Connect with us

Cryptocurrency

Exchange-Custodied Bitcoin DeFi Outperforms Trustless Solutions

Published

on


Although the Bitcoin blockchain lacks the infrastructural model to enable interoperability and power a DeFi landscape like Ethereum, the asset is increasingly being used to provide liquidity in the DeFi market.

Without any doubt, the Ethereum blockchain remains the core foundation of the DeFi narrative due to the ever-growing network of applications and developers relying on its infrastructure to power innovative financial systems. Hence, for a while, it was almost impossible for crypto holders other than Ethereum users to access the benefits of quality DeFi platforms without undergoing tiresome and often complex processes of exchanging their coins to Ether or supported ERC-20 tokens manually.

However, it is worth noting that the most compelling element of DeFi is how it continues to propel new paradigms relying on unconventional methods of navigating the financial landscape. Unsurprisingly, this disruptive approach has helped participants to find ways to bypass the inter-blockchain restrictions stifling the establishment of a truly diverse DeFi ecosystem spanning across many blockchains. Now, we have begun to witness the emergence of a wide array of solutions designed to provide easy means of engaging in the Ethereum ecosystem without necessarily relinquishing the value of their non-Ethereum-based tokens. As expected, at the heart of this emerging trend is Bitcoin DeFi.

The State of Bitcoin DeFi

Although the Bitcoin blockchain lacks the infrastructural model to enable interoperability and power a DeFi landscape like Ethereum, the asset is increasingly being used to provide liquidity in the DeFi market. Data from Btconethereum.com shows that over $1.5 billion worth of BTC is currently circulating in the Ethereum network. This is largely due to the growing list of solutions introducing new ways to tokenize Bitcoin. Like every other concept and innovation linked to the DeFi narrative, the goal was to establish trustless Bitcoin DeFi models by heavily relying on decentralized systems and smart contracts. However, over a year after Bitcoin DeFi came to the fore, experts suggest that custodied solutions, especially the exchange-based ones, have emerged as the most viable option. Why is this so?

For one, tokenized bitcoin offered by centralized counterparties are generally seamless and cost-effective. In most cases, they entail easy processes for users to swap their Bitcoin for Ethereum-compatible tokenized Bitcoin. In their most basic form, all a user needs to do is send Bitcoin to a wallet and instantly receive an equivalent value of tokenized Bitcoin. As such, it comes as no surprise that Wrapped BTC (WBTC), a product of BitGo, represents a large share of the Bitcoin DeFi market. At the time of writing, there are over $1.1 billion WBTC in circulation. In the distant second is rBTC as over $300 million worth of tokens currently locked in the Ethereum blockchain. Note that rBTC is a solution powered by Ren, which reportedly incorporates elements of custodied infrastructures in its operation.

Next on the list of top Bitcoin DeFi players is Huobi, with its HBTC occupying the third spot in terms of market share. In contrast, the fully-decentralized models are struggling to establish themselves as viable options. For instance, only around $5 million worth of tBTC exists. The inability of trustless Bitcoin-backed stablecoins to establish themselves in the market is indicative of the growing importance of trusted entities in the Bitcoin DeFi narrative. Besides, there are currently5006 BTC locked on Binance Chain, which further proves that exchanges are increasingly becoming the preferred DeFi portals for Bitcoin holders.

Kava to Reinvent Bitcoin DeFi

More importantly, Kava and its latest application, Harvest, are implementing even more seamless systems for custodied solutions to mint and burn Bitcoin and other assets. As noted by Michael Ng, Co-founder of StakeWith.Us, both DeFi-focused protocols implement cross-chain functionality that strips away some of the cumbersome processes and restrictions peculiar to Bitcoin DeFi. He added:

“Harvest is the first money lego to be built on Kava’s cross-chain DeFi ecosystem. Leveraging on Kava’s infrastructure not only allows the application to tap into Kava’s security, cross-chain features and price feeds, but also Kava’s community, which has been very supportive over the past year. We can’t wait to see what other money legos will start to be built and stack on one another – without the crazy gas fees of course.”

