathon

According to what Harmony revealed, the Hackathon will come in three categories. These categories will have four challenges, including cross-chain & trustless bridges, cross-border with fintech integration, social wallets & keyless security.

Harmony also made some statements on Twitter saying that blockchain finance is where there’s product-market fit. However, many people who created decentralized finance are not of traditional finance.

Harmony Organizes $1M Hackathon To Bridge DeFi and Traditional Finance
Image Credit:  Harmony Official Twitter

Therefore, Harmony aims at bringing more traditional finance experts to add their knowledge to decentralized finance.

Harmony also mentioned that traditional finance experts have many things to teach them in DeFi. Likewise, DeFi practitioners can also help them understand the sector more and learn how to utilize it. So, it will be a mutually beneficial event for both TradiFi and Defi.

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Concerning the event, Harmony disclosed some people who will speak in the event or serve as judges for the participants.

According to the blockchain, these people include, Omakase, the core developer of SushiSwap, Lily Liu, the co-founder of Earn.com, the lead for DeFi Alliance Imran Khan, and other prominent people in the industry.

Also, the event sponsors include Messari, SushiSwap, CoinGeckom, Unstoppable Domains, DoraHacks, DappRadar, Hummingbot, and The Defiant, a news platform.

A Brief on Harmony

Harmony is a Sharding protocol that uses a “Trustless Ethereum Bridge” to separate its blockchain into different segments. These segments are responsible for the processing and storage of data in parallel.

The mainnet launched in 2019, and since then, the company has partnered with many others to push its operations further. Also, Harmony has completed many integrations since then as well. For instance, it added Terra to its blockchain to use the token on the apps in the ecosystem.

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The blockchain disclosed that it would sponsor the Hackathon in June. According to the blockchain, it aims to reach 10 billion users, which is a way to achieve it.

The registration will end on August 15, and teams can only be 5 people. Once they reached the submission deadline, the event will kick-off.

Featured image from Pixabay