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.
Around 50 notable names in the crypto Twitter space were caught red-handed for essentially orchestrating a pump and dump scheme.
This started when they apparently missed out on the $MEME airdrop and so decided to “redeem” themselves…at the expense of others. Their plan, known as “The Experiment” was to create a new flash mob project called $FEW. There was not much of a plan in terms of launching the project or what it was about. But, there was a clear intent to airdrop the token to their fellow members who would promote it on Twitter to pump up the price of $FEW. Afterward, the members would proceed to sell their airdropped tokens and walk away with a few extra bucks in their pockets.
However, SOMEONE leaked screenshots of the private Telegram discussion to the public. Needless to say, the public went into an angry frenzy, with Anthony Sassano (@sassal0x on Twitter) getting the brunt of the anger as the screenshots showed him saying their project needed “people to dump on”.
Members of the group quickly came to say that “The Experiment” was a joke. When the public wasn’t satisfied with that explanation they also claimed they were going to donate all their profits from the project. Sassano eventually admitted his initial explanation that it was “a joke” was weak and apologised. However, he maintains he did not think $FEW was a scam since he saw some notable influencers in the Telegram. He also burned his $FEW to assure the public he was not going to dump the tokens on them. Other members such as Alex Masmej also insisted that no harm was actually done since the token was never listed and that he had also burnt his $FEW.
However, this wasn’t a joke to some people as they actually ended up buying $FEW because of the influencers’ promotional posts on Twitter. Others, seeing that $FEW wasn’t listed on any exchange yet, tried to profit off the hype by listing fake $FEW trading pairs on Uniswap in an effort to get some members to trade.
The public may have moved on for now seeing as how quickly trends come and go in crypto, but the $FEW incident had just confirmed and exposed what many of us had been suspecting for a long time.
KuCoin gets hacked
KuCoin confirmed on 26th September 2020 in a Twitter post they had detected huge withdrawals of BTC and other tokens from their hot wallets out of the Exchange. It is estimated that the withdrawals are around USD$150million worth, a “small amount for KuCoin” according to a Livestream they did shortly after the hack was confirmed. The Exchange is still trying to investigate how the withdrawals came about, but they are reassuring the public that their funds are safe and they will cover any losses suffered by the public.
They also mentioned they are working with other exchanges to track down the flow of the stolen funds and stop them from being disposed of on the market. Kucoin will also be temporarily suspending all withdrawals from the Exchange “until next week”.
The moral of the story is, take your cryptocurrencies off exchanges and store them offline in a hardware wallet. If you don’t have one yet, please consider getting one. Check out our Ledger Nano X review or buy it here.
NFTs suddenly becomes hot
This week, Non-Fungible Token (NFT) hype seemingly appeared out of nowhere and now everyone is trying to make NFTs and selling them for profit. But is it sustainable? Or is it just something to keep everyone entertained since the DeFi craze is cooling down? I invited Yat Siu, Co-Founder/CEO of Animoca Brands ($REVV) and Sandbox ($SAND) to debate whether NFTs are the next big thing, and I did NOT hold back in playing the devil’s advocate:
Upcoming events
26 Sep 1:00pm: Flamingo.Finance ($FLM) will resume Mint Rush. 28 Sep 8:30am:RioDeFi (RFUEL) will list on Uniswap at an initial price of $0.20 per token. 29 Sep 1:00pm: CryptoLocally ($GIV) will auction off 30mil GIV tokens (3% of total supply) less the whitelisted allocation of approx 1.5mil GIV. The initial price will be 0.0065 USDC/GIV and the auction interface will be revealed on the CryptoLocally website at the start of the auction. For those who want a head start, CryptoLocally allows you to place your orders on Mesa before the auction. 3 October (tentative): KuCoin will resume withdrawals from their exchange. But do check the KuCoin Telegram for the most updated info.
*All times are listed in UTC unless otherwise stated.
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.
Rio DeFi ($RFUEL) is a blockchain technology company. It aims to bridge the traditional finance with the blockchain space with its powerful digital infrastructure, Rio Chain. It focuses on security, speed, scalability, and interoperability with existing blockchain.
The whole Rio ecosystem promises a wide array of services that users can utilize as an alternative from the traditional financial system. From savings and lending services to trading and insurance opportunities. All of these are accessible with just a smartphone and internet connection.
Background
James Anderson, the CEO of Rio DeFi, as well as his team, believes that today’s financial system is in dire need of new development that can respond to the needs of globalization. Services provided by intermediaries such as payment solutions and money transfers, or control of fiat currencies by local governments, bear multiple concerns that impact the whole financial landscape as we know them today.
The team behind Rio worked on an ecosystem that can easily be used by users in their daily lives to perform financial transactions without much friction and cost. And at the heart of the project is the objective to support the mass adoption of cryptocurrencies among the general public.
There is still a lot of work to do but Rio has developed a model that can respond to the rapidly-changing international financial landscape.
What is RIO DeFi?
Rio Chain is a decentralized finance (DeFi) service platform powered by smart contracts. The purpose of the platform is to provide an ecosystem that can back decentralized applications (dApps) providing financial services based on a single but effective and fast blockchain.
It is built on its own chain, seeing the problems that the Bitcoin and Ethereum networks are experiencing. Right now, the volume of transactions that are going through those top chains has caused slow transactions, expensive gas costs, and poor adoption rate. There had to be another platform to base their new ecosystem on and it was the Rio Chain that they came up with.
Through Rio DeFi, new dApps can support new wallets, services, and cryptocurrencies.
How RioDeFi works
Parity Substrate
Rio’s team believes that the best way to move forward with crypto development is to create a blockchain that can freely interact with the others. That is why they went on to implement the Parity Substrate technology to enable other blockchain projects to easily plug into Rio through parachains.
Parachains are standalone blockchains that can be used to develop new dApps which can be conveniently deployed onto other chains without any interoperability issues.
Parachains
Three Main Focuses of the Rio project
Rio’s solution to the all too common problem of slow, inefficient, and expensive blockchains is a model that supports their three main focuses, namely: usability, scalability, and security.
Hybrid model: Putting together a new network that can provide scalability and higher transaction throughput (with as fast as two seconds per block in confirmation time) is achieved by developing a federated model for the Rio blockchain.
Flexibility: Through the deployment of virtual machine interpreters with very low client requirements and customizable consensus algorithms rid the Rio chain of rigidity and risks of centralization. Everything built on top of the Rio chain can be easily adjusted according to the prevailing market conditions without any friction when it comes to implementation.
Interoperable: Because the Rio chain is designed to support easy linkage between other chains, it can efficiently connect different organizations together despite the difference in their blockchain platforms.
Three main focuses of RioChain
Consensus Algorithm (Proof-of-Authority)
Rio uses the Proof-of-Authority (PoA) consensus mechanism that adopts Substrate’s Aura (Authority round) and GRANDPA (GHOST-based Recursive ANcestor Deriving Prefix Agreement) consensus algorithms.
These two new combinations for the PoA implementation ensures that there are different algorithms that govern how the block data is handled and how finality is achieved for each transaction. By delegating the task of splitting block data writing to Aura, and handing over the finality verification process to GRANDPA, Rio has achieved better flexibility without compromising the security of the transactions performed on-chain.
In the pipeline is Rio’s plan to switch to Proof-of-Stake (PoS), similar to the consensus mechanism implemented on the Bitcoin blockchain. As of now, the team behind Rio is working on shifting to BABE (Blind Assignment for Blockchain Extension) from Aura to lay the groundwork needed for the eventual PoS adoption.
AURA: It is designated as the consensus algorithm to produce the next blocks from confirmation. It functions through the help of a select set of validators that generate the blocks at a given time. Only the authorized nodes are allowed to become validators.
GRANDPA: It is delegated with the task of providing block termination with the help of “weighted authorities.” They are not going to produce any block for the network, but they vote on the “best” version of the blocks produced by the validators. If more than two-thirds of the delegated authorities vote on a version of the state of the blockchain, it is then considered final.
Federated Blockchain
Rio believes that a federated blockchain is better than a permissionless public blockchain for several reasons. It provides faster transaction speed, scalability, low transaction costs, low energy consumption, stronger security, and increased ability to provide data privacy features.
The implementation of the federated model allows Rio to achieve a 2-second block time confirmation, faster than other existing blockchains in the DeFi space. And even at this speed, Rio chain is still capable of protecting the network from 51% attacks while being able to process almost 3,000 transactions per second.
Right now, the team behind Rio is considering the implementation of a hybrid PoS and PoA consensus model, complemented by light node validators. This means that anyone can probably be able to participate in network validation with just mobile phones as the assigned nodes.
Rio Fuel token ($RFUEL): Rewards for token holders
Rio rewards its blockchain participants with Rio Fuel ($RFUEL), which is also its native token. RFUEL can be used as a store of value, payment for gas fees, or to execute smart contracts.
1 billion RFUEL tokens will be created via a token generation event (TGE), which 70% of these tokens will be distributed to incentivise applications and users that contributes to the growth of the ecosystem, 20% will be sold through community crowd sales and private sales, and 10% (100 million) will be maintained as reserves that will slowly release over the span of 5 years.
Refer to the chart below for more detailed on RFUEL token distribution:-
RFUEL token distribution
Rio Fuel token ($RFUEL): public sale
The first round public sale of Rio Fuel’s RFUEL token was sold out in 40 minutes on 11th September 2020. The first round price is at $0.16, minimum contribution cap is USD $1,000 and maximum contribution cap is USD $10,000. Vesting period is 61 days with unlocks of 1/3 starting at Token Generation Event (TGE) and on days 31 and 61 after TGE.
