CoinMarketCap Crypto Report: Top 20 Exchanges Mark a 36% Drop in Spot Trade Volume from Previous Quarter

In the first half of 2023, the cryptocurrency market has seen significant shifts in exchange activities, according to a comprehensive analysis by CoinMarketCap. The report examines the overall health, size, and activity level of the crypto market, considering both centralized and decentralized exchanges.

The top 20 exchanges contributed $1.67 trillion in total spot trade volume in Q2 2023, marking a 36% drop compared to the previous quarter. This decline indicates a slowdown in market activities, following Q1’s active trading spurred by Bitcoin’s price doubling.

Binance maintained its dominant position in the market throughout H1 2023, with a total spot trading volume share of 59.99%. The top five exchanges, including Binance, Coinbase, and Kraken, accounted for approximately 85% of the total spot market volume.

The market continues to offer a healthy number of trading pairs and available coins, with a steady increase in new listings. Binance dominated liquidity in the large-cap space, focusing its new listings on high-quality mainstream coins.

BitForex and Bitget were among the most active in adding new coins during the memecoin season from April to June 2023.

Binance ($57 billion), OKX ($10 billion), and Bitfinex ($10 billion) exhibited the highest amount of Proof of Reserve Assets. Despite recent market FUD leading to capital outflows from Binance, the exchange still maintains a healthy amount of Proof of Reserve assets.

In H1 2023, the majority of exchange tokens achieved net positive returns, although most were unable to outperform Bitcoin (+182% YTD).

Decentralized exchanges (DEX) saw their peak trading volume in March, with a total DEX volume of $189 billion in Q2, a 24% decrease compared to Q1. Uniswap dominated the DEX market with a 57.5% market share, and its monthly volume has been on par with Coinbase’s spot volume.

The DEX to CEX ratio has increased to around 1:8, attributed to advancements in DEX products, regulatory concerns about CEX, lower gas fees, and a higher proportion of crypto-native participants.

Approximately 80% of the DEX trade volume occurred on Ethereum and its Layer2 chains in H1 2023. However, BNB has been rapidly gaining a larger share of the DEX trading market in Q2.


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Signature Bank Team Joins Customers Bank, Part of $21B Customers Bancorp

Customers Bank, a subsidiary of Customers Bancorp (NYSE:CUBI), has announced the successful onboarding of nearly 30 team members formerly employed by Signature Bank, once known for its crypto-friendly stance. This move follows the closure of Signature Bank by its state chartering authority, as announced in a joint statement by the Treasury, Federal Reserve, and FDIC on March 12, 2023.

The team, which retains its experienced leadership, will initially manage the transfer and servicing of about 150 loans in Customers Bank’s recently acquired $631 million venture banking loan portfolio. The bank expects this team to attract significant deposits from these clients, contributing to the growth of Customers Bank’s Tech & Venture and Fund Finance lines of business.

As part of the onboarding process, Customers Bancorp is awarding each team member with restricted stock units. The aggregate award amounts to up to 23,464 restricted stock units, with a fair value equivalent to the closing price of Customers Bancorp’s common stock as of market close on the business day immediately preceding the grant ($32.88). These awards, which will vest equally over three years provided the individual remains employed through the vesting date, are being made outside of the Customers Bancorp 2019 Stock Incentive Plan as one-time employment inducement awards.

Customers Bank is recognized as one of the nation’s top-performing banking companies, with over $21 billion in assets, making it one of the 100 largest bank holding companies in the US. The bank is known for its innovative approach to banking, offering a blockchain-based 24/7/365 digital payment solution among its services.

Image source: Shutterstock


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PwC Report: Asian Institutional Investors Opt for Third-Party Custody Solutions for Digital Assets

A joint report by Aspen Digital and PwC titled “State of Digital Asset Custody – Understanding and implementing digital asset custody for institutional investors” reveals a rising demand for institutional-grade digital asset custody solutions among family offices, high-net-worth individuals (HNWIs), and external asset managers (EAMs) in Asia.

The report highlights that digital assets, now a $1.2 trillion market, have evolved into an alternative asset class over the past decade, with more than 120 custody providers as of April 2023. While self-custody solutions offer full control and access over digital assets, many institutions are recognizing their limitations for ongoing trading and operational needs, leading to a preference for third-party custody service providers.

According to PwC’s 2022 Metaverse Survey, 82% of executives expect to integrate metaverse into their business activities within three years. However, the report indicates that most NFT custody services offered by self-custody solutions may pose a challenge for institutions new to the industry.

Digital asset custodians have expanded their role from merely safeguarding cryptocurrencies to helping investors navigate and participate in new business opportunities and asset classes, such as Decentralized Finance (DeFi), non-fungible tokens (NFTs), and metaverse. The report predicts an increase in third-party custodians worldwide enhancing their technical capabilities and service offerings.

