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Friday Metrics Watch #13; FB Crypto, India ban, Apple crypto kit

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Satoshi&Co Daily Crypto Newsletter

June 7 · Issue #191 · View online
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Check out past issues of the newsletter along with more interesting crypto content as well as short (but great) conversations with leading crypto industry participants at our newly-launched website www.satoshiand.co

Picking out three key events from the crypto world this week;
Firstly, Facebook’s crypto efforts which we have covered here and here, most recently.
Pros - It is going to generate awareness for crypto among the wider masses, the ‘99%’ that really couldn’t care less about crypto or decentralization or sound money or whatever, but would love any sort of freebies, or loyalty coins or anything indeed that a network like FB could distribute, propagate, or ‘airdrop’ at scale. The hope is that they get a taste of crypto through FB and then acquire a taste for the better, real stuff. Or something like that.
Cons - There are a bunch of issues. FB crypto - whether it is Globalcoin or Zuck Bucks or whatever it is called, is not really a cryptocurrency in the conventional sense. In spite of FB’s structuring a foundation to launch this, albeit with a 10m entry fee for a ‘node’, from what we know currently, it is at best something like a DPoS-based EOS (Distributed Proof-of-Stake). Also, as we discussed yesterday, for most folks convenience and UI/UX trumps everything else.
The real issue here is the stranglehold that FB could potentially have on a few different businesses - depending on how it plans to deploy its crypto currency. If used as a remittance platform over Whatsapp or FB messenger, it will literally be a cross-border Venmo or Paytm, and will immediately disrupt the payments industry. It will easily become the largest stablecoin, displacing pretty much every other stablecoin, including USDTether. Given that it already has a network, and does not really need to expend too much time and effort, network effects would kick in, folks could use it to buy and sell stuff, in the real world and within apps and for micro-services, and it would not be considered a security under the Howey test lodestone that the US SEC uses in such cases. If it just wants to reward users for liking, commenting, posting etc using this as well, driving catatonic behaviour across an already social-media saturated swathe of global population, while it would be sheer evil, it would still be perfectly legal, and it would literally win the social network war for good, potentially for a very very long time. And for those that are concerned about privacy, decentralization and all that ethical stuff, they will just be tilting at windmills for a while in such a scenario, at least until the real costs of being participants in such a system start to bite, and offset any potential gains from holding FB’s crypto.
Opportunities emerge for traders - there is definitely going to be arbitrage opportunities with FB crypto, depending on whether it is a plain old utility token or if it is a stablecoin. Or FB might even decide that it does not even need an exchange and just enable p2p transfer through its various platforms. Or it might even set up its own proprietary exchange or storefront where folks could buy/sell/trade-in FB crypto. Such an exchange would probably dwarf Coinbase, for sure.
Secondly, the news item that started doing the rounds Friday around India’s proposed crypto ban. The article, attributed to Bloomberg Quint, suggested some draconian measures, including jail time of up to 10 years and other heavy monetary penalties, for a range of activities, including buying, selling, holding, mining or in any other way dealing in crypto. It set up the local crypto channels abuzz on various media, and by evening, another news item appeared where the RBI, the Indian Central bank, declared that it knew nothing about such a proposal.
The cynical view here could be that this is just some clickbait/growth hacking from a wet-behind-the-ears journalist, eager to drive some traffic to a media paywall. The real conspiracy theory here is that this could be a ploy by Facebook, which actually had plans to launch its cryptocurrency first in India, to create some FUD around traditional crypto ( traditional crypto!), and prime the unsuspecting faithful to the FB coins that it will soon dispense in a week or so through a slick interface without any of the hassles of metamask or exchange KYCs or hardware wallets for instance!
As expected, that wise old purveyor of calm and reason, John McAfee, summed it up in his inimitable style..
Thirdly, the Apple crypto kit. This is a great step for developers, as it opens up iOS and its secure environment, combined with its seamless UI/UX to a range of crypto development efforts. This could be the boost that the DApp ecosystem needs, paradoxically.
As the Chinese proverb goes, may we live in interesting times!
And now, on to our weekly metrics watch…
Ethereum Locked in DeFi
MakerDAO still accounts for a lion’s share of ETH locked up in collateral, with more than 1.64 million of ETH locked up. Uniswap showed a strong w/w growth of 13% in ETH locked up, while dYdX and Augur have seen moderate growth. ETH locked up in Maker was flat w/w.
Source: defipulse.com
