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Solving The “Rug Pull” Liquidity Problem On Uniswap DEX After The SUSHI Debacle

The cryptocurrency industry is gradually changing the traditional financial system allowing users to send transactions and make monetary payments across the globe seamlessly – bypassing geographical and governmental limitations. This has seen the crypto ecosystem evolve to create totally decentralized solutions in finance – decentralized finance (DeFi) apps – which provide a full financial system

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The cryptocurrency industry is gradually changing the traditional financial system allowing users to send transactions and make monetary payments across the globe seamlessly – bypassing geographical and governmental limitations. This has seen the crypto ecosystem evolve to create totally decentralized solutions in finance – decentralized finance (DeFi) apps – which provide a full financial system including lending, borrowing, saving, etc. without any frictions.

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However, these DeFi projects, especially if small, have found it difficult to get their tokens listed on centralized exchanges such as Binance and Coinbase. Moreover, to list these uprising projects, some of these centralized exchanges ask for exorbitant fees – unpractical for these small projects.

Understanding DEXes – Uniswap

This gave rise to decentralized exchanges, such as Uniswap, which provides a free listing of ERC-20 tokens. DEXes also differ from centralized exchanges in that users provide liquidity on the exchange in a method called pooling. Here, liquidity providers deposit cryptocurrencies in the liquidity pool and earn a share of the fees paid out in trading.

Uniswap DEX uses the Automated Market Maker to settle the trades between peers and the liquidity pool. The whole DeFi ecosystem is heavily dependent on liquidity hence a lack of it could raise problems for smooth trading on the platform.

Without liquidity, holders of the cryptocurrency will lack an incentive to keep the token as they will not be able to sell it on the market. On Uniswap, tokens prefer to create pools with 50% ETH and 50% of their selected token to ensure liquidity is maintained.

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Problems with Liquidity

Over the course of 2020, a number of crypto projects have come up with the rising DeFi wave but as was the case in 2017, crypto scams have also increased. On DeFi, liquidity remains the key manipulator of the protocol and too much centralization of this liquidity (or too little liquidity) can be bad for the protocols.

SUSHI scam exit

Recently, the cryptocurrency world has been awash with stories of one of the nastiest ‘exit scam’ in decentralized finance (DeFi) recently, raising doubts on the whole ecosystem. SushiSwap (SUSHI), a competitor to top decentralized exchange – Uniswap, dropped over 80% in a week as the creator of the project sold all his profits for a $16 million payout in Ethereum.

This type of scam, known as a rug pull, sees the hacker set up liquidity in the pool only to pull it out after some time leaving unsuspecting holders with severe losses.

As such issues become prevalent across the DeFi system, projects such as Unicrypt, LID Protocol, and Vesta Protocol aim at solving these liquidity problems on Uniswap and similar DEXes in the future.

A solution to liquidity?

As explained before, a rug pull scam mainly arises some minutes, days, or a couple of weeks following the liquidity injection from the hacker. Such a huge sell-off of tokens leads to cascading collapse of projects, whereby the small action of withdrawing liquidity for a profit leads to an eventual collapse of the system.

So how do you solve this SUSHI-related problem? Liquidity protocols that govern pool liquidity are one of the fast-rising solutions to the rug pull scams and Uniswap related liquidity problems. One of the robustly-built projects, LID Protocol, or the Liquidity Dividends Protocol, offers a “Proof of Liquidity” token that solves these types of problems.

Proof of Liquidity

Proof of Liquidity makes it impossible for scammers to take out their liquidity as they are vested for a period of time to enhance development and innovation on the platform. This is ensured by locking the liquidity of tokens that are pre-launched on their platform. This means that project owners cannot pull the liquidity from their project in a way that cons investors out of their money, or tokens.

Staking proceeds

The platform also prevents liquidity problems on Uniswap DEX by providing staking related incentives on the governance of the launched protocol. Here, liquidity providers are incentivized to stake and vote on decisions on the protocol. Projects such as LID Protocol and TrustSwap provide incentives such as token payments and tax incentives to users who participate in protocol growth.

This incentivizes token holders to partake in actions that are beneficial to the community at large.

