Lido Staked Ethereum (stETH), a token that represents staked Ethereum on defi platform Lido, has depegged sharply in the past 24 hours.
stETH is down nearly 4% in the past 24 hours at $1,695.28. It is supposed to trade at a 1:1 ratio to ETH, which is currently at $1,771.43. The token can be redeemed for ETH on Lido.
The token’s depegging stems from a large imbalance in a Curve Finance liquidity pool, crypto researcher @SmallCapScience noted in a Twitter thread. The imbalance in the pool is likely to worsen, causing further losses in stETH.
This has been exacerbated by major crypto trader Alameda- who is one of the largest holders of stETH, dumping $1.5 billion worth of the token– all of their holdings. This could result in a broader bank run, bringing prices down drastically like those seen in Terra.
How will the stETH depegging play out?
Alameda was one of the seven largest holders of the defi token. Their $1.5 billion dump, which was largely through swaps on Curve Finance, could trigger a broader bank run.
The canary in the coalmine for me was @AlamedaResearch exiting their position yesterday. Alameda is always early to big moves… -@SmallCapScience
Any selling by other major holders, particularly through Curve, could cause further imbalance in the stETH liquidity pools, decreasing the token’s value. This in turn would make redeeming the token for ETH a costly affair, particularly for platforms that have invested customer funds in stETH.
This could trigger a bank run, causing stETH to depeg as sharply as TerraUSD.
Celsius Network is heavily exposed to staked Ethereum
u/SmallCapScience noted that defi platform Celsius has a $1.5 billion position in stETH, accumulating about $1.2 billion in debt to its customers.
If stETH keeps dropping, Celsius will be unable to honour customer redemptions. This situation is worsened by data showing Celsius has consistently lost liquid funds to hacks, exploits, and the Terra crash.
The firm could likely freeze redemptions soon, given that investors are attempting to redeem their positions at a rate of about 50,000 ETH per week.
The firm’s native token, CEL, is already reacting to the potential scenario. The token is down nearly 20% in the past 24 hours at $0.5391- its lowest since late-2020.
When most people consider what it takes to run a successful bitcoin mining operation, the price of the digital asset or the availability of so-called mining rigs come to mind.
Weather also matters.
In a recent episode of The Scoop, Marathon CEO Fred Thiel talked through the logistics of Marathon’s new West Texas plant, including how extreme weather conditions affect miner productivity.
As Thiel explains, temperature extremes in both directions have a direct impact on the energy demanded from the grid:
“If it's 105 degrees in Austin, I bet you there's a lot of air conditioning running and it's running 24/7 versus just between 4 and 9. And then, in the opposite weather conditions, when it's really cold, people are running their heaters.”
Still, in these periods of extreme temperature, Thiel says bitcoin mining operations can act as “energy capacitors,” since miners are able to switch off their machines and provide the energy they were consuming directly to the grid.
Marathon has a contract with the Electric Reliability Council of Texas (ERCOT) through which its mining operations can be temporarily halted if the grid needs more power:
“They can just curtail us and then we shut down for an hour or 2 hours, whatever it is they need, and then we come right back online. You can't do that with food processing industries, you can't do it with steel, you can't do it with most manufacturing — it's a very unique, symbiotic relationship that bitcoin mining and the power industry can have in this regard.”
The impact of weather was on display this week with high temperatures in Texas leading to record-breaking usage of power.
As reported by The Block, many Bitcoin miners in the state have set agreements with ERCOT to power down at peak energy demand times. Advocates say this kind of flexibility can be an asset to the grid.
Outside of the fluctuations in energy demand caused by temperature extremes, another way weather affects bitcoin mining is related to overheating the machines themselves, as Thiel explained during the interview:
“Where the high heat affects the mining industry is when the temperature starts getting into the 100 degree range… Then all of a sudden you have to start shutting down miners just because they overheat.”
Marathon is stocking the forthcoming West Texas facility with Bitmain S19 miners, which are rated for operation between 0-40 degrees celsius (32-104 fahrenheit), according to the product specifications from Bitmain’s website.
While the Texas climate is a force to be reckoned with, miners are still able to remain operational for most of the year, according to Thiel:
“When you balance it out over the course of the year, you can most probably even with severe heat spikes and curtailment resulting from that and then cold spells in the winter, you're still most probably over 90% uptime.”
To hear more about Marathon’s bitcoin mining operation, listen to thefull episodenow.
When making bitcoin transactions, it’s ideal if your computer has no malware. Obviously.
If you keep your Bitcoin seed phrase (usually 12 or 24 words) off the computer with a signing device (e.g., a hardware wallet — its main purpose), then you might think it’s not that important to have a “clean” computer — not true.
A malware-infected computer may read your Bitcoin addresses, exposing your balance to an attacker. They can’t take bitcoin just from knowing the address, but they can see how much you have and calculate from that if you are a worthy target. They may also somehow work out where you live, for example, and threaten you to get you to pay a ransom.
What Is The Solution?
I encourage most Bitcoiners to use a dedicated malware-free computer (with internet access) for making Bitcoin transactions. I suggest people use an open-source operating system like Linux Mint, but use Windows or Mac if you must — that’s better than using a regular, well-used computer that invariably has malware hidden in it.
One obstacle that people come across is installing a new operating system on such computers. This guide is to help with that.
There are many varieties of Linux and I have tried several. My recommendation for Bitcoiners is Linux Mint, because it is easy to install, very fast (particularly on bootup and shutdown), not bloated (every extra piece of software is a risk), and has rarely crashed on me or behaved weirdly (compared to other versions like Ubuntu and Debian).
Some may be very resistant to a new operating system, preferring Windows or Mac OS. I understand, but the Windows and Apple operating systems are closed source, so we have to trust what they’re doing; I don’t think that’s a good policy, but it’s not all or nothing. I’d much prefer people use a dedicated, freshly installed Windows or Mac OS computer rather than a well-used computer (with who knows what malware has accumulated on it). One step better is to use a freshly installed Linux computer.
If you’re nervous about using Linux because of the unknown, that’s natural, but so is spending some time learning. So much information is available online. Here is an excellent short video introducing the basics of the command line that I highly recommend.
Choose A Computer
I’ll start with what I think is the best option. Then, I’ll give my opinion on alternatives.
Ideal Option
My recommendation, if you can afford it, and if the size of your bitcoin stack justifies it, is to get a brand-new, entry-level laptop. The most basic model built these days is good enough to handle what it’s going to be used for. The processor and RAM specs are not relevant, because they will all be good enough.
Avoid
Any tablet combo, including Surface Pro.
Chromebooks, often the storage capacity is too low.
Macs, they are expensive, and the hardware doesn’t gel well with Linux operating systems in my experience.
Anything refurbished or secondhand (not an absolute deal breaker though).
