Boxmining v2

Author: benson

  • THORChain ($RUNE) information and guide

    THORChain ($RUNE) information and guide

    Among the growing list of emerging decentralized exchanges lies THORChain and their RUNE token. The Company is one of many decentralized finance (DeFi) options in a field that is creating much buzz within the industry. The decentralised liquidity network, whose successful seed funding was completed last year, is one that should not be missed by those who are looking into this field. After a successful mainnet launch, the cross blockchain answer to Uniswap was made official in the first part of this year. As such we have compiled a complete guide to EVERYTHING you wanted to know about THORChain, answering questions like ‘What is THORchain?’, ‘Who Uses THORChain’ and other important topics.

    What is THORChain? 

    First imagined in 2018, THORChain offers a wide range of services on its decentralized permissionless network. It allows for swapping of assets like Bitcoin and Ethereum as well as providing continuous liquidity pools for users. The platform uses a cross chain and can be used on any blockchain/with any asset, unlike other decentralized exchanges. 

    Their development paper outlines the core conception of THORChain, saying: “THORChain is a liquidity protocol designed to connect all blockchain assets in a marketplace of liquidity through cross-chain bridges and continuous liquidity pools secured by economically incentivised validators.” 

    THORChain’s consensus is Proof-of-Stake and built on Tendermint, with network validators required to bond (lock up) their native token, $RUNE. Validators are punished for bad behaviour by having their stake slashed, which in turn disincentivises such actions.The network’s data is calculated and overseen using Midguard API service and is secured and bonded by ThornNode, which also powers the network. The nodes make vaults and validate the transactions on the site.

    Who uses THORChain?

    Users

    These are the main participants and they usually use the cross chain services between the pools with them paying a slip fee. The fee is paid due to gas fees on external services and for fast execution. However, swapping is non custodial and unrestricted on different chains. 

    Liquidity providers

    These are secondary participants who add liquidity to the various pools which is then bound with RUNE in a separate vault. Using the continuous liquidity pool means the network does not need oracles or have a price feed. Liquidity rewards are earned through fees generated from pools and are paid out when users withdraw. As the THORChain website explained, “liquidity is provided by stakers who earn fees on swaps, turning their unproductive assets into productive assets in a non-custodial manner. Market prices are maintained through the ratio of assets in pools which can be arbitraged by traders to restore correct market prices.”

    Nodes explained

    Nodes are the basis for THORChain’s services. They have three main functions, these are: to Bond RUNE, create vaults (which are like wallets) and witness transactions/produce blocks. They are all run by node administrators who are also rewarded for their work through bond rewards. For a full breakdown of node operators, please click here.

    In terms of THORChain, as previously mentioned, nodes earn two-thirds of the System Income and they make vaults and validate the transactions on the site. Nodes are anonymous, with plausible deniability on all transactions. The nodes are created every three days and compete to enter with bonded capital. The oldest nodes are churned out and replaced when necessary. This allows the nodes to stay fresh and keeps the network constantly updating itself.

    RUNE token: what is it?

    Another integral part of the system and the nodes that run it is THORChain’s native token, RUNE. Available through Binance Chain, the token is a BEP2 token.The RUNE token is used in all liquidity pools and is bonded by nodes. All RUNE tokens are at a 1:1 ratio to asset value and this allows for pools to be linked. RUNE is also the rewards for pools, with the equivalent of 1/3rd of the System Income providing continuous liquidity incentives. 

    Alongside providing on chain liquidity, RUNE is also an important part of the THORChain security. This is because it protects against malicious actors by offering them a larger benefit for liquidating then they would receive from corrupting the system, as nodes earn 2/3rds of the System Income. Thus all transactions using RUNE on the system have double the amount at a 67% to 33% ratio. The other third is for liquidity providers. Not only that, but in terms of security nodes are also closed when malicious activity is detected. 

    RUNE has a total supply of 500 million tokens. Of which 100 million will be sold to the public in 3 stages, 150 million has already been allocated throughout the team, community and operational reserves, and the remaining 220 million is saved for the emissions reserve. 

    How to earn RUNE?

    RuneVault: Liquidators and users of RUNE can have access to the RUNEVault feature which allows you to store and stake the token, with returns on investment. Using a Binance Chain Feature, users can “freeze” their tokens even if they have staked them meaning that the currency is always in the wallet. Earnings are based on weekly RUNE staked, but this weekly taking is reset should you withdraw any amount. 

    Rewards

    THORChain offers rewards for all participants on the network. The rewards are paid out through the distribution of system income. This is worked out by Swap fees plus Block rewards. Swap fees are paid by users when swapping assets and Block rewards are worked out on an emission schedule. As mentioned previously, the system income is paid 67% to the nodes and 33% to the liquidator. However, this ratio is officially worked out by the incentive pendulum. 

    Governance on THORChain

    THORChain attempts to have a minimal governance model. Instead staked capital is the main driver of the market and developers respond accordingly. New assets are easily listed and this means there are rarely many governmental decisions to undertake and it is truly decentralized in many ways. 

    Who is the team behind THORChain?

    The team behind THORChain is purposefully pseudoanonymous. According to their website, “figureheads, personalities and founders undermine a project’s ability to decentralise,” and that, “transparency is demonstrated in other facets (treasury, code, research)”. That being said, there are 10 employees listed on LinkedIn and 12 team members listed with 6 additional advisors on ICOBench. 

    What sets THORChain apart? What are its benefits?

    THORChain takes a little while to understand the basics and the nodes that run the network. However, once you get the hang of the exchange then THORChain has a number of benefits. 

    The main benefit is that with their cross chain feature, any asset can be swapped and a pool created around it. That gives users a huge amount of variety and does not hem them in unlike other decentralized exchange options do. This opens a whole new world of possibilities for DeFi users and one that should be applauded. 

    Conclusion

    For those who are fans of Uniswap, then this decentralized option could be a great alternative. Yet, as Balancer has shown with their recent security scare, the often precarious nature of DeFi security does cause concern. Perhaps though, THORChain with their incentivized payments negates this risk. However, until more is known about the site and they are around for longer it will be hard to make a final judgement. 

    Decentralised Finance (DeFi) series: tutorials, guides and more

    With content for both beginners and more advanced users, check out our YouTube DeFi series containing tutorials on the ESSENTIAL TOOLS you need for trading in the DeFi space e.g. MetaMask and Uniswap. As well as a deep dive into popular DeFi topics such as decentralized exchanges, borrowing-lending platforms and NFT marketplaces

    The DeFi series on this website also covers topics not explored on YouTube. For an introduction on what is DeFi, check out Decentralized Finance (DeFi) Overview: A guide to the HOTTEST trend in cryptocurrency

    Tutorials and guides for the ESSENTIAL DEFI TOOLS:

    More videos and articles are coming soon as part of our DeFi series, so be sure to SUBSCRIBE to our Youtube channel so you can be notified as soon as they come out!

