Incredible Ways to Earn Passive Income from DeFi

Blockchain technology was introduced to revolutionize the traditional fiat system, and it did. However, with time, developers have found an even better way to change the system by getting rid of financial intermediaries such as banks through decentralized finance. The industry has been booming over the last few months, and more is expected in the coming year. 

Everyone’s ideal dream is to earn money with little or no effort, and crypto investors are no exception. Like any other financial system, investing in DeFi presents the opportunity to earn both passive and active income. Andreas Antonopoulos, an avid Bitcoin enthusiast, pointed out that DeFi was one way to earn passive crypto income by putting your capital to work. 

You’d certainly want your money to work for you, wouldn’t you? Here are some of the ways you can make some passive income from your initial DeFi investment. 

Income Generating DeFi Products

Besides getting rid of third parties, another prominent feature of DeFi platforms is incentivization, which, in turn, increases liquidity in the industry. Through the increased liquidity, DeFi platforms present different income-generating products, which are:

  • Liquidity Mining 
  • Staking
  • Yield Farming

If you’d rather generate some active income, you’ll need to trade on DEx platforms actively. Obviously, you’ll need to be hands-on for this approach, and your investment could go either way because of the industry’s volatile nature. If you’d rather a less risky strategy, HODLing could work for you, but then you’d have to wait quite a while before you can get some significant yields. 

Well, if you’d rather invest your money somewhere and wait for it to earn you something, let’s have an in-depth look at the options that you have. 

Liquidity Mining

Decentralized exchanges or token issuers often offer rewards to the liquidity providers on the network. The users have to deposit some ETH or ERC-20 tokens into a liquidity pool through an automated market maker (AMM). The deposit acts as collateral in the liquidity pool. 

If you’re looking to earn through liquidity mining, you’ll first need to find a pool that accepts your tokens. You can then stake them in the pool and get incentives in return. Often, the incentives are tokens that you can later exchange in a DEx. 

The risks of investing in liquidity pools is high, which is why this method will earn you more than even money markets. 


Mining new cryptocurrencies is every enthusiast’s dream. However, between the expensive technology needed and the difficulty of computational problems, not many people get to achieve this dream. 

If you’re one such person, perhaps you should look into staking your tokens. The method is an excellent alternative consensus mechanism. Most networks will require that you store your tokens in a specific wallet and incentivize various network functions. By completing certain tasks, which may include minting or burning, the network rewards you with several tokens. 

Obviously, you’ll need to be involved to some degree for you to complete the tasks required. How much involvement you’ll be needing will depend entirely on the DeFi project. 

Before you go rushing for this method, you must know that staking involves high risk- but of course, that also translates to high returns.

Yield Farming

If you’ve come across a DeFi investor, there are high chances that they make most of their earnings through yield farming. The concept is quite popular among DeFi projects, and involves moving around your crypto assets to wherever they’ll earn the highest returns. 

Yield farming allows you to generate income from the crypto assets you already have. You become a liquidity provider together with other users and add funds to liquidity pools. In return, you get rewarded with the fees generated from the underlying DeFi platform. 

Typically, yield farming will be done using ERC-20 tokens, which are built on the Ethereum blockchain. Most DeFi platforms will reward liquidity providers with multiple tokens, which comes in handy for investors who want to diversify their portfolios. 

Although it isn’t necessary, most times, the funds deposited in the liquidity pool will be stablecoins backed by the US Dollar. Depending on the platform you use, you may have the rewards as minted coins to represent your deposited coins. For example, if you deposit some ETH tokens in Compound, you’ll get cETH tokens as your rewards. 

Best Platforms for Passive DeFi Income

Now that you know the different ways through which you can earn passive income from DeFi, you’re probably wondering where to apply all the useful information. Luckily, there are different DeFi platforms you can use to diversify your crypto portfolio. Have a look at three exchanges you should definitely check out. 


If you’re interested in short term lending and borrowing, you should definitely check out Compound. This protocol is a money market for Ethereum based assets and tokens. 

Using this platform, you can contribute to liquidity pools and accrue your compounded interest automatically. 


This platform is one of the popular ones in the DeFi space and is ideal for anyone who’s looking to tap into the goldmine. Uniswap offers an automated market maker that allows users to swap ETH for ERC-20 tokens and earn transaction fees by providing liquidity. 


Aave is quite similar to Compound, but is a bit more flexible, which makes it an excellent alternative. Unlike compound, Aave users can switch between stable and variable interest rate models. Additionally, the platform features flash loans that developers can use to create dApps. 

Parting Shot

Undoubtedly, DeFi remains a largely uncharted territory for investors, including those who’ve been following the recent crypto trends. However, if 2020 is anything to go by, the DeFi craze isn’t a passing wind but is here to stay. Therefore, if you have a knack for investing in crypto, you might want to get aboard the DeFi train soon enough. 

Sure, actively investing in a relatively new venture that you don’t know much about can be risky. So, why not try to get some passive income as you learn more about it? There are different ways to achieve this, as we’ve discussed above. Like any other investment, be sure to do some research before putting your hard-earned money in any venture. 

So, what passive income strategy will you be adopting in 2021? Let us know in the comments below. 


Crypto Market Trends for 2021 that You Should Exploit

2020 has been nothing but tumultuous, and most analytical fintech pundits got their predictions on crypto markets wrong. The Coronavirus caused an unprecedented, global effect that altered trends, intensifying some and creating others from scratch.

Just around March 2020, when global lockdowns became a trend, bitcoins cost about $4,000. Government-imposed economic shutdowns caused widespread volatility as the use of digital currency surged. By December, bitcoins had appreciated to $23,000, with some other crypto assets appreciating even more.

Closely analyzing 2020’s volatility reveals some method to the pandemic madness. 2021 may be easier to predict, owing to the spillover effects of the global pandemic.

Speculating the crypto asset markets in 2021 can be profitable for those paying attention to the regulatory developments. Widespread cryptocurrency adoption and financial regulation will dominate the majority of crypto market trends for 2021. Let’s have a look at some of our crypto predictions for this new year. 

De-Fi Market Growth Will Continue

Ripple Labs was causing significant ripples in the banking sector, integrating blockchain technologies in over 100 banks via its dApp menu. The DeFi market was growing rapidly because of the speed, low-cost, and decentralized nature of transactions.

It hit a major blockade when the SEC sued it for running an unregistered security exchange. However, Ripple Labs has a powerful, legal reply, asserting the XRP as a commodity and not a security.

It’s not the character of governments to halt constructive technologies, and blockchain will be indispensable in overcoming the challenges of the Coronavirus pandemic. Therefore, the DeFi markets will prevail in legal onslaughts against them by finding a middle ground.

Since Covid19 struck DeFi, markets grew from a market cap of $193 billion in January 2020 to $668 billion in December and are projected to hit 39.7 billion in 2025. The phenomenal growth came as investors injected funds into digital currencies. They were escaping the volatility of the global economic shutdown.

Markets that offered crucial value but lacked liquidity suddenly got flooded with money. For cryptocurrency markets and DeFi, such liquidity can only cause irreversible, compounding growth.

More corporations will pay to use blockchain technologies for global, digital transactions. More banks will integrate dApps and Smart Contracts, and DeFi markets will achieve even more liquidity. 

Increased Understanding and Integration of Blockchain Technology

Cryptocurrencies are novel fintech, widely misunderstood seven years after bitcoins became a store and transfer of value. People grew aware of it gradually, but the Covid-19 outbreak accelerated the pace. Shrinking markets and economic lockdowns motivated the corporate class to find working solutions in digital payment networks.

As DeFi markets gained unprecedented liquidity, cryptocurrencies are increasingly becoming viable payment options for daily consumption. More businesses are embracing blockchain networks, and people now appreciate the vast potential of blockchain technology.

Blockchain is also applicable in other industries, such as supply-chain management, asset management, developing risk protocols, and running democratic elections. 2021 may see industries adopting blockchain aspects such as:

  • Tokenization.
  • Smart Contracts.
  • Decentralized Consensus.

More research and development of blockchain technologies will decentralize processes such as electioneering, global commerce, inheritance, and dividend allocation. For example, universities are developing blockchain technologies for running auctions for parking spaces.

Digital Transformation Will Become a Corporate Necessity

Let’s face it; the global pandemic could reign with fear for another whole year. Some private firms supposedly came up with Covid-19 vaccines, but Americans are largely distrustful of them.

The vaccine manufacturers aren’t liable when anything goes wrong with the vaccine, and people want someone they can sue in case of severe damages. As the conflict lingers, daily operations for many businesses will remain frozen.

Digital currencies offer decentralization, bypassing the need for currently frozen/slow financial services. Bankers and regulatory exchanges facilitating global commerce are in partial or total atrophy. Therefore, digital transformation is becoming a survival strategy for corporations.

If Ripple Labs resolves its deadlock with the SEC earlier, it could dominate the crypto markets with its dApp technology. ETH is also likely to maintain its growth trajectory if it continues engaging the corporate scene.

But work-at-home trends are likely to consolidate the 2020 gains of crypto markets in 2021. Cryptocurrencies are swapping from Proof of Working mining protocols to decentralized, peer-to-peer Proof of Stake consensus-building mechanisms.

Folks are ganging up to do business and have fun online, and they found ways of getting social during the imposed quarantine. With time, they will drive bulky blockchain transactions where cryptocurrencies will be major payment options, and Smart Contracts will replace traditional handshakes.

China Will Lead in Cryptocurrency Adoption

China led in the use, development, and innovation of blockchain technology in 2020, and it will dominate the markets in 2021. China is embracing blockchain applications on a national level.

China funds infrastructural growth and integration through digital currencies. It even instituted a state-backed Blockchain-Based Service Network to encourage the adoption of digital currencies. The communist giant also plans to provide its digital infrastructure to other nations.

The nation is so committed to encouraging Crypto Yuan adoption that it offers free, temporary tokens to entire villages and towns. Recipients are allowed to use them before an expiration date when unused free tokens disappear.

China’s aggressive adoption of blockchain technology will dissuade the EU and the United States from harassing their digital markets. Regulatory bodies will adopt friendlier, problem-solving approaches firms.

Central Banks Will Get in on the Action

Central Bank Digital Currencies are looming and could revolutionize crypto markets. The BIS reported that 80% of sovereign central banks are considering designing or developing their digital currencies for national use and international exchanges.

Central banks have enough data to appreciate the diminishing use of cash, and they want a piece of the digital payments action. The widespread growth of private cryptocurrencies also threatens them.

Central banks are also under competitive pressure from Chinese authorities who are accelerating blockchain technologies.

CBDCs will help to curb the growing influence of scammers and blockchain hackers. The rise of stablecoins will probably lay fertile grounds for the development of CBDCs, and digital currencies will become more secure than 2020.

Tightened Fintech Regulation

Fintech regulators had plenty of time to study and investigate crypto assets. If 2020 was anything to go by, legislative and oversight bodies will be more informed and hands-on. They will do a better job monitoring crypto markets.

Tax laws and consumer protection will take center stage, and digital currency firms will engage in heated negotiations with financial regulators. Both sides of the government and private digital firms will make concessions to accommodate widespread adoption.

Regulatory tightening will be great for investors and governments. These developments will make digital payments more convenient and secure, benefiting end-users the most.

Final Word

The crypto-asset markets were the most profitable in 2020, and they are likely to be even more profitable in 2021. The gains of digital payments from 2020 are irreversible, and you are well-advised investing in crypto markets.

This year saw the development of cross-chain money markets and a legal onslaught on cryptocurrencies that didn’t grind them to a halt. Therefore, the phenomenal growth will endure, and 2021 might see widespread adoption of crypto payments.

Share your predictions with us in the comments section if you have some extra insights. Let’s discuss ideas that will yield maximum productivity in 2021.

Crypto Daily Topic Cryptocurrencies

Impact of DeFi in the Banking Sector

Blockchain is revolutionary fintech, and DeFi applications are taking success in financial services to a whole new level. Over 1.7 billion people remain unbanked, and DeFi is empowering internet users with permissionless financial services that cut out third parties.

Investors locked more than $15 billion within DeFi protocols in 2020. While decentralization has only captured billions, traditional, centralized finance controls the vast trillions of dollars transacting globally. Therefore, more innovations and marketing will suffice for further adoption.

However, with the industry admitting roughly $500 million from investors monthly, the prospects are changing. DeFi offers irresistible convenience and cost-effectiveness. The potential is also vast.

DeFi encompasses digital lending, borrowing, staking for capital gains, and regular income. DeFi services are permissionless, and they execute most transactions through tokenization and smart contracts. Eliminating all the third-parties and profit-seeking intermediaries make DeFi cost-effective.

Laws, rules, and regulations are programmed into blockchain protocols, and DeFi impacts every aspect of traditional financial services via automation. The impact is so great that it could change human interactions on an international scale.

In this article, we are peering into DeFi and its impact on the finance industry. A chronological outlook of blockchain developments suggests a pattern of innovation and adaptability. Understanding this pattern is crucial for your future investment projects.

The Ethereum Blockchain: How Are dApps Taking over the Banking Sector?       

To start with, let’s appreciate that the Ethereum community has revolutionized and accentuated DeFi as no other blockchain has. The ecosystem is advanced enough to evaluate systemic risks, and it reports DeFi Scores for platform security.

The ecosystem supports open-source composability, and the Ethereum blockchain harnesses the collaboration of independent developers worldwide. Borderless, open-source development has encouraged software designers and coding experts to focus on their strengths.

Ethereum’s infrastructure allows users to integrate various DeFi applications covering vast, diverse industries such as gaming, credit, supply-chain management, and capital markets. Laying and building applications on each other creates a vast network effect.

The Ethereum community is significant in DeFi because its network has over 7,083 live, global, main-net nodes, over 88 million unique users, over 42 million smart contracts executed.

You can utilize over 2,773 decentralized applications along with over 23K daily users. DApps are popular and post daily transactions exceeding 78K because of their:

  • Open-source codes.
  • Decentralized consensus and governance.
  • Noncustodial, permissionless services.
  • Tokenization and the use of smart contracts.

The diversity of dApps supports digital currency banking services, alternative services, DEXs, and P2P lending. Users embrace digital transactions because they are fast, secure, borderless, pseudo-anonymous, and irreversible.

Cross-chain interoperability came into DeFi markets in 2020, and you can now lend, borrow, and trade tokens across different blockchain networks.

How DeFi Saved Global Finance from Total Atrophy

When the Coronavirus became a global pandemic, states imposed mandatory lockdowns. Globally, the banking sector came to a standstill, and the international exchange services and other intermediaries such as asset managers, insurers, and bankers.

People were required to stay at home, and only essential services were allowed to proceed. If we didn’t have alternative financial services, most global supply chains would have suffered complete atrophy.

Governments created concerns about the value of money when they printed cash to bail out people and agencies. People and investors got more concerned that they pay taxes, yet governments dilute their savings by printing more money.

The threat to traditional finance was runaway inflation and the concern that credit is limited for those needing it the most. The international investment landscape went through shocks as investors turned to DeFi, seeking to mitigate the effects of a global pandemic.

Fintech Verticals Most Impacted by DeFi

Open Banking and Financial Data

Data is one of the most valuable commodities in the Mega Big Data era. Banking institutions traditionally hoarded all the financial data of users. In the US, financial data is worth over $15 billion. However, bankers won’t let you access it.

DeFi frees up your financial data for your benefit, allowing you to make intuitive, cost-effective investments. DeFi applications and services are providing open-source, immutable, financial market data.

Moreover, pseudo-anonymity and permissionless transactions prevent a handful of corporations from accessing your private transaction history.

Decentralized Exchanges

DEXs empower users to control their funds, giving them exclusive access to their private keys. These permissionless exchanges reduce the risk of custodian third-parties and diminish the risk of custodian third-parties losing your funds through major hacking events.

Cross-chain money markets are completely cutting off permission-based, custodian exchanges where you need expensive, third-party intermediation to swap bitcoins for other tokens like ETH, BCH, and XRP. Therefore, you can take just seconds to execute fast, borderless, almost-free transactions.

Borrowing and Lending

DeFi allows people to earn high interest on their savings. As crypto-assets stabilize volatility issues, DeFi is empowering crypto users to save profitably. You don’t need banks to store or transfer value. You can just use your smartphone and an internet connection to upload your finances to online savings software with blockchain transparency, security, and profitability.

DeFi platforms offer flexible interest payments, with some paying out interests every second. The best part is that you don’t need credit checks to take out DeFi loans. You only need to collateralize with your long-term investments. DeFi borrowing costs for commercial use are tax-deductible.

Tokenization and Asset Management

The tokenization of assets is at the core of decentralized finance. It’s revolutionizing assets-trading across the globe, offering traders new markets and opportunities. DeFi offers reliable asset and supply-chain management via smart contracts.

You can make international deals and trust total strangers to hold their side of the deal. Smart contracts don’t release payments unless all predetermined conditions are fulfilled. Tokenization is crucial in executing group contracts such as the ones utilized in:

  • Liquidity pools.
  • DeFi insurance protocols.

Parting Shot

The impact of DeFi on the banking sector threatens its existence, but bankers can adopt dApps to survive the storm and thrive. The banking sector won’t disappear, but it will evolve drastically as DeFi revolutionizes how we interact and do business.

Understanding the role of DeFi in 21st commerce is important for your financial future. Remember that these technologies offer cutting-edge convenience, and the market is growing exponentially. Therefore, you need to join in on the benefits or risk falling behind.

What do you think about DeFi, and what are your predictions on 2021 banking? Share your views in the comments section.


Crypto Daily Topic Cryptocurrencies

DeFi vs CeFi Investments: What’s the Difference?

The advent of the blockchain and Bitcoin ushered a new era of transformation in the financial sector. The latter’s successes catalyzed further innovations in this space. One of its earliest adaptations was Centralized Finance( CeFi). Further developments have seen the introduction of Decentralized Finance(DeFi). 

Though the two are diametric opposites of each other, they serve one end: the expansion of financial services. But what do these concepts mean? What are their pros and cons? Can we find commonalities between the two? Finally, is there a way of bridging the divide between them?

This article will use the questions above to differentiate CeFi and DeFi investments. In this way, it aims at deepening your understanding of these crucial financial developments.

Understanding CeFi

CeFi is centralized finance and comprises closed financial markets. It entails a central authority controlling all aspects of transactions between peers. The said authority could be a bank, government, or any other uninvolved third party. 

Salient Features of CeFi

A keen look at CeFi investments reveals several important features. First, there’s a strong emphasis on KYC and AML requirements. In keeping with their jurisdictions’ laws, CeFi service providers require their users to provide personal information, including identity and residence details.

Secondly, CeFi investments are custodial in that they hold their users’ private keys. They are centralized and offer cross-chain services. CeFi investment services also allow for the exchange of different cryptos issued on different blockchains.

Advantages of CeFi

The popularity of CeFi investments speaks of their usefulness. For instance, they guarantee the protection of depositors’ funds. As they’re custodial, CeFi service providers assure their users of the safety and returns on their users’ funds.

Additionally, they undertake to secure one’s private keys. Since the service provider holds the private keys, there’s no danger of ever  losing them. Moreover, they have dedicated customer support systems. 

Disadvantages of CeFi

There are several deficiencies linked to CeFi. Among these are higher transaction fees. Because they use intermediaries in transactions, they charge higher fees. Another shortfall is that they lack transparency as they don’t provide for a public audit of transactions.

The centralized nature denies users control over their funds and makes them invasive in nature. Their  KYC requirements demand full disclosure of personal information. Users can quite easily lose their funds on these since CeFi investments are an easy target for hacking owing to their custodial nature.

Decentralized Finance (DeFi)

DeFi is an acronym for decentralized finance- a movement that champions the provision of P2P financial services. DeFi solutions give parties greater control over their transactions. They achieve this by eliminating centralizing authorities – banks and governments – from the exchanges.

Last year saw a proliferation of DeFi platforms. Currently, the major players in the space include Compound, Yearn Finance, Uniswap, and Marker DAO.

Key DeFi Features

A number of features define DeFi investment projects. To begin with, they are permissionless, which means that anyone can use them, regardless of their geographical location.

On top of that, they depend on Smart contracts, a set of code defining the relationship of the transacting parties. The smart contracts work together with Decentralized apps (Dapps) to automate transactions.

Again, DeFi investments are Blockchain-based. They run on the Ethereum blockchain and have wide applications across the payments, lending, and trading sectors.

Advantages of DeFi

The ballooning of DeFi projects points to them being beneficial. Here’s a rundown of their key advantages. A key feature is that DeFi investments give users autonomy over their funds. The user is the sole custodian of their investment.

Equally, it is expedient as it eliminates third parties, which helps to make it more affordable. Furthermore, DeFi investments are tradeable, thanks to tokenization, which allows for trading in micro-units.

Another key feature is that they’re accessible. DeFi investments are open to everyone, notwithstanding their location. They are also transparent since their deployment on the blockchain opens transactions to public scrutiny.

Disadvantages of DeFi

Although advantageous in many ways, DeFi platforms have their shortcomings. The threat of losing assets ranks highly among those. DeFi users may permanently lose their crypto assets by losing their private keys or mistyping their wallet addresses.

In close tow is the possible exposure to scams. Many cons have infiltrated the DeFi Sector. These take advantage of the absence of centralized control; victims have very little recourse, if any, in such cases. 

Significant Differences Between DeFi and CeFi

The differences between CeFi and DeFi are more than in the terminology. As the following points will indicate, the two platforms are stark contrasts of each other.


Centralized authorities run all aspects of CeFi platforms. The users have to subscribe to a set code of regulations. On the contrary, DeFi platforms look to their user communities for governance. Some of them issue governance tokens that enable holders to participate in the decision-making processes. An example is Compound (COMP).


Both CeFi and DeFi have unique features defining them. For example, CeFi projects are custodial while DeFi projects are non-custodial. Again CeFis offer dedicated customer services, which DeFis don’t.

Further CeFi investments adopt the use of Centralised Exchanges (CEX). On the flip side, DeFi investments use Decentralized Exchanges (DEXs).

Whereas CeFi projects are permissioned, DeFis aren’t. CeFis use third parties to create trust, while DeFis are trustless networks.


CeFi platforms conform to strict regulations of the jurisdictions they operate. In compliance, they undertake thorough KYC and AML reviews of their users. On the other hand, DeFi is nascent and unregulated. They, therefore, dispense with KYC requirements. 

That said, many jurisdictions are instituting regulatory measures in crypto operations. The Securities and Exchange Commission of the US oversees cryptocurrency trade.  At the same time, the European Commission is pushing for a comprehensive legal framework targeting cryptos.


As CeFi runs centralized exchanges, they charge higher fees. The higher fees arise from the need to maintain the platform, pay their staff, improve their offering, among others.

In contrast, DeFi platforms are affordable. They employ decentralized exchanges that don’t provide custody services and don’t have teams engaging in their day to day running.


CeFi and DeFi investment platforms have different approaches to raising liquidity. CeFi projects raise liquidity by matching buyers’ and sellers’ orders akin to forex or stock markets. DeFi projects in reverse employ automated market makers that  pre-fund both sides of the trade.


The custodial nature of  CEXs increases their susceptibility to cyberattacks. Although CeFi platforms invest in robust security systems, it isn’t unusual to hear of major platforms getting hacked.  


DEXs, however, are noncustodial. Thus are less susceptible to such attacks. However, vulnerabilities in their smart contracts could expose them to the theft of funds.

Similarities Between DeFi and CeFi Investments

Although different, the two platforms find convergence in certain areas. For example, they offer similar financial services. These include trading (spot, derivatives, and margin), borrowing and lending, payments, and the development of stablecoins. 

Also, both systems bank on innovation. They use transformative blockchain technology. Further, both serve the digital assets ecosystem.

Parting Shot

CeFi and DeFi platforms are polar opposite. That said, they serve similar functions in payments, lending, and trades. Moreover, both are at different stages of their development, with CeFi having a headstart over DeFi. This gap in development calls for urgent redress. 

To that end, several projects and platforms are working on appropriate solutions. Binance is one of them. Apart from reducing the risks inherent in DeFi, there’s a need to mainstream it. Moreover, there must be a simplification of the DeFi adoption process besides building robust DeFi communities.


Crypto Daily Topic Cryptocurrencies

A Complete Guide to DeFi Taxes: Everything You Should Know

2020 was revolutionary for DeFi markets, and investors flooded the young industry with over $7billion from a mere $1.2 billion. As the market cap and number of transactions surged, regulators came up with responsive ways to tax cryptocurrency income. 

Initially, taxes were a foreign concept in crypto realms, but the IRS made definitive tax rules for blockchain transactions. Most digital currency taxation policies are based on cryptocurrencies, but regulation is spilling over to the DeFi markets.

Most crypto users are ignorant of digital currency tax laws, but the IRS will not let you plead ignorance. The federal tax agency is decisively cracking down on crypto tax compliance, and this article will help you gain some valuable insights.

Reading on will help you keep compliant with DeFi taxation requirements. Even more importantly, it will help you navigate DeFi, so you trigger as much tax deductibility as allowed in novel legal confines. 

Crypto Taxes 101

The IRS categorizes digital tokens as properties and not currencies. Bitcoins, for example, are capital assets that can attract profits and losses from transactions.

Reporting your crypto taxes gets harder with the increasing number of blockchain transactions per financial year. The IRS adopted and has never changed its use of first-in, first-out accounting, which means you should determine your net gains/losses on crypto assets.

Profits are categorized as long-term or short-term capital gains. Losses on cryptocurrencies are considered deductible capital losses.

To prevent crypto holders from absconding cumbersome tax computing and filing, the IRS imposes the form 1099-K for all crypto exchange users posting over 200 transactions per year. This file is similar to form 1099-B that stockbrokers use for filing capital losses/gains, but it has some unique provisions.

Introduction to DeFi Taxes

DeFi exists within cryptocurrency realms, enabling digital token users to trade, lend, and borrow via low-cost automation that rules out third-party financial services. In DeFi markets, crypto owners earn interest on lending platforms, and the interest is paid in the same digital currencies.

Therefore, crypto interests increase the number of digital currencies. When you earn interests through your crypto tokens, a different taxable event occurs from profits/losses. Taxable events in DeFi markets transpire when:

  • You trade one cryptocurrency for another via cross-chain money markets, realizing either profits or losses.
  • You trade crypto tokens for fiat currencies, either realizing either profits or losses.
  • You spend digital tokens on goods and services, realizing either profits or losses.
  • You earn in cryptocurrencies, and DeFi services create numerous earning opportunities where you trade your time and skills by executing network protocols. Moreover, some CEOs and athletes prefer getting their salaries in digital tokens.

These taxable events in cryptocurrency transactions are either:

  • Capital gains.
  • Ordinary income.

Ordinary Income vs. Capital Gains Income               

Ordinary income taxes apply for normal jobs, and the IRS doesn’t classify cryptocurrency miners any differently. You must pay according to your marginal tax bracket.

Bitcoin miners and validators on Proof of Stake protocols earn digital tokens for authenticating transactions. These earnings are categorized as ordinary income, and they offer minimal tax savings.

Capital gains income manifests when you swap your digital assets for a higher monetary value than you acquired them. These income streams present significant tax benefits and holidays. For starters, long-term capital gains tax rates are diminished compared to short-term capital gains.

Moreover, you can completely offset capital gains with capital losses. However, capital gains can only offset ordinary income up to $3,000.

DeFi Taxes in Lending and Borrowing

The DeFi ecosystem offers lending opportunities like no other. Your digital currencies can earn interest on Compound, Blanancer, and Uniswap by contributing to liquidity pools or lending directly.

Some DeFi protocols take crypto loans and issue out Liquidity Pool Tokens in return. The currencies you loan out determine the number of tokens from the liquidity pool and ultimately how much interest you make.

Interests that you make on crypto lending platforms qualify as ordinary income for tax purposes. The DeFi ecosystem allows you to boost your revenues, with some platforms paying out interests every second.

The same applies to crypto borrowing platforms. You can borrow bitcoins and other digital tokens to use for business or personal use. Commercial cryptocurrency loans qualify for tax-deductible expenses. Therefore, you can claim relief on costs you incur when borrowing cryptocurrencies for commercial use. 

DeFi Taxes for Unexpected Income from Hard Forks and Token Distribution

Sometimes, blockchain networks award existing users or asset holders with free digital tokens. Such tokens are newly acquired assets with monetary value. Such a transaction is taxable, and the IRS categorizes it as regular income.

Therefore, you must report it within your appropriate tax brackets, and you won’t qualify for many deductions on these earnings. If you use such tokens profitably, file the revenue made on top separately.

Networks like Compound sometimes distribute their native tokens for free to users during initial offerings. For example, the DeFi platform distributed $100 worth of COMP. The users who enjoyed free $100-worth assets owed the IRS whatever your income rate is for that $100.

You won’t pay any more taxes if you hold the COMP, no matter how much they appreciate it. However, you will owe the day you redeem that appreciated monetary value, and you should report the net revenue as capital gains.

If the $100-worth of COMP appreciates to $300 within a year, you will owe short-term capital gains tax for $200 if you sell the COMP or redeem it for products and services. Your capital losses for the COMP are not deductible on the income tax you owe for unexpected digital income.

