MKR Auctions Have Venture Capital Firm Paradigm as the Highest Winner

Josselyn Avila
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MKR Auctions Have Venture Capital Firm Paradigm as the Highest Winner

MKR auctions ended over the weekend with 20,980 MKR sold for 5.3 million DAI. An address associated with the Maker Foundation sent 14,271 MKR to an address associated with Paradigm.

Cryptocurrency venture capital firm Paradigm was the biggest winner in a series of MKR auctions. These were aimed at covering around USD 4.5 million of undercapitalized debt.

The auctions, which lasted from March 19th to March 28th, raised a total of 5.3 million DAI, the MakerDAO system’s stablecoin anchored to the US dollar. During the process, 20,980 MKR, the MakerDAO protocol’s governance token, were sold at an average price of USD 296.35 each. The event had the participation of 36 sole bidders.

During that time, there were a total of 106 auctions. To participate, each person promised to put 50,000 DAI with the possibility of winning up to 250 MKR from each auction.

Through its Twitter account, Paradigm announced that it won 72 of the 106 auctions. It also said that it had paid a total of 3.6 million DAI for these governance tokens.

As previously reported, three addresses associated with the nonprofit organization that helps maintain Maker’s protocol, MakerDAO Foundation, seemed to have won the first 33 auctions. Last week, the Maker Foundation explained that it did not purchase MKR tokens for itself, but instead helped third parties participate in the auctions.

At the time, the Maker Foundation said that it offered limited technical assistance to some bidders to facilitate their timely and effective participation in auctions.

In the following auctions, all three addresses continued their winning streak and eventually won around 14,295 MKR, according to research.

Interestingly, after the three addresses sent 14,295 MKR to the address of the operation of the foundation, it transferred 14,271 MKR to a new address. Of that amount, 7,098 MKR reached this new address from the address of the operation of the foundation through a multi-signature wallet.

The new address most likely belongs to Paradigm, which could now have around 14,000 MKR from the auctions, since it won 68% in them and each auction awarded between 180 and 250 MKR. The firm Paradigm did not make further comments besides those that it had previously posted on its  Twitter account, while the Maker Foundation has not yet said anything in that respect.

The amount of MKR that Paradigm recently purchased will add to its current possession of governance tokens since another address associated with the venture capital firm has around 15,352 MKR. In December of last year, Paradigm and Dragonfly Capital invested USD 27.5 million in the foundation in exchange for around 5.5% of the total MKR token provision.

The objective of MKR auctions was to cover USD 4.5 million of debt in the Maker ecosystem. This community was created after certain liquidators won the collateral liquidation auctions with 0 DAI on March 12th, called “Black Thursday” since then.

In the MakerDAO system, borrowers obtain DAI by depositing ETH, BAT or USDC as collateral. However, due to the sharp drop in the price of Ether on March 12th, a significant number of loans fell below the required 150% collateral limit, triggering liquidation auctions.

By Alexander Salazar

Investors Allege that XRP Could Be Security, According to New Lawsuit against Ripple

Josselyn Avila
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The new lawsuits attached to the case also accuse Ripple CEO Brad Garlinghouse of selling all his holdings. There are additional accusations that support the plaintiffs’ statements in an adverse jury verdict.

XRP investors have filed an amended complaint against Ripple in a long-running lawsuit alleging breach of the US Securities Law

The two-year-old class-action lawsuit notes that Ripple, a blockchain payment infrastructure company, violated securities laws by selling and trading the cryptocurrency XRP. The case has been re-filed with additional lawsuits to support the allegation that Ripple and its CEO, Brad Garlinghouse, have done fraudulent business practices.

Former XRP investor Bradley Sostack is the lead plaintiff of the lawsuit, brought for the benefit of all investors who purchased XRP tokens issued and sold by Ripple. The lawsuit exposes the existence of a scheme to raise hundreds of millions of US dollars by selling unregistered security XRP to retail investors.

According to a court document filed on March 25th, a sixth lawsuit for compensation claims false advertising, which violates California’s business laws. It should be noted that this amendment is made “under the alternative theory that XRP is not a security”. A seventh additional lawsuit also accuses the company of unfair competition in violation of the same California laws, also under the theory that XRP is not a security.

The plaintiffs seem to be trying to use some “alternative theories” in the lawsuit, in case the jury judges that Ripple did not issue or sell unregistered security.

The other notable changes in the lawsuit point to Ripple and Garlinghouse, citing their statements about XRP. They said that this is an essential utility token for international payments, whose sale is primarily targeted at market providers.

