To really be an experienced trader, research is crucial. However, information and resources on cryptocurrency can be as decentralized as the coin or token itself.
Therefore, we have prepared in-depth guides based on specific cryptocurrencies and tokens, from information about its technologies, to its utilities and innovations. We provide a one stop location for all your burning questions such as “What is this coin used for?” and “What makes this token so special?” Having gone through numerous project whitepapers and websites, we find that many use a lot of technical jargon and hence make it difficult to understand for the average user. Therefore, we strive to make our guides simplified for everyday readers who do not have the technical knowledge that the projects do, so that they can use Boxmining.com as a trusted resource for cryptocurrency users to make informed and well-researched decisions.
On October 1-2, 2025, Marina Bay Sands in Singapore will transform into a five-floor “pop-up city” for TOKEN2049, the world’s largest Web3 event, drawing a record-breaking 25,000 attendees from over 160 countries. With 7,000+ companies, 500+ exhibitors, and 70% of attendees being C-suite executives, this year’s edition underscores the crypto industry’s shift from speculative frenzy to a mature, infrastructure-driven ecosystem. Amidst ziplines, pickleball courts, and live DJ sets, TOKEN2049 Singapore 2025 is not just a conference—it’s a global stage for innovation, deal-making, and cultural celebration, redefining how the Web3 community connects and builds the future.
The crypto industry has come a long way since the ICO mania of 2017, and TOKEN2049 Singapore 2025 reflects this evolution with a focus on institutional adoption, technological scalability, and real-world applications. High-profile speakers like Eric Trump and Donald Trump Jr. (World Liberty Financial), Vlad Tenev (Robinhood), Paolo Ardoino (Tether), and Balaji Srinivasan (The Network State) will dive into topics shaping the industry’s next phase: institutional DeFi, Layer 2 solutions, tokenized real-world assets (RWAs), Bitcoin ETFs, and the convergence of AI and blockchain. These discussions signal a sector moving beyond retail speculation to one where enterprises, regulators, and innovators align for global impact.
The event’s programming highlights this maturation. Panels and keynotes will explore how regulatory clarity in regions like Singapore is fostering institutional trust, while technological advancements—such as Ethereum’s scaling solutions and Bitcoin’s Taproot upgrade—are enabling more efficient, secure networks. Over 500 exhibitors, including title sponsors like OKX, Coinbase, and TRON, will showcase tools and platforms that bridge traditional finance with decentralized systems, underscoring the industry’s growing legitimacy. As Alex Fiskum, co-founder of TOKEN2049, notes, “This will be our most ambitious edition yet, with the global crypto community converging in Singapore to shape the digital asset industry.”
Innovation in Action: The Origins Hackathon and NEXUS Startup Competition
At the heart of TOKEN2049’s innovation push are two marquee initiatives: the TOKEN2049 Origins Hackathon and the NEXUS startup competition. The hackathon, debuting in 2025, is a 36-hour sprint uniting 160 of the world’s top developers to build next-generation Web3 solutions. Participants will collaborate under the guidance of mentors, pitching their projects for prizes, funding, and global recognition before 25,000 attendees, media, and industry leaders. This high-energy environment fosters rapid ideation, turning concepts into working prototypes that could redefine blockchain applications.
The NEXUS startup competition, now in its second year and recognized as the world’s largest Web3 startup contest, amplifies this spirit of entrepreneurship. In collaboration with top-tier venture capital firms like Dragonfly, Pantera, and Maelstrom, NEXUS offers startups a global stage to pitch groundbreaking projects. Following the success of 2024’s winner, Battlebound, the 2025 edition promises even greater visibility, with 10 finalists vying for equity-free prizes and investor attention. These initiatives highlight TOKEN2049’s role as a launchpad for the next wave of Web3 unicorns, bridging visionary founders with the capital and networks needed to scale.
A Festival of Networking and Culture
Beyond its focus on innovation, TOKEN2049 Singapore 2025 redefines the conference experience with a festival-like atmosphere that blends business with celebration. Spanning all five floors of Marina Bay Sands, the event features ziplines, rock-climbing walls, pickleball courts, cold plunges, breathwork sessions, and live performances, creating an immersive environment that energizes attendees. High-quality, organic meals and on-site wellness services like massages and barbers elevate the experience, emphasizing both professional and personal growth.
This vibrant setting is a networking powerhouse. With over 1,000 side events during TOKEN2049 Week (Sept 29–Oct 5), including meetups, workshops, and themed dinners, attendees can forge connections across borders and industries. The week culminates in the unmissable Grand Prix Weekend Party at the Marina Bay Sands SkyPark, where the global crypto community mingles against the backdrop of Singapore’s Formula 1 festivities. As one X post described it, “TOKEN2049 is where deals are made, ideas are born, and the future of Web3 takes shape.” The AI-driven Networking 3.0 app further enhances these connections, matching founders, investors, and developers for meaningful collaborations.
Singapore: The Global Crypto Hub
TOKEN2049’s scale and ambition cement Singapore’s status as Asia’s crypto epicenter. The city’s regulatory clarity, technological infrastructure, and global connectivity make it the ideal host for an event that draws decision-makers from 160+ countries. As the crypto industry matures, Singapore’s role as a bridge between East and West positions it to shape the global Web3 narrative. The event’s 25,000 attendees—representing founders, investors, developers, and policymakers—reflect this diversity, creating a melting pot of ideas that will drive the industry forward.
TOKEN2049 Singapore 2025 is more than an event; it’s a snapshot of an industry at a turning point. By spotlighting institutional adoption, fostering innovation through the Origins Hackathon and NEXUS competition, and creating a festival-like networking hub, it captures the crypto sector’s evolution into a mature, impactful ecosystem. As attendees zip-line across Marina Bay Sands, pitch groundbreaking ideas, or close deals over gourmet meals, they’re not just participating in a conference—they’re shaping the future of Web3. For those looking to join, tickets are selling fast, with prices rising to USD $599 as demand soars.
Ethereum has changed a lot since the Ethereum 2.0 upgrade began. Now fully running on Proof-of-Stake, the network is faster, cheaper, and uses way less energy. With sharding and other upgrades complete, Ethereum can handle over 100,000 transactions per second, making it a top choice for apps, games, and finance tools.
This article explains how Ethereum got here, what each upgrade did, and why it matters. Whether you’re new to crypto or already staking ETH, this guide will help you understand Ethereum’s journey and what’s next.
What is Ethereum 2.0?
Ethereum 2.0—now simply called Ethereum—was a major upgrade that transformed the network from Proof-of-Work to Proof-of-Stake. This shift made Ethereum far more energy-efficient and scalable. The upgrade included several key milestones:
The Merge (2022): Combined the original Ethereum mainnet with the Beacon Chain, switching the consensus mechanism to Proof-of-Stake.
Sharding (Completed 2024): Split the network into multiple shards to boost speed and reduce costs. Ethereum now handles over 100,000 transactions per second.
Staking: Users can earn passive income by staking ETH to help secure the network. As of mid-2025, staking yields average around 3.7% APR. Check out our staking guide HERE
These upgrades have made Ethereum faster, cheaper, and more accessible. Validators no longer need expensive hardware, and anyone can run a node—even from a laptop or phone. Ethereum now powers a massive ecosystem of DeFi apps, NFTs, and Web3 platforms, and continues to lead innovation in blockchain technology.
This guide will cover the timeline for the upgrade to ETH2.0 and the solutions proposed.
Ethereum 2.0 Key features and what you need to know video
The 3 Phases of Ethereum 2.0
Ethereum 2.0 will be launched in 3 phases:
Phase 0- Beacon Chain – Completed in 2020
Phase 1- The Merge – Completed September 2022
Phase 2- Sharding
Ethereum 2.0—now simply Ethereum—was rolled out in three major phases, each transforming the network’s scalability, security, and sustainability:
Phase 0: Beacon Chain (Completed December 2020)
This phase introduced the Proof-of-Stake consensus mechanism via the Beacon Chain. It ran in parallel with the original Ethereum chain and laid the foundation for future upgrades by coordinating validators and generating randomness for staking.
Phase 1: The Merge (Completed September 2022)
The Merge combined the Beacon Chain with Ethereum’s mainnet, officially transitioning the network from Proof-of-Work to Proof-of-Stake. This reduced Ethereum’s energy consumption by over 99.9% and eliminated the need for mining.
Phase 2: Sharding (Completed Q4 2024)
Sharding split Ethereum’s data processing across multiple chains (“shards”), dramatically increasing throughput and lowering costs. Combined with Layer 2 rollups, Ethereum now handles over 100,000 transactions per second. Validators can run nodes on lightweight devices, boosting decentralization and accessibility.
Main features of sharding:
Ethereum’s sharding implementation is now complete, delivering major improvements in scalability and decentralization:
Lightweight Node Requirements: Validators no longer need to store the full blockchain. Thanks to data sampling and blob transactions, even mobile devices can run nodes.
Greater Security via Decentralization: With over a million active validators, Ethereum is more resilient and censorship-resistant than ever.
High Throughput: Combined with Layer 2 rollups, sharding enables over 100,000 transactions per second, significantly reducing gas fees.
Efficient Data Distribution: Ethereum uses 64 shards to spread data across the network, minimizing congestion and improving performance.
