Boxmining v2

Category: Coin Guide

There are several thousands of cryptocurrencies out there, known also as altcoins. These coins and tokens all have their own unique features and uses, for example, some are used to help decide the direction the creator company should take, others give you discounts or access to special features. The Coin Guide is a concise summary of the aims and technology behind a certain cryptocurrencies. Insight is crucial in this field. Many projects disguise their progress through complicated jargon, making it hard to distinguish those who are building something meaningful from those who are not.

  • DCEP: China’s National Digital Currency Overview

    DCEP: China’s National Digital Currency Overview

    What is DCEP?

    China’s national digital currency DCEP (Digital Currency Electronic Payment, DC/EP) will be built with Blockchain and Cryptographic technology. This revolutionary cryptocurrency could become the world’s first Central Bank Digital Currency (CBDC) as it is issued by the state bank People’s Bank of China (PBoC). The goal and objectives of the currency are to increase the circulation of the RMB and its international reach – with eventual hopes that the RMB will a global currency like the US Dollar. China has recently established an initiative to push forward Blockchain adoption, with the goal of beating competitors like Facebook Libra – a currency that Facebook CEO Mark Zuckerberg claims will become the next big FinTech innovation. China has made explicit that Facebook Libra poses a threat to the sovereignty of China, insisting that digital currencies should only be issued by governments and central banks. DCEP is not listed on cryptocurrency exchanges and will not be for speculation of value.

    DCEP: Will China DOMINATE digital currencies?
    Name:
    DCEP
    Creator:
    China
    Governance:
    Centralized
    Total Supply:
    Unlimited
    Backing Value:
    RMB
    Name:
    Libra
    Creator:
    Facebook
    Governance:
    Centralized
    Total Supply:
    Unlimited
    Backing Value:
    Currency Basket
    Name:
    Bitcoin
    Creator:
    Satoshi
    Governance:
    Decentralized
    Total Supply:
    21,000,000
    Backing Value:
    Energy

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

    Why is China coming up with a digital currency?

    The significance of DCEP is that it’s designed as a replacement for the Reserve Money (M0) system, cutting back the cost and friction of bank transfers. It is suggested that DCEP will alleviate the risks of offline paper money transactions such as anonymous counterfeiting, money laundering and illegal financing. This is because regulators can better monitor digital currency transactions, which some consider will greatly improve financial and monetary supervision. DCEP can also reduce the costs involved in maintaining and recycling banknotes and coins.

    Basically, DCEP is poised to become a digital version of the RMB.

    Furthermore, the issuance of DCEP is conducive to promoting the internationalization of the RMB and reshaping the current cross-border payment system. This is because prior to the RMB Cross-Border Inter-Bank Payments System (CIPS) going live in early October 2015, RMB cross-border clearing and settlement was mainly done through CHIPS (Clearing House Interbank Payments System) or SWIFT (Society for Worldwide Interbank Financial Telecommunication). However, some consider that both the CHIPS and SWIFT systems have fatal flaws. Firstly, CHIPS is a US company. Whilst SWIFT, in particular, is seen as a cause for concern to the Chinese because due to its foothold in the international banking system, it is almost essential to use SWIFT for inter-bank transfers across countries. Thus whoever controls SWIFT’s data center will have access to information on almost every cross-border remittance, which some in China posit is the US. This is because whilst SWIFT claims to be a neutral international organization, 12 of the 25 directors are either from the US and her allies. Also, its transactional data were found to have been supplied to the US. Hence it is thought that China is being held back by the US via the SWIFT system, and so, in internationalizing the RMB- China requires its own worldwide banking system- i.e. DCEP.

    Hence the Chinese consider that it is a requirement to form a new currency clearing network.

    According to Chinese media, DCEP is seen as the “3rd Wave” aimed at the US.

    A mandate to adopt Blockchain

    China has established a countrywide initiative to push forward Blockchain Adoption. President Xi Jinping has mandated that the ‘country’s development of blockchain technology should be sped up ‘ on Oct 24th in front of the Political Bureau. This speech has also been echoed by Li Wei, head of the People’s Bank of China. In April of 2020, China launched the Blockchain Service Network to unify all the Blockchain related projects in the Nation.

    China has adopted the “Blockchain, not Cryptocurrency”, whereby the benefits of Blockchain is highlighted. On the other hand, cryptocurrencies that are native to Blockchain are suppressed as Cryptocurrency Exchanges and ICOs are banned in the country.

    History and development of DCEP

    Development of DCEP started in 2014 with the establishment of a research institute dedicated to digital currencies and looking at how to improve the Chinese Yuan system with blockchain technology. However during 2014 to 2018, the development process slowed down, probably because the decentralised nature of Bitcoin or blockchain is incompatible with the nature of the Renminbi as a legal national currency. Things rapidly picked up towards the end of 2019 however and this was directly attributable to Facebook preparing to launch Libra, particularly as partner members of the Libra Association and the currencies which Libra was to be backed by had consciously rejected China. Hence, feeling the heat of the competition, China’s central bank felt immense pressure to urgently speed up in the global competition towards a digital currency.

    Former Vice-chair of the PBoC’s National Council for Social Security Fund announced on 22nd June 2020 that China had already completed the backend infrastructure of DCEP.

    Uses for DCEP

    DCEP is a currency created and sanctioned by the Chinese Government. It is not a 3rd party stable coin such as Tether’s cryptocurrency token “CNHT” which is also pegged to the RMB in a 1:1 ratio. DCEP is the only legal digital currency in China (cryptocurrencies such as Bitcoin are not legal tender in China).

    Huang Qifan (Chairman of the China International Economic Exchange Center) said they have been working on DCEP for five to six years now and is fully confident it can be introduced as the country’s financial system. It’s currently being rolled out, with the People’s Bank of China issuing the currency. According to a speech by Huang at the China Finance 40 Forum, “DCEP can achieve real-time collection of data related to money creation, bookkeeping, etc, providing useful reference for the provision of money and the implementation of monetary policies.”

    DCEP is not for speculation

    China has made it explicitly clear that its National Digital Currency is not for speculation. Mu Changchun, Head of the People’s Bank of China digital currency institute made it as “a digital form of the yuan” and that “The currency is not for speculation. It is different to Bitcoin or stable tokens”. This is to the disappointment of the online community in China, where some netizens commented “So there will be no fun in it” on Sina.com.

    It is also not possible to mine DCEP or stake on the DCEP network.

    Cross-border payments with m-CBDC Bridge

    China has joined forces to explore cross-border payments for digital currencies alongside Hong Kong, Thailand, the United Arab Emirates (UAE), and the Bank of International Settlements (BIS). 

    According to a joint statement in February 2021, the People’s Bank of China and the UAE’s central bank are taking part in the Multiple Central Bank Digital Currency (m-CBDC) Bridge project initiated by the Hong Kong Monetary Authority and Bank of Thailand in 2019. 

    The m-CBDC Bridge project will explore the capabilities of distributed ledger technology, through the development of a proof-of-concept prototype. The project ultimately aims to facilitate cross-border, multi-currency, real-time transactions around the clock. 

    This move aligns with China’s long-term ambition to use DCEP to boost the use of RMB in international payments. While the project is currently an alliance between just Beijing, Hong Kong, Bangkok, and Abu Dhabi, it is strongly supported by the BIS, an organisation owned by 63 central banks.

    The announcement also comes mere weeks after China’s joint venture with SWIFT, the dominant network facilitating international payments between banks. The new entity, Finance Gateway Information Service, was registered in Beijing on January 16 with €10 million (US$12 million) as incorporation capital, according to the National Enterprise Credit Information Publicity System, the Chinese government’s enterprise credit information agency.

    Special features of DCEP

    DCEP is a Centralized Currency

    DCEP is a digital currency that is run on a centralized private network – the Central Bank of China has complete access and control of the currency. This is a huge contrast to Bitcoin, which has an open decentralized network where there is no centralized leader. In the case with DCEP, the Central bank of China has the ability to create or destroy DCEP.

    NFC Contact based payment

    According to Official Sina Blockchain, DCEP will have NFC based payment options that don’t require devices to be online during the transfer. This will be poised as a direct replacement of paper money, as DCEP will be usable in areas without internet coverage. In addition, DCEP doesn’t require the mobile device to be bound to a bank account – meaning the unbanked population will also have access to the digital currency.

    With DCEP’s tap payment feature people can transfer money simply by tapping two phones together, without the use of the Internet. So DCEP is not exactly like blockchain either, rather it is their own variant.

    China Construction Bank launches DCEP wallet

    On 29th August 2020, China Construction Bank (CCB) had a soft launch of the DCEP wallet. Users of one of China’s big four state-owned commercial banks found a DCEP wallet feature was available inside their mobile app. Users were even able to navigate to the digital yuan wallet and activate it through registering their mobile phone numbers.

    Finally, users can send/receive digital currency to others by inputting their unique wallet ID or the phone number associated with the bank account.

    CCB DCEP wallet
    CCB DCEP wallet

    However, CCB has disabled the DCEP wallet feature from public access, but not before it gained huge attention. Users searching for this wallet now will only get an error message saying that the function is not yet officially available to the public.

    Tencent to be a major partner of DCEP

    Tencent’s Meituan Dianping has been in talks with the research wing of the PBoC on real-world uses for DCEP. Meituan Dianping boasts billions of dollars in daily transactions on their mobile app platform offering services such as food delivery (similar to UberEats), B&B bookings (similar to AirBnb), ride hailing services, bike sharing, grocery shopping and more. Basically for those in China, all your daily necessities can be met on the Meituan ecosystem.

    The PBoC’s research wing is also in talks with another Tencent-backed company, Bilibili Inc. which provides video streaming services. So whilst the specifics of the partnership are yet to be finalised, it is likely that such cooperation is going to be huge for the mass use of DCEP in China.

    Meituan ecosystem
    Meituan ecosystem (Image credits: GGVCAPITAL)

    Deployment and Distribution

    According to Caijing magazine, the pilot institutions for DCEP will be the 4 major state-owned banks i.e. China Construction Bank, the Agricultural Bank of China, Bank of China and the Industrial and Commercial Bank of China. This initial deployment will serve as an official production test for the currency system, where the network and security will be validated. In the second phase, DCEP will be distributed to large fintech companies such as Tencent and Alibaba to be used in WeChat Pay and AliPay respectively.

    DCEP will operate on a two-tiered system

    The issuance and distribution of DCEP will be based on a two-tiered system.

    The first tier would be transactions between the PBoC and intermediaries. These intermediaries would be financial institutions (e.g. the 4 major state-owned banks i.e. China Construction Bank, the Agricultural Bank of China, Bank of China and the Industrial and Commercial Bank of China) and non-financial institutions such as Alibaba, Tencent and UnionPay. Here, the PBoC would issue DCEP to the intermediaries.

