The market value of DeFi projects exceeds US$7.7 billion, and it has skyrocketed by 600% in two months. Behind the popularity, triple risks need to be paid attention to
The OKEx Intelligence Bureau Industry Weekly Report will take you to quickly review industry trends and clarify industry trends.
Table of contents:
Market overview
digital currency market
industry voice
industry voice
Regulatory dynamics
Blockchain Industry Empowerment
industry anecdote
Market overview
Regulatory dynamics
industry anecdote
1. Digital currency market
Market overview
According to CoinGecko data, as of 14:00 on July 10, 2020, the total market value of the cryptocurrency market was 272.8 billion US dollars, and the total market value increased by 3.6% on the 7th. The market sentiment index is 41, which is panic level; USDT OTC premium rate -0.00552%, OTC average price ¥6.97; Bitcoin spot 24H net outflow ¥419 million, Bitcoin contract 24H net outflow ¥4.025 billion.
According to OKEx spot, as of 14:00 on July 10, BTC was temporarily at $9160.6 (-2.49%), and OKB was at $4.887 (-4.22%). The long-short position ratio of OKEx contracts continued to be hindered at 1.1 (1.08). As the total open interest reached a phased peak, there are signs of a temporary decline.
1. Digital currency market
1. Data: Ethereum DApp accounts for nearly 50% of Bitcoin transaction volume
State of the dapps data shows that as of July 7, the transaction volume of Ethereum DApps was 101,000. This means that DApps on Ethereum process 1/3 of Bitcoin’s 300,000 transactions per day, and often account for 50% of Bitcoin’s transaction volume. Currently, about 5,000 smart contracts are active on the Ethereum network, and nearly 3,000 DApps are running on the network.
[Interpretation] Becoming the "world computer" is the ultimate goal of Ethereum, and carrying a large number of DApp applications is the meaning of this computer. 2020 is the most popular year for DeFi. Maker DAO, Compound, etc. all belong to the category of DApps. With the launch of Ethereum 2.0 in autumn and the performance has been greatly improved, more DApp applications will inevitably be born.
2. Sources: Coinbase has started preparations for listing, and the listing may be completed within the year at the earliest
On July 9, according to Yahoo Finance citing a Reuters report, sources said that the digital asset trading platform Coinbase has begun IPO preparations and may complete the listing as early as this year, and is expected to become the first mainstream US encryption exchange listed. It is reported that in the latest round of financing in 2018, Coinbase was valued at more than $8 billion.
[Interpretation] As a leader in the exchange field, the listing of Coinbase is of great significance to the blockchain industry. Unlike Canaan and Ebang International, which are looking for cash flow relief when they go public, the top exchanges have abundant cash flow and strong profitability. , the greater significance of a successful listing is to attract more institutional and individual investors to pay attention to the encryption ecology.
3. Data: OKEx had more than 8,000 transfers of whales worth more than 10 BTC in June
According to Cointelegraph, the latest report from Kaiko, a cryptocurrency market data analysis agency, shows that the OKEx exchange had more than 8,000 Bitcoin whale transactions (with a transaction volume of more than 10 BTC) in June, more than any other exchange. The largest transaction of 513.1 BTC that month also appeared on OKEx. The average amount of whale transfers is slightly higher than 33 BTC, which is also ahead of other exchanges. In addition, the volume of buy orders for whales on OKEx is almost double that of sell orders.
[Interpretation] The more large orders in spot trading, the better the depth of the exchange, the higher the user activity, and the smaller the price difference between buying and selling, which is beneficial to spot traders.
4. Users report that Voice has design flaws and access delays
According to CryptoNews on July 6, the decentralized social media Voice supported by Block.One was launched on July 4. However, some users have complained about its delayed access, while others have pointed to potential design flaws. On Reddit, a user who claimed to own EOS and said he had gained access to Voice "on day one" wrote that the platform was "really disappointing" and that you can't even change your profile picture on the platform. It is reported that the platform initially only allows registered users to post and participate, and registration will only be kept until August 15, when users can invite friends to join Voice. Many on social media have expressed their dismay at Voice's failure to grant them access.
