MakerDAO Keeps USDC as Primary Collateral for Dai

Since there is a possibility of hazards being linked with USDC, the MakerDAO Risk Core Unit recently proposed the notion of diversifying the collateral for Dai. This suggestion was made as a response to the proposal. Nonetheless, MKR holders voted decisively in support of maintaining USDC as the major collateral for Dai. With a vote of 79.02% in favor of expanding the USDC-to-DAI minting capacity and decreasing the cost to 0%, MKR holders voted in favor of retaining USDC as the primary collateral for Dai.

Due to USDC’s “possibly more dangerous exposure to uninsured bank deposits” and “a weaker legal framework” in comparison to its rivals, the suggestion advised diversifying collateral into GUSD and USDP. Nevertheless, according to the Risk Core Unit, the risks that are connected with utilizing USDC as collateral have dramatically diminished from the previous week. This information was provided by the Risk Core Unit.

When a string of failed banks forced the USDC to briefly lose its $1 peg, the decision was made to maintain USDC as the principal collateral for Dai transactions. In response to this, MakerDAO has introduced efforts to prevent Dai from being undercollateralized. These actions include increasing the charge to mint Dai using USDC as collateral from 0% to 1%, as well as lowering the daily minting cap for this procedure.

A vote of confidence in the stability of the USDC stablecoin and its capacity to retain its $1 peg can be inferred from the fact that USDC will continue to serve as the principal collateral for the Dai cryptocurrency. Yet, this does bring up concerns about the possible hazards that are connected with placing a significant amount of reliance on a single collateral item.

It is quite possible that new discussions and disputes around collateral diversification will continue to emerge inside decentralized autonomous organizations such as MakerDAO as the cryptocurrency market continues to expand and stablecoins become more widely used.


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Dwpbank to Offer Bitcoin to 1,200 German Banks

Deutsche WertpapierService Bank (Dwpbank), which provides securities processing services to approximately 1,200 banks in Germany, is launching a new platform called wpNex. This platform will allow all of its affiliate banks’ retail customers to access Bitcoin without requiring additional Know Your Customer (KYC) procedures. The new service will enable customers to hold crypto accounts alongside their existing bank accounts.

According to reports, Tangany, a wallet-as-a-service provider, and Tradias, the digital asset trading service of Bankhaus Scheich, will also participate in the new offering. However, customers will not hold private keys. Dwpbank CEO Heiko Beck said that the bank intends to add other cryptocurrencies, digital assets, and tokenized securities to the platform in the future.

MLP Banking was the first Dwpbank affiliate to join the wpNex platform and has already conducted a transaction on it. MLP Banking’s account and securities processing head, Paul Utzat, stated that it was a logical addition to their existing wealth management offering.

The wpNex platform will enable customers to link their crypto accounts to their euro cash accounts, enabling transactions to take place without requiring a separate payments account. This service is expected to launch in the second half of this year.

Germany has been named one of the world’s most favorable countries for crypto. In February, DZ Bank announced that it would be adding crypto to its asset management service. DZ Bank is Germany’s second-largest bank by assets and a central institution for a network of bank coops with 8,500 branch offices.

However, in November, German crypto bank Nuri shut down due to the crypto bear market, despite having half a million customers. On the traditional finance side, Deutsche Bank shares plummeted in March 2023 as instability spread among European banks. Deutsche Bank asset management division DWS was reportedly in talks with Tradias regarding investment in the wpNex service.

In conclusion, Dwpbank’s wpNex platform is expected to be a game-changer for the German banking industry, as it allows retail customers to access Bitcoin and other cryptocurrencies easily. By integrating the crypto accounts with euro cash accounts, the platform will enable seamless transactions, making it an attractive option for many customers. With the increasing demand for crypto services, it is no surprise that more and more traditional financial institutions are exploring the crypto space.


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Mastercard Enables USDC Spending in Asia

However, the blending of traditional and decentralized finance (DeFi) continues to strengthen despite the challenges. In Nigeria, crypto wallet MetaMask has partnered with crypto fintech MoonPay to enable users to purchase crypto via instant bank transfers without requiring a credit or debit card. This integration is estimated to reduce the decline rate for direct crypto purchases in Nigeria from 90% to 30%. Nigeria is a major market for MetaMask, ranking third in mobile monthly active users, and is also ranked by Chainalysis as one of the top 20 countries in cryptocurrency adoption.

