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Derivatives DEX dYdX beats out Coinbase’s spot markets by volume amid China FUD

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Decentralized derivatives exchange dYdX has seen a surge in trade activity as concerns surrounding a renewed Chinese crypto crackdown have circulated this year, with the decentralized exchange (DEX) now processing more volume than Coinbase’s spot markets for the first time.

According to CoinGecko, dYdX has facilitated more than $4.3 billion worth of trades in the past 24-hours, beating out Coinbase’s $3.7 billion in volume by nearly 15%. DYdX founder and former Coinbase employee Antonio Juliano celebrated the milestone in a Monday tweet.

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The surging growth for dYdX comes amid renewed concerns regarding the threat heavy-handed Chinese regulation could pose for the global crypto sector.

On Friday, Beijing intensified its crackdown on crypto assets by banning all digital currency transactions. The People’s Bank of China said in a statement that cryptocurrencies are “not legal and should not and cannot be used as currency in the market.” As reported by Cointelegraph, China has “banned” or caused FUD in the crypto space on 19 separate occasions since 2009.

In a tweet on Sunday, China-based crypto reporter Colin Wu noted a recent surge in demand for DEXs and other decentralized finance (DeFi) products among Chinese users, stating:

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“A large number of Chinese users will flood into the DeFi world, and the number of users of MetaMask and dYdX will greatly increase. All Chinese communities are discussing how to learn defi.”

In late June, one of China’s largest crypto exchanges, Huobi, banned domestic derivatives trading. The following month, Huobi closed its China-based exchange operator as pressure from Beijing escalated before halting all new registrations for Chinese users on Friday.

Over the past six months, dYdX has grown by 19,700% in terms of daily exchange trade volumes, which were just $22 million at the end of April according to CoinGecko.

Coinbase, comparatively, has remained relatively flat in terms of exchange volume growth over the same period with around 6%. Coinbase volumes did surge to an all-time high of $19 billion in late May when crypto markets were also at their peak.

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Wu also noted that other derivatives exchanges were seeing an uptick in Chinese registrations, stating “FTX registrations may also be on the rise. The Chinese community is sharing its registration link.”

DYdX offers a range of perpetual contracts on various crypto assets allowing traders to hold leveraged positions without using contracts with a fixed expiration date.

L2beat, which tracks data for layer-two protocols, is reporting that dYdX is currently second in terms of total market share with around 19% and $478 million in total value locked, an increase of 20% over the past seven days.

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In September 2019, Coinbase invested 1 million USD Coin (USDC) stablecoins into dYdX in what it called a USDC Bootstrap Fund. In June this year, dYdX raised $65 million in a Series C funding round led by venture fund Paradigm.

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Coinbase Pro lists two new altcoins and prices soar

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Coinbase Pro, the trading platform for the largest US cryptocurrency broker, Coinbase.com, listed two more altcoins on Wednesday (13), Rarible (RARI) and BadgerDAO (BADGER). Both cryptocurrencies had a high after the announcement, with emphasis on RARI, which is already with a gain above 40% in the last hours, according to data from Coinmarketcap. See the performance of altcoins.

Rarible (RARI)

Before being announced by Coinbase, the RARI token had already gone through a high of about 30%, almost hitting the $23 mark last Monday. After listing, altcoin progressed to $27.59, the week’s highest value so far. At the time of writing, RARI is trading at approximately $27, which has risen in the last 24 hours by around 40%.

As described by Coinbase, the altcoin Rarible is also a token issued on the Ethereum blockchain, whose function is to feed its platform of the same name. It is a network that allows you to create, receive and market NFTs

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BadgerDAO (BADGER)

BADGER, which had been gaining price since the beginning of the month, started to be worth more after listing on Coinbase. On Wednesday night, the currency reached US$40, but there was a correction and on this Thursday afternoon it is traded in the range of US$35, with an increase of approximately 13% in the last 24 hours. The cryptocurrency, however, is still far from reaching its highest price, which was US$ 85 in February this year.

BadgerDAO is a token issued on the Ethereum network that powers its autonomous decentralized organization of the same name. DAO is focused on bringing Bitcoin to the decentralized finance (DeFi) ecosystem in Ethereum and other blockchains, explains Coinbase.

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Coinbase Advocates for Special Separate Crypto Regulator, Suggests Displacing SEC

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Because of the SEC’s continuous witch hunt targeted at the crypto sector, Coinbase believes a separate regulator will be better. However, the SEC disagrees.

