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Chris Giancarlo: U.S. risks becoming ‘backwater’ without central bank digital currency

One of the few high-profile public officials to have served under both the Obama and Trump administrations, Chris Giancarlo is a former Wall Street executive-turn-regulator who is widely-respected by nearly all parties on Capitol Hill. As the former Chairman of the Commodities Futures Trading Commission, however, his latest venture, the Digital Dollar Foundation, might well test his soft touch with politicians.

The former regulator is now leading the Foundation towards five pilot programs set to launch this year, part of a broader effort to help the United States regain the lead in a race against China towards a functioning CBDC.

According to Giancarlo, however, the US’s priorities when it comes to a CBDC shouldn’t merely be jingoistic:

“What’s very clear, [is] that China intends their digital yuan to be an instrument of state surveillance. […] And this is why it’s one of the reasons why the digital dollar project, we’re so animated, because we feel that our new mission is to make sure central banks wake up to this and the US Fed wakes up to this, that these social values that got us here, the rule of law, a free capital markets, free enterprise, zones of individual economic privacy, are ingrained in a new digital future of the US dollar, and that we don’t allow ourselves to be taken in by what China’s doing and match that state surveillance approach.”

However, the race to a CBDC isn’t merely about maintaining current US values, but also potnetially about unlocking new forms of smart contract-based value for the wider population. 

“The notion of a digital currency, whether it be sovereign and non-sovereign, tied to smart contracts, allows money to solve the old problem of being able to move it in place, i.e. moving around the globe as easily as you could send a text message, but also move it in time. Heretofore, money was a temporal thing, but with a smart contract you can say, I want to program my money today to go to my one grandchild in the future once they graduate college and all of those contingencies can be programmed in. […] With a programmable digital currency, you can program it today to move around the globe in space, but move around the globe in time. And that is such, I think, such a powerful construct.”

Ultimately, this work is part of an effort to ensure that America maintains technological supremacy. 

“You can’t stop the march of technology in time, and if you do, you become a backwater. We in the United States have always been open to innovation and we must be open to this innovation as well. In a prudent way, in a way that’s in correspondence with our society that expects investor protections and a role for government. […] And it’s one that I’m very excited to be involved in.”

Watch the full interview here:

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Chris Giancarlo: U.S. risks becoming \’backwater\’ without central bank digital currency

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3 reasons why Ethereum may underperform Bitcoin in the short-term

Ether (ETH) price outperformed Bitcoin (BTC) by 173% from March 28 to May 15. The incredible bull caused the token to reach a $4,380 all-time high. However, as cryptocurrency markets initiated a sharp drop on May 12, the trend started to reverse, and since then, Ether has underperformed by 25%.

Some might say it is a technical adjustment after a strong rally. While this partially explains the move, it excludes some critical factors, including the fast advance of smart-contract network competitors and Bitcoin being adopted as an official currency for the first time.

Ether / Bitcoin price at Binance. Source: TradingView

Notice how the ETH/BTC ratio rallied again on June 8, reaching 0.77 despite Ether’s price remaining 36% below its all-time high and ranging near $2,800. To understand what could have been driving the ratio, analysts need to analyze Ether and Bitcoin price drivers separately.

Mike Novogratz may have been misinterpreted in his interview

Ether’s bull run potentially got an extra leg due to intense praise from institutional investors. Traders could have picked up a sense of urgency, known as FOMO, and promptly shifted their Bitcoin exposure towards the leading altcoin.

On May 13, New Yorker magazine published an interview with Mike Novogratz, the founder, and CEO of Galaxy Digital. In the conversation, Novogratz said:

“All of a sudden, you have decentralized finance and NFTs both on Ethereum at the same time roughly, with wild accelerating growth.”

Novogratz was then questioned on how much higher Ether could reach, to which he answered:

“You know, it’s dangerous to give predictions on the highs. But could it get to $5,000? Of course it could.”

While an Ethereum holder might have interpreted it as a prediction, others could have understood it as a wild guess, likely depending on general crypto market conditions.

