Uniswap’s recent announcement that it processes about 100,000 transactions daily confirms that DeFi adoption has grown considerably.
As far back as 2018, the platforms couldn’t tie down major projects as digital assets traders preferred centralized platforms over them due to their cost and time efficiency.
Looking into the decentralized platforms’ activities in the past months, they have witnessed a massive concentration of projects on the Ethereum platform.
Uniswap has always lead the DeFi adoption race, CEO Hayden Adams says
Uniswap has always been the platform that has increased DeFi adoption as traders across the crypto market has been forced to abandon leverage trading. Based on recent statistics, Uniswap has hosted the majority of the DeFi projects hosted on the Ethereum blockchain.
This development means that many traders have moved to Uniswap, hence the growing popularity that the DeFi sector has enjoyed.
In the words of the Uniswap CEO, Hayden Adams, as a result of the interest of traders, Uniswap, now verifies and completes 100,000 transactions in a day. As a result of the massive transaction processed by Uniswap, its daily trading volume is $100 million.
Uniswap plans to develop V3 that would shake the DeFi sector
The success of Uniswap is coming after the outfit finished a funding round, which totaled around $11 million, which was raised in a Series A funding.
The funding round was championed by Anderssen Horowitz, amongst other high-value investors. With the funds, Uniswap aims to hire experts in respective fields like developing, which is a crucial aspect of building the Uniswap V3.
If this version is completed, Uniswap will look to get more traders into its platform, which would bring about massive DeFi adoption across the market.
Here’s how Synthetix is tackling Ethereum’s congestion, high gas costs
Ethereum has been very popular this year, not usually for all the right reasons, however, since network congestion and high gas costs have often kept it in the limelight. While the reason for these issues accelerating was the boom in Decentralized Finance [DeFi] protocols on Ethereum, some projects have already started to work on a solution, like Synthetix [SNX].
Synthetix, along with other DeFi platforms like Uniswap, Aave, and Curve, have been working closely to roll out scaling solutions. According to a recent update, Synthetix to was struggling under the burden of high fees, before it upgraded to a primitive version of L2 scaling on 24 September. Dubbed the ‘Fomalhaut’ upgrade, it is the first phase of L2 migration to Optimistic Ethereum [the Layer 2 solution]. According to Synthetix’s blog,
“It will be an incentivized testnet aimed at alleviating gas costs for small SNX stakers.”
This would make collecting rewards for small stakes cheaper, in contrast to hundreds of dollars paid previously.
Following this update, SNX will release its second upgrade, ‘Deneb,’ on 29 September, which will include steps to reduce the gas fees. The implementation of SIP-83 and SIP-TBC as a part of Deneb, Founder Kain Warwick stated, were direct responses to increased gas costs due to congestion. He added,
“Some of the changes are stop-gaps while we transition to Optimistic Ethereum but included in these two releases is the first step towards L2 Synthetix.”
This will allow Synthetix to deploy new solutions that have been prohibitively expensive to deploy on L1. The hybrid approach will likely take SNX through to the end of the year and will represent the near-to-mid-term future of the project. The next step with Mimosa will see the launch of the Synthetic futures testnet competition.
With Synthetix laying out a plan to tackle congestion and high fee solutions, it has also managed to grab the attention of the DeFi community. With the growing prominence of scaling solutions and DeFi, SNX has also achieved listings on Bitfinex and Gemini.
Bullish? On-Exchange Bitcoin Declines While Whales Accumulate (Report)
A recent report suggests that the amount of Bitcoin stored on exchanges is declining while BTC whales increase their holdings and that’s bullish for Bitcoin’s price.
The paper also highlighted that investors have a much larger time horizon for their holdings now compared to previous years.
Bitcoin Stored On Exchanges Drop
In its latest report shared with CryptoPotato on Bitcoin investors’ behavior, the popular research company Digital Delphi explored the number of bitcoins stored on cryptocurrency exchanges. The document indicated that if the BTC stock on platforms increases, it could put sell pressure.
However, this isn’t necessarily the case during bull runs, as retail investors often “leave BTC on exchanges and traders use BTC as margin collateral.” Alternatively, in case the asset price rises while the stock on exchange decreases, this typically implies an accumulation trend.
