Crypto News Headlines (11-Aug-2022)

SALT LAKE CITY –– It’s second nature for corn farmers to hedge their crop yield with futures contracts. A decentralized finance (DeFi) trading protocol wants crypto validators on the Solana blockchain to follow that risk-averse playbook for their token rewards.

Decentralized finance derivatives trading app Cypher is preparing to offer a specialty hedging service to Solana’s validators, the server-runners who lend their compute power to keep the network chugging. In exchange for that work they get SOL tokens – a yield whose market is a whole lot more volatile than corn.

Hedging against token volatility is nothing new to crypto’s compute class. Big bitcoin miners keep their cash flow predictable using derivatives that shield them from the changing price of BTC. Even so, the practice hasn’t yet caught on in Solanaland, two industry participants told CoinDesk.

Bank of England’s economist Owen Lock and policy analyst Teresa Cascino published a blog post titled “Cryptoassets, the metaverse and systemic risk” Tuesday.

“Cryptoassets could have important roles within the metaverse,” they began, cautioning:

If an open and decentralized metaverse grows, existing risks from cryptoassets may scale to have systemic financial stability consequences.

“Widespread adoption of crypto in the metaverse, or any other setting would require compliance with robust consumer protection and financial stability regulatory frameworks,” they stressed.

Lock and Cascino explained that “The open metaverse will require a means with which to own and transact digital objects which are interoperable between virtual worlds,” elaborating: “We think cryptoassets are well placed to play an important role here.”

They detailed:

If a sizable open-metaverse materialized, households may hold a greater share of their wealth in cryptoassets to make metaverse-based payments or for investment purposes.

The email marketing platform Mailchimp has been suspending the accounts of crypto-related content creators and media outlets this week.

The list of affected customers includes self-custody crypto wallet Edge, crypto intelligence firm Messari, and Decrypt, which had been using Mailchimp for its newsletter for more than four years.

“Thank you for deplatforming some of crypto’s most reputable brands in the past 48 hours,” Messari founder Ryan Selkis tweeted at Mailchimp on Wednesday. “You’re proving our point. Mailchimp—and all speech censors—must be destroyed.”

Messari’s marketing lead Jared Ronis added, “Not only was there zero warning, we can’t even access our subscriber lists. If @Mailchimp’s management of crypto clients is this haphazard, I shiver to think of what enforcement looks like for actual nefarious actors.” (This was also Decrypt’s experience: no warning and no explanation of the violation.)

While we are deep in crypto winter, it seems there is a defrosting event on the horizon.

CoinGecko published a study based on activity on Google Trends. The search results showed a surge in user curiosity from Nigeria. Out of 15 countries studied, Nigeria came in at number one for Googling for crypto information.

Young Nigerians have been ditching their local currency for crypto for quite some time. And there seems to be no signs of this stopping.

Nigeria – popular searches

The Nigerian population searched the most for the terms ‘cryptocurrency,’ ‘invest in crypto’, and ‘buy crypto.’ This is even though the search intensity for ‘investment in cryptocurrency’ has decreased globally, especially after the April crash.

Nigerians have a growing interest in cryptocurrencies due to the low level of financial services in the country. Best described as “inadequate,” the failure of financial services in Nigeria is the same reason that many people across African countries are supporting cryptocurrencies.

The United States Securities and Exchange Commission, or SEC, and the Commodity Futures Trading Commission, or CFTC, has proposed requiring large advisers to certain hedge funds to report any exposure to digital assets.

In a Wednesday notice, the SEC and CFTC proposed amending their confidential reporting form for certain investment advisers to private funds of at least $500 million. The Form PR would require qualifying hedge funds to not include exposure to cryptocurrencies when reporting “cash and cash equivalents,” but rather add them under a different category “to report digital asset strategies accurately.”

The two U.S. financial regulators cited the growth in the hedge fund industry as the reason for the proposed change, due in part to digital asset investments becoming more common since Form PR was introduced in 2008. According to the SEC and CFTC, having investment advisers provide more detailed information on strategies and exposure to certain assets would allow the Financial Stability Oversight Council to better assess potential risks to the U.S. economy.

Some 88% of the exploiters behind Nomad’s bridge attack were likely those who merely copied the key attacker’s code and executed their own attack, new research from crypto exchange Coinbase estimated this week.

