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Category: Decentralised Finance (DeFi)

Decentralized Finance (DeFi) is a sector within the cryptocurrency and blockchain space which aims to provide a decentralized version of the products available in traditional finance- without central control and at a lower cost with potentially higher returns. These products include loans, interest-bearing deposits and borrowing services.

The advantages of decentralized finance are that it addresses the problems we have with the traditional banking system. For example, decentralized finance protocols are controlled by multiple people, and all participants are required to abide by the rules written into the smart contracts underlying the protocols.

  • 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.

  • Yield ($YLD): An Incentivized P2P Lending dApp?

    Yield ($YLD): An Incentivized P2P Lending dApp?

    Yield ($YLD) is a peer-to-peer cryptocurrency lending/borrowing platform with incentivized mechanism. Decentralized finance (DeFi) has opened new profit-making avenues for people who have additional funds to spare. Instead of just keeping assets in their wallets, DeFi has introduced several models in facilitating peer-to-peer lending and borrowing. Holders of digital assets can now earn interest income from supplying their funds to those who are willing to borrow. Yield introduced an individualized lending pool for each user who wants to earn interest income from their assets.

    What is Yield?

    Yield is an Ethereum-based, peer-to-peer cryptocurrency lending platform. It connects available lenders to borrowers without the need for any third-party to permit the approval of loan requests. Lenders can also conveniently place their offers on the platform which will then link to current requests.

    Yield Lending Page (Source: Yield ‘Lending’ Beta App)

    Loans made on the platform can be repaid anytime the borrower wishes to. Furthermore, lenders receive a fixed and guaranteed interest income which starts with 2% of the principal amount of the loan.

    The borrower also earns YLD as a reward for paying their loans. As of now, the reward for borrowers stands at up to 350 YLD.

    Yield Lending Page (Source: Yield ‘Borrowing’ Beta App)

    This peer-to-peer set-up for a lending platform is cheaper and more profitable for both the lender and borrower, as opposed to the traditional system of lending. After all, in conventional financial firms, looking for available borrowers who will not default on their loans is difficult. On the other hand, borrowers also find it difficult to pass the rigorous financial standards imposed by traditional banking institutions for their lending instruments.

    The Yield project is still in its Beta stage. There are no recent updates yet as to when the program will be launched on the mainnet.

    With Yield, the power to leverage on one’s assets is vested to the owner. Not any bank nor any other financial institution.

    How does Yield Differ from Other Crypto-Lending Platforms?

    Loans made on Yield do not follow the money-market model in supplying funds to borrowers. What does this mean? Let us first take a look at how its competitors do it.

    The biggest crypto-lending platforms, MakerDAO or Compound Finance, for example, have their own pool of funds for specific digital assets available for lending. This is what users see from dashboards that reflect a list of ERC-20 assets, or whichever asset the platform is supporting.

    The pools from these platforms come from users who lock their tokens in smart contracts that are designed to supply the requests of borrowers. The supply of these tokens and the number of its borrowers affect the calculation of its annual percentage yield (APY). So normally, the change in the depth of the pool also impacts its APY.

    While the commonly employed method of lending in most platforms ensures that lenders earn interest from their idle assets and borrowers have funds to access, there are some disadvantages as well.

    One disadvantage that Yield is trying to address is the potential volatility in lending APY. Since the APY for asset pools are automatically computed, lenders do not have control over it. This affects borrowing rates and the amount of profit lenders can earn from supplying funds to a pool.

    And most of the time, borrowers lose out on these market shifts, specifically because this can lead to higher collateralization requirements and risks of liquidation.

    Personal Non-Pooled Loans

    Loans made on Yield are individualized. This means that the supply of a particular asset that you are offering will not be affected by other loan offers since it is not pooled. There are no supply-to-borrower dynamics that will drive wild fluctuations in a lender’s expected APY as well.

    In these loans, borrowers stand to benefit from the transaction too. Yield rewards good peers: those who pay their loans through its native token $YLD. This is expected to incentivize lending and borrowing, a feature that not all crypto-lending platforms have.

    $YLD Token

    $YLD token is the platform’s native utility token. Interest fees on any asset borrowed from the platform are paid in YLD. Transaction fees also use $YLD.

    According to the team behind the project, the purpose of these fees is to discourage malicious actors from taking advantage of the platform and incentivize user activity.

    YLD’s token supply model is deflationary, which means that each time YLD is used to pay for transaction fees, the YLD is burned.

    Additionally, holding YLD gives them benefits such as a 25% discount from transaction fees, an increase in YLD rewards for borrowers, and lower collateral liquidation ratios for borrowers.

    Yield Garden

    Yield has also set up a liquidity staking pool. Through the Garden, users can stake their YLD and earn rewards in doing so. Available staking pairs are YLD-ETH and YLD-RFI.

    Yield Garden (Source: Yield website – The Garden)

    According to the team, the Garden is powered by a slightly modified version of the smart contract from Ampleforth’s (AMPL) geyser. There is a cooldown period for stakers (the time that stakers are not yet allowed to unstake or withdraw) which is set at 7 days.

    Unstaking also incurs 0.75% unstaking fees if it is done earlier than 14 days since the initial stake, 0.5% after 14 days but before 27 days, and 0.35% after 27 days.

    As of now, there is already a total of $2,456,403.31 staked in the platform.

    Conclusion

    While the DeFi space is still relatively young, it certainly has a lot of potential in helping cryptocurrency holders make the most out of their assets. There are a lot of projects today in the space that aims to provide passive income to asset owners and Yield is among those. As new as it is, the approach of the project in the business of crypto-lending seems positive and promising.

    However, how this new approach will work in maintaining a steady supply of funds for borrowers to tap remains to be seen. As of today, Yield’s individualized pooling method on loan supply cannot assure that there will be enough assets to borrow every time. Even with all things considered, Yield is still definitely a project that the DeFi community has to watch out for.

    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.

  • YFI Yield Farming with yEarn Pool

    YFI Yield Farming with yEarn Pool

    Yield Farming is a popular method for cryptocurrency owners to gain passive income. It involves taking advantage of various incentives rewards for locking-up (aka staking) different cryptocurrencies. This article focuses on yield farming for the $YFI token which has become the highest performing yield farming pool.

    Check out our video on how to potentially earn 600% returns through YFI Yield Farming!

    The yEarn project has launched its own governance token – $YFI – this week, sending the Decentralized Finance (DeFi) Yield Farming scene into a frenzy. As of this article, staking stable coins (USDT, USDC, DAI, or TUSD) into the Y pool will yield an astronomical 896% Annual Percentage Yield (APY). This is due to the incentive token $YFI being distributed to staked token holders, making this the single best yield farming pool right now. This has sparked a huge amount of interest in both searches for the $YFI governance token (trending right now on coingecko). Since the token launch, more than $60 Million of new capital has been deposited into the Y pool. Calculate yield using the community made yieldfarming tool.

    WARNING: Yield farming involves a high amount of risk due to the experimental nature of the Ethereum network with potentially undiscovered critical vulnerabilities. Never stake/farm more than you can afford to lose. This is not Financial Advice.

    What is the yEarn (iEarn) Pool

    The iEarn “Y” pool is a yield aggregator – it automatically invests its capital into different DeFi projects – selecting those with the highest yield and return on investment. As a DeFi protocol, a smart contract keeps the invested funds – which makes the project non-custodial. The pool itself is comprised of 4 different stable coins – USDT, USDC, DAI and TUSD – with a total of over $103 Million USD in currency reserves (Assets Under Management – AUM). These reserves are then lent out to different protocols that offer the best rates of return, including Compound, Aave, and dYdX. yPools are considered riskier than other DeFi products such as Compound because lend capital out to a series of protocols – which themselves could be vulnerable to critical vulnerabilities.

