Cryptocurrency would essentially be useless without the ability to store, send, receive and make use of its special features. In this section we provide overviews and tutorials for crypto tools which can help you use cryptocurrencies to its fullest potential.
We look at the differences between the types of cryptocurrency wallets and some of the most well-known brands on the market today to help you choose which one is the best for you to store your cryptocurrencies safely, and troubleshooting tips such as what to do when your transactions are stuck. Exchanges are also an integral part of dealing with cryptocurrencies because they let you convert between different cryptocurrencies, and even fiat currencies. Therefore, we compare different exchanges to see which has the best features for your use, and some tips and hacks to save money on these exchanges.
Aries Market is a decentralized cryptocurrency exchange built on Move, the same programming language used by Aptos to build its blockchain. Aries Market provides a wide range of decentralized finance (DeFi) products such as borrowing, lending, and margin trading on 1 single platform. Products include lending, borrowing, margin trading, swapping, and account risk management.
What is Aries Market?
Aries Market is a decentralized crypto exchange offering a wide range of DeFi products on a unified platform. On Aries Market, users can have a unified margin account on which they can borrow from various liquidity pools, earn interest on deposits, and do swaps and trades.
What products are available on Aries Market?
Aries Market is currently in a “soft launch” phase where all its features are not available yet. At present, the following products are available on Aries Market: lending, borrowing, swaps, and global account management. Notably, trading features are not yet available on Aries Market.
There are, however, deposit limits for the available asset pools on Aries Market. The limits are as follows: 4 million zUSDC (LayerZero), 4 million USDC (Wormhole Bridge), 500,000 APT, 10,000 SOL.
Aries Market
Supported assets
Aries Market currently supports the following assets: zUSDC (LayerZero), USDC (Wormhole Bridge), APT and SOL. The team expects more assets to be listed soon.
Coming soon on Aries Market
The Aries Market team expects the following features to be available in the coming months:
Full set of features will be available on Aries Market;
integration of Aries Market with Aptos; and
Gamified events and campaigns on the Aries Market and Aptos community.
Magic Square is one of the upcoming projects that is highly anticipated by the crypto community. Imagine Apple’s App Store or Google’s Play Store integrated with blockchain technology and driven by the community. This web3 solution offers a way to simplify crypto applications hence driving adoption, creating one integrated ecosystem for all crypto apps and activity.
Magic Square’s innovation has gained the attention of many heavyweights in the crypto industry including Binance, KuCoin, and DAO Maker. All you need to know about Magic Square is in this article, made simple to understand and updated in real time.
What is Magic Square (SQR)?
Magic Square is more than a web3 app store hosting a multitude of decentralized apps (DApps) such as DeFi, NFTs, and GameFi. In fact, Magic Square has their own ecosystem which allows any user to earn crypto from using the app. We will explain this in detail later.
But first it is important to understand why a project like Magic Square might just be the missing link in driving crypto adoption.
However, with so many crypto apps scattered on the market, there is no established platform that can host them all in one place. As a result, navigating in the crypto space can be a chaotic and cumbersome experience for both users and blockchain developers alike.
For users, there is no all-in-one platform where they can easily discover, access, and manage vetted crypto apps.
For developers, there is no real multi-chain service that allows them to monetize their apps and market them to users.
Magic Square’s Solution to Web3 Pain Points
Magic Square has a built-in Decentralized Autonomous Organization (DAO) structure in which all users and developers have a say in the DApp quality control and listing process. This means that the app store is governed by the community, and they are incentivized to vet all DApps coming through the platform. Based on the principles of decentralization, this provides a secure environment for all users to engage with the listed DApps on Magic Square, as low quality projects and potential scams are filtered out, similar to how invalid Bitcoin transactions are rejected by the miners.
All in all, a decentralized crypto app store powered by the community as well as providing useful tools for blockchain developers could be the key to organize all DApp activities in one established platform. This would help bring order, ease, and trust to the crypto app space, which would help develop the infrastructure that powers the growth and success of the crypto industry. Now, let’s take a look at the key features of Magic Square and how their ecosystem functions as a whole.
Key Features of Magic Square
Magic Store& Magic Spaces
Magic Store is where users can browse and download DApps, similar to Apple’s App Store or Google’s Play Store. Within Magic Store, users have a personalized dashboard called Magic Spaces where they can access all of their DApps and track their app activity in one place. By clicking on the DApp, it will be opened inside the tabs within the user’s personal space. This is a convenient feature as users do not need to switch between websites or crypto apps on their device. Additionally, Magic Spaces is fully synchronized across all devices, including desktops, web browsers, and mobile devices.
MagicID(SSI & DIDs Technology)
Users do not have to give up control of personal information to centralized databases like Apple or Google. Thanks to MagicID which is their Self-Soverign Identity (SSI) and Decentralized Identifiers (DIDs) technology, Magic Square ensures that the verifiable credentials a user has can only be shared with DApps or other users they deem trustworthy.
SSI allows users to use their digital wallet and authenticate their own identity using the credentials they have been issued. This works in conjunction with DIDs, which creates unique, private, and secure peer-to-peer connections between two connection points. Users know who they are connecting with and vice versa, and no third party can interfere in any way. The platform only collects and aggregates on-chain data about users’ app activities, which they can provide relevant and up-to-date information for users, similar to YouTube’s algorithm. Magic Square does not hold any personal data of their users.
Magic SDK
Magic Square is developing their own SDK that allows developers to enhance their development process in various ways. Its tools are built to optimize payment system with subscription model, wallet infrastructure, trading data aggregation, on-chain data, Automated Market Making (AMM) solutions, in-app token and NFT staking, community management, and more.
Magic SDK supports common programming languages such as Java, Node JS, C++, which is easy to use for all levels of developers. In addition, the SDK is open-source, allowing every developer to add new tools that can be used by the community of developers. These tools would be vetted by certified auditors to ensure security. For more information on Magic Square’s SDK and their technical product description, their white paper is available.
Cross-Chain Bridges
Magic Square will implement cross-chain bridges using deBridge technology, allowing users and developers to transfer data and liquidity across different blockchains and protocols. This can help developers integrate their DApp from different blockchains into Magic Square. Moreover, its cross-chain functionality allows for integrated DeFi solutions in Magic Square, which we will talk about next.
Integrated DeFi Services
Magic Square’s business model is based on revenue sharing with all pre-integrated CeDeFi solutions that will also be available to the community. These solutions include token/NFT staking, custody services, AMM pools, payment, lending, swaps, and insurance. They will be fully integrated into all DApp pages, supporting their native currencies and protocol. That way, users do not need to leave the app to access related DeFi products and services.
Moreover, any third party DeFi provider can apply to add their service in Magic Square. If they are approved by the community, their service will be added to the catalog of DeFi services in which DApp developers can use to add on their app page. For each transaction with a third party solution, Magic Square will charge payment based on transaction cost charged by the third party. This revenue will then be shared with the DApp developers, even free-to-own DApps can earn money this way.
This is how Magic Square makes money and how they fund their community reward pools to distribute SQR tokens to users, which we will cover next.
How to Earn on Magic Square?
Magic Square Token (SQR) – Utilities
The Magic Square (SQR) token is the primary unit that powers the ecosystem. Within the ecosystem, there are three types of members that play a vital role in running Magic Square: (1) users, (2) validators (3) creators. Each of them also has different ways to earn SQR tokens.
Users
Anyone who interacts with the DApp store is considered as a user. Magic Square’s core model “use-to-earn” distributes SQR tokens for all users for their in-app activities, which include downloads, comments, ratings, follows, shares, reviews, and using DApps. Individual DApps can even reward users for reviews with their own native app token, giving users the ability to earn double.
The SQR token rewards are based on the personal ranking of the user which is called “Magic Karma.” All in-app activities are summarized and quantified on a daily basis in the Magic Karma score. The higher the user’s score, the more rewards they can earn. As cited in their lite paper, users can “earn SQR tokens without investing their money, just their time.”
Users can also stake SQR tokens to unlock different levels of Packages which grant them additional perks. “Base Package” requires 150 staked SQR for unlimited DApp downloads. “Pro Package” requires 500 staked SQR for daily rewards and referral bonuses. Lastly, “Influencer Package” requires 1000 staked SQR and a high Karma score to unlock daily reward boosts and access to Magic Square events and exclusive contests etc.
Validators
To fill the role of Apple/Google engineers, Magic Square has validators to determine which DApps to feature in the store. There are three types of validators: (1) qualified validators, (2) nominees, (3) standard validators. Although all community members are eligible for these roles, there are certain conditions that must be met.