    Disclaimer: Cryptocurrency trading involves significant risks and may result in the loss of your capital. You should carefully consider whether trading cryptocurrencies is right for you in light of your financial condition and ability to bear financial risks. Cryptocurrency prices are highly volatile and can fluctuate widely in a short period of time. As such, trading cryptocurrencies may not be suitable for everyone. Additionally, storing cryptocurrencies on a centralized exchange carries inherent risks, including the potential for loss due to hacking, exchange collapse, or other security breaches. We strongly advise that you seek independent professional advice before engaging in any cryptocurrency trading activities and carefully consider the security measures in place when choosing or storing your cryptocurrencies on a cryptocurrency exchange.

  • China’s Cosmos and ChainLink Plan

    China’s Cosmos and ChainLink Plan

    China has asked for guidance from the teams behind Cosmos and ChainLink for their Blockchain Service Network (BSN), it was revealed last month. Researchers have called upon both companies to aid their development of the BSN, which was launched alongside their Digital Currency Electronic Payment (DCEP) in April 2020, to help them build out a “service hub” which would form the bedrock of its “internet of blockchains.”

    Learn more about ChainLink ($LINK).

    SmartContract and Iris Foundation join BSN Development

    According to reports, SmartContract, the group behind the Chainlink oracle network, will aid the BSN team in the sourcing of reliable information. Their Dapp services, potentially on Hyperledger, could allow for a cohesive and more streamline to access information. 

    Yifan He, BSN expert and CEO of Beijing Red Date Technology, spoke on the ChainLink addition, saying the partnership between the two, will give access to outside data from many Chinese companies, such as financial transaction information from China Union Pay, something difficult to obtain and analyze in the first place. This would then allow for BSN users to access “outside data such as stock prices and financial transactions.”

    On the other hand, Iris Foundation Ltd., the company who uses the Cosmos network to integrate businesses using interchain services, will work on interoperability for the network. He described their addition as allowing for “cross-chain services between blockchains adapted in the network.”

    Both companies appear to know what the State Information Center and China Mobile/China Union Pay backed BSN needs in their attempts to create a worldwide blockchain infrastructure. 

    And it seems they have a good chance of pulling it off as the government backing allows greater alliances and interconnectivity between the important players. One of these players and a team that looks integral to the future research is ChainLink. 

    ChainLink suits BSN

    The chance to be part of a huge project was something ChainLink’s co founder and SmartContract CEO Sergey Nazarov, couldn’t miss. Explaining how the BSN might use his company, the co-founder said: “Chainlink provides the blockchain abstraction layer or secure blockchain middleware that enable dapp developers to create universally connected smart contracts.” 

    Google, through its Google Cloud uses ChainLink for a similar function as he BSN, Nazarov explained. “What BSN really cares about, much like the people we’ve worked with from Google, is this type of contract that allows blockchains to access external off-chain data,” Nazarov stated. 

    The need is made even greater as blockchain can’t be directly applied to application programming interfaces (APIs) and only universally connected smart contracts can create the connection and allow for off chain data. 

    This use case is especially needed, Nazarov claimed, for global financial product or insurance, as the contracts must have external data and ensure goods and services are delivered, which needs the universally connected contracts.

    The usage of ChainLink and their services are set to continue as Nazarov told CoinDesk, “Chainlink’s technology suits BSN’s vision because the network includes multiple chains that are also supported by (his) team.”

    BSN starts to build for future

    Since its launch in April, the BSN has been announcing a number of partnerships with experts in the blockchain field. For example, around the initial launch the research team confirmed the plans to adapt Ethereum and EOS public blockchains into the BSN system.

    A target area has been cross chain services with Polkadot one of a number of companies earmarked for positions on the interchain service. “We plan to have at least four different interchain service technical frameworks developers can choose from in the hub,” He said. 

    “The interchain service hub is one of the three critical parts for the national blockchain infrastructure”, He continued adding that enterprise and public blockchains into the network were the other key fields. 

    Despite not being finalised, the network is already proving popular. ”We have been on-boarding two to three public chains every month on average, while adapting consortium chains at a slower pace since it usually takes longer to integrate them with the network,” He claimed. 

    However, not all blockchain developers  are pleased with the creation of the network, with some developers worried about their data being stolen as well as other privacy concerns. The BSN looked to quell the fears in their recent technical white paper, but there is cause for concern considering the nations stringent Internet laws. 

    Decentralised Finance (DeFi) series: tutorials, guides and more

    With content for both beginners and more advanced users, check out our YouTube DeFi series containing tutorials on the ESSENTIAL TOOLS you need for trading in the DeFi space e.g. MetaMask and Uniswap. As well as a deep dive into popular DeFi topics such as decentralized exchanges, borrowing-lending platforms and NFT marketplaces

    The DeFi series on this website also covers topics not explored on YouTube. For an introduction on what is DeFi, check out Decentralized Finance (DeFi) Overview: A guide to the HOTTEST trend in cryptocurrency

    Tutorials and guides for the ESSENTIAL DEFI TOOLS:

    More videos and articles are coming soon as part of our DeFi series, so be sure to SUBSCRIBE to our Youtube channel so you can be notified as soon as they come out!

    Disclaimer: Cryptocurrency trading involves significant risks and may result in the loss of your capital. You should carefully consider whether trading cryptocurrencies is right for you in light of your financial condition and ability to bear financial risks. Cryptocurrency prices are highly volatile and can fluctuate widely in a short period of time. As such, trading cryptocurrencies may not be suitable for everyone. Additionally, storing cryptocurrencies on a centralized exchange carries inherent risks, including the potential for loss due to hacking, exchange collapse, or other security breaches. We strongly advise that you seek independent professional advice before engaging in any cryptocurrency trading activities and carefully consider the security measures in place when choosing or storing your cryptocurrencies on a cryptocurrency exchange.

  • China escalates challenge to US Dollar with East Asian Digital Currency

    China escalates challenge to US Dollar with East Asian Digital Currency

    China is proposing a plan to create a digital currency for the East Asian region in an attempt to carve out a world away from dominance by the US Dollar.

    A report from Nikkei Asia this week unveiled this decision made by the Chinese People’s Political Consultative Conference (CPPCC), China’s political advisory body. The proposal from 10 of the CPPCC members was to create a digital currency that would be backed by a range of fiat currencies, such as the Chinese Yuan, Hong Kong Dollar, Japanese Yen and South Korean Won.

    The strongest currencies, the Yen and Yuan, are set to be the main backers but how this will be split will be determined by the strength of each currency at the time. Initial suggestions have said the Yuan will account for 60% and Yen, just 20%. It may appear from this move that China is seeking out allies in challenging the influence of the US and the US Dollar.

    This proposal sent waves through the CPPCC as the proposing members were high profile and influential figures such as the co-founder of Chinese travel services giant Ctrip, Neil Shen and Henry Tang, a Hong Kong politician and former Chief Secretary. Both suggested the currency should be made by a private company, rather than the central bank.

    CPPCC
    The 13th National Committee of the CPPCC opened on 21st May 2020. 

    Is the the East Asian digital currency a response to Facebook’s Libra LBR token?

    What exactly prompted the CPPCC members to come up with this plan is unknown but many believe it could be in response to recent news regarding Facebook and its Libra cryptocurrency project. 