Parting Shot

The recent SUSHI exit scam debacle is opening up conversations on how to effectively solve and prevent rug pull scams on Uniswap, Justswap, and other DEXes. The growth of liquidity solution providers will help grow the decentralized finance system, providing users with a highly trusted and safe platform to carry out “frictionless financial transactions”.

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Coingape is committed to following the highest standards of journalism, and therefore, it abides by a strict editorial policy. While CoinGape takes all the measures to ensure that the facts presented in its news articles are accurate.

Disclaimer
The views, opinions, positions or strategies expressed by the authors and those providing comments are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of CoinGape. Do your market research before investing in cryptocurrencies. The author or publication does not hold any responsibility for your personal financial loss.

Author: Stan Peterson




Being an active participant in the Blockchain world, I always look forward to engage with opportunities where I could share my love towards digital transformation.

Source: https://coingape.com/solving-the-rug-pull-liquidity-problem-on-uniswap-dex-after-the-sushi-debacle/

Blockchain

Spanish Banking Giant BBVA to Launch Bitcoin Trading and Custodial Services in Switzerland

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After conducting tests for several months, the Swiss branch of the large Spanish bank – Banco Bilbao Vizcaya Argentaria (BBCA) – has announced plans to release two services related to the cryptocurrency industry.

  • According to the official statement, private banking customers based only in Switzerland will have the option to trade bitcoin and other digital assets starting from Monday – June 21st.
  • BBVA’s second service will enable its clients to store their digital assets on a regulated platform, and both initiatives will launch simultaneously.
  • Nevertheless, the entity has no plans to offer advice or actively manage any funds related to cryptocurrency investments.
  • Alfonso Gomez, CEO of BBVA Switzerland, explained that these services come after an extended trial period and enhanced customer demand.
  • “This gradual roll-out has allowed BBVA Switzerland to test the service’s operations, strengthen security, and, above all, detect that there is a significant desire among investors for crypto-assets or digital assets as a way of diversifying their portfolios, despite their volatility and high risk.” – he added.

  • The services and a bitcoin management system will also be available in the bank’s mobile application. Users will be able to use to review their investments and track their performance.
  • The bank will provide a personalized digital wallet, which will enable customers to convert BTC and other digital assets to euros or other fiat currencies, and vice versa. The process will be automatic, “without delays and without the illiquidity that affects other digital wallets or independent brokers.”
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Source: https://cryptopotato.com/spanish-banking-giant-bbva-to-launch-bitcoin-trading-and-custodial-services-in-switzerland/

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Secret (SCRT) and Injective Protocol (INJ) Technical Analysis: What to Expect?

Secret (SCRT) and Injective Protocol (INJ) Technical Analysis

Rate this post Injective Protocol and Secret prices are holding up above key support levels. Still, INJ/USDT may crash towards $5 as SCRT/USDT buildup towards $2.5. Secret (SCRT) SCRT is the native currency of the privacy-centric focus enabling private and secure computation. Past Performance SCRT/USDT prices remain under the weight of sellers. However, the whipsaw of June 17 with markedly high trading volumes may provide a cushion for hopeful bulls. SCRT is relatively strong at press time, adding seven percent against the USD. Trading volumes are up 36X on the last trading day, buoying buyers. Day-Ahead and what to Expect Reading from the daily chart, SCRT/USDT is deep in bear territory. However, there are signs of strength as June 17 gains may lead the way. Technically, every low may be a loading opportunity for buyers expecting a surge towards $2.5 in line with gains of late May 2021. SCRT/USDT Technical Analysis SCRT bulls are back in contention, which is net bullish. Thus far, SCRT/USDT prices are in range, flattening out following losses of May 21. However, as long as SCRT prices are firm above $1 and May 2021 lows, every low may be a loading opportunity for bulls targeting $2.3 in the medium term. Losses below $1 invalidate the uptrend. Injective Protocol (INJ) INJ primes the protocol. Its creators look forward to truly decentralized solutions explicitly allowing users to trade various assets, including CFDs and derivatives. Past Performance of INJ INJ prices are mainly in range inside a tapering wedge with clear resistance and support lines. On the downside, INJ found support at $8, while the middle BB is a notable resistance line, as the price action of the last month shows. At spot rates, INJ is stable, losing versus the USD but posting minor losses against BTC and ETH. Day-Ahead and what to Expect Technical candlestick arrangements favor bears in the short term. Sellers are pressing lower, unwinding gains in a bear trend continuation pattern, as June 17 bar reveals. Nonetheless, a close above the middle BB may rejuvenate bulls, injecting them with momentum for the next phase higher. INJ/USDT Technical Analysis Technically, every high below the middle BB is a liquidation opportunity for opportunistic bears. In that case, $8 is the next target. Further losses in sync with May losses below the minor support trend line may force INJ/USDT towards $5 or $3 in the medium term. An unexpected surge above $9 ignites demand building up for $11.

