US and Singapore companies collaborating: Okcoin partners with Hodlnaut

“We are building the next generation of tools to help onboard the investors and traders who have been on the fence about crypto,” said Khairi Azmi.

Singapore-based crypto lending platform Hodlnaut will partner with United States crypto exchange Okcoin in an effort to drive adoption and crypto transactions among users.

In a Wednesday announcement, Hodlnaut said the partnership would allow its users and those on Okcoin to purchase cryptocurrencies and earn rewards on their holdings. The lending platform said Singapore-based users already use Okcoin as a fiat on-ramp solution to go from the Singapore dollar to Bitcoin (BTC) and Ether (ETH).

“We are building the next generation of tools to help onboard the investors and traders who have been on the fence about crypto,” said Okcoin’s Singapore general manager, Khairi Azmi. “We believe that this partnership will contribute positively to the crypto ecosystem for consumers.”

According to the announcement, Hodlnaut users will have the opportunity to earn $10 in Bitcoin — roughly 0.00022 BTC at the time of publication, based on a price of $44,524 — for signing up for the platform and fulfilling certain Know Your Customer and trading requirements. Okcoin users signing up for Hodlnaut will also be able to earn a bonus in fiat.

Related: Okcoin secures regulatory approval in Malta and the Netherlands

Founded in 2013, Okcoin is one of the world’s oldest crypto exchanges and has expanded to serve users in more than 190 countries. Though its headquarters are in the United States, Okcoin moved into Singapore in 2020 and allows customers to trade Singapore dollar pairings for BTC and ETH.

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Stanford researcher-led Pledge raises $3M for decentralized lending protocol

Researchers from Stanford University and U.C. Berkeley contributed to the development of the crypto-asset lending platform.

Decentralized lending protocol Pledge has secured $3 million in investments for its cross-chain ecosystem focused on long-term financing, highlighting continued innovation in the DeFi sector. 

The investment round was led by DHVC, a Palo Alto-based venture capital firm, with additional participation from U.C. Berkeley professor Gary LaBlanc and Stanford University community members Ray Wong and Torsten Wendl. The raise will support Pledge’s mission to become a premier crypto-asset lending platform that eventually paves the way for tokenized real-world financial assets.

Pledge was created by a group of blockchain-focused researchers at Stanford University, including professor David Tse, Nicole Chang, Ray Wong and Torsten Wendl. Aforementioned professor Gary LaBlanc also contributed to the protocol.

Utilizing Binance Smart Chain, Pledge aims to facilitate long-term financing for crypto holders, something the researchers say has yet to be addressed in the industry. The protocol achieves this goal by allowing users to diversify their portfolios with non-crypto assets without being exposed to interest-rate volatility.

The protocol is powered by Pledge Tokens, or PLGR, which have a total supply of 3 billion. No market data is currently available for PLGR.

DeFi lending markets have exploded in popularity this year, attracting an influx of new users on the promise of higher yields and increased access to new markets. While Aave dominates the DeFi lending market, several protocols have launched over the past year, each one providing its own value proposition.

Related: DeFi attracts 2.91M Ethereum addresses, according to ConsenSys

Currently, just under $44 billion in total value has been locked into DeFi lending markets, according to industry data. That accounts for just over half of the total decentralized finance market.

DeFi’s growth has attracted unwanted attention from regulators who are growing more concerned about investor protections and whether certain assets fall under federal security laws. As Cointelegraph recently reported, the United States Securities and Exchange Commission has warned cryptocurrency exchange Coinbase that its proposed yield program violates securities laws.

Related: SEC vs. Coinbase: Alex Mashinsky says Celsius will have to ‘wait and see’ on fallout

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Crypto lender Celsius has paid out $250M in rewards

The crypto rewards platform has seen tremendous growth over the past three months.

Celsius, a centralized cryptocurrency lending platform, claims to have paid out over $250 million in rewards to its 415,000 users, underscoring the rapid growth of blockchain lending protocols. 

Celsius announced the milestone in a Monday press release that highlighted the company’s significant growth over the past two years. “Celsius remains one of the fastest-growing companies in finance as it achieves new milestones week-over-week,” the company said.

Unlike decentralized finance protocols, Celsius offers a centralized alternative that lets users deposit crypto assets onto its platform. The deposited assets are lent out to exchanges and market makers, with the vast majority of interest payments distributed to depositors.

By November 2020, Celsius had reportedly paid out more than $80 million in crypto rewards to depositors. That figure appears to have more than tripled, based on Monday’s press release.

