Boxmining v2

Author: michael

  • Ethereum 2.0 – Here’s what you NEED to know

    Ethereum 2.0 – Here’s what you NEED to know

    Ethereum 2.0 (Formerly known as ETH2) is a series of upgrades to the Ethereum Blockchain which will improve its speed, efficiency, and scalability. This will allow Ethereum to handle significantly more transactions, improve smart contract stability and reduce network fees. Upon reaching the final phase of the upgrade, Ethereum will meet its goals of becoming a transparent and open network for Decentralized Finance (DeFi). This article breaks down the roadmap for this upgrade and key milestones of when they are released. The next big update coming in the second half of 2023 is the “Shanghai upgrade” which will have a significant economic impact.

    What is Ethereum 2.0?

    Ethereum 2.0 will involve sharding to drastically increase network bandwidth and reduce gas costs, making it cheaper to send cryptocurrencies and interact with smart contracts. There will be fundamental economic changes too, Ethereum 2.0 will allow support to stake nodes and to earn Ethereum as passive income. The Ethereum 2.0 upgrade will be done in 3 distinct phases starting with Phase 0 (after all, developers count from 0 instead of 1). Over the past few years, opponents of Ethereum have often criticized the network’s high transaction costs and fragility during peak usage. This guide will cover the timeline for the upgrade to ETH2.0 and the solutions proposed.

    Ethereum 2.0 Key features and what you need to know video

    Key Features of Ethereum 2.0

    • Efficiency – Ethereum will become 99.95% more energy efficient. It is estimated that after the upgrade, the network will no longer require an entire country’s worth of power.
    • Sharding – Ethereum will be broken into 18 “Shards” that operate simultaneously. This will drastically improve efficiency.
    • Staking – Ethereum will move to Proof-of-Stake Consensus, so everyone can stake and help secure the network.
    • Security – Compromising the network will become much more expensive under Proof-of-Stake. 51% of attackers will also be easily identifiable with validator addresses and can be forked away from the network.

    The 3 Phases of Ethereum 2.0

    Ethereum 2.0 will be launched in 3 phases:

    • Phase 0- Beacon Chain – Completed in 2020
    • Phase 1- The Merge – Completed September 2022
    • Phase 2- Sharding

    Phase 0: Beacon Chain

    Launched on 1st December 2020, the Beacon Chain introduced Proof-of-Stake to the Ethereum ecosystem. The purpose of the Beacon Chain is to coordinate the Ethereum network and serve as the consensus layer. This Beacon chain is necessary to generate the randomness that actual proof of stake uses. It also acts as a crucial precursor to upcoming phases such as sharding.

    Learn more with our Ethereum mining guide and learn how to stake Ethereum 2.0 on Allnodes.

    Phase 1: The Merge

    The Ethereum Merge was completed on the 15th of September 2022. This merged the Beacon chain from phase 0 into the original proof-of-work mainnet (i.e. the “execution layer”, formerly known as “Eth1”). After the Merge is completed, ETH1 and ETH2 become the same network that uses the same ETH coin. Why the merge is so important and such a difficult task because it involved switching consensus mechanisms. An analogy for this would be switching the engine of a car from a gas to an electric-powered engine – whilst the car is still moving.

    The Merge made the Ethereum network substantially more energy efficient as it no longer required cryptocurrency miners that consumed a huge amount of electrical power. It is calculated that there is an incredible 99.988% reduction in the energy necessary to run the network, meaning that current Ethereum Staking Nodes are incredibly energy efficient. It will also set the stage for future upgrades to the scalability of Ethereum such as sharding.

    Phase 2: Sharding

    By then, the Beacon Chain has already been launched and merged with the Ethereum Mainnet. The next stage will introduce sharding to the Ethereum Network.

    Sharding on Ethereum means the database would be split horizontally to spread the load. Sharding will work together with layer 2 rollups. This divides the burden of handling large amounts of data needed by rollups over the entire Ethereum network.

    Ethereum Sharding is realistically expected to be released in 2024.

    Main features of sharding:

    • Everyone can run a node: Validators will no longer need to store all the data themselves. This drastically reduces the cost of storing data on layer 1 by reducing the hardware requirements.
    • More network participation and security: With sharding, you will be able to run Ethereum on a laptop or phone. This means more participation, greater decentralization, and more security.

    What are layer 2 rollups?

    Layer 2 rollups are an existing “layer 2” technology. This allows decentralized applications (dApps) to “roll up” transactions into one off-chain for submission. The effect of this is that it reduces the data needed to execute a transaction.

    The combination of layer 2 rollups and sharding is what will achieve a transaction speed of 100,000 tps.

    Learn more: Understanding layer 2 & scaling solutions: Arbitrum, Boba, Optimism, Polygon, Ethereum 2.0

    What is the current state of Ethereum 2.0?

    3 upgrades have been introduced since the launch of the Beacon Chain on 1st December 2020: the Berlin upgrade, London upgrade, Altair upgrade and Shanghai upgrade.

    The Berlin upgrade was launched on 15th April 2021 and optimized gas costs for some EVM actions and increased support for several transaction types. The London upgrade was launched on 5th August 2021 and reformed the transaction fee market for the ETH 1.0 chain via EIP-1559 and removed or reduced gas fees for specific functions (Learn more about the London upgrade). The Altair upgrade was launched on 27th October 2021 and is the first scheduled upgrade for Ethereum’s Beacon Chain. It added support for “sync committees” which enabled light clients, brought validator inactivity, and slashed penalties up to their maximum values.

    The Ethereum network’s Shanghai upgrade (also known as Shapella) was successfully completed at 22:27 UTC on 12th April 2023. To celebrate this milestone, ConsenSys launched an NFT collection called “Ethereum, Evolved: Shanghai”. The NFT claim period begins on April 12, 2023, at 9pm EST and lasts for 72 hours. Find out how to claim this FREE NFT with our guide here.

    The next major Ethereum upgrade is titled Cancun, which will feature proto-dank sharding, a feature that aims to improve scalability by improving fees and transaction times. The details of the Cancun upgrade have not yet been finalized.

    Shanghai (Shapella) upgrade

    The Ethereum network’s Shanghai (also known as Shapella) upgrade took effect at 22:27 UTC on 12th April 2023 and was very successful. This upgrade combined changes to the execution layer (i.e. Shanghai), consensus layer (i.e. Capella), and engine API at epoch 194,048. The Shapella upgrade is important because it finally enabled withdrawals of ETH stakers/validators from the Beacon Chain, ahead of the implementation of the Ethereum Improvement Proposal (EIP)-4884 related to The Surge. This will improve the security of Ethereum’s post-Merge proof-of-stake protocol.

    Additionally, a set of EIPs that upgrade the Ethereum Virtual Machine (EVM) will be included in the Shanghai upgrade, such as EIP-3651: Warm Coinbase, EIP-3855: PUSH0 instruction, EIP-3860: Limit and meter initcode and EIP-4895: Beacon chain push withdrawals as operations. The EVM Object Format (EOF) may be removed from the Shanghai upgrade if it is not ready by the time of implementation. Once the Shanghai upgrade is complete, the network’s next major event is the Sharding upgrade, which is expected to take place between 2023 and 2024.

    Learn more about the Shanghai upgrade and how it is causing liquid staking derivative tokens to pump- Ethereum Shanghai Upgrade: Why Liquid Staking Derivatives are Pumping

    How much ETH has been withdrawn since the Shanghai (Shapella) upgrade?

    Since the Shanghai (Shapella) upgrade 228.82K $ETH has been withdrawn with 100.51K $ETH deposited (as of 10:00am HKT on 14th April 2023). At the same time, the current amount of $ETH being staked is 17.38M ($34.97B). And the pending withdrawal amount (including rewards) is 981K ($2.07B). Around 60.99K ($126.89M), is expected to be withdrawn in the next 11 hours.

    You can see how much ETH has been withdrawn, deposited or staked since the Shanghai (Shapella) upgrade here.

    Ethereum ETH prices since the Shanghai (Shapella) upgrade?

    The Ethereum Shanghai (Shapella) upgrade took effect at 22:27 UTC on 12th April 2023 (06:27 on 13th April 2023 HKT). Before the upgrade, ETH was only trading at around $1,920 and remained the same a few hours after. However, the full effect of the Shanghai upgrade on Ethereum prices was seen around half a day and particularly 24 hours after the Shanghai upgrade. As of 11:30am HKT on 14th April 2023 (nearly 1.5 days after the Shanghai upgrade), Ethereum is trading at $2,109.87.

    How to set up an Ethereum Validator Node

    Check out our LIVE demonstration on how to set up an Ethereum 2.0 Node

    How to set up an Ethereum 2.0 node

    I’ve also set up something called an Ethereum validator node for Ethereum 2.0. These nodes will be how Ethereum would run and how transactions are going to be validated in the future. So we’re going to explore all of these concepts as well in this guide.

    Currently you can test out Ethereum staking on the ETH 2.0 Testnet set up by Prysmatic labs (aka Topaz). Since it’s a test, Ethereum will not be used, instead, it will use Göerli ETH, a free testnet version of ETH.

    Time needed: 2 days

    How to set up an Ethereum (ETH) Validator Node
    This guide has been adapted from the Prysm ‘Topaz’ Testnet Guide

    1. Get some Göerli ETH

      Göerli ETH is free to obtain and will be used to stake the 32 ETH required for the node. The easiest way to obtain the Göerli ETH is to use the social faucet.

    2. Spin up a Server

      You’ll need to be familiar with running a VPS server (you can use AWS, Hetzner or Linode). Recommended specs include an Intel Core i7 processor with 100 GB of SSD storage

    3. Start your Beacon Node

      Easiest way we found to do this is via Docker
      docker run -it -v $HOME/prysm/beacon:/data -p 4000:4000 -p 13000:13000 \ gcr.io/prysmaticlabs/prysm/beacon-chain:latest \ –datadir=/data

    4. Generating a validator keypair

      docker run -it -v $HOME/prysm/validator:/data \ gcr.io/prysmaticlabs/prysm/validator:latest \ accounts create –keystore-path=/data

      Complete the steps here to stake the ETH

    5. Starting up the validator client

      docker run -it -v $HOME/prysm/validator:/data –network=”host” \ gcr.io/prysmaticlabs/prysm/validator:latest \ –beacon-rpc-provider=127.0.0.1:4000 \ –keymanager=keystore \ –keymanageropts='{“path”:”/data”,”passphrase”:”changeme”}’

    6. Finish the activation

      Wait (roughly 2 days) to get activated, and then you’re good to go!

    Staking Ethereum on a validator node

    Ethereum 2.0 migrated the network consensus to a proof of stake mechanism. The staked 32 ETH2 is used to validate the transactions and states on the network. It also acts as a guarantee that the validator node will be honest and operational. In return, stakers will be rewarded with Ethereum.

    This means that validators will generate Ethereum as passive income and receive ETH payouts slowly over time. Current calculations of Ethereum 2.0 staking show an annual 14.2% Return on Investment (ROI).

