DeFi platforms pay more for borrowing than they charge in fees, according to an analyst. Trading pools of US dollar-pegged stablecoins also offer high interests.

The incorporation of new products and services in the decentralized finance (DeFi) ecosystem is increasingly attracting capital and new users. At the beginning of June, the total locked capital associated with the different DeFi services exceeded USD 1 billion and reached USD 1,512 on June 21^st, with an increase of 55% during that week, according to data from DeFi Pulse.

This accelerated growth leads more users to become interested in cryptocurrency loans, attracted by an increasing interest rate. Analyst Tony Sheng recently posted a thread on Twitter, giving concrete instructions for allegedly earning 100% annual interest, through investments in decentralized loans, on various DeFi platforms.

Sheng states that in traditional finance banks can obtain an interest of 0.01% for whom they offer loan capital, but some options can even pay up to 1%. On the contrary, those who are seeking loans in the DeFi sector are not only willing to pay much higher interest rates but also offer additional bonds to borrowers.

The reason for those bonds is in the stimuli that DeFi platforms offer for borrowing, according to Sheng. “When someone requests a loan at @compoundfinance, they receive a kind of cashback. The greater the loan, the greater the cashback.” the platform delivers this stimulus to the applicant of the loan in COMP, the Compound token, says the analyst.

That stimulus is now higher than the fee for the loan, according to Sheng. This implies that an increasing number of people are interested in requesting loans, only to receive the stimulus payment.

On the other hand, borrowers also receive incentives of up to 50% on the interest that they earn on the loans, states Sheng. To reach a 100% annual interest rate, borrowers take the money pledged as collateral security and lend it back. USD holders can earn a 100% annual interest rate instead of the 0.01% that their bank offers, which represents a profit between 100 and 10,000 times the amount invested.

Sheng notes that the bonds depend on the different types of digital USD or US dollar-pegged stablecoins. He advises that to trade these different versions, it is best to do it on a specialized exchange.

For example, participants go to @Curvefinance with their funds and contribute to a pool. They not only earn fees on their funds, but they can also offer loans from the funds contributed and earn additional interest. The demand for both loans and trades of digital USD variants is so high that the contribution to the pool has come to produce returns of 200%.

There are different ways to make substantial profits on DeFi, using the so-called “farming yields”. However, such a wide profit margin also makes it important to be aware of the risks. After explaining the steps to reach a 100% return on the investment in DeFi , Sheng warns of the risks.

By Alexander Salazar

The course will last 30 academic hours and over 6 weeks.

The National Technological University (UTN) recently announced the second edition of the free course on blockchain technology, created in Buenos Aires, Argentina. This course has the support of the Centre for Educational Research and Innovation and will start this June 26^th.

The announcement on this new course details that the name of the course is “Bitcoin and Blockchain: a technical introduction”. This is the second time that the National Technological University offers this course, thanks to the support of the aforementioned institutions and the great reception it received in its last edition.

According to a report that the National Technological University published, the first edition of the course registered more than 1,000 students, who well appreciated it. For this reason, in this second edition of the course, the university hopes to have a higher number of participants and with more accurate and updated data.

The reports on this new course name the Electrical Engineer Julian Drangosch as the person in charge of imparting the educational material. The engineer is recognized for being an activist, a member of the NGO Bitcoin Argentina, and a cryptocurrency enthusiast.

Regarding the organization of the course, the university informed that it will divide the course into 6 modules, which will cover topics ranging from the use of digital wallets, mining, and cryptography to how bitcoin and Bitcoin work as a decentralized organization.

The university emphasized that students interested in the course need to have basic knowledge of computing, mathematics, economics, and the Internet. In the same vein, they also must speak English. The reason is that the workshop contains unique material that is only available in said language. In the end, the National Technological University recalled that the course will last 30 academic hours and over 6 weeks.

The Course Will Include Certification

The National Technological University mentioned that participants, who have completed the course with a score equal to or greater than 75 % in all modules, will have the possibility of receiving a certificate that guarantees their participation. The student can download the aforementioned certificate through the university’s website in PDF format.

Besides, the university approved to deliver a higher certificate that endorses the student as a participant who approved the course. For the student to opt for this certificate, they must complete the course and have made a single payment for the diploma.

The Miríadax platform will support the course, according to the announcement. Miríadax is a specialist in courses with blockchain validation. All those interested in the course on blockchain technology and Bitcoin that this university offers must register through the Miríadax official website.

The National Technological University is not the only university in Latin America that has decided to focus efforts on imparting knowledge about blockchain technology and cryptocurrencies. Last June 11^th, the Javeriana University of Colombia informed me that it offers a blockchain course that is also free now.

Another university in the world that offers free courses on blockchain technology and cryptocurrencies is Princeton University. In this way, more and more people around the world will have the opportunity to know more about cryptocurrencies, blockchain technology, and how to take advantage of them.

By María Rodríguez

The minister assures that the use of DLT will improve public administration.