Hence, Kava has positioned itself at the forefront of the DeFi movement by introducing advanced liquidity generating infrastructure that are suitable for multiple crypto networks. With this, new players like Huobi and OKEx can up their pursuit for even more effective Bitcoin DeFi solutions. Also, Peter van Mourik, CEO at Chainlayer.io, while reiterating this sentiment, revealed that he expects Kava and Harvest to optimize the DeFi ecosystem as a result of their advanced cross-chain functionalities:

“ChainLayer is excited to see Kava push forward on cross-chain money markets with Harvest. Harvest is a perfect next step in the plan that Kava has set out and it will be a great addition to the growing DeFi market, offering people more decentralized options to maximize their ROI on their assets with a healthy governance structure and low cost of transactions.”

Judging by the acceptance of users using chasing yield exchange custodied Bitcoin DeFi solutions, it is safe to say that centralized finance and the decentralized finance world are still interwoven.

Altcoin News, Bitcoin News, Blockchain News, Cryptocurrency news, News



Source link

Up Next

Filecoin Mainnet Goes Live 3 Years After ICO, FIL Price Shoots Over 100%

Don't Miss

How Decentralized Exchanges Are Taking Over

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Cryptocurrency

Ripple Plans to Relocate to Japan Amid Unfavorable Regulations in the U.S.

Published

on

By


Ripple is planning a Japan move due to poor U.S. regulations. Other considered locations include the UK, UAE, Singapore, and Switzerland. 

Blockchain payment services company Ripple Labs Inc may relocate to Japan from the U.S. due to a lack of regulatory clarity. Apart from Japan, the company has also shortlisted some other countries for relocation. Notably, Japan is the most likely country that Ripple may move to if the blockchain firm leaves the U.S.

Ripple Eyes Japan as Potential Destination

According to a Bloomberg report, the relocation plan was revealed by Ripple CEO Brad Garlinghouse. The CEO also mentioned three other potential destinations for the blockchain firm. The other likely destinations include Switzerland, the United Arab Emirates, and the United Kingdom.

The CEO explained the reason for choosing the shortlisted countries:

“The common denominator between all of them is that their governments have created a clarity about how they would regulate different digital assets, different cryptocurrencies.”

Garlinghouse also referred to the lack of regulatory clarity on cryptocurrencies in the U.S. He said that the U.S. government is yet to decide whether digital assets are commodities, currencies, properties, or securities.

Over time, Ripple has been in a legal battle with investors. The investors claimed that Ripple illegally issued XRP as a security.

Speaking further in another interview with Bloomberg Television, Garlinghouse expressed his desire for Ripple to remain in the US but with regulatory clarity. As noted by the CEO, regulatory clarity in the US will encourage the blockchain firm to invest and grow its business in the country.

Ripple’s Destination Preference

In addition, Garlinghouse revealed the reason behind shortlisting Japan as the most likely country for relocation. He said that the country has created “an environment for a very healthy market to develop.”

In 2017, Japan acknowledged cryptocurrency, with the country introducing a registration system for digital assets. At that time, 11 cryptocurrency exchanges initially registered and got approval from the Financial Services Agency (FSA).

Furthermore, Ripple also has a relationship with the Japanese company SBI Holdings. Reinforcing the consideration to move Ripple to Japan, Garlinghouse added:

“Japan is one of our fastest-growing markets, in part because we have key partners like SBI. I have spoken to the SBI team about the fact we are looking at.”

According to a survey by Bitmax, Ripple crypto-asset XRP is getting more recognition in Japan. As noted in a tweet by Bitmax, Japanese investors prefer XRP to Ethereum.

On the 23rd of October, CNBC reported that Ripple is also eyeing London as a new location for its blockchain firm. Unlike the U.S., the UK Financial Conduct Authority (FCA) considers XRP a currency and not a security. With the FCA clarifying that XRP is not a security, Garlinghouse said it would be “advantageous to Ripple.” He said the FCA’s declaration means RIpple is safe to operate in the UK.

