DeFi App Growth Boosts Total Transactions On DApp Blockchains By $4.5B In Q2 2020: DAppRadar

In a report by DApp Radar, the total transactional volume on DApps touched the $12 billion mark in Q2 2020, representing a $4.5 billion increase from Q1 2020. Ethereum (ETH) continues to dominate the decentralized application (DApp) industry attracting a value of $11 billion across Q2 2020.

The growth is majorly impacted by the growth of decentralized finance platforms such as Balancer (BAL) and Compound (COMP) over the past month. EOS and TRON still lag in the DApp ecosystem despite interest in gaming and betting applications on the blockchains increasing substantially in the previous quarter.

Ethereum’s strengthening claim to the first spot

DApp Radar, a DApp aggregating platform, released its Q2 2020 DApp Report on July 2nd, showing the immense growth of Ethereum’s value in the DApp ecosystem. 2020 began as an exciting time for both the DeFi and decentralized exchange (DEX) markets.

DeFi on Ethereums substantial growth with the number of active wallets in the space experiencing a 500% year on year growth, at about 200 at the start of 2019 to over 4000 active wallets at the end of Q2 2020.

The massive growth contributed mainly to Compound’s growth into a crypto unicorn, set DeFi applications as the third largest category on Ethereum, contributing 24% of the total activity. However, DeFi remains the most crucial contributor to ETH growth and value the report states:

“DeFi already holds $11 billion in 2020. This is 2.5 times higher than it was within all of 2019. This metric shows the growth of the DeFi category by 1,410% year-on-year and 150% quarter-on-quarter.”

DEXes growth prospects

The growth of DeFi products, in turn, caused an increase in volumes on DEXes, a report from Our Network states. Curve, a market marker for stablecoins, was one of the biggest beneficiaries of the “yield farming” process on Compound and Balancer, offering competitive slippage to Uniswap and Kyber Network as well as low fees.

The DEX witnessed a 30x growth on its average trading volumes in June following the launch of Compound token, registering a daily volume peak of $60 million in mid-June.

EOS and TRON rise to challenge ETH dominance

The DApp industry is heavily dominated by Ethereum, Eos, and Tron, the latter two aiming at dethroning the king platform shortly. With DeFi cracking up an imbalance in the value stored on each blockchain, TRON sought to add its DeFi assets mirroring COMP and BAL.

While the DAppRadar report states, TRON is still early in the DeFi space, the transaction volume on the blockchain increased by 17,210% in Q2 2020 when compared to Q1 2020 when only $78,000 in size was registered.

TRON’s diversification to DeFi still has some way to go as the gambling and high-risk DApp transaction volumes dominate the blockchain activity. This section and games on the blockchain contribute to 80% of daily activity on the chain.

In a similar breath, the EOS gaming market is the only sector that has grown since the highs in daily activity on EOS back in Q2 2019. The games and marketplace category accounts for half of the total activity on EOS with two apps – the Crypto Dynasty and Upland – leading the charge.

The report also mentioned the growth of the Hive platform over STEEM since the Justin Sun takeover, as well as other DApp projects such as IOST, Thundercore, WAX, Ontology, and Waves.

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Author: Lujan Odera

Another Bubble in the Making? The Case of Flashy DeFi with Fancy Interest Rates

DeFi space has been seeing explosive growth for the past few weeks. The total market cap of DeFi has reached $6.2 billion, as per DeFiMarketCap. Also, the total amount locked in DeFi has hit a new all-time high at $1.50 billion, according to DeFi Pulse.

This surge was the result of people jumping into DeFi tokens after COMP prices shot up over the announcement of its listing on Coinbase Pro, just a couple of days after the initial distribution of Compound Finance’s governance token COMP.

These tokens give the taken holders governance rights to the changes on the Compound platform. They can be delegated but, as of now, gives the holders no financial claim to any of the revenues generated by the project.

