SEC considers decreasing accredited investor requirements

Today, the SEC released a proposal to loosen accredited investor requirements which will increase access to unregistered securites. Traditionally, for a person to become an accredited investor they either had receive annual income higher than $200k or have greater than a $1 million net worth. If the proposal succeeds, SEC requirements may change to allow people with certain certifications or education to become accredited investors.

Becoming an accredited investor allows individuals to invest in things like private equity, hedge funds, venture capital, and equity crowdfunding. Some feel like forbidding average citizens to have access to these types of investments is akin to discrimination while others believe opening the gates would help pump markets and foot the bill to newcomers.

SEC Chair Jay Clayton believes that modernization is long overdue.

“The proposal would add additional means for individuals to qualify to participate in our private capital markets based on established, clear measures of financial sophistication”

Potentially, all it would take is a bachelors degree to participate in an unregistered securities market.

Crypto Twitter has reacted quite positively to this announcement, as they tend to have a liberal outlook on open finance. Anthony Pompliano, who is essentially a spokesperson for Bitcoin in mainstream media, tweeted about the event.

“This is a step in the right direction. We must stop discriminating against 80%+ of Americans based on wealth.”

I believe that a reason crypto is such a popular investment within young demographics is because it allows them freedom that the government tries to take away from them. Not to say all of the freedom is safe, but young people with an internet connection don’t like to be censored. This is why you have tons of college aged students trading crypto with leverage, day trading it and investing in projects that don’t have great fundamentals.

This proposal offers nowhere near as much freedom as the crypto space does, but they are obviously trying to find a balance in this new world. We will update this article as the story progresses.

Justin Sun and Poloniex are advertising 64% interest on USDC

Poloniex just announced USDC and USDT lending for EU users, with interest rates as high as 64% APR. This is basically an unprecedented rate of returns for lending money, especially USDC.

There is a disclaimer at the bottom of their advertisement saying “Lending on Poloniex is inherently risky and may not be suitable for all users,” but that isn’t anything outside of the norm.

Coinbase lets users earn interest on USDC, but their rates are about 1.25% because they are not actually lending the tokens. A better comparison to Poloniex would be a decentralized protocol such as Compound that is currently paying 8.4% APR for lending USDC.

The main difference between decentralized lending protocols and Poloniex is that your funds are locked for a certain amount of days on Poloniex, and it is specifically used for margin trading. In Compound, users can take out their money as they please because it is in a lending pool format. The only time they aren’t allowed to take money out is when all funds are being used.

Poloniex has users determine how many days they would like their funds to be locked up which takes part in determining their interest rates. 64% seems too good to be true, but it might actually be possible since it is the first day that the program is releasing and they need to attract users to be the first to lend. Unfortunately, as someone in the US, I am not able to see exactly what it takes to get 65% APR.

Possibly the funniest part about all of this is Justin Sun’s response. Sun is an investor in Poloniex exchange but the way he speaks on it makes it seem like he has no involvement whatsoever. Here’s a quote from him:

“APR 65.46%?I have 100 million #USDC and want to deposit🤣 $USDC $USDT

After Poloniex changed leadership roles with new investments, they acquired TRON’s biggest decentralized exchange, listed TRON and let TRON projects become listed with no fees. People have their opinions on the integrity of the TRON project, as they will about these extremely high interest rates.

2% of the Sai supply was liquidated today

Sai, formerly Dai has seen $1.2 million in liquidations today with a supply of $45 million. A few months ago, Sai’s supply was around $100 million before the release of the new Multi-Collateral Dai, which is now called Dai. Sai is created by collateralizing Ethereum worth 150% of the Sai a user is taking out.

LoanScan is a great website to look at statistics in the DeFi space. We found the amount of Sai liquidations today through their “Collateral Liquidated.” Maker Liquidations

As you can see, this isn’t the biggest spike in liquidations in the past month. Around November 20th, the price of Ethereum dropped around twice what it has in the past few days and liquidated $2 million worth of Sai. November 18th is when Multi-Collateral Dai released, so that could have had an impact as well.

