The Flash Mint is here: WETH10 turbocharges the flash loan conceptNEWS
A team has released WETH10, the latest iteration of the Wrapped Ether token that allows using Ether (ETH) in a DeFi setting. WETH10 carries a host of useful features, the most notable of which is the flash mint, an evolution of the flash loan concept.

Flash loans allow users to borrow the entire liquidity pool of a protocol to use as they see fit, without posting collateral. The only limitation is that the loan must be returned in full within the same transaction, otherwise the loan will never exist in the first place.

In the DeFi community, flash loans are primarily a tool for arbitrage, as they offer an unlimited source of funds for anyone transacting entirely within the DeFi ecosystem. This includes liquidation bots, with one lucky liquidator making $4 million from scratch in November by using flash loans. Another class of flash loan users are hackers and protocol exploiters, who often use them as a source of funds for their attacks.

The flash loan’s prevalence in hacks has made the concept somewhat controversial, with some arguing that they are net negative for the ecosystem and should be removed. For others, they represent one of few meaningful DeFi innovations, which democratizes access to arbitrage.

One limitation of flash loans is that the total sum available for a transaction is limited by the liquidity locked in a particular protocol. This is where the concept of a flash mint comes into play — instead of taking funds from a liquidity pool, the mechanism mints tokens out of thin air and destroys them once no longer necessary.

The amount that can be obtained from a WETH10 mint is not really infinite, Alberto Cuesta Cañada, technical lead for Yield Protocol and developer of WETH10, told Cointelegraph:

“The only limitation to flash mints of WETH10 is that the flash minted amount can never exceed 2^112-1 at any given time.”
In decimal terms, the number quoted by Cuesta Cañada has 33 zeros, which should be enough to cover any liquidity needs in DeFi. In practice, if the user needs to unwrap the WETH for a particular use, there may be limitations due to how much ETH is stored on the WETH contract.

Most DeFi protocols actually use WETH in the backend, though they hide this from users by automatically wrapping and unwrapping it at each interaction. If they were to switch to WETH10, the flash mint could grow to its full potential.

Will projects adopt the new standard?
“The new standard will be adopted slowly, it it gets adopted,” said Cuesta Cañada. “It is not users, but applications, that might adopt WETH10, and nothing might be seen for at least a couple of months.”

Adopting WETH10 only for the risk of amplifying potential losses from coding mistakes may be a tough proposition, but the new token carries a host of other advantages. WETH10 includes the ability to make transactions free for the end user, and it skips the “approve token” mechanic to save on gas costs and avoid security threats. An additional benefit of WETH10 is that its flash mint is completely free, unlike flash loan protocols levying their own fees.

Cuesta Cañada believes that newer projects will have an easier time integrating the standard, with existing names possibly doing so in their next releases. It is yet unclear if DeFi projects believe the risks of flash mints outweigh the benefits from the new WETH standard. “No one has committed to use it yet, but we haven't gone looking for it either,” said Cuesta Cañada. He concluded:

“If the selling proposition of WETH10 is good enough, it will be adopted. If it is not, such is life, we all learnt a lot and had a great time coding it.

Source: https://www.google.com/url?sa=t&source=web&rct=j&url=https://twitter.com/Cointelegraph/status/1368441299054047232%3Fref_src%3Dtwsrc%255Egoogle%257Ctwcamp%255Eserp%257Ctwgr%255Etweet&ved=2ahUKEwjRw92k1J3vAhVWyYsBHYzLCuUQglR6BAgDEBA&usg=AOvVaw2MUIKmCTOY98ljYz7frOlr

What Ethereum killer? On-chain data shows competitor networks are still behind
Critics say Ethereum’s soaring gas fees will cause the project to fall victim to its competitor blockchains but on-chain data suggests otherwise.

What Ethereum killer? On-chain data shows competitor networks are still behindMARKET ANALYSIS
Ether (ETH) remains the second-largest cryptocurrency and it absolutely dominates the smart contract industry according to an array of network usage metrics. Even though the network has been overwhelmed by peak activity which is causing median fees to surpass $10, the network effect of its large user and developer base seems to be enough to sustain its position as the second ranked cryptocurrency by market capitalization.

