Cosmos and Blockstack hackathons offer glimpse into DeFi’s future

Cosmos and Blockstack hackathons offer glimpse into DeFi’s future

A pair of hackathons from two fast-rising blockchain projects augur more composability, interoperability, and tooling for DeFi

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On Friday, blockchain projects Cosmos and Blockstack both announced winners of their respective HackAtom V and HackDeFi hackathons, each offering a glimpse into the coming wave of DeFi development — a vision including marked advances in tooling, interoperability, and composability. 

While the overwhelming majority of decentralized finance (DeFi) development remains concentrated on Ethereum, where over $16 billion in digital assets are currently locked by various DeFi Protocols, Cosmos and STX are currently the #25 and #59 ranked projects by marketcap and look to be fast risers eager to take a slice of Ethereum’s DeFi pie.

On the Cosmos side, the interoperability and scalability focused blockchain awarded HackAtom V prizes to competitors offering cross-chain staking, as well as a timelocked “clawback account.”

Awarded to Tomas Tauber, who is one of the engineers working on Crypto.com’s forthcoming blockchain, the Clawback Account is a smartcontract-linked pair of accounts that offers a secondary access to funds for a certain period of time. Possible use cases for the linked accounts include cryptocurrency exchange wallet management, as well as programmed “cashback” and other digital asset reward programs.

Another promising DeFi submission is Osmosis, which pitched itself as “Balancer meets Interchain Staking.” An automated market maker similar to Balancer, the key feature for Osmosis is its “custom staking token design tool,” one which allows users to create tokens than can be staked on multiple chains — potentially offering developers access to liquidity across multiple ecosystems.

For Blockstack, a project aiming to bring Bitcoin as collateral to decentralized application (Dapp) development, the first-place prizewinner was DualX, a project that allows users to preprogram certain trading logic into normally locked staking funds.

DualX pitches itself as a new kind of exchange that “provides the opportunity for an investor‘s capital (denominated in BTC) to earn a yield on their funds while passively waiting to buy an investment asset (say STX).” The BTC depositor would earn yield until STX reached a certain price, whereupon the depositor would have the option of purchasing the STX.

These possible innovations come during an especially promising time for DeFi’s growth. While the figure is disputed, some analysts have claimed that DeFi has passed 1 million users, and there has been a boom in products that might help stabilize the space.


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A pair of hackathons from two fast-rising blockchain projects augur more composability, interoperability, and tooling for DeFi

Blockstack CEO Says Bitcoin Is a Better DeFi Solution Than Most Think

Blockstack CEO Says Bitcoin Is a Better DeFi Solution Than Most Think

Bitcoin a secure cryptocurrency, whereas Ethereum has been a “frontrunner” when it comes to smart contracts.

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As interest in smart contracts surges, some Bitcoiners are asking: why can’t Bitcoin (BTC) become the foundation for smart contracts too, instead of Ethereum (ETH)?

Muneeb Ali, co-founder and CEO of Blockstack open-source platform, believes that the best way to bring about a user-owned internet „is to anchor applications and smart contracts to the Bitcoin network in a way that uses Bitcoin as a reserve currency and its powerful blockchain as a security mechanism.“

In a conversation with Cointelegraph, Ali stated that Bitcoin has been the king of blockchains for more than a decade, as most people have come to recognize that the Bitcoin network is “unparalleled” when it comes to security:

“We believe that the new Stacks 2.0 blockchain, currently in testnet, holds one solution for making Bitcoin the foundation for smart contracts in Web 3.0. With the Clarity smart contract programming language and the Proof of Transfer mechanism, developers can build smart contracts in a much more secure language that is predictable, decidable.”

Ethereum as a frontrunner for smart contracts

Traditionally, Bitcoin has been recognized as a secure network, whereas Ethereum has been a “frontrunner” when it comes to smart contracts, according to Ali. Blockstack’s founder elaborated further on the discussion:

“Bitcoin’s limited scripting language has been seen as a dealbreaker to developers looking to build dapps or deploy smart contracts. As a result, many developers end up building their own blockchains, hoping to bootstrap native proof-of-work protocols or proof-of-stake, but these tend to be much less secure. One of the results is developers assume Ethereum is better suited for launching smart contracts, but I believe this is premature.”

Ali also pointed out that the future of the internet will not be a “tradeoff of convenience for security,” but will instead be tying that security to web applications in a way that uses Bitcoin as a reserve currency along with its blockchain as a security mechanism.