    The second tier would be between the above-mentioned intermediaries and participants in the retail market such as companies (e.g. retail stores) and individuals. In this tier, the intermediaries that have received DCEP will distribute it to retail participants so that it would circulate through the market e.g. through people purchasing items at stores etc.

    The main difference in the issuance and distribution of DCEP compared to traditional cash however is the fact that DCEP would be transferred through electronic wallets, rather than bank accounts.

    DCEP two-tiered system
    DCEP would operate on a two-tiered system (Image credit: https://www.rieti.go.jp/en/china/19122701.html)

    Merchants must accept DCEP

    The central government has mandated that all merchants who accepted digital payments (such as Apple Pay, AliPay and WeChat) pay must accept DCEP. This will give DCEP a large nationwide acceptance in China, with every merchant obligated to participate or face a potential loss of their business license. This will make DCEP the most accepted digital currency in the world.

    DCEP red packets to be launched for Chinese New Year

    China’s DCEP app has launched a red packet gifting feature in time for the Chinese New Year on 22nd January 2023. The app will allow users to send the red packets i.e. “hongbao” containing DCEP to others. This is based on the Chinese New Year tradition of gifting lucky money during the annual festival. In fact, WeChat Pay and Alipay already have this feature for gifting CNY. However, it is the first time that e-CNY will be gifted in such a way, with hopes that this will further pave the way for the mass adoption of DCEP.

    DCEP can be used to pay expressway tolls

    On 28th December 2022, Chongqing Expressway Group announced it has completed the installation of equipment to accept DCEP for expressway tolls. From 30th December 2022, DCEP can be accepted as payment for tolls on the Chongqing Expressway. Users will need to download the e-CNY app and then simply present the payment QR code at the toll booth.

    PBoC’s financial statistics reports now include DCEP/e-CNY

    On 10th January 2023, the PBoC released its annual Financial Statistics Report for 2022. What is worth noting is that for the first time, the PBoC included statistics on DCEP/e-CNY. The Report states that as of the end of December 2022, the amount of digital currency in circulation was 13.61 billion yuan. This equates to around 0.13% of the total balance of yuan (13.61 trillion yuan) in circulation at the end of 2022.

    Are people in China using DCEP?

    According to a report on 28th December 2022, there has been over US$14 billion worth of DCEP transactions since its launch in 2020. Meanwhile, 261 million users have already set up an e-CNY wallet. However, this is considered low adoption since around 903.6 million people use mobile payments in China, according to a 2021 UnionPay report.

    DCEP scams

    Mere hours after DCEP has been announced, various (potentially scam) Chinese exchanges have listed IOUs or knock-offs clones of DCEP. It’s important to know that DCEP is currently only distributed to banks working with the PBoC and will not be available for the public. If you want to find out what are reputable exchanges, check out our top cryptocurrency exchanges guide. It is strongly recommended NOT to trade DCEP until it is officially released as there is no guarantee exchanges have access to the digital currency.

    Knock-off clones of DCEP are already trading in (potentially) scam exchanges.

    How to buy DCEP?

    Currently, DCEP is only available to other banks working with the People’s Bank of China. This will eventually open up to the general public in 2020. There are currently no cryptocurrency exchanges that trade DCEP.

    Implications of DCEP?

    Is DCEP a challenge to the US monetary system?

    The overwhelming view appears to be yes, both from the Chinese and the US perspective. According to statistics from the World Bank, 1.7 billion adults around the world use cash because they don’t have bank accounts. However, two-thirds of this population own a mobile phone, which can be used to make monetary transactions. This is what’s been happening in China, where mobile payments such as Alipay or WeChat Pay have more than 1.7 billion customers across China. Currently, the two online payment companies handle more payments monthly than Paypal did in the whole of 2017 (i.e. USD $451 billion). It’s very common in China to see street vendors accepting Alipay or WeChat pay.

    Alipay and WeChat being accepted at an ATV rental shop

    With the mobile wallet payment infrastructure in place, their cooperation with the PBoC could be the answer to distributing DCEP overseas. This would fit China’s “Belt and Road Initiative”, the aim of which is to build a new trade route connecting Asia with Europe and Africa. The idea is that with DCEP being used by mobile wallets, populations along the Belt and Road can be connected, bypassing existing financial infrastructures completely and giving an opportunity for the unbanked to pay for online purchases and build their savings.

    In the US, the government does not see a demand for digital currencies. In a letter from the Chairman of the Federal Reserve, Jerome Powell, he took the view that many of the challenges a digital currency intends to solve do not apply to the US. In his view, the US payments landscape is already highly competitive and innovative, with plenty of digital payments options for consumers. Powell also commented, echoing the sentiments of those US lawmakers opposing Libra, that a digital payment where you would know and be able to track each and every payment would be unattractive for the US.

    Whilst the House Committee on Financial Services also sees Libra as potentially raising national security concerns, observers consider the challenge from China is not being taken seriously. Because on the other hand, China is worried that Libra will reinforce the dominance of the US Dollar and is therefore working on fast-tracking the launch of DCEP. And it is likely that China will outrun the threat from Libra.

    From a wider perspective, some take the view that DCEP can be used as a weapon against the US in an economic war. This is because as DCEP becomes accepted across the Belt and Road, China will have the power of total surveillance and control over the economic activity of potentially half the world’s population. DCEP will allow China to track everyone’s spending and transactions, and can seize or lock customers’ digital assets in their mobile wallets. We’ve already seen this in China, where together with its “social credit system”, millions of individuals have already been barred from purchasing airline tickets using their mobile wallets.

    Appearance on Chinese television debate show “Tiger Talk”

    On 29th August 2020, I appeared on China’s Phoenix Television show “Tiger Talk” (一虎一席談). Tiger Talk is one of Phoenix TV’s longest-running shows, each week they feature a debate on a major societal issue or event, and would invite experts, academics and guests to participate in the discussion. I was invited by Phoenix Television as an overseas analyst to discuss the topic of the week, namely, “DC/EP: China’s release of digital currency, will it shake the US Dollar’s hegemony?”. You can watch the episode here.

    Boxmining Tiger Talk
    Guest appearance on Tiger Talk

    Implications of DCEP on Bitcoin and cryptocurrencies

    In the first instance, it should always be borne in mind that DCEP and Bitcoin/cryptocurrencies are vastly different. Key differences are that DCEP does not necessarily use blockchain technology and that it is a centralised currency under the control of a centralised authority. Learn more about the differences between DCEP, Libra, Bitcoin and Cash.

    However, the large scale promotion of DCEP on national television in August 2020 is certainly bracing and preparing Chinese citizens for a digital version of the RMB. The gradual rollout of DCEP will also get the average citizen accustomed to the actual usage of digital currencies.

    As a result, many people are excitedly speculating on the possibility of a bridge between DCEP and various existing blockchain projects- with some projects proclaiming they will be the first project to launch on DCEP. However it must be borne in mind that we do not know the full technical details of DCEP, so we do not know how this bridge between blockchain and DCEP will work, if at all. Also, the fact is that China is currently very hostile towards cryptocurrencies, this is mostly due to a number of cryptocurrency scams- such as Plus Token. As a result, the Chinese government have closed several bank accounts found to be involved in cryptocurrency transfers and banned all ICOs, several major cryptocurrency exchanges such as Binance and OKEx and some Over the Counter desks. Hence a lot of cryptocurrency circles and discussions occur underground, such as in private WeChat groups.

    In a confusing twist, however, the CCP’s official media outlets 参考消息, Xinhua and CCTV have been pushing out headlines that crypto assets are the best-performing asset year to date. Dovey Wan, Founding Partner of Primitive Ventures has observed that the real intent behind this media push is difficult to interpret, but so far the Chinese cryptocurrency community see this as a signal that crypto has reached its top. Meanwhile, on the Western front on Twitter, people have been seeing this as a bull signal. Currently, without any further moves or news in China about DCEP or on the cryptocurrency front, we can only wait and see what China’s next move will be.

    Will DeFi push governments to finally adopt CBDCs?

    Decentralised Finance (DeFi) can be considered the cryptocurrency and blockchain star of 2020, having revived the cryptocurrency market and bringing some much-needed revival and positivity. But what is DeFi? In short, DeFi attempts to bring traditional banking to developing industries, but with a twist: it would be open-source, decentralised, cheap and will cut out the middlemen. (Xanax)

    So what can central banks and government do to maintain their dominant status quo whilst benefitting from the technology that DeFi can bring? An answer could be to create a CBDC. In a Forbes article, the author suggests that CBDC would be a positive move for governments since it tokenises money whilst allowing users to enjoy the advantages of cheaper, faster transactions.

    The article also touches upon our coverage of DCEP and discusses China’s progress in testing DCEP contrasted with the progress of introducing a CBDC in the US. It suggests that governments and institutions, however, will need to be quick to catch up as new DeFi solutions in payments, mortgage, insurance etc. are being created weekly, and this legion of fintech innovators are growing. These innovators challenge the status quo, and with the mounting advantages of DeFi, there may soon be a real contender vying for the attention of citizen-consumers.

    FAQs

    Is DCEP backed by Gold?

    The simple answer is u0022Nou0022. On a recent episode of Kitco News, journalist Max Kaiser claimed that China will launch a gold-backed cryptocurrency, with the intention of destroying the USD as a reserve currency. He added that China has already amassed as much as 20,000 tons of gold. However this is mere speculation – China has no plans to return to the Gold Standard nor issue gold-backed cryptocurrencies.

    Will DCEP be interoperable with other Cryptocurrencies

    There are many plans to build gateways that allow the swapping of DCEP to other cryptocurrencies. Projects such as Algorand have stated they want to support DCEP and build possible bridges to swap these currencies. However, as the technical details of DCEP have not been fully revealed, such bridges have not been built yet.

    Who can issue e-CNY?

    There are 7 Chinese commercial banks that can provide e-CNY. They are: ICBC, Agricultural Bank of China, Postal Savings Bank of China China Construction Bank, Bank of China, Bank of Communications, and China Merchant’s Bank. There are also 2 online banks that can provide e-CNY i.e. WeBank (WeChat Pay) and MyBank (Alipay).

    Which Chinese Cities can sign up and use the e-CNY app?

    Currently, there are 12 cities and areas in China which can sign up and use the e-CNY app. They are Shenzhen, Suzhou, Beijing Xiong’an, Chengdu, Shanghai, Hainan, Xi’an, Changsha, Dalian, Qingdao, and Zhangjiakou.

    Can tourists or non- Chinese locals use DCEP?

    No, DCEP is not fully rolled out yet and is only available in select cities in China.

    Is China using DCEP?

