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The NFT paradigm shift for DeFi

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I’m Tom Pandolfi, the founder and director of Honey DeFi, a decentralised protocol which aims to implement yield NFTs into DeFi.

Honey DeFi is a decentralised protocol which allows for individualised and non-fungible financial services. Honey is special in that utilises Non-Fungible Tokens (NFTs) and ERC-721 technology to offer these services. The implementation of non-fungible assets in DeFi is critical in order to offer the variety of services available in traditional finance. These services vary from IOUs, underwriting, mortgages, high risk loans, specialised collateral, and numerous different derivatives which are not available with DeFi’s current ERC-20 standard. The limited nature of ERC-20 has lead to redundant financial services, which lack any singular competitive advantage over one another, due to their lack of customisation and uniqueness in regards to individual investors.

This can all change thanks to utility NFTs.

These NFTs interact with the protocol’s masterchef smart contract. Unlike traditional DeFi masterchefs, it doesn’t automatically reward the liquidity provider’s wallet address, but instead rewards the wallet address which owns the NFT associated with the staked liquidity.

ERC-721 tokens (NFTs) are tied to an individual wallet and serve as a pointer for the masterchef, the owner of the particular NFT has their wallet address whitelisted in the pool to gain access.

Effectively, this allows us to create individualised derivatives on top of preexisting DeFi assets, something previously unachievable with ERC20.

‌NFTs can allow for increased circulation of liquidity, for example with liquidity pools. One of the biggest draw backs for staking liquidity in a pool is that investors no longer have access to staked or locked assets. However, if these assets can be mirrored through the use of NFTs. When a liquidity provider stakes X amount of ETH, they would receive an NFT which allows it’s holder to redeem X amount of ETH. Thus, liquidity providers can still trade the staked liquidity, by trading an ERC-721 token, which mirrors the value of it’s underlying ERC-20 tokens. Interest and APRs from the staked liquidity would not directly go to the liquidity provider, but to whoever owns the NFT. This allows for the commoditization of APRs and staked liquidity on our protocol.

To take this a step further, tokenisation of this exchanged liquidity allows us to build derivatives on top of this staked capital. This can be done, as it already exists in traditional finance, through credit default insurance. Additional risk, and thus higher returns can be layered on top of the underlying asset (liquidity staked in a pool) without affecting it.

NFTs can also be used to collateralize off-chain assets in DeFi. Our platform seeks to integrate the different protocols who finance off-chain assets into on-chain liquidity, such as Centrifuge. Integrating securitasation protocols is key in order to layer NFT derivatives on top of DeFi.

$HONEY is a reward token, used to pay out the yield of our different NFTs. Owning NFTs unlocks new use cases for this token — such as DAO, lending, borrowing, staking, and more. The $HONEY ERC-20 token is the native asset of the ecosystem.

Investors who do not yet own NFTs still have access to “basic” functionalities. These functionalities may change in the future, as the nature of the token is adaptable, and depends on community input. At the moment, holding $HONEY rewards investors with reflections, thanks to a 10% tax on all transactions. This 10% transaction is the same for buy / sell orders, and includes sending money from one address to another. The tax is deducted from the recipient’s wallet upon receiving tokens. Certain wallets are exempt from this tax, if they own certain of our NFTs or participate in specific events.

The 10% transaction tax is adjustable, but at the time of writing this, it comprises of 4 parts. Firstly the reflections, which automatically rewards investors with $HONEY tokens via airdrop after each transaction. $HONEY from reflections comes from a 3% tax on every transaction. Another 3% of each transaction goes towards marketing, to insure the longevity of the project via a source of continuous cashflow. Money from marketing is used for paying influencers, airdrops, and miscellaneous costs. 2% of every transaction is sent to a burn address, effectively removing it from circulation. This is done to increase the scarcity of the remaining tokens, and incorporate deflationary mechanisms to support the price. Finally another 2% is taxed and redistributed to our partners, whether private investors such as venture capital firms or non-profits such as partnered bee charities. This amounts to a total tax of 10% on every transactions.