Cryptocurrency forks are other sources of unexpected digital income. Forks result when validators or miners in a network disagree on blockchain governance. A great example is that of Bitcoin and Bitcoin Cash. They disagreed, and the Fork was quite controversial because it created BTC tokens from scratch.

Investors of parent cryptocurrencies end up with an equal number of forked-off tokens. For example, if you had 4 BTC during the fork, you automatically got 4 BCH, and you became a member of two independent blockchains.

These unexpected incomes are also part of your taxable income, and you pay per your tax bracket. Any gains on them are taxable, and any losses on them are not tax-deductible.

DeFi Taxes in DEXs

Basic taxation rules for cryptocurrencies apply to DEXs. You do not incur taxation for transferring funds from one platform to another, so long as the accounts and funds are yours.

However, when DEXs allow cross-chain asset swaps, an element of profitability occurs. You either gain profits or losses on your initial capital assets.

Reporting DeFi Income on Your Taxes

It is your responsibility to report DEX revenue streams for tax purposes. The advantages of DeFi taxation are abundant. Report all DeFi buys and sells on the IRS Form 8949 for your capital gains filing.

Tax Advantages of DeFi

For starters, DeFi lending converts your currencies to Liquidity Pool Tokens. Your liquidity tokens remain the same, but their value increases over time. You make a capital gain when redeeming your LPTs for the original cryptocurrencies.

DeFi converts what should be your regular income into capital gains income. Consequently, you qualify for deductions if you make losses later selling the tokens.

DeFi allows you to borrow tokens with different cryptocurrencies acting as collateral in Ripple’s XRP for the long-run, but ETC is more profitable in the short-term.

Long-term capital gains offer more deductibles than short-term ones, and you shouldn’t keep selling your XRP to leverage ETH’s profitability. You can borrow ETH with XRP as the collateral if the prospective earnings are more than interest costs.

Tax Disadvantages of DeFi

Whenever you exchange a crypto asset for another, you are most likely triggering a taxable event. This makes it cumbersome to track all profits and losses made every time such DeFi transactions occur.

Tax Treatment Overview on Different Platforms

  • Uniswap

Uniswap executes the Liquidity Pool protocol for its crypto lenders. It empowers you to swap income tax liability for capital gains liability, which is deductible. UNI tokens basically cushion you from future losses on the native coin you want to lend.

  • Maker/Oasis

This DeFi service allows you to harness long-term tax deductions on capital gains. The platform allows you to trade between assets and even earn interest on other assets. They allow you to lock your ETH as collateral, and as it gathers capital gains, you can seize the short-term profitability of other blockchain networks.

  • Compound

Compound is also a Liquidity Pool platform, which converts your ETH to cETH. When the liquidity pool earns interest, the value on your cETH will move from income tax liability to capital gains revenue, deductible for losses.

  • Balancer

Balancer is another Liquidity Pool DeFi service. It’s sort of a tax-lien insurance package against future losses on crypto assets. 

Parting Shot

Ignorance cannot be your defense when you are found to be non-compliant. The DeFi markets are enormous and have the potential to overtake centralized finance in years to come. The IRS knows this fact, as do most sovereign central banks. 

Fortunately, DeFi taxes are friendly, and they offer numerous tax-saving opportunities. You stand to make tremendous capital gains and high, compounding interest rates investing in DeFi. The gains are way bigger than the tax costs. 

Enforcement over DeFi taxes will only get more aggressive, intuitive, and efficient. That’s why you need to read this article and share it with your friends. Take charge of your tax compliance, and share some of your most effective tax filing tips for DeFi transactions. 


The Major Risks of Investing in DeFi and How to Mitigate Them

For a crypto enthusiast, there could never be a better time to be alive. First, there’s their growing acceptance as a store of value. Additionally, developers keep churning out exciting products promising to revolutionize our financial lives. One such product is Defi, and 2020 has seen its popularity grow in leaps and bounds.

To the Defi proponents, it is the magic pill that will cure the shortfalls of conventional finance. Often Defi Investments are portrayed as a sure way to wealth. Though, a keen look at the sector reveals the presence of pitfalls amidst the opportunities always touted. Making headway in this space, therefore, demands prudence.

What then are the risks accompanying Defi Investments? What are the ways of mitigating them? Stay with me as we unearth the risks to expect when you invest in the sector and the measures to protect your investments from them.                

Which are the Major Risks in Defi Investments?

We can categorize the risks in the Defi sector into three, namely, technical risk, financial risks, and procedural risks. We shall now embark on explaining each of these briefly.

Technical Risks

Technical risks arise from malfunctions in the protocols, hardware, and software of a Defi platform. They are critical since they compromise the platform’s functions. They include:

Smart Contract Risks

Smart contracts are the lifeline of Defi. They are central to the execution of most functions. Therefore any error in their operation will impact the Defi they run on and imperil users’ funds.

Smart contracts are human-made and, therefore, prone to bugs and other vulnerabilities. Unscrupulous individuals will exploit these to gain unauthorized control over the protocol’s functions. Recently, there have been reports of incidences of smart contract exploits that led to the loss of funds.

Hardware risks 

Hardware is the foundation on which Defi services run. Compromised hardware impacts the proper functioning of a Defi platform. Common hardware risks affecting DeFi systems include:

  • The power issues may cause unreliability of the service or application, diminished service life and performance.
  • Sensitivity risks result from degradation, humidity, dust, or other similar issues.
  •  Incompatibility risks can limit the speed of the system and other issues.

Software Risks

The entire Defi ecosystem runs on software. A corrupted software impedes the proper functioning of the Defi platform. These risks present in different ways:

  • Distributed Denial of Service (DDoS) attacks disrupt the normal functioning of an app or service.
  • Injection risks introduce malicious code into the DeFi software, for instance, SQL injection into web apps.
  • Uncontrolled format strings execute malicious code in a web app.
  • Overflow risks cause the software to skip certain functions or implement them in error.

Financial Risks Related to DeFi

Most information on Defi only speaks of the profit-making part. Whereas it is true that with wise investments, one can make a ton, there’s also the possibility of incurring losses. Financial risks are those that put you in danger of losing your funds. These include:

Impermanent loss

Impermanent loss occurs when you fund a liquidity pool, and the price of your deposited assets falls compared to when you deposited them. In an ironic twist, you discover that you’d have been better off hodling them.

Currency Fluctuations

The whole crypto space is very volatile. Cryptocurrencies experience upturns and downturns spectacularly. If you invest funds in a particular crypto asset, then its price falls, you experience a loss. The same obtains for staked assets. Should the supporting asset decline in value, it will take the supported down with it.  


The Defi Sector is crawling with persons and entities of dubious intentions. These fashion different kinds of scams to the detriment of unsuspecting investors. Some of the means they employ include:

Exit Scams

Unscrupulous promoters dupe investors by setting up a project with a seemingly attractive concept. They collect funds through an ICO and melt away with the loot. A case in point is YFDEX. Finance’s heist.

Pump and Dump Schemes

Whales create an artificial demand for a coin/token, thereby drawing in investors. Later they withdraw their funds at a profit. Consequently, the market plummets, leaving the rest counting losses.

Fake Airdrops and Rewards

Scammers create fake Airdrops and giveaways to access private keys and personal info. They then use these to defraud you of your funds.

Defi Rug Pulls

Defi rug-pulls scams involve minting new tokens, marketing, and listing them on Uniswap. The masterminds inject liquidity, convincing trusting investors to swap their ETH for the token. After that, the cons withdraw the funds leaving holders high and dry.

Procedural Risks in DeFi

These are the risks arising from one’s usage of the Defi platforms and attendant infrastructure. They include:

Phishing Attacks 

Here a malicious player duplicates a website or service, duping the unsuspecting into sharing sensitive information. Alternatively, they could send emails that install malicious code on their devices. Then they use the victim’s sensitive information siphoning their funds.


A hacker poses as a representative of a DeFi service and convinces users to share sensitive information.

Exposure of Login Credentials

At times a user may knowingly or unknowingly expose their login details. Anyone with ill motives will use these to access their accounts.

Loss Of Login Details

Users may forget their login credentials. They, therefore, cannot access their accounts, leading to a loss of investments.

How Do You Mitigate Risks Associated With Defi Investments?

The Defi space can be unforgiving to anyone who navigates it without caution. One needs to guard their investments jealously. Here’re a few pointers on how to protect yourself from the risks outlined above:

Deal with Authentic Products and Services Only

Use products and services whose authenticity you’re sure about. Before settling on a product/service, DYOR! Look at reviews and recommendations about them. From there, you’ll get a good feel of what you’re getting into. Negative reviews are your cue to take off.

Use Multi-Factor Authentication

Secure your logins with several verification instruments. Examples include email confirmations, two-factor authentication, and multi-sig authentication.

Keep it Private

Treat your Defi investments like any other sensitive and personal information: private! Doing so helps ward off hackers’ attention.

Secure Your Digital Assets

The security of your investment is a wallet away. Hot wallets are ideal for actively accessing DeFi services. Cold wallets, on the other hand, are suitable for offline storage. Invest in a dependable wallet

Make Updates and Backups Your Friends

You must keep a backup of your sensitive information, including login credentials. Besides improving user experiences, upgrades, and patches of Defi solutions resolve vulnerabilities.


Don’t be fooled! Defi is not always about sunshine and rainbows. Behind the much-publicized good lurks danger. The Defi space is full of risks that can wipe out our investments if we don’t exercise caution. These risks present themselves in three broad categories: that is technical, financial, and procedural. Each of these broad categories has its specific shape of risks as has been elucidated. That said, any investor should take comfort that there are mitigation measures that they can take to protect themselves. Their judicious utilization will shield them from funds loss.

Blockchain and DLT Crypto Daily Topic

5 Portals That Rate And Rank DeFi 

There’s never a dull moment in the Defi sector. Continuous innovation in the space affords us products and solutions that ease our transactions. Additionally, the thriving Defi sector provides alternative investment avenues. Further, the investments attract better returns compared to those from conventional finance. It isn’t a wonder that investors in their droves keep boarding the Defi juggernaut.

In a sense, the ballooning of Defi is both a blessing and curse, A blessing in that it expands our choices and gives us greater say over our funds. On the other hand, many competing products could cause us headaches in product choices. The fact that genuine and fake projects dot Defi’s landscape further exacerbates this dilemma.

Luckily though, we’ve portals whose mission is to take the difficulty out of Defi investments. These scour the Defi sector, analyzing projects and trends for our consumption. In them, we have crucial allies for navigating the Defi maze. This article examines five portals that rate and rank Defi to our gain. We shall proceed to explore the features that make them a must-have tool in our investment journey.

1. DeFi Pulse

DeFi Pulse site enables you to find analysis and rankings of Defi protocols. Its salient features include:

Total Value Locked

This metric shows the amount of funds locked up in various DeFi contracts. A high TVL is indicative of a thriving economy. Defi Pulse uses a graph to capture the daily TVL progression.

Market dominance

This standard ranks projects according to their liquidity levels. Projects with higher liquidity are a stable and attractive investment option.

The Market Leader Share Metric

The Market leader share metric gives you a glimpse of the Defi categories available on Defi Pulse’s site. Major types include Lending, DEX’s, Derivatives, Payments, and Assets.

DeFi Pulse Farmer

The DeFi Pulse Farmer is the site’s newsletter. It covers the latest news and opportunities in the Defi space.

DeFi Lending

The Defi lending feature shows the interest that these protocols generate per year. Through this ranking, you can determine the most profitable investments. The platform also has a calculator that shows you how much interest you’d draw per month by locking a given amount of an asset.

DeFi Pulse Token List

The Token list is a directory of the legitimate tokens trading on Ethereum.  It serves to reassure users that they are dealing with a genuine project.

2. CoinMarketCap DeFi page

CoinMarketCap (CMC) has distinguished itself to be a trustworthy platform. Its Defi page lists tokens simply and conveniently, allowing for faster searches. Its other standout features are:

Cryptoasset Ranking

Here you find all the assets that CMC lists. You get to see the asset’s market cap, price changes within a day or week, its volume, and circulating supply.

Coin Details Pages

These provide in-depth information regarding a coin. The “market pairs” tab features prominently on these pages. Market pairs have unique confidence indicators that aid you in picking an exchange to trade. This confidence score mirrors the exchange’s liquidity.


Here you get to compare how the different exchanges fare. The exchanges fall into different categories, including spot exchanges, derivatives exchanges, and decentralized exchanges.

CMC’s Watchlist

The watchlist feature allows you to mark your favorite cryptos. In this way, you can easily track their performance.


Keep abreast of the happenings in the crypto and blockchain space with this tool. The embedded Signals feature sends you news directly from a project or a given crypto protocol.

3. Etherscan

Etherscan is an Ethereum based platform providing analyses of the Defi sector. It debuted in 2015 and one of the longest-running independent projects built on the network. Its mission is to provide fair access to blockchain data. Some of its key features are:

DeFi Leaderboard

Through Etherscan’s leaderboard feature, you get to find up to date analytics and rankings of DeFi protocols. The rankings take into account the total value locked into the smart contracts. From the leaderboard, one can skim the following information:

  • The project’s rank
  • The project’s name
  • Its category
  • TVL in USD
  • Price changes in a day
  • Price changes over a week
  • The project’s market capitalization
  • The market cap to TVL ratio

Token Tracker

Etherscan tracks and ranks two kinds of tokens. First is the ERC 20 token, and secondly, the ERC 721 token, also known as the Non-Fungible Token.

ERC 20 token Tracker

In ranking the ERC 20 token, Etherscan identifies the project by name, states its trading price, and changes in 24 hours. Additionally, it indicates the token volume within a day, the token’s market cap, and its total number of holders.

Non-fungible Tokens Tracker

This tracker ranks the top ERC 721 tokens. It identifies the project and its volume first within a day and finally in a week.

Yield Farms Tracker

Yield farming is an essential component of Defi. Accordingly, Etherscan has provided a rank for the top yield farming ventures. You’ll find the project’s name, its start date, addresses, trading prices, and market cap in this ranking.

4. Loanscan

Loanscan is your go-to platform in matters of Defi lending. It gives you access to financial information and analysis for credit issued on the Ethereum blockchain. The platform supports loans from Compound, dYdX, Dharma, and Maker DAO protocols. However, it plans to introduce additional protocols and blockchains in the future. Minimalist in nature, it has two significant features:

Earn Yield

Here you get to know the amount of interest you’ll earn investing in a given platform. Besides showing the earning in terms of USD, Loanscan also compares the yield across cryptos. 


This feature enables you to determine the cheapest platforms to seek credit. Again it lists the platforms and their lending rates for different cryptos. 

5. DeFiprime

DefiPrime is a feature-rich portal offering comprehensive information on different Defi projects. On this site, you’ll find news and blog articles relating to Defi. Additionally, you can conveniently search for projects under several categories. Some of the main categories include  Alternative savings, Daos, Payments, and Staking. The site eases the process of finding projects as it arranges them in niches. Thus, it saves you time.

Final Thoughts

The growth of Defi has placed us in a quandary. On the one hand, we celebrate the convenience of transactions, expansion of financial options, and notably, the financial freedom Defi affords us. That said, their proliferation introduces challenges in determining which products to choose. As the sector has its fair share of legit and fraudulent projects, this difficulty gains in significance. All is not lost, though. Some portals undertake analysis of the Defi market to keep us in the know. Using these portals takes the guesswork out of investing, guaranteeing us fruitful experiences in the space. 

Crypto Daily Topic Cryptocurrencies

DeFi Investing 101: A Complete Beginners Guide 

The crypto space is decorated with exciting projects. In the year 2020, however, none has caught the eye as much as DeFi has. DeFi is an acronym for decentralized finance, several protocols geared towards providing financial services while eliminating a central governing authority from transactions.

In the last year alone, the total value locked in DeFi funds has grown from $850 million to stand at $14.9 billion as of 15th December. This growth is indicative of the rising appetite for investments in the sector. The excitement that DeFi has created is pulsating; it almost sucks you in. Doesn’t it?

But as a newbie, should you take the plunge? What are the investment options available to you? Are there any pitfalls you should be wary of? If you’ve asked any or all of these questions and are reading this, then you’re in the right place. Today we journey through DeFi, providing a few pointers to help you along your investment journey.

Is DeFi Worth the Hype?

The kind of interest generated by DeFi speaks volumes about the sector’s potential. But what benefits does one derive from investing in the industry? The following are a few reasons why DeFi is attractive: 

  • Accessibility – DeFi products are available to anyone whenever they may be; with an internet connection, one is good to go.
  • Autonomy – through the elimination of central authorities, DeFi gives the users control over their financial activity.
  • Transparency – all transactions take place over the Ethereum blockchain enabling their public scrutiny before verification.
  • Higher returns- because of the attendant risk, the DeFi sector offers higher ROIs than legacy financial institutions.
  • Increased liquidity of illiquid assets- tokenization enables the representation of previously illiquid assets on the Blockchain enabling their easy transference.
  • Faster transactions – DeFi platforms allow for real-time P2P transactions saving time.
  • Affordable – DeFi platforms eliminate intermediaries from fees cutting transaction costs significantly
  • Borderless- DeFi allows seamless Cross-border transactions anytime, any day

What are The DeFi Investment Options Available to a Beginner?

The DeFi Sector replicates the functions of the traditional financial systems in a decentralized manner. Scanning through the sector reveals rich products for the interested investor. To the newbie, investing within the space need not be a chore. Here are a few easy pickings to set you off on your investment journey:

Decentralized Lending and Borrowing

Open lending protocols dot the DeFi landscape. These allow users with extra liquidity to loan it out to others in need of it. It works in similar ways to conventional lending. The only point of departure is that DeFi lending eliminates central authorities and intermediaries from the transactions.

Providing Credit through Smart Contracts and DApps

Smart contracts and DApps enable P2P interactions between lenders and borrowers. These tools spell out the terms of credit and repayment. Once the borrower complies with them, the platform automatically disburses the funds to their wallets. 

Collateralization is Key

They, however, have to provide collateral in the form of tokens. If they default on their obligations, they cede ownership of the tokenized asset to the lender.

Yield Farming

Yield farming is also liquidity mining. It is the provision of liquidity to a Decentralized Exchange (DEX) for a reward. At the center of yield, farming are liquidity pools, which are pools of tokens governed by a smart contract. They facilitate transactions over a DEX by providing the required capital. These rewards create extra income streams for the investor.

Rewarding Contribution

Investors who contribute to liquidity pools are known as liquidity providers (LPs). They can draw profit in two ways. First, they get token rewards for funding the pool. The rewards are an incentive to keep their funds within it. These rewards help to build up one’s total holding within an ecosystem.

Decentralizing Governance

Additionally, protocols may reward their investors with governance tokens. These tokens are essential in ensuring that the platform decentralizes fully. Developers may issue the tokens in several ways:

  • Through listing 
  • Distributing a share of the tokens to their founding community members before listing
  • Rewarding LPs with governance tokens besides the yield rates

Distribution of Fees

Secondly, the liquidity providers share fees that their pool attracts. DEXs mostly use the Automatic Market Maker(AMM) approach. AMMs allow P2P token trades within the liquidity pool Users pay fees- for instance, it is 0.3% of the transaction value on Uniswap– to complete their transactions. The AMM collects all the fees and distributes them to the LPs as a reward. 

Trading Over a DEX

The Decentralized Exchange (DEX) is an essential cog for the running of the DeFi protocols. They enable P2P transactions occurring in the space. There are different trading and, therefore, investment strategies one may adopt. Here we focus on a couple:

Margin Trading

Margin trading involves trading a financial asset using credit obtained from an AMM. The financial assets provide the collateral for the loan taken. After trading, they pay back the loan plus fees and keep the difference as profit. In case of a loss, the protocol will deduct the loan and expenses first. One should therefore exercise caution trading this way as they could lose the collateral.

Synthetic Assets

Synthetic assets are token representations of derivatives. These assets allow the tokenization of real-life assets, for example, property hence their trading on the Blockchain. Without them(synthetic assets), they would remain illiquid. 

No-Loss Games and Lotteries

Among DeFi s wide gamut of attractive services are games and lotteries. A good example is the PoolTogether game. It’s some risk-free lottery. Here investors put their funds in a shared pot. One participant wins the profit accruing, while the rest get their funds back.

Should I be Concerned About My Investing in DeFi?

Despite its attractiveness, the DeFi sector is still in its infancy. As such, it is essential to approach investments within it cautiously. Let us now shift our attention to a few concerns besetting the sector.

  • Price fluctuations – the cryptosphere as a whole is very volatile; the value of tokens and coins can spectacularly appreciate and depreciate in equal measure resulting in untold losses.
  • Scalability issues – Even with the implementation of Ethereum 2.0, there’s lingering skepticism that the sector can handle bulk transactions at a go.
  • Smart contract vulnerabilities – hackers have on occasions exploited vulnerabilities in some smart contracts to steal from DEXs.
  • Lower liquidity compared to the traditional financial systems – even though the sector shows so much promise, its TVL pales compared to the liquidity held by mainstream finance globally.
  • Over- collateralization of credit – borrowers have to stake an asset of higher value than the loans they qualify for

Stick To The Following, and You’ll Be Fine

By now, you’re getting the hang of DeFi investments. Now let’s look at some of the best practices to guarantee you a fulfilling investment journey:

i) Be Thorough in Your Research

Don’t take anyone’s word blindly. It’s good to listen to others but folks that up with your research about the market. This way, you can determine if any token is worth the time and money. It’s critical to examine:

  • The token distribution,
  • The team behind the project, 
  • The word on the street concerning the project
  • Partnerships the project has drawn
  • Its roadmap to implementation

The above scrutiny enables you to understand how trustworthy the project is.

ii) Spot the Opportunities

After verifying the project’s authenticity, the next step is to determine the most profitable tokens. Participating in the initial funding rounds enables you to acquire tokens affordably, enhancing your chance to turn positive returns.

Again it is essential to look at projects launching under unique funding models. Traditionally, such projects have generated a handsome profit for investors.

iii) Manage Your Risk 

After identifying the ideal project, now comes the actual investing. You then proceed to find an exchange that supports the trading pair that interests you.

Proceed to place your order and set your desired stop loss value. Consider initiating a trailing stop order. You can use it to maintain the stop loss as the asset appreciates.

Final Thoughts

The DeFi sector continues to grow, buoyed by the rising demand for its products. This growth comes with many different opportunities for any crypto enthusiasts. Compared to traditional financial systems, DeFi offers convenience, practicality, and affordable transactions. 

Additionally, it provides better ROIs than conventional financial systems. It’s easy to see why they could take any beginner’s fancy. That said, you should exercise prudence in your investment choices as they impact your venture’s profitability.

This article has traversed investments in the DeFi sector. It arms any newbie with the fundamentals that, if adhered to, will make their foray into DeFi a fulfilling one.


How Defi will Help To Bank The Unbanked

The statics couldn’t paint a grimmer picture. According to the World Bank’s findex report of 2017, up to 1.7 Billion people are either unbanked or underbanked. They, for the most part, cannot access financial services. Where they do, it is inadequate for their needs. As access to financial services impacts poverty reduction, this statistic makes for sad reading. We need urgent interventions to remedy the situation.

So how then do we increase this access? The financial space continues to pursue interventions that’ll expand the reach of its services. One such intervention is Decentralized finance (Defi), a  product that promises to disrupt the financial landscape. In this article, we discuss the role of Defi in enhancing financial inclusion. First off, though, a look at the global state of the unbanked.

Banking the Unbanked is more than a third world issue

Banking the unbanked is a problem for the LDCs, right? Well, not exactly. It is easy to assume that underdevelopment confines it to developing nations. Statistics do, however, tell a different story. Ironical as it sounds, a significant population in the developed world suffers the same problem. In the US, for instance, up to 25% of its households do not have access to banking fàcilities. To effectively tackle the issue, there’s a need for a broader perspective.

How is Defi a Solution to the Challenges of Realising Financial Inclusion?

Defi exploits gaps in the traditional financial system. Chiefly it seems to expand access to financial services. It does so in the following ways.

i) Eliminates the Need for Brick and Mortar Facilities

Despite the adoption of tech, legacy financial institutions still depend on brick and mortar premises. Setting up a physical branch network is expensive. Banks may, therefore, not feel compelled to establish these everywhere.

Furthermore, some regions are far-flung. Banks might, therefore, deem it unprofitable to invest in them. These reasons and others prevent many from enjoying financial services. Defi could be the remedy for such.

Digitalization of Transactions Expands Access

As stated earlier, Defi dispenses off with the need for physical premises. It runs on the Blockchain. Consequently, it digitalizes every financial function. 

This way, it expands financial services to the remotest of places. Hence it allows the hitherto unserved segments the enjoyment of these services.

A good Internet Connection is all One Needs

A reliable internet connection is all one requires to get set. Using devices such as phones, customers can:

  • Open accounts
  • Deposit and withdraw funds from their accounts
  • Make payments for goods and services
  • Make P2P funds transfers

Cross-segment Solutions

There are solutions for every income segment. High-end customers may use in-phone apps, offline codes, and QR codes to transact. The lower segments can use SMS.

ii) Lowers the transaction Costs

High transaction costs discourage entry into the financial sector. The decentralization of finance allows P2P trading. Deploying dApps and smart contracts eliminate intermediaries. These attract transaction fees per transaction. Their removal significantly lowers or eliminates costs. As such, it spurs demand and use of financial services.

iii) Enhances Access to Credit Through P2P lending and Non-collateralized loans

Many of the Unbanked find it difficult to attract credit. Normally, banks consider them a high-risk refusing to lend them. They require them to put up collateral that is often not available. Their perceived high-risk profile means that the banks price their loans higher than their peers.

Defi programs provide ways out for them. They incorporate crowdfunding and P2P lending.  Anyone can easily get credit in these ways. 

Additionally, repayment rates are affordable. Again, lending proceeds regardless of one’s credit score

iv) Allows the Entry of Undocumented Person’s

Banks require documentation for one to open an account. These may not be readily available for one reason or another. Inability to produce them leads to denial of service.

Defi, on the other hand, insists on the autonomy and privacy of users. As such, they have relaxed KYC requirements. This is in keeping with the true nature of distributed ledger technologies. Less stringent KYC requirements enable a higher uptake of financial services.

v) Round The Clock Transactions

Using the Blockchain, one can transact at any time from anywhere. You needn’t worry that the bank is closed for the day, weekend, or holiday. Even with the incorporation of tech, legacy financial institutions run by the workweek and hours. Certain transactions cannot go on past the work hours or days. This feature is a drawback, especially in emergency cases. Defi provides customers with the convenience to transact at the times of their choice.

vi) Interoperability of Functions

Defi allows cross-platform convergence. Through Cross-chain composability, two or more Blockchains can communicate with each other. The convergence enables seamless transfer of digital assets between them. 

Significance of Cross-chain Composability

Cross-chain composability is significant in that:

  • Users needn’t migrate from their networks to other compatible one’s to execute transactions
  • It cuts down on transaction costs
  • Enables near-instant transfers

On the flip side, banks tend to have differentiated products. Often this differentiation prevents convergence. It is, at times, impossible to carry out certain transactions across networks. Even when this is possible, the process is lengthy and costly.

Final Thoughts

The financial sector evolves rapidly. Players within the space continue to innovate to improve customer experiences. Some of these inventions aim at easing the accessibility of services offered. That said, the current financial systems are inadequate. To date, a significant portion of the global population remains unserved. Considering the correlation between poverty reduction and financial access, this reality is telling. We need solutions to expanding financial inclusion, and on this score, Decentralized finance offers much promise. Increased adoption will radically alter the financial landscape bringing financial services to more people.

Crypto Daily Topic Cryptocurrencies

The Best Use Cases For Decentralized Finance Projects

There’s hardly a facet of our lives left untouched by blockchain technology. From the most ubiquitous to the complex of our engagements, its effects are discernible. But perhaps the one sector where its effects are most discernible is in finance. The shortfalls of the legacy financial systems provide the right environment for innovation to sprout. Fintech firms are outdoing themselves in the production of products and technologies aimed at bettering users’ experiences.

This year has seen the emergence of many disruptive technologies. However, non features as prominently as decentralized finance(DeFi). DeFi is technology’s response to an inadequate financial system. 

In this article, we tackle two significant aspects of Defi. First, the significance of Defi projects. We also present the best use cases to give you insight into this revolutionary technology. 

Let’s get into it!

What is the Significance of Decentralized Finance Projects?

Defi projects are universally beneficial. The buzz they continue to generate emphasizes this truth. Here’re a few of the benefits associated with them:

  • They streamline transactions- smart contracts execute exchanges increasing efficiencies.
  • Increase the security of transactions- they draw on the Ethereum blockchain’s Immutability to secure trades.
  • They are scalable- Ethereum’s composable software ensures that DeFi protocols and applications are interoperable, giving the developers and product the flexibility to build on top of existing ones. 
  • Increase transparency of transactions- distributed ledger technology enables one’s peers to access and verify their transactions, curbing fraud.
  • It is permissionless- DeFi facilitates anyone with a crypto wallet and the Internet to access its applications regardless of their location.
  • Gives the user control over their data- Web3 wallets like MetaMask interact with permissionless dAapps and protocols to provide users custody of their assets data. 

