Cometh and Kleros Announce New Ecosystem Partnership, Offer Limited-Edition NFT Collector Spaceships

Cometh, a DeFi-powered game with yield generating NFTs, has announced a partnership with Kleros, a decentralized arbitration platform – the ecosystem growth project that launched on OpenSea.

To celebrate the partnership, Kleros-themed spaceships went on sale on Opensea and on Cometh farms, with all the benefits to be redistributed in-game. One Mythic Kleros spaceship was just sold after a 24-hour auction, and the full spaceship collection became available on Opensea on Friday, April 23 at 5 pm UTC.

Users must create a MUST/PNK pool on ComethSwap (L2 Dex) and distribute the liquidity pool tokens in-game, and the liquidity tokens they receive will be sent on an octahedron-shaped asteroid for the players to mine rewards with their spaceships. All liquidity rewards go back to the players (spaceship holders) and liquidity providers.

In addition to these LP and staking rewards – and the potential to win or buy limited-edition spaceships – players can win an Arbitrator spaceship by participating in the contest posted here.

Cometh is a groundbreaking and evolving strategy game set in a sustainable space-inspired metaverse. Using DeFi services that run on Ethereum, players can mine asteroids to get tokens as rewards. By playing, you can collect, trade, and earn tokens from ERC-20 protocols, and also NFTs that are unique to the Cometh Metaverse. As you get more spaceships and explore the galaxy, you can earn tokens and stake them to redeem exclusive spaceships.

Affectionately known as “the Justice Protocol,” Kleros is a decentralized arbitration service for disputes that arise in the new crypto-powered and blockchain-backed decentralized economy of the future.

In Kleros, a global community of users serves as jurors, and game theory on the blockchain brings fast, affordable, and fair decisions to all. It works in a wide variety of industries and businesses and can solve digital disputes that cannot be solved by courts or traditional arbitration systems.

Kleros has applications in small claims, insurance, e-commerce, finance, freelancing, token listing, content moderation, intellectual property, and more. All you have to do is send your cases, and Kleros sends back a decision.

This content is sponsored and should be regarded as promotional material. Opinions and statements expressed herein are those of the author and do not reflect the opinions of The Daily Hodl. The Daily Hodl is not a subsidiary of or owned by any ICOs, blockchain startups or companies that advertise on our platform. Investors should do their due diligence before making any high-risk investments in any ICOs, blockchain startups or cryptocurrencies. Please be advised that your investments are at your own risk, and any losses you may incur are your responsibility.

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Capital Gains Tax Prompts Crypto Investor Backlash

Key Takeaways

  • Reports suggest that the Biden administration could double the capital gains tax from 20% to 39.6% for large investors.
  • The news caused stock markets and crypto markets to lose value.
  • Though the tax will not affect most crypto investors, it could be detrimental to the crypto industry in a broader sense.
  • The news has also attracted discussion on social media, as users criticize the plan or argue that fears are overblown.

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Reports suggest that the Biden administration is preparing to propose one of the largest capital gains taxes in U.S. history, one that will nearly double the tax rate for wealthy investors.

Taxes Target Wealthy Investors

News of the possible tax increase was initially disclosed to Bloomberg by White House staffers on Apr. 22.

If the proposal is enacted, it will raise the capital gains tax from 20% to 39.6% for investors that earn more than $1 million. This would raise $370 billion for government spending.

News of the possible increase has impacted the stock market and the crypto market alike. According to Reuters, Bitcoin fell below $48,000 within hours of the news, a loss of approximately 4%. Ethereum saw losses of about 10%. Meanwhile, the S&P 500, the Dow Jones, and Nasdaq all saw losses of approximately 0.9%.

The news has also seen large amounts of discussion on social media communities related to cryptocurrency. The topic became a top-ranking thread on Reddit’s /r/cryptocurrency subreddit, gaining more than 1,250 comments. Users variously expressed concerns over the plan or suggested that fears are overblown.

Will the Proposal Pass?

As of Friday, Apr. 23, the proposal has not been officially announced. Biden will discuss the tax increase formally when he presents the United States’ fiscal policy next Wednesday.