Every day 2,880 COMP tokens are distributed in each market 50/50 to both borrowers and lenders. 91% of these tokens are currently going to USDT suppliers and borrowers, said Nick Martitsch, Business Development at Compound. Tether (USDT) has “surpassed ETH to become the largest market on Compound.”

Currently, there is $120 million of outstanding USDT borrowed; this growth has resulted in a downward trend of “COMP earned per $1 borrowed.” The supply and borrow rates for USDT are 12% and 17%, respectively.

Liquidity miners, meanwhile, are compensated for both lending and borrowing. Which means, “the optimal strategy is to lend the highest interest rate asset, borrow as much as you can against your cAsset tokens (a claim on-lent assets) and then add the remaining assets back into the lending pool,” explained Nelson Ryan, Senior Associate at eblockventures.

Annualized returns are impressive at over 100%, but the interest rate is even higher on non-stablecoin assets, which caused the price of these assets to rise as people buy them to supply and then borrow against them, he said.

These yields are predicated on the market cap of COMP, whose only 25% supply is circulating in the market currently with “no borrow market to short the spot COMP market and 2880 new COMP hitting the market every day for the next four years.”

While COMP prices may have risen exponentially to $240 at the time of writing, COMP September futures on FTX is much lower at around $185.

It’s Just temporary arbitrage, or there are unstated risks

Besides the increase in DeFi tokens prices, last week, a new project, ‘BTC Yield Farming Pool’, was introduced by Ren, Synthetic, and Curve Finance together.

“The defi hunt for yield is nearing an interesting inflection point,” said Ari Paul of BlockTower adding that the incentives offered by DeFi projects are “too good to be true in that the high yields are ultimately coming from a future intrinsic value of tokens which can at most be worth the value that can be extracted as rent from future borrowers and lenders.”

Qiao Wang also chimed in with “if you are making a fuck load of money right now farming DeFi yields, be thankful for the poor souls who just got liquidated by Arthur.”

According to Ari Paul, DeFi may be a “classic bubble fueled by liquidity mining,” which would unwind when maybe the system maxes out on leverage, chasers reverse course fast after stake mounts and yield average start falling, or maybe a bug or a game theory attack at a moment of vulnerability. He said,

“As the tokens start falling in value, that virtuous cycle of increasing locked up capital becomes a vicious cycle of falling token price -> falling yield -> less staked assets -> lower intrinsic token value -> lower token price.”

Amidst this growing frenzy, even Ethereum co-founder sounded caution,

“I think we emphasize flashy DeFi things that give you fancy high-interest rates way too much. Interest rates significantly higher than what you can get in traditional finance are inherently either temporary arbitrage opportunities or come with unstated risks attached.”

Instead of optimizing yield, it should be improving the core building blocks like oracles, DEXes, privacy, stablecoins, and synthetic tokens for fiat, he said.

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Author: AnTy

Stablecoin Printer Goes Brrr… Signaling an Early Bull Run in the Crypto Market?

During the past few months, stablecoins have seen immense growth which has led the total issued stablecoins surpassing $10 billion last week and their free float supply exceeded this figure this week.

According to analyst Permabull Niño, this surge in stablecoin supply might be giving off some signals.

He points out how during the 2017 bull run, there was “extremely active printing” of stablecoins. During the bear market of 2018, this printing “flatlined” only to have semi-regular new supply during the chopping of 2019.

Now, in 2020, USD-pegged stablecoins’ printing is “picking up steam” which could signal that we are in an “early bull” market.

Total Stablecoin Supply 7-day % Change, BTC market cap

Tether accounts for 90% of total stablecoin supply

Most of this stablecoin growth comes from Tether (USDT), the popular USD-pegged coin accounts for about 90% of the total stablecoin supply.

As per Tether’s transparency page, more than $9 billion worth of USDT is currently in supply, out of which $5.7 billion are on Ethereum blockchain, $2.1 on Tron blockchain, $1.3 billion on Omni blockchain, and the rest on others like EOS, Liquid, and Algorand.