Nevertheless, some key on-chain metrics are beginning to show a potential change in Etheruem’s supremacy, which raises the age old question of whether an "Ethereum killer" will be able to dethrone the top network?


Smart contracts Total Value Locked (TVL) ranking. Source: defillama.com
As shown above, the Ethereum network vastly dominates decentralized applications (dApps). Due to its high gas fees for transactions, when analyzing the number of active addresses, the Ethereum newtork appears to be at a disadvantage to its competitors.

Over the past week, FLOW blockchain's NBA Top Shot had almost 80,000 active addresses which is five times larger than Ethereum's Rarible NFT marketplace or even SushiSwap. Thus, the first data to analyze is the daily active addresses number across each blockchain.


Daily active addresses. Source: coinmetrics.io
The chart above shows that Tron (TRX) has recently surpassed Ethereum in daily active addresses, although this metric can be easily inflated. The Tron network has virtually zero fees for simple transactions which creates an unfair comparison.

By measuring effective transactions and transfers,it's easier to exclude the addresses that are not contributing to the network.


Transactions and transfers, adjusted, USD. Source: coinmetrics.io
By doing this we can see that Tron doesn't come even close to Ethereum's numbers, although Cardano's (ADA) recent price growth has led to a virtual tie between the two.

Oddly enough, the Tron network holds over 14.5 billion of the Tether (USDT) in circulation, which by itself should boost network usage metrics. Meanwhile, Cardano has 90% fewer daily active addresses than Ethereum, yet, both networks handle the same amount of transfers and transactions.

This is especially problematic as Ethereum handles 20 billion Tether tokens and also manages all the transactions of Chainlink (LINK), USD Coin (USDC), Wrapped ETH (WETH), and many others.


ETH, ADA, NEM, NEO, TRX market cap, USD million. Source: cointrader.pro
This data should, at least theoretically, be reflected in the market capitalization. Thus, it makes sense for Ethereum to dominate the ranking as no other network is even close to its decentralized applications.

Moreover, when analyzing the transfer and transactions' value, Ethereum leads by 50 times if we exclude Cardano's questionable figures discussed earlier.

For the time being, the data suggest that the four “Ethereum killers” analyzed above are unlikely to “flippen” the Ethereum network anytime soon.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Source: https://cointelegraph.com/news/what-ethereum-killer-on-chain-data-shows-competitor-networks-are-still-behind

As Bitcoin ETFs launch in Canada, an approval from U.S. authorities appears to be closer than ever before as naysayers start to run out of reasons to deny it.

Bitcoin ETF may come to US, but not all crypto investors think it’s neededANALYSIS
The United States Securities and Exchange Commission’s floor is littered with failed crypto fund filings, but this year, following Canada’s lead, the U.S. might actually have an exchange-traded fund that tracks digital assets.

After all, the price of Bitcoin (BTC) is booming, the SEC has a new crypto-savvy chairman, and Canada, which is sometimes viewed as a beta test site by U.S. regulators, debuted a Bitcoin ETF in late February that by most accounts has been stunningly popular. But does a crypto ETF really matter anymore?

Clearly, a lot has changed in the past year — what with a global pandemic, a change in administrations in Washington and new price records being set regularly on the crypto front. Whereas many predicted as recently as June 2020 that an SEC-sanctioned Bitcoin ETF would be a very “BIG Deal” and “open the flood gates” to BTC adoption, with a crypto ETF now on the brink, some observers aren’t so sure anymore.

“I used to think it would be a game-changer but now I think it would be just another step in the evolution of crypto,” Lee Reiners, executive director of the Global Financial Markets Center at Duke University School of Law, told Cointelegraph.

Eric Ervin, CEO of Blockforce Capital and Reality Shares and co-founder of Onramp Invest, told Cointelegraph: “I think a crypto ETF is less significant than we thought before because a lot of institutional investors finally got tired of waiting and figured it out.” Ervin’s firm was one of nearly a dozen whose application was sideswiped by the SEC — the Reality Shares ETF Trust application was pulled in February 2019 “on SEC advice.” That said, Ervin acknowledged that there “are still a massive number of investors on the sidelines” who might welcome such an investment option.

