If you are not bullish in general on cryptocurrencies you have no place in investing or trading cryptocurrencies since it's always a losing proposition to trade in bubbles, a scientifically proven fact. If on the other hand you are then your goal is to grow your portfolio more than you would if holding BTC/ETH for example.
If I decide because the sky is blue to make my coin supply 100 Trillion FoolCoins with a price of $0.001 and there is another WiseCoin with a supply of 100 Million and price of $1 then FoolCoins are more expensive. - Alex Fin's Cap Law
What is Grayscale?Grayscale is the company that created the ETHE product. Their website is https://grayscale.co/
What is ETHE?ETHE is essentially a stock that intends to loosely track the price of ETH. It does so by having each ETHE be backed by a specific amount of ETH that is held on chain. Initially, the newly minted ETHE can only be purchased by institutions and accredited investors directly from Grayscale. Once a year has passed (6 months for GBTC) it can then be listed on the OTCQX Best Market exchange for secondary trading. Once listed on OTCQX, anyone investor can purchase at this point. Additional information on ETHE can be found here.
So ETHE is an ETF?No. For technical reasons beyond my personal understandings it is not labeled an ETF. I know it all flows back to the “Securities Act Rule 144”, but due to my limited knowledge on SEC regulations I don’t want to misspeak past that. If anyone is more knowledgeable on the subject I am happy to input their answer here.
How long has ETHE existed?ETHE was formed 12/14/2017. GBTC was formed 9/25/2013.
How is ETHE created?The trust will issue shares to “Authorized Participants” in groups of 100 shares (called baskets). Authorized Participants are the only persons that may place orders to create these baskets and they do it on behalf of the investor.
How does Grayscale acquire the ETH to collateralize the ETHE product?An Investor may acquire ETHE by paying in cash or exchanging ETH already owned.
Where does Grayscale store their ETH? Does it have a specific wallet address we can follow?ETH is stored with Coinbase Custody Trust Company, LLC. I am unaware of any specific address or set of addresses that can be used to verify the ETH is actually there.
Can ETHE be redeemed for ETH?No, currently there is no way to give your shares of ETHE back to Grayscale to receive ETH back. The only method of getting back into ETH would be to sell your ETHE to someone else and then use those proceeds to buy ETH yourself.
Why are they not redeeming shares?I think the report summarizes it best:
Redemptions of Shares are currently not permitted and the Trust is unable to redeem Shares. Subject to receipt of regulatory approval from the SEC and approval by the Sponsor in its sole discretion, the Trust may in the future operate a redemption program. Because the Trust does not believe that the SEC would, at this time, entertain an application for the waiver of rules needed in order to operate an ongoing redemption program, the Trust currently has no intention of seeking regulatory approval from the SEC to operate an ongoing redemption program.Source: Redemption Procedures on page 41 of the “Grayscale Ethereum Trust Annual Report (2019)” – Located Here
What is the fee structure?ETHE has an annual fee of 2.5%. GBTC has an annual fee of 2.0%. Fees are paid by selling the underlying ETH / BTC collateralizing the asset.
What is the ratio of ETH to ETHE?At the time of posting (6/19/2020) each ETHE share is backed by .09391605 ETH. Each share of GBTC is backed by .00096038 BTC.
Why is the ratio not 1:1? Why is it always decreasing?While I cannot say for certain why the initial distribution was not a 1:1 backing, it is more than likely to keep the price down and allow more investors a chance to purchase ETHE / GBTC.
I keep hearing about how this is locked supply… explain?As noted above, there is currently no redemption program for converting your ETHE back into ETH. This means that once an ETHE is issued, it will remain in circulation until a redemption program is formed --- something that doesn’t seem to be too urgent for the SEC or Grayscale at the moment. Tiny amounts will naturally be removed due to fees, but the bulk of the asset is in there for good.
The Trust’s ETH will be transferred out of the ETH Account only in the following circumstances: (i) transferred to pay the Sponsor’s Fee or any Additional Trust Expenses, (ii) distributed in connection with the redemption of Baskets (subject to the Trust’s obtaining regulatory approval from the SEC to operate an ongoing redemption program and the consent of the Sponsor), (iii) sold on an as-needed basis to pay Additional Trust Expenses or (iv) sold on behalf of the Trust in the event the Trust terminates and liquidates its assets or as otherwise required by law or regulation.Source: Description of Trust on page 31 of the “Grayscale Ethereum Trust Annual Report (2019)” – Located Here
Grayscale now owns a huge chunk of both ETH and BTC’s supply… should we be worried about manipulation, a sell off to crash the market crash, a staking cartel?First, it’s important to remember Grayscale is a lot more akin to an exchange then say an investment firm. Grayscale is working on behalf of its investors to create this product for investor control. Grayscale doesn’t ‘control’ the ETH it holds any more then Coinbase ‘controls’ the ETH in its hot wallet. (Note: There are likely some varying levels of control, but specific to this topic Grayscale cannot simply sell [legally, at least] the ETH by their own decision in the same manner Coinbase wouldn't be able to either.)
Yes, but what about [insert criminal act here]…Alright, yes. Technically nothing is stopping Grayscale from selling all the ETH / BTC and running off to the Bahamas (Hawaii?). BUT there is no real reason for them to do so. Barry is an extremely public figure and it won’t be easy for him to get away with that. Grayscale’s Bitcoin Trust creates SEC reports weekly / bi-weekly and I’m sure given the sentiment towards crypto is being watched carefully. Plus, Grayscale is making tons of consistent revenue and thus has little to no incentive to give that up for a quick buck.
That’s a lot of ‘happy little feels’ Bob, is there even an independent audit or is this Tether 2.0?Actually yes, an independent auditor report can be found in their annual reports. It is clearly aimed more towards the financial side and I doubt the auditors are crypto savants, but it is at least one extra set of eyes. Auditors are Friedman LLP – Auditor since 2015.
The company’s auditors Friedman LLP were also coincidentally TetheBitfinex’s auditors until They controversially parted ways in 2018 when the Tether controversy was at its height. I am not suggesting for one moment that there is anything shady about DCG - I just find it interesting it’s the same auditor.
“Grayscale sounds kind of lame” / “Not your keys not your crypto!” / “Why is anyone buying this, it sounds like a scam?”Welp, for starters this honestly is not really a product aimed at the people likely to be reading this post. To each their own, but do remember just because something provides no value to you doesn’t mean it can’t provide value to someone else. That said some of the advertised benefits are as follows:
Why is there a premium? Why is ETHE’s premium so insanely high compared to GBTC’s premium?There are a handful of theories of why a premium exists at all, some even mentioned in the annual report. The short list is as follows:
Are there any other differences between ETHE and GBTC?I touched on a few of the smaller differences, but one of the more interesting changes is GBTC is now a “SEC reporting company” as of January 2020. Which again goes beyond my scope of knowledge so I won’t comment on it too much… but the net result is GBTC is now putting out weekly / bi-weekly 8-K’s and annual 10-K’s. This means you can track GBTC that much easier at the moment as well as there is an extra layer of validity to the product IMO.
I’m looking for some statistics on ETHE… such as who is buying, how much is bought, etc?There is a great Q1 2020 report I recommend you give a read that has a lot of cool graphs and data on the product. It’s a little GBTC centric, but there is some ETHE data as well. It can be found here hidden within the 8-K filings.Q1 2020 is the 4/16/2020 8-K filing.
Is Grayscale only just for BTC and ETH?No, there are other products as well. In terms of a secondary market product, ETCG is the Ethereum Classic version of ETHE. Fun Fact – ETCG was actually put out to the secondary market first. It also has a 3% fee tied to it where 1% of it goes to some type of ETC development fund.
