Value

Ethereum projects unite to protect users from MEV-induced high prices

In total, 27 Ethereum projects joined the initiative as launch partners, including Balancer, Gnosis DAO, Shapeshift and StakeDAO, to name a few.

Over 27 prominent Ethereum projects joined hands to launch MEV Blocker, a solution that aims to tackle and minimize the amount of value extracted from their users — aka maximally extractable value (MEV), Ethereum’s invisible tax. 

MEV is a tax imposed on decentralized finance (DeFi) users on transactions. MEV bots can hijack transactions midway, such as Ether (ETH) trades, nonfungible token (NFT) purchases and Ethereum Name Service registrations, and inflate prices for the users. MEV Blocker was jointly developed by CoW Swap, Agnostic Relay and Beaver Build as a free and censorship-resistant tool to counter this “$1.3 billion dollar problem” persistent across the Ethereum ecosystem.

In total, 27 Ethereum projects joined the initiative as launch partners, including Balancer, Gnosis DAO, Shapeshift, and StakeDAO, to name a few. Explaining the intention behind launching MEV Blocker, Martin Köppelmann, CEO of Gnosis, stated:

“With the launch of MEV Blocker, users can profit from the backrunning opportunities they create. Today all of that money is taken by the searcher, but why shouldn’t it be split with the people who create the value?”

MEV Blocker can be added as a custom remote procedure call endpoint to a crypto wallet, which, in turn, can protect users from frontrunning and sandwiching when using any Ethereum decentralized application. According to the official announcement, MEV Blocker sends at least 90% of the profits from winning bids back to users and 10% to validators as a reward — thus giving “power back to Ethereum users.”

Related: Sandwich trading bots lose bread and butter in $25M exploit

While entrepreneurs attempt to reduce the taxation on users, the excitement around the upcoming Shanghai and Capella upgrades resulted in a bull sprint for ETH.

On April 5, Ether breached $1,900 for the first time in over seven months. However, it is important to note that the price of ETH dropped sharply following the execution of the Merge on Sept. 15, 2022.

Magazine: ‘Account abstraction’ supercharges Ethereum wallets: Dummies guide

Holding Bitcoin: A profitable affair 88.5% of days

Bitcoin’s historical price performance confirms that a hard limit on total supply and seamless global usability is critical to becoming a store of value.

Of the 4,593 days of Bitcoin’s existence as a tradable asset, BTC hodlers experienced 4,065 profitable days — challenging the historical narrative of depreciating volatility in crypto. As a result, holding Bitcoin (BTC) is provably profitable in the long run. 

Bitcoin’s historical price performance confirms that a hard limit on total supply and seamless global usability is critical to becoming a store of value. Data from Blockchain.com shows that Bitcoiners enjoyed 88.50% of profitable days relative to the current market price at the time of writing.

Number of days in which holding bitcoin has been profitable, relative to current price. Source: Blockchain.com

As shown above, just 531 or 11.56% of the 4,593 days were unprofitable for long-term holders. The unprofitable days are between Dec. 28, 2022, and June 12, 2022, a time when Bitcoin was priced above the $26,246.58 and $28,344.5 range.

The revelation highlights the importance of understanding Bitcoin’s market cycles and why investors should avoid buying the tops and selling the dips. However, some traders prefer making daily trades on crypto exchanges for much smaller but consistent profits.

In a recent publication, Cointelegraph detailed the different types of crypto investors and categorized them based on their investment mindset. As mentioned, there are four main categories of mindsets of crypto bag holders: maximalists, hodlers, fomoers and traders. Read more to find out which one you are.

Related: Crypto Fear and Greed Index hits highest level since Bitcoin’s all-time high

In the Bitcoin ATM ecosystem, manufacturer General Bytes closed down its cloud services after discovering a “security vulnerability” that allowed an attacker to access users’ hot wallets and gain sensitive information.

“We’ve concluded multiple security audits since 2021, and none of them identified this vulnerability,” General Byes founder Karel Kyovsky concluded as he made the announcement.

Bitcoin sees most long liquidations of 2023 as BTC price tags $22.5K

BTC price downside volatility sees $46 million of long Bitcoin positions evaporate in a single day before the monthly close.

Bitcoin (BTC) swapped bullish gains for chop into Jan. 31 as the end of the month saw nervous price action.

BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView

$46 million of longs liquidated

Data from Cointelegraph Markets Pro and TradingView tracked a less confident BTC/USD as it briefly wicked to just above $22,500 on Bitstamp overnight.

