Čvn 01

This IEO Crypto Token is Up 800% After Binance DEX Launch

Crypto figures were urging caution June 1 after the first token to trade on both Binance and Binance DEX saw suspiciously high trade volume.


Harmony Outperforms BNB Crypto Token

Harmony (ONE), which constitutes Binance’s latest initial exchange offering (IEO), saw over $600 million in volume in the 24 hours to press time, according to data from CoinMarketCap.

The token is the first to debut on both Binance’s regular platform and its newly-launched decentralized exchange, Binance DEX.

Executives had generated considerable buzz around the move through a concerted publicity campaign prior to the launch, which included a giveaway to promote ONE among prospective investors.

Analyzing the trade figures, however, veteran crypto social media voices appeared less than impressed.

“It’s up by 800%+ from (the) IEO. Wouldn’t recommend chasing this,” the Twitter account known as Squeeze summarized, noting ONE/USD trading at $0.025.

“I’ve been eyeing this for a while. This has very huge hype. But not gonna buy at this price. Will wait for dips in the coming weeks. If it moons hard, I don’t mind missing this. Plenty of other choices.”

Binance DEX Whirlwind

Harmony was little known before its Binance hook-up, with the launch of the DEX having already sparked major excitement among traders.

As CoinMarketCap confirms, Binance’s decentralized platform saw larger volumes in five hours than its biggest competitor, IDEX, achieved in 24.

“By tomorrow it will have done more volume than all DEX’s combined,” trader and journalist Dan Clarke forecast Saturday.

As Bitcoinist reported, Binance itself has seen a broad turnaround in its recent fortunes since recovering from a $41 million hack at the start of May.

Following a week of downtime, full functionality resumed May 15, with the platform’s in-house token, Binance Coin 00, forming the basis of a separate giveaway to reward users who stayed loyal during the platform’s difficulties.

BNB subsequently outperformed, reaching new all-time highs against the US dollar this week as it passed $35 for the first time.

The token, which can also be used against discounted trading fees on Binance, is now the seventh-largest cryptocurrency by market cap. 24-hour volume at press time was $560 million – still just short of ONE.

Separately, the exchange’s own research this week announced a changing trend in the crypto industry more broadly. After over a year of low appeal, non-crypto lay consumers were finally beginning to pay attention to Bitcoin 00 and altcoins again.

In addition, institutional investor interest was developing much more quickly, analysts said, a phenomenon which itself was contributing to the base of new Binance traders.

What do you think about Binance DEX and Harmony? Let us know in the comments below!


Images via Shutterstock, Tradingview.com

The Rundown

Share
Kvě 10

Did the $41M Bitcoin Theft Create a Buying Opportunity for Binance Coin (BNB)?

Binance Token (BNB) has taken a significant due to the Binance Bitcoin hack but is the recent pullback an opportunity for buyers?


BNB Maybe a Steal as Binance Reels

Since topping out at $25.49 Binance Token (BNB) 00 has pulled back by nearly 27% and the fallout from last week’s Tether – Bitfinex scandal along with Binance’s recent $41 million bitcoin theft are taking their toll on the exchange’s native token.

Clearly, after a more than 500% rally, BNB was ripe for a bit of profit taking and a trend change but the current dump could be more connected to recent events and not a representation of BNB’s value from a technical standpoint.

BNB-USDT Daily Chart

binance

As recently as May 2, BNB was consolidating between $25 to $21 and posting daily lower highs. It’s clear that altcoin was losing strength as it struggled to stay above the 12 EMA The bear cross on the daily MACD corresponds with the April 26th news of Bitfinex misappropriating $850 million USDT to cover their own losses.

BNB-USDT 4-Hr Chart

Today’s pullback brought BNB below both moving averages and the 12 is on the verge of crossing below the 26 EMA. There is the possibility of an oversold bounce occurring shortly as the RSI and MACD are each oversold, but barring a massive influx of buyers, the bounce is not likely to change the trend or extend past $19.50.

On its way to $25.49, Binance Coin blasted through $17 – $21 (61.8% Fib retracement) and the lack of support beneath $19 explains why BNB is slicing through this level towards more solid support at $15. If $17.30 doesn’t hold then the 50% fib level.

