Connect with us

Blockchain

The responsibility behind a crypto lender’s asset listing

Published

on

Crypto lenders are the institutions situated between consumers and the untamed, blockchain-based, and often unregulated space of cryptocurrencies. As such, they are in a peculiar position when it comes to responsibility towards their customers and the assets for which they provide services. Consequently, when choosing which currencies to support, lenders lead a delicate dance of responsibility, a balancing act between catering to popular demand and adding cryptocurrencies that are sustainable, worthwhile and safe.

Demand vs. approval: The question of endorsement

It’s unsurprising that in a nascent industry full of new investors, a lender’s asset integration is often taken for endorsement. What tends to be overlooked when companies add new assets to their range of services is that crypto lending is, in fact, a business, and any asset integration is ultimately a response to demand — a good market opportunity that generates gains for business and clients, alike. Perhaps this is due to lenders being influential entities in a space that has historically lacked the institutional stamp of approval and looks for it through the pioneering businesses shaping the industry.

In June 2021, Coinbase CEO Brian Armstrong issued a series of tweets concerning the exchange’s rapid integration of multiple assets and its intention to keep up this pace. Armstrong wrote that “one should not take being listed on Coinbase as an endorsement of that asset”, denoting the fine discrepancy between working with an asset and endorsing it. Even though their operations are different from that of an exchange, the same principle applies to crypto lenders: It is not an endorsement, it’s just business. And there are many ways to create client-centric and socially responsible businesses.

If not an endorsement, then what?

Listing an asset on a lending platform may not be an endorsement but it is an indication of a certain degree of its legitimacy, stability and security. A crypto lender’s operations with a given coin mean that owning it, investing with/in it and using financial services for it is regulatorily and technically sound. Lenders have a lot to lose from working with unreliable cryptocurrencies including funds as well as their customers’ trust and the future of their business; hence, they maintain high standards for an asset’s technical robustness, market-wide liquidity, price stability and legality. While the due diligence of these companies cannot serve as the aforementioned stamp of approval for investors, they can be a crypto wind indicator of sorts, providing a general indication of an asset’s stability and safety without endorsing it.

Crypto lenders have thus become the bellwether for regulatory action and it is worth noting that this intricate inter-dependence goes both ways — suspending services for cryptocurrencies immediately upon even the potential for new regulatory issues with a coin or token. This exact scenario played out on December 23, 2020, when multiple major exchanges and crypto lenders halted their XRP services in light of the U.S. Securities and Exchange Commission lawsuit of Ripple Labs. The valuable takeaway is that these institutions’ immediate reactions to even the possibility of legal issues with XRP demonstrate a tendency towards full compliance, competent legal counsel, and readiness for immediate action in accordance with given circumstances. Essentially, responsible crypto companies are the industry’s first reactors and can be useful to watch when navigating the space.

Related: SEC vs. Ripple: A predictable but undesirable development

Listings and the [Insert company name] effect

Although coin integrations on lending platforms do not denote endorsement, companies’ actions still have a strong collateral effect on cryptocurrencies. The biggest crypto exchanges in the world both have their respective so-called “Coinbase-effect” and “Binance-effect” that cause newly-listed coins to appreciate significantly in value. On one hand, this is because they suddenly become available to a wider audience of investors but in addition, their inclusion by these exchange giants gives buyers a sense of credibility.

A similar phenomenon was observed in 2020 when PayPal announced its plans to operate with Bitcoin (BTC): News spread quickly and had an overall uplifting effect on the market. This year, the predominant example was the “Tesla-” or “Elon-effect” which began with Tesla accepting Bitcoin as payment for its vehicles in March 2021 and then retracting this opportunity — needless to say, both actions caused a ripple in the crypto industry. A couple of months later, Elon Musk, himself, arguably triggered a market downturn that lasted nearly two months with a single tweet.

Related: Experts answer: How does Elon Musk affect crypto space?

These examples of non-crypto native companies’ influence on crypto prices are not even close to exhaustive and portray the sway big brands can have on the volatile crypto market. They signal a need for responsibility on part of all companies operating in the blockchain space, especially for crypto lenders who are set to become the banks of the new financial system. It is a volatile market with many smaller retail investors and new players. In the absence of regulation, the industry must self-regulate, recognizing and moderating the gravity of their listings, investments, statements and even tweets.

The technical side of listing assets

Generally speaking, there are two main approaches to adding new assets to crypto lending platforms. The first is a full blockchain integration and the second is a more internal-facing implementation. The former, enables users to deposit and withdraw assets from their wallets, giving them more overall flexibility. The trade-off is that such integrations take slightly longer, require scarce tech talent, and depend on finding appropriate and reliable third-party custodians to ensure the complete security of assets at all times.