Meanwhile, applications to the U.S. agency keep flowing. Most recently, the Chicago Board Options Exchange requested permission to list a Bitcoin ETF proposed by asset manager VanEck.

State Street Corporation — one of the world’s largest custodians, with $38.8 trillion in assets under custody and/or administration — will be servicing the VanEck ETF, if approved. Nadine Chakar, head of State Street Global Markets, told Cointelegraph that the company is working to bring ETFs and exchange-traded notes to market in Europe and the Asia-Pacific region, adding that “Our clients have seen interest grow in Bitcoin and [...] there is a feeling the market is maturing.” Indeed, in the three years since early 2018 when Bitcoin interest last peaked:

“They feel that the market has become more efficient, crypto custody solutions have evolved to offer better security that they are comfortable with, and regulatory clarity has increased such as we’ve seen with the OCC’s [Office of the Comptroller of the Currency] recent announcements.”
More success in 2021?
Has the crypto ETF climate really changed in Washington though? Michael​ Venuto, co‑founder and chief investment officer of Toroso Investments, told Cointelegraph: “I believe the odds of a U.S. Bitcoin ETF being approved are higher than in previous years.” Improved crypto custody, reporting and transaction transparency have calmed many regulators’ concerns, he said, and “The fact that BNY Mellon announced its move towards crypto custody on the same day as a Bitcoin ETF was approved in Canada is not a coincidence.”

“Investors have been looking to the US as the next potential market for ETFs that track digital assets,” wrote FTSE Russell, a subsidiary of London Stock Exchange Group that produces stock market indices, in a recent blog post, adding: “And speculation has only increased in recent weeks with the first Bitcoin ETF launch in Canada joining crypto ETP listings in Germany and Switzerland, as well as the continued popularity of the Grayscale investment trusts tracking this market.”

Regarding Gary Gensler’s nomination as SEC chairman, “This goes a long way towards advancing innovation in the US financial markets,” added Ervin, who agreed that the likelihood that U.S. regulators will approve a Bitcoin ETF this year has improved. He added further:

“As a former Chair of the CFTC, Gensler understands the importance of financial innovation, but he also has a healthy respect for the potential damage that unchecked markets bring.”
Reiners observed that based on what the SEC had been saying recently ETFwise — which isn’t much — a U.S. crypto ETF seems to be no closer than a year ago. However, when taking a broader look at the maturation of the crypto market and the subsequent institutional interest, he believes “It’s getting harder for the SEC to continue to say no.”

Is an ETF better than a trust?
But would an SEC-sanctioned ETF really be of major consequence now? What, for instance, does an ETF offer Bitcoin investors that current “trusts” like Grayscale Bitcoin Trust don’t?

GBTC and other trusts trade over the counter, not on major exchanges like the New York Stock Exchange, noted Reiners. By comparison, “An ETF is widely accessible to all,” including retail investors without access to OTC markets.

State Street’s Chakar noted that GBTC is essentially a closed-end fund open to qualified investors, and although shares of the trust are available on the secondary market to retail investors, those shares “are not tied directly to the price of Bitcoin. As such shares most times trade at a premium — or a discount — to the underlying price of Bitcoin.”

Venuto added further: “The ETF structure provides for intra-day creation and redemption to meet demand. This function removes the premium and discount issues which have impacted the pricing of GBTC” — though he opined that if regulators were to approve a Bitcoin ETF, “Then in short order they would allow GBTC to convert to a similar ETF like structure.”

Along these lines, Canada-based investment manager Ninepoint Partners, which launched a Bitcoin trust two months ago, this week announced plans to convert its trust to an ETF on the Toronto Stock Exchange — following other Canadian investment firms seeking to capitalize on the untapped crypto ETF market in the country.

More adoption?
If a U.S. crypto ETF comes to pass, how would it play out? Would it bring in more institutional investors, for example? “Many institutions can only invest in funds, so the ETF is a wonderful step in the right direction,” Ervin said.

