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RelayNode NYC #16 - August 26

David Gogel

Welcome to RelayNode NYC Area edition! The NYC blockchain ecosystem is growing rapidly. Our goal is to harness its energy and innovation for the benefit of New Yorkers and provide a weekly curated list of interesting content, upcoming events, and local jobs.

Some personal thoughts from the week…
Vitalik Buterin set up a Twitter poll asking “Lending DAI to Compound offers 11.5% annual interest. US 10 year treasuries offer 1.5%. Why the discrepancy?”

The answers highlight many components of the DeFi risk premium, which today include base protocol risks, smart contract risks, UX barriers, lack of awareness, friction & slippage with on & off ramps. A risk premium is a form of compensation for investors who tolerate the extra risk, compared to that of a risk-free asset, in a given investment.

I found Ari Paul’s comments on unknown risks to be very insightful: “a lot of the risk reduction just comes from time. Every day that a smart contract or protocol is heavily used without a problem rationally gives us a little bit more confidence that it's stable.” Under most circumstances, prices consist of a rational component and a mispricing component. Market efficiency and price discovery take time. Let us not forget that Dai launched on Ethereum Mainnet in December 2017, while Compound v2 launched in May 2019. I expect much more experimentation and time to lapse before rates converge.

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RelayNode NYC is curated by:

David Gogel

Advisor @ Paperchain fmr Associate @ Techstars' Blockchain Accelerator, Co-president @ Wharton FinTech

Hsin-Ju Chuang

Director of Community & Growth @TQ Tezos, ex-Head of Growth @Stellar/Lightyear, Side Hustle @Dystopia Labs

Things to read

Funding & Exits

  • xDai (burner wallet), which may be the missing catalyst for mass adoption of current-day stablecoins, has secured $500K in seed funding led by B-Tech, with participation from Bixin Invest and NGC. P2P and private payments, subscription services, blockchain banking and vendor stable payments are among the primary use cases envisioned for xDai, with the goal of furthering real-world adoption of blockchain tech while competing with the incumbent crypto payment processors.  

Macro

  • Delphi Digital published an excellent Q2 2019 Quarterly Macro Outlook report covering multiple economic trends. TL;DR: “the macro backdrop that’s emerging is the perfect storm for bitcoin to thrive as it has the potential to benefit from both secular and cyclical trends in the coming years.”

  • Mark Carney, governor of the Bank of England, prepared a statement to central bankers on challenges for monetary policy in the current international monetary and financial system. Rather than wait for China’s renminbi to challenge the US dollar, Carney suggested a potential solution to create a multipolar global system. He floated an idea, with some similarities to Facebook's Libra, to create a global electronic currency that could act as Synthetic Hegemonic Currency provided through a network of central bank digital currencies “to dampen the domineering influence of the dollar on global trade.” 

Trading

  • PlusToken appears to be one of the largest crypto ponzi schemes ever. According to an analysis by Elementus, the project made away with ~$2B in ETH alone. Almost 50% of all PlusToken withdrawals were sent to the Chinese exchange Huobi.

  • Greg Cipolaro, CEO of Digital Asset Research, released a quantitative model examining the strength of the historical relationship between the price of bitcoin and the Stock to Flow (SF) ratio (inverse of its inflation rate). The SF ratio has had explanatory powers (R Square of 91%) and is of sufficient statistical significance (t Stat of 181.3).

Stablecoins / Open Finance / DeFi

  • Binance announced its plans to launch Venus, an initiative to develop localized stablecoins and digital assets pegged to fiat currencies across the globe. Since its launch last April, Binance Chain has issued stablecoins pegged to Bitcoin and the British Pound. Venus is an attempt to push further adoption of Binance Chain.

  • Linda Xie, MD at Scalar Capital, pens her views on the future of stablecoins. “I believe that centralized and decentralized stablecoins will coexist, with centralized stablecoins likely being the larger market size.” ConsenSys also released its State of Stablecoins report. Since the beginning of 2017, 200+ projects have been announced, but only 30% are yet to be publicly launched, with 66 public and active stablecoins in circulation. 

  • Coinbase released WalletLink, which acts as a secure bridge between the Coinbase Wallet mobile app and the desktop browser. Users scan a QR code once and then can authenticate multiple dApps instead of scanning each time. This lets users use dapps anywhere, while keeping funds safe and secure on a mobile Wallet app. There was some controversy around Coinbase’s decision to go around WalletConnect, which offers a similar service and works with any wallet.

