ICE arrested a 30-year-old Honduran illegal immigrant charged with sex crimes against a Virginia minor last week after local authorities released him twice.

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Columbia University professor Shai Davidai, who hosted a counter-protest in defense of Jewish students, criticized &quot;Squad&quot; members for defending anti-Israel protesters.

Columbia professor condemns AOC for calling anti-Israel protests 'nonviolent': She's an 'agent of chaos' | Fox News

Huw Edwards, who has been off-air amid allegations he paid a teenager for sexually explicit photos, resigned from the BBC this week because of &quot;medical advice.&quot;

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Mass graves were discovered at two hospitals in Gaza previously raided by Israel. The United Nations human rights chief Volker Türk called for an independent investigation.

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Indiana Fever No. 1 pick Caitlin Clark made history on Tuesday night when she was named the winner of the James E. Sullivan Award. Clark wrapped up her career at Iowa.

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A third person of interest has been taken into custody in the deadly Florida carjacking case of Katherine Aguasvivas, and two of the three are expected to be charged for her death.

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Richard Ehrhart, 69, had gotten separated from his wife when he fell hundreds of feet off a trail near Natural Bridge in Oregon and died on Sunday.

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Australia reportedly has arrested seven teens who allegedly believe in a religiously motivated extremist ideology and have ties to a church stabbing suspect.

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Prospective students are increasingly opting for colleges in the Carolinas and Florida over elite northeastern schools due to antisemitism and COVID policies.

Students are rejecting elite colleges like Columbia and Yale to attend southern schools like Clemson: report | Fox News

sFOX

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Institutional investors and high-net-worth individuals (HNI) typically use trading when they want to buy or sell a large amount of cryptocurrency. That’s because while 99% of people who want to buy or sell cryptocurrency can do it directly on an exchange, placing an extremely large order on an exchange can be a costly enterprise. Say that you’re an institutional investor trying to buy $1 million worth of Bitcoin, or that you’re a cryptocurrency start-up that’s trying to sell $1 million worth of Bitcoin raised through ICO. If you try to place such a large buy or sell order on a cryptocurrency exchange, the order can move the entire market up or down — and lose you a fortune. over-the-counter (OTC) Large market orders typically go deep into the order book, leading to poor price execution. In the example above, a 100 BTC sell will eat up the buy side of the order book, from $13,036 all the way down to $12,936 and farther below. After the large order is fully executed, the price will be considerably lower than $13,000 per BTC. The party that wants to sell a large quantity of Bitcoin will need to lower its price. Avoiding scenarios like these is the main reason why investors will trade OTC.  Instead of placing a trade on a regular exchange, OTC trading is done directly between two parties. An OTC broker either supplies the trade with liquidity, or finds someone willing to take the other end of the trade. Because this happens outside of the regular market, the volume is hidden and isn’t registered by an exchange.  There are two main types of OTC venues: , a firm that acts as an intermediary to match a buyer and seller. An inter-dealer broker will normally advertise a fixed fee to both counterparties for their match-making services. An inter-dealer broker , a firm that will act as the direct counterparty and take on the trading risk. Principal OTC trading firms will . For example, if you ask to buy 100 BTC, they will look at the available liquidity in the market to calculate how quickly they could hedge themselves and add an additional spread to safely cover their risk. A principal OTC trading company charge the same as an inter-dealer broker or more, based on market demand and how well they can manage their risk While this sounds good in principle, crypto OTC trading is really opaque. On an exchange, you can see all the buy-and-sell orders in the order book. When you’re trading OTC, you don’t necessarily know what the market looks like or how big a spread an OTC broker is charging. Trading OTC provides anonymity and price stability, but it isn’t necessarily cheap. If you go into OTC trading blindly, you can end up getting played even worse than you would if you sold on an exchange. If you don’t know how the game is played, OTC brokers can and will profit off you. In this article, we’ll shed some light on the games traders play and equip you with strategies to minimize trading costs and market manipulation. Avoid these Mistakes when Trading OTC By placing a large order on an exchange, you’re showing your cards to the market, and the market will usually . The same goes for OTC trading. While OTC trades are hidden from the market, you can unwittingly expose your hand to brokers and they can use that information to their advantage. Trading is a zero-sum game. The worse the rate an OTC broker can give you, the more money they make. There are a number of strategies an OTC broker can employ to skew your view of the market and profit from you. Say that you want to sell 1,000 bitcoin and that the current exchange price for bitcoin is $10,000. react and take advantage of you You call several brokers on the phone for pricing and give them the details of your trade: Broker 1: $9750 per BTC Broker 2: $9700 per BTC Broker 3: $9650 per BTC By the time you call the first dealer back on the phone, the market has moved down and he’s decreased the price he’s willing to pay to $9720 per BTC. For the trade, you’re paying a hefty ! Armed with the amount, time, and size of your trade in advance, the OTC brokers you spoke to may have done any number of things to profit from your trade. Knowing that the trade would move the market, they could front-run and adjust their own Bitcoin holdings. They could have manipulated the order book to skew your view of the market and agree to a poor rate. They could have shared the details of your trade with counterparties in their network. They could even do all of the above at the same time. Let’s do a deep dive into the most common mistakes people make when trading OTC. We’ll explain how OTC traders profit from these mistakes, and what you can do instead. $280,000 above the exchange price Mistake #1: You Shopped Around When trying to execute an OTC trade, people commonly believe that the best way to find a good deal is to shop around by calling multiple brokers on the phone and ask around for rates. That way they can go with the cheapest option. The problem is that the more people you tell about your trade, the more likely it is that they’ll use that information against you. For example, say that one of the brokers you called was an inter-dealer broker. After you call them for the quote, they’ll talk to people they know to find a counterparty for the trade. Now the network knows there’s a highly motivated seller. The counterparties can remove their buy orders from the market, making the price of Bitcoin appear lower, so they can secure a more favorable rate. The key is to avoid shopping around for rates. While you might think shopping around helps you find the best deal, you end up showing your hand and brokers can turn that information against you. Don’t shop around for rates. Call no more than one or two OTC brokers, and only when you’re ready to execute the trade. What to do instead: Mistake #2: You Showed Your Hand Even if you only call a single broker on the phone with the details of your trade, that gives them enough information to front-run the market and manipulate the price. Say that you call an individual broker and say that you want to sell 1,000 BTC in one day. You’ve just shown your hand to the market, and that information can be used against you. The moment you hang up the phone, the broker rushes to sell some of their own Bitcoin.  If you do go with that broker, they can simply buy their Bitcoin back from you at a lower rate. Even if you go with a different broker, since your 1,000 BTC trade will move the market down, the broker you called can simply buy Bitcoin back from the market at a cheaper price. Either way, the broker gets the upper hand because you’ve spilled the beans around your trade. When you call an OTC broker on the phone, ask them to provide both buy and sell rates for 1,000 BTC, 500 BTC, and 100 BTC. That way, you’re getting the broker to show their hand instead of exposing your own. You can look at the spread between the buy-and-sell rates to estimate the broker’s profit margins. What to do instead: Mistake #3: You were Predictable Another common mistake people make with OTC is behaving predictably. Brokers can exploit patterns of behavior to their advantage. Let’s say that every time you want to make an OTC trade, you call the same couple of brokers on the phone and ask for a rate. You do this each week over the course of a month. OTC brokers aren’t stupid. They’re taking notes on how you behave and they’ll know that when you call, you’re talking to other brokers and looking for the most competitive rate.  To lock in your business, an OTC broker might give you a really attractive window price for your trade the first time that you call. After you’ve spoken to other brokers, you’ll go back because the first broker gave you the most competitive rate. That’s when they stick you with the real rate, which needless to say, is substantially higher. Since this broker gave the best rate initially, you’re more likely to execute your trade with him even if the final rate is higher. Don’t be predictable with your OTC trades. If an OTC broker gives you a rate that sounds too good to be true, it probably is. Call their bluff and ask them to lock in that rate for you. What to do instead: Mistake #4: You Bought or Sold the Full Amount If you’re trying to buy or sell 1,000 BTC OTC, don’t make the mistake of trying to stuff the full amount into a single trade. The rate that you get for selling 10 BTC will be much better than the rate you get for selling 10,000 BTC. With a large trade, there’s always the risk that the market will move and that the price will slip. OTC brokers price this risk into the rate that they give you. For a sell order of 10,000 BTC at a price of $10,000 per BTC, a 10% upward movement in the price can cost millions. To adjust for this risk, a broker will go very deep into the order book to supply you with an unfavorable rate. Don’t buy or sell the full amount of crypto in a single OTC trade. Split your order into several smaller trades of 10 BTC each. What to do instead: Mistake#5: OTC Trading in a Slow Market Just because an OTC broker provides you with a price guarantee, that doesn’t mean that your trade is completely protected from market movements. Another common mistake when OTC trading is trying to place trades in a slow market. The chart above shows a sharp dip in 24-hour volume for Bitcoin on Christmas Day, 2016 Let’s say that you want to make an OTC trade on Christmas Day. Because it’s a holiday, there will be a lot less activity on the market and lower volume than almost any other day of the year. To execute your trade, an OTC broker will have to go much deeper into the order book than in a normal market, leading to a poorer rate. Make sure that there’s a decent level of activity in the market before placing an OTC trade. What to do instead: Mistake #6: OTC Trading in a Volatile Market Similarly, another common mistake people make is OTC trading in a volatile market with high fluctuations in price.  In theory, the market is stronger during periods of high volatility because there’s a higher level of activity. But remember that OTC brokers charge a risk premium when they price a trade. If the market is volatile, it’s harder to know the price a trade will execute as, and OTC traders will charge a higher risk premium accordingly. Avoid OTC trading when the market is highly volatile. Wait for prices to stabilize before trying to execute your trade. What to do instead: Play Your Cards Close to the Chest While OTC helps you shield your investment interest from the market, you can’t completely hide that interest, because you’re dealing with a middleman who’s active in the market. When you trade OTC, you need to account for the explicit fees that you pay the broker along with the implicit fees you’ll eat by sharing information with an active market participant. Minimize the information you share to minimize your exposure to manipulation. Above all, remember the three cardinal rules of trading OTC: In general, don’t be predictable. Don’t share the exact time you want to trade, or the full quantity. Shop only when you’re ready to trade and we recommend talking to no more than 1–2 brokers. Finally, there are a number of tools available on the market that are making it easier for traders to buy and sell crypto OTC on their own. In an upcoming post, we’ll teach you how. Stay tuned! The above references an opinion and is for informational purposes only. It is not intended as and does not constitute investment advice, and is not an offer to buy or sell or a solicitation of an offer to buy or sell any cryptocurrency, security, product, service or investment. Seek a duly licensed professional for investment advice. The information provided here or in any communication containing a link to this site is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation or which would subject SFOX, Inc. or its affiliates to any registration requirement within such jurisdiction or country. Neither the information, nor any opinion contained in this site constitutes a solicitation or offer by SFOX, Inc. or its affiliates to buy or sell any cryptocurrencies, securities, futures, options or other financial instruments or provide any investment advice or service.