[Interpretation] On July 3, Voice was launched ahead of schedule, but after a short period of launch, a "1020 error" appeared on the website. Regarding this, Cardano founder Charles Hoskinson tweeted: "I feel that some people are starting to worry." So far, Voice has only been online for a week. Although there are many negative voices, it is impossible for any new product to be 100% perfect at the beginning of its launch. Given time, Voice may be able to change.
2. Focus on DeFi
1. The locked capital of DeFi exceeds 2 billion US dollars, and the locked funds of the top five projects account for about 94% of the total locked funds
[Interpretation] At present, the total market value of DeFi project tokens is close to 7.7 billion US dollars, and more than a month ago, this figure was only 1 billion US dollars, which is enough to reflect the popularity of DeFi. The reason why DeFi projects will rise rapidly is that decentralized finance driven by blockchain is in its infancy. DeFi advocates that individuals and institutions can access almost all financial applications without going through trusted intermediaries, especially in the past People who cannot obtain certain financial services will benefit from this, which has huge imagination and attraction for capital.
3. Industry voice
2. Xu Kun: At present, DeFi faces three major challenges: code loopholes, systemic risks, and asset on-chain
Xu Kun, chief strategy officer of OKEx, posted on Weibo that DeFi is currently facing three major challenges: first, code loopholes. Programmable finance represents the power of technology, but loopholes after code stacking are always inevitable; Whether it is traditional finance or programmable finance, systemic risks must be considered, such as whether the DeFi ecosystem can carry it when faced with extreme market fluctuations; the third is asset on-chain, and the complexity and uncertainty of asset on-chain are critical to the entire DeFi It is a very big challenge for the industry, and requires pioneers to try.
[Interpretation] At present, the development of DeFi is in full swing, but the problems faced should not be underestimated. First of all, in the past five months, there have been 5 incidents of DeFi projects being stolen, involving an amount of 35 million US dollars. Secondly, when the black swan event in the currency circle came on March 12, the sharp decline in the cryptocurrency market and the abnormal congestion of the Ethereum network caused a Domino-like reaction in DeFi, resulting in the failure of millions of dollars in collateral in the Maker system to be normalized. Auctions, bad debts, and the decentralized stablecoin Dai once had a 10% premium... The lock-up value of the entire DeFi market has shrunk by nearly half. Finally, due to the particularity of blockchain assets, DeFi still has a long way to go in terms of market education. Therefore, no matter how popular the DeFi project is at the moment, investors must remain alert to this new thing.
3. Industry voice
1. CFTC Chairman: Waiting for SEC to allow futures trading of more digital assets
According to Cointelegraph on July 8, Heath Tarbert, chairman of the US Commodity Futures Trading Commission (CFTC), outlined in an interview the difference between the work of the CFTC and its sibling regulator, the US Securities and Exchange Commission (SEC). Tarbert said the CFTC is waiting for the SEC to allow futures trading in more digital assets. Determining whether a digital asset is a security is “the sole responsibility of the SEC,” he said. If they determine it's not a security, then the CFTC has jurisdiction to bring it under its own jurisdiction. Tarbert added: "Once people start to have a clear idea of whether something is a security, you will start to see more futures on digital assets. Currently, Bitcoin and Ethereum are classified as commodities in the United States, which is why this Futures contracts in both currencies are legal in the United States.”
[Interpretation] The U.S. Commodity Futures Trading Commission (CFTC) and the U.S. Securities and Exchange Commission (SEC) have different jurisdictions. The former manages assets in the commodity category, while the SEC is responsible for classifying different assets. As early as October 2019, the staff of the Investment Management Department of the US Securities and Exchange Commission stated in a letter that Bitcoin is not a security. Prior to this in March, Ethereum was also deemed not to be a security by the SEC. Therefore, the CFTC has the authority to trade Bitcoin and Ethereum futures contracts.
