Venezuela Moves to Collect Taxes in Its Oil-Backed Cryptocurrency Petro

Venezuela could soon start collecting taxes in its oil-backed cryptocurrency the Petro (PTR), as the Bolivarian Council of Mayors has signed the so-called “National Tax Harmonization Agreement.”

The agreement applies to 305 municipalities in the country and specifies that tax and sanctions payments may be collected in the oil-backed cryptocurrency. Since it was launched, the cryptocurrency has been gaining users because of the government’s campaign to give it new use cases.

An announcement from the Venezuelan government details the country’s vice president, Delcy Rodríguez, will be in charge of implementing a taxpayer registry through a digital consultation tool, and of creating an information exchange and monitoring system for companies to record payments in Petros.

Commenting on the move, Rodríguez was quoted as saying:

It is the simplification of procedures, making the State’s administrative activity at the service of the people more efficient, of the economic sectors that stimulate economic activity in the productive and commercial areas

Venezuela has a total of 335 municipalities, but only the 305 under the mandate of the United Socialist Party of Venezuela (PSUV) are in favor of the new tax collection mechanism, as the others choose to keep collecting tax in the country’s fiat currency, the Bolivar, over a lack of infrastructure to process PTR payments.

The move comes as Venezuela is going through economic distress caused by hyperinflation. Bloomberg’s Café Con Leche Index shows that the country’s annual inflation rate is of 3,122%, even after the country devalued its current by 95%.

The Venezuelan government’s push to get people to adopt the oil-backed cryptocurrency has seen it accept passport payments in it, among other things. The government announced earlier this year that 15% of all fuel payments at petrol stations in Venezuela were made using Petros, and claimed 40% of all Petro transactions were made at foreign petrol stations.

The Petro is a controversial cryptoasset that local Venezuelan merchants have called a scam. The head of the country’s cryptocurrency initiative, Joselit Ramirez Camacho, has seen the U.S. Immigration and Customers Enforcement (ICE) add him to its Most Wanted List, accusing him of violations related to drug trafficking.

Featured image via Pixabay.

Price Analysis 8/12: BTC, ETH, XRP, LINK, BCH, BSV, LTC, ADA, XTZ, BNB

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Token Sales Are Back in 2020

As the price of bitcoin rises, token sales have become trendy once more.

“Ava, Dot,” tweeted ZenGo wallet CEO Ouriel Ohayon, “2017 is back. For better or worse.”

Ava Labs, the startup founded by Cornell professor Emin Gün Sirer, raised roughly $42 million in a public token sale for its Avalanche blockchain in late July.

Polkadot, the project spearheaded by Ethereum co-founder Gavin Wood, raised another $43 million in a private sale days later.

And in the weeks since, the momentum has only seemed to grow, as congestion on Ethereum has mounted.

By Tuesday, Aug. 11, the token sale for another base-layer competitor, NEAR, overwhelmed its host platform, CoinList, forcing a delay till Wednesday.

“We have seen an unprecedented amount of traffic hit CoinList servers, resulting in a site-wide outage,” according to a CoinList email obtained by CoinDesk. “We apologize for the inconvenience. The NEAR token sale has been postponed 24 hours from its original start time.”

Wednesday’s attempt also caused multipleerrors.” 

Yet, the NEAR sale – which wrapped Wednesday afternoon after $30 million was committed from 1,500 participants – still highlights the general pattern for token sales in 2020. First, the company raises venture capital and conducts a private sale, then the token-funded startup sells to the public through a platform that manages know-your-customer information and compliance. 

Before the swamped CoinList offering, the NEAR protocol launched in April following a $21.6 million private token sale led by venture capital firm Andreessen Horowitz (a16z). This week’s sale was just one of many trendy-yet-compliant token sales the CoinList platform has conducted in 2020, after cLabs raised $10 million in 12 hours back in May.

“The numbers here are remarkable and are a testament to both the product and the community that the NEAR project has created,” CoinList president Andy Bromberg told CoinDesk in an email.

