We have a huge admiration for small businesses because they play an essential role in both our economy and our culture.
Infused with the unique personalities and perspectives of both owners and patrons alike, small businesses are integral to shaping the identity of communities far and wide.
They’re also built from the ground up by people with a dream and a vision. And that’s something Coinbase will always get behind.
For us, that support looks like this: making crypto as easy to use as possible so more money can find its way into the hands of small business owners rather than large banks and corporations. Coinbase Commerce, for example, illustrates how switching from traditional finance to crypto can provide tangible benefits and additional profits to business owners. If a business uses the Coinbase-managed version of Commerce to accept USDC, it would only incur a 1% transaction fee on the sale, as opposed to the 2.5% — 3.5% charged by most credit cards. The business owner can then convert the USDC into US Dollars and withdraw to a bank account for free, or they can leave it in their Coinbase account to earn rewards.
At first glance, that may seem like a small savings, but on hundreds or thousands of transactions per week, it adds up to a lot of money. Money we think would be better spent by owners reinvesting in themselves and helping their businesses grow and thrive.
That’s why we’re launching “We Accept Crypto,” an effort to raise awareness of small businesses that accept cryptocurrency as a form of payment.
Whether you’re a small business owner or a small business shopper, show your support for your community by participating in #WeAcceptCrypto.
Here’s how it works:
If you own or work at a small business that accepts crypto payments:
You can post on Instagram, Instagram Stories or Twitter with a picture of your business and tag it with #weacceptcrypto
Coinbase may feature your business on one of our social media platforms
Coinbase will send a link via DM to the first 1,000 businesses who post using the hashtag. Use the link to provide your shipping information and Coinbase will send you a complimentary window sticker for your business
If you shop at a small business who accepts crypto payments:
You can post on Instagram, Instagram Stories or Twitter with a picture of you supporting a small business that takes crypto and tag it with #shopcrypto
Coinbase may reshare your post on one of our social media platforms
Coinbase will send a link via DM to the first 1,000 shoppers who post using the hashtag. Use the link to provide your shipping information and Coinbase will send you a complimentary tote bag
Additionally, small businesses can right click + save our official “We Accept Crypto” badge below for free and add it to their websites or social channels, to show the world that it accepts crypto. Send us a screenshot if you do!
Terms and Conditions
Gift recipients must be based in the United States. Gift recipients must reply to their DM from Coinbase with their shipping information by midnight Pacific time on 11/30/21. Limit one gift per person and while supplies last.
#WeAcceptCrypto was originally published in The Coinbase Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.
Ethereum remained stable above $4,050 against the US Dollar. ETH could gain bullish momentum once it clears the $4,325 and $4,350 resistance levels.
Ethereum is showing a few positive signs above the $4,200 level.
The price is now trading above $4,200 and the 100 hourly simple moving average.
There was a break above a major bearish trend line with resistance near $4,205 on the hourly chart of ETH/USD (data feed via Kraken).
The pair could extend gains if there is a clear break above the $4,350 resistance zone.
Ethereum Price Is Recovering
Ethereum remained strong above the $4,050 support level, unlike bitcoin. ETH price formed a base and started a steady recovery wave above the $4,120 resistance zone.
There was a clear break above the $4,200 resistance zone and the 100 hourly simple moving average. Besides, there was a break above a major bearish trend line with resistance near $4,205 on the hourly chart of ETH/USD.
The pair climbed higher above the $4,300 resistance zone and formed a high near $4,386. It is now correcting gains below the $4,300 level. There was a break below the 23.6% Fib retracement level of the upward move from the $4,026 swing low to $4,386 high.
Source: ETHUSD on TradingView.com
Ether price is now trading above $4,200 and the 100 hourly simple moving average. An initial resistance on the upside is near the $4,300 level.
The first major resistance is near the $4,350 level. A close above the $4,300 and $4,350 levels could start a fresh increase in the near term. In the stated case, the price might rise towards the $4,450 level. Any more gains could lift the price towards the $4,500 barrier in the near term.
Fresh Drop in ETH?
If ethereum fails to start a fresh increase above the $4,350 level, it could start a fresh decline. An initial support on the downside is near the $4,220 level. There is also a connecting bullish trend line near $4,220 on the same chart.
The first key support is now forming near the $4,200 level. It is close to the 50% Fib retracement level of the upward move from the $4,026 swing low to $4,386 high. A downside break below the $4,200 support might push the price further lower.
Technical Indicators
Hourly MACD – The MACD for ETH/USD is losing pace in the bullish zone.
Hourly RSI – The RSI for ETH/USD is now near the 50 level.
Pennsylvania Senator Pat Toomey, one of the lawmakers who supported amending the language around crypto in the recently passed infrastructure law, said the United States should lead the world in the adoption of a central bank digital currency, or CBDC.
In a Tuesday interview with Bloomberg’s David Westin, Toomey said the U.S. dollar should have “the most sophisticated capabilities of any currency in the world” as the country could benefit from a digital dollar. However, the senator said the rollout of any U.S. central bank digital currency should not rely on the Federal Reserve as a traditional bank for retail accounts, citing issues with privacy.
“The idea of having a tokenized dollar that is capable of being exchanged on a peer-to-peer basis on a platform where developers can innovate and develop new products and services… I think there’s a strong case for that,” said Toomey.
The Pennsylvania senator added that he would vote in favor of Jerome Powell’s nomination for a second term as Fed chair. Toomey cited Powell’s role in stabilizing U.S. financial markets during the early months of the pandemic as well as the fact he’s been “in action for some time now.”
One of fifty Republican lawmakers currently serving in the Senate, Toomey is crossing partisan lines in supporting President Joe Biden’s nomination of Powell. At a time when party politics in the U.S. seemingly embeds itself in every piece of legislation put forth and the Democratic Party controls each chamber of Congress by only a slim majority, every vote counts when it comes to enacting policy.
Related: 8-word crypto amendment in infrastructure bill an ‘affront to the rule of law’
Toomey was behind a bipartisan effort to amend some of the provisions in the recently passed infrastructure law to not apply to developers, miners and others in the crypto space. The bill ultimately passed both the Senate and House without any clarification on crypto, but lawmakers introduced legislation on Thursday to “fix” its tax reporting requirements.