    How to Earn the YFI Token

    There are two pools that reward the YFI token for staking. The first and easiest pool to access is the Y Pool on Curve.Fi. This pool is a collection of stable coins that are automatically invested in different lending protocols. This type of pool is usually considered a higher risk due to possible vulnerabilities not just with its own smart contract, but with other smart contracts too.

    How to to earn YFI tokens

    Unfortunately “Yield Farming” for the YFI token has ended. When YFI first launched, all 30,000 tokens were distributed to stakers on the https://ygov.finance/staking platform. Although initially there were plans to distribute more tokens, attempts to come out with a plan to do so have all been voted down in the Y governance. This means it’s unlikely that new $YFI tokens will be distributed in the future. Other tokens such as YFII and YFV still have token distribution for yield farmers.

    What is YFI token

    YFI is the governance token for yEarn (previously known as iEarn). Tokenholders are entitled to vote on upcoming governance decisions for the network – such as potentially stopping all-new distribution of the token. Creator of YFI, Andre Cronje (@AndreCronjeTech) has stated that the token has no intrinsic value.

    “We have released YFI, a completely valueless 0 supply token. We re-iterate, it has 0 financial value”

    Andre Cronje

    This being said, the current wave hype wave and token dynamics have driven up the value of the token. The token follows the “Governance” model where it’s value comes from voting on where the protocol will go next. On top of this, the incentivized Balancer pool (YFI 2%, DAI 98%) requires the staking of $YFI, which locks up further supply. Simply put, DeFi farmers are locking up YFI and DAI in order to receive BPT tokens which could be staked on ygov.finance to gain an additional $YFI. This type of cyclic farming create pseudo ponzinomics and could lead to potentially disastrous results.

    Balancer Warning & new coin minting risk

    One of risks that was mitigated by the team was with token issuance. Currently there is a max cap of only 30,000 YFI tokens. Earlier this week it was discovered that there was a master key which permitted YFI developer Andre Cronje to mint new coins and potentially flood the market with new coins. If he did this, it would of been possible for him to take the entirety of Pool#2 and Pool#3 on Balancer, with a total of more than $150 Million USD. Luckily this did not happen, as he quickly created a multisignature address which requires 6/9 key holders to agree to minting new tokens. The purpose of this is to remove single party risk as 6 of the 9 keyholders are required to agree to create new coins. On top of this, even if they do agree, the community will have 3 days notice before anything happens.

    Overall the long term objective of YFI is to leave control of the total supply of YFI and distribution up to the community to decide. The voting aspect of YFI will allow governance token stakers to decide who to do with the platform.

    YFI distribution stop

    Distribution of $YFI tokens will temporarily stop as new contracts are being prepared. Times for the pools stopping are as follows:

    Resources:

    yEarn documentation – http://docs.yearn.finance
    yGovernance and staking – https://ygov.finance
    Pool Information / Calculator: https://yieldfarming.info/
    Curve Guide on Pools – https://guides.curve.fi/how-to-choose-the-right-curve-pool-for-you/
    Coindesk Report: https://www.coindesk.com/troll-token-why-defi-yield-farmers-are-now-all-about-yfi

    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.

  • Paralink Network ($PARA): expanding the potential of DeFi apps with data

    Paralink Network ($PARA): expanding the potential of DeFi apps with data

    Paralink Network is a platform built on Polkadot sourcing crucial real-world data for decentralised finance (DeFi) applications.

    Blockchain technology has huge potential, but blockchain applications are limited by what real-world data they can access. Without this crucial real-world data, blockchain cannot be used in areas like prediction markets, insurance, litigation, or other coordination problems that rely on social institutions and corporations. This is commonly known as the oracle problem.

    While several solutions, like Chainlink’s decentralized oracles, are already being used, Paralink has made its own headway through the development of a cheap and efficient solution.

    Background

    Jan Knezevic, Founder and CEO of Paralink, is a Slovenian auditor who had previously worked in financial units, such as KPMG, one of the Big Four accounting organizations, in 2018.

    During his time there, he developed an appreciation of blockchain technology. Like many other cryptocurrency enthusiasts, he was able to recognize the restrictions of blockchain applications when exchanging real-world information.

    He saw that for such applications to be useful for complex industries like the stock market, they had to have verified information flow from the real world. Realizing that the gambling industry also needed reliable data flow, especially for platforms like casino utan svensk licens, he set out to bring a scalable cost-effective solution to the problem. This led to the development of the project now known as Paralink.

    Paralink is an oracle platform that provides real-world data ingress across multi-chain networks. The platform makes it possible for applications built on blockchain networks like Ethereum and Polkadot to interact with traditional web interfaces.

    It is developed to help distributed systems communicate effectively with each other as well as the outside world. With Polkadot providing the supporting architecture and framework for its integration, Paralink functions as a substrate.

    In addition to collecting and organizing real-world data for Blockchain application, the platform also confirms their validity. The data could be anything from sports, weather, elections to financial data, stock, foreign exchange, etc.

    It can carry out all these functions through an open-source software called the ‘Paralink node’. The platform is currently designed with a focus on financial applications like the stock market and insurance.

    The Paralink node is the center of the platform. As stated, the node is open-source software. It is built to access and collect real-world data that channels back to smart contracts via callbacks.

    Paralink Network
    Paralink Network (Image Credit: Medium)

    The node can be run independently as a centralized medium for real-world data into blockchain applications. That way, the solution is much cheaper. However, it is more practical for a node to be operated by self-organizing quorums to provide a strong, sustainable data ingress service.

    The node is compatible with different data protocols including JSON, HTML, XML, SQL and Grpc. The creators are working to improve its interaction on different APIs actively.

    Developers can then query data from sources outside of the Blockchain using Paralink Query Language (PQL).

    Currently, the Paralink node is built to support just the Ethereum and Polkadot blockchain network. However, the long term goal is to build a flexible node compatible with any public chain, thanks to the node’s architecture and open-source model.

    To achieve the goal described in its whitepaper, Paralink has to be effectively flexible enough to be compatible with a wide range of Blockchain applications and protocols. To this end, the platform is offered in three different security models, each with varying characteristics concerning cost, convenience, and security.

    Simple Ingress

    This is the most cost-effective model available. Here, Paralink nodes are available for use on multi-chain networks via any third-party data source. The model is simple to implement through PQL definition. It is also fast and can certify the authenticity of multiple data sources.

    It has a major drawback, however, in that it requires trust in a centralized node operator. Furthermore, it is also ineffective for complex financial applications.

    Trusted Ingress

    This model is an upgrade to the first-described simple ingress, which utilizes encrypting PQL results with cryptography. The results are accompanied by private decryption keys from reputable data providers.

    As a step-up from the rudimentary model, it is highly functional for financial applications. Other types of applications like prediction markets and gambling platforms can be also covered.

    Trusted ingress is also cheap and effortless to implement. Moreover, callback support is also available to all chains without the need for a bridge. However, it is susceptible to being breached due to a single point of failure.

    On-chain Security

    On-chain security is the last security model available, which does not depend on a single source for verification. Hence, it is almost impossible to break. This is especially useful for money markets, derivatives, and other financial applications that involve high-stakes.