To become a qualified validator, you must stake 5,000 SQR tokens, and pass a qualification test to demonstrate your level of knowledge and competency. Qualified validators can also transfer validating rights to nominees. However, nominees must also pass the qualification test, but do not need to stake SQR tokens. On the other hand, any user can register as a standard validator without passing the qualification test or stake SQR tokens.
80% of the DApp creator’s validator fee is rewarded to qualified validators, which a portion of it is also shared with the nominees. The remaining 20% is rewarded to standard validators.
Creators
All DApp developers and their project team are considered as creators. For creators to have their DApp listed on the Magic Store, they would have to send 10,000 SQR via smart contract, where 35% is paid to validators, 15% is paid to Magic Square, and 50% is staked for the period the DApp is listed in the Magic Store.
From the list of pre-integrated DeFi services, creators can choose to add them in their DApp page, allowing them to manage their liquidity through in-store interaction. With a higher rate of DeFi adoption by users, creators can efficiently engage with their target audience and increase market penetration.
Furthermore, each newly listed DApp can apply for a grant of up to 200,000 SQR tokens to be used by the creators to build and improve their product. However, creators must first stake the number of SQR tokens to match the amount they are requesting, for 12 months. The grant would be decided through voting processes by the validators.
Who is the Team behind Magic Square (SQR)?
Magic Square is co-founded by Andrey Nayman (CEO) and Benjamin Vodovozov (CMO), both who are seasoned entrepreneurs and mathematicians who have decades of experience in quantitative analysis and performance marketing.
The team consists of a first-class group of industry professionals, blockchain veterans, software developers, and crypto enthusiasts. Their goal is to gradually influence a widespread organic shift to the web3 space, and they aim to achieve that by developing infrastructures that power the growth of the crypto app ecosystem.
What’s Happening with Magic Square (SQR)?
In July, Magic Square concluded a $3 million seed round investments with an evaluation of $30 million, led by Binance Labs and Republic Capital. Mia Mai, Investment Director at Binance Labs, commented that they see potential in Magic Square, especially in their user-friendly designs and business model as a Web3 DApp store. They believe that the product suites of Magic Square can potentially be the driving force of Web3 ecosystem mass adoption and implementation.
Magic Square is definitely bringing something new and innovative to the crypto space. Its product could essentially organize all DApp activities that are scattered throughout the market, making it easily accessible to crypto users and newcomers. Magic Square published their roadmap, stating that their token will be released in Q1 2023. We are now witnessing many crypto heavyweights such as Binance recognizing the potential of Magic Square and their ability to drive mass adoption through simplicity.
As Ethereum is steadily approaching the transition to a Proof-of-Stake mechanism, one notable thing that has changed, aside from further protocol development, has been the change in terminology.
We have already covered Ethereum 2.0 extensively in one of our ongoing blogs where we go in-depth on everything you need to know about Ethereum’s transition to PoS:
Let’s take a closer look at the rebranding from Ethereum 2.0 to the Ethereum Merge, as well as go over the most recent developments in Ethereum’s roadmap as of May 2022.
Check out our latest video- Ethereum Merge: ALL you need to know (including ETHPOW)
Ethereum Merge: ALL you need to know (including ETHPOW)
The move away from using the former term “Eth2.0” that signified the final transition from PoW to PoS was a result of several different developments and considerations, both technical and cultural.
On the technical side, the use of Eth2.0 started to become an inaccurate representation of the PoS transition. Originally, the Ethereum 2.0 roadmap envisioned that both the Phase 0 (Beacon Chain) and Phase 1 (Sharding) would be completed before the final transition. (Clonazepam) But the Beacon Chain was developed faster than expected, making researchers realize that the final migration to a PoS mechanism would be delayed by years due to the focus on sharding. In addition, the ever-growing pressure from the masses about the environmental impact of PoW chains made the migration to PoS that much more pressing.
As the Beacon Chain was deployed, Ethereum L2 rollups started gaining popularity, demonstrating significant scalability potential even for a non-sharded Ethereum blockchain. This released some pressure on solving the scalability challenges that Ethereum’s L1 has faced for years, allowing the R&D team to focus on the remaining Ethereum’s upgrade plans both for the PoW chain, as well the Beacon Chain.
From a cultural perspective, the use of the old terminology would’ve further perpetuated confusion about the nature of Eth1.0 and Eth2.0, making it seem like once Eth2.0 is launched, Eth1.0 will be gone, which is not the case. In addition, scam prevention was another consideration that favoured the rebrand, as the distinction between Eth1.0 and Eth2.0 would’ve likely resulted in scammers trying to convince users to swap their ETH tokens for fictitious ETH2 tokens.
The result of all of this was a decision to move away from the confusing Eth1.0 and Eth2.0 terminology, and rather call the transition to the PoS mechanism on the mainnet The Merge. By choosing to name the process instead of the final outcome (which in reality remains, in essence, the same), a lot of headache and confusion has been avoided.
Progress Towards The Ethereum Merge: Current status
Public testnets being battle-tested
Deployed in late December 2021, the Kintsugi testnet was a public testnet meant to allow execution and consensus client developers and application developers to become familiar with the post-Merge environment. The testnet was bombarded with transactions, bad blocks, and chaotic inputs to battle test it and find bugs.
A new specification for the proceeding public testnet, called Kiln, was published after edge cases from Kintsugi had been discovered. It’s expected to be the last new public testnet to be created before the existing ones are upgraded. Continued extensive testing of the Kiln has been taking place since The Merge took place on it on March 15th 2022. The Ethereum community practised running their nodes, deployed contracts, tested infrastructure, and threw everything they had at it to see if it breaks.
Mainnet shadow forks
Although a lot had been learned since deploying and testing Kintsugi and Kiln testnets, they were still very young testnets with little activity, which prevented proper stress testing of assumptions regarding syncing and state growth. And this is where shadow forking came in. Shadow forking makes it possible to fork an existing testnet, such as Goerli, and the mainnet (with a lot more activity), and add merge related properties to its config, thus allowing the fork to inherit the state of the original testnet.
These shadow forks are short-lived, allowing for testing on them only for a few weeks until a new beacon chain has to be spun up.
Three Goerli testnet shadow forks took place in January and March, and the first mainnet shadow fork happened on April 11th 2022, with the second one following on 23rd April.
The results of the latest mainnet shadow fork have been described by Adrian Sutton from ConsenSys in his twitter thread. The team will continue stress testing main forks, and collaborate with client developers to make them even more robust against edge cases. From now on the main theme as we approach The Merge has been and will be – testing, testing, and even more testing.
Wen Merge? The Triple Halvening, And Price Predictions
As to when The Merge will happen is still somewhat up in the air. No one has, understandably, given any specific dates, but the general consensus is that late Q3 is the time when we are likely to see it finally happen. The dev team’s sole focus is on The Merge, with very little else discussed, as can be seen in the latest AllCoreDevs session update by Tim Beiko.
Price predictions are also under hot debate, as, once The Merge is complete, two factors will influence ETH’s price, one emotional, the other baked into the protocol. Realistic estimates of the fair price of ETH fluctuate around $5000.
The emotional aspect, as experienced by the market, will result from The Merge successfully completing, which will mark the end of the most significant change in the protocol in Ethereum’s history, and solidify the incredible technical competence of Ethereum core devs and researchers, further giving the market confidence in ETH as an asset and the ecosystem as a whole, driving up the price further.
The technical reason for why price is likely to pump is due to the Triple Halvening, which will reduce Ethereum’s annual inflation rate from 4.3% to 0.43%. Following last year’s EIP-1559 upgrade, Ethereum now burns about 70-80% of the fees, with the rest going to PoW miners. Post Merge, these fees will go to the PoS validators. This means that ETH stakers will see their rewards rise to about 8-10%. Staking will lock in significant amounts of ETH, as staked ETH cannot be moved or used in the markets, making enormous amounts of ETH illiquid, further driving up the price. EIP-1559 and The Merge combined are predicted to cause the equivalent of 3 bitcoin halvenings, reducing ETH sell pressure by up to 90%.
In addition, the move to an environmentally friendly PoS mechanism, which will reduce energy consumption by up to 99.95%, will make the asset much more appealing to institutional investors who might’ve been kept away from investing due to public’s pushback on Ethereum’s current energy consumption.