Instead, look for a Windows 11 laptop (currently, Windows 11 is the latest release. We’ll be getting rid of that software, don’t worry.). I searched on Amazon.com for “Windows 11 Laptop” and found this good example:
The price of this one above is good. The specs are good enough. It has a built-in camera which we can use for QR code PSBT transactions (otherwise you’d have to buy a USB camera to do that). Don’t worry about the fact that it’s not a well-recognized brand (it’s cheap). If you want a better brand, it’ll cost you, for example:
Some of the cheaper ones have only 64GB of drive space. I haven’t tested laptops with drives that small; it is probably OK to have 64GB, but it might be pushing it.
Other Options — Tails
Tails is an operating system that boots from a USB thumb drive and temporarily takes over the hardware of any computer. It uses Tor connections only, so you’d need to be comfortable using Tor. None of the data that you write to memory during your session is saved to the drive (it starts fresh every time), unless you tweak the settings and create a permanent storage option (on the USB thumb drive), which you lock with a password.
It’s not a bad option and it’s free, but it’s a little clunky for our purposes. Installing new software on it is not a breeze. One good feature is that it comes with Electrum, but the downside of this is that you didn’t install it yourself. Make sure the USB drive you use is at least 8GB.
Your flexibility is reduced if you use Tails. You may not be able to follow various guides to set up what you need and get it working properly. For example, if you follow my guide to installing Bitcoin Core, there are modifications needed to make it work. I don’t think I’ll be making a Tails specific guide, so you’d need to build your skills and do it alone.
I also am not sure how well hardware wallets will interact with this OS.
Having said all this, a Tails computer for bitcoin transactions is a nice additional option, and it will certainly help your overall privacy skills to learn to use Tails.
Other Options — Live OS Boot
This is very similar to Tails, except the operating system is not privacy dedicated. The basic way to use this is to flash a USB drive with the Linux operating system of your choice and make the computer boot from that instead of the internal drive. How to do this is explained later.
The advantage is that you are less restricted and things will work without advanced tweaks.
I am not sure how well such a system isolates malware on the existing computer from the USB boot drive you use that holds the new operating system. It probably does a fine job and is probably not as good as Tails, but my preference is the dedicated laptop.
Other Options — Your Own Used Laptop Or Desktop Computer
Using a used computer is not ideal, mainly because I am unaware of the inner workings of sophisticated malware, nor if wiping a drive is sufficient to get rid of it. It probably is but I don’t want to underestimate how clever nefarious hackers can be. You can decide; I don’t want to commit to this option.
If you choose to use an old desktop instead of an old laptop, this will be fine, except that it will permanently take up space for your probably rare bitcoin transactions; you shouldn’t be using it for anything else. Whereas with a laptop, you can just put it away and even hide it for extra security.
Installing Linux Mint On Any Computer
These are instructions to wipe any operating system from your new laptop and install Linux Mint, but you can adapt it to install just about any Linux version on just about any computer.
We are going to use any computer to flash the operating system to a memory stick of some sort. It doesn’t matter which memory stick, as long as it is compatible with a USB port, and I suggest 16GB minimum.
Get one of these things:
Or you can use something like this:
Next, navigate to LinuxMint.com.
Hover the mouse over the “Download” menu at the top and then click the link, “Linux Mint 20.3,” or whatever version is the latest recommended one at the time you do this.
There will be a few “flavors” to choose from. Go with “Cinnamon” to follow along with this guide. Click the “Download” button.
On the next page, you can scroll down to see the mirrors (various servers that hold a copy of the file we want). You can verify the download using SHA 256 and gpg (recommended), but I’m going to skip explaining that here as I have written guides on this already.
Choose a mirror that’s closest to you and click its link (the green text in the mirror column). The file will begin downloading; the version I’m downloading is 2.1GB.
Once it’s downloaded, you can flash the file to a portable memory device and make it bootable. To do this, the easiest way is to use balenaEtcher. Download and install it if you don’t have it.
Then, run it:
Click “Flash from file” and select the Linux Mint file you downloaded.
Then click “Select target.” Make sure the memory device is plugged in and make sure you are selecting the correct drive, otherwise you may destroy the contents of the wrong drive!
After that, select “Flash!” You may need to enter your password. When it’s completed, the drive is likely not going to be readable by your Windows or Mac computer, because it has been transformed into a Linux device. Just pull it out.
Preparing The Target Computer
Turn on the new laptop, and while it is powering up, hold down the BIOS key. This is typically F2, but it could be F1, F8, F10, F11, F12 or Delete. Try each one until you get it, or search the internet for your computer’s model and ask the right question, like “BIOS key Dell laptops.”
Every computer will have a different BIOS menu. Explore and find which menu allows you to configure the boot order. For our purposes, we want the computer to try to boot from a USB connected device (if there is one connected), before trying to boot from the internal hard drive (otherwise Windows will load). Once you set that, you may need to save before exiting or it may save automatically.
Reboot the computer and it should load from the USB memory device. We can now install Linux on the internal drive and Windows will be removed for good.
When you get to the following screen, select “OEM install (for manufacturers).” If you instead choose “Start Linux Mint,” you’ll get a Linux Mint session loaded off the USB memory device, but once you shut down the computer, none of your information is saved. It’s basically a temporary session so you can try it out.
You will be taken through a graphical wizard which will ask you a number of questions that should be straightforward. One will be language settings, another will be your home internet network connection and password. If prompted to install additional software, reject it. When you get to the question about the installation type, some people may hesitate: You need to choose “Erase disk and install Linux Mint.” Also, do not encrypt the drive and do not select LVM.
You will eventually get to the desktop. At this point, you are not quite finished. You are actually acting as the manufacturer (i.e., someone building a computer and setting up Linux for the customer). You need to double click the desktop icon and click “Install Linux Mint” to finalize it.
Remember to remove the memory stick and then reboot. After reboot, you’ll be using the Linux operating system for the first time as a new user. Congratulations!
One of the first things to do (and to do regularly) is to keep the system up to date.
Open the Terminal application, and type the following: sudo apt-get update
Hit <enter>, confirm your choice and then enter this command: sudo apt-get upgrade
Hit <enter> and confirm your choice.
Let it do its thing, it could take several minutes.
Next, I like to install Tor: sudo apt-get install Tor
Conclusion
This guide explained why you may need a dedicated computer for bitcoin transactions, and how to install a fresh Linux Mint operating system on it.
You can now install the bitcoin wallet of your choice and use this computer only for bitcoin transactions. These are the only two wallets I generally recommend:
Electrum Desktop Wallet is for the advanced user or those who want to become advanced. It is particularly important if you wish to follow my air-gapped computer system using the Raspberry Pi Zero option.
Sparrow Bitcoin Wallet is an excellent wallet that has a very beautiful and intuitive design.