The report indicated that Bitcoin stored on exchanges marked an all-time high of 2.96 million in mid-February. Since then, the trend has reversed, and the number has dropped to below 2.6 million.
Digital Delphi argued that the reason behind this decrease of BTC on exchanges is because investors are most likely preparing for a longer-term holding period. More importantly, though, the paper highlighted a substantial decline in speculative trading interest in Bitcoin, while the HODLing mentality has increased.
“Unlike the 2019 price uptrend, which coincided with BTC stock increasing, this current trend has seen a divergence between BTC stock and price. This suggests a more sustainable move upwards for BTC, in comparison to that of 2019, as data indicates a holder base with longer time horizons.”
Bitcoin Whales Haven’t Slowed Down Accumulating
Digital Delphi’s data reaffirmed previous reports that Bitcoin whales, meaning addresses containing between 1,000 and 10,000 BTC, continue to accumulate large portions. The company outlined that whales have been on a shopping spree since the start of 2020, as their holdings have increased by 9% YTD.
Moreover, the US Federal Reserve’s actions to print extensive amounts of dollars since the start of the COVID-19 pandemic have accelerated whales’ accumulations.
“Since the USD M2 supply expansion in March, there has been a 7% increase in whale holdings.”
According to the document, this only emphasizes the narrative that Bitcoin serves as a hedge against dollar inflation, and “the smart money is clearly betting on this.” It’s worth noting that prominent US investor Paul Tudor Jones III purchased BTC earlier this year to protect himself against precisely the rising inflation.
US Crypto Tax Avoiders Beware: The IRS Updates 1040 Tax Form
The Internal Revenue Service (IRS) seems to have found a way to block crypto tax evasion, following an update of its tax form.
IRS: No Excuses for Crypto Traders
According to the Wall Street Journal on Friday (September 25, 2020), the IRS is planning to alter its 1040 tax form. The revised tax form will see cryptocurrency holders give a straight answer about their crypto activities.
The IRS has been relentlessly pursuing crypto investors to disclose transactions, as it suspects that many taxpayers were guilty of tax evasion. However, the tax administrator looks like it has found a way to make all Bitcoin holders accountable.
Presently, the tax form will mandate crypto traders to answer a” yes or no” to the following question:
“At any time during 2020, did you receive, sell, send, exchange or otherwise acquire any financial interest in any virtual currency?”
What makes the update interesting is the placement of the above question. Prior to the revised tax form, the question appeared in a section where taxpayers were not mandated to fill the answer. However, the question’s position in the altered tax form just below the taxpayer’s name and address leaves no room for excuses or oversight on the part of the crypto trader.
Reacting to the altered form of 1040 was Ed Zollars:
“This placement is unprecedented and will make it easier for the IRS to win cases against taxpayers who check ‘No’ when they should check ‘Yes”
There have been complaints in the past about the lack of a robust regulatory framework for crypto tax filings. In October 2019, the IRS published new tax guidelines that would supposedly make it easier for crypto investors to file taxes. The U.S. tax agency also sent reminder letters to crypto holders. Earlier in September, the IRS announced a payment of $625,000 to anyone who could crack Monero and Bitcoin’s lightning network.
Governments Keen on Crypto Taxation
While the IRS seems to have devised a means to trap crypto holders, more countries are introducing crypto tax laws and clamping down on offenders.
As reported by CryptoPotato in April, Spain’s tax administrator sent out notices to 66,000 crypto investors, as against the 14,000 notices sent in 2019. South Korea, on the other hand, has been unsteady about taxing cryptocurrency.
Earlier in 2020, South Korea’s Ministry of Finance and Strategy revealed that there were no intentions to tax crypto profits. However, reports emerged that the Ministry was considering imposing a 20% tax on profits from crypto trading. In June, the country’s Finance Minister called for the imposition of tax on cryptocurrency trading gains.
Australia’s tax agency, the Australian Taxation Office (ATO), sent out reminders to 350,000 crypto traders in March about their tax obligations. According to the ATO, crypto investors were to keep a comprehensive record of their trading activities for ease of tax payment.
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