BlackRock Is Trading Bitcoin Futures

What you need to know today in crypto and beyond

March 32, 2021

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Today's must-reads

Top Shelf

NO JOKE: Chipotle Mexican Grill said it will be giving away $100,000 in free burritos and $100,000 in bitcoin in honor of National Burrito Day on April 1. The fast-casual chain is offering the prizes to players of its "Burritos or Bitcoin" game, which simulates trying to recover a lost crypto key. Corporate entities from Charmin to Teletubbies are capitalizing on the crypto buzz with giveaways, NFT auctions and charitable events – but reader beware, it could all be an April Fool's joke.

STARTING TO DABBLE: Investments giant BlackRock is trading bitcoin futures, according to regulatory filings published Wednesday. A source familiar with the matter told CoinDesk the asset manager held $6.5 million in CME bitcoin futures contracts earlier this year. Those contracts had appreciated $360,457 on reporting day. These amounts may be small for the multitrillion-dollar asset manager, but show an important step towards adoption.

FLYING FIL: Grayscale purchased 29,550 new FIL tokens for its recently launched Filecoin Trust, sending the cryptocurrency skywards. FIL is now the ninth-largest crypto, with a capitalization of $13.72 billion. Grayscale, owned by CoinDesk parent Digital Currency Group, can have outsized effects on markets, in what's called the "Grayscale Effect." The institutional player also launched trusts dedicated to basic attention token, chainlink, decentraland and livepeer alongside its filecoin product.

YOUR MOVE: Top central banker Agustín Carstens pushed back on claims China could capture a "first mover advantage" by issuing a central bank digital currency (CBDC) before the U.S. can launch a digital dollar. "Much of this rhetoric is overblown," Carstens, general manager of the Bank for International Settlements (BIS), said at an economic conference. A digital dollar is still being contemplated by the Federal Reserve, but could be a key geopolitical tool in maintaining the dollar's status as the currency for international trade.

– Daniel Kuhn

Overheard on CoinDesk TV

Sound Bite

"We decided we could maximize the opportunity to capitalize on [the NFT] buzz … and help out my community."

– Rams safety Taylor Rapp, who is issuing an NFT with proceeds going to anti-racist organizations benefiting Asian American Pacific Islander (AAPI) communities, said on CoinDesk TV's "First Mover."

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A message from CoinDesk

CoinDesk's Christine Kim and Consensys' Ben Edgington present a weekly podcast series on the live development of Ethereum 2.0 and its potential impact on the crypto markets.

In each episode, the team discusses major news events related to Eth 2.0 from addressing skepticism to the consequences of node slashing.

Listen to "Mapping Out Eth 2.0" every Thursday on the CoinDesk Podcast Network.

What others are writing...

Off-Chain Signals

SuperRare's founder is a Mainer! When NFT news goes local.

Justin "Guy Who Lost Out on $69 Million Beeple" Sun bought an actual Picasso. Does Christie's accept TRON?

The comment window for FinCEN's so-called self-hosted wallet regulations closed on Monday night. What's next? (The Block)

– D.K.

Putting the news in perspective

The Takeaway

Uniswap's Token Issue

Uniswap, the popular Ethereum-based decentralized exchange, is once again thought to be too centralized for some. A token project launched, messed up the protocol's data aggregator and forced a reaction from Uniwap that is now raising questions about what level of control creators can exercise in crypto.

In short: Delta Financial is a new token project looking to solve liquidity problems in decentralized options trading. The DELTA token launched on Uniswap on March 28. A day later, Uniswap's total volume had exploded 450% to $7.17 billion (up from $1.6 billion the day before, and more than triple the previous record high of $2.19 billion set Oct. 26, 2020). This information is all based on reporting from Decrypt, due to what happened next.

Determining that this growth was organic, though perhaps inauthentic, Uniswap's developers issued a hotfix to remove Delta's data from its blockchain explorer, Uniswap.info, under a "fix for scammy tokens." Though the token itself remains available to trade on the decentralized exchange, querying for its trading activity returns "🤔." Etherscan is also blank.

The situation speaks to the difficulty of determining what the "public good" is in decentralized ecosystems. There's tension among creators of tokens, who are free to list their projects, creators of decentralized platforms, who have multi-billion dollar protocols to maintain, and everyone else, who may be hurt by the decisions made by either of those other parties.

Delta Finance created a novel token system that could potentially solve a real issue. Users vest their tokens for two weeks after every transfer, providing a guaranteed lock-up period and therefore a knowable metric for creating cheap, short-term options contracts. It's novel, if nerdy. The system also employs a "rebasing" mechanism to stabilize the token's price, essentially by trading these locked-up coins against themselves. (Decrypt offers a plausible explanation for why this system isn't wash trading.)

All of this activity appeared on Uniswap's records, potentially creating a false impression of the exchange's activity. "Delta found a cool growth hack, but it does not seem like the type of information users are looking for when they want [decentralized exchange] volume stats," an uninvolved but knowledgeable observer who runs another blockchain data service and asked not to be named told CoinDesk.

As Uniswap's founder. Hayden Adams. said on Twitter: "This should be fairly obvious but saying Uniswap protocol did $7.3b in trading volume on //info.uniswap.org when $6.3b of that is a weird rebasing mechanism on one token makes the entire site less useful."

But in removing this information, Adams may have crossed a bridge. Uniswap has been characterized as a VC-captured exchange in the past. This summer's batter with rival, community-owned SushiSwap brought this to the fore. Now, Adams is exercising discretion over to what information users are privy. While the actual exchange is decentralized, there are parts that are human controlled.

Adams didn't return a request for comment, though 0xRevert, a developer for Delta's parent company, CORE Vault, did. I asked if the project was just a social experiment and, if so, what message were they trying to send.

"Exposing the hypocrisy of Uniswap to more people. While pretending to be a community-governed decentralized exchange, they seem to only care about their VCs interests," 0xRevert said. "I'm working on an innovative new protocol and I'm very surprised that Uniswap would move to stifle innovation. I had great respect for them before this move, which is why DELTA is even on Uniswap."

He echoed complaints others have made, that Uniswap has failed to remove information related to suspected scams. Further, that many DeFi neophytes may confuse Uniswap.info as the exchange's front end.

For its part, Uniswap has become a key component of an industry where decentralization is a bit of a hobbyhorse, though it's not just a token issue.

– D.K.

A message from CoinDesk

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