The 6 Costliest Mistakes People Make When Trading Bitcoin OTC

Dark pool trades are an excellent indication of what’s really going on in the market. Markets have always been more than what is shown to the public eye. There are many factors that happen behind the scene but potentially may have an impact on markets' sentiment and trends. The crypto market is not an exception here. It's not that I'm inviting you here to start looking at things through the conspiracy theory lenses. My point is just that There is always something that remains on the periphery of our perceptions as we don't know much about it. markets' pictures are always bigger than we see them. Dark pool trading is a great example here. Not so many market players have access to them. However, they deal with big money and can't but impact the whole market ecosystem. Dark pools have been existing for a while in traditional markets. Now they are coming onto the crypto scene.  So let's look at what dark pools essentially are, how strong their presence is on the crypto market, and whether they can come in handy for a deeper understanding of the market's vibe. What Is a Dark Pool, And Why Is It Dark? A dark pool is an alternative trading system (ATS) or a marketplace for anonymous trades. Unlike a regular exchange where all your bids and asks are open to the public eye right after they are placed, in a dark pool, they would become visible sometime later after they have been filled. off-exchange Let’s say you’ve made a trade in a dark pool - other pool participants will learn about it a few hours later or even on the next day. In other words, your trade will leave a post-factum “ ” on the dark pool’s dashboard. print That’s how prints look like in general: Summing up, the “darkness” of dark pools means the following: information on trades comes in a delayed manner in the form of buy/sell prints; a print doesn’t contain much information about a trade. Essentially, it only indicates the quantity, price, and currency of a trade; prints are deemed to be available only for dark pool participants. However, there are some methods to spot them indirectly (i.e., through dark pool scanners, financial reports, news, and the like). What’s The Purpose of a Dark Pool? Dark pools are tailored for large-scale traders, i.e., primarily institutions and whales. The purpose here is to enable them to trade in big sizes off the public market and therefore avoid causing extreme volatility in assets' market prices. Imagine someone is placing an X-million dollar order on an exchange. Will it cause anxiety or panic in other participants? Chances are, it will! Because there is a general belief that big players always know more than the rest. This is why they sell or buy at a particular moment. So to avoid bringing chaos to markets, a whale would be better off going to a dark pool. Besides this, they would also be able to: Stay relatively confidential with their trades Transact with lower (unless they use ) slippage market orders Get a better price for assets, and Save on transactional costs. Seriously, Dark Pools Don't Affect Asset Prices At All?! Theoretically, they shouldn’t. But if we approach the market as a living and wholistic organism, it’s impossible that big trades would remain neutral to the market! trading doesn’t mean trading in a vacuum, agree? Over-the-counter However, in the case of dark pools, the effect of big moves is delayed. It would be more correct to say that dark pool trading does impact the market but in a smooth and caring manner. What Are Crypto Dark Pools? In the crypto market, we have dark pools as well. Unlike conventional pools, cryptos are not currently subject to any sort of scrutiny from security agencies or other regulatory bodies. Therefore they are not on any official register that could indicate how many exist so far. Basically, crypto dark pools work similarly to the stock market pools: they match buyers and sellers for large orders without a public order book. As you might have guessed here, the main difference is the specific asset type (i.e., crypto) and the technology behind - blockchain. Types of Dark Pools in Crypto Roughly, there are two types of crypto dark pools: centralized and decentralized. Centralized Dark Pools Current centralized dark pools exist as “special features” of crypto exchanges or other types of trading apps. To explore a dark pool, one must pass verification and create a separate PRO or Business-type account. While trading, an app can offer you to choose the destination of your order - a public order book or a dark pool. It can look like this: Examples of centralized crypto dark pools: , and sFOX . Kraken Dark Pool Decentralized Crypto Dark Pools In fact, a decentralized crypto dark pool is a DEX (decentralized exchange) but with the difference that it is tailored for large-scale players and enables anonymous trading. Conceptually, a decentralized dark pool can have the following features: . When a trader places a buy/sell bid, it automatically breaks down into several smaller chunks that are distributed among a network of independent nodes (i.e., dark nodes). Such chunking allows to hide the original order and the trader's identity. It also helps avoid price plummeting, which would be inevitable if a large order was placed once in full size. Order chunking . The nodes verify that the chunks belong to the same order and validate transactions with it. Validation by nodes . Examples of such mechanics are multi-party computation (MPC) and zero-knowledge proofs. Their primary purpose is to enable transactions without revealing parties' details such as wallet address and exchange. Use of cryptographic mechanics in order matching Use of for cross-chain trading. atomic swaps Implementation of to stimulate users' retention and loyalty. For example, a dark pool's tokens can grant users some commission discounts or let them harness the exclusive pool's features. token incentivizes Here is how a decentralized crypto dark pool works schematically: Example: (formerly Republic Protocol) Ren Pros of Crypto Dark Pools While currently, there are not many crypto dark pools out there, we can talk about their merits mainly from a theoretical standpoint. So the outcomes that these pools are designed to bring are as follows: Execution of large trades without adverse effect on digital assets' market prices. Protection against front-running activities of malicious traders. I explained this in more detail in the article on - check out the “sandwich attack” section. HFT crypto trading Reduced slippage: as decentralized dark pools allow to break down large orders into smaller chunks and fill them partially, traders may trade with lower slippage. Better execution price. Privacy: currently, crypto dark pools are not subject to any regulatory requirements and imply almost zero information disclosure about parties and trades. Decentralized crypto dark pools entirely comply with the DeFi standard, which means they enable p2p trustless anonymous transactions backed up by the blockchain record. Cons of Crypto Dark Pools Exposure to the same risks as on CEXs/DEXs. To avoid repetition, I would refer here to my long read " ," which dissects all those risks in every detail. Welcome to check it out. Major Weak Points Of Crypto Exchanges That Create Unprecedented Risks For Traders Due to the lack of regulatory requirements on trades' reporting applicable to crypto dark pools and their technological designs enabling complete anonymity, most market participants would not be able to understand the market's sentiments and trends comprehensively. Only big guys would. What can this potentially lead to? Right! To a variety of ways of market manipulation. What Are the Perspectives of Dark Pools in Crypto? Meanwhile, there are no official statistics or substantial analytics that would allow making any info-backed conclusion. However, we can still try to make some predictions based on what we have so far. Here is my train of thoughts on it. As we know, . The more "big guys" would come onto the crypto scene, the bigger would be the demand for " " type of trading venues wired for large-scale transactions with crypto. the institutional adoption of crypto is gaining momentum over-the-counter As most institutions are subject to various regulatory requirements, including those on trades' reporting and financial information disclosure, sooner or later, crypto dark pools, to some extent, would get more transparent. If so, they will get traced with "scanners" and other professional analytical tools, helping, in the end, get a more comprehensive and deep understanding of the market's sentiment and where it is headed. So the time will show. Let's keep watching! Final Thoughts Crypto dark pools don't have much exposure right now. However, as the crypto market matures and starts resembling the traditional one in many aspects, the chances are that in the not too distant future, dark pools may evolve and become an integral element of the DeFi ecosystem. After all, there are already enough reasons to anticipate that. By for . Julie Plavnik Yellow Network Learn Web3 with Yellow Network. We Can’t Wait to See You Driving This Movement! Check out OpenDAX v4 cryptocurrency exchange software stack on GitHub Follow Yellow Twitter Join the public Yellow Network Telegram Stay tuned as Network unveils the developer tools behind , brokerage nodes stack, and community liquidity mining software! Yellow Yellow Network