What are the Best Use Cases for Decentralized Finance?

From the preceding, it is clear that DeFi projects are beneficial. The question then arises, where can we best use this technology? DeFi technology has wide usage. The following are some of the prominent use cases.  

i) Management Of Assets

DeFi protocols give users full custody of their funds. Additionally, Crypto wallets help one easily and securely interact with decentralized applications (dApps) for different transactions. These transactions range from trading and transferring crypto to earning interest on their crypto holdings. Tracking one’s assets becomes easy this way.

ii) Gaming

Defi platforms are interoperable. This feature has opened up opportunities for developers to build cross-platform protocols across a variety of verticals. 

Ethereum-based games have gained popularity due to their inbuilt economies and rewards. Take the case of the PoolTogether game. Its users acquire digital tickets using the DAI stable coin. They then pool their tokens for lending on the Compound money market.

iii) Provision of Credit

DeFi allows the creation of P2P lending pools and borrowing contracts. For instance, Compound -an autonomous interest rate protocol- integrates with most DeFi platforms, enabling users to earn interest in crypto that they’ve lent.

Compound’s smart contract automatically matches creditors to borrowers. Additionally, it determines interest rates by comparing the volume of the borrowed to supplied funds.

iv) Decentralized Exchanges

Decentralized exchanges (DEXs) are crypto trading platforms allowing P2P transactions. They achieve this by eliminating central authorities. As they’re non-custodial, they mitigate price manipulation, hacking, and theft.

DEXs are the mainstay of token projects. They enhance their access to affordable liquidity as they allow projects to list without fees. This way, they differ significantly from centralized exchanges that charge higher prices per listing.

The degree of decentralization varies with the exchange. Whereas exchanges may centrally host order books and other aspects of a users’ account, they don’t hold their private keys. Examples of popular DEXs in the DeFi space currently include AirSwap, Liquality, Mesa, Oasis, and Uniswap.

v) Decentralized Insurance

Investing in cryptos (DeFi included) comes with its fair share of risks. As such, different products that hedge against risks in this space are available. They help protect against market crashes, hackings, failure of smart contacts, among others. Nexus Mutual is one such example.

The players within the Defi space underwrite the risk. That is to say, they pool resources to acquire the premium providing the cover. Utilizing smart contracts makes the products transparent. Anyone can access the payout terms via the Blockchain.

vi) Issuance of Synthetic Assets

Synthetic assets are tokenized representations of derivatives. An Ethereum based smart contract locks them to the Blockchain. These derivatives may represent real-world assets, including fiat currencies, bonds, commodities, or even cryptos.

Synthetic assets are tradeable. Consequently, they allow the disposal and acquisition of assets that are illiquid or difficult to obtain. The Synthetix protocol is essential to their issuance. It employs a 750% collateralization ratio that guards against price shocks.

vii) Liquidity Mining

Liquidity Mining, also known as yield farming, is holding digital assets for rewards. Through smart contracts, owners of crypto assets get incentives for keeping rather than trading them.

Participation in these projects requires stacking liquidity provider (LP) tokens. One obtains these through providing liquidity to a DEX, such as UNISWAP. Users then stake their tokens to mind new ones for exchange.

viii) Identity Management

Traditional financial systems rely on KYC guidelines to comply with AML and CFT regulations. Defi, on the other hand, uses Know- your-transactions (KYT) protocols to deter fraud and other financial crimes. KYT uses the behavior of participating addresses rather than individual IDs to assess and stem the risk for financial crime. The assessment is in real-time. 

ix) Enhancing Financial Inclusion

In tandem with Blockchain-based identity systems, DeFi opens up financial opportunities to those previously excluded. It eases collateralization requirements for those seeking credit. Again it delinks creditworthiness from such aspects as income and ownership of property. Instead, it shifts it to attributes like financial reputation and activity. 

x) Development of Stablecoins

A stablecoin is a cryptocurrency whose value depends on a stable asset or group of assets. The supporting assets could be fiat commodities or other cryptocurrencies.

Intended to mitigate the volatility of cryptos, they have found a home in the DeFi space. They are essential in remittances, borrowing, and lending. Another area they’re gaining prominence in is the Central Banks Digital Currencies.

xi) Provision of Marketplaces

Many marketplaces have arisen to exploit DeFi functions. These allow P2P exchanges globally. From them, traders and consumers enjoy a wide variety of products and services.

Final Thoughts

The year 2020 could be defined as the year of Defi. During this period, interest in this disruptive technology peaked. The heightened interest attests to its significance. Not only will it increase access to financial services, but also ease transactions besides securing them. The technology has wide useability. For instance, it is essential in credit provision, creating market places, and even combating financial crimes. Even though it is still developing, it has shown the potential to alter our economic landscape for the better. As we expand research and development in the area, we can only look forward to exciting products and solutions in the space.

Crypto Daily Topic Cryptocurrencies

Top 5 DeFi Projects to Look Out for in 2021

The DeFi industry is still in its infancy stage but has already registered some impressive growth over the years. The industry’s total value is currently locked at $14.92 billion and is expected to grow in the coming year. 

There’s no doubt that DeFi brings about some unique solutions that are quite lucrative for investors of all kinds. If you’ve had your eye on the crypto industry for a while, there are chances that you’ve thought of putting your money in this exciting venture. But if you don’t know how to get started, you may feel stuck when choosing the best projects.

If you’re in this position, this article is just what you need. Buckle up, and let’s dive into the five best DeFi projects you should consider investing in the coming year. 


Anyone who has been in the crypto industry for quite a while will agree that decentralized exchanges were primarily associated with thin order books and poor UX. These issues, coupled with exorbitant fees, centralized gateways, and too many transactions was the reason dex enthusiasts demanded a simple yet effective decentralized exchange. 

Uniswap was launched in 2018 as an automated liquidity protocol for ETH and ERC-20 tokens. The platform has its own token, UNI, which is instrumental in governing protocol changes. 

One of the things that make Uniswap unique is that it doesn’t use order books but instead has an automated market maker. Users only need to select the assets they want to trade, and the platform automatically completes the transaction. 

Uniswap presents several advantages, which is why you should hop onto it already. It has no listing fees for new tokens, and users don’t have to complete the KYC checks. Besides, you get full custody of your funds and an excellent way to earn some extra tokens through the platform’s liquidity pools. 

If you choose to invest in the platform, you could either be a casual user, an arbitrageur, or a liquidity provider, all of whom play essential roles in the ecosystem. 

Yearn Finance

Yearn.Finance should be your go-to project if you’re looking to maximize the annual percentage yields on the cryptocurrencies you’ve deposited in DeFi. The unique project is an array of DeFi protocols built on Ethereum and designed for high-yield returns through liquidity pools and community governed lending protocols. Like Uniswap, Yearn Finance uses an automated market marker to allow users to convert tokens and earn from both lending and trading fees.

Yearn Finance is still relatively new in the industry, having been launched in February 2020. The platform had a rapid ascent in August, which saw its value rise to $650 million, accounting for a significant percentage of the entire industry’s value.

According to Jesse Walden, CEO of Variant Fund, “The unifying goal of all Yearn products is to create a simple, intuitive interface to all of DeFi.”

Yearn’s intuitive interface makes trading easier for all users. The platform is a portal for other DeFi products and has the YFI as its governance token. Yearn is considered entirely decentralized because the YFI tokens cannot be pre-mined, and the platform didn’t hold an ICO.

Although YFI was initially designed to be entirely community-governed, it can now be traded on other platforms such as Uniswap.

Curve Finance

You’ve probably heard of stablecoins, and if you know a thing or two about cryptocurrencies, they must have piqued your interest as an investor. Well, Curve Finance is an excellent DeFi platform if you’d like to trade-in stablecoins efficiently. It provides a solution to one of the most considerable problems in the DeFi sector; price slippage.

Like any other ideal marketplace, demand and supply forces determine the lending rates in DeFi. Now, suppose you want to trade between USDC and DAI. If the lending yield for USDC becomes higher than that of DAI, lenders will want to migrate to USDC. Curve Finance allows you to effectively do this and still earn better than you would with a regular DEX.

Switching between stablecoins effectively helps correct any anomalies in the interest rates that may result from mismatches in the demand and supply. Users can keep their profits once the interest rates are back to normal. 

Curve Finance provides one of the best ways to earn as a liquidity provider with returns of over 300% per year for BUSD. This is made possible by providing liquidity to other DeFi protocols using the deposited funds. This move generates interest for the other protocols, and Yearn, in turn, assigns the interest to liquidity providers. Additionally, they receive some CRV tokens and a cut of the trading fees from the platform.


Speaking of stablecoins, DAI is one you should definitely watch out for in the coming year. The coin has its price pegged to the US dollar, which helps maintain its value. Whenever users on MakerDAO, the protocol behind DAI, take out a loan, the stablecoin is created. The decentralized nature of the protocol, together with the lack of volatility, ensures that DAI remains stable and transparent. 

Initially, you’d only be able to use ETH as collateral for DAI. However, the stablecoin now supports different cryptocurrencies as collateral for a DAI loan. You can place your cryptos and get them back for the same price, despite changes in the coins’ values. 

There are plenty of stablecoins available, so what makes DAI any different? Well, if you are really against censorship by governments and other regulatory bodies, you’re going to love using DAI. It is backed by smart contracts, which makes it resistant to censorship. It also provides privacy when transacting since users don’t need to complete KYC checks or create any accounts. 


Kava developers used various technologies to create a system that would allow users of significant crypto assets to access collateralized loans and stablecoins. The network uses USDX as its stablecoin, and users get to collateralize their crypto assets in exchange for the stablecoin. 

To help you gain a leveraged position in the market, you could take out several collateralized loans. For each of these loans, you’ll receive an equivalent amount of USDX to create synthetic leverage. You can then earn a passive income from the platform by staking and bonding your USDX coins. 

Kava uses a dual token system that ensures usability and flexibility. The native token for the blockchain is Kava tokens, which double up as the governance and voting tokens. Kava tokens help to ensure the platform’s security through staking, which also earns users block rewards. 

Kava has already made a name for itself in the business world by gaining some major entities’ attention. For example, Arrington Capital, Ripple, and Cosmos are behind this DeFi project, which provides some assurance in its profitability and sustainability. 

Parting Shot

There’s no denying that the DeFi industry has taken giant leaps over recent months and will continue to do so in 2021. Like most investors, you’ll undoubtedly want to add long-term value projects to your portfolio, and DeFi is an excellent way to go about it. 

Sure, it’s totally okay to be skeptical about new ventures such as this. However, the DeFi industry has proven to provide solutions to problems poised in centralized finance. 

Just as you would with any other investment, it’s best to do your due diligence and learn as much as possible before placing your money in a DeFi project. These five projects should give you an excellent head start for your 2021 investments. 

Crypto Daily Topic

5 Crucial Principles for Investing in DeFi

Unless you’ve been blind to the crypto industry in 2020, you’ve undoubtedly caught wind of the DeFi craze. On the one hand, some investors are minting lucrative yields from the industry. On the other, some are losing their life savings. 

If you’ve been following the trend, you’ve probably heard loads of things about investing in the new industry. Influential Bitcoin advocate, Anthony Pampliano, tweeted that all it took to shut down most DeFi dapps was for Jeff Bezos to shut down AWS. The tweet sparked quite a debate on the decentralization aspect, which is the core of DeFi projects. 

Truthfully, investing in DeFi is quite similar to any other worthy project. It comes with risks, and investors need to do their own research before getting on board. 

Well, DeFi is mostly uncharted territory for most investors, including crypto enthusiasts- which is why this article will come in handy. Here are some crucial principles you need to have in mind before deep diving. 

Check the Number of Active Users 

The value of a blockchain is dependent on the number of users, seeing as the technology solely relies on networks. Just like other network companies like Facebook, the more people who join the platform, the more valuable it becomes. 

When determining whether to invest in a Defi project, check the number of active users on the platform. Luckily, unlike other network companies, DeFi projects built on Ethereum allow you to view real-time data on the users. With other platforms such as Twitter and Facebook, you have to wait for the quarterly reports to get this insight. 

Additionally, you should also check the growth in the number of users. You want to invest in a project that registers sustained growth that keeps accelerating over time. The network effects of blockchain mean that the number of users won’t grow linearly as you’d expect, but rather quadratically, as shown below.

Source: Dune Analytics

Put Your Money in What You Understand

“Never invest in a business you cannot understand.” – Warren Buffet.

If you cannot take it from me, then take it from the investment mogul. Buffet has built his empire by investing in multiple businesses over the years, but he always keeps it simple. You should apply the same principle when investing in DeFi projects. 

The DeFi world is complex, and before placing your money anywhere, you should ensure you understand as much as you can. Scam projects take advantage of the industry’s complexity to dupe investors into getting on projects that will not yield much, or worse yet, lead to significant losses. 

It sure is boring, but go through a project’s documents, including the whitepaper, beforehand and understand the basic tokenometrics. What is the project’s native token, if any? How exactly will you make profits? What is the project’s primary aim? 

Similarly, you don’t have to leap for every DeFi project that seems promising. Implement the 20-slot rule to help you separate the wheat from the chaff. 

Watch Out for Gas Fees!

Most DeFi projects will quote gas fees for transactions, which are simply service charges. You’ll probably not bat an eyelid on the gas fees, but here’s why you should. 

For starters, these platforms won’t display the gas fees in fiat currency. Instead, they’ll have it in ETH, which makes it easier for you to ignore it. However, the fees are absolutely real, and when gas fees are high, you’ll probably end up making a loss. 

Say, for example, you want to invest $1000 in tokens, but the service fees are $50 worth in cryptocurrencies. With just one transaction, you’ll already have lost 5% of your investment. 

Usually, gas fees will skyrocket when there are too many people using the network. Therefore, you end up paying more for the same transaction. Higher gas fees also indicate you’re following the crowd, in the case of FOMO. 

As a rule of thumb, stay away from investing in DeFi when fees are high to avoid FOMO and FUD

Don’t Invest in the Platform, Buy DeFi Tokens Instead

If you’ve read up a bit on investing in DeFi, this principle is probably contrary to what you’ve heard from the industry. Yield farming is the most common strategy in DeFi platforms and involves moving your tokens between protocols and platforms to wherever they’ll earn the most interest. This approach is time-consuming since you have to keep checking what platforms are gaining interest so you can move your assets there. 

Although this is a popular way to invest in DeFi, stay away from it. Instead, invest in the protocol, which is quite similar to buying the company’s stock. 

I know what you’re thinking; most of these projects are decentralized, and there are no companies. So, how exactly do you go about that? 

Most DeFi projects will offer governance tokens that allow holders to vote on proposed changes. In this way, you gain something similar to a shareholder’s vote, which is like buying the company’s stock. 

Therefore, instead of locking up your crypto assets on the platform or chasing after yield farming, consider investing in the platform’s native token. If the project is viable, your tokens’ value will keep increasing with an increased number of users, which is just what your investment portfolio needs. 

DeFi is only a Portion of Your Blockchain Investment

Investing in blockchain projects is a fraction of your entire portfolio, and your DeFi investments should be a fraction of that. In other words, your investment basket is an entire pie, blockchain is a slice of it, and DeFi is only a portion of the blockchain investments. 

The majority of your investments should be in stocks and bonds. A smaller portion should then go to the blockchain projects you’re interested in, and an even smaller portion of this in DeFi. This way, if the DeFi markets were to crash suddenly, you’d only make a small loss. 

Similarly, with most of your investments are in stocks and bonds, a crash of the entire blockchain market will only slightly affect your portfolio. 


Investing in a new industry requires caution, but when it comes to DeFi, you have to be particularly careful. There are two sides to the coin, and you could either make some good money or incur losses. Whatever the case, be sure it’s what you want to do and that you aren’t only following the ongoing DeFi craze. 

Every investment bears some risk, and you just need to decide which one’s worth your money. So go ahead and identify an investment you’d like and implement the above strategies for an enhanced fighting chance. 

Crypto Daily Topic

How to Spot Scams in Decentralized Finance 

If you have been in the crypto industry for more than a minute, you’ve probably heard about decentralized finance (DeFi). It is one of the fastest-growing sectors in the crypto scene, having registered an 1116% increase this year. DeFi grew tremendously, increasing from $674 million in January to $14.185 billion today.

However, the impressive growth also comes with a drawback; DeFi scam projects. 

Thanks to FOMO, scammers are jumping on board the DeFi craze. Blockchain’s properties of being permissionless and decentralized make it easy for anyone to launch fraudulent scams. Scam cases have been so prevalent that prominent entrepreneurs, such as Craig Wright, write off DeFi completely. 

The truth is that not all projects are fake. So, how do you separate the wheat from the chaff? 

More on that later, but first, let’s have a look at the common DeFi scams you should be aware of. 

Common Types of DeFi Scams

Although criminals will come up with all kinds of DeFi scams, they most likely will fall under any of these four categories. 

i) Exit Scams

Exit scams are perhaps the most widespread DeFi scams around. In this case, developers announce a project’s launch and stir the crypto scene with details of the project. Once they have people talking about the project, the criminals disappear with all the funds locked in the protocol. 

Exit scams are usually hard to trace, thanks to the decentralized nature of blockchain. However, in an isolated incident, the world’s largest crypto exchange, Binance, announced in November that it had recovered 99% of the funds stolen from the platform through an exit scam. 

ii)Pump and Dump

Pump and dump schemes are no stranger to the financial world. These schemes are typical in the stock world and are used to boost stock prices on false statements. Crypto pump and dump schemes work similarly. Investors who are in on the scheme start by creating a buzz around a particular DeFi token. They increase the coin’s awareness on different social media channels, which results in a price increase. More unsuspecting investors get on board and buy the tokens, which further increases its price. 

Once the group reaches its target, the initial investors start selling their tokens. The massive sale of the tokens causes a dip in the prices. While the initial investors make a profit, those unconnected to the scam deal with significant losses. 

iii) Admin Imitator

Most of these scams happen on social media platforms such as Twitter, Telegram, and Discord. Usually, DeFi developers use this platform to form a community around their projects. 

Scammers use these platforms to target unsuspecting investors. They pose as one of the members of the support team and convince investors by using the same image and usernames as legitimate members of the development team. 

The scammers then pretend there’s an issue with the project and inform users of the same. They ask the users to send ETH to a specific address or send their private keys to solve the issue. 

iv) Discord Bot Scam

This is a relatively new tactic that scammers are using. The criminals create a bot representative of the DeFi project, which they use to send updates, news, and features updates via a link. Users who click on the link are then redirected to a compromised version of the DeFi platform. These bot scams usually end up in numerous phishing attacks on the users. 

5 Questions You Should Ask to Identify a DeFi Scam

So, how do you tell a legitimate DeFi project from a scam?

Before you invest your money, you need to ensure the project is viable. Finding the answer to these five questions will help you identify a DeFi scam from miles away. 

What’s the Project’s Purpose?

It may seem like an obvious question, especially for an investor who’s new to the crypto scene. However, taking a keen look at the project’s purpose can help you avoid hefty losses. 

DeFi projects are supposed to be innovative, and the legitimate ones usually are. However, most of the upcoming projects have nothing to offer and are only riding on the ongoing craze. 

Before committing your money, have a clear idea of what the project is all about. Does it bring anything new to the crypto scene? Is it an innovative solution? How different is it from its competitors?

Is There a Smart Contract Audit?

Project audits are a common feature in the DeFi space. For smart contracts, audits are an essential part of the development and help to ensure the project’s code is secure. 

Despite it being a requirement for developers to deploy their code with an audit, most don’t adhere to this. The audits are quite expensive, so scammers won’t bother incurring the additional costs. 

Sure, an audit report for a DeFi project doesn’t mean the platform is entirely safe and shouldn’t be a decisive benchmark for the ideal project. However, it’s an excellent indicator to help you weed out scam projects.  

Who Are The Founders?

Most investors don’t give a second thought about the founders, but it helps to have some information on them. 

Anonymity in the crypto space is not new; after all, it is one of the pillars of blockchain technology. Therefore, it’s not unusual to come across DeFi projects whose founders choose to remain anonymous. 

So, are all DeFi projects run by anonymous founders a scam? Not at all. However, if the founders are anonymous, they cannot be held accountable in case anything goes wrong. So, you can always go for a project with unknown founders, but you run the risk of losing everything and having no one to go after if you lose your money. 

Is There Any Developmental Activity?

One of the best features of DeFi is that most of the platforms are open-source. This means that the development team avails the code to the public so that anyone can make changes to it. Therefore, if you have any code-knowledge, you can always check out the source code to identify any malicious activity. 

The best part about open-source DeFi projects is that if they raise enough interest, more people get on board. You, therefore, have more people checking out the source code for any bugs; thus,  increasing the chances of spotting anything off. 

You should also check the developer’s activity. Are they often deploying new codes? It may not be enough to spot a fake, but a project with zero developer activity should undoubtedly raise some eyebrows. 

How is the Token Distribution?

When finding out more about a DeFi project, you should always pay keen attention to its tokenomics. For starters, find out more about the token’s allocation. 

As expected, the founders will probably hold the lion’s share for themselves. However, this could end up being a problem if the developers are scammers. They can easily hike the token’s prices and later dump their coins in the market, causing the token to lose its value. 

Additionally, the distribution model used is essential. An exclusive presale will mean that only a select few will acquire the tokens at first and cause hype around the project on social media. Airdrops are likely to cause a sell-pressure, while IEOs are more reliable since crypto exchanges put their reputation on the line. 

Do Your Own Research!

Figuring out whether a DeFi project is about to dupe, you can be an uphill task- yet, it’s quite necessary. After all, no one wants to lose their hard-earned money. 

Although these five crucial questions will give you a headstart, they aren’t conclusive. Before placing your money in a sinking ship, do your own research and learn all you can about the project. Not all DeFi projects are a scam, and if you get a legitimate one, it could end up being a worthy investment with massive profits.

Crypto Daily Topic Cryptocurrencies

Top 5 Trends Driving the Crypto Market Right Now

2020 was an interesting year for crypto. From the market crash in March to Bitcoin rebounding past $15k for the first time in two years, to DeFi exploding than ever before, this was not your average year for the industry. But beneath these events were unseen undercurrents that were driving everything. 

As you already know, the crypto market moves to its own beat. It all comes down to supply and demand – the causes notwithstanding. This is starkly different from traditional currency, whose value is set and controlled by central banks. Other factors are artificial actions such as the stimulus protocols being conducted across the globe right now to ameliorate the economic shock of the Covid pandemic. 

What’s the point? That the crypto market is interesting, and the events driving it one side or another are worth a closer look. A lot is happening behind the scenes: from a change in attitudes to stablecoins to new and bold crypto products. 

This article looks at the trends that are currently driving the crypto market and how. 

#1. Stablecoins

Stablecoins are a special kind of cryptocurrencies pegged to real-life assets, so they’re not subject to the wild volatility experienced by ‘normal’ cryptocurrencies. Stablecoins can be pegged to fiat, other cryptocurrencies, or exchange-traded commodities like aluminum or gold. The fact that they are attached to a fixed unit doesn’t mean that their prices never vary. Their market prices tend to fluctuate around their underlying assets. 

Stablecoins have the ability to bridge the gap between fiat and digital currencies. They provide the stability of fiat while maintaining the security of crypto. This year, stablecoins kicked off exceptionally well, recording a $90 billion transactional volume in a single financial quarter. 

As an investor, you can make money off stablecoins.  For instance, you can acquire a stablecoin for $1 and sell it on the market at a higher value of, let’s say, $1.0003. The extra amount might seem meager, but the amount of profit accrued becomes very substantial when you multiply this figure by thousands or millions. 


DeFi (decentralized finance) is, without question, one of the megatrends pushing the crypto space right now. DeFi is the idea that people can have complete financial autonomy. You know, without an interfering government or controlling bank. It’s a revolutionary idea that’s not just timely but liberating. Countless projects are now rushing to introduce new and interesting DeFi products. Things like yield farming, the latest DeFi craze, entered the crypto lexicon less than two years ago. 

The vast majority of DeFi projects are based on Ethereum. Ethereum pioneered smart contracts and decentralized applications (DApps) – which explains everything. The network’s market cap increased by 60% in Q3 2020. This growth percentage was seen by increasing market value from $25 billion to $40.5 billion by the end of September. The top 10 DeFi coins’ market capitalization by total value experienced a greater increase within the quarter. This was seen through the 345% increase (rise from $1.2 billion to $5.3 billion). The market capitalization of DeFi now accounts for roughly 12% of the blockchain’s total market value. As of now, DeFi is the driving narrative for the Ethereum ecosystem.

DeFi protocols such as Compound, Balancer, Curve, and other varied platforms are introducing new and exciting DeFi products. From staking to yield farming to borrowing, investors are rushing to DeFi to carve out financial value. 

#3. The Possibility Of A Cashless Society

One of the biggest upheavals to the world’s normal order in recent times was the Covid pandemic. In the blink of an eye, the pandemic had interrupted everything we hold dear – social life, economies, and yes – deeply held attitudes. Naturally, people began to rethink a lot of things. 

What previously seemed odd was now the norm. Working remotely? Check. Crypto payments? Check. Now, being forced to do things differently can sometimes be a good thing, which is the case with these scenarios. And it seems like these practices will remain even after Covid is long gone. It wouldn’t be an exaggeration to say that a cashless society is a possibility in the future. 

Meanwhile, the blockchain space is expanding quickly, as applications for interacting with crypto also advance. These days, you can easily buy crypto with just a credit card. This is a huge leap from the early days when you had to meet with a stranger to purchase crypto (and we all know that’s a risky proposition). Also, it’s not just the young and savvy population that’s embracing crypto. It’s institutional investors too. 

#4. Derivatives

Derivatives are another trend driving the crypto market. Bitcoin derivatives dominate the market at the moment, but Ethereum is catching up. This is a strong showing of Ethereum, and it hints at a derivatives economy buoyed by Ether and possibly other crypto’s derivatives. It also means both individuals and institutional investors are beginning to see Ethereum as a worthwhile investment and trading asset. Another thing – it shows that the crypto market is maturing. When other cryptocurrencies join Bitcoin in the derivatives club, it will be a diverse and more resilient market. 

#5. Cryptocurrency is becoming big

Crypto is probably enjoying its highest review ratings in years. Bitcoin, the pioneer of them all and the most successful one, is not viewed as a bubble anymore. And its market cap has exploded to eclipse that of superstar companies such as Coca-Cola and Intel. Also, crypto’s underlying tech – blockchain, is now being embraced by a multitude of industries. Like we’d mentioned earlier, institutional companies are getting involved in crypto more than ever before. 

Closing Thoughts

When we study the undercurrents of the crypto market more closely, it’s easier to tell which direction it’s veering to. And the current trends indicate nothing but good things for the future of crypto. Stablecoins are roaring, as is DeFi, and indications point to Bitcoin sharing the derivatives spotlight with other cryptos in the near future. In short: these are the trends driving the crypto market right now. 

Crypto Daily Topic Cryptocurrencies

Read This Before Investing in a DeFi Project

Decentralized Finance (DeFi) is a system of financial applications that are powered by smart contracts. Defi has exploded in popularity because of its unprecedented features on cryptographic security, fraud-free transactions, and autonomy. Whether it’s investing, loans, insurance, banking, lending, and staking, pretty much every financial offering exists in DeFi. 

The space’s dramatic growth has led many investors rushing in to get a slice of the DeFi pie. But just like with crypto investing, you can gain some handsome profits, but you can also incur devastating losses, especially if you’re not careful. 

This article will guide you in what you need to do before dipping your feet in the DeFi investment waters. But before that, let’s look at what investing in DeFi entails. 

DeFi Investing: The Basics 

There isn’t much difference in the investment opportunities offered in the traditional financial setup and Defi. Decentralized lending, for instance, follows the same principle as lending in centralized finance systems, except this time, smart contracts are involved, and the returns are invariably better. Smart contracts are used to hold collateral from borrowers and also automatically deliver accrued interest to lenders. There’s also ‘staking.’ Staking in DeFi is when you lock up your crypto and get the right to participate in a network and, in some cases, earn rewards for depositing your crypto. 

We also have ‘yield farming’ in DeFi. Introduced by Synthetix and popularized by Compound, yield farming involves locking up your crypto assets in a project’s protocol and earning rewards. 

Defi investors use their insight to spot lucrative opportunities, just like traditional finance investors capitalize their knowledge on assets such as real estate.

With that, let’s get straight to:

What you need to do before investing in DeFi. 

#1. Carry out extensive research

Before you invest your hard-earned money in a Defi project, it helps to do your research. To verify whether a project is legit, head to Google, and type the project’s name followed by the word “scam.” If this project is a scam, someone else might have already flagged it.

You might have typed the name of the project alongside the term “scam,” and nothing has popped up. This does not mean that the project is completely legitimate. You can use Defi tokens and protocols, which anyone can view since the project is open-source. If you can, evaluate the project’s codes to see if the project is genuine. This method particularly helps if you have programming skills or know your way around smart contracts. 

