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Analysis: Cryptocurrency ethereum is flourishing but risks linger



A representation of virtual currency Ethereum is seen in front of a stock graph in this illustration taken February 19, 2021. REUTERS/Dado Ruvic/Illustration

Ethereum has outperformed major digital currency rivals this year, bolstered by the surge in decentralized finance (DeFi) and the anticipation of a technical adjustment this summer, but it faces hurdles that could stall its rise.

With a jump of more than 350% in its price this year, ethereum has the second-largest market capitalization after bitcoin, but not as much cache and perhaps more operational challenges that could prevent it from eclipsing its major rival.

In the crypto world, the terms “ethereum” and “ether” have become synonymous. Technically, ethereum is the blockchain network in which decentralized applications are embedded, while ether is the token or currency that enables or drives the use of these applications.

Ethereum’s market cap on Friday was $410 billion, second to bitcoin’s at more than $1 trillion, according to data tracker It hit a record high of $3,610.04 on Thursday and was last up 1% at $3,524.

Bitcoin, meanwhile, has risen a more modest 97% this year. Since hitting an all-time high of just under $65,000 in mid-April, bitcoin has actually fallen roughly 18%.

A rise in institutional interest has increased ethereum demand, but supply has been limited. The token’s supply in exchanges in April hit its lowest in nearly 2-1/2 years, according to Kraken Intelligence, a research blog from cryptocurrency exchange Kraken.

“It’s more than just a coin. It’s a whole ecosystem that allows other applications to be built,” said Bradley Kam, chief executive officer of blockchain domain provider, Unstoppable Domains.

At the heart of ethereum’s ascendancy is DeFi, which refers to peer-to-peer cryptocurrency platforms that facilitate lending outside traditional banking institutions. Many sites run on the ethereum network, using an open-source code with algorithms that set rates in real time based on supply and demand.

The value locked – the total number of loans on DeFi platforms – was $79 billion as of Friday, DeFi Pulse data showed, up nearly 600% from $11 billion in October.

DeFi, however, has its problems. Dune Analytics research showed 2%-5% of transactions on ethereum-based decentralized exchanges failed due to complications such as slippage or insufficient “gas” prices, which are the fees required to successfully conduct a transaction on the ethereum blockchain.

Between April 15 and April 21, for instance, roughly 1.1 million transactions were made on Uniswap, a DeFi protocol used for exchanging cryptocurrencies. Of those, 241,262 failed, representing the largest number of transaction failures across the entire ethereum network, data from analytics platform Etherscan and Dune Analytics showed.

“DeFi is destined for meteoric growth, but that growth inherently comes with risk,” said Alex Wearn, chief executive officer at crypto exchange IDEX.

“Issues such as failed transactions and front-running are not subtle, costing users millions of dollars every day,” he said, referring to the practice of getting a transaction first in line in the execution queue right before a known future contract. “These major … problems limit the appeal of these products for a wider audience and ultimately hinder the ecosystem’s growth.”

Wearn estimates that more than $285 million were lost in DeFi hacks so far this year.

Proponents say DeFi sites represent the future of financial services, providing a cheaper, more efficient and accessible way for people and companies to access and offer credit.


Ethereum has also been plagued by the network’s inability to scale to meet demand without incurring high transaction fees as well as slow execution of transactions, market participants said.

The first phase of an upgrade called Ethereum 2.0 launched last year is aimed at addressing the network’s tech issues on speed, efficiency, and scalability.

However, John Wu, president of AVA Labs, an open-source platform for financial applications, pointed out that the planned migration to Ethereum 2.0 has been in the works for years.

“The timelines have consistently been delayed, so it’s hard to feel comfortable with that unknown,” he said.

Ethereum also faces stiff competition from networks such as AVA Labs’ Avalanche and Binance Smart Chain, which are also compatible with ethereum’s assets and applications.

Data from AVA Labs showed users have transferred more than $170 million to Avalanche from ethereum since February.


Still, hopes of a technical adjustment called EIP (ethereum improvement proposal) 1559, which is expected to go live in July and is seen reducing the supply of ethereum, has provided a lift for the digital currency.

EIP-1559 aims to reduce the volatility of ethereum’s fees by introducing a mechanism to burn some of those transaction fees, which should slow the token’s issuance, analysts said.

The impact on ethereum’s price could be similar to a bitcoin halving event, in which an adjustment cut bitcoin’s supply and propelled its price to record highs, analysts said.