Given that USDT and BTC have shaken off and recovered from the same recent events that now impact BNB, it’s likely that BNB will also recover as the public gets over the shock of the largest crypto-exchange by daily volume enduring a $41 million hack. Luckily, it has resulted in zero Binance users losing funds.

In result, the current price could be a buying opportunity for swing traders as a return to the previous range represents a 20 – 25% return and those looking to set up a long position might consider buying a quarter of their expected investment.

Is Binance Coin a buy now under $19? Share your thoughts below!

[Disclaimer: The views expressed in this article are not intended as investment advice. Market data is provided by Bitfinex. The charts for the analysis are provided by TradingView.]

Trade Bitcoin, Litecoin and other cryptocurrencies on online Bitcoin forex broker platform evolve.markets.  


Images courtesy of Shutterstock, Trading View. Market data sourced from Coinbase.fkff

The Rundown

Share
Kvě 08

‘Shocked He Went There:’ Crypto Takes Sides On Binance’s Alleged Bitcoin Reorg Plan

Cryptocurrency’s best-known figures continue to debate exchange Binance’s handling of its $40 million hack amid claims executives planned to undo past Bitcoin transactions. 


Binance CEO Rejects Reorg

In a lengthy debate still playing out on social media, Binance received mixed reviews after CEO Changpang Zhao appeared to suggest there was a plan to conduct a reorganization (‘reorg’) of the Bitcoin blockchain. The step would theoretically allow the transactions involving the bitcoins hackers stole from Binance May 7 to no longer fall under their control.

At the same time, an entire day’s worth of user transactions would become void.

Reorgs to fix erroneous transactions are extremely difficult to do for decentralized blockchains — and, in the case of Bitcoin’s, de facto impossible due to the consensus demands required.

As Bitcoinist previously reported, more centralized blockchains can conduct similar activities more easily. EOS, for example, reversed transactions late last year in an episode which likewise attracted negative attention.

While Zhao subsequently explained that the idea remained hypothetical following discussions and that Binance would not pursue any form of the reorg, some reactions criticized him for mentioning the topic.

Mike Novogratz, the Galaxy Digital CEO and major Bitcoin bull, vented rare comments on the topic after Zhao drew a comparison between his plan and efforts by Ethereum (ETH) developers several years ago.

“I am shocked that (Zhao) even went there. Talk of forking or reorganizing the blockchain is close to heresy,” he wrote on Twitter. “When the (Ethereum) community did it the project was like 5 months old. A baby. Bitcoin now has $100 (billion) market cap and is a legitimate store of wealth.”

Back: Reorg ‘Not Happening’

Ethereum co-founder Vitalik Buterin also added a rebuttal, arguing Ethereum’s actions did not constitute a reorg.

“Ethereum did a surgical irregular state change. We never even considered actually rolling back the chain to undo the hack; the collateral damage from that (reverting a day of *everyone’s* transactions) would have been huge and possibly fatal,” he tweeted.

Binance’s back-up fund will cover losses endured by users, while the event appeared to have little impact on buoyant cryptocurrency markets, Bitcoin price shedding $200 but subsequently rebounding.

Mentioning the press handling of the hack as complicating perceptions, veteran cryptographer and Hashcash inventor Adam Back meanwhile took the opportunity to reiterate the difficulty of manipulating the Bitcoin blockchain.

“A Bitcoin reorg is just not happening, and I doubt any Bitcoin industry, miners nor developers considered it either,” he summarized, referencing previous, considerably larger, exchange hacks which came and went without such measures coming to pass.

What do you think about Binance’s remedial measures? Let us know in the comments below!


Images courtesy of Shutterstock, Twitter.

The Rundown

Share
Dub 28

Binance Chain Launch Sees Developers and Entrepreneurs Reconsidering Ethereum

Last week, Binance announced the launch of Binance Chain, its native Blockchain platform that will facilitate the issuing, exchanging, and usage of digital assets. Apart from the fact that Binance Chain opens a new world of possibilities for cryptocurrency projects, the BEPs protocol on Binance Chain also shows some significant difference Ethereum’s ERC-20 protocol that currently dominates the crypto space. 


For instance, the BEP2 standard makes it possible to issue crypto tokens that can be pegged to any other altcoin as opposed to the current standards that only pegs tokens against ETH or BTC. The Binance chain also includes other features such as minting, burning, transferring or freezing tokens.

