Ecosystem

Huobi partners with Gala Games for L1 and Web3 development

Huobi Global has joined hands with Gala Games, a blockchain-based play-to-earn gaming platform, to work together on the investment and listing of Web3 projects.

Huobi Global, a cryptocurrency exchange, has declared a strategic partnership with Gala Games, a blockchain-based play-to-earn gaming platform. 

In an official blog post on March 31, Huobi announced a partnership with Gala Games to develop the Web3 ecosystem. The two companies will collaborate to invest in and list projects within the Gala ecosystem.

Gala Games enables developers to create play-to-earn crypto and nonfungible token (NFT) games, which allow players to buy and sell in-game items. Once purchased, these in-game items cannot be modified or deleted by developers without the players’ consent.

Huobi’s collaboration with Gala Games is expected to enhance the former’s Web3 objectives, allowing it to integrate with the Gala layer-1 blockchain to improve the underlying on-chain technology. Jason Brink, who serves as the president of blockchain at Gala Games, has stated that integrating its layer-1 blockchain with major exchanges like Huobi is of utmost importance for achieving the desired level of mass adoption.

Huobi also took to Twitter to announce the partnership with Gala Games, with the community expressing support for the partnership due to the advantages of the layer-1 blockchain.

Related: GameFi project Gala files $28M lawsuit against pNetwork

At present, Huobi Global is pursuing a license in Hong Kong in light of new regulatory measures being considered by the Chinese special administrative region that would enable the platform to cater to retail clients.

Additionally, Huobi has announced its plans to expand its services in other regions by launching a Visa-backed crypto-to-fiat debit card. This card will be available to Huobi customers residing in the European Economic Area, and is expected to launch in the second quarter of 2023.

Magazine: Huobi employees revolt, GameFi lives, Antminer on steroids: Asia Express

Near Protocol releases blockchain operating system for Web3

Cointelegraph interviewed the protocol team at ETHDenver 2023 about the new operating system and funds raised to help Ukrainians last year.

The decentralized application (DApp) Near Protocol is releasing a new blockchain operating system, focusing on improving user experience on Web3 through a common layer for browsing and discovering open web resources, the company disclosed at the Web3 and innovation festival ETHDenver 2023.

In an interview with Cointelegraph’s Turner Wright during the event, Near co-founder Illia Polosukhin spoke on how the ecosystem is moving closer to user’s needs and the release of the Blockchain Operating System (BOS).

According to the Near team, the system works with any blockchain or Web2 backend, allowing users to have the experience of using a single app, even when switching between applications or chains. For developers, the solutions promise to deliver decentralized and composable frontends, enabling the fork of pieces and components and built-ins such as payments, profiles, and notifications without any hosting involved.

Polosukhin noted about the blockchain operating system: 

“The iOS provides developers a place to show their app in front of billions of users, and it gives them all the services and the infrastructure underneath to build, so you kind of just plug in here. That’s what we’re trying to do, trying to kind of give the distribution here, give the platform underneath and let developers build.”

The protocol, which is a competitor of Ethereum offering smart contract capable and a proof-of-stake blockchain, sought a 10x growth on key metrics last year, including number of transactions, active monthly wallets, projects onboarded, developers and money invested within the ecosystem, claimed the co-founder. 

Related: Smart contracts to power day-to-day Web3 company operations

“A lot of projects just migrated over to Near,” noted Polosukhin about last year’s growth, combined with an effort to search for existing applications with a user base:

“They came to us, some of them because they saw you can write in JavaScript smart contracts. That’s like three times cheaper to hire developers. This is just more usable not just for users, but for developers as well.”

Unchain Fund

Polosukhin is also one of the developers behind the Unchain Fund, a fundraising effort created last year to help Ukrainians affected by the war. As of early 2023, the fund had raised over $9 million in donations, almost entirely in crypto assets.

According to him, the raised funds were crucial to support the people of Ukraine in the first weeks of war, while international help was still underway at a lower pace:

“The Red Cross, UNICEF, they take months to spin up all of their systems when something happens, that’s just that’s how they are. They’re slow […] but when they get there, they have the procedure, and they set it up, they build the supply chain, logistics, and then they can start delivering. So, in a way, crypto funds covered in the beginning, like spin-up time for a similar government aid.”

Part of the raised funds were used for a program dedicated to women with children who run away from home, providing weekly payments of 25 euros to roughly 6,000 Ukrainian women. The funds were also used to purchase ambulances through the global initiative United24. 

