Boxmining

Category: Coin Guide

There are several thousands of cryptocurrencies out there, known also as altcoins. These coins and tokens all have their own unique features and uses, for example, some are used to help decide the direction the creator company should take, others give you discounts or access to special features. The Coin Guide is a concise summary of the aims and technology behind a certain cryptocurrencies. Insight is crucial in this field. Many projects disguise their progress through complicated jargon, making it hard to distinguish those who are building something meaningful from those who are not.

  • Kusama ($KSM): How is it Polkadot’s wild cousin?

    Kusama ($KSM): How is it Polkadot’s wild cousin?

    Kusama ($KSM) calls itself “Polkadot’s wild cousin”. Yet, is an initiative that seeks to solve the Polkadot ecosystem’s concerns of coding vulnerabilities. Going beyond the usual testnet, Kusama deployed on its platform a network focused on research and development with real costs to its community and developers. This makes it more mainnet-like, without having to actually put new developments up on the main Polkadot platform.

    Background

    Dr. Gavin Wood founded Kusama with a goal of supporting the Polkadot ($DOT) network via building a parallel blockchain that allows experimentation and development with very realistic conditions. With that in mind, Dr. Wood thought of having a “canary network” that functions as a warning and early problem detection protocol that can reveal the weaknesses of the Polkadot code base.

    With Kusama, new features that are planned for implementation on the main Polkadot chain can be tested. The difference between Kusama and all other testnets is that the decisions made in the platform have actual economic implications. Testnets only provide playground tokens that bear no actual value.

    What is Kusama?

    Kusama is Polkadot’s canary network, which means that it is an experimental community research and development protocol. Its main purpose is to help developers test and deploy parachains on the Polkadot project, or experiment on its governance and staking functions with real economic conditions.

    Canary testing
    Canary testing

    Canary testing is important as the developers behind both chains hypothesize that it is the best way to completely understand the critical risks that lie in Polkadot’s development.

    As an unrefined version of Polkadot, Kusama functions as an independent decentralized main network. It will continually function as long as the community allows it to since decentralized systems inherently have no kill-switches. It could possibly become a para relay chain to Polkadot, however, it is never intended to merge with Polkadot’s chain itself.

    Kusama Token ($KSM)

    Kusama’s native token is the KSM, which holders can use to stake, become a validator or nominate one, and vote on its governance mechanism, among others. Furthermore, it is the token that powers most of the mechanisms in the Kusama network.

    Investors who purchased DOT during Polkadot’s ICO are qualified to receive an equivalent amount of KSM on the Kusama Network.

    Consensus Protocol: Nominated Proof-of-Stake

    Kusama follows the Nominated Proof-of-Stake (NPoS) consensus model where validators are elected based on their stakes and the stakes of those who are voting for them. As much as possible, the platform balances the weight between validators every election.

    In Polkadot, the election of validators focuses on the balance between these three metrics (Phragmen’s algorithm):

    • The total amount staked by the nominee and their nominators
    • The stake behind the minimally staked validator
    • The variance of the stake in a set.

    Validators

    To become a validator, users are required to stake KSM first. Once users already have the minimum amount of tokens needed to become candidates for a validator set, they are elected based on the Phragmen’s algorithm.

    There are currently over 130 validators on Kusama.

    Parachains

    Parachains are application-specific data structures secured by validators on the Polkadot Relay Chain and run in parallel with the Polkadot network. This allows them to process transactions with the speed and scalability of the Polkadot blockchain.

    How parachains work
    How parachains work

    Collators, on the other hand, are tasked to maintain the whole parachain. Collator nodes keep every data concerning the parachain and create new block candidates for the verification and recording of validators.

    Parachains can have an independent economy from the Polkadot network and their own native token.

    Governance

    Before every protocol update or revision is made, they are voted upon by the network composed of token holders and Kusama’s council. Through innovations such as on-chain voting systems and stake-weighted decision making, Kusama has enabled a community-driven governance model.

    The governance function follows the following procedures:

    Proposing Referenda: Each referendum contains a specific proposal that serves as a privileged function call. Included in the referenda is the period designated for the voting process. They can be submitted by Polkadot (DOT) token holders and the council, or taken from prior referenda or recommendations by Kusama’s Technical Committee after the approval of its Council.

    Voting for a proposal: There are only two options when voting, either “aye” or “nay.” If proposals receive a majority, they can be carried out for implementation. Before the enactment of a proposal, however, users are required to lock their tokens until the whole enactment delay has lapsed. The purpose of this parameter is to ensure that a proposal has met the minimum economic buy-in and discourage vote selling.

    Tallying: There are three scenarios whenever the network votes on specific proposals. Since each proposal is distinguished on whether they are from the public or the council, the votes also differ in bias.

    Kusama vote tally
    Kusama vote tally

    For every proposal, the number of “aye” and “nay” votes are accounted for as the turnout, or the total number of voting tokens, are factored in.

    In a positive turnout bias (if the voter turnout is low), more votes in favor of the proposal are required. In a negative turnout bias, it requires more votes against the proposal. And for Council proposals, only a simple majority is necessary.

    Kusama Council

    While there are active stakers, there are also passive stakeholders in the Polkadot and Kusama ecosystem. Through an on-chain entity comprising of 17 seats, the Council decides on three main tasks of governance. These include proposals of referenda, striking out clearly dangerous referenda, and electing members of the network’s technical committee.

    Kusama council
    Kusama council

    Community on Kusama

    Kusama has deployed the Society module, an economic game that seeks to reward users for participating and maintaining a membership society. Rewards, however, are given maturity periods. This means that the user cannot instantly get their incentives until the maturity period of their entitlements has already lapsed.

    Societies can punish members by slashing their incentives if they are not being collected. There are many other violations, such as not participating in voting calls, among others.

    By a strike system, members who have committed a number of punishable actions exceeding the limits decided upon can be booted out of the society.

    As of now, Kusama only has one society organized on top of its platform. In the future upgrades though, they might add more.

    Conclusion

    The growth of the DeFi space is dependent on the participation of both its developers and the community behind them. Projects that empower developers to test out new features before they are actually implemented on main channels are important, especially if the security and reliability of a particular network are at stake.

    A project like Kusama enables developers and their community to play around the Polkadot platform while making sure that each feature they are planning to deploy is not only audited but also tested realistically.

    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.

  • Trustswap ($SWAP) Explained – Next generation of DeFi Transactions

    Trustswap ($SWAP) Explained – Next generation of DeFi Transactions

    Trustswap is the next evolution of Decentralized Finance (DeFi) transactions solving major problems with subscriptions, split payments, and cross-chain token swaps. A cross-chain “smart swap” system is used to wrap any token or coin (Bitcoin, Litecoin, Monero, Ripple, Cardano) into an ERC20. A trustless decentralized escrow service at the core of Trustswap provides an easy way to split payments into timed batches. The project provides an easy way for developers to accept payments for annual subscriptions where both parties can trust that payments are completed in a timely manner. This technology is essential for the investment space as token distributions are split into tranches. Trustswap conducted an Initial Liquidity Offering for the SWAP token in June 2020.

    Trustless escrow and split payments

    Two party swaps on Trustswap

    The initial application of the Trust Swap is within the ICO & cryptocurrency investment space where token distribution needs to be split into tranches. Trust swap does this automatically, cutting out the need for lawyers and contract underwriters to complete the transactions. This means that instead of trusting expensive third parties, VC and projects and directly complete their transactions on the blockchain.

    Decentralized Subscription and payment model

    Trustswap is implementing a “Two-party time-release payment” geared towards subscription payments and consumer transactions. The current industry trend for services is transitioning towards a monthly subscription model (such as Adobe Creative Cloud, Spotify, Apple TV). Currently, cryptocurrency transactions are single payment – a model that doesn’t suite service-based networks very well. Trustswap will allow an easy method for developers to add support for accepting annual subscriptions – improving how cryptocurrencies can be spent and used.

    Cross-chain and multi-currency support

    TrustSwap supports a multi-currency future with the ability to customize payment services in a wide range of cryptocurrencies and tokens. Trustswap will be able to wrap different cryptocurrencies such as Bitcoin, Ethereum, Monero, Vechain, and other different cryptocurrencies to trade. This will make it easy for different communities to collaborate with each other and complete payments.

    Founders and Team

    Trustswap Team

    Jeff Kirdeikis (CEO): Jeff is the Founder and CEO of Uptrennd, the world’s most engaged blockchain-based social media platform. He is the host of The Bitcoin and Crypto Podcast and runs the world’s most engaged FB crypto group.

    Adam Barlam (CTO): Adam is the dev and founder behind the projects Bravocoin, a platform that allows users to earn crypto for writing reviews and Rebuzz, a decentralized social network. He has previously worked as a Sr. Architect at Godaddy and Intel.

    Advisors

    Michael Gu – Boxmining Founder is currently a strategic advisor for Trustswap. Michael is the Founder of Boxmining – one of the top crypto YouTube channels with over 200,000 subscribers and 15 Million Views. Michael has been providing top tier independent coverage of the cryptocurrency scene. Micheal has participated in the first wave of cryptocurrency investing, with a mining operation in 2012 and key investments in 2017.

    Ivan Liljeqvist – is a Swedish blockchain influencer and developer based in Stockholm. He is known for his YouTube channel, Ivan on Tech.

