Tag: LIQUIDITY

SushiSwap CEO Proposes New Token Model

by Blockchain News

SushiSwap CEO Jared Grey has initiated a pivotal proposal titled “Deploy new tokenomics for Sushi.” This initiative, which seeks to overhaul the platform’s existing token economic model, has now entered the crucial stage of community voting on Snapshot. The voting process, critical for determining the future course of SushiSwap, began recently and is set to conclude on November 25, 2023, at 1:00.

The core of the proposal is to generate a consensus within the community. Its details and the initial draft can be found on the Sushi forum, providing comprehensive insights into the proposed changes. Grey’s initiative emphasizes the need to restructure Sushi’s token model to enhance its role in the protocol’s ongoing success and contribute to its growth trajectory. Since its inception, SushiSwap has been a front-runner in tokenomics with innovative initiatives like MasterChef and xSushi. The new proposal is a culmination of feedback from both the Sushi and DeFi communities, aiming to set the platform on a sustainable growth path.

The proposed model is built on three fundamental pillars: protocol sustainability, token utility enhancement, and treasury diversification. It addresses several key challenges, including improving rewards efficiency to reduce the annual cost of Sushi emissions, establishing a balanced approach to emissions distribution, addressing financial stability concerns, recalibrating LP incentives, and revising xSushi staking mechanisms.

Furthermore, the economic model proposed scales strategically through various innovations. These include generating primary revenue from LP transactions through trading fees, income from trade fees via aggregation, potential revenue from staking rewards, and forming strategic partnerships. The model also considers the interests of key stakeholders such as Liquidity Providers, xSushi holders, traders, token projects, DAOs, and the Sushi Treasury.

The objectives of the revised proposal are manifold. They include promoting decentralized ownership, amplifying liquidity, encouraging sustainable growth, enhancing the protocol’s sustainability, bolstering $SUSHI utility, and diversifying the treasury for robust financial operations. This new model aims to enhance liquidity, offer non-dilutive token rewards, institute a balanced supply, and ensure competitiveness in the evolving DeFi landscape.

The ongoing voting process is a decisive step for SushiSwap. A positive outcome will lead to the enactment of the proposed framework, reshaping Sushi’s token model to align with its ecosystem goals, increase decentralized ownership via the DAO, realign stakeholders optimally, and promote ecosystem growth with sustainable emissions and value.

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Japan’s JCBA Submits Initial Proposal for IEO Regulatory Reform to JVCEA

by Blockchain News

Key Takeaways

JCBA (Japan Cryptocurrency Business Association) submits initial proposal for IEO (Initial Exchange Offering) regulatory reform to JVCEA (Japan Virtual Currency Exchange Association).

The proposal outlines four key agendas aimed at stabilizing the IEO market.

The reform aims to enhance user protection and promote domestic IEOs over foreign exchanges.

Introduction

The Japan Cryptocurrency Business Association (JCBA), headquartered in Chiyoda, Tokyo and led by President Hiroshi Hirosue, announced the submission of an initial proposal for the reform of the IEO (Initial Exchange Offering) system. The proposal was developed by the ICO & IEO Subcommittee, chaired by Seihiro Yoshida, and submitted to the Japan Virtual Currency Exchange Association (JVCEA), led by President Genki Oda.

Background and Current Issues

Since May of this year, the ICO & IEO Subcommittee has been actively discussing the future of the IEO system, leveraging insights from various businesses involved in cryptocurrency and Web3. The proposal consolidates these discussions and has been submitted to JVCEA, a self-regulatory body for cryptocurrency exchanges and related derivative trading.

Four Agendas for IEO Reform

The proposal outlines four key agendas for reform:

Price Determination: Diversification of pricing methods and explicit warnings about pricing.

Liquidity: Setting liquidity targets at the time of listing and ensuring a conducive environment for liquidity.

Price Stability: Establishing rules for price stabilization measures at the time of listing.

Sale Restrictions: Formalizing and tightening lock-up regulations for issuers and underwriting exchanges.

Future Directions

The proposal is an initial draft discussed solely within the JCBA. Future discussions will involve various stakeholders and focus on the feasibility of implementing these reforms within the scope of self-regulatory rules.

The reform aims to encourage users to manage their assets under Japanese regulations rather than using foreign exchanges, thereby enhancing user protection.

