Make sense of the news and how it affects the blockchain space as a whole. Crypto trends is a collection of relevant news and insights to help you make an informed decision.
Algorand is a high-performance next-generation blockchain whose goal is to create a transparent system in which everyone can achieve success through decentralized projects and applications. Many have called this project “Blockchain 3.0”, as it solves Bitcoin’s well-known scalability problems whilst maintaining security and decentralization. Algorand has the native token $ALGO, which will be used as a transfer of value on the network. In terms of technology backbone, Algorand uses a Pure Proof of Stake (PPOs) and pseudorandom functions to prevent malicious attackers from colluding on the network.
Algorand stands out from other high-performance blockchains by the credibility of its founder, MIT professor Silvio Micali. Professor Micali has is the recipient of the prestigious Turing Award for computer science and many of his inventions have directly impacted the cryptocurrency scene.
Founder of Algorand: Silvio Micali
Silvio Micali is the recipient of the Turning award (the highest award from computer scientists) with innovations built around his research in cryptography, zero-knowledge, pseudorandom generation, secure protocols and mechanism design. On top of this, Dr. Micali is the co-inventor of probabilistic encryption, Zero-Knowledge Proofs, Verifiable Random Functions and many of the protocols that are the foundations of modern cryptography
Algorand Foundation
The Algorand Foundation makes use of the Algorand protocol and software developed by Silvio Micali and his team. Their aim is to create an ecosystem that everyone can use to build a borderless digital economy on Algorand.
Specifically, the Algorand foundation holds one-quarter of the total supply of ALGO (i.e. 500 million ALGO), and manages the Algorand blockchain.
Algorand attempts to overcome the Blockchain Trilemma
Vitalik Buterin proposed that a Blockchain can only have a maximum of 2 of these properties
Currently, transactions on the blockchain are very slow because of the âBlockchain Trilemmaâ. This is a term coined by Vitalik Buterin, the founder of Ethereum.
According to this idea, a blockchain has three major features: decentralization, scalability and security.
However, the Blockchain Trilemma proposes that it is very hard for a project to have all three features to a satisfactory condition. A network that is decentralized and has a tough security would not be scalable. Similarly, a blockchain that is decentralized and scalable will have little security etc.
Buterin believes at a fundamental level, a blockchain network can only achieve two of the three features at any time. The Blockchain Trilemma could be the source of scalability issues on most cryptocurrency blockchains. Most cryptocurrency projects cannot handle high numbers of transactions while ensuring network decentralization and security.
What is Algorand- Is it really a Next Generation blockchain?
To attempt to overcome this, Algorand opted for a Pure Proof of Stake (Pure PoS) consensus mechanism. Interestingly, the mechanism employs a different approach compared to other alterations of the PoS mechanism.
For instance, instead of requiring 100% consensus from all the validating parties, Algorand is comfortable with a two-thirds majority consensus. This means that in order to attack Algorand, you will need to purchase more than one third of the total supply of Algorand. This will anyway be uneconomical and holding such a large volume of the supply means that you have a large stake and would not want to see it fail.
Algorand’s secret sauce: Cryptographic sortition
Since todayâs blockchain platforms require speed as an integral component, Algorand has a fast transaction time by enabling fast transaction finality through cryptographic sortition.
âAll transactions are final in Algorand. Once a block appears, users can rely on the transactions it contains immediately, as they can be confident that the block will forever be part of the chain. Even if the Internet is split into multiple pools of users, only one safe and consistent Algorand chain will exist. [Additionally], Neither a few delegated users nor a fixed committee is responsible for proposing blocks in Algorand. Instead, all users are randomly, secretly, and continuously selected to participate in the Algorand consensus protocol.â
The process of confirming blocks on the platform involves two stages; the proposal and voting stage. During the proposal stage, a token is randomly selected, and its owner suggests the next block to be confirmed. At the voting stage, 1000 random token owners are selected to form a committee that approves the proposed block.
How to Stake Algorand?
An Algorand transaction in action
Anyone can participate in the Algorand platform as a block proposer by merely switching their address from offline to online on the Algoexplorer. Luckily, this option does not depend on the amount of Algo tokens staked. Mining is not required, all you need is to stake its ALGO token and have the nodes online.
The Algorand platform supports two types of nodes; relay and participation. An important point to note is that the relay nodes donât participate in voting or decision making. Instead, they facilitate communication between participation nodes. Relay nodes are also hardware intensive compared to participant nodes.
Although Algorand is designed around being fully decentralized, the Algorand Foundation holds a lot of ALGO tokens and hence control. However, the platform is anticipated to be more decentralized in coming months as the foundation continues to liquidate its position.
You can also stake Algorand using your Ledger cryptocurrency hardware wallet. Check out our Ledger Nano X review.
Algorand 2.0 Protocol Upgrade
On 22nd of November 2019, the Algorand foundation announced the next huge leap for Algorand – dubbed Algorand 2.0. This release brings about 3 major features: Native token issuance (Algorand Standard Asset), Atomic swaps for interoperability and smart contract support via the TEAL scripting language.
Algorand Standard Asset (ASA) brings about easy token creation and issuance directly on the Algorand main chain. ASA supports a wide range of tokens, such as fungible tokens (similar to Ethereum’s ERC-20, and also non-fungible tokens (used for digital collectibles). Algorand’s implementation of tokenised assets is directly on the protocol layer (“Layer 1”), allowing for direct access to assets with maximum security. This is a significant advantage over Layer 2 Scaling which requires payment channels in order to operate.
âAlgorand is delivering that innovation with this new set of features that brings an impressive amount of opportunity to decentralized finance.
Shay Finkelstein (CTO of Securitize)
Algorand listed on Coinbase, price surges over 30% in one day
In a complete surprise to cryptocurrency enthusiasts, Algorand was listed on Coinbase on 17th July 2020. People found out only when they saw the announcement on Coinbase’s blog, whereby the Exchange said that their customers can now buy, sell, convert, send, receive or store $ALGO in all Coinbase supported regions. Be sure to check out our Coinbase exchange review and some hacks and tips to avoid Coinbase fees.
People were completely caught off guard by this announcement since in the few weeks prior Coinbase had talked about 18 other cryptocurrencies they might consider listing. Yet Coinbase was not one of those 18 cryptocurrencies.
This listing created a whole flurry of activity for $ALGO, especially in terms of its prices. Since the listing, prices for $ALGO shot up 30% since the announcement and was even trading at $0.367 at its peak.
Algorand becomes the official blockchain platform of FIFA
FIFA, the world football governing body has announced its partnership with Algorand. This sponsorship and technical partnership will see Algorand becoming the official blockchain platform for FIFA, providing blockchain-supported wallet solutions as well as helping FIFA develop its digital assets strategy.
Algorand will also be a FIFA World Cup Qatar 2022 Regional supporter in North America and Europe, and a FIFA Women’s World Cup Australia and New Zealand 2023 official sponsor.
The future of ALGO token: Algorand’s 10-year plan
When the Algorand blockchain was first launched, 10 billion ALGO was minted, which represents the fixed and unchangeable maximum supply of AGLO.
Since then, only 16% of this total supply has been injected into circulation via an auction in June 2019 and subsequent community rewards. Auction proceeds have been used to finance various community, academic, and industry projects which ultimately support the development of economic infrastructure and business opportunities on the Algorand blockchain.
After consideration by the Algoradnd team and based on their analysis and feedback received, the Algorand team have decided that the remainder of the initial 10 billion ALGO tokens would be gradually distributed over a period of 10 years from 2020, i.e. by 2030, the entire supply of ALGO would be distributed. This is much longer than the initial 4 years from 2020 as originally planned by the Algorand team.
In order to implement Founder Silvio Micali’s vision of innovative community governance, the Algorand team are moving towards a new reward system that rewards existing and future participants who are committed to participating in the governance of the Algorand ecosystem and prove their loyalty by locking up their ALGO for the long term. Resources i.e. 3 billion ALGO will be correspondingly distributed to reward long-term holders, and economic and business activity on the Algorand blockchain. The aim of this is to achieve a rate of growth of chain loyalty and economic adoption which would be more than enough to compensate for the gradual release of tokens over 10 years.
Furthermore, the funds initially allocated for sales will now be diverted to other areas such as community incentives, governance participation and ecosystem support.
FAQ
How do you mine Algorand?
It is currently not possible to mine Algorand using computer hardware. Algorand uses a proof-of-stake consensus, so it is possible to earn ALGO rewards by simply staking Algorand in the wallet.
Where is Algorand located?
Algorand is a decentralized project founded by MIT professor Silvio Micali. The foundation responsible for maintaining Algorand, the Algorand Foundation is incorporated in Singapore and is located at 1 George Street, #10-01, One George Street, Singapore (049145).
How do I buy an Algorand?
You can Buy Algorand on popular exchanges such as Binance or Coinbase with the ticker $ALGO
How do you stake algorand
Algorand can be directly staked via the mobile wallet application which can be installed on both Android and iOS devices. To stake the coin, deposit ALGO directly into the wallet. The wallet will automatically accumulate ALGO over time.
What is Algorand’s community governance?
Algorand started its community governance program on 1st October 2020, it gives ALGO holders the power to make decisions regarding the direction and future of Algorand. People can participate in governance i.e. become Governors by committing their ALGO for the duration of the 90 day voting period and then voting on the proposals. After the 90-day voting period, participants can claim their governance rewards.
Disclaimer: Cryptocurrency trading involves significant risks and may result in the loss of your capital. You should carefully consider whether trading cryptocurrencies is right for you in light of your financial condition and ability to bear financial risks. Cryptocurrency prices are highly volatile and can fluctuate widely in a short period of time. As such, trading cryptocurrencies may not be suitable for everyone. Additionally, storing cryptocurrencies on a centralized exchange carries inherent risks, including the potential for loss due to hacking, exchange collapse, or other security breaches. We strongly advise that you seek independent professional advice before engaging in any cryptocurrency trading activities and carefully consider the security measures in place when choosing or storing your cryptocurrencies on a cryptocurrency exchange.
Wootrade ($WOO) is a digital asset liquidity pool that partners with cryptocurrency exchanges, wallets and over the counter trading desks (OTCs). They also have a darkpool trading platform which claims to offer zero (or even negative) trading fees and above average liquidity for spot and futures trading.
Check out our interview with Jack Tan, CEO of Wootrade!
Better trading (no strings attached)?-Wootrade
Background
While both automated market makers (AMMs) and decentralized exchanges (DEXs) belong to the decentralized finance (DeFi) sector, they are quite distinct from each other.
There is no limit order functionality for AMM providers such as Uniswap, whilest the trading role of DEXs is more complete and closer to that of a common cryptocurrency exchange. At present, AMMs are extremely popular. They draw more consumers and have rates of exchange that outweigh those of DEXs.
Wootrade collaborates with DEXs as they solve their liquidity challenges using Wootrade. Exchanges would find it easy to draw even more customers by providing more liquidity and delivering more full features. In DeFi cryptocurrencies, standard exchanges have smaller trading rates than Uniswap, and even losing customers, owing to the popularity of the DeFi sector.
Although supporting both centralized and decentralized exchanges to improve their AMM competition, Wootrade has already listed DeFi coins and intends to consistently list more.
Team
It is worth noting that Mark Pimentel, Wootrade’s Co-founder, worked at Citadel and Knight Capital (acquired by Virtu in 2017), respectively. Pimentel initially operated in the high-frequency trading department at Citadel, and then went to Knight Capital’s electronic marketing group in the United States. There, he was in charge of operating the substantial dark pool.
When Pimentel stepped into the crypto ecosystem, he came across a common problem between quantitative funds and exchanges i.e. the market liquidity is fragmented. He aimed to add his trading skills and familiarity with the dark pool to Wootrade. The inclusion of Wootrade’s token economy was intended to make this model more robust, fairer, and more efficient.
What is Wootrade?
Built by industry-leading proprietary trading company Kronos Research, Wootrade provides dramatically enhanced liquidity, spreads, and fees. Wootrade is regarded as the next evolution of crypto trading.
Wootrade features specialized market-making skills based on alpha through collaborations with the world’s top proprietary trading teams. A self-reinforcing and mutually-advantageous dynamic between traders, exchanges, market-makers, and investors all connected by the WOO token has been created by this innovative framework.
Mark Pimentel and Jack Tan, Founders of Kronos Research, had invented the Wootrade concept to address the big pain points for more challenging crypto traders. Kronos Research has evolved from a team of 2 to more than 60 persons now and trades over a billion dollars on a daily basis.
How does Wootrade achieve high liquidity and zero fees?
Wootrade claims to have above average liquidity and zero trading fees, but how do they achieve this?
