Uniswap First DeFi App to Lock Up $2 Billion in Ethereum

https://decrypt.co/43164/uniswap-first-defi-app-lock-2-billion-ethereum

Popular decentralized exchange Uniswap now has more than $2 billion in user value locked in the protocol, the same amount the entire DeFi ecosystem contained just three months ago.

Uniswap, which allows users to swap tokens and receive trading fee rewards for providing liquidity, has seen total value locked in the protocol rise more than 180% to more than $2 billion since September 16, following the distributed launch of UNI governance tokens for the platform. Users are apparently putting their faith in Uniswap’s trading volume to remain high.

What is Uniswap and How Does It Work?

Total value locked (TVL), a measure of the value of cryptocurrency and dollar-pegged stablecoin assets deposited in DeFi protocols, also passed $11 billion for all protocols on September 28 according to blockchain data aggregator DeFi Pulse. The rising metric is being fueled by growth in Uniswap and other DeFi protocols, as decentralized exchanges continue to grow their exchange volume month after month.

Uniswap has become the largest decentralized finance protocol by trading volume. DeFi protocols conduct core services like generating dollar-pegged loans or interest on deposits of digital assets using smart contracts, which automatically execute code running on blockchains like Ethereum. 

When token trades are made on a decentralized exchange, the exchange generally charges trading fees, which go directly to users who have locked value in the protocol. This incentivizes crypto traders to seek out exchanges with the greatest trading volume.

Until mid-September, Uniswap was under pressure from copycat protocols like Sushiswap, which attempted to reward users for transferring locked value to their own decentralized exchanges. The UNI governance token release on September 16, distributed in part to any Ethereum address that had interacted with Uniswap since launching in 2018, precipitated a flood of value back into Uniswap that has pushed TVL past the $2 billion mark. Governance tokens give holders a vote on decisions about future development of the issuing protocol.

Sushiswap, which peaked at more than $1.4 billion in TVL on September 11, has seen that number fall more than 70% since then, to less than $400 million locked today.

Decentralized exchanges have grown to service more than $44.5 billion in token swap volume in the past 12 months, with Uniswap increasingly emerging as the service of choice, according to blockchain data aggregator Dune Analytics. From less than $500 million in volume in June 2020, Uniswap volume has exploded to more than $13.8 billion so far in September.

Uniswap has served more than 100,000 unique trading addresses in the last 7 days alone. The next closest exchange by user count, Kyber Network, saw less than 2,000 unique addresses use its protocol in the same timeframe. Unless competitors can develop significant new capabilities and convenience, Uniswap will remain the decentralized exchange of choice for the next $10 billion in TVL.

Ethereum cumulative fees in 2020 eclipsed Bitcoin’s for the first time

https://cointelegraph.com/news/ethereum-cumulative-fees-in-2020-eclipsed-bitcoin-s-for-the-first-time

One type of “flippening” finally happened, but only miners are feasting.

Cumulative transaction fees paid to Ethereum (ETH) miners for 2020 are now close to double those of Bitcoin (BTC), clocking in at $276 million versus $146 million.

A chart released by Coinmetrics highlights how Ethereum fees went on a steep ascent in the latter part of the year, coinciding quite closely with the release of Compound’s token incentive. Cumulative 2020 fees on Ethereum equalized with Bitcoin’s on Aug. 12, continuing a break-neck ascent since.

Source: Coinmetrics

This marks a distinct change from trends in transaction fees from past years, where Bitcoin generally dominated over any other network by a wide margin. In 2019, Bitcoin came out with a five-to-one advantage in the same comparison.

Cointelegraph previously reported that Ethereum first began posting higher daily fee revenue in June. As activity increased and the average transaction fee with it, total revenue began skyrocketing. Between August and September, Ethereum began breaking previous records and quickly became unusable for some participants.

The culprit is most likely the boom of decentralized finance and yield farming, though stablecoin transfers and some alleged Ponzi schemes also make up a significant portion of block space usage on Ethereum.

The current state of affairs is likely to wind down somewhat as DeFi euphoria settles, similarly to what happened in the crypto market at large in 2018.

It’s interesting to note that Ethereum fee revenue briefly exceeded the block rewards for a few particularly high-activity days in the past few months. Overall, fees have crept up to steadily over more than 10% of total issuance since May — a threshold achieved only a few times in the coin’s history.

Source: Coinmetrics

This may be particularly valuable for ETH holders in light of the EIP-1559 proposal, which seeks to introduce a fee burn mechanism. While the specifics of the implementation imply that in periods of high activity there may still be bidding wars that directly benefit miners, high activity could lower the effective issuance rate to a significant extent.

