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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

How to Earn on Crypto you’re Hodling in 2021

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How to Earn on Crypto you’re Hodling in 2021

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Everyone in the world likes money and even better if you can earn with the money you already have. There has been a sharp rise in crypto price points in recent months so if you’re one of the many die-hard holders out there you are probably wondering how you can get a return from the holdings you already have. Thankfully as the industry has evolved so has the ability for investors to earn on their holdings of crypto assets. This article will talk about some of the ways you can try to make a return on investment for everything you currently have in your portfolio. Some of the earning ways are conventional and others require a little bit of work or substantial knowledge. Nevertheless here are some ways you can earn on your crypto portfolio. 

Staking is the process of actively holding a small to substantial amount of funds in a designated blockchain wallet in order to support a proof of stake (PoS) blockchain protocol. Essentially the investor locks funds into a particular wallet to support the staking process of the blockchain which they are staking on. As with anything in life an individual only does something if they feel they will gain benefit from it so when it comes to staking a stakeholder in the proof of stake blockchain will only lock in their stake if they are going to receive a reward. Many blockchain platforms out there offer proof of stake rewards to those staking crypto in locked wallets and you can earn a staking reward from doing so. When staking you often do not only earn an income from locking in funds but the staking also offers the holder the ability to vote on the blockchains protocol updates. Think of it similar to having voting rights from holding stock in a public company, you will have the right to a proportional vote to your stake on the future of the blockchain protocol. It’s relatively easy to find a company that allows you to stake your crypto and even the big guys like Coinbase offer staking features on their platform.

Peer to peer lending has become an increasingly popular topic in the modern fintech sector these days and the normal financial channels often translate over into the cryptocurrency world. Like with conventional peer to peer lending the way you earn money from the transaction is through interest on the lending of assets. Unlike conventional peer to peer products, the cryptocurrency world offers substantially higher interest returns than its fiat (government issued currency) counterpart. This is not always the case however, but as a general rule of thumb you are set to earn more with a crypto-based lending house.

One trusted example of a medium for lending is Nexo. Nexo offers credit lines to a borrower that are secured against crypto collateral. This collateralized method does away with the need for traditional credit checks since the crypto acts as the bridge of trust if and when the borrower is unable to pay. So you are always safe as a lender in that regard. Nexo clients who deposit funds in fiat or stablecoins can expect to earn returns of up to 12%, whereas clients who directly deposit crypto can earn interest of up to 10% of their holdings. Lenders who hold a minimum percentage of their portfolio in NEXO tokens, and choose to receive payouts in their token are eligible to receive higher returns than those who do not. 

If you are interested in mining for more crypto, another option is to hold shares in an active cryptocurrency mine. Mining is the backbone of the entire cryptocurrency ecosystem. So by investing into a mine you are not only using your crypto to make more crypto, but you are also supporting the entire blockchain community through mining activities. 

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Miners solve complex mathematical equations using graphics processors. Once the mathematical equation is solved, the block is validated and a reward is sent to the miner. Pylon Finance is said to have the largest active ETH mine in North America with return rates for investors of up to 250% per year. 

The easiest way of all to earn money from your crypto may be to deposit your funds into a platform that offers you an annual percentage yield (APY) on the money you hold on their platform. This is similar to depositing money into a savings account at a bank that gives you an annual percentage return on what you hold in your bank account. You can check out the different DeFi depositing options on DeFi Pulse and start earning on your holdings immediately. 

What is important to consider however is that depositing can only be done with crypto assets and altcoins and not fiat currency so this is only a valuable way to earn returns if you are insisting on earning on just your crypto holdings. 

In a similar fashion to earning from DeFi, many crypto exchanges offer earnings programs. These again are similar to depositing into bank accounts and earning interest with the key difference being that the interest earned is usually substantially higher than one would earn from a conventional bank account. That coupled with compounding interest and the gains in the crypto market in recent months makes this option very attractive. Companies such as Crypto.com offer interest on the major cryptocurrencies up to 8% and pay out interest on a weekly basis. Along with being paid weekly you also have your interest accrued daily so you know whatever you are holding is always earning you money, even if your portfolio fluctuates. 

Although it isn’t conventionally set to make you money, you can look to the slot machines and roulette table for extra returns. If you’re a rainman at blackjack, Fortunejack is the oldest Bitcoin casino in the world – so why not try to make some tasty returns there?


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The views expressed in the article are wholly those of the author and do not represent those of, nor should they be attributed to, ZyCrypto. This article is not meant to give financial advice. Please carry out your own research before investing in any of the various cryptocurrencies available.

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Source: https://zycrypto.com/how-to-earn-on-crypto-youre-hodling-in-2021/

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Blockchain

XRP, Cosmos, Elrond Price Analysis: 07 March

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XRP floated above its press time support but needed to retake additional resistance levels to overturn its bearish market. ATOM reflected a consolidated market as the price moved within a fixed channel while Elrond traded within an ascending channel after a bounce back from the $100-mark.