Disclaimer & Copyright Notice: The content of this article is for informational purposes only and is not intended as financial advice. Always consult with a professional before making any financial decisions. This material is the exclusive property of Blockchain.News. Unauthorized use, duplication, or distribution without express permission is prohibited. Proper credit and direction to the original content are required for any permitted use.

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Circle Introduces Native USDC on OP Mainnet: What It Means for the Ecosystem

by Blockchain News

Circle has announced the upcoming launch of native USDC on the OP Mainnet. The announcement, part of Circle’s #StableSeptember series, outlines the benefits and changes that will accompany this development.

Native USDC: A New Standard for the Optimism’s OP Mainnet

According to the official blog post dated [insert date of the blog post], USDC issued by Circle will become the “official form of USDC for the [OP Mainnet] ecosystem.” This move is expected to gradually replace the currently circulating bridged USDC liquidity originating from Ethereum.

The introduction of native USDC is poised to enhance the OP Mainnet’s financial infrastructure, potentially attracting more institutional investors and fostering greater liquidity. However, it remains to be seen how this will impact the broader stablecoin market and whether native USDC will become the de facto standard for the OP Mainnet.

Key Features and Benefits

The native USDC will offer OP Mainnet users several advantages:

Dollar-Backed Stability: The stablecoin is fully reserved and redeemable at a 1:1 ratio for US dollars.

Institutional On/Off-Ramps: The new form of USDC will facilitate easier access to institutional-level financial mechanisms.

Technical Details

Token Symbol for Bridged USDC from Ethereum: USDC.e

Token Address for Bridged USDC: 0x7f5c764cbc14f9669b88837ca1490cca17c31607

Token Symbol for Native USDC: USDC

Token Address for Native USDC: 0x0b2C639c533813f4Aa9D7837CAf62653d097Ff85

Transition and Liquidity

Circle and Optimism will collaborate to ensure a smooth transition of liquidity from the Ethereum-bridged USDC (now renamed as USDC.e) to the native USDC. The OP Mainnet bridge will continue to operate as usual, with no immediate changes planned.

Ecosystem Expansion

Circle has been strategically expanding its USDC ecosystem across various platforms. In addition to the OP Mainnet, Circle has also minted native USDC on Coinbase’s Base, Solana, and primarily on Ethereum.

Recently, Circle entered into a partnership with Mercado Pago, Latin America’s largest fintech company, to meet the growing demand for trusted digital dollars in Chile. This collaboration aims to provide millions of users with access to USDC for seamless transactions.

Serving as a store of value akin to fiat USD, Circle has released a comprehensive guide detailing how to transfer USDC to Phantom, which is Solana’s premier web and mobile wallet.

Furthermore, Circle has introduced the Cross-Chain Transfer Protocol (CCTP), enabling the exchange of native USDC between supported networks such as Ethereum, Arbitrum, and Avalanche.

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HashKey Launches Wealth Management Platform for Institutional Investors

by Blockchain News

Hong Kong-based digital asset firm, HashKey Group, has launched a new wealth management platform aimed at professional and institutional investors. The move comes in response to a growing demand from investors seeking access to virtual assets. The platform will allow the group to offer solutions to help tap into the “growing opportunities of virtual assets.”

HashKey’s venture capital arm, HashKey Capital, is the first to benefit from the new platform. It will manage portfolios that only contain virtual assets. The company was granted a “Type 9 asset management license” by Hong Kong’s Securities and Futures Commission, which likely paved the way for its latest offering.

The launch of the wealth management platform comes after HashKey closed a $500 million investment round for a fund that aims to push for mass adoption of blockchain and crypto technologies. The move highlights the company’s commitment to driving the adoption of digital assets.

According to a 2022 study from consultancy firm Boston Consulting Group, only 0.3% of individual wealth is invested in crypto, compared to the 25% invested in equities. However, HashKey believes there is “potential robust demand for virtual assets in the future.”

In addition to launching the new platform, HashKey is expanding its over-the-counter trading service. The company plans to increase the number of tokens in its spot market and increase its liquidity coverage to 24/7. The move is a response to recent challenges in the crypto market, which have highlighted the need for deep and reliable liquidity.

HashKey’s move into the wealth management space comes as institutional investors continue to explore the potential of digital assets. Many are looking for ways to gain exposure to the emerging asset class, which has been one of the best-performing asset classes in recent years.