Are there alternatives to Grayscale?I know they exist, but I don’t follow them. I’ll leave this as a “to be edited” section and will add as others comment on what they know.
Coinshares (Formerly XBT provider) are the only similar product I know of. BTC, ETH, XRP and LTC as Exchange Traded Notes (ETN).
It looks like they are fully backed with the underlying crypto (no premium).
Denominated in SEK and EUR. Certainly available in some UK pensions (SIPP).
As asked by pegcity - Okay so I was under the impression you can just give them your own ETH and get ETHE, but do you get 11 ETHE per ETH or do you get the market value of ETH in USD worth of ETHE?I have always understood that the ETHE issued directly through Grayscale is issued without the premium. As in, if I were to trade 1 ETH for ETHE I would get 11, not say only 2 or 3 because the secondary market premium is so high. And if I were paying cash only I would be paying the price to buy 1 ETH to get my 11 ETHE. Per page 39 of their annual statement, it reads as follows:
The Trust will issue Shares to Authorized Participants from time to time, but only in one or more Baskets (with a Basket being a block of 100 Shares). The Trust will not issue fractions of a Basket. The creation (and, should the Trust commence a redemption program, redemption) of Baskets will be made only in exchange for the delivery to the Trust, or the distribution by the Trust, of the number of whole and fractional ETH represented by each Basket being created (or, should the Trust commence a redemption program, redeemed), which is determined by dividing (x) the number of ETH owned by the Trust at 4:00 p.m., New York time, on the trade date of a creation or redemption order, after deducting the number of ETH representing the U.S. dollar value of accrued but unpaid fees and expenses of the Trust (converted using the ETH Index Price at such time, and carried to the eighth decimal place), by (y) the number of Shares outstanding at such time (with the quotient so obtained calculated to one one-hundred-millionth of one ETH (i.e., carried to the eighth decimal place)), and multiplying such quotient by 100 (the “Basket ETH Amount”). All questions as to the calculation of the Basket ETH Amount will be conclusively determined by the Sponsor and will be final and binding on all persons interested in the Trust. The Basket ETH Amount multiplied by the number of Baskets being created or redeemed is the “Total Basket ETH Amount.” The number of ETH represented by a Share will gradually decrease over time as the Trust’s ETH are used to pay the Trust’s expenses. Each Share represented approximately 0.0950 ETH and 0.0974 ETH as of December 31, 2019 and 2018, respectively.
25. https://news.bitcoin.com/eth-volumes-top-125-billion-in-q3-high-risk-dapps-dominate-tron-network/Here is a small cross post for price movement: https://dailyhodl.com/2020/09/30/bitcoin-btc-tezos-xtz-cardano-ada-etoro-crypto-roundup/
Year 2022submitted by MediocreBrilliant to binance [link] [comments]
The year is 2022. Most companies have issued their own crypto tokens. The stock-markets NYSE, AEX, FTSE have all been shutdown after a hack which caused global markets to collapse. Those in the know speculate that the hack is just a scape-goat propagated by central banks and governments to hide the failure of fiat-currencies.
Bitcoin is still king followed by Ethereum, Apple, Alphabet, Microsoft, Saudi Aramco, Shell and Tesla.
The crypto-markets gave grown substantially now hovering around 200 trillion tether. I could say dollars but after the historic collapse they don't have any value and are not longer noted on Coinmarketcap as an unit of account.
Bitcoin is currently trading at 130.000 and according to "experts" it's currently in a bear-market after tapping 250.000. Gold is hovering around 35.000 and silver around 2500. Oil is still relatively cheap at 130 and the average income is around 40.000. Wages have not kept with the crash of fiat-currencies which means that 90 percent of the citizenry are dependent on the state to receive an additional 40.000 in UBI.
The UBI is clearly not enough to support people in their lives. The state made it illegal for landlords to charge any rent after a protest-group called Renters lives Matter went on a killing spree. To compensate the landlords all houses were equipped with hightech monitoring gadgets to collect as much data as possible to sell to big tech companies. If you don't like to be monitored you will have to pay "home-services" or buy a home.
All excess oil reserves are now being used to mine Bitcoin. Paying with bitcoin is more for the big shots nowadays. Common folks like to use fast, cheap and highly deflationary coins to transact in like Tesla, Apple or Amazon. Most companies started burning their own coins with a certain percentage of profit every quarter to incentivise hodling and tend to pay their employees in their crypto.
Off-course the big tech coins are not really just coins. They are securities like stocks used to be and are quite centralised. God only knows what would happen to the crypto securities if Bezos, Zuckerberg or Gates would suddenly die. But in general the crypto-markets have grown up and are now more stable than let's say the wild wild west days in 2017 where every billionaire could just steer the markets with some pocketchange in every desired direction.
Binance along with other crypto-exchange companies became one of the biggest beneficiaries after the closure of the global stock-markets, with a market-cap of 900 billion tether accompanying the big boys in the top 30.
What follows...I leave up to you.
submitted by Joe-M-4 to CryptoCurrency [link] [comments]
EXPERIMENT - Tracking 2019 Top Ten Cryptocurrencies – Month Seventeen - UP 43%
Full blog post with all the tables here.tl;dr - This is the 17th monthly update on the 2019 Top Ten Experiment. Ethereum up the most in May, plus got a shout out from J.K. Rowling, so it obviously won the month. Overall, BTC in first place since January 2019, BSV in second place. Half of the 2019 Top Ten Portfolio is up at least +50%. XRP is worst performing. Total $3k (3 x $1k) investments the 2018, 2019, and 2020 Top Ten are up +3.5%, but similar approach with US stocks market would have yielded +10%.
The Experiment:Instead of hypothetically tracking cryptos, I made an actual $1000 investment, $100 in each of the Top 10 cryptocurrencies by market cap on the 1st of January 2018. The result? The 2018 Top Ten portfolio ended 2018 down 85%, my $1000 worth only $150. I then repeated the experiment on the 1st of January 2019 with the new 2019 Top Ten cryptos, then again in 2020.
Think of the Top Ten Experiments as a lazy man’s Index Fund (no weighting or rebalancing), less technical, but hopefully still a proxy for the market as a whole – or at the very least an interesting snapshot of the 2018, 2019, and 2020 crypto space. I am trying to keep this project simple and accessible for beginners and those looking to get into crypto but maybe not quite ready to jump in yet. I try not to take sides or analyze, but rather attempt to report in a detached manner letting the numbers speak for themselves.
This is not investing advice – as a matter of fact, the vast majority of the reports will show that the Top Ten approach under performs other strategies. This experiment is designed to be documentary in nature, describing a specific period in cryptocurrency history.
The Rules:Buy $100 of each the Top 10 cryptocurrencies on January 1st, 2018, 2019, and 2020. Hold only. No selling. No trading. Report monthly.
Month Seventeen – UP 43%Unlike April’s all green month, May was more mixed. That said, the gains outweighed the losses this month in the 2019 Top Ten Portfolio.
Question of the month:In May, Reddit launched two Ethereum-based tokens on the Cryptocurrency and FortNiteBR subreddits. What are the Cryptocurrency token called?
Scroll down for the answer.
Ranking and March Winners and LosersBesides Stellar (down two spots to #13) and Tron (down one from #16 to #17) every other crypto was locked in place.
Speaking of Stellar and Tron, they are still the only two cryptos to have dropped out of the 2019 Top Ten since January 1st, 2019. They have been replaced by Binance Coin and Tezos.
May Winners – Ethereum ended the month up +16% and got a shout out from J.K. Rowling, so it obviously won May. BTC came in a close second this month, up +14%.
