Clearpool Raises $3M to Build Decentralized Capital Markets on Ethereum

Clearpool, a decentralized capital markets ecosystem, has received $3 million in funding from a number of prominent crypto investors to further its decentralized finance (DeFi) ambitions of enabling institutions to borrow uncollateralized liquidity.

The project is being incubated by digital asset custodian Hex Trust, which will provide custody and compliance services such as know-your-customer (KYC) checks and transaction monitoring of Clearpool’s borrowers, according to a press release shared with CoinDesk on Tuesday.

The fresh injection of capital will go toward furthering the project’s protocol while launching additional features such as decentralized credit derivatives.

Funding has come via major players Arrington Capital, GBV Capital, HashKey Capital, Hex Trust, Sequoia Capital India, Sino Global Capital and Wintermute. Ascendex, BCW Group, FBG Capital, Folkvang, Huobi Ventures and Kenetic Capital also participated.

Clearpool allows institutions to borrow uncollateralized liquidity, while liquidity providers receive rewards and various risk management solutions.

Unlike traditional finance, DeFi lenders lack access to credit scores and risk profiles. Clearpool aims to enable lenders with the ability to better determine borrowers’ creditworthiness by providing access to key information via a real-time credit scoring mechanism, according to the release.

“Clearpool introduces several new concepts to DeFi, including single borrower liquidity pools and a system of tokenized credit,” said Clearpool CEO Robert Alcorn, adding:

“These new concepts allow institutional borrowers to access uncollateralized liquidity directly from the DeFi ecosystem and provide lenders with sophisticated risk management and hedging solutions.”

Source: Coin Desk

Coinbase to Allow US Users to Deposit Paychecks Directly in Crypto

Coinbase will enable direct paycheck deposits, the U.S. cryptocurrency exchange giant announced in a blog post Monday.

The nine-year-old, publicly traded company said it will allow users in the U.S. to deposit “as much or as little” of their paycheck at no fee, whether in crypto or fiat currency. Coinbase said that direct deposit would address concerns that making frequent transfers was too time consuming, and will allow users to make investments, earn interest on digital assets or pay for goods and services with greater speed and efficiency.

Users can create and modify direct payments by following a few steps in the Coinbase app. Coinbase can set up an automatic paycheck distribution or provide instructions to enable manual deposits via a company’s payroll system. The company said the service will be launched in “the coming weeks.”

In a separate announcement, Coinbase said it would allow Coinbase Visa debit card holders to earn crypto rewards on spending in dollars as well as certain cryptocurrencies without fees, and that it had improved its mobile and web apps to enable users to research assets, conduct transactions and “engage with the broader cryptoeconomy.” The company said that beginning this week, cardholders will be able to earn 1% on DAI tokens or 4% on AMP or RLY tokens. They can already earn 1% on ether, dogecoin and bitcoin, and 4% on the GRT and XLM tokens.

“Coinbase is building a one-stop shop for crypto-based financial services,” VP of Product Max Branzburg said in a statement to CoinDesk, adding:

“Our goal is to enable everyone to get more out of their money with the power of crypto – from getting your paycheck in crypto, to generating yield on your assets, to spending your crypto and beyond – all from a single account.”

Coinbase noted its partnerships with M31 Capital, Nansen and SuperRare Labs enable workers in the “creator economy” to receive crypto payments. The company said it would make further announcements in the coming months about how it would facilitate these types of payments by companies.

Source: Coin Desk

Market Wrap: Bitcoin Traders Cautious After China Crypto Ban, DeFi Outperforms

Bitcoin was slightly lower on Monday as traders remained cautious about regulatory crackdowns from China and elsewhere.

The cryptocurrency was trading at about $43,000 at press time and is roughly flat over the past 24 hours. Analysts are monitoring blockchain data for signs of buyer accumulation, although it may be too early to tell if sellers have fully capitulated.

For now, it appears that some buyers have shifted their focus away from bitcoin and moved into decentralized finance (DeFi) tokens in the wake of China’s crackdown on cryptocurrency activities. For example, Messari data shows the PERP token initially spiked about 55% toward $17 on Monday, although the price settled at about $15 at press time. PERP is the utility token facilitating and incentivizing the decentralized governance of the Perpetual Protocol.

Analysts expect China’s crypto industry to phase out given the recent ban.

“I think OTC platforms that are operated from the big exchanges will close down,” said Bobby Lee, founder and CEO of the Ballet wallet service and former head of BTCC, once one of the biggest bitcoin exchanges in China in an interview with CoinDesk. “OTC” refers to over-the-counter trading, or off-exchange.

