Feb 18th, 2020: ETH 2k Watch, Day 1

ETH hits a new all-time high of $1,950 and people lose their mind over BNB, just another day in the Bitcoin mines. Pat and Amy chat price, plus the SEC takes some incredibly expected action against DMM (and Pat goes on a rant about when we should actually be concerned about SEC action), and Coinbase prepares to IPO with a juicy private market valuation of $77b.


Automatic Transcription

Amy    00:00:00    Hello, and welcome to the DeFi daily 10 minute or less DeFi crypto update. I’m Amy here with Pat and today is Thursday, February 18th, 2021 

Pat    00:00:13    Sitting pretty at 50 1037 55 down 2% from yesterday. But the real news today is a theory I’m hitting a new all-time high of 1,950 flat is sitting right now in 1900 flight itself, down a 0.09% from yesterday. But it is, it is an all time high, super exciting Ethereum’s on a tear. Everyone knows it. It is absolutely a incredible other big winner. Today is a BNB coin, which I, you know, I’m not, I’m not a huge fan of the BNB coin. I don’t really like what they, the way they kind of use it. But the end of the day, it’s up 40% today based on a couple of articles. Um, talking about news for pancakes swap, which is on there. We’ll talk about that later in the show. 

Amy    00:00:57    All right. Thank you as always to our sponsor, but wave believe is a digital asset management platform that does tax tracking and accounting for crypto and for DeFi. So, um, if you need gain loss reporting or at any help with preparing your taxes this year, make sure to check them out [email protected], where you can request a demo or follow them on Twitter at fit wave platform. All right. So Coinbase is getting ready for their public listing and they got a $77 billion valuation from NASDAQ 

Pat    00:01:31    Private markets. So, yeah, so there’s, there’s a, there’s a few different secondary markets that are out there. And the one of NASDAQ secondary markets where you could sell shares came out that a $77 billion valuation, um, that is on the high side of the range. I think the range was 15 to 75. So it was actually the very, very top of it. Uh, you know, kudos to Coinbase, essentially timing their IPO perfectly with the rise of Bitcoin at 50 K and Bitcoin entering the mainstream of, uh, of our brains, I guess, I don’t know whatever it is, but he had the world, the international mainstream of, uh, finances. So that’s, I mean, I think that’s entirely where this has been driven off of is just, you know, way over hype on it. I don’t really think Coinbase is worth that much, but, but Hey, I mean, gosh, you know, there’s, uh, something came out earlier this week, that Coinbase was the one that actually orchestrated the, the Robin hood, uh, purchase. 

Pat    00:02:20    So doing, you know, a Tesla Tesla purchase. Um, so doing these kinds of, uh, orchestra in these large scale purchases is a very lucrative deal. Uh, it allows you to use like your, your dark markets that you yourself control allows you to offer services. Like you can may pair up services. So if you have some people that want to do ODC sells, you can pair it up and do an OTC buys like that. So I, you know, maybe, maybe it is absolutely worth that, but either way, it’s super exciting. I mean, this will be the, this will really be the first legitimate, uh, cryptocurrency company going public. We’re all excited about it. Yeah. 

Amy    00:02:53    All right. So next pancake swap brings a whopping, uh, DeFi volumes to the smart chain. 

Pat    00:03:00    What are you going to say? So Binance smart chain is a one for one clone of Ethereum, like a hundred percent, no questions asked. This is not a, there is no uniqueness here. And, and to that extent, there is no, this is purely an issue of fees. If this was anything else, this would not be like, it is like you would not see a spike on the, on the BNB side of it. Um, but it’s a, but because fees are so high on Ethereum and continue to be so high, there’s obviously this has of the things, you know, there’s, there’s knock on effects of, of Cardozo, for instance, doesn’t support native secondary token, like native tokens on top of it. Um, so there’s, you know, you’re not seen and Cardona is not yet, uh, releasing their solidity compiler. So there’s, there’s reasons that people are moving to BNB instead of Cardona or algorithm or other services. 

Pat    00:03:48    But, you know, I think all for instance is a great example of a, of a, of a legitimately different style of blockchain that has much better scaling properties that I would expect to be, see, you know, this type of movement from BNB is a clone of the theorem. It’s going to have all the same issues. It’s just never going to happen because it’s never going to be a very popular blockchain. And, you know, the number of tokens or even on there that Peggy swap is actually swapping is, is minimal. So I don’t know, it’s, uh, you know, it’s good for them obviously had a disproportionate impact on the BNB price, which is good for Binance. Uh, hopefully they’re selling some and, uh, well, we’ll keep an eye on it, but, but just be very, be careful around BNB. Like this is, these are, this is not a, this is not like a well-governed DeFi token. This is a corporate token for all intents and purposes. So, 

Amy    00:04:37    Okay. Next, um, defined money market closure after an sec probe could set a Rocky precedent. 

