Category: DeFi

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Crypto News DeFi Stellar Stellar Lumens

Stellar Lumens (XLM) is Launching a Decentralised Exchange (SDEX)

Open source blockchain payment network and protocol Stellar is another step closer to enabling decentralised finance (DeFi).

Two potential changes to the protocol that would enhance DeFi exchange through the introduction of automated market makers (AMMs) were discussed via a recent meeting of the Stellar Development Foundation, which was live-streamed on YouTube. 

There’s general agreement that AMMs, which allow for the creation of liquidity pools, are a simple way to attract capital and enable high volumes of trading, and that introducing them to the protocol would have great benefits for the network. It means better liquidity, which means better exchange, which means better cross-currency payments.

Justin Rice, Head of Ecosystem, Stellar Development Foundation

Adding AMMs and liquidity pools to the Stellar Decentralised Exchange (SDEX) has the potential to attract more traders and reduce transaction costs. Improving liquidity is a key facet of Stellar network’s 2021 roadmap.

DeFi Exchanges Transforming Trade 

Market participation on DeFi exchanges is increasing significantly: monthly trading volume was on track to exceed US$55 billion in January, while open source and privacy-focused web browser Brave recently announced plans to build a decentralised exchange aggregator.  

It remains to be seen whether enhancements to the functionality of Stellar will further increase the popularity of its native digital currency, the Lumen (XLM), which experienced a breakout in late 2020.

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DeFi Scams

WhaleFarm Token Crashes 99% in Another DeFi Rug Pull

Another project with high-yield promises and an anonymous team has pulled the rug on its investors, stealing over US$2.3 million.

On 29 June, the WhaleFarm token plunged by almost 100% after its developers drained liquidity pools choked with several coins including BNB, USDT, BTC, ETH, ADA, LINK and DOT (Polkadot). 

Mr. Whale Waves Red Flags

The project presented numerous red flags, as tweeted by crypto analyst Mr. Whale, such as high returns of up to 7,217,848% APY (Annual Percentage Yield). A DeFi project with exaggerated high APYs is too good to be true, and usually turns out to be a scam. Plus, an important pattern to detect shady projects is if the team behind it is anonymous – or if it’s backed by a certain organisation that doesn’t show who the developers are. 

Despite its exaggerated high return percentage, the project saw some growth over time, trading above US$200 on most crypto exchanges. The protocol launched a yield farming program for its users looking to lock up their funds lured by the high returns. 

But in just a matter of minutes, the team redeemed their token at once, causing a sharp price drop – leaving investors with almost no possibility of pulling their funds. The team quickly proceeded to delete its official telegram and twitter account, which is how a typical rug pull ends up.

Yet Another Rug Pull in the DeFi World

Rug pulls are exit scams that are becoming common in the DeFi space. Project developers run away with users’ funds by draining the liquidity pools once they reach a high amount, usually millions.

Developers usually swap stolen tokens for Monaro (XMR) to later swap those tokens again for another currency (usually Ethereum or USDT). Monaro transactions are hard to trace because they use ring signatures – a type of digital signature that can be performed by any member of a set of users that have a key.

This rug pull adds to the list of many that have occurred in the DeFi space, including TurtleDex, a Binance Smart Chain-based DeFi storage that drained US$2.5 million in Binance Coin (BNB) after its launch.

As reported by Crypto News Australia, a project that raised suspicions recently is ICP Coin – which dumped nearly 95 percent amid claims the development team might have deliberately caused it to drop from an ATH of almost US$750 in May, now trading at US$46.

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Australia DeFi

Australia’s Tracer DAO Raises A$6 Million To Build Derivatives Trading Platform

Photo 218312864 © Marina Putilova | Dreamstime.com

Australian trading platform Tracer DAO has raised US$4.5 million (A$6m) in a strategic round backed by various crypto companies, including Melbourne-based crypto investment manager Apollo Capital.

Tracer is an Ethereum-based DeFi protocol that introduces a derivatives marketplace owned by a DAO (Decentralised Autonomous Organisation) – a collective represented by written computer code or member votes through governance tokens.

