Kategorie: Crypto News

If “pandemic” was the buzzword of 2020 (and, you know, 2021), then “sanctions” feels like the 2022 equivalent, as Europe careens towards an increasingly tragic war. With privacy, transparency and liberty such key issues in crypto, the industry has found itself right at the centre of a contentious tug-of-war. Believers vouch for the Russian citizens who can turn to crypto to escape a plummeting ruble, as well as the millions of dollars flowing into the Ukrainian donation addresses following appeals on Twitter from the Vice President.

Detractors, meanwhile, argue that crypto could allow nefarious states and agencies to circumvent restrictions. What would happen if Russia’s $630 billion of (mostly frozen) foreign assets were in crypto, hence immune to being frozen and free to be used to support the war effort?

MetaMask Restrictions

This week, certain users of MetaMask, the fundamental gateway to the Ethereum network, found they had their access privileges revoked. Users from Venezuela, Iran and Lebanon appear to be among those affected, with the bulk seeming to be from the former.

Although communication has been vague, the perpetrator seems to be the API for Infura, the Consensys-owned node infrastructure network which feeds into MetaMask. Both MetaMask and Infura made an extremely brief joint statement which didn’t clear much up, but did confirm the restrictions were very much intended.

“MetaMask and Infura are unavailable in certain jurisdictions due to legal compliance. When you attempt to use MetaMask in one of those regions, you will receive (an) error message” the joint statement read.

Decentralisation

It’s a fascinating issue, and one which has incensed a lot of people. The centralised vs decentralised debate is so close to crypto’s core, it needs no introduction, but these last few weeks have seen the face-off become oh-so-relevant – triggered by Canada freezing protesters accounts. The MetaMask episode is a reminder of just how centralised a lot of the infrastructure around crypto remains.

To get a further view on this, we caught up with the Ankr team, a decentralised blockchain infrastructure provider. With the ANKR token now north of $550 million market cap, TVL at $136 million and a passionate decentralised ethos, they present as an interesting interview regarding the MetaMask & Infura incident, and discuss the potential benefits that decentralisation could offer.

Interview

CoinJournal: How important do you think it is to have decentralized web3 infrastructure?

Ankr: Nodes are critical financial infrastructure. For Web3 to become a reality, significantly more effort and focus needs to be put toward building and leveraging truly decentralized node infrastructure. Although centralized node infrastructure providers can facilitate institutional adoption of Web3, they fail to align with Web3 principles by not incentivizing community-run nodes, falling under VC pressure to generate quick profits, and relying on centralized cloud providers prone to frequent outages and geo-specific latency and regulatory issues. This is a major issue for the Web3 economy, leaving the ecosystem open to attack and at the mercy of a few powerful players.

CJ: What is your opinion regarding the Infura geo-restrictions?

A: As a centralized entity, owned by Consensys – which itself is funded by companies like JP Morgan – infrastructure providers like Infura are subject to regulatory concerns and sanctions. This over-reliance on centralized service providers goes against everything that Web3 stands for and is meant to be – and represents a central point of failure that shouldn’t exist in the first place.

CJ: How important an issue is it for the cryptocurrency community – do you think Metamask may lose users as a result (to alternatives such as Alchemy?). Will there be any knock-on effects for Ankr?

A: Decentralization is an extremely important issue for the cryptocurrency community internationally. This is especially true for people in unstable countries and regulatory zones, who can be cut off from essential financial and other services as a result of sanctions or other decisions made by centralized authorities.

Metamask is not directly at fault here. The real issue is that Metamask’s default RPC provider is Infura – a centralized infrastructure provider that must comply with regulations and sanctions. Metamask would benefit from instead relying on a decentralized node infrastructure provider, like Ankr, which aims to function as a DAO-governed protocol.

CJ: Do you think we will begin to see more and more of such restrictions in crypto, much like censorship has become a bigger issue in Big Tech (Twitter banning Trump, Facebook removing misinformation, Spotify & Joe Rogan etc)?

A: These types of issues will remain relevant until decentralized infrastructure is adopted by all players in the crypto community. Instead of relying on centralized providers to support Web3, we should be leveraging Web3-native protocols with strong decentralization and properly-aligned community-first incentive structures. By supporting Web3 native protocols at the infrastructure level, the impact of restrictions will be lessened.

The post Ankr interview – what the team think of MetaMask & Infura restrictions appeared first on Coin Journal.