Optimized Rollup Integration: Rollups now directly access shard data, making them faster and cheaper, and enabling new use cases like real-time data feeds and decentralized AI.
What are layer 2 rollups?
Layer 2 rollups are scaling solutions that execute transactions off-chain and post compressed data back to Ethereum, reducing congestion and lowering fees. As of 2025, rollups have matured into the backbone of Ethereum’s scalability strategy.
Optimistic and ZK Rollups: Both types are widely adopted. ZK rollups, in particular, have gained traction for their speed and security, powering applications in DeFi, gaming, and identity verification.
Blob Transactions and Proto-Danksharding: Introduced in the Cancun-Deneb upgrade, blob-carrying transactions allow rollups to post large data payloads efficiently. This has drastically reduced costs and improved throughput.
Rollup-Centric Ethereum: Ethereum now functions as a data availability and settlement layer, while most user activity occurs on rollups. This architecture supports over 100,000 transactions per second.
Interoperability and Composability: Rollups are increasingly interoperable, allowing seamless asset transfers and smart contract interactions across different Layer 2s.
Decentralized Applications at Scale: From social media platforms to real-time multiplayer games, rollups have enabled dApps that were previously impossible on Layer 1 due to cost and latency.
Ethereum 2.0—now simply referred to as Ethereum—has completed its major transition phases and entered a new era of scalability and decentralization. Here’s a snapshot of its current state:
Proof-of-Stake Fully Operational: Since the Merge in September 2022, Ethereum has run entirely on Proof-of-Stake. Validator participation remains high, with over 1 million active validators and a network participation rate consistently above 99%.
Sharding Completed: As of late 2024, Ethereum successfully launched 64 shards, dramatically improving data throughput and enabling lightweight node operation. This has made it possible to run validator nodes on consumer-grade devices.
Rollup-Centric Architecture: Most user activity now occurs on Layer 2 rollups, which post data back to Ethereum using blob transactions introduced in the Cancun-Deneb upgrade. This architecture supports over 100,000 transactions per second.
Post-Merge Upgrades: Ethereum has progressed through the “Surge” (scaling via sharding), and is actively implementing the “Scourge,” “Verge,” “Purge,” and “Splurge”—a series of upgrades focused on censorship resistance, stateless clients, historical data cleanup, and protocol refinement.
Staking and Withdrawals: Withdrawals have been enabled since the Shanghai (Shapella) upgrade in April 2023. Staking remains popular, with yields averaging 3.5–5% annually depending on network conditions.
EVM Improvements: The Ethereum Virtual Machine has seen multiple enhancements, including support for Verkle trees and EOF (EVM Object Format), improving efficiency and developer experience.
How to set up an Ethereum Validator Node
Check out our LIVE demonstration on how to set up an Ethereum 2.0 Node
How to set up an Ethereum 2.0 node
I’ve also set up something called an Ethereum validator node for Ethereum 2.0. These nodes will be how Ethereum would run and how transactions are going to be validated in the future. So we’re going to explore all of these concepts as well in this guide.
Currently you can test out Ethereum staking on the ETH 2.0 Testnet set up by Prysmatic labs (aka Topaz). Since it’s a test, Ethereum will not be used, instead, it will use Göerli ETH, a free testnet version of ETH.
Time needed: 2 days
How to set up an Ethereum (ETH) Validator Node This guide has been adapted from the Prysm ‘Topaz’ Testnet Guide
Get some Göerli ETH
Göerli ETH is free to obtain and will be used to stake the 32 ETH required for the node. The easiest way to obtain the Göerli ETH is to use the social faucet.
Spin up a Server
You’ll need to be familiar with running a VPS server (you can use AWS, Hetzner or Linode). Recommended specs include an Intel Core i7 processor with 100 GB of SSD storage
Start your Beacon Node
Easiest way we found to do this is via Docker docker run -it -v $HOME/prysm/beacon:/data -p 4000:4000 -p 13000:13000 \ gcr.io/prysmaticlabs/prysm/beacon-chain:latest \ –datadir=/data
Wait (roughly 2 days) to get activated, and then you’re good to go!
Staking Ethereum on a validator node
Ethereum now operates fully under Proof-of-Stake, and staking remains a core mechanism for securing the network and earning passive income.
Stake Requirement: 32 ETH is required to activate a validator. This stake acts as collateral to ensure honest behavior and network uptime.
Rewards: Annual staking yields range from 3.5% to 5%, depending on network conditions and validator performance. Rewards are paid in ETH and accumulate over time.
Withdrawals: Since the Shanghai (Shapella) upgrade in April 2023, stakers can withdraw both principal and rewards. Withdrawals are processed in queue and typically take hours to days.
Risks: Validators face penalties for downtime or incorrect attestations. Slashing is rare but possible in cases of malicious behavior or prolonged inactivity.
Network Health: As of August 2025, over 1 million validators are active, and more than 30 million ETH is staked. Participation rates consistently exceed 99%, ensuring robust security.
Liquid Staking Options: For users with less than 32 ETH or those seeking flexibility, platforms like Lido, Rocket Pool, and Coinbase offer tokenized staking (e.g. stETH, rETH) with instant liquidity and pooled validation.
The Ethereum staking deposit contract was officially released on November 4, 2020, marking the beginning of Phase 0 and enabling users to stake ETH and become validators. While the original launch required careful navigation through the Ethereum Launchpad, staking has since become more streamlined and widely accessible.
As of 2025:
Deposit Contract Still Active: The original deposit contract remains the gateway for validator activation. Users must still follow the Launchpad process to generate keys and deposit 32 ETH securely.
Withdrawals Enabled: Since the Shanghai (Shapella) upgrade in April 2023, stakers can withdraw both rewards and principal. This has made staking more flexible and liquid.
Validator Growth: Over 1 million validators are now active, with more than 30 million ETH staked. Participation rates consistently exceed 99%, ensuring strong network security.
Liquid Staking Alternatives: Platforms like Lido, Rocket Pool, and Coinbase offer pooled staking and tokenized derivatives (e.g., stETH, rETH), allowing users to stake without the full 32 ETH requirement.
Security Reminder: Sending ETH directly to the deposit contract without using the Launchpad will still result in a failed transaction. Proper setup remains essential to avoid loss of funds or penalties.
Ethereum Staking Update: Yields?
Ethereum staking yields have stabilized following the full rollout of Proof-of-Stake and the Shanghai upgrade, which enabled withdrawals in April 2023.
Risk Factors: While slashing remains rare, validators must maintain uptime and correct behavior to avoid penalties. Liquid staking platforms typically abstract these risks for users.
Current APR: As of August 2025, the average annual percentage return (APR) for staking ETH ranges between 3.5% and 4.2%, depending on validator performance and network activity.
Yield Trends: Early stakers enjoyed higher returns (up to 16% pre-Merge), but yields have normalized as validator participation increased. Over 30 million ETH is currently staked, with more than 1 million active validators.
Liquid Staking: Tokenized staking options like stETH (Lido), rETH (Rocket Pool), and cbETH (Coinbase) offer competitive yields and instant liquidity, making them popular among users with less than 32 ETH.
Rewards Distribution: Staking rewards are paid in ETH and accumulate continuously. Validators earn from proposing blocks, attesting to others, and participating in sync committees.
You can check the current APR, total ETH staked, and number of validators here.
Progress of Ethereum 2.0 so far
Ethereum 2.0—now simply Ethereum—has completed its major upgrade phases and transitioned into a scalable, energy-efficient, and decentralized network. Here’s a summary of its progress:
Beacon Chain (Phase 0): Launched in December 2020, introducing Proof-of-Stake and laying the foundation for future upgrades.
The Merge (Phase 1): Completed in September 2022, merging the Beacon Chain with Ethereum’s mainnet and eliminating Proof-of-Work. This reduced energy consumption by over 99.9%.
Sharding (Phase 2): Rolled out in late 2024, Ethereum now operates with 64 shards, enabling lightweight node operation and dramatically increasing data throughput.
Post-Merge Upgrades: Ethereum has entered the “Surge,” “Scourge,” “Verge,” “Purge,” and “Splurge” phases—targeting scalability, censorship resistance, stateless clients, historical data cleanup, and protocol refinement.
Network Metrics: As of August 2025, over 30 million ETH is staked across more than 1 million validators. Participation rates remain above 99%, ensuring strong consensus and security.
Rollup-Centric Architecture: Most user activity now occurs on Layer 2 rollups, which leverage blob transactions for efficient data posting. Ethereum supports over 100,000 transactions per second.
What’s next in the development of Ethereum 2.0?
With the Merge and Sharding now complete, Ethereum has entered the post-2.0 era, focusing on refinement, decentralization, and long-term sustainability.
Ethereum 2.0 setup and architecture
The roadmap outlined by Vitalik Buterin continues through five major upgrade phases:
The Surge: Completed in late 2024, this phase introduced sharding and significantly boosted scalability. Ethereum now supports over 100,000 transactions per second, primarily through rollups.
The Scourge: Currently underway, this phase addresses MEV (Maximal Extractable Value) risks and aims to ensure fair, neutral transaction inclusion. Protocol-level changes are being tested to reduce centralization in block production.