And on Monday, Ethereum mining pool SparkPool said it plans to suspend services for all its users by Sept. 30.

Latest Prices

  • Bitcoin (BTC), $43,075, -0.4%
  • Ether (ETH), $2,999, -1.8%
  • S&P 500: -0.3%
  • Gold: $1,751, +0.0%
  • 10-year Treasury yield closed at 1.487%

Bitcoin fund inflows

Investors pumped $95 million into digital asset products last week, more than double the prior week’s pace, according to a CoinShares weekly report.

With the headwinds that digital assets have faced recently, such as China’s ban, the inflows suggest that price declines may have been seen as buying opportunities, CoinDesk’s Lyllah Ledesma reported.

Flows into all crypto funds during the week ended Sept. 24 were the most since the $98 million in the week through Sept. 3, and brought total inflows over the last six weeks to $320 million.

Bitcoin saw the largest inflows of any crypto investment product with a total of $50 million, also the most in three weeks.

Test of buyer conviction

Analysts are questioning whether bitcoin holders can sustain enough buying power to support further price increases into the fourth quarter. Prices are now back near the cost basis for most short-term holders, similar to September 2020, which preceded a price rally.

This time, however, “the 50%+ correction in May resulted in a flushing out of many retail traders and investors, and thus interest in the [Bitcoin] protocol has waned since early 2021,” Glassnode wrote in a blog post.

About 58% of short-term holders are already experiencing losses (current BTC price below the acquired price), according to Glassnode data. The holders who entered over the past two months could decide to sell their BTC at a loss, which could drive prices lower, or accumulate more BTC in hopes of turning a profit.

The chart below shows the market-value-to-realized-value (MVRV) ratio, which measures BTC’s market capitalization relative to its realized market value. The current MVRV suggests that BTC is trading at roughly its fair value after the May sell-off.

Altcoin roundup

  • DeFi tokens PERP, DYDX lead crypto market higher: Native tokens of decentralized trading platforms such as Perpetual Protocol and dYdx are surging as China’s crypto crackdown saw centralized exchanges scramble to comply with new regulations. Perpetual Protocol’s PERP token surged 55% in the past 24 hours, reaching $17 a token, CoinDesk’s Omar Godble reported. Derivatives DEX dYdx registered a trading volume of more than $4.3 billion in the past 24 hours, surpassing the Nasdaq-listed centralized crypto exchange Coinbase’s $3.7 billion.
  • Immutable X token sales raise over $12.5 million in under an hour: Ethereum scaling product Immutable X’s token sale on CoinList sold out in less than one hour and raised $12.5 million for the project, CoinDesk’s Jamie Crawley reported. Of the 720,000 accounts that registered to participate in the sale, only about 25,000 (3.6%) were able to make purchases due to the high demand, Immutable announced Monday. The company said it is aiming for the IMX token to be Ethereum’s “Stripe for NFTs,” offering gas-free non-fungible token minting and trading, referring to payments company Stripe.
  • Cardano’s commercial arm to invest $100 million in DeFi, NFTs and blockchain education: Emurgo, the commercial and venture arm of Cardano, is investing $100 million to “accelerate the development of the Cardano ecosystem,” Emurgo CEO Ken Kodama announced at the Cardano Summit 2021 on Sunday. Emurgo also said it would be pouring additional funding into African artificial intelligence, blockchain and smart technologies firm Adanian Labs. Cardano founder Charles Hoskinson also recently donated $10 million to establish the Hoskinson Center for Formal Mathematics at Carnegie Mellon University.

Relevant News

ICYMI:

Other markets

Most digital assets in the CoinDesk 20 ended the day lower.

Notable winners as of 21:00 UTC (4:00 p.m. ET):

  • Filecoin (FIL), +4.7%

Notable losers

  • Uniswap (UNI), -6.6%
  • Aave (AAVE), -4.3%

Source: Coin Desk

‘Solcial’ Raises $2.9M to Build Censorship-Free Social Media on Solana

The Solana ecosystem is getting a social network.

Solcial has raised $2.9 million to scale in a round led by Alameda Research with Solana Foundation, Rarestone Capital, GBV, Shift Capital and Noia Capital participating.

Around 5% of Solcial’s planned SLC tokens are earmarked for seed funders, according to pseudonymous founder “Idris,” for a valuation of about $58 million.

The platform, which has not yet launched, plans to build a hub for sharing content, following the news and even trading assets, in a censorship-free environment. It’s hardly the only crypto stab at hands-off social media (BitClout is perhaps best-known) though one of the first on Solana.

