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yETH and Curve Go To War

yETH dai draining by arbitrage due to Curve Y pool flaw, Sep 2020The hottest new dapp that could have fueled the price of eth seems to have courted a bit of a problem, the Curve (CRV) guys don’t seem to like them…

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The hottest new dapp that could have fueled the price of eth seems to have courted a bit of a problem, the Curve (CRV) guys don’t seem to like them too much anymore because the yethers are selling their curves.

This wouldn’t have mattered if yETH didn’t find an oversight in the Y Curve pool that underprices dai.

“Yearn is repaying CDP early using Curve to mitigate as there is not enough DAI to repay the debt quickly. $44M DAI in Curve this morning, $20M now,” Julien Bouteloup, a long time eth dev, says.

That was after he said the yETH pause was an “emergency shut down & you’re all stuck in yETH vault #13972 while $ETH is crashing!”

Something that Andre Cronje called “pointless sensationalism” and “simply false.” All suggesting the happy couple is having a bit of a row.

You see the Y Curve pool is selling dai for cheap. So when a lot of eth was sent to yETH, about $100 million, and that eth through collateralization got a lot of dai that was sent to the Y Curve pool, arbitrage boters quickly munched that new dai because it was going for cheap.

That’s because of something called A which from the sound of it seems to be the intensity of the shape of the curve.

Meaning at A 2,000, the contract sends the signal that you really should convert this dai to some other stable coin because it has hit the target of $1, when the dai free market price is say $1.01. Small difference, but not with big amounts. Cronje says:

“The high A of y pool, has essentially allowed arbitragers to keep getting DAI for 1, when in fact they should have been paying 1.01 ~ 1.02.

So by bringing A lower, it makes DAI more expensive to buy. But, since y pool is incredibly low on DAI, it also makes DAI nice to sell to it.

This will keep the pool more evenly spread between assets, which I generally think is positive for all LPs, will remove a source of cheap DAI from the market (good for DAI). And create a healthier balance of assets.”

The proposed solution is to halve the A to 1,000, but this is at the Curve protocol layer, and there the Curve holders decide, and one of them says:

“Although I am generally in favor of collaboration with Andre Cronje, I will be voting against this proposal.

Everyone is free to sell their earned CRV but I have no interest in helping make that process easier or in this case safer to do at a large scale.

Growth of the yeth vault only pushes CRV price down and brings absolutely no LPs invested in the curve protocol success.

I want distributed CRV to end up in the hands of investors that could decide to hold it if incentivized properly, the vault does not offer that option at all.”

Ouch, and what must hurt even more is that you can’t even blame him. However, this flaw in the Y Curve pool applies regardless of whether there is or isn’t a yETH because it existed before yETH came around, it’s just now that it became evident to experts who can do something about it.

So you have here a pretty awful clash between what is objectively reasonable and right, and between what is ‘objectively’ better for one’s pocket.

The former one is easy. What is right is right. There’s a flaw, though not a fully critical one, but there’s a mistake that should be addressed.

The latter one is hard to objectively analyze because there are tradeoffs in as far as obviously CRV holders wouldn’t want automated selling of their token, but presumably they wouldn’t want the Y Pool to go down or really, presumably they wouldn’t want to be thieves either because they’re facilitating the taking of money for cheap when there’s nothing one can say about it if they were unaware, but now that they know, well it’s basically a refusal to fix what is theft really.

It isn’t theft because you willingly put it in there and in this case the yeth guys came up with y pool as well, so where the past is concerned there’s no argument there.

But even now it isn’t theft because you’re willingly and knowingly putting it in there. And yet, it kind of is theft at this point to prevent its fixing and such prevention creates further risks in as far as devs may well consider Curve to be a bit of a moat.

You’re kind of at their mercy if you build on top of it and in this case, Cronje says:

“Y pool has also become something closer to a stable savings account and meta stable coin for yearn and a lot of other communities. So having a more equally proportioned pool gives a lot more safety and security.

We have been building and integrating a lot of solutions ontop of y specifically because till now, it served that purpose so well.

I have no objections to all veCRV holders to vote for 0 CRV rewards for y pool, but I would like to keep using it as the defacto meta stable pool + savings account.”