A rebound saw the pair flip $23,000 to short-term resistance, and was still trading below that level at the time of writing.

The stakes remained high for traders, long and short, with the monthly close just hours away. This was followed by interest rate decisions from the United States Federal Reserve on Feb. 1, along with the European Central Bank a day later.

With volatility likely lying in wait, liquidations mounted despite Bitcoin maintaining a fairly narrow trading range.

The trip to $22,500 sparked $46 million of long liquidations on Jan. 30, which according to data from Coinglass was the highest daily total of 2023 so far.

Bitcoin liquidations chart. Source: Coinglass

Further data from on-chain analytics resource Material Indicators meanwhile highlighted the tense situation on the Binance order book.

Bid and ask liquidity remained in flux, with incremental shifts up and down having a tangible impact on BTC price trajectory. Bids just below $22,000 and asks at $24,000 kept BTC/USD in check.

BTC/USD order book data (Binance). Source: Material Indicators/ Twitter

“It’s worth noting that this is the same block of bids that have been pushing BTC price for weeks and because it’s prone to move, could end up getting rugged,” Material Indicators commented in a Twitter thread on Jan. 30.

Continuing, the analysis said that the location of the liquidity was “no coincidence,” singling out Bitcoin’s old all-time high from 2017 as a “last stand” support zone should current levels fail to hold.

BTC/USD annotated chart. Source: Material Indicators/ Twitter

Crypto traders stem “dry powder” inflows

Catalysts for a Bitcoin and altcoin comedown had already been mounting at the week’s Wall Street open.

Related: Best January since 2013? 5 things to know in Bitcoin this week

U.S. equities lost ground on Jan. 30, with marketwide nerves over the Fed showing themselves in decreased risk appetite.

This was also conspicuous on crypto exchanges as stablecoin deposits cooled, reducing what one analyst called “dry powder” available for deployment into crypto assets.

“Right now there is a negative correlation between price and stablecoin deposits. Of course, this is not the only one indicator which we need to check but Fed meeting will be held within this week and we also see this negative correlation,“ Kripto Mevsimi, a contributor to on-chain analytics platform CryptoQuant, summarized in a blog post.

“We can expect high volatility within this week however we need to be careful since there is not much dry powder coming into exchanges anymore.“

An accompanying chart showed a divergence in stablecoin deposits relative to BTC/USD growth in the second half of January.

BTC/USD vs. stablecoin deposits chart (screenshot). Source: CryptoQuant

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Metaverse to possibly create $5T in value by 2030: McKinsey report

The success of Metaverse will rely on a greater focus on maximizing the human experience aimed at delivering positive experiences for consumers, end-users, and citizens.

While the 2022 bear market grazed off the excitement around the budding crypto sub-ecosystems such as nonfungible tokens (NFTs), the Metaverse remains well-positioned for long-term disruption. Considering the myriad consumer and business-centric use cases the metaverse could cater to, a McKinsey & Company report highlights the technology’s potential to generate up to $5 trillion in value by 2030.

For the Metaverse to reach its full potential, the report highlighted the need for four technology enablers — devices (AR/VR, sensors, haptics, and peripherals), interoperability and open standards, facilitating platforms and development tools. However, the success of Metaverse is weighed by a greater focus on maximizing the human experience aimed at delivering positive experiences for consumers, end-users, and citizens.

Metaverse impact by 2030. Source: McKinsey & Company

To date, metaverse initiatives around marketing, learning and virtual meetings have seen the highest adoption level across various industries. However, a majority of initiatives around Metaverse have seen low-medium adoption, according to an April 2022 survey on senior executives conducted by McKinsey.

Recommendations for Metaverse implementation. Source: McKinsey & Company

“The metaverse is simply too big to be ignored,” read the report as it highlighted the impact it can have on commercial and personal lives. McKinsey estimated that over 50 percent of live events could be held in the metaverse by 2030, potentially generating up to $5 trillion in value.

Related: LG Electronics’ latest partnership seeks to bring interoperable metaverse platforms to TVs

Metaverse is well positioned to host modern-day romantics, as one-third of surveyed singles showed interest in dating in the virtual world. According to a recent survey conducted by Dating.com, an online matchmaking platform:

“With advancements in dating app technology and the metaverse, more daters are open to making connections that span different cities, countries and even continents.”

With Metaverse in the picture, singles are open to dating people from different geographical locations.

