According to Kava Labs CEO Brian Kerr, the major reason that decentralized finance, or DeFi, has not yet hit the mainstream is that “93% of holders are never gonna touch their own keys.”
Kava is a non-Ethereum-based DeFi platform that enables users to earn interest on the cryptocurrencies they hold. The investors Kerr hopes to reach are those who used an on-ramp like Coinbase or Binance to buy cryptocurrencies that are now sitting on the exchange. They are “worried about ‘fat-fingering’ and losing their funds in a transfer, or something like that,” he says. Being used to keeping their money in a bank account, these investors prefer to keep their cryptocurrencies on a crypto platform rather than in a hardware wallet.
Kava’s platform connects lenders with borrowers directly, but the real challenge is “not just creating the protocol on the platform but making integrations on it directly accessible in the venues where people currently live,” he says, referring to exchanges and payment processors.
In the future, he envisions that major players like PayPal and Fidelity, which are both rolling out cryptocurrency solutions, may want to integrate with the Kava API in order to “extend interest-earning products” directly to their users.
“A core belief that we have is that you have to meet users in the venues that they’re at. I think of them like distribution hubs, but really they are retail-focusing apps that have relationships with their customers.”
Kava has already integrated with a number of platforms — including Binance, Huobi and Bitmex — “Not for listing our tokens but actually the savings products, and the lending products of Kava are directly available on those platforms.” Kerr envisions many more will plug Kava services into their platforms. “Basically, any app where crypto is held, we can expand the custody of Bitcoin or XRP or Ethereum or whatever it might be with financial services to put that capital to work.”
The vision is to allow a user holding a currency like Bitcoin to simply click on the interest-earning product they want and use a slider to adjust the amount of BTC they wish to earn interest on. The user experience is simple, Kerr says, as they won’t even see the Kava user interface or website. “It’s all handled on the back end.”
“I think that’s really the direction that things are going, is that people don’t need to know that DeFi is there.”
A refuge in gaming
Kerr, now 32, describes a rough childhood of being raised by his grandmother in an ethnically diverse and working-class neighborhood where “all the neighbors were doing various forms of drugs, more the hard stuff like meth and heroin. It was very different from your middle-income white suburbia of America that most people think of,” he recalls, adding that for as long as he can recall, he felt out of place as one of the only white people in his school.
It was also a scary environment. “Every day at noon there would be huge fights and police would come in with riot shields,” he reminisces of his underfunded high school that resembled a prison — full of gangs and often unable to provide teaching. With that in the background, he gravitated toward a group of students “who liked playing video games.” That’s how he got into gaming, which would go on to define much of his career.
The competitive environment of university, where he first started in software engineering, was an unexpected challenge because in high school, “I was able to coast through that without any real guidance or good habits.” He dropped out.
He soon started taking classes again and eventually was accepted to San Francisco State University in 2007, where he settled on business because he saw it as a generalist degree for an uncertain future. “I ended up switching my major about eight times through that process,” he recalls.
Upon graduating in 2011, he was hired by Sierra Circuits, a circuit board manufacturer, where he was “a sales engineer working with tech guys at Boeing and Raytheon on their prototypes for things that would go up into space.” Though he gained confidence in working with technology, he soon dreamed of leaving the family-run company for entrepreneurship where he could be his own boss.
“All the executives and anyone that got promoted was like within the family, and everyone else was treated almost like a second-class citizen. That was my first education on how companies should not be run. I also realized that I need to do my own thing.”
Leaving the company, Kerr arrived at a fork in the road. On one side was a well-paying job with chip manufacturer Nvidia. “It was sort of a fast track to a CMO [chief marketing officer], definitely a great opportunity for where I was in my life and experience level,” he says, adding that the work would have focused on the company’s important gaming product lines.
The other option was to move to London where he would work for Fnatic, a three-person esports-gear startup, “to entertain my entrepreneurial desires, taking this enthusiast esports team and turning it into something real.” The idea was to “build a Beats by Dre, but for gaming gear,” with celebrity gamers and influencers helping design things like keyboards, headsets and mice.
“I had these two opportunities. One was a very reliable corporate job that was gonna teach me a lot about how a big company works — that was going to be really good for my career. Whereas on the other side, it was a pretty questionable opportunity.”
He asked various friends working senior-level jobs at different businesses what they would do, and they all considered Nvidia to be the obvious choice. “Zero people said to take the role at Fnatic trying to build hardware. ‘That’s preposterous,’ they said.” He decided not to take the advice and moved to London. The work also took him to Gothenburg in Sweden before bringing him back to the San Francisco Bay Area in 2015.
