Autor Cointelegraph By Luke Huigsloot

Binance CEO shares 'two big lessons' after FTX's liquidity crunch

Binance CEO shares 'two big lessons' after FTX's liquidity crunch

Uverejnil používateľ | nov 9, 2022 |

Binance CEO Changpeng “CZ” Zhao has shared his take on “two big lessons” to be learned from the FTX saga, saying cryptocurrency firms shouldn’t use their own tokens as collateral and should also keep “large reserves.”In a Nov. 8 tweet, Zhao laid out two learnings after the significant “liquidity crunch” at FTX which has ultimately resulted in a non-binding letter of intent from Binance to acquire the struggling exchange.Two big lessons: 1: Never use a token you created as collateral. 2: Don’t borrow if you run a crypto business. Don’t use capital “efficiently”. Have a large reserve.Binance has never used BNB for collateral, and we have never taken on debt.Stay #SAFU.— CZ Binance (@cz_binance) November 8, 2022Zhao shared that his first lesson is to ensure a firm’s collateral should not consist of a token that it has created, and claims his exchange’s token — Binance Coin (BNB) — has never been used as collateral for its services.FTX’s liquidity issues appeared to have come after a Nov. 6 tweet from Zhao saying Binance would be liquidating its holdings of FTX token (FTT) following “recent revelations” related to reported ties between FTX and the trading firm Alameda Research showing the firm had significant FTT holdings.While Binance does not currently disclose proof of what reserves it uses as collateral, Zhao mentioned in a Nov. 8 tweet that in an effort to be fully transparent Binance will soon provide proof of reserves, adding: “Banks run on fractional reserves. Crypto exchanges should not.”Zhao’s second lesson from the downfall of FTX is that crypto businesses shouldn’t be borrowing, and instead should opt to maintain large reserves — which could be in reference to FTX users complaining of sluggish withdrawals on Nov. 7, sparking rumors the exchange didn’t have enough to cover user funds.Related: Bitcoin price hits 2-week lows as FTX ‘bank run’ drains BTC reservesZhao’s tweet confirming Binance’s FTT holdings liquidation ended up triggering what some called a “bank-run” on the exchange, with analytics platform CryptoQuant data revealing that FTX’s Bitcoin (BTC) balance had fallen by 19,956 on Nov. 7 alone. At the time of writing, FTT is down 75% in the last 24 hours, with the last price around $5.70 at the time of writing compared to its opening price of $22.14.

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NFTs still in ‘great demand’ as unique traders rise 18% in Oct: DappRadar

NFTs still in ‘great demand’ as unique traders rise 18% in Oct: DappRadar

Uverejnil používateľ | nov 4, 2022 |

October may have seen a decline in nonfungible token (NFT) trading volume and sales, but analytics firm DappRadar says an 18% growth in monthly unique NFT traders shows the market is still in “great demand.”According to a Nov. 3 report from DappRadar, the number of monthly unique NFT traders in October reached 1.11 million, increasing 18% from September, of approximately 950,000. This is despite trading volumes falling 30% to $662 million in October, the lowest registered in 2022, while the sales count decreased by 30% to 6.13 million, the firm said, adding: “The rise in the unique traders’ count indicates that new people are entering the NFT market, and it is still in great demand.”Number of monthly unique NFT traders (millions). Source: DappRadarThe month was a busy one for the NFT community. At least two more NFT marketplaces shift to an optional royalty model, including Solana-based Magic Eden and Ethereum-based LooksRare.The report also highlighted that Yuga Labs has continued to dominate the NFT market, with seven of the top ten sales for the month coming from CryptoPunk and Bored Ape Yacht Club.Of these sales, CryptoPunk#924 was the most valuable, selling for a whopping 475 ETH on Oct. 27, which is valued at $731,435 at the time of writing.Meanwhile, Ethereum’s NFT trading volume continued to decline for the second straight quarter, falling 21% over the last month to $324 million, which represents the lowest volume registered by DappRadar since June 2021. In brighter news, Polygon’s NFT trading volume has spiked 770% over the last month, driven by the success of the Reddit NFT collections as the main driver behind the surge, according to Dappradar. Since their launch in July, more than 2.9 million Reddit avatars have been minted which have found their way into more than 2.8 million wallets, with Dune analytics data suggesting October finished with the collection having a sales volume of $10.1 million.The trading volume seems likely to continue increasing for the layer-2 solution over the next month, with Meta announcing on Nov. 2 that Polygon would be its initial partner for its upcoming NFT tools.Related: NFTs bridge music communities across genres and blockchain ecosystemsThe report also mentioned that Dogecoin had been the best-performing token of the month, closing the month 50% higher than when it began and citing Elon Musk’s Twitter takeover and the announcement of Dogechain’s future roadmap as the drivers.It also highlighted an increase in the average number of unique active wallets, up 6.84% from the previous month. DappRadar pointed to staking provider Lido being incorporated within Arbitrum and Optimism as well as a partnership between the NEAR Foundation and Google Cloud as the drivers for this increase.