May Losers – A tight battle for the basement this month with BSV (down -3.9%) edging out XRP (down -3.7%) for the bottom spot.
Overall update – BTC increases lead over second place BSV, XRP still worst performingAhead until just last month, BSV lost a lot of ground to BTC in May. Bitcoin is now up +168% since January 2019 compared to BSV‘s +116% gain. That initial $100 investment in BTC? Now worth $273.
As was the case last month, 50% of the 2019 Top Ten cryptos are up at least +50% since the beginning of the experiment.
At the other end, XRP continues to struggle, now down -41% since January 2019.
Total Market Cap for the entire cryptocurrency sector:The overall crypto market added about $35B in May, and is now near August 2019 levels. It is up +123% since January 2019.
Bitcoin dominance:BitDom was steady again in May. This marks the third straight month it’s been stuck at around 65% For context, the range since the beginning of the experiment in January 2019 has been between 50%-70%.
Overall return on investment since January 1st, 2019:The 2019 Top Ten Portfolio gained about $65 in May. After the initial $1000 investment, the 2019 group of cryptos is worth $1,431, up about +43%.
Here’s a look at the ROI over the life of the first seventeen months of the experiment, month by month:
Almost completely green for the 2019 Top Ten, a welcome change from the all red table you’ll see in the 2018 experiment. As you can see, every month except the first month ends in positive territory. At the lowest point, the 2019 Top Ten portfolio was down -9%, at the highest point, up +114% (May 2019).
How does the 2019 Top Ten Experiment compare to the parallel projects?
After a $3000 investment in the 2018, 2019, and 2020 Top Ten Cryptocurrencies, my portfolios are worth $3,104.
That’s up about +3.5% for the combined portfolios. Better than a few months ago (aka the zombie apocalypse) where it was down -24%, but not yet back at January (+13%) or February (+6%) levels.
How does this compare to traditional markets?
How does the 2019 Top Ten portfolio compare US stock market?Excellent question, I’m glad you asked. And you’re in luck, I’m also tracking the S&P 500 as part of my experiment to have a comparison point with other popular investments options. Despite the fact that the world seemed to be on fire, May 2020 saw the continued rebound of the stock market. It’s now up +22% since the start of the 2019 Experiment.
As a reminder (or just scroll up) the 2019 Top Ten portfolio is returning +43% over the same time period, which is about double the S&P 500.
The initial $1k investment I put into crypto would be worth $1,220 had it been redirected to the S&P 500 in January 2019.
But what if I took the same world’s-slowest-dollar-cost-averaging/$1,000-per-year-in-January approach with the S&P 500? It would yield the following:
After three $1,000 investments into an S&P 500 index fund in January 2018, 2019, and 2020, my portfolio would be worth $3,310.
That $3,310 is up over+10% since January 2018, compared to the $3,104 value (+3.5%) of the combined Top Ten Crypto Experiment Portfolios.
That’s about a 7% difference in favor of the stock market. Last month, there was only a 3% difference, the month before, the gap was 13% (all in favor of the stock market).
Implications/Observations:The difference between the 2019 Top Ten crypto group and the overall crypto market is stark. Since January 2019, the overall market has gained +123% compared to the 2019 Top Ten crypto group which has gained +43%. This is an absolutely massive 80% gap. A +43% return is solid compared to the stock market, but it also implies that an investor would have done much better picking different cryptos or investing in the entire market instead of focusing only on the Top Ten. There are a few examples of this approach outperforming the overall market in this 2019 Top Ten Crypto Experiment, but the cases are few and far between.
The 2018 Top Ten portfolio, on the other hand, has never outperformed the overall market, at least not in the first twenty-nine months of that Experiment.
For the most recent 2020 Top Ten group, the opposite had been true: the 2020 Top Ten had easily outperformed the overall market 100% of the time…until this month.
Conclusion:The BTC halving event came and went in May and crypto markets shrugged. As the world continues to change because of COVID-19, what will be crypto’s place when we finally emerge on the other side?
Final word: Please take care of yourselves, your families, and your communities. Stay safe out there.
Thanks for reading and for supporting the experiment. I hope you’ve found it helpful. I continue to be committed to seeing this process through and reporting along the way. Feel free to reach out with any questions and stay tuned for progress reports. Keep an eye out for the original 2018 Top Ten Crypto Index Fund Experiment and the recently launched 2020 Top Ten Experiment.
And the Answer is…A) Moons
According CryptoCurrency, Moons represent ownership in the subreddit, “tokens on the Ethereum blockchain controlled entirely by you, and they can be freely transferred, tipped, and spent in CryptoCurrency*.*” Check out this post for more details.
submitted by tkeycoin to Tkeycoin_Official [link] [comments]
“The TkeyNet development team is surprising to us” — recently such a quote came from our lips. Why would that be?
TkeyNet: Instant transactionsNow transactions in the TkeyNet network are instant. You won’t even notice how the TKEY delivers to the recipient. For example, when you send a payment from card to card, and after a few seconds, the money is in the recipient’s possession. Despite the fast speed of transactions, the system has not only preserved its security properties but also strengthened them and still works on the blockchain.
“The chain of information a store on every computer in the network. The addition of information occurs by using cryptographic functions, allowing you to identify the information for any period. When a new data block adds to the TkeyNet network, the integrity of all previous information confirm by the entire TkeyNet, and each node checks its integrity.”
In early September, we completed work on one of the main functions of the system: “The Financial Module Of The Marketplace.”
What is it for, and how does the “Financial Marketplace module” work?TkeyNet combines various assets in a single system, creating instant access to liquidity. Digital exchanges connect to TkeyNet and provide assets for exchange: BTC, USDT, ETH, and others. For example, Kraken connects to TkeyNet and provides digital assets: ETH, ETC. Binance: USD, BTC. Bitfinex: USDT, EOS, etc. Exchanges can provide any assets that trade on their platforms.
The blockchain acts as a Registrar of financial transactions. Accounts, balances, and orders store in a distributed registry TkeyNet, and copies of data to distribute across network TkeyNet nodes. Payment routing is implemented in the TkeyNet system, which allows you to track not only balances but also distribute transactions without the participation of any party.
The user, in turn, has quick access to transactions with digital currencies, regardless of the blockchain used: Bitcoin, Ethereum, EOS, or any other, transactions are recorded in TkeyNet, and transactions are processed instantly.
“The task of the platform is to automate the interaction of the parties and ensure the convenience of performing operations. — This is the core element of a trusted environment.”In addition to digital assets, the “Financial Marketplace module” includes working with Fiat currencies, stocks, bonds, as well as raw materials: oil, gas, diamonds, etc. — This means that payment systems, banks, currency exchanges, commodity exchanges, and other financial market participants, are also connected to the TkeyNet blockchain.
Payments between companies in a few secondshttps://preview.redd.it/v84fizszvdp51.png?width=1920&format=png&auto=webp&s=e501b06661b2a960fe75abe07a1aba5177db620d
Companies can make payments in seconds, not days. TkeyNet can seriously mitigate the adverse risks of extraterritorial sanctions against the financial system of the countries if such follow. Also, the ability to conduct internal and cross-border transfers through an independent financial channel directly to the counterparty at high-speed is beneficial to business and the state from any point of view.
Each user will be able to make quick transfers to counterparty wallets, exchange digital currency for another or fiat money at the current exchange rate.
What else is interesting? — ApplicationsDevelopers can connect to TkeyNet and get access to a large-scale pool of liquidity: digital currencies, stocks, precious metals, etc.
This solution not only reduces development costs but also allows you to get access to the best prices and fast exchanges. You can create any financial application, regardless of the market usage: a cryptocurrency, or financial markets.
Developers can create a digital Bank or exchange, fast connect the app, and TkeyNet using the API.