By July 2020, token projects were once again raising money across the board. Generally speaking, contemporary token startups like Ava Labs, and even competing Layer 1 projects like Chia, aim to conquer Ethereum’s market share by scaling faster and with a more decentralized network. One of the primary ways they seek to outperform the second-most-popular blockchain network is by encouraging more users to run independent nodes.   

For comparison, only a small fraction of the roughly 6,000 ethereum nodes (removing the syncing nodes that are actually Ethereum Classic) are run on the user’s own hardware. According to a node operator from the German Ethereum startup Bitfly, roughly 68% of Ethereum nodes run on either Amazon Web Services or Google Cloud. 

This focus on nodes represents an area where Ava Labs’ Sirer intends to outperform Ethereum. Although the Avalanche mainnet isn’t scheduled to launch until later this year, Sirer said so far “thousands” of users around the world are already running Ava Labs testnet nodes.

“These are all organic, actual users … [like] students that have heard about this revolutionary protocol,” Sirer said. “We’re running five nodes ourselves.”

Similarly, Chia is working to build a community and currently appears to have more than 433 active nodes, down from a peak of roughly 1,430 earlier this year. Out of the above-mentioned startups, so far, Chia is the only example that isn’t running a token sale in 2020.

Token Boom, Part Deux

Unlike 2017, today the norm is for token sales to be conducted through an exchange, whether it’s CoinList, Gate.io or Binance

Not every token sale raises as much as Polkadot or Ava Labs, which attracted fanfare thanks, in part, to their celebrity founders. Smaller sales also abound despite, or perhaps due to, the COVID-19 economic crisis.

Along those lines, the Binance Labs-backed project Sandbox is running a token sale in August with the aim of raising $3 million. Several other crypto exchanges, including Gate.io, are also following in Binance’s footsteps to launch their own Initial Exchange Offering (IEO) platforms for new token sales. According to a Gate.io press statement, these sales raised more than $46 million so far in 2020. 

As for Ava Labs, Sirer said there will be more sales to come, including a new token “targeting people that own Ethereum,” called Athereum

“We spoon Ethereum as it exists,” Sirer said, describing how his startup will make an Ethereum-compatible bridge to encourage ETH holders to switch blockchains. 

In a tale as old as pre-mines, startups still aim to become proverbial “Ethereum killers.” 

With regards to the aspirational business model, Ethereum co-founder Joe Lubin provided an example with ConsenSys that many upcoming founders want to emulate. 

ConsenSys started as a hybrid incubator. Then, after building up the Ethereum community, ConsenSys split into a dual infrastructure provider and separate investment arm. It owns a significant stake across every sector of the Ethereum ecosystem – something Sirer may someday achieve with Avalanche, fueled by avax tokens, through Ava Labs. 

“It’s a mothership that will do a bunch of spinouts,” Sirer said. “We expect to spin [projects] out to become independent efforts and have independent income models associated with them.”

New approach

Unlike the original ETH sale in 2015, and the 2017 copycats that followed, many token founders now prefer ongoing sales with controlled distribution – both for regulatory reasons and to inspire a sense of exclusivity. 

Such was the case with Ava Labs, which raised venture capital (before multiple sales) from investors like Andreessen Horowitz (a16z), Initialized Capital, Polychain Capital, Balaji Srinivasan and Naval Ravikant. Token sales now happen in waves, just like a Series B. 

Looking toward the second half of the year, Sirer said he plans to support efforts to make non-fungible tokens (NFTs) for the Ava community as well. Polyient Games CEO Brad Robertson, head of a gaming startup that plans to use Ava Labs’ technology, said his team chose Avalanche over Ethereum because the former can handle more volume. The Ethereum network was infamously crippled by collectibles trading with NFTs in 2017. 

Capacity hasn’t improved entirely since then. In fact, the congestion is so high these days that it’s not uncommon to pay dozens of dollars worth of crypto in transaction fees. 

“We explored all of the networks on the market and feel Avalanche is best positioned to solve the scaling and transaction finality issues that have caused significant challenges to the whole DeFi ecosystem – especially with NFTs,” Robertson said. 

