February 6th, 2025

Monetary Tightening And Slow Progress In Bitcoin Reserve Could Disrupt Current Bull Cycle

As the US remains the key catalyst of cryptocurrency market sentiment, it could also be the one that could halt or slow its advance. This comes despite the efforts of President Donald Trump to introduce positive reforms to the digital assets industry.

Monetary Tightening Does Not Bode Well for Bitcoin

Bitcoin (BTC)—as with any other class—is reactive to monetary policies. Sentiment within its sector is particularly driven by events affecting the global reserve currency, the US dollar. Hence, the expected tightening in the fiat money’s liquidity could postpone Bitcoin’s expected climb to all-new heights within the foreseeable future.

Arthur Hayes, co-founder and former CEO of BitMEX, recently identified key events in the US that could put the brakes on the ongoing Bitcoin bull cycle. Borrowing some insights from Swiss investor and strategist Felix Zulauf, he indicated that the US fiscal deficit is declining. Meanwhile, the Treasury General Account (TGA), the government’s operating account, has increased its cash balance amid the national debt surpassing the US’ self-imposed debt cap of $36 trillion. In addition, he noted a reduction in foreign loans by US banks.

A decline in fiscal deficit is definitely a good economic indicator. It could hold the key to cutting down inflation based on the Economic Letter of the Federal Bank of San Francisco. However, its aggressive implementation could also mean less liquidity within the financial system.

In response to Hayes, Anndy Lian, author of several books about blockchain technology, stated that tighter control on the monetary supply could trigger an economic slowdown and higher borrowing costs. Moreover, it could lead to a more challenging environment for risk assets like crypto.

It’s worth noting that the previous bull cycles have been boosted by fiscal policies that resulted in more capital inflows in risk assets, such as Bitcoin and other cryptocurrencies. The looming scenario, including the increasing TGA balance and more restrictive foreign loans, could curb this effect.

Slow Progress in Proposed National Bitcoin Reserve

US AI and Crypto Czar David Sacks earlier confirmed that they are now studying the potential adoption of Bitcoin into the national reserve. Although the news signals significant progress in Trump’s campaign promise, many in the crypto community regard the latest developments to be slower than they initially expected.

For them, Trump’s win was almost a guarantee of the plan’s execution, considering that Senator Cynthia Lummis has already initiated the groundwork in Congress. Sack’s recent statement that they are still in the initial stage of studying such a prospect didn’t sit well with several Bitcoin advocates.

Bianco Research President Jim Banco echoed the same thoughts, saying, “Wait, Trump said he would do a BTC Reserve, not promise to ‘evaluate it.’” He added that Washington tends to use the term “evaluate” or “study” when it has not fully bought into the idea yet.

Trump’s executive order during his first day in office mentioned the creation of a “digital asset stockpile.” Still, some analysts interpreted the lack of reference for a Bitcoin reserve as a sign of hesitance in its execution.

Source: https://blockzeit.com/monetary-tightening-and-slow-progress-in-bitcoin-reserve-could-disrupt-current-bull-cycle/

Anndy Lian

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com

j j j

August 22nd, 2024

A Lifeline in the Wild West: ERC-7265 and DeFi Security in a Bull Market

The world of Decentralized Finance (DeFi) feels a lot like the Wild West these days. It’s a land of wide-open opportunity, where you can control your own financial destiny and cut out the middleman. But just like the Wild West, it’s also a place fraught with danger. Hackers are circling DeFi like vultures, waiting to exploit any weakness they can find. Billions of dollars have been lost to attacks in recent years, leaving a trail of heartbroken investors in their wake.

This is where ERC-7265 comes in, not as a sheriff cleaning up the town, but as a clever security invention. I first looked into this standard in October 2023, I did not write anything about it but since there are more malicious activities during the bull market, I have decided to pen some thoughts on this.

The DeFi Security Challenge: A Bullish Target for Hackers

The DeFi market is experiencing a surge in activity, fueled by rising cryptocurrency prices and the potential for high returns. However, this bull market also attracts malicious actors. According to Chainalysis, DeFi hacks resulted in a staggering $5.6 billion stolen in digital assets in 2021 and 2022. These attacks exploit vulnerabilities in DeFi smart contracts, the self-executing code governing protocols. Common attack methods include flash loan attacks, re-entrancy attacks, and manipulation of oracles – data feeds that provide DeFi protocols with external information.

