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.
Covalent is a multichain protocol that provides easy and quick access to deep, granular, and historical blockchain data.
So far, the blockchain has had an irrevocable impact on modern technology. The spread of decentralized architectures and frameworks has given birth to numerous technological innovations. Despite the technological freedom the blockchain has brought, granular and historical blockchain data is almost impossible to access. Blockchain product users and developers often have no way to explore data on the blockchain; data that are highly unstructured and unstandardized in most cases.
Through its special algorithm, Covalent resolves this issue and guarantees mass adoption for Decentralized ledger technologies (DLT), powered by a rich data infrastructure.
Founded in 2018, Covalent prides itself as a new frontier of development for enterprises, consumers, and software developers. The very first version of the protocol was built at a distributed systems hackathon back in 2017.
After winning the hackathon, co-founders Ganesh Swami and Levi Aul decided to turn the ambitious blockchain implementation into a highly secure, reliable, and easy-to-use decentralized solution. Covalent technology strives to resolve the huge infrastructure problems slowing down blockchain adoption and acceptance worldwide.
The team behind Covalent is a diverse 30-persons group of financial, marketing, and blockchain experts and engineers all with rich experience in decentralized finance (DeFi).
What Is Covalent?
Covalent is a multichain API that provides easy and quick access to deep, granular, and historical blockchain data. This efficient blockchain protocol has managed to index the whole blockchain space to empower blockchain pioneers and leaders of the future. Additionally, the solution bridges the entrenched world of centralized databases with the new world of distributed blockchain technologies.
Covalent’s unified API enables access to the richest and most secure data infrastructure within the decentralized ecosystem. Additionally, through its immense data infrastructure, The API allows users to scrutinize numerous well-known and specific blockchain protocols. This gives endless possibilities to participants in terms of transparency and total visibility throughout decentralized networks.
The covalent network’s unique API implementation offers incredible access to historical transaction activity, positions, and token balances to many top Defi and NFT projects. Currently, the protocol is working with the likes of Ethereum, Polygon, Binance Smart Chain, and Avalanche to provide substantial, granular, and accessible data.
Covalent Use Cases
Overall, the full extent of the protocol’s use cases is relatively unknown. However, developers and partners within the platforms have come up with multiple ways to leverage data provided by the protocol.
Wallets
There are over 200,000 ERC-20 tokens on Ethereum and growing all thanks to the composability of DeFi Solutions. Under the Covalent algorithm, wallets are well structured, as they show real-time and historical balances, positions, and most importantly, portfolio value for all of their assets.
Taxes
All DeFi actions are taxable, and having easy access to such data facilitates blockchain transactions and makes firms compliant. Covalent is the only protocol in the market that provides this service for decentralized exchanges (DEXs).
NFT Dashboards
Mainstream blockchain products like Chainguardians and NFTX rely heavily on the platform’s Investor tools to show price trends, liquidity, and ROI of collectibles to educate their clients.
What Makes Covalent Unique
It is no doubt that Covalent is special in regards to other solutions within the market. The platform’s incredible algorithm is rooted in 4 main features, which allows Covalent to provide clients with the best transparency and visibility tool in the blockchain sphere. The features are:
Data availability
Covalent’s infrastructure is responsible for every transaction, contract, and wallet address under its ecosystem. Hence, this blockchain solution is accountable for billions of rows of data and terabytes of data, unlike most projects on the market that provide smaller or minuscule amounts only.
Composability
Composability is viewed as an important tool for DeFI implementations, as it grants users the ability to build financial solutions leveraging building blocks from a multitude of projects. Therefore, Covalent’s immense multichain API ultimately enables developers to instantly construct scalable and data-rich applications powered by a granular data infrastructure. (Xanax)
Multi-blockchain Support
One of the platform’s greatest strengths is its multichain support, as the covalent team is currently working with customers on 7 different well-known blockchain networks, with many more set to join and rely on the protocol soon.
In general, the Covalent team works closely with technical and business teams of their customers across the blockchains networks to ideate, plan, and execute a turn-key solution for developers building on top of their blockchains.
No code solution
The multichain API firmly believes in no-code solutions for clients and participants. Therefore, no overpriced and complicated SQL queries, no subgraph development and maintenance, and no need to invest in highly-skilled developers to simply retrieve blockchain data, which can be a huge waste of engineering time. With one fast and secured API, customers are sure to be satisfied.
Covalent Query Token (CQT)
CQT is the platform utility token and is primarily a proof-of-stake governance token powering Covalent’s rich and robust network. Additionally, the token facilitates the democratization of the multichain solution and enables the creation of blockchain data apps in Covalent’s vast marketplace.
CQT will primarily serve as a governance token, giving voting rights to holders concerning the system’s parameters such as new data sources, specific geolocations, and data modeling requirements. CQT will also be used as a staking asset within the multichain API.
Conclusion
The Multichain API aims to organize the world’s blockchain information, enabling more transparent blockchain actions and transactions. Covalent has successfully managed to resolve issues concerning transparency and visibility within the blockchain.
The platform’s unified API has indexed billions of blockchain data points in the scope of empowering blockchain leaders of tomorrow. It is fair to conclude that Covalent is ahead of its competition, as more than 7 prominent blockchain networks rely on the services of this protocol.
The team’s continuous drive to elevate and scale blockchain technologies is a testimony of the platform’s innovative ecosystem built to bring forward key attributes of decentralization in complete transparency and visibility. Overall, Covenant is set to impact the blockchain space positively, thereby contributing to the worldwide adoption of decentralized technologies.
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.
Ispolink is a blockchain-based matchmaking job platform combined with AI to enhance the experience of job seekers and employers.
As the unemployment rate rises worldwide, individuals without jobs have to look for clever ways to impress potential employers. One of the ways is to craft an impressive curriculum vitae (CV) with false statements. While this may possibly get them a job, the quality of their work would be on the line and may lead to loss of business revenue.
Apart from finding qualified professionals, businesses have to deal with a resource-consuming recruitment process, hefty agency fees, and manual processes. On the other hand, qualified candidates feel unappreciated when they don’t receive feedback on applied positions. To provide a lasting solution, Ispolink combines decentralized technology and artificial intelligence to minimize the time and cost it takes to fill a position and to get hired.
Background
Emanuil Pavlov and Nikolay Pavlov head the Ispolink platform at the CEO and CTO level while also being co-founders. Emanuil has a strong educational background in business management. Before co-founding the protocol, he was a blockchain analyst at Industria Technology, a business development manager at Latoken, and a vendor manager at Manpower.
On the other hand, prior to joining Ispolink, Nikolay worked in software-related departments in leading companies such as Industria Technology, Devision, and SAP.
Apart from a reputable founding team, the platform is backed by top investment firms like Magnus Capital, Lotus Capital, Titans, Moon Whale, and AU21 Capital. Ispolink partners include DAO Maker, Polygon, Besco, Junior Enterprises Europe, and Iron Hack.
What is Ispolink?
Ispolink is a blockchain-based matchmaking job platform. It uses a combination of blockchain, AI, and other carefully selected ingredients to enhance the experience of job seekers and employers. The platform concentrates on serving the IT and blockchain industry.
Ispolink Features
Automated CV Screening
Instead of recruiters manually going through prospective employees’ resumes, the platform automatically screens a CV. Depending on the targeted vacancy, the protocol automatically calculates a match score that shows how qualified a candidate is for the position.
Video Resumes
A video resume goes past the regular text-based version to indicate qualities like communication skills.
Referral System and Instant Feedback
Ispolink rewards existing users for bringing qualified users to the platform. However, the disbursement of incentives happens when a referee is hired. The network provides instant feedback to candidates during the entire hiring process.
ML-powered Matchmaking
The protocol uses machine learning-driven algorithms to match candidates to open positions. Additionally, the project employs natural language processing (NLP) to extract and interpret information from the CV.
The matching process considers a candidate’s work experience, technology stack, specific job-required, and soft skills.
Blockchain-based Degree Verification
Ispolink confirms degree authenticity for degrees stored on the blockchain to prevent candidates from intentionally providing misleading education qualifications. However, for this to have the desired impact, the protocol works with learning institutions to help them register the issuance of qualification documents on a decentralized network.
Company Pages
The protocol enables companies to create their pages and express intimate details such as core values and guiding culture. Additionally, it gives enough room for firms to showcase their accomplishments. In a nutshell, it’s a way for companies to portray their brand and attract the necessary talents.
Revenue Streams
Ispolink provides different revenue streams for users. For example, it supports liquidity mining and staking. Other ways users earn incentives include when they sign up and when they get verified.
Cryptocurrency Payments
The platform supports virtual currency payments for all hiring services. Although the blockchain payment system is complex, the platform simplifies it into logical steps. For instance, the payment process starts when a user chooses an action that requires payment.
Next, it indicates the applicable price in both fiat and crypto. If the user wishes to pay through crypto, they must have supported tokens in their wallet. A successful payment procedure leads to a confirmation message from the platform.
Fortunately, the platform will guide you on the entire process and indicate errors whenever they occur. Note that Ispolink gives users the ability to deposit and withdraw tokens from the platform wallet.
Critical Technologies Used by Ispolink
Ispolink runs on the Ethereum blockchain due to its highest number of users. However, due to the platform’s congestion concerns, Ispolink is shifting to layer two scaling solutions such as Polygon. Additionally, the protocol employs Matic Network’s scaling solution on an Ethereum base.
While the second-largest decentralized network uses a proof of work (PoW) consensus mechanism, Matic uses the proof of stake (PoS) mechanism. As such, Matic can process up to 10,000 transactions per second. Apart from Ethereum, the platform also targets the Binance Smart Chain (BSC).
Ispolink’s Token Economy
ISP is the platform’s base assets. The token follows Ethereum’s ERC-20 token standards and powers different aspects to the protocol, such as purchasing hiring packages, paying referral bonuses, rewarding verified users, staking, and governance.
The token’s total supply is 10,000,000,000 coins. The largest distributions of the tokens go to the ecosystem and marketing that account for 40 and 19 percent, respectively. Other ISP token allocations go to the team, advisors, liquidity, seed, strategic, private, and public sales.
