NEWSLETTER #6 — Announcing Codefi Compliance | ConsenSys Codefi

Hey Friend,

Hoping this email finds you well and adjusted (or adjusting) to our new patterns of behavior. This month, we look at some of the more nuanced applications of the Ethereum blockchain, and we recap both the launch of Codefi Compliance and the state of insurance on Ethereum.

Calls Into the Ether

On the Ethereum blockchain, messages in the past have been sent, stored, and maintained in perpetuity, beyond the influence of media, government, censorship, or erasure. The people who have sent these messages want to ensure we do not forget. A “call into the ether” is a call into eternity.

(Tip for the Etherscan links below. Navigate to: “Click to See More” → “Input Data” → “View Input As” → “UTF-8”).

| The COVID Whistleblower |

| A List To Remember |

| Black Lives Matter |

| Justice For George Floyd |

| I Have A Dream |

From Lex Sokolin’s (Global Co-Head Codefi)

June 1 Newsletter, the Fintech Blueprint:

Look at the history of power. Its threads are woven into our money. Our economic empire and its sovereign choices, stripping black lives of dignity, choice, and opportunity through a myth of capitalist meritocracy, dominates the world still. How do we change that which is the lifeblood of the world? All great powers were built on this blood, money flowing from inequity.

The dollar grew with cotton in the South, built the great railroads with Chinese hands, stood unemployed during the Great Depression, manufactured tanks for the World Wars, and exploded out of Hiroshima. It fought back evil and harvessed its own. It broke the Soviet Union and landed on the Moon. The dollar killed George Floyd. It will save countless others. It is up to us to wrestle for its soul.

If you don’t like what you see, vote with your money. Choose the tax you pay, whose sword you shine, and whose power you grow. Read more.

Codefi Spotlight: Announcing Codefi Compliance

Today, Codefi Compliance supports over 280,000 types of digital assets on the Ethereum network. Codefi Compliance uses a custom framework to provide an AML/CFT solution compatible with Ether and the most widely used token standards such as ERC20, ERC721, ERC179, ERC777, along with notable stablecoins like DAI, USDC and Tether, covering over 280,000 types of digital assets built on Ethereum. It is the first solution built for digital assets that will run on ETH 2.0, the much-anticipated network upgrade that will exponentially increase transactions per second and enable Ethereum scale.

“Providing robust AML/CFT compliance for Ethereum-based digital assets is a keystone step in bringing the institutional financial industry to decentralized finance. Codefi Compliance is the next module in our product suite to eliminate complexity and risk in using DeFi, and help any business benefit from using digital assets.” — Lex Sokolin, Global Co-Head of ConsenSys Codefi.

Read Bloomberg Article.

Quick Codefi Hits

ANNOUNCEMENTS

Data Dive: Blockchain Insurance

Opyn Insurance, which launched in February 2020, is an Ethereum insurance protocol providing protection for DeFi users and ETH speculators. Opyn’s existing products let users buy or sell protection for Compound deposits (USDC and DAI) and hedge against ETH price volatility by either buying or selling ETH protection.

Data shows that at least 35 options have been created for the ETH price hedge market since the launch. The stacked area chart below shows the individual balance of each option token contract and the total sum of value locked in Opyn’s platform. Locked value hit its all time high of $1.6m USD on 23rd April, and currently sits at ~$1.1m USD. The chart also shows the lifecycle of each option; when each colored stacked bar disappears, it means the option reached its expiry date and was exercised.

Typically, around four options have existed at the same time so far in 2020, and each locks an average of ~400k USD. The usual mature length is around 15–40 days.

USDC liquidity providers are the people who have deposited USDC into Opyn’s insurance protocol in order to provide liquidity to people wishing to buy ETH. These USDC depositors are betting that the ETH price increases, and aim to be able to withdraw USDC at a later date for a premium. The people who are buying ETH with the available USDC are protecting it against a price decrease.

Notably following the mid-March market crash — after which people may have been more interested in finding ways to protect their ETH holdings — the number of daily providers and the amount of USDC deposited have been increasing. Since April, there have been nearly 25 days with more than 20 liquidity providers, and four days with greater than 40 liquidity providers. Moreover, these liquidity providers are depositing larger amounts of USDC. In April, the end of the month saw records with just under $500k USDC deposited. May volumes reached even higher, with two days during which USDC deposits surpassed $500k USDC.

The incentive for liquidity providers is to gain a premium on their USDC deposits if the ETH price increases. The top USDC premium recipients have received between 700 and 22k USDC. The largest premium recipient — 22.3k USDC — has accounted for more than 30% of the total premiums on the Opyn platform.

Opyn’s platform launch in February came at a time when the blockchain, Ethereum, and DeFi ecosystem in particular has paid closer attention to security. Among a host of security and market events in the past two quarters, Ethereum users are looking for better ways to ensure their funds are protected as they work with these new platforms. Audits, strict security reviews, and open source architectures will undoubtedly help — but security events will continue to occur. Insurance is the only way to hedge against both security and volatility. Opyn and Nexus Mutual — the two largest players in the Ethereum insurance game — have both come to market to help the ecosystem remain even more resilient in the face of (un)expected events.

Final Remarks

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Till next time,

The ConsenSys Codefi Team

Originally published at https://codefi.consensys.net on June 9, 2020.

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