Author: Jody McDonald

Jody is a Brisbane-based freelance writer who specialises in writing about business, technology, and the future of work.

Categories
China Crypto News GMT Token Markets Regulation

STEPN’s Move-to-Earn GMT Token Tanks 40% After China Ban

The Solana-based move-to-earn game STEPN saw its governance token GMT plunge almost 40 percent in 24 hours, according to CoinGecko, following news that mainland Chinese users will effectively be barred from using the service from July 15, 2022. 

STEPN was forced to begin blocking mainland Chinese users in order to comply with Chinese crypto regulations, which regard foreign cryptocurrency exchanges that provide services to mainland Chinese citizens as being engaged in illegal financial activities.

Chinese Users Can Move, But Not Earn

STEPN’s decision to act now was likely triggered by the Chinese central bank’s recent warnings about crypto exchanges operating in China, which may lead to legal problems for members of their teams based there. 

During a Twitter Spaces discussion on May 27, a STEPN representative said that its technical team is based in China and that it is “targeted” by the regulations, despite the business itself not operating in China.

While users in mainland China will still technically be able to access STEPN, the GPS functionality will be deactivated, meaning those users will still be able to move, they just won’t be able to earn – essentially rendering the service useless.

In a recent tweet, STEPN affirmed its commitment to adhering to local regulations, saying the company “has always attached great importance to compliance obligations and strictly abides by the relevant requirements of local regulatory agencies”.

Australian-Based Startup Leads Move-To-Earn Boom

STEPN was founded in December 2021 by Jerry Huang and Yawn Rong and is based in Australia. The game allows users to earn crypto by exercising, which can then be traded for other cryptocurrencies or converted to fiat.

STEPN has led the recent move-to-earn craze in crypto, with more than 580,000 registered users, about 39,000 active daily users and enormous growth in the value of its various tokens in the early part of 2022.

As is often the case in crypto, STEPN has increasingly become a target for scams as it has gained popularity – in April, blockchain security watchdog PeckShield warned about the growth in phishing scams targeting STEPN users.

Categories
Crypto News Stablecoins Terra

LUNA Investor Arrested for Knocking on Founder’s Door After Losing $2.4 Million

A South Korean investor who claims to have lost US$2.4 million in the Terra ecosystem collapse earlier this month has been arrested after knocking on Terraform Labs founder Do Kwon’s door and attempting to speak to him about the loss.

Despite not technically trespassing on Kwon’s property, the investor is believed to have broken South Korean law by trying to approach Kwon and will likely face a fine.

Lack of Public Statements Prompted Personal Visit

The investor, a social media personality known as ‘Chancers’, says he was distressed after suddenly losing three billion won (US$2.4 million) in the catastrophic collapse of Terra, after the Terra-based stablecoin UST lost its peg to the US dollar.

I felt like I was going to die. I lost a lot of money in a short period of time. Around $2.4m of my cryptocurrency was wiped out.

Chancers, aggrieved LUNA investor

This combined with virtual silence from anyone involved with Terra regarding the state of the network drove Chancers to attempt to speak with Do Kwon directly. 

After finding Kwon’s address online, Chancers travelled across Seoul to confront him in person, while live-streaming to about 100 viewers.  Explaining the intention of his visit, Chancers said: “I wanted to ask him about his plans for LUNA; I suffered a huge loss and wanted to talk to him directly.”

Wife Calls Police, Investor Turns Himself In

When Chancers arrived at Kwon’s property, he was greeted by Kwon’s wife who said Kwon wasn’t home and called the police.

The following day Chancers found out police were searching for him and on May 13 he turned himself in to the local station. Despite the fact he didn’t trespass on or damage any property, Chancers now expects to be charged and faces a fine and a criminal record.

“It’s so hard,” Chancers lamented. “I lost a lot of money and now I’m being investigated by the police. I originally served as a civil servant in Korea. But if I am convicted of this case, I may not be able to return to the civil service again.”

Other affected LUNA investors rallied to support Chancers on Twitter, and at least one of them offered some sage advice – albeit in hindsight:

In welcome news, South Korean authorities are also investigating the collapse of Terra to see if any crimes were committed in the lead-up, something many investors will be very interested to know.

Categories
Crypto News Data Filecoin

Filecoin and Lockheed Martin Set to Bring Decentralised Storage into Space

Filecoin Foundation and the aerospace corporation Lockheed Martin (LMT) announced on May 24 that they’re working together to deploy Filecoin’s Interplanetary File System (IPFS) in space. 

The companies claim existing networking protocols that are adequate for terrestrial communication, such as HTTP, will not be suitable for space-based services due to their centralisation and significant latency when transferring data over vast distances.