Crypto Dark Pools: Big Deals Behind the Closed Doors

While you’re trying to understand the technology behind any particular cryptocurrency, the project might be doomed on the organizational level. The governance process is more of a human issue and if it’s not formally defined, even though the network is decentralized from an architectural standpoint, it can remain centralized in its decision-making processes. In this article, we’re going to explore governance models that are retaining the decentralized characteristics and examine who are acting in ways that are best for the community, like or . TeleCoin Tezos There are enough bad examples out there, the worst of which could be EOS, which has periodically elected to maintain the blockchain and receive rewards for doing so. EOS seems to be designed for block producers to support other block producers. It’s clear that the EOS protocol may have an incomplete approach to governance and the accusations against them are well-deserved until they will be willing to change their ways. only 21 trusted entities Leaving any selfish reasons behind, a blockchain’s governance should be as decentralized as possible in order to maximize the network’s resilience to all sorts of attacks. Sometimes, even at the expense of efficiency and innovation. With over worth of digital assets having been stolen to date, you can’t accuse anyone of willing to be security-first! $2 billion How important is the governance model The cryptocurrency world is still in development. Even if it’s different and we’re supporting the proposal of being defined as a completely , it has similarities with the equity markets where there are clearly defined stakeholder structures for investor recourse. Structures with the same goals as governance systems: protect investor interests and prevent rogue executives from running amok with the company. new asset class “At an individual level, real monetary value is at stake, which in turn gives rise to investor and payment protection concerns,” Philipp Hacker, a researcher on corporate governance systems. says Cryptocurrency investors have the same rights as company shareholders, because they are directly affected by protocol changes in a blockchain. https://www.justcryptonews.com/242/game-coins-btc-vs-bch-comparison-charts If the changes are determined only by a select group of stakeholders, a large majority could become the victim of their own interests. In the case of Bitcoin, when Bitcoin’s core team showed resistance in the face of changing the block size, investors were bystanders in the that culminated in a fork of the blockchain, thus Bitcoin Cash was created. drama 1. Bitcoin Bitcoin is based on , most of them being inherited from Satoshi Nakamoto’s original vision. Over time, in order to address its vulnerabilities new rules had been added, while others were amended. Who made these decisions? According to its decentralized governance model, any individual can “vote” on “Improvement Proposals” suggested by developers or other users. However, in order to use the signal mechanism that is casting your vote throughout the network, you need to run a full node. a set of rules In theory according to Satoshi, in order to preserve Bitcoin’s decentralization, everyone should run his/her full node. In practice, only those who are actively mining Bitcoin are doing so. Ordinary people who own Bitcoin are relying on other third-party services, so the power remains in the hands of the miners and, more likely, to the ones in charge of the mining pools. http://www.etoday.ru/2013/04/illyustrator-sebastien-thibaul.php That’s Bitcoin, with both its good and bad parts. Now, what are some other promising governance models among cryptocurrencies? Which one of these is promoting decentralization the most? 2. Ethereum Ethereum, such as Bitcoin, is built around the notion of no centralized forms of control. However, it has a more advanced governance model than Bitcoin. That’s arguable, of course, but here’s why we believe that’s true. Ethereum governance is based on a decentralized model but it doesn’t conduct the process on the blockchain. There are in charge of the implementation of necessary improvements after the decision process. designated developers In the case of the DAO hack, when $55 million worth of ether had been stolen, the proposed solutions could have been voted on by making a transaction with a minimal amount of ether; around 0.06–0.08, less than $1 at that time. The battle was between freezing the hacker’s stash and leaving those funds lost in order to preserve the blockchain’s immutability or hard fork the chain and refund investors. The investors won the vote and the “code is law” rule was broken that day. https://blog.sfox.com/from-crowdfunded-blockchain-to-ico-machine-an-ethereum-price-history-ddb31c3134c4 Bad mouths might say that “the money guys won,” especially because the vote recorded low participation. But the investor’s rights were protected that day. A security vulnerability is beyond their control and they shouldn’t be the ones paying for it while there are ways to make it right for them. 3. TeleCoin TeleCoin is a community project building a privacy-focused cryptocurrency with Masternode capability. The advancements and updates of its code are decided through a consensus established by a . decentralized blockchain voting system Speaking of decentralized governance models, what can be more decentralized than a voting system based on the blockchain where the community can enforce changes and improvements through direct participation. The code is managed by a team of core developers, of course, but in reality, they are indirectly owned by the network. They are continuously maintaining a bound of trust by acting in the community’s duty. To become an active participant you only need to secure a Masternode with a collateral of 10,000 TELE. This is a rational approach for a privacy-focused coin. Bitcoin tried a similar approach but has fallen between scaling and debate. Masternode participation ensures enough stake for the owner to act in the network’s favor as well as a technical solution to guarantee fair participation without all the unnecessary requirements. 4. Tezos Tezos has a formalized governance model. If Ethereum’s team chose to wing it in the DAO case, Tezos doesn’t agree with their ad-hoc, unplanned model. According to its founders, Arthur and Kathleen Breitman, “Tezos is a blockchain that can evolve by upgrading itself. Stakeholders vote on amendments to the protocol, including amendments to the voting procedure itself, to reach a social consensus on proposals.” The can evolve with its needs rather than get fragmented time and time again with hard forks. With this type of governance, rules for instituting changes are encoded into the blockchain protocol. If developers wish to propose code changes, each node has to vote on whether to accept or reject the proposed change. self-evolving governance model The , where blockchain technology becomes the referee, proved itself to be the best form of governance once again. on-chain voting system 5. Monero Monero’s governance process is not on an on-chain system. Being a privacy-focused cryptocurrency where public keys identifying a voter are not easily divulged, such a system may be difficult. Instead, Monero is aiming towards “ ” with an open-source platform run by the community. sovereign-grade censorship resistance It’s a loose structure with absolutely no hierarchy, where everyone is encouraged to join. Anyways, there is the Monero Core Team, consisting of seven individuals who remain anonymous, who have clear responsibilities within the network, including being trusted arbiters of the “Forum Funding System” on behalf of the community. In other words, they are managing the codebase with its internal rules (fees, upgrades, changes, etc.), distributing the Monero funds, and setting a general direction for the project. They might have been inspired by Bitcoin, who is doing so well as the creation of an anonymous individual/group. While you can’t put 100% trust in the Monero guys, at least, they don’t represent a centralized failure point. Cryptocurrency governance is under-appreciated. Decentralization is what defines the cryptocurrency movement. Not paying attention to the structure behind the protocol’s decisions can lead to a bad investment. DAO investors were lucky enough to get their money back. You can’t know if that can happen again. Protecting investor rights and organizing a fair decision process while moving with the fast pace imposed by the evolution of technology are key points that have the same importance as the correct functionality of the cryptocurrency protocol itself.

