Liquidity and Etoro

hey everyone this is Charles hoskinson broadcasting live from warm sunny Colorado I always warm Always Sunny sometimes Colorado today is November 23rd 2021 I got a Bob Ross right here so he's got his little paint Diesel and it's got a little brush you can beat the devil out of it someone gave this to me when I was over in Tennessee went there briefly for a family related issue anyway point of this video is just talk about a news item that hit me I don't know like 10-15 minutes ago I just noticed that there's been some limitation of ADA and Tron liquidity at a mid-size exchange called etoro and it's a developing story I had no idea that anything was coming this way and the reason being is that I O does not handle liquidity and exchange listing for cryptocurrencies that's done by the Cardinal foundation and it's important people direct queries to them but it's important to talk about in general the regulatory reality that cryptocurrencies are facing and and the consequences is the systemic lack of clarity is having on the industry so first off there are no liquidity problems you gain some you lose some for example bit stamp just announced that they're listing Ada and it's a much larger exchange by volume volume than etoro is for cryptocurrencies especially in these trading pairs so some enter some leave but in general right now there is no Global regulatory standard on how to treat cryptocurrencies for example the most stringent and strict regulatory structure for cryptocurrencies at the moment most comprehensive is probably the nation of Japan and that's regulated by an entity called the FSA and there you have to go through an exhaustive process and the foundation working with the FSA I went through I think three different applications and over a half million pages of due diligence over a multi-year process to get Ada whitelisted in Japan and now it's trading there and more and more exchanges are taking it up and liquidity is improving that area coinbase was also a very difficult process from my understanding to go through and a lot of oversight there and there are of course active conversations with other U.S liquidity providers that said it's not really clear what is what for example in the United States there's currently a lawsuit against xrp where the U.S government is asserting that xrp is a security in Japan it's being created as a security as a currency and it's whitelisted and there's a lot of commercial activity of xrp in Japan as bi and others are big boosters in that ecosystem so despite the fact that liquidity is extremely Limited in the U.S Ripple is still in the top ten has a lot of trading so the best you can do in these things is navigate this on a case-by-case basis on an exchange by exchange basis [Music] I would hope that the foundation publishes a coherent document explaining how they go about this process and what they do we work with them on a technical basis so when there are technical questions about cardano when there are things that need to be done the Rosetta interfaces or the graphql interfaces or the deprecated rest apis we do that we certainly answer a lot of questions from exchanges and then for certain large exchanges we actually permit them access to our internal developer slack so they can directly interact with developers when they have requests like utxo fragmentation concerns or other such things on our side we had no indication of this from etoro and it's rather unfortunate that nothing was sent our way because we at least could have better understood their reasons and will of course reach out on our side to better understand reasons but it's primarily the foundation's responsibility here it has no meaningful impact on the liquidity of ADA there's billions of dollars of turnaround every day or any other Factor it was a relatively small trading Market but this is just the nature of the game liquidity comes and goes some people it some people don't because they don't get enough volume or customer interest and then obviously everybody has different regulatory thresholds if you're a European entity with principal European customers you usually limit your U.S exposure because the cost of U.