A guide to the multi-chain future, sidechains, and layer-2 solutions
Around the Block from Coinbase Ventures sheds light on key trends in crypto. Written by Justin Mart & Connor Dempsey.
As of late 2021, Ethereum has grown to support thousands of applications from decentralized finance, NFTs, gaming and more. The entire network settles trillions of dollars in transactions annually, with over $170 billion locked on the platform.
But as the saying goes, more money, more problems. Ethereum’s decentralized design ends up limiting the amount of transactions it can process to just 15 per second. Since Ethereum’s popularity far exceeds 15 transactions per second, the result is long waits and fees as high as $200 per transaction. Ultimately, thisprices out many users and limits the types of applications Ethereum can handle today.
If smart-contract based blockchains are to ever grow to support finance and Web 3 applications for billions of users, scaling solutions are needed. Thankfully, the cavalry is beginning to arrive, with many proposed solutions coming online recently.
In this edition of Around The Block, we explore the crypto world’s collective quest to scale.*
To compete or to complement?
The goal is to increase the number of transactions that openly accessible smart contract platforms can handle, while retaining sufficient decentralization. Remember, it would be trivial to scale smart contract platforms through a centralized solution managed by a single entity (Visa can handle 45,000 transactions per second), but then we’d be right back to where we started: a world owned by a handful of powerful centralized actors.
The approaches being taken to fix this problem come twofold: (1) build brand new networks competitive to Ethereum that can handle more activity, or (2) build complementary networks that can handle Ethereum’s excess capacity.
Broadly, they break out across a few categories:
Layer 1 blockchains (competitive to Ethereum)
Sidechains (somewhat complementary to Ethereum)
Layer 2 networks (complementary to Ethereum)
While each differs in architecture and approach, the goal is the same: let users actually use the networks (eg, interact with DeFi, NFTs, etc) without paying exorbitant fees or experiencing long wait times.
Layer 1s
Ethereum is considered a layer 1 blockchain — an independent network that secures user funds and executes transactions all in one place. Want to swap 100 USDC for DAI using a DeFi application like Uniswap? Ethereum is where it all happens.
Competing layer 1s do everything Ethereum does, but in a brand new network, soup to nuts. They’re differentiated by new system designs that enable higher throughput, leading to lower transaction fees, but usually at the cost of increased centralization.
New layer 1s have come online in droves over the last 10 months, with the aggregate value on these networks rocketing from $0 to ~$75B over the same time period. This field is currently led by Solana, Avalanche, Terra, and Binance Smart Chain, each with growing ecosystems that have reached over $10 billion in value.
Leading non-ETH L1s by TVL
All layer 1s are in competition to attract both developers and users. Doing so without any of Ethereum’s tooling and infrastructure that make it easy to build and use applications, is difficult. To bridge this gap, many layer 1s employ a tactic called EVM compatibility.
EVM stands for the Ethereum Virtual Machine, and it’s essentially the brain that performs computation to make transactions happen. By making their networks compatible with the EVM, Ethereum developers can easily deploy their existing Ethereum applications to a new layer 1 by essentially copying and pasting their code. Users can also easily access EVM compatible layer 1s with their existing wallets, making it simple for them to migrate.
Take Binance Smart Chain (BSC) as an example. By launching an EVM compatible network and tweaking the consensus design to enable higher throughput and cheaper transactions, BSC saw usage explode last summer across dozens of DeFi applications all resembling popular Ethereum apps like Uniswap and Curve. Avalanche, Fantom, Tron, and Celo have also taken the same approach.
Conversely, Terra and Solana do not currently support EVM compatibility.
TVL of EVM compatible vs non-EVM compatible L1s
Interoperable Chains
In a slightly different layer 1 bucket are blockchain ecosystems like Cosmos and Polkadot. Rather than build new stand-alone blockchains, these projects built standards that let developers create application specific blockchains capable of talking to each other. This can allow, for example, tokens from a gaming blockchain to be used within applications built on a separate blockchain for social networking.
There is currently over $100B+ sitting on chains built using Cosmos’ standard that can eventually interoperate. Meanwhile, Polkadot recently reached a milestone that will similarly unite its ecosystem of blockchains.
In short, there’s now a diverse landscape of direct Ethereum competitors, with more on the way.
Sidechains
The distinction between sidechains and new layer 1s is admittedly a fuzzy one. Sidechains are very similar to EVM-compatible layer 1s, except that they’ve been purpose built to handle Ethereum’s excess capacity, rather than compete with Ethereum as a whole. These ecosystems are closely aligned with the Ethereum community and host Ethereum apps in a complementary fashion.
Axie Infinity’s Ronin sidechain is a prime example. Axie Infinity is an NFT game originally built on Ethereum. Since Ethereum fees made playing the game prohibitively expensive, the Ronin sidechain was built to allow users to move their NFTs and tokens from Ethereum to a low fee environment. This made the game affordable to more users, and preceded an explosion in the game’s popularity.
As of this writing, users have moved over $7.5B from Ethereum to Ronin to play Axie Infinity.
Polygon POS
Where sidechains like Ronin are application specific, others are suited for more general purpose applications. Right now, Polygon’s proof-of-stake (POS) sidechain is the industry leader with nearly $5B in value deployed over 100 DeFi and gaming applications including familiar names like Aave and Sushiswap, as well as a Uniswap clone called Quickswap.
Again, Polygon POS really doesn’t look that different from an EVM compatible layer-1. However, it’s been built as part of a framework to scale Ethereum rather than compete with it. The Polygon team sees a future where Ethereum remains the dominant blockchain for high value transactions and value storage, while everyday transactions move to Polygon’s lower-cost blockchains. (Polygon POS also maintains a special relationship with Ethereum through a process known as checkpointing).
With transaction fees of less than a penny, Polygon’s vision of the future looks plausible. And with the help of incentive programs, users have flocked to Polygon POS with daily transactions surpassing Ethereum (though spam transactions inflate this number).
Layer 2s (Rollups)
Layer 1s and sidechains both have a distinct challenge: securing their blockchains. To do so, they must pay a new cohort of miners or proof of stake validators to verify and secure transactions, usually in the form of inflation from a base token (e.g. Polygon’s $MATIC, Avalanche’s $AVAX).