On the other hand, OKX, a major crypto exchange, announced that it will no longer provide services or allow new accounts for Canadian users starting on March 24, 2023, citing “new regulations.” Customers in the country must close open options, margins, perpetuals, and futures positions by June 22 and withdraw their fiat or tokens by that date. In February, The Canadian Securities Administrators required crypto exchanges to sign new, legally binding undertakings while they await registration with regulators.

Despite these challenges, Bitcoin’s value proposition continues to attract attention as its price continues to climb following the collapses of Silvergate, Silicon Valley Bank, and Signature Bank. Cathie Wood, the CEO of ARK Invest, believes that Bitcoin’s current decoupling from the equity markets may attract more institutional investors into Bitcoin over time. Wood expects that most firms would allocate between 2.5% to 6.5% of their investment portfolios to BTC by 2030, taking the leading cryptocurrency’s price to $1–1.5 million.

Finally, crypto analyst Marcel Pechman explains the relationship between banking valuation and cryptocurrencies, specifically Bitcoin’s ethos, and provides insight on how to analyze banks and avoid inaccurate market capitalization indicators.

In conclusion, Mastercard’s partnership with Stables is a significant move in the adoption of stablecoins in the Asia-Pacific region, while challenges in the banking and regulatory sectors have not slowed down the blending of traditional and decentralized finance (DeFi). As the world continues to grapple with a global banking crisis, Bitcoin’s value proposition remains on full display, and its price continues to climb, attracting attention from institutional investors.


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Animoca Brands Cuts Metaverse Fund Target to $800M

In recent news, Animoca Brands has reportedly reduced its target for its metaverse fund by a further 20% to $800 million, according to sources familiar with the matter. The company has scaled back on its billion-dollar goal due to the volatility in the crypto sector. Animoca Brands had previously announced in November 2022 that it was working on a new Animoca Capital fund with a target of $2 billion, but then halved that target to $1 billion in January 2023.

Two sources familiar with the matter disclosed that Animoca Brands’ market capitalization, which was previously valued at roughly $6 billion following a Temasek-led financing round in July 2022, has fallen to below $2 billion. The sources also shared that the company’s shares are trading at a considerably lower valuation in secondary markets. The decreased fundraising target and declining valuation signal a change in sentiment on the crypto industry, as excitement around such technologies has dwindled following scandals ranging from the collapse of FTX to the bankruptcy of several crypto lenders.

In 2022, Animoca Brands was named the most funded metaverse developer by Nasdaq, with Animoca having the most metaverse deals in 2022, closing 15 deals and receiving over $564 million in funding. As a prominent player in the metaverse industry, Animoca Brands holds a majority stake in The Sandbox, a leading metaverse platform. Apart from this investment, the company has actively participated in developing nonfungible tokens (NFTs) and GameFi.

Yat Siu, one of Animoca Brands’ co-founders, has stated that GameFi is expected to become one of the main gateways for the general public to access the metaverse. With the decreasing target for its metaverse fund and declining market capitalization, Animoca Brands’ focus may shift towards developing GameFi and other related projects.

It is worth noting that the metaverse has been a hot topic in the tech industry, with companies like Facebook and Roblox investing heavily in it. However, the hype around the metaverse has been tempered by concerns about its potential impact on privacy, security, and social inequality. As the metaverse industry evolves, it will be interesting to see how companies like Animoca Brands adapt and navigate the challenges and opportunities that lie ahead.


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Coinbase warns of losing crypto industry leadership

Coinbase, a prominent U.S.-based cryptocurrency exchange, has been issued a Wells notice by the U.S. Securities and Exchange Commission (SEC) over possible securities law violations regarding some of its asset listings, staking services, and Coinbase Wallet. The notice came on March 22, and Coinbase is expected to face legal enforcement action soon. As a result, Coinbase has warned that the U.S. government’s hawkish approach to crypto regulation has created an uncertain and unstable environment for the crypto industry, leading other countries to fill the vacuum.