It’s obvious to us that NFTs will play an increasingly more important role in our daily lives, by simplifying ownership and transactions on the internet. Honey is positioned to be on the frontier of this bleeding edge technology, developing all of its financial use cases through its community of developers.

All of us believe NFTs will play an integral part in the current financial revolution empowering main street, by allowing decentralised, censorship resistant access to powerful financial instruments.

Our objective is to grow this technology in the DeFi ecosystem through a decentralised community of developers, which will create, test, sort, and improve upon the thousands of potential applications for NFTs in finance. This community is at the core of what makes Honey stand out. Just like with any other great technological advancement, some use cases will flop, and some will perfectly match the demands of consumers. Visibility on which ones will be successful is nearly impossible, hence our process to create, test, and sort serves as a necessary filter to offer the greatest products to our end consumers. the different applications.

NFTs will serve as a layer of liquidity on top of the existing DeFi protocols to offer the variety of financial services, only currently available in traditional finance. Beyond that, the decentralised nature of these non-fungible assets carries the potential to make DeFi’s offering superior to traditional finance, structuring its services in a more transparent and accessible manner.

It is our belief that any truly successful product in DeFi, is one that can be used as a building block for a system greater than itself, and it must present a utility to other protocols while allowing developers to build on top of it. We look forward to this future integration of NFTs, for which Honey is a testing grounds, and fully realise that it’s potential spans out further than the project itself. To learn more about our mission, and to join us in pioneering the future of DeFi, feel free to join our community on telegram

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Source: https://medium.com/@tomjpandolfi/the-nft-paradigm-shift-for-defi-e62b219f5748?source=rss——cryptocurrency-5

Blockchain

Binance USD (BUSD): A Case Study for Stablecoin Compliance and Security

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Binance USD (BUSD) has become one of the fastest-growing cryptocurrencies in the world, with a variety of use cases and growing demand amid the continued growth of the crypto markets. A key component to BUSD’s success is its unwavering compliance to the world’s most stringent regulatory standards, ensuring safety and security for all of the stablecoin’s users.

Stablecoins have emerged as major players in the crypto market this year, driven by user demand for flexible liquidity in fiat currency terms. These cryptocurrencies, whose market values are pegged to the worth of certain assets like the U.S. dollar, have also been important assets in the growth of decentralized finance (DeFi). There is $120 billion worth of stablecoins in circulation as of September 1, according to CoinMarketCap.

Amid the rise in demand for stablecoins, various segments of the crypto industry have brought up questions about the veracity of the 1:1 peg of major stablecoins to their backing assets, like the U.S. dollar and other fiat currencies. After all, if the issuers of stablecoins are not able to show that each unit of their tokens can be exchanged for the equivalent amount of the backing asset, there will be serious doubts about the credibility of these tokens, resulting in adverse market effects.

Therefore, when Binance launched BUSD with Paxos in 2019, utmost importance was put towards making sure that every unit of the stablecoin can be verifiably backed with U.S. dollars, therefore giving its users peace of mind and giving more credibility to a stablecoin industry beset by trust issues.

BUSD: A Case Study of Stablecoin Compliance and Safety

BUSD is a 1:1 U.S. dollar-backed stablecoin regulated by the New York State Department of Financial Services (NYDFS), issued by Paxos, a regulated blockchain infrastructure platform. Since then, BUSD has emerged as the third-biggest stablecoin in the world, with a market cap now above $12 billion and a user base of about 1.1 million people.

As a result of BUSD becoming the stablecoin of choice for millions of cryptocurrency users, we see a number of characteristics that show the merits of having a stablecoin that has prioritized user safety and compliance to regulatory and public standards.

1. Actual, Audited, and 100% Cash and Cash-Equivalent Reserves

As mentioned above, BUSD is one of few stablecoins in the world backed with actual cash. According to a current reserve report from Paxos, 100% of BUSD’s total market capitalization is backed by cash and cash equivalent reserves.

