Monday, 6 June 2022

Market Summary

Market Summary 6 June 2022

Bitcoin Price: US$ 29,919.21  (+0.18%)
Ethereum Price: US$ 1,806.23 (+0.09%) 


South Korea ramps up crypto investigations and regulations

  • On Friday, South Korea’s Financial Supervisory Service (FSS) began an investigation into payment gateway services that work with digital assets. The FSS is South Korea’s financial regulator that operates under the Financial Services Commission (FSC), both of which are government institutions.
  • As reported by local news outlet Money Today Co., the FSS had recently demanded reports from 157 payment gateways about any service related to crypto, its plans for the future and disclosure of digital assets. But, an FSS report stated that only six held any digital assets.
  • Although the FSS is currently the primary financial regulator, on May 31, 2022, South Korea announced the upcoming launch of the Digital Assets Committee. According to the announcement, this is a temporary solution to bring structure to the virtual asset industry following the Terra crash.
  • Per the announcement, the guidelines include screening criteria for newly-listed assets, market monitoring, trade monitoring, a level of disclosure, and other investor protections. The five major exchanges in the country appear to agree on the standards and have formed their own committee to help prevent another incident similar to Terra.


CBDCs can “kill” private crypto: India’s RBI deputy governor to IMF

  • In discussion with the International Monetary Fund (IMF), T Rabi Sankar, the deputy governor of the Reserve Bank of India (RBI), reflected an anti-crypto stance as he spoke about India’s potential to disrupt the crypto and blockchain ecosystem. 
  • Rabi Sankar started the conversation by highlighting the success of the Unified Payments Interface (UPI), India’s in-house fiat-based peer-to-peer payments system, which has seen an average adoption and transaction growth of 160% per anum over the last five years.
  • “One of the reasons it is so successful is because it’s simple,” he added while comparing UPI’s growth with blockchain technology. According to Rabi Sankar:
  • “Blockchain, which was introduced six-eight years before UPI started, even today is being referred to as a potentially revolutionary technology. [Blockchain] use cases haven’t really been established that much at the speed it initially was hoped for.”
  • However, the RBI official confirmed that a large population in India still lacks access to UPI-based banking due to the unavailability of smartphones. To counter this, the Indian government is working on offline payment platforms, some of which have started rolling out to the masses.


Smart contracts can redesign legal agreements, but businesses beware

  • Contracts affect every organization’s workforce, and 26% of employees are involved in managing these agreements at some point, according to the World Commerce and Contracting Association. With such a vast effect on a company’s contributors, these contracts should be up to par with the rest of a business’s advancements. Unfortunately, contracts are still typically left to human maintenance and execution by either involved party, which can lead to some pretty costly oversight and error.
  • Blockchain-based smart contracts can revamp businesses and stakeholder relationships but, as with most major structural changes to a company, it’s important to do them right.
  • The current style of contracts is flawed and antiquated, but organizations have done little to change that. Poor contract management typically costs companies at least 9% of their bottom line, a consistent value leakage that can even reach a 40% loss, according to PwC. This revenue loss comes from incorrect data entry, unpaid accounts, client-management issues, incorrect reporting and discounting — essentially all caused by human error.
  • The fact that smart contracts can execute agreements without human action can be extremely helpful for businesses. But something that sounds too good to be true often is. That’s why companies must safely use smart contracts to enhance, rather than replace, traditional ones.