The second round was held on 15th September 2020 at 6:00 a.m. UTC. The price for round 2 will be at $0.18, minimum contribution cap is $1,000 and maximum contribution cap is USD $10,000. Vesting period is 1 month with unlocks of 1/4 on TGE and on days 11, 21, and 31 after TGE. All vested tokens are automatically staked to receive RFUEL staking rewards.
RFUEL public sales round 3 is a Uniswap Initial DEX Offering (IDO). RFUEL will be available for trading on Uniswap with a starting price of $0.20 and all tokens will be fully unlocked i.e. immediately available for trading. However $0.20 is only the initial price and considering the previous rounds were all oversubscribed, there is a possibility that prices will immediately fluctuate after trading starts.
Bitcoin Lending Platform: Users can deposit their BTCs in smart contracts on top of the Rio Chain to earn interests from their assets. Borrowers can also easily leverage their BTC by borrowing through the Rio Chain.
Bitcoin Lending Platform
Savings Account: Rio’s security can be a haven for BTC savers too. Users can safely deposit their BTC and other supported cryptocurrencies while earning high-interest rates as compared to traditional savings services from banks and other providers.
Savings Account
Decentralized E-commerce: Merchants can freely tap on the Rio chain to digitize their business and cut huge operational costs in doing so. Establishing their managing and sales operations on the Rio Chain can enable merchants to access a wider array of shoppers thanks to lower costs, better payment gateways, borderless transaction models, and greater consumer data privacy, among others.
Conclusion
The development of the DeFi space relies on the success of projects that are able to bridge all existing developments on multiple blockchains. This is especially true for useful innovations that are stuck in high-traffic networks. If adoption is the goal, building an interoperable blockchain that supports cross-chain implementation is a great way to go about it.
Rio DeFi’s blockchain-agnostic model could create an infantile avenue of innovations in the DeFi space. By bridging different blockchains together, not only can we possibly achieve faster adoption, but also greater interest in developing interoperable DeFi models as well.
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.
As we head towards late September, we see a significant cooldown on the profitability of Yield Farming. The days of 3 digital farms are gone, with yields now nearing ~50% APY for low-risk farms. Whilst some high yields still remain, the number of scams in the yield farming space has drastically increased. Overall, this is a healthier direction for the entire space.
Week in review
YFValue is evolving-but is it for the best?
YFValue will be going through a lot of changes in the coming few weeks. Here’s a summary:
15th September 2020 at 2:00pm UTC: Governance Vault (beta) opened and is intended to replace Staking Pool v2. It is supposedly an upgrade because the YFV staked in Governance Vault will now also be farming for yield. Profits would be used to buy back VALUE and distributed to stakers.
16th September 2020: YFValue’s new token VALUE deployed. The total supply of VALUE is capped at 3mil. A swap portal will soon be opened for holders to swap their YFV to VALUE.
18th September 2020: Value Liquid exchange will be launched. All liquidity from YFV pools will be automatically migrated from Balancer to Value Liquid. Balancer Pools will stop issuing YFV.
21st September 2020: Value Vaults will be available. Currently, it is known that after its release, 6.8% of profits from Value Vault’s strategies will be used to buy VALUE and distributed to Governance Vault Stakers. However, full details of what Value Vaults do are not announced yet.
2nd October 2020: Stablecoin seed pool’s double inflation rate will end.
Yieldfarming.insure- DeFi drama on x4 speed
Yieldfarming.insure ($SAFE) was only launched on 14th September 2020 and was all the buzz in various telegram groups. Shortly after launch on 15th September 2020, prices for $SAFE shot up to over USD$4,200 at its peak. However, the next day its developer “Chefinsurance” (“Chef”) published a lengthy message about the drama happening behind the scenes.
Turns out there was some conflict between Chef and “AzeemFi” (“Azeem”), apparently in investor into Yieldfarming.insure. According to Chef, Azeem insisted to deploy Pool 4 earlier than planned and eventually forced Chef to do so. Minutes after deployment, Azeem apparently realising he may be exposed to the risk of impermanent loss suddenly withdrew all his liquidity from Pool 4, essentially locking that pool and rendering it unusable. Azeem apparently then messaged community members to backstab and shift the blame for the issues on Pool 4 onto Chef. He also allegedly plans to oust Chef and was dumping his $SAFE tokens on the market.
Soon after Azeem issues his own reply that Chef is not truthful and posted message histories between himself and Chef. According to Azeem, he had only later discovered that Chef had created a clone farm and there was no actual product at all. Further, he insists he did not tank Yieldfarming.insure and instaed was trying to save it. Furthermore, the $SAFE tokens were according to Azeem “fairly farmed” by him and he had sold them to “take fairly farmed profits”.
Only 24 hours later and apparently Chef and Azeem have reconnected and are prepared to put aside their differences and reconcile.
From the latest update, it appears that Azeem would be stepping away from the project entirely. Meanwhile, Chef will be taking a break from his university studies and was given a grant of USD$25,000 and 5ETH from Andre Cronje and BlurKirby.eth to focus on the project.
The new project, known as COVER will be fully built from the ground up and will allow users to buy and sell cover on anything on a decentralised and scalable platform. Their MVP is expected to be available for beta testing by 1st November 2020.
As for SAFE holders, they will be able to migrate to $COVER through a smart contract after the completion of the beta tests for COVER.
$UNI-versal free lunch
Uniswap dropped a (welcome) bomb on 17th September 2020 when it launched its community token $UNI. Anyone who used Uniswap (including failed transactions) will be able to claim 200 UNI tokens for FREE. For those who provided liquidity to the platform, Uniswap will award you with even bigger bonuses. Check out our video below on how you can claim your free lunch:
Claim Free Uniswap ($UNI)
Exchanges saw how hot these free lunches were going to be and immediately raced to list UNI. Currently, UNI is listed on FTX, Binance, KuCoin, OKEx, Poloniex etc. Prices for UNI were also on an upwards trajectory, with UNI going to USD$8.40 at its highest.
However UNI is still at its early stage and it needs to be seen the approximate range at which prices will be. Hence we hear a lot of people in the community saying that they will hold onto their UNI for now with a “wait and see” approach.
Ledger hardware wallet sale!
LAST FEW DAYS! Ledger is offering 20% off on their Nano X and Nano S cryptocurrency hardware wallets with promo code: backtoschool. Offer is only available from 7-21st Sept 2020. Click below to buy!
Upcoming events
21st September 2020: YFValue’s Value Vaults will be available. 23rd September 2020: Flamingo.finance’s yield farm, Flamincome will launch.
Disclaimer: Cryptocurrency trading involves significant risks and may result in the loss of your capital. You should carefully consider whether trading cryptocurrencies is right for you in light of your financial condition and ability to bear financial risks. Cryptocurrency prices are highly volatile and can fluctuate widely in a short period of time. As such, trading cryptocurrencies may not be suitable for everyone. Additionally, storing cryptocurrencies on a centralized exchange carries inherent risks, including the potential for loss due to hacking, exchange collapse, or other security breaches. We strongly advise that you seek independent professional advice before engaging in any cryptocurrency trading activities and carefully consider the security measures in place when choosing or storing your cryptocurrencies on a cryptocurrency exchange.
DOS NETWORK ($DOS) is a scalable layer-2 network that offers Decentralized Oracle Service that securely and reliably collects real-world data, event and computation power and delivers them to blockchain systems. Apart from allowing blockchains to interact with external data, the network also allows communication between blockchains.
In this guide, we take a closer look at DOS Network, its use cases, incentives to miners, architecture, as well as two of its main components.
Table of Contents
Background
The development of DOS Network was made possible by blockchain technology, with a special focus on smart contracts and decentralized applications (Dapps). At present, these two areas are seeing increased attention but with only a few tangible results. The DOS system seeks to contribute to the crypto space by commercializing Dapps and boosting large-scale adoption of smart contracts.
To do this, the project envisions a scenario where smart contracts can independently fetch internet data and activate web application programming interfaces (APIs). Additionally, the protocol’s background is hinged on making on-chain computations less expensive while improving scalability.
This would allow artificial intelligence model training, matrix multiplication, and 3D rendering, among other applications, to be commercialized while using smart contracts.
The whole project is supported by the DOS Foundation, along with several key partners including QuarkChain, BKEX, Ultrain, Meter SERO, IOST, and Enterprise Ethereum Alliance (EEA).
What is DOS Network?
DOS Network is a decentralized oracle service network meant to boost blockchain-based systems’ interconnection with real-world data. It is built as a scalable layer-2 protocol that offers decentralized data feed oracles.
What is DOS Network?
The protocol is also built to be chain-agnostic and completely decentralized. Therefore, it is compatible with all existing smart contract blockchains. This enables the DOS Network to function as a distributed computational oracle that is verifiable and usable by established blockchains such as Tron and EOS.
Furthermore, the network is also horizontally scalable, which means that the more nodes run on its system, the greater its computation power becomes. Being decentralized and designed with a crypto economic model, the DOS Network is resilient to sybil attacks and other cyber attacks.
Major parts of DOS Network
DOS Network Key Components
The DOS Network has two key components in its system: the on-chain and off-chain parts.
On-chain
The on-chain component deals with everything on the blockchain. It’s made of a set of the protocol’s contracts that handle computational result verification, node staking, payment processing, and other functionalities on supported blockchains.
For ease of use, the contracts have a uniform user interface across chains.
Off-chain
The DOS network’s off-chain system focuses on client software operated by third parties in search of economic rewards. The software is made of a blockchain adaptor module, off-chain group consensus modules, among others. Generally, the off-chain part has a distributed data feed and a computation oracle.
