In the dynamic world of blockchain technology, trust is the vital force propelling innovation and widespread adoption. Enter on-chain data, often regarded as the “Trust Engine” of this digital realm. As cryptocurrencies and decentralized networks become increasingly central to our financial landscape, the reliability of transactions and the transparency of market movements are non-negotiable. “Blockchain’s Trust Engine: The Crucial Role of On-Chain Data” delves into this cornerstone of blockchain, revealing how it underpins the entire ecosystem’s promise. In a financial landscape where opacity frequently cloaks monetary flows, on-chain data stands as the beacon of transparency, bestowing trust upon investors, developers, and enthusiasts. This article explores the pivotal significance of on-chain data, charting its transformative journey across the financial and technological frontier.

On-chain data functions as a crypto-world GPS. Unlike traditional finance, where tracing money flow can be like navigating a labyrinth, on-chain data offers real-time visibility into every blockchain transaction. This transparency equips investors with a clear map of market movements, allowing for more informed investment decisions. In traditional markets, this level of clarity would be a game-changer.

➤ Bitcoin: UTXO Age Bands (%)
Imagine having the power to closely monitor every single financial transaction and bank account balance out there. The advantages of such a comprehensive view would be nothing short of extraordinary.
This is precisely what on-chain analysis offers. It’s like a supercharged tool for significant investors, often called ‘whales,’ and those engaged in cryptocurrency mining. Being able to keep tabs on their actions gives individuals a significant edge in making highly accurate predictions about market trends. Details such as the date an account was created and the most recent transaction date (CDD) become incredibly valuable when making savvy investment choices.

In the traditional financial world, obtaining this kind of extensive data would cost a fortune, putting it far out of reach for most.

new investors influx in bull market

What truly characterizes bull markets is the influx of new investors. Without it, we’ve seen in the case of the $69K bull market, we can end up with a misleading surge that ultimately crashes.

➤ Bitcoin: Net Unrealized Profit/Loss (NUPL)
NUPL helps traders get a sense of how confident or worried other Bitcoin owners are about the market. It’s like looking at a weather forecast before deciding whether to go out for a picnic. It doesn’t guarantee what will happen, but it provides useful information to make a more informed choice about your trading strategy.

NUPL currently at 0.22

When NUPL climbs above the 0.5 mark, it often signals that investors are selling their Bitcoin holdings to lock in profits. On the flip side, when it dips below the -0.2 threshold, it typically indicates a market bottom. An illustrative example can be seen in Bitcoin’s recent performance; on November 9, 2022, Bitcoin’s NUPL touched -0.31, marking the bottom of the current market cycle. Following this, we witnessed a remarkable surge, with Bitcoin’s price soaring from $15,500 to nearly $32,000, doubling in value. This underscores the practical utility of NUPL for investors in gauging market sentiment and making well-informed trading decisions.

➤ MVRV (Market Value to Realized Value)
The MVRV ratio is another essential on-chain metric used in the cryptocurrency world. It helps investors and analysts understand the valuation of a cryptocurrency concerning its historical price.
In simple terms, the MVRV ratio compares the current market price of a cryptocurrency to the average price at which all coins in circulation were last bought.

MVRV Ratio = Current Market Cap / Average Realized Cap

When the MVRV ratio dips below 1, it usually means the cryptocurrency is undervalued based on historical trends. This hints at a potential buying opportunity, especially when market sentiment is bearish.
Conversely, when the MVRV ratio surpasses 3.5, it often suggests the cryptocurrency is trading well above its historical average. This signals that the market might be overextended and due for a correction or consolidation. Traders should exercise caution, possibly considering profit-taking or reducing their exposure to the asset at this point.

It’s evident that on-chain data is the cornerstone upon which trust and transparency in the blockchain world are built. As we’ve explored, the value of on-chain data is continually expanding, mirroring the broader adoption of blockchain technology. In the foreseeable future, investors who fail to integrate on-chain data into their strategies may find themselves in the minority. Conversely, those who master the art of harnessing this data trend will be well-prepared and ahead of the curve, able to navigate the evolving market dynamics with confidence.

