Weekly Update, August 30 2021
Weekly crypto news update for August 30th, 2021.
How El Salvador is Prepping to Roll Out Bitcoin
By now, most people are aware that El Salvador is making Bitcoin legal tender, but what does a country adopting Bitcoin actually look like? According to the president, Nayib Bukele, the El Salvadoran government will be building 50 locations to swap fiat and Bitcoin, as well as installing 200 Bitcoin ATMs. The country plans to continue building infrastructure to make using Bitcoin as convenient as using fiat currency. Part of the transition to a digital economy is rolling out a state-issued Bitcoin wallet, Chivo.
When asked what would happen if someone didn’t want to use Bitcoin, President Bukele responded “Don’t download the app and continue living your normal life. Nobody is going to take your dollars [...] Someone can always queue up at Western Union and pay a commission.”
Earlier this year, the President discussed exploring mining Bitcoin in El Salvador using volcanic-derived electricity as a sustainable, clean energy source. This is an important move because one of the biggest concerns with Bitcoin has been the electricity required by the ‘Proof of Work’ system Bitcoin utilizes, which has ballooned as the value of mining has increased.
El Salvador will officially begin adoption of Bitcoin as legal tender on September 7, 2021.
Helium (HNT): The Crypto Mined on Network Hotspots
Helium (HNT) ($2.2 billion market cap) is a "proof-of-coverage" cryptocurrency project operating a global wireless network intended for internet of things (IoT) devices. The Helium network is powered by special hotspots that provide network coverage and mine HNT coins.
The Helium network is provided by companies and individuals running Helium-specific, long-range WiFi (LongFi) hotspots. There are nearly 150,000 active hotspots.
These network hotspots provide low-bandwidth, high-range coverage, making them suitable for IoT devices. Helium claims their hotspots offer "200x the range of Wi-Fi at 1/1000th of the cost of a cellular modem."
Generally speaking, network strength improves for an area as the density of hotspots increases. Each hotspot requires an ethernet connection or a cellular data plan.
Helium will be offering 5G mobile connections soon.
Helium mining is performed on the hotspot devices that provide the network coverage. Popular models include the Bobcat Miner 300 and the RAK Hotspot Miner V2.
Helium network miners earn more HNT when they are near other miners, but each hotspot needs to be at least 1,000 feet apart. A single hotspot with no nearby hotspots earns less HNT because it cannot participate in the proof-of-coverage.
Currently, all mining devices are on backorder for retail customers.
The Bobcat Miner 300 ($429) is known to ship within the estimated timeframe, but that’s currently 12-20 weeks. Bobcat Miners frequently sell for $2,000 on eBay.
The RAK Hotspot Miner V2 is likely delayed at least a few months.
Helium has a unique pricing model: they offer unlimited data and charge for device usage, offering support for very large numbers of device connections. Customers operating enterprise-level (greater than 15 hotspots) IoT swarms on the Helium network include Salesforce, Nestle, and Lime.
Helium was co-founded by Napster inventor Shawn Fanning and has been a favorite of tech investors for years. The company raised over $51 million before its public launch in 2019, and earlier this month, Helium announced it had taken on an additional $111 million in funding.
USDC Moves to be Fully Backed by Cash
USDC, the stablecoin from the company Circle and the second largest stablecoin, revealed in July that they were backed by ~60% cash and cash equivalents. They’re now planning to increase that amount to 100% by September, while their #1 competitor in the space, Tether, is being forced to answer questions of validity owing to a failure to reveal their holdings.
Stablecoins are intended to be cash equivalents pegged exactly to a fiat currency (in this case, US dollars); this means that the price of USDC is almost always exactly $1/coin. The holdings that support the stable coin are very important because they can determine the risk of the coin long term, and in theory, the stability of the entire trading ecosystem. USDC’s move to increase cash reserves comes after months of regulators' increased scrutiny of Tether. Earlier this year, Tether revealed that only 2.9% of it’s holdings were in cash or bonds, and the majority of their holdings were in commercial paper, a form of unsecured, short-term debt. Additionally, Tether reached a settlement with the New York State Attorney General’s office over allegations regarding the movement of hundreds of millions of dollars to cover up $850 million in losses. Tether agreed to pay $18.5 million and have been barred from operating in New York.
Circle plans to go public in Q4 of 2021 via a special purpose acquisition company (SPAC). The SEC reporting requirements brought on by being a public company is just another step in Circle’s move to increase transparency and gain customer trust.
The Takeaway: Circle (company behind USDC) has observed the skepticism surrounding Tether’s commercial paper holdings, and is taking the opportunity to move to be fully backed by cash and cash equivalents; doing so should further de-risk USDC and increase consumer trust in the stablecoin.
Cardano (ADA) Ecosystem Introduction
Cardano (ADA) is a faster and cheaper alternative to Ethereum (ETH) that has more than doubled its market cap over the last month. The Cardano app ecosystem is relatively new, but early leaders have emerged: lending and payments platform Celsius, with a market cap above $1 billion, and oracle Ergo, with a market cap above $700 million. The Cardano app ecosystem includes payment platforms, initial DEX offering (IDO) platforms, oracles, and decentralized exchanges (DEXes).
Celsius Network (CEL) - $1.3 billion or $2.4 billion market cap
Celsius Network is a blockchain platform that supports borrowing, lending, and payment processing. Celsius emerged as an early Cardano platform leader. Critics note the platform is heavily centralized, but it was founded by Alex Mashinsky, an influential software engineer and entrepreneur.
COTI (COTI) - $312 million market cap
COTI is a platform for creating crypto payment infrastructures running on Cardano, including creation of stablecoins. It's a buzzy project that recently increased in market cap following an announcement of its pending listing on Coinbase Pro.
Initial DEX Offering (IDO) platforms allow new crypto projects to launch through a decentralized exchange mechanism similar to crowdfunding. Early IDO platform projects on Cardano include:
CardStarter (CARDS) - $124 million market cap
CardStarter is a decentralized accelerator and swapping platform, connecting early-stage Cardano projects with investors.
OccamFi (OCC) - $96 million market cap
Occam offers launchpad infrastructure and a suite of DeFi solutions for new Cardano projects. Occam also plans to launch a Cardano exchange, called OccamX.
Oracles act as a bridge between real-world data and blockchain data, bringing off-chain data into on-chain smart contracts.
Ergo (ERG) - $760 million market cap
Ergo offers "smarter" smart contracts, and it's ideally suited to DeFi projects, including stablecoins.
Charli3 - Small cap
Charli3 is a decentralized Cardano oracle project from the CardStarter Launchpad and CardStarter incubator. Charli3 launched with strong initial partnerships.
Decentralized exchanges (DEX) use algorithms to set asset prices, and facilitate transactions without requiring a seller. New and unlaunched Cardano DEXes with buzz include: YaySwap (YAY), SundaeSwap, and CardStarter project, CardSwap (CSWAP).
Low-Market Cap NFTs with High Weekend Volume
These low-market cap NFT projects did $10-40 million of volume over the weekend:
CryptoZoon (ZOON) - $32 million market cap
CryptoZoon is a digital creatures game on Binance Smart Chain
Binemon (BIN) - $29 million market cap
Creature and real estate game with social features
DEAPcoin (DEP) - $29 million market cap
NFT marketplace and mining game development platform with an in-house trading card battle game
NFTb (NFTB) - $18 million market cap
NFT marketplace with a project launchpad coming soon
UniLayer (LAYER) - $17 million market cap
Advanced trading platform built on top of Uniswap with staking and a fiat onramp
Step Hero (HERO) - $16 million market cap
Fantasy game on Binance Smart Chain and Polygon
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