The market is bid, albeit modestly so in early trade but the upside remains elusive as ever, with plenty of resistance seen for the majors ahead of key technical levels. Interestingly, there is plenty of action surrounding the fast-growing DeFi market. Maker (MKR) rallied over 5% to its highest price since late September in reaction to the announcement that Multi-Collateral Dai (MCD) will be ready to launch on Nov. 18, according to Rune Christensen, CEO of the Maker Foundation. Christensen announced the news at the DevCon 5 conference in Osaka, Japan, adding that MCD will bring additional CDP (collateralized debt position) types as well as new features such as Dai Savings Rate (DSR), which will allow users to earn on their Dai holdings. Maker (MKR) token holders will soon be able to review and vote on the terms of the DSR, according to the announcement. The positive sentiment immediately buoyed demand for CDPs, with “open” function on MKR portal at its highest level in over 2 weeks. The function allows users to create a CDP, which opens with no collateral. Users need to lock collateral in after the command is called, which then allows users to make loans (Draw).
Looking at the DeFi Pulse, Maker dominance now stands at 52.10% and the amount of DAI locked in DeFi is currently at its highest level since Sept. 25. At the same time, Chainlink (LINK) continues to post strong gains, with much of the recent growth seemingly related to the news surrounding Chainlink's Trusted Compute Framework, which is designed to address blockchain scalability concerns while ensuring that smart-contracts are executed securely off-chain. The“Mixicles” feature is a “new approach to enabling privacy for smart contracts with an initial focus on decentralized finance. Mixicles allow DeFi smart contracts to achieve a new level of privacy, giving them much wider usability.” While LINK continues to rally, the privacy coin Zcash continues to show lackluster performance. As a reminder, Ethereum’s upgrade will include Ethereum Improvement Proposals (EIPs) that address the following issues; aligning the costs of opcodes with their computational costs and improving denial-of-service attack resilience, making layer 2 solutions based on SNARKs and STARKs more cost-effective, enabling Ethereum and Zcash to interoperate (atomic swaps) and allowing contracts to introduce more creative functions.
In terms of news flow, in a letter filed to the New York State Supreme Court on Tuesday, attorneys for Bitfinex, Tether and other affiliated entities wrote that a request made by the NYAG’s office relating to a $900 million loan between sister companies Bitfinex and Tether should be denied. Lawyers for Bitfinex claim the NYAG’s office did not cite any authority supporting its request, further suggesting that the state prosecutor seems to believe that the “collection burdens are meaningless.” That said, the letter admits that simply collecting the documents would require a significant expense. The letter also pushes back against allegations that the exchange is stalling on its court-ordered document production requirements.
As a reminder, back in September iFinex, the parent company of stablecoin issuer Tether and cryptocurrency exchange Bitfinex, “won” an appeal against the New York State Attorney General (NYAG). The appellate division of the state’s Supreme Court granted iFinex’s request to stay a previous court order requiring the company to turn over documents to the Attorney General’s office. This announcement, which has been paraded as a win by the group, should be taken with a huge grain of salt as iFinex has until November 4 to “perfect its appeal” according to a court document, or else the company may be required to continue to comply with the investigation. If the case is allowed to proceed, actual arguments won’t likely begin until 2020.
Thank you for reading,
The BeQuant’s Analytics team