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Seven things the DeFi suite can do for you in 2021

DeFi was the hottest topic of the year in the 2020 crypto realm.

The post Seven things the DeFi suite can do for you in 2021 appeared first on CryptoSlate.

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DeFi was the hottest topic of the year in the 2020 crypto realm. It has ruffled feathers and disrupted the financial world as blockchain technology transcends simple value transfer to include other financial services.

DeFi is a game-changer, innovation at the forefront, a promise, the next step to a global financial ecosystem where anyone, anywhere, at any time can access a variety of financial services. This goes beyond being able to transfer bitcoin or other cryptocurrencies across the world instantly and seamlessly. DeFi makes savings, loans, trading, insurance, and more accessible to anyone around the world with a smartphone (or supported wallet) and internet connection.

Short for decentralized finance, DeFi revolves around an ecosystem of decentralized applications (dApps) built on top of a blockchain network. Almost all DeFi applications are built on the Ethereum blockchain, which is primarily designed to create and execute smart contracts. These smart contracts are programs running on the blockchain that deploy automatically when specific conditions written into the contract are met.

As a simple example, a smart contract can be programmed to release funds to another user for Christmas each year. But smart contracts can also enable developers to build sophisticated dApps that provide functions beyond sending and receiving cryptocurrency. DeFi dApps can create stablecoins, lend out money and earn interest, take out a loan, exchange one asset for another, or even implement advanced automated investment strategies.

Here is a list of seven of the most popular types of applications in the DeFi suite and what they can do for you:

1. Decentralized exchanges (DEXes) where you own your keys

A DEX allows users to buy and sell their crypto with one another directly through a smart contract on the Ethereum blockchain, without a central authority. It effectively cuts out any middlemen (especially centralized crypto exchanges) so users can regain control of their finances and no longer need to entrust their money with governments, financial institutions or central banks.

Decentralized exchange platforms (DEXes) such as AirSwap Team, Bancor, IDEX, paraswap, and SushiSwap all have slightly different architectures.

One of the most popular DEXes at the moment is the decentralized trading protocol UniSwap. Uniswap is a fully decentralized cryptocurrency exchange that uses Automated Market Making to automatically settle trades and lets users trade popular tokens directly from their wallets.

Uniswap
Since its inception, the Uniswap Protocol (”Uniswap”) has served as trustless and highly decentralized financial infrastructure.

In an unprecedented move to show gratitude to their early community members, Uniswap conducted an airdrop in October, giving away 400 UNI to each address created before September 1, 2020, that conducted at least one transaction on Uniswap v1 or v2. At the time, 400 UNI was worth between 1,600 and 3,200USD, and currently hovers under 1,000USD.

Users with multiple addresses have really benefited from this unexpected gift. Furthermore, in the latest version of Uniswap (launch yet to be announced), UNI token holders will receive a percentage of each transaction that goes through the platform.

Uniswap
Uniswap conducted an airdrop in October 2020, giving away 400 UNI to each address created before September 1, 2020, that conducted at least one transaction on Uniswap v1 or v2. At the time, 400 UNI was worth between 1,600 and 3,200USD, and currently hovers around 3.7 USD.

2. Borrowing and lending — Higher yields, lower cost

Arguably the fastest-growing sector of DeFi, borrowing and lending platforms connect parties through smart contracts rather than leaving the management up to banks. Lenders can provide loans to businesses or deposit money and earn interest as others borrow their assets. Since middlemen are cut out of the exchange, lenders are able to earn higher returns.

Compound is an example of a popular blockchain-based borrowing and lending dApp. Users can lend out their crypto and earn interest on them, or deposit cryptocurrencies to the Compound smart contract as collateral in order to borrow funds. Due to its decentralized nature, users don’t have to specify their personal details (name, financial history, etc.) and their collateral is enough to get a loan. The borrowing/lending rates are algorithmically adjusted based on supply and demand.

Source: Compound.finance website.
Source: Compound.finance website.

