With its record-breaking bull run, Bitcoin stole the public spotlight from the equally explosive DeFi. To be sure, Bitcoin represents a simpler affair compared to DeFi’s cyberbanking, but it too has just started to grow out of its birthing pains.
2020 had many peculiarities. Mostly, they were negative, but some were positive. For cryptocurrency enthusiasts, the year ended up yielding big gains with Bitcoin’s ongoing bull run. However, the rapid growth of DeFi—decentralized finance—is not just a mere exercise in mimicking gold. For the first time in human monetary history, DeFi made it possible to gain access to age-old financial products—lending and borrowing—without the meddling of banks or governments.
All you have to do is tether your crypto wallet to a DeFi network and start reaping the gains in the form of high-interest rates, referred to as yield farming. This newly opened opportunity to make a quick buck caused a frenzy of activity as we have never seen before. In a short span of a few months, DeFi’s growth went through the roof.
Although DeFi’s total value locked (TVL) made its first $1 billion milestone in February, the Summer period saw its explosive growth. In a period of seven months, from June 2020 to January 2021, DeFi grew from $1.01 billion to over $25 billion as of January 19:
Less jaded and cynical crypto users saw this coming. Although it is tempting to frame this awesome growth as a bubble reminiscent of the ICO craze, with its many fraudulent and empty whitepaper projects, DeFi is its own thing. Bitcoin (BTC), Ethereum (ETH), and other cryptocurrencies laid the groundwork for transforming our perspective on the meaning of money. Underpinned by the internet and powered by blockchain, cryptocurrencies have value because they are not under the auspices of central bodies, left to be manipulated as central banks see fit.
Instead, cryptocurrencies derive the value of trust from more formidable sources: math, cryptography, blockchain, and peer-to-peer (P2P) technology. As such, unimpeded by national borders and calcified monetary mechanisms, Bitcoin is being adopted as a haven amid failed monetary systems.
From Argentina and Venezuela to Lebanon and Iran, it is becoming as much as digital gold as it is a form of payment. Popular small business accounting software Freshbooks even lists Bitcoin as a payment method that businesses should consider.
To add to the noise, one of the world’s largest banks, JPMorgan Chase, bailed out during the 2008-2009 financial crisis, projects that Bitcoin is headed toward replacing physical gold as a store of value. Bitcoin’s accessibility has largely increased as well, with investing platforms like eToro now offering cryptocurrency access to U.S. traders.
Separating the Wheat from the Chaff
A glance at DeFi’s growth curve in such a short span can easily mislead someone to think of it as a bubble. In some sense this is true, but not in the sense that matters in the long run. When we talk about a bubble—a rapid rise of market value driven by exuberant behavior—we have to view it in terms of maturation stages.
DeFi is still in the early maturation stage. We can see this by the overvalued and often memetic governance tokens. These tokens were developed and employed by blockchain developers to give people a tool to shape the protocol platform, vetting, and voting on new features via Ethereum’s smart contracts. Such ecosystems are also called decentralized autonomous organizations (DAOs).
Within the first months of the DeFi Yield Farming craze, the Compound platform with its COMP token rose 300% in value, only to halve in value a month later.
Likewise, Yearn.finance, with its five-part ecosystem of lending, borrowing, stablecoins, exchange, and Aave capital clearance, yielded exorbitant 35,000% returns to the very first wave of adopters. Again, we are seeing a bubble curve—spike and burst.
However, with both of the Compound and Yearn.finance examples, we see a stabilization period, just like we have seen with countless altcoins. Only those DeFi platforms that offer value rise to the top. With the DeFi space, such value is far more tangible than the previous era of thousands of altcoins uselessly vying to dethrone Bitcoin while offering nothing extra in return.
On the other hand, DeFi platforms are explicit in the value they provide:
- Virtual smart banking offering automated lending and borrowing.
- Automated allocation of assets across low-risk investments.
- Token exchanges across different blockchains.
- Decentralized asset custody and insurance.
Moreover, silly memetics also mirror the period when altcoins entered the spotlight and just as quickly vanished from the scene. Just as there was Dogecoin (DOGE), so is there SushiSwap (SUSHI) in the DeFi space, a brainchild of ‘Chef Nomi’ who became a multi-millionaire by cloning Uniswap’s code.
Since Ethereum was natively designed with smart contracts in mind, they all run on the Ethereum blockchain. There is one exception in the form of Lightning Network which runs on Bitcoin’s blockchain, but it only holds a $6.8 million market cap, and it only deals with payments. It is very difficult to create smart contracts on Bitcoin’s blockchain due to a lack of scripting logic.
For this reason, sidechains such as Liquid, Stacks, and RSK provide a hybrid solution where smart contracts are layered on top of Bitcoin’s blockchain. They have yet to gain major traction. In the meantime, tokenization of Bitcoin in the form of Wrapped Bitcoin (WBTC) is the most popular solution for Bitcoin holders to enter the DeFi space dominated by Ethereum.