5 Pro-Community Governance Models of Cryptocurrencies

🌟 Checkout our Cast for the Movie What Crypto Rich Asians are reading. is the newly released movie that every. Asian. person. is talking about. For those of you who may not be aware of it’s importance to the Asian (American) community, it’s the first Asian all-cast mainstream movie in the US since the Joy Luck Club. But, alas, the $$ theme was there, but the Crypto theme was missing. Why couldn’t these guys make the movie Crazy Rich Asians even more relatable? This is my version of Crypto Rich Asians TWEET If we had a Crypto Rich Asians movie and the cast reflected real world Crypto Rich Asians, the story and plot would have been so juicy. Here are the people I’d like to see on screen. These guys are in no specific order, because once you have over $1bn in net worth, does it really matter how much you have? I am sure many people in Crypto will disagree with me on this one. ¯\_(ツ)_/¯ more money Jihan Wu and Micree Zhang of Bitmain- with Bitmain supposedly looking to IPO in the , Jihan and Micree will make the most out of it. The company didn’t give away too much equity given that they didn’t raise a series A until . range of $40-$50bn 4 years after the company started Zhao Changpeng of Binance- CZ has a co-founder named He Yi who is responsible for marketing and business, but he probably owns majority share of Binance. Whether the market is up or down, Binance will always have business, and CZ will always win. Li Xiaolai of INBlock- with him admittingly earning , we think he is probably doing ok**.** On EOS: This one project alone will probably make me the world’s best angel investor in 2017, because it’s growing so fast” 200x from his EOS investment “ . We spent $1.5 million for 5% of the stock at a valuation of $30mn USD. Now it is worth $6bn USD, a 200x Da Fei Hong — Neo founder, been there since the early days of Crypto in China Justin Sun — with Tron’s token market cap at $1.5bn and Justin Sun’s business savviness, we don’t think Tron will go away anytime soon Litecoin- Charlie Lee. Now that he’s sold all his litecoin, he realizes that it wasn’t the right decision Bo Shen — with Vitalik being an advisor to the fund Fenbushi Partner, And many more…. I am probably missing too many. There’ll have to be sequels. who do YOU think should be on the list? Subscribe now 🌟 Top News in Asia from Wednesday through Friday Binance LCX, a joint venture between Binance and Liechtenstein Cryptoassets Exchange is the . launching of a fiat-to-crypto exchange http://bit.ly/2vSS7mH As of August 7, 2018, there are 274 legal cases related to cryptocurrency in China. Most recently, Chinese courts made its decision without directly discussing whether Bitcoin trading platform is illegal. http://bit.ly/2vPU3N4 How the singer in Africa and subsequently now Akoin. $1 billion line of credit from Chinese investors China Jiangsu International helped launch Akon http://bit.ly/2OKH6uC A series of new tweets are fueling speculation that Binance is about to make a big move with XRP. http://bit.ly/2OKlEpO 💰 Deals and Venture round led by Tribe Capital and Social Capital. SFOX, a cryptocurrency dealer for high-volume traders and institutional investors, has raised $22.7 million in a Series A funding http://bit.ly/2MxagQE Exchange Huobi has made a significant investment in the US-compliant security token trading platform OpenFinance Network. http://bit.ly/2ONqiUa Krungsri Finnovate, a venture capital fund of Krungsri (Thailand Bank of Ayudhya) marking its fourth deal since inception. committed to invest in Japan’s SBI AI & Blockchain Fund, http://bit.ly/2vVqkSE Dymon Asia Ventures has hit the final close for -focused fund. its maiden $50-million fintech http://bit.ly/2OHnpnF Sino-US investment firms are targeting over $4 billion for new funds launched this year. GGV registered a $1.8bn fund with SEC. https://tcrn.ch/2vUfoVt Japanese social messaging app . LINE announced the creation of a $10 million blockchain venture fund http://bit.ly/2vZN8kv 💰 Coin and Token News Official launch of ICX Station, . a global accelerator program sponsored by the ICON Foundation http://bit.ly/2MEJtSJ Tron acquires blockchain.org domain name. with its blockchain-based payments tech, exec says. Ripple ‘definitely’ wants to target China https://cnb.cx/2L1OQXd 💸 Exchange News Chinese exchange Huobi and its partners are l aunching cryptocurrency exchanges in five regions: the Philippines, Russia, Taiwan, Indonesia, and Canada. http://bit.ly/2vRWfUd including Huobi Automated Listing Platform, Huobi Show Center for Blockchain Projects and HADAX Public Voting Platform. Huobi launches brand new HADAX 2.0 http://bit.ly/2KZ39f3 🎌 Regulation News *China Media* to upgrade the area with innovation and manufacturing upgrade, including blockchain initiatives. Shanghai Municipal Government signed a strategic cooperation agreement with Alibaba and Ant Financial Google translated as part of the formalization of the country’s domestic market. Thai regulators have so far approved seven business entities to conduct cryptocurrency operations http://bit.ly/2MAZwAL Throughout the past two months, investors in the local crypto market of South Korea have continuously expressed their optimism towards a drastic change in the regulatory landscape of crypto. http://bit.ly/2MAAqSG from the classification of venture firms. Cryptocurrency exchanges in South Korea have condemned their exclusion by the country’s government http://bit.ly/2vUcj7L 💼 Business News to help enterprise customers build, host and use their own blockchain applications for operations management. Chinese retailer JD.com is launching a new blockchain technology platform http://bit.ly/2vRYl6x have entered into a partnership to explore blockchain for payments. State-backed Bank of China and financial services corporation ChinaUnionPay http://bit.ly/2MAfNGb CoinDrop, a service that helps anyone easily receive “airdrops” of cryptocurrency. http://bit.ly/2MxNrMx anywhere with cheap electricity. Chinese miners exiled to Russia, Kyrgyzstan, Mongolia, http://bit.ly/2vUlO74 . American seed accelerator Y Combinator appointed Baidu’s former COO Lu Qi as its CEO http://bit.ly/2MEKNoF Chinese games are rapidly eroding the Korean market. It is happening while China blocked the distribution of new Korean games in China. http://bit.ly/2MAMkM8 🌹🌹🌹What did you guys think of our thus far? What do you want to read or learn more about on Asia? Global Coin podcast Check our past 7 weekly pieces on , , , , , , and Southeast Asia Cryptocurrency Developments A Guide to Asia Crypto funds/investors Takeaways on Asia Crypto from Techcrunch Zug Cryptokitties Binance Bitmain China’s Crypto winners Subscribe