Celsius users have the ability to earn weekly rewards of up to 18.5% annual percentage yield on over 40 crypto assets. The company now manages over $8 billion in cryptocurrency assets.

Alex Mashinsky, Celsius’ co-founder and CEO, said:

“Celsius was built to act in the best interest of the community, and we have consistently delivered honest, transparent, and rewarding financial services.”

The continued growth of Celsius helped land Mashinsky a spot in the Cointelegraph Top 100 for 2021. Mashinsky not only helped put Celsius Network on the map in 2020 but he was instrumental in securing an additional $20 million in crowdfunding from over 1,000 investors. The platform’s native token, CEL, vastly outperformed most major cryptocurrencies last year.

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Proposal seeks to overhaul Aave’s $375 million Safety Module

Big changes are coming to DeFi’s second-largest protocol and its $375 million insurance pool

In a largely celebratory community call devoted in part to commemorating lending protocol Aave’s January 8th “Aaveversary” — a full year of Aave on Ethereum mainnet — there was also a look into Aave’s possible future: a proposal from Delphi Digital seeking to fundamentally alter Aave’s Safety Module and create a new insurance product offering. 

Currently, $aave governance token holders can stake their tokens in the Safety Module, a pool of liquidity designed to help insure the protocol against a “shortfall event” such as a smart contract exploit. Stakers risk up to 30% of funds they lock in the Module, but earn a yield in return (currently 4.66%). The Safety Module pool has attracted nearly $375 million in deposits, comfortably the largest decentralized insurance fund of its type.

However, according to Jose Maria Macedo and Jonathan Erlich, a partner and an analyst respectively at Delphi Digital, there are a variety of flaws with this current system. For instance, the Security Module covers the entirety of the platform, meaning it’s difficult to determine market appetite for coverage; there are additional systemic risks with each new project listed on Aave; and Safety Module depositors are covering all projects at different individual levels of risk at the same rate.

Market solutions

The Delphi Digital proposal seeks to overhaul the Safety Module system and create a market-based solution to these flaws. 

“In our most recent proposal, rather than insurance being bundled in with all deposits, it is instead offered as a separate product on the demand side,” said Macedo and Erlich in an interview with Cointelegraph. “This makes it possible to compute cover demand and capacity precisely and thus price risk using market mechanisms.”

Their proposal would add an option for depositors to have a covered deposit or an uncovered one, with the covered deposits offering a lower interest rate in order to account for the cost of the insurance. This would allow the development of a more robust and complex market between Safety Module stakers working within different risk tranches and depositors greater capital efficiency as they can decide what degree of insurance they need.

“We believe [this] design is more efficient because rather than imposing a uniform insurance cost across all Aave money markets, it can instead price each asset independently based on the specific risks associated to it,” said Macedo and Erlich. 

Perhaps most excitingly, this system could become a “generalized insurance” product from Aave designed to compete with projects like Cover and Nexus Mutual. 

“With existing insurance solutions users have to purchase cover upfront which entitles them to insurance on a given protocol for a set amount of time (generally at least 6 months). With the current state of DeFi, most users don’t know where their capital will be next week let alone 6 months from now […] With our architecture, users only pay for insurance while they use it and the process of buying/selling is abstracted away entirely.”

VCs in DAOs?

The proposal is notable not just for potentially introducing a whole new product line into the Aave ecosystem, but also for who architected it: while Delphi Digital offers research and consulting services, they also house a venture capital wing. 

Because of their open, permissionless nature, DAO-governed projects such as Aave can house all kinds of members, including VCs. However, many observers have criticized projects for taking venture capital money prior to decentralizing governance, and believe that the influence of centralized entities can conflict with a wider community’s vision and goals.

In Delphi’s case, however, they may be demonstrating how VCs can help push a project forward.

“Capital is abundant in crypto and when we invest in a project, our goal is never just to invest money but also our team’s intellectual capital and time to help drive it forward,” said Macedo and Erlich. “We’re working on multiple proposals right now and have a long backlog of ideas for proposals and changes we want to make to others.”

While this kind of activism no doubt benefit’s Delphi’s bottom line, it’s also a larger bet of the future of DAOs generally.

“In terms of DAOs, we see them as the next evolution in human coordination. In the long-term, we believe the long tail of organisations will be structured as DAOs, taking advantage of their internet-native, borderless nature and of the efficiency/automation advantages they provide.”

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