Someone posted on here a few days ago asking about forex and forex trading in Kenya, I have gone through the responses and clearly, most people don’t have an idea. It is 3am in the morning and am in a good mood so let me make this post. This will be a comprehensive and lengthy post so grab a pen and paper and sit down. We’ll be here a while. FIRST OF ALL, who am I..? I am a forex trader, in Nairobi, Kenya..i have been actively involved in forex since I found out about it in Feb 2016 when I somehow ended up in a wealth creation seminar (lol) in pride inn Westlands, the one close to Mpaka Rd. Luckily for me, it was not one of those AIM global meetings or I’d be on Facebook selling God knows what those guys sell. I did not take it seriously till August of the same year and I have been active ever since. I don’t teach, mentor or sell a course or signals, I trade my own money. I am also posting from a throwaway account because I don’t want KRA on my ass. What the fuck is forex and forex trading. In simple plain English, forex is like the stock market but for currencies. Stock Market = Shares, forex = currencies. If you want more in-depth explanation, google is your friend. These currencies are pegged on specific countries, united states- dollar, UK- pound, euro zone- euro, Switzerland- Swiss franc, Kenya- Kenya shilling.. you get the point. Now, there are specific events and happenings between these economies that affect the movement and values of the currencies, driving their value (purchasing power up and down). Forex trading exploits these movements to make money. When the value is going up, we buy and vice versa (down –sell) Is forex trading illegal in Kenya? Is it a scam? Illegal, no. scam, no. All the banks in the world do it (KCB made about 4 billion from trading forex in 2019) Have there been scams involving forex in Kenya? Yes. Here is one that happened recently. This one is the most infamous one yet. Best believe that this is not the end of these type of scams because the stupidity, greed and gullibility of human beings is unfathomable. However, by the end of this post, I hope you won’t fall for such silliness. What next how do I make it work..? Am glad you asked. Generally, there are two ways to go about it. One, you teach yourself. This is the equivalent of stealing our dad’s car and hoping that the pedal you hit is the brake and not the accelerator. It is the route I took, it is the most rewarding and a huge ego boost when you finally make it on your own. Typically, this involves scouring the internet for hours upon hours going down rabbit holes, thinking you have made it telling all your friends how you will be a millionaire then losing all your money. Some people do not have the stomach for that. The second route is more practical, structured and smarter. First Learn the basics. There is a free online forex course at www.babypips.com/learn/forex this is merely an introductory course. Basically it is learning the parts of a car before they let you inside the car. Second, start building your strategy. By the time you are done with the babypips, you will have a feel of what the forex market is, what interests you, etc. Tip..Babypips has a lot of garbage. It is good for introductory purposes but not good for much else, pick whatever stick to you or jumps at you the first time. Nonsense like indicators should be ignored. The next step is now the most important. Developing the skill and building your strategy. As a beginner, you want to exhaust your naivety before jumping into the more advanced stuff. Eg can you identify a trend, what is a pair, what is position sizing, what is metatrader 4 and how to operate it, what news is good for a currency, when can I trade, what are the different trading sessions, what is technical analysis, what is market sentiment, what are bullish conditions what is emotion management, how does my psychology affect my trading (more on this later) an I a swing, scalper or day trader etc Mentors and forex courses.. you have probably seen people advertising how they can teach and mentor you on how to trade forex and charging so much money for it. Somehow it seems that these people are focused on the teaching than the trading. Weird, right..? Truth is trading is hard, teaching not quite. A common saying in the industry is “Those who can’t trade, teach” you want to avoid all these gurus on Facebook and Instagram, some are legit but most are not. Sifting the wheat from the chaff is hard but I did that for you. The info is available online on YouTube, telegram channels etc. am not saying not to spend money on a course, if you find a mentor whose style resonates with you and the course is reasonably priced, please, go ahead and buy..it will cut your learning curve in half. People are different. What worked for me might not work for you. Here are some nice YouTube channels to watch. These guys are legit..
After a short period of time, you will be able to sniff out bs teachers with relative ease. You will also discover some of your own and expand the list. Two tips, start with the oldest videos first and whichever of these resonates with you, stick with till the wheels fall off. How long will it take until things start making sense Give yourself time to grow and learn. This is all new to you and you are allowed to make mistakes, to fail and discover yourself. Realistically, depending on the effort you put in, you will not start seeing results until after 6 months. Could take longeshorter so there is no guarantee. Social media, Mentality, Psychology and Books Online, forex trading might not have the best reputation online because it takes hard work and scammers and gurus give it a bad name. However, try to not get sucked into the Instagram trader lifestyle as it is nowhere close to what the reality is. You will not make millions tomorrow or the day after, you might never even make it in this market. But that is the reality of life. Nothing is promised, nothing is guaranteed. Your mentality, beliefs and ego will be challenged in this market. You will learn things that will make you blood boil, you will ask yourself daily, how is this possible, why don’t they teach this in school..bla bla bla..it will be hard but growth is painful, if it wasn’t we’d all be billionaires. Take a break, take a walk, drink a glass of whatever you like or roll one..detox. Chill with your girl (or man) Gradually you will develop mental toughness that will set you up for life. Personally, I sorta ditched religion and picked up stoicism. Whatever works for you. Psychology, this is unfortunately one of the most neglected aspects of your personal development in this journey. Do you believe in yourself? Can you stand by your convictions when everyone is against you? Can you get up every day uncertain of the future? There will be moments where you will question yourself, am I even doing the right thing? the right way? It is normal and essential for your growth. People who played competitive sports have a natural advantage here. Remember the game is first won in your head then on the pitch. Books: ironically, books that helped me the most were the mindset books, Think and grow rich, trading for a living, 4 hour work week, the monk who sold his Ferrari..just google mindset and psychology books, most trading books are garbage. Watch and listen to people who have made it in the investing business. Ray Dalio, warren, Bill Ackman and Carl Icahn. This is turning out to be lengthier than I anticipated so I’ll try to be brief for the remaining parts. Brokers You will need to open up an account with a broker. Get a broker who is regulated. Australian ones (IC Market and Pepperstone) are both legit, reliable and regulated. Do your research. I’d avoid local ones because I’ve heard stories of wide spreads and liquidity problems. International brokers have never failed me. There are plenty brokers, there is no one size fits all recommendation. If it ain’t broke..don’t fix it. Money transfer. All brokers accept wire transfers, you might need to call your bank to authorize that, avoid Equity bank. Stanchart and Stanbic are alright. Large withdrawals $10k+ you will have to call them prior. Get Skrill and Neteller if you don’t like banks like me, set up a Bitcoin wallet for faster withdrawals, (Payoneer and Paypal are accepted by some brokers, just check with them.) How much money can I make..? I hate this question because people have perceived ceilings of income in their minds, eg 1 million ksh is too much to make per month or 10,000ksh is too little. Instead, work backwards. What % return did I make this month/ on this trade. Safaricom made 19.5% last year, if you make 20% you have outperformed them. If you reach of consistency where you can make x% per month on whatever money you have, then there are no limits to how much you can make. How much money do I need to start with..? Zero. You have all the resources above, go forth. There are brokers who provide free bonuses and withdraw-able profits. However, to make a fulltime income you will need some serious cash. Generally, 50,000 kes. You can start lower or higher but if you need say 20k to live comfortably and that is a 10% return per month, then you can do the math on how big your account should be. Of course things like compound interest come into play but that is dependent on your skill level. I have seen people do spectacular things with very little funds. Taxes..? Talk to a lawyer or an accountant. I am neither. Family? Friends? Unfortunately, people will not understand why you spend hundreds of hours watching strangers on the internet so it is best to keep it from them. Eventually you will make it work and they will come to your corner talking about how they always knew you’d make it. The journey will be lonely, make some trading buddies along the way. You’d be surprised at how easy it is when people are united by their circumstances (and stupidity) I have guys who are my bros from South Africa and Lebanon who I have never met but we came up together and are now homies. Join forums, ask questions and grow. That is the only way to learn. Ideally, a group of 5-10 friends committed to learning and growth is the best model. Pushing each other to grow and discovering together. Forex is real and you can do amazing things with it. It is not a get rich quick scheme. If you want a quick guaranteed income, get a job. And now it is 5am, fuck. This is oversimplified and leaves out many many aspects. Happy to answer any questions.
DDDD - The Rise of “Buy the Dip” Retail Investors and Why Another Crash Is Imminent
In this week's edition of DDDD (Data-driven DD), I'll be going over the real reason why we have been seeing a rally for the past few weeks, defying all logic and fundamentals - retail investors. We'll look into several data sets to see how retail interest in stock markets have reached record levels in the past few weeks, how this affected stock prices, and why we've most likely seen the top at this point, unless we see one of the "positive catalysts" that I mentioned in my previous post, which is unlikely (except for more news about Remdesivir). Disclaimer - This is not financial advice, and a lot of the content below is my personal opinion. In fact, the numbers, facts, or explanations presented below could be wrong and be made up. Don't buy random options because some person on the internet says so; look at what happened to all the SPY 220p 4/17 bag holders. Do your own research and come to your own conclusions on what you should do with your own money, and how levered you want to be based on your personal risk tolerance. Inspiration Most people who know me personally know that I spend an unhealthy amount of my free time in finance and trading as a hobby, even competing in paper options trading competitions when I was in high school. A few weeks ago, I had a friend ask if he could call me because he just installed Robinhood and wanted to buy SPY puts after seeing everyone on wallstreetbets post gains posts from all the tendies they’ve made from their SPY puts. The problem was, he actually didn’t understand how options worked at all, and needed a thorough explanation about how options are priced, what strike prices and expiration dates mean, and what the right strategy to buying options are. That’s how I knew we were at the euphoria stage of buying SPY puts - it’s when dumb money starts to pour in, and people start buying securities because they see everyone else making money and they want in, even if they have no idea what they’re buying, and price becomes dislocated from fundementals. Sure enough, less than a week later, we started the bull rally that we are currently in. Bubbles are formed when people buy something not because of logic or even gut feeling, but when people who previously weren’t involved see their dumb neighbors make tons of money from it, and they don’t want to miss out. A few days ago, I started getting questions from other friends about what stocks they should buy and if I thought something was a good investment. That inspired me to dig a bit deeper to see how many other people are thinking the same thing. Data Ever since March, we’ve seen an unprecedented amount of money pour into the stock market from retail investors. Google Search Trends \"what stock should I buy\" Google Trends 2004 - 2020 \"what stock should I buy\" Google Trends 12 months \"stocks\" Google Trends 2004 - 2020 \"stocks\" Google Trends 12 months Brokerage data Robinhood SPY holders \"Robinhood\" Google Trends 12 months wallstreetbets' favorite broker Google Trends 12 months Excerpt from E*Trade earnings statement Excerpt from Schwab earnings statement TD Ameritrade Excerpt Media cnbc.com Alexa rank CNBC viewership & rankings wallstreetbets comments / day investing comments / day Analysis What we can see from Reddit numbers, Google Trends, and CNBC stats is that in between the first week of March and first week of April, we see a massive inflow of retail interest in the stock market. Not only that, but this inflow of interest is coming from all age cohorts, from internet-using Zoomers to TV-watching Boomers. Robinhood SPY holdings and earnings reports from E*Trade, TD Ameritrade, and Schwab have also all confirmed record numbers of new clients, number of trades, and assets. There’s something interesting going on if you look closer at the numbers. The numbers growth in brokers for designed for “less sophisticated” investors (i.e. Robinhood and E*Trade) are much larger than for real brokers (i.e. Schwab and Ameritrade). This implies that the record number of new users and trade volume is coming from dumb money. The numbers shown here only really apply to the US and Canada, but there’s also data to suggest that there’s also record numbers of foreign investors pouring money into the US stock market as well. However, after the third week of March, we see the interest start to slowly decline and plateau, indicating that we probably have seen most of those new investors who wanted to have a long position in the market do so. SPX daily Rationale Pretty much everything past this point is purely speculation, and isn’t really backed up by any solid data so take whatever I say here with a cup of salt. We could see from the graph that new investor interest started with the first bull trap we saw in the initial decline from early March, and peaking right after the end of the crash in March. So it would be fair to guess that we’re seeing a record amount of interest in the stock market from a “buy the dip” mentality, especially from Robinhood-using Millennials. Here’s a few points on my rationalization of this behavior, based on very weak anecdotal evidence
They missed out of their chance of getting in the stock market at the start of the bull market that happened at the end of 2009
They’ve all seen the stock market make record gains throughout their adult lives, but believing that the market might be overheated, they were waiting for a crash
Most of them have gotten towards the stage of their lives where they actually have some savings and can finally put some money aside for investments
This stock market crash seems like their once-in-a-decade opportunity that they’ve been waiting for, so everyone jumped in
Everyone’s stuck at their homes with vast amounts of unexpected free time on their hands
