Algorand is a high-performance next-generation blockchain whose goal is to create a transparent system in which everyone can achieve success through decentralized projects and applications. Many have called this project “Blockchain 3.0”, as it solves Bitcoin’s well-known scalability problems whilst maintaining security and decentralization. Algorand has the native token $ALGO, which will be used as a transfer of value on the network. In terms of technology backbone, Algorand uses a Pure Proof of Stake (PPOs) and pseudorandom functions to prevent malicious attackers from colluding on the network.
Algorand stands out from other high-performance blockchains by the credibility of its founder, MIT professor Silvio Micali. Professor Micali has is the recipient of the prestigious Turing Award for computer science and many of his inventions have directly impacted the cryptocurrency scene.
Founder of Algorand: Silvio Micali
Silvio Micali is the recipient of the Turning award (the highest award from computer scientists) with innovations built around his research in cryptography, zero-knowledge, pseudorandom generation, secure protocols and mechanism design. On top of this, Dr. Micali is the co-inventor of probabilistic encryption, Zero-Knowledge Proofs, Verifiable Random Functions and many of the protocols that are the foundations of modern cryptography
Algorand Foundation
The Algorand Foundation makes use of the Algorand protocol and software developed by Silvio Micali and his team. Their aim is to create an ecosystem that everyone can use to build a borderless digital economy on Algorand.
Specifically, the Algorand foundation holds one-quarter of the total supply of ALGO (i.e. 500 million ALGO), and manages the Algorand blockchain.
Algorand attempts to overcome the Blockchain Trilemma
Vitalik Buterin proposed that a Blockchain can only have a maximum of 2 of these properties
Currently, transactions on the blockchain are very slow because of the âBlockchain Trilemmaâ. This is a term coined by Vitalik Buterin, the founder of Ethereum.
According to this idea, a blockchain has three major features: decentralization, scalability and security.
However, the Blockchain Trilemma proposes that it is very hard for a project to have all three features to a satisfactory condition. A network that is decentralized and has a tough security would not be scalable. Similarly, a blockchain that is decentralized and scalable will have little security etc.
Buterin believes at a fundamental level, a blockchain network can only achieve two of the three features at any time. The Blockchain Trilemma could be the source of scalability issues on most cryptocurrency blockchains. Most cryptocurrency projects cannot handle high numbers of transactions while ensuring network decentralization and security.
What is Algorand- Is it really a Next Generation blockchain?
To attempt to overcome this, Algorand opted for a Pure Proof of Stake (Pure PoS) consensus mechanism. Interestingly, the mechanism employs a different approach compared to other alterations of the PoS mechanism.
For instance, instead of requiring 100% consensus from all the validating parties, Algorand is comfortable with a two-thirds majority consensus. This means that in order to attack Algorand, you will need to purchase more than one third of the total supply of Algorand. This will anyway be uneconomical and holding such a large volume of the supply means that you have a large stake and would not want to see it fail.
Algorand’s secret sauce: Cryptographic sortition
Since todayâs blockchain platforms require speed as an integral component, Algorand has a fast transaction time by enabling fast transaction finality through cryptographic sortition.
âAll transactions are final in Algorand. Once a block appears, users can rely on the transactions it contains immediately, as they can be confident that the block will forever be part of the chain. Even if the Internet is split into multiple pools of users, only one safe and consistent Algorand chain will exist. [Additionally], Neither a few delegated users nor a fixed committee is responsible for proposing blocks in Algorand. Instead, all users are randomly, secretly, and continuously selected to participate in the Algorand consensus protocol.â
The process of confirming blocks on the platform involves two stages; the proposal and voting stage. During the proposal stage, a token is randomly selected, and its owner suggests the next block to be confirmed. At the voting stage, 1000 random token owners are selected to form a committee that approves the proposed block.
How to Stake Algorand?
An Algorand transaction in action
Anyone can participate in the Algorand platform as a block proposer by merely switching their address from offline to online on the Algoexplorer. Luckily, this option does not depend on the amount of Algo tokens staked. Mining is not required, all you need is to stake its ALGO token and have the nodes online.
The Algorand platform supports two types of nodes; relay and participation. An important point to note is that the relay nodes donât participate in voting or decision making. Instead, they facilitate communication between participation nodes. Relay nodes are also hardware intensive compared to participant nodes.
Although Algorand is designed around being fully decentralized, the Algorand Foundation holds a lot of ALGO tokens and hence control. However, the platform is anticipated to be more decentralized in coming months as the foundation continues to liquidate its position.
You can also stake Algorand using your Ledger cryptocurrency hardware wallet. Check out our Ledger Nano X review.
Algorand 2.0 Protocol Upgrade
On 22nd of November 2019, the Algorand foundation announced the next huge leap for Algorand – dubbed Algorand 2.0. This release brings about 3 major features: Native token issuance (Algorand Standard Asset), Atomic swaps for interoperability and smart contract support via the TEAL scripting language.
Algorand Standard Asset (ASA) brings about easy token creation and issuance directly on the Algorand main chain. ASA supports a wide range of tokens, such as fungible tokens (similar to Ethereum’s ERC-20, and also non-fungible tokens (used for digital collectibles). Algorand’s implementation of tokenised assets is directly on the protocol layer (“Layer 1”), allowing for direct access to assets with maximum security. This is a significant advantage over Layer 2 Scaling which requires payment channels in order to operate.
âAlgorand is delivering that innovation with this new set of features that brings an impressive amount of opportunity to decentralized finance.
Shay Finkelstein (CTO of Securitize)
Algorand listed on Coinbase, price surges over 30% in one day
In a complete surprise to cryptocurrency enthusiasts, Algorand was listed on Coinbase on 17th July 2020. People found out only when they saw the announcement on Coinbase’s blog, whereby the Exchange said that their customers can now buy, sell, convert, send, receive or store $ALGO in all Coinbase supported regions. Be sure to check out our Coinbase exchange review and some hacks and tips to avoid Coinbase fees.
People were completely caught off guard by this announcement since in the few weeks prior Coinbase had talked about 18 other cryptocurrencies they might consider listing. Yet Coinbase was not one of those 18 cryptocurrencies.
This listing created a whole flurry of activity for $ALGO, especially in terms of its prices. Since the listing, prices for $ALGO shot up 30% since the announcement and was even trading at $0.367 at its peak.
Algorand becomes the official blockchain platform of FIFA
FIFA, the world football governing body has announced its partnership with Algorand. This sponsorship and technical partnership will see Algorand becoming the official blockchain platform for FIFA, providing blockchain-supported wallet solutions as well as helping FIFA develop its digital assets strategy.
Algorand will also be a FIFA World Cup Qatar 2022 Regional supporter in North America and Europe, and a FIFA Women’s World Cup Australia and New Zealand 2023 official sponsor.
The future of ALGO token: Algorand’s 10-year plan
When the Algorand blockchain was first launched, 10 billion ALGO was minted, which represents the fixed and unchangeable maximum supply of AGLO.
Since then, only 16% of this total supply has been injected into circulation via an auction in June 2019 and subsequent community rewards. Auction proceeds have been used to finance various community, academic, and industry projects which ultimately support the development of economic infrastructure and business opportunities on the Algorand blockchain.
After consideration by the Algoradnd team and based on their analysis and feedback received, the Algorand team have decided that the remainder of the initial 10 billion ALGO tokens would be gradually distributed over a period of 10 years from 2020, i.e. by 2030, the entire supply of ALGO would be distributed. This is much longer than the initial 4 years from 2020 as originally planned by the Algorand team.
In order to implement Founder Silvio Micali’s vision of innovative community governance, the Algorand team are moving towards a new reward system that rewards existing and future participants who are committed to participating in the governance of the Algorand ecosystem and prove their loyalty by locking up their ALGO for the long term. Resources i.e. 3 billion ALGO will be correspondingly distributed to reward long-term holders, and economic and business activity on the Algorand blockchain. The aim of this is to achieve a rate of growth of chain loyalty and economic adoption which would be more than enough to compensate for the gradual release of tokens over 10 years.
Furthermore, the funds initially allocated for sales will now be diverted to other areas such as community incentives, governance participation and ecosystem support.
FAQ
How do you mine Algorand?
It is currently not possible to mine Algorand using computer hardware. Algorand uses a proof-of-stake consensus, so it is possible to earn ALGO rewards by simply staking Algorand in the wallet.
Where is Algorand located?
Algorand is a decentralized project founded by MIT professor Silvio Micali. The foundation responsible for maintaining Algorand, the Algorand Foundation is incorporated in Singapore and is located at 1 George Street, #10-01, One George Street, Singapore (049145).
How do I buy an Algorand?
You can Buy Algorand on popular exchanges such as Binance or Coinbase with the ticker $ALGO
How do you stake algorand
Algorand can be directly staked via the mobile wallet application which can be installed on both Android and iOS devices. To stake the coin, deposit ALGO directly into the wallet. The wallet will automatically accumulate ALGO over time.
What is Algorand’s community governance?
Algorand started its community governance program on 1st October 2020, it gives ALGO holders the power to make decisions regarding the direction and future of Algorand. People can participate in governance i.e. become Governors by committing their ALGO for the duration of the 90 day voting period and then voting on the proposals. After the 90-day voting period, participants can claim their governance rewards.
Disclaimer: Cryptocurrency trading involves significant risks and may result in the loss of your capital. You should carefully consider whether trading cryptocurrencies is right for you in light of your financial condition and ability to bear financial risks. Cryptocurrency prices are highly volatile and can fluctuate widely in a short period of time. As such, trading cryptocurrencies may not be suitable for everyone. Additionally, storing cryptocurrencies on a centralized exchange carries inherent risks, including the potential for loss due to hacking, exchange collapse, or other security breaches. We strongly advise that you seek independent professional advice before engaging in any cryptocurrency trading activities and carefully consider the security measures in place when choosing or storing your cryptocurrencies on a cryptocurrency exchange.
Radix DLT is a layer 1 distributed system to power the needs of the decentralised finance (DeFi) ecosystem. As DeFi continued to gain traction, the top blockchain networks supporting the market were already overstretched. As it turns out, scalability appears to be a hard nut to crack and hence projects like Radix DLT are formed.
The motivation behind the Radix protocolâs creation is to save the $71 billion lost every year caused by unnecessary friction in the conventional financial system and allow those at the lower and higher levels of finance to make ground by powering a strong DeFi ecosystem.
Check out our video which explains the scaling problems currently faced by Ethereum, and how Radix attempts to solve it.
Taking DeFi to the NEXT LEVEL ? – Radix DLT Protocol overview
Background
The Radix team believes that using distributed ledger technology (DLT) to build a permissionless network will ease the development and accessibility of innovative financial applications. With these applications, we could finally bring down the guarded walls of traditional financial markets.
The project was founded by Dan Hughes, who also happens to be its CTO. Hughesâs former work includes the design of T-Mobileâs first mobile internet platform.
Other team members include the organizationâs CEO, Piers Ridyard, as well as CPO, Albert Castellana. The project is being supported by the Radix Foundation.
What is Radix DLT?
The team behind Radix DLT defines the project as the âfirst layer 1 protocol specifically built to serve DeFi.â The protocol seeks to remove the inefficiencies found in open finance (OpFi) both in the current and future settings. Hughes and his team want to achieve this through:
Re-engineering the consensus mechanism used in popular blockchain systems.
Employing decentralized virtual machines.
Activating on-ledger code.
Building DeFi-bound components and applications.
Incentivizing developers who drive the growth of the new-found financial breakthrough.
Having its developers at the core of driving growth for innovative financial products, Radix provides its support by building highly-secure smart contracts, fast and interoperable OpFi decentralized applications (dApps), engaging and rewarding a distributed developer community, and guarding DeFi composability when scaling dApps on public blockchains.
Radix network
The network is made up of Cerberus (a consensus mechanism), Radix Engine (a development environment), Radix Component Catalog, and developer royalties.
Cerberus
At the heart of the protocol is Cerberus, a re-engineered consensus mechanism which uses a sharded Byzantine fault-tolerant (BFT) solution. This approach enables the system to be parallelized across multiple nodes without losing message complexity and responsiveness.
The sharding concepts allows unlimited network splits or shards. Each shard can represent anything on the platform. By allowing unlimited shards, Cerberus shifts focus from global ordering to partial ordering.
With global ordering, transactions are stored in a predefined chronological order. Partial ordering, at a very basic level, is the opposite of agreed chronological ordering. However, partial ordering has to differentiate between related and unrelated events or transactions when recording them on the blockchain.
Using a âbraidingâ mechanism, Cerberus uses a new BFT-style system to sign interactions between nodes handling different shards before committing transactions.