Daniel Seifert, Coinbase’s vice president and regional managing director in Europe, highlighted the regulatory approach of the U.S. in his March 23 blog post titled, “Europe is winning. Will the US catch up?” According to Seifert, the U.S. has regulated crypto by enforcement, despite industry-wide calls for “comprehensive crypto regulation,” which has resulted in uncertainty and instability in the crypto industry. Seifert also argued that France, the U.K., and the European Union are now building friendlier ecosystems for crypto regulation, causing the U.S. to lose its status as the leading hub of the crypto sector.

Seifert emphasized the significance of Paris Blockchain Week, which was hosted at the Louvre this month, and the European Union’s Markets in Crypto-Assets (MiCA) regulation, expected to come into effect in 2024. MiCA aims to establish a harmonized set of rules for crypto-assets and related activities and services, offering clear rules and guidelines for the European cryptocurrency ecosystem. The MiCA legislation has been in development for two years and is expected to be a positive move for the sector.

Seifert also highlighted the U.K.’s recent push to become a crypto hub, as well as Hong Kong’s efforts to become a digital asset hub, the National Australia Bank’s work with non-U.S. dollar-pegged stablecoins, and the Canadian Securities Administration’s imposition of “enhanced investor protection commitments” on domestic crypto exchanges. Seifert and the Crypto Council for Innovation emphasized that crypto is global, and nobody is waiting for the U.S. to lead the charge.

Seifert’s blog post and the Crypto Council for Innovation’s Twitter thread have brought attention to the need for a comprehensive regulatory framework that will provide clarity and stability for businesses operating in the space. The U.S. government’s regulatory approach may cause it to lose its position as the leading hub of the crypto sector, with other countries offering friendlier crypto regulation ecosystems, such as France, the U.K., and the European Union. The crypto industry is global, and other countries are eager to fill the regulatory vacuum left by the U.S.


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Animoca Brands refutes claims of scaled back metaverse fund and plummeting valuation

Animoca Brands, a venture capital firm and web3 game developer, has denied recent reports that it has scaled back its metaverse fund target and experienced a significant drop in its valuation. The company refuted claims that it had reduced its metaverse fund target by $200 million, or 20%, to $800 million amid volatility in the crypto market and instability in the banking sector. The firm also downplayed suggestions that its valuation had plummeted from $6 billion as of July 2022 to roughly $2 billion in March 2023.

These claims were made in a March 24 Reuters report that cited anonymous “people familiar with the matter.” According to the report, Animoca initially halved its $2 billion metaverse fund target in January and recently cut it by another 20% to $800 million. However, Animoca co-founder and chairman Yat Siu had previously outlined that the fund target was between $1 billion and $2 billion, depending on how much capital was raised.

The metaverse fund, which was announced in November 2022, was designed to allocate capital to mid-to-late-stage startups with a metaverse focus. Animoca acknowledged that the banking collapses in the United States have had an impact on fundraising but stressed that the final amount raised for the fund has yet to be determined.

“While there’s no doubt that the FTX and banking crises have had a serious impact on available venture capital, fundraising for the Animoca Capital fund is in progress,” the firm stated. “When the raise is concluded, we will inform the market with the appropriate details, including the final size of this fund.”

In terms of its valuation, Animoca asserted that the figures reported by Reuters and other unnamed sources were inaccurate. The company, which trades as AB1, was initially listed on the Australian Stock Exchange (ASX) in its early days. However, AB1 was delisted back in March 2020 due to the ASX’s assertions that Animoca had breached its listing rules by being involved in crypto-related activities, among other things.

Since then, its shares have traded on unlisted stock-focused exchanges such as the Sydney-based PrimaryMarkets. The data from this platform was used to calculate a total market cap of AB1 at around roughly $2 billion. However, Animoca argues that these figures don’t fully represent the company’s total valuation.

“The claim […] that Animoca Brands ‘now trades its shares on PrimaryMarkets’ is not technically correct. We terminated our arrangement with PrimaryMarkets in the second half of 2020, but PrimaryMarkets chose to continue to trade Animoca Brands shares on its platform,” the firm stated. “We do not consider the thin trading activity on PrimaryMarkets to accurately reflect the company’s value. Trading volume is far too low to provide the price accuracy you would find on an actual primary market.”

