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DeFi Forks Will Struggle Because You Can’t Fork a Community

DeFi forks fail to generate a genuine community. And even the few projects that go beyond the “farm and dump” scheme, the future is murky.

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DeFi Forks Will Struggle Because You Can’t Fork a Community | Crypto Briefing
















As first witnessed during the Bitcoin and Bitcoin Cash fork, DeFi projects are facing similar issues. Farming schemes may be lucrative, but few will generate a long-lasting community.


Key Takeaways

  • Vibrant communities are the essence of a crypto network as they aid organic growth and marketing.
  • Bitcoin versus Bitcoin Cash is the prime example of how crypto markets view unoriginal forks that change a few small features.
  • DeFi forks that do build communities still have to compete with the original protocol on the basis of features and value addition.

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DeFi forks are popping up everywhere. Unfortunately, they fail to become anything more than a “farm and dump” scheme due to a lack of genuine community. And even the few projects that do establish an early community, the future is murky.

The Lifeblood of a Crypto Token

The term “community” gets thrown around a lot in crypto. But what does it actually mean?

A community is a group of investors, users, and developers that support and supplement a particular crypto network. In an open-source ecosystem, communities are arguably the most important aspect of a project as they help create value through usage, adoption, and organic marketing.

If a protocol’s technology gives it substance, its community gives it life.

Communities are strengthened when they’re grouped under a similar identity. LINK Marines, Synthetix Spartans, and Band Jedis are a few examples of communities that have been meme-ed into existence.

yEarn Finance (YFI) is another great example of how a robust community can grow a project. YFI went from $0 to $1 billion in market cap in just a month. But this wasn’t empty growth. yEarn provided real value for the DeFi community and saw large blocks of capital enter the protocol.

yEarn Finance Market Cap
yEarn Finance market cap since inception, via CoinGecko.

Several copycats have attempted to recreate yEarn’s success to little avail. While a few have molded their own communities, they rarely rival the original protocol.

This is not a new concept. Time and time again, the crypto market has emphasized that it prices originality and innovation with a stark premium

The oldest examples date back to the genesis cryptocurrency – Bitcoin.

How Community Consensus Kept Bitcoin’s Moat Alive

In 2017, the Bitcoin community had its first major split. One side favored a smaller block size with SegWit to reduce the size of each transaction. The rest wanted to increase Bitcoin’s block size limit from one MB to two MB.

A large part of the community backed the smaller block size, which meant that version of the blockchain would continue as the original Bitcoin. The big blockers forked away from this network, forming Bitcoin Cash (BCH).

When this happened, many investors and analysts weren’t sure what effect this would have on Bitcoin’s market valuation. Raoul Pal, the founder of Real Vision and GMI, previously remarked that he believed the fork would dilute Bitcoin’s value, so he sold his coins.

What these investors didn’t realize back then is that users forge the value of a network.

When the small blockers won the battle for consensus, a ton of people who supported the big block ideology ended up conceding and moving forward with smaller blocks. Only a fraction of initial supporters eventually went on to become full-time Bitcoin Cash community members.

SIMETRI gains of 1031%

Initially, the market was confused, and Bitcoin Cash did well. But after a while, reality settled in. From the perspective of the crypto market, there were now two Bitcoins.

Eventually, it boiled down to one with most of the community and activity, and another without these characteristics but a slightly larger block size. 

The decision of which to back and which to abandon was immediately evident.

Since then, Bitcoin Cash has raised its block size to 32 MB. Yet it’s daily average block size hasn’t crossed 500 kB since November 2018.

Bitcoin Cash Daily Block Size
Average daily block size of Bitcoin and Bitcoin Cash, via Coin Dance.

BCH has been consistently losing value since it forked. It peaked at $3,700 per coin in 2017 versus BTC’s near $20,000. Its market cap is down 91% since the 2017 top, while BTC is down just 34% over that same period.

Bitcoin Cash Market Cap Image
Bitcoin Cash market cap since inception, via CoinGecko.

