Author: Nathan Leung

Uniswap v3 DEX: What is it? New features?

Uniswap v3 is targeting to launch on 5 May 2021 on an L1 Ethereum mainnet, L2 deployment on Optimism is expected to follow shortly afterwards.

Learn how to use Uniswap with our Uniswap review and tutorial: beginners guide and advanced tips and tricks.

Uniswap v3 (Image credit: Uniswap)

Since the inception of distributed ledger technologies (DLT), the idea that no single entity controls the ecosystem has been at the center of decentralized finance(DeFi) growth and development. The introduction of automated market makers (AMMs) to blockchain systems expanded that idea by resolving liquidity challenges early DeFi pioneers faced.

As of today, AMMs are the primary way to trade digital assets within the DeFi sphere, allowing users to create liquidity pools, which incentivize liquidity providers (LPs) to supply pools with tokens or assets. Therefore, the more assets a pool has the more liquidity within that pool increases, which makes crypto trading easier.

Powered by a constant product formula, the AMM protocol has reached new heights under Uniswap’s pioneering technology, which has become the most popular AMM model in the DeFi space.

Background

Uniswap is a decentralized exchange (DEX) running on the Ethereum blockchain. Its revolutionary technology was first introduced in 2018 through the company’s first iteration, Uniswap v1. Uniswap v1 is an on-chain system of smart contracts on the Ethereum blockchain, implementing an automated liquidity protocol based on a “constant product formula”.

Uniswap v1 was the first of its kind, a type of exchange where anyone can pool assets into shared market-making strategies. The v1 protocol allowed users to create a liquidity pool with any pair of ERC-20 assets, ensuring the constant (K) that the product of the reserves (X and Y) cannot decrease as shown in “the constant product formula”.

Two years later, the ambitious Uniswap team again disrupted the international DeFi ecosystem with Uniswap v2, a better and new implementation of the Uniswap algorithm based on the same formula, with new highly-desirable optimizations, setting the stage for exponential growth in AMM adoption.

V2 enabled the creation of ERC-20 to ERC20 liquidity pools in addition to the previous ERC20 to ETH pools within the DEX, which facilitated over $135 billion in trading volume, becoming the top cryptocurrency exchange in the world.

Uniswap has inevitably become one the most popular platform on the Etherum blockchain. The platform’s unique infrastructure for DeFi has empowered developers, traders, and liquidity providers to engage in a secure and powerful financial marketplace.

Despite the astonishing success of v1 and v2, the pioneering Uniswap team seeks to make even more history with the recent introduction of Uniswap v3.

What is Uniswap V3?

Uniswap v3 is a noncustodial automated market maker implemented for the Ethereum Virtual Machine. In comparison to earlier versions of the protocol, Uniswap v3 provides increased capital efficiency and fine-tuned control to liquidity providers, as well as improves the accuracy and convenience of its price oracle, with a more flexible fee structure.

LPs now can provide liquidity with 4000x capital efficiency relative to Uniswap v2, earning higher returns on their capital. The new v3 implementations demonstrate that the Uniswap team values capital efficiency and its ability to pave the way for low-slippage trade execution, surpassing both centralized spot exchanges and stablecoin-focused AMMs.

Based on the same constant product formula as earlier versions of the protocol, LPs will have better control over price ranges in which their capital is used, with limited effect on liquidity fragmentation and gas inefficiency.

Additionally, v3 introduces a multiple fee tiers system, where LPs will be duly compensated for taking on varying degrees of risk. This version of the Ethereum-based algorithm seeks to be the most flexible and efficient AMM ever conceived by focusing on the importance of liquidity providers in the DeFi sphere.

Under v3 new features, LPs will benefit from increased exposure to favored assets and lower their downside risk, granting them the ability to sell one asset for another by adding liquidity to a price range entirely above or below the market price, approximating a fee-earning limit order that executes along a smooth curve.

Furthermore, v3 platform oracles are better and far more efficient than previous versions, as they are easier and cheaper to integrate providing time-weighted average prices (TWAPS) on demand for any period within the last 9 days, bypassing the need for integrators to checkpoint historical values.

Overall, Uniswap v3 anticipated groundbreaking innovations, and efficiency is set to impact the DeFi ecosystem in a big way. Despite all the added improvements, the gas cost of v3 swaps on Ethereum mainnet is cheaper than v2, further attesting to the tremendous technological advancements behind the platform.

Uniswap V3 New Features

Concentrated Liquidity

In Uniswap v3, LPs can centralize their capital within custom price ranges, providing greater amounts of liquidity at desired prices, enabling them to build unique price curves reflecting their preferences. This feature gives LPs the power to estimate the shape of automated market makers.

Active Liquidity

This specific feature ensures LPs’ wellbeing in the trading ecosystem. Specifically, when market prices change course and move outside an LPs’ specified price range, their liquidity is effectively removed from the pool and is no longer earning fees. This situation causes the LPs’ liquidity to shift to the less valuable asset while waiting for the market price to bounce back to the specified price range.

However, this concept allows LPs to actively update their price range accounting for the current or market set price range, and start earning trading fees again.

Range Orders

The idea behind the range orders implementation is to enable LPs to deposit a single token in a custom price range above or below the current price: If the market price enters into their specified range, they sell one asset for another along a smooth curve while earning swap fees in the process.

Powered by the concentrated liquidity concept, range orders are set to benefit LPs tremendously as it accounts for wider ranges which are particularly useful for profit-taking, buying the dip, and primary issuance events.

Non-Fungible Liquidity

The v3 protocol guarantees that LPs’ positions are represented by non-fungible tokens (NFTs). Nevertheless, commonly shared positions can be made fungible (ERC-20) via peripheral contracts or bridged protocols.

Flexible Fees

V3 offers users three separate fee tiers per pair of assets, 0.05%, 0.30%, and 1.00%. These options ensure that LPs model their margins according to expected pair volatility as LPs take on more risk in non-correlated pairs like ETH/DAI and, conversely, take on minimal risk in correlated pairs like USDC/DAI

Conclusion

The DeFi space has undoubtedly benefited from the advent of AMMs unique features, which have since given birth to audacious and pioneering platforms like Uniswap. The Uniswap ecosystem provides a complex yet efficient technology that has revolutionized decentralized crypto trading through its distinct implementations of liquidity pools.

From Uniswap v1 to the anticipated v3, users and LPs are presented with a series of improvements that will facilitate the use of decentralized assets and eventually catapult the DeFi ecosystem to ever newer heights.

Disclaimer: Cryptocurrency trading involves significant risks and may result in the loss of your capital. You should carefully consider whether trading cryptocurrencies is right for you in light of your financial condition and ability to bear financial risks. Cryptocurrency prices are highly volatile and can fluctuate widely in a short period of time. As such, trading cryptocurrencies may not be suitable for everyone. Additionally, storing cryptocurrencies on a centralized exchange carries inherent risks, including the potential for loss due to hacking, exchange collapse, or other security breaches. We strongly advise that you seek independent professional advice before engaging in any cryptocurrency trading activities and carefully consider the security measures in place when choosing or storing your cryptocurrencies on a cryptocurrency exchange.

January 1, 2023
Unbound Finance (UNB/UND): unlocking liquidity from AMM pools
Unbound Finance (UNB/UND) is a decentralised protocol that aims to unlock liquidity from automated market maker (AMM) pools. This allows users to instantly obtain crypto credit lines, as well as providing high-yield earning opportunities.

Background

Unbound Finance was launched in October 2020 by a publicly known team. It’s currently in the testnet phase and no token sale has been conducted yet. The team has claimed that they have major exchanges’ CEOs onboard as angels and currently working on audits for mainnet launch in the near future. It’s supported by Tomo Chain, Zilliqa, Frontier, Fuse Network, Enjin, among others.

What is Unbound Finance?

Unbound Finance is a decentralized protocol slated to unlock more use cases for liquidity pool tokens from the AMM market. Unbound is aiming to unleash the potential of these powerful assets and promote their further usage in DeFi protocols, without the need to redeem those liquidity pools tokens. It will also enable minting of a decentralized collateralized stablecoin called UND, synthetic Ethereum, and other synthetic assets with LPTs as collateral.

It’s essentially a derivative layer of automated market makers (AMMs) or orderbook-less decentralized exchanges (DEXes) tasked with ‘unlocking’ the total value locked (TVL) in DeFi protocols. This mechanism can retrieve liquidity from DEXs like Uniswap, Balancer, Bancor, Curve, etc.

According to the official documents, it will be debt and liquidation-free thanks to the use of high-quality liquidity pairs, large collateral ratios, and backup funds.

Unbound Finance supported AMM protocols (Image credit: Unbound Finance)

Synthetic Assets

Having introduced the term Synthetic assets, it’s a good idea to clarify what they mean. Synthetics are, as the name dictates, not the real thing but a copy of the original. It means that it is a representative of the underlying asset.

Generally, this is accomplished by tracking the price of an asset through on-chain oracles, which allows for their continuous availability and 24/7 trading, as well as usage in protocols. Synthetic assets can range from cryptocurrencies, fiat, stocks, index funds, precious metals, foods, bonds, and many more. If anything has a price in the market, it can be turned into a synthetic asset.

Aims And Objectives

The protocol is trying to become the primary source of liquidity provision for Liquidity Pool tokens (LPTs) in order to bring existing liquidity pools into active usage, act as an LPT treasury, mint and manage the synthetic assets tracking the price of an underlying, establish LPT role as collateral, create pools of liquidity pools, develop instruments for margin trades and yield compounding, and safeguard against loan liquidations.

Fees

Unbound Finance charges a fee for minting assets. Fees will be distributed as follows:
- 20% SAFU fund-
- 40% UND-DAI liquidity pool
- 20% team fund: this will be for further development of the project.
Unbound Finance Services

There are three primary services provided by the protocol. These include minting, unlocking, and earning services.