DOS Network Mainnet: Caelus
DOS Network Mainnet – Caelus
On July 10, 2020, the DOS Network Caelus mainnet officially went live. The mainnet brought with it real-time verifiable results, enhanced security, and scalability. In addition, the launch was accompanied by a blockchain explorer which allows users to query available on-chain information.
DOS Network: Use Cases
Bridging the gap between decentralized systems and real-world data leads to multiple enticing use cases. While the utilities for DOS are limitless, they can be summarized into:
Distributed Derivatives
A financial contract between individuals can be hindered by a lack of trust, especially on a decentralized platform. To promote stability, a smart contract takes care of a derivative’s short and long positions.
Although other projects like Decentralized Derivative Association are working on expanding the use of smart contracts on the derivatives market, DOS Network still has its place. The protocol can be used to securely access and feed the contracts with settlement values and price feeds.
Stablecoin External Data
In this context, Tether (USDT) is eliminated from the equation because it is issued by a centralized company and can be manipulated.
Here, we recognize the likes of DAI and kUSD, which are stablecoins pegged to an underlying asset. As a result, these currencies need systems like DOS Network to trustingly provide data, such as the current exchange rate of their underlying assets.
Decentralized Lending
Decentralized finance (DeFi) has added great momentum to decentralized lending. And to ensure a fair loan process, the DOS protocol can be used to provide market rates and monitor the equivalence between the amount loaned and collateral provided.
Also, it can be used to monitor the loan terms and activate liquidation.
Distributed Insurance
Insurance is one of the top sectors that would greatly benefit from blockchain technology. With projects like Etherisc looking into crop insurance, flight delay insurance, the DOS protocol can be utilized to feed them with the external data they require.
DOS Network enables policy underwriting and making payout decisions on decentralized insurance applications by providing the required external data.
Distributed Casino
With conventional casinos having up to 15 percent house edge, decentralized casinos are the answer to fairness, transparency, and near-instant payouts. But, with random number generation being at the core of every casino game, providing verifiable random numbers on blockchain systems is difficult.
To solve this, DOS Network can feed Dapps with verifiable and secure random numbers that are unstoppable, untamperable, and unbiased.
Decentralized Prediction Markets
This can be anything from election predictions to sports betting. Decentralized oracles provided by the DOS system can help solve these types of disputes safely and quickly.
Decentralized Computation Execution Scalability
The system can allow users to avoid costly on-chain computations and offer privacy to computing tasks. With low costs and private analyses, DOS Network can enhance scalability on Ethereum and other supported smart contract platforms.
DOS Token ($DOS): What is it?
DOS Network ($DOS) has a native virtual currency that follows ERC-20 standards. The token is used for both governance and incentivizing network participants. Participants on the network include Dapp developers, Node runners, and premium data providers. (https://nuttyscientists.com/)
The DOS token supply is hard-capped at one billion. DOS tokens was allocated for mining incentive (35%), ecosystem building (19%), community token promotion (1.5%), private sale (14.5%), team (15%), foundation reserve for marketing, legal, PR & etc (10%) and advisor (5%).
On Aug 17 2020, DOS Network has announced 2 improvements to the DOS token economy: liquidity rewards and token burning.
Liquidity rewards
The team will provide 100,000 DOS tokens every 7 days from the foundation reserve as liquidity rewards, of which 50% will be rewarded to the DOS/ETH pool on Uniswap V2 and 50% to the DOS/USDC pool on Balancer.
Token burning
Another 100,000 DOS tokens from the foundation reserve will be burnt every 7 days. Besides, staking interests incurred by foundational nodes (namely Gaia, Zeus, Hera, Ares, Athena, Apollo, Muses, Hades, Poseidon, Odin, Thor, Loki, and The Oracle of Delphi) will be burnt every 14 days and will not enter circulation.
The interaction of blockchain-based systems with real-world data is the key to explosive blockchain adoption. This can happen in sectors like insurance, casinos, prediction markets, peer-to-peer lending, DeFi, all thanks to the DOS Network.
Furthermore, allowing decentralized nodes to secure the network through a proof of stake-based system eliminates the need for highly specialized mining equipment, decreases the confirmation time, and increases the capacity of transactions.
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.
What is Crust Network?Crust Network implements the incentive layer protocol for decentralized storage. It is adaptable to multiple storage layer protocols such as IPFS, and provides support for the application layer. Crust’s architecture also has the capability of supporting a decentralized computing layer and building a decentralized cloud ecosystem. At present, public testnet Maxwell CC2 is live, and everyone is welcome to participate in the testnet. Crust Network successively joined Substrate Builders Program and Web3.0 Bootcamp, and also obtained a Web3 Foundation Grant.
Who is Leo Wang? Leo is the Co-Founder of Crust Network, leading products and technologies. Leo is experienced in distributed storage, cloud computing and blockchain areas. Leo worked in Microsoft and Cisco as their Development Lead. In Cisco Leo also led a blockchain-based project to store and exchange manufacturing data in different geo-locations.
This video is aimed at all levels of cryptocurrency enthusiasts so feel free to ask Leo your burning questions about Crust Network and this space in general.
I will personally be giving out prizes for the best 3 questions. To ask a question, leave a comment in this post below!
Event Time: 17th September 2020 at 3:00am (UTC)!
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. (Clonazepam) 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.
This article is for information purposes only and is not intended to comment on the viability of FalconSwap (FSW). As with any cryptocurrency projects it involves a huge amount of risk. Anyone intending to participate should do full research and consider carefully the risks involved beforehand.
FalconSwap ($FSW) is a layer-2 scaling solution built on Uniswap and further extendable to aggregate other Decentralised Finance (DeFi) platforms like Mooniswap, Kyber, Balancer, Airswap, and Bancor. It aims to solve the ongoing issues in the Ethereum ecosystem like high transaction fees, slippage in trading, lack of privacy, slow transactions, and poor user experience.
Summary
The platform promises to offer features like Layer-2 Order Matching, DEX Aggregation, Lower trading fees, Low Slippage, Additional Privacy, and Faster Transactions.
The FalconSwap (FSW) tokens are designed to incentivize token holders and platform users by offering Fee discounts, Staking rewards, Token burns, and Liquidity mining features.
Potential Red flags include lack of a Whitepaper and roadmap, no public Github profile, an anonymous Team, and Investor uncertainty.
Can the team overcome these hurdles to capture market share from the existing players and establish themselves as the go-to solution for Ethereum scaling?
What is FalconSwap trying to solve?
DeFi platforms have gained immense traction in the 3rd quarter of 2020. As per data from DeFi pulse, the total value locked in DeFi protocols has surged from close to USD$1 billion in June to $9 billion in September. Uniswap has emerged as the most sought-after platform to trade and swap digital assets on the Ethereum blockchain. On August 30, 2020, Uniswap became the first decentralised exchange (DEX) to overtake the biggest US-based crypto exchange, Coinbase.
However, as the DeFi community continues to push their activity beyond network limits, congestion on the network has led to an increasing number of unconfirmed transactions, longer wait times, and higher fees as users compete to get their transactions confirmed faster, making it an extremely crucial roadblock for the future of Ethereum as a smart contract platform. Ethereum Gas fees have skyrocketed in recent months with over 5,869 ETH (US$2.17 million) spent as per the latest data from Glassnode, with fees as high as 15,374 ETH (US$ 3.5million) recorded on June 11, 2020.
Ethereum total transaction fees as at August 02, 2020
There is therefore an immediate need to solve the Ethereum scaling issue to enable users and projects make the most of the growing DeFi ecosystem. This is where FalconSwap aims to provide a solution.
FalconSwap overview
Calling itself the “The Powerhouse for DeFi”, FalconSwap operates as a second layer solution on Uniswap and other DeFi platforms. It aims to solves the ongoing issues of high transaction fees, slippage in trading, lack of privacy, slow transactions and poor user experience in the Ethereum ecosystem. This it plans to do by offering the following features:
Layer-2 Order Matching: Orders are matched in Layer-2 and aggregated before accessing the liquidity from Uniswap pools.
DEX Aggregation: Orders are aggregated across multiple liquidity pools like Uniswap, Mooniswap, Balancer, Kyber, and so on.
Lower trading fees: Aggregating orders distribute the transaction fees across multiple users thereby lowering fees per user.
Low Slippage: Aggregating platforms provide a larger liquidity pool to execute orders thereby lowering slippage in trading.
Privacy: Layer-2 orders matching occurs without on-chain knowledge of the trade.
Faster Transactions: Faster transactions powered by the aggregating and executing of several trades in Layer-2.
To understand this better, let us assume there are 3 buyers buying 2 ETH, 3 ETH and 5 ETH worth of tokens respectively, and 3 sellers selling 6 ETH, 6 ETH and 8 ETH worth of orders respectively.
Using the current trading approach on Uniswap, every user would pay for their own gas fees and the total fees spent would be 6x the gas fees per order. User might also experience transaction slippage and even higher fees if their orders are distributed among multiple liquidity pools.
However, when the above-mentioned trades are placed and executed on the FalconSwap platform, the protocol would aggregate 6 orders matching the 10 ETH worth of buy orders with 10 ETH worth of sell orders. The remaining 10 ETH worth of sell orders will then be sent to Uniswap or distributed among different liquidity pools. This would help optimize gas fees per user and minimise slippage.
FalconSwap token ($FSW)
FalconSwap tokenomics are designed to incentivize users and token holders in the following manner:
Fee discounts: FSW token holders get additional fees discount of up to 50% to use FalconSwap over and above the fee savings from Layer-2 trade execution.
