Liquidify is a decentralized smart contract protocol designed to improve the liquidity and growth potential when it comes to long-tail crypto assets investing by using a mechanism inspired by traditional finance to operate with non-performing loans.
By using the protocol, holders of long-tail crypto-assets can easily collateralize them by using Liquidify asset pools which are then synthesized by the liquidity accelerator into a fixed amount of tokens: Liquidity Accelerator Tokens (LAT) and Liquidify Tokens (LFY).
Liquidify is Helping to Power an Important Sector
The cryptocurrency ecosystem has seen 2021 as one of the best years in terms of both adoption and capitalization value as millions of individual and institutional investors jumped into the cryptocurrency, NFT, Decentralized Finance (DeFi), and blockchain markets.
With mainstream media and financial institutions paying close attention to the evolution of the crypto ecosystem, new projects continue to emerge to provide new use cases and cover the lackings of existing protocols, creating a whole new set of opportunities for interested parties.
While Centralized Exchanges used to be the go-to option for crypto investors, the advent of DeFi has given place to decentralized financial protocols that have facilitated the launch and exchange of the digital assets introduced by these projects but there are there multiple barriers that need to be overcome.
Crypto assets with low liquidity, low trading volume, and low market capitalization (long-tail crypto assets) have represented a challenge for crypto investors due to the difficulty they present at the time of trading them, while still representing huge potential in the crypto market.
The DeFi ecosystem has grown exponentially over the past year but no single solution has been created to address this concern. However, a new project was announced earlier in February of 2021 that was designed to capitalize on the potential of long-tail crypto assets: Liquidify.
What is Liquidify?
Liquidify tokens can be converted back into long-tail assets with real-time prices, allowing the exchange for other types of crypto assets and swapping of long-tail assets. They are also able to be used with smart-contracts, and a range of other tools in the Liquidify ecosystem.
The project was launched with the expectation of reinvigorating the existing community of long-tail assets investors and allow new users to join by providing a dedicated protocol that allows them to lock their assets in the liquidity pools, receiving rewards in exchange and facilitating the tracking of prices in a way similar to the use of indexes.
No other platforms in the crypto ecosystem have focused so far on offering a liquidity acceleration function to long-tail crypto assets but have focused on the creation and exchange of synthetic assets, which are fundamentally different from the used cases offered by Liquidify.
As Ruth Porat said: “Liquidity is oxygen for a financial system”.
To reinvigorate and maintain the healthy status of the long-tail crypto-asset market, and therefore the potential for innovation of the whole crypto ecosystem, a solution to accelerate and facilitate liquidity of such assets was much needed.
How Does LiquidifyWork?
By using LAT to track prices of the long-tail assets locked up in it, liquidify essentially operates as an index that not only provides speculative advantages and improved liquidity but also offers essential information about the general crypto market.
This infomation can provide a competitive edge when it comes to executing investment strategies.
The protocol claims to provide several value propositions that no other platform offers at this time beyond the creation of liquidity for longtail crypto assets.
The protocol also provides market reentry channels and price exposure, reduced risk of prices falling due to synthesis, expansion of investor population on the long-tail crypto asset community, and price discovery functions.
The liquidity protocol has been built on top of Binance Smart Chain (BSC) and Huobi ECO Chain (HECO), which allow it to offer higher performance at lower prices than protocols built on the Ethereum network while also providing better scalability in the long term.
By using the Liquidify liquidity accelerator to mint LAT and LFY tokens in combination with Liquidify Long-tail Crypto Assets Pool, users can collateralize any ERC-compliant token by taking advantage of the protocol’s Oracles to establish prices in the process.
While only ERC-20 tokens will be supported to start with, the development team expects to add more tokens in the future.
LAT and LFY: The Ying and Yang of Liquidify
As previously mentioned, Liquidify uses two different tokens to provide users with its functionality: Liquidity Accelerator Tokens (LAT) and Liquidify Tokens (LFY).
LAT is an ERC-20 token issued by the protocol in which prices will be anchored to the assets composing the portfolio locked into the liquidy crypto-asset pool, allowing users to then redeem it to recover the locked assets.
The LAT token will take on DEX liquidity mining, LAT staking, payment of platform fees, and “entry tickets” for participating in asset collateralization functions, which will make it operate as the fuel behind the protocol.
LFY on the other hand will operate as the governance token of the platform, being issued as a reward for interacting with the protocol and allowing holders to take part in the decision-making process by granting them voting and proposing privileges.
The Team Behind Liquidify
Liquidify’s development team consists of 20 members with ample experience in the tech and blockchain industry.
The team includes winners from the Google coding champions, Binance’s Hackaton, and multiple members who have worked for Fortune 500 companies such as Microsoft, IBM, Google, etc.
The project’s executive team consists of 5 people with a combined experience of over 60 years in the technology industry and 20 years in the crypto market, which has provided them with different insights and inside knowledge of the needs of the industry.
Despite the diverse backgrounds in the industry, the development team behind Liquidfy agrees on two basic principles that drive their work on the project: That markets live and die by liquidity, and Liquidify can be the battery that drives that liquidity to boost the ecosystem.
