LIVEDroomDroom
@DroomDroom
DroomDroom dedicates thousands of hours of research into the web3 industry to deliver you free, world-class, and accurate educational content. DroomDroom.com
A seguir
Seguidores
Gostaram
Partilharam
Importance of Quantum Proof Security in Blockchain
Quantum computing is no longer a distant theoretical concept; it’s quickly becoming a practical reality. As this technology advances, it poses a significant threat to current cryptographic systems which are foundational to blockchain technology.
The importance of quantum proof security in blockchain cannot be overstated. Quantum computing threatens classical algorithms like RSA and ECC that support secure communication. Implementing quantum-resistant algorithms ensures blockchain’s data integrity and security to safeguard against quantum attacks and preserving the technology’s immutability, security and reliability.
Vitalik Buterin, co-founder of Ethereum, has been vocal about the potential threats posed by quantum computing of blockchain technology. Additionally, CEO of Post-Quantum, Andersen Chen, has said, “Within three years, there is one in seven chances that quantum computers will break the most used computer encryption systems; this number goes as high as 50% by 2031.”
In this article, we’ll dive into the importance of quantum proof security in the blockchain sector and discuss the case study of Quranium’s pioneering approach to quantum-resistant distributed ledger technology (DLT).
The Threats of Quantum Computing to Blockchains
Quantum threat to blockchain reinforcing the need for quantum proof security
Quantum computers are like super powerful computers that can solve problems that are too complex for regular computers. This power comes from quantum bits (or qubits) which can perform many calculations at once. A big worry is that these computers could one day break many of the encryption methods that keep our data safe.
For instance, the Elliptic Curve Digital Signature Algorithm (ECDSA) is the most widely used cryptographic algorithm implemented by blockchains today. It has a severe weakness to a quantum attack because it was designed to be used in pre-quantum computers which could be exploited by hostile actors ranging from market manipulators to states that are anti-crypto.
Read about the potential quantum computing threats to Bitcoin’s security and solutions to mitigate them in this extensive article by DroomDroom.
Quantum computers leverage quantum mechanics principles such as superposition and entanglement to solve complex problems exponentially faster than classical computers. Undoubtedly, it poses a threat to cryptographic systems that secure blockchain transactions. Curious as to how?
Impact on Public-Key Cryptography
Quantum algorithms like Shor’s algorithm can break widely used public-key cryptographic methods leading to potential unauthorized access and transaction forgery – clearly showing the need for quantum proof security.
Impact on Symmetric Key Cryptography
While symmetric key cryptography is more resistant, algorithms like Grover’s can reduce the security of these keys and necessitates longer keys for maintaining security.
Also, it is important to know the risks posed by quantum computers to network protocols–which can be categorized into two primary areas–Compromised Encryption Algorithms & Undermined Digital Signatures.
Firstly, quantum computers have the capability to compromise the encryption algorithms integral to these protocols, literally putting data confidentiality and integrity in jeopardy. Encryption methods that rely on the complexity of mathematical problems become vulnerable to quantum algorithms like Shor’s algorithm.
Secondly, quantum computers can undermine the authenticity and non-repudiation provided by digital signatures – essential for verifying the source and integrity of digital documents and transactions.
Quantum vulnerable Bitcoins over time
In addition to this, quantum computing threatens crypto mining encryption that can potentially enable thefts. Read more here in this article.
To address these vulnerabilities, researchers have been exploring post-quantum cryptographic (PQC) solutions that are resistant to such attacks.
Developments of Quantum-Resistant Cryptography
Significant efforts are underway to develop quantum-resistant cryptographic algorithms. The U.S. National Institute of Standards and Technology (NIST) has selected several algorithms for post-quantum cryptographic standards.
NIST’s Post Quantum Cryptography Standardization
NIST has chosen four algorithms as the basis for post-quantum cryptographic standards, viz;
CRYSTALS-Kyber
CRYSTALS-Dilithium
SPHINCS+
FALCON
But mind you, transitioning to quantum-resistant cryptography involves technical, logistical and educational challenges. And amidst the rising challenges posed by quantum computing, Quranium emerges as a visionary platform which is setting new standards in quantum proof security for the blockchain space. Let’s explore Quranium’s unique approach to quantum-resistant cryptography and its innovative architecture.
Quranium’s Quantum Proof Security Capabilities: A Case Study
Quranium is an innovative blockchain platform designed to address both current and future challenges in DLT and specifically it focuses on mitigating the risks posed by quantum computing to traditional cryptographic methods.
Let’s talk about how exactly Quranium faces these challenges head on–
Quantum-Resistant Core: SPHINCS+ and WOTS+
Quranium integrates the NIST-approved hash-based post-quantum signature scheme–SPHINCS+ algorithm.
SPHINCS+ implements stateless, hash-based signatures for PQC. This design avoids well-understood cryptanalysis of lattice-based and code-based schemes by Shor’s Algorithm, ensuring long-term security in the quantum era. Additionally, its stateless nature eliminates key management overhead and reduces human error. The scheme offers flexibility by adjusting signature size based on the desired security-speed trade-offs.
Quranium further secures its platform with WOTS+. As its name implies, it is designed for a single use per key pair so that each signing key is used to sign only one document or transaction.
Why is it important though? Well, this significantly complicates potential attack vectors and enhances the platform’s resilience against sophisticated cyber attacks.
Hybrid Dual Layer Architecture
Quranium tackles the “blockchain trilemma” – the challenges of achieving scalability, security and decentralization simultaneously – with a hybrid architecture. And so, by integrating traditional blockchain with a BlockDAG system, Quranium provides a more scalable and efficient platform with high level security and ensure quantum proof security.
Core Layer (Proof of Work for Security)
Providing a strong foundation for the entire network, the core layer of Quranium’s architecture is renowned for its supreme security and resistance to attacks as it ensures immutability and integrity of the ledger.
Crust Layer (Speed & Scalability with BlockDAG)
If a blockchain is a straight line of blocks, a BlockDAG is like a web. Each block can be connected to multiple blocks instead of just one – ultimately more transactions being processed in parallel, speeding up the verification process. It’s particularly useful in a system like PoR where many participants might be adding information at the same time.
Proof of Respect (PoR) for Collaboration and Fairness
Quranium employs a unique consensus mechanism called Proof of Respect that prioritizes the quality and helpfulness of contributions over raw computational power. Clearly, it promotes a collaborative and equitable network environment where honest participation is rewarded.
By integrating PoR within the BlockDAG structure, Quranium achieves two crucial goals.
First, it prioritizes network security by disincentivizing malicious activities as they won’t yield any rewards.
Second, it democratizes the process of validation and block creation making the network more inclusive.
“Point of Truth” Mechanism for Consistency
Quranium’s architecture periodically creates a “Point of Truth” block within the crust layer every half hour which acts as a reference point for all preceding blocks so that the subsequent blocks anchor to this point rather than the entire chain of blocks.
Integration of IoT
Quranium is designed to securely integrate Internet of Things (IoT) devices to its network and by using quantum-resistant DLT, Quranium can provide a secure environment for these devices.
Why is Quranium the Answer to Quantum Proof Security in Blockchain?
Quranium presents a compelling solution for blockchain security in the face of potential threats from quantum computing. Perhaps, its core defense lies in the PQC capabilities of SPHINCS+ and WOTS+. Beyond quantum-resistance–
Quranium’s architecture mitigates the risk of Long Range Attacks (LRAs) and reduces the feasibility of “Nothing at Stake” issues by making it computationally expensive and unprofitable to support multiple blockchain histories.
While the reputation and contribution-based PoR model incentivizes validators to act honestly and ties their ability to earn rewards to their behavior, Quranium employs an innovative anti-bribery mechanism where users staking Quranium coins for smart contract engagement see the network autonomously increase the stake pool which make it prohibitively expensive for attackers to accumulate a controlling stake.
Additionally, Quranium supports high-speed microtransactions and secure machine-to-machine interactions.
Lastly, by being built from the ground up with quantum proof security in mind, Quranium is better positioned to adapt to future technological advancements and security threats.
Quantum computing presents both unprecedented opportunities and formidable challenges. As quantum computing strides toward ‘Q-day’, the imperative for quantum proof cryptographic solutions becomes non-negotiable. Embracing quantum-resistant algorithms is not merely a defensive measure but a forward-looking strategy to ensure security and integrity of digital infrastructures.
Kapil Dhiman, Co-founder and CEO, Quranium
Conclusion
Quantum computers are coming and anyone interested in adequately securing their data must start looking to the future now.
The specter of quantum computing casts a long shadow over the world of blockchain. Current cryptographic methods, the bedrock of blockchain security, are vulnerable to being shattered by these powerful machines, threatening the very foundation of trust and immutability that blockchain promises.
Here’s where Quranium emerges as a beacon of hope, taking a multi-pronged approach to combat the quantum threat. As blockchain technology ventures into uncharted territory, Quranium’s commitment to quantum proof security and innovative architecture positions it at the forefront of securing the blockchain frontier.
The importance of quantum proof security in blockchain cannot be overstated. Quantum computing threatens classical algorithms like RSA and ECC that support secure communication. Implementing quantum-resistant algorithms ensures blockchain’s data integrity and security to safeguard against quantum attacks and preserving the technology’s immutability, security and reliability.
Vitalik Buterin, co-founder of Ethereum, has been vocal about the potential threats posed by quantum computing of blockchain technology. Additionally, CEO of Post-Quantum, Andersen Chen, has said, “Within three years, there is one in seven chances that quantum computers will break the most used computer encryption systems; this number goes as high as 50% by 2031.”
In this article, we’ll dive into the importance of quantum proof security in the blockchain sector and discuss the case study of Quranium’s pioneering approach to quantum-resistant distributed ledger technology (DLT).
The Threats of Quantum Computing to Blockchains
Quantum threat to blockchain reinforcing the need for quantum proof security
Quantum computers are like super powerful computers that can solve problems that are too complex for regular computers. This power comes from quantum bits (or qubits) which can perform many calculations at once. A big worry is that these computers could one day break many of the encryption methods that keep our data safe.
For instance, the Elliptic Curve Digital Signature Algorithm (ECDSA) is the most widely used cryptographic algorithm implemented by blockchains today. It has a severe weakness to a quantum attack because it was designed to be used in pre-quantum computers which could be exploited by hostile actors ranging from market manipulators to states that are anti-crypto.
Read about the potential quantum computing threats to Bitcoin’s security and solutions to mitigate them in this extensive article by DroomDroom.
Quantum computers leverage quantum mechanics principles such as superposition and entanglement to solve complex problems exponentially faster than classical computers. Undoubtedly, it poses a threat to cryptographic systems that secure blockchain transactions. Curious as to how?
Impact on Public-Key Cryptography
Quantum algorithms like Shor’s algorithm can break widely used public-key cryptographic methods leading to potential unauthorized access and transaction forgery – clearly showing the need for quantum proof security.
Impact on Symmetric Key Cryptography
While symmetric key cryptography is more resistant, algorithms like Grover’s can reduce the security of these keys and necessitates longer keys for maintaining security.
Also, it is important to know the risks posed by quantum computers to network protocols–which can be categorized into two primary areas–Compromised Encryption Algorithms & Undermined Digital Signatures.
Firstly, quantum computers have the capability to compromise the encryption algorithms integral to these protocols, literally putting data confidentiality and integrity in jeopardy. Encryption methods that rely on the complexity of mathematical problems become vulnerable to quantum algorithms like Shor’s algorithm.
Secondly, quantum computers can undermine the authenticity and non-repudiation provided by digital signatures – essential for verifying the source and integrity of digital documents and transactions.
Quantum vulnerable Bitcoins over time
In addition to this, quantum computing threatens crypto mining encryption that can potentially enable thefts. Read more here in this article.
To address these vulnerabilities, researchers have been exploring post-quantum cryptographic (PQC) solutions that are resistant to such attacks.
Developments of Quantum-Resistant Cryptography
Significant efforts are underway to develop quantum-resistant cryptographic algorithms. The U.S. National Institute of Standards and Technology (NIST) has selected several algorithms for post-quantum cryptographic standards.
NIST’s Post Quantum Cryptography Standardization
NIST has chosen four algorithms as the basis for post-quantum cryptographic standards, viz;
CRYSTALS-Kyber
CRYSTALS-Dilithium
SPHINCS+
FALCON
But mind you, transitioning to quantum-resistant cryptography involves technical, logistical and educational challenges. And amidst the rising challenges posed by quantum computing, Quranium emerges as a visionary platform which is setting new standards in quantum proof security for the blockchain space. Let’s explore Quranium’s unique approach to quantum-resistant cryptography and its innovative architecture.
Quranium’s Quantum Proof Security Capabilities: A Case Study
Quranium is an innovative blockchain platform designed to address both current and future challenges in DLT and specifically it focuses on mitigating the risks posed by quantum computing to traditional cryptographic methods.
Let’s talk about how exactly Quranium faces these challenges head on–
Quantum-Resistant Core: SPHINCS+ and WOTS+
Quranium integrates the NIST-approved hash-based post-quantum signature scheme–SPHINCS+ algorithm.
SPHINCS+ implements stateless, hash-based signatures for PQC. This design avoids well-understood cryptanalysis of lattice-based and code-based schemes by Shor’s Algorithm, ensuring long-term security in the quantum era. Additionally, its stateless nature eliminates key management overhead and reduces human error. The scheme offers flexibility by adjusting signature size based on the desired security-speed trade-offs.
Quranium further secures its platform with WOTS+. As its name implies, it is designed for a single use per key pair so that each signing key is used to sign only one document or transaction.
Why is it important though? Well, this significantly complicates potential attack vectors and enhances the platform’s resilience against sophisticated cyber attacks.
Hybrid Dual Layer Architecture
Quranium tackles the “blockchain trilemma” – the challenges of achieving scalability, security and decentralization simultaneously – with a hybrid architecture. And so, by integrating traditional blockchain with a BlockDAG system, Quranium provides a more scalable and efficient platform with high level security and ensure quantum proof security.
Core Layer (Proof of Work for Security)
Providing a strong foundation for the entire network, the core layer of Quranium’s architecture is renowned for its supreme security and resistance to attacks as it ensures immutability and integrity of the ledger.
Crust Layer (Speed & Scalability with BlockDAG)
If a blockchain is a straight line of blocks, a BlockDAG is like a web. Each block can be connected to multiple blocks instead of just one – ultimately more transactions being processed in parallel, speeding up the verification process. It’s particularly useful in a system like PoR where many participants might be adding information at the same time.
Proof of Respect (PoR) for Collaboration and Fairness
Quranium employs a unique consensus mechanism called Proof of Respect that prioritizes the quality and helpfulness of contributions over raw computational power. Clearly, it promotes a collaborative and equitable network environment where honest participation is rewarded.
By integrating PoR within the BlockDAG structure, Quranium achieves two crucial goals.
First, it prioritizes network security by disincentivizing malicious activities as they won’t yield any rewards.
Second, it democratizes the process of validation and block creation making the network more inclusive.
“Point of Truth” Mechanism for Consistency
Quranium’s architecture periodically creates a “Point of Truth” block within the crust layer every half hour which acts as a reference point for all preceding blocks so that the subsequent blocks anchor to this point rather than the entire chain of blocks.
Integration of IoT
Quranium is designed to securely integrate Internet of Things (IoT) devices to its network and by using quantum-resistant DLT, Quranium can provide a secure environment for these devices.
Why is Quranium the Answer to Quantum Proof Security in Blockchain?
Quranium presents a compelling solution for blockchain security in the face of potential threats from quantum computing. Perhaps, its core defense lies in the PQC capabilities of SPHINCS+ and WOTS+. Beyond quantum-resistance–
Quranium’s architecture mitigates the risk of Long Range Attacks (LRAs) and reduces the feasibility of “Nothing at Stake” issues by making it computationally expensive and unprofitable to support multiple blockchain histories.
While the reputation and contribution-based PoR model incentivizes validators to act honestly and ties their ability to earn rewards to their behavior, Quranium employs an innovative anti-bribery mechanism where users staking Quranium coins for smart contract engagement see the network autonomously increase the stake pool which make it prohibitively expensive for attackers to accumulate a controlling stake.
Additionally, Quranium supports high-speed microtransactions and secure machine-to-machine interactions.
Lastly, by being built from the ground up with quantum proof security in mind, Quranium is better positioned to adapt to future technological advancements and security threats.
Quantum computing presents both unprecedented opportunities and formidable challenges. As quantum computing strides toward ‘Q-day’, the imperative for quantum proof cryptographic solutions becomes non-negotiable. Embracing quantum-resistant algorithms is not merely a defensive measure but a forward-looking strategy to ensure security and integrity of digital infrastructures.
Kapil Dhiman, Co-founder and CEO, Quranium
Conclusion
Quantum computers are coming and anyone interested in adequately securing their data must start looking to the future now.
The specter of quantum computing casts a long shadow over the world of blockchain. Current cryptographic methods, the bedrock of blockchain security, are vulnerable to being shattered by these powerful machines, threatening the very foundation of trust and immutability that blockchain promises.
Here’s where Quranium emerges as a beacon of hope, taking a multi-pronged approach to combat the quantum threat. As blockchain technology ventures into uncharted territory, Quranium’s commitment to quantum proof security and innovative architecture positions it at the forefront of securing the blockchain frontier.
RWA Liquidity Alliance: Stabilizing Web3 Treasury Management
The RWA Liquidity Alliance is designed to help Web3 businesses manage treasury volatility effectively, safeguarding assets and mitigating risks in the digital economy.
RWA Liquidity Alliance: Stabilizing Web3 Treasury Management
In the world of Web3, businesses face the challenge of managing treasury volatility, market risks, and unexpected disruptions. Traditional financial instruments often fail to provide the stability needed in such a dynamic environment. Enter the RWA Liquidity Alliance, powered by Aurus in collaboration with Sempsa JP refinery, offering a robust solution through access to stable and trusted real-world assets (RWAs).
Web3 enterprises urgently require assets that offer stability, trustworthiness, and liquidity. The inherent volatility of cryptocurrencies can significantly impact treasury management, potentially leading to financial instability. The RWA Liquidity Alliance addresses these critical challenges by providing direct access to stable assets like gold (tGOLD/$TXAU) and silver (tSILVER/$TXAG), enabling businesses to protect their treasuries and effectively mitigate risks.
Introducing the RWA Liquidity Alliance
Aurus, in partnership with Sempsa JP refinery, has established an ecosystem where businesses can procure gold and silver for their treasuries or products. This initiative offers a bespoke service with direct KYC-compliant purchases from Sempsa JP refinery, renowned for its quality and reliability.
Key Benefits and How It Works?
Acquisition and Liquidity Provision
Businesses can acquire TXAU and TXAG directly from the Sempsa JP refinery.
By joining the RWA Liquidity Alliance, members add at least 50% of their tGOLD or tSILVER as liquidity pairs with stablecoins like USDC or USDT on decentralized exchanges such as Xave and Balancer.
Earnings and Rewards
Members earn swap fees as LP providers and can also receive rewards in Aurus tokens ($AX) and other partner’s tokens like $BAL, $XAV, $FACTR and $TRADE.
This setup not only enhances liquidity but also offers additional financial incentives for participating businesses.
Community and Network Growth
Joining the alliance means becoming part of a growing community focused on RWAs.
Network with other RWA-focused businesses, share insights, and collaborate on future projects and governance in monthly meetings coordinated by Aurus.
Dual Liquidity Events
On-chain liquidity on decentralized exchanges like Xave and Balancer, allows easy buying and selling of metals, enhancing market fluidity.
Off-chain redemption enables businesses to sell or redeem metals directly with Sempsa within 24 hours at competitive prices, ensuring minimal costs and quick turnaround.
Payment Methods and Redemption
The RWA Liquidity Alliance supports payments in USD or EUR, with plans to accept stablecoins in the future. The process is streamlined to ensure funds can be transferred back into bank accounts within 24 hours, offering liquidity and flexibility. Initial KYC and onboarding are provided free of charge, lowering barriers to entry for potential members.
What The RWA Liquidity Alliance Have to Say
Defactor and Polytrade, both notable partners of Aurus, endorse the RWA Liquidity Alliance:
Defactor is striving to be the platform upon which, multiple Real-World Asset (RWA) providers can build products and use cases in lending and borrowing. Precious metals are a key Asset class for RWA adoption and we are thrilled to power this tGold solution.
Adam Bouktila, Co-Founder at Defactor.
The RWA Liquidity Alliance and Aurus partnership brings stability and liquidity to Web3, allowing clients to enhance treasury management with trusted assets like tGOLD and tSILVER
Piyush Gupta, Founder at Polytrade Finance.
Other depoiments include Xave’s and Sempsa’s:
At Xave, we work directly with stablecoin and RWA issuers to build liquid markets for on-chain forex, commodities, and more categories over time. We are committed to supporting the RWA Liquidity Alliance, and especially Aurus, as key partners to bring traditional RWA markets on-chain
Chris Verceles, Co-Founder at Xave Finance.
At SEMPSA JP, we are always seeking to innovate across the entire value chain of the production of precious metals. By partnering with Aurus, we are now facilitating access to SEMPSA JP gold and silver bars in a highly secure, portable, divisible, and liquid form. We are excited to lead the adoption of safe technologies, such as blockchain, helping to accelerate the digital transformation of the precious metals industry
Francisco Espinosa, CEO at SEMPSA JP.
Joining The Alliance
The RWA Liquidity Alliance represents a significant advancement in providing Web3 businesses with access to stable and trusted real-world assets. By addressing the critical needs for stability, trust, and liquidity, this alliance not only offers protection against market volatility and risks but also fosters a collaborative community aimed at driving the widespread adoption of RWAs.
RWA Liquidity Alliance: Stabilizing Web3 Treasury Management
In the world of Web3, businesses face the challenge of managing treasury volatility, market risks, and unexpected disruptions. Traditional financial instruments often fail to provide the stability needed in such a dynamic environment. Enter the RWA Liquidity Alliance, powered by Aurus in collaboration with Sempsa JP refinery, offering a robust solution through access to stable and trusted real-world assets (RWAs).
Web3 enterprises urgently require assets that offer stability, trustworthiness, and liquidity. The inherent volatility of cryptocurrencies can significantly impact treasury management, potentially leading to financial instability. The RWA Liquidity Alliance addresses these critical challenges by providing direct access to stable assets like gold (tGOLD/$TXAU) and silver (tSILVER/$TXAG), enabling businesses to protect their treasuries and effectively mitigate risks.
Introducing the RWA Liquidity Alliance
Aurus, in partnership with Sempsa JP refinery, has established an ecosystem where businesses can procure gold and silver for their treasuries or products. This initiative offers a bespoke service with direct KYC-compliant purchases from Sempsa JP refinery, renowned for its quality and reliability.
Key Benefits and How It Works?
Acquisition and Liquidity Provision
Businesses can acquire TXAU and TXAG directly from the Sempsa JP refinery.
By joining the RWA Liquidity Alliance, members add at least 50% of their tGOLD or tSILVER as liquidity pairs with stablecoins like USDC or USDT on decentralized exchanges such as Xave and Balancer.
Earnings and Rewards
Members earn swap fees as LP providers and can also receive rewards in Aurus tokens ($AX) and other partner’s tokens like $BAL, $XAV, $FACTR and $TRADE.
This setup not only enhances liquidity but also offers additional financial incentives for participating businesses.
Community and Network Growth
Joining the alliance means becoming part of a growing community focused on RWAs.
Network with other RWA-focused businesses, share insights, and collaborate on future projects and governance in monthly meetings coordinated by Aurus.
Dual Liquidity Events
On-chain liquidity on decentralized exchanges like Xave and Balancer, allows easy buying and selling of metals, enhancing market fluidity.
Off-chain redemption enables businesses to sell or redeem metals directly with Sempsa within 24 hours at competitive prices, ensuring minimal costs and quick turnaround.
Payment Methods and Redemption
The RWA Liquidity Alliance supports payments in USD or EUR, with plans to accept stablecoins in the future. The process is streamlined to ensure funds can be transferred back into bank accounts within 24 hours, offering liquidity and flexibility. Initial KYC and onboarding are provided free of charge, lowering barriers to entry for potential members.
What The RWA Liquidity Alliance Have to Say
Defactor and Polytrade, both notable partners of Aurus, endorse the RWA Liquidity Alliance:
Defactor is striving to be the platform upon which, multiple Real-World Asset (RWA) providers can build products and use cases in lending and borrowing. Precious metals are a key Asset class for RWA adoption and we are thrilled to power this tGold solution.
Adam Bouktila, Co-Founder at Defactor.
The RWA Liquidity Alliance and Aurus partnership brings stability and liquidity to Web3, allowing clients to enhance treasury management with trusted assets like tGOLD and tSILVER
Piyush Gupta, Founder at Polytrade Finance.
Other depoiments include Xave’s and Sempsa’s:
At Xave, we work directly with stablecoin and RWA issuers to build liquid markets for on-chain forex, commodities, and more categories over time. We are committed to supporting the RWA Liquidity Alliance, and especially Aurus, as key partners to bring traditional RWA markets on-chain
Chris Verceles, Co-Founder at Xave Finance.
At SEMPSA JP, we are always seeking to innovate across the entire value chain of the production of precious metals. By partnering with Aurus, we are now facilitating access to SEMPSA JP gold and silver bars in a highly secure, portable, divisible, and liquid form. We are excited to lead the adoption of safe technologies, such as blockchain, helping to accelerate the digital transformation of the precious metals industry
Francisco Espinosa, CEO at SEMPSA JP.
Joining The Alliance
The RWA Liquidity Alliance represents a significant advancement in providing Web3 businesses with access to stable and trusted real-world assets. By addressing the critical needs for stability, trust, and liquidity, this alliance not only offers protection against market volatility and risks but also fosters a collaborative community aimed at driving the widespread adoption of RWAs.
How to Buy ArtFi Token?
Invest in the future of art and blockchain by purchasing the $ARTFI token. As a revenue-sharing utility token on the Sui blockchain, $ARTFI is designed to appreciate Artfi’s growth, facilitated by its consignment-based business model.
$ARTFI, Artfi’s token, serves as the backbone of a revolutionary NFT marketplace and a deflationary store of value. The pioneering company in the art investment world launched its $ARTFI on June 17, 2024, at 11 AM UTC.
This guide will provide comprehensive details on how to buy Artfi token ($ARTFI), including platform information, step-by-step instructions, and insights into the token’s utility and value proposition.
Platforms to Buy ARTFI Token ($ARTFI)
When looking to buy Artfi token, it’s essential to pick a, it’s essential to pick a platform that not only ticks all the boxes for security and ease of use but also plays a key role in the token’s market dynamics. Here’s where you can jump into the $ARTFI pool, each platform bringing its flavor to the table, enhancing how and where you can trade, hold, or sell $ARTFI.
KuCoin
KuCoin, the renowned cryptocurrency exchange known for its wide selection of digital assets and user-friendly interface, has over 10 million users globally and supports more than 600 cryptocurrencies.
KuCoin starts trading $ARTFI on June 17, 2024, at 11 AM UTC, with deposits already open and withdrawals beginning the next day. Celebrate the listing with a $54,000 ARTFI giveaway, featuring trading competitions and affiliate events. Activities include a trading competition with a $30,000 prize pool, an affiliate special event with $12,000 worth of ARTFI, and a trading bot event with a $10,000 prize pool.
For more insights on why and how crypto tokens are listed on exchanges, enhancing their accessibility and market presence, explore this detailed guide.
$ARTFI trading is now live on #KuCoin!ARTFI/USDT: https://t.co/J5xazvKl1l Find out more about Artfi in #KuCoinCryptoGem card.#NFT https://t.co/c2Dabec6rH pic.twitter.com/UlP5DnXRIU
— KuCoin (@kucoincom) June 17, 2024
Official announcement by KuCoin on the launch of ARTFI
Gate.io
Gate.io regularly ranks among the top 10 exchanges by trading volume and supports over 1,000 cryptocurrencies. The platform has a user base exceeding 8 million and offers advanced trading features.
Gate.io is hosting an Initial Free Offering event, giving away 3,500,000 $ARTFI in airdrops to GT holders , marking another exciting opportunity to buy Artfi token. The trading period for ARTFI on Gate.io starts at 11:00 AM on June 17, 2024 .
Bitget
Bitget recently reported a daily trading volume of over $5 billion. Known for its rapid growth and innovative features since its 2018 inception, Bitget introduced $ARTFI with a trading commencement on June 17, 2024, at 11 AM UTC. This enthusiasm shows the strong demand to buy Artfi token and participate in its promising future.
The #Artfi #Launchpad allowlist reached a 1000% oversubscription within a lightning-quick 1 minute, with a total oversubscription of 2228%! The public round starts today at 16:00 (UTC+8). If you completed a cumulative transaction of $100 in #BitgetWallet after June 1, you… https://t.co/ZjbAop1xg0
— Bitget Wallet (@BitgetWallet) June 16, 2024
Bitget Wallet announces that the Artfi Launchpad allotment was oversubscribed by 1000% in just one minute.
The Bitget Launchpad reached an oversubscription of 2228% during the public round. Users who managed to subscribe can claim their $ARTFI airdrop through the Bitget Wallet on June 17, 2024 .
$ARTFI trading is now LIVE on #BitgetSpot. @artfiglobal Trade now: https://t.co/LQwx6uYuX3Find out more about $ARTFI https://t.co/PIKCQlWT2r pic.twitter.com/5f7fiW0Jwg
— Bitget (@bitgetglobal) June 17, 2024
Official announcement by Bitget on the launch of ARTFI MEXC
MEXC provides a user-friendly interface and competitive fees, making it a preferred choice for many traders. They’ve launched a Kickstarter event to allow users to vote for Artfi and buy Artfi token while winning a share of 50,000 USDT in airdrops to support high-quality projects while rewarding participants. It supports the $ARTFI launch with trading starting concurrently with the other exchanges.
We're thrilled to announce that the @artfiglobal Kickstarter has concluded and $ARTFI will be listed on #MEXC! Deposit: Opened ARTFI/USDT Trading in Innovation Zone: 2024-06-17 11:00 (UTC)Details: https://t.co/h7AfDWPf7S pic.twitter.com/ZiXBXyQjQ3
— MEXC (@MEXC_Official) June 17, 2024
Official announcement by MEXC on the launch of ARTFI Understanding $ARTFI
$ARTFI has its vision set to democratize art investment by leveraging blockchain technology. Here’s what makes it stand out:
Tokenomics
Artfi’s token ($ARTFI) is engineered to enhance art market accessibility through a sophisticated tokenomics model. The total supply of $ARTFI is fixed at 1 billion tokens, preventing inflation and safeguarding its value and making it a smart choice for those looking to buy Artfi token. The tokens were distributed through early investor rounds and a public sale to enhance initial funding and broad accessibility.
Utility
$ARTFI allows investors to own fractional shares of high-value artworks, providing access to the fine art market previously reserved for the ultra-wealthy. This fractional ownership model increases liquidity and makes art investment accessible to a broader audience. This makes the decision to buy Artfi token an entry into a previously exclusive market.
For a deeper understanding of how $ARTFI is transforming the art collecting experience and democratizing access to million-dollar artworks, read more in our detailed analysis.
Innovative Approach
Artfi integrates NFTs and blockchain to ensure transparency and security. Each piece of art listed on the Artfi platform is tokenized, and these tokens represent ownership stakes.
Revenue Sharing
The Artfi token is designed to benefit from Artfi’s profitable consignment-based business model. The company allocates 30% of its revenues from commission fees earned on consignments and artwork sales to a token burning program, reducing the number of tokens in circulation and potentially increasing their value over time.
Is $ARTFI a Good Buy?
For those wondering why to buy Artfi token, consider its unique position at the intersection of art and blockchain technology, which offers not only a potential for high returns but also democratizes art ownership. Investing in $ARTFI offers several benefits:
Democratization of Art Investment
Artfi’s mission to make art investment accessible to all is groundbreaking. By fractionalizing ownership, Artfi opens up opportunities for smaller investors to participate in the lucrative art market.
High Demand
The recent oversubscription events on platforms like Bitget (1759% over-subscribed) and MEXC (2228% over-subscribed) indicate strong market interest and confidence in $ARTFI .
Strong Platform
Artfi’s integration with top exchanges like KuCoin, Gate.io, Bitget, and MEXC ensures high liquidity and ease of access for investors. Additionally, Artfi’s use of blockchain technology provides a secure and transparent investment environment.
Community and Support
Artfi’s active engagement with its community through platforms like Twitter and strategic partnerships with launchpads like Seedify further strengthens its credibility and reach.
Deflationary Mechanism
Artfi’s buy-back and burn strategy helps to decrease the total supply of tokens, potentially increasing the value of the remaining tokens. Undoubtedly, deflationary mechanisms can provide long-term value appreciation for investors.
In our comprehensive analysis of Artfi’s impact on the art market, we discussed Artfi’s strategic use of Web3 technologies to enhance transparency and accessibility, making it an attractive investment opportunity for those looking to diversify their portfolios with fine art assets.
For a deeper understanding of Artfi’s market strategies and their potential impact, refer to our detailed article on Artfi’s role in the tokenization of the art market.
Final Thoughts on How to Buy Artfi Token
The launch of $ARTFI marks an incredible milestone in the intersection of art and blockchain technology. As Artfi introduces a model that allows fractional ownership of high-value artworks, it invites a diverse group of investors to engage with the art market—a domain traditionally reserved for the affluent.
The enthusiasm for $ARTFI, reflected in the overwhelming oversubscription events on platforms like Bitget and MEXC, signals strong market confidence and a robust demand for the token. Learn how to buy Artfi token today and take part in revolutionizing the art market.
$ARTFI, Artfi’s token, serves as the backbone of a revolutionary NFT marketplace and a deflationary store of value. The pioneering company in the art investment world launched its $ARTFI on June 17, 2024, at 11 AM UTC.
This guide will provide comprehensive details on how to buy Artfi token ($ARTFI), including platform information, step-by-step instructions, and insights into the token’s utility and value proposition.
Platforms to Buy ARTFI Token ($ARTFI)
When looking to buy Artfi token, it’s essential to pick a, it’s essential to pick a platform that not only ticks all the boxes for security and ease of use but also plays a key role in the token’s market dynamics. Here’s where you can jump into the $ARTFI pool, each platform bringing its flavor to the table, enhancing how and where you can trade, hold, or sell $ARTFI.
KuCoin
KuCoin, the renowned cryptocurrency exchange known for its wide selection of digital assets and user-friendly interface, has over 10 million users globally and supports more than 600 cryptocurrencies.
KuCoin starts trading $ARTFI on June 17, 2024, at 11 AM UTC, with deposits already open and withdrawals beginning the next day. Celebrate the listing with a $54,000 ARTFI giveaway, featuring trading competitions and affiliate events. Activities include a trading competition with a $30,000 prize pool, an affiliate special event with $12,000 worth of ARTFI, and a trading bot event with a $10,000 prize pool.
For more insights on why and how crypto tokens are listed on exchanges, enhancing their accessibility and market presence, explore this detailed guide.
$ARTFI trading is now live on #KuCoin!ARTFI/USDT: https://t.co/J5xazvKl1l Find out more about Artfi in #KuCoinCryptoGem card.#NFT https://t.co/c2Dabec6rH pic.twitter.com/UlP5DnXRIU
— KuCoin (@kucoincom) June 17, 2024
Official announcement by KuCoin on the launch of ARTFI
Gate.io
Gate.io regularly ranks among the top 10 exchanges by trading volume and supports over 1,000 cryptocurrencies. The platform has a user base exceeding 8 million and offers advanced trading features.
Gate.io is hosting an Initial Free Offering event, giving away 3,500,000 $ARTFI in airdrops to GT holders , marking another exciting opportunity to buy Artfi token. The trading period for ARTFI on Gate.io starts at 11:00 AM on June 17, 2024 .
Bitget
Bitget recently reported a daily trading volume of over $5 billion. Known for its rapid growth and innovative features since its 2018 inception, Bitget introduced $ARTFI with a trading commencement on June 17, 2024, at 11 AM UTC. This enthusiasm shows the strong demand to buy Artfi token and participate in its promising future.
The #Artfi #Launchpad allowlist reached a 1000% oversubscription within a lightning-quick 1 minute, with a total oversubscription of 2228%! The public round starts today at 16:00 (UTC+8). If you completed a cumulative transaction of $100 in #BitgetWallet after June 1, you… https://t.co/ZjbAop1xg0
— Bitget Wallet (@BitgetWallet) June 16, 2024
Bitget Wallet announces that the Artfi Launchpad allotment was oversubscribed by 1000% in just one minute.
The Bitget Launchpad reached an oversubscription of 2228% during the public round. Users who managed to subscribe can claim their $ARTFI airdrop through the Bitget Wallet on June 17, 2024 .
$ARTFI trading is now LIVE on #BitgetSpot. @artfiglobal Trade now: https://t.co/LQwx6uYuX3Find out more about $ARTFI https://t.co/PIKCQlWT2r pic.twitter.com/5f7fiW0Jwg
— Bitget (@bitgetglobal) June 17, 2024
Official announcement by Bitget on the launch of ARTFI MEXC
MEXC provides a user-friendly interface and competitive fees, making it a preferred choice for many traders. They’ve launched a Kickstarter event to allow users to vote for Artfi and buy Artfi token while winning a share of 50,000 USDT in airdrops to support high-quality projects while rewarding participants. It supports the $ARTFI launch with trading starting concurrently with the other exchanges.
We're thrilled to announce that the @artfiglobal Kickstarter has concluded and $ARTFI will be listed on #MEXC! Deposit: Opened ARTFI/USDT Trading in Innovation Zone: 2024-06-17 11:00 (UTC)Details: https://t.co/h7AfDWPf7S pic.twitter.com/ZiXBXyQjQ3
— MEXC (@MEXC_Official) June 17, 2024
Official announcement by MEXC on the launch of ARTFI Understanding $ARTFI
$ARTFI has its vision set to democratize art investment by leveraging blockchain technology. Here’s what makes it stand out:
Tokenomics
Artfi’s token ($ARTFI) is engineered to enhance art market accessibility through a sophisticated tokenomics model. The total supply of $ARTFI is fixed at 1 billion tokens, preventing inflation and safeguarding its value and making it a smart choice for those looking to buy Artfi token. The tokens were distributed through early investor rounds and a public sale to enhance initial funding and broad accessibility.
Utility
$ARTFI allows investors to own fractional shares of high-value artworks, providing access to the fine art market previously reserved for the ultra-wealthy. This fractional ownership model increases liquidity and makes art investment accessible to a broader audience. This makes the decision to buy Artfi token an entry into a previously exclusive market.
For a deeper understanding of how $ARTFI is transforming the art collecting experience and democratizing access to million-dollar artworks, read more in our detailed analysis.
Innovative Approach
Artfi integrates NFTs and blockchain to ensure transparency and security. Each piece of art listed on the Artfi platform is tokenized, and these tokens represent ownership stakes.
