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STABLECOIN

Tether Burns 500 Million USDT

Rocket Launch

Burn baby burn

Crypto’s largest stablecoin, Tether (USDT), has just burned 500 million tokens. Tether Ltd., the stablecoin’s issuer, moved the tokens to a wallet where they can’t be removed from, taking them out of circulation.

🔥 What is a token burn? A token burn occurs when a specified amount of tokens are sent to an address where the private keys are unobtainable, thus “burning” the circulating supply and increasing the value of all outstanding tokens. In Tether’s case, this is happening because investors are redeeming their USDT for U.S. dollars.

Gimme my fiat

Tether has an issuance and redemption process to maintain its token’s peg to the US dollar. The company holds a “treasury wallet” of Tether tokens that are not claimed by a dollar. When people deposit dollars, Tether withdraws from this wallet. When someone wants to redeem their Tether, it goes into this wallet and the investor gets a dollar.

When the wallet becomes too large, Tether burns a portion of this “treasury wallet”. This is what occurred yesterday. Since the beginning of this month, 800 million USDT have been redeemed.

Tether confirmed the burn in a statement saying:

“Over the course of the past week, Tether has redeemed a significant amount of USDT from the circulating supply of tokens. In line with this, Tether will destroy 500m USDT from the Tether treasury wallet and will leave the remaining USDT (approx 466m) in the wallet as a preparatory measures for future USDT issuances.”
Competition driving Tether out of the market

Tether’s woes are a result of new competition in the stablecoin market. Within the past few months, a handful of stablecoins have launched and just this week Coinbase added its first stablecoin, USDC.

Tether has had plenty of issues with transparency and trust. Investors have repeatedly asked for an external audit and Tether still has not provided concrete proof that Tether is backed one-to-one by U.S. dollars. In addition, some argue that it is actually impossible to redeem Tether for US dollars.

It is clear that investors are finding their new favorite stablecoins. For Paxos Standard Token (PAX), one of Tether’s competitors, over $30 million has been added to its market cap in the last week following the Tether drama.

 

EXCHANGE

Coinbase Bitcoin Cash Insider Trading Case Gets Dismissed

Motion to dismiss

According to court documents, Coinbase just received a pass on the Bitcoin Cash (BCH) insider trading case that began after the popular exchange listed BCH on its platform back in December of last year.

Filed in March, the class action lawsuit accused Coinbase employees and other industry insiders benefited significantly by “[driving] up the price of BCH for non-insider traders” before BCH was officially listed.

Now, the insider trading case has been dismissed by U.S. District Judge Vince Chhabria from California because the plaintiff had “not sufficiently articulated the legal bases for his claims.”

Listing drama? Nothing new

While Coinbase was dismissed from this case, cryptocurrency listings on the exchange have come with scrutiny before.

Recently, research by Diar revealed multiple conflicts of interest – including connections with founders, investors, and advisors – between Coinbase and its latest listing, 0x Protocol (ZRX). In addition, more than a year ago Coinbase listed Litecoin (LTC), a cryptocurrency founded by ex-Director of Engineering at Coinbase.

This leaves many to wonder whether Coinbase is evaluating potential projects fairly in the space or if there really is a “Coinbase Mafia.”

This wouldn’t be a problem if…

Other exchanges don’t come under as much fire for their listings. That’s because being listed on Coinbase’s exclusive platform has enough to spark a bull run for a cryptocurrency.

Dubbed the “Coinbase effect”, all of Coinbase’s cryptocurrencies have been seen significant gains following their listing announcement and even more in the long term after the cryptocurrencies become available to purchase.

Knowing this and after the BCH drama last year, Coinbase has allegedly taken new steps to ensure each listing process is conducted in the most fair and transparent way possible.

 

NEWS

Nasdaq Wins Newswire Blockchain Patent

Traditional finance exchange looks towards blockchain

Nasdaq was recently rewarded with a patent involving blockchain technology. The patent, originally filed on January 27th of last year, describes a system that would use blockchain to securely distribute time-sensitive information.

The reason that blockchain was chosen to be used in this system is to have an auditable trail of which information was sent to who. Specifically, the system will use smart contracts and incorporate encryption features.

The patent file summarizes the idea:

“An information computer system is provided for securely releasing time-sensitive information to recipients via a blockchain. A submitter submits a document to the system and a blockchain transaction is generated and submitted to the blockchain based on the document (e.g., the document is included as part of the blockchain transaction). An editor may edit the document and an approver may approve the document for release to the recipients. Each modification and/or approval of the document is recorded as a separate transaction on the blockchain where each of the submitter, editor, approver, and recipients interact with the blockchain with corresponding unique digital identifiers–such as private keys.”
In short, Nasdaq hopes this new system will streamline its newswire service while also maintaining transparency to make sure documents only arrive at the intended recipients.


MINING

AMD Reports ‘Negligible’ Blockchain-Related Sales in Q3

Two in a row

Yesterday, semiconductor manufacturer AMD announced its third quarter financial report and the blockchain-related sales from cryptocurrency miners don’t look pretty. So ugly, in fact, AMD’s CEO Lisa Su called them “negligible.”

This marks the second quarter in a row that AMD has announced a drop in blockchain-related sales – a figure correlated closely with the performance of the cryptocurrency markets.

Su also mentioned that blockchain technology was “a bit of a distraction in the short term” for AMD but did praise the potential that decentralized networks have.

Earnings bust

With no help from AMD’s blockchain-related sales among other issues, the stock price slumped yesterday and closed down about 9% after a disappointing earnings report.

In the past, experts argued that AMD’s share price was inflated alongside the cryptocurrency market as investors flocked to join the mining industry.