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Cryptos Rise Again

cryptocurrency aug17 20jan23 lt

Cryptocurrencies gained close to 2 percent in the past 24 hours amidst an overall positive sentiment in financial markets worldwide. Overall crypto market capitalization has increased to $981 billion, versus $965 billion a day earlier.

Bitcoin's dominance increased to 41.4 percent, from 41.2 percent on Wednesday. Ethereum's share slipped to 19.4 percent from 19.5 percent during the same period. Stablecoin dominance edged up to 14.1 percent from 13.9 percent two days ago. The share of the residual altcoins is currently 25.1 percent versus 25.4 percent on Wednesday.

Bitcoin is currently changing hands at $21,087.63, up 1.46 percent on an overnight basis. BTC ranged between $21,175.24 and $20,738.79 in the past 24 hours.

Ethereum has also increased 2.1 percent overnight to trade at $1,557.19. ETH traded above $1,500 in the past 24 hours.

76th ranked Nexo (NEXO) gained 17.3 percent overnight after Nexo Capital Inc. agreed to pay $45 million in fines to the SEC. The Securities and Exchange Commission had on Thursday charged Nexo Capital Inc. with failing to register the offer and sale of its retail crypto asset lending product, the Earn Interest Product (EIP).

According to the SEC's order, Nexo sold the EIP in the United States, allowing U.S. investors to tender their crypto assets to Nexo in exchange for Nexo's promise to pay interest. Nexo marketed the EIP as a means for investors to earn interest on their crypto assets, and Nexo exercised its discretion to use investors' crypto assets in various ways to generate income for its own business and to fund interest payments to EIP investors. The SEC order found that the EIP is a security and that the offer and sale of the EIP did not qualify for an exemption from SEC registration. Therefore, Nexo was required to register its offer and sale of the EIP, which it failed to do.

To settle the SEC's charges, Nexo agreed to pay a $22.5 million penalty and cease its unregistered offer and sale of the EIP to U.S. investors. In parallel actions, Nexo also agreed to pay an additional $22.5 million in fines to settle similar charges by state regulatory authorities.

67th ranked Synthetix (SNX), 58th ranked Frax Share (FXS) and 92nd ranked Rocket Pool (RPN) have also gained more than 10 percent overnight.

40th ranked Decentraland (MANA), 89th ranked Casper (CSPR), 49th ranked Tezos (XTZ) and 44th ranked The Sandbox (SAND) have declined more than 1 percent overnight.

Meanwhile, crypto lender Genesis has filed for bankruptcy. The firm, part of the Digital Currency Group was recently charged by the SEC with illegally selling crypto.

A recent working paper published by the Bank for International settlements titled The Technology of Decentralized Finance (DeFi) has attempted to provide a comprehensive overview and classification of DeFi as well as introduce the financial protocols that the DeFi ecosystem builds upon.

The paper defines DeFi as a competitive, contestable, composable and non-custodial financial ecosystem built on technology that does not require a central organisation to operate and that has no safety net. It consists of financial protocols — implemented as "smart contracts" — running on a network of computers to automatically manage financial transactions. It does not require banks or other traditional centralized intermediaries.

To explain the functioning, design and interoperability of such systems, the paper uses a DeFi stack reference (DSR) model comprising three layers viz settlement, applications and interfaces. The settlement layer is responsible for completing financial transactions and discharging obligations. The application layer comprises applications implemented through smart contracts, thus combining crypto assets, DeFi protocols and compositions. The interface layer provides front-end interfaces that facilitate user-friendly interaction with the smart contract logic.

The authors note that DeFi aims at disintermediation and that users interact with smart contracts, rather than with an institution, and no user identification is required. The paper cites the case of Lending in DeFi which is facilitated by smart contracts that hold the crypto assets deposited by the lenders, that in turn can be borrowed by other DeFi users who are also interacting with a smart contract.

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