For Bitcoin, raising transaction fees to cover existing issuance is crucial for its long-term future, since block rewards will eventually expire. However, the cryptocurrency space in the past two years has begun trending away from Bitcoin-centric use cases to stablecoins and DeFi. While Bitcoin usage remains high, losing dominance to other blockchains may prove catastrophic for its long-term prospects.

Governance Poll: Base Rate and PAXUSD Debt Ceiling Adjustments

https://blog.makerdao.com/governance-polls-september-28-2020/

The Maker Foundation Interim Risk Team has placed a series of Governance Polls into the voting system which presents polls to implement adjustments to the Base Rate and PAXUSD Debt Ceiling.

Poll: Base Rate Adjustment

The Governance Facilitators have placed a governance poll into the voting system which presents several possible Base Rate options. Voters are now able to signal their support for a Base Rate within a range of -3.75% to 4.25%.

Stability Fees are calculated from the Base Rate and Risk Premiums using the formula Stability Fee = max(Base Rate + Risk Premium, 0%)Please note that a negative Base Rate does NOT imply negative Stability Fees.

Details on how the Base Rate parameter was introduced, and its impact on the Stability Fee parameters for each collateral asset can be found in the following threads on the MakerDAO forum.

This weekly Governance Poll (FAQ) will be active for three days beginning on Monday, September 28 at 16:00 UTC, the results of which may inform an Executive Vote which will go live on October 2 at 16:00 UTC.

Review

The Base Rate is usually not discussed explicitly on a weekly basis as this poll is a regular occurrence. Please review the governance forum to see if there has been any discussion on the vote this week to inform your position before voting.

Next Steps

If the winning result of this poll differs from the current Base Rate parameter value in the Maker Protocol then this change will be included in the Executive Vote on the Friday following the conclusion of this poll.

If the Friday executive passes, then this rate change will become active in the Maker Protocol after the Governance Security Module delay has expired.

Poll: Adjust the PAXUSD Debt Ceiling

The Governance Facilitators have placed a Governance Poll into the voting system on behalf of the Maker Governance Community. The community can use this poll to express support or opposition for a PAXUSD-A Debt Ceiling increase from its current value to 100 million Dai.

The current value of the PAXUSD-A debt ceiling may change before this poll goes live. This value will depend on the outcome of the executive vote taking place on Friday, September 25, 2020.

This Governance Poll (FAQ) will be active for three days beginning on Monday, September 28 at 16:00 UTC, the results of which may inform an Executive Vote which will go live on Friday, October 2, at 16:00 UTC.

Review

The PAXUSD-A Debt Ceiling was voted on in a forum signal request. Please review the thread to inform your position before voting.

Next Steps

If this poll ends with a ‘Yes’ majority, this change will be included in the Executive Vote on the Friday following the conclusion of this poll.

If the Friday executive passes, then this debt ceiling change will become active in the Maker Protocol after the Governance Security Module delay has expired.


Resources

If you are new to voting in the Maker Protocol, please see the voter onboarding guide to learn how to use this dashboard and set up your wallet to vote.

Additional information about the Governance process can be found in the Governance Risk Framework: Governing MakerDAO

To participate in future Governance calls, please join us every Thursday at 16:00 UTC.

To add current and upcoming votes to your calendar, please see the MakerDAO Public Events Calendar.

The post Governance Poll: Base Rate and PAXUSD Debt Ceiling Adjustments appeared first on Maker Blog.

EY Releases First Business Application on Ethereum Blockchain

https://decrypt.co/43115/ey-releases-first-business-application-on-ethereum-blockchain

Accounting firm EY yesterday announced the release of the EY OpsChain Network Procurement (ONP) solution. This is EY’s first business application for the public Ethereum blockchain. The solution enables two companies to agree contracts on the blockchain while keeping sensitive information private. 

The OpsChain Network Procurement gives companies the chance to use the Ethereum blockchain network to synchronize business agreements using smart contract technology. This is a major step in the growing relationship between traditional financial institutions and blockchain technology.

“Competition is increasing between networks of companies, their partners and suppliers. The ability to work as a network, above the level of any single ERP system, is crucial. Doing so on a public blockchain means not having to persuade a company or supplier to join a costly, closed proprietary network.” said Paul Brody, EY global blockchain leader, in a statement

The ONP solution is built on the open source Baseline Protocol, which was developed by EY earlier this year, alongside Microsoft and Consensys (which funds an editorially independent Decrypt). The Baseline Protocol uses zero-knowledge proofs, off-chain storage and distributed identity technology. These solutions mean companies can establish agreements with each other without actually placing sensitive documents or private data on the blockchain itself.