Below is a list of existing projects that have migrated to the Binance Chain since its launch:

  • BNB
  • NOW
  • MITH
  • PHX
  • AWC

Binance Coin (BNB)

It goes without saying or special expectation that Binance Coin (BNB) has been migrated from Ethereum to the Binance chain as the native cryptocurrency on the platform. Binance Coin on Binance Chain will serve the same purpose that Ethereum serves on Ethereum network to pay for network transactions among other things.

BNB tokens, originally an Ethereum-based ERC-20 token is now being migrated to become a BEP2 token powered by the Binance chain. People who currently own ERC20 BNB coins are expected to send the ERC20 tokens to a new Binance Chain deposit address. Binance with then convert their ERC20 tokens to the new BEP tokens automatically.

Last week, Binance announced that it has burned 5 million ERC20 tokens and allocated native BEP2 tokens to wallets on Binance Chain. The old BNB ERC20 tokens were burned to manage supply on both Ethereum and Binance networks. However, trading of BNB on Binance Chain won’t start until the first batch of BNB has been converted and there enough liquidity to support trades.

ChangeNow (NOW)

ChangeNow, a cryptocurrency exchange that facilitates the anonymous exchange of tokens has announced that its NOW token will now be issued on Binance Chain and that it will be listed on Binance DEX. ChangeNow choose Binance Chain because it offers a strategic advantage that complements how ChangeNow facilitates token swaps without charging transaction fees.

ChangeNow went for a hybrid arrangement, leaving half of their tokens on the Ethereum blockchain, while moving the other half onto the Binance Chain. ChangeNow will allow its holders to burn their ERC-20 tokens, and exchange them for a BEP2 compliant version for the foreseeable future.

Binance’s founder and CEO, Changpeng Zhao has also expressed his support for having the NOW token clinching the title of the first token to be listed on Binance DEX.

CZ also commented on ChangeNOW being the first to issue their token on their chain, the true decentralized way:

Mithril (MITH)

Mithril (MITH) is also migrating to Binance Chain. Mithril is a decentralized social media platform that rewards people for creating content though an ecosystem where content creators and curators are reward with MITH tokens. In a blog post published last week, Mithril revealed that it is migrating its project to the Binance chain to provide its users with an opportunity to experience the security, intuitive user interface, and speed of the Binance DEX platform.

Mithril notes that “Binance Chain’s focus on usability, security, along with the incredible speed of one-second block times, made migrating to the Binance Chain an important strategic initiative for us this quarter.”

Deposits and withdrawals of MITH tokens on Binance exchange will be suspended for the 12-hour during which the migration will be initiated. Afterwards, users can withdraw their MITH tokens to BEP2 compliant wallets as a precursor to trading the coins on Binance DEX.

Red Pulse Phoenix [PHX]

Red Pulse Phoenix [PHX] has also announced that it is migrating a major portion of its token ecosystem to the Binance Chain. Red Pulse Phoenix is both a platform that connects researchers with report-consumers as well as a token for managing IP protecting, Proof of creation, and Proof of Ownership among other things.

As part of the migration, Red Pulse Phoenix will launch a new BEP2 token with ticker PHB for the Binance Chain ecosystem. It also plans to eventually migrate its NEP-5 PHX tokens to BEP2 PHB tokens. The old PHX tokens will continue to be tradeable on Binance.com pending the migration and the new BEP-2 PHB tokens will be traded on both Binance.com and the Binance DEX.

Binance users who currently hold PHX on Binance.com can expect that their PHX tokens will be migrated to PHB and the total token circulating supply of PHX + PHB will remain the same in line with Red Pulse’s original tokenomics for market-driven trading price and market capitalization.

Atomic Wallet (AWC)

Atomic, a multi-asset non-custodial wallet that implements cross-chain Atomic Swaps across 20 Blockchains and tokens has been announced as now of the very first projects that will be migrated to the Binance Chain.

Atomic has revealed that its upcoming Atomic Wallet will provide full support for Binance Chain and BNB Coin while its AWC token will be listed on Binance DEX. However, Atomic will keep its current ERC-20 AWC tokens while maintaining the new AWC token powered by Binance’s BEP2 protocol. To manage the tokenomics, Atomic will burn 50 million AWC ERC-20 tokens representing 50% of its current total supply on Ethereum.

Interestingly, users will be able to swap between both the ERC-20 powered AWC tokens and the BEP2 AWC tokens.