Finance Redefined: Maker founder proposes endgame, Singapore explores DeFi and more

  • MakerDAO co-founder Rune Christensen has issued a new monumental proposal to push the project into its final form called The Endgame Plan.
  • Across 3,000 words, including 35 detailed infographics, Christensen explained that the current model of governance at Maker creates a deadlock, making it difficult for the protocol to effectively process “complicated real-world financial deals” and compromising its competitiveness with financial institutions.
  • Central to Christensen’s Tuesday plan is the formation of MetaDAOs designed to tackle specific governance issues within the Maker ecosystem and alleviate congestion on the “slow and single threaded decision making process” that exists now. Each MetaDAO can be thought of as a subsection of MakerDAO, which would issue its own token and be governed by Maker participants interested in its particular goal.
  • The Monetary Authority of Singapore (MAS) has launched Project Guardian, a blockchain-based digital assets trial that will use tokenization. The project will include regulated financial institutions serving as “trust anchors,” with a pilot involving JP Morgan, DBS Bank and Marketnode, the SGX joint venture for bonds.
  • The Project Guardian initiative, which was announced during the Asia Tech x Singapore Summit on Tuesday, was spearheaded by Deputy Prime Minister and Coordinating Minister for Economic Policies Heng Swee Keat. It will see MAS explore DeFi applications in wholesale funding markets by establishing a liquidity pool of tokenized bonds and deposits to execute borrowing and lending on a public blockchain-based network.


WEF 2022: Miami mayor says that Bitcoin can be a global currency

  • Kristina Cornèr, Cointelegraph’s editor-in-chief, sat down with Miami Mayor Francis Suarez at the recent World Economic Forum held at Davos, Switzerland, to discuss topics like the role the mayor played at the WEF, Bitcoin being a global currency and what the mayor does with his BTC.
  • According to Suarez, his role at the WEF is different from what he did at the Bitcoin Miami event. At Davos, the mayor noted that he played an “evangelist role” where he’s teaching people about Bitcoin. He explained that he is trying to get people to understand that this technology is going to impact “the lives of many.” 
  • Apart from this, Suarez also discussed the potential of Bitcoin as a global currency. The mayor highlighted that Bitcoin presents various opportunities to democratize and even “disrupt socialist regimes.” Additionally, he said that Bitcoin “creates trust, which is what currency systems should be based on.” 
  • Suarez, who received some of his paychecks in Bitcoin, told Cornèr that he mostly hodls his Bitcoin. He underscored that he believes in the technology behind the crypto and thinks that he could give it to his children one day.


The crypto market dropped in May, but June has a silver lining

  • May 2022 was not for the faint-hearted. Even the most embattled and experienced crypto traders were tested in the first two weeks of the month on a brutal drop following the United States Federal Reserve’s announcement that interest rates would be rising by 0.5%.
  • Bitcoin could be reaching a bottom as sentiment hit its most negative levels since March 2020. The social dominance of BTC also gets smaller and smaller. Typically, three waves of diminished dominance of BTC is a clear sign that traders are no longer interested in buying a frustrating and unpredictable “dip.” And when traders lose interest, prices historically wake up.
  • There is good and bad news about May’s Bitcoin whale activity. The good news is the number of whale addresses holding 100–1,000 BTC has risen for about four straight months now, a trend that began seeing a turnaround in late January. Meanwhile, the bad news is the actual total amount held by these whale addresses still shows a long-term dump pattern dating back to late October, right before the all-time high.
  • A series of major spikes in Dai’s velocity was seen weeks after Ether’s mid-November all-time high but has been fairly dormant in recent months. As long as this metric remains at low levels, there’s no threat of an isolated dump for ETH compared to the rest of the cryptocurrency market.
  • On top of the low velocity on Dai, fees on the Ethereum network are approaching year lows. With so much stagnancy among many networks, this has caused the cost per transaction to decline.


Ropsten TTD Announcement (Ethereum)

  • Following the launch of the Ropsten Beacon Chain, core Ethereum developers have set a Terminal Total Difficulty (TTD) for the Merge to a value of 50000000000000000, a significant value that stakers and node operators must manually override in both their execution and consensus layer clients before Jun. 7, 2022. Due to volatile hash rates on Proof of Work testnets, the exact timing of the Merge on Ropsten is still ambiguous, but client teams estimate the transition to Proof of Stake to occur around Jun. 8 or Jun. 9, 2022. The team has reminded those who wish to participate in the Ropsten transition that execution layer clients must be synced before the activation difficulty. The syncing process could take several hours to days.

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