DeFi
Crypto ETFs and RWA tokenization serve as a bridge between DeFi and TradFi – Blueberry CEO
(Kitco News) – Ethereum (ETH) is making headlines again as the U.S. Securities and Exchange Commission (SEC) scrambles to provide guidance in scouting Ether exchange-traded fund (ETF) candidates after months of obstruction.
The about-face comes as crypto has become a trending topic in the upcoming US election, with Democrats trying to avoid alienating much of the voting base after Trump came out in force with a pro- crypto.
But it’s not just Ether ETFs that have boosted ETH’s outlook in 2024, as the network has undergone several upgrades, including the Dencun hard fork, which has helped reduce the cost of trading on Ethereum protocols of layer two (L2), an issue that was a major problem for the network and remains an issue for transactions that take place directly on the first layer of Ethereum.
To gain insight into the latest developments in the second-largest crypto by market capitalization, Kitco Crypto spoke with Jonathan Thomas, CEO and co-founder of Blueberry Protocol, a DeFi platform that offers a non-custodial prime brokerage experience.
According to Thomas, Blueberry strives to make integration into DeFi easier for individuals and institutions, as the world moves toward widespread integration of blockchain technology into various facets of society.
The conversation took place before the SEC’s about-face on Ether ETFs, and at the time, Thomas said that “the SEC has made it clear that it has no problem taking its time with crypto approvals . While I hope an Ether ETF approval is on the horizon, I don’t think anyone can say with absolute certainty what the outcome will be.
It turns out his hope came true, as Barron’s reported that on Monday, SEC staff told the exchanges where the products would be listed that it was inclined to approve them, according to to user database
“The agency has provided feedback on the applications which, if resolved in time, could result in approvals as soon as this week,” DB said.
Addressing the recently launched Bitcoin (BTC) and Ether ETFs in Hong Kong, the effect they will have on the market and whether they would offer Chinese investors a way to re-engage with cryptos, Thomas said: “Whenever investors can have more access to cryptos, this will have a positive impact. on the ecosystem, but it is important to remember that ETFs are still not available in mainland China.
That said, he noted that “the Hong Kong market will inject new liquidity and likely have a cumulative effect on growing global attention.”
Dencun upgrade
Thomas said he was “cautiously optimistic about the effects of the Dencun upgrade on the Ethereum ecosystem.”
“Decreased transaction fees have improved the accessibility and efficiency of Ethereum for users and developers, potentially driving increased adoption and innovation within the ecosystem,” he said. “I view the Dencun upgrade as a positive development that strengthens the overall health and growth potential of the Ethereum ecosystem, providing new opportunities for projects to thrive.”
Institutions and DeFi
As the conversation shifted to the evolving crypto landscape, the arrival of institutional investors, and how traditional finance (TradFi) and decentralized finance (DeFi) will merge in the coming years, Thomas noted that “Non-custodial prime brokerage services are vital in the current crypto environment, especially with the growing awareness of ETFs and increased interest from major funds such as pensions.
“These services provide institutional investors with access to crypto markets while ensuring asset control and addressing security, regulatory and risk management concerns,” he said. “As institutional involvement grows, these brokerage services become increasingly essential to facilitating secure and efficient trading, liquidity provision, and portfolio management within crypto.”
The launch of several spot Bitcoin ETFs in the United States has opened the door to institutions will start investing in Bitcoin en masse, with Q1 13F filings with the SEC showing that as of May 9, 563 professional investment firms reported holding $3.5 billion in Bitcoin ETFs.
As more and more companies jump into the crypto waters, it’s only a matter of time before they start making their presence felt in DeFi, which will truly start the ball rolling for change in the global financial system.
“Institution-led DeFi marks a fundamental shift in finance, bringing innovation, inclusiveness and democratization,” Thomas said. “This progression should benefit both institutional entities and individual users.”
“However, it is imperative to maintain a delicate balance between institutional commitment and safeguarding the fundamental principles of decentralization, transparency and user empowerment, which constitute the foundation of the DeFi movement,” he stressed.
For institutions to properly engage in DeFi, Thomas said: “Improving regulatory clarity and strengthening DeFi infrastructure are crucial steps to incentivize greater institutional participation in the field.
“Currently, the regulatory landscape for cryptocurrencies in the United States remains ambiguous, leaving many organizations skeptical and confused about the legality of their actions,” he said. “By establishing a clear regulatory framework, institutions can gain a sense of confidence in the crypto sector, fostering an environment in which innovation can thrive.”