    The Company had suggested that they will abandon their Libra token plans due to the similarities with the digital Dollar proposed by lawmakers. Instead, they will focus on a multi-currency coin called LBR. It is believed it could emerge as the digital currency of the West, leaving the East behind, as the Libra project has already abandoned plans for a Yen-pegged stablecoin.

    China building a world away from US Dollar dominance

    The benefits of an East Asian cryptocurrency are clear for Xi Jinping’s China. China, which has seen her economic and political ties with the US deteriorating under Donald Trump’s leadership is actively building a monetary system away from the reserve currency of the world, the US Dollar. 

    The dominance of the US Dollar has directly enabled the US’ control of global politics. With 70-80% of all worldwide trading being conducted in the Dollar, entire nation’s economies will suffer heavily should they fall on the wrong side of the US’ favour, such as Iran.

    China, who has a history of facing the brunt of US sanctions in the past is potentially in the line of fire to be hit by even more sanctions soon. Following the Hong Kong National security law proposal last month, US lawmakers have moved quickly to outlaw it with the threat of sanctions held over China’s heads should they enforce the controversial law. 

    The threat of sanctions from the US should not be taken lightly either. Just ask Meng Wanzhou, Huawei’s Chief Financial Officer who has been under house arrest in Canada for the past 1.5 years for allegedly trading with sanction hit Iran. 

    Seeing this problem, China has been slowly looking to build a system away from the US. This tactic was evident when eight-member countries of the Shanghai Cooperation Organization, including China, India, Russia, Pakistan, Kyrgyzstan, Russia, Tajikistan and Uzbekistan, who all decided to trade in local/national currencies instead of the US Dollar at a meeting on March 18th 2020. 

    However, the shift towards digital currencies is clearly on China’s priority list. China, much like her allies Iran and Venezuela are seeing digital currencies as the future of finance and have attempted to be the leading light in this field. 

    This was clearly evident with the acceleration of their Digital Currency Electronic Payment (DCEP) project. The currency, which will be tested in Shenzhen, Suzhou, Xiong’an and Chengdu, was created with a purpose of knocking out the US Dollar’s dominance.  

    How this proposed East Asian currency will fit in with DCEP is unclear, but reports have suggested that it too will be international in its outlook. Recent reports from South Korea has suggested that DCEP could be used by Chinese tourists in the nation, although with no official date for launching the Digital Yuan, how this will work is still up in the air. 

    What is clear however is that with DCEP and the East Asian Digital Currency, China is escalating her challenge of the US’ dominance through digital currencies whilst the US continues to be tangled up in regulatory issues.

    Further Reading

    China’s National Digital Currency DCEP / CBDC Overview

     

  • Coinbase Fees- How to avoid them

    Coinbase Fees- How to avoid them

    Coinbase, like most exchanges charges withdrawal fees. However there is a neat trick allows you to avoid withdrawal fees. Coinbase is the most popular cryptocurrency exchanges in the US and UK due to the ability to directly purchase cryptocurrencies with fiat, as well as being one of the few exchanges that allow US citizens to trade. Many not only use Coinbase to buy cryptocurrencies, but also to store their cryptocurrencies. So with frequent usage of the Exchange, withdrawal fees can certainly add up. (https://atelierdetroupe.com/) Here are some top tips and hacks to avoid or reduce Coinbase Fees.

    To find out more about the best Cryptocurrency Exchanges in our Guide.

    Reduce Coinbase Fees when sending Bitcoin

    Coinbase and Coinbase Pro (previously known as GDAX are two of the more popular platforms around the world where people can buy, sell, and trade cryptocurrencies. Coinbase and Coinbase Pro currently operate in the US, Europe, UK, Canada, Australia, and Singapore. Users can trade cryptocurrencies such as Bitcoin, Ethereum, and Litecoin.

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    Coinbase vs Coinbase Pro: What are the differences?

    Coinbase and Coinbase Pro are actually two separate but related products. Coinbase was launched first in 2012 and aimed to provide a user friendly platform for people with no experience to buy and sell bitcoin through bank transfers. In 2015, with the growing interest and popularity in cryptocurrencies, the Company expanded to create Coinbase Exchange- a US based Bitcoin exchange to allow for Bitcoin and cryptocurrency trading. Because Coinbase Exchange was beyond the original scope for their more “casual” users, they decided to rebrand it to GDAX – Global Digital Asset Exchange (which is now known as Coinbase Pro).

    GDAX and Coinbase compared
    GDAX and Coinbase compared

    Coinbase – a place where customers can buy, sell, send, receive and store your cryptocurrencies.

    Coinbase Pro (formerly GDAX or Coinbase Exchange) – an exchange for professional traders. Aside from having the same functions as Coinbase, Coinbase pro also allows users to do the following:

    • Trade between different cryptocurrencies;
    • place market, limit and stop orders; and
    • have more detailed trading charts to analyse short term trends (e.g. order book, volume etc).

    Most importantly, Coinbase Pro has lower fees and in some limited transactions, zero fees.

    What are the fees on Coinbase and Coinbase Pro?

    Coinbase buy/sell transaction fees

    Coinbase has the most expensive fees compared to other what we consider as Tier 1 Cryptocurrency Exchanges. Coinbase charges a 0.50% fee for cryptocurrency purchases and sales. On top of this, Coinbase also charges a Coinbase Fee. The Coinbase Fee is the greater of (1) a flat fee depending on order size; (2) a variable percentage depending on your region and payment type.

    Here are the flat fees charged by Coinbase:

    Total Transaction Amount Transaction Fee (USD, EUR, GBP)
    Less than $10 $0.99, €0,99, £0,99 
    More than $10, Less than $25 $1.49, €1,49, £1,49
    More than $25, Less than $50 $1.99, €1,99, £1,99
    More than $50, Less than $200 $2.99, €2,99, £2,99
    Flat fee

    Below is the variable percentage for users in the US. Check here for the variable percentages for other countries.

    US variable percentage
    US variable percentage

    Here’s an illustration of how to calculate your buy/sell transaction fee. For example, I’m in the United States and want to purchase USD $20 worth of Bitcoin using my debit card. My flat fee would be USD$1.49 because total transaction amount more than USD$10 but less than USD$25. Whilst the variable percentage would be 3.99% because I am paying with debit card. In this case, Coinbase would charge me USD1.49 because the flat fee is higher than the variable percentage.

    Coinbase crypto to crypto conversion fees

    For crypto to crypto conversions e.g. USDC to BTC, or BTC to ETH, Coinbase charges a spread margin of up to 2%. The exact margin would depend on the market fluctuations at the time.

    Coinbase Pro trading fees

    Coinbase Pro on the other hand operates on a maker-taker fee model. You would be considered a “taker” if you place an order at the market price, and this order is filled immediately. On the other hand, you are a “maker” if the order you placed is not immediately matched by an existing order. In the case where only part of your order is matched immediately, you would pay the taker fee for that portion only. You would then pay the maker fee for the remainder of the total order when it is matched.

