Boxmining v2

Tag: Ethereum

  • ParaSpace Token Airdrop Guide: LIVE NOW!

    ParaSpace Token Airdrop Guide: LIVE NOW!

    ParaSpace recently introduced an incentive program in which users’ actions and activities earn points that can be redeemed for ParaSpace governance tokens through an airdrop when the token launches. Moreover, users have the opportunity to receive a 300% boost in points accumulation until June 30, 2023. In this article, we will explain what ParaSpace is and what you can do position yourself for the airdrop.

    ParaSpace Airdrop Step-by-Step Guide

    1. Connect Wallet to ParaSpace App
    2. Supply ERC-20 or ERC-721 Tokens to ParaSpace
    3. Liquidate NFTs
    4. Borrow ERC-20 Tokens
    5. Stake ApeCoins ($APE) in Auto Compound Pool
    6. Stake NFTs in Auto Compound Pool
    7. Use Share Staking Pool
    8. Buy NFT with Credit

    More in-depth details can be found below!

    What is ParaSpace?

    ParaSpace is a cross-margin NFT lending protocol that enables users to borrow ETH, stablecoins, and supported ERC-20 tokens against various crypto assets such as blue-chip NFTs, ERC-20 tokens, and Uniswap V3 LPs. The platform allows NFT owners to lend and borrow ERC-20 tokens against a diverse array of non-fungible investments, while ERC-20 holders can earn yields through lending against NFTs.

    According to DefiLlama, ParaSpace is the second largest NFT lending protocol in total value locked ($100.5 million) at the time of writing. It is also the sister company of Parallel Finance ($PARA), and both platforms have been audited by some of the top smart contract security firms such as Certik, Trail of Bits, and Veridise.

    Does ParaSpace have a Token?

    ParaSpace does not have a token yet, but has confirmed that it will launch a governance token in the future. Token holders will be a part of the platform’s decentralized autonomous organization (DAO).

    How to Get ParaSpace Token Airdrop?

    ParaSpace recently announced an incentive program where users’ actions and activities are rewarded with points that will be redeemed for ParaSpace governance token via airdrop when the token launches. Additionally, users can enjoy a 300% boost for earning points until 30th June, 2023. Here’s a step-by-step guide:

    1. Connect Wallet to ParaSpace App

      Connect your MetaMask or other supported wallets to app.para.space. The network is Ethereum Mainnet. You will need ERC-20 tokens or ERC-721 (NFTs) to interact with the protocol. Make sure you have enough ETH to cover gas fees.

    2. Supply ERC-20 or ERC-721 Tokens to ParaSpace

      If you own any blue-chip NFTs such as Bored Apes or CryptoPunks, you can supply them to the protocol to earn yields. Click the “supply” button on the main page.

      Similarly, you can also lend out ERC-20 tokens to earn yields.

    3. Liquidate NFTs

      You can perform liquidations for both the user account and tokens held within the account in the Liquidation section.

    4. Borrow ERC-20 Tokens

      You can borrow ERC-20 tokens from the protocol, but you will first need to supply NFTs or ERC-20 tokens as collateral.

    5. Stake ApeCoins ($APE) in Auto Compound Pool

      You can stake your $APE in the ParaSpace ApeCoin Pool to earn high APY rewards. You can also borrow $APE to stake if you don’t have any.

    6. Stake NFTs in Auto Compound Pool

      For NFT owners with or without ApeCoins, you can stake your NFTs in the NFT Staking Pools to earn $APE.

    7. Use Share Staking Pool

      You can create $APE listings or NFT listings for the Share Staking Pool. This allows you to find other users to match with your assets for staking purposes and share the APY rewards.

    8. Buy NFT with Credit

      You can also buy listed NFT collections with ETH in the ParaSpace marketplace.

    Airdrop Review

    When reviewing an airdrop, there are several factors to consider. First, the likelihood the project will even do an airdrop in the first place. Then, to look at how many tokens the project intends to allocate towards airdrop campaigns, as well as the difficulty in participating in their airdrop. It is also important to look at the utility of the token so that there will be an actual use and purpose in participating in the airdrop in the first place. Finally, a factor to consider when reviewing an airdrop is whether the airdropped tokens are subject to any lockup period.

    Likelihood of Airdrop: ParaSpace has confirmed users’ actions and activities will be rewarded with points that will be redeemed for ParaSpace tokens via airdrop when the token launches. Additionally, users can enjoy a 300% boost for earning points until 30th June, 2023.

    Airdropped Token Allocation: ParaSpace is still designing its tokenomics for long-term sustainability.

    Airdrop Difficulty: It is recommended to engage in this activity only if you have experience borrowing and lending Ethereum NFTs. You will need ERC-20 tokens or ERC-721 (NFTs) to interact with the protocol. You will also need some ETH to cover gas fees.

    Token Utility: The ParaSpace token will be used for governance of the lending protocol.

    Token Lockup: Details of token lockup period is not yet available.