    Mauvis Ledford – Mauvis is the former CTO at Coinmarketcap, as well as the former Technology and Research Consultant at the Bill and Melinda Gates Foundation. He currently serves as an advisor at the first full-service blockchain accelerator, MouseBelt.

    References:

    Altcoins to Watch – AltcoinBuzz

    FAQ:

    Where can I buy / trade trustswap?

    Trustswap can be directly traded using the Uniswap Exchange. This decentralized exchange has the most liquidity for SWAP tokens. On top of this, SWAP can be traded on exchanges such as MXC and Biki

    When will Trustswap Launch

    Trustswap is expected to complete an initial testnet in August 2020 with a full mainnet launch later in the month. Additional features such as Cross-chain integration, tokenized assets and event-released payments are expected in the future.

    Which cryptocurrencies will be supported by Trustswap

    Trustswap’s goal is to support a wide network of different cryptocurrencies, including coins that are not on Ethereum. This will be done through a process called “Wrapping”, a method of creating cross-chain assets that can be traded on Ethereum as ERC-20 tokens

    Where can I find the Price of SWAP

    SWAP is listed on CoinGecko.

    What was the ICO price of SWAP

    SWAP was sold via an Initial Liquidity Offering.

    I don’t see SWAP on Metamask, I can’t find it

    You need to add the $SWAP token manually on metamask using the “Add token feature”. Enter the official contract address of swap: 0xcc4304a31d09258b0029ea7fe63d032f52e44efe

    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: This article is written using publicly available information by our writer David Lancaster. Our Founder is currently a strategic advisor for Trustswap. Writers and staff have cryptocurrencies holdings mentioned in articles on this site.

    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.

    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.

  • Curve Finance ($CRV) guide

    Curve Finance ($CRV) guide

    Curve Finance is a decentralized exchange (DEX) for trading stablecoins. As with every other Decentralised Finance (DeFi) project, Curve Finance has its own token known as Curve DAO token ($CRV). The Curve Finance DEX has already been up and running since January 2020, and yield farmers have already been making gains off of it. However, it was the abrupt listing of the $CRV token on 14th August 2020 that really turned heads in the cryptocurrency space, and not necessarily in a good way. In this article, we take a look at the background and features of Curve Finance and the controversial launch of its $CRV token.

    To learn more about Curve Finance and specifically $CRV yield farming and how to see if YOU may have any $CRV, check out our latest video:

    Curve Finance ($CRV) Yield Farming

    Background

    Michael Egorov CEO of Curve Finance, also worked with the NuCypher team as Co-founder and CTO for five years. Egorov has served Curve through his expertise in software development, thanks to his managerial stints at different tech companies in the past.

    The team behind Curve Finance officially began working on the exchange back in December 2019, and they launched it in January 2020. Even then, Curve was already being used by several arbitrage traders, but its popularity shot up after it recently (and surprisingly) launched its governance token this August 2020.

    Interestingly, it appears that even after the launch of the CRV token, some members of the Curve team did not know that it was already out. It was so abrupt that the team had to adopt it after having no option but to just review its codes following the deployment.

    What is Curve Finance?

    Curve is a decentralized exchange liquidity pool built to support the efficient trading of stablecoins. At present, Curve supports BTC pairs, as well as DAI, BUSD, sUSD, TUSD, USDC, and USDT.

    And through the help of AMMs (automated market makers), Curve makes low slippage trades possible while keeping transaction fees low. Most arbitrage traders prefer Curve compared with other liquidity pools like Uniswap simply because of the savings in trades.

    With only a few months in existence, the platform has already beaten other exchanges in terms of trading volume. With Uniswap at the top of the ranks, Curve performed stronger than projects such as Aave, Compound Finance and Balancer.

    What sets Curve apart from other DEXs?

    The problem with DEXs like Uniswap is the cost that users incur for token trades. If you look at other DEXs, they can’t facilitate direct token trades. In Uniswap’s case, for example, stablecoins still have to be traded for ETH, before they are traded with the stablecoin that the user wishes to get (Uniswap V2 might have already eliminated this drawback). Given that the transaction involves two trades, the transaction fees are also doubled for every user.

    Curve functions differently. The platform’s liquidity pool allows direct token trades among listed pairs. With a direct swap function, users save more by paying lower trading fees. And as of now, the fees are still set at 0.04% per transaction. This means that users have the opportunity to execute more efficient trades without having to pay much in fees for every transaction.

    The algorithms for both DEXs are also different. Uniswap focuses on maximizing available liquidity, but Curve’s algorithm puts more importance in minimizing slippage. Because of this, high frequency and large volume traders save more by using Curve.

    Compared with the order book systems, Curve uses an AMM model that maximizes on-chain liquidity pools to provide the necessary funding even before trades are executed.

    Making Money Providing Liquidity in Curve

    On-chain liquidity pools refer to funds held in exchanges to facilitate trades. With Curve, users can freely deposit any supported token in the pool and become a liquidity provider. This is what we mean when we talk about funding specific pools for Curve’s trading pairs.

    And in turn, liquidity providers earn fees from the swaps that are performed in the exchange.

    Thanks to Curve’s composability, its liquidity pool is also accessible to many other protocols. In fact, the platform experienced increased trading volume after the introduction of liquidity mining from yEarn.

    yCRV

    In liquidity mining, miners help run an exchange’s market-making bot to help it run its trades. This trend enticed miners to provide additional liquidity in yEarn’s yCRV token because it appeared to be quite profitable.

    The yCRV token is a wrapped token composed of Curve’s supported trading pairs and represents its liquidity pool. Additionally, since Curve’s liquidity pool is available to other protocols such as Compound, liquidity providers also earn additional income from their interest fees.

    While supplying liquidity in Curve’s pool appears profitable, it also entails some risks. These are some of the uncertainties that Curve’s liquidity providers are likely to face.

    DeFi Ecosystem Vulnerability

    Since Curve is already integrated with some other DeFi platforms, users have to be able to monitor ongoing issues on these other protocols. Looking after security issues in other projects will ensure that liquidity providers are well-knowledgeable about the risks of depositing their assets in Curve’s pools.


    Yield Volatility

    Curve’s yields fluctuate a lot. Although high yield pools entice users to provide liquidity over time, it also ultimately becomes low or medium yield pools over time.

    To combat this, users can opt to supply liquidity to all Curve pool, a diversification strategy. And this would give out the average yield of all pools. Unfortunately, it also raises slippage and gas fees, as well as exposure to smart contract vulnerability.

    Calculating Profits after Gas and Fees

    One hurdle with supplying liquidity on the Curve protocol is calculating your profits after gas and slippage fees are deducted.

    The platform splits liquidity across various pools and is linked to external protocols. As a result, gas fees are relatively high. And depending on tokens you supply, you may encounter significant slippage as well.

    This makes it rather difficult to do yield-hunting — the chasing of high yields by changing of pools. It is recommended that liquidity providers deposit tokens to pools for long enough periods in order to make a profit after slippage and gas fees are paid.

    $CRV Token

    $CRV is Curve’s native token, it is generated when you deposit and stake cryptocurrencies on the platform. It is awarded to liquidity providers proportional to their share from the yield which their pools make. And since CRV has just been released, those who have contributed to Curve’s liquidity pool will receive a prorated amount of it.

    With Curve’s transition to become a DAO, CRV tokens also represent the holders’ rights to take part in its governance mechanism, so they can make proposals and vote on them. And with CRV, governance will follow a ‘time-weighted’ voting system. It simply means that the longer they hold CRVs, the greater their voting power in the DAO becomes.

    What yield-farmers also do is to take advantage of the popularity of DeFi to speculate on tokens such as $CRV. So what they would do is after depositing and earning the $CRV token, they would sell $CRV on the market for profit.

    What happened with the $CRV token launch?

    Prior to the launch, $CRV was one of the most anticipated and talked about tokens, and the team saying it would launch in “early August 2020”. On 14th August 2020, the $CRV token was suddenly launched by an anonymous developer without anyone, including the Curve Finance team knowing. The developer was able to do this because the code of the $CRV token and DAO was available on GitHub, so all the developer had to do was to put the two together and launch the smart contract.

    Of course after the initial launch of the token other cryptocurrency enthusiasts started posting on Twitter about the news. This meant the Curve team had to go around clarifying the situation and saying it was a scam. The Curve team also scrambled to confirm that the contract deployed by the developer had the same code and that there were no significant changes or backdoors added i.e. there was nothing malicious in the contracts.

    So Curve ended up declaring that this was their official token and DAO launch, and needless to say, the cryptocurrency community were not happy about it. This was made worse by the fact that in the hours between the time the developer launched $CRV and Curve declaring it was an official launch, 80,000 CRV tokens were already mined by some users. This led many others to say that it was unfair to others considering the Curve team had previously announced there would be 24 hours between the contract being deployed and the first token being issued.

    Curve team declares their DAO and $CRV was launched

    Following this announcement, other major exchanges such as Binance, OKEx etc. also began listing $CRV.

    $CRV is highly volatile, prices were at an all time high of $54.01 on 14th August 2020, and went to an all time low of $4.17 on 17th August 2020. Also being a mined currency, the initial supply will be extremely low and only increases over time after more has been mined. This results in prices being highly volatile as we can see because with more tokens will be mined, these miners will quickly sell their tokens on the market. This is especially the case during the initial launch phase where there is a lot of hype, but very little supply.

    So those speculating on $CRV really need to exercise caution because it is very risky.

