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A closely watched financial metric turned negative Friday for the first time since the financial crisis more than a decade ago, underscoring concern about a possible economic slump and the prospect that the Federal Reserve will have to star cutting interest rates again.
The gap between the 3-month…
With weeks to go in his tenure atop the U.S. Food and Drug Administration, Scott Gottlieb squared off with two companies at the center of his efforts to halt a surge in teen vaping.
Gottlieb, who plans to leave his post April 5, said at an event in Washington that his agency may need to pull pod-based…
The decentralized web is hard to use, complain its critics. And to be fair, they’ve had a point up until recently. With improved UX and new layer two solutions built on top of Web3 protocols, however, interacting with these technologies is getting easier. This is particularly evident in the case of prediction markets, where new features from Guesser and Veil have opened up these services up to a wider, less technically accomplished audience.
Also read: Cboe Discontinues Bitcoin Futures for Now
Decentralized Prediction Markets Keep Getting Better
“What will be the market capitalization of Cosmos Atoms (ATOM) in USD on April 30, 2019?” asks Veil. “Will a second referendum on Brexit be announced in the UK before 29 March 2019?” ponders Guesser. Technically these markets originate on Augur, but people are increasingly now placing their bets via secondary services that bolt a user-friendly interface onto Augur’s protocol and simplify the betting options.
Guesser’s recently introduced Bet of the Week has been going down well – this week’s question was “Will the base price announced for the Tesla Model Y be $ 39,000 (USD) or lower?” Bettors who went with over, at odds of 1.26, were vindicated. The only significant downside to Augur-based markets, including Guesser, is the length of time it takes for them to resolve. Last week’s featured Guesser bet, for example (“What will the total value locked in Defi be on Monday March 11, 15:00:00 UTC, according to defipulse.com?”) is still awaiting results, even though its outcome is not contentious.
How to Create Your Own Prediction Market
Creating an Augur-based prediction market got significantly easier this week thanks to Veil’s new interface that removes much of the complexity. Users can potentially earn revenue when people participate in their market by placing a bet. The process works as follows:
- Choose whether to create a binary (yes/no) or scalar marker (one with a range of values).
- Create a draft market.
- Be sure to include clear rules regarding scenarios that will determine its outcome.
- Publicly share the market, while it is still in draft form, to generate interest in it prior to activation.
- Activate the market. This calls for making a deposit in ETH and in REP, but Veil can automatically exchange the former for the latter using Uniswap for convenience.
- Report the outcome of the market once the event has concluded.
“Start by creating a draft market for free,” urges Veil, “then see if the community is interested in betting in it. If they are, activate it and get paid when people participate.” To help keep track of draft markets proposed using Veil, a Twitter bot has been set up. Newly devised markets cover Donald Trump, cryptocurrency price predictions, sporting events, and music releases.
A World of Predicting Possibilities
The number of users of Augur and of the third party markets that connect to it remain low, as does the maximum stake that can be placed. With virtually zero geographical restrictions on who can participate however – a Metamask wallet and an email address is all it takes – the barriers to access are low. Moreover, while the majority of markets currently revolve around simple bets that make Augur little more than a decentralized sportsbook, in future its potential use cases could expand significantly.
As Ben Davidow notes in “The Three Powers of Augur,” the market “can be used to hedge risk or insure against undesired outcomes and thus prepare for the future.” He also opines that it could one day be used for things like “filtering out fake news, and creating accountability for public figures.” Just as people are still discovering new applications for Bitcoin, 10 years on, it’s same to assume that decentralized prediction markets will gain significant utility and usability in the months and years to come.
Have you tried using Augur, Guesser or Veil? Let us know in the comments section below.
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Capital market regulators in Canada are planning to establish new rules to curb the risks associated with cryptocurrency trading platforms. This follows the sudden death of Gerald Cotten, founder and chief executive officer of crypto exchange Quadrigacx, which led to about $ 145 million in frozen or missing cryptocurrencies.
Tailored Requirements for Crypto Exchanges
In a joint new consultation paper on March 14, the Canadian Securities Administrators (CSA) and the Investment Industry Regulatory Organization of Canada (IIROC) spoke of the need to come up with tailored requirements to address the “novel features and risks” of digital currency exchanges.
“We must adapt to innovation, and provide clarity to the market about how regulatory requirements might best be tailored and applied to these unique business models, while maintaining investor protection,” the regulators detailed.
“We endeavor to facilitate innovation that benefits investors and our capital markets, while ensuring that we have the appropriate tools and understanding to keep pace with evolving markets,” they added.
Cotten died in India on Dec. 9 without revealing the keys to cold wallets containing CAD $ 190 million (~US $ 145 million). A Nova Scotia Supreme Court judge in February granted Quadriga’s request for creditor protection from as many as 115,000 customers. Investigations by Ernst & Young, the court-appointed monitor in the case, have given little hope the funds will ever be recovered.