Revenue Sharing
The Artfi token is designed to benefit from Artfi’s profitable consignment-based business model. The company allocates 30% of its revenues from commission fees earned on consignments and artwork sales to a token burning program, reducing the number of tokens in circulation and potentially increasing their value over time.
Is $ARTFI a Good Buy?
For those wondering why to buy Artfi token, consider its unique position at the intersection of art and blockchain technology, which offers not only a potential for high returns but also democratizes art ownership. Investing in $ARTFI offers several benefits:
Democratization of Art Investment
Artfi’s mission to make art investment accessible to all is groundbreaking. By fractionalizing ownership, Artfi opens up opportunities for smaller investors to participate in the lucrative art market.
High Demand
The recent oversubscription events on platforms like Bitget (1759% over-subscribed) and MEXC (2228% over-subscribed) indicate strong market interest and confidence in $ARTFI .
Strong Platform
Artfi’s integration with top exchanges like KuCoin, Gate.io, Bitget, and MEXC ensures high liquidity and ease of access for investors. Additionally, Artfi’s use of blockchain technology provides a secure and transparent investment environment.
Community and Support
Artfi’s active engagement with its community through platforms like Twitter and strategic partnerships with launchpads like Seedify further strengthens its credibility and reach.
Deflationary Mechanism
Artfi’s buy-back and burn strategy helps to decrease the total supply of tokens, potentially increasing the value of the remaining tokens. Undoubtedly, deflationary mechanisms can provide long-term value appreciation for investors.
In our comprehensive analysis of Artfi’s impact on the art market, we discussed Artfi’s strategic use of Web3 technologies to enhance transparency and accessibility, making it an attractive investment opportunity for those looking to diversify their portfolios with fine art assets.
For a deeper understanding of Artfi’s market strategies and their potential impact, refer to our detailed article on Artfi’s role in the tokenization of the art market.
Final Thoughts on How to Buy Artfi Token
The launch of $ARTFI marks an incredible milestone in the intersection of art and blockchain technology. As Artfi introduces a model that allows fractional ownership of high-value artworks, it invites a diverse group of investors to engage with the art market—a domain traditionally reserved for the affluent.
The enthusiasm for $ARTFI, reflected in the overwhelming oversubscription events on platforms like Bitget and MEXC, signals strong market confidence and a robust demand for the token. Learn how to buy Artfi token today and take part in revolutionizing the art market.
Key Factors to Consider When Selecting Real World Assets Custodian
Tokenization of Real World Assets (RWA) has become a notable trend in the blockchain space. With investors seeking to encounter traditional assets in digital formats, there is a crucial need to select a trusted and secure custodian for their real world assets.
The benefits of choosing a reliable and secure custodian for your real world assets and the factors to consider when selecting a custodian to mitigate risks associated with real world assets tokenization.
The crypto landscape is evolving! As we see more realistic tech adoption, expect to see a revolution in tokenizing real-world assets. #Artfi leads the charge, making fine art accessible through blockchain innovation. Get ready to democratize access to the artworks powered… pic.twitter.com/5WgB5m7Kai
— Artfi (@artfiglobal) May 21, 2024
Key Considerations to Select a RWA Custodian
Security Measures
The basic concern when selecting the right Real World Asset custodian is the security measures they have in place. Choose the custodians who implement powerful security policies like encryption techniques, cold storage solutions and multi-signature authentication. This is an important aspect in keeping assets safe against hacking attempts, cybersecurity threats and unauthorized use.
Compliance to Regulatory Requirements
An essential condition to look out for while incorporating custodians into your RWA system, is whether or not they comply with all the regulatory requirements involved. Check whether the caregiver has a valid license and certifications. This, in turn, strengthens the confidence level of the investors, and mitigates the risks associated with non-compliance.
Read more about Artfi Genesis Offering Pass Analysis: Unlocking Art’s Elite Circle
Track Record and Reputation of the Custodian
The history and reputation of a custodian not only depicts their ability to be depended on and trusted but also points out whether they are trustworthy or not. A thorough research about the history of the RWAs custodian, including the client’s testimonials, expertise in the Real World Assets handling and past incidents and potential breaches should be carried out. A custodian who holds a positive reputation of conducting a reliable business and managing assets securely is likely to ignite confidence and trust.
Transparency
Transparency and open communication are the stronghold of a good relationship between the client and the custodian. Clear communication ensures that investors stay informed about the status of their real world assets and any other relevant developments. Select a custodian that provides regular updates, transparent reporting and responsive client support services.
Read more about Art Market Liquidity: Strategies and Insights for Investors
ArtFi: Emphasizing Long-Term Secure Custody
Artfi is a platform that majors on long-term secure custody in the tokenization of real-world assets. Their commitment to security is in line with the interests of investors in preserving the long-term value of their assets and minimizing risks related to security breaches or mismanagement.
They have enacted powerful security measures to make sure that assets are safeguarded with honesty over extended periods. They use advanced encryption procedures, multi-signature wallets and cold storage solutions to safeguard digital tokens and physical assets from cyber hacking, theft and unauthorized access.
Artfi Genesis Offering Pass: The Ultimate Key to Art Democratization
They comply with strict standards of regulation, these standards include Anti-Money Laundering (AML), and custody licensing regulations. Their compliance efforts minimize legal risks and make sure that all assets are managed according to the applicable laws and regulations, strengthening the investor’s trust and confidence.
Artfi has cultivated a reputation for reliability, excellence in operation and expertise in managing different classes of assets. Artfi are trusted by investors to securely manage and administer their assets, with awareness that they have a proven track record of offering exceptional custodial services.
ArtFi offers investors with clear reporting procedures, updates that are on time and access to relevant information. Their commitment to transparency cultivates open collaboration and enables investors to monitor their investments with effectiveness.
“Art is not just a commodity; it’s a testament to humanity’s creativity and soul. Embracing its beauty and value fosters a deeper connection with our collective heritage and enriches our lives beyond measure.” – Asif Kamal founder Artfi
Read more on Artfi Launches Genesis Offering Pass Sale: Democratizing Art Access for Just $10
Artfi is distinct in the custodial prospect by prioritizing the long term safe custody of investors’ real world assets. By continuously demanding high standards of security and reliability, Artfi redefines the responsibilities of custodians in making sure that the assets of the investors are protected over an extended period. This commitment cultivates trust and reliability in the process of digital securities enhancing the credibility and integrity of the investment landscape.
Conclusion
Selecting the most appropriate custodian to take care of your assets initially requires a close examination of important factors with Security and reliability being the key. Through employing powerful security measures, compliance to the regulatory requirements, positive reputation and transparency, investors can eliminate valuable risks therefore ensuring safety of their investments.
The benefits of choosing a reliable and secure custodian for your real world assets and the factors to consider when selecting a custodian to mitigate risks associated with real world assets tokenization.
The crypto landscape is evolving! As we see more realistic tech adoption, expect to see a revolution in tokenizing real-world assets. #Artfi leads the charge, making fine art accessible through blockchain innovation. Get ready to democratize access to the artworks powered… pic.twitter.com/5WgB5m7Kai
— Artfi (@artfiglobal) May 21, 2024
Key Considerations to Select a RWA Custodian
Security Measures
The basic concern when selecting the right Real World Asset custodian is the security measures they have in place. Choose the custodians who implement powerful security policies like encryption techniques, cold storage solutions and multi-signature authentication. This is an important aspect in keeping assets safe against hacking attempts, cybersecurity threats and unauthorized use.
Compliance to Regulatory Requirements
An essential condition to look out for while incorporating custodians into your RWA system, is whether or not they comply with all the regulatory requirements involved. Check whether the caregiver has a valid license and certifications. This, in turn, strengthens the confidence level of the investors, and mitigates the risks associated with non-compliance.
Read more about Artfi Genesis Offering Pass Analysis: Unlocking Art’s Elite Circle
Track Record and Reputation of the Custodian
The history and reputation of a custodian not only depicts their ability to be depended on and trusted but also points out whether they are trustworthy or not. A thorough research about the history of the RWAs custodian, including the client’s testimonials, expertise in the Real World Assets handling and past incidents and potential breaches should be carried out. A custodian who holds a positive reputation of conducting a reliable business and managing assets securely is likely to ignite confidence and trust.
Transparency
Transparency and open communication are the stronghold of a good relationship between the client and the custodian. Clear communication ensures that investors stay informed about the status of their real world assets and any other relevant developments. Select a custodian that provides regular updates, transparent reporting and responsive client support services.
Read more about Art Market Liquidity: Strategies and Insights for Investors
ArtFi: Emphasizing Long-Term Secure Custody
Artfi is a platform that majors on long-term secure custody in the tokenization of real-world assets. Their commitment to security is in line with the interests of investors in preserving the long-term value of their assets and minimizing risks related to security breaches or mismanagement.
They have enacted powerful security measures to make sure that assets are safeguarded with honesty over extended periods. They use advanced encryption procedures, multi-signature wallets and cold storage solutions to safeguard digital tokens and physical assets from cyber hacking, theft and unauthorized access.
Artfi Genesis Offering Pass: The Ultimate Key to Art Democratization
They comply with strict standards of regulation, these standards include Anti-Money Laundering (AML), and custody licensing regulations. Their compliance efforts minimize legal risks and make sure that all assets are managed according to the applicable laws and regulations, strengthening the investor’s trust and confidence.
Artfi has cultivated a reputation for reliability, excellence in operation and expertise in managing different classes of assets. Artfi are trusted by investors to securely manage and administer their assets, with awareness that they have a proven track record of offering exceptional custodial services.
ArtFi offers investors with clear reporting procedures, updates that are on time and access to relevant information. Their commitment to transparency cultivates open collaboration and enables investors to monitor their investments with effectiveness.
“Art is not just a commodity; it’s a testament to humanity’s creativity and soul. Embracing its beauty and value fosters a deeper connection with our collective heritage and enriches our lives beyond measure.” – Asif Kamal founder Artfi
Read more on Artfi Launches Genesis Offering Pass Sale: Democratizing Art Access for Just $10
Artfi is distinct in the custodial prospect by prioritizing the long term safe custody of investors’ real world assets. By continuously demanding high standards of security and reliability, Artfi redefines the responsibilities of custodians in making sure that the assets of the investors are protected over an extended period. This commitment cultivates trust and reliability in the process of digital securities enhancing the credibility and integrity of the investment landscape.
Conclusion
Selecting the most appropriate custodian to take care of your assets initially requires a close examination of important factors with Security and reliability being the key. Through employing powerful security measures, compliance to the regulatory requirements, positive reputation and transparency, investors can eliminate valuable risks therefore ensuring safety of their investments.
Real World Assets on Blockchain: Case Study of Artfi
Real-world assets (RWAs), either tangible or intangible, include a wide range of assets – from physical items like art and real estate to financial instruments such as stocks and bonds. All of which can be tokenized into digital tokens on the blockchain.
Real World Assets on Blockchain are transforming the game in how we invest by offering increased liquidity, transparency and accessibility. By turning things like art and real estate into digital tokens, it lets more people own parts of these typically exclusive assets. In other words, allowing fractional ownership and democratizing access to these traditional asset markets.
Learn more about Real-World Assets (RWAs) with this DroomDroom article offering an in-depth exploration of RWAs, from use cases to protocols and more.
Among the foremost companies leading this domain, Artfi stands alone in its innovative approach of intersecting art and blockchain to democratize the traditionally exclusive art market.
By tokenizing high-value artworks, Artfi not only makes art investment more accessible but also integrates these assets into the DeFi ecosystem–ultimately making possible innovative use cases such as obtaining loans against art pieces, or investing in tokenized real estate for passive income.
Let’s explore Artfi’s role in advancing real world assets on blockchain tokenization, the multi-faceted benefits it offers, and the broader impact on the art market and DeFi.
Partnered with industry giants like Binance Pay, Metamask, Phantom, Solana Pay, Coinbase, OKX and many others, @artfiglobal is revolutionizing art investments!Get ready to jump into the future of fine arts! IDO: June 13th – 14th*Don’t forget to register for the IDO pic.twitter.com/9UhuCD8opv
— Seedify (@SeedifyFund) June 11, 2024
Seedify announcement on X of Artfi IDO Artfi’s Innovative Approach to Real World Assets on Blockchain
Artfi has disrupted the art investment sector by using real world assets on blockchain technology to tokenize high-value artworks. The art market innovator’s process involves:
Meticulously selecting high-value artworks with impeccable provenance and rigorous evaluation.
Then, those selected artworks are digitized and tokenized on a blockchain platform to ensure fidelity and security.
Later on, these tokens are then divided into smaller fractions for multiple investors to own a portion of the artwork.
Ultimately, Artfi provides a dynamic marketplace for trading these tokens, integrating with major cryptocurrency exchanges to enhance liquidity.
By combining RWA and Fractionalisation through Blockchain integration Artfi is transforming the Art industry! For the first time in history, the barriers to entry are gone and anyone can invest in the $1.7 trillion fine art market. Join the revolution and become a part of this… pic.twitter.com/hy1IypMyui
— Artfi (@artfiglobal) June 9, 2024
Artfi opens up the $1.7 trillion art market to everyone.
Undoubtedly this approach addresses several key challenges that are existing in the art market today – such as high entry barriers, illiquidity and lack of transparency. It can arguably be said that Artfi provides several transformative advantages such as:-
Enhanced Liquidity
The illiquidity of traditional art investments often means a significant loss in value when sold pretty hastily. Artfi’s model supports 24/7 trading of art tokens to increase liquidity of real world assets on blockchain.
Wider Accessibility
Artfi lowers the financial threshold for art investment as the digital art venture invites an extensive array of investors into the world of real world assets on blockchain.
Unmatched Transparency
The blockchain serves as an immutable ledger that meticulously records each transaction and ownership change – which ultimately enhances security and authenticity for real world assets on blockchain.
Market Democratization
By allowing retail investors to engage, Artfi breaks down barriers traditionally faced by non-elite investors, democratizing access to real world assets on blockchain.
These benefits do more than just attract investors – they create a more stable and predictable market environment.
This article explores the traditional lack of liquidity in the art market, where artworks were difficult to sell quickly but Artfi is enabling fractional ownership of those expensive pieces.
Impact and Innovations: A Closer Look at Artfi’s Initiatives
A key case study in Artfi’s impact is the tokenization of Joan Miró’s “Peinture (Femme au Chapeau Rouge),” valued at $28.7 million. This incredible project allowed thousands of investors to claim a stake in a prestigious artwork, thus bringing about a communal investment ethos through real world assets on blockchain.
This extensive article by DroomDroom describes how Artfi allows artists to sell their work for a higher price and to connect with a wider audience of potential buyers. Give it a read here.
Further strengthening the stage of investor relations, Artfi has developed a knowledge hub and an ambassador program to educate and engage prospective investors.
Challenges and Artfi’s Solutions
Despite its innovative approach, Artfi faces several challenges that are common to the Real World Assets on Blockchain sector:
1. Regulatory Compliance: Ensuring compliance with diverse regulatory frameworks across different countries is extremely complex.
-Artfi addresses this by engaging with legal experts to walk through these intricacies.
2. Custodial Issues: Safeguarding the physical artwork while its digital tokens are traded poses a logistical challenge.
-Artfi’s solution includes maintaining a secure, centralized custodial service in Dubai that ensures the physical assets are protected and insured.
3. Market Acceptance: Gaining trust and acceptance from traditional art collectors and investors requires demonstrating the security and benefits of this incredible technology.
-Artfi’s educational initiatives and transparent operations help build this trust.
Broader Implications for DeFi and Beyond
The integration of RWAs into DeFi platforms definitely creates a mark of significance in the financial ecosystem. By tokenizing physical assets like art, DeFi platforms can offer diversified investment opportunities, reduce volatility and attract traditional investors.
Conclusion
Artfi truly showcases what blockchain can do when it comes to reshaping traditional markets with real world assets on blockchain tokenization. By tackling some core inefficiencies in the market and rolling out solid solutions, Artfi isn’t just making a mark in the digital economy – it’s also paving the way for new innovations across different asset classes.
The success of Artfi’s model truly proves just how crucial it is to have the right legal frameworks, stay ahead with tech, and provide comprehensive market education. It’s all about making the most of what blockchain has to offer for real world assets on blockchain.
Real World Assets on Blockchain are transforming the game in how we invest by offering increased liquidity, transparency and accessibility. By turning things like art and real estate into digital tokens, it lets more people own parts of these typically exclusive assets. In other words, allowing fractional ownership and democratizing access to these traditional asset markets.
Learn more about Real-World Assets (RWAs) with this DroomDroom article offering an in-depth exploration of RWAs, from use cases to protocols and more.
Among the foremost companies leading this domain, Artfi stands alone in its innovative approach of intersecting art and blockchain to democratize the traditionally exclusive art market.
By tokenizing high-value artworks, Artfi not only makes art investment more accessible but also integrates these assets into the DeFi ecosystem–ultimately making possible innovative use cases such as obtaining loans against art pieces, or investing in tokenized real estate for passive income.
Let’s explore Artfi’s role in advancing real world assets on blockchain tokenization, the multi-faceted benefits it offers, and the broader impact on the art market and DeFi.
Partnered with industry giants like Binance Pay, Metamask, Phantom, Solana Pay, Coinbase, OKX and many others, @artfiglobal is revolutionizing art investments!Get ready to jump into the future of fine arts! IDO: June 13th – 14th*Don’t forget to register for the IDO pic.twitter.com/9UhuCD8opv
— Seedify (@SeedifyFund) June 11, 2024
Seedify announcement on X of Artfi IDO Artfi’s Innovative Approach to Real World Assets on Blockchain
Artfi has disrupted the art investment sector by using real world assets on blockchain technology to tokenize high-value artworks. The art market innovator’s process involves:
Meticulously selecting high-value artworks with impeccable provenance and rigorous evaluation.
Then, those selected artworks are digitized and tokenized on a blockchain platform to ensure fidelity and security.
Later on, these tokens are then divided into smaller fractions for multiple investors to own a portion of the artwork.
Ultimately, Artfi provides a dynamic marketplace for trading these tokens, integrating with major cryptocurrency exchanges to enhance liquidity.
By combining RWA and Fractionalisation through Blockchain integration Artfi is transforming the Art industry! For the first time in history, the barriers to entry are gone and anyone can invest in the $1.7 trillion fine art market. Join the revolution and become a part of this… pic.twitter.com/hy1IypMyui
— Artfi (@artfiglobal) June 9, 2024
Artfi opens up the $1.7 trillion art market to everyone.
Undoubtedly this approach addresses several key challenges that are existing in the art market today – such as high entry barriers, illiquidity and lack of transparency. It can arguably be said that Artfi provides several transformative advantages such as:-
Enhanced Liquidity
The illiquidity of traditional art investments often means a significant loss in value when sold pretty hastily. Artfi’s model supports 24/7 trading of art tokens to increase liquidity of real world assets on blockchain.
Wider Accessibility
Artfi lowers the financial threshold for art investment as the digital art venture invites an extensive array of investors into the world of real world assets on blockchain.
Unmatched Transparency
The blockchain serves as an immutable ledger that meticulously records each transaction and ownership change – which ultimately enhances security and authenticity for real world assets on blockchain.
Market Democratization
By allowing retail investors to engage, Artfi breaks down barriers traditionally faced by non-elite investors, democratizing access to real world assets on blockchain.
These benefits do more than just attract investors – they create a more stable and predictable market environment.
This article explores the traditional lack of liquidity in the art market, where artworks were difficult to sell quickly but Artfi is enabling fractional ownership of those expensive pieces.
Impact and Innovations: A Closer Look at Artfi’s Initiatives
A key case study in Artfi’s impact is the tokenization of Joan Miró’s “Peinture (Femme au Chapeau Rouge),” valued at $28.7 million. This incredible project allowed thousands of investors to claim a stake in a prestigious artwork, thus bringing about a communal investment ethos through real world assets on blockchain.
This extensive article by DroomDroom describes how Artfi allows artists to sell their work for a higher price and to connect with a wider audience of potential buyers. Give it a read here.
Further strengthening the stage of investor relations, Artfi has developed a knowledge hub and an ambassador program to educate and engage prospective investors.
Challenges and Artfi’s Solutions
Despite its innovative approach, Artfi faces several challenges that are common to the Real World Assets on Blockchain sector:
1. Regulatory Compliance: Ensuring compliance with diverse regulatory frameworks across different countries is extremely complex.
-Artfi addresses this by engaging with legal experts to walk through these intricacies.
2. Custodial Issues: Safeguarding the physical artwork while its digital tokens are traded poses a logistical challenge.
-Artfi’s solution includes maintaining a secure, centralized custodial service in Dubai that ensures the physical assets are protected and insured.
3. Market Acceptance: Gaining trust and acceptance from traditional art collectors and investors requires demonstrating the security and benefits of this incredible technology.
-Artfi’s educational initiatives and transparent operations help build this trust.
Broader Implications for DeFi and Beyond
The integration of RWAs into DeFi platforms definitely creates a mark of significance in the financial ecosystem. By tokenizing physical assets like art, DeFi platforms can offer diversified investment opportunities, reduce volatility and attract traditional investors.
Conclusion
Artfi truly showcases what blockchain can do when it comes to reshaping traditional markets with real world assets on blockchain tokenization. By tackling some core inefficiencies in the market and rolling out solid solutions, Artfi isn’t just making a mark in the digital economy – it’s also paving the way for new innovations across different asset classes.
The success of Artfi’s model truly proves just how crucial it is to have the right legal frameworks, stay ahead with tech, and provide comprehensive market education. It’s all about making the most of what blockchain has to offer for real world assets on blockchain.
Fantasy Extreme: a Revolutionary Fantasy Sports Platform Powered By ICP
In an era where digital transformations are reshaping industries, Fantasy Extreme stands at the forefront of revolutionizing fantasy sports. Combining the thrill of fantasy football with cutting-edge blockchain technology, Fantasy Extreme is not just a game-changer but a pioneer in decentralizing the fantasy sports landscape. This article explores the project’s vision, its integration with Internet Computer Protocol (ICP), and how it aims to create a secure, transparent, and borderless fantasy sports experience.Fantasy Extreme is part of the ICP incubator (Quantum Leap Labs). Quantum Leap Labs provides strategic Internet Computer expertise to help teams align their project goals with their overall DAO objectives, enabling them to make informed decisions and launch in the Web3 space.
Our launch is making waves across top media platforms! Thanks, @DroomDroom, for covering our launch. More info coming soon.Read more:https://t.co/m6v3i56IEO
— Quantum Leap Labs (@quantumleaplab) June 6, 2024
Quantum Leap Labs is the official incubator of the ICP HUB Canada & US Introducing Fantasy Extreme
Fantasy Extreme is the world’s first fantasy football platform powered by blockchain technology, specifically Internet Computer Protocol (ICP). The platform is designed to provide an immersive, secure, and profitable gaming experience, eliminating geographical boundaries and bringing together a global community of fantasy sports enthusiasts. By leveraging the unique capabilities of ICP, Fantasy Extreme offers unparalleled transparency, security, and user control, distinguishing itself from traditional fantasy sports platforms that often rely on centralized servers.
The Role of Internet Computer Protocol (ICP)
ICP, developed by the DFINITY Foundation, is a revolutionary blockchain protocol that enables the creation of decentralized applications (dApps) and services. Unlike traditional blockchain platforms that may rely on centralized servers like AWS, ICP operates in a completely decentralized manner, ensuring higher security and resilience. This makes ICP an ideal foundation for Fantasy Extreme, providing the necessary infrastructure to support a global, decentralized fantasy sports platform.
ICP’s architecture allows for faster transaction speeds and lower costs, which are critical for a platform like Fantasy Extreme that requires real-time interactions and frequent transactions. Additionally, ICP’s robust security measures protect user data and assets, ensuring a safe and trustworthy gaming environment.
How Fantasy Extreme Works?
Fantasy Extreme operates on a blockchain-based platform where users can create their fantasy football teams, compete in leagues, and earn rewards.
Players can form their fantasy football teams by selecting real-life footballers based on their performance statistics. The platform provides comprehensive data and analytics to assist in making informed choices. The decentralized nature of the platform ensures fair play and transparency in all competitions.
Winners and top performers in the leagues earn rewards in the form of FEX tokens, the native cryptocurrency of Fantasy Extreme. These tokens can also be used for entering into competitions.
All transactions are conducted on the ICP blockchain, ensuring security, transparency, and immutability.
Blockchain Technology and Transparency
One of the significant advantages of Fantasy Extreme is its use of blockchain technology to ensure transparency and fairness. Traditional fantasy sports platforms often face issues related to trust and transparency, as centralized control can lead to biased outcomes or unfair practices. By leveraging blockchain, Fantasy Extreme ensures that all transactions, game outcomes, and reward distributions are transparent and verifiable.
Blockchain’s decentralized ledger records every transaction, making it impossible to alter or manipulate data. This transparency builds trust among users, knowing that the platform operates on fair and unbiased principles. Furthermore, the use of smart contracts automates and enforces the rules of the game, ensuring that all participants adhere to the same standards without any manual intervention.
Eliminating Geographical Barriers
Fantasy Extreme’s decentralized nature eliminates geographical boundaries, allowing users from around the world to participate. Unlike traditional platforms that may be restricted by regional regulations or infrastructure limitations, Fantasy Extreme operates on a global scale. This inclusivity fosters a diverse and vibrant community of fantasy sports enthusiasts, creating opportunities for players to compete and collaborate with others from different parts of the world.
Benefits and Potential
The benefits of Fantasy Extreme extend beyond just gaming. The platform offers several key advantages:
Security: By leveraging ICP, Fantasy Extreme ensures that all user data and transactions are secure and protected from cyber threats. The decentralized nature of the platform reduces the risk of data breaches and hacking.
Transparency: Blockchain technology provides complete transparency in all operations, from game results to reward distributions. Users can verify every transaction, ensuring trust and fairness.Profitability: The FEX token offers significant earning potential. Users can earn rewards through gameplay, and the value of FEX tokens can be appreciated over time, providing investment opportunities.
Global Access: Fantasy Extreme’s decentralized platform allows users from any location to participate, breaking down geographical barriers and creating a truly global community.
Innovation: The integration of ICP enables Fantasy Extreme to offer innovative features and services that are not possible with traditional centralized platforms.
Future Plans
Fantasy Extreme has ambitious plans to expand and enhance its platform. We aim to introduce new leagues and competitions to cater to different skill levels and interests. We consistently aim to provide advanced analytics and tools to help users make informed decisions when forming teams and strategizing. Building a vibrant community through forums, social media, and interactive events, fostering collaboration and competition among users is set at our preference list.
Summary
Fantasy Extreme is poised to revolutionize the fantasy sports industry by combining the excitement of fantasy football with the security and transparency of blockchain technology. Powered by Internet Computer Protocol (ICP), the platform offers a decentralized, secure, and global P2E gaming experience. With its innovative features, commitment to transparency, and ambitious plans, Fantasy Extreme is set to become a leader in the fantasy sports arena, providing users with endless opportunities to play, earn, and invest.Join the revolution today and be part of the future of fantasy sports!
Our launch is making waves across top media platforms! Thanks, @DroomDroom, for covering our launch. More info coming soon.Read more:https://t.co/m6v3i56IEO
— Quantum Leap Labs (@quantumleaplab) June 6, 2024
Quantum Leap Labs is the official incubator of the ICP HUB Canada & US Introducing Fantasy Extreme
Fantasy Extreme is the world’s first fantasy football platform powered by blockchain technology, specifically Internet Computer Protocol (ICP). The platform is designed to provide an immersive, secure, and profitable gaming experience, eliminating geographical boundaries and bringing together a global community of fantasy sports enthusiasts. By leveraging the unique capabilities of ICP, Fantasy Extreme offers unparalleled transparency, security, and user control, distinguishing itself from traditional fantasy sports platforms that often rely on centralized servers.
The Role of Internet Computer Protocol (ICP)
ICP, developed by the DFINITY Foundation, is a revolutionary blockchain protocol that enables the creation of decentralized applications (dApps) and services. Unlike traditional blockchain platforms that may rely on centralized servers like AWS, ICP operates in a completely decentralized manner, ensuring higher security and resilience. This makes ICP an ideal foundation for Fantasy Extreme, providing the necessary infrastructure to support a global, decentralized fantasy sports platform.
ICP’s architecture allows for faster transaction speeds and lower costs, which are critical for a platform like Fantasy Extreme that requires real-time interactions and frequent transactions. Additionally, ICP’s robust security measures protect user data and assets, ensuring a safe and trustworthy gaming environment.
How Fantasy Extreme Works?
Fantasy Extreme operates on a blockchain-based platform where users can create their fantasy football teams, compete in leagues, and earn rewards.
Players can form their fantasy football teams by selecting real-life footballers based on their performance statistics. The platform provides comprehensive data and analytics to assist in making informed choices. The decentralized nature of the platform ensures fair play and transparency in all competitions.
Winners and top performers in the leagues earn rewards in the form of FEX tokens, the native cryptocurrency of Fantasy Extreme. These tokens can also be used for entering into competitions.
All transactions are conducted on the ICP blockchain, ensuring security, transparency, and immutability.
Blockchain Technology and Transparency
One of the significant advantages of Fantasy Extreme is its use of blockchain technology to ensure transparency and fairness. Traditional fantasy sports platforms often face issues related to trust and transparency, as centralized control can lead to biased outcomes or unfair practices. By leveraging blockchain, Fantasy Extreme ensures that all transactions, game outcomes, and reward distributions are transparent and verifiable.
Blockchain’s decentralized ledger records every transaction, making it impossible to alter or manipulate data. This transparency builds trust among users, knowing that the platform operates on fair and unbiased principles. Furthermore, the use of smart contracts automates and enforces the rules of the game, ensuring that all participants adhere to the same standards without any manual intervention.
Eliminating Geographical Barriers
Fantasy Extreme’s decentralized nature eliminates geographical boundaries, allowing users from around the world to participate. Unlike traditional platforms that may be restricted by regional regulations or infrastructure limitations, Fantasy Extreme operates on a global scale. This inclusivity fosters a diverse and vibrant community of fantasy sports enthusiasts, creating opportunities for players to compete and collaborate with others from different parts of the world.
Benefits and Potential
The benefits of Fantasy Extreme extend beyond just gaming. The platform offers several key advantages:
Security: By leveraging ICP, Fantasy Extreme ensures that all user data and transactions are secure and protected from cyber threats. The decentralized nature of the platform reduces the risk of data breaches and hacking.
Transparency: Blockchain technology provides complete transparency in all operations, from game results to reward distributions. Users can verify every transaction, ensuring trust and fairness.Profitability: The FEX token offers significant earning potential. Users can earn rewards through gameplay, and the value of FEX tokens can be appreciated over time, providing investment opportunities.
Global Access: Fantasy Extreme’s decentralized platform allows users from any location to participate, breaking down geographical barriers and creating a truly global community.
Innovation: The integration of ICP enables Fantasy Extreme to offer innovative features and services that are not possible with traditional centralized platforms.
Future Plans
Fantasy Extreme has ambitious plans to expand and enhance its platform. We aim to introduce new leagues and competitions to cater to different skill levels and interests. We consistently aim to provide advanced analytics and tools to help users make informed decisions when forming teams and strategizing. Building a vibrant community through forums, social media, and interactive events, fostering collaboration and competition among users is set at our preference list.
Summary
Fantasy Extreme is poised to revolutionize the fantasy sports industry by combining the excitement of fantasy football with the security and transparency of blockchain technology. Powered by Internet Computer Protocol (ICP), the platform offers a decentralized, secure, and global P2E gaming experience. With its innovative features, commitment to transparency, and ambitious plans, Fantasy Extreme is set to become a leader in the fantasy sports arena, providing users with endless opportunities to play, earn, and invest.Join the revolution today and be part of the future of fantasy sports!
Quantum Leap Labs Launches North America’s First ICP Incubator
Quantum Leap Labs ignites innovation by launching North America’s first incubator dedicated to the Internet Computer Protocol (ICP). This incredible initiative dubbed, the Quantum Leap Labs Incubator, instigates the development of ICP-based projects and provides unparalleled support for the startups from the initial spark of an idea to a successful launch and beyond.
At Quantum Leap Labs, we support passionate entrepreneurs with innovative ideas who want to join the Internet Computer ecosystem. We pride ourselves on professionalism and a family-like atmosphere. Leveraging our experience, we help blockchain entrepreneurs achieve success and build strong reputations for their businesses.
Javier Arroyo Ferrer, Founder of Quantum Leap Labs
The incubator is placed at the very core of the ICP ecosystem beyond being a simple launchpad. As an official partner of ICP HUB Canada & US, it leverages the power of the Olympus platform. This state-of-the-art environment is specifically designed for building high-caliber decentralized applications (dApps).
Think of it as a space for you to work with others, plenty of tools and resources at your disposal – the Olympus Platform makes this possible.
It enables visionaries to connect, share ideas, and push the boundaries of innovation, ultimately leading to projects that thrive within the Web3 space.
The inaugural cohort will commence in the third week of June with applications now open for two distinct programs:
Accelerator Program: Geared toward more seasoned teams working on their Minimum Viable Product (MVP) within the web3 ecosystem.
Resident Program: Offered to winning teams of hackathons and student startup entrepreurs, this is a nurturing ground for new ideas.
Quantum Leap Labs Incubator is designed to redefine how web3 startups gain a competitive edge. The incubator functions as a community builder and catalyst for decentralization – providing a new era of internet independence and innovation.
The incubator’s comprehensive support system is designed to cater to the various needs of growing startups as the participants will receive:
Legal Setup and DAO Implementation: Guidance on legal compliance and decentralized governance.
Tokenomics: Expert advice on token model structuring and economic sustainability
Marketing and SNS: Customized marketing strategies to enhance visibility and user engagement.
Grant Application Support: Assistance in securing funding through meticulously crafted grant proposals.
Canister Design: Tailored technical support to optimize project infrastructure.
Community Building: Strategies to engage and expand user base.
First 1000 Users: Focused tactics to build a robust early user base.
Our extensive experience as entrepreneurs in various roles within the Internet Computer and blockchain ecosystems provides us with a unique and advantageous perspective for incubating top-tier projects. From technology and legal to marketing, media press, and business development, we assist entrepreneurs in achieving long-term success with their ventures.
Ritvick Paliwal, Tech Advisor
For entrepreneurs and tech enthusiasts looking to make a significant impact in the blockchain space, Quantum Leap Labs Incubator offers an unmatched opportunity to turn visionary ideas into reality.
Apply now to be part of this transformative journey. For more information and to submit your application, visit Quantum Leap Labs.
At Quantum Leap Labs, we support passionate entrepreneurs with innovative ideas who want to join the Internet Computer ecosystem. We pride ourselves on professionalism and a family-like atmosphere. Leveraging our experience, we help blockchain entrepreneurs achieve success and build strong reputations for their businesses.
Javier Arroyo Ferrer, Founder of Quantum Leap Labs
The incubator is placed at the very core of the ICP ecosystem beyond being a simple launchpad. As an official partner of ICP HUB Canada & US, it leverages the power of the Olympus platform. This state-of-the-art environment is specifically designed for building high-caliber decentralized applications (dApps).
Think of it as a space for you to work with others, plenty of tools and resources at your disposal – the Olympus Platform makes this possible.
It enables visionaries to connect, share ideas, and push the boundaries of innovation, ultimately leading to projects that thrive within the Web3 space.
The inaugural cohort will commence in the third week of June with applications now open for two distinct programs:
Accelerator Program: Geared toward more seasoned teams working on their Minimum Viable Product (MVP) within the web3 ecosystem.
Resident Program: Offered to winning teams of hackathons and student startup entrepreurs, this is a nurturing ground for new ideas.
Quantum Leap Labs Incubator is designed to redefine how web3 startups gain a competitive edge. The incubator functions as a community builder and catalyst for decentralization – providing a new era of internet independence and innovation.
The incubator’s comprehensive support system is designed to cater to the various needs of growing startups as the participants will receive:
Legal Setup and DAO Implementation: Guidance on legal compliance and decentralized governance.
Tokenomics: Expert advice on token model structuring and economic sustainability
Marketing and SNS: Customized marketing strategies to enhance visibility and user engagement.
Grant Application Support: Assistance in securing funding through meticulously crafted grant proposals.
Canister Design: Tailored technical support to optimize project infrastructure.
Community Building: Strategies to engage and expand user base.
First 1000 Users: Focused tactics to build a robust early user base.
Our extensive experience as entrepreneurs in various roles within the Internet Computer and blockchain ecosystems provides us with a unique and advantageous perspective for incubating top-tier projects. From technology and legal to marketing, media press, and business development, we assist entrepreneurs in achieving long-term success with their ventures.
Ritvick Paliwal, Tech Advisor
For entrepreneurs and tech enthusiasts looking to make a significant impact in the blockchain space, Quantum Leap Labs Incubator offers an unmatched opportunity to turn visionary ideas into reality.
Apply now to be part of this transformative journey. For more information and to submit your application, visit Quantum Leap Labs.
Unlocking Crypto Airdrops: Identify and Prevent Airdrop Scams
“Crypto Airdrops are a good way to reward loyal users and attract new ones,” said Chabgpeng Zhao, the founder and CEO of Binance. “It is similar to having a surprise birthday gift mailed directly to your home.”
Airdrops in the crypto world are a marketing strategy used by Web3 companies to incentivize their active community or encourage adoption by depositing digital tokens directly into the wallets.
This article explains what airdrops are, how they differ from ICOs and STOs, their potential threats, and how to avoid them simply and easily. Read on and discover one of the most astonishing topics of the crypto world.
What Is Crypto Airdrop?
A crypto airdrop is a promotional initiative by Web3-based companies or startups to encourage adoption or bootstrap their project.
Here, a small amount of virtual currency is deposited directly into the user’s wallet for free or in exchange for small services like retweeting or reposting a post sent by the company announcing airdrops. Airdrops are public campaigns designed to spread awareness about the company’s platform and encourage the adoption of new tokens or coins.
Promotion of airdrops is generally done on the company’s official website, social media sites like Twitter, Discord, Reddit, or some crypto forums like bitcoin.com.
Crypto coins or tokens are deposited only to specific wallets depending on the Blockchain network or amount of coin holding.
To qualify for an airdrop may rely on a particular factor, like the recipient must hold some coins or have to perform specific tasks, such as writing a promotional blog post or Twitter thread, reposting the company’s post about the project, increasing the community base of the network or increasing the impressions and interaction with their project and network.
Are you new to Web3? Here’s a Comprehensive guide to know all about Blockchain forks by Droomdoom.
Types of Crypto Airdrops
Standard Airdrop
No task completion is required to qualify for a standard airdrop; participants just need to express their interest in receiving the airdrop. The individual must sign up with a valid email address. This type of airdrop can be time-sensitive and doled out on an FCFS basis (first come, first serve).
They may have a limited supply of coins to distribute, limiting how much each person can get. For example, RabbitX has used standard airdrops to roll out their new coin and create a new user base.