The Verge: Focused on stateless clients and Verkle trees, this phase will allow validators to operate without storing full blockchain data. It’s expected to launch in stages through 2026, improving decentralization and node efficiency.
The Purge: Aimed at reducing historical data bloat, this phase will simplify node operation by removing unnecessary legacy data. It will also streamline the Ethereum protocol for developers.
The Splurge: A collection of smaller upgrades and optimizations, including EVM improvements, fee market refinements, and UX enhancements. These updates are ongoing and released incrementally.
Ethereum 2.0 is no longer a future milestone—it’s now fully integrated into the Ethereum protocol. The network has transitioned from Proof-of-Work to Proof-of-Stake, implemented sharding, and embraced a rollup-centric architecture. Here’s what has unfolded since the launch:
Scalability Achieved: Ethereum now supports over 100,000 transactions per second through a combination of sharding and Layer 2 rollups. This has eliminated congestion and dramatically reduced gas fees.
Energy Efficiency: The network consumes over 99.9% less energy than it did under Proof-of-Work, making Ethereum one of the most sustainable major blockchains.
Validator Participation: Over 1 million validators are active, securing the network with more than 30 million ETH staked. Lightweight node requirements have enabled broader participation.
Rollup Dominance: Most user activity now occurs on Layer 2 platforms like Arbitrum, Optimism, and zkSync. Ethereum Layer 1 serves primarily as a settlement and data availability layer.
Reduced Competition from “Ethereum Killers”: With its scalability and efficiency challenges resolved, Ethereum has maintained its dominance in DeFi, NFTs, and Web3 infrastructure. Competing chains have shifted focus to niche use cases or interoperability.
Ongoing Upgrades: Ethereum is now progressing through the “Scourge,” “Verge,” “Purge,” and “Splurge” phases, which aim to improve censorship resistance, decentralization, protocol simplicity, and developer experience.
Eventually, the number of transactions per second will drastically increase to over 100,000 tps. So, the question would be, what would happen to the competition i.e. the “Ethereum killers”? Find out more in our article: Ethereum Merge is coming, is this the end of Ethereum killers?
Frequently Asked Questions (FAQ)
Will Ethereum 2.0 replace Ethereum?
No. Ethereum 2.0 was a series of upgrades that merged into the existing Ethereum network. The term is now outdated—Ethereum runs on Proof-of-Stake and sharding, but it’s still the same ETH.
Is there a new ETH coin?
No new coin was created. ETH remains the native currency. Beware of scams offering “ETH2” tokens—they don’t exist.
Can I withdraw staked ETH?
Yes. Since the Shanghai (Shapella) upgrade in April 2023, both staking rewards and principal can be withdrawn.
What’s the current staking yield?
As of August 2025, staking yields range from 3.5% to 4.2% annually, depending on network activity and validator performance.
Do I need 32 ETH to stake?
Not necessarily. While 32 ETH is required to run a validator node, liquid staking platforms like Lido, Rocket Pool, and Coinbase allow staking with smaller amounts.
Is staking risky?
Staking is generally safe, but validators can be penalized for downtime or malicious behavior. Liquid staking abstracts most of these risks for casual users.
Will Ethereum gas fees be lower now?
Yes. With sharding and rollups fully deployed, Ethereum can process over 100,000 transactions per second, significantly reducing gas fees.
Can I run a validator on a regular device?
Yes. Thanks to sharding and protocol optimizations, validators can now run on laptops or even mobile devices.
What happened to Ethereum mining?
Mining ended with the Merge in September 2022. Ethereum now uses Proof-of-Stake, and mining is no longer part of the protocol.
Will exchanges or dApps be affected?
No major disruptions occurred. Most exchanges and dApps transitioned smoothly during the upgrades.
Is ETH staking taxable?
Tax implications vary by country. In general, staking rewards are considered income and may be taxable when received.
What’s next for Ethereum?
Ethereum is progressing through the Verge, Purge, Scourge, and Splurge phases—focused on decentralization, data cleanup, MEV mitigation, and protocol refinement.
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.
These regulations are not yet enacted. The FSTB says it welcomes written comments from the public on the Legislative Proposals on or before 31st January 2021.
Current state of regulation of VASPs and Virtual Assets (“VAs”) in Hong Kong
Current regulatory requirements for VASPs and VAs in Hong Kong
The FTSB notes that VAs are not considered as legal tender and are not generally accepted as a means of payment in Hong Kong. However, they are aware that there are some VA trading activities operating locally. In light of this, Hong Kong’s Securities and Futures Commission (“SFC”) issued a position paper in November 2019 (“SFC Position Paper”). The SFC Position Paper outlined some regulatory standards similar to those applicable to licensed securities brokers and automated trading venues, for licensing of VA trading platforms. Notably, this was only an opt-in and voluntary regime and ONLY applied to those platforms which enabled clients to trade VAs with securities feature. Those platforms which solely traded non-securities VAs are not covered.
Hong Kong as a member jurisdiction of the Financial Action Task Force (“FATF”)
The FATF comprises of 39 major worldwide economies and oversees the implementation of the FATF Standards, which are comprised of 40 Recommendations and 11 Immediate Outcomes (“Standards”). Member jurisdictions do mutual evaluations to see if they comply with these Standards which are updated from time to time. One of the more recent additions to the Standards was in February 2019, where jurisdictions were required to subject VASPs to the same range of anti-money laundering (“AML”)/counter-terrorist financing (“CTF”) obligations applicable to financial institutions and designated non-financial businesses and professions.
Hong Kong was subject to a mutual evaluation and a Report on Hong Kong was published in September 2019, where the FATF will specify recommendations on areas for improvement. Hong Kong is scheduled to undergo a regular technical compliance assessment in February 2023 and an effectiveness assessment in June 2024. The Legislative Proposals are specific in that they “…will be expected to have introduced AML/CTF regulation for the VASP…sectors…” So it is quite apparent their intention that the Legislative Proposals will be passed into law in time for June 2024.
The Legislative Proposals specifically notes that other FATF member economies have either set up or are setting up their own regulatory and supervisory regimes for VASPs.
Proposals put forward in the Consultation Paper
Specifically, the Legislative Proposals suggest amending the current Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615 of the Laws of Hong Kong) (“AMLO”). Here’s A summary of the Legislative Proposals:
Expanding the scope of the AMLO to cover VASPs (currently VASPs are not included).
Implement a licensing regime for VASPs where any person intending to conduct the regulated business of a virtual asset trading platform in Hong Kong will be required to apply for a licence from the SFC and also need to meet a “fit and proper test” similar to that required of other financial sectors. Licensed VASPs will then be subject to the AML/CTF requirements under Schedule 2 of the AMLO and “…other regulatory requirements for investor protection purposes”. Schedule 2 of the AMLO basically sets out requirements relating to customer due diligence and record-keeping, and special circumstances. Examples of this include identification checks and to continuously monitor business relationships.
Give the SFC powers to supervise a VASPs’ compliance of the AMLO requirements.
Then the question is, what are VASPs or VAs?
Scope of the Legislative Proposals
The Legislative Proposals specifically covers VASPs and VAs, so it is important to know their definition. This is set out in the Legislative Proposals.
Virtual Asset Services Providers
The Legislative Proposals takes the definition of VASPs from that of the FATF and is defined as, “…a VASP is a person who, as a business, engages in specified activities involving VAs. The specified activities cover (i) exchange between VAs and fiat currencies; (ii) exchange between one or more forms of VAs; (iii) transfer of VAs; (iv) safekeeping and/or administration of VAs or instruments enabling control over VAs; and (v) participation in and provision of financial services related to an issuer’s offer and/or sale of a VA.”
Virtual asset exchanges
The Legislative Proposals proposes to designate the business of operating a VA exchange as a “regulated VA activity” under the AMLO and require a VASP licence from the SFC and subject to passing the “fit and proper” person test and other regulatory requirements.
Specifically a VA exchange is proposed to be defined as “…any trading platform which is operated for the purpose of allowing an offer or invitation to be made to buy or sell any VA in exchange for any money or any VA…”
The Legislative Proposals, however mention that “peer-to-peer trading platforms” will not be considered as a VA exchange and thus not subject to the licensing requirements. According to the Legislative Proposals, peer-to-peer trading platforms are platforms that only provide a forum where buyers and sellers post their bids and offers, with or without automatic matching mechanisms, for the parties themselves to trade at an outside venue. However, the actual transaction must be conducted outside the platform, and the platform is not involved in the underlying transaction. If for example the platform comes into possession of any money or any VA at any point in time, they would still be considered a “VA exchange”.
VA activities outside of exchanges (OTC desks etc): Are they covered?
However there are other businesses dealing with VAs that aren’t exchanges. For example VA payment systems, VA custodian services and over the counter trading and crypto ATMs (Genesis Block Hong Kong comes to mind).
According to the Legislative Proposals, they already have interface with financial institutions (e.g. when converting into fiat). This means that their money flow is already traceable for AML/CTF purposes and are already subject to the statutory obligations of reporting suspicious transactions etc. Hence the FSTB says they will nevertheless keep in mind the evolving landscape in relation to these activities and the licensing regime will be kept flexible so it may be expanded to cover other VA activities if the need arises in the future.
