Institutional Digital Asset Newsletter - July 2020

Newsletters Jul 26, 2020

Once a month, we summarize the best crypto news for Institutional Investors

🚀 Trakx will imminently open its exchange for Digital Asset Indices to the public after successfully launching in private beta with some institutional clients - Stay tuned!

Trakx enables its clients to trade sophisticated digital asset strategies and indices on a secure and compliant platform. We hope that you will love trading with us, and we are looking forward to getting your feedback on the user experience and strategies/indices that we released. Please send your comments to [email protected]

INVESTING

According to Bitooda and Fidelity, China accounts for only 50% of global Bitcoin mining capacity, and the U.S. 14%.

The data is in sharp contrast with earlier findings from the University of Cambridge Centre for Alternative Finance (CCAF), which put China’s share of the world hash rate at 65% and about 7.2% for the U.S.

In the July 15 report, produced with support from asset manager Fidelity Investments, Bitooda says it reviewed several public sources, including “confidential conversations” with miners to determine the areas with the most BTC mining capacity.

DeFi Token Rally Pushes Aave (LEND), and Synthetix (SNX) Market Cap Above Maker (MKR)

Aave and Synthetix Network both overtook MakerDAO’s Maker by market capitalization as the DeFi sector continues to surge.

This trend is confirmed by the exceptional performance of the Trakx Decentralized Exchange index which outperformed all other strategies this month.

Decentralized Finance (DeFi) tokens continue to make drastic moves on the price charts, compensating for Bitcoin’s volatility which has recently hit a three year low. Earlier this week, Aave (LEND) and Synthetix Network (SNX) token briefly surpassed MakerDAO’s (MKR) token as each rallied to $0.375 (+20%) and $4.09 (+10%) respectively in 24 hours.

However, the ‘flippening’ was short-lived and MKR has now reclaimed its position above LEND, SNX and Compound (COMP) and currently sits at number 28 on CoinMarketcap with a market capitalization of $453 million.

The switch-up likely occurred as LEND price corrected sharply last Tuesday, dropping 16.5% to $0.313.

Lend, Synthetix and Maker Dao market capitalization
Lend, Synthetix and Maker Dao market capitalization

LEND, SNX, MKR Market Capitalization. Source: CoinMarketCap

NEW ASSET OVERVIEW

Balancer & BAL governance tokens

Balancer is a n-dimensional automated market-maker (AMM) built on Ethereum. It allows anyone to create or add liquidity to customizable pools of tokens and earn trading fees. Instead of the traditional constant product AMM model, Balancer’s formula is a generalization that allows any number of tokens in any weights or trading fees. Instead of paying fees to portfolio managers to rebalance your portfolio, you collect fees from traders, who continuously rebalance your portfolio by following arbitrage opportunities.

Balancer can handle a few types of pools: 1) Private Pools where the only owner can contribute liquidity and has full permissions over the pool, being able to update any of its parameters. 2) Shared Pools where the pool’s tokens, weights, and fees are permanently set and the pool creator has no special privileges. Anyone may add liquidity to shared pools and ownership of the pool’s liquidity is tracked with a specific token called BPT - Balancer Pool Token. 3) Smart Pools which are a variation of a private pool where the controller is a smart contract, allowing for any arbitrary logics on how pool parameters can be changed. Smart pools may also accept liquidity from anyone and issue BPTs to track ownership.

Balancer Labs, the company behind the protocol released a governance token called BAL.

PLATFORM

REGULATION

French Central Bank Picks Accenture, HSBC and Others for Digital Euro Pilot

The central bank of France is about to start several experimental trials centering the digital euro. Banque de France has picked eight potential candidates to test the integration of a CBDC for interbank settlements, according to the announcement published earlier this week. The list of approved participants includes mainstream juggernauts like Accenture, HSBC, and Societe Generale, as well as smaller crypto-focused players like Seba Bank and LiquidShare.

PEOPLE MOVE

Gary Rebibo

CMO @Trakx