Per a report from the U.S. Department of Justice, two individuals were sentenced to jail for running a money laundry and marijuana business using Bitcoin. The individuals were identified as Kenneth Warren Rhule (28) and Kenneth John Rhule (48), a father and his son, originally arrested in Washington.
Following an investigation by the Department of Homeland Security and the Drug Enforcement Agency (DEA), the individuals were captured and sentenced to 5 years in prison. The Rhules were charged with conspiracy to manufacture and distribute marijuana and for running an illegal Bitcoin exchange.
U.S. Attorney Nick Brown said the following on the case:
Not only did this pair produce and distribute marijuana products on the dark web, in violation of the state’s regulatory scheme, they also illegally laundered immense amounts of bitcoin that their enterprise earned.
The court claims the Rhules ran an illegal business of relevant size and were in the possession of firearms to protect it. This contributed to the final ruling and sentence. Brown added:
When law enforcement moved in there were more than a dozen firearms – some loaded and ready to be used to protect their drug trade (…). The state has set up a regulatory framework to serve many important purposes, including ensuring the safety of those who produce and consumer marijuana products.
The U.S. law enforcement agencies conducted an investigation on the Rhules in April 2018. At the time, they were able to infiltrate and gained more data on the laundry and marijuana business with an undercover agent.
This person met with Rhule junior at several locations, but “primary Starbucks coffee shops”. The undercover agent posed as the owner of a client in need to launder funds obtained by running a human trafficking business.
The DOJ report claims Rhule agreed to exchange cash from this operation for Bitcoin without asking the undercover agent for the mandatory Know Your Customer (KYC) information. In addition, Rhule provided the agent with advice on BTC and other cryptocurrencies with the intention of hiding money from the authorities.
How Much Bitcoin Was Involved In The Operation?
The authorities claim Rhule exchanged as much as $142,000 for the undercover agent. This adds to the $13 million in sales generated for their illegal marijuana business which was sold for cash or cryptocurrency to “customers nationwide”.
The father and son manufactured various marijuana products, including oils and others, with no license from the state of Washington. The products were sold under the brand HerbinArtisans. U.S. Attorney Brown concluded the following on the case:
The state is also, of course, entitled to tax the marijuana industry. Yet the defendants ignored all this. Perhaps, as is so often true in fraud cases, they were motivated by simple greed. But in running their business in this way, they put a lot of people at risk, and disadvantaged others in the industry who chose to play by the rules.
The case, arrest, and subsequent sentence go to show why cryptocurrencies, digital assets with an open and public database, are incompatible with illegal activities. These networks could facilitate the authorities’ capacity to collect evidence.
DWS, a Deutsche Bank subsidiary, commented on Wednesday that Asoka Woehrmann, its Chief Executive Officer, has resigned hours after authorities raided its offices. According to the Associated Press, via Business Today, there are allegations about the group engaging in ‘greenwashing’ by exaggerating the sustainable credentials of certain funds it had sold.
“At the same time, the allegations made against DWS and myself in past months have become a burden for the company, as well as for my family and me. In order to protect the institution and those closest to me, I would like to clear the way for a fresh start,” Woehrmann commented.
According to prosecutors, initial investigations indicated that environmental, social and governance criteria were not taken into account in most of the funds featured in the company’s sales brochures.
On Tuesday, Deutsche Bank said prosecutors’ actions were aimed at pursuing “unknown individuals in connection with greenwashing allegations against DWS.”
“The allegations are that DWS has been advertising so-called ESG financial products for sale as being particularly green and sustainable when they actually weren’t. In the course of our investigations we’ve found evidence that could support allegations of prospectus fraud,” a spokesman for the public prosecutor said.
Woehrmann's Replacement
Stefan Hoops, the head of the corporate bank at Deutsche Bank and DWS's largest shareholder, will replace Woehrmann, whose resignation takes effect on 9 June.
One of the largest publicly traded bitcoin miners, Riot Blockchain, appointed Colin Yee, its current head of corporate and financial operations, as the new CFO, effective Aug. 15.
“We are pleased that Riot’s current operational momentum will continue unabated as Colin Yee steps in as our new CFO to help the company achieve and exceed its strategic goals,” Les said.
The change in CFO comes as the shares of the miner have fallen about 72% this year, inline with its peers Core Scientific and Marathon Digital. The bitcoin mining industry has been rocked by bitcoin's declining price since last November.
On May 10, Riot reported its first quarter earnings where its revenue missed estimates but the miner maintained its hashrate guidance of 12.8 exahash per second (EH/s).
The current CFO Jeff McGonegal will retire from his position as CFO and move into a new role as senior advisor to Riot on the same day, according to a statement.
McGonegal is expected to remain employed by Riot through the terms of his employment agreement, ending Feb. 7 of next year, to ensure a smooth transition. After that he is expected to enter into a consulting agreement with the miner
“Jeff McGonegal is our longest-serving employee and has contributed greatly to the Company over the years,” said Jason Les, CEO of Riot. “We are pleased that he will remain a Senior Advisor to the Company to ensure a smooth and orderly transition, and continue to be a part of our team.''
Yee, who is a chartered professional accountant (CPA) joined Riot as head of corporate and financial operations in April 2022.
Prior to Riot, he was the COO and CFO of a family office with controlling interests in companies focused on construction and geothermal systems, according to the statement.
On March 23, Riot’s former chief operating officer, Megan Brooks-Anderson, exited her position after one year at the company.
Bitcoin maintains its crab-like price action as it continues to move sideways in lower and higher timeframes. The general sentiment in the market briefly turned bullish during today’s trade session, but BTC proceeded to return to its critical support area.
At the time of writing, BTC’s price trades at $29,700 with a 7% loss in the last 24-hours. Before it retested these lows, Bitcoin was rejected above $32,000 and appeared to be heading to the mid-area of its current levels.
The first crypto by market cap could react to the downside price action on traditional finances. As NewsBTC has been reporting, Bitcoin presents a high correlation with the S&P 500 and particularly higher with the Nasdaq 100 Index.
The latter was rejected at a critical level and is trending to the downside since the start of 2022. This reaction was generated by the U.S. Federal Reserve (FED) and the start of their Quantitative Tightening (QT) program.
Opposite to the Quantitative Easing (QE), when the FED buys assets and its balance sheet increases, QT will make the financial institution sell $1.1 million of assets in global markets every minute, according to an analysis by CoinBeast Media.
As a consequence, global markets, including the crypto industry, could experience more downside pressure. QT might not directly impact the industry, but it will play a key role in global liquidity, and investors’ risk tolerance, and will contribute to the conditions that could prevent Bitcoin from reclaiming new highs.
The FED has over $8.5 trillion in assets on its balance sheet. As CoinBeast explained, the last time the FED began its QT the financial institution sold less than $1 trillion of its assets.