    According to a report on 28th December 2022, there have been over US$14 billion in transactions since the launch of DCEP in 2020 and October 2022. Meanwhile, 261 million users have already set up an e-CNY wallet. However, this is considered low adoption since, according to a 2021 UnionPay report, around 903.6 million people use mobile payments in China.

    When will China officially launch DCEP e-CNY?

    Whilst there is ongoing DCEP/e-CNY testing on in increasing scale, there is no official announcement as to when and how China will fully roll out DCEP/e-CNY.

    Sources:
    https://www.forbes.com/sites/lukefitzpatrick/2020/10/06/defi-may-push-governments-to-adopt-cbdcs/#2d2c1f6f3f5e
    https://www.asiacryptotoday.com/how-china-and-the-world-reacted-to-xi-jinpings-blockchain-comments
    https://venturebeat.com/2019/09/15/wake-up-us-federal-reserve-china-just-showed-how-digital-currency-is-done/
    https://www.reuters.com/article/us-china-blockchain-idUSKBN1X704A
    https://u.today/just-in-chinese-central-bank-to-launch-digital-currency-called-dcep
    https://beincrypto.com/chinas-dcep-to-be-worlds-first-national-digital-currency-says-ccie-vice-chairman/
    https://qz.com/1710850/chinas-central-bank-could-gain-from-a-digital-yuan-cbdc/
    https://www.asiacryptotoday.com/news/china-digital-yuan-dcep/
    https://news.bitcoin.com/over-3000-atms-in-beijing-offer-digital-yuan-withdrawals/
    https://www.coindesk.com/china-industrial-commerce-bank-digital-yuan-cash-convert
    https://www.theblockcrypto.com/post/95266/beijing-digital-yuan-cash-atm
    https://www.scmp.com/tech/policy/article/3122924/beijing-exploring-digital-yuan-cross-border-payments-joining-hong-kong
    https://www.coindesk.com/central-banks-of-china-uae-join-hong-kong-thailand-cbdc-payments-project
    https://www.scmp.com/economy/china-economy/article/3135886/china-digital-currency-when-will-e-yuan-be-launched-and-what
    https://www.scmp.com/economy/china-economy/article/3120582/chinas-swift-joint-venture-shows-beijing-eyeing-global
    https://www.scmp.com/economy/china-economy/article/3135650/china-digital-currency-hong-kong-shenzhen-proposed-expressway
    https://www.coindesk.com/china-cbdc-wage-pilot

    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.

  • How to mine Dogecoin with these easy software

    How to mine Dogecoin with these easy software

    Introduction

    First started as an internet meme from 2 software engineers Billy Markus and Jackson Palmer to mock crazy fans of cryptocurrency, Dogecoin has now officially become a part of the big family. It’s actually one of the top crypto currencies at the moment – not bad for something that started out as a joke. 

    Just like other cryptocurrencies, Dogecoin is powered by a decentralized finance system called blockchain technology. The attraction of cryptos is that it is not under  any private corporations, multinational enterprises or the government’s control. Crypto currencies are free from any regulations set by any government and bank institutions.

    Moreover, Dogecoin cannot be found in a single particular computer system. It is built on top of a huge network of computers or nodes that confirm the transactions. This system of peer-to-peer exchange and transfer of information makes the whole structure almost impossible to hack and bring down. 

    Cryptocurrency has limited supply, hence the hype. This limit of supply is meant to make sure that their prices will not get too low, which is what happens  for fiat currency like the USD if the government keeps on printing the money without proper control or monitoring. 

    There are market caps for each cryptocurrency. Dogecoin has no supply limit, of which  around 129 billion Dogecoins are currently circulating as of May 9, 2021.

    What is Dogecoin mining?

    Before we get to Dogecoin mining, you have to know that mining cryptocurrencies is not the same as  mining coal or petroleum underground like they do in the Middle East. The mining being discussed here is  digital mining through complex mathematical algorithms. In a simpler context, it is like the process of creating a new coin by solving a puzzle, but just in a more technical way involving very complex algorithms .

    Since the ledger — blockchain technology — of the transactions need to be maintained, not a lot of people will spend time mining. Instead, they will just buy the coins outright from the crypto markets. . 

    In the early days of crypto, it was possible to use your own laptop pc to solve any of the blocks in the chain and earn yourself a coin for your efforts.  Each confirmation of a transaction  will place a new block for the Doge network, for which there will be a reward for the miners in the form of more Dogecoins.

    Every cryptocurrency has different mining systems. Here is a comparison of Dogecoins and Bitcoin, the leading cryptocurrency in the world.

    Dogecoin Bitcoin
    Algorithm Scrypt coin SHA-256
    Block Time 1 minute! 10 minutes
    Difficulty 2,798,252 3,511,060,552,899
    Reward 10,000 DOGE 12.5 BTC

    Notes:

    1. Algorithm: Rules for mining new currency aka hashing algorithm
    2. Block time: Average time for a new block checked and added to the chain. It varies across time. 
    3. Difficulty: Difficulty level to mine a new block of currency. It varies across time. 
    4. Reward: Amount of new currency rewarded for each new block mined. It varies across time. 

    How to mine Dogecoin?

    There are 3 ways to mine Dogecoin: solo mining, pool mining and cloud mining. We’ll explain one by one to see what the difference is between them. 

    1. Solo mining

    You are mining on your own. It means you need to spend more money on the most modern and updated equipment and pricey utility fees by yourself. However you get to keep all the rewards to yourself .

    In some cases, people have spent a whopping $500,000 for just building the mining gear alone. This is not including the electricity bills that are usually enormous for an operation of that size. If you’re not careful, the electricity bills could eat into your profits without you realizing.

    1. Pool mining

    It’s like a group project. You have less work to do but you need to share the pride and achievement. At Dogecoin mining, you will have an easier time earning coins, but the rewards have to be shared. 

    Before joining a pool, check out their calculation for the payouts of each member and consider the extra pool fees needed. There are few options online for pool mining. So do research about all of the options before you join the pool.

    1. Cloud mining

    Pay for a group to mine for you. This is for those that prefer not to invest too much effort and time for mining Dogecoin. You can rent machines from a data center and ask them to mine for your behalf. This way might be the most costliest among the 3 options, since it is time-locked and the price might drop during the agreement. Furthermore, electricity bills and other costs need to be covered too. 

    Things needed to mine Dogecoin

    Other than the electricity itself, there are 3 things needed to mine Dogecoin which are hardware, software and a crypto wallet. 

    1. Hardware

    Any Windows, Mac OS or Linux system is needed to start mining. Basic machines like CPU can be used but it will take a long time to succeed. Also, your computer will end up overheated or getting damaged.

    GPU mining is recommended, especially those with graphic cards. Alternatively, you also can use Scrypt ASIC miner which is dedicated mainly for crypto like Dogecoin. 

    1. Software

    The software will differ depending on the hardware you use. Here are the softwares recommended for different hardwares:

    • CPU: CPUminer
    • GPU: EasyMiner, CGminer, CudaMiner
    • Scrypt ASIC: MultiMiner

    Be careful to select the legit mining software, or else the fake ones will harm your PC and investment. So double check before downloading. 

    1. Crypto wallet

    Digital wallet is not enough to secure your Dogecoin if you are serious about mining it. Since you have invested so much in this process, why not secure it further by having a cold crypto wallet?

    dogecoin digital wallet

    You don’t have to worry about being hacked  and keep your profits safe. 

    Conclusion

    We don’t know whether Dogecoin will go up in price again or plummet to oblivion. Will Elon Musk put more trust in it or is it just for clout? That’s up to you to discover. 

    However when mining Dogecoin, one should always balance the costs to run the mine and the potential returns before deciding whether it is a good option.  

    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.

  • Radix DLT ($XRD): Taking DeFi to the next level?

    Radix DLT ($XRD): Taking DeFi to the next level?

    Radix DLT is a layer 1 distributed system to power the needs of the decentralised finance (DeFi) ecosystem. As DeFi continued to gain traction, the top blockchain networks supporting the market were already overstretched. As it turns out, scalability appears to be a hard nut to crack and hence projects like Radix DLT are formed.

    The motivation behind the Radix protocol’s creation is to save the $71 billion lost every year caused by unnecessary friction in the conventional financial system and allow those at the lower and higher levels of finance to make ground by powering a strong DeFi ecosystem.

    Check out our video which explains the scaling problems currently faced by Ethereum, and how Radix attempts to solve it.

    Taking DeFi to the NEXT LEVEL ? – Radix DLT Protocol overview

    Background

    The Radix team believes that using distributed ledger technology (DLT) to build a permissionless network will ease the development and accessibility of innovative financial applications. With these applications, we could finally bring down the guarded walls of traditional financial markets.

    Radix team (Image credit: Radix DLT)

    The project was founded by Dan Hughes, who also happens to be its CTO. Hughes’s former work includes the design of T-Mobile’s first mobile internet platform.

    Other team members include the organization’s CEO, Piers Ridyard, as well as CPO, Albert Castellana. The project is being supported by the Radix Foundation.

    What is Radix DLT?

    The team behind Radix DLT defines the project as the “first layer 1 protocol specifically built to serve DeFi.” The protocol seeks to remove the inefficiencies found in open finance (OpFi) both in the current and future settings. Hughes and his team want to achieve this through:

    • Re-engineering the consensus mechanism used in popular blockchain systems.
    • Employing decentralized virtual machines.
    • Activating on-ledger code.
    • Building DeFi-bound components and applications.
    • Incentivizing developers who drive the growth of the new-found financial breakthrough.

    Having its developers at the core of driving growth for innovative financial products, Radix provides its support by building highly-secure smart contracts, fast and interoperable OpFi decentralized applications (dApps), engaging and rewarding a distributed developer community, and guarding DeFi composability when scaling dApps on public blockchains.

    Radix network

    The network is made up of Cerberus (a consensus mechanism), Radix Engine (a development environment), Radix Component Catalog, and developer royalties.

    Cerberus

    At the heart of the protocol is Cerberus, a re-engineered consensus mechanism which uses a sharded Byzantine fault-tolerant (BFT) solution. This approach enables the system to be parallelized across multiple nodes without losing message complexity and responsiveness.

    The sharding concepts allows unlimited network splits or shards. Each shard can represent anything on the platform. By allowing unlimited shards, Cerberus shifts focus from global ordering to partial ordering.

    With global ordering, transactions are stored in a predefined chronological order. Partial ordering, at a very basic level, is the opposite of agreed chronological ordering. However, partial ordering has to differentiate between related and unrelated events or transactions when recording them on the blockchain.

    Using a “braiding” mechanism, Cerberus uses a new BFT-style system to sign interactions between nodes handling different shards before committing transactions.

    Radix Engine

    This is Radix’s specialized application layer that powers the interaction between a smart contract’s code with the actual blockchain. The layer powers the project’s virtual machine (VM), which in turn, powers the partial ordering system.