However, roughly a week later, a report from Goldman Sachs revealed the global investment bank believed that Ether had a “high chance of overtaking Bitcoin as a dominant store of value.” Interestingly, one of the main quotes in the report was directly from Novogratz’s interview with the New Yorker.

At its peak, Binance Chain controlled 40% of DEX volume

While Ethereum has kept its 80% dominance on net value locked in decentralized finance (DeFi) applications, Binance Smart Chain (BSC) has reached a 40% market share on DEX exchanges.

PancakeSwap DEX daily volume vs. top 10. Source: DeBank

The successful growth of the DeFi industry and non fungible token (NFT) markets caused intense congestion on the Ethereum network, raising median fees to $37 in mid-May. That bottleneck triggered an activity exodus to competing networks, and PancakeSwap was best positioned to capture that flow.

Related: Here’s why one analyst says Bitcoin will outperform Ethereum in the short term

To make things worse, important DeFi projects expanded to Binance Smart Chain, including yield aggregator Harvest Finance and decentralized exchange aggregator 1inch. Investors quickly realized that the trend could continue as the competing smart-contract network provided an easy solution for dApps looking for cheaper alternatives.

No country is adopting the ‘Ethereum standard’

Bitcoin might have had a subpar performance over the past 30 days because it has failed to break the $42,000 resistance multiple times. However, a major milestone was achieved when El Salvador became the first country to make Bitcoin legal tender on June 12.

After the Central American country made the decision law, a handful of other Central and South American countries began discussing the advantages of taking a similar path.

Ethereum is undertaking a redesign that will change the issuing rate and how entities get paid to secure the network by moving away from the Proof of Work model. Meanwhile, Bitcoin is making sure that every upgrade is backward-compatible and maintaining its strict monetary policy.

That is the main reason why Ether will not outperform Bitcoin over the next 12 months, or at least until there’s a better understanding of how Ethereum network dominance of smart contracts will be.

Professional investors avoid uncertainties at all costs, and cryptocurrency markets already present plenty of that. There’s just no reason for institutional investors to ignore the risks while competing networks eat Ethereum’s lunch.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

3 reasons why Ethereum may underperform Bitcoin in the short-term

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Possible Yearn rival Convex Finance passes $1 billion in total value locked

While much of the market reels from a devastating pullback that has dragged DeFi’s closely-watched total value locked (TVL) figure down from all time highs, one protocol is shrugging off the macro weight and surging up the TVL leaderboard. 

Ethereum-based Convex Finance ($CVX) cracked a billion dollars in TVL earlier today, rising as high as $1.14 billion and briefly cracking the top-20 by size, per DeFilama.

Convex team lead “c2tp” told Cointelegraph in an interview that the team has been overwhelmed by the support.

“We are blown away with the amount of support our platform has received. We’re very grateful for everyone who shares our vision. The community getting the word out has been the major contributing factor, as well as a show of support from the Curve team,” they said.

Convex is designed to be an optimizer for the Curve protocol, a platform that enables swaps of similar assets such as between different stablecoins or ETH and Lido’s staked ETH. Its CRV token has a timelock functionality, where users stake CRV for four years in exchange for veCRV, which allows users to “boost” the rewards for staking in Curve pools.

“We want to extrapolate the complex things away, like how much veCrv is needed to boost how much liquidity. But we also want to be open enough to show everyone what’s going on behind the scenes and the benefits we provide,” said c2tp of Convex’s services. “On top of veCrv to liquidity balance, locking a token for four years can be a big step for most people. We hope our system gives confidence in the value of our tokens so that you can join the ecosystem while still remaining liquid.”

The launch has not been without drama, however. Some observers have claimed that because Convex optimizes Curve positions the project is a threat to Yearn.Finance, whose yield vaults rely heavily on Curve.

However, c2tp rejected this notion, saying that Yearn and Convex compliment each other in what’s ultimately a positive-sum DeFi ecosystem:

“We don’t really see it as direct competition. There are different platforms with different goals. There is also a lot to gain when platforms integrate with each as part of the larger defi system. We encourage anyone to use what we have to offer as well as build on top. Defi is not a winner takes all, but something that becomes stronger as all the pieces fit together.”

