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Yield farming is a fad, but DeFi promises to change the way we interact with money

The progress DeFi has made thus far is promising, but there’s still a need for better user products, tools and services to reach mainstream adoption….



As the COVID-19 outbreak wreaks havoc on the United States’ economy and abroad, investors grapple with a second economic downturn in just over a decade. While the 2008 financial crisis and the coronavirus pandemic are very different, both events have produced market volatility and allowed for new technologies to emerge.

The economic disruption wrought by the pandemic also highlights the importance of serving people who are currently outside the financial system, both in developing and developed economies. Today, there are 1.7 billion unbanked individuals worldwide, according to the World Bank.

Related: How has the COVID-19 pandemic affected the crypto space? Experts answer

Since the financial downturn, people have begun questioning established companies and traditional systems such as banks. With more than half the world’s population aged under 30 and 55% of the world’s 7.7 billion citizens now online, seeking alternative solutions to the financial structures in place has become much more than a niche. Twelve years after the 2008 financial crisis, people still seem wary of banks. According to a household survey from the Federal Deposit Insurance Corporation, outside of high fees and minimum balances, the unbanked have pointed to a lack of trust and privacy when dealing with banks as reasons for their not owning a checking or savings account. When combined, the lack of trust (16.1%) and lack of privacy (7.1%) account for almost a quarter (23.2%) of the main reasons why unbanked people do not have an account.

The lack of trust for banks created demand for alternative financial services, leading to an increasing quantity of such alternatives where people can put their money. One popular option was technology companies. This idea really took off after the introduction of the iPhone in 2007 and its App Store the following year. Not only did Apple open up opportunities for products and services but it also created a new way to quickly distribute software while keeping the world connected via the internet.

Multiple groundbreaking startups were born from economic downturns. Instagram, WhatsApp, Uber, Airbnb, Twilio, Dropbox and Slack are just a handful of the successful startups founded during the last recession. Not only were multibillion-dollar brands built in the years following, but fintech startups like Kabbage, LearnVest and Betterment started popping up around Silicon Valley and making major inroads toward the digitization of banking. These fintech apps have not only taken out some of the intermediaries but also drastically changed the way people interact with money on a daily basis.

Related: Crypto banks are going to swallow fiat banks in 3 years — or even less

Financial exclusion

Uncertain times pave the way toward a better world as people look to more reliable alternatives to the financial institutions that have failed them. Just as the 2008 recession forced successful startups out of the rubble, 2020’s COVID-19 pandemic is doing the same. Today, we’re seeing the unemployment rate rise due to COVID-19. This fall, the United States Bureau of Labor Statistics reported that long-term unemployment, or those that have been out of work for 27 weeks or more, jumped to over 2 million — the highest thus far in the coronavirus pandemic-induced recession. Though some people have returned to work, data shows a marked increase in unemployment rates over the past seven months.

With anxiety at an all-time high, both consumers and businesses are looking to banks and credit unions for financial relief, access to government aid, and guidance on how to cope with the ongoing economic storm. However, institutions are failing, and unfortunately, the systems put in place to protect us such as healthcare, testing, protective equipment and supply chains have crumbled from poor leadership and delayed reactions. Just like in 2008, consumers are turning to technology for solutions.

An opportunity for DeFi

This represents a massive opportunity for fintech today, specifically decentralized finance, as it has the ability to provide most of the population access to financial services. As the hot, new cryptocurrency trend of 2020, DeFi cuts down intermediaries such as banks, thereby adding to the speed of transactions. Total value locked on DeFi platforms has risen by approximately $12 billion in the span of one year, according to industry site Defi Pulse. During a time when central banks are slashing interest rates with a benchmark rate sitting close to zero, investors are on the hunt for new returns and are now ready to explore DeFi.

Over the years, raising funding has been challenging for fintech firms, particularly early-stage ventures, as investors typically focus on established startups with clear business models. However, the economic slowdown has significantly changed the narrative around Bitcoin (BTC), DeFi, stablecoins, privacy and more. The value locked into DeFi projects continues to surge, but a milestone less discussed is the industry having crossed $500 million raised in venture capital funding.

