Kryptoin, an investment firm focused on digital assets, hasfiled an applicationwith 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.
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).
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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The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.
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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).
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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.
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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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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,” Jobanputrasaid.
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.
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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The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.
You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.
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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.
The high-flying optimism generated earlier this week when Bitcoin and altcoin prices rose was tempered on Aug. 12 as BTC dropped below $43,000. This led some analysts to warn that the price action seen over the past week was nothing more than a dead cat bounce.
Data from Cointelegraph Markets Pro and TradingView shows that an early morning wave of selling pushed the price of Bitcoin (BTC) to a low of $43,752 and at the time of writing bulls are struggling to pull the price back to $45,000.
BTC/USDT 4-hour chart. Source:TradingView
Here’s what analysts are saying about Bitcoin’s current price action and what they expect for the short term.
$43,600 and $43,000 are key levels of support
According to market analyst and Cointelegraph contributor Michaël van de Poppe, Bitcoin’s fall from $45,000 to $43,500 was “quite normal” with higher time frame charts showing a bearish divergence, which implies that “we could have a further corrective move.”
Poppe identified $43,600 as “support level 1” and $43,000 as “support level 2” and noted that these are key areas to watch right now.
In the short term, Poppe indicated that Bitcoin price could potentially bounce back to $45,000 and then come back down to test this support level again, and if support gets reclaimed, it’s possible to “conclude that buyers are stepping back into the market.”
Poppe said:
“If those two support levels are lost, then we are likely looking at $42,000 next, and if that doesn’t hold then $41,000 after that. And that is for me the break where I want to start longing heavily as I don’t want to see it drop further down the line as the only level we have left after that is $38,000.”
Bulls are just taking breather before pushing higher
Thursday’s Bitcoin price pullback was also seen as a normal move by David Lifchitz, managing partner and chief investment officer at ExoAlpha. Lifchitz pointed to the “almost uninterrupted run-up of the last 2 plus weeks” as a sign that “bulls need to take a breather before continuing their push higher.”
According to him, the “$36,000 for BTC and $2,300 for Ether are obvious targets,” but he further stated that “no one knows is how much the pullback will be from where we are now.”
Lifchitz said:
“But maybe the dips could be bought before reaching these levels. Of course, this is in case there’s no other regulatory drama, otherwise, a revisit of the $30,000 level for BTC and $1,800 for Ether would not be ruled out.”
$45,200 has been a solid Bitcoin support level in the past
According to Rekt Capital, a pseudonymous Twitter analyst, the $45,200 price level has been a difficult level of resistance in the past.
Unfortunately, #BTC failed to hold ~$45200
That said, $BTC has failed to perform a clean retest of ~$45200 before (red circles)
Earlier this year, BTC would have to downside wick into the orange areas before moving higher
Hold orange and BTC will reverse#Crypto #Bitcoin pic.twitter.com/12NQaPysXF
— Rekt Capital (@rektcapital) August 12, 2021
In previous instances when BTC traded near these levels, the price retested and held support around $44,200 before staging another rally.
Based on this analysis, if BTC can hold near this level, then the price will reverse and head higher.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
Coinbase had said USDC was backed by dollars in a bank account.
Coinbase’s website now says 1 USDC is not necessarily backed by 1 US dollar.
Coinbase, the San Francisco-based cryptocurrency exchange that partnered on the USDC stablecoin alongside FinTech firm Circle, is no longer promising that USDC is fully backed by the dollar.
The exchange dropped the claim from its website because, as it turns out, Circle doesn’t have all its reserves in USD.
Stablecoins are digital currencies pegged to the price of another asset. Traders can use them to maximize trading flexibility and take advantage of sudden price movements on an exchange without waiting for cash transfers to be approved. They can also put their money to work by loaning it out and collecting interest on any number of platforms.
One way the price of USDC can be guaranteed is by holding in reserve $1 for each stablecoin issued. For the record, that’s just under $28 billion.
“Each USDC is backed by one US dollar, which is held in a bank account,” Coinbase wrote in an earlier version of its website. It has recently been changed to read: “Each USDC is backed by one dollar or asset with equivalent fair value, which is held in accounts with US regulated financial institutions.”
That edit jibes with a Circle financial disclosure in July showing that the company only held 60% of the total USDC figure in cash. About a quarter is in certificates of deposit and U.S. Treasury securities, while the remainder is in commercial paper and corporate bonds—financial instruments for owning someone else’s debt.
