BitGo: Crypto Water Cooler — Aug 21
GM. It’s Wednesday, August 21.?
Newsmakers
Polymarket Shakes Up Previously Cloistered World of Political Forecasting?
?Blockchain technology already disrupts numerous industries. So, what can it do with the formerly stodgy political forecasting??
?Enter Polymarket, the predictions market on the Polygon blockchain. This platform is shaking up crypto, politics, and beyond as armchair pundits bet on whether Bitcoin will surpass $100K, if Japan will raise interest rates, and how many times Elon Musk will tweet. Launched in 2020, the platform has already exceeded $1B in 2024 trading volume.?
Its biggest splash: betting on U.S. elections. This is true despite that, technically, people in the U.S. aren’t allowed to use the site. The U.S. places significant restrictions on organized gambling, especially with electoral politics. In 2022, the CFTC fined Polygon $1.4MM for “failure to seek regulatory approval”; this May, the CFTC proposed a ban on election betting contracts. Still, 25% of the site’s traffic is U.S.-based, typically accessed through VPNs.
?Polymarket’s assets have tripled this year with $600MM+ wagered on the U.S. presidential election alone. Bets start at $0.44, so it’s a low barrier to entry and, currently, Polymarket does not charge fees (although they’re likely coming).
?So, what’s the draw? In a Slate interview, founder Shayne Coplan calls Polymarket “unbiased” and an “alternative news source” combating the “misinformation pandemic” by offering “financial incentives for the truth.” Plus, you can’t argue with success, and it seems that having would-be forecasters “put their money where their mouth is” works. Polymarket users predicted that Biden would drop out of the race and Walz would be Harris’s vice-presidential nominee.?
?Perhaps the enthusiasm is not surprising, Slate writes. In an era of “meme stocks, crypto speculation, and legalized sports betting,” people are now “making a buck on the future of our democracy.” What’s more remarkable: how legitimate this has become “in the rarefied world of election-casting—and how powerful an indicator it has become in modern-day politics.”?
Polymarket’s who’s who list includes a $70MM funding round led by Peter Thiel’s Founder’s Fund with Vitalik Buterin contributions. Plus, renowned statistician Nate Silver, who previously disrupted political forecasting, sits on Polymarket’s advisory board.?
?The platform endured its largest single-day drop in open interest as the Olympics wound down, ushering in a sports betting lull. Interest, though, is already rebounding. Volume, post-election, will be interesting to monitor.
?Read more →Forbes($)
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Tokenization’s Next Frontier: Agricultural Supply Chains and Global Trade
One key benefit of tokenization is fractionalization with investors owning portions of treasury bills, real estate, fine art, and more. So, tokenization benefits may not be immediately clear with agriculture because assets can already be easily divided physically. The magic may lie in the tokenization of cross-border agricultural contracts—when farmers sell to processors, traders, and retailers—that account for $2.32T of the industry’s $14.4T market.
?Today’s fragmented agricultural supply chains require numerous third parties, raising costs and reducing profits. Plus, because the supply chain’s beginning—in this case, farmers—bears the majority of risk for the percentage of profits received, they benefit the least. According to a UK study, on a pack of mild cheddar, the farmer receives only 1% of the profit while the processor earns ~10% and the retailer ~70%.
?Tokenization and smart contracts can provide solutions. This democratized approach to buying and selling can increase farmer profits while lowering consumer costs. Tokenization can reduce cumbersome documentation, provide instant contact settlements, and offer cohesive trade processes between jurisdictions. With this streamlined approach, food production and distribution can become more sustainable, ideally allowing farmers to provide global food security for a growing population.
?As a real-life use case last month, one South Africa to London wine transaction settled on-chain served as one of the first agricultural trades on Solana. Fees were only ￡5 with funds settled in seconds. Compare this to the industry average of 6% in fees with settlement times of three to seven days. On Algorand, the Argentinian-based Agrotoken allows farmers to directly and globally transact with their grain; each ton of grain is digitized into an Agrotoken.
?Additional possibilities: farmers could own fractions of processing facilities or storage units; combat fraud through autonomous document verification; enhance food traceability to ensure safe, sustainable sourcing with tokenized organic/fair trade certifications; and give consumers more confidence in food quality provided.
?In a partnership between the farmer-focused blockchain Farmsent and Web3 domain provider Unstoppable Domains, new domains ending in .farms will allow farmers to connect directly with businesses serving consumers, eliminating intermediaries and transacting with global buyers using more than 275 supported crypto tokens.
?Read more →Science Direct
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Rebalancing the Scales: DAOs Tackling Voting Power Imbalances in Governance
?Ideally, DAOs democratize blockchain and token governance—real-life “people power” as users share innovative ideas and vote on proposals to shape the technology’s future. In reality, though, voting hasn’t been egalitarian with bigger investors having the majority of voting power. Some DAOs are looking to remedy that.
?In 2022, Chainalysis data showed that—across ten major DAOs—1% of token holders held 90% of voting power. This disengaged many DAO members, including builders and others with niche knowledge who could significantly contribute to DAO development. As of 2023, only about 20% of members of the top two hundred DAOs even bothered to vote. (About 52.2% of Americans voted in the 2022 Congressional elections.)
?This imbalance and apathy have led to real-world problems. In July 2024, Ethereum-based lending protocol, Compound, suffered a $25MM attack after a “group of buccaneering DeFi players” bought enough governance tokens to give themselves 499,000 COMP tokens from the DAO. (They agreed to return them after approval of protocol fee sharing.)