Taking BTC as an example, at a depth of 100 BTC, Wootrade will sustain a spread of 0.2%. In addition, it does not charge any handling costs or operating costs to users. Kronos Research, a quantitative market research institution, has incubated Wootrade. The fact that Kronos excels in a number of trading techniques is popularly known.
In various market conditions, Kronos has a daily trading volume of more than $1 billion and can guarantee substantial returns. Although Wootrade implements zero-fee trading, retail-oriented exchanges do not generally compete with it. In fact, exchanges or DEXs, wallets, brokers, and trading institutions are mostly Wootrade customers.
Currently, over 10 exchanges and institutional customers are linked to the platform. In addition, through the exchanges that collaborate with Wootrade, a total of more than 65,000 end users have used their trading profile. New exchanges were queuing up for entry after releasing Wootrade 1.0, as market demand surpassed the expectations of the team.
Open governance on Wootrade
The aim is for the group to have more and more autonomy to grow the project as it sees fit. Voting power grows exponentially in relation to the amount of time involved, but anyone who buys tokens only to vote would not have any control over decisions.
Instead, those who have carried for the right length of time will be able to control with the greater weight the choices made. Additionally, the incentive scheme is aimed to enable those with the right combination of talent and expertise to engage more effectively in the governance and decision-making process.
The aim of Wootrade is to reach 40% of the cryptocurrency market’s liquidity. This includes a significant number of exchange customers and market makers to be on board. There is a big market for wealth management businesses on both exchange investors and AMMs on the platform.
Since it’s not easy to check and trust the trading staff, investors sometimes skip good opportunities. Wootrade can, therefore, be fitted with an oracle computer to solve this. This helps market makers to submit their NAVs and results to the blockchain. For its retail customers, exchanges may then verify and pick outstanding items.
WOO token ($WOO)
Wootrade has its own native token that will act as a value and rewards carrier generated by the system. The WOO token will be used to vote on governance decisions concerning the platform. WOO can also be used in staking/mining reward systems, retail users can stake WOO and ETH or USDT into an asset managment product and receive rewards.
For those who are interested in spot/futures trading, WOO can be used as collateral on the Wootrade platform.
Customers can also get a discount when using WOO to pay for say management fees for asset management items. For Wootrade’s clients or partners that do not have their native token, they can also choose to adopt WOO as their platform token. Thereby giving consumers another place to use WOO.
Prime Nodes on Wootrade
For B2B clients they are different tiers to stake the WOO tokens on the exchange or platform for eligibility to become a Prime node. In addition to the staking requirement, they also need to demonstrate a unique marketing plan and business proposition.
Wootrade Staking Program: Fee Structure
Once they become a Prime node, every dollar of flow they route to the network gives them a reward of a certain number of WOO tokens. The concept behind this is that after a while of doing this, they would not need to charge their users and fees and simply scale off the rebates provided by Wootrade.
Essentially, Wootrade’s rationale is that they do not think businesses would try and rely on market makers (which require a huge fee for their services). Especially when the alternative provided by Woodtrade is that they would get access to a zero fee trading network with proven liquidity, AND get paid to trade there.
WOO tokenomics
WOO tokenomics
Ticker: WOO
ICO Token Price: 1 WOO = 0.03 USD
Fundraising Goal: $650,000
Total Tokens: 3,000,000,000
WOO is available for spot trading on Uniswap, Huobi, MXC and Gate.io
Conclusion
Wootrade sees the potential for conventional and decentralized finance to incorporate concepts. The crypto industry will increasingly be affected by this new technology. The conventional business of asset management will now pay attention to the optimized use of blockchain technologies and token architecture.
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.
After our 2020 Roundup article where we reviewed this year’s biggest trends, letâs now dive deeper into what happened in the world of crypto exchanges.
The surge of Defi and its DEXs (decentralized exchanges) has collapsed CEXsâ (centralized exchanges) volumes drastically. If Uniswap is the clear King of DEXs, the same we can probably say for Binance among CEXs, where it leads on both rankings for spot and derivatives. But the fight against decentralized exchanges has just started and new ideas and concepts are needed to keep up with the competition.
As we shall see, the CEXs that managed to better keep up against Defi are the ones that tried and innovated the most, sometimes directly inspired by DEXs.
Table of Contents
Uniswap
Uniswap is the clear winner among all kinds of exchanges in 2020.
Uniswap TVL in 2020
Its TVL (total value locked) has literally skyrocketed in the second half of the year, reaching more than $3 billion in November before dropping when $UNI pools ended giving rewards to Liquidity Providers.
Uniswap has constantly been the most used Dex in crypto and has terribly helped Defiâs growth. It is âTheâ place where to find new listings and the deepest liquidity on Ethereum. If you are looking for an existing ERC-20 token, you can be sure it is there. Anyone can open a new pool, it is as simple as providing some tokens plus some Ethereum on the platform, and itâs done.
Uniswap doesnât have a order book: the platform relies on an AMM (Automatic Market Maker) system to provide for trading liquidity. Although purists may miss order books, AMM has proven to be a new and successful way to swap tokens.
In September, the platform distributed 150 million $UNI (their new governance token) to anyone who came in touch with the website, whether just swapping or pooling liquidity. A minimum of 400 tokens were sent to each user, for a value of around $1500 in the first hours of its existence (for patient holders, the value tripled in during the day).
This airdrop attracted so much attention to the platform that other protocols did or are planning to do the same thing in the next future. With Uniswap V3 and all of its innovations expected to be released pretty soon, some can only wonder where $UNI can go!
If any of you has been sleeping throughout the last months and still hasnât claimed his tokens, you can follow our video guide here!
How to claim free $UNI on Uniswap
Binance
Binance succeded at remaining the biggest Cex for volumes, with a daily ATH of $15 billion in spot trading and of $37 billion in futures (up by 34 billion compared to 2019!). It retains the first position on both rankings. (Ativan)
Part of their success is due to numerous initiatives that they introduced throughout 2020.
In April, Binance presented their Card (later on Binance also acquired Swipe, a multi-asset digital wallet and Visa debit card platform), which is now supported in more than 180 countries.
One of the most important innovation on the year is “Launchpool”, which lets users farm new tokens like in Defi. Stakers can accumulate rewards prior to a listing that will happen directly on Binance after a few weeks (usually). Moreover, Launchpool offers single-token staking so users donât even have to be wary of Impermanent Loss. Projects like Bella Protocol ($BEL), Flamingo ($FLN) and $WING have were presented via Launchpool.
September has been a great month for Binance. They firstly launched Binance Smart Chain, a blockchain created to run parallel to Binance Chain where devs can create Smart Contracts and Defi solutions. The exchange then immediately introduced âLiquid Swapâ, a new trading platform that allows users to reap the benefits of Defi, with the first AMM product in any CEX ever. Users can pool their funds on Liquid Swap earning trading fees like on a AMM DEX.
Simultaneously Binance Labs, the venture arm of the exchange, has continued investing in new projects to empower crypto. They helped, among others, 1inch, Dodo and Math.
On a side note, after the launch of Binance U.S. in 2019, the “.com” platform has now slowly been giving a 14 days notice to U.S. customers (both those who went through KYC and those who simply access the website from within the country) advising to withdraw funds before the account is blocked. It appears that customers who use VPNs are âsafeâ for the moment.
FTX
Ftx, the known derivatives exchange led by the omnipresent Sam Bankman–Fried, has surely been on the cutting edge among CEXs this year. The team worked very hard trying to anticipate trends and they seem really good at giving their customers what they have been hoping for.
“Why should we trade crypto and stocks on separate exchanges?” Thatâs probably what Sam asked himself at a certain point. So, no sooner said than done, the answer arised: tokenized stocks. Two partnerships with CM-Equity (Germany) and Digital Assets AG, DAAG (Switzerland), were decisive for the accomplishment. Although trading stocks on FTX looks similar to trading crypto, it is important to notice the difference.
âCM-Equity is fully regulated in Germany, and is a licensed financial institution permitted to offer these products. All FTX users who trade tokenized stocks may also have to become customers of CM-Equity, and pass through CM-Equity’s KYC and compliance. Furthermore, all trading activity may be monitored for compliance by CM-Equity. CM-Equity custodies the equities at a third party brokerage firm. CM-Equity (not FTX Trading LTD) provides the brokerage servicesâ.
Unlike in traditional markets, FTXâs Tokenized stocks will be tradable 24/7, and as of now they are more than 50, among which Netflix, Facebook, Apple and Amazon.
FTX.US (the american arm) also put themselves (and the legitimacy of cryptocurrency) in the public eye as one of the top donors of the Bidenâs Democratic Presidential Campaign. In particular, Sam donated $5,22M. While the real reasons remain probably unknown, we hope it will mark a step towards crypto recognition by authorities.
Last but not least, we canât forget to mention that the same team behind FTX is responsible for the creation of Project Serum, one of the most successful non-ETH order-book based Dex, running on the Solana chain (which handles around 50,000 tps).
Get the latest insider dig on the happenings of the crypto world with Sam Bankman-Fried (FTX, Alameda, Serum)
Sushiswap
Sushiswap launched in August as a fork of Uniswap with added rewards by the anonymous founder Chef Nomi. We were then at the peak of the âDefi bull summerâ and the success was sudden. Its TVL gained great traction but some drama was due to happen. A week after, the anonymous dev removed its liquidity and sold $14 million worth of $ETH, starting a 50%+ drop in price. At that point, an offer was made by Sam Bankman-Fried to step in and remove Chef Nomi from the project.
Highs and lows have followed since then, but Sushiswap is still the second DEX for TVL (around 33% less than Uniswap) and one of the most successful. Many are the partnerships and its advisors are among the best that crypto can offer. Even though some will neve forget that Sushiswap literally âstoleâ liquidity from Uniswap, migrating pools to their platform and thus reducing Uniswapâs TVL dramatically, many are ready to bet that this project is here to stay.
Mt.Gox
December the 15th was the due date for Mt.Gox exchange creditors to finally receive part of their loss funds after years. The exchange repeatedly lost cryptocurrencies between 2011 and 2014, when it filed for bankruptcy. 140,000 $BTC (almost $4 billion dollar worth as of now) have since then been found and should be sent to users as partial refunds.
As suspected by many, it looks like the deadline has not been respected and creditors are still waiting for their money. A few days ago, someone noted a transaction from a Mt.Gox wallet, something which led many believe that the distribution had actually started.
đ¨ 600 #BTC (13,818,232 USD) transferred from #MtGox Cold Wallet to unknown wallet
Unfortunately that was not the Mt.Gox rehabilitation plan wallet, but the F2Pool cold wallet. There has been no confirmation that the creditors had received any fund yet.
BTC Markets accidentally exposed their usersâ names and email addresses
BTC Markets, an australian crypto exchange, has mistakenly send out a compromised marketing round of emails. During a routine operation, instead of individually sending out email to their customers, personal data was exposed in the âtoâ field. The emails were sent in batches so that each user data had been potentially seen by 999 other people.
The mistake didnât directly compromise sensible info such as passwords so funds remained safe, but this type of error is something that can definitely worry crypto adopters and possibly make them change platform. Users donât want strangers to know they own crypto, and we hope that this kind of mistake won’t happen again.
Kraken, the first to win Bank Charter Approval in the U.S.
Kraken is the worldâs first Cryptocurrency Exchange to get approved as Special Purpose Depository Institution (SPDI) by the State of Wyoming. âKraken Financialâ, this the name, is the âfirst digital asset company in U.S. history to receive a bank charter recognized under federal and state law, and will be the first regulated, U.S. bank to provide comprehensive deposit-taking, custody and fiduciary services for digital assetsâ.
The exchange will enable its clients to bank seamlessly between digital assets and national currencies and will be regulated in similar manners to other U.S. banks. The SPDI is a âcustody bankâ but for digital assets (such as cryptocurrencies) and itâs required by law to always maintain 100% reserves of its FIAT deposits.
Huobi exchange
It all started with big $USDT (and other currencies) transactions spotted moving in and out of the exchange, the largest in China, on November the 2nd. At the same time, rumors of one of the Chairman being arrested increased the FUD which led to a sharp dump in price of $HT, the Huobi token, and to a rush in withdrawing $USD out of the platform. The exchange then denied all the allegations and the situation returned back to normal in the next days.
The dip is caused by some fresh China FUD. Apparently rumors swirling that some core members from Huobi are out of contact.
China FUD always happens, and we always bounce back.
We have extensively covered the Okex story in our developing article.
