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The Ethereum network is being turbocharged by layer-two solutions

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The number of decentralized exchanges running layer-two solutions is growing as the Ethereum network struggles to keep up with its own popularity.

As excessive Ethereum gas prices continue to hamper smaller transactions and operations on the network, the number of faster and cheaper options continues to expand as layer-two adoption increases. Layer-two solutions have the potential to process thousands of transactions per second, rather than the handful processed on layer-one.

The LeverJ decentralized exchange has seen a surge in trading volumes since it launched perpetual contracts four weeks ago. Around $75 million has been traded across 26,600 transactions, costing just under $600 in total gas fees. Industry observer ‘DeFi Dad’ commented;

“Only in DeFi 2021 could you miss these monster numbers trading on an Ethereum DEX—built on L2“

Although these figures may seem small compared to DeFi giants such as Uniswap, they represent a surge in layer-two adoption at a time when the technology is most needed. Essentially, layer-two scaling involves taking work off the root chain in order to process data and transactions faster and more cost effectively.

DeFi protocol Synthetix is also poised to launch its Optimism layer-two staking upgrade called Castor later today,  Jan. 14, at 23:00 UTC.

Castor is the result of four months of testing which began in late September by offering incentives in its native SNX token to participants of the testnet.

The DeFi protocol, which offers synthetic assets tracking the value of real-world assets, is migrating to a new SNX escrow contract that supports L2. The upgrade also includes two smart contracts enabling deposits on layer-one and withdrawals on layer-two using optimistic rollups.

The developers expect that putting staking on layer-two will improve the user experience with faster transaction processing and cheaper gas costs. With its complicated smart contracts, minting, staking and claiming weekly rewards has sometimes cost more than $100 per transaction, which will now be a thing of the past.

According to the Synthetix dashboard, market capitalization has reached $3.2 billion while SNX prices have surged 26% over the past seven days to reach an all-time high of $16.

Decentralized exchange Loopring is also gaining traction with new updates and layer-two liquidity mining incentives for its native token, LRC.

Its latest feature is the ability to send from a Loopring L2 account to any Ethereum based L1 account without the recipient ever needing to be on L2.

“This means you can send a fast, cheap (gas-free) payment on L2 to your friend that has never even heard of L2, all you need is their Ethereum address (or ENS name),”

The number of layer-two based networks and exchanges are increasing but the big question remains when will the most popular DEX, Uniswap, launch its L2 upgrade?

Average Ethereum transaction prices have retreated a little from their record high of more than $16 on January 11, but they are still economically unviable for many users at over $5 according to bitinfocharts.com.

Source: https://cointelegraph.com/news/the-ethereum-network-is-being-turbocharged-by-layer-two-solutions

Blockchain

Bank of Korea Head Says Cryptocurrencies Have No Intrinsic Value

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The head of the Bank of Korea, Lee Ju-yeol, said that Bitcoin and other major cryptocurrencies lack intrinsic value. However, he believes that all assets will continue to experience significant price fluctuations.

Price Surge Because of Pro-BTC Institutional Investors?

The chief of the Bank of Korea said cryptocurrencies, including Bitcoin, do not possess inherent value. In a recent news report, Lee Ju-yeol blasted the highly volatile nature of the digital asset industry.

“There is no intrinsic value in crypto assets,” said BOK Gov. Lee Ju-yeol at a parliamentary session on 23 February.

The news report quoted lawmakers asking BOK’s chief if the recent surge in the price of BTC is temporary or not.

“It is very difficult to predict the price, but its price will be extremely volatile,” Ju-yeol added.

The bank executive has also said that the recent rally in Bitcoin’s price followed by other significant digital assets may be led by multiple factors. Among them, Elon Musk’s Tesla – investing $1.5 billion. He highlighted that the latest price surge might be a continuation of institutional investors using Bitcoin as a hedge.

Ju-yeol also emphasized that BOK shouldn’t buy bonds issued by the country’s government directly. Otherwise, this would raise worries about fiscal stability and undermine the central bank’s trust. 

Bitcoin Volatility Bringing Some More Hard Times For Investors?

The primary cryptocurrency’s volatility has been causing quite some troubles for both retail and institutional investors. This particular character of the digital assets has been a stumbling point for many, thus, causing some hesitations in whether to allocate funds in it or not.

BTC’s price managed to initiate another notable surge during the last couple of months, marking a consequent all-time high. Just a few days ago, it skyrocketed above $58,000, dragging other altcoins like Ethereum behind it for a while.

However, almost immediately after its upgrowth, BTC suffered a significant correction, settling unsteadily around $50K as per the time of the writing. As a result, the cryptocurrency market capitalization lost more than $300 billion in two days.

Interestingly, JPMorgan strategists said recently that Bitcoin’s illiquidity could bring more problems. Analysts from the US multinational banking institution argued that BTC is in a liquidity shortage, warning investors that the primary crypto-asset could suffer another price drop.

Featured Image Courtesy of WSJ. 

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Source: https://cryptopotato.com/bank-of-korea-head-says-cryptocurrencies-have-no-intrinsic-value/

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Cross-chain bridges and DeFi integration are pushing these 3 altcoins higher

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The cryptocurrency market is showing signs of progress following a multiday sell-off that saw the total market capitalization drop by more than $400 billion as Bitcoin’s (BTC) price briefly fell below $46,000. 

