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Range-Bound Trading explained by Binance Academy. How does sideways market work?

Binance Academy Binance Academy 16.03.2023 00:08
TL;DR Range-bound strategies refer to methods by which traders capitalize on a market that’s moving sideways — also known as a sideways market. For example, users trading in sideways conditions will repeatedly buy an asset low at the resistance level, and then sell it high at the support level. Read the full article on Binance.com How Does A Sideways Market Work? To understand range-bound strategies, traders must first understand how a sideways market (or a ranging market) works. As the name implies, a sideways market is a trading environment in which price action moves in a horizontal channel between high and low prices. The idea is that the sideways movement creates relatively predictable highs and lows for trading assets. You can use some technical indicators like Average True Range (ATR) and High Low Bands (HLB) to identify range-bound markets. Of course, predicting the market's behavior with 100% accuracy is impossible. Traders trying to capitalize on a sideways market may, for instance, miss an impending breakout or worse — experience heavy loss on a bearish downtrend.  What Is Range-Bound Trading? While it originates from traditional markets like the stock exchange and Forex, range-bound trading is also popular among crypto traders. Crypto traders take advantage of sideways markets by identifying the major support (low price) and resistance (high price) levels. Assets at the support level trend line offer an optimal chance to buy low, while traders sell high when assets reach the resistance trend line. This area where prices oscillate back and forth is called the range, also known as the price channel. Here’s an example to help you understand better: Let’s say an asset has routinely moved between $50 and $53 over the past few days. Traders using a range-bound strategy would buy the asset at $50 (support) and sell the asset at $53 (resistance).  Read next: Facebook and Instagram parent Meta has announced discontinuing NFT support on mentioned platformed | FXMAG.COM The upside is significantly lower than timing a breakout but markets don’t permanently trend in one direction. Sometimes, the market will pause and move sideways before continuing its prior trend. On the other hand, the market may be in a period of indecision before the opposition forces a reversal. What Are The Different Types of Range-Bound Trading Strategies? Spot After traders have identified the range, the most straightforward strategy is to place a buy order near support and a sell order near resistance. Breakouts and breakdowns The inherent risk of range-bound strategies is mistiming a breakout or worse, a downward breakdown.  Traders often mitigate this risk by setting stop-loss orders near the asset’s support and resistance levels. If the asset breaks the price channel, traders often change their strategy or wait until range-bound conditions return. Range-Bound Trading Example and Automated Trading Strategies To save time on tedious work, such as analyzing charts and manually placing orders, some crypto users leverage products designed to mimic range-bound trading strategies. These products allow users to leverage a sideways market without placing a trading order. They usually provide an accessible interface that:  Places limits on the downside and upside risks. Allows users to enter and exit the market within a more flexible timeframe. Binance’s product Range Bound, for example, simplifies the complex strategies required when traders face a sideways market. When users subscribe to Range Bound, two scenarios may unfold. Scenario 1 If the asset stays within the set price range during the subscription period, the user will receive rewards based on the potential annual percentage rate (APR) displayed on the settlement date.  Scenario 2 If the asset touches or exceeds the set price range during the subscription period, the user will receive less than their initial deposit amount.  The most apparent risk in trading range-bound assets is ending up on the wrong side of the market. Cryptocurrency is a volatile asset that is hard to predict. No individual, trading strategy, or algorithm can perfectly speculate price action.  Even though a market may be ranging, thereby creating seemingly identical patterns, there is no certainty when the asset will approach or break the trend lines. Assets are either stagnant or locked in until the buy or sell price levels are triggered. Furthermore, traders who don’t set stop-loss orders are exposed to additional risk of loss. Users may also receive less than the amount they initially deposited for certain range-bound products if the underlying asset’s reference price exceeds the predetermined price range. Moreover, once traders subscribe to a range-bound product, their assets are locked and they won’t be able to cancel or redeem them before the settlement date. Closing Thoughts Range-bound trading can be a viable strategy for experienced traders who are aware of their risk tolerance and have a solid understanding of technical analysis. Given the volatile nature of crypto markets in general, building a sound range-bound trading strategy requires effort, discipline, and vigilance.  If you're considering trading on a sideways market, you can use the examples listed in this article as a starting point. As always, traders should do their due diligence before investing in any financial opportunity. Further Reading A Beginner's Guide to Cryptocurrency Trading Strategies A Complete Guide to Cryptocurrency Trading for Beginners Trading Psychology: How to Trade Without Emotions Disclaimer and Risk Warning: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Where the article is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Binance Academy. Please read our full disclaimer here for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. This material should not be construed as financial, legal or other professional advice. For more information, see our Terms of Use and Risk Warning.
Cross-Chain Interoperability Solutions Have The Potential To Significantly Improve

Cross-Chain Interoperability Solutions Have The Potential To Significantly Improve