On October the 16th, all the withdrawals were suddenly halted on the platform and the suspension has lasted until November the 27th when all operations were reopened without restrictions. As confirmed later on, the original cause was one of the exchange’s private key holders cooperating with the authorities. He was therefore unable to complete the authorization processes needed to allow external transactions.
Star Xu, the person held in custody by the police, has been investigated for matters that have nothing to do with the exchange. Xu was allegedly assisting the authorities (he is now back to normal business activity) about funds he borrowed from a Shanxi-based underground bank in 2019.
Kucoin
Kucoin, one of the leading crypto exchanges based in Hong Kong, suffered a security breach on September the 26th. The total amount stolen, a whopping $281 million in $BTC,$BSV $LTC and other coins, is one of the largest in crypto history. The hacker (or hackers) was somehow able to take possession of the centralized exchangeâs hot wallets private keys, achieving the ability to move funds around. He then withdrew and started dumping them on DEXs. Kucoin immediately transferred the rest of the funds to new wallets and suspended all deposits and withdrawals.
It appears that Kucoin hot walletsâ private keys hadnât been changed for over 3 years at the moment of the breach, which is another confirmation that the famous saying ânot your keys, not your crypto!â is an evergreen.
We must hope that all these attacks will be helpful in the long run, enabling stricter security procedures by exchanges and platforms, necessary if crypto final goal is mainstream adoption!
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.
Public Mint seeks to solve transaction complexity by bridging the blockchain and the financial world of fiat. According to Public Mint adoption has always been the concern of the cryptocurrency community. And while tokens are becoming increasingly popular, the number of new entrants in the space today is still not enough to spur massive acceptance of crypto-assets in retail stores.
Background
Public Mint was launched in March 2020, following two years of research and development. It was created to make banks capable of holding funds that could later be tokenized on the blockchain. Today, it has been mainly implemented to ease the experience of using fiat currencies in performing blockchain-based transactions.
Ever since the launch of the platform, it has already partnered with more than 200 banks that hold the fiat used to collateralize its tokens. Some of its prominent supporters are IBM Digital Asset Labs and Hyperledger.
What is Public Mint?
Public Mint is a decentralized, payment platform that aims to bridge the blockchain and fiat currencies. It offers tokenized fiat which is fully-collateralized and regulatory compliant. To secure the funds held in the platformâs accounts, they are also insured with the FDIC.
Public Mint can be used to open blockchain-based fiat accounts to conduct money transfers worldwide without the need for any third-party facilitator. And because the platform was designed to be decentralized, it will not have control over the ownership and management of its user funds.
The acceptance of payments via credit card, ACH, or wire transfer, are all made possible with the Public Mint platform as well. This makes it easier for anyone to perform transactions on the blockchain without having to exchange their fiat to crypto.
Public Mintâs Open platform is designed to support these functions and make it easy for anyone to tokenize any fiat in the network. Tokenizing through the platform simply means that you will be able to make a token counterpart of your local currency on the blockchain.
Features of Public Mint
Fiat-Native Blockchain
The platform supports the use of fiat in asset transfers and payments for network fees. Thanks to this feature, users do not need to purchase another digital asset just to be able to initiate transactions on the network.
Simplified Key Storage
It is easy for any user to store their private keys. The platform furnishes users with their own keys, which they can store in any cloud provider. Through this, the user has full control over his own funds without dealing with centralization problems like censorship.
Direct Fiat Access
Public Mint has a bank-to-chain feature that allows users to directly fund their wallets from various sources. At the same time, it also has a chain-to-bank feature that lets users directly withdraw their funds to their bank just using their wallet.
The platform also supports USDC, making it easier for any crypto user to interact with other blockchain platforms.
Pay others from your public mint wallet
Multi-custodial
There are multiple custodians on the platform. They are composed of banks and other regulated financial institutions. Their purpose is to hold funds while the multi-custodial structure of the network ensures that there will be no single point of failure in the system.
Public Mint supports several major payment merchants
Instant Transaction Settlement
Transactions made on Public Mint can be settled in as fast as 3-5 seconds because the network offers finality with just one confirmation.
Ethereum-Compatible
The network is compatible with Ethereum, which means that any developer can build on the platform and improve it. It can also support decentralized applications that are established on the Ethereum network.
What is the difference between Public Mintâs tokenized fiat and stablecoins?
Stablecoins like Tether (USDT), USD Coin (USDC), TrueUSD (TUSD), were only designed to support one fiat: the US Dollar. And to purchase them, there are times that you have to first buy another cryptocurrency trading pair. According to the team behind Public Mint, this process can be too complex for a newcomer and it also exposes them to the volatility of other digital assets.
Public Mint has its own fiat-dedicated network. The platform supports a comprehensive ecosystem that is designed to support the direct use of fiat currencies to make blockchain-based payments. And unlike the usual stablecoin, Public Mint is designed to support the use of multiple fiat currencies on the platform
Conclusion
Public Mint is a strong competitor among stablecoin platforms. However, its strength lies in its ability to facilitate easy and real-time transactions. If its partnerships with banks prosper, it can support a global payment ecosystem that will not fully rely on a blockchain. This addresses the problem most stablecoins users face in terms of transaction time and costs.
Moreover, it can be a less volatile medium of exchange since it is collateralized by fiat and not by other digital assets. If ever the platform gets hacked and its funds are stolen, users are secured by its FDIC-insurance. Looking at where Public Mint is today, its potential to be the go-to alternative from stablecoins is high.
Disclaimer: Cryptocurrency trading involves significant risks and may result in the loss of your capital. You should carefully consider whether trading cryptocurrencies is right for you in light of your financial condition and ability to bear financial risks. Cryptocurrency prices are highly volatile and can fluctuate widely in a short period of time. As such, trading cryptocurrencies may not be suitable for everyone. Additionally, storing cryptocurrencies on a centralized exchange carries inherent risks, including the potential for loss due to hacking, exchange collapse, or other security breaches. We strongly advise that you seek independent professional advice before engaging in any cryptocurrency trading activities and carefully consider the security measures in place when choosing or storing your cryptocurrencies on a cryptocurrency exchange.
Cryptocurrency exchanges have been the central trading platform in the crypto space. Traders worldwide have made substantial returns on their investment just from pressing a couple of buttons. This has attracted many others to join in hopes of profiting from trading crypto.
However, one of the key factors in successful trading is finding the right crypto exchange. With hundreds of crypto exchanges available, everyone is constantly asking “which crypto exchange is the best?” Traders want to make the most of their investments, whether it be low trading fees or lucrative services. In this article, we will be comparing two of the top crypto exchanges in the world: Binance and Coinbase.
Binance is the world’s most popular crypto exchange by a large margin. It is rank one in organic trading volume per day ($14 billion at the time of writing) and in website and app user session (87 million visits).
Binance was founded in 2017 by Chengpeng Zhao (CZ), former Chief Technology Officer of OKCoin who had years of experience developing high-frequency trading softwares.
Binance’s Milestones
For the longest time, the cryptocurrency industry is dominated by Binance. The exchange is held in high regard for being proactive and astute in their planning and actions, not only for themselves but also for advancing the crypto space as a whole.
Founded in 2012, Coinbase is one of the earliest crypto exchanges in the world. Unlike other exchanges, Coinbase is based in the U.S. and subject to its regulations. As such, it is the largest cryptocurrency exchange in the U.S. by trading volume.
Key Features of Coinbase
Coinbase is split into several categories catering for different types of users. Coinbase itself is for retail investors, and only offers spot trading, unlike other exchanges which offer other products such as derivatives or futures trading.
Coinbase Pro is for individual professional traders, and Coinbase Prime is for larger institutional clients. Both platforms provide charting tools, real-time order books, among other tools to help advanced traders make the most of the exchange. Moreover, they also have cheaper transaction fees and more supported cryptocurrencies compared to Coinbase.
Nevertheless, Coinbase remains one of the top crypto exchanges in the world and will continue to be in the future. In fact, like Binance, Coinbase is also proactive, and has demonstrated time and time again the ability to turn unfavorable situations around.
In this section, we will take a closer look at what Binance and Coinbase have to offer and compare them based on these features:
Cryptocurrency and Products
Binance is the winner in terms of the number of cryptocurrencies supported. It has more than 600 coins and tokens compared to Coinbase which has over 100. This is because Binance’s spot market includes many different crypto categories such as GameFi, DeFi protocols, and even meme coins. On the other hand, Coinbase largely focuses on low-risk cryptos with a high market cap such as Bitcoin and Ethereum.
Moreover, Binance offers a wide array of trading tools such as leveraged trading, options trading and lending platform, whereas those features are only available on Coinbase Pro and Coinbase Prime.
Fees
The difference in fees between Binance and Coinbase is quite significant. Overall, Binance charges much less for trading crypto as well as funding your account. At the lowest-tiered account, Binance only charges 0.1% for their maker and taker fee. Its rate go as low as 0.02% at the highest-tiered account, which saves a lot of money for active traders.
Fortunately, we have a comprehensive guide that would allow you to avoid withdrawal fees. Click here to learn more.
On another note, since Coinbase is subject to U.S. regulations, users in the U.S. have to pay capital gains tax on profits made and staking rewards. Users are responsible for reporting all profits made as income on tax forms, even if it is just $1. According to Coinbase, if users earn $600 or more through the exchange, Coinbase is required to report those payments to the Internal Revenue Service (IRS).
Depending on the users’ location, Binance users do not have to pay taxes on their crypto gains. However, Binance.US also complies with U.S. tax laws, which means U.S. users also have to pay capital gains tax. Click here if you want to learn more about crypto tax-free countries.
Security
Both Binance and Coinbase have the highest cybersecurity score (AAA) audited by CER, the leading cybersecurity ranking and certification platform.
Both exchanges require Know Your Customer checks (KYC) in order to open an account, and provide two-factor authentication via SMS or the Google Authenticator app. They also store account funds in cold storage and crypto vaults off the Internet so that they cannot be hacked.
Though both have similar security protocols, Binance focuses more on access restriction, whereas Coinbase implements biometric access (i.e. fingerprints) for logins. Binance offers address whitelisting and device management to review and secure address books and devices, blocking other entries that users do not recognize. On the other hand, Coinbase has biometric fingerprint logins as well as AES-256 encryption and multi-signature security for digital wallets. This is because Coinbase has its own digital wallet, whereas Binance does not. But Binance partners with Trust Wallet, one of the most secure digital wallets with over 25 million users.
The main difference between both exchanges is that Coinbase is one of the only exchanges that offers FDIC insurance on USD deposits, insuring up to $250,000 of deposited USD funds which is similar to traditional banks. This also applies to Binance.US but not Binance. User funds on Binance are protected by reserves they have in their treasuries.
Conclusion
Although Binance and Coinbase are two of the top crypto exchanges in the world, they offer very different user experiences. With new features being added on a regular basis, Binance offers more than almost any exchange on the market as well lower fees.
On the other hand, Coinbase is a more reputable exchange on an institutional level. It was the first crypto exchange to be listed on the NASDAQ stock market with its market value reaching more than $100 million. This is an impressive milestone in propelling the crypto industry as whole as it signifies the recognition of cryptocurrency as tradeable securities in the global market.
Although its fees are high and offer less products compared to Binance and other exchanges, Coinbase has a slight edge in security compared to other exchanges as it is subject to U.S. regulations. It is also one of the few crypto exchanges that has its own self-custody crypto wallet.
But the bottom line is if you are looking for a wide variety of crypto products, Binance is the pick. Coinbase is better suited for beginners due to its spot market offering more secure long-term investments.
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. (https://wbctx.com) 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.
Plus500 is a CFD brokerage that allows users to bet on the prices of cryptocurrencies without actually purchasing them. Discover the features of Plus500 and make an informed decision about your online trading.
Plus500 is a CFD brokerage, meaning that users cannot actually purchase cryptocurrencies on this platform. Instead, users can bet on the prices of cryptocurrencies, and make a profit or loss depending on the outcome. What’s more, Plus500 reviews show that this platform is a great way to make money without actually buying cryptocurrencies, and is a great option for those who want to make money from the cryptocurrency market without actually owning any.
It is a great option for those who want to make money from the cryptocurrency market without actually owning any.
Key Features and Advantages of Plus500
Supports the Main Cryptocurrencies
Plus500 offers CFD trading on 12 different cryptocurrencies. These cryptocurrencies are the following:
Bitcoin
Ethereum
Litecoin
Neo
Ripple
IOTA
Stellar
EOS
Bitcoin Cash ABC
Cardano
Tron
Monero
Plus500 offers a wide range of cryptocurrencies for trading, including the most popular ones such as Bitcoin, Ethereum, Ripple, as well as some lesser-known coins like IOTA, EOS, and Stellar.
