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Users Surge but Just Five DeFi Projects Account For 94% of Locked Funds
by Samuel Haig on July 8, 2020 at 1:49 am
DeFi’s surging popularity has seen the sector grow to comprise 240,000 users and more than $2 billion in value. The total number of users engaged with decentralized finance (DeFi) protocols has increased by more than 140%, since exceeding six-figures for the first time in January.According to data published by Dune Analytics, the total number of DeFi users was just shy of 240,000 as of July 6 — increasing by more than 20% in the past month.The total value of capital locked up in DeFi protocols has also exceeded $2 billion just six months after breaking above $1 billion for the first time.Despite the surge in users, five projects account for the vast majority — roughly 94% — of capital locked up in DeFiDeFi users proliferateAccording to Dune Analytics, Uniswap and Kyber Network comprise the top DeFi pools by total number of users, having attracted more than 92,000 and 82,000 respective users in less than two years of operation. While Kyber has grown by more than 130% this year, Uniswap has nearly quadrupled its user base since January.Compound also saw a significant spike over the past month, posting a 35% increase from 30,000 users to more than 40,000 over the past 30 days.Smaller projects have also seen exponential growth over the past month, with Balancer growing nearly 400%, from 1,700 to 8,350, and Curve increasing 160%, from nearly 2,200 to 5,700. Over $2B now locked in DeFiThe recent rush of new DeFi users has significantly expanded the sum of capital locked up in DeFi projects.Hype surrounding the recent launch of Compound’s governance token COMP has seen the protocol overtake MakerDAO (MKR) as the top DeFi project by locked assets with $673.4 million, according to DeFi Pulse.Maker ranks second with $604.3 million, followed by Synthetix with $333 million, Balancer with $158.8 million, and Aave with $155.8 million.Between them these five projects account for 94% of the total funds locked in DeFi.
Brock Pierce Reveals Motivation Behind Surprise Presidential Bid
by Turner Wright on July 8, 2020 at 1:24 am
Crypto venture capitalist Brock Pierce said his presidential campaign would reach out to younger voters and technological innovators. Crypto venture capitalist Brock Pierce has revealed his campaign to become the next U.S. president will focus on creating a country where technological innovation is allowed to flourish.Pierce spoke at a Unitize conference fireside chat on July 7. He alluded to the fact that while he’s unlikely to win, the campaign will be a way to highlight the benefits of blockchain. A key theme will be building a better environment for innovators — particularly Millennials and those in Generation Z.“The United States historically has been the capital of innovation, on the front lines of technologies like blockchain. I feel that this is not a great environment for innovators to build. I’m watching many of the best innovators in our nation moving to Asia, moving to Europe, moving to other places because they don’t feel safe to innovate and experiment.”Pierce hopes to create a regulatory sandbox for blockchain startups, where they are not restricted to “extremely expensive licenses” for their first two years of operations. He said a President who is capable of understanding the current financial tools available could have already implemented important changes, such as issuing the Treasury Department’s $1,200 stimulus checks faster. Many Americans waited weeks or even months for relief funds. “We need people that understand what’s actually happening in the world right now. Those of us in this business on the front lines are actually designing the tools, creating the systems that are going to create the future that we’re all going to live in.”Not running to win?Pierce compared himself to former presidential candidate Ron Paul, who ran unsuccessfully for the top job three times, in the process helping to shine a light on several important financial processes in the United States. “This running for President will bring a lot of very important conversations to the forefront.”Vote 1 snowballIn his daily newsletter, crypto analyst Mati Greenspan agreed the former child star had “a snowball's chance in the Mojave desert” of succeeding. But Greenspan believes the effort will be “good for Bitcoin” and push the topic into the national conversation.Greenspan said that many believe that current U.S. President Donald Trump only ran for office as a publicity stunt to drum up business for his hotels and other ventures. Trump ultimately refused to cede financial control of his businesses — an apparent violation of the Emoluments Clause of the U.S. Constitution — after he won. Pierce said he would put all his crypto holdings — a net worth estimated in the many hundreds of millions — into a blind trust in the event he was elected.Pierce first announced his candidacy for U.S. President in a July 5 tweet, following hot on the heels of Kanye West. His campaign site states that he is a pioneer digital currency and has raised more than $5 billion for the companies he has founded.
