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Elastic Supply Tokens, Are They The Future Of Stablecoins in 2021?

Elastic Supply Tokens, Are They The Future Of Stablecoins in 2021?

Elastic Supply Token

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Continue reading Elastic Supply Tokens, Are They The Future Of Stablecoins in 2021? at E-Crypto News.

Republished by Plato

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Elastic supply tokens, or rebase, work in a manner that their circulating supply expands or contract due to the changes that happen in the token price. They have a changing circulating supply and their operation idea is that instead of price volatility, token supply changes through rebases. The increase or decrease in supply is what is known as rebasing.

What if the bitcoin protocol can adjust how much bitcoin is in the user wallets to achieve a targeted price. Today you have one bitcoin, tomorrow you have two BTC but they are worth half of what they were the previous day. In general, that is how a rebase mechanism works.

Overview

Decentralized finance (DeFi) has introduced an assortment of new financial products on the blockchain. Some that have already gained popularity are tokenized Bitcoin on Ethereum, flash loans, yield farming, and Uniswap. The other segment of the crypto industry that has become interesting to review and follow is elastic supply tokens, commonly known as the rebase tokens.

The distinct mechanism behind them enables users to do lots of experimentation. Whenever a rebase happens, the token supply is decreased or increased algorithmically, according to the prevailing price of every token.

Elastic supply tokens can be compared to stablecoins in some ways. They are designed to achieve a target price and the rebase mechanisms are known to facilitate that. Nevertheless, the main difference is that these rebasing tokens are designed to achieve the price with a changing (elastic) supply.

But many ask, aren’t many cryptos operating with an ever-changing supply? The answer to that question is a somewhat ‘YES’. Today, 6.25 new bitcoins are minted with every block. After the 2024 halving, that amount will reduce to 3.125 BTC per block. Since it is a predictable rate, it is to estimate how much BTC will exist in 2022 or after the next halving event.

Notably, the supply-elastic tokens work differently since the rebasing mechanism adjusts the token circulating supply frequently. For instance, if an elastic supply token aims to achieve a value of $1, the rebase increases the current supply if the price is above the target. The increase in supply reduces the value of every token.

On the other hand, if the price is below $1, the rebase decreases supply which makes every token worth more. It means that the amount of tokens that users have in their wallets keeps changing whenever a rebasing happens.

If one has 100 Rebase USD (rUSD), which is a hypothetical token that targets a $1 price, the balance in their hardware wallet keeps changing. If the price drops below $1, one may have 94 rUSD in their wallet after rebasing. However, each of these rUSDs will be worth more than before the rebase.

The idea behind it is that your holdings that are proportional to the total supply remain constant with the rebase. This strategy ensures that one’s holdings proportional to the total supply do not change with the rebase. If one had 3% of the supply before the rebase, they should have 3% after it even if the number of coins in the wallet changes.

Thus, users get to retain their share of the network regardless of the price at any given time.

The Shortcomings Of Elastic Supply Tokens

Although they seem to be a great solution to the high volatility associated with the crypto market, elastic supply tokens are highly risky and quite dangerous forms of investment. It is advisable to invest in them only when one knows what they are doing.

Reviewing price charts might not be all that helpful because the number of tokens one holds will change after rebases happen. The strategy can amplify gains on the bright side or amplify losses on the flip side. If rebases happen when token prices are dropping, users lose money from the token price going down and own lesser tokens after every rebase.

Since they are challenging to comprehend, investing in rebasing tokens results in losses for many traders. It is only advisable to put money in elastic supply tokens if one is fully aware of the mechanisms that power them. Otherwise, investors who are not knowledgeable are not in control of their investment and cannot make informed decisions.

Rebasing Token Examples

Ampleforth

Ampleforth (AMPL) was among the first coins that work with an elastic supply. The coin aims to become an uncollateralized synthetic commodity, where 1 AMPL aims for a price of $1.00. Rebases in this market happens once after 24 hours.

This project had little traction until a liquidity mining campaign known as Geyser got introduced. This scheme distributes tokens for participants over a 10-year duration. Geyser is a major example of how liquidity incentives can create considerable traction for decentralized finance (DeFi) project.