Reminder: Only 3 days left to participate in the #RabbitX airdrop for early mainnet users! Don't miss your chance. Snapshot ends on April 9th, so deposit and trade now at https://t.co/0LV1Tnqxlp #backthebunny pic.twitter.com/K6GYnmp9MH
— RabbitX Get App Now! (@rabbitx_io) April 6, 2023
However, they are popular due to their simple method, which makes them vulnerable. It is effortless for an individual to create multiple wallets to drain out airdrop resources.
Bounty Airdrop
To qualify for bounty airdrops, participants may need to perform specific tasks. Some companies roll out bounty airdrops when they need low-lift promotional work. The tasks assigned could be retweeting, posting a promotional blog post, writing a Twitter thread and tagging the company’s handles, joining their discord channel, or signing up for their newsletter.
Users may need to perform specific tasks to earn points, and using those points, they can participate in airdrop. For example, a user can participate in an airdrop after earning 500 points. Each task is labeled as 100 points like the Foodie NFT platform rolled out nine 9-step to-do lists to become eligible to participate in their $75000 airdrop, including following their social media handles and tagging friends.
Holder Airdrop
As mentioned in the name ‘holder,’ this airdrop is specifically for those who may hold a certain number of existing tokens or hold existing tokens at all at the time of promotion.
Companies mainly design holder airdrops to incentivize their most loyal and invested users. Some airdrops may only reward users who meet or exceed a threshold amount set by the company.
One downside is that some holders may not want the airdrop.
Exclusive Airdrop
According to the name, the exclusive airdrop is explicitly designed for some users who may not have any holding in their wallets. This type of airdrop is not based on how much coin the user holds but on factors like time spent on the project, money spent on non-token activities, and level of engagement on the forum.
For example, Swapping, bridging, or staking the token.
Exclusive airdrop is a more centralized way of rewarding users closest to the project. For example, Uniswap’s airdrop of 400 UNI tokens for its long-standing users, regardless of their holding status.
Raffle Airdrop
Raffle airdrops implement a lottery mechanism. Here, companies may release the number of airdrops they are willing to give and encourage users to earn raffle tickets. Raffle tickets can be achieved by many methods, such as earning points, simply expressing interest, or holding some tokens.
This results in the number of individuals participating exceeding the number of airdrops to be delivered by the company. Therefore, a raffle occurs, and several wallets are selected randomly for the reward.
For example, gaming platform Revv rewarded $500 to their 100 lucky winners.
Game-Changing Airdrops
Look
Look is a token NFT trading platform LooksRare on Ethereum issued to increase its user base. Looksrare entered into a genre with tough competition. So, you incentivize people. LooksRare airdropped 12% of LOOKS total supply to anyone with a combined 3 ETH trading Volume or snapshot of the period from January to December. It worked. They captured a large user base within only four months.
Uniswap
In September 2020, the decentralized protocol UNISWAP airdropped 400 UNI tokens worth $1200. Whoever interacted actively with this decentralized exchange before September 1, 2020, was eligible for the airdrop. Uniswap distributed 150m UNI tokens, with more than half of it going to their team members and investors.
Arbitrum
On March 16, 2023, Arbitrum announced its airdrop and ARB token, which went live on March 23, 2023.
New to Cryptocurrency? What are the inevitable cryptocurrency scams that you’re likely to fall for?
The Arbitrum rewarded users based on their activity on two chain versions, Arbitrum One and Arbitrum Nova. It was based on a point system. The user needed to earn at least three points to become eligible for the airdrop, which could be achieved by performing transactions, liquidating, and bridging funds on Arbitrum.
More points = More tokens in Airdrop.
70% of the airdrop resources went to team members and investors with equal to or more than four years of investing period.
Airdrops vs. ICOs vs. STOs
Crypto airdrops and Initial Coin offerings may appear the same in front, but they are pretty different. Unlike ICOs, crypto airdrops don’t require any investment.
ICOs are very similar to IPOs (Initial public offerings) in raising an investment and locking the funds from investors. In ICOs and IPOs, allotment is done through a lottery mechanism. If users are not allocated the token they bid for, funds are returned automatically to their wallets.
ICOs are initially offered to VCs (venture capitalists). Though ICOs require an upfront investment, investors are expected to buy the coin or tokens instead of going for free airdrops.
The ultimate goal behind Initial Coin offerings and airdrops is entirely different. ICOs are intended to attract investors willing to put their capital into the project. This user base is more likely to see this project as their investment. Alternatively, airdrops are intended to spread awareness among small users.
STOs ( Security Token Offerings) are a method for fundraising in the crypto world. It involves issuing security tokens representing ownership in an investment asset like real estate or equity in a company.
Learn more ways to spot and avoid Crypto scams, compiled by DroomDroom.
In STOs, the information is recorded for security tokens. However, the main difference is that STOs are saved in the Blockchain and represented by the token. Unlike airdrops or ICOs, STOs are regulated and backed by assets that ensure investor protection.
Scams and Prevention
Mostly, the ultimate goal of crypto airdrop is promotion. It never seeks capital investment. Some crypto scams involving sending some bitcoins or tokens for winning the airdrops come under dusting scams.
Airdrops are generally too-good-to-be-true incentives, where it’s easy for users to fall prey to scams. One type of airdrop scam is phishing, which relies on promising users fake airdrops. In phishing scams, users are redirected to third-party websites to input their wallet information to win the phony airdrop. The scam is complete once users connect their wallets using their secret keys or phrases, and their wallet gets drained.
Do you want to know more about Sandwich scams? Here is a beginner’s guide on Sandwich attacks by Richardson Chinonyerem by DroomDroom.
There is another type of airdrop scam called rug pull scam. It can be described through this phrase: “pumping and dumping.” Here, users can be enticed to invest in certain security hacks, buy many specific tokens to increase their demand or get an airdrop. Scammers could liquidate their shares when the token’s value reaches a certain level, thereby dropping its value.
The unwary investors then are left with a token worth nothing.
Or, some people can approach the investor to invest in their project and later run away with all the money without giving any notice.
Conclusion
Crypto airdrops play a significant role in promoting new coins and encouraging adoption in small communities. It can be an excellent way for Crypto enthusiasts to get free tokens and NFTs. However, it’s essential to be cautious and avoid scams. The go-to phrase for every crypto enthusiast in the Crypto world is “Do your own research.”
Airdrops in the crypto world are a marketing strategy used by Web3 companies to incentivize their active community or encourage adoption by depositing digital tokens directly into the wallets.
This article explains what airdrops are, how they differ from ICOs and STOs, their potential threats, and how to avoid them simply and easily. Read on and discover one of the most astonishing topics of the crypto world.
What Is Crypto Airdrop?
A crypto airdrop is a promotional initiative by Web3-based companies or startups to encourage adoption or bootstrap their project.
Here, a small amount of virtual currency is deposited directly into the user’s wallet for free or in exchange for small services like retweeting or reposting a post sent by the company announcing airdrops. Airdrops are public campaigns designed to spread awareness about the company’s platform and encourage the adoption of new tokens or coins.
Promotion of airdrops is generally done on the company’s official website, social media sites like Twitter, Discord, Reddit, or some crypto forums like bitcoin.com.
Crypto coins or tokens are deposited only to specific wallets depending on the Blockchain network or amount of coin holding.
To qualify for an airdrop may rely on a particular factor, like the recipient must hold some coins or have to perform specific tasks, such as writing a promotional blog post or Twitter thread, reposting the company’s post about the project, increasing the community base of the network or increasing the impressions and interaction with their project and network.
Are you new to Web3? Here’s a Comprehensive guide to know all about Blockchain forks by Droomdoom.
Types of Crypto Airdrops
Standard Airdrop
No task completion is required to qualify for a standard airdrop; participants just need to express their interest in receiving the airdrop. The individual must sign up with a valid email address. This type of airdrop can be time-sensitive and doled out on an FCFS basis (first come, first serve).
They may have a limited supply of coins to distribute, limiting how much each person can get. For example, RabbitX has used standard airdrops to roll out their new coin and create a new user base.
Reminder: Only 3 days left to participate in the #RabbitX airdrop for early mainnet users! Don't miss your chance. Snapshot ends on April 9th, so deposit and trade now at https://t.co/0LV1Tnqxlp #backthebunny pic.twitter.com/K6GYnmp9MH
— RabbitX Get App Now! (@rabbitx_io) April 6, 2023
However, they are popular due to their simple method, which makes them vulnerable. It is effortless for an individual to create multiple wallets to drain out airdrop resources.
Bounty Airdrop
To qualify for bounty airdrops, participants may need to perform specific tasks. Some companies roll out bounty airdrops when they need low-lift promotional work. The tasks assigned could be retweeting, posting a promotional blog post, writing a Twitter thread and tagging the company’s handles, joining their discord channel, or signing up for their newsletter.
Users may need to perform specific tasks to earn points, and using those points, they can participate in airdrop. For example, a user can participate in an airdrop after earning 500 points. Each task is labeled as 100 points like the Foodie NFT platform rolled out nine 9-step to-do lists to become eligible to participate in their $75000 airdrop, including following their social media handles and tagging friends.
Holder Airdrop
As mentioned in the name ‘holder,’ this airdrop is specifically for those who may hold a certain number of existing tokens or hold existing tokens at all at the time of promotion.
Companies mainly design holder airdrops to incentivize their most loyal and invested users. Some airdrops may only reward users who meet or exceed a threshold amount set by the company.
One downside is that some holders may not want the airdrop.
Exclusive Airdrop
According to the name, the exclusive airdrop is explicitly designed for some users who may not have any holding in their wallets. This type of airdrop is not based on how much coin the user holds but on factors like time spent on the project, money spent on non-token activities, and level of engagement on the forum.
For example, Swapping, bridging, or staking the token.
Exclusive airdrop is a more centralized way of rewarding users closest to the project. For example, Uniswap’s airdrop of 400 UNI tokens for its long-standing users, regardless of their holding status.
Raffle Airdrop
Raffle airdrops implement a lottery mechanism. Here, companies may release the number of airdrops they are willing to give and encourage users to earn raffle tickets. Raffle tickets can be achieved by many methods, such as earning points, simply expressing interest, or holding some tokens.
This results in the number of individuals participating exceeding the number of airdrops to be delivered by the company. Therefore, a raffle occurs, and several wallets are selected randomly for the reward.
For example, gaming platform Revv rewarded $500 to their 100 lucky winners.
Game-Changing Airdrops
Look
Look is a token NFT trading platform LooksRare on Ethereum issued to increase its user base. Looksrare entered into a genre with tough competition. So, you incentivize people. LooksRare airdropped 12% of LOOKS total supply to anyone with a combined 3 ETH trading Volume or snapshot of the period from January to December. It worked. They captured a large user base within only four months.
Uniswap
In September 2020, the decentralized protocol UNISWAP airdropped 400 UNI tokens worth $1200. Whoever interacted actively with this decentralized exchange before September 1, 2020, was eligible for the airdrop. Uniswap distributed 150m UNI tokens, with more than half of it going to their team members and investors.
Arbitrum
On March 16, 2023, Arbitrum announced its airdrop and ARB token, which went live on March 23, 2023.
New to Cryptocurrency? What are the inevitable cryptocurrency scams that you’re likely to fall for?
The Arbitrum rewarded users based on their activity on two chain versions, Arbitrum One and Arbitrum Nova. It was based on a point system. The user needed to earn at least three points to become eligible for the airdrop, which could be achieved by performing transactions, liquidating, and bridging funds on Arbitrum.
More points = More tokens in Airdrop.
70% of the airdrop resources went to team members and investors with equal to or more than four years of investing period.
Airdrops vs. ICOs vs. STOs
Crypto airdrops and Initial Coin offerings may appear the same in front, but they are pretty different. Unlike ICOs, crypto airdrops don’t require any investment.
ICOs are very similar to IPOs (Initial public offerings) in raising an investment and locking the funds from investors. In ICOs and IPOs, allotment is done through a lottery mechanism. If users are not allocated the token they bid for, funds are returned automatically to their wallets.
ICOs are initially offered to VCs (venture capitalists). Though ICOs require an upfront investment, investors are expected to buy the coin or tokens instead of going for free airdrops.
The ultimate goal behind Initial Coin offerings and airdrops is entirely different. ICOs are intended to attract investors willing to put their capital into the project. This user base is more likely to see this project as their investment. Alternatively, airdrops are intended to spread awareness among small users.
STOs ( Security Token Offerings) are a method for fundraising in the crypto world. It involves issuing security tokens representing ownership in an investment asset like real estate or equity in a company.
Learn more ways to spot and avoid Crypto scams, compiled by DroomDroom.
In STOs, the information is recorded for security tokens. However, the main difference is that STOs are saved in the Blockchain and represented by the token. Unlike airdrops or ICOs, STOs are regulated and backed by assets that ensure investor protection.
Scams and Prevention
Mostly, the ultimate goal of crypto airdrop is promotion. It never seeks capital investment. Some crypto scams involving sending some bitcoins or tokens for winning the airdrops come under dusting scams.
Airdrops are generally too-good-to-be-true incentives, where it’s easy for users to fall prey to scams. One type of airdrop scam is phishing, which relies on promising users fake airdrops. In phishing scams, users are redirected to third-party websites to input their wallet information to win the phony airdrop. The scam is complete once users connect their wallets using their secret keys or phrases, and their wallet gets drained.
Do you want to know more about Sandwich scams? Here is a beginner’s guide on Sandwich attacks by Richardson Chinonyerem by DroomDroom.
There is another type of airdrop scam called rug pull scam. It can be described through this phrase: “pumping and dumping.” Here, users can be enticed to invest in certain security hacks, buy many specific tokens to increase their demand or get an airdrop. Scammers could liquidate their shares when the token’s value reaches a certain level, thereby dropping its value.
The unwary investors then are left with a token worth nothing.
Or, some people can approach the investor to invest in their project and later run away with all the money without giving any notice.
Conclusion
Crypto airdrops play a significant role in promoting new coins and encouraging adoption in small communities. It can be an excellent way for Crypto enthusiasts to get free tokens and NFTs. However, it’s essential to be cautious and avoid scams. The go-to phrase for every crypto enthusiast in the Crypto world is “Do your own research.”
Evolution of Bitcoin Mining: a Journey Into Cryptocurrency’s Backbone
Bitcoin is the first decentralized and one of the most popular digital currencies. It offers peer-to-peer transfers without the involvement of intermediaries like banks, government, or brokers, using Blockchain technology. Blockchain is a distributed immutable ledger that allows maintaining a secure and decentralized record of transactions. It is a shared database that stores data in blocks chained together by cryptography.
Bitcoin mining is a process of minting new coins and validating ongoing transactions by solving complex cryptographic puzzles.
This article explains in detail what is bitcoin mining, how it works, what is bitcoin halving including how bitcoin mining evolved with time, and what economics and issues you need to know when you are exploring bitcoin mining.
What Is Bitcoin Mining?
Bitcoin mining is a process of minting new coins and validating ongoing transactions by solving complex cryptographic puzzles.
It is probably some heavy, expensive machinery in remote parts of the world and suit-face workers with hard hats digging deep underneath the earth’s surface to find natural resources like coal or diamond.
Well, bitcoin miners aren’t suit-faced humans working in remote parts, but it’s a network of powerful computers worldwide. These miners add individual blocks to a Bitcoin’s blockchain network, validating ongoing transactions by solving complex cryptographic puzzles, thereby getting the reward in return: A Bitcoin. Whoever solves the puzzle first wins the prize.
How Does Bitcoin Mining Works?
Bitcoin Mining is a guessing game.
Let’s dive into this quote through a scenario. Let’s say you and your friends have been tasked to guess a number between 1 and 1000. Let’s say the number you have to guess is 25; then, you don’t need to guess an exact number, but you have to be the first one to guess a number less than or equal to 25.
If you came up with a number 55, and one of your friends came up with 27, another 67, and yet another 80, they lost because they all came up with a number more than 25.
But if you have five friends left and one of them guessed 20, then they win, and the remaining others don’t get a chance to guess. The one who guessed 20 was first to guess a number less than or equal to 25.
Here, number 25 represents the target Hash created by the Bitcoin network for a block, and random guesses by you and your friends are guesses made by miners to solve this puzzle. The solution that our computer or miner tries to find for the puzzle given is called “Hash.” So, what is Hash?
The Hash
The Hash is a 64-digit hexadecimal number generated by sending the information in the block through the SHA256 hashing algorithm. In less than a second, this could be done by sending some content into a SHA256 hash generator.
SHA256 is an encryption method the Bitcoin network uses to create a block hash. However, decrypting that hash back is impossible, as it can take centuries to decode with modern technology.
Hash might look like this (this is the previous paragraph run through a hash generator). If you change one value in that content, like switching one “b” to an “a,” the hash changes:
A65f83a5db7371eeefa2287a0ede750ac623e49a8ba29f248eb785fe0a678559
Here is the same paragraph, but the first word is misspelled as “Ba” instead of “Bt”:
Fbfa43ff980d1492b3a9275a1eb945d89bd6b699ca19c3c470021b8f253654af
This is the number called block hash, which also acts as the following block’s header. Each block uses the previous Block’s Hash, forming a chain and creating the term “Blockchain.”
The process of guessing the correct number (Hash) is known as proof of work.
Proof of Work
When a node guesses the number first or solves the puzzle first, the entire network comes to a consensus about that node to validate a transaction because this particular node has done a certain amount of work to solve the puzzle.
That is why the consensus algorithm used in the Bitcoin network is called “Proof of Work .”It consumes much energy and computational power to reach the goal of less than or equal to the target hash. The work done in this process is viewed as validation proof, so it’s called proof-of-work.
The difficulty of mining increases as more miner joins the network.
Confirmation
Each block contains a hash of the previous block- so when the next Block’s Hash is created, it’s connected; that’s how forming a network is. Even a single change in character in a block changes the Hash, thus changing the Hash of all of the following blocks. This process secured the Blockchain.
The block closed and received reward is only confirmed five blocks later when it’s through many validations.
Are you new to Web3? Here’s a Comprehensive guide to know all about Blockchain forks by Droomdoom.
Evolution of Bitcoin Mining
In the early days of Bitcoin, there were few miners out there. Therefore, general computers with regular CPUs dominated Bitcoin mining. Satoshi, the inventor of Bitcoin, and his friend Hal Finney, along with a few people, were mining Bitcoin with their personal computers using their computer’s central processing unit (CPU) or computer’s brain. In 2009, that was enough for mining Bitcoin as mining difficulty was very low.
GPU Mining
As Bitcoin started to catch people’s eyes, they started looking for more powerful mining solutions,
Learn more ways to spot and avoid Crypto scams, compiled by DroomDroom.
Then GPU mining came to light. A GPU ( Graphical processing unit ), or graphic card, is a unique component added to computers to carry out more complex calculations. Initially, GPUs were intended to allow gamers to run computer games with intense graphics requirements. But, because of their architecture, they became popular in cryptography, and around 2011, people also started using them to mine Bitcoins. They were more effective and faster at mining with better hash rates than CPUs.
For reference, the mining power of one GPU equals that of around 30 CPUs.
But they consumed much power and, because of high demand, have skyrocketed in price.
FPGA Mining
Another evolution came later on with FPGA mining.
FPGA (Field Programmable Gate Array) is a piece of hardware that can be connected to a computer to run calculations. They are just like a GPU, but 3 to 100 times faster. But the downside is that they are more complex to configure, which is why, In 2013, a new type of miner was introduced, an ASIC miner.
ASIC Mining
Launched in 2012, ASIC stands for Application Specific Integrated Circuit.
As miners now prefer custom mining machines for Bitcoin mining, ASIC is hardware manufactured solely for mining Bitcoin. Unlike GPUs, CPUs, and FPGAs, they are equipped with specialized chips to mine Bitcoin more efficiently and can’t be used to do anything else. They are hardcoded with functions into the machines and are the mining standard. Some Early ASIC miners even appeared in the form of USB, but they became obsolete rather quickly.
But ASIC rigs could be expensive, ranging from $2,000 to $15000.
Cloud Mining
This is the latest way to mint Bitcoin, where miners can buy a cloud mining service or contract from an existing cloud mining provider specializing in cryptocurrency mining rigs. While this gives the miner the advantage of mining Bitcoins without sunk and maintenance costs of mining hardware setup, one must be careful in choosing a reputed cloud miner to avoid future scams or fraud.
New to Cryptocurrency? What are the inevitable cryptocurrency scams that you’re likely to fall for?
How Do You Start Bitcoin Mining
To Start Bitcoin mining, every miner needs basics, including
Mining hardware ( like Ebang, Antiminer),
Crypto Wallet, and
Knowledge of how to install and configure mining software.
Let’s look at each one them individually now:
Powerful Hardware Resources
Before a miner starts minting bitcoins, they need a powerful mining hardware setup designed specifically for mining cryptos and tools to solve complex puzzles efficiently. For efficient and effective mining, mining would require graphical processing units with advanced graphic cards, FPGAs( field programmable gate array ), or advanced ASICs (Application-specific integrated circuits ).
Since 2013, after the introduction of ASICs, ASICs-based hardware has been the most advanced and capable of generating the most hashes per second. However, at the same time, it’s costly, which may range in thousands of dollars.
Installing Mining Software
Besides powerful Hardware essentials, miners need to know how to install and configure the mining software ( like CG miner, XMR miner ). Many of the software are free to download and work on Windows and Mac computers.
E-wallets
Then, a miner would also be required to create an e-wallet to store their rewards as Bitcoin. A Bitcoin wallet is a digital wallet that facilitates storing, accepting, and transferring Bitcoin or any other cryptocurrency.
Additionally, miners must possess advanced technical knowledge to operate hardware systems, improve the mining capacity, and monitor the progress.
Are you opening your first crypto wallet? Learn about Crypto Wallet checker to avoid dirty and sanctioned money, compiled by Droomdroom.
Mining Pool or Solo Mining
Miners can choose between solo mining or opting for pool mining. With all the complexities of just starting up Bitcoin mining and going further, it takes work to do it, so mining pools were invented.
In mining pools, groups of miners are formed to face the increasing difficulty of mining together. Contrary to popular narrative, anyone with regular desktop computers or gaming systems can join the mining pools and mine. However, the returns are limited, as rewards are distributed among all the mining pool members according to how much work each miner has done.
Interested in making a career in Web3 Space? Explore the Ultimate guide to start your career as a blockchain developer, compiled by Droomdroom.
Economics
Bitcoin mining is a business venture.
The three most significant factors that affect the cost of Bitcoin mining are electricity, network, and mining infrastructure.
Mining can result in substantial bills, given that electricity gives the power to run your mining systems 24/7. Mining systems produce much heat while mining, so these rigs need to be cooled, and the air conditioning is costly.
Mining alone can be hectic, so mining pools were introduced to reduce the complexity and difficulty miner faces during the mining. However, here, rewards are limited.
Network speeds do not affect significantly, but latency, i.e., time taken to communicate with the rest of the network, does.
So, for this venture to be profitable, the cost for these three inputs should be less than output ( bitcoin’s price ).
Rewards
What does one get for hustling and juggling so much through incurring the costs of such heavy infrastructure and energy usage?
In Bitcoin, the reward for successfully validating a block in Bitcoin’s network is free bitcoins and transaction fees ( a certain percentage of the transaction the miner inserted into the block).
Miner payment = block Reward + Transaction fees
However, since 2009 ( bitcoin launched ), the number of bitcoins each miner gets by validating each transaction is reduced by the Bitcoin halving phenomenon.
To know if you can do Bitcoin mining profitably, you can check it through the Profitability Calculator.
Bitcoin Halving
The reward for mining one block is halved every 210,000 blocks or about every four years. In 2009, when Bitcoin was launched, the reward for mining a block was 50 Bitcoins, then it was limited to 25 Bitcoins in 2012 and 12.5 in 2016. Bitcoin halving aims to cut down the Bitcoin’s inflation and circulation rate, stabilizing its value. The last Bitcoin halving event took place in May 2020.
When Bitcoin reaches its limit of 21 million, expected by 2140, miners will be constantly rewarded with fees for processing transactions that network users will pay. These fees are a way to ensure that miners validating the transactions still have the incentive to mine and keep the network going.
Issues
What is the probability of mining a Bitcoin block successfully through Pow?
It’s one in 57.6 trillion, with that scaling difficulty levels, a massive number of transactions being verified by users, and one block of transaction is verified roughly every 10 minutes. But remember, it’s a goal, not a rule.
Speed
With transactions logged in the Blockchain every 10 minutes, the Bitcoin network can currently process between 3 to 6 transactions per second. Whereas, in comparison, visa can process somewhere 65000 transactions per second. Upgrades and second-layer solutions have been addressed to the Bitcoin network for issues. However, there have yet to be any significant solutions./modern banking systems and other Blockchains dwarf the number of transactions the Bitcoin network can handle.
Scalability
The major problem at the core of Bitcoin protocol has been scaling. Though miners accept this as a core problem, there has yet to be much consensus about how to solve it.
Bitcoin has been introducing upgrades and accepting inputs from layers, but it still needs help with scalability.
Energy Usage
Energy usage has always been a topic of discussion worldwide, from Elon Musk to any average person expressing their opinions about what should and should not be done globally.
According to statistics, bitcoin mining alone consumes nearly 127 terawatt-hours (TWh) a year, more than many countries, including Norway. Bitcoin mining has always been an energy-intensive process. As the complexity and difficulty of Bitcoin mining rise, the computational power required to mine a Bitcoin also rises.
However, many Bitcoin enthusiasts claim that Bitcoin runs on renewable energy sources only. Nevertheless, it is still a matter of debate as it’s self-reported data from mining pools, and the information provided is scarce and lacks transparency.
Conclusion
Bitcoin has always been the most popular cryptocurrency. While it seems very exciting to mint your Bitcoin, it comes with many complications and upfront costs. Additionally, its extreme price volatility makes it an unviable medium of exchange.
Bitcoin remains a speculative currency due to a lack of intrinsic value that operates in a decentralized and autonomous manner.
Due to this, it’s invulnerable to regulations and law enforcement. Though, global leaders have addressed the impact and regulatory measures in G20 2023 meetings.
Bitcoin mining is a process of minting new coins and validating ongoing transactions by solving complex cryptographic puzzles.
This article explains in detail what is bitcoin mining, how it works, what is bitcoin halving including how bitcoin mining evolved with time, and what economics and issues you need to know when you are exploring bitcoin mining.
What Is Bitcoin Mining?
Bitcoin mining is a process of minting new coins and validating ongoing transactions by solving complex cryptographic puzzles.
It is probably some heavy, expensive machinery in remote parts of the world and suit-face workers with hard hats digging deep underneath the earth’s surface to find natural resources like coal or diamond.
Well, bitcoin miners aren’t suit-faced humans working in remote parts, but it’s a network of powerful computers worldwide. These miners add individual blocks to a Bitcoin’s blockchain network, validating ongoing transactions by solving complex cryptographic puzzles, thereby getting the reward in return: A Bitcoin. Whoever solves the puzzle first wins the prize.
How Does Bitcoin Mining Works?
Bitcoin Mining is a guessing game.
Let’s dive into this quote through a scenario. Let’s say you and your friends have been tasked to guess a number between 1 and 1000. Let’s say the number you have to guess is 25; then, you don’t need to guess an exact number, but you have to be the first one to guess a number less than or equal to 25.
If you came up with a number 55, and one of your friends came up with 27, another 67, and yet another 80, they lost because they all came up with a number more than 25.
But if you have five friends left and one of them guessed 20, then they win, and the remaining others don’t get a chance to guess. The one who guessed 20 was first to guess a number less than or equal to 25.
Here, number 25 represents the target Hash created by the Bitcoin network for a block, and random guesses by you and your friends are guesses made by miners to solve this puzzle. The solution that our computer or miner tries to find for the puzzle given is called “Hash.” So, what is Hash?
The Hash
The Hash is a 64-digit hexadecimal number generated by sending the information in the block through the SHA256 hashing algorithm. In less than a second, this could be done by sending some content into a SHA256 hash generator.
SHA256 is an encryption method the Bitcoin network uses to create a block hash. However, decrypting that hash back is impossible, as it can take centuries to decode with modern technology.
Hash might look like this (this is the previous paragraph run through a hash generator). If you change one value in that content, like switching one “b” to an “a,” the hash changes:
A65f83a5db7371eeefa2287a0ede750ac623e49a8ba29f248eb785fe0a678559
Here is the same paragraph, but the first word is misspelled as “Ba” instead of “Bt”:
Fbfa43ff980d1492b3a9275a1eb945d89bd6b699ca19c3c470021b8f253654af
This is the number called block hash, which also acts as the following block’s header. Each block uses the previous Block’s Hash, forming a chain and creating the term “Blockchain.”
The process of guessing the correct number (Hash) is known as proof of work.
Proof of Work
When a node guesses the number first or solves the puzzle first, the entire network comes to a consensus about that node to validate a transaction because this particular node has done a certain amount of work to solve the puzzle.
That is why the consensus algorithm used in the Bitcoin network is called “Proof of Work .”It consumes much energy and computational power to reach the goal of less than or equal to the target hash. The work done in this process is viewed as validation proof, so it’s called proof-of-work.
The difficulty of mining increases as more miner joins the network.
Confirmation
Each block contains a hash of the previous block- so when the next Block’s Hash is created, it’s connected; that’s how forming a network is. Even a single change in character in a block changes the Hash, thus changing the Hash of all of the following blocks. This process secured the Blockchain.
The block closed and received reward is only confirmed five blocks later when it’s through many validations.
Are you new to Web3? Here’s a Comprehensive guide to know all about Blockchain forks by Droomdoom.
Evolution of Bitcoin Mining
In the early days of Bitcoin, there were few miners out there. Therefore, general computers with regular CPUs dominated Bitcoin mining. Satoshi, the inventor of Bitcoin, and his friend Hal Finney, along with a few people, were mining Bitcoin with their personal computers using their computer’s central processing unit (CPU) or computer’s brain. In 2009, that was enough for mining Bitcoin as mining difficulty was very low.
GPU Mining
As Bitcoin started to catch people’s eyes, they started looking for more powerful mining solutions,
Learn more ways to spot and avoid Crypto scams, compiled by DroomDroom.
Then GPU mining came to light. A GPU ( Graphical processing unit ), or graphic card, is a unique component added to computers to carry out more complex calculations. Initially, GPUs were intended to allow gamers to run computer games with intense graphics requirements. But, because of their architecture, they became popular in cryptography, and around 2011, people also started using them to mine Bitcoins. They were more effective and faster at mining with better hash rates than CPUs.
For reference, the mining power of one GPU equals that of around 30 CPUs.
But they consumed much power and, because of high demand, have skyrocketed in price.
FPGA Mining
Another evolution came later on with FPGA mining.
FPGA (Field Programmable Gate Array) is a piece of hardware that can be connected to a computer to run calculations. They are just like a GPU, but 3 to 100 times faster. But the downside is that they are more complex to configure, which is why, In 2013, a new type of miner was introduced, an ASIC miner.
ASIC Mining
Launched in 2012, ASIC stands for Application Specific Integrated Circuit.
As miners now prefer custom mining machines for Bitcoin mining, ASIC is hardware manufactured solely for mining Bitcoin. Unlike GPUs, CPUs, and FPGAs, they are equipped with specialized chips to mine Bitcoin more efficiently and can’t be used to do anything else. They are hardcoded with functions into the machines and are the mining standard. Some Early ASIC miners even appeared in the form of USB, but they became obsolete rather quickly.
But ASIC rigs could be expensive, ranging from $2,000 to $15000.
Cloud Mining
This is the latest way to mint Bitcoin, where miners can buy a cloud mining service or contract from an existing cloud mining provider specializing in cryptocurrency mining rigs. While this gives the miner the advantage of mining Bitcoins without sunk and maintenance costs of mining hardware setup, one must be careful in choosing a reputed cloud miner to avoid future scams or fraud.
New to Cryptocurrency? What are the inevitable cryptocurrency scams that you’re likely to fall for?
How Do You Start Bitcoin Mining
To Start Bitcoin mining, every miner needs basics, including
Mining hardware ( like Ebang, Antiminer),
Crypto Wallet, and
Knowledge of how to install and configure mining software.
Let’s look at each one them individually now:
Powerful Hardware Resources
Before a miner starts minting bitcoins, they need a powerful mining hardware setup designed specifically for mining cryptos and tools to solve complex puzzles efficiently. For efficient and effective mining, mining would require graphical processing units with advanced graphic cards, FPGAs( field programmable gate array ), or advanced ASICs (Application-specific integrated circuits ).
Since 2013, after the introduction of ASICs, ASICs-based hardware has been the most advanced and capable of generating the most hashes per second. However, at the same time, it’s costly, which may range in thousands of dollars.
Installing Mining Software
Besides powerful Hardware essentials, miners need to know how to install and configure the mining software ( like CG miner, XMR miner ). Many of the software are free to download and work on Windows and Mac computers.
E-wallets
Then, a miner would also be required to create an e-wallet to store their rewards as Bitcoin. A Bitcoin wallet is a digital wallet that facilitates storing, accepting, and transferring Bitcoin or any other cryptocurrency.
Additionally, miners must possess advanced technical knowledge to operate hardware systems, improve the mining capacity, and monitor the progress.
Are you opening your first crypto wallet? Learn about Crypto Wallet checker to avoid dirty and sanctioned money, compiled by Droomdroom.
Mining Pool or Solo Mining
Miners can choose between solo mining or opting for pool mining. With all the complexities of just starting up Bitcoin mining and going further, it takes work to do it, so mining pools were invented.
In mining pools, groups of miners are formed to face the increasing difficulty of mining together. Contrary to popular narrative, anyone with regular desktop computers or gaming systems can join the mining pools and mine. However, the returns are limited, as rewards are distributed among all the mining pool members according to how much work each miner has done.
Interested in making a career in Web3 Space? Explore the Ultimate guide to start your career as a blockchain developer, compiled by Droomdroom.
Economics
Bitcoin mining is a business venture.
The three most significant factors that affect the cost of Bitcoin mining are electricity, network, and mining infrastructure.
Mining can result in substantial bills, given that electricity gives the power to run your mining systems 24/7. Mining systems produce much heat while mining, so these rigs need to be cooled, and the air conditioning is costly.
Mining alone can be hectic, so mining pools were introduced to reduce the complexity and difficulty miner faces during the mining. However, here, rewards are limited.
Network speeds do not affect significantly, but latency, i.e., time taken to communicate with the rest of the network, does.
So, for this venture to be profitable, the cost for these three inputs should be less than output ( bitcoin’s price ).
Rewards
What does one get for hustling and juggling so much through incurring the costs of such heavy infrastructure and energy usage?
In Bitcoin, the reward for successfully validating a block in Bitcoin’s network is free bitcoins and transaction fees ( a certain percentage of the transaction the miner inserted into the block).
Miner payment = block Reward + Transaction fees
However, since 2009 ( bitcoin launched ), the number of bitcoins each miner gets by validating each transaction is reduced by the Bitcoin halving phenomenon.
To know if you can do Bitcoin mining profitably, you can check it through the Profitability Calculator.
Bitcoin Halving
The reward for mining one block is halved every 210,000 blocks or about every four years. In 2009, when Bitcoin was launched, the reward for mining a block was 50 Bitcoins, then it was limited to 25 Bitcoins in 2012 and 12.5 in 2016. Bitcoin halving aims to cut down the Bitcoin’s inflation and circulation rate, stabilizing its value. The last Bitcoin halving event took place in May 2020.
When Bitcoin reaches its limit of 21 million, expected by 2140, miners will be constantly rewarded with fees for processing transactions that network users will pay. These fees are a way to ensure that miners validating the transactions still have the incentive to mine and keep the network going.
Issues
What is the probability of mining a Bitcoin block successfully through Pow?
It’s one in 57.6 trillion, with that scaling difficulty levels, a massive number of transactions being verified by users, and one block of transaction is verified roughly every 10 minutes. But remember, it’s a goal, not a rule.
Speed
With transactions logged in the Blockchain every 10 minutes, the Bitcoin network can currently process between 3 to 6 transactions per second. Whereas, in comparison, visa can process somewhere 65000 transactions per second. Upgrades and second-layer solutions have been addressed to the Bitcoin network for issues. However, there have yet to be any significant solutions./modern banking systems and other Blockchains dwarf the number of transactions the Bitcoin network can handle.
Scalability
The major problem at the core of Bitcoin protocol has been scaling. Though miners accept this as a core problem, there has yet to be much consensus about how to solve it.
Bitcoin has been introducing upgrades and accepting inputs from layers, but it still needs help with scalability.
Energy Usage
Energy usage has always been a topic of discussion worldwide, from Elon Musk to any average person expressing their opinions about what should and should not be done globally.
According to statistics, bitcoin mining alone consumes nearly 127 terawatt-hours (TWh) a year, more than many countries, including Norway. Bitcoin mining has always been an energy-intensive process. As the complexity and difficulty of Bitcoin mining rise, the computational power required to mine a Bitcoin also rises.
However, many Bitcoin enthusiasts claim that Bitcoin runs on renewable energy sources only. Nevertheless, it is still a matter of debate as it’s self-reported data from mining pools, and the information provided is scarce and lacks transparency.
Conclusion
Bitcoin has always been the most popular cryptocurrency. While it seems very exciting to mint your Bitcoin, it comes with many complications and upfront costs. Additionally, its extreme price volatility makes it an unviable medium of exchange.
Bitcoin remains a speculative currency due to a lack of intrinsic value that operates in a decentralized and autonomous manner.
Due to this, it’s invulnerable to regulations and law enforcement. Though, global leaders have addressed the impact and regulatory measures in G20 2023 meetings.
Evolution of Web3 With AI
Artificial intelligence and Web3 have been two of the most revolutionary technologies of this era. AI has already become a significant part of the central building block of the world’s software. According to PwC estimates, AI will contribute a staggering $15.7 trillion to the global economy by 2030, resulting in a 14% increase in global GDP. As we as a generation are on the cusp of a new technological era, the transition to Web3, AI, will play a significant role in shaping the digital world we will live in.
AI will revolutionize the Web3 world by adding remarkable automation, personalization, security, advanced data analytics, and improved smart contracts. Integrating AI with Web3 will redefine how Web3 works by focusing on what’s best for users.
Let’s delve into each topic one by one to learn more about the evolution of web3 with AI, starting with what is web3.
Are you new to the Web3 ecosystem? Here’s a comprehensive guide about what Web3 is and how it’s different from Web2 by Droomdroom.
What is Web3?
Web3, widely known as web3.0, is the third generation of the World Wide Web. It is a next-generation on the internet that envisions a decentralized, secure, and user-centric digital ecosystem that works on Blockchain technology.
Web 3.0 is an innovation over Web 2.0. Here, data is controlled by users rather than one giant entity or company, resulting in more privacy and no censorship. Rewards earned are distributed equally among all the stakeholders or users in this case.