The Bitcoin fork episode is proof that the crypto market doesn’t value forks that improve one minor parameter and claim to be superior. At the end of it all, the original community-backed Bitcoin emerged as the real Bitcoin.

DeFi Forks: Some Succeed, Most Fail

yEarn Finance isn’t the only DeFi protocol being mimicked. Forks of Ampleforth, Compound, and others are showing up in the dozens.

SushiSwap is the newest fork that gained traction. At one point, over 70% of Uniswap liquidity tokens were locked in SushiSwap, but it is yet to facilitate a single dollar of trade. Now the project looks to have hit a dead-end after its sole developer sold the entire developer’s fund. 

To think a cloned project can immediately jump in and steal an established player’s traction is berserk.

However, SushiSwap is one of the few forks that had genuinely built a healthy community. 

Ampleforth forks Based and Yam have also incited healthy community support, as has yEarn clone DFI Money. But these are just four isolated examples from the 100+ duplicates that have surfaced in the last month. A vast majority of them have already crashed and burned.

SUSHI Token
The SUSHI token has found community traction, via Uniswap Vision.

Digging deeper into the changes these forks made reveals their actual agenda.

AMPL’s token distribution allocated only 25% of the supply to the general public. This has been perceived to be unfair. Yam was the first mover that forked AMPL and changed the distribution, so the community receives 100% of the tokens.

Cred - earn easier

yEarn had a fair token distribution, so there wasn’t anything to change. But DFI Money still captured an ardent group of supporters by claiming to be the “YFI of the East.”

A vocal segment of the DeFi community was upset by Uniswap’s decision to raise capital from VC funds. SushiSwap’s elevator pitch is that it’s a Uniswap clone that forks away from the VCs with 90% community distribution and a 10% development fund.

The narrative behind SushiSwap helped it rally a community of people frustrated with Uniswap’s funding decision and want the protocol to be governed by its users.

Apart from DFI Money – which is a cultural play – the common angle amongst successful forks is focus on token distribution.

If a fork makes meaningless changes like, say, the rebasing target or liquidity pool weights, nobody bats an eye. But when these projects say “we’re giving all our tokens to you guys,” the excitement is far more tangible.

A fork like SushiSwap can muster attention, but at long last, there’s no point if it never releases its DEX to compete with Uniswap. Further, Uniswap is building v3, which introduces new features that make it more capital efficient and offer LPs better terms.

SushiSwap is a fork of Uniswap v2, so feature-wise, it cannot live up to Uniswap v3.  And, as it turns out, the SushiSwap creator wanted to fork away from the VCs, so they had the sole privilege of dumping on the community.

Notwithstanding the recent controversy, Sushi is a far cry from Uniswap competitor, because when v3 releases, traders will inevitably gravitate towards the better solution.

Building a strong community early on is useful. But keeping the community around over months and years isn’t as easy.

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Source: https://cryptobriefing.com/defi-forks-will-struggle-because-you-cant-fork-community/

Blockchain

Mark Cuban Backs Ethereum-Based Data Marketplace dClimate

Mark Cuban Ethereum

Rate this post Dallas Mavericks owner, Mark Cuban is betting big on Ethereum’s future. The billionaire investor is joining Ethereum-based data project dClimate, a decentralized network for climate data, forecasts, and models based on the Ethereum blockchain and powered by the oracle network Chainlink Mark Cuban to Join Ethereum and Chainlink Data Project dClimate  Cuban has been advocating for crypto investments and adoption in the last few years. The tech entrepreneur has shown a great deal of interest in Ethereum in particular. During an interview, Cuban discussed the blockchain’s potential to disrupt banking, healthcare, and software companies. He also claimed that Etherem has a “greater long term” value as compared to Bitcoin. Following that, he invested in an Ethereum scalability startup Polygon. With his latest investment, Cuban is set to unleash Ethereum’s disruptive capabilities in a sector that ripe for a change: data. dClimate connects businesses and entities in need of climate data with publishers who can fulfill their needs. The company uses blockchain to eliminate middlemen and ensures transparency with an in-built mechanism to score the data quality. It also employs Chainlink — an Ethereum-based project that delivers information in and out of a blockchain network — to fetch the climate data. Chainlink is designed to connect blockchains with data in the real world in a secure manner. Over the last year, Chainlink has benefitted immensely from hundreds of partnerships with crypto-related projects, resulting in a 1000% surge in the value of LINK, its native token. Cuban’s Expertise is Invaluable to dClimate According to dClimate co-founder Sid Jha, Cuban’s understanding of blockchain and smart contracts could evolve and add transparency to the climate data industry. Furthermore, he stated, “His insights and expertise will be an invaluable asset to the dClimate team as we build a platform that can be leveraged by the many stakeholders who need reliable and secure weather data to build climate resilience.” Apart from Ethereum, Cuban has also expressed an interest in Dogecoin, a meme-currency that has a market cap of over $40.7 billion. His professional basketball team, Dallas Mavericks is also supportive of the crypto revolution and started accepting Bitcoin for payments two years ago.