“By working with partners around the world, we can significantly increase our market share in this business, providing our partners with ready-made tools without risks.”And also regardless of the applications that will be created by partner developers. The company will provide its interfaces that will provide access to various types of assets — digital currencies: BTC, USDT, ETH, etc.; Fiat currencies: euros, dollars, pounds, etc.; securities and commodity assets.
Anywhere in the world, at any time, the system user will have access to the desired currency without having to exchange one for another. Also, when implementing the application for NFC payments, it will become even easier to use the system. However, even with the availability of several types of currencies, such as the pound, dollar, and euro, it is easy to make payments abroad.
“According to the World Bank, more than 1.7 billion adults are still not covered by banking services, but two-thirds of them have a mobile phone that can help them access financial services. — This tells us one thing: the traditional banking approach is exceptionally inefficient. Lack of infrastructure: a network of ATMs, fees and deposits, a network of cashiers, and internal money transfer programs are just some named obstacles to creating a real banking experience.”Imagine that in one app you have access to Apple shares, Tesla shares, gold, precious metals, rubles, dollars, and even oil if you want. TkeyNet — makes this possible.
TkeyNet is an industrial solution designed for companies and users at the same time. Since payments in the system are very fast, a person can store and send money in any asset they want. This flexibility creates an open market, which is necessary at present.
PostscriptTkeyNet back-end — completed. Currently, we are actively working on the front-end side. Regardless of working on the front-end side, the TkeyNet system is tested on an ongoing basis.
The DeFi ecosystem has already recreated traditional financial instruments in a new ‘unchained’ decentralized structure. This year, a huge number of DeFi-related projects gained the attention of crypto enthusiasts. The leaders of the race are Maker, Compound, Aave, Curve, Synthetix and QDAO DeFi. These projects provide a significant number of opportunities to earn money. So let’s find out what the DeFi market mood is right now and how you can increase your holdings in 2020.submitted by QDAODeFi to u/QDAODeFi [link] [comments]
DeFi market 2020According to data provider DeFiPulse, the total value locked in USD right now is $6.7 billion. And it is best to check the data regularly because it is growing rapidly.
For instance, the value was $4.21 billion at the beginning of August 2020. It rose by one third in just 3 weeks.
Taha Zafar, a crypto analyst, shared data that illustrates how DeFi tokens performed within the past 90 days. As you see, they are doing even better than Bitcoin.
So while the market is soaring, there are already a number of DeFi leaders that stand out among others.
However, 2020 introduced some new figures on this chessboard. Compound competes with Maker in the lending sector and is not yielding its position. At the moment, the Compound credit portfolio is $820 million, when at the beginning of the year, it was $100 million.
With Aave, Curve and Synthetix breaking into the top 10 most successful projects in DeFiPulse and QDAO DeFi being the most promising one, the DeFi market is emerging as a real alternative to the traditional finance sector.
Recently, the DeFi Overview Twitter account posted an illustrative map that demonstrates how fast all the main market players are growing: https://twitter.com/DefiOverview/status/1297829568271642624
While Binance has already listed some DeFi projects like Compound, Synthetix, YFI and Curve, the u/top7ico posted a forecast list of other promising DeFi projects. https://twitter.com/top7ico/status/1297540483913093120
What DeFi projects are aiming to get in TOPsDeFiPulse is the world’s leading resource for providing its audience with fresh-from-the-oven, comprehensive information concerning DeFi. Here you can find all the latest analytics and rankings for DeFi protocols. Moreover, this resource provides you with a list of the best resources on the topic.
The information is being refreshed every hour. The Total Value Locked is calculated by multiplying the total balance of Ether (ETH) and ERC-20 tokens by their price in USD.
To sum up, it is the most interactive platform that maintains the upper hand and provides you with the freshest information about the DeFi market.
Besides, DeFi Pulse has a handy calculator that shows how much money you can earn by locking specific assets.
The calculator also shows how much you can get in Compound, dYdX and Maker.
The platform offers a full range of services just like any usual bank:
QDAO DeFi offers 17 currencies and the interface is user-friendly and convenient.
You can open a Secure Personal QDAO DeFi Account and start earning passive income from the very first day. The interest is paid out daily with no fees.
Users can withdraw funds after they reach the minimum withdrawal amount in a specific cryptocurrency.
You can open a deposit in just a few minutes, click the link to find out how.
What’s next for DeFi projects?Earning on DeFi platforms is easy and convenient. The major players offer a great variety of services to help you find the best way to trade, mint and stake.
Billionaire Bitcoin bull, Tim Draper says, “The DeFi world is almost as technologically advanced as the dollar and when it is, there will be no one who will want to accept a politically manipulable currency like dollars anymore.”
Will DeFi fully replace all the traditional financial instruments? Opinions are divided. However, it can become the basis of a new digital banking system and return the trust to the financial system.
Want to be the first to hear QDAO DeFi news and updates? Visit our website and stay in touch with us on social media: Twitter, Facebook, Telegram and LINE (for the Japanese-speaking community).
submitted by fleta-official to fletachain [link] [comments]
A cryptocurrency exchange is the meeting point where traders exchange their cryptocurrencies for fiat money or other cryptos. These online exchanges, where the market price is generated, mark the value of cryptocurrencies based on supply and demand. It is a virtual space that allows the purchase and sale of cryptocurrencies.
Since the appearance of Bitcoin in January 2009, cryptocurrencies have quickly demanded the use of this type of platform to access decentralized assets. The first cryptocurrency exchange was developed in March 2010 under the name of Bitcoinmarket. Since then, many proposals have emerged in the crypto space to provide quality options to cryptocurrency traders worldwide.
One of the important achievements of a Blockchain platform is getting your currency listed on a major cryptocurrency exchange in the digital finance arena.
According to the Cambridge Dictionary, in the stock market, the term ‘listing’ refers to a place in a list of companies whose shares are bought and sold on a particular stock market, or the act of putting a company on a list. In the case of cryptocurrencies, the native tokens or coins of a blockchain platform represent those ‘shares’ of the platform.
However, being listed on exchanges, especially on major ones, is neither easy nor straightforward. Many cryptocurrency exchanges have well-defined listing criteria to list the cryptocurrencies of credible projects, and not all projects meet the criteria the exchanges present.
How exchanges operate
Cryptocurrency exchanges can be classified into different types, but they all share something in common. They are all platforms designed to facilitate the participation of their users in the alternative cryptocurrency market.
For this, they have fundamental and technical analysis tools and a large number of indicators so that traders can make the best decisions at all times within the market.
Depending on the type of exchange used, transactions work on the platform or user side, all based on the benefits offered by blockchain technology.
Most of the exchanges charge a commission on the buy-sell operation established by the trader. Also, those transactions are confirmed in the native blockchain of currency on which it is operated. Thus, for example, if you deposit or withdraw a certain amount of BTC in Binance, you will have to wait for the confirmation of the bitcoin blockchain network. You can see the corresponding balance successfully reflected after your transaction is confirmed.
What is the difference between a CEX and DEX
As we mentioned earlier, there are many categories of cryptocurrency exchanges, but fundamentally two large groups dominate the scene: centralized «CEX» and decentralized «DEX» exchanges.
The first group corresponds to traditional exchanges, where access to buy or sell their tokens according to the market price.
Compared to DEX, they are highly regulated platforms that must meet KYC(Know Your Customer) and AML(Anti money laundering) standards. It means that there is no privacy on their platforms since users are forced to reveal their identity to trade. Coinbase, Binance, Kraken, Bithumb, and Bitfinex are examples of this type of exchange.