Great progress is being made by the Ethereum team, and the continued successful merges of mainnet forks clearly demonstrate the culmination of 6 years of back-breaking work, and give hope that The Merge truly is just around the corner. For those interested in the nitty-gritty of The Merge preparations, it’s worth checking out The Merge Mainnet Readiness Checklist which lists in detail all of the various tasks that need to be worked through to make The Merge ready for Mainnet release.
Why is the Ethereum Merge so important to crypto traders?
Many cryptocurrency and particularly Ethereum ($ETH) traders are eagerly anticipating the Ethereum Merge because afterward, the issuance of ETH is expected to be reduced by about 90%. This means there will be less ETH in circulation, and in turn, the lower the supply, the higher the demand- potentially resulting in Ethereum prices going up.
ETH Merge is a huge success!
On 15th September 2022 at 06:42:42 UTC at block 15537393, the Merge was completed.
And we finalized!
Happy merge all. This is a big moment for the Ethereum ecosystem. Everyone who helped make the merge happen should feel very proud today.
Missed our historical LIVE Merge party? Check it out here!
Ethereum Merge Party – Watch the Merge live!
How have Ethereum ($ETH) prices reacted to the Merge?
Ethereum ($ETH) prices showed a slight pump in the hours following the Merge. Prices hit a peak of over US$1,640 before coming back down to just under US$1,600. The next crucial point in terms of where ETH prices would go would depend on whether there is any hard fork.
NFTs (non-fungible tokens) have become very popular amongst cryptocurrency traders and are drawing a lot of attention from several industries. The world of art has greatly benefitted from the sector, more than other industries (so far) because it opens creators and potential buyers to an ever-expanding marketplace. Generally, this stems from NFTs’ non-fungible nature, meaning that each one is unique.
Table of Contents
What makes NFTs special?
Anyone can trade one Bitcoin (BTC) or Ether (ETH) for another and end up with the same asset they traded in terms of value and usability. However, non-fungibility means that no two assets are alike. If you trade one NFT for another, the newly-received asset will be fundamentally different. In the art sector, this allows people to buy directly from the creator, with the assurance that there is no duplicate anywhere. NFTs have also created a whole asset class and industry of NFT speculators which buy, sell and trade them for profit. There are estimates that in 2021 alone, there were over US$23 billion worth of trades in NFTs. In fact, the most expensive NFT sold in 2021 was Beeple’s The First 5,000 Days, which sold for US$69.3 million.
Some Common NFT Scams
However, as with most up-and-coming industries, the NFT space is rife with its fair share of scams. Malicious players find ways to take advantage of buyers pumping money into the industry. Scammers are also becoming more sophisticated with their methods and will go to any lengths to swindle NFT holders, especially since some NFTs are worth millions. Here are some common NFT scams.
Fake offers
Scammers frequently entice NFT holders with false offers. Known methods include phishing emails, fake links, and service offers that require people to sign malicious contracts. Sometimes, people willingly give up their signatures for seemingly legitimate reasons, such as a paid offer to help animate your NFT. Tokens and NFTs may get stolen after you sign the transaction. In December 2021, scammers hacked the NFT marketplace Fractal, pushing a link to prospective buyers through the platform’s official Discord. Within 10 minutes, around 370 users lost 862 SOL, worth more than US$150,000 at the time.
False NFT projects
The NFT space has seen several rug pull scams where a known or unknown creator publishes an NFT for sale. For many reasons, including the possibility of high returns, people may skip adequate due diligence and quickly sink money into a new NFT with growing popularity. In many cases, these projects eventually lose their value and can’t be sold for a profit or the initial capital. The unknown creators then take all the money and are almost always unreachable. A popular example is the Frosties rug pull and scam. In January, buyers who purchased pieces of the cartoon ice cream digital collection lost a total of . (https://inboundrem.com) 3 million after the creators and funds disappeared from OpenSea.
Counterfeit NFTs
Scammers can create fake NFTs that resemble originals, especially when the original is not very popular. The forger would then list the fake NFT on a marketplace where an unsuspecting buyer may purchase what they think is the authentic version. Since no one wants a plagiarized or counterfeit NFT, the buyer is left with a worthless asset.
Pump and dump scams
Here, a group of scammers artificially pump a worthless NFT collection which eventually drives price and demand from speculators. Within a short period, the collection garners enough attention that people consider it valuable and start buying. However, the group will pull the plug and disappear as soon as they make enough money from the sale. The price of the NFT eventually tanks, leaving holders unable to resell their worthless NFTs. A relevant example of a pump-and-dump scam is the Squid Game token. Last year, unknown creators launched a token that exploited the popularity of Netflix’s Squid Game series. The SQUID token pumped past $2,800 and eventually crashed to $0. The scammers made away with more than $3 million in total and have still not been found.
Fake Holder Verification Bots
Scammers may create programs that impersonate authentic verification bots used with discord servers. Owners then allow approvals for these fake bots that transfer sensitive information to scammers who steal the NFTs.
How to Avoid NFT Scams
All players in the NFT marketplace should know how to avoid scams. Due diligence often does the trick, as fake projects or assets usually have features that stick out. Generally, avoiding scams requires a lot of caution from NFT holders. Owners looking to sell their NFTs must set approvals. The process requires the seller to set an approval so that the marketplace can transact on the owner’s behalf if, for example, someone else buys the asset. While popular marketplaces like OpenSea are relatively safe, there is still a significant risk with setting approvals.
Approvals give the receiving contract or address the authority needed to transfer tokens. If a malicious bot or contract has the approval, your funds are not safe. To avoid these scams, there are a few things to note.
Setting approvals and verification
The blockchain is a public ledger and does not need permission for people to read stored information. However, executing transactions on the blockchain requires gas. When transacting with a third-party bot, marketplace, or address, any verification requiring gas fees is likely illicit. In the same way, setting approvals should cost some gas. There might be a serious problem if a transaction to set an approval is gasless.
Due diligence
It is important to do intensive research into an NFT collection or project before purchasing it. Trustworthy projects should have verifiable teams compromised of members without fraudulent histories. Depending on the project, a whitepaper might also be necessary. For phishing scams, buyers must double-check email addresses and links to ensure authenticity. Buyers must also do their due diligence to avoid plagiarized or counterfeit NFTs by confirming verification ticks on marketplaces or sticking to links posted on the project’s official Discord.
Discord Notes
Buyers using Collabland for management can attach specific notes to authentic bots in a server. This note will be available anywhere you see the bot, making it easy to avoid corrupt bots.
Personal Safety
All wallet credentials should only be in safe locations that are not easily accessible by third parties. It is inadvisable to keep this information on a mobile phone or with someone else. All owners should also consider unique passwords in addition to two-factor authentication (2FA).
Conclusion: Staying Safe
Avoiding NFT scams requires continuous effort. Buyers who have done their due diligence should consider taking further steps, including actions not listed above. Since the NFT space is still somewhat nascent, buyers should expect that scammers may come up with newer ways to steal NFTs or swindle unsuspecting users. Therefore, traders must take additional protective steps when buying, selling, or setting approvals for NFTs.
EtherDrops is a Telegram based bot designed to track major crypto markets and NFTs. Many crypto enthusiasts would use data tracking sites such as CoinMarketCap and CoinGecko, and these tools are excellent as ‘wikipedias’ for all the altcoins out there. However, for those with more advanced needs, there are much better resources available that can make your life easier.
If you’ve been in crypto for several years, you’ll probably have a Telegram account. Most of the crypto projects in existence have official Telegram channels to keep their communities informed and up to date on developments, so the chances are you also use the messaging platform.
This is just as well, because one thing that makes Telegram very useful is its ability to add bots that serve different purposes to the end-user. This is where EtherDrops comes in, so you can be part of the various crypto communities and track your tokens all on the Telegram app.
What is EtherDrops?
Originally created in 2018 as a tool to monitor Ethereum wallets, EtherDrops was mainly used to track the transactions of Ether ‘whales’ as well as one’s own wallets on the first smart-contract blockchain.
Four years later, EtherDrops has evolved into something much bigger than wallet monitoring. It is now integrated with Ethereum, Polygon, Fantom, Avalanche and BNB Smart Chain, providing a convenient place to track all your crypto activities within one Telegram bot.
Users are equipped with simple-to-use tools to follow coin prices, as well as track and receive real-time notifications on wallet transactions, DEX and CEX swaps, NFTs, liquidity pools, Binance funding, gas prices, and more.
By shaping settings according to your own personalized needs using a unique combination of advanced tools and instruments, EtherDrops becomes a simple yet essential bot that notifies you about anything you want, or alerts you to certain conditions. Thousands of investors, traders, and holders use it to navigate their crypto journeys.