    How to Use Curve to Trade

    In order to use Curve Finance, simply go to their web portal at https://www.curve.fi and connect a web3 wallet like MetaMask.

    Choose which cryptocurrencies you want to trade. Then, click “Sell” at the bottom. You will then be prompted by your web3 wallet to confirm the transaction.

    Once confirmed, it means that your trade is successful.

    Conclusion

    While Curve can also be a profitable alternative against Uniswap in terms of high frequency and large volume trades, everyone still has to consider how to effectively balance potential earnings from its corresponding risks.

    And if the Curve project continues its run successfully in the months and years to come, it might even become one of the best performing DEXs in the DeFi space for offering low slippage trades as compared with its competitors.

    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.

  • What is Elrond Network (ERD)?

    What is Elrond Network (ERD)?

    Elrond is a high-performance blockchain that aims to provide extremely high network speeds of up to 10,000 transactions per second. The network supports smart contracts, thus allowing programmers us the WASM VM engine to develop both enterprise and commercial decentralized applications. Elrond promises ‘internet-scale blockchain‘ as its extremely fast and scalable nature means it can handle all the stresses of modern applications and allows the masses to access the digital economy. The platform native currency, $ERD, is used as a form of value transfer on the network and will also be required to interact with decentralized applications.

    On 30th July 2020, Elrond launched its mainnet.

    Built from scratch with a leaning on high performance, the Elrond Network promises a 1,000 fold improvement on costs, speed and most importantly throughput. The project itself compares what it is building with the transitioning from dialup to broadband and how massive this could be to the general blockchain sphere.  

    Components of the Elrond Network 

    Keen on breaking barriers and innovating, the Elrond Network architecture brings forth a genuine state Adaptive sharding scheme and merges that with a secure proof of stake consensus algorithm.

    The core components of the Elrond Network are as follows: 

    • Virtual Machine: creating a trustless network, eliminating intermediaries from where smart contracts are executed seamlessly and in a scalable manner.  
    • Adaptive State Sharding is in place to reduce energy or computational wastage while ensuring the network can practicably scale. To that end, the Scheme boosts communication between Elrond Network shards or partition of nodes. Note that each shard can only process a portion of the transaction. And as more users plugin, the network automatically scales as shards increase. At the same time, there is an improvement in storage and transaction processing capabilities because of sharing of resources. 
    • Proof of stake consensus algorithm is a channel through which there is a haphazard sampling of network validators. Sampling is from the previous signature of blocks and each signature, in turn, is from a network validator voting from a Byzantine Fault Tolerance consensus. 

    Key Features of the Elrond Network 

    From the above components, the Network is different from the rest. It is efficient with low latency while remaining secure and scalable. Specifically, Elrond has the following features: 

    • Because of Adaptive State Sharding, the network is inherently scalable. 
    • There is an incentive for participation through staking because of the secure Proof of Stake consensus algorithm. 
    • The interface is intuitive and easy to use as unnecessary hardware mechanisms are absent.
    • There is minimal wastage of computational as well as power translating to a low cost per transaction.

    Clearly, Elrond developers are going to great lengths to differentiate themselves from other networks. For example, compared to Ethereum which is still using the proof of work consensus algorithm for their processing but plans to shift, Elrond’s use of SPOS brings above cost saving and better efficiency.  

    Besides, for interoperability, their Virtual Machine is compatible with Ethereum’s. Meanwhile, same with Algorand, Elrond’s developers incorporate Random Selection but diverging from Algorand approach on scalability, Adaptive sharding by default gives them an edge. At the same time, the use of adaptive sharding taking into consideration state and transaction sharding overruns Ziliqa’s take. 

    Elrond Economic Model

    Elrond Staking Calculator

    Elrond has an economic model that encourages adopters with competitive rewards during its current growth phase. The network allows ERD holders to earn passive income by either delegating their stake or serving as a validator for the network. The highest reward is from becoming an Elrond Validator Node, which will reward a 36% yearly return in the form of ERD. (https://bluffsrehab.com) In return, this requires the holder to actively participate in the network consensus via an always online machine that answers network requests. For a simple option, ERD holders can simply delegate their stake and receive a 29% return without doing any hard work.

    Elrond Partners

    Since blockchains cannot work in isolation, Elrond has formed partnerships with several platforms including: 

    • Samsung Blockchain – Elrond is added to the Samsung Wallet and listed as one of the dapps.
    • TypingDNA, a biometrics company, where the objective of this joint venture is to improve the security of the Elrond Network while guaranteeing the privacy of users. 
    • Smartbill, a SaaS provider for general management inventory. Through Elrond, users will have better transparency and traceability. 
    • Netopia, a payment processing company based in Romania. Processing more than $400 million worth of transactions in 2018 alone, Elrond will have exposure in Eastern Europe as ERD token is incorporated. 
    • Distributed System Research Laboratory which is part of the Technical University of Cluj. 

    Verdict 

    Elrond is demonstrating that building a high-performance architecture from where dApps can be launched and operate seamlessly even with an increase in activity is strenuous but potentially possible. By building from scratch and enhancing previous scalability solutions while fronting interoperability, Elrond attempts to be cost and energy efficient with high throughput. 

    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.

  • Orion Protocol ($ORN) explained

    Orion Protocol ($ORN) explained

    Orion Protocol ($ORN) offers a unique liquidity aggregator that connects major exchanges into one simple platform. Orion sees traders having difficulty in performing profitable transactions from popular exchanges. And while there are many exchanges to choose from, the liquidity in these exchanges remains an issue and not everyone has the time to research which exchange offers the best returns. Hence Orion wants to set itself apart, not by competing with exchanges, but by aggregating their order books into one simple terminal.

    Background

    Alexey Koloskov, CEO and Co-Founder of the Orion Protocol, launched the project in 2020 in a bid to deal with the problems of large exchanges monopolizing the cryptocurrency exchange market. In his view, both centralized and decentralized exchanges have their fair share of issues. Centralized exchanges are vulnerable to hacks, whilst decentralized exchanges are still relatively underdeveloped.

    Hence accordingly to Yanush Ali, CSO of Orion Protocol, their project is exactly what the cryptocurrency industry needs today as it is a truly decentralized platform that meets the demands of businesses and consumers alike.

    What is Orion Protocol?

    Orion Protocol is an open-sourced, decentralized finance project mainly created to aggregate liquidity from different major liquidity providers i.e. exchanges. Primarily, Orion helps users get the best return out of their funds while lowering the risks associated with going onto multiple exchanges (both centralized and decentralized).

    Orion operates by collecting the liquidity offered across multiple exchanges in the cryptocurrency market into a single, universal API. This API combines multiple order books from exchanges in order to make it easier for users to make trading calls whenever they wish to.

    For example, when the user makes an order and a single API call is made, Orion itself will split and route this action to multiple exchanges at once. This leads to them being able to find lower buy and sell spreads and eventually the best exchange prices for users.

    With Orion, traders do not have to bother themselves too much with APIs from different exchanges, data formats, modes, and order types. They can just focus on executing their trades or managing their assets.

    In addition, Orion seeks to address another risk from centralized exchanges — hacking. Hot wallets usually provided by online cryptocurrency exchanges are susceptible to hacking. Recent reports already revealed how vulnerable centralized exchanges (and even decentralized ones) are. And users have no option but to deposit their cryptocurrencies there for trading, which inevitably puts them at risk. Orion’s non-custodial solutions try to solve this by letting users freely manage their assets on the platform, whenever and however they want, without ever giving up their private keys just to do so.

    Along with Orion’s multi-currency wallet, it is easier to keep track of your portfolio’s overall performance as they can easily be found in just a single API. The hassle in using and maintaining multiple wallets just to trade in multiple exchanges is eliminated.

    Since Orion is open-sourced, third-party developers can join the protocol and make their own decentralized applications on top of it.

    Orion Products

    Orion aims to be a one-stop shop, so naturally they have a whole suite of products and ecosystem for traders. Let’s take a look at them in turn.

    Orion Trading Terminal

    The trading terminal is Orion’s platform to allow traders and investors to conveniently execute trades in its universal API. In just a single call, users can make trade orders that will be automatically executed across different exchange platforms in search for the best spot prices.

    If users want to invest in emerging blockchain initiatives or are interested in purchasing new tokens, they can also perform such transactions with Orion’s trading terminal.

    Portfolio management application

    Instead of having to check different accounts from multiple exchanges one by one just to monitor your portfolio, Orion simplifies the process by collecting all relevant information together in a single tool for the user.

    Orion’s portfolio management application allows users to monitor and record their activity across exchanges, set alarms for arbitrage opportunities, and automate asset management processes, among others.

    All these processes do not require the user to give up custody over their funds because the application offers a non-custodial portfolio management feature. Surrendering your private keys to a third party is no longer necessary.

    App store

    Orion has a marketplace of decentralized applications that users can access to purchase Orion-based software. Many of these software may be third-party developments built on top of the protocol. Some applications users can gain access to are:

    • Arbitrage apps;
    • Algorithmic trading bot; and,
    • Payment integration systems.

    Enterprise trade

    While interoperability is a concern for some aggregators, Orion has developed a system made to address this. Orion has its own extension that firms and traders can embed into their own software to provide access to Orion’s API.

    Liquidity boost plugin for exchanges

    Orion has its own plug-in that centralized and decentralized exchanges can place on their own platforms to contribute to Orion’s aggregated liquidity. This also helps bring market-makers to exchanges at a reasonable fee.