In addition, the Baseline Protocol supports tokenization standards, which means purchase orders and other receivables can be tokenized and integrated into the decentralized finance (DeFi) ecosystem. 

The beta version of the ONP solution is available and free for individual users now. Brody previously told Decrypt that EY believes that “by 2030, more than half of all new business contracts will be done on a blockchain.”

Inside EY’s radical plan to get major businesses using Ethereum

The opportunity to save time and money will appeal to companies across the globe. If the ONP solution delivers on its promise, Brody’s prediction just might come true. 

GasNow: China’s hot, new tool that predicts Ethereum gas prices

https://decrypt.co/43046/gasnow-the-hot-new-tool-that-predicts-ethereum-gas-prices

We’ve all been there. Scratching our heads, we repeatedly check Etherscan or ETH gas station to calculate the optimal gas fees to farm that tasty food token. Sometimes we get lucky. Other times, we have to come back later and try again.

Getting the gas price right is a daily headache for DeFi farmers. One product that has won many Chinese farmers’ hearts is GasNow, an ETH GasPrice forecast system developed by SparkPool, one of the largest Ethereum mining pools based in China. This week’s da bing takes a look at GasNow and how a Chinese mining pool came to develop such a tool.

Mask Network Launches Uniswap Trading via its Twitter extension

Necessity was its mother

As DeFi started to pick up steam, the dev teams at Sparkpool realized that there was a big gap between quoted gas fees from ETH Gas Station and the actual gas fees they processed on the network. It is a problem for everyone on the network. So on August 12, they decided to hack together a tool to give themselves a more accurate and timely prediction of gas fees.

Five hours later, GasNow was born.

“There are two ways to calculate gas fees,” “Uncle Meow,” the pseudonymous product leader of Sparkpool, told me. “Most existing solutions calculate gas fees based on historical gas fee data. However, Sparkpool calculates gas fees based on our own mining pool’s pending transaction mempool, where all the valid transactions are waiting to be confirmed by the Ethereum network.”

The benefit of using pending-transaction data is that such a calculation is predictive rather than retrospective. “Especially during the heyday of yield farming, timing was everything.” Uncle Meow told me.

Once the tool was tested, the team decided to release it to the public so everyone who raced to farm DeFi tokens could benefit. Suddenly, GasNow was making a huge splash on crypto Wechat and everyone in the DeFi circle was talking about it. Data shows that GasNow has 500w average API requests per day and 12,000 unique visitors.

pasted image 0 3
GasNow analyzes wait times to predict gas prices.

Mining Pool is a natural fit

If miners are the guardians of any blockchain network, mining pools are the guardians of the guardians. They pool miners’ computing power to find the next stable block and then distribute the profit based on miners’ contribution. Like everyone else, Sparkpool had access to the Ethereum network’s pending transaction data across the globe, which is why it only took five hours for the product to go from incubation to launch.

“We decided to release GasNow to the public because we believe that a more accurate gas fee would benefit the entire network. We, as mining pools, are inherently neutral and GasNow does not interfere with our existing business model,” Uncle Meow said.

Indeed, if we look at the purpose of any mining pool, their mission is to attract more hashrate to the network, while providing stable, fair and transparent reward distribution. Providing the most accurate gas fees to users is aligned with that purpose.

Going forward

GasNow is free and will be free for a while to the public. Chinese crypto wallets such as imToken, MYKEY, MathWallet, TokenPocket have already integrated GasNow.

Challenges also exist. The team has been using the past month to fine-tune the accuracy of pending data queues. In addition, the majority of GasNow’s users are based in mainland China but an increasing number of users from abroad are starting to use it. Making sure that there’s a minimum delay of those foreign visits is a priority on its agenda.

GasNow is a fresh breath of air when the whole crypto world is forking DeFi tokens. Communities like Uncle Meow’s team, despite toiling under a centralized entity, show us that the spirit of innovation still remains in the crypto world.

Top 3 other things that happened in China last week

#1. Another wave of OTC crackdowns

China’s over-the-counter (OTC) crypto traders have been under attack left, right, and center recently. Back in April, WeChat Pay, the wallet feature of Tencent’s WeChat, dropped its support for fiat-to-crypto onramps via OTC trading desks. Such a ban prevents many retail investors from buying crypto within the comfort of their superapps.

On September 22, a number of China’s major banks joined the anti-OTC force, blacklisting many OTC dealers and blocking them from opening new accounts within five years. The motive behind such an attack is China Central Bank’s determination to crack down on money laundering.