Good for People Who Just Want to Trade Crypto CFDs
Plus500 is a CFD trading broker, which means that traders do not need to buy any asset to speculate on prices. What’s more, this can be beneficial for those who want to keep things simple and then are not interested in owning the assets themselves. Furthermore, CFD trading can result in either full profit or a loss, with no assets to the trader’s name at the end of the day.
Itâs reviews from crypto enthusiasts often highlight the benefits of owning cryptocurrency, but the process of setting up a wallet, ensuring security, and storing codes can be time-consuming. Fortunately, Plus500 offers an alternative solution – CFDs and margin trading – which allows users to stay up-to-date with the crypto world without the hassle of managing their coins.
A Demo Account to âTest the Watersâ
Plus500 reviews are a great way to get started with cryptocurrency trading. They provide users with the opportunity to create a demo account and learn the basics of the process. Plus500’s demo account allows users to get familiar with the trading interface and terminology, so they can start trading with confidence.
A demo account is a great way to test the waters of cryptocurrency CFD trading in a safe and risk-free environment. Plus500 offers users the opportunity to try out CFD trading on demo accounts. It makes it a great choice for those looking to get into this potentially volatile activity.
Key Disadvantages of Plus500
CFD Trading – You Donât Actually Receive any Cryptocurrency
Some people prefer to trade cryptocurrencies using CFD trading, especially in the short term, as it allows them to bet on a price prediction of a certain asset without actually receiving any cryptocurrency. However, there are also those who disagree with this approach.
If you’re a passionate cryptocurrency enthusiast, the idea of trading crypto coins without actually owning them may not be particularly appealing. In that case, Plus500 may not be the best choice for your cryptocurrency trading needs.
CFD platforms are ideal for short-term trading, or “flipping” an asset for profit. However, long-term trading or hodling is not possible on these sites, as you do not own the asset. While it is possible to do long-term trading on a CFD platform, the risk is always substantial.
Lack of Cryptocurrency Variety
Plus500 offers a limited selection of 12 cryptocurrencies for CFD-trading, including the most popular and common coins. Furthermore, this selection is ideal for most users, as it is not overwhelming and provides access to the most sought-after cryptos.
For traditional cryptocurrency enthusiasts, the limited variety of coins available on the platform may be a surprise. However, there are still a wide range of coins and tokens available, including those based on the Ethereum blockchain.
If you’re looking to invest in a niche cryptocurrency, you may be limited to the 12 options currently available. What’s more, unless something unexpected happens in the market, it’s unlikely that you’ll be able to find a new, profitable cryptocurrency to invest in.
Plus500 Fees
Plus500 offers a straightforward fee structure, with a market spread ranging from 0.02% to 2%, depending on certain variables. However, this makes it a great choice for traders looking for competitive fees and a reliable trading platform.
Plus500’s fees are competitive when compared to other crypto-exclusive platforms, with fees ranging from 0.02% to 2%.
How to Register and Verify Account on Plus500?
Register your Account on Plus500:
Start trading with Plus500 by visiting their website and clicking “Start Trading”.
You can either create a real money account or opt for a demo account to get a feel for the game before you start playing for real.
Create an account by entering your email address and creating a secure password.
Once you have followed the steps above, you will be directed to the dashboard of the platform. You are now ready to start trading cryptocurrencies – simply navigate to the cryptocurrency tab and begin!
Verify your Account on Plus500:
To purchase any of the cryptocurrencies listed, click the âBuyâ button and you will be directed to the verification page.
Fill out your personal information including your name, surname and date of birth in the form provided.
Once you do that, you’ll be asked to select your country of residence and tick the boxes that apply to you.
Verification of your residential address is a necessary step when using a stock trading platform. Enter your address now to complete the process.
Plus500 is looking for information about your knowledge and experience with CFD trading, your employment status, income, and more. This information is necessary to verify that you are eligible to trade on the Plus500 platform.
Once you have completed the verification process, your profile will be submitted for review. After this, you can make a deposit and start trading CFDs!
Based on the user reviews of Plus500 found online, the registration and verification processes appear to be quick and easy.
Conclusion
Plus500 is certainly worth considering for those looking to trade cryptocurrencies. However, there are many other platforms that offer better features and services.
It is a great choice for those interested in CFD trading, as it offers a wide range of cryptocurrency options. With Plus500, you can make predictions on the price of cryptocurrencies without actually owning them.
If you’re looking for a reliable cryptocurrency trading platform, there are many great options to choose from. Kucoin, Binance, Kraken, and more are all excellent choices for trading digital currencies. Make sure to do your research and find the platform that best suits your needs.
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.
China’s national digital currency DCEP (Digital Currency Electronic Payment, DC/EP) will be built with Blockchain and Cryptographic technology. This revolutionary cryptocurrency could become the world’s first Central Bank Digital Currency (CBDC) as it is issued by the state bank People’s Bank of China (PBoC). The goal and objectives of the currency are to increase the circulation of the RMB and its international reach – with eventual hopes that the RMB will a global currency like the US Dollar. China has recently established an initiative to push forward Blockchain adoption, with the goal of beating competitors like Facebook Libra – a currency that Facebook CEO Mark Zuckerberg claims will become the next big FinTech innovation. China has made explicit that Facebook Libra poses a threat to the sovereignty of China, insisting that digital currencies should only be issued by governments and central banks. DCEP is not listed on cryptocurrency exchanges and will not be for speculation of value.
The significance of DCEP is that it’s designed as a replacement for the Reserve Money (M0) system, cutting back the cost and friction of bank transfers. It is suggested that DCEP will alleviate the risks of offline paper money transactions such as anonymous counterfeiting, money laundering and illegal financing. This is because regulators can better monitor digital currency transactions, which some consider will greatly improve financial and monetary supervision. DCEP can also reduce the costs involved in maintaining and recycling banknotes and coins.
Basically, DCEP is poised to become a digital version of the RMB.
Furthermore, the issuance of DCEP is conducive to promoting the internationalization of the RMB and reshaping the current cross-border payment system. This is because prior to the RMB Cross-Border Inter-Bank Payments System (CIPS) going live in early October 2015, RMB cross-border clearing and settlement was mainly done through CHIPS (Clearing House Interbank Payments System) or SWIFT (Society for Worldwide Interbank Financial Telecommunication). However, some consider that both the CHIPS and SWIFT systems have fatal flaws. Firstly, CHIPS is a US company. Whilst SWIFT, in particular, is seen as a cause for concern to the Chinese because due to its foothold in the international banking system, it is almost essential to use SWIFT for inter-bank transfers across countries. Thus whoever controls SWIFT’s data center will have access to information on almost every cross-border remittance, which some in China posit is the US. This is because whilst SWIFT claims to be a neutral international organization, 12 of the 25 directors are either from the US and her allies. Also, its transactional data were found to have been supplied to the US. Hence it is thought that China is being held back by the US via the SWIFT system, and so, in internationalizing the RMB- China requires its own worldwide banking system- i.e. DCEP.
Hence the Chinese consider that it is a requirement to form a new currency clearing network.
According to Chinese media, DCEP is seen as the “3rd Wave” aimed at the US.
A mandate to adopt Blockchain
China has established a countrywide initiative to push forward Blockchain Adoption. President Xi Jinping has mandated that the ‘countryâs development of blockchain technology should be sped up ‘ on Oct 24th in front of the Political Bureau. This speech has also been echoed by Li Wei, head of the People’s Bank of China. In April of 2020, China launched the Blockchain Service Network to unify all the Blockchain related projects in the Nation.
China has adopted the “Blockchain, not Cryptocurrency”, whereby the benefits of Blockchain is highlighted. On the other hand, cryptocurrencies that are native to Blockchain are suppressed as Cryptocurrency Exchanges and ICOs are banned in the country.
History and development of DCEP
Development of DCEP started in 2014 with the establishment of a research institute dedicated to digital currencies and looking at how to improve the Chinese Yuan system with blockchain technology. However during 2014 to 2018, the development process slowed down, probably because the decentralised nature of Bitcoin or blockchain is incompatible with the nature of the Renminbi as a legal national currency. Things rapidly picked up towards the end of 2019 however and this was directly attributable to Facebook preparing to launch Libra, particularly as partner members of the Libra Association and the currencies which Libra was to be backed by had consciously rejected China. Hence, feeling the heat of the competition, Chinaâs central bank felt immense pressure to urgently speed up in the global competition towards a digital currency.
Former Vice-chair of the PBoC’s National Council for Social Security Fund announced on 22nd June 2020 that China had already completed the backend infrastructure of DCEP.
Uses for DCEP
DCEP will be the only legal digital currency in China
DCEP is a currency created and sanctioned by the Chinese Government. It is not a 3rd party stable coin such as Tether’s cryptocurrency token “CNHT” which is also pegged to the RMB in a 1:1 ratio. DCEP is the only legal digital currency in China (cryptocurrencies such as Bitcoin are not legal tender in China).
Huang Qifan (Chairman of the China International Economic Exchange Center) said they have been working on DCEP for five to six years now and is fully confident it can be introduced as the country’s financial system. It’s currently being rolled out, with the People’s Bank of China issuing the currency. According to a speech by Huang at the China Finance 40 Forum, “DCEP can achieve real-time collection of data related to money creation, bookkeeping, etc, providing useful reference for the provision of money and the implementation of monetary policies.”
DCEP is not for speculation
China has made it explicitly clear that its National Digital Currency is not for speculation. Mu Changchun, Head of the People’s Bank of China digital currency institute made it as “a digital form of the yuan” and that “The currency is not for speculation. It is different to Bitcoin or stable tokens”. This is to the disappointment of the online community in China, where some netizens commented “So there will be no fun in it” on Sina.com.
It is also not possible to mine DCEP or stake on the DCEP network.
Cross-border payments with m-CBDC Bridge
China has joined forces to explore cross-border payments for digital currencies alongside Hong Kong, Thailand, the United Arab Emirates (UAE), and the Bank of International Settlements (BIS).
According to a joint statement in February 2021, the Peopleâs Bank of China and the UAEâs central bank are taking part in the Multiple Central Bank Digital Currency (m-CBDC) Bridge project initiated by the Hong Kong Monetary Authority and Bank of Thailand in 2019.
The m-CBDC Bridge project will explore the capabilities of distributed ledger technology, through the development of a proof-of-concept prototype. The project ultimately aims to facilitate cross-border, multi-currency, real-time transactions around the clock.
This move aligns with Chinaâs long-term ambition to use DCEP to boost the use of RMB in international payments. While the project is currently an alliance between just Beijing, Hong Kong, Bangkok, and Abu Dhabi, it is strongly supported by the BIS, an organisation owned by 63 central banks.
The announcement also comes mere weeks after Chinaâs joint venture with SWIFT, the dominant network facilitating international payments between banks. The new entity, Finance Gateway Information Service, was registered in Beijing on January 16 with âŹ10 million (US$12 million) as incorporation capital, according to the National Enterprise Credit Information Publicity System, the Chinese governmentâs enterprise credit information agency.
Special features of DCEP
DCEP is a Centralized Currency
DCEP is a digital currency that is run on a centralized private network – the Central Bank of China has complete access and control of the currency. This is a huge contrast to Bitcoin, which has an open decentralized network where there is no centralized leader. In the case with DCEP, the Central bank of China has the ability to create or destroy DCEP.
NFC Contact based payment
According to Official Sina Blockchain, DCEP will have NFC based payment options that don’t require devices to be online during the transfer. This will be poised as a direct replacement of paper money, as DCEP will be usable in areas without internet coverage. In addition, DCEP doesn’t require the mobile device to be bound to a bank account – meaning the unbanked population will also have access to the digital currency.
With DCEP’s tap payment feature people can transfer money simply by tapping two phones together, without the use of the Internet. So DCEP is not exactly like blockchain either, rather it is their own variant.
China Construction Bank launches DCEP wallet
On 29th August 2020, China Construction Bank (CCB) had a soft launch of the DCEP wallet. Users of one of China’s big four state-owned commercial banks found a DCEP wallet feature was available inside their mobile app. Users were even able to navigate to the digital yuan wallet and activate it through registering their mobile phone numbers.
Finally, users can send/receive digital currency to others by inputting their unique wallet ID or the phone number associated with the bank account.
CCB DCEP wallet
However, CCB has disabled the DCEP wallet feature from public access, but not before it gained huge attention. Users searching for this wallet now will only get an error message saying that the function is not yet officially available to the public.