Sirer said his startup will allow people to “issue new digital assets,” including but not limited to NFTs, and use avax tokens to “participate in the new services we’re offering.” 

This is the common strategy among 2020 token projects, including most of the above-mentioned newcomers. In short, startups such as Ava Labs and cLabs (the team building the Celo network) are betting other people will build the products or services to make their blockchain platforms useful. They’re selling picks, shovels and dynamite during an emerging gold rush.  

This strategy is reminiscent of ConsenSys’ earlier token-issuance services and platforms, which dwindled when the company pivoted to infrastructure plays and equity investments. 

“There are tons of different use cases for Ethereum and we support nearly all of them,” said Infura’s Michael Godsey, the ConsenSys manager spearheading infrastructure services.

Yet, the fact that there are already blockchain-agnostic services doesn’t dampen the allure of building the next ConsenSys. It looks like many entrepreneurs are hoping to mimic the wealth creation, or redistribution, witnessed during the token boom in 2017.

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Bitcoin Bulls Defend Critical Support; Here’s Where it May Go Next

Bitcoin

Bitcoin Bulls Defend Critical Support; Here’s Where it May Go Next


  • Bitcoin saw a notable drawdown yesterday that came about after bulls once again failed to break the $12,000 resistance level
  • This led BTC to lows of $11,200 that were ardently guarded by its buyers, and it has since bounced slightly
  • The ongoing bounce likely marks bulls attempt to regain control over the digital asset
  • Analysts are noting that it may be well-positioned to see further upside now that it has confirmed the lower-$11,000 region as heavy support

Bitcoin and the aggregated cryptocurrency market has seen some turbulence over the past few days.

After attempting to break above $12,000 this past weekend, BTC found itself caught within a downtrend that ultimately led it as low as $11,200 overnight.

This downtrend signals that the selling pressure at this key near-term resistance is growing stronger by the day.

Once bulls do successfully break above this level, it is highly likely that the cryptocurrency will begin its next leg higher.

While speaking about this possibility, one analyst explained that he does believe BTC’s macro market structure still remains highly bullish.

Bitcoin Shows Signs of Strength as it Bounces Following Overnight Selloff 

At the time of writing, Bitcoin is trading up just over 1% at its current price of $11,500. This marks a notable climb from daily lows of under $11,200 that were set yesterday.

The selloff that drove BTC to these lows started as a slow descent this weekend following the $12,000 rejection, and its intensity began ramping up as the week got started.

Ultimately, the benchmark cryptocurrency plunged to lows of $11,200 before finding major support.

As BTC declined, analysts warned that it could be prone to seeing further downside if its 89-day EMA and cloud median were not defended.

Both of these levels were tapped right before BTC rocketed back up to $11,500.

“Heavier retrace than I expected upon failed breakout. Failure to bounce from here (89ema/median of cloud) we will be revisiting 10.8K area (200ema/support of cloud). The cloud is your friend,” one trader said.

Bitcoin

Image Courtesy of Teddy. Chart via TradingView.

BTC’s Macro Structure Likely to Lead it Back Towards $12,000

Another analyst also explained that the bounce at these crucial technical levels has bolstered its outlook.

He notes that BTC’s high time frame structure remains firmly bullish.

“BTC / USD: $11,250 still acting strong as support, the only issue we have here is that currently PA is at this EQ region that was previously strong support, currently seems to be showing some signs of resistance but nothing confirmed. HTF bullish structure remains for now.”

Image Courtesy of Cactus. Chart via TradingView.

As long as Bitcoin doesn’t retrace back down to $11,200 and break below this price level, the crypto is poised to push back towards its range highs.

Featured image from Unsplash.
Charts from TradingView.

Maker (MKR) Jumps 40%, But Technicals Suggest a Corrections Is Imminent

The DeFi market sector is booming. A glimpse at CoinMarketCap’s DeFi token rankings shows that the top 10 altcoins by market cap within this space are positing massive gains, except for Dai since it is a stable coin. Among all of these surging cryptocurrencies tokens is the decentralized governance token Maker, which is up over 30% in the past 24 hours. 

