This situation occurs just 5 months after DeFi platforms reached USD 1,000 million deposited. Yield farming seems to be the main reason for this increase.

DeFi platforms, which emulate the traditional banking system, exceed a total of capital locked as collateral of USD 2.15 billion. This new mark comes with new leadership since Compound takes MakerDAO’s first place as the DeFi platform with the most funds stored.

Just five months after having exceeded the USD 1 billion mark, the amount of cash available for loans on DeFi platforms reaches a new high, doubling the previous value. The technical term of this type of capital is total value locked (TVL).

Different analysts consider that this growth on DeFi platforms is occurring as a consequence of a phenomenon known as yield farming.

Yield farming arises from a condition that DeFi platforms like Compound have. As an incentive for more participants to deposit their money, DeFi platforms offer reward tokens that they issue and generally use for governance. This would be a stimulus for all those users who provide them with liquidity.

The existence of DeFi platforms in the market has a business model that, in principle, simulates that of a traditional bank. In other words, they earn money by lending money or, in this case, cryptocurrencies, while borrowers accrue interest on their loans.

However, they do have one major difference from traditional banks. By issuing their tokens to reward those entities that give them liquidity, DeFi platforms are issuing money that is, inflating the market.

In the case of Compound, users who deposit cryptocurrencies for collateralized loans receive as a reward the allocation of COMP tokens, in an amount proportional to the money that they have mobilized. Something similar occurs with users who apply for loans.

Opinions about DeFi Platforms

In recent days, some experts have given their opinion on how people have been using the favorable conditions that DeFi platforms offer to obtain a 100% annual interest rate.

Dulce Villarreal, blockchain developer at IOV Labs, said that the Decentralized Finance platforms that currently exist are only for the 1% of the 1% of users. She believes that they do not offer financing solutions for the common user, but that they come from the rich to give them tools to become richer.

These opinions are in addition to many others that are present in the ecosystem. For instance, Messari analyst Jack Purdy notes that this incentive mechanism can theoretically compare to the distribution of capital among a company’s shareholders. As the use of the DeFi network increases, so does the value of the native token. In turn, this motivates the use and continuation of the cycle path.

However, users should remember that when artificial incentives inflate the market, their money may be in a bubble and they risk losing it. Therefore, they need to increase their knowledge on the subject to make their transactions on DeFi platforms more securely.

By Alexander Salazar

Kiyosaki considers that gold and silver are the money that God created and that Bitcoin is the money of people. Pompliano believes that there will not be competition between types of money but between monetary policies.

Morgan Creek Digital co-founder Anthony Pompliano spoke with renowned financial writer and lecturer Robert Kiyosaki on “The Rich Dad Radio Show”, which the latter hosts. In the conversation, they agreed that all the money of the future will be digital, but Bitcoin will continue to have advantages.

Digital money, Pompliano explained, is faster and cheaper to produce than paper money. He believes that in the future there will not be competition between digital and non-digital currencies but between monetary policies. When the US dollar becomes digital, its monetary policy will continue to be inflationary. However, Bitcoin will continue its predefined issuance program.

For his part, the author of “Rich Dad, Poor Dad” said that the current banking system, which the US Federal Reserve made centralized and controlled by the government, is “communist”. On the contrary, he stressed that the State does not control Bitcoin, gold, or silver. He explained that this reason leads him to promote them.

It is not the first time that Kiyosaki has expressed himself in these terms. In April, he said that humanity is undergoing the worst crisis in history and that Bitcoin is a good alternative to the centralized system.

Furthermore, in his conversation with Pompliano, Kiyosaki said that he considers gold and silver as the money that God created while Bitcoin is the money of people. Its pre-established issuance policy, unlike that of fiat currencies, leads him to think in that way.

Pompliano and Kiyosaki agreed that Bitcoin, as well as gold and silver, has solid fundamentals. The former also thinks that Bitcoin has advantages over the two precious metals as it is transparent and verifiable since it is possible to know the existing amount, the amount issued each day, and the amount that will exist in total.