Moreover, CEX charges for its services, and some of them offer funding alternatives through traditional bank accounts or conventional credit cards. By charging commissions, CEX keeps the platform functioning and generating income.
In the case of decentralized exchanges or DEX, they are a direct evolution of the traditional ones. Although they work in a similar way to the CEX, they are able to operate in a decentralized way thanks to smart contracts. It indicates that there are no intermediaries, and the platform is self-supporting due to its programming. In addition to this, DEX usually has high levels of privacy and even anonymity since it does not require KYC or AML. Some of the examples of DEX are AirSwap, Bancor, UniSwap, and Bisq.
However, despite its mentioned qualities, there are defects that traders are reluctant to use DEX exchange. In many cases, its interface is difficult to use for the average trader to operate, and it has limited order types. Also, its low liquidity that generates high spreads drives away the users.
Where FLETA is listed
In the case of the FLETA token, we can find it available in a large number of exchanges globally.
Since our first listing on the GDAC Exchange with the FLETA / KRW pair, the token is now available on five more exchanges for a total of enlistment in 08 pairs within six global exchanges.
Below you can find the complete list of token availability in cryptocurrency exchanges in the market:
● Bithumb «FLETA / KRW»
● Coinone «FLETA / KRW»
● Bithumb Global «FLETA / USDT»
● Bittrex «FLETA / BTC»
● DigiFinex «FLETA / ETH»
● DigiFinex «FLETA / BTC»
● GDAC «FLETA / KRW»
● Bitsonic «FLETA / KRW»
submitted by cryptoerapro to u/cryptoerapro [link] [comments]
Bitcoin is troublesome to use.
But bitcoin’s isue may build it additional valuable.
So, what’ reality regarding bitcoin’s future?
As bitcoin hits mainstream media, the subject of bitcoin mining
bubble regarding to pop.For ten years, the media has enjoyed painting bitcoin as a bubble concerning to pop. They’ve gleefully pronounced the bubble popped and bitcoin dead … over 350 times. However the reality regarding bitcoin is that it keeps coming back back. Why?
Charlie Munger called bitcoin “worthless artificial gold.” Others in the media have likened bitcoin to a bubble, a “tulip mania,” and different strong statements
Each time bitcoin improves itself (like with Segwit
Segregated Witnesses. A protocol implemented by Bitcoin to extend transaction speed. SegWit allows a lot of transactions to be written into a single block on a blockchain.
or the Lightning Network), or will increase in value, the media is keen and ready to jump on it, decrying and denouncing it.
Therefore what’s the reality behind bitcoin’s price -- is it extremely a bubble?
The reality regarding bitcoin is straightforward; it's experiencing the same rise and fall cycles as each new technology and asset catego
The web also experienced a bubble. Shares of dotcom firms rose by a thousandpercent on a daily basis. Then it all tumbled down. However we have a tendency to’re still using the web, aren’t we have a tendency to? More than ever, in fact.
Stocks conjointly experienced big boom and bust cycles, especially in their early days.
We might feel like stocks have been around forever -- and to us they need. However stocks conjointly had a starting, and a rough one too. Once upon a time in 1531, when the first stocks were invented, they saw extraordinary volatility, scams, and no regulation. In fact, before stock exchanges, they were sold at occasional shops -- just like cryptocurrencies were sold on la peer to peer
marketplace, before exchanges came online.
Even property, viewed by the majority as “the safest investment” experienced a dramatic cycle. Business Insider reported that “Between 2006 and 2014, nearly ten million homeowners in America saw the foreclosure sale of their own homes.” And tens of thousands became homeless as a result of of it. Nevertheless --- we have a tendency to’re still living in homes, aren’t we?
The future of bitcoin would possibly be the identical as that of stocks, bonds, assets, and the web. It rises and falls like all the others, and it is currently terribly volatile -- but that’s as a result of it’s young.
Stocks have been around for 400 years. Dotcom corporations for forty years. Bitcoin is solely 10 years previous -- and cryptocurrencies, normally, are even younger. But slowly, they will become a part of our daily lives.
Rich investors are manipulating costs!
Look at this headline from the Independent: “Bitcoin price Crash: 'Manipulative Whales
A very wealthy individual capable of creating massive trades.
View full glossary
' cause Cryptocurrency Market Meltdown!”
It’s sensationalism, pure and straightforward. The article goes on to rant against these therefore-known as “whales” -- individuals who own voluminous dollars of BTC -- as evil-doers who’s solely thought is profit.
This type of sensationalism is meant to harm Bitcoin’s future; to scare people faraway from doing research and thinking for themselves.
Nonetheless, this statement is somewhat true. Up to eighty five% of Bitcoin’s supply is solely owned by onepercent of wallet addresses.
But there’s an important point to be made about these numbers. Most of the prime percentage of wallets is not owned by whales -- but by exchanges
On-line platforms on which people can buy and sell cryptocurrencies.
View full glossary
However their result is getting smaller and smaller.
A company referred to as Chainalysis -- that makes a speciality of analyzing the Bitcoin blockchain
-- found that “the actual threat that all whales pose to the cryptocurrency economy is relatively low. If they sold off their entire holdings, it'd be effectively a $3.9 billion sale at current costs. That’s not even tenpercent of this total market capitalization of Bitcoin.”
This is as a result of, as I hinted above, several of those wallets holding such vast sums are the ‘cold wallets
’ (wallets held offline) belonging to major exchanges like Coinbase, Kraken, Binance, and more. These wallets cannot be used to manipulate the price, diminishing the potential impact of enormous ‘whales’ selling their positions.
Bitcoin is simply too slow for use as a currency.
The reality regarding Bitcoin is that yes, it's slower than VISA, Mastercard, and alternative centralized electronic payment systems.
Paying together with your credit cards takes seconds and the network can handle payments around the globe twenty fouseven. But, though Bitcoin can additionally be used around the world, confirmation
of payment takes an average of 10 minutes; during the bitcoin craze recently 2017, confirmation times might take hours.
Moreover, VISA on average processes around 2,00zero transactions per second (tps). This means the amount of payments individuals make per second on the network. VISA includes a maximum of twenty four,00zero TPS. Bitcoin, by distinction, has a maximum of ten TPS. This argument has been place forward by several critics over the years and picked up by the media as the doom of bitcoin’s future.
However Bitcoin could be a technology that evolves.
Now let’s assume regarding Bitcoin’s past for a moment. The coin and its underlying technology -- the blockchain -- are only ten years previous. When the web was ten years old -- the year was 1989. Do you keep in mind the net in 1989? I sure do.
payments in exchange for not revealing sensitive info. So, in bound ways that, BTC and cryptocurrencies offer hackers a lot of options.
However money continues to be king for every criminality.
Though it’s true that hackers and phishers do typically ask for payment in BTC
There’s an aphorism: “money talks.” It means that that if you would like to get something done -- the best argument you can build is to place down a stack of money. When Bitcoin rose to fame, the primary headlines focused around Bitcoin being the prime choice for criminality.
But Lilita Infante, Special Agent for the DEA (Drug Enforcement Administration) has some contradictory info regarding this. She was one among a ten-person Cyber Investigative Task Force team whose primary aim was the dark web and crypto-related investigations. This cluster is no little force. They collaborate with the Department of Justice, FBI, and also the Bureau of Alcohol, Tobacco, Firearms and Explosives. And she went on the record to talk regarding what share of bitcoin transactions are literally being employed for illegal things; she said that “illegal activity has shrunk to about 10 p.c.”
Only tenp.c of all the transactions on the Bitcoin network could be used for illegal things. Which number is falling.
The fall in Bitcoin’s use among criminals is due to several factors. The most prominent factor is that Bitcoin is no longer anonymous. Sciencemag wrote a full report on how governments are developing and using techniques to explore the Bitcoin blockchain and notice criminals by tracing their bitcoin payments.