However, this brings notable downsides:
Having a base token naturally makes your ecosystem more competitive rather than complementary to Ethereum
Validating and securing transactions is a complex and challenging task that your network is responsible for indefinitely
Wouldn’t it be nice if we could create scalable ecosystems that borrowed from Ethereum’s security? Enter layer 2 networks, and “rollups” in particular. In a nutshell, layer 2s are independent ecosystems that sit on top of Ethereum in such a way that relies on Ethereum for security.
Critically, this means that layer 2s do not need to have a native token — so not only are they more complementary to Ethereum, they are essentially part of Ethereum. The Ethereum roadmap even pays homage to this idea by signaling that Ethereum 2.0 will be “rollup centric.”
How rollups work
Layer 2s are commonly called rollups because they “rollup” or bundle transactions together and execute them in a new environment, before sending the updated transaction data back to Ethereum. Rather than have the Ethereum network process 1,000 Uniswap transactions individually (expensive!), the computation is offloaded on a layer 2 rollup before submitting the results back to Ethereum (cheap!).
However, when results are posted back to Ethereum, how does Ethereum know that the data is correct and valid? And how can Ethereum prevent anyone from posting incorrect information? These are critical questions that differentiate the two types of rollups: Optimistic rollups, and Zero Knowledge rollups (ZK rollups).
Optimistic Rollups
When submitting results back to Ethereum, optimistic rollups “optimistically” assume that they’re valid. In other words, they let the operators of the rollup post any data they want (including potentially incorrect / fraudulent data), and just assume it’s correct — an optimistic outlook no doubt! But there are ways to fight fraud. As a check and balance, there is a window of time after any withdrawal where anyone watching can call out fraud (remember blockchains are transparent, anyone can watch what’s happening). In the event that one of these watchers can mathematically prove that fraud occurred (by submitting a fraud proof), the rollup reverts any fraudulent transactions and penalizes the bad actor and rewards the watcher (a clever incentive system!).
The drawback is a brief delay when you move funds between the rollup and Ethereum, waiting to see if any watchers catch any fraud. In some cases this can be up to a week, but we expect these delays to come down over time.
The key point is that optimistic rollups are intrinsically tied to Ethereum and ready to help Ethereum scale today. Accordingly, we’ve seen strong nascent growth with many leading DeFi projects moving to the leading optimistic rollups — Arbitrum and Optimistic Ethereum.
Arbitrum & Optimistic Ethereum
Arbitrum (by Off-chain Labs) and Optimistic Ethereum (by Optimism) are the two main projects implementing optimistic rollups today. Notably, both are still in their early stages, with both companies maintaining levels of centralized control but with plans to decentralize over time.
It’s estimated that once mature, optimistic roll ups can offer anywhere from a 10–100x improvement in scalability. Even in their early days, DeFi applications on Arbitrum and Optimism have already accrued billions in network value.
Optimism is earlier in its adoption curve with over $300M in TVL deployed across 7 DeFi applications, most notably Uniswap, Synthetix, and 1inch.
Arbitrum is further along, with around $2.5B in TVL across 60+ applications including familiar DeFi protocols like Curve, Sushiswap, and Balancer.
Aribtrum has also been selected as Reddit’s scaling solution of choice for their long awaited efforts to tokenize community points for the social media platform’s 500 million monthly active users.
ZK Rollups
Where optimistic rollups assume the transactions are valid and leave room for others to prove fraud, ZK rollups do the work of actually proving to the Ethereum network that transactions are valid.
Along with the results of the bundled transactions, they submit what’s called a validity proof to an Ethereum smart contract. As the name suggests, validity proofs let the Ethereum network verify that the transactions are valid, making it impossible for the relayer to cheat the system. This eliminates the need for a fraud proof window, so moving funds between Ethereum and ZK-rollups is effectively instant.
While instant settlement and no withdrawal times sound great, ZK rollups are not without tradeoffs. First, generating validity proofs is computationally intensive, so you need high powered machines to make them work. Second, the complexity surrounding validity proofs makes it more difficult to support EVM compatibility, limiting the types of smart contracts that can be deployed to ZK-rollups. As such, optimistic rollups have been first to market and are more capable of addressing Ethereum’s scaling woes today, but ZK-rollups may become a better technical solution in the long run.
ZK Rollup Adoption
The ZK rollup landscape runs deep, with multiple teams and implementations in the works and in production. Some prominent players include Starkware, Matter Labs, Hermez, and Aztec. Today, ZK-rollups mainly support relatively simple applications such as payments or exchanges (owing to limitations on what types of applications ZK-rollups can support today). For example, derivatives exchange dYdX employs a ZK rollup solution from Starkware (StarkEx) to support nearly 5 million weekly transactions and $1B+ in TVL.
The real prize however, is ZK rollup solutions that are fully EVM compatible and thus capable of supporting popular general applications (like the full suite of DeFi apps) without the withdrawal delays of optimistic rollups. The main players in this realm are MatterLab’s zkSync 2.0, Starkware’s Starknet, Polygon Hermez’s zkEVM, and Polygon Miden, which are all currently working towards mainnet launch. (Aztec, meanwhile, is focused on applying zk proofs to privacy).
Many in the industry (Vitalik included) are looking at ZK rollups in conjunction with Ethereum 2.0 as the long term solution to scaling Ethereum, mainly stemming from their ability to fundamentally handle hundreds of thousands of transactions per second without compromising on security or decentralization.The upcoming rollouts of fully EVM compatible ZK rollups will be one of the key things to watch as the quest to scale Ethereum progresses.
A fragmenting world
In the long run, these scaling solutions are necessary if smart contract platforms are to scale to billions of users. In the near term, these solutions, however, may present significant challenges for users and crypto operators alike. Navigating from Ethereum to these networks requires using cross-chain bridges, which is complex for users and carries latent risk. For example, several cross-chain bridges have already been the target of $100+ million dollar exploits.
More importantly, the multi-chain world fragments composability and liquidity. Consider that Sushiswap is currently implemented on Ethereum, Binance Smart Chain, Avalanche, Polygon, and Arbitrum. Where Sushiswap’s liquidity was once concentrated on one network (Ethereum), it’s now spread across five different networks.
