Autor Cointelegraph By Brayden Lindrea

Fidelity will ‘shift’ retail customers into crypto soon, says Galaxy CEO

Fidelity will ‘shift’ retail customers into crypto soon, says Galaxy CEO

Uverejnil používateľ | sep 13, 2022 |

$4.2 trillion asset management firm Fidelity Investments is reportedly working towards offering Bitcoin trading services to its 34.4 million retail investor base, according to Galaxy Digital CEO Mike Novogratz and people familiar with the matter. While Fidelity hasn’t officially confirmed plans to incorporate crypto onto its retail platform, Novogratz told a conference audience in New York on Sept. 12, that the move may be just around the corner:“A bird told me that Fidelity, a little bird in my ear, is going to shift their retail customers into crypto soon enough.”“I hope that bird is right. So we are still this institutional march and that gives crypto its floor,” he added.Novogratz isn’t the only person to have signaled the potential move from Fidelity. The Wall Street Journal (WSJ) on Sept. 12 noted that that Fidelity is currently “weighing a plan” to allow individual investors to trade Bitcoin on its brokerage platform. A similar note was shared by Eight Global Founder and CEO Michaël van de Poppe last week, suggesting that the platform will launch Bitcoin trading for retail customers in November. Fidelity in a Sept. 12 statement addressed the rumors, noting:”While we have nothing new to announce, expanding our offerings to enable broader access to digital assets remains an area of focus.”Fidelity Investment has been an active investor and playmaker in the crypto space, fueled by a growing demand from clients to access crypto investment opportunities. Fidelity started mining Bitcoin in 2015 and launched a Bitcoin-trading business for hedge funds and institutional investors in 2018.In April, Fidelity also began allowing its 401(k) retirement savings account holders to invest directly into Bitcoin (BTC), though this was later met with pushback from three U.S. senators including Senator Elizabeth Warren, who called the launch of the Bitcoin product to be “immensely troubling.”Related: Sen. Warren asks Fidelity to address the risks to put Bitcoin in 401(k)sFidelity is a multinational finance corporation that provides brokerage services, mutual funds management, investment advice, and retirement services and is the fourth largest asset management firm in the world, according to ADV ratings.

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Merge 'jitters' sees outflow from Ether-based investment products

Merge 'jitters' sees outflow from Ether-based investment products

Uverejnil používateľ | sep 13, 2022 |

Institutional investors may be wavering ahead of the Ethereum Merge, with digital asset investment products seeing an outflow of $61.6 million of Ether (ETH), signaling concerns about the success of the upgrade. In its digital asset fund flows weekly report, fund manager CoinShares reported that Ether-based investment products made up for the majority of total outflows over the Sept. 5-11 week — leading to the market’s fifth consecutive week of outflows.Report author James Butterfill said the outflows have come “despite the improved certainty of the Merge,” which could highlight a concern amongst investors that the “event might not go as planned,” referring to the upcoming Ethereum Merge set for Sept. 15. This is despite the likelihood of a successful Merge improving over the last week, with the Bellatrix upgrade passing through relatively unscathed on Sept. 6.84.6% of Ethereum nodes are now also “Merge ready”, according to Ethereum node data aggregator Ethernodes, which is up 15.1% from last week’s 73.5% “Merge ready” rate.Butterfill also noted that CoinShares has previously argued that there are unlikely to be any issues arising from the Ethereum upgrade as the technical specifications of the hard fork have been rigorously tested.Related: Institutional ETH sentiment turns positive after 11 weeks of outflowsMeanwhile, there is currently still no consensus on whether the Ethereum Merge has been factored into the ETH price, which currently sits at $1,688, and whether the Merge will be a “buy the rumor, sell the news” event.Polygon Chief Security Officer Mudit Gupta is of the view that the Ethereum Merge has been priced into ETH because the Merge itself is “public knowledge.”If it’s public knowledge, it’s already priced in.If it’s not public knowledge, it’s insider trading.Don’t get rekt trying to gamble — Mudit Gupta (@Mudit__Gupta) September 7, 2022On the other hand, a crypto researcher who goes by the name “punk4936” on Twitter believes that a 99% cut in ETH issuance and a 99.9% increase in energy efficiency following the Merge isn’t reflected in the current ETH price.Ethereum is about to get a 99% cut in issuance and a 99.9% cut in energy usage, the merge is not priced in— 4936 (@punk4936) September 7, 2022

The Ethereum Merge will see the network’s consensus mechanism transition from proof-of-work (PoW) to proof-of-stake (PoS), which is scheduled to take effect on Sept. 15 at about 3:20am UTC time, according to Blocknative.