Institutional interest will continue to build regardless of an ETF, opined Venuto: “In terms of institutional adoption, that ship has sailed. [...] An ETF will be primarily used by individual investors and financial advisors.”

“An ETF is more attractive to both institutions and retail investors in that it does tend to carry much less liquidity risk and more transparency to the underlying price of the asset — and fees associated with it,” said Chakar.

But what about Bitcoin and cryptocurrency adoption in general? Would a U.S. crypto ETF transform that landscape? Reiners told Cointelegraph:

“There are now lots of ways for retail investors to get exposure to crypto, and the list keeps growing. Plus now we have Tesla and other public companies investing in Bitcoin. The barrier between the crypto sector and the traditional financial system has been eroding for several years now; a Bitcoin ETF would further blur this boundary.”
Regarding Tesla, MicroStrategy and other public companies that have purchased Bitcoin recently, Chakar told Cointelegraph that “Investing in a company that has publicly acknowledged that it’s buying Bitcoin is probably not what most institutional [investors] would do to gain exposure to the asset.”

She added that crypto has been around for 10-plus years now, “But it has never been packaged in a way that allows for integration into a portfolio that is seamless.” By comparison, “ETFs have proven themselves to be a preferred and growing investment alternative thanks to the fact they offer a lower cost, liquidity and tax efficiency that direct investments may not, especially in nascent vehicles like Bitcoin.” Ervin told Cointelegraph that he likes the idea of an ETF for things like gold or silver, but for him, “Wrapping bitcoin up into a fund seems silly to me.” He added:

“There is no doubt that it is a better vehicle than a closed-end product, and competition will bring better fees and price discovery, but I don’t think most investors realize that they can buy Bitcoin directly without worrying about the cumbersome burden and costs of a fund.”
“Bitcoin doesn’t need an ETF”?
All in all, it looks like a U.S. crypto ETF will eventually come. As Reiners noted: “Regardless of their [the SEC’s] view on the merits of an ETF, if they are the lone holdouts, you have to wonder how much longer before they cave to the immense pressure and interest for an ETF.”

Under present circumstances, a U.S. government-approved Bitcoin exchange-traded fund may not be the game changer that some once predicted. A year ago, most didn’t anticipate the current institutional absorption of digital assets.

As Macrae Sykes, portfolio manager and research analyst at Gabelli Funds — an investment management firm — told Cointelegraph, institutional interest in cryptocurrency continues to grow. Coinbase’s initial public offering filing and Bank of New York Mellon’s recent announcement that it will support digital currencies offer further evidence of potential growing demand: “The ETF approval in Canada is just another step in the evolving regulatory process for accessing digital assets.”

“Bitcoin doesn’t need an ETF,” Venuto told Cointelegraph. Still, even if no longer a game changer, there is little for a crypto enthusiast not to like about an SEC-sanctioned crypto ETF: “Access is access and the more access to the asset class, the better,” said Ervin. After all, “Not everyone wants to own bitcoin directly.”

Source: https://cointelegraph.com/news/bitcoin-eft-may-come-to-us-but-not-all-crypto-investors-think-it-s-needed

En route to $200K? Bitcoin closed February 26% above Stock-to-Flow model price
Bitcoin is actually overshooting the popular S2F model price as the month of March begins.

En route to $200K? Bitcoin closed February 26% above Stock-to-Flow model priceMARKET ANALYSIS
The price of Bitcoin (BTC) is outpacing the popular Stock-to-Flow (S2F) model, which predicts that the BTC price would eventually reach $200,000.

The S2F model forecasts the long-term price trend of Bitcoin by taking two main factors into account, namely the amount of BTC in existence (the stock) against the amount of newly mined coins entering the market (the flow).

Bitcoin is on track to $200,000 based on S2F
According to the the S2F multiple, the price of Bitcoin should be hovering at around $36,851 in order for the S2F model to be on track.

Due to the recent bull cycle and Bitcoin's strong momentum, BTC/USD is now well above the S2F estimate at around $49,000.


Saifdean Ammous, the renowned author of The Bitcoin Standard, emphasized that Bitcoin rarely diverged from the S2F model since it was created well over two years ago.