The bot already has more than 400,000 users on board and keeps growing steadily. With the product sending over 5,000,000 notifications daily, it’s no surprise that each day they welcome hundreds of new users onboard.
EtherDrops Features
Major features of EtherDrops include:
Price tracking;
Wallet tracking;
Liquidity pools;
OpenSea integration;
Gas price notifications;
Integration with Telegram groups and channels; and
Token distribution alerts.
Price Tracking
Tracking the prices of various cryptocurrencies is a basic need for long-term investors or traders. Add coins by name, ticker or contract address. Apply your personalized settings to receive instant notifications about price changes and swaps.
Price Change Notifications – Set % Price Change to generate an alert.
Swap Alerts – Set $ Value to track Swaps on Uniswap, Sushiswap, Balancer and other supported DEXs.
Wallet Tracking
Add a wallet by its address to monitor incoming and outgoing transactions, airdrops, NFT transactions, and created contracts.
Transaction Notifications – Choose between different event types and set $ alerts to be notified about transactions.
Wallet Balance – Check Balances of assets and NFTs.
Liquidity Pools
Add a liquidity pool by its contract address and receive % pool changes should it increase or decrease within the specified range.
LP Changes – Set the % change value to stay on top of your added pool.
OpenSea Integration
Track the floor price and metrics of NFTs and arts on the Ethereum network. To follow your collection, add it by the name or address and set a % price change or generate a $ price target.
Gas Price Notifications
At times ETH gas prices can be really high and leave you with an eye-watering bill in fees to pay if you make a transaction. Set gas price notifications and save yourself a fortune!
Set Gas Alerts – Set Gwei amount to generate an alert. As soon as it hits the target or lower, you’ll be immediately notified.
Check out our Advanced Tips and Tricks to Save on Ethereum Gas Fees:
Integration with Groups & Channels
If you are an admin or a community manager of a project using Telegram, or you run a trading group, your channel could benefit from integration with the EtherDrops bot.
All Bot Features in your Groups and Channels – The same alerts and notifications you set in your individual account can be applied to groups and channels.
Token Distribution Alerts
Token distributions often create market price pressure and increase capitalization. Be the first to obtain such info and assess market conditions to make a play in your favor (if you use Margin or Futures trading).
Token Distribution – Receive distribution alerts from seed, private and other events for tokens that you’ve added to monitoring.
Tutorial: How to use EtherDrops
1. How to install EtherDrops bot
To install EtherDrops, simply follow this link to open the bot in Telegram. It will automatically link the bot to your account. Here is an official list of the available EtherDrops install links. If you experience any delays with bot updates, you can switch to any other official link.
2. How to add a wallet
In the Main Menu, select “+Add wallet”. Tick ✅ which networks you wish to add to monitoring for your wallet and press ✔ Done (for example ETH and Polygon). Then type in your wallet address and name it. You’ll now be immediately notified whenever there are any transactions happening within the wallet, including NFT activity, in/out transactions, airdrops, etc.
3. How to edit wallets
In the Main Menu, select “Edit Wallets”. Choose the wallet you wish to edit. The menu with available options will open up. You can Delete, Rename, make it your Favourite (if ON, notifications with this wallet will be illuminated for better visibility), follow only IN, OUT or ALL transactions, check Balances, add/remove Networks for this wallet, set Alert Transactions filter (you’ll only be notified about transactions that are bigger than the specified threshold).
4. How to add a liquidity pool
In the Main Menu, select “+Add pool”. Choose the network. Next, enter the address of the liquidity pool. Enter the % liquidity change to create a notification. When the liquidity of a pool changes within your specified range, you’ll be instantly notified.
5. How to edit liquidity pools
In the Main Menu, proceed to “Edit pools”. Choose the liquidity pool to add additional settings. You can Delete, Rename, turn your Notifications ON or OFF for this specific pool, or change the % notification alert.
6. How to add a new coin
In the Main Menu, select “+Add coin”. Next, enter the contract address, symbol, or name of the coin. Choose the coin from the list and select network (ETH, BSC, ERC-20, Polygon, or CEX). Finally, enter the % price change and $ value for swaps (in case the coin is traded on a DEX) to create a notification. Now you are following this coin. Whenever there is a swap or price change within the range you specified, you’ll receive an instant notification.
7. How to edit coins
In the Main Menu, proceed to “Edit coins”. Choose the coin. You can Delete, turn your Notifications ON or OFF for this specific coin, change Price Denomination (in USD, BNB, ETH, BTC), change the price % notification alert, create a price alert (if a coin is x USD, you’ll receive a notification), or change swap alerts.
8. How to add an NFT
In the Main Menu, select “+Add NFT”. Enter the contract address or name of the NFT. Select the right one and type in the % price change alert to receive notifications.
9. How to edit NFTs
In the Main Menu, select “Edit NFT”. Choose the NFT. You can Delete, change % alert or price, set a new price alert, or turn notifications ON/OFF.
10. How to set gas price alerts
In the Main Menu, select “Set gas alert”. Type in the desired fast gas price to create an alert.
Conclusion
EtherDrops is a simple yet comprehensive one-stop tool for all your crypto tracking needs and continues to add new networks, coins, and exchanges as the market expands so you’ll never be short of what you need. It just takes one click and a few easy-to-follow steps within Telegram to get set up, and that short initial setup time proves to be well worth it.
For a comprehensive tutorial on the more advanced features of EtherDrops such as quick shortcuts, special commands, managing profiles, how to set up the bot for groups and channels, and subscription options, read to the end of this quide. If TL;DR you can also watch a video tutorial here.
Follow DropsTab / EtherDrops for more information:
There are tens of thousands of cryptocurrencies out there, with over 1,000 new tokens launched between January and July of 2022. Over time, people in the crypto community have realized that there are many bogus projects in the blockchain space whose sole aim is to entice unsuspecting people and defraud them. This makes it compulsory for everyone to research blockchain projects before making financial commitments.
What Does DYOR Mean?
DYOR (Do Your Own Research) is a well-known acronym in the crypto and blockchain space. DYOR means that people are encouraged to conduct due diligence and gather all the necessary information on projects before depositing any funds, especially for new projects. Adequate research protects new and existing crypto enthusiasts from scams and projects with no real value. By “doing your own research,” members of the crypto community can find viable blockchain projects and avoid fraudulent or deceptive ones.
Why is DYOR Important?
DYOR is important to avoid losses, especially from scams or fraudulent actors. The evolution of decentralized finance (DeFi) and blockchain tech has made it easy for creators to sell the promise of a revolutionary product and attract cash from the general public. Since anyone with enough technical knowledge can create an asset on a blockchain, people no longer require intermediaries such as banks and brokerages before investing in the opportunities available within the crypto market. However, without governmental checks and regulations on these intermediaries, it also means that there is a high risk that the average investor will fall for a scam or fund a project with nefarious intentions.
Furthermore, since there are no centralized authorities in the DeFi space, people have no place or authority to report their grievances should the project turn out to be a scam. Fraudulent development teams know this, and exploit it by making promises they cannot deliver. In addition, transactions recorded on a blockchain are immutable. This design is a significant reason DYOR is important, since funds lost to scams or harmful projects are usually irretrievable.
How to Do Your Own Research (DYOR) in Crypto Projects
Here are some tips on how to DYOR before investing in crypto projects:
Find the project team and its Unique Selling Proposition (USP);
Evaluate the project roadmap;
Check the project’s social media reputation and presence;
Research the project’s source of funds
Read the project’s whitepaper
Find Third-Party Audit Reports
Find the Project Team and its Unique Selling Proposition (USP)
People looking to invest or deposit funds must first find information about the project’s motives, purpose, and development team. The data could include the project’s past performance and detailed use cases of featured products. If a project team is anonymous, it should set off red flags in your head, as you should be wondering why they aren’t willing to put their name behind a project if it is reputable. Also, what is the project trying to achieve? Consider if it is actually something that there is likely a market for, and whether other competitors have attempted the same idea in the past and their results?
Evaluate the Project Roadmap
Reading and understanding a project’s roadmap, which provides a strategic overview of objectives, milestones, deliverables, and resources, is an effective way to DYOR. You should also evaluate if the roadmap is feasible – this relates to the above research on the team and their background. A fake or deceptive crypto project may publish a roadmap that promises all kinds of products or features in a short time. These projects sometimes do this to excite new backers into believing the project is viable in the long run and things are moving along quickly. However, the roadmap may be too good to be true. If a project makes promises like partnerships, new products, plans to raise a large sum of money, and full government approval all within a short time, buyers should be wary.