    This will be great for those who stake ETH. This is because they can enjoy the benefits of passive income whilst personally holding their funds on the validator node. Analysts predict greater demand for ETH once proof of stake is implemented. This is due to additional demand for ETH from staking and validator nodes. Whilst at the same time, reduced demand for GPUs as Ethereum mining will eventually be phased out.

    You can see the status of our Ethereum validator node in the image above. We had some initial downtime for the node, so we actually lost 0.01333 Ether. This was a penalty for missing our votes. So it is important to remember that votes are mandatory once a node is activated. An offline node will mean that votes are missed, resulting in a penalty of loss of ETH.

    Ethereum Staking: Deposit contract address release

    On 4th Nov 2020 the required specifications of ETH2 v1 and the Mainnet Deposit Contract Address for staking were released. This allowed ETH2 users to stake their ETH and become validators to help secure the network.

    It’s important to remember that it is not possible to simply send ETH to the contract. This will result in your transaction failing. You need to go through the launchpad and follow the guide. Moreover, as we stated previously, staking and running a validator requires effort, time and technical expertise. Failing to meet requirements can result in loss of part of, if not all, your ETH as penalties add up.

    Ethereum Staking Update: Yields?

    As of April 2023, I have earned around 4.373 ETH since setting it up 3 years ago. Note that results may vary. Those who set up their node earlier (as was in my case) were able to enjoy 16% APY. The current APR yield for staking ETH is around 5.16%. You can check the current APR, total ETH staked, and number of validators here.

    Ethereum staking since the Shanghai Upgrade

    The APR yield for staking ETH since the Shanghai Upgrade is still very good at around 5.16%. So I am planning to continue staking ETH so I don’t miss out on this opportunity to earn more yield.

    Progress of Ethereum 2.0 so far

    More than 17.3 million $ETH is currently staked. Since the Shanghai Upgrade on 12th April 2023, over 107K $ETH has been deposited in the contract address. There are currently 568,291 validators and a Participation Rate of over 99%. The Participation Rate is a measure of ETH2’s network health as it shows the number of validators actively participating in the consensus mechanism. A good rate would be always above 80-90% to ensure the security of the chain.

    Unlike before, Ethereum 2 proceeds in epochs (32 blocks), every 6.4 minutes (if no abnormalities are detected). You can always check this metric here: beaconscan.com/epochs.

    What’s next in the development of Ethereum 2.0?

    Phase 0 – Beacon Chain is already completed, and development would move onto building Phase 1- The Merge and Phase 2-Shard Chains.

    Ethereum 2.0 setup and architecture

    Currently, we are in Phase 1 of the roadmap the road towards Ethereum 2.0. The Ethereum network is now around 55% complete following the Merge of the Beacon Chain with the Ethereum mainnet in September 2022.

    After the Merge, Ethereum will have further upgrades which Vitalik calls the “surge”, “scourge”, “verge”,”purge” and “splurge”. This refers to Ethereum’s scaling, cleanup and evolution.

    What is the “surge”, “scourge”, “verge” “purge” and “splurge” in the development of Ethereum 2.0?

    After the Merge, Ethereum will undergo further upgrades known as the “surge”, “scourge”, “verge” “purge” and “splurge”.

    The “surge” in the development of Ethereum 2.0 refers to adding Ethereum sharding. The purpose of this is to enable more affordable layer-2 blockchains, reduce the cost of rollups, and make it easier for users to operate nodes to secure the network. Once the surge is completed, the Ethereum network is expected to be able to process transactions faster. Ethereum could process up to 100,000 transactions a second once sharding is completed. This is much faster than traditional payment systems such as Visa which can handle around 1,667 transactions per second.

    The “scourge” is a new phase announced by Vitalik on 5th November 2022. The purpose of this stage is to ensure reliable and credibly neutral transaction inclusion. Also, to avoid centralization and other protocol risks from MEV.

    The “verge” will introduce “stateless clients” and “Verkle trees”- which are a form of mathematical proof. This enables users to become network validators without storing lots of data on their machines. This is a further step in the move toward a Proof-of-Stake consensus model as any validator with staked ETH can confirm and verify transactions. This will be hugely beneficial for decentralization.

    The next stage, the “purge” will involve cleaning up old network history. This is to reduce the amount of space required on your hard drive and remove the requirement of nodes to store historical information.

    The “splurge” would be several smaller upgrades and fine-tuning in order to ensure that the network operates smoothly. Or as Vitalik calls it, “all the other fun stuff”.

    Updated Ethereum roadmap

    What will happen after ETH 2.0 is launched?

    Currently, the Ethereum network can only process around 12 to 25 tps with an average confirmation time of 6 minutes. The result is that the Ethereum network is heavily congested with people all vying to process transactions, resulting in high gas fees.

    Many “Ethereum killers” have therefore been launched. These are alternatives people can use for processing transactions. Some Ethereum alternatives include Solana, Avalanche, Polkadot, Algorand, and Cardano. They are a direct competitor to Ethereum as they offer similar features but at lower cost and higher speed.

    Eventually, the number of transactions per second will drastically increase to over 100,000 tps. So the question would be, what would happen to the competition i.e. the “Ethereum killers”? Find out more in our article: Ethereum Merge is coming, is this the end of Ethereum killers?

    Frequently Asked Questions (FAQ)

    Will Ethereum 2.0 replace Ethereum?

    Ethereum 2.0 will not replace Ethereum. Rather, Ethereum and Ethereum 2.0 will be merged together into 2 layers of the same blockchain. Ethereum as we know it will be the execution layer, whilst Ethereum 2.0 will be the consensus layer.

    Will there be any difference in using the ETH as I am used to?

    No, ETH1 will continue as it is with no differences. ETH2 is setting up on a parallel line and the two will merge in the future. The merge will happen without ETH users being able to notice it

    When will Ethereum mining end?

    Ethereum mining will not end for quite a few years. Ethereum will retain mining on the main chain until at least 2020. The main ETH1 chain will continue to use mining and run parallel to the ETH2.0 chain. This is to ensure stability during the migration

    Should I stake my ETH for ETH2?

    It does not cost any money to set up a validator node to stake ETH for ETH2. Staking ETH will allow you to generate passive income. However, you will need to stake at least 32 ETH, and if your node suffers downtime your ETH will be partially deducted as penalties. Also, your staked ETH cannot be unstaked until after the Ethereum Shanghai Upgrade.

    What are the minimum hardware requirements to become an ETH validator?

    Following this list on Prysm website to install the client:

    Minimum specifications

    Operating System: 64-bit Linux, Mac OS X 10.14+, Windows 64-bit
    Processor: Intel Core i5–760 or AMD FX-8100 or better
    Memory: 8GB RAM
    Storage: 20GB available space SSD
    Internet: Broadband connection

    Recommended specifications

    Processor: Intel Core i7–4770 or AMD FX-8310 or better
    Memory: 16GB RAM
    Storage: 100GB available space SSD
    Internet: Broadband connection







    Can I lose my ETH Deposit in the Node?

    Yes. The 32 ETH staked for the validator node is designed as an insurance that the validator node is operational and online at all times. Penalties will be given if the node is offline, and small amounts of ETH will be deducted over time.

    What is the expected APR yield for staking ETH?

    The current APR yield for staking ETH is 3.7%. Here you can have an idea of the APR (in ETH) as it varies with the number of ETH staked (source).

    Is staking ETH for ETH2 safe or risky?

    Staking ETH for ETH2 is safe and does not have any significant risks. However, stakers will not be able to withdraw their staked ETH until after the Shanghai hard fork in March 2023. Also, if your validator node goes offline, you will be penalised by a deduction of your staked ETH.

    Are there projects that will allow me to stake even if I have less than 32 ETH?

    If you want to participate in ETH2 staking but you don’t own the minimum amount required to become a validator, or you don’t want to stake an exact multiple of 32 ETH, don’t worry. There will be possibilities through Centralized Exchanges (like Binance and Coinbase) and not only. A big advantage in this case, is to receive liquidity for your staked ETH.
    RoocketPool ($RPL), now in beta, will correspond rETH (1:1 with ETH), a tokenized asset that you will be able to trade freely. Lido Finance will do a similar thing through their stETH. LiquidStake will instead let you borrow USDC for your staked ETH collateral. Many other solutions will arise as ETH2 will start its journey; for example, Cream Finance ($CREAM) has recently released an article explaining that user will receive the ETH2P token when joining ETH2 staking through them

    Can you withdraw ETH2 back to regular ETH?

    In Phase 0, ETH2 cannot be withdrawn back to regular ETH. Once converted, ETH2 will only be usable on the Staking Chain until Phase 3.

    What can I do with my ETH2?

    At the moment you cannot do anything with your ETH2. They are just “digital receipts”. Transactions or other features we have now on ETH won’t be available on ETH2 for probably years. There are rumors of a possible secondary market where to trade them though.

    When can I buy and sell ETH2?

    You cannot buy or sell ETH2 yet. ETH2 will only be available for trading or transfer until Phase 3 when the upgrade of the Ethereum protocol is complete.

    Should I buy ETH2 or ETH?

    ETH2 is not available for sale yet, so users should be careful of any places that offer ETH2 for sale. ETH on the other hand can be bought and traded at almost every cryptocurrency exchange.

    Is testnet ETH worth the same as ETH?

    ETH on testnets do not have any monetary value. They essentially allow developers to test and troubleshoot DApps and protocols before going live on the Ethereum mainnet. As a result, there are no markets for testnet ETHs.

    Will Ethereum gas fees be cheaper after The Merge?

    The Merge will not make Ethereum gas fees cheaper. This is because The Merge is only a change in the consensus mechanism from Proof-of-Work to Proof-of-Stake. Only an expansion of the Ethereum network capacity and throughput would lower the gas fees. However, this is still in development.

    Will I be able to withdraw my staked ETH after The Merge?

    There is currently locked staked ETH (stETH) on the Beacon Chain. stETH is backed 1:1 by Ether (ETH). However, developers have confirmed that users will not be able to withdraw their locked stETH after The Merge. Withdrawal of stETH will instead be possible after the Shanghai Upgrade which is expected to be in second half of 2023.

    Will Ethereum transactions be faster after The Merge?

    Ethereum developers believe that transitioning to Proof-of-Stake will result in a 10% increase in block production. However, users are unlikely to be able to notice this slight improvement.

    Will Ethereum ETH 2.0 be a new coin?

    No. There will not be a new ETH coin after the launch of Ethereum 2.0. Therefore, existing ETH holders, users of dApps, and traders do not have to do anything in anticipation of Ethereum 2.0.
    Therefore, users should be wary of websites or services claiming that they will allow users to trade, invest, mine, swap, or stake the ETH2 token. This is because the ETH2 token doesn’t actually exist.

    Will there be any tax implications resulting from The Merge?

    If The Merge does not result in a hard fork, then there are no tax implications because no new tokens would be created.

    However, if the Merge results in a hard fork, ETH holders would be sent duplicate tokens which may have tax implications. If the ETH is held in user-owned wallets, new proof-of-work ETH tokens would be considered as income, and its valuation calculated at the time the user comes into possession of the tokens. On the other hand, if the ETH is held in custodial wallets such as cryptocurrency exchanges, the implications would depend on the custodians’ stance on supporting the forked ETH chain.

