How does blockchain in financial services avoid the trough of disillusionment? Source: https://www.fintechconnect.com/blockchain/articles/blockchain-in-2020-part-1
Do on-chain metrics show an overly bearish picture of the 2020 Bitcoin market?
Bitcoin’s on-chain metrics suggest that the market is overly bearish. This has been the case for most of 2020.
Up till now, on-chain metrics are considered a reliable source of data for predicting Bitcoin’s market sentiment and price. It is assumed that the Bitcoin Network needs sufficient on-chain volume in order to fuel a bull market.
The current on-chain volume is higher than the 2018 and early 2019. The price is above 10k and has sustained at that level for over 4 months in a row. Trading volume does not pose a grim picture, unlike 2018.
However, do on-chain metrics give complete information required for price prediction and making trading decisions? There are other metrics like Willy Woo’s Bitcoin network momentum, that help estimate the state of the market.
Bitcoin’s network momentum was at its peak in 2016 till the end of 2018. However, following bull markets, there is a phase where the asset gathers momentum before hitting the next peak. In 2020, the on-chain volume has increased and ranges above the 200d MA, additionally, the momentum is gathering. This phase may be labeled the accumulation phase and there are no signs of a bearish market. In fact, if Bitcoin is trading $2141 above its fair price, would it be fair to term it bullish.
Another factor that doesn’t add up in the bearish narrative of Bitcoin is the profit of Hodlers. Currently, over 83% of Hodlers are profitable, as per data from CoinMarketCap.
Hodlers are profitable to the extent that there is over $6.24 M in BTC Hodlers wallets with 100%+ unrealized profit. The Bitcoin derivatives market would give a nod to the bullish sentiment here as open interest in Bitcoin Futures has increased 40% in the past month. Despite the price volatility, institutional interest in Bitcoin has grown considerably. This is evident from the rise in open interest and daily trade volume on CME.
While on-chain metrics act as a quick reference, there are gaps in the predictions based on them. A retail trader on a spot or derivatives exchange is directly impacted by the movement of whales and institutions. Events like BTC Futures Contract expiration have an impact on the price and volume of the asset traded on spot exchanges. Considering derivatives market performance while making price predictions may fill some of these gaps.
Samsung’s new blockchain pilots are all about transparently tracking medicine
Samsung SDS will conduct a series of pilot projects in November to test blockchain-powered medicine distribution management. The goal of these tests is to guarantee transparency in the process of tracking pharmaceutical drugs.
According to Yankup, the IT branch of Samsung Group announced the pilot programs, named “Disruptive innovation technology for tracking drug distribution history,” at the BioPharma Cold Chain Logistics session in Seoul, South Korea.
Officials from Samsung SDS also said that they’ve received “several” participation applications for the pilots from unnamed pharmaceutical firms, distributors, and even medical institutions in South Korea.
Lee Eun-young, senior researcher at Samsung SDS, stated that the pilots will last between three and six months, commenting:
“Through the drug distribution history management service, it is possible to comply with regulations and innovate business by implementing product-specific history management, real-time distribution history tracking, and automatic reporting functions.”
During the announcement, Samsung’s IT branch said that the pilots would consist of an IoT-linked temperature history tracking service, which will be implemented along with automatic history management for incoming and outgoing goods. This has been chosen “to minimize handwritten input,” verify returns, and collections with the support of a secure database.
If successful, these pilots will be commercialized after passing domestic and foreign regulatory compliance in June of next year. Lee told local media:
“The value of blockchain in the healthcare industry is expected to grow from $176.80 million in 2018 to $5.61 billion in 2025, and by 2025, 55% of healthcare solutions are expected to adopt blockchain for commercial purposes.”
Daegu, the fourth-largest city in South Korea, recently announced its plans to allocate over $6 million towards blockchain and artificial intelligence education.
Did a class-action suit play a role in Maker’s refusal to compensate March crash victims?
About 52,500 MKR voted against any compensation, which accounted for 65% of the total votes. This amounts to about 8% of the total MKR supply, which some commentators took as a sign of low turnout.
Nevertheless, Maker community member monetsupply, who was part of the working group designing the compensation proposal, told Cointelegraph that this was “fairly high for a poll vote.” He said that polls normally get commitments of less than 40,000 tokens.
The results of the vote were somewhat surprising as a similar poll held just three weeks after the crash had the opposite result — 65,000 MKR amounting to 65% of votes expressed favorably for compensation.
While another poll with lower participation had a negative result, the working group was still motivated to continue due to the first poll.
Monetsupply cited three main reasons why, according to them, the vote has failed. The first is a matter of principle — should the vault holders be compensated at all. “Good arguments could be made for or against,” they said.
The discussion can be boiled down to two lines of thought: one maintains that even if it was not a technical hack, the system still worked imperfectly and the risks were not properly disclosed — so the victims should be compensated. The other view contends that Maker provides no guarantees on the return of the collateral as the auction system is based on market incentives — if the market is not efficient at some point, the Maker community should not be responsible for that.
While Monetsupply did not express an opinion, they believe that some may have misunderstood the liquidation system:
“I think vaults had unrealistic expectations of how much they would be getting back in a black swan event. Maker has a 1 hour oracle delay which benefits vaults by letting them save their vault by deleveraging. But the flip side is if the price is falling during that hour, once the vault does finally get liquidated the price is lower, so the vault gets less collateral back.”
Still, even for those who were in favor of repaying the vault, Monetsupply believes that two other arguments weighed against. One is the shift of responsibilities, as many in the community came to believe that liquidation risks were not properly explained on the Oasis front-end — which is maintained by the Maker Foundation.
“So some MKR holders may have felt that it wasn’t their responsibility to pay, even if they were sympathetic to vaults,” Monetsupply added.
The other aggravating factor is the class-action lawsuit launched by the liquidation victims against the Maker Foundation:
“If MakerDAO approved compensation, what’s to stop vaults from accepting these funds while still participating in the Maker Foundation lawsuit?”
Monetsupply nevertheless lamented a certain lack of transparency in Maker governance. Unlike some newer systems like Compound, there are no indications as to who is behind a particular MKR address.
“It’s really tough to read the room with anonymous voters,” they said. While they didn’t argue for deanonymization, better tracking of wallets across proposals and protocols to understand where power is held “will be super interesting,” they concluded.
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