  • SoonSwap ($SOON) Token Airdrop Guide: Ends 31 March!

    SoonSwap ($SOON) Token Airdrop Guide: Ends 31 March!

    SoonSwap is giving away 2.1 million $SOON tokens in airdrop rewards. To qualify, you will need to sign up and complete simple tasks by 31st March 2023. In this article, we will explain what SoonSwap is and what you can do to position yourself for the airdrop.

    SoonSwap ($SOON) Airdrop Step-by-step Guide

    Here’s how to receive a potential SoonSwap ($SOON) airdrop:

    1. Follow and retweet SoonSwap on Twitter.
    2. Join SoonSwap Discord.
    3. Join SoonSwap Telegram.
    4. Link your ERC20 wallet address.
    5. Get extra entries with a referral link.

    See below for more details

    What is SoonSwap?

    SoonSwap is an Ethereum-based NFT marketplace that operates on a decentralized automated market maker (AMM) system. The platform combines an order book matching mechanism with an AMM liquidity pool to enhance pricing discovery mechanisms and simplify NFT asset trading. With SoonSwap, NFTs can be traded more efficiently and at better prices, promoting increased accessibility and liquidity for users.

    The platform also offers users the ability to exchange NFTs for tokens and vice versa, while also providing a passive income opportunity to users and community members through farming actively adding liquidity to the AMM LP pools.

    Does SoonSwap have a Token?

    Yes, SoonSwap confirmed in its document that there will be a $SOON token. It serves as a certificate for community participation in governance, allowing holders to vote on proposals, allocate liquidity incentives, and initiate upgrade proposals. (sweet-factory)

    According to the tokenomics, the total supply of $SOON is 1 billion tokens, and 2% of it is allocated to early adopters as airdrop rewards.

    How to Receive $SOON Airdrop?

    Sign up on SoonSwap Airdrop Gleam page and complete the following tasks to earn entries for the airdrop reward:

    1. Follow and retweet SoonSwap on Twitter.
    2. Join SoonSwap Discord.
    3. Join SoonSwap Telegram.
    4. Link your ERC20 wallet address.
    5. Get extra entries with referral link.

    The higher entries you have, the more likely you will receive the airdrop. SoonSwap confirmed that the top 7,000 participants will be rewarded with $SOON.

    Airdrop Review

    When reviewing an airdrop, there are several factors to consider. First, the likelihood the project will even do an airdrop in the first place. Then, to look at how many tokens the project intends to allocate towards airdrop campaigns, as well as the difficulty in participating in their airdrop. It is also important to look at the utility of the token so that there will be an actual use and purpose in participating in the airdrop in the first place. Finally, a factor to consider when reviewing an airdrop is whether the airdropped tokens are subject to any lockup period.

    Likelihood of Airdrop: SoonSwap is airdropping 2.1 million $SOON tokens to participants who signed up for the Gleam page before 31st March 2023.

    Airdropped Token Allocation: 2% of the total $SOON supply (1 billion) is allocated to airdrops.

    Airdrop Difficulty: The tasks on the Gleam page are very easy to complete.

    Token Utility: $SOON serves as a certificate for community participation in governance, allowing holders to vote on proposals, allocate liquidity incentives, and initiate upgrade proposals.

    Token Lockup: 50% at TGE and 50% after 3 months’ cliff.

  • Opyn Token Airdrop Guide: How to Qualify for Potential Snapshot

    Opyn Token Airdrop Guide: How to Qualify for Potential Snapshot

    Opyn is an options trading platform built on Ethereum. It currently does not have a token, but the team announced on Discord that they will consider launching one as the protocol matures. As early users, we are in an opportune position to potentially earn massive token rewards. In this article, we will explain what Opyn is and what you can do to position yourself for the airdrop.

    Opyn Airdrop Step-by-step Guide

    Here’s how to receive a potential Opyn token airdrop:

    1. Connect Wallet to Opyn
    2. Trade Squeeth (oSQTH Token)
    3. Deposit on Crab USDC Strategy
    4. Deposit on Zen Bull ETH Strategy
    5. Provide Liquidity on Uniswap V3 SQTH-ETH Pool

    See below for more details

    What is Opyn?

    Opyn is a DeFi options trading protocol that allows users to buy, sell or create options on ERC-20 tokens. It is powered by Squeeth, short for squared ETH, which is a derivative contract that tracks the index of ETH². This allows traders to make a leveraged bet on ETH, while also having protection from losses and not needing to worry about being forced to sell.

    Does Opyn have a Token?

    As of now, Opyn does not have a token yet. However, the team announced on Discord that they plan to launch one down the line as the protocol becomes more decentralized. Moreover, they also mentioned that most of the tokens will be distributed to the community, DAO, or in the form of grants. This means airdrop opportunities for early users of the protocol!

    How to Receive Potential Opyn Token Airdrop?