Karen Abudinen, who serves as the Minister of Information and Communication Technologies in Colombia, commented during an interview that the use of blockchain technology could help improve important aspects of public administration. Besides, she assured that if the government uses these tools in key sectors, this technology can create better trust among citizens and the State.

Abudinen mentioned that citizens rate the use of empowering tools such as Distributed Ledger Technology (DLT) as positive. She said that citizens know that DLT is the same as blockchain and that they can accept its implementation in “Tax collection, voting, issuance of documents, and donations.” The minister added that if public administration adopts this technology, the efficiency in the sector will improve, as well as insecurity and transparency protocols.

The official recalled that this technology has function on other occasions in Colombia. She presented two examples. The first time, the country applied blockchain technology in internal voting in some district schools in the city of Bogotá.

The second time, the country used blockchain technology at the National Land Agency. On that occasion, the developers created an app that uses blockchain technology to keep track of movements, improve traceability, and notify certain assignments.

In past months, the official mentioned that the new digital age will integrate all municipalities in Colombia very soon. Abudinen added that they include the use of blockchain technology among the country’s plans. She also announced that cybersecurity tools and data analysis will not only be used by government entities but also be used for national enterprises and different economic areas.

The minister recalled that they have programmed these transformation and evolution plans since President Iván Duque promised, in his government program, the use of blockchain technology to improve transparency in the country.

Bitcoin Is Not Among Colombia’s Plans

The Colombian state has focused efforts on the use of blockchain technology for different aspects of life. The state not only considers blockchain for official use but also accepts the development of projects that promote solutions based on technologies derived from the blockchain.

However, there is not the same support for the adoption of Bitcoin (BTC) and other cryptocurrencies in the country. An example of this is when restrictions, account cancellations, and ignorance of the use of Bitcoin as a means of payment affect some crypto exchange houses.

As an official notification, the highest financial institution in Colombia issued a statement where it denies Bitcoin as a legal tender, so users cannot use this cryptocurrency to make payments. 

“Bitcoin is not a currency in Colombia and, therefore, does not constitute a legal means of payment with unlimited liberating power. Therefore, there is no obligation to receive it as a means of complying with obligations”, the statement affirms.

By María Rodríguez

“Yield farming”, which is based on DeFi protocols, leads to interest rates of up to 100%. Users receive tokens to finance and request loans, being able to multiply their profits.

Nowadays, farmers no longer engage in planting bell peppers, tomatoes, or potatoes. They have specialized in a new type of crop and more exotic lands: using cryptocurrencies in decentralized finance (DeFi) protocols to take advantage of the high return rates of these platforms.

This practice is known as “yield farming”, a term that originated as an internal meme. Traders considering that these operations resemble a “farmland” have played it. They patiently wait for their multiple cryptocurrency crops to yield up to 100% annually.

Today, the words “yield farming” designate one of the most popular capital yield strategies in the DeFi ecosystem in recent months. Those who implement these operations seek to take advantage of the different DeFi protocols and products to generate high rates of return, mainly focusing on holding or requesting cryptocurrencies in collateral loans, or with the support of other digital assets.

Process of Cryptocurrency Farming

This cycle of operations is similar to the sowing of an organic product. Users can commit their cryptocurrencies in a collateral loan with another individual or request a loan in this supply market. In the case of lenders, the operation already allows them to earn interest on the funds that they offer. In both cases, the more cryptocurrencies they deposit on the platform, the greater the number of assets that they can borrow.

However, these users can not only gain interest in the cryptocurrencies that they deposit in the protocol. They also receive governance tokens inherent to each DeFi platform, which represent a reward or “cash return” for the liquidity that they provide to the market. In this way, each actor would be earning not only for the interests of the borrower but also for a high-interest rate the loan protocol proposes.

If the trader is skillful and fully engages in yield farming, he will commit more money (even borrowed money) in other DeFi protocols to take advantage of better arbitrage and other rewards. For example, a user can lend and borrow money on the Compound platform, and then also invest in protocols such as Synthetix or Balancer, which also engage in these strategies.

Analyst Tony Sheng considers that a user can generate up to 100% annual interest doing yield farming if he receives “the right instructions”.

The president of Ether Capital Corporation, Stefan Coolican, is not as optimistic about profits. The expert believes that these strategies can offer good returns, but he estimates that the highest annual rate of return would be 20%. In the worst case, when these operations have become popular, users could make annual profits of 2 to 3%.

These percentages are seducing a large number of investors and traders that comprise the DeFi ecosystem. However, a strategy with high return potential carries, in turn, great financial risks.

By Willmen Blanco

Due to delays for approval in Congress, the draft law will be updated. They will start from the legalization of exchanges to the acceptance of cryptocurrencies as currencies.

Colombia’s cryptocurrency ecosystem will move toward an update to the draft law that was prepared nearly two years ago. A group of panelists who participated in a debate on the regulation of blockchain, and crypto-asset platforms last June 24^th reached this conclusion.