Source: CoinStats

Meanwhile, the world’s largest cryptocurrency Bitcoin was trading at $50,870 with a 24-hour trading volume of over $36.3 billion.

XRP

Source: XRP/USD, TradingView

XRP was still at the nascent stage of a recovery as the bulls barely held on to $0.46 level after flipping it to support. Weekly gains of over 10% highlighted the bounce back from $0.40 support as XRP rose steadily on the 4-hour time frame. Nevertheless, several challenges awaited the bulls moving forward. The first was to overcome bearish sentiment in the market set by the 200-SMA (green) crossing above the 50-SMA (blue).

Short-medium term challenges were presented by the overhead resistance levels $0.5 and $0.55. However, the ADX rested around the 15 mark and indicated a weak trend in the XRP market. The MACD line moved alongside the signal line as equilibrium was maintained between each side. Considering the neutrality set by the indicators, the bulls might have to sustain a period of consolidation before a northbound move.

Cosmos [ATOM]

Source: ATOM/USD, TradingView

The Bollinger Bands on Cosmos started to converge as volatility looked to escape the Cosmos market. Short-bodied candlesticks on the 4-hour charts showed that the buyers and sellers were not in major disagreement with regard to the price. The RSI pointed lower from the 50-mark.

If the bears take control over the coming sessions, a fall towards $16.45 support could present some buying opportunities for traders at a discounted price. A psychological boost could also stem from a breach above the overhead resistance at $21.45.

Elrond [EGLD]

Source: EGLD/USD, TradingView

Gains over the past week amounted to over 12% as Elrond bounced back strongly from the $100-mark. As the price formed higher highs and higher lows, an ascending channel appeared on the 4-h0ur timeframe. The indicators tilted in the favor of the bulls at press time but a break outside the channel seemed unlikely.

The MACD closed in on a bullish crossover, while the red bars on the histogram moved towards the equilibrium point. The RSI was neutral-bullish as the index moved flat from above the 50-level.  A move above the upper trendline over the long run would present an upside at $208. Conversely, a southbound move from the lower trendline could see EGLD move towards the $100 level once again.


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Source: https://ambcrypto.com/xrp-cosmos-elrond-price-analysis-07-march

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Top 5 cryptocurrencies to watch this week: BTC, UNI, THETA, VET, LUNA

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Bitcoin’s (BTC) fundamentals received a boost as the U.S. Senate passed the $1.9 trillion stimulus bill on March 7. If traders react to this bill in the same way as they had done to the first stimulus package in April 2020, then the crypto markets may witness a strong rally.

The stimulus package also intensifies the focus on the devaluation of the U.S. dollar. These concerns could lead some investors to park their money in hard assets or Bitcoin instead of keeping them in fiat currencies, according to veteran trader Peter Brandt.

Crypto market data daily view. Source: Coin360

In addition to investors, a growing number of listed companies are choosing to protect their fiat reserves by buying Bitcoin. After the high-profile purchases by MicroStrategy, Tesla, and Square, a Chinese listed company called Meitu revealed that it had acquired $40 million worth of Bitcoin and Ether.

If other companies across the world also follow this lead and invest a portion of their treasury reserves in Bitcoin, that could create a massive supply and demand imbalance, sending prices through the roof.

Let’s study the charts of the top-5 cryptocurrencies that may resume their uptrend in the short term.

BTC/USD

Bitcoin dipped below the 20-day exponential moving average ($48,484) on March 5 and March 6 but the long tail on each candlestick shows buyers are ready to jump in at lower levels. The bulls have currently pushed the price toward the $52,040 overhead resistance.

BTC/USDT daily chart. Source: TradingView

While the 20-day EMA is flat, the relative strength index (RSI) has started to turn up and it has risen above 58, indicating that the bulls are attempting to make a comeback.

If the buyers can propel the price above the resistance, the BTC/USD pair may retest the all-time high at $58,341. A breakout of this level could start the next leg of the uptrend, which may reach $72,112.

Contrary to this assumption, if the price turns down from the overhead resistance and breaks below $46,313, the pair may drop to the 50-day simple moving average at $42,861. This level is likely to act as a strong support.

If the pair rebounds off this support, the pair may spend a few more days in consolidation. But if the bears sink the price below $41,959.63, traders may rush to the exit, which could signal a possible change in trend.

BTC/USDT 4-hour chart. Source: TradingView

The pair has formed an inverted head and shoulders pattern on the 4-hour chart that will complete on a breakout and close above $52,040. This bullish setup has a pattern target of $61,075.

The 20-EMA has started to turn up and the RSI has jumped above 62, indicating a minor advantage to the bulls.

This bullish view will invalidate if the price turns down from the current levels or the overhead resistance and breaks below $47,000. Such a move could open the doors for a decline to the next major support at $41,959.

UNI/USD

After consolidating near $29 for three days, Uniswap (UNI) has broken out of the overhead resistance today. If the bulls can sustain the price above $29, it will enhance the prospects of the resumption of the uptrend.