The decentralized nature of DeFi complicates the process of recovering stolen funds. Unlike traditional financial institutions, there’s no central authority to intervene. This makes DeFi a lucrative target for hackers, with the potential for high payouts and minimal risk of prosecution.

How ERC-7265 Aims to Mitigate Risks: A Circuit Breaker for DeFi

ERC-7265 proposes a novel solution: a “circuit breaker” mechanism for DeFi protocols. Similar to the circuit breakers used in electrical systems to prevent overload, it would automatically halt token transfers when suspicious activity is detected. This “red alert” provides a window for developers and the community to investigate and address the potential threat before attackers can exploit the vulnerability and make away with user funds.

Here’s how ERC-7265 works:

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Threshold Definition: Developers define specific thresholds for various metrics like token transfer size or withdrawal frequency.
Monitoring: The standard continuously monitors these metrics.
Triggering the Circuit Breaker: The circuit breaker is activated if a pre-defined threshold is breached.
Action: Depending on the implementation, it can either:

Delay Settlements: Transactions are placed on hold for a predetermined period, allowing for investigation and potential resolution.
Revoke Outflows: Suspicious attempted withdrawals are reversed, preventing stolen funds from leaving the protocol.

By providing this critical pause button, it offers DeFi protocols a valuable tool to mitigate losses and protect user funds.

The Pros and Cons: A Measured Approach

While ERC-7265 holds significant promise, there are advantages and disadvantages to consider.

Pros:

Enhanced Security: The circuit breaker mechanism offers a much-needed layer of security for DeFi protocols, potentially deterring attacks and preventing significant losses.
Increased User Confidence: It can boost user confidence in DeFi protocols by mitigating risks, potentially attracting more investors and fostering wider adoption.
Flexibility: The standard allows for customization, enabling developers to tailor the circuit breaker to the specific needs of their protocol.
Standardization: It can streamline the development process for secure DeFi protocols by creating a common framework.

Cons:

Potential for False Positives: If thresholds are set too low, the circuit breaker could be triggered by legitimate activity, causing unnecessary disruption.
Centralization Concerns: While remaining decentralized at its core, implementing a circuit breaker introduces a degree of centralized control that could be misused.
Network Disruption: In extreme cases, a widespread triggering of circuit breakers across multiple protocols could potentially disrupt the entire DeFi network.
Development Considerations: Adds complexity to the development process, requiring additional effort from developers.

These considerations highlight the importance of careful implementation and ongoing evaluation of this standard.

Why ERC-7265 is Crucial Now: A Bull Market Necessity

The current DeFi bull market presents a unique opportunity for ERC-7265 to make a significant impact. With increased activity attracting both legitimate users and malicious actors, the need for robust security measures is paramount.
Here’s why ERC-7265 is particularly important now:

Heightened Attack Risk: The bull market creates a perfect storm for hackers. Increased liquidity and higher token values make DeFi protocols more lucrative targets. It’s ability to pause suspicious activity can buy valuable time for developers to respond and potentially prevent catastrophic losses.
Building Trust in Nascent Markets: DeFi is still a relatively young market, and user trust is essential for its continued growth. It can demonstrate a proactive approach to security, reassuring users that their assets are protected and fostering a more secure and stable DeFi ecosystem.
A Foundation for Future Innovation: By providing a standardized security framework, ERC-7265 can facilitate the development of even more secure and innovative DeFi applications, fostering a more robust and resilient DeFi landscape in the long run.

The Road Ahead: Adoption and Evolution

While ERC-7265 holds immense potential, it’s essential to acknowledge that it’s still a proposed standard. Widespread adoption within the DeFi community is crucial for its success. This requires ongoing discussions, collaboration among developers, and potential revisions to the standard based on real-world implementation experiences.

Furthermore, security in DeFi is an ongoing battle. Hackers constantly evolve their tactics, and new vulnerabilities may emerge. To stay ahead of the curve, this standard needs to be adaptable. This could involve developing additional functionalities or integrating with other security measures.

Conclusion: A Lifeline in the Wild West

The DeFi revolution is full of promise, but security concerns remain a significant hurdle. ERC-7265 offers a vital lifeline, providing a much-needed layer of protection against malicious attacks. While not a silver bullet, this standard has the potential to significantly improve DeFi security, boost user confidence, and pave the way for a more secure and prosperous future for decentralized finance.