#2 Observe the number of users and what they are saying

The more the users on a blockchain project, the more the value. With blockchain projects (mostly those on Ethereum where several Defi projects are built), there is real-time reporting. This can be done through, which is for raw data, or Dune Analytics, which focuses on user-friendly reports. With these tools, you can look at the total users in a given Defi project coupled with the increasing number of users. The goal is to see real people using these protocols. Keep in mind that some of the data you see can also be corrupted as an elaborate ploy to lure in unsuspecting users. These accounts should belong to quality users, and their growth should be quadratic. If you observe such users utilizing the protocol, then it’s genuine.

Also, be keen on what trusted security professionals are saying and writing about these projects. Defi projects typically subject their smart contracts to manual security audits with an air-tight reputation. Some of them include Certik, Quantstamp, and OpenZeppelin.

You can also check what people on Twitter, Reddit, and DeFi-related sites and forums say about the project. You can also check whether the project is recognized by Defi Prime, Defi Pulse, and Defi Market Cap. 

#3. Verification by Etherscan

Once a project has verified their smart contracts on Etherscan, a unique code will be availed. When viewing the contract, the code you see is the same code you ought to get when using it. Of course, this does not mean that your project is invulnerable to hacks or it’s not a scam. Still, having a code that can be publicly assessed without the fear of the code being changed is vital.

ETHProtect is a service provided by Etherscan that enables people to report suspicious activities on the Ethereum blockchain. A “Red Shield,” issued by Etherscan’s security analysts and the Taint Inference Analysis Engine, is something to watch out for when looking at Defi projects. These usually mean that people have launched a complaint against a certain project. When you see a Red Shield attached to a project, know that it’s been identified as a scam. 

#4. Watch out for fake projects

Many fraudsters are ahead in the game – they create fake projects with legit-sounding names. But when you look more closely, you’ll find that the project’s links are either dead or lead to nowhere. Or it may have a website, but it looks all spammy, like requiring people to sign up for freebies – and other suspicious activities. 

You can also know if a project is legit by checking what exchanges its tokens are listed on. It’s almost impossible to find a scam project listed on reputable exchanges like Coinbase, Binance, Huobi, etc. Instead, fake projects are listed on decentralized exchanges or little-known centralized exchanges. 

Closing Thoughts 

Investing in DeFi can be lucrative, but watch out for the loopholes. The crypto space is full of scammers looking to make a quick buck at the expense of unsuspecting users. Luckily, there are ways to identify a fake DeFi project way before you can be duped to invest in one. Also, you can always analyze a project’s code for the tech-savvy investors and determine if it’s legit. Also, don’t forget the first rule of crypto investing: don’t put in more money than you can afford to lose!

Crypto Daily Topic

Top Liquidity Pools for Earning on the Go 2020

Liquidity is a crucial aspect of any trade, much less the DeFi trade, which is notoriously volatile. Liquidity is how fast an asset can be converted into cash in the market. In DeFi, liquidity refers to the availability of liquid assets in the market.

DeFi is now booming more than ever before. New projects are being launched nearly every week – with each one bringing closer to the decentralized finance dream for millions across the world. Suffice to say, DeFi is inevitable. As such, it’s important to know the most important concepts of the idea, as well as projects that are helping advance those ideas.

This article talks about liquidity pools and some of the best of them in DeFi in 2020.

What are Liquidity Pools?

In DeFi, liquidity pools are tokens that are locked up in a smart contract. They facilitate efficient trade by providing liquidity and are exploited largely by decentralized exchanges (DEXes) to allow for seamless trade and prevent massive price swings.

Projects like Bancor were the first in the door but were quickly followed up by versions with trendier options such as Uniswap, Balancer, Curve, and so on. Balancer even showed the DeFi world that a liquidity pool could have more than just two assets in a single liquidity pool at any given time.

Liquidity pools eliminate the possibility of manipulation that can occur in centralized order books. They also lower gas fees, leveling the playing field for all participants. Also, liquidity pools allow liquidity providers to earn rewards. As such, liquidity pools are an excellent way to earn passive income.

With that, let’s get to:

Best liquidity pools in 2020

#1. Uniswap

Uniswap is one of the earliest liquidity pools and one of the best in terms of offerings. It’s an Ethereum-based token exchange platform that supports 50% Ethereum contracts and 50% ERC20 contracts. On Uniswap, exchange ETH for any ERC20 token in a peer-to-peer and decentralized fashion. The platform is open-sourced, meaning you can create an exchange pair in a pool of your choice for a token of your choice.

You can deposit crypto and receive a Uniswap token in return. For instance, when you deposit USDT, you’ll receive an equivalent amount in UNI (Uniswap’s native token). A liquidity pool on Uniswap could be yDAI+yUSDT+yTUSD+yGUSD, LGO-WETH, etc.

#2. Curve Finance

Curve finance is a decentralized liquidity pool running on top of Ethereum. Curve also supports stablecoin trading with low slippage. The platform started out without a native cryptocurrency but has just launched one – CRV.

Curve currently supports several pools, including yDAI, yUSDC, and yUSDT. It also supports stablecoin and asset swapping with Compound, PAX, etc.

#3. Balancer

Balancer is a price tracker, liquidity provider, crypto exchange, and decentralized asset manager based on Ethereum. It allows traders to exchange various currencies with minimal slippage. As well, anyone can add liquidity to a customizable pool and earn returns.

Balancer supports up to 8 crypto assets, including USDC, DAI, and ETH. In a Balancer liquidity pool, you can have up to 8 tokens at any time. For example, a pool can have several tokens with their respective percentages adding up to 100%.

#4. Bancor

Bancor is an Ethereum-powered protocol exchange that lets you trade between different cryptocurrencies. Bancor supports pooled liquidity, too, and utilizes an algorithmic market-making mechanism to ensure liquidity and keep an accurate report of crypto prices.

Bancor’s liquidity pool is known as the Bancor relay. The Bancor token is a stablecoin that helps mitigate liquidity volatility. Bancor supports liquidity pooling for the BNT token, ETH, ERC20 tokens, and its stablecoin USDB. Using the BNT token, users can swap tokens between other blockchains.

Currently, the Bancor network supports EOS and Ethereum blockchains but can theoretically be adopted by any open-source application that enables value exchange.

#5. Kyber Network

Kyber is another Ethereum-based liquidity and exchange protocol that allows decentralized applications to provide liquidity for users. The network features an ecosystem of vendors, wallets, and users who can just swipe and instantly send/receive tokens in a single transaction.

Kyber features a native utility token, KNC, which rewards liquidity providers and facilitates the network’s governance. As such, token holders can stake the token to take part in governance and earn crypto.

#6. Convexity Protocol

Convexity is a protocol built atop Ethereum’s blockchain that allows users to deposit liquidity and earn returns. It also provides users with an interactive interface to trade in fungible ERC20 tokenized options known as otokens. Users can create collateralized options contracts and sell them in the form of tokens, therefore earning a premium on their collateral.

#7. ICTE Protocol

ICTE protocol is a liquidity pool and a cross-blockchain inter-exchange protocol. ICTE connects both local and web-based exchanges, intending to solve scalability, security, and custodial issues while offering liquidity solutions to stockholders.

#8. KeeperDAO

KeeperDAO is a DeFi protocol based on Ethereum. It’s an on-chain DeFi underwriter that also acts as a proxy volatility fund. KeeperDAO also provides backstop liquidity to support on-chain lending and synthetic asset protocols. KeeperDAO interacts with other DeFi platforms such as Compound to ensure liquidity providers are rewarded with interest at all times.

Closing Thoughts

Liquidity pools provide much-needed movement in decentralized exchanges, aiding the seamless trading of currencies. They are also one of the many DeFi ways individuals can earn through DeFi. These liquidity pools, and others not on the list, are one step closer to financial autonomy for DeFi fans everywhere.

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Where Did Bitcoin Go? Wrapped Bitcoin Assets are Encouraging the Supply Crisis!

Where Did Bitcoin Go? Wrapped Bitcoin Assets are Encouraging the Supply Crisis

In a blog post that came out on Nov 20, Binance reintroduced BTCB to the world. BTCB is a wrapped Bitcoin asset intended to bring liquidity from Bitcoin to Binance Smart Chain’s DeFi ecosystem.

However, hodlers may be cheering the reintroduction to BTCB for a completely different reason: each Bitcoin locked on Binance Smart Chain may contribute to an already very present Bitcoin supply crisis.

First announced in 2019, Binance initially saw wrapped Bitcoin only as a vehicle for traders to obtain the cross-chain asset exposure without leaving the Binance Smart Chain. However, since then, the utility of wrapped Bitcoin has expanded due to the maturation of the DeFi sector.

For instance, a wrapped Bitcoin token on Ethereum, or WBTC for short, has enjoyed massive success ever since its January 2019 launch: it’s currently ranked #14 when sorted by market capitalization on Coinmarketcap and has found significant adoption in various protocols such as Aave and Uniswap, whose contracts rank among the top-10 holders of WBTC.

In their blog, Binance noted that the pattern of adoption of WBTC might be seen with BTCB as well. The wrapped Bitcoin could be used for minting various stablecoins with BSC-native protocols such as QIAN and Venus. It could also be used as collateral for lending protocols such as CREAM, as well as in yield farming and liquidity mining protocols such as Bakery, Beefy, and Pancake.

According to what Binance “Proof of Assets” page, there is currently almost 10,000 Bitcoin on BSC — netting to over $181 million. However, the blog post specified that only 2,000 of them are in circulation.

Other smart contract-enabled chains are intending to compound the growing scarcity. If the success of wrapped and cross-chain Bitcoin-based assets continues to grow, institutions that are looking to hoover the Bitcoin supply may as well be faced with mounting scarcity.

Co-founder of OpenLaw Aaron Wright pointed to such a possible future in his Twitter post, noting that only 0.6% of BTC is now wrapped and being put to Ethereum. 

Crypto Daily Topic

Best DeFi Podcasts for 2020

Podcasts have exploded in recent years. As a medium, they provide a platform to discuss ideas in a relaxed and open setting. And frankly, most people would rather listen or watch interesting audio or video than read a lengthy 10k word article. Another emerging topic of interest is DeFi, short for decentralized finance. Podcasting and DeFi meet at an interesting intersection in modern times, and that’s why DeFi experts are using them to connect with a curious base. 

This article brings you the best DeFi podcasts for 2020, so you can never miss what’s trending. Whether you want bite-sized chunks to introduce you to the world of DeFi or the technical stuff, this article highlights the top podcasts for just that. 

#1. Into the Ether 

This is an official podcast of ETHHub, and it focuses on the Ethereum ecosystem with the show run by Gnosis Product Manager Eric Conner and Set Protocol Product Marketer Anthony Sassano. 

The podcast is produced weekly, alongside a newsletter and a repository of documentation to increase awareness on Ethereum and Ethereum protocols.

So far, the podcast has compiled more than 100 episodes on all matters Ethereum, including Ethereum-based applications, protocol upgrades, news, and current issues affecting the Ethereum community. 

#2. Unchained and Unconfirmed

Unchained and Unconfirmed is a DeFi podcast hosted by crypto and blockchain journalist and former Forbes editor Laura Shin. Podcast offers weekly insights into current trends in crypto and DeFi as well as personalities in the space that are making headlines. 

Shin has hosted Unchained since 2016. The show features hour-long interviews with prominent personalities in blockchain and DeFi. Unconfirmed constitutes 20 minutes conversations with industry experts on newsworthy events and begun in 2018. 

#3. The Global Crypto Podcast

This podcast is hosted by James Preston, Marc Forrest, and Shaun Ritson. The team aims to be the leading source of credible DeFi news and information in South Africa, and they hope to do so with a “South African” flavor. 

The show features conversations and interviews with notable figures in the industry with the goal of informing people of the power and potential of decentralized finance and technology. New episodes are released weekly on Mondays, 6 pm (UTC).

#4. The Ethereal Podcast

The Ethereal podcast is part of the Ethereal Summit, an initiative by several DeFi technologists, entrepreneurs, and investors engaging with Ethereum and its latest developments. The Ethereal team wants to inspire a “decentralized future.” 

Hosted by @DeFi_Dad, the Ethereal podcast features interviews with various DeFi builders, as well as leaders of DeFi outfits such as MakerDAO, Nexus Mutual, SKALE, and so on. The goal is to get these figures to give first-hand insights into the challenges involved in building DeFi solutions and decentralized techs. 

#5. Abel’s Abstracts 

Hosted by ETHGlobal organizer Abel Tedros, Abel’s Abstracts focuses on conversations with various builders of Web 3.0 and DeFi solutions and updates on DeFi-specific issues and global topics like covid-19 and how they are affecting financial markets.

#6. Chain Reaction

This is a podcast by Delphi Digital co-founders Tom Shaughnessy and Kevin Kelly. Chain Reaction aims to focus on research on economic, legal, and technical issues affecting the evolvement of decentralized finance and distributed ledger technologies. 

Delphi Digital independent research and consultancy on the crypto market, and this expertise shines through on the podcast as the team explores the work of various players in the DeFi space, such as founders, investors, etc. 

#7. Zero-Knowledge

The Zero Knowledge podcast is run by Videopath and zkSummit co-founder Anna Rose and Fredrik Harryson of Parity Core. The podcast focuses on interviews with zero knowledge experts and its relation to the decentralized web and DeFi.

Research on zero-knowledge proofs is key to cryptography, enabling individuals to transact on blockchain networks privately and securely. The podcast has so far had more than 130 episodes, including interviews with tens of DeFi builders.

#8. Blockcrunch

Launched in February 2018, this is a weekly podcast featuring Spartan Capital Head Of Research Jason Choi, with a focus on providing investors in blockchain and DeFi with relevant information. 

Choi explores a rich variety of topics, including investment research, DeFi startups, exchanges, hedge funds, and generally the crypto market landscape. 

#9. Epicenter

Epicenter is one of the earliest DeFi podcasts – having come into the space in 2013. Indeed, the podcast helped popularize the term “DeFi.” 

Epicenter hosts include Adam B. Levine of Let’s Talk Bitcoin Podcast, Sebastian Couture, Brian Fabian Crain, Chorus One co-founder Meher Roy, Cosmos Research founder Sunny Aggarwal, and Gnosis COO Friederike Ernst. 

So far, the podcast has 350 plus episodes in its catalog, which includes interviews with developers and builders across the DeFi spectrum.

Final Remarks

The DeFi space is relatively new and can be baffling, especially to newcomers. Whether you’re a beginner or a longtimer in the DeFi space, you’ll find that these podcasts are definitely worth checking out. 

Crypto Daily Topic

Top DeFi Tokens of 2020: Check Out Number 5

Which are the best DeFi tokens of 2020? DeFi tokens have had a great year. It’s not an exaggeration to say they could very well eclipse ‘normal’ cryptocurrencies in the future. As DeFi continues to explode and the year nears a close, it helps look at the tokens that have defined 2020 and will probably continue to do so in the coming year.

This list doesn’t just follow the tokens that are the highest in market cap. It also looks at the most promising and exciting tokens. 

#1. Chainlink 

Chainlink is a decentralized oracle for connecting blockchains to external data and information. The Chainlink protocol, which includes the LINK token, allows smart contracts to operate without relying on permissioned or centralized information. For instance, a developer can run a sports betting contract that relies on an external oracle for sports scores. Chainlink has proved especially popular, with countless DeFi protocols including Aave, Ampleforth, Celcius, Arbol,, Nexus Mutual, and Synthetix all utilizing its smart oracles function. This popularity has catapulted it to the top ten in market cap, sitting at #5 at the time of writing. The LINK token, which began the year going for $2, already hit $12. 

#2. Maker (MKR)

Maker is one of the earliest stablecoins in the DeFi space and one of the most resilient. Despite (and probably because) of its low total supply of slightly more than a million, the token is a huge hit in  DeFi, judging by its current per-token value of $513. And this is a climbdown from the highs of $1,700 in 2018 before the token plummeted during the 2018/2019 crypto winter. In 2020, it got a reprieve after reaching $600 this year. With its MKR token, the protocol makes up what is probably the best example of a stablecoin system: a collateralized debt position powered by its  stablecoin – DAI, which maintains stability for the protocol by using various economic incentives. MKR will be one of the tokens driving the DeFi space in the near future and beyond. 

 #3. Aave (LEND)

Aave is an open-source, decentralized protocol that allows users to create money markets, earn interest on their deposits, and borrow funds through the LEND token. With a market cap of $859 million, Aave is currently the 4th biggest DeFi token. Aave has had an incredible year. It started off at a mere $0.009 in  January but has now clocked $73 per token, which is remarkable even in crypto. 

#4. Synthetix Network Token (SNX)

Synthetix is a blockchain protocol that lets anyone gain exposure to a wide array of assets. The platform is credited for introducing yield farming in DeFi, though it’s now been overrun by platforms like Compound and Aave. Still, the token continues to ‘hold the line,’ as manifested by its current position of #9 among  DeFi tokens and #40 among all cryptocurrencies. With a market cap of nearly $500 million, SNX demonstrates its resiliency. Synthetix supports a smart contract infrastructure and incentivization system that will continue to propel it upwards. 

 #5. Dai (DAI)

Part of the Maker ecosystem, DAI isn’t a token that you buy to HODL. Still, it’s an excellent idea to buy the token and hedge your portfolio against volatility. Dai is probably the most elegantly designed stablecoin in the world today, with an ingenious incentivization and collateralization system that securely puts its value at a 1:1 ratio against the US dollar. While other stablecoins achieve stability by using clumsy ways like holding US dollars in the bank, Dai uses a more accurate and flexible tech-based system. Anyone can also create their own Dai if they put up collateral. 

#6 Compound (COMP)

Compound is a DeFi protocol that allows anyone to lend, borrow, and provide liquidity and earn returns. Comp exploded after it started distributing its native token, COMP, in June this year. It’s definitely one of the hottest tokens in DeFi right now, featuring a market cap of $526 million and a per-token value of $124 at the time of writing. COMP is an Ethereum-based mechanism used as a governance mechanism of the Compound ecosystem. As the Compound platform continues to expand, we’re sure to see the value of COMP following the lead. 

#7. 0x (ZRX)

0x is a decentralized exchange protocol that allows developers to create their own exchanges. The project’s founder calls it the “Craigslist for cryptocurrencies” in that anyone can build an exchange and post it online. Despite its promising value proposition, the 0x token, ZRX, has had the slowest growth this year. In January, you could buy the token for around $0.20, and it’s now sitting at $0.36 at the time of writing, with a market cap of $273,926,375. But the dismal growth of the token does not discount its potential to break through in the future. The 0x token is one to keep sights on. 

#8. Ampleforth (AMPL)

Ampleforth kicked off the year trading at around $1, went to rise to $4 in July, before sharply clamping down to around $1 again. Ampleforth calls itself a cryptocurrency “like Bitcoin,” but with a daily change in supply, insuring against market shocks.  Ampleforth wishes to solve what it calls the “dangerously correlated” crypto market by adding diversity to the ecosystem. While most cryptocurrencies follow the Bitcoin price pattern, the AMPL token matches to its own beat. This could prove an excellent hedge for your crypto portfolio. 

#9. Augur (REP)

Augur started the year sitting at around $9, and if now trades at $14 in November, a dip from around $20 in August. Based on Ethereum, Augur, via its native token – REP, aims to power a prediction market where users can earn money if they predict winning outcomes. Augur also acts as a decentralized oracle for verifying real-world events. These events could be anything – from natural events to election results to football matches’ outcomes. At the time of writing, Augur is at position #75 in the market and continues to be one of the DeFi’s best.

#10. Terra (LUNA)

Terra is a DeFi protocol that wants to expand everyone’s financial  inclusivity through its native token, LUNA. The Tetra team wants to “set money free” by building an open, global financial infrastructure. This infrastructure constitutes a family of stablecoins that allow users to earn mining rewards, giving people an incentive to participate in the network. Terra launched its mainnet in April 2019. It currently offers stablecoins pegged to the US dollar, South Korean Won, the Mongolian tugrik, and the IMF’s Special Drawing Rights basket of currencies. Users can trade LUNA as well as stake it and earn interest. LUNA token holders can also participate in the platform’s governance. After kicking off the year at $0.24, LUNA’s price nearly doubled around July before cooling down to around $0.33 in November. With its value proposition, Terra is set to be one of the most important DeFi presences in the future. 

Closing Thoughts

Ten years ago, the crypto space was talking about Bitcoin and decentralized currencies. Now, we’re talking of decentralizing the entire finance space. The above tokens represent some of the most exciting decentralized finance projects and their tokens in 2020. With a rapidly evolving DeFi space, you can expect anything in the coming year, but for now, these are among its biggest stars. 

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What’s Injective Protocol All About? 

In this age of DeFi, project after project is competing to provide users all over the world with the most innovative products. Injective Protocol, a layer 2 decentralized exchange, is one of them. Injective wants to unleash the potential of crypto derivatives and borderless decentralized finance. 

The protocol supports cross-chain derivatives trading for multiple crypto products such as perpetual swaps, futures, CDFs, and more. In 2018, the protocol made it to the winner’s list of projects selected for incubation by Binance Labs. Injective wants to solve high latency, inefficiencies, and poor liquidity encountered by most exchanges today. 

Understanding the Injective Protocol

Launched in 2018, the Injective Protocol is a DeFi project that wants to enable decentralized and cross-chain spot trading and derivative trading of financial products, from perpetual swaps to CDFs, to futures and more. The platform utilizes ‘peg zones’ to realize a cross-chain trading infrastructure. This environment is also trustless, censorship-resistant, transparent, and with low fees. 

Highlights of the Injective Protocol

The Injective Protocol features the following highlights: 

#1 Layer 2 decentralized derivatives trading: Injective can support fast, autonomous and transparent trading 

#2. Trading opportunities: On Injective, anyone can create and trade on a derivative market of their choice by utilizing only a price feed. This increases opportunities for trading that are not found on other exchanges.

#3. Cross-chain trading: Injective supports a wide range of trading and yield generation activities across a variety of networks

#4. Community governance: The Injective Protocol will be governed by the community – in a true decentralization fashion. Any changes or updates to the protocol will be determined through a vote based on a decentralized autonomous organization (DAO) structure.

#5. Liquidity mining incentives: Injective users will have the ability to earn value through a variety of liquidity mining pools

Injective: Products and Technical Infrastructure

The Injective protocol is made of four key components: 

  • Injective Chain
  • Smart Contracts on Ethereum
  • API nodes
  • Front-end interface

Let’s take a close look at each: 

#1. Injective Chain

This is a decentralized sidechain solution that powers derivatives trading and supports a Trade Execution Coordinator (TEC) and a decentralized order book. The Injective Chain utilizes a Tendermint consensus mechanism to confirm and validate transactions. 

On the Chain, users can build derivatives through two ways: the Injective Futures Protocol and smart contracts. The Injective Futures Protocol allows traders to create, enter into, and execute decentralized perpetual swaps and CFDs. 

#2. Smart Contracts on Ethereum

As a token-based protocol, Injective is intricately linked with INJ, its native token. For that reason, major protocol interactions and token economics are implemented through various smart contracts, which are as follows: 

  • Injective Coordinator Contract: Implements orders and Injective’s derivative transactions both on Ethereum and the Injective Chain
  • Staking Contract: Manages core functions like token rewards, choosing delegates, and governance
  • Injective Futures Contracts: Smart contracts that allow traders to create and trade perpetual swap contracts on the market
  • Injective Bridge Contracts: A suite of smart contracts that manage the flow of info between the Injective Chain and the Ethereum network
  • Injective Token Contract: An ERC-20 contract for INJ token

#3. Injective API Nodes

Injective’s API nodes are responsible for two things: supporting transaction relay services and being the data layer of the protocol. 

  • Transaction Relay Service – This is a tool that formulates transactions and relays them to the Injective Chain. It also simplifies functionalities such as staking, voting, and governance.
  • Data layer – The API nodes also act as a data layer through which external clients can interact with the protocol. 

#4. Front-end interface

The Injective protocol is fully decentralized, meaning individuals and companies can use it in a permissionless manner. Injective has enabled a friendly front-end interface through which they can do so. 

The INJ Token

INJ is the native token for the Injective network. It plays several roles, which include the following: 

  • Protocol governance: The INJ token will be used as a governance mechanism. Token holders will be able to vote on the future of the project, network parameters, and protocol upgrades through a DAO structure.
  • Deflationary mechanism: The INJ token will be periodically bought back and burned so that it doesn’t flood the market – as a deflationary measure
  • Collateral backing: INJ can be used as an alternative to stablecoins in the protocol’s derivatives trading, as well as a collateral backing when users lock up tokens so as to earn interest
  • Incentive mechanism: The INJ token is used to reward participants for taking part in the network’s consensus
  • Proof of Security (PoS): When nodes stake in INJ and get the right to take part in the network consensus, which secures the network, they will be rewarded with block rewards

INJ Token Distribution

The INJ token was distributed in the following fashion: 

  • Binance launchpad sale tokens: 9%
  • Seed sale tokens: 6%
  • Private sale tokens: 16.67%
  • Team tokens: 20%
  • Advisors’ tokens: 2%
  • Ecosystem development tokens: 36.33%
  • Community growth tokens: 10%

INJ: Tokenomics

As of Oct 31st, 2020, the INJ token traded at $0.776922, with a market cap of $10,456,039, which places it at #470 per Coinmarketcap. The token’s 24-hour volume is $2,431,311, with a circulating and total supply of 13,458,281 and 100 million, respectively. INJ’s all-time high was $1.22 (Oct 23, 2020), while its all-time low is $0.662174 (Oct 29, 2020). 

Buy and Storing INJ

You can find the INJ token listed on several exchanges, including but not limited to Binance, HotBit, Poloniex, DCoin, Uniswap (V2), VCC Exchange, and Pancake Swap. The token is listed as a market pair with USDT, BTC, BNB, BUSD, and WBNB. 


What Venus (XVS) can do for DeFi? 

Project after project is now rushing to cash in on the DeFi wave as the new blockchain-powered industry takes over the space. One of the latest DeFi projects to enter the scene is Venus Protocol, a liquidity pool and money market based on the Binance Smart Chain

What’s Venus all about, and what innovations does it bring to DeFi? Let’s dive in. 

Understanding Venus 

Venus is a DeFi protocol on the Binance Chain that supports digital asset lending, borrowing, and generation of synthetic assets. Venus wants to provide a much better financial ecosystem than both centralized and current decentralized platforms.

The Problem with Today’s Finance Protocols

In the traditional finance system, users have to go through a multitude of steps just to get a loan from KYC processes to a credit history check to days or weeks of awaiting confirmation. Also, the centralized lender can decide to deny you a loan arbitrarily. And let’s not forget about centralized platforms’ security concerns, thanks to their single point of attack. 

For its part, DeFi has revolutionized the crypto space by introducing blockchain-based products and services that are transparent, cryptographically secure, and not controlled by third-party authorities/decision-makers. But there’s a problem with DeFi: most of these platforms are built on Ethereum, which has faced scalability challenges since the beginning. Lack of scalability means slow, costly transactions and a poor user experience.

Again, these protocols lack the high market cap that could attract more users or put them at the top of the chain. There’s also the less-than-obvious issue of some of these platforms being not fully decentralized – mostly at the beginning. Such a platform will have equity investors controlling the platform, not users, and the community. 

Venus’s Solution

Venus seeks to address these problems by providing an environment where a traditional approach is woven into a synthetic stablecoin generation process. Users will be able to enjoy high-speed transactions with low minimal transaction costs on the Binance Smart Chain. The possibilities are many: deposit collateral, earn interest on the collateral, borrow against the collateral, and mint stablecoins in seconds. 

Venus: Highlights

  • Ability to borrow cryptocurrencies without intrusive KYC and credit checks
  • Ability to deposit crypto and stablecoins as collateral and earn good annual percentage yield returns 
  • Mint stablecoins from your collateral, with the collateral having the ability to be used more than 60 million places in the globe.
  • Governed by the Venus token for fair and transparent coin launch and distribution 

How Can You Use the Venus Protocol? 

You can take advantage of the Venus platform in several ways. From depositing assets and earning from them to borrowing crypto at competitive rates. 

#1. Depositing Assets

Venus users can deposit any of several supported digital assets in the protocol. Borrowers will take out these funds and use them to speculate in the market. In return, suppliers of the funds – or stakers, will earn interest on their deposit. 

When users supply collateral, they participate as lenders while contributing to the security of the protocol. All deposited assets are put together in a pool so that users can take out part of/the whole of their supply at any time, provided the protocol balance is positive.

Supplying crypto to the protocol will get you a vToken (vETH, vBTC, vUSDC, etc.) Only vTokens can be used to redeem the underlying deposited crypto. Redeeming the crypto will allow you to hedge against other assets in the market or move them to offline wallets that support Binance Smart Chain.

#2. Borrowing Assets

To borrow assets from the platform, you need to stake in collateral. The collateralized assets should be over-collateralized, making for at least 75% of the amount to be borrowed. The community will determine the collateral ratio through a governance process. Once you deposit the collateral, you can proceed to borrow an amount based on the collateral ratio of the particular asset. 