DeFi’s Momentum Has Been Reached
Outside of lingering meme tokens and bloated protocols created for a quick buck, the DeFi space also has to deal with hacking issues. According to a recent CipherTrace report, hacks in the blockchain space declined by $1.8 billion compared to the previous year. However, DeFi hacks increased, presently accounting for 20% of all hacks in the crypto ecosystem. Just as it happened with cryptocurrencies and crypto exchanges, DeFi now enters the stage of solidification and fortification, by employing code auditing services and insurance policies.
At the same time, the Federal Reserve makes sure interest rates remain near zero, a policy that is then followed by all other traditional banks, creating a demand for a parallel financial ecosystem.
Even with all the immaturity baggage, DeFi has what it takes to respond to such a demand. As we previously noted with the trend of more and more people viewing Bitcoin as digital gold, this means that the hodler trend is also increasing. Hodlers don’t care about selling off Bitcoin, but holding it and buying it more. In turn, this creates a sizable pool of digital assets just waiting to be harnessed by DeFi platforms, especially now with the undergoing upgrade to Ethereum 2.0 which will drastically broaden the blockchain’s throughput.
For people seeking greater security, DeFi’s momentum is spilling over into a hybrid CeFi. For example, BlockFi offers up to 8.6% APY (annual percentage yield), which is unheard of even for tax-exempt savings accounts. It’s even possible to receive a higher APY on DeFi networks, but BlockFi offers a grade of protection people are accustomed to in the traditional world of finance.
Lastly, DeFi has an enormous space to expand into. In addition to record-low interest rates, 31% of the world’s adult population remains unbanked. Even in the economic powerhouse, the United States, 55 million Americans have no access to banking services. Regardless if one lives in a developed or undeveloped world, internet access is now all it takes to take advantage of both DeFi and CeFi.
Like what you see? Subscribe for daily updates.
Ethernity Chain Immortalizes Tony Hawk’s Last 540 Skate Trick With NFT
[Press Release – Los Angeles, California, 12th May, 2021]
Iconic skater Tony Hawk will soon have his own NFT thanks to the Ethernity Chain platform. The new NFT collection will launch on Wednesday May 12 at 12PM ET and be available for 24 hours.
Hawk recently performed what he insists will be HIS last ever “540” skate trick, and the moment in time will be preserved for eternity as an authenticated NFT (aNFT). The winning bidder will also receive the actual skateboard and shoes used in the final trick.
The legendary skater’s last ever 540 constitutes just part of a coveted collection co-created by influential digital artist Ondrej Zunka, a boyhood fan of Hawk.
“Birdman” will also provide one of his own skateboards, modeled after the inverted handstand and represented as an aNFT. Ethernity plans to raffle the skateboard randomly to a buyer of the aNFT.
The collection is completed by Graffiti Wall, a colorful artwork featuring contributions from skating enthusiasts in the form of messages, drawings and slogans etched on a blank canvas.
“I spend a lot of time around skateparks and there’s always a lot of graffiti everywhere, so I made this public Graffiti Wall inviting friends, family and the public to add a note to Tony,” said Zunka.
“I’ve created a texture from all of these messages and projected them onto the ramps, so whoever participated is now part of these two NFTs.”
Ethernity, which is committed to bringing legendary figures, real world collectibles, and fan engagement to blockchain, recently released aNFTs of Muhammad Ali, Pelé and baseball star Fernando Tatlis Jr. As with Hawk’s collection, each auction also included physical collectibles such as custom baseball bats and gloves worn by the boxer.
Ethernity is exploring applications for non-fungible tokens (NFTs) within the context of art and philanthropy. It provides a way for celebrities and public figures to endorse digital artwork created by renowned artists. Anyone can purchase each limited edition artwork, with a portion of the proceeds going to charitable causes that the celebrity supports. Ethernity was founded by early Bitcoin investor and NFT innovator Nick Rose Ntertsas.
Learn more: http://ethernity.io/
BitMEX Executives to Face Trial in March 2022
The executives of the derivatives trading platform – BitMEX – will face trial in March next year. The money laundering case will come 18 months after charges were first filed. The former members of BitMEX can face up to 5 years in prison and a $250,000 fine if found guilty.
The Trio Heads to Trial
Last year, US officials accused the CEO of the company Arthur Hayes, the co-founder Benjamin Delo, and the chief technology officer Samuel Reed of violating the Bank Secrecy Act. Moreover, the members of BitMEX were served with money-laundering charges.
On May 11th – 18 months after the first accusations against them – New York District Judge John Koeltl set the trial date for March 28th, 2022. Furthermore, Gregory Dwyer – BitMEX’s head of business development – also faces charges but will appear in court separately.
Even though the company’s headquarters are in the Seychelles, the US Department of Justice accused BitMEX of failing to apply anti-money laundering procedures while doing business with US-based customers.
Interestingly enough, the ex-CEO of BitMEX – Arthur Hayes – said that the exotic island was a more convenient place for business as it was much easier to bribe Seychelles’ authorities rather than the US ones. The former executives of the cryptocurrency exchange could face a maximum of five years in prison and a $250,000 fine.
Where Was Arthur Hayes?