Tencent to be a major partner of DCEP
Tencent’s Meituan Dianping has been in talks with the research wing of the PBoC on real-world uses for DCEP. Meituan Dianping boasts billions of dollars in daily transactions on their mobile app platform offering services such as food delivery (similar to UberEats), B&B bookings (similar to AirBnb), ride hailing services, bike sharing, grocery shopping and more. Basically for those in China, all your daily necessities can be met on the Meituan ecosystem.
The PBoC’s research wing is also in talks with another Tencent-backed company, Bilibili Inc. which provides video streaming services. So whilst the specifics of the partnership are yet to be finalised, it is likely that such cooperation is going to be huge for the mass use of DCEP in China.
According to Caijing magazine, the pilot institutions for DCEP will be the 4 major state-owned banks i.e. China Construction Bank, the Agricultural Bank of China, Bank of China and the Industrial and Commercial Bank of China. This initial deployment will serve as an official production test for the currency system, where the network and security will be validated. In the second phase, DCEP will be distributed to large fintech companies such as Tencent and Alibaba to be used in WeChat Pay and AliPay respectively.
DCEP will operate on a two-tiered system
The issuance and distribution of DCEP will be based on a two-tiered system.
The first tier would be transactions between the PBoC and intermediaries. These intermediaries would be financial institutions (e.g. the 4 major state-owned banks i.e. China Construction Bank, the Agricultural Bank of China, Bank of China and the Industrial and Commercial Bank of China) and non-financial institutions such as Alibaba, Tencent and UnionPay. Here, the PBoC would issue DCEP to the intermediaries.
The second tier would be between the above-mentioned intermediaries and participants in the retail market such as companies (e.g. retail stores) and individuals. In this tier, the intermediaries that have received DCEP will distribute it to retail participants so that it would circulate through the market e.g. through people purchasing items at stores etc.
The main difference in the issuance and distribution of DCEP compared to traditional cash however is the fact that DCEP would be transferred through electronic wallets, rather than bank accounts.
The central government has mandated that all merchants who accepted digital payments (such as Apple Pay, AliPay and WeChat) pay must accept DCEP. This will give DCEP a large nationwide acceptance in China, with every merchant obligated to participate or face a potential loss of their business license. This will make DCEP the most accepted digital currency in the world.
DCEP red packets to be launched for Chinese New Year
China’s DCEP app has launched a red packet gifting feature in time for the Chinese New Year on 22nd January 2023. The app will allow users to send the red packets i.e. “hongbao” containing DCEP to others. This is based on the Chinese New Year tradition of gifting lucky money during the annual festival. In fact, WeChat Pay and Alipay already have this feature for gifting CNY. However, it is the first time that e-CNY will be gifted in such a way, with hopes that this will further pave the way for the mass adoption of DCEP.
DCEP can be used to pay expressway tolls
On 28th December 2022, Chongqing Expressway Group announced it has completed the installation of equipment to accept DCEP for expressway tolls. From 30th December 2022, DCEP can be accepted as payment for tolls on the Chongqing Expressway. Users will need to download the e-CNY app and then simply present the payment QR code at the toll booth.
PBoC’s financial statistics reports now include DCEP/e-CNY
On 10th January 2023, the PBoC released its annual Financial Statistics Report for 2022. What is worth noting is that for the first time, the PBoC included statistics on DCEP/e-CNY. The Report states that as of the end of December 2022, the amount of digital currency in circulation was 13.61 billion yuan. This equates to around 0.13% of the total balance of yuan (13.61 trillion yuan) in circulation at the end of 2022.
Are people in China using DCEP?
According to a report on 28th December 2022, there has been over US$14 billion worth of DCEP transactions since its launch in 2020. Meanwhile, 261 million users have already set up an e-CNY wallet. However, this is considered low adoption since around 903.6 million people use mobile payments in China, according to a 2021 UnionPay report.
DCEP scams
Mere hours after DCEP has been announced, various (potentially scam) Chinese exchanges have listed IOUs or knock-offs clones of DCEP. It’s important to know that DCEP is currently only distributed to banks working with the PBoC and will not be available for the public. If you want to find out what are reputable exchanges, check out our top cryptocurrency exchanges guide. It is strongly recommended NOT to trade DCEP until it is officially released as there is no guarantee exchanges have access to the digital currency.
Knock-off clones of DCEP are already trading in (potentially) scam exchanges.
How to buy DCEP?
Currently, DCEP is only available to other banks working with the People’s Bank of China. This will eventually open up to the general public in 2020. There are currently no cryptocurrency exchanges that trade DCEP.
Implications of DCEP?
Is DCEP a challenge to the US monetary system?
The overwhelming view appears to be yes, both from the Chinese and the US perspective. According to statistics from the World Bank, 1.7 billion adults around the world use cash because they don’t have bank accounts. However, two-thirds of this population own a mobile phone, which can be used to make monetary transactions. This is what’s been happening in China, where mobile payments such as Alipay or WeChat Pay have more than 1.7 billion customers across China. Currently, the two online payment companies handle more payments monthly than Paypal did in the whole of 2017 (i.e. USD $451 billion). It’s very common in China to see street vendors accepting Alipay or WeChat pay.
Alipay and WeChat being accepted at an ATV rental shop
With the mobile wallet payment infrastructure in place, their cooperation with the PBoC could be the answer to distributing DCEP overseas. This would fit China’s “Belt and Road Initiative”, the aim of which is to build a new trade route connecting Asia with Europe and Africa. The idea is that with DCEP being used by mobile wallets, populations along the Belt and Road can be connected, bypassing existing financial infrastructures completely and giving an opportunity for the unbanked to pay for online purchases and build their savings.
In the US, the government does not see a demand for digital currencies. In a letter from the Chairman of the Federal Reserve, Jerome Powell, he took the view that many of the challenges a digital currency intends to solve do not apply to the US. In his view, the US payments landscape is already highly competitive and innovative, with plenty of digital payments options for consumers. Powell also commented, echoing the sentiments of those US lawmakers opposing Libra, that a digital payment where you would know and be able to track each and every payment would be unattractive for the US.
Whilst the House Committee on Financial Services also sees Libra as potentially raising national security concerns, observers consider the challenge from China is not being taken seriously. Because on the other hand, China is worried that Libra will reinforce the dominance of the US Dollar and is therefore working on fast-tracking the launch of DCEP. And it is likely that China will outrun the threat from Libra.
From a wider perspective, some take the view that DCEP can be used as a weapon against the US in an economic war. This is because as DCEP becomes accepted across the Belt and Road, China will have the power of total surveillance and control over the economic activity of potentially half the world’s population. DCEP will allow China to track everyone’s spending and transactions, and can seize or lock customers’ digital assets in their mobile wallets. We’ve already seen this in China, where together with its “social credit system”, millions of individuals have already been barred from purchasing airline tickets using their mobile wallets.
Appearance on Chinese television debate show “Tiger Talk”
On 29th August 2020, I appeared on China’s Phoenix Television show “Tiger Talk” (ä¸čä¸ĺ¸čŤ). Tiger Talk is one of Phoenix TV’s longest-running shows, each week they feature a debate on a major societal issue or event, and would invite experts, academics and guests to participate in the discussion. I was invited by Phoenix Television as an overseas analyst to discuss the topic of the week, namely, “DC/EP: China’s release of digital currency, will it shake the US Dollar’s hegemony?”. You can watch the episode here.
Guest appearance on Tiger Talk
Implications of DCEP on Bitcoin and cryptocurrencies
In the first instance, it should always be borne in mind that DCEP and Bitcoin/cryptocurrencies are vastly different. Key differences are that DCEP does not necessarily use blockchain technology and that it is a centralised currency under the control of a centralised authority. Learn more about the differences between DCEP, Libra, Bitcoin and Cash.
However, the large scale promotion of DCEP on national television in August 2020 is certainly bracing and preparing Chinese citizens for a digital version of the RMB. The gradual rollout of DCEP will also get the average citizen accustomed to the actual usage of digital currencies.
As a result, many people are excitedly speculating on the possibility of a bridge between DCEP and various existing blockchain projects- with some projects proclaiming they will be the first project to launch on DCEP. However it must be borne in mind that we do not know the full technical details of DCEP, so we do not know how this bridge between blockchain and DCEP will work, if at all. Also, the fact is that China is currently very hostile towards cryptocurrencies, this is mostly due to a number of cryptocurrency scams- such as Plus Token. As a result, the Chinese government have closed several bank accounts found to be involved in cryptocurrency transfers and banned all ICOs, several major cryptocurrency exchanges such as Binance and OKEx and some Over the Counter desks. Hence a lot of cryptocurrency circles and discussions occur underground, such as in private WeChat groups.
In a confusing twist, however, the CCP’s official media outlets ĺčćśćŻ, Xinhua and CCTV have been pushing out headlines that crypto assets are the best-performing asset year to date. Dovey Wan, Founding Partner of Primitive Ventures has observed that the real intent behind this media push is difficult to interpret, but so far the Chinese cryptocurrency community see this as a signal that crypto has reached its top. Meanwhile, on the Western front on Twitter, people have been seeing this as a bull signal. Currently, without any further moves or news in China about DCEP or on the cryptocurrency front, we can only wait and see what China’s next move will be.
Hmm this is an interesting propaganda vibe from CCPâs official media outlets as âĺčćśćŻâ, Xinhua and CCTV2
the headline âcryptoasset is the best performing asset YTDâ was featured on all avenues, news paper, online media and TV
Will DeFi push governments to finally adopt CBDCs?
Decentralised Finance (DeFi) can be considered the cryptocurrency and blockchain star of 2020, having revived the cryptocurrency market and bringing some much-needed revival and positivity. But what is DeFi? In short, DeFi attempts to bring traditional banking to developing industries, but with a twist: it would be open-source, decentralised, cheap and will cut out the middlemen. (Xanax)
So what can central banks and government do to maintain their dominant status quo whilst benefitting from the technology that DeFi can bring? An answer could be to create a CBDC. In a Forbes article, the author suggests that CBDC would be a positive move for governments since it tokenises money whilst allowing users to enjoy the advantages of cheaper, faster transactions.
The article also touches upon our coverage of DCEP and discusses China’s progress in testing DCEP contrasted with the progress of introducing a CBDC in the US. It suggests that governments and institutions, however, will need to be quick to catch up as new DeFi solutions in payments, mortgage, insurance etc. are being created weekly, and this legion of fintech innovators are growing. These innovators challenge the status quo, and with the mounting advantages of DeFi, there may soon be a real contender vying for the attention of citizen-consumers.
FAQs
Is DCEP backed by Gold?
The simple answer is u0022Nou0022. On a recent episode of Kitco News, journalist Max Kaiser claimed that China will launch a gold-backed cryptocurrency, with the intention of destroying the USD as a reserve currency. He added that China has already amassed as much as 20,000 tons of gold. However this is mere speculation – China has no plans to return to the Gold Standard nor issue gold-backed cryptocurrencies.
Will DCEP be interoperable with other Cryptocurrencies
There are many plans to build gateways that allow the swapping of DCEP to other cryptocurrencies. Projects such as Algorand have stated they want to support DCEP and build possible bridges to swap these currencies. However, as the technical details of DCEP have not been fully revealed, such bridges have not been built yet.
Who can issue e-CNY?
There are 7 Chinese commercial banks that can provide e-CNY. They are: ICBC, Agricultural Bank of China, Postal Savings Bank of China China Construction Bank, Bank of China, Bank of Communications, and China Merchant’s Bank. There are also 2 online banks that can provide e-CNY i.e. WeBank (WeChat Pay) and MyBank (Alipay).
Which Chinese Cities can sign up and use the e-CNY app?
Currently, there are 12 cities and areas in China which can sign up and use the e-CNY app. They are Shenzhen, Suzhou, Beijing Xiong’an, Chengdu, Shanghai, Hainan, Xi’an, Changsha, Dalian, Qingdao, and Zhangjiakou.
Can tourists or non- Chinese locals use DCEP?
No, DCEP is not fully rolled out yet and is only available in select cities in China.
Is China using DCEP?
According to a report on 28th December 2022, there have been over US$14 billion in transactions since the launch of DCEP in 2020 and October 2022. Meanwhile, 261 million users have already set up an e-CNY wallet. However, this is considered low adoption since, according to a 2021 UnionPay report, around 903.6 million people use mobile payments in China.
When will China officially launch DCEP e-CNY?
Whilst there is ongoing DCEP/e-CNY testing on in increasing scale, there is no official announcement as to when and how China will fully roll out DCEP/e-CNY.
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.
These regulations are not yet enacted. The FSTB says it welcomes written comments from the public on the Legislative Proposals on or before 31st January 2021.
