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BitMax.io Launches Staking Support to Solve the Liquidity Dilemma for Staked Assets

Introduction BitMax.io (BTMX.com), a Singapore registered digital asset trading platform, has launched a new staking product on April 2, with initial support for Cosmos (ATOM) and Tezos (XTZ) befor

The post BitMax.io Launches Staking Support to Solve the Liquidity Dilemma for Staked Assets appeared first on AMBCrypto.

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Introduction

BitMax.io (BTMX.com), a Singapore registered digital asset trading platform, has launched a new staking product on April 2, with initial support for Cosmos (ATOM) and Tezos (XTZ) before expanding coverage to other digital assets.

The BitMax.io team announced its staking product will utilize an innovative design to address liquidity challenges associated with traditional staking. As a part of this design, users will have the flexibility to trade and transfer staked assets while still receiving block rewards. The new staking product also seeks to promote more secure blockchain networks for supported projects by encouraging higher stake ratios.

Liquidity Dilemma: To Stake, or not to Stake?

Proof-of-Stake (“PoS”) blockchain networks rely on token holders to stake assets in order to participate in various consensus mechanisms, thus promoting network security and resilience. In return for their contribution, these token holders, or “validators,” earn block rewards – generally in the form of the network’s native digital asset.

In this regard, staking allows token holders the opportunity to generate returns by simply “locking” assets for a set period. However, an inherent shortcoming of staking is that “unlocking” assets require a lengthy unbonding period during which a token holder can neither trade or transfer the asset nor is eligible to receive any staking rewards.

Tradeoffs between accessibility and staking rewards present a critical “liquidity dilemma”, for token holders when deciding whether to stake, or not to stake various digital assets operating on PoS networks. Some of the most troubling consequences of this liquidity dilemma are as follows:

  1. 1. Low Stake Ratio 1 :
    The inherently volatile nature of digital asset markets is sufficient to deter many token holders from staking because staked assets cannot be traded to hedge risk effectively. A low stake ratio results in low network security for the blockchain project.
  2. 2. Extreme Network Inflation:
    To incentivize token holders to participate in various consensus mechanisms, many PoS projects issue large block rewards to be distributed amongst delegators, resulting in a rapidly expanding token supply. An inflationary supply with no additional capital inflow will likely result in token price depreciation.
  3. 3. Significant Hash Rate Volatility:
    Price action on secondary markets may catalyze large portions of the staked network to be “unbonded” as token holders flock to undelegate and sell – either to take profit following price appreciation or stop losses following price depreciation – resulting in dramatic swings in network hash rate. A volatile hash rate results in network instability.

A Novel Approach to Solve the Liquidity Dilemma for Staked Assets

In response to the liquidity dilemma facing token holders and PoS projects, BitMax.io has designed a staking product which grants users the flexibility to trade and transfer staked assets without unbonding them from the network. Ultimately, the platform’s novel staking product will allow users to receive more attractive returns without sacrificing liquidity; therefore, encouraging higher more
resilient stake ratios for blockchain networks. BitMax.io’s novel staking product will have three key features:

1. Immediate Access to Staked Assets:
To enhance users’ staking experience, BitMax.io will maintain a pool of assets for immediate access after an asset is unstaked. “Instant Unbonding” will allow users to manage staked assets at their discretion even when delegating to a network with a lengthy unbonding period.

2. Margin Trading for Staked Assets:
To further promote marketplace efficiency, BitMax.io will create a synthetic version of each staked asset to be used as margin collateral, thus allowing users to go long or short to hedge exposure while continuing to earn rewards.

3. Maximized Staking Returns:
To maximize returns on behalf of users, BitMax.io will automatically redelegate staking rewards to staking pools, thus allowing users to further enhance yield from their token holdings. With regards to BitMax.io’s new staking product, BitMax co-founder and CEO, George Cao stated:

“Product innovation has always been a core aspect of our business. We designed this product to improve upon lots of the shortcomings associated with other platforms’ staking offerings. By offerings a solution to the ‘liquidity dilemma,’ we are giving our users the best staking experience while also providing value to the projects we support.”