Usually, collateral ratios are anything between 40% to 75%. For instance, if ETH has a collateral ratio of 75%, it means you can borrow up to 75% of the value of your ETH. But if your collateral value drops below 75%, it could cause your assets to be liquidated. To return the collateral, a borrower must pay the borrowed amount together with the compounded interest.

Protocol Architecture

Venus’s code is forked off both the MakerDao and Compound protocols. The architecture is made of these elements: 

#1. Controller Smart Contract

Binance Smart Chain’s controller contract is much like a 

decentralized processor, facilitating the interactions between all other smart contracts on the platform. The Venus protocol does not automatically support tokens. Rather, it will support specific markets that are whitelisted by the Controller contract. The controller contract accesses whitelist markets by deploying the support Market admin function on the protocol. Every interaction and function on the protocol must be verified on the controller contract before it’s executed. 

#2. Collateral value

When a user deposits, borrows, or mints from the protocol, they’re usually using the underlying asset, usually held as collateral. The underlying assets are held as collateral and have dollar values that are also tied to the vTokens. For this to work accurately, these collateral values are taken from prevailing market rates. 

Governance Approach of Venus

The Venus team takes community governance very seriously. There were no pre-mined tokens for the team, foundation, and developers. As such, users who mine the Venus Token will get to control how the network runs. 

Governance features include, but are not limited to: 

  • The introduction of new assets on the protocol
  • Adjustment of market rates
  • Fixing interest rates for synthetic assets
  • Voting on protocol upgrade proposals

Venus Token

Venus is governed by the platform’s native token, the Venus Token (XVS). The token was designed to be “fair launch,” meaning there were no pre-mined tokens for the team, advisors, or the Foundation. You can only earn tokens through the Binance Launchpool project or by injecting liquidity into the protocol.

Initially, 20% (6,000,000) of the total supply will go to the Binance Launchpool project. The remaining amount will be dedicated to the protocol, with 23,700 000 XVS being mined in the next four years at 18,493 per day. 35% of the award will go to borrowers, 35% to suppliers, and 30% to stablecoin minters. XVS will officially become the governance mechanism of the protocol after 10 million tokens have been mined. In the meantime, an interim token, ‘Swipe Token’ (SXP), is being used to fulfill this purpose. 

Community Growth Strategies

The Venus team is going to implement various strategies in a bid to expand the community. 

  • Conducting Ask Me Anything (AMAs) to shed more light on the project to the community.
  • Regularly publishing DeFi-related news.
  • Hosting/co-hosting DeFi and blockchain events
  • Putting out weekly updates on Medium
  • Engaging with the community and the public via social media
  • Coming up with governance protocols

Future strategies include the following: 

  • Launching a governance protocol
  • Launching an incentive campaign to attract liquidity investors
  • Increasing the number of supported tokens

Tokenomics of Venus

At the time of writing, the Venus token’s market performance was as follows: its price was $3, and its market cap was $12,696,581, which placed it at #453. XVS had a 24-hour volume of $6,606,914, with a circulating supply of 4,227,273 and a total and maximum supply of 30 million. Finally, the token’s highest price ever was $4.77 (Oct 17, 2020), while its lowest ever was $2.22 (Oct 13, 2020). 

Where to Buy and Store XVS

XVS is currently listed on the Binance exchange. 

As a Binance chain token, the XVS token can be stored in Ledger Nano S, Guarda Wallet, Enjin Wallet, Atomic Wallet, Trust Wallet, Edge Wallet, and Coinomi Wallet.

Closing Thoughts 

On the Venus Protocol, users from everywhere can supply crypto and earn returns, take loans, and mint synthetic assets. Since it runs on the Binance Smart Chain, its transactions are fast, low-cost, and transcend the native blockchain. Active participants will get to contribute to the future direction of the protocol in a truly decentralized fashion. Venus joins multiple protocols offering the same product – will it stay ahead of the curve? We’ll be watching to see how it evolves.


What’s Alpha Finance Lab (ALPHA)?

DeFi is the hottest topic in the crypto and blockchain space now, and the reason it’s so popular is the countless benefits it affords users. Financial instruments have been a preserve of the top few elites for too long, and DeFi is set to change that. As of now, we have multiple DeFi projects aiming for the top spot in terms of offerings, user experience, and more. 

Less than a year old, Alpha Finance Lab is one of many DeFi contenders emerging. The Alpha tram wants to empower people to “reclaim control over their digital presence.” So what does it offer potential users? We answer that question in this article. 

Breaking Down Alpha Finance Lab 

Alpha Finance Lab is a DeFi ecosystem that will integrate various products and bring users the experience of different blockchains, starting with Binance Smart Chain and Ethereum. The Alpha team wants to “drive cross-chain DeFi and cross-chain liquidity through building interoperability among Alpha products and integrating with leading ecosystem partners to drive the next stage of DeFi.” 

The Alpha team wants to achieve the following: 

  • Sustainable yield generation upon users’ depositing of supported assets
  • Eliminate or reduce the risk if impermanent loss (IL)
  • Facilitate privacy-oriented asset exchange
  • Support lending with already-provisioned interest rates 

Alpha: Existing Products 

The Alpha platform is building a mix of products that will be interoperable across Binance Chain and Ethereum and will support more blockchain platforms in the future. With that, let’s look at the platform’s current offerings: 

#1. Lending

Alpha supports lending through its Alpha Lending protocol. On the protocol, users can earn interest by depositing supported assets. Deposited assets will be transferred into a smart contract that will allow users to borrow money for trading. When borrowers pay back interest, it will be pooled and proportionately awarded to liquidity providers depending on their contribution. 

If you want to be a lender, they can deposit any of the supported tokens, e.g., Ethereum, into the protocol. After this, you’ll receive aITokens (such as aIETH), which are interest-generating tokens that will represent your share of the deposited ETH. 

#2. Borrowing

If you wish to borrow from the Alpha protocol, you first have to deposit supported assets as collateral. After that, you’ll receive aITokens. Assets eligible for collateralization have been assigned a Loan-to-Value (LTV) ratio. Let’s say the LTV for ETH is 70%. If you deposit ETH as collateral, you can borrow any asset in the pool and up to 70% of the value of the ETH you deposited. 

#3. Interest rate 

The interest rate will be determined by the asset’s utilization rate; in other words, the amount of deposited assets that have been borrowed. The bigger the utilization rate, the higher the interest rate. 

#4. Risk and Liquidation

Risk of liquidation is when the total value of the assets you borrow exceeds the maximum value you can take. Due to the volatility of cryptocurrencies, it’s recommended that you borrow at a lower value than the maximum value you can borrow. This will cushion you against the risk of liquidation. 

#5. Alpha Homora 

This is a protocol that allows users to leverage their position in liquidity mining pools. As a user, you can participate in the protocol as a yield farmer, lender, or liquidator. You can also participate by finding bugs in the protocol for which you’ll earn rewards. 

ALPHA Token 

ALPHA is the native cryptocurrency of the Alpha protocol, and it has the following current and planned roles: 

  • Liquidity mining: Users can earn ALPHA tokens for providing liquidity to the platform
  • Staking: Token holders can stake ALPHA tokens and get a share of the platform’s revenue
  • Governance: ALPHA token holders can participate in the governance of the platform by voting on project proposals

The Alpha token was distributed in the following manner: 

  • Binance launchpad sale tokens: 10%
  • Binance launchpool tokens: 5%
  • Private sale tokens: 13.33%
  • Liquidity mining tokens: 20%
  • Team and advisors’ tokens: 15%
  • Ecosystem tokens: 36.67%

Community Strategies of Alpha Finance Lab

The Alpha team intends to conduct several strategies to expand the growth of the project. 

These strategies include: 

  • Hosting and co-hosting DeFi conferences and related events to engage with potential users
  • Publishing blog posts every two weeks to update the community on technical updates
  • Engaging with the community via social media channels 

Future strategies include: 

  • Launching the Alpha Finance Lab Program to promote partnerships with similar projects
  • Launching yield farming programs 
  • Launching joint yield farming programs with other industry players

Key Metrics

The ALPHA token was trading at $0.034681 on October 16, 2020. It had a 24-hour volume of $2,489,546, an all-time high of $0.106884 (October 10, 2020), and an all-time low of $0.033573 (October 16, 2020) per Coinmarketcap

Where to Buy Alpha Tokens 

ALPHA has been listed on Coinone, Binance, and VCC Exchange. 

Closing Thoughts 

The Alpha team wants to push DeFi to the next level by focusing on cross-chain interoperability. Like many other DeFi protocols, Alpha provides an opportunity for people everywhere to make money by simply staking in crypto. The project is still young, so let’s see its future innovations. 


Introducing Flamingo (FLM): A Beginner’s Guide

As DeFi becomes more and more of an indispensable idea, blockchain platforms are rushing to capitalize on the wave. DeFi provides endless opportunities for users: lucrative gains on staking, instant borrowing, fraud-proof transactions, and more. 

Blockchain platforms are now incorporating DeFi to not just accord users more value but also to remain relevant. Neo, the blockchain platform founded in China, is one of the latest to integrate DeFi in its offerings. 

Neo’s DeFi platform is known as Flamingo, and it stepped into the space just September this year. This article will bring into focus everything you need to know about the platform. 

Understanding Flamingo

Flamingo ( is a decentralized finance protocol built atop the Neo blockchain. The platform integrates various modules to offer a comprehensive DeFi architecture, where users can take part as traders, stakers, borrowers, and liquidity providers. Flamingo is a pillar of the Neo DeFi’s ecosystem, and it comes with innovative solutions for the space such as the following:

#1. Friction and lack of cross-chain interoperability: Flamingo will be powered by the Poly Network to support cross-chain asset transfer, ensuring single market limitations are a thing of the past

#.2 Limited efficiency due to fragmented capital sources and overcollaterization: Flamingo will integrate the automated market maker (AMM) protocol and collateral asset pool, which will ensure capital is utilized to the maximum

#3. Short community participation periods: Flamingo will incentivize users with FLM tokens to reward them for their participation in the community

Project Features

The Flamingo platform will be guided by these three key elements: 

#1. Interoperability

Flamingo will heavily feature interoperability, a factor that lacks in most DeFi platforms. Through the Neo-owned interoperability protocol Poly Network, Flamingo will be collected with various blockchain networks such as Ethereum, Ontology, and Cosmos-SDK. Flamingo users can capitalize on this interoperability to access more assets within a broader DeFi ecosystem. 

#2. Capital Efficiency

Flamingo is designed to integrate its Swap feature’s liquidity pool with Vault’s collateral pool. In the existing AMM decentralized exchanges, capital efficiency is usually held back by Liquidity Provider (LP) tokens, which causes some AMMs to be provisioned way below the baseline. 

Flamingo will maximize capital efficiency by letting liquidity providers stake LP tokens in Vault while simultaneously minting Flamingo USD (FUSD).

#3. Fair Launch

Flamingo will distribute FLM tokens as transparently as possible, with no pre-mine launch or some reserved for the team. The community will decide the long-term distribution formula via voting.

Flamingo: Components

Flamingo is defined by several core features, which are: 

#1. Wrapper

This is a multi-chain asset gateway for blockchains such as Bitcoin, Ethereum, Neo, Ontology, and Cosmos-SDK. You can wrap tokens like BTC, ETH, NEO, USDT, and ONT , upon which they’ll become NEP-5 tokens (nETH, nNEO, nUSDT, nONT, and so on.) You can also unwrap tokens back to their original form. 

#2. Swap

Swap is Flamingo’s automated market maker and makes wrapped assets, FLM, and NEP-5 tokens. The swap works much like Uniswap by adopting the Constant Product Market Maker (CPMM) model. On Swap, users can exchange tokens or provide liquidity to a quality pool of their choice by simply depositing tokens. 


This an asset manager by the Flamingo team. On Vault, users can stake in NEP-5 assets and get FLM token rewards. 

#5. FUSD

This is a synthetic stablecoin mintable by users. FUSD is pegged to the price of the US dollar. Users will be offered FLM that’s in proportion to the amount of FUSD minted. 

#6. Perp

This is an AMM-based contract exchange. Just like on Swap, traders can exchange perpetual contracts using the CPMM model, this time with a ten times average. Stakers need to deposit FUSD, upon which they’ll receive FLM as rewards. 

#7. DAO

DAO is a protocol for governance on the Flamingo platform. The Flamingo team intends for decision-making to be taken over by the community. Cabinet members can contribute to the platform using Flamingo Improvement Proposals and Flamingo Configuration Change Proposals. On the DAO, FLM token holders can vote on critical decisions such as increasing/decreasing tokens, software upgrades, parameter configurations, etc. Voters who contribute to governance are awarded FLM tokens. 

What’s Flamincome?

Flamincome is Flamingo’s dedicated platform for the new trend in DeFi, known as liquidity mining. Flamincome provides pretty much the same services as in Yearn.Finance (YFI). The tool features both an optimizer and normalizer. An optimizer increases yield by converting original assets (USD, USDC, DAI, ETH, wBTC, wETH, etc) to interest-focused assets (fUSDT, fUSDC, fDAI, fwETH, fwBTC, etc). 

A normalizer changes back interest-bearing assets into original assets. Interest-bearing assets such as fUSDT, fUSDC, fDAI, fwETH, fwBTC, etc are changed into synthetic assets (nUSDT, nUSDC, nDAI, nwETH, nwBTC, etc). This conversion takes place on a 1:1 peg ratio to the underlying asset. The synthetic assets can be used in other DeFi platforms for more yield farming. 

Is Flamingo Audited?

Yes, the Flamingo platform is audited. Several independent auditing outfits have audited various stacks of the platform: 

  1. Normalizer contracts on Flamincome: PeckShield and Red4Sec
  2. Flamingo contracts: PeckShield
  3. Poly Network: Certik 
  4. Poly Network Neo contracts: PeckShield
What are the Risks of Interacting with the Flamingo Platform? 

While Flamingo is thoroughly audited, mistakes/bugs are bound to occur. While there’s no inherent risk in Vault’s staking process, using the Swap module can set you up for impermanent loss (IL). 

However, as Neo founder Da Hongfei noted, this risk is often overestimated: “Only by providing liquidity to Swap may you bear IL. After all, IL is not as terrible as many people think. To provide liquidity to a trading pair A/B, after a period of time if the price of A has fallen by 50% relative to B. How much do you estimate the impermanent loss to be? The answer is 5.72%. This means you would only lose 5.72% by providing liquidity compared to holding A/B in your wallet. That’s not as bad as most people’s intuition.”

How is the Flamingo Platform Secured? 

The Flamingo network is NEP-5-compliant. NEP-5 is Neo’s token compatibility standard, which means Flamingo is secured by the underlying Neo blockchain. Neo itself is secured by SHA-256 (the hash algorithm that secures Bitcoin) and RIPEMD-160 hash function. 

Community Growth Strategies of Flamingo

The Flamingo team intends to implement several strategies to expand the growth of the community. These strategies include the following: 

  • Conducting physical marketing events and meetups
  • Engaging with users via social media platforms
  • Conducting online Ask Me Anything (AMA) to engage with current and potential users 

Future Strategies include: 

  • Conducting daily weekly progress updates
  • Kicking off the Developer Grant program 
  • Initiating voting functionalities for the Flamingo decentralized autonomous organization (DAO)

Future of Flamingo

Flamingo wants to be the stepping stone for the acceleration of DeFi in the Neo ecosystem. The Neo team doesn’t plan to stop at Flamingo but intends to launch other products like lending, insurance, and asset management products. 

For now, the team is exploring ways to introduce more asset types, decide which oracle implementation to integrate, and examine how the governance mechanism will function in the future. The Flamingo team encourages input from the community. Users can submit proposals on how to optimize the platform and build a more robust protocol.

The FLM Token

The FLM token is the native token of Flamingo. Holders of the platform can participate in decision-making for things like new tokens issuance, platform parameters, etc.

Other uses include: 

  • Staking multi-chain assets 
  • Staking LP tokens, minting FUSD
  • Depositing FUSD to trade in perpetual contracts

The Flamingo token was distributed in the following fashion: 

  • Binance Launchpool tokens: 4.17%
  • Mint Rush tokens: 29.17%
  • LP Token Staking: 53.33%
  • FUSD Minting: 10%
  • Perp Margin Rewards: 3.33%

Flamingo: Key Metrics

The FLM token price was $0.254369 while ranking at #3587 on October 16, 2020. The token’s 24-hour volume was $7,296,347, with a total supply of 150 million. FLM had an all-time high of $0.307385 (Oct 9, 2020) while it’s all-time low was $0.249290 (Oct 11, 2020). 

Buying and Storing FLM

The FLM token is listed as a market pair of USDT, BTC, BNB, USDT, BUSD, NEO, and PERP in exchanges such as Binance, OKEx, MXC, HotBit, Binance, BitZ, LBank, Hubi, Switcheo Network, VCC Exchange, and FTX. 

FLM tokens can be stored in NeoLine (Chrome Extension), O3 desktop wallet (supports Ledger), MetaMask Chrome Extension, Cyano Chrome Extension, and ONTO mobile wallet. 

Crypto Guides

An Introductory Guide To ‘Yield Farming’ In The World of Cryptocurrencies


Lately, the topic of Decentralized Finance or DeFi in the cryptocurrency space has been the most talked-about concept among crypto enthusiasts. While the general populous has been hunkering down on the economic uncertainty, people in the field of cryptocurrency have been excited about decentralized finance’s one of the latest, riskiest, and dynamic investment strategies – Yield Farming.

The concept is quite new, even for the crypto nerds. But it has the potential to change the dynamics of how people deal with cryptocurrencies. Some people may confuse it with liquidity farming, but Yield Farming is a different concept. Simply put, it is the process of finding the best returns (yields) that the cryptocurrency world has to offer.

One of the great things about Decentralised Finance is that they are permissionless. That is, anyone with an internet connection and a supported crypto wallet can interact with them, even a smart contract. This has given rise to Yield Farming. So, what is it? How does it work? Who can use it? We will answer all these questions and more in this post. Keep on reading.

What is Yield Farming?

Yield Farming is a process of generating rewards with crypto holdings using permissionless liquidity protocols. Simply put, Yield Farming means holding and locking cryptocurrencies and getting rewards. According to experts, Yield Farming bears a resemblance to staking. Nevertheless, it is a lot more sophisticated than you can think. In most cases, Yield Farming works with users known as liquidity providers (LP) who add capital to liquidity pools.

A liquidity pool is a smart contract containing funds; when liquidity providers provide liquidity to the pool, they get a reward. The reward received by the liquidity provider will be either generated from the fees of the underlying Decentralized Finance platform or some other sources. In some cases, liquidity pools use multiple tokens to pay their rewards. These tokens can be deposited to other liquidity pools to earn more rewards. This means that as a liquidity provider, you will contribute to the liquidity pools and earn rewards in return.

Yield Farming is done using Ethereum (ERC-20 tokens), and the reward generated is also some kind of ERC-20 token. Yield farmers move their funds quite often between different protocols, looking for higher yields. Experts believe that Decentralized Finance platforms may provide providers with other economic incentives to attract more capital.

How Does it Work?

Yield Farming is based on the Automated Marker Maker (AMM) principle that includes liquidity pools and liquidity providers. Suppose you are a liquidity provider. You deposit funds into a liquidity pool. This liquidity pool of yours is a whole marketplace where users can exchange, borrow, or lend tokens. As the user uses these tokens, they will have to pay a certain fee to the liquidity provider, that is, to you. This is how AMM works.


As simple as it sounds, Yield Farming is a complex phenomenon. The strategies involved are highly complex and are suitable for only advanced users. Also, experts suggest that it should be deployed by those who have a lot of capital.

Crypto Guides

How DeFi Is Solving The Problem That Bitcoin Always Wanted To?


When you hear the word ‘cryptocurrency,’ Bitcoin is the first thing that pops into your mind. For the longest time, bitcoin has been synonymous with cryptocurrency and regarded as the future currency. In the recent past, bitcoin’s monopoly has been diluted by the entrance of thousands of other cryptocurrencies.

The cryptocurrencies’ primary objective was to serve as an alternative, and down the line, a replacement to the global fiat financial system. This objective has failed to take off. This failure can be attributed to the skepticism cryptocurrencies have faced, which has slowed their role as a legitimate alternative to fiat currencies. DeFi has helped address some of these challenges and help make cryptocurrencies mainstream.

What is DeFi?

DeFi is the short form for Decentralised Finance.  At its core, decentralized finance is the provision of conventional financial services on platforms built on the public blockchain. Specifically, DeFi is based on the Ethereum blockchain platform.

DeFi is heralded as the most suitable alternative to the global financial system. This new enthusiasm about the decentralization of finance is owed to the fact that DeFi is seen as being able to solve the problems that bitcoin failed to solve.

Advancements Made by DeFi

Here are some of the advancements made DeFi, which bitcoin failed to achieve.

Creation of issuance and investing platform

These platforms operate like an ordinary stock exchange. DeFi has made it possible so that cryptocurrencies can be issued and traded like conventional financial securities. The platform brings together broker-dealers, legal advisors, and custodians, who will advise issuers through the process. Furthermore, the platform also makes it possible for asset and investment managers’ proliferation for crypto-based financial assets.

Establishment of a decentralized prediction market

A prediction market is one where individuals can bet on any future occurrences. With decentralized prediction markets, there is no form of censorship whatsoever. Therefore, it offers an incredible opportunity to hedge against future risks financially and speculate on all forms of social events globally.

Growth of open lending protocols

Decentralized open lending championed by DeFi involves the following: collateralization of cryptocurrencies; elimination of credit checks among borrowers; lending and borrowing of cryptocurrencies for trading purposes; and real-time settlement of transactions. The financial inclusion resulting from open lending is unparalleled.

Facilitated the issuance of stablecoins

DeFi made it possible for the issuance of stablecoins by facilitating the auditing of crypto reserves and ensuring manageable volatility of such cryptocurrencies. With DeFi, stablecoins can be pegged on another asset. Categories of stable coins that have been spurred by DeFi include crypto-collateralized stablecoins, fiat-collateralized stable coins, and non-collateralized stablecoins whose stability depends on an algorithm controlling the expansion and contraction of its supply.

Bottom Line

DeFi undoubtedly offers a higher potential for financial inclusion, censorship-free transactions, and improved privacy. Although DeFi is offered as an alternative to the centralized financial system, it is almost impossible to envision an economy where the centralized financial system ceases to exist. Thus, it is prudent to co-mingle the two systems to ensure complementarity, which will tone down the inherent risks associated with either system.


What is Bella? Here’s All You Need to Know

It’s safe to say the future of finance is DeFi. DeFi, short for decentralized finance, is not only the idea of a democratized finance system but one with new and bold propositions for users. Blockchain-based finance will phase out intermediaries and inject transparency and fairness into the system. 

Bella is one of the projects in the middle of the DeFi action. It provides an array of DeFi products to benefit users and push DeFi into the mainstream. 

The Bella team believes “users deserve much better mobile products with elegant design and smooth user experience.” It aims to avail crypto to mobile – the gadgets we most interact with – like never before. 

Bella stands out as the first DeFi project hosted by Binance’s Launchpool platform – an initiative by the world’s largest crypto exchange to actualize the DeFi concept to Binance users. 

Breaking Down Bella

Bella Protocol is a suite of DeFi products such as yield farming, automated lending, one-click savings, a robot advisor, and more. The Bella team wants to make crypto investment more accessible for everyone with the aid of automated smart contracts and the security of the blockchain. 

The Bella team wants to correct the current situation in which users are barred from entering DeFi by high gas fees, slow speeds, and poor user experiences. On Bella, users can simply deposit crypto and gain back high returns. 

The Bella team comprises blockchain veterans with years of experience in finance, cryptography, and engineering. Bella has been imagined by the same team behind the ARPA project. 

Motivation Behind the Bella Protocol

The Bella team wants to address certain pain points that encumber the DeFi space right now. Thus, Bella protocol development is guided by the following: 

  • DeFi is a trillion-dollar market whose rise is much due to stablecoins
  • Despite all the hype and buzz, just 1% of crypto users are actively engaged in DeFi.
  • DeFi users still have to grapple with things like high gas fees, poor user experience, and the complexity of smart contracts. 
  • DeFi users are highly motivated by the promise of high yields through liquidity mining.
  • There’s a need for interoperability across various DeFi platforms for the best user experience.
  • The mobile phone will be the next big thing in both DeFi and CeFi (centralized finance)

Planned Products

#1. Liquidity mining: Users can stake in a variety of crypto tokens and gain BEL rewards. Currently, you can stake in Curve ARPA/USDC, BEL/USDC Liquidity Provider tokens.

#2. Flex savings: Bella supports optimized arbitrage yield farming strategies for both stablecoins and cryptocurrencies.

#3. One-Click Asset Deployment.

#4. Bella supports a smart portal for deploying popular DeFi products with minimal gas fees. 

#5. Lending: Bella supports flexible, secure, decentralized money markets where users can earn yields from staking, earn referral bonuses, and more.

#6. Robo-advisor 

This tool generates customized user risk profiles of indexes, stablecoins, and other crypto assets.

Main Features of Bella Protocol

#1. Automation

Bella plays heavily into automation. It enables a one-click investment process, where you can “sit back and watch your assets grow” while the code does all the work.

#2. Very Minimal to Zero Gas Fees

The Bella team believes everyone should have access to premium financial services. As such, you’ll encounter very minimal to zero gas fees while interacting with the platform.

#3. Best Yield 

Bella wants the particles to be a route for some of the best competitive returns in the market.

The BEL Token 

BEL is the native cryptocurrency of the Bella ecosystem, and it plays the following roles: 

  • Fee Collection: Part of transaction and service revenue from the ecosystem will be channeled towards BEL token stakers, referral channels, operations, and the risk reserve (an insurance resolve of salts to composite uses in the event of security breaches)
  • Discounts: BEL token holders get to enjoy discounts on services. For example, if you use the robo advisor and pay in BEL, you pay less.
  • Staking: Users will be able to earn staking rewards when they hold BEL tokens 
  • Voting and governance: Holding BEL tokens will entitle users to make their voice heard on major decisions such as product upgrades, new releases, partnering products, and so on 

Distribution of BEL

BEL tokens were distributed this way:

  • Binance launchpad tokens: : 5%
  • Private sale: 6%
  • Public auction tokens: 2%
  • Ecosystem tokens 18%
  • Project reserve tokens: 4%
  • User growth tokens: 40% 
  • Staking rewards tokens: 10%
  • Team tokens: 15%

Bella Community Growth Strategies 

The Bella team plans to implement several strategies in a bid to expand its community growth in the coming months and years. Current strategies include: 

  • Carrying out token auctions
  • Carrying out token airdrops to ARPA token holders
  • Actively engaging the community on social media platforms.
  • Launching the liquidity rewards program

Future strategies include the following: 

  • Partnering with other DeFi lending protocols to push BEL usage 
  • Partnering with decentralized exchanges (DEXes) so they can list BEL.
  • Collaborating with other DeFi platforms for BEL to be accepted as part of incentivized staking pools
  • Launching the Flex Savings and One-Click Portal to push the referral program
  • Enabling Fiat gateways to cater to a wider user base 

Tokenomics of BEL

As of October 8, 2020, BEL is trading at $1.08, with a market cap of $15,648,898, which places it at #381 in the crypto market. The token has a 24-hour volume of $3,960,114, a circulating supply of 14,500,500, and a total and maximum supply of 100 million. BEL’s all-time high was $10.03 (Sep 15, 2020), while its all-time low was $1.20 (Oct 03, 2020). 

Buying and Storing BEL

Currently, BEL is listed in Binance, Binance.KR, MXC, and Bilaxy, BKEX, HotBit, BitAsset, and Fatbtc. You’ll find the token paired against either USDC, BTC, BNB, BUSD, USDT, and more. 

You can store BEL tokens in either of several great wallets, including Ledger, Trezor, Atomic Wallet, Trust, and more. 

Closing Thoughts 

Bella is a DeFi lending protocol that seeks to differentiate itself by offering services for very little to no fees, a robo advisor to help users make the best out of their portfolio, and by targeting mobile users. And while other DeFi projects seek to avoid the CeFi space as much as possible, Bella works with it to provide a hybrid experience to users. Will these factors propel the protocol ahead or not? That remains to be seen. 


What’s PerlinX (PERL) All About?

Following Blockchain’s birth, the financial landscape is changing very fast. Now we’re talking of decentralized finance (DeFi), synthetic assets, liquidity pools, and other concepts that simply didn’t exist before. And all these are to the benefit of millions of people across the globe who were previously excluded from the financial system. 

PerlinX is a DeFi project that wants to “democratize the trading of real-world assets through decentralized liquidity pools and synthetic asset generation.” 

It’s among the many DeFi projects that are recently catching on and providing unparalleled value to users. In the traditional finance system, you can put up your money to generate yield. And sure, it will, but meager yields which take forever to add up to anything substantial. 

With PerlinX, you can earn nice rewards for simply staking in the PERL token. Let’s dive into the protocol and see how it works. We’ll also see the platform’s major driver – the PERL token, and how exactly it keeps the ecosystem moving. 