Most of these new investors got their first taste in the market near the bottom, and probably made some nice returns. Of course, since they didn’t know what they were doing, they probably put a very small amount of money at first, but after seeing a 10% return over one week, validating that maybe they do know something, they decide to slowly pour in more and more of their life savings. That’s what’s been fueling this bull market. Sentiment & Magic Crayons As I mentioned previously, this bull rally will keep going until enough bears convert to bulls. Markets go up when the amount of new bullish positions outnumber the amount of new bearish positions, and vice versa. Record amounts of new investors, who previously never held a position in the market before, fueled the bullish side of this equation, despite all the negative data that has come out and dislocating the price from fundamentals. All the smart money that was shorting the markets saw this happening, and flipped to become bulls because you don’t fight the trend, even if the trend doesn’t reflect reality. From the data shown above, we can see new investor interest growth has started declining since mid March and started stagnating in early April. The declining volume in SPY since mid-March confirms this. That means, once the sentiment of the new retail investors starts to turn bearish, and everyone figures out how much the stocks they’re holding are really worth, another sell-off will begin. I’ve seen something very similar to this a few years ago with Bitcoin. Near the end of 2017, Bitcoin started to become mainstream and saw a flood of retail investors suddenly signing up for Coinbase (i.e. Robinhood) accounts and buying Bitcoin without actually understanding what it is and how it works. Suddenly everyone, from co-workers to grandparents, starts talking about Bitcoin and might have thrown a few thousand dollars into it. This appears to be a very similar parallel to what’s going on right now. Of course there’s differences here in that equities have an intrinsic value, although many of them have gone way above what they should be intrinsically worth, and the vast majority of retail investors don’t understand how to value companies. Then, during December, when people started thinking that the market was getting a bit overheated, some started taking their profits, and that’s when the prices crashed violently. This flip in sentiment now look like it has started with equities. SPY daily Technical Analysis, or magic crayons, is a discipline in finance that uses statistical analysis to predict market trends based on market sentiment. Of course, a lot of this is hand-wavy and is very subjective; two people doing TA on the same price history can end up getting opposite results, so TA should always be taken with a grain of salt and ideally be backed with underlying justification and not be blindly followed. In fact, I’ve since corrected the ascending wedge I had on SPY since my last post since this new wedge is a better fit for the new trading data. There’s a few things going on in this chart. The entire bull rally we’ve had since the lows can be modelled using a rising wedge. This is a pattern where there is a convergence of a rising support and resistance trendline, along with falling volume. This indicates a slow decline in net bullish sentiment with investors, with smaller and smaller upside after each bounce off the support until it hits a resistance. The smaller the bounces, the less bullish investors are. When the bearish sentiment takes over across investors, the price breaks below this wedge - a breakdown, and indicates a start of another downtrend. This happened when the wedge hit resistance at around 293, which is around the same price as the 200 day moving average, the 62% retracement (considered to be the upper bound of a bull trap), and a price level that acted as a support and resistance throughout 2019. The fact that it gapped down to break this wedge is also a strong signal, indicating a sudden swing in investor sentiment overnight. The volume of the break down also broke the downwards trend of volume we’ve had since the beginning of the bull rally, indicating a sudden surge of people selling their shares. This doesn’t necessarily mean that we will go straight from here, and I personally think that we will see the completion of a heads-and-shoulders pattern complete before SPY goes below 274, which in itself is a strong support level. In other words, SPY might go from 282 -> 274 -> 284 -> 274 before breaking the 274 support level. VIX Daily Doing TA is already sketchy, and doing TA on something like VIX is even more sketchy, but I found this interesting so I’ll mention it. Since the start of the bull rally, we’ve had VIX inside a descending channel. With the breakdown we had in SPY yesterday, VIX has also gapped up to have a breakout from this channel, indicating that we may see future volatility in the next week or so. Putting Everything Together Finally, we get to my thesis. This entire bull rally has been fueled by new retail investors buying the dip, bringing the stock price to euphoric levels. Over the past few weeks, we’ve been seeing the people waiting at the sidelines for years to get into the stock market slowly FOMO into the rally in smaller and smaller volumes, while the smart money have been locking in their profits at an even slower rate - hence an ascending wedge. As the amount of new retail interest in the stock market started slowed down, the amount of new bulls started to decline. It looks like Friday might have been the start of the bearish sentiment taking over, meaning it’s likely that 293 was the top, unless any significant bullish events happen in the next two weeks like a fourth round of stimulus, in which case we might see 300. This doesn’t mean we’ll instantly go back to circuit breakers on Monday, and we might see 282 -> 274 -> 284 -> 274 happen before panic, this time by the first-time investors, eventually bringing us down towards SPY 180. tldr; we've reached the top EDIT - I'll keep a my live thoughts here as we move throughout this week in case anyone's still reading this and interested. 5/4 8PM - /ES was red last night but steadily climbed, which was expected since 1h RSI was borderline oversold, leaving us to a slightly green day. /ES looks like it has momentum going up, but is approaching towards overbought territory now. Expecting it to go towards 284 (possibly where we'll open tomorrow) and bouncing back down from that price level 5/5 Market Open - Well there goes my price target. I guess at this point it might go up to 293 again, but will need a lot of momentum to push back there to 300. Seems like this is being driven by oil prices skyrocketing. 5/5 3:50PM - Volume for the upwards price action had very little volume behind it. Seeing a selloff EOD today, could go either way although I have a bearish bias. Going to hold cash until it goes towards one end of the 274-293 channel (see last week's thesis). Still believe that we will see it drop below 274 next week, but we might be moving sideways in the channel this week and a bit of next week before that happens. Plan for tomorrow is buy short dated puts if open < 285. Otherwise, wait till it goes to 293 before buying those puts 5/5 6PM - What we saw today could be a false breakout above 284. Need tomorrow to open below 285 for that to be confirmed. If so, my original thesis of it going back down to 274 before bouncing back up will still be in play. 5/6 EOD - Wasn't a false breakout. Looks like it's still forming the head-and-shoulders pattern mentioned before, but 288 instead of 284 as the level. Still not sure yet so I'm personally going to be holding cash and waiting this out for the next few days. Will enter into short positions if we either go near 293 again or drop below 270. Might look into VIX calls if VIX goes down near 30. 5/7 Market Open - Still waiting. If we break 289 we're probably heading to 293. I'll make my entry to short positions when we hit that a second time. There's very little bullish momentum left (see MACD 1D), so if we hit 293 and then drop back down, we'll have a MACD crossover event which many traders and algos use as a sell signal. Oil is doing some weird shit. 5/7 Noon - Looks like we're headed to 293. Picked up VIX 32.5c 5/27 since VIX is near 30. 5/7 11PM - /ES is hovering right above 2910, with 4h and 1h charts are bullish from MACD and 1h is almost overbought in RSI. Unless something dramatic happens we'll probably hit near 293 tomorrow, which is where I'll get some SPY puts. We might drop down before ever touching it, or go all the way to 295 (like last time) during the day, but expecting it to close at or below 293. After that I'm expecting a gap down Monday as we start the final leg down next week towards 274. Expecting 1D MACD to crossover in the final leg down, which will be a signal for bears to take over and institutions / day traders will start selling again 5/8 Market Open - Plan is to wait till a good entry today, either when technicals looks good or we hit 293, and then buy some SPY June 285p and July 275p 5/8 Noon - Everything still going according to plan. Most likely going to slowly inch towards 293 by EOD. Will probably pick up SPY puts and more VIX calls at power hour (3 - 4PM). Monday will probably gap down, although there's a small chance of one more green / sideways day before that happens if we have bullish catalysts on the weekend. 5/8 3:55PM - SPY at 292.60. This is probably going to be the closest we get to 293. Bought SPY 290-260 6/19 debit spreads and 292-272 5/15 debit spreads, as well as doubling down on VIX calls from yesterday, decreasing my cost basis. Still looks like there's room for one more green day on Monday, so I left some money on the side to double down if that's the case, although it's more likely than not we won't get there. 5/8 EOD - Looks like we barely touched 293 exactly AH before rebounding down. Too bad you can't buy options AH, but more convinced we'll see a gap down on Monday. Going to work on another post over the weekend and do my updates there. Have a great weekend everyone!
How to Recover Money Lost to Online Investment and Scam
Have you lost money to binary options? You can recover money you lost to binary options. Have you lost money to forex? You can recover money lost to forex. Have you lost money to bitcoin or did you lose you bitcoin or bitcoin wallet recovery phrase? You can recover lost bitcoin, money lost to bitcoin, and bitcoin recovery phrase. Have you lost money to cryptocurrency? You can recover lost cryptocurrency and money lost to cryptocurrency. Recover money lost to online investment, online scam and more. Recover all your lost funds / money by hiring a verified recovery expert. This article examine some common ways people have been losing money, especially online and with the use of technology, and how to recover all the money lost through all these different means. Let’s dive into each of them; How to Recover Money Lost to Binary Options Binary options trading hinges on a simple question; will the underlying asset be above or below a certain price at a specified time? 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Even cryptocurrencies such as Bitcoin, Ethereum, and Litecoin are on the menu. The nature of binary options makes it easy for people to lose money trading binary options! But the good news is that you can recover money lost to binary options. How to Recover Money Lost to Forex Forex is a short form of foreign currency and exchange. Foreign exchange is the process of changing one currency into another currency for a variety of reasons. It is mostly for commercial, trade, or tourism. According to a recent triennial report from the BIS (a global bank for national central banks), the average was more than $5.1 trillion in daily forex trading volume. The foreign exchange market is where currencies are traded. Currencies are important to most people around the world, whether they realize it or not, because currencies need to be exchanged in order to conduct foreign trade and business. If you are living in the U.S. and want to buy cheese from France, either you or the company that you buy the cheese from has to pay the French for the cheese in euros (EUR). This means that the U.S. importer would have to exchange the equivalent value of U.S. dollars (USD) into euros. The same goes for traveling. A French tourist in Egypt can't pay in euros to see the pyramids because it's not the locally accepted currency. As such, the tourist has to exchange the euros for the local currency, in this case the Egyptian pound, at the current exchange rate. The fact that forex is volatile in nature makes it easy to lose money trading forex. But you can hire a verified recovery expert to get your lost funds back. How to Recover Money Lost to Bitcoin Bitcoin (₿) is a cryptocurrency was invented in 2008 by an unknown person or group of people using the name Satoshi Nakamoto and started in 2009 when its implementation was released as open-source software. 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Many cryptocurrencies are decentralized networks based on blockchain technology, which is a distributed ledger enforced by a disparate network of computers. A defining feature of cryptocurrencies is that they are generally not issued by any central authority, rendering them theoretically immune to government interference or manipulation. Cryptocurrencies are systems that allow for the secure payments online which are denominated in terms of virtual "tokens," which are represented by ledger entries internal to the system. "Crypto" refers to the various encryption algorithms and cryptographic techniques that safeguard these entries, such as elliptical curve encryption, public-private key pairs, and hashing functions. Central to the appeal and functionality of Bitcoin and other cryptocurrencies is blockchain technology, which is used to keep an online ledger of all the transactions that have ever been conducted, thus providing a data structure for this ledger that is quite secure and is shared and agreed upon by the entire network of individual node, or computer maintaining a copy of the ledger. Every new block generated must be verified by each node before being confirmed, making it almost impossible to forge transaction histories. How to Recover Money Lost to Online Investment Incase you have also lost money to other forms of online investment, or casino (gambling), you have nothing to worry about. You can easily get back all your lost funds by hiring one of the verified recovery experts to help you get your money back. 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AMM + Limit Order, Will OneSwap Replace Traditional Exchange?
When a thing is denied, something new starts at a higher level. The update and iteration of the currency circle takes only a few days. On August 13, Yam, the token of a popular DeFi project, plummeted by 98%, while YFI, another DeFi cryptocurrency, outran the digital currency Bitcoin Gold by value under capital operation. According to their familiarity with DeFi, blockchain investors in 2020 can be divided into two categories. The "New" investors are active in DEXs such as UniSwap and Balancer, striving for hundredfold returns on investment amid fake projects, while the "old" investors stick to mainstream cryptocurrencies and advocate value investment in the three major CEXs. Despite its long history, DEX did not prosper until recently. It has processed transactions of over US$520 million in the past 24 hours, and the trading volume for the past week has exceeded the figure across 2019. But still, many people are stranger to DEX. I.Will DEX shuffle the existing trading market? Upon discovering something new, you can describe it, but never evaluate it superficially. UniSwap occupies 55% of the entire DEX market. Celebrities in the circle enjoy discussing the changes brought by UniSwap on social media and how it will change the existing trading landscape. On August 5, Jay, CEO of OKEX Exchange, publicly stated that "UniSwap can hardly replace the current mainstream exchanges." on Weibo. He also listed two reasons:
With insufficient transaction depth, UniSwap cannot support large transactions;
UniSwap cannot set prices independently, but has to follow the prices set by other exchanges.