However, as previously discussed, Ripple is the owner of over 60% of XRP tokens. Besides, the only objective of each of these tokens is to be sold in the future for investment, according to the plaintiffs.

The lawsuits indicate that Garlinghouse was allegedly supporting the hold, thereby seeking to maintain the XRP and make long-term profits. The document states that this information is false, given that throughout 2017 Garlinghouse sold millions of XRP to several cryptocurrency exchange houses. Some reviews of the XRP ledger indicate that Garlinghouse sold at least 67 million XRP that year. They say that he sold XRP as soon as he received it.

Under California law, the plaintiffs have the option to re-file amended lawsuits within the 28 days of previous judgments. Judge Phyllis Hamilton of the Northern District of California declared last February that the lawsuit could go to trial and include other lawsuits filed under Federal Law. However, he dismissed some lawsuits and requested that they be re-filed.

The order followed a hearing in mid-January between the plaintiff, Bradley Sostack, and the defendant, Ripple, along with its subsidiary XRP II and the CEO, Garlinghouse. The main objective, in this case, is to clarify the legal status of the XRP token and why Garlinghouse sold his holdings as soon as he received them.

By Willmen Blanco

Blockchain Jobs Increase During Covid-19 Crisis

Maria Rodríguez
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Blockchain Jobs Increase During Covid-19 Crisis

Kraken, one of the largest crypto exchanges in the world, will be adding 67 hires to the company despite the health crisis.

The Covid-19 outbreak has caused more than 3.3 million people to apply for unemployment benefits in the United States of America. Also, in mid-March, Bank of America stated that the US economy fell into recession, as a result of the fall in financial activities. But the situation with the disease that emerged in China has not affected the generation of blockchain jobs. It is the opposite. Blockchain jobs are on the rise.

Governments around the world know that the Covid-19 crisis could generate a global recession since the main effect of any pandemic is to interrupt international supply chains and, this way, affect the global economy.

More and more governments are trying to prevent more people from getting sick by ordering the population to remain in their homes. Quarantine is the strategy, whilst scientists are looking for an effective vaccine.

The truth is that to avoid the highly contagious virus, many people have left their jobs. But those who work online or participate in blockchain projects have the time to continue doing so at home. Blockchain demonstrates it is an option and a current alternative.

Blockchain Platforms to Face the Crisis

Despite the global economic crisis that economists around the world are calculating, there is a sector that has managed to stay afloat. Blockchain jobs have survived and shown they can offer more to solve different problems.

During this Covid-19 crisis, even the World Health Organization (WHO), IBM, and Oracle use a blockchain platform to handle data related to the disease. These organizations are working on a center to check the official information.

Almost 51.498 people have died whilst 1.002.285 got Covid-19, according to Johns Hopkins University. This information, and the number of cases per country, are the figures that the WHO wants to preserve through a blockchain platform.

Besides, Cure Coin and Banano announced they would provide a reward for those miners who offer computing capacity to allow scientists to calculate results. Cure Coin and Banano are two initiatives dedicated to providing computer support for cryptocurrency mining.

Job Opportunities

Now, there is another blockchain project not directly related to helping find a vaccine. This idea seeks to generate job offers. Kraken, one of the largest crypto exchanges in the world, plans to expand its workforce by 10 % despite the crisis.

According to a recent report published in a local media, the team counts 800 members and will be adding 67 hires to the company over the coming weeks. In this way, the exchange shows it is looking for people focused on blockchain technology.

Another example of the increase in blockchain jobs is Indeed.com, where job ads related to Distributed Ledger Technology (DLT) have increased by 3% since December. Furthermore, there have been no significant reductions in the workforce of any crypto company.

Blockchain technology is useful in different sectors and creates a broader field of work, just having an Internet connection. Nowadays, this is a fundamental quality that makes the difference and will economically protect those who work with blockchain during the health emergency.

Tyler Winklevoss, Co-founder of the cryptocurrency exchange Gemini, said on Twitter that Bitcoin is the “only vaccine in the world that can give you immunity to the money printing disease”. Now, blockchain appears to be one of the vaccines that prevent further job losses and help to establish new aid mechanisms to face difficulties hand in hand with technology.

By María Rodríguez

Appreciation of Cryptocurrency Investment Fund by 1,332% within Four Years

Alexander Salazar
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Appreciation of Cryptocurrency Investment Fund by 1,332% within Four Years

Profits boomed above 2,200% in 2017, but losses were 60% in 2018. Investors recorded gains for 20 months and losses for 19 months.

