The cryptocurrency business is thriving, but a lot of things are happening, including, VeChain signing a partnership with Boston Consultant Group (BCG), Gains Network emerging as a rising star in Arbitrum’s thriving $2B DeFi ecosystem, Arbitrum DEX ArbiSwap rug-pulling users for over $100K, and much more!
In this issue:
- 2023 will be the year of crypto token price divergence: Bank of America.
- VeChain signs partnership with Boston Consultant Group (BCG).
- Gains Network emerges as a rising star in Arbitrum’s thriving $2B DeFi ecosystem.
- Binance CEO Changpeng Zhao affirms support for Voyager deal amid SEC scrutiny.
- Uniswap wants to launch a crypto wallet app, but Apple says not so fast.
- French National assembly votes for tougher registration rules for crypto firms.
- Arbitrum DEX ArbiSwap rug pulls users for over $100K.
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2023 will be the year of crypto token price divergence: Bank of America.
The cryptocurrency market is off to a much better start this year than most had expected with the token universe up 42% year-to-date to $1.1 trillion, Bank of America (BAC) said in a report.
“We expect 2023 to be the year of token price divergence,” the report said, “with tokens that provide utility and a call on cash flows outperforming meme and governance tokens.”
The bank views cryptocurrencies that power smart contract-enabled blockchain platforms, on which developers can build applications, as growth assets exposed to the same risks as growth stocks. It notes that these cryptos, and small-cap liquid tokens, have led this year’s rally.
Bank of America strategists remain cautious on growth, as strong economic data delayed the timing of a recession, but this also “indicates the potential for reflation and additional rate hikes.”
“Given that January’s risk asset rally was partially driven by short-covering and mean reversion, the likely higher-for-longer rate environment may result in pressure for growth and, therefore, digital assets,” analysts Alkesh Shah and Andrew Moss wrote.
Shorting is a way of betting that a price will decline. An investor borrows a security and sells it hoping the price will drop. They then repurchase the security and return it to the lender. Mean reversion is a theory used in finance that suggests asset prices tend to revert to their long-term mean or average level.
VeChain signs partnership with Boston Consultant Group (BCG).
VeChain Foundation announced its partnership with Boston Consultant Group (BCG), one of the largest US-based management consulting firms operating globally.
According to BCG Managing Director Dr. Guy Gilliland, the global consulting firm was fascinated by VeChain’s capacity to “solve real-world problems with a greater purpose.”
BCG is arguably the second-largest global consulting firm with annual revenue of $11 billion and a workforce of 25,000 operating in more than 100 countries.
The partnership also revealed that over 50% of harmful emissions in the world today come from the supply chain industry and that using blockchain-based solutions could drastically reduce the figure by 80%.
VeChain Foundation and BCG announced the partnership a couple of hours ago during the HiVe Summit, a Web3-based sustainability event in Las Vegas hosted by VeChain. Aside from partnering with BCG, VeChain also launched its new website and whitepaper. Meanwhile, the summit also unveiled VeChain’s plans to develop a Web3-based carbon market starting with 2D nanomaterial graphene production and smart contracts.
Gains Network emerges as a rising star in Arbitrum’s thriving $2B DeFi ecosystem.
DeFi ecosystem Arbitrum, a Layer 2 scaling solution for Ethereum, has now become the fourth-largest decentralized finance, with over $2 billion of total value locked (TVL).
While decentralized perpetual exchange $GMX leads the ecosystem, a rising star has been capturing attention through Gains Network ($GNS).
Gains Network has been gaining traction with its gTrade perpetual futures exchange, which offers leverage trading on multiple asset classes, cryptocurrency research firm Delphi Digital said in a research report. Gains Network borrows concepts from the MakerDAO model to offer synthetic leverage trading with greater capital efficiency, similar to Synthetix. Users can stake GNS to receive platform fees paid in DAI, allowing them to deliver real yield without relying on token emissions. With Gains, gDAI liquidity providers (LPs) act as trader counterparties as vault depositors supply DAI to earn yield from trading fees and liquidations. GNS acts as a backstop while earning a portion of trader losses.
Gains Network’s emphasis on sustainable token economics has helped fuel its growth, reflected in its ranking as the fourth-highest protocol earnings in all cryptocurrencies over the past six months, the report further stated.
Arbitrum’s thriving DeFi ecosystem has started luring established projects from other chains, and Gains Network is one of these projects that has been successfully deployed on Polygon.
Binance CEO Changpeng Zhao affirms support for Voyager deal amid SEC scrutiny.
Binance CEO Changpeng Zhao has reiterated the company’s support for the Voyager deal, despite objections raised by the U.S. Securities and Exchange Commission (SEC).
The SEC opposed the acquisition of Voyager Digital by Binance US, which was entered into in December. However, US Bankruptcy Judge Michael Wiles on Thursday questioned the regulator’s lack of explanation and action on the matter.
