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Data Shows Interest in Derivatives Trading is on the Decline

Compiled by analytics firm CryptoQuant, rates from several major exchanges show that the cost of borrowing to buy crypto on leverage has fallen to such a point that it is currently in the negative. This can be viewed as a sign that the demand for money to make leveraged bets has gone down. 

Open interest in bitcoin futures is slightly down since the last week of December when it was around the level of $19B, and is currently at $16B. Just for comparison, during the November’s bitcoin peak open interest was at around $26B, all according to data site Skew.com.

At the same time, Ethereum has also seen a decline in open interest for the futures market – currently measured at $8B, down almost twice from its November levels of $13B.

The falloff trend could be attributed to year-end bets taken during 2021, according to researchers. Although the current Open Interest levels are higher both for Ether and Bitcoin, than they were at the same time last year, they are down to about the same levels as October, before the big run-up in prices.

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The Share of Illegal Transactions in Сrypto is Lower than ever amidst the Total Market Volume Growth, Chainlink Reports

In a recent preview of the 2022 Crypto Crime Report of Chainlink, the company states that during 2021 cryptocurrency-based crime has hit a new all-time high, with illicit addresses receiving $14B over during the year which is an almost double rise from 2020’s $7.8B level.

The biggest surprise to the researchers is that all cryptocurrencies tracked by the company grew their total volume of transactions to $15.8Tr in 2021 which is an 567% up from 2020’s totals. However, the increase of cybercrimes involving crypto is only 79%. 

The positive side of the report mentions that with the growth of legitimate crypto usage, the illicit activity’s share of cryptocurrency transaction volume has never been lower. According to the report, the highest levels were during 2019, when 3.37% of all transactions were connected to criminal activities, whereas during 2021 the share of these activities was only 0.15%.

Researchers outline the tendency that crime is becoming “smaller and smaller” part of the cryptocurrency ecosystem, and Law Enforcements’ ability to combat crypto-based crime is also evolving. 

The crime categories to stand out during 2021 are stolen funds, scams, with DeFi being one of the main fields of action for both. During last year scamming revenue rose by 82%, but cryptocurrency theft grew by 516% compared to 2020. This translates to roughly $7.8B stolen in scams and $3.2B crypto stolen from victims. The DeFi sector is also the one with the most growth in value received by service from illicit activities between 2020 and 2021 – almost 2000% rise.

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Tether Blacklisted Three More Ethereum Addresses, Freezing $160M USDT

Tether, the issuer of USDT, has added three more Ethereum addresses to its blacklist, successfully freezing $160 million USDT that was held on them.

The company explained this move in an email to Coindesk, stating that the assets were frozen upon a request from law enforcement. The spokesperson added that no further details may be disclosed at the moment.

As the data from the Bloxy block explorer shows, there are now 563 Ethereum addresses on Tether’s blacklist. Owners of these addresses are unable to move their funds. Tether first utilized its blacklist option in November 2017. Usually, the issuer freezes assets following the demand from cryptocurrency exchanges or law enforcement officials

The crypto community has a mixed reaction to the news. Some users point out the importance of fighting criminal activity and money laundering on-chain, while others cry out for decentralization. Do Kwon, the CEO of the Terra blockchain, used the news as an opportunity to shill his UST stablecoin, stating that there’s no backdoor to freeze it.

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Coinbase to Step on the Derivatives Trading Market

Coinbase is on the final stretch of acquiring the CFTC-regulated derivatives exchange platform FairX. With the acquisition, Coinbase aims to access the crypto derivatives market in the U.S. According to CoinGecko, only the top three crypto spot exchanges have amassed over $25B in trading volume over the last 24 hours, but in the same amount of time the top three derivatives exchanges have passed the $70B mark in trading volume.

It comes to no surprise that in such market conditions Coinbase, which is the only publicly traded crypto exchange in the U.S.A. announced today its plans to acquire FairX and offer crypto derivatives trading to its users. The deal is planned to be finalized by the end of March, and will not be the first of its kind in the sector, following the example of FTX.US and Crypto.com.

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Solana Was Predicted to Become the Visa of Crypto

Solana blockchain received high praise from Bank of America digital asset strategist Alkesh Shah in his recent research note from Jan 11. Shah has predicted that Solana could easily bite off a fair market share from Ethereum due to its high-speed and low-cost transactions. 

“Its ability to provide high throughput, low cost and ease of use creates a blockchain optimized for consumer use cases like micropayments, DeFi, NFTs, decentralized networks (Web3) and gaming,” Shah wrote in his note, as cited by Business Insider.

The researcher claims that Solana may become the “Visa of the digital asset ecosystem”. The processing speed on Visa is around 1,700 transactions per second (TPS), whereas Solana has a theoretical limit of 65,000 TPS. Meanwhile, a highly secured and decentralized Ethereum blockchain can handle 12-15 transactions per second and such a low throughput pushes up the gas fees that users need to pay on the network – as high as two-digit numbers in dollar equivalent.

Alkesh Shah also commented on recent security issues Solana went through, concluding that as long as Solana prioritizes scalability, its network stays relatively less decentralized and secure. This approach, according to Shah, has tradeoffs, illustrated by several network performance issues since inception.