Binance Academy Binance Academy 14.03.2023 09:18
This article is a community submission. The article is contributed by Derek Yoo, the CEO of PureStake, a development team for the Moonbeam platform for cross-chain connected applications. TL;DR  Cross-chain interoperability enables applications to communicate and interact with each other across different blockchain networks. This allows for the transfer of data and value between disparate systems, providing increased connectivity and seamless integration.  What Is Interoperability in Blockchain?  Interoperability in the context of blockchains refers to a blockchain’s capacity to freely exchange data with other blockchains. Cross-chain interoperability allows smart contracts on different chains to communicate with each other without having to send the actual tokens between chains. For example, assets, services, and transactions are recorded on a blockchain as documentation. Whatever activity takes place on one blockchain can be represented on another blockchain with the right interoperability solution. This means applications work with any asset or service regardless of which blockchain they are on. Why Is Interoperability Important?  Blockchains today are in a similar position as the early days of the internet: there are many isolated ecosystems unable to exchange information.  This lack of interoperability and connectivity poses a significant obstacle to the broader adoption of blockchain technology, as it prevents the seamless flow of data and value across different networks.  From a developer's perspective, each deployment constitutes an isolated and independent instance, resulting in the backend contracts being unconnected and unaware of each other. For example, a decentralized exchange (DEX) DApp may need to be deployed on Ethereum, BNB Chain, and Polygon networks individually. It leads to each version of the DApps being isolated.  As a user, the multi-deployment approach can present several challenges. It doesn't allow for the seamless transfer of tokens from one blockchain to another. This is usually done in a process in which assets are destroyed on the source blockchain and minted again on the destination blockchain using a third party bridge. The process can be time-consuming and confusing, leading to fragmented data islands and poor user experience. The security risks associated with holding assets across multiple blockchains can also be significant, opening the door for hacks and potential loss of funds. Cross-Chain Interoperability Solutions  Cross-chain connectivity is improving as developers build solutions making it easier to connect and transfer data and value across various networks. This can unlock new possibilities for more user-friendly and interconnected blockchain applications. There are different approaches to improving cross-chain interoperability. Here, we list some examples to showcase a wide array of solutions.  Chainlink Chainlink is developing the Cross-Chain Interoperability Protocol (CCIP), which is an open-source standard for enabling cross-chain communication, including messaging and token transfers. The goal of CCIP is to enable a universal connection between hundreds of blockchain networks using a standardized interface. It has the potential to reduce the complexity of building cross-chain applications and services. Wormhole The Wormhole protocol is a generic interoperability protocol that allows for the transfer of tokens and messages between different blockchain networks. Messages on a source chain are observed by a network of guardians who verify and facilitate transfers to target chains.  Developers using Wormhole can build cross-chain decentralized applications called xDapps. LayerZero LayerZero is an omnichain interoperability protocol for lightweight message passing between blockchains, providing secure and reliable message delivery with configurable trustlessness.  LayerZero's ultra-light nodes (ULN) are smart contracts that provide block headers of other bridged chains to improve efficiency. The ULN is only triggered on-demand and the smart contract communicates with an oracle and a relayer through the LayerZero endpoint. This design allows for lightweight and efficient cross-chain communication. Hyperlane Hyperlane is a delegated proof of stake (PoS) chain protocol that validates and secures cross-chain communication via configurable consensus methods. In Hyperlane's network, each validator is responsible for validating every chain that Hyperlane is connected to, ensuring that cross-chain communication is secure and accurate. Inter-Blockchain Communication Inter-Blockchain Communication (IBC) is the standard protocol for blockchain interaction in the Cosmos Network, which is designed to enable interoperability between different blockchains. IBC defines a minimal set of functions that are specified in the Interchain Standards (ICS), which define how blockchains can communicate and exchange data with each other. One example is Osmosis, a DEX that enables users to swap tokens between different blockchains. Osmosis utilizes the IBC protocol to enable seamless swaps of tokens from different chains, allowing token holders to directly benefit from the interoperability that IBC offers. Avalanche Warp Messaging Avalanche Warp Messaging (AWM) is designed to be flexible and allow developers to create their own messaging specifications to power communications. The AWM specification itself requires an array of bytes, an index of who participated in the BLS Multi-Signature, and the BLS Multi-Signature. AWM makes it easier for developers to build powerful DApps on the Avalanche network. BTC Relay BTC Relay is a chain relay to be deployed in a live setting. It enables the submission of Bitcoin block headers to Ethereum. By doing so, it provides a way to verify the inclusion of Bitcoin transactions on the Ethereum blockchain, creating a trustless bridge between the two networks. Cross-Consensus Message Format The Cross-Consensus Message Format (XCM) allows different consensus systems to communicate with each other on Polkadot. With the successful merger of XCM version 3, developers can build applications that enable bridges, cross-chain locking, exchanges, NFTs, conditionals, context-tracking, and more.  For example, the Moonbeam XCM SDK primarily supports XCM token transfers, allowing developers to interact with the Polkadot network using XCM. Axelar Axelar offers a solution for cross-chain communication through the use of the General Message Passing protocol, allowing developers to build decentralized applications that can operate across multiple blockchain networks. Axelar also provides secure interchain communication through delegated PoS (dPoS) for users bridging tokens. For example, Axelar's bridging app, Satellite, connects the Ethereum-based BUSD to Cosmos, enabling interoperability between the two ecosystems. Benefits and Limitations of Interoperability The benefits of blockchain interoperability is clear. Users can potentially conduct transactions across different blockchain networks seamlessly, without the need for centralized intermediaries. It also reduces fragmentation, improves interoperability within the broader blockchain ecosystem, and opens up new business boundaries and models. There are some limitations to these solutions, however. Different blockchains may have different security solutions, consensus algorithms and programming languages, which can add to the technical complexity. These solutions can potentially increase the probability of attacks and present new governance challenges among different blockchain networks. Closing Thoughts Cross-chain interoperability solutions have the potential to significantly improve the efficiency and functionality of blockchain networks by enabling communication, data, and value transfers among different networks.  The future development of cross-chain interoperability is expected to foster greater innovation between different blockchain networks and new possibilities for blockchain applications. These can lead to a more connected and user-friendly blockchain ecosystem. For widespread use, however, various cross-chain interoperability solutions need to achieve more stability and security. It’s unclear which solution will provide the most efficient, stable and secure tools.   Further Reading: What’s a Blockchain Bridge? What Is Layer 0 in Blockchain? What Is Layer 1 in Blockchain? Disclaimer and Risk Warning: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial advice, nor is it intended to recommend the purchase of any specific product or service. Please read our full disclaimer here for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. This material should not be construed as financial advice. For more information, see our Terms of Use and Risk Warning.    
There Are Many Ways To Join A Crypto Community

There Are Many Ways To Join A Crypto Community

Binance Academy Binance Academy 12.03.2023 10:31
TL;DR The crypto and blockchain world can be intimidating for those wanting to start their journey. The ever-evolving nature of blockchain and the sheer amount of information often overwhelm beginners. Finding a community of like-minded people can be a great way to get you started in the crypto space. Introduction Web3 is a term describing the next iteration of the World Wide Web. It differs from its predecessor, Web2, as it’s built on fundamental principles of decentralization, trustless collaboration, censorship resistance, and ownership. Web3 applications allow users to interact or exchange data without the need for intermediaries. While we aren’t exactly living in a Web3 world quite yet, there’s a community of people that are aiming to make that happen. Developers, investors, influencers, and other crypto enthusiasts have been working on a variety of Web3 projects, from infrastructure to decentralized apps (DApps). Crypto communities are composed of people who are passionate about crypto. Community members could bond over their love for NFTs, DeFi, Layer 2 solutions, and all things crypto-related. Crypto communities are essential for sharing knowledge, and blockchains like Bitcoin, BNB Chain, and Ethereum typically have their own communities. Relatively technical concepts, such as mining or Proof of Work (PoW), have become common knowledge thanks to the efforts of these crypto communities in creating more accessible information. Through their collective advancement of knowledge and education, crypto communities have proven to be a significant driving force for the blockchain industry. Due to the borderless nature of crypto, communities often exist online and communicate through discussion forums, chat rooms, and social media. For example, the crypto Twitter community is a niche group of investors, developers, companies, and influencers, each championing their own crypto cause on the platform. Staying updated Joining a crypto community is an excellent way to stay updated on new trends, technologies, concepts, products, and tools. This allows you to make more informed decisions and participate in time-sensitive events. Finding a mentor Throughout your research, have you ever encountered complex technical papers or Web3 publications? Being in a community of developers, crypto entrepreneurs, and other experts can help make certain topics easier to understand and research. Gaining an edge As part of an active community, you are given an edge by having access to the latest information that is yet to be widely known. You can gain insight into developing trends and learn from people with similar experiences. Additionally, a community's collective wisdom can help you make better decisions, network with other professionals, and stay updated on industry developments. Customer service Some communities have official administrators and managers. Rather than struggle alone, investors can receive direct feedback and assistance from members and administrators alike. Starting a business Informal conversations between community members could be the driving force behind new innovations. You can share business insights, discuss opinions, and exchange information through casual chats. Within a community, you might even find your future team members or business partners. Sense of belonging Are you team Layer 1 or Layer 2? Do you have a favorite NFT artist? Even if you’re the only crypto nerd in your friend circle, you’re bound to find others like you. Explore projects and forums As mentioned above, most projects and blockchains have their own established communities. To be part of the action, visit their websites or socials – including Telegram, Twitter, Discord, or Facebook. Alternatively, if you’re entering the crypto space alone with no specific community in mind, Reddit could also be a place to start. Reddit is an online forum where crypto enthusiasts can read crypto news, view user-submitted analyses, and participate in discussions. Some of the crypto communities on Reddit include /r/bitcoin, /r/btc, /r/binance, and /r/cryptocurrency. Be vocal Engaging in online conversations with others through the comments section of relevant crypto posts can be an easy way to find like-minded people. Share your opinions and interests; start engaging in discussions and activities. Enroll in classes Look for a Web3 course that interests you. Online or offline, the classroom can be a great place to start meaningful discussions about Web3 and form new connections.  Meetups Attending a blockchain or crypto-related meetup, participating in an online discussion forum, or joining a social media group are great ways to connect with knowledgeable people. Some blockchain events facilitate networking parties, business matchmaking, and AMAs. Participating in these can help you gain exposure and meet new community members. Contribute to a project or cause Find a community that thrives on participating in the development of crypto. The blockchain ecosystem is collaborative by nature – its tenets of borderlessness, open-source, decentralization, and trustlessness all help to foster collaboration.  Many projects in the crypto space adopt an open-source approach, where the source code used to build their technology is available to the public and can be modified to a degree. This allows community members to provide solutions and innovations faster. One such community is GitHub, an online platform that facilitates collaboration between developers and users. It allows developers to share code and work together on open-source projects. Users can also discuss ideas, give feedback, and offer assistance. Platforms like GitHub also organize events such as hackathons and meetings to promote community involvement. It’s also not uncommon for projects to launch incentive-based events called bounty programs to encourage people to contribute to their growth. What Are the Risks in Crypto Communities? Like any other online community, crypto communities come with their own risks. One of the main risks associated with crypto communities is the potential for fraud. As mentioned, communities are often open to anyone. This means that scammers and bots can join the group. For example, you may receive a direct message from someone claiming to be a group admin. Do take extra care to verify that this is not a scammer trying to get your money. Scammers may try to get your personal information or private keys through a malicious link or other types of cryptocurrency scams. There is also the risk that the community will differ from what you initially expected. For example, the community may be based solely on hype to drive up token prices. This can create a culture of greed and speculation that may differ greatly from the original reason you joined the community. Similarly, crypto communities can be filled with misinformation, making it difficult to separate facts. Therefore, be careful when making investment decisions based on community conversations.   Conclusion Depending on your interests and experience, there are many ways to join a crypto community. Whether pursuing a personal financial goal, a new business venture, or an unfamiliar topic to learn, having a community to collaborate with can be helpful. Share insights, form a network of like-minded individuals, and grow from each others’ mistakes. You could even find your future business team! From bouncing ideas off each other to providing moral support, having people to help you is crucial for success. Further Reading How to Set Personal Financial Goals and Reach Them Crypto vs Stocks: What Is The Difference? Top 7 Technologies that Power the Metaverse What Is Web 3.0 and Why Does It Matter? Disclaimer and Risk Warning: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial advice, nor is it intended to recommend the purchase of any specific product or service. Please read our full disclaimer here for further details. Digital asset prices can be volatile. The value of your investment may go down or up, and you may not get back the amount invested. You are solely responsible for your investment decisions, and Binance Academy is not liable for any losses you may incur. Not financial advice. For more information, see our Terms of Use and Risk Warning.
Cross-Chain Interoperability Solutions Have The Potential To Significantly Improve