Minting

Unbound Finance allows users to mint the UND stablecoin and other synthetic assets by providing their LPT tokens as collateral. This allows them to put the value of their LPTs to use without having to liquidate them in a convenient manner, allowing them to access the funds immediately. The users are charged a minting fee and can only generate the synthetics according to the Loan-to-Value (LTV) ratio.

Unlocking

After the users return their borrowed funds, the UND or synthetics are burned and the collateral is released. Since the contracts are perpetual and devoid of an expiry date, the users can return the funds at any time without any deadline. There is no fee charged by the protocol for unlocking collateral.

Earning

Another service provided by the platform is the earning facility, where the liquidity providers are given rewards for providing liquidity to the platform pools. The rewards are competitive, variable, and derived largely from the initial mint transaction fees.

Unbound Finance Tokens (UNB/UND)

The primary token of the platform is the Unbound Finance (UNB) token, used for governance purposes and user participation. It can be used to signal intent on important parameters and tuning the performance of the protocol. UNB is an inflationary token and users staking the it will receive rewards to offset the yearly inflation of 4%.

The second token type on the protocol is the synthetics, minted from depositing LPT collateral and being withdrawn/burned once the borrowed amount has been successfully repaid. They don’t have a fixed cap and their actual amount in circulation will remain variable.

UNB tokenomics (Image credit: Unbound Finance whitepaper)

Unbound Finance – Supported Liquidity Pools

Unbound Finance is currently available on testnet only, but supports the following:
- Uniswap
- Balancer
- Bancor
- Mooniswap
- Curve.Fi
- Kyber
In the future, the liquidity pools of Dodo, Fulcrum, 0x, and Black Hole will be made available too.

Here’s their tutorial on how to use to the Unbound Finance testnet.

Conclusions

The first decentralized orderbook-less exchange was Bancor. And since then, DEXs have exploded in numbers and currently compete well against their centralized counterparts. However, the users providing the liquidity and getting the LPT tokens are stuck with an asset, which ironically isn’t liquid by itself. Unbound Finance seems to be the likely answer to address the shortcomings of LPT tokens.

Their further inclusion in the DeFi protocols and newfound uses will surely help boost liquidity and derivatives trading. The promise of no debt and no liquidation is another bonus point, as users can make use of the capital borrowed against collateral, without any fear of losing them. The perpetuity of the contracts allows the borrowed amount to be paid at any time.

Even though Unbound Finance is in its infancy and available only on testnet. The concept and the premise are powerful. Its execution remains to be seen, but if successful, it will be the first of its kind to allow users to mint assets against liquidity pool tokens (LPTs). Hence, it’s likely to set the tone for the upcoming projects and the integrations within the existing ones.

Disclaimer: Cryptocurrency trading involves significant risks and may result in the loss of your capital. You should carefully consider whether trading cryptocurrencies is right for you in light of your financial condition and ability to bear financial risks. Cryptocurrency prices are highly volatile and can fluctuate widely in a short period of time. As such, trading cryptocurrencies may not be suitable for everyone. Additionally, storing cryptocurrencies on a centralized exchange carries inherent risks, including the potential for loss due to hacking, exchange collapse, or other security breaches. We strongly advise that you seek independent professional advice before engaging in any cryptocurrency trading activities and carefully consider the security measures in place when choosing or storing your cryptocurrencies on a cryptocurrency exchange.
January 1, 2023
FinxFlo ($FXF): Cost-saving crypto trading?

Despite the apparent growth of the crypto ecosystem, one major problem faced by traders is the cost. Many retail traders often fall victim to exchanges that quote unfair asset prices. Unfortunately, these shortcomings can lead to distortions in the market. This is where FinxFlo comes in to provide a solution.

FinxFlo is a platform that seeks to allow its users to trade with 25+ exchanges (DeFi and CeFi based) from a single interface, with a one-time KYC verification process. Therefore, traders on FXF can access the best price for the asset to be traded. With just one account and one KYC process, traders can maximize the prices and rates provided by the platform.

Furthermore, the brokerage also enables traders to make informed decisions by providing them with accurate and real-time information and ensuring transparency.

Background

Founded in 2019, Finxflo comprises a multi-cultural team of individuals with successful stints in various industries such as Law, Finance, Fintech, etc.

The CEO and Co-founder, James Gillingham, is a household name in the world of investments, who has once owned a trade algorithm platform, which he sold off later at the tender age of 23 in a big deal.

Along with Thomas Plaskocinski, he is channeling all that experience towards creating a simple yet effective solution to most traders’ problems, namely, market volatility.

FinxFlo operates under an exemption granted by the Monetary Authority of Singapore (MAS) within the Payment Services Act 2019. Meanwhile, further regulatory approvals in other jurisdictions are underway.

What is FinxFlo?

FinxFlo is a crypto brokerage platform that aggregates offers from the top exchanges to create a fair market environment and provide more liquidity.

Using Decentralized Finance (DeFi) model and concepts, FinxFlo doubles as a price aggregator platform with brokerage services to help traders and investors identify the best buy and sell positions for digital assets.

That way, they can avoid the risks that exist within the crypto markets. But not only that, FinxFlo offers its users the privilege to trade at a low fee.

Through its native token, FXF, users can earn rewards by engaging themselves in various activities available on the platform (more details in the subsequent sections).

In short, the platform combines the best of Defi and CeFi into a single product.

The Advantages of FinxFlo

FinxFlo advantages (Image credit: FinxFlo)

Smart Order Routing

It’s the proprietary concept at the heart of the FinxFlo trade algorithm. Whenever a user enters an order, the platform automatically compares available prices on different exchanges and selects the user’s overall best option.

With it, users are ensured to derive maximum returns on their investment without having to swap platforms.

Dark Pool Trading

Front running, which closely resembles the popular pump and dump strategy, occurs when, as in most cases, a whale investor moves to cause a sudden change in the price of assets by creating a large transaction.

Cryptocurrencies are not immune to such manipulation. But this is where the Dark Pool feature comes in. The function protects users from unsuspected market movements by enabling users to exit a trade in the case of such events swiftly. At the same time, if the user can pull profits with his position, the trade will be allowed to continue.

A Unitary portal

In trying to keep pace with this fast-evolving industry, most crypto traders end up owning even more than five accounts with different exchanges to access the extra privileges offered on each.

But thanks to FinxFlo’s one account, one KYC, one wallet, and one interface policy, users can have all their needs met on a single portal without losing any of the benefits that come with having multiple accounts.

Furthermore, FinxFlo’s combination of the Ethereum and Tron blockchain network means, for the first time, traders can access different asset pairs not available elsewhere.

Token Mining

On other exchange platforms, traders’ rewards are the profits they make with successful orders. On Finxflo, even the list performing traders get rewarded for their activities.

This process is also referred to as Trade Mining.

FinxFlo Fees

On FinxFlo, a trading fee of 0.1% (for each buy or sell order) is deducted at the execution point. In addition, fund withdrawals are completely free.

Exchange Security

Security and safety are arguably the most sensitive issues users worry about when selecting a good crypto exchange. For several years, various protocols and upgrades have been developed to address this issue but theft and hacks are still on the rise.

For this reason, FinxFlo has partnered with Fireblock to insure users’ assets and also provide top-level security based on the latest cybersecurity technology.

FinxFlo token (FXF)

FXF is the utility token of the platform, which is built as a blockchain 3.0 asset to facilitate interoperability between two separate networks, Ethereum (as an ERC20 coin) and Tron (as a TRC20 coin).

To enjoy some of the most exciting benefits of the ecosystem, users must hold the FXF coins. Aside from that, there are other lucrative benefits that come with having an FXF token in one’s FinxFlo account such as staking and yield farming.

FXF token is available for trading on Uniswap, Gate.io and Bilaxy.

FinxFlo tokenomics (Image credit: FinxFlo whitepaper)

Staking

Trading fees accumulated over time are distributed to users through a reward pool system. To be eligible, token holders would need to stake their FXF holdings on the network. Users would have their rewards distributed via a smart contract relative to their staked coins.

Yield Farming

Similar to other DeFi platforms, FinxFlo offers a yield farming program. But unlike how it is being provided on other exchanges, FXF token holders are automatically listed as Liquidity Providers (LPs).

These locked tokens are used to create funds, which serve as margins for FinxFlo exchange partners. In return, LPs get additional FXF assets as rewards. Most crypto investors utilize this process (called Liquidity Mining) to create additional income streams for themselves.

Conclusion

With all the recent hype centered around crypto such as the Gamestop and Dogecoin debacle, major corporations like Tesla buying into Bitcoin, etc., many newcomers are now eager to join the blockchain movement, which also exposes them to massive risk.

Fortunately, Finxflo’s vision to mitigate the risks of trading overhyped digital assets. Therefore, if the project becomes widely adopted, the crypto universe will see an even bigger influx of new individuals who will actively participate in trading, liquidity mining, as well as other crypto activities.

Disclaimer: Cryptocurrency trading involves significant risks and may result in the loss of your capital. You should carefully consider whether trading cryptocurrencies is right for you in light of your financial condition and ability to bear financial risks. Cryptocurrency prices are highly volatile and can fluctuate widely in a short period of time. As such, trading cryptocurrencies may not be suitable for everyone. Additionally, storing cryptocurrencies on a centralized exchange carries inherent risks, including the potential for loss due to hacking, exchange collapse, or other security breaches. We strongly advise that you seek independent professional advice before engaging in any cryptocurrency trading activities and carefully consider the security measures in place when choosing or storing your cryptocurrencies on a cryptocurrency exchange.

January 1, 2023
MXC Exchange Allies With Solana to Launch Liquidity Sharing Protocol Raydium on M-Day
Following MXC Exchange’s declaration of support for Solana-based USDC-SPL protocol earlier in March 2021, the rapidly rising Seychelles-based exchange platform has announced its listing of another Solana project – Raydium, which is set to be launched on MXC’s M-Day program on March 18, promising exchange users the chance to win 4,500 Ray tokens during the unveiling of the project.