Ethereum applications have long benefited from composability — i.e. Sushiswap on Ethereum is plug-and-play with other Ethereum apps like Aave or Compound. As applications spread out to new networks, an application implemented on one layer 1/sidechain/layer 2 is no longer composable with apps implemented on another, limiting usability and creating challenges for users and developers.
An uncertain future
Will new layer 1s like Avalanche or Solana continue to grow to compete with Ethereum? Will blockchain ecosystems like Cosmos or Polkadot proliferate? Will sidechains continue to run in harmony with Ethereum, taking on its excess capacity? Or will rollups in conjunction with Ethereum 2.0 win out? No one can say for sure.
While the future is uncertain, everyone can take solace in the knowledge that there are so many smart teams dedicated to tackling the most challenging problems that open, permissionless networks face. Just as broadband ultimately helped the internet support a host of revolutionary applications like YouTube and Uber, we believe that we’ll eventually look at the winning scaling solutions in the same light.
* This post focuses on scaling smart-contract based blockchains. Bitcoin scaling is best saved for a future post.
Scaling Ethereum & crypto for a billion users was originally published in The Coinbase Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.
While DeFi promises a world where people can transfer their money without the hassle and transaction fees of banks, anybody who has tried to convert ETH to BNB recently knows it’s not so simple.
Gas fees make cross-chain transactions very expensive, hindering the free flow of crypto assets.
So, it is not surprising that cross-chain bridges have grown at an unprecedented rate, a TVL increase of 89% MoM in October as DeFi transaction volume booms in the bull market.
However, did you know that cross-chain bridges solve other problems besides, what are essentially crypto transaction fees?
As multi-chain projects and interoperability become key components of the industry, DeFi investors need to understand how cross-chain bridges work.
DeFi TVL (since January 2021) Data source: Footprint Analytics
DeFi TVL Ranking by BlockChain (since Jan 2021) Data source: Footprint Analytics
This article will look into the nature of cross-chain bridges, specifically:
How does a cross-chain bridge work?
Cross-chain bridges’ market performance.
Problems addressed by cross-chain bridges.
Selecting a cross-chain bridge.
What Is a Cross-Chain Bridge?
A cross-chain bridge or a blockchain bridge enables the transfer of tokens, assets, smart contract instructions, or data between blockchains. Two chains may have different protocols, rules, and governance models, but a cross-chain bridge connects these disparate blockchains together by interoperating securely.
A cross-chain bridge allows users to:
Deploy digital asset transactions fast and easy;
Enjoy low operational difficulty;
Take advantage of lower transfer fees on non-scalable blockchains;
Implement dApps across multiple platforms.
Here is an example of how cross-chain assets are transferred with a bridge:
When a user needs to convert an asset such as an ERC20 A token on Ethernet into another asset such as BEP20 A token on the BSC chain via AnySwap, the ERC20 A will be locked on the source chain and then notify the bridge to generate the BEP20 A on the BSC chain before sending it to the user.
In this example, the entire operation of the cross-chain bridge takes about five to 20 minutes, with an approximate gas fee in the range of $10 to $20, depending on the pre-congestion conditions in Ethereum at the time.
Data source: anyswap.exchange
How Has Crosslink Bridge Performed Recently?
The market is currently dominated mostly by Layer 2 scale-out cross-chain bridges, which are mainly built on Ethereum for better interconnection and interoperability.
According to Footprint, the TVL of cross-chain bridges was $16.2 billion as of Oct. 26, which is an increase of over 72.25% in the last 30 days. The four largest cross-chain bridges namely, Avalanche Bridge, Polygon Bridge, Arbitrum Bridge and Fantom Anyswap Bridge, account for 95.61% of the entire cross-chain bridge, with its highest monthly increase of 401.23% last month.
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Data from the CoinTofu Cross-ChainBridge tool, reveal that these four cross-chain bridges have excellent user experience ratings.
TVL & share distribution across- chain bridges (since Apr 2021) Data source: Footprint Analytics
Ethereum Bridges TVL Ranking & Change Data source: Footprint Analytics
The above chart shows that Optimism has had the most active deposits from the beginning of September to yesterday, followed by Avalanche. Current transfer fees are as low as $0.25 (according to L2 Fees) and their transfer fees are variable, but with relatively small changes.
Ethereum Bridge Daily Unique Depositors (since June 2021) Data source: Footprint Analytics
The main asset traded on cross-chain bridges is ETH (WETH), with total ETH lock-ups on the 15 cross-chain bridges valued at $6.882 billion as of Oct. 26. This represents approximately 42.6% of total lock-ups and the most used asset by investors, followed by WBTC and stablecoin USDC.
Asset Distribution- Tree Map Data source: Footprint Analytics
What Problems Do Cross-Chain Bridges Address?
Cross-chain bridges create growth across chains (reflected by Fantom and Avalanche prices, which hit gains of 12% and 18%, respectively, in the first week of November) that offer disparate asset interoperability, which is a high level of security and a better asset rendition.
Without a bridge, investors have to go through different exchanges and incur larger fees instead.
Cross-chain bridges also address the following:
Lower gas costs with increased transaction speeds;
User assets can be freely interacted with for a high user experience;
Improved productivity and usefulness of existing crypto assets;
Higher security and better privacy.
The use of cross-chain bridges is appropriate in the following scenarios:
Token transfers between Ethereum and a Layer 2 network, with assets interoperable across chains, such as faster and easier deposit of funds, withdrawal of assets and exit times to reduce operational complexity;
High fees and use in times of Ethereum congestion;
Thin assets supported by single chains and more assets supported by cross-chain bridges;
Investors can use cross-chain bridges when investing in new chains to get to the head mine faster, but need to assess the full mechanics of the new chain and its security;
Arbitrage trading across the DEX on Optimism, Arbitrum and Polygon, etc.
How to Choose the Right Cross-Chain Bridge
Consider the following criteria when selecting a cross-chain bridge:
A stable TVL exceeding USD$1 billion with a sound cross-chain mechanism and a credible execution environment reflected by gradual changes instead of abrupt fluctuations. Verification method of cross-chain information and management method of cross-chain funds must be taken into account;
Reasonable transfer costs (from USD$1 to USD$5) across the chain and interaction speeds with an estimated arrival time of 10 to 30 minutes;
Security to ensure against hackers that take advantage of vulnerabilities.
