Welcome to the latest edition of our Market Roundup, where we cover the highlights of the past week in the rapidly evolving world of blockchain and decentralized technologies.
The past seven days’ movement has been largely sideways, although a few of the top tokens were exceptional. SOL climbed by 9.44% as part of an altcoin resurgence, while XRP fell by 4.43% on news that the US Securities and Exchange Commission (SEC) will appeal a previous ruling that the token is not a security.
(as of 9:30 AM Singapore Time, August 11, 2023)
But the crypto space has been buzzing with chatter about a forthcoming stablecoin instead. PayPal has revealed plans to launch PayPal USD, or PYUSD, which will be pegged to the US dollar and backed by cash equivalents and short-term treasuries. The stablecoin will be issued on the Ethereum network as an ERC-20 token and is expected to integrate with PayPal’s existing crypto offerings, allowing users to swap the tokens for cash or other assets on the platform.
Paxos Trust Company, which is behind Binance’s BUSD stablecoin, will issue PYUSD and publish monthly reserve reports and third-party attestations, ensuring transparency and compliance.
PayPal’s development of PYUSD is yet another signal that traditional financial services are moving into crypto. One important consideration is that it isn’t meant to attract DeFi users; PYUSD is fully centralized and controlled by PayPal. The company can freeze accounts and halt transfers.
But if the technology behind crypto can be turned into an enticing offering from a major fintech platform, then there’s a good chance that mainstream users will see crypto’s appeal, learn about it, and in turn invest in it.
Besides, now that PayPal has made its way into the US$125 billion stablecoin segment, it’s reasonable to expect other major financial service providers to do the same. The future’s looking bright indeed.
For more insights about market movements, be sure to check out the routine updates on BTSE’s blog.
Web3 News
- CoinShares’ latest fund report indicates that institutional investors have stopped shorting Bitcoin, marking the first time in 14 weeks that outflows into short Bitcoin products have ceased. However, despite the shift in strategy, these investors have been selling to take profits, with over US$111 million sold across various BTC-related funds in the past week. This represents the largest weekly outflow since US regulators increased scrutiny on the crypto sector. The industry is currently facing legal challenges and regulatory uncertainties, leading institutions to adopt a cautious approach. Meanwhile, select altcoins like Solana have experienced increased buying pressure from European and US institutions. The selling has been mainly attributed to Canadian and German funds, with significant outflows from these regions.
- The Ethereum community was left stunned when an unidentified individual, using the ENS name “nd4.eth,” burned 2,500 ether (worth US$4.5 million) to a designated burn address. The motive behind this substantial ether burn remains a mystery, triggering speculation and curiosity within the crypto space. Some observers jokingly applauded the act, suggesting it aligned with the “Ethereum’s Ultrasound Money” narrative, effectively reducing Ethereum’s supply. The burning address also received other tokens, including 34.9 GMX and 600 GNS, valued at approximately US$7,000. While the exact reason for this action remains unclear, the impact on Ethereum’s ecosystem has caught the attention of the crypto community.
- The MakerDAO community recently approved and implemented a temporary increase in the annual returns for depositing DAI stablecoin into the protocol, resulting in an impressive 8% yield on holdings. This move, known as the Enhanced Dai Savings Rate (EDSR) proposal, aims to increase demand for DAI by offering higher interest rate earnings. Since the activation of EDSR, the total amount of DAI deposited in the DSR contract has surged by 75.7%, reaching 556 million DAI. However, this increase is temporary, and the rate will go back down once more users make deposits. The MakerDAO’s revenue has experienced growth since Q4 2022, primarily due to increased exposure to real-world assets like US Treasuries. The protocol’s stability fees and DSR are variable rates set by the MakerDAO governance. The Spark Protocol enabling the DSR is only available to US users who are not using VPNs.
Stories You Might Have Missed
- After more than US$73 million was drained from Curve in late July, roughly US$53 million, or 73%, has been recovered. Curve is offering a US$1.85 million bounty to bring the individuals behind the exploit to justice, but said it would drop the matter if all funds were returned. While the value of the Curve DAO token, CRV, has yet to recover to pre-hack levels, which were above US$0.73, its price has stabilized at roughly US$0.61.
- In a groundbreaking report titled “Bitcoin’s Role in the ESG Imperative,” KPMG, a leading global accounting firm, highlights how Bitcoin can positively contribute to environmental, social, and governance aspects. The report dispels myths about Bitcoin’s environmental impact, demonstrating its comparatively low carbon footprint and proposing strategies for further emission reductions. It also refutes claims of Bitcoin being a tool for criminals by emphasizing its potential for financial inclusion and positive societal impact, such as supporting war-torn regions and providing access to electricity in underprivileged areas. Additionally, the report praises Bitcoin’s decentralized governance structure, providing confidence in its overall system. ESG analyst Daniel Batten calls the report an important milestone for the Bitcoin ecosystem and encourages more informed discussions about its utility.
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