At Fnatic, Kerr helped build the team up from three to over 100 people and learned to run an international business with manufacturing in Asia and partnerships with gamers around the world. Business was booming due to esports entering the mainstream through things like Twitch, a streaming platform marketed toward gamers. Early on, having an esports team was just a hobby between friends and family who might collect the occasional sponsorship — and then, “All of a sudden, these teams are worth hundreds of millions of dollars and the lines of business are huge and there’s media rights involved and everything else.”
It was in San Fransisco that Kerr met Alexander Kokhanovskyy, a Russian esports founder who was launching DMarket, a decentralized market for in-game items. The ownership of digital assets like character skins or gold for multiplayer games such as World of Warcraft seemed natural and intuitive to Kerr, so he joined the project as an adviser.
“It blew my mind that these guys were able to raise $20 million in about three weeks on effectively a PowerPoint because it was really hard to do that for a legitimate business like mine, with millions of dollars of real revenue.”
Witnessing DMarket’s success in gathering investment capital served as Kerr’s wake-up call to blockchain, causing him to look more deeply into the growing industry.
“I was fortunate enough to be able to ping my network and get in front of people like Joseph Lubin and executives at Ripple and others, all within the span of four weeks after deciding to jump into crypto as my next thing, and that’s been the story ever since,” he recounts.
“I just knew I was going to dedicate at least the next five to 10 years of my life into this industry because there was so much disruptive technology that was going to be in play. It was just gonna be the best opportunity, for me and then also to give impact to the world.”
Kerr says that his Kava co-founders came from the poker world and gained respect for the idea of censorship-resistant money because online poker sites would often get shut down by regulators due to gambling laws. When this happened, all the money held by the companies would be seized, meaning that “my co-founders’ money was just locked up for years, and they had no access to it. They weren’t able to earn interest on it. It was just stuck in limbo.” As a result, much of the online gambling industry switched to cryptocurrency.
Kerr expresses wonder at the various ways that cryptocurrency has drawn people in. Whether through poker, gaming, or by encountering it via work or study, there are many paths to blockchain. “I just happened to lean really heavily on the gaming side.”
Kava Labs actually began with a very different mission, he explains. “We founded Kava Labs actually thinking that cross-border payments using digital currencies was actually going to be the biggest game-changing thing. The volumes of trade in foreign exchange are some of the largest in the world, so the TAM [total addressable market] seemed to be so large that you could make an impact there.”
The firm’s original goal led the team to work with Ripple to speed up transactions. Some of the solutions it worked on included implementing “noncustodial wallets into Lightning Network with Ethereum payment channels, and Dai payment channels using Dai stablecoins,” he says.
Between 2017 and 2019, the crypto-payments industry “was not going into the billions — it was still in the $100 millions,” Kerr said, explaining that the business was not scalable at that volume. With the team being $500,000 in the red with its own money by June 2019, a change of course was needed.
“We did an audit of all of our skills at that time, and we had built up this big wealth of knowledge of all the different blockchains — how they work, what would be the requirements to make them interact with each other.”
They decided to build Kava as a platform for accessing DeFi services without needing to rely on Ethereum. The first step was to write a blog post, after which the project attracted a “total of $8 million over the course of a few weeks.”
In October 2019, Binance Launchpad hosted a KAVA token sale and airdrop, a lucky strike that Kerr says resulted in a wide distribution of tokens, which is generally seen as evidence of investor confidence. “It’s been kind of going to gangbusters ever since we launched the Kava blockchain,” which happened the following month.
Despite the hype, the initial minimum viable product took until June 2020. That product was a platform offering collateralized loans first for Binance’s native Binance Coin before expanding to Bitcoin, XRP and others.
Kava has grown substantially since launch, with Kerr explaining that the platform now boasts about $300 million in deposits and $80 million in outstanding loans between an approximate quarter-million accounts.
“I expected it to grow more, but it is the largest in-production non-Ethereum DeFi platform and application that exists today. I’m very proud of that fact, and I think it’s only sort of up from here as we add more assets and add more financial services on top of it.”
Despite his apparent success, it hasn’t been an easy road. “I’ve always had a little bit of imposter syndrome,” he says, referring to the feeling that one’s achievements or position have not been earned. The fact that the industry is rife with scams and hacks no doubt adds to the pressure, and many Bitcoin-maximalist and no-coiner types are known to deride the DeFi industry as little more than a Ponzi scheme. The high rates of return can also paradoxically turn away users who view DeFi’s opportunities as too good to be true.