Current state of regulation of VASPs and Virtual Assets (“VAs”) in Hong Kong
Current regulatory requirements for VASPs and VAs in Hong Kong
The FTSB notes that VAs are not considered as legal tender and are not generally accepted as a means of payment in Hong Kong. However, they are aware that there are some VA trading activities operating locally. In light of this, Hong Kong’s Securities and Futures Commission (“SFC”) issued a position paper in November 2019 (“SFC Position Paper”). The SFC Position Paper outlined some regulatory standards similar to those applicable to licensed securities brokers and automated trading venues, for licensing of VA trading platforms. Notably, this was only an opt-in and voluntary regime and ONLY applied to those platforms which enabled clients to trade VAs with securities feature. Those platforms which solely traded non-securities VAs are not covered.
Hong Kong as a member jurisdiction of the Financial Action Task Force (âFATFâ)
The FATF comprises of 39 major worldwide economies and oversees the implementation of the FATF Standards, which are comprised of 40 Recommendations and 11 Immediate Outcomes (“Standards”). Member jurisdictions do mutual evaluations to see if they comply with these Standards which are updated from time to time. One of the more recent additions to the Standards was in February 2019, where jurisdictions were required to subject VASPs to the same range of anti-money laundering (“AML”)/counter-terrorist financing (“CTF”) obligations applicable to financial institutions and designated non-financial businesses and professions.
Hong Kong was subject to a mutual evaluation and a Report on Hong Kong was published in September 2019, where the FATF will specify recommendations on areas for improvement. Hong Kong is scheduled to undergo a regular technical compliance assessment in February 2023 and an effectiveness assessment in June 2024. The Legislative Proposals are specific in that they “…will be expected to have introduced AML/CTF regulation for the VASP…sectors…” So it is quite apparent their intention that the Legislative Proposals will be passed into law in time for June 2024.
The Legislative Proposals specifically notes that other FATF member economies have either set up or are setting up their own regulatory and supervisory regimes for VASPs.
Proposals put forward in the Consultation Paper
Specifically, the Legislative Proposals suggest amending the current Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615 of the Laws of Hong Kong) (“AMLO”). Here’s A summary of the Legislative Proposals:
Expanding the scope of the AMLO to cover VASPs (currently VASPs are not included).
Implement a licensing regime for VASPs where any person intending to conduct the regulated business of a virtual asset trading platform in Hong Kong will be required to apply for a licence from the SFC and also need to meet a “fit and proper test” similar to that required of other financial sectors. Licensed VASPs will then be subject to the AML/CTF requirements under Schedule 2 of the AMLO and “…other regulatory requirements for investor protection purposes”. Schedule 2 of the AMLO basically sets out requirements relating to customer due diligence and record-keeping, and special circumstances. Examples of this include identification checks and to continuously monitor business relationships.
Give the SFC powers to supervise a VASPs’ compliance of the AMLO requirements.
Then the question is, what are VASPs or VAs?
Scope of the Legislative Proposals
The Legislative Proposals specifically covers VASPs and VAs, so it is important to know their definition. This is set out in the Legislative Proposals.
Virtual Asset Services Providers
The Legislative Proposals takes the definition of VASPs from that of the FATF and is defined as, â…a VASP is a person who, as a business, engages in specified activities involving VAs. The specified activities cover (i) exchange between VAs and fiat currencies; (ii) exchange between one or more forms of VAs; (iii) transfer of VAs; (iv) safekeeping and/or administration of VAs or instruments enabling control over VAs; and (v) participation in and provision of financial services related to an issuerâs offer and/or sale of a VA.”
Virtual asset exchanges
The Legislative Proposals proposes to designate the business of operating a VA exchange as a “regulated VA activity” under the AMLO and require a VASP licence from the SFC and subject to passing the “fit and proper” person test and other regulatory requirements.
Specifically a VA exchange is proposed to be defined as “…any trading platform which is operated for the purpose of allowing an offer or invitation to be made to buy or sell any VA in exchange for any money or any VA…”
The Legislative Proposals, however mention that “peer-to-peer trading platformsâ will not be considered as a VA exchange and thus not subject to the licensing requirements. According to the Legislative Proposals, peer-to-peer trading platforms are platforms that only provide a forum where buyers and sellers post their bids and offers, with or without automatic matching mechanisms, for the parties themselves to trade at an outside venue. However, the actual transaction must be conducted outside the platform, and the platform is not involved in the underlying transaction. If for example the platform comes into possession of any money or any VA at any point in time, they would still be considered a “VA exchange”.
VA activities outside of exchanges (OTC desks etc): Are they covered?
However there are other businesses dealing with VAs that aren’t exchanges. For example VA payment systems, VA custodian services and over the counter trading and crypto ATMs (Genesis Block Hong Kong comes to mind).
According to the Legislative Proposals, they already have interface with financial institutions (e.g. when converting into fiat). This means that their money flow is already traceable for AML/CTF purposes and are already subject to the statutory obligations of reporting suspicious transactions etc. Hence the FSTB says they will nevertheless keep in mind the evolving landscape in relation to these activities and the licensing regime will be kept flexible so it may be expanded to cover other VA activities if the need arises in the future.
Virtual Assets
The FSTB also intends to adopt the definition of a VA as provided by the FATF but in more specific terms. The proposed definition is that a VA is, “…a digital representation of value that is expressed as a unit of account or a store of economic value; functions (or is intended to function) as a medium of exchange accepted by the public as payment for goods or services or for the discharge of a debt, or for investment purposes; and can be transferred, stored or traded electronically.”
What is not covered under the scope of a VA would be central bank digital currencies (China’s DCEP comes to mind), financial assets (e.g. securities) which are already regulated by the SFO, and closed-loop limited purpose items that are non-transferable, non-exchangeable and non-fungible (e.g. gaming coins).
However stablecoins (i.e. VAs purportedly backed by some form of asset to stabilise their value) are covered by the definition of VAs.
Regulatory requirements: are retail investors banned from trading cryptocurrencies?
If the VA business falls under the definition of a VASP and are not other VA activities which are excluded, they will be subject to the licensing regime. With reference to the existing opt-in regime, the Legislative Proposals proposes to empower the SFC to impose licensing conditions on licensed VASPs and regulatory requirements. One such requirement that is particularly concerning to cryptocurrency enthusiasts is the requirement that VASPs should only offer services to “professional investors”. However the Legislative Proposals suggest that this restriction should only be required at the “initial stage” and note that the SFC will continue to monitor the market and reconsider this position as the market matures in the future.
Hong Kong’s crypto community reacts to the Legislative Proposals
Sam Bankman-Fried, CEO of FTX Exchange gave his thoughts on the Legislative Proposals. He noted that it is still in the consultation stages and that whether or not an exchange “is” in Hong Kong so as to be covered by the Legislative Proposals are subtle and non-obvious.
Bitmex of course is also in a bit of hot water, as civil and criminal proceedings have been respectively issued by the US DOJ and CFTC against BitMEX, its CEO Arthur Hayes, together with other key personnel and affiliates. Their CTO was also arrested in the US.
Meanwhile, Leo Weese, Co-founder at The Bitcoin Association of Hong Kong gives his take in a blog post. He notes that whilst he is not opposed to regulation per se, the Legislative Proposals “…a massive overreach of the SFCâs mandate and a de facto ban of Bitcoin in Hong Kong”. In particular, Weese criticises the Legislative Proposals as confusing and unclear, noting also that it is the most restrictive proposal compared to any other FATF member economies. However, it can also be considered that it is merely the SFC’s initiative to implement FATF decisions rather a conspiracy to ban Bitcoin. Finally, Weese expects significant push back against the Legislative Proposals given previous resistance against previous initiatives aimed at money laundering.
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.
Duck Liquidity Pool ($DUCK) is a DeFi Market Maker protocol, developed by DuckDAO, one of the biggest cryptocurrency community that provides funding and marketing support to early-stage crypto projects.
The boom of decentralized finance (DeFi) in recent months has ushered in a new profit-making strategy for crypto traders, beginners and advanced alike. Decentralized exchanges (DEX) rely on liquidity pools to help power their market-makers. While the Duck Liquidity Pool is a new entrant in DeFi, it has already captured the attention of many users in the space thanks to its high APY and token burning model.
https://youtu.be/8MNKafDgW0o
What is the Duck Liquidity Pool?
The Duck Liquidity Pool (DLP) is DuckDAOâs own market maker. The funds that supply its pool came from the sale of pre-mined tokens and can be accessible in many other protocols and exchanges. In the meantime, projects that are supported by DuckDAO will be the first to be able to tap the pool. The ticker for the pool is $DUCK.
The unique feature that distinguishes DLP from others is its âunilateral burnâ strategy, or the one-sided token burn model. It is designed to burn 50% of all earned rewards (more on this later).
The APY level for DLP is high and its suppliers can receive as much as 50% of the profits from market making, airdrop of incubated project tokens, as well as non-fungible token (NFT) campaigns. Such a feature enables yield farmers the ability to earn profit by just providing liquidity to DuckDAOâs market maker.
To participate in the DLP, users have to lock their cryptocurrency holdings by depositing their funds in the pool. In return, they receive DUCK tokens as a reward for supplying funds to the pool.
DUCK token is the DuckDAOâs native utility token, which also powers the incentive model for the Duck Liquidity Pool. The token has the following use cases:
Yield farming on Uniswap pools – Staking tokens help contribute liquidity to DUCK and DDIM pools. For this, they earn profit through DLP.
Reward token for market-making profit – Half of the profit from the market maker is returned to the community who belong to the liquidity pool. If the performance of DLP is good, the profit for the yield farmers grows in proportion as well.
Project token airdrops
Non-fungible token as reward
Deflationary Farming: âOne-Side-Burnâ
This is touted by the team as âYield Farming 2.0,â which is designed to support a deflationary, unilateral burning of tokens. To understand how this works, we must first look at how the current yield farming mechanism works.
The Usual Scenario for Most Liquidity Pools
Commonly, yield farming pools in the DeFi space look very advanced for the average trader. Not only does this create a psychological barrier to entry, but it also makes profit-making a little more difficult for someone new to yield farming.
Another issue that traders face is the inflationary structure of the incentive mechanism in most liquidity pools. This is because, in order to provide rewards to yield farmers, mined tokens have to be released into the market. This model isnât designed for long-term effectiveness since with more reward tokens in supply over time, we can expect its value to depreciate as well.
Duckâs Unilateral Burn
$DUCK, on the other hand, is designed to support long-term yield farming strategies. Even beginners on liquidity pools can just stake and earn a part of the profit that DuckDAOâs market maker gets.
$DUCK One-Side-Burn Deflationary Model (Source: DuckDAO website)
One-Side-Burn is a deflationary model that is designed to burn 50% of the carry pair as soon as the liquidity provider decides to cash in a portion of his stake.
What happens in such a situation is that users lose one side of their liquidity as the tokens are burned. And when someone decides to exit the pool completely, his entire liquidity is also burned and further lowers the DUCK tokens in supply.
While this model may seem counterintuitive for profit-earning at first, over-time, the value of the tokens is going to be greater than what it was when a user has staked in the pool. That is why DLPâs design appears to be much better in the long run.
Duck Liquidity Pool Market-Maker Models
Project Token Purchase
DLP purchases tokens in order to facilitate buy and sell liquidity.
DeFi has enabled the birth of new profit-making strategies for traders in the space. However, whether existing liquidity pools can support long-term yield farming models is another question altogether. DLPâs model, which is powered by the âunilateral burnâ design, appears to be more promising.
To be fair, like many other pools, the profit it can generate for stakers is also influenced by the number of users joining the pool. This is why it is important to look into that as well before deciding to lock your tokens and supply liquidity to the pool.
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
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.
Shadows Network ($DOWS) aims to be a hub for people to issue, trade, lend and borrow synthetic assets. The protocol is built using the Substrate blockchain network and is compatible with the Polkadot ecosystem.
Background
Iror Chen and Bruce Lin lead the Shadows project. Apart from being the co-founders, they double as the CEO and CTO, respectively. The two have extensive experience in diverse fields. To elaborate, Chen previously worked for Amphenol Group while Lin worked for Baidu.
Other Shadows team members include Ted Shao (co-founder and COO), Claire Cai (co-founder and CMO), Sue Xia (overseas CMO), and Liang Li (risk control).
Shadows’ list of partners includes Consensys Lab, NGC Capital, Polka Fund, Blocksync, DuckDAO, OneMax Capital, Oasis Capital, among others.
What is Shadows?
Shadows is a distributed platform focusing on the issuance, borrowing, lending, and trading of synthetic assets. The project leverages the Substrate framework that powers other popular DeFi networks like Polkadot.