The accuracy of the S2F model to date suggests that the market is recognizing the value of Bitcoin based on its scarcity and growing demand. Moreover, it highlights Bitcoin's value proposition against the depreciating U.S. dollar and the programmed reduction of the flow (i.e. Bitcoin halvings).

Ammous noted:

"PlanB released this model two years ago. Even after everything that has happened in bitcoin and the world over the last two years, the bitcoin market price has never diverged more than 1 standard deviation from the model's predicted price."
As Cointelegraph previously reported, S2F creator PlanB said that he has no doubt the price of Bitcoin would reach $100,000 by December 2021, based on the model.


In mid-2020, PlanB said Bitcoin could tap anywhere between $100,000 to $288,000 by December of next year. He said:

“People ask if I still believe in my model. To be clear: I have no doubt whatsoever that #bitcoin S2FX is correct and #bitcoin will tap $100K-288K before Dec2021. In fact I have new data that confirms the supply shortage is real. IMO 2021 will be spectacular. Not financial advice!”
BTC is being used more than the USD M1
According to Willy Woo, a prominent on-chain analyst, Bitcoin's monetary velocity is higher than USD M1.

This simply means that Bitcoin is moving more value than the amount used for spending with the U.S. dollar.


Bitcoin velocity versus U.S. money stock. Source: Woobull.com
Such a trend indicates that Bitcoin is being actively used as a means to transfer value and a store of value simultaneously, as it evolves into an established asset. Woo said:

"Bitcoin's monetary velocity is now higher than USD M1. M1 is the USD held in short term accounts for buying stuff; none of it is moving. BTC's making a joke out of it. BTC is moving more than the money we have for spending. Nevermind BTC is for long term investment."
Currently, Bitcoin is considered a store of value and a way to hedge against inflation. When the dominant cryptocurrency's adoption as a means of payment and a settlement layer rises, it would likely catalyze a second wave of mainstream adoption and usage.

At that point, the value of Bitcoin could accelerate further, moving in tandem with the S2F model as the next block reward halving in about three years materializes, potentially moving BTC price further up the S2F curve.

Bitcoin could still see major corrections in price, as it did many times during the current and past bull cycles. But the S2F model would still be on track as long as BTC/USD remains within its range of short-term deviations.

Source: https://cointelegraph.com/news/en-route-to-200k-bitcoin-closed-february-26-above-stock-to-flow-model-price/amp

Increasing stock market volatility drags Bitcoin and altcoin prices lower
Growing concerns over rising U.S. Treasury yields are putting pressure on global financial markets and possibly dragging cryptocurrency prices lower.

Increasing stock market volatility drags Bitcoin and altcoin prices lowerMARKET UPDATE
The cryptocurrency market faced another day of downward pressure as the unease in the traditional markets continues to spread following the recent interest rate spike on the 10-year U.S. Treasury bond.

Data from Cointelegraph Markets and TradingView shows that the price of Bitcoin (BTC) fell to a low at $44,710 late on Feb. 25 before buying at the key support returned to help the digital asset recover back above $46,500 but generally, analysts are looking for $50,000 to become an established support before expecting bullish continuation.


BTC/USDT 4-hour chart. Source: TradingView
Despite major BTC purchases by MicroStrategy, Tesla and MassMutual, a majority of institutional investors still have security and tax treatment concerns that prevent them from investing in Bitcoin, according to Galaxy Digital co-president Damien Vanderwilt.

Institutional investment has been a significant source of optimism in the cryptocurrency sector in 2021, but its influence in helping BTC reach a market cap of $1 trillion may be overstated as recent analysis shows that stablecoin whales and retail traders still hold the most buying power.

Interest rate increase puts pressure on GBTC
On Feb. 25, the interest rate for the 10-year U.S. Treasury spiked to 1.52%, its highest level in over a year.

According to Chad Steinglass, Head of Trading at CrossTower, the move led to market-wide pressure that pushed the “GBTC premium down as low as negative 6% and it closed around negative 2% today.” The analyst sees interest rate volatility as a major source of market volatility, as the long end of the curve steepens while the U.S. dollar is pushed lower.


