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Lido Protocol Does Eth 2.0 Staking but With a DeFi Twist

There’s a new yield farm for those backing Ethereum 2.0.

Republished by Plato

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There’s a decentralized autonomous organization (DAO) that lets ETH holders back Ethereum 2.0 without losing liquidity, and it wants to give its participants a vote.

Until Feb. 12, ETH holders have a chance to earn some of the governance token for Lido, a new decentralized finance (DeFi) and staking protocol. There will be other opportunities in the future, but it’s up to LDO holders to decide when.

Since Tuesday, the amount of ETH staked on Lido has more than doubled, breaking 60,000 ETH as of this writing.

Lido sits at Ethereum’s sweet spot, putting the road to Eth 2.0 into DeFi. It gives people a fresh way to contribute ETH to staking on Ethereum’s new beacon chain but still unlock the value of their ETH. It’s one of those stories that somewhat strains credulity, very much an only-in-DeFi kind of scenario. So far it’s working.

Kraken has already rolled out a similar product and Coinbase plans to, but those lack the element of distributed trust.

An early backer of Lido and a member of its DAO, Aave’s Stani Kulechov, told CoinDesk over Telegram, “Tokenized staking ETH is interesting, because you can use the tokenized staked ETH as collateral (for example in Aave) and get more liquidity in ETH so you can leverage quite a lot in Eth 2.0 staking, I’m curious to see how much leverage there will be in staking.”

Additionally, Lido has a governance token but it’s taking a unique approach to distributing it. Unlike Compound’s COMP, which announced a yield farming plan that ran forever or Yearn which unloaded it all super fast, Lido is parceling out its governance token as its stakeholders see fit. 

Lido’s governance token is called LDO. There are 1 billion of the tokens and 64% of them are dedicated to the founders and other early participants who got Lido off the ground, but that giant stash is locked for a year and then will be parceled out (vested) over the following year. 

But, about 360 million tokens are in the DAO treasury, but only 4 million tokens have ever been made liquid, before the new distribution that started on Jan. 13. 

These 4 million were distributed before LDO was announced, to “early stakers and DAO treasury tokens.” 

The distribution that just began, to depositors in the stETH/ETH pool on Curve, will pass out another 5 million LDO until Feb. 12. To get access to the airdrop, users simply need to contribute to Curve’s stETH/ETH pool, and then stake the liquidity provider (LP) tokens they receive into Curve’s gauge. Step-by-step instructions are detailed on the Lido blog. 

As an added benefit, holders who do so will also earn Curve’s CRV token

As of this writing, LDO is trading right around $1 each.

What is Lido?

Lido is a DAO that’s meant to give users a way to their ETH behind the new iteration of Ethereum without really sacrificing its liquidity. The team spelled it out in a primer. The fact that this works is somewhat remarkable.

As we’ve previously reported, once a user commits their crypto to Eth 2.0 staking, it very likely won’t be available until 2022 at the earliest (though wonders may never cease). Regardless, once the ETH is in, there’s no turning back. 

Those who deposit ETH into Lido to stake for Eth 2.0 will receive stETH in return, which stands for staked-ETH. 

This is the part that will sound somewhat unbelievable to outsiders: This version of ETH is basically trading at parity with regular ETH.

On the downside, stETH is a token on Ethereum, which means it can’t be used to pay gas. That would seem to suggest that it would have less value. On the other hand, stETH earns a return from staking, and ETH does not. So maybe the two balance each other out. 

Last month, CoinDesk estimated that each validator was earning about $6 per day in ETH, but the earnings are locked up too.

But stETH gets those earnings in the form of fresh stETH. It’s a cryptocurrency that rebases every day, like Ampleforth. Anywhere it resides, more stETH will appear. Users can trade it away and whomever receives it will begin earning the returns the former holder had. 

Ethereum 2.0 distributes a fixed amount each day among stakers, so the more ETH goes in, the less each staked ETH earns, so users will earn the most ETH at the beginning of their stake.

“Right now based on the amount of people that are staking, the rate is around 11.1%,” Lido’s marketing lead, Kasper Rasmussen, told CoinDesk in a phone call.

Backers don’t get 100% of the returns; 10% is set aside for the DAO, for now largely funding its insurance against slashing. Eventually it will likely designate some of the returns to pay validators.

As of this writing, just under 63,000 stETH have been minted, held in just under 1,500 addresses.