3. Stablecoins — Instant processing, lower volatility

Stablecoins are less volatile cryptocurrencies as their price is pegged to a reserve asset such as the US Dollar or commodities like gold. Combining this elimination of doubt over value volatility with instant processing, and the security and privacy of crypto payments, they offer a strong value proposition.

Wrapped Bitcoin (WBTC) is one of the top DeFi tokens by market capitalization, in second rank with a market cap of approximately 1.6 billion USD at the time of writing. WBTCs are a method of sending bitcoin to the Ethereum network so they can be used directly in Ethereum’s DeFi system. It allows users to earn interest on the bitcoin they lend out via decentralized lending platforms. Other popular DeFi stablecoin projects include MakerDAO (DAI) and USD Coin (USDC).

4. Prediction markets — Bet with lower fees and better odds

Decentralized prediction market protocols allow users to bet on the outcome of future events, such as elections, without intermediaries. Traditional betting platforms tend to maximize the amount of value they extract from customers with high fees, low odds and all sorts of limitations.

Blockchain-based prediction markets like Augur and Guesser are changing this by providing a decentralized, peer-to-peer exchange that enables global and transparent access to its markets.

Users keep more of their winnings due to low fees and better odds (thanks to the wisdom of the crowd). An observation from CoinDesk points out that:

“DeFi has the potential to boost interest in prediction markets, since they are traditionally frowned upon by governments and often shut down when run in a centralized manner.”

5. No-loss lotteries — Play the lottery without losing your money

Another DeFi service includes participating in a no-loss lottery. PoolTogether is a no-loss game where participants deposit DAI stablecoins into a common pot. At the end of each month, a lucky participant wins all the interest earned and everyone else gets their initial deposits back.

PoolTogether is a protocol for no-loss money games powered by Ethereum.
PoolTogether is a protocol for no-loss money games powered by Ethereum.

6. Synthetic assets — Bet on real-world assets without holding them

Synthetix is a token trading platform built on Ethereum that allows users to create and exchange synthetic versions of real-world assets. It allows users to bet on crypto assets, stocks, currencies, precious metals and other assets in the form of ERC-20 tokens, without holding the actual asset. The synthetic assets are backed by excess collateral locked into the Synthetix contracts.

Synthetix rose to the top of the DeFi dApp charts in 2019 and has focused on transitioning to a decentralized governance structure in 2020. The big Synthetix feature that many are anticipating is when it attains the “ability to trade stocks like Tesla and Apple on top of Ethereum”.

Synthetix
Synthetix is the backbone for derivatives trading in DeFi, allowing anyone, anywhere to gain on-chain exposure to a vast range of assets.

Trade stocks like Tesla and Apple on top of Ethereum, without ever holding the actual shares.

7. Robo-advisors — Automated smart contract-based investment portfolios

Although relatively nascent to the DeFi scene, investors in DeFi can generate the highest possible yields with the help of robo-advisors. Investors would normally need to keep a constant eye on contracts and quickly reallocate in order to get the best yields. But now a robo-advisor (designed and set through a smart contract) can conduct the monitoring and allocating for investors. For example, an investment pool with five million worth of ETH in it will automatically be moved to a platform that offers the highest percent for collateral on ETH-based derivatives.

Staked’s Robo-Advisor for Yield (RAY) and Rari Capital are two popular robo-advisors that automate the process of finding high-yielding opportunities. RAY targets investors holding ETH, USDC or DAI, who can put their assets into a pool and let the smart contract automatically invest the pool (or part of it) into contracts with the best yield. Rari Capital operates on the same principles, but takes things a step further by offering three separate pools for users with different risk appetites.

The top 10 DeFi projects in market cap. Source: CoinMarketCap.com
The top 10 DeFi projects in market cap. Source: CoinMarketCap.com

Conclusion

With today’s DeFi suite, users can exchange cryptocurrencies through a decentralized platform, obtain a loan through a borrowing and lending platform, earn interest on their cryptocurrencies, bet in decentralized prediction markets with lower fees and better odds, enter no-loss lotteries, bet on synthetic real-world assets without holding them, invest strategically with the help of robo-advisors, and more. This is what DeFi can do now, and this article only highlights seven of the most popular use cases.

