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Binance Unknowingly Earns Staking Rewards of Stellar, Adds Support

Binance has apparently earned 9,500,000 XLM in staking rewards unknowingly.

Major cryptocurrency exchange Binance has earned staking rewards on Stellar (XLM) following a change of some parameters on cold and hot wallets.

In a blog post published on July 18, Binance said that it unknowingly earned staking rewards of 9,500,000 XLM ($775,000 at press time) in extra XLM tokens in the wake of specific parameter changes on cold and hot wallets made a year ago. The exchange subsequently decided both to immediately add staking support for XLM and to share the gained XLM rewards with the entire community. The post further specifies:

“Starting July 20, Binance will support staking for Stellar (XLM). Over a 40-day period, Binance will take daily snapshots of XLM balances on your Binance accounts. After that, on September 1, we will tally average user XLM balances based on these snapshots and complete the distribution of your XLM staking rewards.” 

In June, Binance released its official Trust Wallet on its decentralized trading platform Binance DEX. According to the announcement at the time, Trust Wallet planned to launch support for layer-2 payment protocols such as Lightning Network in future, as well as support for staking services.

Earlier this week, blockchain interoperability protocol Polkadot introduced its “canary network” dubbed Kusama, which functions as an experimental version of the protocol. Kusama will purportedly enable developers to build and use a parachain or test Polkadot’s governance, staking, and other functions in a real environment.

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Binance Wants to Open a New Local Exchange in South Korea: Report

Binance is in talks with local partners in South Korea for potential launch of a new subsidiary.

Binance, the world’s largest crypto exchange by daily trading volume to date, is reportedly planning to set up a branch in South Korea.

Malta-based crypto exchange Binance is working with local partners in South Korea to launch a new exchange in the country, Binance CEO Changpeng Zhao (CZ) revealed, according to a report by crypto media outlet Block In Press on July 16.

CZ reportedly said that the company does not know the details of the establishment of the new office in South Korea.

However, a global representative of Binance denied the news in the report, claiming that Binance team has not decided to date whether or not to establish a Korean subsidiary. Specifically, the unnamed representative clarified that Binance has been in talks with South Korea-based fintech firm BxB, but they have not made any specific decisions so far.

Another Binance spokesperson said that the question of launching a local branch in South Korea is “not the case” to date, according to a report by crypto media outlet The Block.

Previously, Binance CEO hinted at a potential expansion to South Korea at the Blockchain Partners Summit in Seoul in July 2018. At the time, CZ highlighted the importance of the South Korean market and said that Binance would contribute to help grow its cryptocurrency industry.

Recently, major global exchange Huobi officially announced plans to expand operations to Turkey, where 20% of residents are reported to hold some form of crypto.

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Binance Announces Galileo, the Latest Version of Its Mainnet

The cryptocurrency exchange Binance has successfully hardforked its mainnet to version v.0.6.0: Galileo.

Major cryptocurrency exchange Binance has completed an upgrade to its mainnet. The latest iteration is called Galileo — v.0.6.0 — as announced by Binance on July 15.

According to the announcement, there are four major changes implemented in Galileo: the matching engine has been revised with “Taker” and “Maker” matching logic, trading pairs on Binances decentralized exchange, Binance DEX, can be delisted, Binance Chain token assets can now be time-locked and state sync options have been enhanced.

For Binance DEX, validators can now reportedly make a proposal to vote on delisting trading pairs for reasons such as low volume of use. This could, Binance suggests, improve overall liquidity.

Time-locking tokens is also a new feature that is reportedly sought by a number of projects looking to list their crypto assets. As fully explained in the initial BEP-9 proposal — and echoed in the Galileo announcement — businesses sometimes like to use time-locked tokens as a means of securing commitment from founders, or for collateral:

“Some business plans decide to lock certain amount tokens for pre-defined periods of time, and only vest in the future according to the schedules. For example, some projects may lock some allocation of the issued tokens as a commitment by the founding team; some business scenarios also need to lock some tokens as collateral for value.”