As the DeFi ecosystem continues to evolve, the success will depend on its adoption, adaptability, and ongoing development. With careful implementation and a commitment to continuous improvement, ERC-7265 can be pivotal in building a more secure and trustworthy DeFi landscape, allowing this innovative technology to reach its full potential and revolutionize the financial world.

Source: https://za.investing.com/analysis/a-lifeline-in-the-wild-west-erc7265-and-defi-security-in-a-bull-market-200607770

Anndy Lian

www.anndy.com

j j j

February 15th, 2024

Ether Rock NFT to Sell For $600K? Bull Market Logic Says Yes

With Bitcoin hitting $52K and the entire crypto market riding on an upward trajectory, it’s safe to say we’ve entered a bull market.

Most of the top 10 non-stablecoin cryptocurrencies have enjoyed double-figure percentage returns over the week, signalling unified momentum to buy, buy, buy.

Basking in the glory of this market momentum, investors are finally reaping their rewards after months, if not years of agony.

But just how far is this burst of optimism spreading? After all, the crypto market is notoriously renowned for bogus projects and worthless assets. The infamous Ether Rock NFT collection is a prime example of this.

Rock N Sold

Developed by an anonymous creator in December 2017, Ether Rocks is a CC0 JPEG clipart collection of 100 rocks, which vary in colours but are identical in shape and size.

The project is inspired by Gary Dahl’s 1975 satirical Pet Rock in which people subscribed to the humorous idea of purchasing a rock as a pet. Each rock was packaged in custom cardboard boxes, complete with ventilation holes and straw bedding. Dahl’s absurd concept took the market by storm, selling over 1 million Pet Rocks for $4 each.

Ether Rocks takes a leaf out of Dahl’s bizarre marketing campaign by utilizing the power of community, hype, and satire, whilst offering zero utility to the user.

All 100 Ether Rocks have already been sold but global auction house Sotheby’s is listing one of the NFTs in a sealed-bid auction between 14-21 February 2024.

“By bringing the iconic Pet Rock concept into the digital age through blockchain technology, Ether Rocks invites us to reconsider the boundaries of value, ownership, and cultural significance in the ever-evolving landscape of unconventional trends,” Sotheby’s explains on its auction page.

With an estimate of $500,000 to $700,000, the NFT’s price is mindblowing for non-crypto natives and amazes even the most seasoned crypto enthusiast. Considering each Ether Rock was minted starting at 0.01 ETH, with the last Rock selling at 10 ETH at the time, today’s price of these NFTs is nothing short of astronomical.

Yet, its suggested price range could be regarded as conservative. Earlier this week, Ether Rock #19 was purchased for 279 ETH – worth $739,015 at the time. Its value is now closer to $800,000.

Crypto betting site Polymarket reflects a 63% chance that the Ether Rock will sell for over $600,000 at Sotheby’s auction.

In fact, if the Rock sells for the anticipated target of $600,000, it will only be less than half the price of the collection’s highest sale. In 2021, the most expensive Rock was sold for 420 ETH, costing $1,397,277 at the time.

Rolling Stones, Rolling Markets

The strength of Ether Rocks has largely been on par with the strength of the overall crypto market. When the project hit its all-time high sale in November 2021, the crypto market was in extreme bull mode. Ethereum was above $4K and Bitcoin cleared $60K.

Sotheby’s Ether Rock auction comes at a perfect time as the market is generating momentum in today’s bull cycle.

Whether Ethereum can return to its previous highs is yet to be seen but its strength will certainly be reflected in the price that Ether Rock sells for as investors look for diverse avenues to park their money in.

As Blockhead contributor Anndy Lian explains, “The crypto market is anticipated to be more bullish. This brings the degen narrative back to the scene where this is a way to show their social & cultural capital of the NFTs.”

“Wrapped Ether Rock and BAYC are not just digital assets, but also symbols of status and identity in the NFT community,” Lian added on his blog. “Owning a Wrapped Ether Rock gives the holder a sense of prestige and history, as they own a piece of the early days of NFTs.”

Source: https://www.blockhead.co/2024/02/15/ether-rock-nft-to-sell-for-600k-bull-market-logic-says-yes/