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  • PlotX ($PLOT): Putting prediction markets on the blockchain

    PlotX ($PLOT): Putting prediction markets on the blockchain

    PlotX allows people to plot the next possible outcome and are rewarded for correct predictions. This whole concept originates from prediction markets. Prediction markets such as sports betting are expected to reach a valuation of $155.49 billion in the United States by 2024. The markets have also been supported by the uptake of online casinos and betting sites. In some cases, more than a few players have tapped into the power of blockchain technology to provide transparency in a market that has been kept in secrecy and under unfair setups.

    With the growing popularity of open finance (OpFi), blockchain-based platforms are helping users to predict the direction of the market and, just like in the traditional prediction market, be rewarded if their prediction is correct. PlotX is one such platform.

    Check out my interview with Ish Goel, Co-founder of PlotX:

    Background: Who is behind PlotX?

    The project lives by the popular mantra by Abraham Lincoln that the future can only be predicted by visualizing it in the present. PlotX has a dedicated team led by Ish Goel, Nitika Goel, Kartic Rakhra, and Satheesh A. Furthermore, the team’s vast experiences are spread across various sectors.

    For example, Ish Goel has been involved with Ethereum since 2016 and won the London Blockchain Week Hackathon in 2017. Meanwhile, Nitika Goel led the development of Nexus Mutual and co-founded GovBlocks. PlotX’s key partners also include GovBlocks, Matic, and Venrai.

    PlotX team
    PlotX team

    What is PlotX?

    Built on the Ethereum blockchain, PlotX is a network that seeks to make trading in decentralized finance (DeFi) “simple and fun!” by powering a prediction market with cryptocurrency traders in mind.

    At the heart of the platform is a decentralized application (Dapp) that enables virtual currency traders to forecast the future of Bitcoin (BTC), Ether (ETH), among other cryptocurrencies in a weekly, daily, and hourly basis. The project also takes decentralised finance (DeFi) platforms such as Uniswap that use an automated market maker model into consideration.

    Notably, the decision to provide market predictions stems from somewhere, i.e., the problems found in centralized platforms offering prediction services. The major problems include the high cost of using conventional systems, assuring fairness, and counterparty risks.

    Tried but failed, time to do it again

    Although the creation of cryptocurrency-centric prediction markets has been tried on decentralized systems, the time was not ripe. Therefore, it saw little, if any, adoption.

    Being a DeFi-focused prediction platform, PlotX aims to power crypto-based predictions using distributed ledger technology. It enables on-chain market creation using smart contracts. PlotX enables participation mining via a gamified experience by drawing inspiration from yield farming or liquidity mining as used in DeFi protocols.

    Additionally, PlotX seeks to provide instant rewards, short market cycles, and employ a mechanism that spreads the risks. Spreading risks enables a user to tailor his exposure to mitigate losses emanating from wrong predictions. With this option, users lose roughly 20% of their total prediction stake.

    PlotX platform
    PlotX platform

    However, the staked amount can be customized to mirror the users’ risk appetite starting from 1x, 2x, 3x, 4x, and 5x. Note that the higher the risk, the higher the reward and potential loss.

    Governance on PlotX

    The protocol employs a community-based governance model through the use of a decentralized autonomous organization (DAO) that votes and initiates proposals regarding changes to the system.

    This approach plays a vital role in providing on-chain governance in a blockchain-based prediction market. However, for non-blockchain dispute resolution, the platform has an advisory board. The board does not have any rights to funds, and its roles grow weaker as the community grows stronger.

    To power this model, the platform mirrors the approach used by Nexus Mutual. In addition, it incorporates smart contracts built on the GovBlocks network to strengthen community involvement.

    The platform also uses smart contracts that allow decision points to be edited, token holders to raise issues, as well as enable the token holders to reach an agreement.

    PlotX’s components of a healthy DeFi prediction protocol

    How does PlotX create a healthy DeFi prediction protocol? This is through several features in the PlotX protocol as follows:

    Market creation – This handles the network’s creation of different cryptocurrency pairs for prediction. A typical market on the platform can be, “What will be the price of ETH/BTC on October 17 at 1800hrs GMT.”

    Market positioning and pricing – A position can range from neutral, to bullish, to bearish and can only be influenced by a user’s experience on digital currency trading. A formula is used to calculate a position price on-chain. The odds are changed in regards to participation.

    Position buying – Buying into a position requires a user to stake crypto such as ETH. A user can buy into more than one position depending on the amount of token’s staked, the amount required for each position, etc.

    Positions trading – Here, users can trade positions in a decentralized way and exit positions before they expire.

    Market settlement – Closing prices are calculated from data provided by distributed oracles such as Chainlink.

    Market reward claims – Rewards are distributed once the market closes. However, the distribution of rewards is halted in case of a dispute until the dispute is resolved. However, a dispute can only be raised within the cooling period, given after the market closes.

    PlotX Alpha and PlotX Token ($PLOT) use cases

    Alpha is a version of PlotX existing on Ethereum’s Kovan testnet network. Although the system largely uses ETH when making predictions, it has a native token called PLOT. The token allows for:

    ·         P2P commissions.

    ·         Referral mining – Existing users can invite friends and family and be rewarded.

    ·         Community mining – Attracting more people into the platform using mineable airdrop rewards.

    ·         Play mining – Users are rewarded for staking PLOT before participating in market predictions.

    ·         Governance mining – The voting strength depends on the amount of PLOT staked.

    ·         Liquidity mining via staking.

    PlotX ($PLOT) mainnet launch and listing

    On 13th October 2020, PlotX will be launched on the Ethereum mainnet. Upon launch, BTC/USD and ETH/USD trading pairs will be available for users to predict on using PLOT and ETH.

