FTX Collapse: Defi in Profits as US Launches Digital Dollar

In the outgoing week, DeFi and DEX platforms have seen a new surge in profits amid FTX collapse according to some on-chain data. This is as record amounts of Bitcoin and Ethereum have continued to leave the CEXs.  The trust wallet token was among the biggest beneficiaries of the new clamour for decentralization of the crypto coins and token spaces after Binance CEO Changpeng Zhao, said that DeFi and DEXs are the future of cryptos as they will dominate the digital finance industry in a few years.

The Token Terminal’s earnings leaderboard shows that in the outgoing week, three protocols had revenue of above $1 million with Ethereum leading the on-chain tops gainers with over $8.5 million in total earnings.  While OpenSea came in a distant second place, earning $1.5 million.

The migration away from centralized exchanges (CEXs) saw decentralized perpetual exchanges experiencing increased trading volume to the turn of $5 billion

CBDC

On the government side of things, the U.S. Federal Reserve Bank of New York in partnership with banking giants in the U.S. is set to launch a 12-week digital dollar blockchain pilot that will see to the launch of a proof-of-concept digital money platform called the Regulated Liability Network (RLN). The participating bank giants including Citigroup Inc., HSBC Holdings, MasterCard Inc., and Well Fargo & Co

A statement by the members of the U.S. banking and payments community that is involved in this [proof-of-concept] project, says they are pleased to be working alongside the New York Innovation Center (NYIC) which is part of the Federal Reserve Bank of New York overseeing the project.

Unlike Nigeria and some other countries that kick-started their CBDC without a test or pilot, the RLN project will be piloted for 12 weeks.  According to reports by Decrypt, participating banks will issue simulated digital tokens that represent their customer’s deposits and will settle through simulated central bank reserves on a shared blockchain. The group also added that the project will include a regulatory framework in line with existing Know Your Customer (KYC) and anti-money laundering requirements. After the pilot is completed, the group said that it will publish its results.  However, the project will be conducted in a test environment and only use simulated data. It is not intended to advance any specific policy outcome, nor is it intended to signal that the Federal Reserve will not make any imminent decisions about the appropriateness of issuing a retail or wholesale CBDC, nor how one would necessarily be designed.

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