The alternative to full integration is an approach akin to Revolut’s crypto offering wherein users may purchase cryptocurrencies and digital assets only on the lender’s platform, cannot withdraw them to an external wallet and therefore don’t have access to their private keys. Behind the scenes, the provider deals with the assets in their client’s name, producing user-friendly exposure to crypto investments that can be implemented on the crypto lender’s platform much faster than a standard integration. While Revolut has received criticism from the crypto community that prompted them to finally launch limited Bitcoin withdrawals in May 2021, this method has intrinsic value in a space as dynamic as blockchain finance and it’s why lenders like ours have taken on this adoption-friendly model for assets like Polkadot (DOT), Cardano (ADA), Dogecoin (DOGE), and the latest addition of Solana (SOL).

True to its struggle for ultimate security, the crypto community’s famous mantra of “not your key’s not your coins” was a natural hurdle for internal integrations. Regardless, they are flourishing on Nexo with $11, $28 and $12 million in turnovers from DOT, ADA and DOGE purchases, respectively, within the first month of launching these integrations. Despite not being able to self-custody their assets, clients use them extensively. People want and need exposure to the new assets popping up regularly in the rapidly growing space. Crypto lenders simply can’t keep up with this demand when using only the slower and exceedingly more resource-heavy blockchain integrations that give clients more control over assets, thus limiting exposure to many novel and well-performing coins.

“Not your keys, not your coins” embodies one of the essential benefits of crypto — the chance to take custody and security of your funds into your own hands rather than having to trust an institution. But perhaps the phrase is becoming slightly reductive as crypto begins to scale swiftly. For lenders and other companies using internal asset integrations, this strategy ought to be a springboard towards full integrations, a means through which to keep up with the industry, grow their business and give their clients timely exposure to lucrative investment opportunities.

The way forward: Social duties > Legal obligations

Ultimately, crypto lenders must mitigate the messages behind their asset listings, delicately weigh the words and actions behind their brands, and use different methods of integration to enhance their users’ experience in the dynamic industry. In an environment lacking regulations and common standards due to its nascence, a lot of these actions depend mainly on crypto companies’ social responsibility and blockchain-based corporate social responsibility (CSR).

This can include: 1) proactively shaping regulation for crypto as we have seen industry leaders do with regards to the pending U.S. Infrastructure Bill; 2) presenting audits of reserves as Nexo has done through its real-time attest via Armanino; or 3) educating customers — through articles, ask-me-anything sessions, support groups, even metaverse worlds — about the assets they work with, the services they offer, and how to use them safely and advantageously.

Developing, unclear regulation is something with which most industries have not dealt. Hence, the novel value behind crypto lenders and blockchain companies assuming more social responsibility and self-regulatory roles from the get-go is in the potential to create a more refined ecosystem with healthier relationships between clients, businesses and regulators. As crypto companies mature from start-ups to institutions with serious gravitas in blockchain and beyond, these principles of self-regulation and socially-minded services pave the way towards an ethically and morally guided financial world rather than one based solely on profit and legal obligations.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Magdalena Hristova is a public relations manager at Nexo. With her penchant for writing and natural curiosity towards anything technically complex and equipped to cause ripples in incumbent industries, she began working as a copywriter in the crypto industry before migrating into the novel space of communications in crypto.


PlatoAi. Web3 Reimagined. Data Intelligence Amplified.

Click here to access.

Source: https://cointelegraph.com/news/the-responsibility-behind-a-crypto-lender-s-asset-listing

Blockchain

Bitcoin cools from 1-week highs with key long-term metric echoing $44K

Published

on

Bitcoin (BTC) returned to cement higher support on Nov. 30 after the latest BTC price comeback halted near $59,000.

BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView

RSI sees “bullish engulfing”

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD reversing to local lows of $55,920 on Bitstamp overnight.

The pair then recovered to circle $56,500 at the time of writing, with analysts keeping the faith on higher timeframe strength.

Popular Twitter personality TechDev noted that Bitcoin’s stochastic relative strength index (Stoch RSI) had “reset” to levels that echo BTC/USD at $44,000 — just before the run, which culminated in all-time highs.

“Bullish engulfing printed on stoch RSI cross with RSI reset to 44K levels,” he summarized alongside the 3-day chart. 

Bitcoin’s late strength Monday coincided with a return to form for macro markets and news that Twitter CEO Jack Dorsey had quit the company to focus entirely on Bitcoin activities.

While $60,000 remained out of reach of bulls, signs of a marked shift in sentiment were everywhere.

“Bitcoin high timeframe structure is bullish. Cycle awareness is key,” TechDev added in a separate post.

The Crypto Fear & Greed Index, days ago in “extreme fear” territory, looked set to enter its “neutral” zone with a score of 40/100 Tuesday.

Crypto Fear & Greed Index. Source: Alternative.me

Ethereum avoids breakout against BTC

For Ether (ETH) against Bitcoin, the picture was mixed.