Staking: A part of the fees collected from the FalconSwap protocol will be used to buy FSW tokens from the market and distributed to the FSW token staking holders.
Token burn: FSW is a deflationary token. 10% of the fees collected will be used to buy FSW tokens from the market and burned.
Liquidity mining: Users mine FSW tokens when they trade on FalconSwap.
As at September 4, 2020, FSW token ranks 381 out of 5890 coins listed on CoinGecko. The current token circulating supply is 33 million with a max supply of 100 million. The FSW Token are currently available for purchase on Uniswap V2 (ETH/FSW) and Hotbit exchanges.
FalconSwap testnet results
On August 27, 2020 the team reported successfully completing their first milestone, which was to build a decentralized protocol to aggregate orders on Uniswap and publicly shared the test net results with the community. As per the results, trading on FalconSwap offered Gas savings of approximately 64% per transaction when compared to Uniswap.
FalconSwap has several aspects to it which makes us question the legitimacy of the project, for example, the lack of whitepaper and Github. We also have concerns about the fact that the team is anonymous and queries whether they are indeed backed by the investors as claimed. Concerning these questions, we contacted the FalconSwap team and they were kind enough to promptly respond. Below are details of our concerns on FalconSwap and the response from the team.
No whitepaper
Undoubtedly the most important document for any upcoming project is a detailed and structured whitepaper with a clear road map for potential investors. It is the first litmus test a project needs to clear to be considered trustworthy. FalconSwap has not yet published its whitepaper to the community.
According to the team, there is no white paper because the team is already aiming to launch the final product by the end of September 2020 and have partnered with companies like DEX Tools for initial liquidity mining, trading, and integrations. The roadmap is set to be presented along with the product launch.
No Github
Most projects today have an active Github profile where they regularly provide updates to the progress on their code for peer review and fault identification by the community. FalconSwap doesn’t have any such public Github profile. As to this issue, the FalconSwap team says that their GitHub has not been made public so they can have an edge on competitors and avoid their code being copied. However, it will also be made public post product launch.
Anonymous team
Another potential red flag is that the team is anonymous. To be fair, there are some projects where teams opt to stay anonymous due to the threat of a potential government crackdown or operational risk. (Xanax) However, these projects overcompensate by being transparent on all the other aspects of their projects to magnify trust, which FalconSwap currently lacks. When we asked the team on this, they responded that they decided to stay anonymous to avoid any adverse effect on operations.
We note that whether investors or partners mention FalconSwap on their website or not is beyond the control of the FalconSwap team. From our further research, we note that TRG Capital Director Etienne VantKruys tweeted about FalconSwap. We also note that some of the FalconSwap community members did their own research and emailed investors to confirm the veracity of their partnerships with FalconSwap. It was confirmed by those Community members that they got positive responses.
Closing thoughts
FalconSwap clearly has identified an important issue plaguing the Ethereum ecosystem. Their Layer-2 transaction aggregation solution might be one of the best answers to scale Ethereum and lower fees. The team therefore has a very small window to bring the product into the market since the Uniswap team are also working on their Layer-2 solution expected to be launched later this year.
Moreover, healthy competition is expected from the newly launched Polkadot protocol which already enables cross-blockchain transfers of any type of data, asset, or tokens along with transactional scalability by spreading transactions across multiple parallel blockchains. Ethereum itself could scale very soon, unclogging the network, lowering fees and boosting transaction speed, leaving very little incentive to use the FalconSwap platform in the future.
However, if the team delivers by launching the platform within the promised timeline and make the code publicly available to the community, it can surely capture significant market share from the existing players, gain community trust and establish themselves as THE go-to solution for Ethereum scaling.
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.
Bella Protocol ($BEL) provides a suite of decentralized finance (DeFi) products, allowing users to access existing DeFi protocols. It is the first project to be hosted on Binance’s Launchpool platform. Launchpool is a brand-new initiative designed to bring the DeFi experience to Binance users. Users can stake their crypto holdings, including ARPA, BNB and BUSD, in return for rewards in newly-listed tokens, of which BEL is the first one offered.
The team behind the protocol is led by Co-founders Felix Xu (CEO) and Yemu Xu (CGO). Felix has been active in the cryptocurrency scene since 2018 while Yemu bought his first Bitcoin (BTC) in 2016 and has never looked back. Before creating Bella, the CGO had held notable positions at Fidelity Investments, which has $3.3 trillion of assets under management, and Boro, a fintech startup.
Furthermore, Yemu has links with ZhenFund, a reputable venture capital firm in China. Other team members include individuals with a rich background in blockchain engineering, cryptography, and finance.
In 2019, the team got into DeFi by providing liquidity to various lending platforms and decentralized exchanges (DEXs). However, the team identified inefficiencies that it took upon itself to solve.
Their motivation comes from the realization that the DeFi market:
Is worth trillions of dollars.
Has a low adoption rate.
Charges a ton in transaction fees.
Struggles with a system of earning rewards.
Has limited interaction between DeFi and centralized finance (CeFi).
Lacks mobile-friendly products.
And to add, DeFi products use smart contracts, which is still a foreign subject to most people.
What is Bella Protocol?
Bella Protocol is a network of open financial tools that aim to boost the adoption and ease of use of DeFi systems while throwing in a banking aspect into it. The network’s main offerings include a customized robot-type advisor, a lending protocol, a yield farming tool, and a savings account. The system claims to take conventional mobile banking “into crypto with just 1-click.”
The one-click is brought about by packaging complicated ideas into simple, actionable plans via automation.
With Bella, DeFi users can comfortably conduct yield farming without having to jump between protocols. The network relies on complex arbitrage methods as the team behind believes they will see DeFi users grow tenfold.
Bella and its co-founders have a deep connection with ARPA, a layer-two distributed system built on top of Ethereum. A part of its functions includes asset custody and inter-chain operability. Bella is meant to push ARPA’s vision forward by being at the core of the DeFi revolution.
As such, Bella’s early supporters and users come from the ARPA community with a global presence. The community is spread across various social media platforms such as WeChat (over 40,000 people), Weibo (52K+ followers), Twitter (20K+ followers), Telegram (15K+ members), among others. ARPA is listed on Bithumb, Kucoin, Binance, Gate.io, Huobi Global, among other exchanges
Bella Protocol key partners
The project is backed by key partners such as Binance, Arrington XRP Capital, AlphaBit, and The Force Partners.
Major Bella Tools
Bella Lending
Bella Lending supports tokens used in liquidity pools, carries a referral bonus, and powers yield farming and liquidity mining. Generally, it acts as a distributed and flexible money distribution point.
Bella 1-click
With a single click, the protocol brings DeFi features to a central point. Interestingly, it lowers gas fees to zero and acts as a smart portal.
Bella Robot-like Advisor
A robot is a program that takes large amounts of data and computes the most probable outcome. For Bella, a robot calculates the risks and provides a tailored exposure to stablecoins capable of bringing yields during farming, among other user-focused customizations.
Bella Flex Savings
Here, the system’s users are exposed to arbitrage strategies capable of earning the highest rewards in yield farming. Flex Savings accommodates multiple stablecoins and virtual currencies. However, these strategies are based on a user’s risk level. For instance, if a user stakes USDT, 40 percent can be used to farm yields on Compound (COMP), 40 percent on Curve Finance (CRV), and 20 percent distributed to newer protocols.
Between Q4 2020 and Q3 2021, the network will see the launch of the 1-click protocol, Flex Savings, Lending tool, and conduct more user growth campaigns, as well as add other features.
Bella Token ($BEL)
The protocol uses a native currency, BEL, to tackle voting and governance issues. The token is designed using Ethereum’s ERC-20 standard.
The token is used for fee collection, rewarding its holders, and staking. BEL has a hard cap of 100 million tokens. The tokens are distributed among the Binance Launchpool (5%), auction (2%), private sale (6%), ecosystem (18%), reserve (4%), user growth (40%), staking (10%), and the team (15%).
Rewards for BEL stakers come from the management fee charged by the protocol for its products. Apart from staking, BEL tokens can be used to take interest instead of receiving rewards in the token invested. For instance, Flex Savings’ users who have deposited USDT and earned an interest of 1,000 USDT can opt to receive the interest in BEL for a bonus.
Binance Launchpool
Bella Protocol (BEL) is first project to be hosted on Binance Launchpool. Users will be able to stake their ARPA, Binance Coin (BNB), or Binance USD (BUSD) tokens into three separate pools to farm BEL tokens, starting from 20/09/09 0:00 AM (UTC) to 2020/10/09 0:00 AM (UTC). On 2020/09/16 6:00 AM (UTC), Binance will then list BEL and open trading for BEL/BTC, BEL/BNB, BEL/BUSD and BEL/USDT trading pairs.
Bella Protocol will be on Binance Launchpool
BEL Launchpool Details:
Token Name: Bella Protocol (BEL)
Private Sale Token Price: 1 BEL = 0.75 USD
Launchpool token rewards: 5,000,000 BEL (5% of Total Token Supply)
Total Token Supply: 100,000,000 BEL
BEL staking period
Supported Pools:
Stake BNB: 4,500,000 BEL in rewards (90%)
Stake BUSD: 450,000 BEL in rewards (9%)
Stake ARPA: 50,000 BEL in rewards (1%)
Users can go to Binance Savings page to stake their tokens. Just click on the BNB, BUSD or ARPA flexible savings products with a “Launchpool” label. (Diazepam) For more information, please refer here.
Binance Savings Page
How to calculate the amount of BEL tokens you will get?