The reversal is similar to what happened with stablecoin competitor Tether. For years that company trumpeted its 1:1 dollar backing of USDT coins, until it changed its tune—first by changing web copy, and then by showing statements demonstrating a significant portion of reserves were held in other assets. Its most recent “assurance report” showsnearly half of its holdingsare commercial paper.
Federal regulators have been scrutinizing stablecoins of late, especially Tether. Federal Reserve Chairman Jerome Powelltold Congress in Julythat commercial paper is a good investment—until it’s not. During a financial crisis, he said, “the market just disappears. And that’s when people will want their money.” Shortly thereafter, Treasury SecretaryJanet Yellen convened federal agency heads, including Powell, to fasttrack stablecoin regulations.
Circle and Coinbase, meanwhile, are trying to play nice with regulators. In April, Coinbase became the first cryptocurrency exchange to be a publicly traded company in the U.S., which means its financial and marketing disclosures are under closer watch. For its part, Circle this week said it would become a “national digital currency bank.” AsDecryptreported at the time, it’s not clear whether its plan will require it to change the ratios of its reserves.
Reddit is now valued at $10 billion thanks to a new $410 million Series F funding round, which could balloon further to $700 million.
The discussion board platform is working on expanding its Ethereum-based crypto token rewards program for community members.
Reddit made a big fundraising play earlier this year, announcing a $250 million investment round in February, but the popular online discussion community isn’t done pulling in cash. Today, the firm confirmed that it has raised $410 million in a Series F round led by Fidelity Investments.
And that’s not all: Reddit tellsThe New York Timesthat it expects some of its existing investors to come in on the round, as well, with an eye to finish out around $700 million in total. This new round of investment values the company at $10 billion, which is up from $6 billion back in February. Reddit had accepted $800 million in investment prior to this latest round.
“Fidelity made us an offer that we couldn’t refuse,” CEO and co-founder Steve Huffman toldThe New York Times. Huffman added that Reddit still plans to go public at some point, but that the company doesn’t have a “firm timeline” as of yet. “All good companies should go public when they can,” he said. The site is eyeing international expansion as part of the extended fundraising effort, as its audience is largely US-based as of now.
Reddit primarily makes its money through online advertising, and business is booming: the site made more than $100 million in revenue last quarter, a 192% year-over-year increase and its largest quarter to date. To help keep its rabid audience of 52 million daily active users (as of December) happily chatting and sharing memes, Reddit is also working on expanding its Community Points crypto token rewards initiative.
Itlaunched in a testing phase last year, but is only available for a tiny fraction of the site’s discussion communities at present. Currently, Reddit offers Community Points in just two of its more than 100,000 subreddits: r/CryptoCurrency, where they’re known as Moons, and r/FortNiteBR, where they’re called Bricks.
In either case, Reddit users can be rewarded for providing quality content to the site, and then theEthereum-based tokens can be used to unlock additional features within the Reddit community—or swapped for other cryptocurrencies at an exchange. They’re worth real money, too. According to CoinGecko, each Moon istrading for just over $0.28as of this writing, which is slightly more than the price of a single Dogecoin (DOGE). The Bricks aren’t quite as valuable: they’recurrently tradingfor about $0.06 each.
Earlier this year,Decryptexplored how toconvert the Moons into real money, with the author turning his 17,500 Moons—gradually accumulated by using Reddit—into $2,000 based on the then-current exchange rate.
Reddit hopes to bring its crypto rewards to a much larger audience, however. Last year, the company launched a “Scaling Bake-Off” competition, in which developers could propose ways to expand the system while avoiding the expensive fees and network congestion that come with using Ethereum’s mainnet. Reddit alsopartnered with The Ethereum Foundationthis past January to work on open-source scaling solutions.
Last month, Reddit announced that itwill use Arbitrum, a layer-2 scaling solution that works atop Ethereum, to expand the Community Points program. Arbitrum’s solution, like many others built for Ethereum, takes a large number of transactions first conducted on a separate blockchain and then rolls them up into a single Ethereum block. That commits the data to Ethereum with massively reduced overall transaction fees.
“Today’s launch is a big step forward, but our work is far from done,” Reddit’s developerswrote last month. “Our goal is to cross the chasm to mainstream adoption by bringing millions of users to blockchain.”
No timeline has been announced for expanding Reddit’s Community Points program into other subreddits on the site.
Polkadot has quickly become one of the most popular and, by far, among the biggest cryptocurrency blockchains throughout the entire industry.