To conclude, as we embrace the transformative potential of on-chain data, it becomes apparent that this invaluable resource is not merely an option but a necessity for participants in the blockchain ecosystem. In the journey towards realizing the full potential of blockchain technology, on-chain data stands as a beacon of trust, illuminating the path forward for both seasoned investors and newcomers alike. As the blockchain landscape continues to evolve, the role of on-chain data will remain pivotal, ensuring a more transparent, secure, and prosperous future for all.

Futures trading can be a lucrative opportunity for investors, but it comes with its own set of complexities. One such complexity is the funding rate, which plays a crucial role in maintaining market stability and ensuring the futures contract’s price stays in line with the underlying asset. Understanding the funding rate is essential for any trader looking to navigate the world of futures trading successfully.

► Funding rates are used in perpetual futures contracts because these contracts are designed to track the underlying asset’s price indefinitely. Unlike traditional futures contracts that have a fixed expiration date, perpetual futures contracts have no fixed expiration and are designed to trade indefinitely. One may have noticed certain figures and an 8-hour timer running while browsing the cryptocurrency futures trading tab on online exchanges. Something like this:-

► In futures trading, the funding rate is the periodic fee that is paid between long and short traders to maintain the price of the contract in line with the underlying asset. To prevent price discrepancies between the futures contract and the underlying asset, a funding rate is applied to the contract periodically, usually every 8 hours.

► The funding rate is calculated based on the difference between the current price of the futures contract and the price of the underlying asset(on spot).

Funding Rate = (Price of Contract - Price of Underlying Asset) / Price of Underlying Asset x Funding Interval

If the futures contract is trading above the underlying asset’s price, long traders pay the funding rate to short traders, and vice versa if the futures contract is trading below the underlying asset’s price. Technically, this explains why the same asset typically has a different price on the spot and futures markets. The neutral funding rate is 0.01%.

► Positive and Negative Funding Rates: For example; The funding rate for the CFX/USDT pair in the screenshot above is 0.0312%, which is positive funding and indicates that there are more open long positions in the market than open short positions. In such a case, at each countdown refresh of 8 hours, long traders pay a set fee to short traders, and this fee is subtracted from the open margin of that long order.

Negative Funding Rate below 0.01%

The negative funding rate of -0.0689% on APE/USDT indicates that there are more open short positions for this pair on the market right now. In this situation, the short traders will pay the long traders a specific fee at each 8-hour countdown refresh.

Caution is advised when trading a futures contract with a high funding rate, as it can result in volatile prices and significant fees at the end of the countdown. Conversely, holding a long position on an asset with a highly negative funding rate can result in a favorable interest margin after the countdown reset.

► Market Sentiment: The data shown in the chart below indicates how funding rates and market sentiment are related. A positive correlation suggests that the funding rate tends to increase as market sentiment becomes more bullish, while a negative correlation indicates the opposite. For example, as the price of Bitcoin falls, the funding rate becomes negative (shown in red), indicating bearish sentiment. However, as the price of Bitcoin rises, the funding rate becomes positive (shown in green), indicating that shorts are being closed or liquidated and more traders are taking long positions with a bullish sentiment.

Funding rate correlation with market sentiment

Funding fee tab

Funding fee tab in your futures order history will show you the funding fee you’re being paid or paying for your open positions.

In conclusion, funding rates play an important role in futures trading, helping to ensure that the market price of a futures contract stays close to its underlying asset’s spot price. While they offer benefits such as predictability, liquidity, and price stability, traders must also be aware of the potential disadvantages, including complexity, unforeseen events, and increased trading costs. By understanding the mechanics of futures trading and carefully weighing the pros and cons of using funding rates in their strategies, traders can effectively leverage funding rates to improve their futures trading performance. Ultimately, the use of funding rates should be considered as just one of many tools in a trader’s arsenal, and used judiciously as part of a well-rounded trading strategy.