    The best chance to receive a potential Opyn token airdrop is to trade Squeeth (oSQTH token) or use deposit strategies on the platform. It is on the Ethereum mainnet, so you will need some ETH for trading and gas fees. Here’s a step-by-step guide:

    1. Connect Wallet to Opyn

      Go to opyn.co and connect your MetaMask or other supported wallets. Switch the network to Ethereum, and have some ETH ready.

    2. Trade Squeeth (oSQTH Token)

      Use ETH to buy oSQTH at opyn.co/squeeth. You can enter a long or short position, and it will tell how much your profit/loss and breakeven point is if ETH price goes up or down.

      You can see all of your open positions at opyn.co/positions, and close them anytime.

    3. Deposit on Crab USDC Strategy

      You can earn yields on your USDC on opyn.co/strategies/crab. It is worth noting this strategy favors sideways market conditions for ETH, hence its name.

    4. Deposit on Zen Bull ETH Strategy

      You can earn yields on your ETH on opyn.co/strategies/bull. This strategy favors low volatility markets where the price of ETH trends upwards.

    5. Provide Liquidity on Uniswap V3 SQTH-ETH Pool

      You can provide SQTH-ETH liquidity at Uniswap via opyn.co/lp. It gives you exposure to ETH 1.5x leverage, but you give up some of your Squeeth in exchange for trading fees.

    Airdrop Review

    When reviewing an airdrop, there are several factors to consider. First, the likelihood the project will even do an airdrop in the first place. Then, to look at how many tokens the project intends to allocate towards airdrop campaigns, as well as the difficulty in participating in their airdrop. It is also important to look at the utility of the token so that there will be an actual use and purpose in participating in the airdrop in the first place. Finally, a factor to consider when reviewing an airdrop is whether the airdropped tokens are subject to any lockup period.

    Likelihood of Airdrop: Opyn doesn’t have a token yet, but the team mentioned that they will launch one as the protocol grows in the future.

    Airdropped Token Allocation: The team mentioned that most of the tokens will be distributed to the community, DAO, or in the form of grants. This means airdrop opportunities for early users of the protocol!

    Airdrop Difficulty: The steps are easy to complete, but it will require ETH.

    Token Utility: Token utilities are unknown.

    Token Lockup: There are no available tokenomics yet.

  • Onchain Trade ($OT) Token Airdrop Guide: LIVE NOW!

    Onchain Trade ($OT) Token Airdrop Guide: LIVE NOW!

    Onchain Trade has deployed its beta on Arbitrum and zkSync, and users of the protocol can potentially qualify for an airdrop. In this article, we will explain what Onchain Trade is and what you can do to position yourself for the airdrop.

    Onchain Trade ($OT) Airdrop Step-by-Step Guide

    Here’s how to get a potential Onchain Trade ($OT) airdrop:

    1. Buy $OT on Onchain Trade Website
    2. Connect Wallet to Arbitrum or zkSync
    3. Claim Goerli ETH from Faucets
    4. Claim Testnet Tokens on Onchain Trade
    5. Trade on Onchain Trade
    6. Provide Liquidity on Onchain Trade
    7. Stake Assets on Onchain Trade

    See below for more details.

    What is Onchain Trade?

    Onchain Trade is a new perpetual decentralized exchange (DEX) that offers single token liquidity pools instead of the traditional token pairs in automated market makers (AMMs). This is done by grouping deposited tokens with its native OSD algorithmic stablecoin to form a virtual pair. This approach reduces the risk of impermanent loss, allowing for better capital efficiency for traders, liquidity providers, and third-party projects.

    What is Backing the Peg of OSD Stablecoins?

    OSD is backed by all the assets in liquidity pools that have a positive OSD balance as well as the treasury. When users trade, they use a starting price to form a pricing curve, similar to Uniswap. However, unlike Uniswap, they only need to use one token instead of two. By essentially connecting all assets to OSD, the protocol aims to maintain stability and avoid sharp price fluctuations seen in other algorithmic stablecoin projects, most notably Terra Luna.

    It is important to note that algorithmic stablecoins are still deemed unstable because of its dependency on strong liquidity and market mechanisms. If a large investor were to take actions that significantly impacted the supply or demand of the asset, it could potentially affect the stability of the algorithmic stablecoin.

    Does Onchain Trade have a Token?

    Yes, Onchain Trade has confirmed in its document that there will be an $OT token. $OT is the governance token of the protocol and it has a non-transferable staking counterpart called vOT. $OT has a total supply of 100 million tokens and it will be launched on Arbitrum.

    According to the tokenomics, 50% will be allocated to liquidity/trading incentive and airdrops. Additionally, 10% will be up for public sale (IFO) from 10th March to 17th March 2023. $OT holders will also be eligible for an airdrop!

    How to Receive $OT Token Airdrop?

    The best way to receive $OT airdrop is to participate in the IFO and interact with their beta testnet. Here’s a step by step guide:

    1. Buy $OT on Onchain Trade Website

      Public sale will take place on the Onchain Trade website between 10th March and 17th March 2023. $OT holders will be eligible for an airdrop.