Following the announcement, Filecoin’s (FIL) price briefly spiked about 10 percent before retracing the gains and returning to its pre-announcement price range.

Modern Problems Require Modern Solutions

According to Lockheed Martin’s vice president of advanced programs development, Joe Landon, the space economy is rapidly developing and requires new communications and data storage infrastructure to allow businesses and governments to take full advantage. 

Landon says Lockheed Martin’s collaboration with Filecoin will be an important next step in creating this new space-based infrastructure:

Soon, space will no longer just be a destination. It will be home to the new space economy, independent of Earth, [and] the work we’re doing with Filecoin reinforces an investment in building space infrastructure. We need to develop the technology to support a long-term presence in space. 

Joe Landon, vice president, advanced programs development, Lockheed Martin

Collaboration Begins with Pilot Study

The Filecoin-Lockheed Martin collaboration starts with a study, to be completed by the end of August, which has three primary goals:

  • identify a spacecraft platform that can house the first space-based IPFS node;
  • define “mutual compatibility requirements” for the spacecraft and the IPFS node; and
  • identify demonstration missions to show off IPFS’s utility in space.

The early demonstration missions are planned to be low-Earth orbit missions, with long-term plans to conduct missions on the moon and eventually other planets.

IPFS Always Intended for Space Use

As its name suggests, Filecoin’s Interplanetary File System was always intended to be used in space. IPFS is a decentralised protocol for storing and sharing data, which uses content-addressing to uniquely identify files and then access them from the nearest available source, rather than from a centralised server. 

IPFS to reduce latency. Source: Filecoin Foundation

According to Filecoin Foundation’s president, Marta Belcher, IPFS has the potential to drastically reduce loading times and latency when used over the vast distances of space:

Today’s centralised internet model doesn’t work in space. On today’s internet, every time you click something, that data has to be retrieved from a centralised server; if you’re on the Moon, there will be a multi-second delay with every click, as content is retrieved from Earth. Using IPFS, data does not need to go back and forth from Earth with every click; instead, when you put in an IPFS ‘content ID’, that content is retrieved from wherever is closest, rather than being retrieved from a particular server in a particular place. That means if someone else nearby on the Moon has already retrieved that data, the data only has to travel a short distance and can get to you quickly instead of travelling back and forth from Earth with every click.

Marta Belcher, president and chair, Filecoin Foundation

In other Filecoin news, last month its price surged over 52 percent in a single day following the announcement of its partnership with a new NFT ecosystem.

Categories
Bitcoin Crypto News History

Bitcoin Pizza Day Flashback: When 10,000 BTC Got You 2 Pizzas

Last Sunday marked 12 years since bitcoin was first traded for real-world goods when on May 22, 2010, pioneering Bitcoin developer Laszlo Hanyecz paid 10,000 BTC for two pizzas. 

That remarkable moment led to May 22 becoming known as Bitcoin Pizza Day by crypto enthusiasts around the world, many of whom celebrate by ordering pizza with friends and paying with bitcoin if possible:

First BTC Transaction Reminds Us How Far Crypto Has Come

The transaction, which is preserved on the Bitcoin Talk forum, makes for interesting reading. On May 18, 2010, programmer Laszlo Hanyecz asks if anyone is interested in receiving bitcoin for bringing him two pizzas, which he says could be either home-made or store-bought. He goes on to articulate his tastes:

I like things like onions, peppers, sausage, mushrooms, tomatoes, pepperoni, etc … just standard stuff, no weird fish topping or anything like that. I also like regular cheese pizzas which may be cheaper to prepare or otherwise acquire. If you’re interested, please let me know and we can work out a deal.

Laszlo Hanyecz, programmer and bitcoin trader/developer

One fellow forum member named ender_x made the now almost comical observation: “10,000 … that’s quite a bit … you could sell those on bitcoinmarket.com for $41USD right now … good luck on getting your free pizza.”  

That 10,000 BTC is worth around US$300 million today – not quite what most people would describe as “free pizza”.

After a lack of interest in his initial post, a few days later Laszlo asked: “So nobody wants to buy me pizza? Is the bitcoin amount I’m offering too low?”

Eventually, on May 22, 2010, Laszlo did get his pizzas, going on to say the offer was open. In total, he paid 40,000 BTC for eight pizzas over a period of a few months. He finally stopped offering bitcoin for pizzas on August 4, 2010 when he posted to say he couldn’t afford it anymore as he could no longer generate thousands of coins a day.