Although it is technically a stablecoin, the AMPL price chart shows how volatile the elastic supply tokens get.

The AMPL price targets $1, but it can be quite volatile nevertheless.

Please note that the price charts show the price of individual AMPL tokens and do not take into account the changes that happen in supply. Ampleforth is quite volatile which makes it a risky coin to invest in.

It might be more sensical to chart elastic supply tokens in terms of market capitalization because the price of the individual units does not matter as much. The market capitalization may act as a better barometer of the network’s growth and traction.

AMPL market cap on a logarithmic scale.

Yam Finance

Yam Finance is an example of the elastic supply tokens that have gained significant traction. The Yam protocol’s general design is somewhat a mashup between Synthetix’s staking system, Ampleforth’s elastic supply, and yearn.finance’s fair launch. Notably, YAM tokens also target a price of 1 USD.

YAM is a community-owned experiment because all of the tokens were distributed via liquidity mining. There was no founder or pre-mine allocation which means that the space for the acquisition of these tokens was uniform for everyone using a yield farming scheme.

Being a new and barely known project, Yam acquired 600 million dollars of value locked in its staking pools within two days. What might have attracted massive liquidity could be how YAM farming was particularly targeting the holders of some of the popular DeFi coins. These were MKR, SNX, ETH, COMP, ETH-AMPL Uniswap LP, LEND, LINK, and YFI tokens.

Nevertheless, a bug in the rebasing mechanism affected the project with more supply minted than was planned. This project was eventually relaunched and then migrated to a new token contract supported by a community-funded audit and joint effort. Today, the future of Yam is entirely in the hands of YAM holders.

The Takeaway

Many now believe that elastic supply tokens are some of the innovations to watch out for in DeFi. As it is clear, these are tokens and coins that can algorithmically adjust their supply aiming to achieve a target price.

For now, these tokens may be in the experimental stage but might eventually gain massive traction and carve out their niche. At first, it might be challenging. However, several new DeFi protocol designs are in the pipeline which may take the idea further.

Source: https://e-cryptonews.com/elastic-supply-tokens-are-on-the-rise/

Blockchain

Kraken Daily Market Report for May 08 2021

Republished by Plato

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Overview


  • Total spot trading volume at $2.86 billion, 9% higher than the 30-day average of $2.63 billion.
  • Total futures notional at $797.5 million.
  • The top five traded coins were, respectively, Ethereum, Bitcoin, Dogecoin, Tether and Ethereum Classic.
  • Strong returns from Gnosis (+14%) and Ethereum (+12%).