For Dexs Higher Revenue Can Attract More Users

Binance Academy Binance Academy 09.03.2023 10:55
TL;DR Decentralized finance (DeFi) protocols offer decentralized financial services via smart contracts and charge fees for those services. When a DeFi project’s revenue increases, it attracts more users and liquidity. Introduction Choosing between different DeFi protocols can take plenty of time and effort. Many seem similar, so how do we know which one is the best for generating passive income from our crypto? An essential step is understanding a platform’s revenue and how much of it is shared with its users. You can then use this information to make an informed decision on where to invest your assets. Learn more on Binance.com How DeFi Protocols Function Decentralized finance (DeFi) protocols offer a range of financial services that operate via smart contracts. For example, a DeFi protocol could offer decentralized exchange services, loans, and liquidity pools, all run via smart contracts on a blockchain. All you need to access and use these services is a wallet and some crypto to cover your transaction fees. There’s almost no limit to the financial services DeFi can offer. You can access exchange services, money markets, derivatives, and savings products in the DeFi world. All of these services are permissionless and disintermediated in nature. How DeFi Protocols Generate Revenue DeFi services’ operating costs come from the computing power needed to run smart contracts. Users typically cover this amount with the gas fees they pay. However, there are also other additional costs for services such as development and maintenance.  DeFi protocols charge fees for their services to cover these costs and generate a profit. Decentralized exchanges (DEXs) Users swapping tokens on a DEX must pay a fee to utilize its services. For example, a trade may incur a 0.3% fee for the DEX operator's treasury or liquidity reserves. Lending protocols Users who borrow from a lending protocol must pay a borrowing fee. Some of this will go to paying the liquidity provider (other users who have provided capital), while the rest will go to the protocol. Why Revenue Is Important Beyond covering a protocol’s costs, improved revenue and profits can also benefit stakers. DeFi projects often maintain a revenue-sharing model via their governance token holders. They also may use revenues to increase APRs for stakers or liquidity providers on their platforms.  For DEXs, higher revenue can attract more users and in turn, improve liquidity. It can also boost APY for yield aggregators if they benefit from combining users’ staked funds for “bribes” as network validators. To summarize, we can describe a project’s inflows and revenues in a circular fashion: Popular projects attract liquidity, which attracts more users and forms a virtuous cycle. Higher trading traffic and liquidity lead to lower slippage and faster execution. More users improve legitimate trading volume, which leads to more revenue. Revenue is shared with staked users, which provides more liquidity. This loop also attracts users who want to engage in yield farming. Those looking to invest their money can increase their chances of maximizing their gains with compound interest. The more successful a project is, the more liquidity and, in turn, the more yield farmers it will attract. This process generates more revenue that can be used to improve a protocol’s offering. How to See How Much DeFi Protocols Generate DeFi operates on-chain, which means almost all transactional information — depending on the blockchain used — is verifiable. Blockchain explorer is easily accessible by everyone, but that doesn’t mean we can always understand the extent of a protocol’s revenue. There are a number of blockchain data aggregators that simplify the task so you can better understand each protocol’s revenue. With a Google search and some research from trusted sources, you should be able to find metrics, revenues, and stats on DeFi protocols’ revenues. These figures can help you make more informed investment decisions. Closing Thoughts Revenue is a crucial metric to study, whether you’re looking at a project’s real yield or basic fundamentals. You can wisely invest only if you understand how a protocol generates and shares its revenue. You can further understand the topic by diving into DeFi 2.0, yield farming, and general financial topics on Binance Academy. Further Reading What Is Yield Farming in Decentralized Finance (DeFi)? | Binance Academy What Is DeFi 2.0 and Why Does it Matter? | Binance Academy Introduction to DeFi | Binance Academy   Disclaimer and Risk Warning: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial advice, nor is it intended to recommend the purchase of any specific product or service. Please read our full disclaimer here for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. This material should not be construed as financial advice. For more information, see our Terms of Use and Risk Warning.  
Cross-Chain Interoperability Solutions Have The Potential To Significantly Improve