Coinmarkecap DeFi Rankings

Maker Surges Over 40% in the Last 24 Hours. (Source: CoinMarketCap)

Despite the significant bullish impulse that MKR has gone through, different on-chain and technical metrics suggest it is poised to retrace. 

A Pull Back Before Further Gains

The Tom Demark (TD) Sequential index supports the idea that Maker is bound for a steep correction. This technical indicator presented a sell signal in the form of a green nine candlestick on MKR’s 3-day chart. The bearish formation estimates a one to four three-day candlesticks correction before the uptrend resumes.

The TD setup has been incredibly accurate at predicting this altcoin’s local tops and bottoms, based on historical data. When looking at the 3-day chart, it even presented a sell signal in late February, just before prices crashed nearly 75%. Thus, the current pessimistic forecast must be taken seriously despite the hype around the ongoing rally.

Maker US dollar price chart

MKR Prepares to Retrace Based on the TD Setup. (Source: TradingView)

It is worth mentioning that each time the TD setup presented a sell signal on within this time frame, the bearish outlook was confirmed by a spike in sell orders. Given the recent price action, it is very likely that the decentralized governance token is in overbought territory and that it will indeed correct.

Stiff Resistance Ahead of Maker

IntoTheBlock’s “In/Out of the Money Around Price” (IOMAP) model adds credence to the bearish outlook. This on-chain metric reveals that for Marker advance further, it must turn the $845 resistance level into support. Doing so may no be as easy since 54 addresses had previously purchased nearly 8,700 MKR around this price level. 

This supply wall may have the ability to hold against any upward pressure because holders within this range would likely try to break even in the event of an upswing. Moving past it, however, increases the odds for the DeFi token rise towards $900 or higher. 

Maker Faces Stiff Resistance Ahead. (Source: IntoTheBlock)

On the flip side, the IOMAP cohorts show that in the event of a correction the most critical support level underneath Maker sits at $705. Here, over 720 addresses are holding more than 14,200 MKR. These investors may try to remain profitable in their long positions and even buy more tokens to avoid seeing their profitable investments turn into losses. 

If such buying pressure is strong enough, this supply barrier would likely hold and allow prices to rebound into higher highs. 

Featured Image by Depositphotos
Price tags: mkrusd, mkrbtc
Chart from TradingView.com

Ethereum DeFi’s “Yam” Protocol Encounters First Bug; User Funds Secure

Ethereum’s Yam Finance protocol has been the hottest crypto project of the past 24 hours. As reported by NewsBTC previously, the unaudited protocol managed to garner $400 million worth of value in under 24 hours, with investors throwing boatloads of capital at the project.

The token of the protocol, YAM, is behind this exponential explosion in activity and value in the DeFi space.

Unfortunately, it was just revealed that Yam’s developers found a bug in one of the contracts pertaining to the protocol. Fortunately, though, the funds of users should be safe for the time being.

Bug Found In Yam’s Rebasing Contract

According to a thread shared by Yam’s developers, a bug was just found in the rebasing contract. The rebasing contract is the platform through which the supply of YAM is recalculated and redistributed every 12 hours to bring the price of the asset towards $1.

The staking contracts, which hold over $400 million worth of value, are “safe, as this is an unrelated part of the protocol.” The YAM that users hold is also unaffected.

Yam’s developers say that the bug means more YAM than intended will be distributed: “Rebases following the initial rebase will mint more YAM than intended.”

To fix the issue, Yam’s developers are creating a two-part proposal that will pause YAM rebases for the time being and will “reset YAM in YAM reserves to zero [to eliminate] the over-inflated YAM in the reserves.”

The communicate has begun to band around the proposal from the developers, with Primitive Capital’s Eric Meltzer telling users of the platform to vote and approve the proposal.

While moves are being made to amend the issue, YAM has dropped by 33% since the thread was published.

Featured Image from Shutterstock
Price tags:
Charts from TradingView.com
Ethereum DeFi's Yam Protocol Encounters First Bug; User YAM Secure