    2. Connect Wallet to Arbitrum or zkSync

      Go to beta.onchain.trade and connect your MetaMask. Switch the network to Arbitrum Goerli or zkSync Era Goerli (or Alpha Testnet if you added the RPC last year).

    3. Claim Goerli ETH from Faucets

      Claim Goerli ETH on goerli.portal.zksync.io/faucet for zkSync and faucet.triangleplatform.com/arbitrum/goerli for Arbitrum.

    4. Claim Testnet Tokens on Onchain Trade

      Click “Test tokens” at the top right side of the screen. Afterwards, you can see your account balance at beta.onchain.trade/portfolio.

      If you want to see it in your MetaMask, you will need to import the contract address of the tokens to see your account balance. To do this, click the transaction hash and it will redirect you to the block explorer, where you can copy and paste the information to your MetaMask.

    5. Trade on Onchain Trade

      Go to beta.onchain.trade/trade to swap tokens including OSD stablecoins, enter long positions, and short positions.

    6. Provide Liquidity on Onchain Trade

      Go to beta.onchain.trade/pools and select any available asset you want to deposit. After depositing, you will receive a single LP token. You can also use the borrow and repay feature.

    7. Stake Assets on Onchain Trade

      After providing liquidity, you can stake your LP tokens as well as $OT at beta.onchain.trade/earn. You can also use the borrow mining feature after borrowing assets.

    Onchain Trade ($OT) Token Airdrop Review

    When reviewing an airdrop, there are several factors to consider. First, the likelihood the project will even do an airdrop in the first place. Then, to look at how many tokens the project intends to allocate towards airdrop campaigns, as well as the difficulty in participating in their airdrop. It is also important to look at the utility of the token so that there will be an actual use and purpose in participating in the airdrop in the first place. Finally, a factor to consider when reviewing an airdrop is whether the airdropped tokens are subject to any lockup period.

    Likelihood of Airdrop: Onchain Trade has confirmed in its document that there will be an airdrop.

    Airdropped Token Allocation: 50% of the total $OT supply will be allocated to liquidity/trading incentives and airdrop. An additional 10% will be airdropped to holders who buy $OT in the public sale from 10th March to 17th March 2023.

    Airdrop Difficulty: The steps are relatively easy. You can buy $OT in the public sale for more airdrops or you can interact with their beta testnet to qualify for the snapshot.

    Token Utility: $OT is the governance token of the protocol and it has a non-transferable staking counterpart called vOT.

    Token Lockup: The $OT tokens allocated for incentives will follow a 2 to 5 year vesting schedule. The team is allocated 20% of the total supply, which will be locked for the first three months and then distributed linearly over the next 24 months, resulting in a total lock-up period of 27 months.

  • Visa Auto-Payment on Ethereum: The Complete guide

    Visa Auto-Payment on Ethereum: The Complete guide

    Visa on Ethereum Blockchain

    Visa payment is proposing to use Ethereum and Smart Contracts as an Auto-payments platform in order to increase efficiency and speed. The company published a technical paper detailing its plan to develop an automatic payment system for self-custodial wallets on the Ethereum network. This would enable Ethereum users to schedule auto-payments from their own self-custodial wallets, making online bill payments possible via blockchains. This comes at a very critical time as Ethereum is currently in a series of network upgrades, dubbed “Ethereum 2.0“, that will drastically increase its network efficiency and capacity.

    Visa is also innovating using Ethereum’s account abstraction — combining Ethereum’s user accounts and smart contracts into one account type which allows smart contract functions including pre-scheduled executions for recurring payments. This not only progresses blockchain technology but also brings real-world applications for the general public.

    Limited Payment Options on Blockchain Networks

    Existing blockchain infrastructures do not have the core functionality for auto-payments. In order to send funds to another address, all crypto users must generate a cryptographic signature via their private key. This is an example of push payments, where a payment transaction is manually triggered by the payer. It requires time and attention from the payer.

    On the other hand, there is pull payments, where a payment transaction is triggered by the payee. Automatic online bill payments are an example of this. Most of our recurring payments today are done directly on mobile banking applications or charged on our credit/debit cards. It is very convenient as users do not have to manually settle bills every month.

    Large blockchain networks such as Bitcoin and Ethereum support push payments but do not natively support pull payments. Additionally, users might be unwilling to hand over their private keys to a third-party custodian for monthly bill payments. Therefore, Visa has found a solution to enable pull payments on Ethereum, giving users full control over their scheduled payments.

    Smart Contract Auto-Payments

    Visa leverages the concept of Ethereum’s account abstraction to provide self-custodial wallets with automatic recurring payment capability. Instead of hard-coding validity conditions into the Ethereum protocol that applies to all transactions, validity conditions can be programmed in a customizable way into a smart contract on a per-account basis. This means that users would be able to create a whitelist of pre-approved auto-payments on a “delegable account.” This would not require the owner’s signature every time a payment is made.