    On the other hand, the model needs linking networks (bridges) like Ethereum and Polkadot, hence, requires more chain coordination to pull off.

    Para Token ($PARA)

    PARA is the native governance token of the Paralink platform. Users are incentivized to hold PARA tokens in order to enjoy governance rights and earn APY based on the amount they hold (which in turn must be staked).

    PARA tokenomics

    There is a maximum supply of 10 billion PARA tokens. The allocation and distribution of PARA tokens are as follows:

    PARA token distribution
    PARA token distribution (Image credit: Medium)

    The distribution system is quite similar to other crypto protocols. 13.5% of the total would be shared among the developing team after a vesting period of two years. About 18% would be kept as reserve to as a buffer. 20% would be disbursed as nominator rewards, another 20% for Validator rewards.

    10% would be deployed for the ecosystem. This will serve as incentives for early Paralink adopters and relayers.

    In an update on 1 February 2021, Paralink have confirmed that they will not be holding a public sale of the PARA token. Their reason for this is due to the inherent unfairness of the auction process, and difficulties in completing the KYC process for purchasers.

    However, Paralink still wants its eventual token holders (who can purchase the token when it is listed on exchanges) to have more incentives. So the tokens that were initially reserved for the public sale will now go into the lockup rewards pool.

    Conclusion

    Without a doubt, the cryptocurrency industry’s future depends on how well its application can integrate with the real world. To elaborate, financial applications need to be able to exchange real-time information with real-world entities to ensure an accurate, reliable evaluation of assets for buyers and sellers — which is the basis for Paralink nodes’ development.

    Blockchain networks would require secure and cost-effective solutions like this for seamless communication among the various chains, as well as the outside world before it can unleash its latent potentials.

    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.

  • InsurAce Protocol: Insuring decentralised finance?

    InsurAce Protocol: Insuring decentralised finance?

    The cryptocurrency industry has enjoyed rapid growth and adoption thanks to its accessibility and open-source nature. Different people from all over the world can participate freely in crypto projects, with the option of anonymity. And thanks to this ease of access, the total locked value (TVL) in DeFi grew to over $3 Billion in 2020 and $44 billion in 2021, according to DeFi Pulse.

    However, as an industry based majorly on the internet with trillions of liquid digital assets, it is no surprise that it makes the perfect attraction for hackers hoping to run off with a score.

    Luckily, in the decentralized finance (DeFi) corner, liquidity providers (LPs) can still protect their investment through insurance protocols, each of which is armed with their unique solutions – one of the more promising ones is InsurAce.

    Background

    InsurAce was created by Oliver Xie, a cryptocurrency enthusiast and computer programmer. The decentralized insurance protocol was developed during the peak of DeFi growth in the third quarter of 2020, launching officially in October of the same year.

    The protocol is headquartered in Singapore, led by Oliver’s vision and steadfastness. After just two months of existence, the protocol was able to raise $1 Million in seed funding, from renowned institutions such as DeFiance Capital, Signum Capital, and Parafi Capital. Later, in February 2021, and an additional $3 Million was raised during its strategic round.

    They currently run a tight team, with a few experts and professionals at the helm of affairs, most of which are based in Singapore.

    What is InsurAce?

    InsurAce is an insurance protocol that offers DeFi assets a reliable, decentralized, and flexible coverage. Users are also able to enjoy low premiums and a sustainable investment return.

    InsurAce’s flexibility is its major highlight as it gives users the ability to cover their assets with a portfolio-based product design that optimizes cover cost. Users would also benefit from their cross-chain coverage and wallet accessibility, along with the protection of their assets and investments.

    How Does InsurAce Protocol Work?

    As both a DeFi and Insurance protocol, InsurAce runs two different arms that work synergistically to benefit all parties involved. As a decentralized platform, each role is filled by its users, each of which are rewarded with the INSUR token.

    The protocol also offers a more streamlined experience with its permissionless feature, where users can enjoy full anonymity without the KYC process that complicates other DeFi Insurance platforms.

    The Two Arms of InsurAce Protocol

    The first part of the investment arm involves contribution by a first-party known as the investor. As the name suggests, investors finance portfolios, each portfolio with its own risk/reward ratio which investors can choose from.

    The next party is the insurer, and these are participants that stake assets in the mutual insurance pool created by investors. The more direct class of users are the “insured” – they are the insurance customers, and they get the benefit of buying insurance covers, either in single or multiple pools.

    2 Arms of InsurAce Protocol (Image credit: InsurAce whitepaper)

    Features

    The InsurAce protocol will be responsible for providing a supporting architecture for the smooth operation and integration of the arms. To start with, the protocol will function to ensure adequate evaluation of risk to manage losses.

    Two risk assessment procedures exist. One with experts analyzing potential assets and pools with thorough auditing and code analysis. After which, a community assessment is carried out by volunteer members for further analysis and to come up with a risk score.

    It will also be in charge of claim requests, for insurers to check out their buys.

    More important, however, is the availability of liquidity for all users. To ascertain this, InsurAce plans to develop an enriched product line that is capable of covering a diverse number of DeFi protocols. By providing insurance services to multiple DeFi projects the platform retains its flexibility, remains open to opportunities while keeping tokens moving.

    The insurers would enjoy access to a wide range of asset pools in addition to considerably reduced cover costs and zero premium protection.

    SCR Mining and Governance

    When users bring in capital to stake into different mutual pools, they are rewarded with INSUR tokens as incentives. This process is known as Mining, and it offers rewards based on the magnitude of user contribution to the platform.

    As with most other DeFi projects, a Decentralized Autonomous Organization (DAO) would be responsible for managing and regulating the activities of InsurAce protocol. To be eligible to become a member of the DAO, users must own INSUR Tokens.

    An advisory board made up of InsurAnce employees and independent experts will oversee the affairs of the DAO community, provide guidelines for its operation, and provide a contingency plan if the decentralized voting mechanism should fail.

    INSUR Token

    The INSUR token is the standard token on the InsurAce platform. It is based on Ethereum’s ERC20 standards and serves a variety of utility functions.

    As a governance token, it confers voting rights on its holders. Users who have the INSUR token can propose changes, vote on issues and proposals, and participate in claim assessments on the protocol. When a token holder participates actively in governance, he becomes entitled to a share of the fees generated on InsurAce.

    The token also incentivizes involvement in all the different roles available on the protocol. It serves as the reward for mining through capital provision, liquidity support, staking in investment pools and products.

    There will be a total of 100 million INSUR tokens in supply. And it is planned to be launched through a Liquidity Bootstrapping Pool (LBP) on Balancer from March 15th to March 17th, 2021. The proposal would see a total of 6,675,000 tokens vested after the LBP ends – with about 45% of the total token distribution kept in SCR mining reserves.

    Conclusion

    The sheer amount of fortune going into DeFi project and associated mining mechanisms is too much to leave to the whims of hackers and project developers. The impressive progress made by pioneer insurance projects like Nexus Mutual and Augur should not be taken for granted either.

    However, these insurance protocols are still scarce in numbers and hardly enough to cover the ever-growing need of the DeFi sector.  Which makes it difficult not to root for a platform like InsurAce that puts everything in place, taking the best out of existing protocols and adding a fresh detail.

    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.

  • Glitch ($GLCH): world’s first “for-purpose” DeFi protocol?

    Glitch ($GLCH): world’s first “for-purpose” DeFi protocol?

