a16z Puts $16 Million Behind Stablecoin Platform MakerDao

a61z invests in MakerDAO

Stablecoins are becoming big business these days. In a $15 million deal, Andreessen Horowitz’s a16z crypto fund is buying 6 percent of the total MakerDAO maker (MKR) token supply. The investment will give a16z a financial and governance stake in the dai stablecoin.

A16z made the announcement today, September 24, 2018. MakerDAO also received $12 million in a round led by Andreessen Horowitz and Polychain Capital in December 2017.

A stablecoin is a token pegged to another asset, like the dollar. Stablecoins can provide a hedge in the volatile world of crypto trading, especially in exchanges that have no direct link to banking. MakerDAO has two main tokens: dai and MKR. A separate token, MKR works alongside dai to help dai maintain its 1:1 peg with the U.S. dollar.

A16z sees a world of opportunity for stablecoins. “The same volatility that is holding back crypto for payments is also limiting its use for a host of other financial services and products,” a16z partners Katie Haun and Jesse Walden said in a co-written statement.

“Today, it’s not really practical to make a long-term loan in bitcoin because you’d have to consider two independent risks: first that the loan would be repaid, and second, whether the bitcoin would be worth more or less at the time the loan came due.”

The purchase of MKR marks the first investment from a16z’s dedicated $300 million crypto fund. The move was driven by Haun, a former federal prosecutor who led the investigations into the Mt. Gox heist and Silk Road.

According to the terms of the partnership, MakerDAO, a project that runs on Ethereum smart contracts, will receive the operating capital over three years. Dai adoption and regulatory support are  main priorities, says a16z. To reach those goals, Andreessen Horowitz and a16z will be offering expertise in areas ranging from sales and business development to marketing, talent and more.

A16z is not the only company to set its eyes on MakerDAO. ConsenSys, a production studio for Ethereum-based startups, has partnered with MakerDAO on two social-good projects: Bitfröst and optiMize. Blockchain money transfer company Wyre has also partnered with MakerDAO.

Ethereum creator Vitalik Buterin considers MakerDAO one of the “most interesting” projects running on Ethereum. “The way that whole construction works and how it is designed to be decentralized is fascinating,” he said in a recent interview with Bitcoin Magazine.

Still, MakerDAO faces some stiff competition. Currently, there are 29 active stablecoins in the market, all vying for a piece of the action. Tether is by far the most popular, with a $2.8 billion market cap. The difference between tether and dai, however, is how the two assets are collateralized.

Tether is supposedly backed by fiat (the company tells us this but has had no official audit to support those claims). MakerDAO, on the other hand, is collateralized with ether, the native token of the Ethereum blockchain. But because ether is a volatile asset, if you want to buy $100 worth of dai, you have to deposit $150 worth of ether.

How dai works is not inherently easy to understand either. MakerDAO uses an elaborate scheme of tokens, smart contracts and “autonomous feedback mechanisms” to maintain its peg.

To get dai, for instance, you send ether to an Ethereum smart contract. You then lock your ether into a collateralized debt position (CDP) and draw out a loan of dai against that. To redeem ether, you send dai back to the CDP, along with accrued interest that can only be paid for with MKR.

After interest is paid, MKR is burned, removing it from the total supply. The logic here is that if the adoption and demand for dai and CDPs increase, so too will the demand for MKR. In terms of its governance role, MKR will also enable a16z to vote on certain “risk parameters” of CDPs.

MKR is currently trading at $459 with a total supply of 1 million. If the demand for MKR skyrockets, that will be a boon for a16z. But first, a16z needs to convince crypto traders that dai is a better bet than tether, or fiat, for that matter.

This article originally appeared on Bitcoin Magazine.

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Here We Go Again — Crypto-Community to Deal With Another Foundation

Here We Go Again — Crypto-Community to Deal With Another Foundation

This weekend a new organization was announced at Baltic Honey Badger bitcoin conference called the ‘B Foundation.’ At the event, Satoshi Labs co-founder Alena Vranova divulged the information of a new foundation that will have a mix of “charitable and commercial” efforts.

Also read: The Bitcoin Files Protocol Provides a BCH Secured File Storage System

The B Foundation: A Charitable and Commercial Effort

Here We Go Again — Crypto-Community to Deal With Another FoundationThis weekend cryptocurrency proponents were surprised to hear about a new association created in order to bolster bitcoin core (BTC) and lightning network (LN) adoption. The astonishment is due to the fact that many cryptocurrency enthusiasts believe foundations mix like oil and water within the ecosystem alongside the controversies tied to the original Bitcoin Foundation. Despite public opinion concerning foundations and bitcoin, a group of self-professed ‘crypto-thought leaders’ has formed a union called the ‘B Foundation.’ According to the event slides, the B Foundation members will include Jameson Lopp, Elizabeth Stark, Adam Back, Pavol Rusnak, Alena Vranova, Whale Panda, Alex Petrov, Francis Pouliot, and Giacomo Zucco.