Understanding PerlinX 

Perlin is a DeFi platform where users can create and trade assets through a synthetic liquidity pool. Perlin will initially be focusing on synthetic assets. Platform users will be able to stake PERL tokens and earn rewards. Rewards will be in the form of PERL, UMA, and BAL tokens. PerlinX will also utilize the UMA protocol for the generation of synthetic assets. 

On the PerlinX platform, each asset will have its own real-time price feed, supported by the Data Verification Mechanism (DVM) supported by UMA. The DVM is designed to provide accurate and incorruptible price feeds. 

Synthetic assets on PerlinX will begin with the prefix ‘px’, as in pxGold, pxETH, pxCarbon, and so on. Also, for users to create synthetic assets on PerlinX, they must first deposit PerlinX as collateral. For now, the PerlinX protocol will support five assets, namely TUSD, BUSD, USDC, BAL, and ETH. 

What Can You Do on PerlinX? 

Below is how you can interact with the PerlinX platform: 

#1. Deposit crypto and earn rewards 

Platform users can stake in PERL and earn incentives as a result. Staking provides liquidity to the platform for borrowers who pay back with interest. 

#2. Create synthetic assets 

Users can utilize the PerlinX platform to create network assets of any type. To create a synthetic asset, a user must first deposit PERL as collateral. 

Roadmap for PerlinX 

After enabling users to earn incentives for staking in PERL, the team plans to embark on the following steps immediately: 

  • Start minting pxTokens.
  • Identify potential security loopholes on the platform and fix them immediately.
  • Improve user experience to facilitate staking and things like liquidation procedures and settling disputes.
  • Come up with a long-term incentivization mechanism for liquidity providers and synthetic asset creators.

Future Roadmap

  • Work to narrow the gap between the existing financial system and DeFi, and rally for more support for digital assets and more emerging complex assets like regulated securities
  • Work to improve the underlying Automatic Market Maker and synthetic assets mining process to realize better efficiency.

The PERL Token

PERL is the native utility token of the PerlinX platform. It will play a central role in the running of the ecosystem – and the two key roles will include the following: 

  • As a staking mechanism to earn incentives 
  • As collateral to be able to create synthetic pxTokens

How PERL Tokens Were Distributed

The PerlinX team distributed PERL in the following fashion: 

  • Seed sale tokens: 20%
  • Strategic sale tokens: 19.49%
  • Private sale tokens: 8.36%
  • Public sale tokens: 8.38%
  • Team tokens: 15%
  • Advisors: 9.65%
  • Treasury tokens: 19.12%

Key Metrics of PERL

As of September 29, 2020, the PERL token traded for $0.026798, with a market cap of $12,947,152, which placed it at #436. PERL had a circulating supply of 483,139,908 and a total supply of 1, 033,200,000. The token’s all-time high was $0.132243 (Aug 26, 2019) and an all-time low of $0.010643 (March 28, 2020), per Coinmarketcap. 

Buying and Storing

Today, you’ll find PERL listed as a market pair of BTC, USDT, BNB, WETH, BUSD, PERL, TUSD, BTC, and BAL in either of these exchanges: Binance, Bilaxy, CoinDXC, HotBit, TOKOK, Balancer and Uniswap (V2). 

You can store PERL tokens in Ledger, Trezor, Trust, Atomic, and MyEtherWallet wallets. 

Closing Thoughts

PerlinX is one of the bold projects that we’re seeing emerging in the DeFi space. The more these projects are, the more choices for DeFi users.

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Ethereum Is Still Not Ready For DeFi! – What Does This Mean For Investors?


“Ethereum Still Not Ready For DeFi” – Critics Claim

As almost every single DeFi project flocked to Ethereum, experts warn that the network is not yet ready to support the frenzy that is DeFi.
Martin Froehler, a former hedge fund manager, mathematician, and founder of Austrian crypto trading platform Morpher, said that although Ethereum is surely the “best thing the blockchain industry can offer” to DeFi, its current network capabilities are still not enough:
“Ethereum can, at the moment, only handle about 15 transactions per second, and has a block time of 15 seconds, which is an eternity in finance. As people go into DeFi, they have to interact with Ethereum, meaning that everyone interacting with it needs Ether on their wallets. That is a huge barrier to entry, which may slow down mass adoption.”

Froehler considers Ethereum to be the most decentralized smart contract platform. However, because the network still has issues, many developers have had to look for solutions to counter them.  Froehler then added:
“There is cryptographic proof for everything happening on the sidechain on Ethereum, meaning that people are able to trade without actually needing Ether. They don’t pay any fees while enjoying a settlement time of one second, and being completely independent of the many congestions that the Ethereum network may cause.”

Many industry players feel like Ethereum did not anticipate the DeFi hype properly and that even with the much-discussed upcoming network upgrade, Ethereum 2.0, it will still not be ready to service DeFi and its appetites.

Ethereum 2.0 is implemented in order to improve performance, but its high gas prices may just scare off new users. Sergej Kunz, CEO of decentralized exchange 1inch, spoke about the issue and said that the Ethereum infrastructure currently lacks the capacity to host the DeFi environment:

“You will have to rethink everything. It’s true that you can migrate smart contracts to the code, but that’s not scalable. To be able to scale, you would have to create standards and bring new protocols that are based on the new sharded architecture, something like NEAR, which is similar to Ethereum 2.0.”

Mounir Benchemled, founder and CEO of ParaSwap, pointed out that the sheer complexity of explaining how a layer-2 works to end-users “and the risk of not being able to actually pay the funds immediately to these users” cause a lot of concern. Benchemled added that it is not practical for all DeFi projects to instantly swap to Ethereum 2.0:

“For it to work, all applications would almost be required to move towards one single platform. While major projects might have consensus, there are other projects who have their own agendas, and it might be hard for them. New bridges will have to be built to allow interoperability.” Despite all the challenges ahead for the Ethereum blockchain, everyone agreed that “DeFi is here to stay.”

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Is DEFI Doomed To Be The Next ICO!


DeFi is like ‘trying to fly to the moon in a cardboard box’

While DeFi is almost certainly the future, that future may not be today, according to Richard Byworth, the CEO of digital finance company Diginex. He added that the crypto, and especially the DeFi sector, has been bursting with innovation, exuberance, and speculation in recent months. However, the niche is still very much in its infancy.

“I do believe that DeFi is potentially the future down the road,” Byworth said during an interview with the co-founder of Morgan Creek Digital Anthony Pompliano. “But it’s very early,” he added, further elaborating:

“It’s like flying to the moon in a cardboard box. You are going to get yourself into trouble along the way, and things are going to break and burn up, as we have already started to see.”
These dramatic attempts, trials, and failures are not making the industry look great regarding various mainstream entities peering into the cryptocurrency sphere and its emerging DeFi niche.

“I definitely look back to 2017, and the whole DeFi thing is probably not what we all need right now,” Byworth said. “We have MicroStrategy coming in, we have Paul Tudor Jones coming in, we have some really serious hitters slowly but surely starting to pay attention to this industry. I just hope that DeFi doesn’t become just another ICO craze that makes people go, ‘you know what, everyone is crazy in crypto,’ and stay away from it for another couple of years.”

Taking a look back, the entire crypto industry reached its peak bubble status in 2017 due to the uptrend of initial coin offerings (ICOs for short), which were an attempt to improve the IPO model. However, this model turned into a fad and later got stomped out by various regulatory bodies. In recent weeks, DeFi’s growth and optimism surrounding it have given off similar vibes, with many completely random assets spiking in the price for no apparent reason.
Byworth is not the first one who compared the DeFi sector to the now-dead ICO sector from back in 2017. Ryan Selkis, the founder of digital asset data site Messari, recently expressed very similar thoughts.

Additionally, as Byworth mentioned, multiple very important mainstream giants have recently placed big bets on crypto and Bitcoin, possibly putting the industry at a pivotal point in life thus far.

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How To Use Uniswap In Depth Analysis part 3 of 4

How To Use Uniswap: In-Depth Analysis (part 3/4)

While the previous parts of the guide talked more about the premises of the platform and what it’s used for, this part of the guide will be a bit more practical, as it will explain how to actually use the Uniswap exchange.
How to use Uniswap
Uniswap is an open-source protocol, which means that anyone could create their own application for it. However, most people just use the already created ones, with and being the most popular.

While stepping into the DeFi sector might sound daunting, using Uniswap is quite straightforward. First off, you will need to go to the Uniswap interface and connect your Ethereum wallet, such as MetaMask or Trust Wallet. After you’ve done that, you will have the option to select the token you would like to exchange from and to. By clicking swap, the transaction pop-in window will show up.

After confirming this transaction request in the wallet, the transaction will start on the Ethereum blockchain and can be trackable via
As we mentioned in our previous articles, if you want to earn income from Uniswap, you would need to deposit two tokens of equivalent value to the pool.

Uniswap’s market position

Before using Uniswap, we need to know how does it compare to other decentralized exchanges. Uniswap is by far the leading decentralized exchange in terms of both volume and liquidity, and rivaling even centralized exchanges in that regard. It stands on the cusp of topping $10 billion in monthly traded volume. The traded volume in September only stands at over $9.9 billion, accounting for around 66% of all DEX trading volumes.

Uniswap’s success can mostly be attributed to the ease of liquidity provision. The protocol’s liquidity has steadily increased since the start of 2020, while it has recently seen several enormous spikes due to liquidity mining events from competing forks such as SushiSwap.
Uniswap’s user base has grown in sync with the DeFi boom of 2020, which makes sense as this protocol is a foundational component of the overall DeFi infrastructure due to it having integrations across hundreds of applications.
Despite extremely strong competition from its recently launched fork SushiSwap, Uniswap outperforms SushiSwap from both a volume and liquidity perspective.


Uniswap is an innovative decentralized exchange protocol built on the Ethereum network. It allows anyone that has an Ethereum wallet to exchange tokens without any involvement of any central party.
While it certainly does have its limitations, this new technology may have some exciting implications for the future of decentralized, trustless token swapping.

For information on Uniswap’s UNI token, check out our next part of the Uniswap in-depth guide series.

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What Are The Key Components of DeFi?


Key Components of DeFi

The crypto and DeFi sectors are growing exponentially, and there are currently more DeFi apps than ever. These projects are already saving businesses and customers both time and money. In fact, DeFi platforms started to emerge across nearly every branch of the financial sector. As the DeFi sector expands, it is important to understand what characteristics all DeFi applications have in common, and what they offer.


DeFi applications have to be open-source, or they are not truly decentralized. Open source coding means that the project’s code is made public. By being open-source, these apps can be audited it and its functionalities, security, and capabilities validated. Open-source codes are more stable and secure than fully-private codes simply because of community interaction. Additionally, being open-source provides more confidence in the platform as users can rest assured that no malicious coding is hidden in the background.


DeFi projects provide the world with new levels of transparency. As most DeFi apps operate on public blockchains such as Ethereum, all transactions are fully available on the public ledger. As a matter of fact, all activity on the blockchain is completely public. The main difference in this approach vs. a traditional bank account is that the accounts are not bound to anyone directly. Instead, user accounts are pseudo-anonymous and list only a numerical address rather than show identity.


While this characteristic is not only bound to Dapps, it is an extremely important one. Anyone can participate in DeFi platforms from anywhere across the globe. All you need is a smartphone with internet access.
Consequently, DeFi Dapps have the ability to solve the problem of certain areas being unbanked or underbanked, as they can bring them the financial services they are looking for. This openness is a major upgrade from the current banking system, which leaves around 40% of the population without any form of banking.


The DeFi sector operates without gatekeepers. As such, anyone can create a DeFi application and offer it to the world. On top of that, anyone can participate in DeFi apps without any concern for approval. This strategy is a massive change from the current financial system that requires every single potential user to be a part of many regulatory verification systems before even participating in the global economy.


Another trait of the DeFi space is interoperability. Interoperability is critical as it ensures that, as more developers enter the space, all the previous work is not suddenly lost. Instead, users can stack their own DeFi products to expand exposure. As an example, it’s common for a single user to utilize stablecoins, decentralized exchanges, as well as wallets. This strategy is only possible due to the seamless integration that DeFi applications possess.


Due to the open nature that DeFi provides, developers are able to exercise way more flexibility in their platforms than they ever could. Users gain considerable options by integrating third-party application integrations as well. If the current options are insufficient, users can even choose to build their own interfaces.
Check out the next video in our DeFi series, where we will show examples on how DeFi is used.

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What Is DeFi Used For?


What is DeFi used for?

The Decentralised finance sector has been flourishing in the past few months, with more and more interest coming both from the side of retail and institutional investors. However, the current system isn’t exactly clear on what DeFi actually brings to the table. This video will hopefully bring a bit more clarity on how DeFi works.

DeFi in Lending

One of the sectors affected the most by the introduction of DeFi is certainly the lending sector. If you have ever applied for any type of loan, you surely know the process is both intense time-consuming. Worst of all, you are forced to use lending companies specifically designed to maximize their returns. On the other hand, the DeFi community produced some interesting ways to improve this sector.


A good example of a DeFi lending platform is Compound. The Compound platform showcases the true power of DeFi and its ability to transform how the world envisions the financial market in the future. Compound allows users to lend their cryptocurrencies out to other users. In exchange for providing the loan, these users receive interest in the form of cryptocurrency. The platform utilizes smart contracts that match lenders and borrowers. Additionally, these smart contracts make interest adjustments based on the market’s current state automatically.

Decentralized Exchanges

Many consider decentralized exchanges (DEX’s for short) as the logical next step in the evolution of the crypto exchange sector. DEX’s are peer-to-peer trading platforms that provide users with a more streamlined UX, tighter security, as well as more flexibility. Traditional exchanges operate via a centralized organization that monitors, facilitates, and approves all trades within the platform, which defeats the purpose of cryptocurrencies. On top of that, users of centralized exchanges are vulnerable to attacks and hacks, as history has shown us. There were numerous occurrences of exchange hacks in which the central organization, as well as its users, suffered huge losses.
DEX’s eliminate many of these concerns. The platform doesn’t include the assets directly, but rather via a smart contract. This way, there is no “weak spot” that a hacker could exploit.


We will use the Uniswap platform as our example of a decentralized exchange. It introduced an innovative mechanism now known as Automated Market Making. This new protocol enables near-instant settlement between different parties. The protocol will try to close trades as close as possible to the current market value.

DeFi Prediction Platforms

Another interesting development in the DeFi sector is the creation of prediction platforms. These platforms are used to analyze the current public opinion regarding a certain event.
One good example of this type of decentralized application is Guesser, as it allows you to make various predictions and examine other people’s results in the pool. You even earn crypto for participation by being right with your prediction.

DeFi is Here to Stay

As the main systems of our society are currently undergoing a transformation towards decentralization, the demand for DeFi applications will rise. These new applications continue to disrupt the financial space in remarkable ways.
Decentralized applications are certainly something that is able to set the new standard for the worldwide economy moving forward.

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A Brief Guide to PancakeSwap – A Food Themed DeFi Protocol


PancakeSwap is a food-themed new DeFi protocol. It is a cryptocurrency platform for direct exchange under the Binance Smart Chain (BSC). It has introduced many food-based farming associates in the crypto industry. Pancake allows community governance and investors to earn tokens by serving as a liquidity provider under the staking mechanism.

The whole protocol is executed on the Ethereum blockchain because it supports blockchain smart contracts, and it has huge community support who are continuously putting efforts to build decentralized applications. Pancake DeFi exchange allows swapping of BEP20 tokens. If you are familiar with SushiSwap, then you can easily grasp the PancakeSwap concept because both of them have the same incredible design. 

The PancakeSwap Exchange

The exchange platform works on an Automated Market Maker Model(AMM). In this model, the investor can trade with his digital assets and can invest in the liquidity pool. In these pools, users deposit funds and, in return, get Liquidity Provider tokens. With these earned tokens, they can reclaim their share from the trading commission. In PancakeSwap, the LP tokens are known as FLIP tokens. 

Staking Chain

In PancakeSwap, you are allowed to trade with a secondary token known as CAKE. On the farm, if you stake your LP tokens and lock them for the further process, then you will get CAKE in reward. You can deposit these different LP tokens listed below:

  8. BAKE-BNB Bakery LP

There is one more token in this protocol known as SYRUP. If you have deposited funds to get LP tokens and have used these tokens to receive CAKE. Further, you can stake this CAKE token to earn a SYRUP token, which would provide you with governance functionality. 

Adding Liquidity

To access all the features of PancakeSwap, you need to unlock your crypto wallet. With this wallet, you can interact Binance smart chain based on Ethereum web applications. 

The BEP20 tokens movement will require your approval. You simply have to fix the amount you want to keep on stake, and you need to confirm the transaction. Then you can check the CAKE you have earned, and you can withdraw the amount anytime you want with the harvest option. To earn SYRUP, you have to keep your CAKE on the stake with the ‘Approve Cake’ option. Once you have staked your CAKE, you will get back an equal amount of SYRUP and can earn CAKE passively. 


The Google of crypto – Binance jumped in Defi by introducing a new food protocol – PancakeSwap. PancakeSwap is launched by BSC, which is supported by a centralized exchange. It includes AMM, DEX, farms, and native token-CAKE. There are nine liquidity pools where you can deposit your funds. 25% of CAKE commission share is distributed to the SYRUP token holders. The anonymous developer team behind the PancakeSwap has warned that the smart contract is still unaudited and has high inherent risk. The fund invested in smart contracts always has a risk of bugs so, never deposit the amount if you can’t afford its loss. 

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The Craze Behind DeFi – Explained!


The Craze Behind DeFi – Explained

There are many reasons that the DeFi sector has been experiencing a surge of interest lately.
First off, we need to mention that the regulators have been behind the curve in terms of DeFi, which has been able to flourish in this vacuum. As an example, in traditional unsecured lending, a legal requirement that lenders and borrowers know one another’s identities exists. On top of that, the lender always assesses the borrower’s ability to repay their debt. In DeFi, on the other hand, there are no such requirements. Instead, every part of the process is about mutual trust and preserving privacy.

Regulators always have to weigh the delicate balance between deterring innovation and failing to protect society from risks. In July, the US SEC made a major shift towards embracing decentralized finance by approving an Ethereum-based fund called Arca.
This is welcome and extremely important since one of the major challenges with financial innovation is the hostile environment that is created by archaic regulations. This had caused many cryptos and DeFi projects to fail, including major ones such as Basis, which returned $133 million to investors back in 2018 when it concluded that it couldn’t work within the SEC rules.

The second reason for the DeFi craze is that mainstream players are not-so-slowly and surely getting involved. Many financial institutions are beginning to accept DeFi, as well as seeking ways to participate. Seventy-five of the world’s biggest banks are now trialing blockchain technology to speed up their payment system as part of the Interbank Information Network, led by JP Morgan, Royal Bank of Canada, and ANZ. Even though most of these banks are testing centralized versions of blockchain, this is one step closer to DeFi than the current system.
Major asset management funds are starting to get interested in DeFi seriously as well, with the most prominent one being Grayscale, the world’s largest crypto investment fund.

The third reason for the craze is the effect of COVID-19. The pandemic has evidently driven global interest rates even lower, with some jurisdictions, such as the eurozone, now offering negative interest rates.
DeFi potentially offers much higher returns on investment to savers than high-street institutions. As an example, Compound has been offering an annualized interest rate of 6.75% for people that save with stablecoin Tether. Not only do you get the interest, but you also receive Comp tokens, which adds to the attraction of this offer. With as much as two-thirds of people without bank accounts having a smartphone, DeFi also has the potential to offer its services to the so-called unbanked.

One final reason for the surge in people putting money into DeFi projects is FOMO – fear of missing out. Many tokens are worth nothing or very close to nothing in terms of their utility, so we see a lot of irrational investment and pure speculation. But, people see certain tokens rise in value exponentially and want to turn their life around as well.
Like it or not, we are certainly heading towards a new financial system that will be more liberalized and decentralized than before, and DeFi will be at the forefront of these changes.

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What Is DeFi – Beginners Edition!


What Is DeFi –Beginners Edition

One area in cryptocurrencies that have recently attracted huge attention is certainly DeFi or decentralized finance. DeFi refers to financial services using smart contracts, automated enforceable agreements that work without intermediaries like banks or lawyers. Instead, they use online blockchain technology.
Between September 2017 and now, the total value locked up in DeFi contracts managed to go from $2.1 million to over $7 billion. The hype it has gotten in the past couple of months has risen over $3 billion.

This has, in turn, driven a massive rise in the valuation of all the tradable tokens that are using DeFi smart contracts. The total market cap of DeFi projects now exceeds $15 billion, almost doubling the value it had in July. Numerous tokens have exploded in value this year. For example, Synthetix Network Token has increased its valuation by more than 20-fold, while Aave did an almost 200-fold increase. So if you had bought $1,000 worth of Aave tokens in August 2019, your position would now be worth nearly $200,000.

So why is DeFi so disruptive, and what does it bring to the table?

DeFi projects are mostly built on the Ethereum blockchain network. They are the next step in the financial technology revolution that began 11 years ago with Bitcoin. One area in which these decentralized applications have taken off is cryptocurrency trading on DEX’s (short for decentralized exchanges) such as Uniswap. These exchanges are entirely peer-to-peer, without any person, company, or other institution behind the platform.
Other DeFi services allow you to:
Borrow and lend cryptocurrencies in order to earn interest using platforms such as Aave or Compound Bet on the outcome of certain events using Augur Create and exchange real-world asset derivatives such as currencies or precious metals on platforms such as Synthetix.
Buy stablecoins, a type of cryptocurrencies that are pegged to the value of a particular currency or commodity.

DeFi is often called “Lego money” because you can stack decentralized applications together to maximize your returns. As an example, you could buy a stablecoin such as DAI and then lend it on the Compound platform to earn interest.
Though many of today’s decentralized applications are niche, future applications could have a massive impact on everyone’s day-to-day life. As an example, you will probably be able to purchase a house or a piece of land through a DeFi platform under a mortgage smart-contract whereby you repay the price over a certain number of years.

The deeds would be tokenized on a blockchain ledger as collateral, and they would shift to the lender automatically in the event of you defaulting on your repayments. Because no lawyers or banks would be required in the process, it could make the whole process of buying and selling houses cheaper, smoother, and easier.

To learn more on how DeFi works, check out our next video where we will talk about the current DeFi craze and how it came to be.


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Binance Is Entering the DeFi Space!


Binance Entering the DeFi Space

Crypto exchange giant Binance has announced that it will be delving deeper into the world of DeFi products with its latest offering, which is an automated market maker named Binance Liquid Swap.

Aimed directly at its competitor Uniswap, as well as at its clones, Binance will launch an AMM liquidity pool that will allow its users to provide liquidity by depositing tokens. Just like Uniswap, which is the world’s most popular decentralized exchange, newly-created Binance Liquid Swap will also enable users to earn interest as well as a cut of the trading fees for the pool.

Binance’s product is the first AMM pool on a centralized exchange, and will, as such, be integrated into the exchange. This will allow users of the Binance platform to pool tokens in their wallets to earn rewards.

The AMM pool will use a pricing module instead of an order book so they could provide more stable prices as well as lower transaction fees according to the announcement Binance made. The company is currently prioritizing liquidity for its own tokens, which means that the first pools offered on launch will be BUSD/DAI, USDT/BUSD, and USDT/DAI.

Earnings from the AMM pool will be accrued with a corresponding seven-day annual percentage yield (APY for short) with returns converted into the assets in their respective pools. Transaction fees, as well as prices, will be determined by the number of assets gathered in the liquidity pools.

Binance CEO stated that the new product is aimed to attract more volume and participants. He said:

“We hope we can further the growth of the DeFi space and empower our users with more earning power and easy liquidity through a centralized AMM pool. The pool’s main characteristics are credibility, safety, and security, which are all provided by Binance,”

Uniswap is, at the moment, the world’s most popular token swapping protocol as well as a decentralized exchange, with more than $1.8 billion in liquidity.

Binance Liquid Swap is actually the second venture into DeFi that the company has made within a week. On Sept 1, the crypto exchange took aim at Ethereum by launching ‘Binance Smart Chain,’ a new Ethereum smart contract that is compatible with the existing Binance Chain.

The company stated that the blockchain was optimized for DeFi, with the goal of low-cost transaction fees that can go as low as 1 cent.

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A Brief Introduction To SushiSwap – An Evolution DeFi Project of UniSwap


SushiSwap copied the mechanics of the most popular DeFi protocol known as “Uniswap” and challenged it, openly with new cryptocurrency trading features. We can consider SushiSwap as a Uniswap rivalry. The SUSHI token holders are provided with a share of the SushiSwap trading commission, and incentives are given to the liquidity providers.

It’s a community governed crypto trading platform as the SUSHI holders have the power to make governance decisions. SushiSwap made a strong strategy to give tough competition to Uniswap by paying temporarily extra-large SUSHI rewards to the first two-week liquidity providers. 

What is SushiSwap, and how does it work?

Before you start understanding SushiSwap, you must know about Uniswap. Uniswap is an exchange protocol of DeFi which executes operations without any order book. It follows a model known as automated market-making (AMM), where funds are released by liquidity providers in the pools. 

SushiSwap is a similar copy of Uniswap with few differences mainly – the SUSHI token. These tokens majorly have two functions at the time of launch: authorize the holder with administration rights, and a share of fees is paid to them from the protocol commission. In simple words, SUSHI token holders have “ownership” of the protocol. The community accepted SushiSwap at a large scale because tokens distributed by this provide liquidity incentives that grant the holders with governance rights. In addition, the SUSHI holders are also rewarded with a share of fees paid by traders in the protocol. 

With these governance rights, the token holders can vote for any suggested SushiSwap Improvement Proposal (PIP). Therefore, they play a great role in bringing any minor or major changes in the protocol. So, the whole development and execution process of SushiSwap depends on SUSHI holders, and for any successful token projects, a strong community is always a true asset. 

How are SUSHI rewards distributed?

‘Liquidity mining’ is the mode through which Sushi is distributed. SUSHI is given to those liquidity providers who specifically invest in 13 Uniswap pools. Later on, the Uniswap LP tokens can be deposited by such liquidity providers to SushiSwap staking contracts for earning SUSHI. 

Initially, the 13 Uniswap pools were as follows:

The SUSHI-ETH pool provides the investors with double rewards in return. According to the protocol, a new token will be punched each time a block is extracted on Ethereum’s network, and the distribution is initialized with Ethereum block 10,750,000. The target is to stamp out 100 new SUSHI tokens for each block, but for the starting 100000 blocks, 1000 SUSHI tokens will be created per block, and after that, the rewards will be reduced. This procedure is adopted to provide incentives to early investors in the protocol in order to encourage them for Liquidity Migration. 

Once 100000 Ethereum blocks are extracted and the tokens generated will be migrated for liquidity into the SushiSwap contract. In the process, all the Uniswap tokens staked on will be reclaimed to initialize a new pool of tokens. Once the liquidity migration is over to fuel the first SushiSwap pools, then immediate operations will be activated in the protocol. The investors, without any extra effort, will receive SUSHI token share for providing liquidity for further processing. 


SushiSwap challenged the current most successful DeFi protocol called Uniswap. This company is providing high returns to token holders and governance rights to its community. Irrespective of the SushiSwap’s success, it has proved that no protocol in DeFi is accurate.

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What Should You Know About ‘Automated DeFi-Styled Market Pool’ Launched By Binance


The leading global cryptocurrency exchange “Binance” launched an automated DeFi-styled market pool for cryptocurrency investors to offer them with instant token swapping functionality. Binance officially brought this new trading platform from the decentralized finance (DeFi).

The platform will allow the money maker to deal with smart contracts. The cryptocurrency exchange system announced that it is an automated market maker (AMM) pool. The users are not only allowed to trade with funds but can also host liquidity pools. For the first time, an AMM pool is attached to the centralized trading exchange system. 

Binance Liquid Swap Product

The AMM pool product called “Binance Liquid Swap” will allow the users to keep their crypto funds in the pools for providing liquidity to the market. In return, they will earn the interest and share from the pool trading commission. They implemented an AMM model for pricing to provide users with stable pricing and low fees.

The AMM exchange model uses a predefined algorithm for pool liquidity to make markets. The exchanges provide liquidity to the pools regardless of the user’s token prior order size. The reward system and trading fee are yet to be disclosed. 

To start, the AMM pool provides the following trading pairs :


The security of the product is strengthened due to the Binance platform and also because of its move into the DeFi space with the launch of Binance Smart Chain. The smart chain is a highly performing Ethereum virtual machine. It is compatible with blockchain and works in parallel with the Binance chain. It offers users with smart contracts and allows them to stake a Binance coin. 

Binance Jump in DeFi 

In Binance, the liquid swap transaction fees and prices on AMM depend upon the asset number in each liquidity pool. The prices vary when currencies are added, removed, or swapped in the pool. The trader’s share in the pool will be collected every 7-day as an annual percentage yield (APY). The profit generated will be turned into assets for the respective pools. Binance introduced AMM pools to centralized exchange systems for more safety, security, and credibility.