The post Mark Cuban Backs Ethereum-Based Data Marketplace dClimate appeared first on Cryptoknowmics-Crypto News and Media Platform.

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Dallas Mavericks owner, Mark Cuban is betting big on Ethereum’s future. The billionaire investor is joining Ethereum-based data project dClimate, a decentralized network for climate data, forecasts, and models based on the Ethereum blockchain and powered by the oracle network Chainlink

Mark Cuban to Join Ethereum and Chainlink Data Project dClimate 

Cuban has been advocating for crypto investments and adoption in the last few years. The tech entrepreneur has shown a great deal of interest in Ethereum in particular. During an interview, Cuban discussed the blockchain’s potential to disrupt banking, healthcare, and software companies. He also claimed that Etherem has a “greater long term” value as compared to Bitcoin. Following that, he invested in an Ethereum scalability startup Polygon.

With his latest investment, Cuban is set to unleash Ethereum’s disruptive capabilities in a sector that ripe for a change: data.

dClimate connects businesses and entities in need of climate data with publishers who can fulfill their needs. The company uses blockchain to eliminate middlemen and ensures transparency with an in-built mechanism to score the data quality. It also employs Chainlink — an Ethereum-based project that delivers information in and out of a blockchain network — to fetch the climate data. Chainlink is designed to connect blockchains with data in the real world in a secure manner. Over the last year, Chainlink has benefitted immensely from hundreds of partnerships with crypto-related projects, resulting in a 1000% surge in the value of LINK, its native token.

Cuban’s Expertise is Invaluable to dClimate

According to dClimate co-founder Sid Jha, Cuban’s understanding of blockchain and smart contracts could evolve and add transparency to the climate data industry. Furthermore, he stated, “His insights and expertise will be an invaluable asset to the dClimate team as we build a platform that can be leveraged by the many stakeholders who need reliable and secure weather data to build climate resilience.”

Apart from Ethereum, Cuban has also expressed an interest in Dogecoin, a meme-currency that has a market cap of over $40.7 billion. His professional basketball team, Dallas Mavericks is also supportive of the crypto revolution and started accepting Bitcoin for payments two years ago.

READ  Diginex Is the First Crypto Exchange to Go Public on Nasdaq

#DClimate #Ethereum #Ethereum and Chainlink #Mark Cuban

Source: https://www.cryptoknowmics.com/news/mark-cuban-backs-ethereum-based-data-marketplace-dclimate/

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Bitcoin Struggles to Breach $40k After Fed Schedules Interest Rate Hike