A ZK Layer-2 that gives you control over the commercialization of your AI data. It is launched by the same parent company called OpenAI, who launched ChatGPT which gained enormous attention kicking off an AI trend in Cprypto space that led to unexpected price rise of many tokens belonging to same field.

► CryptoGPT is an Ethereum zk Layer-2 blockchain for AI development. By using a low-cost, secure, safe, and private zkRollup technology it turns the data into a valuable asset- used in AI models to generate value creation in many industries. Moreover, it develops a Data-to-AI Engine that gathers, processes, secures, and packages data for commercial applications.

Data, the resource driving the AI revolution, is the new ultimate objective. Building and developing AI is impossible without data. Large IT companies like Meta, Google, and many more are based on making money off of user data. According to CryptoGPT, it already has apps functioning with more than 2 million users.

► $GPT Economics

How it processes captured data for revenue

►To maintain a healthier economic ecosystem, CryptoGPT has diversified its incomes sources. It claims to have a dependable and highly scalable source of ecosystem income through:

transaction fees made on the network

Core Apps that are developed by the founding team of CryptoGPT and running to boost the ecosystem data economy which provides a sustainable revenue.

The lion’s share of revenue generated by the network is through offering its data to purchasers in global data market.

Utlity NFTs called Data Capsules. Every data capsule bears the specific data footprint of the data miner who created it. End-point users either directly purchase them or developers and businesses obtain and then distribute them.

Data Capsule NFT

► $GPT is a multi-value gas. It is required as a fuel for network transactions. It is topped off with value funnels from validator staking, cash flow from Core products, and power of fee treasury that can be used for liquidity events like buybacks, burns, and/or enhanced yield.

► Moving forward, the foundation has laid plans to rollout DAO with a very economically strong model for a sustainable growth. With the DAO, $GPT Token stakers will have following advantages in controlling the treasury funds:

$GPT Token stakers can vote to use treasury funds to buy back $GPT from the open market

They can also vote to burn the buyback tokens.

$GPT stakers will also be able to approve the use of Treasury funds to purchase $GPT tokens on the open market and distribute them to holders in order to offer a genuinly high staking yield.

Stakers will be able to vote on proposals looking for private or seed investment by using treasury funds

20% of $GPT Tokens will be available on public sale for retails investors.

CryptoGPT roadmap for 2023

The foundation team at CryptoGPT aims to enter into various sectors with its model namely Medicine, Tourism, Biotech, Advertising, Logistics, Finance & Manufacturing. Being a zkRollup project it enhances its potential to operate as more safer & secure in multiple sectors.

ChatGPT, also from OpenAI, is the first tech that merged Blockchain & AI successfully upon which the users are looking forward to a much bigger data & AI market with a wealth of over a trillion dollars in today’s times.

►Difference between ChatGPT & CryptoGPT

CryptoGPT is programmed to provide quick responses to user input based on pre-existing algorithms and databases of information. ChatGPT, on the other hand, is a conversational AI that is designed to simulate human-like conversations and engage in more complex and personalized interactions with users. While CryptoGPT can provide useful information and assistance to users, its responses are limited to its programming and do not possess the same level of conversational intelligence as ChatGPT.

►In conclusion, cryptoGPT is a cutting-edge platform that combines the strength of blockchain technology and artificial intelligence. The platform also offers advanced features such as smart contracts, data sharing, and more, making it highly versatile and flexible for a wide range of applications. With the increasing interest in cryptocurrencies and the growing demand for easy-to-use platforms, cryptoGPT is well-positioned to become a leader in this space. As the platform continues to evolve and add new features, it is likely to attract even more users and contribute to the mainstream adoption of cryptocurrencies.