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Crypto insurance a ‘sleeping giant’ with only 1% of investments covered

Crypto insurance a ‘sleeping giant’ with only 1% of investments covered

Uverejnil používateľ | sep 12, 2022 |

While on-chain insurance has been around since 2017, only a measly 1% of all crypto investments are actually covered by insurance, meaning the industry remains a “sleeping giant,” according to a crypto insurance executive.Speaking to Cointelegraph, Dan Thomson, the CMO of decentralized cover protocol InsurAce said there is a massive disparity between the total value locked (TVL) in crypto and decentralized finance (DeFi) protocols and the percentage of that TVL with insurance coverage: “DeFi insurance is a sleeping giant. With less than 1% of all crypto covered and less than 3% of DeFi, there’s a huge market opportunity still to be realized.”Though plenty of investment has poured into smart contract security audits, on-chain insurance serves as a viable solution for digital asset protection — such as when a smart contract is exploited or the frontend of a Web3 protocol is compromised. The collapse of Terra (LUNA) and the resulting depeg of Terra USD provides a textbook example of how on-chain insurance can protect investors, notes Thompson, adding that InsurAce “paid out $11.7 million to 155 affected UST victims.” “Hacks in 2021 in DeFi alone accounted for $2.6 billion in losses” amounting to $10 billion in the wider crypto space, and “we’re way past that in 2022 already,” Thomson added, emphasizing the need for on-chain insurance for digital assets. Discussing whether traditional insurance firms may eventually offer crypto-focused products, Thomson said while it has piqued the interest of traditional firms, they have not yet moved into the space “due to their own regulations and compliance,” adding: “I do not believe the larger traditional insurance companies will develop their own native apps for the space, but will prefer to offer a type of reinsurance as a way of getting exposure.”Thomson said that on-chain insurance protocols have also suffered some setbacks of their own however, noting that capacity has stalled the growth of on-chain insurance protocols:“Capacities are limited by underwriting [which is] something traditionally done with reinsurance but in DeFi it’s done by stakers and therefore limited by TVL [which makes it] hard for most protocols to build sufficient liquidity.”This problem is exacerbated by the fact that on-chain insurance providers struggle to offer capital providers with attractive investment returns, which in turn discourages liquidity provision, he said. Thomson said his firm is now looking to resolve this capital efficiency issue by utilizing reinsurance from traditional insurance firms as a means to “turbo-charge growth through the bear market,” adding: “To fix this we will be one of the first protocols able to bridge back to gain access to the traditional reinsurance to supplement our existing underwriting from staked assets.”Some cryptocurrency exchanges currently provide insurance services, but very few crypto-native protocols specialize in on-chain insurance.Related: The increasingly acute need for crypto-native insuranceOn-chain insurance services vary from protocol to protocol, but most protocols require users to specify the smart contract address they want coverage for, along with the amount, currency, and time period in order to generate a quote. Many protocols then use a decentralized autonomous organization (DAO) and a token to allow token holders to vote on the validity of claims. Among the other top on-chain insurance protocols include Nexus Mutual and inSure DeFi.

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Algorand Foundation outlines $35M exposure to crypto lender Hodlnaut