Pompliano mentioned that the asset that people use as a haven may vary due to generational issues. However, it must have sound monetary principles, which he believes that the US dollar does not have.

Besides, he lamented that most people do not understand how money works. He said that if they did, they would know that the US dollar will become less valuable over time due to its constant issuance. Instead, he explained that Bitcoin has the opposite policy and should become more valuable over the years.

The renowned bitcoiner was more accurate on this subject and remained firm to a prediction that he had made one year ago. He said that he believed that Bitcoin would be worth more than USD 100,000 by the end of 2021. However, he reminded listeners that any investment has risks and invited them to do their research.

Kiyosaki consulted him about the new cryptocurrencies that emerge every day, to which Pompliano explained that only a small number of them purport to be money. Instead, he said that most of them seek to use blockchain technology in very strange ways.

For this reason and the fact that it is the first decentralized, ownerless, transparent currency with a predefined issuance, he still believes in Bitcoin’s superiority. He stated that there will never be a separation between money and state if Bitcoin is not successful.

By Alexander Salazar

Chainlink and Cardano are the most prominent of the decoupling of altcoins from Bitcoin. Bitcoin’s dominance has decreased by around 3% so far in July.

For several months now, Bitcoin has been in a lateralized market, a situation that occurs when the price of the cryptocurrency does not show a clear bullish or bearish trend, fluctuating in a certain range. Since the beginning of May, days before the third halving, the price of BTC has fluctuated between USD 9,000 and USD 10,000.

Meanwhile, the scenario in the altcoin market presents some price variations, with a greater bullish bias than BTC in the past few days. This occurs although the price of cryptocurrencies in the market usually follows the trend of Bitcoin.

The coupling of altcoins with BTC is due to the dominance that the pioneering cryptocurrency has always exerted in the market. However, this dominance has recorded a decline in recent months. Consequently, Bitcoin is currently mobilizing 64% of the total cryptocurrency market capitalization, after having controlled over 70% in early 2020, according to data from TradingView.

In this way, while Bitcoin has only gained almost 29% so far in 2020 and has remained stagnant at the threshold of USD 9,000 for three months, some altcoins are breaking their resistance levels, leaving the market lateralization.

Some Highlights of Chainlink and Cardano

Among the altcoins with significant increases are Chainlink (LINK) and Cardano (ADA), in addition to Stellar (XLM), Siacoin (SC), Stratis (STRAT), NEM (XEM) and Dogecoin (DOGE).

Of this group of cryptocurrencies, the most prominent is LINK, which achieved an appreciation of more than 30% between July 6^th and 8^th. The twelfth-largest cryptocurrency by market value reached a record high of USD 6.47 on July 8^th. In this way, it breaks the lateralization that had kept its value between USD 2.40 and USD 4.80 since April 2020.

This decoupling between BTC and LINK is the result of increased use of the token in the decentralized finance (DeFi) space, according to Vance Spencer, one of the biggest private owners of Chainlink and co-founder of Framework Ventures.

Likewise, the platform’s official Twitter account has announced at least two partnerships with DeFi companies every week in the last two months. Chainlink is a platform that bridges smart contracts and non-blockchain services such as bank accounts and data servers.

Cardano is another example of the decoupling of altcoins from Bitcoin. The cryptocurrency, which ranks sixth by market capitalization on the CoinMarketCap list, has been at the top of the most appreciated cryptocurrencies in recent weeks.

The price of ADA has gained more than 260% so far in 2020, making a significant jump since May, when the announcement of the future update to Cardano’s mainnet, Shelley, came.

In the context of altcoins growth, Bitcoin is marching at the same pace as the S&P index, and global stock markets feel concerned about COVID-19 threatening economic recovery. For its part, gold is approaching its all-time high in nine years, due to the reception of monetary flows that make users see it as a haven.

By Willmen Blanco

The implementations cover various branches such as cybersecurity, health, and data management. With these grants, the European Commission seeks to implement the projects among small and medium-sized companies.