    Coinbase Pro’s fees are charged as a percentage of the transaction in question. As to the percentage, it would depend on the total amount traded by users in 1 month as follows:

    Coinbase Pro trading fee
    Coinbase Pro trading fee

    Based on the above, for small volume users, e.g. those that trade less than USD$10,000 a month, their fees would be 0.50% of each transaction.

    Of course, one possible method to reduce trading fees is to work towards a higher tier by increasing your monthly trade volume. For example, if more than $10,000 USD is traded in a month, the Maker and Taker fees drop to 0.35%, this means 15% a reduction on trading fees.

    Coinbase hack: use Coinbase Pro (GDAX) to avoid withdrawal fees from Coinbase

    Coinbase withdrawal fees can be very high. When users withdraw their coins off the Coinbase platform, Coinbase will charge users a fee based on their estimation of the network transaction fees they anticipate they will pay. Coinbase has stated that in some circumstances, the fee that Coinbase pays may be different from the estimate. So there is a possibility that the estimated fee that users have to pay are HIGHER than the network transaction fee actually paid by Coinbase.

    However, there may be a way to avoid Coinbase withdrawal fees. According to Coinbase, they do not charge for transferring cryptocurrency from one Coinbase wallet to another. Since Coinbase and Coinbase Pro (GDAX) are owned by the same company, sending your funds from Coinbase to Coinbase Pro would be instant and free since it is a transfer from one Coinbase wallet to another.

    The key here is that Coinbase Pro does not charge any withdrawal fees. You can then send your cryptocurrencies from Coinbase Pro to any other wallet outside of the Coinbase platform without paying any network transfer fees.

    Withdraw in another cryptocurrency

    Bitcoin has the most expensive transfer fees on Coinbase. One way to reduce transfer fees is to exchange Bitcoin to another cryptocurrency such as Litecoin or Bitcoin Cash. These coins will be cheaper to transfer, and could be exchanged back to Bitcoin once the transfer is complete on the receiving exchange.

    Use another Exchange

    If Coinbase fees are too expensive for you, you can always use another exchange such as Binance or FTX Exchange. These exchanges offer more competitive withdraw rates and also have more types of cryptocurrency options. To find out more about the best Cryptocurrency Exchanges in our Guide.

    Is Coinbase expensive to use?

    Coinbase fees are in line with other cryptocurrency exchanges, with $2.99 being charged for transactions between $50-200 dollars. However for larger transactions, Coinbase charges a variable percentage fee of 1.49%. For anything over $10,000 USD, we recommend using Over The Counter (OTC) trading desks which are better at handling large volumes with more flexible rates. Here’s a list of the top 5 OTC desks.

    Further reading

    To learn more about Bitcoin, cryptocurrencies and how to get started, check out my course created in collaboration with Jeff Kirdeikis of Uptrennd- Bitcademy: Learn, Invest & Trade Bitcoin – In Under an Hour

    Disclaimer: Cryptocurrency trading involves significant risks and may result in the loss of your capital. You should carefully consider whether trading cryptocurrencies is right for you in light of your financial condition and ability to bear financial risks. Cryptocurrency prices are highly volatile and can fluctuate widely in a short period of time. As such, trading cryptocurrencies may not be suitable for everyone. Additionally, storing cryptocurrencies on a centralized exchange carries inherent risks, including the potential for loss due to hacking, exchange collapse, or other security breaches. We strongly advise that you seek independent professional advice before engaging in any cryptocurrency trading activities and carefully consider the security measures in place when choosing or storing your cryptocurrencies on a cryptocurrency exchange.

  • Cover Protocol ($COVER): peer-to-peer coverage market for DeFi

    Cover Protocol ($COVER): peer-to-peer coverage market for DeFi

    Cover Protocol ($COVER) is one of those projects that can really have a solid impact on the future of decentralised finance (DeFi). Why? Because users want to sleep well knowing that in case of exploits, they won’t lose their money. Trusting the protocols and the team behind them is not enough anymore.

    With the dawn of decentralized finance, more smart contract risks have arisen. Most contracts aren’t audited, and if they are, malicious actors are always on the lookout for a vulnerability in the code. As we have seen in 2020 nothing is really secure, whether it is a protocol built by one of the best developers in crypto space ($EMN) or the code has been audited. Anything can be exploited, and we need to remember it.

    Therefore, investors are cautious of interacting with DeFi protocols for fear of losing funds.


    What is Cover Protocol?

    Cover Protocol is a blockchain-based peer-to-peer coverage market for decentralized finance. The platform allows DeFi users to hedge against risks due to smart contracts’ fallacies (especially useful when farming or staking). Thanks to fungible cover tokens and letting the market itself set coverage prices, the protocol shifts from the need of relying on a bonding curve to determine the cost of being insured.

    Insurance guards against hacks and bug exploits that lead to loss of deposited assets. Notably, Cover doesn’t blindly allow DeFi protocols on their platform. It performs a thorough background check considering its security measures, total value locked and other features, all necessary to determine user risk levels.

    Background

    The project is led by a team with vast experience in blockchain programming and traditional finance. Among the team members we also find Andre Cronje as their advisor.

    Cronje is the founder of Yearn Finance, one of the most successful DeFi protocols. Other notable names associated with the project are PeckShield, Hacken, Farming Lord, and The Arcadia Group, all as CVC (more on them below).

    How does Cover help Defi users?

    Coverage protocols are the solution. These are platforms incentivizing DeFi users and developers to provide decentralized insurance. An excellent example of such a platform is Cover Protocol.

    Cover lets people buy “insurance” for products like Yearn Finance ($YFI) (Learn more about the yEarn Finance ecosystem) and other systems in the DeFi ecosystem. By ensuring systems and users, the protocol provides a critical missing link between DeFi and conventional finance.

    Here we examine how Cover handles insurance in a decentralized industry. In addition, we shall take a look at who’s eligible to use the platform.

    How are Fungible Cover Tokens used?

    Fungible Cover tokens are minted on the platform, when users interacts with the smart contract. Cover determines the protocols to be covered, type of collateral needed, amount of collateral, and insurance length.

    Diagram by Cover Protocol core dev, crypto_pumpkin
    Diagram by Cover Protocol core dev, crypto_pumpkin

    Once a deposit is made into the contract, two types of tokens can be created; CLAIM and NOCLAIM. For the moment, Cover only supports DAI as collateral and keeps a 1:1 ratio between collateral provided and the tokens.

    The two minted tokens work in opposite ways in the system. The CLAIM token enables its holder to receive a payout once a contention is approved. On the other hand, NOCLAIM enables holders to redeem the collateral when a filed petition fails to go through or the token expires after nothing notable has happened to that particular project within the expiration date.

