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October saw the total value locked in all DeFi protocols close below the initial month value for the first time. Square Crypto sponsors a bitcoin wallet designer. A new civil lawsuit claims that BitMEX executives were plundering profits.
At stake
DeFi contraction
In the last week of October, the DeFi protocol tokens were bleeding red.
MakerDAO, one of the largest and most successful decentralized lenders, started the week with $ 2.1 billion blocked. By Friday, that was down to $ 1.96 billion, according to DeFi Pulse. Similarly, Compound, Aave and Curve drop a few million from their valuations.
In total, DeFi lost $ 1.5 billion in the last five days of the month, according to DeFi Pulse. With these losses, October marked the first time since the industry’s bull market began that the amount of cryptocurrency “stuck” in DeFi contracted over a month.
It wasn’t a big drop. DeFi’s cumulative valuation stood at $ 11.28 billion on October 1, and only retreated to $ 11 billion frozen on October 31. Industry publication Decrypt set the ecosystem’s monthly high at $ 12.4 billion.
It was this slight decline that may have triggered a sell-off of more than $ 2.5 billion seen this weekend, as the ecosystem retreated to the $ 8.5 billion lows last seen in early September.
With prices back above $ 11 billion (at press time), it doesn’t look like DeFi is dead.
Upper shelf
Digital transfers
Over 4 million transactions totaling more than 2 billion yuan ($ 299 million) were conducted using China’s digital yuan, said Yi Gang, governor of the People’s Bank of China. Speaking Monday at the Hong Kong Fintech Week conference, Yi said the COVID-19 crisis has also accelerated the need for contactless banking, creating challenges for central banks trying to balance consumer needs and security. That said, the central banker also downplayed the prospect of an upcoming launch, saying the digital yuan project is still in the early stages.
Square the cryptocurrency
Square Crypto, the cryptocurrency branch of the payments company, awarded a grant to a designer who builds easy-to-use bitcoin wallets. Announced via tweet on Friday, Maggie Valentine’s development work will answer the question, “How can we provide an intuitive experience for non-cryptographic users while preserving the safety of a user’s funds?” The award comes less than a month after Square said it bought 4,709 bitcoins for $ 50 million, which is 1% of the company’s assets.
Cayman consent
The Cayman Islands, an autonomous British Overseas Territory in the Caribbean, are building a regulatory framework for “virtual asset service providers” (VASPs). Announced Saturday, the Cayman Islands Ministry of Financial Services has entered the “Phase One” framework, a set of rules that define national anti-money laundering (AML) and terrorist financing regulations. VASPs who already work in the Caymans, or who intend to do so, will need to notify and register with the Cayman Islands Monetary Authority (CIMA) and comply with AML / CFT rules. “Phase Two”, which is expected to go into effect next June, will look at licensing requirements and “prudential oversight” for VASPs.
Voted down
A proposal to distribute UNI tokens to those who were left out of a previous airdrop was not adopted in the second vote on Uniswap governance. Although many votes were in favor, a quorum has not been established, reports Zack Steward of CoinDesk. Proposed by the decentralized finance portal (DeFi) Dharma, “Prop 2” would send 400 UNI tokens each to 12,619 addresses interacting with Uniswap via third-party apps, after a surprise airdrop on September 17, which sent free tokens to anyone who had used the platform directly. A threshold of 40 million UNI tokens voted was less than 2.5 million.
Corporate raiders?
According to a civil lawsuit, the top officials of HDR, the parent company of the cryptocurrency trading platform BitMEX, accused of facilitating unregistered trading and other violations, systematically looted $ 440,308,400 from HDR accounts. The lawsuit, filed on behalf of plaintiffs BMA LLC, Yaroslav Kolchin and Vitaly Dubinin, claims executives began diverting BitMEX profits after learning of possible allegations in 2019. The U.S. Commodity Futures Trading Commission prime (CFTC) and the Department of Justice both announced charges against BitMEX on October 1. An HDR spokesperson called the new civilian claims “spurious”.
Quick bites
Blockchain could make the dismantling of nuclear warheads safer, King’s College London says in a recent report. (CoinDesk)
Nigerians protesting police corruption and concerns over a possible internet shutdown are adopting decentralized VPNs, along with bitcoin. (CoinDesk)
After Coinbase’s announcement, the Paxful peer-to-peer digital asset market will launch a Visa debit card. (CoinDesk)
Mongolia’s oldest bank will offer services including cryptocurrency remittances, custody, deposits, asset management and loans (Modern Consensus)
eToro has unveiled a free insurance scheme that covers customers up to £ 1 million should the company ever become insolvent. But cryptocurrency holders are left in the cold. (CoinDesk)
European Central Bank President Christine Lagarde said the agency is seeking public comment on the digital euro, which implies that a broad retail offering is now on the table. (Poll)
Market information
Pop and drop
After bitcoin’s 28% rally in October, the market appears to have cooled. On Saturday, BTC hit a 33-month high of $ 14,093, but failed to stay above that level. Traded in the mid-$ 13K, this small pull validated short-term bull fatigue. “Unless the market can establish above $ 14,000, there is a risk that the rally will stall here in favor of a healthy retreat,” Joel Kruger, a currency strategist at LMAX Digital, told CoinDesk. At the low end, bitcoin may revisit the former hurdle turned support of $ 12,500.
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