Nomad, a cross-chain bridge that allowed users to send and receive tokens between different blockchains, was exploited in early August for over $190 million, or about the entirety of its token reserves.

The Coinbase research shows some 88% of all addresses that conducted the exploit were identified as “copycats” as they together stole about $88M in tokens from the bridge.

“The majority of copycats used a variation of the original exploit by simply modifying targeted tokens, amounts, and recipient addresses,” Coinbase researchers said.

“While the majority of valuable tokens were claimed by just two of the original exploiters’ addresses, hundreds of others were able to claim part of the bridge’s holdings,” the researchers added.

Nomad did not return requests for comment at press time.

Vespene Energy announced that the company has raised $4.3 million from a financing round led by Polychain Capital. According to the company’s website, the startup converts landfill methane into bitcoin value with no grid connections or pipeline buildout. Vespene essentially installs onsite data centers powered by micro-turbines, getting energy from municipal landfills’ methane.

Landfill Gas Mitigation Firm Vespene Energy Secures $4.3M to Bolster Gas-to-Bitcoin Solutions

It gives landfill owners the ability to monetize their landfill methane, “reducing routine flaring and maintenance costs,” Vespene’s product summary says. Polychain Capital founder and CEO Olaf Carlson-Wee said on Tuesday that he believes the continued adoption of bitcoin will benefit from solutions like Vespene Energy’s product.

“We are excited to partner with Vespene as they build a creative solution to use mining to eliminate a potent greenhouse gas source, while making its energy mix greener,” the Polychain Capital founder said in a statement. Vespene Energy’s fundraising round comes at a time when there’s been a lot of negative attention focused on Bitcoin’s proof-of-work consensus mechanism and the energy the network uses.

Ethereum is entering the final stages of preparations for the much-anticipated Merge event after Goerli, the network’s third and final testnet, successfully switched over to a proof-of-stake (PoS) consensus algorithm on Wednesday evening. ETH was up 14% in 24 hours at the time of writing, buoyed by anticipation of the Goerli merge.

Earlier this summer, the Ropsten testnet successfully transitioned to PoS in June, and the Sepolia testnet making a similar switch at the beginning of July.

The Goerli testnet merge was announced at the end of July and happened in two phases, beginning with the pre-required Bellatrix upgrade on August 4. The second step, called Paris, was triggered today after the Terminal Total Difficulty (TTD) on the Goerli chain reached 10,790,000.

This second phase of the upgrade saw the execution layer client transition to proof-of-stake, with the next block after the switch produced by a validator operating on Beacon Chain—a PoS network that runs alongside Ethereum’s mainnet.

Ether (ETH) rose to a two-month high early Thursday, outperforming bitcoin after Ethereum ran the final dress rehearsal of a supposedly-bullish upgrade.

The native token of the Ethereum blockchain rose to $1,919, the highest since June 1, extending Monday’s rise of nearly 9%, CoinDesk data shows. The ether-bitcoin exchange rate or the ETH/BTC ratio rose to 0.078, a level last seen on Jan. 7, extending the recent bullish breakout.

The move happened after Goerli – one of the largest and most active Ethereum test networks – switched to the proof-of-stake consensus from the proof-of-work consensus at 01:45 UTC.

Goerli’s successful transition follows similar moves by two testnets – Ropsten and Sepolia – in the months prior. The transition has brought the Ethereum mainnet one step closer to the supposedly-bullish upgrade dubbed “merge”, which Ethereum developers estimate will happen on Sept. 19.

Mark Cuban, the billionaire entrepreneur who has been quite active in the crypto ecosystem for the past year, is facing a class-action lawsuit over his promotions of the bankrupt crypto brokerage firm Voyager Digital.

The Moskowitz Law Firm filed a civil suit in the United States District Court in Southern Florida against Cuban for promoting Voyager’s unregulated crypto products. The lawsuit demanded a jury hearing for the case.

The lawsuit alleged Cuban also misrepresented the firm on numerous occasions, making dubious claims of it being cheaper than competitors and offering “commission-free” trading services. Cuban, along with Voyager Digital CEO Stephen Ehrlich, leveraged their years of experience to lure inexperienced customers into investing their life savings in what they called a Ponzi Scheme, the lawsuit alleges