Before now, Ripple executive chairman Chris Larsen had said that the firm may move its headquarters outside the U.S. Larsen revealed the relocation to Fortune in a virtual interview. At that time, the chairman mentioned Singapore and the UK as new possible destinations for Ripple.

Blockchain News, Business News, Market News, News

Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
When he’s not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.





Source link

Continue Reading

Cryptocurrency

BitMEX Rides on New Futures Listings to Dive Deeper into DeFi 

Published

on

By


BitMEX plans to offer futures contracts for DeFi projects Yearn.finance (YFI), Polkadot (DOT), and Binance Coin (BNB).

The Seychelles-based BitMEX exchange said via its blog post on Friday that it plans to launch three new Altcoin/USDT underlying quanto futures contracts. Yearn.finance (YFI) – an Ethereum-based token governing the Yearn.finance platform — will be the first DeFi token to be added and then later Binance Coin (BNB) as well as Polkadot‘s (DOT) native token.

Through the new quanto futures contract, BitMEX traders will comfortably hedge their risk exposure to BNB (Binance Chain’s native coin, which powers the Binance ecosystem). Popularity has been increasing amongst Polkadot developers this year prior to the anticipated launch of PolkaBTC in 2021.  

In the post, BitMEX said:

“These three contracts aim to provide our users with quality coverage of highly liquid products.”

By October 30th at 4:00 UTC, trading will begin since, at that time, the exchange would have finished adding all these three altcoins.

Fixed Bitcoin Multiplier Necessary

Ownership of a fixed asset of the token being traded like Tether’s USDT is a requirement for traders under traditionally margined contracts. However, these new BitMEX contracts are unique since traders are able to post margin in Bitcoin (BTC), and any profits or losses made whenever the contract price changes will be informed of Bitcoin.

“As with all quanto products, these contracts have a fixed Bitcoin multiplier regardless of the underlying Altcoin price. This allows traders to long or short each coin without needing to hold the specific coin or USDT. Traders post margin in XBT, and earn or lose XBT as the future’s price changes.” BitMEX said.

BitMEX also disclosed that it might include other more altcoin product listings before the year ends, but it didn’t hint which pairs will be unveiled next. Nevertheless, it stated that it would put much focus on decentralized finance which recent has become a big interest for most crypto investors.

Acceleration of Know Your Customer Mandate

The announcement has emanated only some days after BitMEX has also announced that it will be accelerating its Know Your Customer program. BitMEX gave all platform users up to November 5th, 2020, at 00:00 UTC to be fully verified. Users who would not have completed the KYC requirement and get verified will be unable to open new positions and even withdraw their funds from December 4th, 2020, at 00:00 UTC.

BitMEX’s acceleration of its mandate to verify all its customers’ identities was a response to charges regarding facilitating unregistered trading that the U.S. government leveled against it.

Adjustments in Quanto Futures Contracts

Last month, BitMEX announced the listing of four new Quanto Futures contracts for Chainlink (LINK), Tezos (XTZ), EOS (EOS), and Cardano (ADA). All these altcoins were paired with the Tether (USDT) stablecoin. Additionally, traders do not need to hold USDT or any specific coin to long or short each coin since the new listings have a fixed Bitcoin multiplier just like other Quanto products.

Before the announcement, BitMEX decided to remove six expiring six altcoin futures markets, namely Monero (XMR), Zcash (ZEC), Ethereum Classic (ETC), Stellar (XLM), NEO (NEO), and Dash (DASH).