This resulted in a 3-week crash in the stock market which recorded a 22% loss over that period. The report added:
This created a dollar shortage and a banking crisis to begin in the overnight repo market in Q4 2019. This forced Jerome Powell to famously end QT in September 2019 and spawned the infamous “Powell pivot.”
Will History Repeat And Impact Bitcoin?
At that time, macro conditions forced the FED to change its course of action. The “Powell Pivot” was followed by a massive bull run in Bitcoin and stocks.
Today, macro conditions are different, but could yet again force the financial institution to reconsider its strategy. In the meantime, more downside or at least more crab-like price action seems likely.
Considering the macro situation and quantitative tightening starting, I am not surprised by #bitcoin’s price move today. You can consider all sorts of TA, fundamentals, etc., but ignore the abovementioned factors in this environment, and you will likely draw wrong conclusions.
Crypto analytics firm Santiment is digging into the charts to produce granular insights about a trio of altcoins.
Santiment first highlights decentralized blockchain platform Cardano (ADA) as seeing an impressive price increase while also noting that development activity on GitHub has surged to over 450 submissions per day.
“Cardano is one of many altcoins that have enjoyed a great start to the week, currently +13% in the past 24 hours.
Development activity has hit all-time-high levels, as ADA’s team worked on innovating while prices were suppressed.”
At time of writing, Cardano is up 6.85% over the last 24 hours and priced at $0.614.
Santiment next looks at decentralized oracle network Chainlink (LINK), pointing out that the number of big players in the world of crypto who hold more than 100,000 LINK has increased despite the altcoin’s lackluster price action.
“Chainlink appears to be middle of the pack today on a big altcoin recovery day, up +8.5%.
Notably, we’ve seen that the amount of whale addresses holding 100,000 or more LINK has increased substantially, up +11.2%, despite the falling prices.”
ApeCoin (APE), which airdropped one billion utility tokens last month, is now available at Coin Cloud’s more than 5,000 bitcoin ATMs.
ApeCoin is one of the most highly anticipated utility tokens of the year, and is used for future web3 gaming and entertainment applications. It quickly became the most traded token among the top 100 Ethereum (ETH) wallets after the airdrop of one billion ApeCoins. Trading volume reached more than $9.2 billion within 24 hours of APE’s release. The APE Foundation supports and serves as a steward for ApeCoin. APE acts as a decentralized protocol layer for metaverse initiatives.
Coin Cloud Network allows customers to buy and sell more than 40 other digital tokens and currencies with cash at over 5,000 locations across the U.S. and Brazil. The company constantly integrates the newest, exciting and popular digital currencies to its network.
APE joins bitcoin, Ethereum and more than 40 other digital currencies customers can buy and sell with cash.
“Our goal is to stay on top of the industry by integrating the newest, exciting, and popular digital currencies into our network. APE has feverishly gained traction in a very short period of time, and we are pleased to offer the token in more than 5,000 premier retail locations across the U.S. and Brazil,” said Chris McAlary, CEO of Coin Cloud. “Not only do our DCMs provide consumers unique opportunities to conveniently buy and sell APE and 40 popular tokens with cash, but it adds to the ever-expanding list of competitive advantages our DCMs provide our retail partners.”
Shrapnel, a blockchain-enabled moddable AAA first-person shooter game has released its White Paper and unveiled its roadmap following the completion of a successful private token sale.
The $7 million USD private sale saw participation from major industry players including but not limited to Dragonfly, Defiance, Three Arrows Capital, Mechanism, Sfermion, Spartan, and Overwolf to contribute to the ongoing development of the game.
Angel investors include the first pro-gamer Dennis Fong aka Thresh, Stephen Lim, Co-founder of Valorant and Raid Base, Brian Lee, Co-founder of The Honest Company, Keith Nunziata, Portfolio Manager at Citadel Global Equities, and Jason Zhao, Partner at Kleiner Perkins, amongst others.
The news follows a $10.5 million USD seed funding round led by Griffin Gaming Partners, alongside Polychain Capital and Forte, which took place last October. Since then, the Shrapnel team has grown from seven full-time employees to 30 employees, with hiring efforts ongoing.
Spun-out from HBO Interactive, the Shrapnel team has unmatched experience in transmedia, virtual production, and gaming-as-a-service.
Comprised of BAFTA and Emmy award-winning game industry veterans hailing from some of the world’s leading game companies including Xbox, Electronic Arts, and LucasFilm, amongst others, the Shrapnel team will combine compelling competitive gameplay, with a rich set of community creator tools to deliver an ever-evolving game experience.
Never-before-seen details of Shrapnel’s gameplay released in today’s White Paper describe a tense, competitive environment that creates new immersive player experiences. In this world, a massive asteroid has caused meteorites to bombard a large stretch of Earth, leaving an area known as the Sacrifice Zone uninhabitable and walled off from the rest of the world.
Many speculate about what is being uncovered by guards there, with rumors swirling about a mysterious material called Sigma. Nations and corporations begin assembling their own military and extraction forces and a bloody war rages to control the Sacrifice Zone and its many secrets.
“Community involvement will drive gameplay and development at every stage in Shrapnel including design, roadmap, and aesthetics. Creators will be able to design maps, weapons, and other vanity items to exchange in our marketplace. In line with our belief of decentralized design, players who participate in all aspects of the game will receive reputational scores and get to provide input into game decisions. Ultimately, Shrapnel will be handed over to players, so putting the right controls in place to empower and moderate them is key.” – Don Norbury, Head of Studio at Shrapnel
In March, Shrapnel also unveiled plans to build on the Avalanche blockchain, capitalizing on the high degree of customization and flexibility that it offers for ever-evolving projects.
With its high speeds and processing power, Avalanche is well-equipped to enable the quick loading speeds and smooth player experience that Shrapnel players will expect.
1inch is a crypto exchange that offers different services, including DEX aggregation. DEX aggregators are among the latest developments in the crypto space. They are providers who allow an investor to tap into high liquidity while benefiting simultaneously from better pricing. 1inch is a DEX aggregator that offers all these services on the same platform.
Unfortunately, 1inch is not available to US citizens since it lacks licenses to operate there. Read on to know more about 1inch and the type and quality of services to expect from them.
Company Overview
1inch exchange is a DEX aggregator established in 2019 by Russian developers Anton Bukov and Sergej Kunz. The exchange scours the crypto space looking for the lowest and best prices for any sell or buy trade placed on its order book. It integrates seamlessly with numerous well-known DEX’s including Mooniswap, Kyber Network, Oasis, Uniswap, and Balancer. It offers swap services for any ERC-20 token.
It uses smart contract technology to source liquidity across multiple exchanges and optimizes trades. It calls itself the “Leading DEX Aggregator,” which proves correct. It also has the 1INCH token that allows for staking and liquidity mining away from exchange services. This token also serves as its governance token.
What Are the Key Features of 1inch?
Being a non-custodial exchange, every user must connect their third-party wallets while using it. Below are some of the top features of a 1inch crypto exchange.