Warren Buffett Buying Gold May Push Bitcoin to $50K, Investors Say Berkshire Hathaway, the $503 billion conglomerate led by #WarrenBuffett, sold Goldman Sachs for a Canadian gold company Barrick Gold. Max Keiser, the founder of Heisenberg Capital and an early #Bitcoin investor, says it could help buoy #BTC to $50,000. The quarterly shareholder filing of Berkshire Hathaway shows Buffett trimmed his position on most major banks, Fortune reported on Aug. 15. The firm sold a substantially large portion of its shares in JPMorgan Chase, Wells Fargo and PNG. What Buffett’s decision to enter a gold position over banks shows about Bitcoin Buffett’s decision to completely close Berkshire’s position on Goldman Sachs follows the bank’s second-ever highest quarterly trading revenue of $13.3 billion. It suggests Buffett is not comfortable in betting big on the banking industry in the long-term. Instead, Buffett purchased a single stock in Barrick Gold, whose stock has reflected that of gold in most of 2020. The firm is a gold mining company based in Canada, which recorded a 45% increase year-to-date. Following Berkshire’s investment, the stock rose by 8.11% in after-hours trading. Max Keiser, an avid Bitcoin investor who has invested in companies like Kraken and Bitfinex, believes Buffett’s gold investment could benefit Bitcoin. He said the positive sentiment around gold implies a higher valuation for Bitcoin, which some consider as “digital gold.” Keiser said: “Global $100 trillion fund management biz is less than 1% invested in Gold. With Buffett now moving into Gold. Expect global allocation of 5% AU min. Implies $5,000 Gold. Expect a 1% BTC global allocation ($1 trillion). This implies $50,000 for Bitcoin Expect PTJ ups to 10%.” A former L/S equities portfolio manager and Ikigai Fund founder Travis Kling echoed a similar sentiment. Referring to Buffett’s skeptical statement in 1998 around gold saying it doesn’t have utility, Kling said: “Today it was announced Berkshire Hathaway just bought its first gold stock ever. The reasons are self-apparent at this point. Just in case you’re wondering what the coming years are going to look like for Bitcoin, this was Buffett on gold in 1998.” BTC has shown some correlation with the precious metal as of late Although Bitcoin has outperformed gold since April, the price trend between gold and BTC has shown some correlation. Data from Skew show the two assets have increased in tandem throughout the past four months. The simultaneous rally of Bitcoin and gold since the global market crash in late March hints that more investors are starting to consider BTC as a store of value. Most recently, MicroStrategy, a $1.4 billion intelligence conglomerate, purchased $250 million worth of Bitcoin. The firm said BTC would act as the company’s primary treasury asset, acknowledging Bitcoin as a store of value and a potential safe-haven asset.
Question: I have a legitimate question for both the Bitcoin Bro's and the Old Gold Stan's... and here it is... If your shit actually is worth what you say it is... Why do you still have to convert/sell or exchange it into "fiat" currency before buying things. Imagine walking into a store to but a bike with bitcoin, but during your time in the store, BTC drops a bunch, then rises again after you pay for the bike. Congrats, your $200 bike just cost you $275. Also, (assuming were living in some sort of free market/capitalist society where Bikes are sold, Crypto is accepted across a vast swath of the economy, and the store is equipped to accept the transaction...) Are you going to pay taxes on that purchase? Yes? Is it on the $200 or the $275? Congrats! You just lost another $19 worth of your fancy techno imaginary play money. Now Fuck off. And to all the 77 year old, gold cult members out there who have been saying gold was gonna rise for the past 30 years. Congrats, you were finally right for once. It was also bound to happen, and its part of a cycle, its a trend, and it will reverse. Then you can go back to hunting bigfoot and living in your schoolbus bunker buried halfway into a hillside. Imagine having to pay for a cheeseburger in flakes of gold, or having to wait for some dude to melt your gold bar over a furnace to use half of it to buy a car. BTW, with Gold and Bitcoin as a currency - that also eliminates the possibility of credit and credit cards. Say goodbye to cell phones, information, internet, television and technology in general. You would literally be sending us backwards hundreds of years and we would have to send text messages via carrier pigeons. Not all credit is bad, nor is it all good. Thats why we have credit scores. And not all credit turns into irreparable debt, You fucks. This is why the fucking dollar exists. Its not perfect, but its about as close as it gets to perfect currency. Yes it has less value sometimes... but it has held the fuck up so far and created the most advanced, durable, and beneficial economy in the history of the human race. The existence of our dollar has helped hundreds of countries establish democracy and freedom in their governments and lifted billions of people out of poverty (for most of the world) Its not the value of the dollar that makes it standard, its the idea. America is the global superpower, and with that comes the global currency. Every country relies on it. Pretty much - Our dollar is good anywhere, anytime, in any country whether its 80% of what it was in 1980, or 120% I dont give a fuck how much inflation you think is gonna happen, I dont give a fuck about how much our National debt is, The dollar is here to stay. Gold's value relies on the dollar, not the other way around. And Crypto is literally fucking non-existent...and without technology, electricity and the internet (paid for with dollars) you all would be trading crypto by using a pencil and paper, and the complicated blockchain bullshit would be reduced down to elementary mathematics. To all the Gold and Bitcoin fucks, keep on dreaming, and stay in your lane.
Lines of Navigation | Monthly Portfolio Update - July 202
Our little systems have their day; They have their day and cease to be - Tennyson, In Memoriam A.H.H. This is my forty-fourth portfolio update. I complete this update monthly to check my progress against my goal. Portfolio goal My objective is to reach a portfolio of $2 180 000 by 1 July 2021. This would produce a real annual income of about $87 000 (in 2020 dollars). This portfolio objective is based on an expected average real return of 3.99 per cent, or a nominal return of 6.49 per cent. Portfolio summary
Vanguard Lifestrategy High Growth Fund - $716 680
Vanguard Lifestrategy Growth Fund - $41 103
Vanguard Lifestrategy Balanced Fund - $77 788
Vanguard Diversified Bonds Fund - $111 667
Vanguard Australian Shares ETF (VAS) - $202 336
Vanguard International Shares ETF (VGS) - $54 872
Betashares Australia 200 ETF (A200) - $230 058
Telstra shares (TLS) -$1 785
Insurance Australia Group shares (IAG) - $6 449
NIB Holdings shares (NHF) - $5 316
Gold ETF (GOLD.ASX) - $124 756
Secured physical gold - $20 070
Ratesetter (P2P lending) - $9 881
Bitcoin - $173 010
Raiz app (Aggressive portfolio) - $17 258
Spaceship Voyager app (Index portfolio) -$2 619
BrickX (P2P rental real estate) - $4 471
Total portfolio value: $1 800 119 (+$34 376 or 1.9%) Asset allocation
Australian shares - 41.1%
Global shares- 22.2%
Emerging market shares - 2.2%
International small companies - 2.9%
Total international shares - 27.3%
Total shares - 68.4% (6.6% under)
Total property securities - 0.2% (0.2% over)
Australian bonds - 4.5%
International bonds - 9.1%
Total bonds - 13.6% (1.4% under)
Gold - 8.0%
Bitcoin - 9.6%
Gold and alternatives - 17.7% (7.7% over)
Presented visually, below is a high-level view of the current asset allocation of the portfolio. [Chart] Comments The portfolio has substantially increased this month, continuing the recovery in portfolio value since March. The strong portfolio growth of over $34 000, or 1.9 per cent, returns the value of the portfolio close to that achieved at the end of February this year. [Chart] This month there was minimal movement in the value of Australian and global equity holdings, There was, however, a significant lift of around 6 per cent in the value of gold exchange traded fund units, as well as a rise in the value of Bitcoin holdings. These movements have pushed the value of gold holdings to their highest level so far on the entire journey. Their total value has approximately doubled since the original major purchases across 2009 to 2015. For most of the past year gold has functioned as a portfolio stabiliser, having a negative correlation to movements in Australian equities (of around -0.3 to -0.4). As low and negative bond rates spread across the world, however, the opportunity cost of holding gold is reduced, and its potential diversification benefits loom larger. The fixed income holdings of the portfolio also continued to fall beneath the target allocation, making this question of what represents a defensive (or negatively correlated to equity) asset far from academic. This steady fall is a function of the slow maturing of Ratesetter loans, which were largely made between 2015 and 2017. Ratesetter has recently advised of important changes to its market operation, and placed a fixed maximum cap on new loan rates. By replacing market set rates with maximum rates, the peer-to-peer lending platform appears to be shifting to more of a 'intermediated' role in which higher past returns (of around 8 to 9 per cent) will now no longer be possible. [Chart] The expanding value of gold and Bitcoin holdings since January last year have actually had the practical effect of driving new investments into equities, since effectively for each dollar of appreciation, for example, my target allocation to equities rises by seven dollars. Consistent with this, investments this month have been in the Vanguard international shares exchange-traded fund (VGS) using Selfwealth. This has been directed to bring my actual asset allocation more closely in line with the target split between Australian and global shares. Fathoming out: franking credits and portfolio distributions Earlier last month I released a summary of portfolio income over the past half year. This, like all before it, noted that the summary was prepared on a purely 'cash' basis, reflecting dividends actually paid into a bank account, and excluding consideration of franking credits. Franking credits are credits for company tax paid at the company level, which can be passed to individual shareholders, reducing their personal tax liability. They are not cash, but for a personal investor with tax liabilities they can have equivalent value. This means that comparing equity returns to other investments without factoring these credits can produce a distorted picture of an investor's final after-tax return. In past portfolio summaries I have noted an estimate for franking credits in footnotes, but updating the value for this recently resulted in a curiosity about the overall significance of this neglected element of my equity returns. This neglect resulted from my perception earlier in the journey that they represented a marginal and abstract factor, which could effectively be assumed away for the sake of simplicity in reporting. This is not a wholly unfair view, in the sense that income physically received and able to be spent is something definably different in kind than a notional 'pre-payment' credit for future tax costs. Yet, as the saying goes, because the prospect of personal tax is as certain as extinction from this world, in some senses a credit of this kind can be as valuable as a cash distribution. Restoring the record: trends and drivers of franking credits To collect a more accurate picture of the trends and drivers of franking credits I relied on a few sources - tax statements, records and the automatic franking credit estimates that the portfolio tracking site Sharesight generates. The chart below sets out both the level and major different sources of franking credits received over the past eleven years. [Chart] From this chart some observations can be made.
The level of franking credits has grown substantially over the past ten years - from a total of under $1 000 per year to around $8 000 annually.
Recent years have seen a particularly high accrual of franking credits - such that by value, over half of the total value of franking credits has been received over the past three financial years.
These credits now constitute a significant element in total realised returns - in the last financial year the value of franking credits represented a 12 per cent boost to the total level of cash distributions, and over the past two years they have contributed around $8 000 each year to the total level of after-tax returns. This is the equivalent of the portfolio paying nearly $700 per month in tax liabilities.
The key reason for the rapid growth over the recent decade has been the increased investment holdings in Australian equities. As part of the deliberate rebalancing towards Australian shares across the past two years, these holdings have expanded. The chart below sets out the total value of Australian shares held over the comparable period. [Chart] As an example, at the beginning of this record Australian equities valued at around $276 000 were held. Three years later, the holding were nearly three times larger. The phase of consistently increasing the Australian equities holding to meet its allocated weighting is largely complete. This means that the period of rapid growth seen in the past few years is unlikely to repeat. Rather, growth will revert to be in proportion to total portfolio growth. Close to cross-over: the credit card records One of the most powerful initial motivators to reach financial independence was the concept of the 'cross over' point in Vicki Robins and Joe Dominguez's Your Money or Your Life. This was the point at which monthly expenses are exceeded by investment income. One of the metrics I have traced is this 'cross-over' point in relation to recorded credit card expenses. And this point is now close indeed. Expenditures on the credit card have continued their downward trajectory across the past month. The three year rolling average of monthly credit card spending remains at its lowest point over the period of the journey. Distributions on the same basis now meet over 99 per cent of card expenses - with the gap now the equivalent of less than $50 per month. [Chart] The period since April of the achievement of a notional and contingent form of financial independence has continued. The below chart illustrates this temporary state, setting out the the extent to which to which portfolio distributions (red) cover estimated total expenses (green), measured month to month. [Chart] An alternative way to view the same data is to examine the degree to which total expenses (i.e. fixed payments not made on credit card added to monthly credit card expenses) are met by distributions received. An updated version of this is seen in the chart below. [Chart] Interestingly, on a trend basis, this currently identifies a 'crossing over' point of trend distributions fully meeting total expenditure from around November 2019. This is not conclusive, however, as the trend curve is sensitive to the unusual COVID-19 related observations of the first half of this year, and could easily shift further downward if normal expense patterns resume. One issue this analysis raises is what to do with the 'credit card purchases' measure reported below. This measure is designed to provide a stylised benchmark of how close the current portfolio is to a target of generating the income required to meet an annual average credit card expenditure of $71 000. The problem with this is that continued falling credit card spending means that average credit card spending is lower than that benchmark for all time horizons - measured as three and four year averages, or in fact taken as a whole since 2013. So the set benchmark may, if anything, be understating actual progress compared the graphs and data above by not reflecting changing spending levels. In the past I have addressed this trend by reducing the benchmark. Over coming months, or perhaps at the end of the year, I will need to revisit both the meaning, and method, of setting this measure. Progress Progress against the objective, and the additional measures I have reached is set out below. Measure Portfolio All Assets Portfolio objective – $2 180 000 (or $87 000 pa) 82.6% 111.5% Credit card purchases – $71 000 pa 100.7% 136.0% Total expenses – $89 000 pa 80.7% 109.0% Summary One of the most challenging aspects of closing in on a fixed numerical target for financial independence with risk assets still in place is that the updrafts and downdrafts of market movements can push the goal further away, or surprisingly close. There have been long period of the journey where the total value of portfolio has barely grown, despite regular investments being made. As an example, the portfolio ended 2018 lower than it started the year. The past six months have been another such period. This can create a sense of treading water. Yet amidst the economic devastation affecting real lives and businesses, this is an extremely fortunate position to be in. Australia and the globe are set to experience an economic contraction far more severe than the Global Financial Crisis, with a lesser capacity than previously for interest rates to cushion the impact. Despite similar measures being adopted by governments to address the downturn, it is not clear whether these are fit for purpose. Asset allocation in this environment - of being almost suspended between two realities - is a difficult problem. The history of markets can tell us that just when assets seem most 'broken', they can produce outsized returns. Yet the problem remains that far from being surrounded by broken markets, the proliferation appears to be in bubble-like conditions. This recent podcast discussion with the founder of Grant's Interest Rate Observer provided a useful historical context to current financial conditions this month. One of the themes of the conversation was 'thinking the unthinkable', such as a return of inflation. Similar, this Hoover Institute video discussion, with a 'Back from the future' premise, provides some entertaining, informed and insightful views on the surprising and contingent nature of what we know to be true. Some of our little systems may well have had their day, but what could replace them remains obscured to any observer. The post, links and full charts can be seen here.