According to Caixin, the PBoC issued more than $53 million in penalties for money-laundering violations, surpassing 2019’s total amount. Afraid of receiving fines or other forms of punishment, financial institutes have tightened their grip and prefer to blacklist the innocent rather than letting the guilty go free.

The biggest potential victim of the OTC crackdown could be Huobi, the largest OTC trading platform in China. But since the government is primarily targeting OTC trading desks suspected of money laundering, Huobi has time to roll out a PR campaign or a lobbying group to legitimize its business.

#2: Chinese state media glowingly reports on crypto as an asset class

While Chinese banks are cracking down on OTC traders, China’s Xinhua News, the country’s official mouthpiece, published an article on September 23 citing data from Bloomberg that cryptocurrencies are the best performing asset class in the world.

Soon after, Chinese Central Television ( CCTV ) aired a feature on the surge of crypto as an asset class. The broadcast cited the surge of DeFi and claimed that a weakening US dollar contributed to the rise of the crypto asset class.

This might seem insignificant since Chinese state media have been reporting on and off about crypto. However, it is significant since the government news outlet rarely talks about crypto as an asset class. (However blockchain, as you probably know, is legitimate and extolled by the authorities as a technical advancement in China.)

So when crypto is cited favorably as an asset class, it would seem to encourage people to either purchase or even—horrors!—speculate.

One possible justification of this article is the government’s looser control over crypto as they plan to launch China’s digital yuan. In order to familiarize the public with the concept of digital currency, it might not be a terrible idea to mention the whole asset class.

#3. Bitcoin mining difficulties hit new high

Bitcoin mining difficulty has risen 40% since January 2020. And that’s not good news for China’s miners, especially those from Sichuan province where the looming dry season signals the end of cheap abundant electricity. Reports show that there will be a 80% reduction of power supply in Sichuan post-October.

For the Sichuan miners, the options are few. They can either shut down their machines, or migrate elsewhere. Regardless, it’s going to be a long harsh winter for the miners.

Do you know?

“财富密码,” which literally means “wealth code,” is the Chinese equivalent of alpha. All over Wechat, people are asking where is the next DeFi “wealth code” so people can start liquidity mining before everyone else jumps in.

This non-Ethereum based DeFi project has $180M staked so far

https://cointelegraph.com/news/this-non-ethereum-based-defi-project-has-180m-staked-so-far

This project is focusing on cross-chain interoperability and on-chain credit scoring to advance the DeFi lending ecosystem.

Wing, a lending protocol built on the Ontology blockchain, currently has $180 million in crypto assets staked on its platform — not a meager amount, even by Ethereum (ETH) standards. 

Eric Pinos, Ontology’s ecosystem lead for the Americas and an advisor to Wing, told Cointelegraph that he believes two features make this DeFi project unique: cross-chain interoperability with Ethereum and the fact that lending is credit-based, allowing for loans to be under-collateralized. The system’s OScore analyzes each user’s on-chain behavior to generate a credit score. This then determines the amount of collateral the user needs to post for a given loan:

“So instead of everything being over-collateralized right now, you have to put up $10,000 if you want to borrow $8,000 with undercollateralized loans, you can show a credit score that’s built off of your on-chain transaction history and your DeFi interaction history.”

Pinos said that this feature is not yet live, though he noted that it will be integrated into the next pool.

Unlike old-fashioned off-chain credit history where the rating agency typically has access to most if not all relevant information, the on-chain counterpart does not, as a user can choose which addresses or accounts to submit and omit. Pinos said that they will try to mitigate those challenges by combining on-chain and off-chain data, such as social media profiles.

Pinos hopes that the unique features of Wing will attract more users and assets. He said that they beating big on the DeFi cross-chain interoperability, while the high cost of transactions on Ethereum may further help their cause.

This Week in Blockfolio Signal — Ethereum, IOTA, Ocean, Solana, Ultra, Origin, IoTeX

https://blog.blockfolio.com/this-week-in-blockfolio-signal-ethereum-iota-ocean-solana-ultra-origin-iotex-994cc161d1f4?source=rss------ethereum-5

Every week we comb through hundreds of Blockfolio Signals to bring you the most significant team updates with brief analyses to help you…

Ethereum Users Now Have More Than $10 Billion at Play in DeFi

https://decrypt.co/42976/ethereum-10-billion-total-value-locked-defi

The decentralized finance sector within the cryptocurrency industry has been on fire in 2020, and today, DeFi has broken through another major threshold.

