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Billions in Ethereum at Play: DeFi Meme Coins are No Joke

The wild world of crypto gets wilder, as the latest craze to take hold of the industry grows larger: DeFi meme coins. And they’re much more than just harmless fun.

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In brief

  • As DeFi has exploded this summer, so has its weird spin off: meme coins.
  • Although meme coins have been around since Dogecoin, DeFi meme coins are different—and billions of dollars are being invested into them.
  • And Ethereum developers who spoke to Decrypt said these coins are much more than just harmless fun.

Investors plugged $8 billion dollars into decentralized finance (DeFi) in the past three months alone, motivating the more creative members of its community to find new ways to create billions more in value.

The result is the latest craze that has taken hold of the cryptocurrency industry: DeFi versions of meme coins, crypto tokens whose worth depends on how funny the Internet finds the joke they represent.

DeFi “Degens,” as the users of such tokens self-identify, have cooked up an endless platter of meme coins: $TACO, $TENDIES, $YAM, $SUSHI, are among recent coins that riff on DeFi’s theme of “money lego,” with more coming out each day to serve investors’ endless appetite. They are immensely popular: $SUSHI, which powers a new take on decentralized exchange Uniswap, traded $127 million yesterday. And it only launched last week. 

But there’s a much darker side to meme tokens. Some think that they’re nothing but quick money grabs, reminiscent of the sham ICOs that took advantage of 2017’s bull market. More still think that these tokens are just another way to lure investors into an unsustainable DeFi economy.

“Meme tokens of today have actual value, but it’s propelled by this exuberation to keep farming, keep adding liquidity, keep earning interest. It’s quite insane,” Jordan Lyall, DeFi product lead at ConsenSys, told Decrypt. (Lyall got mixed up in this when he made a joke on Twitter and someone turned it into a meme coin). “Some are interesting models of distributing tokens, some are outright scams, the majority though are in this weird middle ground,” he said.

What are DeFi meme coins?

Meme coins have been around since the start of cryptocurrencies. The first major one was Dogecoin, which exploded with popularity—despite starting out as a joke. Launched in 2013 to poke fun at Bitcoin, it’s based on the Japanese Shiba Inu meme. To this day it’s the biggest meme coin—and Elon Musk’s favorite crypto, by the way—with a market cap of over $354 million. 

But DeFi meme coins are a little different. They are extensions of this summer’s DeFi craze: tools built on Ethereum that aim to rebuild financial services like borrowing and lending and make them available to anyone. The space took off: Investors have locked $9 billion of crypto into its smart contracts, per metrics site DeFi Pulse

Some DeFi meme coins add value to the space, or have their own unique takes on its core ideas of non-custodial finance. $SUSHI creates new incentives for people to provide liquidity to the decentralized exchange economy—a kind of Uniswap tailor made for the most “degen” of DeFi Degens. In the past 24 hours, $385 million of the token has been traded, CoinMarketCap data shows. The token’s market cap is more than $241 million. It didn’t exist a little over a week ago. 

Another, $BASED, wants to ward the industry away from price speculation to a focus on monetary supply. Every day, the protocol resets the price, burning or minting users’ tokens—its creators describe it as a “post-modern economic game.” If memes help spread DeFi’s gospel—non-custodial finance for all—then so be it, say the true believers. 

Meme coin $TACO works by allowing its users to “crunch” tokens by burning 6% of the Uniswap pool every day and earning a reward for their work. It claims to be a “fairer” and more fun version of TENDIES—the popular meme coin and deflationary token whose name has its origins in a dark Internet incest joke. 

Generally these coins are variations on yield farming—where users earn extra tokens by staking cryptocurrencies in DeFi protocols. The idea was spearheaded by Compound, one of the largest DeFi lending protocols, which in late-June started rewarding loyal customers with $COMP, a so-called governance token that lets holders vote on network proposals. They’re also held as speculative value, in practice are incentives to invest in DeFi lending protocols. 

Such DeFi yield farming coins include $YAM, which drew in $400 million in one day from investors. 

Short shelf lives 

But once the novelty wears off, these meme tokens reveal their unforgiving side. Set Labs product marketing manager and Co-Founder of EthHub, Anthony Sassano, said it’s just like the 2017 ICO scene: “Lots of people will get burnt by participating in things that they don’t understand,” he told Decrypt

Vitalik Buterin, the co-founder of Ethereum, even compared the DeFi yield farming craze to the way central banks are continuing to print money—and said he himself would be staying away from it.  