Note that tokens not sold during the four phases are burnt while the rest remains in active circulation.
Ispolink recently conducted its triple token sale on DAO Maker, gate.io and Ignition.
Ispolink Roadmap
The platform has an extremely detailed roadmap giving a glimpse of what the future holds for its users. For example, it looks to provide a comprehensive mobile application for iOS and Android-powered mobile gadgets, activating ATS integration, and in-platform staking.
Conclusion
Ispolink is among very few blockchain-based platforms targeting job seekers and employers. In addition, integrating AI functionalities and in-built crypto payment options puts the project ahead of the line. Notably, the use of a decentralized protocol ensures its activities are immutable and verifiable.
Placing and verifying educational qualifications on the blockchain captures the presence of falsified information on a CV. Consequently, it leads to quality hires. The use of scaling solutions built on top of Ethereum saves its users from the high transactional fees occasionally experienced on the Ethereum network.
Additionally, instant feedback to candidates and a match score enhance the quality of job searches. On the other hand, company branding gives room for companies to express themselves and attract qualified candidates.
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.
Collateral Pay is a decentralized payment system that merges decentralised finance (DeFi) with Traditional Finance (TradFi), enabling users to store, stake, loan, save, and pay with crypto.
Since its inception, DeFi has aimed to give participants a better alternative to traditional financing. Reliance on centralized parties is being replaced with decentralized and transparent systems. This is achieved by building digital services in an open, secure, and permissionless manner.
Additionally, the rise of DeFi has been nothing less than tremendous. DeFi has grown exponentially and has open the world to new financial opportunities. A year ago, the monetary value locked in DeFi projects was $276 million. As of today, it is a whopping $43.6 billion in value.
However, unlike fiat, it is a bit difficult to make use of crypto assets outside of their respective blockchains, as there is an absence of “gateways to the real world”. Collateral Pay is that gateway that facilitates this process by bridging DeFi and mainstream finance.
Background
Set to launch its marketplace this May 2021, Collateral Pay is an ambitious project supported by more than 12 well-known firms within the blockchain space. The team behind the project is composed of longtime veterans in marketing, blockchain technology, and finance. CEO and founder Chris Longden guarantees that the protocol offers users a much more tax-efficient opportunity.Collateral Pay is described as an ecosystem that works faster and better than any solutions in the market providing participants with an efficient implementation of blockchain.
What is Collateral Pay?
Collateral Pay is a Polkadot-powered decentralized payment method that merges DeFi with the traditional finance sector. The protocol enables users all around the world to store, stake, loan, save and pay. The crypto solution is a payment gateway accessed through an interoperable crypto wallet, granting access to spending power by using crypto as collateral at the point of sale.
Furthermore, under Collateral’s unique algorithm, users are allowed to unlock and make use of their crypto assets without the need of selling them. Interestingly, crypto assets will be used as collateral against merchant payments by users for liquidity.
Overall, Collateral’s secure ecosystem is supported by a P2P network of borrowers and lenders where all transactions are conducted on-chain. Here, lenders stake crypto assets in staking contracts and receive generous APYs in return.
This thorough process is quick and easy, giving users access to instant spending power where assets are used as collateral from the very first point of sale. Precisely, Collateral Pay automatically evaluates at the point of sale the specific amount of digital currency to be bound in a smart contract. This facilitates the payment, and once locked, the fiat equivalent is instantly sent to the seller, legitimizing the transaction.
Ultimately, Collateral users will be able to leverage crypto assets autonomously, not needing loan drawdown facilities, saving time, and facilitating everyday crypto transactions. The platform is set to be a market leader through its efficient protocol that facilitates purchases in-store and online using crypto as collateral through its worldwide network of merchants. The platform aims to soon compete with prominent solutions like Worldpay, Visa, and Mastercard.
By leveraging Polkadot’s cross-chain technology, Collateral is set to also seamlessly connect with Ethereum, Bitcoin, and Binance Smart Chain by Q3 2021, with the possibility of additional blockchain compatibility over time
Decentralized Payment Gateway
The platform offers clients several special tools, allowing users to enjoy their crypto experience in total security under Collateral’s ecosystem.
Save
Collateral Save provides clients with a continuous flow of passive income by staking digital assets in smart contracts that are lent to borrowers, where up to 60% of APY rewards are earned. Overcollateralized crypto assets are used to ensure the security of all staking contracts. Furthermore, powered by chainlink, the platform’s oracles monitors all collateral crypto prices to ensure the collateral-to-value (CTV) level is maintained, protecting both borrowers and lenders.
Pay
Under Collateral pay, participants can pay for services by using the platform’s application or online. Users can simply scan a QR code and lock crypto as collateral. Then, merchants will receive funds directly from Collateral in fiat. The fiat will then be repaid at any given time to unlock the digital assets again.
Loan
Through loans, Collateral pay gives users the possibility to finance larger purchases, where sellers or merchants are not involved in the transaction. In general, these larger purchases tend to have the lowest CTV on the market. Hence, users simply have to select the amount they seek to borrow, then lock up the required cryptocurrency to receive funds in a native currency of their choice.
Merchant
The Polkadot-based protocol will provide merchants with a brand new market of crypto holders who once were unwilling to take the risk of losing potential upside. The platform will allow merchants to sell goods and services, and receive native currency payments safely within the Collateral pay ecosystem.
Govern
The blockchain platform will almost be entirely run by token holders who will have an active role in the protocol’s governance system and decision-making processes.
Collateral Pay Tokens ($COLL) and ($COLLG)
COLL is the utility token for the Collateral protocol while COLLG is the platform’s governance token. Both tokens work hand in hand, as users can earn COLLG tokens by staking COLL tokens. This will allow them to participate in the platform’s governance and influence Collateral Pay’s future.
Additionally, staking COLL also allows users to receive more COLL as token rewards from the product fees generated on the platform while liquid provider tokens can be staked to provide liquidity to the ecosystem and earn additional COLL.
There is currently 2,800,000 COLL circulating in the market, with a total supply of 50,000,000 and an initial market cap of USD$1,120,000.
Conclusion
Collateral Pay is a unique payment method, that relies on the efficiency of the Polkadot ecosystem to successfully bridge DeFi and the traditional financing sector. Through this decentralized algorithm, users are sure to gain upon every crypto transaction, offering potentially 100% satisfaction to all customers.
Upon its imminent expansion, Collateral Pay is sure to disrupt the DeFi space and further blockchain adoption worldwide. The platform’s key features ensure a smooth and secure blockchain experience for all participants.
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.
China’s national digital currency DCEP (Digital Currency Electronic Payment, DC/EP) will be built with Blockchain and Cryptographic technology. This revolutionary cryptocurrency could become the world’s first Central Bank Digital Currency (CBDC) as it is issued by the state bank People’s Bank of China (PBoC). The goal and objectives of the currency are to increase the circulation of the RMB and its international reach – with eventual hopes that the RMB will a global currency like the US Dollar. China has recently established an initiative to push forward Blockchain adoption, with the goal of beating competitors like Facebook Libra – a currency that Facebook CEO Mark Zuckerberg claims will become the next big FinTech innovation. China has made explicit that Facebook Libra poses a threat to the sovereignty of China, insisting that digital currencies should only be issued by governments and central banks. DCEP is not listed on cryptocurrency exchanges and will not be for speculation of value.
The significance of DCEP is that it’s designed as a replacement for the Reserve Money (M0) system, cutting back the cost and friction of bank transfers. It is suggested that DCEP will alleviate the risks of offline paper money transactions such as anonymous counterfeiting, money laundering and illegal financing. This is because regulators can better monitor digital currency transactions, which some consider will greatly improve financial and monetary supervision. DCEP can also reduce the costs involved in maintaining and recycling banknotes and coins.
Basically, DCEP is poised to become a digital version of the RMB.
Furthermore, the issuance of DCEP is conducive to promoting the internationalization of the RMB and reshaping the current cross-border payment system. This is because prior to the RMB Cross-Border Inter-Bank Payments System (CIPS) going live in early October 2015, RMB cross-border clearing and settlement was mainly done through CHIPS (Clearing House Interbank Payments System) or SWIFT (Society for Worldwide Interbank Financial Telecommunication). However, some consider that both the CHIPS and SWIFT systems have fatal flaws. Firstly, CHIPS is a US company. Whilst SWIFT, in particular, is seen as a cause for concern to the Chinese because due to its foothold in the international banking system, it is almost essential to use SWIFT for inter-bank transfers across countries. Thus whoever controls SWIFT’s data center will have access to information on almost every cross-border remittance, which some in China posit is the US. This is because whilst SWIFT claims to be a neutral international organization, 12 of the 25 directors are either from the US and her allies. Also, its transactional data were found to have been supplied to the US. Hence it is thought that China is being held back by the US via the SWIFT system, and so, in internationalizing the RMB- China requires its own worldwide banking system- i.e. DCEP.
Hence the Chinese consider that it is a requirement to form a new currency clearing network.
According to Chinese media, DCEP is seen as the “3rd Wave” aimed at the US.
A mandate to adopt Blockchain
China has established a countrywide initiative to push forward Blockchain Adoption. President Xi Jinping has mandated that the ‘country’s development of blockchain technology should be sped up ‘ on Oct 24th in front of the Political Bureau. This speech has also been echoed by Li Wei, head of the People’s Bank of China. In April of 2020, China launched the Blockchain Service Network to unify all the Blockchain related projects in the Nation.
China has adopted the “Blockchain, not Cryptocurrency”, whereby the benefits of Blockchain is highlighted. On the other hand, cryptocurrencies that are native to Blockchain are suppressed as Cryptocurrency Exchanges and ICOs are banned in the country.
History and development of DCEP
Development of DCEP started in 2014 with the establishment of a research institute dedicated to digital currencies and looking at how to improve the Chinese Yuan system with blockchain technology. However during 2014 to 2018, the development process slowed down, probably because the decentralised nature of Bitcoin or blockchain is incompatible with the nature of the Renminbi as a legal national currency. Things rapidly picked up towards the end of 2019 however and this was directly attributable to Facebook preparing to launch Libra, particularly as partner members of the Libra Association and the currencies which Libra was to be backed by had consciously rejected China. Hence, feeling the heat of the competition, China’s central bank felt immense pressure to urgently speed up in the global competition towards a digital currency.