Transaction Key Part of Bitcoin’s ‘Ethical Launch’

The 2010 transaction is widely seen as a huge milestone in bitcoin’s journey from obscure internet curiosity to genuine store of value, as it marks the first time it was used in a real-world sense where it functioned to transfer actual economic value. 

According to high-profile investor Michael Saylor, this transaction was also a crucial part of Bitcoin’s “ethical launch”, which he considers to have been completed when the currency’s pseudonymous “inventor” Satoshi Nakamoto disappeared on December 13, 2010: 

Since those experimental early days, bitcoin has come a long way. It’s currently valued at just over US$30,000, more than 90 percent of its supply has now been issued, its mining difficulty is around 29 trillion and its hashrate is about 200 exahashes/second. At the time Laszlo Hanyecz purchased his famous pizzas, bitcoin mining difficulty was 11 and the hashrate was around 100 megahashes/second.

Categories
Crypto News Crypto Staking Ethereum

ETH 2.0 Proof-of-Stake Merge Date Set for June This Year

Ethereum’s public testnet, known as Ropsten, is in the final stages of preparation to merge its existing proof-of-work (PoW) chain with the new proof-of-stake (PoS) chain, as revealed by a pull request submitted to the Ethereum GitHub depository on May 18. 

The test merge, expected to take place next month, is regarded as a major milestone in Ethereum’s migration from a PoW chain to a PoS chain. This news comes after a delay to the mainnet merge, which was pushed back to some time in Q3 of this year, having previously been expected to happen in June.

Code Updates Prepare Testnet For Merge

The pull request, which was merged into the code base on May 19 by Ethereum Foundation DevOps engineer Parithosh Jayanthi, added the configuration files required by Ropsten testnet clients to create a genesis version of the consensus layer, the first step in merging the PoW execution layer and the PoS consensus layer.

A tweet from Ethereum researcher Terence Tsao indicates the genesis version of the consensus layer will be created on May 30, with the full merge expected to take place around June 8:

Bug Bounty Programs Merged, Rewards Increased

As the Ethereum merge has neared, the original PoW execution layer codebase and the new PoS consensus layer codebase – once two largely separate projects – have become increasingly interconnected, prompting the Ethereum Foundation to merge its two bug bounty programs into a single unified program. 

This move reflects the reality that the two codebases are close to becoming a single entity and also incentivises bug hunters to identify bugs relating to the integration of the two codebases, as Ethereum Foundation developer Fredrik Svantes explained:

As the Execution Layer and Consensus Layer become more and more interconnected, it is increasingly valuable to combine the security efforts of these layers. There are already multiple efforts being organised by client teams and the community to further increase knowledge and expertise across the two layers. Unifying the Bounty Program will further increase visibility and coordination efforts on identifying and mitigating vulnerabilities.

Fredrik Svantes, developer, Ethereum Foundation

The Foundation has also significantly increased the  rewards on offer, including a maximum US$500,000 paid in ETH or DAI. That’s a tenfold increase over the previous maximum reward for bugs identified on the consensus layer, and double that for bugs found on the execution layer.

The merging of the Ropsten public testnet follows the implementation of the mainnet ‘shadow fork’ last month, suggesting the mainnet merge may be coming in the next few months.

Categories
Bitcoin Crypto News Ethereum Vitalik Buterin

Vitalik Buterin Opens Up About Ethereum Plans for Web3

Ethereum founder Vitalik Buterin took to Twitter this week to air a series of contradictions he sees between the direction of the network he created and his personal beliefs and values.

In the lengthy thread posted on May 17, Buterin discussed issues he characterises as “open contradictions in his thoughts and values” that revolve around Ethereum’s stability and security and its cultural and political impact.

Admiration for Bitcoin’s Stability

Buterin’s first point highlighted his admiration for Bitcoin, in particular its long-term stability, saying he’d like to see Ethereum attain a similar level of stability. To do so, however, would require significant short-term change and instability – something Buterin rightly sees as a contradiction:


Buterin Airs Views on Security, Decentralisation and Democracy

Buterin mused on the tensions between his personal beliefs and core crypto values such as decentralisation, security, and networks’ independence from specific individuals.

While expressing his love for decentralisation and democracy, he said that on a personal level he often finds himself siding with the views of intellectual elites over the opinion of the masses. 

And while his preference for Ethereum is to reduce reliance on individuals and build “fixed systems that can stand the test of time”, Buterin also admitted his appreciation for people he describes as “live players”, those who make change happen.


He also described a contradiction between his goal to make Ethereum a highly secure layer 1 network that can survive “truly extreme circumstances” and his knowledge that many important apps currently running on the network have far weaker security than he would ever deem appropriate for Ethereum itself.