As the decentralized Ethereum pool is highly risky due to huge market price fluctuations; hence, Binance went for the centralized approach, which would most probably minimize the big margin loss. The Binance is working to deliver instant swap liquidity in order to attract more participants and to incentivize the pool contributors for the community benefit. 


Binance designed this new DeFi “Binance Liquid Swap” having different liquidity pools so that users can earn income instantly and easily without much effort. The centralized AMM pool offers users to buy, stake, and trade their crypto assets. The instant swapping functionality will be executed via a centralized platform.

The users will be able to earn through interest and trading commission from the shares. This centralized platform is able to provide stable transaction prices and lower fees. The DeFi products perform better in the market if more investors are involved in providing liquidity to trade. Hence, to attract more liquidity providers, Binance is providing rewards in return. 

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Crypto News – DeFi Adoption Two Ways Ahead!


DeFi Adoption – Two Ways Ahead

As decentralized finance starts to gain ground, co-founder of Chainlink Sergey Nazarov believes that there are two ways for more DeFi mainstream adoption.
Nazarov spoke about DeFi at the Smart Contract Summit, where he said he sees two main ways the new technology “crosses the chasm” and makes more Web 2.0 companies actually adopt these technologies.
“The transition can occur in two different key dynamics. The slower path would be the interest yield. We are, at the moment, in a low-interest environment, and the appetite to combat yield will become massive. The second, faster path, is through counter-party risk. This is where the solvency of the brand-based guarantees erodes and where the math-based contractual guarantees come in. While the slow case is compelling, the fast path is scary, but we should be seeing both.”

He also added one of the exciting possibilities for DeFi, which is when people start thinking of blockchain when looking for financial products. This would effectively transition the idea that blockchain is for tokens only into something much larger. He said that the industry would eventually see investors openly talking about their crypto holdings, but that this will only happen after crypto proves that it has superior value over other financial products. Also, this is the time where people would stop holding crypto only as a means of diversification.
Nazarov noted that information, such as market data, is always essential, but stressed that privacy is as well. He pointed to its newest acquisition, called DECO. The DECO protocol uses zero-knowledge proofs and advanced cryptography to provide enhanced privacy to users.

Nazarov is a well-known crypto bull and one of the people behind Chainlink. Its LINK token saw a meteoric rise in 2020 as interest in it, as well as DeFi, is at an all-time high. Chainlink is currently holding the 5th place when it comes to crypto market cap, just recently surpassing Bitcoin Cash and Litecoin.


YEarn DeFi Ultimate Review: Everything you should know in 2020 & Beyond

yEarn is a liquidity aggregator that offers automated yield farming through several lending pools. is one of the most popular yield farming protocols, and it shifts between top DeFi lending protocols like dYdX, Aave, and Compound. 

yEarn has also created Y and BUSD pools,  two lending pools on the DeFi platform Curve that consists of top stablecoins such as the USDT, TUSD, USDC, and DAI. 

yEarn has a native token called YFI, that is earned through liquidity money on different pools. YFI is earned by staking liquidity proof. YFI is one of the DeFi tokens launched with no pre-mine and no initial DEX offering.

yEarn Background

Andre Cronje founded yEarn in February 2020. However, yEarn didn’t raise any funds since Andre revealed that he developed the software by himself. Andre is famous in the DeFi community for ‘testing in prod.’ Meaning that almost all his contracts are directly pushed to the mainnet without any formal audits. Andre is always open to losing some money to his smart contract and openly stating that individuals should not bother using the software regarding particular yEarn portions. Andre has managed to control virtually every protocol aspect over the community, including minting new YFI and governance. However, it’s the yEarn community that determines the yEarn protocol.

How yEarn Finance Works

yEarn Finance works in a rather complex way, perhaps because of the protocol’s lack of proper documentation. In reality, however,  yEarn .finance’s protocol is easy to comprehend.

As we have already mentioned, does move the stable coin funds between dYdX, Aave, and Compound based on the stablecoin pool asset generating a higher APY. Currently, supports TUSD, SUSD, USDDC, DAI, and USDT. is itself governed by the community, which will decide the lender protocols it supports and the cryptocurrencies that will be supported over time.

When one deposits stablecoins here, they’ll be converted into equivalent amounts of ytokens. For example, DAI will be converted to Ydai. These can help in YFI tokens earning.

However, the initial protocol deposits, shuffling them automatically between the dYdX, Compound, and Aave pools with higher yields. Such a protocol will also take a very tiny cut that will be deposited to the pool. Such can only be accessed by holders of YFI tokens.

There is also the that involves tokenizing the debit in other protocols with Aave’s help to ensure it is used in different DeFi protocols. However, only and were available at the time of writing this piece.

How You Can Earn YFI Cryptocurrency

Before looking at the three different ways you can begin earning YFI, let us first look at what’s happening behind closed doors. You can send the ytokens Curve Finance’s Ypool, DeFi protocols allowing the trade between low slippage stable coins.

The Curve Finance incentives mining liquidity helps it offers one a return of yCurve tokens generated to provide liquidity for Curve Finance protocols.

Cronje created YFI tokens to allow its users to trade the yCurve using their funds accumulated in the yCurve pool in place of governance of yEarn .finance’s ecosystem.

The first method to earn involves depositing the yCurve to yEarn .finance’s yGov pool.

The second method involves making a 98% to 2% YFI and DAI deposit to the yGov pool into Balancer protocol and exchanging with BAL tokens. After that, balancer protocol tokens are deposited into the yGov for YFI.

The last method involves making a deposit of yCurve and YFI mixture into the balancer, exchanging them for BPT tokens that will be deposited into the accurate YFI tokens and yGov. YFI was designed in a manner that all the three pools would be having at least ten thousand YFI tokens for grabs. Governance

YFI tokens are used for governance in the yEarn ecosystem. One YFI token equals a single vote. ecosystem proposals only works when 33% of token holders reach the same agreement. If they meet this condition, then we can conclude that over 25% of the token holders are against the proposal. However, if approved, over 50% of the YFI holders have to vote in support of the proposal to be implemented. 

However, only the YFI holders to vote are the ones with BPT tokens in the yGov pool. It is the reason why Cronje calls this system of governance meta governance. The process involves holding YFI tokens and exposing yourself to high vulnerability and risk by having all the assets held by close to six DeFi protocols that come together with the – The Roadmap

Since the yEarn .finance’s protocol has been in existence for a couple of months while that the governance has currently (when writing this) existed a month. There isn’t much we can talk about concerning the roadmap. During our interview with Andre Cronje, he did reveal that DeFi protocol development like is a type of a manic episode having almost all the protocol groundwork being created within a couple of weeks.

Andre made the YFI token for the purpose of ushering in a whole new community governance era that isn’t principle-based. Since Cronje and other key developers were never interested in managing the ecosystem, the YIPs are not the driving force for the ecosystem development since the introduction of community governance.

Most recently, the YIP attempt to increase YFI token supply cap didn’t attain a 33% vote, which led to YFI token forking into the other token known as YFI. The YFI token is not responsible for any role in governance, but it is one thing that the entire community would vote on to change soon.


Since the future is a bit fuzzy. It offers what is considered to be the first real experiment in decentralized finance that the world has ever encountered. With the possibility that the DeFi protocols we encounter today might not be available tomorrow,, as an ecosystem of lending pools, will always be marked as a watershed moment in the DeFi space for many and lots of great reasons. DeFi proponents hope that will be around for many years.

Crypto Daily Topic

Challenges Facing Decentralized Finance

Decentralized finance involves the use of public blockchains in the monetary systems. It is a new fiscal scheme, thus has a lot of hot debates surrounding it. The term ‘public’ is fundamental and is relatable to that of the Ethereum public blockchain. A public blockchain has no room for centralized authority. 

Decentralized finance is crucial because not everyone around the world can access financial services. They are not available to up to 1.7 billion people in the world. Financial institutions are also unable to set the essential infrastructure that would make people access more money. The current infrastructure is massive, but it is inadequate, and cannot reach everyone out there.  

With decentralization, the current failures on infrastructure are as good as over. It eliminates the failure spot and ensures that it is possible to store and share records among different joints across the network. There is a lot of dependency on the centralized system for the current infrastructure to function. 

Comparison of the traditional and decentralized finance

The main difference between the traditional and the decentralized finance is the mode of work.

Traditional financial systems use centralization and lead to ineffectiveness and insecurity.  Security risks are tenacious in the current conventional financial system. 

There is also an increase in cybercrime due to lack of upgrades in the technologies used by financial institutions. There is a risk of hacking for most transactions. They all lead to data and fiscal risks.

On the other hand, decentralized finance ensures there is a solution to a certain extent. Due to the utilization of public blockchain, there is no reliance on a centralized system.

A decentralized system can function without requiring proper infrastructure. In simple terms, it decentralizes the economy and provides the viability of the economic activity to everyone in the world.

Another crucial feature of decentralized finance is the dApps short for decentralized apps. Through them, financial institutions can develop functional apps on the public blockchain. They also allow anyone to work together with them with less cost per interaction. 

What DeFi brings to the table


i) Permissionless


Public blockchain won’t require permission from anyone else to access and interact. It is thus a top choice for implementation in the world.


ii) Decentralization


Since there is no central authority, data storage occurs amongst the different joints in a network. 


iii) Transparency


There is transparency in the public blockchain.

However, the decentralized system’s growth and proponents face several challenges that would entirely affect its adoption. 

Challenges facing the decentralized finance 


1. Hacking of smart contract


Decentralized finance projects depend on smart contracts that run on Ethereum. The programs’ code is usually public, and anyone with sufficient knowledge can examine and interact with it. Blockchain networks that run on smart contracts are attractive to hackers. 

There was a scenario in 2016 when a hack resulted in the loss of 3.6m ETH. The value was approximately 70 million USD. The hack was around 10 percent of the total supply of ETH at that time. 

The hacker could not access the funds for 28 days. During that period, the Ethereum group managed to reverse the transaction. However, there is a high likelihood that a similar solution may fail to work ever again. 


2. Manipulation of oracles


The decentralized finance ecosystem depends on data providers known as oracles to distribute market data that resolves smart fiscal contracts. Oracles are also essential to Maker’s smart contracts in understanding the current price of ETH that determines whether there is adherence to the collateralization ratio.

Decentralized finance applications use price data as the most common type of data provider. Does the oracle respond to queries such as “What is the price of token Y?” What happens if there is a manipulation of the information that an oracle provides? An oracle error on 24th June 2019 led to inaccurate price data, causing an irregular performance on the Sythentix protocol. The malfunction allowed KRW holders to buy ETH at a discount. 


3. Ethereum non-scalability


Decentralized finance is essentially a movement based on Ethereum. Innovation and liquidity primarily focus on them. There is the launch of new projects all the time that aims to lure new users with better returns and more effective token assortment management.

Although there is little on the front-end, the Ethereum public blockchain carries out a lot of heavy lifting behind the scenes. There is dependence on the collaborative building network of the separate nodes.  

Due to the challenges facing its scalability, Ethereum either fails or becomes too expensive to work together with dApps. On several occasions, there have been network congestion. The best solution to the scalability challenges would be a significant upgrade in the network. It is happening already, but it will take time for its benefits to materialize ultimately.  


5. Stablecoin Fail


Maker is an Ethereum project that started operations in 2014.  In 2017, it came up with a stable coin DAI, which pegs softly to the US dollars. Anybody can use BAT, ETH, and USDC as the security to create DAI while maintaining a minimum ratio of 1 to 5 to 1 and 1 to 25 to 1 for the USDC. 

If, for example, you have 200 USD in the form of ETH, you can create 100 USD in the form of DAI. DAI is, at the moment, the most extensively utilized stablecoin in decentralized finance. In case of a hack on the smart maker’s contracts and the criminal access the user’s security, DAI becomes worthless. Such a move would affect the entire decentralized finance space. 


6. Overcollaterization


Due to a lack of guarantees in volatile markets, lenders usually seek higher security for their loans. It reaches a point where most lenders and borrowers will only work when there is a significant amount of assets as collateral. 

The situation undermines the vital function of borrowing and thus fails to satisfy one of the main ideas of decentralized finance: reaching those without access to the banks. Besides, it leads to a significant slash in the profits from leverage trading.  


7. Composability


Composability is among the most marketed elements of decentralized systems. It relates to how they can flawlessly integrate, enabling rapid growth, service complexity, and even new financial products. However, composability creates essential dependencies between decentralized finance protocols that could develop into systemic risks. 


8. Accessibility of the users’ tokens


In decentralized finance, tokens are under the management of smart contracts, which are non-living bits of programming codes. It is a non-custodial finance service that is contrary to the centralized system that uses humans. Custodial services call for heavy regulations. However, when the project is non-custodial, the team saves a lot of cash by dodging burdensome legislation.

Admin keys help the developers behind the decentralized finance project control the smart contracts that handle user funds. The weakness is a lack of transparency on who possesses the keys. There is a possibility that an individual could have access to all of them.


Although most people have internet connections, there is little public awareness of decentralized finance. Very few people know about it, which can affect its use rate. Besides, the fact that it is still in its infant stage means there are relatively high risks.

There is a dire need to solve most of its challenges to increase its viability to different administrations and organizations. Decentralized finance focuses on creating financial services that are distinct from the traditional fiscal and political systems. It has the potential to prevent instances of censorship, discrimination across the world and allow for a more transparent financial system.  

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Tokenized Bitcoin on Ethereum – Explained


Bitcoin owns a stable use case and plays an active role in the industry as a public good. Although, it has limited features, leaving almost a very little space for future innovations encouraging Bitcoiners to explore what else can be done with Bitcoin. From this, an idea evolved that Bitcoin can be used on other blockchains. This is how we reached to tokenized Bitcoin on Ethereum. As the name suggests, Bitcoin is tokenized so that it can be used on other blockchains.   

What is Bitcoin?

Bitcoin is a reserved asset in the cryptocurrency world. It has the highest adoption rate, highest trading volume, best liquidity, and holding a superior position in the crypto capitalization market. In fact, entrepreneurs believe that Bitcoin can serve all required purposes in the market, so there is no need for any other cryptocurrency. Bitcoin with an uppercase b is a network whereas with a lowercase b is a unit of account. 

What is Bitcoin Tokenization?

The tokenization of Bitcoin means processing it to deliver a blockchain security token, specifically having real tradable value. Security tokens can refer to company shares, real estate ownership, or investment fund. These can be used as exchange units for trade in a secondary market. 

Why tokenize Bitcoin on Ethereum?

Bitcoin is designed to deal with a few things only and has inherent limitations, but we know that it is the most valuable crypto out there. Technically, we can execute smart contracts using Bitcoin, but it has limited opportunities as compared to Ethereum. Bitcoin is an amount we are holding, while Ethereum provides us with an opportunity to build something with it. 

Tokenising bitcoin in other networks can improve its utility. It can enable various functionality that the native Bitcoin doesn’t support. The security model and core functionalities of Bitcoin remain constant, with other advantages like the increased speed of transactions, high privacy, and tangibility.

DeFi was raised with a potential composability idea, which means the same public is executing the applications. It is an open-source platform with a permissionless base layer so that all the users can work together seamlessly. The composable layer of Bitcoin has introduced a new form of financial framework blocks that could enable is to implement Bitcoin in various types of applications.

You can tokenize Bitcoin on various blockchains like Ethereum. All are having different degrees of decentralization, various assumptions regarding risk factors, and trust issues. Transactions with the launch of Ethereum become cheaper and faster. But it’s quite dangerous also if the holder loses bitcoin due to any contract bug as there will be no alternative way to unlock those bitcoins on the blockchain. 


The prime reason behind tokenizing bitcoin on Ethereum is to enhance bitcoin’s utility. Ethereum has captured significant share in bitcoin transactions; there is an increase in the involvement of Ethereum in the global network for value transactions. Blockchain industries are developing to bridge the gap between the cryptocurrency networks.

The tokenization of bitcoin created a new financial scheme that is more efficient, vast, and democratic. Through tokenization, players in the traditional market are growing rapidly, and new contenders are showing interest in adopting the technology. 


What’s Balancer (BAL) All About? 

DeFi is currently the hottest thing in the crypto space, thanks to DeFi protocols that challenge everything we know about money. Smart cryptocurrency investors are rushing to DeFi platforms to passively earn money, trade with the best prices, and find ways to multiply their portfolio. 

Balancer is one such DeFi protocol. The project is making waves in the space with its cutting edge ideas like customizable liquidity pools, the ability to acquire BAL tokens by simply staking in pools, and a smart order routing protocol that finds traders the best prices. 

Let’s examine Balancer more closely and see how exactly you can start benefiting from the protocol! 

Understanding Balancer 

Launched in September 2019, Balancer is an automated market maker (AMM), a portfolio manager, exchange, and liquidity provider that runs on top of Ethereum. Balancer enables traders to exchange various cryptocurrencies with minimal cost and slippage. It aims to replace centralized market makers with peer-to-peer and non-custodial trading and exchange services. 

Decentralized trading platforms can use the Balancer protocol to determine the best exchange rates and trading prices. The protocol provides liquidity for the trades, using the funds deposited by stakers/investors in the platform’s various liquidity pools. 

Balancer is not the first AMM in the DeFi space. What makes it special is that it supports up to eight assets, including ETH, DAI, and USDC per market. 

Balancer Pools

Balancer Pools are liquidity pools, in which anyone can stake crypto and hence inject liquidity into the protocol. Unlike other liquidity pools in the DeFi space, Balancer Pools don’t require you to split between just two tokens. Instead, you have at your disposal up to eight tokens. For instance, a pool could have 30% DAI, 30% LINK, 30% MKR, and 10% WETH, while other pools can only support, let’s say, 60% USDC and 40% MKR. 

Balancer employs smart order routing (SOR) to provide the best rates and trading prices possible. Balancer pools are like index funds; only this time, instead of being charged for portfolio management services, you’re the one that actually gets paid for contributing liquidity.

Balancer pools are also customizable, meaning users can optimize them for different needs. For instance, we have Liquidity Bootstrapping Pools (LBPs) in which you can create deep liquidity for your token. There’s also stablecoin pools that support zero impermanent loss.

How can You Use the Balancer Pools? 

You can use balancer pools for two purposes: providing liquidity and trading. 

#1. Providing liquidity: you can deposit any of the eight supported tokens into pools, providing liquidity to traders of that particular pool. Liquidity providers stand to earn a fee (paid by the traders). However, volatility and other market factors can sometimes cause liquidity providers to lose part of their investment. Studying market patterns keenly and not investing more money than you can afford to lose are some of the ways to mitigate potential losses.

#2. Trading: Users can trade tokens in a safe and peer-to-peer manner. Balancer’s SOR protocol works to ensure the best prices.

How to Provide Liquidity to Balancer

The process of providing liquidity to Balancer is pretty straightforward.

  • Visit Balancer pools and connect MetaMask, WalletConnect, Portis or Coinbase wallets
  • Take a look at the listed pools and choose which one you would like to go inject liquidity to
  • Click Add Liquidity
  • Click Unlock to view the tokens you chose in the previous step. This step authorizes the Balancer protocol to use your deposited tokens
  • Indicate how many tokens you want to deposit
  • Confirm/Complete the transaction on your wallet

Before you get started, ensure that you have a sufficient balance of the tokens you want to deposit. 

Liquidity Mining

Balancer announced that it will be supporting liquidity mining starting from June. To this end, the protocol will be distributing 145,000 BAL tokens (roughly 7.5M per year). 

All you need to do to earn the token is to provide liquidity to the pools. Rewards will be paid out every week. The process is enabled for all pools on the platform, but with this condition: “a USD price can be extracted from CoinGecko for at least two tokens present in the liquidity pools.” 

Staking in Balancer doesn’t just earn you BAL. It gives you an opportunity to make your voice heard in the direction of the protocol. 

The BAL Token

BAL is the native cryptocurrency of the Balancer platform. The team introduced the token to make the platform decentralized by “diversifying governance.” Announcing the move, the team said: “We believe BAL tokens are the vehicle to drive alignment and participation in the protocol. BAL tokens are not an investment; BAL token holders should be people that interface with the protocols in some way, are committed to its future development, and want a seat at the governance table.” 

BAL token holders will help the platform achieve its highest potential. The team gives the following examples as to how: deploy the platform on other blockchains apart from Ethereum, implement scaling solutions, and the introduction of fees to start generating revenue. BAL holders can be at the front seat in actualizing these and more. 

The Hack That Shook Balancer

The world of DeFi and indeed crypto, in general, are constantly targeted by hackers, phishers, and all manner of bad actors. Balancer was the victim of such an attack on June 29 this year that led to the pool losing about $500,000 worth of crypto. Since Balancer is decentralized, anyone can create an asset pool with whatever parameters they wish. Let’s go through what happened: 

A hacker took a flash loan of $23million worth of Wrapped Ethereum (WETH) tokens from dYdX then proceeded to trade the WETH with Statera (STA) tokens against themselves, back and forth, 24 times. This almost completely drained the STA liquidity pool. By the time the hacker was done, STA balance was one weiSTA (one billionth of a coin). 

The Balancer protocol was tricked into releasing WETH equivalent to the original balance, granting the hacker a bigger margin for every trade. The attacker didn’t stop with WETH – they did the same thing with WBTC, LINK, and SNX, all against STA. 

Analysts at 1inch exchange said, “The person behind this attack was a very sophisticated smart contract engineer with extensive knowledge and understanding of the leading DeFi protocols.” The attacker’s address was not identified because they used an Ethereum mixer to cover their tracks. 

BAL’s Token Distribution

The Balancer token’s total supply is 100 million. So far, just 35.4 million of that has been minted, with its distribution being as follows: 

  • 22.5M went to the developing team, and stock options, advisors and investors 5.65M, or 25% of this  is currently locked, with the remaining 75% subject to 3 year vesting period
  • 2.5M was reserved for future team members stock options
  • 5M was reserved for the Balancer Ecosystem Fund
  • 0.435M was reserved for liquidity miners
  • Out of the remaining token’s supply, only 1.74 BAL is set to be released each year.

Key Metrics

At the time of writing, BAL trades at 16.01 with a market cap of $111, 162, 211, that places it at #87 in the market. BAL’s 24-hour volume is $10, 665, 976, and it has a circulating supply of 6, 943, 831. The coin’s highest price was  $23.73 (June 24, 2020), while its lowest was $7.88 (July 15, 2020). 

Buying and Storing BAL

If you wish to acquire some BAL tokens, the platform’s in-house exchange, Balancer Exchange, is the best place to do so. Alternatively, you can grab some BAL from any of several exchanges, including Binance, Huobi, BKEx, OKEx, Hoo, Poloniex, FTX, Bibox, Switcheo Network, BiKi, Bitribe, Uniswap, Bamboo Relay and You’ll find the token as a pair with LEND, DAI, ETH, BTC, USDT, BNB, WETH, MKR, and so on. 

BAL is an ERC20 token, meaning it can be stored in any wallet that supports Ethereum. Great choices include MyEtherWallet, MetaMask ethaddress Parity, Guarda, Trust Wallet, Atomic Wallet, Parity, Ledger, and Trezor. 

Closing Thoughts

Balancer is not the average automatic market maker. It supports an impressive number of tokens so users can stake in a wide variety of them. Traders can also get the best possible deal, thanks to the platform’s SOR protocol. And even better, staking in BAL gives holders the ability to shape the Balancer protocol into what best shape they envision it to be. The Balancer protocol is only beginning to wow DeFi investors with greatness. 


What’s Aave (LEND)? A Beginner Guide

With blockchain came the concept of finance that’s outside the control of the state and government. Cryptocurrencies have been the rage these past few years. But now a bolder and fresher idea is emerging, and it’s called decentralized finance (DeFi). DeFi is the notion that the people have the power, and they don’t have to trust traditional finance systems to make the calls. 

Aave is a DeFi project that allows users to borrow crypto without depositing collateral. Lenders can also deposit money and start earning interest right away without lifting a finger.

Describing itself as “an open-source and non-custodial protocol enabling the creation of money markets,” Aave introduced the idea of uncollateralized loans, carving out for itself an influential position in DeFi. 

With that, let’s find out more about the project!

What’s Aave?

Launched in 2018, London-based Aave is a DeFi platform running on the Ethereum blockchain that lets you lend and borrow a wide range of cryptocurrencies in a decentralized and peer-to-peer manner. Aave takes its name after the Finnish word for “ghost.” The team chose this name to reflect the constant evolvement and imaginative technology that intrigues users. 

The project brings distinguished features to the DeFi space, such as uncollateralized loans and “rate switching.” Aave utilizes the Aave Protocol to create various types of crypto markets where users can build an investment portfolio. 

Background of Aave

Aave was originally known as ETHLend, a crypto lending platform established in 2017 by Stani Kulechov. The company raised about $600,000 worth of Ether in exchange for 1 billion LEND tokens. 

ETHLend rebranded into 2018 in order to incorporate even more platform features, suiting the current cryptocurrency consumer.  

Aave’s Offerings

Aave offers quite an impressive range of unique collaterals for any DeFi lending protocol. 

#1. Flash Loans 

Flash loans are one of Aave’s biggest selling points, and that’s especially because you don’t need to deposit any collateral to use them. Instead of using collateral to ascertain payments, flash loans use the timing of the loan’s repayment. Flash loans were invented by Aave, and they work this way: 

  • Borrowed and repaid in the same transaction
  • No collateral needed
  • Borrow and return the borrowed amount plus a small interest
  • All this needs to happen at the same time, or the transaction will not be approved

Flash loans can be applied in the following kind of scenarios: 

  • To take advantage of crypto price differences in two or more exchanges without necessarily having the principal amount to do so
  • Debt refinancing, or swapping collateral long positions without having to pay the repay the debt of the loan position

#2. Flexible Rates 

Unlike most lending platforms that use either fixed or variable interest rates, Aave implements a “rate-switching” function that allows borrowers to switch between “stable” and “variable” rates, a very handy feature in the extremely volatile crypto market. For high-interest rates, a borrower can opt for the fixed-rate, but for volatile rates that might likely take a dip, they can go for the variable rate. 

Thanks to this new and exciting option, Aave has witnessed particularly strong growth for stable rates loans after their introduction in May 2020. Note that ‘stable’ here does not imply ‘fixed.’ Rather, Aave’s stable loans are more stable variable interest rates that are resilient against wild price swings. This ability to rate-switch gives users more control over their loans by allowing them to choose the best possible rates. 

How to Lend on Aave

Getting started on Save is fairly simple. Visit and connect using a web 3.0 wallet such as Walletconnect, Coinbase Wallet, or Fortmatic. You can also connect with the Ledger hardware wallet. 

Depositing is easy. Just select an asset and enter how much you wish to lend. Next, allow Aave to access the asset. Then, you’ll need to sign to approve the transaction. Your deposited funds will go to the lending pool, after which you start monitoring real-time how much interest you’re gaining on the Aave dashboard. 

Aave’s interest-earning tokens are known as aTokens, which are similar to Compound’s cTokens. However, unlike the cTokens, aTokens retain the value of the underlying asset and increase only in amount. On the other hand, cTokens appreciate in value with interest.

The LEND Token

LEND, an ERC20 standard token is the native token of the Aave ecosystem. LEND token holders get the right to make their voice heard on any proposals advanced by the Aave team. Such proposals include interest rates, the addition of new assets, liquid configurations, and so on. 

LEND also is burned so as to prevent inflation and increase its value over time. 80% of platform fees are regularly burned on the open market for this end. 

In the future, Aave plans to increase the staking ability of users who’ll then get to participate in protocol governance as well as have a claim in exchange fees in exchange for helping secure the Aave network against malicious borrowers. 

LEND’s distribution was as follows: 

  • 30% to core developers 
  • 20% reserved for user experience development
  • 20% reserved for management and legal
  • 20% reserved for promotions and marketing
  • 10% result for unexpected costs

Which Assets Does Aave Support?

Aave currently supports a variety of tokens, including but not limited to Basic Attention Token (BAT), Synthetix USD (SUSD), Chainlink (LINK), Synthetix (SNX), Decentraland (MANA), Kyber Network (KNC), Ethereum (ETH), Dai (DAI), Aave (LEND), TrueUSD (TUSD), Tether (USDT), Wrapped BTC (WBTC), 0x (ZRX), USD Coin (USDC), Maker (MKR) and Augur (REP).

Who is the Team Behind Aave?

Aave is the brainchild of CEO Stani Kulechov, who originally founded ETHLend. Jordan Lazaro Gustave is the COO, and Nolvia Serrano is the CMO. Both Gustave and Serrano bring over their experience from ETHLend. All in all, the team is made of 22 members with eclectic skills ranging from blockchain, fintech, Ethereum, smart contracts, lending, payments, custodial services, and gaming. 

Aave: Tokenomics 

As of July 30, 2020, Aave is trading at $0.0324118, and with a market cap of $421, 352, 978, it’s the 30th biggest cryptocurrency in the world. Aave has a 24-hour volume of $64, 663,115, and a circulating and total supply of 1, 299, 999, 942. The token’s all-time high was $0.442615 (Jan 07, 2018), and its all-time low was $0.003353 (Sep 06, 2019).