Radix Engine
This is Radixâs specialized application layer that powers the interaction between a smart contractâs code with the actual blockchain. The layer powers the projectâs virtual machine (VM), which in turn, powers the partial ordering system.
Furthermore, the Radix VM handles concurrency to drive DeFi applications further.
Radix Component Catalog
In other blockchain systems, a developerâs work becomes an active smart contract after being pushed to the systemâs users. For Radix, the component catalog handles apps before being registered as âactiveâ on the platform.
In other words, the catalog contains templates ready for use to create additional active components. The new template-based products are called instantiated components.
Developer Royalties
The Radix system uses developer royalties to encourage developers to contribute. However, the project takes a different approach by employing distributed self-incentives such as those found in proof-of-work systems called mining rewards.
Radix Token ($XRD)
The platform has a native token, XRD, which is used to pay for transaction fees. Note that these fees are paid to node runners.
A transaction fee is charged for token creation, messaging, and anything else that requires a change of the ledger state. The fee is burnt upon validation of the operation.
Furthermore, the platformâs tokens have a controlled unlocking mechanism that spans 365 days. With each unlocking, the Radix Foundationâs amount of XRD reduces while those in the public domain increases.
E-Radix (eXRD) Token Sale and tokenomics
Radix Token Sale began on 8th October 2020 and a total of 642mil E-RADIX tokens were available to purchase at $0.039 per token.
There will be an Initial Supply of 4.41 billion E-RADIX as both locked and unlocked tokens. The following chart shows the proposed distribution of the Initial Supply tokens.
Radix proposed distribution
The unlocking mechanism for E-RADIX tokens will start on 17th November 2020. Of the Initial Supply of 4.41 billion E-RADIX tokens, 4.2 Billion tokens will be distributed and of which 99% will be locked and 1% unlocked.
These locked tokens are subject to a price-based unlocking schedule which will allow holders to withdraw the tokens at certain price milestones as follows:
This E-RADIX token is an ERC-20 token. When the RADIX ledger is instantiated, this E-RADIX token will be exchangeable 1:1 for RADIX (XRD) tokens. As mentioned in their key milestones article, the Team are on track for the Radix main net to go live in Q2 2021.
On the mainnet, Radix will create a further 5.19 billion RADIX tokens which will also follow the same unlocking schedule as the E-RADIX tokens mentioned above.
How to withdraw your unlocked E-RADIX (eXRD) and RADIX (XRD) tokens
As mentioned in the previous section, E-RADIX and RADIX tokens are subject to a price-based unlocking schedule. However, to claim these tokens you will need to withdraw them from the unlocking smart contract.
This involves visiting their Radix tokens unlocking website and connecting the wallet that you used to purchase the E-RADIX tokens. If that wallet address has an allocation of EXRD in the unlocking smart contract, you will see details of your total allocation together with the amount which is unlocked and can be withdrawn. Then all that is required is to click the “withdraw” button and follow the steps to withdraw the eXRD.
Make sure to check back when an unlocking event occurs because it will mean you can withdraw more tokens!
For a detailed walkthrough on how to claim your unlocked tokens, click here.
Staking Radix Token
With OpFi, staking, yield farming, and liquidity mining are common occurrences. Radix powers this DeFi subset by allowing users to lock their XRD to earn network emissions and be involved in decision making.
Network emissions are periodically generated tokens that are spread across active staking nodes while considering the amount of staked tokens. Emissions make up for 2.5% of the yearly inflation rate.
There are two approaches to locking tokens:
A user can lock XRD and become a node runner on the network; or
a user can lock Radix tokens and delegate his stake to another node runner, also called a staking node. A staking node has the power to validate transactions.
Radixâs consensus mechanism limits the stake weight per node to 33% to prevent node runners from having absolute power over the transaction validation process.
Network Subsidy
The network subsidy is an additional amount of tokens distributed to transaction validators. The tokens are unlocked by the Radix Foundation every 24 hours and are expected to run for 10 years. However, to earn the subsidy tokens, a staking node has to consistently meet specific factors on responsiveness, bandwidth, and computing power.
Other Radix token categories are the public token grant to support community contributors, the Radix team token grant to support the team, and the stable token reserve that supports stable coins on the network.
Conclusion
The projected growth of the DeFi market requires creating new distributed systems that, if possible, have unlimited scalability. Radix is one such project. With a key focus in leading the migration from centralized finance (CeFi), the project provides hope to the future of OpFi.
From a re-designed consensus mechanism to decentralized self-incentives for developers, the project is keen on ensuring that DeFi overshadows CeFi.
The Radix token supply approach is another key component of the network that shifts from the traditional approach of major blockchain-based systems that power OpFi protocols.
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.
Wing Finance ($WING) introduced a credit-based DeFi system that supports cross-chain digital asset lending, allowing users to borrow funds and provide collateral based on their credit score.
Crypto-lending, as it was introduced in the DeFi space, was not as accessible to many as it was meant to be. Despite being open platforms, over-collateralization requirements have limited the number of people who could make loans since they had to own a ton of digital assets first. Wing Finance aims to resolve this issue. In this article, we will explain how this mechanism works.
Check out our video on how you can EARN through Wing Finance:
HUGE Opportunities to EARN don’t miss out: WING Finance (Ontology)
Background
Wing Finance is a protocol developed by the team behind Ontology, an enterprise blockchain solution protocol. The aim of the developers was to address the problems that were present in mainstream financial products deployed in DeFi. With the process mainly designed to introduce credit elements in the space, Ontology came up with Wing Finance.
In the spirit of further decentralization, Wing Finance also launched a decentralized autonomous organization (DAO) to support community governance and user sovereignty. What Wing brings to the table are concepts such as credit-based lending and expandable categories of assets that can be digitized.
Features of Wing Finance
Here are the main features of Wing Finance:
Wing Finance supports cross-chain collaboration and decentrazlied governance throughout a range of DeFi projects.
They have a risk control mechanism that fosters relationships between borrowers, creditors, and guarantors that will be mutually beneficial.
Wing Finance bridges the world of DeFi and traditional finance through its decentralized credit system.
What is Wing Finance?
Wing Finance ($WING) is a credit-based, cross-chain lending platform on DeFi. And as already mentioned, its main goal is to make digital lending services more accessible to everyone through a credit evaluation module that does away with massive collateralization requirements.
The credit evaluation framework works around the OScore system, a mechanism built on top of Ontology. OScore is a sovereign reputation and credit assessment system for DeFi. It functions through the implementation of identifiers and credentials that are supported in cross-chain transactions.
To put it simply, it is the system that comes up with a credit evaluation tool that factors in the holdings or balance of any particular user, as well as their history of managing digital assets. To do this, OScore attaches a digital identity to a userâs assets, such as those that are built on Bitcoin, Ethereum, and Ontology. This helps the system determine a userâs credit score.
Ontology is working on integrating more evaluation functions and on-chain data in the OScore system. But now, they are already implementing OScore in their userâs wallets.
Collateral Support
Since the platform is powered by Ontology, it can support a collateral pool that contains a variety of cryptocurrencies even if they are on different blockchains. This is what is referred to as âcross-chainâ support. Through Ontologyâs decentralized identity and data functions, any asset can be digitized.
Decentralized and Automated Credit Evaluation
Smart contracts power the decentralized and automated credit evaluation function of the platform. Decentralized identity and data protocols enable automated credit data verification and evaluation system that does not require any third-party intervention. Furthermore, this is where the OScore system rests.
Features of Credit-Based Lending
Lower collateralization requirements
Since borrowers can now depend on their OScore data to make loans, the collateralization requirements can be lowered further, if not canceled altogether.
Asset Digitization
It is easier to digitize assets on the platform because it can now be attached with credit elements from the on-chain data that OScore can gather.
User Sovereignty
The platform does not need any third-party to perform user verifications. Instead, the credit elements used to tag users function through decentralized identifiers (DID), which are verifiable and decentralized. Smart contracts also ensure that the review of these elements does not need manual intervention anymore.
Wing Pools
There are 2 types of pools on Wing Finance- Flash Pool, NFT Pool and Inclusive Pool.
Flash Pool
Wing is deployed on 4 networks with 6 pools in total: Ontology, Ethereum, OKXChain, BNB chain, and Ontology EVM.
Wing Finance’s Flash Pool allows users to borrow and lend on the platform. Lenders also receive interest payments for supplying their funds on the platform. To prevent the likelihood of asset losses, it also has an insurance pool that can cover such risks.
Anyone can supply their cryptocurrencies in the Flash Pool which it will lend to the platformâs borrowers. In return, lenders receive interest in both the crypto supplied and WING tokens. The return is correspondent to its APY.
Borrowing
Anyone can borrow cryptocurrencies from the Flash Pool, they just need to meet the prescribed collateral requirement for their loan. To earn WING rewards, they have to lock 3% of their WING tokens first.
Insurance
To ensure that potential risks are covered in the platform, users can also take part in the insurance pool of the platform. Users just have to lock their WING tokens in the flash pool for at least 3 days.
NFT Pool
Wing Finance’s NFT Pool is a NFT-collateral based fund pool on the Wing DAO platform. It currently supports 6 types of NFTs: CryptoPunks, MAYC, BAYC, Meebits, Azuki, and CLONE X.
The main feature of Wing Finance’s NFT pool is that it hopes to provide a unique and innovative way to unlock the value of NFTs via its peer-to-pool lending model. With the peer-to-pool lending model, users supply ETH in the asset pool to provide liquidity to the lending pool. These users earn ETH interest from borrowers and the pWING token which is an ERC-20 protocol variant of the WING token.
In the NFT pool, users can borrow ETH by collaterizing NFTs which go into the NFT-collateral pool. The borrowers then receive a corresponding functional NFT. NFT buyers could then purchase these NFTs through the liquidation market with the potential to purchase them at a discount since the NFT prices are calculated from the floor price.
Inclusive pool
Wing Finance’s Inclusive Pool is an asset pool that allows people to undercollaterize assets and maximize their borrowing capabilities. The Inclusive Pool includes a supply & borrow pool, and an insurance pool.
There are currently only 3 supported assets on the Inclusive Pool: pDAI, pUSDT and pUSDC. Users can borrow from the supply pool subject to the rules set by Wing Finance. Users can also loan out assets but is required to collaterize a certain amount every time they do so. This amount is calculated based on the users’ OScore.
WING tokens are distributed to those who use the Inclusive Pool provided they have not breached repayments, or only returned their loans during the grace period.
WING Token
The WING token is Wing Financeâs native utility token. It is used to back the platformâs reward system as well as its voting mechanisms.
Rewards System
In Wing Financeâs Inclusive pool, they are rewarded for maintaining a good credit score on the platform. Examples of activities that help with that include paying loans back on time and maintaining good behavior.
They can also be given reduced interest rates for their loans if they exhibit good repayment practices.
Wing DAO
The community can vote on protocol parameters on Wingâs three main pools. These are the lending pool, borrowed pool, and risk control margin pool. Some examples of the functions that can be subject to a community vote are the type of assets that can be borrowed, minimum and maximum borrowing and lending amounts, and other risk control requirements.
Users only have to own at least 1 WING in order to participate in community governance. Through this, they are given the right to put forward proposals on the services of the platform.
Why are WING prices pumping?
WING prices have gone up nearly 300% in the past 24 hours on 29th July 2022, from $12 to a high of $58. But why are WING prices going up? This could be because there has been an overall rise in DeFi tokens such as Uniswap ($UNI) (up 24.9% in the past 7 days) and PancakeSwap ($CAKE) (up 21.2% in the past last 7 days). However, a more recent reason for the sudden rise in WING prices could be the AMA with WING DAO on the latest NFT pool.
However, there is concern that the WING price pump may not be sustainable as many consider the crypto market to still be in a bearish state.
Conclusion
Over-collateralization requirements in most DeFi products have limited the number of people who could actually borrow crypto and the amount that they can leverage. While these were innovations that many crypto adopters were waiting for, these were not enough to attract new adopters who didnât have much crypto holdings to begin with.
Wing Finance has made a system where it is much easier to borrow funds and lend idle assets to get returns without compromising the quality of its liquidity pool altogether. And because it functions on top of the Ontology system, it does not suffer from rising gas fees that are experienced in other smart contract chains.
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.
Decentral Games is the first community-owned casino ecosystem offering a chance to participate in a seamless, anonymous and decentralized gaming ecosystem, all the while being rewarded for your participation.
Thrill-seekers from any part of the world have had the pleasure of enjoying their favorite casino games on-the-go. Despite the fact that these games have been available on the internet since the 90s, their popularity has only recently soared to the roof! This is in part thanks to the abundance and accessibility of mobile devices.