Grudging Acknowledgement of NFT Craze

Buterin confessed his dislike of the NFT “art” craze exemplified by Bored Ape Yacht Club, but acknowledged such collections have played a role in funding some of the more interesting DAO and decentralised governance experiments. An example he cited was the AssangeDAO to assist Julian Assange’s legal defence, largely funded by the CypherPunks NFT community.


Buterin said that while he wanted more countries to adopt crypto, he had concerns that the kind of governments most likely to fully embrace the technology are less likely to allow freedom to flourish:


Unlike many crypto founders who shy away from difficult topics and go all in on self-promotion, Buterin is prepared to discuss flaws he sees in the Ethereum ecosystem. For example, earlier this month he shared his belief that gas fees on Ethereum layer-2 protocols should be under 10 cents to be considered “truly acceptable”.

Categories
Crypto Exchange Crypto News IDEX Markets

DEX Token (IDEX) Pumps 150% on Launch of Decentralised Perpetual Swaps

The native token of the IDEX decentralised exchange (IDEX) has seen significant gains this week, pumping over 150 percent following the announcement of IDEX version 4, which will feature decentralised perpetual swaps:

According to CoinGecko, on May 16 IDEX was trading at US$0.049 before reaching a high one day later of US$0.126. At the time of writing it was changing hands at US$0.111.

IDEX is planning to launch IDEX v4 within four to eight months, suggesting perpetual swaps could be available on the platform by the end of 2022.

Perpetual Swaps an Opportunity for IDEX to Grow

IDEX refers to itself as a hybrid DEX, or a hybrid-liquidity DEX, meaning it has elements of centralised exchanges (CEXs) – such as order books and order types usually associated with CEXs, like limit orders – all while maintaining the decentralised model that defines DEXs. 

IDEX has seen an opportunity to grow its market share by bringing perpetual swaps to the world of DEXs. Derivatives trading represents about 57 percent of total monthly trading volume in crypto markets, with one of the most popular instruments being perpetual swaps. Offering trading options traditionally dominated by centralised exchanges makes perfect sense for IDEX, given its position as a hybrid exchange.

The large gains seen by IDEX in the past few days mirror the performance of several other small-cap alts since the start of the year, including STEEM, which increased 60 percent following its launch on Binance, and MINA, which pumped 75 percent following its Coinbase listing.

Categories
DeFi Fantom Markets Stablecoins

Fantom Stablecoin ‘DEI’ Loses Dollar Peg, Sinking 35%

Following on from the collapse of TerraUSD (UST), the Fantom-based algorithmic stablecoin DEI has also lost its dollar peg, plummeting 35 percent in value to reach an all-time low of US$0.54 on May 16.

Like many algorithmic stablecoins, DEI became unstable after DeFi market confidence was rocked by the UST debacle, dropping to US$0.97 on May 15 before suddenly falling dramatically the next day. At the time of writing, DEI was trading at US$0.62:

If we take a look at the chart, it clearly shows the peg sinking into the red:

DEI/USD Chart, Source: Coinmarketcap.com

What is DEI?

DEI is an algorithmic stablecoin on the Fantom blockchain created by DeFi project DEUS Finance. It’s the unit of account for all projects built on DEUS infrastructure. 

In many ways DEI is similar to UST, the primary difference between them being that DEI is collateralised – meaning that users can mint 1 DEI by depositing US$1 of collateral in the form of either USD Coin (USDC), Fantom (FTM), Dai (DAI), wrapped Bitcoin (WBTC) or DEUS (the DEUS Finance governance token).

DEI attempts to maintain its peg much like UST by using an algorithm that incentivises arbitrage trading to maintain a stable value.

What Triggered the Crash?

The proximate cause of DEI’s decline was the loss of confidence in algorithmic stablecoins caused by the sudden collapse of LUNA and UST, though there were other factors that made DEI especially vulnerable.

The DEUS Finance ecosystem had suffered two flash loan attacks in the past two months, losing over US$30 million. In addition, the DEUS governance token has plummeted in value over the past six weeks, falling from its all-time high of US$1062.41 on April 2 to just US$218.80 at the time of writing. 

These issues have caused the collateral ratio of DEI to drop to only 43 percent, according to DEUS Finance, which means there isn’t enough capital backing the coin for users to make redemptions against their DEI, further undermining confidence.