In addition, there are also a number of aggregation tools that offer a one-stop cross-chain bridge solution, of which CoinTofu has a better overall experience in terms of reaching the cross-chain page with one click and displaying the advantages of supported cross-chain bridges, estimated arrival times, transaction fees and user experience ratings.
Data source:cointofu.com
Conclusion
With the development of the DeFi industry, cross-chain bridges have become more popular than traditional exchanges. They enable interoperability and mutual integration of blockchain applications to support project owners, various blockchains, and investors as well as address the problem of capital flow and lower transaction costs to users.
Maxine Smith, a crypto writer from Singapore and a DeFi data analyst with a focus on market trends and regulations.
There are now over 100 million wallet addresses in the world, and the number of crypto and non-fungible token (NFT) enthusiasts keeps growing every day. The crypto community has economic power, interlinking relationships and seamless communication potential, but why doesn’t it have its own social media? A truly native crypto- and NFT-dedicated social media platform with a high density of fans has not yet been born.
For crypto markets to grow in sizeand participants, there needs to be increased trust. For those who aren’t crypto native, the landscape can be bewildering. There are also dangers from scammers and spammers. It’s hard to fully protect users from these bad actors, but one way is to create a venue where they can get accurate information and not get played — a dedicated public opinion forum and social media platform for crypto communities.
Furthermore, the current model of social media is inherently extractive. The platforms take their customers’ data and sell it on, while serving them increasingly intrusive advertising. As the saying goes: Users aren’t paying for social media; they are the product. This must change, and one way is through a fusion of social and finance (SocialFi), which puts the economics back in the hands of users.
SocialFi aims to deliver benefits and rewards to users through the financialization and tokenization of social influence. Monaco Planet is a next-generation SocialFi platform that successfully completed its first round of multi-million-dollar financing with Three Arrows Capital and IMO Ventures. It goes live on Nov. 28.
Monaco Planet attacks the problem of spammers and scammers by requiring login through wallets such as MetaMask. Because users can showcase their NFT collections on their personal profile page, their level of engagement and dedication identifies true influencers. Users who publish and show their own activities can follow verified key opinion leaders (KOL) throughout the community. The platform can also rank users by net worth and influence of their NFTs, fostering organic connections between KOLs and users.
By introducing the concept of write-to-earn, content creation itself serves as a form of mining. Active content creators and discussion participants on Monaco Planet continuously reap the benefits in the form of native tokens. Most native tokens will be distributed to users who generate content, creating a form of mining that is sustainable, inclusive and genuinely productive.
A true SocialFi platform belongs to its users. And as the vast majority of Monaco Planet’s native currency will be distributed to users as rewards for content creation, Monaco Planet functions as a true decentralized autonomous organization, governed by native token holders who can send in proposals and vote. As a SocialFi platform, the ownership and governance of Monaco Planet are determined by the users themselves. Moreover, holders of native tokens will enjoy the currency appreciation brought by the platform’s growing economic activity.
As early users of Monaco Planet’s SocialFi platform, NFT holders will be the initial beneficiaries of content mining. They will enjoy the first batch of airdrops and act as mining leads during the first month of invitation-only membership. NFT holders will have exclusive quotas and whitelists for participating in popular projects and the privilege of increased visibility of posts, broadcasting and building groups.
Monaco Planet’s SocialFi makes it clear: Influence you can trust is now a currency that can be minted.
You can learn more about Monaco Planet at monaconft.io, follow the project on Twitter and join the conversation on Discord.
Some believe that 2021 will be the year of ‘dogs’ for cryptocurrency. Dogecoin (DOGE) and Shiba Inu (SHIB), the canine combo, lead the meme currency pack in terms of price and market value. DOGE has increased almost 8,000 percent since the beginning of the year and is ranked #9 by market value on CoinMarketCap as of November 2021. SHIB, its opponent, has pumped more than 60,000,000% since January.
Things move quickly in the meme coin world, as they do in most internet jokes because nobody cares about anything they read on social media for more than a few minutes. This means that coins must be generated quickly in order to be classified as a meme currency rather than simply another random coin. In this article, we will discuss Meme tokens, their good side, bad side and their future.
What Are Meme Coins?
Meme coins are cryptocurrencies that have garnered a lot of attention in a short period of time, mainly due to influencers and retail investors pushing them online. People are doing a debate on several meme coins like Safemoon vs Shiba Inu or Shib vs Doge etc.
Dogecoin is the first meme coin, having been developed in 2013 as a joke based on a meme. It gained popularity once Elon Musk began tweeting about it, and regular investors began purchasing it in droves.
Developers have launched a spate of joke currencies after Dogecoin since anybody can build a new cryptocurrency. Many of these currencies are Dogecoin spinoffs, such as Shiba Inu, but there are dozens of additional meme coins to choose from.
Dogecoin Overview
Dogecoin is crypto similar to Bitcoin and Ethereum, but it’s not the same as either of these prominent coins. Dogecoin was named after a once-popular meme and was founded, at least in part, as a lighthearted joke for
Meggie Nahatakyan
cryptocurrency aficionados. Despite its strange genesis story, Dogecoin has skyrocketed in popularity in 2021, becoming the sixth-largest cryptocurrency by market valuation as of writing.
Billy Marcus and Jackson Palmer, two software programmers, invented Dogecoin in late 2013. Palmer created the cryptocurrency’s logo by mistyping the term “doge” to represent a Shiba Inu dog, a popular joke at the time.
Shiba Inu Overview
Shiba Inu is an Ethereum-based altcoin (an alternative cryptocurrency to Bitcoin) using the Shiba Inu, a Japanese breed of hunting dog, as its symbol. Shiba Inu is widely regarded as a viable alternative to Dogecoin; in fact, Shiba Inu supporters refer to it as “the Dogecoin killer.”
Shiba Inu and Dogecoin are meme coins, which are cryptocurrencies connected with a theme, in the instance of Shiba Inu and Dogecoin, the Shiba Inu dog, but they’re more often made as a prank or inside joke than as a legitimate digital product. While Dogecoin was established in December 2013, Ryoshi, an unidentified individual or group, invented Shiba Inu in August 2020.