Altcoin News, Bitcoin News, Blockchain News, Cryptocurrency news, Ethereum News

James Lovett is a talented crypto enthusiast who finds pleasure in sharing more knowledge on fintech, cryptocurrency as well as blockchain and frontier technologies. He likes to keep himself furnished and updated with the latest innovation in the crypto industry, blockchain technology, Internet of Things (IoT) and other technologies. As a result, he tries to furnish ardent crypto supporters with the latest news on blockchain and distributed-ledger technologies. Indeed, Blockchain and Cryptocurrency is changing the world as we know “one block at a time”. As a hobby, he also trades in small amounts of cryptos every now and then.
An author with experience writing for tech, digital, and cryptocurrency blogs!



Source link

Continue Reading

Cryptocurrency

Filecoin Upgraded Network Allows Miners Claim 25% of Block Rewards

Published

on

By


The latest Lotus 1.1.0 network software upgrade enables Filecoin miners to access 25% of mining rewards immediately with no vesting.

As reported by The Block, Filecoin‘s network lead Molly posted on Wednesday a downloadable Lotus 1.1.0 software upgrade in the project’s Slack channel. Participants who want to continue operating in the decentralized storage network would have to comply since this is a mandatory upgrade.

She posted the following in the channel:

“You must upgrade before epoch 170,000 (Thursday Oct 22 at ~22:40 UTC), or you will lose sync with the chain”.

On Thursday evening EST, the network reportedly reached the block height of 170,000.

FIP-004 Upgrade Enables Miners to Receive 25% Immediately 

At block height 170,000, Filecoin activated the FIP-004 change, which it emphasizes its miners to update. As per the post, 25% of block rewards received immediately without vesting will help miners to improve their ability in reinvesting in FIL (the network’s native cryptocurrency).

Over the last 24 hours, Filecoin miners produced around 150K FIL. If that rate is applicable under the new system, miners will receive daily block rewards amounting to over 40,000 FIL. While that is good, the challenge that the company would face is how much out of the immediately released FIL are miners willing not to sale on the markets but re-pledge so that they can enhance their computing power.

Upgrade Solves Miner Liquidity Issue

Earlier this week, a couple of major Filecoin miners halted their mining growth plans from the time the network’s mainnet officially went live. The miners wanted Filecoin’s economic model revised since the amount needed to begin mining was hefty. So, they collectively hesitated to add more of the coins to the decentralized storage network to overall slow down the network’s growth rate.

For sealing 32 gibibytes (GiB) of data into effective storage mining power, miners require to pledge 0.1901 FIL as collateral under Filecoin’s current design as per Filecoin’s blockchain explorer.

Before the implementation of FIP-004, block rewards were not released to miners immediately but vested linearly over a period of 180 days. Now, the rewarding process is more motivating as miners are entitled to receive 25% immediately and wait for the rest 75% that will still be vested in a period of six months.

Miners Are Now Motivated to Pledge

The revision is a response to the organization behind Filecoin Protocol Labs put forward to address miners’ liquidity issues complaints raised against the current economic model. As a result of the software revision, circulation will be adequate and price more steady since miners are now more motivated to pledge their FIL for mining future rewards making the process to reach equilibrium faster. With over 13 million FIL that miners have so far pledged as initial collateral, there are currently around 19.3 million FIL in circulation as per data from CoinGecko.

Filecoin is a peer-to-peer network built on the InterPlanetary File System (IPFS) distributed file system that enables users to use Filecoin tokens (FIL) to store and share data. Protocol Labs, an open-source research and development firm, developed both of these projects.

Altcoin News, Blockchain News, Cryptocurrency news, News

James Lovett is a talented crypto enthusiast who finds pleasure in sharing more knowledge on fintech, cryptocurrency as well as blockchain and frontier technologies. He likes to keep himself furnished and updated with the latest innovation in the crypto industry, blockchain technology, Internet of Things (IoT) and other technologies. As a result, he tries to furnish ardent crypto supporters with the latest news on blockchain and distributed-ledger technologies. Indeed, Blockchain and Cryptocurrency is changing the world as we know “one block at a time”. As a hobby, he also trades in small amounts of cryptos every now and then.
An author with experience writing for tech, digital, and cryptocurrency blogs!



Source link

Continue Reading
Advertisement

Trending