“Deliberative is one thing, but what have you done? If there are reasons to be concerned here, I need to hear specifics,” he said.
“I’m shocked a regulator would come in and say: ‘I’m charged with regulatory authority over these things. These are reasons that I have concerns because they’re within my regulatory jurisdiction, but I’ve done nothing, I have nothing to offer to you,” Wiles added.
Responding to a tweet, Zhao stated, “Maybe we should pull out?” He later clarified that Binance remains committed to the deal and returning funds to users as quickly as possible.
Recently, questions have been raised about Zhao’s reported contemplation of backing out of the Voyager deal due to U.S. regulatory scrutiny. A Binance spokesperson has dismissed these headlines, confirming the company’s commitment to the Voyager transaction.
Uniswap wants to launch a crypto wallet app, but Apple says not so fast.
Uniswap Labs, which backs the top decentralized exchange (DEX) on Ethereum, is planning to launch a mobile crypto wallet for iPhone users, but Apple (AAPL) seems to have other ideas.
“Apple won’t yet green-light our launch and we don’t know why we have responded to their concerns, answered every question, and reiterated that we are 100% compliant with their specifications,” a spokesperson for Uniswap Labs said.
The unexplained delay may add to Apple’s perception as a hardline gatekeeper in regulating the crypto world’s access to iOS, its mobile software ecosystem. The iPhone maker has refused to adapt its commerce policies to accommodate some crypto companies and also bans crypto trading apps that don’t use an “approved exchange.”
As a DEX, however, it’s unclear if Uniswap could ever meet Apple’s “approved exchange” criteria. Apple did not immediately respond to a request for comment.
In a press release, Uniswap Labs said its planned mobile app is primarily a self-custodial crypto wallet, meaning users will have full ownership and control over their assets. The app will also offer the ability to “trade tokens directly with” Uniswap, where more than $1.2 billion in average 24-hour trading volume makes it by far the most trafficked decentralized finance (DeFi) exchange. Rather than wait around for Apple, Uniswap Labs said it plans to release its app to 10,000 users via the TestFlight beta platform.
French National assembly votes for tougher registration rules for crypto firms.
Crypto firms will face tougher rules to register in France as of January, under plans voted on by the National Assembly on Tuesday that are now set to pass into law.
Lawmakers voted 109-71 in favor of rubber-stamping plans, already approved by the Senate, that will see extra requirements on internal controls, cybersecurity, and conflicts of interest.
The new rules have been introduced in the wake of recent market turmoil, and as the country prepares for the arrival of new laws from the European Union.
France is hoping to set itself up as a crypto hub, and companies such as Binance and Bitstamp have already successfully registered with France’s Financial Markets Authority (AMF). Registration involves checks on governance and money laundering norms and is mandatory for all those offering trading or custody services in the country. No firm has so far gained a license, a more burdensome procedure than registration of complying with financial norms.
Strengthening France’s regime was originally proposed by Senator Hervé Maurey in December, who cited the collapse of the FTX crypto exchange and the need to avoid loopholes in the period before the EU’s Markets in Crypto Assets Regulation (MiCA) takes effect. The industry feared his plan was unworkable and damaging, though regulators themselves supported the move.
In the end, both chambers of the French parliament have settled on a compromise proposal that adds extra registration requirements as of January 2024 but doesn’t force companies to seek a license. The Senate previously voted in favor of that proposal on Feb. 16.
Arbitrum DEX ArbiSwap rug pulls users for over $100K.
The newly-launched ArbiSwap app appears to have rug-pulled users after removing over $100,000 from the platform’s liquidity pools.
ArbiSwap’s native $ARBI tokens fell from $1.5 to a fraction of a cent in the past 24 hours. Blockchain data shows the developers minted 1 billion fake tokens, swapping these for USD Coin (USDC) and then for nearly 69 ether (ETH).
This was possible as the rogue developers controlled the project’s liquidity pools. Liquidity pools refer to the token pairs held by smart contracts on decentralized exchanges, with developers initially seeding both sides of a token pair.
Blockchain data from DEXTools shows just $4 million in liquidity on ArbiSwap in European morning hours on Thursday. The service was launched in February and quickly grew to $4.4 million in total locked value (TVL).
ArbiSwap offered the swapping of various cryptocurrencies for low fees on its platform and advertised giving back 100% of all generated revenue to holders of ARBI, which likely piqued the quick interest for ArbiSwap among users.
The move is a textbook rug pull, a scam carried out by developers who launch a working decentralized finance application and carry out social media marketing to popularize it before issuing a token and listing it on a decentralized exchange (DEX). After investors have purchased the tokens in the hopes of a positive return, the developers shut up shop, remove liquidity and disappear.
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