DeFi users have now locked more than $10 billion in digital assets, including cryptocurrencies such as Ethereum and dollar-pegged stablecoins, into DeFi applications, according to data aggregator DeFi Pulse. This figure stood at just above $1 billion a mere three months ago.

Nearly all of that $10 billion total is in Ethereum, and more than half comes from just three protocols, as the biggest names in DeFi begin to capture outsized market share and attention while batting away copycat projects in a rapidly expanding marketplace.

Metrics site DeFi Pulse gathers data from different DeFi protocols through blockchain analysis to determine the value of all assets deposited by users, known as total value locked (TVL). The metric is widely used as a way to measure the current popularity of DeFi products in the market among users. 

DeFi protocols allow users to deposit digital assets into automatic financial applications, with all but a few running on the Ethereum blockchain. The DeFi protocols, powered by automated code known as smart contracts, allow users to take loans or earn interest using their assets as collateral as they would at a bank. 

DeFi users can typically receive better interest rates than they would at traditional financial institutions thanks to lower overhead costs enabled by operating on an automated decentralized network.

Uniswap, a token swap platform that automatically processes token trades without an order book, previously held the top spot for total value locked. This was largely thanks to a surge of interest following the release of the exchange’s UNI governance token last week. The new token allows its holders to vote on the future development and direction of the Uniswap platform. But Uniswap no longer holds that stop spot in the rankings.

Ethereum Locked in Uniswap Soars to $1.6 Billion After UNI Launch

Maker is another very popular service among DeFi users. It allows crypto enthusiasts to lock up digital assets such as Ethereum, Bitcoin, and other tokens for use as loan collateral paid in dollar-pegged DAI stablecoins. It has now narrowly edged out Uniswap in total value locked—$1.9 billion to Uniswap’s $1.89 billion.

The third-most popular DeFi product out there right now is Aave, with approximately $1.4 billion in total value locked. Aave is a DeFi service offering both crypto-backed loans and interest earning deposits, as well as pioneering functionality like unsecured loans using delegated collateral from other users, known as credit delegation loans.

With so many billions now flowing, it’s easy to lose sight of the fact that $10 billion in TVL represents 400% growth in DeFi since the beginning of July. It’s the sort of ultra-fast growth only possible in the world of cryptocurrencies—and one that, at this rate, might seem like a small and distant memory soon enough.

The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.

Executive Vote: Debt Ceiling Increases, Base Rate Increase, and more

https://blog.makerdao.com/executive-vote-september-25-2020/

The Governance Facilitators and the Maker Foundation Smart Contracts Team have placed an Executive Vote into the voting system which will enable the community to approve the following alterations to the protocol.

USDC-A Debt Ceiling Increase

As per the urgent signal request created by a risk contributor, the USDC-A debt ceiling will be increased from 400 million to 485 million if this proposal passes.

TUSD-A Debt Ceiling Increase

As per the urgent signal request created by a risk contributor, the TUSD-A debt ceiling will be increased from 50 million to 135 million if this proposal passes.

PAX-A Debt Ceiling Increase

As per the urgent signal request created by a risk contributor, the PAX-A debt ceiling will be increased from 30 million to 60 million if this proposal passes.

BAT-A Debt Ceiling Increase

As per this non-standard weekly poll which originated from this signal request, the BAT-A debt ceiling will be increased from 5 million to 10 million if this proposal passes.

Whitelist Kyber on the ETHUSD Medianizer Oracle

As per this non-standard weekly pollKyber will be whitelisted on the ETHUSD Medianizer Oracle if this proposal passes. See this thread for further details.

Whitelist DDEX on BTCUSD Medianizer Oracle

As per this non-standard weekly pollDDEX will be whitelisted on the BTCUSD Medianizer Oracle if this proposal passes. See this thread for further details.

Whitelist ETHUSD v1 Medianizer Oracle on ETHUSD Medianizer Oracle for Opyn

As per this non-standard weekly poll, the ETHUSD v1 Medianizer Oracle will be whitelisted on the ETHUSD Medianizer Oracle for Opyn if this proposal passes. It will also set the the ETHUSD Medianizer Oracle as the unique source of price of ETHUSD v1 Medianizer Oracle. See this thread for further details.

Whitelist yEarn Finance on BTCUSD OSM Oracle

As per this non-standard weekly pollyearn.finance will be whitelisted on the BTCUSD OSM Oracle if this proposal passes. See this thread for further details.

Base Rate Increase

As per the weekly Base Rate poll the Base Rate meta-parameter will be increased from 0% to 0.25% if this proposal passes.