The post Secret (SCRT) and Injective Protocol (INJ) Technical Analysis: What to Expect? appeared first on Cryptoknowmics-Crypto News and Media Platform.

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Injective Protocol and Secret prices are holding up above key support levels. Still, INJ/USDT may crash towards $5 as SCRT/USDT buildup towards $2.5.

Secret (SCRT)

SCRT is the native currency of the privacy-centric focus enabling private and secure computation.

Past Performance

SCRT/USDT prices remain under the weight of sellers. However, the whipsaw of June 17 with markedly high trading volumes may provide a cushion for hopeful bulls.

SCRT is relatively strong at press time, adding seven percent against the USD.

Trading volumes are up 36X on the last trading day, buoying buyers.

Day-Ahead and what to Expect

Reading from the daily chart, SCRT/USDT is deep in bear territory.

READ  SushiSwap (SUSHI) and NEAR Protocol (NEAR) Technical Analysis: What to Expect?

However, there are signs of strength as June 17 gains may lead the way.

Technically, every low may be a loading opportunity for buyers expecting a surge towards $2.5 in line with gains of late May 2021.

SCRT/USDT Technical Analysis

Secret Price Daily Chart for June 18

SCRT bulls are back in contention, which is net bullish.

Thus far, SCRT/USDT prices are in range, flattening out following losses of May 21.

However, as long as SCRT prices are firm above $1 and May 2021 lows, every low may be a loading opportunity for bulls targeting $2.3 in the medium term. Losses below $1 invalidate the uptrend.

Injective Protocol (INJ)

INJ primes the protocol. Its creators look forward to truly decentralized solutions explicitly allowing users to trade various assets, including CFDs and derivatives.

Past Performance of INJ

INJ prices are mainly in range inside a tapering wedge with clear resistance and support lines.

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On the downside, INJ found support at $8, while the middle BB is a notable resistance line, as the price action of the last month shows.

At spot rates, INJ is stable, losing versus the USD but posting minor losses against BTC and ETH.

Day-Ahead and what to Expect

Technical candlestick arrangements favor bears in the short term.

Sellers are pressing lower, unwinding gains in a bear trend continuation pattern, as June 17 bar reveals.

Nonetheless, a close above the middle BB may rejuvenate bulls, injecting them with momentum for the next phase higher.

INJ/USDT Technical Analysis

INJ Price Daily Chart for June 18

Technically, every high below the middle BB is a liquidation opportunity for opportunistic bears. In that case, $8 is the next target.

Further losses in sync with May losses below the minor support trend line may force INJ/USDT towards $5 or $3 in the medium term.

READ  THETA and Serum (SRM) Technical Analysis: What’s Next?

An unexpected surge above $9 ignites demand building up for $11.

#DeFi #INJ #INJ/USDT #Injective Protocol #SCRT/USDT #Secret Network

Source: https://www.cryptoknowmics.com/news/secret-scrt-and-injective-protocol-inj-technical-analysis-what-to-expect/

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Bitcoin isn’t as Anonymous as People Think it is: Cornell Economist