Why $11.5K Is the ‘Most Important’ Level for Bitcoin, Traders Explain The price of #Bitcoin (BTC) is hovering at $11,300 and is nearing a pivotal technical level, which some traders are arguing makes $11,500 “the most important” level to confirm a new bull cycle for BTC. If Bitcoin stays above $11,500 by Aug. 10, it would be the highest weekly close for #BTC price since mid-2019. The weekly candle in August 2019 closed slightly above $11,500. In other words, a close above this level would print the best weekly candle since the 2017 bull run. A closure above $11,500 would break Bitcoin market structure Meanwhile, traders are closely observing the upcoming weekly candle closure because many believe it could decide whether the bull market continues. Until BTC cleanly breaks out of $11,500, technically, there is strong overhead resistance. One pseudonymous trader said: “11.5k is the most important level on Bitcoin.” When the price of Bitcoin hit $12,000 on Aug. 2, some investors argued that BTC already broke its market structure. If so, BTC theoretically has room to surge to higher resistance levels at $14,000 and $17,000. Sven Henrich, a trader at NorthmanTrader, believes Bitcoin could head toward $17,000. For the technical case for a prolonged rally to be intact, Henrich said BTC has to remain above $10,500. As long as the price of Bitcoin stabilizes above $10,500, Henrich said a rally to $17,000 is possible, even if BTC then retraces. He said: “Firstly note that a breakout is bullish if it can be successfully defended, meaning as long as $BTC can remain above the breakout trend line it has significant technical room higher… But note that inside the larger wedge consolidation a potentially much more bullish pattern has emerged, that of a potential inverse which would point to near 17,000.” Variables for both bull and bear cases In the near-term, analysts point toward various macro factors that could boost the sentiment around Bitcoin. Most notably, the value of the United States dollar is depreciating. Overall, trading volumes across various markets, including retail and institutional, are increasing. For example, the open interest of the CME Bitcoin futures market has just hit a record high. Despite mass liquidations on Aug. 2, BTC has remained relatively stable above the key technical support level at $10,500. While more factors seemingly buoy the bull case for Bitcoin, there are two risks BTC faces in the short term. First, until $12,000 clearly breaks, the risk of overhead resistance remains. Second, several technical metrics, including funding rates and greed index (currently at 75% or “greed”), hint at an overheated rally. However, it is uncertain whether positive on-chain metrics, such as the number of “HODLers” reaching an all-time high, can offset potential risks. For now, until BTC’s weekly candle closes above $11,500, the market remains cautiously optimistic as attention shifts to the U.S. dollar and stocks.
LOEx Market Research Report on August 27: After BTC's slight adjustment, will the bull market still persist?
[Today's Hot Tips] 1.[Tether official: USDT market value has exceeded $ 13 billion] Tether official data shows that the market value of Tether (USDT) has exceeded $ 13 billion. Since March 2020, the market value of Tether (USDT) has increased by 160% from $5 billion. 2.[The central parity of RMB against the US dollar is raised to 6.89 USDT, the premium rate is 0.35%] According to the currency world market, the central parity of RMB against the US dollar rose by 176 points from the previous day to 6.8903. The central parity rose to its highest value since January 23, 2020, the largest increase since August 6, 2020. The onshore RMB exchange rate against the US dollar is now at 6.886, and the OTC offer of USDT' on Boboo.com is 6.91 yuan, with a premium of 0.35%. 3.[Cardano founder shared two sets of ECIP, including ETC funding mechanism and use of checkpoints to defend against 51% attacks] Cardano founder, Charles Hoskinson, shared two sets of ECIP on Twitter. The first is to implement the original treasury system (p-ECTS) proposal in ETC. The main motivation of p-ECTS is to establish a stable and reliable funding mechanism for independent teams. This proposed change includes adjustments to large rewards so that: 1.80% of block rewards go to miners; 2.20% for p-ECTS smart contract addresses or burning addresses. The second is to use checkpoints as a mechanism to mitigate certain types of 51% attacks. The core idea is to hire a group of external forces to run auxiliary services to ensure the attributes of the ledger, which can be relied on when the invested hash power is low. Once the hash power reaches a level where the attack is no longer financially feasible, the system can be stopped. [Today's market analysis] Bitcoin (BTC)BTC shot up for a short time in the early morning and then fell back. It continued to consolidate around 11450 USDT with relatively small fluctuations. Mainstream currencies are adjusted daily. BTC is currently reported at 11400.2 USDT on LOEx Global, an increase of 0.61% in 24h. The trend of mainstream currencies is sluggish, and the disk is in a relatively weak situation. At this time, it is not recommended to increase the position, just keep holding it if you have a bottom position. The market trend of the currency market is still sluggish. Recently, the shorts have taken the advantage. They have rubbed the longs on the ground all the way. However, since the last high point of Bitcoin, it has only fallen by about 10% in the past 10 days. Such an amplitude is not worth mentioning in the currency market, and the currency market is moving towards a slow bull trend. Looking at the long term, it is normal for the bull market to pull back frequently, even though this wave of small bull market brought by altcoins looks like a "fake bull market" . However, it cannot be denied that altcoins have indeed brought the market hot. With the rise of DeFi, the application of the combination of the financial field and blockchain technology has landed. This makes the people in the currency circle have a greater daydream about the future application scenarios of blockchain technology. And this wave of cottage prices will then affect the market rhythm next year. But no matter what, only when the application is implemented and there is a real demand can its value be truly realized. For Bitcoin, the benefits of the general environment have provided a solid bottom support for the price of Bitcoin, which means that it will be difficult to see 3,000 yuan a Bitcoin in the future. Bitcoin with a strong consensus is our primary investment currency, altcoins will eventually be short-lived, and Bitcoin will continue to rise after minor adjustments. Operation suggestions: Support level: the first support level is 11000 points, the second support level is 10400 integers; Resistance level: the first resistance level is 11500 points, the second resistance level is 12000 points. LOEx is registered in Seychelles. It is a global one-stop digital asset service platform with business distribution nodes in 20 regions around the world. It has been exempted from Seychelles and Singapore Monetary Authority (MAS) digital currency trading services. Provide services and secure encrypted digital currency trading environment for 2 million community members in 24 hours. https://preview.redd.it/42jia3fonhj51.png?width=612&format=png&auto=webp&s=a5a2fcfbda4144778ff69b3879d8d67f57446e09
Forward Thinking Friday - Contrarian Messaging - 31 July 2020
Welcome to Forward Thinking Friday, a regular venue to discuss ideas, concepts and designs that push Decred further, bigger and better. Topics raised can be anything ranging from:
Technological improvements or enhancements
Unique opportunities well serviced by the Decred protocol
Responses to competing protocol designs and features
Integrations and Infrastructure
Marketing and Project Messaging
Focus Topic: Contrarian Messaging
There is a lot of hype for cryptocurrency markets and it is time for Decred to partake in it. Decred is Different in that it builds technology designed to outlast by aligning incentives, avoiding rent extraction and targeting decentralisation and resiliency at all costs. Decred's strength is in it's remarkable ability to take the contrarian bet against literally everything. This message is a key differentiator and deserves to be amplified. This week, I posit two potential areas for a Decred marketing campaign to rally around, and seek community input on defining the message and executing on social channels.
1. Decred is Ready
For the past 4.5years, Decred has been building. Until now, it has been difficult to pitch the protocol as 'sufficiently different' to its peers Bitcoin, ZCash, Monero et al. simply because many of the features were under development and not tangible enough. With Decrediton v1.6 and the DEX release, this changes. Decred will soon have average user access to:
CoinShuffle++ Privacy Mixer with huge volume, cheap cost, rotating user-base due to pseudo random votes
Steps towards decentralising the Treasury creating the first truly decentralised L1 DAO
DCRDEX enabling trustless exchange without reliance on centralised entities
Politeia enabling community governance decisions and dispute resolution
Decred is ready for the challenges that face cryptocurrency projects. Security attacks, governance failure, code calcification, KYC/AML and chainalysis, funding wells drying up, regulator pressure on centralised actors etc. As a DAO, it will command more on-chain funds than any L1 protocol and this is truly unique. #BuildToOutlast #DecredIsReady #DecredDAO https://twitter.com/plabarta_/status/1286062208460390401/photo/1
2. Own the Name, Decentralised Credits, in the face of 'De'Fi
'De'Fi as it appears on Ethereum is founded on principles of Debt, Leverage and usually centralised capital funding. The tokenomics, generally speaking, have incentivised an accumulation of cross-contract debt instruments that few in the ecosystem understand (let alone able to price in the risks). 100%+ APY is most definitely a junk bond of the highest order and these rates are simply unsustainable (as Vitalik himself notes). The way such returns can exist is that the silent 90% are paying for it in dilution, lost trades and increasingly scams, whilst the talking heads, crypto funds and backers quietly take their profits. As JYP covered in the latest Decred blog, incentivised leverage and debt is a core contributor to the fundamental problem within modern finance. Decred operates on entirely full reserve sound money, aka Decentralised Credits. Account Credit is the perfect counterpoint to Account Debt. Decred has an opportunity to express the value of its decentralised financial stack by owning the fact that the 'De' is actually decentralised, and the 'Fi' is coming to fruition (Decred is Ready). 6.7% APY paid in scarce, sound money DCR, without taking on debt and minimising code/smart contract risk highlights our path towards solving the problem, not perpetuating it. An example of this is shown below to demonstrate the ROI in DCR for a new ticket holder starting staking today. Decred Finance Incentivises security, privacy mixing, governance, DAO decision making, self-sovereignty, trustless exchange, optimised and scalable payments and storing value, all using a scarce sound money Decentralised Credits (Not Decentralised Debt). Decred staking ROI for holders of 1 to 5 tickets. Colour and ticket price RHS, Cumulative ROI LHS. Ticket price is estimated assuming all PoW issuance becomes tickets (has been the trend to date) As always, look forward to your comments, discussion and forward thinking suggestions.
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Cryptocurrency’s promise is to make money and payments universally accessible– to anyone, no matter where they are in the world. The Decentralized Finance (DeFi) or Open Finance movement takes that promise a step further. Imagine a global, open alternative to every financial service you use today — savings, loans, trading, insurance and more — accessible to anyone in the world with a smartphone and internet connection. This is now possible on smart contract blockchains, like Ethereum. “Smart contracts” are programs running on the blockchain that can execute automatically when certain conditions are met. These smart contracts enable developers to build far more sophisticated functionality than simply sending and receiving cryptocurrency. These programs are what we now call decentralized apps, or dapps. You can think of a dapp as an app that is built on decentralized technology, rather than being built and controlled by a single, centralized entity or company. (Get used to this word, dapp, you’ll be seeing it a lot from here on out.) While some of these concepts might sound futuristic–automated loans negotiated directly between two strangers in different parts of the world, without a bank in the middle– many of these dapps are already live today. There are DeFi dapps that allow you to create stablecoins (cryptocurrency whose value is pegged to the US dollar), lend out money and earn interest on your crypto, take out a loan, exchange one asset for another, go long or short assets, and implement automated, advanced investment strategies.
What differentiates these DeFi dapps from their traditional bank or Wall Street counterparts?
At their core, the operations of these businesses are not managed by an institution and its employees — instead the rules are written in code (or smart contract, as mentioned above). Once the smart contract is deployed to the blockchain, DeFi dapps can run themselves with little to no human intervention (although in practice developers often do maintain the dapps with upgrades or bug fixes). The code is transparent on the blockchain for anyone to audit. This builds a different kind of trust with users, because anyone has the opportunity to understand the contract’s functionality or find bugs. All transaction activity is also public for anyone to view. While this may raise privacy questions, transactions are pseudonymous by default, i.e. not tied directly to your real-life identity. Dapps are designed to be global from day one — Whether you’re in Texas or Tanzania, you have access to the same DeFi services and networks. Of course, local regulations may apply but, technically speaking, most DeFi apps are available to anyone with an internet connection. “Permissionless” to create, “permissionless” to participate — anyone can create DeFi apps, and anyone can use them. Unlike finance today, there are no gatekeepers or accounts with lengthy forms. Users interact directly with the smart contracts from their crypto wallets. Flexible user experience — don’t like the interface to a certain dapp? No problem — you can use a third party interface, or build your own. Smart contracts are like an open API that anyone can build an app for. Interoperable — new DeFi applications can be built or composed by combining other DeFi products like Lego pieces — e.g. stablecoins, decentralized exchanges, and prediction markets can be combined to form entirely new products. DeFi is now one of the fastest growing sectors in crypto. Industry observers measure traction with a unique new metric — “ETH locked in DeFi”. At the time of writing, users have deposited over $600 million worth of crypto into these smart contracts. Intrigued? Let’s take a closer look at just a few of the popular DeFi dapps out there that you can try today. You’ll need a cryptocurrency wallet with a built-in dapp browser (like Coinbase Wallet) to connect to these dapps. You can also use most of these dapps on desktop by selecting the Coinbase Wallet option and scanning a QR code. It’s still early days for dapps, so DeFi users should do their research on new products and services. Like any computer code, smart contracts can be vulnerable to both unintended programming mistakes and malicious hacks.