    Glitch is a platform that seeks to complement the Ethereum network by providing a protocol specifically for DeFi applications.

    Ethereum brought the possibilities of blockchain technology to life by birthing many crypto-based protocols that leverage its smart contract feature to build incredible financial applications. The sporadic development of these applications, however, has weighed down the Ethereum network, causing congestion and inefficiencies.

    While many are placing their hope on the full-deployment of Ethereum 2.0, other innovators don’t have that patience, and therefore, are creating their own solutions, such as Glitch.


    Background

    Sean Ryan, the founder of Glitch, is a business development expert who had contributed to the creation and acquisition of several SAAS products and companies before the creation of his blockchain project.

    Ryan has advocated for the cryptocurrency industry since 2015 and has developed a passionate interest in Decentralized Finance (DeFi) systems over the years.

    He created Glitch in August 2020 and was able to leverage his finance and business development experience to put together an incredible team to build a DeFi solution now known as Glitch Protocol.

    Hong-Kong serves as the platform’s development base.

    What is Glitch?

    Glitch protocol is a blockchain super protocol constructed to support and provide a working framework for decentralized financial applications to be built upon, and is designed to work in symbiosis with the Ethereum platform.

    It aims to be a scalable solution, providing increased throughput that would enable the process of thousands of transactions every second.

    Described as the world’s first “for-purpose” DeFi protocol, it offers a smart-contract platform for facilitating decentralized applications (dApps). In addition to the support it provides, the Glitch protocol also provides an enhanced user experience and efficient cross-chain interoperability.

    How does Glitch Work?

    As a solution that prioritizes user experience, it is designed to work effectively to remove redundancies caused by non-functional applications. However, its primary selling point is its high scalability, cost-effectiveness, and significantly increased throughput.

    The core concepts and features responsible for bringing these ideas to life are explained in the next few paragraphs.

    Consensus Mechanism

    The Ethereum platform used the same framework as Bitcoin to improve its consensus mechanism from a Proof of Work (PoW) to a Proof of Stake (PoS) system. Glitch protocol, on the other hand, employs a faster consensus mechanism known as Delegated Proof-of-Stake (DPOS). 

    In the DPOS mechanism, stakeholders reach consensus by outsourcing the network’s security to third-parties known as ‘block producers.’

    These individuals are authorized to create a new block every 0.5 seconds. Byzantine Fault Tolerance (BFT) is imposed on block producers to prevent block creation on multiple forks. Despite having a bypass to this limit, the protocol would automatically change consensus to the longest chain.

    What’s unique to Glitch’s consensus mechanism, however, is that voters do not select the block producers. Instead, each stakeholder is given an equal chance at block creation. This is to ensure fairness in the governance system.

    The Vault 

    The Vault is the system by which profit is distributed on the Glitch protocol. An immutable vault on the Glitch Blockchain collects 20% of all network fees and other revenues generated from the dApp. The deposit is automatic and shared among stakeholders on the network. 

    This revenue-sharing model encourages active participation in the network while fostering community support. The model also creates a positive feedback loop where the community supports developers and is incentivized to continually do so. 

    This loop drives the protocol forward, which maintains the platform’s progress.

    Token Wrapping

    Token wrapping on Glitch involves mirroring ERC-20 tokens from Ethereum on its platform with its GRC-20 token standard.

    Users with tokens on the Ethereum network can register their Ethereum address on the Glitch protocol. Their tokens can then be mirrored as a Glitch coin during an initial snapshot.

    This way, developers can simulate products and dApps from Ethereum while benefiting from the faster throughput and circumventing the high transactional costs they would otherwise have to work with on ETH. And while token wrapping is currently being developed for ERC-20 tokens alone, there are plans to incorporate other blockchains.

    Glitch Token ($GLCH)

    The Glitch Protocol allows the use of a single token, known as Glitch Token (GLCH), for all transactions and dApps be built across its ecosystem. This ensures consistency for all applications that utilize the network. In addition, users can exchange GLCH tokens on Uniswap.

    The total supply for the native token (GLCH) in circulation is 88,888,888 GLCH. After the public sale, 15% of the total supply (i.e. 13,333,333 GLCH) will be openly circulating.

    Glitch GLCH Token Distribution

    8,888,888 GLCH had been sold in the seed round at $0.03375 / GLCH. 0.625% of tokens will be released weekly for 4 months.

    22,222,222 GLCH had been sold in the private round 1 at $0.0675 / GLCH. 3.125% will be released weekly for 2 months.

    • 4,444,444 GLCH had been sold in the private round 2 at $0.07875 / GLCH. 1.125% will be distributed weekly for 1 month.

    • 13,333,333 GLCH had been allocated to the public sale at at $0.09 / GLCH. There were immediately unlocked upon listing on 11 January 2021 at 6:00am PST.

    Glitch Rewards Program

    Glitch Finance had provided initial liquidity on the GLCH/ETH pair on Uniswap. To incentivise users to provide liquidity, Glitch has a LP Rewards Program where they have allocated 888,888 GLCH (i.e. 1% of the total supply of GLCH) for rewarding participants. This program will run for 3 months starting on 17 January 2021.

    Glitch DAO

    The Glitch Protocol is governed by a network called the Glitch DAO (Decentralized Anonymous Organization). The DAO’s members are stakeholders who locked up their Glitch tokens in various pools. 

    The Glitch DAO has a unique structure, which employs two different DAO models to govern the protocol at its different stages. These two models have been engaged as a solution to conflicting incentives that are borne out of the need to support both Ethereum-based dApps on the Glitch network, as well as native dApps built from scratch on Glitch. 

    This difference in product-based risks the problem of exclusion if the DAO was based on either platform (Ethereum or Glitch). 

    The first model is an off-chain voting system, which uses an oracle to assign voting weights to either platform. This way, the potential exclusion would be mitigated. Yet, this model is vulnerable to fraud through oracle manipulation, especially when there is a substantial TVL (Total Value Locked) on native Glitch products.

    The other model is the on-chain DAO, which would see the establishment of two separate DAO’s that govern and support the Glitch Protocol on their platforms. Both DAO would contribute to the progress of the ecosystem.

    For the time being, before the TVL becomes significant, the off-chain DAO model would be used. 

    Conclusion

    Most DeFi enthusiasts agree that the current financial system has to be decentralized for the ideal of a free market to come to pass. Transactions and processes should be transparent and accessible by anyone with interest. 

    With the power of blockchain technology, this revolution is closer to home than ever as DeFi Innovators are already building applications for the Ethereum 2.0 platform. All that is needed now is a good network of smart contracts that is fast and efficient. 

    Protocols like Glitch would help achieve that outcome as a complementary protocol to the Ethereum.

    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.

  • Union Finance ($UNN): tailored protection from DeFi risks?

    Union Finance ($UNN): tailored protection from DeFi risks?

    Union Finance is providing a tailored solution which will provide protection from risks and reduce costs in decentralised finance (DeFi).

    What is Union Finance?

    Union Finance is a technology platform that combines bundled protection and a liquid secondary market with a multi-token model. The Union platform guarantees full-stack DeFi protection to all users as it seeks to reduce the risks and cost within DeFi ranging from Layer-1, smart contract, transaction completion risks, and exposure.

    Since its introduction, Union finance has had a considerable impact in the cryptocurrency space and is composed of experts with years of experience in their respective sectors. Union’s protocol offers a unique combination of traditional insurance and the blockchain’s tremendous efficiency through its broad coverage and costs-savings model specific to the DeFi sector’s needs.