Related: Where will BTC end November 2021? 5 things to watch in Bitcoin this week

As altcoins saw broadly flat performance over the past 24 hours, trader Crypto Ed highlighted a rising wedge pattern on the 4-hour timeframes for ETH/BTC. The weekly chart produced similar characteristics.

Rising wedge structures are often seen as a potential bear flag due to their tendency to break to the downside. 

ETH/USD traded at $4,400 at the time of writing, nonetheless up 7.3% over the past week.

ETH/USD 1-hour candle chart (Bitstamp). Source: TradingView


PlatoAi. Web3 Reimagined. Data Intelligence Amplified.

Click here to access.

Source: https://cointelegraph.com/news/bitcoin-cools-from-1-week-highs-with-key-long-term-metric-echoing-44k

Continue Reading

Blockchain

Kraken exchange defies competitors’ regulatory concerns with SHIB listing

Published

on

United States-based digital asset exchange Kraken has announced it will begin supporting the viral meme coin Shiba Inu (SHIB) as of Nov. 30.

There will be a minimum deposit of 373,000 SHIB ($16 USD), and the minimum trading volume is 50,000 SHIB ($2 USD). SHIB will initially be tradeable against the USD and Euro pairs, however, Kraken Futures and Margin Trading for SHIB won’t be available at launch.

Australian managing director at Kraken Jonathon Miller told Cointelegraph that the crypto marketplace supports projects with a clear demand for trading, including SHIB.

At the time of publishing, SHIB is the 12th-largest cryptocurrency with a market capitalization of $25.81 billion. SHIB has surged over 20% in the last 24 hours on the listing news.

Miller added: “I wouldn’t describe Kraken as being the place where every single coin is listed, that’s not been what we have been known for.”

Kraken is one of the least conservative exchanges with 93 assets on the exchange in total. Meanwhile, Coinbase supports 51 assets and Robinhood only supports seven.

Other exchanges have been hesitant to list the Dogecoin-inspired altcoin over regulatory concerns, despite increasing pressure from their users. On Nov. 26 SHIB surpassed 1 million holders, despite trading 50% below its all-time high.

On Nov. 10, Robinhood chief operating officer Christine Brown said that the platform’s “strategy is different than a lot of the other players out there who are racing to list as many assets as possible right now.” The Change.org petition requesting that Robinhood lists the Shiba Inu Coin has amassed over half a million signatures.

Miller added: “There are certain services that we have that don’t really fit the regulatory mold. So there’s this gray area that the whole industry exists in, and that’s not specific to us.”

“That’s just the nature of the fact that we’re dealing with an innovative technology that really doesn’t have doesn’t necessarily fit the criteria that existing regulators perceive as possible.”

Related: Reserve Bank warns Aussies over punting on ‘fad driven’ cryptocurrencies

Describing the current regulatory climate for digital asset exchanges, Robinhood’s chief legal officer Dan Gallagher said at the Georgetown University Financial Markets Quality Conference on Nov. 19 that “It’s a very tense situation, and it does call for regulatory clarity which we haven’t seen yet.”


PlatoAi. Web3 Reimagined. Data Intelligence Amplified.

Click here to access.

Source: https://cointelegraph.com/news/kraken-exchange-defies-competitors-regulatory-concerns-with-shib-listing

Continue Reading

Blockchain

Ethereum privacy protocol Tornado Cash to launch on L2 Arbitrum

Published

on

Tornado Cash is about to get a scaling boost as the privacy protocol prepares for deployment on the Ethereum layer two network Arbitrum. 

Tornado Cash’s smart contracts are ready to roll on thArbitrum Layer 2 scaling network following contributions from the community to ensure the stability of the protocol.

The Nov. 29 announcement explained that deploying on Arbitrum will “allow users to take advantage of all the benefits a Layer 2 can offer, with cheaper transactions being the biggest comparative advantage.”

Tornado Cash is a fully decentralized Ethereum (ETH) mixer protocol. Tornado Cash masks the path that tokens such as ETH take from sender to receiver, providing completely private transactions without the need to use privacy-focused coins.

Layer two networks on Ethereum boast faster transactions and cheaper fees while still benefiting from the security and decentralization of Ethereum.

The Tornado Cash team believes that the deployment onto Arbitrum will allow more users to perform private crypto transactions while avoiding Ethereum’s high gas fees. L2 transactions are expected to be around 95% cheaper than those on L1 Ethereum according to the team.

In order to use Tornado Cash on Arbitrum, users must first send ETH, ERC-20, and ERC-721 tokens from Ethereum to Arbitrum via the Arbitrum Bridge.

