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ShapeShift To Require Membership Amid Regulatory Concerns

ShapeShift To Require Membership Amid Regulatory Concerns
ShapeShift is launching a new membership program that will become mandatory later this year, the company announced today on its website. The Switzerland-based cryptocurrency platform is ending its "exchange without accounts" policy that enables individuals to privately trade Bitcoins, Ethereum and other digital coins with anonymous counterparties located anywhere in the world. But to alleviate privacy and know-your-customer (KYC) concerns from its users, the company positioned its new requirement as a "loyalty program" called ShapeShift Membership. The rewards program gives users benefits for frequent use such as volume discounts and higher transaction limits. "Membership requires basic personal information to be collected," according to ShapeShift's Sept. 4 statement. "Today, Membership is optional, but it will become mandatory soon." CEO Erik Voorhees said that requiring personal information "sucks" — which undoubtedly expresses the sentiment of thousands of users. (The story continues below.)   ShapeShift Launches Membership Program Voorhees conveyed in the Sept. 4 blog a few reasons for departing from the original policy. First, there were "requests of many of our users to have account-related features: A record of transaction history, saved/whitelisted addresses, and email notifications." Second, "Our increasing interest in the broad phenomenon of tokenization – the ability to “financialize” and bring liquidity to various aspects of business/customer relationships. Specifically, the ability to build tokenized loyalty programs, in which the engagement between a business and its customers can itself become an asset." Cash From Institutional Investors The company was founded in August 2014 and has undergone five funding rounds that raised $12.8 million, according to data from Crunchbase. Investors include prominent blockchain institutions such as Blockchain Capital, Pantera, EarlyBird and Access Venture Partners, among others. While user privacy has always been a priority for many cryptocurrency users, ShapeShift's management team believes they're taking a pragmatic approach when it comes to multi-jurisdictional compliance and complex red tape. Bringing in cash from big investors creates the need to align with tightening regulations, as well as, need to reduce legal risks for the company, its shareholders and other stakeholders. Collecting Personal Information A Thorny Issue CEO Voorhees acknowledged that mandating the collection of personal information "sucks." He added, "We would prefer if the collection of personal information was not a mandatory element. We still firmly believe that individuals, regardless of their race, religion, or nationality, deserve the right to financial privacy." ShapeShift is hardly alone. Most other major exchanges have implemented KYC protocols that require traders to submit proof of residence, government-issued IDs and other sensitive information — data that can be obtained by bad actors such as hackers and overzealous bureaucrats. Critics of personal data collection argue that KYC defeats the point of crypto's ability to facilitate anonymous and borderless transactions that make unnecessary the function of third parties. That includes the government and banking parties that perpetually debase their national currencies. But in this regulatory environment, prudence wins. "The practice of requiring customers to hand over personal private information is one we’ve struggled with since inception," said CEO Voorhees. "To the extent that digital asset technology remains a legal grey area, we need to be prudent and thoughtful in our approach as we navigate the regulatory environment." Articles by Marvin Dumont: Cryptos To Reach $3.6 Trillion In 10 Years, Bitcoin At $143,000 Starbucks, Microsoft Back Bitcoin ETF And Stakes Are Huge Disclaimer: The views and opinions expressed in this article belong solely to the author. Information contained herein should not be construed as investment advice.

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How has the DeFi market changed in 2020?

How has the DeFi market changed in 2020?

Decentralized finance has become the # 1 hot topic in the cryptocurrency world in 2020. Users from all over the world have joined an alternative financial industry that offers lending, deposits, investments, trading, and a number of other instruments that were previously completely controlled by traditional financial institutions.

According to Google Trends, interest in DeFi has more than tripled this summer compared to previous years. Although this industry has been on the market for a long time, the real popularity came to it in 2020. We can say that Bitcoin became the first decentralized financial instrument. The second “restart” of the idea was implemented by Vitalik Buterin and his partners, who created Ethereum and smart contracts. The Ethereum network has shown how popular blockchain projects can be, and what tasks they can solve.

And now, in 2020, decentralization has reached financial services. When society saw the possible potential of DeFi in the implementation of classic financial instruments, the industry's success was irreversible. In a very short time, decentralized finance attracted billions of investments, and thousands of new projects appeared on the new market.