Check the Project’s Social Media Reputation and Presence
Reputable blockchain projects usually have a verifiable social media presence and reputation. Checking the project’s reputation on major social media platforms such as Facebook, Telegram, Reddit, and Twitter gives insight into people’s thoughts about the project. See how other users are interacting with the community. Also, see if there are any questions or grievances concerning the project, and whether the team is immediately on hand to address them.
Research the Project’s Source of Funds
Before making financial commitments to a project, it is important to determine whether a single individual or an established firm backs the project with capital and other resources. Prospective investors should also research previous projects backed by these sponsors to see if they were successful. Additionally, these sponsors should have a good reputation in the crypto community. This information can be located in the project’s whitepaper.
Read the Project’s Whitepaper
All crypto projects should have at least a whitepaper that documents information and technical aspects of the project. Whitepapers contain critical information about a project’s development process, potential opportunities, and utility.
Find Third-Party Audit Reports
Many auditors, such as Certik, Hacken and Quantstamp review the code of blockchain projects before launch to ensure their security. These audits involve double-checking the code and testing it for vulnerabilities, which results in the funds within the application being much safer than a non-audited smart contract. Looking up the audit report of projects before investing is a sure way to build confidence in a project. However, people should be aware that a positive report does not mean that the project is completely safe, as there are instances where malicious code was added after the report was released.
People researching crypto and blockchain projects should use multiple tools, common tools include CoinGecko, CoinMarketCap, Investopedia and social media.
CoinGecko
CoinGecko is a popular market research source for blockchain projects. The platform provides detailed information on market caps, prices, and daily trading volumes of various crypto assets. In addition to being a credible source of crypto information, CoinGecko also provides crypto-focused podcasts, industry commentary, and daily newsletters. When going into individual asset pages, you can also find the token’s website and social channels, allowing you to continue your due diligence.
CoinMarketCap
CoinMarketCap is the leading platform for cryptocurrency market information and research. The platform provides market information on nearly all the crypto assets available. CoinMarketCap also ranks crypto assets and projects in real-time, using features like market capitalization or 24-hour trading volume to sort projects in order. Like with CoinGecko, make sure to check the individual asset pages for more information on a specific cryptocurrency.
Investopedia
Investopedia is a leading online resource in the finance space. It is a repository that explains related terms and contains news and general financial information. Investopedia explains many complex blockchain concepts in layman’s terms, making it an ideal platform for newcomers in the finance and crypto space.
Social Media
It is almost essential to sample public opinion about a project before spending money. Social media platforms like Facebook, Twitter, Telegram and Reddit contain raw and undiluted information from members of the crypto community who may have in-depth details about the project.
Although the information posted on social media may be unverified, these platforms can still be an excellent way to get much-needed information about projects. Posts may be from people who have lost money, made money, or those who noticed specifics that they considered to be red flags. However with everything on social media, always confirm that the statements being made are legitimate before you take them as truth.
Conclusion
DYOR is crucial for investors in the cryptocurrency and blockchain space. The absence of easy-to-understand information and lack of regulation somewhat makes scams more likely in the crypto space than in traditional financial markets, so never overlook the importance of research and verification. Doing the proper research before getting monetarily involved in any project is a concept that has more relevance in the blockchain sector than in many other industries because it is a disruptive and highly volatile sector.
Ethereum 2.0 is coming soon and the question everyone wants to know is “will it cause crypto prices to crash?” This is particularly as markets around the globe are not looking great, and that includes the crypto industry. Everything has been bleeding heavily for months without a sign of stopping, as central banks keep hiking rates, global supply chains struggle, and spending and investment dry up. Stagflation is a very real possibility, and there is no telling how long it will take for us to cool down the overheated markets that have been going only up since the last recession more than ten years ago.
The aforementioned notwithstanding, active development in the blockchain space continues to march forward. Although investments might drop significantly, many builders keep on building no matter the state of the markets. As Ethereum is steadily approaching the long-awaited transition from proof-of-work (PoW) to proof-of-stake (PoS), dubbed The Merge, it might be interesting to think about potential impacts of The Merge on the crypto market prices, especially in the context of a potential extended bear market.
In short, The Merge will result in Eth2.0’s Beacon chain (the coordination mechanism of the new network) merging with the current Ethereum mainnet, signifying the move to a fully PoS chain. To secure the network, enormous amounts of ETH will be staked in addition to the ETH already staked in the Beacon chain, making all of this locked ETH illiquid. Combined with the EIP-1559 upgrade, which now burns 70-80% of the fees, The Merge is expected to cause the equivalent of 3 bitcoin halvenings, dropping Ethereum’s inflation rate to 0.43% and locking up a lot of ETH, potentially reducing sell pressure by up to 90%. In addition, the PoS mechanism will reduce Ethereum’s energy consumption by up to 99.95%.
So all is looking great for Ethereum and projects building on top of it, right? Possibly. However, there is still a decent chance that, given the current market conditions, ETH’s price pump might be short-lived, and would continue to drop, bringing down a lot of other projects with it.
The Potential Impacts of The Merge
There are two possible scenarios to look at when discussing the downside impact of The Merge on crypto prices:
The external effect would be caused by Ethereum sucking out liquidity from other PoS alt-L1s and the projects built on top of them (especially if they’re EVM-compatible), as one of the more critical selling points compared to Ethereum is environmental sustainability.
Beacon chain staked ETH unlocks, extended bear market, and poor treasury management of Ethereum-backed projects could see more capitulation events as HODLers and projects sell off their ETH to stay afloat as new investments dry up and stagflation looms.
1. Ethereum Sucks Liquidity From Other PoS alt-L1’s
By offering lower gas fees, fast transactions, and relatively high throughput at the expense of decentralization and economic sustainability, many PoS chains have attracted developers, investors, and NFT ecosystems to their networks away from Ethereum. Ethereum’s high demand (=high fees), poor L1 scalability, and the concerning PoW mechanism have severely limited its growth. (https://rpdrlatino.com) Understandably, regular people simply do not want to pay exorbitant fees when minting and trading NFTs, and developing inaccessible dApps on a network that is supposedly destroying trees and warming up the planet.
The environmental argument will be completely invalid after the merge. Coupled with the enormous innovations in Ethereum’s L2 ecosystem, which have already reduced transaction fees to sub-$1 with no signs of stopping, Ethereum is set to once again become the most sought-after smart contract development platform. As post-Merge buy pressure of ETH increases and scalability improves, alt-L1’s could struggle to offer any significant unique selling points, making new projects opt to build on top of the most secure, established and decentralized smart contract chain out there.
As more and more people flock to Ethereum, established projects might also decide to migrate to the platform with the most demand and upside potential, effectively sucking out liquidity from other chains, and leaving them dry with evaporated treasuries, limited runway, and reduced demand. The strategy of subsidizing transaction fees during a bull market when funds are plentiful will likely not work when no new investments are coming in during a bear market, and an exodus of users is reducing demand and network revenues.
Of course, there is plenty of room for growth in this space, and projects existing on other chains might not find it too beneficial to move to Ethereum even though short-term liquidity issues might prove challenging.
2. Beacon Chain ETH Unlocks in Extended Bear Market Cause Mass Capitulation
The Merge will unlock a lot of ETH, resulting in a potential aggressive selling spree that might have trickle-down effects on a lot of other coins, especially those that have tight correlation with their ETH pair, are ERC-20 tokens, or have been sitting on ETH treasuries to fund their development. A lot more downside risk due to a selloff is also a very real possibility for ETH and other coins simply due to bad timing (i.e. bear market – with recession slowly creeping into our daily lives due to central banks raising interest rates, supply chain issues, energy crises etc.), the unlocked ETH might serve as a critical lifeline for those who had confidently staked their ETH during the bull market.
During the bear market, investments will be scarce, and projects that during the bull market had made the decision to not convert their treasury ETH to stablecoins are now seeing their wallets drop in value significantly, forcing them to capitulate by selling at low prices to cover their expenses.
However, it is important to note that the ETH unlocked from the ETH staked on the Beacon chain will not be immediately available right after The Merge. Rather, this feature – EIP-4895: “Beacon chain push withdrawals as operations”, will be enabled during the Shanghai upgrade. It will probably be deployed much later after The Merge, with estimates ranging from a month to 6 months. This means that any amount of potential sell-off of unlocked ETH would come with a significant delay post-Merge, at which point it’s impossible to predict where the market might be in 6-12 months and how it will behave, with contradicting bullish and bearish narratives clashing against one another in an attempt to drive price in either direction.