Platforms such as Kucoin and Binance have adopted an approach known as “Soft-Staking” wherein each exchange can stake on its users’ behalf without active acknowledgment from the token holders. In contrast, BitMax.io has opted for a more traditional “principal-agent” relationship with its users which requires each token holder to opt-in as a delegator to the relevant blockchain network. In furtherance of this strategic decision, George Cao, notes:

“We will never stake customer assets nor use customer assets to vote or decide anything without approval. BitMax.io only aggregates staking interest from platform users as a single counterparty and then delegates to trusted
validators of choice, while at the same time taking care of reward distribution tasks and reinvestment of reward on behalf of users.”

Maximized Staking Rewards for Platform Users

As of April 2, 10:00 a.m. EDT, all BitMax.io customers can stake Cosmos (ATOM) and Tezos (XTZ) and collect staking rewards immediately. This is yet another point of differentiation between BitMax.io and competing platforms which delay reward distribution. For example, Binance distributes rewards on a once-monthly basis to users holding assets on Binance.

Seamless and efficient distribution of staking rewards should allow BitMax.io users to maximize returns from token holding via compounding interest. BitMax.io has confirmed that the platform will expand staking support to other emerging and high potential PoS protocols in the near future. BitMax.io was previously announced as one of the validators of KAVA (KAVA) and was also reported as building infrastructure to support Harmony (ONE) staking pending the project’s strategic roadmap.

Disclaimer: This a paid post, and should not be treated as news/advice.

Source: https://ambcrypto.com/bitmax-io-launches-staking-support-to-solve-the-liquidity-dilemma-for-staked-assets

Blockchain

Bitcoin dominance is an irrelevant metric unless…

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The volatile cryptocurrency market has given way to multiple metrics for the market observers to analyze and predict what’s coming next. One such metric has been Bitcoin dominance, but as per Su Zhu, it should not be relevant to you unless you are a billionaire.

How so?

The CEO of Three Arrows Capital opined this after noticing the trend of the newcomers avoiding Bitcoin and Ethereum and opting for risky crypto tokens. When the largest digital asset was stuck in a wider correction period, altcoins like Dogecoin [DOGE] grabbed much attention. This was possible due to the hype created by Tesla CEO or, self-proclaimed “doge-father,” Elon Musk and the Doge community.

However, understanding the newcomers’ enthusiasm Zhu opined that if he were to bet on projects now, he would choose Solana and Avalanche.

Despite the popularity of altcoins, the exec remained bullish on Bitcoin and Ethereum as he expected, the former to flip gold’s market cap, and the latter to eventually hit a value above $25,000. Bold predictions, but nothing we haven’t heard before.

However, newcomers were more bothered about the dominance metric but as data suggested, Bitcoin dominance has recently been falling. The dominance was hit earlier but recovered to form a peak at 49.25% on 30th July. But given the correction phase that followed, the dominance of BTC fell and was last noted to be at 40% on 10th September.

It is interesting to note that despite plenty of adoption related news such as that of El Salvador, coming in over the past few weeks, it looks like the dominance has remained unaffected by it.

Source: CoinMarketCap

Twitter user and crypto enthusiast, @HsakaTrades also noted that Bitcoin dominance was not a relevant metric for anyone who has a “sub mid 9fig portfolio]. Agreeing with Hasaka, Zhu added,

“To clarify, if you’re holding for 5+ yrs, you shouldn’t be thinking about btc dominance in the first place. And obv btc and eth have a strong place in that portfolio.

If you’re allocating actively atm, and think debating btc v eth v alts is a good framework, you’re ngmi.”

While this advice could stand true for experiences, long-term trader interested in making money, but not the ones looking out to invest in tech. This was especially highlighted in the comments wherein the crypto users were upset about the CEO’s Solana [SOL] recommendation that recently witnessed an outage.

Nevertheless, the trading advice and strategies differd from trader to trader and Zhu’s opinion to not focus on the BTC dominance, prebably stemmed from a hodlers perspective. While interesting projects were now erupting in the crypto space, it looks like Bitcoin’s dominance, not only in terms of price, but as a crypto project could be challenge.

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Source: https://ambcrypto.com/bitcoin-dominance-irrelevant-for-anyone-not-10figs

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Blockchain

Millions of Dollars Raised Through Solana’s DeFi Projects

Millions of Dollars Raised Through Solana's DeFi Projects

PAI, an algorithmic stablecoin, backs Parrot Protocol. Grape Protocol was the primary source of the downtime. Solana has been up

The post has appeared first on thenewscrypto.com

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  • PAI, an algorithmic stablecoin, backs Parrot Protocol.
  • Grape Protocol was the primary source of the downtime.