“It has to be very cheap, and very fast to post a comment or a photo,” Idris said in a Telegram chat. “People have high expectations (in terms of user experience) with centralized social networks, and we have to have a decentralized solution that could match.”

Read more: Nader Al-Naji (Formerly Known as ‘Diamondhands’) Unveils Long-Term Plan for BitClout Blockchain

Even so, Solcial is content on courting the crypto crowd for now. It will place a heavy focus on monetization opportunities of content creators, Idris said. He declined to elaborate on how that model will work but said, “Essentially, Solcial will allow to turn anyone into a business.”

BitClout also tried to put a crypto twist on content monetization. The “crypto social network” backed by Andreessen Horowitz lets users speculate on the value of creator coins that in many cases are listed without their namesake’s consent.

“Their launch wasn’t well-received,” Idris said in the Telegram chat. They said Solcial “looked at BitClout and all the other attempts” to find the right fit for decentralized social media.

Solcial plans to launch in December 2021, Idris said. Until then, it’s in hiring mode for marketers and project developers.

Source: Coin Desk

Almost a Third of Salvadorans Are Using the Bitcoin Wallet, Bukele Says

Almost a third of Salvadorans are actively using the Chivo bitcoin wallet less than a month after the country adopted the cryptocurrency as legal tender, President Nayib Bukele said in a tweet.

  • Some 2.1 million people are using the wallet, Bukele said in a tweet. That’s more users than any bank in the country, he said. El Salvador has a population of about 6.5 million people, according the CIA World Factbook.
  • El Salvador started using bitcoin as legal tender on Sept. 7, three months after the country’s legislature passed the Bitcoin Law. It runs in parallel with the U.S. dollar, which has been the currency since 2001.
  • El Salvador is using cryptocurrency wallet company BitGo to provide Chivo’s underlying technology.
  • Earlier this month, demonstrators against the rollout in the capital San Salvador set fire to a Chivo ATM, designed to exchange dollars for bitcoin.

See also: Why El Salvador Is Botching Its Bitcoin Experiment

Source: Coin Desk

Analysts Turn Negative on Ether as Weekly Chart Tips Bearish

Ether remains on slippery floors despite the weekend’s bounce to $3,000, analysts studying chart patterns told CoinDesk Monday. One source signaled the possibility of a $1,000 drop over the next few weeks.

The second-largest cryptocurrency is stuck in a four-week falling channel with the daily chart moving average convergence divergence (MACD) histogram – an indicator used to gauge trend strength and changes – signaling a downward bias.

“A bearish short-term bias still seems appropriate given the recent breakdown and a negative reading in the daily MACD indicator,” Katie Stockton, founder and managing partner of Fairlead Strategies, said in a weekly research note shared with CoinDesk on Monday.

Ether has established a foothold under the 50-day moving average (MA) in the past few days, having flipped the crucial support into resistance a week ago.

The weekly chart MACD histogram has also crossed below zero this week, adding to bulls’ woes. As per Stockton, the indicator needs to stay negative till Friday to yield a sell signal.

“That would be an intermediate-term setback if we also see [immediate] support near $2,874 taken out,” Stockton said in an email.

Short-term cautious

The last time the weekly MACD turned bearish, in June, ether fell by nearly $900 to revisit May lows near $1,700.

Bill Noble, chief technical analyst at Token Metrics, said both the macro and technical picture appear aligned in favor of the bears for now.

“Broadly speaking, if ether fails to stay above $3,300 there is a risk of a deeper correction to perhaps $1,400 by the end of October,” Noble said in an email. “The Evergrande situation could be similar to the events of 2008, so while the ETH bull case is intact for the long-term, it may be best to be cautious in the short-term.”

A breakout above the 50-day MA would weaken the bear case and expose a path higher, toward the Sept. 16 high near $3,675. Ether was trading near $3,000 at press time, a 2% drop on the day. A push higher by the cryptocurrency earlier Monday was rejected near $3,200.

Source: Coin Desk

Immutable X Token Sale Raises Over $12.5M in Under an Hour

Ethereum scaling product Immutable X’s token sale on CoinList sold out in less than an hour, raising over $12.5 million.