The project has also partnered with companies and projects like Blockchain Wave, Binance Chait, XBOT EX, and Huobi ECO Chain, to improve their features and reach to create new investment opportunities for crypto enthusiasts around the world.
The Future of Liquidify
While Liquidify is still a new project when it comes to development, the team behind it has already established goals for what the project will look like during the next year, all of them based on credible deadlines.
The protocol’s beta platform is expected to be launched in April of 2021 and will see the deployment of the Collateral Synthetization feature, which will transition the official Liquidify 1.0 stable version launch later the same month.
Version 2.0’s Beta will be launched in May and will see the addition of Long-tail Asset Pool syncretization with extended multi-token allowlist, which will provide added flexibility to protocol users. The stable 2.0 version is planned to be launched in June.
Lastly, the beta for Version 3.0 will be launched sometime in August with the addition of more flexible asset pool setup rules, which will then be launched as a stable version in October of 2021.
During all this time, the Liquidify team will also be working on promoting the platform and implementing new features depending on the needs of its users, as well as establishing new partnerships.
Pele NFTs to Drop on Ethernity Chain from May 2
NFTs is about capturing value of precious moments compliantly. Ethernity Chain does this brilliantly, this time by dropping a new collection of NFTs honoring the legacy of the iconic Brazilian soccer player, a world cup winner, and a legend in soccer halls, Pele.
Pele is coming to Ethernity Chain
An announcement from Ethernity Chain—a differentiated platform introducing authenticated NFTs, on Apr 16, said Pele’s collections would be available in two weeks from May 2.
These valuable collections are created by Kingsletter and Visual Lab–leading Australian Concept artists. It is the first time the legend’s trading cards have been released digitally.
The second batch will be Pele NFTs will be released later this year.
It is easy to see why the physical vintage cards of Pele are worth millions and considered the most valuable in the world.
Pele’s Golden Records make his NFTs Valuable
Pele is award-winning and honored severally in the last 60 years or so.
Together with Diego Maradona, they are joint winners of the FIFA’s Player of the Century award.
He was also instrumental in three World Cup-winning teams of 1958, 1962, and 1970.
Besides, he was unplayable during his playing years. Thus far, he remains the highest goal scorer in Brazilian national team history, scoring 77 goals in just 92 appearances.
Before retiring in 1977, Pele scored 500 goals for Santos—a professional football club in Brazil.
For this, Pele is adored and endeared by football fans and bodies globally for his contribution to Soccer and tireless efforts in eradicating poverty. Through the Pele Foundation, the mega football star is empowering Children battling poverty.
For this reason, 90 percent of Ethernity Chain’s sales will directly benefit the charity.
Jason Heuser’s NFT Collections Sold out for Big Dollars
This collection will be the second following Ethernity Chain’s partnership with Jason Heuser, which saw the drop of the “Welcome to the Internet” collection.
It was an immense success since the “Legendary Edition NFT” eventually sold for $162k from 22 bids. The NFT hard a reserve price of $35k.
Other NFTs—the “Limited Super Edition” sold for $173,824 while the “2012 Original” was scooped for a whopping $224,800.
Mergers and acquisitions are rising, leaving crypto assessments in question
Fintech, cryptocurrency and mergers and acquisitions are poised to intersect significantly in the coming year. M&A activity is expected to rebound quickly — more than 60% of decision-makers at large companies who were surveyed by FTI Consulting for a February report agree that their company has recently been a target of aggressive M&A, and 39% say their companies are looking at M&A as a result of the COVID-19 pandemic. At the same time, the cryptocurrency market is making strides toward mainstream acceptance.
As a result, there’s likely to be an uplift in deals involving cryptocurrency assets and valuations throughout 2021. While this trend is likely to spur some exciting developments in the financial sector, it is also starting to raise unprecedented questions about whether cryptocurrency and these complex business models can be accurately assessed and verified in the context of dealmaking.
Digitizing the world of finances
The effects of the COVID-19 pandemic have driven significant shifts from physical to digital services across a wide range of industries — none more dramatically than in the financial services industry, in which S&P Global has reported that an estimated 420 billion transactions, worth $7 trillion, will switch to cards and digital payments by 2023, reaching $48 trillion by 2030.
PayPal further legitimized cryptocurrency when it began accepting it in November 2020 and announced its acquisition of Israeli crypto startup Curv in March. Visa has also been active in the fintech arena, most recently with its $5.3 billion acquisition of Plaid in January. Investors are also keeping a close eye on the developments that will follow Coinbase’s recent debut on the Nasdaq stock exchange. Naturally, all of this activity is generating a lot of interest in fintech and cryptocurrency companies among traditional financial services institutions and big tech corporations. Even amid market lows during the first half of 2020, cryptocurrency-related M&A hit $600 million, more than the total for all of 2019. All signs point to an even larger year in 2021.
The need for due diligence
Of course with M&A, IPOs and capital raises also comes the need to conduct due diligence, market assessments and valuations. But when cryptocurrency is involved as the primary asset or a key asset, there are additional, complex layers to standard due diligence processes.