Duncan Fitzgerald, Digital Assets & Web3 Co-Leader of PwC, emphasized the importance of safekeeping assets in the digital environment. Elliot Andrews, CEO of Aspen Digital, stated that understanding the unique characteristics of custody solutions and providers compared with traditional assets is one of the biggest impediments when considering investment.

Despite the growing need for institutional-grade digital asset custody, there are hesitations among family offices and HNWIs about adopting custodian solutions, particularly regarding asset security, navigating fragmented regulations across jurisdictions, and providing comprehensive insurance coverage.

The report findings are based on feedback from family offices, HNWIs, and EAMs based in Asia in the second quarter of 2023. In-depth follow-up interviews were also conducted to acquire additional perspectives on custodian adoption.

Image source: Shutterstock


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Sia Network Q2 2023: 12% Increase in Used Storage

In the second quarter of 2023, the Sia network, a decentralized cloud storage platform, saw a 12% quarter-over-quarter (QoQ) increase in used storage, raising the storage utilization rate from 19% to 25%, according to a report by Messari. This growth occurred despite a 3% QoQ decrease in the addition of storage contracts, largely due to issues with third-party interfaces.

The Sia Foundation, the organization behind the Sia network, approved seven grants totaling $260,000 in Q2 2023. The largest grant, worth $94,000, was awarded to S5 Network and Apps for the development of a content-addressed storage network. The smallest grant, amounting to $5,000, went to SiaShare for the creation of a lightweight web service for encrypting, storing, and sharing files using the renterd interface.

Sia also made significant strides in its development roadmap. The beta version of its “hostd” application was published on GitHub. This application provides a user-friendly interface for storage providers, an API for managing storage resources and revenue, and an embedded web UI that enables providers to remotely manage storage operations. In a test comparison, hostd outperformed siad, the previous hosting module, with 1.4x faster download speeds and 20x faster upload speeds.

The alpha version of Sia’s “walletd” application was also published on GitHub. This application enables users to interact with Sia assets like SC and SF tokens on both hot and cold wallets. It also supports multi-signatures and hardware wallet integrations.

Despite the challenges faced in Q2 2023, including the shutdown of Skynet Labs and the temporary halt of storage uploads to Sia by Filebase, the Sia network demonstrated resilience and continued growth. The increase in storage utilization and the ongoing development of user-friendly applications indicate a positive outlook for the network.


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Circle CEO Expects Yuan-Backed Stablecoins Despite China’s Crypto Ban

According to SCMP, despite the stringent ban on cryptocurrencies in mainland China, Jeremy Allaire, the co-founder and CEO of Circle, a leading operator of the USDC stablecoin, foresees a significant role for yuan-backed stablecoins in the global crypto market.

In a recent statement at the Converge22 conference in San Francisco, Allaire acknowledged China’s reluctance to open up to cryptocurrencies. Despite this, he believes that stablecoins could be instrumental in achieving Beijing’s goal of yuan internationalisation.

Circle has expressed optimism about Hong Kong’s efforts to regulate stablecoins, considering Asia as its largest non-US market. This move could potentially pave the way for a more regulated and secure environment for stablecoin transactions, which could, in turn, boost the adoption of yuan-backed stablecoins.

While the ban in mainland China poses challenges, it also opens up opportunities for the growth of stablecoins, particularly those backed by the yuan. As China continues to assert its digital currency ambitions, the potential for yuan-backed stablecoins to contribute to the internationalisation of the yuan becomes increasingly apparent.

Allaire’s insights highlight the evolving landscape of the crypto market in Asia and the potential strategic role of yuan-backed stablecoins. As the crypto industry continues to evolve, the interplay between regulatory frameworks, market dynamics, and technological innovation will be crucial in shaping the future of digital currencies.


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Binance’s Success Rooted in External Pressure, Reveals CEO

In a recent tweet, Changpeng Zhao (CZ), the CEO of Binance, the world’s largest cryptocurrency exchange by trading volume, shared his insights on building strong teams and the role of external pressure in the company’s success.

CZ began his tweet by addressing a frequently asked question about the best way to build tight and strong teams. He revealed that the secret is not found in team-building dinners, outings, coaching exercises, mentors, or inspirational speeches. While these elements can be beneficial, their effects tend to fade over time. Instead, he pointed out that the key to building a strong team is external pressure.

Drawing an analogy, CZ suggested that if aliens were to visit Earth, the existing issues between countries like the US and China would vanish instantly, highlighting the unifying effect of external pressure. He also referenced the movie Blackhawk Down, where a soldier explains that the bond between soldiers is not about glory or heroism, but about the men next to them.

CZ clarified that he’s not advocating for life-threatening pressure, but he believes that facing challenges together is the best way to build tight teams. This approach fosters reliance, alliance, resilience, and most importantly, trust among team members.

This, according to the CEO of Binance, is one of the primary causes of the company’s strong team dynamics. FUD (Fear, Uncertainty, and Doubt) has kept the corporation in the trenches with one another since it has constantly faced external pressure. 