Staked BNB, BUSD and ARPA balances will be recorded each hour for 30 days after the staking period begins to get an average daily staking balance for each day. Rewards allocated to each pool will be split evenly every day over the 30 day period.
Calculation for BNB pool stakers:
5,000,000 x 90% / 30 = 150,000 BEL tokens per day
Each participant’s rewards will then be calculated every day based on their ratio of BNB staked compared to all BNB staked in each pool.
Example:
User A: Stakes 5,000 BNB for 12 hours on thefirst day
Average amount of BNB for all users (across 24 hours): 100,000BNB
Calculation: ((5,000 x 12 / 24 ) / 100,000) x 150,000 = 3,750 BEL tokens
Conclusion
The DeFi scene continues to witness increased activity from users and developers alike even if the adoption rate is quite slow.
For traditional investors to join the space, there needs to be a clear and robust connection between DeFi and CeFi. One way to bring this connection is through products like Bella that bring a familiar offering to those rooted in conventional financial methods.
Bella’s mobile-friendly products, such as tools for yield farming, lending, savings, and a customized risk assessment Robo-advisor, are the key to driving the mass adoption of DeFi. Furthermore, a smooth user experience, as well as the utility and incentivization of BEL tokens also adds value to the protocol, which in turn, helps speed up adoption.
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.
0x ($ZRX) is an open protocol for developers to build their own decentralised cryptocurrency exchanges on the Ethereum blockchain. 0x came about as an answer to the problems inherent in centralised exchanges (CEX) and decentralised exchanges (DEX). For CEXs, approximately USD $1.1 billion has already been lost through security breaches on these platforms. Thus cryptocurrency enthusiasts have become wary for fear of losing their funds. Decentralised exchanges were meant to be an answer to this, but they have also issues of increased friction and increasing transaction costs. In this guide, we will explore what 0x is already offering in today’s market, and take a look at their recently released version 3 of the protocol.
Background
0x is a brainchild of its CTO, Amir Bandeali, and its CEO, Will Warren. Other key individuals behind the project include their blockchain engineers, product designers, researchers, and business strategists. They also have a strong list of advisors including Fred Ehrsam, Co-founder of Coinbase and David Sacks, former COO of PayPal.
What is 0x?
0x is a protocol built on the Ethereum blockchain to create and power decentralized exchanges. Its aim is to be interfaced with other systems to power high-end decentralized applications (dapps).
The protocol seeks to inspire the movement of assets across the financial sector by eliminating third parties that have been making the process complicated and costly. The presence of smart contracts has also helped push third parties further to oblivion.
The advent of DEXs comes to safeguard users’ funds and prevent government censorship. These exchanges place the security of users’ funds onto the users themselves instead of trusting centralized platforms, which are prone to hacks.
Due to the Bitcoin blockchain scalability issues and lack of smart contract flexibility, dapp developers have flocked to Ethereum to build decentralized solutions such as exchanges. Unfortunately, with everyone looking to build a specialized dapp, Ethereum has been flooded with applications that cannot communicate well with each other.
Furthermore, these applications have varying degrees of security and quality. 0x came to solve this user fragmentation issue, as well as reduce the cost of using dapps.
How does 0x work?
Although it is built on top of Ethereum, its orders are dealt with off-chain as relayers are used to match the orders. The orders are only uploaded on the Ethereum blockchain after the process is complete. Off-chain signing reduces the amount of gas used in a particular transaction while also reducing the load on the main chain.
A relayer on the platform can be thought of as a decentralized exchange that has both public and private order books. Orders are broadcasted through these order books to make a suitable match.
Apart from reducing the gas fees involved, this approach also allows users to have control over their funds. An important feature of a relayer is that it only facilitates but does not conduct trades.
To allow this, the relayer needs to be supplied with the order maker’s signature, which is then delivered to the DEX’s smart contract. Relayers are rewarded using the protocol’s native token, ZRX, though this has been changed along with several other features in version 3 of 0x.
0x version 3: A new protocol with enhanced features
In August 2020, the decentralized protocol released a new version 3 that enables users to develop a more interconnected DeFi ecosystem. There are 3 major upgrades in this new version: staking ZRX tokens, liquidity bridges and flexible fees.
0x staking features
Version 3 of 0x introduced a staking mechanism which allows trading fees to be accepted in any token. Market makers that provide liquidity are seen as crucial for 0x’s long-term growth since they bring in liquidity. Hence a new staking feature was introduced whereby market makers on 0x are given monetary rewards. This means that any ZRX holder can join a market maker’s staking pool and be entitled to a share of the liquidity rewards. Meanwhile, it is in the best interests of the market maker to entice stakers to join their pool because it increases their potential liquidity rewards payouts and their voting power on governance issues since stakers are required to delegate half their voting power to the market maker.
Liquidity bridges
Liquidity bridges is an exciting upgrade for decentralised finance (DeFi) developers who are building dapps that will benefit from accessing more liquidity. This is because the feature will enable them to source liquidity not only from the 0x network itself, but other DEXs such as UniSwap or Kyber from a single point of integration, known as 0x API (more on that below). In short, allowing users access to liquidity in other DEXs, thereby ensuring that orders are being filled to reach higher volumes, and thus attracting even more users onto the platform.
Flexible fees for Relayers
Previously, 0x only allowed Relayers to receive fees in ZRX only. This was problematic because sometimes Relayers may not want to receive fees in ZRX. It also led to a poor experience for Relayers since it created more additional steps in DEX trading, for example one of the largest 0x DEXs by volume didn’t have fees. And there is speculation that this is because of the limited ways in which fees could be paid out. This has been fixed in version 3, where Relayers can choose to have their fees paid in any Ethereum-based token or even in the token currently being traded.
ZRX Token: What is it?
The ZRX token is built based on Ethereum’s ERC-20 standard. Apart from being used to pay relayers for facilitating trades, it is also utilized for governance on the 0x protocol. In line with this, the amount of ZRX held determines the power a governor has when contributing to governance issues such as protocol upgrades.
The ZRX token supply is hard-capped at one billion. During its launch in 2017, half of the tokens were released and distributed to developers (15%), 0x (15%), founding team (10%), and advisors (10%).
ZRX is listed on Binance, Coinbase, Huobi, HitBTC, and other leading exchanges. For storage, the token is supported by Ledger (both the Nano X and Nano S), Enjin, Exodus, and any other cryptocurrency wallets primed for ERC-20 tokens.
As mentioned above, the 0x team has recently introduced staking features for ZRX which gives more incentives for both liquidity providing market makers and ZRX holders.
Other products powered by 0x
0x has a whole suite of products aside from its open protocol. These are:
· 0x Instant– This offers a way to buy cryptocurrency on any app or website.
· 0x mesh – Allows access to a global P2P order book for tokens.
· 0x API – Can be used to accumulate liquidity from platforms built on the protocol such as UniSwap, and Mesh. It can also be used to swap tokens based on price.
· Matcha – A platform to find the best prices across exchange networks.
· 0x Extensions – For use with relayers to incorporate new trading types.
· 0x OTC – This is a consumer-basedexchange that allows for a P2P exchange of ETH tokens without a relayer. Unlike the other P2P exchanges, 0x OTC enables the seller to send a link to the buyer on any platform, including social media, and its results are recorded on the Ethereum blockchain.
Even with numerous advantages, the protocol uses multi-signature smart contracts that could be exploited since they are still based on code. Also, since the DEXes are still a work in progress, they may not have the liquidity needed to fill orders for lesser-known tokens.
Conclusion
As blockchain technology matures, so should the applications run on top of it. However, as more dapps flood the scene, we need a standard quality and security setting to ensure that these systems operate as they are intended. Thankfully, with 0x, the standard is already set.
Furthermore, dapp developers also need to embrace the system for users to benefit from low transaction fees.
The 0x protocol can be used in prediction markets such as sports betting, which require untampered results of outcomes of physical events.
The platform’s vast use cases are also capable of bringing real change in the decentralized world while leveraging off-chain mechanisms to drastically enhance scalability.
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.
OIN Finance ($OIN) devised a way to build a Decentralised Finance (DeFi) project that seeks to deliver what most Ethereum products can too, but on a different blockchain — the Ontology network. This can potentially solve issues of blockchain congestion and rising gas fees which recently is a cause for concern and a real obstacle to mass adoption.
As the first DeFi project running on Ontology, it is interesting to know what they have done and what they have in store in the space in the months to come.
Renard Zhang, CEO of OIN Finance and his team began the project with a three-pronged mission of promoting DeFi, becoming a gateway for DeFi, and helping it grow into a more mature market. The team helped recreate the developments of the decentralized technology from the Ethereum ecosystem into the Ontology blockchain.
What is OIN Finance?
OIN Finance is a DeFi ecosystem focused on providing a liquidity pool lending platform on top of the Ontology network. Its purpose is to create a cross-chain interoperable platform for services like lending, borrowing, swapping, and minting of stablecoins.
With OIN, users can add liquidity on their own decentralized exchanges (DEX) and build their own market makers through OINSwap. Another project inside the OIN ecosystem is OINLend, where users can make loans or borrow cryptocurrency assets.
Other services available in the ecosystem are OINWallet, OINDAO, and the USDO stablecoin. Through OIN’s bridge technology, these services built on the platform can be accessible to the Ethereum community, as well.
For now, OIN is focusing on building the Ontology network to provide low-cost services while avoiding the congestion problems that users experience in the Ethereum blockchain, more so recently. Once the project has a strong enough user base on the ONT DeFi platform, they can move to scale the project further.