According to data collated by CB Insights on the fintech space in the third quarter of 2020, 60% of all capital raised by financial technology startups came from just 25 rounds worth $100 million or more. Adding to the trend of growing venture capital funds, the report noted that fintech investment from $100 million rounds grew 24% compared to Q2, while investment in the space from smaller deals fell 16% over the same timeframe. Overall, fintech deal volume dipped 24% compared to Q3 2019, totaling 451 global deals. However, dollars invested into fintech startups edged up once again to $36.5 billion in Q3 2020, the largest result thus far in 2020 and the second-best, single-quarter result since year-end. Notably, the number of smaller venture rounds — those marked “seed” or “angel” — grew by 20% compared to Q2 2020.

Related: Chasing the hottest trends in crypto, the EU works to rein in stablecoins and DeFi

With all eyes on DeFi, it’s time to understand that it’s less about the insane returns offered to yield farmers and more about the democratization of finance. While still in the sector’s early years, DeFi projects are already unpacking inefficiencies in the current system by increasing financial inclusion, increasing liquidity and reducing costs. Since the start of Q3 2020, “deposits by cryptocurrency enthusiasts into DeFi projects have swelled to more than $10 billion from $2 billion.”

Beyond finance, there is a growing interest in DeFi and its potential to improve existing current systems and infrastructures. It’s no longer acceptable for industry players to promote an “incredible tool for inclusion” while no work is being done on the usability front. Despite the sector’s incredible promises, the level of complexity for users is still a major barrier to mass adoption.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Tim Frost is the founder of Yield, a fintech app making DeFi accessible to everyone. Specializing in early-stage blockchain startups, Frost helped accelerate blockchain companies at the likes of QTUM, NEO, Paxful, Polymath, Selfkey and Everex. He was also a founding member of the Wirex, a digital banking platform, and helped grow EQIBank. His expertise in banking, blockchain and technology has played an influential role in helping develop the tools and products for Yield.

The lack of trust for banks created demand for alternative financial services, leading to an increasing quantity of such alternatives where people can put their money. One popular option was technology companies. This idea really took off after the introduction of the iPhone in 2007 and its App Store the following year. Not only did Apple open up opportunities for products and services but it also created a new way to quickly distribute software while keeping the world connected via the internet.




Massachusetts regulator seeks to revoke Robinhood’s broker-dealer license

Massachusetts’ securities regulator is seeking to revoke the broker-dealer license of cryptocurrency-friendly stock trading app Robinhood in the state.



State regulators claim that Robinhood has targeted inexperienced investors.

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Massachusetts regulator seeks to revoke Robinhood's broker-dealer license

Massachusetts’ securities regulator is seeking to revoke the broker-dealer license of cryptocurrency-friendly stock trading app Robinhood in the state.

William Galvin, the head of the state’s securities division, said in a new administrative complaint that Robinhood has “continued a pattern of aggressively inducing and enticing trading among its customers — including Massachusetts customers with little or no investment experience,” Bloomberg reports Thursday.

The new filing is a follow-up to a complaint filed by Galvin’s office in December 2020, alleging that Robinhood’s marketing illegally targeted inexperienced investors.

The state pointed to Robinhood’s recent activity, including a promotion that provides customers with cash rewards based on new deposits, as proof of a “firm culture which has not changed.”

Robinhood responded to the new complaint, arguing that the action could prevent “millions of Bay Staters” from accessing their platform. In December, the company said that its platform had nearly 500,000 customers in Massachusetts.

The firm has filed a lawsuit seeking to invalidate a recently adopted fiduciary rule in Massachusetts that state regulators have accused it of violating. Adopted in 2020, the rule requires broker-dealers to act in their clients’ best interest.