    Furthermore, the Radix VM handles concurrency to drive DeFi applications further.

    Radix Component Catalog

    In other blockchain systems, a developer’s work becomes an active smart contract after being pushed to the system’s users. For Radix, the component catalog handles apps before being registered as “active” on the platform.

    Radix Network (Image credit: Radix Whitepaper)

    In other words, the catalog contains templates ready for use to create additional active components. The new template-based products are called instantiated components.

    Developer Royalties

    The Radix system uses developer royalties to encourage developers to contribute. However, the project takes a different approach by employing distributed self-incentives such as those found in proof-of-work systems called mining rewards.

    Radix Token ($XRD)

    The platform has a native token, XRD, which is used to pay for transaction fees. Note that these fees are paid to node runners.

    A transaction fee is charged for token creation, messaging, and anything else that requires a change of the ledger state. The fee is burnt upon validation of the operation.

    Furthermore, the platform’s tokens have a controlled unlocking mechanism that spans 365 days. With each unlocking, the Radix Foundation’s amount of XRD reduces while those in the public domain increases.

    E-Radix (eXRD) Token Sale and tokenomics

    Radix Token Sale began on 8th October 2020 and a total of 642mil E-RADIX tokens were available to purchase at $0.039 per token.

    There will be an Initial Supply of 4.41 billion E-RADIX as both locked and unlocked tokens. The following chart shows the proposed distribution of the Initial Supply tokens.

    Radix proposed distribution
    Radix proposed distribution

    The unlocking mechanism for E-RADIX tokens will start on 17th November 2020. Of the Initial Supply of 4.41 billion E-RADIX tokens, 4.2 Billion tokens will be distributed and of which 99% will be locked and 1% unlocked.

    These locked tokens are subject to a price-based unlocking schedule which will allow holders to withdraw the tokens at certain price milestones as follows:

    Radix token unlock schedule
    e-Radix token unlock schedule (Image credit: Radix token sale info page)

    E-RADIX will be available for trading on Uniswap.

    This E-RADIX token is an ERC-20 token. When the RADIX ledger is instantiated, this E-RADIX token will be exchangeable 1:1 for RADIX (XRD) tokens. As mentioned in their key milestones article, the Team are on track for the Radix main net to go live in Q2 2021.

    On the mainnet, Radix will create a further 5.19 billion RADIX tokens which will also follow the same unlocking schedule as the E-RADIX tokens mentioned above.

    How to withdraw your unlocked E-RADIX (eXRD) and RADIX (XRD) tokens

    As mentioned in the previous section, E-RADIX and RADIX tokens are subject to a price-based unlocking schedule. However, to claim these tokens you will need to withdraw them from the unlocking smart contract.

    This involves visiting their Radix tokens unlocking website and connecting the wallet that you used to purchase the E-RADIX tokens. If that wallet address has an allocation of EXRD in the unlocking smart contract, you will see details of your total allocation together with the amount which is unlocked and can be withdrawn. Then all that is required is to click the “withdraw” button and follow the steps to withdraw the eXRD.

    Make sure to check back when an unlocking event occurs because it will mean you can withdraw more tokens!

    For a detailed walkthrough on how to claim your unlocked tokens, click here.

    Staking Radix Token

    With OpFi, staking, yield farming, and liquidity mining are common occurrences. Radix powers this DeFi subset by allowing users to lock their XRD to earn network emissions and be involved in decision making.

    Network emissions are periodically generated tokens that are spread across active staking nodes while considering the amount of staked tokens. Emissions make up for 2.5% of the yearly inflation rate.

    There are two approaches to locking tokens:

    1. A user can lock XRD and become a node runner on the network; or
    2. a user can lock Radix tokens and delegate his stake to another node runner, also called a staking node. A staking node has the power to validate transactions.

    Radix’s consensus mechanism limits the stake weight per node to 33% to prevent node runners from having absolute power over the transaction validation process.

    Network Subsidy

    The network subsidy is an additional amount of tokens distributed to transaction validators. The tokens are unlocked by the Radix Foundation every 24 hours and are expected to run for 10 years. However, to earn the subsidy tokens, a staking node has to consistently meet specific factors on responsiveness, bandwidth, and computing power.

    Other Radix token categories are the public token grant to support community contributors, the Radix team token grant to support the team, and the stable token reserve that supports stable coins on the network.

    Conclusion

    The projected growth of the DeFi market requires creating new distributed systems that, if possible, have unlimited scalability. Radix is one such project. With a key focus in leading the migration from centralized finance (CeFi), the project provides hope to the future of OpFi.

    From a re-designed consensus mechanism to decentralized self-incentives for developers, the project is keen on ensuring that DeFi overshadows CeFi.

    The Radix token supply approach is another key component of the network that shifts from the traditional approach of major blockchain-based systems that power OpFi protocols.

    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.

  • 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.

  • The Graph ($GRT) – The Next Level of Decentralized Apps

    The Graph ($GRT) – The Next Level of Decentralized Apps

    What is The Graph?

    The Graph ($GRT) is a decentralized and open-sourced indexing protocol for blockchain data. Developers can build and publish different APIs, which are referred to as subgraphs, and perform queries through the GraphQL.


    The platform can easily be used to look for any Ethereum data conveniently through simple queries. This addresses the common problem faced by a lot of other blockchain indexing platforms.

    Blockchain applications face difficulties in keeping properties like finality, chain reorganization, and security in their process of fulfilling query tasks. These are also potential complications that applications usually address, but unfortunately make the process of querying time-consuming. The Graph has a workaround for this, and it is built exactly for that purpose.

    Through “subgraphs,” The Graph indexes blockchain data, which users can access via the GraphQL API. According to the team, they will make it fully decentralized in the future, where more nodes will be involved and made responsible for maintaining the index.

    The interest for the platform is steadily growing. In fact, they hit over a billion queries last June 2020. This was right at the time when decentralized finance was also gaining much institutional attention.

    Background

    Yaniv Tal, co-founder and CEO of The Graph, together with his team, has created an indexing protocol meant to ease the process of accessing blockchain data. Tal and his co-founders had personally witnessed themselves how difficult it was to actually create new applications on the Ethereum blockchain.

    Thanks to their experience on applications, they have found out that there is actually no decentralized indexing and querying softwares yet for blockchain. The problem back then was that developers had to come up with their own method to gather data and transform them from different sources.

    The mission of the platform, which Tal and his team developed, is to help create applications that require no servers and make Web3 accessible to everyone.

    How Does The Graph Index Data?

    To index Ethereum-based data, The Graph uses the “subgraph manifest.” This refers to the description of a subgraph containing data about smart contracts, blockchain events, and the procedure in mapping event data with one another, before they are all kept in the platform’s database.

    The flow of the data from transactions, subgraph manifests, and the database follows a particular structure. All of it begins with decentralized applications that are adding data to the Ethereum blockchain through the help of smart contracts.

    All of that data will contain a record of all events and transactions up until the point that they have achieved finality. Then comes the Graph Node, which scans the whole blockchain database, gathers new data, and filters out those that are relevant to the queries that users make. To make the indexing much easier, it identifies every information that answers the questions from subgraphs.

    GraphQL is the link between blockchain data and the application that a user wants to provide it with. But then again, it is through the Graph Node that users can deliver searches to the platform. After the whole process, users can finally look at the results of their query from their applications.

    Basically, this is how the cycle of data query and indexing works in the platform. Users can refer to the Graph Explorer to scan through the subgraphs that are already in the platform. Each of these subgraphs have a playground where users can perform queries through GraphQL.

    How the Graph Works? (source: https://thegraph.com/docs/introduction#how-the-graph-works)

    As of latest, The Graph can support the indexing of data coming from Ethereum, IPFS, and PoA networks. There are more networks that the platform will support in the future. But right now, they already have more than 2,300 subgraphs deployed, which developers for applications utilize. Some of these applications are AAVE, Aragon, Balancer, DAOstack, Uniswap, Synthetix, and many others.

    There is a lot of institutional support for The Graph network. Michael Anderson of Framework Ventures, said in a press release that they “couldn’t be happier to back Yaniv and the team, and we look forward to helping grow the decentralized network when it launches.”

    Hayden Adams of Uniswap also shared how useful the platform was for their analytics needs: “As a company we don’t manage or run our own databases. … Right now it’s pretty difficult to get historic data from the Ethereum blockchain in an efficient way.”

    Their plan, apart from expanding to other blockchains soon, is to make it community-owned and governed in the future. This is also in response to the shift of many blockchain applications to a decentralized model of governance.

    Key Roles

    The platform’s whole ecosystem is composed of the following:

    • Consumers – These are the users who pay indexers for their searches. It could also be web services or any other software linked with The Graph.
    • Indexers – These are the nodes that maintain the indexing function of the platform.
    • Curators – Using GRTs, curators identify to the subgraphs the information that is valuable for the platform’s index.
    • Delegators – These are other stakers who delegate their GRT to existing indexers and earn a portion of the rewards run by nodes.
    • Fishermen – They check whether the network’s response to queries is accurate.
    • Arbitrators – They decide whether an Indexer is malicious or not.

    The Graph Council

    The Graph plans to decentralize its governance in the future. This will most likely be similar with MakerDAO and Compound. At the point of the protocol’s maturity, the team plans to launch a Decentralized Autonomous Organizations (DAO) that would allow core interest groups to participate in important protocol decisions.

    Similar to other DAOs, the Graph Council, which will be the governing body for the technical parameters of the protocol, is also in charge of how The Graph Foundation allocates its native, utility tokens.

    Among their basic functions include decisions on allocating grants and ecosystem funding, protocol upgrades, protocol parameters, and other emergency decisions.

    GRT Token ($GRT)

    The Graph Token, or $GRT, is its native ERC-20 based token, which can serve as a medium of exchange and the reward distributed to community participants who function as Indexers, Curators, and Delegators.

    GRT token distribution
    GRT token distribution (Image source: The Graph)

    GRT also has a vesting and distribution schedule ranging between 6 months to 10 years depending on the bucket. Around 12.5% of the total token supply (i.e. 1,224,999,438 GRT) is expected to be in circulation at launch. However this figure is exclusive of stakeable but locked tokens.

    GRT token distribution at mainnet launch

    The Graph launched its mainnet at 9:00a.m. (PT) on 17th December 2020. Upon launch, GRT has been distributed to all of the participants of the public sale. Members of The Graph’s Curator Program also received an initial USD $1,000 worth in rewards, with the remainder to be distributed to them on a quarterly basis based on their contributions to the Program.

    The Graph Foundation also received around 20% of the supply for the future development of The Graph. In particular, contributors who want to help building on The Graph can apply to their Grants Program, around 1% of the total supply of GRT will be allocated to support these participants in 2021.