Bitcoin DeFi ecosystem explained

DeFi on Bitcoin was made possible by the Taproot upgrade. Find out how Bitcoin DeFi works compared to the Ethereum blockchain.

What is the future of Bitcoin DeFi?

The effectiveness of Bitcoin DeFi platforms and protocols will be determined by their long-term sturdiness and security, level of innovation, as well as the incentives provided to investors.

With Bitcoin scaling solutions like Rootstock, Stack, Liquid Network and more, it is evident that DeFi is flowing into the Bitcoin network. However, DeFi on Bitcoin is less approachable than on the Ethereum blockchain and other smart contract platforms. 

That said, if developers want to opt for the Bitcoin blockchain to develop DApps or mint NFTs, they need to rely upon layer-1 or layer-2 solutions, unlike the Ethereum blockchain. For instance, one can use Ethereum testnets, such as Ropsten, to build DApps. In contrast, Bitcoin DeFi platforms require bridges such as RenBrdige to connect to the Bitcoin Network for developing decentralized applications.

Also, NFTs on Bitcoin are still in their infancy; however, given that Bitcoin laid the foundation for cryptocurrencies, it only seems a matter of time before developers flock to the Bitcoin network to develop novel financial instruments and platforms.

Therefore, DeFi on Bitcoin must host innovative decentralized finance applications unavailable on other blockchains, have a sizable user base, and offer a demonstrable advantage over existing DeFi solutions.

Which DeFi projects are part of the Bitcoin ecosystem?

Besides wBTC, Stacks and Rootstock, BadgerDAO, RenVM and Liquid Network promote various use cases of Bitcoin DeFi.

BadgerDAO

A decentralized autonomous organization (DAO) called BadgerDAO makes it possible for BTC to be utilized as collateral across various DApps. The BadgerDAO uses the Ethereum-based token BADGER for protocol governance and incentive distribution. 

Users can earn income on their synthetic BTC assets using Sett Vaults, the first product offered by Badger. Users can lock up their tokenized Bitcoin in SETTs, which are pools of tokens, and let smart contracts manage their holdings to produce a yield in the form of bTokens.

The second product from Badger, called Digg, is software that controls the elastic-supply cryptocurrency called the DIGG token, pegged to the price of BTC in United States dollars. Like any other token, DIGG can be deposited into SETTs to provide a yield for its holders and used in DeFi protocols. 

RenVM

The decentralized Ethereum protocol Ren creates tokens that monitor the value of non-Ethereum assets such as Bitcoin and offers liquidity to projects on several blockchains. That said, Bitcoin holders may utilize Ren (needed to pay nodes) to access Ethereum’s array of DeFi products without selling their BTC or moving their assets across blockchains.

The Ren virtual machine holds the original funds in storage, accepts tokens from one blockchain, and generates new tokens on another through its RenBridge to exchange assets between blockchains. For example, a user may submit BTC to the RenVM, which would issue renBTC, a new token on Ethereum that would reflect the original Bitcoin, meaning when the user wants to get their Bitcoin back, the transaction may be reversed.

Liquid Network

The Liquid Network is a layer-2 Bitcoin solution and an inter-exchange settlement network that enables the issue of digital assets like security tokens, stablecoins and other financial instruments privately and quickly on top of the Bitcoin blockchain.

LBTC, a wrapped version of Bitcoin, serves as the native token on the Liquid sidechain. Users send BTC to a Lightning Network address (a process called peg-in) on the Bitcoin network to use the Liquid Network. A similar quantity of LBTC is minted on the Liquid Network and delivered to the user’s address after the transaction has received 102 confirmations.

In addition, peg-out can be initiated to withdraw BTC by sending LBTC for burning to an irrecoverable address, which, when receiving two separate confirmations, lets a Lightning Network member send the original BTC to a user’s Bitcoin network address.

How does Bitcoin DeFi work?

Wrapped tokens like Wrapped Bitcoin, layer-1 blockchains like Stacks, and sidechains like Rootstock enable DeFi on Bitcoin.

The scripting language used by Bitcoin, termed Script, is not Turing complete, which means it is deficient in several logical operations, such as loops. As a result, the Bitcoin network supports limited programmability despite the Taproot upgrade, meaning that Bitcoin DeFi platforms rely on layer-2 scaling solutions and sidechains to host their smart contracts.

