New research finds that regulated financial institutions can interface with decentralized finance via digital asset marketplaces.
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While public adoption of crypto assets is increasing, global regulations continue to progress and recognize decentralized technologies as a suitable infrastructure for the dematerialization of securities. In Luxembourg, the country that is second in the world in terms of assets under management, the country’s regulator adopted a bill that explicitly recognizes the possibility of using distributed ledger technology for the dematerialization of securities.
The regulation is moving quickly elsewhere across Europe: Tokenized securities now fall under the same rules and regulations as traditional financial instruments in many other European countries including France, Switzerland, Germany, Italy, the Netherlands, Romania, Spain and the United Kingdom.
What’s next for the industry? Due to the increase in public adoption and the favorable regulatory environment, demand from the financial industry to access digital networks is on the rise. So far, banks have digitized the retail industry, but not much has evolved in capital markets.
The digitization of this industry is now possible through the blockchain, an infrastructure now widely recognized by the largest governments globally for financial instruments. Funds and asset managers can now upgrade their distribution channels by launching digital asset marketplaces, or DAMs, and connecting to others via decentralized networks.
DAMs will help their customers discover new opportunities, manage their investments and even open secondary market possibilities. In this ebook, industry participants explain how capital market players can benefit from blockchain by launching a DAM and maximizing the monetization of their investor base.
Financial institutions are beginning to publicly embrace and adopt the technology. So far, they have started, as expected, with crypto assets. Once they begin to trust the technology and it becomes embedded within their portfolios, it will mean one thing: Curiosity will peak, and these institutions will realize the operational benefits of decentralized technology.
Driven by increased confidence in the technology, and pressured by DeFi replacing many traditional banking functions, institutions will begin to learn that the technology can solve long-standing and deeply entrenched industry problems, particularly in the opaque and highly illiquid private markets.
Digital asset marketplaces — i.e., primary and secondary venues where investors meet — will be the driver for this, according to the study. However, open-source standards like the Token for Regulated EXchanges are required to enforce compliance on-chain in a heavily regulated world.
As Miami becomes the hottest spot in America for crypto, Mayor Suarez wants to know: “How can I help?” But will he actually be swigging Miami Vice cocktails?
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Francis Xavier Suarez, the mayor of Miami and a firm Bitcoin proponent, will appear for a 30-minute fireside chat on Blockchain & Booze this evening.
The episode, hosted by Adam Levy of blockchain venture studio and fund Draper Goren Holm, and streamed live from Cointelegraph’s Twitter account, will explore Miami’s emerging status as a global crypto hub, as well as Suarez’s civic leadership responsibilities. The chat will be followed by a half-hour-long AMA with guests from across the crypto industry.
The upcoming episode of Blockchain & Booze will be the first since Levy announced a partnership with Cointelegraph on Feb. 22. Speaking at the LA Blockchain Summit, Levy remarked on how the industry-leading meet-up grew from humble beginnings:
“It’s crazy to see how Blockchain & Booze developed from a few people on a Zoom call to this incredibly fun weekly show where we all get to learn about what’s happening in the industry, and at the same time, meet those who are building its foundation.”
“I’m so excited to be working together with Cointelegraph as we start a new chapter for B&B and create the most fun, informative, and entertaining virtual experience for everyone during this pandemic,” Levy added.
Jon Rice, Editor-in-Chief at Cointelegraph, said, “We’re excited to establish this media partnership with Blockchain & Booze. Adam Levy and the team at Draper Goren Holm and LA Blockchain Summit created a unique format for getting to know the industry’s top leaders more intimately. It’s a community-focused event, and since everyone gets tired of the same stuffy formats it’s proved to be a great way to unwind, relax, and still enjoy an entertaining and educational crypto-focused chat. Now slap the bag.”
Don’t miss the upcoming episode of Blockchain & Booze live from Cointelegraph’s Twitter account from 8–9 p.m. Eastern time / 5–6 p.m. Pacific.
The hour-long episode will be followed by a 60-minute networking session on Remo.co that allows viewers to meet and mingle with other streamers and the show’s host.
Air France is set to trial a blockchain-based system for verifying COVID-19 test results for its passengers.
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With travel and tourism being one of the hardest-hit industries by the coronavirus pandemic-induced lockdowns, several stakeholders are increasingly prioritizing digital and contactless solutions.
In this vein, Air France has partnered with MedAire, SGS, International SOS, and the International Chamber of Commerce to test a blockchain-based COVID-19 travel system.