This option does seem a bit far-fetched, however, and no one knows how much more pain we will have to suffer before the momentum shifts towards the upside, so it’s best to be prepared for both the upside and downside, and not fall prey to only bullish narratives.
Conclusion
As outlined in the two main points, post-Merge many alt-L1 coins could face a risk of crashing even further due to risks associated with reduced liquidity in a bear market (for non-Ethereum coins), liquidity that might flow towards the Ethereum ecosystem due to its established security, track record, and newly acquired environmental sustainability.
On the other hand, ETH and other ERC-20 tokens living on Ethereum also run a risk of crashing, if the post-Merge ETH unlock from the Beacon chain results in a mass sell-off of ETH, which could crash other coins and project treasuries.
As this will be the first time the crypto industry experiences a recession or a stagflation, there is a lot of uncertainty about how low the market could go and, most importantly, how long it could stay so low. This is uncharted territory, so making comparisons with past cycles might not be particularly useful. Nations and companies will keep tightening their belts, and spending will significantly decrease across the board, leaving risk-on markets such as crypto vulnerable to a continued mass exodus to safer investments.
STEPN is the most popular move-to-earn blockchain game in the crypto market this year after some significant adoption by the market and big moves with other major exchanges and well-known sneaker brands.
Move-to-earn is a new way to earn money through gaming with the novelty that it rewards not only digital activity within a game or app, but also physical activity. In short, the more you move in the real world, the more you are rewarded in your digital app.
STEPN has been crushing it lately after surpassing 300K daily active users (DAUs), receiving a strategic investment from the venture capital arm of Binance, and launching a unique collection of NFT sneakers on Binance NFT marketplace in partnership with sports brand ASICS.
What is STEPN?
STEPN is a move-to-earn health and fitness app with game elements built on Solana. Users equipped with sneaker NFTs can run and walk outdoors to earn tokens and NFT rewards. The funds earned can either be used to increase earnings in the app or can be withdrawn and sold. The mobile app has a built-in wallet, swap, marketplace, and rental system that allows non-crypto users to onboard.
How does STEPN work?
Anybody can earn tokens and NFTs in STEPN by downloading an app, buying NFT sneakers, and completing various forms of exercise. Similar to how Bitcoin mining works, users in STEPN have to prove they have physically worked out, at the cost of their own time and energy. This is validated by the app’s anti-cheating mechanics using GPS and machine-learning technology.
The tokens and NFTs are then minted to users’ wallets from the people, not from the game developer FindSatoshi Lab, known for its work on cryptocurrency wallet Solwallet. In this way, people can trade their tokens and NFTs 100% peer-to-peer and over time. STEPN has created an ecosystem where the value of tokens and NFTs is based on supply and demand.
STEPN tokens: GMT and GST
There are two types of tokens available to players, GMT (total supply of 6 billion) and GST (unlimited supply). GMT is a management token that allows users to increase their income. GST is an in-game token that users receive for in-game activity.
To create a balanced token ecosystem, the developers have decided not to limit the GMT governance token earning to a small group of people. Instead, they have made GMT and GST broadly accessible to ensure balance in the mining of these two tokens.
Since many GameFi projects with a similar dual-token economy have tended not to thrive, the question is raised about whether GST, with its unlimited supply, will go into a death spiral. STEPN’s model addresses this by making GST earning irrelevant at a higher level. As people approach the higher levels, they are presented with the option to choose which token to earn, and they would naturally want to earn the limited supply of GMT.
This will get amplified over time as more GMT is burned and more GMT use cases are released. This should reduce the GST token supply enough to balance the token value. If too many people are mining GMT, they will earn less than what they can with GST, so they will switch to earning GST. This will reduce the competition for earning GMT, and, in turn, make GMT mining profitable again.
Getting started with STEPN
To get started with STEPN, you must first download the app to your smartphone via Google Play or Apple Store. Then, following the on-screen instructions, you will need to create an account and receive an activation code.
You will be able to use the app fully once you have purchased your NFT sneakers from the in-app STEPN shop. Choose your sneakers based on your abilities. Once you have purchased the sneakers, open the game and start walking or running. You will start earning immediately.
How to join STEPN: Step-by-step guide
1. Download the App
First, you have to install the app on your smartphone. Depending on the model of your phone, you can do this either from the App Store or from Google Play.
2. Create an Account
After launching the app, you will need to enter your email address, to which you will receive a registration confirmation code. Enter your email address and press the ‘Send Code’ button. A code will be sent to your email address, and you will need to enter it in the corresponding field.
3. Obtain Activation Code
You then need to obtain an app activation code. To obtain the activation code, register in the STEPN community on one of the official social networks. Choose the social network that suits you best (Twitter, Telegram, Discord, etc.) and proceed according to the on-screen prompts. An activation code can also be received from a friend via invitation or bought from another user.
Once you have received the activation code, the main app screen will open. Click on the ‘Get activation code’ button. After you have entered your activation code, the app will open and the tutorial will start. Several screens will explain to you how to use the app.
4. Create a Crypto Wallet
You then need to create a crypto wallet in the STEPN app. Click on the wallet image in the top-right corner of the app. This will start the process of creating a crypto wallet, which will take a couple of minutes. While creating the wallet, you will be shown a secret phrase that you need to write down and keep in a safe place. Once the crypto wallet has been created, you will be taken back to the main app screen.
5. Start the Game
In the top-right corner, the token column will show zeros. To start the game, you need to deposit Solana (SOL) tokens into the crypto wallet you just created, in the amount that will allow you to purchase an NFT in the form of a sneaker. SOL can be bought on almost any major CEX or DEX.
6. Buy NFT Sneakers
TIP: Before you buy sneakers in STEPN, open the app and run for 10 minutes in running mode without sneakers. This is so that you can find the right type of sneaker for you. NFT sneakers are purchased in the shop. After buying the sneakers, wait until 25% of the energy has accumulated (approximately 6 hours) and then start the game. You are now ready to move-to-earn!
Playing and Moving to Earn
STEPN currently has solo mode only, in which users receive GST tokens as a reward for moving in the real world. This consumes virtual energy at a rate of 1 unit per 5 minutes of movement. All of these processes are only triggered after the purchase of NFT trainers. If the energy is at zero, no tokens are earned.
GST tokens, and subsequently GMT, are paid out depending on the following factors:
The level and attributes of NFT sneakers – more efficient sneakers cost more. Up until Level 29, users can only earn GST, and from Level 30 onwards, they can switch to earning GMT if they wish.
Sneaker comfort parameter – the higher it is, the more tokens are earned every minute.
Running speed – it is necessary to maintain the recommended speed range for the sneaker. If you deviate too much from it, earnings will be reduced by up to 90%.
Marathon and background modes are set to be added later. Marathon mode will be an entirely new playstyle and is aimed for release towards the end of 2022. Background mode will be added when the STEPN team feels the time is right to approach non-crypto users.
The Importance of Energy
Energy plays an important role in earning tokens in STEPN. As soon as you run out of energy, your earnings will stop. Only when energy is available will your movement be rewarded. The amount of energy determines how many tokens you can earn for walking and running.
To increase the amount of energy you have, you can buy more NFT sneakers or get hold of rarer ones. The more NFT sneakers you own in your inventory, the more energy they will automatically generate. Higher levels and rarity sneakers will give you more energy.
Strengths of STEPN
One of STEPN’s biggest strengths in the current market is the successful combination and implementation of GameFi and sports. This could be seen as a clear advantage over any competition as many crypto-native builders don’t have the connections or knowledge to replicate STEPN’s GPS technology and machine-learning anti-cheating mechanics.
Because the health concept of the game and its everyday practicality is relatively simple compared to other games and apps in crypto, STEPN is a prime candidate for mainstream adoption.
Weaknesses of STEPN
There are still quite large barriers to entry for the average person. The registration process is too complicated, and to start playing, new users need to first learn how to open and fund a crypto wallet and buy an NFT item. For a newbie, this is not as straightforward as it should be.
NFTs also cost between 2.5 and 10 SOL, and way upwards of $100 if you want the best sneakers. This means there is an element of ‘pay-to-earn’ about STEPN. However, at the moment, the return on investment (ROI) is in the region of a few weeks, which is not bad at all.
Conclusion
Making money while keeping healthy is a win-win, and as a sports GameFi product, STEPN has struck a decent balance between game elements that are not too rich and complex to stop non-gamers from entering, and sports elements that are not too difficult to stop non-athletic people from trying it out.
The tokenomics also create value for both users and the platform. As long as the concept remains simple and participating remains profitable for the average user, STEPN should continue its impressive adoption rate.