Note that synthetics are derivatives or clones of real-world assets. Derived assets can be of anything from cryptocurrencies, stocks, indices, fiat, and commodities. Also called synths, they enable holders to share in the profits and losses of an asset without necessarily having such asset in their portfolio. Doing so opens the DeFi scene to a global audience who would be locked out of the space.
The platform sits on the Polkadot network as a parallel thread. As such, it has inter-chain compatibility with other platforms leveraging EOS and Ethereum to focus on synthetic assets. Cross-chain support opens the network to more blockchain-based assets. For instance, users can use Ethereum (ETH) or Bitcoin (BTC) to create synths.
Shadows integrates an off-chain worker to help capture the system outside the blockchain. Note that the platform uses the worker to replicate trusted oracles. Furthermore, the oracles receive data from external decentralized platforms to trigger activities inside the blockchain. Unfortunately, traditional oracles suffer from security, efficiency, and scalability.
The worker employs Substrate allowing it to perform non-deterministic tasks such as encryption and web requests, and other long-running tasks. The Shadows network achieves the above features through a layered system, focusing on different aspects of synthesizing the assets.
Critical Areas on the Synthetic Network
Synthetic Asset Issuance Agreement
The platform secures the synths using its native asset, DOWS (more on this later). Users deposit the token into a smart contract for them to gain a right to create synthetics on the network.
Consequently, the created tokens are DOWS backed. To reclaim back their tokens, users have to burn their synths. Note that the platform needs a collateralization ratio of 800 percent.
Synthetic Asset Transaction Agreement
The agreements support the trading of synths. These agreements minimize slippage and insufficient liquidity. Also, they ease and provide efficient trading.
Debt Collateral Lending Agreement
The platform employs lending pools that hold users’ debt into the pool to facilitate lending activities. How this works is simple. To elaborate, the borrowers access the pool to place a synth debt.
Next, they pay interest and receive the loan in synthesized USD (xUSD). The need for xUSD funding is to provide flexible financing. This funding option offers a balance between demand, supply interest, and rates.
What Drives the Shadows Network?
Four significant aspects power the platform.
Rewards system â Users are rewarded when they use the native token to create synths. However, the rewards only apply to those who have reached the needed collateralization ratio.
Governance â In the DeFi scene, governance is everything. On Shadows, the native token gives holders a voice when making governance decisions. Some areas falling under community governance include upgrading.
Staking â The base asset does more than just governance, the token can be staked as collateral and at the same time benefit from staking rewards.
Trading bonus â This goes to DOWS holders and is generated by those trading on the platform.
How Does Shadows Work?
First, note that the platform is compatible and connects to Polkadot.
How Shadows Network works
It works as an off-chain enterprise that connects to various parts such as inflationary supply, fee pool, and external services. It connects to Polkadot as a single service.
The Protocol Offers Three Types of Incentives.
The first type of incentive is where a user is charged 0.3% as the trading fee. How is this an incentive? Itâs because they can send it to a fee pool and receive a mortgage in terms of DOWS.
However, the trading fee incentiveâs applicability varies between users because it’s dependent on the amount of debt that the user has and the amount in the debt pool.
The second type of incentive goes to mortgagors who benefit from holding the base asset on a weekly basis. Notably, the amount of bonus received depends on how much debt the mortgagor has in the debt pool.
Third comes rewards for lenders in the lending pool. These incentives have a weekly timeline.
The Shadow Token ($DOWS) tokenomics
DOWS is the backbone of the Shadows network. Apart from governance, casting synths, lending, and distributing rewards, the token can also be used to power the token destruction mechanism.
The destruction part utilizes the transactions and debit pool fee. And, it follows a fixed ratio of 30% per week. Note that the token’s destruction is automatically driven by a smart contract. Observe that this makes the native token a deflationary base asset.
Shadows did a double Initial DEX Offering (IDO) on Ignition and DuckSTARTER. The allocation of tokens were as follows:
Ecological Incentives: 63% â 63,000,000
Early Investors: 20% â 20,000,000
Foundation: 10% â 10,000,000
Advisors: 5% â5,000,000
Liquidity Provision: 2% â 2,000,000
The vesting periods for various allocations are as follows:
Shadows ($DOWS) vesting period
Is Shadows Network safe?
Recently the Shadows project faced some accusations because they are allegedly connected to another project that recently suffered an alleged “hack” of their smart contract.
On 6th March 2021, the Team Tweeted to address the concerns, saying that their smart contract codes were audited twice by Certik. And on both occasions the contracts were found to be secure and met the highest security standards.
The Team in their Tweet on 7th March 2021 also said that Shadows Network uses a proxy contract to upgrade its smart contract and deliver key functions such as issuing, trading, borrowing or lending synthetic assets on the network. Most notably, the proxy contract will deploy incentive DApps for users such as LP staking and DAO governance etc. From these Apps, 63 million $DOWS (representing 63% of the total supply of $DOWS) will be minted as a reward to the community. Once all 63 million $DOWS have been released, the Team will permanently remove the mint function from the Shadows smart contract. This has the effect of stopping the Team from producing any more $DOWS and most importantly, to potentially prevent the price of $DOWS from being diluted.
Further, this proxy contract and ERC20 contract are kept secure through multisig and is on Openzeppelin- an open-sourced protocol. The Team also notes that other popular names in the cryptocurrency scene i.e. Compound and Coinbase also use Openzeppelin.
Conclusion
Shadows helps bring traditional assets onto the blockchain. In doing so, the platform opens the conventional assets to more users. For instance, it brings these assets to DeFi users and those who don’t want to hold real crypto assets.
Notably, the platform takes on a layered-approach to bring these possibilities to life-enhancing functionalities. Furthermore, the DOWS token helps power different aspects of the Shadows network.
Disclaimer: Cryptocurrency trading involves significant risks and may result in the loss of your capital. You should carefully consider whether trading cryptocurrencies is right for you in light of your financial condition and ability to bear financial risks. Cryptocurrency prices are highly volatile and can fluctuate widely in a short period of time. As such, trading cryptocurrencies may not be suitable for everyone. Additionally, storing cryptocurrencies on a centralized exchange carries inherent risks, including the potential for loss due to hacking, exchange collapse, or other security breaches. We strongly advise that you seek independent professional advice before engaging in any cryptocurrency trading activities and carefully consider the security measures in place when choosing or storing your cryptocurrencies on a cryptocurrency exchange.
Recently, the news has been flooded with talks about crypto regulation and exchange investigations by the SEC. This has raised a lot of problems among investors as particular crypto exchanges they use might one day become restricted by international regulators. Therefore, one of the safest long-term solutions is to find yourself a fully regulated crypto exchange.
In this article, we will be comparing two of the top regulated crypto exchanges in the world: SwissBorg and eToro.
After having raised USD $53 million, SwissBorg was launched in 2017 by Anthony Lesoismier (CSO) and Cyrus Fazel (CEO). SwissBorg is based in Switzerland and is fully compliant with Swiss Law, making it a popular European crypto exchange. It is the first blockchain-based secure wealth management platform, aimed at simplifying the process of crypto investments. It integrates with major crypto exchanges, DeFi protocols, and features a community-based ownership model.
SwissBorg is available in over 115 countries, and they have plans to include many more in the future. However, as of now, SwissBorg is not supported in the U.S. If you want to see if your country is included, you can visit their Supported Countries page.
SwissBorg Team
Prior to founding the exchange, Lesoismier was Head of Financial Market Digital-Advisory at JFD Brokers, and Fazel was a multicultural FinTech professional with decades of experience in asset management and algorithmic trading.
The Wealth App is the smart command-and-control centre of SwissBorg. It lets users build, manage, and monitor their crypto portfolios, enabling easy and secure wealth management. Users can fund their accounts with 16 different fiat currencies, including USD, EUR, GBP, and CHZ. Additionally, similar to Coinbase, a limited number of high-cap digital assets are supported to ensure quality.
The biggest advantage that SwissBorg has is their Smart Engine. It ensures zero spreads and no inflated exchange rates or hidden fees, allowing users to trade at the best rates and lowest slippage. Moreover, the Smart Engine analyzes hundreds of live trading pairs in seconds by connecting to major crypto exchanges such as Binance or Kraken. As a result, SwissBorg finds the best route to execute customer orders in milliseconds, saving investors time to find the best exchange rates.
Smart Yield Account
SwissBorg’s Smart Yield is a feature on its app which allows users to potentially earn passive income through Decentralized Finance (DeFi) protocols and Centralized Finance (CeFi) platforms. Smart Yield’s user-friendly interface allows easy access to the benefits of DeFi and CeFi, even average crypto users without much pre-requisite knowledge can stand to gain from it.
There are a lot crypto themes, and within each theme there are hundreds of different tokens to choose from. Decision fatigue really sets in when you are opting to diversify your crypto portfolio. SwissBorg’s answer to this is their “Thematics”, expert-designed bundles of different crypto themes.
They provide exposure and diversification that is important for every crypto investor. SwissBorg’s Thematics lets you choose a category you have long-term belief in. For example, if you believe in layer-one protocols, you can choose a layer-one protocol bundle containing Ethereum, Cardano, Solana, Avalanche and so on.
If you are interested in upcoming layer one protocols, you can check out our comprehensive article on Aptos or Sui.
What is eToro?
eToro
Company Overview
Based in Tel-Aviv, eToro was established in 2007 by co-founders Ronen Assia (Executive Director), Yoni Assia (CEO), and David Ring (Former CTO). The company was originally a social trading exchange offering commodities, indices, and stocks before diving headfirst into the crypto industry in 2018 with the launch of eToroX and a crypto wallet. It has since grown to one of the largest crypto exchanges, with a user base of 25 million active users worldwide.
Before eToro was established, Yoni Assia had held managerial roles in the FinTech industry and is an expert in computer science and finance. On the other hand, his brother Ronen Assia is a specialist in product design and engineering, having created products across various platforms such as medical devices, household applications, and web applications.
The biggest innovative feature of eToro is their CopyTrader, which allows you to automatically copy top-performing traders, what they invest in and when. This is great for average crypto users and beginners as they can easily leverage other crypto traders’ expertise, instead of going through the hassle of constantly monitoring the market, unsure of whether to enter or exit. As a result, you can simply replicate their trading in your own portfolio. In a way, it is similar to KuCoin’s trading bot, where trading activities are already figured out for you.
Moreover, CopyTrader is also a social trading platform, where traders are part of a collaborative community. They can with chat with other traders, discuss strategies and benefit from each other. This is a great place to start for beginners and learn from the best on how the market moves, but keep in mind that their quality is not assured. Crypto investments are always volatile.
Smart Portfolios
Similar to SwissBorg’s Thematics, eToro’s Smart Portfolios are essential a grouping of several assets bundled together based on the theme. In addition to crypto, eToro also has portfolios of stocks, ETFs, commodities and even people, as per their business model in the early 2010s before crypto became mainstream.
Smart Portfolios leverages machine learning algorithms and data science to group the best performing bundles, taking into account factors such as balance, exposure, potential yield, risk, and more. Moreover, there are no management fees or commission, other than those applied with assets comprising each portfolio.
eToroX
eToroX is the company’s product specifically designed for professional crypto traders and institutional investors. It is not available to retail investors. It offers a suite of advanced trading tools, 30+ crypto assets including 17 unique stablecoins and 80+ tokenized asset pairs. eToroX has a highly competitive fee structure and is renowned for having deep liquidity for stabilizing large-volume trades.
SwissBorg vs eToro Overview
Cryptocurrencies and Products
Both SwissBorg and eToro only offer a limited number of cryptocurrencies, around 30-40. Most of these assets have large market cap like Bitcoin, Ethereum, XRP (Ripple), BNB, and Polkadot. This is done to ensure quality, reducing exposure to high risk/high reward assets or degen projects that could incur a lot of loss. Both exchanges strictly adhere to standards set by financial regulatory agencies to protect the securities of investors.
In terms of trading, both exchanges offer a wide array of trading tools for all crypto users as well as deep liquidity to support large volume trades with zero spreads. However, trading on eToro only benefits whales and institutional investors as eToroX unlocks them the full benefit and is inaccessible to retail investors. In contrast, SwissBorg’s Wealth App, optimized with Smart Engine, performs just as well as eToroX and is accessible to everyone.
Furthermore, SwissBorg offers much more than crypto trading. Their Smart Yield feature works with numerous DeFi protocols and CeFi platforms, simplifying the process of earning and allowing users to stake and receive passive income. On the other hand, eToro also has their own staking reward programs, but is only limited to Cardano, Tron, and Ethereum. Although their monthly staking yield is high, only UK and US users have access to it.
