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RelayNode NYC #42 - March 2

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.

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RelayNode NYC is curated by:

David Gogel Founder @GogelX/Definancier, Advisor @Paperchain.io, fmr Associate @Techstars' Blockchain Accelerator, Co-president @Wharton FinTech, Corp Dev @LinkedIn @AIG

Hsin-Ju Chuang Founder @Dystopia Labs. Former-Head of Growth @Stellar/Lightyear, Solana. Ex-Director at Tezos (TQ)

1 Big Thing: Flash Loans & Implications for DeFi security

Fulcrum, the smart contract based lending protocol built by bZx on top of Ethereum, was exploited on two separate occasions. In total, ~$1M worth of ETH was taken. The attacker used flash loans to manipulate markets and make off with Ether.


Haseeb Qureshi, Partner at Dragonfly Capital, explains the structure of flash loans and why they are a big security threat. Flash loans are not going away, and we need to think carefully about the impact they will have for DeFi security going forward. Must read

Things to read

🌐 Why Bitcoin / Macro?

  • As the COVID-19 pandemic evolves, global equities markets have plummeted with the S&P declining 13% in the last 2 weeks. The yield on the 10-year Treasury dropped to 1.031%. The rise in bond prices and the decline in equity prices are making multi-asset investors overweight fixed income. The crypto market was not spared, with BTC declining 17% in the last 2 weeks, while the gold market remained flat. Further, according to Skew, $196M in liquidations occurred on BitMEX. More volatility ahead as central banks are likely to cut rates which may boost financial markets but are unlikely to result in increased borrowing and spending in periods of anxiety. Wasn’t crypto supposed to act as a safe haven? DAR published research analyzing the price movement of BTC to determine whether it is a risk-on or off asset. The analysis of multi day drawdowns shows that BTC still produces positive returns on average during risk-off events, but they are significantly below daily average gains that BTC typically exhibits. Further, the hedge is not consistently reliable, working slightly more than half the time. 

  • Matt Cutler from Blocknative, a startup tracking Ethereum mempool, conducted research that counts all transactions across 24 crypto networks. Over the past 10 years, there have been over 3.1B blockchain transactions in total. Significantly, we crossed the 1B aggregate transactions per year threshold in 2019.

  • Payments company Square reported Q4 2019 earnings. Bitcoin generated 49% of all revenue for Square’s Cash App in Q4 2019. The $178M attributed to Bitcoin purchases is a major increase from the $52M generated in Q4 2018.

💰 Funding, M&A, & Exits

  • CoolBitX, a Taiwanese blockchain security company offering services to help crypto exchanges comply with FATF rules, raised a $16.7M Series B led by SBI Holdings, with participation from the National Development Fund of Taiwan, BitSonic, and Monex. Funds will be used to launch new products that comply with new rules from the FATF.

  • Omniex, a front-to-back office investment and trading platform purpose-built for institutional investors to seize the opportunities of the crypto-asset markets, announced an investment (undisclosed sum) from and a partnership with SIX Swiss exchange. The partnership will provide a gateway to digital exchanges and OTC market makers worldwide for SIX and its clients.
     

🔓 DeFi / OpFi

  • Compound, the algorithmic, autonomous interest rate protocol, announced its plans to decentralize the protocol and launch a new governance system governed by the COMP token. COMP holders will be able to propose governance actions and empower community governance — it isn’t a fundraising device or investment opportunity.

  • Binance Research released a report on how perpetual swaps and margin trading have allowed traders to profit from new positions that were not available before. However, synthetic pair trading strategies require a thorough understanding of the various elements involved in the trade, such as liquidation risk, additional transaction fees, borrowing rate (for margin trading), and funding rate (for perpetual contracts).

  • Researchers from Cornell published research on the decentralized finance financial crisis. The Global Financial Crisis of 2008, caused by excessive financial risk, inspired Nakamoto to create Bitcoin. Yet as the emerging DeFi ecosystem develops, with protocols intertwining and the complexity of financial products increasing, it is at risk of the very sort of financial meltdown it is supposed to be preventing.

  • NexusMutual released an article about two vulnerabilities. None of them have been exploited and no mutual funds have been compromised.