Yield Farming Can Be A Viable Passive Income Strategy

Binance Academy Binance Academy 08.03.2023 10:34
TL;DR Yield farming is the practice of using one’s crypto assets to generate passive income or yield. It typically involves providing liquidity to DeFi protocols, or lending or staking crypto assets in exchange for rewards. Some yield farmers use all of them simultaneously. As with all crypto opportunities, yield farming is not without its risks. Impermanent loss, bugs in smart contracts or protocols, and exorbitant gas fees are some risks yield farmers face. Hence, yield farmers must do thorough research before committing their funds to a yield farm. Some common ways to do so include investigating the team, security, type of token, and timeline associated with the investment. While DYOR (doing your own research) cannot entirely prevent crypto losses, it can help to mitigate risks. Learn more on Binance.com Introduction In its simplest form, yield farming uses idle crypto assets to earn crypto interest. Through smart contracts, owners can lend their crypto to others and receive rewards in return. Within the decentralized finance (DeFi) ecosystem, there are a few ways to generate yield from crypto, the most common ones being: Lending assets using a crypto lending protocol. Staking cryptocurrency on a protocol. Becoming a liquidity provider (LP) for a DeFi protocol (e.g. decentralized exchange (DEX)) and receiving LP rewards (see LP tokens). Many yield farmers use one or more of the above methods to build a passive income stream. Like other DeFi opportunities, however, yield farming has its risks. Whether you intend to become a yield farmer or are just interested in its mechanics, it's good to do your due diligence. The Risks of Yield Farming Impermanent loss Probably the most prominent risk in yield farming and the DeFi space in general is impermanent loss. When crypto owners participate in yield farming, they often lock up their crypto for a specified period, making those assets relatively illiquid. Impermanent loss occurs when the price of your tokens changes from the price at which you deposited them into the pool. The bigger the change, the bigger the loss, regardless of the price's direction.   Although yield farming fees earned may help offset the loss, this is not always the case and can present a major risk. If you want to learn more, read our in-depth explanation of impermanent loss. Hacks Smart contracts control DeFi protocols and a single bug in the smart contract code could cause the value of a token to plummet to zero. This risk is compounded by the fact that a malicious hacker could exploit the bug or security issue to manipulate the project.  Scams Someone with bad intentions and the right skillset can create a DeFi platform and pass it off as a legitimate yield farming site.  After all, DeFi projects are open-source, transparent, and permissionless, meaning anyone can copy the underlying code and create a new project. While early adopters are typically rewarded more handsomely, think twice before doing so, as high rewards come with high risks. Newly launched yield farming platforms may be harder to research as user reviews and information on them tend to be limited. Be especially cautious with such platforms as you may be unable to withdraw your deposited funds or claim your rewards even if you change your mind after committing to such a platform. High gas fees When a network is congested, it usually leads to a rise in gas fees. Such unprecedented spikes affect yield farmers with less funds, as gas fees can eat into their earned fees. Even if they choose to leave their assets in the pool, other risks like impermanent loss and liquidation may still affect them. Common Ways to DYOR Security Ensuring the security of yield farming and DeFi protocols is critical in preventing malicious attacks. To reduce the risk of such attacks, it is essential to ascertain that a reputable source has audited the smart contract code. Look for DeFi projects that have had their smart contracts thoroughly audited. Countless DeFi projects start by forking from successful DeFi protocols such as UniSwap. However, many fail due to network effects or a lack of liquidity, among other reasons. Worse, some are even deliberately created as scams. For example, a fraudulent team may create a fork, try to attract liquidity to it, then disappear with the newly acquired tokens. It is also important to know the Total Value Locked (TVL) in the project, which is the total amount currently locked in the protocol. If the TVL seems suspiciously low, it's an indicator that even less capital is locked up in the protocol, which in turn means less yield for farmers. Token Different pools offer different opportunities for various assets, including stablecoins and blue-chip tokens (i.e., tokens from established blockchain projects such as Bitcoin and Ethereum). Protocols can also distribute their own tokens to stakers and liquidity providers. It's essential to remember that a protocol can bind its token to its services in several ways. For instance, it may use the token as a marketing tactic to attract more users. Therefore, always be sure of what token you’ll receive from yield farming. Timeline New DeFi protocols often offer higher rewards to early adopters in efforts to increase liquidity. It works also as an incentive for being willing to take a risk by investing in and using a new or untested product or service.  However, while early adoption may lead to greater rewards, it is also a high-risk venture — the yield farming protocol may not be successful. As such, the money and time invested may not be recouped.  Yield farmers should weigh their options carefully and consider all the factors, as well as other opportunities. Due to possible token inflation and the resulting price decline, it's not sustainable for new DeFi protocols to offer high rewards for long periods, especially if they reward farmers using their native tokens. Team When browsing for information, look out for errors from the main yield farming website – mistakes can indicate a sloppy or worse, fraudulent team. Ideally, the website should be well-designed, have no typos or broken links, and look professional. Another way to assess a team's reliability is whether or not it is subject to regular audits conducted by an external and independent auditor. A team should be well-balanced and comprise a healthy mix of entrepreneurs, product managers, developers, software engineers, marketing professionals, and financial experts. It’s a bonus if the project also has renowned advisors on its board. If you can, conduct research on individual team members as well. For starters, check their social media accounts to learn about their past achievements, as well as their activity on platforms like LinkedIn, GitHub, Reddit, TradingView, and YouTube. How they interact on social media can indicate their skillset, experience, and influence. Generally speaking, an established team with a good reputation is less likely to be running a scam. Closing Thoughts Yield farming can be a viable passive income strategy for those experienced at effective risk management. However, given the volatile nature of yield farming and crypto markets in general, it requires vigilance, effort, and time to plan a robust yield farming strategy. If you're considering yield farming, the aforementioned approaches can be used as a starting point to mitigate risks. In addition, you should dive deeper and do your due diligence before investing in any financial opportunity. Further Reading What Is Yield Farming in Decentralized Finance (DeFi)? A Beginner's Guide to Decentralized Finance (DeFi) A Beginner's Guide to Earning Passive Income With Crypto Why and How to Do Your Own Research (DYOR) When Investing in Crypto Disclaimer and Risk Warning: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial advice, nor is it intended to recommend the purchase of any specific product or service. Please read our full disclaimer here for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. This material should not be construed as financial advice. For more information, see our Terms of Use and Risk Warning.      
There Are Many Ways To Join A Crypto Community

