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AAVE, MATIC, and DeFi projects: Why ‘banks should be scared’

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Decentralized finance (DeFi) has seen a surging interest unlike amid the chaos of 2020. Last year alone, the ecosystem saw a massive surge in terms of total locked-in value; from a few hundred million to more than $20 billion in a matter of months. This surge caught the eye of many investors but institutions still seemed hesitant towards diving into it.

Mark Cuban, billionaire investor and owner of the Dallas Mavericks recently published a blog centered around DeFi and its various use cases. The blog titled ‘The Brilliance of Yield Farming, Liquidity Providing, and Valuing Crypto Projects‘ analyzed different aspects and looked into potential around DeFi projects.

He put forward his take on two projects, MATIC and AAVE.

Polygon/Matic

On Matic, Cuban stated:

‘They (Polygon) are a very simple business that is hard to execute. Their job is to provide tools that enable transactions using their Ethereum/Solidity smart contracts, built primarily by outside parties, to take place as quickly and inexpensively as possible while still being able to bring in more money than they spend.’

On AAVE, he expressed a similar positive sentiment towards the project. He said:

They can make a FORTUNE for their depositors and token holders because their overhead vs their revenue is miniscule. Automated Financial Market Makers are so much more capital and operationally efficient than similar traditional companies. Banks should be scared.

Overall DeFi industry:

Zooming out a bit, with regard to DeFi he added,

“Yield Farming via Staking and Liquidity Providing are a core feature of most, if not all Decentralized Finance (DeFi) projects. “

He then put forward a basic difference between centralized business models and decentralized ones. While for the former, one initially needs to raise capital, start a business, and then the capital follows. For latter,

“organizations don’t require near as much capital to start and operate. Rather than raising money in a traditional sense, they can sell tokens to raise capital, they can reward Liquidity Providers instead of having to raise liquidity for financial transactions, and much of the critical security is provided by Miners or Validators……”

US Regulation

While discussing the future potential of the DeFi industry, the Shark Tank star wasn’t shy to shed light on the current relationship with the US regulators. He noted that most, if not all DeFi projects, were based outside of the US.

“One place that these organizations are VERY DIFFERENT is that they are not based in the USA and they are not corporations. They are foundations. They are Decentralized in their governance,” he said.

Could this be a possible reason why DeFi projects remain without a “center”? He further added:

“This is not only because of the ethos of Decentralized Autonomous Organizations (DAOS), but also because of the ABSOLUTE STUPIDITY of our regulators forcing some of the most impactful and innovative entrepreneurs of this generation to foreign countries to run their businesses.”

Prediction

Recently, Cuban had appeared in a lot of interviews, talking about DeFi. As part of his prediction, he had stated:

“…in 10-20 years we would see world-changing companies had been created in 2020 and 2021. Among those companies, it’s already a certainty that De-Fi and other crypto organizations will be at or near the top of the list.”

Cuban argued against the current restriction and skepticism faced by the entire crypto industry from the US authorities, which could take a heavy toll on the country’s economy. According to him, US should consider embracing and supporting crypto innovations such as DeFi. IF not, then

“we will lose the next great growth engine that this country needs.”


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Source: https://ambcrypto.com/aave-matic-and-defi-projects-why-banks-should-be-scared

Blockchain

Can SHIBA INU Make You a Millionaire? SHIB Price Prediction!

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Now Shiba INU coin has been explosive and has been up 100 percent in the last seven days.

And after the drop we had yesterday, Bitcoin has recovered and is now trading at over sixty thousand dollars. We also have the majority of altcoins in the green today, but now we’re seeing some red in Shib.

PlatoAi. Web3 Reimagined. Data Intelligence Amplified.

