His reasoning is simple.
The chatter around yield farming is reminiscent of summer/fall 2016 when everyone was starting to buzz about “app-coins” and initial coin offerings. Will this craze also flame out? On Unconfirmed Tony Sheng discusses how it works, why everyone’s talking about it, and whether or not it’s sustainable.
And on Unchained, Chamath Palihapitiya, the founder and CEO of Social Capital, and the chairman of Virgin Galactic, does not hesitate to admit he has no idea what DeFi or Libra are and makes no bones about saying he does not believe in Ethereum, but he explains why he believes Bitcoin will be the category winner. Hint: it has to do with simplicity.
This Week’s Crypto News…
If you’ve been watching this yield farming trend wondering what exactly is going on, check out Dan Elitzer’s recent post called Aquaponic Yield Farming. He says, “lending and exchange protocols, particularly ones that utilize pooled liquidity and automated market makers, are naturally symbiotic. Lending protocols like Compound and Aave want large quantities of assets to be deposited in their liquidity pools to maximize loan availability while minimizing borrowing costs. Exchange protocols like Uniswap and Balancer want large quantities of assets to be deposited in their liquidity pools to maximize the potential size and volume of trades while minimizing slippage — they don’t care whether the assets in their pools are receipts for loan collateral, so long as there is sufficient unutilized liquidity in the lending pool to enable withdrawals as needed.” Then he describes how people can earn from lending, use it to yield from trading and then make more available for lending.
Coin Metrics did a detailed analysis of how Coinbase listings have impacted the prices of those crypto assets. Unsurprisingly, prices tended to immediately rise after the announcement, but the size of the increase does vary based on whether it’s a bull or bear market. For instance, before its December 2018 announcement, most assets listed were dropping in price. Afterward, the assets saw price rebounds of, on average, 50% against Bitcoin. In August 2019, Bitcoin had just hit highs that July but had started to trend down. For assets announced then, there was an immediate bump of 10% but by 100 days out, many of the prices had dropped. And finally, for new assets announced in June 2020, the listing announcement was made as asset prices were trending upward after the selloff in March. Afterward, asset prices continued to rise. Coin Metrics warns that the 132% pop that OmiseGo saw after its listing announcement is an outlier, and the mean and median values for appreciation against USD, Bitcoin and ETH are between -1% and 14%.
After $2.1 billion could not be accounted for on its books, Wirecard, the issuer of cryptocurrency payment cards for TenX and Crypto.com, has begun insolvency proceedings. [Disclosure: Crypto.com is a sponsor of my podcasts.] Wirecard’s CEO, Markus Braun also resigned, and was then arrested but released on bail. Both Crypto.com and TenX say that their operations are unaffected for now. TenX told CoinDesk, “We are however monitoring the situation closely and are always evaluating the best options for our customers,” and Crypto.com CEO Kris Marszalek tweeted that user funds have not been impacted, saying, “Wirecard does not have custody of any crypto held by Crypto.com.”
The Department of Justice indicted Rowland Marcus Andrade, the founder of AML Bitcoin and the NAC Foundation on charges of money laundering and wire fraud. He allegedly raised funds by conducting an initial coin offering, trying to raise $100 million, for AML Bitcoin. The NAC Foundation claimed in its white paper that AML Bitcoin would “include features that would allow the cryptocurrency to comply with … AML and know-your-customer (‘KYC’) regulations and laws by using ‘biometric technologies’ among other methods to confirm the identities of participants in transactions using AML Bitcoin,” the filing said. Also, Andrade, the NAC Foundation and his associates claimed that they would have had an advertisement air during the Super Bowl if the National Football League had not rejected the ad for being too controversial. The filing alleges, “In fact, the NAC Foundation did not have the funds to purchase the advertising time, and the advertisement was never reviewed or rejected by the network or the NFL.”
After a six-month fourt battle with the Securities and Exchange Commission, Telegram has agreed to pay a $18.5 million penalty over its initial coin offering. The messaging platform will also notify the agency if it plans to issue a digital currency in the next three years. Finally, Telegram is liable for disgorgement of $1.22 billion, though that amount is credited and offset by $1.19 billion paid as “termination amounts” according to the purchase agreements for Grams, as well as the amounts that some investors loaned to Telegram previously.
SEC Chairman Jay Clayton, who has a reputation for being somewhat unfriendly toward crypto assets, was nominated to be the next federal prosecutor in Manhattan. The result of the nomination process is uncertain, but the possibility of Clayton leaving the SEC has made some in the crypto community hopeful that his successor could be friendlier to the industry.
Square Crypto began a search for a unicorn Bitcoin designer but decided to instead fund a decentralized Bitcoin design community. They’ve created a Bitcoin Design Slack workspace, and would like designers to contribute to a Bitcoin design guide and user experience research to Bitcoin Core, BTCPay Server and Bisq. Plus, it’s created a grant program for designers. If you know of any designers who are interested in Bitcoin, spread the word!
Crypto for Black Lives launched a $45,000 matching pool for organizations supporting Black Lives and racial justice. It takes crypto or fiat and can be found at cryptoforblacklives.com. There’s also a $175,000 match of up to 10x on Gitcoin that ends July 3. People willing to match can let Crypto for Black Lives know how much you’d like to match and which organizations you’d like to match, while donors just need to upload receipts of donations. Crypto for Black Lives will match them as long as matching funds are available. Prior donations count!