Virtual Assets
The FSTB also intends to adopt the definition of a VA as provided by the FATF but in more specific terms. The proposed definition is that a VA is, “…a digital representation of value that is expressed as a unit of account or a store of economic value; functions (or is intended to function) as a medium of exchange accepted by the public as payment for goods or services or for the discharge of a debt, or for investment purposes; and can be transferred, stored or traded electronically.”
What is not covered under the scope of a VA would be central bank digital currencies (China’s DCEP comes to mind), financial assets (e.g. securities) which are already regulated by the SFO, and closed-loop limited purpose items that are non-transferable, non-exchangeable and non-fungible (e.g. gaming coins).
However stablecoins (i.e. VAs purportedly backed by some form of asset to stabilise their value) are covered by the definition of VAs.
Regulatory requirements: are retail investors banned from trading cryptocurrencies?
If the VA business falls under the definition of a VASP and are not other VA activities which are excluded, they will be subject to the licensing regime. With reference to the existing opt-in regime, the Legislative Proposals proposes to empower the SFC to impose licensing conditions on licensed VASPs and regulatory requirements. One such requirement that is particularly concerning to cryptocurrency enthusiasts is the requirement that VASPs should only offer services to “professional investors”. However the Legislative Proposals suggest that this restriction should only be required at the “initial stage” and note that the SFC will continue to monitor the market and reconsider this position as the market matures in the future.
Hong Kong’s crypto community reacts to the Legislative Proposals
Sam Bankman-Fried, CEO of FTX Exchange gave his thoughts on the Legislative Proposals. He noted that it is still in the consultation stages and that whether or not an exchange “is” in Hong Kong so as to be covered by the Legislative Proposals are subtle and non-obvious.
Bitmex of course is also in a bit of hot water, as civil and criminal proceedings have been respectively issued by the US DOJ and CFTC against BitMEX, its CEO Arthur Hayes, together with other key personnel and affiliates. Their CTO was also arrested in the US.
Meanwhile, Leo Weese, Co-founder at The Bitcoin Association of Hong Kong gives his take in a blog post. He notes that whilst he is not opposed to regulation per se, the Legislative Proposals “…a massive overreach of the SFC’s mandate and a de facto ban of Bitcoin in Hong Kong”. In particular, Weese criticises the Legislative Proposals as confusing and unclear, noting also that it is the most restrictive proposal compared to any other FATF member economies. However, it can also be considered that it is merely the SFC’s initiative to implement FATF decisions rather a conspiracy to ban Bitcoin. Finally, Weese expects significant push back against the Legislative Proposals given previous resistance against previous initiatives aimed at money laundering.
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.
Cryptocurrency Exchanges are facing additional regulation and scrutiny around the world. Two key exchanges – OKEX and Huobi are under regulatory scrutiny in China. One of the reasons for the scrutiny is that both these exchanges had a huge footprint in China prior to the 2017 Exchange ban. To find out about top cryptocurrency exchanges, check out our Exchange Tier List. Here are the major changes to the exchange scene in November 2020.
OKEx Exchange withdraws suspended
It has been almost a month since Okex Exchange suspended all withdrawals from the platform. This was due to one of their private key holders (Star Xu) being detained for investigation by a “public security bureau”. OKEx has always claimed that Xu is not detained but only actively cooperating with the relevant authorities for something unrelated to the Exchange back in 2019.
No withdrawal has happened since 16 October 2020; in OKEx’s last Twitter post, dated 9 November 2020, they claim that the function is not yet active but funds are safe and unaffected.
Withdrawals reopened!
After more than a month since their suspension announcement, Okex exchange has finally reopened unrestricted withdrawals on November 27. In addition, there will be rewards for active users. Read all the details in our developing article.
KuCoin recovers around 84% of funds in hack
As covered in our previous Newsletter, KuCoin had confirmed on 26th September 2020 that they had been hacked, resulting in around USD $236m worth of funds being lost.
On 11th November 2020, CEO and Co-founder Johnny Lyu confirmed that around 84% of affected assets have been recovered. Several means were utilised to do this, for example on-chain tracking, contract upgrade and through the judicial system.
Currently, 176 of their listed tokens have resumed full services, and it is expected that the remaining listed tokens will all be re-opened before 22nd November 2020.
(1/3) Latest updates about #KuCoin Security Incident: So far, 84% of the affected assets have been recovered via approaches like on-chain tracking, contract upgrade and judicial recovery. As asked by the law enforcements, we will publish all the details once the case is closed.
Update from CEO and Co-founder Johnny Lyu on the KuCoin hack situation
Huobi Rumors go wild
On 2 November 2020 a few big transactions worth hundreds of millions into Huobi Exchange have been spotted; although this could be routine for a big Exchange like this, users were worried since the issues with OKEx exchange were still ongoing.
There were also rumours that, similar to OKEx, key executives of Huobi were detained for investigations.
This created an escalated FUD that ended up with a massive drop in value for $HT (Huobi Token), as well as worried users quickly withdrawing their cryptocurrencies from the Exchange.
Huobi official account subsequently tweeted denying all rumours and classifying them as false.
For now, everything seems to be back to normal and no more news have emerged since.
A few weeks after Binance Jersey announced that the Exchange, launched in January 2019, will be fully closed by 30th November 2020 (no explanation was given but it’s presumed that it wasn’t necessary anymore, after deposits in EUR and GBP have been enabled directly on Binance.com), Binance Uganda will cease to exist as well.
Binance Uganda was launched in June 2018 and has been the first fiat-to-crypto Binance platform, even though it had been stated more than once that it was a separate entity capable of independent decisions.
An explanation was provided by the Chief Executive Officer (CEO) Changpeng Zhao:
“All the features that Binance Uganda provides [are] now covered by Binance.com together with our fiat channel partners. There’s a very minimal number of users on there, so it doesn’t make sense for us to maintain two platforms”.
The process will consist of three different phases: Closure of Deposits and New Registrations; Closure of all Trading Services, and final Hard Shutdown on the 28 November 2020.
Users are strongly recommended to transfer their funds out of the Exchange before 00:00 UTC on 28/11/2020.
Is Binance blocking US-based users?
Reports are emerging that Binance has started to block users based in the US from accessing the Exchange. According to The Block, emails were circulated to US-based users who were told to withdraw their funds within 90 days.
This is in any event in line with their announcement back in September 2019 that they will no longer serve customers from the US. They are also likely doing this now considering the ongoing legal actions against BitMEX and its key personnel.
Binance.com is now giving a 14 days notice to US customers
As a consequence to what we reported a few weeks ago, it appears that some US customers who are still using the “.com” version of the exchange are receiving a 14 days notice letter. In the email, as they reported, Binance is informing that due to their “periodic sweeps”, US residents are being asked to withdraw all their funds within 14 days or their funds will be blocked.
It is not clear whether the identification process is only based on KYCs or on IP addresses as well; in the first case, it could be possible that US customers who skip the KYC process accepting lower deposits/withdrawals limits could still use the platform.
Binance.com has been trying to remove its US customers for a while as the exchange doesn’t have any regulatory standing in America. US customers can use Binance.US, an exchange with far less pairs that is therefore not as attractive to traders as the classic “.com” version.
Coinbase Pro is disabling Margin Trading
In a blog post on Nov 24, the Chief Legal Officer Paul Grewal announced that customers wouldn’t have been able to place margin trades after November 25, 2PM PT time. The existing positions will remain effective until the last one will have expired; at that moment the product will go offline.
The decision comes as a consequence to the finalized “Interpretive guidance on actual delivery of Digital Assets” by the CFTC (Commodity Futures Trading Commission) in March. You can read more here. In the letter we can read:
“We believe clear, common sense regulations for margin lending products are needed to protect and provide peace of mind to U.S customers. We look forward to working closely with regulators to achieve this goal”.
Australian Exchange BTC Markets exposed users’ data
On December 1st during a routine marketing round of emails to their users, Australian exchange BTC Markets, one of the most famous in the continent, accidentally exposed their users’ data. Names and emails where all together displayed in the “to” field and sent in batches of 1000 at a time, exposing each personal user’s data to 99 other email addresses.
Caroline Bowler, the CEO, immediately confirmed the data exposure adding that nothing more than names and emails were exposed, while funds and passwords remained safe. Nonetheless, we know this type of exposure can (and probably will) lead to unwanted campaigns or phishing emails, therefore users should always doublecheck the sender of the emails before clicking anything suspicious.
The exchange is now working on additional measures and has advised their clients to change email passwords and set up 2 factor authentication on their accounts.
Thanks for this Chloe. We are working on additional security measures to bolster what is currently in place. In the meantime, we advise our clients to change their email password; set-up 2FA on their account; and be vigilant to email phishing attacks. https://t.co/0x56Kc2xEv
Centralised cryptocurrency exchanges do have custody of the cryptocurrencies in your account trading wallets. Therefore if anything happens to the exchanges, your funds can be affected!
So don’t keep more funds in exchanges than you need for day to day use or trading! Keep your cryptocurrencies safe and under your OWN custody, ideally in a hardware wallet.
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.
Diem is a decentralized stablecoin powered by the Libra blockchain. Facebook unveiled Libra in 2019 with a vision of being a stablecoin backed by multiple government-issued currencies. Due to its global usage and a hard stab on the traditional finance industry, it received international regulatory backlash.