The Main Pillars of Web 3.0
Decentralization
Decentralization is a core aspect of web3. As Web2 uses HTTP to locate information, web3, being Blockchain-based, stores information at multiple locations across a network. It gives users more data control than big tech giants like Google and Meta. It enables users to sell their data according to their own will.
Connectivity
Information and content are more accessible in Web 3.0 as it’s stored at multiple locations and can be accessed by various devices worldwide.
Artificial Intelligence and Machine Learning
Web3 will use technologies like NLP ( natural language processing) and semantic web to make their systems more advanced and receptive, like human intelligence.
Web3 will also utilize machine learning, which uses a large amount of data to train algorithms, improving accuracy and results.
Are you new to Web3? Here’s a Comprehensive guide to know all about Blockchain forks by Droomdoom.
What is AI?
Artificial intelligence (AI) is the simulation of human intelligence by computer systems, capable of performing complex tasks that require reasoning and problem-solving. AI systems run by consuming large amounts of data that are later used to train machine learning algorithms.
They then analyze the data to find patterns to model their decision-making or predict future states. This type of learning is called supervised learning. But some AI systems learn without supervision, for instance, by playing a video game repeatedly until the system knows every rule and way to win. This type of learning is categorized as unsupervised learning.
There are three cognitive skills on which AI programming is based – reasoning, learning, and self-correction.
Types of Artificial intelligence
Weak AI
Systems designed to perform particular tasks only. Personal assistants, Amazon’s Alexa, and video games are examples of weak AI.
Strong AI
Systems that can perform tasks that require human intelligence and are more complex and complicated. For example, self-driving cars.
Ways Evolution of Web3 with AI is Made Possible
Automation
AI’s ultra capability to learn and automate tasks can help Web3 users escape tedious and time-consuming tasks. From minting new NFTs to managing digital wallets, AI can seamlessly shoulder these responsibilities and liberate users to focus on more creative tasks.
Personalization
AI can significantly personalize Web3 users’ journeys and make their experiences more customized and engaging by analyzing user data like browsing history and using machine learning algorithms like collaborative and content-based filtering. AI algorithms can generate personalized recommendations and services that align with users’ needs and interests.
Learn 6 helpful strategies to diversify your crypto portfolio using altcoins, maximizing your investment potential, with this comprehensive article.
For example, AI can be used in advertising to make targeted marketing campaigns by analyzing user data to make it appealing and most relatable to individual users, resulting in better advertising and conversion rates.
Data Analysis and Insights
AI-driven analysis can play a crucial role in developing the Web3 ecosystem. The key aspect of AI analysis is that it can process large amounts of vast, complex, and diverse datasets generated by decentralized platforms, users, transactions, and execution of smart contracts. AI can find uncovered patterns and insights that can contribute highly to the growth and development of the Web3 ecosystem.
Security
AI can play a vital role in enhancing security and trust within the Web3 ecosystem by identifying potential risks, vulnerabilities, threats, or hacks. By proactive detection of any future cyber threats or dangers, AI can help Web3 maintain a secure and safe environment by keeping data private through advanced encryption and anonymization.
Machine learning algorithms can be trained on large data sets to identify future cyber threats, such as phishing attacks or unauthorized access to an account.
AI can be used for unique protection by providing personalized authentication to each user by analyzing their behavioral patterns or user-specific characteristics like facial features. This will help web3 platforms to become more robust and less vulnerable to fraud and impersonation.
Smart Contracts
AI implementation can significantly revolutionize the functionality of smart contracts in Web3 by integrating advanced decision-making capabilities and enabling dynamic transactions on any Web3 platform.
Smart contracts are, like any contract, executed an agreement with terms and conditions written into a code. It does not need any broker or intermediaries to execute the agreement, thus reducing the probability of manipulation and ensuring trust and transparency.
Are you new to the crypto world? Here’s a comprehensive guide on the role of smart contracts in Decentralized Finance.
What Factors Contribute to WEB3 Adopting ML Technologies From a Top-Doen Approach?
Adopting machine learning (ML) technologies follows a top-down approach mainly due to its complex infrastructure, which needs experts to implement ML technologies into the Web3 ecosystem.
The top-down approach is adopted in Web3 for ML technology for several reasons:
Technical Complexity
Integration of ML technology in Web3 space requires a deep understanding of both Decentralization Infratech and ML algorithms. Seamless integration of ML technologies in decentralized infrastructure demands expertise as it’s very intricate.
Security and Privacy
Providing security and privacy is one of the primary goals of Web 3.0. Integrating ML technology through a top-down approach allows experts to design and implement ML solutions that align with the core principles of Web3, ensuring that these goals are not compromised.
Scalability and Performance
Implementing ML technologies requires addressing significant challenges with Web3, including scalability and performance. The top-down approach helps ensure that ML solutions designed are intended to make the Web3 ecosystem more efficient and scalable.
Standardization and Interoperability
For effective adoption of ML technologies across Web3 platforms, standardization and interoperability must be achieved. Top-down adoption allows a more unified approach and promotes collaboration among stakeholders.
Key Challenges Faced by AI: Web 3.0 as a Solution
With large language models like ChatGPT and Midjourney, we have seen a drastic change in digital content creation and businesses.
While these technologies offer many advantages, such as high-quality content, increased productivity, and efficiency, they also come with many new challenges.
Here, we have uncovered some critical challenges in generated content and potential threats that must be addressed.
Fake Spread of News
One of the significant problems of AI-generated content is the propagation of fake content. With language models like ChatGPT and Midjourney, producing realistic news articles and pictures is easy, making it more challenging to differentiate from human-written content. Keeping track is more complex as the line between reality and fiction becomes blurred. It can result in a potential collapse in the perception of reality.
Solution
Various tools have been developed to check the content’s origin, with metadata tracking and reverse image searches. Many organizations like factcheck.org are working to burst fake news stories and maintain a trustworthy ecosystem. Blockchain can play a vital role in tracking the authenticity of the content by storing their metadata, the author’s identity with a timestamp of publication, on a decentralized and tamper-proof ledger where readers can verify the origin of information.
Trust Collapse
The rapid increase in AI-generated content can result in the trust collapse of the public as it becomes harder to look into the authenticity of the content. Trust collapse can raise implications for journalism and businesses that highly run on public trust, only undermining the credibility of the content produced. This makes establishing accountability for any wrongful facts or inaccuracies presented in the range harder. As a result, the public becomes skeptical about any content they come across.
Solution
Transparency with the origin of the content, such as watermarking or labeling the source, can help. Blockchain can play an important role here as any piece of content stored on Blockchain is verified. by validators, which makes every piece of information stored there unique with the help of hash value allotted to every individual piece of information, which is interlinked with previous information stored, hence making a chain.
Exploitation of Law
AI-generated content can be used to exploit loopholes in laws and regulations. For example, AI can create convincing, deep, fake videos and audio, altering court proceedings and results.
Solution
Lawmakers should be aware of AI advancements and develop policies and regulations restricting cause mishaps. Collaborative work between AI researchers and Lawmakers will ensure that.
Blackmails and Threats
AI-generated blackmail can take many forms:
Deepfakes: AI can generate very realistic videos, images, and audio, which can be used to threaten anyone and put them in compromising situations with the threat of public exposure.
AI-generated threats: AI’s capability of producing personalized content can raise considerable dangers of creating convincing and personalized blackmail, playing on their fears and vulnerabilities.
Fabricated documents: AI-generated content can be presented as authentic documents, which become more complex to differentiate from the original one. This can result in coercing victims to pay huge ransoms and comply with the blackmailer’s demands.
Solutions
Machine learning algorithms can be trained to identify patterns and commonalities of AI-generated threats and signs of manipulation. To combat AI-generated threats, collaborative work of lawmakers and cybersecurity professionals to detect and restrict any mishaps.
A decentralized reputation system can help users identify trustworthy content and counterparts and promote transparency.
Popular Web3 Platforms Using AI
Medibloc
It is a decentralized healthcare platform built on Ethereum Blockchain. It aims to provide efficient and effective healthcare by enabling secure, transparent data transfer. It uses smart contracts for data sharing and accessing other healthcare services.
It has its own MED cryptocurrency, which facilitates transactions and rewards users who are willing to share their data. Medibloc has its own AI system, which analyzes the stored data to identify patterns and trends to provide personalized treatment recommendations and automate tasks such as reminders for taking medication.
Augur
Founded in 2014, Augur is a decentralized prediction market platform built on the Ethereum blockchain. Here, users can predict the outcome of events like sports games and elections and trade on those outcomes.
Augur has an AI system that improves the accuracy of predictions by analyzing data from various sources like news, social media posts, and the internet to find patterns and trends that might affect the outcome. It also rewards its users when they predict accurate results.
Chainanalysis
Founded in 2014, Chainanalysis is a Blockchain analytics platform. It is used by multiple organizations, including cryptocurrency exchanges, financial institutions, and law enforcement agencies, to detect and prevent fraudulent and illegal activities on Web3.
Chain analysis has a proprietary dataset of known addresses and transactions of fraudulent or illegal activities, which they use to check for suspicious activity on the Blockchain.
Conclusion
Web3 stands on the door of immense possibilities, and its integration with AI will serve as the cherry on the cake. With the potential to influence various fields of the digital ecosystem, the implication of AI is significant in web3. As we embark on a journey of exploring the implications and applications of AI in web3, we will witness notable advancements in the coming years.
AI will revolutionize the Web3 world by adding remarkable automation, personalization, security, advanced data analytics, and improved smart contracts. Integrating AI with Web3 will redefine how Web3 works by focusing on what’s best for users.
Let’s delve into each topic one by one to learn more about the evolution of web3 with AI, starting with what is web3.
Are you new to the Web3 ecosystem? Here’s a comprehensive guide about what Web3 is and how it’s different from Web2 by Droomdroom.
What is Web3?
Web3, widely known as web3.0, is the third generation of the World Wide Web. It is a next-generation on the internet that envisions a decentralized, secure, and user-centric digital ecosystem that works on Blockchain technology.
Web 3.0 is an innovation over Web 2.0. Here, data is controlled by users rather than one giant entity or company, resulting in more privacy and no censorship. Rewards earned are distributed equally among all the stakeholders or users in this case.
The Main Pillars of Web 3.0
Decentralization
Decentralization is a core aspect of web3. As Web2 uses HTTP to locate information, web3, being Blockchain-based, stores information at multiple locations across a network. It gives users more data control than big tech giants like Google and Meta. It enables users to sell their data according to their own will.
Connectivity
Information and content are more accessible in Web 3.0 as it’s stored at multiple locations and can be accessed by various devices worldwide.
Artificial Intelligence and Machine Learning
Web3 will use technologies like NLP ( natural language processing) and semantic web to make their systems more advanced and receptive, like human intelligence.
Web3 will also utilize machine learning, which uses a large amount of data to train algorithms, improving accuracy and results.
Are you new to Web3? Here’s a Comprehensive guide to know all about Blockchain forks by Droomdoom.
What is AI?
Artificial intelligence (AI) is the simulation of human intelligence by computer systems, capable of performing complex tasks that require reasoning and problem-solving. AI systems run by consuming large amounts of data that are later used to train machine learning algorithms.
They then analyze the data to find patterns to model their decision-making or predict future states. This type of learning is called supervised learning. But some AI systems learn without supervision, for instance, by playing a video game repeatedly until the system knows every rule and way to win. This type of learning is categorized as unsupervised learning.
There are three cognitive skills on which AI programming is based – reasoning, learning, and self-correction.
Types of Artificial intelligence
Weak AI
Systems designed to perform particular tasks only. Personal assistants, Amazon’s Alexa, and video games are examples of weak AI.
Strong AI
Systems that can perform tasks that require human intelligence and are more complex and complicated. For example, self-driving cars.
Ways Evolution of Web3 with AI is Made Possible
Automation
AI’s ultra capability to learn and automate tasks can help Web3 users escape tedious and time-consuming tasks. From minting new NFTs to managing digital wallets, AI can seamlessly shoulder these responsibilities and liberate users to focus on more creative tasks.
Personalization
AI can significantly personalize Web3 users’ journeys and make their experiences more customized and engaging by analyzing user data like browsing history and using machine learning algorithms like collaborative and content-based filtering. AI algorithms can generate personalized recommendations and services that align with users’ needs and interests.
Learn 6 helpful strategies to diversify your crypto portfolio using altcoins, maximizing your investment potential, with this comprehensive article.
For example, AI can be used in advertising to make targeted marketing campaigns by analyzing user data to make it appealing and most relatable to individual users, resulting in better advertising and conversion rates.
Data Analysis and Insights
AI-driven analysis can play a crucial role in developing the Web3 ecosystem. The key aspect of AI analysis is that it can process large amounts of vast, complex, and diverse datasets generated by decentralized platforms, users, transactions, and execution of smart contracts. AI can find uncovered patterns and insights that can contribute highly to the growth and development of the Web3 ecosystem.
Security
AI can play a vital role in enhancing security and trust within the Web3 ecosystem by identifying potential risks, vulnerabilities, threats, or hacks. By proactive detection of any future cyber threats or dangers, AI can help Web3 maintain a secure and safe environment by keeping data private through advanced encryption and anonymization.
Machine learning algorithms can be trained on large data sets to identify future cyber threats, such as phishing attacks or unauthorized access to an account.
AI can be used for unique protection by providing personalized authentication to each user by analyzing their behavioral patterns or user-specific characteristics like facial features. This will help web3 platforms to become more robust and less vulnerable to fraud and impersonation.
Smart Contracts
AI implementation can significantly revolutionize the functionality of smart contracts in Web3 by integrating advanced decision-making capabilities and enabling dynamic transactions on any Web3 platform.
Smart contracts are, like any contract, executed an agreement with terms and conditions written into a code. It does not need any broker or intermediaries to execute the agreement, thus reducing the probability of manipulation and ensuring trust and transparency.
Are you new to the crypto world? Here’s a comprehensive guide on the role of smart contracts in Decentralized Finance.
What Factors Contribute to WEB3 Adopting ML Technologies From a Top-Doen Approach?
Adopting machine learning (ML) technologies follows a top-down approach mainly due to its complex infrastructure, which needs experts to implement ML technologies into the Web3 ecosystem.
The top-down approach is adopted in Web3 for ML technology for several reasons:
Technical Complexity
Integration of ML technology in Web3 space requires a deep understanding of both Decentralization Infratech and ML algorithms. Seamless integration of ML technologies in decentralized infrastructure demands expertise as it’s very intricate.
Security and Privacy
Providing security and privacy is one of the primary goals of Web 3.0. Integrating ML technology through a top-down approach allows experts to design and implement ML solutions that align with the core principles of Web3, ensuring that these goals are not compromised.
Scalability and Performance
Implementing ML technologies requires addressing significant challenges with Web3, including scalability and performance. The top-down approach helps ensure that ML solutions designed are intended to make the Web3 ecosystem more efficient and scalable.
Standardization and Interoperability
For effective adoption of ML technologies across Web3 platforms, standardization and interoperability must be achieved. Top-down adoption allows a more unified approach and promotes collaboration among stakeholders.
Key Challenges Faced by AI: Web 3.0 as a Solution
With large language models like ChatGPT and Midjourney, we have seen a drastic change in digital content creation and businesses.
While these technologies offer many advantages, such as high-quality content, increased productivity, and efficiency, they also come with many new challenges.
Here, we have uncovered some critical challenges in generated content and potential threats that must be addressed.
Fake Spread of News
One of the significant problems of AI-generated content is the propagation of fake content. With language models like ChatGPT and Midjourney, producing realistic news articles and pictures is easy, making it more challenging to differentiate from human-written content. Keeping track is more complex as the line between reality and fiction becomes blurred. It can result in a potential collapse in the perception of reality.
Solution
Various tools have been developed to check the content’s origin, with metadata tracking and reverse image searches. Many organizations like factcheck.org are working to burst fake news stories and maintain a trustworthy ecosystem. Blockchain can play a vital role in tracking the authenticity of the content by storing their metadata, the author’s identity with a timestamp of publication, on a decentralized and tamper-proof ledger where readers can verify the origin of information.
Trust Collapse
The rapid increase in AI-generated content can result in the trust collapse of the public as it becomes harder to look into the authenticity of the content. Trust collapse can raise implications for journalism and businesses that highly run on public trust, only undermining the credibility of the content produced. This makes establishing accountability for any wrongful facts or inaccuracies presented in the range harder. As a result, the public becomes skeptical about any content they come across.
Solution
Transparency with the origin of the content, such as watermarking or labeling the source, can help. Blockchain can play an important role here as any piece of content stored on Blockchain is verified. by validators, which makes every piece of information stored there unique with the help of hash value allotted to every individual piece of information, which is interlinked with previous information stored, hence making a chain.
Exploitation of Law
AI-generated content can be used to exploit loopholes in laws and regulations. For example, AI can create convincing, deep, fake videos and audio, altering court proceedings and results.
Solution
Lawmakers should be aware of AI advancements and develop policies and regulations restricting cause mishaps. Collaborative work between AI researchers and Lawmakers will ensure that.
Blackmails and Threats
AI-generated blackmail can take many forms:
Deepfakes: AI can generate very realistic videos, images, and audio, which can be used to threaten anyone and put them in compromising situations with the threat of public exposure.
AI-generated threats: AI’s capability of producing personalized content can raise considerable dangers of creating convincing and personalized blackmail, playing on their fears and vulnerabilities.
Fabricated documents: AI-generated content can be presented as authentic documents, which become more complex to differentiate from the original one. This can result in coercing victims to pay huge ransoms and comply with the blackmailer’s demands.
Solutions
Machine learning algorithms can be trained to identify patterns and commonalities of AI-generated threats and signs of manipulation. To combat AI-generated threats, collaborative work of lawmakers and cybersecurity professionals to detect and restrict any mishaps.
A decentralized reputation system can help users identify trustworthy content and counterparts and promote transparency.
Popular Web3 Platforms Using AI
Medibloc
It is a decentralized healthcare platform built on Ethereum Blockchain. It aims to provide efficient and effective healthcare by enabling secure, transparent data transfer. It uses smart contracts for data sharing and accessing other healthcare services.
It has its own MED cryptocurrency, which facilitates transactions and rewards users who are willing to share their data. Medibloc has its own AI system, which analyzes the stored data to identify patterns and trends to provide personalized treatment recommendations and automate tasks such as reminders for taking medication.
Augur
Founded in 2014, Augur is a decentralized prediction market platform built on the Ethereum blockchain. Here, users can predict the outcome of events like sports games and elections and trade on those outcomes.
Augur has an AI system that improves the accuracy of predictions by analyzing data from various sources like news, social media posts, and the internet to find patterns and trends that might affect the outcome. It also rewards its users when they predict accurate results.
Chainanalysis
Founded in 2014, Chainanalysis is a Blockchain analytics platform. It is used by multiple organizations, including cryptocurrency exchanges, financial institutions, and law enforcement agencies, to detect and prevent fraudulent and illegal activities on Web3.
Chain analysis has a proprietary dataset of known addresses and transactions of fraudulent or illegal activities, which they use to check for suspicious activity on the Blockchain.
Conclusion
Web3 stands on the door of immense possibilities, and its integration with AI will serve as the cherry on the cake. With the potential to influence various fields of the digital ecosystem, the implication of AI is significant in web3. As we embark on a journey of exploring the implications and applications of AI in web3, we will witness notable advancements in the coming years.
Popular
Fundamental Analysis of ApeCoin (APE)
In less than two years after ApeCoin (APE) hit its all-time high, the token has endured a drastic fall. In March 2022, APE raised eyebrows as it recorded its all-time high and fell by 97% in a single day. Ever since the token has struggled to replicate a good market run. Together, let’s journey through the fundamentals of this token that once caused a huge frenzy in the cryptocurrency market.
ApeCoin (APE) is the native token of the APE ecosystem. As an ERC-20 utility token, APE relies on the proof-of-stake consensus mechanism for security. Initially, the token is designed to empower and incentivize the APE ecosystem that is keen on becoming a force to reckon with in the web3 space. However, the popularity of the token has seen its utilization gradually spread beyond the Ape Ecosystem.
Team Members and Background
More so, ApeCoin is issued by the ApeCoin DAO (Decentralized Autonomous Organization) which is the legal representative of the project. All holders of APE are members of the DAO and they reserve the right to vote on issues relating to the ecosystem. Some of these issues are system upgrades, fund allocation, partnerships, formation of new policies.
While the ApeCoin DAO governs the Ape ecosystem, the autonomous organization is officially represented by the ApeCoin Foundation. The Foundation helps in implementing decisions adopted by the DAO. Additionally, as the legal representative of the DAO, the ApeCoin Foundation caters to the overall growth of the ecosystem.
You may be wondering how a DAO works, this exclusive article on DroomDroom will provide you with enough information and satisfy your curiosity.
It is worth establishing that the ApeCoin Foundation is headed by a Board that comprises five (5) members. In most cases, the Board is saddled with the responsibility of executing the visions and targets of the Foundation. According to the regulation of the ApeCoin Foundation, the tenure of the Board only lasts a year. At the end of each administration, members of the ApeCoin DAO; mostly APE holders cast their votes to elect a new Board.
The DAO is here to fund your ambition & the sky’s the limit Love the passion & brilliance being shared daily on Discourse – keep it up fam! If you have ideas to help our community or drive Web3 forwards, let's make it happen together Key resources to get started below
— ApeCoin (@apecoin) August 8, 2022
The ApeCoin Ecosystem
The ApeCoin ecosystem is a vast web3 community that consists of every holder of APE and some notable NFTs collections. Primarily, the holders of the ApeCoin are the foundation of the ecosystem. Meanwhile, when ApeCoin launched in May 2022, holders of the Bored Ape Yacht Club (BAYC) NFT received some of the tokens as part of the startup effort.
Thereafter, Yuga Labs adopted ApeCoin as the utility token of the BAYC ecosystem. Thus, making it the official token for purchasing BAYC’s merchandise and event ticket. So we consider the BAYC NFT collection to be part of the ApeCoin ecosystem. Other NFT collections like Mutant Ape Yacht Club (MAYC), CryptoPunks, Meebits, and Bored Ape Kennel Club (BAKC) relating to BAYC and Yuga Labs belong to the ecosystem as well.
The Otherside metaverse is another prominent project within the ApeCoin ecosystem. Yuga Labs, Animoca Brands, and BAYC all collaborated to organize a Dutch auction-style for Otherside Lands in April 2022. Then, the team mandated that payment for Otherside Lands be made using ApeCoin. The directive led to an immense surge in the value of the token. Yugaverse is another well-known project within the ApeCoin ecosystem.
It may be tempting to attribute the creation of ApeCoin to Yuga Labs. This general assumption emanated from various reasons. Foremost, since Yuga Labs’ host of NFTs collection carries the name “Ape” one can easily assume that Yuga Labs created ApeCoin. Nonetheless, on various occasions, the NFT giant has denounced its ownership of the token.
Against popular opinion, ApeCoin was created by the ApeCoin DAO, not Yuga Labs. It is no coincidence that the DAO organized and executed the initial distribution of the token. Nonetheless, Yuga Labs has admitted to an existing relationship between the two.
On the official website of Yuga Labs, the firm indicated that it is a contributor to APE and also a member of the ApeCoin DAO. In recognition of the existing relationship between the two organizations, Yuga Labs gifted the ApeCoin DAO a special NFT.
You may not know that NFTs and Metaverse are distinct initiatives, this article on DroomDroom provides 7 key differences between the two.
Tokenomics of Apecoin
Distribution
ApeCoin has a fixed supply of 1 billion. The project team allocated 47% of the total supply to the DAO Treasury. Also, holders of BAYC and MAYC received 15% of the token, while another 15% was allocated to Yuga Labs. Launch contributors received 14% of the total supply, and BAYC founders received 8.0%.
Lastly, the project team allotted 1% to the Jane Goodall Legacy Foundation (JGLF). The donation to JGLF is aimed at supporting the foundation’s educational initiatives and research on environmental issues. It is worth mentioning that about 30% of ApeCoin’s total supply was unlocked when the project launched. The rest were structured to unlock gradually at certain intervals till all the tokens become available by the end of 2026.
Use Cases
Primarily, APE is designed for adoption by a host of web3 and metaverse projects. However, the token is more relevant in the APE ecosystem as it serves a lot of purposes. The most important usage of ApeCoin is how it permits its holders to participate in the governance of the ApeCoin DAO. Also, APE allows holders to explore some parts of the ecosystem that are reserved; with the token, you can access exclusive games and initiatives.
Similarly, third-party developers can participate in the Ape ecosystem by integrating ApeCoin into their project. Likewise, ApeCoin rose to prominence during the minting of 55,000 parcels of virtual lands known as “Otherside.” The Otherdside NFTs were valued in APE and they recorded about $300 million in sales. Transactions relating to the NFT collection were carried out in ApeCoin.
In recent times, we’ve witnessed how the usage of ApeCoin overlaps beyond projects relating to Yuga Labs. Winnings and perks on Benji Bananas, a game developed by Animoca Brands, are paid in APE.
Competition
Decentraland (MANA)
MANA, a native token to popular metaverse and web3 platform, Decentraland is one of the direct competitors of APE. This is due to how the two tokens are drivers of their respective ecosystem towards becoming a force to reckon with in the web3 landscape. On Decentraland, one can acquire virtual lands, assets, and perks and unlock exclusive components of the web3 project.
As the native token of Decentraland, MANA gives its holders a reserved right to suggest and vote on important proposals relating to the Decentraland ecosystem. Simply, it is safe to say that MANA is to Decentraland DAO what APE is to the ApeCoin DAO. Another direct similarity between the two coins is that they are both ERC-20 tokens.
MANA is a notable project in the crypto and web3 landscape, explore this article on DroomDroom to learn more about this amazing initiative.
Axie Infinity Shard (AXS)
AXS is the native token of the Axie Infinity ecosystem. The coin serves as the governance token of the ecosystem which allows holders to vote on key issues relating to Axie Infinity. Additionally, holders of AXS have the right to enquire about how the funds in the Axie Community Treasury are spent.
Also, gamers can use the AXS token to purchase and breed Axies in the popular play-to-earn game. Likewise, one can use the token to acquire perks and merchandise within the Axie Infinity game. Rewards and freebies in the Axie Infinity game are also paid out in AXS.
The Sandbox (SAND)
SAND the native token of popular web3 project, The Sandbox is also a direct competitor of APE. As the utility token of The Sandbox ecosystem, holders of the token can use SAND to create ASSET coins. Furthermore, holders of SAND can as well buy and sell ASSET on the Sandbox marketplace.
With SAND, players can easily interact with user generated initiatives on The Sandbox. Like APE, AXS, and MANA, holders of SAND are directly members of The Sandbox DAO. This implies that their ownership of SAND gives them the opportunity to vote and weigh in on issues relating to The Sandbox ecosystem.
Most of APE competitors are ERC-20 tokens, however, BRC-20 tokens are also growing in popularity among investors. This complete guide will illuminate more on how BRC-20 tokens work.
Future of The Project
The future of ApeCoin seems blurry at the moment. This is not unconnected to the fact that the prosperity of the token is attached to the success of the Ape ecosystem. Evident to this submission is how the token rallied massively during the auction of the Otherdeeds NFTs. Therefore, APE might need the recurrence of the attention it enjoyed during the auction of the Otherdeed collections to pose good returns for holders.
Also, most projects within the APE ecosystem are NFTs, and the cooling interest in virtual collectibles is also a major factor militating against the future of the project. Nonetheless, it is not entirely over for APE as an interesting project within its ecosystem can breathe life into its dying state.
Drawback and Weaknesses
One of the major weaknesses of APE is its limited relevance to the Ape ecosystem. The token is struggling to attract more use cases outside its ecosystem. This limitation to an extent has halted the growth of the token toward becoming a major name in the market.
Our Takeaway
Against all setbacks and fierce competition in the web3 sector, APE stands tall as an interesting project. While we admit that the token has its good sides, we urge investors to trade or acquire APE with caution.
Like most cryptocurrencies, ApeCoin is highly volatile which can inflict huge losses on investors. On the flip side, the token has shown flashes of rewarding investors’ faith in it. Above all, we urge investors to carry out enough findings before investing in ApeCoin and any other cryptocurrency.
ApeCoin (APE) is the native token of the APE ecosystem. As an ERC-20 utility token, APE relies on the proof-of-stake consensus mechanism for security. Initially, the token is designed to empower and incentivize the APE ecosystem that is keen on becoming a force to reckon with in the web3 space. However, the popularity of the token has seen its utilization gradually spread beyond the Ape Ecosystem.
Team Members and Background
More so, ApeCoin is issued by the ApeCoin DAO (Decentralized Autonomous Organization) which is the legal representative of the project. All holders of APE are members of the DAO and they reserve the right to vote on issues relating to the ecosystem. Some of these issues are system upgrades, fund allocation, partnerships, formation of new policies.
While the ApeCoin DAO governs the Ape ecosystem, the autonomous organization is officially represented by the ApeCoin Foundation. The Foundation helps in implementing decisions adopted by the DAO. Additionally, as the legal representative of the DAO, the ApeCoin Foundation caters to the overall growth of the ecosystem.
You may be wondering how a DAO works, this exclusive article on DroomDroom will provide you with enough information and satisfy your curiosity.
It is worth establishing that the ApeCoin Foundation is headed by a Board that comprises five (5) members. In most cases, the Board is saddled with the responsibility of executing the visions and targets of the Foundation. According to the regulation of the ApeCoin Foundation, the tenure of the Board only lasts a year. At the end of each administration, members of the ApeCoin DAO; mostly APE holders cast their votes to elect a new Board.
The DAO is here to fund your ambition & the sky’s the limit Love the passion & brilliance being shared daily on Discourse – keep it up fam! If you have ideas to help our community or drive Web3 forwards, let's make it happen together Key resources to get started below
— ApeCoin (@apecoin) August 8, 2022
The ApeCoin Ecosystem
The ApeCoin ecosystem is a vast web3 community that consists of every holder of APE and some notable NFTs collections. Primarily, the holders of the ApeCoin are the foundation of the ecosystem. Meanwhile, when ApeCoin launched in May 2022, holders of the Bored Ape Yacht Club (BAYC) NFT received some of the tokens as part of the startup effort.
Thereafter, Yuga Labs adopted ApeCoin as the utility token of the BAYC ecosystem. Thus, making it the official token for purchasing BAYC’s merchandise and event ticket. So we consider the BAYC NFT collection to be part of the ApeCoin ecosystem. Other NFT collections like Mutant Ape Yacht Club (MAYC), CryptoPunks, Meebits, and Bored Ape Kennel Club (BAKC) relating to BAYC and Yuga Labs belong to the ecosystem as well.
The Otherside metaverse is another prominent project within the ApeCoin ecosystem. Yuga Labs, Animoca Brands, and BAYC all collaborated to organize a Dutch auction-style for Otherside Lands in April 2022. Then, the team mandated that payment for Otherside Lands be made using ApeCoin. The directive led to an immense surge in the value of the token. Yugaverse is another well-known project within the ApeCoin ecosystem.
It may be tempting to attribute the creation of ApeCoin to Yuga Labs. This general assumption emanated from various reasons. Foremost, since Yuga Labs’ host of NFTs collection carries the name “Ape” one can easily assume that Yuga Labs created ApeCoin. Nonetheless, on various occasions, the NFT giant has denounced its ownership of the token.
Against popular opinion, ApeCoin was created by the ApeCoin DAO, not Yuga Labs. It is no coincidence that the DAO organized and executed the initial distribution of the token. Nonetheless, Yuga Labs has admitted to an existing relationship between the two.
On the official website of Yuga Labs, the firm indicated that it is a contributor to APE and also a member of the ApeCoin DAO. In recognition of the existing relationship between the two organizations, Yuga Labs gifted the ApeCoin DAO a special NFT.
You may not know that NFTs and Metaverse are distinct initiatives, this article on DroomDroom provides 7 key differences between the two.
Tokenomics of Apecoin
Distribution
ApeCoin has a fixed supply of 1 billion. The project team allocated 47% of the total supply to the DAO Treasury. Also, holders of BAYC and MAYC received 15% of the token, while another 15% was allocated to Yuga Labs. Launch contributors received 14% of the total supply, and BAYC founders received 8.0%.
Lastly, the project team allotted 1% to the Jane Goodall Legacy Foundation (JGLF). The donation to JGLF is aimed at supporting the foundation’s educational initiatives and research on environmental issues. It is worth mentioning that about 30% of ApeCoin’s total supply was unlocked when the project launched. The rest were structured to unlock gradually at certain intervals till all the tokens become available by the end of 2026.
Use Cases
Primarily, APE is designed for adoption by a host of web3 and metaverse projects. However, the token is more relevant in the APE ecosystem as it serves a lot of purposes. The most important usage of ApeCoin is how it permits its holders to participate in the governance of the ApeCoin DAO. Also, APE allows holders to explore some parts of the ecosystem that are reserved; with the token, you can access exclusive games and initiatives.
Similarly, third-party developers can participate in the Ape ecosystem by integrating ApeCoin into their project. Likewise, ApeCoin rose to prominence during the minting of 55,000 parcels of virtual lands known as “Otherside.” The Otherdside NFTs were valued in APE and they recorded about $300 million in sales. Transactions relating to the NFT collection were carried out in ApeCoin.
In recent times, we’ve witnessed how the usage of ApeCoin overlaps beyond projects relating to Yuga Labs. Winnings and perks on Benji Bananas, a game developed by Animoca Brands, are paid in APE.
Competition
Decentraland (MANA)
MANA, a native token to popular metaverse and web3 platform, Decentraland is one of the direct competitors of APE. This is due to how the two tokens are drivers of their respective ecosystem towards becoming a force to reckon with in the web3 landscape. On Decentraland, one can acquire virtual lands, assets, and perks and unlock exclusive components of the web3 project.
As the native token of Decentraland, MANA gives its holders a reserved right to suggest and vote on important proposals relating to the Decentraland ecosystem. Simply, it is safe to say that MANA is to Decentraland DAO what APE is to the ApeCoin DAO. Another direct similarity between the two coins is that they are both ERC-20 tokens.
MANA is a notable project in the crypto and web3 landscape, explore this article on DroomDroom to learn more about this amazing initiative.
Axie Infinity Shard (AXS)
AXS is the native token of the Axie Infinity ecosystem. The coin serves as the governance token of the ecosystem which allows holders to vote on key issues relating to Axie Infinity. Additionally, holders of AXS have the right to enquire about how the funds in the Axie Community Treasury are spent.
Also, gamers can use the AXS token to purchase and breed Axies in the popular play-to-earn game. Likewise, one can use the token to acquire perks and merchandise within the Axie Infinity game. Rewards and freebies in the Axie Infinity game are also paid out in AXS.
The Sandbox (SAND)
SAND the native token of popular web3 project, The Sandbox is also a direct competitor of APE. As the utility token of The Sandbox ecosystem, holders of the token can use SAND to create ASSET coins. Furthermore, holders of SAND can as well buy and sell ASSET on the Sandbox marketplace.
With SAND, players can easily interact with user generated initiatives on The Sandbox. Like APE, AXS, and MANA, holders of SAND are directly members of The Sandbox DAO. This implies that their ownership of SAND gives them the opportunity to vote and weigh in on issues relating to The Sandbox ecosystem.
Most of APE competitors are ERC-20 tokens, however, BRC-20 tokens are also growing in popularity among investors. This complete guide will illuminate more on how BRC-20 tokens work.
Future of The Project
The future of ApeCoin seems blurry at the moment. This is not unconnected to the fact that the prosperity of the token is attached to the success of the Ape ecosystem. Evident to this submission is how the token rallied massively during the auction of the Otherdeeds NFTs. Therefore, APE might need the recurrence of the attention it enjoyed during the auction of the Otherdeed collections to pose good returns for holders.
Also, most projects within the APE ecosystem are NFTs, and the cooling interest in virtual collectibles is also a major factor militating against the future of the project. Nonetheless, it is not entirely over for APE as an interesting project within its ecosystem can breathe life into its dying state.
Drawback and Weaknesses
One of the major weaknesses of APE is its limited relevance to the Ape ecosystem. The token is struggling to attract more use cases outside its ecosystem. This limitation to an extent has halted the growth of the token toward becoming a major name in the market.
Our Takeaway
Against all setbacks and fierce competition in the web3 sector, APE stands tall as an interesting project. While we admit that the token has its good sides, we urge investors to trade or acquire APE with caution.
Like most cryptocurrencies, ApeCoin is highly volatile which can inflict huge losses on investors. On the flip side, the token has shown flashes of rewarding investors’ faith in it. Above all, we urge investors to carry out enough findings before investing in ApeCoin and any other cryptocurrency.
What Is Polymarket? a Next Gen Crypto Prediction Market
Imagine a betting platform that is reliable, secure, and fully transparent. A place where you don’t need a huge fortune to be able to bet. A place so discreet that no one asks your identity unless you disclose it at your will.
Polymarket is a crypto-betting platform by Adventure One QSS Inc.
that leverages the power of blockchain to provide a safe, secure, transparent, highly liquid, and anonymous betting experience. With hundreds of prediction markets catering to almost every event that relates to the crypto world, the platform provides a unique blend of experiences,
Largest Decentralized Crypto Gambling Platform
Polymarket is a decentralized betting platform based on the Polygon Layer-2 blockchain technology and largely centered around crypto markets. The platform has hundreds of betting markets around elections, crypto events, price predictions, memecoins, regulatory approvals, macroeconomic events, and many other themes.
The platform claims to be the largest betting market. It hosts several opportunities that users can take to make money, do market research, analyze crowd psychology, and also understand market trends.
Mounting Crypto Losses ? Try bots to exit your trade before you make a loss
The platform is so popular that an average trader in the top 3 rank by trading volume contributes $1 million at least in trades each week.
Below is a snapshot of the Polymarket homepage.
Features
Being on the Ethereum blockchain, Polymarket can provide a host of features to its users while taking full advantage of blockchain security and Ethereum’s trust along with the speed of Polygon’s layer-2 solution.
Decentralized
The entire Polymarket platform is decentralized which allows it to be resilient from crashes, and hacks and even makes it redundant to multiple failures.
Secure and Immutable
The platform boasts of its security which has been audited by Chain Security, a well-known company in the field of smart contract audits.
Real-Time Bets
Like most top-grade betting markets, Polymarket provides real-time blockchain-secured bets. Each bet is recorded on the Polymarket which is based on the Polygon blockchain. This makes sure that everyone using the platform receives the exact reward that they deserve. It also reduces manipulation to zero and makes the platform more transparent.
Additional Rewards
Besides winning bets, the platform also allows you to earn rewards by just placing orders. The key to winning high rewards is placing orders that are close to the market average.
For example, if you are placing orders for Donald Trump to win in the 2024 elections and the market shows that “yes” orders are $0.59 while sell orders are at $0.41, then you will only earn a reward if you place a “yes” order for $0.41.
The aim of rewarding such orders is that they help make the market more balanced. Also, rewards are highest for limit orders.