Crypto Rich Asians

Why do traditional asset managers and investors care about crypto assets? When they enter the market, how will they allocate across different crypto assets? How will they trade in and out? What are the potential pitfalls to be avoided? Why Crypto? Alpha or Diversification? To the extent that someone can reliably predict an asset will , they will want to own more of it. In practice, this is exceedingly difficult to do. It’s even harder to do it at scale — often with deep analysis you can make predictions better than chance ( ) but when you go to execute, your trades move the market back into fair value faster than you would like. outperform alpha, rather than beta Alpha, when you do find it, tends to be quickly exhausted. Indeed, the median asset manager doesn’t have much hope for generating significant alpha. The savvy ones opt for the next best thing: maximum diversification. And good diversification is all about correlation — you want to own assets that have low or negative correlation with each other. The best large asset managers, like , are hungry for — or, more specifically, assets that aren’t correlated with the rest of their portfolio. This is not obvious to inexperienced investors, but a negatively correlated asset can improve the performance of a portfolio from a risk/return perspective . Diversification is the only free lunch in financial markets. Bridgewater low beta assets even if that asset underperforms on average You don’t need to bet on Bitcoin appreciating much, if at all, for it to be a valuable part of your portfolio. This is crypto’s, specifically Bitcoin’s, biggest selling point to institutions: . I predict this will be the primary driver of new money flowing into Bitcoin (and perhaps a few other top coins) over the next 12–24 months. Bitcoin returns are not very correlated with other asset classes Even without a view on whether Bitcoin will replace Gold, or the Fed, or whatever: smart money is interested in its uncorrelated returns. Source: “J.P. Morgan Perspectives: Decrypting Cryptocurrencies” Of course, there are plenty of people who believe Bitcoin (and a few others) have a chance at dethroning Gold (and other precious metals) or offshore banking as a safe haven asset. Plenty of people have written about this thesis and it would indeed be a huge deal. The current market capitalization of the entire crypto economy is $250 billion whereas Gold is sitting at and offshore banking represents . In part driven by concern over central bank balance sheets, the more aggressive asset managers (like macro hedge funds) will be making this bet. $3 trillion $20 trillion There is also the opportunity to make idiosyncratic alpha bets on specific coins, chains, tokens, etc. Currently this is the realm of dedicated crypto hedge funds and VCs. Likely this will stay that way for the foreseeable future. Finally, securitized tokens. This is still a big unknown and to the extent that they become a Big Thing, the underlying platforms would likely benefit (e.g. Ethereum). How will they allocate across cryptos? Some major concerns an institutional investor may have when it comes to adding a new asset class to their portfolio: — how likely is this to just be a flash in the pan? Staying power — how can I get it and hold on to it? Custody — how likely are we to get stuck holding the bag when we need to exit? Liquidity — can we legally put this thing in our fund? any chance we get sued or otherwise screwed? Legal From this perspective, Bitcoin is likely the best bet. Especially to the extent that an institution is interested in beta, as most other liquid coins are very highly correlated to Bitcoin (with less liquidity). Source: (note: table also includes SPX = S&P 500, VIX = S&P 500 Volatility Index, GLD = Gold, TNX = 10 year Treasury Note) Sifr Data Staying Power From a perspective, Bitcoin has the longest track record and the most user support. Some institutions will still allocate along the top few coins to hedge their bets and may even place small speculative allocations on promising new projects that seem to be sufficiently different (e.g. using or new types of ). lindy effect DAGs DLT — if the asset loses most of its value, you’re still screwed. Beta is only valuable if you are pretty confident you aren’t taking on substantial negative alpha Custody Custody and liquidity, the details of how to acquire and hold a crypto asset, are still a mess. Contrary to the ethos of crypto, . They won’t be managing their own wallets. While , , and a few others have institutional offerings (or soon will), most investors will be wary to be one of the early participants. most institutions will be required to have third party custodians Coinbase Kingdom Trust It may take years of “battle testing” before these institutional-grade third party custodians are viewed as reliable and safe. Liquidity Even when you’ve figured out a custodial solution, exchange liquidity is still a real problem. While , any large trader will tell you that it’s still quite expensive to get big trades done without substantial slippage. Standing liquidity in order books is quite low, not to mention issues with moving funds and custodying coin on these exchanges. coinmarketcap may show billions a day in BTC volume Needing to move large amounts of money in/out of something like Coinbase (let alone the less reputable exchanges) is still not convenient compared to what traditional asset managers are used to. Legal Status Also, institutions are very concerned about the legal status of the assets they acquire. The biggest concern is that a bunch of these coins, and especially ICO tokens, get classified as unregistered securities sales and the issuers, exchanges, etc. are hit by a wave of lawsuits claiming fraud. Bitcoin and Ethereum have the least associated legal risk. In March of 2018, . The suggests they will view Ethereum as a commodity as well. a judge ruled that Bitcoin is a commodity recent informal SEC guidance How will they trade in and out? ETFs and CEFs Many institutions will want to hold crypto exposure through a publicly-listed vehicle with relatively low fees: an exchange-traded fund or closed-end fund (like ). One of the few available options is Grayscale’s GBTC but fees could ideally be lower (2%). A bigger problem is it trades at a very high , , though it has traded as high as a 100% premium. Grayscale’s Bitcoin Investment Trust premium to NAV about 50% as of July 2018 This indicates the tremendous demand for this sort of product but also makes it unattractive to buy into (at least for now.). An approval of an ETF would be a big help and would probably cause the NAV premium to collapse. In the same vein, the existence of on major exchanges gives a wide set of participants access to hedging and speculation on Bitcoin prices. The nice thing about enabling crypto ownership through an exchange-traded product is it opens up the playing field to a much wider set of participants: everything from a long/short equity hedge fund to an individual investor with an Interactive Brokers account. CFTC-approved futures products However, the until September and most sources I’ve spoken with put the odds of approval at 10–15%. Atlantis Asset Management chief investment strategist Michael Cohn an approval would mean “they’re putting a rubber stamp on [Bitcoin] as an asset, and I don’t think governments want to go there yet.” SEC recently postponed ruling on five bitcoin-related exchange-traded funds said Over-the-Counter For now, most institutional trading is occurring between friends, brokers, and trading desks (like and ). My guess is this is largely because institutions aren’t comfortable transferring millions of dollars to Coinbase or Gemini (let alone their less reputable competitors) — perhaps the credit lines to do so aren’t even in place yet. As the regulatory environment matures, this is likely to change and more volume will occur on exchanges. over-the-counter (OTC) Circle Cumberland As the clearing and credit components get built up, the crypto trading landscape may start to look more like the existing space of Equities or Forex trading. In those worlds, mature infrastructure exists for executing large trades. The name of the game is hiding your hand to reduce . There is a nascent world of players working on this infrastructure in the crypto space, specifically and order routers/execution algorithms. slippage dark pools Dark Pools Presumably, many of the major OTC desks are developing, or even already operating, their own dark pools. The basic premise of a dark pool is to allow large traders to execute hidden orders at prices that are to a liquid exchange’s (the “lit” venue) — at a midpoint, for example. Lit markets are probably liquid enough for this mechanism to be relatively well-behaved, although perhaps it’s still too soon even for that. There are also efforts like which aim to create dark pools. (A deep dive into how it works, and whether it has potential, will have to wait for a separate post. My initial impression is it may face the as compared to their centralized exchange brethren. This may be fatal, even in the long run.) relative Republic Protocol decentralized same hurdles and shortcoming that DEXs are experiencing What about navigating the exchanges themselves? , of exchanges. Being unregulated, these vary from fly-by-night operations to semi-mature institutions (with full KYC/AML and high performance matching engines) that may even offer colocation (I believe just Gemini right now). It’s quite difficult to “arbitrage” between many of these exchanges. Moving capital and coin takes time, and often comes with limitations and high fees. Bitcoin is traded on dozens, if not hundreds Prices are expected to differ, accounting for all kinds of factors ranging from capital controls (Korea) to risk of capital loss due to potential misrepresentation of financial condition (e.g. WEX at the moment). Source: Coinmarketcap Bitcoin Markets Order routers and execution algorithms The traditional solution is . Basically, you break up your orders into smaller pieces and spread them across multiple exchanges while accounting for: differing prices (buy low, sell high), liquidity (more is better), fees (we don’t like ‘em), and latency/likelihood of execution (high latency = bad; more uncertainty over getting filled). smart order routing There are a few players providing, or at least enabling something like, these services in crypto trading today: , , , and . SFOX Coinigy CoinRoutes TradeBlock Some of these like SFOX and CoinRoutes are custodial — they hold your capital and use their own accounts at the various exchanges to provide quick execution. (Although, they that I haven’t fully thought through to comment on). Others, like Coinigy, are just giving you API wrappers with a unified user interface, which means you need to have your own accounts at the various exchanges and move money back and forth as necessary. Finally, is a promising project looking to bring dark pool matching and order routing together in a non-custodial on-chain (with bank integration) mechanism. seem to be doing something with DEX clients OmegaOne Update: After reviewing how CoinRoutes works, I’ve realized it’s actually not custodial. It works more like a Coinigy model + consolidated order book — you’ll need to maintain accounts with the various exchanges, as well as capital there as necessary. In addition to routing your orders more intelligently, traditional players (especially in equities trading) will leverage to reduce slippage and hide their intention to make large trades. Execution algos apply more complicated logic than just placing a limit or market order. Simple examples include VWAP (volume-weighted average price) and TWAP (time-weighted average price) which execute orders to keep pace with market activity or evenly over time (respectively). buy-side execution algorithms There’s a whole world around adding pricing and trading logic to improve execution — and it really does add value, especially when making larger trades. Currently, SFOX is the main player that I can see providing algos, though I expect this to change over time. Exchange liquidity is still very low compared to what you can get OTC, and will likely remain that way until clearing and credit systems are in place. Currently, the market may simply still be immature for an ecosystem of order routers and execution algos. What are the Potential Pitfalls? There are a few potential pitfalls when it comes to executing institutional-scale crypto trades. Exchanges are risky, unregulated, and vertically integrated monoliths In the traditional financial world, trading venues handle matching and typically provide central clearing and settlement. Exchanges then face off with clearing firms or prime brokers, who then interact with brokers and traders. Contrast this with Coinbase who serves as both exchange, custodian, and broker. The crypto exchanges would benefit from taking some time to understand how the traditional trading world is designed rather than potentially assuming that a one-stop shop is the best structure for the market. These intermediaries aren’t just rent-seekers — they provide value. For example, imagine a world where clearing firms stood between traders and exchanges. Rather than the exchanges controlling all of the coin in their exchange wallet, they would rely on clearing firms to settle coin and cash balances within some period of time (e.g. within 24 hours). This allows clearing firms to extend credit to their traders across exchanges — arbitrageurs could buy BTC on Coinbase Pro and immediately sell it on Gemini and not worry about moving coin or cash. OTC trading costs are high That world is still a ways out, if it ever comes. For now, big trades will continue to occur over-the-counter. OTC is generally expensive — all-in cost of 2–5% is not unusual. In return, you can be more confident that you will get the coins (or cash, if you’re selling) quickly and securely. Coin provenance is often unknown Finally, one thing to consider is the provenance of your coins. Specifically, there is anti-money launder (AML) concern over taking possession of coins “tainted” by known criminal activity. This is a wide ranging topic that may be the elephant in the room for many crypto investors. A safe, but perhaps extreme, solution is to buy directly from miners that you can personally check for AML risk. If part of a coin you own has passed through the wallet address associated with money laundering or coin theft, you may have a hard time selling it in the future. Conclusion Many traditional asset managers want to get exposure to cryptoassets because returns are not correlated with other asset classes, thereby allowing them to improve the performance of a portfolio from a risk/return perspective (even if cryptoassets underperform). Others believe that Bitcoin (and perhaps a few others) have a chance at dethroning Gold and other precious metals as a safe haven asset. Concerns over staying power, custodianship, liquidity, and legal risk will drive traditional asset managers to concentrate investments in Bitcoin, Ethereum and perhaps a couple other coins. Trading in and out of crypto can be done through CEFs/investment trusts, and eventually ETFs, though they currently trade at significant premiums to NAV. For asset managers comfortable with custodying their own funds, OTC is the most popular option though all-in execution cost can reach 5%+. Dark pools, order routers and execution algorithms may offer better solutions in the future, though the market may still be too immature. Finally, traditional asset managers must navigate the potential pitfalls of integrated exchanges, and unknown coin provenance. Want to chat? Lately, my good friend and I have been exploring the crypto space with the intent of building a company. One remark we’ve heard over and over is how inscrutable crypto investing is, even from the perspective of a professional asset manager. It’s still too difficult for even a savvy portfolio manager to get exposure to cryptocurrency. In this article, we’ve outlined what we see as the primary reasons why. As a first step, we are exploring helping accredited investors get crypto exposure through a very low fee fund. For more information, please reach out to us at . Taylor Pearson We want to make it safe, easy, and low cost for anyone to diversify their investment portfolio with cryptocurrencies. Simple Coin Capital