    Furthermore, Visa also believes account abstraction has other real-world applications beyond just recurring payment such as account recovery services, multi-owner accounts or even public accounts where anyone could make a transaction. But the technology is still nascent and a lot of research needs to be done around fundamental aspects important for digital payments such as security and scalability, which are crucial for crypto adoption.

    Other payment competitors

    As one of the world’s largest payment networks, Visa is actively getting involved in the crypto ecosystem, looking for ways to expand their capabilities within blockchain payments. This could be a huge step towards mass adoption as traditional financial leaders are seeing the potential of crypto in the long-term future of digital payments.

    In fact, more and more global financial services are getting involved in the crypto ecosystem. Last week, PayPal is partnering with MetaMask to allow users to purchase ETH directly in their wallet via PayPal. On another note, Cash App, the number one finance app in the App Store, has also added support for transactions via the Bitcoin Lightning Network.

    FAQ

    What is Visa proposing?

    Visa is proposing a technical paper detailing their plan to develop an automatic payment system for self-custodial wallets on the Ethereum network. This would enable Ethereum users to schedule auto-payments from their own self-custodial wallets, making online bill payments possible via blockchains.

    How does Visa’s solution work?

    Visa leverages the concept of Ethereum’s account abstraction to provide self-custodial wallets with automatic recurring payment capability. Instead of hard-coding validity conditions into the Ethereum protocol that applies to all transactions, validity conditions can be programmed in a customizable way into a smart contract on a per-account basis. This means that users would be able to create a whitelist of pre-approved auto-payments on a “delegable account.”

    What are the benefits of Visa’s solution?

    Visa’s solution would enable pull payments on Ethereum, giving users full control over their scheduled payments. It also has other real-world applications beyond just recurring payment such as account recovery services, multi-owner accounts or even public accounts where anyone could make a transaction.

    What other companies are getting involved in the crypto ecosystem?

    PayPal is partnering with MetaMask to allow users to purchase ETH directly in their wallet via PayPal. Cash App, the number one finance app in the App Store, has also added support for transactions via the Bitcoin Lightning Network.

    What is the potential impact of Visa’s solution?

    Visa’s solution could be a huge step towards mass adoption as traditional financial leaders are seeing the potential of crypto in the long-term future of digital payments. It could also open up more real-world applications for the general public.

  • Flare Launches Layer-1 Oracle Network with FLR Token Airdrop

    Flare Launches Layer-1 Oracle Network with FLR Token Airdrop

    Flare, a new layer-1 Ethereum Virtual Machine (EVM) blockchain has gone live with the launch of two core protocols as well as its FLR token airdrop. All existing XRP holders from participating crypto exchanges including Binance, Bybit, Kraken, and OKX have been distributed FLR tokens. The airdrop marks one of the largest token distributions in crypto history, with over a million users receiving 4.279 billion FLR tokens.

    Source: Twitter (Flare Community)

    Flare FLR Token Airdrop Details

    The initial airdrop began at 23:59 UTC on January 9, representing 15% of the FLR’s total token distribution. The remaining 85% of tokens will be distributed over the next 36 months according to the community vote on Flare Improvement Proposal 01 (FIP.01). If passed, the proposal would place a hard cap on FLR’s annual inflation at 5 billion tokens per annum.

    Over 4.28 billion Flare ($FLR) tokens were airdropped to XRP holders holding at least 1 XRP based on a snapshot taken in December 2020. FLR tokens were distributed at 1:1, meaning that XRP holders received 1 FLR for every 1 XRP held.

    Fortunately, Celsius Network (which is now bankrupt) obtained Court approval for XRP token holders to also receive the Flare ($FLR) token airdrop.

    What is Flare Network?

    The Flare network serves as an oracle network that allows developers to build apps that are interoperable with the internet and other blockchains. It leverages two interoperable protocols to power its application-building suite: the State Connector and the Flare Time Series Oracle (FTSO).

    • State Connector

    According to their white paper, the State Connector protocol enables smart contracts to interact securely with information and data from other blockchains and internet sources. This function offers powerful data to the network in a decentralized manner on-chain, facilitating the development of cross-chain solutions.

    • Flare Time Series Oracle (FTSO)

    The Flare Time Series Oracle (FTSO) provides prices and data series to DApps running on the layer-1 blockchain without relying on centralized data providers. It is essentially a decentralized data feed oracle that sources data from many independent data providers. In conjunction with the State Connector, it provides inputs for DeFi platforms as DApps can access timely information across different blockchains easily.

    Key Takeaway

    Flare initiated its token airdrop on Jan. 9, with 4.27 billion FLR tokens distributed to millions of existing XRP holders across various cryptocurrency exchanges including Bybit, Binance, Kraken, and OKX.

    The initial token distribution released 15 percent of the full public token allocation, with the remainder set to be released monthly over 36 months. The allocation method for the remaining token supply will be settled by a community vote through the Flare Improvement Proposal 01 (FIP.01).

    Flare Network is a layer-1 EVM blockchain that serves as an oracle network to provide developers a platform to build interoperable DApps such as DeFi solutions.