2. Pantera Capital founder: Altcoins will outperform Bitcoin in the next few years
According to Cointelegraph on July 8, Dan Morehead, founder of cryptocurrency venture capital firm Pantera Capital, said that in the short term, his company will bet on altcoins. He believes that these altcoins, especially small-cap smart contract tokens, will outperform Bitcoin in the coming years.
[Interpretation] Due to the small volume of altcoins, less funds can achieve greater gains, but investors in altcoins need to face the risk of assets returning to zero. Throughout the history of cryptocurrency development, there are as many as thousands of Cryptocurrencies faded away, but Bitcoin stayed strong. Therefore, investing in altcoins is faced with the choice of getting rich or returning to zero, while investing in Bitcoin is faced with the difference between earning more and earning less.
3. Research Director of The Block: Understanding Compound is like not understanding the fractional reserve banking system
On July 5, Larry Cermak, director of research at The Block, tweeted that Compound actually shows how many of you don't know what fractional-reserve banking is. How could you possibly want to kill it without knowing what it is?
Note: Fractional reserve banking is a form of regulation in the modern banking system. Relevant financial institutions are required by law to reserve a certain percentage of the deposits they absorb in the form of central bank deposits (or cash on hand).
[Interpretation] Let’s popularize science first. The deposit reserve ratio (referred to as the reserve ratio) refers to the capital ratio that commercial banks need to pay to the central bank when deposits are deposited in commercial banks and are lent out again. For example, if a commercial bank receives a deposit of 1 million yuan, the commercial bank can only lend 900,000 yuan of it, and the remaining 100,000 yuan must be handed over to the central bank as a reserve, so the deposit reserve ratio is 10%. The reserve ratio determines the multiplier of the currency. If the reserve ratio is 10%, the central bank's base currency will be magnified by 10 times. The deposit reserve ratio can also explain the lending relationship between DeFi projects. For example, some time ago, some media reported that the amount of Dai issued by Maker was less than 200 million, but Compound has lent more than 500 million Dai. This is what the Compound project will get back. Customers’ pledged Dai was repeatedly lent to lenders, resulting in the amount of Dai loaned out by the platform being higher than the total amount issued, which is very common in traditional financial markets.
4. Regulatory policy
1. The US CFTC promises to develop an "overall framework" for digital assets by 2024
2. FATF will discuss strengthening the global regulatory framework for virtual asset service providers in October
5. Blockchain industry empowerment
Recently, the Financial Action Task Force (FATF) submitted a report on stablecoins to the G20 finance ministers and central bank governors. The report stated: 1. Stablecoins have a certain role in promoting financial innovation and financial inclusion, and are likely to be adopted on a global scale. At the same time, they will also lead to currency centralization and money laundering and terrorist financing (ML /TF) risks; 2. FATF calls for the implementation of revised FATF standards on virtual assets and virtual asset service providers (VASPs); 3. FATF will conduct a 12-month second review by June 2021, In order to continue to strengthen the monitoring of virtual assets and VASP, and will consider whether it is necessary to further update the FATF standards; 4. FATF will strengthen the cooperation between VASP supervisors and institutions, and call on the G20 to set an example to establish a global 5. FATF believes that central bank digital currency (CBDC) is not a virtual asset. Compared with cash, the anonymity, mass adoption, and portability of CBDC may introduce greater ML/TF risks. Similar to stablecoins, such risks should be addressed in a forward-looking manner before a stablecoin or CBDC is launched. According to CoinDesk, the FATF will meet in October to discuss how to create a stronger global cryptocurrency regulatory framework.
3. Malaysian Securities Commission: Unauthorized operation of encrypted ATMs is an illegal act
The Securities Commission Malaysia (SC) today warned the public not to use crypto ATMs, saying in a statement: “The SC wishes to remind the public that entities operating crypto ATMs are considered to be operating a digital asset exchange (DAX), which requires a SC registration. However, SC has not authorized any entity to operate crypto ATMs. Citizens who participate in related activities are not protected by Malaysian securities laws and will face various risks, including fraud and money laundering.” SC also warns all unauthorized crypto ATMs in Malaysia The operator immediately ceases its activities. Operating a DAX without an SC license is an offense under Malaysian securities laws.