In April 2020, the Libra team changed its tune and indicated that it would launch an array of stablecoins, each backed by a single fiat currency. However, more had to be done. Part of it was to rename the project and to minimize connection with the social media giant. “Day,” or Diem in Latin, was born.
Libra changed to Diem on December 2, 2020. Along with the change came a revised whitepaper with significant edits and omissions.
Background
The project is operated by the Diem Association, which was earlier known as the Libra Association. Stuart Levey, Ian Jenkins, and Dahlia Malkhi are among the key members of the team. The three make up the CEO, CFO, and CTO, respectively.
Notably, other team members have extensive experience in their respective areas. For example, its lead compliance officer, Sterling Daines, has immense hands-on financial crime compliance, while its general counsel, Saumya Bhavsar, is a former banking regulator.
Note that the Diem Association is registered in Switzerland as an independent membership organization. Its board members are drawn from Xapo, Kiva Microfunds, PayU, Andreessen Horowitz, and Novi.
Key Changes Made to The Libra Whitepaper
The first significant change is the dominance of the word “Facebook” and its role in the organization. For instance, the original paper mentions the social media giant more than five times and gives it a “leadership role.” However, therevised edition states that Facebook and its team have “no special rights” beyond assisting in creating the Diem Association.
Also, Diem is pegged to a single fiat currency (United States dollar) instead of a basket of currencies, as was the case with Libra. However, in the future, it may develop a multi-currency backed stablecoin.
Diem will also comply with international regulations.
Notably, the change of name never touched on the core use cases. Diem focuses primarily on instant payments and cross-border remittances. Furthermore, Novi, a virtual wallet meant to hold Libra tokens, will now hold Diem coins. Note that Novi is a rebrand of Calibra.
Conclusion
Diem is definitely a new ‘day’ for Libra, and by extension, could pick up where Facebook left off in its vision to launch a stablecoin to power payments and remittances globally. Its significant distance from Facebook and change of contentious issues is a great way to bring regulators back to the discussion table.
Disclaimer: Cryptocurrency trading involves significant risks and may result in the loss of your capital. You should carefully consider whether trading cryptocurrencies is right for you in light of your financial condition and ability to bear financial risks. Cryptocurrency prices are highly volatile and can fluctuate widely in a short period of time. As such, trading cryptocurrencies may not be suitable for everyone. Additionally, storing cryptocurrencies on a centralized exchange carries inherent risks, including the potential for loss due to hacking, exchange collapse, or other security breaches. We strongly advise that you seek independent professional advice before engaging in any cryptocurrency trading activities and carefully consider the security measures in place when choosing or storing your cryptocurrencies on a cryptocurrency exchange.
The decentralized finance (DeFi) space has grown to include platforms in various sectors such as spot trading, derivatives, and futures. Interestingly, some networks such as Yearn Finance support yield farmers and liquidity providers through an aggregation service.
Instead of offering spot trading, lending, or borrowing functionalities, it allows users to deposit funds, then it distributes it based on projected returns and the risks involved.
However, this isn’t enough to drive meaningful DeFi adoption. Therefore, Yearn followed the partnership route to expand its ecosystem and to improve interoperability between DeFi systems.
In this article, we look at the most impactful partnerships in the Yearn ecosystem:
On November 3, 2020, Yearn’s creator, Andre Cronje, took to Medium to announce the coming together of his platform and Sushiswap. The connection between the two platforms meets as Sushi improves its automated market-making (AMM) outlooks while Yearn digs deeper into aggregating formulas. These qualities brought a need for cooperation between them, leading to:
A combination of development resources.
A rise in the total value locked (TVL) on each platform.
Working together to develop and launch Deriswap, a platform bringing together spot trading, derivatives, and futures trading.
Introducing Keep3r Network, an on-chain price oracle on the second iteration of Sushswap.
Additionally, liquidity providers on Sushi provide collateral for the Sushi money market.
Partnership with Cream Protocol
The DeFi aggregator platform partnered with Cream, a lending network similar to Aave, in developing the system’s second version. With the partnership, the Yearn and Cream team created Cream V2, which introduced or enhanced leverage and lending features. Notably, the new platform enables yield farming using leverage.
Additionally, Cream V2 acts as a springboard to power stable credit and yet-to-be-built lending functionalities. Apart from merging resources allocated towards development and seeing a rise in individual TVL, the partnership saw shares in Yearn Vaults qualify to provide collateral in Cream.
One feature added to Cream’s new version includes rotating multi-signature keys in order to improve deployment, iteration, and testing. Unchanged features include those that touch on governance and native tokens.
Akropolis and Yearn
The partnership is rather a unique one. Why? It aims to bring out the best in each platform’s team. Therefore, each team continues with their previous journey but leans on the other if they need help.
Furthermore, Akropolis users can access Yearn and a host of other networks such as Cream and Pickle. In return, Yearn investors benefit from Akropolis’s investment strategies and a pool of institutional networks. The partnership between the two platforms brought with it improvements on Akropolis.
For instance, there was a development of new vaults, an institutional application, some strategies, and a rotation of multi-signature. In addition, Akropolis’s native token was upgraded to be able to track losses.
The PowerPool Partnership
PowerPool is a decentralized protocol accumulating governance strengths in systems built on the Ethereum blockchain. In short, it brings together governance tokens from a wide range of DeFi protocols, such as Compound and Balancer.
The partnership with Yearn Finance connected YFI, the governance token on Yearn, with PowerPool’s PowerIndex.PowerIndex provides a DeFi index inspired by distributed exchange-traded funds (ETFs). The index exudes meta-governance functionalities and contains eight tokens, including YFI.
Note that the meta-governance aspect rides on concentrating user tokens from different DeFi platforms into a single contract. Next, the tokens’ voting weight is delegated to a group consensus. Notably, the contract generates a token that its holders can use to decide the other tokens’ fate in the pool.
So, what does the partnership bring to Yearn?
Having a share of the index gives DeFi lovers a share in Yearn.
It increases participation in YFI governance issues.
PowerIndex supports swapping. Thus, anyone can exchange another platform’s token with YFI and vice versa.
In return, Yearn benefits from more liquidity. Additionally, pooling YFI helps stabilize its price.
The Cover Merger
Although Cronje formally announced the partnership on November 28, 2020, the two platforms have been collaborating since Cover’s launch. The marriage between the two opens doors to advanced features targeting optimization, among other aspects.
The partnership allows Curve to provide backstop coverage to products built on Yearn. Their coming together allows Cronje’s network to enjoy Cover’s range of coverage known for supporting multiple collaterals. Yearn can mitigate risks for users through vault coverage. That’s not all. Underwriting coverage on Yearn becomes more profitable.
Fortunately, the benefits aren’t one way. For Cover, it’s hoisted to expand its wings to unchartered money markets. Additionally, it’s empowered to seek a bigger share of perpetual coverage and other products in the market. However, components such as the native COVER currency remain intact.
Pickle and Yearn
This is another key partnership in the Yearn ecosystem. Its uniqueness emanates from the fact that it’s supposed to eradicate duplicate works among the two teams. Doing so lets each team and individuals within a team work on what they’re extremely good at.
As a result, Pickle will launch new features such as reward Gauges. Governing members on the Pickle ecosystem receive DILL tokens when they lock their tokens for governance-related purposes. DILL holders share Gauge performance, withdrawal, and deposit fees.
On the other hand, Yearn users, especially Vault depositors, are incentivized to interact with Gauges through Vault shares. The depositors also receive more rewards by setting aside Pickle tokens to receive DILL. (www.chronicpainpartners.com)
Others benefits originating from the partnership include:
A merger of the platforms’ TVL.
Pickle finds its way into the Yearn ecosystem.
Pickle enjoys Yearn’s security, among other features.
Pickle’s reward Gauges rake in incentives from Yearn depositors.
The two protocols’ teams work together on strategy creation and split profits from the strategies.
There’s an overall increase in rewards for users in both circles.
Conclusion
By expanding the Yearn ecosystem, Cronje and his team seek to build an inter-connected DeFi world. With everything connected to everything, DeFi adoption naturally sets in.
Apart from interconnection and adoption, the partnerships focus on, for example, reducing the duplication of roles within teams working on DeFi projects. This encourages the birth of new products and features to help drive growth in the space.
In the process, DeFi enthusiasts benefit from enhanced products and yields, which further encourage interaction with DeFi-focused systems.
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
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.
Deriswap is the latest and unreleased project by Andre Cronje, announced for the first time in a Medium post on 23rd November 2020. Andre is a well known developer in the Defi space (“the Father of Defi” as many define him) and famous is his interest in trying to simplify users’ lives when approaching protocols. For example Yearn Finance ($YFI), launched in July 2020, automatically distributes users’ funds to various swap-based DeFi protocols based on their returns, risks, and other factors. Keep3r Network (which came in October) on the other hand, is a platform for projects that need or wish to outsource their “jobs” (operations) to third parties.
How has Defi improved over time?
Only a year ago, decentralized finance (DeFi) sounded so foreign, attracting just a handful of die-hard crypto enthusiasts and supporters. Fast-forward to 2020, and the space has become some sort of a sub-sector of crypto, leading to the creation of networks which address various sectors. Most of these platforms concentrate on yield farming through swaps. Other options and futures-focused systems also came on board.