Who is doing the staking?

Staking service providers are chosen by the DAO. Users staking ETH don’t get to choose which staker their ETH goes to when they put it into Lido. 

“To become an approved operator for LIDO it is discussed by the LIDO community and it is voted on by token holders,” Rasmussen explained. 

The stakers are currently well-known staking companies in the space. The current staking providers are all members of the DAO, Stakefish, Staking Facilities, P2P, Certus and Chorus One. Any company can propose joining via the Lido DAO governance portal on Aragon.

Who got it started?

The Lido DAO members are “Semantic Ventures, ParaFi Capital, Terra, KR1, P2P Capital, Bitscale Capital, Stakefish, Staking Facilities and Chorus One, Rune Christensen of Maker, Stani Kulechov of Aave, Banteg of Yearn, Will Harborne of Deversifi, Julien Bouteloup of Stake Capital, Jordan Fish and Kain Warwick of Synthetix,” Rasmussen wrote in an email.

They contributed $2 million collectively to get the project off the ground.  

Why Curve?

Rasmussen said that the advantage of Curve is that it has accounted for the rebasing factor of stETH. Using a traditional automated market maker (AMM) that simply runs on the ratio of the two tokens in the pool, the daily change can throw the balances out of kilter. 

“The risk is here if you’re providing liquidity, instead of getting your daily staking rewards there’s a risk that it’s arbitraged away by other traders,” Rasmussen said.

The creator of Curve, Michael Egorov, said it was a relatively simple fix, one they had already dealt with via Aave tokens. “We do support the way stETH works (e.g. growing in quantity like Aave aTokens rather than increasing every token’s value as staking is going),” he told CoinDesk in an email.

Disclosure

Source: https://www.coindesk.com/lido-protocol-does-eth-2-0-staking-but-with-a-defi-twist

Blockchain

Fund Manager Bashes Bitcoin: An Extreme Form of Libertarian Anarchism

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As Bitcoin price makes headlines across mainstream and financial media, skeptics of cryptocurrencies have come out of the woodwork in droves.

The latest skepticism comes from Tim Bond, partner and portfolio manager at Odey Asset Management, who claims that Bitcoin has very little benefit to society, and instead is an extreme form of Libertarian anarchism. But could there actually be truth in the bold, blanket statement?

Tim Bond Bashes Bitcoin As Pointless, Vile, And Damaging To The Environment

Bitcoin is a subject that most economists, tech enthusiasts entrepreneurs, and fund managers alike are asked about these days, as the asset has ballooned from under $10,000 to more than $50,000 per » Read more

” href=”https://www.newsbtc.com/dictionary/coin/” data-wpel-link=”internal”>coin in less than one year.

Depending on who you ask, it is the most important technological revolution since the internet, while others might claim it is a bubble wait to burst.

Tim Bond, fund manager at Odey Asset Management, instead calls it “particularly vile,” “pointless,” and “damaging to the environment.”

Related Reading | Summing Up The Case For Crypto As The Future Of Collateral

Bond claims that Bitcoin isn’t only emitting more CO2 than most small economies, but that it is spearheading “a particularly extreme form of libertarian anarchism,” which he says is why the cryptocurrency is so popular amongst Silicon Valley types.

“If bitcoin starts to displace fiat currencies [government-issued currency that is not backed by a commodity], governments’ ability to tax, spend and redistribute will be severely impaired,” Bond continued.

bitcoin btcusd

As Bitcoin grows in value, the more disruptive power it wields | Source: BTCUSD on TradingView.com

Crypto Anarchist Future Prefers Consensus Over Forced Taxation

Bond, however, is absolutely right about at least one thing: Bitcoin could severely impact a “governments’ ability to tax, spend and redistribute” – a system that is arguably broken already.

Governments like the United States establish control over society through their money, and without that leverage, society won’t be as compelled to comply with taxation and other forms of control.

While much of this infrastructure was designed for the benefit of civilized society, governments have abused this control and how they redistribute wealth is a major ongoing economic problem that only Bitcoin has the potential to fix.

Related Reading | Why March Is The Bloodiest Month In Bitcoin History

By removing the government from the equation, it will require community consensus – something the crypto industry does well – to handle redistribution in the future.