Tracer is backed by Mycelium, a Brisbane-based group of developers who believe Australia has the potential to attract global blockchain investments . There are however uncertainties regarding the regulatory environment in the country, something many in the blockchain community have echoed in the past.

Mycelium Will Adapt to Regulatory Requirements in Due Course

Mycelium says it will work in a legal grey area, adapting to regulatory requirements once they become clear.

We are by no means anti-regulation and we believe consumers should have protections, but we are innovation maximalists looking to build on the cutting edge of technology with a global solution. We are still in the infancy of this structure coming to fruition.

We are in a discovery phase of this innovation. We need to have public policy conversations to make it safe for people to innovate in this space. We also need to discover how the law treats it; that is not an answered question yet.

Ash Morgan, Co-founder of Mycelium

Australia is an Attractive Target for Blockchain Investment

Australia is a potential market for DeFi and blockchain development, and Tracer is one of the latest protocols to join the various startups to have emerged recently. Speaking about the local regulatory laws and the potential use case for Australia, Mycelium co-founder Ash Morgan added:

[Australia] can definitely compete in this space and, with its global reputation for fintech, we can really lead on a thought basis up there with the US if we take a position early on. We expect Australia to pick up its act on growth around these products and we expect there to be rapid growth in employment in the coming few years. We want to be a part of that within Australia.

Tracer DAO will try to tackle the DeFi derivates space so everyone on the platform has access to new options. One option, Morgan says, is around water rights and energy as solar is more broadly implemented worldwide. This could be distributed by neobanks.

DeFi is expanding fast throughout Australia and soon, more investors may turn their gaze on the country, following the DeFi craze in Switzerland as Sygnum Bank is set to offer custody and trading of DeFi tokens.

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Australia Crypto News DeFi

Australia Urged to Launch CBDC ASAP as Digital Landscape is Changing Quickly

The rapidly changing global digital landscape means worldwide banks and regulatory bodies are looking to either regulate cryptocurrencies in their respective countries or launch their own CBDCs (Central Bank Digital Currencies).

Australia Under Pressure to Launch CBDC

While the RBA (Reserve Bank of Australia) is still researching CBDCs, other banks across the world are moving fast with their plans to launch digital currencies.

A week ago, the local government of the Chinese Xiong’an region announced it would pay its residents in digital Yuan, starting with construction workers.

The case for Australia is the back-and-forth of the RBA regarding a future CBDC, along with the unclear regulatory environment for cryptocurrencies. Unsurprisingly, many in the blockchain and crypto community in general have criticised Australian monetary authorities for not taking digital currencies seriously, something that seems to affect the banks as well.

We need to think, as a country, ‘what is crypto, how could it be used, and do you trade it?’ If it is something that should be traded safely, [how do] we make it safe? Those are the issues we need to think about, and quite quickly, because people are making a livelihood out of trading.

Ross McEwan, CEO, National Australia Bank

BIS Backing Stablecoins

The Bank of International Settlements (BIS) – dubbed the central bank for central banks – has shown support for the development of CBDCs in an attempt to modernise traditional finance and ensure “Big Tech” does not take control of money, according to a report from Reuters. 

This has rushed other banks to explore the technology of CBDCs as cryptocurrencies are booming and the world is gradually transitioning to digital payments. Further, at least 56 central banks and monetary authorities are exploring digital currencies.

Impact of Blockchain and DeFi on Traditional Finance

Australian venture capitalist Mark Carnegie recently spoke on the ABC’s The Business cryptocurrencies special about how DeFi and blockchain are changing the landscape for traditional finance.

Carnegie, who launched a crypto fund two months ago, said the idea behind cryptocurrencies is to bring on a decentralised financial world and not to focus solely on one crypto, referring to Bitcoin maximalists. When asked about the safety of DeFi, he said:

Look at the GFC [Global Financial Crisis of 2007]; in the end, the government had to step in to guarantee the world’s financial system. It’s safe because they decided to print money, it’s not safe because it’s safe, it’s because you’re essentially charged huge amounts of insurance embedded in all the fees you pay.