An investor provided a document that charts the dramatic ups and downs of the first four years of the cryptocurrency investment fund of Polychain Capital. It provides a comprehensive view of the performance of one of the main investment funds of the sector.

According to the document, the annual returns recorded a change from 2.7% of losses in 2016 to 2,279% of profits in 2017, which represented the returns until November of 2019. These witnessed a precipitous drop of 60.4% in 2018 and then increased to 56.1% of gains in 2019.

This roller coaster is emblematic of wild changes, familiar to big or small investors in cryptocurrencies. At the same time, the performance of the investment fund is totally against common sense and traditional markets. According to the document, some investors kept their money during the life of the investment fund. This could have led them to obtain a net profit of 1,332.3%, which increases the possibility of a longer period to offset the incremental risk.

According to the Bloomberg Mutual Funds Index, non-cryptocurrency mutual funds generally posted losses of 5.9% in 2018, and gains of 4.0%, 9.2% and 9.0% in 2016, 2017 and 2019, respectively. As a reference, leading investment funds not belonging to the cryptocurrency ecosystem have generated profits between 15% and 35% throughout their lives.

The taking of gains will depend on when investors deposit and withdraw their funds. Among them are distinguished venture companies such as Andreessen-Hortowitz, Founders Fund, Sequoia Capita, and Union Square Ventures.

The capital block period of Polychain Capital’s investment fund is at least six months. This timeline produces very conflicting images due to the monthly volatility of the market. It also poses a danger to short-term investors, who operate with less liquidity.

Polychain Capital’s Token Deals

Matt Perona, the current COO, and CFO of Polychain Capital, is the former CFO of Criterion Capital, a closed-end investment fund that owned the site of the outdated social network Bebo. Former COO of the investment fund Tiger Legatus, Joe Eagan, is the current president of Polychain Capital.

Olaf Carlson-Wee, the chief investment officer at Polychain Capital, founded the cryptocurrency investment company in 2016. The hedge fund is Polychain Capital’s first fund and invests in parallel with a venture capital arm.

In 2020, Polychain Capital started raising USD 200 million for a second venture fund. The March 2019 documents, filed with the US Securities and Exchange Commission (SEC), reported USD 595.1 million held by Polychain Capital and included the USD 175 million raised for the first venture fund in 2018.

According to an attached investment platform, more than 20 cryptocurrency assets have positions of USD 20 million on average. Each of them is out of the USD 550 million in shares that the investment fund claims to have managed in the last quarter of 2019.

According to the platform, half of the crypto assets are liquid currencies that investors trade in cryptocurrency exchange houses. The other half are non-liquid currencies that they sold through digital token sales structured under a Simple Agreement for Future Tokens (SAFT).

Despite being viewed as a regulatory concession by investors and token issuers, the SEC does not officially recognize a SAFT as a valid legal framework.

By Alexander Salazar

Bitcoin Receives Funding from Blockstream, Lightning Labs and Chaincode Labs

Alexander Salazar
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Bitcoin Receives Funding from Blockstream, Lightning Labs and Chaincode Labs

Blockstream and Lightning Labs have a total of 16 developers dedicated to Bitcoin. Chaincode Labs, on the other hand, funds the entry of about 6 Bitcoin Core developers.

In recent days, BitMEX researchers revealed a list of the top organizations and individuals contributing to the development of Bitcoin. According to the material collected, Blockstream and Lightning Labs are the two companies with the highest funding for open source projects directly related to Bitcoin and Lightning Network.

According to research on public data, BitMEX notes that Blockstream, one of the largest companies in the cryptocurrency ecosystem, has a team of eight developers dedicated to initiatives on the Bitcoin blockchain. The company has two workers specialized in Bitcoin, three in the Lightning Network, and three more dedicated full time to crypto projects.

On the other hand, Lightning Labs also has eight active developers dedicated exclusively to the development of Lightning Network. Square Crypto, a subsidiary of the payment company Square, has assembled a team of seven developers for projects in this ecosystem. Likewise, startups like Chaincode, Purse and Mit DCI have six workers each engaged in open source initiatives in Bitcoin.

The international wallet Xapo, the Chinese exchange platform OkCoin and the exchange house Bitfinex are among the many other contributors in the sector. In this way, the BitMEX report concluded that the financing of Bitcoin currently comes from more diverse sources and have better-distributed participation than in previous years.

Bitcoin Core Is Not Helpless

Bitcoin Core, the main group of developers dedicated to Bitcoin software, also receives funding from these companies. Of the 33 people conforming to this group, only 11 developers are independent and do not receive a fixed salary for their activities. The rest of the experts are associated with one of the aforementioned companies, receiving full-time or part-time pay.