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Source: https://medium.com/@charlesbronsoneu/can-shiba-inu-make-you-a-millionaire-shib-price-prediction-4dae4e76e51f?source=rss——cryptocurrency-5

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Blockchain

Token Sale Launch Pushed As We Wait To Get Xircus Smart Contract Audited

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Xircus NFT

We’re making significant advances with the project on the technical front as well as strategically representing the project at international events to secure the necessary funding to take the project to the level it deserves. However, to the community members who are eagerly waiting for the token sale launch, we have to announce a short delay. It’s been a tough call for me and the team but eventually, we have decided not to go ahead with the launch without having our smart contract duly audited by one of the most reputed names in the industry. While it’s already in the process, unfortunately, we haven’t gotten our smart contract audited. As reported by our auditing partner, it would take some time.

The team and even some long standing initial members of the Xircus community have advised not to launch without the SC audit. We do take the responsibility for the delay — honestly we miscalculated the time it would take to get it audited. That said, we believe it is very much in the best interest of the team, the project and taken holders that we launch the main token sale event with an audited smart contract. It would give confidence to investors and our launchpad and Dex partner platforms.

At this point, it is also important to share with our community members that we haven’t fully met the expectations during our private sale rounds. That’s precisely because we had been busy focussing on developing the project on the technical front and were not just securing investments through token sales. However, with the platform ready for deployment we are now forging meaningful partnerships and have top blockchain investors like Ian Scarffe on board. Ian has been proactively helping Xircus connect with a network of investors who have demonstrated interest in the project intrigued by its disruptive potentials. To blockchain enthusiasts, Ian Scarffe needs no introduction as he has been behind a number of successful blockchain startups and has helped them overcome liquidity challenges.

Also, we have been actively representing Xircus at international forums and connecting with institutional investors with whom we have had rounds of talks. Sequoia Capital is already having considerations for Xircus and we may soon get a big positively exciting news from them. All this is to remind our community members that projecting Xircus to institutional investors and VCs and securing meaningful partnerships and investments effectively translates to huge benefits for our private community investors before we launch the main token sale event.

At this point, deciding to go ahead with the token sale without the smart contract audit and without meeting the private sale expectations would be irresponsible on the part of the Xircus team. We are already doing the needful for the community and leaving no stone unturned to ensure that everything works out in the best interest of the project and the community and all existing potential investors.

In the meanwhile we have also made some exemplary developments with the platform. We’ve been consistently improving the products. Working on the feedback we received we have been consistently improving the Xircus platform.

Let’s take quick look at some important developments over the past two weeks:

1. Dashboard — The new dashboard now allows you to add token assets for you to view your balance. Users can also add them to their metamask wallet.

2. Skins Marketplace — An additional section where users will be able to see all marketplace skins on sale. These could be from Xircus, resellers and even the developer community. The platform would generate 1% royalty from resellers and 5% commission from developer created skins. Note that 1% of commission earned will be burnt on every purchase.

3. Provider Center — The provider Center is a powerful tool for the Ringmasters. It offers a dashboard for those who want to host queries for marketplace data servers from low latency, edge-servers thru CloudFlare. Providers earn 10% from all marketplace mint and transaction fees. Requires staking 10,000 ~ 25,000 $XIRCUS tokens, 5% burned on stake, locked yearly.

4. DeFi Studio — A dedicated tool to deploy NFT staking contracts that allows users to buy random NFT items. The proceeds from the sales are distributed to all creators who participated — works like a jukebox. 1% of the $XIRCUS token is burned :chains::chains:

5. IPFS Uploader — section where you can upload file to IPFS and share link to anyone — alternative for WeTransfer :space_invader:

6. Token Factory — Its as additional section where users can deploy tokens for FREE. It includes both standard and deflationary tokens. Users can leverage their stablecoins to instantly add liquidity to their newly created tokens.

7. We are providing a new set of domains such as nyft.app, viveo.xyz, audix.xyz and many more.

In the coming week we are also releasing two NFT marketplaces. First is for our pioneer NFT marketplace showcasing crypto arts and the second is Xircus Elite Club NFT marketplace similar to BAYC where NFT holders will have exclusive access to future products, opportunities and more. All will be deployed through Xircus Deployer Studio.

Mobile App for iOS and Android:

Once again, we did not anticipate the delay but we are confident that we will soon have the smart contract audited and can go ahead with the confident token sale launch that would be in the best interest of the project and all our existing and potential investors.