Mark Carnegie

Carnegie added that wholesale investors were coming into his fund looking for a mainstream fund manager willing to go into digital assets.

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Crypto News DeFi

Mark Cuban Calls for DeFi Regulation After DeFi Token Collapses from $65 to $0.00000003

A DeFi token called TITAN has dropped to almost zero in price after suffering a bank run this week, plunging from US$65 to 0.00000003. Mark Cuban, who was staking liquidity for the token, is now asking for stablecoin regulation after losing a “small percentage” of his portfolio in the crash.

The TITAN token is part of a Stablecoin project called Iron Finance. According to the post-mortem released by the protocol, around 10am UTC on June 16, large holders began to sell, which triggered other holders to follow suit.

Price went from US$65 to almost zero following panic sell-offs. Source: Slingshot Finance

What we just experienced is the worst thing that could happen to the protocol, a historical bank run in the modern high-tech crypto space.

Iron Finance report

Cuban Calls for DeFi Regulation

Following the bank run, Cuban told Bloomberg there should be rules to determine what is a stablecoin and what level of collateralisation is acceptable. He added that part of his loss was his fault:

It is no different from the risk I take in angel investing […] The thing about DeFi is that it is all about revenue and math, and I was too lazy to do the math to determine what the key metrics were.

Mark Cuban

DeFi a Dangerous Space for Newcomers

It’s highly unlikely that regulations in the DeFi space occur as it would totally flip the idea of decentralised. However, it is a dangerous space for newcomers, especially those with a lot of capital to invest.

Many traders have lost substantial amounts of money due to mistakes such as sending funds to the incorrect address, like the DeFi trader who lost US$188,000, or being a victim of a rug pull or a hack, which have become increasingly common in the space.

One of the latest protocols to be hacked was DeFi100, which lost US$32 million in an alleged hack. However, rumours circulate that the project rug-pulled its investors.

With a Total Value Locked of over US$60 billion, more and more investors are exploring the DeFi world to take a chunk out of the high returns. However, new traders should educate themselves first and consider the risks of investing in DeFi.

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Crypto News DeFi Institutions

Switzerland Bank to Offer DeFi Yield and Lending With Ethereum

Switzerland’s Sygnum Bank will allow investors to dive into the decentralised finance world by launching custody and trading for several DeFi tokens.

According to a recent blog post, the bank will offer trading services for up to seven leading tokens in the DeFi market: Aave, Synthetix, UNI (Uniswap), Aragon, Curve, Maker, and 1inch Network.

This is the next step on our journey to enable a variety of yield-generating products in the digital-asset space. These can either be based on the proof-of-stake protocol, so staking itself, or also leveraging and decentralised lending to generate yield for our clients, which is a bit further out on the roadmap.

Thomas Eichenberger, Sygnum Bank’s head of business units
Sygnum is a digital assets bank founded on Swiss and Singaporean heritage

Banks Rush to Explore DeFi

With a TLV (Total Lock Value) of US$60 billion, banks are rushing to explore the DeFi world as more institutional investors show interest in investing in it. In a further note, Sygnum outlined that the fast-paced growth of the DeFi ecosystem will “play an increasingly relevant role in shaping Future Finance”.

Besides custody and trading, the institution also launched banking services for USDC and intends to launch yield-generating products for its institutional clients. This bridges the institutional space with the decentralised one in a regulated manner.

DeFi Personal Banking Set to Take Off

As DeFi expands across international financial markets, investor Mark Cuban believes DeFi can revolutionise the way people do banking in the future. Cuban claims that while DeFi is hard for the average person to understand at first, once it becomes as easy to use as credit cards there will be a massive take-off in adoption.

Australia is not falling behind when it comes to DeFi as more Australian startups are emerging as international leaders in DeFi and tokenisation. Among some of these projects is Synthetix, a derivative liquidity protocol, and Ren Protocol, which provides inter-blockchain liquidity for dapps (decentralised applications).