DeFi on the Bitcoin network

Regarding the web 3.0 era, Ali thinks that of particular note is the recent “rise in conversation about the possibilities of ‘DeFi on the Bitcoin’.” For the Blockstack’s founder, this means more people are looking to anchor in the security of Bitcoin when it comes to financial products:

“Many people think that it is easier to recreate Bitcoin on top of Ethereum, but it actually makes more sense to create Ethereum functionality on top of Bitcoin. The adoption of this is still nascent but people are definitely starting to realize the value of building on the Bitcoin ecosystem rather than parallel to it.”


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Bitcoin a secure cryptocurrency, whereas Ethereum has been a “frontrunner” when it comes to smart contracts.

Smart Contracts Is Too Limiting a Name, Says Blockstack CEO

Smart Contracts Is Too Limiting a Name, Says Blockstack CEO

The potential benefits of smart contracts go well beyond what their name suggests, the co-founder and CEO of Blockstack argues.

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The potential benefits and applications of smart contracts go well beyond what their name suggests, the co-founder and CEO of blockchain software firm Blockstack has argued.

In an interview with Cointelegraph on June 12, Dr. Muneeb Ali, who holds a Ph.D in computer science from Princeton University, said:

“Just like cloud computing had implications for a broad range of industries, and not just finance, the same is true for smart contracts. They should not even be called smart contracts because it’s a rather limiting name. These are verifiable programs that couldn’t exist in the cloud computing era.”  

Dr. Ali’s comments follow Blockstack’s decision to collaborate with proof-of-stake blockchain protocol Algorand on supporting and adopting a smart contract language called “Clarity,” which aims to be more secure and “purpose-built” for smart contracts than existing programming languages.

“Our industry needs a predictable, secure, open-source alternative to current approaches like Solidity. While we anticipate that the value locked up in smart contracts could eventually number in the trillions, our industry would not have been ready for such growth,” Dr. Ali said.

This lack of readiness, in the view of both Blockstack and Algorand, stems from the fact that developers until now have “generally have been using an insecure language that was originally a fork of JavaScript, itself a general purpose language for building websites.”

By contrast, smart contracts — which are designed to overcome the weaknesses of human or institutional intermediaries by relying on self-executing software code — are “very different from typical computer programs and websites,” Dr. Ali said. He stressed:

“They need to be verifiable programs for high-stake operations. General purpose languages can be dangerous here.”

A “superpower” for developers

For serious stakeholders to adopt smart contracts and realize their potential, Dr. Ali pointed to the need for “a decidable language that is safe and mathematically predictable ahead of a smart contract’s execution.” 

An industry is “unlikely to conduct high value transactions through smart contracts written in an insecure language,” he said, noting that the implications of this go far beyond the financial services industry:

“The ability to write verifiable code is like a superpower for developers. This can reshape how software is distributed and verified on the internet, how developers get paid for contributing to code, how access control for internet services is implemented, and so on.”

With a decidable language, developers can know exactly how a program will execute down to its precise gas fee, which can automate functionality across an extensive range of internet applications.

As Cointelegraph has reported, not all researchers are as bullish on the potential of smart contract technology as Dr. Ali. 

Kevin Warbach, a professor of legal studies and business ethics at the Wharton School of the University of Pennsylvania, recently published an article pointing to what he believes to be the implicit “dark side” of the turn to automated, code-enforced decision-making in the blockchain space.


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The potential benefits of smart contracts go well beyond what their name suggests, the co-founder and CEO of Blockstack argues.

Does Blockstack Really Have 1 Million Verified Users?

Does Blockstack Really Have 1 Million Verified Users?

Does the blockchain confirm Blockstack’s claim of 1 million verified users? It does, sort of

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Blockstack PBC announced on Jan. 29 the completion of its “Milestone II” that unlocked $6.8 million from its 2017 initial coin offering. The project claims to have on-boarded one million verified users, an achievement that some in the community did not believe. Cointelegraph conducted an analysis of blockchain data to see if this claim could be confirmed.

The importance of the milestone

The Blockstack initial coin offering (ICO) was conducted in November 2017 through the CoinList platform. It was notable for being “SEC-qualified,” meaning that it had stronger reporting obligations to the regulators and implied that it was not at risk from getting prosecuted by the Securities and Exchange Commission. It was offered to both accredited and retail investors.

The offering was also structured in result-based milestones that would unlock portions of the collected funds. There were two of these milestones, with the first one requiring the successful launch of the network’s mainnet by January 2019. To unlock the second milestone, the project had to reach one million verified users, a result that would be checked by an ostensibly independent advisory board.

Notably, Blockstack pledged to return to the investors 80% of the funds locked by each milestone if it failed to deliver. 

