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What is DeFi Staking on Binance

Republished by Plato

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Binance is a powerhouse with upwards of 15 million users (up to three million active on the platform daily) and is responsible for around $40 billion in daily trade volume. 

Binance is regarded as one of the most powerful companies in the cryptocurrency industry, albeit a controversial past. As a centralized company with a semi-controversial past, Binance’s DeFi entrance was met with polarizing mixed opinions. 

Proponents welcomed Binance as an alternative to Ethereum’s exorbitant gas prices, which tickled upwards of $150 per transaction. 

Critics were put off by the fact that Binance’s “DeFi” play is still completely centralized, viewing the company’s corporate structure as a threat to the DeFi community’s decentralized ethos.

Pancake Swap

Pancake Swap, one of the products built in the Binance DeFi ecosystem.

Let’s explore both sides and how DeFi works on the Binance platform.

What is Binance DeFi?

The Binance Smart Chain is its own chain, and isn’t a layer 2 solution on top of the current Binance mainnet; it’s built to be a stand-alone product designed with the “financial freedom” ethos of DeFi, while positioning Binance, a centralized exchange, favorably in the growing DeFi ecosystem. 

Editor’s note: although Binance’s DeFi isn’t decentralized, we’ve continued to use “DeFi” when describing the suite of Binance products. Don’t get lost or riled up in the semantics.

The Binance Smart Chain itself is at least non-custodial, meaning that it doesn’t take custody of user assets. Binance DeFi hosts a suite of developer tools to encourage innovation for the sake of offering everyday users an approachable means to interact with a DeFi ecosystem. The Binance DeFi ecosystem comes with: 

  1. a Decentralized Exchange (DEX)
  2. an option to stake cryptocurrencies
  3. the ability to build dApps, similar to the Ethereum Virtual Machine.

The Binance Decentralized Exchange (DEX)

The availability of “reliable liquidity” is a significant issue plaguing decentralized exchanges. 

Slippage is another pesky DEX problem; it happens when traders are forced to settle for different prices due to market movements before settling the trade. It’s hard to justify using a DEX over a centralized exchange or prime brokerage when moving large amounts of tokens. 

The Binance DEX aims to help users transact large trading volumes at scale. The DEX can function as a fiat on or off-ramp, based on regulations in the user’s region. Users can also purchase cryptocurrency with Visa and Mastercard credit/debit cards.

The DEX allows users to represent Ethereum-based ERC20 tokens in the ecosystem via binding. Binding is the process that enables tokens to be traded cross-chain (i.e., between the Binance Smart Chain or another blockchain.) Binded tokens can be represented on the BSC. 

Binding requires interacting with Binance’s TokenManager contract. The owner of the BEP20 token address must:

  1. Use something like MyEtherWallet to call the approval of the token to the TokenManager contract. 
  2. Then, in myetherwallet, call approveBind in the TokenManager contract to approve the bind request from the BEP20 owner address. 
  3. Approve the bind on the Binance Chain.  

Crosschain interoperability locks value in a smart contract and then represents it as a token on the other chain, and scarcity is maintained. 

Tokens from ETH are locked via smart contracts to the BSC.

Staking on the Binance Smart Chain

Blocks are produced by validators on the BSC. 

Validators are the people who have paid the cost for software and hardware to run a node and become a validator– the costs include a minimum of 10,000 BNB for self staking and a PC with the following minimum specs- a CPU with 8 cores and 16GB of RAM 500 SSD storage.

Delegators are users who stake meaningful amounts of BNB; they decide on the current rotation of validators. Users can automatically stake their BNB just by holding BNB tokens on the Binance exchange on the main Binance Chain. To participate in the DeFi version, a delegator must choose a validator from the list of available validators on the website to earn rewards from the system.

Binance validators, courtesy of https://bscscan.com/validators

Binance validators, courtesy of https://bscscan.com/validators

With the BSC’s Proof of Staked Authority (PoSA) system, validators and block producers have an equal opportunity to earn fees. This happens because validators are rotated and the system that determines the rotation is driven by the delegators who vote with their BNB coin allocation. 

Therefore, validators must attract delegators to choose to stake their BNB with them. 

Fees are issued to validators who in turn give a percentage to the delegators. When chosen, the stake is locked for 7 days. In theory, if a validator is too greedy and does not distribute enough fees, they would be voted out based on the loss of staking value. A gain or loss of stake is generally what the BSC uses as a measurement of trust. 

So, a validator must attract and keep the delegator’s vote by preventing slashing events and distributing enough fees to make staking attractive. 

The distribution of staking rewards is delayed by two days and delegators receive their funds first, with the remains being transferred to the validators. As such, validators are incentivized to perform their job honestly without the need for manual enforcement by a central entity.