  • After a 10-month joint effort between the Keep team and Summa, Matt Luongo announced tBTC, a trustless bridge to peg Bitcoin on Ethereum and the most recent attempt to bring Bitcoin into DeFi and dApps. Jordan Clifford, Co-founder at Scalar Capital, has a great tweetstorm with highlights from tBTC’s 53-page white paper. Mohamed Fouda, Partner at Token Daily, also has a great post on different pathways for DeFi on Bitcoin.

  • Compound launched an open oracle system for decentralized pricing data. Meanwhile, Joey Krug, Co-CIO at Pantera Capital and core developer at Augur, suggested that the Oracle Wars are about to heat up.

ICOs / STOs

  • INX, a cryptoasset and security token exchange, filed a draft F-1 with the SEC with plans to raise $130M in a security token IPO. This is considered a major milestone as the IPO represents the first security token sale registered with the SEC. The IPO will pay out INX investors via ERC-20 tokens. 

  • According to CoinDesk, Securitize, a provider of tech for issuing blockchain tokens, has registered as a transfer agent with the SEC, allowing them to act as an official record keeper in transfers of tokenized securities. Securitize is now able to keep a real-time cap table of investors and facilitate corporate actions for issuers, including the payment of dividends and interest, conducting shareholder votes and redemptions/share buybacks.

Regulatory

  • The SEC announced a fine of $268K on Russian crypto analytics firm ICORating, for failure to disclose payments made by projects in order to receive positive reviews. As the SEC classifies ICOs as securities sales, promoters such as ICORating are obligated to disclose any financial compensation received for talking or promoting a project.

  • The US Treasury’s OFAC & FinCEN took actions against three Chinese nationals, accused of fueling America’s opioid crisis. The individuals laundered their drug proceeds in part using bitcoin, transmitting these proceed in and out of banks in China and Hong Kong. OFAC identified several bitcoin addresses associated with the individuals, which it has added to its sanctions list. Who said Bitcoin was private and untraceable?

Layer 1

  • Celo, an open platform that makes financial tools accessible to anyone with a mobile phone, announces its ecosystem fund which will be operated by A16z and Polychain to support blockchain startups in developing markets. 

  • In partnership with the Tezos Foundation, Satoshi's Treasure launched a second global hunt where people can solve difficult puzzles and technical problems to receive tokens from a prize pool of 1 million XTZ. The Tezos hunt is very different from the Bitcoin hunt in that it's built on top of a set of smart contracts, which means that clever hunters can be more immediately rewarded for using their problem-solving skills to beat puzzles.

  • The Zcash community is currently having a major conversation about what to do ahead of October 2020, when the first halvening occurs and the Zcash Founders Reward ends. Zooko Wilcox, creator of Zcash, has proposed a new dev fund to help maintain core support functions.

  • Binance Research released a report exploring key factors to evaluate and develop on-chain token economies. In the long-run, a wide variety of programmable blockchains will likely coexist if interoperability solutions across chains develop and prove to be secure and usable.

Highlighted Industry Jobs (non-exhaustive list for NYC / remote):

If you would like to highlight jobs or internships in future editions, please email links here.

Events this week:

Lighter week ahead post Berlin Blockchain Week & many crypto enthusiasts heading to La Playa. We expect events to pick up after Labor Day.

CryptoMondays NYC Fireside Chat with Joshua Frank, CEO of The TIE (Free)

When: Monday, August 26, 2019, 6:30 PM to 9:00 PM

Where: Lounge At The Rose Hill Hotel, 34 E 32nd Street, New York

This CryptoMondays NYC will feature a Fireside Chat with Joshua Frank, the Co-Founder and CEO of The TIE, the most powerful data analytics platform for cryptocurrency traders serving over 25,000 active retail and institutional users.

Hyperledger Fabric for the Enterprise - Privacy and Security Strategies (Free) 

When: Monday, August 26, 2019, 6:30 PM to 9:00 PM

Where: WeWork Dumbo Heights, 81 Prospect St · Brooklyn

Hyperledger Fabric (HLF) blockchain’s architecture was designed from the ground up to be highly extensible with plug and play modules in order to meet most business cases. In this session, we will address the challenges of privacy and security by presenting the best patterns and methodologies, of how to implement enterprise grade HLF blockchain implementations. We will cite real world examples – illustrated with diagrams, code-patterns and in some cases short demos or video segments.


[Whitepaper Wednesday] Visa (Free) 

When: Wednesday, August 28, 2019 12:00pm to 1:00pm 

Where: Rent24, 25W 39th Street 14 Fl · New York, ny

This week, we are reading about off-chain payments. We will talk about Visa's go-to-market strategy and lessons that aspiring peer-to-peer payment networks can learn from it.