Tether’s largest markets by traded volume are Asia-based Binance and Huobi. According to a recent Coin Metrics report, USDT-ETH transfers are concentrated during Asian and European market hours.

“Stablecoins are a crucial part of the crypto ecosystem, and will only keep growing in prominence,” states the report.

Since the Black Thursday crash, while most non-stablecoin assets saw a drop in their market capitalization, stablecoins have experienced a surge in demand.

This demand could be from the increase in the number of investors holding stablecoins as “dry powder” in anticipation of a new bull run or Asian OTC traders pouring money into stablecoins, as an onramp to crypto markets or a general rush to safety.

It is also speculated this surge in demand could be a reaction to the shortage of US dollars.

US Dollar shortage

In a 2019 Asian Development trade finance curve, banks from about 50 different countries when asked about the largest barriers to expanding trade financing operations, 30% identified US dollar liquidity as the obstacle.

The global reserve currency US dollar is the lifeblood of international trade as “a lot of borrowing and commerce and investing is done in dollars.” And they have been running in shortage amidst the coronavirus pandemic that has wrecked the businesses and economies.

The US Federal Reserve expanded its balance sheet by more than $2 trillion since the February end. But this is tackling America’s shortage of the US dollar, not the world’s.

Out of this $2 trillion, only about $600 billion was for new emergency loans to address the global shortage of dollars.

Foreign central banks also borrowed over $200 billion from the Fed via swap lines by the end of March. At that time, the Fed allowed them to swap any Treasury securities they held in exchange for cash.

The Importance of the US dollar can be understood from the fact that “when you have a dollar crunch, it can turn a recession or contraction in activity into a financial crisis very quickly because the dollar shortage can trigger defaults and deleveraging,” Julia Coronado, a former Fed economist told Bloomberg.

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Author: AnTy

Former Ripple CTO Jed McCaleb Still Got 4.7 Billion XRP to Dump on the Market

  • 5% of total existing XRP supply is still left with Jed McCaleb, founder of Ripple, Stellar & Mt. Gox
  • Arthur Britto also holds billions of XRP in escrow that are to expire in the future

Whale Alert that monitors blockchains has taken to analyze XRP whale, Jed McCaleb. Founder of Mt. Gox, Ripple, and Stellar, McCaleb is one of the most famous whales of crypto space that has been a matter of concern for XRP investors because of the 9 billion XRP tokens he claimed to have received as part of his compensation for his role at Ripple.

A significant portion of his assets has been sent to Ripple for unknown reasons. Former Ripple CTO has also donated at least 140 million XRP to various charities.

In its latest study, Whale Alert tracked around 8 billion XRP to Ripple, a settlement account and his personal accounts from here McCaleb actively sells. In May 2014, when he first shared his intent to sell XRP, McCaleb’s holdings were worth about $45 million.

They managed to track the sales of 1.05 billion XRP, “almost exclusively through Bitstamp,” between 2014 and 2019 at an average price of 0.129 cents, putting the total sale amount at $135 million USD. McCaleb continues to sell, even last month he sold another 19 million XRP.

The profits have also been cashed out directly through Biststamp with no evidence of it being reinvested into the crypto market.

At present, 4.7 billion XRP which is around 5% of total existing XRP supply is still left with McCaleb, worth over a billion dollars, estimates Whale Alert.

“At the current rate it would take him around 20 years to sell all of it, however his activities have been limited by the settlement agreement with Ripple, which is likely to expire sometime in 2020.”

Insignificant amount but economic power can’t be ignored

The big question is does McCaleb selling XRP affects the price of the third largest digital asset by market cap. Whale Alert found that compared to XRP’s total trading volume per day, the amount his selling is “insignificant.”

But volume is not a good indicator for how much the market can absorb, as it explains, “It’s likely that a very significant part (if not most) of the volume on exchanges comes from comparable traders and that the net change of XRP on the market is much lower.”

The real question is how much effect does this whale have on the net amount of XRP available. Though there is not enough data, “because he is exclusively selling XRP, he is adding to the net amount available,” wrote Whale Alert.