Stability Fees are calculated from the Base Rate and Risk Premiums using the formula Stability Fee = max(Base Rate + Risk Premium, 0%)Please note that a negative Base Rate does NOT imply negative Stability Fees.

ETH-A Risk Premium Increase

As per this non-standard weekly poll which originated from this signal request, the ETH-A risk premium will be increased from 0% to 2% if this proposal passes.

Stability Fees are calculated from the Base Rate and Risk Premiums using the formula Stability Fee = max(Base Rate + Risk Premium, 0%)Please note that a negative Base Rate does NOT imply negative Stability Fees.

Summary

Therefore, if this Executive proposal passes the following will occur:

Debt Ceiling Changes

  • The BAT-A Debt Ceiling will increase from 5 million to 10 million.
  • The USDC-A Debt Ceiling will increase from 400 million to 485 million.
  • The TUSD-A Debt will increase from Ceiling 50 million to 135 million.
  • The PAX-A Debt will increase from Ceiling 30 million to 60 million.
  • Due to the above debt ceiling changes, the Global Line parameter will increase from 1196 million to 1401 million.

Oracle Whitelisting

  • Kyber will be whitelisted on the ETHUSD Medianizer contract.
  • DDEX will be whitelisted on the BTCUSD Medianizer contract.
  • The ETHUSD v1 Medianizer will be whitelisted on the ETHUSD Medianizer contract for Opyn.
  • yearn.finance will be whitelisted on the BTCUSD OSM contract.

Rate Changes

  • The Base Rate meta-parameter will increase from 0% to 0.25%
  • The ETH-A Risk Premium will increase from 0% to 2%
  • The ETH-A Stability Fee will increase from 0% to 2.25%
  • The USDC-A Stability Fee will increase from 4% to 4.25%
  • The WBTC-A Stability Fee will increase from 4% to 4.25%
  • The TUSD-A Stability Fee will increase from 4% to 4.25%
  • The PAXUSD-A Stability Fee will increase from 4% to 4.25%
  • The BAT-A Stability Fee will increase from 4% to 4.25%
  • The MANA-A Stability Fee will increase from 12% to 12.25%
  • The ZRX-A Stability Fee will increase from 4% to 4.25%
  • The KNC-A Stability Fee will increase from 4% to 4.25%
  • The USDT-A Stability Fee will increase from 8% to 8.25%
  • The USDC-B Stability Fee will increase from 50% to 50.25%

The Executive Vote (FAQ) will continue until the number of votes surpasses the total in favor of the previous Executive Vote. This is a continuous approval vote.

Review

Community debate on these topics can be found on the MakerDAO governance forum. Please review any linked threads to inform your position before voting.

Additionally, these changes may have been discussed further in recent Governance calls. Video and Audio for these calls is available to review.

Action

Voting for this proposal will place your MKR in support of implementing the changes outlined above.


Resources

If you are new to voting in the Maker Protocol, please see the voter onboarding guide to learn how to use this dashboard and set up your wallet to vote.

Additional information about the Governance process can be found in the Governance Risk Framework: Governing MakerDAO

To participate in future Governance calls, please join us every Thursday at 16:00 UTC.

To add current and upcoming votes to your calendar, please see the MakerDAO Public Events Calendar.

The post Executive Vote: Debt Ceiling Increases, Base Rate Increase, and more appeared first on Maker Blog.

Diamond Standard Tries to Make Diamonds a Liquid Commodity via Ethereum

https://decrypt.co/42879/diamond-standard-tries-to-make-diamonds-a-liquid-commodity-via-ethereum

Diamond Standard, a New York-based startup, is launching a novel way to buy, track, and sell diamonds on the Ethereum blockchain: The company wants to turn diamonds into a liquid commodity, as fungible and easy to trade as any other asset.

To that end, on Monday, it’s holding an “Initial Commodity and Asset Token Offering” that, it hopes, will standardize the price of diamonds by literally pegging the gemstones to a physical token that’s encrypted, trackable, and registered to the blockchain. The company hopes to raise as much as $25 million via the sale of the diamond-studded tokens; each token will be sold for $5,000 during the Offering.

Screenshot 2020 09 22 185032
The Diamond Standard token.

How Diamond Standard works

“If you buy a diamond on 47th Street in New York and try to sell it, you are going to have a hard time getting two-thirds of your money back out of that. Even if you take it to Sotheby’s and try to auction it, you’re going to pay 18% commission. We’ve made an efficient commodity just like gold,” the company’s founder, Cormac Kinney explained in an interview last year.

Mask Network Launches Uniswap Trading via its Twitter extension

Kinney, a serial entrepreneur who founded, among other things, Flont Inc., a fine jewelry company, launched Diamond Standard in 2018.