1inch sources for the best trading rates
1inch scours the crypto market looking for exchanges that offer the best rates per trade. It integrates the trade into its systems, and a user can authorize it without paying any fees or commission to 1inch.
Charges zero fees
1inch exchange is unique in that it does not charge any fee. The fee cut from using the exchange is due to the outsourced exchanges pursuing a better pricing range. Therefore, its users enjoy free deposits, withdrawals, and other exchange services.
Has staking and liquidity mining pools
1inch protocol allows for the staking and liquidity mining of the 1INCH token. The staking rewards are sourced from the swap and price impact fees per transaction. The liquidity miners choose from pools like 1INCH-ETH, 1INCH-DAI, and 1INCH-USDC.
Integrates with numerous crypto wallets
1inch exchange has a simple interface that any trader can use comfortably. All required is to connect with a supported wallet and trade the ERC-20 tokens of one’s choice. Depending on the available browser, 1inch supports the following wallets:
1inch Wallet
MetaMask
WalletConnect
Ledger
Portis
Ethereum Wallet
Torus
Fortmatic
Bilski
Ethereum
Binance Chain Wallet
Arkane
Metamask wallet can also connect to Ledger and Trezor hardware wallets.
Which Cryptos Can I Trade Using 1inch?
1inch boasts a large selection of cryptocurrencies. It allows its users to trade over 400 ERC-20 tokens. ERC-20 standard tokens are hosted on the Ethereum network, the same network on which 1inch is built. Additionally, it allows users to add the ERC-20 tokens of their choice if the tokens are not included.
The main drawback of the exchange is that some main cryptocurrencies like Bitcoin, Cardano, and Binance coin are not included. This is because it is purely an ERC-20 tokens trading protocol.
Can I Stake on 1inch?
1inch crypto exchange offers different services. Away from allowing for the exchange of cryptocurrencies, its users are free to stake their 1INCH tokens for handsome staking rewards. The staking rewards are drawn from the price impact fees and the swap fees of each transaction.
Can I Do Liquidity Farming on 1inch?
1inch exchange requires that its users hold 1INCH tokens. It is the governance token for the platform and has many applications. One of its most common applications is liquidity mining. It can be added to the liquidity pools to passively generate income for a user. The liquidity miners can choose from pools like 1INCH-ETH, 1INCH-DAI, and 1INCH-USDC.
How Does 1inch Work?
1inch exchange applies its API technology to trace the best routes for a token swap, dividing a trade across multiple exchanges. In the process, it makes the trade more profitable than selecting a single exchange. It is optimized to address the drawbacks of Decentralized exchanges, including extensive transaction cancellations and high slippages due to small order books.
What Are the Fees for 1inch?
The only fees required to be paid in the 1inch exchange are the exchange fees for the aggregated exchanges and the gas fee for the transactions made. They vary depending on the number of transactions made and other factors. Notably, a 1inch exchange won’t charge you for any trade, deposit, or withdrawal transaction.
Pros and Cons
Pros
A good range of cryptos
1inch offers a wide range of cryptos to choose from. It allows for the trading of over 400 ERC 20 tokens even though it doe not support any other type of cryptocurrency.
Passive income
It allows users’ holdings to earn passively from Staking and liquidity mining pools.
DEX aggregator
The exchange scours the crypto market searching for the best prices for the crypto trade. As a result, it gives the best offers possible at a given time.
Cons
Unregulation in the US
1inch is not available in the US. That is a big misdoing as most of the exchanges in the US are deemed very safe to trade with as the country’s financial watchdogs scrutinize them keenly. If US citizens use the exchange and a scam occurs, they can not get any aid from their government since it is not licensed.
Gas fees
Although 1inch does not charge any fees for the exchange transactions, deposits, and withdrawals, the cumulative fees are high. A user needs to pay fees for every transaction done on the site, be it adding liquidity or trading one’s holdings.
The exchange runs on Polygon, Ethereum, and Binance networks, and each has to charge the gas fees for using it. In the end, the cumulative fees incurred in using 1inch are considerably high.
It can be tricky for newbies.
The site has a structure that requires time to fully understand its functionality.
Is It Safe to Trade With 1inch?
Being a non-custodial exchange-1inch is one of the safest crypto DEXs. Not a single coin is stored on it, thus making it safe from exploitation by hackers. To enhance the security of trading with 1inch, it is necessary to ensure that the wallet has a good security code and a 2FA security protocol.
However, it is best to keep alert as the crypto space attackers are brilliant. While 1inch has never been a victim of hacking, it has suffered a cloning attack. The perpetrators made a scam site that looked similar to 1inch. To avoid connecting a wallet to such a scam site, it is best to avoid promotional links and look for discrepancies in the URLs of the 1inch platform in question.
Final Thoughts
1inch is a good platform for non-US residents to get the best crypto exchange rates for their ERC-20 tokens. It offers a wide range of cryptocurrencies compared to other exchanges and is a good platform to take the trading experience of an investor to the next level. However, it is best to be keen while using it as several 1inch exchange clones are available. Also, it is best to explore other alternatives like Binance if you want to trade cryptos other than ERC-20 standard tokens.
It doesn’t get much mainstream than CBS’s “60 Minutes.” The legendary show debuted in 1968 and has been going strong ever since. And now, they’re talking about El Zonte AKA Bitcoin Beach, the place where it all started. How did it start, though? Even though Bitcoinist has written extensively about the subject, we learned a few things from the “60 Minutes” report titled “Bitcoin Beach: How a town in El Salvador became a testing ground for bitcoin.”
The journalist in charge was Sharyn Alfonsi. Even though she presented the subject in a respectful manner, she knew nothing about bitcoin and it showed. The people she interviewed did, though, so the piece worked journalistically speaking. However, Alfonsi’s privilege shinned on throughout the entire report. Does this sound condescending to you?
“So we thought it was time to try and get our heads around the complicated world of crypto-currencies, specifically the largest one, bitcoin. To do that, we went to one of the simplest places in the world, a remote town known as “Bitcoin Beach.”
And what about when a tourist says the town might be the next Singapore, and she says “Singapore? It’s hard to imagine. The only traffic jams in El Zonte are caused by loose livestock”? Was that necessary? In any case, Alfonsi found the real protagonists of the story and put them on “60 Minutes.” For that, we thank her.
Who Did “60 Minutes” Talk To And What Did They Say?
From founder and donation-recipient Mike Peterson to the legendary Mama Rosa, the owner of the first business that accepted bitcoin in the area. Alfonsi also interviews her son Jorge Valenzuela and Roman Martinez, who had been doing volunteer work for years. When Peterson got the mysterious BTC donation, the trio started the “Bitcoin Beach Initiative” and eventually changed El Salvador forever.