Limit orders are those where the order is only executed if the price hits a trigger price that has been set at a certain price. For example, you may order to buy 100 shares of Donald Trump’s win only if the price hits $0.57. If the price hits $0.57, only then your 100 shares orders will be executed otherwise it will be nulled at the end of the “betting period”.
How Does Polymarket Work?
Polymarket is a blockchain-based betting market provider. It facilitates users to access crypto-focused betting markets that are secured with blockchain and have the trust of Ethereum and Polygon.
Technology
Polymarket is a special purpose Layer-3 based on Polygon. The platform utilizes the Ethereum Virtual Machine to stay online and does not depend on any single server.
Being based on a blockchain, it requires users to have USDC, USDT or ETH to be able to use the platform.
Is it Layer-2 or Layer-3?
Though Polymarket has been referred to as a Layer-2 platform, it is truly a layer-3 platform because like other layer-3s it is a single application Dapp providing a specific service. Further, it has been built on a Layer-2 solution, Polygon.
Layer-2s are general-purpose blockchains that facilitate the scaling of Ethereum transactions.
Automated Market Makers
Polymarket uses automated market makers to provide liquidity for the betting markets which are software that help facilitate the exchange of tokens with the help of liquidity pools.
All the deposited crypto on Polymarkets are pooled together from where users get “credits” to transact on the platform. The liquidity is shared by all betting markets provided in the platform so that all users can buy and sell any bet on the platform and do not have to wait long. This reduces the reliance on manual effort to provide liquidity
How to Transfer Crypto to Polymarket?
Polymarket provides you with two different channels to fund your account.
Deposit From Exchange/PayPal
Using the first method, you can deposit crypto from PayPal or available crypto exchanges. This is the cheapest method if you have crypto in your exchange wallet and want to save on gas fees.
Deposit from Coinbase
You can deposit Ethereum, USDC, or USDT from Coinbase, straight from your account.
Make sure you have sufficient funds available in your Coinbase account. You can always buy USDC from the exchange via cards or P2P.
Once you have the funds, copy the USDC (Polygon) address from Polymarket account.
On your Coinbase account, under Assets, you will find USDC.
Select send, enter the amount of crypto, for example 50 USDC and click on continue.
Deposit from PayPal
Users in the US can buy crypto from PayPal and then send it to their Polymarket account.
Select buy and sell under crypto.
Choose Ethereum.
Enter the amount and click buy now.
At the bottom of your balances page, you will find the transfer button.
Copy the address on your Polymarket account under Ethereum (under other methods) and paste it in your PayPal transfer page.
Make sure that the address you are sending to is a Polygon address.
By clicking send now, you can send the ETH to your Polymarket wallet.
This feature is currently not available for users outside the USA.
Deposit from Robinhood
You can also deposit crypto from Robinhood.
Select the transfer option.
Select the deposit Ethereum method from your Polymarket account.
Copy and paste the Polygon blockchain address in your Robinhood transfer page.
Make sure that the address you are sending to is a Polygon address.
Click send.
Send Crypto Directly From Wallets
Otherwise, you could also use the second option, i.e., transfer crypto directly to your Polymarket account. In this method, you can either transfer Ethereum, USDT, or USDC, all on the Polygon blockchain.
Don’t forget to check your transaction after it has been approved.
Deposit USDT and USDC
In your Polymarket deposit page, select USDC or USDT as per your preference.
Copy the address that is shown (ERC-20).
Paste the address in your wallet.
Choose the amount that you want to send to your Polymarket account.
Approve the transaction.
You will see a timer after which you will receive the funds on your Polymarket account.
Note that USDT is automatically converted into USDC on Polymarket.
Deposit Ethereum
In your Polymarket deposit page, under other methods, choose Ethereum.
Copy the deposit address and paste it in your wallet/account’s transfer page.
Approve the transaction.
Once done, you will receive ETH from your wallet/account and it will be automatically converted into USDC.
Guide to Making Money on Polymarket
Making money on Polymarket is easy. You just need to know a few things before you can start.
First, being on the blockchain, you need to have some crypto with you, preferably ETH.
Once you have that, you need to select a betting market. For example the below prediction for the winner of the US Presidential elections.
Next, you need to understand how betting works, Being a zero-sum game, there would be winners and losers. Winners will all that they have betted plus the amount losers have lost.
For example, in the above example, if a winner places a bet on Donald Trump, they need to pay at least $0.56 (and then in multiples). In case they win, they will win back $1, i.e., the bet amount of $0.56 plus $0.44 which has been lost by the loser.
However, if they change their mind in the middle, they are allowed to switch but at prevailing prices.
For example, suppose a person places a bet at $0.56 and expects Donald Trump to win. If they have changed their mind, they can sell the bet at prevailing rates say at $0.58, next they can bet for Donald Trump losing by buying a bet at $0.42 (the prevailing rate i.e., $1-$0.58 = $0.42).
At any point in time, the sum of the positive and negative bet would be $1 due to the laws of a zero-sum game.
It is notable that prediction or gambling markets are subject to future events and may change at times due to market forces. Hence, it is always advised to do your research before betting.
How to Place Bets?
Placing bets on the Polymarket platform is as easy as it can be.
First, you need to log in to Polymarket.
Next, you can log in to the platform using MetaMask, Coinbase Wallet, Wallet Connect, Gmail, or any other Email ID. Make sure that your wallet is well-funded before you proceed further.
Agree to the terms and conditions and then select start trading.
To start betting, you need to deposit USDC or USDT (ERC-20) in your Polymarket account. You can also buy the same using the links provided below.
Learn the difference between USD Stablecoins and never make a mistake while making transfers.
Once you are logged in, proceed to any betting market. For example, the previous betting market for the US Presidential elections.
Place your bet by buying the “shares” for the bet. In our US presidential election example, the bet for Donald Trump winning could be placed by buying a share worth $0.59.
Approve the transaction and your bet is placed.
How to Withdraw Funds From Polymarkets?
Now that we have covered deposits in detail, its time to learn how you can withdraw your funds from Polymarket to your crypto exchange account or your wallet.
Navigate to the Polymarket funds page.
Click on Withdraw.
Get your wallet’s or exchange account’s USDC address. Typically, you will get this address under deposit crypto option in your exchange or wallet.
Copy the USDC address. Make sure your blockchain for deposit has been selected as Polygon. Most wallets and exchanges set Ethereum as default.
Paste the USDC address on Polygon.
Click withdraw.
Your deposits will arrive after a few network confirmations.
Always make sure that the USDC that you are sending is to a Polygon address. Sending crypto to wrong blockchain addresses results in a total loss of funds most of the time.
Want a safe place to deposit crypto? Check out the MetaMask wallet.
Pros and Cons
Pros of Using Polymarket
The benefits listed below has been from our experience of using the platform recently.
Easy deposit and withdrawal methods.
The degree of security provided in the platform is of high grade.
The platform is highly transparent with each transaction being secured with the power of blockchain.
Cons of Using Polymarket
Based on our usage of the platform, we have found Polymarket to be lacking in the following areas.
The withdrawal process is only available on Polygon. An Ethereum address would have been more easy since users would have to use another app like Uniswap to bridge USDC from Polygon to Ethereum.
The Dapp accepts deposits on the Polygon network only, adding other networks especially Ethereum and Solana could have made it easier to deposit crypto.
The conversion from ETH and USDT to USDC adds extra charges as well as delay hurting the user experience.
What are the Alternatives to Polymarket?
Augur
Augur is a low-fee betting market. It charges 1.5% as fee for all betting activities. The platform is open to everyone in the world and claims to be a non-profit. The platform is based on a decentralized oracle based on the Ethereum blockchain.
Gnosis
Gnosis is a decentralized betting market based on the Gnosis chain which itself has been built on top of Ethereum. Rather han a betting market itself, Gnosis has become more of a template for anyone willing to develop a decentralized betting market.
Frequently Asked Questions
Is Polymarket Legal?
Polymarket is legal in all the countries that allow gambling. It is fully legal in the US and EU. The platform works as an offshore betting market accessible to US residents and citizens.
My Deposits Have Not Arrived on my Polymarket Account. What should I do?
Typically deposits arrive within a few minutes. However, in days when the network is congested, they make take as long as a couple of hours. To make sure your deposits are fast, please set the maximum gas fee higher than the average gas fee on Polygon. If you have deposited or withdrawn a very small amount, less than $10, chances are that your deposits might not be displayed in your account. In such cases, we have experienced there is a loss of crypto. So, make sure that you deposit a higher amount to ensure quick transfers.
I have Deposited Funds to Ethereum Blockchain. Are My Funds Lost?
In most cases, if you send crypto to the wrong address, the transferred amount is lost forever. However, since USDC has implemented cross-chain transfer protocol, you might get your transfers even if you put the wrong blockchain. However, make sure that you never try this knowingly.
Does Polymarket has an Contact Email or Phone Number?
The platform has listed hello@polymarket.com as their email address.
Polymarket is a crypto-betting platform by Adventure One QSS Inc.
that leverages the power of blockchain to provide a safe, secure, transparent, highly liquid, and anonymous betting experience. With hundreds of prediction markets catering to almost every event that relates to the crypto world, the platform provides a unique blend of experiences,
Largest Decentralized Crypto Gambling Platform
Polymarket is a decentralized betting platform based on the Polygon Layer-2 blockchain technology and largely centered around crypto markets. The platform has hundreds of betting markets around elections, crypto events, price predictions, memecoins, regulatory approvals, macroeconomic events, and many other themes.
The platform claims to be the largest betting market. It hosts several opportunities that users can take to make money, do market research, analyze crowd psychology, and also understand market trends.
Mounting Crypto Losses ? Try bots to exit your trade before you make a loss
The platform is so popular that an average trader in the top 3 rank by trading volume contributes $1 million at least in trades each week.
Below is a snapshot of the Polymarket homepage.
Features
Being on the Ethereum blockchain, Polymarket can provide a host of features to its users while taking full advantage of blockchain security and Ethereum’s trust along with the speed of Polygon’s layer-2 solution.
Decentralized
The entire Polymarket platform is decentralized which allows it to be resilient from crashes, and hacks and even makes it redundant to multiple failures.
Secure and Immutable
The platform boasts of its security which has been audited by Chain Security, a well-known company in the field of smart contract audits.
Real-Time Bets
Like most top-grade betting markets, Polymarket provides real-time blockchain-secured bets. Each bet is recorded on the Polymarket which is based on the Polygon blockchain. This makes sure that everyone using the platform receives the exact reward that they deserve. It also reduces manipulation to zero and makes the platform more transparent.
Additional Rewards
Besides winning bets, the platform also allows you to earn rewards by just placing orders. The key to winning high rewards is placing orders that are close to the market average.
For example, if you are placing orders for Donald Trump to win in the 2024 elections and the market shows that “yes” orders are $0.59 while sell orders are at $0.41, then you will only earn a reward if you place a “yes” order for $0.41.
The aim of rewarding such orders is that they help make the market more balanced. Also, rewards are highest for limit orders.
Limit orders are those where the order is only executed if the price hits a trigger price that has been set at a certain price. For example, you may order to buy 100 shares of Donald Trump’s win only if the price hits $0.57. If the price hits $0.57, only then your 100 shares orders will be executed otherwise it will be nulled at the end of the “betting period”.
How Does Polymarket Work?
Polymarket is a blockchain-based betting market provider. It facilitates users to access crypto-focused betting markets that are secured with blockchain and have the trust of Ethereum and Polygon.
Technology
Polymarket is a special purpose Layer-3 based on Polygon. The platform utilizes the Ethereum Virtual Machine to stay online and does not depend on any single server.
Being based on a blockchain, it requires users to have USDC, USDT or ETH to be able to use the platform.
Is it Layer-2 or Layer-3?
Though Polymarket has been referred to as a Layer-2 platform, it is truly a layer-3 platform because like other layer-3s it is a single application Dapp providing a specific service. Further, it has been built on a Layer-2 solution, Polygon.
Layer-2s are general-purpose blockchains that facilitate the scaling of Ethereum transactions.
Automated Market Makers
Polymarket uses automated market makers to provide liquidity for the betting markets which are software that help facilitate the exchange of tokens with the help of liquidity pools.
All the deposited crypto on Polymarkets are pooled together from where users get “credits” to transact on the platform. The liquidity is shared by all betting markets provided in the platform so that all users can buy and sell any bet on the platform and do not have to wait long. This reduces the reliance on manual effort to provide liquidity
How to Transfer Crypto to Polymarket?
Polymarket provides you with two different channels to fund your account.
Deposit From Exchange/PayPal
Using the first method, you can deposit crypto from PayPal or available crypto exchanges. This is the cheapest method if you have crypto in your exchange wallet and want to save on gas fees.
Deposit from Coinbase
You can deposit Ethereum, USDC, or USDT from Coinbase, straight from your account.
Make sure you have sufficient funds available in your Coinbase account. You can always buy USDC from the exchange via cards or P2P.
Once you have the funds, copy the USDC (Polygon) address from Polymarket account.
On your Coinbase account, under Assets, you will find USDC.
Select send, enter the amount of crypto, for example 50 USDC and click on continue.
Deposit from PayPal
Users in the US can buy crypto from PayPal and then send it to their Polymarket account.
Select buy and sell under crypto.
Choose Ethereum.
Enter the amount and click buy now.
At the bottom of your balances page, you will find the transfer button.
Copy the address on your Polymarket account under Ethereum (under other methods) and paste it in your PayPal transfer page.
Make sure that the address you are sending to is a Polygon address.
By clicking send now, you can send the ETH to your Polymarket wallet.
This feature is currently not available for users outside the USA.
Deposit from Robinhood
You can also deposit crypto from Robinhood.
Select the transfer option.
Select the deposit Ethereum method from your Polymarket account.
Copy and paste the Polygon blockchain address in your Robinhood transfer page.
Make sure that the address you are sending to is a Polygon address.
Click send.
Send Crypto Directly From Wallets
Otherwise, you could also use the second option, i.e., transfer crypto directly to your Polymarket account. In this method, you can either transfer Ethereum, USDT, or USDC, all on the Polygon blockchain.
Don’t forget to check your transaction after it has been approved.
Deposit USDT and USDC
In your Polymarket deposit page, select USDC or USDT as per your preference.
Copy the address that is shown (ERC-20).
Paste the address in your wallet.
Choose the amount that you want to send to your Polymarket account.
Approve the transaction.
You will see a timer after which you will receive the funds on your Polymarket account.
Note that USDT is automatically converted into USDC on Polymarket.
Deposit Ethereum
In your Polymarket deposit page, under other methods, choose Ethereum.
Copy the deposit address and paste it in your wallet/account’s transfer page.
Approve the transaction.
Once done, you will receive ETH from your wallet/account and it will be automatically converted into USDC.
Guide to Making Money on Polymarket
Making money on Polymarket is easy. You just need to know a few things before you can start.
First, being on the blockchain, you need to have some crypto with you, preferably ETH.
Once you have that, you need to select a betting market. For example the below prediction for the winner of the US Presidential elections.
Next, you need to understand how betting works, Being a zero-sum game, there would be winners and losers. Winners will all that they have betted plus the amount losers have lost.
For example, in the above example, if a winner places a bet on Donald Trump, they need to pay at least $0.56 (and then in multiples). In case they win, they will win back $1, i.e., the bet amount of $0.56 plus $0.44 which has been lost by the loser.
However, if they change their mind in the middle, they are allowed to switch but at prevailing prices.
For example, suppose a person places a bet at $0.56 and expects Donald Trump to win. If they have changed their mind, they can sell the bet at prevailing rates say at $0.58, next they can bet for Donald Trump losing by buying a bet at $0.42 (the prevailing rate i.e., $1-$0.58 = $0.42).
At any point in time, the sum of the positive and negative bet would be $1 due to the laws of a zero-sum game.
It is notable that prediction or gambling markets are subject to future events and may change at times due to market forces. Hence, it is always advised to do your research before betting.
How to Place Bets?
Placing bets on the Polymarket platform is as easy as it can be.
First, you need to log in to Polymarket.
Next, you can log in to the platform using MetaMask, Coinbase Wallet, Wallet Connect, Gmail, or any other Email ID. Make sure that your wallet is well-funded before you proceed further.
Agree to the terms and conditions and then select start trading.
To start betting, you need to deposit USDC or USDT (ERC-20) in your Polymarket account. You can also buy the same using the links provided below.
Learn the difference between USD Stablecoins and never make a mistake while making transfers.
Once you are logged in, proceed to any betting market. For example, the previous betting market for the US Presidential elections.
Place your bet by buying the “shares” for the bet. In our US presidential election example, the bet for Donald Trump winning could be placed by buying a share worth $0.59.
Approve the transaction and your bet is placed.
How to Withdraw Funds From Polymarkets?
Now that we have covered deposits in detail, its time to learn how you can withdraw your funds from Polymarket to your crypto exchange account or your wallet.
Navigate to the Polymarket funds page.
Click on Withdraw.
Get your wallet’s or exchange account’s USDC address. Typically, you will get this address under deposit crypto option in your exchange or wallet.
Copy the USDC address. Make sure your blockchain for deposit has been selected as Polygon. Most wallets and exchanges set Ethereum as default.
Paste the USDC address on Polygon.
Click withdraw.
Your deposits will arrive after a few network confirmations.
Always make sure that the USDC that you are sending is to a Polygon address. Sending crypto to wrong blockchain addresses results in a total loss of funds most of the time.
Want a safe place to deposit crypto? Check out the MetaMask wallet.
Pros and Cons
Pros of Using Polymarket
The benefits listed below has been from our experience of using the platform recently.
Easy deposit and withdrawal methods.
The degree of security provided in the platform is of high grade.
The platform is highly transparent with each transaction being secured with the power of blockchain.
Cons of Using Polymarket
Based on our usage of the platform, we have found Polymarket to be lacking in the following areas.
The withdrawal process is only available on Polygon. An Ethereum address would have been more easy since users would have to use another app like Uniswap to bridge USDC from Polygon to Ethereum.
The Dapp accepts deposits on the Polygon network only, adding other networks especially Ethereum and Solana could have made it easier to deposit crypto.
The conversion from ETH and USDT to USDC adds extra charges as well as delay hurting the user experience.
What are the Alternatives to Polymarket?
Augur
Augur is a low-fee betting market. It charges 1.5% as fee for all betting activities. The platform is open to everyone in the world and claims to be a non-profit. The platform is based on a decentralized oracle based on the Ethereum blockchain.
Gnosis
Gnosis is a decentralized betting market based on the Gnosis chain which itself has been built on top of Ethereum. Rather han a betting market itself, Gnosis has become more of a template for anyone willing to develop a decentralized betting market.
Frequently Asked Questions
Is Polymarket Legal?
Polymarket is legal in all the countries that allow gambling. It is fully legal in the US and EU. The platform works as an offshore betting market accessible to US residents and citizens.
My Deposits Have Not Arrived on my Polymarket Account. What should I do?
Typically deposits arrive within a few minutes. However, in days when the network is congested, they make take as long as a couple of hours. To make sure your deposits are fast, please set the maximum gas fee higher than the average gas fee on Polygon. If you have deposited or withdrawn a very small amount, less than $10, chances are that your deposits might not be displayed in your account. In such cases, we have experienced there is a loss of crypto. So, make sure that you deposit a higher amount to ensure quick transfers.
I have Deposited Funds to Ethereum Blockchain. Are My Funds Lost?
In most cases, if you send crypto to the wrong address, the transferred amount is lost forever. However, since USDC has implemented cross-chain transfer protocol, you might get your transfers even if you put the wrong blockchain. However, make sure that you never try this knowingly.
Does Polymarket has an Contact Email or Phone Number?
The platform has listed hello@polymarket.com as their email address.
Injective Protocol: Redefining Web3 Finance
Injective Protocol is one of the top platforms that provides traders unlimited access to various markets. The protocol is a vast ecosystem that offers a variety of decentralized services. Every element of the Injective protocol is streamlined to support and enhance the functionality of its decentralized exchange. This article will provide more insights into an interesting project that is perfectly crafted to meet growing demands in web3 finance.
Injective protocol offers decentralized exchange services like cross-chain margin trading, derivatives, and forex futures trading. Injective Protocol provides traders with a wide range of markets, allowing them to trade their preferred asset assets without any hurdles. The protocol has a native coin known as INJ and it functions as its governance token.
More so, the protocol has managed to distinguish itself from other decentralized exchanges because it didn’t adopt the Automated Market Maker (AMM) procedure to control liquidity. The decentralized exchange stands tall among its peers because it uses the order book model which is more synonymous with centralized stock and cryptocurrency exchanges.
Centralized and decentralized exchanges offer similar services but operate differently. This insightful guide on DroomDroom will explain the similarities and differences between the two.
The network doesn’t charge gas fees to complete users’ transactions, instead, it only charges standard market maker and taker fees. Moreover, users can only pay for the standard market and taker fees using the native token of the protocol; INJ. It is safe to say that the protocol focuses on complementing the translucency of decentralized exchanges (DEX) with the orderliness of traditional finance.
Are you a developer seeking for a right platform to build and launch your DeFi applications?Look no farther because @Injective_ offer a robust and open financial infrastructure for building various DeFi products.See infographic below! pic.twitter.com/r6ZbMWKznF
— BR WN (@Lemaronskin) November 15, 2023
It’s worth establishing that the Injective protocol is based on the Cosmos network as a layer 2 chain. Likewise, Injective leverages chain bridges which allow users to access tokens from other networks like Ethererum.
The protocol made a name for itself as the first network within the Cosmos ecosystem to natively support assets on Ethereum. Users of Injective can as well access tokens from Inter-Blockchain Communication Protocol (IBC) blockchains and non-Ethereum Virtual Machine (EVM) networks.
zkEVM is entirely different from EVM, you may not know but this article on DroomDroom will provide you with enough details on the key difference between the two.
Injective Protocol Project Team
Injective Labs is the first entity that contributed to the development of the Injective Protocol. The firm is a research and development company co-founded by Eric Chen. Before establishing the organization, Chen was prominent as a trader and he worked at a renowned crypto fund. While working with the crypto fund, the co-founder oversaw the development of innovative market-neutral trading initiatives in the blockchain landscape.
Chen masterminded the crypto fund’s investment into top companies like Ox, Cosmos, and ChainLink. The co-founder is a cryptographic researcher and he has a robust knowledge of blockchain protocols. His experience also cut across the traditional finance sphere.
Another distinguished personality connected to the project is Albert Chon who is the Chief Technology Officer (CTO) of Injective Labs. He graduated from Stanford University, bagging a Bachelor’s and Master’s degree from the institution.
At one point, Chon worked as a development engineer at Amazon. He made a name for himself in the crypto landscape by inventing a new Ethereum standard that is in use by a host of projects in the industry today. Mirza Uddin, Chris Choi, Noah Axler, Julie Lee, Bojan Angjelkoski, and Nam Dang are prominent members of the Injective Protocol team.
Tokenomics of Injective
Distribution
The total supply for $IJN is 100,000,000 and its allocation is directed heavily towards the growth of its ecosystem. As revealed, 36.33% of the token’s total supply is allocated to its ecosystem development. The allocation model set aside 20% of the token’s total supply for the team while it committed 16.67% to private sale.
Also, as a project that prioritizes a well-established community, 10% of the allocation will be channeled towards community growth. 9% of the token total supply went to its Binance Launchpad sale, while 6.0% was earmarked to the seed sale. Likewise, project advisors received 2% of the token’s total supply.
Use Cases
According to the official website of the project, INJ has three (3) major use cases. The token has significant relevance to the Injective ecosystem because it covers crucial areas relating to the protocol.
Governance
INJ serves as a partway for its holders to participate in the Injective ecosystem. Holders of the token automatically become a member of the Injective decentralized autonomous organization (DAO).
Meanwhile, the DAO controls the Injective exchange which gives every holder of IJN direct access to trade and create market derivatives. Similarly, as a member of the DAO, holders of injective can make proposals and vote on issues relating to the exchange.
Staking
Holding the INJ token gives the holder the opportunity to become a network validator on the Injective Chain. Also, holders of the token can as well stake their INJ by trusting it with an existing chain validator. In both cases, holders stand the chance to earn rewards for protecting the Injective network.
The staking option is open to both validators and delegates. Furthermore, the staking option has a predetermined reward ratio. Every 150 INJ stake comes with a 5% annual return.
Collateral Derivatives
Another major use case of INJ is that it can function as a stand-in stablecoin to supply collateral for margin trading and the use of Injective’s derivatives market. Correspondingly, the token can function as a collateral backing and insurance pool staking in specialized futures markets. This particular use case of the token allows those who stake INJ to receive interest in their locked liquidity provider coins.
Competition
Avalanche
Avalanche is a layer one blockchain that is popular for its vast support for dApps and custom networks. The network has an enormous ecosystem that houses a host of dApps and DeFi solutions. Also, Avalanche focuses on offering a high speed by processing about 6,500 transactions per second without compromising scalability.
Do you wish to learn more about DeFi solutions? This article will provide you with the key elements of decentralized finance.
The intense focus on high throughput is aided by the network’s distinct architecture. Avalanche is equipped with three different blockchains; X-chain, C-Chain, and P-chain. Each blockchain within the Avalanche network has its respective responsibilities which have aided the project to stand out among its peers.
NEAR Protocol
NEAR is another alternative to INJ. The NEAR Protocol is a layer one network structured as a community-oriented cloud computing platform. The network is designed to proffer solutions to blockchain trilemma. Hence, the focus on tackling issues relating to popular blockchains made NEAR Protocol ideal for dApps developers and users.
NEAR Protocol is popular among developers because it provides them with modular elements that aid them to kick-start projects like token contracts and NFTs swiftly. Moreover, the protocol has simplified the onboarding of other networks by splitting addresses and designing dApps with registration stipulations that are similar to what users are familiar with.
ChainLink
Since its establishment in 2017, Chainlink has established itself as one of the top networks that allow blockchains to safely interact with external data feeds.
With the aid of a decentralized oracle network, Chainlink permits blockchains to interact with events and payment systems by supporting them with important details that are crucial for complex smart contracts. The provided details allow complex smart contracts to evolve into a dominant form of virtual agreement.
Smart contracts play a crucial role in the DeFi sector, this article on DroomDroom aid you in understanding the importance of these phenomenons.
Additionally, Chainlink as a blockchain abstraction layer has proven effective in enabling universally connected smart contracts. It is supported by an enormous open-source community of data suppliers, node operators, smart contract builders, blockchain auditors, and analytical experts. The project has a vast community that has contributed massively to the popularity of its native token, LINK.
Future of Injective
Investors and Experts are optimistic that IJN will enjoy a bullish run in the near future. A substantial portion of their prediction relies solely on how the project has managed to attract the attention of users. They projected that the growing attention on the protocol will increase over the years which in return will boost the value of its native token; INJ.
Meanwhile, according to the project’s roadmap, there are plans to collaborate and integrate with some established projects in the industry. Also, Injective Protocol intends to roll out initiatives that are aimed at growing its ecosystem and establishing its community. There are growing signs that Injective Protocol may compete with some of the biggest names in the near future.
Drawback and Weakness
Despite having attractive sides, Injective Protocol has its setbacks too and users must consider them before embracing the platform. You may not enjoy voluminous liquidity when using the derivative exchange because it hasn’t gained enough ground compared to well-known exchanges in the crypto market.
Another high-profile setback of this interesting project is its reliance on centralized price feeds for a noticeable part of its market. Despite being a decentralized protocol, the dependence on central price feeds can expose traders to price manipulation and deficiencies in pricing data.
Conclusion
To an extent, INJ looks like a lucrative investment. Various publications and prediction outlets are backing the token to soar significantly in the nearest future. However, we are convinced by some notable features of the project which made it look more transparent and result-driven.
Injective Protocol has a robust community that consists of developers, DeFi enthusiasts, market makers, and institutional and individual investors. In addition, Injective Protocol is one of the top projects in the web3 finance landscape. It has a straightforward roadmap that focuses on advancement, collaboration, and integration.
One step at a time but without a doubt, @Injective_ is redefining Web3 finance.
— Mirza.inj (@TheMirza_) November 15, 2023
We can attest that Injective Protocol has a recognizable team. The project’s team are not pseudonymous inventors without a trace, in fact, a substantial part of the crew is well known in the industry. Hence, investors can trust in the project and invest in the token. Nonetheless, all cryptocurrencies including INJ are volatile and their value mostly fluctuates. We urge investors not to commit more than what they can lose in the project.
Injective protocol offers decentralized exchange services like cross-chain margin trading, derivatives, and forex futures trading. Injective Protocol provides traders with a wide range of markets, allowing them to trade their preferred asset assets without any hurdles. The protocol has a native coin known as INJ and it functions as its governance token.
More so, the protocol has managed to distinguish itself from other decentralized exchanges because it didn’t adopt the Automated Market Maker (AMM) procedure to control liquidity. The decentralized exchange stands tall among its peers because it uses the order book model which is more synonymous with centralized stock and cryptocurrency exchanges.
Centralized and decentralized exchanges offer similar services but operate differently. This insightful guide on DroomDroom will explain the similarities and differences between the two.
The network doesn’t charge gas fees to complete users’ transactions, instead, it only charges standard market maker and taker fees. Moreover, users can only pay for the standard market and taker fees using the native token of the protocol; INJ. It is safe to say that the protocol focuses on complementing the translucency of decentralized exchanges (DEX) with the orderliness of traditional finance.
Are you a developer seeking for a right platform to build and launch your DeFi applications?Look no farther because @Injective_ offer a robust and open financial infrastructure for building various DeFi products.See infographic below! pic.twitter.com/r6ZbMWKznF
— BR WN (@Lemaronskin) November 15, 2023
It’s worth establishing that the Injective protocol is based on the Cosmos network as a layer 2 chain. Likewise, Injective leverages chain bridges which allow users to access tokens from other networks like Ethererum.
The protocol made a name for itself as the first network within the Cosmos ecosystem to natively support assets on Ethereum. Users of Injective can as well access tokens from Inter-Blockchain Communication Protocol (IBC) blockchains and non-Ethereum Virtual Machine (EVM) networks.
zkEVM is entirely different from EVM, you may not know but this article on DroomDroom will provide you with enough details on the key difference between the two.
Injective Protocol Project Team
Injective Labs is the first entity that contributed to the development of the Injective Protocol. The firm is a research and development company co-founded by Eric Chen. Before establishing the organization, Chen was prominent as a trader and he worked at a renowned crypto fund. While working with the crypto fund, the co-founder oversaw the development of innovative market-neutral trading initiatives in the blockchain landscape.
Chen masterminded the crypto fund’s investment into top companies like Ox, Cosmos, and ChainLink. The co-founder is a cryptographic researcher and he has a robust knowledge of blockchain protocols. His experience also cut across the traditional finance sphere.
Another distinguished personality connected to the project is Albert Chon who is the Chief Technology Officer (CTO) of Injective Labs. He graduated from Stanford University, bagging a Bachelor’s and Master’s degree from the institution.
At one point, Chon worked as a development engineer at Amazon. He made a name for himself in the crypto landscape by inventing a new Ethereum standard that is in use by a host of projects in the industry today. Mirza Uddin, Chris Choi, Noah Axler, Julie Lee, Bojan Angjelkoski, and Nam Dang are prominent members of the Injective Protocol team.
Tokenomics of Injective
Distribution
The total supply for $IJN is 100,000,000 and its allocation is directed heavily towards the growth of its ecosystem. As revealed, 36.33% of the token’s total supply is allocated to its ecosystem development. The allocation model set aside 20% of the token’s total supply for the team while it committed 16.67% to private sale.
Also, as a project that prioritizes a well-established community, 10% of the allocation will be channeled towards community growth. 9% of the token total supply went to its Binance Launchpad sale, while 6.0% was earmarked to the seed sale. Likewise, project advisors received 2% of the token’s total supply.
Use Cases
According to the official website of the project, INJ has three (3) major use cases. The token has significant relevance to the Injective ecosystem because it covers crucial areas relating to the protocol.
Governance
INJ serves as a partway for its holders to participate in the Injective ecosystem. Holders of the token automatically become a member of the Injective decentralized autonomous organization (DAO).
Meanwhile, the DAO controls the Injective exchange which gives every holder of IJN direct access to trade and create market derivatives. Similarly, as a member of the DAO, holders of injective can make proposals and vote on issues relating to the exchange.
Staking
Holding the INJ token gives the holder the opportunity to become a network validator on the Injective Chain. Also, holders of the token can as well stake their INJ by trusting it with an existing chain validator. In both cases, holders stand the chance to earn rewards for protecting the Injective network.
The staking option is open to both validators and delegates. Furthermore, the staking option has a predetermined reward ratio. Every 150 INJ stake comes with a 5% annual return.
Collateral Derivatives
Another major use case of INJ is that it can function as a stand-in stablecoin to supply collateral for margin trading and the use of Injective’s derivatives market. Correspondingly, the token can function as a collateral backing and insurance pool staking in specialized futures markets. This particular use case of the token allows those who stake INJ to receive interest in their locked liquidity provider coins.
Competition
Avalanche
Avalanche is a layer one blockchain that is popular for its vast support for dApps and custom networks. The network has an enormous ecosystem that houses a host of dApps and DeFi solutions. Also, Avalanche focuses on offering a high speed by processing about 6,500 transactions per second without compromising scalability.
Do you wish to learn more about DeFi solutions? This article will provide you with the key elements of decentralized finance.
The intense focus on high throughput is aided by the network’s distinct architecture. Avalanche is equipped with three different blockchains; X-chain, C-Chain, and P-chain. Each blockchain within the Avalanche network has its respective responsibilities which have aided the project to stand out among its peers.
NEAR Protocol
NEAR is another alternative to INJ. The NEAR Protocol is a layer one network structured as a community-oriented cloud computing platform. The network is designed to proffer solutions to blockchain trilemma. Hence, the focus on tackling issues relating to popular blockchains made NEAR Protocol ideal for dApps developers and users.
NEAR Protocol is popular among developers because it provides them with modular elements that aid them to kick-start projects like token contracts and NFTs swiftly. Moreover, the protocol has simplified the onboarding of other networks by splitting addresses and designing dApps with registration stipulations that are similar to what users are familiar with.
ChainLink
Since its establishment in 2017, Chainlink has established itself as one of the top networks that allow blockchains to safely interact with external data feeds.
With the aid of a decentralized oracle network, Chainlink permits blockchains to interact with events and payment systems by supporting them with important details that are crucial for complex smart contracts. The provided details allow complex smart contracts to evolve into a dominant form of virtual agreement.
Smart contracts play a crucial role in the DeFi sector, this article on DroomDroom aid you in understanding the importance of these phenomenons.
Additionally, Chainlink as a blockchain abstraction layer has proven effective in enabling universally connected smart contracts. It is supported by an enormous open-source community of data suppliers, node operators, smart contract builders, blockchain auditors, and analytical experts. The project has a vast community that has contributed massively to the popularity of its native token, LINK.
Future of Injective
Investors and Experts are optimistic that IJN will enjoy a bullish run in the near future. A substantial portion of their prediction relies solely on how the project has managed to attract the attention of users. They projected that the growing attention on the protocol will increase over the years which in return will boost the value of its native token; INJ.
Meanwhile, according to the project’s roadmap, there are plans to collaborate and integrate with some established projects in the industry. Also, Injective Protocol intends to roll out initiatives that are aimed at growing its ecosystem and establishing its community. There are growing signs that Injective Protocol may compete with some of the biggest names in the near future.
Drawback and Weakness
Despite having attractive sides, Injective Protocol has its setbacks too and users must consider them before embracing the platform. You may not enjoy voluminous liquidity when using the derivative exchange because it hasn’t gained enough ground compared to well-known exchanges in the crypto market.
Another high-profile setback of this interesting project is its reliance on centralized price feeds for a noticeable part of its market. Despite being a decentralized protocol, the dependence on central price feeds can expose traders to price manipulation and deficiencies in pricing data.
Conclusion
To an extent, INJ looks like a lucrative investment. Various publications and prediction outlets are backing the token to soar significantly in the nearest future. However, we are convinced by some notable features of the project which made it look more transparent and result-driven.
Injective Protocol has a robust community that consists of developers, DeFi enthusiasts, market makers, and institutional and individual investors. In addition, Injective Protocol is one of the top projects in the web3 finance landscape. It has a straightforward roadmap that focuses on advancement, collaboration, and integration.
One step at a time but without a doubt, @Injective_ is redefining Web3 finance.
— Mirza.inj (@TheMirza_) November 15, 2023
We can attest that Injective Protocol has a recognizable team. The project’s team are not pseudonymous inventors without a trace, in fact, a substantial part of the crew is well known in the industry. Hence, investors can trust in the project and invest in the token. Nonetheless, all cryptocurrencies including INJ are volatile and their value mostly fluctuates. We urge investors not to commit more than what they can lose in the project.
The History of Binance: a Multi Billion Dollar Crypto Empire
Despite all the legal and illegal blows that it got, no one can deny that Binance is still the largest crypto exchange in the world. Everyday millions of customers transfer billions of dollars of crypto despite all regulatory sanctions which makes us think there must be something unique about the exchange.
In this article, we will take a look at the journey of the largest exchange that went from a nearly failed startup to the ruler of the crypto world. A company which has been through good, bad and everything in between, led by a humble and visionary leader.
So, let’s begin the journey.
Origins
Prior to founding Binance, Changpeng Zhao was an entrepreneur and a tech professional. He founded Fusion Systems in 2005 in Shanghai which built a high speed trading system for stock market brokers.
In 2013, he joined Blockchain.info as the third member of the crypto wallet’s team.
Zhao started Binance in 2017 after leaving OKCoin as its CTO. He founded the company in China. However, soon he had to move out of the country because of the Chinese ban on crypto.
Binance launched its ICO which helped it attract $15 million in coin sales. This gave birth to the BNB cryptocurrency. It was initially conceived as a cryptocurrency to pay trading fee on Binance. By mid-2024, BNB commanded over $87 billion.
Investing in ICOs, Must Read These Risk Management Strategies
The cryptocurrency now has an autoburn mechanism which helps greatly in price appreciation.
Expansion
By Jan 2018, Binance became the largest crypto exchange with over $1.3 billion in valuation.
Throughout the year, Binance opened three offices in Malta, Bermuda and Jersey.
In June 2018, Binance acquired Trust Wallet, which has been one of the most popular crypto wallets.
In May 2019, Binance revealed that it became a victim of a large-scale security breach and had lost over 7000 Bitcoins valued then at $6 million.
Don’t Miss: What Happens to Crypto if Binance Goes Bankrupt?
In September 2019, Binance launched BUSD in collaboration with Paxos, a well known developer of stablecoins. Within a few years, it rose to become the third largest stablecoin after USDT and USDC. At its peak, it commanded over $23.5 billion in market cap (November 2022). However, it had to shut down the stablecoin as its issuer Paxos was ordered by New York authorities to shut minting in early 2023.