Blockstack’s core value proposition is to provide a verifiable identity secured by blockchain, which can be utilized by approved entities. This is being used to create an ecosystem of apps that are authenticated with Blockstack ID.

It stands to reason that given this system, the presence of one million verified users could be conceivably verified by analyzing Blockstack’s blockchain data. The definition used by the advisory board includes all possible manners of verification, including via social media accounts or government-issued ID. These should be visible on the platform’s API.

How a verified account looks on the platform — note the Twitter icon. Source: Blockstack Explorer

Methodology used

While Blockstack uses Bitcoin’s OP_RETURN operation to store data on the blockchain, it is not immediately readable. Blockstack provides its own Bitcoin explorer that includes detailed information on all the usernames saved on the blockchain.

We used penetration testing tools to crawl through the entire history of Bitcoin blocks until May 25, 2018 — the date of the first operation recorded on Blockstack’s wallet used for assigning names. We filtered through only the blocks that the API reported as having “name operations,” which netted a list of 17,000 blocks.

This list was fed into another crawler that extracted 1.5 Gigabytes worth of block data, which crucially included details on all name operations.

We filtered this list to only include usernames, without any additional data such as time of creation. 

The blockchain recorded a total of 1,997,949 names, though this figure also includes duplicates from top level domains (about 15,000).

Seeking to fully confirm whether the users are verified, we set out to issue API requests for each user found through this method. However, the sheer time required to make 1.9 million requests, in addition to eventual server restrictions, meant that we had to limit ourselves to a sample of just 50,000 users. 

Curious findings

While the research appears to at least confirm the user count reported on Blockstack’s explorer homepage, a deeper look shows some peculiar characteristics to the usernames.

Specifically, many usernames have either an “fc-” or “bc-” prefix on them. 

A peek into some of the usernames on Blockstack. The list is ordered chronologically, not alphabetically.

In fact, there are 1,316,894 “fc-” names and 325,356 names with “bc-” in them. Searching for these names in the block explorer yields a “no results” page — which is distinctly different than querying for a user that actually does not exist.

Given these findings, it appears that only about 400,000 of Blockstack users are actually verifiable in some way through the platform. The API does return valid data for both “fc-” and “bc-” names, but after more than 2,000 probe requests the software did not provide verification details for a single one of these users — which led us to interrupt the search.

Out of the 50,885 users we sampled from the remaining 400,000, only 1,565 had any mention of a verification. This is a rate of approximately 3% verified users.

In a July 2019 filing with the SEC, Blockstack revealed its own figures:

“Of those 115,780 accounts, approximately 16,100 accounts had provided a “social proof” as evidence of having a human user, such as a GitHub link or Twitter message link.”

The figure of verified accounts amounts to 14% of Blockstack users. This would still be well short of the necessary 50% dictated by its total user count.

Are the weird names the answer?

Blockstack used several initiatives to onboard users toward the end of 2019. One of these is the Blockchain.com airdrop, enacted in October 2019. The company reported to have distributed Stacks tokens to over 300,000 users — which corresponds to the amount of “bc-” users. Each of those people was supposed to be verified by Blockchain, Inc. through a full know your client (KYC) procedure.

In a call with Cointelegraph, Blockstack PBC CEO Muneeb Ali explained that the blockchain does not contain any verification data that would expose private user information, such as phone numbers or government IDs.

He confirmed that the “bc-” names are indeed resulting from the Blockchain, Inc. airdrop. As for “fc-” names, Ali did not wish to disclose their origin, but he mentioned that they are part of a user acquisition strategy that “the company will announce in the coming weeks,” while emphasizing that all of them are verified.

Is Blockstack guilty of wrongdoing?

Commenting on the debacle, Ali believed it was a misunderstanding, saying that “people are under the impression we claimed to have one million active users.”

He explained that the milestone was defined in 2017 according to a very specific legal definition, which required users to be registered on the blockchain. However, it did not specify how they were supposed to be verified — this was at the discretion of the company.

An SEC filing reveals that Blockstack paid Blockchain, Inc. up to $3.85 million for the airdrop. Even though they were paid for, the KYC requirement ensures that all of the airdrop participants are real people — something that the social verification system does not guarantee.

Ali noted that the company largely moved away from social verification, precisely because it could be easily falsified. He also revealed that the team is working on creating blockchain signature records for other types of verification. 

Ali emphasized that the milestone was a self-imposed requirement, which he described as a testament to Blockstack’s transparency. 

While there is some ongoing uncertainty over the origin of the “fc-” names — which will hopefully be cleared soon — Blockstack could have easily created an army of fake social media accounts that would have passed a superficial blockchain test.