    Will dApps or exchanges be affected by Ethereum 2.0?

    The launch of Ethereum 2.0 will not cause a huge impact on users’ interactions with blockchain dApps or cryptocurrency exchanges and services.

    Will exchanges be shut down during the ETH Merge?

    Ethereum developers have confirmed that during the Merge, there would not be any downtime.

    When was the Ethereum Merge?

    On 15th September 2022 at 06:42:42 UTC at block 15537393, the Ethereum Merge was completed.

    Will ETH holders be airdropped new tokens after Ethereum 2.0?

    There are currently no plans for an airdrop of new tokens for ETH holders after the launch of Ethereum 2.0. So far, Vitalik Buterin and the Ethereum Foundation have expressed that they are firmly against any forked ETH tokens.

    Therefore, any websites or social media accounts purporting to airdrop Ethereum tokens are most likely a scam.

    What is the ETHPOW or ETHW token?

    ETHPOW or ETHW is the token that will emerge if there is a fork of the Ethereum blockchain. During the Merge, some community members may disagree (e.g. want to stay with the Proof of Work mechanism) and fork ETH. What they may do, is “copy and paste” the Ethereum blockchain. The result of this is there would be 2 blockchains and 2 tokens. There would be the existing Ethereum blockchain that goes through the Merge with the ETH token. And then there would be the forked chain with a new token called ETHPOW or ETHW.

    How can I get the airdropped free ETHPOW/ETHW token?

    If you held Ethereum prior to the Ethereum Merge, you will be airdropped (via the fork) free ETHPOW tokens

    When can I stop staking my ETH?

    Those who have staked their ETH cannot stop staking until the Shanghai hard fork, which is expected in the second half of 2023.

    Where can I buy or trade the EthereumPoW ($ETHW) token?

    The EthereumPoW ($ETHW) token is not widely traded on cryptocurrency exchanges. However, you can buy or trade the EthereumPoW ($ETHW) on these exchanges: OKX, ByBit, Kraken, Huobi, MEXC Global, Gate.io, Bitfinex, Bittrex, Poloniex and Hotbit.

    What is the next upgrade to the Ethereum network

    The next upgrade to the Ethereum network is known as the Shanghai upgrade. A major anticipated feature of this upgrade is that withdrawals of ETH stakers/validators from the Beacon Chain will be enabled. The Ethereum network Shanghai upgrade is expected to be in March 2023.

    Will there be an Ethereum hard fork after the Merge?

    A hard fork is a backward-compatible and permanent split or fork of the blockchain. After a hard fork, a separate version of the blockchain will emerge, as well as a new cryptocurrency token. There is speculation that the Merge may result in a hard fork. This is because some want to take advantage and profit from the Merge. Alternatively, a hard fork may be formed by those who disagree with the direction of Ethereum’s development. A group known as ETHW Core announced they will launch a hard fork within 24 hours of the Merge. This is because they oppose the change to a proof-of-stake mechanism, which essentially puts an end to ETH mining.
    Several hours after the Merge, the ETHW mainnet and fork of the Ethereum blockchain was launched.

    Tax implications resulting from The Merge or Ethereum hard fork?

    If The Merge does not result in a hard fork, then there are no tax implications because no new tokens would be created.

    How has Ethereum 2.0 impacted its price

    If all the phases are completed successfully, Ethereum prices are expected to increase. This is because each phase of the upgrade gives significant upgrades that will improve the performance of the blockchain. This will further grow its utility and value.

    What will happen to Ethereum mining?

    Ethereum mining is the process of adding blocks of transactions to the Ethereum blockchain. This is to help secure the Ethereum network through a Proof-of-Work (PoW) mechanism. Miners are then rewarded with ether (ETH) which can be traded on cryptocurrency exchanges. Therefore, many people would run Ethereum miners for profit.
    However, the launch of ETH2.0 will fundamentally change the current economics. The existing Proof-of-Work (PoW) consensus mechanism will be replaced by Proof-of-Stake (PoS). The concept of mining will be retired once the Ethereum 2.0 update is fully completed.
    For more details check out our article: The end for Ethereum miners after ETH 2.0?

    What is the status of the Ethereum Shanghai upgrade?

    The Shanghai (Shapella) network upgrade took place at 22:27 UTC on 12th April 2023.

    Will Ethereum 2.0 replace Ethereum?

    No, but how transactions will be confirmed will change. Previously Ethereum uses Proof of Work (PoW) to confirm transactions. However, Ethereum 2.0 will transition to a Proof of Stake (PoS) consensus mechanism.

    What is the Shapella upgrade?

    The Shapella upgrade is another name for the Ethereum Shanghai upgrade. It is called the Shapella upgrade because it combines changes from the Shanghai (execution layer) and Capella (consensus layer). This upgrade took place at 22:27 UTC on 12th April 2023.

    How much ETH has been withdrawn since the Shanghai (Shapella) upgrade?

    Since the Shanghai (Shapella) upgrade, 228.82K $ETH has been withdrawn (as of 10:00am HKT on 14th April 2023). The pending withdrawal amount (including rewards) is 981K ($2.07B). Around 60.99K ($126.89M), is expected to be withdrawn in the next 11 hours.

    Where can I see how much ETH has been withdrawn or staked since the Shanghai (Shapella) upgrade?

    You can see how much ETH has been withdrawn, deposited or staked since the Shanghai (Shapella) upgrade here.

    Ethereum ETH prices since the Shanghai (Shapella) upgrade?

    Ethereum ETH prices eventually received a positive boost hours after the Shanghai (Shapella) upgrade. Before the upgrade, ETH was only trading at around $1,920. Nearly 1.5 days after the Shanghai upgrade, Ethereum is trading at $2,109.87.

    What is the current APR for staking Ethereum?

    The current APR yield for staking Ethereum is around 5.16%

    Updates:

    Update Nov 2022: Ethereum 2.0 has recently gone through some changes – it is now called the Ethereum Merge.
    Update Jan 2023: Added details about Ethereum Shanghai Upgrade
    Update Apr 2023: Added details about Ethereum Shanghai Upgrade and its effect on ETH prices.

    Resources:

    Ethereum Foundation: https://ethereum.org/en/upgrades

    Pyrsmatic Labs: https://medium.com/prysmatic-labs/how-to-scale-ethereum-sharding-explained-ba2e283b7fce

    Ethereum Wallet holders: https://bitinfocharts.com/comparison/activeaddresses-eth.html

    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.

  • Ethereum Shanghai Upgrade – All you need to know

    Ethereum Shanghai Upgrade – All you need to know

    Ethereum Shanghai Upgrade is scheduled for April 12th and includes key economical changes to Ethereum and fee optimizations that will improve the network. This upgrade is part of Ethereum’s upgrade plan into Ethereum 2.0 – a faster, cheaper and more stable public blockchain. The main purpose of the Shanghai Upgrade is financial – it will allow stakers and validators to withdraw staked ETH from the Beacon Chain, which has been locked since December 2020. Some users have feared that this change will unlock $26 billion USD worth of Ethereum, potentially causing Ethereum’s prices to fall.

    Staked Ethereum is Unlocking

    The key feature of the Shanghai Upgrade is Ethereum Improvement Proposal (EIP) 4895, which will enable validators to withdraw staked ETH. Validators have staked approximately 16 million ETH to secure the network. Validators can participate in validating blocks by staking 32 ETH in the chain, and each staked ETH increases the likelihood of a validator receiving block rewards.

    Validators have been staking ETH and earning rewards for validating blocks since the launch of Ethereum’s Beacon Chain in December 2020. However, the rewards earned by validators have been locked since the transition to PoS consensus in September 2022. With the Shanghai Upgrade, validators will finally be able to withdraw their rewards.

    The withdrawal of staked ETH has been successfully simulated on the Zhejiang testnet. The Zhejiang testnet is the first of three testnets that will run the simulation. The Sepolia and Goerli testnets will follow, running the simulation in the coming weeks.

    Key Improvements (EIP) in the Shanghai Upgrade:

    EIP-3651: Warm COINBASE – This EIP aims to lower the gas cost of accessing the COINBASE address, which is a software component that allows developers to receive new tokens.

    EIP-3855: PUSH0 instruction – This EIP aims to lower the gas cost of deploying contracts by introducing a new PUSH0 instruction.

    EIP-3860: Limit and meter initcode – This EIP introduces a gas cost limit and meter for contract initialization code, which should help to reduce gas costs for developers.

    EIP-4895: Beacon Chain push withdrawals as operations – This EIP is one of the key features of the Shanghai upgrade, as it allows validators to withdraw staked ETH from the Beacon Chain.

    EIP-6049: Deprecate SELFDESTRUCT – This EIP aims to reduce the risk of contract failure by deprecating the SELFDESTRUCT instruction, which can lead to the loss of funds if used improperly.

    These EIPs will reduce gas costs related to Maximal Extractable Value payments when accessing the COINBASE address, lower gas costs for developers, cap developer gas costs in certain cases, and address a similar concern.

    The Shanghai Upgrade does not include EIP-4844, which facilitates the “sharding” of the Ethereum blockchain into multiple chains to enhance scalability. Sharding is a scalability solution that divides the whole network of a blockchain into multiple smaller networks called shards.

    Validators will have two options for withdrawing their staked ETH. The first option is to create a “withdrawal credential” to unstake their staking rewards accumulated over the past years. The second option is to exit the Beacon Chain completely by unstaking all of their 32 ETH, which is the maximum allowed per validator.

    The Shanghai Upgrade is expected to have a significant impact on the market. Approximately 16 million staked ETH will be available for withdrawal, and traders are paying attention to how the market may move. Some traders believe that the upgrade will trigger a selling wave, with many taking profit once staked ETH is unlocked. Others believe that the upgrade will encourage more staking.

    Conclusion

    The Ethereum Shanghai Upgrade is a minor upgrade for the Ethereum network (albeit a large upgrade in terms of unlocked Ethereum). The Ethereum core developers use this upgrade to stabilize the network rather than to deploy aggressive changes. This is why most of the improvements are smaller quality of life improvements rather than fundamental architecture changes.

    The biggest impact of Shanghai has to do with staking and locked tokens. It will enable validators to withdraw staked ETH from the Beacon Chain, which has been locked since December 2020. The upgrade includes several other EIPs that aim to reduce gas costs for Ethereum developers. While it is unclear how the upgrade will impact the market in the short term, it is certain that traders will be watching how much of the available ETH will be cashed out, which could push the price of ETH down.

  • What is Vechain? Blockchain for Enterprise in 2023

    What is Vechain? Blockchain for Enterprise in 2023

    What is Vechain? VeChain ($VET) is a next-generation smart contract blockchain platform focused on solving enterprise and supply chain management solutions. The blockchain supports the creation of smart contracts – self-executing contacts that have a guaranteed outcome without third-party trust. Vechain’s unique advantage is that it has close relations with the big four auditing firms, such as Pricewaterhouse Cooper, who will use blockchains to audit firms.