But that’s not the only worry, according to ETH developers. So-called flash farms—yield farms that only really last a week or so—are risky. Shrimp, Porkchop and Spaghetti all drew attention, with their emoji or meme to accompany their logo, and investors pouring in millions. Some have seemingly been forgotten about as the hottest new token hit the block. KIMCHI, a fork (essentially a copy) of $SUSHI, locked up nearly half a billion in value just hours after starting trading on Tuesday. 

ConsenSys developer Jack Clancy said you’d “have to be insane” to buy such tokens. “Unlike some of these yield farming experiments there isn’t really anything useful to learn here,” he said. “There’s no governance or anything so I don’t really understand the point. Maybe to learn if deflationary currencies work or whether people are willing to assign value to pure nonsense?” 

Sassano added in a blog post that these meme coins “tend to use unaudited and untested code” and are “obviously not sustainable.” The hugely popular $YAM, for example, had problems. After $600 million was locked up in the project, those behind it admitted there was a fault and would have to be shut down—all within 48 hours. It reworked a new version of the protocol for users but the token has now basically been abandoned. 

The team behind $TACO told Decrypt that the ETH developers had a point about the longevity of such projects and the risks involved: “The creators of these projects haven’t promised the next Bitcoin—or even the next Dogecoin,” they said. “They’ve promised a social experiment / on-chain game whose shelf life may prove to be limited, or, like Dogecoin, may prove to have surprising longevity.”

One thing is certain though: just like the ICO boom of 2017, some serious money is being made right now—but serious money will undoubtedly be lost, too. 

Disclaimer

The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.

Source: https://decrypt.co/40939/defi-meme-coins-no-joke-billions-ethereum

Blockchain

Bitcoin Price Prediction: BTC/USD Nosedives Toward $45,500

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Bitcoin Price Prediction – May 15

According to the daily chart, the Bitcoin price loses traction after hitting $50,730; losses likely to continue in the near term.

BTC/USD Long-term Trend: Bearish (Daily Chart)

Key levels:

Resistance Levels: $55,000, $57,000, $59,000

Support Levels: $42,000, $40,000, $38,000

BTCUSD – Daily Chart

Looking at the daily chart, it can be easily seen that the market is back in the red zone as BTC/USD is posting losses of 5.27% on the day after touching the $50,730. It has an intraday high close to $51,000; although the world’s largest crypto faces a serious downtrend as it is currently trading at $47,265.19.

Bitcoin Price Prediction: BTC/USD May Return to Red Zone

Bitcoin price just plunged below $48,000 one more time, marking $47,250 as the current daily low at the moment. Does this mean that Bitcoin (BTC) is finally leaving the significant $48,000 level and searching for a new low? Nevertheless, looking at the declining daily volume candle, together with the steady movement below the 8-day and 21-day moving averages; it can be assumed that a serious bearish movement may be coming up soon into the market.

Moreover, at the time of writing, BTC/USD is struggling to maintain the $50,000 level and if the Bitcoin price follows the downward trend as the Relative Strength Index (14) moves into the oversold region, the next supports may likely come at $42,000, $40,000, and $38,000. From the upside, by maintaining the current level of $47,265 and any bullish movement could go above the 9-day and 21-day moving averages and send the price to the resistance levels of $55,000, $57,000, and $59,000 which could be well above the channel.

BTC/USD Medium-Term Trend: Bearish (4H Chart)

On the 4-Hour chart, BTC price hovers below the 9-day and 21-day moving averages around $48,446 which may take time to persistently trade above $50,000. In addition, if the bulls gather enough strength and regroup, the upward movement may be able to near the resistance level of $52,000 and above.

BTCUSD – 4 Hour Chart

However, on the downside, immediate support is around the $47,500 level while the main support is at the $47,000 level. The price may likely fall below $46,000 if the bears step back into the market, a further movement could reach the critical support at $45,000 and below. Technically, BTC/USD is still moving in sideways while the Relative Strength Index (14) moves around 35-level, indicating an indecisive market movement.

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://insidebitcoins.com/news/bitcoin-price-prediction-btc-usd-nosedives-toward-45500

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Blockchain

Chainalysis: $81 Million crypto already stolen in 2021

TL;DR Breakdown At least $81 million in crypto already stolen in 2021 US authorities and their relationship with Chainalysis Chainalysis, a blockchain data analytical company, has said that at least $81 million has been stolen in crypto in 2021 owing to ransomware attacks. The attack led to $406 million crypto theft in 2020. The firm […]

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TL;DR Breakdown

  • At least $81 million in crypto already stolen in 2021
  • US authorities and their relationship with Chainalysis

Chainalysis, a blockchain data analytical company, has said that at least $81 million has been stolen in crypto in 2021 owing to ransomware attacks. The attack led to $406 million crypto theft in 2020.

