🇧🇷Brazil Crypto Report #31: The Amazing Race 🏎 DeFi ETF Edition
Bom dia 👋 and welcome to 🇧🇷 Brazil Crypto Report for the week of Feb 7-Feb 11, 2022.
The competition is heating up among Brazil’s leading crypto asset management firms. For the last year, Hashdex and QR Capital have been neck-and-neck of launching exchanged-traded product on Brazil’s B3 exchange for retail investors, with Hashdex holding the lead due to the success of its HASH11 ETF, which invests in a basket of different cryptos.
Hashdex looked set to expand its lead further last month when it announced its forthcoming ETF focused on DeFi tokens - the first in the world, which will go live this Thursday, February 17.
However, QR was able to direct list its own DeFi ETF last Tuesday on the B3, thus grabbing claim to the world’s first DeFi ETF. The direct listing route is a cheaper, more expedient means of getting such a product to market, and in this case it appears QR was able to use it to successfully front run the competition.
QDFI11, as the QR product is known, tracks the Bloomberg Galaxy DeFi Index - which is comprised of nine DeFi protocol tokens: Uniswap (UNI), Aave (AAVE), MakerDAO (MKR), Compound (COMP), Yearn.finance (YFI), SushiSwap (SUSHI), 0X (ZRX), Synthetix (SNX) and Curve (CRV). It was listed at a price of R$10 and carries an 0.9% annual administration fee. (Valor Investe) (CoinDesk) (Exame) (InfoMoney)
Ultimately, whichever firm launched their respective product first is irrelevant, as this is a rising tide that lifts all boats. The total number of listed ETFs in Brazil will hit seven once the Hashdex ETF launches on Thursday. For those of you keeping track, that’s seven more than we have here in the United States (I exclude the ridiculous bitcoin futures ETFs that launched in Q4 of last year).
Not all are convinced, however, that DeFi is a good area to passively invest in given that the primary utility of DeFi tokens is their governance function (ie the right to vote on decisions like development roadmaps, fees, functionality, etc.). This function cannot be utilized if the investor does not hold the private key to the tokens. Another benefit of these tokens is the ability to earn yield either by staking them or depositing them into a liquidity pool which, again cannot be done directly if the tokens are not being held in the investor’s wallet (yes there are third party providers that offer these services for a fee but that is a different conversation).
Até mais and we’ll see you in the news review!
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If you’re new here, the meta-thesis for this publication is that Brazil - with a population of 214 million and a US$1.8tn economy - is the most overlooked crypto market in the world. The objective is to highlight the important news and provide useful context for the English-speaking audience.
💣 Trending Cryptos in Brazil
The most popular cryptos in Brazil as of February 14 are Bomber Coin, Smooth Love Potion and Space Crypto, per data provider CoinGecko. Notably, CryptoCars and CryptoPlanes still populate the Top 10 list despite the rug pulls we highlighted in previous weeks.
👩💻Brazil Crypto Hiring Spotlight
Valor Economico ran a story highlighting the hiring efforts of crypto operators in the country and the hurdles they face when procuring talent. The article is paywalled but CoinTelegraph Brasil published a summary here.
Ripple is hiring for a Senior Policy Manager, LatAm based out of São Paulo to monitor regulatory developments in the region and help educate policymakers, central banks, and customers.
Crypto.com added a few roles to its Brazil job board, beyond what we highlighted here a couple of weeks ago. These include Sales Trader, OTC Desk, Performance Marketing Analyst/Growth Analyst and CRM Specialist.
Blockchain Academy and Gama Academy are launching a free Ethereum development course for lower-income students. The course, called Crypto DEV, will be for people aged 19-24 from socially vulnerable areas in Rio de Janeiro, Recife and São Paulo. 170 scholarships will be provided to the program, and students who complete the program will be able to compete for job openings at Mercado Bitcoin and elsewhere. (Portal do Bitcoin)
Asset tokenization platform Liqi hired three new executives - Marcelo Teixeria de Freitas as CFO, Gustavo Mariotto as CMO and Cláudia Maria Novo de Azevedo Antunes as Head of New Business. The hires come fresh after a R$27.5m (US$5.2m) Series A raise by the company.
🗞Brazil Crypto News Rundown 🗞
Binance registered the highest organic search rate ever recorded on Cointrader Monitor for the month of January. The metric assesses the demand for exchanges through statistical analysis of user clicks on its website.