DEUS Finance Doesn’t Want to See DEI Die

To try to avoid complete collapse, DEUS Finance has suspended redemptions of DEI in an attempt to stabilise its price. It has also announced a treasury bond program to attempt to raise funds to increase DEI’s collateral ratio and restore confidence:

Despite these efforts, some community members took to Twitter to voice their concerns that DEI may go the way of UST:

Categories
Crypto News MetaMask Scams

CoinGecko Warn Users of ‘Suspicious Pop-Ups’ Phishing Attacks

Several popular crypto websites, including those of data aggregator CoinGecko and Ethereum block explorer Etherscan, were targeted by a large-scale phishing scam last weekend that displayed malicious pop-ups prompting users to connect their MetaMask wallets.

The scam was linked to the now deactivated domain nftapes.win, which displayed the Bored Apes Yacht Club logo in an attempt to appear legitimate. At the time of writing, it was unclear how many users were affected and how much they lost.

How the Scam Worked

According to CoinGecko, the scammers hijacked the advertising platform Coinzilla, which displays ads across a wide network of crypto-related sites, injecting malicious code that triggered the fraudulent pop-ups.

From there it was a relatively straightforward phishing scam leveraging the trust of the websites they exploited. The pop-ups would prompt users to connect their MetaMask wallets, and of course once they did their digital assets were immediately transferred to the scammers.

When the advertising code was identified as the root cause of the fraudulent pop-ups, it was deactivated on the CoinGecko website.

Advertising Code a Serious Vulnerability

Twitter user and blockchain researcher @CryptoShrine explained that this type of attack is quite common and suggests that Web3 site owners should look to move away from advertising as a primary source of revenue:

Scams of this nature can cause significant losses because they can affect many websites at the same time by piggybacking on the advertising code, and because the malicious pop-ups can appear on trustworthy websites it increases the likelihood of users falling victim.

Similar Recent Phishing Scams

As crypto has gone more mainstream in the past 18 months, the number of phishing scams has dramatically increased. Last month alone saw MetaMask issue a security alert about a phishing scam affecting iCloud users and hardware wallet provider Trezor suffer a phishing scam that exploited its MailChimp newsletter.

Categories
Australia ETFs Investing Markets

Australian Crypto ETFs Fizzle on Debut, Only $2 Million in Volume

This week’s long-awaited launch of the first Australian crypto ETFs went off not with a bang but with a fizzle, as the investment products were released amid some of the darkest days in the history of crypto.

Since May 11 Australians have been able to invest directly in three Bitcoin and Ethereum exchange traded funds (ETFs) listed on Cboe Australia, through two providers. 

All three new crypto ETFs had trading volumes far below what was predicted, as the Terra blockchain collapse continued to wreak havoc across the entire crypto market, with Bitcoin plunging to levels not seen since 2020 and Ethereum falling to a six-month low.

All Three ETFs Attract Little Interest 

On their first day of trade, none of the newly launched funds was able to crack A$1 million in trading volume:

  • ETF Securities’ issued ETFS 21Shares Bitcoin ETF (EBTC) saw investor inflows of A$954,925. 
  • ETF Securities’ Ethereum fund ETFS 21Shares Ethereum ETF (EETH) attracted just A$604,305.
  • Cosmos Purpose Bitcoin Asset ETF (CBTC), issued by Sydney-based Cosmos Asset Management, fared worst, securing only A$454,002 in investor funds.

These numbers compare poorly with the launch of the BetaShares Crypto Innovators ETF (CRYP) – a fund that doesn’t invest directly in crypto but rather in crypto-related shares, such as Coinbase – which did over A$8 million in trade within 15 minutes of its listing on the Australian Securities Exchange (ASX). To be fair, though, that fund launched when Bitcoin was at an all-time high last November and the crypto market was on the ascent.

Why the Poor Start?

The new funds launched during a full-blown crisis in crypto markets, the magnitude of which we haven’t seen for years, if ever. It makes sense that concerned investors would be less inclined to get into crypto under current conditions.

The collapse of the Terra blockchain has sparked a US$450 billion drop in the overall crypto market cap since May 7, in a single week. According to CoinGecko, the price of Bitcoin has dropped by almost 25 percent in the past fortnight alone and now sits at US$29,531. 

In addition, the unusually high 42 percent margin requirement imposed on the new ETFs by national clearing authority, ASX Clear, has made the funds less attractive to market participants, meaning major brokers and platforms are refusing to support the ETFs.

Due to the high margin requirements and higher volatility of the underlying assets, some brokers who are selling the ETFs are also only allowing sophisticated investors to trade and are charging additional fees for the privilege.

Another factor likely affecting demand is that investors can already easily access Bitcoin and Ethereum directly, simply by purchasing the assets from a crypto exchange.

The race to launch the first crypto ETF in the Australia market was closely contested, with these three Australian-based crypto ETFs just beating out funds from Canadian challenger 3iQ Digital Asset Management.