?Arbitrum’s DAO is concerned that something similar could happen in their upcoming vote about changes to its native token, ARB. This Layer 2 solution serves as Ethereum’s largest rollup blockchain—overseeing $1.8B of crypto. Voter participation has been “steadily declining” while significant Arbitrum assets could attract bad actors like those who targeted Compound. To address apathy, Arbitrum will vote on a revenue sharing plan in October.
?Meanwhile, Lido, the largest DeFi protocol with $25B in deposits, launched a pilot program to pay members who vote on others’ behalf. These “delegates” will operate like “politicians in a representative democracy.” MakerDAO is experimenting with rewarding users who vote through gamified experiences by offering higher yields.
?ApeCoin DAO will continue to allow voting power through investment sizes but also through forum participation. Optimism is using a traditional approach along with a Citizen’s House with a one vote per person system to balance voting power. Otterspace and Gateway are working on proof-of-participation models to grant voting rights. The hope is to create a more egalitarian system in which a genuine desire to contribute is how a user gains an equal-weight vote.
?Read more →DL News
News In Brief
Business of Crypto
Regulation and Security
DeFi and Web3?
Midweek Market Pulse
Total Market Cap: $2.1T – 7-day change as of Tuesday 8/20/24 12 PM EST: -1.0%
Crypto prices retreated late last week but rebounded early this week with the total crypto market cap ending up close to where it began the week, falling 1.0% to $2.1T.??
?As a fairly quiet week by crypto standards, activity could soon heat up as U.S. elections near. There’s now $345MM worth of open interest in Bitcoin (BTC, -1.3%) options expiring four days after the November 5th elections. Call options, “which offer an unlimited upside payoff potential at the expense of limited loss” account for two-thirds of total open interest, indicating that traders are bullish that the outcome of U.S. elections will be favorable for Bitcoin. Calls with a strike price of $80,000 are most popular among traders with open interest of over $39MM.?
Ethereum (ETH, -3.1%) continued to drift lower and is now down 26.5% over the past month. One factor pressuring ETH is likely outflows from the ETH ETFs, which stand at a net of $434MM since launching, driven by $2.4B in outflows from the Grayscale Ethereum Trust. Another factor: the supply of ETH is slowly increasing, growing by 60.5K ETH, post ETF-launch, an annualized growth rate of 0.61%. The supply has also increased by 197K since the Dencun upgrade in March.????
?Meanwhile, the proliferation of meme coins on Solana (SOL, -2.7%) has been a major narrative in crypto this year, but Tron (TRX, +18.4%) is now enjoying its own moment in the sun as meme coin traders flock to the blockchain. Tron has now re-entered the top 10 cryptocurrencies by market cap, surpassing the likes of Avalanche (AVAX, +3.7%) and Cardano (ADA, +0.9%). The influx comes on the heels of Tron's own version of Solana’s pump.fun called Sun Pump. This launchpad allows users to easily create their own tokens with few costs or barriers to entry.
The Last Word
Proof of Participation
: a consensus algorithm that monitors work delivered
/ The algorithm tracks time spent online, quality of transactions, and speed of work.
About BitGo
BitGo provides the most secure and scalable solutions for the digital asset economy, offering regulated custody, borrowing and lending, and core infrastructure to investors and builders alike.
Founded in 2013 — the early days of crypto — BitGo pioneered the multi-signature wallet and later built TSS to improve upon other companies’ MPC offerings. Between multi-sig and TSS, BitGo offers the safest technology on the market and safeguards over 600 tokens across a wide variety of blockchains.
Over the years, BitGo has expanded from offering wallets into providing a full-suite solution that lets clients hold assets safely and then put them to work.
BitGo launched BitGo Trust Company in 2018, providing fully regulated, qualified cold storage to complement BitGo Inc’s original hot wallet solution. In 2020, BitGo launched BitGo Prime, which allows its clients to trade, borrow, and lend. Moreover, BitGo also provides access to DeFi, staking, NFT wallets, and beyond, and serves as the world’s sole custodian for WBTC, or wrapped Bitcoin.
Today, BitGo is the leader in digital asset security, custody, and liquidity, providing the operational backbone for more than 700 institutional clients in over 50 countries — a list that includes many regulated entities and the world’s top cryptocurrency exchanges and platforms. BitGo also processes approximately 20% of all global Bitcoin transactions by value.
For more information, please visit www.bitgo.com.
?2024 BitGo Inc. (collectively with its affiliates and subsidiaries, “BitGo”). All rights reserved. BitGo Trust Company, Inc., BitGo Inc., and BitGo Prime LLC are separately operated, wholly-owned subsidiaries of BitGo Holdings, Inc., a Delaware corporation headquartered in Palo Alto, CA. No legal, tax, investment, or other advice is provided by any BitGo entity. Please consult your legal/tax/investment professional for questions about your specific circumstances. Digital asset holdings involve a high degree of risk, and can fluctuate greatly on any given day. Accordingly, your digital asset holdings may be subject to large swings in value and may even become worthless. The information provided herein is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation. BitGo is not directing this information to any person in any jurisdiction where the publication or availability of the information is prohibited, by reason of that person’s citizenship, residence or otherwise.
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3 个月Very helpful!