    On the same day at 1:00pm (UTC), its native token PLOT will be listed on Uniswap.

    Conclusion

    Being a non-custodial protocol, PlotX users access the platform using their MetaMask wallet or any of their mobile wallets. The network’s users can also sign in using their email addresses. However, they have to integrate centralized finance bridges to enjoy the benefits of a prediction market in the DeFi world.

    The project’s reliance on the Ethereum blockchain and the ETH token allows its users to optimally interact with OpFi protocols since most of them are built on the same chain. With online prediction markets gaining traction in the centralized space, PlotX provides a superior service for those in the decentralized world.

    Decentralised Finance (DeFi) series: tutorials, guides and more

    With content for both beginners and more advanced users, check out our YouTube DeFi series containing tutorials on the ESSENTIAL TOOLS you need for trading in the DeFi space e.g. MetaMask and Uniswap. As well as a deep dive into popular DeFi topics such as decentralized exchanges, borrowing-lending platforms and NFT marketplaces

    The DeFi series on this website also covers topics not explored on YouTube. For an introduction on what is DeFi, check out Decentralized Finance (DeFi) Overview: A guide to the HOTTEST trend in cryptocurrency

    Tutorials and guides for the ESSENTIAL DEFI TOOLS:

    More videos and articles are coming soon as part of our DeFi series, so be sure to SUBSCRIBE to our Youtube channel so you can be notified as soon as they come out!

    Disclaimer: Cryptocurrency trading involves significant risks and may result in the loss of your capital. You should carefully consider whether trading cryptocurrencies is right for you in light of your financial condition and ability to bear financial risks. Cryptocurrency prices are highly volatile and can fluctuate widely in a short period of time. As such, trading cryptocurrencies may not be suitable for everyone. Additionally, storing cryptocurrencies on a centralized exchange carries inherent risks, including the potential for loss due to hacking, exchange collapse, or other security breaches. We strongly advise that you seek independent professional advice before engaging in any cryptocurrency trading activities and carefully consider the security measures in place when choosing or storing your cryptocurrencies on a cryptocurrency exchange.

  • 8Hours Foundation (VIMworld) $EHrT: The Next Evolution of Gaming?

    8Hours Foundation (VIMworld) $EHrT: The Next Evolution of Gaming?

    8Hours Foundation ($EHrT) aims to integrate the real world into the blockchain to create beneficial implications for the time we spend with our friends and family. In line with this vision, the foundation partnered up with PlayTable, the world’s first blockchain-enabled game console, to facilitate social gaming platforms. EHrT, is the native currency of the PlayTable ecosystem. It is used for anything and everything for the PlayTable. Toymakers and game developers have to buy EHrT from the open market to register their toys or assign data to their products.

    Powered by VeChain’s blockchain technology, VIMworld is a smart NFT platform for collectables and digital characters. VIMs, or Virtually Integrated Metadata, are digital collectable tokens living on the VeChain Thor Blockchain. Each VIM can be seen as a digital character with unique properties and capabilities. They can be traded, collected, or used in PlayTable games.

    Background

    John Dempsey, the founder of the 8Hours Foundation, is both a gamer and a collector. These were exactly the same interests that allowed him to conceptualize the whole project and later be built together with his team and the community.

    Dempsey felt the need to use technology to bring people together through the help of social activities, such as games.

    He built the foundation to create a blockchain platform that encourages and rewards people when using it. The platform’s goal is to ensure that its participants can spend at least a minimum of eight hours per week being engaged in meaningful social interactions.

    What is the 8Hours Foundation?

    Eight Hours Foundation

    8Hours Foundation is an organization put together to build a real-life community even in the blockchain space. The primary purpose of the team’s efforts, as already mentioned, is to create a platform where people are rewarded for interacting with other individuals.

    The foundation collaborates with PlayTable, a blockchain-based gaming platform, to spearhead a program called ‘Toy Reality’. This way, they can build a virtual social network that emulates the real world through the tokenization of real-life assets on the blockchain.

    https://www.youtube.com/watch?v=5yzyZa3dZ0w&feature=emb_title

    A mixture of real-world and blockchain data storage technologies power the whole platform. Furthermore, RFID technology and tagging enable the creation of their verifiable blockchain counterpart. The same set-up supports ownership tracking, asset journey recording, and asset customization.

    Eight Hours Token ($EHrT)

    Eight Hours Token, or the EHrT, is the native token of the platform. It can be used as a medium of exchange, fees payment, staking, and voting. EHrT also has specific functions that help run the whole platform. Mainly, these are:

    • Authentic Asset Certificates (AAC) – In making blockchain representations of real-life objects, users have to spend EHrT. The process allows for the creation of AAC, which act as proof of ownership on a blockchain-counterpart of real-life assets. Additionally, these belong to the non-fungible token (NFT) classification, the same kind that allows for the tokenization of assets in the real world. For users to be able to register and join the platform, AAC’s are required.
    • In-Game Currencies (IGC) – Through EHrT, users can create in-game currencies. These are tokens that developers can create to back the economy of their games. Since these currencies can work cross-platform, other gaming systems on the 8Hours Foundation ecosystem can use them as well.
    • Colored Tokens – These tokens function like marks or records on an AAC that display their digital journey. This means that colored tokens can be referred to in looking for the history of an AAC’s ownership, its authenticity, progress, and wealth, among others. Furthermore, only developers can create new colored tokens and deposit them on AAC.
    $EHRT Token Mechanics
    $EHRT Token Mechanics (Image credit: 8hours Foundation Whitepaper)

    Other uses for the EHrT involve other financial services such as staking and rewards. But generally, EHrT is held by users for:

    • Staking – Through a grants system, users can make investments in the projects built within the 8Hours ecosystem. This entitles stakers to receive benefits from a platform in the event that they grow.
    • Reward – Through a rewards system, the platform incentivizes its users to participate in network activities, especially those that involve platform developments or updates. These users receive a proportional amount of EHrTs for their participation.
    • Support – Users who want to show their support on a platform that is currently being built, that can freely use EHrTs to fund a project.