Daily cryptocurrency market performance. Source: Coin360
Cryptocurrencies fell under increased pressures as equity markets deteriorated throughout the day, possibly due to a “scramble for liquidity” resulting from traders “pushing up against margin calls and needing to free up cash.”

Steinglass said:

“I interpret the GBTC premium collapse as a sign that either retail is dumping to free liquidity, or large fund holders like ARKW are seeing outflows, which causes them to sell GBTC along with everything else.”
Traditional markets are still choppy
The 10-year Treasury yield pulled back .0582 basis points to 1.46 on Feb. 26, marking a 3.82% decrease from its high on the previous day. This leadi to a choppy day in the markets which saw the major indices close mixed.

The NASDAQ finished the day up 0.56%, recovering some of its losses from the 3.5% drop on Feb. 25. Meanwhile, the S&P 500 and DOW finished the day in the red, down 0.48% and 1.51% respectively.

A majority of the top cryptocurrencies also took on sharp losses on Friday, with the exception of Cardano (ADA), which became the third-ranked cryptocurrency by market cap after its price broke out to a new all-time high at $1.29. The current excitement for the altcoin appears to be connected to the upcoming 'Mary' mainnet launch scheduled for March 1.


ADA/USDT 4-hour chart. Source: TradingView
Basic Attention Token (BAT) has also battled back against the market sell-off to post a 6.43% gain following the Feb. 23 announcement of the upcoming Brave Decentralized Exchange (DEX).

Ether (ETH) price is down 7.19%  and trading below $1,500, while Binance Coin (BNB) has dropped 8.36% to $224.14

The overall cryptocurrency market cap now stands at $1.533 trillion and Bitcoin’s dominance rate is 61.3%.

Source: https://cointelegraph.com/news/increasing-stock-market-volatility-drags-bitcoin-and-altcoin-prices-lower

What DeFi needs to do next to keep institutional players interested
In order for DeFi to have access to institutional actors, it will need to adapt. But by adapting, it might lose some of its core tenets.


What DeFi needs to do next to keep institutional players interestedOPINION
The last few months’ frenzy of institutional money flowing into Bitcoin (BTC) has seen crypto hitting the headlines — at the least as a novelty asset, at the most as a must-have. There is undoubtedly a trend in the market toward greater awareness and acceptance of digital assets as a new investable asset class.

A June 2020 report by Fidelity Digital Assets found that 80% of institutions in the United States and Europe have at least an interest in investing in crypto, while more than a third have already invested in some form of digital asset, with Bitcoin being the most popular choice of investment.

A good starting point for institutional investors would be to differentiate between crypto (Bitcoin, in particular) and decentralized finance products. To date, most institutional interest has involved simply holding Bitcoin (or Bitcoin futures), with few players dipping into more exotic DeFi products.

There are a plethora of reasons for the recent Bitcoin rage. Some would cite the relative maturity of the market and increased liquidity, which means sizable trades can now take place without resulting in excessive market movement. Others would cite the unusual high volatility, high return and positive excess kurtosis (meaning a greater probability of extreme values compared with the stock market) of the asset class. Bitcoin’s backstory and its limited supply that makes it akin to digital gold have also been highlighted, making it more and more attractive in a world of inflated asset prices and unruly monetary and fiscal policies.

However, the main reason for the recent institutional interest in crypto is much less philosophical, much more practical and has to do with regulations and legacy infrastructure.

Financial institutions are old behemoths, managing billions of dollars’ worth of other people’s money, and are therefore required by law to fulfill an overabundance of rules regarding the type of assets they are holding, where they are holding them and how they are holding them.

On the one hand, in the past two years, the blockchain and crypto industry has made leaps forward in terms of regulatory clarity, at least in most developed markets. On the other hand, the development of the high-standard infrastructure that provides institutional actors with an operating model similar to that offered in the traditional world of securities now allows them to invest directly in digital assets by taking custody or indirectly through derivatives and funds. Each of these represents the real drivers in giving institutional investors enough confidence to finally dip their toes into crypto.