So how does it work? After a vendor delivers their diamonds to a global Gemological Institute of America lab to be assayed, the diamonds are inspected and separated into sets. They’re then assembled into a “Diamond Standard Coin,” which is sealed with an embedded, wireless encryption chip. The process is audited by Deloitte and the coin is registered as an ERC-20 token on the Ethereum blockchain. It can then be traded, sold, or even used as collateral for a loan, via a mobile app.

“Diamond Standard is unique—it is both a physical and digital asset containing GIA certified diamonds,” Tom Leonard, a Diamond Standard spokesman, told Decrypt.

Screenshot 2020 09 22 185217
The Diamond Standard token is studded with diamonds and encrypted.

Diamond Standard’s coin offering

According to Diamond Standard Co., each coin that will be offered during Monday’s public offering contains certified natural diamonds with identical geological scarcity and a wholesale market value of  $5,000.00 as of the sale date.

The diamonds are tracked via the blockchain through the wireless computer chip. Once the coin is purchased, the diamonds ship to the buyer or to approved custodians BitGo, Gemini, Dillon Gage, or IDS Delaware. Individual buyers can sell their Diamond Standard Coins to another buyer using the Diamond Standard app or website. Know Your Customer compliance is required to buy, trade, or sell Diamond Standard Coins.

Screenshot 2020 09 23 081832
Screenshot 2020 09 23 081916

“Not only can you trade the commodity, but you can pledge up to 80% of the value of the coin through smart contacts and back any digital transaction. We want to encourage entrepreneurs to innovate digital capabilities,” Leonard said.

The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.

Hacker Saves $10 Million in Ethereum From Inevitable Theft

https://decrypt.co/42933/hacker-saves-10-million-in-ethereum-from-inevitable-theft

A blockchain security researcher and whitehat hacker, known as samczsun, today published a detailed “post mortem” of an undercover operation that resulted in the rescue of 25,000 ETH, worth over $9.6 million at the time. The funds were saved from a vulnerable Ethereum smart contract.

On September 15, samczsun was looking through Ethereum smart contracts in search of vulnerabilities (like he often does). Eventually, he discovered what later turned out to be a part of Lien Finance’s protocol: a smart contract that contained over 25,000 ETH.

Only these funds could’ve been taken by anyone.

According to the post, the smart contract contained a “burn” function. Essentially, this allowed any users to mint themselves a lot of valueless tokens and exchange them for all the ETH stored on the contract, getting away with a cache worth nearly $10 million. For DeFi’s sake, Samczsun decided to intervene.

Since Lien Finance’s team was anonymous, the whitehat went through a bunch of potential connections to anyone involved. Alexander Wade, a security researcher at ConsenSys—one of the two companies that audited the smart contract (and also funds an editorially independent Decrypt)—and Ethereum security specialist Scott Bigelow soon joined the rescue operation.

Realistically, there were two ways the situation could’ve been resolved. First, Lien Finance could’ve publicly disclosed the vulnerability, but that would’ve created a perfect opportunity for hackers to snatch the funds—like placing a “free money” sign. 

Ethereum 2.0
Ethereum is the second biggest coin by market cap. Image: Shutterstock.

Second, the whitehat team could’ve exploited the smart contract itself and then return the funds to their rightful owners. But this would’ve definitely attracted the so-called generalized frontrunner bots—apex predators of Ethereum’s mempool.

The mempool, expressively referred to as “Ethereum’s Dark Forest,” is a special “staging area” where transactions congregate before they are accepted by miners to be included in the next block. And this area is constantly patrolled by frontrunners—special bots that are looking for any exploitable transactions to hijack.

Inside the Mysterious World of Ethereum’s Mempool

Basically, frontrunners could automatically copy any transaction in the mempool, replace its addresses with their own and make sure that the duplicate operation gets picked up by miners first. In the current situation, that meant $10 million could’ve been easily stolen by frontrunners in a matter of seconds. Secrecy was essential.

With the help of blockchain researcher Tina Zhen, the team added members of both CertiK—the second company that audited the smart contract—and Ethereum mining pool SparkPool to the rescue effort, as well as finally reaching out to Lien Finance.

After a short onboarding, SparkPool’s coders spent the next couple of hours developing and testing a specialized “whitehat API” that would allow miners to pick up a transaction without displaying it in the mempool. In their turn, members of the whitehat team finished the script to generate four sequential signed transactions that would ultimately save the 25,000 ETH.