Share
Dub 25

Tether Supply Hits Record High – Here’s What Bitcoin Did Last Time This Happened

Bitcoin price has room for immediate 12 percent growth, according to the latest figures showing current availability of major stablecoin Tether (USDT).


USDT Printing Peaks

Bitcoin price after correcting from its 2019 high of $5620 earlier this week, currently trades just under $5500.

At the same time, USDT production stepped up in April to almost reach its highest-ever level of $2.83 billion April 25.

As Bitcoin entrepreneur Alistair Milne noted on social media Thursday, the last time more than $2.8 billion worth of USDT tokens was in circulation was October 2018, at which time BTC price held at around $6250.

Tether production and reduction have traditionally impacted on Bitcoin price performance. As Bitcoinist previously reported, sudden ‘printing’ of USDT induces volatility in Bitcoin markets.

Since April 8, the USDT supply has increased by more than one third from its previous level of $2.08 billion.

Overall this month, BTC/USD 00 has jumped by a broadly similar amount – at press time, 32 percent since April 1.

Sending Bitcoin Back Over $6k

Tether has frequently come in for criticism over its printing activities, pressure increasing in recent months after officials appeared to quietly remove promises that all tokens were backed by US dollars.

Having billed itself as the opposite of fractional reserve banking, the new descriptions of USDT being supported by unspecified “reserves” drew predictably undesirable comparisons.

Nonetheless, the potential room for growth compounds already strong sentiment among commentators that Bitcoin price can only go up, not down, from current levels.

As Bitcoinist reported earlier this week, some of the industry’s best-known names have attributed high probabilities to the concept that the price of bitcoin has definitively bottomed.

Specifically, that ‘bottom’ came in December last year, when upheaval among developers of altcoin Bitcoin Cash caused BTC/USD to drop by almost half to $3100.

Going that low again, analyst Willy Woo concluded this week, is just 5 percent likely.

Not Out of the Woods Yet, But…

Buoying the bulls are factors centered on technical and adoption signs. Bitcoin economic activity, Bitcoinist noted this week, is around 30 percent higher than during the cryptocurrency’s all-time highs of $20,000 in December 2017.

Despite its lengthy bear market the following year, Bitcoin is nonetheless recovering strongly within the context of those highs.

The behavior sets Bitcoin further and further apart from altcoins, which have overwhelmingly lost more versus their best-ever price and broadly failed to recoup the losses in the interim.

Ethereum (ETH) is currently down 88 percent against Bitcoin’s 72 percent, while third-largest asset by market cap Ripple (XRP) is still down 90 percent.

What do you think about Tether supply versus Bitcoin price? Let us know in the comments below!


Images via Shutterstock, charts.cointrader.pro

The Rundown

Share
Dub 12

These 4 Cryptocurrencies Saw The Most ‘Adoption’ in 2018

Weiss Crypto Ratings says despite the 2018 bear market, there was a considerable uptick in the usage of altcoins. The rating agency says this trend points to the increasing level of cryptocurrency adoption for many users across the globe.


Cryptocurrency Sees Transactions Soar in 2018

According to a blog post published by the agency on Wednesday (April 10, 2019), four altcoin projects saw massive growth in user adoption throughout 2018. Meanwhile, at the time, market prices were plummeting by an average of 80 percent across the board.

EOS transaction volume grew from 7,000 per day to about 4.6 million per day between February 2018 and March 2019. Tron, also saw its own count increase from 3,000 to 1.9 million during the same period.

The other two cryptocurrency projects identified by Weiss Ratings – BitShares and WAX, saw their numbers grow to 1.1 million and 4.4 million transactions per day, respectively.

In total, these four altcoin projects experienced a 2,700 percent increase in daily transaction count, growing from 433,000 transactions in February 2018 to more than 12.4 million as at March 2019.

According to Weiss Ratings, this increased adoption in the face of bear market conditions parallels the trend observed during the dot-com era. The agency expects that developments in the technology will lead to a greater cryptocurrency adoption in the near future.

Not All Transactions Are Equal

However, it is important to note that high transaction count doesn’t necessarily equate to meaningful value transfer. Moreover, transacting on the aforementioned top-four blockchains, in particular, costs very little. Therefore, it may be a poor metric to gauge mass adoption as most of this activity may not actually be economic in nature and/or performed by real users.