    Vechain is designed to can solve enterprise problems such as:

    • Anti-counterfeit for Luxury Brands – through the use of smart chips, Vechain tracks each individual item and prevents duplication. Vechain Toolchain allows anyone to create anti-counterfeit tags.
    • Cold-chain Logistics – ensure that food doesn’t spoil during transportation and storage by using smart IoT sensors that automatically report crucial information to the blockchain.
    • Automobile – keep a tamper-proof record of vehicle data including repair history, insurance, registration, and driver habits.
    • Carbon Credits – Quantitatively track the carbon contributions of a particular company to reduce carbon emissions. For retail users, the app is already available on WeChat. Consumers engaging in low-carbon behaviors (e.g. purchasing low-carbon products) would be rewarded with credits that can be redeemed for environmentally friendly goods or donated to charity.
    • Clinical trial traceability platform – with a partnership with Bayer China, Vechain will use blockchain to solve problems of digitalized clinical trial traceability.

    Using blockchain technology, VeChain makes it simple and secure for product manufacturers to collect, manage, and share important product data with vendors and consumers throughout the life-cycle of a product.

    Key Features of Vechain

    • Public blockchain Anyone can read, write and deploy decentralized applications and smart contracts onto the VeChainThor blockchain.
    • In-house IOT and supply chain management technology Proven blockchain implementation experiences in industries such as luxury goods, liquor, and agriculture.
    • Native Fee Delegation The blockchain supports the implementation of native fee delegation, which means dApp users do not need to hold VET or VTHO to write transactions if associated gas costs are specified by the developers to be sponsored.

    VeChain Ecosystem

    To achieve its ambitious vision, VeChain has developed a powerful blockchain-enabled enterprise software platform. The Platform enables manufacturers to assign products with unique identities, which then allows manufacturers, supply chain partners, and even consumers to interact with the product through the platform. It uses blockchain technology to ensure the security of the data collected, allocating private keys to all participants within the supply chain.

    Products are assigned a unique ID, which is stored simultaneously on the blockchain and attributed to the product with an NFC chip, RFID tag or QR code. At any point during the product’s life, the chip, tag or code can be interacted with, whether by a distribution or retail partner ascertaining batch membership, or a consumer wanting to learn more about a product. The Company envisages a broad range of applications, including brand protection, anti-counterfeit, and food safety.

    VeChain has existed since 2015 and migrated its previous private and consortium blockchain to its public VeChainThor blockchain in 2018. This move opens up the advanced features found on the blockchain to any developer or third party to develop and write applications on the platform. There have been several companies that chose to build their business on top of VeChainThor, including Plair and 8Hours Foundation, as well as several independent community developers.

    Vechain Roadmap in 2023

    Vechain Token Economics

    Vechain uses a dual-token economic model. The primary token, VeChain Token (VET) is used to represent value on the network, with various mechanisms designed to stabilize the price of VET over time.

    VET holders will also automatically generate the utility token, VeChain Thor Token (VTHO). VTHO is a “gas” currency, and is required to send transactions or perform actions on the network. Regular network users do not have to worry about separately buying VTHO though, as it is automatically generated in proportion to the amount of VET held. When a transaction is executed, 70% of VTHO is permanently destroyed (“burned”) and 30% is given as a block reward to Authority Node holders.

    This dual-token economic model was introduced to improve network economics. This system is designed to help developers on the network. Developers holding enough VET will be able to use the network for free, as the VTHO generated will be enough to pay for transactions. If a developer is developing a transaction-intensive app, they can also look to use the multi-party payment protocol.

    [wp-compear id=”5256″]

    In short:

    • Vechain Token (VET) serves as a reserve for economic staking and value transfer on the platform. VET can be “staked” in various economic nodes and generate VTHO which powers transactions on the network.
    • VeThor Token (VTHO) is the “gas” required to perform transactions and interact with smart contracts. Each time a transaction is made, VTHO is consumed and destroyed.

    Using and Storing Vechain

    Vechain can be stored safely on the VeChainThor Wallet which is available on smartphones (iOS and Android). The mobile wallet securely encrypts and provides keys to provide maximum security for Vechain holders.

    What are VeChain Nodes?

    Nodes are traceable wallets (such as the VeChainThor wallet) that have a specified minimum amount of VeChain stored inside. There are 2 types of nodes: Authority Nodes and Economic Nodes, both of which have their own requirements, functions, and benefits.

    Authority (Thrudheim) Nodes: Securing Vechain by Proof of Authority

    At the heart of Vechain are the 101 Authority Nodes that process and validate all the blockchain transactions, as well as govern the network via a voting mechanism. These Authority Nodes are selected by the Vechain Foundation and go through a full application and KYC procedure. As a reward, Authority Node holders receive the highest VTHO production rate and voting rights. Authority Nodes are generally owned by large enterprises and trusted individuals to ensure decentralized trust. Little is known about the identity of these Authority Node holders for security reasons, but several large enterprises such as DNV GL and PwC have come forward saying they hold Authority Nodes.

    Economic Nodes: Providing stability to the ecosystem through staking

    Economic Nodes do not validate blockchain transactions, rather they keep the Vechain ecosystem stable by keeping a certain amount of VET tokens in their VeChain Thor mobile wallet. There are different tiers of economic nodes and the more VET tokens staked for a longer period of time, the higher the rewards.

    To become a Normal Economic Node holder, a minimum of 1,000.000 VET for 10 days is required.

    More dedicated node holders can join VeChain’s X Node program which offer even more rewards. For X Node holders, holding a minimum of 600.000 VET at all times is required.

    There are 4 types of rewards depending on the type of Node held. These range from earning a sum of VTHO per day, rewards from the Company’s Foundation Reward Pool, to whitelist access to VeChain ICOs.

    Learn more about the various types of Nodes and rewards.

    History of Vechain

    VeChain started in 2015 with the establishment of its company in Shanghai. Founded by CEO Sunny Lu (ex-CIO of Louis Vuitton China), the Company has been developing enterprise-focused solutions based on its private blockchain. As the trend towards better decentralization occurred in the blockchain industry, VeChain migrated to a consortium blockchain before finally establishing the VeChain Foundation and starting their final migration to a Proof of Authority (PoA)-based public blockchain platform.

    The Foundation’s vision is to create greater market transparency and provide consumers with access to more detailed information about the products they buy, sell, and interact with. By having a full 360-degree view of the supply chain, with all components securely recorded and stored in a tamper-proof distributed ledger, retailers and manufacturers can be certain of the quality and authenticity of their products, guaranteeing consumers that what they are buying is really what they think it is.

    VeChain boasts partnerships and lives use cases with many notable partners, including DNV GL, PwC, Deloitte, Walmart China, BMW, BYD Auto, Bayer China, H&M, LVMH, ENN, AWS, PICC, ASI Group, etc.

    Key VeChain Partnerships

    DNV GL

    DNV GL was founded in 1864 and has 300 offices worldwide. They provide quality assurance services to companies in the maritime, oil and gas, and power and renewables industries.

    DNV GL issues Management System Certificates at the end of their inspection and certification process. This evidences that the company’s processes and products meet international standards.

    DNV GL Luca Crisciotti presenting benefits of Digital Assurance

    DNV GL is a partner and shareholder of VeChain. Both Companies share the belief that the future of assurance lies in blockchain technologyAt VeChain Summit 2019, DNVGL announced it has completely migrated its private blockchain to the VechainThor

    Since the partnership announcement, DNV GL has jointly developed several products including the Low Carbon Ecosystem and MyStory, a traceability and marketing solution. DNV GL has also reaffirmed its commitment to the VeChain ecosystem by migrating its private blockchain onto the VeChainThor public blockchain for its clients. DNV GL also gave each client a digital Non-Fungible Token (NFT) wallet so that each customer has a digital identity and can access and interact with the DNV GL ecosystem. Through this, DNV GL has issued more than 900,000 wallets, compared to Ethereum which only has 400,000 wallets.

    BMW

    In March 2018, BMW confirmed VeChain’s participation in the BMW Startup Garage Programme, a partnership program whereby BMW will work with the participant to develop their technology and purchase it for BMW’s use.

    During the 2019 VeChain Summit, it was confirmed that VeChain and BMW will jointly develop a DApp called VerifyCar for BMW cars. VerifyCar will record vehicle information onto the VeChainThor blockchain. Examples of information which will be recorded include a vehicle’s mileage, insurance and service records.

    Cihan Albay, Leader at IT Tech Office Singapore, BMW Group gives a presentation on VerifyCar

    PriceWaterHouseCoopers (PwC)

    PwC is known as one of the “Big Four” auditors. They are a network of firms in over 150 countries and provide services to 420 of the Fortune 500 companies.

    PwC has 3 major service lines:

    • Assurance providing financial audits;
    • Advisory on actuarial and insurance management solutions and human resource services; and
    • Tax planning and consultancy services.

    VeChain has partnered with PwC since May 2017 to jointly develop and promote the adoption of blockchain technology. After much speculation, details of their partnership were announced during a joint press conference with PwC and Walmart in June 2019. It was announced that Vechain and PwC were also working with Walmart China, and had launched the Walmart China Blockchain Traceability Platform built on the VeChainThor Blockchain. The Platform takes on the challenge of food safety by using VeChain’s technology to allow Walmart China to implement a traceability strategy for its products. Consumers can scan the products and would be able to view detailed information on the product, such as its source, logistics process, product inspection reports etc.

    At the time of the announcement, an initial 23 Walmart product lines were tested and launched on the Platform. By the end of 2020, it is expected that Walmart’s China’s traceability system will see traceable fresh meat account for 50% of its fresh meat sales, traceable vegetables will account for 40% of its total sales of vegetables, and traceable seafood will account for 12.5% of the total sales of seafood.

    Bayer China

    The partnership between VeChain and Bayer China, the Greater China arm of one of the world’s leading pharmaceutical companies was announced on 28th May 2020. VeChain has created CSecure, a clinical trial traceability platform to be used in Bayer’s research and development of medical interventions such as drugs and other treatments. Learn more about Vechain and Bayer’s partnership.

    Additional reading

    Check out VeChain Insider’s complete list of VeChain’s partnerships and details and our recap of the announcements at the 2019 VeChain Summit.

    FAQ

    What is VeChain?

    VeChain is a blockchain-enabled platform that provides a comprehensive governance structure, a robust economic model, and advanced IoT integration to help enterprises improve supply chain management, asset tracking, data management, and more.

    What are the benefits of using VeChain?

    VeChain offers a wide range of benefits, including improved transparency, enhanced security, improved traceability, increased efficiency, cost savings, and more.

    How does VeChain work?

    VeChain uses a combination of blockchain technology, smart contracts, and IoT devices to create an immutable, distributed ledger that can be used to track and manage assets, contracts, and data.

    What industries can benefit from VeChain?

    VeChain has applications in a variety of industries, including supply chain management, asset tracking, data management, healthcare, finance, and more.

    What is VeChain Thor?

    VeChain Thor is the native blockchain platform of VeChain, which enables users to develop decentralized applications (dApps) and smart contracts.

    Where can I buy Vechain

    Currently, the best exchange to trade both the $VET and $VTHO token is Binance – it has the most number of traders and highest liquidity. You can purchase VET on cryptocurrency exchanges such as Binance, Huobi, and OKEx.

