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Why DeFi plus asset tokenization will take crypto to new heights

Republished by Plato



In previous years, we have seen numerous attempts to bring real-world assets to the crypto market. However, none of them has proven to be massively adopted among retail crypto users and traditional financial players.

So, why hasn’t real-world asset tokenization become a massive trend?

You’ve probably heard how almost anything can be tokenized — securities, art, real estate, to name a few. And there were so many projects that promised to change the way we invest in assets, no matter the type. At the same time, no projects managed to get massive adoption on the market.

Traditional market professionals haven’t really found proof that tokenization improved current fundraising processes for them. Although, an overview of real-estate tokenization has been already discussed.

You may also struggle to find real retail investors who bought the rights to a famous art piece or a portion of Dracula’s castle. While most successful offerings were focused on private investors, basically nothing has changed in the process for the crypto market, even for the owners of tokenized assets.

Why didn’t these offerings manage to gain mass adoption? While the concept of tokenization promises a better and cheaper way to raise funds for issuers, there are almost no real benefits for the crypto market.

I’ve covered problems of tokenization in the form of security token offering before, but in short, it boils down to regulation (tokenized assets are regulated by the traditional rules) and a lack of a secondary market. Retail crypto investors can’t profit from these two issues, and there is basically no need for them to adapt to something new, especially now with the emergence of DeFi protocols.

What corporations are looking for while raising funds

Corporate institutions have to exist in a world with complex and outdated rules. Therefore, a clear legal model to attract or borrow funds is vital for them. With over $20 billion locked in decentralized finance at the moment, it might attract some interest from corporate institutions and make them consider entering the market — especially if we consider that the common annual percentage rate in DeFi protocols is just 2%–10% with no additional costs to attract funding.

Yes, there are no ready-to-go legal models built for corporates to attract or borrow funds from DeFi protocols on the market today. But it’s possible to build one with minimal effort, as the benefits of DeFi borrowing easily cover the efforts of building such a system. DeFi might be able to provide borrowing on perfect terms for corporate institutions, which is something that might make them consider entering the market. Meanwhile, corporate institutions will be willing to provide several types of stable assets to be used as collateral for their loans.

However, there is a real need for real-world assets to be used as collateral in DeFi protocols to prevent more market falls in the future, fixing the over-collateralization issue along the way.

Can current market players operate like this?

Right now, there are several attempts to bring real-world assets to the DeFi market. Most of them seem to accept a wide range of assets, mainly tokenized invoices.

The main issue related to using those assets in a protocol is an absence of publicly available sources for pricing. This relates to the lack of transparency and the need to rely on a centralized party (valuation firms, underwriters, etc.) in order to determine the price of the collateralized asset. There is also no mechanism to monitor the pricing in real-time (as it is done, for instance, when using crypto as collateral). Those assets are generally illiquid; they are not traded on any marketplace or digital OTC platforms; and there is no source for periodically updating information on their pricing — a crucial point to determine the moment in which the collateral will be liquidated.

There is no doubt that some of those assets could be insured, such as payment under invoices, meaning that the insurance company will pay in case of a default of the debtor. But again, the insurance process lacks transparency and lives completely off-chain, providing no real warranties for the investors or real-time knowledge whether or not the insured event has occurred.

Additionally, current solutions allow borrowing strictly in crypto, which won’t suit everyone. It’s not a bad thing, but it reduces the chance of attracting large institutions that need to receive financing in fiat, which is used for their day-to-day operations.

But the main question that arises is the possibility for big protocols to adapt and use real-world assets as collateral. And it will be extremely difficult, as they will have to change the borrowing process, build a system that will update the price of collateral, issue new assets, cooperate with regulated entities, and, generally, receive approval from the majority of current participants. Talks regarding the adoption of such a solution by Aave and Maker have been ongoing for over six months, with no clear date when it will actually go live.

What kind of infrastructure must be built to bring traditional institutions to the DeFi market?

A perfect solution that will allow the tokenization of traditional stable assets and that will be suitable for the DeFi market must meet several criteria.

  1. Real-world assets used by the protocol must have a transparent source of pricing available on demand by any user of the protocol. This requires not only selecting an asset capable of fulfilling this requirement but also building a price oracle that will transfer information regarding the collateral. Such an oracle should be connected to a transparent and trusted pricing source, such as Bloomberg Terminal, rather than receiving proprietary data from a centralized party.
  2. Real-world assets used by the protocol should be as less volatile as possible, generate fixed income to provide real cash flows to liquidity pools, and have a certain level of liquidity and market in the real world to be able to process the liquidation event in case it occurs.
  3. The protocol must allow users to borrow money in fiat. For such purposes, there is a need for yet another intermediary to be connected to the protocol, to cover the exchange needs of users who want to borrow money in fiat, and fulfill the role of a payment agent for them.
  4. Real-world assets used by the protocol should have a digital presence, for example, be held on a secure accounting system. To achieve that, there is a need for an intermediary that operates such systems connected to the protocol.
  5. In order to defend the decentralized nature of the protocol and maintain the trust at the highest achievable level, intermediaries connected to the protocol must be regulated, insured, selected and overseen by the community of the protocol under established requirements. In addition, the community will decide any other crucial matters for the protocol’s development and economic sustainability, including selecting assets that may be admitted as collateral.