    Similarities With Traditional Insurance

    Furthermore, Union’s algorithm addresses the apparent break between DeFi and CeFi unlike any other blockchain-based solutions as it provides protection to various layers of coverage and segregated underwriter exposure, with a multi-token protocol that cleanly separates governance from the market dynamics of protection buying and writing.

    Similar to traditional insurance companies, the Union Protocol prides itself on total protection and coverage under their blockchain-based bundled insurance packages. However, the platform takes it further, by utilizing the blockchain concept of decentralization, freeing the platform from “members only” models and KYC requirements. Furthermore, Union offers an effective governance process to safeguard the validity of claims and the solvency of pools to meet coverage applications.

    DeFi-Related Risks

    Union’s team also offers a secondary market enabling the management of DeFi-related risks which facilitates the protection of traders and protection writers within the DeFi ecosystem. Additionally, this frees up capital and distributes risk, allowing the DeFi sector to scale more efficiently while reflecting the current market trends.

    The blockchain solution has a distinct economic model that has sustainably grown the decentralized ecosystem, along with a capital and pricing model that balances the supply and demand curves while adapting dynamically to economical conditions set by the market and keeping transparent reporting of financial and risk key performance indicators (KPIs) to create trust and increase adoption of the protocol.

    Three-Token Model

    Overall, Union Finance’s DeFi protection platform is managed through a three-token system comprised of the UNN, uUNN, and pUNN tokens.

    UNN Token

    UNN is the core token of the financing platform as it is used for governance purposes. UNN users are granted voting rights within the company, giving them influence on protection claims and related conflict resolution protocols, adjusting risk parameters, and adjusting incentive programs, etc.

    uUNN and pUNN Tokens

    As for the uUNN token, it is used by clients of the platform and protection buyers enabling them to impact the platform’s protection policies. The pUNN token on the other hand is given to writers of the protection, representing a percent share of the protection pool that the writer is powering.

    uUNN and pUNN tokens are only available on Union’s secondary market, which guarantees the separation of governance tokens from protection tokens, preventing a conflict of interest within the platform.

    Additionally, through the three-token based system, Union finance enables users to benefit from a dynamic and unique pricing model for the protection premium that provides an efficient and real-time price discovery mechanism, as well as a capital model that adjusts leverage, which maximizes solvency of protection pools while providing returns through surplus capital. Furthermore, a multi-layer governance, claim, and challenge mechanism ensures all operations are handled fairly and transparently.

    Key Components of Union Finance

    Buyer Protection

    A protection contract is automatically generated as a buyer purchases a protection product(s) on the platform. Upon purchase, each contract specifies the:

    • type of protection – this identifies which protection pool writes the protection and in return, earns the premium;
    • the cover amount;
    • the term of the insurance (start date/end date); and
    • the premium level.

    The purchase of the protection contract is confirmed when buyers receive uUNN tokens which demonstrate their right to the token protection policy. Then, the protection protocol will begin later after the premium is deposited or the start date of the protection contract. Buyers who stake UNN tokens through reliable decentralized exchanges (DEX) like Uniswap will receive a discount in the protection premium.

    Capital Model

    The capital model is a fundamental component that optimizes the leverage of protection writers, locking capital to meet solvency based on stringent standards used in insurance and finance while providing economic incentives that attract protection writers and help fund ecosystem development. Additionally, protection writers can use their pUNN tokens and stake for more UNN, enabling them to share in a small portion of UNN that accrues every block.

    UNN Staking

    UNN holders can stake their holdings to earn additional UNN through liquidity mining, which is split into two distinct categories; liquidity providers and locked tokens for governance purposes. Union will soon allow UNN holders to provide liquidity on different DeFI ecosystems such as Uniswap. As for the second category, UNN users will have control over decisions regarding the future of the UNN token through the decentralized governance process. 

    Conclusion

    Union Finance’s arrival to the DeFi sector came at a time when the potential risks and problems DeFi users have been facing on a daily basis have become too overwhelming. Thankfully, the platform simultaneously manages to resolve those risks through its distinct ecosystem and protection products.

    Union Finance protocol has the potential to elevate the DeFi sector by further impacting and empowering investors within the blockchain, as it decreases the barriers to entry for retail users and lays the foundation for institutional investors, thereby creating a trustworthy DeFi ecosystem.

    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.

  • Linear Finance ($LINA): The future of synthetic exchange platforms?

    Linear Finance ($LINA): The future of synthetic exchange platforms?

    Linear Finance ($LINA) understands that decentralized finance (DeFi) has opened new possibilities for derivative offerings and that many exchanges have the apparent problems of front-running, expensive gas fees, and liquidity issues. Linear Finance seeks to go around those issues with its cheap, quick, and transparent synthetic asset exchange platform. With Linear, users can simply make a synthetic asset that contains a portfolio of different underlying tokens based on the exposure that they are willing to take. This presents new yield-making opportunities for anyone based on their customized financial goals.

    Check out our interview with Linear Finance!

    https://www.youtube.com/watch?v=JcXsEwj5hpI

    Background

    Drey Ng and Kevin Tai, Co-founders of Linear Finance, built the project with a vision of an inclusive and more democratized access to investment opportunities. By their team’s expertise in different crypto initiatives and financial instruments, Linear made a cross-chain, Ethereum-based protocol that seeks to fulfill their vision.

    With Linear, users can make their own portfolio exposures and manage them on their own. This initiative enables investors to easily invest, save, and earn efficient profits from their assets.

    What is Linear Finance?

    Linear Finance is a decentralized delta-one asset protocol where users can make, manage, and trade synthetic assets. This gives users exposure to different kinds of assets without having to actually own their underlying assets.

    An additional feature that Linear Finance has introduced is a cross-chain compatible and decentralized protocol that can support a faster, more affordable, and secure exchange of synthetic assets.

    Linear Finance’s platform is powered by its native token, LINA. It can be used for many purposes such as payments, staking, liquidity mining, governance, and investing in “Liquids.” Liquids are Linear’s synthetic assets composed of different underlying tokens or investment options.

    LinearDAO

    LinearDAO is the governance community who controls important platform designs and system parameters including pledge ration, LINA inflation reward and frequency, transactions fees, proposal implementation, and many more. Furthermore, they also regulate the profit and loss regarding liquidation.

    Perks and Special Features

    The project promises infinite liquidity and no slippage. Here are some of the perks users can find with Linear Finance:

    • Convenience: The protocol promises quick transactions with low transaction fees. Any kind of user can enjoy the platform as well, whether they are a market maker, staker, or trader.
    • Transparency: To prevent front-running, every transaction made within the exchange is made transparent to all users. This also reduces systemic risks on the part of each network participant.
    • Ethereum-based: Because it is built on the Ethereum network with cross-chain compatibility, it can work alongside other DeFi projects too.
    • User-tailored options: There are different exposure options that users can freely choose from, such as other tokens, commodities, or market indices.

    The whole Linear platform is built on two different blockchains but they complement each other thanks to cross-chain compatibility. For users, they only need to open an Ethereum-based wallet and an EVM-compatible wallet.

     Linear automatically links these two together through smart contracts. Here are some of the advantages of an infrastructure modeled around that concept. They are:

    • Maximized DeFi support: While LinearDAO and LINA tokens are based on Ethereum, its use of EVM and smart contracts make it easy for the platform to interact with other DeFi protocols.
    • Affordability: Buildr and Exchange function through smart contracts on top of EVM-compatible blockchains. This enables Linear to support the building and trading of Liquids at very minimal gas fees.
    • Fewer risks of front-running: The block time confirmation for other EVM-compatible blockchains are much faster than Ethereum. This allows users to create their own Liquids at more updated prices through the help of oracles. This way, the risk of users front-running the exchange becomes much lower.