Former Vice-chair of the PBoC’s National Council for Social Security Fund announced on 22nd June 2020 that China had already completed the backend infrastructure of DCEP.
Uses for DCEP
DCEP will be the only legal digital currency in China
DCEP is a currency created and sanctioned by the Chinese Government. It is not a 3rd party stable coin such as Tether’s cryptocurrency token “CNHT” which is also pegged to the RMB in a 1:1 ratio. DCEP is the only legal digital currency in China (cryptocurrencies such as Bitcoin are not legal tender in China).
Huang Qifan (Chairman of the China International Economic Exchange Center) said they have been working on DCEP for five to six years now and is fully confident it can be introduced as the country’s financial system. It’s currently being rolled out, with the People’s Bank of China issuing the currency. According to a speech by Huang at the China Finance 40 Forum, “DCEP can achieve real-time collection of data related to money creation, bookkeeping, etc, providing useful reference for the provision of money and the implementation of monetary policies.”
DCEP is not for speculation
China has made it explicitly clear that its National Digital Currency is not for speculation. Mu Changchun, Head of the People’s Bank of China digital currency institute made it as “a digital form of the yuan” and that “The currency is not for speculation. It is different to Bitcoin or stable tokens”. This is to the disappointment of the online community in China, where some netizens commented “So there will be no fun in it” on Sina.com.
It is also not possible to mine DCEP or stake on the DCEP network.
Cross-border payments with m-CBDC Bridge
China has joined forces to explore cross-border payments for digital currencies alongside Hong Kong, Thailand, the United Arab Emirates (UAE), and the Bank of International Settlements (BIS).
According to a joint statement in February 2021, the People’s Bank of China and the UAE’s central bank are taking part in the Multiple Central Bank Digital Currency (m-CBDC) Bridge project initiated by the Hong Kong Monetary Authority and Bank of Thailand in 2019.
The m-CBDC Bridge project will explore the capabilities of distributed ledger technology, through the development of a proof-of-concept prototype. The project ultimately aims to facilitate cross-border, multi-currency, real-time transactions around the clock.
This move aligns with China’s long-term ambition to use DCEP to boost the use of RMB in international payments. While the project is currently an alliance between just Beijing, Hong Kong, Bangkok, and Abu Dhabi, it is strongly supported by the BIS, an organisation owned by 63 central banks.
The announcement also comes mere weeks after China’s joint venture with SWIFT, the dominant network facilitating international payments between banks. The new entity, Finance Gateway Information Service, was registered in Beijing on January 16 with €10 million (US$12 million) as incorporation capital, according to the National Enterprise Credit Information Publicity System, the Chinese government’s enterprise credit information agency.
Special features of DCEP
DCEP is a Centralized Currency
DCEP is a digital currency that is run on a centralized private network – the Central Bank of China has complete access and control of the currency. This is a huge contrast to Bitcoin, which has an open decentralized network where there is no centralized leader. In the case with DCEP, the Central bank of China has the ability to create or destroy DCEP.
NFC Contact based payment
According to Official Sina Blockchain, DCEP will have NFC based payment options that don’t require devices to be online during the transfer. This will be poised as a direct replacement of paper money, as DCEP will be usable in areas without internet coverage. In addition, DCEP doesn’t require the mobile device to be bound to a bank account – meaning the unbanked population will also have access to the digital currency.
With DCEP’s tap payment feature people can transfer money simply by tapping two phones together, without the use of the Internet. So DCEP is not exactly like blockchain either, rather it is their own variant.
China Construction Bank launches DCEP wallet
On 29th August 2020, China Construction Bank (CCB) had a soft launch of the DCEP wallet. Users of one of China’s big four state-owned commercial banks found a DCEP wallet feature was available inside their mobile app. Users were even able to navigate to the digital yuan wallet and activate it through registering their mobile phone numbers.
Finally, users can send/receive digital currency to others by inputting their unique wallet ID or the phone number associated with the bank account.
CCB DCEP wallet
However, CCB has disabled the DCEP wallet feature from public access, but not before it gained huge attention. Users searching for this wallet now will only get an error message saying that the function is not yet officially available to the public.
Tencent to be a major partner of DCEP
Tencent’s Meituan Dianping has been in talks with the research wing of the PBoC on real-world uses for DCEP. Meituan Dianping boasts billions of dollars in daily transactions on their mobile app platform offering services such as food delivery (similar to UberEats), B&B bookings (similar to AirBnb), ride hailing services, bike sharing, grocery shopping and more. Basically for those in China, all your daily necessities can be met on the Meituan ecosystem.
The PBoC’s research wing is also in talks with another Tencent-backed company, Bilibili Inc. which provides video streaming services. So whilst the specifics of the partnership are yet to be finalised, it is likely that such cooperation is going to be huge for the mass use of DCEP in China.
According to Caijing magazine, the pilot institutions for DCEP will be the 4 major state-owned banks i.e. China Construction Bank, the Agricultural Bank of China, Bank of China and the Industrial and Commercial Bank of China. This initial deployment will serve as an official production test for the currency system, where the network and security will be validated. In the second phase, DCEP will be distributed to large fintech companies such as Tencent and Alibaba to be used in WeChat Pay and AliPay respectively.
DCEP will operate on a two-tiered system
The issuance and distribution of DCEP will be based on a two-tiered system.
The first tier would be transactions between the PBoC and intermediaries. These intermediaries would be financial institutions (e.g. the 4 major state-owned banks i.e. China Construction Bank, the Agricultural Bank of China, Bank of China and the Industrial and Commercial Bank of China) and non-financial institutions such as Alibaba, Tencent and UnionPay. Here, the PBoC would issue DCEP to the intermediaries.
The second tier would be between the above-mentioned intermediaries and participants in the retail market such as companies (e.g. retail stores) and individuals. In this tier, the intermediaries that have received DCEP will distribute it to retail participants so that it would circulate through the market e.g. through people purchasing items at stores etc.
The main difference in the issuance and distribution of DCEP compared to traditional cash however is the fact that DCEP would be transferred through electronic wallets, rather than bank accounts.
The central government has mandated that all merchants who accepted digital payments (such as Apple Pay, AliPay and WeChat) pay must accept DCEP. This will give DCEP a large nationwide acceptance in China, with every merchant obligated to participate or face a potential loss of their business license. This will make DCEP the most accepted digital currency in the world.
DCEP red packets to be launched for Chinese New Year
China’s DCEP app has launched a red packet gifting feature in time for the Chinese New Year on 22nd January 2023. The app will allow users to send the red packets i.e. “hongbao” containing DCEP to others. This is based on the Chinese New Year tradition of gifting lucky money during the annual festival. In fact, WeChat Pay and Alipay already have this feature for gifting CNY. However, it is the first time that e-CNY will be gifted in such a way, with hopes that this will further pave the way for the mass adoption of DCEP.
DCEP can be used to pay expressway tolls
On 28th December 2022, Chongqing Expressway Group announced it has completed the installation of equipment to accept DCEP for expressway tolls. From 30th December 2022, DCEP can be accepted as payment for tolls on the Chongqing Expressway. Users will need to download the e-CNY app and then simply present the payment QR code at the toll booth.
PBoC’s financial statistics reports now include DCEP/e-CNY
On 10th January 2023, the PBoC released its annual Financial Statistics Report for 2022. What is worth noting is that for the first time, the PBoC included statistics on DCEP/e-CNY. The Report states that as of the end of December 2022, the amount of digital currency in circulation was 13.61 billion yuan. This equates to around 0.13% of the total balance of yuan (13.61 trillion yuan) in circulation at the end of 2022.
Are people in China using DCEP?
According to a report on 28th December 2022, there has been over US$14 billion worth of DCEP transactions since its launch in 2020. Meanwhile, 261 million users have already set up an e-CNY wallet. However, this is considered low adoption since around 903.6 million people use mobile payments in China, according to a 2021 UnionPay report.
DCEP scams
Mere hours after DCEP has been announced, various (potentially scam) Chinese exchanges have listed IOUs or knock-offs clones of DCEP. It’s important to know that DCEP is currently only distributed to banks working with the PBoC and will not be available for the public. If you want to find out what are reputable exchanges, check out our top cryptocurrency exchanges guide. It is strongly recommended NOT to trade DCEP until it is officially released as there is no guarantee exchanges have access to the digital currency.
Knock-off clones of DCEP are already trading in (potentially) scam exchanges.
How to buy DCEP?
Currently, DCEP is only available to other banks working with the People’s Bank of China. This will eventually open up to the general public in 2020. There are currently no cryptocurrency exchanges that trade DCEP.
Implications of DCEP?
Is DCEP a challenge to the US monetary system?
The overwhelming view appears to be yes, both from the Chinese and the US perspective. According to statistics from the World Bank, 1.7 billion adults around the world use cash because they don’t have bank accounts. However, two-thirds of this population own a mobile phone, which can be used to make monetary transactions. This is what’s been happening in China, where mobile payments such as Alipay or WeChat Pay have more than 1.7 billion customers across China. Currently, the two online payment companies handle more payments monthly than Paypal did in the whole of 2017 (i.e. USD $451 billion). It’s very common in China to see street vendors accepting Alipay or WeChat pay.
Alipay and WeChat being accepted at an ATV rental shop
With the mobile wallet payment infrastructure in place, their cooperation with the PBoC could be the answer to distributing DCEP overseas. This would fit China’s “Belt and Road Initiative”, the aim of which is to build a new trade route connecting Asia with Europe and Africa. The idea is that with DCEP being used by mobile wallets, populations along the Belt and Road can be connected, bypassing existing financial infrastructures completely and giving an opportunity for the unbanked to pay for online purchases and build their savings.
In the US, the government does not see a demand for digital currencies. In a letter from the Chairman of the Federal Reserve, Jerome Powell, he took the view that many of the challenges a digital currency intends to solve do not apply to the US. In his view, the US payments landscape is already highly competitive and innovative, with plenty of digital payments options for consumers. Powell also commented, echoing the sentiments of those US lawmakers opposing Libra, that a digital payment where you would know and be able to track each and every payment would be unattractive for the US.