XP Investimentos, one of the largest brokerages in Latam, has registered a trademark for a new cryptocurrency exchange in Brazil, apparently confirming XP’s rumored plans to launch a crypto exchange. Per the filing, XTAGE - the name of the exchange, will be linked to digital currency services, cryptocurrency services, virtual currency services, digital currency wallet services and storage services and coin trading services. (CoinTelegraph Brasil) (Livecoins)
Brazilians traded R$64.3bn (US$12.2bn) worth of bitcoin in 2021, up 73% from the prior year, per data from Receita Federal, Brazil’s tax authority. (InfoMoney)
Mercado Bitcoin listed five new metaverse and DeFi coins: Gods Unchained (GODS), Bluzelle (BLZ), Superfarm (SUPER) and Mirror Protocol (MIR). (Portal do Bitcoin)
Gustavo Cunha wrote a nice column in InfoMoney explaining two financial concepts that are unique to crypto: future perpetuals and impermanent loss.
Binance has enabled eight new coins to be purchased by Brazilians using an international credit card. Such transactions will be subject to IOF - Brazil’s tax on financial transactions. (Portal do Bitcoin)
BitcoinToYou, one of Brazil’s largest exchanges, announced the listing of 10 new coins including Baby Doge, Decentraland, GALA and other metaverse-linked tokens. (CoinTelegraph Brasil)
Osten Moove, a Brazilian startup accelerator, will invest R$100m (US$19m) this year into blockchain, artificial intelligence and deep learning startups. (CoinTelegraph Brasil)
US$19.5bn in venture capital was invested in Latin America startups in 2021, with Brazil checking in as the most attractive country. The figure is triple the amount deployed in 2020 and makes Latam the fastest growing region in the world for startup investing, according to a survey by Crunchbase and written up by InfoMoney
Foxbit will list Shiba Inu on February 16. (BeinCrypto)
Botafogo will launch its own fan token and NFTs via a partnership with Bitci, a Turkish exchange that is ramping up its Brazil operations aggressively. The Rio de Janeiro-based football club will feature the Bitci logo on its jerseys and expects to raise R$5m (US$950k) in revenue through the sponsorship. (CoinTelegraph Brasil)
Banco Inter is now blocking Pix transactions to Binance, according to numerous disgruntled customers who have aired their grievances on YouTube and social media. Financial institutions in other parts of the world have also blocked customers from transacting on Binance, such as Santander in the UK. In response, many users are utilizing digital bank alternatives like Capitual. (Portal do Bitcoin) (CoinTelegraph Brasil) (Livecoins)
A growing number of Nubank users are reporting that they are unable to send funds to Binance. Nubank posted a response to the concerns stating that the company does not have specific guidelines to block transactions on cryptocurrency exchanges and claimed the purchases were denied for security reasons. (CoinTelegraph Brasil)
Holders of the Cruzeiro token, issued by Liqi, will receive another R$500k payout pursuant to the sale of two players’ rights: Éderson - who plays for Corinthians currently - will be sold to Italy’s Salernitana, and Fabrício Bruno, who was sold to Flamengo. Token holders are also scheduled to receive R$500k from the sale of defender Murilo Cerqueira to Palmeiras. (CoinTelegraph Brasil) (Valor Investe)
Mercado Bitcoin and Gorila, an online investment platform with more than 500,000 retail investors and 100 investment offices as customers, announced a partnership to provide discounts, cashback and other benefits to joint customers. (CoinTelegraph Brasil)
Binance is giving away free tickets to Campeonato Paulista games featuring São Paulo, Santos and Corinthians. To qualify for the promotion, customers must have gone through KYC on Binance, follow Binance on social media and take other actions. (CoinTelegraph Brasil)
Vitacon, one of the largest real estate developers in Brazil, is partnering with the startup Housi to launch a “cashback token” that will be given to customers who buy units of a new development in São Paulo. The utility token will be tradable and confer certain benefits on holders, like discounts on operating expenses. (CoinTelegraph Brasil) (Exame)
Blockchain projects that intend to help the Amazon can receive up to R$30m (US$5.7m) as part of a program to encourage the use of disruptive technologies to improve the region’s bioeconomy. The initiative was announced at an event by Suframa, the organization that manages the Manaus Free Trade Zone. Marcos Pontes, Brazil’s Minister of Science, Technology and Innovation, closed the event stating:
“President Bolsonaro talks a lot about the Amazon and it's not for nothing. It's a gigantic potential. Now we need to turn this into an invoice, into jobs. And we are going to do that by launching systems and public notices like this one, investing in biotechnology companies, in researchers who work in difficult conditions in the middle of the Amazon and improving these conditions to seek more and more results” (Livecoins)
Ankr Protocol and Maxihost, a Brazilian co-location company, announced an agreement to use Maxihost servers to run nodes of popular blockchains like Ethereum, Binance Smart Chain, Fantom, Polkadot, etc in Brazil. Josh Neuroth, head of product at Ankr, commented:
“Web3 adoption is growing sharply globally and Ankr now processes more than 200 billion requests per month on its blockchain. To keep growing, we need performance that only dedicated servers customized for our business can deliver. These nodes need to be close to DeFi users. Partnering with Maxihost helps us achieve this goal, especially in Latin America, a region that is constantly growing in demand for nodes. (CoinTelegraph Brasil)
Brazilians declared R$200m (US$38m) worth of cryptocurrency transactions in 2021 to the Receita Federal, the country’s tax authority. The figure is more than double the R$91.4m (US$17m) declared in 2020. The number of unique individuals declaring this income also more than doubled to 76,021 in 2021, up from 37,287 the prior year. (Livecoins)
54% of Brazilians aged 18 and 35 use a digital bank as their primary financial institution, according to a new survey by Mambu, a cloud banking technology company. Among Brazilians of lower socioeconomic status, that number jumps to 61%. (BeinCrypto)
🎮 NFTs, Gaming and Metaverse
Itaú is launching a metaverse-focused investment product that promises to return all invested funds if it does not turn a profit. Claudio Sanches, director of investment and pension products at Itaú Unibanco, commented:
“We are at an opportune market moment for companies that are already prepared to offer solutions in the metaverse environment. Our [product] is a good entry point for anyone willing to diversify investments in this new segment.” (CoinTelegraph Brasil) (Beincrypto)
A project called Cryga looks to bring physical and virtual works of famous Brazilian artists to the blockchain. (CoinTelegraph Brasil)
🏛 Public Policy and Enforcement
Pix data leaks will happen “sometimes”, but the customer data - such as CPF numbers, cellphone numbers and email addresses - isn’t overly sensitive, said Banco Central president Roberto Campos Neto. He explained:
"It's important to understand that data leaks from Pix are not relevant in the sense that it's data that isn't that sensitive." (CoinTelegraph Brasil)
Mirelis Zerpa, the Venezuelan wife of GAS Consultoria operator Glaidson Acacio dos Santos, transferred 10 bitcoins to her sister in December via Binance, investigators have discovered. In doing so, she was able to circumvent a local court order freezing GAS assets and financial accounts. Zerpa has been at large since August and is on Interpol’s wanted list. (CoinTelegraph Brasil)
Three civil police officers in Goiás were arrested after kidnapping and threatening a tourist at gunpoint outside his hotel and forcing him to transfer 4.5 bitcoins. The incident occurred in Alto Paraíso de Goiás, in Chapada dos Veadeiros. The victim, reportedly a businessman operating in the casino industry abroad who has reportedly been involved in multiple cryptocurrency pyramid schemes in Brazil since 2017, claimed the thieves threatened to kill him and showed him a photos of family and friends whom would also be targeted if he did not pay. (Portal do Bitcoin) (CoinTelegraph Brasil)
The Universal Church of the Kingdom of God, known colloquially as Universal, had R$1m (US$190k) blocked from its accounts after a court decision involving lawsuits filed by three GAS Consultoria clients. GAS allegedly donated R$72m (US$13.7m) to Universal between May 2020 and July 2021. (CriptoFacil)
An apparent pyramid scheme in Santa Catarina has ceased customer withdrawals, blaming “a third party” for the problem. Lifetycon, operating out of São Miguel do Oeste, promised returns of 5% per month through “investment in cryptocurrencies". (Portal do Bitcoin)
The Instagram account of a 7 year-old Brazilian boy with a rare disease was compromised by a hacker who has promised to return the account upon payment of US$50 in bitcoin by the boy’s family. (Portal do Bitcoin)
A trial is being postponed in the case of Minerworld, an alleged bitcoin pyramid scheme that is being sued collectively by 50,000 victims in Mato Grosso do Sul. The scheme resulted in losses of R$300m (US$57m). Minerworld was led by Cicero Saad and reportedly promised profits of 100% within a year, with many individuals investing R$100k under those premises. (CoinTelegraph Brasil)