According to Binance’s full rundown of Galileo, the latest mainnet is a hardfork of its previous version. This means Galileo required at least two-thirds consensus from validators in order to successfully upgrade from the previous version.

As previously reported by Cointelegraph, Binance recently released its margin trading platform on July 11. Binance co-founder Yi He said that margin trading is “one of the most requested services from our community.” Crypto assets for margin trading options will reportedly include  Bitcoin (BTC), Ether (ETH), XRP, Binance Coin (BNB), Tron (TRX), and Tether (USDT).

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Fundstrat’s Tom Lee: Bitcoin Pullback Is Healthy, Fewer Searches Аre Good

Fundstrat Global Advisers co-founder Thomas Lee said that the recent Bitcoin pullback is healthy.

Fundstrat Global Advisers co-founder Thomas Lee wrote that the recent Bitcoin (BTC) pullback is healthy in a tweet on July 14.

In his tweet, Lee also addressed concerns over the recent decrease in Google searches for Bitcoin:

“As for the search traffic for bitcoin being low, I also think that is a good sign. It means the rise in Bitcoin has not been accompanied by massive hype.”

According to search analytics service Google Trends, Google searches for Bitcoin from within the United States have decreased by about 45% since their recent peak at the end of June.

Google search data for Bitcoin in the U.S. Source: Google Trends

Google search data for Bitcoin in the U.S. Source: Google Trends

The CEO of major cryptocurrency exchange Binance, Changpeng Zhao, said in an interview with Bloomberg on July 12 that the recent rally has been mostly driven by retail investors, who still account for about 60% of total trading volume. Zhao said:

“We have not seen institutions growing faster. […] What we’ve seen is pickup in both places. The number of institutions coming into this industry has not increased that tremendously in 2019 yet.”

Bloomberg also suggests that margin trading is another catalyst for the recent growth. As Cointelegraph reported on July 11, Binance has rolled out margin trading features, allowing traders to use their existing balances as collateral to open both long and short positions on crypto assets. Zhao commented:

“I would say the majority of people by the end of the year will be using margin in some capacity. […] It’s quite safe to use to be honest. There will be more trading volume and potentially higher volatility.”

At the end of June, Thomas Lee suggested that Bitcoin’s volatility makes a long-term approach toward it more appropriate for most traders.

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Binance CEO: Bitcoin (BTC) Run is (Was) Driven by Retail Investors

Bitcoin Still Somewhat Retail-Driven

Over the past few months, there has been a whole lot of talk about Bitcoin becoming the next trend for institutions. Like mom & pop investors fueled 2017’s monumental run, investors today expect institutional money, the “smart money”, to drive cryptocurrencies upward. Thus, a narrative has formed. “The herd is here“, some that abide by this narrative may say.

According to Changpeng “CZ” Zhao, the beloved founder of Binance, this is not the case though. Speaking to Bloomberg for a recent interview, the Chinese-Canadian businessman suggested that Bitcoin’s move to $10,000 and beyond wasn’t mainly catalyzed by your average institutional player.

Instead, Zhao notes that it’s been a combination of retail and institutional investment. Backing this quip, the exchange chief executive cited data from Binance, claiming that 60% of all trading volume on the platform is from retail players — about the same percentage as it was last year.

CZ’s comment comes in stark contrast to comments from other reports. As reported by Bloomberg, a JP Morgan analyst stated that the paper futures contracts from the CME and CBOE (now defunct), and thus institutions, have played a larger role in recent Bitcoin price action that what many consumers are fed and believe:

“The importance of the listed futures market has been significantly understated. The report by Bitwise credits the traded futures as an important development in allowing short exposures that enabled arbitrageurs in properly engaging in arbitrage, and that the futures share of spot Bitcoin volumes increased sharply in April/May. [The data suggests] that market structure has likely changed considerably since the previous spike in Bitcoin prices in end-2017 with a greater influence from institutional investors.”