 

Upcoming events

Stellar Meetup w/ Stellar Development Foundation & Blockchain Innovation Assoc. (Free)

When: Thursday, September 5, 2019, 6:00 PM to 8:30 PM

Where: 10 Crosby St · New York, NY

Having witnessed universal transition to electronic execution, clearing and settlement since the end of the last century, Alex (founder of Blockchain Innovation Associates) will talk about why blockchain and crypto-assets will be the next breakthrough in the evolution of global capital markets. Kyle from the Stellar Development Foundation will discuss Kelp, the new free and open-source trading bot on Stellar.  

⚡UMA: Intro to Decentralized Finance & Financial Derivatives on the Blockchain⚡(Free)

When: Monday, September 16, 2019, 6:30 PM to 9:00 PM

Where: WeWork Dumbo Heights, 81 Prospect St · Brooklyn

The Flatiron School // Access Labs are proud to support the Ethereum Blockchain Devs Study Group. This is a regular gathering for Blockchain Devs of all levels to learn, present, work on in collaboration with one another or on solo projects in this fast-growing field. Our community is a welcoming space where any Ethereum and decentralized ledger related question is fair game, be it beginner, intermediate, or advanced.

🎤 6:30pm -7:00pm Intro to #DeFi, or Decentralized Finance

🎤 7:00 - 7:30pm: Intro to financial derivatives on the blockchain and demo of UMA’s infrastructure

🎤 7:30pm -8:15pm: Workshop to create synthetic assets on testnet

‍🎤 8:15pm - 8:30pm: Workshop to create synthetic assets on testnet

🎤 8:30pm - 9:00pm: Q&A

Second Annual Blockchain and the Law Conference (Free)

When: Monday, September 16, 2019 from 4:00 PM to 8:00 PM (EDT)

Where: Cardozo School of Law, 55 5th Avenue, New York, NY 10003

Blockchain technology is poised to transform the financial services industry and raises significant regulatory issues. Join us at Cardozo Law School for a unique conversation with current top federal and state regulators to discuss current challenges facing blockchain technology, virtual currencies and the law. A reception will follow the program.

NYC / XRP Part II: The Blockchain Strikes Back (Free)

When: Thursday, September 19, 2019, 6:30 PM to 9:30 PM

Where: 265 W 37th St, 265 W 37th St · New York, NY

Promo Video: https://starwarsintrocreator.kassellabs.io/#!/BLmlBCI5_0daxXsjxJOL. This month's meetup will be in a Tech Talk format, with the feature presentation being: "An Intro to XRP". Light refreshments will be provided and the group will have a chance to socialize & network before we start the slides. Afterwards we may go out to a bar or restaurant, so don't run off!

Introduction to Decentralized Exchanges (Free) 

When: Wednesday, September 18, 2019, 7:00 -- 9:00 PM

Where: 142 W. 57th Street, New York, NY

During this meetup we'll talk about Ethereum, smart contracts and how they are used to build decentralized exchanges. We'll learn about what decentralized exchanges are and how they have the potential to revolutionize how securities are traded. Then we'll take a look at Metro, a project that I have been working on during nights and weekends that attempts to provide a central location to validate and settle trades on the Ethereum network using these three protocols allowing the trading of tokens, debt instruments and options on the blockchain. During this talk we will cover the following technologies: Ethereum, 0x, dYdX, and Dharma.

Security Token NYC - Networking Event (Free)

When: Thu, September 26, 2019, 6:30 PM – 9:00 PM EDT

Where: Sunset Terrace at Chelsea Piers, 61 Chelsea Piers, #2nd Floor, New York, NY 10011

An informative panel discussion will take place, featuring Security Token Academy Professional Members -- attorneys specializing in securities, securities regulation, corporate and commercial finance. Panelists include:

David G. Adams, Senior Associate at Clifford Chance

Aryeh Friedman, General Counsel at SeedInvest

Jason P. Gottlieb, Partner & Chair, White Collar and Regulatory Enforcement at Morrison Cohen, LLP

Robin Sosnow, principal of Sosnow and Associates PLLC

Mondo.NYC music festival & global music / tech business conference ($99 - $598)

When: Tue, Oct 15, 2019, 4:00 PM – Fri, Oct 18, 2019, 5:00 PM

Where: Williamsburg Hotel, Brooklyn, 96 Wythe Ave., Brooklyn, NY

Mondo.NYC is the first music festival and global business conference focusing on the intersection of emerging music discovery, blockchain and other frontier technologies, and how these new applications and economies will significantly impact both music and tech industries. Emerging artists, innovators and industry insiders will connect and collaborate with fans in a mission to advance human creativity in an ever-changing world.

Notable Conferences