Stablecoin and Decentralized Reserve Bank: MakerDAO
Maker is a stablecoin project where each stablecoin (called DAI) is pegged to the US Dollar and is backed by collateral in the form of crypto. Stablecoins offer the programmability of crypto without the downside of volatility that you see with “traditional” cryptocurrencies like Bitcoin or Ethereum. You can try creating your own DAI stablecoin on the Maker Oasis dapp. Maker is more than just a stablecoin project, though–it aspires to be a decentralized reserve bank. People who hold a separate but related token, MKR, can vote on important decisions like the Stability Fee (similar to how the Federal Reserve’s Federal Open Market Committee votes on the Fed Funds rate). Another stablecoin with a different architecture is USD Coin (USDC), where every USDC token is backed by one US dollar held in an audited bank account. Borrow and Lend: Compound Compound is a blockchain-based borrowing and lending dapp — you can lend your crypto out and earn interest on it. Or maybe you need some money to pay the rent or buy groceries, but your funds are tied up in your crypto investments? You can deposit your crypto to the Compound smart contract as collateral, and borrow against it. The Compound contract automatically matches borrowers and lenders, and adjusts interest rates dynamically based on supply and demand. Other popular borrow/lend dapps are Dharma and dYdX. Aggregators like LoanScan track borrow/lend interest rates across the various dapps, so you can shop around for the best rates. Automated Token Exchange: Uniswap Uniswap is a cryptocurrency exchange run entirely on smart contracts, letting you trade popular tokens directly from your wallet. This is different from an exchange like Coinbase, which stores your crypto for you and holds your private keys for safekeeping. Uniswap uses an innovative mechanism known as Automated Market Making to automatically settle trades near the market price. In addition to trading, any user can become a liquidity provider, by supplying crypto to the Uniswap contract and earning a share of the exchange fees. This is called “pooling”. Other popular Decentralized Exchange platforms (DEXes) include 0x, AirSwap, Bancor, Kyber, IDEX, Paradex and Radar Relay. All have slightly different architectures. Prediction Markets: Augur Augur is a decentralized prediction market protocol. With Augur, you can vote on the outcome of events, except you put ‘skin in the game’ by attaching a value to your vote. Prediction market platforms like Augur and Guesser are nascent, but offer a view into a future where users can make better predictions by tapping into the wisdom of the crowd. Synthetic Assets: Synthetix Synthetix is a platform that lets users create and exchange synthetic versions of assets like gold, silver, cryptocurrencies and traditional currencies like the Euro. The synthetic assets are backed by excess collateral locked into the Synthetix contracts. No-loss savings games: PoolTogether The composability of DeFi lends itself to infinite new possibilities. PoolTogether is a no-loss game where participants deposit the DAI stablecoin into a common pot. At the end of each month, one lucky participant wins all the interest earned, and everyone gets their initial deposits back.
So what’s next for DeFi?
Money and finance have been around in one form or the other since the dawn of human civilization. Crypto is just the latest digital avatar. In upcoming years, we might see every financial service that we use in today’s fiat system being rebuilt for the crypto ecosystem. We’ve already seen asset issuance and exchange, borrowing, lending, custody, and derivatives built for crypto. What’s next? The first generation of DeFi dapps rely heavily on collateral as a safeguard. That is, you need to already own crypto and provide it as collateral in order to borrow more crypto. More traditional unsecured borrowing and lending will need to rely on an identity system, so that borrowers can build up credit and increase their borrowing power, much like today’s SSN and FICO scores. Unlike today’s identity and credit systems however, a decentralized identity will have to be both universal and privacy-preserving. We’re also seeing innovation in the insurance space. Many of today’s DeFi loans are overcollateralized (meaning that loans seem inherently safe because of the generous cushion of assets held in reserve). But the black swan for DeFi is smart contract vulnerabilities. If a hacker finds and exploits a bug in the open source code for a dapp, millions of dollars could be drained in an instant. Teams like Nexus Mutual are building decentralized insurance that would make users whole in the event of smart contract hacks. Another trend we’re seeing is better user experience. The first generation of dapps was built by blockchain enthusiasts for blockchain enthusiasts. These dapps did a great job of demonstrating exciting new DeFi possibilities, but the usability left something to be desired. The latest iterations of DeFi apps are prioritizing design and ease of use in order to take open finance to a wider audience. In the future, we expect that crypto wallets will be the portal to all your digital asset activity, just like an internet browser today is your portal to the world’s news and information. Imagine a dashboard that shows you not just what assets you own, but how much you have locked up in different open finance protocols–loans, pools, and insurance contracts. Across the DeFi ecosystem, we’re also seeing a move towards decentralizing governance and decision-making. Despite the word “decentralized” in DeFi, many projects today have master keys for the developers to shut down or disable dapps. This was done to allow for easy upgrades and provide an emergency shutoff valve in case of buggy code. However, as the code becomes more battle-tested, we expect developers will give up these backdoor switches. The DeFi community is experimenting with ways to allow stakeholders to vote on decisions, including through the use of blockchain-based Decentralized Autonomous Organizations (DAOs). Something magical is happening in the open financial system — crypto is bringing money online, and we’re seeing a quantum leap in what’s possible when it comes to the functionality of money. It’s a rare opportunity to see an entirely new industry blossom from scratch. The DeFi space will at first play catch up with today’s financial services industry. But over time, it’s hard to even fathom what innovations will come about when the power to build financial services is democratized to anyone who can write code.
Efficient But Simple! How QuarkChain Multi-Native Tokens Change the DeFi Concept
https://preview.redd.it/2jrpy37p7uh51.png?width=700&format=png&auto=webp&s=c6da35181ac55698695d6b891b63532655bb03c4 DeFi is the hottest topic in the blockchain society these days, and the active on-chain behavior has given new vitality to many public chains based on Ethereum. However, due to structural flaws in Ethereum1.0, there is a vast authority difference between native tokens and ERC20 tokens, and it has restricted the development of DeFi. QuarkChain aims at building the next-generation DeFi platform through sharding and multi-native token to solve the problems facing DeFi today: high GAS cost, poor user experience, insecurity, and vulnerability to attacks. Let’s experience the security and the ease-of-use of the next generation of DeFi. These DeFi products will be launched shortly, but before that, we need to introduce why our multi-native token function will help us realize a new revolution to DeFi.
DeFi, the most prominent trend in crypto?
Network congestion and skyrocketing gas fees
Affected by the epidemic, Bitcoin plummeted by almost 50% to $3,800, and ETH fell as much as 65.2% just on March 12 and 13. The plummet caused a run, the Ethereum miner fees that carried a large number of DeFi and DApps skyrocketed, and the network was also congested. DeFi users were unable to redeem and borrow in time, and the forced liquidation was triggered due to the inability to replenish the positions in time, causing considerable losses to the users on it. As we all know, Ethereum relies on the consumption of GAS to complete its economic operation. Every step of the chain requires the consumption of GAS. The miners will determine the order of transactions based on the price of the GAS fee. From Mar. 12 to 13, due to a large number of transactions such as transfers, replenishment, deposit, and withdrawal of users on the chain, the Ethereum GAS fee increased to 10 times of the usual, and the GAS fee was once as high as 1 ETH to successfully package transactions. The high handling fee restrains the demand for transactions. However, the value growth of DeFi comes from frequent transaction activities on the chain. It says that the high GAS fee has limited the upper bound of the value of Ethereum DeFi. ETH can only pay the GAS fee. Any ERC20 token issued on it cannot achieve this function, setting a bar for new users, and DeFi’s dependence on ETH, further restricting DeFi’s free transactions.
Your eyes are on the passive income, but the hackers are eyeing your principal.
“If you transfer Bitcoin to an Ethereum-based platform, you must pay attention to security issues, because the security of the two blockchains of Bitcoin and Ethereum is not the same. Although Ethereum has advantages and flexibility, the investment in security does not seem to be enough. This means that you may encounter various risks, such as a sudden increase in the gas price which leads to other related problems. All of these will cause you to lose part or even all of your investment funds.” Said by Andreas Antonopoulos, a well-known KOL in the cryptocurrency industry, made the above evaluation of Ethereum-based DeFi.
Why is there a vast hidden danger in Ethereum’s DeFi? The first thing to know is that when an ERC20 token is issued, an ERC20 contract is created. This ERC20 contract defines some necessary interfaces, which are mainly used for bookkeeping. But this ERC20 contract is a contract subordinate to Ethereum, and the authority of this contract is different from Ethereum itself. Let’s introduce in detail, what the difference between native ETH and other ERC20 tokens is on the DeFi products of Ethereum. If you use Ethereum’s native token ETH, the operation is simple. As long as the ETH is transferred to the contract of the target DeFi application, the contract operation will be the same as when we use cash to invest in stocks or wealth management products. No other operations are required. https://preview.redd.it/vi40k0av7uh51.png?width=704&format=png&auto=webp&s=39613ef07bdb4398f610d14262faa506eb9ca49b However, the operation of tokens minted using ERC20 contracts is very different from native ETH, regardless of whether the tokens minted by these ERC20 contracts are well-known. Before trading, the ERC20 contract first authorizes the DeFi platform’s contract to transfer a specified number of ERC20 tokens on the account, such as USDT, USDC, or WBTC. After approval, the DeFi contract is called to transfer money. The intuitive understanding is to avoid frequent password input in small transactions, we authorized Paypal to open a password-free payment, so that the payment can be directly deducted during consumption. It sounds convenient, but is it that good? https://preview.redd.it/ytx20h2x7uh51.png?width=714&format=png&auto=webp&s=37ee7c7aa7349be6b16f9e4f4bf73d9578dc6446 There is a crucial problem here: if the DeFi contract is malicious during the approval process, this DeFi contract has the right to transfer all the ERC20 tokens on our account to any account. It is similar to that we authorize Paypal to perform a password-free operation of the balance, but if a hacker attacked Paypal successfully, this hacker could transfer all our money to his account. Similar things have happened before. There is a famous project called Bancor, which used to rely on the type of authorization contract for ERC20 processing. However, there was a bug in the contract that allowed the contract to transfer the tokens in the user’s wallet to any hacker designated address after the user was authorized, which caused a loss of almost 100,000 US dollars. The loss was not so significant because it occurred in the early stage of DeFi development. If it happens today that the DeFi asset scale on Ethereum already reached hundreds of millions, it would cause severe damage to the entire Ethereum ecosystem and the development of DeFi. Therefore, many problems DeFi met were due to the imperfect design of the ERC20. However, we also observe fewer attacks on native tokens because of the complete authority control and the shorter operation chain. Therefore, to solve this problem, we can just increase the authority of ecological tokens so that they can have the same functions as native tokens. All tokens can become “first-class citizens” in this public chain ecology and enjoy the same convenience.
The next generation of DeFi platform
Many public chain projects, especially Ethereum itself, have, in fact, deeply recognized their own shortcomings and have also proposed new solutions. The fundamental core is to improve processing efficiency and avoid network congestion. Using PoS consensus instead of PoW can improve throughput and reduce packaging cost, which means reducing GAS cost. Of course, improving transaction efficiency and reducing GAS cost will become the primary long-term goals, but this does not enhance the security and usability of DeFi on Ethereum. In our opinion, a mature DeFi platform must have the following characteristics: High efficiency: Have faster concurrent processing capabilities, which means higher TPS. Low GAS rate: Lower fees can encourage the DeFi users’ enthusiasm for using it and even stimulate the development of high-frequency trading. Safer: There are fewer interactive links in the contract, which at least structurally avoids the problems caused by the permission difference, such as the complexity of ERC20 interaction, the lengthening of the operation chain, and the increase of vulnerabilities. Easier to use: Various types of multi-native tokens can be used to pay transaction fees during the transactions, and there is no need to use designated tokens to pay for that. Easy to combine: It can support a wide range of contracts, including the combination of different consensuses on the same chain, ledger structures, and other elements. It can even open up other chains, and make DeFi like a real Lego game.
People always want a faster horse until the car appears.
In the QuarkChain mainnet, the multi-native token is the primary function for building the next generation of the DeFi Network. The multi-native token has the same status as QKC in the QuarkChain system. They can call contracts, cross-chain, and pay transaction fees under certain conditions. In addition to being unable to participate in QKC network governance, the multi-native tokens can achieve all of the QKC’s functions, including cross-chain transfers. Most of the non-native asset inconvenience problems faced by Defi can be solved. In the future contract, the functions of the multi-native token will be the same as QKC, eliminating the last barrier to applying multi-native tokens. We will launch our DEX afterward when users genuinely feel the unimpeded DeFi platform on QuarkChain.
The new DeFi world will start with the creation of personalized multi-native tokens.