    Orion shared liquidity pool — brokers are liquidity providers who hold funds in exchanges while also executing orders on behalf of the users. They stake a minimum amount of ORN tokens to join the liquidity pool. The more ORN they have, the more fees they get from executing orders.

    DEX launcher

    This is the platform where users can launch their own decentralized exchange with access to Orion’s liquidity. It is not just a simple method to open new exchanges but also provides instant liquidity.

    Orion Token ($ORN)

    Orion Protocol’s native utility token, $ORN, is an ERC-20 token. The token supply is capped at 100,000,000 ORN and the circulating supply is around 3.8 million coins. Orion claims it is committed to ensuring ORN’s sustainability and they aim to achieve this through several means:

    • providing uses for the token;
    • non-inflationary staking;
    • diminishing supply;
    • benefits for holders; and
    • refund opportunities.

    Uses for ORN

    ORN can be used throughout its various products. For example:

    • Orion terminal: Users receive fee discounts when paying using ORN, and can earn terminal transaction fees and interest by staking ORN tokens.
    • Decentralized brokerage: brokers are required to stake ORN in order to be chosen to execute trades. Whilst non-brokers can stake ORN to vote for their chosen broker.
    • Orion Enterprise: All licensing fees generated will be used to buy ORN from the market and removed from the total supply.

    Non-inflationary staking

    Currently Orion has a multi-exchange pre-staking initiative and according to them, it yields a 39% APR. Apparently it is so lucrative that 50% of circulating ORN ahs already been staked.

    Upon Mainnet launch in Q4 2020, Orion will utilize a Delegated Proof of Broker (DPoB) staking model. This model has 2 components: Broker Stakers and Non-broker Stakers. Brokers run the Orion Broker Software, which automatically executes trades routed there from Orion’s liquidity aggregator. The more ORN staked by the Broker, the more likely they are chosen to execute trades. Brokers can also increase their chances of getting chosen through Non-broker Stakers who stake ORN to “vote” for their chosen Broker to execute the trades. Both Broker Stakers and Non-Broker Stakers receive rewards. Broker Stakers receive a portion of fees from each trade they execute, whilst Non-Broker Stakers a variable reward share offered by the Brokers in exchange for their vote.

    The DPoB model for staking ORN is non-inflationary because, under existing mechanisms used by other exchanges, miner/staker benefits are typically minted as new tokens which hurts the underlying asset over time. Orion departs from this existing mechanism because Orion does not mint tokens for the purpose of giving rewards, instead, DPoB stakers receive rewards that are generated through Orion’s 13 revenue streams. This in turn preserves the necessity and the value of the ORN token.

    Orion's 13 revenue streams
    Orion’s 13 revenue streams

    Diminishing supply

    Orion actively removes ORN from ciruclation (thus increasing its value over time) through the following means:

    • Staking: Under the DPoB model, both Broker and Non-Broker stakers remove their ORN from the circulating supply. The rewards generated are compounded into their stake which further reduces circulating supply.
    • Licensing fees: 100% of licensing fees generated from Orion’s DeFi solutions will be used to purchase ORN from the market and removed from circulation.
    • Refunds: ORN tokens refunded via the Dynamic Coin Offering (DYCO) will be destroyed.

    Benefits for ORN holders

    As seen above, Orion Terminal users get fee discounts when paying using ORN and stakers get additional incentives.

    Refund opportunities

    Orion is the first project ever to implement a DYCO. 80% of the funds which were raised during the token sale were set aside to buy-back holders’ tokens if they so requested. Any refunded tokens will be burned.

    Where can I trade ORN?

    ORN can be purchased with Ethereum (ETH) or USDT in several exchanges such as KuCoin, BitMax or Uniswap (v2), although according to Coingecko, it is most actively traded on Bilaxy exchange. Orion also claims that through a multi-exchange pre-staking program, ORN tokens can be staked on Bitmax, KuCoin and Biki for staking rewards of approximately 39% APR.

    Orion roadmap: What can we expect?

    Orion’s token sale had ended on 14th July 2020 and as mentioned above ORN is already listed on several exchanges. In the upcoming Q4 2020 we can expect the launch of the public mainnet, decentralized brokerage and Orion price oracle. Most importantly upon public mainnet launch the DPoB staking model will be place.

    Here’s a look at Orion’s roadmap:

    Orion roadmap
    Orion roadmap

    Conclusion

    The challenge for traders and investors is how they can make sure that the transactions they make are still profitable. This is because day-to-day market prices can be manipulated by crypto whales and other large investors as they influence overall liquidity.

    Orion’s aggregated liquidity promised to solve this issue and so far, it is off to a good start. With Orion, no single entity or investor can influence its aggregated liquidity. Users can consider this platform if they want to execute trades that are much more profitable, or if they just simply want to have a better view of how their portfolio is performing on different exchanges.

    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.

  • Velo: The Biggest Payment Network Ever?

    Velo: The Biggest Payment Network Ever?

    Velo Labs is building out the biggest payment network in Southeast Asia to improve remittance and money transfer markets. As some may know, today’s remittance system involves hurdles of middlemen who each charge high fees. This makes remittance extremely expensive and slow.

    Velo Labs is solving this problem by allowing people to transfer value between each other in a timely and transparent manner without middlemen using digital credits that are pegged to any currency and are collateralized by a cryptocurrency (VELO) issued on Stellar.

    What initially got me to look deeper into Velo Labs was their company’s backing. It’s founded by Chatchaval Jiaravanon. This may not be a household name to most, but he is a prominent entrepreneur in Asia. He sits on the board of lots of corporations including True Corporation, the leading Telecom Group in Thailand, and owns Fortune Magazine. His family also owns the CP Group: the largest conglomerate in Thailand.

    The CP Group is also Velo Lab’s largest backer. The company owns all the 7-Elevens (over 20,000!) in Thailand and is one of the largest conglomerates in the world.

    Recently we spoke to Mr. Gaurang Desai on the Velo Economics team about how remittance currently works in Southeast Asia

    Below are some key points we covered in the interview:

    • Problems with the existing international remittance system in Southeast Asia
    • How Velo Labs fits into the current system
    • The advantages of the Velo Protocol over current remittance methods
    • What makes the Velo Protocol different from competing protocols
    • How many money transfer operators and agents are currently on the network

    Velo Labs is hosting an AMA on Stellar’s subreddit on August 7th. So feel free to ask Mr. Michael Cowans, Velo Lab’s Commercial Advisor

  • What is Utrust ($UTK): Full guide and review

    What is Utrust ($UTK): Full guide and review

    Utrust aims to distinguish itself from the competition and overcome the volatility and lack of consumer protection which are some of the biggest factors preventing user adoption of cryptocurrencies. Utrust tries to do this by merging the best features of traditional payment gateways with the security of blockchain technology.

    Background and team

    Sanja Kon is the CEO of Utrust with an extensive track record working as the Head of Marketplaces and Large Enterprises at PayPal. She also has previous experience working as the European Partner of Development at eBay. Coming from PayPal, she has a full understanding of the eCommerce ecosystem and how to handle merchant partners. This positions Utrust at a very strategic position in terms so cryptocurrency payment adoption.

    What is Utrust?

    Utrust dashboard
    Utrust dashboard

    Utrust is a digital payment platform built on the blockchain. It combines the features of the traditional online payment system and blockchain technology to offer the best of both worlds. One that offers an affordable payment system that secures transactions between buyers and sellers from the point of payment until they receive the products.

    The platform also streamlines the exchange between merchants and consumers by making payments simpler. There is no need to bear huge operational costs or conversion fees anymore just to establish a cryptocurrency payment gateway. This makes the option of accepting and making cryptocurrency payments within everyone’s reach.

    Utrust goes further by promising real-time business-to-consumer transactions without having both parties suffer from the volatility of cryptocurrencies. After all, there is nothing scarier than transacting in cryptocurrencies only to later find out that the payment you accepted significantly changed in value.

    The Utrust platform supports different digital currencies and its native token, $UTK. Users can make payments for goods and services without any exchange rate fee if they are paid in UTK.

    UTK is backed by the platform. Each time a transaction happens, a small percentage of the fees are converted into UTK and burned. This decreases the total supply of UTK, causing its value to rise. The more transactions, the higher the token value becomes.

    Others believe that Utrust might just be the alternative to PayPal because PayPal can be expensive and at times, inconvenient to use. Here is how they do it.

    How Does Utrust Work?

    Perhaps one of the biggest problems in transacting in cryptocurrency is that at any given time, the price of a particular coin may change drastically. Or, a transaction that was already finalized might turn out to be disadvantageous for the buyer but cannot be reversed anymore.

    Here is how Utrust combined the traditional buyer protection system with blockchain technology:

    1. The transaction begins with buyers looking for merchants accepting cryptocurrencies. Through the merchant’s website, they can see if they have integrated Utrust with their payment system. Buyers can also use the Utrust wallet on their mobile phones to store, send and buy products and transactions will be processed instantly.
    2. The buyer is charged a total payment fee that covers a 1% commission and conversion fee. This is what Utrust carries to convert cryptos into fiat currencies in real-time with the best conversion rates.
    3. When the buyer completes the purchase of a product, the fiat money they pay will be converted and held in escrow. It will only be released after a prescribed holding period.
    4. Should there be no disputes in the transaction, the payment is released from escrow.
    5. The seller receives the payment in fiat currency, which he can withdraw, or convert to another cryptocurrency.
    Utrust wallet
    Utrust wallet

    What is the holding period? Utrust’s Performance-Based Criteria

    The holding period in point 3 above refers to the time period before the merchant receives the actual payment for the product sold. Utrust determines the length of the holding period depending on the reputation of the merchant in the marketplace.