  • Avantgarde Finance released v2.0 of the Melon Terminal (f.k.a. Melon Manager Interface), the first release by Avantgarde Finance. The Melon protocol is a protocol for decentralized on-chain asset management. It allows anyone to deploy an on-chain fund to Ethereum: this fund’s operational, administrative, accounting and regulatory functions will be entirely automated by technology and performed on-chain.

💸 STOs / Stablecoins / Tokens / DAOs

  • Red Swan, a commercial real-estate marketplace, tokenized $2.2B in real estate. Red Swan is now offering $780M of these real estate-backed tokens to accredited investors in a pre-sale. The company used Polymath’s platform and security token standard to create and issue its tokens, which now run on Ethereum, while Red Swan plans to hand the appraisal and sales components of each deal. 

  • FTX, the Binance-backed derivatives exchange, announced a public sale for tokenized equity via a FTX_Equity token representing ownership in FTX Trading Ltd, the holding company that owns the derivatives exchange. Investors will be able to purchase the tokens directly through an exchange account with U.S. dollars, BTC, ETH or FTX's native FTT token. FTX is said to be seeking a $1B+ valuation.

🌉 Infrastructure

  • Blockstack proposed a new mining mechanism called Proof of Transfer; it uses Bitcoin’s Proof of Work (PoW) to launch new blockchains that are anchored in Bitcoin’s security. Further, PoX can give incentives to participants in such new blockchains in the form of earning Bitcoin.

  • Chainlink takes oracles beyond Ethereum with Polkadot. Polkadot plans to use Chainlink’s decentralized oracles for its “parachain” technology, which acts as a bridge between different blockchains & provide key information such pricing feeds and can be used to verify identity-based digital signature.

  • Coinbase Wallet announced it will allow users to send cryptocurrency to dedicated usernames or ones created on the Ethereum Name Service (ENS). Coinbase’s proprietary usernames look like @username while ENS names resemble URLs like coinbase.eth.

🍰 Layer 1 

  • Zcash Improvement Proposal 1014, which governs the further funding of Zcash, is final. Beginning in November, 80 percent of the mining reward will go to the Zcash miners, 7 percent to the Electric Coin Company, 5 percent to the Zcash Foundation, and 8 percent to third parties for “large grants”

⚖️ Legal

  • The SEC denied an application by Wilshire Phoenix and NYSE Arca Inc. to list a fund that mixes BTC and short-term Treasuries. In a dissenting statement, Commissioner Hester Peirce said the disapproval leads her “to conclude that this Commission is unwilling to approve the listing of any product that would provide access to the market for Bitcoin and that no filing will meet the ever-shifting standards that this Commission insists on applying to Bitcoin-related products—and only to Bitcoin-related products.”

🎧Podcast of the Week

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

A Fireside Chat With Aaron Wright, Founder of OpenLaw & The LAO (Free)

When: Monday, March 2, 2020, 6:30 PM to 9:00 PM

Where: The Ainsworth, 64 3rd Ave · New York, NY

This CryptoMondays NYC features a Fireside Chat with Aaron Wright, the co-founder of OpenLaw (http://www.openlaw.io), which is the team building The LAO (http://thelao.io), the first for-profit limited liability autonomous organization. The LAO will function as a member-directed venture capital fund organized in the United States, with an aim to be compliant with U.S. law. The LAO allows Members to pool capital, invest in projects, and share in any proceeds from the investment. The LAO is organized as a legal entity (a Delaware LLC) primarily administered via an online application (a "DApp") and related smart contracts. The LAO will enable its members to vote on project funding proposals and invest in early-stage Ethereum ventures. OpenLaw was launched with the support of the Consensys venture studio in 2017.

Aaron is also a Professor of Law at Cardozo Law, where his research focuses on smart contracts, decentralized organizations, and the regulation of autonomous code-based systems. He is co-author of the book Blockchain & the Law: The Rule of Code (Harvard University Press) and played a small role in launch the Ethereum Foundation.
 