    Other Upcoming Token Airdrops!

    Hunting token airdrops is a great way to earn free money. There are many highly anticipated token airdrops that can get you to earn as high as $5000, including zkSync, Arbitrum, Quai Network, LayerZero, and zkLend.

  • Ethereum Censorship Explained: Your Stablecoins Can Be Frozen Without Warning

    Ethereum Censorship Explained: Your Stablecoins Can Be Frozen Without Warning

    If you hold stablecoins on Ethereum or other EVM platforms, you must be aware of this smart contract feature…

    Token Issuers on Ethereum Can Freeze Your Funds Without Notice

    In order to issue tokens on EVM platforms including Ethereum and Polygon, the first step is deploying a smart contract, which is then used for transferring tokens. However, the token issuer can define support for transaction censorship and token freezing in the contract. This is how Circle, the issuer of USDC, froze 75,000 USDC in user funds with ties to Tornado Cash, in compliance with U.S. sanctions.

    Not many users are fully aware of this feature. This can be compared to how traditional banks have the authority to freeze your funds without notice. If the stablecoin ecosystem depends on a centralized entity for issuing tokens, it could prove to be risky for all crypto users.

    USDT and USDC — Regulatory Compliant Stablecoins

    Paxos and Circle, the issuer of USDT and USDC respectively, are required to comply with regulators in order to be allowed to tokenize US dollars on blockchain platforms. One of the major regulators is the Office of Foreign Assets Control (OFAC), who not just sanctioned Tornado Cash, but also oversees Ethereum block validations.

    It is important to note that regulations for the crypto industry is not necessarily bad. They protect the interests of investors and prevent fraudulent activities. However, this is in conflict with the basic principles of decentralization, especially when user funds are on the line.

    How are Transactions Censored on Ethereum?

    Although a deployed smart contract can never be stopped or otherwise manipulated by a third party, token issuers, however, can write whatever they want in smart contracts, including censorship features. Here’s how:

    In order to mint fungible tokens on Ethereum, developers must follow the ERC token standards including the ERC-20 (token), ERC-721 (NFT) or ERC-1155 (multi-token). These standards define a common list of rules that EVM tokens should adhere to. A customized and deployed smart contract is then used each time tokens move from address to address. However, a smart contract can define any behavior that the EVM will allow, which includes the ability to censor transactions based on a blacklist or freezing an account. As a result, any Ethereum user may lose the ability to spend or use the tokens in any way. This is what the smart contract for USDT looks like:

    Source: cexplorer.io

    As shown in the image above, Paxos has the power to blacklist token owner accounts and burn their funds. Of course, one could argue that this is for our safety, freezing the account of someone who has been involved in criminal activity. After all, the blockchain industry should not be a way for criminals to circumvent the law. But herein lies the dilemma: how is decentralized finance (DeFi) different from traditional finance if we still have to trust the system?

    Key Takeaway

    It is true that certain censorship features in place help protect investors’ interest, but the blockchain industry is meant to be different from the traditional financial world. Take the Tornado Cash incident for example, one of the developers was arrested for simply writing code, and several users who used Tornado Cash without malicious intention ended up having their funds frozen.

    If we blindly accept the rules of the existing system, we will not be able to create anything innovative. It is not true self-custody if a third party can control the tokens you have in your own wallet. Nevertheless, the blockchain industry is still in its infancy, and if we are being pragmatic, a common ground must be reached between crypto users and regulators. For DeFi to move forward, we can only construct a system that remains decentralized and that regulators have no objections to.

  • Will Bitcoin (BTC) Market Rally Continue Throughout Q1 2023?

    Will Bitcoin (BTC) Market Rally Continue Throughout Q1 2023?

    It has been an explosive week for the crypto market, as most cryptos see double-digit gains for the first time since the FTX contagion started in November 2022. This rally was led by Bitcoin (BTC) and Ethereum (ETH), which surpassed the $21,000 and $1,590 mark respectively. It is important to understand what factors are causing these uptrends, so that we, as investors, can recognize and capitalize on these patterns.

    Why is Bitcoin (BTC) Pumping in January 2023?

    Over the past week, Bitcoin has seen large numbers of purchases with robust trading volume. According to Glassnode, the exchange outflow volume of BTC has hit an early year-to-date high, with nearly $300 million worth of withdrawn BTC moving into crypto wallets. Moreover, most of these withdrawals were made in large installments ranging from $1 million to $10 million of BTC. This is corroborated by on-chain aggregator Santiment, where Bitcoin whales have been loading up their wallets with a lot of BTC, suggesting institutional action.

    Across the broader crypto market, more than $1.3 billion of crypto assets in short positions were liquidated over the past 8 days, according to data sourced from Coinglass. Additionally, more than 200,000 traders were liquidated, with the most significant liquidation being a $6.84 million short position against Bitcoin, contributing to the surging price movement in the crypto market.

    Apart from market activities within the space, there are other macroeconomic conditions that contribute to Bitcoin’s pump.