The road ahead for OIN is to first build a community of early adopters and give them an opportunity to be a part of the initial pool of stakers. Then, it can be made available to the larger public.
Cross-chain interoperability
OIN’s architecture enables the growth of not only its own platform but also the whole DeFi space, by linking several blockchains together. Its cross-chain design opens up the platform to other existing networks to expand offerings to a vast number of users.
Decentralization
By adopting Tendermint’s consensus algorithm, nodes can function without any problem whilst trying to achieve consensus. And through its own stablecoin, there are enough incentives for nodes to continue securing and maintaining the health of the network.
Data Security
OIN uses Merkle proof to secure the data of its users. In such a set-up, any information on actions initiated on top of the Ethereum blockchain will be kept in a secure line of codes so they cannot be written back to.
OIN Finance’s Services
OINSwap V1 Pool
OIN will launch the first DEX on Ontology, enabling Ontology users to conveniently trade their ONT tokens with the tokens supported by OIN. The swap pool powers the whole DEX while its prices are determined by prevailing market conditions. V1 and V2 pools are currently in the works and there is no official launch date yet.
OIN swap v1 pool
OINSwap V2 Pool
As soon as the cross-chain bridge is successful, and ERC-20 assets can run to and from the Ontology network, they can begin the operation of OIN Swap’s V2 pool. In here, OIN tokens are used to reflect the value of some tokens into OIN Swap.
OIN Swap v2 pool
OIN Wallet
OIN Wallet can be used to store tokens supported by the Ontology and Ethereum network. As soon as the second phase of the project is completed, which is to successfully run the Ontology-Ethereum bridge, OIN wallet can be able to access other Ethereum-based DeFi projects. These are protocols such as Curve, Balancer, or Compound.
OIN wallet
USDO
USDO is the stablecoin of the network, pegged to the US Dollar. It is the first decentralized stable token built on top of Ontology. USDO is backed by Ontology’s native token, ONT.
The stablecoin can be used to deposit into OIN Swap or OIN Lend pool to gain profits from staking and liquidity mining.
$OIN Token
OIN token is the native asset of OIN Finance. It will be utilized as the governance token, as well as for collateral rewards and clearing compensation.
Through OIN token, the platform implements a community governance model to manage operations. Elaborately, the token can be used to pay for transaction fees, staking, or community voting.
OIN token is hugely popular. The public sale of the token was around 50 times oversubscribed and was launched on Uniswap and Bitmax and BiBox on 3rd September 2020. Those lucky few that were able to get into the public sale, purchased their OIN tokens at USD$0.08, and considering prices of OIN at the time of writing is almost USD$1, these holders have every reason to be ecstatic.
OIN DAO
OIN DAO also has the ability to issue USDO. Since USDO is collateralized by ONT, it has its own pool in the Ontology platform. Those who have ONT can mint USDO at an initial collateralization rate of 300%.
The clearing mechanism (similar to how liquidations work in MakerDAO) kicks in if the collateralization of the USDO drops below 180%. But if users do not wish to borrow or lend USDO, they can send them over to OIN Swap or OIN Lend to do liquidity mining.
OIN Lend
Lending is decentralized on the OIN platform. Through smart contracts, both lenders and borrowers can safely deposit tokens to become underlying assets on the platform. Then, OIN chooses between different tokens supported by the Ethereum and Ontology network to mint OIN tokens at a specific exchange rate.
A minimum over-collateralization of 150% is required for loans, similar to other DeFi lending protocols. The interest fees are determined automatically by smart contracts based on different market factors such as supply and demand.
Interests are accumulated per block and a portion of it is kept in the reserves. This is to allow lenders the option of withdrawing their token deposits should they wish to do so.
OIN Chain
OIN Chain is a layer built on top of the OIN platform designed to support the cross-chain interoperability feature of the protocol. This will help integrate Ethereum’s DeFi projects to also supply more assets in the Ontology network. (nelsongreerpainting)
It will be a multi-functional adaptor that will bridge both Ethereum and Ontology, as well as more public chains in other developments ahead.
Liquidity Mining and Staking
Half of all the OIN token supply is generated from liquidity mining and staking. The supply created via stakers will be derived from USDO collateral pools collected in the OIN DAO and OIN Lend platforms.
OIN tokens that are created by way of liquidity mining will be injected in the OIN Swap pools. Once the OIN Lend pool is made available with its cross-chain architecture in place, ERC-20 compliant tokens can be staked too.
Exactly 40% of all minted tokens are distributed every day via staking rewards, while the remaining 60% will be distributed as liquidity mining rewards. Through OIN DAO, the community can decide how to shift the ratio of the daily reward allocation for the network.
Conclusion
As one of the pioneers of DeFi on the Ontology network, the outlook for OIN Finance appears increasingly positive, especially with Ethereum’s rising gas fees. While the number of DeFi projects launched on the Ethereum blockchain increases daily, whether they can continue to sustain their operations continues to be a prevailing concern.
Establishing a successful proof of concept on top of other platforms for DeFi projects can be helpful for the community and whole crypto space at large. After all, it only adds more options for users to explore the services that fit their needs best.
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.
Aave Protocol with their native token $LEND is a leading company within the decentralized finance (DeFi) sphere. The Company allows its users access to its open-source and non-custodial protocol to create money markets, joining a growing list of projects like Compound to bring decentralized options to the masses. We look at who is Aave ($LEND), its uses and how it differs from other projects such as Compound Finance.
What is Aave?
Named after the Finnish word for “ghost”, London-based company Aave was set up in September 2018 after a successful initial coin offering (ICO) the previous year for its ETHLend token which raised USD$16.2 million. The executive team under ETHLend migrated to Aave upon its establishment with ETHLend becoming a subsidiary of Aave. In January 2020, ETHLend announced it was no longer in operation and its website would only remain active for current users to close down their existing loans.
Aave’s aim is to fill in the gaps left by centralised fintech industry giants like PayPal, Skrill and Coinbase. Their main product is Aave Protocol, an open source and non-custodial protocol for creating money markets on the Ethereum blockchain.
Who is the team behind Aave?
Aave has a wealth of talent and experience within its team. Stani Kulechov (CEO) and Jordan Lazaro Gustave (COO) have retained and migrated their roles from ETHLend, bringing their wealth of knowledge to Aave. Their diverse 18 man team bring together a wealth of experience in the startup scene.
What is Aave Protocol?
Aave’s biggest and most integral aspect is Aave Protocol which was launched in January 2020. Its shift from ETHLend marked a significant shift in strategy for the Company. Going from decentralized P2P lending to a pool-based strategy, Aave Protocol is an open source an non-custodial protocol that allows users to create their own decentralized money markets on the Ethereum blockchain.
Aave Protocol
Depositors provide liquidity by depositing cryptocurrencies into lending pools which will then allow them to earn interest. Meanwhile, borrowers can obtain loans by tapping into these lending pools in either an overcollateralized or undercollateralized way. The loans do not need to be individually matched i.e. one lender to one borrower. Instead, deposits into the pool and the amounts borrowed/ collateral are used to make instant loans based on the pool’s state. There are currently 2 money markets that users can enter into, these are Aave and Uniswap.
Aave markets
Flash Loans
Aave has one feature that sets it apart from the rest. Flash loans allow customers or to take out loans without any collateral. These flash loans enable a customised smart contract to borrow assets from Aave’s reserve pools within one transaction. The loan is made on the condition that the liquidity is returned to the pool before the transaction ends. However, if it’s not repaid by that time, the transaction gets reversed- which will effectively undo any actions executed until that point and guarantee the safety of the funds in the reserve pool.
The Fast Loan feature is designed for developers to make tools that require capital for arbitrage, refinancing, or liquidating purposes. Aave explained Flash Loans saying it is “designed for developers/people with some technical knowledge”, with the benefit of risk-free loans. Aave charges a 0.09% fee on flash loans.
Rate Switching
Rate switching is another unique selling point for Aave, which arrived during the May upgrade of their borrowing/interest rates. Rate switching allows borrowers to switch between fixed and floating interest rates, something useful in a volatile decentralized market. For high-interest rates, users will usually opt for the fixed-rate but when it is more volatile and expected to be lower, one might go for the floating option to reduce borrowing costs. The fixed-rate can change but only when the deposit earning rate increases above the fixed borrow rate as the system could get unstable by paying out more than its being paid. If so, the fixed rate is rebalanced to the new stable rate. On the other hand, when the variable rate is lower than the fixed-rate by 20%, the loan will automatically decrease to account for the difference.
Which Cryptocurrency Tokens are linked?
There are 19 tokens available on Aave. These include DAI, USD Coin (USDC), TrueUSD (TUSD), USDT Coin (USDT), sUSD, Binance USD (BUSD), Ethereum (ETH), Basic Attention Token (BAT), Kyber Network (KNC), ChainLink (LINK), Decentraland (MANA), Maker (MKR), Augur (REP), SNK, Enjin Coin (ENJ), REN, WBTC Coin (WBTC), Yearn.finance (YFI) and Ox Coin (ZRX).
Please note: Each asset has a different collateral requirement. This is because of the differences in price volatility. Stablecoins naturally give loan-to-value ratios, due to their price stability. A full breakdown of Aave’s grading process can be found in their Risk Framework.
Alongside these tokens, there is also a native token that Aave uses and which is called Lend. An explanation and analysis of the token can be found below.
LEND ($LEND) Token
Often referred too as ETHLend, the LEND cryptocurrency token has rolled over to become the native token of Aave following the winding-up of operations by ETHLend in January this year. Although it has kept the name, the new Aave version of Lend is largely different from the previous one.