However, the Quadrigacx saga has exposed a gap in the Canadian cryptocurrency industry regulation system, prompting investors to query who would be held accountable in the event of a loss. In the past few months, industry players and other concerned stakeholders have increased calls for regulation, although some legal experts are curious to know whether securities regulators have jurisdiction over the asset class.
Faced with such a tricky situation, the CSA and IIROC have now resolved not only to provide clarity for cryptocurrency businesses, but also to create greater market integrity and address investor protection risks, explaining:
Regulators around the world are currently considering important issues surrounding the regulation of crypto assets including the appropriate regulation of platforms. We intend to use this feedback to establish a framework that provides regulatory clarity to platforms, addresses risks to investors and creates greater market integrity.
The consultation paper solicits input from the financial technology community, market participants, investors and other stakeholders on how requirements may be tailored for digital currency exchanges operating in Canada. It comes at a time when interest in crypto assets among investors, governments and regulators globally has increased significantly since the creation of Bitcoin in 2008.
The total value of crypto assets grew to $ 800 billion in early 2018, and although the value has since fallen due to market volatilities, interest in cryptocurrencies remains high. There are currently over 2,000 crypto assets that may be traded for government-issued currencies or other types of crypto assets on over 200 platforms that facilitate the buying, selling and transferring of crypto assets.
But there are concerns by government overlords that lack of regulatory oversight on these platforms may have spurred increased fraudulent activities involving cryptocurrencies, thereby curtailing investment. According to the Globe and Mail, many Canadian cryptocurrency exchanges are taking steps to address customer concerns and guarantee investor fund protection following the Quadrigacx event.
For example, Toronto-based Bitbuy has simulated a number of disasters – including nuclear attacks and the sudden passing of all of its directors – to ensure that customers would still be able to access their funds, the newspaper reported. Bitbuy also recently hired a U.S.-based blockchain forensics company to review its solvency status, its methods for storing cryptocurrency, and its asset segregation practices, it said.
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U.S. stocks opened broadly higher Wednesday, powered by technology and healthcare companies, as the market pushes for its third straight day of gains.
The broader market has been rebounding this week following its worst week since December. The Dow Jones industrial average joined other indexes…
Market making and over-the-counter trading firm GSR Markets is taking legal action against lawyer Diana McDonald, who is accused of pocketing $ 2 million from a $ 4 million BTC transaction in which she acted as an escrow.
GSR Markets Sues Lawyer Over Missing $ 2 Million
Hong Kong-based GSR Markets is taking legal action against a lawyer who was to act as an escrow in a $ 4 million BTC escrow transaction gone awry. According to the plaintiffs, GSR sent BTC to them in exchange for $ 4 million that was sent to the trust account of a lawyer designated to act as an escrow, only to have $ 2 million returned to them and receive no cryptocurrency.
GSR asserts: “Valkyrie [one of the defendants] promised that it would provide Bitcoin to GSR Markets ]in exchange for $ 4 million. In reliance on that promise, GSR Markets wired $ 4 million” to the defendant.
GSR claims to have been acting as a broker for Alivia Corporation in seeking to carry out the transactions, alleging that on January 3, 2019, the “Plaintiff wired $ 4,000,000 into the account, expecting that it would immediately receive 1,000 [BTC] from the sellers. Based on that expectation, GSR Markets shorted those 1,000 [BTC], based on a purchase price of $ 3,635 per [BTC].”
Lawyer Claims No Wrongdoing
In addition to claiming that it failed to receive any BTC and is currently owed $ 2 million, GSR asserts that it lost approximately $ 380,000 in the process of unwinding its short position.
The plaintiff is asking for injunctive relief, and accuses McDonald and McDonald Law of breaching fiduciary duty and fraud. GSR is also suing Wells Fargo, the bank providing the account into which the funds were deposited, for “aiding and abetting fraud.”
McDonald has responded to the accusation, claiming that she has not acted improperly and that her fiduciary duty ran only to the seller and not the buyer in the transaction. McDonald asserted that a portion of the funds was used to “unlock” a BTC wallet and that the plaintiff “confirmed delivery of 2,000 ‘non-spendable’ [BTC].”
What is your response to the suit between GSR Markets and McDonald? Share your thoughts in the comments section below!
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On Feb. 27, KYC-free cryptocurrency exchange Hodl Hodl announced a new service called Predictions, which will soon be added to the peer-to-peer trading platform. Hodl Hodl believes prediction markets are useful financial instruments within the crypto ecosystem that offer an incentive for those forecasting the specific outcome of an event.
Hodl Hodl Is Adding ‘Predictions’ to Its P2P Multi-Signature Exchange
Peer-to-peer multi-signature trading platform Hodl Hodl will be adding a prediction markets feature this spring. Hodl Hodl is an exchange that doesn’t require KYC verification and utilizes a multi-signature escrow scheme that curbs the possibility of theft and fraud. At the moment, the exchange allows users to trade BTC and LTC, but the founders are considering adding other coins as well. The multi-signature escrow system protects funds during trades by using a P2SH contract, which gives traders the ability to hold keys to funds held in escrow. The latest prediction markets feature will use a similar approach by locking prediction contracts in a 2-out-of-3 multi-signature escrow.