Ethereum performance and contract security restrictions have affected the development, which is why DeFi will become the leading new field of QuarkChain. After intensive development and testing, the multi-native token function is ready to be officially delivered to the community. The QuarkChain community members can mine their tokens, as well as use them for transfer (including cross-sharding transfer), payment of fees, and directly call smart contracts very soon. All the users can experience the convenience and innovation that the multi-native token brings to the blockchain system in conjunction with the DEX we will soon launch. To let everyone experience the security and ease of use of the next generation of DeFi we bring, QuarkChain will launch five DeFi-related products in August. These products are expected to be launched one after another from this week. Please stay tuned with us! Learn more about QuarkChain multi-native token: https://www.youtube.com/watch?list=PLKGfzFVHyMzGeV78paQ2qsmlaTyCssmfs&v=-at4Dmbn11M&feature=emb_title Read more on the next generation of the DeFi network: https://medium.com/quarkchain-official/building-the-next-generation-of-defi-network-9a5582d487d6
Don't Fight the Trend (Sidenote - Fuck r/investing)
TF, like these corn balls out here removing posts that have any bit of a bear thesis? lmao Getting to the point of my post, The Trend is Down.... Compiling data of closing points every two weeks from the start of 2020, each of the indexes are down-trending for the year & Bitcoin as well. Now the graphs which I've attached here hold little/next to no weight when looking for an indication on what position to take/when, but it's a piece of the puzzle when talking about the outlook for 2020. Another piece to the puzzle, since that 'judgement day' post (referencing something I posted 3 weeks ago on investing, would link but that got removed along with my post on april 19th warning the clowns in there that they shouldn't be buying into USO/investing in oil lmfao); we have seen 6 green trading days & 9 red trading days on the S&P, signaling to me that investors are favoring selling in the 280-295 range much more so than buying. While the S&P has rallied above 290 on the back of NASDAQ/MAGA movement, it hasn't broken into/through this range with any conviction at all, it's actually forming a head and shoulder top in the trading range - seen here. Further Dissecting the SPY - Price action is currently bouncing between the 50 & 200 EMA (EMA is quite significant as it weighs the price around volume traded, while SMA's simply calculate based on closing price day-to-day.) Friday's close placed us right under the 200 EMA (I view it as the ceiling currently.) and would point to downside come open market on monday (tomorrow.) *At the time of this post, futures opened with a gap down to 291 and has bounced back up to test this 2940 resistance. Will they push it above for a proper bull break before US markets open? Perhaps, maybe the bulls get their 300 touch; However, I see the indicators hinting to downside more convincing atm.* Further DD of 'leading indicators' when looking at ST trends (DXY, BTC, XLF) - XLF - (4Hr chart, rather than daily.) The Financial sector has been getting absolutely SLAMMED, like seriously, its almost worse than the beatdowns the small-caps have been receiving. Imo, this questionable performance from the financial sector says A LOT when considering investor uncertainty at the moment. On the four hour, this sector is currently bouncing between the 50 & 200 EMA's as they pinch closer together; which you could say is bullish, however, any and all uptrends on the chart have been broken & it leaves the financials out in no mans land (bearish.) It's currently pressed against it's 'LT' downtrend line (Established in early January after COVID was 'open public info'.) and made a double top rejection off of 23.70. BTC- Touched 10k & crashed over 10% this weekend. As seen in the first screenshot I attached, BTC has been trading almost side by side with the general markets (Most reflective when looking at the S&P or NASDAQ.) I believe this to be a leading indicator of downside ahead similarly to how it was a leading indicator in mid-march when gauging 'how much downside was left in the markets.' DXY - Key when considering short term deflation/inflation of assets. Has broken out above an immense resistance & has been confirming this as new support (people are hoarding cash, much more than they're spending, contrary to popular belief; I wont comment much tho, because tracking the DXY can get complex quick. We're taking it at face value here.) Watch for another major breakout (Would signify people hoarding cash, most likely stocks are getting liquidated at that same time. Comparing the timeline of the last breakout, March 9th- March 20th, this was the same timeline which the S&P took its major leg down from 300-220.) TLDR - Stonks do go down, they've been maxing out for the last three weeks & deflation is around the corner. Positions - Heavy SPXU & SQQQ positions, AMD $46p May 22nd/ $40p June 5th, XLF $20.5p May 22th, MGM $10p June 5th
dxDAO aims to power DeFi protocols through decentralized governance
I found this article on internet. It's repost of it to help educate people about all DXDao advantages: These are positive and necessary steps for DeFi. The new governance structures are intended to help coordinate across community stakeholders and make better decisions. These dynamics are influenced by the issues covered in Dose of DeFi, but I believe they deserve their own focused analysis. Govern Thisaims to educate token holders and make them better voters. Emphasis will be placed on specific governance proposals and relaying community governance discussions on forums and weekly calls. Governance is a coordination technology that has helped countries and companies build more than the sum of their parts. Blockchains are also a coordination technology, but for computers, not humans***.*** Govern Thiswill track the development of the melding of these two over the coming years. Like governance,Govern Thisis a work in progress. I would appreciate any feedback on format, topics covered or any other suggestions to make the newsletter better. Just hit reply. The first issue ofGovern Thisis below. Pleaseclick here to subscribe. Thanks for reading, Chris 📷 dxDAO aims to power DeFi protocols through decentralized governance Gnosis launched a long-awaited DEX last week with batched auctions for low-liquidity trade pairs. The front-end, Mesa.Eth.Link is owned and operated by dxDAO, a decentralized collective that hopes to power other DeFi protocols. While dYdX does not have any specific governance plans (yet), this tweet from dYdX founder Antonio Juliano is a common approach to governance. 📷Antonio Juliano @AntonioMJuliano3) 0x should focus less on governance in the short term. It’s way more important to first build something with a large amount of adoption that’s worth governing December 6th 2018 3 Retweets62 Likes The tweet at the end of 2018 was in response to 0x and its native token, ZRX. The project was popular but the token had no use case outside of governance. This governance strategy – build now, decentralize later – is widely accepted in the space and is perhaps best exemplified by the A16Z’s Jesse Walden’s post, “Progressive Decentralization: A Playbook for Building Crypto Applications”, which the A16Z-backed Compound has essentially implemented (more in the section below). dxDAO, on the other hand, maintains that decentralization must come at the beginning or else the core team and investors will have an outsized influence on the project in formal (token voting) or informal ways (dictators for life). Background dxDAO was launched in May 2019, spun out of a collaboration between Gnosis and DAOstack over managing the DutchX platform. dxDAO’s key governance design is separating financial rights to the DAO (DXD) from voting power over the DAO (Reputation). It used an Edgeware-style lock drop to distribute reputation to stakeholders in May of last year. Any user could lock up ETH or an accepted ERC-20 for a month and receive Reputation, which are voting rights in dxDAO, even though it is not a token and cannot be transferred. Over 400 unique Ethereum addresses participated in the distribution scheme. Gnosis went through a pretty extensive process in July 2019 to “step back” from its involvement in the DAO, and since then, the community and dxDAO have aligned behind a mission of “putting the ‘De’ in Decentralized Finance”. Following on last week’s launch of Mesa.ETH.Link, dxDAO is conducting a fundraiser or (“DAICO”?) to help fund its new slate of DeFi products, including a prediction market platform (Omen) and a privacy-centric DeFi dashboard (Mix). Project launch is typically when a project is most centralized. Execution is hard and direction and accountability are important. dxDAO’s approach will be an interesting counterexample to the “decentralize later” trend and may provide insight into new governance strategies. Click here for more information about the dxDAO fundraiser. Here’s what is on the dxDAO docket this week:
There are no explicit plans yet, but the widely held assumption is that the COMP distribution will be determined by the interest earned and paid by users on the protocol since its inception. This is a clever way that only incentivizes more use of the protocol and is hard to game because interests accrues over time. But the question still remains, what will the COMP community look like and what values will it espouse? Can emergent cultures arise out of Silicon Valley too? Here’s what is on the Compound docket this week:
Governance AMA with Compound CEO Robert Leshner - Robert answered a variety of questions on ETH2.0 (staking yield is of great interest), Chainlink (Compound’s oracle system is better), contentious forks (Compound would signal a preference on chain) and how Covid-19 changed his mind about remote work. They also announced…
Proposal: Add USDT Support – announced on the AMA, USDT was approved by Compound users in a poll last September but had yet to be included. The proposal to add the largest stablecoin in the world is the first test for the new governance portal. (Very) notably, the proposal does not allow USDT to be used as collateral, as Compound currently does with wBTC. It’s not clear if Compound wants to be in the largest stablecoin market or not and underscores the governance challenges of straddling both worlds.
Head of Community Rich started off with a new meme for governance: the path from intent to implementation, discussing how forums, polls and other initiatives are designed to capture the intent of the community, and then “empowered people” are tasked with implementing that, foreshadowing upcoming changes.
Half of the call was devoted to the addition of WBTC as collateral with representatives from WBTC, Bitgo and CoinList in attendance. CoinList’s WBTC announcement gives WBTC the type of liquidity needed for Maker’s auctions (“can redeem WBTC in less than 2 minutes and burn less than that”). Most of the discussion revolved around the circular loop from BTC->DAI in times of high volatility. While there was some concern that WBTC liquidity was dependent on acceptance as Maker collateral, most on the call seemed to support the addition. The strongest support seemed to come from the Maker Foundation’s market making team, who is reportedly the largest market maker for WBTC. There’s more in the Maker forum thread.
State of the peg – Vishesh’s overview (graphs can be seen here) showed that the peg had come down to $1.01x area but most of the discussion was around the debt ceiling. At the time of the call it was 4 million away from its 90m debt ceiling. Vishesh advocated for a more programmatic lifting of the debt ceiling. Update: Dai hit the 90m debt ceiling Friday evening ET. Should help the peg.
Single Collateral Dai shutdown – the process has begun. A poll passed with May 12 as the official SCD shutdown. Just yesterday, an executive just passed yesterday to make the MKR oracle fee-less, which will help with migration. Many in the community think the migration of debt from SCD will do more than enough to restore the peg. 13 MIPs and 2 sub proposals – Core to the new Maker governance process is the “Maker Improvement Proposals (MIPs), which are modeled off of BIPs (for Bitcoin) and EIPs (for Ethereum). The two sub-proposals are to appoint the Smart Contracts Team and assign Charles St. Louis as the MIP editor. The 13 MIPs are listed below:
By and large, the MIPs codify many of the informal Maker governance processes. There is currently a request for comments period (MIP forum) and there will be an informal poll on Monday, April 27 on whether to proceed with the 13 MIPs and 2 sub proposals. If it’s a “Yes”, than an executive for an official ratification vote would start on May 1 and lasts for 4 days. If it passes, the official governance cycle will begin and the rest of the MIPs will likely be approved from May 4 – 6. Other Governing Things
Synthetix trials incentivzation program to encourage ETH shorts to balance debt position Link
PieDAO community call on audit and post imBTC actions Link
Coinbase Custody double downs on DeFi governance Link
Terra considers punishing validators that don’t vote Link
0x governance proposal to decrease epoch length to 7 days Link
That’s it! Feedback definitely appreciated. Just hit reply. Written in Brooklyn where it rained all day. No euchre today, but yesterday was epic. Govern This is written byChris Powers. Opinions expressed are my own. All content is for informational purposes and is not intended as investment advice.
In this research report, we present a study on Kyber Network. Kyber Network is a decentralized, on-chain liquidity protocol designed to make trading tokens simple, efficient, robust and secure. Kyber design allows any party to contribute to an aggregated pool of liquidity within each blockchain while providing a single endpoint for takers to execute trades using the best rates available. We envision a connected liquidity network that facilitates seamless, decentralized cross-chain token swaps across Kyber based networks on different chains. Kyber is a fully on-chain liquidity protocol that enables decentralized exchange of cryptocurrencies in any application. Liquidity providers (Reserves) are integrated into one single endpoint for takers and users. When a user requests a trade, the protocol will scan the entire network to find the reserve with the best price and take liquidity from that particular reserve.
DeFi applications all need access to good liquidity sources, which is a critical component to provide good services. Currently, decentralized liquidity is comprised of various sources including DEXes (Uniswap, OasisDEX, Bancor), decentralized funds and other financial apps. The more scattered the sources, the harder it becomes for anyone to either find the best rate for their trade or to even find enough liquidity for their need. Kyber is a blockchain-based liquidity protocol that aggregates liquidity from a wide range of reserves, powering instant and secure token exchange in any decentralized application. The protocol allows for a wide range of implementation possibilities for liquidity providers, allowing a wide range of entities to contribute liquidity, including end users, decentralized exchanges and other decentralized protocols. On the taker side, end users, cryptocurrency wallets, and smart contracts are able to perform instant and trustless token trades at the best rates available amongst the sources. The Kyber Network is project based on the Ethereum protocol that seeks to completely decentralize the exchange of crypto currencies and make exchange trustless by keeping everything on the blockchain. Through the Kyber Network, users should be able to instantly convert or exchange any crypto currency.
