David Angliss, an analyst with Australia’s leading cryptocurrency investment firm, Apollo Capital, shares the fund’s weekly take on what’s happening in the fast-changing and volatile cryptocurrency space.
A crypto lending project called the Maker DAO, launched in 2017, was one of the first decentralised finance (DeFi) projects.
It allows users to get under-collaterialised loans from their Ethereum by locking it up in a smart contract that mints a stablecoin called Dai that’s pegged to the US dollar.
For those not familiar with the project, it’s a bit like taking one’s crypto to a pawn shop and getting a loan for it. If your Ethereum increases in value, you’ve retained the upside to your stack.
If Ethereum crashes below a certain collateralisation level, eventually your Ethereum holdings are liquidated to cover your debt — but at least you get to keep your Dai stablecoins.
It’s a clever way for crypto users to cash out a portion of their holdings, and one that in many jurisdictions, wouldn’t involve tax implications unless their collateral is liquidated.
Now a new crypto-project is taking this idea one step further, allowing users to use their crypto to mint stablecoins pegged to various local currencies, rather than just the US dollar.
Handle Finance held a token sale last week that raised 6,103 Ether ($US17 million) in just 18 hours.
and we’re done #troopers
***$FOREX TGE closed***
*18 hours (42% of max duration)
*~$17,088,400 contributed (6103 ETH)
*x4.2 max oversubscription acheived
— handle.fi (42,🦍) (@handle_fi) September 21, 2021
“We got a little allocation in this, in our primary deals,” David Angliss told Stockhead on Thursday, explaining that meant Apollo invested in the seed round before the token-generating event for the community.
Other institutional investors in the project include Animoca Brands, DeFi Capital, OKEx Blockdream Ventures, Coinlist, and a number of other names.
“We’re bullish on this space as well, this is a different sector of DeFi, it’s essentially forex,” Angliss says.
The project will initially allow users to mint “fxtokens” pegged to the Aussie dollar, Japanese yen, Korean won, Chinese Renminbi and Singapore dollar, with more currencies to follow.
It is set to go live on the Ethereum scaling solution Arbitrum One once an audit is complete.
Users will be able to stake their fxtokens across other platforms, earning Handle’s FOREX token in exchange for providing liquidity to those pools.
Handle notes that much of the DeFi ecosystem revolves around stablecoins pegged to the US dollar, with “very little exploration or issuance of other representative decentralised stablecoin currencies.
“Many defi participants wish to gain access to alternate currency exposure for hedging, speculation, and maybe even for payments.”
Handle’s FOREX token will begin trading today (Monday) at 2pm AEST on Gate.io and decentralised platforms.
The project’s name is taken from foreign exchange trading, Angliss adds. “The handle” in forex refers to the digits in a price quote that appear in both the bid and the ask price.
The views, information, or opinions expressed in the interview in this article are solely those of the interviewee and do not represent the views of Stockhead.
Stockhead has not provided, endorsed or otherwise assumed responsibility for any financial product advice contained in this article.