May 08, 2021 
 $2.86B traded across all markets today
 Crypto, EUR, USD, JPY, CAD, GBP, CHF, AUD 
ETH 
$3914.1 
↑12% 
$797.5M
XBT 
$58953. 
↑2.7% 
$795.7M
XDG 
$0.6368 
↓7.6% 
$636.4M
USDT 
$1.0014 
↑0.05% 
$285.3M
ETC 
$128.55 
↑7.0% 
$104.4M
ADA 
$1.6234 
↓1.9% 
$79.3M
LTC 
$347.39 
↑0.6% 
$50.5M
XRP 
$1.5653 
↓1.0% 
$48.7M
DOT 
$39.923 
↑0.07% 
$43.9M
BCH 
$1400.7 
↑4.4% 
$42.4M
USDC 
$1.0 
↑0.0% 
$40.4M
LINK 
$48.693 
↓1.3% 
$30.8M
EOS 
$10.361 
↓0.26% 
$29.7M
TRX 
$0.1431 
↓3.0% 
$17.1M
FLOW 
$28.668 
↓2.9% 
$16.1M
SC 
$0.0405 
↓4.7% 
$15.6M
STORJ 
$2.2312 
↓0.4% 
$14.7M
ATOM 
$29.510 
↑3.0% 
$11.8M
XLM 
$0.6155 
↓2.5% 
$11.6M
DASH 
$409.86 
↑1.3% 
$11.2M
XTZ 
$6.9881 
↓1.3% 
$10.0M
QTUM 
$25.576 
↓4.3% 
$9.83M
XMR 
$476.08 
↑4.6% 
$9.7M
KSM 
$435.0 
↑1.3% 
$7.39M
ZEC 
$315.75 
↓1.3% 
$6.91M
FIL 
$148.15 
↓1.4% 
$6.82M
WAVES 
$32.449 
↓0.14% 
$6.57M
UNI 
$40.532 
↑2.0% 
$6.55M
ALGO 
$1.5198 
↓3.7% 
$6.03M
DAI 
$1.0011 
↓0.01% 
$6.0M
OMG 
$11.829 
↓0.15% 
$5.87M
LSK 
$8.4918 
↓6.0% 
$3.77M
COMP 
$782.88 
↑9.6% 
$3.71M
ICX 
$2.6909 
↓1.6% 
$3.63M
NANO 
$9.7242 
↓0.6% 
$3.63M
AAVE 
$466.93 
↑5.7% 
$3.39M
GRT 
$1.5855 
↓0.6% 
$3.05M
OCEAN 
$1.4907 
↑2.0% 
$3.02M
KEEP 
$0.6183 
↑6.5% 
$2.98M
GNO 
$291.84 
↑14% 
$2.91M
SNX 
$18.448 
↓1.1% 
$2.72M
MANA 
$1.4419 
↓1.7% 
$2.67M
KAVA 
$6.2917 
↓2.8% 
$2.6M
BAT 
$1.4187 
↑0.6% 
$2.57M
CRV 
$3.5639 
↓2.6% 
$2.41M
KNC 
$3.4433 
↓2.6% 
$1.93M
REPV2 
$48.252 
↑1.0% 
$1.83M
OXT 
$0.6666 
↓1.1% 
$1.68M
BAL 
$69.63 
↑7.8% 
$1.52M
ANT 
$10.317 
↓3.2% 
$1.31M
YFI 
$54058. 
↑1.3% 
$1.3M
PAXG 
$1877.6 
↑0.8% 
$1.12M
EWT 
$13.644 
↓4.1% 
$772K
REP 
$46.85 
↓0.3% 
$714K
MLN 
$108.99 
↑0.5% 
$425K
TBTC 
$58915. 
↑1.6% 
$43.3K



#####################. Trading Volume by Asset. ##########################################

Trading Volume by Asset


The figures below break down the trading volume of the largest, mid-size, and smallest assets. Cryptos are in purple, fiats are in blue. For each asset, the chart contains the daily trading volume in USD, and the percentage of the total trading volume. The percentages for fiats and cryptos are treated separately, so that they both add up to 100%.

Figure 1: Largest trading assets: trading volume (measured in USD) and its percentage of the total trading volume (May 08 2021)



Figure 2: Mid-size trading assets: (measured in USD) (May 08 2021)



Figure 3: Smallest trading assets: (measured in USD) (May 08 2021)


###########. Daily Returns. #################################################

Daily Returns %


Figure 7: Returns over USD and XBT. Relative volume and return size is indicated by the size of the font. (May 08 2021)



###########. Disclaimer #################################################

The values generated in this report are from public market data distributed from Kraken WebSockets api. The total volumes and returns are calculated over the reporting day using UTC time.

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://blog.kraken.com/post/9008/kraken-daily-market-report-for-may-08-2021/

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Blockchain

Legendary Pelé NFT Set to Drop on Ethernity May 8

Republished by Plato

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[Press Release – Los Angeles, California, 8th May, 2021]

Iconic Brazilian footballer Pelé will be immortalized in NFT form on May 8.

The legendary striker, named FIFA World Player of the Century, is getting the tokenized treatment with the release of a licensed aNFT – authenticated non-fungible token – exclusively on the Ethernity Chain at 12pm EST.

The coveted collection features several aNFTs of the soccer star, the result of a collaboration between Visual Lab and Rafa Zabala, whose credits include The Hobbit and Planet of the Apes.

The digital presentation includes “THE KING OF FOOTBALL,” an immersive video tracing the player’s humble origins on the streets of Brazil to a packed stadium witnessing his brilliance. The eponymous “Pelé” aNFT, meanwhile, is represented by a hyper-realistic digital bronze bust of the star in his heyday.