Standard Chartered forecasts ‘surprise’ Bitcoin downside after FTX collapse

Multinational bank Standard Chartered considers potential downside for Bitcoin in 2023 as the cryptocurrency ecosystem weathers the collapse of FTX.

The value of Bitcoin (BTC) is being touted to drop as low as $5,000 in 2023 according to Standard’s Chartered global research head and chief strategist.

As initially reported by Bloomberg, a note to investors published on Dec. 4 from the multinational bank’s chief strategist Eric Robertsen weighed up a potential drop in Bitcoin’s value correlated with a surge in physical gold.

Robertsen outlined prospective scenarios for 2023 that could see interest rate reversals from hikes in 2022, further cryptocurrency sector bankruptcies and negative sentiment toward the market.

This could include further downside for Bitcoin next year, with a 70% decline from its current market value while gold could see an upside of up to 30% to the $2,250 mark per ounce.

The closing months of 2022 have been tumultuous for the wider cryptocurrency ecosystem. The collapse of Sam Bankman-Fried’s FTX cryptocurrency exchange and hedge fund Alameda Research sent shockwaves through the industry in what has already been a tough year.

FTX’s bankruptcy proceedings have already led to collateral damage, with cryptocurrency lender BlockFi following in its footsteps due in part to “significant exposure” to FTX and Alameda and obligations that the defunct companies had with the former.

Related: Bankruptcy court told FTX and Alameda they owe BlockFi $1B, but it’s complicated

Meanwhile, cryptocurrency proponents have provided contrasting outlooks for the space in 2023. Renowned Venture capitalist and blockchain investor Tim Draper touted Bitcoin hitting $250,000 next year, highlighting his belief that the FTX fiasco would lead to greater decentralization, adoption of BTC and increased self-custody by users.

As Cointelegraph previously reported in late November, macro market analyst Henrik Zeberg also outlined a potential surge in the value of Bitcoin alongside other risk assets over the $100,000 barrier.

Hedge fund manager Mark Yusko also touted the potential start of Bitcoin’s next major bull run in the second quarter of 2023 as the ecosystem begins to accumulate BTC in anticipation of the next reward halving event.

Texas authorities object to Voyager’s disclosure statement in its current form

The Texas state authorities, SSB and DOB, argued that Voyager fails to explain the methodology used to calculate the average coin prices, among others.

The Texas State Securities Board (SSB) and the Texas Department of Banking (DOB) raised an objection in court against Voyager Digital’s disclosure statement, questioning the various methodologies and calculations used to estimate the fair market value of the bankrupt exchange’s crypto assets.

In a pleading filed with the United States Bankruptcy Court for the Southern District of New York, the attorneys for the SSB and DOB objected to the order approving the adequacy of Voyager’s amended disclosure statement. Voyager Digital filed for Chapter 11 bankruptcy in New York in July 2022, while proposing a recovery plan for investors.

The Texas state authorities argued that Voyager’s disclosure statement, which asserted that creditors might get a 70% return, fails to explain the methodology used to calculate the average coin prices, adding that:

“The Debtors (Voyager) have never been licensed by the SSB or the DOB and faces very large fines and penalties for operating without a license. FTX is also not licensed to do business in the State of Texas.”

The attorneys further highlighted that with the court that crypto exchange FTX offers a product similar to ‘Voyager Earn Program,’ a Voyager offering that has been subject to cease-and-desist orders from multiple states in the US.

As a resolution, the SSB and DOB seek the denial of Voyager’s disclosure statement in its current form. Moreover, it demands that Voyager discloses the methodology and calculations used to determine its fair market value for funds recovery.

On Oct. 5, FTX US secured the winning bid for the assets of Voyager. According to Voyager, the bid was made up of the fair market value of its crypto holdings “at a to-be-determined date in the future” estimated to be around $1.3 billion, along with $111 million in “incremental value.”

The hearing date for the case has been slated for Oct. 19 at the time of the writing.

Related: Senator Warren leads the charge against energy consumption claims on Texas crypto miners

On Sept. 30, the SSB, DOB and the Vermont Department of Financial Regulation objected to crypto lender Celsius’ plans to sell off its stablecoin holdings, arguing that the firm could use the resultant capital to resume operating in violation of state laws.

Celsius reached out to the United States Bankruptcy Court for the Southern District of New York, seeking permission to sell its stablecoin holdings, reportedly worth $23 million.