Beginning from March 11, Air France will begin the pilot test of the ICC AOKpass system developed by MedAire and the International SOS. The ICC AOKpass is an app that travelers can install on their smartphones that contains a secure record of their COVID-19 test results from approved labs.
With the app, travelers need not present a paper test result as the ICC AOKpass will serve as a secure form of verification of the user’s COVID-19 negative status.
According to an announcement on Tuesday, the test will run for four weeks and will cover only the Paris CDG-Pointe-à-Pitre and Paris CDG-Fort-de-France route.
The press statement also revealed that the use of the app will be voluntary for passengers flying the route. Air France says it will share details from the test with all other collaborators in the project to aid in further travel-related health digitization efforts.
Commenting on the need for digital innovation in the travel sector amid the coronavirus pandemic, Catherine Villar, director of customer experience at Air France stated:
“The test of the AOKpass solution is fully in line with this framework and the process initiated by the establishment of the Air France Protect label. We are convinced that the changes we are going through collectively will change the journey in the long term and are committed to supporting all innovation projects that can help us meet these new challenges.”
The AOKpass solution is not the first blockchain-based system adopted by Air France. Indeed, the world’s fifth-largest airline has a history of exploring the novel tech in several aspects of its operations.
According to a report by Statista, airlines have lost an estimated $314 billion to the coronavirus pandemic with air travel down over 60% according to the United Nations news agency. To adhere to social distancing protocols, stakeholders are increasingly prioritizing contactless protocols which require digital base layers like blockchain.
As previously reported by Cointelegraph, Jeju Island in South Korea — a major tourist hotspot — is utilizing a decentralized ledger technology-based COVID-19 tracing app. Back in January, reports emerged that the Frankfurt Airport had deployed an Iota-based solution to track COVID-19 test results of travelers.
Some of Asia’s largest banking institutions are working together on a “multiple” CBDC project, designed to cross borders and navigate regulations easier than fiat.
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Several major banks across Asia have joined forces to construct a cross-border central bank digital currency, according to a joint announcement issued on Feb. 23.
Dubbed the Multiple Central Bank Digital Currency Bridge — or m-CBDC — the project sees the Hong Kong Monetary Authority, the Bank of Thailand, the Central Bank of the United Arab Emirates, and the Digital Currency Institute of the People’s Bank of China combine to create a CBDC prototype using distributed ledger technology.
Building upon the “Inthanon-LionRock” research project started in 2019, the latest phase of the exploration into CBDCs will develop a proof-of-concept to “facilitate real-time cross-border foreign exchange payment-versus-payment transactions in a multi-jurisdictional context and on a 24/7 basis,” states the announcement.
The stated aim of the project is to address “pain points” in conducting cross-border transfers. These include cost inefficiencies and the complex regulation which accompanies moving money from one country to another.
As previously described by the deputy governor of the Bank of Thailand, Mathee Supapongse:
“The model offers a cross-border corridor network where participants can transfer funds instantaneously on a peer-to-peer basis and in an atomic PvP manner. The design and key findings of the project have added new dimensions to central bank communities’ studies on cross-border funds transfer area.”
The central banks taking part in the project hope to attract more institutions into the scheme and aim to create a more conducive environment for the exploration of CBDCs in Asia and beyond.
The rapid emergence of cryptocurrencies in recent years has forced the hand of numerous governments and central banks to create a digital alternative to decentralized coins like Bitcoin (BTC), Ether (ETH), and many others.
The inability of governments to control or track the flow of cryptocurrencies will undoubtedly see CBDCs become commonplace in years to come. China is ahead of the curve in regards to CBDC creation and is already testing biometric ID hardware wallets for its digital yuan.
A major government-owned bank, the State Bank of India, has become the first Indian bank to join JPMorgan’s blockchain network Liink.
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The State Bank of India, or SBI, a major Indian government-owned bank, is looking to improve cross-border payments with a blockchain solution by American investment bank JPMorgan Chase.
According to a Feb. 23 report by The Economic Times, the SBI has joined Liink, a new blockchain-based interbank data network developed by JPMorgan. By integrating the technology, the bank expects to reduce transaction costs and improve cross-border payments for its customers.
SBI deputy managing director Venkat Nageswar said that the bank has already gone live on Liink. “We are excited to be the first bank in India to go live on the network and look forward to closer partnership with JPMorgan on implementation and exploring applications as part of the network to better serve our clients,” Nageswar stated.