Different Scaling Solutions Of Crypto: Optimistic And Zk Rollups

Binance Academy Binance Academy 06.03.2023 11:36
TL;DR The increasing popularity of crypto and blockchain has led to developers seeking a way to scale by improving a system’s ability to accommodate the growing demand. Sharding, sidechains, state channels, and rollups are some approaches to scaling. Blockchain rollups offload certain transaction processes to a secondary chain while storing transaction data on the main Layer 1 blockchain. In this article, we explore the two types of rollups in the crypto space – optimistic and zero-knowledge. Introduction Due to rising crypto demand, some blockchains’ abilities are tested to their limits. This could lead to network congestion and expensive transaction costs. To address this, scaling solutions are being developed and tested to increase transaction throughput and speed. Such solutions can be categorized into two groups: Layer 1 and Layer 2. Layer 1 scaling solutions like sharding make changes directly to the main blockchain (also known as a base or Layer 1 blockchain). Layer 2 scaling solutions run on top of a Layer 1 blockchain. Examples of Layer 2 scaling solutions include state channels, sidechains, and blockchain rollups. Blockchain rollups are protocols designed to enable high throughput and lower costs. They aim to fix the problem many popular blockchains face by bundling transactions and reducing data size for more efficient transaction processing and storage. Learn more on Binance.com What Are Blockchain Rollups? Rollups are a Layer 2 solution that bundles up transaction data and transfers it off the main chain (or Layer 1 blockchain). Transaction execution is then performed off-chain, while assets are held in an on-chain smart contract. The transaction data will be sent back to the main blockchain upon completion. Theoretically, any Layer 1 solution can implement rollups to increase transaction efficiency in terms of throughput. With rollups, a blockchain can increase the number of transactions processed and recorded within a certain timeframe. Presently, there are two types of rollups – optimistic rollups and zero-knowledge (zk) rollups. What Is an Optimistic Rollup? Optimistic rollups are protocols that increase transaction output by bundling multiple transactions into batches, which are processed off-chain. After that, the transaction data is recorded on the main chain with data compression techniques that help lower cost and increase speed. According to Ethereum, optimistic rollups can improve scalability by 10 to 100 times. How do optimistic rollups validate transactions? Transactions are valid by default to increase efficiency. You may wonder if this would compromise security in favor of transaction processing speeds. However, optimistic rollups use a fraud-proving scheme, with a dispute-resolution period known as a ‘challenge period.’ Within this period, anyone monitoring the rollup can submit a challenge to verify if the transaction has been processed accurately through a fraud proof. If that batch is found to have errors, the rollup protocol will rectify them by re-executing the wrong transaction(s) and updating the block. Parties who approve incorrect transactions for execution will be penalized. Limitations of optimistic rollups While there isn’t a transaction validation process, there is a challenge period that zk rollups do not have, which increases the time taken for transactions to be finalized. The finality of chains with optimistic rollups is also lower than that of zk rollups. Finality is the measure of how long a user has to wait for a reasonable guarantee that the transactions will not be reversed or altered. Withdrawals on optimistic rollups are delayed as the challenge period needs to lapse before funds can be released. In contrast, withdrawals from zk rollup take effect as soon as the zk rollup smart contract verifies the validity proof. Some people also view optimistic rollups as less efficient than zk rollups. With optimistic rollups, all transaction data must be posted on-chain to finalize transactions. With the zk counterparts, only validity proofs are required on-chain. What Is a Zero-Knowledge (zk) Rollup? Zero-knowledge rollups are protocols that bundle transactions into batches to be executed off the main chain. For every batch, a zk rollup operator will submit a summary of the required changes once the transactions in the batch have been executed. Operators have an additional role in producing validity proofs to prove that the changes are accurate. These proofs are significantly smaller than transaction data; therefore verifying them is quicker and cheaper. On Ethereum, zk rollups reduce transaction data via compression techniques when writing transactions to Ethereum as calldata, effectively reducing user fees. How do zk rollups validate transactions? Zk rollups use zero-knowledge proofs (ZKP) to validate transactions. ZKPs are used by someone called a prover who wants to convince another party, known as a verifier, that they possess knowledge, thereby verifying a transaction. This is how it works: The prover provides a mathematical proof that only they can generate. The verifier uses this mathematical proof to verify the validity of the transaction. The information can receive validity proof without revealing the contents to the verifier. Benefits of zk rollups Zk rollups can offer a high level of security for users if implemented properly. One key feature contributing to this security is the use of zero-knowledge validity proofs. They ensure that the network can only function in a valid state and that operators cannot steal user funds or corrupt the system in any way. Another benefit of zk rollups is that users don't need to monitor the network. Zk rollups store all data on-chain and require validity proofs. Therefore an operator can't cheat, and users don't have to worry about network misbehavior. Additionally, zk rollups let users withdraw their funds onto the mainnet without having to cooperate with operators by proving token ownership via data availability. Similar to optimistic rollups, zk rollups also implement an off-chain execution mechanism to increase transaction execution speeds. Differences Between zk Rollups and Optimistic Rollups Below is a summary of the differences between optimistic and zk rollups. What’s the Future of Zero-knowledge & Optimistic Rollups? The future of zero-knowledge and optimistic rollups is still a question mark. As more people adopt crypto and blockchain, rollups may play a vital role in improving blockchain efficiency. Blockchains will likely continue to test various scaling solutions, including sharding, rollups, and layer 0. We could also see new solutions being created and implemented, either along with or instead of rollups. Closing Thoughts Since the demand for crypto has increased and stretched the limits of current blockchains, many have proposed different scaling solutions. In this article, we examined the inherent differences between two varieties of rollups, optimistic and zk rollups. As rollups continue being battle-tested, we may eventually see a superior variety that could help us reach scalability for mass adoption. Further Reading Blockchain Layer 1 vs. Layer 2 Scaling Solutions zk-SNARKs and zk-STARKs Explained What Is Zero-knowledge Proof and How Does It Impact Blockchain? Disclaimer and Risk Warning: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial advice, nor is it intended to recommend the purchase of any specific product or service. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. Not financial advice
The professionals handling the FTX bankruptcy case billed a total of $38 million plus expenses for January, according to court records

How To Take Advantage Of The Potential Financial Opportunity Of Cryptocurrencies?

Binance Academy Binance Academy 26.02.2023 12:37
TL;DR Personal financial goals are the monetary objectives you set to take control of and manage your finances. There are many ways to reach your personal financial goals, from monetizing your hobby to drawing up a savings plan. As the cryptocurrency industry grows,  it’s becoming another potential tool for meeting personal financial objectives. What Are Personal Financial Goals? Setting personal financial goals is the first step towards properly planning out your personal spending, earnings, savings, and investments. Without a goal, it’s hard to budget for how much you can spend and how much you should save. You’d also find it difficult to work methodically towards putting your personal finances on solid footing. In fact, research has identified that setting the right goals is linked to greater success. These goals differ from person to person, depending on various individual factors. For some, it could be to save $1,000 every month. For others, it’s reaching $10 million in net worth. There are different strategies to reach your financial goals, but the two central methods are always to reduce spending and increase income. How to Set Your Personal Financial Goals When it comes to goal-setting, it’s important to use the widely-recognized SMART method, which stands for specific, measurable, action-oriented, realistic, and time-bound. Personal financial goals need to be specific and measurable. Aiming to save $1,000 per month is specific and measurable, whereas saying you’ll save “some” money is not. These objectives also need to be action-oriented. For example, limiting your monthly spending to 50% of your salary requires action, but “I want to be rich” is too vague an objective that’s not action-oriented. It’s also essential to create goals that are realistic and set within specific time frames. One common method is to organize your goals according to short-term, mid-term, and long-term goals. Short-term goals can be accomplished within a few months or a year, mid-term goals (such as becoming debt-free or saving for your child's education) up to five years, and long-term goals (such as buying a property or investing in a retirement fund) more than five years.  It’s good practice to always attach deadlines to your financial goals. Growing your investment portfolio to $10,000 by the end of 2023 is more likely to motivate you than the same goal without a deadline. Additionally, if you have multiple financial targets, make sure to plan and prioritize them carefully. For instance, if you want to buy a property in 10 years, you can work backwards from saving for a $200,000 down payment to determine how much you need to save each month.  Strategies to Achieve Financial Goals There are two main approaches to meeting your financial objectives: reducing spending and increasing income. Reduce spending Track your spending: Before you can cut your spending, you need to understand where your money is going. Monitor your spending habits for a month and record all your expenses.  Create a budget: Impose a limit on your spending to manage your money better by adjusting your spending habits and cutting down on unnecessary expenses. Live within your means: Spend less than you earn; sticking to a budget can help you avoid overspending. Also, try to avoid impulse purchases. It can be tempting to buy something on a whim, but wait for at least 24 hours before making a decision. Save consistently: Make sure to save a specific portion of your income each month. For instance, you can aim to save at least 10% of your monthly salary. Increase income Savings with interest: Maximize your savings by putting them in an interest-bearing savings account.  Side hustle: If your main job allows, take on a part-time job to generate extra income. You could explore the gig economy or even start your own business. If you have a hobby, think about how to monetize it.  Passive income: Passive income is income earned without having to actively work for it. This type of income is often generated from investments, such as crypto, forex, stocks, and bonds. Other types of passive income include royalties from intellectual property and rental income. How Crypto Can Help Achieve Your Financial Goals Start a crypto savings account If you’re not interested in active trading, you can consider generating passive income from your crypto holdings through a crypto interest-bearing savings account. Deposit your digital assets and earn interest on them instead of letting them stay idle. Spend with crypto cards When purchasing necessities, look for deals that allow you to save when you spend. This includes cashback reward programs and crypto cards that allow you to get back a percentage of your purchase amount in the form of credit, cash, or crypto.  Start a crypto reselling business Thinking of taking on a new income stream? Consider reselling or distributing crypto gift cards to earn a profit. Crypto gift cards allow users to top up their crypto accounts and pay for goods and services conveniently and securely. Become an NFT artist  Monetizing your hobby can be a great way to turn something you love doing into a profitable venture. If you’re a creator, there’s a billion-dollar market for non-fungible tokens (NFTs). There are numerous NFT marketplaces that allow artists to mint their own media creations and kickstart their NFT creator journey. Invest in crypto to diversify your portfolio Diversification is a risk mitigation technique commonly used in investment management. Crypto can be used to diversify one’s investment portfolio, though how correlated crypto markets are from other financial markets is debatable. Ultimately, investing in crypto may be suitable for some investors as a diversification tool, depending on one’s risk appetite and investing style. Always remember that crypto investing is risky and not meant for everyone. For a step-by-step guide to crypto investing, start here. Tips for Using Crypto to Reach Your Goals DYOR Crypto has its merits as an investment vehicle, but it also involves taking risks that other income-earning opportunities like freelancing do not entail. Hence, remember to always do your own research (DYOR) before taking on any financial risk. There are many ways to do so, and the more extensive your research, the more adept you’ll be at identifying potential risks. Risk management Risk management is a critical tool for investing or trading success. A good general rule to follow is to invest only as much as you’re willing to lose, and employ strategies to protect your investments. For starters, read A Beginners Guide to Risk Management to learn how to manage your assets responsibly.  Understand crypto tax liabilities If you’ve started working towards your financial goals by investing in crypto, the next step is to understand and address your crypto tax liabilities. In some jurisdictions, a penalty may be imposed if you don’t pay the required taxes on your crypto earnings.   Closing Thoughts Depending on your comfort level, current needs, and priorities, there are several ways to reach your financial goals. Some of these strategies can be used in combination with one another or on their own, depending on your preferences. Regardless of your approach, remember not to rush into any potential financial opportunity, crypto or otherwise. Rushing in with a “high risk, high reward” mentality may backfire and set you back on your goals.  Further Reading What Is Forex Trading? Interest Rates Explained What Are Crypto Cards and How Do They Work? How to Make Your Own NFTs Why and How to Do Your Own Research (DYOR) When Investing in Crypto Disclaimer and Risk Warning: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial advice, nor is it intended to recommend the purchase of any specific product or service. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. Not financial advice.
The Greeks Help Options Traders Make More Informed Decisions About Their Positions