    Each CLAIM-NOCLAIM tokens refer to only one project and provide unique info. Example of denomination (with $CURVE):

    COVER_{Protocol}_{Expiration Date}_{Collateral Currency}_{Nonce}_{Direction}

    Example tokens for a coverage on Curve (has no accepted claim) that expires 12/31/2020:

    Symbol for CLAIM token

    COVER_CURVE_2020_12_31_DAI_0_CLAIM

    Symbol for NOCLAIM token

    COVER_CURVE_2020_12_31_DAI_0_NOCLAIM

    Usually, one DAI equals to one CLAIM + one NOCLAIM token. As such, it gives its holder exposure to both outcomes during a petition. Depending on the result of a filed allegation, the values change. If a claim is approved, CLAIM value goes to 1 and NOCLAIM to 0. The opposite is true viceversa. Holders can deposit the two token types on the Balancer pools.

    Cover Protocol creates two Balancer pools; one with 80% CLAIM coins and 20% collateral token (DAI) and the second with 98% NOCLAIM and 2% DAI. In this way, IL (Impermanent Loss) is minimized. The pools are created once a new cover is launched on the protocol.

    Types of Participants in The Cover Ecosystem

    To give life to the platform, Cover encourages the participation of market makers, insurance providers, and insurance seekers.

    • Market makers – They provide liquidity and hold both types of minted tokens. Market makers receive rewards from fees charged in the respective liquidity pools. Fees charged usually range between 2-3%. Notably, they can liquidate either token at will.
    • Coverage providers – Unlike market makers, they are insurance providers and only hold NOCLAIM coins. Note that they receive both token types like everyone else when they deposit collateral in the system. However, they can sell CLAIM tokens for a premium and retain NOCLAIM coins.
    Coverage Providers (CP) on Cover Protocol
    Coverage Providers (CP) on Cover Protocol

    Fees charged on the NOCLAIM pool act as their incentives. Cover encourages teams seeking insurance for their platform to be insurers to boost trust and confidence in their offering. In the event of a claim payout, they would lose all their funds, since NOCLAIM tokens would become worthless.

    • Insurance seekers – They hold CLAIM coins and insure their deposited funds. Apart from being covered, they’re rewarded for providing liquidity in the CLAIM pool.

    How Does Cover Protocol Handle Claims?

    Allegations are a normal occurrence in insurance-focused products. The network provides a petition filing window of 72 hours after an incident. Although Cover is a decentralized platform, it handles contentions in four simple steps.

    First, a case is brought against an insured product after paying a fee, which Cover calls the Claim File Fee. However, to keep spam attacks and malicious actors at safe distance, the network increases the cost each time a new allegation is filed against an insured product.

    The second phase involves a vote from $COVER holders (more on the token later). If the community votes unanimously in favour of the submission, it goes through to the third step.

    At the third “level”, the Claim Validity Committee (CVC) or Auditors review the petition to determine whether it meets all the requirements. The CVC also deliberates on the payout percentage , which can be up to 100%.

    Note that five auditors review a single contention and half of them must vote in favour of it to be accepted. The last step is for $COVER holders to redeem their payout for the accepted allegation.

    Note that if a case is rejected during the community voting phase, it can be re-filed as a Forced Claim, which is much more expensive. A bulldozed submission goes through the first, third, and fourth steps.

    Cover Token and Governance

    The native currency on Cover Protocol is $COVER. $COVER acts as a governance token and gives access to the Balancer pools. Additionally, as we saw, it allows holders to participate in the claims management subsection.

    System users can use COVER tokens to provide liquidity on SushiSwap via interacting with the ETH-COVER liquidity pool. Depositing the platform’s native currency in this pool opens the door to receiving a percentage of fees from traders plus additional $COVER through staking the LPs on Cover Protocol.

    What makes Cover different from other Insurance Projects?

    Cover Protocol is not the only project users can refer to when looking at ways to protect their investments. The leader in this space is probably still Nexus Mutual.

    As the name implies, it acts more like a classic insurance company. A user looking for a coverage should go on their website and find the right one to buy. He can choose how much to cover and for how long. A key difference is that, to be able to complete the process, a KYC is required. Moreover, this is the only way to buy $NXM, as you can’t find them anywhere else. For general investors who believe in the project but don’t need coverage, there is a wrapped version of the token which is normally tradable, $WNXM.

    CLAIM/NO CLAIM tokens, unlike $NXM, are just normal tokens and are not connected to any identity (no KYC needed). At will, they can be traded or given to anyone you want. Their utility won’t change.

    DEVELOPING STORY: $COVER exploit/hack?

    On 28th December 2020 an attacker exploited a bug in the protocol’s smart contracts. The exploit appears to be an abuse of the minting exploit where the attacker managed to mint 40 quintillion COVER tokens and sold around USD$5 million worth of COVER tokens. Several hours later, one of the attackers returned the stolen funds (i.e. 4,350 ETH) with the message “Next time, take care of your own shit.” and burned the remaining tokens.

    The Team are still investigating the exploit and mentioned they are looking into providing a new $COVER token and how to return the stolen and returned ETH to affected LP tokens.

    Most importantly, the Team are urging people not to buy $COVER tokens. Exchanges such as Binance have stopped trading on $COVER, particularly as a large trading group of 16,000 members had dumped the price to short the token.

    In a community-driven effort to mitigate the damage, Leo Cheng of CREAM has sent out a “call to action” on behalf of COVER and available developers from the yEarn Ecosystem have come together to lend help and support to the Cover Protocol team.

    Post-Mortem and snapshot

    In the following hours, the Cover team has released a post-mortem article to explain what happened in details and confirming that the exploit affected the minting contract and the token only. The lines of code “incriminated” have been always present in the code and went unnoticed during the audit.

    The team acknowledged their fault too in missing the “amplifier”, that allowed for extra rewards to be minted, and announced a snapshot to distribute a new token and the returned funds. The snapshot will will be taken at block 11541218, one block before the first major exploited mint.

    Compensation Plan and new Token

    Affected users of the attack can check their compensation eligibility on this page. Basically, all $COVER holders and liquidity providers of the /ETH pair could be compensated, even those who were keeping their tokens on a CEX. Unfortunately, unclaimed rewards are impossible to withdraw as as the minting rights from the Blacksmith have been removed.

    The team, consequently to brainstorm with advisors including Andre Cronje, has decided to discard the idea of new shield mining. The total supply, with the launch of the new token, will be the same amount that is eligible for migration.

    The Cover v2 Core contracts are undergoing an internal review at the moment and the exploit hasn’t affected the core contracts, so the project will continue with its development.

    On January the 5th the new $COVER token was made available for claim. All the details can be found on the medium page of Cover Protocol.

    Conclusion

    With DeFi smart contracts repeatedly experiencing hacks and exploits from malicious actors, Cover Protocol provides a critical service by allowing DeFi users to insure their deposits and not be worried anymore. Furthermore, encouraging a product team to provide coverage offers insights into whether it believes in its own protocol security. Consequently, it boosts DeFi adoption.

    Incentivized liquidity provision allows coverage providers, seekers, and market makers to receive trading fees charged on respective pools and rewards while helping other users at the same time.