If we read this correctly he is saying the Yearn team has built an entire ecosystem around this pool, and that entire ecosystem is basically at the mercy of another ecosystem that may have its own interests which in this case kind of overlap, but also conflict.

Making this a complicated situation and a tough decision for CRV holders, especially the CRV dev team.

Bouteloup happens to be part of that team and from his public statements, he isn’t happy about yETH at all and seems to be happy to see it potentially come down crashing, naturally maybe because he is part of the CRV team.

However, he hasn’t made any statements on this A matter as far as we can see, and the CRV team in general has not made any statement so far.

As such, what they’ll decide is to be seen because there can easily be a difference about not liking the fact your token is insta sold by some mining dapp, and not fixing your own dapp.

There can also be other wider implications if there’s a negative decision, with it unclear whether Yearn can just fork this pool and fix the A, something that you’d think would be a checkmate, except it wouldn’t mine CRV but maybe some Y token.

Or they could just offer the option to get CRV as CRV instead of insta selling them with devs now probably realizing you can interlope but you better be careful about it if you’re doing something the other dapp might not like and there is something they can do about it, like in this case not fix your/their pool.

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Blockchain

XRP Lawsuit: On Ex-SEC Chair Jay Clayton’s Sudden U-Turn After Suing Ripple

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Ex-SEC Chairman Jay Clayton Says Bitcoin's Non-Security Status Still Awaits Regulation

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Ripple’s Boss, Brad Garlinghouse, on Monday, left a few remarks via his Twitter handle on a Wall Street Journal’s post co-written by former US-SEC, chairperson, Jay Clayton.

The post which was co-written by Brent MacIntosh, the former Undersecretary of the US Treasuries for International Affairs, sought to preach the all-to-familiar stance of most crypto companies: ‘Crypto needs regulation, but it doesn’t need new rules.’

Garlinghouse spelled out surprise over Clayton’s turncoat comments that the US government has no concrete and adequate regulatory framework for the crypto industry. He further added:

Cryptos, like nearly any new innovative technology, can be used for good or bad purposes. The problem is that US companies seeking to be compliant and use this tech for good are left in limbo (or for Ripple, worse!) because of a lack of a clear, predictable framework.”

Jay Clayton, in his last days at the SEC, pulled a shocking stunt on the crypto community, suing Ripple for what it believes is the undocumented sales of large-scale XRP digital assets to unidentified customers.

The bane of the case which was first announced in December last year is in determining if XRP – the digital currency of Ripple – is an investment contract or just another type of asset existing in digital forms. Assets bought and sold do not lie under the jurisdiction of the SEC, but investment contracts (also known as securities) are well within their powers to investigate, using the Howley test as a yardstick.

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When compared to Bitcoin and ETH…

ripple xrp premined
Via CoinMarketCap/XRP

XRP, unlike fully decentralized Bitcoin, takes the shape of a centralized digital currency. This is because Bitcoin is still being mined by different people across the world, but Ripple pre-mined billions of XRP coins.

How The Case is turning out

The latest in the seven-month-old lawsuit is a winning streak for Ripple. Judge Sarah Netburn denied the SEC’s plea to examine all records of Ripple’s conversation with lawyers and expert advisers to determine if it knew what class of asset XRP is, and what violations of the SEC’s laws it may have knowingly violated. This signified a sigh of relief for the company which has called the lawsuit a hindrance to its growth and plans to go public.

Clayton further expressed that the foundational frameworks of the US laws suffice to build upon for crypto regulations, but the government has to be careful not to commit under-regulation or over-regulation.

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://zycrypto.com/xrp-lawsuit-on-ex-sec-chair-jay-claytons-sudden-u-turn-after-suing-ripple/

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Ethereum Co-Founder Anthony Di Iorio Bets Big on the Future of Cardano and Polkadot

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Anthony Di Iorio, a Canadian entrepreneur and the co-founder of leading smart contract platform Ethereum, said that he believes in the potential of Cardano (ADA) and Polkadot (DOT).

In an interview with crypto proponent Anthony Pompliano, Di Iorio, who is also the CEO and founder of Canadian blockchain startup Decentral and crypto wallet Jaxx, revealed that he has a diversified investment portfolio featuring several top projects, including Cardano and Polkadot.

