Monday, 10 January 2022

Market Summary

Market Summary 10 January 2022

Bitcoin Price: U$41,851.22 (+0.39%)
Ethereum Price: U$3,150.00 (+2.27%)

 

Yield Strats #40 – DEXs on ETH L2 and Vaults on Polygon

  • Tethys Finance is a decentralized exchange built on on Metis Andromeda, an Ethereum L2, which was forked from Optimism and launched in November. Tethys recently formed a partnership with Metis, receiving a grant through the Metis Ecosystem Development Program.
  • Netswap is another DEX built on Metis Andromeda’s Layer 2 that recently announced their liquidity mining program. The liquidity mining program is a fair launch – distributing 99% of NETT tokens to the community. No NETT tokens are allocated to the team, investors, advisors or anyone else. Netswap is entirely community-driven and community-owned.
  • Tetu is an asset management protocol committed to creating an innovative yield management solution. TETU is a fair launch protocol, distributing tokens via yield farming since launch.

 

The Aftermath of a Bloody Week

  • The first week of 2022 has not been kind to BTC or the broader crypto market with prices of the former down over 10% from the yearly open. 
  • After a relative slow start to the year, BTC dropped more than 10% over the last two trading sessions, so what happened? For starters, we saw a significant series of cascading liquidations; this certainly helped exacerbate this week’s price action.
  • Many people have also noted the apparent ‘heavy sell wall’ stacked on the FTX: BTC-PERP pair starting on January 3rd, extended and presumably filled on January 4th. Remember; these orders are passive limit orders and are just ‘price advertisements’.
  • Level 1 at around $45.5K was the first price level of interest. As shown, price revisited this region quite a few times in the last month since the December 4th crash. If price was to breach this level with significant volume and momentum, we would expect the start of stop loss runs and liquidations as everyone who didn’t catch the $42K BTC wick is now underwater.
  • Our next level of interest was right around $43-43.2K, Level 2. Price attempted to find solid ground here for about a day on December 6th, before continuing lower on the 7th.
  • Our third level of interest is currently being defended, at $41-41.2K. This area is a likely place for stop losses to be placed at the lows of the December 4th wick, as well as a likely place for buyers to start emerging to defend the 40K psychological level.
  • Our 4th level of interest coincides with many of the stacked bid levels we’ve discussed earlier, in the $39.5K region.
  • If price continues down through these levels and approaches Level 5 at $37.5-38K, we can expect some kind of reaction in this area as buyers defend the summer structure highs.

 

Pakistan to investigate Binance for multi-million dollar crypto scam

  • Pakistan‘s Federal Investigation Agency (FIA) reportedly issued a formal notice to crypto exchange Binance in an effort to identify links around a multi-million crypto scam in the region. 
  • The government of Pakistan started a criminal investigation after receiving numerous complaints against an ongoing scam that involved misleading investors into sending funds from Binance wallets to unknown third-party wallets. According to local coverage, the FIA’s Cyber Crime Wing has issued an order of attendance to Binance Pakistan’s general manager Hamza Khan to identify the exchange’s link to “fraudulent online investment mobile applications.”

 

LCX loses $6.8M in a hot wallet compromise over Ethereum blockchain

  • Liechtenstein-based crypto exchange LCX has confirmed the compromise of one of its hot wallets after temporarily suspending all deposits and withdrawals on the platform. 
  • The hack was first identified by PeckShield, a blockchain security company, based on the suspicious transfer of ERC-20 tokens from LXC to an unknown Ethereum wallet.
  • The probable hot wallet compromise was soon confirmed by the exchange as it announced the loss of numerous tokens including Ether (ETH), USD Coin (USDC) and other tokens including its in-house LCX token.

 

PayPal confirms that it is ‘exploring’ a stablecoin

  • PayPal has confirmed that it is “exploring” a stablecoin backed by US dollars.
  • The Block first reported on this process last May. At the time, The Block’s sources said that the payments giant was holding talks with third-party startups in the crypto space as part of this process.
  • A spokesperson had said that the firm was exploring applications of digital currency as part of its offerings but “rumors and speculation are not predictive of the company’s future plans.”

 

Will this time be different? Bitcoin eyes drop to $35K as BTC price paints ‘death cross’

  • Bitcoin (BTC) formed a trading pattern on Jan. 8 that is widely watched by traditional chartists for its ability to anticipate further losses.
  • In detail, the cryptocurrency’s 50-day exponential moving average (50-day EMA) fell below its 200-day exponential moving average (200-day EMA), forming a so-called “death cross.” The pattern appeared as Bitcoin underwent a rough ride in the previous two months, falling over 40% from its record high of $69,000.
  • Bitcoin‘s latest decline reflected growing investor concern about the Fed‘s decision to aggressively unwind its loose monetary policies — including the dialing back of its $120 billion a month asset purchasing program followed by three rate hikes — in 2022.
  • Typically, rising interest rates make holding volatile assets like Bitcoin less appealing than government bonds, which offer guaranteed yields.
  • “This is proof that bitcoin acts like a risk asset,” Noelle Acheson, head of market insights at crypto lender Genesis Global Trading, told the Wall Street Journal, adding that the short-term holders would be the “closest to the exit.”