Liink is a peer-to-peer network and ecosystem operating under the umbrella of JPMorgan’s blockchain and digital currency-focused business dubbed “Onyx.” Piloted in 2017, the product was originally referred to as Interbank Information Network and rebranded as Liink in October 2020.
The Liink solution has enlisted more than 400 financial institutions and corporations in 78 countries, including 27 of the world’s top 50 banks. The network has around 100 live banks on the network, including both state-owned and private institutions, according to The Economic Times.
Prabdev Singh, managing director at JP Morgan Chase India, said that the latest partnership with the SBI falls in line with the company’s plans to expand its blockchain presence in India. “We continue to actively explore how emerging technologies can enhance our clients’ experience,” he said.
In conjunction with rebranding to Liink in October 2020, JPMorgan also launched its proprietary stablecoin JPM Coin. As previously reported by Cointelegraph, the stablecoin is implemented for cross-border transactions.
The Microsoft founder thinks anyone with less money than the world’s richest man should “watch out” when it comes to Bitcoin.
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Microsoft founder Bill Gates has issued a warning to would-be Bitcoin (BTC) buyers looking to follow Elon Musk’s investment strategy. Speaking to Bloomberg’s Emily Chang, Gates suggested Musk had access to sophisticated trade management techniques that the average investor isn’t privy to.
When asked about the susceptibility of Bitcoin to tumble in price in reaction to a mere tweet (undoubtedly a reference to Elon Musk’s own social media posts), Gates said Elon Musk was probably insulated from such market crashes:
“Elon has tons of money and he’s very sophisticated so, you know, I don’t worry that his Bitcoin would randomly go up or down.”
On Feb. 23, little over two weeks since Tesla’s $1.5 billion acquisition of Bitcoin was announced, the price of Bitcoin fell 20% — from $58,258 to $46,624. At the same time, almost $400 billion was wiped off the global market cryptocurrency market cap.
Interestingly enough, the crash occurred just hours after Musk himself expressed the opinion that the then-current prices of Bitcoin and Ether (ETH) were “high”. Whether this was a criticism, or an attempt to deflect heat from a possible investigation into Musk’s influence on crypto prices, the entire market plunged in the aftermath.
Gates said it would be a mistake for the average investor to blindly follow the mania of optimism surrounding Musk’s market moves, telling those who aren’t billionaires to “watch out.” He said:
“I do think people get drawn into these manias who may not have as much money to spare. So I’m not bullish on Bitcoin, and my general thought would be: if you have less money than Elon, you should probably watch out.”
The Microsoft founder raised the point of Bitcoin’s energy consumption, suggesting that the cryptocurrency didn’t return much in the way of output.
“There are things we invest in in society which produce output. Bitcoin happens to use a lot of energy. It happens to promote anonymous transactions — they’re not reversible transactions,” said Gates.
According to Gates, digital currencies aren’t necessarily a bad thing, he just thinks they should be transparent, reversible, and essentially, centralized. Gates went on to describe some of the work carried out using digital currencies since the start of the COVID-19 pandemic, noting that the Gates Foundation had used the technology to enable governments to distribute relief funds to their citizens.
SushiSwap is exploring integrating with high-speed AMM, Raydium, on Solana to alleviate high gas fees.
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Major decentralized exchange SushiSwap is the latest to consider action to mitigate Ethereum’s extreme transaction fees, and it involves a potential port to the Solana blockchain.
A proposal, which was posted to the SushiSwap forum on Feb. 22 under the codename ‘Bonsai,’ suggests building out the platform on the Solana ecosystem. The integration is intended to mitigate Ethereum’s skyrocketing transaction fees, which have spiked to new all-time highs over the past 24 hours.
The proposal would involve integrating SushiSwap with Raydium’s platform, with the Solana-based automated market maker having launched on Feb. 21.
The proposal’s author, “Handroll,” notes Raydium already features support for SushiSwap’s liquidity pools:”
“We have been working on Raydium’s AMM and liquidity pool protocols since the fall of 2020 and have just launched on our platform […] Raydium’s protocol is already able to support SushiSwap liquidity pools for the Serum orderbook.”
Handroll proposes the integration begins with Raydium working alongside SushiSwap to build support for liquidity pools and staking on the Solana-powered Serum DEX. After a testing period on Raydium’s testnet, the teams could then explore deploying Bonsai on Solana’s mainnet.
The proposal claims SushiSwap users will be able to carry out token swaps and manage their yield farms much faster and with a major reduction in transaction costs after the integration is completed.