Pat    00:04:47    Yeah. So these are, these are the M M assets that are out there. This is a Tim Draper startup that was funded to go after tokenizing real world assets. They did a ICO. That was it. That even back when they did it, people knew was, was illegal. I mean, at the end of the day, there are ways you do security offerings in the United States. It sucks. No one likes it. It drives companies off shore from the U S and it, and it makes people in the U S criminals by using VPNs to get around there, these really dumb rules. But at the end of the day, there are the, the sec has been incredibly clear from the very beginning about, and I don’t mean the very beginning. I mean, this is like literally 50 years or a hundred years worth of securities. Law is very clear about if you’re going to sell something that smells a lot. 

Pat    00:05:30    Like there’s basically what a security is by the sec rules. There’s something called the, how we think that the, how we test it’s, it’s really not that complicated. I mean, essentially the question you are asking is as you sell this, are the people buying it, expecting a, some sort of return on investment. That’s, that’s it? I mean, it’s, it’s, it’s very nebulous. It’s very squishy on purpose, but pretty much every ICO fell under that. What doesn’t fall under that. And what’s really, really cool about DeFi is that if you’re a governance protocol that generates its own coins, so you’re not selling the security, you have a protocol that generates coins and gets value from that. And it’s traded on a, on an exchange that like, you know, a D a DeFi exchange, that is a very different situation. That is a entirely different world, because you are not selling something that investors are expecting your return on ICO’s were selling something and investors were spending yet a return on that’s, why they were investing in it. 

Pat    00:06:28    They thought it was going to go up in value. This was illegal back when it happened, it was really dumb. The company’s going to go out of business. Now, same with KYCC. Like there’s been all these different actions have been taken. Everyone knew at the time that this was going to happen. You know, it’s one of those, like, as we I’ve looked at this, we had different people and it was long story short. This was, this was to be expected. I think that people are saying that this is the end of DeFi. I do not think that is the situation. You know, where there is something interesting here to look at is what we’re, we’re, I’m going to get interested in. <inaudible> I will tell you right now where I am super interested in sec action. This, this does not interest me. This is a very legitimate thing, because they were doing a legal security sale in the United States. 

Pat    00:07:08    What interests me is when Eunice swab gets there, first subpoena unit swap is a US-based entity. They are, extensibly doing trading. They are enabling exchange of, of assets and securities, whether or not it is a, you know, DeFi or not, doesn’t really matter. They are enabling that. Do they get a subpoena? Do they get dinged by the sec for not doing 10 99 Ks? Like, there are all these interesting questions around that, you know, just cause they’re not just because you’re not getting out. I want to do this because this came up today just because you don’t get it to nine, nine K it’s a 99 from, you know, swap does not mean you don’t have to pay your capital gains taxes. I want to make that super clear to everyone that’s out there. Like if you are trading cryptocurrency, regardless if it’s on DeFi, or if it’s you trading it for weed with your drug dealer in the parking lot, like all of those things trigger a taxable event. 

Pat    00:08:03    And I’ll tell you what the IRS doesn’t care. If you’re trading it for like, you know, for weed in the parking lot, they don’t even make you put that in there. They don’t care if it’s illegal, like you need to be paying your taxes on DeFi stuff. That’s why, that’s why I wave you. We spent a lot of time building our DeFi pieces because you don’t get to not pay your taxes because you just walked into an antenna nines. But interesting question does the sec come after them and ding them for being a US-based and there are US-based with us investors and us owners, a US-based exchange, offering exchange services without doing a lot of the things that you’re expected to KYC, AML and 10 90 nines. I don’t know. That’s, that’s where I get interested in the story. And I see action at this point where as the going, after someone that was really running a scam like this or something that smells a lot more like a scam different issue. 

Speaker 2    00:08:50    Yeah, I agree. All right. So I guess let’s see. Do we 

Amy    00:08:56    Have time now? I don’t think we have time for any more stories today. So thank you for listening to the DeFi daily. Remember, you can check us out on Twitter, where we tweet out links to all the articles that we reference and the show and our handle is that DeFi daily. 

Pat    00:09:11    All right. Take it easy. Have a good one.

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