Yield Farming & NFT’s Led 2020’s DeFi Boom; Boosting DApp Volume by 1178%: DappRadar

The decentralized finance (DeFi) space has arguably been the most impressive component of the entire crypto industry in 2020.

With Bitcoin rallying to record highs, total assets locked in DeFi protocols have reached record levels too. However, it now appears to be bringing in an influx of users to decentralized apps (dApps), again.

DeFi is Pulling DApps Use

This week, top DApp tracking platform DAppRadar published its 2020 DApp Industry Report, revealing that there has been over $270 billion in transaction volumes in 2020. The platform noted that a staggering 95 percent of these volumes came from the Ethereum-based DeFi ecosystem, marking a jump from $21 billion last year.

The report pointed out that the DeFi space had also contributed to Ether’s growth, with money flowing from Bitcoin to the asset all through the year. DAppRadar explained that this cash influx’s primary driver was the theoretical yields in DeFi, with renBTC and Wrapped Bitcoin (wBTC) allowing dApps to tap some of Bitcoin’s liquidity.

Moving on, DAppRadar explained that only ten DeFi dApps accounted for 87 percent of the total transaction volumes on Ethereum. The report echoed findings from November when DAppRadar’s rankings showed that dApps had attracted over a million users in 30 days.

At the time, the top three DApps – DeFi Swap, Uniswap, and Compound, respectively – accounted for over 930,000 users between them. None of the remaining dApps in the top ten rankings had over 30,000 users that month.

Data from Dune Analytics also found that a single DeFi user could have used multiple addresses to interact with several dApps on several occasions during a month. It would be challenging to accurately estimate the actual number of users from DAppRadar’s numbers. As Dune estimated, the total cumulative DeFi wallet addresses were about 901,000.

Even at that, the numbers seem pretty impressive, especially considering that the DeFi space was almost nowhere this time in 2019.

Problems Remain

While the report was positive, it also highlighted some of the challenges plaguing the DeFi space. As expected, it touched issues such as the apparent dependence on the Ethereum blockchain, which has led to challenges like network congestion and higher gas fees.

Hacks and security breaches have also become common, with crafty hackers capitalizing on security flaws in DeFi smart contracts to steal users’ funds. As DAppRadar estimates, hackers have stolen over $120 million across 12 hacks this year. The tracking platform adds that the industry should improve insurance in 2021, which will enhance user confidence.

In general, DAppRadar notes that the future is bright for DeFi. Issues like the coronavirus pandemic and more have brought decentralized platforms into the forefront, and dApps have benefited from that rise in prominence.

With DeFi set to play a more prominent role in the global economy, it should spread its benefits to components like gaming, non-fungible tokens (NFTs), and dApps.

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Author: AnTy

Bitcoin’s the Most Crowded Trade After Long Tech and Short US Dollar: BoA Survey

Bitcoin’s over 170% YTD rally has everyone rushing in, which makes it one of the most crowded trades of December 2020, according to Bank of America (BOA).

The investment banking giant revealed its latest survey findings, according to which about 15% of fund managers with $534 billion under management said Bitcoin is the third-most crowded trade.

The first spot was taken by long technology shares and the second – shorting the US dollar. The survey was taken between Dec. 4 and Dec. 10. Longing corporate bonds and gold are also among the most crowded trades.

“At a market cap of $360B in a world of $17T negative-yielding debt, by definition, BTC is not the most crowded trade,” noted analyst Qiao Wang.

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The largest cryptocurrency surged to its all-time high at the beginning of this month after rallying more than 80% in October and November. Following the strong rally, Bitcoin has taken to ranging this month only to rally to over $20,800 today.

The rally was particularly started by Square making a $50 million investment in Bitcoin, after MicroStrategy’s big bet on the digital asset, which has now gone well above $1 billion. PayPal announcing support for cryptocurrencies also helped push the price of them higher.