Built based on the ERC-20 standard, $LEND tokens can be used for fee reductions. The tokens are burnt from the fees collected from the Aave Protocol, with around 80% of platform fees used. This appears to suggest that Lend tokens will be worth more over time. LEND owners can also claim on protocol fees in exchange for acting as the first line of defense in the case of liquidity events by malicious borrowers.
In addition, $LEND tokens can be used for voting on Aave Improvement Proposals (AIPs). What’s more, LEND holders can vote with their LEND deposited on the Aave platform, even if it is currently being used as collateral. Currently, this feature is pre-launched on the Ropsten test network before it is launched on the Ethereum mainnet. This is so the Aave community can vote on proposals without incurring huge gas costs, try out the module and provide feedback to the Aave team before it is formally launched. It is also worth noting that the outcomes of all votes on the testnet are not considered as valid for the long term.
Voting on Aave
How to lend on Aave
Depositing and earning interest on Aave is a simple process. Before you start, you must visit https://app.aave.com/ and connect using a web 3.0 wallet such as Metamask, Coinbase Wallet or Fortmatic.
Depositing is easy, just simply pick your desired asset in which to invest and then allow Aave access to the asset. Once the transaction is processed, and the interest rate is confirmed you can check the rate changes on the Aave app. The interest-earning tokens are called aTokens which are similar to Compound’s C tokens.
Interest generating tokens
There are some differences between Compound’s tokens and the aToken. The main one being that the aToken’s keep their underlying assets price and will increase the amount of owned tokens when the price goes up rather than increasing the tokens price.
Aave vs Compound ($COMP)
Both Compound Finance and Aave appear to be the two top DeFi lending platforms. However, both have unique features that set them apart. Compound does have USDT as a usable asset, but Aave has a wider range of tokens on offer. For Aave, their new interest rates and regulations, like rate switching gives them a slight edge. For first time users, Aave offers great incentive rates. However, lending rates and Borrow fees are higher on average with Aave. Either way though, Aave has proven a good addition to the Defi community and should prove popular. You can read more about Compound ($COMP) here.
Key features of Aave 2.0
Aave 2.0 was announced on 14th August 2020. Aave Market now offers 19 assets, plus the Uniswap Market offers different Uniswap pairs as collateral. The platform has also grown to over 15,000 users. Here are some of the key new features which can be expected in Phase 2 of Aave.
Pay with collateral
Currently, if users want to repay their loan with part of their collateral they need to do 4 separate transactions on several protocols: withdraw the collateral, buy the cryptocurrency which is borrowed, repay the debt and unlock all the deposited collateral. With this new function, Aave users can deleverage or close their positions by directly paying with collateral in 1 transaction.
Debt tokenization and native credit delegation
Users’ debt positions will be tokens i.e. users will receive tokens which represent their debt. This enables native credit delegation within the Aave Protocol, in addition to other features such as native position management from cold wallets and user-specific yield farming strategies.
Fixed rate deposit
Deposits on Aave can generate predictable interest rates which are not bound by market variations.
Improved Stable Borrow Rate
This will further ensure the predictability of interest rates by locking down their borrow interest rate to a specified time period.
Private markets
Aave will allow governance to open private markets to open private markets to support all types of tokenized assets. The Aave team are also working on a collaboration with RealT which will bring mortgages onto Ethereum.
Improved aTokens
aTokens are Aave’s interest bearing tokens which are minted when a deposit is made and subsequently burned when redeemed. The aToken is pegged 1:1 to the value of the underlying asset deposited with Aave. In Aave 2.0, there will now be a version 2 of the aToken which integrates the EIP 2612 which allows for gasless approvals.
Gas Optimizations
This feature is currently in the works and will lead to a significant drop in transaction costs for most of the interactions on Aave. For some interactions the gas cost may even be reduced by 50%. Aave version 2 will also implement native GasToken Support.
Security
In version 2, the internal design has been made simpler, the architecture is also improved so it is more formal verification friendly. Aave is also working with top auditors such as Consensys Diligence and Certora- a leading company in automatic verification technologies.
Native trading functionalities
Aave v2 will introduce the ability for users to natively trade their debt position from one asset to another, i.e. you can borrow DAI, and if USDC becomes cheaper to borrow, you could change your debt position to USDC in one transaction.
Users can also trade their deposited assets across the various cryptocurrencies supported by Aave, even when it is being used as collateral.
Margin trading is also introduced in version 2, so users can directly take long and short leveraged positions without using third party services. Conversely with margin lending, liquidity providers can increase the weight of their deposits to take opportunities.
Governance
Aave version 2 also introduces several new governance features. Now, AAVE token holders can delegate their voting weight to any other address. Aave believes this may lead to the emergence of Protocol Politicians, who will represent the interests of their peers to delegated their votes to them. But unlike most representative democracies we see around the world today, vote delegation is a liquid democracy so this means a user can instantly remove the delegation in a single transaction if they so wish.
The Aave team also recognises the pain points of the need to move tokens to another location to participate in governance. So Aave now allows users to be able to sign messages from their cold wallet to participate in Aave Governance. This will in turn reduce the security risk.
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.
Kusama ($KSM) calls itself “Polkadot’s wild cousin”. Yet, is an initiative that seeks to solve the Polkadot ecosystem’s concerns of coding vulnerabilities. Going beyond the usual testnet, Kusama deployed on its platform a network focused on research and development with real costs to its community and developers. This makes it more mainnet-like, without having to actually put new developments up on the main Polkadot platform.
Background
Dr. Gavin Wood founded Kusama with a goal of supporting the Polkadot ($DOT) network via building a parallel blockchain that allows experimentation and development with very realistic conditions. With that in mind, Dr. Wood thought of having a “canary network” that functions as a warning and early problem detection protocol that can reveal the weaknesses of the Polkadot code base.
With Kusama, new features that are planned for implementation on the main Polkadot chain can be tested. The difference between Kusama and all other testnets is that the decisions made in the platform have actual economic implications. Testnets only provide playground tokens that bear no actual value.
What is Kusama?
Kusama is Polkadot’s canary network, which means that it is an experimental community research and development protocol. Its main purpose is to help developers test and deploy parachains on the Polkadot project, or experiment on its governance and staking functions with real economic conditions.
Canary testing
Canary testing is important as the developers behind both chains hypothesize that it is the best way to completely understand the critical risks that lie in Polkadot’s development.
As an unrefined version of Polkadot, Kusama functions as an independent decentralized main network. It will continually function as long as the community allows it to since decentralized systems inherently have no kill-switches. It could possibly become a para relay chain to Polkadot, however, it is never intended to merge with Polkadot’s chain itself.
Kusama Token ($KSM)
Kusama’s native token is the KSM, which holders can use to stake, become a validator or nominate one, and vote on its governance mechanism, among others. Furthermore, it is the token that powers most of the mechanisms in the Kusama network.
Investors who purchased DOT during Polkadot’s ICO are qualified to receive an equivalent amount of KSM on the Kusama Network.
Consensus Protocol: Nominated Proof-of-Stake
Kusama follows the Nominated Proof-of-Stake (NPoS) consensus model where validators are elected based on their stakes and the stakes of those who are voting for them. As much as possible, the platform balances the weight between validators every election.
In Polkadot, the election of validators focuses on the balance between these three metrics (Phragmen’s algorithm):
The total amount staked by the nominee and their nominators
The stake behind the minimally staked validator
The variance of the stake in a set.
Validators
To become a validator, users are required to stake KSM first. Once users already have the minimum amount of tokens needed to become candidates for a validator set, they are elected based on the Phragmen’s algorithm.
There are currently over 130 validators on Kusama.
Parachains
Parachains are application-specific data structures secured by validators on the Polkadot Relay Chain and run in parallel with the Polkadot network. This allows them to process transactions with the speed and scalability of the Polkadot blockchain.
How parachains work
Collators, on the other hand, are tasked to maintain the whole parachain. Collator nodes keep every data concerning the parachain and create new block candidates for the verification and recording of validators.
Parachains can have an independent economy from the Polkadot network and their own native token.
Governance
Before every protocol update or revision is made, they are voted upon by the network composed of token holders and Kusama’s council. Through innovations such as on-chain voting systems and stake-weighted decision making, Kusama has enabled a community-driven governance model.
The governance function follows the following procedures:
Proposing Referenda: Each referendum contains a specific proposal that serves as a privileged function call. Included in the referenda is the period designated for the voting process. They can be submitted by Polkadot (DOT) token holders and the council, or taken from prior referenda or recommendations by Kusama’s Technical Committee after the approval of its Council.
Voting for a proposal: There are only two options when voting, either “aye” or “nay.” If proposals receive a majority, they can be carried out for implementation. Before the enactment of a proposal, however, users are required to lock their tokens until the whole enactment delay has lapsed. The purpose of this parameter is to ensure that a proposal has met the minimum economic buy-in and discourage vote selling.
Tallying: There are three scenarios whenever the network votes on specific proposals. Since each proposal is distinguished on whether they are from the public or the council, the votes also differ in bias.
Kusama vote tally
For every proposal, the number of “aye” and “nay” votes are accounted for as the turnout, or the total number of voting tokens, are factored in.
In a positive turnout bias (if the voter turnout is low), more votes in favor of the proposal are required. In a negative turnout bias, it requires more votes against the proposal. And for Council proposals, only a simple majority is necessary.
Kusama Council
While there are active stakers, there are also passive stakeholders in the Polkadot and Kusama ecosystem. Through an on-chain entity comprising of 17 seats, the Council decides on three main tasks of governance. These include proposals of referenda, striking out clearly dangerous referenda, and electing members of the network’s technical committee.