    Here’s a graph showing the GRT circulation over the course of 5 years from the date of launch (i.e. 17th December 2020 at 9:00a.m. PT)

    5-year GRT circulation schedule by Bucket
    5-year GRT circulation schedule by Bucket (Image source: The Graph)

    Indexers that assisted during the Testnet phase have also ben rewarded between USD$10,000 to USD$100,000 in GRT as a reward for their contributions.

    In addition, around 2% of the total GRT has been granted to several Education Programs and loans totalling around 2.5% had been made to independent ecosystem partners.

    Indexer Staking

    In order for users to stake in the nodes that operate the whole platform and sell their services in the query market, they have to lock their GRT. In return, they are given financial rewards. If the indexers work maliciously, like altering data intentionally, the GRT that they staked will be slashed.

    Mainnet now live!

    The Graph Network launched its main net on 17th December 2020 after 3 years of development! According to the team the mainnet launch includes the following components: Deployment of The Graph Network contracts on Ethereum mainnet, deployment of the GRT contract, distribution of GRT to takeovers, launch of the Bug County Program and new docs for network roles.

    With the mainnet launch, Indexers will first stress test and improve performance before supporting real query volume, which will be upwards of 5,000 queries per second. Of course, there will be rewards for Indexers who will now begin earning on-chain indexing rewards and query fees.

    Graph Roadmap: What’s next?

    Now that mainnet has launched, The Graph will continue building. The Team has stated that the Graph Foundation will work on building a production-ready Graph Explorer dApp and Gateway that will support all network contributors.

    The Graph is also open to any individuals or third-parties that want to build for the network and as mentioned previously, they an apply to the Grants Program or collaborate with other community contributors.

    Conclusion

    Looking at the current boom of the DeFi space, we can see how important it is for developers to be able to freely access blockchain data. Making the process faster and less difficult for everyone could potentially influence the growth of the space as well as its reliability, security, and capacity.

    Everyone saw the need to create a bridge of information between applications and blockchain data. The Graph sought out to answer that.

    And with the deployment of smart contracts that depend on user data, The Graph has proven itself to be easy to use, cost-efficient, and fast. The platform is seen as a promising tool to empower everyone in the community, especially those who are developing more use cases for the blockchain.

    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.

  • ERC Tokens Explained: What are they?

    ERC Tokens Explained: What are they?

    ERC (Ethereum Request for Comment) token standards are built upon and utilise the Ethereum blockchain. Most of us have only heard about the vastly used ERC-20, while becoming more familiar with the ERC-721 and ERC-1155 token standards thanks to the growing adoption of NFTs (Non-Fungible Tokens) by upcoming projects. This article gives an overview of what are ERC tokens, their various types, and functions.

    Summary

    • ERC tokens are special forms of smart contracts that utilise the Ethereum blockchain, rather than having their own blockchain like Bitcoin.
    • They can have different functions and even a combination of features.
    • ERC tokens can be Fungible, Non-fungible, and Semi-fungible.

    What is a token and how do we classify them?

    First of all, ‘tokens‘ are programmable digital units of value that are recorded on a distributed ledger protocol such as a blockchain. Basically, ERC20 tokens are special forms of smart contracts that utilize Ethereum’s blockchain. They can also be described as digital assets which are not the main currency of that blockchain. While $ETH and $BTC both have their blockchain and are thus far considered as coins, tokens don’t.

    There are different types of tokens. Utility tokens differ from the rest because they usually offer a wider functionality than, for example, a means of payment (coins, like $BTC) or voting power on a platform (such as governance tokens, like $UNI). They can combine multiple purposes, are integrated into an existing protocol and used to access its services. They also provide network activity, which ensures strength of the platform’s economy.

    To easily understand how they fit into the blockchain ecosystem, we need to understand how Ethereum works first: we can think of it as an operating system on top of which applications (smart contracts) can be built (written), just like developers build applications for Android and iOS. One difference being that applications on Ethereum can be decentralized (Dapps). Once we have these platforms, we can (if we want) create tokens, each time choosing the most appropriate standard for our purpose.

    Years ago, when there was no standard in use, it was far more complicated for developers to make smart contracts interact with each other; they had to create specific implementation standards to develop a token and launch it on Ethereum’s network. Then, the ERC-20 came out and that heavily simplified the process.

    Another distinction is between Fungible and Non Fungible tokens.

    Fungible Tokens

    In this case, each token is equivalent to all the others and they are interchangeable (1 $BTC will always be equal to any other 1 $BTC).

    ERC-20

    First proposed in 2015, it’s the industry standard and most accepted one. It makes the initial distribution of tokens extremely easy, so it became massively used in the 2017 ICOs craze. The ERC-20 contracts are composed of 6 mandatory functions and 3 optional ones.

    ERC-20 contracts
    ERC-20 contracts

    6 mandatory functions:

    • balanceOf(): keeps track of the balance in each user wallet
    • totalSupply(): shows the current total supply in circulation
    • transfer (): lets the owner send a specific amount to another address
    • transferFrom(): allows a smart contract to automate the transfer process and send a given amount of the token on behalf of the owner
    • approve(): approves the withdrawal of tokens from the owner’s address to the receiving address. It also guarantees that nobody could create more tokens out of nothing, keeping the supply under control
    • allowance(): makes sure that the owner has at least as many tokens as the amount set in the approve function; the transactions added to the blockchain have been proved valid

    3 optional functions:

    • name(): pretty self explanatory!
    • symbol(): 3-4 letter abbreviation
    • decimals(): it is impossible to write decimal places in Solidity- only whole numbers, so this function is needed. Most tokens use 18 decimals

    How to send ERC-20 tokens?

    There are two ways of sending ERC-20 tokens, depending on if you want to send them directly or delegate the function to a smart contract. You can either:

    • call the transfer() function to send tokens to another wallet address
    • call the approve() function and then transferfrom() from the receiver contract

    Besides the ease of use and the popularity that this standard immediately gained among the community, its main flaw soon became obvious, causing millions of dollars worth of tokens to be lost forever in smart contracts.

    Limitations of ERC-20 tokens and what are wrapped tokens?

    What happens if you simply use the transfer() function to send tokens to a smart contract which is not made to receive them?

    The transaction will succeed and these tokens will be credited to the receiver address, but they won’t be recognized by the recipient and they will remain there forever, unusable.

    Another limitation is that since $ETH itself was obviously created before the ERC-20 standard was even developed, it is not compliant with it (nor with other standards). That is why to interact with many contracts, we need to “wrap” $ETH into $WETH (wrapped ether, which IS an ERC-20 token, pegged to $ETH 1:1).

    To solve the various flaws, new standards were proposed. The most famous ones are the following.

    ERC-223

    Summary:

    • prevents funds to be lost
    • half as expensive
    • backwards compatible

    This standard was proposed by a Reddit user known as “Dexaran”; it focuses on security and tries to fix the main flaw of its predecessor, by using a unique, new transfer() function, which allows tokens to be sent to either a personal address or a smart contract. Moreover, it includes a tokenFallback() function that checks the receiving contract for the same function.

    Basically, if the receiver is a regular address (not a contract), the transfer will be similar to the ERC-20 one, while if the receiver is a contract, the tokenFallback() function will be triggered. If the receiving contract does not have this function, the transaction will fail but all the funds will be returned to the sender address.

    Simplifying the transfer and reducing it to just one single step, the process will also be cheaper (less gas fees!). The ERC-223 standard is backwards compatible with the ERC-20, as it keeps all of the original functionalities and solves the biggest issues. The ChainLink ($LINK) token has been described by its developers as “an ERC20 token, with the additional ERC223 ‘transfer and call’ functionality of transfer, allowing tokens to be received and processed by contracts within a single transaction”.

    The ERC-223 standard has never been finalized.

    ERC-777

    Summary:

    • makes transactions smoother
    • allows for approved operators
    • standard for minting/burning tokens
    • backwards compatible with ERC-20

    This standard was developed by Jacques Dafflon and Jordi Baylina, it is similar to ERC-20 and it relies upon the ERC-1820. Before that, developers couldn’t identify the functions which can be implemented by smart contracts. By creating a central registry of contracts on the network, the ERC-777 can use it to identify the interfaces a smart contract uses.

    Its uniqueness is the friction reduction in transactions. It also defines a new set of functions, for example it uses send() instead of transfer(), authoriseOperator() instead of approve(), tokenReceived() handler function instead of tokenFallback().

    It also allows for more customization, a list of approved operators so that people can approve smart contracts to move tokens on their behalf, and creates a standard for minting and burning tokens (very useful for particular projects).

    A pure ERC-777 is not compatible with ERC-20 but the standard described how to make it compatible.

    The ERC-777 standard became finalized on May 6th, 2019.

    Other fungible tokens

    There have been many other proposals combining some aspects of different standards into each other.

    • ERC-827 combines some of the advantages of ERC-223 and ERC-20 standards, it enables token transfer for a 3rd party to spend it
    • ERC-664 is mainly centered on modularity and makes it possible to update token contracts
    • ERC-677 provides a safe way for new contracts to transfer tokens to external contracts
    • ERC-621 can increase or decrease the token supply
    • ERC-884 allows companies to use blockchain to maintain share registries

    Non Fungible Tokens (NFTs)

    These tokens are unique: each one can have a different value ant they are not replaceable. NFTs enable the tokenization of individual assets. They can often be found in games or you can imagine them as digital pieces of art, real estate… basically anything you like. Unique tokens can be further modified adding new “tools”, hence increasing their value overtime (like new bodyparts on a racing car). Check out our video on NFTs:

    Non-fungible tokens explained

    ERC-721

    It became famous with CryptoKitties. The contract is composed by 8 functions plus 2 optional ones. Most of them are the same or similar to the Fungible counterparts, with few important differences.

    ERC-721 contracts
    ERC-721 contracts

    8 mandatory functions:

    • name()
    • symbol()
    • totalSupply()
    • balanceOf()
    • ownerOf(): retrieves the address that owns whichever NFT ID number is searched; ownership is defined by simply having the token
    • approve()
    • takeOwnership(): transfer the tokens from another address that currently holds them
    • transfer()

    2 optional functions:

    • tokenOfOwnerByIndex(): allows NFT IDs to be searched through a list of tokens owned by the user; it is necessary if we want more ntfs
    • tokenMetadata( ): retrieves the metadata, i.e. info for identification

    While when new ERC-20 tokens are created, the supply simply increases. In this case, things are more complicated. We have to monitor the metadata, and that is expensive in gas fees. ERC-721 defines a storing method.

    A problem with this standard is that if we want to send more NFTs to someone, we will need as many transactions as the number of tokens sent.

    Along with the ERC-721, a few other Non Fungible standards have been proposed, like the ERC-875 and the ERC-998.

