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Stablecoin Staking is Finally Possible: Neutrino USD (USDN) Offers a Safer Alternative to Tether

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As the market capitalization of USDT and USDC keeps rising, recent asset freezes underline their inherent risks. Will these incidents cause more investors to turn to decentralized stablecoins, such as DAI and the stakable USDN?


Since the start of June, Tether’s market cap has grown by 13%, and that of USDC Coin has finally crossed the $1bn mark. The Covid-19 pandemic has given a tremendous boost to the stablecoin markets as investors search for ways to protect their capital away from the stock market.

Apart from a hedge against volatility, dollar-pegged cryptocurrencies offer something that no bank or money market account сan provide right now: high yields. The APR reaches 10% when lending USDC,  8-15% when staking USDN, and 5.5% on USDT lending accounts.

USDT and USDC have a censorship problem

While centralized assets like Tether and USD Coin yield more reliable gains than stocks or commodities, they are subject to very specific risks.

One of these is censorship: the Terms of Service of both USDT and UDSC state that the company has the right to block an address and freeze all the coins in it if it violates the policies. Moreover, as stated in the USDC customer agreement, a user who sends or receives crypto to or from such a blacklisted address can find their own account frozen, too.

This was borne out very clearly on July 8, when Circle, the consortium behind USDC, confirmed that it had frozen an account containing $100,000 in USDC. The company said that it had called the blacklist function on the address upon a request from the law enforcement.

Just a few days later Dune Analytics revealed that Tether has so far banned 40 accounts. The addresses blacklisted in 2020 alone contain over $5 million in USDT. Dune Analytics even maintains a dashboard listing all the currently banned USDT addresses (40 at the time of writing). Once again, the blacklisting had apparently followed requests from the authorities.

Decentralized Stablecoins: A Privacy-Focused Alternative

It’s quite possible that the law enforcement agencies had grounds to ask Circle and Tether to freeze the assets. For example, the blacklisted addresses could have been hacked. In fact, Tether and Circle repeatedly stress that the purpose of blocking accounts is to protect their owners.

Nevertheless, these events come as yet another warning sign that USDT and USDC, while operating on-chain, are far from decentralized. A central authority exercises full control over both the addresses and the collateral.

The most obvious alternatives are decentralized stablecoins, such as DAI and USDN. These have also experienced impressive gains lately: the market capitalization of Neutrino USD has grown by 34% since June 1 and that of DAI by 75%.

The decentralized nature of USDN and DAI makes it impossible for any central authority to freeze and address. Moreover, since they are collateralized with other digital assets, users are able to verify that the collateral is indeed locked up in the smart contract. This is a solution to another major problem associated with centralized stablecoins: non-transparency of the collateral.

In terms of gains, decentralized stablecoins are on par with the more famous centralized assets. As we noted before, it’s possible to earn up to 15% staking Neutrino USD (USDN). In fact, it’s the first stablecoin to support staking on the algorithmic level.

Things are more complex with DAI, whose interest rates constantly fluctuate. For instance, for a short time in July 2020, it was possible to lend DAI at over 20%, though the average maximum rate is between 6% and 8%, depending on the lending platform.

Summing up

Centralized stablecoins will likely retain their dominant position in terms of market capitalization in the coming months. At the same time, their non-transparent treatment of customer addresses and collateral funds is becoming a grave concern. This will scare off many investors looking for more private, censorship-resistant opportunities. These users will increasingly turn to algorithmic stablecoins like USDN and DAI, though we’ll probably have to wait until 2021 for decentralized stablecoins to emerge as a major trend in crypto. 

Source: https://bitcoinist.com/stablecoin-staking-is-finally-possible/?utm_source=rss&utm_medium=rss&utm_campaign=stablecoin-staking-is-finally-possible

Blockchain

A senior BOJ official says the digital yen needs public support for it to become a reality.

According to the Bloomberg report, a senior Bank of Japan’s official said that there is no final decision has been made yet even after the announcement of testing to start next year. The official revealed that a lot depends on the public support for it to go ahead with its central bank-backed digital currency. Kazushige […]

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A senior BOJ official says the digital yen needs public support for it to become a reality. – Coinnounce




























The central bank of Japan’s move to launch a digital currency would be conditional on public support, according to a senior BOJ official.