Mature Phase
In February 2020, Binance had a brief spat with the Malta Financial Services Authority(MFSA) over regulation. The authority issued a press release stating that despite being a Maltese company, Binance was not registered with MFSA and thereby was not under its regulatory oversight.
In October 2020, the Forbes Magazine did a story on Binance which claimed that Zhao and other Binance executives designed the corporate structure in a way that would profit from the country but would avoid compliance with US regulations.
By May 2021, there were unconfirmed reports that Binance was under legal scrutiny by the Internal Revenue Service as well as by the US Department of Justice. However, it would take almost a year before US regulators finally charge Binance on paper.
In a Post-COVID World
Binance was perhaps the greatest benefactor of the COVID induced crypto bull run from 2020-2022. With lockdowns and travel restrictions all over the world, users had almost nothing to spend their money. A rising crypto trend in such times, prompted users to invest in crypto. Investments from all over the world made crypto rally faster than ever.
By the end of 2023, Binance had dominated at least 50% of the crypto market in terms of trading volumes.
Growth of Binance in 2022. Shown in Light Green
This alerted several regulators all over the world and around the same time, we saw the initial troubles of the exchange.
Controversial Stand on Russia Ukraine War
The troubles of Binance might have taken concrete shape in 2022 when after a Russian invasion of Ukraine, Binance decided not to ban Russian users from its platform. In doing so, it might have irked US authorities. However, later Binance softened their approach and donated $10 million in support of Ukraine.
In 2024, the exchange pleaded guilty to having allowed billions of dollars to flow without restriction through its exchange. It also was found guilty of having helped users bypass the US sanctions against Russia.
The Regulatory Troubles Begin
Binance vs US SEC
On June 05, 2023, the US SEC registered a case against Binance and its 13 companies that includes Binance.com, Binance.us, BAM trading services, and the group’s co-founder Changpeng Zhao. The charges include operating unregistered exchanges, unregistered broker, dealer and clearing services, misrepresenting trader controls over Binance.us and finally the offering and sale of unregistered securities.
Today we charged Binance Holdings Ltd. (Binance); U.S.-based affiliate, BAM Trading Services Inc., which, together with Binance, operates https://t.co/swcxioZKVP; and their founder, Changpeng Zhao, with a variety of securities law violations.https://t.co/H1wgGgR5ir pic.twitter.com/IWTb7Et86H
— U.S. Securities and Exchange Commission (@SECGov) June 5, 2023
Binance vs US Department of Justice
The case registered against Binance by the US Department of Justice (DOJ) charged the company and its CEO of committing a violation of the Bank Secrecy Act. As per the act, it was charged with transferring money without registration. The exchange was also charged with violating US Sanctions against Russia.
Binance agreed to pay the biggest fine ever paid in corporate history. The company settled the case by the US Department of Justice after paying the latter, a sum of $4.3 billion.
Binance and CEO Plead Guilty to Federal Charges in $4B ResolutionBinance Admits It Engaged in Anti-Money Laundering, Unlicensed Money Transmitting, and Sanctions Violations in Largest Corporate Resolution to Include Criminal Charges for an Executivehttps://t.co/yz0mCgTEOZ pic.twitter.com/cYdmmHCfSG
— U.S. Department of Justice (@TheJusticeDept) November 21, 2023
Further, Changpeng Zhao, co-founder of Binance had to agree to step down as the CEO and from the Board of the US arm.
The prosecutors had also demanded a three year sentencing. However, Zhao only received a light four month sentence due to his cooperation, clean image and clear track record.
This was possible because of several reasons. Changpeng Zhao had been a very ethical entrepreneur in his past. When the US DOJ registered the case against Binance, he had Canadian citizenship and could have easily lived a life on the run. His wealth was enough for him to sustain any lifestyle. Still, he decided to cooperate with the US DOJ and even was present physically prior to sentencing.
Another factor that greatly helped in reducing the sentencing was the letters of support that poured in the court prior to his sentencing. Several well known corporate houses, industry professionals, friends and family had vouched for Zhao being a good and ethical person. Even Zhao himself penned a letter of apology to the court, asking for forgiveness.
All of these helped him not only to clarify his own image, but also secured him a less harsh prison sentence.
Binance vs Nigeria
The case of Binance was quite unique. It was summoned by the Nigerian SEC as well as multiple agencies under the government.
It was charged by the Nigerian government to work in the country without legal registrations, facilitate illicit transactions and also engage in tax evasion.
Between late February and early March 2024, the Nigerian authorities levied a $10 billion fine on Binance for involvement in money laundering. However, the notice was soon withdrawn and the government went into denial as claims of the government strong-arming Binance surfaced. The fine was later changed to $35 million by 30th March 2024.
Further, on multiple occasions, the Nigerian house of representatives had summoned Binance executives including its CEO Richard Teng. However, the CEO did not comply with any summons yet.
Binance vs French Authorities
Binance received regulatory clearance way back in 2022. The license allowed the company to provide digital asset services in France. However, by mid-2023, the Paris prosecutor’s office had charged the exchange with money laundering in the country.
Then Binance CEO Changpeng Zhao had clarified that despite unannounced inspections, the exchange fully cooperated with the French authorities.
4. FUD.In France, surprise (no advanced notice) on-site inspections of regulated businesses are the norm, for banks, and now for crypto too.The surprise visit for Binance France happened a couple of weeks ago. It's not "news". Binance France cooperated fully. Binance also… https://t.co/xdbLc5jXBW
— CZ BNB (@cz_binance) June 16, 2023
Later the case seems to have receded into oblivion with no further updates after June 2023.
Binance and Netherlands
In 2022, Dutch authorities put a fine on Binance for operating in the country without a proper license.
However, by June 2023, due to failure to secure the correct licenses, it had to exit the country. All its users were transferred to its rival Coinmerce.
Despite everything, the exchange had said during its exit that in the future, it would reintroduce its services in the country after obtaining proper licenses and documents.
Binance in India
Binance’s troubles were unique in India. Due to the presence of strong AML laws, and the focus on increasing compliance, the exchange was initially seen as a non-complying entity. However, that soon changed with Binance’s decision to comply.
Perhaps it was the only incident where both parties, the regulator and the company, mutually understood and agreed to each other’s needs without any collateral damage.
In India, there exists a powerful but less known regulator called the Financial Intelligence Unit (FIU). It was established to detect money laundering, financial crimes and also provide intelligence inputs to the government of India.
The FIU asked crypto exchanges operating in India, both native and international, to register with the regulator, share transactions data with it and also comply with Indian money laundering laws. However, due to a lack of response, the regulator decided to put a shadow ban on Binance.com on 27th December 2023. The URL of Binance.com was blocked for Indian users and its mobile apps were taken down from Apple and Google stores.
Binance quickly responded that it was ready to comply with Indian laws. Soon the negotiations began and by May 10, 2024, Binance finalized its initial registrations with India along with KuCoin. Within a few days, both the companies got approval and a nod to resume their operations in India. Binance also reportedly agreed to pay a $2 million fine.
Binance registers with FIU as it seeks to resume operations in Indiahttps://t.co/08QvIBVw75
— Gadgets 360 (@Gadgets360) May 11, 2024
Binance in the UAE
UAE is perhaps the few countries where Binance actually had ease to do business. The vision of the UAE government to make the country a crypto hub has greatly helped Binance and several other crypto businesses. The country has been hosting several successful crypto events lately.
In June 2023, Binance received a VASP license which acted as a MVP license in Dubai and allowed Binance to establish operations. Later, on 18th April 2024, Binance received full operational license in Dubai.
The Illegality of the Legal Troubles
It’s well known that the troubles of all crypto-native companies would have been far less if countries had crypto regulations in place. Till date only a few countries have crossed the policy stage.
When the US charged Binance, it did not even have a draft policy for crypto, let alone having a concrete set of regulations. The SEC had repeatedly tried to impose its authority to regulate crypto even when it had lost a case against Ripple. That case also made it clear that any retail sales of XRP never amounted to their classification as securities.
Similarly, the prosecution of Binance under the Nigerian laws never took any concrete stand because crypto as a whole was for tax evasion, money laundering and several other crimes. Such services were provided by several other companies including those native to the country.
Countries at Various Stages of Crypto Legislation/Regulation, Source IMF
Data by WEF shows that even as late as Jan 2024, most countries are still unable to regulate crypto in its entirety. Only a few economies such as the EU, UAE, Switzerland and Japan seem to have comprehensive regulations.
Choosing a Way Forward
Battling with authorities had always proven fatal even if someone was right. The Ripple vs SEC case dragged on for years and despite a win by Ripple (in relation to the retail sales), it had to spend a huge sum, estimated at $1.3 billion, on just legal fees. Yet, the case is far from being a complete resolution.
Read More: Ultimate Guide to Safe P2P Transactions
It won’t be an overstatement to assume that Binance decided to skip all those legal headaches and went directly into resolution. Not only was it an apt decision with respect to cost, but also it helped Binance skip all the negative media attention. Further, compliance also strengthened its position in the eye of the regulators and lawmakers.
Frequently Asked Questions
Can Indians Legally Trade on Binance?
Binance has registered with the Indian Financial Intelligence Unit on May 11, 2024 and has received a nod to resume its operations in the country. Though it was never illegal to trade on Binance, yet with the registration, using Binance is more lawful than ever in India
Is Trading in Binance Safe and Legal?
Before trying to trade, take a look at the legal status of Binance in your country. If it is legally operational, you can trade safely. However, please beware of P2P transactions as they pose a risk of fraud.
In this article, we will take a look at the journey of the largest exchange that went from a nearly failed startup to the ruler of the crypto world. A company which has been through good, bad and everything in between, led by a humble and visionary leader.
So, let’s begin the journey.
Origins
Prior to founding Binance, Changpeng Zhao was an entrepreneur and a tech professional. He founded Fusion Systems in 2005 in Shanghai which built a high speed trading system for stock market brokers.
In 2013, he joined Blockchain.info as the third member of the crypto wallet’s team.
Zhao started Binance in 2017 after leaving OKCoin as its CTO. He founded the company in China. However, soon he had to move out of the country because of the Chinese ban on crypto.
Binance launched its ICO which helped it attract $15 million in coin sales. This gave birth to the BNB cryptocurrency. It was initially conceived as a cryptocurrency to pay trading fee on Binance. By mid-2024, BNB commanded over $87 billion.
Investing in ICOs, Must Read These Risk Management Strategies
The cryptocurrency now has an autoburn mechanism which helps greatly in price appreciation.
Expansion
By Jan 2018, Binance became the largest crypto exchange with over $1.3 billion in valuation.
Throughout the year, Binance opened three offices in Malta, Bermuda and Jersey.
In June 2018, Binance acquired Trust Wallet, which has been one of the most popular crypto wallets.
In May 2019, Binance revealed that it became a victim of a large-scale security breach and had lost over 7000 Bitcoins valued then at $6 million.
Don’t Miss: What Happens to Crypto if Binance Goes Bankrupt?
In September 2019, Binance launched BUSD in collaboration with Paxos, a well known developer of stablecoins. Within a few years, it rose to become the third largest stablecoin after USDT and USDC. At its peak, it commanded over $23.5 billion in market cap (November 2022). However, it had to shut down the stablecoin as its issuer Paxos was ordered by New York authorities to shut minting in early 2023.
Mature Phase
In February 2020, Binance had a brief spat with the Malta Financial Services Authority(MFSA) over regulation. The authority issued a press release stating that despite being a Maltese company, Binance was not registered with MFSA and thereby was not under its regulatory oversight.
In October 2020, the Forbes Magazine did a story on Binance which claimed that Zhao and other Binance executives designed the corporate structure in a way that would profit from the country but would avoid compliance with US regulations.
By May 2021, there were unconfirmed reports that Binance was under legal scrutiny by the Internal Revenue Service as well as by the US Department of Justice. However, it would take almost a year before US regulators finally charge Binance on paper.
In a Post-COVID World
Binance was perhaps the greatest benefactor of the COVID induced crypto bull run from 2020-2022. With lockdowns and travel restrictions all over the world, users had almost nothing to spend their money. A rising crypto trend in such times, prompted users to invest in crypto. Investments from all over the world made crypto rally faster than ever.
By the end of 2023, Binance had dominated at least 50% of the crypto market in terms of trading volumes.
Growth of Binance in 2022. Shown in Light Green
This alerted several regulators all over the world and around the same time, we saw the initial troubles of the exchange.
Controversial Stand on Russia Ukraine War
The troubles of Binance might have taken concrete shape in 2022 when after a Russian invasion of Ukraine, Binance decided not to ban Russian users from its platform. In doing so, it might have irked US authorities. However, later Binance softened their approach and donated $10 million in support of Ukraine.
In 2024, the exchange pleaded guilty to having allowed billions of dollars to flow without restriction through its exchange. It also was found guilty of having helped users bypass the US sanctions against Russia.
The Regulatory Troubles Begin
Binance vs US SEC
On June 05, 2023, the US SEC registered a case against Binance and its 13 companies that includes Binance.com, Binance.us, BAM trading services, and the group’s co-founder Changpeng Zhao. The charges include operating unregistered exchanges, unregistered broker, dealer and clearing services, misrepresenting trader controls over Binance.us and finally the offering and sale of unregistered securities.
Today we charged Binance Holdings Ltd. (Binance); U.S.-based affiliate, BAM Trading Services Inc., which, together with Binance, operates https://t.co/swcxioZKVP; and their founder, Changpeng Zhao, with a variety of securities law violations.https://t.co/H1wgGgR5ir pic.twitter.com/IWTb7Et86H
— U.S. Securities and Exchange Commission (@SECGov) June 5, 2023
Binance vs US Department of Justice
The case registered against Binance by the US Department of Justice (DOJ) charged the company and its CEO of committing a violation of the Bank Secrecy Act. As per the act, it was charged with transferring money without registration. The exchange was also charged with violating US Sanctions against Russia.
Binance agreed to pay the biggest fine ever paid in corporate history. The company settled the case by the US Department of Justice after paying the latter, a sum of $4.3 billion.
Binance and CEO Plead Guilty to Federal Charges in $4B ResolutionBinance Admits It Engaged in Anti-Money Laundering, Unlicensed Money Transmitting, and Sanctions Violations in Largest Corporate Resolution to Include Criminal Charges for an Executivehttps://t.co/yz0mCgTEOZ pic.twitter.com/cYdmmHCfSG
— U.S. Department of Justice (@TheJusticeDept) November 21, 2023
Further, Changpeng Zhao, co-founder of Binance had to agree to step down as the CEO and from the Board of the US arm.
The prosecutors had also demanded a three year sentencing. However, Zhao only received a light four month sentence due to his cooperation, clean image and clear track record.
This was possible because of several reasons. Changpeng Zhao had been a very ethical entrepreneur in his past. When the US DOJ registered the case against Binance, he had Canadian citizenship and could have easily lived a life on the run. His wealth was enough for him to sustain any lifestyle. Still, he decided to cooperate with the US DOJ and even was present physically prior to sentencing.
Another factor that greatly helped in reducing the sentencing was the letters of support that poured in the court prior to his sentencing. Several well known corporate houses, industry professionals, friends and family had vouched for Zhao being a good and ethical person. Even Zhao himself penned a letter of apology to the court, asking for forgiveness.
All of these helped him not only to clarify his own image, but also secured him a less harsh prison sentence.
Binance vs Nigeria
The case of Binance was quite unique. It was summoned by the Nigerian SEC as well as multiple agencies under the government.
It was charged by the Nigerian government to work in the country without legal registrations, facilitate illicit transactions and also engage in tax evasion.
Between late February and early March 2024, the Nigerian authorities levied a $10 billion fine on Binance for involvement in money laundering. However, the notice was soon withdrawn and the government went into denial as claims of the government strong-arming Binance surfaced. The fine was later changed to $35 million by 30th March 2024.
Further, on multiple occasions, the Nigerian house of representatives had summoned Binance executives including its CEO Richard Teng. However, the CEO did not comply with any summons yet.
Binance vs French Authorities
Binance received regulatory clearance way back in 2022. The license allowed the company to provide digital asset services in France. However, by mid-2023, the Paris prosecutor’s office had charged the exchange with money laundering in the country.
Then Binance CEO Changpeng Zhao had clarified that despite unannounced inspections, the exchange fully cooperated with the French authorities.
4. FUD.In France, surprise (no advanced notice) on-site inspections of regulated businesses are the norm, for banks, and now for crypto too.The surprise visit for Binance France happened a couple of weeks ago. It's not "news". Binance France cooperated fully. Binance also… https://t.co/xdbLc5jXBW
— CZ BNB (@cz_binance) June 16, 2023
Later the case seems to have receded into oblivion with no further updates after June 2023.
Binance and Netherlands
In 2022, Dutch authorities put a fine on Binance for operating in the country without a proper license.
However, by June 2023, due to failure to secure the correct licenses, it had to exit the country. All its users were transferred to its rival Coinmerce.
Despite everything, the exchange had said during its exit that in the future, it would reintroduce its services in the country after obtaining proper licenses and documents.
Binance in India
Binance’s troubles were unique in India. Due to the presence of strong AML laws, and the focus on increasing compliance, the exchange was initially seen as a non-complying entity. However, that soon changed with Binance’s decision to comply.
Perhaps it was the only incident where both parties, the regulator and the company, mutually understood and agreed to each other’s needs without any collateral damage.
In India, there exists a powerful but less known regulator called the Financial Intelligence Unit (FIU). It was established to detect money laundering, financial crimes and also provide intelligence inputs to the government of India.
The FIU asked crypto exchanges operating in India, both native and international, to register with the regulator, share transactions data with it and also comply with Indian money laundering laws. However, due to a lack of response, the regulator decided to put a shadow ban on Binance.com on 27th December 2023. The URL of Binance.com was blocked for Indian users and its mobile apps were taken down from Apple and Google stores.
Binance quickly responded that it was ready to comply with Indian laws. Soon the negotiations began and by May 10, 2024, Binance finalized its initial registrations with India along with KuCoin. Within a few days, both the companies got approval and a nod to resume their operations in India. Binance also reportedly agreed to pay a $2 million fine.
Binance registers with FIU as it seeks to resume operations in Indiahttps://t.co/08QvIBVw75
— Gadgets 360 (@Gadgets360) May 11, 2024
Binance in the UAE
UAE is perhaps the few countries where Binance actually had ease to do business. The vision of the UAE government to make the country a crypto hub has greatly helped Binance and several other crypto businesses. The country has been hosting several successful crypto events lately.
In June 2023, Binance received a VASP license which acted as a MVP license in Dubai and allowed Binance to establish operations. Later, on 18th April 2024, Binance received full operational license in Dubai.
The Illegality of the Legal Troubles
It’s well known that the troubles of all crypto-native companies would have been far less if countries had crypto regulations in place. Till date only a few countries have crossed the policy stage.
When the US charged Binance, it did not even have a draft policy for crypto, let alone having a concrete set of regulations. The SEC had repeatedly tried to impose its authority to regulate crypto even when it had lost a case against Ripple. That case also made it clear that any retail sales of XRP never amounted to their classification as securities.
Similarly, the prosecution of Binance under the Nigerian laws never took any concrete stand because crypto as a whole was for tax evasion, money laundering and several other crimes. Such services were provided by several other companies including those native to the country.
Countries at Various Stages of Crypto Legislation/Regulation, Source IMF
Data by WEF shows that even as late as Jan 2024, most countries are still unable to regulate crypto in its entirety. Only a few economies such as the EU, UAE, Switzerland and Japan seem to have comprehensive regulations.
Choosing a Way Forward
Battling with authorities had always proven fatal even if someone was right. The Ripple vs SEC case dragged on for years and despite a win by Ripple (in relation to the retail sales), it had to spend a huge sum, estimated at $1.3 billion, on just legal fees. Yet, the case is far from being a complete resolution.
Read More: Ultimate Guide to Safe P2P Transactions
It won’t be an overstatement to assume that Binance decided to skip all those legal headaches and went directly into resolution. Not only was it an apt decision with respect to cost, but also it helped Binance skip all the negative media attention. Further, compliance also strengthened its position in the eye of the regulators and lawmakers.
Frequently Asked Questions
Can Indians Legally Trade on Binance?
Binance has registered with the Indian Financial Intelligence Unit on May 11, 2024 and has received a nod to resume its operations in the country. Though it was never illegal to trade on Binance, yet with the registration, using Binance is more lawful than ever in India
Is Trading in Binance Safe and Legal?
Before trying to trade, take a look at the legal status of Binance in your country. If it is legally operational, you can trade safely. However, please beware of P2P transactions as they pose a risk of fraud.
What Is a Bitcoin Futures ETF? How Does It Work? List of 16 Top Bitcoin Futures ETF
Bitcoin Futures ETF allows investors to invest their money in leveraged Bitcoin instruments such as Futures and Options. Leverage provides them with a way to reap greater returns than the average investors.
However, there are ample risks involved too. Risks such as capital risk, and regulatory risk pose a great challenge. Yet, with diligence, these ETFs prove a great investment.
This article explores Bitcoin Futures ETF and tries to explain their working, benefits and disadvantages. At the end, there is a list of 16 top Bitcoin Futures ETFs with a brief explanation on how they make money for their investors.
What are Bitcoin Futures?
Bitcoin Futures refers to the derivative contracts which trade with a certain amount of leverage. These contracts do not trade actual bitcoin but place a kind of bet on the future price of Bitcoin (hence the name). The bets are usually directional (bullish or bearish) and provide multifold return to the investor who has accurately predicted the price movement.
Usually a derivative contract is between two parties, one among whom assumes that the price will go higher and the other assumes the price would go lower. These parties remain anonymous to each other and meet via a crypto derivative exchange such as Binance, Coinbase or Derebit.
Futures trading has been beneficial for both institutional as well as retain traders. Institutions can take market positions (bearish or bullish) against a certain event (say elections) and protect their holdings from volatility. Whereas for retail users, it is a quick way to make a lot of money, although with a huge risk.
How Bitcoin Futures and Future ETFs Work?
Let us understand how future trading works with an example.
Suppose Bitcoin is at $60,000 and you run a Bitcoin ETF with 100k Bitcoins. Now imagine, if there is any negative news, for example, if the US Fed raises interest rates by 1%, it would definitely result in a market crash. But you won’t be able to sell all your 100k Bitcoins before the crash takes place, simply because of the fund size.
For the sake of simplicity, let us assume that Bitcoin would rise or fall just $1,000 in any case.
If you would have sold your Bitcoins at $60k, there is no surety that it would have fetched you the same price i.e.$60k, because selling such a large holding takes time. Plus, if you try to sell such a huge number of Bitcoins, it could have resulted in a market crash. Also, you would have been banned from trading in any crypto exchange.
Now here comes a person, who says that if Bitcoin falls from $60k to $59k, I will give you $1000 cash and if the reverse happens, say a rally from $60k to $61k, you will have to pay me $1000.
Now, think, why would someone enter into such an agreement with you. The reason is with Bitcoin futures, the person would have to pay a very small price($10 with a leverage of 100) as investment(margin) and gain $1000 if they are right. This contract is called a leveraged futures contract.
NOTE: Leverage is a form of trader where a person invests a small amount (margin), say $10 and is allowed to trade at a much bigger nominal value, say $100. The trader is liquidated (stopped) if their losses go above $10. This is how leverage works in its simplest form.
For more details on how leverage works, see the relevant section below.
If the institution/Bitcoin ETF fails (i.e., the market goes higher), they just lose $1000 and but their entire fund is still protected and also as price goes up by $1000, they make more gains. If they are right (market goes down) they still get $1000 from the individual trader.
On the trader’s side, they gain $1000 if the market goes up but lose $10 if the market goes down.
Why Are Bitcoin Future ETFs Popular?
Bitcoin ETFs provide a safe yet rewarding way for retailers to earn from Bitcoin derivatives.
Futures trading is greatly rewarding for individual retail traders, however, there is a catch. Retail traders often lack the sophisticated knowledge of trading strategies. For retail individual traders, this results in a loss most of the time they trade.
However, there is a better way for them to benefit. Traders and investors who want to benefit from Futures trading, but do not want to do it on their own, can take the benefit of Bitcoin Futures ETF.
Bitcoin Futures ETF are the shares of the companies that trade Bitcoin Futures with expert knowledge and years of experience. These traders have quantitative models, risk-reward ratio calculations and several times even insider knowledge that helps them secure a profit most of the times they trade. Even their losses are capped with the diligent usage of risk management strategies.
Must Read for Loss Making Traders: Risk Management Strategies for Investing in Pre-Sale Crypto
These ETFs charge a small amount of money to manage customer funds, often in the range of 0.1% to 2%.
There are several Bitcoin Futures all over the world and they have been present since October 2021.
Terms Related to Bitcoin Futures ET
Bitcoin
Bitcoin is a cryptocurrency and the first one to solve the double spending problem. Previously, all other cryptocurrencies could be just copied and pasted several times to create multiple yet identical copies. Bitcoin used a unique method called proof of work to make sure that a certain user could only spend their crypto once.
Futures
Futures and Options, together called derivatives, allows users to place intelligent bets on the future price of a certain asset, here Bitcoin. A future trade is composed of two traders who have different and opposing views on the price of Bitcoin at a future date, say 1 month ahead.
ETF
An Exchange Traded Fund or ETF is a share of a trust fund that trades solely in Bitcoin Futures. Whatever proceeds are obtained as a result, are shared between the subscribers of the ETF based on their percentage of ownership.
Margin
Margin is the minimum amount you have to put forward in order to trade a Future contract. For example, if you are trading a 10x Futures contract with a nominal value of $100, you would need a margin of $10.
A Comprehensive Guide To Bitcoin Futures vs. Margin Trading, Spot Markets
Derivative
Futures and Options are collectively called as derivatives because they derive their value from a separate independent financial asset such as stocks, crypto or commodities. For this article, a financial asset refers to Bitcoin, Ethereum or any other cryptocurrency.
Leverage
Leverage is the ratio of the nominal amount of your trade and the margin you put forward. In the above example of Margin, the leverage is 10x since it allows you to trade a contract that has a nominal value of 100 with a margin of $10.
Liquidation/Liquidated
Liquidation, in the scope of this article, is the act of terminating a futures contract because its losses have either exceeded the amount of margin put forward or simply because the exchange cannot settle this trade beyond a certain level. This acts as a safety mechanism and prevents a sell-off or shoot-off in a crypto’s price.
Advantages of Bitcoin Future ETFs
There are several advantages of investing in a Bitcoin Futures ETF.
Your funds are managed by seasoned experts.
The funds are easily invested and redeemed without any lock-in period.
Bitcoin futures ETFs allow investing with leverage which allows investors to reap multi-fold benefits.
ETFs are regulated by government bodies which ensure consumer protection.
The ETFs also benefit from Bitcoin fundamentals such as growing adoption and scarcity introduced due to Bitcoin halving.
Despite their high appeal, Futures Bitcoin ETFs barely hold just 12% of the market share among all Bitcoin ETFs.
Market Share of Spot Bitcoin ETF vs Futures ETF Disadvantages of Bitcoin Future ETFs
The risk factor is higher than spot Bitcoin ETFs due to the use of leverage trading in Bitcoin Futures.
The ETFs are not suited for all investor types, especially the risk averse investors.
A wrong time of entry would mean that you would lose a great portion of your invested money.
Crypto is still a sparsely regulated sector and there are serious regulatory risks with any investment.
Bitcoin’s price often reduced to one-fifth of its cycle high during the bear markets.
Must Read: Crypto Futures Traders: What Are the 8 Common Trading Mistakes to Avoid?
List of Top 16 Bitcoin Futures ETFs
The list below contains all the major Bitcoin Futures ETFs. Some of them help increase your invested capital through Bitcoin Futures while others use a mix of Bitcoin Futures, Options, Ethereum Futures, and several other financial instruments.
Below is a series of 3 charts showing the investment trend in all Bitcoin and Ethereum Future ETFs. There are separate charts for Bitcoin and Ether derivatives along with a combined chart.
Futures ETF Subscription Trends, Bitcoin vs Ether vs Mixed
These ETFs do not directly invest in any Bitcoin, and do not even track the price of spot Bitcoin. Most of these ETFs track Bitcoin price that is provided by the Chicago Mercantile Exchange (CME).
ProShares Bitcoin Strategy ETF
This was the first Bitcoin strategy ETF launched on October 19, 2021 and relies on Bitcoin Future contracts solely.
2x Bitcoin Strategy ETF
This is a leveraged Bitcoin Futures ETF which uses 2x leverage to trade. This feature allows it to increase its profits at twice the pace with the same level of investments.
ProShares Short Bitcoin Strategy ETF (BITI)
The ProShares ETF only invests in bearish derivatives contracts and seeks to make most of its gains in bearish markets and during contra trades in bull markets.
Valkyrie Bitcoin and Ethereum Strategy ETF (BTF)
This ETF dynamically allocates its funds to Bitcoin and Ethereum derivative contracts. The allocation is not fixed and is actively adjusted to reap the full benefits of the prevalent market conditions.
Valkyrie Bitcoin Futures Leveraged Strategy ETF (BTFX)
This ETF like the 2x Bitcoin Strategy ETF uses leveraged trade to make multi-fold returns in Bitcoin Future contracts. Though there is a risk associated with this fund, yet it has been performing well and has given high returns since inception.
GlobalX Blockchain and Bitcoin Strategy ETF (BITS)
This ETF is a hybrid ETF that seeks to invest for both the long term and the short term. For long term investments, it invests in equity of various blockchain companies. However, for short term investments, it relies on Bitcoin derivatives.
The ETF is good for those who seek a balanced approach to investing in crypto.
Simplify Bitcoin Strategy Plus Income ETF (MAXI)
This ETF issued by Simplify invests in Bitcoin futures as well as in debt instruments. The ETF provides dual benefits. When markets are good, the ETF gives a yield which is obtained through Bitcoin Futures and during bad markets, the debt instruments provide a fixed income, making the ETF an all-weather one.
Ark Shares21 Active Bitcoin Futures Strategy ETF (ARKA)
This Ark Shares21 ETF uses dynamic allocation in Bitcoin derivatives to take advantage of prevalent market conditions.
ProShares Ultra Short Bitcoin ETF
This ETF by ProShares purely invests in shorting or bearish opportunities in Bitcoin which helps it profit everytime there is a dip in Bitcoin.
The best time for any trader to invest in this ETF is during the bear cycle in Bitcoin which happens once every 4 years and could last up to a year. The last bear cycle started in November 2021 and lasted till January 2023.
Bitwise Bitcoin Strategy Ultimate Roll ETF (BITC)
The BITC ETF uses money market securities for collateral to invest in the highest yield Bitcoin derivatives contracts.
Bitwise Bitcoin and Ether Equal Weight Strategy ETF (BTOP)
This ETF by Bitwise invests equal amounts in both the future and options contracts of Bitcoin and Ethereum.
ProShares Bitcoin and Ether Market Cap Weight Strategy ETF
This ETF is yet again unique in its approach where it just invests in Bitcoin and Ether derivatives but in the ratio of 11:3 respectively. The ratio of 11:3 represents the domination of Bitcoin(54%) and Ethereum(15%) over the entire crypto market.
The benefit of this ETF is that it lets you bet at almost 70% of the crypto market. The choice of just Bitcoin and Ethereum futures avoids unnecessary volatility which is seen in broader markets.
ProShares Bitcoin and Ether Equal Weight Strategy ETF
This ProShares derivatives ETF invests in both Bitcoin and Ethereum derivative contracts in equal weight, i.e., equal capital allocation.
ARK 21Shares Active Bitcoin Ethereum Strategy ETF (ARKY)
The ETF invests in both Ethereum and Bitcoin Futures and Options contracts. The active tag in its name shows that portfolio allocation is dynamic.
Such ETFs tend to benefit you in highly volatile markets such as one which was seen around the 4th Bitcoin halving.
CyberHornet S&P 500 and Bitcoin 75 / 25 Strategy ETF (ZZZ)
This is a unique hybrid ETF which allocates 25% of its funds to Bitcoin derivatives such as futures and options. The other 75% is allocated to S&P 500 which is one of the stock market indices in the USA.
ARK 21Shares Active On-Chain Bitcoin Strategy ETF (ARKC)
This ARK 21Shares ETF uses on-chain metrics and models to prepare strategies which it then uses to invest in Bitcoin futures and options. On-chain metrics help in identifying real-time usage of Bitcoin and is widely used throughout the world to make informed investments in Bitcoin.
Conclusion
Bitcoin Future ETFs invest in Bitcoin Future contracts to reap greater benefits than ordinary Bitcoin investors. They use leverage trade to reap multifold returns in a very short period.
Suggested Reading: Trading Bitcoin vs. BTC Futures: A Comprehensive Guide
These ETFs often create a win-win situation for retail and institutional traders. Retailers use it to quickly make a good profit while institutions use it for better risk management.
However, these ETFs are also much more riskier than the spot ETFs and could potentially wipe out participant’s capital during a bearish market.
However, there are ample risks involved too. Risks such as capital risk, and regulatory risk pose a great challenge. Yet, with diligence, these ETFs prove a great investment.
This article explores Bitcoin Futures ETF and tries to explain their working, benefits and disadvantages. At the end, there is a list of 16 top Bitcoin Futures ETFs with a brief explanation on how they make money for their investors.
What are Bitcoin Futures?
Bitcoin Futures refers to the derivative contracts which trade with a certain amount of leverage. These contracts do not trade actual bitcoin but place a kind of bet on the future price of Bitcoin (hence the name). The bets are usually directional (bullish or bearish) and provide multifold return to the investor who has accurately predicted the price movement.
Usually a derivative contract is between two parties, one among whom assumes that the price will go higher and the other assumes the price would go lower. These parties remain anonymous to each other and meet via a crypto derivative exchange such as Binance, Coinbase or Derebit.
Futures trading has been beneficial for both institutional as well as retain traders. Institutions can take market positions (bearish or bullish) against a certain event (say elections) and protect their holdings from volatility. Whereas for retail users, it is a quick way to make a lot of money, although with a huge risk.
How Bitcoin Futures and Future ETFs Work?
Let us understand how future trading works with an example.
Suppose Bitcoin is at $60,000 and you run a Bitcoin ETF with 100k Bitcoins. Now imagine, if there is any negative news, for example, if the US Fed raises interest rates by 1%, it would definitely result in a market crash. But you won’t be able to sell all your 100k Bitcoins before the crash takes place, simply because of the fund size.
For the sake of simplicity, let us assume that Bitcoin would rise or fall just $1,000 in any case.
If you would have sold your Bitcoins at $60k, there is no surety that it would have fetched you the same price i.e.$60k, because selling such a large holding takes time. Plus, if you try to sell such a huge number of Bitcoins, it could have resulted in a market crash. Also, you would have been banned from trading in any crypto exchange.
Now here comes a person, who says that if Bitcoin falls from $60k to $59k, I will give you $1000 cash and if the reverse happens, say a rally from $60k to $61k, you will have to pay me $1000.
Now, think, why would someone enter into such an agreement with you. The reason is with Bitcoin futures, the person would have to pay a very small price($10 with a leverage of 100) as investment(margin) and gain $1000 if they are right. This contract is called a leveraged futures contract.
NOTE: Leverage is a form of trader where a person invests a small amount (margin), say $10 and is allowed to trade at a much bigger nominal value, say $100. The trader is liquidated (stopped) if their losses go above $10. This is how leverage works in its simplest form.
For more details on how leverage works, see the relevant section below.
If the institution/Bitcoin ETF fails (i.e., the market goes higher), they just lose $1000 and but their entire fund is still protected and also as price goes up by $1000, they make more gains. If they are right (market goes down) they still get $1000 from the individual trader.
On the trader’s side, they gain $1000 if the market goes up but lose $10 if the market goes down.
Why Are Bitcoin Future ETFs Popular?
Bitcoin ETFs provide a safe yet rewarding way for retailers to earn from Bitcoin derivatives.
Futures trading is greatly rewarding for individual retail traders, however, there is a catch. Retail traders often lack the sophisticated knowledge of trading strategies. For retail individual traders, this results in a loss most of the time they trade.
However, there is a better way for them to benefit. Traders and investors who want to benefit from Futures trading, but do not want to do it on their own, can take the benefit of Bitcoin Futures ETF.
Bitcoin Futures ETF are the shares of the companies that trade Bitcoin Futures with expert knowledge and years of experience. These traders have quantitative models, risk-reward ratio calculations and several times even insider knowledge that helps them secure a profit most of the times they trade. Even their losses are capped with the diligent usage of risk management strategies.
Must Read for Loss Making Traders: Risk Management Strategies for Investing in Pre-Sale Crypto
These ETFs charge a small amount of money to manage customer funds, often in the range of 0.1% to 2%.
There are several Bitcoin Futures all over the world and they have been present since October 2021.
Terms Related to Bitcoin Futures ET
Bitcoin
Bitcoin is a cryptocurrency and the first one to solve the double spending problem. Previously, all other cryptocurrencies could be just copied and pasted several times to create multiple yet identical copies. Bitcoin used a unique method called proof of work to make sure that a certain user could only spend their crypto once.
Futures
Futures and Options, together called derivatives, allows users to place intelligent bets on the future price of a certain asset, here Bitcoin. A future trade is composed of two traders who have different and opposing views on the price of Bitcoin at a future date, say 1 month ahead.
ETF
An Exchange Traded Fund or ETF is a share of a trust fund that trades solely in Bitcoin Futures. Whatever proceeds are obtained as a result, are shared between the subscribers of the ETF based on their percentage of ownership.
Margin
Margin is the minimum amount you have to put forward in order to trade a Future contract. For example, if you are trading a 10x Futures contract with a nominal value of $100, you would need a margin of $10.
A Comprehensive Guide To Bitcoin Futures vs. Margin Trading, Spot Markets
Derivative
Futures and Options are collectively called as derivatives because they derive their value from a separate independent financial asset such as stocks, crypto or commodities. For this article, a financial asset refers to Bitcoin, Ethereum or any other cryptocurrency.
Leverage
Leverage is the ratio of the nominal amount of your trade and the margin you put forward. In the above example of Margin, the leverage is 10x since it allows you to trade a contract that has a nominal value of 100 with a margin of $10.
Liquidation/Liquidated
Liquidation, in the scope of this article, is the act of terminating a futures contract because its losses have either exceeded the amount of margin put forward or simply because the exchange cannot settle this trade beyond a certain level. This acts as a safety mechanism and prevents a sell-off or shoot-off in a crypto’s price.
Advantages of Bitcoin Future ETFs
There are several advantages of investing in a Bitcoin Futures ETF.
Your funds are managed by seasoned experts.
The funds are easily invested and redeemed without any lock-in period.
Bitcoin futures ETFs allow investing with leverage which allows investors to reap multi-fold benefits.
ETFs are regulated by government bodies which ensure consumer protection.
The ETFs also benefit from Bitcoin fundamentals such as growing adoption and scarcity introduced due to Bitcoin halving.