Raydium on Solana

Raydium’s listing is a step forward for both Solana and MXC Exchange, building an even stronger bond that will benefit both platforms tremendously.

Raydium is a market maker that offers high transaction processing speeds, a stable platform, shared liquidity, and super reduced transaction fees for its users. Built on Solana’s blockchain, Raydium was designed to take advantage of the order flow on the Solana-powered decentralized exchange (DEX) called Serum.

The project will see users enjoy the best prices as well as the flexibility to move digital assets across different pools on the network and beyond. Serum supports asset swaps through multiple blockchains.

Raydium’s decision to operate on Solana’s network was by no means an accident. The developers were able to lock on an opportunity to provide fast, reliable, and cheap transactions while cutting down on the high costs that would otherwise have been expended on Ethereum due to gas fees.

For example, in order to swap, farm, harvest, or unstake on Ethereum’s native automated market maker (AMM), you would be spending about $100. While the same transactions on Raydium cost only about 10 cents. The wide margin in fees afforded by Solana makes it the ideal platform to build a next-level market maker like Raydium.

Raydium’s Launch on M-Day

MXC Exchange’s devotion to innovative crypto projects is only rivaled by their allegiance to their users’ interests. This is the drive behind the 21^st M-Day offering to all users who participate. The offer grants those who do not sell their Ray tokens 24-hours after the launch the ability to redeem them for the assets the Ray tokens was initially bought with.

Participants would also be entitled to join a jackpot draw, a tradition in M-Day events. The schedule is listed below:
1. Ticket claim: 22:00 March 17th – 17:00 March 18th, (UTC+8)
2. Draw result will be released at 19:00 (UTC+8), March 18th
3. Asset exchange will be made at 19:30 (UTC+8), March 18th
At the core of the activities on Raydium is the “RAY token” which currently has 18.5 million tokens in circulation. The supply is set to peak at 555 million tokens. The token would receive SPL token support on MXC AND will be listed as a trading pair that includes RAY-USDC and RAY-USDT.

Raydium and MXC Collaboration

MXC initially demonstrated its commitment to be at the forefront of the most promising crypto projects with their listing of Solana’s USDC-SPL listing. This new union with Raydium spells a future pregnant with more inspiring collaborations.

With MXC exchange users getting privileged access to Solana’s products at their early stages, like the cheap and fast access they enjoy with USDC.

The partnership also speaks highly of MXC’s insight. The team has once again demonstrated their incredible intuition, being able to spot promising projects like Raydium before any other exchange. An element that has contributed to their extraordinary growth since it launched in April 2018.

Raydium-MXC Synergy

The founder of Raydium, AlphaRay expressed his delight in the partnership in a statement where he said:

“We are excited to partner with MXC to grow the Raydium and Solana ecosystem together. MXC’s strength in retail communities will greatly help Raydium to grow and bring highly efficient, low-cost DeFi products to the retail market.”

The enthusiasm was echoed by MXC exchange’s VP, Katherine Deng, who stated how pleased the team back at MXC was to bring their users the opportunity to take advantage of Raydium’s listing on M-Day, stating:

“M-Day gives users the chance to participate in discounted token sales of new and exciting projects like Raydium, while also giving them an opportunity to win awards.”

Disclaimer: Cryptocurrency trading involves significant risks and may result in the loss of your capital. You should carefully consider whether trading cryptocurrencies is right for you in light of your financial condition and ability to bear financial risks. Cryptocurrency prices are highly volatile and can fluctuate widely in a short period of time. As such, trading cryptocurrencies may not be suitable for everyone. Additionally, storing cryptocurrencies on a centralized exchange carries inherent risks, including the potential for loss due to hacking, exchange collapse, or other security breaches. We strongly advise that you seek independent professional advice before engaging in any cryptocurrency trading activities and carefully consider the security measures in place when choosing or storing your cryptocurrencies on a cryptocurrency exchange.
January 1, 2023
Shadows Network ($DOWS): new hub for synthetic assets?
Shadows Network ($DOWS) aims to be a hub for people to issue, trade, lend and borrow synthetic assets. The protocol is built using the Substrate blockchain network and is compatible with the Polkadot ecosystem.

Background

Iror Chen and Bruce Lin lead the Shadows project. Apart from being the co-founders, they double as the CEO and CTO, respectively. The two have extensive experience in diverse fields. To elaborate, Chen previously worked for Amphenol Group while Lin worked for Baidu.

Other Shadows team members include Ted Shao (co-founder and COO), Claire Cai (co-founder and CMO), Sue Xia (overseas CMO), and Liang Li (risk control).

Shadows’ list of partners includes Consensys Lab, NGC Capital, Polka Fund, Blocksync, DuckDAO, OneMax Capital, Oasis Capital, among others.

What is Shadows?

Shadows is a distributed platform focusing on the issuance, borrowing, lending, and trading of synthetic assets. The project leverages the Substrate framework that powers other popular DeFi networks like Polkadot.

Note that synthetics are derivatives or clones of real-world assets. Derived assets can be of anything from cryptocurrencies, stocks, indices, fiat, and commodities. Also called synths, they enable holders to share in the profits and losses of an asset without necessarily having such asset in their portfolio. Doing so opens the DeFi scene to a global audience who would be locked out of the space.

The platform sits on the Polkadot network as a parallel thread. As such, it has inter-chain compatibility with other platforms leveraging EOS and Ethereum to focus on synthetic assets. Cross-chain support opens the network to more blockchain-based assets. For instance, users can use Ethereum (ETH) or Bitcoin (BTC) to create synths.

Shadows integrates an off-chain worker to help capture the system outside the blockchain. Note that the platform uses the worker to replicate trusted oracles. Furthermore, the oracles receive data from external decentralized platforms to trigger activities inside the blockchain. Unfortunately, traditional oracles suffer from security, efficiency, and scalability.

The worker employs Substrate allowing it to perform non-deterministic tasks such as encryption and web requests, and other long-running tasks. The Shadows network achieves the above features through a layered system, focusing on different aspects of synthesizing the assets.

Critical Areas on the Synthetic Network

Synthetic Asset Issuance Agreement

The platform secures the synths using its native asset, DOWS (more on this later). Users deposit the token into a smart contract for them to gain a right to create synthetics on the network.

Consequently, the created tokens are DOWS backed. To reclaim back their tokens, users have to burn their synths. Note that the platform needs a collateralization ratio of 800 percent.

Synthetic Asset Transaction Agreement

The agreements support the trading of synths. These agreements minimize slippage and insufficient liquidity. Also, they ease and provide efficient trading.

Debt Collateral Lending Agreement

The platform employs lending pools that hold users’ debt into the pool to facilitate lending activities. How this works is simple. To elaborate, the borrowers access the pool to place a synth debt.

Next, they pay interest and receive the loan in synthesized USD (xUSD). The need for xUSD funding is to provide flexible financing. This funding option offers a balance between demand, supply interest, and rates.

What Drives the Shadows Network?

Four significant aspects power the platform.
1. Rewards system – Users are rewarded when they use the native token to create synths. However, the rewards only apply to those who have reached the needed collateralization ratio.
2. Governance – In the DeFi scene, governance is everything. On Shadows, the native token gives holders a voice when making governance decisions. Some areas falling under community governance include upgrading.
3. Staking – The base asset does more than just governance, the token can be staked as collateral and at the same time benefit from staking rewards.
4. Trading bonus – This goes to DOWS holders and is generated by those trading on the platform.
How Does Shadows Work?

First, note that the platform is compatible and connects to Polkadot.

How Shadows Network works

It works as an off-chain enterprise that connects to various parts such as inflationary supply, fee pool, and external services. It connects to Polkadot as a single service.

The Protocol Offers Three Types of Incentives.

The first type of incentive is where a user is charged 0.3% as the trading fee. How is this an incentive? It’s because they can send it to a fee pool and receive a mortgage in terms of DOWS.

However, the trading fee incentive’s applicability varies between users because it’s dependent on the amount of debt that the user has and the amount in the debt pool.

The second type of incentive goes to mortgagors who benefit from holding the base asset on a weekly basis. Notably, the amount of bonus received depends on how much debt the mortgagor has in the debt pool.

Third comes rewards for lenders in the lending pool. These incentives have a weekly timeline.

The Shadow Token ($DOWS) tokenomics

DOWS is the backbone of the Shadows network. Apart from governance, casting synths, lending, and distributing rewards, the token can also be used to power the token destruction mechanism.

The destruction part utilizes the transactions and debit pool fee. And, it follows a fixed ratio of 30% per week. Note that the token’s destruction is automatically driven by a smart contract. Observe that this makes the native token a deflationary base asset.

Shadows did a double Initial DEX Offering (IDO) on Ignition and DuckSTARTER. The allocation of tokens were as follows:
- Ecological Incentives: 63% — 63,000,000
- Early Investors: 20% — 20,000,000
- Foundation: 10% — 10,000,000
- Advisors: 5% —5,000,000
- Liquidity Provision: 2% — 2,000,000
The vesting periods for various allocations are as follows:

Shadows ($DOWS) vesting period

Is Shadows Network safe?

Recently the Shadows project faced some accusations because they are allegedly connected to another project that recently suffered an alleged “hack” of their smart contract.

On 6th March 2021, the Team Tweeted to address the concerns, saying that their smart contract codes were audited twice by Certik. And on both occasions the contracts were found to be secure and met the highest security standards.

The Team in their Tweet on 7th March 2021 also said that Shadows Network uses a proxy contract to upgrade its smart contract and deliver key functions such as issuing, trading, borrowing or lending synthetic assets on the network. Most notably, the proxy contract will deploy incentive DApps for users such as LP staking and DAO governance etc. From these Apps, 63 million $DOWS (representing 63% of the total supply of $DOWS) will be minted as a reward to the community. Once all 63 million $DOWS have been released, the Team will permanently remove the mint function from the Shadows smart contract. This has the effect of stopping the Team from producing any more $DOWS and most importantly, to potentially prevent the price of $DOWS from being diluted.

