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This Coinbase-backed Startup Lets You Earn Interest on Your Cryptocurrency Holdings



Coinbase’s new venture capital fund has announced a strategic investment in Compound, a startup that is building money market accounts for cryptocurrency investors.

Compound is the first project to receive venture funding from Coinbase as part of the company’s new efforts for fostering blockchain innovation. As CCN reported, Coinbase announced the new venture fund to incubate early-stage startups in the exploding industry.

Coinbase’s funding is part of a larger $8.2 million seed funding round, which pools other backers including Bain Capital Ventures, Andreessen Horowitz and Polychain Capital, with participation from Transmedia Capital, Compound Ventures, Abstract Ventures, Danhua Capital.

While other coin and token projects have debated ways to generate interest or dividend income, Compound has run with the idea. In a blog update, Salil Deshpande, Managing Director at Bain Capital Ventures, he states that current lending solutions for cryptoassets “are not good enough: they are either centralized and have substantial counterpart risk, or require robust order books for each type of cryptoasset, which generally do not exist.”

Compound’s mission is to put cryptoassets to work that now “sit idle on exchanges and in wallets, yielding no interest,” according Founder Robert Leshner in a blog update about the funding announcement.

Leshner continues:

“…when Compound launches it’s [sic] first money markets on the Ethereum blockchain, individuals, institutions and applications will earn interest on Ether, stablecoins and utility tokens, with complete liquidity — similar to the overnight rate for dollars and government currencies.”

The core technology behind Compound is a decentralized blockchain infrastructure that is centered around a series of open-source smart contracts. As part of the smart contracts, the interest rates for each asset adjust dynamically in response to the borrowing demand for that asset. An algorithm makes these adjustments in real time, according to the project’s whitepaper.

Source: Compound

Compound hopes to attract borrowers such as hedge funds, sophisticated speculators, and other Ethereum applications.

As Compound’s technology aligns closely with Coinbase’s entrenched status as a company that is revolutionizing traditional finance, it is no small wonder why it has received the firm’s backing. The company’s target market of institutional investors is in line with Coinbase’s recent rolling out of a suite of tools for only these clients, as CCN reported on May 15.

Compound’s core technology also eases reporting, since each money market is transparent, auditable, and completely predictable. Coinbase itself has also worked hard on institutional-grade reporting as part of efforts for becoming an SEC-regulated brokerage.



Coinbase Pays $30,000 for Bug Report



Cryptocurrency exchange Coinbase offered a payout of $30,000 for a bug reported on its platform through the Bug Bountry Program on the portal Hackerone.

According to a report published by The Next Web, the bug was fixed by the exchange, however, the spokesperson from the company was unable to provide details of what the bug constituted. While the vulnerability report is not available to the public, the bounty reward shows that the potential bug may have been quite severe.

On HackerOne, Coinbase has a four tier reward system for bug reports. It starts at as low as $200 for least critical bugs, $2000 for medium critical bugs, $15,000 for high and $50,000 for critical bugs. The exchange says, “The Bug Bounty Program directly serves Coinbase’s mission by helping us be the most trusted way to use digital currency. In that spirit, the scope and philosophy of the program aim to safeguard two highest priority assets (“Sensitive Data”) : Digital and fiat currency balances and Customer information

The Bug Bounty Program scope covers all software vulnerabilities in services provided by Coinbase.”

It added, “A valid report is any in-scope report that clearly demonstrates a software vulnerability that harms Coinbase or Coinbase customers. A report must be a valid, in scope report in order to qualify for a bounty. Coinbase will determine in its sole discretion whether a report is eligible for a reward and the amount of the award.”

Recently, Coinbase was in the news when it announced its users would now be able to backup their wallet keys in encrypted format to Google Drive or iCloud. This can come handy in case a user lost access to their laptop, smartphone or any other device in which the user had stored the keys.

At the time the exchange had said, “Starting today, you can now backup an encrypted version of your Coinbase Wallet’s private keys to your personal cloud storage accounts, using either Google Drive or iCloud. This new feature provides a safeguard for users, helping them avoid losing their funds if they lose their device or misplace their private keys.”

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Coinbase Exchange Users Can Now Withdraw Bitcoin Cash Fork BSV



Coinbase, the largest US-based cryptocurrency exchange, is finally allowing users to withdraw bitcoin Satoshi vision (BSV) – the cryptocurrency created in a hard fork of the bitcoin cash blockchain on Nov. 15.

On that day, bitcoin cash was scheduled to implement upgrades to its blockchain, as it is programmed to do every six months, but contention ultimately led developers and miners to adopt two different incompatible versions of the software: bitcoin cash ABC (BCH) and BSV, which now operate as separate cryptocurrencies with separate values.

Coinbase users who held bitcoin cash in their accounts at the time of the fork were given BSV coins at a 1:1 ratio, and the exchange notified its users today, three months after the fork, that their BSV balances could now be accessed.

Since Coinbase does not support BSV trading at this time, users will need to export their BSV balance to an external wallet if they wish to trade it for another cryptocurrency or for fiat.

In the email, the exchange made note of the circumstances and provided instructions on how to do so:

“Coinbase does not support purchases or sales of BSV, so you cannot sell your BSV for fiat currency on Coinbase. You may send your BSV balance to an external wallet following instructions here.”

On Nov. 20, Coinbase announced the competing bitcoin cash blockchain called bitcoin cash ABC would retain the BCH ticker and compatibility with Coinbase’s trading infrastructure.

At the time of writing, BSV is trading across exchanges at an average price of $62.58 while its competitor BCH costs nearly twice the price at $120.23, according to pricing data from CoinDesk.



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Coinbase Just Paid a $30K Bounty for the Discovery of Critical Bug



San Francisco-based cryptocurrency exchange desk Coinbase has just forked out a $30,000 bounty to the finder of a critical bug in its systems.

As reported by The Next Web, the bounty is the latest to be posted on vulnerability coordination and bug bounty platform HackerOne. Previously a large number of smaller bounties, mostly in the range of $100–$1,000, have been paid out, but on Feb. 12 what appears to be the largest bounty on the site so far was logged.

TNW’s Hard Fork said Coinbase had confirmed that the vulnerability has since been fixed, but would not provide specific details of the issue.

Based on the severity of the code flaw found, Coinbase offers rewards in four tiers: $200 (low), $2,000 (medium), $15,000 (high) and $50,000 (critical). Tuesday’s bounty appears to sit somewhere between high and critical as a result.

Coinbase states on the HackerOne website:

“The Bug Bounty Program directly serves Coinbase’s mission by helping us be the most trusted way to use digital currency. In that spirit, the scope and philosophy of the program aim to safeguard two highest priority assets (“Sensitive Data”): Digital and fiat currency balances [and] customer information.”

The program allows the public to report for rewards on “all software vulnerabilities in services provided by Coinbase,” it adds. The exchange grants bounties based on severity of the bug found, judging severity by two factors: impact and exploitability.

With crypto companies and protocols under constant attack from increasingly sophisticated hackers, finding bugs in systems is a critical endeavor.

Ethereum bug bounty websites like Gitcoin and Bounties Network have seen increased use of late, and the growing opportunity for rewards via white hack hacking success is even proving to be a way out of poverty, according to a CoinDesk report from last year.

No web service using crypto is immune from the threat of hacks and even dark markets have been offering bounties to those that find provable code errors with potential impact.

Checking code image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by astrict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.


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