Former Official Says China Needs to Reform Crypto Laws
by Ting Peng on July 7, 2020 at 11:51 pm
A Chinese official indicated that crypto will inevitably be part of the digital capital market. Xiao Gang, former chair of the China Securities Regulatory Commission, said the country is facing a digital economy transformation and needs to embrace the right regulations for the fast growing crypto market. Xiao was speaking at the 19th Pushan Lectures of China Finance 40 Forum, or CF40, which was held online on July 7. The event saw a number of officials discussing the lessons learned from the 30-year development of China's capital market. According to local news reports, Xiao said there was an urgent need to embrace digital reform:“The development of the digital capital market faces the problem of organizational change. The most typical, such as the cryptocurrency exchange, is bound to happen in the future. How to deal with such organizational change is also a problem that we may encounter.”Xiao said the boundaries of some products and services in the digital capital market are becoming blurry and the current laws and regulations can not keep up with them. He said that getting the balance wrong attempting to protect investors and consumers could potentially lead to big problems.More research needs to be doneXiao noted that a number of issues remain for the development of the digital capital market, including the emergence of monopolies, the development paths, decentralization and information disclosure, which all need to be further clarified, discussed, and researched.Xiao advocated that some basic principles needed to be upheld: “We must adhere to the principles of openness, inclusiveness, sharing and fairness in the development of the digital capital market [...] we should actively embrace new technologies, prudently innovate business models [...] promote data connectivity and create a fair market environment.” Cointelegraph has reported previously that a Chinese Communist Party school published a book on crypto. China’s new civil code will include cryptocurrencies such as Bitcoin as part of a person’s legal inheritance.
CFTC Is Waiting on SEC to Allow Futures Trading of More Digital Assets, Says CFTC Chairman
by Kollen Post on July 7, 2020 at 9:40 pm
Chairman Tarbert of the CFTC wants to see more clarity on which tokens are securities within the U.S. as well as broader international cooperation on regulation. In a July 7 interview with predecessor Jim Newsome, current Chairman of the Commodity Futures Trading Commission (CFTC) Heath Tarbert ran down a list of pending concerns standing between cryptocurrencies and the long-awaited promised land of regulatory clarity.Securities regulation and the CFTC’s purviewTarbert was careful to outline the distinction between the work of the CFTC and its elder brother regulator, the Securities and Exchange Commission, or SEC. The determination of whether a digital asset is a security is “the sole province of the SEC,” Tarbert explained. “If their determination is that it’s not a security then we can start taking it under our own purview.” He continued:“Once you start seeing more clarity on whether something is or is not a security, you will start seeing more futures listed on digital assets.” Currently, Bitcoin and Ether are both classified as commodities in the United States, which is why futures contracts for both are legally available in the country — in the case of Ether, only since May. Tarbert expressed interest in expanding this roster both today and in the past, but that remains an open question. The position of the United States in global crypto regulationWhile Tarbert noted that “it’s critically important that the United States lead in technology and especially blockchain technology,” he was not satisfied with the country’s current frameworks. In response to a question from Newsome as to whether the U.S. was leading the world in regulation, Tarbert said: “I don’t think I can say that we’re a leader from the regulatory standpoint. I do think we’re a leader from the technological standpoint.” Tarbert did, however, emphasize that digital assets are an especially tricky area to write laws for because they cross borders so readily: “Regulators and governors care about borders but technology doesn’t. So really for this field to reach its full potential we need international cooperation.”Speaking today, Tarbert reemphasized an earlier point about the CFTC being focused on principles rather than prescriptive rules.
Future Bleak for Private Stablecoins, SFB Economist Says
by Benjamin Pirus on July 7, 2020 at 9:30 pm
SFB Technologies' chief economist sees a future for central bank digital currencies, or CBDCs, but not for privately issued stablecoins. Speaking on a Unitize digital conference panel, Peter Dittus, chief economist for SFB Technologies, said he does see a place for privately-issued stablecoins. "I don't see a great future," Dittus said of stablecoins on the June 7 panel, live streamed by Cointelegraph. Two stablecoin classifications existStablecoins exist in two categories — privately issued and CBDCs, according to Dittus. Issued by governments, CBDCs essentially turn paper cash digital, with each coin representing the value of the nation's currency to some degree. Privately issued stablecoins also often hold to the value of various national currencies, although private entities run these assets, not governments. Tether's USDT is one example of a privately issued stablecoin. "If you have a stablecoin issued by a private company, I'm not sure what the point of this is," Dittus said. "There may be a question of internet of things, a sort of small payments kind of stuff, that I can see, but otherwise, why would you use it," he added, noting the presence of all the other digital payment forms available. PayPal and Venmo exist as two such examples. "What's the unique selling position of a stablecoin that's issued by a private consortium?" Dittus added. He did, however, mention potential for assets native to certain platforms, such as Facebook or Telegram, that harness those entities' massive customer bases. Dittus sees value in CBDCsAlthough he did not express enthusiasm toward privately issued stablecoins, Dittus does see promise for stablecoins issued by central banks. "That obviously has significant potential because it has all the support and the legal power and the economic power of a coutnry behind it," he said. "From a point of view of someone who holds it, it's a credit risk-free asset," he added. Dittus also mentioned interest around a different type of stablecoin for nations torn by inflation, such as Argentina, which would base its value on other assets such as precious metals or goods instead of currency. "If you have a stablecoin that is linked to the bolivar, who would be interested in that," Dittus said, referring to Venezuela's paper currency. Venezuela has seen soaring inflation over the last few years, reaching 10,000,000% in 2019.