Fees
Thanks to their Smart Engine, SwissBorg users do not have to worry about inflated exchange rates, floating spreads, and hidden fees. In other words, you will never end up with less crypto than what you paid for. There are no deposit fees, but crypto withdrawals are subject to an execution fee of at least 0.10%, which is relatively low compared to other exchanges. In terms of exchange fees, SwissBorg fees are among the lowest in the crypto industry, but vary greatly depending on loyalty tier and which fiat or crypto asset is being used. Moreover, 20% of their profits generated from the fees are reinvested back into the SwissBorg ecosystem.
On the other hand, eToro charges a 1% fee on crypto transactions plus a spread. Although this is still considered lower compared to other exchanges, it is not as competitive as SwissBorg. If you are planning to trade a lot of cryptocurrencies, paying more than 1% can eat into your profits. Unlike SwissBorg, eToro charges foreign transaction (FX) fees for non-USD deposits, and USD $5 for withdrawals. Furthermore, if you are planning to HODL assets long-term, it is important to note that eToro charges an inactivity fee for accounts that have not been online for a year. You can simply log in each day to negate that.
Overall, SwissBorg is the clear winner in terms of lower and transparent fees.
Security
As leading trading platforms, both SwissBorg and eToro have successfully ensured compliance with top regulatory authorities, placing the security of their platform and the safety of their clients’ funds as a top priority.
Both exchanges adhere to Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations, protecting traders from fraudulent and criminal activities. Much like all other major crypto exchanges, SwissBorg and eToro uses two-factor authentication (2FA), data encryption, network monitoring and other standard security protocols.
Both companies also store account funds in cold storage so that they cannot be hacked online. However, their methodology of cold storage security is different but impenetrable nevertheless.
eToro deploys a cold storage Custody as a Service (CaaS) solution in partnership with leading cybersecurity firm GK8. It is essentially the application of secure institutional model of custody and cryptographic security in crypto. The funds are also insured by Aon PLC against theft, loss, damage or destruction of assets.
On the other hand, instead of custody mechanism, SwissBorg addresses and enhances cold wallet security by implementing multi-party computation (MPC) keyless technology. It does not require a private key to be created, eliminating a single point of failure. MPC works by multiple parties jointly performing mathematical computations, without one party revealing its information to the others. SwissBorg achieves this in collaboration with Fireblocks as their security partner. Fireblocks is renowned for being the most secure and adaptable platform that leverages MPC technology to secure digital assets.
Crediting to their advanced security protocols and regulation compliances, there have been no known successful hacks on both SwissBorg and eToro to date.
Key Takeaways
Both SwissBorg and eToro are great crypto exchanges for investors to manage and expand their portfolio. While eToro’s CopyTrader feature is great for beginners to learn how expert traders maneuver the market, it is important to note that their quality is not assured. Crypto investments are always volatile, and no one can predict the market.
Overall, SwissBorg is relatively better than eToro in terms of trading efficiency, fees, and product variety. SwissBorg’s Smart Engine allows users of all levels to trade without inflated exchange rates, spread and hidden fees. Their exchange fees are also much lower than eToro’s, and have no deposit fees. Moreover, the company also brings DeFi benefits to its users, letting them earn high APY rewards in a simple process.
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.
Bitbuy is a Canadian cryptocurrency exchange platform that offers a secure and easy way to buy, sell, and trade digital assets. Today, we’ll concentrate on Bitbuy’s review and evaluation of the platform based on all of the most important factors.
Bitbuy is a leading Canadian cryptocurrency exchange platform founded in 2013 by Adam Goldman in Toronto. It is a secure and easy-to-use platform that supports popular cryptocurrencies such as Bitcoin, Bitcoin Cash, Ethereum, Ripple, Litecoin, Stellar Lumens and EOS. Bitbuy was originally called InstaBT but was re-branded to its current name as the company expanded. The main goal of the company is to provide Canadians with easy and secure access to Bitcoin and other cryptocurrencies. As the platform continues to improve, more cryptocurrencies will be added in the near future.
Key Features of Bitbuy
Key features of Bitbuy include:
Exchange only for Canadian dollars (CAD). Bitbuy is only available to Canadian citizens and residents and is not available in any other country.
Simple to use. Bitbuy has two platforms available: Express and Pro. Pro trading caters to experienced traders, whereas Express allows you to buy cryptocurrencies quickly and easily.
The ability to buy and sell 25 different cryptocurrencies. Cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), and many others are digital assets that are revolutionizing the way we transact and store value.
Regulatory compliance. Bitbuy is a regulatory-compliant platform that is registered as a Money Services Business (MSB) with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC).
OTC desk. Bitbuy’s OTC trading platform is available to high-volume traders and institutional investors.
Excellent customer service. Bitbuy provides direct email customer support and responds within 12 hours or less.
Key Advantages of Bitbuy
Bitbuy crypto exchange has quite a lot to offer, so letâs take a look at each of the aspects separately and see what itâs all about.
Security is a top priority
Bitbuy is one of the most secure and reliable cryptocurrency exchanges in Canada. It is registered by FINTRAC as a Money Services Business (MSB) and is responsible for meeting all obligations under the PCMLTFA and associated Regulations. Every Bitbuy user has to confirm its identity, meaning that the platform ensures there are no fake accounts and scammers on the platform. Bitbuy is also responsible for keeping certain records and have to complete reports related to suspicious transactions, terrorist property, large cash transactions, and electronic funds transfers.
Centralized and decentralized cryptocurrency exchanges both have their advantages and disadvantages. Centralized exchanges are similar to banks and can be considered safer, but thereâs a third-party involvement and you donât have full autonomy over your wallet. Decentralized exchanges, on the other hand, donât involve a third party and you have full control over your assets. To ensure your security, whether youâre using a centralized or decentralized exchange, you should always keep your assets in a secure wallet, such as a hardware one.
Buy & Sell Major Cryptocurrencies
Bitbuy is a cryptocurrency platform that supports all major coins, including Bitcoin (BTC), Stellar Lumens (XLM), Bitcoin Cash (BCH), Ethereum (ETH), Litecoin (LTC), EOS (EOS), Ripple (XRP), Decentraland (MANA), Chainlink (LINK), AAVE, Dogecoin (DOGE), Cardano (ADA), Polkadot (DOT), Uniswap (UNI), SushiSwap (SUSHI), Polygon (MATIC), and Solana (SOL). With 17 different coins to choose from, Bitbuy is a great option for those looking to buy, sell, and store cryptocurrencies. However, if youâre looking for less popular tokens, you may want to look elsewhere. Ultimately, it all depends on your personal needs.
Fiat Support (CAD)
Bitbuy is a Canadian cryptocurrency exchange that allows users to purchase Bitcoin, Ethereum, and other cryptocurrencies using fiat money. It supports Canadian dollars only, but users can also fund their accounts with cryptocurrencies. Bitbuy is a reliable platform with a variety of positive reviews, making it a great choice for Canadians looking to buy cryptocurrencies.
Useful Products & Services
It is easy to use and provides clear navigation with the Express Trade platform, perfect for beginners. PRO Trade platform is created for advanced traders, with additional features such as in-depth market charts, advanced orders, and live order book. Bitbuy OTC is suitable for big trades, allowing you to work directly with one of Bitbuyâs experienced traders and get a live price quote. Bitbuy API is for experienced developers, providing access to 10+ markets with CAD-to-crypto and crypto-to-crypto pairs. Bitbuy also makes it easier by providing automated sign-up and onboarding processes, as well as a new “username” feature for a smoother experience.”
Built-In Wallets for Every Account
Bitbuy is a Canadian exchange that takes security seriously. They offer an insured built-in wallet and have partnered with BitGo to provide an offline vault. For those looking for an extra layer of security, hardware wallets like the Ledger Nano X, Trezor Model T, and KeepKey are recommended. These wallets provide a secure way to store cryptocurrencies and are worth the investment for those looking to protect their digital assets. Bitbuy is committed to providing users with the best security measures available, so they can rest assured that their funds are safe.
Mobile App Available
Bitbuy is a Canadian cryptocurrency exchange that offers users the ability to buy, sell and trade 7 different cryptocurrencies. The provider offers both a desktop platform and a mobile app that is available for both iOS and Android users. The mobile app features a clear design, is easy to use and navigate and offers the same functionality as the desktop version. Users can fund and withdraw CAD using Interac e-Transfer or bank wire. Bitbuy reviews have praised the platform for its user-friendly design and features, making it a great choice for both beginner and experienced traders.
It has a 98%+ cold storage policy, 2FA on all transactions, 1:1 Bitcoin insurance, and a recent audit by a third-party blockchain security firm. The platform allows users to fund, buy, sell, and withdraw cryptocurrencies quickly and securely. It also has features that allow users to track currency market prices, orders, and view history. Bitbuy is also launching a new platform that will allow users to modify 2FA options based on their personal preferences. With its strong security and wide range of features, Bitbuy is a great choice for anyone looking to buy, sell, or trade cryptocurrencies.
Fees are Relatively Low
Bitbuy is a crypto exchange that supports fiat currencies and offers low deposit fees. When depositing or withdrawing Canada dollars, you will pay from 0.50% to 1.50% depending on the type of deposits and withdrawals – Bank Wire or Interac e-Transfer. Fees for trading are different for market makers and takers, with makers usually paying lower fees than takers. Market makers add liquidity to the market and increase the market depth, while market takers seek liquidity and take it off the book. Bitbuy is a great choice for those looking for a reliable and secure crypto exchange with low fees.
Bitbuy is a Canadian cryptocurrency exchange platform that offers competitive trading fees. The standard fee is 0.25%, however, when using the âBitbuy PROâ version, the fee for makers is 0.10% and for takers – 0.20%. When using the âExpress Tradeâ feature, you will only pay 0.20% for each instant trade. Digital cryptocurrency deposits and withdrawals are free, however, processing times vary. Bitcoin deposits take 3 confirmations, Ethereum – 12 confirmations, while Stellar Lumens, Ripple and EOS processing is almost instant. Withdrawal fees vary depending on the currency, for example, Bitcoin (BTC) – 0.001 BTC, Stellar Lumens (XLM) – 26XLM, Bitcoin Cash (BCH) – 0.01 BCH, Ethereum (ETH) – 0.02 ETH, Litecoin (LTC) – 0.05 LTC, EOS (EOS) – 0.03 EOS and Ripple (XRP) – 25 XRP. Bitbuyâs fees are on par with the industry standard and get lower when using Bitbuy PRO.
Key Disadvantages of Bitbuy
It’s time to move on to the next section of this Bitbuy review: the platform’s drawbacks.
A Small Number of Cryptocurrencies
Bitbuy is a cryptocurrency exchange platform that offers 17 options to choose from, including Bitcoin, Bitcoin Cash, Ethereum, Litecoin, EOS, Ripple, Stellar Lumens, LINK, and AAVE. While this is enough for those looking to buy the most popular coins, it is much less than other international cryptocurrency exchange platforms such as Coinbase, Binance, and Kraken, which offer more than 30, 150, and 37 supported cryptocurrencies respectively. Therefore, if youâre looking for a platform with more options, then you should consider other options.
How to Use Bitbuy?
If this Bitbuy review convinced you that this platform is exactly what you’re looking for, I’d like to give you a head start by providing you with a step-by-step guide on how to create an account on Bitbuy as well as how to make a deposit to begin trading.
How to Create an Account on Bitbuy?
Step 1. The first thing you need to do is go to the Bitbuy main page and click âSign Up to Get Startedâ.
Step 2. You must now enter the required information: email address, password, and referral code (optional). After that, click “Create an account.”
Step 3. Check your email address; you should have received a letter from Bitbuy. If it isn’t there, click “Resend Verification Email.”
Step 4. Open the Bitbuy email you received and click “Verify My Email.”
Step 5. You can sign up for Bitbuy after your email has been verified.
How to Make a Deposit on Bitbuy?
Step 1. Sign in by clicking “Your Account” in the top right corner of the page.
Step 2. After signing in, click the “Add Funds” button.
Step 3. You have two funding options: e-Transfer or wire transfer. Remember that wire transfers take longer.
Step 4. Enter the amount to be transferred and click “Next.”
Step 5. Complete the transaction by logging in to your financial institution’s or online banking platform.
Conclusion
Bitbuy is a Canadian cryptocurrency exchange founded in 2013. It offers a secure platform for buying and selling major cryptocurrencies, a built-in wallet, and a mobile app. However, it has relatively high fees, is only available to Canadian citizens, and has some concerning reviews online. It is suitable for beginners but may not be as good for experienced traders. Before buying cryptocurrencies, it is important to also get a secure wallet for your assets. Popular models include Ledger Nano X and Trezor Model T.
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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.
Key Features of Binance