Prediction markets are nothing new to the crypto ecosystem. They are used as financial tools that allow participants to create a contract with others and the system rewards the correct prediction after the event has unfolded. For instance, a contract could be created on the outcome of the next U.S. presidential election or someone could attempt to forecast the price of a certain cryptocurrency in 2020. The Augur platform is the leading crypto prediction market which relies on the wisdom of the crowd and its native currency REP. The Hodl Hodl concept utilizes BTC, and its developers claim their implementation “can be called a ‘peer-to-peer’ prediction market.”
“Because each party would lock funds in multi-signature 2-out-of-3 escrow, the oracle, in this case, is going to be sort of distributed: in a perfect case, both parties agree on the outcome, because neither party is able to return the coins locked in escrow unilaterally and, thus, they have nothing to win whatsoever by denying the outcome in favor of the other party,” the developers explained. “In fact, they risk losing their reputation on Hodl Hodl and future prospects for creating contracts.”
The blog post adds:
But even in case of a dispute, Hodl Hodl leaves a chance of interference with its third key, which can be used to sign the transaction in favor of the party, who guessed the outcome — Best part of it is that Hodl Hodl, as always, doesn’t have direct access to the funds and is not actually in possession of bitcoins at any moment.
‘Prediction Markets Do Not Equate to Gambling’
Hodl Hodl further explained that participants will be able to create contracts on things like election outcomes, the price of oil or other assets, and the weather. However, the team will make sure contract conditions are “not illegal or ambiguous.” Offers are pre-moderated, which means the contract creator will have to execute the prediction contract after it’s approved. The founders have detailed that Hodl Hodl’s prediction markets will offer a unique approach to contracts as well, such as offering different odds and a minimum contract volume and offer balance method. For example, the contract’s creator can up the odds by making them 1 to 10 which means the creator locks 1 BTC and the counterparty must lock 10 BTC.
Hodl Hodl added that they will be informing the public as soon as the prediction markets launch and emphasized that the new feature should not be considered gambling. The developers of Hodl Hodl said that gambling traditionally involves an “instant gratification expectation, fast execution, and randomness.” Whereas the trading platform’s prediction markets will rely on “low-time preference, financial planning, and responsibility.”
What do you think about Hodl Hodl’s prediction markets announcement? Do you think prediction markets and gambling are different or are they the same? Let us know what you think about this subject in the comments section below.
Image credits: Shutterstock, Pixabay, and Hodl Hodl.
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Julius Baer, the 125 year-old Swiss private bank, has announced a partnership with cryptocurrency banking startup Seba Crypto AG. The bank did not release details of the agreement, but stressed that it was responding to increasing demand from customers for the capability to store, trade and invest in crypto assets.
‘Bridging the Traditional and Digital Assets Divide’
In a statement released Feb. 26, Julius Baer, which already holds a minority equity stake in Seba, said the deal will “provide its clients with access to a range of new digital asset services.” The Zurich-based bank stated that it aims to bridge the gap between traditional and digital assets, taking advantage of Seba’s innovative platform.
“At Julius Baer, we are convinced that digital assets will become a legitimate sustainable asset class of an investor’s portfolio,” Peter Gerlach, head markets at Julius Baer, said in the statement. However, the deal is dependent on Zug-headquartered Seba being granted a banking and securities dealing license by Switzerland’s financial markets regulator FINMA later this year.
A number of Swiss banks, including Swissquote and Falcon, are already active in the cryptocurrency space, but Julius Baer’s entry has drawn keen interest. Current Seba chairman Andreas Amschwand, who is also a board member at Julius Baer, is thought to have played a key role in facilitating the partnership between the two companies, according to Swiss news outlet Swissinfo.ch. Anschwand is, however, expected to step down from Julius Baer in April.
‘Raising the Bar’
Julius Baer, which has about 382 billion Swiss francs ($ 382 billion) of assets under management, is thought “to have raised the bar in the ongoing merger of crypto assets into the traditional financial sector.” This is significant in the sense that legacy banks in Switzerland and elsewhere have demonstrated a certain reluctance to integrate cryptocurrency products into their services, citing a plethora of potential risks. By dabbling into crypto, “Julius Baer has signaled that it believes the risks to be acceptable,” Swissinfo said.
Speaking on the partnership, Guido Buehler, chief executive officer of Seba, stated: “We are very proud to have Julius Baer as an investor. Seba will enable easy and safe access to the crypto world in a fully regulated environment.” Seba is expected to become one of just a few startups in the crypto space to close the regulatory gap between conventional and digital assets.
Switzerland has taken a progressive stance toward cryptocurrencies by legalizing their use and formalizing crypto transactions in a range of different contexts. But some crypto projects still struggle to open bank accounts, and cryptocurrency-focused bankers and investors still complain about a relative lack of regulatory clarity, as it remains unclear whether cryptocurrencies can be considered legal tender in certain contexts.
What do you think about the partnership between Julius Baer and Seba? Let us know in the comments section below.
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