    Updated on January 6

    Decentralised Finance (DeFi) series: tutorials, guides and more

    With content for both beginners and more advanced users, check out our YouTube DeFi series containing tutorials on the ESSENTIAL TOOLS you need for trading in the DeFi space e.g. MetaMask and Uniswap. As well as a deep dive into popular DeFi topics such as decentralized exchanges, borrowing-lending platforms and NFT marketplaces

    The DeFi series on this website also covers topics not explored on YouTube. For an introduction on what is DeFi, check out Decentralized Finance (DeFi) Overview: A guide to the HOTTEST trend in cryptocurrency

    Tutorials and guides for the ESSENTIAL DEFI TOOLS:

    More videos and articles are coming soon as part of our DeFi series, so be sure to SUBSCRIBE to our Youtube channel so you can be notified as soon as they come out!

    Disclaimer: Cryptocurrency trading involves significant risks and may result in the loss of your capital. You should carefully consider whether trading cryptocurrencies is right for you in light of your financial condition and ability to bear financial risks. Cryptocurrency prices are highly volatile and can fluctuate widely in a short period of time. As such, trading cryptocurrencies may not be suitable for everyone. Additionally, storing cryptocurrencies on a centralized exchange carries inherent risks, including the potential for loss due to hacking, exchange collapse, or other security breaches. We strongly advise that you seek independent professional advice before engaging in any cryptocurrency trading activities and carefully consider the security measures in place when choosing or storing your cryptocurrencies on a cryptocurrency exchange.

  • Boogle Review: Blockchain Blunder or Genius Search Engine?

    Boogle Review: Blockchain Blunder or Genius Search Engine?

    Boogle is a blockchain powered search engine that plays a cheeky tongue-in-cheek to it’s primary competitor, “Google”. The name Boogle is a combination of the words “Blockchain” and “Google“. Currently the search engine is focused on Asian markets as the company is established in Singapore.

    The Singapore based company, Boogle Group Limited is adding security and privacy by default to all searches. This is a direct response to Google’s failure to address privacy issues, where data breaches in the past has lead to broken consumer confidence. The search engine is also making a firm stance on net neutrality – preventing big companies from monopolizing search results. In addition, users are rewarded for using searching via the Boogle Token ($BOO).

    Will Blockchain improve search results?

    “Boogle seeks to create a search engine built on a decentralized platform like blockchain which is secure, network-neutral and free from monopoly by any Internet organization”

    Patrick Lee, CEO of Boogle

    The key selling point of Boogle is that it uses blockchain technology to improve search results and reward users on the platform. Users can sign up to the platform by generating a private key (giving complete access to their account and funds). Users are then rewarded with BOO tokens, a valuable cryptocurrency as a reward for using the service.

    Reward for simply searching?

    We tried out the Boogle rewards program and during our one week of usage, we were rewarded 0.82 BOO (roughtly $0.064 USD, as of 24th October 2019). Admittedly this isn’t a huge reward. We’ll observe the platform over time as the search engine matures and gains advertisers (a key part of their revenue model).

    Boogle BOO Earnings
    Boogle’s BOO token reward system

    Can Boogle win over an over-crowded Space

    Internet search is a trillion dollar business, with major competitors like Google, Baidu, Bing and Duck Duck Go. In recent years, Microsoft has also employed an incentive drive promotion strategy via “Bing / Microsoft Rewards” with a luke warm reception. In order to succeed in the search industry, Boogle must be able to prove that it can deliver the results that people want.

    Can Boogle deliver Results?

    Will you sacrifice Better results for blockchain Rewards?

    Benson Chan, Author

    Doing a full scientific study of search engine results is difficult, as the search behavior of each user is different. We asked our contributors to do their daily search on both Google and Boogle and tabulated the results over a week. Here are our findings:

    Boogle Google
    Relevant Material Found 84% 96%

    We found that Boogle only gave a 84% successful search result over our 1 week test, whilst Google scored higher at 96%. This means Google is still king for research and search relevancy. We’ll be interested to see how this compares over time as Boogle gains more search data and user behavior.

    Verdict

    Boogle Review Score: 3.8/5

    We give Boogle a 3.8/5 as our final rating for the search engine platform. We like the privacy options and VPN feature, this greatly improves user privacy by removing tracking. The idea of giving a cryptocurrency to reward active users to be novel, but the amount given isn’t substantial. We hope search relevance improves over time as the platform garners more users.

  • Stellar Lumens (XLM) in a Nutshell

    Stellar Lumens (XLM) in a Nutshell

    Stellar is a platform that connects banks, payments systems, and people. Lauched in 2014, Stellar uses blockchain technology to allow for quick currency exchange and money transfer. Stellar was originally based on Ripple Lab’s protocol, but due to key philosophical differences Stellar eventually rewrote the code entirely. It is built on a semi-decentralized consensus platform and is designed to support any type of currency such as the US dollar, RMB or Yen. Stellar platform’s native currency is the Stellar Lumens (XLM).

    Stellar Lumens (XLM) can be traded on Binance Exchange.

    Features and Specifications

    • Transaction speed: 3-5 second confirmation time
    • Total Supply: 100B XLM created initially
    • Supports thousands of transactions per second
    • Uses Stellar Consensus Protocol (SCP) rather than Proof of Work
    • Simple, clean API
    • Multisig and smart contracts
    • Decentralized distributed database
    • 1% fixed annual inflation

    How fast is Stellar?

    Stellar XLM Logo

    The Stellar network can confirm transactions within 3-5 seconds with a transaction cost of less than $0.00001. This makes the network ideal for mass consumer adoption and cross border transactions. The network itself can support more than 1000+ transactions per second.

    How Does Stellar Lumens work?

    Decentralized network

    A decentralized network consists of peers that can run independently of each other. This means that the Stellar network does not depend on any single entity. The idea is to have as many independent servers participate in the Stellar network as possible, so that the network will still run successfully even if some servers fail.

    Ledger

    Like a traditional ledger, the Stellar ledger records a list of all the balances and transactions belonging to every single account on the network. A complete copy of the global Stellar ledger is hosted on each server that runs the Stellar software. Any entity can run a Stellar server.

    These servers form a decentralized Stellar network, allowing the ledger to be distributed as widely as possible. The servers sync and validate the ledger by a mechanism known as consensus.

    Consensus

    Stellar uses the Stellar Consensus Protocol (SCP) rather than Proof of Work. The Stellar Consensus Protocol (SCP) is a protocol that achieves optimal safety against ill-behaved participants. Basically, it aims to be more secure and offer better protection against malicious parties.

    The Stellar servers communicate and sync with each other to ensure that transactions are valid and get applied successfully to the global ledger.

    For example, if you want to send $5 to a friend on the network, a list of trusted servers will begin a process to agree on the validity of your $5 payment to your friend. The majority of these servers will have to agree that you do in fact own $5 worth of credit on the network before they will mark the transaction as valid.

    This entire process of coming to consensus on the Stellar network occurs approximately every 2-5 seconds.

    Anchors, trust, and credit

    Anchors are simply entities that people trust to hold their deposits and issue credits into the Stellar network for those deposits. They act as a bridge between different currencies and the Stellar network. All money transactions in the Stellar network (except the native digital currency of lumens) occur in the form of credit issued by anchors.

