Blockchain Confidential - 27 May 2022

Terra about to re-launch, Uniswap hits $1T traded, Alan Howard tells all

The Week

It was a relatively quiet week in crypto after the recent drama, though maybe it was because everyone was busy partying at Davos.

For a couple of data points on mainstream adoption (or not), a Fed survey found that 12% of U.S. adults hold crypto, while the ECB reported that one in ten households in the eurozone hold crypto. Both found, unsurprisingly, that holding of crypto for investment purposes was skewed toward higher incomes. The popular Uniswap DeFi protocol broke $1T in trading volumes but it has only been used by 3.9 million addresses worldwide. And in a milestone, Coinbase became the first crypto company to join the Fortune 500 based on 2021 performance, though with more recent struggles it remains to be seen if it will be back in 2023.

Is there life after the start of crypto winter? Do Kwan’s plan to reboot Terra was approved, and is due to go live tomorrow. BNP Paribas joined JP Morgan’s Onyx network for fixed income trading. JP Morgan is also planning to leverage blockchain for collateral settlement. Following on Nomura’s recent moves, Sumitomo Mitsui announced plans to launch a digital asset custodian. Brevan Howard founder Alan Howard pulled back the curtain on his many forays into digital assets via BH Digital and other vehicles in an interview with The Block.

Meme stock GameStop is launching its own digital wallet for its NFT marketplace. In pop culture, Netflix’s “Love, Death + Robots” series will be promoted with an NFT-based scavenger hunt. Finally, while it’s not quite “Pigs … in … space …,” soon your NFT stored on the IPFS distributed filesystem may be available in orbit, thanks to Lockheed and Filecoin.

Regulator Radar

U.S. Senators Lummis and Gillibrand are going to put forward a crypto oversight bill next month, although it would be a long road to become law. Fed Vice Chair Lael Brainard spoke about CBDC and stablecoins in the House, and indicated that she saw a place for both given adequate oversight of stablecoin issuers. ECB head Christine Lagarde on the other hand expressed a view that crypto assets are worth nothing, and in a separate report the ECB worried about risks from crypto to the wider economy. Finally, in a report sure to worry those concerned about crypto as a channel for bypassing sanctions, Russia’s finance ministry is considering allowing use of crypto for international trade.

The Good Read

The B.Protocol DAO has an interesting post about their approach to DeFi risk assessment; read about it in Data Extrapolation Framework for Risk Assessment of DeFi Lending Platforms. And ISDA’s Digital Assets sub-group published a paper that responds to Basel’s stringent requirements for capital when holding crypto on your balance sheet. Is it too conservative? Read Crypto-asset Risks and Hedging Analysis.

At the Office

The team has been turning the crank all week to finish the Serenity MVP for July. Jose, Makas and Barry have been working together to get API authentication and authorization in tip-top shape for security, and Chloe and Boris worked together with Makas to get the very latest risk model integrated and tuned. Barry migrated the https://cloudwall.capital website to our cloud systems so we can maintain going forward; a DNS cutover is always fun. Thierry and Phil started backfilling our data lake with historical prices and refined the data pipelines to feed the model. Tanya looked ahead to wireframes for our post-MVP release this summer. Kyle and Jia Yng pushed forward with final pieces of company admin and setup in the U.S. and Singapore so we can run smoothly after recent growth. Ilya finalized our next data vendor contract and also worked with Bob and our design partners to expand our universe of supported tokens to ensure it fully covers their portfolios. Finally, Kevin Givens joined the Research team this week, bringing significant derivatives and market risk experience.