Venezuelan President Announces Official Launch of Oil-Backed Cryptocurrency “Petro”

This week, Venezuelan president Nicolas Maduro gave a televised speech to announce the official launch of the “Petro,” which is the first government issued cryptocurrency in the world.

Maduro said that the official public sale will start on November 5th, but that six major exchanges would be listing the Petro this week. However, the Petro is still not listed on CoinMarketCap, CryptoCompare, or any other major exchange.

Maduro also revealed the official website for the Petro has already been launched, as well as mobile wallets for the cryptocurrency, which are already available at Google Play.

Questions About the Petro

The government of Venezuela insists that the Petro will be backed by oil, which if true, could prevent the government from excessively printing money and devaluing the currency, a policy which has caused the current economic crisis in the country.

Petro’s recently released whitepaper specifies that the currency is backed by a portfolio of Oil, Gold and Diamonds. Although, it is important to note that the public has lost significant trust in the Venezuelan government and its central bank as a result of the hyperinflation crisis, and the sloppy roll-out of the Petro.

Initially, Madura promised that the Petro would be ready for full use by August, which included point of sale payments in grocery stores and other local merchants. Now, it seems that the Petro is far from ready for mainstream use in Venezuela.

Madura says that all oil purchases in and out of the country will be paid in Petro, which could be where the most popular use case for this blockchain. Venezuela is one of the world’s top exporters of oil, so if they were able to require foreign buyers to trade with them in Petro, it could turn this crypto into a valuable asset.

However, the Petro is not expected to be welcomed by most Venezuelans, who are already becoming more comfortable with using decentralized alternatives, such as bitcoin, monero, bitcoin cash and dash. Last month, Business Insider reported that dash is especially popular for point of sale transactions in the country.

Dash Core's CEO, Ryan Taylor, told Cointelegraph that areas dealing with economic turmoil can gain the most benefit from crypto. Taylor said:

We’ve found that regions of high inflation rates and industries in which cash handling or credit card chargeback rates are high have been most excited to adopt the technology. For us, we focus on those segments in which cryptocurrency can offer the most benefit, and that’s one of the reasons growth in acceptance is so high.

Ironically enough, Ethereum developer Joey Zhou pointed out that this week that the whitepaper for the Petro seems in fact to be a “blatant Dash clone.”

 

 

Binance ‘Unknowingly’ Earns $775K via Staking, Set to Launch Huge XLM Giveaway

On Thursday (July 18), Binance, the world's largest cryptoasset exchange (by adjusted trading volume), made a rather interesting announcement: it had "unknowingly" earned 9.5 million Stellar Lumen (XLM) tokens through staking rewards, and it is going to give all of it away to all Binance users who maintain XLM balances between July 20 and September 1.

Binance explained via a blog post that in August 2018 the Binance team followed the advice of the Stellar Development Foundation "to change some parameters on both cold and hot wallets," which resulted in the exchange "unknowingly" earning staking rewards for its XLM holdings since 31 August 2018.

Then, this week, while the Binance team was considering the idea of adding support for XLM staking, it found out that Binance had earned around 9.5 million XLM tokens (each of which was worth approximately $0.08157 at the time). Binance notes that all "weekly staking rewards between then and now are documented on the blockchain." 

So, the team made two decisions:

  • add support for XLM staking to Binance.com; and
  • give away the aforementioned staking rewards to the Binance community (i.e. Binance users).

This is not the first time that Binance has added staking support to Binance.com. The exchange already "distributes NeoGas for NEO holders, Ontology Gas for Ontology holders, VTHO for VeChain holders, and BitTorrent tokens for TRON tokens."

Here is how this 9.5 million XLM giveaway is going to happen.

From July 20, Binance will support XLM staking. Between this date and September 1, Binance will take "daily snapshots" of XLM balances in Binance user accounts.

Then, on September 1, Binance will "tally average user XLM balances based on these snapshots," and process the distribution of staking rewards to these user accounts (that maintained XLM balances during the staking period). Furthermore, the roughly 9.5 million XLM tokens that Binance has unknowingly earned to date will be distributed as a bonus payment to all Binance users who jave maintained non-zero XLM balances since July 20. 

Binance says in its blog post that it estimates this "one-time distribution of 9,500,000 XLM shared proportionately among Binance users" to be worth "10 to 12 months of typical monthly rewards."

According to a support article published on July 18, here are the details of Binance's "Monthly XLM Staking Airdrop Program":

  • Binance will start these daily XLM balance snapshots at 00:00 (UTC) on 20 July 2019.
  • This is how Binance will calculate the XLM staking distribution:

XLM generated by each user = Total XLM staking rewards received by Binance * User XLM holdings ratio. User XLM holdings ratio = User XLM holdings / Total XLM staked by Binance.

  •  In order to qualify for XLM staking rewards, Binance users must have a balance of at least 10 XLM.
  • This initial distribution of XLM staking rewards will be calculated until 1 September 2019, "with the total amount distributed equal to the staking rewards accrued on holdings during the 43 day period."
  • These XLM staking rewards are calculated on a daily basis and are distributed monthly. 
  • XLM distrubutions will be "completed before the 5th of each month."

In other Binance news, another support article explained that Binance's Margin Trading platform has added support for two margin assets (EOS and LINK), three borrowable assets (BNB, EOS, and LINK), and three margin pairs (EOS/USDT, EOS/BTC, LINK/USDT, LINKBTC).

Binance's announcement about its 9.5 million XLM giveaway may have helped the XLM price. According to CryptoCompare, XLM is currently trading at $0.08914, up 7.96% in the past 24-hour period:

XLM-USD 24-Hour Chart on 18 July 2019.png

Featured Image Courtesy of Binance