Schlagwort: blockchain markets

NFTs borrowing and lending protocol Bend DAO is staring at a credit crisis after it was revealed on Monday that the protocol only had about 15 wrapped Ether (wETH) worth about $23,715 for paying back its lenders.  The protocol has so far lent out 15,000 ETH.

To avert the crisis, the project’s developers have proposed new emergency measures aimed at stabilizing Bend DAO’s ecosystem.

The proposed emergency measures 

To start with the development team suggested constraining the liquidation threshold for collateral at 70% of the loan value; cutting it down from 85%.

Secondly, the auction period for NFTs would be reduced from 48 hours to four hours and the requirement for the minimum bid price of NFTs to be pegged to 95% of the floor price on OpenSea would be scrapped.

Thirdly, interest rates on loans shall rest from the current 100% to 20%.

Lastly, the Bend DAO treasury shall be empowered to cover all the bad debts using revenue.

What led to the current Bend DAO situation?

Generally, the declining floor prices of NFTs in the market even among popular NFT collections is placing many NFTs in danger of being liquidated. The interest rates on “debt-secured” NFTs are skyrocketing and it has almost hit 100% making some users prefer letting go of their NFTs rather than paying back the debt and this is resulting in a lot of bad loans. Also, the NFT markets are not as liquid as coin markets meaning there may not be a single bid at the time of an NFT liquidation; something that further complicates the scenario.

The proposal by Bend DAO is currently being voted for by the community. The voting process is expected to last 24 hours although it has already passed the required 47 million veBend with 99.23% of voters in favour of the proposal.

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Telegram founder Pavel Durov is proposing the creation of an NFT marketplace that can use “NFT-like smart contracts” to facilitate auctioning of popular usernames.

Durov’s proposal comes after the success of domain name auctions on The Open Network (TON), which is a layer-1 blockchain designed by the Telegram team. The Open Network launched the TON DNS Service in mid-July allowing users to assign human-readable names to crypto wallets, websites, and smart contracts.

Durov through a message shared on his personal Telegram group, Durov’s Channel, on Tuesday said that he was impressed by the success of the domain auctions on TON. He said that Telegram could tap into the same technology and launch a new marketplace that would be used to buy and sell “catchy t.me addresses like @storm or @royal, and all four-letter user names.”

Durov said:

“Imagine how successful Telegram with its 700 million users could be it we put reserved @ usernames, group and channel links for auction… This would create a new platform where username holders could transfer them to interested parties in protected deals – with ownership secured on the blockchain via NFT-like smart contracts.”

Auctions on TON DNS Service

The first auction on TON DNS was conducted on July 30 and just like the Ethereum Name Service (ENS) “.eth” domains, the “.ton” domains allow users to access decentralized applications in a simpler way without needing to write the long crypto wallet addresses.

The Open Network uses FunC programming language for the TON Virtual Machine and to launch specific smart contracts on the blockchain. If Telegram was to launch NFTs, it would most likely use the same standard.

Durov said:

“Our team can write bullet-proof smart contracts for TON (since it was us who invented its smart contract language), so we are inclined to try out TON as the underlying blockchain for our future marketplace.” 

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According to a news post by the co-founder of Acala Network, Bette Chen, the Acala community has voted to burn 2.97 billion Acala USD (aUSD) stablecoins.

Acala is a scalable and Ethereum-compatible layer-1 smart contract platform built on Polkadot blockchain and it is the blockchain network that powers the aUSD stablecoin.

The aUSD stablecoin

aUSD is over-collateralized by several digital assets from the Kusama network and Polkadot ecosystem, with a deposit rate of 195% per every minted aUSD.

aUSD de-pegging

Last week, the price of aUSD de-pegged from its US dollar peg and dropped to below $0.01. The cause for the de-pegging was later found to be a sudden influx of the aUSD stablecoin supply caused by an erroneous minting.

3.022 billion aUSD stablecoins were erroneously minted after the iBTC/aUSD liquidity pool that went live on August 14 was misconfigured.

The misconfiguration has however since been rectified and the wallet addresses that benefited from the erroneously minted aUSD identified through on-chain tracing. Thirty-five accounts were found to have received 12.38 million aUSD.

More than 99% of the erroneously minted aUSD were then transferred to the Acala parachain. But some, approximately worth $9.69 million, had been swapped to DOT and moved to centralized crypto exchanges.

The aUSD is currently trading at about $0.84 which is still below its dollar parity; meaning the erroneous minting is still affecting the system’s equilibrium.