As an evolving and developing field, DeFi has yet to unleash its full potential. Its talents, its strengths, its risks, its possibilities, we’re still in the process of discovering them all. DeFi will continue to push boundaries, break down walls, and create havoc (regulators, I’m looking at you) in the financial industry. It’s the next step in a movement that aims to create an open-source, permissionless, and transparent financial service ecosystem available to anyone, anywhere, without the involvement of a central authority.

Guest post by Ruben Merre from NGRAVE

Ruben Merre is the CEO and founder of NGRAVE. NGRAVE is a crypto hardware wallet company which purports to offer the most secure solution on the planet with its fully offline hardware wallet, NGRAVE ZERO.

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Source: https://cryptoslate.com/seven-things-the-defi-suite-can-do-for-you-in-2021/

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Blockchain Game Alliance Will Host NFT Open Forum to Boost Adoption

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The Blockchain Game Alliance was formed by a group of companies looking to boost the adoption of blockchain technology in the gaming industry, and it is sponsored by companies like Ubisoft, AMD, ARK.io, Maker, and Algorand.

The organization will be running an online open forum discussion on January 15th about the status of the NTF space and its future in 2021.

The gamification of cryptocurrency investment strategies like yield farming represented a step forward for NFT’s, which promise to be a big player in the crypto ecosystem in 2021.

The Blockchain Game Alliance is Discussing the Latest Trends

The alliance believes that NFTs will play an important role in the game industry in the future and has invited 4 experts to talk about it by using a central question: “Which applications will generate interest and bring innovation in 2021?”.

The guest speakers will be Twobadour Paanar, Joël Hubert, Patrick Barile, Patrick Barile, Patrick Barile, and Alex Gausman, all of them with deep knowledge of the blockchain ecosystem.

Those interested in participating in the open forum will b able to do so via the Livestream on Friday 15th at 4 pm CET on the Alliance’s YouTube channel.

Gaming as the Gate to Blockchain’s Mass Adoption

One of the most important requirements for the mass adoption of any new technology is users not realizing they are using it while benefiting from everything it has to offer.

This level of integration and ease of use is what has made technologies like the internet, streaming, telecommunications, and computing such an essential part of daily life.

Videogame trends like the growing F2P business model incentive users to acquire in-game assets such as skins, weapons, loot boxes, characters, etc, by playing the game to earn them or by buying them.

However, these assets are limited to the developer’s ecosystem and can be taken from the player or modified at any time, making them feel more like borrowed assets.

This has made Non-Fungible Tokens (NFTs) one of the most popular applications of blockchain technology in the gaming industry, for games entirely built using blockchain and platforms looking to create gaming ecosystems alike.

NFTs are Becoming More Popular

The use of NFTs brings clear advantages for players not only by providing them with ownership over their assets but by allowing developers to create more complex universes in which games can interact with each other.

Most importantly, this happens without the player having to know what an NFT or blockchain is or is required to jump through hoops.

The reason why the gaming industry has such a potential to drive blockchain and crypto mass adoption over other industries is its sheer size, being bigger than all other entertainment industries combined, and the tech-savvy nature of most of its users.

2020: A Great Year for NFTs and Crypto

2020 will be a year to remember for decades to come as a year full of events that affected people on a global scale.

It will also be a year for crypto and blockchain enthusiasts to remember due to the bull run that took place by the end of the year, the Decentralized Finance (DeFi) and NFT boom, and innovation in multiple niches.

In the words of Ilya Abugov, DappRadar’s project manager: “There is more hype around NFTs right now. To some extent, it’s an extension of the DeFi excitement.”

Projects like MEME and Aavegotchi showed the world the potential of NFTs to do more than just work as collectibles by merging them with DeFi yield farming, while markets like Rarible and Opensea attracted thousands of users and investors around the world.