Europe, through the European Commission and its Horizon 2020 acceleration program, is investing EUR 180 million in blockchain projects, 19 of which are from Spain. The proposals cover multiple areas of work such as cybersecurity, health, data management, IoT, and privacy.

From Valencia to Madrid, passing through Barcelona, Spanish projects are among the most visible and recognized on the continent. The grants seek to provide a boost for their implementation among small and medium-sized companies.

A report by the European Commission highlights that the solutions are already in their implementation or development phase. The funding comes from a variety of sources including the Horizon Awards, applications to their calls, and Blockchers’ competition.

The list of beneficiaries comprises multiple projects in different categories, according to their type of application. It includes the privacy initiatives PIMCity, Decode, Ghost, and PoSeID-on. Regarding the world of cybersecurity, it mentions the Phoenix project, SDN-microSENSE, Trapeze, and Soter.

Regarding the banking and digital finance branch, the projects that have benefited are Infinitech and Critical-Chains. Other proposals include BD4OPEM (information on electrical energy) and D-Cent (politics and citizen participation). Concerning projects that aim to verify copyright, traceability, and information, it mentions Orvium, Vottun, and HOP Ubiquitous.

Among the firms that have received approval are Bettergy (purchase of photovoltaic energy), Vestigia Blockchain (water consumption and crops), BodyPass (data from the health sector), and ChangeTheBlock (preparation of smart contracts).

The funding for each project varies but ranges from EUR 16,000 to EUR 5 million. In some cases, the implementation periods reach 36 months, with solutions already in operation. At the continental level, more than 50 blockchain projects have already received funding.

The European Commission has mainly supported European blockchain projects related to cybersecurity (26%), Internet of Things (22%), health care (19%), and applications in the industrial sector (9%).

New Trust Paradigms

Regarding the support that solutions with blockchains receive from the European Commission, the organization stated in August 2019 that distributed records represent new paradigms.

The entity has also been active in creating concept tests, pilot projects, and initiatives to explore and understand the legal, regulatory, policy, research, and funding implications of distributed ledger technologies (DLT).

The organization intends to support projects that not only develop technology but also contribute to the social sector. In June 2018, the European Commission awarded the best blockchain-based solutions in this field with EUR 5 million.

The Horizon 2020 program is one of the largest acceleration initiatives in Europe, with a fund of more than EUR 80 billion. Since 2014, the European Commission has allocated resources to projects of a different nature, not just those related to blockchain technology.

The organization set aside that large amount of capital to ensure Europe’s global competitiveness to boost economic growth and job creation. Between 2014 and 2016, the commission received more than 115,000 eligible proposals requesting funding, for a total of EUR 182 billion.

By Willmen Blanco

The new FATF presidency would raise regulations but would bring new airs of adoption. The organization aims for a digital transformation against money laundering and terrorist financing.

The Financial Action Task Force (FATF) inaugurated its president and, along with it, a renewed regulatory push. The new administration, whose leader is Marcus Pleyer, from Germany, aims at a digital transformation to fight the misuse of Bitcoin and other cryptocurrencies in money laundering or terrorist financing (AML/CFT).

He is a senior executive at the German Ministry of Finance who knows Bitcoin and the other cryptocurrencies first hand, but without ignoring or demonizing them. The fact that he remains the deputy director-general of the ministry is conveying a message about possible new airs of adoption and greater legitimacy.

Pleyer participates in the development of policies related to digital finance and payment methods. In other words, his decisions have allowed Germany to be a country that is friendly to Bitcoin and cryptocurrencies in general.

The weighting that the European country has given to Bitcoin ratifies its recognition from various points of view: as a means of payment, as a haven or, even, as a financial instrument.

For years, Germany has seen the first cryptocurrency as a finance transformation element and a new form of money. Facts have shown this in the past.

In early 2018, the Ministry of Finance published a document that established that the use of Bitcoin as a means of payment, for the purchase of goods or services, was exempt from paying taxes. The legislation also established that exchange operations involving national currencies or vice versa were subject to the payment of contributions.