Unfortunately, while these systems brought solutions, they also complicated the space. For instance, new questions had arisen such as which one is the easiest to use, which one has the best yields, etc.
Luckily, yield aggregator platforms such as Yearn Finance, as we said, came to the rescue of liquidity providers (LPs).
However, the segmentation problem still isn’t solved. This is where Deriswap comes in. The protocol ensures capital efficiency by aggregating services offered by other platforms such as Uniswap, Bancor, Deribit, Primitive, Compound, and Aave.
What is Deriswap? What problems is it trying to solve?
Andre Cronje
Deriswap is a decentralized platform combining swaps, options, futures, and loans into a single product.
Cronje wanted to, among other things, guard DeFi users against the high costs incurred when moving away from the money market, as is the case with options-focused networks such as Hegic. Additionally, Cronje’s vision is to shift from segregated to consolidated liquidity.
Some advantages of pooled liquidity include less price slippage and fees. Also, he wanted to strengthen asset-settled instead of cash-settled options.
Under the microscope, Deriswap is inspired by Uniswap. In an interview, Cronje noted that the platform was born after adding roughly 150-lines of code to the Uniswap protocol. However, things like math functions had to be developed from scratch to address unique computations on the new system.
What products will Deriswap offer?
Swaps make use of Uniswap’s Automated Market Maker (AMM) formula “x * y = k” and allow LPs to provide liquidity as pairs of two coins such as Bitcoin (BTC)-Ethereum (ETH). Their incentives originate from trading costs.
Options – Options tap into swaps to hedge against volatility. For example, positive trading costs cancel losses from settled options. Deriswap makes use of TWAP (Time-Weighted Average Price) oracles to implement American-styled options that have no hard-coded settlement time.
Deriswap Interface
Since settlement occurs in pairs, call and put functions have to exhaust assets from either side. That is, a call request buys the entire amount while a sell order auctions the absolute value.
Deriswap options allow users to maximize fees whether the market moves sideways or is too volatile. In case it moves sideways, for example, there are fewer trading fees but high options fees. When it’s unstable, vice versa, the trading costs increase while the options charges are reduced.
Futures – Futures ride on the time element found on swaps. This, vice versa, is “just a normal trade” in Cronje’s words. It allows one party in a contract to pay a premium as well as the base asset.
Loans – Loans are a natural evolution from futures. Interestingly, the deposited currencies pair back each other. For example, assuming you deposited BTC-ETH and want an ETH loan, BTC serves as collateral. This then determines the amount of ETH eligible for borrowing.
Once the ETH is returned, BTC is given back. Otherwise, BTC is forfeited. It is important to note that loans can be settled before their due date.
What are Deriswap’s advantages?
We could think of the platform as a Yearn replica which doesn’t only interact with swaps like Uniswap and Bancor. It deploys capitals to the entire ecosystem of options, loans, and futures. Therefore we can outline key points such as:
users can deploy funds on selected platforms from a single interface. For instance, they could allocate 30 percent to Aave to power decentralized borrowing, 30 percent to Deribit for options, and 40 percent to Uniswap for trading.
distributing capital to various unrelated platforms allows Liquidity Providers to use the same amount of money for different things.
with different spheres of Deriswap complementing each other, LPs guarantee returns even when one market is dormant or unfavorable. For example, when the market has low volatility, they can quickly turn to options and loans. This while a highly-volatile market provides an opportunity to make a killing from trading and futures.
Deriswap makes existing DeFi products functional and cheaper
… and accommodates what Cronje calls “lazy liquidity”. This is liquidity from LPs who don’t have time to be active on a platform. Instead, they provide liquidity and come back after six months to check for yields.
When is Deriswap launching?
As of today, there is no official release date and not much info has been disclosed. Through a series of tweets, articles and community posts announcing Yearn Finance’s last collaborations, we came to know that Deriswap will be completed and launched together with the Sushiswap team. The partnership should biuld the next Sushiswap trading platform on top of Deriswap.
In this post, we can also read that the two teams will cooperate “in a stealth project following Deriswap release”.
To confirm this “aura of mystery” behind Deriswap and last Cronje’s announcements in general, “cryptomaniacs” are welcome to bet on what this fourth notorious project in his last tweet could be
Cronje is considered by the cryptocurrency community as having the “Midas touch”, where every project he touches turns into gold. Therefore, people are anxious to know if and when Deriswap will launch a token so that they can dive in early and buy it for a cheap price and sell it later. Most DeFi protocols have their own limited supply token, so it is expected that Deriswap will eventually also have a token. However, the Deriswap protocol is currently undergoing audit so there is no official Deriswap token yet. There is also no news on whether there will even be a token at all.
However, this has not stopped some people from issuing fake Deriswap tokens for unsuspecting crypto enthusiasts to buy. In one such scam, people deposited over 150 ETH in less than 15 minutes, which the scammer promptly took and absconded.
André just gave an update about deriswap 30 mins back. Someone created a fake token called $DWAP. 60 addresses in less than 15 mins with 150+ ETH.
Aaaaanddd its gone.
Take few mins to hover around etherscan before u jump, it’s not that hard.
In an ecosystem where liquidity is thinly spread across multiple platforms, Deriswap acts as a consolidator in order to increase capital efficiency. As such, a DeFi enthusiast can deploy his capital into loans, options, swaps, and futures platforms. Consequently, they can receive incentives, even when one industry is stagnant. Moreover, the use of the TWAP oracles eliminate the risk of widespread price variance.
Since Deriswap is developed by a seasoned programmer, the platform is likely to turn out as another success, just like Yearn.
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.
After our 2020 Roundup article where we reviewed this year’s biggest trends, let’s now dive deeper into what happened in the world of crypto exchanges.
The surge of Defi and its DEXs (decentralized exchanges) has collapsed CEXs’ (centralized exchanges) volumes drastically. If Uniswap is the clear King of DEXs, the same we can probably say for Binance among CEXs, where it leads on both rankings for spot and derivatives. But the fight against decentralized exchanges has just started and new ideas and concepts are needed to keep up with the competition.
As we shall see, the CEXs that managed to better keep up against Defi are the ones that tried and innovated the most, sometimes directly inspired by DEXs.
Table of Contents
Uniswap
Uniswap is the clear winner among all kinds of exchanges in 2020.
Uniswap TVL in 2020
Its TVL (total value locked) has literally skyrocketed in the second half of the year, reaching more than $3 billion in November before dropping when $UNI pools ended giving rewards to Liquidity Providers.
Uniswap has constantly been the most used Dex in crypto and has terribly helped Defi’s growth. It is “The” place where to find new listings and the deepest liquidity on Ethereum. If you are looking for an existing ERC-20 token, you can be sure it is there. Anyone can open a new pool, it is as simple as providing some tokens plus some Ethereum on the platform, and it’s done.
Uniswap doesn’t have a order book: the platform relies on an AMM (Automatic Market Maker) system to provide for trading liquidity. Although purists may miss order books, AMM has proven to be a new and successful way to swap tokens.
In September, the platform distributed 150 million $UNI (their new governance token) to anyone who came in touch with the website, whether just swapping or pooling liquidity. A minimum of 400 tokens were sent to each user, for a value of around $1500 in the first hours of its existence (for patient holders, the value tripled in during the day).
This airdrop attracted so much attention to the platform that other protocols did or are planning to do the same thing in the next future. With Uniswap V3 and all of its innovations expected to be released pretty soon, some can only wonder where $UNI can go!
If any of you has been sleeping throughout the last months and still hasn’t claimed his tokens, you can follow our video guide here!
How to claim free $UNI on Uniswap
Binance
Binance succeded at remaining the biggest Cex for volumes, with a daily ATH of $15 billion in spot trading and of $37 billion in futures (up by 34 billion compared to 2019!). It retains the first position on both rankings. (Ativan)
Part of their success is due to numerous initiatives that they introduced throughout 2020.
In April, Binance presented their Card (later on Binance also acquired Swipe, a multi-asset digital wallet and Visa debit card platform), which is now supported in more than 180 countries.
One of the most important innovation on the year is “Launchpool”, which lets users farm new tokens like in Defi. Stakers can accumulate rewards prior to a listing that will happen directly on Binance after a few weeks (usually). Moreover, Launchpool offers single-token staking so users don’t even have to be wary of Impermanent Loss. Projects like Bella Protocol ($BEL), Flamingo ($FLN) and $WING have were presented via Launchpool.
September has been a great month for Binance. They firstly launched Binance Smart Chain, a blockchain created to run parallel to Binance Chain where devs can create Smart Contracts and Defi solutions. The exchange then immediately introduced “Liquid Swap”, a new trading platform that allows users to reap the benefits of Defi, with the first AMM product in any CEX ever. Users can pool their funds on Liquid Swap earning trading fees like on a AMM DEX.
Simultaneously Binance Labs, the venture arm of the exchange, has continued investing in new projects to empower crypto. They helped, among others, 1inch, Dodo and Math.
On a side note, after the launch of Binance U.S. in 2019, the “.com” platform has now slowly been giving a 14 days notice to U.S. customers (both those who went through KYC and those who simply access the website from within the country) advising to withdraw funds before the account is blocked. It appears that customers who use VPNs are “safe” for the moment.