CZ concluded his tweet by noting that while pressure creates tight teams internally, he is equally focused on collaboration and cooperation that builds trust externally. This insight into Binance’s team-building strategy provides a unique perspective on the company’s success and its approach to overcoming challenges.

Binance and CZ’s recent regulatory and legal pressures

This perspective is particularly relevant given the recent challenges Binance has faced.

On June 5, 2023, the Securities and Exchange Commission charged Binance Holdings Ltd., its U.S.-based affiliate BAM Trading Services Inc., and CZ with a variety of securities law violations.

A month later, on July 5, Binance’s offices in Australia were searched by the country’s financial markets regulator.

The following day, Binance’s chief strategy officer Patrick Hillmann confirmed his departure from the crypto exchange, amid reports that other top compliance executives in the United States, including general counsel Han Ng and senior vice president for compliance Steven Christie, had also resigned.


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Polkadot Q2 2023: OpenGov and XCM V3 Launch, SEC Clearance for DOT

According to MessariPolkadot, a blockchain network designed to support interconnected, application-specific Layer-1 chain, has made significant progress in Q2 2023. The network launched OpenGov, a fully-decentralized governance model, and XCM V3, a new iteration of the messaging format, both of which are expected to enhance the network’s functionality and interoperability.

OpenGov introduces concurrent referenda, community-centered governance bodies, and enhanced delegation flexibility, enabling a more efficient and transparent decision-making process. The new governance model replaces the Council and Technical Committee with the Fellowship, a developer DAO that ensures decentralization through community voting and checks and balances. This shift reflects Polkadot’s commitment to a more democratic and efficient decision-making process.

The launch of XCM V3 has generated significant excitement in the Polkadot community. The new version introduces advanced programmability, bridging capabilities with external networks, cross-chain locking, improved fee payment mechanisms, and support for non-fungible tokens (NFTs). This upgrade is expected to pave the way for increased functionality and interoperability across the Polkadot network.

Polkadot’s native token, DOT, was not flagged by the SEC as a security. This follows the Web3 Foundation’s statement that DOT had morphed and was no longer deemed a security after three years of discussions with the SEC. This omission from the SEC’s list of securities is a significant milestone for Polkadot, providing a level of regulatory clarity for the network and its users.

The network also saw Acala and Moonbeam re-lease their parachain slots, indicating increased competition for slots as new projects seek to join and existing projects aim to re-sign. The first batch of parachain leases is set to expire in October, which is expected to intensify the competition for parachain slots.

Polkadot’s market capitalization experienced a 16% decrease QoQ, declining from $7.74 billion to $6.24 billion. Despite this, Polkadot ranked as the 12th largest crypto project by market cap and the fourth largest base layer protocol, following Ethereum, Cardano, and Solana.

Looking ahead, Polkadot plans to implement additional system parachains, asynchronous backing, and parathreads, which will further enhance the network’s functionalities, scalability, and interoperability. With one of the largest developer communities in the crypto space, Polkadot is well-positioned to continue delivering on its roadmap and shipping products.


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Multichain Reports Unusual Outflows Worth Over $100M

In the past 12 hours, a large amount of assets has unusually flowed out from Multichain. These assets, which include a variety of cryptocurrencies, have been transferred to the new address: 0x1eed63efba5f81d95bfe37d82c8e736b974f477b. At the time of writing, the net worth of all assets transferred is $102,834,504.

The assets that have flowed out are approximately as follows:

  1. From Fantom: 11.91 million DAI, 13,146 ETH, 10.1 million USDC, 64 million USDT, 52 BTC
  2. From Arbitrum: 2,891 WETH, 8.7 million USDC, 7.5 WBTC
  3. From BNB Chain: 209k USDC, 50.8 BTCB
  4. From Avalanche: 2.38 million DAI, 33.76 WBTC.e
  5. From Cronos: 667.4 WETH, 9 million USDC, 616k DAI
  6. From Polygon: 19.95k USDC, 5,582 WETH, 7.05 WBTC
  7. From Moonbeam: 237.6k USDC
  8. From Optimism: 37k USC, 21.91 WBTC, 10.36 million DAI
  9. From Ethereum: 15k DAI

On July 7th, the Multichain team announced via Twitter that the assets locked up on the Multichain MPC address had been moved abnormally to an unknown address. The team was unsure of the cause and began an investigation. They recommended that all users suspend the use of Multichain services and revoke all contract approvals related to Multichain. They also announced that the Multichain service had been stopped, and all bridge transactions would be stuck on the source chains. They did not provide a confirmed time for resuming the service and advised users not to use the Multichain bridging service.

On July 8th, Circle and Tether, two major stablecoin issuers, froze over $65 million in assets that had been transferred from Multichain. This amount represented about half of the assets that were abnormally moved.


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