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• Anthony Scaramucci says Bitcoin needs to reach a billion wallets to start being regarded as an inflation hedge.
• He is however bullish on the crypto markets, predicting a recovery going into end of the year.
• Scaramucci also says the meme stock situation remains due to people holding a ton of cash from last year.

Skybridge Capital CEO Anthony Scaramucci says despite Bitcoin’s continued attractiveness as an asset class, it’s not at that level where it can be “regarded as an inflation hedge.”

Scaramucci aired the sentiments during an interview with CNBC’s ‘Squawk Box’ on Monday.

Bitcoin as an inflation hedge… not yet

On Bitcoin, Scaramucci thinks there’s still room for the pioneer crypto to grow into mainstream adoption before hitting that button of claiming inflation hedge status.

“Bitcoin is still not a mature enough asset to be regarded as a potential inflation hedge,” he told CNBC.

While his sentiments are likely to elicit sharp reaction from across the Bitcoin community, notably from the perspective of the pioneer crypto not being “mature enough”, Scaramucci’s explanation rings a bell or two in terms of global adoption.

He believes getting to that point where it is now regarded as a hedge, the BTC network needs to have grown to at least one billion wallets.

As for now, the benchmarket cryptocurrency “[doesn’t] have the wallet bandwidth,” he noted, adding that currently it is at that stage of “an early adopting technical asset.”

Crypto market and the meme stock craze

The Skybridge Capital founder also spoke about the overall crypto market, with the latest sell-off across major assets coinciding with the sharp moves in the meme stock sector. 

Notably, he mentioned the recent volatile price movement of Bed, Bath & Beyond – the retail store whose stock joined the meme bandwagon to mirror previous performances of GameStop and AMC Entertainment.

According to him, the kinds of trades seen with these stocks are likely to continue given the possibility of there still being a lot of excess liquidity across pockets of investors. He believes these people “made a ton of cash” during the bull market, and helped with the easy cash that characterised the economy then.

Elsewhere, he is bullish on the market’s recovery prospects towards the end of 2022 and early next year. Signals of these have been the bounces amid some good news, which could be the case over the next few months.

And he thinks its likely people with massive short positions could easily be caught up in a sharp rally and “get ripped off.”

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• Indian Web3 developers could be behind the next ‘Facebook or Google of Web3’, said Antler Global General Partner Nitin Sharma.
• He says despite the crypto winter and hostile government regulations (tax rules), India’s developer community is vibrant with over 20,000 in Web3.
• The next five or ten years could see a trillion-dollar Web3 company emerge out of India, he told Bloomberg.

India did not play a big role in the Web1 and Web2 space, Nitin Sharma, General Partner at Antler Global says. 

However, that is likely to change dramatically when it comes to the latest iteration of the internet – Web3 – he told Bloomberg Markets: Asia on Monday.

While he identifies the Indian government’s crypto industry tax rules as a hit on investors, he says blockchain-based technological developments and the infrastructure from within that country could in a big way, contribute to making “Web3 a reality.”

Crypto winter is the time to build

According to Sharma, who is also the Global Web3 Lead at the global venture capital firm, this is because growth within the Indian developer community continues to pick speed. This, he said, is despite the “mixed bag” the sector got from the government’s crypto tax regulation and the bear market crash that’s impacted investors.

But what does this mean for crypto entrepreneurs?

“This is the best time to build,” he told Bloomberg, referring to what developers and other Web3 entrepreneurs should do amid the crypto winter. “We saw this in the last few cycles, all the great value that was being created really the founders got started in downturns or crypto winters like these,” he added.

He sees Ethereum scaling solution Polygon (MATIC) as “the big success story from India” when it comes to entrepreneurship. So many projects are being built on top of this layer 2 blockchain, many of which are likely to play a major role in advancing Web3.

“Our belief is that India remains a place, given the breadth of the base of technical talent and entrepreneurship that the future of this new Internet, – right beyond the asset class itself, beyond crypto assets – the technology, the infrastructure that has to be built to make Web3 a reality, could in large part be built out of India,” he explained.

Next Facebook or Google of Web 3

Although Sharma doesn’t think India will provide any positive news on the regulatory front, not in the next 12 to 18 months at least, he is bullish on the technology front. India, he notes, did not have such a footprint in Web1 and Web2 as did Silicon Valley and so had no such success stories as Facebook (now Meta) or Google.

But he says the next five to ten years could be totally different, suggesting that the world could see the emergence of a trillion-dollar Web3 company from India. As for specific verticals, obvious choices are the “application or services side of things.”

India has about 20,000 developers currently engaged in efforts in the sector, accounting for a third of global numbers.

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