Whilst the House Committee on Financial Services also sees Libra as potentially raising national security concerns, observers consider the challenge from China is not being taken seriously. Because on the other hand, China is worried that Libra will reinforce the dominance of the US Dollar and is therefore working on fast-tracking the launch of DCEP. And it is likely that China will outrun the threat from Libra.
From a wider perspective, some take the view that DCEP can be used as a weapon against the US in an economic war. This is because as DCEP becomes accepted across the Belt and Road, China will have the power of total surveillance and control over the economic activity of potentially half the world’s population. DCEP will allow China to track everyone’s spending and transactions, and can seize or lock customers’ digital assets in their mobile wallets. We’ve already seen this in China, where together with its “social credit system”, millions of individuals have already been barred from purchasing airline tickets using their mobile wallets.
Appearance on Chinese television debate show “Tiger Talk”
On 29th August 2020, I appeared on China’s Phoenix Television show “Tiger Talk” (一虎一席談). Tiger Talk is one of Phoenix TV’s longest-running shows, each week they feature a debate on a major societal issue or event, and would invite experts, academics and guests to participate in the discussion. I was invited by Phoenix Television as an overseas analyst to discuss the topic of the week, namely, “DC/EP: China’s release of digital currency, will it shake the US Dollar’s hegemony?”. You can watch the episode here.
Guest appearance on Tiger Talk
Implications of DCEP on Bitcoin and cryptocurrencies
In the first instance, it should always be borne in mind that DCEP and Bitcoin/cryptocurrencies are vastly different. Key differences are that DCEP does not necessarily use blockchain technology and that it is a centralised currency under the control of a centralised authority. Learn more about the differences between DCEP, Libra, Bitcoin and Cash.
However, the large scale promotion of DCEP on national television in August 2020 is certainly bracing and preparing Chinese citizens for a digital version of the RMB. The gradual rollout of DCEP will also get the average citizen accustomed to the actual usage of digital currencies.
As a result, many people are excitedly speculating on the possibility of a bridge between DCEP and various existing blockchain projects- with some projects proclaiming they will be the first project to launch on DCEP. However it must be borne in mind that we do not know the full technical details of DCEP, so we do not know how this bridge between blockchain and DCEP will work, if at all. Also, the fact is that China is currently very hostile towards cryptocurrencies, this is mostly due to a number of cryptocurrency scams- such as Plus Token. As a result, the Chinese government have closed several bank accounts found to be involved in cryptocurrency transfers and banned all ICOs, several major cryptocurrency exchanges such as Binance and OKEx and some Over the Counter desks. Hence a lot of cryptocurrency circles and discussions occur underground, such as in private WeChat groups.
In a confusing twist, however, the CCP’s official media outlets 参考消息, Xinhua and CCTV have been pushing out headlines that crypto assets are the best-performing asset year to date. Dovey Wan, Founding Partner of Primitive Ventures has observed that the real intent behind this media push is difficult to interpret, but so far the Chinese cryptocurrency community see this as a signal that crypto has reached its top. Meanwhile, on the Western front on Twitter, people have been seeing this as a bull signal. Currently, without any further moves or news in China about DCEP or on the cryptocurrency front, we can only wait and see what China’s next move will be.
Hmm this is an interesting propaganda vibe from CCP’s official media outlets as “参考消息”, Xinhua and CCTV2
the headline “cryptoasset is the best performing asset YTD” was featured on all avenues, news paper, online media and TV
Will DeFi push governments to finally adopt CBDCs?
Decentralised Finance (DeFi) can be considered the cryptocurrency and blockchain star of 2020, having revived the cryptocurrency market and bringing some much-needed revival and positivity. But what is DeFi? In short, DeFi attempts to bring traditional banking to developing industries, but with a twist: it would be open-source, decentralised, cheap and will cut out the middlemen. (Xanax)
So what can central banks and government do to maintain their dominant status quo whilst benefitting from the technology that DeFi can bring? An answer could be to create a CBDC. In a Forbes article, the author suggests that CBDC would be a positive move for governments since it tokenises money whilst allowing users to enjoy the advantages of cheaper, faster transactions.
The article also touches upon our coverage of DCEP and discusses China’s progress in testing DCEP contrasted with the progress of introducing a CBDC in the US. It suggests that governments and institutions, however, will need to be quick to catch up as new DeFi solutions in payments, mortgage, insurance etc. are being created weekly, and this legion of fintech innovators are growing. These innovators challenge the status quo, and with the mounting advantages of DeFi, there may soon be a real contender vying for the attention of citizen-consumers.
FAQs
Is DCEP backed by Gold?
The simple answer is u0022Nou0022. On a recent episode of Kitco News, journalist Max Kaiser claimed that China will launch a gold-backed cryptocurrency, with the intention of destroying the USD as a reserve currency. He added that China has already amassed as much as 20,000 tons of gold. However this is mere speculation – China has no plans to return to the Gold Standard nor issue gold-backed cryptocurrencies.
Will DCEP be interoperable with other Cryptocurrencies
There are many plans to build gateways that allow the swapping of DCEP to other cryptocurrencies. Projects such as Algorand have stated they want to support DCEP and build possible bridges to swap these currencies. However, as the technical details of DCEP have not been fully revealed, such bridges have not been built yet.
Who can issue e-CNY?
There are 7 Chinese commercial banks that can provide e-CNY. They are: ICBC, Agricultural Bank of China, Postal Savings Bank of China China Construction Bank, Bank of China, Bank of Communications, and China Merchant’s Bank. There are also 2 online banks that can provide e-CNY i.e. WeBank (WeChat Pay) and MyBank (Alipay).
Which Chinese Cities can sign up and use the e-CNY app?
Currently, there are 12 cities and areas in China which can sign up and use the e-CNY app. They are Shenzhen, Suzhou, Beijing Xiong’an, Chengdu, Shanghai, Hainan, Xi’an, Changsha, Dalian, Qingdao, and Zhangjiakou.
Can tourists or non- Chinese locals use DCEP?
No, DCEP is not fully rolled out yet and is only available in select cities in China.
Is China using DCEP?
According to a report on 28th December 2022, there have been over US$14 billion in transactions since the launch of DCEP in 2020 and October 2022. Meanwhile, 261 million users have already set up an e-CNY wallet. However, this is considered low adoption since, according to a 2021 UnionPay report, around 903.6 million people use mobile payments in China.
When will China officially launch DCEP e-CNY?
Whilst there is ongoing DCEP/e-CNY testing on in increasing scale, there is no official announcement as to when and how China will fully roll out DCEP/e-CNY.
Disclaimer: Cryptocurrency trading involves significant risks and may result in the loss of your capital. You should carefully consider whether trading cryptocurrencies is right for you in light of your financial condition and ability to bear financial risks. Cryptocurrency prices are highly volatile and can fluctuate widely in a short period of time. As such, trading cryptocurrencies may not be suitable for everyone. Additionally, storing cryptocurrencies on a centralized exchange carries inherent risks, including the potential for loss due to hacking, exchange collapse, or other security breaches. We strongly advise that you seek independent professional advice before engaging in any cryptocurrency trading activities and carefully consider the security measures in place when choosing or storing your cryptocurrencies on a cryptocurrency exchange.
Ethereum 2.0 is coming soon and the question everyone wants to know is “will it cause crypto prices to crash?” This is particularly as markets around the globe are not looking great, and that includes the crypto industry. Everything has been bleeding heavily for months without a sign of stopping, as central banks keep hiking rates, global supply chains struggle, and spending and investment dry up. Stagflation is a very real possibility, and there is no telling how long it will take for us to cool down the overheated markets that have been going only up since the last recession more than ten years ago.
The aforementioned notwithstanding, active development in the blockchain space continues to march forward. Although investments might drop significantly, many builders keep on building no matter the state of the markets. As Ethereum is steadily approaching the long-awaited transition from proof-of-work (PoW) to proof-of-stake (PoS), dubbed The Merge, it might be interesting to think about potential impacts of The Merge on the crypto market prices, especially in the context of a potential extended bear market.
In short, The Merge will result in Eth2.0’s Beacon chain (the coordination mechanism of the new network) merging with the current Ethereum mainnet, signifying the move to a fully PoS chain. To secure the network, enormous amounts of ETH will be staked in addition to the ETH already staked in the Beacon chain, making all of this locked ETH illiquid. Combined with the EIP-1559 upgrade, which now burns 70-80% of the fees, The Merge is expected to cause the equivalent of 3 bitcoin halvenings, dropping Ethereum’s inflation rate to 0.43% and locking up a lot of ETH, potentially reducing sell pressure by up to 90%. In addition, the PoS mechanism will reduce Ethereum’s energy consumption by up to 99.95%.
So all is looking great for Ethereum and projects building on top of it, right? Possibly. However, there is still a decent chance that, given the current market conditions, ETH’s price pump might be short-lived, and would continue to drop, bringing down a lot of other projects with it.
The Potential Impacts of The Merge
There are two possible scenarios to look at when discussing the downside impact of The Merge on crypto prices:
The external effect would be caused by Ethereum sucking out liquidity from other PoS alt-L1s and the projects built on top of them (especially if they’re EVM-compatible), as one of the more critical selling points compared to Ethereum is environmental sustainability.
Beacon chain staked ETH unlocks, extended bear market, and poor treasury management of Ethereum-backed projects could see more capitulation events as HODLers and projects sell off their ETH to stay afloat as new investments dry up and stagflation looms.
1. Ethereum Sucks Liquidity From Other PoS alt-L1’s
By offering lower gas fees, fast transactions, and relatively high throughput at the expense of decentralization and economic sustainability, many PoS chains have attracted developers, investors, and NFT ecosystems to their networks away from Ethereum. Ethereum’s high demand (=high fees), poor L1 scalability, and the concerning PoW mechanism have severely limited its growth. (https://rpdrlatino.com) Understandably, regular people simply do not want to pay exorbitant fees when minting and trading NFTs, and developing inaccessible dApps on a network that is supposedly destroying trees and warming up the planet.