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Source: https://blockonomi.com/blockchain-game-alliance-will-host-nft-open-forum-to-boost-adoption/

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Grayscale dissolves XRP Trust as Ripple continues to face legal troubles.

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Sequel to its removal of XRP from its diversified public crypto fund, Grayscale Investments has announced its XRP Trust’s dissolution. The move is another fallout from the current enforcement action instituted by the U.S. Securities and Exchange Commission (SEC) against the blockchain firm Ripple. According to the official announcement, the move is in line with the current SEC lawsuit against Ripple, which among other things, classifies the fourth-ranked cryptocurrency as a security token.

Grayscale dissolves XRP Trust.

Grayscale announced the decision to dissolve its XRP Trust product in a press release issued on Wednesday, saying, “In response to the SEC’s action, certain significant market participants have announced measures, including the delisting of XRP from major digital asset trading platforms, resulting in the Sponsor’s conclusion that it is likely to be increasingly difficult for U.S. investors, including the Trust, to convert XRP into U.S. dollars, and therefore continue the Trust’s operations.” The firm revealed that it has liquidated the XRP Trust and plans to distribute the XRP Trust product shareholders’ funds as part of the dissolution process.

Ripple continues to face legal trouble. 

As reported earlier, Bakkt, one of the biggest cryptocurrency companies in the United States, will not support the cryptocurrency XRP as part of its further product development, according to the CEO. The US SEC filed the lawsuit against Ripple for allegedly selling unregistered security XRP. Since the lawsuit, XRP has plunged significantly as US-based crypto exchanges, including Coinbase, delisted the cryptocurrency from their platforms. Crypto exchanges with a more international presence have elected to discontinue trading of the token for U.S. customers. Ripple CEO had earlier said that they are planning to fight the lawsuit, and the company is adamant that XRP is, in fact, not security.

Source: https://coinnounce.com/grayscale-dissolves-xrp-trust-as-ripple-continues-to-face-legal-troubles/

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Ledger sets bounty for information on recent Shopify attacks

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The hardware wallet company has offered a Bitcoin bounty to anyone that provides information leading to the arrest of the perpetrators

Ledger announced in a blog post yesterday it would reward 10 bitcoins to anyone that delivers useful information regarding the ongoing data attacks. The current incident involves the e-commerce platform Shopify, which suffered a security breach last year. The breach resulted in a data leak of customers of about 200 of its merchants.

Shopify reported that rogue members of its support team accessed and stole customer transactional records of several companies including Ledger. The wallet maker has admitted that about 20,000 of its users were among those affected by the incident.

We at Ledger have learned very important lessons and will continue to work hard to ensure your trust is well-placed in us. We are humbled. We are becoming stronger and more resilient as a result,” the company wrote.

This disappointing turn of events has rubbed salt in the wound for the firm, with the number of attacks on Ledger customers on the rise since last summer when the first data breach was reported. At the end of last year, reports surfaced that scammers had begun exploiting the data breach at the company.

The wallet maker is now looking to manage the series of attacks and restore its reputation among crypto users. Ledger will award any person that provides information leading to the identification and arrest of the criminals 10 BTC. The Bitcoin bounty roughly translates to about $350,000 as per the current BTC/USD price.

The crypto firm further extended an invitation to other companies to get in on the bounty offer.

Ledger is committing numerous additional resources to identifying and prosecuting those responsible for the attacks on Ledger and Ledger customers including a bounty fund of 10 BTC for information leading to successful arrest and prosecution. We hope other companies will join the bounty program and help make the crypto community a safer place,” the company said in a statement.

In addition to hiring investigators to track the criminals, Ledger will also be adopting a new communication approach to protect its users.

We will implement a messaging model where proactive important security and technical information will be conveyed through Ledger Live. Email and social media will ONLY be used for broadcasting product messages and announcements.”

Source: https://coinjournal.net/news/ledger-sets-bounty-for-information-on-recent-shopify-attacks/

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