    LINA Token

    LINA can be used for payments, staking, and governance participation. But mainly, LINA functions as the base collateral needed to mint Liquids through Buildr, the decentralized application (dApp) designed to manage synthetic assets.

    To create Liquids, users have to “pledge” 100% of their digital assets, which also means collateralization. This is to ensure that Liquids are fully-backed by an underlying asset, saving the stability of the system from the volatility of synthetic assets. The pledge requirement can be reduced eventually if the LinearDAO deems it necessary.

    Collateralization

    Buildr takes a hybrid approach in terms of collateralization. For Liquids, users need to deposit a mixture of LINA and other cryptocurrency tokens to generate a synthetic asset. The ratio is 80:20, where at least 80% of the collateral must be in LINA and 20% can be in other cryptocurrencies.

    Staking

    Staking LINA offers users many incentives. These are the following rewards that users can receive by doing so:

    • Exchange Fee Reward: The transaction fees collected from users of the Linear.Exchange platform, currently set at 0.25%, is redistributed weekly to LINA stakers on a pro-rata basis. For non-LINA stakers, these rewards can also be provided too but it will depend on the decision of the community governance council.
    • Inflationary Reward: LINA has a starting inflation rate of 75% which decreases on a weekly basis. The inflation reward is given to LINA stakers on a pro-rata basis as well.
    • Yield Farming: Yield farmers help maintain Linear’s debt pool and the whole platform. For the first two years of the project, users who actively use the exchange can receive token bonuses. These token bonuses can then be deposited by yield farmers in other liquidity pools such as Balancer, Curve, and Uniswap.

    Where can I buy/sell/trade $LINA?

    $LINA is now tradable on other exchanges as well like Bitmax, MXC, Bilaxy, Bibox, Hotbit and Hoo.

    Linear.Exchange

    In facilitating faster trade activities with almost unlimited liquidity, Linear is building their own exchange. As of now, Liquid is collaborating with other public blockchains to reduce transaction settlement timeframes to as quick as one second every transaction coupled with instant finality.

    With a plan of partnering with oracles, Linear also believes that they can solve problems with front-running as they gain the capability of refreshing prices on a frequent and quick basis at much lower prices for the underlying assets.

    Linear Finance ($LINA) token public sale

    The token public sale took place on 14th September 2020. A total of 47,222,222 LINA tokens were sold in 2 rounds. The first round had 25mil tokens at $0.00400 per token. The second round, 22,222,222 tokens at $0.00450 per token.

    The sale was 40 times oversubscribed and closed earlier than expected (it was supposed to last for 24 hours). Each participant in the sale had to purchase 500 USDT/USDC worth of LINA. Hence only 400 participants were able to get the allocation on a FIRST COME FIRST SERVED basis. This was determined by the time/date stamp on their Google Form submission. The first 200 users were allocated LINA tokens from round 1, and the remaining 200 participants from round 2. This was however subject to the registrants completing the KYC process in a period of 24 hours.

    $LINA was first listed on Uniswap and reached more than 20x from public sale price (and around 60x from private sale round 1). It is now stabilized at around $0.005 (as at 3 November 2020).

    Linear pre-staking platform

    Immediately after listing, Linear Finance has launched its staking platform. Holders can participate in the 8 weeks pre-staking program and get rewarded. The APY has been around 600% for weeks and has now decreased around 370%. All the earnings will be claimable 6 months after mainnet launch but users can withdraw their staked funds at anytime.

    Partnership announcements

    In the weeks following the launch, Linear has announced partnerships with Nervos, Moonbeam and Hex Trust.

    Nervos is an open source blockchain that offers security and trustlessness without compromising on scalability and performance with its unique layered architecture. The collaboration is focused on improving Linear’s cross chain capabilities and penetration of the Chinese market.

    Moonbeam, an Ethereum ($ETH) compatible smart contract parachain, is a strategic partner to help set the feet into the Polkadot ($DOT) ecosystem and level up Linear’s interoperability. Finally, the partnership with Hex Trust as a custody partner, will give Linear the chance to offer secure, institutional grade custodial services for institutional investors.

    A next announcement has revealed a new partnership with 3Commas, a cryptocurrency trading platform that helps users build automated trading bots. The investment is meant “to include future integration of the platforms and tools, streamlining operations and allowing for a greater range of features and offerings”.

    Testnet is live

    On 16th October 2020, the first testnet for Buildr has been released. Buildr is one of the core dApps of the Linear suite, where users can stake their $LINA (and soon more collaterals) to build ℓUSD, the base currency of Linear Exchange. Stakers are entitled to rewards and to a part of the transaction fees generated by the exchange. ℓUSD tokens can be minted to purchase synthetic assets within the exchange itself and can be moved to other protocols.

    The last testnet update has just come out allowing users to purchase “Liquids” with ℓUSD on Linear.Exchange. Meanwhile, mainnet launch is allegedly happening in a couple of weeks.

    If you want to read more and discover how to contribute to the testnet, please have a look at the articles here and here.

    More than 222 million of $LINA tokens are staked, for a total value of more than USD$1 million.

    New Partnership with Band Protocol

    In this article dated November 16, Linear Finance has ufficially announced their partnership with Band Protocol, cross-chain decentralised oracle.

    The biggest problem this collaboration is trying to solve is front running. As Drey Ng, Co-Founder at Linear Finance said: “Front running is a fundamental problem not just for current synthetic asset trading but all trading in general”. Not solving this problem would jeopardize all “the benefits of cross-chain compatibility (such as speed and cost), and a superior creative selection of synthetic assets”.

    How Band Protocol Oracle works with Linear
    How Band Protocol Oracle works with Linear

    Other reasons why Band Protocol was chosen are the minimized network risk., end-to-end customizability for real-time data and truly decentralized oracle mechanism. The partnership will start securing the Linear Protocol on Binance smart Chain, the first project’s cross-integration, where the BEP token has just been created (the common $LINA we see on exchanges is an ERC-20 token).

    The team is now working on features to allow users to seamlessly swap chains.

    Mainnet Buildr Launch and new staking program

    The Linear Mainnet Buildr v1.0 went live on December the 21st, after months of extensive testing. The Buildr dApp is the heart of Linear’s decentralised application suite. Users can stake $LINA tokens to build ℓUSD and earn rewards. Here is a complete and detailed guide on how to use Buildr to the fullest.

    All of the $LINA from the pre-staking program were migrated seamlessly to the mainnet and while previously earned rewards will be blocked until next June, new mainnet staking rewards will be locked for 1 year from launch. They will count towards the P-Ratio and can be used to build $LUSD. It is important to note that in order to be eligible for rewards, users are required build ℓUSD or any subsequent Liquids.

    Binance Smart Chain’s Buildr v2.0 launch

    As anticipated, Linear wants to bring Cross Chain compatibility and ease of use to Defi and Ethereum users. The team had, in fact, previously declared that “Linear was designed for all users (no matter how much LINA you hold) and transaction costs will not become a barrier to entry. Nobody will get left behind”.

    The promise has been kept and Linear.Builder Mainnet v2.0 with full Binance Smart Chain (BSC) integration and swap has gone live on January the 15th, 2021. Users can now enjoy almost gasless fees when interacting with the platform.