Kusama council
Community on Kusama
Kusama has deployed the Society module, an economic game that seeks to reward users for participating and maintaining a membership society. Rewards, however, are given maturity periods. This means that the user cannot instantly get their incentives until the maturity period of their entitlements has already lapsed.
Societies can punish members by slashing their incentives if they are not being collected. There are many other violations, such as not participating in voting calls, among others.
By a strike system, members who have committed a number of punishable actions exceeding the limits decided upon can be booted out of the society.
As of now, Kusama only has one society organized on top of its platform. In the future upgrades though, they might add more.
Conclusion
The growth of the DeFi space is dependent on the participation of both its developers and the community behind them. Projects that empower developers to test out new features before they are actually implemented on main channels are important, especially if the security and reliability of a particular network are at stake.
A project like Kusama enables developers and their community to play around the Polkadot platform while making sure that each feature they are planning to deploy is not only audited but also tested realistically.
Decentralised Finance (DeFi) series: tutorials, guides and more
With content for both beginners and more advanced users, check out our YouTube DeFi series containing tutorials on the ESSENTIAL TOOLS you need for trading in the DeFi space e.g. MetaMask and Uniswap. As well as a deep dive into popular DeFi topics such as decentralized exchanges, borrowing-lending platforms and NFT marketplaces
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.
Hedget is conquering one area that decentralised finance (DeFi) projects have yet to fully explore- options trading. DeFi is in all honesty still in its infancy, and there is still plenty of infrastructures which could be built to solve problems relating to contract security, liquidation risks, and speed and cost of transactions. Hedget in collaboration with Chromia aims to become the default options trading platform for DeFi tokens.
Hedget rides on the background of DeFi applications. With DeFi assets growing parabolically and reaching $8.77 billion as of August 2020, it is, without doubt, an area that is rapidly on its way to dominating the crypto market.
Unfortunately, the volatility of cryptocurrency prices is likely to curtail further growth. On the flip side, the risks involved can be minimized by embracing options trading.
The project is headed by Malcolm Lerider, a former Research & Development Manager for NEO blockchain. Others include Serge Lubkin, Ex-marketing lead at Chromia, and Riccardo Sibani, who, among other things, developed concepts and proof of works in Ethereum and has a double degree in Cloud Computing. The protocol’s advisors are Roger Lim, NGC Ventures’ founding partner, and Alex Mizrahi, the founder of several academic papers about Bitcoin. The protocol’s partners include NGC Ventures, FBG Capital, and Chromia.
What is Hedget?
Hedget is a blockchain-based platform focusing on options trading, with a specific focus on safeguarding users from the fluctuating prices of digital currencies. Options are a unique trading venue since they allow traders to interface with the underlying asset without owning them.
Trading involves buying and selling assets at a predetermined future date and price. Options can either be a call or put. Call options enable the user to buy while put options give users the right to sell. Options traders can bet on the price either going up or down.
The bets can be spread over a period of time, with each having different prices, commonly known as strikes.
Three things are needed when creating an option: (1) the asset being tracked; (2) option type; and (3) maturity/expiry date. The options maturity date on the platform is every Friday at 8:00 UTC+5. A major point to note is that the system applies European options rules. With these rules, an option’s settlement can only be done at expiry and not in-between strikes regardless of whether the price is favorable.
The protocol works with Ethereum smart contracts, Chromia-based decentralized apps (dapps), and client-side wallets.
How Hedget works (Image credit: Hedget Twitter)
Hedget options protocol
Other aspects of the Hedget protocol include collateral and settlement mode.
Collateral
Here, users have to provide the full collateral for both call and put options. For example, those creating a call option for 20 ETH will be required to provide 20 ETH as collateral while those placing a put option will need to provide an equivalent amount of USDC (USD Coin), or any other supported stable coin.
Settlement mode
The network supports options settlement in either cash or physical. For physical settlement, the underlying asset, e.g., ETH, is converted to its fiat equivalent at the maturity date. In an ETH call option, the writer swaps ETH for USDC from the holder.
Cash settlements allow the writer to calculate the profit and transfer it to the holder. Settling in cash is advantageous since it can save on transaction fees.
Use cases of Hedget
The Hedget network is an excellent addition to the world of DeFi, from guarding options traders against the fluctuating prices of cryptocurrencies to increasing capital efficiency for both customers and businesses to hedging lending risks.
Furthermore, the platform can be used:
As a non-centralized price hedge
Here, users can use the network to hedge against their virtual currency holdings in a decentralized way. They can do this by buying a put option that protects them against reducing the underlying asset prices.
As protection on lending platforms
Hedget is primed for use by other lending networks to provide security against position liquidation by users. DeFi platforms champion for over-collateralized lending to cover losses in case they occur.
For example, on DeFi platforms such as MakerDAO, users need to put up collateral of 150% in order to borrow. During liquidation, more collateral is auctioned to stabilize DAI prices. Unfortunately, the loss is only reflected on users and not on the platform.
When Hedget is used in combination with MakerDAO, for example, users can select at a time that loans are generated to pay a premium for automatic liquidation.
To power leveraged trading
The protocol is ideal for traders who don’t flinch at the thought of leveraged trading. Using the protocol, leverage traders benefit from low prices associated with acquiring options compared to directly associating with the tracked asset.
Hedget token ($HGET)
HGET is an ERC-20 token that Hedget that is used for governance and utility. As a governance token, it settles transaction fees and fund’s asset reserves and general functions. Also, it’s used to avert order book manipulation through order spamming. This, however, requires staking HGET tokens.
HGET tokens have a total supply of 10 million tokens. The usage of these tokens is controlled by the Hedget DAO (Decentralized Autonomous Organization).
Hedget token auction
On 1st September 2020 at 13:00 UTC, Hedget will have their public auction for 423,000 HGET tokens (i.e. 4.23% of the total supply). There will be 2 separate auctions with 211,500 HGET in each auction, one auction will have all bids denominated in USDT (ERC20) and the other in Chromia’s CHR (ERC20) token.
Both auctions will have a starting price of USD$1 and run for 11 days in a Convergence Auction format. The Convergent Auction format requires participants to gradually disclose information about their pricing decisions.
The auction timeline will be as follows:
Registry phase (6 days): Apply for the auction on their website, go through the KYC process and register your wallet for the token sale. Then, signal your initial bid price and desired amount of HGET you want to purchase. Participants can change their bid price and quantity for an unlimited number of times though this will incur transaction fees.
Main phase (5 days): Participants can only raise their bid prices or lower the desired token quantity. Note that updating your bid will incur transaction fees and you may be required to deposit additional collateral to support your updated quantity. For an increase in bid prices, they can only increase a specified percentage each day during this phase: Day 1- 90%, Day 2- 70%, Day 3- 50%, Day 4- 30%, Day 5- 10%. During this phase, Hedget will calculate and update participants on the temporary threshold price for the HGET tokens. This is the lowest price where bids which are equal to or above this price are sufficient to buy all the tokens in the sale. So participants can refer to this price and decide if they want to update their bids.
Fulfilment phase (immediately after end of auction): Hedget will finalise the threshold price. For successful bidders, HGET tokens will be sent to them accordingly. If a participants’ bid was below the threshold price or only part of the bid was fulfilled, the collateral/ remaining collateral (as the case may be) will be returned.
Chromia is a blockchain network meant to power a new breed of dapps that would scale beyond what’s currently available. The network brings together blockchain and traditional databases to create a “relational blockchain.”
Hedget exists as a layer on top of Chromia. The “relational blockchain” acts as a second layer on top of the popular blockchain system, Ethereum. A combination of the two platforms leads to Hedget performing settlements on Ethereum, while the trading is done on Chromia.
For example, suppose a user sells call options on Ethereum using Hedget. In that case, Chromia will require the user to deposit and lock funds. After this, they can create several options with varying expiry dates and strikes. However, this will appear as a single transaction on the ETH blockchain.
Hedget has formed a strategic partnership with quantitative trading firm Alameda Research, who is also the team behind FTX exchange and Serum decentralised exchange. Alameda Research made a strategic investment of USD $500,000 for 100,000 $HGET out of Hedget’s “Reserve” tokens.
This strategic partnership obviously caused a lot of hype, especially with Alameda’s strong background and the success of FTX Exchange. This in turn boosted people’s positive perceptions on Hedget and is causing a lot of people to fear that they will miss out on getting themselves some HGET tokens.
Hedget IEO on FTX Exchange
As part of the strategic partnership, Hedget will have an Initial Exchange Offering (IEO) listing on FTX Exchange on 4th September 2020 at 1:00pm (UTC) for 120,000 HGET tokens.
Participants must be at least KYC level 2 and hold tickets for the IEO. Each person has 1 ticket but those with higher average trading volume or FTT holdings may be entitled to more tickets. (manafort.com) Each ticket entitles you to bid for 100 HGET tokens with a minimum bid of $100 USDT ($1 per HGET) and a maximum bid of $500 USDT + 56 FTT ($5 per HGET +56 FTT).
There will be a total of 1,200 accepted tickets who will get the allocation of HGET tokens. If there are more than 1,200 tickets that made the maximum bid, FTX will allocate randomly between these bidders.
With the volatility and the rigidity of current DeFi platforms, Hedget brings much-needed relief. And when used with blockchain-based lending systems, it can prevent automatic liquidation. Hedget’s application in leveraged trading, as well as its ability to hedge against price swings removes the need for trusted third parties. The fact that it is one of the projects Alameda Research had invested into also gives the public some confidence, considering Alameda’s history of success.
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.