Bitcoin Fed

Rate this post Bitcoin struggled to soar above $40,000 as investors unpacked the latest Fed announcement. On Wednesday, the Federal Reserve announced that it planned to increase interest rates twice in 2023, much sooner than the markets expected. The announcement incited fears that the banking system could also curtail its bond-buying program. Bitcoin Tumbles Amid Fed Announcement on Interest Rate Hikes in 2023 Bitcoin (BTC) prices are tumbling again after briefly showing signs of recovery. The currency was changing hands at an intraday low of $38,300, following its decline from the $40,000 mark. Meanwhile, in the stock markets, DOW and S&P 500 also recorded a drop of 0.77% and 0.54% respectively. The latest decision on interest rates comes in light of rising inflation in the United States. The country — currently experiencing a 13 year high in consumer prices — is projected to see its inflation rates spike from 2.4% to 3.4%. While Fed chair Jerome Powell has termed the projected rates to be “transitory”, investors are worried about the implications of ongoing inflation for a post-pandemic economy. In the meantime, investors tied to risky assets such as stocks and cryptocurrencies are also anticipating the Fed to roll back its $120 billion monthly bond purchase program, which could be winded down before the planned interest rate hikes. Current Bitcoin Price Activity is Normal Range-Bound Trading BTC prices briefly breached $40,000 but fell short of $45,000, as the currency traded at nearly $41, 350 on 15 June. But the digital asset couldn’t maintain this level longer and plummeted further. Even as BTC fell from $40,000 to $38,300, investors are confident about the primary cryptocurrency’s resilience. Some believe that Bitcoin’s price activity matches its range-bound trading. At this point, investors are hoping for BTC to hold at $37,000, which could represent its support level. Interestingly, major exchanges have recorded a continuous inflow of BTC over the last few days. Miner outflows have also been increasing according to the findings of CryptoQuant, which suggest that BTC inflows produce bearish results for the market.  Additionally, the currency’s 50 and 200-day moving averages are also on their way to convergence, leading to the formation of a bearish death cross. While they are not the strongest indicators of the current spot price action, they help understand the existing resistance for bulls. 

The post Bitcoin Struggles to Breach $40k After Fed Schedules Interest Rate Hike appeared first on Cryptoknowmics-Crypto News and Media Platform.

Republished by Plato

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Table of Contents

Rate this post

Bitcoin struggled to soar above $40,000 as investors unpacked the latest Fed announcement. On Wednesday, the Federal Reserve announced that it planned to increase interest rates twice in 2023, much sooner than the markets expected. The announcement incited fears that the banking system could also curtail its bond-buying program.

Bitcoin Tumbles Amid Fed Announcement on Interest Rate Hikes in 2023

Bitcoin (BTC) prices are tumbling again after briefly showing signs of recovery. The currency was changing hands at an intraday low of $38,300, following its decline from the $40,000 mark. Meanwhile, in the stock markets, DOW and S&P 500 also recorded a drop of 0.77% and 0.54% respectively.

The latest decision on interest rates comes in light of rising inflation in the United States. The country — currently experiencing a 13 year high in consumer prices — is projected to see its inflation rates spike from 2.4% to 3.4%. While Fed chair Jerome Powell has termed the projected rates to be “transitory”, investors are worried about the implications of ongoing inflation for a post-pandemic economy.

In the meantime, investors tied to risky assets such as stocks and cryptocurrencies are also anticipating the Fed to roll back its $120 billion monthly bond purchase program, which could be winded down before the planned interest rate hikes.

Current Bitcoin Price Activity is Normal Range-Bound Trading

BTC prices briefly breached $40,000 but fell short of $45,000, as the currency traded at nearly $41, 350 on 15 June. But the digital asset couldn’t maintain this level longer and plummeted further.

Even as BTC fell from $40,000 to $38,300, investors are confident about the primary cryptocurrency’s resilience. Some believe that Bitcoin’s price activity matches its range-bound trading. At this point, investors are hoping for BTC to hold at $37,000, which could represent its support level.

Interestingly, major exchanges have recorded a continuous inflow of BTC over the last few days. Miner outflows have also been increasing according to the findings of CryptoQuant, which suggest that BTC inflows produce bearish results for the market. 

Additionally, the currency’s 50 and 200-day moving averages are also on their way to convergence, leading to the formation of a bearish death cross. While they are not the strongest indicators of the current spot price action, they help understand the existing resistance for bulls. 