Kerr has high hopes for Kava’s newest feature, a “hard-protocol money market” which was initially set to be released on March 31 to allow users to earn interest on Bitcoin. “It will be very high early on is all I can really say, but it’s going to be likely in the 20%-plus APY range to start,” he says with confidence. However, he does not expect such high returns to last, due to increasing competition between DeFi platforms as borrowers seek the lowest interest rates.
“I think all the DeFi services are going to be commoditized over time. Everything can be squeezed in terms of prices as people chase yield.”
Blockchain monitoring provider PARSIQ integrates with crypto custodian Hex Trust
PARSIQ, a blockchain monitoring & event tracking service provider, today announced it entered into a new strategic partnership with Asia-based digital asset custodian, Hex Trust.
The partnership will enable PARSIQ to provide PRQ token holders with bank-level security to keep their assets safe; while offering Hex Trust’s clients additional security with enterprise-grade monitoring.
Listed on the OKEx exchange since the beginning of this year, PARSIQ (PRQ) is a “reverse-oracle” blockchain platform that addresses the lack of adequate monitoring and analytics tools in the cryptocurrency ecosystem. Users can keep tabs on events across different blockchains in real-time and connect those events to any off-chain apps and devices to facilitate different workflows.
Last year, the firm secured funding support under the USD $100 million accelerator fund offered by Binance, the world’s largest cryptocurrency exchange.
Aiming to help propel the mass adoption of blockchain automation tools, PARSIQ has inked a slew of deals with trusted blockchain labels since its establishment in 2018. Among those are Algorand, Dash, Bitfury Crystal, and AllianceBlock, and, most recently, SuperFarm, Injective, PAID Network, and Chainlink.
Collaboration with Hex Trust is another significant step toward realizing the company’s vision to operate a safe cryptocurrency platform that meets the strictest global regulatory requirements. It will allow PARSIQ to use Hex Trust’s proprietary safekeeping solution “Hex Safe” for custody of PARSIQ’s treasury. In addition, clients will be able to store their PRQ assets in Hex Trust’s custody vault.
“Onboarding a company like Hex Trust and getting custody support for PRQ tokens adds a new level of validity to PARSIQ and underlines just how much security means to us and our holders,” said Tom Tirman, CEO of PARSIQ.
The deal is a win-win for both stakeholders. Hex Trust can leverage PARSIQ’s infrastructure for blockchain transactions and automate internal business processes such as notifications, deposit processing, and security monitoring.
“We are delighted to have been appointed PARSIQ’s custodian and provide the highest security levels for their digital assets. Teaming up and integrating their transaction monitoring and automation tools into our custody platform will provide added benefits for our clients and improve their overall experience,” Alessio Quaglini, Co-Founder and CEO of Hex Trust added.
Price analysis 4/16: BTC, ETH, BNB, XRP, DOGE, ADA, DOT, LTC, UNI, LINK
Dogecoin’s (DOGE) massive rally to $0.45 propelled it to a market capitalization of over $54 billion to make it the fifth most valuable cryptocurrency by market cap.
This lofty market cap comes as a surprise to many since the project has no active developers and is only a meme coin, thus the current rally brings back memories of the excesses seen during the ICO boom in 2017.
Rallies like the one seen in Dogecoin indicate that several traders have entered the fray and are looking to get rich overnight. The only positive sign is that the mania has not spread to other coins. If it does, then the crypto markets are likely to witness a sharp correction in order to shake out the weak hands.
CNBC host Jim Cramer has become one of the first well-known people to reveal that he closed half of his Bitcoin (BTC) position. While Cramer’s selling is an isolated event, it does warn that not all professional investors who have recently turned Bitcoin believers are going to be long-term HODLers.
If the institutional investors rush to the exit, it could cause a huge correction in several cryptocurrencies. Traders should be mindful of irrational exuberance and avoid being sucked into FOMO-driven trades as it’s better to stick to a trading plan and think long-term rather than dream of overnight riches.
Let’s study the charts of the top-10 cryptocurrencies to identify the critical support levels and outline various bullish and bearish scenarios.
The bulls could not capitalize and build upon the breakout of the overhead resistance zone at $60,000 to $61,825.84 on April 13. Bitcoin price turned down on April 14 after hitting an all-time high at $64,849.27 and the bulls are currently attempting to flip the $60,000 level to support.
If they manage to do that, the BTC/USDT pair may make one more attempt to resume the uptrend. A breakout of $64,849.27, could start the next leg of the uptrend that could reach $69,540 and then $79,566.
However, the negative divergence on the relative strength index (RSI) is warning of a possible correction. Interestingly, the price reversed direction when the RSI had reached close to the downtrend line.