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Coinbase transaction revenues plummet 44% as users activity declines in Q3

Coinbase transaction revenues plummet 44% as users activity declines in Q3

Uverejnil používateľ | nov 4, 2022 |

Crypto exchange Coinbase saw a huge fall in its transaction revenues in the third quarter after activity fell amid a broader market downturn, but managed to cut its losses in half compared to the prior quarter.In its shareholder letter released Nov. 3, the company shared that transaction reven had fallen from $655.2 million in the second quarter to $365.9 million, representing a decline of 44%.The company cited poor macro conditions with daily average crypto market capitalization falling 30% and trading volumes shifting away from the United States due to the lack of regulatory clarity as reasons for the decline. It also blamed the numbers on an increasing amount of retail customers holding, while advanced traders have been using other platforms with more complex products amid the bear market. Despite the ailing numbers, Coinbase CEO and co-founder Brian Armstrong appeared bullish during the Q3 earnings call, commenting that the regulatory environment could be one of the “biggest unlocks” to growing the industry and even allow for “prices to go back up.”“I think there’s an opportunity at some point for the crypto prices to potentially decouple from the broader macro environment. And we don’t know if that’s gonna happen, but I think it’s one of the possibilities and regulatory clarity is one of the things that could help kick that off.”During the earnings call, Coinbase’s Chief Financial Officer Alesia Haas was also asked whether positive earnings could be expected in the final quarter.Haas responded by saying that it wasn’t their primary focus, and they are looking to continue investing for growth throughout the cycle while minimizing losses, adding:“When we’re in bull runs we’re going to make profit, when we’re in downturns we’re going to take prudent losses.”Coinbase appears to have been successful in that aim, with the latest earnings report showing that they have managed to reduce operating expenses by 38% from the previous quarter through staff cuts and other measures.Related: Ripple’s allies expand: Coinbase files amicus brief in fight against SECOverall, Coinbase reported Q3 revenue of $576.4 million, decreasing 28% from Q2, while its net loss was reduced by 50% to $544.6 million. Coinbase noted that the fall in revenue was partially offset by an increase in subscription and services revenue — which come from its staking and custody services and interest income — which grew 43% compared to the previous quarter. Coinbase shares (COIN) have fallen by over 8% over the days trading, with the firm’s revenue for the quarter coming in below Bloomberg expectations of $649.2 million.

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MiCA bill contains a clear warning for crypto influencers