    What is VeChain’s token?

    VeChain’s token is called VET, and it is used to power the VeChain network and reward users for their contributions.

    What is VeChain’s roadmap in 2023?

    The VeChain Foundation says the project’s developers plan to spend the first half of the year at work on a carbon footprint explorer, a wallet browser extension and an Ethereum (ETH) token bridge, among other projects.

    Resources:

    Website https://www.vechain.com

    Foundation: https://www.vechain.org

    Medium (update and key articles): https://medium.com/@vechainofficial

    Development Plan https://cdn.vechain.com/vechain_ico_ideas_of_development_en.pdf

    Telegram https://t.me/vechain_official_english

    Vechain Mainnet Launch Guide http://www.asiacryptotoday.com/vechain-mainnet-launch

  • Webinar 28th April: China’s Digital Currency DCEP

    Webinar 28th April: China’s Digital Currency DCEP

    We’re taking into a deep dive into what’s happening with China’s Digital Currency, DCEP with Matthew Graham from Sino Global Capital. China has recently place DCEP as a key global objective this year, effectively digitizing China’s National Currency, the RMB. We’re going explore what has been announced so far with DCEP, including the new apps from Agriculture Bank of China, initial partners such as McDonalds and prototypes. We’ll also explore what DCEP means for the cryptocurrency community – after all DCEP borrows a lot from Bitcoin and Blockchain Technology.

    Matthew is the CEO of Sino Global Capital. He has seven years of mainland China investment banking and four years of blockchain sector experience. As CEO of Sino Global Capital, Matthew focuses on the fintech sector including the Liquid Value “crypto hedge fund”. In his previous role he was a Managing Director at CBC, a Chinese private equity fund with limited partners that included TCL and the cities of Shenzhen and Chongqing.

    Event Time: Tuesday April 28th 2020, 13:00 UTC

    Online Registration: https://www.eventbrite.com/e/103627964030/

  • Top Chart Patterns Every Crypto Trader Should Know

    Top Chart Patterns Every Crypto Trader Should Know

    Chart patterns are an integral aspect of Technical Analysis, but they require some getting used to before they can be used effectively. A chart pattern is a shape within a price chart that helps to suggest what prices might do next, based on what they have done in the past. Chart patterns tend to repeat themselves and can give you a real competitive advantage in the markets if you are able to learn to recognize them.

    The market is constantly changing. In many cases, it does not matter how you feel about it, it only matters how the market is going to feel about it.

    Market sentiment is a critical indicator to predict price movements and make investment decisions. An easy way to gauge market sentiment is by looking at chart patterns. They tend to repeat themselves, and once you are able to recognize them, it becomes easier to strategize your entries and exits.

    However, it is important to note that they are NOT a guarantee that the market will move in that predicted direction. It should only serve as a frame of reference for you to feel how the market moves.

    The most important thing to remember when using chart patterns as part of your technical analysis is that they are not a guarantee that a market will move in that predicted direction, they are merely an indication of what might happen to an asset’s price. Below are some of the most common chart patterns studied by technical analysts as they appear on the Bitcoin/USD chart:

    1. Head and Shoulders

    This is a bullish and bearish reversal pattern that has a large peak in the middle and smaller peaks on either side. The Head and shoulders pattern is considered to be one of the most reliable reversal chart patterns. This pattern is formed when the prices of the stock rise to a peak and fall down to the same level from where they had started rising. Again, the prices rise and form a peak higher than the last peak and again it declines to the original base. Prices again rise to form a third peak, which is lower than the second peak and from here it starts declining to the base level. When the prices break the baseline with volume then a bearish reversal takes place.

    Head and shoulders is a chart pattern in which a large peak has a slightly smaller peak on either side of it. Traders look at head and shoulders patterns to predict a bullish-to-bearish reversal. Typically, the first and third peak will be smaller than the second, but they will all fall back to the same level of support, otherwise known as the ‘neckline’. Once the third peak has fallen back to the level of support, it is likely that it will break out into a bearish downtrend.

    Head and Shoulders
    Head and Shoulders

    2. Double Top

    A double top is a bearish reversal pattern that traders use to highlight trend reversals. The price forms a peak and retrace back to a level of support. It will then climb up once again before reversing back more permanently against the prevailing trend. A double top is a bearish pattern as it signifies the end of an uptrend and a shift towards a downtrend.

    Double Top
    Double Top

    3. Double Bottom

    A double bottom is a bullish reversal pattern that is opposite to the double top. Price forms a peak and then retrace back to a level of resistance. It then forms a peak once more before reversing back from the prevailing trend. A double bottom is a bullish reversal pattern, because it signifies the end of a downtrend and a shift towards an uptrend.

    Double Bottom
    Double Bottom

    4. Wedges

    Wedges are bullish and bearish reversal as well as continuation patterns which are formed by joining two trend lines which converge. There are two types of the wedge, rising and falling. Both rising and falling wedges are reversal patterns, with rising wedges representing a bearish market and falling wedges being more typical of a bullish market.

    • A rising wedge is represented by a trend line caught between two upwardly slanted lines of support and resistance. This pattern generally signals that an asset’s price will eventually decline more permanently, which is demonstrated when it breaks through the support level.
    • A falling wedge occurs between two downwardly sloping levels. This pattern is usually indicative that an asset’s price will rise and break through the level of resistance.
    Wedges
    Wedges

    5. Cup and Handle

    The cup and handle pattern is a bullish continuation pattern that is used to show a period of bearish market sentiment before the overall trend finally continues in a bullish motion. The cup appears similar to a rounding bottom chart pattern. Following the cup, the price of an asset will likely enter a temporary retracement, which is known as the handle because this retracement is confined to two parallel lines on the price graph. The asset will eventually reverse out of the handle and continue with the overall bullish trend.

    Cup and Handle
    Cup and Handle

    6. Pennants

    A pennant pattern or a flag pattern is created when there is a sharp movement in the price either upward or downward. This is followed by a period of consolidation that creates the pennant shape because of the converging lines. Then a breakout movement occurs in the same direction as the big stock move. At the initial stock movement there is a significant volume which is followed by weaker volume in the pennant section and then rise in the volume at the breakout. Pennants can be either bullish or bearish, and they can represent a continuation or a reversal.

    Pennants
    Pennants

    7. Triangles

    Ascending Triangles

    The ascending triangle is a bullish continuation pattern which signifies the continuation of an uptrend. It can be drawn onto charts by placing a horizontal line along the swing highs, which acts as the resistance, and then drawing an ascending trend line along the swing lows, the support. Eventually, the trend breaks through the resistance and the uptrend continues.

    Ascending Triangles
    Ascending Triangles

    Descending Triangles

    Just like the ascending triangle, the descending triangle is also a continuation chart pattern. The only difference is that it is a bearish continuation pattern and it is created during the downtrend. They generally shift lower and break through the support because they are indicative of a market dominated by sellers. Descending triangles can be identified from a horizontal line of support and a downward-sloping line of resistance. Eventually, the trend breaks through the support and the downturn continues.

    Descending Triangles
    Descending Triangles

    Symmetrical Triangles

    Symmetrical Triangles are continuation chart patterns that are developed by two trend lines which converge. The symmetrical triangle pattern can be either bullish or bearish, depending on the market. In either case, it is normally a continuation pattern, which means the market will usually continue in the same direction as the overall trend once the pattern has formed. However, if there is no clear trend before the triangle pattern forms, the market could break out in either direction. This makes symmetrical triangles a bilateral pattern, meaning they are best used in volatile markets where there is no clear indication of which way an asset’s price might move.

    Symmetrical Triangles
    Symmetrical Triangles

    8. Chart Patterns to Identify Market Manipulation

    The “Bart Simpson” Pattern

    When we look at the Bitcoin chart in small time frames, one can identify sudden movements or ‘bump’ in one direction, followed by consolidation and a sudden ‘bump’ in the other direction that ends close to the base price. This phenomenon has given the name “Barts” because the asset’s price pattern looks like the head shape of the iconic Simpsons character, Bart Simpson.

    It is a familiar occurrence for Bitcoin, one noticed by investors time and again during volatile trading stretches. It appears as a result of hundreds-of-Bitcoin orders in a matter of minutes. The reason for these sudden pumps and dumps is likely to liquidate crypto margin traders, whether short or long, by manipulating the market. While some believe that this is done by the exchanges themselves, which is entirely possible due to the lack of regulations, this might be related to large crypto traders, commonly known as ‘whales.’

    Bart Simpson pattern
    Bart Simpson pattern

    Wyckoff Pattern

    The Wyckoff Pattern was first brought to light by Youtuber “Uncomplication” to unearth potential market manipulation by whales. The pattern was developed by Richard Demille Wyckoff, an early 20th-century pioneer in the technical approach to studying the stock market. The pioneering work of Richard D. Wyckoff was centered around the realization that stock price trends were driven primarily by institutional and other large operators who manipulate stock prices in their favor.

    Wyckoff proposed a heuristic device to help understand price movements in individual stocks and the market, which he dubbed the “Composite Man.” Wyckoff advised retail traders to try to play the market game as the Composite Man played it. The Composite Man attracts the public to buy a stock in which he has already accumulated a sizeable amount. Wyckoff and his associates believed that if one could understand the market behavior of the Composite Man, one could identify many trading and investment opportunities early enough to profit from them. Using Wyckoff’s method, one can invest in stocks by capitalizing on the intentions of the large “smart money” interests, rather than being caught on the wrong side of the market. 

    The Bottom Line

    Technical analysis can give cryptocurrency traders an insight into the past of crypto, facilitating future predictions. But sole reliance on technical analysis ignores sentiment or news. This is particularly problematic with cryptocurrency trading since factors like mining hash rates and governmental regulations can have significant impacts on the market.

    What is technical analysis?

    Technical analysis is a method of analyzing the price movements of a security or asset over time. It uses charts and other tools to identify patterns and trends in order to make predictions about future price movements.

    How does technical analysis work?

    Technical analysis works by looking at past price movements and using these to predict future price movements. This is done by looking at patterns in the data such as support and resistance levels, trend lines, and chart patterns.

    What are the advantages of using technical analysis?

    Technical analysis can be used to identify potential trading opportunities and to help traders make informed decisions. It can also help traders manage risk by identifying areas where they should exit their positions.

    What is support and resistance?

    Support and resistance are levels on a chart where the price of an asset has difficulty either breaking through or falling below. These levels can be used to identify potential entry and exit points for trades.

    What is a chart pattern?

    A chart pattern is a specific pattern that appears on a chart. Common chart patterns include head and shoulders, double tops and bottoms, and triangles. These patterns can help traders identify potential trading opportunities.

    How can technical analysis be used in cryptocurrency trading?

    Technical analysis can be used to identify potential trading opportunities in the cryptocurrency markets. By looking at past price movements, traders can identify patterns and trends that can be used to make predictions about future price movements.

    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.

  • XFai ($XFIT): Can it resolve the liquidity and gas fee issues in DeFi?

    XFai ($XFIT): Can it resolve the liquidity and gas fee issues in DeFi?