The issuance of Paxos provides a glimpse of the lengths that Binance has gone to ensure that BUSD is an above-board crypto-financial product. BUSD is one of the few stablecoins that provides monthly audited reports of reserves. Everyone can independently verify at specific points in time that the entire supply of BUSD tokens is consistent with USD in reserve accounts at U.S. banks held and managed by Paxos.

Ultimately, the audits and measures that are implemented to verify BUSD’s asset holdings solve one of the main concerns by regulators regarding the existence of actual reserves that back stablecoins.

2. Regulatory Trust and Insurance

With stringent measures such as the aforementioned monthly audits, BUSD adheres to the highest compliance standards, particularly by NYDFS, regarded as one of the most stringent when it comes to compliance requirements.

Why is having a regulator essential to the stablecoin business?

In August 2020, BUSD became “Greenlisted” by the NYDFS, making it pre-approved for custody and trading by any of the NYDFS’ virtual currency licensees.

Unlike most stablecoins that claim to be compliant, the BUSD business and its issuer Paxos are regulated by NYDFS, This means:

-The value of each stablecoin token is tied directly to the value of the US dollar, and the amount of “reserve” dollars equal or exceed the number of stablecoins outstanding.

-Regulators are overseeing the establishment and maintenance of reserves backing the stablecoins.

-Reserves may only be held in the safest forms, such as FDIC-insured bank accounts and in short-term maturity US Treasury instruments.

-Reserves are fully segregated from corporate assets, specifically for the benefit of token holders, and are held bankruptcy remote pursuant to the New York Banking Law.

Regulatory oversight is important because it assures stablecoin users that the dollars underlying their stablecoins are secure and will be immediately available when they want them. The NYDFS ensures the Trust companies, like Paxos, and their individual tokens are following its strict rules at all times.

3. Growing Use Cases

In less than two years since its debut, BUSD has become one of the fastest-growing cryptocurrencies while featuring a variety of utilities, from trading to lending and payments.

Stablecoins like BUSD play a critical role in the world of decentralization and in providing a solid foundation for the continued growth of DeFi (decentralized finance). BUSD is widely used in Binance Smart Chain (BSC) and Ethereum when it comes to trading, lending, and other scenarios. According to the BSC Project, there are currently more than 400 decentralized applications that support BUSD. On April 21, 2021, the single-day transfer amount of BUSD reached a peak of $261 billion, across 737,000 transactions on BSC.

The combination of ample regulatory compliance, trading volumes, and user interest in BUSD presents a case where private-driven financial innovation via blockchain technology can be pursued while staying compliant with user protection mandates stipulated by the world’s top regulators.

Why Strive for Compliance?

The rise in stablecoins has sparked discussions by regulators regarding the challenges they potentially pose to money markets. Making sure that each unit of a stablecoin can be exchanged for an equivalent unit of its backing asset is a matter of public interest, because deficiencies related to that characteristic can lead to general mistrust in the crypto markets. In the long term, the overall cryptocurrency industry suffers if these concerns aren’t addressed.

With BUSD’s emphasis on compliance, we can safeguard the trust of both users and regulators in stablecoins, while opening opportunities for the private and public sectors to cooperate in establishing stablecoins as an important asset class in the global economy. When more stakeholders show acceptance to stablecoins, particularly trusted ones like BUSD, more avenues for growth opportunities open up.

Ultimately, it takes global cooperation to realize crypto mass adoption, and therefore a better global financial framework. At Binance, we believe in facilitating this in a healthy way, through proactively collaborating with local regulators and leading the industry to a common destination: to benefit and protect users. In a recent virtual press conference, Binance CEO Changpeng “CZ” Zhao said, “Our view is that it’s great for the regulators to be coming in… to get to 10%, 20%, 80%, 99% [crypto] adoption.”

Therefore, it is important for us to maintain BUSD’s status as one of the world’s safest and most compliant stablecoins, for the sake of long-term progress in the industry.