A Big Fan of Cardano and Polkadot

He said:

“Now I’ve kind of fallen back to just simplicity. I’m in a number of different projects, but the majority of my stuff is in the top projects. I’m a big fan of Polkadot, I’m a big fan of Cardano.”

Di Iorio went on to narrate why he was so sure of the future of these two projects. He had joined the Ethereum development team earlier in 2012 when he met Vitalik Buterin at a Bitcoin conference.

He has formed strong relationships with other co-founders of Ethereum, including Vitalik Buterin, Cardano’s founder Charles Hoskinson, and Polkadot’s current CEO Gavin Wood.


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Di Iorio admitted that while he worked with these men, he knew that they were goal-oriented and would help push these projects further.

He continued:

“Big fan of Charles, let’s say that. You know, taking some different approaches in the way that they’re doing things, much more on the academic side of what he’s done and bringing stuff forward. Real big fan of Gavin Wood… Knowing those guys from the days back at Ethereum – and knowing their drive and knowing their competitiveness and their smarts – I was able to see those projects for the last few years and know that they were gonna get to where they’ve gotten up to.”

Not Getting Lost in DeFi

Despite all the recent hype about DeFi, Di lorio pointed out that he is keeping his investments simple and investing in larger projects.

“Most of my stuff is in the top few things, Ether, Bitcoin, Cardano, Polkadot. I like Cosmos as well. And there’s a few others, but I’m not getting lost in all the DeFi stuff. I just think there’s not enough time, not enough energy. It’s a full-time gig to be running a lot of that stuff and keeping on top of stuff, so I’ve simplified my life quite a bit over the past few years.”

Featured image courtesy of Business Insider

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Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://cryptopotato.com/ethereum-co-founder-anthony-di-iorio-bets-big-on-the-future-of-cardano-and-polkadot/

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What you should know if your bank is exposed to Bitcoin

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On one hand, El Salvador recently became the first nation to officially declare Bitcoin as its legal tender, and on the other, several nations have recently opined that their indigenous banks face a ‘threat’ from the world’s largest crypto-asset. Nevertheless, the rise in the adoption of cryptocurrencies has been accompanied by regulators taking the fast-growing market seriously. 

Banks will now face “the toughest” capital requirements for their holdings in Bitcoin and other crypto-assets under global regulators’ plans to brush off the insecurity offered by the “volatile” crypto-market. 

Using money laundering, reputational challenges, and massive price swings as the base of their proposal, the Basel Committee on Banking and Supervision is in the news after it explicitly stated that the banking industry faced “increased risks” and “financial stability concerns” from crypto-assets.

Accordingly, they have now placed Bitcoin in the “highest risk” category. The aforementioned committee comprises a host of nations and global institutions as its members.

The Basel Committee isn’t alone, however, with a Bank of International Settlements exec recently commenting that El Salvador’s Bitcoin policy is an “interesting experiment.”

What’s more, the panel proposed a 1250% risk weight be applied to a bank’s exposure to Bitcoin and certain other cryptocurrencies. Bloomberg’s estimates highlighted, 

“In practice that means a bank may need to hold a dollar in capital for each dollar worth of Bitcoin, based on an 8% minimum capital requirement.”

However, stablecoins and other tokens tied to real-world assets are set for lower capital requirements. The report further highlighted, 

“The capital will be sufficient to absorb a full write-off of the crypto asset exposures without exposing depositors and other senior creditors of the banks to a loss.”

The proposal did not specify any specific timeline, and hence, the implementation of these rules can take a couple of years. The proposal is, however, open to public comment before it comes into effect. It should also be noted that the committee said that the initial policies were “likely to change” several times as the market “evolves.”

Even though banks like HSBC have been cautious about stepping into crypto-trading, a few big names, like Standard Chartered Plc have announced their entry into the space.

As for Bitcoin, it fell by over 3.7% in the last 24 hours to trade at $35,418 at press time.

Source: Coinstats


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Source: https://ambcrypto.com/what-you-should-know-if-your-bank-is-exposed-to-bitcoin/

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