Another Ethereum ETF Is Now Before the SEC

Kryptoin, an investment firm focused on digital assets, has filed an application with the Securities and Exchange Commission (SEC) for an Ethereum ETF. If approved, the Kryptoin Ethereum ETF Trust would be traded on the Cboe BZX exchange.

ETFs, short for exchange-traded funds, are investment vehicles that allow people to trade a group of securities just like they would buy or sell stocks. An Ethereum ETF, then, would be linked to the price of ETH, allowing investors to get exposure to the asset without having to worry about custody. The issuer takes a cut of the transaction fees.

Multiple companies—including VanEck, Fidelity, and Anthony Scaramucci’s SkyBridge Capital—have petitioned the SEC to begin allowing ETFs linked to the price of Bitcoin or Ether, but the agency has thus far demurred.

For now, the closest thing to an ETF in the U.S. is an investment trust, such as Grayscale’s GBTC Trust. But these differ in several key ways. Importantly, Grayscale is a closed-end fund; there’s only a certain amount of shares available and investors must hold them for months, leading to major differences between the price of the crypto asset and that of the crypto ETF share. 

Grayscale has been trading at a discount of 10%, meaning that you can buy it cheaper than you can buy actual Bitcoin. ETFs would trade at much closer to the price of the asset.

Canada approved its first Bitcoin and Ethereum ETFs earlier this year. Pro-crypto financial institutions are hoping the U.S. follows suit.


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Coinbase Criticized for USDC’s Unclear Dollar Backing

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Coinbase and Circle have been criticized over a change of policy concerning their dollar-pegged stablecoin, USDC.

Coinbase Changed Statements On USDC

Bloomberg criticized Coinbase this week by drawing attention to past and present statements on the exchange’s website.

Coinbase’s website initially stated that “each USDC is backed by one US dollar, which is held in a bank account.”

Now, Coinbase’s website has expanded that statement to include cash equivalents. It says that each USDC token is backed by “one dollar or asset with equivalent fair value” and that those assets are held by U.S. financial institutions.

Coinbase’s USDC page, via Bloomberg

The change is seemingly related to a July disclosure in which Coinbase’s partner, Circle, disclosed a breakdown of its USDC reserves. That document suggested that 61% of USDC’s backing was in cash and cash equivalents, with the remainder in certificates of deposits, U.S. treasuries, commercial paper, and various bonds.

At that time, Coinbase replied to similar criticisms from Paxos CCO Dan Burstein. On its blog, Coinbase stated that USDC is backed by “a list of permissible investments in which the USD backing USDC can be invested,” as allowed by state regulators.

Cash Equivalents Are Common

Though Coinbase has clearly changed its website, Coinbase and Circle never promised an unchanging method of backing. Furthermore, most major stablecoins use similar methods of backing.

Tether has faced virtually identical criticism. In March 2019 it revoked the claim that its USDT stablecoin was backed by U.S. dollars and began to claim USDT was backed by other investments. Tether’s latest report suggests that USDT is 10% backed by cash (and significantly more cash equivalents, depending on definition).

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Meanwhile, Paxos claims that two stablecoins that it is involved with, PAX and Binance USD, are 96% backed by cash and cash equivalents.

The flexibility of the term “cash equivalent” means that it is hard to say which stablecoin is most reliable. However, it is clear that none of the leading stablecoins are backed by U.S. dollars unconditionally.

Disclaimer: At the time of writing this author held less than $75 of Bitcoin, Ethereum, and altcoins and did not hold stablecoins.

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These Five Altcoins Have Solid Potential for Q3, According to Coin Bureau

The host of the popular crypto outlet Coin Bureau is tracking five altcoins he thinks have the most potential for the third quarter of 2021.

Addressing his 1.23 million subscribers in a new video, the pseudonymous analyst known as Guy starts his list with Ethereum (ETH).