    Semi Fungible Tokens (SFTs)

    In some cases, NFTs and FTs do not provide the required level of flexibility that is necessary to build new projects. As we have said, Fungible tokens are all “equals” while Non Fungible ones are unique.

    But what if we need something that is neither Fungible nor Non Fungible? Like seat tickets?

    Seat tickets (or supermarket vouchers, lottery tickets etc.) are 99% equal to on another with a very small difference, like a serial number that makes them unique, preventing double-spending/selling. When we buy a seat ticket, we don’t want someone else to have the same exact token and be able to use it if he arrives before us at the cinema.

    In these circumstances Semi Fungible Tokens come in help: they hold their value until they are sold, changing from Fungible to not Fungible anymore.

    The Multi Token Standard: ERC-1155

    This one was created by Enjin in 2018 for its Gaming Multiverse.

    In all the other standards we have considered, we need to deploy a different contract for each type of token (one contract for all the same ERC-20s, one contract for each unique NFT). It is like being at the supermarket and not being able to buy all of the groceries we want at the same time, having to proceed one item after the other, from shelf to register, continuously. If we want to be able to buy a bunch of stuff at the same time, we need a new standard, and that is the ERC-1155. It allows for different “items” to be stored and created in the same contract (FTs, SFTs and NFTs), with the least possible amount of data; it is cheaper and more convenient.

    For example, in a game we may exchange a currency (ERC-20) and/or NFTs (ERC-721) with other gamers; the ERC-1155 makes it possible. Moreover, it can execute a deterministic smart contract function by simply sending a token to an address (i.e. sending a token to an exchange address, the exchange could immediately return another token back to the sender’s address).

    Practically, a single smart contract can mint infinite tokens forever (and it allows to save fees!)

    Learn more about the ERC 1155 token

    Conclusion

    Overall, among the Fungible tokens, some people think that the ERC-777 should be the designated one to become widely adopted. It offers, for example, more ways to protect our funds. Nevertheless, none of the above standards is without flaws and inherent risks. As a matter of fact, there are multiple reasons why ERC-20 is still the most popular one, and we can’t forget to mention that a new standard would create a lot of issues and interoperability problems, at least at the beginning.

    If we consider the Non Fungible world, we are yet to see an explosion in adoption, but more and more platforms and games are coming out and it will probably be one of the trends of the next years. There are different platforms where you can go and buy collectibles directly with your Ethereum wallet (such as Metamask). One of the most famous and used is Rarible.

    Only time will tell us which will be the next standard in use; proposing a solution and having the community embrace it are two very different things.

    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.

  • Duck Liquidity Pool (DLP) by DuckDAO ($DUCK)

    Duck Liquidity Pool (DLP) by DuckDAO ($DUCK)

    Duck Liquidity Pool ($DUCK) is a DeFi Market Maker protocol, developed by DuckDAO, one of the biggest cryptocurrency community that provides funding and marketing support to early-stage crypto projects.

    The boom of decentralized finance (DeFi) in recent months has ushered in a new profit-making strategy for crypto traders, beginners and advanced alike. Decentralized exchanges (DEX) rely on liquidity pools to help power their market-makers. While the Duck Liquidity Pool is a new entrant in DeFi, it has already captured the attention of many users in the space thanks to its high APY and token burning model.

    https://youtu.be/8MNKafDgW0o

    What is the Duck Liquidity Pool?

    The Duck Liquidity Pool (DLP) is DuckDAO’s own market maker. The funds that supply its pool came from the sale of pre-mined tokens and can be accessible in many other protocols and exchanges. In the meantime, projects that are supported by DuckDAO will be the first to be able to tap the pool. The ticker for the pool is $DUCK.

    The unique feature that distinguishes DLP from others is its “unilateral burn” strategy, or the one-sided token burn model. It is designed to burn 50% of all earned rewards (more on this later).

    The APY level for DLP is high and its suppliers can receive as much as 50% of the profits from market making, airdrop of incubated project tokens, as well as non-fungible token (NFT) campaigns. Such a feature enables yield farmers the ability to earn profit by just providing liquidity to DuckDAO’s market maker.

    To participate in the DLP, users have to lock their cryptocurrency holdings by depositing their funds in the pool. In return, they receive DUCK tokens as a reward for supplying funds to the pool.

    DuckDAO’s Native Token ($DUCK)

    DUCK token is the DuckDAO’s native utility token, which also powers the incentive model for the Duck Liquidity Pool. The token has the following use cases:

    • Yield farming on Uniswap pools – Staking tokens help contribute liquidity to DUCK and DDIM pools. For this, they earn profit through DLP.
    • Reward token for market-making profit – Half of the profit from the market maker is returned to the community who belong to the liquidity pool. If the performance of DLP is good, the profit for the yield farmers grows in proportion as well.
    • Project token airdrops
    • Non-fungible token as reward

    Deflationary Farming: “One-Side-Burn”

    This is touted by the team as “Yield Farming 2.0,” which is designed to support a deflationary, unilateral burning of tokens. To understand how this works, we must first look at how the current yield farming mechanism works.

    The Usual Scenario for Most Liquidity Pools

    Commonly, yield farming pools in the DeFi space look very advanced for the average trader. Not only does this create a psychological barrier to entry, but it also makes profit-making a little more difficult for someone new to yield farming.

    Another issue that traders face is the inflationary structure of the incentive mechanism in most liquidity pools. This is because, in order to provide rewards to yield farmers, mined tokens have to be released into the market. This model isn’t designed for long-term effectiveness since with more reward tokens in supply over time, we can expect its value to depreciate as well.

    Duck’s Unilateral Burn

    $DUCK, on the other hand, is designed to support long-term yield farming strategies. Even beginners on liquidity pools can just stake and earn a part of the profit that DuckDAO’s market maker gets.

    $DUCK One-Side-Burn Deflationary Model (Source: DuckDAO website)

    One-Side-Burn is a deflationary model that is designed to burn 50% of the carry pair as soon as the liquidity provider decides to cash in a portion of his stake.

    What happens in such a situation is that users lose one side of their liquidity as the tokens are burned. And when someone decides to exit the pool completely, his entire liquidity is also burned and further lowers the DUCK tokens in supply.

    While this model may seem counterintuitive for profit-earning at first, over-time, the value of the tokens is going to be greater than what it was when a user has staked in the pool. That is why DLP’s design appears to be much better in the long run.

    Duck Liquidity Pool Market-Maker Models

    Project Token Purchase

    DLP purchases tokens in order to facilitate buy and sell liquidity.

    Duck Liquidity Pool Business Model – Project Token Purchase (Source: Duck Liquidity Pool (DLP) Blackpaper)

    Project Token Borrow

    DLP loans tokens against collateral in order to facilitate buy and sell liquidity.

    Duck Liquidity Pool Business Model – Project Token Borrow (Source: Duck Liquidity Pool (DLP) Blackpaper)

    Fixed Fee Model

    The protocol can charge a fixed service fee for listings that have decided to provide buy and sell liquidity on their own.

    Duck Liquidity Pool Business Model – Fixed Fee Model (Source: Duck Liquidity Pool (DLP) Blackpaper)

    Conclusion

    DeFi has enabled the birth of new profit-making strategies for traders in the space. However, whether existing liquidity pools can support long-term yield farming models is another question altogether. DLP’s model, which is powered by the ‘unilateral burn’ design, appears to be more promising.

    To be fair, like many other pools, the profit it can generate for stakers is also influenced by the number of users joining the pool. This is why it is important to look into that as well before deciding to lock your tokens and supply liquidity to the pool.

    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.

  • ChainLink ($LINK) guide: A key link in the DeFi space

    ChainLink ($LINK) guide: A key link in the DeFi space

    ChainLink ($LINK) has been a standout project in the cryptocurrency industry since its creation in 2017 by San Francisco based company, SmartContract. The Company is renowned for being a decentralised oracle solution, they act as a middleware agent between traditional data sources, blockchain projects and smart contracts (which drive Decentralised Finance (DeFi) projects) using their $LINK token. Partnership wise, the Company has been linked with national governments like the Chinese government and are consistently building new partnerships with major brands. Clearly, ChainLink is a company that any crypto or blockchain enthusiast should have an understanding of, so here we have compiled a complete guide to this revolutionary project.

    ChainLink has prominence because they solved the Oracle Problem. The oracle problem originates from an issue with smart contracts, which are coding instructions that would automatically execute under specific conditions on blockchain networks. Smart contracts are. also immutable, cost effective and self-executing, so technically they are perfect for automating transactions which are transparent and have zero chance of failure. These smart contracts derive their data from “Oracles” (i.e. data sources, APIs etc) , and this is where the problem lies. Smart contracts are only as “smart” as the information fed to them by the oracles. If you feed a smart contract with malicious code or bad data, the smart contract will still process it anyway because it is just code, and what comes out would be incorrect or unpredictable. This is known as the “Oracle Problem”.

    That all changed when ChainLink worked out how to retrieve and share information from the Oracles without jeopardizing the security of the blockchain. This was by creating a decentralized blockchain that bridges between the Oracles and the smart contracts. While researching this, I stumbled upon a 스포츠토토 사이트 추천, which provided insights into secure and reliable platforms for sports betting. The system is built on a collection of individual nodes that act as smart contracts on their own to gather the information and, as a result, have created a smart contract infrastructure. Now, instead of having to blindly trust a source, smart contracts can access resources like data feeds, traditional bank account payments, and web APIs.

    ChainLink infrastructure
    ChainLink infrastructure (Image credit: Data Driven Investor)

    Why is this important? It is because ChainLink believes its technology will do away with traditional legal agreements and instead the information will be stored on blockchain forever. 

    ChainLink is also relevant to the cryptocurrency industry because its Oracles also provide a solution for decentralized applications (dapps) as they too provide a bridge to the outside world.

    The $LINK token is ChainLink’s native cryptocurrency and was set up on the Ethereum network using an ERC677 token whose functionality is based on the ERC-20 token standard, it also boasts ‘transfer and call’ functionality. The $LINK token is used as staking for a bidding system for provision of information and for rewards, as will be seen in the following paragraph.

    The decentralized oracle network works through a two way system between those who wish to purchase data and those who bid to be the providers of the said data. Providers, also known as “Node Operators” stake ChainLink’s $LINK tokens to make bids to the intended data purchaser. If they win, they must provide the information required by the purchaser on chain through their APIs. The “winning” Node Operator’s payout is determined by the number of operators using the site, and the Oracles implement this decision. Payouts are in the form of the $LINK token. 

    This system has a number of benefits. When ChainLink is popular with Node Operators, then their value increases. Not only that, but Node Operators are also rewarded for accumulating $LINK tokens through easier access to larger contracts, also increasing $LINK’s value. Those who act maliciously, however, are punished by removal of $LINK tokens. 