Table of Contents
Background
In 2019, with the power of Blockchain technology, a group of innovators has been able to give the online casino sphere a gigantic push forward with the formation of Decentral Games.
The founders were able to seize an opportunity to leverage the Ethereum blockchain to develop a non-custodial social 3D casino on the internet. The team, which is made up of about ten people, is based in San Ana, Costa Rica.
What is Decentral Games?
Decentral games is a casino ecosystem that is owned, governed, and maintained by its users (holders of the $DG token), through a Decentralized Autonomous Organization (DAO). Essentially, the platform allows casino game lovers to control its system and ensure that rules are followed and issues are resolved through the DAO.
The ecosystem leverages two previously existing Blockchain platforms. One is Decentraland, where its users are able to create, experience, and monetize contents and applications. The other is Matic Network, which provides seamless, fast, and cost-effective transactions on the Ethereum network.
Decentral Games puts the affairs of the game itself into the hands of its users. For instance, the users are in-charge of funds. And thanks to its open-source logic, a fair evaluation for every result (in case of disputes). Furthermore, each user is able to enjoy fast transactions and anonymous participation.
Decentral Games Ecosystem
Every element on the ecosystem interacts with the $DG token. And these interactions all happen via the dgTreasury, which serves as the casino house fund. It is open and observable to all users.
The treasury is responsible for bankrolling and funding all games. Therefore, for it to function effectively at all times, it must always have enough funds. Fees collected from players (in $MANA and $DAI) would be collected and kept in the dgTreasury, which is also from where winnings would be paid out.
By incentivizing players to stake their digital assets, the treasury gets enough buffer to fund gaming activities.
And players who stake digital assets are rewarded with $DG tokens, a process popularly known as mining. However, this is not the only means by which you can mine on Decentral Games.
What is $DG token?
$DG is Decentral Gamesâ native utility token based on Ethereum’s ERC-20 standard and made mainly for use on the DG platform. There are 3 main uses and ways to earn the $DG token which will be explored in detail later on in this article. These are: governance, liquidity mining, and gaming rewards.
Holders of the token can propose and vote on governance proposals concerning the features and/or parameters of Decentral Games’ ecosystem. Decentral Games also has a staking mechanism which rewards users with $DG tokens. Finally, $DG tokens are also rewarded to players for playing games with MANA or DAI.
$DG Allocation and tokenomics
At launch, a total of 1 million $DG will become accessible to be distributed strategically over 6 years. 62% (620,000 DG) would be allocated to the community, 20% (200,000 DG) to the development team with 3 years vesting, and the remaining 18% (180,000 DG) to early participants with 2 years vesting.
As a DAO-based community, users are able to come together to deliberate on important decisions. And decisions are made through the results of a vote. With this system, the platformâs future is carved and decorum is maintained.
This system of self-regulation is known as Governance.
To submit a proposal or vote on them, you must own $DG tokens. Users can stake their token to submit proposals, as well as vote on them.
According to the encoded rules of the DAO, 1% of the total $DG supply is required to submit a proposal. While at least 4% of the total $DG supply must be pooled together within 7-days for a decision to be made.
The amount of $DG you have staked determines your voting power. Users are able to stake their tokens through the governance dashboard available to every user.
Participants in governance are often rewarded with more $DG tokens. This makes the second means by which you can mine on the Decentral Games.
It should be noted that issues deliberated and voted on are restricted to those within the platform and its eco-system itself. It does not extend to the management of the staff, assets, or affiliates. It also does not represent any right with respect to Decentral Games itself.
Liquidity Incentives: mining/farming $DG
The earning process, also known as mining, is conducted through several different processes on DG. It enables users to get $DG in return for providing liquidity to the MANA-DG and DAI-DG 98/2 balancer pools. Farming on $DG is done in 4 simple steps:
Hold $MANA or $DAI on your Ethereum Mainnet wallet on Metamask. and connect your wallet to Decentral Games.
Choose either Pool 1 (98% MANA- 2% DG) or Pool 2 (98% DAI- 2% DG).
Select “Add liquidity” and fill in your preferred deposit amount. If you are a first-time Balancer user you may have to sign up to 4 transactions: setup proxy, MANA/DAI authorisation, $DG authorisation, and add liquidity to pool. Once you have added liquidity to the pool, you will receive balancer pool tokens (BPTs) which can be staked to farm $DG.
Connect your Metamask wallet to the $DG Liquidity Farming Dashboard. Then, enter the BPT amount you wish to stake and confirm by selecting “Stake BPT”.
More details on how to farm $DG are available here.
Gameplay Rewards
But perhaps the most important means of mining on the platform is through gameplay. As you are enjoying the thrill of your games, you get rewarded in DG tokens.
Rewards are distributed based on specific activities you perform during gameplay. Some of those activities involve placing a wager, playing with multiple players on the same table, referring other players, and having your avatar wear DG non-fungible token-based wearables when playing.
You can bring your digital assets into the ecosystem using MANA or DAI tokens, both of which are fast and effective transactional stablecoins that run on Ethereum and are noted for their value exchange stability.
So in addition to any winnings players may receive, they will also receive $DG.
Available games on Decentral Games
At present, a good number of popular casino games are already available on Decentral Games. These include: Blackjack, Roulette, Slots, Backgammon, and Poker.
Decentral Games expanding into virtual land ownership?
On 21 January 2021 Decentral Games has transferred 403 Decentraland LAND parcels to the $DG DAO worth USD $500,000. Each of these land parcels is a unique and transferable non-fungible token representing 16×16 meters of virtual space in a specific location on the Decentralad map. Users can choose to own adjacent land parcels for building structures such as casinos and galleries. (https://escapecitybuffalo.com/)
$DG holders will be able to create proposals to direct how these land parcels should be developed.
Conclusion
As people spend more hours within virtual worlds, Decentral Games aims to grow to hundreds of thousands of users by the end of the year. And since it is part of a greater ecosystem called Decentraland, the casino platform can easily tap into a vast network of users.
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.
One of the benefits of BSC is that the Ethereum blockchain has been plagued lately by exorbitantly high fees and delayed transaction processing times. This has resulted in retail or average users getting priced out and unable to participate in decentralised finance (DeFi) or NFT activities. For some investors, itâs simply too much to pay $15-30 per transfer and $50-100 per Uniswap asset conversion.
Therefore, BSC has risen up to the occasion to alleviate some of these problems by cloning and porting Ethereumâs most used DApps over to its blockchain. Thereby offering an attractive alternative with its low fees and near-instant transaction processing time.
Background
Binance Smart Chain (BSC), the blockchain Bakerswap runs on, is a project from Binance – the largest cryptocurrency exchange in the world by traffic volume and traded amount. It is an Ethereum fork with a Proof of Staked Authority (PoSA) consensus mechanism and the ability to integrate with the Ethereum Virtual Machine (EVM). There are 21 validators staking large amounts of BNB, who process activity.
The identity of these validators isnât known but is largely believed to be Binance permissioned actors. These validators need permission from the Binance network to run the validator node. Furthermore, the BNB token holdings are greatly controlled by the Binance team or founders. Itâs a permissioned network.
But, it does have its benefits. It ensures high throughput transaction processing and low fees for the users. Itâs an experience for the users, who otherwise wonât be able to experience DeFi and NFTs. Binance further returns some part of the transaction fees to the developers to give them the incentive to develop on the BSC network.
BakerySwap
BakerySwap is a Uniswap clone that allows for orderbook-less automated market maker (AMM) services and NFT trading. It runs exclusively on the Binance Smart Chain (BSC). Itâs marketed by Binance as having âcheaper fees and faster confirmation time than Ethereum”. Also included are the functionalities for staking with users providing liquidity and earning new tokens, combination NFTs and pets feature.
In the place of orderbooks, liquidity pools are used to conduct swaps. In a similar manner to Uniswap, the participants receive Liquidity Pool (LP) tokens and can redeem them for assets supplied and fees earned when liquidating them. Thatâs according to their share in the pool gathered from the assets. Recently, an Initial DEX Offering (IDO) has also been introduced which allows projects to raise capital.
BakerySwap Fees
BakerySwap has a 0.30% fee for every activity on the platform, 0.25% goes to the liquidity providers and the remaining 0.05% will be used to buyback BAKE from the market and distributed to BAKE holders.
How To Access BakerySwap Through MetaMask
Itâs pretty simple to access BakerySwap through Web3 wallets like MetaMask. Simple click the MetaMask button and open the dialog box and it will show Ethereum mainnet by default.
Connecting to BakerySwap
Then, enter the following information in a case-sensitive manner.
Click Save and then switch to Binance Smart Chain. Now you can access BakerySwap. To transact on the BSC network, you need to have Binance Coin (BNB) on your wallet, so buy and withdraw them to your MetaMask as BEP20 standard tokens.
BakeryToken ($BAKE)
The native token of Bakeryswap is called BakeryToken or BAKE, which is earned by providing liquidity to asset pairs and staking liquidity pool tokens or by staking BAKE itself. Since this is a food-themed clone, itâs possible to deposit the liquidity pool tokens into different pools of Doughnut, Waffle, Rolls, Croissant, Latte, etc. with different ROIs.
There was no pre-mine and/or presale of BAKE tokens. The tokens reserved for the team are only 1% because of their belief in a fair distribution model. Its distribution is skewed in favor of people staking tokens and the total supply is 731,745,000 BAKE. The tokens will be gradually released with the communityâs consultation and advice.
NFTs
On the Binance Smart Chain, BakerySwap is the first AMM plus NFT project. The native BAKE token can be used to create a âfood mealâ – a fancy term for a NFT, which can be used to farm BAKE again.
Every food meal has a different staking multiplier and earns proportional rewards. Plus, it can be traded for other NFTs and burned to yield BAKE.
The platform also has an NFT Supermarket which allows artists to turn their artworks into NFTs through the minting process and to sell them. Users can buy artwork at the Supermarket using BAKE tokens.
Despite having an interesting overlap of two emerging fields in blockchain tech, the innovation doesnât seem to slow down at BakerySwap. As such, the team has announced that they would introduce the stake to farm NFT functions like MEME. A novel bidding and auctions system would also be developed.
In DeFi and NFTs, gamification is key to engage users and keep them involved. BakerySwap will create raffles and rewards for completing BAKE tasks. AMM/NFT data analytics and token price charts are also under development. At some point in the future, margin trading and derivatives would also be deployed on BSC.
BakerySwap Ethereum 2.0
Like any emerging unconventional DeFi protocol, BakerySwap has had its fair share with procuring and managing liquidity for the yet-to-be-launched Ethereum 2.0. It has been reported to be working to integrate Ankr staking services aETH – a synthetic asset representing deposited Ether tokens, which will be used to create new farming pools.
BakerySwap has also launched its own Eth2 BETH token, in partnership with Binance.
Conclusion
BakerySwap marks the introduction of an interesting experiment and an attempt to include users, which have been left out because of the high fees on the Ethereum network. At a fraction of cost and rapid transaction processing, retail users can try out the asset swap and NFT minting functions without clearing out their wallets for fees.
The project takes Uniswap one step further, adding elements of NFT and gamification. Plus the tokenomics ensure value accrual and incentives for users to continue holding the token. The trajectory of BakerySwap doesnât appear to be descending and notable features are waiting to be implemented in the coming days.
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.
Unido ($UDO), powered by Polkadot, provides enterprises crypto-asset management solutions, that specialize in governance, security, and interoperability within the crypto banking sphere guaranteeing the satisfaction of all users.
Background
Powered by Web3 blockchain Polkadot, Unido was founded by Chris Weddle who has over 20 years of experience within the blockchain sector. The project was initiated in 2017 and is anchored by an experienced team of finance experts, software developers, and blockchain developers. They all come from well-known financial and development firms such as Goldman Sachs, Wipro, and Macquarie.
Unido’s Founder: Chris Weddle (Source: Unido website)
Through the Unido project, the team has successfully managed to solve security and accessibility challenges with its distinct and dynamic implementation of a blockchain-based management tool that facilitates the handling of crypto assets.
What is Unido?
Unido is a technology ecosystem that addresses the governance, security, and accessibility challenges of decentralized applications, and enables companies to manage crypto assets and capitalize on DeFi.
Unidoâs distinct protocol facilitates investment in DeFi by leveraging its efficient proprietary and multi-sig key signing technology. Furthermore, users have the unique capability to manage crypto banking operations in complete security.
Under the decentralized platform, assets management enterprises and crypto native companies are ensured agility and efficiency for the custody of their respective digital assets. This creates a strong bridge for firms and organizations to interface with DeFi networks as they remain compliant with licensing and regulatory requirements.
The platformâs algorithm works best by leveraging, as well as supplying clients with a great deal of crypto trading, payments, and banking solutions.