While McCaleb has 4.7 billion of XRP left to be dumped on the market, Ripple co-founder Arthur Britto also holds billions of XRP in escrow that will expire in the future as well.

The significance of a large amount of sale on XRP’s sale might not be big but the “economic power and consequences of whales cannot be ignored,” concludes Whale Alert.

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Author: AnTy

Here’s How DeFi’s Smashing Growth Puts a Trillion-Dollar Case for Ethereum

  • Total USD value locked in DeFi surpasses $800 million creates “a new paradigm for global finance” with one common theme Ether
  • The trillion-dollar case for ETH puts in a crazy number for Ether price but at one point $1 billion was crazy as well
  • Caveat Emptor: No Fed to bail you out here and “on a long enough timeline its very likely that many will get rekt” – Mati Greenspan of Quantum Economics

Decentralized Finance or DeFi for short is one of the fastest-growing sectors of the crypto industry.

After a massive upswing in 2019, 2020 is promising to be another great year. Already the total value in USD locked in DeFi has surpassed $800 million. To date in 2020, this amount has surged over 22%, after the price of cryptocurrencies surged in the past 15 days.

The biggest contributor to this growth is Maker which has a 56.67% dominance. The growth in Total Value Locked (TVL) has pushed the amount of DAI locked above 500 million. The curve of DAI locked in DeFi has been steepening lately, with 13 million added since Jan. 1st. Just a month ago, this number was 30 million and now at 60 million, it has grown by 65%.

Ethereum: A new, alternative, permissionless & trustless system

Maker’s dominance means, DeFi is dominated by Ethereum, with ETH locked in Defi exceeding $3 million.

Initially, it was largely comprised of two projects, MakerDAO and Bacon but since then we have seen the explosion of Uniswap, Compound, and InstaDApp. Synthetix is another one seeing “absurdly” high growth.

Projects like these, Lucas Campbell of DeFi rate says, are creating “a new paradigm for global finance” which has one common theme, Ether. This he said means,

“Ether is trustless value supplying economic bandwidth for Ethereum’s permissionless money protocols.”

With Ethereum creating a new, alternative, permissionless, trustless system, it means there will be no shortage of future demand for ETH as an economic bandwidth. Campbell says the next decades are nothing short of exciting for the permissionless finance and proliferation of DeFi. Campbell notes:

“However, in order for Ether to successfully deliver permissionless, trustless finance to the world it will require a massive amount of economic bandwidth to support it.”

The Trillion Dollar Case for ETH

To build a trustless economy, you need a trustless value that is only possible with decentralized crypto-native assets that settle on-chain.

The total bandwidth of Ethereum however, is just about $19 billion, its market cap, and with this, it can’t even support a small nation-state economy. But Campbell argues there is no shortage of addressable market with $250 trillion of global debt, $542 trillion in derivatives, and $90 trillion of equity markets.

MakerDAO already has a goal of Dai to hit 1 billion in circulating supply by 2020 end. On the assumption that a country like Argentina adopts Dai as its primary currency for commerce as “the appetite for the Argentine Peso dwindles,” and if it is able to capture 51% of the country’s M1 supply, that would mean Ether price has to reach between $2,500 to $10,000 to provide a sustainable amount of economic bandwidth.

But that was just for Argentina, the ambitions are bigger. Campbell theorizes Dai competing with US Dollar which puts Ether price at $50,000.

These are “crazy” numbers but investor and Mythos Capital founder Ryan Sean Adams says at one point even $10 billion for ETH was crazy.

Although these numbers should be taken with a grain of salt, Adams says what needs attention is that,

“A trustless economy requires trillions in economic bandwidth. And that’s the trillion-dollar case for ETH.”

Caveat Emptor: No Fed to bail you out here

All of this is very ambitious and shiny but DeFi has its own issues. For starters, the sector is still “very much under construction and new economic models are currently being tested,” points out, Mati Greenspan, founder of Quantum Economics in his daily newsletter.