    Anchors do two simple things:

    1. They take your deposit and issue the corresponding credit to your account address on the Stellar ledger. You can make a withdrawal by bringing them credit they issued.
    2. You have to trust the anchor to honor your deposits and withdrawals of credit it has issued.

    Anchors exist in the pre-stellar world now. For example, to use Paypal, you deposit money in from your bank account. Paypal then gives you credit in your Paypal account. You can now send that Paypal credit to anyone that trusts Paypal (anyone with a Paypal account). Someone that received your Paypal credit can convert it to real money using Paypal by withdrawing it to the bank.

    Anchors perform the same function in Stellar. The difference is, all the “Paypals” and other anchors are operating on the same network so they can all transact with each other now – this makes the system way more powerful. People can now easily send and exchange all these different anchor credits with each other.

    Distributed Exchange

    The Stellar ledger is able to store offers that people have made to buy or sell currencies. Offers are public commitments to exchange one type of credit for another at a pre-determined rate. The ledger becomes a global marketplace for offers.

    All these offers form what is called an orderbook. There is an orderbook for each currency/issuer pair. So if you are wanting to exchange Virgin Bank/EUR for bitstamp/BTC you look at that particular order book in the ledger to see what people are buying and selling it for.

    This allows people to not only buy and sell currencies in a foreign exchange like manner but also to convert currencies seamlessly during transactions.

    Stellar Lumens Partnerships

    Stellar key aim is to help to poor and the unbanked. In 2017, IBM announced a partnership with Stellar protocol to develop a cross-border blockchain-based payment system for large banks. This would greatly improve the efficiency of cross border transactions, especially for countries in Southeast Asia where remittance costs matter and many domestic helpers cannot afford to send money back home. Currently the program works with 47 currencies and in 72 countries.

    Stellar Lumens (XLM) Currency

    Lumens is the name given to the token of the Stellar network. They were originally called stellars back when the Stellar network launched in 2014, but with the launch of the upgraded network in 2015, the name of the token changed from stellar to lumen.

    The Stellar network’s built-in currency, the lumen, serves two purposes:

    1. Acts as a small anti-spam role
      • Each transaction has a minor fee—0.00001 lumens—associated with it. This fee prevents users with malicious intentions from flooding the network (otherwise known as a DoS attack). Lumens work as a security token, mitigating DoS attacks that attempt to generate large numbers of transactions or consume large amounts of space in the ledger.
      • Similarly, the Stellar network requires all accounts to hold a minimum balance of 20 lumens. This requirement ensures that accounts are authentic, which helps the network maintain a seamless flow of transactions.
    2.  May facilitate multi-currency transactions
      • XLM sometimes facilitate trades between pairs of currencies between which there is not a large direct market, acting as a bridge. This function is possible when there is a liquid market between the lumen and each currency involved.

    Stellar Lumen token metrics

    At the genesis of the Stellar Network, 100 billion lumens (XLM) were created as specified in the protocol. As part of its custodial mandate, the Stellar Development Foundation (SDF) is entrusted to oversee that the vast majority, 95 billion, of the lumens are distributed to the world.

    • 50% to be given in small increments to as many people as possible.
    • 25% to be given to other businesses and non-profits to reach people that stellar.org wouldn’t otherwise be able to reach through the Direct Signup program.
    • 20% to be given to bitcoin and XRP holders
    • 5% to be retained by Stellar.org for operations.

    The Stellar network has a built-in, fixed inflation mechanism. New lumens are added to the network at the rate of 1% each year. The network also collects a base fee for each operation in a transaction. The funds from base fees are added to the inflation pool.

    As a balancing measure for the ecosystem, anyone who holds lumens can vote on where the funds in this pool go. Each week, the protocol distributes these lumens to any account that gets over .05% of the votes from other accounts on the network.

    How to mine Stellar (XLM)

    One question that is frequently asked is how to mine Stellar (XLM). Stellar cannot be mined in a process similar to Bitcoin because it doesn’t use Proof-of-Work. Instead Stellar relies on re-established nodes that confirm transactions via a voting system. Block rewards are given to Stellar Nodes at a 1% inflation rate per year. You can buy or sell Stellar (XLM) on the Binance Exchange.

    Resources:

    Stellar website https://www.stellar.org/

    SCP whitepaper https://www.stellar.org/papers/stellar-consensus-protocol.pdf

    Blog https://www.stellar.org/blog/

  • What is Ripple and XRP

    What is Ripple and XRP

    Ripple – Ripple Transaction Protocol is a real-time settlement system designed to be used by banks for currency exchange, remittance and gross settlement. The idea is to replace age old systems like SWIFT –  which was developed in 1972 and used by most banks today. The Ripple protocol offers significant advantages in both speed of transfer and transfer tracking. Ripple uses distributed ledger technology, similar to Bitcoin. When compared with Bitcoin, it is faster and cheaper to send on the ripple network. However, there is one significant trade-off which is its lack of decentralization. The Ripple network is closed off and cannot be joined by any user – meaning there is a significant amount of centralization.

    xCurrent Settlement between banks


    XRP – The cryptocurrency XRP is commonly confused with the Ripple Protocol (also named Ripple) issued Ripple Labs. The XRP is an issued token that uses the Ripple network – it can be sent extremely quickly and with low fees. However, it should be noted that the XRP is not required for the network to work nor is it required for banks to use it if they choose to adopt Ripple. In fact, the xCurrent communication between banks do not use XRP.

    Ripple Logo

    Ripple Currency (XRP) vs the Ripple Protocol

    So lets start off with one confusing factors. So I must make a distinction between Ripple the transaction protocol (which is used between banks and other businesses) and the ripple issued currency, XRP. When you see Ripple making gains its actually the XRP, the currency that is issued by Ripple. And this is actually quite different from the network protocol or Ripple protocol. Both share the same name and I’m sure this has definitely confused a lot of investors.

    https://youtu.be/Y1GshH0F9Ic

    Ripple Protocol

    So lets start off with the transaction network known as Ripple. So the Ripple protocol is based on technology that’s similar to blockchain but not completely the same. It doesn’t require any mining and its based on a consensus network instead of being consumer-facing which is what Bitcoin is. Basically, it’s for the everyday person.

    Ripple is exclusively used by big institutions such as banks. The whole idea of Ripple is to allow banks to transfer any sort of asset, be it currency, USD, Euro, gold, or any other asset such as airmiles. You can transfer that between other institutions near instantaneously. This rivals systems such as swift. So if you ever bought Bitcoin with bank transfer you will know how painful that is. You have to contact your bank and send the transaction to a swift bank code account and this might take up to two to three days and theres a lot of transaction fees involved for both the sender and the receiver. Ripple is set to revolutionise this by providing near instantaneous, sub-second transactions for institutions such as banks. It’s already been adopted by quite a few big banks and

    XRP – Currency of the Ripple Network (xRapid)

    So now that I explained what is the Ripple transaction protocol, let’s move on to Ripple XRP. XRP is actually issued by Ripple Labs and is a form of cryptocurrency that can be traded and it’s not “mined”. So there is a finite number of ripples and that amount is actually issued by the company behind Ripple called Ripple Labs. 

