Is This Crypto Broker In Ruins?

June 23, 2022       /       Unchained Daily       /       Laura Shin

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Daily Bits

• Voyager Digital shares plummeted 60% after disclosing exposure to Three Arrows Capital.
• Tether will launch a British pound-pegged stablecoin.
• Fed Chief Jerome Powell said he is not worried about crypto but still calls for regulation.
• European Central Bank President Christine Lagarde called for regulation on crypto staking and lending.
• Trader-focused service Coinbase Pro will be replaced by Advanced Trade.

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Today in Crypto Adoption…

• Pharrell Williams will be the Chief Brand Officer of the Doodles NFT collection.
• Citigroup partners with crypto infrastructure firm Metaco to develop a digital asset custody platform.
• Shopify launches a new feature to add utility to NFTs.
• KPMG takes its first steps into the metaverse.

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The $$$ Corner…

• E-commerce giant eBay acquired NFT marketplace KnownOrigin for an undisclosed amount.
• Crypto infrastructure company Prime Trust raised $107 million in Series B funding.
• Falcon X, a digital-asset prime brokerage, raised $150 million at an $8 billion valuation.
• Web3 collective Afropolitan raised $2.1 million in pre-seed funding.

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What Do You Meme?

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What’s Poppin’?

dYdX Makes a Bold Move

By Juan Aranovich

The dYdX team announced yesterday that they will be launching dYdX v4 on the Cosmos blockchain. “We’re excited to announce that dYdX V4 will be developed as a standalone Cosmos-based blockchain,” they said.

dYdX is a decentralized exchange platform for cryptocurrency margin trading. It was built initially on the Ethereum layer 1 chain, and was later deployed on Starkware, an ETH Layer 2 scaling solution. At the moment, dYdX has a Total Value Locked of more than $700 million and has monthly revenue of approximately $20 million.

Antonio Juliano, the founder of dYdX, expressed his conviction that this move is “the best way to achieve our goal of long term becoming one of the biggest exchanges in crypto.”

According to the dYdX blog post, the decision was made with the intention to build the most decentralized and scalable exchange. Cosmos, they say, will allow the customizability they need to achieve these goals.

“This, for the first time, will enable the professional, orderbook based, trading experience crypto traders demand on a full DEX.”

Many people were surprised to see such a move. “This is going to fail, users won’t move their money from Ethereum to Cosmos,” said Twitter user Derivates Ape.

Juliano said on Twitter that building an application-specific blockchain would provide better performance than rollups. “No chain (including cosmos) can handle the throughput we need, so we had to develop an offchain, decentralized network to run the orderbook,” he added.

The team at Kujira, another L1 in the Cosmos ecosystem that was previously built on Terra, hinted that it would want to partner with dYdX. “Would love to chat dYdX. We have 50K + unique bidders all very familiar with liquidations who can provide a backstop, gain from liquidations, and also reduce the amount you pay for them. Win win,” Team Kujira tweeted.

The dYdX team plans to open source dYdX V4 by the end of this year. In addition, Juliano confirmed that dYdX L2 “is not going anywhere anytime soon.”

Only an hour after the statement, L2BEAT, a research website for Ethereum layer two scalability solutions, announced that they have built a rollup explorer and force exit tool for dYdX. “I love the timing of this announcement haha,” commented Anthony Sassano, founder of the Daily Gwei.

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Recommended Reads

1) “Beyond Verticalization of NFT Marketplaces” by Kyle Samani:

2) Jack Niewold on how we are destroying crypto:

3) “Bitcoin is Venice” by Allen Farrington and Sacha Meyers

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On The Pod…

Caroline Pham, commissioner at the Commodities Futures Trading Commission, discusses how we should build a regulatory framework for crypto assets, whether the SEC and CFTC should work together, what were the consequences of the Terra collapse, and much more.

Show highlights:

• how Cmr. Pham got started in crypto and became a CFTC commissioner
• the importance of the regulatory strategy around crypto
• what crypto’s role is in the financial system
• how bitcoin is a sort of money outside of the traditional financial system
• how friendly regulators should be with the industries they regulate
• why she believes transparency is one of the greatest ideals of American democracy
• how Cmr. Pham believes in self-determination and the power of free markets
• why Cmr. Pham published an op-ed with SEC Commissioner Hester Peirce
• how the Terra collapse incentivized regulators to look deeper into the space
• whether the US approach towards regulation can improve
• the role of the regulatory agencies in making the US the financial leader of the world
• what Cmr. Pham thinks about the new Gillibrand and Lummis bill
• whether SEC Chair Gary Gensler is right about the majority of cryptos being securities
• what are the low-hanging fruit opportunities for regulators when it comes to crypto
• how Cmr. Pham believes we should have a global regulatory framework for crypto
• why she believes algorithmic stablecoins are derivatives
• why things like Terra could act as a “shadow banking 3.0”
• whether there is a way to regulate without having intermediaries

what Cmr. Pham thinks about FTX proposal to bypass futures commission merchants

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Book Update

You can purchase it here: http://bit.ly/cryptopians

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