If the price dips below the 20-day exponential moving average ($59,427), it will be the first sign that buyers may be losing their grip. The break below the 50-day simple moving average ($55,814) will further cement the view that a deeper correction is likely.
The bulls may attempt to arrest the decline near $50,460.02 but if this level cracks, the pair could drop to the critical support at $43,006.77.
Ether (ETH) extended its uptrend and hit an all-time high at $2,545.80 today. Profit-booking by traders pulled the price down to $2,300 but the long tail on the day’s candlestick suggests that bulls continue to buy on dips.
If the price recovers and the bulls push the price above $2,545.8, the ETH/USDT pair could start the next leg of the uptrend. The next target objective on the upside is $2,745 and then the psychological level at $3,000.
The upsloping 20-day EMA ($2,131) and the RSI near the overbought territory suggest the path of least resistance is to the upside. This bullish view will be invalidated if the price turns down and breaks below the 20-day EMA. Such a move could pull the price down to $1,925.10.
Binance Coin (BNB) formed a Doji candlestick pattern on April 14 and that was followed by an inside day candlestick pattern on April 15. Both these setups indicate indecision among the bulls and the bears. This uncertainty resolved to the downside today.
However, a minor positive is that the bulls are defending the 38.2% Fibonacci retracement level at $483.95, as seen from the long tail on the day’s candlestick. The bulls will now try to push the BNB/USDT pair above the all-time high at $638.56 and resume the uptrend.
Conversely, a break below $483.95 could pull the price down to the 20-day EMA ($437). A break below this support will suggest that the traders are rushing to the exit and that could result in a drop to the breakout level at $348.69.
XRP is currently correcting the sharp rally. The bulls are attempting to defend the first support at the 38.2% Fibonacci retracement level at $1.48, as seen from the long tail on the day’s candlestick.
The XRP/USDT pair may now consolidate between $1.48 and $1.96 for a few days before starting the next trending move.
A break above $1.96 could start the next leg of the uptrend that could reach $2.54. The rising moving averages and the RSI in the overbought zone suggest the bulls have the upper hand.
Contrary to this positive assumption, if the bears sink the price below the $1.48 support, the pair could drop to the 20-day EMA ($1.18). Such a move will suggest the bullish momentum has weakened and that could delay the next leg of the uptrend.
Dogecoin’s momentum has been picking up since the past three days and that has resulted in the massive pump today. This shows that more and more traders are getting sucked into the trade due to FOMO.
Usually, such buying frenzies end in a major top formation. After the last bull has purchased, the price reverses direction and the waterfall decline starts. It is difficult to predict a top during such a frenzy but the psychological $0.50 level may act as a hurdle.
The decline after the DOGE/USDT pair tops out is likely to be vicious. The usual 38.2% Fibonacci retracement level may not hold and the pair is likely to drop to the 61.8% Fibonacci retracement level at $0.20.
Traders should control the urge to get into such trades even at the risk of missing out on some profits.
Cardano (ADA) has been facing a tough battle between the bull and the bears near $1.48 for the past two days. Although the bulls managed to push the price above $1.48 today, the bears have been quick to pull the price back below the level.
After the third unsuccessful attempt to sustain the price above $1.48, the bulls seem to have dumped their positions today, resulting in the formation of an outside day candlestick pattern.
However, the long tail on today’s candlestick suggests the bulls bought the dips to the 20-day EMA ($1.28) aggressively. The bulls may now make one more attempt to drive the price above the $1.48 to $1.55 resistance zone.
If they manage to do that, the ADA/USDT pair could resume the uptrend and start the journey toward $2. Conversely, a break below the moving averages could offer the bears an opportunity to sink the price to $1.03.
The bulls pushed Polkadot (DOT) above the $42.28 level on April 13 but could not challenge the all-time high at $46.80. This shows a lack of demand at higher levels. The altcoin has dropped below $42.28 today and the bears will now try to sink the price below the 20-day EMA ($40).
If they succeed, the selling could pick up further as the bulls may rush to cover their positions. Such a move could sink the DOT/USDT pair to $32.50 and then to the critical support at $26.50.
Contrary to this assumption, if the price again rebounds off the 20-day EMA, it will suggest that bulls have not given up. They will make one more attempt to thrust the price above the $46.80 resistance and resume the uptrend.
Litecoin (LTC) is in a strong uptrend. The bears had tried to start a correction today but the bulls purchased the dips aggressively as seen from the long tail on the day’s candlestick. The reversal may have caught several aggressive bears on the wrong foot, which could be the reason for the pick-up in momentum.