DeFi on Bitcoin is made possible through wrapped tokens like Wrapped Bitcoin (wBTC), layer-1 blockchains like Stacks and sidechains like Rootstock. For instance, wBTC, an Ethereum token introduced in January 2019, is backed one-to-one by Bitcoin (BTC), meaning that one wBTC is always equivalent to 1 BTC. Users can engage with several of Ethereum’s DApps using the wBTC token.

An independent layer-1 blockchain called Stacks makes hundreds of billions of dollars in capital in BTC available and offers Bitcoin holders new ways to use and profit from the cryptocurrency. It uses a proof-of-transfer consensus mechanism, which secures its blockchain by utilizing Bitcoin’s proof-of-work blockchain.

DeFi products like the Stackswap DEX leverage the Stacks blockchain to allow users to trade and mint NFTs, borrow algorithmic stablecoins, and launch and exchange tokens on the Bitcoin network. Additionally, since Stacks and Bitcoin are linked, NFTs created on Stacks settle to and are secured by the Bitcoin blockchain.

Turing-complete smart contracts are made possible on the Bitcoin blockchain by Rootstock, which runs parallel to the blockchain. When BTC is sent to Rootstock, it transforms into RBTC, a smart contract-enabled Bitcoin. Based on bidirectional communication, this protocol serves as a bridge to connect both chains. For instance, Sovryn, one of the first permissionless financial apps, utilizes RSK’s technology to connect to the Lightning Network, Ethereum, Bitcoin and BNB Smart Chain.

What is Bitcoin DeFi?

The Bitcoin Taproot upgrade unlocked the potential to create DApps on the Bitcoin blockchain, improving the blockchain’s long-term viability by accelerating the DeFi movement on the Bitcoin network.

Decentralized finance (DeFi) has experienced tremendous success since 2020, with nearly all of that growth being fueled by Ethereum. Ethereum paved the way for novel financial services and instruments, including decentralized exchanges (DEXs), automated loan platforms and nonfungible tokens (NFTs). 

On the contrary, developing smart contracts powered decentralized applications (DApps) was not possible on the Bitcoin blockchain until the Taproot upgrade, opening the door to DeFi for the world’s first cryptocurrency. In this context, Bitcoin DeFi refers to developing innovative decentralized applications on Bitcoin’s network, which wasn’t possible before due to the problem of transaction scalability. 

Due to the requirement that each digital signature had to be verified against a public key before the implementation of the Taproot upgrade, Bitcoin transactions were comparatively slow. Thanks to Taproot, the network can now group several digital signatures and validate them all at once. As a result, less space is needed on each block, allowing the Bitcoin blockchain to support the development of DeFi applications.

Report: On-chain data points to crypto consolidation in Q3

The latest quarterly report from DappRadar highlights a period of consolidation across the cryptocurrency ecosystem following a turbulent Q2.

A third-quarter industry report from DappRadar citing on-chain metrics suggests cryptocurrency markets are showing signs of recovery from ongoing bearing market conditions.

A number of factors played their part in a busy third quarter of 2022, with Ethereum’s Merge marking a successful shift to proof-of-stake having a notable influence on layer-2 activity before the event. The report also highlights a slight recovery in the overall cryptocurrency market capitalization, which still sits below the $1 trillion mark.

Third-quarter data reflected an 8.5% increase in the total crypto market cap from July to the end of September 2022. The decentralized finance space also showed signs of consolidation, with the total value locked (TVL) in the space increasing by 2.9% in the third quarter to $69 billion. Ethereum continues to account for the bulk of TVL, with $48 billion locked in smart contracts.

DappRadar also highlights a 12% increase in unique active wallets across the cryptocurrency ecosystem quarter-on-quarter, adding up to 1.8 million. The blockchain gaming sector contributed significantly, with unique wallet addresses increasing by 8% from August to September.

ImmutableX saw its unique active wallets grow by 30% during the same time period and recorded an 87% growth in nonfungible tokenNFT trading volume from the previous quarter, while Polygon followed a similar trajectory, seeing its unique active wallets increase by 17% to 148,000.

The number of nonfungible token (NFT) trades increased by 11% from the second quarter of 2022 while Ethereum’s NFT trading volume was down by a large margin of 76%. The NFT trading volume totaled $2.71 billion during the third quarter, which still marks a significant 67% drop from Q2 2022.

Related: Blockchain gamers surge as users attempt ‘stacking crypto’ — DappRadar

Yuga Labs-owned NFT projects dominated the market in September, with Otherside, Bored Ape Yacht Club, Mutant Ape Yacht Club and CryptoPunks accounting for 46.21% of the entire NFT market cap.