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Source: https://coinnounce.com/bank-of-japan-official-says-cbdc-needs-public-support/

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Japanese soccer star Keisuke Honda launches his own crypto

Crypto and blockchain matter for the global soccer community.

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A Japanese professional soccer player is launching his own cryptocurrency to boost fan engagement.

Keisuke Honda, former Japan midfielder and currently a captain of the Brazilian professional league team Botafogo, has launched his own token to build new connections with his fans, Cointelegraph Japan reported on Oct. 22.

The so-called “KSK Honda Coin” was launched on Thursday via Rally.io, a blockchain platform for creating video streaming and gaming applications. The new coin is intended to enable fans to interact with Honda.

Holders of KSK Honda token will be able to get exclusive content from Honda as well as interact with the player via private channels on Discord. “We decided to create a social token to build new connections with our most loyal fans,” Honda said.

The world-known soccer player said that the new token will allow him to connect with fans in a more open manner, providing a 100% transparency in knowing who holds coins in the fan community.

The global soccer community is moving deeper into the crypto and blockchain industry in search of new ways of connecting stars with their fans.

On Oct. 15, a top soccer club in Russia’s Premier League — Zenit St. Petersburg — signed on to the blockchain-based gaming platform Sorare to issue collectible and tradeable digital cards. In September 2020, Italian professional sports club SS Lazio signed a multiyear deal with crypto trading platform StormGain, enabling new fan engagement options through crypto.

Source: https://cointelegraph.com/news/japanese-soccer-star-keisuke-honda-launches-his-own-crypto

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Grayscale invests $300m in a day to grow its crypto portfolio

Grayscale Investments continues to grow its cryptocurrency portfolio by adding $300 million in assets…

The post Grayscale invests $300m in a day to grow its crypto portfolio appeared first on Coin Journal.

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Grayscale Investments continues to grow its cryptocurrency portfolio by adding $300 million in assets under management (AUM) in a day

Grayscale Investments revealed that it had added $300 million worth of cryptocurrencies to its digital assets portfolio over the past 24 hours and over $1 billion in the last week. This information was relayed by Grayscale CEO Barry Silbert via a tweet yesterday.

The crypto fund manager noted that it had $6.3 billion in AUM as of October 15. However, it has added $1 billion in cryptocurrencies over the past week, and the company now controls $7.3 billion worth of digital assets.

Silbert stated that the company “Added a cool $300 million in assets under management in one day. The additional sum brings the total assets held under management to $7.3 billion”.

The funds are held in the company’s trust for Bitcoin (BTC) and Ethereum (ETH), in addition to Grayscale’s digital large-cap fund. This latest development comes less than 48 hours after PayPal announced its entry into the cryptocurrency market, with Bitcoin surpassing the $13,000 mark afterwards.

Each Grayscale report is delayed by 24 hours, which means that this data refers to the previous day’s figure.

The cryptocurrency funds manager reported that its Litecoin (LTC) Trust recorded the highest growth since the last report. Grayscale reported that its LTC Trust increased by 7.5%, while their Zcash (ZEC) Trust increased by more than 6% over the past 24 hours. Grayscale also has extensive holdings in other cryptocurrencies such as Ripple (XRP), Ethereum Classic (ETC), Bitcoin Cash (BCH), Horizen (ZEN) and Stellar Lumens (XLM).

Grayscale might be increasing its cryptocurrency holdings after raising massive funds in the third quarter of the year. Grayscale’s financial report for Q3 2020 revealed that it had bought over $1 billion in investment across all its cryptocurrency trusts. This year, Grayscale has raised $2.4 billion, which is more than twice the total amount they obtained for the years 2013 – 2019.

The investment firm revealed that 81% of investment in the third quarter came from institutional investors, while another 57% came from people investing in multiple products.

With the crypto fund manager now holding over $6 billion in AUM, it means that Grayscale controls around 2.5% of the total Bitcoin supply, currently above 18,000 BTC. The Bitcoin supply is capped at 21 million, which means that roughly 2.5 million bitcoins are left to be mined.

Grayscale isn’t the only company that is increasing its stakes in cryptocurrencies at the moment. MicroStrategy recently bought $425 million worth of Bitcoin, and Jack Dorsey’s Square Inc. invested $50 million in Bitcoin.

Source: https://coinjournal.net/news/grayscale-invests-300m-in-a-day-to-grow-its-crypto-portfolio/

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