Major crypto exchange Coinbase wants the US Congress to create a separate special regulator for digital assets. The company says federal legislators should move to block the securities and exchange commission (SEC) from assuming control of the industry.

Coinbase has locked horns with US regulators – most notably the SEC – in recent months over compliance issues. SEC Chair Gary Gensler, is a known skeptic of digital currencies, particularly because they lack proper oversight. Furthermore, Gensler argues that several crypto exchanges trade coins that do not comply with investor protection laws. Unsurprisingly, he opposes the idea of a separate crypto regulator and is discouraging lawmakers from doing so.

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As a result, leading crypto exchange Coinbase plans to publicly release a document with proposals for crypto regulation. It opines that crypto market players are not clear on which federal agencies should oversee which particular assets. Furthermore, the exchange emphasized that its proposal takes into account feedback from policymakers as well as crypto’s unique traits.

Coinbase and SEC Differ on Proposed Crypto Regulator Idea

Coinbase’s chief policy officer, Faryar Shirzad, acknowledged that the exchange does not expect its proposal to kick into effect immediately. However, the crux of Coinbase’s move for a separate regulator is to induce conversations around the matter and create more crypto awareness. In Shirzad’s words on suggesting the next plan of action:

“…what they can do is evolve the debate in ways that are helpful for everyone, including members of Congress who are increasingly focusing on this area.”

Gensler, however, does not agree even a little bit. Speaking at a congressional hearing which took place last week, the SEC Chair said:

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“I would say, cautionary note: If Congress were to carve something out of the securities law, it could also undermine 90 years of economic success and undermine the 7,000-plus issuers…”

Both the SEC and Coinbase further traded soundbites in statements issued for and against the idea of a separate crypto regulator. In addition, Coinbase’s proposal comes amid the Biden administration actively ramping up oversight of crypto assets. The said assets also include stablecoins whose value is in line with the US dollar.

Coinbase’s Proposed Crypto-Lending Scheme

Back in September, Coinbase CEO Brian Armstrong tweeted a series of messages alleging that the SEC was investigating its crypto-lending program. The Commission asked Coinbase to desist from going forward with what it perceived as an unregulated initiative. Furthermore, it threatened to take legal action against the exchange if it did not heed the regulator’s warnings. Armstrong criticized the SEC’s actions, branding them as veiled intimidation tactics. In addition, the exchange’s CEO suggested other crypto companies already offer similar programs. Armstrong also accused the SEC of viewing Coinbase’s crypto-lending initiative as a violation without providing a reason.

“They refuse to tell us why they think it’s a security, and instead subpoena a bunch of records from us (we comply), demand testimony from our employees (we comply), and then tell us they will be suing us if we proceed to launch, with zero explanation as to why,” said he.

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Coinbase CEO Unveils Crypto Regulation Proposals, Says They Can Ensure US Remains Global Financial Leader

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Coinbase chief executive officer Brian Armstrong is circulating a crypto regulation proposal that he believes will ensure that the US remains a global financial leader.

The exchange is launching the Digital Asset Policy Proposal (dApp) to anticipate the evolution of a blockchain-driven and decentralized internet and the emergence of cryptocurrencies as a new asset class.ADVERTISEMENT

Armstrong tells his 867,000 Twitter followers that the proposal aims to help the United States retain its status as a financial leader in the face of technological change.

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“Web3 is upon us and represents an enormous opportunity for America to not just retain its status as a financial hub, but also to encourage innovation, create jobs, and grow the economy.

We can do this all with sensible regulation that protects consumers and creates a level playing field if we work together.”

Armstrong says that the dApp represents the views of government stakeholders, as well as those of individuals within the crypto space and academia. Coinbase conducted in-depth meetings with representatives from multiple industries before drawing up the proposal.

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According to Coinbase chief policy officer Faryar Shirzad, the dApp primarily consists of four pillars:

  1. Regulate digital assets under a separate framework
  2. Designate one regulator for digital asset markets
  3. Protect and empower holders of digital assets
  4. Promote interoperability and fair competition

Shirzad says,

“Our goal is to thoughtfully and respectfully engage in the public conversation about the future of our financial system. That conversation, we believe, requires recognition of two concurrent and broad developments:

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1. The blockchain-driven and decentralized evolution of the internet

2. The emergence of a distinctive asset class that is digitally native and empowers unique economic use cases

Our hope at @Coinbase is that this framework will animate an open and constructive discussion regarding our shared economic future.”

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