For instance, the startup ChainCode finances six Bitcoin Core developers, being the company in the sector that provides the most monetary contributions to the group. Blockstream also covers the salaries of 3 developers of this team and the remaining 12 receive payment on behalf of BitMEX, Xapo, Private Donor and Square Crypto, among others.

Along with the developers that currently receive financing from companies, the BitMEX report does not reveal how much money the Bitcoin ecosystem is receiving for its development. However, the monetary contributions in this market have improved considerably, especially taking into account that two years ago Bitcoin Core developers were seeking job offers to pay basic expenses.

Race to Secure Funds

Chaincode and Coinbase began to offer jobs for Bitcoin experts in 2018, understanding the problems that the lack of financing caused. Personalities like Udi Wetheriminer and Oded Leiba stated at the time that it was difficult to contribute to Bitcoin and earn money for the work done.

In this sense, the developers were forced to abandon their projects, decreased the number of hours invested to develop the blockchain, and dedicated themselves to work that would allow them to survive.

The community raised the possibility of creating a fund to finance the work of Bitcoin Core, as well as seeking alternative initiatives that would allow the maintenance of Bitcoin. Amid this brainstorming, some enthusiasts considered the importance of distributing contributions and preventing financing from being fully centralized.

Since its creation in 2012, the Bitcoin Foundation has been dedicated to cover expenses to promote and maintain the main cryptocurrency. However, after starting as a renowned and prestigious organization, it became a controversial entity. It received various criticisms from the community for its rigid administration, until it lost power and finally disbanded.

Currently, a larger group of companies are contributing to the development of Bitcoin, which leads BitMEX to believe in the formation of a healthier financing model. In it, there would be more money available for developing full-time projects, whilst maintaining a higher degree of sponsor distribution and encouraging transparency.

By Alexander Salazar

Application of Blockchain Technology in the Health Sector

Alexander Salazar
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Application of Blockchain Technology in the Health Sector

When speaking of blockchain, it is impossible to avoid associating it with cryptocurrencies. However, this is not the only area that this technology can transform.

Since its beginning, blockchain technology has been mostly associated with cryptocurrencies. However, this technology is not only applicable to the cryptocurrency ecosystem. There are many utilities that blockchain technology is capable of transforming.

The main advantage of blockchain is its possibility of enabling a secure and reliable transaction certification system, without the need for third parties or intermediaries, thus decentralizing management.

Blockchain Technology in Health Care

One of the most critical use cases for this technology is in the health sector, given that this area needs reforms. Currently, this sector suffers from a centralized approach, which leads to an inefficient way of treating patients. Therefore, health care is a field in which the applications of blockchain technology would be favorable.

Patients have to carry their medical data from one doctor to another, which can lead to problems. Besides, doctors use different standards and formats to record the data stored in legacy silos, creating problems regarding data recovery and change.

Blockchain technology can simplify all health issues by providing a decentralized ledger approach. DLT allows all those interested to access vital patient data, with the proper permission. Of course, all the data will also remain secure and only authorized personnel will be able to access them.

Transactions can also remain on the chain and patients can track them when necessary, which represents an improved process of general health care.

Patients will have full access to their healthcare data until they voluntarily allow a third party to have it too. Finally, the health data stored in one place can help improve the research effort of those scientists seeking to resolve the next epidemic or find a cure.

Last but not least important, the use of blockchain technology to eliminate drug counterfeiting can save lives and also improve the business of pharmaceutical institutions.

Blockchain Technology in Fight against Coronavirus

Adding to the advantages of this sector, a series of international solutions based on Blockchain technology has recently undertaken the challenge of preventing new outbreaks amid the COVID-19 pandemic. The United Arab Emirates (UAE) is the country that has recently proposed solutions that rely on a distributed database.

The UAE Ministry of Community Development (MOCD) announced that it has started using digital channels to provide government services.

The MOCD would depend on the use of digital identity through blockchain-based systems and chat systems for the digital authentication of official certificates and other documents. This eliminates the need for users to leave their homes.

Until now, local media have reported that the implemented blockchain system is capable of processing 2,919 types of documents, which would allow the ministry to regulate the flow of customers.

The possibility to apply blockchain technology to other aspects beyond the economy has increased the interest in this technological revolution.

Besides, the transparency that these new methodologies provide deviates from the lack of transparency represented by the usual methods that banking institutions implement.

By Alexander Salazar

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