Paying with bitcoin isn’t simple.
I’ve heard this argument flow into widely throughout the years. I still hear it from my grandpa each vacation dinner. He didn’t see a Bitcoin checkout option at the grocery when he bought the turkey -- therefore it’ll never be used.
Perhaps Bitcoin is on its means to being such a store of worth. For 10 years now bitcoin has been ready to be saved and retrieved and exchanged -- and it’s worth has only gone up (bumpy but up).
Need to get more cryptocurrencies? Check out our top 5 cryptocurrencies to shop for, whether you’re a beginner or an experienced investor!
Bitcoin is difficult to use.
Bitcoin, like all new technologies, isn't the most user-friendly.
You would like to line up a wallet, bear in mind a seed phrase, and several additional steps. Sending and receiving BTC
payments additionally involves steps of copy/pasting long strings of random letters and numbers. It’s powerful, I hear ya.
I additionally keep in mind all the steps I needed to require to send emails back when those were new. Insert a CD from AOL into my computer. Install AOL. Unplug my phone line. Plug in my Modem. Wait for it to make all those noises and finally connect. Then set up my AOL email and password. It was quite the method.
My grandfather never thought emails would come out and even my mother said folks would perpetually like handwriting letters (and using a physical dictionary for spell check!) and sending through the post.
Think about it the approach we tend to assume about gold. Not everyone has gold. It’s also a bit difficult to own.
If you wish to own gold for its ‘store of price’ properties, you wish to seek out a specialized look to buy investment gold. You need to store it somewhere, sort of a personal safe or a bank vault, and bear in mind the password. This is somewhat troublesome.
Perhaps Bitcoin’s problem will facilitate it retain its value, just like gold
You Might Conjointly Like: The 5 est Bitcoin Sports Betting Sites
So much has happened this week! We saw a capitulation point of bitcoin before bears took over and we saw the selling pressure push Bitcoin down toward the $9000USD mark then move back up above $9100USD So far it has been a stable hold, however we may see some more action within the coming weeks.submitted by IOTAbesomewhere to Gravychain [link] [comments]
Widespread scamming within the Twitter-sphere, Youtube and other platforms as Bitcoin and other cryptocurrencies may seem like fair game. Cryptocurrencies providing big payouts for scammers without the ability for reversals of accounts. Remember if something seems too good to be true, do some research or just plain do not respond/believe it. Stay safe and careful with your funds!
On the brightside, there has been even more adoption of cryptocurrencies as rumours of Paypal utilising cryptocurrency has been confirmed as they are developing crypto capabilities. In addition to this we received exciting news at the start of this week about Binance partnering with Swipe (SXP) and offering a debit card to spend BNB, SXP, BTC and BUSD. ( I will be keeping a swift eye on BNB and Swipe as its utilisation as tokens has just increased 43 fold).
Positive news for the Bitcoin network as its hashrate reaches all time high which helps to secure the network further even though mining profits have dropped by 50% from the recent halving. If you didn't know already the last Bitcoin will be expected to be mined in 2140 with its difficulty ever increasing and each time securing the network further. Processing units will have to become faster, stronger and most importantly more cost effective to continue to entice miners for the block rewards and further renewable energy practices.
Furthermore we can see Central banks and countries discussing and developing Central Bank Digital Currencies (CBDC). Read more about it here https://www.investopedia.com/terms/c/central-bank-digital-currency-cbdc.asp and check out some of the developments in the world above. This shows the popularity and strong nature of cryptocurrencies. As the saying goes "If you cant beat them, JOIN them".
Overall, very solid week full of adoption, animation and anticipation. Another post next week for a weekly round up! See you then but in the mean time join us at our Gravychain Discord.
- DISCORD LINK: https://discord.gg/zxXXyuJ 🍕 Bring some virtual pizza to share 🍕
Come have a chat, stimulate a discussion, ask a question or share some knowledge. We are all friendly crypto enthusiasts up for a chat, supportive and want to help each other with knowledge and investments!
Big thanks to our Telegram and My Crypto HQ for the constant news updates! - The Gravychain Collective: https://t.me/gravychain - My Crypto HQ: https://t.me/My_Crypto_HQ
submitted by Smart_Smell to Robopay [link] [comments]
Cryptocurrency technical analysis: bears drive the crypto market movement
The negative sentiment continues to reign in the crypto asset market, as indicated by technical and fundamental analyzes. Thus, the drop in demand for many top altcoins caused by the bitcoin correction has already led to the fact that the bears have reached many targets located in the support area. At the same time, several interesting events took place on the crypto market over the past working week. On July 15, it became known that the Chinese authorities will test the digital yuan on the largest supplier of groceries and food delivery Meituan Dianping. The work of the Chinese CBDC is already being tested by McDonald’s corporations, Starbucks and DiDi, the largest taxi aggregator in the Middle Kingdom. On June 16, Samsung announced the start of a partnership with Stellar, within which the developments of the blockchain project will be integrated into the Samsung Blockchain Keystore and Samsung Galaxy smartphones. Also, one cannot fail to note the large-scale hacking of the social network Twitter. On the night of July 15–16, unknown attackers gained access to 130 accounts of prominent businessmen, politicians and opinion leaders. As a result, fake Elon Musk, Changpen Zhao, Bill Gates and Barack Obama posted messages calling for bitcoins to be sent to them, which allowed them to collect 12.86 BTC.
BitcoinOn the four-hour chart, bitcoin develops a very clear movement along the levels from the point of view of technical analysis. After retesting the resistance at $9500 and the lower boundary of the “Triangle” pattern, BTC quotes rushed down to the first target at $9150. If in the coming days the price consolidates below the support level, then in the short term we should expect the development of a downtrend. The closest targets for sellers will be $9000 and $8760 (38.2% correction at Fibonacci levels). At the same time, the persistence of negative sentiment in the stock market will be a signal for the digital currency market, which will continue to fall until the beginning of autumn and the recovery of the business cycle.
In the long term, this may lead to a decline to supports at $8330 and $8050. But in order to push the price lower, the bears will need to exert enormous forces. Moreover, from these levels, whales will begin to gain new positions, which will push the bitcoin price up and launch a medium-term growth trend. It will confirm its departure above the 200-day simple moving average (SMA) line and the closing of Japanese candlesticks above $9500. In the long term, this will make it possible to achieve medium-term goals in the form of clusters of $9,900- $10,000 and $10,400- $10,500.
BTC / USD chart, four-hour timeframe
So far, the first cryptocurrency also cannot form a global trend, and this has led to the fact that Bitcoin continues to consolidate movement within the $8900 cluster (50% correction at Fibonacci levels) — $9580. BTC quotes have already dropped below the $9,300 level, which could lead to sales up to $8,900. In the future, we should expect Bitcoin to test the targets of $8600 and $8220, where the 200-day moving average (MA) line and the lower border of the technical analysis model “Triangle” (on the chart below, its borders are marked in orange).
For a short time, BTC quotes may even drop to supports at $7400 and $6800, but the forecast for the price rebound back up and the formation of a long-term upward trend seems more likely. This will allow Bitcoin to reach the $10,000 and $10,500 levels, and their subsequent breakout will allow the asset to rush to the $11,000, $11,200- $11,300 and $11,800 levels by the end of the year.
BTC / USD chart, daily timeframe
EthereumThe altcoin market is also developing neutral dynamics so far, but more and more signals appear on the charts that speak in favor of the development of a downward movement.
Big capital is not yet ready to acquire digital assets at a price that has grown strongly since March.