Also Diar recently wrote that “firm size” addresses (1,000 to 10,000 BTC under management) now own 26% of the circulating supply of the cryptocurrency, up from under 20% in August 2018.

This signifies accumulation of almost — if not more than — 1,000,000 coins, implying inflows of hundreds of millions and billions of dollars. It is unclear who is behind these transactions, but as explained by Diar, the size of the wallets suggest big investors.

Well On Their Way

Whether or not institutions are occupying the cryptocurrency market now, one thing is for certain: soon, there will undoubtedly be institutions in this space. Bakkt, the New York Stock Exchange’s sortie into the cryptocurrency space, is soon expected to beta test a Bitcoin futures product that is slated for institutional players. Also, Fidelity Investments, a firm with over 10,000 institutional clients, is still reported to be testing its cryptocurrency custody and trade execution services.

Photo by Samson Creative. on Unsplash

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Binance Announces Burn of Team’s BNB Token Supply

Major cryptocurrency exchange Binance announced that it completed the eighth Binance Coin token burn and that it intends to also burn the tokens allocated to its team.

Major cryptocurrency exchange Binance announced that it completed the eighth Binance Coin (BNB) token burn and that it intends to also burn the tokens allocated to its team in an announcement published on July 11.

Per the announcement, 808,888 BNB (equivalent to over $23.7 million at press time) of the Binance’s team allocation have been burned in the event. The exchange notes that the burn is part of the firm’s commitment to burn a total of 100 million BNB tokens and that the team’s supply equates to 40% of the total supply.

As of press time, Binance Coin is about 5% down on the day and is worth $29.37. According to Coin360 data, the coin’s current market capitalization is $4.1 billion, which makes it the sixth biggest crypto asset.

Binance Coin Seven-Day Price Chart. Source: Coin360

Binance Coin Seven-Day Price Chart. Source: Coin360

As Cointelegraph reported at the end of June, about $1.2 billion in BNB was transferred in 1.1 seconds with a $0.015 fee on the Binance Chain. Binance’s CEO Changpeng Zhao commented, “The future is here.”

Also in June, cryptocurrency exchange Bitfinex announced a burn of its UNUS SED LEO tokens, which will see the exchange’s parent company iFinex funnel its gross revenue into purchasing the tokens at market prices to destroy them.

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Critic: Margin Trading Is Gambling For Suckers

Margin Trading

Binancians
have been pushing the world largest crypto exchange by volumes for margin
trading services. Now, Binance has heeded to their call. The crypto exchange
has announced that they have launched their Margin Trading platform for all
their eligible users. The news has been received with mixed feelings with most
crypto Reddit users sounding an alarm over the new service.

One Reddit user, for instance, wrote:

“Margin trading is gambling for suckers. 90% of all traders lose money. It’s pretty much impossible to be profitable unless you’re already some high-level trader”.

Another Reddit user goes ahead and asks for a moment of silence “for all of the sheep about to be slaughtered.”

One more writes that they cannot wait for a ‘BinanMeRekt’ bot same as the bitmexrekt bot the BitMex liquidation bot that immortalizes those that have blown their margins.

Margin Trading Is a Wrecking Ball

Regular
margin trading has always been a difficult way to make money. Data shows that 96
percent
of all traders-irrespective of asset class traded- lose their cash
and quit.  Margin trading allows aspiring
traders to borrow funds from a broker so that they can take more significant
positions in trades.

This can amplify either consequent gains or losses. Margin trading is therefore different from gambling but quite as risky. While gambling is a game of chance, Margin trading is speculative. Speculative trading is done through calculated risks, where a positive return on investment is expected.