FTX
Ftx, the known derivatives exchange led by the omnipresent Sam Bankman–Fried, has surely been on the cutting edge among CEXs this year. The team worked very hard trying to anticipate trends and they seem really good at giving their customers what they have been hoping for.
“Why should we trade crypto and stocks on separate exchanges?” That’s probably what Sam asked himself at a certain point. So, no sooner said than done, the answer arised: tokenized stocks. Two partnerships with CM-Equity (Germany) and Digital Assets AG, DAAG (Switzerland), were decisive for the accomplishment. Although trading stocks on FTX looks similar to trading crypto, it is important to notice the difference.
“CM-Equity is fully regulated in Germany, and is a licensed financial institution permitted to offer these products. All FTX users who trade tokenized stocks may also have to become customers of CM-Equity, and pass through CM-Equity’s KYC and compliance. Furthermore, all trading activity may be monitored for compliance by CM-Equity. CM-Equity custodies the equities at a third party brokerage firm. CM-Equity (not FTX Trading LTD) provides the brokerage services”.
Unlike in traditional markets, FTX’s Tokenized stocks will be tradable 24/7, and as of now they are more than 50, among which Netflix, Facebook, Apple and Amazon.
FTX.US (the american arm) also put themselves (and the legitimacy of cryptocurrency) in the public eye as one of the top donors of the Biden’s Democratic Presidential Campaign. In particular, Sam donated $5,22M. While the real reasons remain probably unknown, we hope it will mark a step towards crypto recognition by authorities.
Last but not least, we can’t forget to mention that the same team behind FTX is responsible for the creation of Project Serum, one of the most successful non-ETH order-book based Dex, running on the Solana chain (which handles around 50,000 tps).
Get the latest insider dig on the happenings of the crypto world with Sam Bankman-Fried (FTX, Alameda, Serum)
Sushiswap
Sushiswap launched in August as a fork of Uniswap with added rewards by the anonymous founder Chef Nomi. We were then at the peak of the “Defi bull summer” and the success was sudden. Its TVL gained great traction but some drama was due to happen. A week after, the anonymous dev removed its liquidity and sold $14 million worth of $ETH, starting a 50%+ drop in price. At that point, an offer was made by Sam Bankman-Fried to step in and remove Chef Nomi from the project.
Highs and lows have followed since then, but Sushiswap is still the second DEX for TVL (around 33% less than Uniswap) and one of the most successful. Many are the partnerships and its advisors are among the best that crypto can offer. Even though some will neve forget that Sushiswap literally “stole” liquidity from Uniswap, migrating pools to their platform and thus reducing Uniswap’s TVL dramatically, many are ready to bet that this project is here to stay.
Mt.Gox
December the 15th was the due date for Mt.Gox exchange creditors to finally receive part of their loss funds after years. The exchange repeatedly lost cryptocurrencies between 2011 and 2014, when it filed for bankruptcy. 140,000 $BTC (almost $4 billion dollar worth as of now) have since then been found and should be sent to users as partial refunds.
As suspected by many, it looks like the deadline has not been respected and creditors are still waiting for their money. A few days ago, someone noted a transaction from a Mt.Gox wallet, something which led many believe that the distribution had actually started.
🚨 600 #BTC (13,818,232 USD) transferred from #MtGox Cold Wallet to unknown wallet
Unfortunately that was not the Mt.Gox rehabilitation plan wallet, but the F2Pool cold wallet. There has been no confirmation that the creditors had received any fund yet.
BTC Markets accidentally exposed their users’ names and email addresses
BTC Markets, an australian crypto exchange, has mistakenly send out a compromised marketing round of emails. During a routine operation, instead of individually sending out email to their customers, personal data was exposed in the “to” field. The emails were sent in batches so that each user data had been potentially seen by 999 other people.
The mistake didn’t directly compromise sensible info such as passwords so funds remained safe, but this type of error is something that can definitely worry crypto adopters and possibly make them change platform. Users don’t want strangers to know they own crypto, and we hope that this kind of mistake won’t happen again.
Kraken, the first to win Bank Charter Approval in the U.S.
Kraken is the world’s first Cryptocurrency Exchange to get approved as Special Purpose Depository Institution (SPDI) by the State of Wyoming. “Kraken Financial”, this the name, is the “first digital asset company in U.S. history to receive a bank charter recognized under federal and state law, and will be the first regulated, U.S. bank to provide comprehensive deposit-taking, custody and fiduciary services for digital assets”.
The exchange will enable its clients to bank seamlessly between digital assets and national currencies and will be regulated in similar manners to other U.S. banks. The SPDI is a “custody bank” but for digital assets (such as cryptocurrencies) and it’s required by law to always maintain 100% reserves of its FIAT deposits.
Huobi exchange
It all started with big $USDT (and other currencies) transactions spotted moving in and out of the exchange, the largest in China, on November the 2nd. At the same time, rumors of one of the Chairman being arrested increased the FUD which led to a sharp dump in price of $HT, the Huobi token, and to a rush in withdrawing $USD out of the platform. The exchange then denied all the allegations and the situation returned back to normal in the next days.
The dip is caused by some fresh China FUD. Apparently rumors swirling that some core members from Huobi are out of contact.
China FUD always happens, and we always bounce back.
We have extensively covered the Okex story in our developing article.
On October the 16th, all the withdrawals were suddenly halted on the platform and the suspension has lasted until November the 27th when all operations were reopened without restrictions. As confirmed later on, the original cause was one of the exchange’s private key holders cooperating with the authorities. He was therefore unable to complete the authorization processes needed to allow external transactions.
Star Xu, the person held in custody by the police, has been investigated for matters that have nothing to do with the exchange. Xu was allegedly assisting the authorities (he is now back to normal business activity) about funds he borrowed from a Shanxi-based underground bank in 2019.
Kucoin
Kucoin, one of the leading crypto exchanges based in Hong Kong, suffered a security breach on September the 26th. The total amount stolen, a whopping $281 million in $BTC,$BSV $LTC and other coins, is one of the largest in crypto history. The hacker (or hackers) was somehow able to take possession of the centralized exchange’s hot wallets private keys, achieving the ability to move funds around. He then withdrew and started dumping them on DEXs. Kucoin immediately transferred the rest of the funds to new wallets and suspended all deposits and withdrawals.
It appears that Kucoin hot wallets’ private keys hadn’t been changed for over 3 years at the moment of the breach, which is another confirmation that the famous saying “not your keys, not your crypto!” is an evergreen.
We must hope that all these attacks will be helpful in the long run, enabling stricter security procedures by exchanges and platforms, necessary if crypto final goal is mainstream adoption!
Disclaimer: Cryptocurrency trading involves significant risks and may result in the loss of your capital. You should carefully consider whether trading cryptocurrencies is right for you in light of your financial condition and ability to bear financial risks. Cryptocurrency prices are highly volatile and can fluctuate widely in a short period of time. As such, trading cryptocurrencies may not be suitable for everyone. Additionally, storing cryptocurrencies on a centralized exchange carries inherent risks, including the potential for loss due to hacking, exchange collapse, or other security breaches. We strongly advise that you seek independent professional advice before engaging in any cryptocurrency trading activities and carefully consider the security measures in place when choosing or storing your cryptocurrencies on a cryptocurrency exchange.
Duck Liquidity Pool ($DUCK) is a DeFi Market Maker protocol, developed by DuckDAO, one of the biggest cryptocurrency community that provides funding and marketing support to early-stage crypto projects.
The boom of decentralized finance (DeFi) in recent months has ushered in a new profit-making strategy for crypto traders, beginners and advanced alike. Decentralized exchanges (DEX) rely on liquidity pools to help power their market-makers. While the Duck Liquidity Pool is a new entrant in DeFi, it has already captured the attention of many users in the space thanks to its high APY and token burning model.
https://youtu.be/8MNKafDgW0o
What is the Duck Liquidity Pool?
The Duck Liquidity Pool (DLP) is DuckDAO’s own market maker. The funds that supply its pool came from the sale of pre-mined tokens and can be accessible in many other protocols and exchanges. In the meantime, projects that are supported by DuckDAO will be the first to be able to tap the pool. The ticker for the pool is $DUCK.
The unique feature that distinguishes DLP from others is its “unilateral burn” strategy, or the one-sided token burn model. It is designed to burn 50% of all earned rewards (more on this later).
The APY level for DLP is high and its suppliers can receive as much as 50% of the profits from market making, airdrop of incubated project tokens, as well as non-fungible token (NFT) campaigns. Such a feature enables yield farmers the ability to earn profit by just providing liquidity to DuckDAO’s market maker.
To participate in the DLP, users have to lock their cryptocurrency holdings by depositing their funds in the pool. In return, they receive DUCK tokens as a reward for supplying funds to the pool.
DuckDAO’s Native Token ($DUCK)
DUCK token is the DuckDAO’s native utility token, which also powers the incentive model for the Duck Liquidity Pool. The token has the following use cases:
Yield farming on Uniswap pools – Staking tokens help contribute liquidity to DUCK and DDIM pools. For this, they earn profit through DLP.
Reward token for market-making profit – Half of the profit from the market maker is returned to the community who belong to the liquidity pool. If the performance of DLP is good, the profit for the yield farmers grows in proportion as well.