The firm noted that ransomware attackers are growing more dangerous, more sophisticated, and sharply more profitable in extracting crypto from their victims.

The analytical firm notes that the number may likely rise as new criminal activities are still being uncovered.

Chainalysis said this in a blog post on Friday in a fraction of a forthcoming report on the state of ransomware in 2021. They are yet to announce when the entire report would be dropped.

A practical reference to the chainalysis claim is the Colonial Pipeline cyberattack, an American oil pipeline system.

The ransomware attack on the system resulted in a major gas shortage across the Southeastern US; the fuel provider reportedly paid out nearly $5 million in Bitcoin to a Russian criminal enterprise called DarkSide.

The analytical firm, in its reports, notes that the “Russian-affiliated cybercriminals so far this year have been the biggest financial beneficiaries of cryptocurrency-based crime.” Russia-linked strains have taken in 92% of this year’s ransomware proceeds, compared to 86% last year.

Ransomware payouts are also steadily growing. Victims paid an average of $54,000 in Q1, compared to $46,000 in Q4 2020 and just $12,000 on average in Q4 2019. There tends to be at least one $10 million ransom paid a quarter, but groups have demanded as much as $50 million.

Chainalysis, apart from providing analytical data about happenings in the crypto space, the firm also works with government agencies to help track down crypto criminals.

US authorities and Chainalysis

In 2020, the US Air Force agreed to a third contract with Chainalysis for crypto-related analytics.

The force partnered with the company to use its blockchain analytics services for largely unspecified reasons. According to the contract, they paid chainaysis about $779,740 for its service, which is dated May 19, 2020.

Combined, the Air Force has now spent $900,000 on Chainalysis’s analytics services.

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://www.cryptopolitan.com/chainalysis-81m-crypto-already-stolen-2021/

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Blockchain

Dogecoin Has Fallen, but People Still Love It

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In the cryptocurrency space, it is usually considerably easier to focus on the negative than it is to look at the positive. As of late, Dogecoin is enduring some heavy suffering, with the fourth largest cryptocurrency by market cap falling as much as 20 percent in recent days, so for the most part, we are likely to see a lot of news coverage about this drop.

Dogecoin Is Still a Beloved Asset

However, despite this little setback, there is nothing to suggest that the currency has lost its appeal. The asset has reached a heavy pinnacle in a rather short amount of time, and the currency is doing better than it ever has largely because it has gotten heavy attention from the likes of Elon Musk and several other mainstream investors and businessmen, and the asset is almost as popular as BTC in many ways.

Billy Markus – the software engineer that helped establish the asset – acknowledges that this kind of attention is rather solid for Dogecoin, though he is confident that this is not the only reason behind its recent success. He says that the community surrounding Dogecoin has also contributed greatly to its growing status. In a recent interview, he comments:

The crypto community can be pretty elitist and not very inclusive, and we wanted to make a community that was more fun, lighthearted and inclusive. It worked, and that is why the Dogecoin community consistently maintains a presence.

He further added:

It is definitely absurd, but there is something pure about it, too.

The popular cryptocurrency was started in the year 2013 as a joke and was never meant to be taken seriously. Largely considered a “meme coin,” the currency took about two hours to create according to Markus, who was primarily looking to develop something that would make fun of cryptocurrency.

Often recognized for the cute little Shiba Inu dog that serves as its mascot, Dogecoin – Markus explains – has also become a big hit with people over the last year because of the growing coronavirus pandemic, which has caused heavy lockdowns and prevented many people from leaving their homes and living normal lives. He says that many people have been stuck sitting around watching their money remain stagnant, and Dogecoin trading has given them something to look forward to.

He states:

People have been suffering, stuck in their homes and struggling, seeing their dollar not go as far as it has previously.

It’s Brought Attention to the Market

Mike Bucella – a general partner at crypto investment firm Block Tower – says that where Dogecoin has really succeeded is in driving more attention to the crypto space. He claims:

Very few things have done as much to bring eyeballs and people into crypto. That is a crazy thing to say, but Dogecoin specifically has brought in the retail masses.

Tags: Billy Markus, dogecoin, Elon Musk Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://www.livebitcoinnews.com/dogecoin-has-fallen-but-people-still-love-it/

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