Through Unidoâs user-friendly protocol, participants essentially have access to three main features all responsible for the systemâs special implementation of the blockchain, namely, Enterprise Crypto Banking Suite, DeFi Vault Access, and Governance/Security features.
A business banking portal, through which firms can manage day-to-day operations and capital expenditure. This feature empowers users with a multi-user wallet management protocol that creates, assigns, and manages clientsâ wallets.
Additionally, it is equipped with user governance tools providing access to rights and access requirements unique to the blockchain solution. Overall, this business banking portal is a simple and intuitive instrument with an interoperable, modular architecture that provides analytics on DeFi transactions, activities, and trends.
DeFi Vault Access
The vault access is a multi-signature enterprise wallet or DeFi vault used to store, manage, and invest digital assets in an efficient and safe manner.
The team behind the wallet describes it as a secured and most importantly, a well-integrated bridge into several prominent DeFi investment solutions such as UniSwap, Yearn Finance, and Balancer. Additionally, the vault provides users with a complete overview of investment opportunities within the DeFi space, as well as potential returns and benefits within specific DeFi networks.
Supported by a portfolio performance dashboard, this feature facilitates the management and investment of digital funds.
Governance and Security
Through this blockchain-based feature, the Unido enterprise platform (EP) provides users with an array of security and management instruments ensuring the safety of all funds within the platform.
The Unido platform guarantees blockchain-based security and agnostic architecture, rendering it versatile and applicable to any given on-chain use cases. Powered by a key signing technology, Unido EP ensures flexible and trustworthy governance, which provides assets access only to permitted entities and parties.
Unido Token ($UDO)
The platformâs utility token, $UDO, is the fuel behind Unidoâs efficient implementation as it is used to drive network access, ensure transaction security, governance, and network management. Overall, the token is built on a trustworthy smart contract algorithm guaranteeing the development and expansion of the Unido network in the future.
Furthermore, the token facilitates access to the platformâs variety of products to all users, including institutions and developers. UDO has three main use cases, being network access licenses, consumption fees, and DAO Governance.
$UDO Tokenomics
Total Supply: 115,000,000 UDO
Initial Market Cap:$487,813
Seed/Private/Pre-Public Sale Fundraising: $1,400,000
Seed Sale: $0.04, 0% TGE, 20% monthly unlock
Private Sale: $0.05, 25% TGE, 25% monthly unlock
Public Sale:: $0.06, full unlock
Deflationary Economics:
Phase 1: From consumption fees, 60% burn, 20% to EDF, and 20% into reserve. Phase 1 when token supply is reduced by 20%.
Phase 2: After enterprise products take off, 50% of fees to be invested into EDF & 50% into reserve.
UDO Use Cases
Network Access License
All applications and Unido EP features will only be available via a license purchasable with the UDO token. Once the license is bought, the tokens are removed from circulation and placed into a secured smart contract until the license eventually expires.
Companies are provided with annual licenses for the Unido platform, where fees are determined by the volume of usage for the target clients and the number of users.
Consumption Fees
All fees and consumption charges within the Unido ecosystem and auxiliary platform will be based on the volume of usage within the platforms. Additionally, UDO will be used to authenticate each transaction within its parent platform.
All operations from developers will either be charged under a subscription model, Freemium model, paid model, or In-App model, all depending on the user specifications and needs.
DAO Governance
In general, the DAO will oversee Unidoâs Ecosystem Development Fund (EDF) and allow for the subsidizing of new applications implementation and development, which will contribute to the diversification of the platform.
Unido EP aims to be a leader within the blockchain space by spearheading the race toward mass adoption; especially within the traditional financial sector. The platformâs drive to provide secured banking management tools is a great boost for wide DLT acceptance.
Overall the Polkadot-based platform is a dynamic implementation of decentralized technology, which guarantees total accessibility and security through key features lacking in most solutions of its genre on the market.
Unido Enterprise Platform is ahead of the curve as it provides a sure connection with blockchain giants, ensuring its growth and development in the future. Unido will likely become a leader within the blockchain given the protocolâs current algorithm and products.
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.
Fees are an unavoidable part of cryptocurrency trading- or are they? Charged by cryptocurrency exchanges on each trade or transaction on their platform, these fees can add up to quite a substantial amount, especially during the bull market when people are actively trading. Therefore, people are eager to find any way to save money on cryptocurrency trading fees, and to maintain competitiveness, many exchanges do offer discounts or perks for their loyal customers. In this article, we take a look at some of the ways in which you can lower or even have no trading fees, and the discounts offered by some cryptocurrency exchanges.
What are crypto exchange fees?
Cryptocurrency exchanges charge customers fees for transactions or trades done on their exchange. Some types of crypto exchange fees include:
Deposit/withdrawal fees
Exchanges are basically a platform for customers to trade cryptocurrencies, so they would need to deposit or withdraw cryptocurrency to the exchange platform in order to use it. Exchanges charge a fee when customers deposit or withdraw cryptocurrencies onto or from their platform.
Trading fees
This is charged by exchanges whenever cryptocurrencies are converted to other cryptocurrencies or fiat, and vice versa.
Most popular exchanges such as Binance charge trading fees based on a maker/taker structure with taker fees being higher than maker fees. Takers are when the user places an order that is able to trade immediately (whether partially or fully) before it enters the order books. They are known as “takers” because they “take” volume from the order books. On the other hand, maker fees are charged when the user places an order that goes onto the order book (whether fully or partially) i.e. “making” the market.
Interest/Borrowing/Liquidation Feesâ
These fees are charged when users are involved in margin trading i.e. borrowing funds to increase your position. The amount of these fees usually depends on the amount borrowed on margin together with an interest rate. Margin trading however is very risky, and one of the reasons for this is because if the trade does not go your way you would become liquidated. When this happens exchanges also charge a liquidation fee.
VIP programs
Exchanges usually offer exchange fee discounts for their frequent users. This is usually based on a VIP tier structure where frequent users (based on their trading volume over 30 days) can qualify for higher VIP tiers which entitle them to cheaper fees. The requirements for the VIP tiers and discounts offered differ between exchanges.
Binance’s VIP program requires users to have a certain trade volume over 30 days and have a specified balance of their native token known as Binance Coin (BNB). For the first VIP tier, users must have a trading volume of 50 BTC or more and hold 50 BNB or more. Check here for more details.
Coinbase does not have a VIP program. However, Coinbase charges a fee for withdrawing from their platform and for transactions. The fees are calculated based on several factors such as the payment method, size of order and market conditions etc. The amount of such fees will be disclosed at the time of the transaction. Learn more about Coinbase fees and how you can avoid them.
Many exchanges have their own native token, and holding their token entitles users to discounts.
Binance Token (BNB) is Binance’s native token. Binance allows users to pay for trading fees using BNB, and by doing so users can get 25% off both trading and margin trading fees, and 10% off futures trading fees.
Woo Xfor instance also has their native WOO token. Users can enjoy discounts on maker/taker fees by holding as little as 300 WOO tokens, and only 1,800 WOO tokens are required to reach 0% maker and taker fees. The WOO token can also be used for yield farming and as collateral for borrowing and lending on various DeFi platforms. Click here for more details.
Both Coinbase and Kraken do not have their own native token.
Discounts for staking exchange tokens
Some exchanges allow users to stake the native token i.e. to lock the token up for a specified period in return for additional rewards. Some rewards include fee discounts, additional tokens (i.e. yields), increased airdrop rewards and the ability to participate in the exchange’s initial exchange offerings (IEOs).
Binance also allows users to stake their BNB in their Vault in return for BNB yields. Whilst there are no direct perks for staking BNB, as mentioned previously Binance users get 25% off trading fees when they pay with BNB.
WOO X users are required to stake their WOO tokens in order to enjoy the trading fee discounts mentioned in the previous section. Other rewards for staking include eligibility for airdrops.
Neither Coinbase or Kraken offers staking in their exchange token.
Conclusion
Cryptocurrency exchange fees can add up especially when you are a heavy user. With the many exchanges out there, competition is fierce to attract users since they make money on each transaction you do. One of the major ways to do this is to offer discounts on fees for using the exchange. Most, if not all cryptocurrency exchanges offer discounts simply for frequent or high volume users with tiered VIP programs. Exchanges such as Binance are more creative, utilising their native token or having staking programs which boost users’ rewards. At the end of the day, the rewards offered are only one aspect to consider when deciding which exchange to choose, other factors include the number of cryptocurrencies supported and security etc. Intended users, especially those from the US, should also check carefully as some exchanges may have features that are not available to US citizens.
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.
There is a lot to consider when it comes to cryptocurrency investment and trading, and crypto exchanges are a great way to start. It is a good platform for beginners to familiarize themselves with the market as well as for experienced traders to make use of the various products the exchanges offer.
There are hundreds of crypto exchanges, and everyone is asking. “which crypto exchange is the best?” Everyone wants to get the best bang for their buck, whether it be low trading fees or lucrative products. We will be comparing two of the top and most talked about crypto exchanges in the world: Binance and FTX Exchange.
FTX EXCHANGE (INCLUDING FTX INTERNATIONAL AND FTX.US) ARE NO LONGER IN OPERATION
Both exchanges have filed for bankruptcy. Subsequently, the exchange was “hacked” and more than US$600 million worth of cryptocurrencies drained. The hacker is strongly rumoured to be a former FTX employee. For more about how this story unfolded and the latest news, check out these articles:
Founded in 2019, FTX Exchange is a cryptocurrency trading platform that was built by Alameda Research, a quantitative trading firm that develops specialized algorithms for trading crypto. It has topped many trading charts by volume and is responsible for 30% of the market trading volume on major exchanges.
The strong trading background of FTX shows that they live up to their claim of being an exchange “built by traders, for traders.”
FTX is largely focused on the derivative and prediction market, offering a wide array of futures, options, and volatility products with competitive trading rates and discounts for specific users.
FTX Exchange has been growing significantly over the past year, exploding past the likes of KuCoin and Kraken. They even managed to take market share away from Coinbase as well, which is the number one crypto exchange in the U.S. This is in part thanks to huge venture capital funding that is backing FTX.
Check out FTX Exchange Guide for a full review and tutorial on how to use FTX Exchange.
What is Binance Exchange?
Binance was founded in 2017 by Chengpeng Zhao (CZ), former Chief Technology Officer of OKCoin who has years of experience developing high-frequency trading software.
Binance is, by a large margin, the world’s most popular cryptocurrency exchange. It has more than than $25 billion in organic trading volume per day and millions of users worldwide.
Binance is largely focused on the spot market and has one of the most cryptocurrencies available to trade. It also has powerful trading tools such as leveraged trading, options trading and lending platform.
For the longest time, the trading platform scene is dominated by Binance, and is held in high regard for being smart and proactive in their planning and actions, not only for themselves but also for developing the crypto industry as a whole.
This is a significant step since it enables both exchanges to function in accordance with international standards, and meet the criteria of major regulators like the Financial Action Task Force.
Binance vs FTX Exchange Overview
In this section, we will take a closer look at what Binance and FTX have to offer and compare them based on these features:
Products
Supported cryptocurrencies
Fees
Security
Products
Binance and FTX have quite a lot of similarities based on their general offering. But the major difference is that Binance is more focused on the spot market and has more cryptocurrencies to offer, whereas FTX is more focused on the derivative and prediction market and has more volatility products. Therefore, FTX is usually seen as the preferred choice for experienced traders who want a wider (and potentially higher risk/reward) range of products.
Both exchanges offer products that are exclusive to them. Binance offers Crypto Loans, a P2P market, and Binance Earn, while FTX offers volatility and prediction markets. The addition of FTX stocks makes it the first domestic crypto exchange to provide stocks on its platform, enabling trading of stocks and ETFs by U.S. users.
FTX’s crypto card is exclusively accessible to US residents via the FTX US platform, whereas Binance’s crypto debit card has gained enormous popularity. While FTX places a greater emphasis on specialized trading products, Binance has more to offer in terms of their Binance Earn, allowing users to earn passive income.
Both Binance and FTX offers a mobile app for iPhone and Android so users can trade cryptocurrencies on the go.
Supported cryptocurrencies
Binance has the highest number of cryptocurrencies that any exchange offers to its users. It currently has 1,300 cryptocurrencies including its own native crypto, Binance Coin (BNB).
Nevertheless, FTX offers a lot of cryptocurrencies for users to trade, though not as large as Binance’s. FTX supports over 460 cryptocurrencies including its own native crypto, FTX Token (FTT).
Both exchanges however, are consistently adding to their lists of supported cryptocurrencies, including newly launched tokens.