Cryptocurrency vs Meme Coins
Meme coins are a sort of cryptocurrency, however, there is one significant distinction between cryptocurrencies and meme coins, and that difference is mostly the aim.
Bitcoin and Ethereum, two major cryptocurrencies, were created to answer real-world issues. The ultimate objective is for it to be widely accepted by merchants, resulting in the creation of a new kind of decentralized currency that will revolutionize a range of sectors.
Meme coins, on the other hand, currently serve no real-world use, and the majority of them were established for profit. Many investors sell quickly once their prices rise in order to earn a rapid profit. Because meme coins now have no practical utility.
Meme Coins Good Sides
When Dogecoin originally appeared in 2013, it was thought to be a prank. No one imagined this coin could be anything other than a meme, even in their wildest imaginations. Doge is now worth $100,000 if you purchased it for $1,000 last year. Consider those who bought Dogecoin in 2013 because they thought it was a joke (or simply for fun).
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If you put more than $1,000 into it, you’ll get a better return. Doge has proven to be one of the most profitable cryptocurrencies in history, and it is still bringing money to individuals. This is not a coincidence. Nowadays, investors are pouring money into Meme currencies, with Shiba Inu being the most recent example, reaching an all-time high in November 2021.
Meme Coins Bad Ugly Sides
Meme coins may have experienced exponential growth in 2021, but trading and investing in meme coins, like other cryptocurrencies, entails significant financial risk.
Meme coin tokenomics might be worrisome. Bitcoin has a deflationary tendency, a blockchain, a well-written whitepaper, and an established ecosystem. In comparison to Bitcoin, most meme currencies are inflationary and have no limit on supply. The community’s collective humour frequently determines its ecology, use cases, and basics. Only a handful of meme coins have been created using major cryptocurrency technologies. DOGE, for example, got its technology from Litecoin (LTC), whereas SHIB was constructed on the Ethereum network.
As the meme coin market grows, you should be cautious that certain projects may try to take advantage of the enthusiasm to defraud traders. For example, in only one week, Squid Game (SQUID), a meme currency based on the famous Netflix program of the same name, increased by almost 86,000%. The development team, on the other hand, immediately rug-pulled, causing the price to collapse by 99%. Worse, holders have been barred from selling their SQUID tokens.
Meme Coin Future
It might be difficult to predict if a meme coin will be bullish or bearish. Meme currencies often lack a market value and a high circulating quantity, making them very inexpensive and easy to get. Because meme currencies are frequently inexpensive and easy to obtain, there are several other aspects to consider while predicting the future of any meme currency.
The growing popularity of meme tokens and dogecoins is being fueled in part by social media. Elon Musk is one of the market factors that has frequently been indirectly impacting the price fluctuations of DOGE and Floki Inu (FLOKI) via erratic Twitter updates.
Such an attitude might be immensely destructive to cryptocurrencies in the long term. This might reverse the industry’s overall trajectory toward pushing the financial world towards an even more gloomy future.
Nonetheless, new meme tokens and dog coins join the market on a daily basis, and regular investors tend to purchase them with the aim of replicating the profits made by DODGE and SHIB in the past. In fact, the excitement around dogecoins has developed to the point that it is apparently driving demand for genuine dogs.
Are They Worth the Investment?
Even the most experienced investors face ups and downs while investing in meme coins. However, by finding out and implementing the proper knowledge, one may limit the dangers while maximizing profits. There are thousands of meme currencies to choose from, and the vast majority of them are frauds. As a result, in order to compete in this market, you must be at your best.
The reality is that diamonds may be found amid stones; you simply have to know where to look and how to look. These particular meme coins have the potential to create 1000 for early investors.
Before investing in any meme currency, spend some time researching the token’s community to learn about the creators’ priorities. Do they have a long-term plan for community building and long-term growth? Are they more interested in raising the price and pressuring consumers to buy? The former is a positive thing, whilst the latter is a warning sign. Additionally, it would be helpful if you could find out whether the initiative has a whitepaper outlining its true goal and objective.
Final Thoughts
With new meme currencies hitting the market every day and traders seeking to emulate DOGE and SHIB’s earnings, it is crucial to DYOR before investing in any meme currency. Remember that meme coins are quite volatile compared to other digital currencies. Trading or investing in cryptocurrency is fraught with danger. Meme coins are heavily community-driven and may fall abruptly, so never invest money you can’t afford to lose.
Meggie Nahatakyan, Crypto Analyst at the Top Coins.
The crypto space is becoming more and more interoperable, developers in search of great adoption and success will need to embrace this trend. Amongst the ruling blockchains, Polkadot and its unique approach to governance and interoperability are quickly becoming the hub for the projects that could usher the future of the industry.
Unlike Ethereum, Cardano, and other blockchains, Polkadot leverages a distinctive mechanism that lets the community choose the projects that will occupy limited slots on the network. To participate in the auctions, projects need to gather enough funds.
Once the process is completed, winning projects will be deployed via parachains, independent networks that power the protocols. This process has already unleashed a fearful competition with many projects, such as Moonbeam, Bifrost, Astar Network, and Litentry going strong to take the lead.
Most of these projects offer a steady reward to gain community support and win the auction. Astar has introduced a 3-bonus level for its supporters with 5% of its native token ASTR locked as part of their Crowdloan.
On the other hand, Moonbeam offers uses a portion of a 30% Crowdloan pool, but investors must wait until the project deploys its compatibility with the Ethereum Virtual Machine (EVM). Also, 70% of the rewards will be distributed in the 96 weeks leasing period for the slot.
Of the aforementioned projects, the Crowdloan launch by decentralized identity aggregation protocol Litentry offers a dynamic and versatile program with adaptive rewards, bonuses, and other opportunities for its supporters.
On top of that, participants will be able to stake their DOTs without extra requirements or complications. The Litentry Network will connect its parachain to the Polkadot relay chain. In doing so, it will provide users with more security and interoperability.
Already running on Ethereum and Binance Smart Chain with its own native token called LIT, giving it an advantage over similar projects trying to get a slot on Polkadot, the recently launch Crowdloan strategies are a major step for the network.
The project has been listed on the leading crypto exchange Binance for a long time and has a strong liquidity base. Thus, investors have an additional layer of security and can rely on the legitimacy of the project.