    The transaction was seamless and old stakers only have to connect to Buildr via MetaMask using the BSC Mainnet (they can also use Binance Chain Wallet) and they will see their Lina tokens and rewards already there. For new holders who would like to stake for the first time, there is an internal ERC-20 -> BEP20 swap whithin Buildr itself. More info and complete instructions can be found on the Medium article.

    Be careful!: There are now two versions of the $LINA token. If you send the Etherum version to a BSC wallet or vice-versa (whether it is a custodial or non-custodial address) you will lose your tokens! If in doubt on what to do, contact the support team via the official channels which you can find on their Website.

    Linear will be listed on Binance Innovation Zone

    Binance has announced it will list Linear Finance’s $LINA token on its Innovation Zone. Trading for $LINA/$BTC, $LINA/$BUSD and $LINA/$USDT trading pairs will start at 12:00pm (UTC) on 18th March 2021.

    Furthermore, Binance Launchpad is offering 21,084,000 LINA tokens for sale at at 0.00031044 BNB for 1 LINA. Subscription has already ended at 1:00p.m. (HKT) on 18th March 2021 and tokens will be sent to successful applicants at 6:00p.m. (HKT) on the same day.

    Conclusion

    With the rising gas prices in Ethereum, as well as the emerging trend of yield farming, the DeFi space is presented with new financial opportunities but is discouraged by its costs. Projects such as Linear is a promising addition to the space as it seeks to go around these problems.

    With Linear as a platform to easily build and manage investments, users can now enjoy quick and affordable profit-building opportunities. And in recognition of the real purpose of decentralization, Linear appears to be on the right track after putting in the pipelines a roadmap for a planned transition to community governance.

    Linear is certainly on the radar of a lot of renowned investors in this space. They have recently completed a USD$1.8m seed round with notable backers in the investment space such as NGC Ventures, Hashed, CMS Holdings, Genesis Block, Kenetic Capital, Alameda Research, Evernew Capital, Soul Capital, Moonrock Capital, Black Edge Capital and PANONY. According to Linear, this funding will go towards accelerating the development of their testnet and mainnet, as well as promoting their platform. It will certainly be exciting to see what the Linear Finance team will be releasing in the months to come.

    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.

  • Polkadex: Polkadot’s DEX for the DeFi ecosystem

    Polkadex: Polkadot’s DEX for the DeFi ecosystem

    Polkadex is a new addition to the Polkadot ecosystem. Polkadex a decentralised cryptocurrency exchange (DEX) concentrating purely on tokens powering decentralised finance (DeFi) applications through a user-friendly interface and lightning-fast transactions.

    Background

    Polkadex is developed by a team of highly skilled professionals led by Matthias Hafner (cryptoeconomic advisor), Vivek Prasannan (executive director), Gautham J (CEO & tech lead), and Deepansh Singh (COO). In addition, the team comprises advisors on artificial intelligence, machine learning, and banking.

    The project has struck key partnerships with notable firms such as CMS, Cluster, Blocksync Ventures, Existential Capital, Web3 Foundation, among others.

    What is Polkadex?

    Polkadex is a non-custodial decentralized platform powering the P2P exchange of tokens used in the DeFi ecosystem. The platform looks forward to building a financial-inclusive future through bridges that connect traditional and decentralized finance spaces.

    The project leverages the power of the Polkadot platform.

    The decentralized exchange is designed to solve liquidity issues plaguing many platforms in the market today. The root of the problem is the use of an orderbook on a decentralized protocol.

    The introduction of automated market-maker (AMM) as the solution led to the birth of Uniswap and other DeFi protocols. Unfortunately, the approach had its own limitations.

    For example, it can only be beneficial when there’s a price difference on exchanges using an orderbook. However, even though AMMs rely on orderbook-based platforms, these platforms don’t need AMMs for them to run.

    To bridge the disconnect, Polkadex brought AMMs and the orderbook together. The project is unique because it uses on-chain bots for market making.

    Key Components of Polkadex

    To bring its vision into focus, the project is built on FIVE core components. They include:

    Fluid Switch Protocol

    The switch changes between the platform’s orderbook and automated market-making AMM. The shift ensures that the decentralized exchange (DEX) has seamlessly-flowing liquidity for traders and liquidity providers.

    By utilizing professionally-designed AMM algorithms, Polkadex provides a fully-supported orderbook, which in turn eradicates impermanent loss and price slippage, which are the biggest ills in the DeFi sector.

    Trading Bots

    Polkadex powers high-frequency trading using trading bots. Notably, these bots handle both institutional and retail customers. They use a carefully manicured architecture that optimizes cancellation fees by managing traders’ entry and exit points depending on the situations in the market. (radiomusical.com)

    The bots are also used to perform on-chain market making. This approach fuses AMMs with an orderbook. How does this work?

    When the bots don’t find a match during a trade, they automatically place the trade in an orderbook adding liquidity to the network.

    When a trade doesn’t find a match in the orderbook, the bots are tasked with finding a suitable pair. Note that trades on Polkadex are only completed using the best price.

    Ethereum Bridge

    With most DeFi networks running on the Ethereum blockchain, Polkadex employs a trustless Ethereum bridge to facilitate the movement of any token to the decentralized exchange. Consequently, it makes it possible to interact with other liquidity providers in a trustless way that allows users to maintain control of their virtual wealth.

    High Performance

    Currently, Polkadex is operating in a testnet capable of reaching a speed of 300 transactions per second (tps). Although this speed is enough in the current landscape, the project targets a throughput of 20,000 tps.

    Polkadot Parachain

    The exchange incorporates the Polkadot Parachain as an additional way to drive liquidity into the DEX. However, the parachain is only used to bring tokens from the Polkadot ecosystem to the Polkadex world.

    During the movement, the security of the tokens is provided through an interoperability layer provided by Polkadot. In addition, the layer assumes a non-custodial approach letting token holders have full control of their digital wealth, effectively eliminating centralized service providers.

    Types of Trades Supported by Polkadex

    The exchange supports market and limit orders. Limit orders enjoy zero trading fees while market orders incur a 0.2 percent trading fee.

    The main reason for the difference in trading fees is that limit orders add liquidity to the platform while market orders remove liquidity. Liquidity providers share the trading fee charged on market takers on a 50-50 ratio with the Polkadex team.

    Since bot-based transactions aren’t viable on a decentralized exchange using smart contracts, Polkadex moves above this hurdle by removing network fees.

    However, this presents another problem where malicious actors can attack the application through a DDoS (Distributed Denial of Service) attack. To guard against such incidents, Polkadex lets the blockchain anticipate such attacks and impose a network charge for specific trades.

    The exchange uses several methods to determine a potential DDoS threat. For instance, if a trade has an invalid price, trading pair, order type, or insufficient balance, then it’s categorized as a likely DDoS attack.

    Two Critical Polkadex Partnerships

    Polkadex X KILT Protocol X Fractal

    Polkadex joined hands with KILT Protocol and Fractal to bring decentralized know-your-customer (KYC) functionalities to the DEX. The partnership saw Fractal, an identification firm, and Polkadex leverage KILT’s infrastructure to manage KYC procedures needed by the exchange.

    The move eases the onboarding process for the DEX’s users. Note that KILT stores customer information. Thus, with the collaboration, new exchange users are directed to the KILT platform, where they set-up a wallet that stores their data in a decentralized way.

