Caiyun Weekly Report: 20210228 bitfinex pays fine, EIP-1559 causes controversy

I wish you all a happy Lantern Festival. The main focus this week: the market plummeted, and cryptocurrency entered a correction mode; Bitfinex reached an agreement with New York and accepted a fine; South Korea issued new regulations to impose a 20% tax on cryptocurrencies next year; Coinbase disclosed its listing information, with a valuation of over 10 billion US dollars; EIP-1559 caused controversy, with F2Pool supporting it and Spark Mining Pool opposing it; Nvidia 3060 graphics cards went on sale, and publicly stated that it would limit the mining computing power of 3060 graphics cards.

4. Due to the market decline, the DeFi chain has hit a new high in liquidation. This caused the mining income of Ethereum miners to increase by about 50% on February 23, and the gas fee also hit a new high. For DEFI, although it has a high degree of decentralization, due to the congestion of the Ethereum network, if the market fluctuates greatly, the investor's assets may not have time to cancel the pledge or add funds, which may cause a liquidation on the chain. Therefore, for investors who play DEFI, they also need to pay attention to DEFI risks at all times.

Cryptocurrency News

1. Cryptocurrency trading platform Bitfinex reaches a settlement agreement with New York

Cryptocurrency trading platform Bitfinex reached a settlement agreement with New York, and the New York Attorney General's Office terminated virtual currency transactions of trading platforms Bitfinex and Tether in New York State.

After Bitfinex submitted a very thick statement, the New York Attorney General's Office found that the trading platform Bitfinex and the trading platform Tether had made false statements. Bitfinex and Tether must submit mandatory reports to New York. At the same time, all trading activities in New York State will be stopped. The New York Attorney General's Office requires Bitfinex and Tether to pay a fine of US$18.5 million to New York State.

Comment: This incident is a good thing for Bitfinex. In recent years, exchanges and project parties in the cryptocurrency circle have strived to use fines in exchange for compliance in subsequent operations. For the project parties, this also means that the legal risks in this regard will be greatly reduced in the future. Moreover, with this "golden medal of immunity from death", the project parties engaged in cryptocurrency-related businesses can also win market recognition. Previously, for example, EOS and others paid fines in a similar way to ensure safety.

2. Coinbase listing details disclosed

Coinbase's stock code for listing is named "COIN", and according to the S-1 form submitted by Coinbase to the SEC, Coinbase CEO Brian Armstrong received a total compensation of nearly $60 million in 2020. The compensation includes $1 million in salary, 56.7 million stock options granted at fair value, and $1.8 million in "all other compensation". The Coinbase listing plan has been supported by four major groups including Goldman Sachs and Citigroup. The current market rumor is that Coinbase's current market value is estimated at more than $20 billion.

Coinbase's listing during the bull market is a very important thing for the cryptocurrency industry. It also makes the cryptocurrency industry officially recognized by Wall Street investment institutions. At the same time, Bitcoin has also become the focus of attention of mainstream American institutions, which will also bring more funds to the currency circle.

3. Bill Gates once again said he does not support Bitcoin and warned of risks

Microsoft co-founder Bill Gates said in an interview on Monday that he is not a fan of Bitcoin, partly for environmental reasons, as Bitcoin consumes a lot of energy, and partly because it poses a risk to retail investors who are not as rich as Elon Musk. "Musk is rich and very smart, so I'm not worried that his Bitcoin will experience some random rise or fall," he said, "but I do think people are buying Bitcoin in this craze, and these people may not have so much spare money, so I am not optimistic about Bitcoin. My overall idea is that if you don't have as much money as Elon, you should still be careful."

4. South Korea’s new regulations will impose a 20% tax rate on income from cryptocurrency investments next year

According to Yonhap News Agency, according to a statement released by the Ministry of Strategy and Finance on the 22nd, the government will classify income generated from investing in crypto assets as other income starting next year and tax it at a rate of 20%, with a basic deduction of 2.5 million won.

Mining News

1. F2Pool supports, SparkPool opposes, and the opposition to EIP-1559 reaches 63%

Ethereum developers have formally proposed to add EIP-1559 to the Ethereum London upgrade, which is tentatively scheduled to be implemented in July or August this year. Due to the accelerated execution speed, the market has discussed more about Ethereum EIP-1559 this week. EIP-1559 attempts to reduce transaction fees by introducing fixed fees and destruction mechanisms. It was first proposed by Vitalik in 2018 and is expected to make the fee market of the Ethereum blockchain more predictable and relieve congestion. However, miners have different opinions.

On February 26, F2Pool published an article, expressing its official support for the EIP-1559 proposal. The article mentioned that both the community and core developers support the evolving Ethereum, including EIP-1559. It is important to stand on the side of users and core contributors, and F2Pool hopes to stand with users and developers; most community members, including investors, have positive feedback on EIP-1559 and expect it to work on the price. If EIP-1559 is not implemented, it will have an adverse impact on the short-term price of Ethereum. F2Pool said that it always keeps an open mind and is happy to participate in fruitful discussions. It is still willing to hear more opinions on EIP-1559.

At the same time, Nvidia said in a conference call with investors that the company will launch a dedicated chip for mining. Nvidia reported total revenue of $5 billion in the fourth quarter, with mining sales accounting for 2%-6% of total revenue. He also pointed out that the company expects the new mining chip to generate about $50 million in revenue in the first fiscal quarter. The company expects revenue of $5.3 billion in the first quarter.