Please note that the delay would just be a matter of days, not weeks.

PlatoAi. Web3 Reimagined. Data Intelligence Amplified.

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Source: https://xircus.medium.com/token-sale-launch-pushed-as-we-wait-to-get-xircus-smart-contract-audited-9ab75307edc3?source=rss——cryptocurrency-5

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Crypto Risks

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TradersOfCrypto

Crypto means you are in total control of your money. Thats sounds good but then if something goes wrong who do you call?

Owning crypto and complaining about the risks is a bit like owning a sports car and complaining about the costs. You just cannot have the former without the latter. Although most people associate crypto risks with bubbles or the tulip mania, owning crypto comes with various risks. In this lesson, you will learn:

  • What risks exist when owning crypto
  • Why these risks arise
  • What you can do to prevent them (if anything)

Your private key is the literal key to your crypto assets. You need it to access your wallet and sign transactions. If you lose it, you cannot access your wallet, and you cannot retrieve your coins. They are irretrievably lost.

How you interact with your private key depends on your choice of wallet. One option is to have a custodial wallet, meaning you let someone else manage your private key. If you store your coins on Coinbase or Paypal, you are using a custodial wallet. You log in with a password and can retrieve that in case you lose it.

Non-custodial solutions are mobile, software, or hardware wallets. Every time you come across a twelve-word seed phrase, you are dealing with a non-custodial solution. The benefit is you retain ownership of your coins. As a saying in crypto goes, “not your keys, not your coins.” However, you cannot ask anyone for help if you lose your login details and seed phrase.

There are differences between non-custodial wallets as well. A paper wallet is the safest option. You literally only have your public and private key written on a piece of paper. You eliminate the risk of a wallet hack but have a higher risk of losing the slip with your details. A hardware wallet is a USB flash drive that’s designed to store cryptocurrency. It is not connected to the internet but can also be physically lost.

At the end of the day, you can only prevent the physical loss of your key by treating your wallet and seed phrase with the same care you would treat other valuable items. Otherwise, your coins join the countless cases of people who lost fortunes by not being able to access old Bitcoin wallets.

Blockchain transactions are immutable, meaning they cannot be reversed. That is a big advantage of blockchain as a technology, but it’s also a potential banana skin for inexperienced users and a gateway that malicious parties can exploit.

Since blockchain is a young industry and unregulated in large parts, it’s also rife with scams, ponzis, and dubious projects. There is everything from scam trading sites over fake wallet addresses and seed phrase generators to clipboard viruses that will change the wallet address you are trying to send money to.

The user carries all responsibility for his actions, which makes him the easiest point of attack. Blockchain technology in itself is highly secure, but users and onramps like wallets and exchanges can be attacked. Malicious actors will use the immutability of transactions to trick users into sending coins to the wrong address. Once sent, these coins cannot be retrieved.

Common sense and vigilance are your best defenses against these risks. Double-check the address you are sending coins to. Keep your computer safe and don’t interact with dubious projects or websites.

The biggest non-user-related risk is protocol-related risk. Three basic attack vectors are covered in this point and the next:

  • Getting hacked
  • Getting rug-pulled
  • An error in the economic design of the project

Humans create software code, and humans can err. Therefore, a smart contract is always liable to a hacker attack even if it has been audited and used for a comparably long time. This is very much like a bank that can get robbed, only that the banks in crypto are often very new and easier to exploit.

There isn’t much you can do here aside from doing your own research on the project you are interacting with.

The two big non-IT risks are rug pulls economic design failures. The former is an industry term for a project attracting liquidity, which leads to a significant increase in the coin’s price. Then, the team behind the project dumps their share of coins (“they pull the rug”) and provokes panic-selling by the market. This is also known as “pump and dump.”

A project can also fail due to an unintentional flaw in the token design that provoked a price collapse. Iron Finance was a project that created a stablecoin (a crypto equivalent of the dollar) but failed because an error in the economic design provoked a run on its liquidity. The market panic caused the price to collapse from $50 to zero within hours.