Despite the challenges faced by the company, Animoca remains committed to its mission of developing web3 games and supporting startups focused on the metaverse. The firm has been at the forefront of the booming metaverse industry and is well-positioned to capitalize on its growth. As the industry continues to evolve and mature, it will be interesting to see how Animoca Brands navigates the challenges and opportunities that lie ahead.


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Collector Accidentally Burns $200K CryptoPunk NFT

In a recent incident that left the NFT community stunned, NFT collector Brandon Riley accidentally burned a CryptoPunk NFT worth $200,000 by sending it to a burn address. Riley had purchased the coveted CryptoPunk #685 on March 13, paying 77 ETH in the hopes of holding onto it for the long term. However, in a bid to borrow some money against it using a technique called wrapping, he ended up losing the NFT forever.

CryptoPunks are among the most popular NFTs in the market and have gained a cult following in recent years. These 8-bit pixel art characters, created by Larva Labs, are unique digital assets that are stored on the Ethereum blockchain. Each CryptoPunk has its own distinct traits, making them highly sought after by collectors.

As a seasoned investor, Riley was well aware of the potential of NFTs and had invested heavily in them in the past. He knew the importance of procuring new NFTs before the crypto markets took off, especially during a bull market. In an attempt to maximize his investment, Riley decided to borrow some money against CryptoPunk #685 using the wrapping technique.

Wrapping involves creating a wrapped token that represents an NFT and can be used as collateral for loans. This technique is popular among NFT collectors who want to borrow against their holdings without selling them. However, the process can be confusing for beginners, and Riley made a fatal error by sending the NFT to a burn address.

A burn address is a special type of Ethereum address that has no private key and can’t be accessed by anyone. Any crypto asset sent to a burn address is effectively destroyed, and the asset cannot be recovered under any circumstances. In Riley’s case, the CryptoPunk #685 was sent to a burn address by mistake, permanently deleting it from circulation.

The incident has sparked a debate among the NFT community about the risks of borrowing against NFTs and the need for more education around wrapping techniques. While Riley’s mistake was a costly one, it serves as a cautionary tale for other NFT collectors who may be considering borrowing against their assets.

In conclusion, the accidental burning of CryptoPunk #685 by NFT collector Brandon Riley highlights the need for greater awareness around the risks involved in borrowing against NFTs. While NFTs have the potential to be highly lucrative investments, it’s important for collectors to educate themselves on the intricacies of the market and the various techniques used to maximize their returns.


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Sony Files Patent for NFT Transfer Between Game Platforms

The developer of the immensely popular PlayStation gaming console, Sony Interactive Entertainment, has recently submitted a patent application for a framework that, once implemented, will enable users to transfer and utilize non-fungible tokens (NFTs) across multiple gaming platforms. This will be made possible by the aforementioned framework. The filing of this patent, which bears the description “NFT framework for transferring and utilising digital assets across gaming platforms,” is only the most recent sign that Sony is becoming more interested in the cryptocurrency industry.

Sony has been actively pursuing opportunities in the cryptocurrency industry for a number of years, during which time the business has formed partnerships with a variety of blockchain-based platforms and registered a number of trademarks pertinent to this sector. NFTs, or non-fungible tokens, are digital assets that are confirmed on a blockchain and cannot be replicated or replaced. In addition to this, Sony has been investigating the potential usage of NFTs.

The most recent patent application that Sony has submitted aims to design a system that would enable players to move and utilize non-fungible tokens (NFTs) across a number of different gaming platforms. Because of this, players will be able to utilize their NFTs in a variety of games, irrespective of the platform that they are playing on.

The framework has a wide variety of possible uses in a variety of contexts. For instance, players might buy non-fungible items (NFTs) in one game and use them in another, or they could exchange NFTs with other players who were using separate platforms. The framework could also make it simpler for game creators to design games that are compatible with several platforms and make use of NFTs.

Even if Sony’s patent application has not yet been approved, it is abundantly evident that the business has an interest in the bitcoin market. It is probable that we will see more firms like Sony researching the possible uses of NFTs and other digital assets as blockchain technology continues to advance and become more widespread. Currently, Sony is one of the more prominent examples of this trend.


