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Shifting gears: Driving enterprise DeFi adoption through tokenization

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Decentralized finance has quickly risen to prominence, largely driven by the fact that there is over $11 billion of total value locked in the sector. While it makes sense that DeFi — a space characterized by terms such as “yield farming” and “meme tokens” — has captured the majority of the cryptocurrency sector’s attention, the concept is also beginning to catch on within the enterprise world. 

Stefan Schmidt, chief technology officer of Unibright — an enterprise blockchain development company — told Cointelegraph that DeFi concepts can be applied within the enterprise sector where financial assets can be represented by programmable tokens: “In general, the definition of DeFi still isn’t clear outside of the enterprise sector.” However, according to him, DeFi is “Anything finance related that can be tokenized.”

2021 to become the year of enterprise DeFi?

Although enterprise DeFi is still in development, Schmidt mentioned that this will start gaining traction very soon, as these concepts will be implemented within enterprise IT tech stacks in 2021.

In the meantime, the first step that will set the stage for enterprise DeFi will be facilitating agreements between organizations sharing data. Specifically, these agreements will show that all invoices and other financial transactions are valid and should be processed for payment. “If you don’t have a trusted agreement between all parties showing that invoices are valid and should be paid, you can’t move forward in the DeFi space,” said Schmidt.

To enable one possible use case, enterprise blockchain development company Provide has partnered with Unibright in a joint venture. Beginning Oct. 20, Unibright will operate entirely under Provide as both companies aim to unify the technology enterprises require to safely synchronize data.

The two companies have been closely collaborating for a year already to help enterprises implement the Baseline Protocol, an OASIS open-source initiative that typically uses the Ethereum mainnet as a type of middleware to serve as a single source of truth for organizations sharing data. Coke One North America was the first publicly announced use case, demonstrating how the Baseline Protocol is allowing the bottling giant to tokenize invoices across its supply chain.

Kyle Thomas, CEO of Provide, told Cointelegraph that the Baseline Protocol is indeed the lynchpin that will facilitate the age of corporate data-sharing to enable enterprise DeFi. “The ability to seamlessly coordinate business processes such as purchasing and supply chain movements between trading partners is a game changer for global business,” he remarked.

Incorporating DeFi concepts into the enterprise

Thomas further noted that a joint venture between Unibright and Provide seeks to drive an end-to-end baseline as a service offering. This will include consulting enterprises that are interested in incorporating the Baseline Protocol into their existing enterprise resource planning systems. “When this implementation is understood, enterprise ecosystems can be set up in a non-centralized way, where every participant is running their own compliant IT tech stack,” he said.

The adoption of the Unibright framework will allow Provide to extend its Unibright Token (UBT) model for the upcoming launch of Provide Payments. According to Schmidt, Provide Payments will use UBT tokens to provide liquidity for its managed transaction service. This service will initially support paying gas fees for arbitrary transactions broadcast to a public blockchain network, like Ethereum. Customers will then be billed based on transaction volume.

Provide Payments will seek to enable traditional enterprise procurement of public blockchain services without the need for customers to ever buy or hold cryptocurrency. “All of Unibright’s DeFi offerings will be customized for enterprise needs,” said Marten Jung, CEO of Unibright. “This combined offering paves the way to blockchain-based corporate data sharing.”

Tokenized standards will soon follow

Yet in order for a baseline-as-a-service offering to come to fruition, token standards around purchase orders or invoices must still be developed. Paul Brody, global innovation lead for blockchain at Ernst & Young, told Cointelegraph that eventually there will be an evolution where enterprise users will follow the path of consumers, adding: “They will start with coordination of business agreements, but they will then add payments. As the privacy tools from Baseline Protocol get more widespread usage, I think we will then see the adoption of DeFi by enterprises.”

Brody further mentioned that early enterprise DeFi use cases will be represented by enterprises selling financial assets such as receivables to third parties in bidding models. However, he noted that the risk-averse nature of enterprises means that adoption will occur further down the road.

Moreover, Unibright’s Jung shared that, from a customer perspective, many of the challenges expressed relate to the ease of use for a tech stack operating with the Baseline Protocol, along with the costs of ownership. Jung mentioned that transaction costs should go down in the coming years, yet this is tough to predict when using blockchain as a middleware to serve as a single source of truth. Data privacy standards and permissioned data are also challenges that need to be overcome in order for enterprises to start preparing to adopt DeFi techniques.

Interestingly, while Ethereum 2.0 has also been predicted to drive enterprise DeFi, both Thomas and Schmidt think that it will not have a significant impact on the progress of the Baseline Protocol. According to Schmidt:

“We are not restricted by Ethereum limitations since the Baseline Protocol is blockchain agnostic. But if a company wants to baseline a process using the Ethereum network, ETH 2.0 may help a bit if the throughput of the network goes up to alleviate the need for a layer 2 solution.”