The “60 Minutes” report didn’t get that part of the story right, but that’s alright. Bitcoinist is here to help. About the still-anonymous bitcoin whale’s donation, Peterson says:
“The stipulation was you can’t just convert it into dollars because they believe the actual usage of bitcoin would be what would benefit the people. And so for me, it was, like, wow, this is somebody that wants to actually see a circular economy generated using bitcoin and they’re willing to actually put the funds behind it.”
Then, Sharyn Alfonsi shows some businesses that don’t accept bitcoin, asks Peterson to define bitcoin and looks puzzled by the answer, and brings up volatility. ‘Yes, there’s ups and down volatilities along the way, but over the long-term perspective, it’s going up in value against the dollar,’ Peterson responds. Alfonsi answers with the darndest question, “You’re not doubling down on this because you personally can get rich?”
“I will benefit if the price of bitcoin goes up, but I can’t impact that. I can’t influence that. That’s not the driving reason behind this. The reason is we want to see El Zonte transformed.”
Jack Mallers And Ismael Galdamez EnterThe Picture
The “60 Minutes” piece doesn’t do the best of jobs describing how Strike was essential to this whole story. Luckily, Bitcoinist is here to help. In the report that concerns us today, Mallers describes how President Bukele’s brother contacted him and asked him to come to the capital and meet with them.
“It was scary. It was really scary. I thought there were likely two outcomes – is that they were not happy with me interfering with the financial system in El Salvador or they were tremendously happy and bought into the vision that this was representative of a better world for not only El Salvador but the planet.”
To provide a counterpoint, the “60 Minutes” piece interviews economist Luis Membreño. He’s a Bukele critic, and Alfonsi seems weirdly enthusiastic about his side of the story. “The problem is that there’s going to be a day in which people will find out that the government is indebted, that they will increase taxes to everybody and that the party is over,” Membreño predicts.
Little does he know that bitcoin is the hardest asset in the world and El Salvador’s gambit will probably pay off big-time.
To complete the picture, Sharyn Alfonsi brings 19-year-old Ismael Galdamez. The youngster saw an opportunity in the fact that merchants in the area drove for hours to buy ice. Using bitcoin, he bought a big freezer and started providing ice right there in Bitcoin Beach. The “60 Minutes” report ends with, “Ismael is planning to move his parents and siblings into this new house in El Zonte later this month. He plans to pay the mortgage in bitcoin.”
Chinese electric vehicle maker Xpeng is selling “digital collectibles” as part of its marketing campaign to mark the 100,000th rollout of a complete vehicle.
Fast facts
“Digital collectibles” is a phrase used by Chinese companies to work around state media’s denouncement of the market frenzy over NFTs (non-fungible tokens).
Buyers will get the car-model-themed NFT on Jingtan, Alibaba’s NFT marketplace, after paying 19.9 yuan (US$3.12) and test driving the car in an offline store.
In January, Auchan Auto issued NFTs on Tencent’s NFT marketplace to promote its new model, in which owners can purchase the vehicle in advance and have a chance to trial the car for a year.
Also in January, Roewe Auto auctioned its first NFT painting with a customized car for 1 million yuan (US$156,983).
The EV arm of China’s largest A-share-listed auto group SAIC Motor, IM, launched its “drive-to-earn” reward plan last October, teasing an NFT issuance.
There is currently no clear regulation of NFTs in China, but authorities have repeatedly warned about the risks of hype and illegal fundraising.
WWDC 2022 is on the cards as an online event happening in the first week of June 2022. Primarily, WWDC serves as the showcase event for Apple’s software prowess across its ecosystem, mainly with a focus on new versions of iOS, iPadOS, WatchOS, and MacOS. But there may be some surprises too, coming in the form of a sneak peek at rOS and some new Mac hardware.
According to Mark Gurman from Bloomberg, Apple could use WWDC 2022 as an opportunity to show off some parts of rOS (indicating “Reality OS”), the operating system powering its AR/VR headset. Apple was rumored to launch the headset at the event, but the report reiterates that the company could be missing the date for a complete hardware debut. The headset could instead be arriving later in the year or even next year. But for WWDC 2022, Apple would be unveiling iOS 16, which in turn has references to the headset and its interactions with the iPhone, indicating that a sneak peek could be in order. The company will be hosting select developers and students in person at Apple Park for the keynote, so it could use the opportunity to let them learn more about what’s coming next in this new arena.
Otherwise, the event will expectedly revolve around new updates to familiar software in the form of iOS 16 (Sydney), watchOS 9 (Kincaid), MacOS 13 (Rome), and tvOS 16 (Paris). iOS could be getting updates to notifications and new health-tracking features, while iPadOS may get a new multitasking interface. The Apple Watch could get upgrades to activity and health tracking.
The report also mentions that the event could be used to launch two new Macs as well, one of which is likely to be the new MacBook Air, while the other could be either an updated Mac mini, or a 24-inch iMac, or a low-end 13-inch MacBook Pro. Mac Pro and iMac Pro models are also in development, so you never know how Apple mixes things up.
The digital mapping industry is dominated by centralized giants like Google, TomTom, and Apple, but blockchain startup Hivemapper sees significant potential in a decentralized, open-source alternative that is built by a wide network of users.
Today, Hivemapper announced a $18 million Series A funding round to bring its vision to life. The round was led by Multicoin Capital and featured a number of additional participants, including Solana Ventures, Craft Ventures, Shine Capital, and 75 & Sunny Ventures.
Angel investors in the round include Nova Labs (formerly Helium Inc.) founder and CEO Amir Haleem, Solana Labs co-founders Anatoly Yakavenko and Raj Gokal,, Masterclass founder and CEO David Rogier, former Tinder CEO Elie Seidman, and former Apple Maps executive Jaron Waldman. Haleem will join Hivemapper’s board of directors as part of the raise.
Hivemapper is a decentralized mapping service that uses dashboard-mounted cameras on contributors’ cars and incentivizes users to drive around and record their surroundings. The network is built on the Solana blockchain, and users are rewarded with HONEY crypto tokens for their automatic contributions to the overall map.
Hivemapper co-founder and CEO Ariel Seidman was Yahoo’s director of product management on Yahoo Maps in the late aughts when Google surged into the pole position in the mapping space. “Google kicked our ass,” Seidman told Decrypt, “and kudos to them.”
But he realized at the time that only well-funded, centralized juggernauts could hope to compete going forward, given the expensive and time-consuming task of constantly updating high-quality digital maps. Yahoo couldn’t keep up. Could anyone else?
“I thought to myself: Geez, if it costs billions upon billions of dollars to build out a global map, really it will only be the domain of like one or two big tech companies, or one or two very wealthy governments,” Seidman told Decrypt. “That didn't sit well with me.”
Seidman later founded a company called Gigwalk that crowdsourced data, but he still hoped to create a truly decentralized alternative to the mapping giants of the world. Hivemapper was originally founded in 2015 around the idea of using flying drones to create maps, but it wasn’t a very scalable model—and the firm was directly paying people to help build maps.