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Fake Arbitrum Airdrop Scam Circulated on Discord

The blockchain security company CetriK issued a warning on March 25 about a phishing link that was being spread via the official Discord server of Arbitrum, which is a prominent cryptocurrency platform. According to the sources, it was believed that the link was disseminated via the stolen Discord account of one of the developers working on the Arbitrum project.

In the phishing communication, an option to re-claim an extra share in Arbitrum DAO Governance was presented, with the justification that there had been problems with the first token claim campaign. On the other hand, the accompanying URL had a misspelling of Arbitrum as “Arbtirum,” which is a frequent kind of deceit employed in phishing assaults.

If an unwary victim were to click on the phishing link, they would be sent to a false website where they would be prompted to input sensitive information such as the private key to their digital wallet. Investors run the danger of having their bitcoin assets stolen by con artists as a result of this.

Investors have been cautioned to refrain from engaging with the bogus statement until Arbitrum gives more information on the matter. Since cybercriminals are continuing to capitalize on the excitement around cryptocurrencies, it is vital for investors to maintain a heightened vigilance and be wary of deceptive promises and claims that are unrealistic.

In a separate but related piece of news, it was revealed that two airdrop hunters had successfully obtained nearly $3.3 million worth of Goods, demonstrating the tremendous benefits that may come from successfully participating in airdrops. While taking part in airdrops or any other activity linked to cryptocurrencies, however, it is essential for investors to do enough research and be vigilant against the possibility of falling victim to a hoax.

In general, the event serves as a useful reminder of how important it is to exercise extreme caution and vigilance whenever one engages in activities that are associated to cryptocurrencies. Since con artists are likely to use more sophisticated strategies as the business continues to get more attention, it is crucial for investors to stay knowledgeable and attentive at all times.


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US Fed denies Custodia Bank membership over crypto concerns

In its 86-page report released on March 24, the US Federal Reserve denied Custodia Bank’s application for membership citing concerns over the bank’s involvement in the crypto industry. The Fed has raised “concerns about banks with business plans focused on a narrow sector of the economy”, with a high concentration of activities related to the crypto industry. The report states that “Those concerns are further elevated with respect to Custodia because it is an uninsured depository institution seeking to focus almost exclusively on offering products and services related to the crypto-asset sector, which presents heightened illicit finance and safety and soundness risks.”

The Fed also noted that Custodia Bank had not yet developed a sufficient risk-management framework for its proposed cryptoasset-related activities, nor had it addressed the highly correlated risks associated with its undiversified business model. The report stated that Fed’s members must align their risk management systems and controls with the activities described in their business plans.

If Custodia Bank were to be accepted as a member of the System, it would be further prohibited from running crypto-related services “given the speculative and volatile nature of the crypto-asset ecosystem” that is not consistent with the purposes of the Federal Reserve Act. The report stated that “Further, if the Board were to approve Custodia’s membership application, it would prohibit Custodia from engaging in a number of the novel and unprecedented activities it proposes to conduct—at least until such time as the activities conducted as principal are permissible for national banks.”

In response, Custodia Bank criticized the Fed’s decision as shortsighted and an inability to adapt to changing markets. The bank claimed that perhaps more attention to areas of real risk would have prevented the bank closures that Custodia was created to avoid. The bank has vowed to turn to the courts to vindicate its rights and compel the Fed to comply with the law.

The Fed’s report on Custodia Bank’s membership application is 14 times longer than its previous longest denial order, and 41% longer than the Fed’s longest order on any subject, according to the bank. In late January, the Fed denied a membership request from Custodia Bank, as well as a second application in February, claiming that its application “was inconsistent with the required factors under the law.”

In conclusion, the US Federal Reserve has denied Custodia Bank’s membership application due to concerns over the bank’s involvement in the crypto industry. The bank’s proposed cryptoasset-related activities were deemed to present heightened illicit finance and safety and soundness risks, and the bank had not developed a sufficient risk-management framework. While Custodia Bank has criticized the Fed’s decision, the bank is now prohibited from running crypto-related services if accepted as a member.


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