Further, this proxy contract and ERC20 contract are kept secure through multisig and is on Openzeppelin- an open-sourced protocol. The Team also notes that other popular names in the cryptocurrency scene i.e. Compound and Coinbase also use Openzeppelin.

Conclusion

Shadows helps bring traditional assets onto the blockchain. In doing so, the platform opens the conventional assets to more users. For instance, it brings these assets to DeFi users and those who don’t want to hold real crypto assets.

Notably, the platform takes on a layered-approach to bring these possibilities to life-enhancing functionalities. Furthermore, the DOWS token helps power different aspects of the Shadows network.

Disclaimer: Cryptocurrency trading involves significant risks and may result in the loss of your capital. You should carefully consider whether trading cryptocurrencies is right for you in light of your financial condition and ability to bear financial risks. Cryptocurrency prices are highly volatile and can fluctuate widely in a short period of time. As such, trading cryptocurrencies may not be suitable for everyone. Additionally, storing cryptocurrencies on a centralized exchange carries inherent risks, including the potential for loss due to hacking, exchange collapse, or other security breaches. We strongly advise that you seek independent professional advice before engaging in any cryptocurrency trading activities and carefully consider the security measures in place when choosing or storing your cryptocurrencies on a cryptocurrency exchange.
January 1, 2023
Public Mint ($MINT): can they bridge fiat and cryptocurrency?

Public Mint seeks to solve transaction complexity by bridging the blockchain and the financial world of fiat. According to Public Mint adoption has always been the concern of the cryptocurrency community. And while tokens are becoming increasingly popular, the number of new entrants in the space today is still not enough to spur massive acceptance of crypto-assets in retail stores.

Background

Public Mint was launched in March 2020, following two years of research and development. It was created to make banks capable of holding funds that could later be tokenized on the blockchain. Today, it has been mainly implemented to ease the experience of using fiat currencies in performing blockchain-based transactions.

Ever since the launch of the platform, it has already partnered with more than 200 banks that hold the fiat used to collateralize its tokens. Some of its prominent supporters are IBM Digital Asset Labs and Hyperledger.

What is Public Mint?

Public Mint is a decentralized, payment platform that aims to bridge the blockchain and fiat currencies. It offers tokenized fiat which is fully-collateralized and regulatory compliant. To secure the funds held in the platform’s accounts, they are also insured with the FDIC.

Public Mint can be used to open blockchain-based fiat accounts to conduct money transfers worldwide without the need for any third-party facilitator. And because the platform was designed to be decentralized, it will not have control over the ownership and management of its user funds.

The acceptance of payments via credit card, ACH, or wire transfer, are all made possible with the Public Mint platform as well. This makes it easier for anyone to perform transactions on the blockchain without having to exchange their fiat to crypto.

Public Mint’s Open platform is designed to support these functions and make it easy for anyone to tokenize any fiat in the network. Tokenizing through the platform simply means that you will be able to make a token counterpart of your local currency on the blockchain.

Features of Public Mint

Fiat-Native Blockchain

The platform supports the use of fiat in asset transfers and payments for network fees. Thanks to this feature, users do not need to purchase another digital asset just to be able to initiate transactions on the network.

Simplified Key Storage

It is easy for any user to store their private keys. The platform furnishes users with their own keys, which they can store in any cloud provider. Through this, the user has full control over his own funds without dealing with centralization problems like censorship.

Direct Fiat Access

Public Mint has a bank-to-chain feature that allows users to directly fund their wallets from various sources. At the same time, it also has a chain-to-bank feature that lets users directly withdraw their funds to their bank just using their wallet.

The platform also supports USDC, making it easier for any crypto user to interact with other blockchain platforms.

Pay others from your public mint wallet

Multi-custodial

There are multiple custodians on the platform. They are composed of banks and other regulated financial institutions. Their purpose is to hold funds while the multi-custodial structure of the network ensures that there will be no single point of failure in the system.

Public Mint supports several major payment merchants

Instant Transaction Settlement

Transactions made on Public Mint can be settled in as fast as 3-5 seconds because the network offers finality with just one confirmation.

Ethereum-Compatible

The network is compatible with Ethereum, which means that any developer can build on the platform and improve it. It can also support decentralized applications that are established on the Ethereum network.

What is the difference between Public Mint’s tokenized fiat and stablecoins?

Stablecoins like Tether (USDT), USD Coin (USDC), TrueUSD (TUSD), were only designed to support one fiat: the US Dollar. And to purchase them, there are times that you have to first buy another cryptocurrency trading pair. According to the team behind Public Mint, this process can be too complex for a newcomer and it also exposes them to the volatility of other digital assets.

Public Mint has its own fiat-dedicated network. The platform supports a comprehensive ecosystem that is designed to support the direct use of fiat currencies to make blockchain-based payments. And unlike the usual stablecoin, Public Mint is designed to support the use of multiple fiat currencies on the platform

Conclusion

Public Mint is a strong competitor among stablecoin platforms. However, its strength lies in its ability to facilitate easy and real-time transactions. If its partnerships with banks prosper, it can support a global payment ecosystem that will not fully rely on a blockchain. This addresses the problem most stablecoins users face in terms of transaction time and costs.

Moreover, it can be a less volatile medium of exchange since it is collateralized by fiat and not by other digital assets. If ever the platform gets hacked and its funds are stolen, users are secured by its FDIC-insurance. Looking at where Public Mint is today, its potential to be the go-to alternative from stablecoins is high.

Disclaimer: Cryptocurrency trading involves significant risks and may result in the loss of your capital. You should carefully consider whether trading cryptocurrencies is right for you in light of your financial condition and ability to bear financial risks. Cryptocurrency prices are highly volatile and can fluctuate widely in a short period of time. As such, trading cryptocurrencies may not be suitable for everyone. Additionally, storing cryptocurrencies on a centralized exchange carries inherent risks, including the potential for loss due to hacking, exchange collapse, or other security breaches. We strongly advise that you seek independent professional advice before engaging in any cryptocurrency trading activities and carefully consider the security measures in place when choosing or storing your cryptocurrencies on a cryptocurrency exchange.

January 1, 2023
Polkadex: Polkadot’s DEX for the DeFi ecosystem
Polkadex is a new addition to the Polkadot ecosystem. Polkadex a decentralised cryptocurrency exchange (DEX) concentrating purely on tokens powering decentralised finance (DeFi) applications through a user-friendly interface and lightning-fast transactions.
Table of Contents

Toggle
Background

What is Polkadex?

Key Components of Polkadex

Fluid Switch Protocol

Trading Bots

Ethereum Bridge

High Performance

Polkadot Parachain

Types of Trades Supported by Polkadex

Two Critical Polkadex Partnerships

Polkadex X KILT Protocol X Fractal

Polkadex X Cryptecon.org

Current status of Polkadex

Roadmap: What’s next for Polkadex?

Conclusion

Decentralised Finance (DeFi) series: tutorials, guides and more
Background

Polkadex is developed by a team of highly skilled professionals led by Matthias Hafner (cryptoeconomic advisor), Vivek Prasannan (executive director), Gautham J (CEO & tech lead), and Deepansh Singh (COO). In addition, the team comprises advisors on artificial intelligence, machine learning, and banking.

The project has struck key partnerships with notable firms such as CMS, Cluster, Blocksync Ventures, Existential Capital, Web3 Foundation, among others.

What is Polkadex?

Polkadex is a non-custodial decentralized platform powering the P2P exchange of tokens used in the DeFi ecosystem. The platform looks forward to building a financial-inclusive future through bridges that connect traditional and decentralized finance spaces.

The project leverages the power of the Polkadot platform.

The decentralized exchange is designed to solve liquidity issues plaguing many platforms in the market today. The root of the problem is the use of an orderbook on a decentralized protocol.

The introduction of automated market-maker (AMM) as the solution led to the birth of Uniswap and other DeFi protocols. Unfortunately, the approach had its own limitations.

For example, it can only be beneficial when there’s a price difference on exchanges using an orderbook. However, even though AMMs rely on orderbook-based platforms, these platforms don’t need AMMs for them to run.

To bridge the disconnect, Polkadex brought AMMs and the orderbook together. The project is unique because it uses on-chain bots for market making.

Key Components of Polkadex

To bring its vision into focus, the project is built on FIVE core components. They include:

Fluid Switch Protocol

The switch changes between the platform’s orderbook and automated market-making AMM. The shift ensures that the decentralized exchange (DEX) has seamlessly-flowing liquidity for traders and liquidity providers.

By utilizing professionally-designed AMM algorithms, Polkadex provides a fully-supported orderbook, which in turn eradicates impermanent loss and price slippage, which are the biggest ills in the DeFi sector.

Trading Bots

Polkadex powers high-frequency trading using trading bots. Notably, these bots handle both institutional and retail customers. They use a carefully manicured architecture that optimizes cancellation fees by managing traders’ entry and exit points depending on the situations in the market. (radiomusical.com)

The bots are also used to perform on-chain market making. This approach fuses AMMs with an orderbook. How does this work?

When the bots don’t find a match during a trade, they automatically place the trade in an orderbook adding liquidity to the network.

When a trade doesn’t find a match in the orderbook, the bots are tasked with finding a suitable pair. Note that trades on Polkadex are only completed using the best price.

Ethereum Bridge

With most DeFi networks running on the Ethereum blockchain, Polkadex employs a trustless Ethereum bridge to facilitate the movement of any token to the decentralized exchange. Consequently, it makes it possible to interact with other liquidity providers in a trustless way that allows users to maintain control of their virtual wealth.

High Performance

Currently, Polkadex is operating in a testnet capable of reaching a speed of 300 transactions per second (tps). Although this speed is enough in the current landscape, the project targets a throughput of 20,000 tps.

Polkadot Parachain

The exchange incorporates the Polkadot Parachain as an additional way to drive liquidity into the DEX. However, the parachain is only used to bring tokens from the Polkadot ecosystem to the Polkadex world.