Keeping institutional interest alive: What about other DeFi products?
With U.S. 10-year Treasurys yielding a little higher than 1%, the next big thing would be for institutions to look at investing in decentralized yield products. It might seem like a no-brainer when rates are in the doldrums and DeFi protocols on U.S. dollar stablecoins are yielding between 2% and 12% per annum — not to mention more exotic protocols yielding north of 250% per annum.

However, DeFi is in its infancy, and liquidity is still too thin in comparison with more established asset classes for institutions to bother upgrading their knowledge, let alone their IT systems to deploy capital into it. Additionally, there are real, serious operational and regulatory risks when it comes to the transparency, rules and governance of these products.

There are many things that need to be developed — most of which are already underway — to ensure institutional interest in DeFi products, whether on the settlement layer, asset layer, application layer or aggregation layer.

Institutions’ primary concern is to ensure the legitimacy and compliance of their DeFi counterparts at both the protocol level and the sale execution level.

One solution is a protocol that recognizes the status of a wallet owner or of another protocol and advises the counterparty as to whether or not it fits its requirements in terms of compliance, governance, accountability and also code auditing, as the potential for malicious actors to exploit the system has been proved over and over.

This solution will need to go hand in hand with an insurance process to transfer the risk of an error, for example, in validation to a third party. We are starting to see the emergence of a few insurance protocols and mutualized insurance products, and adoption and liquidity in DeFi need to be large enough to caution the investments in time, money and expertise to fully develop viable institutional insurance products.

Another venue to be enhanced is the quality and integrity of data through trustful oracles and the need to increase the confidence in oracles to achieve compliant levels of reporting. This goes hand in hand with the need for sophisticated analytics to monitor investments and on-chain activity. And it goes without saying that more clarity on accounting and taxes is needed from certain regulators who haven’t emitted an opinion yet.

Another obvious issue concerns network fees and throughput, with requests taking from a few seconds to double-digit minutes depending on network congestion, and fees twirling between a few cents and 20 bucks. This is, however, being resolved with plans for the development of Ethereum 2.0 in the next two years and also the emergence of blockchains more adapted to faster transactions and more stable fees.

A final, somewhat funny point would be the need for improvement in user experience/user interfaces in order to turn complex protocols and code into a more user-friendly, familiar interface.

Regulation matters
People like to compare the blockchain revolution to the internet revolution. What they fail to remember is that the internet disrupted the flow of information and data, both of which were not regulated and had no existing infrastructure, and it is only in the last few years that such regulations were adopted.

The financial industry, however, is heavily regulated — even more so since 2008. In the United States, finance is three times more regulated than the healthcare industry. Finance has a legacy operational system and infrastructure that makes it extremely hard to disrupt and tedious to transform.

It’s likely that in the next 10 years, we will see a fork between instruments and protocols that are fully decentralized, fully open source and fully anonymous and instruments that will need to fit in the tight framework of the heavy regulation and archaic infrastructure of financial markets, resulting in a loss of some of the above characteristics along the way.

This will by no means slow down the fantastic rate of creativity and the relentless, fast-paced innovation in the sector, as a large number of new products in the DeFi space — products we haven’t even predicted — are anticipated. And within a quarter of a century, once DeFi will have first adapted to and then absorbed capital markets, its full potential will be unleashed, leading to a frictionless, decentralized, self-governing system.

The revolution is here, and it is here to stay. New technologies have undeniably shifted the financial industry from a sociotechnical system — controlled through social relations — to a technosocial system — controlled through autonomous technical mechanisms.

There is a fine equilibrium to be reached between tech-based, fast-paced crypto and antiquated, regulated fiat systems. Building a bridge between the two will only benefit the system as a whole.

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.

Source: https://cointelegraph.com/news/what-defi-needs-to-do-next-to-keep-institutional-players-interested

Finance Redefined: Ethereum exodus continues as Binance ‘helps,’ Feb 17–24.
Binance is flexing its muscles in a bid to promote BSC over Ethereum.

Finance Redefined: Ethereum exodus continues as Binance ‘helps,’ Feb 17–24.NEWSLETTER
The parabolic rise of the Binance Smart Chain has been all over the news this week, aided by a few seemingly unfriendly moves by the exchange itself.