The theft of cryptocurrency assets was also highlighted once again, with blockchain bridges still being targeted. DappRadar listed the $190 million Nomad exploit in August as a significant contributor to the $461 million worth of crypto assets stolen in Q3. Algorithmic market maker Wintermute also succumbed to a $160 million exploit during the same period.

The DappRadar report also highlights the effect of wider macroeconomic factors on the global economy. As central banks look to manage inflation to stave off recessionary effects by raising interest rates:

“Current macroeconomic conditions significantly influence the crypto market, making it impossible to foresee a worldwide expansion of cryptocurrencies without a general recovery in conventional financial markets.”

This slightly gloomy outlook was countered by a number of positive events during the third quarter of 2022. The European Union’s approval of the Markets in Crypto-Assets regulatory plan indicates that governments are looking to manage the industry carefully.

Similarly, the White House published the “First-Ever Comprehensive Framework for Responsible Development of Digital Assets” in September 2022 in a bid to protect investors, which indicates that cryptocurrencies have become a fully-established industry.

Do Kwon dismisses allegation of cashing out $2.7B from Terra (LUNA), UST

The rumor surfaced after a Twitter thread by @FatManTerra shared the alleged details on how Kwon, along with Terra influencers, managed to drain funds while artificially maintaining the liquidity.

Do Kwon, the CEO and co-founder of the infamous Terra (LUNA) and TerraUSD (UST) ecosystems, refuted the claims of cashing out $80 million every month for nearly three years. 

Numerous unconfirmed reports surfaced on June 11, claiming Kwon’s participation in draining liquidity out of LUNA and UST before the crash to purchase US dollar-pegged stablecoin such as Tether (USDT).

Rumors about Kwon cashing out LUNA and UST reserves surfaced after a Twitter thread by @FatManTerra shared the alleged details on how Kwon, along with Terra influencers, managed to drain funds while artificially maintaining the liquidity.

However, the entrepreneur advised the crypto community to steer away from fueling the rumor until it was proven true:

“This should be obvious, but the claim that I cashed out $2.7B from anything is categorically false.”

Sharing his side of the story, Kwon stated that the recent rumor of cashing out $80 million per month contradicts the claims that he still holds most of his LUNA holdings, procured during the airdrop. Moreover, Kwon further reiterated that his income over the past two years has only been a cash salary from TerraForm Labs (TFL).

Kwon told the community that “spreading falsehood” adds to the pain of all LUNA investors, remarking that:

“I didn’t say much because I don’t want to seem like playing victim, but I lost most of what I had in the crash too. I’ve said this multiple times but I really don’t care about money much.”

Related: Anchor dev claims he warned Do Kwon over unsustainable 20% interest rate

Mr. B, a developer from Anchor Protocol, a Terra-centric sub-ecosystem, allegedly warned Kwon about the unrealistic high-interest rates. Mr. B said that the platform was designed only to offer an interest rate of 3.6% for keeping the Terra ecosystem stable, but was changed to 20% just before the release:

“I thought it was going to collapse from the beginning (I designed it), but it collapsed 100%.”

The developer allegedly suggested to Kwon about lowering the interest rates but the request was refused. Do Kwon has been summoned to attend a parliamentary hearing on the matter in South Korea in mid-May.

Do Kwon dismisses allegation of cashing out $2.7B from LUNA, UST

The rumor surfaced after a Twitter thread by FatManTerra shared the alleged details on how Kwon, along with Terra influencers, managed to drain funds while artificially maintaining the liquidity.

Do Kwon, the CEO and co-founder of the infamous Terra (LUNA) and TerraUSD (UST) ecosystems, refuted the claims of cashing out $80 million every month for nearly three years. 

Numerous unconfirmed reports surfaced on Saturday, claiming Kwon’s participation in draining liquidity out of Luna Classic (LUNC) and TerraUSD Classic (USTC), before the crash to purchase United States dollar-pegged stablecoin such as Tether (USDT).

Rumors about Kwon cashing out LUNA and UST reserves surfaced after a Twitter thread by FatManTerra shared the alleged details on how Kwon, along with Terra influencers, managed to drain funds while artificially maintaining the liquidity.

However, the entrepreneur advised the crypto community to steer away from fueling the rumor until it was proven true:

“This should be obvious, but the claim that I cashed out $2.7B from anything is categorically false.”