Juliana Matiz, Co-Founder of the financial markets training and education company Investopi, was responsible for organizing and moderating the debate. It had the participation of Congressman Mauricio Toro, President of Colombia Fintech, Erick Rincón Cárdenas, and, Carlos Mesa, Director of the Bitcoin Colombia Foundation. All of them agreed that, due to the recent delays for the approval of Draft Law 97, many of the proposals included in the document have become obsolete.

During their discussions, the participants mentioned the cancellation of the introduction of the draft law, which Senator Horacio Serpa Moncada had to do on June 8^th. The suspension occurred while waiting for a concept that the Financial Superintendence of Colombia (SFC) must issue. That situation discouraged the start of the 4 debates that would allow the draft law to become a law.

The panelists think that the draft law requires an update to adapt it to the changing reality of the ecosystem, considering that the discussions for its preparation date back around a year and a half ago.

A Long Way to Go

Congressman Toro predicts that the process for the approval of a cryptocurrency law will be long since Colombian authorities do not consider the cryptocurrency issue a priority. This situation is gaining strength amid the economic problems that the coronavirus has caused, which now keep the government busy.

He mentions several aspects on that path. The first step, which the current draft law already contemplates, has to do with legalizing exchanges. It is an urgent step since these platforms have serious difficulties to operate due to a prohibition that the SFC issued, which prevents banks from opening accounts for companies that operate with cryptocurrencies.

The next steps are aimed at achieving the approval of cryptocurrencies as currencies and a method of payment, beyond their recognition as assets. According to Matiz, this complex process involves starting with a definition of terms. The president of Colombia Fintech shares this opinion and focuses on the foreign exchange and fiscal impact of admitting them as legal tender.

Beyond “Blockchain, Not Bitcoin”

Regarding the authorities’ low interest in the cryptocurrency ecosystem, Erick Rincón Cárdenas proposes, as a mechanism to streamline the process, which the recognition of cryptocurrencies occurs through the National Executive and not through the Congress.

That idea is aimed at taking advantage of the tendency of the Colombian government, who show their interest in the so-called distributed ledger technology (DLT) with the support for various blockchain projects and applications for official use. Since 2018, that initiative has been part of Iván Duque’s government plan and has worked in line with the well-known motto “blockchain, not Bitcoin”.

However, Congressman Toro makes it clear that the strategy of regulating via decrees is not viable. He says that it is not only because of the lack of government interest but because regulating in this way requires “skipping some rules.”

By Willmen Blanco

PayPal included blockchain technology in the Strategic Technology Enabling office. According to anonymous sources, PayPal will offer in the short term the option of buying and selling cryptocurrencies.

Currently, the company PayPal Inc. is looking for an engineer for its blockchain research group, which is part of the Strategic Technology Enabling office. This search coincides with the rumors that this company is about to offer the sale of cryptocurrencies through PayPal and Venmo.

One of the employment options available on the PayPal website is related to the position of “Blockchain Research Engineer.” That offer, opened on June 3^rd, states that this researcher will have among his functions to search for “use cases that can expand PayPal’s understanding of blockchain and specific blockchain implementations.”

Another prominent function that the person hired must perform is to interact with potential partners, suppliers, and industry media dedicated to the development of blockchains. He/she must also be able to recommend products and technologies external to the company that can contribute to the development of “new company concepts”.

The text adds that the “ideal candidate” will have a “strong history of innovation” and the ability to research by his/her own in the areas necessary for the position. Besides, the offer states that the research team “will seek to understand the current and future state of blockchain technologies, their relative advantages, and disadvantages, and their applicability to PayPal’s core and adjacent businesses.”

The offer also makes it clear that research objectives will be reassessed with a periodicity of between 3 to 6 months. Depending on these results, the investment will continue, increase, or decrease. If “there are no more relevant research objectives” after the evaluation, the text even determines that the team could research in other areas.

Rumors about Cryptocurrency Trading on PayPal

Last June 22^nd, PayPal’s alleged plans to offer, in the short term, the sale of cryptocurrencies on its platform came to light. Anonymous sources with knowledge of the project have confirmed that, within three months, the payment platform would be offering the new service to its customers.

The testimonies did not shed light on the amount or the types of cryptocurrencies that PayPal would include. However, the sources added that the company would hold conversations with exchanges, such as Coinbase and Bitstamp, to obtain the necessary liquidity to offer the said service.

On previous occasions, PayPal has approached the world of cryptocurrencies. Its most recent approach was its inclusion in the Libra Association, which would allow creating Facebook’s cryptocurrency project, Libra. However, the same has happened with other companies initially named in the association, PayPal left the project in the last quarter of 2019.

The company’s CEO, Dan Schulman, had anticipated that they were working on projects associated with cryptocurrencies and blockchain technology. However, they did not provide details on what they were developing at PayPal.

The importance of cryptocurrencies and blockchain technology is becoming increasingly evident in today’s world. The fact that payment platforms such as PayPal are looking for an expert in the blockchain area demonstrates their interest in using this technology to optimize their service.

By Willmen Blanco