The Greeks Help Options Traders Make More Informed Decisions About Their Positions

Binance Academy Binance Academy 23.02.2023 09:27
TL;DR The Greeks — Delta, Gamma, Theta and Vega — are financial calculations that measure an option's sensitivity to specific parameters. Delta (Δ) shows the rate of change between an option's price and a $1 movement in the underlying asset's price. Gamma (Γ) measures the rate of change of an options delta, based on a $1 change in the underlying asset's price. Theta (θ) measures the sensitivity of an option's price relative to the time it has left to mature (or expire). Vega (ν) measures an option's price sensitivity based on a 1% move in implied volatility. Introduction Participating in derivatives trading requires more knowledge than in the spot markets. For options trading, the Greeks are among the most important set of new tools to master. They provide a basic framework for managing risk and help you make more informed trading decisions. After familiarizing yourself with the Greeks, you'll be able to better understand options market analysis and take part in wider discussions on puts, calls, and other options topics. What Are Options Contracts? An options contract is a financial instrument that gives you the right — though not the obligation — to purchase or sell an underlying asset at a predetermined price (the strike price); it also has an expiration date.  Options contracts fall into two main categories: calls and puts. A call option allows its holder to buy the underlying asset at the strike price within a limited timeframe, while a put option enables its holder to sell the underlying asset at the strike price within a limited time frame. An option's current market price is known as its premium, which its seller (known as a writer) receives as income. You may have already noticed some similarities if you're familiar with futures contracts. Options offer both hedging and speculative opportunities, and the parties involved take opposing bearish and bullish positions. You may want to lock in a specific price for an underlying asset to better plan your future financial position. You may also want to buy or sell the underlying asset at an advantageous price based on a predicted price movement. What Are the Different Greeks? In options trading, you'll regularly find discussions on the Greeks. These financial calculations measure an option's sensitivity to specific parameters, such as time and volatility. The Greeks help options traders make more informed decisions about their positions and assess their risk. There are four major Greeks used in options trading: Delta, Gamma, Theta, and Vega.  Delta (Δ) Delta (Δ) shows the rate of change between an option's price and a $1 movement in the underlying asset's price. The calculation represents the option's price sensitivity relative to a price movement in the underlying asset. Delta ranges between 0 and 1 for call options and 0 and -1 for put options. Call premiums rise when an underlying asset's price increases and fall when the asset's price declines. Put premiums, on the other hand, fall when the underlying asset's price rises and rise when the asset's price drops. If your call option has a delta of 0.75, a $1 increase in the underlying asset's price would theoretically increase the option premium by 75 cents. If your put option has a delta of -0.4, a $1 increase in the underlying asset's price would decrease the premium by 40 cents. Gamma (Γ) Gamma (Γ) measures the rate of change of an options delta based on a $1 change in the underlying asset's price. This makes it the first derivative of delta, and the higher an option's gamma, the more volatile its premium price is. Gamma helps you understand the stability of an option's delta and is always positive for calls and puts. Imagine your call option has a delta of 0.6 and a gamma of 0.2. The underlying asset’s price increases by $1, and its call premium by 60 cents. The option's delta then also adjusts upwards by 0.2 to 0.8. Theta (θ) Theta (θ) measures the sensitivity of an option's price relative to the time an option has left to mature (or expire). More specifically, an option's theta shows the premium price change per day as it moves towards expiration.  Theta is negative for long (or purchased) positions and positive for short (or sold) positions. For the holder, an option's value always diminishes over time ceteris paribus (provided all other things are equal); this applies to both call and put contracts. If your option has a theta of -0.2, its price will change by 20 cents daily the closer it reaches maturity. Vega (ν) Vega (ν) measures an option's price sensitivity based on a 1% move in implied volatility. It relies on a calculation of implied volatility, the market's forecast of a likely movement in the underlying asset's price. Vega is always a positive value because as an option's price increases, its implied volatility also increases ceteris paribus.  In general, higher volatility makes options more expensive because there is a greater likelihood of meeting the strike price. An options seller will benefit from a fall in implied volatility, while a buyer will be disadvantaged. Let's look at a basic example: if your option has a vega of 0.2 and the implied volatility rises by 1%, the premium should increase by 20 cents. Can I Use the Greeks for Cryptocurrency Options Contracts? Cryptocurrencies are commonly used as underlying assets with options. Using a cryptocurrency makes no difference when calculating or using the Greeks. However, do note that cryptocurrencies can be highly volatile, which means that Greeks dependent on volatility or direction can also experience large swings.   Closing Thoughts With the four major Greeks mastered, you'll be better equipped to assess your risk profile at a glance. Options trading has a relatively high degree of complexity, and understanding tools like the Greeks is essential to trading responsibly. Furthermore, the four Greeks covered here aren't the only ones that exist. You can continue your options studies by exploring the minor Greeks. Further Reading What Are Perpetual Futures Contracts? What’s the Difference Between a CEX and a DEX? What Are Forward and Futures Contracts? What Is the Risk/Reward Ratio and How to Use It Disclaimer and Risk Warning: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial advice, nor is it intended to recommend the purchase of any specific product or service. Please read our full disclaimer here for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. Not financial advice. For more information, see our Terms of Use and Risk Warning.
Cross-Chain Interoperability Solutions Have The Potential To Significantly Improve