During the movement, the security of the tokens is provided through an interoperability layer provided by Polkadot. In addition, the layer assumes a non-custodial approach letting token holders have full control of their digital wealth, effectively eliminating centralized service providers.

Types of Trades Supported by Polkadex

The exchange supports market and limit orders. Limit orders enjoy zero trading fees while market orders incur a 0.2 percent trading fee.

The main reason for the difference in trading fees is that limit orders add liquidity to the platform while market orders remove liquidity. Liquidity providers share the trading fee charged on market takers on a 50-50 ratio with the Polkadex team.

Since bot-based transactions aren’t viable on a decentralized exchange using smart contracts, Polkadex moves above this hurdle by removing network fees.

However, this presents another problem where malicious actors can attack the application through a DDoS (Distributed Denial of Service) attack. To guard against such incidents, Polkadex lets the blockchain anticipate such attacks and impose a network charge for specific trades.

The exchange uses several methods to determine a potential DDoS threat. For instance, if a trade has an invalid price, trading pair, order type, or insufficient balance, then it’s categorized as a likely DDoS attack.

Two Critical Polkadex Partnerships

Polkadex X KILT Protocol X Fractal

Polkadex joined hands with KILT Protocol and Fractal to bring decentralized know-your-customer (KYC) functionalities to the DEX. The partnership saw Fractal, an identification firm, and Polkadex leverage KILT’s infrastructure to manage KYC procedures needed by the exchange.

The move eases the onboarding process for the DEX’s users. Note that KILT stores customer information. Thus, with the collaboration, new exchange users are directed to the KILT platform, where they set-up a wallet that stores their data in a decentralized way.

Polkadex X Cryptecon.org

This partnership involved including Cryptecon’s Matthias Hafner into the DEX’s advisory board. Hafner’s experience in developing economic models helps the exchange effectively merge its orderbook with multiple AMMs.

Current status of Polkadex

Polkadex is currently in the testnet phase and has recently released version 2.0. New features in this release include:
1. ability for the public to use testnet tokens to submit trades; and
2. ability to watch live trades being executed by the Polkadex engine.
To participate in the testnet, you will need to download the Polka Chrome extension and create an account. Then you can ask for testnet tokens in their official telegram group.

Polkadex interface (Image credit: YouTube)

Roadmap: What’s next for Polkadex?

The next exciting phase for Polkadex of course would be its mainnet launch. It appears that they intend to be on track for mainnet launch in Q1-Q2 2021.

As for Polkadex’s token sale, they have indicated on their Telegram group that the community round will take place in March 2021.

Polkadex roadmap (Image credit: Polkadex)

Conclusion

Polkadex takes a superior approach in fusing AMMs with the orderbook through the inclusion of on-chain market-making bots. Notably, the provision of a user-friendly design, a high throughput, and a non-custodial approach add to the exchange’s uniqueness among other DEXs in the market.

Additionally, its partnership with KILT and Fractal eases the onboarding process while the Cryptecon collaboration enhances its Fluid Switch component.

Decentralised Finance (DeFi) series: tutorials, guides and more

With content for both beginners and more advanced users, check out our YouTube DeFi series containing tutorials on the ESSENTIAL TOOLS you need for trading in the DeFi space e.g. MetaMask and Uniswap. As well as a deep dive into popular DeFi topics such as decentralized exchanges, borrowing-lending platforms and NFT marketplaces

The DeFi series on this website also covers topics not explored on YouTube. For an introduction on what is DeFi, check out Decentralized Finance (DeFi) Overview: A guide to the HOTTEST trend in cryptocurrency

Tutorials and guides for the ESSENTIAL DEFI TOOLS:
More videos and articles are coming soon as part of our DeFi series, so be sure to SUBSCRIBE to our Youtube channel so you can be notified as soon as they come out!

Disclaimer: Cryptocurrency trading involves significant risks and may result in the loss of your capital. You should carefully consider whether trading cryptocurrencies is right for you in light of your financial condition and ability to bear financial risks. Cryptocurrency prices are highly volatile and can fluctuate widely in a short period of time. As such, trading cryptocurrencies may not be suitable for everyone. Additionally, storing cryptocurrencies on a centralized exchange carries inherent risks, including the potential for loss due to hacking, exchange collapse, or other security breaches. We strongly advise that you seek independent professional advice before engaging in any cryptocurrency trading activities and carefully consider the security measures in place when choosing or storing your cryptocurrencies on a cryptocurrency exchange.
January 1, 2023
Glitch ($GLCH): world’s first “for-purpose” DeFi protocol?
Glitch is a platform that seeks to complement the Ethereum network by providing a protocol specifically for DeFi applications.

Ethereum brought the possibilities of blockchain technology to life by birthing many crypto-based protocols that leverage its smart contract feature to build incredible financial applications. The sporadic development of these applications, however, has weighed down the Ethereum network, causing congestion and inefficiencies.

While many are placing their hope on the full-deployment of Ethereum 2.0, other innovators don’t have that patience, and therefore, are creating their own solutions, such as Glitch.

Background

Sean Ryan, the founder of Glitch, is a business development expert who had contributed to the creation and acquisition of several SAAS products and companies before the creation of his blockchain project.

Ryan has advocated for the cryptocurrency industry since 2015 and has developed a passionate interest in Decentralized Finance (DeFi) systems over the years.

He created Glitch in August 2020 and was able to leverage his finance and business development experience to put together an incredible team to build a DeFi solution now known as Glitch Protocol.

Hong-Kong serves as the platform’s development base.

What is Glitch?

Glitch protocol is a blockchain super protocol constructed to support and provide a working framework for decentralized financial applications to be built upon, and is designed to work in symbiosis with the Ethereum platform.

It aims to be a scalable solution, providing increased throughput that would enable the process of thousands of transactions every second.

Described as the world’s first “for-purpose” DeFi protocol, it offers a smart-contract platform for facilitating decentralized applications (dApps). In addition to the support it provides, the Glitch protocol also provides an enhanced user experience and efficient cross-chain interoperability.

How does Glitch Work?

As a solution that prioritizes user experience, it is designed to work effectively to remove redundancies caused by non-functional applications. However, its primary selling point is its high scalability, cost-effectiveness, and significantly increased throughput.

The core concepts and features responsible for bringing these ideas to life are explained in the next few paragraphs.

Consensus Mechanism

The Ethereum platform used the same framework as Bitcoin to improve its consensus mechanism from a Proof of Work (PoW) to a Proof of Stake (PoS) system. Glitch protocol, on the other hand, employs a faster consensus mechanism known as Delegated Proof-of-Stake (DPOS).

In the DPOS mechanism, stakeholders reach consensus by outsourcing the network’s security to third-parties known as ‘block producers.’

These individuals are authorized to create a new block every 0.5 seconds. Byzantine Fault Tolerance (BFT) is imposed on block producers to prevent block creation on multiple forks. Despite having a bypass to this limit, the protocol would automatically change consensus to the longest chain.

What’s unique to Glitch’s consensus mechanism, however, is that voters do not select the block producers. Instead, each stakeholder is given an equal chance at block creation. This is to ensure fairness in the governance system.

The Vault

The Vault is the system by which profit is distributed on the Glitch protocol. An immutable vault on the Glitch Blockchain collects 20% of all network fees and other revenues generated from the dApp. The deposit is automatic and shared among stakeholders on the network.

This revenue-sharing model encourages active participation in the network while fostering community support. The model also creates a positive feedback loop where the community supports developers and is incentivized to continually do so.

This loop drives the protocol forward, which maintains the platform’s progress.

Token Wrapping

Token wrapping on Glitch involves mirroring ERC-20 tokens from Ethereum on its platform with its GRC-20 token standard.

Users with tokens on the Ethereum network can register their Ethereum address on the Glitch protocol. Their tokens can then be mirrored as a Glitch coin during an initial snapshot.

This way, developers can simulate products and dApps from Ethereum while benefiting from the faster throughput and circumventing the high transactional costs they would otherwise have to work with on ETH. And while token wrapping is currently being developed for ERC-20 tokens alone, there are plans to incorporate other blockchains.

Glitch Token ($GLCH)

The Glitch Protocol allows the use of a single token, known as Glitch Token (GLCH), for all transactions and dApps be built across its ecosystem. This ensures consistency for all applications that utilize the network. In addition, users can exchange GLCH tokens on Uniswap.

The total supply for the native token (GLCH) in circulation is 88,888,888 GLCH. After the public sale, 15% of the total supply (i.e. 13,333,333 GLCH) will be openly circulating.

What is GLCH token? (Image credit: Medium)

Glitch GLCH Token Distribution

8,888,888 GLCH had been sold in the seed round at $0.03375 / GLCH. 0.625% of tokens will be released weekly for 4 months.

22,222,222 GLCH had been sold in the private round 1 at $0.0675 / GLCH. 3.125% will be released weekly for 2 months.

• 4,444,444 GLCH had been sold in the private round 2 at $0.07875 / GLCH. 1.125% will be distributed weekly for 1 month.

• 13,333,333 GLCH had been allocated to the public sale at at $0.09 / GLCH. There were immediately unlocked upon listing on 11 January 2021 at 6:00am PST.

Glitch Rewards Program

Glitch Finance had provided initial liquidity on the GLCH/ETH pair on Uniswap. To incentivise users to provide liquidity, Glitch has a LP Rewards Program where they have allocated 888,888 GLCH (i.e. 1% of the total supply of GLCH) for rewarding participants. This program will run for 3 months starting on 17 January 2021.

Glitch DAO

The Glitch Protocol is governed by a network called the Glitch DAO (Decentralized Anonymous Organization). The DAO’s members are stakeholders who locked up their Glitch tokens in various pools.

The Glitch DAO has a unique structure, which employs two different DAO models to govern the protocol at its different stages. These two models have been engaged as a solution to conflicting incentives that are borne out of the need to support both Ethereum-based dApps on the Glitch network, as well as native dApps built from scratch on Glitch.

This difference in product-based risks the problem of exclusion if the DAO was based on either platform (Ethereum or Glitch).