“The Massachusetts Securities Division’s new Fiduciary Rule exceeds its authority under both Massachusetts state law and federal law,” Robinhood said. “Robinhood is a ‘self-directed’ brokerage firm that does not make investment recommendations or provide investment advice. By its own terms, the new rule does not apply to self-directed firms,” the firm noted in the lawsuit.

Robinhood has faced mounting pressure from regulators and users alike after it became involved in the controversial GameStop stop short-squeeze. Robinhood halted buying for GameStop stock in January 2021, drawing the ire of the trading community.

Last year, 20-year-old Robinhood user Alex Kearns committed suicide after seeing a $730,000 negative balance on his Robinhood app. A note on his computer reportedly posed the question, “How was a 20 year old with no income able to get assigned almost a million dollars worth of leverage?” In February 2021, Kearns’ parents filed a lawsuit against Robinhood over his death.

Robinhood has been also experiencing a number of technical issues, reportedly causing major losses for traders and triggering further legal action against the company.

The most recent such event occurred on Thursday when Robinhood’s crypto trading platform ran into technical issues as Dogecoin (DOGE) hit a new all-time high of $0.27.



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Binance Coin reaches 37% of Ethereum’s market cap: 3 reasons why BNB is soaring

Binance Coin (BNB), the native cryptocurrency of Binance Smart Chain, has been rallying after seeing an uptick in transaction volume.



Binance Coin, the native cryptocurrency of Binance Smart Chain, has been surging with a massive uptick in transaction volume.

Binance Coin reaches 37% of Ethereum’s market cap: 3 reasons why BNB is soaring

Binance Coin (BNB), the native cryptocurrency of Binance Smart Chain and top digital asset exchange Binance, is starting to close in on Ethereum (ETH) in market capitalization.

As of April 12, BNB is valued at $87 billion at the price of just under $600. The valuation of Ethereum is hovering at around $246 billion, which is 2.8 fold larger than that of Binance Coin.

— Joe Grech (@JoeBGrech) April 12, 2021

The technical momentum of BNB has been so strong that it briefly surpassed the volume of the BTC/USDT pair on Binance.

This trend is significant because USDT is the biggest stablecoin in the global market and the BTC/USDT pair is one of the most liquid trading pairs in crypto.

Why is Binance Coin surging so hard?

Binance Coin has been rising due to the three key reasons: an overall uptick in the popularity of Binance Smart Chain, strong technical momentum, and the gap between BSC and Ethereum projects.

Binance Smart Chain transaction volume. Source:

In recent weeks, the transaction volume on Binance Smart Chain has tripled the volume of the Ethereum blockchain.

Particularly in Southeast Asia, the usage of Binance Smart Chain has been rising, according to Coin98, the biggest venture capital firm in Vietnam that is building a DeFi ecosystem targeted at Asia.

Considering that the price of BNB was much lower than Ethereum until late March, this discrepancy between BNB and ETH likely made BNB a compelling trade.

There is also a big gap in valuations between the Ethereum DeFi ecosystem and Binance Smart Chain, which has been fueling a large portion of the demand for BSC projects.

This has caused the value of BNB to rapidly rise over the past two weeks while ETH has been relatively stable at just over $2,000.

A journalist who covers crypto in China known as “Wu Blockchain” explained:

“BNB broke through an astonishing $600, but Ethereum’s Fees fell to its lowest point in a month. Although the transaction volume of BSC is 3x that of Ethereum, the two are not in a competitive relationship. The top 10 addresses of BNB hold more than 88%, and Eth is 20%. The future of Ethereum depends on the upgrade of EIP-1559 and 2.0. The only two things Binance needs to worry about are the government suppression and hackers.”

Traders foresee BNB to undergo a more explosive rally in the foreseeable future if it breaks out against Bitcoin.

Kaleo, a pseudonymous cryptocurrency trader, said:

“$BNB breaking above this level on the $BTC pair could lead to the type of explosive momentum needed to actually close in on $1,000.”BSC/BTC 1-day price chart (Binance). Source:, KaleoWill the capital rotate back into Ethereum?

