Blockchain Confidential - 22 April 2022
Beanstalk hacked, Blockchain.com plans IPO in the next year, Goldman Sachs & FTX are talking
Beanstalk, a DeFi credit protocol, suffered a $182 million hack this week via a flash loan attack, manipulating its governance protocol. The exchange wallet service Blockchain.com is contemplating an IPO later this year. Monero enthusiasts staged their own bank run to see if they could flush out centralized exchanges overstating their reserves. MakerDAO is integrating the StarkNet protocol, a Layer 2 networks on top of Ethereum based on ZK roll-ups; the aim is to reduce DAI transaction costs and speed up transactions as well. Like many of its DeFi brethren, the dYdX decentralized derivatives exchange planed to convert to a DAO to fully decentralize its operations and governance. Tesseract is going to white-label its yield platform so second-tier exchanges can enhance their offerings to better compete with Binance, Coinbase and other top centralized exchanges. Coinbase launched their NFT marketplace beta. Tron will launch its USDD algostable in early May, taking aim at Terra’s popular UST stablecoin. Finally, Goldman Sachs is reportedly exploring a working with FTX, possibly assisting with their CFTC application or advising them on a future IPO.
The Good Read
This week we recommend a paper on IPOR, the Inter-Protocol Offer Rate, an attempt to establish a lending & borrowing interest rate benchmark for DeFi. Read IPOR Index - The Heartbeat of DeFi.
Andre Cronje, creator of yearn.finance, seems to be having a crisis of faith and came out in favor of more aggressive regulation of crypto. Two Republican lawmakers weighed in on recent SEC rule-making around crypto exchanges which might require them to register as broker-dealers. Simplify filed an application of a novel ETF blending Bitcoin futures, Treasuries and option strategies. The OCC is going after Anchorage for alleged weak AML policies. At the U.S. state level, firms subject to New York’s BitLicense will have to pay a fee to help fund regulatory oversight.
The IMF in its Global Financial Stability report highlighted accelerating “cryptoization” in emerging markets as a potential concern, as it has done previously; they also highlighted crypto as a vector for sanctions evasion and systemic risks from DeFi, especially stablecoins. In related news, Binance responded to calls to limit services for users in Russia over sanctions evasion concerns. A digital ruble CBDC pilot may be on the way in 2023. Australian investors can now trade Bitcoin and Ethereum ETF’s from 21Shares; these are the first spot-based products in that market. Finally, regulatory actions have been matched by moves to establish self-regulatory organizations (SRO’s) spearheaded by industry; Cointelegraph surveyed the field.
At the Office
We had our first NYC team meeting at Rise Barclays this week; the fintech co-working space is excellent. We made further preparations for launch of the Serenity EAP (Early Access Program) in July, bringing on a second design partner. Makas rebuilt our cloud data storage engine; with this Serenity upgrade we are truly prepared for our ambitions to support petabytes of data in the cloud for risk analysis. We also brought Kong fully online as our API gateway, securing all the endpoints so we can offer API services to our design partners when EAP launches. Chloe Chen joined in Singapore this week and got off to a fast start, working with Ilya and Makas on our ModelOps strategy so Research can rapidly integrate new models. Boris, Bob and Ilya worked together on pricing library evaluations and Research continued a number of data vendor evaluations to support their risk models.