    8Hours backs its transaction system with the VeChainThor chain. This allows it to support a multi-party payment protocol without requiring gas fees that platforms usually charge whenever users perform these transactions.

    What is the VIMworld?

    VIMworld logo
    VIMworld logo

    Powered by EHrTs, the foundation has created VIMworld, a collaborative initiative between them and PlayTable, with the purpose of establishing a gaming platform built within its own ecosystem.

    VIMworld refers to a virtual community that gathers a collection of all Virtually Integrated Metadata (VIM) that its participants have created on the platform. These are powered by AACs that help VIMs store and verify data, record transactional history, as well as the whole journey of virtual objects, among others.

    VIM holders can then join any community activity with other users, or simply interact with them. These interactions are made possible by games that get people to perform certain tasks.

    Features of VIMs

    There are several features that help distinguish VIMs from the usual NFTs. These are:

    • User-managed – Owners of VIMs can only grow in value if the owner attends to them by participating in VIMWorld activities. In addition, they can be customized based on their history.
    • Asset-powered – VIMs require users to spend EHrTs from time to time if they want it to grow. This means that VIMs can hold actual value and grow at the same time.
    • Digital Representation – It is one of the more innovative aspects of VIMs. VIMs allow real-life objects like toys and collectibles to increase in value through their blockchain representations.

    As of late, the ecosystem behind VIMworld is already composed of more than 2,100 community members and 7,000 VIM collectibles. It is now considered one of the most adopted digital platforms, overtaking CryptoKitties’s record back in 2017.

    Gaining VIMs and Growing their Value

    VIMworld's Characters
    VIMworld’s Characters (Image credit: Vimworld.com)

    There are plenty of ways to gain VIMs, such as rewards when winning games from various platforms on the 8Hours Ecosystem, donations or incentives given out by the foundation, purchase from marketplaces, or acquisitions of toy packages.

    Besides representing the ownership of a user on an item or a game, VIMs are also valued based on the amount of game data and progress they hold. They are classified into a variety of rarities and tiers, but can be easily upgraded by adding more EHrT in them. Furthermore, higher-tiered VIMs accrue bigger benefits for its holders.

    VIM tiers
    VIM tiers (Image credit: VIMworld Whitepaper)

    VIMs can soon be traded on the VIMExchange, the marketplace that 8Hours designed to support all NFTs in the ecosystem. When more partnerships are established, VIMs can be made available for trading on other VeChainThor-compatible marketplaces.

    Conclusion

    Creating real-world use cases for blockchain technology is one of the biggest drivers for its adoption. And since social interactions have been reduced in this modern and digital age, having platforms that help alleviate this problem could certainly have a real use case.

    If VIMworld and 8Hours succeed in their goal, it can be a very interesting case study for the benefits that blockchain can bring. The project shows a promising potential to prove that the technology behind cryptocurrencies can be an effective instrument in bringing people together.

    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.

  • Flamingo Finance ($FLM): What is it?

    Flamingo Finance ($FLM): What is it?

    Flamingo Finance aims to provide everything a DeFi user needs in one swipe. The project is also built on the NEO blockchain, enabling it to evade the high cost and congestion of Ethereum. Here, we take a deeper look at Flamingo, why it chose NEO, its native token, and what it has to offer to DeFi enthusiasts.


    Background

    The protocol is a NEO Foundation project brought to life through the NEO Global Development (NGD) team and is meant to expand NEO’s vision of a smart economy. Flamingo offers an all-round service to its users by taking care of back end and front end issues under one platform.

    What is Flamingo Finance

    Flamingo is a full-stack DeFi protocol that is interoperable and powered by the NEO blockchain. Operations on the network are divided into distinct components to enable a smooth operation for the platform. (Modafinil) Currently, the system supports access using the NeoLine wallet for NEO assets, Metamask wallet for Ether (ETH) holders, and Cyano plugin wallet for ONT token holders.

    Flamingo’s 5 Key Components

    Flamingo ecosystem (Image credit: NeoNewsToday)

    Swap

    This handles automatic on-chain market making. The module interacts with wrapped tokens on the parent blockchain to provide liquidity. Uniswap, a leading DeFi platform, inspires its approach to automated market making. Liquidity Providers (LPs) converge on a pool by providing tokens with NEO’s standard, NEP-5.

    Wrapper

    Flamingo uses this component to power inter-chain interaction of blockchain assets. Wrapper works with Bitcoin, Ethereum, NEO, and Ontology, where tokens from these platforms can be ‘wrapped’ by being converted to NEP-5 tokens and used on the NEO network.

    Vault

    The Vault module provides an interface for managing, mining, and staking assets. Also, it handles the issuance of collateralized stablecoins. Vault stakers earn rewards in the form of the platform’s native token, FLM (more on the token later).

    Vault is projected to go live anytime between September 25 and 29 in 2020.

    Perp

    Perp is derived from the word perpetual and is designed with perpetual contracts in mind. It uses automatic market-making to power a perpetual contract exchange that deals with a host of assets. The exchange has a leverage of up to 10X for both long and short positions.