It appears that the hype surrounding Polkadot is only growing stronger, so we’ve taken the liberty to compile a comprehensive walk-through, guiding those who are less aware of the project and what it is all about.
Photo by Alina Grubnyak on Unsplash
What is Polkadot In Simple Words?
Polkadot is Ethereum Co-founder Gavin Wood’s bet against blockchain maximalism. Its rise in popularity and gains has been stunning since its launch in May 2020. Since then, it has become one of the top 10 cryptocurrencies by market cap, according to CoinGecko.
But what is Polkadot, and what impact is it making on the industry? Who is using it, and is the hype empty or well-founded? Simply put, Polkadot (DOT) is a blockchain network that:
Connects blockchains to each other
Enables users to easily build a blockchain with their Substrate framework
Hosts blockchains, handling their security and transactions
Bridges blockchains on Polkadot with other networks such as Ethereum and Bitcoin
Let’s look at each of these features in more detail.
Features of Polkadot
Connections: The Relay Chain
Having a blockchain is great, but for most projects, it will have limited applications unless it can actually reach out to the larger blockchain community. On its own, a blockchain project would need to develop significant infrastructure to safely and effectively do this, and many projects have failed because they weren’t able to provide those seamless connections required.
Polkadot operates as a “relay chain” – essentially a large blockchain whose key purpose is to connect other chains to itself and provide communication between them. Having the “hub and spoke” structure offers other benefits as well for the smaller blockchains attached to the relay chain.
Empowering Construction: Substrate
The Polkadot framework includes a very powerful tool called Substrate that makes building a blockchain from scratch significantly easier. It is designed to help teams build up the specific blockchain they want, and has the protocol connection points that attach to the relay chain features.
This has two key benefits: it allows teams to focus less on building the basic infrastructure for yet another blockchain project, and allows them to focus their energy on the added value of their project.
It also gives access to the blockchain world for teams with great ideas but without the expertise needed to build a network from the ground up. This type of dual-enabling technology is powerful and has already been cited as a major reason teams are choosing Polkadot for their projects.
Security and Speed: Host Platform
Once blockchain projects, called parachains, because Polkadot processes transactions from all chains in parallel, are on the relay chain and operating, they get to enjoy one of the biggest benefits: using Polkadot’s established security and fast and scalable transaction speeds.
Not having to create their own top-tier security with full audits, and being able to avoid the high gas fees of other networks allow teams to leverage even more of their time and energy to the core value of their chain.
Connecting to the World: Bridges
Polkadot is naturally designed to act as a relay between the parachains on its network. However, it also has bridges to Ethereum and Bitcoin networks, meaning that parachains are able to access and interact with a vast network of systems, and no longer have to choose which network has the best connections for them. In this way, Polkadot isn’t in a winner-take-all competition with top networks like Ethereum, but instead is competing for users while collaborating and adding value to those on both sides.
In a first, Polkadot has announced their ability to conduct upgrades within the chain itself, preventing risks of a hard fork for significant updates. This reduces the risk of the community splitting in two, a massive amount of administrative cleanup, and unwanted token volatility.
Polkadot: The Risks Behind
There are a lot of things to like about Polkadot, and it’s easy after seeing the features of why the platform has garnered a lot of attention. However, it’s also important to explore the risks of Polkadot’s model and address some of the key concerns.
The biggest risk to Polkadot is that of many platforms: competition. While Polkadot is providing some true innovation in its approach, its core value is a Proof of Stake, general-purpose, platform that creates connections between other chains.
There are a number of other platforms that do the same, each with their own unique twists on how they get the job done. In addition to the two juggernauts, competing platforms include Polygon, Avalanche and Cosmos.
As with Ethereum, Polkadot has the capability to bridge with any of these other networks should it choose to decide it’s worth the effort, so it is protected from its own members being isolated from an attractive network of blockchains. Still, blockchain competition is intense right now and the market has yet to find saturation.
The platform has suffered major setbacks, especially during a 2017 hack, that hurt its financial position and its reputation. While it has certainly worked to fix the vulnerabilities and is likely more aggressively testing its code than other platforms thanks to these scars, it’s never great to see confidence shaken in a platform when over $150M is affected.
Finally, one of the relay chain architecture’s more interesting quirks is also a potential risk. The fact that in order to join Polkadot’s relay chain, blockchains have to bid for the space in a “slot auction”, where the winning bid is paid in DOT and is held for the duration of their participation.
The next year will shine more light on this process and what consequences it might have to smaller projects without the funds to compete for a slot.