“There’s a lot of numbers going around the market about the potential impact that has like a halving-type magnitude with bitcoin,” said Richard Galvin, co-founder and chief executive officer of crypto fund Digital Asset Capital Management.

“They’re all pretty positive drivers that have, I guess, seen a pretty strong revaluing.”

Our Standards: The Thomson Reuters Trust Principles.


Opinion | Trump’s effort to thwart the Jan. 6 committee probe takes an ominous turn as Jeffrey Clark faces contempt



As it is, the executive privilege debate raises important questions. Biden, as sitting president, has declined Trump’s requests for its invocation. Yet Trump insists he can assert it as a former president, to keep buried information to thwart an inquiry — into an effort to disrupt a presidential election’s conclusion — that is obviously very much in the national interest.

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Blanket travel bans will not prevent spread of Omicron variant of Covid-19: World Health Organization



Passengers wait to get tested at an airport in South Africa, the country where the Omicron variant of Covid-19 was first detected.

Passengers wait to get tested at an airport in South Africa, the country where the Omicron variant of Covid-19 was first detected.&nbsp | &nbspPhoto Credit:&nbspReuters

Key Highlights

  • More than a dozen countries have reported cases of the new variant, which reportedly is even resistant to anti-Covid vaccines

  • Around 56 countries have supposedly re-imposed stricter travel measures, including India

Geneva: With the new, highly-contagious variant of the SARS-CoV-2 virus – Omicron – spreading across the world, several countries have started imposing stricter travel guidelines in order to check the spread of the virus.

But, the World Health Organization on Tuesday warned that blanket travel bans will not prevent the spread of the Omicron strain, despite the global health watchdog classifying it as a ‘variant of concern’.

“Blanket travel bans will not prevent the international spread, and they place a heavy burden on lives and livelihoods. In addition, they can adversely impact global health efforts during a pandemic by disincentivizing countries to report and share epidemiological and sequencing data,” the WHO said in its travel advisory statement.

The WHO further said that countries should rather apply “an evidence-informed and risk-based approach” while imposing travel restrictions in the backdrop of the Omicron variant, such as screening or quarantine of international passengers.

“Measures may include screening of passengers prior to travel and/or upon arrival, and use of SARS-COV-2 testing or quarantine of international travellers after thorough risk assessment,” it said.

More than a dozen countries have reported cases of the new variant, which reportedly is even resistant to anti-Covid vaccines.

Around 56 countries have supposedly re-imposed stricter travel measures, including India.

The Indian government today advised all states and Union Territories to enhance testing and undertake effective surveillance of international travellers, adding that the new variant does not escape the RT-PCR and RAT tests. India has also extended the nationwide Covid-19 containment measures till December 31, though Union Health Minister Mansukh Mandaviya said that there are no cases of Omicron in the country so far.

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Iranian terror plot must make West end its appeasement of murderous regime in Tehran – Struan Stevenson



Newt Gingrich speaks at the Free Iran 2018 – the Alternative event held in Villepinte, north of Paris, in 2018. (Picture: Zakaria Abdelkafi /AFP via Getty Images)

This is not some Hollywood fantasy, but reality. A Belgian court has just passed sentence on four Iranians who were involved in a plot to kill and maim hundreds of people at a rally of the National Council of Resistance of Iran at Villepinte near Paris in June 2018.

There were dozens of Americans and Europeans at the rally, including well-known politicians like Newt Gingrich, ex-speaker of the US House, Theresa Villiers MP, a former UK Cabinet minister, and Stephen Harper, former Prime Minister of Canada. I was there myself and was a plaintiff at the trial in Antwerp on Thursday, sending recorded evidence.

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Assadollah Assadi was a senior diplomat from the Iranian Embassy in Vienna. He was arrested by police in Germany after being filmed handing over a powerful explosive device and detonator to two Iranian co-conspirators, Amir Saadouni, 40, and his wife Nasimeh Naami, 36. A third co-conspirator, Mehrdad Arefani, was present at the Villepinte rally as a lookout.

Although all three lived in Belgium as registered refugees, they were in fact trained Iranian agents. Assadi had told them to detonate the bomb as close to Iranian opposition leader Maryam Rajavi as possible.

That is where I was standing, with all of the other political figures. The court heard Assadi had told his co-conspirators that if they couldn’t get close enough to Mrs Rajavi, they should simply throw the bomb into the crowd and detonate it.