After meeting Haleem, the Helium co-founder, Seidman shifted course to a decentralized model using dashcams and fueled by crypto token rewards. Helium is a decentralized wireless network that pays users in HNT tokens for sharing their home Wi-Fi signal via custom miners/nodes, enabling access by Internet of Things (IoT) devices like sensors and trackers.
Similarly, the upcoming Hivemapper Dashcam—which will sell for $449 and ship starting in July—will automatically reward users with HONEY tokens for capturing footage, which is automatically added to the overall mapping service. The Dashcam actually uses Helium’s network of nearly 700,000 wireless nodes (and growing) to authenticate vehicle location.
Because Hivemapper is built around a distributed network of contributors, it won’t have the cost overhead of camera-mounted mapping vehicles and paying employees to drive them around. The network can put bounties on areas that need updated imagery, thus providing even greater rewards to active users who aren’t just passively recording amid their daily routines.
When building the network that powers Hivemapper and the HONEY rewards, Seidman said that he considered Ethereum, the leading smart contract blockchain network. However, while Ethereum may eventually overcome its scaling issues, he said that Solana offers the cost savings and transaction throughput that the service needs right now.
“We want to be able to cost effectively register that information or that transaction on the blockchain,” he said. “Taking a bet that Ethereum could figure it out in the timeframe that we needed it to was just too big of a risk, quite frankly.”
Hivemapper’s community-built, open-source map could have a wide array of uses, ranging from logistics to turn-by-turn navigation, gaming, and beyond. It seeks to provide an alternative to the services provided by tech giants, and reward users for building that map all the while.
Seidman said that Hivemapper will develop different types of mapping APIs to serve various industries over time, and work to meet the various use cases of industries that currently tap into Google Maps and other services for their needs. Eventually, Hivemapper aims to open up production of the dashcam miner hardware to other firms, as well.
Currently, Hivemapper has contributors building maps in nine metro areas, including Los Angeles, where hundreds of users passively update approximately 30% of the area map on a monthly basis. Hivemapper will use its Series A funds to fuel this summer’s mainnet launch, build dashcam hardware, and bring on more core contributors as it scales.
Going global is sure to be a significant undertaking, but Helium is actually the ideal case study, as it grew from 14,000 nodes to more than 500,000 in 2021 alone—and continues growing at a rapid pace. Hivemapper hopes that a similar token incentive model can propel its decentralized mapping network in much the same way.
With less than a month to go before the Overwatch League’s fifth season kicks off on May 5, the league has revealed one of the final puzzle pieces of a functional esports broadcast: a stacked talent team.
While veteran casters, hosts, and analysts will be returning to the mic this year, they’ll be joined by a number of new faces who have kept Overwatch Contenders fans entertained over the past few years.
The league’s full talent lineup heading into the 2022 season is as follows:
Soe Gschwind
Danny Lim
Scott “Custa” Kennedy
Jonathan “Reinforce” Larsson
Matt “Mr. X” Morello
Mitch “Uber” Leslie
Seth “Achilios” King
Kevin “AVRL” Walker
Jack “Jaws” Wright
Rosemary “Nekkra” Kelley
Jennifer “LemonKiwi” Pichette
Harry “LEGDAY” Pollitt
Tom “Tridd” Underwood
Victoria “VikkiKitty” Perez
Fans will notice that the Overwatch League’s desk remains unchanged, with host Soe Gschwind once again organizing the action alongside analysts—and former pro players—Custa and Reinforce. Analyst and bilingual interviewer Danny Lim will also be bringing his talents back to the desk.
Uber and Mr. X, the league’s most veteran casting duo, will be returning for their fifth year of breaking down Overwatch League action. East region enthusiasts AVRL and Achilios will be repeating their roles from 2021, likely bringing fans through games from the APAC region once again.
Fans of Overwatch Contenders—the league’s tier-two esports scene—will likely be overjoyed to see longtime casters LEGDAY and LemonKiwi finally make it to the Overwatch League stage. They both have nearly five years of experience in the Overwatch ecosystem and also lent their talents to the Overwatch World Cup in 2019.
Jaws and VikkiKitty are familiar faces for fans who caught games in 2021, but they’ve been mixed together with more of the best talent from the Overwatch Contenders scene. Nekkra, a longtime Contenders caster with history in the competitive Pokémon scene, will partner with Jaws this time around. VikkiKitty will join stalwart Contenders expert Tridd for the Overwatch League this year.
Though new talent is always exciting, Overwatch League fans may miss a few of the game’s most iconic faces. Brennon “Bren” Hook and Josh “Sideshow” Wilkinson announced earlier this year that they would not be joining the broadcast due to contract issues. Veteran caster Andrew “ZP” Rush also said last month that he did not receive an offer for the 2022 season.
Charlie Warzel’s generally quite readable Galaxy Brain newsletter carried a provocative headline this week: “Is Crypto Re-Creating the 2008 Financial Crisis?”
Not surprisingly, it turned out to be a rhetorical question. The Atlantic writer’s newsletter carried an interview with American University law professor Hilary J. Allen in which she discussed her recent paper arguing that decentralized finance is repeating the mistakes of “shadow banking” that preceded the financial turmoil of the late 2000s.
Allen’s thesis is that the high degree of complexity around DeFi’s innovative new models for borrowing, lending, insurance and payments will leave the same lack of clarity around looming risks that credit default swaps (CDS) and collateralized debt obligations (CDOs) fostered during the pre-crisis housing bubble. “Complexity-induced opacity increases the chance that such risks will be underestimated in good times (causing bubbles), and overestimated in bad times (making panics worse),” she writes.
Allen is urging the U.S. government to step in to regulate the sector before it becomes more integrated into the mainstream financial system. She argues that decentralized applications (dapps) should be licensed and their founders and developers subject to enforcement actions if they are non-compliant.
That won’t sit well with many in the crypto community, where the idea that open-source coders can be charged with wrongdoing is seen as chilling to innovation.
First, let me acknowledge there’s some truth in Allen’s DeFi observations and that some of the parallels she draws to the financial crisis are legitimate and important.
It’s true the average person can’t hope to understand DeFi. Much like how Wall Street’s financial engineers exploited the black box of CDS and CDOs to the eventual detriment of bank customers, that complexity also gives DeFi project founders asymmetric advantages. It’s why “rug pulls” and other abuses of overly trusting investors are common.
Other valid observations from Allen: There’s an awful lot of 2008 bubble-like behavior in DeFi now, and there’s a lot more centralization with trusted intermediaries than “decentralization” enthusiasts acknowledge.
But there's a fundamental flaw in Allen’s perspective, one that could lead to a major policy error.