Here We Go Again — Crypto-Community to Deal With Another Foundation
The B Foundation members will include Jameson Lopp, Elizabeth Stark, Adam Back, Pavol Rusnak, Alena Vranova, Whale Panda, Alex Petrov, Francis Pouliot, and Giacomo Zucco.

According to the announcement transcript, the main focus of the foundation will be dedicated to BTC and LN development. The foundation will solicit donations and also be both “charitable and commercial” in order to “match donors and projects.” According to the B Foundation’s Alena Vranova, the group’s governance will be base on a council of board members.      

“The B Foundation will be based in Liechtenstein because of the bitcoin support savvy government — The foundation will be mixed charitable and commercial,” explains Vranova’s transcript. “The governance will be based on a council (for legal), executive team (director, executive assistant, etc), and the board will be non-paid.”

The transcript continues:

I have to say that centralized efforts are much more effective — If you have an Ethereum Foundation with a marketing department and promotions and creates beautiful sleek-looking material and produces materials, it’s much more effective in the short-term.

Here We Go Again — Crypto-Community to Deal With Another Foundation
According to the Twitter crowd, for most people, this announcement triggers doubt and skepticism.

Ex-Bitcoin Foundation Member: ‘It’s Appalling to See Maximalists Defending a New Foundation’

Some people liked the idea of the B Foundation like the former Bitcoin Foundation director Bruce Fenton. “Congrats to The B Foundation, a new non-profit org Some great people with solid track records in Bitcoin,” Fenton explains on Twitter. Although, across forums and social media, a few cryptocurrency community members seemed skeptical about the idea of a foundation and especially one with people who are focused on extreme BTC maximalism.

“As an ex Bitcoin Foundation Board Member (remembering the horror), it’s appalling to see Maximalists defending a new Foundation,” explains Olivier Janssens on Twitter.

Janssens adds:

The only way is having competing projects for separate areas, like Coincenter. Giving one organization all those tasks = terrible idea.

Here We Go Again — Crypto-Community to Deal With Another Foundation
During the Baltic Honey Badger bitcoin conference, the B Foundation collected $850 USD worth of BTC.

Openbazaar’s Brian Hoffman: ‘Divisiveness Dressed up as Something Every Supporter of Bitcoin Should Support’

Openbazaar’s CEO Brian Hoffman detailed on Twitter that he is supportive of efforts to bolster cryptocurrency adoption, but believes an organization aimed at protecting the protocol is a bit contradictory.

“I’m supportive of efforts to educate and promote the use of Bitcoin or related tech, but the idea of having some kind of canonical organization that positions itself as the protector of the protocol is antithetical to the nature of Bitcoin itself — We the people protect Bitcoin,” Hoffman states.

When another bitcoin supporter told Hoffman he sees no threat with the new B Foundation, the Openbazaar founder responds by saying:  

I never said it was a threat — It’s an attempt to sow more divisiveness dressed up as something every supporter of Bitcoin should support.

Of course, the cryptocurrency community will just have to wait and see to find out what this foundation plans to do with donations. The organization has already been soliciting donations and gathered $850 USD worth of BTC on September 23. According to the B Foundation Twitter page, there will be more announcements concerning this group’s actions in the near future.  

What do you think about the idea of another bitcoin-based foundation? Do you like the idea of this new B Foundation or do you feel it adds more divisiveness? Let us know what you think about this subject in the comment section below.

Images via Shutterstock, the B Foundation Twitter account, Twitter, and the theb.foundation website.  

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The post Here We Go Again — Crypto-Community to Deal With Another Foundation appeared first on Bitcoin News.

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market decision on price then lift

market decision on price then lift

Bitcoin / Dollar BITFINEX:BTCUSD

Wolf No,
ok so ive added an explanation of the “bouncing” price

Wolf No,
i think the bouncing price is basically the market testing what is the “accepted” price. since BTC             isnt physical and its got no tangible asset ( just 1 and 0 on a hard drive) its basically a blind guess as to what its really worth, you can factor in Mining difficulty, price of HARDWARE ASICS, Price of electricity, price of Taxes and related fees. But basically its a momentum based price whereby if there is a downward trend the Floor of the Market “caves in” a little bit like a trampoline and theres a little bounce.

Wolf No,
This bouncing pattern happened before the massive influx of speculation which IMO             was a freak incident that was induced by Shill and the Media

Wolf No,
The next thing is either a complete Flop and BTC             crashes (unlikely because of its Market Dominance and the fact it is now basically too big to fail) and secondly its early stages of operation (still <10 years old and only 0.1 of the total supply of currency in the world)

Wolf No,
So naturally barring a freak act of god (market banned by UN or what ever) the only way is UP. This will be “tested” with small bouncing charts as people test the water. The previous pump and dump of 2017 will be spooking the “Professional” traders who will ride the waves of PnD             but generally the long term price seems to be a pattern of regular “bouncing” then when the price is “set” a lift off.

Wolf No,
/end shill