S exposure is extremely high if you're a U.S native company under U.S regulation you're already paying that it's much easier to comply with those types of things and some people make these decisions on case-by-case basis Kraken for example used to be in Japan they're not anymore other in the U.S they're actually becoming a bank in the United States for a speedy Bank the only way we're going to solve this as an industry through regulatory Clarity so as mentioned there are two bills that are coming the little bill in the Big Bill in the United States which will serve as a reference point for the rest of the world and the little bill is going to try to undo the damage that was done by the infrastructure bill which is quite significant the big bill is going to try to for the first time ever in the history of our industry provide regulatory Clarity on everything from icos to stos to stake pools to asset definitions and apply some functional regulatory standards and I also my understanding of the text is it's going to attempt to create an SRO for cryptocurrencies in the United States similar to finra for example the largest financial SRO in the world so that and only that is going to resolve the situation not litigation not regulatory enforcement that's somehow sporadic not administrative changes where every time we go from one to the other it seems to have radically different viewpoints on how things are going to run and not regulatory Arbitrage where nation states compete against each other by having polar opposite regulation where some it's illegal in others it's not only accepted it's encouraged and endorsed by the government for example El Salvador as legitimized Bitcoin to the extent that it's the national National currency of the country whereas places like India it's still unclear if crypto is even legal or not Burundi crypto is currently illegal so these are examples of just a wide spectrum and array of things and that's the reality when you live in a global Marketplace and with global products they're treated very differently data for example if you're in Europe you're under gdpr if you're in Zambia you're not so this is just an example and so you have to have different policies and different things so my hope is the foundation will provide some clarity on this at the very least explain how they work with exchanges and what this looks like in that process and from our side we're of course going to look a little bit into what exactly the reasons were there's currently nothing we've received no regulatory event no subpoenas no nothing from any regulatory agency no threats of lawsuits none of these things that's why we're so blindsided by it because actually the trend has been over the last six months a significant increase in the amount of liquidity of cardano exchange after exchange and dexes are listing Ada on a pretty regular Cadence and this stamp was a deeply personal one for me because outside of Mount gox it was this Main Exchange that I used way back in the day when I was trading Bitcoin and so it was really nice to actually see it finally get there we tried when we were at ethereum really hard to discuss ethereum liquidity there and they were kind of holdouts they didn't like all coins too much back in the day but it's really amazing to see them open that up and again there's no issues on our side no lingering things or other things like that it's a complete surprise but it doesn't it doesn't surprise me from the perspective of these things happen everybody has a different compliance desk everybody has a different regulatory tolerance everybody has a different customer base and sometimes the cost of supporting something is higher than the profit that you make for it so you just kind of de-risk by removing people from certain areas or certain sets up but we'll find out more of course as time materializes and it again is important to understand that the foundation does have a role they do have a budget they do have people my understanding is they're going to hire staff up to almost 100 people this year this upcoming year in 2022 and a 25 million dollar budget is what they told me and big chunk of that budget is regulatory Outreach liquidity and so forth so I really I wait to see them talking about these types of things and what the overall strategy is in 2022 and how they're going to go and promote more liquidity and so forth but that's not our concern at i o we don't handle these things we we do the development the software we think a lot about the technology and our relationship with exchanges is strictly technical from that Viewpoint so it gets frustrating because at times we don't get answers in fact we find things that when you guys find things out but I figured I'd just make a quick video because unfortunately as I've mentioned in my prior videos we have noticed again and again and again and again and again a fear uncertainty and disinformation and people take something and they try to extrapolate something else from it for the purposes of damaging the price of ADA or boosting their own token or ecosystem so we now live in a situation where immediately when news is seen we have to immediately make a video or response to it or else it Cascades and there are days worth of damage we saw this for example with the concurrency see nothing burger that some very dishonest people in the crypto media and in the in the blog blogging and podcasting Elite tried to push through saying that cardano could only do one transaction per block not only is this a complete lie it's a total misunderstanding of how the extended utxo model works unfortunately because it took time to write content that narrative set in in certain circles and now if you actually go to an ethereum developer conference there's at least one person there who believes that who's a developer because the news percolated I even had musicians private messaging me over Twitter saying is this true this concurrency thing I heard something in LA or I heard something here this is crazy how much that propagated my spread so I fully expect to see a bunch of lies and misinformation and other things and podcasters and YouTubers speculating it's not a trend of anything significant it just seems an adjustment at the risk controls and policy of a particular European entity and liquidity got clipped there for U.S participants however another exchange which is larger right at the same time bitstamp listed data it's under the same regulatory structure as the others and they have U.

S customers so they seem to think there's no problem at all and then etor's hell data for a while the other one had to do the assessment today right here right now of whether that made sense or not so that's a much better indication of the current reality and Ada has more liquidity than almost every cryptocurrency in the space and again there's a custodial entity for the perspective of liquidity management and that's that's the foundation they wake up every day and talk to exchanges on a regular basis and maintain these relationships I meet weekly with the foundation usually every Monday I talk to Fred we talk about a variety of different things and I'll certainly be asking them this upcoming Monday about it and I hope they're a bit more proactive in their communication especially when they know these things although it looks they may have not been told this either and sometimes people do that they don't tell you much so that's all I have for you there and I hope this resolves some of the misinformation so there are no issues on our side we've never received any regulatory summons or subpoena or any of these things everything's fine cardano's fine liquidity is improving don't allow people to spread fear uncertainty and disinformation it's just an example of thousands of independent businesses making decisions for their businesses and some of those decisions are great for cardano and some of those decisions aren't so a bit stamp listing was great for us and it increases liquidity the Toro restricting U.