What should we expect in the future?

I expect that we will see several initiatives on building new, real-world, asset-backed protocols in 2021, and hopefully, they will be the ultimate solution to finally connect traditional financial and crypto markets. Existing protocols are more likely to adopt them in their current ecosystems only after new protocols will prove to be operational.

Another area in which real-world asset-based protocols could make an important impact is stablecoins. There is a current trend among regulators mostly in the United States that targets all stablecoins that have centralized issuers — such as Tether (USDT) or USD Coin (USDC) — with discussions about the potential need to impose the requirement for any of such issuers to have a banking license. Decentralized stablecoins backed by real-world assets might solve this issue; however, it is a topic for a separate discussion.

But what about other tokenization attempts and STOs? Of course, there have been successful cases before. Large financial institutions are still slightly interested in launching such products, as they may potentially save them money. But most likely, these initiatives will be focused on private offerings due to the aforementioned flaws.

It’s naive to believe that many crypto investors will be willing to make long-term investments in unfamiliar markets. Especially with great investment opportunities in the DeFi space. Until new regimes for the offering of tokenized instruments are built (and there are no bright signs in this direction), I believe real-world assets tokenization in a form of an STO will still be limited to closed offerings with no attention from the global market.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Artem Tolkachev is the founder and CEO of Tokenomica. For over six years, Artem has been a key blockchain and tokenization opinion leader in the CIS region. Since 2011, he has been an intellectual property and information technology lawyer and entrepreneur. In 2016, Artem founded and headed Deloitte CIS Blockchain Lab. As part of that initiative, he led a range of innovative projects involving the implementation of enterprise blockchain solutions, tokenization of real-world assets, tax and legal structuring of security token offerings, development of cryptocurrency, and blockchain legislation.



Kraken Daily Market Report for May 14 2021

Republished by Plato




  • Total spot trading volume at $3.17 billion, 5.3% higher than the 30-day average of $3.01 billion.
  • Total futures notional at $638.8 million.
  • The top five traded coins were, respectively, Ethereum (+2.3%), Bitcoin (-1.4%), Tether (0%), Dogecoin (12%), and Polkadot (-0.6%).
  • Strong returns from Dogecoin (+12%) and Synthetix (8.5%).

May 14, 2021 
 $3.17B traded across all markets today

#####################. Trading Volume by Asset. ##########################################

Trading Volume by Asset

The figures below break down the trading volume of the largest, mid-size, and smallest assets. Cryptos are in purple, fiats are in blue. For each asset, the chart contains the daily trading volume in USD, and the percentage of the total trading volume. The percentages for fiats and cryptos are treated separately, so that they both add up to 100%.

Figure 1: Largest trading assets: trading volume (measured in USD) and its percentage of the total trading volume (May 14 2021)

Figure 2: Mid-size trading assets: (measured in USD) (May 14 2021)

Figure 3: Smallest trading assets: (measured in USD) (May 14 2021)

#####################. Spread %. ##########################################

Spread %

Spread percentage is the width of the bid/ask spread divided by the bid/ask midpoint. The values are generated by taking the median spread percentage over each minute, then the average of the medians over the day.

Figure 4: Average spread % by pair (May 14 2021)


#########. Returns and Volume ############################################

Returns and Volume

Figure 5: Returns of the four highest volume pairs (May 14 2021)

Figure 6: Volume of the major currencies and an average line that fits the data to a sinusoidal curve to show the daily volume highs and lows (May 14 2021)

###########. Daily Returns. #################################################

Daily Returns %

Figure 7: Returns over USD and XBT. Relative volume and return size is indicated by the size of the font. (May 14 2021)

###########. Disclaimer #################################################

The values generated in this report are from public market data distributed from Kraken WebSockets api. The total volumes and returns are calculated over the reporting day using UTC time.

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Ternoa Blockchain’s NFT-based data transmission project gets LVT Capital as a partner

Republished by Plato



Ternoa Blockchain has found a new partner as it introduces its NFT-based data transmission service to the market.

The company received an investment from Australia-based private equity firm LVT Capital to form a strategic partnership aimed at enhancing the sustainability, innovation, competitiveness, and dependability of Ternoa’s services that allow users to build time capsules for safely transmitting their memories and important data to their descendants even after death.