As part of the Pelé aNFT collection, Ethernity will be releasing multi-pack trading cards that make a nod to the player’s Panini trading cards of the past.

Ethernity’s special digital trading cards include “Gilded Bicycle Pelé,” which showcases the player executing his signature bicycle kick. The limited edition cards will be part of the Ethernity Cards and Packs Collection launching this summer, 2021.

90% of aNFT sales will go to The Pelé Foundation, a charitable organization that strives to empower young people facing poverty around the world.

Ethernity’s recent Muhammad Ali aNFT auction, which raised over $550,000, also resulted in a significant donation being made to the Muhammad Ali Foundation.

About Ethernity

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/

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Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://cryptopotato.com/legendary-pele-nft-set-to-drop-on-ethernity-may-8/

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Blockchain

Crypto Banter Will Give Away Over $500K To 10 Eligible Community Members

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[Press Release – Cape Town, South Africa, 8th May, 2021]

Banter Bags is a unique project in the cryptocurrency world that aims to give back to its community. What initially started as a $10,000 community giveaway is now worth over $500.000. Ten eligible community members will be chosen randomly to receive their share of the spoils once the Crypto Banter Youtube channel surpasses 250,00 subscribers.

The Banter Bags Giveaway is an event created by Ran Neuner, host of CNBC Crypto Trader and founder of Crypto Banter on Youtube. The initial objective was to reward active participation in the community and generate more engagement with the daily streams but as the investments started to grow it became a mechanism to really change some community member lives.

Speaking of pre-market allocations, the Crypto banter team initially put $10,000 in a public Ethereum address. That money was then invested into allocations, with more investments occurring daily to diversify the portfolio further. Several key investments have noted spectacular returns, including Shopx, Aioz, Refineable and Occam. All of these pre-market allocations have gone up in value by a factor of 100 or more.

As the total value of the Banter Bags now exceeds $500,000, a golden opportunity is created for the community. Once the Youtube channel surpasses 250,000 subscribers, ten community members will earn a Banter Bag with the corresponding spoils. The only requirement to be eligible is to subscribe to Crypto Banter on YouTube and follow the Twitter account. Community members can amplify their chances by following @cryptomanran and @sheldon_sniper on Twitter, by liking/commenting on tweets, and engaging with the two daily streams.

The Crypto Banter team adds:

“It started off as a fun idea of giving $10000 to our community, and as we started to invest, we realized that the community loved the idea of investments in pre-market allocations that we previously off-limits for the average investor. With this in mind, we went all in using our influence to reward our community. It was supposed to be a cool $10,000 giveaway to reward the community, and it has landed up becoming an opportunity to change lives. The channel has exploded since we launched this initiative. We’re up by over 100% on every metric, we gained over 100k subscribers and got over 5m views in the last 28 days. More than that, our community has engaged more. They love the idea that we are giving back to them and that we may at any point change another life.”

Five winners have been randomly selected so far, all of which have an amazing story to share. One of the winners, who goes by the name of Irfan, lost his job and was struggling financially. With a pregnant wife expected to give birth in two months, being announced the winner of a Banter Bag triggered a life-changing event for Irfan. Anyone can go through a similar experience once the remaining Bags are given away to community members.

We also announced that one of the bags will be given to a charity and we are currently looking for a viable option.

About Crypto Banter

CRYPTO BANTER was founded by CNBC CRYPTO TRADER host Ran Neuner and is a LIVE STREAMING CRYPTO STATION. We bring you live streaming coverage of the global Crypto markets and give you a chance to call in, break the news, and banter with our guests and hosts. CRYPTO BANTER was created to bring the banter from Crypto Twitter and Telegram to a moderated, curated AV streaming medium. Think of its as a mix of CNBC, JOE ROGAN, and Talk radio for Crypto!

Follow Crypto Banter on YouTube

Follow Crypto Banter on Twitter

Telegram group

Website

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Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://cryptopotato.com/crypto-banter-will-give-away-over-500k-to-10-eligible-community-members/

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