Both these risks are inherent to crypto and hard to avoid even with the best research. Even with the best intentions, a flourishing space like blockchain will have its fair share of failures. The unregulated nature of crypto offers massive opportunities to multiply your money, but these come at a cost.

Another consequence of cryptocurrencies’ decentralized and unregulated nature is the lack of a central authority to appeal to. Since there are no chargebacks in crypto, you cannot get your money back. On top of that, your money isn’t insured, and no one can force the scammer or hacker to return the stolen funds. Law enforcement isn’t an option either since they are nowhere near competent enough to deal with such cases of cybercrime.

This risk is slowly getting mitigated because projects like Nexus Protocol do provide insurance against some cases of loss such as hacks, de-pegged stablecoins, and protocol code failures. However, you have to be a quite experienced user to understand and use such projects.

This is a shortcoming pervading the entire industry, so it’s considered a macro risk for the purpose of this lesson.

Using crypto is very much sink or swim. Either you learn how to use it by yourself, or you will likely pay a few expensive lessons on the way. Unlike traditional banks and financial institutions, blockchain companies and cryptocurrencies have no customer support. Whether for basic things like sending coins to the wrong address or for more advanced problems like hacks, no mechanism helps to onboard new users. Since the user experience for many coins and projects isn’t great, this is a real problem.

Like with previous risks, the decentralized nature of crypto comes at a cost. It’s hard to build a permissionless space and have a customer support hotline since the latter is a feature of a centralized company. Hence, there is nothing you can do besides constantly educating yourself.

This is a risk or a benefit depending on who you ask. In traditional finance, accounts and payments are covered by the law. Even if a bank fails, your money is safe up to a certain threshold. In crypto, you have neither governmental nor private institutions (so far) that can save your funds in case something goes wrong.

You could also see this as a positive since it teaches people to live with the consequences of their actions and teaches them responsibility in a straightforward way. More regulation would almost certainly stifle growth and innovation because less risky seldom goes hand in hand with more innovation. On the other hand, it would probably reduce the amount of scams and faulty smart contracts.

On a project level, governance risk can never be fully eliminated anyway. Even among highly regulated industries like traditional finance, there are rogue banks. On the contrary, more government regulation is a risk in itself since it would almost certainly lead to a massive loss of value in many assets, at least in the short run. As such, this is another inherent risk of crypto that has no easy or ideal solution.

Cryptocurrencies are famously volatile. Sometimes prices plummet or skyrocket for a reason, sometimes for seemingly no reason. High returns come with high volatility, and those that have held their assets for long enough have multiplied their initial investments several times.

Market risk is best mitigated through sound risk management when trading or investing in crypto. Not investing more than the amount one can lose and dollar-cost-averaging should be staples of every crypto investor. Doing your own research before investing, as mentioned several times, helps mitigate your downside as well.

Crypto doesn’t go untaxed and since cryptocurrencies are classified as property by the IRS, you have to report your gains and pay taxes. That can be income tax or capital gains tax, depending on how you made money. This is less of a risk but more something that you need to know.

Some people think that crypto is tax-free or it’s easy to avoid taxes with crypto. However, it’s a lot like with cash. Only because you could avoid taxes doesn’t mean it’s a good idea. If you do it, you are taking a risk. Preventing this risk is quite easy: do some research on tax regulation in your country and figure out how much you have to pay and when.

Of course, other possible risks may not be known to the wider public. You could have systemic risks like market manipulation, leading to a price collapse. Mining bans can and have in the past impacted prices. A systematic crackdown on on-ramping to cryptocurrency exchanges would also depress the market. In the end, there might be unknown unknowns that only show up on your radar after the damage is done.

Originally published at https://tradersofcrypto.com.

PlatoAi. Web3 Reimagined. Data Intelligence Amplified.

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Source: https://medium.com/@tradersofcrypto/crypto-risks-9be28ca3728e?source=rss——cryptocurrency-5

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