    XFai is a decentralized oracle service provider that aims to address liquidity and gas issues in decentralised exchanges (DEXs) through a so-called DEX Liquidity Oracle which will revolutionise cryptocurrency trading whilst reducing gas fees.

    If you are a regular DEX trader, you might notice that there are times when you can’t complete trades. This happens often with small-cap tokens that do not have enough liquidity. In this case, traders have two options, either to wait it out until there’s enough liquidity or to increase price slippage tolerance. But either way, it can result in huge losses on the part of a small-cap token holder.

    XFai wants to address this problem by empowering DEXs with liquidity that can be supplied to small-cap tokens. This equalizes the playing field for every single trader, allowing them to execute their strategy without having to shoulder massive costs just because a DEX might not have enough liquidity on any particular trading pair.

    Check out our interview with XFai’s Chief Scientist, Taulant Ramabaja.

    Background

    The problem with many DEXs today is liquidity. While liquidity pools and profit-generating DeFi systems like yield farming have offered revolutionary solutions in the last year or so, DEXes still face this concern. This leaves many traders vulnerable to huge price slippages and losses. And if the issue persists, cryptocurrency traders might be discouraged and go back to trading mostly on centralized exchanges despite having less options.

    This is what XFai worked is trying to solve.

    XFai, which was co-founded by Geoffrey Khan, was developed in order to deal with the problems hounding DeFi markets today. It has gained a substantial amount of support, garnering investments from companies like AU21 Capital, LD Capital, and Roger Ver, one of the earliest adopters of blockchain technology and the CEO of Bitcoin.com. It is also worth mentioning that they were able to generate over $3.8 million within the first 12 hours of their private sale.

    What is XFai?

    XFai is a decentralized oracle service provider with the aim of addressing liquidity and gas issues in DEXs through a DEX Liquidity Oracle (DLO). This means that the protocol’s role is not only limited to supplying data to price feeds and engaging with smart contracts, but is also capable of actively providing and managing token liquidity in partner DEXs such as Uniswap.

    The primary goal of the project is to support small cap tokens and token holders by establishing a system that helps them earn better rewards. In other words, the project seeks to help them gain as much in incentives as they can, just like how a holder of a large cap token does.

    DEX Liquidity Oracle

    XFai’s DLO is powered by the XFai smart contract, which allows users to stake small cap tokens that can later be supplied to Uniswap pools according to corresponding price ranges and existing orders. The biggest trades facilitated on Uniswap exchanges will be provided with the liquidity collected from the DLO.

    This does not just benefit large volume trades for small cap tokens, but also those who supply liquidity on the same tokens. They receive rewards when they do so as well. The good thing about DLO is that it does not require liquidity providers to supply all the assets supported in a liquidity pool. They can choose to simply supply a single token in a pool, which also mitigates the risks of impermanent loss on their end.

    What supports this function further is its real-time price feed from centralized exchanges. Furthermore, the liquidity from the DLO is easily accessible to DEXs, addressing the issue on price slippage. This is exactly the goal of the XFai team, to support the current DEXs in the market and not to present itself as a competitor.

    How Does XFai Work?

    First, the user has to add tokens on the DLO liquidity vault/pool. The DLO is governed by a smart contract that also sends the tokens to partner DEXes when liquidity is needed. Note that users do not need to supply multiple assets at a time anymore, thereby reducing their exposure.

    Second, the DLO looks into the data from existing order books from other exchanges to determine existing prices and trading volume. Then, it comes up with a synthetic curve which they will use in order to pair DLO liquidity with partner DEXs.

    Then, there is a smart contract that governs how and when liquidity is supplied to a DEX using the synthetic curve. The goal of the contract is to ensure that enough liquidity is met by AMMs in order to avoid price slippage while allowing small cap token holders to supply liquidity without incurring impermanent loss.

    XFIT Token

    XFIT token is XFai’s native, utility token, which can be used as a medium of exchange, store of value, and means of payment for transaction fees. But more than that, it also has governance and reward functions. Liquidity farming is accessible in XFIT and all other DLO pairs.

    To start liquidity mining, holders can stake their tokens in select pools to earn proportional rewards. Each time the DLO profits from the trades conducted by its platform users, token holders earn additional XFIT. They can either redeem XFIT tokens to be later sold to the market, or they can decide to return their rewards back to liquidity pools in order to increase their stake position.

    In addition, XFIT token holders are also entitled to discounts on transaction fees if they use XFIT. They can also make direct swaps from XFIT to any other token in the protocol as long as they are supported by the DLO.

    XFai Liquidity Generation Event: How to stake XFIT

    The XFai liquidity generation event is a way to allow users to become involved with XFai’s XFIT token early, and stake them in the liquidity pool in order to earn increased, sustained yield throughout the launch period.

    To participate, users can go on the XFai website and click on “Farm”, then choose your preferred pool. Note that the APY is synced for all pools so they earn the same amount of APY as each other. Then click “Connect Wallet” to connect using MetaMask, once connected the dashboard will automatically calculate how much XFIT you can purchase with the amount in your wallet. Select the amount you want to stake and hit “Farm”.

    Whilst farming, you have the option to either Add to Farm, which allows you to increase your stake or Harvest, which allows you to claim your XIFT rewards.

    To claim your rewards, click “Harvest” and you would be presented with the option to Harvest XFIT or Harvest XFIT and unstake. Harvest XFIT allows you to claim the XFIT tokens gained into your wallet whilst keeping the staked amount in the liquidity pool to keep farming more XIFT rewards. On the other hand, Harvest XFIT and unstake means you can claim your XFIT rewards and unstake the staked amount (or any part of it) from the pool.

    The XFai LGE will be from 16th April to 7 May 2021.

    For a full guide on how to farm XFIT, click here.

    Conclusion

    Perhaps one of the largest factors that stop people from completely shifting their cryptocurrency trading activities to DEXs is the liquidity problem, apart from the fees. It is difficult to execute trades with low liquidity and even if they often do, sometimes, it takes multiple slippage tolerance adjustments before a trade gets to be completed.

    While this can look trivial for some people, this is something that can’t be neglected. If XFai takes off, the DeFi space might experience a better market situation. If traders do not have to be burdened by price slippages and if liquidity further improves through the same solutions the XFai team did, DEXs can be even more alluring to everyone, which would help speed up adoption.

    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.

  • Newsletter #17: Bitcoin markets choose between good and bad news

    Newsletter #17: Bitcoin markets choose between good and bad news

    Do you want to hear the good news…or the bad news first? This has been an age old question which the Bitcoin markets had to grapple with this week. As we will see below, there IS a correct answer to this…but has Bitcoin chosen wisely?

    All I want for Christmas is a Ledger!

    Ledger is doing a crypto starter bundle! Get a USD$25 voucher to buy crypto with every Ledger Nano X purchase! Limited to 5,000 vouchers and only available until 29th December 2020!

    Gift yourself or your family a bundle they truly want! Say NO to hand cream gift sets and socks!

    Check out our Ledger Nano X review and CLICK HERE TO BUY!

    Give better gifts this Christmas!

    Market Sentiment: Going sideways?

    This week’s market price action wasn’t very exciting, with Bitcoin and Ethereum mostly going sideways. On 12th December 2020, we saw a reaction that is still continuing today and has brought $BTC back to the $19000 area and $ETH closer to $600.

    Both coins are still at weekly resistances trying to build momentum around the 21 EMA (Exponential Moving Average) on the daily chart. We could expect another attempt to pass ATH in the next few days!

    Key news this week

    Big investors keep accumulating

    Big funds/companies are buying and accumulating Bitcoin and Ethereum.

    Massachusetts Mutual Life Insurance Company (MassMutual), has just bought $100M of $BTC through NYDIG, a fund management company in New York. This is reportedly their first Bitcoin purchase and is equivalent to less than 1% of their entire investment account worth around USD $235 billion.

    Grayscale has also increased their holdings. Whilst they are not new to investing in crypto, they have just bought another 130000ETH, reaching a total of 3 million tokens in their accounts.

    Microstrategy announced they had completed “a $650M offering of 0.75% Convertible Senior Notes Due 2025”, to invest in $BTC in accordance with their reserve policy. A few days earlier, the CEO Michael Saylor, tweeted that they hold approximately 40,824 Bitcoin.

    The interest in crypto by financial giants points to increased demand from the wealthy as a form of diversification and are them betting on prices to increase in the future.

    Mt. Gox’s reimbursement deadline approaching

    15th December 2020 will mark the next deadline for Mt. Gox Exchanges’s creditors to hopefully get back what they lost on the platform. The Exchange, one of the most known at the time and launched in 2010, ceased to operate in February 2014 after filing for bankruptcy. A whopping 860,000 $BTC were “missing” of which 200,000 has been “recovered” (and this does not even include other cryptocurrencies which also went “missing”). In 2015 new evidence by Tokyo security company WizSec showed that “most or all of the missing bitcoins were stolen straight out of the Mt. Gox hot cryptocurrency wallet over time, beginning in late 2011.”

    Users of the platform should expect to receive a total of 140,000 $BTC ($2.6 billion dollar worth) which are now in the hands of Nobuaki Kobayashi, the Japanese lawyer in charge of the process.

    Nothing is certain however as the refund deadline had been already postponed several times in the past, the last of which was in October 2020. There is also a serious concern in the market as to the possible consequences of a large Bitcoin market sell-off by victims when they receive their funds after 6 years. Considering Bitcoin in 2014 was worth less than $1000, this would represent now a roughly 20x on their re-acquired funds!

    Thoughts on the Mt. Gox refund

    Singapore’s DBS to launch digital exchange with crypto

    After rumors appeared a few months ago, it is now official: Singapore’s DBS will be the first bank to launch a digital currency exchange.

    The platform will only be open to institutional and accredited retail investors. There will be 4 major tradable cryptocurrencies: $BTC, $ETH, $XRP and $BCH, paired with 4 FIAT currencies: USD, SGD, HKD AND JPY.

    The Exchange will also offer Security Token Offerings (STO) and a platform for tokenized assets like bonds, private equity funds, real-estates and so on. DBS Chief Executive Piyush Gupta said:

    “I believe that the time is right for this”, and added “We are on the cusp of a massive tokenization and therefore you’ll find tokenization of all kind of assets around the world and I think more and more exchanges will start dealing with the tokenized assets”.

    U.S. Congressmen manifesting doubts on new self-hosted wallets regulations

    A couple of weeks ago we mentioned that Coinbase CEO Brian Armstrong was concerned regarding rumors that the U.S Treasury was planning to impose regulations on self-hosted cryptocurrency wallets.

    Self-hosted wallets, whether online (hot) like Metamask or offline (cold) wallets like Ledger and Trezor, let you retain personal and total access to your funds, without any intermediary entities or third parties. The owner possesses their own private keys and takes full responsibility of their funds. Most importantly, wallets don’t usually need KYC procedures to set up. Learn more about hot and cold wallets, and their pros and cons.

    Armstrong stated his thoughts (shared by many other prominent names in crypto space), among which the possibility that regulations could result in being more harmful than anything else. This is because it could essentially exclude those who cannot obtain the documents and proofs for regular KYCs, and those are usually the most disadvantaged groups who may already be excluded from the financial system. Furthermore, this proposal could be a step back in innovation by the US, leading companies and users to bypass them for other countries.