  • Of the 720,000 accounts registered to participate in the sale, only around 25,000 (3.6%) were able to make purchases due to the demand, Immutable announced Monday.
  • Immutable said it is aiming for the IMX token to be Ethereum’s “Stripe for NFTs,” offering gas-free NFT minting and trading. Stripe is a payments processing company.
  • Developers of non-fungible tokens (NFTs) who were unable to purchase tokens in the sale are now encouraged to launch projects on Immutable X by the end of September thereby earning up to 30,000 IMX.
  • The protocol is poised to integrate with a number of NFT marketplaces, including Mintable and OpenSea.
  • Immutable recently raised $60 million in a Series B funding round that was led by BITKRAFT Venture and King Rival Capital. Other participants included Alameda Research, Galaxy Interactive and Prosus Ventures.

Read more: DeFi’s 1inch Network Launches on Ethereum Scaling Platform Optimism

Source: Coin Desk

3 Takes About China’s Crypto Ban That Are Wrong

Following China’s surprise move to make crypto mining and crypto trading services explicitly illegal within its borders, there is still much we don’t know about the real impacts. But, of course, that’s not stopping plenty of commentators from peddling simplified reactions. Here are three common ones – and why they, at best, need fleshing out.

‘China’s ban will destroy crypto markets’

We’ll start with the easy one – what you might call “the mainstream media take.” BTC, ETH and many other cryptos dropped dramatically when news of China’s ban hit, some plunging nearly 9% in just four hours. Clearly, somebody thought the sky was falling, expecting millions of Chinese investors to immediately exit the market and destroy everyone’s bags in the process.

But prices have more or less recovered just a few days later. This doesn’t mean there’s no serious broader impact (see below), just that the crypto asset market was, in some sense, ready for the China shock. China’s incremental moves against crypto, particularly the ejection of miners earlier this summer, have served as ample warning that something more severe could arrive.

That said, remember that the market today isn’t an airtight arbiter of long-term truth. With cash and liquidity extremely high in the broader market, a dip in nearly any asset triggered by an outside shock is going to attract a certain amount of cash from those who see a buying opportunity, even a very short-term one. If you bought the Friday dip, you’ve already made a little over 3%, or over 300% APR returns; You get to keep that money no matter what you actually think about crypto’s future without China.

‘China wants to crush crypto because it hates the smell of freedom’

OK, look, I know this is a very tempting way to think, especially for crypto die-hards. China truly is a repressive society, and the idea that the crypto crackdown is act one of some sort of “V for Vendetta” situation is gratifying: Every crypto activist wants to be a heroic, crusading anti-authoritarian. It is also objectively true that uncensorable cryptocurrencies are threats to the Chinese Communist Party’s authority and goals, particularly when it comes to capital controls.

But the current moves against crypto are part of a much larger moment of reckoning for financial experimentation and risk in China. It has come at the same time as a series of moves against fintech and even traditional banking and investment firms, making it clear that crypto isn’t some singular threat to Xi Jinping getting a good night’s rest.

Recently, for example, China announced it would be “parachuting” financial oversight officials into China’s 25 largest financial institutions to review their practices. The planned initial public stock offering of fintech Ant Group was famously kneecapped by the Party. China also recently implemented a “three red lines” policy to reduce the debt leverage of real estate developers – a policy which has brought down the massive developer Evergrande.

In that context, what’s happening to Chinese crypto exchanges is barely a footnote. In fact, it’s arguably misleading to call what’s happening a “crypto crackdown” at all: It is by all appearances an attempt to curtail leverage risk across the financial system, and crypto is just a small part of that.

‘China’s ban won’t impact crypto at all’

While token markets have digested the bad news without much trouble, that doesn’t mean there isn’t a downside to all this. It will just be a long time coming, and hard to see.

The medium-term impacts, for a start, are very real. For example, Huobi, a massive domestic exchange until recently, appears poised to cut off mainland users. Sources including former BTCC CEO Bobby Lee are also telling CoinDesk to expect an end to over-the-counter trading sooner rather than later. Right now, users of those OTC desks seem to be cashing in their chips: In the immediate aftermath of the announced clampdown, the stablecoin tether temporarily broke its peg against the RMB, suggesting heavy outflows.

In other words, it seems likely that many Chinese investors, and especially traders, will leave the market. Crypto continues to grow everywhere else, hence the steadied market, but that’s still a lot of volume to offset.

Some of that volume will move to decentralized exchanges. Interest in that technology in Chinese crypto circles has surged in response to the crackdown, Matthew Graham, China-based cofounder of blockchain VC firm Sino Global Capital, observed on Twitter. That would be in line with what some China watchers argue is the CCP’s real goal here – not to crush crypto entirely but to push it to the margins where only a few dare tread.