Despite their high appeal, Futures Bitcoin ETFs barely hold just 12% of the market share among all Bitcoin ETFs.
Market Share of Spot Bitcoin ETF vs Futures ETF Disadvantages of Bitcoin Future ETFs
The risk factor is higher than spot Bitcoin ETFs due to the use of leverage trading in Bitcoin Futures.
The ETFs are not suited for all investor types, especially the risk averse investors.
A wrong time of entry would mean that you would lose a great portion of your invested money.
Crypto is still a sparsely regulated sector and there are serious regulatory risks with any investment.
Bitcoin’s price often reduced to one-fifth of its cycle high during the bear markets.
Must Read: Crypto Futures Traders: What Are the 8 Common Trading Mistakes to Avoid?
List of Top 16 Bitcoin Futures ETFs
The list below contains all the major Bitcoin Futures ETFs. Some of them help increase your invested capital through Bitcoin Futures while others use a mix of Bitcoin Futures, Options, Ethereum Futures, and several other financial instruments.
Below is a series of 3 charts showing the investment trend in all Bitcoin and Ethereum Future ETFs. There are separate charts for Bitcoin and Ether derivatives along with a combined chart.
Futures ETF Subscription Trends, Bitcoin vs Ether vs Mixed
These ETFs do not directly invest in any Bitcoin, and do not even track the price of spot Bitcoin. Most of these ETFs track Bitcoin price that is provided by the Chicago Mercantile Exchange (CME).
ProShares Bitcoin Strategy ETF
This was the first Bitcoin strategy ETF launched on October 19, 2021 and relies on Bitcoin Future contracts solely.
2x Bitcoin Strategy ETF
This is a leveraged Bitcoin Futures ETF which uses 2x leverage to trade. This feature allows it to increase its profits at twice the pace with the same level of investments.
ProShares Short Bitcoin Strategy ETF (BITI)
The ProShares ETF only invests in bearish derivatives contracts and seeks to make most of its gains in bearish markets and during contra trades in bull markets.
Valkyrie Bitcoin and Ethereum Strategy ETF (BTF)
This ETF dynamically allocates its funds to Bitcoin and Ethereum derivative contracts. The allocation is not fixed and is actively adjusted to reap the full benefits of the prevalent market conditions.
Valkyrie Bitcoin Futures Leveraged Strategy ETF (BTFX)
This ETF like the 2x Bitcoin Strategy ETF uses leveraged trade to make multi-fold returns in Bitcoin Future contracts. Though there is a risk associated with this fund, yet it has been performing well and has given high returns since inception.
GlobalX Blockchain and Bitcoin Strategy ETF (BITS)
This ETF is a hybrid ETF that seeks to invest for both the long term and the short term. For long term investments, it invests in equity of various blockchain companies. However, for short term investments, it relies on Bitcoin derivatives.
The ETF is good for those who seek a balanced approach to investing in crypto.
Simplify Bitcoin Strategy Plus Income ETF (MAXI)
This ETF issued by Simplify invests in Bitcoin futures as well as in debt instruments. The ETF provides dual benefits. When markets are good, the ETF gives a yield which is obtained through Bitcoin Futures and during bad markets, the debt instruments provide a fixed income, making the ETF an all-weather one.
Ark Shares21 Active Bitcoin Futures Strategy ETF (ARKA)
This Ark Shares21 ETF uses dynamic allocation in Bitcoin derivatives to take advantage of prevalent market conditions.
ProShares Ultra Short Bitcoin ETF
This ETF by ProShares purely invests in shorting or bearish opportunities in Bitcoin which helps it profit everytime there is a dip in Bitcoin.
The best time for any trader to invest in this ETF is during the bear cycle in Bitcoin which happens once every 4 years and could last up to a year. The last bear cycle started in November 2021 and lasted till January 2023.
Bitwise Bitcoin Strategy Ultimate Roll ETF (BITC)
The BITC ETF uses money market securities for collateral to invest in the highest yield Bitcoin derivatives contracts.
Bitwise Bitcoin and Ether Equal Weight Strategy ETF (BTOP)
This ETF by Bitwise invests equal amounts in both the future and options contracts of Bitcoin and Ethereum.
ProShares Bitcoin and Ether Market Cap Weight Strategy ETF
This ETF is yet again unique in its approach where it just invests in Bitcoin and Ether derivatives but in the ratio of 11:3 respectively. The ratio of 11:3 represents the domination of Bitcoin(54%) and Ethereum(15%) over the entire crypto market.
The benefit of this ETF is that it lets you bet at almost 70% of the crypto market. The choice of just Bitcoin and Ethereum futures avoids unnecessary volatility which is seen in broader markets.
ProShares Bitcoin and Ether Equal Weight Strategy ETF
This ProShares derivatives ETF invests in both Bitcoin and Ethereum derivative contracts in equal weight, i.e., equal capital allocation.
ARK 21Shares Active Bitcoin Ethereum Strategy ETF (ARKY)
The ETF invests in both Ethereum and Bitcoin Futures and Options contracts. The active tag in its name shows that portfolio allocation is dynamic.
Such ETFs tend to benefit you in highly volatile markets such as one which was seen around the 4th Bitcoin halving.
CyberHornet S&P 500 and Bitcoin 75 / 25 Strategy ETF (ZZZ)
This is a unique hybrid ETF which allocates 25% of its funds to Bitcoin derivatives such as futures and options. The other 75% is allocated to S&P 500 which is one of the stock market indices in the USA.
ARK 21Shares Active On-Chain Bitcoin Strategy ETF (ARKC)
This ARK 21Shares ETF uses on-chain metrics and models to prepare strategies which it then uses to invest in Bitcoin futures and options. On-chain metrics help in identifying real-time usage of Bitcoin and is widely used throughout the world to make informed investments in Bitcoin.
Conclusion
Bitcoin Future ETFs invest in Bitcoin Future contracts to reap greater benefits than ordinary Bitcoin investors. They use leverage trade to reap multifold returns in a very short period.
Suggested Reading: Trading Bitcoin vs. BTC Futures: A Comprehensive Guide
These ETFs often create a win-win situation for retail and institutional traders. Retailers use it to quickly make a good profit while institutions use it for better risk management.
However, these ETFs are also much more riskier than the spot ETFs and could potentially wipe out participant’s capital during a bearish market.
What Are Bitcoin Runes? New Token Standard on the Bitcoin Network
Bitcoin Runes is a token standard that provides much more efficient methods to create new fungible tokens. Created by Casey Rodarmor, it was launched on the 4th Bitcoin halving day and on the 840,000th block.
Runes employ an efficient method of creating new cryptocurrencies from unspent transaction outputs (UTXOs) which till now just went to junk.
The protocol brings great relief to developers, miners, creators and also to the entire ecosystem which has been reeling with the after effects of Bitcoin Halving. The protocol has several advantages over its predecessor and would likely see the same shining fate as of its senior cousin, the Bitcoin Ordinals.
Introduction
Bitcoin Runes is a token standard that guides developers in the creation of new cryptocurrencies. These new cryptocurrencies are created as fungible tokens and can be easily developed with a little knowledge.
The protocol was created by Casey Rodarmor who was also responsible for creating the Bitcoin Ordinals. The Ordinals protocol was key in introducing NFT-like features on the Bitcoin blockchain, something which was much greater than any expectation.
This article explores every aspect of Bitcoin Runes, be it around its benefits, improvements over predecessors, technical information, jargons and also disadvantages. At the end we have also provided a few comments on its sustainability and its future.
Who Created The Runes Protocol
The Runes Protocol was first proposed by Casey Rodarmor, who also created the famous Bitcoin Ordinals in December 2022. Casey’s proposal sought to address the problems of BRC-20 protocol which left a huge amount of junk in the form of unspent transaction outputs or UTXOs. These UTXOs were created as a result of every successful transaction.
In the Bitcoin network, transaction outputs work in a similar way as “gas” in Ethereum but in a slightly different way. Consider that you were buying something worth $4.93 with a $5 bill. Now imagine what would happen if people could only transact with notes and no one accepted coins. Obviously, the 7 cent worth of coins would go to waste.
The Bitcoin UTXOs are small quantities of Bitcoins that are used to pay for transaction fees. They are very similar to the loose 7 cents that no one accepts.
Motive for Creating Bitcoin Runes
The Bitcoin Runes were created primarily as an easy way to create memecoin-like cryptocurrencies. Upon seeing the success of memecoins in Solana (BONK, dogwifhat, and others), he was looking for a way to implement it in the Bitcoin network.
Here is a tweet from the creator himself on why he created Bitcoin Runes.
Runes were built for degens and memecoins, but the protocol is simple, efficient, and secure. It is a legitimate competitor to Taproot Assets and RGB.The protocol is self contained and has no dependencies on ordinals or inscriptions, making it extremely simple.Balances are…
— Casey (@rodarmor) April 1, 2024
Though the BRC-20 protocol existed which creates cryptocurrencies on the Bitcoin network, yet it was a resource intensive method and left a huge signature of UTXOs much like an old car leaves a smoke trail.
Runes were a much simpler way of creating new coins. The protocol does not depend on any other protocol such as BRC-20 or Ordinals and is self-contained which means all its dependencies are already present inside it.
Terms and Definitions Associated with Bitcoin Runes
Struct
A struct or structure in the context of Bitcoin is a set of instructions that guide an activity inside the Bitcoin blockchain.
Runestone
A runestone is a message that is used to send parameters to the Bitcoin network on how the fungible token (Rune) should be created.
A runestone looks in a similar way as below.
“`rust
struct Runestone1 {
edicts: Vec<Edicts>,
etching: Option<Etching>,
mint: Option <RuneID>,
pointer: Option <u32>’
}
“`
Each Runestone is capable of transferring multiple types of fungible tokens within a single output.
Etching
Etching is the process of inscribing a transaction output with a message (runestone) that contains details of the fungible token that is to be created. The message contains details such as name, quantity, symbol, etc.
UTXO
An UTXO is a collection of satoshis (100 Mn Satoshis = 1 Bitcoin) that are used to pay for transaction fees on the Bitcoin network. When a transaction output becomes so small that it cannot be used to pay for network fee, it goes to junk. The Runes protocol is key to manage these junk UTXOs.
Cenotaphs
Those runestones which have some kind of an error are called cenotaphs. These errors may have been introduced due to bad parameters, any network clog or any other random factor.
How Does it Work?
Overview
The Runes Protocol works in a way which is known by the OP_RETURN method.
First, with each transaction, a set of parameters are given to the Bitcoin network. This process is known as etching.
After a successful transaction, these parameters define the output. The parameters contain information as to how the UTXOs will be converted into new fungible tokens. The process is called minting.
The next step involves transferring a rune from a transaction input to output. This process is called an edict.
At the end of the transaction, the user receives fungible tokens on their address.
Let us now break down the steps to understand the process in a much more detailed manner
Etching
Etching is the process of creating a Bitcoin Rune by sending token parameters to a transaction input.
The list of parameters that are sent along with a transaction output are:
Name: The name simply refers to the name of the fungible token to be minted.
Divisibility factor: This is the number of units a rune can be divided into.
Symbol: This refers to the symbol of the new fungible token or tokens.
Premine: It refers to the initial allocation of the runes that are kept for its creator.
Terms: Refers to the rules that are to be followed by users during an open mint.
Cap: It refers to the number of times a rune should be minted.
Amount: This refers to the numeric quantity of the rune to be minted. A single UTXO can mint multiple fungible tokens at once.
Start height: This is the block height where the minting of the rune starts.
End height: This is the block height where the minting of the rune ends.
Edict: These are messages that contain instructions on how a transaction input can be converted into an output.
Minting
Minting refers to the process of converting the unspent transaction outputs(UTXOs) into new fungible tokens. The UTXOs are converted into runes through a function called OP RETURN. This function returns the UTXOs in the form of new fungible tokens.
Transfer
The next step involves transferring a rune from input to output. These transfers are governed by edicts which are messages that are sent to describe the specifications of a rune.
Here is a sample of an edict:
“`rust
struct Edict {
id: RuneID,
amount: u128,
output: u32,
}
“`
Each runestone can create multiple types of fungible tokens with just a single input. This is a great improvement over earlier protocols where only a single type of fungible token was created at one time.
To do that, we just need to define each output with a separate edict.
For example, let’s say we have an UTXO that we wish to convert into fungible tokens. With Runes, we can not only do that but also achieve something that was impossible prior to this. For example, a single UTXO can create 1000 tokens of A type, 20 tokens of B type and 5 tokens of C type.
Bitcoin Runes vs BRC 20s
Bitcoin Runes provide several upgrades over BRC-20 protocol and these upgrades define the difference between the two.
UTXOs are repurposed on Runes whereas they are discarded on the BRC-20 protocol.
The fungible tokens created using Runes protocol can be transferred on Layer-2 solutions like the Lightning Network, whereas BRC-20 tokens cannot be transferred using L2s.
Runes are based on UTXOs whereas BRC-20 tokens are based on Ordinals theory.
Suggested Reading: BRC-20 Tokens: Everything You Need To Know
Bitcoin Runes vs Bitcoin Ordinals
Runes are a protocol that uses UTXOs to create new fungible tokens. On the other hand Ordinals use satoshis to create inscriptions that lead to the creation of non-fungible assets.
What Does Runes Offer to the Bitcoin Ecosystem?
Runes offer a great benefit to the entire Bitcoin network.
Reduces Wastage of UTXOs
First, it reduces the junk that is created by UTXOs. With Runes, these UTXOs can be converted into useful tokens with a simple OP_RETURN method.
More Users and Greater Liquidity
Second, it brings more liquidity to the Bitcoin ecosystem. Due to the bullishness around memecoins, Runes would be able to bring more users and liquidity to the Bitcoin ecosystem. Just like other ecosystems, Runes have capability to drive memecoin rally into the Bitcoin ecosystem. More tokens would attract more users and hence more liquidity.
More Fees to Miners
Third, it brings more fees to the miners. More transactions would definitely generate more fees which would compensate miners in a better way. Further, after the Bitcoin Halving event, miners desperately need more fees to cover operational costs.
Suggested Reading: What is Bitcoin Halving: A Comprehensive Guide
Runes have already generated the traffic that could fulfill the needs of the miners. However, its sustainability is in question. If it goes in the Ordinal way, it would surely compensate Bitcoin miners in a sustainable way.
Advantages over Other Protocols
There are several advantages associated with the launch of the Runes protocol. Some of them are:
Improvement Over BRC-20
The main intention of creating runes was to establish a token minting process that would not be as messy as the BRC-20 protocol which left a huge trail of UTXOs after each transaction.
The Runes protocol on the other hand, managed these UTXOs in a clean way by allowing users to repurpose them as new tokens.
Works Well on Bitcoin Layer-2 Solutions
Runes work well on Layer-2 protocols such as the Lightning Network. However, BRC_20 protocols do not work in Bitcoin L2s.
Simplified Token Minting Process
With the Runes protocol, minting a new token on the Bitcoin blockchain would be at its easiest. This has already begun in great numbers. A few Runes-based tokens are:
Satoshi Nakamoto
The Ticker Elsa
Wanko Manko Runes
Meme Economics
LOBO The Wolf Pup
Are There Any Disadvantages?
Despite all the advantages, there has been an unintended consequence of Bitcoin Ordinals. As a result of their immense popularity, just like Ordinals, Bitcoin Runes too have clogged the Bitcoin blockchain. Despite being an unintended act, this congestion has led to a spike in fees.
Bitcoin Runes Creates Spike in Bitcoin Fees
On April 20th, 2024, the day of launch of the Runes protocol, there was a clog in the Bitcoin network which spiked its fee to $128 per transaction as compared to its usual fee of $5 to $10 per transaction. Although the major reason for the spike was the race to transact on the 840,000th block (the halving block), yet Runes were a major contributor to the spike in the transactions.
What’s Next for Runes?
If the development of Runes continues in the future, we see a thriving ecosystem. Runes have the capability to bring DeFi to the Bitcoin blockchain, something that every Bitcoiners wants in the ecosystem. Though some rudimentary DeFi capabilities exist on Bitcoin, yet the network is far from achieving the feats of Ethereum.
Conclusion
Bitcoin Runes are a new improvement over BRC-20 protocol to create new tokens. The Runes protocol utilizes a new way to create cryptocurrencies with the Unspent Transaction Outputs (UTXOs). This method not only reduces junk UTXOs but also converts them into something useful.
The protocol is expected to bring much relief to the Bitcoin ecosystem in terms of users, miner fees and liquidity. Also, it is expected to bring much greater DeFi capabilities to the Bitcoin ecosystem, something which is much desired. Finally, we expect Runes to have a stable presence in the Bitcoin network so that it not only improves the network’s capabilities but also helps Bitcoin achieve the tag of a true market dominator.
A Guide to Bitcoin Dominance: Its Importance and Is It Declining?
Runes employ an efficient method of creating new cryptocurrencies from unspent transaction outputs (UTXOs) which till now just went to junk.
The protocol brings great relief to developers, miners, creators and also to the entire ecosystem which has been reeling with the after effects of Bitcoin Halving. The protocol has several advantages over its predecessor and would likely see the same shining fate as of its senior cousin, the Bitcoin Ordinals.
Introduction
Bitcoin Runes is a token standard that guides developers in the creation of new cryptocurrencies. These new cryptocurrencies are created as fungible tokens and can be easily developed with a little knowledge.
The protocol was created by Casey Rodarmor who was also responsible for creating the Bitcoin Ordinals. The Ordinals protocol was key in introducing NFT-like features on the Bitcoin blockchain, something which was much greater than any expectation.
This article explores every aspect of Bitcoin Runes, be it around its benefits, improvements over predecessors, technical information, jargons and also disadvantages. At the end we have also provided a few comments on its sustainability and its future.
Who Created The Runes Protocol
The Runes Protocol was first proposed by Casey Rodarmor, who also created the famous Bitcoin Ordinals in December 2022. Casey’s proposal sought to address the problems of BRC-20 protocol which left a huge amount of junk in the form of unspent transaction outputs or UTXOs. These UTXOs were created as a result of every successful transaction.
In the Bitcoin network, transaction outputs work in a similar way as “gas” in Ethereum but in a slightly different way. Consider that you were buying something worth $4.93 with a $5 bill. Now imagine what would happen if people could only transact with notes and no one accepted coins. Obviously, the 7 cent worth of coins would go to waste.
The Bitcoin UTXOs are small quantities of Bitcoins that are used to pay for transaction fees. They are very similar to the loose 7 cents that no one accepts.
Motive for Creating Bitcoin Runes
The Bitcoin Runes were created primarily as an easy way to create memecoin-like cryptocurrencies. Upon seeing the success of memecoins in Solana (BONK, dogwifhat, and others), he was looking for a way to implement it in the Bitcoin network.
Here is a tweet from the creator himself on why he created Bitcoin Runes.
Runes were built for degens and memecoins, but the protocol is simple, efficient, and secure. It is a legitimate competitor to Taproot Assets and RGB.The protocol is self contained and has no dependencies on ordinals or inscriptions, making it extremely simple.Balances are…
— Casey (@rodarmor) April 1, 2024
Though the BRC-20 protocol existed which creates cryptocurrencies on the Bitcoin network, yet it was a resource intensive method and left a huge signature of UTXOs much like an old car leaves a smoke trail.
Runes were a much simpler way of creating new coins. The protocol does not depend on any other protocol such as BRC-20 or Ordinals and is self-contained which means all its dependencies are already present inside it.
Terms and Definitions Associated with Bitcoin Runes
Struct
A struct or structure in the context of Bitcoin is a set of instructions that guide an activity inside the Bitcoin blockchain.
Runestone
A runestone is a message that is used to send parameters to the Bitcoin network on how the fungible token (Rune) should be created.
A runestone looks in a similar way as below.
“`rust
struct Runestone1 {
edicts: Vec<Edicts>,
etching: Option<Etching>,
mint: Option <RuneID>,
pointer: Option <u32>’
}
“`
Each Runestone is capable of transferring multiple types of fungible tokens within a single output.
Etching
Etching is the process of inscribing a transaction output with a message (runestone) that contains details of the fungible token that is to be created. The message contains details such as name, quantity, symbol, etc.
UTXO
An UTXO is a collection of satoshis (100 Mn Satoshis = 1 Bitcoin) that are used to pay for transaction fees on the Bitcoin network. When a transaction output becomes so small that it cannot be used to pay for network fee, it goes to junk. The Runes protocol is key to manage these junk UTXOs.
Cenotaphs
Those runestones which have some kind of an error are called cenotaphs. These errors may have been introduced due to bad parameters, any network clog or any other random factor.
How Does it Work?
Overview
The Runes Protocol works in a way which is known by the OP_RETURN method.
First, with each transaction, a set of parameters are given to the Bitcoin network. This process is known as etching.
After a successful transaction, these parameters define the output. The parameters contain information as to how the UTXOs will be converted into new fungible tokens. The process is called minting.
The next step involves transferring a rune from a transaction input to output. This process is called an edict.
At the end of the transaction, the user receives fungible tokens on their address.
Let us now break down the steps to understand the process in a much more detailed manner
Etching
Etching is the process of creating a Bitcoin Rune by sending token parameters to a transaction input.
The list of parameters that are sent along with a transaction output are:
Name: The name simply refers to the name of the fungible token to be minted.
Divisibility factor: This is the number of units a rune can be divided into.
Symbol: This refers to the symbol of the new fungible token or tokens.
Premine: It refers to the initial allocation of the runes that are kept for its creator.
Terms: Refers to the rules that are to be followed by users during an open mint.
Cap: It refers to the number of times a rune should be minted.
Amount: This refers to the numeric quantity of the rune to be minted. A single UTXO can mint multiple fungible tokens at once.
Start height: This is the block height where the minting of the rune starts.
End height: This is the block height where the minting of the rune ends.
Edict: These are messages that contain instructions on how a transaction input can be converted into an output.
Minting
Minting refers to the process of converting the unspent transaction outputs(UTXOs) into new fungible tokens. The UTXOs are converted into runes through a function called OP RETURN. This function returns the UTXOs in the form of new fungible tokens.
Transfer
The next step involves transferring a rune from input to output. These transfers are governed by edicts which are messages that are sent to describe the specifications of a rune.
Here is a sample of an edict:
“`rust
struct Edict {
id: RuneID,
amount: u128,
output: u32,
}
“`
Each runestone can create multiple types of fungible tokens with just a single input. This is a great improvement over earlier protocols where only a single type of fungible token was created at one time.
To do that, we just need to define each output with a separate edict.
For example, let’s say we have an UTXO that we wish to convert into fungible tokens. With Runes, we can not only do that but also achieve something that was impossible prior to this. For example, a single UTXO can create 1000 tokens of A type, 20 tokens of B type and 5 tokens of C type.
Bitcoin Runes vs BRC 20s
Bitcoin Runes provide several upgrades over BRC-20 protocol and these upgrades define the difference between the two.
UTXOs are repurposed on Runes whereas they are discarded on the BRC-20 protocol.
The fungible tokens created using Runes protocol can be transferred on Layer-2 solutions like the Lightning Network, whereas BRC-20 tokens cannot be transferred using L2s.
Runes are based on UTXOs whereas BRC-20 tokens are based on Ordinals theory.
Suggested Reading: BRC-20 Tokens: Everything You Need To Know
Bitcoin Runes vs Bitcoin Ordinals
Runes are a protocol that uses UTXOs to create new fungible tokens. On the other hand Ordinals use satoshis to create inscriptions that lead to the creation of non-fungible assets.
What Does Runes Offer to the Bitcoin Ecosystem?
Runes offer a great benefit to the entire Bitcoin network.
Reduces Wastage of UTXOs
First, it reduces the junk that is created by UTXOs. With Runes, these UTXOs can be converted into useful tokens with a simple OP_RETURN method.
More Users and Greater Liquidity
Second, it brings more liquidity to the Bitcoin ecosystem. Due to the bullishness around memecoins, Runes would be able to bring more users and liquidity to the Bitcoin ecosystem. Just like other ecosystems, Runes have capability to drive memecoin rally into the Bitcoin ecosystem. More tokens would attract more users and hence more liquidity.
More Fees to Miners
Third, it brings more fees to the miners. More transactions would definitely generate more fees which would compensate miners in a better way. Further, after the Bitcoin Halving event, miners desperately need more fees to cover operational costs.
Suggested Reading: What is Bitcoin Halving: A Comprehensive Guide
Runes have already generated the traffic that could fulfill the needs of the miners. However, its sustainability is in question. If it goes in the Ordinal way, it would surely compensate Bitcoin miners in a sustainable way.
Advantages over Other Protocols
There are several advantages associated with the launch of the Runes protocol. Some of them are:
Improvement Over BRC-20
The main intention of creating runes was to establish a token minting process that would not be as messy as the BRC-20 protocol which left a huge trail of UTXOs after each transaction.
The Runes protocol on the other hand, managed these UTXOs in a clean way by allowing users to repurpose them as new tokens.
Works Well on Bitcoin Layer-2 Solutions
Runes work well on Layer-2 protocols such as the Lightning Network. However, BRC_20 protocols do not work in Bitcoin L2s.
Simplified Token Minting Process
With the Runes protocol, minting a new token on the Bitcoin blockchain would be at its easiest. This has already begun in great numbers. A few Runes-based tokens are:
Satoshi Nakamoto
The Ticker Elsa
Wanko Manko Runes
Meme Economics
LOBO The Wolf Pup
Are There Any Disadvantages?
Despite all the advantages, there has been an unintended consequence of Bitcoin Ordinals. As a result of their immense popularity, just like Ordinals, Bitcoin Runes too have clogged the Bitcoin blockchain. Despite being an unintended act, this congestion has led to a spike in fees.
Bitcoin Runes Creates Spike in Bitcoin Fees
On April 20th, 2024, the day of launch of the Runes protocol, there was a clog in the Bitcoin network which spiked its fee to $128 per transaction as compared to its usual fee of $5 to $10 per transaction. Although the major reason for the spike was the race to transact on the 840,000th block (the halving block), yet Runes were a major contributor to the spike in the transactions.
What’s Next for Runes?
If the development of Runes continues in the future, we see a thriving ecosystem. Runes have the capability to bring DeFi to the Bitcoin blockchain, something that every Bitcoiners wants in the ecosystem. Though some rudimentary DeFi capabilities exist on Bitcoin, yet the network is far from achieving the feats of Ethereum.
Conclusion
Bitcoin Runes are a new improvement over BRC-20 protocol to create new tokens. The Runes protocol utilizes a new way to create cryptocurrencies with the Unspent Transaction Outputs (UTXOs). This method not only reduces junk UTXOs but also converts them into something useful.
The protocol is expected to bring much relief to the Bitcoin ecosystem in terms of users, miner fees and liquidity. Also, it is expected to bring much greater DeFi capabilities to the Bitcoin ecosystem, something which is much desired. Finally, we expect Runes to have a stable presence in the Bitcoin network so that it not only improves the network’s capabilities but also helps Bitcoin achieve the tag of a true market dominator.
A Guide to Bitcoin Dominance: Its Importance and Is It Declining?
What a Potential Ethereum Spot ETF Could Mean for Cryptocurrencies?
It goes without saying that cryptocurrency and digital asset adoption has reached an inflection point. The recent approval of several Bitcoin Spot ETFs in the United States marked a significant milestone for Bitcoin and the entire crypto market as a whole.
Last year, we speculated on the prospect of these approvals and what impact it could have on the markets.
Since the approvals in January, the cryptocurrency markets have entered a raging bull market with increased deliberation among the mainstream media. This week, we see yet another turning point towards widespread adoption with the chatter of the SEC (Securities and Exchange Commission) potentially approving several Ethereum Spot ETFs amidst a political backdrop in the US that is becoming increasingly crypto-friendly.
Even though rumors of the Ethereum Spot ETF have been floating around for months, it wasn’t until this week when real traction grew. The SEC began actively engaging with issuers and national exchanges, mirroring the approach taken prior to the approval of the Bitcoin Spot ETFs. This blog explores what an approval could bring to Ethereum, altcoins and the cryptocurrency sector as a whole over the short term and long term.
If they approve the Ethereum ETF, they are approving the entire industry. This is the last dam to be broken.
— Pomp (@APompliano) May 21, 2024
The SEC’s Stance on Ethereum
The second largest cryptocurrency, Ethereum, has been in the crossfire with the United States’ SEC for years. Ever since Ethereum’s transition from proof of work (PoW) to proof of stake (PoS) in 2022, the SEC under the helm of Gary Gensler has been maneuvering to classify Ethereum as a security rather than a commodity. Shortly after the Merge, Gary Gensler stated that tokens in a PoS consensus system could be considered securities since investors rely on the efforts of others to make a profit.
Classifying Ethereum as a security poses significant drawbacks for the crypto market. Such a designation would subject Ethereum to stringent regulatory requirements, potentially stifling innovation and deterring investment.
The increased compliance costs and legal uncertainties could hinder the development of decentralized applications (dApps) and other blockchain-based technologies built on the Ethereum network.
Furthermore, it might prompt exchanges to delist Ethereum to avoid the complexities of trading securities, reducing its liquidity and accessibility for investors. This regulatory shift could create a ripple effect, impacting the broader crypto ecosystem and slowing the adoption of blockchain technology.
In early 2024, the SEC began investigating Ethereum, issuing subpoenas to U.S. entities connected to the Ethereum Foundation. This move raised questions about whether it is part of a broader effort to classify ether as a security, possibly slashing hopes that the regulator will approve Ethereum Spot ETFs. Until last week, this mounting bearish stance pushed the odds of an Ethereum spot ETF being approved to 10%.
Over the past week, however, the SEC has seemingly done a 180 on their stance on Ethereum. On Monday, news that the SEC had informed exchanges the agency was leaning towards approving Ethereum spot ETFs shook the world of cryptocurrencies.
Possible Impact of an Approval
Price Appreciation
While the decision on the Ethereum Spot ETF’s to be authorized is still pending, it is interesting to speculate on some of the scenarios that could take place. One such is an Ethereum price surge. This scenario has in fact already taken place. Since the news broke, Ethereum’s price rallied a staggering 20% in a single day.
Some on twitter are also of the opinion that the news has not been priced in. Others view the break of structure as an indicator of the start of a longer-term parabolic bull market.
To understand market sentiment and the characteristics that typify a crypto bull and bear market, read this article: Bull and Bear Markets Explained: A Guide to Maximizing Profits in Crypto
The ETH ETF is not priced in.
— Ran Neuner (@cryptomanran) May 21, 2024
#Altcoins $ETHIs #Ethereum on the verge of a parabolic run?-Bounce on the blue line as in 2020-Are we in the yellow zone, as in 2020?So far, everything has been almost identical.The next few months could be life changing if we repeat the structure.Don't mess it up. pic.twitter.com/pGeUezpeMb
— 𝕄𝕠𝕦𝕤𝕥𝕒𝕔ⓗ𝕖 (@el_crypto_prof) May 22, 2024
Even though predicting short term price swings can be difficult, the recent surge in Bitcoin’s price following its ETF approvals may signal similar trends for Ethereum.
An Altcoin Season
An approval of Ethereum Spot ETFs could potentially trigger an altcoin season by significantly boosting investor confidence in the broader cryptocurrency market. Ethereum, as the second largest cryptocurrency by market capitalization, holds a pivotal role in the crypto ecosystem. Its recognition and validation through a spot ETF would likely attract a wave of institutional and retail investment.
This influx of capital could not only drive up the price of Ethereum but also increase interest in other altcoins, as investors look to diversify their portfolios and capitalize on the broader market momentum.
Historically, major developments and positive regulatory news for bluechip cryptocurrencies like Bitcoin and Ethereum have had a cascading effect, lifting the entire market.
Read this article for an introductory guide on what altcoins are and their different types: A Brief Overview of Altcoins: What are Their Types, Pros and Cons
Moreover, an Ethereum Spot ETF approval could pave the way for a broader trend of crypto ETFs gaining regulatory approval. Established protocols like Solana are already being speculated as the next candidates for such recognition.
JUST IN: Ethereum ETF applicants submit amended 19b-4's • VanEck• Fidelity • Franklin • ArkInvest• Grayscale• Invesco Galaxy
— Watcher.Guru (@WatcherGuru) May 21, 2024
A better trade I will argue for is: "BUY SOL/ETH". This may sound absurd and definitely unpopular. Reasons are:1) SOL will be the No.1 next in line if ETH ETF get approved. 2) ETH/BTC did +12% within a week after the BTC approval as people expect ETH ETFs3) Not a crowded trade
— Daniel Yan (@_D_Y_A_N) May 21, 2024
Increased Institutional Adoption
One possible scenario following the approval of an Ethereum Spot ETF is a significant increase in institutional adoption of Ethereum. With a spot ETF, traditional financial institutions such as mutual funds, pension funds, and hedge funds would have a regulated and accessible way to gain exposure to Ethereum without the complexities of directly purchasing and storing the cryptocurrency.
This could lead to a substantial influx of institutional capital into the market, which would not only drive up the price of Ethereum but also enhance its legitimacy as a mainstream investment asset.
We have already seen this play out with the Bitcoin ETFs with large hedge funds accumulating the digital asset at unprecedented rates.
A Process, NOT an Event. The "institutions" have been coming to #Bitcoin since at least 12/2017 when CME futures But the ETFs have really accelerated this. the 5th largest hedge fund Millennium Management is now holding almost $2 Billion of #BTC and they are not alone:… pic.twitter.com/1slcemaYjO
— Mark Moss (@1MarkMoss) May 16, 2024
Easier Accessibility
Ethereum Spot ETFs will significantly enhance accessibility for people interested in investing in cryptocurrencies without having to navigate the complex technicalities of the Web3 ecosystem.
Traditionally, investing in Ethereum requires a basic understanding of setting up crypto wallets, managing private keys, and purchasing the asset via cryptocurrency exchanges—all of which can be challenging for those unfamiliar with this space. With the introduction of Ethereum Spot ETFs, investors can bypass these hurdles.
Read this article for an end-to-end guide on cryptocurrency wallets: Cryptocurrency Wallets: Explained
These ETFs, traded on traditional stock exchanges, offer a familiar and regulated investment vehicle that simplifies the process. This ease of access means that anyone with a brokerage account can gain exposure to Ethereum just as easily as they would with stocks or conventional ETFs.
The availability of Ethereum Spot ETFs will diversify the investor base by attracting people who use legacy investment platforms. By offering a product that fits within the existing framework of traditional finance, Ethereum Spot ETFs open the market to a broader audience, including institutional investors, retirement funds, and everyday individuals who prefer the security and simplicity of regulated financial products.
Closing Thoughts
The prospect of an Ethereum Spot ETF approval stands to significantly shake up the crypto sector, with both short-term and long-term implications. The approval of Ethereum Spot ETFs would mark a pivotal step towards mainstream adoption and integration of cryptocurrencies into the global financial system.
While the decision for approval remains to be seen at the time of this writing, the mere possibility and the precedent set by approved Bitcoin ETFs speak volumes about the progress and maturation of the cryptocurrency industry since its inception 15 years ago.
The journey of digital assets from a niche investment opportunity to a significant component of the financial landscape underscores its transformative potential and the capacity to redefine financial paradigms.
Last year, we speculated on the prospect of these approvals and what impact it could have on the markets.
Since the approvals in January, the cryptocurrency markets have entered a raging bull market with increased deliberation among the mainstream media. This week, we see yet another turning point towards widespread adoption with the chatter of the SEC (Securities and Exchange Commission) potentially approving several Ethereum Spot ETFs amidst a political backdrop in the US that is becoming increasingly crypto-friendly.
Even though rumors of the Ethereum Spot ETF have been floating around for months, it wasn’t until this week when real traction grew. The SEC began actively engaging with issuers and national exchanges, mirroring the approach taken prior to the approval of the Bitcoin Spot ETFs. This blog explores what an approval could bring to Ethereum, altcoins and the cryptocurrency sector as a whole over the short term and long term.
If they approve the Ethereum ETF, they are approving the entire industry. This is the last dam to be broken.
— Pomp (@APompliano) May 21, 2024
The SEC’s Stance on Ethereum
The second largest cryptocurrency, Ethereum, has been in the crossfire with the United States’ SEC for years. Ever since Ethereum’s transition from proof of work (PoW) to proof of stake (PoS) in 2022, the SEC under the helm of Gary Gensler has been maneuvering to classify Ethereum as a security rather than a commodity. Shortly after the Merge, Gary Gensler stated that tokens in a PoS consensus system could be considered securities since investors rely on the efforts of others to make a profit.
Classifying Ethereum as a security poses significant drawbacks for the crypto market. Such a designation would subject Ethereum to stringent regulatory requirements, potentially stifling innovation and deterring investment.
The increased compliance costs and legal uncertainties could hinder the development of decentralized applications (dApps) and other blockchain-based technologies built on the Ethereum network.
Furthermore, it might prompt exchanges to delist Ethereum to avoid the complexities of trading securities, reducing its liquidity and accessibility for investors. This regulatory shift could create a ripple effect, impacting the broader crypto ecosystem and slowing the adoption of blockchain technology.
In early 2024, the SEC began investigating Ethereum, issuing subpoenas to U.S. entities connected to the Ethereum Foundation. This move raised questions about whether it is part of a broader effort to classify ether as a security, possibly slashing hopes that the regulator will approve Ethereum Spot ETFs. Until last week, this mounting bearish stance pushed the odds of an Ethereum spot ETF being approved to 10%.
Over the past week, however, the SEC has seemingly done a 180 on their stance on Ethereum. On Monday, news that the SEC had informed exchanges the agency was leaning towards approving Ethereum spot ETFs shook the world of cryptocurrencies.
Possible Impact of an Approval
Price Appreciation
While the decision on the Ethereum Spot ETF’s to be authorized is still pending, it is interesting to speculate on some of the scenarios that could take place. One such is an Ethereum price surge. This scenario has in fact already taken place. Since the news broke, Ethereum’s price rallied a staggering 20% in a single day.
Some on twitter are also of the opinion that the news has not been priced in. Others view the break of structure as an indicator of the start of a longer-term parabolic bull market.
To understand market sentiment and the characteristics that typify a crypto bull and bear market, read this article: Bull and Bear Markets Explained: A Guide to Maximizing Profits in Crypto
The ETH ETF is not priced in.
— Ran Neuner (@cryptomanran) May 21, 2024
#Altcoins $ETHIs #Ethereum on the verge of a parabolic run?-Bounce on the blue line as in 2020-Are we in the yellow zone, as in 2020?So far, everything has been almost identical.The next few months could be life changing if we repeat the structure.Don't mess it up. pic.twitter.com/pGeUezpeMb
— 𝕄𝕠𝕦𝕤𝕥𝕒𝕔ⓗ𝕖 (@el_crypto_prof) May 22, 2024
Even though predicting short term price swings can be difficult, the recent surge in Bitcoin’s price following its ETF approvals may signal similar trends for Ethereum.
