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Around the Block #6: Bitcoin’s dominance alongside Coinbase customer behavior, the coming DEX…

05/13/2020

Around the Block #6: Bitcoin’s dominance alongside Coinbase customer behavior, the coming DEX revolution, and other recent crypto news

Coinbase

In a first for DeFi,

Just this year:

  • Former Coinbase Lawyer Reuben Bramanathan tokenized his time and sold his tokens to the public via Uniswap
  • NBA star Spencer Dinwiddie tokenized his current NBA contract
  • Saint Fame tokenized commercial goods and developed a community
  • Alex Masmej and Kerman Kohli tokenized their future earning potential (!)

DeFi continues to push the boundaries of capital formation. These are the first glimmers of what could be new and pervasive funding mechanisms. Imagine high school athletes tokenizing future contracts as insurance against injuries, or up and coming artists tokenizing their future record sales.

But the details matter. In this case, if tokenization events constitute an investment contract, they could be deemed securities by the SEC. The tension between regulation and DeFi products is palpable, and could hold back adoption until we get further clarity from regulators.

New DEX derivatives platforms make a splash

Futureswap is a DEX with a novel combination of Compound, Uniswap, and BitMEX. They currently only offer a ETH-DAI book, but provide 20x leveraged trading that starts at an oracle’s price (no order book), with a modified Uniswap-style price curve (limiting slippage), kept in check by a dynamic funding rate (ala BitMEX).

It’s a novel idea, ideal for speculators because no underlying assets are swapped. During a 4-day alpha launch they posted $17M in trade volume and gained $1.5M in their liquidity pool, a rate that would place them at #2 in DEX volume only behind Uniswap!

Separately, DyDX launched Perpetual Bitcoin Contracts similar to BitMEX and with 10x leverage. In contrast to Futureswap, DyDx operates a true order book and provides a public-liquidation mechanism on underwater trades. This also marks the first time a Bitcoin-based trading book has been offered at scale through a DEX.

Taken together, these are nascent but strong data points that suggest DEX Derivatives markets could have strong product market fit.

Links

Coinbase news

  • Coinbase makes investing easy with dollar cost averaging
  • Coinbase welcomes Brett Tejpaul as Head of Institutional Coverage
  • Support for Compound Governance added to Coinbase Custody
  • Introducing the Coinbase Price Oracle
  • Coinbase: Bitcoin’s Third Halving Occurred This Week

News from the crypto industry

  • Robinhood raises $280M series F at $8.3B valuation to scale platform and push for global expansion
  • BlockFi launches mobile app and hires former Credit Suisse and AmEx execs, targets crypto card and int’l expansion
  • Dharma enables social payments via Twitter handles
  • Bitfinex launches social trading platform
  • FTX to launch US-based spot exchange in May; launches crude oil futures
  • Bitnomial approved by CFTC to offer BTC futures and options contracts
  • $166B asset manager Renaissance eyes participating in CME’s Bitcoin Futures markets
  • Fidelity taps ErisX exchange for crypto trading liquidity
  • Baakt CEO Mike Blandina steps down after 4 months
  • NYDFS grants Bitlicense to ErisX
  • Bittrex to launch Exchange Token in June
  • BitMEX to restrict Japanese users amidst increasing regulation
  • Greyscale inflows hit all-time-high, over $500M new capital in Q1
  • Genesis doubles loan issuance to $2B in record Q1

News from emerging crypto businesses

  • Clone of Compound suffers $25M hack, later returns all funds
  • Libra hires former Bush and Obama Under Secretary as first CEO; and Checkout.com joins
  • Visa teams up with Fold for their Bitcoin rewards card
  • Synthetix launches Optimistic Rollup beta to test scalability
  • Telegram asks US investors to leave their project and take 72% refund
  • BitGO’s wBTC added as collateral type for MakerDAO
  • Compound adds USDT for lending / borrowing
  • A16z raises $515m for second crypto fund; later invests in NEAR’s $21m round
  • Binance launches smart-contract blockchain similar to Ethereum

Tweets

  • One of the smartest and most successful investors is now long bitcoin 📈
  • Putin knows a thing or two about the blockchain
  • Hegic makes a bold claim that bugs are really just “typos”

Something Fun

  • Be sure to check out this incredible tale of a recent DeFi hack, investigation, and a remarkable return of all stolen funds!

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Around the Block #6: Bitcoin’s dominance alongside Coinbase customer behavior, the coming DEX… was originally published in The Coinbase Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.