    Decentralized Autonomous Organization (DAO)

    In the decentralized world, everything should be distributed, including governance. Flamingo uses DAO to allow for optimum community involvement in the running of the platform. Issues that fall under DAO include token economics, functionality changes, and parameter configuration.

    Generally, DAO has a say in things happening on the Wrapper, Swap, Perp, and Vault modules.

    Flamingo Finance Token (FLM) and Flamingo USD (FUSD)

    FLM is Flamingo’s native currency dedicated to governance. It’s built using NEO’s NEP-5 standard. Interestingly, the token does not have a cap on its maximum supply.

    FLM coins are distributed to the community with regards to participation on the network. For example, the token will be given for staking cross-chain assets, staking LP tokens, minting FUSD, depositing stablecoins to provide a margin when interacting with perpetual contracts, and contributing to governance proposals.

    Note that before DAO takes over the governance, the Flamingo team will address governance issues through proof-of-authority (POA). FLM can be held by anyone wishing to join the NEO DeFi ecosystem. Furthermore, FLM holders are entitled to submit proposals to the DAO and also be able to vote for submitted proposals.

    Flamingo supports FIP and FCCP proposals.

    Flamingo Improvement Proposal (FIP) involves anything related to system design features such as risk control, liquidation, and liquidity improvement. Flamingo Configuration Change Proposal (FCCP), on the other hand, contains proposals directed towards the FLM release schedule, staking, fee structure, FLM distribution mechanism on the Perp module, etc.

    FUSD is a stablecoin on the platform that is pegged to the US dollar (USD). Staking LP tokens allows one to mint the stablecoin. However, to unlock their collaterals, the minted FUSD has to be burnt.

    Key strengths of Flamingo Finance

    Interoperability

    Flamingo is part of an ecosystem made up of NEO and the Poly network. Poly is a protocol developed on NEO in conjunction with Switcheo Network and Ontology. The protocol connects to other blockchain platforms such as Cosmos, Bitcoin, Ontology, and Ethereum.

    To bring the interoperability factor, Flamingo connects to NEO, NEO connects to Poly, and Poly connects to other decentralized networks.

    Capital Efficiency

    Popular decentralized exchanges (DEXs) using an automatic market maker model underutilize capital from LPs. Flamingo provides capital efficiency by clustering individual aspects such as a liquidity pool (LP) and a collateral pool.

    For instance, Swap handles the LP while Vault provides the collateral pool. Therefore, LPs can provide liquidity in Swap and still stake their tokens in Vault.

    Fair Launch

    To enable a fair launch for all, the platform does not support a pre-mine. Neither does it allocate coins to its founding team. Instead, all FLM tokens are distributed to the community.

    What is Flamincome?

    Being a DeFi-focused platform, it has a dedicated platform for yield farming or liquidity mining; Flamincome. The system provides yield farming functionalities identical to those offered by Yearn.Finance (YFI).

    Flamincome
    Flamincome (Image credit: Medium)

    Flamincome comprises an optimizer and a normalizer. An optimizer converts staked assets into interest-focused assets, while a normalizer changes interest-based assets into synthetic assets with a 1:1 peg ratio to the underlying asset. Synthetic assets can be transferred to other DeFi networks for additional liquidity mining.

    Flamingo Swap: What is it?

    Flamingo Swap is one of the modules on Flamingo Finance’s DeFi platform. It is an on-chain automated market maker powered exchange that allows users to swap one token from another. Similar to other swapping platforms, Flamingo Swap needs users to add token pairs into these pools which in turn creates a supply for traders to come in and exchange tokens. Users i.e. LPs who add tokens to specified pools are rewarded for their contribution as they receive a distribution of the trading fees (currently 0.3% per swap) and LP Tokens. The LPs can then stake these LP Tokens in the Vault and get FLM in return.

    Note the below section titled “Flamingo swap launch and change of $FLM distribution: 5th Oct 2020” to see which Vaults are eligible for distribution of FLM rewards.

    How to add liquidity to Flamingo Swap and what are my rewards?

    By way of example, if you wanted to be a LP for the FLM/nNEO trading pair you would need to do the following steps:

    1. Go to the “Pool” tab on the Swap page;
    2. connect your NeoLine wallet;
    3. click “Add Liquidity” and choose FLM and nNEO. Note the the amount deposited must be of equal value based on the market price of the tokens but this will be calculated for you;
    4. check the respective exchange prices for the FLM and nNEO tokens and the share of the pool your liquidity will form after adding the same. If this is confirmed by you, click “Supply” and confirm; and
    5. the NeoLine wallet will pop up and you will be asked to adjust and agree to the GAS fee to be paid for this transaction.

    For a full walkthrough on how to provide liquidity to Swap and withdraw your liquidity from the same, click here.

    LPs will be rewarded with LP Tokens, in this illustration, the LP would get FLP-FLM-nNEO tokens. They will also get a share of the fees collected from traders equal to the proportion of their liquidity in a pool. So for example, if their deposited liquidity forms 2% of the FLM/nNEO pool they would get 2% of all the trading fees paid by traders, which is 0.3% per swap.

    LPs can then stake their LP Tokens in specified trading pairs to get FLM. For a walkthrough on how to stake assets, claim FLM and remove your staked assets from the Vault, check out the detailed guide from Flamingo here.

    LATEST NEWS

    Are you eligible for refund of Flamincome withdrawal fees?

    Due to an issue with the Flamincome interface, some users who withdraw USDT before 5:00am (UTC) on 26th September 2020 were charged 0.5% withdrawal fees without their knowledge. Flamingcome will refund the withdrawal fees to these users, which Founder Da Hongfei said on Twitter he will “personally subsidize”.