    XRP by itself has no underlying related assets or values eg. Its not tied to USD or gold. Rather, it can be used to act as an intermediate currency in institutions. It has one huge advantage in that transaction costs are very, very low (unlike Bitcoin, which is now reaching 1.5 usd in transaction fees).

    xCurrent doesn’t use XRP

    Ripple Labs have developed two different technologies aimed at solving the transfer of value between nations. Xcurrent is an enterprise technology aimed at banks that allow instantaneous transfer of value. This technology does not use the XRP currency, rather it is ledger for value transfer in the currency of the bank’s choosing. 

    Is the XRP Centralized

    XRP transactions can be confirmed very quickly because of the small number of validator nodes on the network. The XRP network is not open consensus, so only a small number of validators (~30 validators) need to communicate a transaction before it is considered “confirmed”. Proponents of XRP praise it for sub 1 second confirmation times whilst opponents point to the centralized architecture and lack of censorship-resistance. XRP transactions can be reversed and accounts can be frozen – similar to how traditional bank accounts my be frozen.

    Concerns about Ripple

    So moving on, XRP is currently only issued out at less than 40% of its total. The remaining amount (minus the 20% retained by the creators of Ripple) is held by Ripple Labs to distribute whenever and however they so wish. This is actually kind of interesting because unlike a lot of decentralized currencies, Ripple Labs plays a huge part in distributing XRP. Ripple Labs is actually a company and this is very different from Bitcoin, where Bitcoin is fully decentralized and doesn’t have a central controlling authority. Ripple Labs is registered in many countries and it could be sued and held under police custody. This is again very different from other technologies.

    So that’s a little information regarding the Ripple protocol and XRP. I’m sure this may be a little bit confusing for some people and since the technology and the currency share the same name it could be misunderstood. I hope this clarifies a little for you about what Ripple protocol is and what XRP is.

    You can buy Ripple (XRP) on Binance – https://www.binance.com/

  • Tether to issue RMB stable coin “CNHT”? This might challenge the People’s Bank of China

    Tether to issue RMB stable coin “CNHT”? This might challenge the People’s Bank of China

    Tether is rumored to create a new stable coin “$CNHT” based on the Chinese National Currency, the RMB using offshore accounts. Tether is the creator behind the infamous stablecoin $USDT, which is used on many cryptocurrency exchanges. This could potentially be Tether’s way of beating the People’s Bank of China to issue the first digital version of the RMB. This news was immediately met with mixed reactions. On one hand, it might help with the adoption of cryptocurrencies by allowing for an easier on-ramp to crypto for Chinese. However, this might also been seen as a move to challenge the People’s Bank of China, which is known to have disastrous consequences.

    This news has been “leaked” by DGroup founder Dong Zhao, who is a known investor in Bitfinex and Tether.

    Challenging the People’s Bank of China?

    China maintains a “closed” capital account, meaning companies, banks, and individuals can’t move money in or out of the country except in accordance with strict rules.

    International Trade Administration 

    State owned People’s Bank of China (PBoC) has always had a tight group on the RMB. RMB transfers out of China are tightly regulated and have to go through government approval before it is sent. If Tether creates a digital version of the RMB, users can freely send the currency in and out of the country on the blockchain – without government oversight. Netizens were quick to point this out, as shown by the following reactions on Chainnode:

    Break things first?

    Tether has always had a reputation of breaking things first, then figuring out the legal ramifications. Tether and Bitfinex are currently under investigation by the NY attorney General. It is not too difficult for Tether to secure secret offshore bank accounts to hold RMB, then issue the tokens on the blockchain. The technology is already there from USDT – the issue is if they can keep the bank accounts from been frozen by authorities. Funnily enough, members of the chinese crypto communities have called for a boycott of $CNHT

    Chinese Currency Control Information:

    https://www.export.gov/article?id=China-Foreign-Exchange-Controls
    https://www.safe.gov.cn/en/
    https://www.scmp.com/business/banking-finance/article/3008795/chinese-banks-quietly-lower-daily-limit-foreign-currency

  • Demise of Bitmain? What does it mean for Bitcoin Cash and Litecoin?

    Demise of Bitmain? What does it mean for Bitcoin Cash and Litecoin?

    Recently reports have surfaced regarding trouble at Bitmain – with entire research divisions cut and rumors that CEO Jihan Wu will step down. The reason why this is important for the entire crypto field is for 2 reasons:

    • Bitmain has a huge effect on the price of Bitcoin Cash and Litecoin – with holdings of up to $600M USD in Bitcoin Cash alone.
    • Future of Mining – Bitmain the largest producer of mining equipment (ASICs)
    Bitmain and CEO Jihan Wu

    Currently, Bitmain is trying to issue an IPO and raise additional funds. For many, a successful Bitmain IPO will mean good news for Bitcoin Cash, whilst a failed IPO would mean disaster. In this article, we will examine what is known about Bitmain.

    Bitmain Holds 1 Million Bitcoin Cash (5% of supply)

    Bitmain is responsible for mining and holding a significant amount of Bitcoin, Bitcoin Cash, Litecoin and DASH. It is difficult to track directly on the blockchain how much they own as they control newly minted coins. There is a leaked chart of Bitmain cryptocurrency holdings from the IPO filing in Q1 of 2018:

    Leaked Chart of Bitmain Holdings of Bitcoin Cash, Litecoin, Dash and Ethereum (Q1 2018)

    From what we can see from the chart, Bitmain was has been increasing their supply of Bitcoin Cash from 841,000 BCC (BCH) to 1,021,315 BCC over a 3 month period.

    Mining Slowdown

    Miners throw away old mining equipment as they are no longer profitable

    Bitmain’s trouble stems from the fact sales for their ASICs have significantly fallen. This is because their customers, cryptocurrency miners are not making a profit in 2018 due to low profits. Mining companies such as Gigawatt have even filed for bankruptcy. Without a strong demand for ASICs, Bitmain will struggle to main sales and generate revenue. Competitors such as GMO has announced they will exit the cryptocurrency mining business altogether.

    Hong Kong Exchange hesitant to approve Bitmain IPO

    • Hong Kong Exchange (HKX)

    Hong Kong’s Exchange (HKX) has been hesitant to approve Bitmain’s Initial Public Offering (IPO), casting fear into the future of the company. In order to successfully apply, Bitmain has to justify that they have “sustainable models“.

    Bitmain has 6 months to gain regulatory approval from the HKEX and the Securities and Futures Commission (SFC) before the application is considered lapsed. Once the application has lapsed, the application decision needs to be appealed for Bitmain to have any chance of having an IPO. Bitmain’s competitor, Canaan mining’s application for an IPO has already lapsed.

    Trouble for Bitcoin Cash?

    With Bitmain in hot waters, Bitcoin Cash holders worry that this is bad news for their future. Bitmain has been the biggest vocal supporter and cryptocurrency buyer for Bitcoin Cash. With holdings of 1 Million Bitcoin cash, the own around 5% of the total supply. Bitmain also funds Bitcoin Cash development – and this is under jeopardy as there rumors that this research funding will be cut.