Bitcoin has several key benefits that give the unique cryptocurrency its underlying value. It cannot be counterfeited, there are only 21 million BTC available ever, and much more. However, the greatest benefit of all could be the fact that governments can control it – something that Bond clearly can’t comprehend.

Featured image from Deposit Photos, Charts from TradingView.com

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Source: https://www.newsbtc.com/news/bitcoin/bitcoin-libertarian-anarchism/

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Chiliz (CHZ) rallies 60% to a $1B market cap as fan token offerings expand

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Nonfungible tokens (NFTs) and decentralized finance (DeFi) are two of the hottest concepts in the crypto sector, and each is altering the way projects and companies interact with the public on a wide scale. 

One project that is looking to apply these concepts into a framework for sports fan engagement is Chiliz, a blockchain platform created by the Socios fan engagement platform. The project is designed to allow fans to purchase branded Fan Tokens that let them influence their teams through the popular vote.

According to the project website, all Fan Tokens are minted on the Chiliz blockchain with on-platform voting being executed through a series of smart contracts.

Data from Cointelegraph Markets and TradingView shows that over the past month, the price of Chiliz (CHZ) has increased 760%, going from $0.022 on Feb. 8 to a new all-time high of $0.189 on March 8. CHZ trading volume also hit a 24-hour record at $1.92 billion.

CHZ/USDT 4-hour chart. Source: TradingView

The platform currently offers Fan Tokens for some of the most popular sports teams in the world, including FC Barcelona, Juventus, Paris Saint-Germain, AS Roma, Galatasaray and Atletico de Madrid.

Token launch sparked a strong rally

Momentum for Chiliz began to gather steam at the end of 2020 when the platform partnered with Binance to launch the ACM Fan Token for AC Milan on Feb. 24. The launch generated $6 million in revenue for the CHZ ecosystem.

ACM is part of a network of 23 major sporting and esports organizations that also have plans to work with Chiliz on launching Fan Tokens.

CHZ price received an added boost on March 2 when CEO Alexandre Dreyfus announced that the project would allocate $50 million to expand operations to the United States, and there are already plans to start working with local leagues and sports franchises.

VORTECS™ data from Cointelegraph Markets Pro began to detect a bullish outlook for CHZ on March 1, prior to the recent price rise.

The VORTECS™ score, exclusive to Cointelegraph, is an algorithmic comparison of historic and current market conditions derived from a combination of data points including market sentiment, trading volume, recent price movements and Twitter activity.

VORTECS™ Score (green) vs. CHZ price. Source: Cointelegraph Markets Pro

As seen in the chart above, the VORTECS™ score hit a high of 66 on March 1, less than 5 hours before the price of CHZ began to break out above $0.06. Following the price rise and consolidation above $0.11, the VORTECS™ score climbed to 69 on March 6, two days before the price surged to a new all-time high.

Currently, Chiliz is in ongoing talks with Formula One, and if the team is able to onboard popular U.S. sporting teams, the project could be well positioned to see further growth as blockchain technology and NFTs become more ingrained into the sports industry.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. 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/chiliz-chz-rallies-60-to-a-1b-market-cap-as-fan-token-offerings-expand

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Decentralized esports tournament series looks to bring traditional gamers to crypto

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Non-fungible token-focused investment firm Polyient Games is launching a new online tournament to introduce mainstream gamers to the crypto space.

In an announcement today, Polyient Games said it would be partnering with esports tournament platform Community Gaming for a $100,000 series featuring games using non-fungible tokens, or NFTs. The esports games will reportedly “function as a method of introducing mainstream gamers to the world of cryptocurrency and blockchain assets” by allowing players to acquire digital collectibles and use NFTs as in-game items.

“The marriage between decentralized technology and gaming will be one of the most significant themes of the coming decade,” said Craig Russo, co-founder of Polyient Games. “Our work with Community Gaming on this brand new decentralized tournament series serves as a major step towards bringing mainstream adoption to this new industry.”

In addition to esports games, the tournament will reportedly feature blockchain games including trading and battling game Axie Infinity and Ethereum-based digital trading card game SkyWeaver. All games will reportedly utilize Polyient Games’ decentralized exchange for in-game currencies.

The first event of the $100,000 tournament will begin on March 29, with prizes paid out in U.S. dollars and Polyient Games’ native token, PGU. 

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Source: https://cointelegraph.com/news/decentralized-esports-tournament-series-looks-to-bring-traditional-gamers-to-crypto

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