The first model is an off-chain voting system, which uses an oracle to assign voting weights to either platform. This way, the potential exclusion would be mitigated. Yet, this model is vulnerable to fraud through oracle manipulation, especially when there is a substantial TVL (Total Value Locked) on native Glitch products.

The other model is the on-chain DAO, which would see the establishment of two separate DAO’s that govern and support the Glitch Protocol on their platforms. Both DAO would contribute to the progress of the ecosystem.

For the time being, before the TVL becomes significant, the off-chain DAO model would be used.

Conclusion

Most DeFi enthusiasts agree that the current financial system has to be decentralized for the ideal of a free market to come to pass. Transactions and processes should be transparent and accessible by anyone with interest.

With the power of blockchain technology, this revolution is closer to home than ever as DeFi Innovators are already building applications for the Ethereum 2.0 platform. All that is needed now is a good network of smart contracts that is fast and efficient.

Protocols like Glitch would help achieve that outcome as a complementary protocol to the Ethereum.

Decentralised Finance (DeFi) series: tutorials, guides and more

With content for both beginners and more advanced users, check out our YouTube DeFi series containing tutorials on the ESSENTIAL TOOLS you need for trading in the DeFi space e.g. MetaMask and Uniswap. As well as a deep dive into popular DeFi topics such as decentralized exchanges, borrowing-lending platforms and NFT marketplaces

The DeFi series on this website also covers topics not explored on YouTube. For an introduction on what is DeFi, check out Decentralized Finance (DeFi) Overview: A guide to the HOTTEST trend in cryptocurrency

Tutorials and guides for the ESSENTIAL DEFI TOOLS:
More videos and articles are coming soon as part of our DeFi series, so be sure to SUBSCRIBE to our Youtube channel so you can be notified as soon as they come out!

Disclaimer: Cryptocurrency trading involves significant risks and may result in the loss of your capital. You should carefully consider whether trading cryptocurrencies is right for you in light of your financial condition and ability to bear financial risks. Cryptocurrency prices are highly volatile and can fluctuate widely in a short period of time. As such, trading cryptocurrencies may not be suitable for everyone. Additionally, storing cryptocurrencies on a centralized exchange carries inherent risks, including the potential for loss due to hacking, exchange collapse, or other security breaches. We strongly advise that you seek independent professional advice before engaging in any cryptocurrency trading activities and carefully consider the security measures in place when choosing or storing your cryptocurrencies on a cryptocurrency exchange.
January 1, 2023
Paralink Network ($PARA): expanding the potential of DeFi apps with data
Paralink Network is a platform built on Polkadot sourcing crucial real-world data for decentralised finance (DeFi) applications.

Blockchain technology has huge potential, but blockchain applications are limited by what real-world data they can access. Without this crucial real-world data, blockchain cannot be used in areas like prediction markets, insurance, litigation, or other coordination problems that rely on social institutions and corporations. This is commonly known as the oracle problem.

While several solutions, like Chainlink’s decentralized oracles, are already being used, Paralink has made its own headway through the development of a cheap and efficient solution.

Background

Jan Knezevic, Founder and CEO of Paralink, is a Slovenian auditor who had previously worked in financial units, such as KPMG, one of the Big Four accounting organizations, in 2018.

During his time there, he developed an appreciation of blockchain technology. Like many other cryptocurrency enthusiasts, he was able to recognize the restrictions of blockchain applications when exchanging real-world information.

He saw that for such applications to be useful for complex industries like the stock market, they had to have verified information flow from the real world. Realizing that the gambling industry also needed reliable data flow, especially for platforms like casino utan svensk licens, he set out to bring a scalable cost-effective solution to the problem. This led to the development of the project now known as Paralink.

What is Paralink?

Paralink is an oracle platform that provides real-world data ingress across multi-chain networks. The platform makes it possible for applications built on blockchain networks like Ethereum and Polkadot to interact with traditional web interfaces.

It is developed to help distributed systems communicate effectively with each other as well as the outside world. With Polkadot providing the supporting architecture and framework for its integration, Paralink functions as a substrate.

In addition to collecting and organizing real-world data for Blockchain application, the platform also confirms their validity. The data could be anything from sports, weather, elections to financial data, stock, foreign exchange, etc.

It can carry out all these functions through an open-source software called the ‘Paralink node’. The platform is currently designed with a focus on financial applications like the stock market and insurance.

How the Paralink Node Works

The Paralink node is the center of the platform. As stated, the node is open-source software. It is built to access and collect real-world data that channels back to smart contracts via callbacks.

Paralink Network (Image Credit: Medium)

The node can be run independently as a centralized medium for real-world data into blockchain applications. That way, the solution is much cheaper. However, it is more practical for a node to be operated by self-organizing quorums to provide a strong, sustainable data ingress service.

The node is compatible with different data protocols including JSON, HTML, XML, SQL and Grpc. The creators are working to improve its interaction on different APIs actively.

Developers can then query data from sources outside of the Blockchain using Paralink Query Language (PQL).

Currently, the Paralink node is built to support just the Ethereum and Polkadot blockchain network. However, the long term goal is to build a flexible node compatible with any public chain, thanks to the node’s architecture and open-source model.

How Paralink is Secured

To achieve the goal described in its whitepaper, Paralink has to be effectively flexible enough to be compatible with a wide range of Blockchain applications and protocols. To this end, the platform is offered in three different security models, each with varying characteristics concerning cost, convenience, and security.

Simple Ingress

This is the most cost-effective model available. Here, Paralink nodes are available for use on multi-chain networks via any third-party data source. The model is simple to implement through PQL definition. It is also fast and can certify the authenticity of multiple data sources.

It has a major drawback, however, in that it requires trust in a centralized node operator. Furthermore, it is also ineffective for complex financial applications.

Trusted Ingress

This model is an upgrade to the first-described simple ingress, which utilizes encrypting PQL results with cryptography. The results are accompanied by private decryption keys from reputable data providers.

As a step-up from the rudimentary model, it is highly functional for financial applications. Other types of applications like prediction markets and gambling platforms can be also covered.

Trusted ingress is also cheap and effortless to implement. Moreover, callback support is also available to all chains without the need for a bridge. However, it is susceptible to being breached due to a single point of failure.

On-chain Security

On-chain security is the last security model available, which does not depend on a single source for verification. Hence, it is almost impossible to break. This is especially useful for money markets, derivatives, and other financial applications that involve high-stakes.

On the other hand, the model needs linking networks (bridges) like Ethereum and Polkadot, hence, requires more chain coordination to pull off.

Para Token ($PARA)

PARA is the native governance token of the Paralink platform. Users are incentivized to hold PARA tokens in order to enjoy governance rights and earn APY based on the amount they hold (which in turn must be staked).

PARA tokenomics

There is a maximum supply of 10 billion PARA tokens. The allocation and distribution of PARA tokens are as follows:

PARA token distribution (Image credit: Medium)

The distribution system is quite similar to other crypto protocols. 13.5% of the total would be shared among the developing team after a vesting period of two years. About 18% would be kept as reserve to as a buffer. 20% would be disbursed as nominator rewards, another 20% for Validator rewards.

10% would be deployed for the ecosystem. This will serve as incentives for early Paralink adopters and relayers.

Paralink Network ($PARA) token public sale?

In an update on 1 February 2021, Paralink have confirmed that they will not be holding a public sale of the PARA token. Their reason for this is due to the inherent unfairness of the auction process, and difficulties in completing the KYC process for purchasers.

However, Paralink still wants its eventual token holders (who can purchase the token when it is listed on exchanges) to have more incentives. So the tokens that were initially reserved for the public sale will now go into the lockup rewards pool.

Conclusion

Without a doubt, the cryptocurrency industry’s future depends on how well its application can integrate with the real world. To elaborate, financial applications need to be able to exchange real-time information with real-world entities to ensure an accurate, reliable evaluation of assets for buyers and sellers — which is the basis for Paralink nodes’ development.

Blockchain networks would require secure and cost-effective solutions like this for seamless communication among the various chains, as well as the outside world before it can unleash its latent potentials.

Decentralised Finance (DeFi) series: tutorials, guides and more

With content for both beginners and more advanced users, check out our YouTube DeFi series containing tutorials on the ESSENTIAL TOOLS you need for trading in the DeFi space e.g. MetaMask and Uniswap. As well as a deep dive into popular DeFi topics such as decentralized exchanges, borrowing-lending platforms and NFT marketplaces

The DeFi series on this website also covers topics not explored on YouTube. For an introduction on what is DeFi, check out Decentralized Finance (DeFi) Overview: A guide to the HOTTEST trend in cryptocurrency

Tutorials and guides for the ESSENTIAL DEFI TOOLS:
More videos and articles are coming soon as part of our DeFi series, so be sure to SUBSCRIBE to our Youtube channel so you can be notified as soon as they come out!

Disclaimer: Cryptocurrency trading involves significant risks and may result in the loss of your capital. You should carefully consider whether trading cryptocurrencies is right for you in light of your financial condition and ability to bear financial risks. Cryptocurrency prices are highly volatile and can fluctuate widely in a short period of time. As such, trading cryptocurrencies may not be suitable for everyone. Additionally, storing cryptocurrencies on a centralized exchange carries inherent risks, including the potential for loss due to hacking, exchange collapse, or other security breaches. We strongly advise that you seek independent professional advice before engaging in any cryptocurrency trading activities and carefully consider the security measures in place when choosing or storing your cryptocurrencies on a cryptocurrency exchange.
January 1, 2023
Tidal Finance ($TIDAL): customized insurance for cryptocurrencies?

Tidal finance has developed a protocol to protect capital invested in Liquidity Pools (LP) from data breaches and hacks through insurance pools.

The DeFi space grew exponentially in 2020— unperturbed by the general uneasiness surrounding the pandemic. By the end of the year, the total value locked (TVL) in LPs have grown from $500 million to $27 billion.