Fees
The rates on both exchanges’ spot trade markets are extremely low, and they continue to decline as volume rises. However, FTX wins out since it assesses 0.02% as a maker fee and 0.07% as a taker fee for tier one accounts.
This is significantly lower than Binance fees, i.e. 0.1% maker and taker fee. Even after using BNB for trading fees, the user will have to pay a 0.075% fee, which is higher than FTX.
We can see that FTX is better for trading, and is clearly a winner in this category.
Security
One of the most important considerations when choosing an exchange is security. It’s safe to say that Binance and FTX are two of the most secure exchanges in the world.
Both exchanges use two factor authentication, and they store account funds and data away from online platforms so that they cannot be hacked. They also insure their funds by putting a certain amount of fee away as an insurance fraud.
Both platforms also employ round-the-clock monitoring and analysis, and in the case of a theft, user funds are protected by the reserves that both firms have in their treasuries.
FTX is one of the few exchanges that have never been hacked, and while Binance has seen some hacking incidents in the past, both exchanges adhere to the strictest industry security guidelines, with the majority of funds being kept in cold storage. FTX also does third party transaction audits via Chainalysis, giving them a slight edge over Binance.
However, we must also consider the fact that Binance has been around longer and has a much larger trading volume than FTX, making them a more attractive target to hackers. But Binance has managed to hold their ground and plan for the worst, and is still one of the top performing exchanges despite the bear market.
Conclusion
Binance and FTX have quite a lot of similarities based on their general offering. But the major difference is that Binance is more focused on the spot market and has more cryptocurrencies to offer, whereas FTX is more focused on the derivative and prediction market and has more volatility products.
Binance offers the most cryptocurrencies to trade including new projects such as DeFi, NFT or metaverse gaming. If you are a beginner or looking for new tokens to trade, or even an experienced investor who prefers passive earnings, Binance would be a better option for you.
If you are an experienced trader who strictly does day trading or skilled at volatility products, FTX would be the go-to for you as it offers all the products traders need, with significantly low fees.
Disclaimer: Cryptocurrency trading involves significant risks and may result in the loss of your capital. You should carefully consider whether trading cryptocurrencies is right for you in light of your financial condition and ability to bear financial risks. Cryptocurrency prices are highly volatile and can fluctuate widely in a short period of time. As such, trading cryptocurrencies may not be suitable for everyone. Additionally, storing cryptocurrencies on a centralized exchange carries inherent risks, including the potential for loss due to hacking, exchange collapse, or other security breaches. We strongly advise that you seek independent professional advice before engaging in any cryptocurrency trading activities and carefully consider the security measures in place when choosing or storing your cryptocurrencies on a cryptocurrency exchange.
Cryptocurrency exchanges allow people to buy/sell/trade cryptocurrencies such as Bitcoin or Ethereum. Here are our picks for the top cryptocurrency exchanges of 2023:
For this article, we also split our picks for top cryptocurrency exchanges of 2023 into 2 tiers. Exchanges that we at Team Boxmining use frequently are in Tier 1, and those we occasionally use are in Tier 2. However, this is only based on our personal preference. You should also always check if the exchange is available in your country and if there are any restrictions.
In our view, a good cryptocurrency exchange would have the following features:
A good security track record: A good cryptocurrency exchange should not have suffered any significant hacks. And even if there have been hacks, a good exchange reacts quickly and ensures customers’ funds are fully recovered.
Transparency: A good crypto exchange will be open about where users’ deposits are held. They should also promptly update customers when any issues arise, such as when there are hacks or negative press.
Responsive customer service: Good cryptocurrency exchanges should have 24-hour customer support and multiple points of contact e.g. email, live chat, etc.
On the other hand, here are some features we’ve noticed with bad cryptocurrency exchanges:
No KYC (know-your-customer) policy: KYC is admittedly troublesome. But, it is a necessary safeguard for all crypto traders: This is because if the exchange collapses or there is a hack, KYC proves you are their client and that any funds deposited belong to you.
Issues with withdrawals: Some exchanges have been known to ban or suspend your account for large withdrawals or trades without notifying you first. The exchange will then make you communicate with them to “resolve” the issue.
No proof of reserves: The collapse of FTX exchange brought to the forefront the question of how crypto exchanges really handle customers’ funds. Since the incident, many major crypto exchanges have taken the initiative to provide evidence showing that they have funds to cover all users’ assets 1:1.
Top Cryptocurrency Exchanges 2023: Tier 1 (Active Trading)
Binance
Binance was founded in 2017 and has over 120 million registered users. Since the collapse of FTX, Binance has (by far) the highest 24-hour trading volume and monthly site visits. Binance also supports over 1,300 cryptocurrencies, making it a good choice for any level of crypto trader. In fact, Binance is so popular that the mere news of new coins being listed on the exchange can cause its prices to skyrocket.Â
The popularity of Binance has made its CEO Zhao Changpeng (CZ) a celebrity in the cryptocurrency community. His Tweets now have a significant influence on the cryptocurrency markets.
As for security measures, Binance has an asset fund as insurance in case of misappropriated user funds. Binance has also provided proof-of-reserves showing they have sufficient funds to cover users’ assets 1:1 plus additional reserves.
Binance offers services to US customers via Binance.US. But Binance.us has fewer supported cryptocurrencies and features.
Binance is Team Boxminingâs most frequently used exchange. It is easy to use and has a responsive customer service team. Credit is also due to Binance being able to overcome every wave of FUD (fear, uncertainty and doubt) that has come their way so far. In fact, in December 2022, there were rumours that Binance did not have sufficient reserves to meet clients’ deposits. During that time, many crypto traders withdrew funds from exchanges, which Binance nevertheless handled very efficiently.
We saw some withdrawals today (net $1.14b ish). We have seen this before. Some days we have net withdrawals; some days we have net deposits. Business as usual for us.
I actually think it is a good idea to âstress test withdrawalsâ on each CEX on a rotating basis. đȘ
Binance also caters to experienced traders with advanced trading options and plenty of analytics. Novice users will inevitably experience a learning curve, but once you find your way around, it becomes almost second nature.
KuCoin refers to itself as “The People’s Exchange”, serving over 20 million customers in over 200 countries. They have over 700 supported cryptocurrencies meaning you can trade lots of small-cap tokens with low trading fees. $KCS token holders are also entitled to 20% off trading fees.
At Team Boxmining, we find that when trading small-cap coins, we need to use MetaMask and then trade on platforms such as Uniswap or PancakeSwap. And if itâs an ERC 20 token you would have to pay ridiculously high gas fees. Not to mention you cannot do this on the go via mobile phone. Therefore, if these small-cap tokens are listed on KuCoin, you can save a lot of unnecessary costs and missed opportunities.
We at Team Boxmining love using the KuCoin app as it allows us to trade everywhere. The app is also very responsive and not buggy. We are also very happy to see that KuCoin’s updated app allows you to filter your trading history to only see your current trading pair. So now you can quickly see the price at which you previously traded the same coins. The KuCoin app is not buggy, unlike Gate.io as will be seen later.
It is also worth mentioning that KuCoin have suffered hacks in 2020 and 2021. Although they were unable to completely recover the stolen cryptocurrencies, they were still able to make users whole through their insurance fund.
SwissBorg
SwissBorg is an extremely popular exchange amongst European crypto traders. Based in Switzerland, they are fully compliant with Swiss Law. However, compared to other exchanges, SwissBorg has very few supported cryptocurrencies (around 30 cryptocurrencies and 16 fiat currencies). But, they will consistently add new ones.
SwissBorg’s Smart Yield is a popular feature that allows users to earn passive income. Users deposit cryptocurrencies into their Smart Yield Wallet and they can redeem yield every 24 hours without any minimum investment period. The amount of yield varies according to market conditions and on which cryptocurrency. So for example, currently USDT yields 5.30% p.a., whilst Swissborg’s native token $CHSB yields 15.82%!
One major downside however is that SwissBorg is not available in the US. Also, not all its features are available in every country. See here for which Swissborg features are available in your country.
Coinbase is arguably the most popular exchange in the US. They are the first publicly listed US crypto exchange and they are fully compliant with US laws. Their mobile app is also very beginner friendly and allows users to directly fund their account from their US bank account.
ByBit is mostly known for derivatives trading. This is because ByBit allows trading at up to 100x leverage. This means traders can trade a position worth $10,000 using only $100. However, this means whilst your gains can be amplified, so can your losses.
ByBit has not been hacked. They, along with most major exchanges, have also provided proof-of-reserves showing that they have sufficient cryptocurrencies in their wallets to meet users’ assets.
However, ByBit is not available in the US. Also, there are no KYC procedures, which means that if there are issues with the exchange, there may be difficulty in proving to the exchange that you have deposits with them.
ByBit has its own coin, known as BitDAO ($BIT) which entitles holders to trading fee discounts. But compared to other exchange tokens (e.g. Binance’s BNB), BitDAO is not widely traded.
Whilst ByBit also offers a wide range of products, we only use ByBit for its derivatives trading features. This is because ByBit has comparatively fewer supported cryptocurrencies. However, for derivatives trading, we appreciate its industry-leading transaction speeds (135,000 transactions per second!). It also has a high trading volume meaning that there will consistently be others you can be trading against at any given time.
Top Cryptocurrency Exchanges 2023: Tier 2 (Occasional Trading)
Kraken
Kraken was relaunched in 2013 and are popular amongst the European cryptocurrency community. The exchange supports over 185 cryptocurrencies (see here for a full list) and offers limited services to US customers.
Kraken offers spot, margin and futures trading. But one standout One welcome feature is its OTC (over-the-counter) desk services. This allows traders to execute peer-to-peer orders off the Kraken exchange. It is a personalised and private service popular amongst institutional or high-net-worth traders. This is because OTC desks allow for better deals on larger orders.
Huobi and OKX were the most popular cryptocurrency exchanges in China. Despite a crackdown on cryptocurrency trading in China, they have still managed to hold on to some of their customers. They are also both still within the top 10 exchanges with the highest 24-hour trading volume according to CoinGecko.
Both exchanges still keep updated on what customers expect from a reputable cryptocurrency exchange. For example, both exchanges have data showing their proof of reserves. They have both also taken an extra step to hire third parties to audit their assets so as to reassure users the exchange has sufficient funds to back customers’ assets on the exchange.
Gate.io
Gate.io is based in Hong Kong. They have over 1,500 coins and 2,700 trading pairs. One major benefit of Gate.io is that it offers trading of low-cap and lesser-known coins.
They have previously been revealed to have covered up the fact that it was hacked for US$230 million in 2018. Gate.io has not directly addressed this allegation and whether affected users were made whole. Nevertheless, the exchange has provided proof-of-reserves.
Whilst we do use Gate.io almost daily, we struggle to recommend it as a tier 1 exchange. The main reason is its buggy mobile application. Favorited trading pairs or displayed holdings would sometimes disappear. Also, the displayed withdrawal fees would show different amounts depending on the page.
We have had bad experiences with the exchange. For example, we were not told that a particular coin stopped trading. Worse, we could not withdraw our coins. However, given that they offer trading in some unpopular coins, many customers will have no choice but to use this exchange.
In conclusion, users research an exchange’s track record, security measures, and whether they offer proof-of-reserves. In our opinion, these are good indicators of whether an exchange is reputable. Users, however, should always avoid keeping more cryptocurrencies than necessary for trading. Because you may lose your cryptocurrencies if an exchange collapses. Therefore we recommend any crypto trader get a hardware wallet for storing their coins (such as the Ledger Nano X).
Disclaimer: Cryptocurrency trading involves significant risks and may result in the loss of your capital. You should carefully consider whether trading cryptocurrencies is right for you in light of your financial condition and ability to bear financial risks. Cryptocurrency prices are highly volatile and can fluctuate widely in a short period of time. As such, trading cryptocurrencies may not be suitable for everyone. Additionally, storing cryptocurrencies on a centralized exchange carries inherent risks, including the potential for loss due to hacking, exchange collapse, or other security breaches. We strongly advise that you seek independent professional advice before engaging in any cryptocurrency trading activities and carefully consider the security measures in place when choosing or storing your cryptocurrencies on a cryptocurrency exchange.
China’s national digital currency DCEP (Digital Currency Electronic Payment, DC/EP) will be built with Blockchain and Cryptographic technology. This revolutionary cryptocurrency could become the world’s first Central Bank Digital Currency (CBDC) as it is issued by the state bank People’s Bank of China (PBoC). The goal and objectives of the currency are to increase the circulation of the RMB and its international reach – with eventual hopes that the RMB will a global currency like the US Dollar. China has recently established an initiative to push forward Blockchain adoption, with the goal of beating competitors like Facebook Libra – a currency that Facebook CEO Mark Zuckerberg claims will become the next big FinTech innovation. China has made explicit that Facebook Libra poses a threat to the sovereignty of China, insisting that digital currencies should only be issued by governments and central banks. DCEP is not listed on cryptocurrency exchanges and will not be for speculation of value.