Building on LVT’s Expertise

With its focus on blockchain, crypto, and tech projects, LVT Capital has already proven its expertise in these areas with its numerous collaborations and investments. The company has already made investments in more than 40 top-caliber crypto, real estate, finance, education, and cybersecurity firms with 200 more under evaluation for potential collaborations.

LVT Capital has the market and technology expertise as well as the resources to enhance Ternoa’s unique service and promote it to boost the company’s competitiveness. For instance, LVT Capital has its own media & marketing services and an online publishing arm focused on blockchain, technology, and business, which makes the firm a perfect fit for Ternoa.

Ternoa Blockchain Offers Customizable Time Capsules

Ternoa Blockchain found a new way to use NFT and blockchain technologies to help people handle their data storage and transmission needs, which is one of the reasons for LVT Capital’s decision to invest in its business. With its Polkadot-powered, NFT-based customizable time capsules, people can securely transmit their memories such as photos, videos, and other important data to future generations or simply use the platform as a secure storage solution.

Ternoa’s platform is flexible enough and gives users several options on how they wish their data to be retrieved by their intended recipients. The available transmission protocols are Safe Protocol, Consent Protocol, Death Protocol, D-day Protocol, and Countdown Protocol.

  • Safe Protocol – Data owners can retrieve data at any time, which makes use of Ternoa as a secure and portable storage solution.
  • Consent Protocol – Recipients can access the time capsule as long as the original owner does not use his veto option.
  • Death Protocol – The time capsule will be delivered to the beneficiaries upon the death of the creator based on local death registries APIs.
  • Countdown Protocol – Introduces a countdown feature which can be set to1 month, 1 year, or 10 years. The time capsule will be delivered to the recipient if the countdown reaches the limit. The creator can reset the countdown at any time.
  • D-day Protocol – Time capsule can only be accessed on a specific date, which is set by the creator.

While the loss of data is always an issue for other data storage solutions, Ternoa eliminated this risk by making copies of the files inside the time capsule, which are stored in other dex storage blockchains. At the moment, Ternoa sends these copies to Aerweave, Sia, and Storj while keeping the original version in its network. To learn more about the project, click here.

IMPORTANT NOTE: This is a paid press release, which BitcoinerX has posted as part of a commercial agreement. BitcoinerX is not responsible for producing this content and does not endorse the products or services mentioned. It is the responsibility of the company posting the press release to ensure the material is credible and accurate. BitcoinerX is not responsible for any damage or loss caused to anyone who chooses to use the company, product or services mentioned in the press release. BitcoinerX does not recommend using the information in the press release to form the sole basis of investment decisions.

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Altcoins pop while Bitcoin looks for support near $50,000

Republished by Plato



Bitcoin (BTC) continues to look for direction but as this occurred, Ether and altcoins bounced higher from the May 13 sell-off. Dogecoin shocked investors with its 47% rally that kicked off after Coinbase announced that it would list (DOGE) in the coming months. Doge price also rallied after Elon Musk tweeted that he was “Working with Doge devs to improve system transaction efficiency. Potentially promising.”

While many altcoins have seen double-digit gains during the recovery the price of Bitcoin (BTC) has continued to languish near the $50,000 level as whale wallets containing at least 1,000 BTC have declined by 4.7% compared to the previous month, indicating possible profit taking or a rotation into different assets.

Data from Cointelegraph Markets and TradingView shows that while the Bitcoin recovery has been muted, demand for Ether (ETH) led to an 18% rally as the altcoin notched an intraday high at $4,173 on May 14.

ETH/USDT 4-hour chart. Source: TradingView

Gains in the top altcoin come amidst mixed fundamental developments, with data from Glassnode showing that wallets holding at least 32 ETH have been steadily declining in recent months suggesting that fewer people are interested in becoming “full validators” for the network’s upcoming proof-of-stake blockchain.

Altcoins rally higher

While the debate about whether or not the market is officially experiencing an altseason rages on, one of its trademark characteristics is a sideways trading Bitcoin that leads to traders refocusing their attention on the altcoin market and leading to a decline in Bitcoin dominance.

Percentage of total market capitalization dominance. Source: CoinMarketCap

One of the breakout stars of 2021 is Polygon (MATIC), which has seen its price rally 60% over the past 24-hours to reach a new record high at $1.75.

Another project whose price surged 45% from the lows on May 13 is iExec RLC (RLC), a decentralized cloud computing network that got a boost of adrenaline earlier in the week after Coinbase revealed that it would list the token.

Other notable performances include an 80% increase in the price of Ergo (ERG) and a 48% increase in the price of Sora (XOR) which lifted the token’s price back above $800.

Daily cryptocurrency market performance. Source: Coin360

The overall cryptocurrency market cap now stands at $2.307 trillion and Bitcoin’s dominance rate is 40.3%.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Every investment and trading move involves risk, you should conduct your own research when making a decision.

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