    Inflation Slowing Down According to U.S. Consumer Price Index (CPI)

    The price surges in the crypto market also reflects the market’s expectations that inflation is cooling ahead of the release of the U.S. Consumer Price Index (CPI) data. Bitcoin began the week trading at $17,207 and has since seen an upward trajectory, with the CPI report meeting market expectations indicating that inflation in the U.S. economy is slowing. Other equities markets have also responded positively as a result.

    Investors are now anticipating comments from the Federal Reserve which should hint at future policy, including the size of interest rate hikes. The Federal Open Market Committee (FOMC) meeting will be held between January 31 and February 1. According to CME FedWatch Tool, the committee is currently expected to yield a hike of 25 basis points istead of the previous 50 basis points.

    Now, the prevailing narrative is that U.S. inflation has peaked in 2022, which means softer rate hikes going forward. This stimulates all economic activities including in speculative markets, but with the crypto industry, any surprises could spark additional volatility.

    Bitcoin Halving Event in 2024

    Another factor contributing to Bitcoin’s pump this month is the upcoming Bitcoin halving event in 2024, in which Bitcoin rewards to miners are cut in half. This event occurs after every 210,000 blocks are created, which is roughly every four years. Around next year, miner’s payout will be reduced from 6.25 BTC to 3.125 BTC.

    Historically, halving events have been seen as a positive sign for Bitcoin’s price, as it helps to contract the supply of BTC. This is due to the fact that Bitcoin has a fixed supply, and the halving event directly relates to Bitcoin’s deflationary tendency, driving its price up as a result of supply and demand mechanisms. According to Coindesk, we can see from Bitcoin’s halving history, the events have always been able to establish long-term bullish drivers for Bitcoin’s price.

    Correlation with the U.S. Dollar Index (DXY)

    Another factor contributing to Bitcoin’s price movement is its relationship with the U.S. Dollar Index (DXY). The crypto market generally correlates negatively to the DXY due to the purchasing power of fiat currencies. When the DXY declines, investor sentiment for riskier assets such as crypto tends to increase. This year, the DXY dropped to seven-month lows, momentum has slowed as it is beginning to retract. Typically when this happens, it is followed by Bitcoin price moving in the opposite direction.

  • The Flippening: Will Ethereum Overtake Bitcoin in 2023?

    The Flippening: Will Ethereum Overtake Bitcoin in 2023?

    The Flippening Narrative: Bitcoin vs Ethereum

    The concept of the “Flippening” has been increasingly gaining traction in the crypto space. It refers to the hypothetical moment when Ethereum (ETH) surpasses Bitcoin (BTC) as the most valuable cryptocurrency by market capitalization. The Flippening is important because it would signify a major shift in the overall direction of the crypto landscape, signalling a change in investor sentiment and adoption patterns.

    https://www.youtube.com/watch?v=0lQ8bz9QRBo

    While the Flippening is not set in stone, there are compelling data that indicate it is coming, and sooner than you think… Here’s why:

    The Case for Bitcoin

    Being the world’s first cryptocurrency, Bitcoin has maintained its throne on the crypto market since its genesis block in 2009. It is often considered as the safest digital store of value by investors, with its limited supply structure similar to the scarcity of gold, hence its nickname “digital gold.” As such, Bitcoin is usually the primary choice of cryptocurrency for financial institutions looking to get involved. As far as mainstream adoption goes, Bitcoin has led the way so far.

    However, Bitcoin’s Proof-of-Work (PoW) consensus model is highly energy-intensive, sparking criticisms of the network’s impact on the environment. Additionally, the usage of Bitcoin is only limited to exchanging and storing value. This is where Ethereum has much more to offer.

    The Case for Ethereum

    As the second most valuable cryptocurrency, Ethereum is designed to be used as the foundation of a decentralized, blockchain-based internet — an idea that is become known as Web3. Apart from exchanging and storing value, Ethereum introduced smart contract functionalities that allows developers to do all kinds of innovative and creative things on the network. This brought about a proliferation of financial products that have enabled a much broader range of investors.

    Ethereum earned its nickname “digital oil” because it is a utility-based asset like oil, fuel or gas, and its value is largely dictated by supply and demand mechanisms. Similar to how the world’s global supply chain is fueled by crude oil, Ethereum lays at the heart of the Decentralized Finance (DeFi) space as well as GameFi and Non-Fungible Token (NFT) market. And as the Web3 landscape progresses, demand will increase as more and more people are recognizing the potential of a decentralized internet. It is only a matter of time when Web2 evolves to Web3, and Ethereum is at the centre of that.

    Do “Ethereum Killers” Hinder the Flippening?

    It is worth noting that Ethereum faces competition from other prominent layer-1 blockchains such as Aptos, Cardano, Solana, BNB Chain, Polkadot, and Avalanche. There is a trending “Ethereum Killer” narrative in which user adoption will be distributed amongst these blockchains instead of focusing on Ethereum only. However, most of these blockchains in fact depend on Ethereum, as one way or another they are associated with the network’s smart contract. As shown in the image below by Cryptowatch, all of the top layer-1 blockchains are closely correlated with Ethereum’s price action.