Some experts believe that the tax plan will not actually be carried out. Phil Orlando of Federated Hermes, Inc. told BNN Bloomberg that, based on the fact that the proposal is the largest tax increase in history, the chances that it will be successful are “slim to none.” Instead, he expects a more modest tax increase to 25%.

Elsewhere, Thomas Hayes of Great Hill Capital LLC has suggested that the stock market would have seen much larger losses if there was a significant chance of the proposal passing.

Will the Tax Plan Affect Crypto Users?

Even if the tax increase is approved, most investors will be unaffected. The plan is aimed at the top 0.3% of investors, and the distribution of crypto wealth is similar to general wealth.

In 2020, Bitcoin prices rose by about 300% from a starting price of approximately $8000. To earn more than $1 million on one’s Bitcoin investment that year, one would have had to have held about 32 BTC—an amount that less than 0.4% of Bitcoin addresses hold.

On the other hand, not all crypto investments work in the same way. DeFi services such as yield farming platforms and liquidity pools are designed to provide extremely high returns to investors who put moderate investments to work for the underlying protocol. Likewise, new ICOs may see sudden growth over a short period of time.

That means that some crypto projects may have a higher proportion of users that earn more than $1 million. However, there is a lack of wealth distribution data on those projects, meaning that affected investors may still be in the minority.

Disclaimer: At the time of writing this author held less than $75 of Bitcoin, Ethereum, and altcoins. This article is not tax advice.

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Bitcoin funding rate flips negative after $48K retest, was it a bear trap?

As Bitcoin (BTC) lost the $52,000 support on April 22, the futures contracts funding rate entered negative terrain. This uncommon situation causes the shorts, investors betting on price downside, to pay fees every 8 hours.

While the rate itself is mildly damaging, this situation creates incentives for arbitrage desks and market makers to buy perpetual contracts (inverse swaps) while simultaneously selling the future monthly contracts. The cheaper it is for long-term leverage, the higher the incentives for bulls to open positions, creating a perfect “bear trap.”

BTC-margined perpetual futures 8-hour funding rate. Source: Bybt

The above chart shows how unusual a negative funding rate is, and typically it doesn’t last for long. As the recent April 18 data shows, this indicator should not be used to predict market bottoms, at least not in isolation.

Monthly futures contracts are better suited for longer-term strategies

Futures contracts tend to trade at a premium, at least they do in neutral-to-bullish markets, and this happens for every asset, including commodities, equities, indexes and currencies.

However, cryptocurrencies have recently experienced a 60% annualized premium (basis), which is considered highly optimistic.

Unlike the perpetual contract (inverse swap), the monthly futures do not have a funding rate. As a consequence, their price will vastly differ from regular spot exchanges. These fixed-calendar contracts eliminate the fluctuation seen in funding rates and make it the best instrument for longer-term strategies.

Bitcoin 1-month OKEx futures annualized premium (basis). Source: Skew

As shown in the chart above, notice how the 1-month futures premium (basis) entered dangerously overleveraged levels, which exhausts the possibilities for bullish strategies.

Even those that previously bought futures in expectation of a further rally above the $64,900 all-time high had incentives to cut their positions.

The lower cost for bullish strategies could set bear traps

While a 30% or higher cost to open long positions is prohibitive for most bullish strategies, as the basis rate slips below 18%, it usually becomes cheaper to long futures than buying call options. This $11 billion derivatives market is traditionally very costly for bulls, mainly due to BTC’s characteristic high volatility.

Bitcoin call option contracts for June 25. Source: Deribit

For example, buying upside protection using a $60,000 call option for June 25 currently costs $4,362. This means the price needs to rise to $64,362 for its buyer to profit, therefore a 19.7% increase from $50,423 in two months.

While the call option contract gives one infinite leverage over a small upfront position, it makes less sense for bulls than the 3% June futures premium. A 5x leveraged long position will return 120% gains if BTC happens to reach the same $64,362. Meanwhile, the $60,000 call option buyer would require the Bitcoin price to rise to $77,750 for the same profit.

Therefore, while investors have no reason to celebrate the 27% correction occurring over the past nine days, investors might interpret the move as a “glass half full.”

The lower the costs for bullish strategies, the higher the incentives for bulls to set up a perfect “bear trap,” fueling Bitcoin to a more comfortable $55,000 support.

he views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.