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Blockchain Crypto Exchange DeFi Ethereum

Project DeXe Provides Crypto Traders with DeFi Copy Trading

A new entrant into the crypto copy trading market, DeXe Network offers what it calls the “world’s first” decentralised social trading platform.

Copying the deals of successful traders is an effective way for novices to reduce their effort and risk. While copy trading is not new to the crypto market, where DeXe Network differs is that it operates in the DeFi environment. 

An introduction to DeXe Network from the company’s YouTube channel

Simplified Copy Trading for the DeFi Ecosystem

In development since 2019, DeXe Network currently offers a standard “wallet-to-wallet copy” for decentralised copying of successful traders, where users follow another trader’s activity automatically. The application enables social trading of any Ethereum wallet addresses.

Announcing the release of its wallet-to-wallet copying feature earlier this year, DeXe said:

Trading in DeFi is a jungle that’s often extremely frustrating, with too many manual steps and complexities. The main mission of the DeXe Network is to simplify much of that into an automatic and transparent way for both traders and followers to increase their DeFi earnings.

Making Decentralised Asset Management a Reality

DeXe’s other main product, which is still in testing phase, is what’s known as DeXe Investments. It involves smart contracts that connect users with a trader in a decentralised way. 

Users can essentially invest their capital with specific traders who then manage those assets on their behalf. The user receives a synthetic token from the trader as collateral – and as the trader increases the value of their traded funds, the value of the user’s token also increases. DeXe Investments is in its final testing stages before being opened to the public. 

DeXe believes it can fill a market gap for decentralised capital management:

The necessity of such a secure and decentralised money management tool is undeniable. DeXe provides an opportunity for any user to invest safely in a decentralised environment, controlling risks and finances using just his/her wallet.

DeXe Network operates on DAO (decentralised autonomous organisation) principles and is designed to ensure users maintain control of all financial transactions in their personal wallets, with no third-party interference.

While DeFi social trading may be expanding, digital exchanges such as Binance continue to break records for trading volume. Many traders are also making profits through DeFi bot arbitrage trading, according to research on the Ethereum blockchain.

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Blockchain Crypto News DeFi

13-Year-Old Programmer Codes DeFi Project, Now Managing $1 Million in Crypto

Gajesh Naik designed a Decentralised Finance (DeFi) protocol that now manages around US$1 million in cryptocurrency – and he’s only 13 years old.

Gajesh, a schoolboy from Goa, India, is the chief architect and developer of PolyGaj – a DeFi protocol built on the Polygon blockchain. Last month PolyGaj was actually managing almost US$7 million, all under Gajesh’s entrepreneurial stewardship.

polygaj.finance assets under management – 18 June 2021

DeFi technology has been growing fast after emerging last year, with US$58 million locked into DeFi protocols. It is also gaining a keen following with billionaire Mark Cuban Calls DeFi The Start Of Personal Banking.

How Gajesh Cracked the DeFi Code

When you entrust your money to a DeFi protocol, you’re diverting it into a series of smart contracts – essentially code that dictates how your funds are invested. So how did Gajesh come up with that code?

I had the basic math skills, like addition, subtraction. Then I started learning all the programming languages.

Gajesh Naik

Those languages – Gajesh knows C, C++, Java, JavaScript and Solidity, the language used to write Ethereum-based smart contracts – were learned at a boot camp he attended five years ago, using a drag-and-drop tutorial program called Scratch. He was eight years old at the time.

Gajesh’s father, Siddhivinayak, a public servant with a degree in computer science, encouraged his son all the way.

Once the COVID threat in India eases, Gajesh hopes to devote “four to five hours” to schoolwork while continuing to work on PolyGaj.

Asked whether someone his age should be handling such large amounts of money, Gajesh has a simple answer: “Age is just a number.”

The project has a roadmap with plans to add new features, and has just launched an NFT marketplace. You can view the code on Github.