Overall, HashKey’s launch of a wealth management platform for professional and institutional investors is a significant step forward for the digital asset industry. The move highlights the growing demand for virtual assets and the increasing interest from institutional investors seeking exposure to the emerging asset class. With its new platform and expanded over-the-counter trading service, HashKey is well-positioned to capitalize on the growing interest in digital assets.

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Bitcoin Liquidity Drops Despite Price Surge

by Blockchain News

Bitcoin (BTC) has seen a significant price surge of 45% in 2023, making it one of the best-performing assets in recent times. However, despite the bullish quarter in terms of price gain, BTC’s liquidity has dropped to a 10-month low. The liquidity dry-up is partly attributed to the ongoing financial crisis in the traditional financial market and regulatory actions against crypto companies.

The current financial crisis has caused several banks to collapse, which has directly impacted the crypto ecosystem. In particular, the collapse of crypto-friendly banks such as Silicon Valley Bank and Signature Bank has removed crucial U.S. dollar payment rails for crypto, leading to a liquidity crisis, especially on U.S. exchanges. This, in turn, has led to increased price volatility, forcing traders to pay more fees in slippage.

Slippage refers to the price difference between the expected price of a transaction and the price at which it is fully executed. For instance, for a $100,000 sell order, the slippage for the BTC/USD pair on Coinbase climbed by 2.5 times at the beginning of March. During the same time frame, Binance’s BTC/USDT pair’s slippage barely moved.

The liquidity crunch has also led to higher price volatility on U.S. exchanges, where the price discrepancy between BTC and U.S. dollar pairs has increased drastically compared with non-U.S. exchanges. For example, the price of BTC on Binance.US is more volatile than the average price across 10 other exchanges.

Conor Ryder, research head of on-chain data analytics firm Kaiko, explained the drastic impact of the liquidity crisis on traders and the market. He noted that stablecoins are replacing U.S. dollar pairs, and although it lessens the impact of U.S. banking troubles, it has an adverse effect on liquidity in the United States. He added that it would indirectly harm investors there.

Despite the regulatory actions taken against crypto companies, the price of Bitcoin has remained relatively strong, outperforming traditional assets such as stocks and bonds, which have seen one of their worst years. However, the liquidity crisis has undoubtedly impacted the market, and it remains to be seen how it will evolve in the coming months.

In conclusion, Bitcoin’s liquidity drop despite its price surge is a concerning development for traders and investors alike. The ongoing financial crisis and regulatory actions against crypto companies have led to a liquidity crunch, causing increased price volatility and higher fees for traders. As the market evolves, it will be interesting to see how BTC’s liquidity and price behave in response to the changing market conditions.

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Institutional Investors Seek Tokenization Solutions

by Blockchain News

Institutional investors managing trillions of dollars worldwide are seeking solutions for tokenization, which can allow fractional ownership of an asset that previously had to be sold as a whole. This method can improve liquidity for global assets, which is expected to reach $145.4 trillion by 2025, according to Big Four firm PwC. Polygon, a blockchain scaling and infrastructure development platform, has been working with many global players in this space, including Hamilton Lane and JPMorgan.

In January, Hamilton Lane announced the first of three tokenized funds backed by Polygon, bringing part of its $824 billion in assets under management on-chain. By tokenizing its flagship Equity Opportunities Fund, Hamilton Lane was able to lower the minimum required investment from an average of $5 million to $20,000. This move enables greater accessibility for smaller investors and creates a more liquid market for the asset.

JPMorgan also explored the potential of decentralized finance (DeFi) for wholesale funding markets by executing its first cross-border DeFi transaction on the Polygon network in November. This initiative is part of a pilot program that aims to leverage the benefits of blockchain technology to improve traditional financial markets.

Polygon offers a blockchain scaling solution that enables developers to build and connect decentralized applications. The platform has been working on providing institutional-grade infrastructure for tokenization, which is crucial for institutional investors who require reliable and secure systems. Colin Butler, the global head of institutional capital at Polygon, acknowledges the need for institutional-grade systems and solutions that are easy to implement, flexible, and upgradeable, which are essential for institutional investors to integrate tokenization into their existing systems.

Overall, tokenization presents a significant opportunity for institutional investors to improve liquidity and accessibility to a wider range of investors, and platforms like Polygon are working to provide the necessary infrastructure to support the growth of this market.