For more information on STEPN, follow their official channels:
Stablecoins are under the microscope right now following the collapse of Luna and UST, the stablecoin of the Terra ecosystem.
In this article, we look at the history of stablecoins, its pros and cons, why they are needed, and what are the risks are of utilizing them.
What is a Stablecoin?
A stablecoin is a cryptocurrency that maintains a fixed value because it is backed by reserves of other assets such as fiat currencies, securities, gold or precious metals, property, or any other assets as collateral.
There are four main types of stablecoins:
Fiat-Collateralized: Fiat-backed stablecoins are backed by real-world currencies such as US Dollars or British Pounds at a 1:1 ratio.
Commodity-Backed: Backed by precious commodities like gold, platinum, or real estate.
Crypto-Backed: Backed by other cryptocurrencies which are kept as a reserve to ensure price stability in the event of price fluctuations. Smart contracts can also be coded to ensure no trust is needed in third parties.
Algorithmic: These involve adjustments in the algorithm for controlling the supply and demand of stablecoins, usually in the form of two tokens: one a stablecoin and the other a cryptocurrency that backs the stablecoin.
Cryptocurrencies are decentralized and not controlled by centralized entities such as governments or regulatory bodies. They operate on supply-and-demand principles in a free market and can be volatile in nature.
Simply put, stablecoins allow investors and traders to ‘cash out’ of risky investments into another crypto coin that will not fluctuate wildly in value during times of market volatility.
History of Stablecoins
Stablecoins actually have a very long history, having been around since 2014 with BitUSD. BitUSD was created in July 2014 backed by the $BTS token and created by Dan Larimer and Charles Hoskinson, both pioneers in the cryptocurrency who went on to create EOS and Cardano ($ADA), respectively.
However, even the world’s first stablecoin was not without its issues. In late 2018, BitUSD lost its peg to the US Dollar, resulting in huge criticism from the cryptocurrency community. BitUSD is no longer commonly used, and many cryptocurrency exchanges no longer support this stablecoin.
The next stablecoin to be launched was NuBits in September 2014 and was functional for 3 years. Eventually, this stablecoin also fell- suffering 2 major crashes during which the peg was broken for an extended period of time. The first of these crashes was in 2016 when NuBits was depegged from the US Dollar for 3 months. This was likely because holders of NuBits suddenly sold their substantial holdings for Bitcoin, resulting in NuBits being unable to handle the large volumes of sell-offs and losing its peg. Surprisingly, after the 2016 crash, the marketcap of NuBits shot up by 1,500%. This was caused by people buying millions worth of NuBits in late December 2017 owing to concerns about the stability of Bitcoin, whilst the NuBits team was unable to print new coins to keep up with the demand, thereby driving up prices.
The second, and final major crash suffered by NuBits was in March 2018 which was caused by insufficient reserves of the coin, meaning that the NuBits team were unable to protect the coin when there was a dip in demand. Of course, large cryptocurrency holders immediately noticed the drop in NuBits prices and panic sold their positions, causing an even greater slide in price.
After the second NuBits depeg, the stablecoin had lost credibility with cryptocurrency investors. Some holders even threatened legal action against the NuBits team or went into Tether ($USDT) and/or TrueUSD instead.
Tether $USDT however has also weathered a few storms of its own, facing legal battles with the Securities and Exchange Commission (SEC), which also shook the confidence of the market. The legal action was eventually settled in 2021 with the parent company of Tether paying nearly US$60 million.
Despite this, cryptocurrency keeps evolving with each passing year as new innovations that were once met with speculation and distrust eventually become trusted by the market. Today there are many other stablecoin options out there such as USD Coin (USDC), Binance USD (BUSD), MakerDAO (DAI), Paxos Standard (PAX), and Gemini Dollar (GUSD) that provide alternatives to USDT.
Pros of Stablecoins
There are several reasons and numerous benefits to using stablecoins. In general, they are simply faster, cheaper, transparent, borderless, and programmable compared to fiat currencies. Some more benefits are listed below.
Stablecoins allow a quicker and easier way for investors to enter the crypto market by bridging fiat into stablecoins, which act like fiat currencies on exchanges.
Stablecoins are more efficient than fiat because they have the digital properties of other crypto tokens and can be moved around quicker and more efficiently than fiat money.
Stablecoins can be held as capital in non-custodial wallets such as Metamask, thus removing the need for third parties to intermediate.
Stablecoins allow for quicker, immediate peer-to-peer payments abroad that are semi-anonymous with much lower fees than fiat currencies.
Stablecoins can be used for holding, trading, borrowing, and lending abroad. When fiat-related regulatory processes are involved, even better.
Stablecoins can be staked to earn a higher yield than traditional finance in DeFi applications. When adding liquidity to protocols, they also minimize the risk of impermanent loss due to their price stability.
Blockchain data and tracking allows for a more transparent view of the market, giving investors more information on liquidity flows and thus greater decision-making power.
Many sectors of the economy and the unbanked population are benefiting from the use of stablecoins in remittance, escrow, payroll, settlement, and alternative banking that is self-custodial, cutting out intermediaries.
Cons of Stablecoins
Stablecoins used to be more controversial in the earlier days of crypto but have garnered more regulatory approval in recent years, minimizing many of the negative aspects.
Stablecoins usually require trust in a third party to ensure the coins are backed by the stated assets, which also means external audits are needed to ensure assets are accounted for.
There are lower yields on stablecoins in DeFi applications than on regular cryptos, however, these yields are still significantly higher than the interest rates offered by traditional banks.
Stablecoins utilized in DeFi applications are subject to the usual risks involved with unregulated cryptocurrency projects. The TerraLuna disaster was a perfect example of an extreme worst-case scenario for an algorithmic stablecoin.
Trial and error. Due to the relative infancy of stablecoins and the experimental nature of new technologies within crypto, there is still a risk when getting involved with newer projects or protocols.
Regulatory scrutiny. As the stablecoin market keeps growing and adding billions of dollars in value to the crypto market, it will generate increased interest from authorities. This can also be seen as a positive.
Conclusion
Stablecoins and their rapid proliferation across all blockchain protocols have brought more flexibility and adoption to the cryptocurrency industry. They are now embedded in the fabric of the market and are here to stay.
The onus remains on the individual investor to do your own research (DYOR) when deciding which stablecoin to hold. Find out who created it, whether it’s a trusted centralized business or a decentralized protocol managed by smart contracts. All the options are open to you when it comes to the safer management of risk in the crypto market.
One major question all new cryptocurrency investors ask is how to actually spend their cryptocurrencies. Unfortunately, cryptocurrency is just not as widely accepted as fiat currencies. Cryptocurrencies are also subject to huge price fluctuations and volatility. Therefore, to “lock in” the price of your cryptocurrencies and as a springboard to cashing out crypto to fiat, many have converted their cryptocurrencies to stablecoins instead. This allows one to keep their dollar-pegged coins in exchanges or cold/hot wallets, so when the moment to jump back into the bull run comes, they can do so within minutes without having to deal with fiat on-ramps. Alternatively, to easily convert their stablecoins to fiat currencies for spending.
Most have considered stablecoins to be a safe means of preserving their capital without experiencing volatility and having to leave the crypto ecosystem. After all, they’re… stable, right?
In most cases, they have been, but the most recent collapse of one of the largest and well-respected stablecoins, terraUSD (UST), and other less known ones, like neutrino USD (USDN) and DEI, has led people to question the stability of all stablecoins. But is this warranted? Isn’t there a bit more nuance to the mechanisms by which a coin retains its dollar or other fiat currency peg, each with their own risks and advantages?
Although a seemingly straightforward idea, stablecoins can be quite tricky to unpack and analyze, especially when talking about non-collateralized algorithmic stablecoins, which sound too good to be true, and in some cases, are. With this in mind, let’s take a look at stablecoins, what kinds are out there, how well they are doing, and what makes them tick.
Check out our latest video- Stablecoins: Are they safe? ($UST, $USDT, $USDC, $BUSD)
Stablecoins: Are they safe? ($UST, $USDT, $USDC, $BUSD)
Stablecoins – What Are They and How Are They Different?
Stablecoins are cryptocurrencies that are pegged 1:1 to the value of a fiat currency, meaning that, for example, every 1 USDT (USD Tether, the biggest market cap stablecoin) is worth 1 US Dollar. There are numerous stablecoins in circulation, with different coins having different mechanisms for collateralizing their stablecoins.