It started on Friday, when Binance suddenly froze withdrawals of Ethereum-based assets for about one hour. Many interpreted it as a move against the blockchain and its ecosystem, given that the cited reason was “congestion issues” — something one hardly imagines is a problem for an exchange, unless they shoulder withdrawal costs for the user.

The day after, FTX started shaming Binance for excessive promotion of BSC on the exchange. Specifically, FTX was apparently “spending millions” in failed deposits that came over the Smart Chain but were meant for Ethereum. FTX’s accusation toward Binance, one of its investors, is that the exchange put BSC as the default option for withdrawing many ERC-20 assets, which caused a lot of failed deposits to FTX.

I can’t say I’ve ever noticed Binance Smart Chain being “the default option” for withdrawals. BSC is the first listed when you attempt to withdraw something like USDC, though it does not actually select the blockchain for you. Still, I can see how some newbies could get swindled by this. People overestimate the degree to which terms like “ERC-20” are known in the casual crypto community. Testing the withdrawal now, Binance forces you to go through a quiz where you confirm you know what you’re doing by selecting BSC. I have no idea when this was introduced, but it’s not impossible that it’s a response to FTX’s statements.

Overall though, there’s nothing inherently wrong with one company using its products to promote another of its products. From the official responses it seems that the Ethereum congestion incident won’t happen again because they “upgraded the systems.”

Cheap tricks would never be able to undermine Ethereum without there being an underlying fundamental weakness. And I think we’ve all had enough with Ethereum gas fees. I tried a non-Ethereum DeFi product recently, and it felt so good to pay just a few cents for a complete interaction.

Binance Smart Chain is already processing more transactions than Ethereum and has over 5 million unique wallets. Ethereum, with its much longer history, is currently sitting at 140 million wallets in total.

Ironically, Ethereum fans should secretly want the bull market to end right now. The longer it goes on, the more gas fees will remain high, and the more people will want to migrate away and seed other environments.

Source: https://cointelegraph.com/news/finance-redefined-ethereum-exodus-continues-as-binance-helps-feb-17-24

Ripple now registered as a Wyoming business
"More crypto companies are realizing Wyoming is a better domicile than Delaware due to our crypto-friendly laws," said Caitlin Long.

Ripple now registered as a Wyoming businessNEWS
Blockchain-based payments firm Ripple Labs has now registered a business in Wyoming.

Source: https://cointelegraph.com/news/ripple-now-registered-as-a-wyoming-business

According to records from the Wyoming Secretary of State, Ripple Markets WY LLC’s status as a local business is listed as "active" after an initial filing in February 2020. As a limited liability company in Wyoming, Ripple’s registered agent will be based in Cheyenne.

“More crypto companies are realizing Wyoming is a better domicile than Delaware due to our crypto-friendly laws,” said Caitlin Long on Twitter.

Long is the CEO of digital bank Avanti Bank & Trust and associated with the state legislature’s Select Committee on Blockchain, Financial Technology and Digital Innovation. She said crypto firms like Ripple should consider relocating to Wyoming due to the state not having any corporate or franchise taxes, and cryptocurrencies being exempt from property and sales tax.

In addition, there is the presence of U.S. Senator Cynthia Lummis. The Wyoming lawmaker is one of the first to say digital assets will be a key part of her legislative agenda. Responding to the Ripple news, Lummis' state policy director said many people were "maximalist on Wyoming."

It does not appear as if Ripple will move its headquarters to the crypto-friendly state as its principal office is still listed as San Francisco. However, both Ripple co-founder Chris Larsen and CEO Brad Garlinghouse have said that they are displeased with the seeming lack of regulatory clarity on crypto and blockchain in the United States.

Wyoming is becoming one of the most attractive U.S. states for crypto and blockchain firms. Last year, the Wyoming State Banking Board granted crypto exchange Kraken a charter to operate as a crypto-friendly bank and gave Avanti the green light to receive and custody crypto in a similar fashion. In the wake of Tesla's $1.5 billion Bitcoin (BTC) purchase earlier this month, Senator Lummis invited CEO Elon Musk to consider relocating to the state.