    There is also a proposal being put forward to extend this refund period to any deposits that were made before 5:00am (UTC) on 26th September 2020 but “…withdrawn before 3 hours after the MintRush Resume.” Which from our understanding would be 4:00pm (UTC) on 25th September 2020.

    Flamingo swap launch and change of $FLM distribution: 5th Oct 2020

    At the initial launch of Flamingo Swap, only 6 trading pairs will be supported i.e. FLM/nNEO, pnWBTC/nNEO, pnWETH/nNEO pONT/nNEO, nNEO/pnUSDT and pnWBTC/pnUSDT.

    As Mint Rush 2 has finished distribution of rewards, FLM tokens will no longer be distributed to single-asset stakers. Instead, only users who stake LP Tokens from specified trading pairs in the Vault will continue receiving FLM. From 1:00pm (UTC) on 5th October 2020 to 1:00pm (UTC) on 7th October 2020, 2,857,143 FLM will be distributed per day to these trading pairs in the following proportions:

    • FLP-FLM-nNEO 20%
    • FLP-pnWBTC-nNEO 20%
    • FLP-pnWETH-nNEO 10%
    • FLP-pONT-nNEO 5%
    • FLP-nNEO-pnUSDT 20%
    • FLP-pnWBTC-pnUSDT 25%

    From 1:00pm (UTC) on 7th October 2020 to 1:00pm (UTC) on 14th October 2020, 1,071,429 FLM will be distributed per day in the same proportion as above.

    SCAM ALERT: Flamingo airdrop

    There is currently a Flamingo airdrop scam which asks participants to send their NEO tokens to a “designated contribution address” where you can get FLM tokens at a rate of 1 NEO=1,000 FLM.

    The @FlamingoAirdrop as well as the FlamingoFinanceAirdop Telegram Channels are FAKE. Be careful!

    Fake Flamingo account
    Fake Flamingo account

    I have all this FLM? What happens next?

    FLM is currently listed on the following exchanges: Binance, FTX (FLM-PERP)

    Conclusion

    A full-stack DeFi protocol, like Flamingo, presents numerous advantages to DeFi users. And among them is capital efficiency, where LPs can provide liquidity and collateral at the same time.

    The inclusion of a yield farming system gives DeFi enthusiasts a similar but improved network to YFI and SushiSwap.

    Decentralised Finance (DeFi) series: tutorials, guides and more

    With content for both beginners and more advanced users, check out our YouTube DeFi series containing tutorials on the ESSENTIAL TOOLS you need for trading in the DeFi space e.g. MetaMask and Uniswap. As well as a deep dive into popular DeFi topics such as decentralized exchanges, borrowing-lending platforms and NFT marketplaces

    The DeFi series on this website also covers topics not explored on YouTube. For an introduction on what is DeFi, check out Decentralized Finance (DeFi) Overview: A guide to the HOTTEST trend in cryptocurrency

    Tutorials and guides for the ESSENTIAL DEFI TOOLS:

    More videos and articles are coming soon as part of our DeFi series, so be sure to SUBSCRIBE to our Youtube channel so you can be notified as soon as they come out!

    Disclaimer: Cryptocurrency trading involves significant risks and may result in the loss of your capital. You should carefully consider whether trading cryptocurrencies is right for you in light of your financial condition and ability to bear financial risks. Cryptocurrency prices are highly volatile and can fluctuate widely in a short period of time. As such, trading cryptocurrencies may not be suitable for everyone. Additionally, storing cryptocurrencies on a centralized exchange carries inherent risks, including the potential for loss due to hacking, exchange collapse, or other security breaches. We strongly advise that you seek independent professional advice before engaging in any cryptocurrency trading activities and carefully consider the security measures in place when choosing or storing your cryptocurrencies on a cryptocurrency exchange.

  • MEME ($MEME): A DeFi Joke?

    MEME ($MEME): A DeFi Joke?

    MEME ($MEME) is a hybrid between decentralised finance (DeFi) and non-fungible token (NFT) on the Ethereum blockchain. NFTs are tokens that represent unique digital items with verifiable scarcity. They can be used to represent digital ownership as with the case of rare cryptocurrency art. MEME allows users to stake tokens to farm limited edition NFT memes.


    Background

    MEME started out as a meme. Yes, it was a joke made by Jordan Lyall, the DeFi Product Lead at ConsenSys. Lyall’s Twitter post joked about an offering that could allow easy and fast (less than five minutes) creation of a DeFi platform.

    A Twitter user took the joke seriously and created MEME coin. “I was commenting on the silliness of it all. But in doing that, I’ve created the very thing I sought to destroy,” Lyall commented after the coin went live.

    The birth of memes dates back to 1976 when the word appeared on ‘The Selfish Gene’, a book by Richard Dawkins. In the book, memes are portrayed as ideas quickly spread from one person to another within a community. They have since found their way into our daily lives to refer to the viral spread of information on the internet.

    What is MEME?

    MEME is a decentralized project connecting the DeFi world with NFTs through yield farming or liquidity mining. The network stresses that it does not offer coins for sale but allows farming. The system was launched on August 14, 2020, and has since attracted a ton of attention from the crypto community.

    MEME’s Meteoric Rise

    The genesis of the project’s meteoric rise dates back to Lyall’s tweet, which garnered 1,200 likes and a high number of retweets within minutes. After its launch, it was listed on CoinGecko with a hard cap of 28,000 tokens.

    It was followed by an exclusive Telegram airdrop that was done 30 minutes after launch. After launch, the protocol’s Telegram community grew to over 3,000 participants. In its first few days, MEME reached a 24-hour trading volume of $1.2 million with a single coin changing hands at $40.