The most commonly used feature to categorize stablecoins is by looking at how each of them backs their tokens, e.g. their collateral/reserves. By doing that, we can focus on using more narrow criteria for evaluating and comparing stablecoins based on the risks and advantages that stem from the chosen collateralization mechanism. Broadly speaking, there are three main types of stablecoins: Fiat-collaterized stablecoins, crypto-collaterized stablecoins and algorithmic stablecoins.
Fiat-collateralized Stablecoins
By far the most popular type, fiat-collateralized stablecoins occupy the top 3 spots (USDT, USDC, BUSD) among stablecoins by market cap, accounting for roughly 94% of the total ~$155 billion stablecoin supply.
Their working principle is the most straightforward to understand. Each of these coins is backed by a combination of real USD cash reserves, US Treasury Bills, and commercial papers (liquid short-term debt issued by companies).
Crypto-collateralized Stablecoins
Similar to fiat-backed stablecoins, crypto-backed stablecoins use cryptocurrencies as collateral, and smart contracts and, typically, governance tokens to monitor price stability. Due to the volatile nature of cryptocurrencies, crypto-backed stablecoins are over-collateralized (150% for DAI, for example) to account for periods in the market when prices of the collateral assets keep going down. Learn more about DAI.
Compared to fiat-backed stablecoins, they’ve witnessed a much slower rate of adoption. However, based on data, it does seem that they are slowly starting to gain momentum and dominance over the past years, as people begin to develop trust in the previously experimental mechanisms, which is to be expected.
There are also hybrid collateral tokens such as Reserve Tokens (RSV) that are backed by both digital and fiat assets.
By far the most technically complex and technologically least mature, algorithmic stablecoins rely on on-chain algorithms to handle changes in supply and demand between the stablecoins and their sister tokens that back them by burning and minting them in both directions through a process called seigniorage, to maintain a dollar peg. This, however, only works while there isn’t a strong downward pressure on the peg that keeps stressing the mechanism, which can lead to a downward death spiral during which both tokens keep losing value as users keep panic selling at the same time as the algorithm tries to stabilize the price. Although not fully collapsed, neutrinoUSD and its Waves protocol have been experiencing extreme turbulence for the better part of two months, making users lose confidence in its stability, especially as its working mechanism is very similar to that of UST.
On the less extreme side of algo-stables lie hybrid stablecoins, or fractional-algorithmic stablecoins, such as FRAX, which is partly backed by collateral, and partly algorithmically by adjusting the collateral based on the deviation of FRAX from the $1 peg.
Learn more with our Ultimate Guide to Algorithmic Stablecoins:
https://www.youtube.com/watch?v=hdmotWPNVdQ
Criteria for Comparing Stablecoins
Decentralization
The impact of regional regulations can be a risk many would not find appealing. It’s completely reasonable to expect that the industry would be capable of creating largely decentralized stablecoins that are collateralized by one or more decentralized cryptocurrencies, and governed by a DAO. Such is the nature of MakerDAO and its DAI stablecoin, which has shown its peg strength throughout this year and especially during the most recent catastrophic UST collapse. There is a small caveat, however.
The largest crypto-asset backed stablecoin with a $6.5 billion market cap, DAI, is still heavily backed by the second largest market cap stablecoin, USDC, which itself is backed by fiat reserves, calling into question whether it truly is as decentralized as it purports itself to be. The reality is not as grim as it might seem. Even though USDC and USDP (another fiat-backed stablecoin) comprise 28.1% of the total DAI collateral, ETH and WBTC (Wrapped BTC) boast an impressive 58.6% collateral, tipping the collateralization balance in favour of decentralized digital currencies instead of centralized stablecoins. In addition, the Maker platform with the MKR and DAI tokens, together with all of its smart contracts, lives on the Ethereum blockchain, making it truly trustless and decentralized, even if a good portion of the collateral is not.
On the other hand, the decentralization of all stablecoins might not be necessary, or even desirable, as properly regulated stablecoins almost by definition require a legal entity or a consortium of entities with exposure to major governmental bodies (especially in the US) to be behind the stablecoins, so that there is little doubt about who is responsible for ensuring a full fiat backing of their stablecoins. However, this would imply heavy centralization of control over the stablecoin supply and the general mechanisms for issuance, governance, and, crucially, potential censorship.
A centralized stablecoin is a double-edged sword. On one hand, it gives unprecedented power over a vast supply of stablecoins that a decentralization-focused industry heavily relies on to do daily business. On the other hand, it allows for companies like Binance, who are behind the popular BUSD stablecoin, to prioritize user safety and regulatory compliance, giving users peace of mind about the safety of their assets.
Thus, a strong argument can be made to safely onboard millions of new users through reasonably regulated stablecoins. It’s important for this industry to appreciate the need to offer a wide range of stablecoin alternatives, from centralized to decentralized, for users with different risk appetites and technical competencies in order to accelerate crypto adoption worldwide.
Compliance & Transparency
Closely tied with the level of decentralization of a stablecoin, regulatory compliance and transparency are absolutely crucial for companies who are backing their coins with cash reserves, and who desire to find strong and growing support by institutions, companies, and investors looking to enter the space, but who have been apprehensive to do so due to concerns about a potential inability to redeem their tokens for dollars.
It’s important to note that regulatory compliance is largely a concern for stablecoins operated by corporations, as they are the ones operating mostly behind closed doors, with most of the details about their inner workings, decisions, and collateralization mechanisms being hidden from the end-users and legislators. In such situations, it is more than reasonable to expect a regulatory body to force at least some oversight over how exactly these companies are operating their stablecoins and whether they do possess the collateral they claim to have.
The same can’t be said about open-source, decentralized governance-powered, blockchain-native, crypto asset-backed, and over-collateralized stablecoins that are being operated completely out in the open, with every decision, piece of code, and capital relocation in smart contract escrow accounts being registered on-chain. For coins such as DAI, compliance and transparency are baked into the protocol, and it can be reasonably argued that the necessity for any kind of regulatory oversight is moot, as the community and the free market cryptoeconomic pressures have organically grown a robust and freely auditable stablecoin that’s fully backed by digital currencies.
For fiat-backed currencies, the two large-cap extremes in the range of transparency and compliance are BUSD and USDT. While BUSD has been extensively cooperating with the New York State Department of Financial Services (NYFDS), and showing that every BUSD is backed by an equivalent amount of cash, USDT has been under significant scrutiny over the past years regarding its executives and the USDT backing. These allegations, combined with the lack of transparency by Tether, have made many worry whether USDT is a house of cards about to crumble as the Chinese real estate bubble begins to pop.
Financial Sustainability
In addition to the existential risks posed by the type of collateral chosen for stablecoin reserves, another source of risk that can be analyzed for a project is its cashflow. Changes in the cashflow of a protocol can offer clues about the health of the ecosystem and its ability to withstand market shocks.
Understanding how a stablecoin protocol spends and, most importantly, earns its money, is key to making predictions about the long term sustainability of such projects. Without proper long term revenue models, protocols are left to come up with highly appealing but unsustainable practices such as incredibly high yields on stablecoin deposits (such as UST had) or very low to non-existent trading fees to make it appealing for users to use that stablecoin as their dominant medium of exchange. These kinds of practices sooner or later come back to bite them in the ass, as there is a very high probability that the high yields and low fees are paid for not from organic revenues, but rather from alternative revenue sources (as is the case for Binance), or from project’s treasury/VC investment money, in hopes that they would be able to subsidize the attractive rates for long enough to reach a critical mass of users to then eventually either lower the yields and increase the fees, or simply keep running a ponzi-like operation for as long as possible.
Risks are High, always DYOR (Do Your Own Research)
If something in crypto sounds too good to be true, it very likely is. The most recent example of this was the Anchor Protocol’s 19.5% yield for UST deposits, which should’ve been a huge red flag, and yet many, many individuals chose to deposit their life savings into a supposedly stable UST in hopes of an unsustainably high APY.
For a $50 billion project to go down to virtually nothing in a matter of weeks is nothing short of astonishing, and should serve us all as a warning to do our due diligence thoroughly, and ask uncomfortable questions, even if the whole market seems to be fully on-board with a project.
As the saying goes, “Follow the money.” If a protocol is promising unbelievable returns, if the company behind a stablecoin year after year refuses to prove their fiat reserves, and if a algorithmic stablecoin seems to have a fishy peg stabilizing mechanism that can only work in an up-only environment, then you should exercise caution. And as with everything, whether it be cryptocurrencies or stocks etc, ask yourself if you have really fully done your research and never put in more money than you can afford to lose.