The environmental argument will be completely invalid after the merge. Coupled with the enormous innovations in Ethereum’s L2 ecosystem, which have already reduced transaction fees to sub-$1 with no signs of stopping, Ethereum is set to once again become the most sought-after smart contract development platform. As post-Merge buy pressure of ETH increases and scalability improves, alt-L1’s could struggle to offer any significant unique selling points, making new projects opt to build on top of the most secure, established and decentralized smart contract chain out there.
As more and more people flock to Ethereum, established projects might also decide to migrate to the platform with the most demand and upside potential, effectively sucking out liquidity from other chains, and leaving them dry with evaporated treasuries, limited runway, and reduced demand. The strategy of subsidizing transaction fees during a bull market when funds are plentiful will likely not work when no new investments are coming in during a bear market, and an exodus of users is reducing demand and network revenues.
Of course, there is plenty of room for growth in this space, and projects existing on other chains might not find it too beneficial to move to Ethereum even though short-term liquidity issues might prove challenging.
2. Beacon Chain ETH Unlocks in Extended Bear Market Cause Mass Capitulation
The Merge will unlock a lot of ETH, resulting in a potential aggressive selling spree that might have trickle-down effects on a lot of other coins, especially those that have tight correlation with their ETH pair, are ERC-20 tokens, or have been sitting on ETH treasuries to fund their development. A lot more downside risk due to a selloff is also a very real possibility for ETH and other coins simply due to bad timing (i.e. bear market – with recession slowly creeping into our daily lives due to central banks raising interest rates, supply chain issues, energy crises etc.), the unlocked ETH might serve as a critical lifeline for those who had confidently staked their ETH during the bull market.
During the bear market, investments will be scarce, and projects that during the bull market had made the decision to not convert their treasury ETH to stablecoins are now seeing their wallets drop in value significantly, forcing them to capitulate by selling at low prices to cover their expenses.
However, it is important to note that the ETH unlocked from the ETH staked on the Beacon chain will not be immediately available right after The Merge. Rather, this feature – EIP-4895: “Beacon chain push withdrawals as operations”, will be enabled during the Shanghai upgrade. It will probably be deployed much later after The Merge, with estimates ranging from a month to 6 months. This means that any amount of potential sell-off of unlocked ETH would come with a significant delay post-Merge, at which point it’s impossible to predict where the market might be in 6-12 months and how it will behave, with contradicting bullish and bearish narratives clashing against one another in an attempt to drive price in either direction.
This option does seem a bit far-fetched, however, and no one knows how much more pain we will have to suffer before the momentum shifts towards the upside, so it’s best to be prepared for both the upside and downside, and not fall prey to only bullish narratives.
Conclusion
As outlined in the two main points, post-Merge many alt-L1 coins could face a risk of crashing even further due to risks associated with reduced liquidity in a bear market (for non-Ethereum coins), liquidity that might flow towards the Ethereum ecosystem due to its established security, track record, and newly acquired environmental sustainability.
On the other hand, ETH and other ERC-20 tokens living on Ethereum also run a risk of crashing, if the post-Merge ETH unlock from the Beacon chain results in a mass sell-off of ETH, which could crash other coins and project treasuries.
As this will be the first time the crypto industry experiences a recession or a stagflation, there is a lot of uncertainty about how low the market could go and, most importantly, how long it could stay so low. This is uncharted territory, so making comparisons with past cycles might not be particularly useful. Nations and companies will keep tightening their belts, and spending will significantly decrease across the board, leaving risk-on markets such as crypto vulnerable to a continued mass exodus to safer investments.
Blockchain and play-to-earn games are rapidly becoming some of the most lucrative aspects of the crypto world. Players of these games get rewarded for partaking in their favorite activities while contributing to the platform’s success story. For instance, Sky Mavis – the team behind Axie Infinity – had generated over $400 million from the game by August 2021. According to Newswagg’s research, the crypto gaming industry’s revenue hit $321 million in 2020.
Notwithstanding the play-to-earn industry’s impressive numbers, there is an ongoing shift from play-to-earn to the new move-to-earn. Sometimes considered an upgrade to the former, move-to-earn also offers rewards to players with more focus on fitness. Move-to-earn games help improve player well-being by introducing physical movement and general fitness into gameplay. The move-to-earn concept is fantastic for people who are more fitness-focused and are not as ardent as the average video gamer.
One such example is dotmoovs ($MOOV), where active participants can easily monetize their time and gameplay. To take part, players only need a smartphone camera to display their sports skills and compete with other players.
What is dotmoovs ($MOOV)?
dotmoovs is a blockchain-based competitive sports platform in the metaverse. It is a state-of-the-art artificial intelligence system that analyzes videos of players performing sporting activities and rewards winners using its proprietary MOOV tokens.
dotmoovs has incorporated blockchain tech, decentralized finance (DeFi), and AI technology into one platform through its peer-to-peer and AI-driven features. In the dotmoovs metaverse, two people can compete regardless of location, receive unbiased judgment, and earn rewards. The platform decides scores using an AI-driven arbitration engine that detects the positions of each player’s body and limbs, along with a scoring algorithm that measures the player’s skill. According to a recent metaverse ranking, dotmoovs is one of 10 metaverse platforms most likely to explode in 2022. The list also features popular names like Decentraland ($MANA) and Axie Infinity ($AXS).
The More You Move, The More You Earn
dotmoovs features a freestyle football section that is already live. Players must use the platform’s mobile application to capture physical body movements. The application uses advanced computer vision algorithms and AI-driven limb tracking to accurately capture and store movements. The player with the highest score wins the round and receives $MOOV tokens and other in-game rewards.
One of the main attractions of dotmoovs is its AI-powered and unbiased scoring system. In many cases, scores and ratings are usually prone to subjective appraisals and human biases. However, each dotmoovs player gets a fair chance to participate and receive objective scores and judgment. The more skilful a player is, the more their earning power.
How Does dotmoovs Scoring Work?
Participants trying out the freestyle football section should note the following factors considered for scoring players:
Number of ball juggles for different body parts according to difficulty
Creativity applied to ball juggles
Speed
Rhythm
Ball height in each juggle
Originality (compared to previous attempts)
Absence of handball or ground touch fouls
dotmoovs Growth and Adoption for Blockchain
The dotmoovs platform contributes to the general growth and development of the blockchain and crypto ecosystem via its AI-based infrastructure. The blockchain industry is currently enjoying increased adoption, especially with decentralized finance and non-fungible tokens (NFT). dotmoovs is pooling all parts of the ecosystem for its unique product, and crowning its creation with artificial intelligence. The platform is now set to partake in the global NFT market that generated $23 billion in trading volume in 2021.
Another major dotmoovs contribution is its attraction to the sports community. Through the platform, sports lovers, players and spectators alike, can join the blockchain ecosystem and earn on dotmoovs by simply participating in their preferred and natural habitat.
Several factors serve as catalysts to increased adoption of move-to-earn platforms. For instance, people now have a stronger need for physical activities as worldwide lockdowns are ending. As winter wraps up and the weather becomes warmer, dotmoovs provides the perfect platform for users to get fit, enjoy the weather, and also earn.
Investors are also recognizing the potential impact of move-to-earn platforms and are buying in. In the past few months, a few projects have raised funds from investors who have identified these trends and want a piece of the action before adoption skyrockets.
Another factor in favor of dotmoovs and move-to-earn is the low entry barrier. Users find move-to-earn platforms easier to navigate than play-to-earn for multiple reasons. Firstly, effective participation on play-to-earn platforms requires knowledge of the game. There is also the financial barrier as many of these games charge an entry or starting fee. On dotmoovs, all you need is to know how to move.
$MOOV Utility Token
The $MOOV token is dotmoovs’ native utility asset. The platform uses this asset to create an environment free from currency value constraints, democratizing access by providing all players with a level playing field. All dotmoovs transactions require $MOOV tokens.
$MOOV Token Use Cases
Players can use $MOOV to:
Buy dotmoovs NFTs
Players who own dotmoovs NFTs can participate in challenges to earn $MOOV and rent the NFTs to other players. Players can also earn $MOOV tokens on challenges won with rented NFTs.
Access-Challenge Mode
Users need $MOOV tokens to play in the platform’s Challenge Mode. Players who win 1 vs. 1 games or tournament challenges will also earn more tokens.
Stake In Sports Mining
Users can multiply their tokens and earn rewardsby staking $MOOV using the dotmoovs Sports Mining staking feature.
dotmoovs is set to capture interested sportsmen and sportswomen by introducing them to the growing blockchain ecosystem. Since people only need a camera to participate, players all over the world can enjoy simple dancing and sporting activities and easily earn while at it.
Dotmoovs exclusive models
Dotmoovs creates exclusive models for their app, and have so far already created models for names such as Snoop Dogg, Floyd Mayweather, and Neymar. Now, Dotmoovs will be partnering with Leandro Lopes, an internationally successful handmade footwear and apparel designer from Portugal, to design an exclusive NFT sneaker for use in the app.
Dance to Earn
dootmoovs has recently launched their Dance to Earn feature on their app. Players can have a maximum of 3 free practices of the dance moves per day to get themselves ready for peer-to-peer and challenge mode! In these modes, you can either challenge your friends or find a random challenger across the globe to see who is the better dancer. To join, you will need to choose how much $MOOV you would like to invest (up to 500 $MOOV per challenge). Win the challenge and you will win more $MOOV.
It is anticipated that more types of dance challenges would be available soon, as well as a tournament mode.
dotmoovs is a sports application with incredible competitions held in the metaverse. Currently, there are football competitions with dance competitions in the works.
Where can I download dotmoovs?
The dotmoovs application is available for download on both the Google Play Store or the Apple App Store
What is the dootmoovs token?
dotmoovs has its own native token- $MOOV. All transactions inside the app happen in $MOOV. For example, you would need $MOOV to participate in peer-to-peer or tournament challenges. Winners of these challenges can earn more $MOOV.
Can you rent NFTs in dotmoovs?
dotmoovs has an NFT rental program so you can try out and participate in dotmoovs with minimal initial cost.