Sharing his side of the story, Kwon stated that the recent rumor of cashing out $80 million per month contradicts the claims that he still holds most of his LUNA holdings, procured during the airdrop. Moreover, Kwon further reiterated that his income over the past two years has only been a cash salary from TerraForm Labs (TFL).

Kwon told the community that “spreading falsehood” adds to the pain of all LUNA investors, remarking that:

“I didn’t say much because I don’t want to seem like playing victim, but I lost most of what I had in the crash too. I’ve said this multiple times but I really don’t care about money much.”

Related: Anchor dev claims he warned Do Kwon over unsustainable 20% interest rate

Mr. B, a developer from Anchor Protocol — a Terra-centric sub-ecosystem — allegedly warned Kwon about the unrealistic high-interest rates. Mr. B said that the platform was designed only to offer an interest rate of 3.6% for keeping the Terra ecosystem stable but was changed to 20% just before the release:

“I thought it was going to collapse from the beginning (I designed it), but it collapsed 100%.”

The developer allegedly suggested to Kwon about lowering the interest rates but the request was refused. Do Kwon has been summoned to attend a parliamentary hearing on the matter in South Korea.

Bitcoin ecosystem makes a U-turn recovery in global ATM installations

Halfway through 2022, the BTC ATM installation numbers dropped 89.75% by May, followed by a swift recovery in June.

Bitcoin (BTC) ATM installations have marked a new comeback as June 2022 saw the reversal of the five-month-long downward trajectory for the first time this year. 

The global ATM installations worldwide fell consistently throughout the year, with May reporting the lowest number of 205 ATM installations. However, June saw the installation of over 882 ATMs in just the first ten days.

Chart showing the net change of cryptocurrency machines number installed and removed monthly. Source: Coin ATM Radar

As evidenced by the above graph, May 2022’s drop reached a range that was last seen three years ago in 2019. Over the last two years, in 2020 and 2021, Bitcoin ATM installations grew consistently owing to friendlier regulatory landscapes amid a rewarding market when numerous cryptocurrencies attained their all-time highs momentarily.

In addition, the use of Bitcoin as legal tender in El Salvador contributed to the spike in crypto ATM installations in the last year. China imposing a blanket on crypto trading and mining, too, contributed to the temporary slowdown in the global ATM installation numbers. Surprisingly, despite the regulatory hurdles, China came out as the 2nd top Bitcoin mining hub despite the crypto ban.

Crypto ATM installations peaked in 2021, with December witnessing 1971 ATMs installed in a month. However, up until June 2022, the numbers dropped 89.75% by May, which was followed by a swift recovery in the following month.

According to Coin ATM Radar’s gauge scale, which is based on the data collected over the last two months, nearly 23 crypto ATMs are being installed per day on an average globally.

A chart showing the speed of crypto machines installed over time. Source: Coin ATM Radar

Data also confirms that there are currently 38,000 operational ATMs installed around the world at the time of writing. Crypto ATMs serve a crucial purpose for the Bitcoin and crypto economy, allowing users and investors to exchange their fiat currencies against Bitcoin and vice versa. 

Out of the lot, the United States represents 87.9% of the total crypto ATM network, i.e., 33,403 ATMs. Prominent manufacturers that lead this space in terms of market share are Genesis Coin (40.9%), General Bytes (21.6%), BitAccess (16.1%), Coinsource (5.4%) and Bitstop (4.8%).

While ATM transactions do not contribute to the overall liquidity of the Bitcoin network, it helps investors procure crypto assets against fiat currencies. As a result, having local crypto ATMs drive the adoption of cryptocurrencies into the mainstream.

Along similar lines, El Salvador, after accepting Bitcoin as legal tender, witnessed a spike in tourism. According to reports, El Salvador’s tourism has grown by 30% since the Bitcoin Law was implemented.

Related: Falling Bitcoin price doesn’t affect El Salvador: ‘Now it’s time to buy more,’ reveals Deputy Dania Gonzalez

In a recent discussion with Cointelegraph, Dania Gonzalez, Deputy of the Republic of El Salvador, recently revealed the country’s plan to buy more Bitcoin amid falling prices:

“What Nayib Bukele did was buy Bitcoins and make a profit at a certain strategic moment.”

Gonzalez also indicated that El Salvador President Nayib Bukele’s strategy has already proven to be successful in terms of socioeconomic impact by citing two ventures — a veterinary hospital and a public school — that were made possible thanks to calculated BTC investments.