It isn’t too dissimilar to traditional finance but brings in a high level of transparency and is obviously devoid of any central banks, which “could make all the difference in the world.”

But another big question is the APR they offer on lending the crypto asset.

While the US Federal Reserve offers you 1.5% to lend money to a government in the bond market and the highest yield one can get is less than 7%, it is mostly negative in developed countries like Japan and Germany, so how come these projects offer as much as over 9%?

The thing is they are lending the same crypto-asset out many times and taking a fee from each of the transactions, much like what happens in traditional finance. But as Greenspan notes,

“the only difference is there’s no Fed to bail you out when things do turn sour and on a long enough timeline its very likely that many will get rekt.”

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Author: AnTy

XRP Welcomes 2020 with a Green Candle And by Unlocking 1.2 Billion from Escrow Account

  • A total of $230 million unlocked from Ripple’s escrow wallet
  • XRP up over 2% on the first day of 2020
  • A look at Ripple’s “strongest year of growth to date”

After ending 2019 with poor performance, recording a loss of more than 46%, XRP started 2020 on a green note.

Though the situation is still bad, with the digital asset down 95%, it has made its way up from $0.186 hit last week.

In the last 24 hours, the third-largest cryptocurrency has been up 2.04% while trading at $0.194, as per Coincodex. In the BTC market, it is up by 1.09% and 0.09% against ETH.

However, amidst this green candle came the release of 1.2 billion XRP worth approximately $230 million from Ripple’s escrow wallet.

The unlocked amount has been in two batches as Whale Alert, a live tracker of large crypto transactions from and to exchanges reported, the first one was of 200,000,000 XRP worth $38,116,030 USD on Dec. 31, 2019, that cost 0.0005 XRP. Then 1,000,000,000 XRP worth $192 million were unlocked from Ripple’s escrow wallet, costing 0.05 XRP.

Looking Back

Recently we shared Ripple’s big plans for 2020 that involve building new utility and use cases for XRP through Xpring intuitive, tackling fake volume, and launching new products this year.

Ripple expects 2020 to even better than last year but not before we take a look at the year of Ripple’s “strongest year of growth to date.”

The company had a record year with a $200 million Series funding led by Tetragon with participation from SBI Holdings and Route 66 Ventures.

“We’re thrilled to cap off our strongest year of growth with this validation from investors in our business and its mission,” is how Ripple talks about this funding.

It was in 2019 that RippleNet surpassed 300 customers and 10x year-over-year growth in attention on the network. Also, the year when the company announced the Ripple’s developer platform via Xpring that “removes the pain and friction from integrating money into apps.”

It has been in 2019 that Ripple CEO Brad Garlinghouse wrote an open letter to Congress urging legislators

“to support fintech policy that fosters responsible innovation and classifies digital assets in a way that recognizes their fundamental differences—not painting them with a broad brush.”

Ripple’s biggest achievement of 2019, the company says has been its partnership with money transfer giant, MoneyGram that leverages XRP through On-Demand Liquidity (ODL). During the Swell 2019 event, MoneyGram CEO Alex Holmes also revealed that it moves 10% of its transaction volume between the US and Mexico with ODL.

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Author: AnTy

Ethereum Developer ConsenSys Shuts Down Operations in India and Philippines

  • In total, the teams in India and the Philippines only accounted for less than a dozen people.
  • The projects for these teams specifically dealt with decentralization and blockchain-based payments.

There are over 30 hubs around the world that are attributed to ConsenSys, the Ethereum blockchain development company. However, as reported by CoinDesk, the company has shut down their operations in both India and the Philippines. The teams were notified by Joe Lubin via email, who stated that the offices would be shut down, and the closure was confirmed by one of the members of the team in India.