Axie Infinity ($AXS) is probably the first game everyone thinks of when talking about crypto gaming or GameFi. This is for a good reason too, it is hugely popular with millions of players worldwide and is well known for helping many earn a living (whilst playing the game) during the Covid-19 lockdowns. Recently, however, the game has been plagued by problems such as a multi-million dollar hack, and reports about shady practices by some Axie players. In this article, we look at the rise and fall(?) of Axie Infinity and how it can be a valuable case study for the future of other play to earn crypto games.
What is Axie Infinity ($AXS)?
Axie Infinity ($AXS) is a popular play-to-earn NFT blockchain-based game where players can earn by leveraging gameplay skills and contributing to the ecosystem. Partially inspired by the popular Pokémon video game series, Axie Infinity allows players to pit monsters called Axies against each other in battles. Gamers can also collect and raise their monster pets, and build land-based kingdoms for the pets as they progress through the game.
Axie Infinity is easily one of the most popular games in the cryptocurrency and blockchain sector. Launched by Vietnamese game-maker Sky Mavis, Axie Infinity concluded a $7.5 million funding round in May 2021, with Reddit co-founder Alexis Ohanian and billionaire Mark Cuban as investors. According to Bloomberg, the number of daily active users on Axie Infinity jumped from 30,000 to 1 million between April and August last year. Furthermore, from April 2018 to July 1st, 2021, Sky Mavis generated $21 million from Axie Infinity; by the end of August in the same year, that number jumped more than 2,200% to $485 million.
Yet despite its meteoric rise, Axie Infinity has seen a dramatic decline in daily revenue and general interest since its November 2021 peak, when its revenues reached an all-time high of $165 USD. To better understand the unraveling of one of the most popular blockchain games, let’s take a look at the recent issues and challenges Axie has faced in the past months.
Check out our video where we analyse the crypto gaming trend and where we think it’s headed.
My honest take on crypto gaming
Some Major Problems and Criticisms of Axie Infinity
The Axie Infinity universe has had its fair share of criticism. One of the most significant issues is the problematically high barrier of entry. Although Axie Infinity is free to download, players need at least three Axies to begin with, each costing a minimum of $29. This can be a costly initial investment for some and would deter them from even starting the game in the first place.
The expensive initial cost has created active Discord and Telegram groups where prospective players are consistently on the hunt for sponsors to help get their feet in the door. Unfortunately, sponsors sometimes make inappropriate requests before assisting players. Last year, Axie Infinity reacted to reports of sponsors requesting nude photos from players.
Other controversial practices, such as the “Scholarship” practice emerged whereby gamers lacking the initial capital (known as “Scholars”) would borrow Axies from “Managers” in return for a significant amount of in-game earnings. In some cases the split was as high as 50:50 between the Scholar and the Manager. In the Philippines, where it was well-known that locals quit their jobs in favour of playing Axie professionally due to its high returns, the practice was very widespread. During Axie’s heyday in 2021, many scholarship “guilds” were formed, some of which had over 3,000 players playing multiple games for their Managers. These Managers have even gone so far as to say that they may remove peoples’ scholarships if the scholars did not play to their satisfaction. Considering the average wage of a Filipino employee was only US$3,218, critics have accused Axie Infinity’s business model to “digital serfdom”– modern exploitation in the digital space.
In response to accusations of controversial practices by some Axie Infinity players, Sky Mavis Co-founder and Chief Operating Officer Aleksander Leonard Larsen likened Axie Infinity to a digital nation, suggesting that there are criminals in any society. The COO admitted that the issue is an internal concern for the Company and that the platform has banned “several thousand” accounts so far.
Revenue Plunge
Axie Infinity’s revenue was already dropping since its peak in November 2021. According to an image from Token Terminal, Axie Infinity began October with $6 million in daily revenue. Between October 4th and early December, revenue spiked up to $10 million but also plunged to nearly $2 million. However, since December 12th, there has been a steady decline. In fact, Axie has not crossed $2 million since mid-December, even recording less than $21,000 as recently as March 30th. According to a recent report, Axie plunged 40% in September alone.
Axie Infinity’s Ronin Network Hack
By far, the biggest issue Axie has faced in its 4-year history is a US$625 million hack that took place on 23 March 2022. According to an official Substack post, hackers compromised Sky Mavis’ Ronin Network validator nodes and Axie DAO validators, which are used to power the game. As a result the hackers successfully made away with 25.5 million USDC and 173,600 Ether (ETH). The unknown hackers depleted funds from the Ronin bridge in two transactions.
Ronin explained that the chain currently has nine validator nodes to prevent illicit transactions, and requires five validatory signatures to recognize all withdrawals or deposits. In November, Ronin let Sky Mavis sign transactions to help with high demand from new Axie players. Although this only lasted till December, the allowlist access remained active, and the attacker was able to access Sky Mavis systems to get a signature from the Axie DAO validator through Ronin’s gas-free RPC node. By doing so, the hacker was able to gain validation access over this highly centralized network, controlling the majority of nodes, and thus, the decision-making power.
Analytics firm Chainalysis is currently helping Sky Mavis to track the stolen funds and has said the funds are still in the hacker’s wallet. Ronin has also said all stakeholders are now trying to ensure that users don’t lose any funds.
The Substack post also specifies several actions taken to curb further loss. For instance, withdrawal or deposit recognition now requires eight signatures instead of five. There is also a temporary pause on the Ronin Bridge in addition to Binance disabling their bridge to and from Ronin. The Katana DEX was also immediately suspended. Unfortunately, none of that has stopped prices of their AXS token from falling 25% since the hack occured.
Axie Infinity’s Future: is this the end?
Even with these evident drawbacks, several members of the gaming community believe that Axie Infinity has a bright future ahead of it. Some analysts think that the platform’s extensive and ever-increasing community can only spell long-term progress. Axie Infinity has enjoyed large-scale popularity and increased AXS token prices such that many believe that there is no worthy competitor. However, the recent hack might sway public opinions very fast.
Although Axie’s revenue has consistently dropped since late last year, The plunge has been even steeper in the last few days. Token Terminal data shows that Axie pulled in just $184,500 on March 1st, from $2.1 million on January 19th. Revenue on March 25th was less than $9,000.
Prices of the project’s native $AXS token have also taken a tumble, with prices reaching an all time high of $164.90 on 6th November 2021, and now down to around $38 in late April 2022. Check here for the latest prices for $AXS and data provided by CoinGecko.
Several competitors, such as Crypto Kitties, Decentraland and MetaGods, have been trying to give Axie Infinity a good run for its money. Now is finally the right time for these alternative play-to-earn ecosystems to steal Axie’s disgruntled customers. Popular options can leverage Axie Infinity’s current downtime to revamp their existing offerings or introduce new ones, making the features attractive enough for Axie players to cross over. In what may end up as the likely outcome, players may also be satisfied enough to consider keeping and using accounts across most of these popular play-to-earn games.
With all the fuss and mistrust currently circulating within the gamefi space, it might also be a good time for new games to launch, or at least begin to whet gamers’ appetites. Possible strategies could include specific advertisements targeted at security, more gaming options, more accessible play-to-earn services, and immersive gameplay that can rival Axie Infinity. If competitors offer little to no financial entry barriers, Axie Infinity could have a very challenging time getting back on its feet after it eventually opens the Ronin bridge.
Conclusion
Currently, the Ronin bridge remains closed, with all deposits and withdrawals halted pending a full investigation into the hack. It is expected that it may be another few weeks before the Ronin bridge is operational again. Most importantly, the team behind Axie Infinity has promised affected users that they will recover and reimburse the stolen funds. Despite this setback, Axie Infinity still has over 600,000 active daily users, demonstrating its popularity, and the game itself is not going away anytime soon.
On September 12th, 2021, Cardano’s Alonzo hard fork upgrade went live on the mainnet. As a result, users can now create and deploy smart contracts on the Cardano blockchain.
For an overview of what is Cardano, its features, and advantages and disadvantages, check out our video below:
In an official blog post by the development company behind Cardano, IOHK disclosed that the Alonzo hard fork would enable new capabilities through the integration of Plutus scripts on the blockchain. Plutus is a purpose-built smart contract development language and execution platform using the functional programming language Haskell.
The integration of Plutus will enable a host of new use cases for decentralized finance (DeFi) and decentralized apps (dApps) on the Cardano network. Interestingly, during my research on blockchain advancements, I came across a guide on 온라인 슬롯, which detailed the benefits of integrating blockchain technology into online gambling. This integration will also allow dApps to be built within the ecosystem and facilitate more complex computational programs. This is expected to bring Cardano to the same level as other smart contract-enabled blockchains such as Ethereum, while facilitating energy and cost-effective blockchain operations.
The update is an important development in Cardano’s roadmap, which is divided into five stages — Byron, Shelley, Goguen, Basho, and Voltaire. The Byron era focused on development, while the Shelley era introduced staking and helped Cardano transition from a centralized federated system to a fully delegated proof-of-stake system. Cardano’s entry into the Goguen era is marked by the launch of its smart contracts.
The official website of Cardano states that the Goguen era will also feature the addition of a multi-currency ledger, enabling users to create new native tokens. This will lead to the creation of fungible and non-fungible tokens (NFTs), as well as the creation of new cryptocurrencies on Cardano and tokenization of many types of digital and physical assets.
Cardano creator Charles Hoskinson described the Alonzo upgrade as a game-changing moment for the platform. “This upgrade is the culmination of six years of incredibly hard work with some of the brightest minds in blockchain and beyond,” he said. “The focus is now on improving the platform further, and ensuring that Cardano is adopted by corporations and governments. With this launch, commercialisation is as much in the hands of the community as it is the system architects, and they are already delivering – in less than 24 hours, over 100 smart contracts have already been run on the network.”
Cardano Announces Collaboration with Chainlink
Cardano hosted a hybrid-virtual summit across all continents on September 25th & 26th, 2021. During the 2-day event, IOHK announced their plans to integrate with Chainlink Labs to obtain real-time market data that will help developers build smart contracts for DeFi applications on the network.
Access to real-world databases will be supplied through Chainlink’s decentralized ‘oracle’ networks which provide tamper-proof, high-quality external data to blockchains. This collaboration between IOHK and Chainlink Labs will give access to a wealth of secure data, helping DeFi achieve its promise of building a less costly and more inclusive global economic system.