    A few days ago Warren Davidson, U.S. Congressman serving Ohio’s 8th District, together with a few colleagues, embraced these opinions by sending a letter to U.S Treasury. The letter also points out that “multiple reports have shown that digital assets are not widely used by illicit actors”.

    Warren Davidson’s letter to the US Treasury

    What about Europe?

    Meanwhile in Europe, the development of the digital Euro continues. However sources have indicated that the French Finance Ministry is preparing “to not only harden know-your-customer (KYC) rules for crypto firms but also regulate crypto-to-crypto transactions, according to Simon Polrot, president of French crypto association ADAN.”

    This apparently comes as a response to recent terrorist attacks when 29 people were arrested for illegal terrorism funding via cryptocurrencies.

    Other key news

    • Canada has become the first country to have an Ethereum-based Fund listed on a major stock exchange. The Ether Fund (TSX:QETH.U) is offered by 3iQ Corp, a digital asset manager based in Toronto. The Ether Fund is trading at around $11 per share today.
    • The second giveaway of DCEP (China’s National Digital Currency) has kicked-off on in Suzhou, China, on 12th December 2020 for 10,000 winners. Last week, the Hong Kong Monetary Authority (HKMA) also confirmed it is working with the Digital Currency Institute of the People’s Bank of China on technical pilot testing of DCEP for cross-boarder payments between Mainland China and Hong Kong. You can read more in our article.
    • Messari, a leader crypto Research and Data company, has recently listed their take on the “top 10 people to watch in 2021”

    $YETI Index: the Yearn ecosystem in one token

    After all the recent announced collaborations between the Yearn Finance team and many other big Defi projects, such as Cover Protocol ($COVER) or Sushiswap ($SUSHI), the Yearn Ecosystem Token Index, $YETI, has been created by Powerpool ($CVP).

    The Index comprises of 8 tokens: $YFI, $SUSHI, $CREAM, $AKRO, $COVER, $K3PR, $CVP, $PICKLE with a proposed weighted distribution of 35% for $YFI, 17% for $SUSHI and 8% each for the rest. So investors now have the chance to invest in the entire Yearn ecosystem in one token, receiving “cash flows from Vault strategies applied to composite tokens, and vote on proposals in the Yearn ecosystem governance using PowerPool’s meta-governance approach.” It will also allow holders to save on gas fees which would be normally required to stake multiple tokens.

    Speaking of $YFI, this week we have also witnessed the first gasless (for users) transaction vault deposit on Yearn.Finance.

    Red flags of the week

    DeTrade Fund, first case of deep-fake in crypto?

    DeTrade Fund, a supposed upcoming arbitraging and front-running Defi project has vanished with 1450ETH a few hours before listing.

    The team appeared to be non-anonymous, with public Linkedin profiles, a publicly registered company, a Twitch profile and a video where the “CEO” Mark Jensen, spoke to the community. The video has quickly become famous on crypto Twitter with the community suspecting it was a deep-fake used by crypto hackers. Another theory circulating around the community is that the hackers hired an actor to impersonate the CEO.

    Video from DeTrade “CEO” Mark Jensen

    Through two rounds of presale investments, the DeTrade fund team managed to raise a remarkable amount of 1,450 $ETH in a few hours. Their contracts were audited by Solidity Finance which immediately raised a few concerns in their audit report, assessing that the team was in charge of too much power over users’ funds. It is likely that the team took advantage of this and stole the presale funds sometime between the second presale and the official listing which should have taken place a few hours after. (Tramadol)

    Several hours later and probably because someone was able to trace the misappropriated funds, 70% of the stolen $ETH was sent back to investors via internal transactions.

    This “partial return is becoming more and more common in DeFi attacks. For example, Eminence’s hacker sent back 50% while Harvest Finance users only received 10% of their amount back.

    $12 million have been stolen by Compounder Finance

    On 1st December 2020, Compounder.Finance ($CP3R), a clone of Harvest and Yearn Finance, has “pulled the rug”. It looks like the anonymous team behind the project is the one to blame.

    Compounder had been audited by Solidity Finance. In chat logs between the two companies we can see that Solidity Finance pointed out that the project’s Treasury contract and updating of strategy pools is controlled by their team. Solidity Finance also pointed out that they felt this fact should be disclosed in their audit report. The exploit was exactly as pointed out by Solidity Finance. After the audit, the withdraw function was swapped with a malicious one which was later used to drain all the money in the contract to their deployer address. Nobody recognized the fraud in time so users were not able to withdraw their funds.

    The attack is composed by 4 steps and is explained in details in this post-mortem by developer Vasa and Solidity Finance.

    It is not the first time that an audited project suffered a hack and we all know quite well by now that Audits cannot guarantee 100% safety. This should always be reminded.

    A known developer of the Defi space and owner of Defiyield.info was also a victim of the attack. He is also investigating the matter and working towards filing a case with the relevant enforcement authorities.

    Fake Deriswap tokens

    Malicious actors have recently created various fake Deriswap tokens to take advantage of the hype surrounding this latest experiment from Andre Cronje. The malicious actors would create tokens with similar names to Deriswap and approve it for trading on Uniswap to entice people to buy.

    Let’s remember that Deriswap doesn’t have any official token at the moment!

    Boxmining happenings

    • Libra is now Diem! Everything you need to know on Facebook’s cryptocurrency!

    Diem ($DIEM) – Facebook’s Libra 2.0

    • In case you missed it check out our podcast interview with Geralt of CyberFi where we discussed automated trading, Ethereum interactions such as unstaking and more.
    • Velo Protocol is building out the biggest payment network in South East Asia with its partnership with Lightnet and Visa. The end goal is to create payment solutions for the under-served micro, small and medium enterprise lending market in Asia.
    The next XRP killer? Velo Protocol is making HUGE moves

    Click here for back issues of our newsletters!

    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.

  • ERC 1155 Defined: What are ERC-1155 tokens?

    ERC 1155 Defined: What are ERC-1155 tokens?

    ERC-1155 is a digital token standard created by Enjin that can used to create both fungible (currencies) and non-fungible (digital cards, pets and in-game skins) assets on the Ethereum Network. By using the Ethereum network, ERC-1155 tokens are secure, tradable and immune to hacking. To find out more about the specifications of the ERC-1155 standard, check out EIP 1155.

    ERC-1155 a new way of creating tokens that allow for more efficient trades and bundling of transactions – thus saving costs. This token standard allows for the creation of both utility tokens (such as $BNB or $BAT) and also Non-Fungible Tokens like CryptoKitties.

    For more information about the creators of ERC-1155, check out our Enjin Coin Guide.

    ERC-1155 includes optimizations that allow for more efficient and safer transactions. Transactions could be bundled together – thus reducing the cost of transferring tokens. ERC-1155 builds on previous work such as ERC-20 (utility tokens) and ERC-721 (rare one-time collectibles).

    Summary

    • ERC-1155 tokens were developed by Enjin.
    • It is a way of creating both fungible (currencies) and non-fungible (digital cards, pets and in-game skins) assets.
    • They can be used to represent assets or items across Enjin’s ecosystem of blockchain games. So one asset can be used in multiple games.
    Most Expensive ERC-1155 Assets in Existence. These are traded on Enjin’s marketplace

    What are Fungible vs Non-Fungible vs Semi-Fungible Tokens?

    Fungible tokens: ERC-1155 can be used for the creation of fungible tokens- utility coins that act as currency for various platforms. The advantage of ERC-1155 is that it allows the creation of many different tokens under the same contract (with ERC-20, a new contract needs to be deployed for every token). ERC-1155 is more suitable for multi-token economics, for example if a project has one token is designated as a security token (STO) and another Utility token.

    Non-Fungible Tokens (NFTs): NFTs can take the from of digital collectible cats (such as crypto kitties) or video game weapons. What sets NFTs apart is that each token is unique.

    Every Cryptokitty is unique – they cannot be exchange with each other (ie non-fungible)

    For example, every cryptokitty is unique with different stripes and patterns. This means that cryptokitties are not “fungible”, and cannot be replaced with one another (imagine if someone swapped your pet cat with another – you’ll notice the difference immediately). When it comes to cryptocurrencies, this property of being unique and not swap-able is called “non-fungible“.

    Non-Fungible Tokens Explained

    With ERC-1155, NFTs hold unique metadata which can be modified with time. For example, this metadata can hold information about the lineage of a cryptokitty.

    For more information about the creators of ERC-1155, check out our Enjin Coin Guide.

    An Amazon Gift card could be a “semi-fungible” token

    Semi-fungible tokens: This a new type of token that could “seat a concert” or a “$50 dollar Walmart coupon”. In the case of a Walmart coupon, each token is fungible (same as each other) until the token is redeemed or used in store. Once a coupon is redeemed, it no longer holds value and hence shouldn’t be traded as a normal token. In this example, the coupon is “fungible” until it is redeemed (“non-fungible”), hence the name semi-fungible token.

    Superior Design

    The superior design of ERC-1155 Crypto Items allows for a swap of any amount of tokens in only 2 simple steps (source: EnjinCoin Blog)

    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.

  • SushiSwap ($SUSHI) Explained

    SushiSwap ($SUSHI) Explained

    Before we begin

    We’ve been closely following the events involving SushiSwap and its founder “Chef Nomi”. This article will not be making any comments or conclusions on Chef Nomi’s actions or how SushiSwap is or should be run. This article is simply an explainer on what SushiSwap is and how to use the platform. As with all yield farming projects, SushiSwap involves a huge amount of risk. Anyone intending to participate in yield farming should do full research and consider carefully the risks involved beforehand.

    What is SushiSwap ($SUSHI)?

    SushiSwap is the newest decentralised finance (DeFi) liquidity pool platform. With SushiSwap, people can add their tokens into the liquidity pools and earn. In this article, we’ll have a look at the Sushi Swap platform and how to participate in the liquidity pool. Anyone can participate.

    Sounds interesting? Let’s dive into it.

    Summary

    • SushiSwap is a platform that allows anyone to provide liquidity. In return, the person gets rewarded with token(s) and SUSHI tokens. 
    • As of September 4, 2020, there are 1 billion dollars of locked liquidity.
    • Possibility of very high APY (up to 1,000%) on some liquidity pools. You can check the current yields on SushiBoard.

    Why is SushiSwap so popular?

    Sushi Swap markets itself as an “improved and community-friendly” Uniswap. Unlike a traditional exchange like Binance where they employ market makers, SushiSwap is a community-oriented platform where users provide liquidity. In return, they get rewarded. Indeed, the users are the market makers.

    SUSHI token

    SUSHI tokens are given as rewards for liquidity mining. The token allows its holders to participate in the governance of the platform and entitles them to a portion of the fees paid to the protocol by traders. For the governance of the platform, SUSHI holders can submit a SushiSwap Improvement Proposal (SIP) which token holders can vote on with their tokens.

    Of course, some people also speculate on the prices of SUSHI and the token can be traded on major exchanges such as Binance, FTX and OKEx exchanges.