While the majority of altcoins have entered a consolidation phase that includes a retest of underlying support levels, several projects have started to regain lost ground after new developments reignited investors’ optimism.

ADA/USDT

Cardano’s ADA started the year with a bullish spark that saw its price increase 624% from $0.165 on Jan. 2 to a high of $1.20 on Feb. 20. This week’s sharp correction pulled the price to a swing low at $0.80, but it is clear that traders bought the dip.

ADA/USDT 4-hour chart. Source: TradingView

Since hitting a swing low at $0.80, ADA’s price rallied 30% to $1.05 following the news that community members at Venus Protocol had approved a proposal to bring ADA to the Venus mainnet. 

VORTECS™ data from Cointelegraph Markets Pro began to detect a bullish outlook for ADA on Feb. 14, 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.

Cointelegraph Markets Pro – VORTECS™ Score (green) vs. ADA price

As the chart above shows, Binance introduced staking on Feb 10., and the VORTECS™ score for ADA rose to a high at 88 on Feb. 14

MATIC/USDT

On Feb. 9 the Matic network rebranded to become “Polygon” as part of a strategic change to become a layer-two aggregator. The move was done in response to the growing momentum of Polkadot and a desire to build an interoperability protocol on top of Ethereum.

High gas fees on the Ethereum network have increased the need for layer-two solutions, and Polygon has emerged as one of the top solutions with projects like Aavegochi and Golem already operating on the protocol.

The rebrand helped lift the price of MATIC from $0.07 on Feb. 9 to an all-time high of $0.197 on Feb. 20 before the market downturn pushed it back down to $0.111 on Feb. 23.

MATIC/USDT 4-hour chart. Source: TradingView

Since that time the MATIC has recovered 62% to trade at $0.16 as the community and total value locked on Polygon continue to grow.

STX/USDT

Stacks (STX) was the breakout star on Feb. 24 as the layer-one blockchain solution designed to bring smart contracts and decentralized applications to Bitcoin saw a record $166 million in trading volume that elevated STX to a new all-time high of $1.17.

STX/USDT 4-hour chart. Source: TradingView

Excitement for the project comes after the Feb. 23 announcement that STX holders can now participate in delegated staking from the Stacks wallet, allowing them to earn BTC rewards.

According to data from Cointelegraph Markets Pro, market conditions for STX have been favorable for some time.

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

As seen in the chart above, the VORTECS™ score for STX hit a high of 87 on Feb. 23, around 30 hours before the price increased 75% to its new high of $1.17.

Interoperability, cross-bridge solutions and staking have emerged as drivers of growth that help incentivize investors to hold their tokens and also attract new participants to old and new blockchain projects.

Following the recent market downturn, it’s clear that projects that offer tokenholders multiple ways to earn a yield and operate across separate blockchain networks are beginning to stand out from the rest of the field.

Source: https://cointelegraph.com/news/cross-chain-bridges-and-defi-integration-are-pushing-these-3-altcoins-higher

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Former London Stock Exchange Group CEO Urges UK Government to Explore Cryptocurrencies

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The former CEO of the London Stock Exchange Group, Xavier Rolet, has advised the UK government to look into cryptocurrencies and SPACs to minimize the adverse impact of Brexit. In a recent report, Rolet claimed that the UK has trailed behind other countries in both aspects.

The UK Should Turn To Crypto And SPACs?

Born in France, Rolet is a businessman and the Chief Executive Officer of the London-based credit-focused asset management firm CQS. Before assuming this position, though, he served as the CEO of the London Stock Exchange Group and was named as one of the 100 best CEOs in the world in 2017 by the Harvard Business Review.

In a report cited by Bloomberg, Rolet touched upon the potential consequences to the UK economy following the withdrawal from the European Union and the European Atomic Energy Community, better known as Brexit.

The executive believes that the UK has two viable options to consider if it wants to minimize the risks and help the nation flourish.

In the first one, he urged the government to “promptly consider the SPAC revolution.” Also referred to as “blank check companies,” these special purpose acquisition companies (SPAC) operate as shell corporations listed on a stock exchange with the idea of buying out a private company, thus making it public. Ultimately, this strategy eliminates the need to go through a traditional initial public offering (IPO).

While the US has seen significant adoption in the past year with a 10x increase in the raised funds compared to 2019’s results, the UK regulators have halted their progress on the London markets.

Rolet’s second advice involved digital assets as he noted that “all relevant UK government agencies should be resourced to thoroughly understand cryptocurrencies.”

With proper regulations, the crypto ecosystem could “place London and the UK at the center of a reputable and safe financial market.”

The UK’s Regulatory Approach To Cryptocurrencies

While UK’s regulators have hindered SPACs’ progress within the country, the nation’s financial watchdog, the FCA, has also been rather harsh against the cryptocurrency industry.

As of the start of this year, the Financial Conduct Authority banned crypto derivatives and exchange-traded notes (ETNs) to retail customers.

Additionally, the watchdog has issued several warnings to investors that they could lose all their funds if allocated in digital assets.

The regulator also announced that all UK-based digital asset businesses need to be registered with it but extended the deadline for applications to July 9th, 2021.

Featured Image Courtesy of TheGuardian

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Source: https://cryptopotato.com/former-london-stock-exchange-group-ceo-urges-uk-government-to-explore-cryptocurrencies/

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