UNI/USDT daily chart. Source: TradingView

Both moving averages are sloping up and the RSI is in overbought territory, which indicates that bulls are in command. If the UNI/USD pair rises above $33, the next level to watch out for is $38 and then $46.

This bullish view will invalidate if the price turns down from the current levels and breaks below the 20-day EMA ($25.31). If that happens, the pair may drop to $22 and then to the 50-day SMA ($19.78).

UNI/USDT 4-hour chart. Source: TradingView

The 4-hour chart shows that the bears are likely to defend the $32 overhead resistance aggressively. However, if the bulls do not allow the price to dip below the 20-EMA, it will signal strength. A breakout and close above the $32 to $33 zone may start the next leg of the up-move.

This bullish view will invalidate if the price turns down and breaks below the 20-EMA. Such a move will suggest that traders are booking profits on rallies. The pair could then drop to the 50-SMA.

THETA/USD

THETA is in a strong uptrend. Although the altcoin turned down on March 7, the long tail on the March 8 candlestick shows buying at lower levels. Corrections in a strong uptrend generally last for one to three days after which the main trend resumes.

THETA/USDT daily chart. Source: TradingView

The rising moving averages and the RSI near the overbought zone suggest the bulls are in control. If buyers can drive the price above $4.72, the THETA/USD pair may resume the uptrend and rally to $5.73.

On the contrary, if the price turns down from the $4.50 to $4.72 overhead resistance zone, the pair may drop to the 20-day EMA ($3.58). A strong rebound off this support will suggest the sentiment remains positive as the bulls are buying the dips.

If the bears sink the price below the 20-day EMA, a deeper correction to the 50-day SMA ($2.82) is possible. Such a move will indicate that the momentum has weakened and may delay the resumption of the up-move.

THETA/USDT 4-hour chart. Source: TradingView

The 4-hour chart shows the 20-EMA is rising and the RSI is in the positive zone. If the bulls can push and sustain the price above the downtrend line, the pair may retest $4.72. A breakout of this resistance could start the next leg of the uptrend.

On the other hand, if the price continues to correct, it may find support at the 20-EMA. If that happens, the bulls will again try to propel the price above the downtrend line. However, a break below the 20-EMA may pull the price down to $3.85.

VET/USD

VeChain (VET) is currently stuck in a large range between $0.0345 and $0.060774. The price had reached the resistance of the range, but the long wick on today’s candlestick shows profit-booking near $0.060774.

VET/USDT daily chart. Source: TradingView

However, the moving averages are sloping up and the RSI has also inched higher into the positive territory, suggesting that the path of least resistance is to the upside. If the bulls can push and sustain the price above $0.060774, the VET/USD pair may start the next leg of the uptrend.

The first target on the upside is $0.087048 and if this level is also crossed, the pair may rise to $0.10.

Contrary to this assumption, if the price turns down from the current level, the pair may drop to the 20-day EMA ($0.047). A bounce off this support will suggest that the uptrend remains intact, but a break below it may bring the range-bound action into play.

VET/USDT 4-hour chart. Source: TradingView

The 4-hour chart shows some profit-booking near $0.060, but the positive sign is that the bulls have not allowed the price to collapse. If the pair rebounds off the 20-EMA, the bulls will make one more attempt to thrust the price above the stiff overhead resistance.

If they can sustain the price above $0.060774, the next leg of the uptrend could begin. However, if the price dips below the 20-EMA, the selling could intensify and the price may drop to the next support at the 50-SMA.

LUNA/USD

Terra (LUNA) is currently consolidating in a large range between $5 and $8.50 for the past few days. Both moving averages are sloping up and the RSI is near the overbought territory, indicating the path of least resistance is to the upside.

LUNA/USDT daily chart. Source: TradingView

The bulls pushed the price above the range on March 5, but could not build up on the breakout as the price turned down and slipped back below $8.50 on March 6. This suggests that demand dried up at higher levels.

However, if the bulls do not give up much ground, it will indicate that traders are waiting to buy the shallow dips. If that happens, the buyers may make one more attempt to start the next leg of the up-move. If they succeed, the LUNA/USD pair could rally to $12.

LUNA/USDT 4-hour chart. Source: TradingView

The long wicks on the candlesticks above $8.50 show profit-booking at higher levels and the bulls are currently attempting to defend the 20-EMA. If the price rebounds off the current levels, the buyers will again try to resume the uptrend by driving the pair above the $8.50 to $9 overhead resistance zone.

On the contrary, if the bears sink and sustain the price below the 20-EMA, the pair could dip to the 50-SMA. If the price bounces off this level, the pair may consolidate in the upper half of the range for some time. A drop below the 50-SMA will be a signal that the price may settle into the $5 to $6 range.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Source: https://cointelegraph.com/news/top-5-cryptocurrencies-to-watch-this-week-btc-uni-theta-vet-luna

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