Cryptocurrency is a dynamic industry changing at the speed of light, with new layers, projects and aims cropping up every day. Within crypto, DeFi is one of the most intriguing sectors in the space.

With the term itself – “DeFi”- coined only three years ago, it is very much in its infantile stage; it only broke into the crypto “mainstream” in summer 2020. But with change at this speed, friction is inevitable too. We saw that over the weekend when Andre Cronje, known by some as the Godfather of DeFi, downed tools and quit the space at large.

Resumé

Cronje is an impressive operator, his talents apparent by the disappointed reaction of crypto enthusiasts. His longtime partner-in-crime Anton Nell is also leaving the crypto space. Between the duo, they will be leaving around 25 DApps and services that they have been working on.

Perhaps the most prominent of these are Fantom and Yearn Finance, which plunged 15% and 13% respectively on the news. There were other coins which wobbled more (Solidly, which only launched last week, shed nearly two thirds of its value), showing the respect and importance the community placed on Cronje and his colleague.

Why Leave?

There are two possible reasons here. The first, and the most is likely, is that Cronje is a human being. And the thing about humans is that we are all different. Cronje is by all accounts an introvert, an incredibly talented coder who likes to build things. Of course, crypto operates on the Internet, and people on the Internet can be … not so friendly (to put it politely). The anonymous nature of a lot of Telegram, Twitter and Discord accounts means there is free reign for people to get aggressive, and when money is on the line that attitude is unfortunately exacerbated. One of crypto’s black marks is that it is so tribal and discussions can often get heated. Cronje was, by all accounts, simply fed up at being a scapegoat and a target of disgruntled investors.

It’s by far the most likely reason that Cronje defected. Indeed, he has quite before – in October 2020 he told CoinDesk, “I’m not building anything anymore. I do it because I’m passionate, but if people are going to use my test environments, then lose money, and then hold me liable, it means there is 0 upside and only risk for me”.

Heavy is the head that wears that crown.

Alternate Theories

Of course, there could be other reasons, but they amount to nothing but speculation. There is a chance that Cronje fears regulation or legal constraints, as the DeFi space becomes more mature and regulatory bodies continue to keep a closer eye on crypto. Theories abound that he will continue to operate in an anonymous capacity. He certainly loves to build things, and he has a gift. People like this generally can’t simply “retire” and do nothing, but then again – we are all different. Who am I to speculate what is going on in his mind? It could be a million different things.  Maybe he will return, maybe he won’t, but for now I’m going to take him at his word and assume he has left the space.

Consequences?

I don’t think this is the apocalypse that a lot of knee-jerk reactions propose it to be. Let’s take Yearn Finance for example after the 13% fall. Cronje has not worked on Yearn for over a year, while there are 50 full-time employees and 140 part time contributors still very much on board. At a market cap of $700 million at time of writing, it’s a big project. The red candle this reads like an overreaction to me. Let us not forget that Satoshi left Bitcoin behind, and that did just fine. Ditto for Fantom, which has a market cap of $3.6 billion currently.

After all, the space is called decentralised finance, meaning we should not be dependent on any one person or agency. Of course, that’s well and good in theory, but faces behind the applications which investors are trusting with their money do help provide a degree of confidence. But I don’t think this will be a big issue for the larger projects of Cronje’s. Sure, the smaller coins (such as Solidly above) will have a tougher time recovering, but in terms of the overall impact on the DeFi space, it should not be a hammer blow.

Where Now For DeFi?

Following the explosive growth of “DeFi Summer”, growth in the space has slowed with many investors growing angsty. Most of these projects have not yet gone through a prolonged bear market, with DappRadar reporting earlier this year that should a bear market last at least a year, 80% of DeFi apps would cease to exist.

“As far as crypto winter, DeFi DApps have never gone through it”, the report states.  “They have experienced crashes, but this feels like a prolonged one. Probably 20% of the apps that hold 80% of the industry value will survive. And we could see protocols that are not widely used fade away.”

TVL in DeFi currently sits at $195 billion, down 24% from the highs of $255 billion at the start of December.

TVL in the DeFi space over the last few years, via DefiLlama

Solving the very real wider issues in the space, rather than worrying about one developer, should be the priority. The real question we need to ask following Cronje’s “resignation”, is not what that means for certain DeFi apps, but rather does it signal something more problematic about the wider DeFi space in general. I tend to think it will be just fine.

 

The post Andre Cronje quits DeFi, but life will go on appeared first on Coin Journal.