    The purpose of the holding period is to ensure that the products each customer buys are received in a condition agreed upon before each transaction. If the transaction is all well and good, the amount held in escrow is released.

    For successful transactions or those that are dispute-free, the merchant earns good reputation ratings. But the more disputes they experience in their transactions, the lower their rating becomes. And the lower their reputation rating is, the longer their payment holding period is.

    UTrust’s Third-party Mediation

    Utrust’s third-party mediation in transactions takes the form of establishing a safe communication platform for everyone involved. Through a messaging system, buyers and sellers can easily discuss their concerns with a particular product if they need to. And if a conflict arises, Utrust has impartial mediators who can resolve arising disputes and decide whether to refund a buyer or release payments to the merchant.

    What Problems Is Utrust Trying to Solve?

    Cryptocurrency Volatility

    The reason why some merchants do not accept payments made in cryptocurrency is because of high transaction fees and volatility. This makes crypto transactions less feasible and much riskier for merchants and buyers.

    Consumer Protection

    Consumer protection is the process where the merchants can interact with the seller before a transaction is actually finalized. If a product received seems to be faulty, it must be settled accordingly before each transaction is closed. But this is not the case with most payment gateways. Blockchain’s immutability makes it difficult for merchants and buyers to reverse problematic transactions because of the nature of blockchain transactions.

    Advantages of Utrust

    Immediate Conversion From Crypto to Fiat

    Sellers have the option to accept the fiat currency of their choice for payments. To protect sellers from market volatility, funds are immediately converted into fiat currency whenever customers pay in cryptocurrency.

    The seller then receives the payment and is offered the option to withdraw it in his bank account, store it in their wallet, or convert it into another cryptocurrency.

    Buyer Protection System

    Apart from addressing market volatility, Utrust also took steps in protecting consumers from scams by acting as a third-party mediator between transactions. Every purchase is protected from the point of payment to delivery.

    Utrust has a blockchain-powered buyer protection system that creates a safe and secure environment for payment transactions between customers and merchants. This is done via Utrust holding the funds and releasing them to the seller on performance-based criteria.

    And because transactions are recorded on the blockchain, they are irreversible and final. This eliminates the possibility of fraud from buyers, chargebacks, and other financial losses arising from failed transactions.

    While there are a lot of other payment gateways available in the cryptocurrency space, Utrust is the first to provide consumer protection and third party mediation, unlike other blockchain payment gateways.

    Partners

    Utrust has already on-boarded several businesses such as S.L.Benfica, PRW Jewlery, Phone House, iperfumes.com, Bleu Jour, Whow, Alternative Airlines, Woocommerce, Morefrom and Elrond, among others.

    Conclusion

    We can get the best out of technology and innovation by putting together the best features of traditional innovations and blockchain technology. UTrust did exactly that when it meshed together the traditional process of consumer protection and the advanced infrastructure brought by blockchain.

    If we are looking at increasing the adoption rate for cryptocurrencies, this is the way to go. Utrust addresses the risk of price volatility that scares merchants from accepting them as payment transactions and offers a solution to the problem of fraudulent payments.

    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.

  • Ampleforth ($AMPL) review: The essential guide to this DeFi protocol

    Ampleforth ($AMPL) review: The essential guide to this DeFi protocol

    Ampleforth is a game changer that is claiming the spotlight on Decentralised Finance (DeFi) following the success of several lending platforms such as Compound ($COMP), Aave ($LEND), dYdX, etc. Ampleforth is a DeFi protocol that aims to reinvent money both within and beyond the cryptocurrency space. While centralized finance (CeFi) and DeFi as we know today have their own unique sets of problems, the Ampleforth protocol is here with the aim to address them.

    The protocol has a native token known as $AMPL. It is a stable currency that has both inflationary and deflationary capabilities designed to adapt to demand.

    Background

    Ampleforth was created by Evan Kuo, an engineering graduate of UC Berkley. He was also the former CEO of Pythagoras Pizza, the first pizzeria to tokenize its franchise.

    Evan Kuo
    Evan Kuo (Image credit: Cody Pickens)

    Kuo’s motivation for creating Ampleforth was twofold. The death of his father, which made him want to leave a legacy after his passing, and his passion for tech and finance which brought him into the cryptocurrency industry.

    He recognised two things that cryptocurrency was trying to reinvent: money and banking. Of the two, money was a lot easier to work with and so that became his focus.

    The Ampleforth Foundation was then funded by Pantera Capital, True Ventures, Huobi exchange and Brian Armstrong. Most of the members of the foundation consist of “engineers, academics, investors, and enthusiasts” from Ivy League universities.

    Ampleforth raised a total of nearly $10 million USD in 2 Initial Coin Offerings (ICO) and an Initial Exchange Offering (IEO).

    Ampleforth Protocol

    Ampleforth Protocol is a cryptocurrency ecosystem built on the Ethereum blockchain. What makes it stand out is its adaptive supply, that is to say, Ampleforth adjusts the circulating supply according to demand.

    When the demand for Ampleforth increases, the supply increases. Conversely, when demand decreases, the supply also decreases. This makes Ampleforth prone to being mistaken as a stablecoin since it does function quite similarly.

    However, it is not backed by any cryptocurrency or fiat currency like most stablecoins are. And although the system attempts to keep the value close to $1 USD, sometimes it could go way past $3 USD depending on the demand.

    As of press time, $AMPL is trading at $1.64 USD according to Coin Market Cap.

    The Ampleforth Protocol is autonomous, but not decentralized. The Foundation still holds the keys to the system, and have the power to freeze all assets or change token supply arbitrarily. So for some decentralization purists, this is a red flag.

    Ampleforth Monetary Policy

    Kuo came up with Ampleforth’s economic design after examining the history of the U.S. Dollar. Back in the day, every U.S. Dollar bill was backed by gold bullions, which were stored in government vaults. Gold is a great store of value but it has an inflexible supply. Furthermore, going by the gold standard alone runs the risk of runaway deflation.

    After World War II, the Dollar was in high demand globally and the U.S. couldn’t keep up. The amount of gold is fixed since mining can only introduce very small amounts of new gold in a given timeframe. Therefore, the U.S. government decided to abandon the gold standard to avoid stagnation of international trade.

    And that became the birth of the fiat U.S. Dollar, which we now know has its own set of shortcomings. One problem with fiat money is that you could only print more of them but not destroy them. Therefore, the supply can only be partially controlled in a sense. Furthermore, the people in charge of the minting facility is also subject to greed and corruption.

    Ampleforth’s monetary policy is a solution to both fiat and gold-backed currencies since it is designed to maintain a stable value by adjusting the supply to match demand.

    As an illustration, say you have 1 AMPL worth $1 in your wallet. If the demand for AMPL rises and causes the price to jump to $2, the Amplforth Protocol will expand the supply of AMPL such that you’ll end up with two AMPL in your wallet worth $2. This process is called a “rebase”.

    The rebasing process does not dilute existing token holders. You get to retain the same percentage of the total supply yet the value you held doubled.

    Ampleforth use cases

    Ampleforth divides its use cases based on its goals: near term, medium term and long term use cases. In the near term, AMPL aims to diversify cryptocurrency portfolios. Most cryptocurrencies are correlated to Bitcoin’s price pattern, which poses a risk. But because of AMPL’s rebase mechanism, it is decoupled from Bitcoin’s price pattern and allows cryptocurrency traders to have some diversity in their portfolio.

    In the medium term, Ampleforth aims to work as a stable store of value or form of collateral for decentralised banks and DeFi applications. This is because unlike fiat-backed stablecoins, it does not pose the risk of devaluation of its underlying asset.

    Ultimately, Ampleforth hopes to become a “A better Bitcoin”. It wants to be an alternative to central-bank money that can adapt to sudden shocks in the market. In that sense, it is competing with Bitcoin and XRP; not to mention national currencies. But as of the moment, it is being used primarily in the cryptocurrency space.

    Another opportunity it offers is arbitrage. Arbitrage traders have the chance to reap profits during the time the supply is reduced when the price rises. On the other hand, they can increase their AMPL allocation before the supply is increased when the price drops.

    How the Amplforth ($AMPL) rebase process works

    The supply of Ampleforth adjusts daily every 1pm EST to match the demand via a smart contract. The system utilizes Chainlink’s oracle network alongside the Ampleforth oracle to siphon price data from KuCoin and Bitfinex.

    The smart contract ensures that Ampleforth sticks within the designated equilibrium range, which is between $0.96-$1.06. If the price of AMPL hits beyond the two extremes, the smart contract will continue to “expand” or “contract” accordingly until the value of the token is in the equilibrium range again.

    AMPL price vs supply
    AMPL price vs supply

    Ampleforth Geyser: What is it?

    Ampleforth Geyser is a smart faucet that incentivizes liquidity providers to supply AMPL to a Uniswap pool. It is brought about through a collaboration between the Ampleforth Foundation and Uniswap.

    Users are rewarded with AMPL tokens for depositing AMPL to Uniswap. The longer the tokens are held in the pool, the higher the returns.