READ  BCD Technical Analysis: Price Likely to Fall Below the First Support Level of $4.32

#Bitcoin price #Federal Reserve Bank #Federal Reserve Interest Rate

Source: https://www.cryptoknowmics.com/news/bitcoin-struggles-to-breach-40000-after-fed-schedules-early-interest-rate-hike/

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Shanghai Man: Economist says El Salvador ‘on road to death’, salaries paid in e-CNY …

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Our Man in Shanghai has refused to let recent regulations slow down the news coming from China. Enterprise blockchain, central bank digital currencies and start up projects continue to make a positive impact in a region hoping to grow economic value through technology.

Death march for El Salvador

The debate around El Salvador continued this week as media and officials tried to digest the adoption of Bitcoin as a national currency. JPMorgan stated that there was little economic benefit, and John Hopkins University professor Steve Hanke warned that the move could “completely collapse the economy” of the small nation. The former Bank of China deputy governor Wang Yongli took a very hardline approach, by stating that volatility and a lack of regulation or controls would put the economy on a “road to death.” This quote, appearing in state run media The Paper June 9, was an unusually direct and colorful statement on the issue.

Crypto innovation can be productive

Zhou Xiaoquan, a former governor of the People’s Bank of China, had a few positive things to say about cryptocurrency as a technology on June 11. He spoke at an economic summit in Shanghai and noted the cryptocurrency innovation in China can be productive when it serves the real economy. He also took some shots at other countries, stating that people would be mistaken if they thought other countries were taking the same approach towards building financial services. Zhou, who is one of the most often-quoted economists in the country, felt there was little emphasis on the relationship between financial services and economic value elsewhere in the world. Based on the wild displays at the Miami Bitcoin conference a few weeks ago, his position might be more sound than others would care to admit.

Paid in e-CNY

China’s e-CNY tests continued with the first reported mass payment of salaries in Xiong’an, a district near the capital Beijing. According to Cointelegraph, the pilot received support from a number of national banks and saw subcontractors paying workers their salaries from a digital wallet.

Industrial blockchain worth $22.6B

On June 3, a government organization issued a report entitled the China Industrial Blockchain Development Status and Trend Report. According to the report, in 2020, 222 industrial blockchain policies were issued, 12,059 new blockchain-related patent applications were approved, and 776 new blockchain enterprises were established. The report also claimed that the current market size of the industrial blockchain sector was around $22.6 billion U.S. dollars. Industrial blockchain is an area that China is eager to grab control in, leading to this explosive growth in recent years.

Only 5X the fun

Leading exchange Huobi surprised futures traders by limiting them to only 5x leverage on perpetual swaps and blocking new users from accessing the feature altogether. Futures trading, particularly highly-leveraged futures trading, had always been popular features on exchanges like OKEx and Huobi. It will be interesting to see whether these new decisions to limit risk will be damaging to these large exchanges that still somewhat adhere to regulator rules. It’s also possible that it’s a short-term solution in order to avoid scrutiny during periods of tighter control.

Futures of Singapore

While Huobi was tightening controls on futures traders, Singapore-based platform SynFutures was completing a Series A for $14 million. The round was led by Polychain Capital and included names like Framework Capital, Pantera Capital, Bybit, Kronos Research, WOO Ventures, Wintermute, and IOSG Ventures. SynFutures is creating a trustless derivatives market where users can take positions on assets or anything that has an accurate feed, including Bitcoin, the price of gold, or even the Bitcoin hashrate. What many people don’t know is that the SynFutures team is composed of members from Matrixport, a financial service app that was an offshoot of massive Chinese mining conglomerate Bitmain. Now you know the whole story!

This weekly roundup of news from Mainland China, Taiwan, and Hong Kong attempts to curate the industry’s most important news, including influential projects, changes in the regulatory landscape, and enterprise blockchain integrations.

Shanghai Man: Economist says El Salvador ’on road to death’, salaries paid in e-CNY …

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Source: https://blockchainconsultants.io/shanghai-man-economist-says-el-salvador-on-road-to-death-salaries-paid-in-e-cny/?utm_source=rss&utm_medium=rss&utm_campaign=shanghai-man-economist-says-el-salvador-on-road-to-death-salaries-paid-in-e-cny

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