Crypto investing for traditional asset managers

On this 4th of July, it’s interesting to note that one of the unique properties of blockchain projects is that the same mechanism used to propagate change can be used to disobey and declare independence from the chain. This dynamism is a feature not a bug: forks are the liberty mechanism for blockchains. Photo by on Ursula Spaulding Unsplash First things first. What’s a fork? Forks are for changing the consensus rules of a . Mike Hearn : tools blockchain explained this succinctly “A soft fork is when the rules of the…protocol change such that old nodes don’t realise the rules are different, and continue to accept blocks created by newer nodes that follow the changed rule set. A hard fork is when the rules of the…protocol change such that old nodes refuse to accept blocks created by newer nodes.” ( ) Source ( ) Source Both soft and hard forks are used as a part of blockchain governance as a way to address key issues such as scalability. In his piece Eric Lambrozo explains the process of activation, by which forks for new consensus rules get implemented. “Forks, Signaling, and Activation” If forks are, in some cases, simply a process for making necessary changes, other times, they represent a fundamental split — usually rooted in values or incentives — that divides one protocol community in multiple. Two well known examples of this are the case of Ethereum Classic and Bitcoin Cash. Ethereum Classic was the result of disagreements about how to handle the circa $50m that was ultimately stolen during the DAO Hack. While most of the community (89%) voted to hard fork back to before the hack in order to recover the funds, the group that disagreed — valuing the immutability of the chain above the money — forked what would become Ethereum Classic. For more on this, check out And to understand how the community was debating the fork then, read and about the emergence of the Ethereum Classic alternative. “Down the Rabbit Hole: Ethereum, Immutability, Consensus-Rule, & Forks.” this overview piece this piece by Blockstack’s Muneeb Ali Bitcoin Cash meanwhile was the result around Blockchain Improvement Proposal 148, which introduced Segregated Witness (SegWit) in mid 2017. At core, the debate around BIP148 was one around how to scale bitcoin. As : ‘Segwit sought to compress the amount of data in each transaction, thereby freeing up block space, while bitcoin cash made the size of each block bigger, up to a maximum of 8MB.” If a little reductionist, the debate effectively pitted the user community against miners (a battle that would continue later in 2017 with the SegWit2x proposal and the counter No2x movement that eventually popped up). As the threads below show, these were pivotal moments that bifurcated and continue to shape the community. bitcoin.com put it As it stands today, Ethereum Classic is the 15th largest cryptocurrency by market cap, while Bitcoin Cash is the 4th. Both are now among the 5 currencies tradable on Coinbase. The maturation of these community lends legitimacy to the use of forks as a meaningful expression of discontent, and that in itself shapes how other communities develop. In application, forks transform a technical process of rewriting the rules of blockchain consensus into a social, democratic process of debating the values that should underlie those rules. From Subjects to Citizens This new agency to question decisions and even defect will likely impact the mentality not only of developers but on the wider communities of users of services built on blockchains. Web 2.0 was built on a set of assumptions that put companies above users: that ceding personal data to third parties and platforms was the cost of doing business on the web; that users were subject to whatever changes the services wanted to make, regardless of whose interest they were made in. In Web 3.0, those assumptions will change. The liquidity of everything — in other words, the agency capital, coders and communities have to declare independence — changes the digital zeitgeist in fundamental ways. Forking, and the broader set of emerging governance processes it represents, is emblematic of the shift of consumers being users of products to consumers being citizens of participatory technology ecosystems. Of course, democracy is a messy process. A paraphrase of Churchill’s famous “democracy is the worst form of government, except for all the others” line (which, unlike many famous but apocryphal quotes, ) has been making its way around cryptotwitter capturing this sentiment: Churchill actually said What’s more, just like in the physical world, much of democratic process is actually about interest groups trying to exert their will and impose what’s best for them on the group as a whole. One needs look no further than the tension between what users want vs. what miners want to see this play out. Still, today is the 4th of July. On America’s independence day, it’s hard not to be excited about the new norms emerging with which developers and digital citizens can exert their liberty and shape a more dynamic, free and open technology era. Further Reading If you’re like me, and you geek out on this stuff — or if you simply need to pretend to be doing work to get a quick break from your family who, you love, but, you know, they can get overwhelming — then here you go: of course ( ) To fork or not to fork Lane Rettig ( ) Hard Forks and the Myth of Crypto Immutability SFOX ( ) The Bitcoin Core Merge Process Eric Lombrozo ( ) An Explanation Of Cryptocurrency Forks Phil Glazer ( ) Democratizing Blockchain Forks æternity ( ) Scalability, Hard Forks and Markets Stephen Pair ( ) How To Price Hard Forks Jill Carlson ( ) In defense of “white” hard forks, like the Ethereum DAO-repair DK ( ) Peeling the layers of blockchain forks Muneeb Ali Guide to Forks: Everything You Need to Know About Forks, Hard Fork and Soft Fork Fork this: What an unprecedented court battle says about the future of cryptocurrency Mining Pools And Hard Forks Foreshadow 51% Attacks