The analyst lists multiple catalysts that could launch Ethereum to higher levels, including the possibility of an Ethereum-based exchange-traded fund (ETF), institutional demand, and the recent EIP-1559 update which could turn ETH into a deflationary asset.

“I think you can easily make the case for a $6,000 to $7,000 ETH by year’s end.” 

Coin number two on Guy’s list is Cardano (ADA).

“Even though Cardano’s upside potential is also limited due to its large market cap, it has much more room to grow than Ethereum, and this is for many reasons. For starters, ADA has maintained its bullish momentum against all odds. It has held up strong despite the recent downturn and is still in a very visible uptrend. This is because Cardano’s best days are ahead of it.”

Guy also mentions Project Catalyst, a series of community-funded projects in the Cardano ecosystem which he says could present opportunities for 100x returns.

“This potential for profit could bring in record amounts of retail investors and users, and I could see that taking ADA up to the $4 to $5 range.”

The analyst’s third pick is Solana (SOL). Guy says Solana is “seriously significant” because of its ability to process as many transactions as legacy payment processors like Visa or Mastercard. He also says that like Cardano, SOL has held up considerably well during the downturn in crypto markets.



Guy’s fourth altcoin pick for Q3 is layer-2 scaling solution Polygon (MATIC). Based on the expectation of a wave of new users coming to MATIC, the analyst says a 264% rally is easily in the cards for the altcoin.

“The mass adoption of Polygon could easily push its price to new all-time highs by the end of 2021. $5 is a realistic estimate in my opinion.”

The last altcoin on Guy’s list is LUNA, the reserve currency on proof-of-stake blockchain Terra. The analyst says that while Terra hasn’t been “battle-tested” as of yet, a 506% price increase by the end of the year is still possible.

“Now call me crazy but I could easily see LUNA hit $100 by the end of the year if its adoption and innovation continues.”

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ReSource Finance raises $1.7 million to offer undercollateralized credit to Web 3 businesses

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Decentralized credit protocol, ReSource Finance completed a $1.7 million funding round led by Future Perfect Ventures, NGC Ventures, and ExNetwork to enhance decentralized credit access to Web 3 businesses. Other investors in the round include Davoa Capital, BlockRock Capital, Moonwhale Ventures, Follow the Seed, Floem Capital, Flori Ventures (a Celo-focused ecosystem fund), and Tokenomik.

ReSource Scales Up

The financing will be used to boost customer acquisition on the ReSource Finance dApp and better its reputation-based decentralized lines of credit to small-scale businesses. In a statement, the firm reiterates the need to provide credit to these “authentic economy builders” on a peer-to-peer platform without an intermediary.

Jalak Jobanputra of Future Perfect Ventures, the lead investor in ReSource, said the latest funding aims to complete the common goals shared with ReSource. Future Perfect Ventures launched in 2014 with the goal of partnering with entrepreneurs, providing business consultation, and building new business models in an effort to “create a more participatory, equitable and sustainable economy.”

ReSource is expected to use the funding to provide a platform for much-needed credit to startups and small businesses locked out of the traditional credit facilities.

“The ReSource team, with their unique backgrounds and skill sets, epitomizes this mission at a time when it is more important than ever to support individuals and local economies that we believe will lead the global recovery,” Jobanputra said.

ReSource is built on the Celo Network and leverages its fast and low fee platform allowing any business to easily access loans from their peers. The platform automatically creates a novel reputation system to rate the creditors in order to select the best businesses to extend lines of credit. ReSource uses diverse data oracles to create creditworthiness scores by providing data on a number of factors including FICO credit scores, bank statements, accounting software APIs, and marketplace reviews.

“ReSource is redefining the DeFi mutual credit economy. Aligned with Celo’s mission of creating the conditions of prosperity for all, ReSource is leading the way in uncollateralized credit with crypto for small businesses,” said Xochitl Cazador, Ecosystem, Celo Foundation

In May, ReSource launched its minimum viable product, a business-to-business (B2B) interest-free credit line payable in its native stablecoin, ReSource Dollars (rUSD), and payment network in Asheville, North Carolina. It is tailored for non-crypto natives, who can use their non-custodial wallets to receive, pay and request loans without understanding Web3.