Initially, information feeds for real-time market prices will be linked to Cardano. Over time, additional data feeds on sports and weather will follow, for use with insurance, gaming, and NFTs.
Hydra: Cardano’s Layer 2 Scalability Solution
During the Cardano Summit 2021, Cardano founder Charles Hoskinson revealed that a new venture called “Hydra” is in development on the new Alonzo hard fork to improve aspects of scalability and storage.
David Orr of IOHK explained that although there are plans to improve Cardano fees in order to balance user costs, stake pool operator rewards and network security, the fees likely won’t be low enough for “real world use cases,” which is what Hydra intends to address.
Hydra is a layer-2 scalability solution that seeks to address these concerns by providing more efficient means of processing transaction off-chain for a set of users while using the main chain as a secure settlement layer. Orr also says that Hydra can lower the barrier to entry for customers wanting to build things on the Cardano network like wallets or applications.
According to a blog post by IOHK, Hydra could make transactions on Cardano’s blockchain take less than one second to complete.
“Terms like ‘one million TPS (transactions per second)’ have been used before. It is a bold number, and while this remains as an aspirational target, the ultimate goal of any system is the flexibility to grow capability with demand,” says Orr. “ In principle, by adding increasing numbers of Hydra heads to the system, arbitrarily high throughput can be achieved by the system as a whole.”
Cardano Introduces the Plutus dAppStore
Cardano has revealed that it’s building a storefront for certified decentralized applications (dApps).
In a blog post, IOHK published a preview of its new “integrated approach” to the development of the Cardano ecosystem ahead of Cardano Summit 2021. The centerpiece of the announcement is the upcoming launch of the Plutus dAppStore, a storefront where developers can upload their decentralized applications running on Cardano and make them easier for discovery.
According to Shruti Appiah, head of product and smart contracts at Cardano, the dAppStore addresses two barriers to entry. The first is that there is currently no formal discovery process for dApps running on the network, and the second is that there is no consolidated view of all dApps available in a given ecosystem for end-users.
The Plutus dAppStore will allow Cardano users to explore the entire ecosystem of dApps running on the protocol through a single “storefront” or web page.
In addition to the dAppStore, IOHK is also launching a formal certification program for third-party decentralized applications on Cardano. The program’s goal is to give users assurance about the integrity of the dApps they use through automated logic checks, manual smart contract auditing, and formal verification.
According to Appiah, the dAppStore will provide a “democratized environment for developers to publish their dApps without facing censorship,” meaning both certified and uncertified applications will be listed on the storefront, as the site intends not to act as a gatekeeper but rather provide “a platform for transparent user assessment.”
Climate Restoration Partnership with Veritree
Cardano has teamed up with global land restoration and tree planting verification company Veritree to store reforestation verification records on Cardano’s blockchain.
Going forward, organizations using Veritree’s platform will be provided with an immutable, transparent and auditable blockchain based report on all of Veritree’s afforestation and reforestation efforts – using a fraction of the carbon footprint of other blockchains.
To celebrate this, Cardano and Veritree launched The First Global Cardano Impact Challenge, inviting its global community to make donations to Veritree using Cardano’s native token ADA. Every ADA donated equals one tree planted and these donations will be used to plant the world’s first Cardano Forest. Once at least 15 ADA have been pledged to the campaign, donors will receive 15 Veritree tokens or more in return for their donations. These tokens are redeemable for a tree planting certificate with details of all actual trees once these have been planted next year.
Within 24 hours of the announcement, the Initial Tree Offering (ITO) has already collected enough donations to plant more than 150,000 trees.
Partnership with COTI to Issue Djed Stablecoin
A new stablecoin is arriving on the Cardano blockchain as Cardano founder, Charles Hoskinson announced fintech company, COTI as its partner to be the official issuer of Djed, a new DeFi-focused stablecoin for the Cardano network. The announcement was made at the 2021 Cardano summit event alongside COTI CEO, Shahaf Bar-Geffen.
Djed will be used on the Cardano blockchain as a tool for decentralized finance (DeFi) operations and avoid transaction fees. It will be based on an algorithmic design using smart contracts to ensure price stability and providing an instrument for DeFi transactions. The stablecoin is designed for paying transaction fees on the Cardano network in order to avoid “volatile and exorbitant gas fees” and make transaction costs “more predictable.”
According to Djed’s research paper, its stablecoin protocol will behave like an “autonomous bank that buys and sells stablecoins for a price in a range that is pegged to a target price.” The stablecoin will operate by maintaining a reserve of base coins while minting and burning various other stable assets and reserve coins.
Telecom Integration with Dish Network
Cardano has announced that it is partnering with a Fortune 250 company, Dish Network, a major American satellite TV and wireless service provider. The announcement was made by Chris Ergen, the head of Innovation at Dish.
Chris Ergen made this announcement at the Cardano Summit 2021 with Charles Hoskinson. Hoskinson stated that the partnership will help integrate Dish’s telecom business into the Cardano blockchain so as to help provide digital identity services to Dish customers. He further stated, “Ultimately, the collaboration is going to be both innovative, safe and suitable for the customers and regulators of this industry.”
The partnership aims at bringing the telecoms industry to the blockchain space. It’s the first collaboration of its kind, unlocking significant value for Dish’s customers while growing adoption for Cardano.
NFT Marketplace with eSports Platform Rival
Cardano has partnered with leading esports and gaming platform Rival to develop agnostic NFT marketplaces, fan rewards, and more for Rival and their partners. The partnership will see Cardano facilitate the ability to create and distribute NFTs, the redemption of NFTs for physical goods, and marketplace-based royalties within the Rival platform, whose clients include the National Football League’s (NFL) Seattle Seahawks, National Basketball Association’s (NBA) Detroit Pistons, and Aston Villa and Watford of the English Premier League (EPL).
Matt Virtue, CEO of Rival, said, “Our partnership with Cardano marks Rival’s entry into blockchain and is a significant step in our evolution as an enterprise platform solution to unlock the unlimited potential in gaming and esports. Rival’s integration with Cardano will help us maximize and personalize the entire Rival experience – for both gamers and partners.”
Cardano Summit 2021
Cardano announced several other strategic partnerships and development plans during the Cardano Summit 2021.
Cardano confirmed support for AID:tech, which provides identity based solutions for finance, payments and insurance through blockchain. The collaboration aims to develop verifiable credentials for trusted identity management and ownership; enable customers and consumers to quickly process payments and disbursements; and reliably process vast volumes of transactions.
Cardano also announced their emergence into the world of artificial intelligence (AI) through Grace, a robot designed for the healthcare industry. The AI robot is developed by Awakening Health, a joint venture between Hanson Robotics and SingularityNET. They have chosen Cardano to ensure that Grace meets the stringent guidelines set out by the Health Insurance Portability and Accountability Act (HIPAA) and the General Data Protection Regulation (GDPR) framework. Grace has been designed to interact with the elderly and others who have been isolated.
In addition to these partnerships, Cardano took strides to increase on-chain DeFi activity through a strategic collaboration with UBX. UBX, the fintech venture studio and fund spun out of UnionBank, has launched its own public stake pool featuring Cardano. UBX stakers are now able to earn rewards on their ada for helping to secure and operate the Cardano blockchain.
Cardano also announced the ‘lightwallet’, which will enable users to interact with Cardano without internet access. The wallet will be the first ever blockchain wallet able to carry out transactions, hold NFTs, make purchases and more all in one mobile application.
EMURGO, the global blockchain solution provider, will allocate $100 million in the Cardano ecosystem to hasten DeFi and NFT education in the space. DeFi and DEXs are already being developed and perfected on Cardano as new development and updates are rolled out on the ecosystem.
The summit took place in six locations around the world between the 25th and 26th of September, 2021. It was also held in a virtual world, where bobbing avatars representing ADA fans from across the world huddled together to watch Charles Hoskinson and other keynote speakers explain the future of Cardano.
The summit served to showcase the new Cardano smart contract capabilities and to give a small precedent for where Cardano wants to focus its resources.
What’s next for Cardano?
After the Goguen era, Cardano will move into Basho. Cardano Basho will focus on optimizing and scaling the Cardano network to improve its performance.
To implement this scaling, Basho will add sidechains to the Cardano blockchain, using these new chains to take the pressure off Cardano’s main chain. These sidechains may also be used to test features, without affecting the security of the main chain.
Basho will also give users the option to use an account model for transactions. Currently, Cardano only uses UTXO (unspent transaction output), but in the Basho era, users will be able to switch between UTXO and account-based models. The Basho era will see Cardano become one of the most high performance, resilient, and flexible blockchain platforms in the industry.
Given the Goguen era is still in its early stages, Cardano Basho does not currently have an official release date. However, we do know that work on Cardano scaling has already started, enabled by the Alonzo hard fork.
FAQ
What is the Alonzo hard fork?
The Alonzo hard fork is an upgrade that introduced smart contract capabilities to the Cardano network, marking its transition into the Goguen era.
What is Hydra?
The Alonzo hard fork is an upgrade that introduced smart contract capabilities to the Cardano network, marking its transition into the Goguen era.
What is the Cardano Summit?
The Cardano Summit is a mix of virtual and live events that brought together blockchain enthusiasts, industry experts, and special guests to reflect on Cardano’s progress and discuss its future. The most recent summit took place on September 25th and 26th, 2021.
What happened during the Cardano Summit 2021?
Cardano unveiled multiple strategic announcements with blockchain projects, governments, and enterprises. These partnerships include Chainlink for real-time market data, Veritree for climate restoration, COTI to issue a new stablecoin, Dish for digital identity services in telecoms, and Rival for a new esports NFT marketplace.
Cardano also revealed upcoming developments such as a new app store for decentralized apps, a venture into artificial intelligence in healthcare, and a ‘lightwallet’ that can carry out transactions without internet access.
Rumors have surfaced in China that a Huobi Executive has been held under custody by Chinese Authorities.
Huge deposits into Huobi
There has been a deposit of over $400 Million worth of Tether and other cryptocurrencies to the exchange. Two of the transactions are extremely large, accounting for $304 million USD (as spotted by Whale alerts).