A Permissioned Blockchain Would Be More Suitable

Binance Academy Binance Academy 23.02.2023 09:23
TL;DR Permissionless blockchains are open to anyone to use. You can even participate in their consensus mechanisms, given that you meet specific requirements. Bitcoin, Ethereum, and BNB Chain are all examples of permissionless blockchains, which are typically transparent and decentralized. Permissioned blockchains, on the other hand, require invitations to join. They’re typically used in private business settings and tailored for certain use cases. Power is restricted to a small group of validators who make most of the network decisions. Transparency can be limited, but network upgrade time and scalability are often greatly improved. Introduction Have you ever considered the type of blockchain you're using beyond proof-of-work (PoW) versus proof-of-stake (PoS)? Each blockchain can actually be considered either permissioned or permissionless. Understanding these two categories can help you learn more about a blockchain's characteristics and how fluid they are.   Learn more on Binance.com What Are Permissioned and Permissionless Blockchains? There is more than one type of blockchain. One of the most significant distinctions is whether a blockchain is permissioned or permissionless. You're most probably already familiar with the permissionless variety, where anyone can have a hand in using and running it. Network usage and joining the validation process are also open to anyone. Bitcoin, BNB Chain, and Ethereum are all examples of permissionless blockchains. A permissioned blockchain requires participants to be granted permission to participate. These blockchains are typically used in private settings, such as within an organization or business. For example, a company may use the Hyperledger Fabric blockchain framework to create a permissioned blockchain for its supply chain system. Should you want to take part in the network, you’d need an admin to specifically grant you access. Brief History and Background Blockchain technology can be traced back to Satoshi Nakamoto's Bitcoin whitepaper. The technology presented in the whitepaper is a permissionless blockchain where unaligned users generate consensus. This permissionless trend has continued as Bitcoin's model has influenced multiple blockchain generations. The values and ethos of Bitcoin and its descendants are suited to public permissionless blockchains. Blockchain’s characteristics have also proven attractive to private applications. Its immutability, transparency (in some aspects), and security have created a desire for blockchains that offer a more permissioned experience.  To fulfill this desire, blockchain developers have created permissioned frameworks or custom blockchains for third-party use. As previously mentioned, Hyperledger Fabric is one such framework. Quorum, MultiChain, and Ethereum Geth also provide private structures for enterprise needs. Key Characteristics The characteristics below don't always apply to every permissioned or permissionless blockchain. However, in general, you'll find most of them fit the archetypes presented. Pros and Cons Permissionless blockchains: Benefits Decentralization potential. Not every permissionless blockchain is decentralized, but they typically have the potential to be highly decentralized. Anyone can participate in the consensus mechanism or use a permissionless network should they wish and have the resources to do so. Group consensus. Users can actively participate in and decide on network changes. Validators and network users can also “vote with their feet”, and unpopular changes can lead to forked versions of a network. Ease of access. Anyone can create a wallet and join a permissionless network as these networks are easily accessible and have relatively low barriers to entry. Permissionless blockchain: Drawbacks Scalability challenges. Permissionless blockchains must handle large user bases and high traffic volume. Network upgrades to improve scalability must pass group consensus to be implemented effectively. Bad actors. Because anyone can join permissionless blockchains, there is always the risk of bad actors on such networks. Excessive transparency. Most information on permissionless blockchains is free for anyone to view, leading to potential privacy and security concerns. Permissioned blockchains: Benefits Scalability. A permissioned blockchain is typically run by an entity with some degree of control over validators. Upgrades can therefore be implemented fairly easily. Easy customization. A permissioned blockchain can be built for a specific purpose, making it efficient at a particular function. Should needs change, the blockchain can be easily customized. Controlled degree of transparency. A permissioned blockchain operator can determine a suitable level of transparency for the network, depending on its use case. Invitation-only entry. You can control exactly who can and can’t participate in the blockchain. Permissioned blockchains: Drawbacks Centralization. Power is likely controlled by a central entity or small group of validators chosen by the blockchain’s owner. This means that network decisions probably won’t include all stakeholders. Vulnerability to attacks. Permissioned blockchains typically have fewer validators, making their consensus mechanism less resistant to attacks. Censorship risk. Network collusion or updates introduced by the blockchain operator presents the risk of censorship. Should enough actors agree to do so, information on the blockchain could be altered. Should I Use a Permissioned or Permissionless Blockchain? The answer to this question is fairly simple. If you’re looking to create a service open to all, you need a permissionless blockchain. However, having a permissionless blockchain doesn’t mean you must follow the standard set of principles and goals. In fact, your chain could be centralized and permissionless at the same time. You could also include more elements of privacy should you wish. If you’re looking to use a blockchain in a private environment, such as a business or government setting, a permissioned blockchain would be more suitable. Again, your blockchain doesn’t have to follow the usual characteristics associated with permissioned blockchains; it could be completely transparent and open for public view. Closing Thoughts Even though you'll likely only encounter permissionless blockchains as a crypto investor or trader, understanding how they are different from permissioned blockchains is useful. It's easy to have a singular view of distributed ledger technology (DLT) that fits the transparent, public, and decentralized crypto model. However, these parameters can change — in fact, many private enterprises use permissioned blockchains that don't fit the conventional traits of such blockchains. Further Reading What Is Blockchain Technology? The Ultimate Guide Permissionless Blockchain How Does Blockchain Work?
The Crypto Market Is Also Highly Volatile, So Drastic Price Swings Require Traders To Think Fast

The Crypto Market Is Also Highly Volatile, So Drastic Price Swings Require Traders To Think Fast

