#16

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Prices on 2020-10-22 07:00 UTC.
DeFi

Uniswap’s first major governance proposal fails

The voting period for Uniswap’s first governance proposal ended without achieving the minimum 40 million UNI threshold needed for approval. The proposal was created by the open-source lending protocol Dharma in attempt to lower the existent thresholds needed to submit and pass new proposals.

Currently, new Uniswap governance proposals for Uniswap can only be made by entities that hold at least 10 million UNI. In order for a proposal to pass, it has to gain support of at least 40 million UNI votes, around 4% of token’s circulating supply.

Dharma’s proposal was just 1% short of this threshold. Despite overwhelming support, with 98% of UNI votes being cast in favor of the proposal, the rule modification failed.

While Dharma CEO and his supporters were disappointed by the outcome, citing limitations of the current system, others argued that the low voter turnout revealed a lack of interest in the proposal. Critics also added that lowering thresholds would have benefited whales such as Dharma, allowing them to achieve the necessary quorum threshold much easier without the participation of other UNI holders.

Protocol upgrades

Major blockchains prepare to undergo big changes

Two long-awaited Bitcoin improvement proposals — Schnorr signatures and Taproot — were merged to the Bitcoin Core client on GitHub. The activation process for these proposals is yet to be defined and it could be months or longer until the code is activated.

Once active, Schnorr will help unclog the network by significantly reducing the data size of miltisig transactions, which will increase propagation efficiency and reduce latency. Taproot will expand Bitcoin’s smart contract flexibility and improve privacy.

Additionally, the next version of the Bitcoin Core client will support Tor Network’s latest V3 addresses, which use stronger cryptography and leak less information to potential adversaries monitoring network activity.

Zinken, the last test of the Eth2 genesis block, went smoothly, moving us one step closer to the Ethereum 2.0 blockchain. Ethereum 2.0 will introduce the proof-of-stake consensus algorithm and help decongest the network. Unfortunately, since Zinken started, many users have abandoned the Medalla testnet to the point that network participation recently fell below the necessary 66% threshold to finalize new epochs. Since there are no real money at stake, developers are asking users to remember to complete a voluntary exit if they don’t intend to return to the Medalla testnet.

It’s important to mention that full base-layer Ethereum scalability is still years away, according to co-founder Vitalik Buterin. Thus, DApp developers should focus on integrating already-ready layer 2 scaling solutions into their products.

Meanwhile, privacy-focused cryptocurrency Monero underwent a major scalability upgrade — called ‘Oxygen Orion’ — that includes new “CLSAG” ring signatures, reducing transaction sizes and improving security. As Monero is becoming the most established privacy coin, regulators across the world are raising more concerns about its usage. Just recently the U.S. IRS signed two companies, Chainalysis and Integra FEC, to develop tools that can help to trace Monero transactions.

In other news

  • PayPal announced that in a few weeks it will allow U.S. customers to buy, sell, and hold cryptocurrencies within its app. Later on users will also be able to shop at any merchant that accepts PayPal, since those payments will be settled through fiat currencies.

  • Major cryptocurrency exchange OKEx abruptly suspended all withdrawals after its founder was arrested by Chinese authorities. The company hasn’t provided many details about the matter, but cited that it lost contact with a crucial private key holder that can authorize transactions from its multisig wallet. Interestingly, a few days before the announcement, significant amounts of bitcoins were withdrawn from the platform.

  • American cryptocurrency exchange Coinbase released its first Transparency Report, summarizing almost 2,000 government requests that the company received for customer account information in the first half of 2020. With no surprise, the majority of requests came from U.S. law enforcement agencies. The top three jurisdictions by the amount of requests are: U.S. (58%), UK (23%), and Germany (9%).

  • U.S. FinCEN imposed a $60 million penalty on Larry Dean Harmon, the CEO of two bitcoin mixers Helix and Coin Ninja, for violations of the Banking Secrecy Act. Prosecutors allege that Harmon facilitated money laundering by integrating its mixing services with the defunct AlphaBay darknet market. This news is important for the whole crypto space as it’s the first time the U.S. Department of Justice has prosecuted somebody for solely mixing bitcoins.

  • Puerto Rico-based Euro Pacific Bank, founded by famous Bitcoin critic and financial commentator Peter Schiff, is allegedly under investigation by tax authorities for facilitating money laundering. Schiff responded by calling the story a “hatchet job”, and on Twitter announced his intention to sue Fairfax Media — the Australian media company responsible for the story — for defamation.

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