Decentralized finance has a capitalization of more than $ 12.4 billion, according to DeFi Pulse. And at its peak, this figure almost reached 15 billion. But even more surprising is the dynamics of decentralized finance capitalization: a year ago it did not exceed $ 700 million, and over the past 5 months it has grown 12 times!

According to Defi Dapp Review, about 70% of all blocked funds are in projects that specialize in lending and loans. It can be argued that this is the mainstream of the industry with the highest popularity.

Among the startups that hit the market in 2020, there were many "unicorns" whose price increased by thousands of percent, and then also plummeted downward. The reason for this was the usual speculation, as it once happened with cryptocurrencies.

Another major achievement of DeFi was the development of DEX - decentralized exchanges. The main difference between such trading platforms from centralized ones is the absence of the exchange's role as an intermediary between the seller and the buyer. In fact, all asset exchange operations take place directly between users, and the exchange is only a platform for such deals.

The rise in popularity of DEX has led centralized cryptocurrency exchanges to lose trading volume in favor of decentralized ones. In early autumn 2020, the aggregate trading volume of the 10 largest decentralized exchanges exceeded $ 30 billion. These are very serious indicators for such a young industry. However, DEX still have some problems with market making.

It's no secret that many experts and people just following the news compare the BOOM of DeFi's popularity to the 2017 cryptocurrency market rally. It's no secret that many experts and people just following the news compare the BOOM of DeFi's popularity to the 2017 cryptocurrency rally. And these two processes have a lot in common. First, DeFi is also a fledgling industry that attracts a lot of "easy money lovers". You can really make money on this, but just as quickly you can lose. DeFi is also attracting a lot of scammers, just like cryptocurrencies in the “Age of ICO”. Along with really high-quality projects that solve urgent problems, thousands of one-day projects appear on the market, the main task of which is to make money. In most cases, the team of such a project does not care about its future.

And the last similarity is the technical imperfection of decentralized finance. There are several reasons for this, among them: the novelty of the technology, which implies many early bugs; limited development budgets; the inexperience of the creators and developers of DeFi startups. It turns out that technical imperfection limits the potential of truly great technology.

To solve all of the above problems, we can use the experience of cryptocurrency startups. When professional teams work on decentralized projects, when the budget is enough to develop a quality product, then even skeptics will believe in the industry. It is fair to assume that getting large companies involved in decentralized finance can take DeFi to a whole new level. And there is already some progress in this direction.

The information about the launch of the project on decentralized finance xSigma, which is being prepared by the public company ZK International Group, has been confirmed. First of all, the xSigma DeFi department is going to solve the biggest problem in the industry - problems with market making on decentralized exchanges. The new DEX from xSigma should unleash the potential of the decentralized trading idea, providing users with not only a technically high-quality platform but also a user-friendly interface. 

The launch of the decentralized exchange will be only the first stage in the development of the xSigma's DeFi ecosystem. In the future, the company plans to expand the list of services, as well as create new financial instruments. In 2 years, the xSigma team plans to release a stablecoin that will become part of their ecosystem.

xSigma’s product team is led by Alex Lebed, a software engineer with career stops at Facebook, Amazon, 1Inch, and also the founder of Stableunit.org. The team also features Harvard graduate and former Google engineer Kamal Obbad, and Daniel Garay, a project manager formerly of Ripple Labs and Google.

We have high hopes that such a serious approach will significantly improve the fledgling decentralized finance industry. Of course, the importance of pioneer DeFi startups to the industry is undeniable. After all, it was they who made the whole world talk about decentralized finance. However, for this technology to develop and improve, a lot of work still needs to be done. And I want to believe that the community will succeed!

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Adam back: Bitcoins bullish trajectory isn’t over yet

Adam back: Bitcoins bullish trajectory isn’t over yet

Quick Take

1 minute read

  • Currently priced above $19,000 at the time of writing, bitcoin is on a trajectory that is very exciting. 
  • So passing numerous key resistance levels over the course of this year in the last few months, the leading cryptocurrency and its adoption rates are rising consistently. 

Currently priced above $19,000 at the time of writing, bitcoin is on a trajectory that is very exciting. Surpassing numerous key resistance levels over the course of this year in the last few months, the leading cryptocurrency and its adoption rates are rising consistently. Even making its way back into the news bitcoin has seen more than 140% in gains this year. 