Source: defipulse.com
Lightning Network Growth:
Capacity per channel showed a moderate decline of 3% w/w. The total number of nodes also increased w/w by 1%, while the total number of channels decreased by 3%.
Thirdly, the Apple crypto kit. This is a great step for developers, as it opens up iOS and its secure environment, combined with its seamless UI/UX to a range of crypto development efforts. This could be the boost that the DApp ecosystem needs, paradoxically.
As the Chinese proverb goes, may we live in interesting times!
And now, on to our weekly metrics watch…
Ethereum Locked in DeFi
MakerDAO still accounts for a lion’s share of ETH locked up in collateral, with about 1.76 million of ETH locked up. Uniswap, Compound and Augur showed w/w increases, but Maker showed a decline of 7% w/w.
Source: 1ml.com
Source: 1ml.com
(For reference, some previous articles on LN, here).
DEX Tracker:
Trading volumes on DEXs have increased on a w/w basis, with the average daily trading volume averaging 35k ETH for this week. IDEX remains the biggest DEX in terms of trading volume and DAI is the highest traded cryptocurrency on DEXs.
Source: dex.watch
Source: dex.watch
(For reference, some previous articles on DEXs, here and here).
Crypto Loans Tracker:
Compound Loans:
Total loans issued on Compound for the last week stands at approx. $845k for the week, a steep decrease from $4.2 million in the previous week. WETH is the most borrowed cryptocurrency on Compound followed by DAI and BAT.
Source: loanscan.io
Source: loanscan.io
Dharma Loans:
Total loans issued on Dharma Lever for the last week stands at approx. $114k for the week, a alight decline from the previous week. DAI is the most borrowed cryptocurrency on Compound followed by WETH and USDC.
Source: loanscan.io
Source: loanscan.io
MakerDAO Loans:
DAI loans issued on MakerDAO for this week stand at ~$4.7 million, a meaningful decrease from $6.1 million last week. The total outstanding DAI debt currently stands at ~$83 million.
Source: loanscan.io
Source: loanscan.io
(For reference, some previous articles on MakerDao, here and here).
You can also check out last week’s Metrics Watch here.
Meanwhile in Crypto Wonderland....
“NEO’s Consensus Protocol Upgraded”
Often referred to as “Chinese Ethereum,” the company has been making moves in 2019 to increase its global footprint. NEO recently opened a U.S. office―NEO Global Development Seazttle, led by former Microsoft executive John deVadoss―and hosted its second developer conference in the same city. Part of the process of readying the NEO blockchain for version 3.0 involved updating its Byzantine Fault Tolerance (dBFT) consensus mechanism. The upgrade to 2.0 makes the algorithm more resistant to disruptions and node failures, said a representative from NEO.
“Indian Central Bank Denies Any Knowledge Of The Crypto Draft”
The Reserve Bank of India is denying any knowledge of a proposed ban on cryptocurrencies — despite reports that a number of governmental agencies have backed the draft legislation — according to a Right to Information request filed on June 4. Varun Sethi, a lawyer specializing in blockchain, filed the inquiry into the RBI’s involvement with “Banning of Cryptocurrencies and Regulation of Official Digital Currencies Bill 2019″ draft, following a report from the Economic Times. The legislation would ban the sale, purchase, and issuance of all types of cryptocurrencies. Bank officials said that the RBI was not in communication with governmental agencies during the legislative process and had not received a copy of the bill.
“CME Trading Volumes Seeing an Uptick”
CME Group announced that its bitcoin futures product had its best month since the product first launched in late 2017, hitting fresh highs in both volume and open interest in May. Average daily volume within the month finished at more than 13,600 contracts, or ~$515 million in notional USD traded value, up 36% since April and over 250% year-over-year. Open interest, or the number of contracts left unsettled, also saw all time highs of 4,602 total contracts, up 80% since last May 2018. The derivatives exchange also stated that the bitcoin product added 223 new trading accounts in May, the most its seen since January 2018, and a sign that institutional interest has indeed picked up.
“Facebook’s Crypto To Be Pegged To Multiple Currencies”
Facebook  is finally ready to reveal details about its cryptocurrency codenamed Libra. It’s currently scheduled for a June 18th release of a white paper explaining its cryptocurrency’s basics, according to a source who says multiple investors briefed on the project by Facebook were told that date. Meanwhile, the company’s Head of Financial Services & Payment Partnerships for Northern Europe Laura McCracken told German magazine WirtschaftsWoche‘s Sebastian Kirsch that the white paper would debut June 18th, and that the cryptocurrency would indeed be pegged to a basket of currencies rather than a single one like the US dollar to prevent price fluctuations.
Crypto Twitter Pick
Brendan Bernstein
This is nonsense

People need to stop waxing pseudo-intellectually about SoV vs MoE. Satoshi designed BTC to be money. Money is both

A SoV is just a MoE in the future. It needs to become a MoE to be liquid

And the only way for a MoE to not hyper-inflate is if it's a SOV *first* https://t.co/pz6DCmdGmN
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