1.1 OVERVIEW ABOUT KYBER NETWORK PROTOCOL
The Kyber Network is a decentralized way to exchange ETH and different ERC20 tokens instantly — no waiting and no registration needed. Using this protocol, developers can build innovative payment flows and applications, including instant token swap services, ERC20 payments, and financial DApps — helping to build a world where any token is usable anywhere. Kyber’s fully on-chain design allows for full transparency and verifiability in the matching engine, as well as seamless composability with DApps, not all of which are possible with off-chain or hybrid approaches. The integration of a large variety of liquidity providers also makes Kyber uniquely capable of supporting sophisticated schemes and catering to the needs of DeFi DApps and financial institutions. Hence, many developers leverage Kyber’s liquidity pool to build innovative financial applications, and not surprisingly, Kyber is the most used DeFi protocol in the world. The Kyber Network is quite an established project that is trying to change the way we think of decentralised crypto currency exchange. The Kyber Network has seen very rapid development. After being announced in May 2017 the testnet for the Kyber Network went live in August 2017. An ICO followed in September 2017, with the company raising 200,000 ETH valued at $60 million in just one day. The live main net was released in February 2018 to whitelisted participants, and on March 19, 2018, the Kyber Network opened the main net as a public beta. Since then the network has seen increasing growth, with network volumes growing more than 500% in the first half of 2019. Although there was a modest decrease in August 2019 that can be attributed to the price of ETH dropping by 50%, impacting the overall total volumes being traded and processed globally. They are developing a decentralised exchange protocol that will allow developers to build payment flows and financial apps. This is indeed quite a competitive market as a number of other such protocols have been launched. In Brief - Kyber Network is a tool that allows anyone to swap tokens instantly without having to use exchanges. - It allows vendors to accept different types of cryptocurrency while still being paid in their preferred crypto of choice. - It’s built primarily for Ethereum, but any smart-contract based blockchain can incorporate it. At its core, Kyber is a decentralized way to exchange ETH and different ERC20 tokens instantly–no waiting and no registration needed. To do this Kyber uses a diverse set of liquidity pools, or pools of different crypto assets called “reserves” that any project can tap into or integrate with. A typical use case would be if a vendor allowed customers to pay in whatever currency they wish, but receive the payment in their preferred token. Another example would be for Dapp users. At present, if you are not a token holder of a certain Dapp you can’t use it. With Kyber, you could use your existing tokens, instantly swap them for the Dapp specific token and away you go. All this swapping happens directly on the Ethereum blockchain, meaning every transaction is completely transparent.
1.1.1 WHY BUILD THE KYBER NETWORK?
While crypto currencies were built to be decentralized, many of the exchanges for trading crypto currencies have become centralized affairs. This has led to security vulnerabilities, with many exchanges becoming the victims of hacking and theft. It has also led to increased fees and costs, and the centralized exchanges often come with slow transfer times as well. In some cases, wallets have been locked and users are unable to withdraw their coins. Decentralized exchanges have popped up recently to address the flaws in the centralized exchanges, but they have their own flaws, most notably a lack of liquidity, and often times high costs to modify trades in their on-chain order books. Some of the Integrations with Kyber Protocol The Kyber Network was formed to provide users with a decentralized exchange that keeps everything right on the blockchain, and uses a reserve system rather than an order book to provide high liquidity at all times. This will allow for the exchange and transfer of any cryptocurrency, even cross exchanges, and costs will be kept at a minimum as well. The Kyber Network has three guiding design philosophies since the start:
To be most useful the network needs to be platform-agnostic, which allows any protocol or application the ability to take advantage of the liquidity provided by the Kyber Network without any impact on innovation.
The network was designed to make real-world commerce and decentralized financial products not only possible but also feasible. It does this by allowing for instant token exchange across a wide range of tokens, and without any settlement risk.
The Kyber Network was created with ease of integration as a priority, which is why everything runs fully on-chain and fully transparent. Kyber is not only developer-friendly, but is also compatible with a wide variety of systems.
1.1.2 WHO INVENTED KYBER?
Kyber’s founders are Loi Luu, Victor Tran, Yaron Velner — CEO, CTO, and advisor to the Kyber Network.
1.1.3 WHAT DISTINGUISHES KYBER?
Kyber’s mission has always been to integrate with other protocols so they’ve focused on being developer-friendly by providing architecture to allow anyone to incorporate the technology onto any smart-contract powered blockchain. As a result, a variety of different dapps, vendors, and wallets use Kyber’s infrastructure including Set Protocol, bZx, InstaDApp, and Coinbase wallet. Besides, dapps, vendors, and wallets, Kyber also integrates with other exchanges such as Uniswap — sharing liquidity pools between the two protocols. A typical use case would be if a vendor allowed customers to pay in whatever currency they wish, but receive the payment in their preferred token. Another example would be for Dapp users. At present, if you are not a token holder of a certain Dapp you can’t use it. With Kyber, you could use your existing tokens, instantly swap them for the Dapp specific token and away you go. Limit orders on Kyber allow users to set a specific price in which they would like to exchange a token instead of accepting whatever price currently exists at the time of trading. However, unlike with other exchanges, users never lose custody of their crypto assets during limit orders on Kyber. The Kyber protocol works by using pools of crypto funds called “reserves”, which currently support over 70 different ERC20 tokens. Reserves are essentially smart contracts with a pool of funds. Different parties with different prices and levels of funding control all reserves. Instead of using order books to match buyers and sellers to return the best price, the Kyber protocol looks at all the reserves and returns the best price among the different reserves. Reserves make money on the “spread” or differences between the buying and selling prices. The Kyber wants any token holder to easily convert one token to another with a minimum of fuss.
1.2 KYBER PROTOCOL
The protocol smart contracts offer a single interface for the best available token exchange rates to be taken from an aggregated liquidity pool across diverse sources. ● Aggregated liquidity pool. The protocol aggregates various liquidity sources into one liquidity pool, making it easy for takers to find the best rates offered with one function call. ● Diverse sources of liquidity. The protocol allows different types of liquidity sources to be plugged into. Liquidity providers may employ different strategies and different implementations to contribute liquidity to the protocol. ● Permissionless. The protocol is designed to be permissionless where any developer can set up various types of reserves, and any end user can contribute liquidity. Implementations need to take into consideration various security vectors, such as reserve spamming, but can be mitigated through a staking mechanism. We can expect implementations to be permissioned initially until the maintainers are confident about these considerations. The core feature that the Kyber protocol facilitates is the token swap between taker and liquidity sources. The protocol aims to provide the following properties for token trades: ● Instant Settlement. Takers do not have to wait for their orders to be fulfilled, since trade matching and settlement occurs in a single blockchain transaction. This enables trades to be part of a series of actions happening in a single smart contract function. ● Atomicity. When takers make a trade request, their trade either gets fully executed, or is reverted. This “all or nothing” aspect means that takers are not exposed to the risk of partial trade execution. ● Public rate verification. Anyone can verify the rates that are being offered by reserves and have their trades instantly settled just by querying from the smart contracts. ● Ease of integration. Trustless and atomic token trades can be directly and easily integrated into other smart contracts, thereby enabling multiple trades to be performed in a smart contract function. How each actor works is specified in Section Network Actors. 1. Takers refer to anyone who can directly call the smart contract functions to trade tokens, such as end-users, DApps, and wallets. 2. Reserves refer to anyone who wishes to provide liquidity. They have to implement the smart contract functions defined in the reserve interface in order to be registered and have their token pairs listed. 3. Registered reserves refer to those that will be cycled through for matching taker requests. 4. Maintainers refer to anyone who has permission to access the functions for the adding/removing of reserves and token pairs, such as a DAO or the team behind the protocol implementation. 5. In all, they comprise of the network, which refers to all the actors involved in any given implementation of the protocol. The protocol implementation needs to have the following: 1. Functions for takers to check rates and execute the trades 2. Functions for the maintainers to registeremove reserves and token pairs 3. Reserve interface that defines the functions reserves needs to implement https://preview.redd.it/d2tcxc7wdcg51.png?width=700&format=png&auto=webp&s=b2afde388a77054e6731772b9115ee53f09b6a4a
1.3 KYBER CORE SMART CONTRACTS
Kyber Core smart contracts is an implementation of the protocol that has major protocol functions to allow actors to join and interact with the network. For example, the Kyber Core smart contracts provide functions for the listing and delisting of reserves and trading pairs by having clear interfaces for the reserves to comply to be able to register to the network and adding support for new trading pairs. In addition, the Kyber Core smart contracts also provide a function for takers to query the best rate among all the registered reserves, and perform the trades with the corresponding rate and reserve. A trading pair consists of a quote token and any other token that the reserve wishes to support. The quote token is the token that is either traded from or to for all trades. For example, the Ethereum implementation of the Kyber protocol uses Ether as the quote token. In order to search for the best rate, all reserves supporting the requested token pair will be iterated through. Hence, the Kyber Core smart contracts need to have this search algorithm implemented. The key functions implemented in the Kyber Core Smart Contracts are listed in Figure 2 below. We will visit and explain the implementation details and security considerations of each function in the Specification Section.
1.4 HOW KYBER’S ON-CHAIN PROTOCOL WORKS?
Kyber is the liquidity infrastructure for decentralized finance. Kyber aggregates liquidity from diverse sources into a pool, which provides the best rates for takers such as DApps, Wallets, DEXs, and End users.
1.4.1 PROVIDING LIQUIDITY AS A RESERVE
Anyone can operate a Kyber Reserve to market make for profit and make their tokens available for DApps in the ecosystem. Through an open reserve architecture, individuals, token teams and professional market makers can contribute token assets to Kyber’s liquidity pool and earn from the spread in every trade. These tokens become available at the best rates across DApps that tap into the network, making them instantly more liquid and useful. MAIN RESERVE TYPES Kyber currently has over 45 reserves in its network providing liquidity. There are 3 main types of reserves that allow different liquidity contribution options to suit the unique needs of different providers. 1. Automated Price Reserves (APR) — Allows token teams and users with large token holdings to have an automated yet customized pricing system with low maintenance costs. Synthetix and Melon are examples of teams that run APRs. 2. Fed Price Reserves (FPR) — Operated by professional market makers that require custom and advanced pricing strategies tailored to their specific needs. Kyber alongside reserves such as OneBit, runs FPRs. 3. Bridge Reserves (BR) — These are specialized reserves meant to bring liquidity from other on-chain liquidity providers like Uniswap, Oasis, DutchX, and Bancor into the network.
1.5 KYBER NETWORK ROLES
There Kyber Network functions through coordination between several different roles and functions as explained below: - Users — This entity uses the Kyber Network to send and receive tokens. A user can be an individual, a merchant, and even a smart contract account. - Reserve Entities — This role is used to add liquidity to the platform through the dynamic reserve pool. Some reserve entities are internal to the Kyber Network, but others may be registered third parties. Reserve entities may be public if the public contributes to the reserves they hold, otherwise they are considered private. By allowing third parties as reserve entities the network adds diversity, which prevents monopolization and keeps exchange rates competitive. Allowing third party reserve entities also allows for the listing of less popular coins with lower volumes. - Reserve Contributors — Where reserve entities are classified as public, the reserve contributor is the entity providing reserve funds. Their incentive for doing so is a profit share from the reserve. - The Reserve Manager — Maintains the reserve, calculates exchange rates and enters them into the network. The reserve manager profits from exchange spreads set by them on their reserves. They can also benefit from increasing volume by accessing the entire Kyber Network. - The Kyber Network Operator — Currently the Kyber Network team is filling the role of the network operator, which has a function to adds/remove Reserve Entities as well as controlling the listing of tokens. Eventually, this role will revert to a proper decentralized governance.
1.6 BASIC TOKEN TRADE
A basic token trade is one that has the quote token as either the source or destination token of the trade request. The execution flow of a basic token trade is depicted in the diagram below, where a taker would like to exchange BAT tokens for ETH as an example. The trade happens in a single blockchain transaction. 1. Taker sends 1 ETH to the protocol contract, and would like to receive BAT in return. 2. Protocol contract queries the first reserve for its ETH to BAT exchange rate. 3. Reserve 1 offers an exchange rate of 1 ETH for 800 BAT. 4. Protocol contract queries the second reserve for its ETH to BAT exchange rate. 5. Reserve 2 offers an exchange rate of 1 ETH for 820 BAT. 6. This process goes on for the other reserves. After the iteration, reserve 2 is discovered to have offered the best ETH to BAT exchange rate. 7. Protocol contract sends 1 ETH to reserve 2. 8. The reserve sends 820 BAT to the taker.
1.7 TOKEN-TO-TOKEN TRADE
A token-to-token trade is one where the quote token is neither the source nor the destination token of the trade request. The exchange flow of a token to token trade is depicted in the diagram below, where a taker would like to exchange BAT tokens for DAI as an example. The trade happens in a single blockchain transaction. 1. Taker sends 50 BAT to the protocol contract, and would like to receive DAI in return. 2. Protocol contract sends 50 BAT to the reserve offering the best BAT to ETH rate. 3. Protocol contract receives 1 ETH in return. 4. Protocol contract sends 1 ETH to the reserve offering the best ETH to DAI rate. 5. Protocol contract receives 30 DAI in return. 6. Protocol contract sends 30 DAI to the user.