Binance staking rewards are distributed on the BC every day at approximately UTC 00:00.

Building a dApp on the Binance Smart Chain

In traditional finance, institutions develop permissioned tools to operate in the market, and access is usually limited to company employees. 

Users in the cryptocurrency industry want total, or at least a majority, of control over the tools used to access the market. 

There are over a hundred decentralized apps (dApps) on the Binance Smart Chain. Developers can build their own tools to interact with the BSC, determining their own rules for how users interact with markets. 

Currently, over 180 projects are hosted on the chain as Dapps. There are no forms of support available for listed projects. Therefore, do your own research before locking any tokens on the platform. 

Top dApps on Binance (courtesy of Dappradar)

Top dApps on Binance (courtesy of Dappradar)

The BNB Token’s Role in DeFi

Despite the growth of the Binance ecosystem, 

The BNB token is deflationary–only 200M BNB has ever been made, and burnings of the token happen regularly. 

Logically, due to the lack of inflation, the price of the BNB token will likely increase as the BNB is used, locked, burnt, or otherwise consumed. 

Final Thoughts: Is Binance DeFi Legit? 

The DeFi community at large seems to be very protective of the DeFi narrative.

Open-source software allowed major systems to become interoperable and compatible. As shown in software development, when there is open software, systems are easily integrated and players can communicate openly. 

Innovation is therefore a by-product of an environment that encourages freedom, rather than restricting it. 

As the DeFi ecosystem evolves, projects like BSC and ETH will likely become more compatible, making the tools more accessible for everyone. 

DeFi still seems to be far from reaching a mainstream base of users. However, the pace of innovation may produce a much more user-friendly DeFi product in the future. When the retail public finally interacts with DeFi, they may not even know they’re using a blockchain-based platform. 

The blockchain allows for decentralized money native to the Internet, which can be programmed to represent anything a user wants, whether that be a house or an NFT of a cat. Imagine being able to take out a loan with a CryptoKitty as collateral.

DeFi gives blockchain innovation a palpable focus. 

Binance’s DeFi play is notable because it brings the advantages of a centralized platform to innovate in a decentralized ecosystem; it has the resources, coordinated focus, and an internal united army of developers to accomplish its goals. 

However, the stigma associated with its centralization has strengthened Ethereum maximalists’ conviction, as well as encouraging innovation in other DeFi ecosystems.

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://coincentral.com/binance-defi-staking/

Blockchain

Grayscale Adds $1 Billion in Bitcoin, Nears $50 Billion in Total AUM

Republished by Plato

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Investment giant Grayscale recently added another $1 billion worth of Bitcoin in almost 24 hours. Now, the firm nears the $50 billion mark with $46.1 billion in total assets under management (AUM)

AUM Growing

As reported by CryptoPotato recently, the investment firm increased its total AUM by more than $3 billion, shortly after expanding its crypto-trust offerings by adding five new tokens for their eligible accredited investors. 

The Grayscale Bitcoin Trust (GBTC) accounts for $38.1 billion (82.64%) of Grayscale’s total AUM, while the Ethereum Trust (ETHE) accounts for $6.6 billion (14.26%). The remaining trusts, including Bitcoin Cash and Litecoin, account for the rest.

Notably, tokens such as Filecoin, Livepeer, Basic Attention token, MANA, and LINK saw a surge in price after Grayscale announced adding them into the list of offered trusts. The company expanded its total number of trusts to 14 after CEO Michael Sonnenshein explained they see many clients seeking exposure to more crypto assets.


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Grayscale Confirms Its Intentions to Launch a BTC ETF

Grayscale has confirmed its plans to convert its most popular investment product, the GBTC, into a Bitcoin Exchange-traded fund —after posting several ETF-related job positions on its careers page. Although, the firm does not consider that the current regulation weather in the United States is suitable for such a fund.

Unlike other investment giants that have filed for an ETF using S-1 forms, Grayscale will remain committed to converting GBTC into an ETF as the US’s regulatory environment gets clearer.

Founded in 2013, Grayscale has become the most prominent digital asset manager for accredited investors seeking exposure to bitcoin and other crypto assets. The institutional demand for BTC accelerated at the beginning of this year, according to Sonnenshein, adding that demand is nowhere near decreasing.

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Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://cryptopotato.com/grayscale-adds-1-billion-in-bitcoin-nears-50-billion-in-total-aum/

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Blockchain

Why ADA could run hotter than Bitcoin and make 10x gains

Republished by Plato

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After breaking in the crypto top 10 by market cap and with 3.597% gains over the past year, Cardano (ADA) seems to be laying low. At the time of writing, ADA trades at $1,24 with 1.7% profits in the daily chart and 6.4% in the weekly chart.