All of this has brought the attention of the mainstream firms to the crypto market. From legendary investors like Paul Tudor Jones, Stanely Druckenmiller, and Bill Miller, to Guggenheim Partners, MassMutual, and many others, everyone is onto Bitcoin this year.

These investments are actually “laying out the groundwork for how you add Bitcoin to your balance sheet, how you should think about Bitcoin as a substitute for cash,” said New York-based CoinFund’s managing partner, Seth Ginnis, in a webinar this week.

This is evident from the fact that the market is being driven by North American institutional investors, as per Philip Gradwell, the chief economist at Chainalysis.

And still, as JPMorgan said, Bitcoin’s institutional adoption has just begun.

JPMorgan’s recent report said that the $100 million Bitcoin investment by insurance behemoth means the leading cryptocurrency could see $600 billion in additional demand.

Ginns also reported seeing a lot of interest from hedge funds and getting calls from pension plans, endowments, family offices, and foundations, suggesting the continued trend of broader institutional adoption next year.

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Author: AnTy

PayPal CEO Explains Company’s Mission to Improve Bitcoin’s Payment Functionality

PayPal’s entry into the crypto space has been one of the most anticipated events of 2020 in the cryptocurrency sector. Besides increasing customers’ access to Bitcoin, the payment processor appears bent on improving its functionality for transactions.

Easy Payments Anytime

Earlier today, PayPal chief executive Dan Schulman spoke to CNBC’s Squawk Box. He explained that the company’s entry into the Bitcoin market was fueled by a desire to capitalize on digital payments growth. Schulman said that PayPal’s objective is to improve peoples’ ability to utilize crypto as a funding source, hence their mode of operation.

Schulman was incredibly bullish on Bitcoin in his interview. He explained that while it is challenging to give Bitcoin price projections, he believes the asset will increase in utility.

“When you start to move crypto as a potential funding instrument, I think that bolsters its utility and stabilizes it as well–because it can be used every day in your purchases.”

The CEO added that increased adoption could also improve Bitcoin’s stability. Detractors have often bashed Bitcoin for its volatility. Addressing this problem can be a game-changer for Bitcoin – both as an investment vehicle and a currency.

PayPal’s customers in the U.S can now buy, sell, and hold Bitcoin through its new crypto feature. The service will also provide compatibility with existing merchant platforms, allowing businesses to accept digital payments. Schulman told CNBC that business integration would be open to about 28 million merchants.

Co-Existing with CBDCs

Schulman also spoke on Central Bank Digital Currencies (CBDC), explaining that many of these will grow as fiat loses prominence.

CBDCs have been a hot-button issue this year. Many countries have announced their intention to digitize their currencies, with most of them hoping to bolster their digital payment infrastructures. However, there have also been questions about what this could mean for top digital assets like Bitcoin.

For Schulman, CBDCs’ entry into mainstream finance could benefit Bitcoin. In part, he believes the dissipation of fiat from daily transactions could force central banks to find replacements. These replacements will ideally be the digital forms of their fiat currencies.

Many believe that increased fiat digitization could lead governments to take harsher stances against legacy cryptos – a reality that could hurt PayPal’s business.

However, Schulman explained that CBDCs’ proliferation wouldn’t negatively affect traditional cryptocurrencies like Bitcoin. As he explained, cryptocurrencies’ underlying structures like smart contracts could improve CBDCs and their operational efficiency when they get launched.

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Author: Jimmy Aki

DeFi Growth & Stablecoin Surge Most Bullish Crypto Development: State of Crypto 2020 Survey

39% of the respondents that involve 150 portfolio companies see DeFi as the most bullish crypto development of 2020, as per the DCG Founders survey “State of Crypto 2020.”

The sector has seen immense growth in 2020 and continues to hit new highs; just today, a new record was set of $12.5 billion TVL.

The founders surveyed said notwithstanding the price of DeFi tokens, which have been tanking hard until very recently, “the protocol development and business growth of 2020 bodes well for the industry’s future.”