    Ampleforth geyser
    Ampleforth geyser

    To make money from Geyser, visit their web portal at ampleforth.org/geyser and connect either your MetaMask or Coinbase wallet. You will need to deposit equal amounts of ETH and AMPL to participate.

    How do I get AMPL tokens?

    Aside from getting AMPL tokens during the rebase process (though this requires you to stake some AMPL in the first place), people can also buy AMPL from cryptocurrency exchanges. Here are the major exchanges that offer AMPL tokens for sale: Uniswap (v2), KuCoin, FTX exchange and Bitfinex. Learn more about our picks for the top best cryptocurrency exchanges of 2020.

    Conclusion

    Ampleforth has to some degree successfully redesigned the way money works despite only being a few years old. Their influence has not penetrated a huge portion of the market as of yet but there is a lot of room for them to grow. And being part of the DeFi movement makes it a lot easier to gain more traction. As a matter of fact, over 36 million AMPL has been deposited in Geyser as of now. This is a great stepping stone for the protocol.

    Ultimately, Ampleforth’s goal is to compete against national currencies, and perhaps against Bitcoin as well, to become the world currency. For now, Ampleforth should work on establishing its trust and legitimacy within the cryptocurrency community, which will be a stepping stone for it to achieve its use-cases.

    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.

  • Balancer Finance Guide and Review ($BAL)

    Balancer Finance Guide and Review ($BAL)

    Balancer ($BAL) is an automatic market maker (AMM) protocol that reduces the cost and slippage between trades of different cryptocurrencies. Balancer is a decentralized replacement for the traditional market-maker, a 3rd party entity that provides liquidity to traded assets. Balancer protocol can be called upon by different decentralized trading platforms to automatically figure out the best rates and trading prices using Smart Order Routing (SOR). The protocol also provides the funds necessary to complete the trade, using the funds from available Balancer Pools. Balancer Finance was Launched in September 2019 by Mike McDonald and Fernando Martinelli, since then the Company had a successful seed round with $3 million invested.

    Balancer Exchange Interface

    Balancer uses the N-dimensional invariant surface that is built upon the Uniswap dapp. They also use Automated Market Makers (AMMs), much like UniSwap, which are built off computer algorithms to regulate the market. Their Pools are doing away with portfolio management fees with users instead of collecting fees from traders, who re-balance the portfolio by “following arbitrage opportunities”.

    Balancer has shifted itself into a prominent position within the Decentralized Finance (DeFi) hierarchy, as it’s BAL token caught the coattails of Compound Protocol’s governance tokens rise at the start of 2020. This saw increased attention on the exchange and has been earmarked as a competitor in the DeFi field. This perception coincides with an increase in popularity for DeFi projects and their mining qualities, something highlighted in a recent Forbes report on “DeFi Yield Famers”. So, if you are a budding or curious yielder or someone looking to understand the emerging DeFi market, this is the guide for you. In this article we provide a full breakdown of the project, what it is and explain the benefits of using this DeFi exchange and protocol.

    To learn more about Balancer including its strengths and weakness, check out our video:

    Balancer Finance: What you MUST know about this DeFi platform

    Balancer’s Pools Explained: What are they?

    Balancer pools are collections of user supplied funds that are used to provide liquidity to trades and transactions. These pools can total up to more than $11 Million USD (eg, the USDT, BAT and COMP pool). This collection of funds will be called upon during cryptocurrency trades as the as the counter-party to the transaction, thus providing liquidity to traders.

    Controlled/Private Pools: These are when a fixed state is over the pool and the creator can set out the tokens and weights. This is usually done for private actors who don’t want outside liquidators, for example third party liquidators working with large quantities.

    Finalize/Shared Pools: These pools are open for all actors to add liquidity and is a one way transition. They can not be amended and have a fixed parameter, unlike controlled pools and are usually for the general public to liquidate and make profits.

    Alongside the two main subcategories of pools, there are other more specific smart pools that you can use. For example, Liquidity Bootstrapping Pools (LBPs) give the opportunity for teams to release a project token while at the same time building deep liquidity. Other examples include stablecoin pools with zero impermanent-loss, which founder Martinelli wrote an extended explainer here.

    Pool creator tool
    Balancer’s Pool creator tool

    $BAL Token

    In its initial launch, Balancer didn’t have their own native token but this changed this year, with the company revealing their governance token $BAL. The Company began distributing the token on June 23rd 2020 and will be distributed on a weekly basis for liquidity providers on the site.

    However, there is no economic value to BAL tokens, rather they are currency for governance rights on the protocol. These rights allow the holders to have a say on the structure of Balancer protocol, with weight in terms of implementing new features, protocol fees, and larger structural changes like layer 2 scaling as well as contracts on other blockchains.

    There are 100 million tokens created but 25 million of them have already been allocated to the founding members, core developers, advisers, and investors. The rest though are free to be mined by Balancer users who add liquidity.

    According to Balancer’s website: “Every week 145,000 BALs, or approximately 7.5M per year, are distributed to liquidity providers. This means in the first year of BAL’s existence there would be 30% supply inflation off the initially allocated supply of 25M tokens.” So, how can you earn the weekly BAL allocation? This is done through BAL liquidity mining, which is discussed below.

    BAL Liquidity Mining: How to earn $BAL tokens?

    Liquidity mining has become one of the most popular topics of conversation in the space of decentralized finance (DeFi) in recent weeks. At its core, liquidity mining is essentially when users supply liquidity of assets to a DeFi protocol in exchange for some kind of reward. That reward may be various tokens, including governance tokens of the underlying DeFi protocol (which may end up having monetary value – like COMP). It basically offers a way for users to earn money on assets that they hold.

    The main way to earn $BAL tokens is through Liquidity Mining. Essentially, Balancer rewards liquidators who pay into their pools in the form of $BAL tokens. The Company’s proposal is to give out BAL tokens in proportion to the amount of liquidity each address contributes relative to the total liquidity on Balancer.

    Another way to make BAL is through creating a pool and reaping the benefits of trading fees. These are handed out in the form of $BAL. This system also incentivises the pool creator to lower fees as the lower the fees are, the more BAL they receive. Balancer’s fee gives pool creators a short term or a long term option, and they hope it will encourage lower fees so that traders are lured onto the exchange.

    Speaking on the issues concerning distribution of BAL and governance rights, founder Martinelli said: “By far the most important factor or reason why we are doing that is because we want this thing to be decentralized. We believe in a decentralized, trustless future, and we want Balancer to do that. We need the distribution to be in a healthy way.”

    Balancer Yield Farming & Best Pools

    Top liquidity pools on Balancer are currently returning up to 30% APR on Return on Liquidity. These rates have drastically improved after the Cap Factor update on July 5th 2020.

    The best way to find the current best rates and return on liquidity is via the Predictions Exchange Chart.

    Balance Coin Whitelisting

    In order to quality for airdrops of $BAL Balancer Governance token, pools need to have at least two coins that are on the whitelist. Coins are added to the balancer whitelist on a weekly basis. The amount of $BAL being distributed depends on the trade volume and total liquidity, with a maximum of $

    Trading on Balancer’s Exchange

    Alongside their liquidity and pools, Balancer is first and foremost a decentralized exchange. With no KYC or signups, the anonymity and privacy is upheld. All you need to start trading on there is a wallet like MetaMask. Learn how to set up a Metamask account here.

    The Exchange has a number of tokens available to trade. These include: Ethereum (ETH), DAI, MKR, USDC, REP, BTC++, WBTC, WETH, BAT, SNX, ZRX, LINK, DZAR, UMA, LRC, REN, LEND, KNC, COMP, OCEAN. The Exchange also has a number of tokens without pools such as tBTC, ANT, cUSDC, cDAI, imBTC, pBTC, sBTC, sUSD, PNK, AST and RPL.

    Balancer: are there any risks?

    Decentralized exchanges are often associated with high risks. This sort of ability to trade so easily with high interest rates is a concern. This was highlighted more recently by Ethereum founder, Vitalik Buterin, who cautioned that they were “flashy DeFi things” which sometimes come with “unstated risks attached”.

    Tweet from Vitalik Buterin

    Balancer has acknowledged the risks, with their website warning users that: “Balancer is a very new protocol. Although we are taking every precaution and doing extensive audits, this is still very much a beta product. Use small amounts of funds to start.”

    Conclusion

    Overall, Balancer has position itself as a powerful tool to automate marketing making and reduce transaction fees for different cryptocurrencies. It’s leading the liquidity pool market with the ability to create n-dimensional liquidity pools which is a market first. With their unique formula which negates and actively discourages large fees, Balancer has created a decentralized project that could potentially be a self-sufficient system with a community emphasis.

    For now though, the main target for Balancer is to create stiff competition for UniSwap and make themselves the industry leaders in the AMM field on Ethereum. Many believe this is possible as the DEX functionality on Uniswap is the same as Balancer, as one Uniswap token-for-token pool is equal to the Balancer pool with two tokens set to 50/50, or 1:1, value.

    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.

  • What is Compound Finance ($COMP)? A guide to hacks and tips on the latest DeFi platform

    What is Compound Finance ($COMP)? A guide to hacks and tips on the latest DeFi platform

    Compound Finance is a leading decentralised finance (DeFi) protocol which allows users to deposit and borrow cryptocurrencies, and earn interest whilst doing so. How Compound does this is by creating liquid money markets for cryptocurrencies by setting interest rates with the use of algorithms. They are popular mainly because they are cryptocurrency exchange Coinbase‘s first ever investment into a crypto project and prices for their $COMP token had more than doubled in the past week. In this Compound guide we cover topics such as what is Compound, how to use the platform profitably and how to earn more of their $COMP token.