Solana has been up nearly 3200% since August. Investors’ interest in Ethereum rival systems featuring DeFi, NFT, and smart contract services has risen dramatically.

The software applications that simulate legal contracts are smart contracts. Once housed on a blockchain network, the software application will run automatically without human intervention.

This month, Solana’s DeFi initiatives raised millions of dollars. This is another proof of Solana’s potential to compete with Ethereum. Currently, Ethereum has the most DeFi and NFT projects.

Bots raced to invest in a token sale for Grape Protocol over flooded the blockchain, causing Solana to collapse for 17 hours on Tuesday. Let us take a look at the few IDO that helped raise millions.

Grape Protocol

Grape Protocol, the primary source of the downtime, managed to raise just $600,000 on Raydium’s “Acceleraytor.”

Tokenized communities may use Grape Network to connect to platforms like Discord, Telegram, and soon twitter to collaborate over Solana and reward members with crypto.

Parrot Protocol

Parrot Protocol is based on Solana. Investors in the Initial DEX offering included Sino Global Capital, Alameda Research, and QTUM VC. Moreover, to put it simply, Parrot is a non-custodial lending platform and decentralized exchange.

PAI, an algorithmic stablecoin, backs Parrot. Furthermore, Parrot offered a governance token called PRT in its IDO. Thus, allowing investors to vote on the protocol’s operation and farm yields on Solana without affecting other Layer 1 blockchains.

Solana’s failure impacted Parrot’s IDO, but it was resolved by Sept. 16. Moreover, the team said it would start working on PRT staking, NFTs, and adjustable interest rates in “Letter from the Parrot.”

Several Solana initiatives will be launched in the next day’s/weeks. Examples include Solanium, Boca Chica, and Solstarter. On Solanium, whitelisted users may buy MatrixETF.

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Source: https://thenewscrypto.com/millions-of-dollars-raised-through-solanas-defi-projects/

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Blockchain

Cosmos (ATOM) Lead Market-Wide Rally

Cosmos (ATOM) Lead Market-Wide Rally

Cosmos’ creators call it an “internet of blockchains.” ATOM also launched a bridge to Ethereum at the end of August.

The post has appeared first on thenewscrypto.com

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  • Cosmos’ creators call it an “internet of blockchains.”
  • ATOM also launched a bridge to Ethereum at the end of August.

Cosmos (ATOM) blew up 10.74 percent overnight to establish a new price of $39.58, according to CoinMarketCap. It surpassed $40 yesterday, reaching $40.76. Despite today’s minor decline, Cosmos’ price was still ten dollars more than seven days ago, and twenty dollars higher than this time last month.

Its creators call it an “internet of blockchains.” It’s an interoperability network that allows various blockchains to connect, exchange data, and interact with one another.

In short, Cosmos claims to address some of the “hardest problems” in the blockchain sector. It seeks to provide an alternative to “slow, costly, unscalable, and ecologically harmful” proof-of-work protocols like Bitcoin by connecting blockchains. On August 18, Cosmos rose 25% from $15 to $20 after the introduction of Emeris, a cross-chain DeFi interface.

It also launched a bridge to Ethereum at the end of August. The inter-blockchain communication protocol (IBC) allowed trade across the Cosmos and Ethereum networks for the first time, along with the integration of Sifchain.

Cosmos Might Soon Over Take FTX Token

Cosmos is “Blockchain 3.0” — thus, as previously said, ease of usage is a significant objective. To this aim, the Cosmos SDK emphasizes modularity. This enables a network to be created quickly using existing code. Long term, it is anticipated that sophisticated applications would be simple to build.

Cosmos now has the twenty-first largest market value, but at this pace, it would only take $0.8 billion to flip FTX Token and make a bold entry into the top twenty.

Some in the crypto sector, much worried about the amount of fragmentation in blockchain networks. There are hundreds, yet few can converse. Cosmos wants to change this by making it feasible.

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Source: https://thenewscrypto.com/cosmos-atom-lead-market-wide-rally/

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