Polkadot’s Canary in the Coal Mine: Kusama. Source: Polkadot.network
Risk Mitigation with Kusama
“Warning: this is an experimental network. EXPECT CHAOS.”
The above is in the documentation included with Kusama, Polkadot’s canary network (think – “canary in the coal mine”). In order to provide active risk mitigation for themselves and their users’ projects, Polkadot created a near clone of itself as a way to test new ideas, check for quality or unseen issues, and essentially crash test projects before they go live on Polkadot.
This has been very well received, and given that joining has been through limited slot auctions, even those projects who want to join will have to wait for the next auction (and win it) to join Polkadot.
Kusama offers a low-stakes way to fully work out any kinks in a project’s code and allows Polkadot to try new code itself without affecting any of its parachains. According to the Kusama team, R&D stands for Risk & Danger. This is the best way to try out crazy ideas, hone them into workable solutions, then bring them online as truly innovative leaps.
Relay Chain / Parachain Structure. Source: Polkadot Wiki
Meet Some Leading Projects on Polkadot
While Polkadot’s infrastructure is impressive, the various projects built and attached offer an interesting look into the quality of the platform as a whole. Some focus on enabling Polkadot’s core capabilities, and others simply use the parachain to offer their own product or service. A selection of top Polkadot network projects include:
Karura Network (Acala) is focused on creating and deploying DeFi smart contracts for various users. By doing so it has created a DeFi hub that enables cross-blockchain liquidity and applications.
Moonriver (Moonbeam) is an Ethereum-compatible smart contract parachain that connects Ethereum-based projects to Polkadot, focusing on allowing minimal smart contract reconfigurations or the need for using new development tools to interact across chains.
Khala (Phala) Network focuses on privacy-preserving cloud computing services. It is based on the TEE-Blockchain Hybrid Architecture, and it provides users with a solid balance between computing power, cloud-based flexibility, and blockchain-based security.
Bifrost was built as a DeFi hub, hosting applications that allow users to access a variety of DeFi features while offering a number of different staking rewards and liquidity options.
Shiden (Plasm) is another smart contract platform, designed to support the Dapps on Kusama/Polkadot. It was built with speed and scalability in mind, focusing its services on the L2 chains.
Final Words
As the excitement around Polkadot grows with its slot auctions coming online and the full capabilities of the network getting attention from investors and projects alike, it is easy to get caught up in the hype and wonder what this unique platform will look like a year or two from now.
While the platform is not without a few risks and possible downsides, it has been backed by a stellar team, has been joined by leading partner projects, and, so far, has been delivering on what it has advertised.
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Tech giant Samsung has revealed that it will take part in the central bank digital currency pilot project by the Bank of Korea.
Samsung Joins BOK Digital Currency Pilot Project
This latest development was revealed by the local news outletThe Korea Timeson August 12, 2021. Korea’s apex bank began trials for the digital won in July and tested the digital platform within a sandboxmanagedby Kakao subsidiary Ground X.
Samsung Electronics has decided to participate in the project and research the practicalities of the CBDC within a test environment.
The report further stated that the project would be focused on researching the efficiency and financial inclusion benefits of a CBDC. Specifically, Samsung and Kakao will launch a pilot program designed to track money transfers and remittances between countries. The program will also issue and distribute the digital currency and monitor how it works within the virtual test environment.
Samsung also intends to test the possibility of deploying blockchain-based systems on its popular Galaxy flagship mobile phones.
A Samsung executive further explained this by highlighting that the tech giant wants to conduct extensive tests using the Galaxy smartphone.
“Will it be possible to conduct payments via mobile phones using the digital currency with no internet availability, or to send CBDC remittances to other mobile phones or to other connected bank accounts, are the two core points that Samsung is looking at,” said the official.
The Korean CBDC is one of the major focuses of the BOK, and the first phase that started in July will run until December. The second phase, which will run from January to June 2022, will focus on real-time transactions and settlements.
CBDCs Continues to Dominate Global Finance
The global push by central banks to launch national digital currencies has hit its peak in recent months. Over 80 countries have expressed their intentions to launch digital currencies in recent months.
Africa appears to be catching up in recent weeks, with Nigeria and Ghana announcing concrete plans about their digital currencies.
In addition, BTCManager recentlyreportedthat Ghana had inked a partnership deal with Germanecke+Devrient to develop its digital currency.
It should be noted that central banks globally view CBDCs as a response to the growing threats of cryptocurrencies on international finance. It remains to be seen if they will be revolutionary or just glorified fiat currencies.