The minimum collateral of Ethereum to Dai in Maker’s system should be around 150%. Maker’s Collateral ratio is getting eerily close to that point having dropped from 315% to 235% within the past month. Reaching around 115% would essentially destroy the system.

On the same token, Maker doesn’t really care if Sai fails because they are planning to call on an emergency shutdown anyways. Maker is proud of their new innovations in Multi-Collateral Dai and would like everyone to manually convert their Sai tokens to Dai before the emergency shutdown begins.

Because of Ethereum’s price volatility, users that have Sai CDPs have been dumping more Eth into their contract in order to avoid liquidation. Today, about $8 million USD in ETH was added to Maker’s Sai contracts according to LoanScan.

I think everyone in the industry is hoping that prices don’t fall for too much longer. Bitcoin is getting very close to the $6k support levels that price bounced off of for around 10 months in 2018. Pushing below that support once again could be bad for Bitcoin and the rest of the industry on a macro scale.

Coinfloor, trusted UK spot exchange, delists Ethereum starting 2020

Coinfloor claims to be “the UKs longest established Bitcoin and cryptocurrency exchange,” but starting next year, they will be delisting Ethereum. In a press release today, they mentioned how bitcoin’s track record was incompatible and they were excited to simplify their services.

“The decision will allow Coinfloor to provide a richer set of services for the world’s leading cryptocurrency while maintaining focus on simplicity.” – Coinfloor

The exchange has good liquidity for over the counter purchases, specialized corporate accounts and offline storage. If you could compare it to anything in the US, it would be like Coinbase or Gemini, but clearly with less crypto options. Any average person can sign up for Coinfloor, but the exchange’s services are clearly meant to draw big investors in, or people who value security.

Within the context of institutional grade crypto investments, it’s not very surprising that they would cut off Ethereum. For instance, Bakkt is the most reputable crypto futures exchange in the US and they only service Bitcoin. Still, for Ethereum fans this is just another let down after a long year of their token lacking performance.

Bitcoin and Ethereum increased similarly in value during the 2019 bull market, but Bitcoin make it much closer to its all time high. Ethereum’s high was around $1400 and in 2019 reached around $300, where as Bitcoin’s high was $20,000 and it rose back to $1,400. Subjectively speaking, Bitcoin’s price action has much more energy. When Bitcoin’s price decreases, it still sees huge corrections back up where as Ethereum experiences consistent deflation.

 

 

Nine Chronicles blockchain RPG launches public alpha – Sign ups surpass expectations

Nine Chronicles, an RPG developed by Ubisoft-backed, Planetarium released its public alpha today. This is the first game that Planetarium has released, and it runs on its own blockchain network.

Apparently, the alpha is in demand as there are people begging for invites to the game on their official discord. A channel moderator, Naomi Nam, apologized for a user who hadn’t received an invite, saying, “Sorry, we didn’t expect many people to sign up after the start of Public Alpha.” Another Planetarium staff member told Cryptocult that they saw more than double the expected sign-ups upon release.

The game is a side scrolling, hack-and-slash RPG that promises dungeons, crafting, trading and PvP. It is not a massively multiplayer RPG, but users will be able to battle each other and cooperate in an open economy. Nine Chronicles is tokenized and the name of the token in “Gold.”

“Nine Chronicles has Gold as a main coin. You can use it for combining materials and trading. Players can earn the gold by mining blocks or selling items to market,” Jaehyun told us on Discord.

Many blockchain game developers opt to build on blockchain platforms that are widely known, like EOS or Ethereum, but Planetarium believes that each game having its own blockchain network will help avoid governance issues.

“Decisions about the game are to be determined by the needs of the games, not by the platform. We should define the game first, not the blockchain underneath it,” Planetarium CEO told Coindesk.

Planetarium expects the game to be appealing to people who like to modify the worlds they play in. From the start, all coding will be open source and users will be able to share designs through GitHub. The team cites Blizzard’s control over games as a hinderance towards creativity, but many triple A games censor user created content.