Attracted by the prospects of blockchain technology and its huge potential returns, LP providers had deposited billions in dollars worth of crypto assets to the advancement of the DeFi subsector. But with increased hacks and security breaches, LPs are becoming significantly more skeptical about their investments. This is where Tidal Finance comes in with a solution.

Background

Chad Liu, the founder of Tidal Finance, is an engineer and mathematician who had noticed that the Defi industry was stagnated by insufficient risk tolerance.

And in 2020, Liu was introduced to Co-founder Dan Raykhman (now CTO), with whom he shared the same vision. Liu had a background in finance and business. And together, they ventured to capitalize on their expertise to build a decentralized insurance market — now Tidal Finance.

What is Tidal Finance?

Tidal finance is an open market that allows users to create programmable insurance pools for different asset configurations.

Essentially, Tidal Finance is a market that encourages the creation of liquidity pools while also providing the resources necessary to protect the LP provider’s capital.

Tidal gets LP providers to create reserve capital for different pools. This way, many mutual cover pools are created. Whenever a user wishes for additional protection for (insure) his capital, he can purchase any of the available mutual coverage.

Tidal finance is built on the Polkadot network where it functions similarly to Balancer, but with improved security against loss capital, to improve liquidity for various emerging crypto assets.

Insurance Pool

Tidal Finance provides a framework that allows users to create customizable insurance pools. Each pool, regardless of asset-pair, can be covered by different terms (premium, cover period, etc.) LPs are then at the luxury of choosing which pool best satisfies their needs. There are currently 3 asset pairs that are covered: COMP.DAI, Aave.ETH, and Uni. (ETH, WBTC).ETH.

How Tidal Finance Works

The platform is an open market. That is, it only provides the tools needed to create an insurance pool. Therefore, users can configure pools using these tools to create an abundant insurance market that offers different conditions and terms (for different pools of protocols, tokens, and other assets) to LPs looking to stake their digital assets.

At the heart of every insurance pool is a Reserve Smart Contract. Here, reserve funds are provided by LPs. This helps to increase the reserve capital efficiency, protocol auditing, and improve risk management.

To ensure that the insurance pool created is sustainable, a vetting process is carried out while the insolvency risk is examined. And if the pool is assessed to hold out, it is allowed into the market where LPs and Insurance buyers can interact freely.

How Tidal Finance works (Image credit: Tidal Finance)

Basic Single Asset vs. Multi-Asset Pools

Basic single asset pools involve coverage for single asset types. While the risks involved are straightforward and pretty easy to calculate, the rewards are comparatively smaller.

On the other hand, multi-asset pools combine different assets and smart contracts to make a fairly complex insurance pool. It allows sufficient leverage as well as risk for high reward potentials.

Features of Tidal Finance

Tidal Finance is an aggregate of highly functional features that allows the creation of an insurance pool.

Pool Creation Template

Insurance pool templates are created by choosing from the available list, smart contracts, and assets to be covered. Then, other parameters can be customized, including the coverage duration and leverage ratio.

Auditors can now look at the template to assess the insolvency risk during the vetting process.

Approved pool templates are made available on the Tidal market for LPs to use. Furthermore, LPs can find pool templates that meet their specific token/protocol needs.

Pool Statistics and Ranking

The Tidal market provides a statistical display of the performance of available pool templates. The statistical data are collected from previously created pool templates.

Each pool template is indexed into a ranking list. The ranking provides the weighted average of key metrics, including current & max pool capital, current and max return on capital, current and max covered amount, capital reserve ratio, etc.

Users can also search through available pools using the ranking order.

Controlling Algorithm

Tidal uses algorithms to regulate the activities of pool creators to mitigate risk exposure. The combined effects of several algorithms guide pool creators to manage risk effectively. At launch, tidal would provide a list of rules to guide the activities of each insurance pool. These rules were constructed to mitigate risk and ensure the success of insurance pools.

Controlled algorithms that would be initiated at launch would enforce these guidelines.

Earn returns with Tidal Finance liquidity pools

Tidal Finance also lets you provide liquidity into their 3 liquidity pools to earn returns. The lockup period ranges from 30-90 days and the apparent return ranges from 20% to 300%.

Tidal Finance liquidity pools (Image credit: Tidal Finance)

Tidal Token ($TIDAL)

Tidal Finance’s token $TIDAL is the native token to the Tidal platform. The token is vital to the platform’s smooth operation as it allows holders to vote on important decisions regarding the project and rewards all the various participants.

When the Tidal protocol generates revenue, holders of the $TIDAL token are entitled to a percentage of it based on their staked amount and purchased amount of covers. This scheme is intended to incentivize users to participate actively in the Tidal community. Other than the small percentage reserved for this purpose, the rest of the revenue is deposited in the treasury wallet, which is an emergency backup fund for insurance pools running out of reserves.

The distributed percentage is adjusted frequently to prevent inflation.

Governance

The tidal protocol is managed by a Decentralized Autonomous Organization (DAO). It is made up of stakeholders that are LPs, Pool creators, and other users. But any other holder of the token qualifies as a member of the Tidal DAO.

Members of the DAO are able to propose changes and vote on them in a transparent approach. However, issues with higher stakes are left to the deliberation of long-term holders alone.

Partnership with Reef Finance

Tidal has partnered with another member of the Polkadot ecosystem, Reef Finance. The aim of this partnership is to promote decentralised smart contract insurance solutions to increase security for platform users. In particular, Tidal Finance will be empowering Reef Finance users by allowing them to create customized insurance pools.

Conclusion

Individuals and other entities are likely to be motivated to participate in liquidity pools when their capitals are safeguarded. This would provide the much-needed liquidity for upcoming blockchain projects and accelerate the growth of the cryptocurrency industry.

Designed to launch on Polkadot’s network, one of the highest growing crypto ecosystems in 2020, Tidal Finance holds high expectations among investors and liquidity miners. Could Tidal truly bring forth the long-overdue coverage needed in the DeFi space? Online time will tell. LPs, for one, would definitely be rooting for it.

Disclaimer: Cryptocurrency trading involves significant risks and may result in the loss of your capital. You should carefully consider whether trading cryptocurrencies is right for you in light of your financial condition and ability to bear financial risks. Cryptocurrency prices are highly volatile and can fluctuate widely in a short period of time. As such, trading cryptocurrencies may not be suitable for everyone. Additionally, storing cryptocurrencies on a centralized exchange carries inherent risks, including the potential for loss due to hacking, exchange collapse, or other security breaches. We strongly advise that you seek independent professional advice before engaging in any cryptocurrency trading activities and carefully consider the security measures in place when choosing or storing your cryptocurrencies on a cryptocurrency exchange.

January 1, 2023
ChainGuardians ($CGG): play games to earn cryptocurrency?
ChainGuardians is powered by the technology that allows digital asset tokenization, creating an ecosystem where blockchain meets play. Here, users can have fun on the platform while earning rewards in the form of cryptocurrency. They can also participate in popular blockchain activities such as mining or staking without much complexity.

Check out our interview with Co-founders Emma Liu and Idon Liu (from 23:00 onwards)

Background

The team behind ChainGuardians built the platform to create an enjoyable and worthwhile blockchain gaming experience for its players. According to the team, the majority of the gaming content is still currently only accessible on web browsers but they are planning to create an independent gaming platform for it.

What is ChainGuardians?

ChainGuardians is a cryptocurrency-meets-anime-themed blockchain collectible game powered by non-fungible tokens (NFT). The game is available both on mobile and web platforms, making it very accessible to its users. It is also built on top of Ethereum while its in-game assets are based on the ERC-721 standard.

The goal of ChainGuardians is to introduce a gaming element in the blockchain ecosystem, implementing chain analysis technology and advanced game economics to govern the platform’s mechanics.

All in-game assets are considered crypto-collectible NFTs. These are, for example, weapons, armors, and even the in-game characters i.e. Guardians. The purpose of having them tokenized is to make sure that they are unique and safe against counterfeiting.

All the collectibles, as well, are of limited quantity. They can also be either bought or sold on secondary NFT marketplaces.

While there are a lot of blockchain-based games today, according to the team behind ChainGuardians, their difference is that their governance is more community-based. There are other steps that the team said they were doing differently against others, which are:
- The constant development of end-game content and platform playability;
- Introduction of multiple game modes, including player-versus-player modes;
- Rebalancing of Guardians, lower ranking characters, items, and game economy, as they are needed;
- The constant development of the battle meta;
- Introduction of ‘Bring Your Own NFT,’ where users can integrate their own NFTs on the platform;
- Loyalty reward system;
- Bot prevention system; and
- Commencement of events and competitions to encourage player activity.
The platform offers a free-to-play NFT mining game and a role-playing game (RPG). Players can earn rewards for participating in either of the two.

For the game’s newcomers who just want to try out the game modes first, the platform offers a guardian simulation mode. For this mode, users will not need to own any crypto-collectible, or NFTs. This means, however, that their progress will not be factored in the actual game economy. They will also not be entitled to rewards in the simulation mode as well.

Crypto Boost is another feature made available on the platform. This gives existing cryptocurrency holders additional incentives in playing the game. To ensure that the accounts are in good crypto standing, their transaction history and holdings will be evaluated through Chain Analysis.

NFT Mining Game

Players can choose to participate in the game’s ecosystem by staking NFTs partnered by ChainGuardians. The process here is really simple. Users can either purchase their own NFT for staking or select from its supported projects called the “CryptoVerse Alliance.”

After a player has chosen an NFT to mine, they can start mining. Rewards for mining NFTs are ChainGuardians Credits (CGC). These can be used to make in-game purchases on ChainGuardians RPG or for conversion to the ChainGuardians Governance (CGG) token (more on this later). Furthermore, this is free-to-play.

ChainGuardians RPG

Playing the RPG is another option for users to earn rewards from the platform. Basic game achievements, such as the increase in your character’s level or winning against other in-game enemies, can give the player CGC rewards.