The SushiSwap team anticipates that Bonsai will be live on testnet within the first quarter of 2021.
“We envision the end product as an additional offering on the SushiSwap page that maintains Sushi’s trademark UI and design but connects to Raydium backends,” Handroll added.
Canadian-based analytics company NonFungible has released a report predicting that 2021 is poised for “a new Bull Market in the NFT industry.”
Although NFTs have been around since ERC-721 was invented by William Entriken, Dieter Shirley, Jacob Evans, and Nastassia Sachs in January 2018, the sector largely remained an obscurity outside of hardcore crypto circles until the latter part of 2020. The second half of 2020 saw NFT sales increase by 200% to more than $9 million.
However, NFT sales have since risen at an incredible rate with approximately $60 million non-fungible tokens sold in the last 24 hours.
The value of highly-sought NFTs has similarly skyrocketed, with multiple NFT sales garnering more than $1 million each in February so far. On Feb. 22, one collectible in the Cryptopunk series sold for 550 ETH, worth more than $1 million at the time of sale.
Three days earlier, another CryptoPunk sold for 800 ETH with a value of $1.55 million at the time of sale, while another sold four days ago for 650 ETH.
According to the report, the total market cap for project-based NFTs finished was $338 million at the close of 2020. Messari research analyst Mason Nystrom believes this figure could rise to more than $1.3 billion in 2021.
Nystrom noted the art industry has embraced NFTs, driving more than $120 million in sales from conception to December 2020. He also noted great potential in the gaming and collectible categories, emphasizing that critical infrastructure is expected to launch in 2021.
Ethereum NFT project Ether.Cards has designed NFT cards that will randomly be given special utility traits such as reduced platform fees, increased future drop rates, or even shared royalties of the platform’s ongoing revenue. The platform will allow artists to set up raffles, bingos, deathmatches, and other games on their NFTs.
The NBA is arguably the biggest corporation to embrace non-fungible tokens, partnering with CryptoKitties’ creator Dapper Labs to release collectible NFTs in the form of NBA Top Shot “moments” for the past year.
Over the last 24 hours, more than 34,000 people traded the basketball-themed cards on Top Shot’s secondary market, generating for more than $46.7 million worth of trade. Earlier today, one card featuring Lebron James sold for $208,000, according to Cryptoslam.
Several celebrities have also attempted to jump on the NFT bandwagon, with Lindsay Lohan selling an Daft Punk-themed NFT for $15,000.
A Russian “artist” also sought to profit from NFTs earlier today, turning a video of him eating a live bat in front of the European Parliament into an NFT.
The LEG Fan Token is expected to launch in the coming months and will grant supporters voting rights on various club decisions. Tokenholders will also be eligible to take part in exclusive games, competitions and VIP experiences. The supply of LEG Fan Tokens will be capped at 5 million.
Legia Warsaw joins 21 European football giants to have created fan tokens on the Socios platform recently. Major soccer institutions such as Lionel Messi’s FC Barcelona, Cristiano Ronaldo’s Juventus, and Zlatan Ibrahimovic’s A.C. Milan have all launched club-based fan tokens on the Chiliz blockchain.
Dariusz Mioduski, CEO of Legia Warsaw, appeared optimistic about interacting with the new technology offered up by blockchain and tokenization.
“Pioneering solutions and new technologies, which additionally give our fans unique opportunities to actively participate in the life of our club, are the exact direction in which we want to develop,” said Mioduski, adding, “We believe that the potential of the most popular sports brand in this part of Europe, which Legia Warsaw undoubtedly is, will allow Socios.com to gain many fans not only in Poland, but also in the international arena.”
The CEO and founder of Socios.com and Chiliz, Alexandre Dreyfus, welcomed Legia Warsaw onto the Socios platform and anticipated it would increase overall fan engagement.
“Very soonLegia fansall around the world will have a new way to get closer to the club they love and will be able to influence the team in polls, access VIP rewards, exclusive promotions, chat forums and much more on Socios.com,” Dreyfus said, adding, “We’re sure $LEG Fan Tokens will be a massive hit with fans and become a very powerful new engagement tool for the club.”
Despite a controversial start for SushiSwap, the last few months have seen it catching up to Uniswap in terms of activity on the platform, total value locked, and the price of its SUSHI governance token.
A recent report from Delphi Digital took a closer look at the two projects and broke down the fundamental differences in the way that each has diverged in their development since SushiSwap’s vampire attack on Uniswap.