And that speaks to the real long-term concern here. Over time, the clear pressure from Chinese leadership to move away from decentralized blockchain tech will have a determining influence over how young people in China and Hong Kong spend their time and attention. Among the more draconian measures of the new Chinese policy is that Chinese residents cannot work for crypto exchanges abroad, meaning there will be a much narrower career path for young Chinese people who want to do crypto professionally.

Even grassroots activity seems likely to experience a major chilling effect, because Chinese policy changes are usually read as broader signals of what the government considers socially acceptable. Sino Global’s Graham also shared over the weekend that crypto-related WeChat groups are being renamed to conceal their topic. Whatever the letter of the law, at least some Chinese people are afraid to even be caught talking about crypto. If nothing else, that means the pipeline of real individual talent and energy coming from China into the blockchain universe will slow.

That, rather than declining exchange volumes or hash power, is the real worry here.

Source: Coin Desk

Revolut to Launch Crypto Token: Sources

Revolut, a fintech company with a $33 billion valuation that offers cryptocurrency buying as part of its services, is looking to launch its own cryptographic token, according to two people with knowledge of the plans.

One of the people CoinDesk spoke with said Revolut is working on something like an exchange token, such as Binance’s BNB, as opposed to creating a stablecoin.

“It’s a ‘Revolut users earn a token’ type of thing, similar to Wirex and Nexo,” the person said, referring to the card issuer’s WXT token and the crypto lender’s NEXO, respectively.

In terms of the timing of a Revolut token launch, the source said this is subject to approval from the U.K.’s Financial Conduct Authority (FCA). A second source said Revolut’s token launch plans were focused on Europe and other locations outside the U.S. for the time being.

Revolut declined to comment.

Relative to the other large fintech players dabbling in crypto, launching a token would seem to set Revolut apart from the pack.

Accelerated embrace

London-based Revolut recently announced it would be paying a WeWork membership in Dallas, Texas, in bitcoin. The firm, which already holds a European Union banking license, also announced it had secured a U.S. broker-dealer license in order to compete in the retail capital markets space with firms like Robinhood.

Similar to rivals like Robinhood and PayPal, Revolut added the means to buy and hold a variety of cryptocurrencies within its fintech and banking app, but without the sort of functionality afforded to users who buy and trade on crypto exchanges.

Revolut now has more than 16 million customers worldwide and sees over 150 million transactions per month. The firm has been an enthusiastic supporter of cryptocurrency and offers users exposure to over 50 tokens.

In an earnings call in June, Revolut said crypto services make up about 20% of its revenue.

Source: Coin Desk

FalconX Eyes Miami for Expansion as CEO Plans Hiring Push

FalconX expects to grow to roughly 160 employees from 90 over the next six months, CEO Raghu Yarlagadda said.

He also said the institutional crypto exchange is evaluating Miami as a potential location for expansion after several firms have opened offices in the crypto-friendly city in recent months.

FalconX is trying to tap the growing demand from institutional investors trading cryptocurrencies as larger competitors such as Coinbase do the same. On its last earnings call, Coinbase said that institutions accounted for 69% of its $462 billion in second-quarter trading volume.

While FalconX is looking at mainly internal growth, it’s also considering acquisitions, Yarlagadda said in an interview with CoinDesk.

The exchange is looking at potential deals to add talent and is also considering strategic purchases that will help the company become more of a “one-stop shop” in crypto for institutional investors.

Read more: Crypto Trading Startup FalconX Achieves Unicorn Status With Latest Raise

He said that pension funds are starting to dip their toes into cryptocurrency through hedge funds.

“Instead of getting direct exposure to crypto, like parking some money in bitcoin, they’re getting indirect exposure to the hedge funds that typically deploy money,” Yarlagadda said.

SkyBridge Capital founder Anthony Scaramucci told Bloomberg last week that the majority of institutional investors are still reluctant to invest in crypto and blockchain technology, but that may be changing, according to Yarlagadda, who recently met with six of the top 10 hedge funds in the world.

Hedge funds are allocating about 1% of their assets under management toward crypto, Yarlagadda said. The hedge funds he met with said they are looking to increase that figure to 8% to 9%., while asset managers want to get to about 5% over the next 12 to 18 months, he added.

“That’s why we are hiring as fast as we can,” he said.

Last month, FalconX reached unicorn status (startups worth at least $1 billion) with a $210 million Series C funding round led in part by Tiger Global that valued the firm at $3.75 billion.

FalconX’s previous funding round, announced in March, valued the company at $675 million.

Source: Coin Desk