EOS’s daily transaction count, for example, outstrips Bitcoin by as much as 14 times. However, Bitcoin value transferred dwarfs every other existing blockchain.

Earlier this week, cryptocurrency analyst Ceteris Paribus highlighted that while Bitcoin processes 20 times more USD transactions that EOS despite having only about seven percent of the latter’s transaction count. Additionally, Bitcoin’s metrics do not include second-layer transactions via the Lightning Network.

Weiss Ratings does acknowledge this fact, saying:

Of course, not all transactions are qualitatively the same. A $10 million Bitcoin transfer is obviously more important than a simple vote or ‘like’ on Steem.

According to Weiss Ratings, other essential metrics like security, network capacity, and developer activity have also increased over the last 12 months. Coupled with the lower prices, the agency believes that altcoins are on their way to gaining greater traction in the finance and technology industries.

As reported by Bitcoinist, an online Twitter poll by the International Monetary Fund (IMF) revealed that many people Bitcoin and other cryptos will become mainstream within the next five years.

What are your earliest forecast for Bitcoin and other cryptos becoming mainstream? Share your thoughts with us in the comments below.


Images via Weiss Crypto Ratings and Twitter (@ceterispar1bus)

The Rundown

Share
Dub 05

Ethereum’s Vitalik Buterin Clashes With Bitcoin-Basher ‘Dr. Doom’

Perennial Bitcoin basher and anti-cryptocurrency campaigner, Nouriel Roubini and Ethereum founder Vitalik Buterin had a heated debate at the second edition of the Deconomy blockchain event in Seoul, South Korea.


Broken Record: Roubini Has Nothing New to Say

Nouriel ‘Dr. Doom’ Roubini – a New York University economics professor regurgitated his old hits, calling cryptocurrency a bubble and saying that it was only useful to criminals and tax evaders looking to launder money with virtual currencies as the “New Swiss bank.”

However, having made the above assertions, Roubini then goes on to say:

I don’t think crypto payments for criminal activity is going be the future of it. They’re not anonymous and even for cryptos that try to be anonymous like Monero, kleptocratic governments will make sure your wallet is registered.

Dr. Doom also relived some other hits like price manipulation claims, pump and dump schemes, exchange hacks as well as ICO fraud as reasons why cryptocurrencies are worthless. Roubini debunked the assertion that virtual currencies represented an emerging financial system, instead, calling them an inefficient barter system that will never overcome the “trilemma of decentralization, security, and scalability.”

Dr. Doom v Vitalik Buterin Cryptocurrency Debate

In response, Buterin countered Roubini on many of his claims especially regarding the anonymity of cryptos providing cover for criminal activities. According to the Ethereum co-founder, any convenience  offered by cryptocurrencies as a payment means is enjoyed by all; whether for “unconventional activities” or otherwise.

Buterin: ‘There Are Definetely Some Real Concerns’

Buterin also chided Roubini’s skewered criticism which fails to take into account the many benefits of cryptocurrency adoption. The Ethereum co-founder pointed to the convenience of making international payments via virtual currency, as well as, the added benefit of cryptocurrencies being censorship-resistant.

As for the perceived inefficiencies in the technology, Buterin highlighted the continuous stream of technological advancements currently ongoing in the cryptocurrency and blockchain space. Commenting on cryptocurrency trilemma, Buterin opined:

There are definitely some real concerns but they’re an artifact of the tech as it exists in 2019, rather than inherent. The trilemma didn’t come with mathematical proofs. It is not impossible to have scalability and decentralization and security.

Facts Trump Sentiments When It Comes to Cryptocurrency

Some of Roubini’s criticisms come from a lack of understanding of the technology

Nocoiners like Roubini present Bitcoin to be this shadowy construct that allows criminals to carry out illegal activities with ease. However, the facts say differently.

Japan’s National Police Agency earlier in the year revealed that 98.3 percent of all recorded money laundering cases in the country for 2018 didn’t involve cryptocurrency. Intelligence agencies still report that terrorists have trouble adopting cryptocurrency to fund jihadist activities.

Danske Bank

Meanwhile, major banks like Danske Bank get indicted for money laundering to the tune of $325 billion. As reported by Bitcoinist, anti-Bitcoin banks have paid more than $240 billion in fines for money laundering indictments since the financial crisis of 2008.