The Forks Of July: How Blockchain Communities Declare Independence

「 AIを使って作るPrivate Brand**」**として、Scrum Venturesの「 」でも紹介された 。2017年10月27日に上場申請書(S-1)を提出したので早速気になる点をまとめてみた。 これからの小売を理解するための20のキーワード Stitch Fix AIがスタイリストの服のチョイスを支援するStitchFix 女性、男性、キッズ、妊婦、大きなサイズから靴やアクセサリーまで幅広く商品を提供するStitchFix。Pinterestの画像情報や服の好みを伝えると、AIがチョイスした商品をパーソナルスタイリストが5アイテム選んで郵送してくれます。このAIと人が選んだ5アイテムを「Fix」と呼んでいます。郵送サイクルは隔週、毎月、2ヶ月から選べます。気に入れば購入し、気に入らないアイテムは3日以内に返品します。気に入ったアイテムの代金は事前に登録してあるクレカから自動引き落としされ、気に入ったアイテムがない=購入しない場合はStyling Feeとして$20が引き落としされます。5アイテム全て購入すると25%OFFになります。 StitchFixをご存知でない方、SF在住のプロダクトハンター茜さんが体験レポを書いているので、ぜひチェックしてみてください。 【体験レポ】AIと人によるパーソナルスタイリストサービス「Stitch Fix」を使ってみた | Shopping Tribe リアル店舗型ビジネスが持ちえないユニークな顧客データを保有する 対面型の接客では持ちえない顧客データを数多く保有するStitchFix。顧客データを取得するタイミングとしては、①初回利用時のアンケート ②郵送した5アイテムについてのフィードバックデータ(購入や未購入履歴、価格感応度など) ③①や②を通じて得られる顧客が好む服のAttributeなど詳細データ(サイズ、シルエット、縫い目、ポケットの形、ライフスタイル)。顧客1人当たり85のデータポイントがあり、郵送した85%の商品について顧客のフィードバックデータが継続的に蓄積される仕組みになっている。 ユニークな顧客データを獲得後、下記①~②のようなビジネスサイクルに落とし込んでいる。「ユニークなデータセットをいかに獲得するか」と「ユニークなデータセットから購買予測と相関性の高いアルゴリズムをいかに構築するか」がこのビジネスの肝であることがよくわかります。 ①Data that Matters：顧客アンケートから直接データを収集②Data Science Woven into the Fabric of Stitch Fix: ①で収集したユニークなデータセットをAIアルゴリズムで分析③Human Judgment applied to Data Science: ②の分析結果をプロのスタイリストが補正、よりパーソナライズされた服のチョイスを顧客へ提供④Client Loyalty: パーソナライズされた情報提供により顧客ロイヤルティーを向上 ビジネスを加速させる7つのアルゴリズム 先ほどはStitchfixのユニークなデータセットについて語りましたが、このビジネスのもう一つの肝であるアルゴリズムの種類についても説明したいと思います。StitchFixでは75人のデータサイエンティストがアルゴリズムの構築や改善に関わっています。そして、アルゴリズムは下記7つから構成されています。 ①Styling Algorithm1つ目のアルゴリズムは、商品のAttribute(サイズ、テイスト、シルエット、縫い目、ポケットの形など)レベルで顧客の嗜好性を把握し、販売可能な商品在庫データとマッチングするStyling Algorithm。5アイテム= Fixについてはアルゴリズムでアイテム毎に「顧客の購入確率」を事前にスコアリング付与し（下図参照）、購入や未購入のフィードバックによりアルゴリズムを補正している。 ②New Style Development2つ目は、顧客がまだ気づいていない/まだ満たされていないニーズを発見するアルゴリズム。満たされていない特定ニーズを発見すると、アルゴリズムがニーズに対して適切な商品をマッチングさせる。また、700以上のブランドからアルゴリズムが人気のある商品のAttributesを要素分解して、人気のあるAttributesを組み合わせて、”Exclusive Brands”というPrivate Brandとして販売している。データを駆使して、季節毎に売れるAttributesパーツを組み合わせたヒット商品を作ることに繋げることができそうですね。 ③Stylist Algorithm3つ目は、顧客の服のテイストやスタイルに合ったスタイリストをマッチングさせるアルゴリズム。3,400名以上のスタイリストの中から、テイストやスタイル以外にも顧客とスタイリストの地理的な近さなど人口統計的な属性からマッチングさせている。 ④Demand Forecast4つ目は、顧客の嗜好性、ライフスタイル(ドレスなどを着る頻度)、ライフステージから商品カテゴリー、商品タイプ、商品スタイル、ブランドなどの需要予測をすることで、商品の適正在庫や過不足なくスタイリストを維持することを可能にするアルゴリズム。 ⑤Merchandise OptimizationUSの小売は在庫を購入&仕入れ、年間を通じて割引セールを実施する。StitchFixは正確な需要予測に基づき、仕入れが的確で在庫量が適正化されているので、割引セールを実施する必要がない。どんな商品アイテムをどのサイズでどのくらい仕入れるべきかを5つ目のアルゴリズムが導いてくれる。 ⑥Fulfillment Center Assignment6つ目のアルゴリズムは、顧客の居住地やニーズを予測し、どんな商品アイテムをどのフルフィルメントセンターへ納入すべきかをリアルタイムに判断できることで、顧客への郵送距離に応じ在庫をカリフォルニア、アリゾナ、テキサス、ペンリルバニア、インディアナの5つの州のセンターに分散することができ、商品を早く安く配達することを可能にする。 ⑦Pick Path Optimization最後のアルゴリズムはフルフィルメントセンター内オペを最適化する。フルフィルメントセンター内の、商品を納入→検品→ストッキング→ピッキング→梱包→配送のプロセスを最適化する。また、基本的に商品がリターンされることを前提としたZapposの様なビジネスモデルなのでリバースロジスティックスが組まれている。 FY2017の売上は$977Mn(1,100億円)に到達！ ユニークなデータとアルゴリズムを持つStitchFixの創業は2011年。創業から6年で$43.5Mnを調達。2014年に$25Mnを調達してから一度も資金調達せずに、FY2017の売上が1,000億円に到達しているのは驚き！ FY2014年の売上$73MnからFY2015 $343Mn(4.7x) → FY2016 $730Mn(10x)と急成長し、FY2017の売上は$977Mnと、3年前から実に13.3xも売上が膨れ上がっている。この3年で粗利率も44%まで改善している。 QoQの売上成長率は一桁台 2016年10月末に$236Mnに調達してから、売上成長率は鈍化傾向にあるが、直近2Qは1%から3%、3%から5%と売上成長が改善傾向にある。 粗利に対してのSGA比率は100% 通常スタートアップが上場する際の上場目論見書では、Selling and Marketing(販促費)とGeneral Administration(一般管理)の項目が分かれて記載されているのが一般的ですが、StitchFixは「Selling and General Administration」と合算されているため、純粋に粗利益に対しての販促費がどのくらい投下されているか？わかりません。直近3Qは粗利の96–100%をSGAに費やしていることがわかります。 有料顧客数は累計219万人だが、新規顧客獲得数は鈍化傾向にあり 直近3Qでは稼いだ粗利のほぼ100%をSGAに打ち込んでいるStitchFixですが、2016年4月末の22.7万人の新規顧客獲得数をピークに、直近Qは12万人まで新規獲得が落ち込んでいる。 新規で利用開始したユーザの最初2年間の売上は$639！ 下の図は、最初にFix(5アイテム)を郵送された時点から最初の2年間でいくらユーザが購入しているかを表しています。2014年にStitchFixを利用開始たユーザは最初の2年間で平均$639購入、2015年のCohortユーザは$718分購入していることになります。新しいCohortに対しての単価アップに成功していることが言えそうです。 2014年のCohortユーザの売上は$435、2015年は$506、FY2016は$489。 先ほどは利用開始から2年の売上でしたが、下の図は最初の1年間での購入金額を表しています。2014年にStitchFixを利用開始たユーザは最初の1年間で平均$435購入、2015年のCohortユーザは$506、2016年は$489分購入していることになります。2014年のユーザは最初の1年間で$435、2年目には$204($639-$435)をお買い上げ。2015年のユーザは2年目に、$212($718-$506)をお買い上げしています。こうして見ると、利用開始初年度は$435~$506前後購入し、2年目は$200前後の購入と、1年に比べて2年目に買う額は半分くらいになる=購買意欲が下がることがわかります。 FY2016の上半期ユーザの売上は$335、FY2017の上半期は$367。 上の図に2016年に利用開始したCohortユーザの初年度の売上は$489というデータがありました。下の図によると、FY2016年に利用開始したユーザの最初の半年間の購入金額は$335なので、次の半年で$154($489–335)購入していることがわかります。このことから、最初の6ヶ月で$335購入しており最も購入意欲が高く、次の半年は$154しか購入していないため、利用開始半年以降から一気に購入金額が減っていくのがわかりますね。 有料顧客を1人獲得する際のコストであるCAC(Cost of Acquisition)はS-1に記載がありませんでしたが、利用開始から9ヶ月のリテンション率は25%とありました。このことから、有料顧客獲得から最初の6ヶ月でいかに売ってLTVを最初の6ヶ月で高めるるかが、Payback Periodを短くする肝になりそうですね。 CEOのKatrina Lakeは日本人を母に持つ日系2世、27歳で初めての起業 コンサルティングやVC出身のKatrinaがStitchFixを起業したのは、Harvard Business Schoolに在学中の27歳。創業当初は趣味レベルのファッションサイトで立ち上げ、MVPを検証していた。創業当時はアルゴリズムなどは構築しておらず、SurveyMonkey(というアンケートツール)でユーザの好みをヒアリングをして、アパレル企業の購買担当だった姉の力を借りて、アパレルをユーザ宅へ郵送し、$20の小切手を受け取る手弁当のビジネスだった。このビジネスモデルに興味を持ったのが、Netflixの偉大なるCEO Reed Hastingsの下で当時VP of Data ScienceをしていたEric Colsonだった。元々KatrinaはStitchFixのAdvisorになるようEricに依頼していたが、EricはNetflixでの名誉を捨てて、この創業2年目のスタートアップにChief Algorithm Officerとして転職してしまった！ “27歳で起業、京都出身の母親を持つKatrina Lake(Bizjournals.comより)” Colsonの参加から、データドリブンなStitchFixのビジネスモデルが確立されていった。顧客の体型データ、好みのパターン、アイテムのキープ率や返品率など様々なデータを蓄積し、正確な需要予測モデルを構築していった。このモデルを人間のスタイリストに補正させ、現在のビジネスを成立させた。 Baseline VenturesのSteve Andersonが法人筆頭株主 日本では馴染みがないかもしれないが、法人筆頭はBaseline Ventures(Seedをリードした)で28.1%保有。Benchmark(Series BとCをリード)が25.6%、Lightspeed(Series A)が11.8%。また、創業メンバーであるCEOのKatrina Lakeが16.6%が保有している。 Baseline Venturesをご存知の方は少ないかもしれませんが、2006年SFで創業した進気鋭のSeed系VCで、Solo GPのSteve Andersonはベンチャーキャピタリストの名誉でもあるMidas ListのTop10の常連。KPCB時代に出資したHeroku(Salesforceに買収)やInstagramの最初の投資家として名を轟かせている。 How Instagram's First Investor Steve Anderson Struck Gold As A One-Man Deal Machine Benchmarkはアメリカで3本の指に入ると言われる投資家Bill Gurleyが出資&Boardメンバーに参画している。UberのSeries Aをリードし、最近まで取締役をしていたのがBillでした。 上場時のMarket Capは、$3Bn(3,300億円)の報道 2017年初のIPO時のMarket Capが$3Bn(3,300億円)超えのTech系スタートアップになるの？ Amazonが「Amazon Prime Wardrobe」、Nordtromが買収した「Trunk Club」も同様のサービスを提供する中で、今後どのようにAmazonなど競合と戦っていくのか？ IPO時のMarket Capが$3Bnと想定すると、Katrinaは34歳にして資産$480Mn(500億円)以上手にするわけですが、今後Katrinaなどのような人生を歩むのか？ 今後も目が離せないスタートアップになりそうです。 Fin

27歳で起業、創業6年で売上1,000億円を突破！AIがスタイリストの服のチョイスを支援する「Stitch Fix(SFIX)」の上場申請書(S-1)を読んでみた

We are thrilled to announce we’re one of the 12 startups selected by The Refiners to be accelerated in San Francisco! We talked about our selection a few weeks ago but the D-Day came along: our team integrated the first fleet of The Refiners accelerator program last Monday! The Refiners is a cross border acceleration program specifically designed to immerse foreign startup founders into the Silicon Valley culture and codes. It’s no secret to anyone a lot of foreign entrepreneurs face difficulties once they land on the American soil where network and mentorship are often key to be successful. That’s why The Refiners formed a rock-star team around the project, including kick-ass investors, +200 local mentors, partners, entrepreneurs and key players of the ecosystem like Reid Hoffman, founder of LinkedIn, Xavier Niel, Gary Vaynerchuk, Joi Ito, MIT Media Lab Director, Phil Libin, Evernote’s founder, Brian Solis. We’ve been slowly approaching the US market since the beginning of our journey: we already have some American customers and we know there is an interest for our product out there. However we certainly also understood we have to adapt our message, our strategy and learn the codes of this market to be successful. The Refiners is therefore a unique opportunity for our team to be advised by top-notch mentors to develop our business and network in the United States. Last year has been tremendous for Appaloosa : +300% growth in revenue The team went from 5 to 13 people We’ve now deployed 10,000,000+ private apps via 7,000+ private enterprise app stores We are ready to take it to the next stage! During the next three months, our CEO Julien will be in San Francisco and his #1 goal is to learn and meet with inspiring people. Should you be around the Bay Area, please let him know what you’re up to by tweet , snap (Appaloosa.io) or email ( ) to grab a coffee together! julien@appaloosa.io Stay tuned, we’ll keep you updated ! The almost complete Appaloosa Team