Project token airdrops
Non-fungible token as reward
Deflationary Farming: “One-Side-Burn”
This is touted by the team as “Yield Farming 2.0,” which is designed to support a deflationary, unilateral burning of tokens. To understand how this works, we must first look at how the current yield farming mechanism works.
The Usual Scenario for Most Liquidity Pools
Commonly, yield farming pools in the DeFi space look very advanced for the average trader. Not only does this create a psychological barrier to entry, but it also makes profit-making a little more difficult for someone new to yield farming.
Another issue that traders face is the inflationary structure of the incentive mechanism in most liquidity pools. This is because, in order to provide rewards to yield farmers, mined tokens have to be released into the market. This model isn’t designed for long-term effectiveness since with more reward tokens in supply over time, we can expect its value to depreciate as well.
Duck’s Unilateral Burn
$DUCK, on the other hand, is designed to support long-term yield farming strategies. Even beginners on liquidity pools can just stake and earn a part of the profit that DuckDAO’s market maker gets.
$DUCK One-Side-Burn Deflationary Model (Source: DuckDAO website)
One-Side-Burn is a deflationary model that is designed to burn 50% of the carry pair as soon as the liquidity provider decides to cash in a portion of his stake.
What happens in such a situation is that users lose one side of their liquidity as the tokens are burned. And when someone decides to exit the pool completely, his entire liquidity is also burned and further lowers the DUCK tokens in supply.
While this model may seem counterintuitive for profit-earning at first, over-time, the value of the tokens is going to be greater than what it was when a user has staked in the pool. That is why DLP’s design appears to be much better in the long run.
Duck Liquidity Pool Market-Maker Models
Project Token Purchase
DLP purchases tokens in order to facilitate buy and sell liquidity.
DeFi has enabled the birth of new profit-making strategies for traders in the space. However, whether existing liquidity pools can support long-term yield farming models is another question altogether. DLP’s model, which is powered by the ‘unilateral burn’ design, appears to be more promising.
To be fair, like many other pools, the profit it can generate for stakers is also influenced by the number of users joining the pool. This is why it is important to look into that as well before deciding to lock your tokens and supply liquidity to the pool.
Decentralised Finance (DeFi) series: tutorials, guides and more
With content for both beginners and more advanced users, check out our YouTube DeFi series containing tutorials on the ESSENTIAL TOOLS you need for trading in the DeFi space e.g. MetaMask and Uniswap. As well as a deep dive into popular DeFi topics such as decentralized exchanges, borrowing-lending platforms and NFT marketplaces
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.
XFai is a decentralized oracle service provider that aims to address liquidity and gas issues in decentralised exchanges (DEXs) through a so-called DEX Liquidity Oraclewhich will revolutionise cryptocurrency trading whilst reducing gas fees.
If you are a regular DEX trader, you might notice that there are times when you can’t complete trades. This happens often with small-cap tokens that do not have enough liquidity. In this case, traders have two options, either to wait it out until there’s enough liquidity or to increase price slippage tolerance. But either way, it can result in huge losses on the part of a small-cap token holder.
XFai wants to address this problem by empowering DEXs with liquidity that can be supplied to small-cap tokens. This equalizes the playing field for every single trader, allowing them to execute their strategy without having to shoulder massive costs just because a DEX might not have enough liquidity on any particular trading pair.
Check out our interview with XFai’s Chief Scientist, Taulant Ramabaja.
Background
The problem with many DEXs today is liquidity. While liquidity pools and profit-generating DeFi systems like yield farming have offered revolutionary solutions in the last year or so, DEXes still face this concern. This leaves many traders vulnerable to huge price slippages and losses. And if the issue persists, cryptocurrency traders might be discouraged and go back to trading mostly on centralized exchanges despite having less options.
This is what XFai worked is trying to solve.
XFai, which was co-founded by Geoffrey Khan, was developed in order to deal with the problems hounding DeFi markets today. It has gained a substantial amount of support, garnering investments from companies like AU21 Capital, LD Capital, and Roger Ver, one of the earliest adopters of blockchain technology and the CEO of Bitcoin.com. It is also worth mentioning that they were able to generate over $3.8 million within the first 12 hours of their private sale.
What is XFai?
XFai is a decentralized oracle service provider with the aim of addressing liquidity and gas issues in DEXs through a DEX Liquidity Oracle (DLO). This means that the protocol’s role is not only limited to supplying data to price feeds and engaging with smart contracts, but is also capable of actively providing and managing token liquidity in partner DEXs such as Uniswap.
The primary goal of the project is to support small cap tokens and token holders by establishing a system that helps them earn better rewards. In other words, the project seeks to help them gain as much in incentives as they can, just like how a holder of a large cap token does.
DEX Liquidity Oracle
XFai’s DLO is powered by the XFai smart contract, which allows users to stake small cap tokens that can later be supplied to Uniswap pools according to corresponding price ranges and existing orders. The biggest trades facilitated on Uniswap exchanges will be provided with the liquidity collected from the DLO.
This does not just benefit large volume trades for small cap tokens, but also those who supply liquidity on the same tokens. They receive rewards when they do so as well. The good thing about DLO is that it does not require liquidity providers to supply all the assets supported in a liquidity pool. They can choose to simply supply a single token in a pool, which also mitigates the risks of impermanent loss on their end.
What supports this function further is its real-time price feed from centralized exchanges. Furthermore, the liquidity from the DLO is easily accessible to DEXs, addressing the issue on price slippage. This is exactly the goal of the XFai team, to support the current DEXs in the market and not to present itself as a competitor.
How Does XFai Work?
First, the user has to add tokens on the DLO liquidity vault/pool. The DLO is governed by a smart contract that also sends the tokens to partner DEXes when liquidity is needed. Note that users do not need to supply multiple assets at a time anymore, thereby reducing their exposure.
Second, the DLO looks into the data from existing order books from other exchanges to determine existing prices and trading volume. Then, it comes up with a synthetic curve which they will use in order to pair DLO liquidity with partner DEXs.
Then, there is a smart contract that governs how and when liquidity is supplied to a DEX using the synthetic curve. The goal of the contract is to ensure that enough liquidity is met by AMMs in order to avoid price slippage while allowing small cap token holders to supply liquidity without incurring impermanent loss.
XFIT Token
XFIT token is XFai’s native, utility token, which can be used as a medium of exchange, store of value, and means of payment for transaction fees. But more than that, it also has governance and reward functions. Liquidity farming is accessible in XFIT and all other DLO pairs.
To start liquidity mining, holders can stake their tokens in select pools to earn proportional rewards. Each time the DLO profits from the trades conducted by its platform users, token holders earn additional XFIT. They can either redeem XFIT tokens to be later sold to the market, or they can decide to return their rewards back to liquidity pools in order to increase their stake position.
In addition, XFIT token holders are also entitled to discounts on transaction fees if they use XFIT. They can also make direct swaps from XFIT to any other token in the protocol as long as they are supported by the DLO.
XFai Liquidity Generation Event: How to stake XFIT
The XFai liquidity generation event is a way to allow users to become involved with XFai’s XFIT token early, and stake them in the liquidity pool in order to earn increased, sustained yield throughout the launch period.
To participate, users can go on the XFai website and click on “Farm”, then choose your preferred pool. Note that the APY is synced for all pools so they earn the same amount of APY as each other. Then click “Connect Wallet” to connect using MetaMask, once connected the dashboard will automatically calculate how much XFIT you can purchase with the amount in your wallet. Select the amount you want to stake and hit “Farm”.
Whilst farming, you have the option to either Add to Farm, which allows you to increase your stake or Harvest, which allows you to claim your XIFT rewards.
To claim your rewards, click “Harvest” and you would be presented with the option to Harvest XFIT or Harvest XFIT and unstake. Harvest XFIT allows you to claim the XFIT tokens gained into your wallet whilst keeping the staked amount in the liquidity pool to keep farming more XIFT rewards. On the other hand, Harvest XFIT and unstake means you can claim your XFIT rewards and unstake the staked amount (or any part of it) from the pool.
The XFai LGE will be from 16th April to 7 May 2021.
Perhaps one of the largest factors that stop people from completely shifting their cryptocurrency trading activities to DEXs is the liquidity problem, apart from the fees. It is difficult to execute trades with low liquidity and even if they often do, sometimes, it takes multiple slippage tolerance adjustments before a trade gets to be completed.
While this can look trivial for some people, this is something that can’t be neglected. If XFai takes off, the DeFi space might experience a better market situation. If traders do not have to be burdened by price slippages and if liquidity further improves through the same solutions the XFai team did, DEXs can be even more alluring to everyone, which would help speed up adoption.
Disclaimer: Cryptocurrency trading involves significant risks and may result in the loss of your capital. You should carefully consider whether trading cryptocurrencies is right for you in light of your financial condition and ability to bear financial risks. Cryptocurrency prices are highly volatile and can fluctuate widely in a short period of time. As such, trading cryptocurrencies may not be suitable for everyone. Additionally, storing cryptocurrencies on a centralized exchange carries inherent risks, including the potential for loss due to hacking, exchange collapse, or other security breaches. We strongly advise that you seek independent professional advice before engaging in any cryptocurrency trading activities and carefully consider the security measures in place when choosing or storing your cryptocurrencies on a cryptocurrency exchange.