 

Ava Labs and EV maker Togg to build smart contract-based mobility services

  • Turkey’s electronic vehicle (EV) manufacturer Togg has announced a strategic partnership with Ava Labs to design and build smart contract-based services aimed at improving autonomous mobility. 
  • Togg’s collaboration with Ava Labs, a team dedicated to supporting and developing the Avalanche public blockchain, was revealed at the CES 2022 event in Las Vegas. As Cointelegraph Turkey reported, the partnership aims to fast-track Togg’s Use-Case Mobility initiative, which combines different technologies and transportation solutions to produce cars with more functionalities as compared with traditional EVs.
  • According to the official announcement, Togg has been exploring use-cases around blockchain and related technologies in EVs for more than a year. With Ava Labs’ partnership, Togg intends to infuse Internet of things (IoT) and machine-to-machine (M2M) communication to expand and accelerate its EV capabilities.

 

Pantera’s Bitcoin Feeder Fund reaches $63.7 million in funding

  • Pantera Capital, an American hedge fund that manages over $6.4 billion in blockchain-related assets, has now reached $63.7 million in funding from 153 investors for its Bitcoin Feeder Fund, a Securities and Exchange Commission (SEC) filing shows. 
  • Through the Bitcoin Feeder Fund, investors can indirectly partake in Pantera’s Bitcoin Fund — a passive bitcoin tracker that gives investors daily equity without the need to buy and safeguard the cryptocurrency. The Bitcoin Feeder Fund had $18 million and 56 investors this last year, CoinDesk reports. 

 

CoinDesk formally joins Tether Freedom of Information case in New York, Tether responds

  • CoinDesk has formally joined the legal proceedings between Tether and the New York Attorney General in a case centering on the release of company documents to the news outlet.
  • The conflict dates back to June of last year, when CoinDesk filed a Freedom of Information Law request, or FOIL, in New York requesting documents detailing Tether’s reserve breakdown, which the stablecoin issuer and its parent company iFinex provided to the NYAG as part of a settlement agreement in February. New York’s Freedom of Information Law allows members of the public to submit requests for access to government records, including court documents.
  • The NYAG FOIL officer denied the request after a push from Tether’s attorneys. However, CoinDesk won access on an appeal.
  • Tether then attempted to block CoinDesk’s access to the documents it requested by asking a New York court to compel the state attorney general to deny the request on the grounds that the information would compromise its competitive edge. 

 

Vitalik Buterin gives thumbs down to cross-chain applications

  • In a Reddit post on Friday, Vitalik Buterin, the co-founder of Ethereum (ETH), outlined critical security concerns surrounding cross-chain bridges in the blockchain ecosystem. As told by Buterin, storing native assets directly-chain (Ethereum on Ethereum, Solana on Solana, etc.) provides a certain degree of immunity against 51% attacks. Even if hackers manage to censor or reverse transactions, they cannot propose blocks to take away one’s crypto.
  • The rule also applies to the Ethereum application. For example, if hackers launch a 51% attack (by controlling 51% of all circulating ETH supply) while an investor swaps 100 ETH for 320,000 DAI stablecoin, the end state remains invariant, i.e., the investor would always get either 100 ETH or 320,000 DAI.
  • However, Buterin continued, that the same level of security does not apply to cross-chain bridges. In the example he raised, if an attacker deposited their own ETH onto a Solana (SOL) bridge to obtain Solana-wrapped Ether (WETH) and then reverted that transaction on the Ethereum side as soon as the Solana side confirmed it, it would incur devastating losses on other users whose tokens are locked in the SOL-WETH contract, as the wrapped tokens are no longer backed by the original on a 1:1 ratio.
  • Buterin further outlined how the security exploit could scale negatively as more bridges are added into a cross-chain network. In a theoretical network comprising 100 chains, the high level of interdepency and overlapping derivatives would mean that a 51% attack on one chain, especially a small-cap one, can cause a system-wide contagion. According to Crypto 51, it costs as much as $1.78 million an hour for hackers to mount a 51% attack vector against the Ethereum network. However, the cost drops to as little as $13,846 per hour for blockchains such as Bitcoin Cash.

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