What has been the most bullish crypto industry development this year?
DCG Survey: What has been the most bullish crypto industry development this year?

DeFi is followed by “BTC resilience” and “Stablecoin surge,” which makes sense given that the market cap of fiat-backed crypto has shot up past $12 billion this year.

​“The growing demand for stablecoins in Latin America, and Argentina specifically, is due to the fact that buying dollars as a form of savings is a regular monthly habit for middle-class Argentinians, due to cyclical devaluations and loss of trust and credibility in the Argentinian peso,” said Sebastian Serrano, CEO of Ripio, an Argentinian digital asset exchange, and payments company.

​Still, respondents were split on whether Ethereum, which is the center of it, will remain the dominant transaction-based blockchain. 51% still believe the second largest network will find scalability faster than new blockchains develop a community.

Adoption Drivers & Greatest Risks

What macro development will have the greatest impact on digital currency adoption?
DCG Survey: What macro development will have the greatest impact on digital currency adoption?

Other findings of the survey revealed “global recession” (24%), “inflation” (19%), and “hunt for yield” (18%) as the main macro crypto adoption drivers. However, the smart money adoption won’t be bringing new highs for BTC price in the next 6-12 months as per the majority.

Only 20% think during this period, BTC will surpass $20,000.

Where do you think the BTC price will be in 6-12 months?
DCG Survey: Where do you think the BTC price will be in 6-12 months?

Meanwhile, nearly six in ten respondents expect industry consolidation, resulting from big players buying smaller ones to limit competition to accelerate, particularly in the exchange and wallets & custody spaces.

However, the industry’s greatest risk remains the same; compliance and regulation as per 51% of the respondents.

“It’s really important that we start to see some consistency and coordination across regions,” said Simone Maini, CEO of Elliptic, a blockchain forensics, and analysis company, “there are still plenty of opportunities for regulatory arbitrage at the moment, where businesses are trying to operate in jurisdictions with looser regulations.”

Other factors that impede sustainable growth involve theft/hacks/scams (22%), investment crunch (12%), and technical obstacles (8%).

Overall, in 2020, four in five rated their company’s performance against expectations as “outperformed” or “neutral” while having COVID/remote work, third party delays, and fundraising as the main business challenge.

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Author: AnTy

Blockchain Technology to Grow the Global GDP by $1.76T In the Next Decade: PwC Report

  • China set to benefit the most from blockchain technology growth in the next decade with a protracted $440 billion boost in its GDP during this period.
  • This represents 25% of the total protracted global GDP boost from the innovative technology – set at $1.76 trillion by 2030.

A research report from a ‘big 4′ accounting firm, PricewaterhouseCoopers (PwC), “Time for Trust,” explores blockchain technology’s global socio-economic impact in the next decade. Targeting 2025 as the tipping point for the technology. If adopted at scale, PwC experts and researchers see a $1.76 trillion impact from the technology by 2030. This represents 1.4% of the total gross domestic product (GDP) of the world.

The report focuses on blockchain’s practical use in five key areas – provenance, payments and financial instruments, identity, contracts, dispute resolution, customer engagement – and how they deliver value in building transparent and efficient solutions across all industries.

According to the report, Asia is set to witness blockchain technology’s greatest impact, China leading the growth with a $440.4 billion projection. Japan and India expected to witness a $72.3 billion and $62.2 billion increase, respectively.

The United States is expected to witness a $407.2 billion increase in GDP from blockchain innovation growth in the next decade.

PwC report further states blockchain’s role in enhancing transparency and traceability as the sector with the most growth potential – projected to grow by $$961.6 billion by 2030. Anthony Bruce, Partner, and Pharmaceutical and Life Sciences Leader, PwC U.K, praised the potential of blockchain innovation in providence and traceability in the healthcare industry, stating,

“For healthcare organizations, blockchain can ensure patient safety is at the heart of the pharmaceutical supply chain. It has the potential to give patients confidence in the authenticity and origin of drugs.”