Buyers and target companies need to consider conducting a technical assessment of the digital assets at play. Potential buyers will want to know how to verify the cryptocurrency assets and ensure that the target company’s reported assets are accurate. Because cryptocurrency companies often operate under unconventional business models, and due to the very nature of distributed ledger systems, it’s not always clear what’s what. The crux of the issue is to find out about any problems, risks or inaccuracies in a target company’s cryptocurrency assets, framework and business model and whether they have the correct procedures in place to support their crypto-based business activities.
Likewise, cryptocurrency companies that are looking to raise money or sell their business to a larger technology or financial services corporation (or file for an IPO) can help position their business by conducting in-depth assessments that will demonstrate their differentiators and value to potential buyers, and support subsequent valuation and due diligence activities.
The nuances of the crypto space
Many may not understand the importance of conducting a technical assessment and cryptocurrency evaluation as part of their larger financial due diligence, or that it’s even possible. However, experts in this space are beginning to develop complex methodologies to conduct, fast, in-depth and cost-effective technical assessments of cryptocurrency assets and leverage digital forensic investigation techniques to sample and verify digital wallet ownership, digital asset ownership, as well as verify assets under custody, and the value and validity of assets.
Additional areas that buyers should examine in a crypto-focused technical assessment include:
- The full scope of digital asset holdings, including hot wallet services, cold wallet storage, business wallet services, portfolio management and other services.
- Size, locations, duties and other key details relating to technical and sales support, and development teams.
- Risks within cryptocurrency-related contracts, privacy, security, Know Your Customer, Anti-Money Laundering, signatures and other policy controls.
- Code audits across wallets, user interface and application programming interfaces.
- Governance implications (such as regulatory requirements and standards including the United States government’s Cybersecurity Maturity Model Certification and the European Union’s General Data Protection Regulation).
- Technical structure and stability.
- Third-party partnerships, data use and obligations.
- Research and development projects and developmental coin/token support.
In addition to traditional financial due diligence and valuations that accompany fundraising and M&A transactions, buyers in this space will also need to validate and assess the technical elements of the target company’s cryptocurrency assets and structures. Doing this right will require the support of a domain expert in blockchain and cryptocurrency who understands the technical complexities and knows what questions to ask. Cryptocurrency remains an enigma to many people, but a thorough, expert-driven technical audit can reveal risks and eliminate guesswork to support the execution of high-value, disruptive deals.
The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Steven S. McNew is a senior managing director within the technology practice of FTI Consulting. In his role, Steven helps clients evaluate and implement blockchain solutions and builds cost-effective, defensible strategies to manage data for complex legal and regulatory matters. Steven is an expert in blockchain, information and data security, complex discovery and digital forensics. He completed studies in blockchain and cryptocurrency at MIT and has led engagements involving blockchain assessments, pilot projects and software selection and implementation. He has also led disputes involving issues related to blockchain and various forms of cryptocurrency.
AgeUSD to Launch as First Stablecoin on Cardano Network
Multinational blockchain technology company Emurgo initially announced the AgeUSD stablecoin in January 2021. The firm has since announced a partnership between the Ergo Foundation, Emurgo, and Charles Hoskinson’s Input-Output Global, the parent company of IOHK.
The AgeUSD stablecoin will be available on Cardano as soon as smart contract capabilities are launched on the blockchain, it revealed.
Do We Need Another Stablecoin?
Emurgo is aiming to prevent events like MakerDAO’s Black Thursday which emerged through vulnerabilities in its Dai collateralization mechanism. A mass liquidation of the vast majority of Maker vaults resulted in around $4 million in Dai being under-collateralized at the time in March 2020.
AgeUSD’s so-called “Staticoin” protocol-inspired design does not rely on collateralized debt positions (CDPs).
“Thanks to its design, the scenario that happened on Black Thursday is not possible for the AgeUSD protocol. Without CDPs, we do not have liquidation events nor the requirement for users to perform transactions to ensure that the liquidations actually work properly,”
The stablecoin runs on the Ergo blockchain aiming to automate as much as possible within the mathematics of the protocol itself. Reserve providers pay Ergo’s native currency (ERG) to mint reserve coins which represent the underlying collateral. Users of the stablecoin can also deposit ERG into the reserves in order to mint AgeUSD, it explained. This is only allowed by the protocol if there are enough reserves above its reserve ratio. Banks use a similar method to loan out funds.
The Cardano partnership will also enable its native token, ADA, to be used as collateral to mint reserves. However, the potential downside is that the stablecoin is only backed by these two assets whereas Dai is backed by multiple cryptocurrencies.
AgeUSD will launch on Cardano when it rolls out the Alonzo update that ushers in Plutus powered smart contracts. This is expected in the latter half of this year according to the roadmap.
Cardano ADA Price Update
As the long-awaited update nears, ADA prices have been cranking to new highs, the most recent ATH being $1.55 on April 14. At the time of writing, ADA was trading up 2% on the day at $1.45 according to Coingecko.
It is the sixth largest cryptocurrency by market cap which currently stands at $46 billion and there are 32 billion tokens in circulation. The token was briefly flipped by Dogecoin but has regained its position in the charts, just below Tether.
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