The project has allocated 20% of LIT’s total supply or 20,000,000 to incentivize users and reward its supporters to obtain a superior position and a higher chance to obtain a slot in the Polkadot auction. The program will be live from the first slot to the fifth auction and will remain active until Litentry secures a place on the network.
Litentry Offers The Best Rewards On The Polkadot Ecosystem
By allocating 20% of the LIT token total supply in the Crowdloan Program, Litentry offers DOT holders one of the best low-risk/high reward strategies to diversify their portfolio. In that way, investors will have an additional opportunity to profit other than staking their DOT.
In order to participate in the Crowdloan Program, investors need to lock 5 DOTs for the auction. This initial investment will be rewarded with a minimum of 2.5 LIT.
Later, final rewards will be estimated based on the contribution percentage of every user to the Crowdloan pool. In other words, one user’s DOT contribution will be divided by the total DOT contributions in the pool.
These rewards will be distributed when the Litentry parachain running on the Polkadot relay chain goes live. Each investor will receive their LIT rewards linearly in each block for the duration of the Slot leasing period: 96 weeks.
Even if the project fails to secure a slot, investors will still be compensated in the new Crowdloan campaign with additional LIT tokens until the program’s target is met. Compensations will reach an estimated 13% APY for a Crowdloan period of 5 weeks.
For early supporters, there will be a bonus of up to 10% if they support the campaign before November 18 or 5% if they participate by November 25. Also, users can earn extra rewards if they complete an identity-based task and support Litentry Network’s main use case. Users can also earn extra incentives through several of Litentry’s partners, including the SubDAO airdrop, a Binance warmup promotion, and an all-new partnership with Polkadot Name System that earns users who contribute more than 10 DOT with a free .dot domain name.
Although beneficial, Polkadot’s staking rewards have a much lower upside than betting on the growth of its ecosystem. A project such as Litentry network, with a high interoperable capacity and a use poised to see an increase in demand, as more people require an alternative to centralize data and identity systems.
Therefore, the Crowdloan Reward Program is a great chance for early investors to fully capture Litentry’s potential to become a top project on one of the most promising ecosystems in the space. At the same time, these investors will maintain their capacity to move between blockchains.
Bitcoin (BTC) is witnessing a tough tussle near the $58,000 mark but that has not stopped select altcoins from hitting a new all-time high. This shows that traders are watching the fundamental developments on individual coins.
One of the recent top performing major altcoins has been Avalanche (AVAX), which has soared more than 120% in November. The coin caught traders’ attention leading up to the announcement by accounting firm Deloitte which plans to build its disaster relief platforms on the Avalanche blockchain.
Crypto market data daily view. Source:Coin360
In another step that shows growing crypto adoption, El Salvador’s President Nayib Bukele announced the launch of Bitcoin city, which will be powered by geothermal energy and initially funded by $1 billion worth of Bitcoin bonds.
Could strong buying at lower levels boost Bitcoin above $60,000 and will altcoins participate in the recovery? Let’s study the charts of the top-5 cryptocurrencies that could attract traders’ attention in the short term.
BTC/USDT
Bitcoin reversed direction from $55,600 on Nov. 19 but the recovery is facing resistance at the 50-day simple moving average ($60,187). The moving averages are on the verge of a bearish crossover and the relative strength index (RSI) is in the negative area, indicating that bears are making a strong comeback.
BTC/USDT daily chart. Source: TradingView
If the price turns down from the current level, the bears will attempt to extend the correction by pulling the BTC/USDT pair below $55,600. If that happens, the next stop could be the strong support zone at $52,500 to $50,000.
If the price rebounds off this zone, the bulls will try to push the pair above the moving averages and the downtrend line. Such a move will indicate that the corrective phase may be over. The bulls will then try to drive the price above the all-time high at $69,000.
Alternatively, a break below the psychological support at $50,000 could intensify selling as traders rush to the exit. The pair could then drop to $45,000 and later to $40,000.
BTC/USDT 4-hour chart. Source: TradingView
The 4-hour chart shows that bears pulled the price below the strong support at $58,000 but they could not build upon this advantage. The bulls bought the dip and have pushed the price back above the 20-exponential moving average.
If the price sustains above $58,000, the pair could rally to the downtrend line. A break and close above this resistance could indicate that bulls have the upper hand. The pair could then rally to $62,000 and later to $67,000.
Conversely, if the price turns down from the current level and breaks below $55,600, it will signal the possible start of a deeper correction.
AVAX/USDT
Avalanche is in a strong uptrend and has consistently been making new highs for the past few days. The bulls pushed the price above the 200% Fibonacci extension level at $146.18 today but the long wick on the day’s candlestick shows profit-booking at higher levels.
AVAX/USDT daily chart. Source: TradingView
The rising 20-day EMA (96) indicates that bulls are in command but the RSI near 80 suggests that the rally may be overheated in the near term. This could result in a minor correction or consolidation in the next few days.
If the price turns down from the current level, $110 and then the 20-day EMA may act as a strong support. A sharp rebound off either level will suggest that the bulls are viewing the dips as a buying opportunity. The pair could then march toward the 261.8% Fibonacci extension level at $175.58.
Contrary to this assumption, if the price breaks below the 20-day EMA, it will suggest that traders are rushing to the exit. That may pull the AVAX/USDT pair to $81.
AVAX/USDT 4-hour chart. Source: TradingView
The pair has turned down from $147, indicating aggressive profit-booking at higher levels. The bears will now attempt to pull the price to the 20-EMA, which is likely to act as a strong support.
If the price rebounds off the 20-EMA, it will indicate strong buying on dips. The bulls will then try to resume the uptrend by pushing the pair above $147.
Contrary to this assumption, if the price breaks below the 20-EMA, the selling could accelerate and the pair may drop to $110. Such a move will suggest that the bulls may be losing their grip. The pair could thereafter drop to the 50-SMA.
MATIC/USDT
Polygon (MATIC) has been trading inside an ascending channel pattern for the past few days. The bulls pushed the price above the resistance line of the channel on Oct. 28 and 29 but failed to sustain the breakout. This may have prompted selling from short-term traders.