It also probably would have been cheaper than paying Blockchain, Inc. for an airdrop that only took it one third of the way.


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Does the blockchain confirm Blockstack’s claim of 1 million verified users? It does, sort of

Blockstack Pauses App Mining Pilot Due to Challenges in Running Program

Blockstack Pauses App Mining Pilot Due to Challenges in Running Program

Blockchain startup Blockstack has paused its App Mining pilot until it resolves the key challenges

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Privacy-centric computing network and app ecosystem Blockstack has paused its App Mining pilot due to a range of challenges.

Rolled out in 2018, the App Mining project is designed to incentivize developers to build apps on Blockstack. Although the startup has ostensibly seen a healthy app growth throughout 2019 — from 46 to more than 400 apps so far, — it admitted an array of challenges in running a program of increasing size and complexity, according to a Feb. 10 blog post.

Three key challenges to be solved

As such, Blockstack has decided to pause the pilot until it resolves key issues, which include objectively fair distribution, privacy-preserving analytics and decentralization. Blockstack expects to produce better ranking metrics used to reward apps that provide high-quality user experience and put users into control over their data and privacy.

Further, the company is set to develop a tool for tracking an app’s user activity that does not use users’ data and privacy. Such quality metric would help Blockstack identify how successful an app is. Finally, the company is faced with the task to determine what potential independent entity or tool can fairly distribute Stacks (STX) tokens to App Mining participants.

“Blockstack PBC will no longer run the App Mining program. We’re calling for a major overhaul of the App Mining program and not incremental improvements. Any new version of App Mining will be driven by individuals or entities other than Blockstack PBC and likely will not launch until Stacks 2.0 is operational,” the post pointed out.

Blockstack’s recent developments

Last August, Blockstack partnered with Lambda School to enable students enrolled in the program to learn how to code Blockstack apps and earn monthly revenue through its App Mining Program.

At the time, Blockstack also planned to supply a range of tools needed for quality control. Each student-developed, decentralised app was set to be subject to reviews and comprehensive user-testing videos.

As Cointelegraph reported last July, Blockstack gained SEC approval for its $28 million public token offering. That was the first SEC-sanctioned offering under Regulation A+, which would offer a token rather than a share.


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Blockchain startup Blockstack has paused its App Mining pilot until it resolves the key challenges

Binance Lists Blockstack for $250,000 ‘Long-Term Payment’

Binance Lists Blockstack for $250,000 ‘Long-Term Payment’

Binance received $250,000 to list Blockstack’s token, which it clarified was not a listing fee, but a marketing initiative idea by Blockstack

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A United States Securities and Exchange Commission (SEC) filing reveals that major cryptocurrency exchange Binance received a $250,000 “long-term payment” to keep Blockstack (STX) listed for one year.

Blockstack’s SEC filing reveals that Binance received 833,333 STX, which at the $0.30 token valuation provided by the company is equivalent to $250,000. The document also shows that the company intends to pay Binance more:

“[Blockstack] will pay three additional incremental payments of 833,333 each, on the first, second and third anniversaries of the Services Agreement’s effective date provided the Stacks Token is continuously listed on Binance prior to each such date. In addition, the Company will pay Binance a USD $100,000 payment for Binance’s marketing services.”

The payment is not a listing fee, per Binance

The filing follows an Oct. 23 announcement from Binance, which stated that the exchange did not charge a listing fee for adding Blockstack’s token to its platform.

When asked to clarify the apparent contradiction between the SEC filing and its announcement, a Binance spokesperson told Cointelegraph that the $250,000 payment received by the exchange is not a listing fee, and was rather a marketing fee that is Blockstack’s idea:

“A long term payment fee is an incentive proposed by Blockstack for Binance to keep the token listed on the exchange. This is a new payment fee proposed by Blockstack.”

Binance also provided a comment from Blockstack PBC CEO Muneeb Ali, who explained that the standard agreement includes a listing fee referred to as the “Technical Integration Fee.” This fee was $0 in this instance, which is what Binance stated in its announcement. Ali continued:

“The ‘Long-term Payment’ is something new that is not part of Binance standard agreements and it was an idea that I had and I proposed it to them. This long-term payment is meant to watch out for the Blockstack ecosystem by incentivizing Binance to list Stacks over many years and aligns well with our long-term focus. The marketing fee is a joint marketing campaign that we plan to run later on, again that is not a ‘listing fee’ but a marketing campaign that we plan to launch in the near future.”