BitDevs: Socratic Seminar 102 (Free)

When: Wednesday, March 4, 2020, 6:40 PM to 8:40 PM

Where: Jeffrey S. Gould Welcome Center, 50 West 4th Street · New York, NY

If you can't make it to the main event please join us at The Malt House around 9:30PM for food and merriment. Thanks to our friends at Chaincode Labs and NYU Digital Asset Forum for food and refreshments. Please see our zotero link aggregator for potential discussion topics. A final topic list will be posted to bitdevs.org the day before the event. Feel free to suggest discussion topics in the comments section below.

https://www.zotero.org/groups/691739/devsny/collections/EPE7FGAJ

Secure Location Services - An Overview & Demo of FOAM (Free)

When: Wednesday, March 4, 2020, 7:00 PM to 9:00 PM

Where: CoinShares, 101 Fifth Avenue Suite 605 · New York, ny

Time for a mesh meetup! We're excited to host Ryan John King, co-founder and CEO of FOAM. He'll share an overview on the project and tech stack, show the physical device used by FOAM, and present on the results and documentation of the current tests and demos, planned Brooklyn test net and network launch details. We'll also talk about privacy, since privacy in location is a major part of FOAM, giving users the ability to obtain fraud proof location claims that are privacy preserving and to be in control of whom it is revealed/sold to.

Regulatory Arbitrage and New Markets: The excitement over Stablecoins (Free)

When: Wednesday, March 11, 2020, 6:30 PM to 8:30 PM

Where: Union Square, New York, NY

In this session, Women in Blockchain's Thessy Mehrain will discuss with Dorothy Chang of Paxos and Ayesha Kiani of LedgerPrime the origins and benefits of stablecoins, how they are being used today vs future applications, and why there are so many brands and countries that want to issue their own.

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Pay 6$ as a signal of your commitment...we want to see you!

No-show-funds support one of the next meetups.

Fee doubles 24hrs before event. If you can't afford the fee please get in touch beforehand.

Talk | Ethereum Blockchain: A Technical Overview on Blockchain 2.0 (Free)

When: Wed, March 11, 2020, 6:30 PM – 8:30 PM EDT

Where: 311 West 43rd Street, New York, NY 10036

Hi all, in our upcoming gathering, we will give a technical overview on Ethereum Blockchain, aka Blockchain 2.0. The speaker will be Dr. Chong Li from Columbia University. Topics to be covered:

  • Ethereum Blockchain: The basics

  • Why Blockchain 2.0: smart contract

  • Physical limits of the Blockchain 2.0: performance trade-off on throughput & security

  • Consensus algorithm: GHOST protocol; proof-of-stake protocol;

  • DAPP: design and implementation

BAR ON THE BLOCK - NEW YORK (Free)

When: Thu, March 12, 2020, 6:30 PM – 10:00 PM EDT

Where: The Farm SOHO, 447 Broadway, 2nd Floor, New York, NY 10013

Bar on the Block is an intimate gathering for the crypto and Iconic community designed to stay updated on the latest in fintech, foster meaningful connections and conversations amongst attendees. Stay updated on the latest in fintech, meet others in the blockchain community and create the future of crypto together!

Panel Discussion

  • Dominic Ward, Managing Director, Iconic Lab U.S. Accelerator Inc.

  • Christine Sandler, Head of Sales & Marketing, Fidelity Digital Assets

  • Thomas Lee, Managing Partner/ Head of Research at Fundstrat Global Advisors, LLC

  • MODERATOR: Wilfred Daye, Structured Finance and Fintech Professional

  • Fireside chat: Patrick Lowry, CEO, Iconic Holding

Agenda

  • 18:30-19:00 Drinks & Networking

  • 19:00-19:30 Panel discussion

  • 19:30-20:00 Fireside chat

  • 20:00-22:00 Drinks & Networking

Upcoming events

NYC/XRP V - Spring Forward (Free)

When: Tuesday, March 17, 2020, 7:00 PM to 9:00 PM

Where: Lair East, 424 Broadway #602 · New York, NY

The NYC/XRP Community would like to invite all professionals and enthusiasts alike to attend our 5th bi-monthly meetup to be held on the night of March 17th at 7 PM at Lair East (424 Broadway Suite #602).

This month we'll conduct the meetup in a "tech talk" format with the feature presentation of the night being titled "Using The XRP API - An Intro to Programming XRP". Even though this will be technical topic, non-technical attendees are more than welcome to come and participate as we will accommodate all experience levels and backgrounds. The feature presentation of the night will be preceded by time before and after for networking and socializing, complete with light hors d’oeuvres and beverages. Hope to see you all there!

Notable Conferences

Postponed

2020