Where to Buy and Store LEND

You can grab some Aave from any of several exchanges, including Binance, MXC, Bilaxy, Bibox,, Poloniex, Alterdice, Uniswap,, Eterbase, Fatbtc, and Loopring. 

As an ERC20 token, LEND can be stored in any wallet that supports Ethereum. You will not go wrong with any of these choices: Atomic Wallet, Trust Wallet, and of course, the hardware wallets (and hence ultra-secure) Ledger and Trezor. 

Final Words

Given its constant re-invention, Aave’s ghost reference is fitting. Its uncollateralized loans and rate-switching features are two of its radical innovations to ever be seen in the world of finance. And that’s what DeFi is all about: disrupting norms to deliver real value. 

Crypto Daily Topic Cryptocurrencies

What’s Yield Farming?

The newest and hottest DeFi trend in town is ‘yield farming.’ And no, it has nothing to do with rain and crops and granaries. Instead, ‘DeFiers’, or DeFi fans, have latched onto the metaphor to describe interest or ‘yield’ that’s achieved when they put to use crypto assets such as Dai, USDC, and USDT into DeFi platforms such as Compound. 

The DeFi scene had already exploded in 2020 before yield farming became the next big thing. But in June, things went notches higher after DeFi platform Compound started distributing its governance token, COMP, just this June. In other words, Compound started rewarding users with the COMP token. The platform has taken on a near-celebrity credential in the DeFi world, thanks to the distribution. Hordes of investors and traders have flocked to the network to “farm” COMP. 

So, how does yield farming work? Let’s demystify this trend as we explore any risks that you need to look out for. 

How Yield Farming Works

At its core, yield farming, a.ka liquidity harvesting, is when you lend cryptocurrency, such as USDC or Tether, using a platform such as Compound. Compound will, in return, lend the funds to borrowers who want to use them for speculating in the market. Interest rates will vary with market movements as well as demand. However, just by participating in the Compound platform, you start to earn COMP tokens and interest. Other miscellaneous fees may also make part of the final equation. If the COMP tokens increase in value, your returns will also see a massive jump. 

What kind of cryptocurrencies are involved? 

Currently, Compound, only launched in June, is the biggest such service. Other major coins include Balancer, Ren, Curve, and Synthetix. Synthetix is the one that came up with the idea. As we speak, these projects have $1 billion in user funds locked up for lending. Most of the users are speculators seeking to earn triple-digit returns.

What are the Risks? 

Well, for one, theft. The crypto scams and frauds you hear about are not far off just because this is a new type of investment. Remember, the funds you lend out are stored in software. And hackers always seem to have a knack of discovering new ways of compromising even the most seemingly foolproof code and stealing funds. 

There’s also the risk of deposited coins losing value – a phenomenon that could cause the entire system to crash and burn. Moreover, there’s the whale effect. This is when investors with significant holdings go short, a move that could potentially shake the market. 

On the whale point, still, there’s concern that they could manipulate prices. If a whale lends to a platform like Compound and then borrows the money back, it effectively creates artificial demand for the currency, creating inflation. Traders with modest holdings need to know that yield farming “has become a game for whales who are capturing the vast majority of rewards,” as pointed out by crypto research firm Messari. 

Why is Yield Farming Suddenly Hot? 

The reason is twofold. Amid the Covid-19 pandemic, cryptocurrencies, generally viewed as independent of system controls, have witnessed a surge of interest as Fiat currencies experience volatility due to overall economic uncertainties. There’s also the fact that these yield-harvesting products only just recently debuted, and are backed by high-profile entities like Andreessen Horowitz and Polychain. 

What’s the Future of Yield Farming?

Jesse Walden, the founder of venture fund Variant, has said that while yield farming can promote growth for the sector right now, for it to succeed in the long-term, users have to have a reason to continue staying in the platforms. 

“Yield hacking in DeFi is a short-term incentive to drive user growth, but the bigger game is the long-term wealth creation that comes from building (and owning!) a piece of the products and services that billions of people will use every day.” 

Yield Farming Tips

Here’s how the most successful yield farmers are getting, well, profitable harvests. 

A DeFi investor by the name Degen Spartan says the strategy of investing stablecoins in the sUSD Curve pool and depositing  LinkPool tokens on the Synthetix forum has yielded him an Annual Percentage Yield (APY) of 20%  since he started investing this way in 2019. Spartan thinks that the increased investor interest in COMP  has allowed the less explored investing strategies to thrive, increasing the overall yield in the DeFi space.

CoinFund founder and managing director Jake Brukhman believes there’s a lot of potential in the niche. He says he has witnessed APYs of anything from a few points to several hundred points, but that this hinges a lot on what assets you hold and your risk tolerance. Brukhman believes this success is a result of either the overzealousness of these protocols (some are offering capital at incredibly low rates) or inefficiencies in their systems (still a young niche). 

Another investor going by the name SNX Professor recommends monitoring your trades daily, and only switch between lending protocols only when it makes sense. This is because yield farming, like any type of investment, takes time. Remember, you’ve invested in things such as transaction and slippage fees. As such, it’s better to wait it out in one platform until your investment can truly yield results. 

And lastly, 1kx founding partner Lasse Clausen believes investing in these up and coming protocols is way more promising than investing in platforms that are already highly valued.

Closing ThoughtsYield farming is disrupting the DeFi scene and capturing the attention of investors and traders. For fear of missing out (FOMO), it’s easy to jump in the bandwagon rather blindly. However, this new type of crypto investing might be flashy and promising, but that doesn’t mean you should throw caution to the wind. Take highly measured steps and don’t put in more money than you’re willing to lose. 

Crypto Daily Topic Cryptocurrencies

A Guide to DeFi Investing

DeFi. The newest buzzword in blockchain and crypto. What is it, and why should you pay attention? You should because it’s an exciting new way to interact with and make money out of crypto if you play your cards right. 

The crypto world has been taken by DeFi because it represents a bold new departure from the world of centralized finance. It also has perks, like instantaneous transactions and anonymity. Bain Capital Ventures partner Salil Deshpande believes DeFi has caught on fire because people have in them “a libertarian streak.” 

But what does DeFi investing entail and what should you know before you join the bandwagon? 

What Does it Mean to Invest in DeFi?

Still an entirely new field, many people may be at a loss at what it actually means to invest in DeFi. You probably hear terms like ‘staking’ and ‘decentralized lending’ being thrown around, or wonder what type cryptocurrencies make the rounds in the world of DeFi. If that’s you, we’ve got you covered. Below, we’ll cover the basics of investing in DeFi and then examine the do’s and don’t’s of the same. Remember DeFi is based on crypto, and so the inherent risks haven’t gone anywhere. 

DeFi Investment Opportunities

Now, investment in DeFi isn’t a lot different from traditional investment, but a few unique aspects make it stand out. 

For instance, traditional lending involves the lender giving money to the borrower – with them (the borrower) making the promise to return the money with interest.  

This is how decentralized lending works as well, except this time, blockchain-based smart contracts lock in collateral from the borrower and automatically delivers interest to the lender periodically according to the terms of the contract. 

Then there’s staking. In traditional finance, individuals usually deposit money to institutions such as banks and credit unions and these institutions use this money to maintain liquidity and sufficient cash reserves. In DeFi, this process of buying and depositing digital assets into a platform’s account is known as staking. Such platforms need the funds to lend out to other users (borrowers), and to help maintain and secure the network.

The Do’s of Depositing in DeFi

DeFi Investing can be incredibly lucrative, but you can also potentially lose everything especially if you go in blindly. Here’s what you should definitely do before putting your money up.

#1. Do Your Own Research (DYOR)

The decentralized finance world is rife with scams and frauds. Scammers usually take advantage of the novelty of the tech to rip off unsuspecting investors. But that doesn’t mean there’s no way you can identify a scam. 

The quickest way to do so is to type the name of the project on Google along with the word ‘scam.’ The reason for this? If the project is a scam, chances are other people have already pointed that out. Whether it’s on cryptocurrency forums, Reddit, Twitter, or even Quora, it’s most likely certain the thought has been floated. And often in crypto, if it walks like a duck…

Also, DeFi protocols are based on open-source code. That means anyone can check ‘under the hood’ and identify anything that’s off. If you’re a programmer who’s familiar with smart contracts, then you can definitely examine the assemblage of what’s underneath. 

#2. Look at Reviews 

This is another way to establish the credibility of a DeFi project, and it involves looking at what other people are saying. This starts by looking at audit reports. Any DeFi project worth its salt will invite industry auditors such as ChainSecurity, Quantstamp, Trail of Bits OpenZeppelin, e.t.c. to conduct a manual audit of the project. 

The next thing to check out is what everyone else is saying, including the developers themselves, on their website and other forums. Look at the project’s social media handles and see the comments on posts. And if a project is lacking a social media presence, that right there is a big flashing red sign. 

Other helpful places to look at websites that cover the world of DeFi: DeFi Prime, DeFi Pulse, and DeFi Market Cap. These websites can provide valuable insight into a project’s cred. The key here is to rely more on independent sources, rather than on info touted by the project’s team. 

#3. Check Etherscan

EtherScan is a blockchain explorer that allows you to explore Ethereum blockchain and ‘scan’ for transactions, prices, tokens, and pretty much all activity happening on Ethereum. Remember that just because a smart contract/token is verified by Etherscan doesn’t mean it has no vulnerabilities or is not a scam. It means that the contract is available for public evaluation and is not in danger of being dishonestly altered. In other words, the code that you see (and have examined) is the code that you get when using the smart contract. 

Besides, Etherscan has recently implemented Every Transaction Hash Protect (ETHProtect), a service through which users can report any suspicious or fraudulent activity on Ethereum. Through ETHProtect, it’s easier for users to recognize tainted incoming funds, and the system can usually trace such funds to the origin. Usually, tainted funds would originate from phishing, hacks, scams, exploits and suspicions, and fraudulent activities. 

Such reports will be analyzed by the in-built Taint Inference Analysis Engine, and if confirmed to be indeed fraudulent, the address page will receive a flashing ‘Red Shield’ icon that allows users to avoid the sources of such funds. 

If you start coming across tainted addresses when investigating a smart contract, then you know there’s a problem. As such, avoid going to the project’s website or interacting with their products. 

#4. Look out For Fakes 

The majority of DeFi tokens use Ethereum-based tokens to carry out their operations. However, an unsuspecting newcomer might not be able to check the difference between a legit token and a fake one. Scammers will usually create a project with a genuine-sounding name such as DeFi token or DeFi coin. A name like that would likely raise eyebrows in an experienced investor, since ‘DeFi’ is a general word, and it’s unlikely for any project to brand themselves as such. But what would a newcomer know? 

A few simple steps may be all it takes to establish whether it’s a legit thing or not. Search the project on GitHub and see whether there are any meaningful discussions surrounding the project. Also, where do the project’s links lead to? If it’s a dead link, then that should have you scurrying in the opposite direction. Another way to tell a token’s standing is to check the kind of exchanges it’s listed on. If a token is listed on a few nondescript exchanges, that’s a red alert. Also, fake tokens will usually be listed on decentralized exchanges because there’s no regulation going on there. Stay on the lookout for these kinds of things. 

The Don’t’s

Now that we have examined what you should definitely do, let’s take a look at what you shouldn’t. 

#1. Don’t Invest Money that You Can’t Afford to Lose

This is the number one commandment of crypto and DeFi investing. The ‘why’ is obvious: crypto markets are highly volatile. You can gain or lose massively within an hour. The hype and allure surrounding DeFi protocols can trick you into thinking it’s all rains of cash, rainbows, and unicorns. 

This isn’t to scare you off from investing in DeFi. DeFi can be a great way to multiply your portfolio and secure your financial future. But you need to proceed with caution, that’s all. 

#2. Don’t Be Careless

Decentralized finance is all about being your own bank. This has several implications. One of these? The security and safety of your funds are solely on you. And since you are in total control of your assets, you need to protect them every way you can. 

This starts with choosing the wallet carefully where to store your funds. Choose a reputable wallet. Reputable wallets are those with good reviews on crypto and social forums. Also, check what reputable review sites (even YouTube videos) have said about the wallet. 

It also helps to know the types of wallets. There are two main types of wallets: software and hardware wallets. Software wallets are exclusively based online. Due to this, they are highly susceptible to online vulnerabilities such as hacking, phishing, social engineering, and malware. Hardware wallets are offline-based and constitute what’s known as cold storage. Without question, hardware wallets are safer since they can’t be hacked. Some great options include KeepKey, Ledger Nano, and Trezor. 

Also, where you buy your wallet matters. Always buy your wallet directly from the manufacturer’s web page. Wallets listed on online stores such as Amazon could very likely be fake. 

Final Thoughts

So, there. Welcome to the exciting world of DeFi. Following these guidelines could make the difference between you profiting from the field, as it should be, and you falling for a scam. Always do your due diligence before you put your money somewhere. Good luck! 

Crypto Guides

Understanding The Topical Problems In The DeFi Ecosystem


Decentralized finance or DeFi is a collective term given to a wide range of products and technologies that help manage the finances more innovatively without the interference of the central bank or any financial institution.

The decentralized applications that are generally are called DApps built on top blockchain like Ethereum and Bitcoin. The major highlight of DeFi is that they use smart contracts giving complete control over the finances. It helps in individual savings, payments, or investments, but it also facilitates better and efficient lending, margin trading, market predictions, etc.

With the help of DeFi tools, you can access the services that have any centralized authority. The significant idea behind launching DeFi is to make the entire process safer and more efficient than other traditional financial solutions. Though DeFi is efficient than other financial solutions, some roadblocks are preventing significant issues.

What Are The Major Problems Involved in Decentralized Finance?

Some of the major risks that revolve around DeFi are related to user errors, smart contracts, lack of insurance transparency, price mechanisms, etc. Irrespective of all the advantages DeFi holds, the initiative still remains an infant, making it vulnerable to risks.

Smart Contract Vulnerabilities

One of the significant issues that DeFi is going through is smart contract vulnerabilities. When a contract is released with a flawed code, it can result in fund losses. There have been instances where these particular issues with the smart contract have resulted in compromising blockchain.

User Error

The issue of smart contracts is also connected to an underlying problem of user error. Even if the code seems right, there can be some unexpected issues that can become a hindrance. Due to the user errors, millions of dollars have been lost in the name of DApps.

Internal Governance

Another crucial issue witnessed in DeFi is the internal governance and the external regulations of the assets. There are chances to control who can run and operate the platform. Along with that, the government can anytime issue regulations that can restrict the processes of DeFi.

Other Issues

Other common issues are related to the market unpredictability, lack of insurance, etc. that makes the individuals lose sums of money even if they haven’t made any mistake.

To realize the full potentials of DeFi, is essential to address the issue and find out how it can be managed. It is true that DeFi holds many advantages for the growth of the financial world. It depends on how well you utilize it by eliminating the issues.

The Future of DeFi

Addressing the current underlying issues of DeFi, there have been plenty of solutions that have emerged so far. For instance, Atomic Swaps and pTokens are likely to improve the DeFi and make it increasingly impressive for the finance industry.

The above mentioned were the major hindrances that are blocking the development of DeFi. Different types of solutions are being worked out to cater to the pain points of DeFi. With efficient use of bug bounties, audits, open-source commitments, etc., problems related to smart contracts and errors can become less frequent.


Synthetix: How Does this DeFi Platform Work?

Satoshi Nakamoto’s vision for Bitcoin was money that could not be controlled by governments and regulators. Little did he know, though, that the underlying technology of Bitcoin – blockchain, wielded so much potential for the realization of this goal in a way that Bitcoin itself (alone) could never accomplish. 

Thanks to the blockchain network, we are now experimenting with the idea of a decentralized finance industry – whose vision is to empower all economically – regardless of race, origin, or social status. 

Synthetix is a decentralized finance platform that makes it possible for anyone with an internet connection to access a wide variety of financial assets: from Fiat currency to gold, Bitcoin, commodities, and precious metals – without the need for costly brokers or intermediaries. 

But what is Synthetix, and how does this decentralized platform work? We answer these questions and everything else you need to know about Synthetix here. 

What is Synthetix? 

Synthetix is a decentralized finance platform built on the Ethereum blockchain. It hosts tokens, commonly referred to as Synths, that are tied to the value of liquid assets like stocks, real-world currencies, cryptocurrencies, commodities, indices, and precious metals. These assets are held in the form of ERC-20 tokens. 

Synthetix started as ‘Havven,’ a stablecoin project, before rebranding to the current name. The platform’s native currency is known as the ‘SNX’ token. SNX powers the creation of Synths, as explained by the platform’s creators: “The platform uses a token called SNX (the Synthetix Network Token), and holding this token allows you to create Synths. You do this by locking SNX into a smart contract and minting Synths against this value. To ensure Synths are fully booked, the system will only allow you to issue a fraction of the SNX value you lock.”

The question you’d ask is: “Why would I hold a synthetic asset instead of the real-life asset?” Well, the main reason an individual would hold a synthetic asset is to receive a benefit that the asset itself would not provide. This could range from getting access, e.g., to gold – without the real-world implications of custody, or wanting to gain liquidity for an asset that will be hard to sell quickly enough in the real world. Synthetix users do not only get this, but they get to do so on a decentralized, peer-to-peer, and transparent platform. 

How Does Synthetix Work?

The Synthetix platform utilizes two types of tokens: the main token known as Synthetix (SNX), and a second token known as Synth. Synthetix works in a pretty straightforward manner. 

Users purchase and lock SNX in their wallets. They can then create Synths, which will track the real-life price of the assets. The price of a Synth is arrived at via oracles provided by the Chainlink network. Users can also trade Synths via the Synthetix Exchange. This allows them to convert these tokens into a form whose price they can track in different ways. For instance, there is ‘sBTC,’ which allows individuals to track Bitcoin prices, as well as iBTC, whose price moves contrarily to that of Bitcoin. 

By virtue of holding Synth tokens, Synthetix users have access to endless possibilities in trading, hedging, remittance of funds, making payments, and building a portfolio.

Whose Idea is Synthetix? 

Synthetix is the brainchild of crypto payment company blueshyft CEO Kain Warwick. Warwick conceived the idea of Havven in 2016 when looking for a solution to solve the issue of arbitrage in crypto prices in smaller crypto markets like Australia and Korea.

How Does Synthetix Remain Collateralized?

The primary concern on the same platform is what will happen if Synths began moving inversely with the underlying SNX tokens. How would the system stay collateralized if, say, the price of SNX is falling, while that of Synths rising? 

Thankfully, the platform is designed to have infinite liquidity, which, when combined with various features baked into the system, maintains the collateralization of the platform. Below, we’ll take an in-depth look into each of these features.

#1. The Requirement of 750% Collateralization

For the Synthetix system to issue new Synths, it needs to have collateralization of at least 750%. The collateral cushions the Synths in circulation from unexpected price swings.

#2. Debt-driven

Synthetix is designed in a manner that when a user mints Synth, their SNX collateral is locked up – with the Synths acting as outstanding debt. If you want to unlock your Synths, you first need to offset your debt by burning Synths that are equivalent to the value of the Synths they had issued earlier.

The minimum of 750% in collateral ensures that users can easily buy back and sell their own debt if they so wish.

#3. Debt Pools

On the Synthetix platform, there is personal debt for users who have created Synths. But there is also a universal debt underlying all the Synths in circulation. 

A user’s personal debt is calculated as an ever-in-flux percentage of the total Synths issued, together with the exchange rates of the underlying asset and that of the issued Synths. 

This means Synth issuers do not need to pay back their debt with the exact type of Synth that they minted. An individual who issued a Synth can repay the debt with any other type of Synth, provided it’s equal in market value to the Synths they wish to burn.

This mechanism lends the system ‘infinite’ liquidity, which also enables endless shifts between Synths – without upsetting the system’s balance. 

The Synthetix Exchange

Synthetix blockcian logo | Forex Academy

The Synthetix decentralized exchange allows users to buy and sell Synths via smart contracts, removing the need for counterparties or third parties. Anyone can access via a web3 wallet, allowing them to easily and quickly buy or sell Synths and SNX tokens. 

All exchanges have a fee of 0.30%. The fees are given to SNX holders as a reward for providing collateral for the Synths in circulation. 

Synthetix’s Monetary Policy

The Synthetix system also has a monetary inflation policy for SNX embedded in the code, with the total supply of SNX in circulation increasing in a five-year span – from 2019 to 2024 –  from 100 million to 250 million. 

This monetary policy was not originally part of the system. It was added when it became apparent that the exchange fees from Synth transactions were too low to incentivize SNX token holders to hold up SNX as collateral.

The additional SNX will be distributed among SNX holders who have held their SNX as collateral. This will incentivize users to contribute to the system and support the network before it’s robust and independent enough for everything to run as intended. 

Another benefit of the inflation policy is that it will make the network more secure by automatically adjusting that collateralization ratio by the adding of extra collateral to SNX holders.

Synthetix’s Exchange Fees and Staking Rewards

Anyone can buy SNX, mint Synth, and take on its debt. This qualifies one to become a staker in the Synthetix ecosystem and start collecting staking rewards  – which are a percentage of the exchange fees – set at 0.3% for every transaction.  

All exchange fees are transferred to a collective pool, after which they are distributed to SNX token holders in proportion to their outstanding debt. In this way, users can increase their staking rewards by simply increasing their SNX issuance. 

However, users can only claim to stake rewards if their collateralization ratio is above 750%. This is meant to incentivize users to actively maintain a personal collateralization ratio of 750% or above, which helps to maintain liquidity of the network.

Tokenomics of Synthetix 

SNX is currently ranking at #49, with a market cap of $146, 971, 014, and a circulating supply of 181, 454, 898. It has a total supply of 182, 701, 142, with a 24-hour volume of $995, 620. The token has an all-time high of $1.57 (24th Nov 2019) and an all-time low of $0. 032420 (5th Jan 2019). 

Where to Buy and Store Synthetix

You can purchase or exchange cryptocurrency for SNX in any of several popular exchanges, including Coinbase, Bittrex,, Liquid, and Kucoin. 

As an Ethereum-based token, SNX and Synths can be stored in any Ethereum-compatible wallet. Popular options include MyEtherWallet, MetaMask wallet, Ethaddress Wallet, Ledger Nano, Guarda Wallet, Atomic Wallet, Trezor, Sugi, Keep Key, and Jaxx Liberty


The Synthetix platform offers a decentralized, peer-to-peer, accessible-for-all platform where users get exposure to all kinds of real-world assets without the burden of acquiring ownership and other barriers. The platform has the potential to create a powerful tokenized asset platform that can shake the whole financial market. The success of this platform will be a part of Satoshi’s grand vision, even if not in the way that they envisaged it. 

Crypto Daily Topic

The Two ‘Flash Loan’ Attacks That Shook DeFi

Two attacks took the DeFi world by storm recently in what is the first DeFi major security incident. bZx, a decentralized finance protocol on Ethereum’s blockchain, endured two separate attacks after unknown persons manipulated “flash loans” and managed to drain nearly hundreds of thousands of Ether.

The First Attack

The first attack took place on Valentine’s night when the bZx team was attending ETHDenver – an Ethereum conference that brings together minds across the blockchain and DeFi space annually. The attacker took out $350,000 worth of ETH from Fulcrum, bZx’s lending platform by playing together several other DeFi protocols; Compound, Uniswap, and dYdX.

The attack happened this way:

The person borrowed 10,000 ETH from dYdX and then posted half the amount to DeFi protocol Compound and the other half to bZx. They then borrowed 112 wrapped Bitcoin (WBTC, which are ERC-20 tokens backed on a 1:1 ratio by Bitcoin.) With the amount on bZx, they entered into a short position for 112 WBTC, after which they sold the 112 WBTC from Compound on Uniswap. This move made the bZx sale very profitable. The attacker then repaid their dYdX loan and kept the proceeds from the short sale – 1,300 ETH. All this happened in a single transaction.

bZx admits the attack was “one of the most sophisticated” they’ve ever seen, which is big. Whoever pulled the attack must’ve had a very in-depth knowledge of all the protocols involved, together with their various tools. It also demonstrates the high levels of interoperability possible among various DeFi protocols – which is ideal, except when that interoperability can be maliciously manipulated. The attack had no precedent in DeFi, prompting the DeFi space to ask hard questions about the security future of DeFi.

In response to the attack, bZx in a slightly controversial move shut down Fulcrum.  Users and analysts noted bZx shut down the platform using a non-decentralized master key. But the firm defended the move, arguing, “the core of the debate here is whether we should be ruled by machines or economics. When you have an immutable contract that can’t be upgraded, you are ruled by machines. When the power to exist is distributed among representative stakeholders, you are ruled by economics. Both are valid methods for implementing decentralization.”

The Second Attack

And just when trading had resumed over the weekend and operations back to normal, attackers targeted bZx again, this time netting $633,000. This one took place just after 03:00 UTC Tuesday. The person(s) took out a flash loan of 7,500 ETH using 3, 518 ETH to purchase the stablecoin sUSD stablecoin from the issuer, which they then deposited as collateral for a bZx loan.

They then used 900 ETH to bid up the value of sUSD through Uniswap/Kyber then borrowed another 6,796 of ETH from bZx, using it to repay the 7,500 ETH loan and then pocketed the remaining value: 2, 378 ETH.

What’s shocking but also impressive is that the entire attack took place in just over a minute.

What are Flash Loans?

Flash loans are loans that users take and pay back in the same transaction so as to amplify their payouts. With a flash loan, a borrower loses nothing. The network can usually see whether or not a flash loan will be instantly repaid, and if not, it can reject all transactions associated with it. If it goes through, however, the lender gets a small fee, and the trader gains a profit, and everybody is happy.

But things aren’t always as simple as demonstrated by the bZx scenario. A flash loan carries great risk, especially with exploitable bugs in a platform’s code, or unreliable price feeds. In this case, the attacker(s) did not intend to simply buy low or sell high, but to deliberately manipulate vulnerable price markets.


Shortly after the first attack, investors started jumping from the bZx ship, but things seemed to get back to normal after the firm released a statement acknowledging the issue and addressing the way forward. 

As for the future of DeFi security, DeFi experts agree that this is a new territory; hence mistakes are bound to occur. Speaking to CoinDesk, Staked CEO asserted: “These are big risks. It’s a new category, it’s moving fast, and some things are going to break.”

The bZx team is now focused on securing the network and deterring future attacks. The firm already implemented a check that will disallow even overcollateralized loans in the future and has already put a cap on maximum trade sizes so as to limit the scope of potential attacks. It will also be implementing a Chainlink oracle to supplement Kyber’s price feed to be able to get time-weighted price info at any given time.

Crypto Daily Topic

ETH’s Bullish Behavior and the Case of Flash Loans

ETH has pulled a surprise on everyone Tuesday by posting bullish prices as high as $287 up from Monday’s low of $245.

This surge couldn’t have come at a weirder time; when Ethereum was on the spot for two attacks or ‘exploits’ on the Ethereum-based DeFI protocol bZx that saw it lose almost $1m worth of ETH.


The CEO of the crypto site The Block, Mike Dudas, tweeted Tuesday in acknowledgment of ETH’s Tuesday rally.

Respected economist Alex Kruger’s response to Dud’s tweet may explain this bullish behavior, though. While saying ETH did not actually ‘shrug off’ the exploit, he stated the attacks were naturally bullish for Ether since it’s “great advertising” and it “should generate interest in Ethereum from the finance industry and thus increase demand for ETH, even if the many DeFi platforms die in the near term because of this.” In essence, the attack raised Ethereum’s profile, its DeFi use case will be damned (at least in the short term.)

Flash Loans

The DeFi attack that helped reverse fortunes for ETH Tuesday was a result of the manipulation of flash loans. To understand flash loans, let’s look again at what Kruger had to say about them. In the same thread, he said, “flash loans provide access to instantaneous liquidity and collateral, and work on top of deterministic transactions that fully eliminate risk for both borrower and lender. This is extremely valuable, and the very best expression of programmable money…”

Flash loans are a new entry in the crypto world, a new decentralized finance innovation atop Ethereum’s blockchain. A flash loan allows a trader to take an uncollateralized loan to maximize the profits from a trade. They are ‘flash’ because they’re super-fast – in that the borrower repays the loan in the same transaction.

What happened with bZx is that the attackers exploited weak points in the protocol, making away with $300, 000 and around $650,000 worth of Ether.

Ensuing Fear, Uncertainty, and Doubt

After the Ethereum debacle, some individuals took the chance to pontificate about DeFi being an inherently flawed technology. But just like with the DAO attack in 2015, such incidents invariably point to weaknesses in a system, which in turn helps make it better and more resilient. Like with any technology, DeFi is undergoing ‘growing pains,’ and it helps to provide solutions to such imperfections rather than knocking everything down.  

What’s next for bZx

As for bZx, the firm will mitigate the damage of the attack in several ways, like liquidating collateral to cover a loan that the attack left uncovered, as well spread the loss across its user accounts. (Users will barely feel the impact of the loss, despite the magnitude of the attack.) The firm has also indicated plans of setting up an insurance fund as a long-term solution in case of a similar future incident. 

Perhaps DeFi proponents can look at the bright side: the attacks are a testament to DeFi taking up space in finance. The nascent technology is developing enough clout to warrant exploiting attacks.