    For an overview, check out our explainer video on DeFi and Compound:

    What is Decentralised Finance (DeFi)?

    Decentralised Finance (DeFi) was designed to “cut out the middle man” i.e. banks and reduce the cost of traditional financial operations such as taking out a loan or buying property. The aim of DeFi is so that people, particularly the unbanked can have open access to every financial service on the internet with their smartphones, without needing the banking system. Smart contract platforms such as Ethereum opened the door to DeFi, whereby programs running on the blockchain can self-execute when certain conditions are met. Developers can make use of these smart contract platforms to build decentralised apps (Dapps) with various functions. Developers brought the concepts of Dapps and DeFi together by bringing functions traditionally served by banks onto smart contract platforms. Compound is an example of a DiFi app, it is a blockchain-based Dapp which allows deposits and taking out loans of cryptocurrencies on its platform.

    How does Compound work?

    Compound operates similar to a bank. You can deposit various cryptocurrencies and earn an annual interest on your deposits, similar to depositing your money into the bank. However, Compound’s main difference is that it does not have custody of your cryptocurrency deposits. Instead, you are actually sending your crypto to and interact with a smart contract, rather than another company or user. This feature is important because it means that no person or authority can control or take your funds.

    What makes all of this so interesting is that since Compound is a DeFi platform, it does not have to follow the Federal Funds Rate. It can do something completely different and cannot be shut down since there is no central authority.

    How to supply (deposit) cryptocurrencies onto Compound and earn interest

    On Compound’s website you can earn interest when you deposit (Compound refers to this as “supply”) cryptocurrencies onto their platform. To do this, first load an Ethereum account with any of the cryptocurrencies supported by Compound. Then on the Dashboard, choose which cryptocurrency you wish to supply to the platform by clicking on it.

    Supply cryptocurrencies
    Choose which cryptocurrency you wish to supply to the platform

    In the below image you can see that we will be depositing USD Coin (USDC) which generates an Annual Percentage Yield (APY) of 0.12%. So you can earn 0.12% per year if you supply USDC to the platform. Input the amount you wish to supply and confirm by clicking “SUPPLY”. A metamask window will pop up where you will interact with the smart contract and confirm the transaction. You will be charged gas fees for interacting with the smart contract. In our case we were charged USD$1.

    Supply cryptocurrencies
    Supplying cryptocurrencies to the platform generates interest

    Once you have supplied cryptocurrencies onto the platform, you would be able to use Compound’s other features such as using these supplied cryptocurrencies as collateral to take out loans.

    An important point to note is that Compound has floating interest rates which are subject to change. How Compound determines the interest rate is similar to the Federal Reserve, Compound would analyse the supply and demand for a particular cryptocurrency and then set a floating interest rate that will adjust based on market conditions. Compound also takes a 10% cut off your earned interest. Users can take back their cryptocurrencies at any time with a 15 second lag between executing the instruction and receiving their crypto.

    How do I take out loans/ borrow cryptocurrencies on Compound?

    You can use your deposited cryptocurrencies as collateral to borrow other cryptocurrencies. Compound requires users to put up 100% of the value of your intended loan. There are risks of doing this though which will be explained below where we look at Compound’s liquidation clause.

    Borrowing cryptocurrencies does also require you to pay fees. For example in the below image you can see that taking out a loan of BAT will cost you a whopping 29.4% per year.

    Borrowing cryptocurrencies
    Borrowing cryptocurrencies requires you to put up collateral and pay fees

    You can also see from the above image how Compound makes money, since there is a spread between the amount of interest generated from depositing, say BAT and the amount of fees you need to pay for borrowing the same.

    What is $COMP token? How can I earn $COMP?

    Since May 2020, Compound has transitioned to community governance. This means holders of Compound’s token, $COMP can make proposals and vote on decisions relating to how Compound is to be developed or run, e.g. what kind of collateral should Compound support, or what the interest rates should be.

    There is a total supply of 10 million $COMP, of which 42.3% is reserved for distribution to users to earn when they use Compound e.g. by supplying or borrowing cryptocurrencies. For every Ethereum block, 0.5 $COMP is distributed across Compound’s 9 markets in proportion to the interest accrued in the market. And within each of these markets, the amount of distributed $COMP is divided 50:50 between suppliers and borrowers of that particular cryptocurrency. Hence the cryptocurrency which is earning the most COMP per day is always changing. Users should check Compound’s User Distribution page, where they can see the amount of interest paid per day as well as the amount of $COMP distributed to suppliers and borrowers.

    You can also earn $COMP by voting on various governance proposals concerning how Compound should be run.

    Governance proposals
    Users can vote on governance proposals and earn more $COMP

    $COMP can be traded on various exchanges, such as Coinbase or FTX Exchange. And there was certainly a lot of attention focused on $COMP since prices for the token recently shot up from USD$60 to over USD$300 in a matter of days.

    $COMP prices
    $COMP prices

    How are people using the Compound platform to earn 100%+ APR?

    Users earn COMP when they supply or borrow cryptocurrencies on the platform. So in the below image we deposited 500 USDC and borrowed 300 USDT to get a net effective interest of -12.27% which on the face of it does not look profitable.

    Net interest
    In our case, depositing USDC and borrowing USDT generated a net interest of -12.27%

    BUT at the same time we are also earning $COMP. This calculator shows you how much $COMP would be distributed depending on the type and amount of tokens supplied or borrowed. So as seen in the below image, whilst the net interest was -12.27% per annum, we EARNED 13.94% APY of $COMP. Basically, you are being PAID to take out a loan.

    $COMP mining: Another way to potentially earn more $COMP

    $COMP mining goes beyond simply supplying cryptocurrencies and profiting off the interest rates on Compound. Rather it is about getting as much $COMP rewards as possible in the shortest amount of time. Some methods even allow you to multiply your earnings by folding your position 4x.

    In a nutshell, people have have been finding ways to do this by first depositing USDC, borrowing USDT and then converting the USDT to USDC. Then depositing the USDC onto the platform, leveraging it, withdrawing USDT and depositing it onto the Compound platform several times over.

    What cryptocurrencies does Compound support?

    Compound currently supports 9 cryptocurrencies, namely: Ether (ETH), USD Coin (USDC), Basic Attention Token (BAT), Tether (USDT), 0x (ZRX), Wrapped BTC (WBTC), Dai (DAI), Augur (Rep) and Sai (Legacy DAI) (SAI).

    Available markets on Compound
    Available markets on Compound

    What are the risks of DeFi platforms?

    DeFi, and any such platforms such as Compound has the main feature of being decentralised. Yet, it is decentralisation that brings associated risks. This is because instead of trusting a central authority to supervise the transactions, we are trusting the code which the smart platform was built upon. If there is a mistake in the smart contract e.g. the conditions for release of funds are set incorrectly, there is no overriding body which can correct this mistake or any customer service representative that can help. And the biggest risk of all is if the developer did not code the contract correctly making it vulnerable to hackers. An example of this was the dForce hack where hackers exploited a well-known exploit of an Ethereum token, resulting in losses of USD $25 million worth of customers’ cryptocurrencies.

    Risks of using Compound: Compound’s liquidation clause

    For Compound, there are risks associated with trying to earn $COMP through borrowing on the platform. Compound has a liquidation clause that kicks in when borrowing on the platform. For instance if the cryptocurrency you are borrowing increases in value and exceeds the value of your collateral, your borrowing account will become insolvent. In such case, other users can step in and repay a portion of your outstanding loan in exchange for a portion of your collateral at a liquidation incentive. This liquidation incentive is the discount at which other users can receive your collateral. So if the liquidation incentive at the time is 8% (subject to change through voting on Compound’s governance system), then other users can receive your collateral at 8% off the market price when they help repay your loan. Hence there are serious incentives for users on Compound to liquidate others and this will result in the person being liquidated to potentially suffer huge losses.

    What is Compound’s aim for the future?

    Currently, Compound only deals in cryptocurrencies on the Ethereum blockchain. However the Company eventually wants to expand and move into carrying tokenised versions of real-world assets, for example the US Dollar, Japanese Yen or stocks in companies such as Google.

    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.

  • Coinbase Fees- How to avoid them

    Coinbase Fees- How to avoid them

    Coinbase, like most exchanges charges withdrawal fees. However there is a neat trick allows you to avoid withdrawal fees. Coinbase is the most popular cryptocurrency exchanges in the US and UK due to the ability to directly purchase cryptocurrencies with fiat, as well as being one of the few exchanges that allow US citizens to trade. Many not only use Coinbase to buy cryptocurrencies, but also to store their cryptocurrencies. So with frequent usage of the Exchange, withdrawal fees can certainly add up. (https://atelierdetroupe.com/) Here are some top tips and hacks to avoid or reduce Coinbase Fees.

    To find out more about the best Cryptocurrency Exchanges in our Guide.

    Reduce Coinbase Fees when sending Bitcoin

    Coinbase and Coinbase Pro (previously known as GDAX are two of the more popular platforms around the world where people can buy, sell, and trade cryptocurrencies. Coinbase and Coinbase Pro currently operate in the US, Europe, UK, Canada, Australia, and Singapore. Users can trade cryptocurrencies such as Bitcoin, Ethereum, and Litecoin.