Warren Buffett is another Bitcoin basher who has previously called the top-ranked cryptocurrency “rat poison.” Never mind that Berkshire Hathaway (owned by Buffett) has a ten percent stake in Wells Fargo, a bank with 93 violations and more than $14 billion in penalty fines.

Do you still pay attention to the opinions of nocoiners like Roubini? Share your thoughts with us in the comments below.


Images courtesy of Shutterstock, Bitcoinist archives, Twitter (@DecentralizedF and @inside_r3)

The Rundown

Share
Dub 03

Elon Musk ‘Resigns’ as Dogecoin CEO After Price Soars 30%

Dogecoin has become the unexpected new champion of the sudden cryptocurrency bull market which gripped the industry this week – thanks to Elon Musk.


Musk Pets ‘Pretty Cool’ DOGE

In a series of surprising yet distinctly familiar tweets, Musk, who has hinted at his alleged fondness of Dogecoin, said the meme-based cryptocurrency was his “favorite” and described it as “pretty cool.”

Another post claimed Dogecoin “rules (sic),” while Musk also linked to an article about the current market from fake news outlet The Onion, commenting that “Dogecoin value may vary.”

All appearing April 2, it remains unknown whether Musk had a specific purpose in his advocacy, or whether the episode was simply a delayed reaction to an April Fools Day contribution by Dogecoin itself.

On Monday, developers had published a Twitter survey asking users to name a fictitious ‘CEO’ of the cryptocurrency, itself a long-running community in-joke.

Musk, who ‘competed’ for the position with Ethereum co-founder Vitalik Buterin, Litecoin creator Charlie Lee and Metal Payments CEO Marshall Hayner, easily won the run-off and inherited the title. However, from his Twitter account information, it appears he has already quit.

Three Tweets, One Big Pump

Regardless, the effect on Dogecoin was immediate and decisive: as of press time, the altcoin had made daily gains against the US dollar of almost 35 percent.

DOGE/USD currently trades around $0.0033, its highest since early November.

Elon Musk quickly gained the attention of the cryptocurrency community on Twitter, with traders extrapolating potential endorsement of the wider industry beyond DOGE.

Tuesday’s gains meanwhile were not enough to put DOGE back into the top twenty cryptocurrencies by market cap, with some other well-known assets delivering stronger returns.

Those included Bitcoin Cash, which advanced 45 percent over the past day, and Augur, which managed 34 percent.

When Bitcoin?

While previously publishing pro-DOGE tweets, Musk’s latest entry builds on momentum which has bound him to the crypto world in recent months.

Specifically, since February, a community effort has sought to involve the Tesla CEO in Lightning Torch, a transaction relay on Bitcoin’s Lightning Network.

As Bitcoinist reported, the ongoing event has seen major publicity and participation from figures including Twitter’s CEO Jack Dorsey. Despite pleas, however, Musk has so far refrained from following suit.

Last September, Musk had recruited Dogecoin’s creator, Jackson Palmer, to help him combat the problem of scam bots infecting Twitter, a problem which persists for many.

Palmer provided Musk with a script, revealing they had held offline discussions about the issue.

“…We had a good chat on how (Dorsey) and the Twitter team should definitely automate and fix this problem on their end,” he tweeted.

What do you think about Elon Musk’s Dogecoin propaganda? Let us know in the comments below!


Images via Shutterstock

The Rundown

Share
Dub 02

Augur Prediction Market Platform May Have Design Flaws

An analysis of irregularities discovered in the Augur decentralized prediction market platform has identified a number of design flaws. Namely, it identified a potential attack vector based on discrepancies between a market’s expiry date and its outcome date.


How A Prediction Market Works

A prediction market would seem an ideal use-case for blockchain, harnessing the trustless nature and lack of centralized control. Augur uses the Ethereum blockchain, and allows an individual to create a prediction market based on any definable event.

The market creator defines the topic, end date, and potential outcomes, plus an adjudicator if so desired. Trading (denominated in ETH) continues until the event-end, at which point Augur token holders (or designated reporter) determines the outcome. Token holders stake their Reputation (REP) on the outcome and receive settlement fees.

Houston, We Have A Problem (or Two)

Aside from potentially-illegal markets, covering topics such as assassinations and terror attacks, there are some key fundamental issues.