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Source: https://news.bitcoin.com/binance-usd-busd-a-case-study-for-stablecoin-compliance-and-security/

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Blockchain

XRP Lawsuit: XRP Holders approach the court regarding the expert discovery extension dispute

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The latest development in the XRP lawsuit saw Attorney Deaton write to Judge Torres on behalf of Movants (XRP Holders) to consider the community’s “meaningful perspective” to aid the Court in “reach[ing] a proper decision” in Expert discovery deadline extension dispute. The letter noted that while the court formerly denied Movants’ Motion to Intervene in lieu of SEC’s argument that it will “hopelessly delay” the final verdict, the plaintiff now itself is appealing for a two-months delay with the extension.

XRP Holders appeal access to their funds

Deaton’s letter also refers to Ripple’s opposition to the commission’s expert discovery deadline extension request. According to the letter, Ripple’s argument regarding the “freezing” of XRP markets within the United States impacts Ripple, however, it also directly impacts the XRP holders. Deaton cited Ripple’s argument that “nearly every digital asset exchange in the United States” has de-listed or suspended trading of XRP, leaving XRP holders helpless.

Furthermore, a large sum of XRP Holders holds XRP in retirement brokerage accounts, which have also been “frozen” because of the SEC’s claims, alleging XRP to be an unregistered security. XRP holders are unable to touch their funds in any manner, including the inability to withdraw, due to the ongoing lawsuit.

“The lack of liquidity within the United States, coupled with the mass de-listings prevents XRP Holders from trading, selling, transferring, or converting their XRP. It is because of this de facto in place seizure of their property that XRP Holders took the extraordinary step to seek intervention as defendants… Any delay in the underlying action marks yet another day XRP Holders do not have access to their funds.”

Ripple opposition letter mentions frozen XRP markets

Following the SEC’s letter seeking a two-month extension of the Court-ordered expert discovery deadline, Ripple filed an opposition letter on October 18, requesting the court to deny SEC’s extension appeal to prevent further delay in the final verdict. Ripple asserted that extending expert discovery to January 2022 will “unduly prejudice” Ripple and continue to “freeze” XRP markets in the United States.

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Source: https://coingape.com/xrp-lawsuit-xrp-holders-approach-the-court-regarding-the-expert-discovery-extension-dispute/

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Blockchain

MDT announces data oracle for bridging capital market and DeFi

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The oracle will allow developers in the decentralised finance sector to securely integrate off-chain trading data

Decentralized data exchange network Measurable Data Token (MDT) has unveiled a financial data oracle set to bridge traditional finance and decentralised finance (DeFi).

The blockchain-based service is dubbed Measurable Finance (MeFi) and will offer the secure connection developers need when accessing external data for use on-chain, the platform said in a press release.

With the MeFi in place, the blockchain community can safely navigate between smart contracts and traditional finance markets, with functionality enabled for Ethereum and via testnets.

The MeFi interface will allow developers to source reliable, real-time trading data from across the markets, including from global exchanges such as the New York Stock Exchange (NYSE), the Hong Kong Stock Exchange (HKEX) and Nasdaq.

Why are oracles important?

Oracles offer a decentralised network through which blockchain users can access real-world data and connect it to smart contracts on the blockchain. Growth within the crypto sector continues to see more and more data come on-chain.

To ensure security and authenticity, oracles such as MeFi and those accessed via Chainlink (LINK), among other networks, are proving very essential to developers.

For MDT, the main target is to bring decentralised data-sharing services to the marketplace. Once the ecosystem is in place, the team hopes its usage in DeFi will help projects achieve mainstream adoption.

MDT also wants to explore the possibility of giving decentralised application (dApps) developers access to key data such as financial earnings reports, derivatives and exchange-traded funds (ETFs).

Data is like the superpower in the capital markets. If DeFi is to go mainstream, DeFi innovations and Dapps have to connect with the external context,” MDT co-founder Heatherm Huang said in a statement.

According to him, the platform’s MeFi service is like “Bloomberg on blockchain“, with its top-notch security protocols making it easy for users to toggle between on-chain smart contracts and off-chain capital markets.

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Source: https://coinjournal.net/news/mdt-announces-data-oracle-for-bridging-capital-market-and-defi/

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