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    Coinbase vs Coinbase Pro: What are the differences?

    Coinbase and Coinbase Pro are actually two separate but related products. Coinbase was launched first in 2012 and aimed to provide a user friendly platform for people with no experience to buy and sell bitcoin through bank transfers. In 2015, with the growing interest and popularity in cryptocurrencies, the Company expanded to create Coinbase Exchange- a US based Bitcoin exchange to allow for Bitcoin and cryptocurrency trading. Because Coinbase Exchange was beyond the original scope for their more “casual” users, they decided to rebrand it to GDAX – Global Digital Asset Exchange (which is now known as Coinbase Pro).

    GDAX and Coinbase compared
    GDAX and Coinbase compared

    Coinbase – a place where customers can buy, sell, send, receive and store your cryptocurrencies.

    Coinbase Pro (formerly GDAX or Coinbase Exchange) – an exchange for professional traders. Aside from having the same functions as Coinbase, Coinbase pro also allows users to do the following:

    • Trade between different cryptocurrencies;
    • place market, limit and stop orders; and
    • have more detailed trading charts to analyse short term trends (e.g. order book, volume etc).

    Most importantly, Coinbase Pro has lower fees and in some limited transactions, zero fees.

    What are the fees on Coinbase and Coinbase Pro?

    Coinbase buy/sell transaction fees

    Coinbase has the most expensive fees compared to other what we consider as Tier 1 Cryptocurrency Exchanges. Coinbase charges a 0.50% fee for cryptocurrency purchases and sales. On top of this, Coinbase also charges a Coinbase Fee. The Coinbase Fee is the greater of (1) a flat fee depending on order size; (2) a variable percentage depending on your region and payment type.

    Here are the flat fees charged by Coinbase:

    Total Transaction Amount Transaction Fee (USD, EUR, GBP)
    Less than $10 $0.99, €0,99, £0,99 
    More than $10, Less than $25 $1.49, €1,49, £1,49
    More than $25, Less than $50 $1.99, €1,99, £1,99
    More than $50, Less than $200 $2.99, €2,99, £2,99
    Flat fee

    Below is the variable percentage for users in the US. Check here for the variable percentages for other countries.

    US variable percentage
    US variable percentage

    Here’s an illustration of how to calculate your buy/sell transaction fee. For example, I’m in the United States and want to purchase USD $20 worth of Bitcoin using my debit card. My flat fee would be USD$1.49 because total transaction amount more than USD$10 but less than USD$25. Whilst the variable percentage would be 3.99% because I am paying with debit card. In this case, Coinbase would charge me USD1.49 because the flat fee is higher than the variable percentage.

    Coinbase crypto to crypto conversion fees

    For crypto to crypto conversions e.g. USDC to BTC, or BTC to ETH, Coinbase charges a spread margin of up to 2%. The exact margin would depend on the market fluctuations at the time.

    Coinbase Pro trading fees

    Coinbase Pro on the other hand operates on a maker-taker fee model. You would be considered a “taker” if you place an order at the market price, and this order is filled immediately. On the other hand, you are a “maker” if the order you placed is not immediately matched by an existing order. In the case where only part of your order is matched immediately, you would pay the taker fee for that portion only. You would then pay the maker fee for the remainder of the total order when it is matched.

    Coinbase Pro’s fees are charged as a percentage of the transaction in question. As to the percentage, it would depend on the total amount traded by users in 1 month as follows:

    Coinbase Pro trading fee
    Coinbase Pro trading fee

    Based on the above, for small volume users, e.g. those that trade less than USD$10,000 a month, their fees would be 0.50% of each transaction.

    Of course, one possible method to reduce trading fees is to work towards a higher tier by increasing your monthly trade volume. For example, if more than $10,000 USD is traded in a month, the Maker and Taker fees drop to 0.35%, this means 15% a reduction on trading fees.

    Coinbase hack: use Coinbase Pro (GDAX) to avoid withdrawal fees from Coinbase

    Coinbase withdrawal fees can be very high. When users withdraw their coins off the Coinbase platform, Coinbase will charge users a fee based on their estimation of the network transaction fees they anticipate they will pay. Coinbase has stated that in some circumstances, the fee that Coinbase pays may be different from the estimate. So there is a possibility that the estimated fee that users have to pay are HIGHER than the network transaction fee actually paid by Coinbase.

    However, there may be a way to avoid Coinbase withdrawal fees. According to Coinbase, they do not charge for transferring cryptocurrency from one Coinbase wallet to another. Since Coinbase and Coinbase Pro (GDAX) are owned by the same company, sending your funds from Coinbase to Coinbase Pro would be instant and free since it is a transfer from one Coinbase wallet to another.

    Coinbase Pro offers FREE withdrawal fees for Digital Assets like Bitcoin
    Coinbase Pro offers FREE withdrawal fees for Digital Assets like Bitcoin

    The key here is that Coinbase Pro does not charge any withdrawal fees. You can then send your cryptocurrencies from Coinbase Pro to any other wallet outside of the Coinbase platform without paying any network transfer fees.

    Withdraw in another cryptocurrency

    Bitcoin has the most expensive transfer fees on Coinbase. One way to reduce transfer fees is to exchange Bitcoin to another cryptocurrency such as Litecoin or Bitcoin Cash. These coins will be cheaper to transfer, and could be exchanged back to Bitcoin once the transfer is complete on the receiving exchange.

    Use another Exchange

    If Coinbase fees are too expensive for you, you can always use another exchange such as Binance or FTX Exchange. These exchanges offer more competitive withdraw rates and also have more types of cryptocurrency options. To find out more about the best Cryptocurrency Exchanges in our Guide.

    Is Coinbase expensive to use?

    Coinbase fees are in line with other cryptocurrency exchanges, with $2.99 being charged for transactions between $50-200 dollars. However for larger transactions, Coinbase charges a variable percentage fee of 1.49%. For anything over $10,000 USD, we recommend using Over The Counter (OTC) trading desks which are better at handling large volumes with more flexible rates. Here’s a list of the top 5 OTC desks.

    Further reading

    To learn more about Bitcoin, cryptocurrencies and how to get started, check out my course created in collaboration with Jeff Kirdeikis of Uptrennd- Bitcademy: Learn, Invest & Trade Bitcoin – In Under an Hour

    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.

  • Free TON Explained – A community project from the ashes of Telegram?

    Free TON Explained – A community project from the ashes of Telegram?

    Free TON (The Open Network) is a new blockchain platform created by the developers of the Telegram Open Network (also abbreviated TON). FREE TON positions itself as a community project which uses the telegram developed open source “TON OS” as virtual Operating System to run smart contracts and decentralized applications. Despite the name, Free TON is not officially affiliated with Telegram Inc nor are there any claims that it will be incorporated in the Telegram App. The project also doesn’t include Telegram CEO Pavel Durov, which is very likely an intentional move to distance themselves from the Telegram Open Network.

    Telegram Open Network
    Telegram Open Network is officially delayed until 2021

    Free TON is based on TON OS

    Free TON’s Declaration of Independence

    TON OS is designed as a decentralized operating system to handle decentralized applications. One way to imagine it is that it’s a more full-featured than the Ethereum Virtual Machine which only strictly run code. TON OS has a stack of components which can be used by developers to create powerful applications without the need to

    Built on Open Sourced Components

    Free TON is built on components that were open sourced this week. These components were originally part of the Telegram Open Network project developed by TON labs and other parties. By making these components Open Source, everyone around the can view and copy fragments of the code.

    Distribution of TONs

    Free TON will be distributed via “Giver Contracts” who are responsible for distributing TONs to 3 major groups:

    • Users
    • Validators
    • Developers

    Referral Giver be responsible for airdropping coins to initial users via a referral program. This will be the largest group, and Referral Givers will give away 85% of all TONs.

    Free TON Roadmap

    • Stage I ”Raging Bull” — Incentivized Beta Network with a Decentralized Time Bomb (DTB)
    • Stage II ”Rumble Fish” — Incentivized Beta Network with validator voting for Network Configuration
    • Stage III “Fight Club” — Decentralized Main Network, at the point where decentralization is sufficiently achieved

    TON Crystal exchange listing

    The TON crystal is the official currency of Free TON. This currency will be used to power transactions on the network (similar to Ethereum Gas) and also used native currency on the network. Currently it’s unknown if there will be any regulatory issues with listing Free TON. (Tramadol) Whilst we know developed by a similar developer pool as the TON project, it’s unknown if it will carry over any of the legal issues.

    Community is not accepting US members

    The Free TON community has a strong “No US resident” policy, where US residents cannot participate in the community nor receive any free tokens. This is likely related to the on-going legal issues between Telegram Open Network and the US SEC – where a pending lawsuit and investigation is preventing the coin from being launched. Very likely the developers behind Free TON has learnt from the previous mistakes and decided not to include US residents in any form.

    Conclusion

    Free TON is everything Telegram Open Network would be – but without Telegram. The community project aims at creating a decentralized network using all the research and development which went into the original TON (a project that was canceled due to regulatory issues).

    How do I get Free TON

    Users will get distributed Free TON via the Referral Giver method. 85% of all TON will be given away by this method

    How do I mine TON

    You cannot mine TON as it’s not using the Proof of Work consensus. Instead, there are 300 public validators that will be able to earn TON