Payments and securitization of wallets are also picking up the pace and is expected to grow by $433.2 billion in the next decade. The U.S is expected to lead global growth in this period and is expected to experience a $136.3 billion GDP growth from blockchain-based payment systems, with China coming in a close second at $104.6 billion.

“Blockchain has the potential to cut costs, speed up transactions and promote greater financial inclusion by streamlining cross-border and remittance payments,” Lucy Gazmararian, Crypto, and FinTech Advisory, PwC Hong Kong said.

“These powerful innovations will transform the payments infrastructure.”

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Author: Lujan Odera

Is FTX CEO Accelerating the Deep DeFi Rout?

After going through a deep pullback in the past month, most of the DeFi tokens struggle to let go of the losses.

Although the news of Square buying $50,000,000 worth of BTC has sent the market into a tisy, not all coins are moving out of the red. Coins like UNI (+22%), LRC (+13.5%), and KNC (+5%) are recording some gains. DeFi darling YFI has manged to dig itself out of the deep red into the green (+5%).

Much like the price, the total value locked (TVL) in the DeFi Sector has declined by almost 10% to $10.12 billion, as per DeFi Pulse.

Popular DEX Uniswap, however, is an exception to this, whose TVL has jumped 30% in a fortnight.

Keep on Dumping!

As we reported, numerous popular DeFi tokens have lost 80% to 90% of their value since hitting all-time highs during the period of mid-August and the beginning of September.

But still, they continue to go down more and more, which could be seen as an opportunity for the project enthusiasts to buy these tokens at low prices which might have missed them the first time around.

In the past 7 days, more losses have been incurred by the DeFi sector, with YFII leading with almost -46% drop. Other notable losers include SUSHI (-41%), CRV (-37%), YFI (-29%), SWRV (-33%), bzrx (-37%), UNI (-24%), UMA (-25%), LEND (-20%), and SNX (-17%).

As another round of losses hit DeFi tokens, Twitterati points to derivatives exchange FTX CEO Sam Bankman-Fried shorting YFI, CRV, and UNI.

Some market participants speculate that Bankman-Fried might be behind the latest dose of losses, especially for YFI, CRV, and UNI, which he has been dumping on leading spot exchange Binance.

It is worth noting that Bankman-Fried is also the CEO of the quantitative cryptocurrency trading firm Alameda Research.

The Catalyst…

While some aren’t liking it, others said Bankman-Fried is simply shorting a few cryptos, which means he believes the coin will decline in value.

Jason Choi of crypto fund The Spartan Group found it all absurd, stating, “Always find it amusing that the idea of shorting is deemed evil on crypto twitter.”

And if you think Bankman-Fried will short his FTT or SRM, that’s a big fat no, because he ain’t short on his creation, of course, rather he is “long as fuck.”

Trader Moon Overlord also pointed out the obvious nature of the situation, which is “a person apart of a trading firm does a trade.” Back in late August, when FTX acquired the crypto portfolio tracker Blockfolio, the trader said, “FTX didn’t pay for a portfolio tracker they could build in 5 minutes they paid $150M for your data and bag info.”

The market also likened Sam’s behavior with billionaire investor George Soros acting as a catalyst in collapsing the British pound in 1992 by shorting it.

In the process, Soros made an estimated $1 billion profit. While that incident was viewed as “a permanent black mark on the UK as a center of financial prestige,” following the event, “Britain entered a period of growth and prosperity,” noted Sahil Bloom, VP at Altamont Capital Partners.

If not Soros, someone else would have used the opportunity to their advantage, and he “merely accelerated” the process. The same could be seen in the DeFi market, which may finally find its bottom and embark on a new bull run.

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Author: AnTy

Rug-Pulled on the Latest YFI Clone, Soft Yearn (SFYI), After Rebase Gets Exploited

YFI, the governance token of Yearn Finance, is the most popular DeFi token, which currently has the highest value of $21,465 and is dubbed a “cash generation machine.”