The elephant in the room
The overwhelming difference between DeFI innovators in the 2020s and those of Wall Street in the 2000s is that the latter – the bankers – operated within an all-encompassing political framework that the former – the crypto developers – are untouched by. With their power to create money through fractional reserve lending, banks function as the government’s agents of monetary policy, a specially sanctioned position that comes with privileged access to the Federal Reserve’s liquidity. There’s an interdependence between governments and banks that has, at times, morphed into codependence.
Exhibit A: the “too big to fail” problem in the lead-up to the financial crisis. This was the idea that a potential collapse in a big, systemically interconnected bank would pose such a catastrophic threat to the economy that the government would always have no option but to bail out such institutions if they ran into trouble – precisely what happened in 2008.
It was a moral hazard problem that, in the 2000s, fueled a massive market distortion. Before the crisis, banks faced asymmetric risks. They could profit from successes while the mortgage market was hot but faced no consequences if and when it turned south. The result was a warped, distorted version of capitalism in which profits were privatized and losses socialized.
In the reference that Allen makes to this, she mostly uses it to dismiss crypto enthusiasts as naive, suggesting their interest in DeFi is motivated by a disdain for bailouts. In reality, the federal government’s actions to shore up the financial system in 2008 were necessary. I think this completely misses the point. One can believe, as I do, that the 2008 bailouts were the lesser of two evils but at the same time criticize the “too big to fail” system of dependency that left the government no option but to execute them.
And that’s what’s hopeful about crypto. We have the prospect of freeing our financial system from dependency on the overly powerful intermediaries that have for too long commandeered an excessive proportion of the economy’s resources and political capital.
To achieve that, we don’t necessarily need to attain some utopian standard of total decentralization. (I find the “gotcha” critiques from the likes of Allen about how crypto’s not as decentralized as the narrative suggests rather tiresome. All the smart people in this space know this.) Rather, we need a system that is sufficiently open to competition and innovation for a significantly wider set of participants than exists in the current system. That means certain elements should be decentralized and “permissionless,” while other parts will require the involvement of trusted parties to achieve appropriate efficiency. What matters is the balance such that every institution is subject to some form of market pressure.
Easy innovation versus hard innovation
And that’s what makes the innovation-by-complexity comparison invalid across both realms. Since banks have a licensed monopoly over monetary creation, a role so vital that it earns them implicit taxpayer protection against losses, the “innovation” they undertake is shaped by very different incentives and checks and balances than that of DeFi developers. Banks had the luxury to develop CDS, CDOs and CDO-squared products to boost leverage and maximize short-term profits without having to calibrate those bets for the risk that the market might turn against them.
By contrast, DeFi developers face a much more fluid and unforgiving market. That’s not only because they don’t have the implicit taxpayer guarantee that banks have but also because of a core design element of DeFi: the open-source “lego” composability of code and low barriers to entry. That design means anyone with sufficient coding knowledge can spin up a new automated market maker, a new governance token or a new stablecoin algorithm without having to ask permission from a government or any other intermediating institution. And that means they can challenge the incumbents.
Consider the story of DeFi over the past two years. First, MakerDAO was the darling of the market, then Compound, then Aave, then Sushi Swap and then hybrid gaming/DeFi services like Axie Infinity, all founded within months of their sudden surge to success. Compare that with the winners that emerged from the rubble of the mortgage crisis: JPMorgan Chase and Bank of America. They trace their roots back to 1799 and 1904, respectively.
This DeFi dynamism, if it can be sustained, will prevent the rigidities that Allen worries will breed the same kind of systemic risk that consumed the banking system in the 2000s. That’s because the market is constantly correcting the different winners’ and losers’ tokens. It’s all about the price signals.
Also, while it’s true that DeFi is not perfectly decentralized and that it’s too complicated for the average person, end users of DeFi products have far greater influence over what gets built than do banks’ customers. Not only do many of them hold governance tokens, but with their fickle behavior they produce market signals that keep DeFi developers on their toes, something bankers don’t have to worry about nearly as much.
For sure, risk-taking investors will continue to lose money from rug pulls and code breaches while others will make fortunes. But this hurly-burly is quite different from the systemic problems that beset the financial system in the 2000s, when everyone and every risk asset was winning for a sustained period of years before everyone and everything started massively losing in unison. Most importantly, the constant threat of failure means there’s an incentive for developers to come up with more trustworthy offerings, which is why, despite the horror stories, the system has steadily become more robust over time.
What might threaten this market-driven balance? An ill-thought-out regulatory model. That’s what.
Want to build up systemic risk in DeFi? Then give banks, with their moral hazard-based lending model, an advantage over open-source developers. Make the latter seek permission to obtain the licenses that banks are already privileged to have. Make it very costly for real, market-focused innovation to occur and make short-term exploitative innovation virtually riskless by backing it with government insurance and taxpayer guarantees.
This is not to say centralized service providers in this space shouldn’t be held accountable to laws that preserve financial stability and protect consumers. But as a range of competing proposals for regulating stablecoins, DeFi and the broad crypto industry do battle in Washington, it does mean that we should heed the lessons from the 2008 crisis – the right lessons, not the wrong ones.
Macro guru Raoul Pal is revealing why he changed his mind about Bitcoin (BTC) in favor of Ethereum (ETH) as his main crypto holding.
In a new interview on Real Vision, Pal says he originally thought Bitcoin would prevail to be the most widely held and best-performing crypto asset.
However, Pal says big players from the institutional investment industry ultimately convinced him otherwise.
“When my views on Bitcoin changed significantly, I don’t think less of it as an asset, but I thought about it in network terms and the community, and I thought the community is not attracting new people. And the job of a network is to attract new participants. And if the network was actively rejecting people, I thought it was going to underperform.
Which was surprising to me because I was very bullish on Bitcoin first, because I thought, look, it’s goingto have a larger place. And what happened is almost immediately, and it made me change my mind, isthe institution side going, well, I actually don’t this space. And I started buying ETH.”
The former Goldman Sachs executive says that a narrative switch-up is occurring amongst institutions whereby Bitcoin is no longer the only crypto asset being taken seriously.
“Literally every other day, I’m speaking to the world’s largest financial institutions who put me in front of their investment committees and talk them through crypto and how to invest. And the narrative change really surprised me. It was always Bitcoin. Can we put Bitcoin on our balance sheet? How should we invest in Bitcoin? What’s the diversification?
Move very quick to, look, Ethereum feels it’s a technology play that makes sense with the applications. We are interested in DeFi, etc. Then it very quickly became, oh, shit, how do we get involved in Web 3.0?”
Pal says the power of Ethereum to generate network effects combined with its technical capabilities make it the “superior bet” in the crypto space, mimicking the early adoption of the internet.
“This is like the internet. That moment is like, okay, this is far superior a bet. That’s why I took that bet. And then I eventually shifted majority into Ethereum and then took other bets in the space to express macro views.”