Alongside Solana, the BofA researcher also mentioned other Ethereum competitors, namely Avalanche, which in his words “attempts to find a middle ground” between Ethereum’s security and Solana’s scalability. 

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LooksRare Passed $100M in Trades During its First Day of Existence

Only one day passed after the release of the OpenSea competitor – LooksRare and it has already passed $100M in sales. The NFT marketplace has so far generated nearly $2M worth of platform fees to be distributed among LOOKS token stakers in the coming hours.

Although OpenSea is considered the dominant player in the NFT marketplace niche, with the company often accounting for 90% of the trades in the sector, many criticize the platform’s strategy of acting like a middleman in a decentralized field, whose main aim is to get rid of middleman-like structures. The projects’ users have been urging the platform to release a token and decentralize its governance for months. 

At this time of criticism, the LooksRare protocol emerged and with its lucrative user incentives managed to take over a large portion of the daily NFT trades. However, speculations arose that the overnight success of the platform may be temporarily and only the result of wash trading. Multiple observers have pointed out that a large portion of the LooksRare trades volume is highly likely only generated due to wallets controlled by the same party “selling” assets back and forth, in order to participate in the airdrop and get rewards for trading. Currently over $10M worth of LOOKS tokens per day are being rewarded to buyers and sellers on the LooksRare platform. The price of LOOKS at the time of writing is $3.73, according to Coingecko. 

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Short Traders Lost Over $122.19M in a Recent Market Recovery

The unexpected cryptocurrency market recovery witnessed on January 11 has hit some bearish futures traders causing the liquidations of over $121.5 million worth of positions. 

According to CoinGlass data, nearly 64% of all futures traders were betting on the market’s downside. Bitcoin futures traders have seen around 815.31 BTC liquidated worth around $34.75 million. Another asset leading in liquidation is Ethereum, with approximately 8,650 ETH lost in trades worth over $28 million.

Third place in liquidation amounts goes to Near, with over $6 million in losses witnessed by shorting traders. Meanwhile, the NEAR token has hit its new all-time high at $18.72 amidst the overall market downturn. Alongside Near, many major altcoins have shown a slight growth for the last 24 hours such as AVAX (+7.9%), SOL (+4.2%), DOT (+8,4%), ADA (+7%), and MATIC (+7.4%).

Source: Trading View

The undergoing recovery of the cryptocurrency market started when the price of Bitcoin went above $43,000 in early hours on Wednesday (UTC). This jump came shortly after the US Federal Reserve official Jerome Powell promised to fight the current high inflation by providing a tighter monetary policy. As of the time of this writing, BTC is trading at $42,769, almost 38% down from its ATH of $69,044 from November 10.

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NFT Minting Platform Got Hacked for $18.7M

A hot wallet security breach was suffered by the sports nonfungible token minting platform Lympo on Monday. The hackers gained access to 165.2M LMT tokens from 10 different project wallets that were compromised and sent most of the stolen funds to a single address, where they were swapped for ETH on Uniswap and SushiSwap, after which the assets were transferred elsewhere.

Following the malicious attack the price of LMT has fallen to $0.01882 at the time of writing, according to Coinmarketcap, which is the current all time low of the token. In response to this, the team behind LMT stated they are temporarily removing LMT from various liquidity pools in order to minimize disruption to token prices. Although the attack is still being investigated, the company assured its token holders they are working hard to resume normal operations “as soon as possible”, by preparing a plan to remediate the attack.

Lympo is an NFT minting platform focused on working with world-famous athletes and clubs, its ecosystem includes custom sports characters created by various artists and sports influencers. The company is owned by Animoca Brands and launched its token in early 2021.

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Gas Explosion: Ethereum Gas Price Went up almost 40%

The price of transaction fees on Ethereum rose again: yesterday the price of gas increased by 38.33% overnight and amounted to 218 gwei, according to YCharts. The last time a similar figure was seen on September 7, 2021, then the transaction price was 214 gwei. The price level is also high today at about 150 gwei, which in dollar terms is about $42 for an ERC-20 token transfer and about $130 for a Uniswap swap.

According to Etherscan, the biggest consumer of gas is OpenSea, whose sales volumes rose sharply in January and are aiming to break the August 2021 record. The NFT marketplace’s Ethereum contract has used 12.15B gas units in the past 24 hours.

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OpenSea’s Sales Volume and Number of Active Users Tends to Reach New All-time Records

According to Dune Analytics, as of Jan. 11, monthly sales on the OpenSea marketplace are $2.21B, already more than half of the August 2021 numbers, a record month for the platform. It is safe to say that if the pace, which is largely attributed to the NFT hit, PhantaBear, does not slow down, January 2022 will break the August record of $3.43B.

The PhantaBear collection now tops the OpenSea rankings, with $54.46M worth of NFTs from this collection sold in the last 24 hours. In second and third place in the OpenSea rankings are the Bored Ape Yacht Club and Doodles collections, with $52.14M and $50.28M in volume respectively. In the last 24 hours, the volume of Doodles sold has dropped by almost 45%.

Another indicator by which OpenSea is actively gaining momentum is the number of active traders on the platform. Last month that figure reached an all-time high of 362,679 users, and this month it’s clearly looking to renew it – it’s not even mid-January yet, and the number of active OpenSea users has already reached 266,296, according to Dune Analytics.