    Polkadex X Cryptecon.org

    This partnership involved including Cryptecon’s Matthias Hafner into the DEX’s advisory board. Hafner’s experience in developing economic models helps the exchange effectively merge its orderbook with multiple AMMs.

    Current status of Polkadex

    Polkadex is currently in the testnet phase and has recently released version 2.0. New features in this release include:

    1. ability for the public to use testnet tokens to submit trades; and
    2. ability to watch live trades being executed by the Polkadex engine.

    To participate in the testnet, you will need to download the Polka Chrome extension and create an account. Then you can ask for testnet tokens in their official telegram group.

    Polkadex interface
    Polkadex interface (Image credit: YouTube)

    Roadmap: What’s next for Polkadex?

    The next exciting phase for Polkadex of course would be its mainnet launch. It appears that they intend to be on track for mainnet launch in Q1-Q2 2021.

    As for Polkadex’s token sale, they have indicated on their Telegram group that the community round will take place in March 2021.

    Conclusion

    Polkadex takes a superior approach in fusing AMMs with the orderbook through the inclusion of on-chain market-making bots. Notably, the provision of a user-friendly design, a high throughput, and a non-custodial approach add to the exchange’s uniqueness among other DEXs in the market.

    Additionally, its partnership with KILT and Fractal eases the onboarding process while the Cryptecon collaboration enhances its Fluid Switch component.

    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.

  • TotemFi ($TOTM): Combining prediction markets and DeFi

    TotemFi ($TOTM): Combining prediction markets and DeFi

    TotemFi is a blockchain-based prediction platform that operates on both the Ethereum and BSC networks, interfacing the prediction markets world with the decentralized finance (DeFi) ecosystem.

    In the predictions market, it’s either you agree with the system or leave the space. The ecosystem exists as a closed cave without a way to know whether you’ll get to enjoy the rewards even if you make a correct prediction. Blockchain technology came to the forefront to offer multiple solutions to the problems of traditional markets, and the predictions market should not be left out. Unfortunately, decentralized projects in the prediction world are yet to solve critical issues such as counterparty risks, accessibility, and bias.

    Fortunately, TotemFi is among the few reliable blockchain-based prediction platforms that aim to solve significant problems in traditional prediction markets through the use of, for instance, audited smart contracts. Additionally, it guards against cases where an individual’s prediction gets influenced by another. In this guide, we shall take a comprehensive tour of this project.

    Background

    Jolyon Layard leads the team as the CEO. He has a bachelor’s degree in mathematics and economics. Before joining TotemFi, he was a corporate tax associate at Grant Thornton LLP, CFO at Happy Space UK, and worked at One Young World in different capacities.

    Other key members include Harry Horsfall (CMO), Henry (CBO), and Dan (PR & Community). Note that the team members’ backgrounds cut across various industries such as cryptocurrency, brand management, and communications.

    DuckDao incubates the project in collaboration with Trustology, Ferrum Network, BlockPass, Certik, Lauchpool, among others. Its list of strategic partners includes Bluenode Capital, Alphabit, MoonWhale, and Nabais Capital.

    What Is TotemFi?

    TotemFi is a blockchain-based prediction platform operating on both the Ethereum network and Binance Smart Chain (BSC). Notably, the protocol interfaces the prediction markets world with the decentralized finance (DeFi) ecosystem. TotemFi offers solutions to five major ills in the prediction markets world.

    1. Financial risk – The platform guarantees that stakers will receive their incentives. As such, there is no way a staker will lose their input in the protocol.
    2. Incentivization – The conventional prediction market fails to form a clear incentivization route for individual and group participants. TotemFi breaks this hurdle by rewarding both parties for logical predictions.
    3. Accessibility – TotemFi uses decentralized applications (Dapps) to reduce and hopefully eradicate friction during the prediction process. It does this using a professional but easy-to-use user interface. The protocol take’s it a level higher by not penalizing inaccurate projections.
    4. Echoed influence – This happens when the market is influenced by factors such as partial media highlights and politics. The effect is largely felt on centralized prediction networks. To counter the impact, the project employs decentralization. Consequently, it distributes viewpoints and media sources.
    5. Counterparty risk – Verified and audited staking smart contracts help in building a trustless prediction platform. In return, it boosts user confidence and ensures that participants maintain ownership and control of their stake.

    How does TotemFi Work?

    The protocol works by interacting with various critical sections. Some of the areas include staking pools, prediction ranges, as well as results and tie breakers. (brownshvac.net)

    Staking Pools

    TotemFi staking pools provide a safe place for users to deposit their coins while waiting for the prediction of the price of cryptocurrencies like Bitcoin. These pools have varying maturity durations between 15 and 60 days. However, a pool only takes to the skies if it either reaches the maximum time limit or the pool’s allocation becomes full.

    Furthermore, the maturity date marks the end of the prediction date. For instance, a pool with a maturity length of sixty days means participants must predict the price of Bitcoin (BTC) in the next two months.

    Notably, TotemFi uses a single data source such as an oracle to check the prices of the assets, which enhances consistency and trust.

    TotemFi automatically births another pool with similar specifications to provide timeliness once a pool hits its allocation threshold.

    Prediction Range

    The range determines how far a participant can go with their price forecast. The number of the protocol’s native tokens, TOTM, held by a participant determines their projection range. More tokens mean a higher range and vice versa.

    However, TotemFi’s step function determines the range. The function gives the correlation between the TOTM stake size, the step size, and the range increase.

    Results and Tie Breaker

    In a prediction, the possibilities of a tie are very high. In case of a tie, the first person to provide the correct prediction becomes the winner. Also, this process applies in case a tie situation involves more than one participant. In such a scenario, users ranking is done in a chronological format.

    Staking Rewards and Price Pools

    Stakers receive guaranteed incentives. However, the rewards depend on the pool’s maturity time, staked amount, and staking time. Assuming that a staker lets their stake run peacefully for their entire pool maturity time, they’re likely to receive a tentative annual percentage rate (APR) of 60%, 65%, and 75% for pools with a maturity time of 15, 30, and 60 days, respectively.

    On the other hand, the prize pool contains both BTC and TOTM tokens. For example, in the case of a correct prediction, the winner takes home 0.03375 BTC and 1,687 TOTM coins, while the third in the winning queue gets 0.0110 BTC and 495 TOTM tokens.

    TotemFi Tokens (TOTM)

    TOTM has a fixed supply of 10 million tokens. This entire amount was excavated during the token generation event (TGE).

    The tokens go to advisors (8.5%), community development (10%), team (15%), seed (4.5%), and public sale (4.5%). Additionally, staking rewards get 16.5%, while strategic development, liquidity pool, and private sale get 15%, 6%, and 20%, respectively.

    Notably, the allocated coins are locked for varying months. For example, TOTM issued to staking have a lockup period of 48 months, while those meant for private sale have a five-month lockup period.

    Apart from rewarding predictions, TotemFi’s native asset acts as a governance token. Therefore, its holders are capable of taking part in critical decisions such as pool mechanics.

    Conclusion

    TotemFi is set to revolutionize an industry that is relatively underserved. Fortunately, a decentralized approach allows participants to blame themselves for not getting the forecasts right. Additionally, its use of blockchain increases participants’ confidence.

    Moreover, guaranteed incentives for stakers, as well as not penalizing incorrect predictions, allows everyone to participate, opening the door to broader adoption. Most importantly, the experience of the TotemFi core team, incubators, and advisors sets the project apart from other blockchain-based prediction networks targeting.

    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.