Bitcoin Anonymous Cornell Economist

Rate this post Eswar Prasad, an economist at Cornell University that says that Bitcoin isn’t as anonymous as people think it is. Other issues pointed out by him include Bitcoin mining being extremely bad for the environment, and that it doesn’t work well as a currency. Cornell Economist Points Out more Flaws of Bitcoin Besides Not Being Anonymous Leading cryptocurrency Bitcoin isn’t as anonymous as people think it is, according to a professor at Cornell University, Eswar Prasad, and formerly head of the International Monetary Fund’s China division. In an interview with CNBC on June 17, Prasad has highlighted the flaws of the flagship cryptocurrency. Firstly, he highlights that Bitcoin mining is an energy-intensive process and that it harms the environment and that it’s “certainly not good for the environment”. On the counterpart, he does highlight that Ethereum requires less energy than the flagship digital asset, saying: “That is going to be much less energy-intensive, and it could deliver a lot of the benefits that bitcoin was supposed to deliver. It could also make transactions much cheaper and quicker.” Secondly, he points out that BTC isn’t as anonymous as people think it is: “The main idea of bitcoin was to provide pseudonymity. But it turns out that if you use bitcoin a lot, and especially if you use Bitcoin to get any real goods and services, then it becomes possible eventually to link your address or your physical identity to your digital identity.” He reminds the U.S. government’s recent success in tracking and retrieving part of the Bitcoin ransom from the Colonial Pipeline ransomware attack has increased doubts about the security and non traceability of Bitcoin transactions. Bitcoin is a “Slow and Cumbersome” Medium of Exchange Lastly, he says that BTC doesn’t work well as a currency as it’s “slow and cumbersome” to use it to pay for goods and services and that the market is very volatile, adding: “So you could take a bitcoin to a store and one day, get a cup of coffee and another day, with the same bitcoin, be able to treat yourself to a lavish meal. So that doesn’t work well for the medium of exchange” According to him, BTC has become a speculative asset for people who hope it will appreciate in value, rather than because they want to use it as a payment mode.

The post Bitcoin isn’t as Anonymous as People Think it is: Cornell Economist appeared first on Cryptoknowmics-Crypto News and Media Platform.

Republished by Plato

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Eswar Prasad, an economist at Cornell University that says that Bitcoin isn’t as anonymous as people think it is. Other issues pointed out by him include Bitcoin mining being extremely bad for the environment, and that it doesn’t work well as a currency.

Cornell Economist Points Out more Flaws of Bitcoin Besides Not Being Anonymous

Leading cryptocurrency Bitcoin isn’t as anonymous as people think it is, according to a professor at Cornell University, Eswar Prasad, and formerly head of the International Monetary Fund’s China division.

In an interview with CNBC on June 17, Prasad has highlighted the flaws of the flagship cryptocurrency.

READ  Retail Investors on Reddit are Shifting from Equities to Cryptocurrencies

Firstly, he highlights that Bitcoin mining is an energy-intensive process and that it harms the environment and that it’s “certainly not good for the environment”. On the counterpart, he does highlight that Ethereum requires less energy than the flagship digital asset, saying:

“That is going to be much less energy-intensive, and it could deliver a lot of the benefits that bitcoin was supposed to deliver. It could also make transactions much cheaper and quicker.”

Secondly, he points out that BTC isn’t as anonymous as people think it is:

“The main idea of bitcoin was to provide pseudonymity. But it turns out that if you use bitcoin a lot, and especially if you use Bitcoin to get any real goods and services, then it becomes possible eventually to link your address or your physical identity to your digital identity.”

READ  Binance All-Time High! EOS FOMO, BitTorrent and SkyCoin Surge, Harmony IEO – Crypto News

He reminds the U.S. government’s recent success in tracking and retrieving part of the Bitcoin ransom from the Colonial Pipeline ransomware attack has increased doubts about the security and non traceability of Bitcoin transactions.

Bitcoin is a “Slow and Cumbersome” Medium of Exchange

Lastly, he says that BTC doesn’t work well as a currency as it’s “slow and cumbersome” to use it to pay for goods and services and that the market is very volatile, adding:

“So you could take a bitcoin to a store and one day, get a cup of coffee and another day, with the same bitcoin, be able to treat yourself to a lavish meal. So that doesn’t work well for the medium of exchange”

According to him, BTC has become a speculative asset for people who hope it will appreciate in value, rather than because they want to use it as a payment mode.

READ  Grayscale Bitcoin Trust Sees Rebound as Institutional Demand Increase

#Bitcoin #Cornell University #Eswar Prasad

Source: https://www.cryptoknowmics.com/news/bitcoin-isnt-as-anonymous-as-people-think-it-is-cornell-economist/

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