Algorand Foundation outlines $35M exposure to crypto lender Hodlnaut

Uverejnil používateľ | sep 12, 2022 |

The Algorand Foundation has revealed a $35 million USDC hole in its balance sheet as a result of exposure to embattled cryptocurrency lending firm Hodlnaut, which has paused withdraws since Aug. 8. Algorand is an institutional-grade blockchain infrastructure with embedded smart contract functionality. The Algorand Foundation is a not-for-profit community organization focused on developing the Algorand ecosystem.The announcement was made on the Algorand Foundation website on Sept. 9, with the Foundation stating that it’s “pursuing all legal remedies to maximize asset recovery.” Hodlnaut’s financial situation first fell into deep waters when its $300 million investment into TerraUSD (UST) on the Anchor protocol fell dramatically following the de-pegging of UST and collapse of the LUNA token, resulting in the crypto lending firm pausing withdrawals and halting all trading activity, citing a liquidity crisis. Weeks later, the firm was placed under interim judicial management, a form of creditor protection program, by the Singapore court. Today we informed the community about our USDC exposure to Hodlnaut after they suspended withdrawals from their platform on August 8, 2022.The full details can be found here: https://t.co/4pLkSiKW7b— Algorand Foundation (@AlgoFoundation) September 9, 2022The Algorand Foundation said the majority of the investment locked on the platform consisted of “locked, short term deposits,” but are now inaccessible due to Holdnaut’s suspension of withdrawals.However, the Algorand Foundation notes that the $35 million represents less than 3% of the Foundation’s assets and they “do not anticipate [any arising] operational or liquidity issues,” and added that the “funds were a surplus to day-to-day requirements”:“We invest a portion of our surplus treasury capital to generate yield for the purpose of Algorand ecosystem development, and these funds were invested for that purpose.”Embattled crypto lender Hodlnaut is now subject to an Interim Judicial Management to resolve its liquidity issues. Related: 3AC: A $10B hedge fund gone bust with founders on the runUnder Singaporean jurisdiction, corporate entities are placed under Interim Judicial Management for debt restructuring purposes in order to preserve and protect assets at risk prior to onset of legal proceedings.The Algorand Foundation has played a key role, noting that on Aug. 29, the Singapore High Court appointed the Foundation’s nominees Angela Ee along with Aaron Loh of EY Corporate Advisors to act as the Interim Judicial Managers for Hodlnaut, aimed at preserving Hodlnaut’s asset until further court action begins.

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Ethereum Merge makes network more vulnerable to attack — Security expert

Ethereum Merge makes network more vulnerable to attack — Security expert

Uverejnil používateľ | sep 12, 2022 |

Despite the Ethereum Merge being touted as a major upgrade to the blockchain network, its transition to proof-of-stake theoretically makes it more vulnerable to exploit.Speaking to Cointelegraph, the security researcher explained that unlike proof-of-work (PoW) systems, a proof-of-stake (PoS) system informs node validators in advance what blocks they will validate, thus enabling them to plan attacks. The security expert, who asked not to be named, is a blockchain developer and security researcher working on a proof-of-stake layer-2 blockchain. The researcher explained that an exploit could theoretically occur on the post-Merge Ethereum blockchain if validators manage to line up two consecutive blocks to validate. “If you control two consecutive blocks, you can start an exploit on block N and finish it on block N+1 without having any arbitrage bot coming in and fixing the price that you have manipulated in between.”“From an economic security standpoint, [this vulnerability] makes these attacks relatively easier to pull off.”The expert said that while it’s also possible for miners to validate consecutive blocks in PoW networks — that comes down to “pure luck” and gives the miner no time to plan an attack. As a result, the security researcher argues that Ethereum will be forgoing some strength in security when the Merge takes effect:“As we stand right now [with] the Ethereum proof-of-work versus Ethereum proof-of-stake, Ethereum proof-of-work does have stronger security […] and economic guarantees.”“But that being said […] proof-of-stake [still] has sufficient practical security [and] it doesn’t really matter that it’s theoretically not as secure as proof-of-work. It’s still a very secure system,” he added.Related: Buterin and Armstrong reflect on proof-of-stake shift as Ethereum Merge nearsThe security expert added that “Ethereum is working on fixing [the consecutive block issue]. It is a hard problem to solve, but if that gets done, then proof-of-stake security will [further] increase [as] they’ll have protection against those attack vectors.”Ethereum validators are subject to slashing in PoS, as the consensus rules were designed to economically incentivize validators to correctly validate incoming transactions and any conduct to the contrary would see their ETH stake slashed. The Ethereum Merge is finally set to take place on Sept. 15 at about 2:30am UTC, according to Blocknative’s Ethereum Merge Countdown. The transition to PoS is set to make the Ethereum network more scalable and energy-efficient.

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