However, Kelvin Koh, the managing partner at Spartan Group, one of the largest DeFi-focused funds in Asia, said that for now, he expects the capital to rotate back into Ethereum as BSC projects near the valuation of ETH equivalents.

He emphasized that there is a huge valuation gap between BSC and ETH projects. This gap could be making BSC projects compelling to the market. He said:

“BSC is having its own DeFi summer….so much alpha to be discovered in BSC ($XVS, $CAKE). If you are wondering why Ethereum DeFi coins are lacklustre, its because of the huge valuation gap that still exists between the BSC coins and ETH equivalents. Until this gap closes, money isn’t rotating back to ETH DeFi coins.”



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Our Man in Shanghai: Scandal as $45M of stolen government funds lost using 100X leverage

A blockchain security company’s future is in doubt after its CMO allegedly lost $45M betting on Bitcoin; Chinese netizens turn the other cheek to Peter Thiel’s warnings, and more



The Chief Marketing Officer a blockchain security company has been charged with embezzlement; Peter Thiel calls Bitcoin a ‘weapon’ of China (but no one cares), and CZ’s net worth rises to $1.9 billion.

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Our Man in Shanghai: Scandal as $45M of stolen government funds lost using 100X leverage

Blockchain security company Beosin has been the focus of a major scandal after its Chief Marketing Officer Gao Ziyang was taken into custody and charged with embezzlement of state-owned assets. He is alleged to have been using government funds to unsuccessfully short BTC, resulting in a massive liquidation of over 300 million renminbi, or $45 million dollars.

Beosin, also known as Lianan Tech, had a working relationship with Chinese authorities and was helping them investigate fraudulent fundraising schemes. After the seizure of funds back in 2020, Beosin was tasked with storing and selling the assets, to be later returned to the state treasury. Instead of selling the assets, CMO Gao Ziyang allegedly opened a short position in late August, hoping to increase the size of the positions for personal gain. At the time, BTC was trading around $12,000.

Authorities say that records obtained from OKEx show the position began using 10x leverage, before increasing to 100x, and eventually ended up in liquidation. They began to ask about the whereabouts of the funds, before finally realizing that the assets were no longer in the wallet. Online, people have marveled at the age of Gao Ziyang, who was described as in his twenties. The future of Beosin, which was once regarded as a credible blockchain security company in China, is now in serious doubt.

Peter Thiel’s Bitcoin claims ignored

On Wednesday, PayPal co-founder and venture capitalist, Peter Thiel warned that the Chinese government may be using Bitcoin as a “financial weapon” to undermine the stability of the U.S. Dollar. The reaction was quite muted, as only 30 comments responded to the story on Sina Finance, a social media account with over 23 million followers. One of the top comments simply pointed out that “Bitcoin wasn’t invented by China” while another comment simply stated “Impossible”.

Binance billionaire

On Thursday, Binance founder Zhao Changpeng, better known as CZ, appeared as #1664 on Forbes’s annual billionaire list. His net worth is now listed at $1.9 billion, an increase of $700 million from the last list in 2020.

Nanjing Ribensi bought by US company

US Company Future FinTech announced earlier this week that they had agreed to a deal to acquire China-based mining company Nanjing Ribensi Electronic Technology Co. Nanjing Ribensi operates a mining farm that can handle up to 30,000 Bitcoin mining machines. The deal was worth approximately $9.1 million dollars and stipulates that the mining company must generate no less than approximately $2.3 million dollars in 2021.

Blockchain standards accelerated

China’s National Development and Reform Commission called for the accelerated implementation of blockchain standards in a new plan released on April 1. The plan was jointly issued by 28 government departments and also included technologies such as cloud computing, IoT, and big data.

This weekly roundup of news from Mainland China, Taiwan, and Hong Kong attempts to curate the industry’s most important news, including influential projects, changes in the regulatory landscape, and enterprise blockchain integrations.



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