Other Crypto Superstars

Gajesh isn’t the first to achieve superstar status in the crypto world; earlier this year we saw a hardware hacker modify an old-school Game Boy to mine Bitcoin.

We also saw an Aussie programmer refinance his property using DeFi through crypto loans, which operates outside of the current banking system.

Categories
Blockchain DeFi Ethereum

Amazon Is Hiring Blockchain Experts To Expand into DeFi

A job ad from Amazon, America’s largest digital retailer, has hinted at the company’s move into the decentralised finance (DeFi) market.

Are you passionate about blockchain and decentralised networks and their potential to transform how people, companies, and governments transact?  

Amazon job ad

The listing, featured on jobsite LinkedIn, seeks a ‘Head of Product, Blockchain’ who can apply blockchain for a range of use cases, including DeFi, as part of the Amazon Managed Blockchain (AMB) team.

Amazon’s job ad on LinkedIn

The position description states: 

The candidate will have a track record delivering outstanding products at scale in emerging spaces, and is passionate about blockchain, distributed systems and cloud scale software. Ideally you will have experience delivering products or innovations in the blockchain space, and in particular DeFi or Traditional Financial Services.

As well as a computer science degree and more than 10 years’ experience, the job ad lists preferred qualifications including experience in blockchain applications Ethereum and Hyperledger Fabric.

Does a Blockchain Hire Signal an Amazon-Branded Crypto?

Given the increasing value of the DeFi industry, it makes sense that the e-commerce heavy hitter wants a slice of the action. 

Amazon’s recruitment of a blockchain product manager is driving speculation about exactly how the company will apply DeFi – whether accepting cryptos as payment or creating its own digital currency and exchange.  

The AMB team leverages blockchain for use cases “across DeFi, Supply Chain, Financial Services, Identity and more”, and it seems the new hire will play an important role in shaping Amazon’s approach to DeFi. As the ad says:

We are looking for an experienced product leader to drive the vision, roadmap, feature definition and go-to-market strategy of the AWS [Amazon Web Services] product offering across the rapidly evolving and broad landscape of blockchain technology and use cases.

What appears to be a move to do more in the DeFi space could help Amazon stay ahead of rivals like Cudos, a decentralised cloud computing network, which launched its private testnet in May.

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Blockchain Crypto News DeFi Ethereum NFTs

Solana is Raising Up To $450 Million to Challenge Ethereum

Solana is challenging Ethereum’s lion’s share of the decentralised applications market after rumours emerged it will receive a funding injection of between US$300-450 million.

Solana is making real progress towards positioning itself as the preferred blockchain on which the next generation of dApps are built, powering DeFi, NFTs and gaming. We also saw recently that SOL was listed on Coinbase Pro, which also boosts its tradability.

While Ethereum has struggled to meet the booming demand in the market as increased adoption has resulted in painfully slow transaction wait times and soaring gas prices, the current congestion issues have opened up the space for new contenders.

Solana website

Cheaper, Faster and Highly Scalable

Solana’s open-source proof-of-stake blockchain aims to solve the traffic bottleneck on the Ethereum network. Solana’s advanced scalability offers dApps built on its blockchain lightning-fast performance at significantly cheaper costs to those built on Ethereum. Currently, Solana can handle more than 50,000 transactions per second, while Ethereum averages only 10-15 transactions per second. On its website, Solana boasts a low average fee of only $0.00025 per transaction.

The funding round for Solana was due to close in March but was extended due to strong interest. Solana has not released an official statement but, in a recent interview, executives did not deny it, commenting:

This information wasn’t shared by our team …We won’t be able to assist with any additional commentary around this as it’s not officially being released by Solana.

Solana spokesperson

According to Forbes, if the rumoured sum raised amounts to even $300 million, that would place it in the top six venture capital rounds in crypto and blockchain to date. It will be interesting to see if Solana comes under scrutiny from the SEC, who may deem the SOL tokens as securities and thus subject to regulatory challenges.

Learn more about the Solana project on the Solana Podcast.