But these transactions weren’t designed to directly withdraw the funds. If executed in the correct order, they would transfer 30,000 SBT and LBT tokens—which are infinitely mintable—to Lien Finance, allowing it to convert these tokens back into ETH via the burn function with the final operation.

When all preparations were complete, the whitehat team finally commenced the rescue operation. By working with a mining company, the transactions successfully evaded the bots. This is because the transactions were not sent to the mempool—they were directly placed in a block by the miners themselves.

“After adapting the transaction-creation script to feed the transactions directly to SparkPool’s new endpoint, it was time. I hesitated for a moment, but this was absolutely our best effort. We might lose $9.6M, but there would be no regrets,” the post explained, adding, “The ~15 blocks it took before our transactions were included felt like hours, but finally, we had our immaculate transactions: mined, in order, not reverted.”

Hackers Save $10 Million in Ethereum From Inevitable Theft
The whitehat team safely returned over 25,000 ETH. Image: Etherscan

Now, what was left was for the Lien Finance team to exchange the SBT and LBT tokens for ETH using the burn function. A few moments after the final transaction was executed, Etherscan reported its successful completion, sweeping 25,000 ETH out of harm’s way.

Thus, the whitehat team “escaped the dark forest,” and saved a small fortune.

Ethereum studio ConsenSys wins Hong Kong central bank digital currency study project

https://www.theblockcrypto.com/linked/78835/ethereum-consensys-hong-kong-cbdc-study-project?utm_source=rss&utm_medium=rss

Ethereum development studio ConsenSys has been awarded a central bank digital currency (CBDC) study project by the Hong Kong Monetary Authority (HKMA).

ConsenSys announced the news on Friday, saying that it will develop technology for the HKMA’s digital currency proof-of-concept. ConsenSys will work with PwC and fintech firm Forms HK on the project.

Specifically, the trio would work on the second implementation phase of the project Inthanon-LionRock, that initially began in 2018. “ConsenSys is thrilled to lead this implementation of CBDC for cross-border payments,” said Charles d’Haussy, director of ConsenSys Hong Kong.

Using its enterprise Ethereum stack, ConsenSys said it would test solutions that prioritize scalability, security, and interoperability.

ConsenSys has previously worked with two central banks — the Monetary Authority of Singapore (Project Ubin) and the South African Reserve Bank (Project Khokha) — for developing their decentralized payment networks.

© 2020 The Block Crypto, Inc. 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.

Ethereum scaling startup Optimism releases limited testnet of its Layer-2 solution

https://www.theblockcrypto.com/post/78813/ethereum-scaling-optimism-releases-limited-testnet-layer2?utm_source=rss&utm_medium=rss

Optimism, the Ethereum scaling startup that is building a Layer-2 solution using a tool called optimistic rollup, has released the limited testnet of its network. 

Optimism said it has opted for a gradual release process, where its network will be integrated with a small cohort of decentralized applications (dapps) one at a time, in order to “best isolate bugs.”

The first dapp to integrate with Optimism’s limited testnet is decentralized synthetic-asset exchange Synthetix. The exchange will incentivize its users to test Optimism’s network with 200,000 SNX tokens. That is about $930,000 in total rewards (one SNX token is currently priced at about $4.65).

“There are no words for how grateful we are to Synthetix for the opportunity to truly test our code in an environment that is as close to mainnet as possible, where serious value is in play,” said Optimism.

Other projects that have wished to test Optimism’s network are top decentralized exchange Uniswap and decentralized price oracle Chainlink.

There are four phases in which Optimism would be releasing its testnet and reach toward mainnet: Phase A, Phase B, Security drill, and Phase C.

Source: Optimism 

In Phase A, no deposits or withdrawals will be enabled. It will only allow airdrop tokens into L2 Goerli and enable participants to mint and burn sUSD (Synthetix’s stablecoin), and claim staking rewards.

In Phase B, deposits will be enabled, as well as airdrop of L1 Goerli SNX to participants. Users will be able to increase their staked SNX if they perform a deposit.

In the security drill phase, Optimistic Virtual Machine (OVM) contracts will be upgraded to add verification abilities. “We’ll actively commit fraud and reward the users who successfully submit a fraud proof,” said Optimism.

In the last Phase C, withdrawals will be enabled and participants will have to perform a successful withdrawal to receive their testnet rewards on mainnet. Optimism didn’t reveal specific timelines for these phases.

Formerly known as non-profit Plasma Group, Optimism rebranded and turned to a for-profit startup last year, to entirely focus on Ethereum scaling. Optimism is backed by Paradigm and IDEO CoLab Ventures and has raised $3.5 million to date. 

© 2020 The Block Crypto, Inc. 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.