Owing to its steep learning curve, many Augur users rely on various web interfaces, which offer non-standard features and are open to manipulation. In particular, many users gravitate towards markets which appear trustworthy to others. This creates a feeding-frenzy around the few markets with reported volume, which the market creator may well have manipulated.

Disputed outcomes go to a voting procedure, with users staking REP, and receiving rewards if they choose the winning outcome. This incentivises users to vote for the most popular outcome, regardless of whether it is the true outcome. On top of this, the validity bond, which is lost if a market is deemed invalid, remains fixed, so bad actors can continual create bogus markets.

Potential Attack Vector

A recent example of how this system can be manipulated, was based on the ‘general price of Ethereum’ at the end of the day on March 31st (UTC). The market expired at 01:59 on April 1st (UTC+8), which is before the outcome date, which could cause this contract to be deemed invalid.

By creating multiple outcomes, one of which was unrealistic (ETH over $1000), and one seemingly easy to achieve (ETH between $100 and $1000), it just required a bit of wash-trading to lure punters in.

The attacker would then send a limit sell order for the ‘easy’ outcome, for a quote which is above the reward for an invalid result, but below that of a supposed ‘good deal’. Thus users will fill the order, unknowingly being potentially stuck in an invalid market.

An invalid market results in an equal amount of ETH going to shares of each outcome. In a three outcome market (the final outcome being ETH < $100), each outcome would be marked at 1/3 value. With the majority of participants backing the ‘easy’ outcome, a disproportion return would go to the ‘unrealistic’ backers.

Fixing A Hole Where The Rain Comes In

Whilst Augur has already identified several of the concerns, there has been no official announcement of improvement implementation. Meanwhile, users are still exposed to this kind of attack.

Indeed, the same creator has already made a new market with the same flaw called ‘Ethereum Price at End of April’. There are also copycat markets springing up to catch users unawares.

Until these flaws are fixed, users should probable consider Augur, ‘buyer beware’.

Will blockchain-based predictions markets realize their potential? Share your thoughts below!


Images via Shutterstock

The Rundown

Share
Bře 29

Hong Kong Wants STO Investing To Be Reserved for the Super Rich

The Hong Kong Securities and Futures Commission (SFC) will no longer let its citizens invest in STOs–unless they have at least $1 million.


STOs for ‘Professional Investors’ Only in Hong Kong

In what they call a move to protect investors, Hong Kong’s financial watchdog clarified its position on STOs yesterday. The Hong Kong Securities and Futures Commission (SFC) reminded investors that digital assets are still highly risky. This means they should be in the realm of ‘professional investors’ only.

To be clear, it doesn’t matter if savvy investors have made the right call on the market or sharpened their trading skills. If they don’t have a portfolio of at least $1 million (HK $8 million), STOs are off the table for them.

The announcement comes after the SFC launched its regulatory sandbox for cryptocurrency companies in November 2018. In a statement on Thursday, the SFC said that security tokens fall into the same category as securities, which meant that they were subject to the same existing laws.

Foreign Entities Can No Longer Freely Target Hong Kong Investors

The latest crackdown on STOs, which have become a compliant replacement to ICOs in just about every corner of the world, is not limited to companies based in the region. According to the SFC statement, anyone marketing or distributing security tokens targeting Hong Kong investors must obtain a local license.

Moreover, digital asset providers must comply with three key requirements laid out by the SFC. They must restrict their offerings to professional investors only. They must provide clear and comprehensive investment advice and guidelines, and must encourage investors to carry out their own due diligence.

If they fail to do this, they will either lose their license or trigger “disciplinary action” from the financial watchdog. According to the statement:

It is a criminal offence for any person to engage in regulated activities without a licence unless an exemption applies.

SFC: Not an Outright Ban But Almost as Bad

ICOs are all but dead. This time last year, ICOs raised $1.74 billion. This year the figure is bearly making the chart at just $46 million.

STOs have emerged as a more secure and regulated way to invest in cryptocurrency companies. Unlike ICOs, they bear most of the hallmarks of IPOs, depending on the jurisdiction.

However, even in the United States, with its 70-year-old rules, not all STOs are reserved for the super wealthy. Hong Kong may not be outright banning STOs like mainland China. But they’re moving a step further to strangling innovation here–and leaving retail investors at the gates.

Should and will STOs be reserved for wealthy investors? Share your thoughts below!


Images via Shutterstock

The Rundown

Share