Blockchain Bites: DeFi Meets NFTs, TSLA Beats Bitcoin in Volatility, Uniswap Breaks $2B

Bitcoin is moving off exchanges, has been less volatile than TLSA and broke its record for longest streak trading above five figures. 

Also: Bitwise’s bitcoin fund has more than doubled in size, KuCoin was hacked and Jack Dorsey dropped a few more hints about his decentralized social media standard, Blue Sky. 

Top shelf

Accredited investor interest
Bitwise’s bitcoin fund has brought in $8.9 million, the single-largest increase in assets raised in the fund’s two-year history, according to a recently amended filing with the Securities and Exchange Commission (SEC). The firm’s Bitcoin Fund provides accredited U.S. investors with exposure to bitcoin through a traditional product. In 2019, the fund attracted $4.1 million in investment, meaning the fund has more than doubled in size the past year. Bitwise executives pointed to fears of inflation and bitcoin’s role as a hedge as reasons for increased interest in their product. Bitcoin’s well-known volatility is often seen as a barrier to entry for institutional clients, but the cryptocurrency has in fact been more stable than Tesla’s (TSLA) stock.

Enterprise solutions
EY has unveiled a new Ethereum-based, enterprise-grade blockchain solution called the OpsChain Network Procurement. The platform is designed to enable companies to run private end-to-end procurement activities by allowing buyers and sellers to operate as networks, while automatically tracking volumes and spend and utilizing agreed terms and pricing. The platform utilizes open-source software including the Microsoft-backed Baseline Protocol and operates on the public Ethereum blockchain, CoinDesk’s Sebastian Sinclair reports. 

Twitter’s blockchain
Jack Dorsey said blockchain is the future of Twitter and his latest initiative is looking to hire at least five new roles, while speaking at the virtual Oslo Freedom Forum 2020 on Friday. The CEO of Twitter and Square revealed details of the nonprofit Blue Sky initiative meant to create an open standard for social media. Under this vision, users can contribute to and access data from a decentralized version of Twitter instead of a centralized service where the social media platform hosts content on its website. “Blockchain and bitcoin point to a future, point to a world, where content exists forever,” Dorsey said. “We’re not in the content hosting business anymore, we’re in the discovery business.”

KuCoin hack
Over the weekend, a hacker breached KuCoin’s hot wallets absconding with some $150 million in crypto. KuCoin said in a statement that it detected large withdrawals of bitcoin (BTC) and ethereum (ETH) tokens to an unknown wallet beginning at 19:05 UTC time on Friday. The exchange’s chief executive Johnny Lyu said KuCoin has transferred the remaining funds from compromised wallets to new addresses and momentarily froze customer deposits and withdrawals. While other exchanges including Bitfinex and Tether have blacklisted the stolen funds. An investigation is underway and stolen customer money will be “covered completely” by an insurance fund, Lyu said.

DeFi goes NFT
The excitement in DeFi has shifted to the NFT market, CoinDesk’s Brady Dale reports. NFTs, one-of-a-kind tokens made possible by Ethereum’s ERC-721 standard, have not captivated investor attention until quite recently when people realized these digital collectibles could be used for yield farming. Platforms like NIFTEX have enabled NFT indices, Rarible has added a native token and Uniswap’s liquidity pools are creating new avenues for financialization – a trend Dale traces back to John Lyall’s MEME experiment. 

Quick bites

• The Bahamas Reveal Details, October Date of Landmark Central Bank Digital Currency Debut (Danny Nelson/CoinDesk)
• Bitfinex Launches Tether-Settled Perpetual Contracts Based on European Equities (Omkar Godbole/CoinDesk)
• A cadre of crypto investment bankers is gearing up for a dealmaking frenzy (Frank Chaparro/The Block)
• Coinbase is a mission focused company (Brian Armstrong/Coinbase)
• How Hard Is It to Brute Force a Bitcoin Private Key? (Scott Chipolina/Decrypt)

At stake

Growing the pie
Uniswap is now bigger than the entire decentralized finance space just two months ago, as the trading protocol becomes the first to pass the $2 billion milestone. Uniswap clocked the record figure just after midnight (UTC) Monday, according to crypto rankings website DeFi Pulse. The next biggest DeFi project, peer-to-peer lending platform Maker, trails slightly behind Uniswap at $1.96 billion in total value locked (TVL), according to DeFi Pulse. There’s now more than $11 billion in TVL in the DeFi ecosystem, with Uniswap making up approximately 18% of that.

Market intel

Five digit streak 
Bitcoin closed Sunday at $10,793 setting a record of 63 consecutive daily closes above $10,000, according to market data aggregated by Messari. The bellwether cryptocurrency’s previous record 62-day streak above $10,000 lasted from Dec. 1, 2017, through Jan. 31, 2018, when bitcoin reached its all-time high of just above $19,900 on Coinbase, CoinDesk’s Zack Voell reports.

Exchanges down?
The balance of bitcoin on major exchanges has hit its lowest levels since November 2018, potentially signalling a bullish view from bitcoin holders, as they move to longer-term holding strategies, such as cold wallets. Additionally, a rise in new investors during the coronavirus pandemic has led to a growth in “white glove” services, meaning fewer bitcoin on exchanges and more in managed portfolios. Another possible explanation? Bitcoin is being moved to tokenization solutions for use in the DeFi ecosystem, CoinDesk’s Muyao Shen reports.

Op-ed

Stablecoin guidance
Reading between the lines, CoinDesk Director of Research Noelle Acheson thinks the Comptroller of the Currency’s (OCC) latest stablecoin guidance is more than a nudge for the industry. “This could incentivize banks to actively seek stablecoin business, and in so doing, broaden both their client base and their stake in crypto markets… So, a bank could attract not just stablecoin issuers, but also their clients. It would then make sense to facilitate the transfers of stablecoins between clients, and (why not) even between banks. New payments networks could emerge, which in turn could give rise to a host of new banking services,” she writes.

Podcast corner

Stablecoins & power politics
On the inaugural episode of Opinionated, a new podcast featuring CoinDesk’s leading columnists and contributors, CoinDesk editor Ben Schiller is joined by cryptoratti Nic Carter to discuss crypto’s biggest story: the $20 billion stablecoin boom. 

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