    As you can see the $LINK token allows for self regulating governance of the ChainLink network. Some have suggested that payouts needn’t be in $LINK, but rather any other cryptocurrency would have done the job. Yet, ChainLink’s price performances in recent times have suggested the team in San Francisco were right to go down the native token route.

    The $LINK token can be traded on exchanges and is gaining in popularity too. Currently it ranks as the 8th highest market cap according to Coingecko. Available on most major exchanges like Coinbase Pro, Binance and OKEX ChainLink’s token has been a standout performer in recent months. Check out our Coinbase Pro review, Binance review and OKEX review.

    Unlike other companies who rely on PR and word of mouth to promote themselves, ChainLink has gone about it by courting various companies and governments around the world. Their CEO Sergey Nazarov has been on a charm offensive for a while and has secured numerous allies. This is because ChainLink provides businesses the benefits of decentralization, trust and immutability, all without them having to make a new system. Here’s some of ChainLink’s key partners.

    Other Cryptocurrencies- Bitcoin and Hyperledger

    In terms of the cryptocurrency field, ChainLink’s oracle services are available on other blockchains such as Bitcoin and Hyperledger. This openness has also opened up the door for a number of high profile partnerships with other blockchain projects that have made commentators and traders take notice of the Company.

    Synthetix Network

    In March 2019, ChainLink and Synthetix announced a partnership with the aim of improving the Synthetix platform’s price feeds. SNX, the company’s native token, receives data feeds using Chainlink’s decentralized oracle network. 

    Celer Network

    ChainLink has been used by Celer to bring accurate real world data to their layer-2 scaling solution. Now, payments executed off chain can be registered on chain making the real world and blockchain more cohesive. Their joint statement described their union as, “a combination of off-chain conditional state transition with an on-chain oracle dependency. Or put it simply, introducing the capability to combine real-world information and layer-2 scalability.”

    ChainLink and their oracles are not just reserved for the cryptocurrency industry. The use cases and partnerships stretch to major internet companies like Google. The search engine company integrated ChainLink’s oracles for its blockchain cloud service. According to a blog post, the oracles will help with data communication between Big Query and other blockchains on the cloud.  

    Chinese Government Blockchain Service Network (BSN)

    In June, the Chinese state backed Blockchain Service Network (BSN) announced its intentions to bring ChainLink in on a consultancy and application basis to help develop the BSN. Reports at the time suggested ChainLink will foster the creation of a “service hub” which would form the bedrock of its “internet of blockchains.” For a full breakdown of the partnership which also involved Cosmos, click here. 

    SWIFT 

    SWIFT is a major financial institution/telecommunications company which connects the banking world. They have brought ChainLink on board and are regularly using their technology. SWIFT began using ChainLink’s technology as now any real-world money transfer can be sent into the blockchain from SWIFT via Chainlink. So ChainLink now allows cohesion between traditional banking and the crypto sphere. 

    Other partnerships

    The partnerships don’t stop there. ChainLink has teamed up with betting company, BetProtocol to provide decentralized Esports and Sports Oracles on their website. DocuSign, an online contract company has also brought them onboard. 

    Overall, it is clear that ChainLink is an important figure within the blockchain and cryptocurrency industry. Quite how important the oracle technology proves to be will be easier to judge as the world understands and develops blockchain technology. Though currently, all signs point towards a more optimistic outlook

    As for the $LINK token, they are clearly a standout which has risen rapidly in the past few months, having gone from $3.72 in early May 2020 to reach a new all-time high of over $14. In fact, as a Forbes report noted in July 2020, the $LINK token has “soared 1,000% in just over 12 months”. One factor in the token’s recent success is the increase in partnerships since 2019. Another reason is definitely the recent DeFi fever, especially since ChainLink and the DeFi space are so interlinked as ChainLink provides oracles for the smart contracts that power various DeFi projects.

    We can also see that people also have positive thoughts on the project, a huge majority of users on Coingecko voting positively.

    Zeus Capital, purportedly an asset management and research firm published a report on 15th July 2020 accusing Chainlink of being a classic “pump and dump”. The Report alleges ChainLink of using techniques such as inside trading, artificial transactions, overhyping the project, and questioning whether ChainLink actually has partnerships with companies like Google and Oracle. According to Zeus Capital, this was to drive up the price of $LINK prior to the team dumping the coin onto innocent investors. They concluded their Report saying that “Based on our findings we have opened a short position in LINK and recommend you doing the same with a target price of USD0.07 and potential upside of nearly 100%.”

    In addition to promoting the Report through advertisements on Twitter, screenshots have also been circulating saying that Zeus Capital was offering Twitter cryptocurrency influencers rewards of up to 5 Bitcoin to post price analysis indicating that LINK prices would fall.

    Twitter user @iceberg trolls Zeus Capital asking for 5 BTC to post bad chart and Zeus Capital actually seems to accept the offer.

    Supporters of ChainLink retaliated, accusing Zeus Capital of spreading fear, uncertainty and doubt (FUD). On the day the Report was published, prices for LINK went up to $8.73. Meanwhile, the real Zeus Capital, a prominent investment banking operation based in London came forward on 20th July 2020 to say it did not produce the Reports.

    Zeus Capital then doubled down on their allegations against ChainLink by publishing a follow-up report on 31st July 2020 titled “Exposing Chainlink’s Pump and Dump Scheme”. They also doubled down on their stance in the Report: “The current tokenomics and lack of commercial applications cannot justify LINK’s price. As a result, we recommend short selling LINK with a target price of 7 US cents”. The Follow-up Report also concludes with a disclosure that they hold a short position on $LINK.

    Despite these damning reports, prices for LINK continued to remain strong. This meant that those who were shorting LINK, i.e. counting on prices to drop, were getting squeezed out of their positions. This all came to a head on the morning of 8th August 2020 when prices for LINK crossed over the USD $11 threshold. During that time, data showed that millions worth of Chainlink short positions were partially or fully liquidated. A notable example of this was a short position worth around USD$20 million which seems to have been entirely liquidated, leaving the wallet pretty dry with only USD $299.66 remaining.

    It is noted that there is no conclusive evidence to say that any of these liquidated accounts belonged to Zeus Capital. However one thing is certain- ChainLink, helped by its supporters i.e. the Link Marines were able to successfully shake off the FUD. And as at the time of this update, LINK prices had peaked at USD$14.34, almost double the prices when the first Report was published.

    2020 has been a favorable year for Chainlink ($LINK). It has been one of the best performing coins and secured its spot in the top10 assets ranking by mcap. It is now sitting at n°9 with a market cap close to $8 billion dollars.

    Chainlink is widely recognized as the most used oracle in crypto and has been a backbone for Defi’s explosion. Many are the collaborations announced, over 300, not only on the Ethereum blockchain. Chainlink is also expanding to other chains such as Polkadot and Tezos. Results have exceeded expectations and the company has also been recognized, among 6 other blockchain companies (Lightning Labs, MakerDAO, Elliptic, Bitmark, Ripio, Veridium Labs) by the World Economic Forum among the 100 most promising Technology Pioneers of 2020.

    The team has allegedly doubled its size and acquired important strategic pieces. Ari Juels, now Chief Scientist at Chainlink Labs, was one of the 2 writers of the first Proof of Work paper. He has also developed Deco, a privacy-preserving technology now acquired by Chainlink, at Cornell University together with other researchers.

    “Deco allows oracles to attest to the validity of information in trusted databases/systems without exposing it to the public or even the oracle itself using … Zero-Knowledge Proofs. Essentially, the oracle can join a user-initiated web session to attest to some requested information— possibly to verify someone’s identity, approve their financial information, or check key government records”.

    The data will never leave the selected database so the info will remain stored in trusted locations, enhancing the privacy and usability of the blockchain. An important possible application could be transactions that can meet KYC (Know Your Customer) or AML (Ant Money Laundering) requirements without exposing sensitive information on-chain.

    2021 looks certainly promising. The company will continue with its focus on security while bringing as much data as possible on-chain, from different sectors. This will provide huge improvements and development to the whole crypto space.


    Sources: Decrypt, Maxbit

    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.

  • Polkastarter ($POLS) – Kickstarter for Cryptocurrencies?

    Polkastarter ($POLS) – Kickstarter for Cryptocurrencies?

    Polkastarter ($POLS) is a cross-chain decentralised protocol, powered by Polkadot, that allows start-ups to raise funds in a decentralised and interoperable environment.

    In 2020, the decentralized finance ecosystem (DeFi) recorded encouraging figures in the number of DeFi protocols, as well as the number of funds locked in these platforms. On the number of protocols, the platforms addressed different spheres such as lending, trading, and insurance.

    Unfortunately, not many protocols touched on revolutionizing conventional fundraising models such as initial coin offerings (ICOs), initial decentralized exchange offerings (IDOs), and initial exchange offerings (IEOs).

    However, projects like Polkastarter are on their way to bring a sigh of relief to startups looking for innovative ways to attract funding. Before we dig deeper into the project and what it brings to startups, let’s take a look at the group behind it.

    Background

    Daniel Stockhaus and Tiago Martins are the top brains behind Polkastarter. As project co-founders, Stockhaus is the CEO, while Martins is the CTO. Notably, the two have vast experience spanning from tech entrepreneurship to software development.

    Other members of the team include Danilo Carlucci and Matthew Dibb. Carlucci is a serial entrepreneur and angel investor, while Dibb is a strategic advisor.

    What is Polkastarter?

    Polkastarter is a decentralized platform enabling startups and other projects to attract capital through token auctions and inter-blockchain token pools. As you would have guessed from its name, the project is built on the Polkadot network that sits on Ethereum.

    Polkadaot Network

    Stockhaus settled on Polkadot because of the network’s major strengths in scalability, speed, interoperability, upgradeability, and governance. To elaborate, Polkadot surpasses Ethereum and Bitcoin transaction speed thanks to its use of parachains, which power horizontal scalability, and Grandpa consensus mechanism, which drives vertical scalability.

    Polkadot’s Proof of Stake consensus, GRANDPA (Source: Polkadot Wiki ‘Polkadot Consensus’)

    Polkastarter taps into these strengths to enable governance through community voting and staking. The network also relies on Polkadot to drive liquidity mining.

    Using these features, the project scores better than existing decentralized exchanges and swap protocols such as Uniswap, Bounce, and Primablock. For instance, these networks don’t support cross-chain pools, while Bounce and Primablock support a limited array of virtual assets.

    Polkastarter’s Use Cases and Major Features

    Polkastarter expands outside the fundraising space to crowdfunding and allows participants to benefit from discounted sales. Additionally, the protocol can increase privacy to over the counter deals by enabling password protection during such trades.