    MEME token
    MEME token (Image credit: Coingecko)

    Roughly a month later, MEME was trading at $795, had a one-day trading volume of $8.8 million, and a market capitalization of $18.7 million. Also, the coin moved from position 610 in early September 2020, to 276 as of September 18, 2020, based on market cap.

    By September 18, MEME token holders were roughly 1,400 while the NFT holders were about 700.

    How to farm MEME?

    Farming requires staking MEME and then receiving rare NFT versions. This increases liquidity mining opportunities for DeFi enthusiasts. As with other DeFi systems that support yield mining, farming MEME involves liquidity mining pools.

    Note that the NFTs up for grabs are created by a select number of artists. The first digital artist listed is Sven Eberwein, a popular digital artist living in Los Angeles.

    MEME Artist - Sven Eberwein
    MEME Artist – Sven Eberwein (Image credit: dontbuymeme.com)

    Eberwein combines internet culture with computer graphics. Sven “works of the internet, by the internet, for the internet.” The artist’s first MEME-themed collections are titled ‘Don’t buy MEME,’ ‘Volatile Pineapples,’ The MEME Shitcoin Cycle,’ and ‘Crashtest (Because it will).’

    According to Eberwein, MEME’s uniqueness comes from being the first to capture the DeFi and meme worlds.

    MEME farming pools

    Genesis pool

    MEME farming pool - Genesis
    MEME farming pool – Genesis (Image credit: dontbuymeme.com)

    This accommodates the staking of MEME tokens.

    • The first step is to access the pool from https://dontbuymeme.com/farms .
    • Then the next step is to unlock your Web3 wallet. Note that Web3 wallets are just browser functionalities added to the standard self-custody wallets to allow access and usage of decentralized applications (Dapps). Wallets in the Web3 ecosystem include Metamask, imToken, Huobi, AlphaWallet, Enjin, infinito, Opera, Trust Wallet, Coinbase, Dexwallet, Ledger, exodus, Trezor, and Mist.
    • Approve MEME
    • Enter between a maximum of 5 and a minimum of 1 MEME token. Rewards from farming on the platform are called pineapples. For instance, staking 5 MEME results in five pineapples per 24 hours.
    • Claim NFT. This can only be done when the required number of pineapples has been farmed.

    MEME Genesis LP pool

    MEME farming pool - Genesis LP
    MEME farming pool – Genesis LP (Image credit: dontbuymeme.com)

    Here, Uniswap V2 liquidity pool (UNIV2-LP) tokens are staked to earn pineapples.

    • To get the tokens, stake Ether (ETH) and MEME tokens on the Uniswap pool. However, to receive approximately 0.0002 UNIV2-LP tokens, one needs to stake roughly 50 MEME coins and ETH of equal value.
    • Access https://dontbuymeme.com/farms to join the LP Genesis pool.
    • Unlock your wallet.
    • Approve the tokens from Uniswap and specify your stake amount. The pool supports a maximum of 0.0002 and a minimum of 0.00004 UNIV2-LP tokens. As with the previous pool, the minimum amount staked births one pineapple per day while the maximum stake results in five pineapples per 24 hours.
    MEME Genesis Economics
    MEME Genesis Economics (Image credit: Don’t Buy $MEME Medium article)

    A pineapple farmer can claim their NFT of choice when they have enough pineapples. Note that pineapples cannot be shared between pools and the amount staked must not exceed the set limits to avoid failed transactions.

    NFTs earned from mining MEME can be sold on OpenSea, a marketplace for trading NFTs and virtual currency collectibles. OpenSea lists assets created using Ethereum’s ERC-721 and ERC-1155 standards.

    MEME at OpenSea
    MEME at OpenSea (Image credit: OpenSea)

    Governance

    As with other non-custodial financial systems, MEME handles governance issues through a decentralized autonomous organization called MemeDAO. To be a member, you have to hold a minimum of 100 MEME tokens. Towards the end of August 2020, $1.7 million worth of capital was locked in the DAO.

    Conclusion

    In the cryptocurrency community, memes are used as a universal language and MEME joins others like Doge and CoronaCoin that started as a joke but attracted interest from the crypto community.

    MEME’s uniqueness comes from its connection with the DeFi and NFT world, which adds a new reward stream for yield farmers. However, it’s yet to be seen how long ‘a joke’ can be taken seriously.

    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. (https://colorreflections.com) 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.

  • Top 5 Bitcoin OTC Brokers: Efficiently trade large volumes of Bitcoin

    Top 5 Bitcoin OTC Brokers: Efficiently trade large volumes of Bitcoin

    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
    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

    1. 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.

    2. 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.

    3. 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”

    4. 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.

    5. 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

    [wp-compear id=”5277″]

    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.

    AliPay official statement

    Interview with OTC Brokers

    Travel with me to Genesis Block in Hong Kong to see what’s happening with trading behind the scenes and Over the Counter (OTC).

    Vlog: Crypto Trading/ Market Manipulation/OTC Markets

    OTC money laundering and criminal activity

    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.

  • Cover Protocol ($COVER): peer-to-peer coverage market for DeFi

    Cover Protocol ($COVER): peer-to-peer coverage market for DeFi

    Cover Protocol ($COVER) is one of those projects that can really have a solid impact on the future of decentralised finance (DeFi). Why? Because users want to sleep well knowing that in case of exploits, they won’t lose their money. Trusting the protocols and the team behind them is not enough anymore.

    With the dawn of decentralized finance, more smart contract risks have arisen. Most contracts aren’t audited, and if they are, malicious actors are always on the lookout for a vulnerability in the code. As we have seen in 2020 nothing is really secure, whether it is a protocol built by one of the best developers in crypto space ($EMN) or the code has been audited. Anything can be exploited, and we need to remember it.

