Category: USD Coin

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Ethereum Stablecoins Tether USD Coin

USDT and USDC Stablecoins Throw Weight Behind ETH’s Transition to Proof-of-Stake

As Ethereum prepares itself for ‘The Merge‘, set for September 19, Tether (USDT) and Circle, issuer of the USDC stablecoin, have pledged their full support for the long-awaited transition.

The Merge will see the platform move from an energy-intensive proof-of-work (PoW) consensus mechanism to a more sustainable proof-of-stake (PoS) mechanism that will improve the efficiency of the project and dramatically reduce its environmental impact.

In a statement released on August 9, Tether labelled the transition one of the “most significant moments in blockchain history”, saying:

Tether believes that in order to avoid any disruption to the community, especially when using our tokens in DeFi projects and platforms, it’s important that the transition to PoS is not weaponised to cause confusion and harm within the ecosystem.

Tether statement

Smooth Transition ‘Essential’ for Long-Term DeFi Health

The firm added: “Tether will closely follow the progress and preparations for this event and will support PoS Ethereum in line with the official schedule. We believe that a smooth transition is essential for the long-term health of the DeFi ecosystem and its platforms, including those using our tokens.”

The announcement from Tether came on the same day as its stablecoin competitor USDC, which announced it would only support Ethereum’s highly anticipated upgrade. The issuer of USDC, Circle, views the Merge as an important milestone in the scaling of Ethereum’s ecosystem, saying in its own statement:

USDC has become a core building block for Ethereum DeFi innovation. It has facilitated the adoption of L2 solutions and helped broaden the set of use cases that today rely on Ethereum’s vast suite of capabilities. We understand the responsibility we have for the Ethereum ecosystem and businesses, developers, and end users that depend on USDC, and we intend to do the right thing.

Circle statement

As Support for Ethereum PoW Fork Increases, Buterin Not Too Bothered

The transition to a PoS blockchain means Ethereum will be effectively eliminating its mining for good, opting instead to rely on a trusted network of validators. While the majority of the community is excited about the upcoming event – none more so than Ethereum co-founder Vitalik Buterin – miners who stand to lose their income are suggesting another potential hard fork will continue the PoW mechanism. Buterin scoffs that proponents of a PoW “want to make a quick buck” and that it is “unlikely to succeed”.

Binance, the world’s largest cryptocurrency exchange by volume, has said it would not rule out support for the controversial fork, saying that while it shares the excitement for the Merge, it would also possibly support the “merge resistors” who plan to continue the use of the PoW mechanism.

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Crypto News Cryptocurrency Law USD Coin Voyager Token

Crypto Broker ‘Voyager’ Files for Bankruptcy Amid Three Arrows Default

In a move that will surprise no one even remotely invested in the digital assets space, crypto exchange Voyager Digital has this week filed for Chapter 11 bankruptcy as a result of exposure to failed hedge fund Three Arrows Capital (3AC) and a foundering crypto market.

Voyager’s Voluntary Petition for Chapter 11 Bankruptcy. Source: Southern District Court of New York

Voyager ‘Has a Plan’

Said to be owing anywhere from US$1 billion to $10 billion in assets to more than 100,000 creditors, Voyager pleads that its voluntary bankruptcy move is part of a “reorganisation plan” that, once implemented, would enable clients to re-access their accounts. In so doing, Voyager says it would “return value to customers”.

Detailing the plan, Voyager CEO Stephen Ehrlich said customers with crypto in their accounts would receive a combination of crypto, proceeds from the 3AC recovery, common shares in the newly reorganised company, and Voyager tokens:

Ehrlich added that customers with US dollars in their accounts would be able to access those funds after a “reconciliation and fraud prevention process is completed with Metropolitan Commercial Bank”.

However, the bank has since clarified that its FDIC (Federal Deposit Insurance Corporation) cover does not apply in the event that Voyager fails:

FDIC insurance coverage is available only to protect against the failure of Metropolitan Commercial Bank. FDIC insurance does not protect against the failure of Voyager, any act or omission of Voyager or its employees, or the loss in value of cryptocurrency or other assets.

Metropolitan Commercial Bank statement

SBF to the Rescue?

Voyager’s announcement comes after trading firm Alameda Research, founded by FTX CEO Sam Bankman-Fried (aka SBF), led a US$60 million fundraising round for the crypto lender in May. Less than a fortnight ago, SBF warned that some “third-tier” crypto exchanges were secretly insolvent. Surely he’d seen the writing on the wall for Voyager?

Earlier this month, Voyager halted all trading and withdrawals on its platform, citing 3AC’s default on a US$650 million loan. In response, Alameda extended to Voyager a massive credit line made up of nearly US$200 million in cash and 15,000 bitcoin. Good money after bad?