    The network differs from other similar projects since it allows:

    • Inter-chain swaps
    • Fixed and dynamic swaps
    • Community voting on critical governance issues
    • Decentralized and permissionless token listing
    • Comprehensive Know your customer (KYC) procedures
    • Users to spot scams from a distance through a built-in anti-scam feature

    Notably, combining these features brings low-cost transactions, fast cross-chain token swaps, the ability to move virtual assets across decentralized platforms, and a user-friendly design.

    How Polkastarter Handles Fixed Swaps?

    Fixed swaps pools are significant components of the network. Unlike with automated market making, fixed swap counteracts price volatility. Also, fixed swaps provide a greater level of transparency on the amount raised during fundraising.

    Polkastarter employs fixed swap pools instead of AMM swap pools. This approach solves, among other challenges, the risk of private investors artificially inflating the price and dumping their holdings and the cost of token offerings.

    Additionally, fixed swap pools ensure a fair distribution of tokens while eliminating the risk of rug pulls in a liquidity pool.

    Note that instead of using a bonding curve approach to determine token prices in a pool, Polkastarter sets a fixed price when swapping tokens. As such, it’s possible to add other parameters, such as how much a single user can contribute to a project. Additionally, it’s easier to set more parameters to ensure transparency and fairness on new token holders.

    Immediate advantages of using fixed swaps are:

    • The amount raised and tokens sold can easily be calculated.
    • It attracts investors distributed both demographically and geographically.
    • Token holders are given a chance to acquire tokens at a standard price.

    Polkastarter’s Native Token ($POLS)

    Tokenomics

    The network has a native token called $POLS, which it uses for various sections on the platform. POLS’s total supply is 100 million tokens. Exactly 42.5 percent of the tokens were sold during the seed sale, private sale, and Uniswap listing. Other tokens went to the marketing fund, team, advisors, and foundational reserve.

    $POLS Token Distribution & Utility (Source: Polkastarter Docs – What are the Tokenomics?)

    Funds raised during the sales periods went into legal/accountancy (5%), ecosystem growth (20%), liquidity/exchanges (30%), and product development (45%).

    POLS is used on the Polkastarter ecosystem as a utility token. Among its major uses are governance and fees.

    As a governance token, its holders can vote on crucial matters such as protocol features and tokens to be displayed on the network. On fees, transactions on the platform are paid using the native currency.

    Other Utilities

    • Staking – The token can be staked to earn staking rewards on various fronts. For example, it can be staked to receive pool rewards or for pool access. Note that the option to stake POL for pool access is solely upon pool creators. However, the choice is ideal for giving top liquidity providers private access to high-end pools.
    • Liquidity mining – Additionally, Polkastarter’s native currency can be staked to participate in liquidity mining. Rewards are distributed to entities providing liquidity on the secondary markets, among other subsections.

    Two Key Partnerships With Polkastarter

    Although Stockhaus and the team have inked many partnerships with reputable decentralized platforms, two stand out.

    Polkastarter and Covalent

    Covalent is a platform capable of fetching intricate details about a crypto wallet. As such, it allows Polkastarter and its users to check the trustworthiness of a token contract. The users have access to the token contract age, verification, transaction volume, among other details.

    Polkastarter and DIA

    Decentralized Information Asset (DIA) is a platform that provides distributed oracles on Polkastarter. Thanks to the exceptional qualities of its oracles, DIA helps Polkastarter provide warnings against massive price slippage.

    Other partnerships involve Moonbean, Shyft, and Orion Protocol.

    Conclusion

    By using fixed price swaps instead of AMM, Polkastarter sets the bar higher in decentralized funding. It adds the transparency and fairness aspect that has been missing on similar platforms. The projectl’s partnerships with Covalent and DIA gives its users peace of mind knowing that they can pick a suspicious project from the crowd and avoid price slippage.

    Furthermore, Polkastarter’s native token opens the door to distributed governance while giving its holders an extra way to earn rewards through staking.

    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.

  • WAX ($WAXP): The King of NFTs?

    WAX ($WAXP): The King of NFTs?

    WAX Protocol ($WAXP) stands for Worldwide Asset eXchange. They are one of the safest and most convenient ways to create, buy, sell and trade virtual items i.e. non-fungible tokens (NFTs) through an integrated DPoS blockchain platform designed to work hand-in-hand with a microservice layer to improve the digital goods market’s infrastructure. Obtaining WAX knowledge has enabled innovators to develop a highly-connected and sophisticated marketplace that has brought a lot of value in digital goods projects.

    This information here will help you learn how to incorporate the WAX Protocol within the WAX Platform and how the two tools complement each other. It’s worth noting that the WAX Platform is composed of the WAX Protocol and a microservice layer.

    Learn more about WAX with our interview with Evan Vandenberg, Director of Business Development at WAX.

    Profitable digital collectibles and blockchain gaming (with WAX blockchain)

    Background

    The WAX platform was founded by William Quigley and Jonathan Yantis, together they have vast experience in blockchain technology. Quigley is also the Managing Director of Cashel Enterprises, a cryptocurrency-focused investment vehicle which has incubated and invested in over 40 blockchain and cryptocurrency projects. Meanwhile, Yantis also works as WAX’s CEO.

    The global growth of the digital goods marketplace has experienced enormous challenges for the past decade, but WAX technology has helped in finding solutions that spur the development of the sector. Although some users think that the technology has arrived late when challenges are already overwhelming, it’s actually the perfect time since blockchain has matured enough to satisfy the requirements for the WAX system to succeed.

    As the digital goods market continues to expand, it’s essential to acknowledge that tokenized consumer products and virtual items have played an instrumental role in blockchain growth. Virtual items like in video games alone have generated more than USD$140 billion for the market. On the other hand, tokenized consumer products have realized over USD$1.8 trillion.

    Considering that WAX attempts to offer remedies for a marketplace with a combined market value of over USD$2 trillion, it’s easy to realize the magnitude of the problem. The first year of incorporating WAX Protocol operations on major players like VGO and dApps has realized over USD$150 million worth of trading volume.

    What is WAX?

    Wax is a marketplace for digital assets, serving more than 400 million online players that sell, buy, and collect in-game items. Their suite of blockchain-based tools allows people to trade digital or physical items instantly and securely to anyone in the world. WAX’s platform brings together a community of collectors and traders, buyers and sellers, creators and gamers, merchants, creators of dApps and even game developers.

    Examples of what WAX can do include buying and selling gift cards to people across the globe, or building your own online store using the B2B tools created by WAX. WAX also allows people to create NFTs and send them to others.

    WAX Blockchain

    The WAX network works on a consensus model that relies on various WAX Guilds to enhance blockchain production. WAX utilizes Delegated Proof of Stake (DPoS), which depends heavily on WAX Guilds to ensure success in blockchain generation.

    The WAX ecosystem has witnessed considerable growth due to the incorporation of the WAX Token Model, which is designed to ensure success in various aspects such as voting, staking, and rewards. The Wax Staking Reward is a feature that has encouraged community participation because it allows users to vote and access rewards.

    With WAX tokens, users have immense options to explore. For instance, if staked WAX tokens haven’t been placed, a token holder will require platforms such as Scatter and Lynx to automate the process.

    WAX Tokens ($WAXP)

    WAX tokens ($WAXP) power the entire WAX ecosystem. They are used to reward participants in the chain and enable contributors to receive ten times the number of tokens purchased. This strategy makes it easier to calculate all microtransactions on the platform.

    One benefit of owning WAX tokens is that you get to earn even more tokens by voting for WAX guilds. This is called the WAX staking reward. This process is hassle-free and takes just a minute or two to join. Furthermore, you can unstake your tokens at any time.

    WAX and DeFi? WAX’s new tokenomic model explained

    In a recent announcement, WAX mentioned they will have a new tokenomic model hoping to capitalise on the rapid growth and popularity of NFTs and decentralised finance (DeFi). Their plan is to link the value generated from creating, selling and trading NFTs to Ethereum. WAX considers it different from other DeFi platforms because they consider these activities to be able to provide a sustainable source of value to stakers.

    How the new WAX inter-blockchain tokenomic model would work is that the operational functions of NFTs would still be done on the WAX blockchain, whilst Ethereum will become, “…the capital vault of the WAX NFT empire”. There are 4 components to this new tokenomic model, namely:

    • WAXP to Ethereum bridge: this new bridge will enable WAXP token holders to convert their tokens into WAXE.
    • WAXE: WAXE is a new Ethereum ERC20 utility token. Participants of the WAX tokenomics will need to burn their WAXP tokens to get WAXE tokens via the Ethereum bridge. They would then stake the WAXE in the Ethereum Distribution Contract.
    • WAXG: WAXG is a new Ethereum ERC20 governance token which will be distributed to WAXE stakers based on a set timetable and proportionate to their percentage of the WAX Economic Activity Pool. Token holders will be able to govern the allocation and distribution of economic value on the platform.
    • WAX Economic Activity Pool: This is a smart contract which will accumulate a percentage of generated WAX fees to be converted to ETH for distribution to WAXE stakers or given to WAXG token holders that decide to burn their tokens.
    WAX tokenomic process
    WAX tokenomic process (Image credit: Medium)

    For full details of WAX’s new tokenomic model, check out their article on Medium.

    WAX Guilds and Rewards

    A WAX blockchain contains 21 WAX Guilds that qualify to earn a reward. Remember, blocks can only be produced after the chain meets the threshold to earn rewards. The rewards are awarded depending on the number of blocks that every WAX Guild can produce. Standby Guilds are considered as backup operators that help to generate a chain on request.

    WAX Performance Metrics

    WAX has been configured in such a way that it releases two blocks per second. It’s worth noting that each WAX Guild can only produce one block at a time. If a block fails to come out at a specific time, other blocks will jump the queue to ensure a continuous process.

    A block that has been skipped will contend for a space in the memory pool to compete for guilds’ inclusion in the next turn. More than 3000 blockchains are usually transacted each second in the WAX system. The transaction rate is two times swifter than the VISA system can procure in the same period.

    The Future of WAX technology

    WAX Platform doesn’t only work to offer remedy for the current problems but also offers a roadmap for future operations. WAX Developer Hive is tasked with the duty of technical service provision, tutorials, and other simulations. Besides, WAX developers equally provide vital resources that make implementations successful.

    The technology has also incorporated features that will make it convenient to evaluate whether the system passes the transparency test among communities.

    Also, there’s room to allow interoperation with other chains to enhance performance. NFTs are among the candidates that need microservices and can thrive with the WAX Platform.

    Conclusion

    Gamers from across the world can substantially benefit from its secure and decentralized digital items marketplace. As WAX Platform continues to provide more improvements, developers will find several ways to create features that would better serve gamers in terms of digital goods trading.

    The platform is also expected to play an instrumental role with digital media and is set to welcome over three billion users in the coming five years.  

    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.