China is tightening control over cryptocurrencies trades
On an official level, cryptocurrency exchanges are not permitted in china after the 2017 ban. However, enforcement of this policy has been relatively weak in 2018 and 2019. Cryptocurrencies were traded largely via OTC – over the counter desks that exchanged fiat deposits to crypto. Interestingly enough, key Chinese exchanges such as Huobi, Okex, and Binance all offered OTC matching services. It is important to make the distinction that exchanges didn’t facilitate the actual exchange – instead, they matched exchange users and independently operated OTC services.
In 2020, OTCs bank accounts were targeted and bank accounts of involved parties were suspended.
Huobi Token drops in value
The value of the Huobi token declined by over 20% in a flash crash following the rumor. This was also correlated to the large movement of USDT out of the exchange.
HT suddenly fell sharply, 100 million USDT was transferred, COO was reported to be investigated but there was no response temporarily, triggering panic in the Chinese market. Huobi is the largest exchange in China. (https://kidsrkids.com) After the OK, Huobi was also panicked. pic.twitter.com/oQtQBQhh1N
Initially it was suggested that Chairman, Founder and CEO Leon Li was arrested. As with the OKEx detention incident, people on Chinese social media tried to find ways to see if this was true. Among those were people who again tried to check his pedometer and breathed a sign of relief when they found he had been walking more than 5,000 steps today.
Li Lin pedometer
Huobi Denies all rumors, stating they are false
Huobi has come out to deny all the rumors, stating that there are no members of the Huobi team that are taken under custody.
Nevertheless, users are not taking their chances and rushing to withdraw their deposits from Huobi. According to Whale Alert, nearly USD$240 million worth of Bitcoin has been transferred out of Huobi in the space of 2 hours on 3rd November 2020.
What’s are Bitcoin Over-the-Counter (OTC) brokers?
Over-the-counter (OTC) are entities that allow the buy and sell of large quantities of Bitcoin and other cryptocurrencies. OTCs offer more private and personalized services to institutions and high net-worth individuals who need a high degree of liquidity and privacy. The key advantage to an OTC is that they handle large trading volumes, such as trading $100,000+ USD without price slippage. OTC traders will normally quote a strike price for the entire order block with immediate execution. This is contrasted with trading on cryptocurrency exchanges where large orders will cause the price to decrease due to a lack of buy orders. OTC desks allows institutions and high net-worth individuals to buy Bitcoin without a having dedicated trading desk.
OTC offices can be either regionally located, serving local clients or global. Often major cities such as Hong Kong, Tokyo or New York have OTC brokers servicing local clients. These brokers can provide very personalized services and even in person meetups. In contrast, global OTCs such as Binance OTC handles transactions over the internet.
Traditionally in the stock market world, OTC desks facilitate trading of securities that are not listed on formal exchanges, e.g. the New York Stock Exchange.
Benefits of trading via an OTC broker
High Liquidity – Dedicated traders from OTC desks will help increase the liquidity of the overall market. This means they can handle large order blocks
Fixed Price – OTC brokers will over a quotation for the entire order block. This means orders are not affected by price slippage.
Easy Fiat Options – Brokers will have local bank accounts and can sometimes even accept cash.
Disadvantages of trading via an OTC broker
Limited range of cryptocurrencies – Often OTC brokers specialize on a few cryptocurrencies. This means unlike exchanges, they will not offer 100+ trading pairs. Instead, they will focus on the major popular cryptocurrencies that have high trading volune and interest such as Bitcoin, Ethereum or some stablecoins.
Manual trading process – Traders are executed by a human counter-party. This trading times will often be limited to regular office hours.
Large order size required – Brokers often have a minimum order size, such as $100,000 USD traded within a certain period of time.
How do OTC Brokers work
OTC desks have a network of buyers and sellers. The trades themselves are facilitated by OTC broker-dealer who will locate and negotiate directly with prospective buyers and sellers over computer networks or by phone. This is contrasted from trading over exchanges where the prices and order books are publicly available. For OTC desks, their broker-dealers will negotiate the trade price for you. Trades are also not publicly listed giving the parties privacy.
Therefore, to fully understand what is going on in the cryptocurrency markets it is important to consider what is also happening at OTC desks. This is because large transactions happen on them on a daily basis.
Bitcoin OTC vs Exchanges
The choice of whether to use a Bitcoin OTC or Exchange depends largely on the volume of orders. Big players looking to buy or sell large quantities of cryptocurrencies are better off using an OTC broker. This is because a single exchange (no matter how large) will not have the liquidity necessary to fill large order blocks. Research has shown that sell orders of US$30 million can significantly suppress the price of a cryptocurrency, hence causing slippages of 5-10%. This amount is much larger than the fees charged by OTC brokers. The second advantage of using OTCs is that they can offer to lock in a particular quotation with the option to settle at a later time. This gives people additional flexibility to move funds from banks or cold-storage (such as the Ledger Nano X).
However, depending on who you are, one upside or downside of OTCs is that they are not transparent. So while you can try to gauge whether there is a lot of trade flow through an OTC desk by reading their reports (if any), there is no way you can verify if they are being truthful or giving you the best price. On the other hand you can conduct trades privately compared to on exchanges and the price will be “locked-in” and not subject to any fluctuation between the time of agreement and the time of settlement.
How to trade Bitcoin with OTC Brokers
This guide outlines the general steps involved in trading with Over-the-Counter Brokers. Generally speaking, brokers provide similar on-boarding and trading experiences. It is important to remember all brokers will require verification of your identity, known as Know-Your-Customer (KYC) registration. On top of this, brokers will verify the source of funds to prevent money-laundering.
Summary of how crypto is traded with an OTC broker (Image credit: Genesis Block)
Time needed: 3 days
How to trade with Bitcoin OTC Brokers
Signup
Sign up to the broker via website, email, call or in-person meetup. They will usually ask about the type and quantity of cryptocurrencies you would like to sell.
Onboard
Every broker will require you to fill in onboarding documents and legal disclaimers. They will also ask you to provide various types of documentation such as a Government ID, Proof of Residence and Proof of Income.
Communicate
Once on-boarded, they will give you a communications channel. Typically this involved a messaging platform where you can request quotations for orders such as: You: “I would like to buy 100 Bitcoin” Trader: “We can offer 100 BTC at a price of $8123 USD per BTC”
Confirm trade
You can choose whether to accept the price quotation or not. If you agree, the trade is immediately confirmed and the trade will provide you with a deposit address.
Trade Complete
Once the deposit is received, the order is no fully executed and you will receive your trade
Top OTC Brokers around the world
When trading with OTC brokers, it’s important to only use trusted and regulated brokers. This is important because of the large transaction sizes involved – you don’t want to get delayed or even scammed out of a transactions. We compiled the list of the biggest OTC brokers around the world
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Bitcoin OTC in China and Hong Kong
Bitcoin OTC brokers play a very important role in China due to a government ban on cryptocurrency exchanges. In China, it’s no longer legal to operate a cryptocurrency exchange due to a legislation change in 2017. This has left large Chinese exchanges and OTC desks such as OKex, Binance, Genesis Block and Huobi operating overseas or as OTC brokers.
Currently Bitcoin OTCs brokers are legal in China. They operate by directly connecting buyers and sellers of Bitcoin. However, Chinese financial institutions such as Alibaba’s Alipay have distanced themselves from OTC transactions, stating that they will “immediately stop relevant payment services“.
There’re several reports about @Alipay being used for bitcoin transactions. To reiterate, Alipay closely monitors over-the-counter transactions to identify irregular behavior and ensure compliance with relevant regulations. If any transactions are identified as being related to bitcoin or other virtual currencies, @Alipay immediately stops the relevant payment services.
One of the biggest concerns of OTC brokers and trading is the risk of exposure to criminal funds. This is because OTC desks who do not perform proper due diligence on source of funds can come into contact with tainted coins. In a 2020 report, cryptocurrency research company Chainalysis released a report on money laundering in the exchange and OTC space. The report accused some OTC desks of illegally taking laundering funds for private clients. In order to protect yourself from such activity, ensure you are trading with legitimate brokers who have proper KYC. On top of this, never buy “discounted” Bitcoins offered on social media such as Instagram or Facebook.
Frequently Asked Questions (FAQ)
Will OTC brokers accept cash?
Often OTC brokers will have a cash option – for both buying and selling Bitcoin. It’s important to remember for large quantities of cash, KYC registration is required. On top of this, proof of funds may also be requested.
Do OTC brokers require my Identity?
To comply with anti-money laundering laws, OTC brokers will require you to submit official documentation such as Identity, Proof of address, bank account statements, proof of income or proof of funds. The type of identification required however would depend on the OTC brokers own company requirements and any information as required by the laws of the relevant jurisdiction.
Is there a limit on how much cryptocurrency I can trade with an OTC?
ost OTCs do not have a maximum limit on the amount of Bitcoin you can buy or sell. Order sizes of 100 or above BTC are commonplace for these brokers. However, some brokers will have a minimum order size, such as $100,000 USD.
How do I buy Bitcoin Anonymously (Privately)?
The best way to buy Bitcoin without a record is via cash or peer-to-peer transactions. It is important to remember this contains inherent risk as you’ll need to do your own KYC and potentially offer proof of funds in the future. You should also check that your counterparty is a legitimate trader and not a scammer as there are incidents of people being robbed during these “trades”.
Are there OTCs for Altcoins?
There are OTC services for altcoins and even coins that are not yet listed on exchanges. These OTCs will function similar to a matchmaker – matching sellers and buyers of a particular asset. One such example is Silverway – an OTC deal platform and deal aggregation platform.
How do I find out the volumes handled by OTCs?
OTCs are not obliged to provide trading data such as daily volumes, prices, or order books. However, some OTCs provide annual reports or blog posts that contain aggregated volume data.
What should I look out for when choosing OTCs?
Security and legitimacy are very important with thinking of which OTC desk to trade with, especially since huge sums of money are involved. Prospective customers could for example, check if the OTC desk is registered with the relevant government authorities, ask any peers if they have traded there before and their feedback, check online reviews or social media, or even go to their physical offices to make inquiries before signing up and trading.