The LTC/USDT pair has broken out of the target objective at $307.42, clearing the path for a rally to $374. However, the RSI above 76 signals caution because, in the past, the pair has repeatedly entered a correction when the RSI level reaches close to 80.
The critical support to watch on the downside is the 20-day EMA ($241). A break below this support will be the first sign that the bulls are tiring and a deeper correction is likely.
Uniswap (UNI) broke out to a new all-time high on April 15 but the bulls are struggling to sustain the higher levels. When the price fails to follow up higher after breaking out of a significant resistance, it indicates exhaustion.
However, the long tail on the day’s candlestick suggests the bulls continue to buy on dips. If the buyers can propel the price above the all-time high at $39.60, the UNI/USDT pair could rally to $43.43 and then $50.
On the other hand, if the price again turns down and breaks below the 20-day EMA ($32), several aggressive bulls who had purchased the breakout of $35.20 may bail out of their positions. The long liquidation could pull the price down to $27.97.
Chainlink (LINK) surged above the $36.93 overhead resistance on April 14, signaling the resumption of the uptrend. The altcoin hit an all-time high at $44.33 where profit-booking set in.
However, the long tail on the day’s candlestick suggests that the bulls aggressively purchased the dip to $38.52 today. This indicates that the sentiment remains positive and the bulls are buying at lower levels.
The buyers will now try to resume the uptrend by pushing the price above $44.33. If they succeed, the LINK/USDT pair could rally to $50.
Contrary to this assumption, if the price again turns down and breaks below the $36.93 support, the pair could drop to the 20-day EMA ($34). If this support cracks, the decline could extend to the 50-day SMA ($30).
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
Market data is provided by HitBTC exchange.
How The XRP Community Reply To The SEC’s “Shady” Move
The Securities and Exchange Commission (SEC) lawsuit against Ripple Labs, and executives Brad Garlinghouse and Chris Larsen seem to have taken a weird turn. According to the former federal prosecutor and defense lawyer James Filan, the Commission could have allegedly bypass certain rules to its benefit.
#XRPCommunity #XRP #SEC v. #Ripple @sentosumosaba BREAKING: DISCOVERY DISPUTE REGARDING #SEC CONTACTING FOREIGN REGULATORS AND SEEKING DISCOVERY OUTSIDE RULES OF FEDERAL PROCEDURE AND HAGUE CONVENTION. LETTER MOTION ATTACHED.https://t.co/53ytaZCjTi
— James K. Filan (@FilanLaw) April 16, 2021
The SEC apparently is “pursuing discovery” from the United Kingdom Financial Conduct Authority (FCA) on Ripple. This method is called Memoranda of Understanding (“MOU”) and, according to a document file with the Southern District of New York and Magistrate Judge Sarah Netburn, violates the Hague Convention.
The document was introduced by Ripple Labs legal representation and claims the SEC has at least 11 MOU demanding documents from “overseas entities”. The document claims “many” of these entities are the payments company business partners” and about 10 international regulators.
The defense qualifies the process as “improper” and part of an “intimidation tactic” to allegedly reduce Ripple’s capacity to conduct business outside of the U.S. The document said:
Not only is the use of pre-litigation investigative tools prejudicial to Defendants and the recipients of such requests, as described below, it also prevents this Court from exercising its lawful discretion regarding the scope of permissible foreign discover.
Behind the judge’s back, the SEC violated U.S. civil court rules by issuing multiple “MOUs” to obligate foreign govts to obtain files from @Ripple‘s foreign business partners. They got caught.
Read the full letter to Judge Netburn here 👇https://t.co/9P7wIMfTr8
— CryptoLaw (@CryptoLawUS) April 16, 2021
SEC “unjust” advantage in XRP case?
Commenting on the discovery, lawyer Jeremy Hogan said the SEC is placing indirect “regulatory pressure” on Ripple and its partners. Since the Commission is the only party capable of employing said tactic Hogan said:
This is NOT something a “typical” Plaintiff could do and it’s not fair, so Ripple is calling dirty-poker (…). (former prosecutor), this is typical government prosecutorial pressure-litigation, applying pressure not only to you but your business friends as well.
General Counsel for Gala Games Jesse Hynes also gave his opinion and claim it was an “insane” move by the regulator. Hynes highlighted the importance and implication this lawsuit could have for the crypto industry and said:
Shame on the SEC! On the bright side, the SEC is basically admitting that this is a matter of great political and worldwide significance. Can’t wait for that Summary Judgment motion with a major questions doctrine argument.
XRP is trading at $1,64 with an 8.9% correction after an impressive rally in the past days. On the weekly and monthly chart, XRP sits at 55.9% and 255.2% profits.
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