    Comparing Market Share between Bitcoin and Ethereum

    As of 11th January 2023, Ethereum’s market share increased by 3% among global crypto assets, signalling its dominance on the rise. According to Coinmarketcap, Ethereum’s market dominance is at 19%, valued at around $856 billion. On another note, Coingecko’s metrics were slightly different, indicating Ethereum’s dominance at 18.3%. But both aggregation websites show that Bitcoin’s market dominance is decreasing, from 40% to 38%.

    It is unclear whether this trend will continue, but according to data sourced from Blockchain Center, the Flippening has been on an uptrend since July 2021. And we are nearly halfway for it to happen. It is also worth noting that Ethereum came closest to the Flippening in 2017, when Bitcoin’s market dominance’s dropped by 40.6% and Ethereum took over 32% of the market amidst the situation.

    In reference to the data provided by Blockchain Center, there are also other metrics apart from market cap that determines the Flippening. As of now, Bitcoin is still by far superior in trading volume, which is a crucial metric for adoption usage. However, Ethereum has Bitcoin beat in active addresses, transaction count and volume, and total USD transaction fees.

    Outperformance of Ethereum will be primarily driven by the strength of its post-Merge fundamentals. The upcoming Shanghai Upgrade will significantly reduce the risk and opportunity cost of staking ETH, which is likely to attract participation from more crypto users.

    Key Takeaway

    Despite Ethereum’s increasing adoption and market dominance, Bitcoin still reigns supreme in the crypto space. In fact, Bitcoin saw significant adoption in 2021-2022 from retail and institutional investors, public companies, and even countries. As of now, El Savador and the Central African Republic (CAR) have adopted Bitcoin as a legal currency. This is a monumental step towards mainstream adoption.

    But that is not to say the Flippening will never happen — it is certainly a possibility. After all, both Bitcoin and Ethereum have different visions. Bitcoin aims to become the global reserve currency, whereas Ethereum aims to become the infrastructure of a global digital economy. The Technology Acceptance Model (TAM) applies to both assets, but it all comes down to supply and demand mechanisms. If demand in digital money is higher, then Bitcoin dominates. But if demand in utility-based asset in building out a decentralized ecosystem is higher, then Ethereum is generally favored.

  • Bitcoin Price Dips After Fed’s December Meeting Minutes Release

    Bitcoin Price Dips After Fed’s December Meeting Minutes Release

    The Federal Reserve’s December meeting minutes revealed the central bank’s plans to continue raising the federal funds rate to control rising inflation. This could potentially impact the crypto market as economic activity is further tightened, signalling consumers and investors to save money and mitigate risk. Shortly after the news, the price of Bitcoin and Ethereum had dropped momentarily before bouncing back to the $16800 and $1250 range respectively.

    Key Takeaways:

    • Feds opted to raise interest rates by 50 basis points, putting the target range for federal funds rate to 4.25%-4.5%.
    • The new restrictive policy in place will fight inflation, but it also tightens economic activity including investments in the crypto market.
    • The price of Bitcoin and Ethereum dropped 1% after the Federal Reserve’s December meeting minutes were released.
    • The Fed’s minutes noted the collapse of digital asset exchange FTX, but said it didn’t have a serious effect on the wider financial system.

    Fed Signals Hawkish Interest Hikes in 2023

    The Federal Open Market Committee (FOMC) and Federal Reserve officials concluded its December 13-14 meeting, publishing new projections for expected inflation in 2023 which is higher than previously anticipated. Against the macro backdrop, Fed officials agreed to raise interest rates by 50 basis points, putting the target range for the federal funds rate to 4.25%-4.5%.

    Higher interest rates mean higher borrowing costs, which in turn affects consumer spending and investments in speculative markets including the stock market and crypto market. The news of the Fed’s plans to continue raising interest rates has caused investors to be cautious, as they are wary of its potential impact on the crypto market. Occasions such as this would prompt traders and investors to sell U.S. equities as well as Bitcoin and other digital assets to mitigate risk.

    This caused the price of Bitcoin to dip nearly 1%. Ethereum, the second largest digital asset by market cap, also dropped by 1%. According to Cryptowatch, the correlation between Bitcoin and Ethereum sits strong at 0.82. Therefore, it is expected that Ethereum will mirror Bitcoin’s price movement.

    Despite the dip, Bitcoin is still up 0.4% in the past 24 hours and 1.2% in the past week. Ethereum is down 0.1% at the time of writing but has seen 5.1% gains in the past week.

    Fed officials also noted the collapse of FTX, acknowledging its impact on the crypto ecosystem. However, they claimed that the situation did not have a serious effect on the wider financial system. The meeting summary stated, “while the spillovers from this situation had been significant among other crypto lenders and exchanges, the collapse was not seen as posing broader market risks to the financial system. (Valium) ”