Source: https://cointelegraph.com/news/shifting-gears-driving-enterprise-defi-adoption-through-tokenization

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The Changes Continue: Facebook’s Libra Has Been Rebranded To Diem

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  • Facebook shook the world last year after announcing plans to introduce a “single global digital currency” dubbed Libra. However, the social media giant’s efforts were quickly scalded by global regulators as the project received massive blowback.
  • Facebook didn’t give up on its idea. Instead, the company decided to rebrand its two main products. Firstly, the Calibra wallet became Novi, and today, Reuters reported that the Libra name had been changed to Diem (meaning ‘day’ in Latin.) 
  • Stuart Levey, CEO of the Geneva-based Diem Association behind the digital coin, confirmed that the name change comes as a direct consequence of the regulatory hurdles. He noted that “the original name was tied to an early iteration of the project that received a difficult reception from regulators. We have dramatically changed that proposition.”
  • The Diem currency would operate as a signal dollar-backed digital coin. Although Levey failed to specify the timing of the launch, recent reports suggested that it may arrive as early as January 2021. 
  • Levey further explained that the Novi team has already begun building a digital wallet that will eventually hold Diem coins. Apart from waiting for approval from Swiss regulators to launch, the Diem Network is also in talks with US federal and state watchdogs. However, Levey didn’t disclose the nature of those negotiations. 
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Source: https://cryptopotato.com/the-changes-continue-facebooks-libra-has-been-rebranded-to-diem/

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Coinbase Faciliated MicroStrategy’s $425M Bitcoin Purchase Without Moving The Market

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The leading US-based cryptocurrency exchange Coinbase assisted in MicroStrategy’s massive purchase of $425 million worth of BTC. The platform pledged to help other large firms diversify their portfolios with bitcoin in the future as well.

Coinbase Involved In MicroStrategy’s BTC Purchase

The NASDAQ-listed business intelligence firm made the news on two occasions earlier this year as it announced the total purchase of 38,250 bitcoins. At the time, this sizeable amount equaled about $425 million.

However, the entity that helped broker the deal remained unknown until today. The San Francisco-based crypto exchange Coinbase announced that it was “selected as the primary execution partner for MicroStrategy’s $425 million purchase of Bitcoin.”

The community speculated on how such a considerable amount didn’t move the markets as the price of BTC remained relatively still back then. Coinbase explained that this was the company’s intention in the first place:

“Using our advanced execution capabilities, leading crypto prime brokerage platform, and OTC desk, we were able to buy a significant amount of bitcoin on behalf of MicroStrategy and did so without moving the market.”

Furthermore, the exchange noted that its system takes a single large order and breaks it into many small pieces that are executed across multiple trading venues. This type of smart order routing reduces the trade’s impact on the market and assists in disguising the overall trade size.

This also helped MicroStrategy to get a better price for its BTC purchase as Coinbase’s trading team “achieved an average execution price that was less than the price at which the buying started.” The post highlighted that this strategy ultimately saved 1% (or about $4.25 million) for the NASDAQ-listed company.

More Large Companies To Come?

MicroStrategy’s purchase kicked off a wave of large companies and prominent individual investors who expressed willingness to get in bitcoin as well.

Jack Dorsey’s Square followed with a $50 million BTC allocation. More recently, the Wall Street giant Guggenheim Partners filed a document with the SEC to purchase about $500 million worth of bitcoin for one of its funds.

Coinbase asserted that more firms will look to BTC to hedge or diversify their excess cash. Consequently, the large US exchange will “look forward to helping more corporate companies and institutions looking to diversify their capital allocation strategies with crypto.”

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Source: https://cryptopotato.com/coinbase-faciliated-microstrategys-425m-bitcoin-purchase-without-moving-the-market/

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U.S. DoJ Extradites Key Member of Crypto Ponzi Scheme From Panama

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The U.S. Department of Justice (DoJ) has extradited a principal member of a fraudulent cryptocurrency mining and trading platform from Panama to the United States.

AirBit Club Co-founder to Face Criminal Charges in the U.S.

According to an announcement by the acting U.S. attorney for the Southern District of New York, Audrey Strauss, U.S. authorities were able to extradite Gutemberg Dos Santos, co-founder of crypto Ponzi scheme AirBit Club.

Dos Santos, who holds dual citizenship from Brazil and the United States, was extradited to the U.S. from Panama on Nov. 23, 2020. According to Strauss, Dos Santos’ repatriation was possible with the help of the Homeland Security Investigations (HSI).

As reported by CryptoPotato back in August, the U.S. authorities arrested five individuals who were involved in the AirBit Club scheme that fleeced unsuspecting victims of $20 million. Operators of the crypto Ponzi scheme ran false advertisements that promised users hyperbolic rewards from Bitcoin trading and mining.

However, the DoJ at the time alleged that the group only sought to live flamboyant lifestyles of victims’ funds. While spending money on luxury homes and cars, they reportedly made more moves to recruit more victims across the U.S and different other countries.

A statement from the DoJ document reads:

“The extradition of Dos Santos reflects the determination of agents from HSI New York’s El Dorado Financial Crimes Task Force to dismantle global criminal organizations, wherever the investigation takes us. Utilizing our broad authorities and network of law enforcement partners, HSI will continue to hunt those who allegedly prey upon innocent citizens for financial gain.”

Also, if Dos Santos is found guilty of the charges levied against him, the AirtBit Club co-founder could face between 20-30 years in prison.

Law Enforcement Fighting Crypto Crimes

Regulatory authorities globally continue to warn investors about fake crypto-related schemes that promise high returns. According to a recent report by CryptoPotato, Chinese authorities confiscated $4 billion worth of crypto tokens from PlusToken scammers.

PlusToken, which is one of the biggest cryptocurrency Ponzi schemes, promised users high returns, similar to other crypto fraudulent projects. The Chinese law enforcement began investigating the project after it shut down in 2019. In July, the police arrested 27 key members of the scam project, along with 82 other members.

Another major fraudulent crypto scheme, OneCoin, reportedly stole $4 billion from investors with its founder Ruja Ignatova also known as “Crypto Queen,” still at large. Meanwhile, Ruja’s brother Konstantin Ignatov has been arrested by the U.S. authorities since 2019 and could face a 90-year prison sentence.

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Source: https://cryptopotato.com/u-s-doj-extradites-key-member-of-crypto-ponzi-scheme-from-panama/

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