MiCA bill contains a clear warning for crypto influencers

Uverejnil používateľ | nov 3, 2022 |

The European Union (EU) bill aiming to regulate cryptocurrencies could result in crypto influencers being charged with market manipulation if they fail to disclose potential conflicts of interest.The Markets in Crypto Assets (MiCA) bill, which has been approved by the European Parliament Committee on Economic and Monetary Affairs on Oct. 10, is expected to be legislated after a few more hurdles.Patrick Hansen, stablecoin issuer Circle’s director of EU strategy and policy, has been closely following the passage of the bill and brought attention to a section in a Nov. 1 tweet that referred to public comments made without proper disclosure.Crypto influencers beware: Commenting on crypto assets in (social) media without disclosure and profiting from the effects of that will be considered market manipulation in the EU once MiCA is in force.@zachxbt pic.twitter.com/BflVXPazjS— Patrick Hansen (@paddi_hansen) November 1, 2022The section Hansen highlighted reads that voicing opinions on crypto-assets after taking out positions on them, and not disclosing that conflict of interest effectively, could be regarded as market manipulation.The section is part of measures included within the MiCA bill aiming to “prevent insider dealing, unlawful disclosure of inside information and market manipulation related to crypto-assets, in order to ensure the integrity of crypto-asset markets.”Related: Saying ‘not financial advice’ won’t keep you out of jail: Crypto lawyersThe passage has gained some interest from the crypto community, and a related post on Reddit’s cryptocurrency subreddit suggests the community is supportive, with the thread’s top comment stating:“Shilling certain projects and never taking responsibility for the losses they inflict upon people. It’s about time those influencers get what they deserve.”Whilst MiCA is unlikely to be fully applicable until 2024, it seems very likely to pass, with Hansen even referring to it as a “pure formality” following the finalization of the text on Oct. 5.7/ Afterward, the final texts will be voted once more – a pure formality at this point – in the Parliament’s ECON committee, the Council, and finally in the Parliament’s plenary. Based on similar financial legislation, this could happen between Dec 22 – Jan 23.— Patrick Hansen (@paddi_hansen) August 6, 2022

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Arbitrum transaction activity rockets 550% since August: Delphi Digital

Arbitrum transaction activity rockets 550% since August: Delphi Digital

Uverejnil používateľ | nov 3, 2022 |

Ethereum layer-2 scaling solution Arbitrum has seen a massive surge in activity since its Nitro update in August, having just clocked around 62% as many transactions as the Ethereum base layer.In a Nov. 1 report, crypto research firm Delphi Digital noted that as of the week ended Oct. 24, Arbitrum’s number of total transactions has increased by 550% since August, citing data from Dune Analytics.This week, @arbitrum had ~62% as many transactions as Ethereum L1. pic.twitter.com/DyuDNAjRGz— Delphi Digital (@Delphi_Digital) November 3, 2022In an earlier Tweet, Delphi Digital initially phrased Arbitrum as accounting for 62% of all transactions on Ethereum, which they later clarified was “incorrect phrasing”. Arbitrum is an optimistic roll-up built by blockchain development firm Offchain Labs, aimed at scaling Ethereum smart contracts. It uses Optimistic Rollup technology to bundle large batches of transactions off-chain from Ethereum smart contracts and decentralized applications before submitting them to Ethereum.A number of well-known protocols use Arbitrum, such as decentralized exchanges SushiSwap, Uniswap and GMX, lending protocol Aave and liquidity transport protocol Stargate. According to L2Beat, at the time of writing it has a current total-value-locked (TVL) of $2.59 billion. Delphi analysts noted that weekly active users had spiked on Arbitrum, having grown 125% since Oct. 10 to reach a new high of 282,000 in the week ending Oct. 24.The analysts also suggest that much of the surge in activity is likely driven by speculators trying to boost their on-chain activity in the hope of receiving a larger airdrop for a native token which has been hinted at by Offchain Labs co-founder Steven Goldfeder.On Aug. 31 the Arbitrum One mainnet upgraded to Nitro, which Offchain Labs claimed in an Apr. 7 post would result in reduced transaction costs while increasing network capacity, adding:“While Arbitrum today is already 90–95% cheaper than Ethereum on average, Nitro cuts our costs even further.”Related: White hat finds huge vulnerability in Ethereum–Arbitrum bridge: Wen max bounty?The low fees have resulted in various players from within the crypto ecosystem wanting to integrate with Arbitrum One, and on Nov. 1 decentralized finance (DeFi) optimization tool Furocombo, capital raising protocol Aelin, and insurance protocol Y2K Finance each announced they were live on the popular scaling solution. On Oct. 13 Offchain Labs announced they had acquired one of the core development teams behind the Ethereum Merge, Prysmatic Labs, which it hopes will enable greater communication and collaboration between developments on both layers.

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