Since its launch in mid-July, many copycats of this popular DeFi token have emerged, such as CREAM, Wifey, YFII, YFL, and others.

The latest knockoff has been Soft Yearn (SFYI), the adaptive yield-stable currency, which merges Yearn.Finance and Ampleforth. “As DeFi flourishes, the demand for YFI will increase exponentially. SYFI has a direct growth relationship to the prominent YFI token,” reads the website.

Being a soft pegged currency, whenever SYFI has a significant difference form the main currency’s price, the contract or expansion algorithm will converge the market price to the pegged price.

Ampleforth birthed based-finance, but it hasn’t been a success — elastic-finance means the supply of the token changes, and so does the number of tokens held by an investor.

Also, rebases have led to the collapse of the projects. It was last seen with YAM, which found a bug in its rebase function resulting in its crash.

But on Monday, the price crashed 100% from its peak of $174 last week to $0.00040, as per CoinGecko.

The crash happened due to what happened during the rebase period.

“During our first rebase at 8:00 UTC, September 3rd, 2020, a malicious actor bought 2 SYFI, and timed the adjustment of their token holdings with a Uniswap sell. During the transaction, the rebase applied, but Uniswap price remained unchanged, thus, the perpetrator’s sell was amplified to the extent of wiping out most of the liquidity provided in the Uniswap pool. The rebase itself was also incorrect. The YFI rate per SYFI was not streamlined properly,” shared the SYFI team on its Telegram.

The team behind the project is now offering a “very large sum” of ETH as a bounty who can identify and apprehend the wrongdoer.

Last week, they did a presale and raised 400 ETH with a supply of 60,000 SYFI, double of YFI. However, unlike YFI, which is completely decentralized, but much like an ICO, they distributed portions of the token supply to the team and for marketing.

However, like the YAM project, they aren’t going anywhere and are planning a migration. They are also proposing to recreate the SYFI token, airdrop the number of tokens they had before the rebase, add at least 250 ETH to the initial liquidity pool, and fix the rebase mechanism.

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Author: AnTy

Ethereum (ETH) to Repeat 2017? Supply Sink & Buy Pressure Coming

Ether outperformed Bitcoin during the ICO mania of 2017, as it was the most popular platform on which these projects were built on.

Now, during the DeFi mania, ETH is again surpassing Bitcoin, the largest digital asset with a fixed supply. In 2020 so far, ETH has recorded 238% positive returns compared to BTC’s just 56.05%.

According to on-chain analyst Willy Woo, Ethereum is actually “very close to BTC in terms of risk-reward.”

Bitcoin Risk Adjusted Returns vs Other Assets
Source: charts.woobull.com

Thanks to the DeFi craze, Ether’s supply has also been shrinking as a record 6.4 million ETH is already locked in the sector. Now, Ether’s supply is going to be even more contracted thanks to DeFi darling Yearn Finance.

The project has finally added yETH vault along with yWETH and other digital assets. Obviously, these debt-based vaults carry extremely high risk like any other DeFi project and also charges a 0.5% withdrawal fee, not to mention the record transaction fees on the second largest network.

In simple terms, lock in your ETH in a vault and take out more than you put in thanks to the 65% APY.

The community is extremely excited about this development, with some calling it “the world’s first autonomous on-chain hedge fund.”

“Could be a block hole for ETH, super bullish,” said another trader.

“YFI yETH vault will lead to a supply sink from ETH deposited to mint DAI, but also ETH buy pressure from yield farming earnings converted to ETH. Another timely benefit is that gas costs are pooled,” stated Alex Gedevani, who handles research at Delphi Digital.

With ETH leveraged in DeFi, staking coming in Phase 0 of ETH 2.0, and yETH vault here, the supply-side liquidity crisis is coming for Ethereum, which is expected to send the digital asset’s prices higher.