Ether price develops along the $233 level (11.4% Fibonacci retracement line) and within the framework of consolidation within the $220- $251 range. The drop in the total demand for digital assets will lead to a decrease in the cost of ether towards the first target in the form of consolidation of $195- $200, where the 200-day MA line is located. The further course of trading will be determined by the appearance or absence of demand for cryptocurrencies. In the long term, by the end of the year, we should expect a move above $251 to the resistance areas of $280, $300 and $320.
ETH / USD chart, daily timeframe
LitecoinOn the daily chart, Litecoin continues to consolidate above the support boundaries in the form of a $40- $42 cluster, which takes the form of the Andrews Pitchfork technical analysis model. The development of the downward dynamics will lead to the fact that the cost of LTC will drop to $36 and $30.60. But in the medium term, we should expect the quotes to move above the 200-period MA line, which passes in the resistance area of $47.45. Overcoming it in the coming months will allow LTC quotes to soar to the levels of $51.50 (38.2% correctional level along the Fibonacci lines), $56.80, $60.80, $65 and $70.
LTC / USD chart, daily timeframe
Bitcoin CashThe Bitcoin fork began to decline after the breakout and a very clear retest of the lower boundary of the technical analysis model “Triangle” (on the chart below, its boundaries are marked in pink). At the same time, the Bitcoin Cash quotes remain within the framework of a broader consolidation in the form of the “Horizontal Channel” $200- $272. However, the priority trading scenario remains a decline in Bitcoin Cash to the $200 level. There is also a high probability of updating the March lows in the $170 and $150 regions.
However, in the months ahead, expect BCH to move above $272, where the 200-day SMA line passes, paving the way to the $305, $356 and $400 levels.
BCH / USDT chart, daily timeframe
XRPXRP is also under the influence of bears, leading to a decline towards the resistance level at $0.2050. In the coming weeks, the asset may test the support at $0.18, where the lower border of the Descending Triangle model lies. The development of the downward movement will allow XRP to test the support at $0.16 and $0.1470.
But in the medium term, a signal for a reversal of the downtrend may appear in the event of a break above the 200-day MA line passing at the level of $0.2360. If this happens, then in the second half of 2020 XRP will be able to reach important targets at the levels of $0.2540, $0.27, $0.2860 and $0.30.
XRP / USD chart, daily timeframe
Binance CoinBinance Coin tried to break the bottom of the Ascending Triangle, but failed. The current quotes are supported by the 200-day SMA line and the boundaries of the $15.30- $16 area. Maintaining the downward momentum will allow BNB to rush down to the supports at $13.80 and $11.50.
But the most likely scenario looks like a final consolidation above the 200-day MA. This will open the way to the current resistances at $17 and $18.14, as well as the first target in the form of a $19.36- $20 cluster. Testing of the $21.30 and $23.50 levels is also expected in the coming months.
BNB / USDT chart, daily timeframe
Now more and more crypto assets are showing a willingness to succumb to bearish pressure, which will send quotes into a short decline that will last over the next few weeks. But by the end of the year, we should expect the activity of whales, which will begin to massively buy cryptocurrencies. This will undoubtedly send their value into a long-term upward rally.
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A whirlwind tour of Defi, paying close attention to protocols that we’re leveraging at Genesis Block.submitted by mickhagen to genesisblockhq [link] [comments]
This is the third post of Crypto-Powered — a new series that examines what it means for Genesis Block to be a digital bank that’s powered by crypto, blockchain, and decentralized protocols.
Last week we explored how building on legacy finance is a fool’s errand. The future of money belongs to those who build with crypto and blockchain at their core. We also started down the crypto rabbit hole, introducing Bitcoin, Ethereum, and DeFi (decentralized finance). That post is required reading if you hope to glean any value from the rest of this series.
97% of all activity on Ethereum in the last quarter has been DeFi-related. The total value sitting inside DeFi protocols is roughly $2B — double what it was a month ago. The explosive growth cannot be ignored. All signs suggest that Ethereum & DeFi are a Match Made in Heaven, and both on their way to finding strong product/market fit.
So in this post, we’re doing a whirlwind tour of DeFi. We look at specific examples and use-cases already in the wild and seeing strong growth. And we pay close attention to protocols that Genesis Block is integrating with. Alright, let’s dive in.
StablecoinsStablecoins are exactly what they sound like: cryptocurrencies that are stable. They are not meant to be volatile (like Bitcoin). These assets attempt to peg their price to some external reference (eg. USD or Gold). A non-volatile crypto asset can be incredibly useful for things like merchant payments, cross-border transfers, or storing wealth — becoming your own bank but without the stress of constant price volatility.
There are major governments and central banks that are experimenting with or soon launching their own stablecoins like China with their digital yuan and the US Federal Reserve with their digital dollar. There are also major corporations working in this area like JP Morgan with their JPM Coin, and of course Facebook with their Libra Project.
Stablecoin activity has grown 800% in the last year, with $290B of transaction volume (funds moving on-chain).The most popular USD-pegged stablecoins include:
tablecoins are playing an increasingly important role in the world of DeFi. In a way, they serve as common pipes & bridges between the various protocols.https://preview.redd.it/v9ki2qro12b51.png?width=700&format=png&auto=webp&s=dbf591b122fc4b3d83b381389145b88e2505b51d
Lending & BorrowingThree of the top five DeFi protocols relate to lending & borrowing. These popular lending protocols look very similar to traditional money markets. Users who want to earn interest/yield can deposit (lend) their funds into a pool of liquidity. Because it behaves similarly to traditional money markets, their funds are not locked, they can withdraw at any time. It’s highly liquid.
Borrowers can tap into this pool of liquidity and take out loans. Interest rates depend on the utilization rate of the pool — how much of the deposits in the pool have already been borrowed. Supply & demand. Thus, interest rates are variable and borrowers can pay their loans back at any time.
So, who decides how much a borrower can take? What’s the process like? Are there credit checks? How is credit-worthiness determined?These protocols are decentralized, borderless, permissionless. The people participating in these markets are from all over the world. There is no simple way to verify identity or check credit history. So none of that happens.
Credit-worthiness is determined simply by how much crypto collateral the borrower puts into the protocol. For example, if a user wants to borrow $5k of USDC, then they’ll need to deposit $10k of BTC or ETH. The exact amount of collateral depends on the rules of the protocol — usually the more liquid the collateral asset, the more borrowing power the user can receive.
The most prominent lending protocols include Compound, Aave, Maker, and Atomic Loans. Recently, Compound has seen meteoric growth with the introduction of their COMP token — a token used to incentivize and reward participants of the protocol. There’s almost $1B in outstanding debt in the Compound protocol. Mainframe is also working on an exciting protocol in this area and the latest iteration of their white paper should be coming out soon.
There is very little economic risk to these protocols because all loans are overcollateralized.I repeat, all loans are overcollateralized. If the value of the collateral depreciates significantly due to price volatility, there are sophisticated liquidation systems to ensure the loan always gets paid back.
InvestmentsBuying, selling, and trading crypto assets is certainly one form of investing (though not for the faint of heart). But there are now DeFi protocols to facilitate making and managing traditional-style investments.
Through DeFi, you can invest in Gold. You can invest in stocks like Amazon and Apple. You can short Tesla. You can access the S&P 500. This is done through crypto-based synthetics — which gives users exposure to assets without needing to hold or own the underlying asset. This is all possible with protocols like UMA, Synthetix, or Market protocol.
Maybe your style of investing is more passive. With PoolTogether , you can participate in a no-loss lottery.