Thomas also said work needs to be done on the development side to ensure the level of demand that is sure to come from institutions can be met.
“DeFi protocols need to improve scalability to meet institutional demand, which can be achieved by being optimization-minded, using layer-two solutions, cross-chain messaging services, and further network enhancements main will help reduce congestion on the Ethereum network,” he said. . “Additionally, improved composability between DeFi platforms and blockchain networks facilitates seamless asset transfers and cross-chain transactions, meeting the diverse portfolio management needs of institutional investors across various protocols and ecosystems.”
An emerging trend likely to accelerate the process of institutions getting involved in the world of DeFi is the tokenization of real-world assets (RWA), which has gained momentum in recent months as $1.34 billion in vouchers of the US Treasury have already been tokenized, according to data provided by RWA.xyz.
“RWA is certainly going through a huge moment in 2024,” Thomas said. “We’ve seen incredible use cases across all industry sectors. For institutions in particular, I am confident that RWA will help bridge the gap between TradFi and DeFi.
“Additionally, RWA tokenization allows institutions to expand their investment portfolios and improve risk management by tapping into a wider range of asset classes and global markets,” he added. “Institutions have the ability to tokenize various real-world assets, spanning commercial properties, corporate bonds, infrastructure projects and trade finance tools, thereby maximizing risk-adjusted returns and enhancing the sustainability of the wallet.”
Stablecoins and a digital dollar
Another factor needed to accelerate cryptocurrency adoption in the United States is the passage of stablecoin legislation, which will likely be one of the first steps taken by the government as it moves towards the release of a digital dollar.
“Enacting stablecoin legislation in the United States represents a significant step toward implementing a digital dollar, but it is only one aspect of a broader rollout,” Thomas said . “Clear regulations for stablecoins are essential to ensure consumer protection, financial stability and regulatory compliance, potentially driving the development and adoption of digital dollar initiatives.”
While stablecoin legislation is an important first step, Thomas suggested that “the success of a digital dollar also depends on factors such as technological infrastructure, alternative structures and public acceptance.”
Disclaimer: The opinions expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is for informational purposes only. This is not a solicitation to trade any commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article accept no liability for loss and/or damage arising from the use of this publication.
In July 2024, the cryptocurrency industry suffered a series of devastating attacks, resulting in losses amounting to approximately $266 million.
Blockchain Research Firm Peck Shield revealed in an X post On August 1, attacks on decentralized protocols in July reached $266 million, a 51% increase from $176 million reported in June.
The most significant breach last month involved WazirX, one of India’s largest cryptocurrency exchanges, which lost $230 million in what appears to be a highly sophisticated attack by North Korean hackers. The attack was a major blow to the stock market, leading to a break in withdrawals. Subsequently, WazirX launched a program in order to recover the funds.
Another notable incident involved Compound Finance, a decentralized lending protocol, which suffered a governance attack by a group known as the “Golden Boys,” who passed a proposal who allocated 499,000 COMP tokens – valued at $24 million – to a vault under their control.
The cross-chain liquidity aggregation protocol LI.FI also fell victim On July 16, a hack resulted in losses of $9.73 million. Additionally, Bittensor, a decentralized machine learning network, was one of the first protocols to suffer an exploit last month, loming $8 million on July 3 due to an attack targeting its staking mechanism.
Meanwhile, Rho Markets, a lending protocol, suffered a $7.6 million breach. However, in an interesting twist, the exploiters research to return the stolen funds, claiming the incident was not a hack.
July 31, reports The Terra blockchain protocol was also hacked, resulting in a loss of $6.8 million across multiple cryptocurrencies. As crypto.news reported, the attack exploited a reentrancy vulnerability that had been identified a few months ago.
Dough Finance, a liquidity protocol, lost $1.8 million in Ethereum (ETH) and USD Coin (USDC) to a flash loan attack on July 12. Similarly, Minterest, a lending and borrowing protocol, saw a loss of $1.4 million due to exchange rate manipulation in one of its markets.
Decentralized staking platform MonoSwap also reported a loss of $1.3 million following an attack that allowed the perpetrators to withdraw the liquidity staked on the protocol. Finally, Delta Prime, another decentralized finance platform, suffered a $1 million breach, although $900,000 of the stolen funds was later recovered.
Centralized crypto exchanges are slowly losing ground to their DeFi counterparts, according to an in-depth data analysis conducted by Decrypt.