5. Blockchain industry empowerment
On July 9, according to Xinmin Evening News, the reporter learned from Tongji University yesterday that the world's first blockchain international journal IET Blockchain was officially released on the occasion of the Cloud Summit of the 2020 World Artificial Intelligence Conference. It is reported that IET Blockchain is a new open access journal jointly launched by the British Institution of Engineering and Technology (IET), Tongji University, and Shanghai Blockchain Application Service Engineering Technology Research Center (SERCBAAS). Cutting-edge research results, technological innovations and latest viewpoints related to industrial development. IET Blockchain is fully open access. Researchers all over the world can read and download research results published in journals for free through the Internet.
According to a Caixin report on July 8, Didi, Meituan Dianping and Bilibili (Bilibili) have all cooperated with a number of banks involved in digital currency projects. Among them, Meituan Dianping may try to expand usage scenarios such as Meituan bicycles, while the cooperation between Bilibili and participating banks has entered the stage of technology development. In addition, companies such as ByteDance are also discussing the possibility of cooperation with banks.
According to the Shenzhen Evening News on July 5, recently, the Shenzhen Blockchain Electronic Invoice System Project won the "Shenzhen Mayor Quality Award (Gold Award for Service)". The Mayor's Quality Award is the city's highest quality honor established by the Shenzhen Municipal People's Government. It aims to reward organizations and projects that have made positive contributions to Shenzhen's quality construction and demonstrated a leading role. Data show that Shenzhen's blockchain electronic invoices have accumulated a total of 25.9 billion yuan invoices, nearly 20,000 registered companies, and a total of 25 million invoices.
6. Industry anecdotes
3. Caixin: In addition to Didi, Meituan and Bilibili have also cooperated with banks participating in the central bank’s digital currency project
According to a Caixin report on July 8, Didi, Meituan Dianping and Bilibili (Bilibili) have all cooperated with a number of banks involved in digital currency projects. Among them, Meituan Dianping may try to expand usage scenarios such as Meituan bicycles, while the cooperation between Bilibili and participating banks has entered the stage of technology development. In addition, companies such as ByteDance are also discussing the possibility of cooperation with banks.
Earlier news, a few days ago, the Central Bank's Digital Currency Research Institute and Didi Chuxing formally reached a strategic cooperation agreement to jointly research and explore the scene innovation and application of digital renminbi in the field of smart travel. The two parties expect to establish a cooperative relationship to promote the platform ecological construction of digital renminbi in diversified travel scenarios.
6. Industry anecdotes
1. Former Bitcoin Foundation director Brock Pierce announced that he is running for the 2020 President of the United States
On July 5, former Bitcoin Foundation director Brock Pierce tweeted that he was running for the 2020 President of the United States.
【Interpretation】The Bitcoin Foundation (Bitcoin Foundation) was founded in July 2012. It is a non-profit organization aimed at advocating the development of digital cryptocurrency globally. With the vision of regulating, protecting and promoting Bitcoin, it leads the international Bitcoin community. development of. In 2014 Brock Pierce was appointed to the Bitcoin Foundation Board of Directors. An entertainer and entrepreneur, Brock Pierce broke into acting at the age of 12, starring in "Ice Boys", but since then, Brock Pierce has been accused of participating in a child sexual abuse incident in the late 1990s , He confessed to this. Therefore, Brock Pierce's election as a director of the Bitcoin Foundation has caused great controversy.
2. After Dogecoin experienced skyrocketing due to TikTok video, the official reminded traders to pay attention to safety
Recently, due to the crazy spread of a Dogecoin (Dogecoin) challenge video on the short video platform TikTok, the price of Dogecoin rose by 50% within 24 hours. As of 16:00 on July 8, its price was about $0.0038. It is the highest price since October 2018. On July 8, Dogecoin’s official Twitter warned traders not to engage in speculative activities, “Please make the right choice, don’t be influenced or manipulated by other people’s FOMO, be safe and be smart.”