Related: DeFi TVL hits new highs while Metaverse tokens show signs of exhaustion

Arbitrum is currently the biggest L2 on Ethereum with $2.68 billion in total value locked, representing 39% of the L2 market share. This is second only to Boba Network’s $1.38 billion in TVL, making Boba and Arbitrum the only two L2’s with over $1 billion in TVL, according to L2Beat.

The number of unique addresses on Arbitrum has grown steadily since September, and stands at 291,876 as of the time of writing. Tornado Cash has $847 million in TVL according to DeFiPulse.

As reported by Cointelegraph, Tornado Cash unveiled its TORN governance token in Dec. 2020 and airdropped them to users in Feb. 2021.


PlatoAi. Web3 Reimagined. Data Intelligence Amplified.

Click here to access.

Source: https://cointelegraph.com/news/ethereum-privacy-protocol-tornado-cash-to-launch-on-l2-arbitrum

Continue Reading
Blockchain5 days ago

Crypto Thanksgiving: NFT drops and Black Friday deals go mainstream?

Blockchain5 days ago

ForeverLands Partners With Rarible To Curate A Part Of Its Prize Vault

Blockchain4 days ago

A Deep Dive Into Era7: Game Of Truth, a Play-To-Earn NFT Trading Card Game

Blockchain4 days ago

Bitcoin hits 6-week lows in hours as 24-hour crypto liquidations near $650M

Blockchain5 days ago

How Do Crypto Profits Impact The Housing Market? An Informal Report

Blockchain4 days ago

Report claims each Solana TX uses less energy than 2 Google searches

Blockchain5 days ago

ConstitutionDAO: PEOPLE price pumps 200% as new ‘We The People’ token unveiled

Blockchain5 days ago

New Investigation Reveals SEC vs. Ripple Case Has More To It Than Just XRP

Blockchain5 days ago

European Council approves two digital asset proposals

Blockchain5 days ago

Axie Infinity virtual land slot sells out for 550 ETH

Blockchain4 days ago

South Korean regulator proposes strict new rules for token issuers

Blockchain5 days ago

Bitcoin Thanksgiving Day Data Reveals Peak Possible Within 30 Days

Blockchain5 days ago

Spellfire Returns As Re-Master The Magic With NFT Features

Blockchain4 days ago

1 million Shiba Inu users can’t be wrong… can they?

Blockchain4 days ago

TA: Bitcoin Regains Strength, Why 100 SMA Is The Key For More Upsides

Blockchain4 days ago

New German government cites crypto in coalition agreement

Blockchain5 days ago

Kraken Daily Market Report for November 24 2021

Blockchain5 days ago

Layer-2 Ethereum Scaling Solution Metis Introduces DAC Staking Program

Blockchain5 days ago

Why Hillary Clinton Warns Biden Administration To Regulate Crypto Market

Blockchain5 days ago

Ark Invest’s Cathie Wood Ignores Bitcoin’s Dip, Reveals Long Term Optimism

Blockchain5 days ago

Over 1 Billlion ETH Has Been Burned Since Ethereum EIP-1559

Blockchain4 days ago

Thai lawmakers urged to approve tourism crypto to entice digital nomads

Blockchain4 days ago

OKEx shared insights on trading, regulation, DeFi and more during recent Markets Pro AMA

Blockchain22 hours ago

Bitmedia: Top-Rated Decentralized Ad Platform For Generating Crypto Traffic Through Display Advertising

Blockchain5 days ago

Russians transact $5B in crypto each year, Bank of Russia says

Blockchain4 days ago

Australian Tax Office says it can’t rely on crypto users’ own records

Blockchain5 days ago

SaaS platform MyLoby Reaches 100,000 Transactions On Tezos Blockchain

Blockchain5 days ago

Morningstar Indexes and DIA Build Indexes for Institutional Investors

5 days ago

JPMorgan Lists Ethereum As A Better Investment Than Bitcoin

Blockchain5 days ago

Adidas Originals Announces Surprise Alliance With Coinbase

Blockchain5 days ago

UK Law Commission affirms English and Welsh laws apply to smart contracts

Blockchain4 days ago

TA: Ethereum Gains Momentum, Dips Turn Attractive In Near-Term

Blockchain4 days ago

Bitcoin offers ‘Black Friday deal’ with sub-$55K BTC price — Just like 2020

Blockchain5 days ago

Bitcoin Thanksgiving Gift, Why BTC Heads For Fresh Rally

Blockchain5 days ago

Shiba Inu Continues To Struggle As Price Declines 17% In Past Week

Blockchain5 days ago

Solana-based Alfprotocol Provides Leverage & Non-Leveraged Features

Blockchain4 days ago

26% of crypto investors in Japan tried out NFTs: Survey

Blockchain3 days ago

Democratic senators oppose President Biden’s OCC Omarova nomination

Blockchain5 days ago

DeFi privacy project Panther raises $22M in 1.5-hour public sale

Trending