MATIC/USDT daily chart. Source: TradingView
The bears again successfully defended the resistance line on Nov. 3. This started the downward journey toward the trendline of the channel. The downsloping 20-day EMA ($1.69) and the RSI just below the midpoint indicate a minor advantage to sellers.
If the price turns down from the current level, the MATIC/USDT pair could drop to the trendline. The bulls are expected to defend this level aggressively. If the price rebounds off the trendline and rises above the 20-day EMA, it will indicate that the selling pressure may be reducing. That may signal the start of the northward journey toward the resistance line.
Contrary to this assumption, if bears sink the price below the trendline, it could result in a decline to the psychological support at $1.
MATIC/USDT 4-hour chart. Source: TradingView
The 4-hour chart shows that bulls are attempting to stage a relief rally from the strong support zone at $1.50 to $1.40. The 20-EMA has started to turn up and the RSI is near the center, indicating that the selling pressure may be reducing.
If bulls drive the price above $1.70, the pair could rise to $1.80. A break and close above this level will indicate strength. The pair could then start its up-move toward $2.15. On the downside, the selling may accelerate if the bears pull the price below $1.40.
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EGLD/USDT
The bears tried to pull Elrond (EGLD) below the breakout level at $303.03 from Nov. 16 to 18 but the bulls bought the dips as seen from the long tail on the candlesticks. Strong buying on Nov. 19 pushed the price above the overhead resistance at $338.70.
EGLD/USDT daily chart. Source: TradingView
This resumed the uptrend and the EGLD/USDT pair has reached near its pattern target at $427. The sharp rally has pushed the RSI deep into the overbought zone, suggesting that a minor consolidation or correction could be around the corner.
The first support on the downside is the breakout level at $338.70 and then the 20-day EMA ($325). If the price rebounds off either level, it will suggest that traders continue to buy on dips. The bulls will then try to resume the uptrend with the next target objective at $500.
This positive view will be invalidated if the price turns down and plummets below the breakout level at $303.
EGLDT/USDT 4-hour chart. Source: TradingView
The 4-hour chart shows that bears tried to stall the up-move at $400 but the bulls were in no mood to relent. Sustained buying at higher levels pushed the pair above the psychological barrier. The rising 20-EMA and the RSI in the overbought zone indicate that bulls are firmly in the driver’s seat.
The first important level to watch on the downside is $380. If bears pull the price below this support, the pair may drop to the 20-EMA. A strong rebound off this support could keep the uptrend intact but a break below it will suggest that the bullish momentum may be weakening.
MANA/USDT
Decentraland (MANA) turned down from the 78.6% Fibonacci retracement level at $4.35 on Nov. 20. This indicates that traders may be selling on rallies.
MANA/USDT daily chart. Source: TradingView
The MANA/USDT pair could now drop to the immediate support at $3.50 and if this level gives way, the correction could deepen to the 20-day EMA ($3.11). If the price rebounds off either support, it will suggest that sentiment remains positive and traders are buying on dips.
The bulls will then attempt to push the price to $4.36. A break and close above this resistance could open the doors for a rally to $4.94. This positive view will invalidate if the price continues lower and breaks below the 20-day EMA.
MANA/USDT 4-hour chart. Source: TradingView
The pair has been rising inside an ascending channel pattern. The failure of the bulls to push the price above the resistance line may have prompted selling from traders, pulling the price below the 20-EMA.
Both moving averages have flattened out and the RSI has dipped near the midpoint, suggesting that the bullish momentum may be weakening. The pair could now drop to the trendline of the channel where buying may emerge.
If the price rebounds off the trendline, the pair could continue its up-move inside the channel. The buyers will then try to push the price to the resistance line. The bullish momentum could pick up on a break and close above the channel.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk, you should conduct your own research when making a decision.
Decentralized finance (DeFi) platforms have been the target of criminal attacks this year. Investors in the blockchain-based form of financehave lost billions of dollars to criminals that target the platforms.
The total amount of money deposited at DeFi services has spiked from just $500 million in 2019 to $247 billion this year.
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According to a report from London-based firm Elliptic, the overall losses caused by DeFi exploits have totaled $12 billion in the past year. Out of that amount, fraud and theft accounted for $10.5 billion, seven times the amount last year.
DeFi, which has drawn in billions of dollars in investor funds, has also been a frequent target by hackers. They exploit poorly protected protocols, mostly using flash loans.
Related Reading | Poly Network Confirms Hacker Has Returned Most Of The Stolen Crypto
One of the popular attacks this year was the Poly Network hack. Hackers exploited a vulnerability in the multi-chain interoperability protocol. And they took off with roughly $600 million worth of various cryptocurrencies. They however returned most of the stolen funds.
DeFi – The Wild West Of Cryptocurrencies
Elliptic is a firm that tracks movements of funds on the digital ledgers that underpin cryptocurrencies. It recently reported that DeFi exploits amounted to $12 billion this year.
DeFi is often called the “Wild West” of cryptocurrencies because it is still the most unregulated area of crypto. DeFi platforms allow users to lend, borrow and save – usually in cryptocurrencies – without any involvement from middlemen like banks.
“The DeFi ecosystem is an incredibly exciting and fast-moving space, with financial services innovation happening at light speed,” said Tom Robinson, chief scientist at Elliptic. “This is attracting large amounts of capital to projects that are not always robust or well-tested. Criminal actors have seen the opportunity to exploit this.”
According to the report, the underlying technology of DeFi is built on open infrastructure. However, that technology is “relatively immature and untested.” There are bugs in code as well as design flaws that enable criminals to target the platforms.
DeFi market cap at $165.47B | Source: Crypto Total DeFi Market Cap on TradingView.com
“Decentralized apps are designed to be trustless in that they eliminate any third-party control of users’ funds,” said Robinson. “But you must still trust that the creators of the protocol have not made a coding or design mistake that could lead to a loss of funds.”
Criminals can also easily launder proceeds of crime while leaving few traces. “The irreversible nature of crypto transactions make it very challenging to recover these funds,” says the report.
Call For Regulation
With the alarming number of exploits the space is facing, there are calls for DeFi regulation. Regulators are now also turning attention to the sector. However, the actions of regulators in the coming months will play a significant role in determining how well they thrive in the future.
Featured image by Aergo, Chart from TradingView.com