Appaloosa is joining The Refiners — Fleet 1 in SFO! 🇺🇸

Out with Perpetual, In with Just-in-Time: A Smarter Way to Secure Access

In an effort to bolster digital security and data recovery, technology and blockchain solutions provider Serenity has partnered with IDEMIA Secure Transactions (IST) to launch sAxess, a biometric security card. This innovative card is designed to improve data access control and provide a scalable solution for managing complex digital assets. The collaboration merges Serenity's expertise in blockchain technology with IDEMIA Secure Transactions' extensive experience in payment and connectivity solutions, serving over 1,900 financial institutions and fintech clients worldwide. The sAxess biometric card utilizes fingerprint authentication and other biometric measures to ensure that only authorized individuals can access sensitive data. Moving beyond traditional PINs and passwords, this approach offers a higher level of security for digital assets. The card is built on IST’s B.CHAIN hardware wallet, a solution that combines smart card security with biometrics to offer robust crypto cold storage and advanced secure authentication. This allows users to manage and access their digital assets directly, reducing reliance on intermediaries and minimizing exposure to third-party risks. A distinctive feature of sAxess is Serenity’s patent-pending data recovery technology. This system employs non-fungible tokens (NFTs) as secure credentials within a "digital safe," providing a decentralized and immutable method for storing and recovering critical information. Users can set specific conditions for data access, such as inheritance clauses, ensuring that sensitive information can be retrieved under predefined circumstances without compromising privacy. The introduction of sAxess addresses the growing global demand for secure and scalable data management solutions, particularly for industries and individuals handling complex digital assets. With rising regulatory pressures like the General Data Protection Regulation (GDPR) and an increase in high-profile data breaches, companies are seeking reliable solutions for data protection. The biometric card is designed to be scalable, catering to organizations in sectors such as banking, healthcare, and insurance. It offers an adaptable solution for environments that handle sensitive data, meeting the complex demands of these industries. "Digital threats are becoming increasingly complex and frequent, targeting individuals and organizations alike," noted Venket Naga, CEO of Serenity. "By merging advanced biometric capabilities with our blockchain solutions, we aim to provide unprecedented security and ease in accessing and managing sensitive data." Farsh Fallah, COO of Serenity, added that sAxess represents a significant advancement in data security and digital asset management. "It offers more than just encryption; it empowers users to take control of their digital assets," he said. IDEMIA Secure Transactions brings to the partnership its expertise in biometrics and cryptography, aiming to enhance the safety and simplicity of payment and connectivity solutions. "By leveraging our hardware wallet technology in a biometric card, we are setting a new standard in trust, security, and user experience," commented Jerome Ajdenbaum, Vice President of Digital Currencies at IDEMIA Secure Transactions. The sAxess card is the first in a series of innovations that Serenity plans to introduce. Building on the release of their storage solution, sBox, the company is also developing additional products like sVault and sWallet. These offerings aim to provide secure, scalable solutions for data access, storage, and recovery, emphasizing user control and confidence in managing digital assets. As the digital landscape continues to evolve, the need for robust security measures becomes increasingly critical. The collaboration between Serenity and IDEMIA Secure Transactions highlights a proactive approach to addressing these challenges by combining biometric authentication with blockchain technology. The sAxess biometric card is set to be rolled out globally before the end of the year, offering a new layer of security for individuals and organizations managing sensitive digital information. About Serenity Serenity specializes in innovative technology solutions that prioritize privacy and data security in the digital age. Utilizing blockchain and Decentralized Physical Infrastructure Networks (DePIN), the company empowers businesses and individuals to manage their digital assets with enhanced control and confidence. Serenity focuses on creating secure, scalable solutions for data access, storage, and recovery. About IDEMIA Group IDEMIA Group is a global leader in identity technologies, developing solutions that simplify and secure payment, connectivity, access, identification, travel, and public safety. With expertise in biometrics and cryptography, the group operates with an ethical and socially responsible approach. IDEMIA serves over 600 governmental organizations and more than 2,400 enterprises in over 180 countries, bringing together businesses that specialize in secure transactions, public security, and smart identity. Vested Interest Disclosure: This author is an independent contributor publishing via our business blogging program. HackerNoon has reviewed the report for quality, but the claims herein belong to the author. #DYOR In an effort to bolster digital security and data recovery, technology and blockchain solutions provider Serenity has partnered with IDEMIA Secure Transactions (IST) to launch sAxess, a biometric security card. This innovative card is designed to improve data access control and provide a scalable solution for managing complex digital assets. The collaboration merges Serenity's expertise in blockchain technology with IDEMIA Secure Transactions' extensive experience in payment and connectivity solutions, serving over 1,900 financial institutions and fintech clients worldwide. Serenity The sAxess biometric card utilizes fingerprint authentication and other biometric measures to ensure that only authorized individuals can access sensitive data. Moving beyond traditional PINs and passwords, this approach offers a higher level of security for digital assets. The card is built on IST’s B.CHAIN hardware wallet, a solution that combines smart card security with biometrics to offer robust crypto cold storage and advanced secure authentication. This allows users to manage and access their digital assets directly, reducing reliance on intermediaries and minimizing exposure to third-party risks. A distinctive feature of sAxess is Serenity’s patent-pending data recovery technology. This system employs non-fungible tokens (NFTs) as secure credentials within a "digital safe," providing a decentralized and immutable method for storing and recovering critical information. Users can set specific conditions for data access, such as inheritance clauses, ensuring that sensitive information can be retrieved under predefined circumstances without compromising privacy. The introduction of sAxess addresses the growing global demand for secure and scalable data management solutions, particularly for industries and individuals handling complex digital assets. With rising regulatory pressures like the General Data Protection Regulation (GDPR) and an increase in high-profile data breaches, companies are seeking reliable solutions for data protection. The biometric card is designed to be scalable, catering to organizations in sectors such as banking, healthcare, and insurance. It offers an adaptable solution for environments that handle sensitive data, meeting the complex demands of these industries. "Digital threats are becoming increasingly complex and frequent, targeting individuals and organizations alike," noted Venket Naga, CEO of Serenity. "By merging advanced biometric capabilities with our blockchain solutions, we aim to provide unprecedented security and ease in accessing and managing sensitive data." Farsh Fallah, COO of Serenity, added that sAxess represents a significant advancement in data security and digital asset management. "It offers more than just encryption; it empowers users to take control of their digital assets," he said. IDEMIA Secure Transactions brings to the partnership its expertise in biometrics and cryptography, aiming to enhance the safety and simplicity of payment and connectivity solutions. "By leveraging our hardware wallet technology in a biometric card, we are setting a new standard in trust, security, and user experience," commented Jerome Ajdenbaum, Vice President of Digital Currencies at IDEMIA Secure Transactions. The sAxess card is the first in a series of innovations that Serenity plans to introduce. Building on the release of their storage solution, sBox, the company is also developing additional products like sVault and sWallet. These offerings aim to provide secure, scalable solutions for data access, storage, and recovery, emphasizing user control and confidence in managing digital assets. As the digital landscape continues to evolve, the need for robust security measures becomes increasingly critical. The collaboration between Serenity and IDEMIA Secure Transactions highlights a proactive approach to addressing these challenges by combining biometric authentication with blockchain technology. The sAxess biometric card is set to be rolled out globally before the end of the year, offering a new layer of security for individuals and organizations managing sensitive digital information. About Serenity About Serenity Serenity specializes in innovative technology solutions that prioritize privacy and data security in the digital age. Utilizing blockchain and Decentralized Physical Infrastructure Networks (DePIN), the company empowers businesses and individuals to manage their digital assets with enhanced control and confidence. Serenity focuses on creating secure, scalable solutions for data access, storage, and recovery. About IDEMIA Group About IDEMIA Group IDEMIA Group is a global leader in identity technologies, developing solutions that simplify and secure payment, connectivity, access, identification, travel, and public safety. With expertise in biometrics and cryptography, the group operates with an ethical and socially responsible approach. IDEMIA serves over 600 governmental organizations and more than 2,400 enterprises in over 180 countries, bringing together businesses that specialize in secure transactions, public security, and smart identity. Vested Interest Disclosure: This author is an independent contributor publishing via our business blogging program. HackerNoon has reviewed the report for quality, but the claims herein belong to the author. #DYOR Vested Interest Disclosure: This author is an independent contributor publishing via our business blogging program . HackerNoon has reviewed the report for quality, but the claims herein belong to the author. #DYOR Vested Interest Disclosure: business blogging program business blogging program

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