    Therefore, investors are cautious of interacting with DeFi protocols for fear of losing funds.


    What is Cover Protocol?

    Cover Protocol is a blockchain-based peer-to-peer coverage market for decentralized finance. The platform allows DeFi users to hedge against risks due to smart contracts’ fallacies (especially useful when farming or staking). Thanks to fungible cover tokens and letting the market itself set coverage prices, the protocol shifts from the need of relying on a bonding curve to determine the cost of being insured.

    Insurance guards against hacks and bug exploits that lead to loss of deposited assets. Notably, Cover doesn’t blindly allow DeFi protocols on their platform. It performs a thorough background check considering its security measures, total value locked and other features, all necessary to determine user risk levels.

    Background

    The project is led by a team with vast experience in blockchain programming and traditional finance. Among the team members we also find Andre Cronje as their advisor.

    Cronje is the founder of Yearn Finance, one of the most successful DeFi protocols. Other notable names associated with the project are PeckShield, Hacken, Farming Lord, and The Arcadia Group, all as CVC (more on them below).

    How does Cover help Defi users?

    Coverage protocols are the solution. These are platforms incentivizing DeFi users and developers to provide decentralized insurance. An excellent example of such a platform is Cover Protocol.

    Cover lets people buy “insurance” for products like Yearn Finance ($YFI) (Learn more about the yEarn Finance ecosystem) and other systems in the DeFi ecosystem. By ensuring systems and users, the protocol provides a critical missing link between DeFi and conventional finance.

    Here we examine how Cover handles insurance in a decentralized industry. In addition, we shall take a look at who’s eligible to use the platform.

    How are Fungible Cover Tokens used?

    Fungible Cover tokens are minted on the platform, when users interacts with the smart contract. Cover determines the protocols to be covered, type of collateral needed, amount of collateral, and insurance length.

    Diagram by Cover Protocol core dev, crypto_pumpkin
    Diagram by Cover Protocol core dev, crypto_pumpkin

    Once a deposit is made into the contract, two types of tokens can be created; CLAIM and NOCLAIM. For the moment, Cover only supports DAI as collateral and keeps a 1:1 ratio between collateral provided and the tokens.

    The two minted tokens work in opposite ways in the system. The CLAIM token enables its holder to receive a payout once a contention is approved. On the other hand, NOCLAIM enables holders to redeem the collateral when a filed petition fails to go through or the token expires after nothing notable has happened to that particular project within the expiration date.

    Each CLAIM-NOCLAIM tokens refer to only one project and provide unique info. Example of denomination (with $CURVE):

    COVER_{Protocol}_{Expiration Date}_{Collateral Currency}_{Nonce}_{Direction}

    Example tokens for a coverage on Curve (has no accepted claim) that expires 12/31/2020:

    Symbol for CLAIM token

    COVER_CURVE_2020_12_31_DAI_0_CLAIM

    Symbol for NOCLAIM token

    COVER_CURVE_2020_12_31_DAI_0_NOCLAIM

    Usually, one DAI equals to one CLAIM + one NOCLAIM token. As such, it gives its holder exposure to both outcomes during a petition. Depending on the result of a filed allegation, the values change. If a claim is approved, CLAIM value goes to 1 and NOCLAIM to 0. The opposite is true viceversa. Holders can deposit the two token types on the Balancer pools.

    Cover Protocol creates two Balancer pools; one with 80% CLAIM coins and 20% collateral token (DAI) and the second with 98% NOCLAIM and 2% DAI. In this way, IL (Impermanent Loss) is minimized. The pools are created once a new cover is launched on the protocol.

    Types of Participants in The Cover Ecosystem

    To give life to the platform, Cover encourages the participation of market makers, insurance providers, and insurance seekers.

    • Market makers – They provide liquidity and hold both types of minted tokens. Market makers receive rewards from fees charged in the respective liquidity pools. Fees charged usually range between 2-3%. Notably, they can liquidate either token at will.
    • Coverage providers – Unlike market makers, they are insurance providers and only hold NOCLAIM coins. Note that they receive both token types like everyone else when they deposit collateral in the system. However, they can sell CLAIM tokens for a premium and retain NOCLAIM coins.
    Coverage Providers (CP) on Cover Protocol
    Coverage Providers (CP) on Cover Protocol

    Fees charged on the NOCLAIM pool act as their incentives. Cover encourages teams seeking insurance for their platform to be insurers to boost trust and confidence in their offering. In the event of a claim payout, they would lose all their funds, since NOCLAIM tokens would become worthless.

    • Insurance seekers – They hold CLAIM coins and insure their deposited funds. Apart from being covered, they’re rewarded for providing liquidity in the CLAIM pool.

    How Does Cover Protocol Handle Claims?

    Allegations are a normal occurrence in insurance-focused products. The network provides a petition filing window of 72 hours after an incident. Although Cover is a decentralized platform, it handles contentions in four simple steps.

    First, a case is brought against an insured product after paying a fee, which Cover calls the Claim File Fee. However, to keep spam attacks and malicious actors at safe distance, the network increases the cost each time a new allegation is filed against an insured product.

    The second phase involves a vote from $COVER holders (more on the token later). If the community votes unanimously in favour of the submission, it goes through to the third step.

    At the third “level”, the Claim Validity Committee (CVC) or Auditors review the petition to determine whether it meets all the requirements. The CVC also deliberates on the payout percentage , which can be up to 100%.

    Note that five auditors review a single contention and half of them must vote in favour of it to be accepted. The last step is for $COVER holders to redeem their payout for the accepted allegation.