Attorney Jessica Greenwood told the court that Hayes has ”discussed a surrender date of April 6th, 2021 in Hawaii.” She added that ”the plan is to notify the Court in advance of that appearance and discuss logistics” around his submission.
As CryptoPotato reported, even after his remote announcement Hayes continued to reside abroad and explained that he would only visit the United States whenever has to face the trial in New York.
In the end, the former BitMEX CEO indeed turned himself in on April 6th, 2021. However, the officials released him on a $10 million bond pending the future court process.
dotmoovs Raises $840,000 From Strategic Investors and Partners
[Press Release – Tallinn, Estonia, 12th May, 2021]
dotmoovs, an NFT platform powered by advanced computer vision algorithms has successfully completed a private funding round of $840,000 from notable investors. Amongst the investors are Moonrock Capital, Morningstar Ventures, Spark Digital Capital, Ascensive Assets, Rarestone, Building Blocks, MarketAcross, AU21 and GBV Capital.
The sports industry needs a solution for giving everyone a real chance to earn from their skills. dotmoovs is designed to bridge the gap between physical and geographic limitations, assessment of skill and finally – monetisation. Our vision is to build a powerful sports platform where everyone can challenge their friends or any other similar skilled players in the World for a challenge in their favourite sport.
“We are proud to have such notable investors joining us in building the first crypto mobile worldwide sports competitive environment. We know they can boost our growth and provide industry specific insight and knowledge which will be a deciding factor for us” said Ricardo Martins Costa, head of growth of dotmoovs.
“Our vision is a robust platform powered by blockchain and a state-of-the-art AI system that can analyse videos of players performing sports challenges in real-time” Ricardo adds.
“Moonrock Capital and Morningstar Ventures have come together to assist in incubating and bringing the dotmoovs project together. We are grateful and honored by the trust shown by dotmoovs’ team to become their official incubators and lead investors. Working closely with the team for some time now, we are highly impressed with their professionalism, expertise, and what they’ve developed so far. We are very excited to see this ambitious and revolutionary project come to life – combining sports, blockchain, and NFTs with dotmoovs’ vision of growth. The level of their supporting technology is not something we see every day. For these reasons, we are thrilled to be a part of dotmoovs’ journey and helping them achieve their vision.” said Simon Dedic, Managing Partner Moonrock Capital, and Danilo Carlucci, CIO Morningstar Ventures.
dotmoovs is the first crypto mobile worldwide competitive environment. The platforms allow users to compete with others around the world just by bringing their skills, ambition, and smartphone. dotmoov’s AI-based video referee will assess their performance in real-time. Powered by blockchain technology, sport competition will enable fair challenges and access to unique digital assets.
Ray Dalio’s Bridgewater CFO leaves to work on Bitcoin full-time
Ethereum price closes in on $4K as Shiba Inu (SHIB) steals Dogecoin’s thunder
CFO of World’s Largest Hedge Fund Joins Institutional Bitcoin Firm NYDIG
Ethereum (ETH) Hits $3800 ATH As Coinbase Premium Shoots With Institutional Interest
Analyst who predicted ETH to reach mid-$3K now says $10K the next destination
Legendary Pelé NFT Set to Drop on Ethernity May 8
Why Andre Cronje Believes DOGE Is Good For Crypto
Crypto Banter Will Give Away Over $500K To 10 Eligible Community Members
Dogecoin Plummets 30% From Highs Following Elon Musk’s SNL Appearance
JOSÉ FONTE AND EDER BECOME THE FIRST FOOTBALLERS IN THE WORLD TO LAUNCH NFTs
XRP, Dogecoin, Cardano Price analysis: 08 May
GBTC discount presents a unique challenge for Grayscale and investors
Dogecoin dumps following mention from Elon Musk on Saturday Night Live
What Edward Snowden Thinks “Dragon Level” Wealth Will Do To Bitcoin
Bridgewater Associates CFO heads to Bitcoin-focused firm
Bank of England Governor Andrew Bailey is Giving Crypto a Thumbs Down — Here’s Why
BSCTrades Introduces Limit Order Tool and Token Launch Snipper
Next-Generation Blockchains Providing Scalable Solutions
Cardano, BCH, LTC, ETH, Chainlink and VET: Watch out for this sign when it comes to alts
Blockchain1 week ago
Mastercard adds 6 blockchain payments startups to accelerator program
Blockchain1 week ago
Major Law Firm CMS Adds Stratis (STRAX) to its Legal Accelerator Program
Blockchain5 days ago
Crypto Market Cap Added $300B in 7 Days as Altcoins Explode: The Weekly Recap
Blockchain1 week ago
eBay could add a crypto payment option, says CEO
Blockchain1 week ago
Starcoll To Issue Limited Edition Star Wars Collectibles as NFTs
Blockchain1 week ago
Pro traders buy the Bitcoin price dip while retail investors chase altcoins
Blockchain4 days ago
Ray Dalio’s Bridgewater CFO leaves to work on Bitcoin full-time
Blockchain1 week ago
Singapore’s largest bank posts tenfold crypto volume growth in Q1 2021