DeFiLlama’s decentralized exchange (DEX) volume data and CoinGecko’s total cryptocurrency trading volume data show that the percentage of cryptocurrency trading volume occurring on DEXs relative to total trading volume has increased from 4.6% in February to over 7% this month. This is an increase in the share of trading volume driven by DEXs of over 52%.
Source: Adrian Zmudzinski
Kunal Goel, a senior research analyst at Messari, told Decrypt that several factors are fueling the growth in DEX market share. He cited “the growth of meme coins and long-tail assets” as one of the reasons, explaining that they tend to list first on DEXs and only appear on centralized exchanges much later.if they last that long.
“The onchain user experience has improved with low fees and high throughput on Solana and Ethereum L2,” he added, highlighting advancements making decentralized finance (DeFi) solutions increasingly easier to use.
DeFiLlama data further shows that over the past 24 hours, DEX volume accounted for 22% of total trading volume. The crypto price aggregator notes that this percentage is meant to represent the dominance of decentralized exchanges over aggregated decentralized exchanges and centralized exchanges.
So far in 2024, DEX volume has seen a slow and steady increase.
CEX and DEX trading volume increased from $133.5 billion in January to $179.5 billion this month, an increase of about 34%. The year-to-date high was recorded in March, when CEX and DEX volumes saw a sharp increase, reaching $4.8 trillion and $266.89 billion, respectively.
Goel noted that at the time, “Bitcoin hit new all-time highs in March and trading activity is generally positively correlated with price and sentiment.” Looking ahead, he expects centralized exchanges to move on-chain and disrupt their own business models before others can. He added that “Base and BNB Chain are the most prominent examples of this.”
TradingView also shows a DeFi market cap dominance chart, in percentage terms. Currently at 3.86%, it fell from 4.47% on January 1 and hit a 2024 high of 4.81% on February 25. Goel noted that this was unexpected since “DEX volumes are a key driver of DEX value, so it’s a bit contradictory.”
Challenge is an umbrella term for a group of financial tools built on a blockchain, including DEXs, exchanges that operate primarily on-chain. The primary goal of DeFi is to allow anyone with internet access to lend, borrow, and bank without relying on intermediaries.
Similarly, the main goal of DEXs is to allow anyone with internet access to trade or even provide liquidity in exchange for a stake. DeFi and DEXs are one of the main areas of focus in decentralized application (dapp) development, which have seen considerable adoption this year.
Edited by Stacy Elliott.
In a remarkable turn of events, Pump.Fun, a memecoin launchpad, has surpassed all other platforms in the decentralized finance (DeFi) sector, achieving the highest gross revenue in the last 24 hours. According to data from DeFiLlama, Pump.Fun amassed $867,429 during this period, surpassing Ethereum’s $844,276. This achievement underscores the growing influence of memecoin infrastructure within DeFi.
Pump.Fun Revenue Milestones
The impressive revenue numbers go beyond daily performance. Pump.Fun is generating $315 million in annualized revenue, averaging $906,160 per day over the past week. This revenue surge is largely due to the recent memecoin frenzy, with Solana-based memecoins being particularly popular among on-chain enthusiasts. The platform’s user-friendly interface allows non-technical users to quickly launch their own tokens, spending as little as $2 without needing to provide any initial liquidity.
How Pump.Fun works
Pump.Fun’s operating model is designed to facilitate the use and rapid launch of tokens. Users can create new tokens in minutes, which are then allowed to trade along a bonding curve until they reach a market cap of approximately $75,000. At this point, the bonding curve is burned on Raydium, establishing a secure liquidity pool. The platform generates revenue through a 1% fee on transactions made on the platform. However, once a token is bonded and burned on Raydium, Pump.Fun stops charging this fee.
Ethereum: Traditional Power
Despite its daily revenues, Ethereum remains a cornerstone of the DeFi ecosystem. It is the blockchain of Ether, the second-largest cryptocurrency with a market cap of $395 billion. Ethereum powers many applications and digital assets, backing over $60 billion worth of smart contracts. Revenue generation on Ethereum is done through transaction fees, called gas, which are paid in ETH for executing transactions and smart contracts.
Comparative analysis of revenue models
While Ethereum’s revenue model relies on gas fees for transactions and smart contract executions, Pump.Fun takes a different approach. By enabling easy and low-cost token launches, Pump.Fun caters to a broad audience, including non-technical users. This inclusiveness, combined with the excitement surrounding memecoins, has led to rapid revenue growth. The 1% transaction fee ensures continued revenue generation until the token transitions to Raydium, creating a sustainable business model.