As Cointelegraph reported earlier this month, Binance CEO Changpeng Zhao announced that all the listing fees cashed in by the exchange would be donated to charity. Binance will not only donate such fees to charitable causes but will also allow developers to name the amount they pay, without demanding a minimum fee.


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Binance received $250,000 to list Blockstack’s token, which it clarified was not a listing fee, but a marketing initiative idea by Blockstack

Blockstack Joins Lambda School for New Platform to Teach App Coding

Blockstack Joins Lambda School for New Platform to Teach App Coding

Blockstack announces collaboration with Lambda School to teach dApp coding

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Privacy-centric computing network and app ecosystem Blockstack has announced a partnership with Lambda School. Students enrolled in the program can reportedly now learn how to code Blockstack apps and earn monthly revenue through its App Mining Program.

Gain the skills to pay the bills

According to a press release shared with Cointelegraph on August 12, Lambda is a skills-based online school with a curriculum designed around the requirements of employers. This reportedly ensures that graduates master all the skills required to succeed. In addition, it offers tuition at no cost until the student is hired, thus removing barriers to high-paying careers.

According to CEO Austen Allred, the partnership with Blockstack “gives Lambda School students a direct path for gaining real-world development experience while earning additional income for their work.“

Not just about the money

As Blockstack CEO Muneeb Ali reportedly said, “this is the sort of program I wish was available to me when I was a student.” The App Mining Program is advertised as giving students the support to take their apps into the real world. 

Blockstack also plans to supply a range of tools needed for quality control. Each student-developed, decentralised app will be subject to reviews and comprehensive user-testing videos. They will also benefit from a guided launch on Product Hunt, and marketing insights through awareness reviewer, Awario.

As CoinTelegraph reported, last month Blockstack gained SEC approval for its $28 million public token offering. This is the first SEC-sanctioned offering under Regulation A+, which will offer a token rather than a share.


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Blockstack announces collaboration with Lambda School to teach dApp coding

US SEC Approves Blockstack Token Offering Under Regulation A+

US SEC Approves Blockstack Token Offering Under Regulation A+

Blockstack is slated to be the first cryptocurrency startup to use Regulation A+ to conduct a public offering of its utility tokens, following approval from the SEC

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The United States Securities and Exchange Commission (SEC) has given blockchain-based startup Blockstack the go-ahead to run a $28 million public token offering under Regulation A+, according to a report by The Wall Street Journal (WSJ) on June 10.

Blockstack will reportedly launch its token offering online tomorrow, July 11. While other firms have previously taken advantage of Regulation A+ funding, this marks the first time that investors will receive a token, rather than shares in the company.

Regulation A+ is an initial public offering (IPO) alternative geared towards startups in need of early funding. Regulation A+ funding was introduced in 2012 via the “Jumpstart Our Business Startups Act.” As the report says, any member of the public can partake in a Regulation A+ funding round.

While Regulation A+ has more lenient disclosure obligations than as with an IPO, it has two tiers with hard caps on raised funds, maxing out at $50 million within a 12-month period.

This is possibly a precedent-setting moment for the crypto space, as per the report. Initial coin offerings (ICOs) have been on the decline. Crypto firms raised billions of dollars through ICOs until the SEC began an ongoing crackdown in the name of investor-protection laws, as per the report. The report cites research from TokenData, which apparently shows that ICO funding dropped from $6.9 billion in Q1 2018 to $118 million in Q1 2019.

Blockstack founders Muneeb Ali and Ryan Shea reportedly spent 10 months and approximately $2 million to gain approval from the SEC. Ali apparently said that Blockstack had to develop a protocol for running what is essentially a regulated ICO through Regulation A+ from the ground up. As previously reported by Cointelegraph, Blockstart applied for SEC approval to run a $50 million token sale in April.

As the report says, some blockchain-based startups have conducted token sales under SEC Regulation D, including Blockstart. Unlike Regulation A+ sales, Regulation D sales do not require SEC approval; however, they are limited only to accredited investors, i.e. companies that hold a minimum of $5 million in assets and $1 million in its figures’ cumulative net worth.  Blockstart reportedly received $47 million through Regulation D funding in 2017, along with an additional $5 million from venture-capital funding.

According to the WSJ, a crypto-based startup YouNow Inc. has also has filed for a Regulation A+ funding round.

As previously reported by Cointelegraph, major traditional exchanges such as Nasdaq and the New York Stock Exchange have shied away from Regulation A+ IPOs due to recent events.


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Blockstack is slated to be the first cryptocurrency startup to use Regulation A+ to conduct a public offering of its utility tokens, following approval from the SEC