    Advantages of SushiSwap

    There is no KYC (Know Your Customer) policy. This means anyone can trade and contribute to the liquidity pools. The platform is permissionless, meaning anyone can contribute millions of dollars without asking for permission. 

    Earn tokens from Sushi Swap. SUSHI is Sushi Swap’s native token. When you contribute to the liquidity pool, you earn sushi tokens. You can exchange SUSHI for ETH. 

    Sushi Swap model: 0.25% go directly to the active liquidity providers and 0.05% get converted back to SUSHI and is rewarded to sushi holders. 

    Sounds interesting? Let’s visit Sushi Swap’s home page.

    SushiSwap beginners guide 

    When you first arrive on Sushi Swap’s home page, you’ll see this:

    Click on “Unlock Wallet” or “See The Menu”, either way you will need to connect your ETH wallet in order to this platform. 

    Sushi Swap has the option to use MetaMask, WalletConnect or many other non-custodial wallets. Pick the one of your choice.

    Connect wallet
    Connect wallet

    Give permission for Meta Mask or Wallet Connect to connect to Sushi Swap. Once you’re connected, you’re ready to add your tokens into the liquidity pools. (hummingbirddental.ca)

    You’re presented with various liquidity pools (LPs). Each liquidity pool has a different annual percentage yield (APY).

    In this example, I’ll contribute to the ETH-USDT pool. I add my USDT into the liquidity pool. In return, I’ll get a percentage of USDT and SUSHI tokens. Think of Sushi Swap as a “community revenue share” model.

    To contribute to the liquidity pool, click “Approve USDT-ETH UNI-V2 LP” and give your Meta Mask permission to move your tokens into the liquidity pool. 

    Now what? You wait. The “SUSHI earned” box should populate with your earned SUSHI. You can withdraw your SUSHI token anytime by clicking on “Harvest”.

    2020 roundup and new roadmap!

    Many things have happened within the Sushiswap ecosystem in the last months: it is now time for a quick recap and to look at what the future will bring to this project!

    The number of all the partnerships finalized by the protocol is countless, but one of the most important ones, if not the most important, is certainly the merger with Yearn. The news also sparked controversies: Sushiswap was still considered a sort of “copycat” of Uniswap by some, and when Andre Cronje (Yearn’s father) wrote an article on how it is difficult to build in Defi and how conversely it is easy for anyone to just copy other people’s code, this wasn’t seen as really coherent. The collaboration was born to allow the two teams to cooperate on Deriswap.

    Nevertheless, Sushiswap has been evolving so much that, according to Mira Christanto (one of Messari’s data analysts) they have “put their past behind” and, not being backed by Venture Capitals, they can move faster than competitors. January has seen a real growth in Sushiswap’s TVL (now at $2.1 billion), mostly at the expense of Uniswap’s.

    Among the important milestones in 2020, we find Onsen, the new Sushiswap liquidity mining incentivization program which replaces the old Menu of the week. It brings communities together into the ecosystem and allows voted tokens to become accredited and participate in the mining program. The website also has a new layout of and a lite version.

    2021 Roadmap

    As the new year has already begun, it is also interesting to have a look at what Sushiswap is working on for 2021. The team released a long and detailed roadmap in early January. Notable upgrades are the following:

    • Mirin will be the new upgraded version of Sushiswap’s V3 protocol. It will include many new features like franchised pools, double yield, dynamic yield rebalancing, and many more as you can read here.
    • Bentobox (which should have launched in January) was born in the team’s mind as a new Lending Platform. While they were was working on its code though, it became something more. In simple terms, it will be a single vault that holds all tokens for any protocols and future extensions. It will support several oracles and it will also benefit all the $SUSHI holders.
    • Miso (Minimal Initial Sushi Offering) will be a sort of token launchpad, designed to drive new projects’ launches on the platform. It will include crowd sale options, IDOs (Initial Dex Offering), auctions, and more. We could think of it as something similar to Binance’s launchpad.
    • As Ethereum fees are and will keep growing in the next future until ETH2 will be a reality, most platforms are studying alternative solutions for their users such as Layer 2 possibilities. Unlike Uniswap, which is working on Optimistic Rollups, Sushiswap decided to move in sync with the greater Yearn ecosystem and thus will probably offer Zk-rollups options.

    Together with all these big news, Sushiswap is also planning to move to a new domain as the old one, in their view, is not enough to describe the diversity of the platform anymore. A transition to a fully decentralized governance structure is also planned by the end of 2021. Last but not least, Sushiswap has created a proposal page for people to express their ideas on what they would like to see on the platform. Everyone can be a chef is the place where you can voice your opinion if you like to suggest new ideas.

    FAQs

    Is it risky to provide liquidity to SushiSwap?

    The pool could get hacked if the code isn’t audited. There have been cases of hackers draining funds from smart contracts. It helps if the code is audited by a reputable firm. In the case of SushiSwap, it has been given a “security review” (not an audit) by Quantstamp. 10 issues were identified but they do not appear to be fatal. Subsequently, Peckshield had completed an audit on SushiSwap. They found no critical or high severity issues relating to business logistics but 2 high severity opsec issues that need to be fixed through extra care with deployment.

    What is the reward model of Sushi Swap?

    0.25% go directly to the active liquidity providers and 0.05% gets converted back to sushi and is distributed to active SUSHI holders.

    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.

  • YFV Finance Yield Farming

    YFV Finance Yield Farming

    YFV (YFValue) is a YEarn inspired governance token that is rewarded to cryptocurrency yield farmers (also known as liquidity miners). YFV functions as a DeFi Yield aggregator – they will release a “Vault” like product which will deploy different strategies to farm DeFi yields. $YFV in the governance coin on the platform which will be used to vote on Decentralized Autonomous Organisation (DAO) decisions. YFV sets itself apart by also minting two elastic supply coins, $vUSD, and $vETH – coins that will rebase to target the price of USD and Ethereum respectively. These tokens will function similar to “Ampleforth” in terms of rebasing functionality. The team behind the project has chosen to remain anonymous.

    The official website for YFV is https://yfv.finance.

    Summary

    • YFValue functions as a DeFi Yield aggregator, releasing a “vault”-like product which will deploy different strategies to farm DeFi yields.
    • There are 2 types of pools for $YFV farming: Seed Pool v2 and Balancer Pool.
    • Farming $YFV also generates $vUSD, and $vETH – these rebase to target the prices of USD and Ethereum respectively.
    • $YFV acts as a governance token for voting on decisions relating to the project. Some people also trade the token on exchanges.

    How do you farm $YFV

    Yield farmers can farm $YFV in two types of pools:

    Option 1: Seed Pool v2. This your classic yield farming pool – tokens are staked into the pool and $YFV will be distributed over time. There is no risk of impermanent loss

    1. Log onto https://yfv.finance/
    2. Connect your wallet
    3. On the “Seed Pool v2” page, deposit either USDT, USDC, TUSD or DAI (i.e. stablecoins)
    4. Click the Stake token button.

    Option 2: Balancer Pools. This is the higher risk pool, where funds are added to a Balancer liquidity pool. This means the funds will be actively used in automated market making and possibly risk impermanent loss. On YFV there is a total of 8 Balancer Pools. For the purposes of this tutorial, let’s look at the example of using the WETH Balancer Pool of WETH:YFV.

    1. Wrap Ethereum into $WETH using the ETH->WETH tool on the sidebar https://pools.balancer.exchange/#/pool/0x10DD17eCfc86101Eab956E0A443cab3e9C62d9b4
    2. Stake WETH & YFV in the Balancer Liquidity Pool https://pools.balancer.exchange/#/pool/0x10DD17eCfc86101Eab956E0A443cab3e9C62d9b4
    3. This will generate BPT tokens
    4. Stake BPT tokens on https://yfv.finance/stake in “Balancer (YFV-WETH)” Pool

    How to claim your YFV

    On the main page, you will easily be able to see how much you have staked into each pool, how much YFV is claimable and the ROI in USD.

    • To claim your rewards, click into the pool. There you will see several important items of information:
    • Next Epoch: When your next rewards will be paid out.
    • Your Estimated 24h Reward: Estimated earnings of YFV in 24 hours.
    • Rewards available: How many YFV tokens are available for collection.
    Staking pool (Image credit: Denome)

    You can claim your YFV rewards by simply clicking “Claim Rewards”. However, this requires gas fees so you need to consider the gas fees paid to stake your tokens in the first place etc and decide if it is actually worthwhile to collect your rewards.

    How are people profiting off YFV? What do I do with the YFV tokens?

    So what is the purpose of farming all these YFV tokens? YFV is the governance token of YF Value protocol. This means holders of the YFV token can use it to determinate and update the functionality of YFV protocol and change or update the rate of distribution of YFV tokens. Those that stake in YFV pools has the right to vote on-chain for the distribution rate. At the end of each week, the total votes will be automatically counted and the distribution rate of YFV will be automatically changed.

    On the other hand, you can also trade your tokens for ETH or USDT on exchanges such as Uniswap, Balancer, Hotbit, BKEX and Bilaxy. The below chart shows the value of YFV/USD.

    What is vUSD and vETH?

    As you can see in the above section “How to claim your YFV”, in addition to YFV tokens, staking YFV also gives you vUSD and vETH tokens. A total of 1,000,000 vUSD and 1,000 vETH will be distributed to all the yield farming pools according to their percentages. According to YFV, once all the pools have been exhausted of YFV, vUSD and vETH will use an oracle price feed to match the prices of USD and ETH. Similar to Ampleforth (AMPL), there will also be a rebase of vUSD and vETH every 24 hours.

    YFV Farming risks

    The biggest risk of YFV farming comes from potential vulnerabilities in the staking contract. on 30th August 2020 YFV announced that the audit of YFV Protocol had been successfully completed by The Arcadia Group. According to YFV, the audit identified a small number of low severity issues relating to code quality and health. No high or critical severity issues were found. The letter from Arcadia and a summary of the audit report can be found here.

    There is also the question of the limited supply of YFV tokens. There is only ever going to be 21,000,000 YFV tokens so some of the (perceived) value of the token is because of its limited supply. But what happens when every YFV token has been mined or distributed? This is unknown and it is worth noting that YFV is currently backed by any other asset.

    Minting Risks

    One of the biggest concerns about YFV was the presence of minter keys – which could potentially mint an infinite number of $YFV tokens. Developers have stated that all minter keys are burned, and pools which could mint new tokens have also had minting features removed.

    YFV had previously also confirmed and addressed community members’ concerns that there was a minting key oversight and exploit related to vUSD and vETH which would allow funds to be locked. What YFV did to remedy this was that they kept the minting keys until they were able to recover the funds that some users may have lost by farming in Pool 0. After that, the team transferred the governance keys of vETH and vUSD from YFV protocol to several members of the community to hold in safe custody. The community members selected were: Reuben Yap (COO of Zcoin), DeFi Dude, Matthew Neimerg (CEO of Cardinal Cryptography), TQT, Ian Ocasio and myself.

    More Information

    YFV Github
    YFV Medium and news
    YFV Telegram
    YFV Discord

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

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