2.KYBER NETWORK CRYSTAL (KNC) TOKEN
Kyber Network Crystal (KNC) is an ERC-20 utility token and an integral part of Kyber Network. KNC is the first deflationary staking token where staking rewards and token burns are generated from actual network usage and growth in DeFi. The Kyber Network Crystal (KNC) is the backbone of the Kyber Network. It works to connect liquidity providers and those who need liquidity and serves three distinct purposes. The first of these is to collect transaction fees, and a portion of every fee collected is burned, which keeps KNC deflationary. Kyber Network Crystals (KNC), are named after the crystals in Star Wars used to power light sabers. The KNC also ensures the smooth operation of the reserve system in the Kyber liquidity since entities must use third-party tokens to buy the KNC that pays for their operations in the network. KNC allows token holders to play a critical role in determining the incentive system, building a wide base of stakeholders, and facilitating economic flow in the network. A small fee is charged each time a token exchange happens on the network, and KNC holders get to vote on this fee model and distribution, as well as other important decisions. Over time, as more trades are executed, additional fees will be generated for staking rewards and reserve rebates, while more KNC will be burned. - Participation rewards — KNC holders can stake KNC in the KyberDAO and vote on key parameters. Voters will earn staking rewards (in ETH) - Burning — Some of the network fees will be burned to reduce KNC supply permanently, providing long-term value accrual from decreasing supply. - Reserve incentives — KNC holders determine the portion of network fees that are used as rebates for selected liquidity providers (reserves) based on their volume performance. Finally, the KNC token is the connection between the Kyber Network and the exchanges, wallets, and dApps that leverage the liquidity network. This is a virtuous system since entities are rewarded with referral fees for directing more users to the Kyber Network, which helps increase adoption for Kyber and for the entities using the Network. And of course there will soon be a fourth and fifth uses for the KNC, which will be as a staking token used to generate passive income, as well as a governance token used to vote on key parameters of the network. The Kyber Network Crystal (KNC) was released in a September 2017 ICO at a price around $1. There were 226,000,000 KNC minted for the ICO, with 61% sold to the public. The remaining 39% are controlled 50/50 by the company and the founders/advisors, with a 1 year lockup period and 2 year vesting period. Currently, just over 180 million coins are in circulation, and the total supply has been reduced to 210.94 million after the company burned 1 millionth KNC token in May 2019 and then its second millionth KNC token just three months later. That means that while it took 15 months to burn the first million KNC, it took just 10 weeks to burn the second million KNC. That shows how rapidly adoption has been growing recently for Kyber, with July 2019 USD trading volumes on the Kyber Network nearly reaching $60 million. This volume has continued growing, and on march 13, 2020 the network experienced its highest daily trading activity of $33.7 million in a 24-hour period. Currently KNC is required by Reserve Managers to operate on the network, which ensures a minimum amount of demand for the token. Combined with future plans for burning coins, price is expected to maintain an upward bias, although it has suffered along with the broader market in 2018 and more recently during the summer of 2019. It was unfortunate in 2020 that a beginning rally was cut short by the coronavirus pandemic, although the token has stabilized as of April 2020, and there are hopes the rally could resume in the summer of 2020.
2.1 HOW ARE KNC TOKENS PRODUCED?
The native token of Kyber is called Kyber Network Crystals (KNC). All reserves are required to pay fees in KNC for the right to manage reserves. The KNC collected as fees are either burned and taken out of the total supply or awarded to integrated dapps as an incentive to help them grow.
2.2 HOW DO YOU GET HOLD OF KNC TOKENS?
Kyber Swap can be used to buy ETH directly using a credit card, which can then be used to swap for KNC. Besides Kyber itself, exchanges such as Binance, Huobi, and OKex trade KNC.
2.3 WHAT CAN YOU DO WITH KYBER?
The most direct and basic function of Kyber is for instantly swapping tokens without registering an account, which anyone can do using an Etheruem wallet such as MetaMask. Users can also create their own reserves and contribute funds to a reserve, but that process is still fairly technical one–something Kyber is working on making easier for users in the future.
2.4 THE GOAL OF KYBER THE FUTURE
The goal of Kyber in the coming years is to solidify its position as a one-stop solution for powering liquidity and token swapping on Ethereum. Kyber plans on a major protocol upgrade called Katalyst, which will create new incentives and growth opportunities for all stakeholders in their ecosystem, especially KNC holders. The upgrade will mean more use cases for KNC including to use KNC to vote on governance decisions through a decentralized organization (DAO) called the KyberDAO. With our upcoming Katalyst protocol upgrade and new KNC model, Kyber will provide even more benefits for stakeholders. For instance, reserves will no longer need to hold a KNC balance for fees, removing a major friction point, and there will be rebates for top performing reserves. KNC holders can also stake their KNC to participate in governance and receive rewards.
2.5 BUYING & STORING KNC
Those interested in buying KNC tokens can do so at a number of exchanges. Perhaps your best bet between the complete list is the likes of Coinbase Pro and Binance. The former is based in the USA whereas the latter is an offshore exchange. The trading volume is well spread out at these exchanges, which means that the liquidity is not concentrated and dependent on any one exchange. You also have decent liquidity on each of the exchange books. For example, the Binance BTC / KNC books are wide and there is decent turnover. This means easier order execution. KNC is an ERC20 token and can be stored in any wallet with ERC20 support, such as MyEtherWallet or MetaMask. One interesting alternative is the KyberSwap Android mobile app that was released in August 2019. It allows for instant swapping of tokens and has support for over 70 different altcoins. It also allows users to set price alerts and limit orders and works as a full-featured Ethereum wallet.
2.6 KYBER KATALYST UPGRADE
Kyber has announced their intention to become the de facto liquidity layer for the Decentralized Finance space, aiming to have Kyber as the single on-chain endpoint used by the majority of liquidity providers and dApp developers. In order to achieve this goal the Kyber Network team is looking to create an open ecosystem that garners trust from the decentralized finance space. They believe this is the path that will lead the majority of projects, developers, and users to choose Kyber for liquidity needs. With that in mind they have recently announced the launch of a protocol upgrade to Kyber which is being called Katalyst. The Katalyst upgrade will create a stronger ecosystem by creating strong alignments towards a common goal, while also strengthening the incentives for stakeholders to participate in the ecosystem. The primary beneficiaries of the Katalyst upgrade will be the three major Kyber stakeholders: 1. Reserve managers who provide network liquidity; 2. dApps that connect takers to Kyber; 3. KNC holders. These stakeholders can expect to see benefits as highlighted below: Reserve Managers will see two new benefits to providing liquidity for the network. The first of these benefits will be incentives for providing reserves. Once Katalyst is implemented part of the fees collected will go to the reserve managers as an incentive for providing liquidity. This mechanism is similar to rebates in traditional finance, and is expected to drive the creation of additional reserves and market making, which in turn will lead to greater liquidity and platform reach. Katalyst will also do away with the need for reserve managers to maintain a KNC balance for use as network fees. Instead fees will be automatically collected and used as incentives or burned as appropriate. This should remove a great deal of friction for reserves to connect with Kyber without affecting the competitive exchange rates that takers in the system enjoy. dApp Integrators will now be able to set their own spread, which will give them full control over their own business model. This means the current fee sharing program that shares 30% of the 0.25% fee with dApp developers will go away and developers will determine their own spread. It’s believed this will increase dApp development within Kyber as developers will now be in control of fees. KNC Holders, often thought of as the core of the Kyber Network, will be able to take advantage of a new staking mechanism that will allow them to receive a portion of network fees by staking their KNC and participating in the KyberDAO.
2.7 COMING KYBERDAO
With the implementation of the Katalyst protocol the KNC holders will be put right at the heart of Kyber. Holders of KNC tokens will now have a critical role to play in determining the future economic flow of the network, including its incentive systems. The primary way this will be achieved is through KyberDAO, a way in which on-chain and off-chain governance will align to streamline cooperation between the Kyber team, KNC holders, and market participants. The Kyber Network team has identified 3 key areas of consideration for the KyberDAO: 1. Broad representation, transparent governance and network stability 2. Strong incentives for KNC holders to maintain their stake and be highly involved in governance 3. Maximizing participation with a wide range of options for voting delegation Interaction between KNC Holders & Kyber This means KNC holders have been empowered to determine the network fee and how to allocate the fees to ensure maximum network growth. KNC holders will now have three fee allocation options to vote on: - Voting Rewards: Immediate value creation. Holders who stake and participate in the KyberDAO get their share of the fees designated for rewards. - Burning: Long term value accrual. The decreasing supply of KNC will improve the token appreciation over time and benefit those who did not participate. - Reserve Incentives:Value creation via network growth. By rewarding Kyber reserve managers based on their performance, it helps to drive greater volume, value, and network fees.
2.8 TRANSPARENCY AND STABILITY
The design of the KyberDAO is meant to allow for the greatest network stability, as well as maximum transparency and the ability to quickly recover in emergency situations. Initally the Kyber team will remain as maintainers of the KyberDAO. The system is being developed to be as verifiable as possible, while still maintaining maximum transparency regarding the role of the maintainer in the DAO. Part of this transparency means that all data and processes are stored on-chain if feasible. Voting regarding network fees and allocations will be done on-chain and will be immutable. In situations where on-chain storage or execution is not feasible there will be a set of off-chain governance processes developed to ensure all decisions are followed through on.
2.9 KNC STAKING AND DELEGATION
Staking will be a new addition and both staking and voting will be done in fixed periods of times called “epochs”. These epochs will be measured in Ethereum block times, and each KyberDAO epoch will last roughly 2 weeks. This is a relatively rapid epoch and it is beneficial in that it gives more rapid DAO conclusion and decision-making, while also conferring faster reward distribution. On the downside it means there needs to be a new voting campaign every two weeks, which requires more frequent participation from KNC stakeholders, as well as more work from the Kyber team. Delegation will be part of the protocol, allowing stakers to delegate their voting rights to third-party pools or other entities. The pools receiving the delegation rights will be free to determine their own fee structure and voting decisions. Because the pools will share in rewards, and because their voting decisions will be clearly visible on-chain, it is expected that they will continue to work to the benefit of the network.
After the September 2017 ICO, KNC settled into a trading price that hovered around $1.00 (decreasing in BTC value) until December. The token has followed the trend of most other altcoins — rising in price through December and sharply declining toward the beginning of January 2018. The KNC price fell throughout all of 2018 with one exception during April. From April 6th to April 28th, the price rose over 200 percent. This run-up coincided with a blog post outlining plans to bring Bitcoin to the Ethereum blockchain. Since then, however, the price has steadily fallen, currently resting on what looks like a $0.15 (~0.000045 BTC) floor. With the number of partners using the Kyber Network, the price may rise as they begin to fully use the network. The development team has consistently hit the milestones they’ve set out to achieve, so make note of any release announcements on the horizon.
The 0x project is the biggest competitor to Kyber Network. Both teams are attempting to enter the decentralized exchange market. The primary difference between the two is that Kyber performs the entire exchange process on-chain while 0x keeps the order book and matching off-chain. As a crypto swap exchange, the platform also competes with ShapeShift and Changelly.
• June 2020: Digifox, an all-in-one finance application by popular crypto trader and Youtuber Nicholas Merten a.k.a DataDash (340K subs), integrated Kyber to enable users to easily swap between cryptocurrencies without having to leave the application. • June 2020: Stake Capital partnered with Kyber to provide convenient KNC staking and delegation services, and also took a KNC position to participate in governance. • June 2020: Outlined the benefits of the Fed Price Reserve (FPR) for professional market makers and advanced developers. • May 2020: Kyber crossed US$1 Billion in total trading volume and 1 Million transactions, performed entirely on-chain on Ethereum. • May 2020: StakeWith.Us partnered Kyber Network as a KyberDAO Pool Master. • May 2020: 2Key, a popular blockchain referral solution using smart links, integrated Kyber’s on-chain liquidity protocol for seamless token swaps • May 2020: Blockchain game League of Kingdoms integrated Kyber to accept Token Payments for Land NFTs. • May 2020: Joined the Zcash Developer Alliance , an invite-only working group to advance Zcash development and interoperability. • May 2020: Joined the Chicago DeFi Alliance to help accelerate on-chain market making for professionals and developers. • March 2020: Set a new record of USD $33.7M in 24H fully on-chain trading volume, and $190M in 30 day on-chain trading volume. • March 2020: Integrated by Rarible, Bullionix, and Unstoppable Domains, with the KyberWidget deployed on IPFS, which allows anyone to swap tokens through Kyber without being blocked. • February 2020: Popular Ethereum blockchain game Axie Infinity integrated Kyber to accept ERC20 payments for NFT game items. • February 2020: Kyber’s protocol was integrated by Gelato Finance, Idle Finance, rTrees, Sablier, and 0x API for their liquidity needs. • January 2020: Kyber Network was found to be the most used protocol in the whole decentralized finance (DeFi) space in 2019, according to a DeFi research report by Binance. • December 2019: Switcheo integrated Kyber’s protocol for enhanced liquidity on their own DEX. • December 2019: DeFi Wallet Eidoo integrated Kyber for seamless in-wallet token swaps. • December 2019: Announced the development of the Katalyst Protocol Upgrade and new KNC token model. • July 2019: Developed the Waterloo Bridge , a Decentralized Practical Cross-chain Bridge between EOS and Ethereum, successfully demonstrating a token swap between Ethereum to EOS. • July 2019: Trust Wallet, the official Binance wallet, integrated Kyber as part of its decentralized token exchange service, allowing even more seamless in-wallet token swaps for thousands of users around the world. • May 2019: HTC, the large consumer electronics company with more than 20 years of innovation, integrated Kyber into its Zion Vault Wallet on EXODUS 1 , the first native web 3.0 blockchain phone, allowing users to easily swap between cryptocurrencies in a decentralized manner without leaving the wallet. • January 2019: Introduced the Automated Price Reserve (APR) , a capital efficient way for token teams and individuals to market make with low slippage. • January 2019: The popular Enjin Wallet, a default blockchain DApp on the Samsung S10 and S20 mobile phones, integrated Kyber to enable in-wallet token swaps. • October 2018: Kyber was a founding member of the WBTC (Wrapped Bitcoin) Initiative and DAO. • October 2018: Developed the KyberWidget for ERC20 token swaps on any website, with CoinGecko being the first major project to use it on their popular site.
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