In July 2019, the country approved the sale of tokens backed by real estate on Ethereum. The bond offering was for USD 280 million and received validation from the German Federal Financial Supervisory Authority (BaFin), an entity under the Ministry of Finance.

In March 2020, BaFin declared cryptocurrencies as financial instruments. The entity decided to comply with the 5^th Directive of the European Union against Money Laundering (5AMDL).

Conflicting Positions between Germany and China

Now that Pleyer is in command of the FATF, Bitcoin could enter a new phase of recognition and legitimacy among its members, whose positions around the first cryptocurrency vary substantially.

The most emblematic example is that of China, a country that held the FATF presidency with Xiangmin Liu before Pleyer. Liu currently serves as CEO of the Legal Department of the Central Bank of China.

The country still engages in double-talk regarding this issue. On the one hand, it is against cryptocurrencies and their promotion, but it encourages the development of distributed ledger technology (DLT) as a State policy.

China also uses double-talk, since it is developing what would be a digital yuan. In other words, they could be making decisions to capitalize on technology as a state and not as a facilitator to empower their citizens in the Bitcoin era.

The FATF has just left an administration of a more regulatory nature to enter another that shows a potential adoption guideline. The administration that will end in June 2021 could demonstrate it.

By Alexander Salazar

The Aave protocol incorporated the modality of delegated credits to grant loans without collateral. A private agreement with be sealed with a legal document that OpenLaw created.

Aave, an open-source Ethereum-based protocol that operates in the decentralized finance (DeFi) sector, now allows cryptocurrency loans without the need for collateral. On July 7^th, the CEO of the firm Stani Kulechov announced the new service.

The specialized open source protocol is a market in which users can deposit their cryptocurrencies, without giving up custody, to generate passive income. At the same time, they may become lenders or borrowers, depending on their needs.

The DeFi platform, launched at the beginning of the year, offers interest rates for borrowers, in the so-called stable interest rate model. It also offers permanent loans that give users the freedom to obtain liquidity from their deposits without any repayment deadline or schedule.

Currently, this new feature allows the users of the protocol to deposit cryptocurrencies on the platform and then delegate their credit lines to other people. In turn, the latter will be able to acquire a loan without leaving collateral, Kulechov’s explanations.

Decentralized lending protocols generally require users to lodge a security that is substantially larger than what they are borrowing. However, this new modality allows lenders and borrowers to establish an agreement under the OpenLaw statutes, an initiative that uses Ethereum smart contracts to facilitate the entire process that involves a legal agreement.

Operation of the Protocol

Kulechov detailed the operation of the new unsecured loan service. For example, someone called Karen deposits a certain amount of Tether (USDT) on Aave so that, instead of applying for a loan for herself, she will be able to delegate that credit line to her friend Chad. In turn, the latter may withdraw Ether (ETH) from the protocol, without the need to deposit any collateral.

Karen and Chad will use the OpenLaw service to automatically create and manage a legal document in which they will record all the details of their agreement. For that reason, they will establish the conditions of the loan, as well as the interest rates, the repayment terms, and other elements necessary to sign a formal contract.

In the example, Karen, the borrower, could be an exchange, institution, company, or any other agency. By delegating her credit line, Karen will be able to set her interest rates, while making more returns by taking a higher degree of risk. On the other hand, Chad, the lender, will be able to obtain liquidity without having to lodge a security.

The system will also allow Karen to limit the amount that she wants to delegate, set the currencies that she wants Chad to be able to withdraw, and close the credit line so that Chad cannot deduct any available credit line.

According to Kulechov, in the future, all the debt liquidity could be parked in DeFi and anyone could audit it. The executive explained that, since the delegated credit (DC) data are on-chain, it is possible to measure and mitigate credit exposure.

Last February, Aave launched a type of loan, called flash loan, which allows users to withdraw money without the need for prior collateral. In other words, customers have access to instant loans without the need to deposit additional money.

By Willmen Blanco