Adam Back believes that the good times are yet to be over though as it will eventually fully succumb into a digital world.

Writing in a tweet earlier this week, the chief executive officer of Blockstream gave the opinion that bitcoin and its power as a form of digital gold can make it a game-changer in the future and the world of financial solutions.

This all came about when Adam was replying to a comment from the well-known crypto analyst Willy Woo who compared the spike in bitcoin to the relationship between early technologies and the successes that followed.

Bitcoin has been compared to digital gold on numerous occasions over the years. Many people see bitcoin though as a much more secure and faster option to the precious-metals as a credible store of value. Critics of the leading cryptocurrency would say differently however but many people have projected that the digital asset will soon overtake gold and become the dominant store of value asset in the future.

For more news on this and other crypto updates, keep it with CryptoDaily!

© 2020 CryptoDaily All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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The biggest bank in Russia is getting ready to launch its own blockchain platform

The biggest bank in Russia is getting ready to launch its own blockchain platform

Quick take

1 minute read

  • The largest bank in Russia is getting ready to launch a new blockchain platform for trading as well as a native token. 
  • As a new law comes into effect in the country, Sberbank is getting ready to jump in the deep end for cryptocurrency in 2021 when the new law “on digital financial assets“ comes into effect in Russia.

The largest bank in Russia is getting ready to launch a new blockchain platform for trading as well as a native token. As a new law comes into effect in the country, Sberbank is getting ready to jump in the deep end for cryptocurrency in 2021 when the new law “on digital financial assets“ comes into effect in Russia.

The chief executive officer of the Russian bank, Sberbank revealed the news earlier this week and with over 96 million clients, this makes the bank the biggest one in the country.

Earlier this year, there were rounds of rumours and speculation as to whether the bank was looking to issue its own stablecoin cryptocurrency. Given that the DFA law does not allow for a number of crypto-related activities, it didn’t seem that a stablecoin would be backed by the ruble in Russia.

There have been news reports in regards to Russia creating its own central-bank digital currency though and it will be very exciting to see where this goes in the future. Russia has had a rough history with cryptocurrency in the past but now it seems that things are about to change in 2021.

For more news on this and other crypto updates, keep it with CryptoDaily!

© 2020 CryptoDaily All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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Should the US follow in China's footsteps when it comes to CBDCs & online remittance services?

Should the US follow in China's footsteps when it comes to CBDCs & online remittance services?

Quick take

1 minute read

  • Niall Ferguson, a historian on economics and finances in Britain has said that the United States needs to discover its own path when it comes to adopting cryptocurrency.
  • This comes as many countries all around the world, including the US, are going off what China has done when it comes to creating its own electronic payment system.

Niall Ferguson, a historian on economics and finances in Britain has said that the United States needs to discover its own path when it comes to adopting cryptocurrency. This comes as many countries all around the world, including the US, are going off what China has done when it comes to creating its own electronic payment system.

Over the weekend, Ferguson wrote in an opinion piece for Bloomberg that the pandemic has been nothing but good news for the world of crypto adoption and has really sped up the monetary revolution all over the world. But he did come on to highlight that China has been quickly advancing when it comes to the rule out of its digital yuan and the increasing use of mobile payments such as WeChat and Alipay. They allegedly deal with $40 trillion worth of transactions on a yearly basis.

Ferguson goes on to note that the measures put in by China are being used as a template for many other countries all over the world when it comes to developing a cross-border payments system and remittance payments. But he interestingly advised the United States not to follow suit, saying:

“Even governments that are resisting Chinese financial penetration, such as India, are essentially building their own versions of China’s electronic payments systems. Rather than seeking to create a Chinese-style digital dollar, Joe Biden’s nascent administration should recognize the benefits of integrating Bitcoin into the U.S. financial system.”

It will be interesting as to whether anyone in the United States will pay attention to what Ferguson has said. Following in the footsteps of China could prove successful but may not be any different from what China is actually doing when it comes to creating a central-bank digital currency or online remittance service.

For more news on this and other crypto updates, keep it with CryptoDaily!

© 2020 CryptoDaily All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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