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Circle Plans to Cover USDC Shortfall After SVB Shutdown

by Blockchain News

Circle, the issuer of the stablecoin USD Coin (USDC), has announced that it will use corporate resources to cover the shortfall on its reserves after Silicon Valley Bank (SVB) was shut down by the California Department of Financial Protection and Innovation. USDC liquidity operations will resume as normal when banks open on Monday, enabling redemption at 1:1 with the US dollar. The stablecoin lost its $1 peg on March 11, trading as low as $0.87, due to the disclosure of $3.3 billion of Circle’s reserve held at SVB. (Read More)

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POSA Publishes Two White Papers

by Blockchain News

On February 21, a collection of white papers was released by the Proof of Stake Partnership (POSA), a nonprofit industry organization. These white papers investigate the legal status of deposit tokens in regard to their respective subfields of the law, namely securities law and tax law, within the framework of the securities legislation and tax law of the United States, respectively. Contributors originating from more than ten various departments belonging to a range of industrial organizations and representatives of those departments were instrumental in facilitating the publication of these pieces.

The act of producing transferable receipt tokens on blockchains that use a proof-of-stake consensus mechanism as their method for obtaining network consensus is referred to as liquid staking. Liquid staking is also known as proof-of-stake consensus. In the context of cryptocurrencies, this activity is referred to as “staking.” The statement that inspired the term “liquid staking” also gives its name to the practice, which is referred to as “liquid staking.” In order to establish ownership of cryptographic assets that have been staked or prizes that have been received for the purpose of staking, these tokens are put into circulation and employed in the process of establishing ownership of those assets. Staking the tokens itself is one method for accomplishing this goal. The POSA is opposed to the description of “liquid staking derivatives” because, according to their argument, it paints a false picture of the qualities that are associated with the tokens. The POSA stated that the tokens should now be referred to as “liquid staking tokens,” and they advocated for this change as a direct result of the event that took place. Since the Ethereum Merge took place, there has been a perceptible increase in the number of people who are contemplating taking part in liquid staking. This boost in interest comes as a direct result of the Ethereum Merge.

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Digital Currency Group Suspends Payouts To Maintain Liquidity

by Blockchain News

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In an effort to maintain its existing level of liquidity, the venture capital company Digital Currency Group (DCG) has informed its shareholders that it would temporarily suspend the payment of its quarterly dividends until further notice.

In the letter that was sent to shareholders on January 17, the primary objective of the company is to improve the quality of our balance sheet by lowering operational expenditures and maintaining a sufficient level of liquidity.

DCG said that it was also mulling over the possibility of selling some of the assets included within its portfolio.

The company’s financial problems stem from the difficulties experienced by one of its subsidiaries, a cryptocurrency broker known as Genesis Global Trading. According to reports, Genesis Global Trading owes its creditors more than $3 billion.

Due to the fact that Genesis has disabled its customers’ ability to withdraw funds since November 16, Cameron Winklevoss, on behalf of his exchange Gemini and its users who have funds on Genesis, has written an open letter to the board of directors of DCG requesting that Barry Silbert be removed from his position as CEO of the company. The letter was published on January 10.

Winklevoss claims that Gemini is owed a total of $900 million by Genesis for money that were leased to Genesis as part of Gemini’s Earn program. This program gives clients the opportunity to earn an annual return of up to 7.4% on their investments. Winklevoss also said that DCG owed Genesis a total of $1.675 billion, although Silbert refuted this assertion.

Both companies were charged on January 12 by the United States Securities and Exchange Commission (SEC) for marketing unregistered securities via the Earn program. Winklevoss’s letter had only just been sent when the SEC threw gasoline on the flames by adding the charges.

The difficulties with Genesis were not discovered until after the withdrawal stop on November 16, which the company blamed on the extreme market instability that followed the collapse of FTX and was the cause of abnormally high amounts of withdrawals.

On November 10, less than a week earlier, Genesis disclosed that it had around $175 million stranded on FTX. As a direct consequence of this revelation, DCG sent Genesis an emergency equity injection of $140 million in an effort to remedy the company’s liquidity concerns.

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Bitcoin (BTC) $ 41,938.24 0.75%
Ethereum (ETH) $ 2,208.57 0.74%
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Bitcoin Cash (BCH) $ 239.98 1.74%