The significance of DCEP is that it’s designed as a replacement for the Reserve Money (M0) system, cutting back the cost and friction of bank transfers. It is suggested that DCEP will alleviate the risks of offline paper money transactions such as anonymous counterfeiting, money laundering and illegal financing. This is because regulators can better monitor digital currency transactions, which some consider will greatly improve financial and monetary supervision. DCEP can also reduce the costs involved in maintaining and recycling banknotes and coins.
Basically, DCEP is poised to become a digital version of the RMB.
Furthermore, the issuance of DCEP is conducive to promoting the internationalization of the RMB and reshaping the current cross-border payment system. This is because prior to the RMB Cross-Border Inter-Bank Payments System (CIPS) going live in early October 2015, RMB cross-border clearing and settlement was mainly done through CHIPS (Clearing House Interbank Payments System) or SWIFT (Society for Worldwide Interbank Financial Telecommunication). However, some consider that both the CHIPS and SWIFT systems have fatal flaws. Firstly, CHIPS is a US company. Whilst SWIFT, in particular, is seen as a cause for concern to the Chinese because due to its foothold in the international banking system, it is almost essential to use SWIFT for inter-bank transfers across countries. Thus whoever controls SWIFT’s data center will have access to information on almost every cross-border remittance, which some in China posit is the US. This is because whilst SWIFT claims to be a neutral international organization, 12 of the 25 directors are either from the US and her allies. Also, its transactional data were found to have been supplied to the US. Hence it is thought that China is being held back by the US via the SWIFT system, and so, in internationalizing the RMB- China requires its own worldwide banking system- i.e. DCEP.
Hence the Chinese consider that it is a requirement to form a new currency clearing network.
According to Chinese media, DCEP is seen as the “3rd Wave” aimed at the US.
A mandate to adopt Blockchain
China has established a countrywide initiative to push forward Blockchain Adoption. President Xi Jinping has mandated that the ‘countryâs development of blockchain technology should be sped up ‘ on Oct 24th in front of the Political Bureau. This speech has also been echoed by Li Wei, head of the People’s Bank of China. In April of 2020, China launched the Blockchain Service Network to unify all the Blockchain related projects in the Nation.
China has adopted the “Blockchain, not Cryptocurrency”, whereby the benefits of Blockchain is highlighted. On the other hand, cryptocurrencies that are native to Blockchain are suppressed as Cryptocurrency Exchanges and ICOs are banned in the country.
History and development of DCEP
Development of DCEP started in 2014 with the establishment of a research institute dedicated to digital currencies and looking at how to improve the Chinese Yuan system with blockchain technology. However during 2014 to 2018, the development process slowed down, probably because the decentralised nature of Bitcoin or blockchain is incompatible with the nature of the Renminbi as a legal national currency. Things rapidly picked up towards the end of 2019 however and this was directly attributable to Facebook preparing to launch Libra, particularly as partner members of the Libra Association and the currencies which Libra was to be backed by had consciously rejected China. Hence, feeling the heat of the competition, Chinaâs central bank felt immense pressure to urgently speed up in the global competition towards a digital currency.
Former Vice-chair of the PBoC’s National Council for Social Security Fund announced on 22nd June 2020 that China had already completed the backend infrastructure of DCEP.
Uses for DCEP
DCEP will be the only legal digital currency in China
DCEP is a currency created and sanctioned by the Chinese Government. It is not a 3rd party stable coin such as Tether’s cryptocurrency token “CNHT” which is also pegged to the RMB in a 1:1 ratio. DCEP is the only legal digital currency in China (cryptocurrencies such as Bitcoin are not legal tender in China).
Huang Qifan (Chairman of the China International Economic Exchange Center) said they have been working on DCEP for five to six years now and is fully confident it can be introduced as the country’s financial system. It’s currently being rolled out, with the People’s Bank of China issuing the currency. According to a speech by Huang at the China Finance 40 Forum, “DCEP can achieve real-time collection of data related to money creation, bookkeeping, etc, providing useful reference for the provision of money and the implementation of monetary policies.”
DCEP is not for speculation
China has made it explicitly clear that its National Digital Currency is not for speculation. Mu Changchun, Head of the People’s Bank of China digital currency institute made it as “a digital form of the yuan” and that “The currency is not for speculation. It is different to Bitcoin or stable tokens”. This is to the disappointment of the online community in China, where some netizens commented “So there will be no fun in it” on Sina.com.
It is also not possible to mine DCEP or stake on the DCEP network.
Cross-border payments with m-CBDC Bridge
China has joined forces to explore cross-border payments for digital currencies alongside Hong Kong, Thailand, the United Arab Emirates (UAE), and the Bank of International Settlements (BIS).
According to a joint statement in February 2021, the Peopleâs Bank of China and the UAEâs central bank are taking part in the Multiple Central Bank Digital Currency (m-CBDC) Bridge project initiated by the Hong Kong Monetary Authority and Bank of Thailand in 2019.
The m-CBDC Bridge project will explore the capabilities of distributed ledger technology, through the development of a proof-of-concept prototype. The project ultimately aims to facilitate cross-border, multi-currency, real-time transactions around the clock.
This move aligns with Chinaâs long-term ambition to use DCEP to boost the use of RMB in international payments. While the project is currently an alliance between just Beijing, Hong Kong, Bangkok, and Abu Dhabi, it is strongly supported by the BIS, an organisation owned by 63 central banks.
The announcement also comes mere weeks after Chinaâs joint venture with SWIFT, the dominant network facilitating international payments between banks. The new entity, Finance Gateway Information Service, was registered in Beijing on January 16 with âŹ10 million (US$12 million) as incorporation capital, according to the National Enterprise Credit Information Publicity System, the Chinese governmentâs enterprise credit information agency.
Special features of DCEP
DCEP is a Centralized Currency
DCEP is a digital currency that is run on a centralized private network – the Central Bank of China has complete access and control of the currency. This is a huge contrast to Bitcoin, which has an open decentralized network where there is no centralized leader. In the case with DCEP, the Central bank of China has the ability to create or destroy DCEP.
NFC Contact based payment
According to Official Sina Blockchain, DCEP will have NFC based payment options that don’t require devices to be online during the transfer. This will be poised as a direct replacement of paper money, as DCEP will be usable in areas without internet coverage. In addition, DCEP doesn’t require the mobile device to be bound to a bank account – meaning the unbanked population will also have access to the digital currency.
With DCEP’s tap payment feature people can transfer money simply by tapping two phones together, without the use of the Internet. So DCEP is not exactly like blockchain either, rather it is their own variant.
China Construction Bank launches DCEP wallet
On 29th August 2020, China Construction Bank (CCB) had a soft launch of the DCEP wallet. Users of one of China’s big four state-owned commercial banks found a DCEP wallet feature was available inside their mobile app. Users were even able to navigate to the digital yuan wallet and activate it through registering their mobile phone numbers.
Finally, users can send/receive digital currency to others by inputting their unique wallet ID or the phone number associated with the bank account.
CCB DCEP wallet
However, CCB has disabled the DCEP wallet feature from public access, but not before it gained huge attention. Users searching for this wallet now will only get an error message saying that the function is not yet officially available to the public.
Tencent to be a major partner of DCEP
Tencent’s Meituan Dianping has been in talks with the research wing of the PBoC on real-world uses for DCEP. Meituan Dianping boasts billions of dollars in daily transactions on their mobile app platform offering services such as food delivery (similar to UberEats), B&B bookings (similar to AirBnb), ride hailing services, bike sharing, grocery shopping and more. Basically for those in China, all your daily necessities can be met on the Meituan ecosystem.
The PBoC’s research wing is also in talks with another Tencent-backed company, Bilibili Inc. which provides video streaming services. So whilst the specifics of the partnership are yet to be finalised, it is likely that such cooperation is going to be huge for the mass use of DCEP in China.
According to Caijing magazine, the pilot institutions for DCEP will be the 4 major state-owned banks i.e. China Construction Bank, the Agricultural Bank of China, Bank of China and the Industrial and Commercial Bank of China. This initial deployment will serve as an official production test for the currency system, where the network and security will be validated. In the second phase, DCEP will be distributed to large fintech companies such as Tencent and Alibaba to be used in WeChat Pay and AliPay respectively.
DCEP will operate on a two-tiered system
The issuance and distribution of DCEP will be based on a two-tiered system.
The first tier would be transactions between the PBoC and intermediaries. These intermediaries would be financial institutions (e.g. the 4 major state-owned banks i.e. China Construction Bank, the Agricultural Bank of China, Bank of China and the Industrial and Commercial Bank of China) and non-financial institutions such as Alibaba, Tencent and UnionPay. Here, the PBoC would issue DCEP to the intermediaries.
The second tier would be between the above-mentioned intermediaries and participants in the retail market such as companies (e.g. retail stores) and individuals. In this tier, the intermediaries that have received DCEP will distribute it to retail participants so that it would circulate through the market e.g. through people purchasing items at stores etc.
The main difference in the issuance and distribution of DCEP compared to traditional cash however is the fact that DCEP would be transferred through electronic wallets, rather than bank accounts.
The central government has mandated that all merchants who accepted digital payments (such as Apple Pay, AliPay and WeChat) pay must accept DCEP. This will give DCEP a large nationwide acceptance in China, with every merchant obligated to participate or face a potential loss of their business license. This will make DCEP the most accepted digital currency in the world.
DCEP red packets to be launched for Chinese New Year
China’s DCEP app has launched a red packet gifting feature in time for the Chinese New Year on 22nd January 2023. The app will allow users to send the red packets i.e. “hongbao” containing DCEP to others. This is based on the Chinese New Year tradition of gifting lucky money during the annual festival. In fact, WeChat Pay and Alipay already have this feature for gifting CNY. However, it is the first time that e-CNY will be gifted in such a way, with hopes that this will further pave the way for the mass adoption of DCEP.
DCEP can be used to pay expressway tolls
On 28th December 2022, Chongqing Expressway Group announced it has completed the installation of equipment to accept DCEP for expressway tolls. From 30th December 2022, DCEP can be accepted as payment for tolls on the Chongqing Expressway. Users will need to download the e-CNY app and then simply present the payment QR code at the toll booth.
PBoC’s financial statistics reports now include DCEP/e-CNY
On 10th January 2023, the PBoC released its annual Financial Statistics Report for 2022. What is worth noting is that for the first time, the PBoC included statistics on DCEP/e-CNY. The Report states that as of the end of December 2022, the amount of digital currency in circulation was 13.61 billion yuan. This equates to around 0.13% of the total balance of yuan (13.61 trillion yuan) in circulation at the end of 2022.
Are people in China using DCEP?
According to a report on 28th December 2022, there has been over US$14 billion worth of DCEP transactions since its launch in 2020. Meanwhile, 261 million users have already set up an e-CNY wallet. However, this is considered low adoption since around 903.6 million people use mobile payments in China, according to a 2021 UnionPay report.
DCEP scams
Mere hours after DCEP has been announced, various (potentially scam) Chinese exchanges have listed IOUs or knock-offs clones of DCEP. It’s important to know that DCEP is currently only distributed to banks working with the PBoC and will not be available for the public. If you want to find out what are reputable exchanges, check out our top cryptocurrency exchanges guide. It is strongly recommended NOT to trade DCEP until it is officially released as there is no guarantee exchanges have access to the digital currency.
Knock-off clones of DCEP are already trading in (potentially) scam exchanges.
How to buy DCEP?
Currently, DCEP is only available to other banks working with the People’s Bank of China. This will eventually open up to the general public in 2020. There are currently no cryptocurrency exchanges that trade DCEP.
Implications of DCEP?
Is DCEP a challenge to the US monetary system?
The overwhelming view appears to be yes, both from the Chinese and the US perspective. According to statistics from the World Bank, 1.7 billion adults around the world use cash because they don’t have bank accounts. However, two-thirds of this population own a mobile phone, which can be used to make monetary transactions. This is what’s been happening in China, where mobile payments such as Alipay or WeChat Pay have more than 1.7 billion customers across China. Currently, the two online payment companies handle more payments monthly than Paypal did in the whole of 2017 (i.e. USD $451 billion). It’s very common in China to see street vendors accepting Alipay or WeChat pay.
Alipay and WeChat being accepted at an ATV rental shop
With the mobile wallet payment infrastructure in place, their cooperation with the PBoC could be the answer to distributing DCEP overseas. This would fit China’s “Belt and Road Initiative”, the aim of which is to build a new trade route connecting Asia with Europe and Africa. The idea is that with DCEP being used by mobile wallets, populations along the Belt and Road can be connected, bypassing existing financial infrastructures completely and giving an opportunity for the unbanked to pay for online purchases and build their savings.