Likewise, a Yearn representative dismissed the notion of the protocols doing battle with one another, noting that a large portion of Convex’s TVL is delegated by Yearn. 

“We love to see it,” said Weaver, a member of Yearn’s growth team of Convex’s success. “Many in crypto spend their time looking for ways to pit tribes against each other, but zoom out today and you see 19M additional veCRV boosting Yearn vaults, thanks to Convex. You asked if this was a vampire attack on Yearn. I don’t know what the opposite of that is, but this new lego is pumping boosties into Yearn.”

Possible Yearn rival Convex Finance passes $1 billion in total value locked

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Crypto industry brass explains harnessing renewable energy could help BTC miners

The energy consumed by mining — the process that keeps Bitcoin’s blockchain running — has been an increasingly popular topic of discussion in recent weeks.

On Friday, CNBC posted an interview with SUKU CEO Yonathan Lapchik, during which he explained the Bitcoin mining scene as it relates to renewable energy. The interviewer noted Lapchik previously claimed that 75% of Bitcoin mining comes from renewable energy.

“We think that 75% is an actual figure,” Lapchik told CNBC, “The miners are truly incentivized to use renewable energy.” Turning his thoughts to electric car-maker Tesla, which recently announced it would no longer accept Bitcoin for purchases due to environmental concerns, Lapchik said “It’s surprising that Elon didn’t consider that before getting into the space, before accepting Bitcoin as a payment mechanism for Tesla.”

Tesla opened its doors to payments via Bitcoin by United States clientele back in March. The move went public following the car company’s purchase of $1.5 billion worth of BTC, announced in February.

Musk, however, recently stated disapproval of the fossil fuel energy Bitcoin mining calls on, via a Tweet on Wednesday. He also discontinued payments to Tesla in BTC, albeit seemingly a temporary move until Bitcoin mining reaches satisfactory energy usage levels.

“Really the data has been there forever,” Lapchik said of the 75% number. “We’ve been proving over and over and over that that’s a real case for miners in the Bitcoin network.”

Crypto industry brass explains harnessing renewable energy could help BTC miners

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Alpha Homora defies market slump, bolsters TVL and token price on v2 relaunch

After a rocky first quarter, decentralized finance (DeFi) platform Alpha Homora announced the relaunch of its v2 leveraged yield farming program today — and so far both traders and users are celebrating as both total value locked (TVL) and ALPHA token prices soar. 

The version 2 of the platform, which allows for leverage up to 7x on popular yield farming positions on protocols such as Sushi, Curve, and Balancer, notably had to shut down to new positions after a devastating hack in February. The protocol suffered $37 million in losses, which counts among the most devastating exploits in DeFi history.

However, the relaunch so far has gone swimmingly by multiple metrics. The ALPHA token — which underwent a revamped tokeneconomic design during the downtime — is up 11.1% to $2.28 on the day, and TVL has increased by nearly $100 million since the relaunch to a total of $675 million.

It now remains to be seen how long the protocol will remain stable. In addition to the February exploit, the platform was tied to Rari Capital’s $11 million loss earlier this week, though that particular exploit was due to no fault on Alpha Finance Lab’s part. 

The relaunched v2 also came with a new set of audits, but ultimately the greatest test of a DeFi protocol is time — the longer it’s survived scrutiny from would-be exploiters, the more users can trust its longevity.

Some observers are additionally off-put by Alpha’s unusual model, which has little precedent in Tradfi. However Leo Cheng of C.R.E.A.M. Finance, whose Iron Bank protocol-to-protocol lending platform enables v2’s leveraged yield farming, argued in an interview with Cointelegraph that if flash loans can be a key cog in DeFi’s capital efficiency, leveraged lending is a logical next step.

By nature, says Cheng, a smart contract “doesn’t quite care, and it doesn’t quite see the borders with the smart contract projects” with regards to where funds are coming from. As long as a transaction will end with the various protocols involved in the green, the transaction will go through.

Alpha Finance Labs did not respond to multiple requests for comment.

Alpha Homora defies market slump, bolsters TVL and token price on v2 relaunch

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