The goal of the players here is to work together to take down in-game enemies such as GateKeepers. This will help their characters gain power, credits, armaments, and other tools that they’ll need to progress in the game.

The game is also a turn-based battle game, but when a player is not active, the platform allows AI-based battles that factor in the attribute of a player’s character.

CGC rewards can be redeemed for CGG tokens or other available services on the platform.

There is a daily schedule for the redemption of CGG and it factors in the activity of the player on the platform. The RPG is also free-to-play.

How to play and earn on the ChainGuardians ecosystem (Image credit: ChainGuardians)

CGG Token

CGG is ChainGuardians’ Governance token. It is an ERC-20 token that represents a user’s stake in the platform. CGG holders can take part in important protocol decisions as well as earn rewards for continuously participating in the ecosystem.

ChainGuardians ($CGG) tokenomics (Image Credit: ChainGuardians)

There are many ways to earn an income from using CGG. Here are some ways:

Liquidity Provider Token

The platform has a liquidity pool backed by the POWER token. This is the ecosystem’s liquidity provider token. Users who stake CGG in the platform’s liquidity pool are entitled to POWER rewards which they can redeem later on. The pool supports the CGG and ETH trading pair of the platform.

In addition, users can choose to just provide CGG pairs on the platform’s liquidity pool. They can also earn POWER in doing so.

NFT Staking

CGG holders can stake their tokens on the platform’s supported NFTs. This way, they can potentially earn more NFTs and partner tokens as their reward.

Governance

The platform’s governance is community-based, which means that CGG holders are the ones voting on the ecosystem’s mechanics and protocols. Some of these decisions cover the following:
- Future in-game characters and their abilities;
- Game economics and balancing schemes;
- APY for stakers and the supported NFTs; and,
- Hash rates for NFT miners.
Conclusion

The game is indeed an interesting use case for blockchain technology. Apart from the introduction of NFTs, it also features a liquidity mining and staking option that many cryptocurrency holders find easy to work with.

The project has done good work in integrating advanced blockchain concepts into a more gamified experience for users.

With the successful application of most blockchain technologies such as governance tokens, NFTs, mining, perhaps the next step for ChainGuardians is to make a scalable platform should more players join. All in all, the project is a promising display of the blockchain’s capacity while easing them towards the basic concepts that back most projects in DeFi.

Disclaimer: Cryptocurrency trading involves significant risks and may result in the loss of your capital. You should carefully consider whether trading cryptocurrencies is right for you in light of your financial condition and ability to bear financial risks. Cryptocurrency prices are highly volatile and can fluctuate widely in a short period of time. As such, trading cryptocurrencies may not be suitable for everyone. Additionally, storing cryptocurrencies on a centralized exchange carries inherent risks, including the potential for loss due to hacking, exchange collapse, or other security breaches. We strongly advise that you seek independent professional advice before engaging in any cryptocurrency trading activities and carefully consider the security measures in place when choosing or storing your cryptocurrencies on a cryptocurrency exchange.
January 1, 2023
CUDOS: monetizing excess computing resources?
CUDOS aims to let users sell their excess computing resources through a collaborative consumption network platform.

In the over 11 years since the launch of the first blockchain, Bitcoin, we have seen a need to connect decentralized networks with real-world data to spur the networks’ usage. The first solution is to introduce layer 2 chains to process transactions before committing them on the underlying immutable protocols.

However, in the rapidly changing blockchain and physical world, we need a platform that is Turing complete, unlike Bitcoin. One that can handle virtually anything we throw at it without hitting a memory or processing power bottleneck. This is what CUDOS aims to do.

Background

In 2017 Matt Hawkings founded the CUDOS protocol. In the past, Hawkings worked in different technology companies in various capacities, such as being the chief technical officer of CORETX and the managing director of C4L.

Other team members include Andrew Sturmey (CTO), Pete Willis (Development Manager), Joan Garcia I Tormo (Data Scientist), and Richard Poole (Lead Developer/ Architect). The development team works under Cudo Ventures.

Notably, the project’s advisors come from reputable firms such as AMD, Sony Entertainment, and ESET UK.

What is CUDOS?

The CUDOS network is a decentralized layer two chain bringing cloud computing functionalities to decentralized platforms.

CUDOS uses a group of smart contracts that sit at the center of the computing functionalities. Also, the smart contract acts as oracles to interface off-chain data with blockchains and vice versa.

Since blockchains use different programming languages, CUDOS’ Turing completeness enables data processing for a wide range of distributed protocols regardless of their underlying programming language. This means that you can process data for Python and Go-programmed networks with ease.

How CUDOS Works

To incorporate Turing-completeness and merge blockchain and cloud computing, CUDOS uses validator nodes known as CVNs (CUDOS Validator Nodes).

Smart contracts allow blockchain developers to interact with CVNs by specifying the number of validator nodes to process their desired data.

The benefit of this approach is that it enables developers to choose the ideal configuration depending on the task at hand.

Where a task spreads across multiple nodes, the nodes share individual results with each other for consensus. Note that agreement can either be conducted outside or inside the blockchain. Off-chain consensus minimizes the transaction costs.

Notably, to be eco-friendly, the project taps into the idle computing power of data centers and other computing devices that would wish to contribute their power to earn incentives.

How CUDOS works

On the surface, a developer interacts with Ethereum smart contracts, which in turn pings to the CUDOS oracle contract. From here, it connects to validator nodes, either on-chain or off-chain. Validator nodes then interface with CUDO data centers that operate on top of the CUDOS platform.

CUDOS Use Cases

Being Turing complete means the platform can process almost anything. Consequently, this expands CUDOS’ use cases. At its basic structure, the network can be used as a layer two oracle to deliver data to and from smart contracts.

Furthermore, its computing capabilities make it a perfect fit for decentralized finance (DeFi) applications, scientific research, data analytics, artificial intelligence, and video rendering.

Advantages of Using CUDOS

CUDOS has numerous benefits due to its unique approach of connecting off-chain and on-chain systems. Key among them include;
- Efficiency enhancement – The protocol improves efficiency for developers to optimize workflows and improve the accuracy of results.
- Cost Reduction – It is estimated that CUDOS’ users save more than 75% compared to when using traditional cloud computing services.
- Flexible management – With CUDOS, you decide how much computing power you need; there are no limits. In addition, it allows users to compute how much processing power they need before running a task.
CUDOS’ Token (CUDOS) and Governance

Interestingly, the network and its native token share the same name, CUDOS.

CUDOS token use cases

The CUDOS token has 3 main use cases.
- Gaming: The Cudo platform allows gamers to rent out their spare computational capacity for tasks such as video rendering, AI computing and scientific research. CUDOS tokens are given as a reward for their efforts. These can then be used to access others’ excess computing resources so they can play games that push their hardware past its limits.
- Charity: Users can donate their computer’s idle resources to charity. Currently, cryptocurrency miners can use Cudo to contribute the tokens they have mined into their selected charity’s preferred payout currency and deliver this to the charity.
- Staking: The CUDOS token can be staked to participate in securing the network.
Note that stakers’ rewards emanate from revenues generated on the protocol. Staking takes two forms. You can stake the base asset to become a validator node, or you can delegate your coins to a staking node to earn staking rewards.

You may have noticed the token doesn’t directly have governance capabilities. This is because CVNs handle the governance aspect. CVNs’ integrity during the decision-making process is determined through a trust score. The score takes into consideration its stake and past behaviors.

How do you become a CUDOS Validator Node?

To become a CUDOS Validator Node, a node has to stake 2 million CUDOS tokens (with a minimum 3-month lockup). Fortunately, a validator node receives a percentage of the transaction fees charged on tasks. Also, they receive staking rewards. On the other hand, developers benefit from enhanced security provided by CVNs’ hardware encryption.

CUDOs’ layer 2 network will run up to a maximum of 100 validators, so slots are limited!

Staking on the CUDOS Protocol

CUDOS supports delegated staking. With this scheme, CUDOS token holders stake their tokens with validators who then interact with the protocol. Validators’ stake amount determines the kind of jobs a CVN will receive. For example, the bigger the stake, the larger the jobs, the higher the rewards.

the CUDOS token also acts as a governance token and the stake size is a measure of a validator’s voice in governance matters. If a validator misbehaves, the network confiscates its stake. For instance, if they fake the outcome of a task to save on computational power.

Note that individual validators can decide whether or not to involve delegators when making decisions.

If you wish to un-stake your CUDOS tokens, be aware that the un-bonding period takes a total of 21 days.

Staking rewards on the CUDOS network

CUDOS will pay out staking rewards over a 10 year period. The first and second year reward levels are fixed, and from year 3 onwards the reward levels will be decided by community vote using the governance mechanism.

CUDOS is also giving a ‘lockup rewards multiplier’ when you have staked your tokens for a set period. Currently, they plan to give a 50% bonus after staking for 6 months and a 100% bonus for a 12 month locked stake.

Conclusion

The CUDOS protocol brings a new dimension to the possibilities of blockchain technology. By being Turing complete, the protocol can handle many tasks from different blockchains regardless of their programming language. Another noble approach is the use of data centers and allowing everyone from desktop PC users to mobile device users to lease their idle computing power.

Its base asset gives holders incentives to either delegate their coins or actively handle tasks on the network. With the current rise in DeFi and blockchain adoption, CUDOS opens the door wider to the world of unlimited possibilities.

Disclaimer: Cryptocurrency trading involves significant risks and may result in the loss of your capital. You should carefully consider whether trading cryptocurrencies is right for you in light of your financial condition and ability to bear financial risks. Cryptocurrency prices are highly volatile and can fluctuate widely in a short period of time. As such, trading cryptocurrencies may not be suitable for everyone. Additionally, storing cryptocurrencies on a centralized exchange carries inherent risks, including the potential for loss due to hacking, exchange collapse, or other security breaches. We strongly advise that you seek independent professional advice before engaging in any cryptocurrency trading activities and carefully consider the security measures in place when choosing or storing your cryptocurrencies on a cryptocurrency exchange.
January 1, 2023