An Altcoin Season
An approval of Ethereum Spot ETFs could potentially trigger an altcoin season by significantly boosting investor confidence in the broader cryptocurrency market. Ethereum, as the second largest cryptocurrency by market capitalization, holds a pivotal role in the crypto ecosystem. Its recognition and validation through a spot ETF would likely attract a wave of institutional and retail investment.
This influx of capital could not only drive up the price of Ethereum but also increase interest in other altcoins, as investors look to diversify their portfolios and capitalize on the broader market momentum.
Historically, major developments and positive regulatory news for bluechip cryptocurrencies like Bitcoin and Ethereum have had a cascading effect, lifting the entire market.
Read this article for an introductory guide on what altcoins are and their different types: A Brief Overview of Altcoins: What are Their Types, Pros and Cons
Moreover, an Ethereum Spot ETF approval could pave the way for a broader trend of crypto ETFs gaining regulatory approval. Established protocols like Solana are already being speculated as the next candidates for such recognition.
JUST IN: Ethereum ETF applicants submit amended 19b-4's • VanEck• Fidelity • Franklin • ArkInvest• Grayscale• Invesco Galaxy
— Watcher.Guru (@WatcherGuru) May 21, 2024
A better trade I will argue for is: "BUY SOL/ETH". This may sound absurd and definitely unpopular. Reasons are:1) SOL will be the No.1 next in line if ETH ETF get approved. 2) ETH/BTC did +12% within a week after the BTC approval as people expect ETH ETFs3) Not a crowded trade
— Daniel Yan (@_D_Y_A_N) May 21, 2024
Increased Institutional Adoption
One possible scenario following the approval of an Ethereum Spot ETF is a significant increase in institutional adoption of Ethereum. With a spot ETF, traditional financial institutions such as mutual funds, pension funds, and hedge funds would have a regulated and accessible way to gain exposure to Ethereum without the complexities of directly purchasing and storing the cryptocurrency.
This could lead to a substantial influx of institutional capital into the market, which would not only drive up the price of Ethereum but also enhance its legitimacy as a mainstream investment asset.
We have already seen this play out with the Bitcoin ETFs with large hedge funds accumulating the digital asset at unprecedented rates.
A Process, NOT an Event. The "institutions" have been coming to #Bitcoin since at least 12/2017 when CME futures But the ETFs have really accelerated this. the 5th largest hedge fund Millennium Management is now holding almost $2 Billion of #BTC and they are not alone:… pic.twitter.com/1slcemaYjO
— Mark Moss (@1MarkMoss) May 16, 2024
Easier Accessibility
Ethereum Spot ETFs will significantly enhance accessibility for people interested in investing in cryptocurrencies without having to navigate the complex technicalities of the Web3 ecosystem.
Traditionally, investing in Ethereum requires a basic understanding of setting up crypto wallets, managing private keys, and purchasing the asset via cryptocurrency exchanges—all of which can be challenging for those unfamiliar with this space. With the introduction of Ethereum Spot ETFs, investors can bypass these hurdles.
Read this article for an end-to-end guide on cryptocurrency wallets: Cryptocurrency Wallets: Explained
These ETFs, traded on traditional stock exchanges, offer a familiar and regulated investment vehicle that simplifies the process. This ease of access means that anyone with a brokerage account can gain exposure to Ethereum just as easily as they would with stocks or conventional ETFs.
The availability of Ethereum Spot ETFs will diversify the investor base by attracting people who use legacy investment platforms. By offering a product that fits within the existing framework of traditional finance, Ethereum Spot ETFs open the market to a broader audience, including institutional investors, retirement funds, and everyday individuals who prefer the security and simplicity of regulated financial products.
Closing Thoughts
The prospect of an Ethereum Spot ETF approval stands to significantly shake up the crypto sector, with both short-term and long-term implications. The approval of Ethereum Spot ETFs would mark a pivotal step towards mainstream adoption and integration of cryptocurrencies into the global financial system.
While the decision for approval remains to be seen at the time of this writing, the mere possibility and the precedent set by approved Bitcoin ETFs speak volumes about the progress and maturation of the cryptocurrency industry since its inception 15 years ago.
The journey of digital assets from a niche investment opportunity to a significant component of the financial landscape underscores its transformative potential and the capacity to redefine financial paradigms.
Factors to Consider While Trading in Perpetual Futures Contracts
Crypto perpetual futures contracts attract traders with the highest profit opportunities but need a careful analysis of critical factors. The major challenges like leverages causing stronger wicks, staking losses, and fluctuating funding trades impact play a vital role in the highly volatile crypto trading.
Expert traders may adopt measures like stop orders based on the market price to explore new profit ventures like liquidity mining or staking. The perpetual futures contracts offer attractive prospects and a detailed analysis for a successful trading experience.
Perpetual futures contracts allow maximum gains, but traders should always consider the risk factors. Risks may include purchasing the altcoins with future threats, stronger wicks fund fluctuating prices, and loss from possible staking.
Leverage enhances wicks, so handle the long-term trade very carefully. Liquidity mining and staking yields are compromised with a perpetual future, lowering long-term profits. The fluctuating funding reduces profits while a bullish market trend. So, perpetual futures have pitfalls like wicks staking loss funding rates issues despite high gains.
What is Crypto Perpetual Futures Contracts?
Crypto perpetual futures contracts are a cryptocurrency derivative with no expiry date. The traders can hold indefinitely as long they maintain the required margins and pay the funding rate. These contraGcts permit continuing hedging and betting on fluctuations in the value of cryptocurrencies without actually owning them.
Perpetual futures bring traders flexibility because they don’t have to roll into a new contract. So, Traders frequently apply the cryptocurrency market as a hedge or speculation tool for potential price swings.
The crypto space witnessed many crypto derivatives, including perpetual futures, future markets, options, and contracts. They work in the form of leverages. The crypto perpetual futures contracts are more flexible and give higher returns than traditional spot trading. Per centralized exchange information, cryptocurrency derivatives trading rose to $3.12 trillion by July 2022.
Crypto Futures vs. Traditional Futures – A Detailed and Comparative Analysis.
Factors to Consider While Trading in Crypto Perpetual Futures Contracts
Cryptocurrency investors should consider the following factors in Crypto Futures Contracts
Use Market Analysis Tools
As a trader, you must be well aware of marketing analysis tools, including chart patterns, technical indicators, or support/resistance level. The knowledge of these tools will enhance your insight to analyse profitable trading business. You can take benefits by applying these techniques and took long or short position based upon market trends.
Set Stop Loss orders
You can also avoid the majority or the entire capital loss by applying stop loss order if the price of the asset moves adversely. The stop loss strategy ensures that the particular asset trade will be automatically closed if its price reaches the particular point. However you must also be very vigilant while the price movement is in a favorable direction to take benefit. This technique is known as a discipline money management.
Be Cautious About Funding Rates Fluctuations
Perpetual contracts embed a rate that is always charged every eight hours. These are also called inverse swaps. There can be no risk imbalances between buyers and sellers for exchange through funding rates. Although the interests of both buyers and sellers open matches at all times, leverage is subject to variation.
Crypto Futures Traders: What Are the 8 Common Trading Mistakes to Avoid?
The funding rate increases when the buyers long ask for greater leverage. Consequently, the fees will be covered by those buyers. This problem is particularly prevalent during bull run periods when there is typically a greater demand for longs.
ETHUSDT is an ETH/USDT perpetual futures contract priced on the BETHT Index. Each contract has a value equal to its price in Tether. The funding cost is paid and received every 8 hours. ETHUSDT uses a Premium index to calculate funding rates.
The chart shows that the ETH USDT market made a bullish trend on November 10, 2023, raising its value to $2,118. After that, the market showed a slightly bearish trend and declined to $1,924 on November 17, 2023.
However, it should be noted that some exchanges will allow manual selection of rates and set borrowing periods by users. This attitude is far better since unpleasant surprises are presented in this case, which will certainly occur after a large-scale buying activity.
Although perpetual futures trading is an excellent tool, it has shortcomings. Among those are stronger wicks running stop losses, inability to do staking, and the variable funding rate.
Leverage Results in More Powerful Wicks
The leverage will only lead to stronger wicks regardless of the market’s liquidity. Even though these moves usually do not result in a forced liquidation, they might run investors’ stops.
Thus, the principal reason why carrying futures positions for extended periods should be shunned is the probability of errant wicks.
Learn all about perpetual futures contracts in the cryptocurrency market, from their mechanics to trading strategies, with this comprehensive article.
Futures liquidation engines use price indexes from several spot (regular) exchanges to avoid price manipulation. So, the system will close positions with insufficient margin only once an index reaches its stops.
We have pasted screenshots of the two major crypto exchanges, Binance and Coinbase. You have noticed that at the same moment, Binance is showing a BTC price of $69,852, which is lower than the price of the same asset at Coinbase is $70,244. Although the change is small, it can cause traders to close trades.
Understand how liquidity pools are transforming the crypto futures market and their impact on your trading strategies with this comprehensive article.
Traders also have options to avoid such issues. They can change the trigger of stop orders from the last price to the Mark Price (Index). This simple strategy can save traders from liquidation, provided perpetual futures contracts separate monetarily from their index.
One very positive trend in market structure is that the percentage of Bitcoin futures contracts collateralized with BTC/crypto has been on a perpetual decline for almost 3 years now, from 70% to just 25% today. Why is this relevant and why should you care?When you're long BTC… pic.twitter.com/yZybMALZtj
— Will (@WClementeIII) November 13, 2023
Conclusion
So that’s it! If you’ve read the following sections, you should be familiar with what a perpetual futures contracts in crypto is and how to start perpetual contracts trading yourself with the help of one of the leading crypto exchanges on the market.
Learn the strategies and intricacies of perpetual swap contracts trading to enhance your 2024 investment tactics with this comprehensive article.
But, of course, being that this is such a broad subject, there are many things that we need more time to touch on, such as the question of whether perpetual futures contracts are enforceable, the funding fees mentioned above, and so on. Either way, you have a solid foundation for expanding your perpetual futures contract trading knowledge further.
Expert traders may adopt measures like stop orders based on the market price to explore new profit ventures like liquidity mining or staking. The perpetual futures contracts offer attractive prospects and a detailed analysis for a successful trading experience.
Perpetual futures contracts allow maximum gains, but traders should always consider the risk factors. Risks may include purchasing the altcoins with future threats, stronger wicks fund fluctuating prices, and loss from possible staking.
Leverage enhances wicks, so handle the long-term trade very carefully. Liquidity mining and staking yields are compromised with a perpetual future, lowering long-term profits. The fluctuating funding reduces profits while a bullish market trend. So, perpetual futures have pitfalls like wicks staking loss funding rates issues despite high gains.
What is Crypto Perpetual Futures Contracts?
Crypto perpetual futures contracts are a cryptocurrency derivative with no expiry date. The traders can hold indefinitely as long they maintain the required margins and pay the funding rate. These contraGcts permit continuing hedging and betting on fluctuations in the value of cryptocurrencies without actually owning them.
Perpetual futures bring traders flexibility because they don’t have to roll into a new contract. So, Traders frequently apply the cryptocurrency market as a hedge or speculation tool for potential price swings.
The crypto space witnessed many crypto derivatives, including perpetual futures, future markets, options, and contracts. They work in the form of leverages. The crypto perpetual futures contracts are more flexible and give higher returns than traditional spot trading. Per centralized exchange information, cryptocurrency derivatives trading rose to $3.12 trillion by July 2022.
Crypto Futures vs. Traditional Futures – A Detailed and Comparative Analysis.
Factors to Consider While Trading in Crypto Perpetual Futures Contracts
Cryptocurrency investors should consider the following factors in Crypto Futures Contracts
Use Market Analysis Tools
As a trader, you must be well aware of marketing analysis tools, including chart patterns, technical indicators, or support/resistance level. The knowledge of these tools will enhance your insight to analyse profitable trading business. You can take benefits by applying these techniques and took long or short position based upon market trends.
Set Stop Loss orders
You can also avoid the majority or the entire capital loss by applying stop loss order if the price of the asset moves adversely. The stop loss strategy ensures that the particular asset trade will be automatically closed if its price reaches the particular point. However you must also be very vigilant while the price movement is in a favorable direction to take benefit. This technique is known as a discipline money management.
Be Cautious About Funding Rates Fluctuations
Perpetual contracts embed a rate that is always charged every eight hours. These are also called inverse swaps. There can be no risk imbalances between buyers and sellers for exchange through funding rates. Although the interests of both buyers and sellers open matches at all times, leverage is subject to variation.
Crypto Futures Traders: What Are the 8 Common Trading Mistakes to Avoid?
The funding rate increases when the buyers long ask for greater leverage. Consequently, the fees will be covered by those buyers. This problem is particularly prevalent during bull run periods when there is typically a greater demand for longs.
ETHUSDT is an ETH/USDT perpetual futures contract priced on the BETHT Index. Each contract has a value equal to its price in Tether. The funding cost is paid and received every 8 hours. ETHUSDT uses a Premium index to calculate funding rates.
The chart shows that the ETH USDT market made a bullish trend on November 10, 2023, raising its value to $2,118. After that, the market showed a slightly bearish trend and declined to $1,924 on November 17, 2023.
However, it should be noted that some exchanges will allow manual selection of rates and set borrowing periods by users. This attitude is far better since unpleasant surprises are presented in this case, which will certainly occur after a large-scale buying activity.
Although perpetual futures trading is an excellent tool, it has shortcomings. Among those are stronger wicks running stop losses, inability to do staking, and the variable funding rate.
Leverage Results in More Powerful Wicks
The leverage will only lead to stronger wicks regardless of the market’s liquidity. Even though these moves usually do not result in a forced liquidation, they might run investors’ stops.
Thus, the principal reason why carrying futures positions for extended periods should be shunned is the probability of errant wicks.
Learn all about perpetual futures contracts in the cryptocurrency market, from their mechanics to trading strategies, with this comprehensive article.
Futures liquidation engines use price indexes from several spot (regular) exchanges to avoid price manipulation. So, the system will close positions with insufficient margin only once an index reaches its stops.
We have pasted screenshots of the two major crypto exchanges, Binance and Coinbase. You have noticed that at the same moment, Binance is showing a BTC price of $69,852, which is lower than the price of the same asset at Coinbase is $70,244. Although the change is small, it can cause traders to close trades.
Understand how liquidity pools are transforming the crypto futures market and their impact on your trading strategies with this comprehensive article.
Traders also have options to avoid such issues. They can change the trigger of stop orders from the last price to the Mark Price (Index). This simple strategy can save traders from liquidation, provided perpetual futures contracts separate monetarily from their index.
One very positive trend in market structure is that the percentage of Bitcoin futures contracts collateralized with BTC/crypto has been on a perpetual decline for almost 3 years now, from 70% to just 25% today. Why is this relevant and why should you care?When you're long BTC… pic.twitter.com/yZybMALZtj
— Will (@WClementeIII) November 13, 2023
Conclusion
So that’s it! If you’ve read the following sections, you should be familiar with what a perpetual futures contracts in crypto is and how to start perpetual contracts trading yourself with the help of one of the leading crypto exchanges on the market.
Learn the strategies and intricacies of perpetual swap contracts trading to enhance your 2024 investment tactics with this comprehensive article.
But, of course, being that this is such a broad subject, there are many things that we need more time to touch on, such as the question of whether perpetual futures contracts are enforceable, the funding fees mentioned above, and so on. Either way, you have a solid foundation for expanding your perpetual futures contract trading knowledge further.
Krypcore Web3 Now Available in the Microsoft Azure Marketplace
Microsoft Azure customers worldwide now gain access to KrypC’s flagship product, Krypcore Web3, to take advantage of the scalability, reliability, and agility of Azure to drive application development and shape business strategies.
New Jersey, USA — May 21, 2024 — KrypC, a leading blockchain and Web3 company, today announced the availability of its flagship product Krypcore Web3 in the Microsoft Azure Marketplace, an online store providing applications and services for use on Azure. KrypC’s customers can now take advantage of the scalability, high availability, and security of Azure, with streamlined deployment and management.
Krypcore Web3 is an enterprise-grade middleware platform that provides robust Web 3.0 infrastructure, powerful APIs, a unified SDK, and many pre-built tools for creating and deploying Web3 applications on various blockchain protocols. To simplify the blockchain adoption journey, Krypcore Web3 provides certain unique and enterprise-friendly features such as gasless transactions, datalake, distributed storage, wallet-as-a-service, NFT studio, and smart contract studio. This comprehensive suite enables enterprises to use blockchain technology to create innovative business solutions across sectors such as supply chains, media & entertainment, finance, healthcare, and more.
The availability of Krypcore Web3 in the Microsoft Azure Marketplace allows us to offer the benefits of Krypcore to a wider range of organizations across the globe. By subscribing to Krypcore Web3 in the Azure Marketplace, enterprises and leading developers can quickly leap forward in their Web3 and blockchain innovation journey backed by Azure’s trusted cloud platform.
Said Dave Sasson, Chief Business Officer of KrypC.
Through Krypcore we aim to simplify and accelerate Web3 adoption, providing developers and enterprises with the tools necessary to leverage the advantages the Web 3.0 ecosystem provides.
Said Mohit Sethi, head of Research and Technology at KrypC.
Microsoft Azure Marketplace welcomes Krypcore Web3, which joins a cloud marketplace landscape predicted to grow revenue 500% from 2022 to 2025.
Said Jake Zborowski, General Manager, Microsoft Azure Platform at Microsoft Corp.
Thanks to Azure Marketplace and partners like KrypC, customers can do more with less by increasing efficiency, buying confidently, and spending smarter.
The Azure Marketplace is an online market for buying and selling cloud solutions certified to run on Azure. The Azure Marketplace helps connect companies seeking innovative, cloud-based solutions with partners who have developed solutions that are ready to use.
Learn more about Krypcore Web3 and get it now by visiting its page on the Azure Marketplace.
About KrypC
KrypC Technologies, a pioneering venture in blockchain technology, was founded by seasoned cryptography and enterprise tech professionals with a vision to establish a global blockchain powerhouse that empowers enterprises and startups by harnessing blockchain technology to build innovative distributed ledger solutions. Since its inception in 2016, KrypC has continuously invested time and resources into developing cutting-edge technology assets, facilitating faster and easier blockchain adoption. Headquartered in the USA, KrypC operates across multiple locations including the US, Netherlands, India, and the UAE.
For more information, please visit www.krypcore.com and follow us on LinkedIn.
New Jersey, USA — May 21, 2024 — KrypC, a leading blockchain and Web3 company, today announced the availability of its flagship product Krypcore Web3 in the Microsoft Azure Marketplace, an online store providing applications and services for use on Azure. KrypC’s customers can now take advantage of the scalability, high availability, and security of Azure, with streamlined deployment and management.
Krypcore Web3 is an enterprise-grade middleware platform that provides robust Web 3.0 infrastructure, powerful APIs, a unified SDK, and many pre-built tools for creating and deploying Web3 applications on various blockchain protocols. To simplify the blockchain adoption journey, Krypcore Web3 provides certain unique and enterprise-friendly features such as gasless transactions, datalake, distributed storage, wallet-as-a-service, NFT studio, and smart contract studio. This comprehensive suite enables enterprises to use blockchain technology to create innovative business solutions across sectors such as supply chains, media & entertainment, finance, healthcare, and more.
The availability of Krypcore Web3 in the Microsoft Azure Marketplace allows us to offer the benefits of Krypcore to a wider range of organizations across the globe. By subscribing to Krypcore Web3 in the Azure Marketplace, enterprises and leading developers can quickly leap forward in their Web3 and blockchain innovation journey backed by Azure’s trusted cloud platform.
Said Dave Sasson, Chief Business Officer of KrypC.
Through Krypcore we aim to simplify and accelerate Web3 adoption, providing developers and enterprises with the tools necessary to leverage the advantages the Web 3.0 ecosystem provides.
Said Mohit Sethi, head of Research and Technology at KrypC.
Microsoft Azure Marketplace welcomes Krypcore Web3, which joins a cloud marketplace landscape predicted to grow revenue 500% from 2022 to 2025.
Said Jake Zborowski, General Manager, Microsoft Azure Platform at Microsoft Corp.
Thanks to Azure Marketplace and partners like KrypC, customers can do more with less by increasing efficiency, buying confidently, and spending smarter.
The Azure Marketplace is an online market for buying and selling cloud solutions certified to run on Azure. The Azure Marketplace helps connect companies seeking innovative, cloud-based solutions with partners who have developed solutions that are ready to use.
Learn more about Krypcore Web3 and get it now by visiting its page on the Azure Marketplace.
About KrypC
KrypC Technologies, a pioneering venture in blockchain technology, was founded by seasoned cryptography and enterprise tech professionals with a vision to establish a global blockchain powerhouse that empowers enterprises and startups by harnessing blockchain technology to build innovative distributed ledger solutions. Since its inception in 2016, KrypC has continuously invested time and resources into developing cutting-edge technology assets, facilitating faster and easier blockchain adoption. Headquartered in the USA, KrypC operates across multiple locations including the US, Netherlands, India, and the UAE.
For more information, please visit www.krypcore.com and follow us on LinkedIn.
4 SocialFi Innovations Propelling the Future of Social Media
SocialFi, a trailblazer of Social Finance, is Web3’s answer to Web2’s social media platforms by restoring ownership to users and content creators, directly offering more lucrative monetization possibilities by removing expensive intermediaries. This natural evolution of DeFi and social media champions the hallmark values of decentralization such as privacy, security, censorship, and data ownership, promoting a fairer form of monetization where creators keep the lion’s share of the value they produce.
SocialFi innovations are marking a departure from conventional social networking paradigms by introducing a decentralized, self-governed and community-driven environment for users to interact with each other, share content and earn rewards. SocialFi innovations are opening up new opportunities for businesses and entrepreneurs along with decentralized collaboration spaces that reward users for their contributions and allow them to monetize their content while keeping more of their earnings.
According to dAppRadar’s 2023 Dapp Industry Report, there has been an impressive increase in the social sector in 2023 with the daily count of Unique Active Wallets (UAW) exceeding 250,000. Compared to 2022, there was a substantial growth of 518%, which underlines the importance of decentralized social media.
In this article, we will explore some of the most exciting SocialFi innovations that are driving the growth and adoption of this space.
Quick Overview of How SocialFi Functions
Unlike traditional social media platforms controlled by massive centralized parties, SocialFi uses Decentralized Autonomous Organizations (DAOs) to make decisions–ensuring no single entity controls the platform while maintaining users’ say in how it operates. With the help of DAOs, developers and the platform’s team are prevented from making unilateral changes to the code fostering trust and transparency.
The economy within these SocialFi innovations is fueled by decentralized tokens tokens used for various purposes like tipping creators or participating in governance voting to determine the direction in which the platform evolves.
On some of these platforms, creators can even launch their own tokens to directly monetize their influence and content.
How?
Since users control their wallets and tokens, they can choose which creators to engage with and want to support by holding the creator’s token to participate.
Turn influence into income with #SuperDapp! Engage and grow your greatest asset —your community, with Super Groups, leveraging your social power into tangible benefits! Learn more about the monetization opportunities of #SocialFi at https://t.co/lvwtxU1pNL pic.twitter.com/1z8jjGojSA
— SuperDapp (@SuperDappAI) May 1, 2024
SuperDapp allows you to monetize your social media influence through “Super Groups.”
Digital ownership is facilitated through features like a profile picture (PFP) NFTs for identity and other NFTs to track content ownership, allowing for the monetization of content, including posts, videos, and more.
Decentralized SocialFi models allow for incentivized engagement and affiliate programs, with users controlling their wallets and tokens, choosing which creators to support by holding the creator’s token.
SocialFi Innovations: A Look at Emerging Trends
Messari’s Crypto Theses 2024 Report discusses socialFi innovations as part of the three new “De’s” of decentralized innovations, including DeSoc which is short for Decentralized Social Media. DeSoc relieves creator woes of traditional social platforms that take a hefty cut from revenue generated through advertising or sponsored content.
Moreover, with SocialFi platforms like SuperDapp, content remains unalterable, ensuring users can share information without fear of being censored.
DroomDroom’s article discusses how decentralized social media platforms like SuperDapp are emerging as an alternative to traditional social media.
Overview of decentralized social networks by Messari
Clearly, it is a rapidly evolving field with new socialFi innovations and use cases on the brink of it. Here, we explore some of the most interesting innovations that are pushing the boundaries of what’s possible.
Combating Fake Content & Fraud
Many SocialFi platforms grapple with the challenge of fraudulent activity aimed at manipulating reward systems. The research paper titled, “Blockchain-based Reputation Evaluation Using Game Theory in Social Networking”, proposes a novel approach for evaluating reputation on social media platforms that leverages blockchain technology and game theory to tackle the issue of ‘ghost commentators’.
SocialFi innovations include developing advanced anti-fraud algorithms to detect and prevent such behavior. These algorithms can analyze user engagement patterns and identify suspicious activity that might indicate attempts to inflate rewards through inauthentic means such as bots.
The AI-infused SocialFi platform SuperDapp prioritizes security by offering features like encrypted communication and secure storage. Additionally, AiDA, SuperDapp’s AI assistant has the potential to further enhance users’ experiences by filtering out abusive or spammy behavior.
“At the heart of our innovative pursuit, we recognize that the true strength of blockchain lies not just in securing transactions but in building trust and transparency across digital communities. By integrating artificial intelligence, we are setting new standards for integrity and user experience in the SocialFi ecosystem.”
Jagdeep Sidhu, SYS Labs CEO
Read this article by DroomDroom to understand how Artificial Intelligence (AI) assistant named AIDA is being used by SuperDapp to make interacting with dApps easier and more intuitive.
Decentralized Social Graphs and Interoperability
A core tenet of SocialFi is the concept of user ownership and control over data.
Decentralized social graph protocols are merging to address this need and they’ve become existential for free and open speech as highlighted by The necessity of this has also been reflected in mainstream Web2 platforms, particularly demonstrated by Elon Musk’s Twitter acquisition and the potential for “coordinated advertiser boycotts.
On the Web3 side, these protocols leverage blockchain technology to store user data, such as profiles, posts and follower lists. Ultimately, users can control who can access their information, providing them with the freedom to move their social graph– their network of connections–across different SocialFi applications built on compatible protocols.
Account abstraction is another innovation facilitating interoperability across blockchains by simplifying the onboarding process for new users by eliminating the need to manage multiple private keys for different chains. This reduces the barrier to entry for users unfamiliar with the complexities of blockchain technology.
Features like portable social graphs are moving beyond being exceptional perks, and quickly becoming the standard a more informed generation of users have come to expect.
Rebalancing Power and Profits
Traditional social media platforms often generate substantial revenue from user data while users themselves see little to no financial benefit from their contributions. This is because legacy, centralized platforms have relied on the well established norm of, “If you are not paying for the product, then are the product.”
A cursory look at the market cap of major social media company’s market caps will show just how valuable that data, which users have given freely, has turned out to be. By enshrining each user’s right to ownership and privacy, SocialFi requires an entirely different model to both incentivize user participation and ensure its own sustainability.
This necessity is fulfilled by utility tokens, or “cryptocurrencies with actual purpose”, the purpose in this instance being the lifeblood of a self-sustaining ecosystem or economy.
In the case of SuperDapp, its economy is supported by its utility token, SUPR. Aside from being a simple payment method, SUPR also supports widely used DeFi applications such as staking, or locking the token as collateral in order to contribute to the platform’s liquidity and economic stability, earning rewards in the process.
This is similar to how a savings account at an old-fashioned bank works, even including an APR (annual percentage rate) and APY (annual percentage yield) that automatically adjusts so potential stakers can always make an informed decision.
Aside from payments and staking, as previously mentioned, SUPR ownership also entitles users to directly participate in SuperDapp’s governance by voting on policies and features they believe are in the best interest of the platform.
Watch-to-Earn and Fan Engagement
A growing trend in SocialFi is the concept of Watch-to-Earn wherein the platforms reward users with crypto tokens for actively engaging with content such as watching videos or interacting with creators.
Brave Browser, and its token, BAT, is a Web3 pioneer of this basic concept. BAT stands for “Basic Attention Token”, aptly named for a token intended to attach a monetary value to how internet users spend their time or to what they give their attention.
Some Watch-to-Earn platforms allow creators to issue their own tokens, which fans can earn by engaging with the creator. These creator tokens can offer various benefits such as governance rights over the creator’s content or access to exclusive perks as determined by their issuer, the creator.
In order to avoid a proliferation of meaningless tokens, think of them as “sub-tokens” to SUPR. The total value of a sub-tokens’ supply can only be as valuable as the amount of SUPR that has been locked to mint them.
So what happens if a creator whose token you hold has done something you dislike and you no longer wish to support them? It’s simple, once the lock period of the SUPR you exchanged for the creator’s token expires, cash out and switch back to SUPR.
If the creator offended more than just you, causing their popularity to decrease, then you’ll get less SUPR in return. Vice versa, if the creator has grown in popularity and support, then you’ll receive more SUPR back than you initially put in.
Super Groups, a feature that allows users to connect and monetize content. Empowering the Future: The Impact of SocialFi
SocialFi represents a transformative shift from the centralized, profit-driven models of traditional social media to a decentralized, user-centric ecosystem. By placing ownership and control back into the hands of users, SocialFi platforms like SuperDapp are not just challenging the status quo – they are paving the way for a more equitable and engaging digital future.
The innovations driving SocialFi—from combating fake content and fraud to fostering interoperable social graphs and rewarding active participation—are laying the foundation for this new paradigm. These advancements ensure that users can interact in a secure, transparent, and rewarding environment, free from the constraints and exploitative practices of legacy systems.
Platforms like SuperDapp exemplify the potential of SocialFi innovations with its comprehensive suite of features, including AI-powered moderation, decentralized governance, community-building features like Super Groups and incentivized engagement through mechanisms like Watch-to-Earn and creator tokens.
By integrating these cutting-edge technologies, SuperDapp is not just enhancing user experience but also building a thriving community where users can truly benefit from their contributions.
As we look to the future, SocialFi innovations stand at the forefront of digital innovation, offering a glimpse into a world where online interaction is not only more secure and private but also more rewarding and community-driven. The journey of SocialFi innovations has only just begun, and with platforms like SuperDapp leading the way, the possibilities for growth and positive change are boundless.
SocialFi innovations are marking a departure from conventional social networking paradigms by introducing a decentralized, self-governed and community-driven environment for users to interact with each other, share content and earn rewards. SocialFi innovations are opening up new opportunities for businesses and entrepreneurs along with decentralized collaboration spaces that reward users for their contributions and allow them to monetize their content while keeping more of their earnings.
According to dAppRadar’s 2023 Dapp Industry Report, there has been an impressive increase in the social sector in 2023 with the daily count of Unique Active Wallets (UAW) exceeding 250,000. Compared to 2022, there was a substantial growth of 518%, which underlines the importance of decentralized social media.
In this article, we will explore some of the most exciting SocialFi innovations that are driving the growth and adoption of this space.
Quick Overview of How SocialFi Functions
Unlike traditional social media platforms controlled by massive centralized parties, SocialFi uses Decentralized Autonomous Organizations (DAOs) to make decisions–ensuring no single entity controls the platform while maintaining users’ say in how it operates. With the help of DAOs, developers and the platform’s team are prevented from making unilateral changes to the code fostering trust and transparency.
The economy within these SocialFi innovations is fueled by decentralized tokens tokens used for various purposes like tipping creators or participating in governance voting to determine the direction in which the platform evolves.
On some of these platforms, creators can even launch their own tokens to directly monetize their influence and content.
How?
Since users control their wallets and tokens, they can choose which creators to engage with and want to support by holding the creator’s token to participate.
Turn influence into income with #SuperDapp! Engage and grow your greatest asset —your community, with Super Groups, leveraging your social power into tangible benefits! Learn more about the monetization opportunities of #SocialFi at https://t.co/lvwtxU1pNL pic.twitter.com/1z8jjGojSA
— SuperDapp (@SuperDappAI) May 1, 2024
SuperDapp allows you to monetize your social media influence through “Super Groups.”
Digital ownership is facilitated through features like a profile picture (PFP) NFTs for identity and other NFTs to track content ownership, allowing for the monetization of content, including posts, videos, and more.
Decentralized SocialFi models allow for incentivized engagement and affiliate programs, with users controlling their wallets and tokens, choosing which creators to support by holding the creator’s token.
SocialFi Innovations: A Look at Emerging Trends
Messari’s Crypto Theses 2024 Report discusses socialFi innovations as part of the three new “De’s” of decentralized innovations, including DeSoc which is short for Decentralized Social Media. DeSoc relieves creator woes of traditional social platforms that take a hefty cut from revenue generated through advertising or sponsored content.
Moreover, with SocialFi platforms like SuperDapp, content remains unalterable, ensuring users can share information without fear of being censored.
DroomDroom’s article discusses how decentralized social media platforms like SuperDapp are emerging as an alternative to traditional social media.
Overview of decentralized social networks by Messari
Clearly, it is a rapidly evolving field with new socialFi innovations and use cases on the brink of it. Here, we explore some of the most interesting innovations that are pushing the boundaries of what’s possible.
Combating Fake Content & Fraud
Many SocialFi platforms grapple with the challenge of fraudulent activity aimed at manipulating reward systems. The research paper titled, “Blockchain-based Reputation Evaluation Using Game Theory in Social Networking”, proposes a novel approach for evaluating reputation on social media platforms that leverages blockchain technology and game theory to tackle the issue of ‘ghost commentators’.
SocialFi innovations include developing advanced anti-fraud algorithms to detect and prevent such behavior. These algorithms can analyze user engagement patterns and identify suspicious activity that might indicate attempts to inflate rewards through inauthentic means such as bots.
The AI-infused SocialFi platform SuperDapp prioritizes security by offering features like encrypted communication and secure storage. Additionally, AiDA, SuperDapp’s AI assistant has the potential to further enhance users’ experiences by filtering out abusive or spammy behavior.
“At the heart of our innovative pursuit, we recognize that the true strength of blockchain lies not just in securing transactions but in building trust and transparency across digital communities. By integrating artificial intelligence, we are setting new standards for integrity and user experience in the SocialFi ecosystem.”
Jagdeep Sidhu, SYS Labs CEO
Read this article by DroomDroom to understand how Artificial Intelligence (AI) assistant named AIDA is being used by SuperDapp to make interacting with dApps easier and more intuitive.
Decentralized Social Graphs and Interoperability
A core tenet of SocialFi is the concept of user ownership and control over data.
Decentralized social graph protocols are merging to address this need and they’ve become existential for free and open speech as highlighted by The necessity of this has also been reflected in mainstream Web2 platforms, particularly demonstrated by Elon Musk’s Twitter acquisition and the potential for “coordinated advertiser boycotts.
On the Web3 side, these protocols leverage blockchain technology to store user data, such as profiles, posts and follower lists. Ultimately, users can control who can access their information, providing them with the freedom to move their social graph– their network of connections–across different SocialFi applications built on compatible protocols.
Account abstraction is another innovation facilitating interoperability across blockchains by simplifying the onboarding process for new users by eliminating the need to manage multiple private keys for different chains. This reduces the barrier to entry for users unfamiliar with the complexities of blockchain technology.
Features like portable social graphs are moving beyond being exceptional perks, and quickly becoming the standard a more informed generation of users have come to expect.
Rebalancing Power and Profits
Traditional social media platforms often generate substantial revenue from user data while users themselves see little to no financial benefit from their contributions. This is because legacy, centralized platforms have relied on the well established norm of, “If you are not paying for the product, then are the product.”
A cursory look at the market cap of major social media company’s market caps will show just how valuable that data, which users have given freely, has turned out to be. By enshrining each user’s right to ownership and privacy, SocialFi requires an entirely different model to both incentivize user participation and ensure its own sustainability.
This necessity is fulfilled by utility tokens, or “cryptocurrencies with actual purpose”, the purpose in this instance being the lifeblood of a self-sustaining ecosystem or economy.
In the case of SuperDapp, its economy is supported by its utility token, SUPR. Aside from being a simple payment method, SUPR also supports widely used DeFi applications such as staking, or locking the token as collateral in order to contribute to the platform’s liquidity and economic stability, earning rewards in the process.
This is similar to how a savings account at an old-fashioned bank works, even including an APR (annual percentage rate) and APY (annual percentage yield) that automatically adjusts so potential stakers can always make an informed decision.
Aside from payments and staking, as previously mentioned, SUPR ownership also entitles users to directly participate in SuperDapp’s governance by voting on policies and features they believe are in the best interest of the platform.
Watch-to-Earn and Fan Engagement
A growing trend in SocialFi is the concept of Watch-to-Earn wherein the platforms reward users with crypto tokens for actively engaging with content such as watching videos or interacting with creators.
Brave Browser, and its token, BAT, is a Web3 pioneer of this basic concept. BAT stands for “Basic Attention Token”, aptly named for a token intended to attach a monetary value to how internet users spend their time or to what they give their attention.
Some Watch-to-Earn platforms allow creators to issue their own tokens, which fans can earn by engaging with the creator. These creator tokens can offer various benefits such as governance rights over the creator’s content or access to exclusive perks as determined by their issuer, the creator.
In order to avoid a proliferation of meaningless tokens, think of them as “sub-tokens” to SUPR. The total value of a sub-tokens’ supply can only be as valuable as the amount of SUPR that has been locked to mint them.
So what happens if a creator whose token you hold has done something you dislike and you no longer wish to support them? It’s simple, once the lock period of the SUPR you exchanged for the creator’s token expires, cash out and switch back to SUPR.
If the creator offended more than just you, causing their popularity to decrease, then you’ll get less SUPR in return. Vice versa, if the creator has grown in popularity and support, then you’ll receive more SUPR back than you initially put in.
Super Groups, a feature that allows users to connect and monetize content. Empowering the Future: The Impact of SocialFi
SocialFi represents a transformative shift from the centralized, profit-driven models of traditional social media to a decentralized, user-centric ecosystem. By placing ownership and control back into the hands of users, SocialFi platforms like SuperDapp are not just challenging the status quo – they are paving the way for a more equitable and engaging digital future.
The innovations driving SocialFi—from combating fake content and fraud to fostering interoperable social graphs and rewarding active participation—are laying the foundation for this new paradigm. These advancements ensure that users can interact in a secure, transparent, and rewarding environment, free from the constraints and exploitative practices of legacy systems.
Platforms like SuperDapp exemplify the potential of SocialFi innovations with its comprehensive suite of features, including AI-powered moderation, decentralized governance, community-building features like Super Groups and incentivized engagement through mechanisms like Watch-to-Earn and creator tokens.
By integrating these cutting-edge technologies, SuperDapp is not just enhancing user experience but also building a thriving community where users can truly benefit from their contributions.
As we look to the future, SocialFi innovations stand at the forefront of digital innovation, offering a glimpse into a world where online interaction is not only more secure and private but also more rewarding and community-driven. The journey of SocialFi innovations has only just begun, and with platforms like SuperDapp leading the way, the possibilities for growth and positive change are boundless.
