Friday, 8 October 2021

Market Summary

Market Summary 8 October 2021

Incentives Rule Everything Around Me: Multi-Chain Edition

  • After yesterday’s rally, BTC is having a breather as L1s take center stage again. Apart from L1s, DeFi is surprisingly the only other sector in the green. Top performers over the last 24 hours are FTM, SHIB, AR, and DOT.
  • Flows from Ethereum to Fantom averaged $10-25M per day over September. But over the last two days, flows to Fantom increased by an unprecedented amount on the back of a new yield farm.
  • Avalanche announced a $180M ecosystem-wide liquidity mining program, and successfully roped in a bunch of yield farmers after that news in August. Algorand announced a $300M fund for various incentives, with close to $200M of that directed towards farming incentives for DeFi projects. This approach proved successful for Polygon earlier this year, using MATIC incentives to attract liquidity on Aave and Sushiswap’s Polygon deployments.
  • Magic Internet Money, or MIM, is a new stablecoin from Abracadabra Money. The main idea behind the stablecoin was to tap into yield tokens, like Yearn’s yToken, and allow people to borrow stables against them. Yearn alone has over $5B in TVL, which meant there were a lot of idle yield tokens to loan against.
  • MIM is a cross-chain stablecoin with a bridge powered by AnySwap and deployments on multiple chains. Recently, the project conducted an airdrop and yield farm on Arbitrum to reward liquidity providers with their native governance token, SPELL. (For reference, SPELL: MIM is akin to MKR:DAI.)

 

Tether fires back against report it is using reserves for investments and making crypto-backed loans

  • Tether (USDT), the largest stablecoin issuer by market capitalization, has refuted the details of a Bloomberg story on its reserves holdings.
  • In a Thursday report, Bloomberg journalist Zeke Faux made numerous claims against Tether, including that its chief financial officer Giancarlo Devasini has used the company’s reserves to make investments, that seem to contradict Tether’s public position that the holdings were fully backed at all times. In addition, Faux alleges that Tether has invested in Chinese firms and issued crypto-backed loans “worth billions of dollars.” According to the report, he was only able to confirm one bank in the Bahamas was working directly with Tether.
  • “Tether still hasn’t disclosed where it’s keeping its money,” said Faux. “If Devasini is taking enough risk to earn even a 1% return on Tether’s entire reserves, that would give him and his partners a $690 million annual profit. But if those loans fail, even a small percentage of them, one Tether would become worth less than $1.”

 

El Salvador’s Heavy-Handed Bitcoin Adoption Violates ‘Crypto Ethos’: Blockchain.com Exec

  • Nicolas Cary, co-founder and vice chairman of Blockchain.com, today criticized El Salvador’s approach to Bitcoin as legal tender.
  • “I think there’s some valid criticisms of how the program is rolled out in El Salvador in terms of being top down. One of the main ethos of crypto is that there’s really grassroots adoption, and people are doing it voluntarily,” Cary said during the Token 2049 conference in London. 

 

SEC Approves ETF for ‘Bitcoin Revolution Companies’, Portfolio Includes Tesla and Twitter

  • As the crypto world awaits anxiously for the Securities and Exchange Commission to approve a Bitcoin ETF, the agency took another step in that direction by approving a fund called the “Volt Bitcoin Revolution ETF.”
  • Managed by San Francisco-based Volt Equity, the fund will provide retails investors with exposure to Bitcoin by creating a portfolio of “Bitcoin Revolution Companies” that hold a significant amount of the cryptocurrency on their balance sheets.
  • In its initial application filed in June, Volt said 25% of the fund’s assets would be made up of stock in MicroStrategy, a cyber-security company that has been buying large amounts of Bitcoin. But in an interview with Decrypt, Volt founder Tad Park said that percentage could be slightly lower when the fund, which will trade under the ticker symbol BTCR, is listed on the New York Stock Exchange in the next few weeks.

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