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Author: AnTy

Binance Lists Wrapped-BItcoin (WBTC) Amid the Rapidly Growing DeFi Hype

Binance, one of the most recognizable crypto exchanges, with the highest share of the trading volume, is chasing the ongoing DeFi hype. Binance has recently announced the listing of another Defi token, used for collateral, called Wrapped-Bitcoin (WBTC). This listing is seen as Binance capitalizing on the rising demand for the token as well as for DeFi tokens.

Wrapped-Bitcoin is an ERC-20 based token device to be used as a form of collateral in the defi ecosystem. As per the announcement made by the exchange, the WBTC token would be available for treading on the exchange from August 31st. The value of WBTC is pegged against the value of one bitcoin.

The WBTC token was a collaborative effort by major defi players in the space, including the likes of BitGo, Ren, Dharma, Kyber Network, Compound, MakerDAO, and the Set Protocol. The aim behind creating the WBTC token was to offer more liquidity in the defi ecosystem.

The WBTC token has been listed against Ethereum and Bitcoin for trade, and users on the platform can start investing and trading immediately.

How Will the WBTC Function?

Decentralized Finance (Defi) has become the talk of the crypto world in 2020 as the market grew exponentially over the first half of 2020. Defi protocols use Collateral Debt Position (CDP), where users can put Ether or ERC-20 based tokens as collateral and withdraw loan in a stablecoin.

When the popularity of the defi ecosystem grew, and more number of investors started venturing into the ecosystem, liquidity became an issue. As a result, the major players began looking for different ways to offer liquidity, and the ERC-20 token arose as the best bet.

WBTC soon became quite popular among investors, and at one point, the amount of wrapped bitcoin locked in defi protocols was significantly more than the amount of bitcoin in the lightning network.

Binance has been known to conquer all aspects of the crypto ecosystem and has proven its mettle in both the spot trading market and futures trading market. Given the growing interest of exchange in the defi, it would not be a big surprise if Binance emerges as one of the key players in the near future for the defi ecosystem.

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Author: James W

Ethereum Fees Crashes 80% Much Like Transaction Count as ETH Price Retreats

The most popular USD pegged stablecoin Tether that is the second biggest gas guzzler on the Ethereum network recently adopted OMG Network for the settlement.

This integration between Tether and Layer 2 solution for Ethereum – OMG Network is expected to result in a reduction of fees and confirmation times, which has become extremely important in recent times because of the skyrocketing fees and congestion on the second largest network.

In the first half of August, USDT transfers accounted for 14% of all fees spent on Ethereum. Out of the total $12.9 billion supply of USDT, $8.6 billion (66.6% of all supply) is issued on Ethereum. Just this week, 1 billion TRC20 USDT coins were also swapped into ERC20.

The primary reason meanwhile for the jump in the cost to transact on Ethereum is DeFi applications such as Uniswap, as per ETHGasStation.

ETH25 Leaderboard

This week, the average transaction fees on Ethereum jumped to its all-time high at $6.6 but since then it has dropped 80% to around mid-July levels which as Santiment puts it is a “nice opportunity for significantly cheaper on-chain operations.”

ETH Trans Fees

The immense growth in stablecoins and DeFi usage has been having an adverse result on Ethereum.

As we reported, the debacle of the DeFi experiment YAM. Finance was the real culprit for pushing the Ether fees so high, that wasn’t seen since the launch of the platform in 2015.

The average gas price that has also jumped over 260 Gwei has also come down to about 110 Gwie level, as per Blockchair.

However, the gas usage continues to hit a new all-time high which means the usage of the network hasn’t slowed down, close to hitting 80 billion per day.

This could be because of the transaction count on the network, which dropped to 612k today, down from over 1.2 million on August 10, inches away from the all-time of 1.34 million on January 4, 2018, during the peak of the last bull run.

blockchair eth

Much like these metrics, the price of Ether also took a fall. ETH dropped over 13.5% to $380 in line with Bitcoin falling under $11,400 which has been because of the strengthening US dollar index. At the time of writing, Ether has been trading at $392, still in the red but up 198% YTD.

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Author: AnTy