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Iran’s fascist dictatorship boasts of its ‘different’ human rights as the execut…

Heavy security

Front row from left: Former Canadian foreign minister John Baird, retired Canadian politician Stephen Joseph, Colombian-French politician Ingrid Betancourt, leader of the People’s Mujahedin of Iran Maryam Rajavi, former US mayor of New York City and attorney to President Donald Trump, Rudolph Giuliani, and former US Speaker of the House Newt Gingrich could all have been killed, along with Struan Stevenson and others, if the bomb plot had succeeded (Picture: Zakaria Abdelkafi/AFP via Getty Images)

The courthouse was surrounded by Iranian opposition supporters and heavily guarded by armed police and military personnel. Helicopters hovered overhead.

The public were prohibited from entering the court on security grounds as the judges announced the maximum 20-year sentence on Assadi for terrorist offences. Naami was sentenced to 18 years, her husband Saadouni to 15 years and the lookout Arefani to 17 years.

The jail terms mark the culmination of an unprecedented trial of an accredited diplomat. Assadi refused to testify or attend court, claiming diplomatic immunity, which was rejected by the judges and has now, following his conviction, been revoked. His co-conspirators have been stripped of Belgian citizenship and will be deported after serving their sentences.

The court case comes as no surprise to those of us familiar with the Iranian regime. The mullahs have a history of deploying their assassins in the guise of diplomats and using their embassies as bomb factories.

In 2018, Albanian Prime Minister Edi Rama expelled the Iranian ambassador and his first secretary on the grounds they posed a risk to security. Once again these ‘so-called’ diplomats were revealed as trained Ministry of Intelligence and Security (Mois) agents who had been plotting bomb attacks and assassinations of the regime’s opponents.

Since seizing power in the 1979 revolution, the theocratic regime has ruthlessly bombed and shot its opponents around the globe, while torturing and executing political prisoners at home. But this is the first time a diplomat has been caught red-handed and jailed for acts of terror.

Lies and propaganda

The Antwerp court’s verdict must surely mark a turning point in relations with Tehran. There can be no return to business as usual. There can be no more arguments that diplomacy is the answer.

Indeed, on January 19, an Iranian-American, Kaveh Lotfolah Afrasiabi, appeared in a US federal court, 13 years after he allegedly began taking payments from the Iranian regime while presenting himself as an independent expert on foreign relations and political science.

Court documents state that he was paid at least $265,000 for his service to Iran’s theocratic dictatorship, before finally being arrested by the FBI and charged with extensive violation of the Foreign Agents Registration Act. [Mr Afrasiabi denies the charges*].

The mullahs’ regime has embedded agents around the world, feeding lies and propaganda to the media and to policy-makers.

The arch-criminal and Supreme Leader of the mullahs is Ayatollah Ali Khamenei. There can be no doubt that he, together with his senior ministers, president Hassan Rouhani, foreign minister Javad Zarif and minister of intelligence Mahmoud Alavi, ordered the spying, the bomb plots and the assassinations.

Khamenei is praying that President Joe Biden will quickly restore Barack Obama’s deeply flawed Joint Comprehensive Plan of Action, the nuclear deal that was unceremoniously dumped by Donald Trump.

He is praying the US will lift the sanctions which prevented Iran from selling oil, crippling its economy. Biden has repeatedly confirmed this is one of his foreign-policy priorities. It will be a grave mistake.

Crimes against humanity

Biden need not think that lifting sanctions will put food back on the table for impoverished Iranians. In fact, it will enable Khamenei to reinforce his funding of Bashar al-Assad’s bloody civil war in Syria, the Houthi rebels in Yemen, the brutal Shi’ia militias in Iraq and the terrorist Hezbollah in Lebanon. It will also enable the mullahs to accelerate their development of a nuclear weapon and ballistic missile delivery systems, which has never ceased.

It is time for a complete change of direction in US, EU and UN policy towards Iran. The people of Iran expect the West to be on their side.

They expect their calls for democracy to be taken seriously. The appeasement policy, lamely followed by the EU, is dead in the water.

Now, following the Antwerp trial, the EU will have to reassess completely its relationship with Iran. The EU’s top diplomat, Josep Borrell, must recall his ambassador from Tehran and every Western nation should follow suit.

Any country that seeks to use terror as statecraft should be debarred from civilised assemblies and held to account in the international courts of justice, their leaders indicted for crimes against humanity.

Struan Stevenson is the coordinator of the Campaign for Iran Change, an international lecturer on the Middle East and president of the European Iraqi Freedom Association

*An editor’s note has been added to this article to state that Kaveh Lotfolah Afrasiabi denies the charges against him

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