In the US, the government does not see a demand for digital currencies. In a letter from the Chairman of the Federal Reserve, Jerome Powell, he took the view that many of the challenges a digital currency intends to solve do not apply to the US. In his view, the US payments landscape is already highly competitive and innovative, with plenty of digital payments options for consumers. Powell also commented, echoing the sentiments of those US lawmakers opposing Libra, that a digital payment where you would know and be able to track each and every payment would be unattractive for the US.
Whilst the House Committee on Financial Services also sees Libra as potentially raising national security concerns, observers consider the challenge from China is not being taken seriously. Because on the other hand, China is worried that Libra will reinforce the dominance of the US Dollar and is therefore working on fast-tracking the launch of DCEP. And it is likely that China will outrun the threat from Libra.
From a wider perspective, some take the view that DCEP can be used as a weapon against the US in an economic war. This is because as DCEP becomes accepted across the Belt and Road, China will have the power of total surveillance and control over the economic activity of potentially half the world’s population. DCEP will allow China to track everyone’s spending and transactions, and can seize or lock customers’ digital assets in their mobile wallets. We’ve already seen this in China, where together with its “social credit system”, millions of individuals have already been barred from purchasing airline tickets using their mobile wallets.
Appearance on Chinese television debate show “Tiger Talk”
On 29th August 2020, I appeared on China’s Phoenix Television show “Tiger Talk” (äžèäžćžè«). Tiger Talk is one of Phoenix TV’s longest-running shows, each week they feature a debate on a major societal issue or event, and would invite experts, academics and guests to participate in the discussion. I was invited by Phoenix Television as an overseas analyst to discuss the topic of the week, namely, “DC/EP: China’s release of digital currency, will it shake the US Dollar’s hegemony?”. You can watch the episode here.
Guest appearance on Tiger Talk
Implications of DCEP on Bitcoin and cryptocurrencies
In the first instance, it should always be borne in mind that DCEP and Bitcoin/cryptocurrencies are vastly different. Key differences are that DCEP does not necessarily use blockchain technology and that it is a centralised currency under the control of a centralised authority. Learn more about the differences between DCEP, Libra, Bitcoin and Cash.
However, the large scale promotion of DCEP on national television in August 2020 is certainly bracing and preparing Chinese citizens for a digital version of the RMB. The gradual rollout of DCEP will also get the average citizen accustomed to the actual usage of digital currencies.
As a result, many people are excitedly speculating on the possibility of a bridge between DCEP and various existing blockchain projects- with some projects proclaiming they will be the first project to launch on DCEP. However it must be borne in mind that we do not know the full technical details of DCEP, so we do not know how this bridge between blockchain and DCEP will work, if at all. Also, the fact is that China is currently very hostile towards cryptocurrencies, this is mostly due to a number of cryptocurrency scams- such as Plus Token. As a result, the Chinese government have closed several bank accounts found to be involved in cryptocurrency transfers and banned all ICOs, several major cryptocurrency exchanges such as Binance and OKEx and some Over the Counter desks. Hence a lot of cryptocurrency circles and discussions occur underground, such as in private WeChat groups.
In a confusing twist, however, the CCP’s official media outlets ćèæ¶æŻ, Xinhua and CCTV have been pushing out headlines that crypto assets are the best-performing asset year to date. Dovey Wan, Founding Partner of Primitive Ventures has observed that the real intent behind this media push is difficult to interpret, but so far the Chinese cryptocurrency community see this as a signal that crypto has reached its top. Meanwhile, on the Western front on Twitter, people have been seeing this as a bull signal. Currently, without any further moves or news in China about DCEP or on the cryptocurrency front, we can only wait and see what China’s next move will be.
Hmm this is an interesting propaganda vibe from CCPâs official media outlets as âćèæ¶æŻâ, Xinhua and CCTV2
the headline âcryptoasset is the best performing asset YTDâ was featured on all avenues, news paper, online media and TV
Will DeFi push governments to finally adopt CBDCs?
Decentralised Finance (DeFi) can be considered the cryptocurrency and blockchain star of 2020, having revived the cryptocurrency market and bringing some much-needed revival and positivity. But what is DeFi? In short, DeFi attempts to bring traditional banking to developing industries, but with a twist: it would be open-source, decentralised, cheap and will cut out the middlemen. (Xanax)
So what can central banks and government do to maintain their dominant status quo whilst benefitting from the technology that DeFi can bring? An answer could be to create a CBDC. In a Forbes article, the author suggests that CBDC would be a positive move for governments since it tokenises money whilst allowing users to enjoy the advantages of cheaper, faster transactions.
The article also touches upon our coverage of DCEP and discusses China’s progress in testing DCEP contrasted with the progress of introducing a CBDC in the US. It suggests that governments and institutions, however, will need to be quick to catch up as new DeFi solutions in payments, mortgage, insurance etc. are being created weekly, and this legion of fintech innovators are growing. These innovators challenge the status quo, and with the mounting advantages of DeFi, there may soon be a real contender vying for the attention of citizen-consumers.
FAQs
Is DCEP backed by Gold?
The simple answer is u0022Nou0022. On a recent episode of Kitco News, journalist Max Kaiser claimed that China will launch a gold-backed cryptocurrency, with the intention of destroying the USD as a reserve currency. He added that China has already amassed as much as 20,000 tons of gold. However this is mere speculation – China has no plans to return to the Gold Standard nor issue gold-backed cryptocurrencies.
Will DCEP be interoperable with other Cryptocurrencies
There are many plans to build gateways that allow the swapping of DCEP to other cryptocurrencies. Projects such as Algorand have stated they want to support DCEP and build possible bridges to swap these currencies. However, as the technical details of DCEP have not been fully revealed, such bridges have not been built yet.
Who can issue e-CNY?
There are 7 Chinese commercial banks that can provide e-CNY. They are: ICBC, Agricultural Bank of China, Postal Savings Bank of China China Construction Bank, Bank of China, Bank of Communications, and China Merchant’s Bank. There are also 2 online banks that can provide e-CNY i.e. WeBank (WeChat Pay) and MyBank (Alipay).
Which Chinese Cities can sign up and use the e-CNY app?
Currently, there are 12 cities and areas in China which can sign up and use the e-CNY app. They are Shenzhen, Suzhou, Beijing Xiong’an, Chengdu, Shanghai, Hainan, Xi’an, Changsha, Dalian, Qingdao, and Zhangjiakou.
Can tourists or non- Chinese locals use DCEP?
No, DCEP is not fully rolled out yet and is only available in select cities in China.
Is China using DCEP?
According to a report on 28th December 2022, there have been over US$14 billion in transactions since the launch of DCEP in 2020 and October 2022. Meanwhile, 261 million users have already set up an e-CNY wallet. However, this is considered low adoption since, according to a 2021 UnionPay report, around 903.6 million people use mobile payments in China.
When will China officially launch DCEP e-CNY?
Whilst there is ongoing DCEP/e-CNY testing on in increasing scale, there is no official announcement as to when and how China will fully roll out DCEP/e-CNY.
Disclaimer: Cryptocurrency trading involves significant risks and may result in the loss of your capital. You should carefully consider whether trading cryptocurrencies is right for you in light of your financial condition and ability to bear financial risks. Cryptocurrency prices are highly volatile and can fluctuate widely in a short period of time. As such, trading cryptocurrencies may not be suitable for everyone. Additionally, storing cryptocurrencies on a centralized exchange carries inherent risks, including the potential for loss due to hacking, exchange collapse, or other security breaches. We strongly advise that you seek independent professional advice before engaging in any cryptocurrency trading activities and carefully consider the security measures in place when choosing or storing your cryptocurrencies on a cryptocurrency exchange.
ERC (Ethereum Request for Comment) token standards are built upon and utilise the Ethereum blockchain. Most of us have only heard about the vastly used ERC-20, while becoming more familiar with the ERC-721 and ERC-1155 token standards thanks to the growing adoption of NFTs (Non-Fungible Tokens) by upcoming projects. This article gives an overview of what are ERC tokens, their various types, and functions.
Summary
ERC tokens are special forms of smart contracts that utilise the Ethereum blockchain, rather than having their own blockchain like Bitcoin.
They can have different functions and even a combination of features.
ERC tokens can be Fungible, Non-fungible, and Semi-fungible.
What is a token and how do we classify them?
First of all, ‘tokens‘ are programmable digital units of value that are recorded on a distributed ledger protocol such as a blockchain. Basically, ERC20 tokens are special forms of smart contracts that utilize Ethereum’s blockchain. They can also be described as digital assets which are not the main currency of that blockchain. While $ETH and $BTC both have their blockchain and are thus far considered as coins, tokens don’t.
There are different types of tokens. Utility tokens differ from the rest because they usually offer a wider functionality than, for example, a means of payment (coins, like $BTC) or voting power on a platform (such as governance tokens, like $UNI). They can combine multiple purposes, are integrated into an existing protocol and used to access its services. They also provide network activity, which ensures strength of the platformâs economy.
To easily understand how they fit into the blockchain ecosystem, we need to understand how Ethereum works first: we can think of it as an operating system on top of which applications (smart contracts) can be built (written), just like developers build applications for Android and iOS. One difference being that applications on Ethereum can be decentralized (Dapps). Once we have these platforms, we can (if we want) create tokens, each time choosing the most appropriate standard for our purpose.
Years ago, when there was no standard in use, it was far more complicated for developers to make smart contracts interact with each other; they had to create specific implementation standards to develop a token and launch it on Ethereumâs network. Then, the ERC-20 came out and that heavily simplified the process.
Another distinction is between Fungible and Non Fungible tokens.
Fungible Tokens
In this case, each token is equivalent to all the others and they are interchangeable (1 $BTC will always be equal to any other 1 $BTC).
ERC-20
First proposed in 2015, itâs the industry standard and most accepted one. It makes the initial distribution of tokens extremely easy, so it became massively used in the 2017 ICOs craze. The ERC-20 contracts are composed of 6 mandatory functions and 3 optional ones.
ERC-20 contracts
6 mandatory functions:
balanceOf(): keeps track of the balance in each user wallet
totalSupply(): shows the current total supply in circulation
transfer (): lets the owner send a specific amount to another address
transferFrom(): allows a smart contract to automate the transfer process and send a given amount of the token on behalf of the owner
approve(): approves the withdrawal of tokens from the ownerâs address to the receiving address. It also guarantees that nobody could create more tokens out of nothing, keeping the supply under control
allowance(): makes sure that the owner has at least as many tokens as the amount set in the approve function; the transactions added to the blockchain have been proved valid
3 optional functions:
name(): pretty self explanatory!
symbol(): 3-4 letter abbreviation
decimals(): it is impossible to write decimal places in Solidity- only whole numbers, so this function is needed. Most tokens use 18 decimals
How to send ERC-20 tokens?
There are two ways of sending ERC-20 tokens, depending on if you want to send them directly or delegate the function to a smart contract. You can either:
call the transfer() function to send tokens to another wallet address
call the approve() function and then transferfrom() from the receiver contract
Besides the ease of use and the popularity that this standard immediately gained among the community, its main flaw soon became obvious, causing millions of dollars worth of tokens to be lost forever in smart contracts.
Limitations of ERC-20 tokens and what are wrapped tokens?
What happens if you simply use the transfer() function to send tokens to a smart contract which is not made to receive them?
The transaction will succeed and these tokens will be credited to the receiver address, butthey wonât be recognized by the recipient and they will remain there forever, unusable.
Another limitation is that since $ETH itself was obviously created before the ERC-20 standard was even developed, it is not compliant with it (nor with other standards). That is why to interact with many contracts, we need to “wrap” $ETH into $WETH (wrapped ether, which IS an ERC-20 token, pegged to $ETH 1:1).
To solve the various flaws, new standards were proposed. The most famous ones are the following.
ERC-223
Summary:
prevents funds to be lost
half as expensive
backwards compatible
This standard was proposed by a Reddit user known as âDexaranâ; it focuses on security and tries to fix the main flaw of its predecessor, by using a unique, new transfer() function, which allows tokens to be sent to either a personal address or a smart contract. Moreover, it includes a tokenFallback() function that checks the receiving contract for the same function.
Basically, if the receiver is a regular address (not a contract), the transfer will be similar to the ERC-20 one, while if the receiver is a contract, the tokenFallback() function will be triggered. If the receiving contract does not have this function, the transaction will fail but all the funds will be returned to the sender address.
