CRC Blockchain Industry Commentary #1

Updated: Oct 18, 2019

1) Ethereum Foundation grants over $2M to Eth2.0 client developers and researchers

Source: The Block

The Ethereum Foundation is providing $2.0 million in funding for Eth 2.0, also known as Serenity to bring Proof-of-Stake to Ethereum ($ETH). The recipient development teams have been tasked with building multi-client testnets as development of Phase 0 approaches. The allocations are as follows:

CRC Commentary: Ethereum Foundation got a lot of criticism last year because of its ineffective incentive mechanism towards projects that are trying to improve the Ethereum protocol and ecosystem. However, last month, one of the presidents of the Ethereum Foundation has changed and they pledged to provide more funding towards these ecosystem projects. Currently, one of the most important steps towards ETH 2.0. is the client implementation and Ethereum Foundation provides around 2 million USD funding to these client projects. I expect these incentives to be effective and increase the speed of ETH 2.0 development.

2) Binance launches crypto lending with up to 15% annual interest

Source: CoinDesk

Binance has launched a lending business for customer deposits, supporting Tether ($USDT), Binance Coin ($BNB) and Ethereum Classic ($ETC). Loans will have a two week fixed maturity with annual interest rates of 10%, 15% and 7%, respectively. Going forward, Binance looks to add support for more tokens based on demand.

CRC Commentary: Binance keeps delivering and diversifying their product portfolio on their platform. As a complementary product to their margin trading services, now they are providing lending services for USDT, BNB and ETC. The idea is that, those users who are using margin services effectively act as borrowers and Binance itself has been the main lender to these borrowers so far. With the opening of retail lending services, now more money can be borrowed by the users, hence, the margin limits of tokens can be increased. Annual interest rates of 10%, 15% and 7% are also pretty high compared to fiat interest rates. Another step by Binance in the direction of becoming a crypto bank.

3) In first, Swiss regulator issues banking license to two blockchain firms

Source: The Block

Swiss regulator FINMA has granted banking and securities licenses for the first time to two crypto firms, SEBA Crypto and Sygnum, allowing them to offer services to institutional and professional customers. In the announcement, FINMA also released guidance on anti-money laundering requirements for crypto firms mandating they only send and receive tokens from customers who have had their identities verified.

CRC Commentary: Switzerland, as expected, becomes the first developed country to issue banking license to blockchain firms. Swiss Banks have been the safeguards of money in the traditional finance and they hold the biggest custody of fiat money. It is possible the same scenario will play out in the crypto field as well. It is still too early, but this is important news to keep watch.

4) MakerDAO token holders vote on priority list for multi-collateral Dai

Source: Maker Forum

Maker ($MKR) token holders have voted for which tokens will be prioritized in multi-collateral Dai. According to the votes the priority list will be Ethereum ($ETH), Augur ($REP), Basic Attention Token ($BAT), 0x ($ZRX), DigixDAO ($DGD), OmiseGo ($OMG), and Golem ($GNT). Between 39 and 50 unique voters participated in voting for each asset.

CRC Commentary: Maker DAO is currently the biggest DEFI application running on Ethereum with almost 1,5% of all the Ethereum being locked on Maker Dao smart contract. Based on the roadmap of Maker Dao, the next step is to open other smart contracts which can reserve other tokens and they have voted on which tokens to hold. The list contains some of the most well capitalized ERC 20 tokens such as BAT, REP, 0x but it would be more interesting to see some tokens other than ERC-20s such as BTC, XRP, etc. For that to happen, we will have to wait until chain interoperability becomes more common, but this is an important step towards that future.

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