During a flight, if you cross a turbulent zone, you are sitting, with your seat belts fastened and, trying to manage your anxiety which in such situations becomes fear (unless you are my friend G. who invariably sleeps no problem while normal people cry or pray or scream) expects the peace to return.
Blockchain, what the hell is it?
by Adriano Marconetto
April 15, 2022
The turbulence of the markets, and of the crypto market in particular, of these weeks is not much different from what I have lived in spite of myself many times in the air, where the commander and the experts, invariably, tell you to rest assured because the planes have been designed to handle turbulence well. Often the problem is not the turbulence itself, but the panic that can ensue and which, as such, is irrational and difficult to manage.
Panic, for example, did not play a secondary role in the collapse of the Earth / Moon / UST ecosystem: when you see your assets collapse you try to sell to take home something, because something is better than nothing, and the result in such cases is that you bring home nothing, or something that comes very close to it. The attack on Earthas we have seen, it also overwhelmed their UST stablecoin and from there it was a moment to say that all the stablecoins are a problem, that they are dangerous and that a stablecoin based system cannot really work.
Everybody on the ground
by Adriano Marconetto
16 Maggio 2022
That system is called DeFi, decentralized finance, lives on the main blockchains trying to replicate the models of the traditional one in a decentralized way, starting with the loans of (crypto) currencies. In DeFi, stablecoins play an essential role: that of the simplificator and the facilitator.
In DeFi, everything can happen very quickly. For example, a person may need to borrow a certain digital currency for even a few minutes and, generally, must pledge another one. Stablecoins allow you to do these operations easier and faster. At the same time, one could decide to “park” their assets for a certain period, but without having to change everything into fiat currency: turn their coins into stable and wait for the right moment to return. For these and other reasons, stablecoins are in great demand and therefore offer attractive compensation in liquidity pools, where they lend and borrow.
There are various types of stablecoins: the most popular are the centralized ones (there is an identified subject that issues them) and are based on a 1: 1 ratio with a fiat currency, usually the dollar. The mechanism is simple: for every stable issued, somewhere – usually in a bank – there is a dollar. There should be a dollar. Or American government bonds. Or other safe securities, so as to guarantee a constant alignment (peg) between digital and fiat currencies. The problem is that some think that this is not always the case, 100%, let’s say.
For some time the biggest doubts have been addressed to Usdt, also known as Tether, the leader of stablecoins. Created in 2014 by a Cuneo citizen, issued by a Hong Kong company, Tether has reached a market capitalization of over 80 billion dollars: a lot. It publishes the composition of its reserves on its website, holds them in the main banks in the Bahamas, where there is a more favorable legislative environment for crypto than in other American states, and has them certified by an audit firm in the Cayman Islands, as well as than by the New York Attorney General.
The Earth / Moon / Ust crisis had the effect of a strong destabilization of the crypto markets, which generated panic, panic that also spilled over to stablecoins and therefore to the most important of them. In 48 hours (48 hours!) People sold Usdt for $ 7 billion, up to $ 10 in the following days. The good news is that Usdt didn’t flinch and liquidated everyone. A great show of strength.
Ten billion out of eighty are not exactly petty, like that, overnight. Imagine if something like this had happened to a large traditional bank. Which, it must be remembered, does not tell us how she uses the money we give her to keep. We have been giving them to them for centuries “on trust”. We know that there are regulators to watch, of course, but we also know that, as some cryptocurrencies collapse, some banks have also collapsed.
The signal from Usdt is therefore a strong signal: crypto is holding, centralized stablecoins are holding, and in the meantime the market will change a lot in the coming years, starting with the arrival of regulation. First step: the new register managed by OAM, the Agents and Mediators Body, dedicated to service providers relating to the use of virtual currency and digital wallet services operating in Italy.
In fact, since last May 16, registration in the OAM register is become mandatory for all companies operating in the crypto asset sector (disclaimer: Anubi Digital was among the first Italian companies in the sector to be registered). With the entry into force of the OAM register, in fact, l’exercise on the territory of the Italian Republic of the services relating to all’use of virtual currency and digital wallet services is reserved for registered parties. Consequently, all those who decide not to register, or to whom registration will be denied, will find themselves operating in conditions of violation of the regulatory framework.