    Note that if a case is rejected during the community voting phase, it can be re-filed as a Forced Claim, which is much more expensive. A bulldozed submission goes through the first, third, and fourth steps.

    Cover Token and Governance

    The native currency on Cover Protocol is $COVER. $COVER acts as a governance token and gives access to the Balancer pools. Additionally, as we saw, it allows holders to participate in the claims management subsection.

    System users can use COVER tokens to provide liquidity on SushiSwap via interacting with the ETH-COVER liquidity pool. Depositing the platform’s native currency in this pool opens the door to receiving a percentage of fees from traders plus additional $COVER through staking the LPs on Cover Protocol.

    What makes Cover different from other Insurance Projects?

    Cover Protocol is not the only project users can refer to when looking at ways to protect their investments. The leader in this space is probably still Nexus Mutual.

    As the name implies, it acts more like a classic insurance company. A user looking for a coverage should go on their website and find the right one to buy. He can choose how much to cover and for how long. A key difference is that, to be able to complete the process, a KYC is required. Moreover, this is the only way to buy $NXM, as you can’t find them anywhere else. For general investors who believe in the project but don’t need coverage, there is a wrapped version of the token which is normally tradable, $WNXM.

    CLAIM/NO CLAIM tokens, unlike $NXM, are just normal tokens and are not connected to any identity (no KYC needed). At will, they can be traded or given to anyone you want. Their utility won’t change.

    DEVELOPING STORY: $COVER exploit/hack?

    On 28th December 2020 an attacker exploited a bug in the protocol’s smart contracts. The exploit appears to be an abuse of the minting exploit where the attacker managed to mint 40 quintillion COVER tokens and sold around USD$5 million worth of COVER tokens. Several hours later, one of the attackers returned the stolen funds (i.e. 4,350 ETH) with the message “Next time, take care of your own shit.” and burned the remaining tokens.

    The Team are still investigating the exploit and mentioned they are looking into providing a new $COVER token and how to return the stolen and returned ETH to affected LP tokens.

    Most importantly, the Team are urging people not to buy $COVER tokens. Exchanges such as Binance have stopped trading on $COVER, particularly as a large trading group of 16,000 members had dumped the price to short the token.

    In a community-driven effort to mitigate the damage, Leo Cheng of CREAM has sent out a “call to action” on behalf of COVER and available developers from the yEarn Ecosystem have come together to lend help and support to the Cover Protocol team.

    Post-Mortem and snapshot

    In the following hours, the Cover team has released a post-mortem article to explain what happened in details and confirming that the exploit affected the minting contract and the token only. The lines of code “incriminated” have been always present in the code and went unnoticed during the audit.

    The team acknowledged their fault too in missing the “amplifier”, that allowed for extra rewards to be minted, and announced a snapshot to distribute a new token and the returned funds. The snapshot will will be taken at block 11541218, one block before the first major exploited mint.

    Compensation Plan and new Token

    Affected users of the attack can check their compensation eligibility on this page. Basically, all $COVER holders and liquidity providers of the /ETH pair could be compensated, even those who were keeping their tokens on a CEX. Unfortunately, unclaimed rewards are impossible to withdraw as as the minting rights from the Blacksmith have been removed.

    The team, consequently to brainstorm with advisors including Andre Cronje, has decided to discard the idea of new shield mining. The total supply, with the launch of the new token, will be the same amount that is eligible for migration.

    The Cover v2 Core contracts are undergoing an internal review at the moment and the exploit hasn’t affected the core contracts, so the project will continue with its development.

    On January the 5th the new $COVER token was made available for claim. All the details can be found on the medium page of Cover Protocol.

    Conclusion

    With DeFi smart contracts repeatedly experiencing hacks and exploits from malicious actors, Cover Protocol provides a critical service by allowing DeFi users to insure their deposits and not be worried anymore. Furthermore, encouraging a product team to provide coverage offers insights into whether it believes in its own protocol security. Consequently, it boosts DeFi adoption.

    Incentivized liquidity provision allows coverage providers, seekers, and market makers to receive trading fees charged on respective pools and rewards while helping other users at the same time.

    Updated on January 6

    Decentralised Finance (DeFi) series: tutorials, guides and more

    With content for both beginners and more advanced users, check out our YouTube DeFi series containing tutorials on the ESSENTIAL TOOLS you need for trading in the DeFi space e.g. MetaMask and Uniswap. As well as a deep dive into popular DeFi topics such as decentralized exchanges, borrowing-lending platforms and NFT marketplaces

    The DeFi series on this website also covers topics not explored on YouTube. For an introduction on what is DeFi, check out Decentralized Finance (DeFi) Overview: A guide to the HOTTEST trend in cryptocurrency

    Tutorials and guides for the ESSENTIAL DEFI TOOLS:

    More videos and articles are coming soon as part of our DeFi series, so be sure to SUBSCRIBE to our Youtube channel so you can be notified as soon as they come out!

    Disclaimer: Cryptocurrency trading involves significant risks and may result in the loss of your capital. You should carefully consider whether trading cryptocurrencies is right for you in light of your financial condition and ability to bear financial risks. Cryptocurrency prices are highly volatile and can fluctuate widely in a short period of time. As such, trading cryptocurrencies may not be suitable for everyone. Additionally, storing cryptocurrencies on a centralized exchange carries inherent risks, including the potential for loss due to hacking, exchange collapse, or other security breaches. We strongly advise that you seek independent professional advice before engaging in any cryptocurrency trading activities and carefully consider the security measures in place when choosing or storing your cryptocurrencies on a cryptocurrency exchange.