Voyager says it intends to pay its employees in the usual manner and continue its “primary benefits and certain customer programs without disruption”. Trading, deposits, withdrawals and loyalty rewards, however, will remain suspended.

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Justin Sun Markets Stablecoins TRON USD Coin

Tron to Deploy $2 Billion to Stabilise Broken USDD Stablecoin Peg

Tron blockchain founder Justin Sun has declared that US$2 billion will be deployed to “fight” investors shorting Tron’s native currency, TRX, in an attempt to stabilise the Tron-based algorithmic stablecoin USDD:

USDD lost its US dollar peg on June 13, dropping as low as US$0.91 on the KuCoin exchange. 

Many investors now fear the Tron ecosystem may follow in the wake of Terra, which spectacularly collapsed last month after its algorithmic stablecoin, UST, suddenly and dramatically depegged. At the time of writing USDD had still not regained its peg. CoinGecko was reporting its price as US$0.98.

USDD Over-Collateralisation Fails to Prevent Depegging

The launch of USDD was first announced in April, just days before UST began to lose its peg. 

In the wake of the Terra collapse, Tron announced USDD would become an over-collaterised stablecoin – that is to say that each USDD would be backed by more than US$1 in assets held in the Tron DAO Reserve. This move was intended to shore up investor confidence in the new stablecoin and to prevent the kind of depegging event we are now witnessing.

Since USDD lost its peg this week, the Tron DAO Reserve has added another US$650 million worth of USD Coin to its reserves in what it describes as an attempt to “safeguard the overall blockchain industry and crypto market”:

Sun Confident USDD Will Recover Peg

In his tweet about the depegging of USDD, Sun indicated that the massive shorting of TRX was the cause and he believes the deployment of US$2 billion to protect TRX will be enough to swiftly restore USDD’s peg. 

Although Sun’s big talk may appease some Tron diehards, it likely won’t comfort the broader market. The Terra-based algorithmic stablecoin experienced a similar ‘minor wobble’ the day before it depegged catastrophically, with no amount of spending by the Luna Foundation Guard, the Terra equivalent of the Tron DAO Reserve, sufficient to save it.

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Australia Crypto News USD Coin Vitalik Buterin

UNSW Sydney Gets $4 Million Crypto Donation from Vitalik Buterin for AI-Powered Research

Ethereum co-founder Vitalik Buterin has gifted US$4 million worth of USD Coin (USDC) to Australia’s University of New South Wales (UNSW) to support the development of an artificial intelligence-based pandemic detection tool:

Buterin’s donation will underwrite the Shiba Inu Open-Source Intelligence-based EPIWATCH tool, which utilises AI and open-source data to create early pandemic warnings.

It’s all part of what Buterin describes as his “moonshot anti-Covid effort”, in partnership with the Shiba Inu memecoin project and the Crypto Relief fund, which was launched during the second wave of the Covid-19 pandemic in India last year.

Tool Scans Online Data for Covid Updates

EPIWATCH is the brainchild of Raina MacIntyre, professor and biosecurity research head at UNSW’s Kirby Institute, based at the university’s Sydney campus. The tool can scan millions of items of publicly available online data, including social media and news reports, to detect any changes that could suggest increasing Covid-related health concerns.

Raina MacIntyre, biosecurity research head, UNSW. Source: sph.med.unsw.edu.au

MacIntyre says the aim was to make the tool accessible at a “grassroots” level and make sure it covers enough languages to reach “villages and small towns around the world”. MacIntyre also eluded that “Imagine if someone had detected Covid-19 before it spread around the world – that is our vision. Using AI and real-time open-source data, EPIWATCH does not depend on people making reports. It is a great equaliser and can overcome weak health systems and censorship.”

Open-Source Approach Accelerates Pandemic Detection

In announcing his donation to the project, Buterin stressed the importance of sharing data in a decentralised and open manner to speed up pandemic detection:

[It’s] an excellent alternative to more intrusive forms of monitoring, which are also often only available to governments and other high bidders but closed to the public. By contrast, an open-source and open-access approach that allows researchers to work collaboratively across the world can be more easily improved and scaled to detect new pandemics wherever they begin.

Vitalik Buterin, Ethereum co-founder

Australian universities are at the forefront of crypto-related research designed to benefit humanity. Earlier this month, Royal Melbourne Institute of Technology (RMIT) University launched its Green Cryptocurrency Laboratory, which will focus on reducing crypto’s carbon footprint.

And last year, in response to an outbreak of fake Covid-19 vaccine certificates circulating on the web, Australian medical specialists called for a nationwide roll-out of a blockchain-based vaccine certificate system.