In only two months, ReSource has extended over $380,000 in interest-free B2B credit lines in rUSD and recorded close to $40,000 in transaction volume. Small businesses in NC have benefited greatly from the decentralized service with over 250 companies using the product ranging from organic food delivery, water, co-working spaces, professional services, and other industries.

Simply, users create mutual credit facilities between their peer businesses without the need for an intermediary or external pools of capital from lenders. Instead, the freelancers and small businesses take credit lines and agree to pay back by selling their goods and services. The system then automatically updates the credit lines based on the transaction history, reputation, and option collateral.

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The investment round also welcomed top angel investors in crypto including Eran Haggiag, Founder of ClearX, Eyal Hertzog, co-founder of Bancor Network, Jeanne Lim, former CEO of Hanson Robotics, Noah Gale, Simon Schwerin, Winslow Strong, Alan Laubsch, Stefano Bernardi, Yoon Kim, Anthony Yoon, Joeri van Geele, Simon Schwerin, Jake Vartanian, John Lee, Felix Machart, Jascha Samadi, Alexander Friedrichs, Kjell Fischer, Sebastian Blum, and Justin Wiley.

The continued development in decentralized finance (DeFi) is clear and ReSource aims to compete with other DeFi lending platforms in the market. Maria Alegre, Co-Founder and Managing Partner of Flori Ventures, a Celo-focused pre-seed fund that believes ReSource holds an advantage over its competitors “because of its potential for financial inclusion.”

“ReSource has built a product for real-world businesses to access the benefits of DeFi,” Alegre said. “Their novel stablecoin design enables these businesses to start spending and earning crypto today based upon their reputation rather than their knowledge or ownership of crypto.”

ReSource grants businesses access to interest free, uncollateralized credit they can use to buy from each other on the ReSource Marketplace.Crypto startups cover their SaaS & Web 3 costs across the spectrum from blockchain node infrastructure hosting, crypto accounting & API calls.

This news was brought to you by Phemex, our preferred Derivatives Partner.


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Poly Network hacker returns nearly all funds, refuses $500K white hat bounty

The hacker behind a $610 million attack on the cross-chain decentralized finance protocol Poly Network has returned almost all of the stolen funds amid the project saying their actions constituted “white hat behavior.”

According to a Thursday update on the attack from Poly Network, all of the $610 million in funds taken in an exploit which used “a vulnerability between contract calls” have now been transferred to a multisig wallet controlled by the project and the hacker. The only remaining tokens are the roughly $33 million in Tether (USDT) frozen immediately following news of the attack.

The hacker had been communicating with the Poly Network team and others through embedded messages in Ethereum transactions. They seemed to have not had a plan to transfer the funds after successfully stealing them, and claimed to do the hack “for fun” because “cross-chain hacking is hot.”

Related: DAO Maker crowdfunding platform loses $7M in latest DeFi exploit

However, after speaking with the project and users, the hacker returned $258 million of the funds on Aug. 11. Poly Network said it determined that the attack constituted “white hat behavior” and offered the hacker, whom it dubbed “Mr. White Hat,” a $500,000 bounty:

“We assure you that you will not be accountable for this incident. We hope that you can return all the tokens as soon as possible […] We will send you the 500k bounty when the remainings are returned except the frozen USDT.”

“The poly did offered a bounty, but I have never responded to them. Instead, I will send all of their money back,” said the hacker.

With the remainder of the funds with the exception of the frozen USDT now returned, the biggest hack in decentralized finance, or DeFi, seems to be coming to an end. Though the hacker’s identity has yet to be made public, Chinese cybersecurity firm SlowMist posted an update shortly after news of the hack broke, saying its analysts had identified the attacker’s email address, IP address, and device fingerprint.