Cardano ADA ADAUSDT
ADA moving sideways in the 24-hour chart. Source: ADAUSDT Tradingview

Cardano’s native token and its platform are moving towards a major milestone. Targeting a Q3 entry into DeFi with Hard Fork Combinator Alonzo.

Bullish investors are betting on ADA’s further appreciation. Analyst Justin Bennett claims this token next rally will happen by the end of April. Around this time IOG should be stress-testing its smart contracts platform, Plutus.

A day ago, Bennet said to be building a “sizeable” ADA position and set support at $1.10 to $1.30. Over the next month’s, according to the analyst, ADA could go as high as $10.

On the Cardano’s native token recent price action, the analyst said it moving sideways is an indication of a “fair game”, a sign that ADA’s price is not overvalued. Bennet added:

ADA moving sideways for 6 weeks tells me the market doesn’t believe it’s overvalued at all. I don’t buy markets that are going vertical. I buy markets that went vertical recently and have since gone sideways for over a month. That’s a recipe for the next leg higher.

By the end of the month, ADA could target $2, as indicated by the chart below, and then could go for a higher price at $3 in the coming months.

Cardano ADA ADAUSDT
Source: Justin Bennett

In the 2017 bull run, ADA peaked at $1,18 therefore Bennet claims it could a 10x from its current price. Comparing ADA to Bitcoin, the analyst said the latter has “never done less than” a 10x profit in a bullish cycle. He added:

We know alts run hotter than Bitcoin. Translation: $10 $ADA is conservative, and $20 – $30 wouldn’t surprise me.

Smart contracts capabilities closing in on Cardano

Cardano’s next protocol upgrade is set to make it “the leading smart contract platform”, according to Olga Hryniuk from IOG. Outlining Alonzon’s roadmap and launch, Hryniuk wrote:

Throughout March and April, the IO Global team has been gradually combining the Alonzo rules with the Cardano node and ledger code (…). We expect the Alonzo upgrade (hard fork) to happen in late summer, and we will announce a firm date in April’s Cardano360 show.

In the crypto space, many believe Ethereum’s high fees are pushing users towards cheaper options. Cardano’s platform promises this with higher security for its smart contracts and EVM compatibility.

If Ethereum’s competitors, like Binance » Read more

” href=”https://www.newsbtc.com/dictionary/coin/” data-wpel-link=”internal”>Coin (BNB), performance is any indication of where ADA could go, then investors should pay attention to BNB’s rally.

With a 70.6% increase in just one month, BNB seems pegged to smash all resistance and keep scoring all-time highs. It remains to be seen if ADA will follow and take a place amongst DeFi giants.

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://www.newsbtc.com/news/why-ada-could-run-hotter-than-bitcoin-and-make-a-10x-gains/

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Blockchain

Litecoin Price Analysis: 11 April

Republished by Plato

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The Litecoin market has been seeing significant growth in price since the beginning of the year. At the time of writing, LTC was returning 93% year-to-date to its investors.

LTC was being traded at $257.39 with a market capitalization of $17.22 billion. The digital asset just saw a bullish breakout, however, will it be able to maintain this high value going forward in the market?

Litecoin 1-day chart

Source: LTCUSD on TradingView

The Litecoin price was building higher within an ascending channel and witnessed a strong surge as the price broke out of the channel. LTC saw the price surge from $163 to $258 within 16 days and turned the prevalent bearishness into a bullish market.

However, LTC has been closely trading to the resistance at $258 and if it rejects this price level, the value may trade lower.

Reasoning

The surge in the value of the digital asset has resulted in increased volatility in the market. The divergence of Bollinger Bands has been an indicator of the rise in volatility, while, the signal line moved under the candlesticks. The signal line will be acting as a support if the price pushes lower.

Meanwhile, the relative strength index was noting that the digital asset was close to becoming overbought as its value hit 68. The market has been witnessing selling pressure evolve at this stage and if it escalates, the RSI will be pushed towards the equilibrium zone.

While the market switches trends, the momentum has remained high owing to the recent surge. The bullish momentum could help the asset to maintain its high value, but the rise in selling pressure could result in a correction.

Crucial level

Entry-level: $240.99
Take Profit: $191.84
Stop-level: $268.88
Risk to Reward: 1.76

Conclusion

The current Litecoin market has been fairly bullish. However, a rising sell-off could push the price of the digital asset lower under $200. With 50 moving average and the signal line extending support close to $200, the price may not drop beyond this point.


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Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://ambcrypto.com/litecoin-price-analysis-11-april

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