High Volatility Makes Margin
Trading Very Risky

Margin trading using crypto is nevertheless riskier than speculative Forex trading. Fiat is volatile, an aspect that plays well with margin trading. A spike in currency values over short periods could bring in profits for the trader. Cryptocurrencies, however, are even more volatile by nature, which can be good or very bad depending on the speculative prowess of a trader.

The
Binance co-founder Yi He said:

 “Though the current cryptocurrency market and legacy platforms for margin trading pose greater risks and benefits at the same time, we are confident that its development coupled with more knowledge on proper risk management will help realize greater benefits in the long run.”

Binance’s 3X Leverage

Consequently,
the Binance Margin Trading platform is available in pairs that include XRP,
BTC, ETH, TRX, BNB, and USDT. All coins listed on Binance will eventually fund
it. The trades will attract a 0.02 percent fee for all pairs, though the BNB
pair will carry a lower 0.01 percent charge.

Binance also says that its version 2.0 platform with margin trading capabilities has a newly optimized interface. Additionally, it has an advanced engine that improves order matching. Users will find it much easier to move funds from the margin wallets, into the main Binance Wallet. This process will not cost the trader any transaction fees.

BitMEX has a margin platform service that gives 100x leverage on BTC derivatives. Regulators around the world have given retail cryptocurrency derivative products a cold reception. The UK Financial Conduct Authority is considering a ban on the products, which would kill crypto margin trading for British investors. Regulators have cited high losses accrued from high leveraging as good reasons for the ban.

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BTC and LTC Halving ‘Shock’ May Be Mitigated by Merged Mining: Report

Block reward halving “shock” at Bitcoin and Litecoin could be mitigated by merged mining, according to Binance Research.

The effect of block reward halvings for both Bitcoin (BTC) and Litecoin (BTC) mining could be mitigated by merged mining, according to a report by a research arm of major crypto exchange Binance released on July 12.

Following Charlie Lee’s prediction that some miners may shut down Litecoin mining after the halving, which is expected to take place on Aug. 5, 2019, Binance Research analyzed the potential of so-called merged mining to retain incentives for crypto miners.

Merged mining is a practice of using the work done for one blockchain, or parent blockchain, on other smaller child blockchains by implementing Auxiliary Proof of Work (AuxPoW). To date, there are three major examples of merged mining, including Bitcoin blockchain-parented Namecoin (NMC), Litecoin-merged Dogecoin (DOGE), and Myriadcoin (XMY) which is merged with both LTC and BTC.

In the new report, Binance Research concluded that merged mining could “potentially provide and opportunity” to increase mining rewards in the light of future block reward halving scheduled for both Litecoin and Bitcoin. Alongside, other smaller chains could also potentially move to AuxPoW in order to support a higher level of network security while reducing the need for a separate mining set, the firm added.

At the same time, Binance Research warned about the potential shortcomings of merged mining from both a miner’s and a project team’s perspectives. Miners may not be incentivized to support child blockchains due to a significant level of operations costs as well as a potential decline in the given coin’s market price.

From the perspective of a project team working on a PoW crypto-asset, risks include dependency on the parent blockchain and new potential attack vectors.

In the report, Binance Research also considered Dogecoin, which has been operating for about six years to date, as the most successful example of merged mining. After Dogecoin adopted the merged mining model in August 2014, the coin’s mining hashrate increased by 1,500% while also showing correlation with Litecoin’s hash rate. According to the report, almost 90% of Dogecoin’s total hash rate derives from large Litecoin mining pools as of July 2019.

On July 5, Binance exchange listed Dogecoin on its crypto trading platform. On the same day, the exchange released its “2019 Q2 Crypto-Correlations Review,” stating that Dogecoin has become less correlated with other cryptos in Q2 2019, alongside with Bitcoin. However, the coin has continued to be significantly correlated with Litecoin, mostly due to the shared mining of two coins, the firm wrote.

On July 9, mining difficulty of bitcoin has reached a new all-time high by hitting a 9.06 trillion at an average hash rate of 64.85 quintillions per second (EH/s).