SushiSwap originally emerged as a fork of Uniswap v2 with the inclusion of the SUSHI governance token which was distributed to participants of the community.
At the time, Uniswap had yet to launch the UNI token which would subsequently be airdropped to users who had interacted with the protocol either by trading or providing liquidity.
While UNI had likely been planned for release at some point, many saw the surprise airdrop as being a bid to stop a potential vampire attack that would drain the liquidity from Uniswap to SushiSwap.
After a bumpy start which saw SushiSwap co-creator Chef Nomi dump all of his SUSHI tokens on the market for $14 million worth of Ether (ETH), only to later return those funds to the treasury, SushiSwap co-founder ‘0xMaki’ took over as the lead on the project and helped it to correct course and become a viable contender among DeFi platforms.
When it comes to comparing the original token distribution, 65% of the original UNI supply was distributed to the community through liquidity mining and a governance-controlled treasury versus 80% of all SUSHI tokens.
In this regard, the SushiSwap platform has emerged as a more community-controlled project that is self-funded with 9% of all SUSHI emitted from the system awarded to the treasury. In contrast, Uniswap has received some VC backing with a total of $12 million being raised from various sources to help fund future development.
SushiSwap is more decentralized than Uniswap
Differences in the path of development began soon after the fork and led to two distinct platforms that offered a different experience. The excitement continues to build for the release of Uniswap v3, although only a handful of insiders know exactly what the new version will entail.
While users and token holders trust the lead developers which have created an incredible interface thus far, many in the cryptocurrency space prefer a project with more transparency and community involvement.
SushiSwap keeps more to the community ethos of cryptocurrency in this way, with a core team of developers that is more transparent about what is coming and where the project is headed in the future.
SushiSwap also has established an effective governance system that allows community members to have a say in important decisions. The governance system for Uniswap is less conducive to community involvement, which could be the result of the rushed release of the UNI token and a desire to create a solid foundation before integrating community governance.
Divergence in value proposition and community involvement
Over the past few months, the Uniswap team has been focused on building out v3. As Delphi Digital pointed out, Uniswap’s first-mover advantage has provided the platform with a bevy of integrations as the platform was sought out by projects across the sector for the liquidity it provided.
SushiSwap on the other hand has been busy establishing connections with other burgeoning DeFi platforms, most notably the yEarn ecosystem which includes yEarn, Cream, Pickle, Cover, and Alpha. This will help increase the use of SushiSwap’s liquidity offerings and help make the platform more resilient to upcoming challenges.
More recently, SushiSwap has begun to incentivize liquidity for longer tail assets as it looks to establish itself as a place to get access to projects with long term viability. In contrast, Uniswap has been a way for new projects to get a head start on liquidity and community exposure.
One of the most significant differences between the two platforms relates to cash flow generation.
In March of 2021, the UNI community will have the ability to divert 0.05% of all fees on the platform to the Uniswap treasury which is governed by the UNI token. The fees will accrue in the treasury and UNI token holders will be able to vote on what to do with those funds in the future.
SushiSwap has had the 0.05% fee in place since it was created in September 2020 and the governance council agreed that the money generated is used to purchase SUSHI directly and award it to stakers, providing a source of direct income.
In terms of fees generated, Uniswap clearly comes out on top for the time being. With a larger number of available trading pairs and huge liquidity pools for top coins, the Uniswap platform sees higher volumes and this translates into more cash flow for liquidity pools and UNI token holders.
But with fees going to a treasury rather than directly to token holders, UNI has been more appealing to investors with a longer-term outlook who prefer the approach of “accumulating capital in the treasury during the early years.”
So SushiSwap offers a more community-oriented and governed system that provides direct income to token holders from fees generated on the platform while Uniswap is working on a long term plan to create a one-stop DEX that meets every traders’ needs.
First mover advantage and dominant liquidity pools have allowed Uniswap to compete with the likes of Coinbase in terms of trading volume and long-time cryptocurrency advocates appreciate this accomplishment.
SushiSwap has risen from the ashes to create a community-driven project that those just getting into crypto can appreciate for its ability to generate immediate income.
SUSHI has also seen a recent spike in trading volume on Uniswap, showing that the fight for the title of top DEX is just getting started in these early rounds of the crypto bull cycle.
The DeFi sector is just beginning to gain attention from the traditional financial sector and as the liquidity, total value locked and price of each platform’s governance token reaches new highs for both Uniswap and SushiSwap it will be interesting to watch as the two platforms continue to diverge in development.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.