Memecoin frenzy
The recent rise in popularity of memecoins has been a major contributor to Pump.Fun’s success. Memecoins, particularly those based on Solana, have captivated the DeFi community, generating substantial activity on platforms like Pump.Fun. This trend highlights a shift in DeFi dynamics, where niche platforms catering to specific interests can achieve significant revenue milestones.
Future prospects
Pump.Fun’s recent successes suggest a potential shift in the DeFi landscape. As the platform continues to attract users with its simple token launch process and low-cost entry point, it could solidify its position as a leader in the DeFi space. The memecoin phenomenon shows no signs of slowing down, indicating that platforms like Pump.Fun could continue to see robust growth.
In conclusion, Pump.Fun’s ability to surpass Ethereum in terms of daily revenue underscores the evolving nature of the DeFi space. By providing a user-friendly platform for launching memecoins, Pump.Fun has tapped into a lucrative niche, demonstrating the potential for niche platforms to thrive alongside traditional blockchain giants like Ethereum. This development signals a broader trend toward diversification and innovation within the DeFi ecosystem, with new entrants challenging established players through unique value propositions and targeted services.
According to recent reports, one of the largest venture capital firms is looking for new opportunities in the cryptocurrency space as Bitcoin (BTC) attempts to break its all-time high and start a new bull run in the cryptocurrency market. They are balancing risk with low-risk, low-reward and high-risk, high-reward opportunities.
The first investment candidate is a top cryptocurrency, Ripple (XRP); it doesn’t have much growth potential because it’s already a large cap. Another scenario the firm is targeting is DTX ExchangeThe new hybrid exchange is expected to revolutionize the foreign exchange industry. According to analysts, its growth potential is immense and the risk is also very limited due to its low price.
Market is bullish as Trump wants to make US a Bitcoin (BTC) superpower
Over the past 30 days, Bitcoin (BTC) has increased by about 10%, and one of the catalysts for this price increase has been Donald Trump recently speaking out as a crypto pro. Presidential candidate Donald Trump has promised to make the United States the world leader in cryptocurrencies if elected in November. Speaking at the Bitcoin2024 conference in Nashville, Trump compared Bitcoin (BTC) to the steel industry of 100 years ago, highlighting its potential.
Trump’s plans include firing SEC Chairman Gary Gensler and immediately creating a “Presidential Advisory Council on Bitcoin (BTC) and Cryptocurrencies.” He stressed the importance of American leadership in the cryptocurrency space, saying, “I am laying out my plan to ensure that the United States is the cryptocurrency capital of the planet and the Bitcoin (BTC) superpower of the world.”
$600 Million Worth of Ripple (XRP) to Be Released in August
Ripple (XRP), the company behind the XRP Ledger blockchain and its native token Ripple (XRP), unlocks up to 1 billion tokens on the first day of every month. Since 2017, they have used several major escrow wallets, including Ripple (XRP) (24) and Ripple (XRP) (25), to evenly distribute these monthly unlocks.
However, Ripple (XRP) often relocks a large portion of newly issued XRP. For example, on June 1, Ripple (XRP) relocked 800 million XRP but still sold about 300 million XRP, worth $182 million at the time.
While Ripple (XRP) releases up to 1 billion XRP tokens each month, the actual amount released into circulation is typically much lower due to this re-escrow process, as noted in a 2017 XRP Ledger blog post.
DTX Exchange Follows Bitcoin (BTC) Path
The main target of large private equity firms is the DTX exchange (DTX), the reason being a clearly high utility like Bitcoin (BTC). This project has attracted global attention thanks to its exceptional pre-sale performance, offering early buyers a 100% return on investment and raising over $1 million. Projections suggest that this figure will reach $2 million by the end of August 2024.
DTX Exchange offers a revolutionary hybrid trading platform, combining the best features of centralized (CEX) and decentralized (DEX) exchanges. Traders can enjoy a seamless experience with access to over 120,000 asset classes, no KYC verification upon registration and ultra-fast transaction speeds of 0.04 seconds.
These benefits have attracted traders to this new cryptocurrency exchange. Currently, in Phase 2 of its pre-sale, DTX Exchange is listed at $0.04, which is double its starting price of $0.02. Market analysts predict that the upcoming listing of DTX Exchange on the Level 1 CEX in late 2024 could trigger a 100x bullish rally, making DTX Exchange the top cryptocurrency exchange to watch.
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