Maybe you’re an advanced trader and want to trade options or futures. You can do that with DeFi protocols like Convexity, Futureswap, and dYdX. Maybe you live on the wild side and trade on margin or leverage, you can do that with protocols like Fulcrum, Nuo, and DDEX. Or maybe you’re a degenerate gambler and want to bet against Trump in the upcoming election, you can do that on Augur.
And there are plenty of DeFi protocols to help with crypto investing. You could use Set Protocol if you need automated trading strategies. You could use Melonport if you’re an asset manager. You could use Balancer to automatically rebalance your portfolio.
With as little as $1, people all over the world can have access to the same investment opportunities and tools that used to be reserved for only the wealthy, or those lucky enough to be born in the right country.
You can start to imagine how services like Etrade, TD Ameritrade, Schwab, and even Robinhood could be massively disrupted by a crypto-native company that builds with these types of protocols at their foundation.https://preview.redd.it/agco8msx12b51.png?width=700&format=png&auto=webp&s=3bbb595f9ecc84758d276dbf82bc5ddd9e329ff8
InsuranceAs mentioned in our previous post, there are near-infinite applications one can build on Ethereum. As a result, sometimes the code doesn’t work as expected. Bugs get through, it breaks. We’re still early in our industry. The tools, frameworks, and best practices are all still being established. Things can go wrong.
Sometimes the application just gets in a weird or bad state where funds can’t be recovered — like with what happened with Parity where $280M got frozen (yes, I lost some money in that). Sometimes, there are hackers who discover a vulnerability in the code and maliciously steal funds — like how dForce lost $25M a few months ago, or how The DAO lost $50M a few years ago. And sometimes the system works as designed, but the economic model behind it is flawed, so a clever user takes advantage of the system— like what recently happened with Balancer where they lost $500k.
There are a lot of risks when interacting with smart contracts and decentralized applications — especially for ones that haven’t stood the test of time. This is why insurance is such an important development in DeFi.
Insurance will be an essential component in helping this technology reach the masses.Two protocols that are leading the way on DeFi insurance are Nexus Mutual and Opyn. Though they are both still just getting started, many people are already using them. And we’re excited to start working with them at Genesis Block.
Exchanges & LiquidityDecentralized Exchanges (DEX) were one of the first and most developed categories in DeFi. A DEX allows a user to easily exchange one crypto asset for another crypto asset — but without needing to sign up for an account, verify identity, etc. It’s all via decentralized protocols.
Within the first 5 months of 2020, the top 7 DEX already achieved the 2019 trading volume. That was $2.5B. DeFi is fueling a lot of this growth.
There are many different flavors of DEX. Some of the early ones included 0x, IDEX, and EtherDelta — all of which had a traditional order book model where buyers are matched with sellers.
Another flavor is the pooled liquidity approach where the price is determined algorithmically based on how much liquidity there is and how much the user wants to buy. This is known as an AMM (Automated Market Maker) — Uniswap and Bancor were early leaders here. Though lately, Balancer has seen incredible growth due mostly to their strong incentives for participation — similar to Compound.
There are some DEXs that are more specialized — for example, Curve and mStable focus mostly only stablecoins. Because of the proliferation of these decentralized exchanges, there are now aggregators that combine and connect the liquidity of many sources. Those include Kyber, Totle, 1Inch, and Dex.ag.
These decentralized exchanges are becoming more and more connected to DeFi because they provide an opportunity for yield and earning interest.Users can earn passive income by supplying liquidity to these markets. It usually comes in the form of sharing transaction fee revenue (Uniswap) or token rewards (Balancer).
PaymentsAs it relates to making payments, much of the world is still stuck on plastic cards. We’re grateful to partner with Visa and launch the Genesis Block debit card… but we still don’t believe that's the future of payments. We see that as an important bridge between the past (legacy finance) and the future (crypto).
Our first post in this series shared more on why legacy finance is broken. We talked about the countless unnecessary middle-men on every card swipe (merchant, acquiring bank, processor, card network, issuing bank). We talked about the slow settlement times.
The future of payments will be much better. Yes, it’ll be from a mobile phone and the user experience will be similar to ApplePay (NFC) or WePay (QR Code).
But more importantly, the underlying assets being moved/exchanged will all be crypto — digital, permissionless, and open source.Someone making a payment at the grocery store check-out line will be able to open up Genesis Block, use contactless tech or scan a QR code, and instantly pay for their goods. All using crypto. Likely a stablecoin. Settlement will be instant. All the middlemen getting their pound of flesh will be disintermediated. The merchant can make more and the user can spend less. Blockchain FTW!
Now let’s talk about a few projects working in this area. The xDai Burner Wallet experience was incredible at the ETHDenver event a few years ago, but that speed came at the expense of full decentralization (can it be censored or shut down?). Of course, Facebook’s Libra wants to become the new standard for global payments, but many are afraid to give Facebook that much control (newsflash: it isn’t very decentralized).
Bitcoin is decentralized… but it’s slow and volatile. There are strong projects like Lightning Network (Zap example) that are still trying to make it happen. Projects like Connext and OmiseGo are trying to help bring payments to Ethereum. The Flexa project is leveraging the gift card rails, which is a nice hack to leverage existing pipes. And if ETH 2.0 is as fast as they say it will be, then the future of payments could just be a stablecoin like DAI (a token on Ethereum).
In a way, being able to spend crypto on daily expenses is the holy grail of use-cases. It’s still early. It hasn’t yet been solved. But once we achieve this, then we can ultimately and finally say goodbye to the legacy banking & finance world. Employees can be paid in crypto. Employees can spend in crypto. It changes everything.
Legacy finance is hanging on by a thread, and it’s this use-case that they are still clinging to. Once solved, DeFi domination will be complete.https://preview.redd.it/svft1ce422b51.png?width=700&format=png&auto=webp&s=9a6afc9e9339a3fec29ee2ae743c07c3042ea4ce
Impact on Genesis BlockAt Genesis Block, we’re excited to leverage these protocols and take this incredible technology to the world. Many of these protocols are already deeply integrated with our product. In fact, many are essential. The masses won’t know (or care about) what Tether, USDC, or DAI is. They think in dollars, euros, pounds and pesos. So while the user sees their local currency in the app, the underlying technology is all leveraging stablecoins. It’s all on “crypto rails.”
When users deposit assets into their Genesis Block account, they expect to earn interest. They expect that money to grow. We leverage many of these low-risk lending/exchange DeFi protocols. We lend into decentralized money markets like Compound — where all loans are overcollateralized. Or we supply liquidity to AMM exchanges like Balancer. This allows us to earn interest and generate yield for our depositors. We’re the experts so our users don’t need to be.
We haven’t yet integrated with any of the insurance or investment protocols — but we certainly plan on it. Our infrastructure is built with blockchain technology at the heart and our system is extensible — we’re ready to add assets and protocols when we feel they are ready, safe, secure, and stable. Many of these protocols are still in the experimental phase. It’s still early.
At Genesis Block we’re excited to continue to be at the frontlines of this incredible, innovative, technological revolution called DeFi.---
None of these powerful DeFi protocols will be replacing Robinhood, SoFi, or Venmo anytime soon. They never will. They aren’t meant to! We’ve discussed this before, these are low-level protocols that need killer applications, like Genesis Block.
So now that we’ve gone a little deeper down the rabbit hole and we’ve done this whirlwind tour of DeFi, the natural next question is: why?
Why does any of it matter?Most of these financial services that DeFi offers already exist in the real world. So why does it need to be on a blockchain? Why does it need to be decentralized? What new value is unlocked? Next post, we answer these important questions.
To look at more projects in DeFi, check out DeFi Prime, DeFi Pulse, or Consensys.
Other Ways to Consume Today's Episode:
Download the app. We're a digital bank that's powered by crypto:https://genesisblock.com/download
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