This shutdown was part of a series of layoffs that began last year, dropping about 13% of the staff, which was about 1,200 members at the time. Since then, the total number of people employed have dropped down to 1,000 people. The last bull run of the crypto market paved the way for growth for the venture studio, bringing the price of Ethereum tokens up to $1,000. However, the crypto winter forced them to change their priorities and adjust their staff.

Overall, the operations shut down in India and Philippines only accounted for less than a dozen people in total, but their work involved some high-profile projects for the company. In India, the team was working on decentralization for multiple sectors, like healthcare and land titling. The team in the Philippines was focused on a network called Project i2i, using blockchain technology for interbank payments with UnionBank. Presently, the future of these projects is unclear.

Further questions were directed to the main office for ConsenSys in Brooklyn, New York, but CoinDesk reports that there was no comment provided by press time.

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Author: Krystle M

$77 Million Worth of Bitcoin Locked in Sidechains, Unavailable for Use

Out of the total circulation supply of around 18 million Bitcoin, around 9661 Bitcoins are stuck in different sidechains, which are not lost but cannot be used either. These bitcoins are stuck in primarily 3 major side chains that include Liquid, Binance Chain and Wrapped Bitcoin (WBTC) sidechains.

Side Chains are just like sister chains to the main network which are built to perform specific tasks. Their primary use is to hold the transaction amount when the user sends the fund to or from the sidechains.

As per the latest data from block explorers, Liquid network contains the smallest amount of Bitcoin stuck in sidechains with 89 BTC, while WBTC contain 571 BTC and Binance Chain has the highest number of Bitcoin stuck with 9001 BTC.

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Author: Hank Klinger

World Will Need Gold In Case of an Economic Meltdown, Dutch Central Bank Affirms

In case the financial world faces a total collapse, gold will become more important than fiat currencies, at least that is what the Dutch Central Bank affirmed recently. The bank has also affirmed that gold is the trust anchor of the financial system and that it can be used as collateral for starting over.

Several central banks have started to acquire gold after the 2008 financial crisis, so it is not surprising that the representants of the Dutch bank believe in this. The Bitcoin community, however, sees the cryptocurrency as the way out for any upcoming recession.

Bitcoin has several qualities that are similar to gold. For instance, there is a limited supply of it, so it cannot be artificially manipulated as fiat currencies can be.

Gabor Gurbacs, the manager of VanEck, affirmed that non-sovereign currencies have a place in the world and that private money should be allowed to compete in a free market, just as gold does right now.

Mike Novogratz, a serial investor, agrees with this idea. He affirmed that we live a very bullish moment for both gold and Bitcoin because there is a lot of uncertainty in the market and this creates a very bullish moment.

Not everyone agrees that private money is a good idea, however. Obviously, the people who disagree come from outside of the crypto market. The CEO of Apple, Tim Cook, affirmed that only governments should control money and that Facebook’s Libra project, for instance, would encounter difficulties because it was a private enterprise trying to control money.

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Author: Daniel Jimenez

Eleven New Crypto Projects Join Messari Disclosures Registry Including ADA, LSK and Beam

A total of 11 new projects have announced this week that they joined the Messari Disclosures Registry. The registry includes several projects, the most popular new ones are Cardano, V Systems, Lisk and Beam, all which are in the top 100 crypto projects by market cap. Akropolis, Fusion, Keep, Permission, Orbs and Elrond were also added.

With these new projects becoming a part of it, the registry now has a total of 54 projects. Back when it was launched at the end of last year, the Messari registry had only 12.

The Messari Registry

The registry was created to bring more transparency to the crypto market. Each project can decide on its own whether to participate. If the project does participate, they disclose information about their business to investors, which can check the database at any time before they invest in it.

According to the founder of Messari, Ryan Selkis, being able to find basic information about cryptocurrencies is essential to make good investments, which are able to let the industry move forward.

It was in order to distribute information freely that the registry was first created back in 2018. With the new companies that were listed now, the Messari Disclosures Registry is set to become even more important. Cardano alone has a market cap of over a billion USD and a large community, so its entrance is bound to attract more curious investors to the database.

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Author: Daniel W