Simplifying the transfer and reducing it to just one single step, the process will also be cheaper (less gas fees!). The ERC-223 standard is backwards compatible with the ERC-20, as it keeps all of the original functionalities and solves the biggest issues. The ChainLink ($LINK) token has been described by its developers as âan ERC20 token, with the additional ERC223 ‘transfer and call’ functionality of transfer, allowing tokens to be received and processed by contracts within a single transaction”.
The ERC-223 standard has never been finalized.
ERC-777
Summary:
makes transactions smoother
allows for approved operators
standard for minting/burning tokens
backwards compatible with ERC-20
This standard was developed by Jacques Dafflon and Jordi Baylina, it is similar to ERC-20 and it relies upon the ERC-1820. Before that, developers couldnât identify the functions which can be implemented by smart contracts. By creating a central registry of contracts on the network, the ERC-777 can use it to identify the interfaces a smart contract uses.
Its uniqueness is the friction reduction in transactions. It also defines a new set of functions, for example it uses send() instead of transfer(), authoriseOperator() instead of approve(), tokenReceived() handler function instead of tokenFallback().
It also allows for more customization, a list of approved operators so that people can approve smart contracts to move tokens on their behalf, and creates a standard for minting and burning tokens (very useful for particular projects).
A pure ERC-777 is not compatible with ERC-20 but the standard described how to make it compatible.
The ERC-777 standard became finalized on May 6th, 2019.
Other fungible tokens
There have been many other proposals combining some aspects of different standards into each other.
ERC-827 combines some of the advantages of ERC-223 and ERC-20 standards, it enables token transfer for a 3rd party to spend it
ERC-664 is mainly centered on modularity and makes it possible to update token contracts
ERC-677 provides a safe way for new contracts to transfer tokens to external contracts
ERC-621 can increase or decrease the token supply
ERC-884 allows companies to use blockchain to maintain share registries
Non Fungible Tokens (NFTs)
These tokens are unique: each one can have a different value ant they are not replaceable. NFTs enable the tokenization of individual assets. They can often be found in games or you can imagine them as digital pieces of art, real estate… basically anything you like. Unique tokens can be further modified adding new “tools”, hence increasing their value overtime (like new bodyparts on a racing car). Check out our video on NFTs:
Non-fungible tokens explained
ERC-721
It became famous with CryptoKitties. The contract is composed by 8 functions plus 2 optional ones. Most of them are the same or similar to the Fungible counterparts, with few important differences.
ERC-721 contracts
8 mandatory functions:
name()
symbol()
totalSupply()
balanceOf()
ownerOf(): retrieves the address that owns whichever NFT ID number is searched; ownership is defined by simply having the token
approve()
takeOwnership(): transfer the tokens from another address that currently holds them
transfer()
2 optional functions:
tokenOfOwnerByIndex(): allows NFT IDs to be searched through a list of tokens owned by the user; it is necessary if we want more ntfs
tokenMetadata( ): retrieves the metadata, i.e. info for identification
While when new ERC-20 tokens are created, the supply simply increases. In this case, things are more complicated. We have to monitor the metadata, and that is expensive in gas fees. ERC-721 defines a storing method.
A problem with this standard is that if we want to send more NFTs to someone, we will need as many transactions as the number of tokens sent.
Along with the ERC-721, a few other Non Fungible standards have been proposed, like the ERC-875 and the ERC-998.
Semi Fungible Tokens (SFTs)
In some cases, NFTs and FTs do not provide the required level of flexibility that is necessary to build new projects. As we have said, Fungible tokens are all âequalsâ while Non Fungible ones are unique.
But what if we need something that is neither Fungible nor Non Fungible? Like seat tickets?
Seat tickets (or supermarket vouchers, lottery tickets etc.) are 99% equal to on another with a very small difference, like a serial number that makes them unique, preventing double-spending/selling. When we buy a seat ticket, we don’t want someone else to have the same exact token and be able to use it if he arrives before us at the cinema.
In these circumstances Semi Fungible Tokens come in help: they hold their value until they are sold, changing from Fungible to not Fungible anymore.
In all the other standards we have considered, we need to deploy a different contract for each type of token (one contract for all the same ERC-20s, one contract for each unique NFT). It is like being at the supermarket and not being able to buy all of the groceries we want at the same time, having to proceed one item after the other, from shelf to register, continuously. If we want to be able to buy a bunch of stuff at the same time, we need a new standard, and that is the ERC-1155. It allows for different âitemsâ to be stored and created in the same contract (FTs, SFTs and NFTs), with the least possible amount of data;it is cheaper and more convenient.
For example, in a game we may exchange a currency (ERC-20) and/or NFTs (ERC-721) with other gamers; the ERC-1155 makes it possible. Moreover, it can execute a deterministic smart contract function by simply sending a token to an address (i.e. sending a token to an exchange address, the exchange could immediately return another token back to the sender’s address).
Practically, a single smart contract can mint infinite tokens forever (and it allows to save fees!)
Overall, among the Fungible tokens, some people think that the ERC-777 should be the designated one to become widely adopted. It offers, for example, more ways to protect our funds. Nevertheless, none of the above standards is without flaws and inherent risks. As a matter of fact, there are multiple reasons why ERC-20 is still the most popular one, and we canât forget to mention that a new standard would create a lot of issues and interoperability problems, at least at the beginning.
If we consider the Non Fungible world, we are yet to see an explosion in adoption, but more and more platforms and games are coming out and it will probably be one of the trends of the next years. There are different platforms where you can go and buy collectibles directly with your Ethereum wallet (such as Metamask). One of the most famous and used is Rarible.
Only time will tell us which will be the next standard in use; proposing a solution and having the community embrace it are two very different things.
Disclaimer: Cryptocurrency trading involves significant risks and may result in the loss of your capital. You should carefully consider whether trading cryptocurrencies is right for you in light of your financial condition and ability to bear financial risks. Cryptocurrency prices are highly volatile and can fluctuate widely in a short period of time. As such, trading cryptocurrencies may not be suitable for everyone. Additionally, storing cryptocurrencies on a centralized exchange carries inherent risks, including the potential for loss due to hacking, exchange collapse, or other security breaches. We strongly advise that you seek independent professional advice before engaging in any cryptocurrency trading activities and carefully consider the security measures in place when choosing or storing your cryptocurrencies on a cryptocurrency exchange.
Cryptocurrency Exchanges are facing additional regulation and scrutiny around the world. Two key exchanges – OKEX and Huobi are under regulatory scrutiny in China. One of the reasons for the scrutiny is that both these exchanges had a huge footprint in China prior to the 2017 Exchange ban. To find out about top cryptocurrency exchanges, check out our Exchange Tier List. Here are the major changes to the exchange scene in November 2020.
OKEx Exchange withdraws suspended
It has been almost a month since Okex Exchange suspended all withdrawals from the platform. This was due to one of their private key holders (Star Xu) being detained for investigation by a âpublic security bureauâ. OKEx has always claimed that Xu is not detained but only actively cooperating with the relevant authorities for something unrelated to the Exchange back in 2019.
No withdrawal has happened since 16 October 2020; in OKExâs last Twitter post, dated 9 November 2020, they claim that the function is not yet active but funds are safe and unaffected.
Withdrawals reopened!
After more than a month since their suspension announcement, Okex exchange has finally reopened unrestricted withdrawals on November 27. In addition, there will be rewards for active users. Read all the details in our developing article.
KuCoin recovers around 84% of funds in hack
As covered in our previous Newsletter, KuCoin had confirmed on 26th September 2020 that they had been hacked, resulting in around USD $236m worth of funds being lost.
On 11th November 2020, CEO and Co-founder Johnny Lyu confirmed that around 84% of affected assets have been recovered. Several means were utilised to do this, for example on-chain tracking, contract upgrade and through the judicial system.
Currently, 176 of their listed tokens have resumed full services, and it is expected that the remaining listed tokens will all be re-opened before 22nd November 2020.
(1/3) Latest updates about #KuCoin Security Incident: So far, 84% of the affected assets have been recovered via approaches like on-chain tracking, contract upgrade and judicial recovery. As asked by the law enforcements, we will publish all the details once the case is closed.
Update from CEO and Co-founder Johnny Lyu on the KuCoin hack situation
Huobi Rumors go wild
On 2 November 2020 a few big transactions worth hundreds of millions into Huobi Exchange have been spotted; although this could be routine for a big Exchange like this, users were worried since the issues with OKEx exchange were still ongoing.
There were also rumours that, similar to OKEx, key executives of Huobi were detained for investigations.
This created an escalated FUD that ended up with a massive drop in value for $HT (Huobi Token), as well as worried users quickly withdrawing their cryptocurrencies from the Exchange.
Huobi official account subsequently tweeted denying all rumours and classifying them as false.
For now, everything seems to be back to normal and no more news have emerged since.
A few weeks after Binance Jersey announced that the Exchange, launched in January 2019, will be fully closed by 30th November 2020 (no explanation was given but itâs presumed that it wasnât necessary anymore, after deposits in EUR and GBP have been enabled directly on Binance.com), Binance Uganda will cease to exist as well.
Binance Uganda was launched in June 2018 and has been the first fiat-to-crypto Binance platform, even though it had been stated more than once that it was a separate entity capable of independent decisions.
An explanation was provided by the Chief Executive Officer (CEO) Changpeng Zhao:
âAll the features that Binance Uganda provides [are] now covered by Binance.com together with our fiat channel partners. Thereâs a very minimal number of users on there, so it doesnât make sense for us to maintain two platformsâ.
The process will consist of three different phases: Closure of Deposits and New Registrations; Closure of all Trading Services, and final Hard Shutdown on the 28 November 2020.
Users are strongly recommended to transfer their funds out of the Exchange before 00:00 UTC on 28/11/2020.
Is Binance blocking US-based users?
Reports are emerging that Binance has started to block users based in the US from accessing the Exchange. According to The Block, emails were circulated to US-based users who were told to withdraw their funds within 90 days.
This is in any event in line with their announcement back in September 2019 that they will no longer serve customers from the US. They are also likely doing this now considering the ongoing legal actions against BitMEX and its key personnel.
Binance.com is now giving a 14 days notice to US customers
As a consequence to what we reported a few weeks ago, it appears that some US customers who are still using the “.com” version of the exchange are receiving a 14 days notice letter. In the email, as they reported, Binance is informing that due to their “periodic sweeps”, US residents are being asked to withdraw all their funds within 14 days or their funds will be blocked.
It is not clear whether the identification process is only based on KYCs or on IP addresses as well; in the first case, it could be possible that US customers who skip the KYC process accepting lower deposits/withdrawals limits could still use the platform.
Binance.com has been trying to remove its US customers for a while as the exchange doesn’t have any regulatory standing in America. US customers can use Binance.US, an exchange with far less pairs that is therefore not as attractive to traders as the classic “.com” version.
Coinbase Pro is disabling Margin Trading
In a blog post on Nov 24, the Chief Legal Officer Paul Grewal announced that customers wouldn’t have been able to place margin trades after November 25, 2PM PT time. The existing positions will remain effective until the last one will have expired; at that moment the product will go offline.
The decision comes as a consequence to the finalized “Interpretive guidance on actual delivery of Digital Assets” by the CFTC (Commodity Futures Trading Commission) in March. You can read more here. In the letter we can read:
“We believe clear, common sense regulations for margin lending products are needed to protect and provide peace of mind to U.S customers. We look forward to working closely with regulators to achieve this goal”.
Australian Exchange BTC Markets exposed users’ data
On December 1st during a routine marketing round of emails to their users, Australian exchange BTC Markets, one of the most famous in the continent, accidentally exposed their users’ data. Names and emails where all together displayed in the “to” field and sent in batches of 1000 at a time, exposing each personal user’s data to 99 other email addresses.
Caroline Bowler, the CEO, immediately confirmed the data exposure adding that nothing more than names and emails were exposed, while funds and passwords remained safe. Nonetheless, we know this type of exposure can (and probably will) lead to unwanted campaigns or phishing emails, therefore users should always doublecheck the sender of the emails before clicking anything suspicious.
The exchange is now working on additional measures and has advised their clients to change email passwords and set up 2 factor authentication on their accounts.
Thanks for this Chloe. We are working on additional security measures to bolster what is currently in place. In the meantime, we advise our clients to change their email password; set-up 2FA on their account; and be vigilant to email phishing attacks. https://t.co/0x56Kc2xEv
Centralised cryptocurrency exchanges do have custody of the cryptocurrencies in your account trading wallets. Therefore if anything happens to the exchanges, your funds can be affected!
So don’t keep more funds in exchanges than you need for day to day use or trading! Keep your cryptocurrencies safe and under your OWN custody, ideally in a hardware wallet.
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.