Binance Academy Binance Academy 16.02.2023 09:09
TL;DR Trading psychology represents the emotional aspect of a trader’s decision-making process. Every trader, to a certain extent, has emotional triggers. The two primary emotions that affect traders are fear and greed — both can lead to poor decisions, such as going all-in on one asset or panic-selling out of fear.  Even if a trader knows how to perform technical and fundamental analysis at a high level, a weak or anxious mind easily swayed by emotions can be highly detrimental to their portfolio — especially in a volatile trading environment like crypto. Learn more on Binance.com What Is Trading Psychology? Trading psychology refers to the psychological factors that influence how people trade in markets like crypto or stocks. It is based on the idea that emotions can significantly impact a trader's decision-making process.  For example, greed can drive a trader to make a high-risk decision, like buying a cryptocurrency at its peak due to its rapidly rising price. In contrast, fear can result in a trader prematurely exiting the market. FOMO is particularly prevalent when an asset has appreciated significantly in value over a relatively short period of time. This has the potential to cause a person to make market decisions based on emotion rather than logic and reason. Every trader is affected by emotion. For most people, losing money is painful, while earning money is joyful.  Why It’s Important To Understand Your Mindset When Trading Fear and greed are the two primary emotions in trading.  Fear can drive a trader to avoid all risks and possibly miss out on a successful trade. On the other hand, greed can lead to excessive risk-taking to maximize profits, such as buying an asset at its peak because its price is rising rapidly.  Experienced traders know to strike a balance between fear and greed. Fear protects traders from taking unnecessary risks, while greed motivates them to capitalize on opportunities. Over-reliance on either emotion, however, typically leads to irrational trading decisions.  Learning to trade with the correct mindset is as important as performing fundamental analysis or knowing how to read a chart. By understanding and controlling their emotions, traders can make informed decisions and minimize losses. Making unemotional decisions is, of course, easier said than done. Traders deal with a variety of challenges every day that can invoke an emotional response. Here are a few examples. Unrealistic expectations: Trading is not a get-rich-quick scheme. People who go into trading with this idea are in for a rude awakening. Like any skill, trading requires years of practice and discipline. Losing: Even the best traders have gloomy days. For new traders, losing trades is a tough concept to grasp and often leads to even more failed attempts to try and outwit the market. Winning: While winning feels good, the downside is that traders may feel a sense of over-confidence or invincibility, and may be under the false perception that they can’t lose. This can lead to riskier decisions and ultimately, losses.  Market sentiment and social media: Beginner traders are easily influenced by what people say on the Internet. Negative sentiment on social media can lead to fear, which can result in panic selling. It’s equally unwise for a trader to blindly follow an influencer’s advice to buy a specific token, especially if the influencer is sponsored by the token’s project and paid to promote it. How to Use Trading Psychology to Become a Better Trader Think long term Set achievable goals. A realistic plan of what you want to achieve helps prevent over-trading or getting too emotional due to unrealistic expectations. It will also help keep your focus on the long-term goal rather than short-term gains or losses. Take a break  Regular breaks can provide much-needed perspective and clarity on where things stand. If you hit a string of winning trades, step back before you get carried away into overtrading. Additionally, pulling all-nighters will cause you to burn out and as a result, make bad decisions. Breaks are beneficial not only for your portfolio but also for your own physical and mental well-being. Learn from mistakes Everyone makes mistakes when trading. Instead of getting angry at yourself or worse, trying to recoup your losses with even more capital, go back and analyze what went wrong. Implement new strategies based on what you learn from previous mistakes and you’ll be more prepared the next time.  Set rules   Create a detailed trading plan and stick to it. This plan will outline how you approach different situations and will help keep your reactions under control during times of stress. Some examples include using stop-losses and take-profits, limiting how much money you can gain or lose in one day, and a risk management strategy with which you’re comfortable.  With a clear plan in mind, you’ll know exactly what steps need to be taken without allowing an emotional response to derail your decisions, ensuring you don’t stray from the initial plan you set out for yourself before entering a position.  Is Trading Psychology Different In Crypto? Trading psychology holds true for any asset class, including crypto. Humans are all similar to a certain degree, particularly regarding money. Most people, for instance, don’t enjoy losing money and vice-versa. Additionally, traders of any asset feel excited when they’re on a hot streak.  However, there are a few unique psychological challenges crypto traders face. Unlike the stock market, which closes on weekends, the cryptocurrency market is open 24/7. As a result, crypto traders always have access to trading tools, their assets, and, most importantly, potential opportunities. For a trader who is prone to making emotionally charged trading decisions, having 24/7 access can be very costly.  The crypto market is also highly volatile. Coin prices have doubled before dropping back to where they started — all within a day. Such drastic price swings require traders to think fast while maintaining a strong sense of discipline.  For example, professional traders don’t jump onto a rapidly rising asset just because everyone is talking about it, nor do they decide to risk all their capital because the market closes green for a day. Read next: USD/JPY Is Above 133.30, GBP/USD Droped Form $1.21 to $1.20, The Aussie Pair Is Trading Below $0.69| FXMAG.COM Closing Thoughts Emotions are one of the most common pitfalls in crypto trading. Learning to control your emotions by understanding your mindset and emotional triggers is an invaluable skill that will protect you from chasing gains or hitting the panic button and liquidating your portfolio.  Ultimately, becoming a good trader requires years of consistent learning and practice. There’s no shortcut or life hack to getting rich by trading. Follow a strategy that suits your financial situation, keep practicing, and don’t let fear or greed force you to make a decision you wouldn’t usually make.  Further Reading The Psychology of Market Cycles What Is the Crypto Fear and Greed Index? What Are Behavioral Biases and How Can We Avoid Them? What Are Stop-Loss and Take-Profit Levels and How to Calculate Them? How to Trade Crypto Responsibly Disclaimer and Risk Warning: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial advice, nor is it intended to recommend the purchase of any specific product or service. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. Not financial advice
In Crypto, You Could Prove You Own A Private Key Without Revealing It

In Crypto, You Could Prove You Own A Private Key Without Revealing It

Binance Academy Binance Academy 15.02.2023 13:52
TL;DR A zero-knowledge proof allows one party (a verifier) to determine the validity of a statement given by another party (the prover) without any knowledge of the statement’s content. For example, Binance may want to prove it has backed its users’ funds fully in reserves without revealing all individual user balances. A “Proof of Reserves” could be constructed with a Merkle tree that protects against falsification of its internal data, in this case, its total net customer balances, being liabilities of the exchange to its users. This can then be combined with a zk-SNARK (a zero-knowledge proof protocol) that ensures users can check their balance forms part of the total net user asset balance without knowing individual balances. Introduction In light of market events, the security of crypto assets in custody has become a critical topic. Blockchain users highly value transparency and openness but also support privacy and confidentiality. This creates a dilemma when proving reserves of funds held by custodians. Often, there is a trade-off between transparency, trust, and data confidentiality. However, this doesn’t have to be the case. By combining zero-knowledge proof protocols like zk-SNARKs with Merkle trees, we can find an effective solution for all parties. Learn more on Binance.com What Is Zero-Knowledge Proof? A zero-knowledge proof allows one party (a verifier) to determine the validity of a statement given by another party (the prover) without any knowledge of the statement’s content. Let’s look at a simple example. You have a locked safe that only you know the solution to. The safe, for the sake of the example, cannot be picked, forced, or opened in any other way than by knowing the combination. This fact is also established, verified, and known by your friend participating in the experiment. You state you know the combination to your friend, but you don’t want to give it away or open the box in front of them. On top of the box is a hole that your friend can put a note through. To make this a zero-knowledge proof, your friend shouldn’t have any extra information about the process other than the given statement. You can prove to your friend that you know the combination by opening the box, telling them what was written on the note, and closing it again. At no point have you, however, revealed the combination. For a more advanced example, see our What Is Zero-knowledge Proof and How Does It Impact Blockchain? article. Why Do We Use Zero Knowledge Proof? Zero-knowledge proofs are suitable for proving something without revealing sensitive information or details. This could be the case if you don’t want to hand over your financial or personal information that could be inappropriately used. In crypto, you could prove you own a private key without revealing it or digitally signing something. A cryptocurrency exchange may also want to prove the status of its reserves without revealing confidential information about its users, including their individual account balances.  For these examples (and many others), a zero-knowledge proof would use algorithms that take a data input and return “true” or “false” as an output.  Defining Zero-Knowledge Proofs in Technical Terms A zero-knowledge proof, in technical terms, follows a specific structure with certain criteria. We’ve already covered the prover and verifier roles, but there are also three criteria a zero-knowledge proof should cover: Completeness. If the statement is true, a verifier will be convinced by the provided proof, without the need for any other information or verification. Soundness. If the statement is false, a verifier won’t be convinced of a statement’s truth by the provided proof. Zero-knowledge. If the statement is true, the verifier doesn’t learn any information other than the statement being true. What Is a zk-SNARK? A zk-SNARK (Zero-Knowledge Succinct Non-Interactive Argument of Knowledge) is a proof protocol that follows the zero-knowledge principles previously outlined. With a zk-SNARK, you could prove that you know the original hashed value (discussed further below) without revealing what that is. You could also prove the validity of a transaction without revealing any information about the specific amounts, values, or addresses involved. zk-SNARKs are commonly used and discussed within the blockchain and cryptocurrency world. But you may wonder why someone would bother using a zk-SNARK when they could use a simple public and private key pair method to secure the information. However, we would not be able to implement the mathematical proof to ensure no negative balances are included and the sum of the Merkle tree.  In the case of an exchange’s reserves, we want to prove 1:1 backing of customers' balances without the identifiers and balances of each account being made public. In addition, the zk-SNARK technology makes falsifying data even more unlikely. What Is a Merkle Tree? Presenting the summed funds of Binance users’ accounts requires working with a large data set. One way to present this large amount of data cryptographically is to use a Merkle tree. A vast amount of information can be efficiently stored within it, and its cryptographic nature makes its integrity easily verifiable. Hash functions To succinctly encode an input, a Merkle tree depends on the use of hash functions. In short, hashing is the process of generating a fixed-size output from an input of variable size. In other words, when an input of any length is hashed through an algorithm, it will produce an encrypted fixed-length output. So long as the input remains the same, the output will too. This means we can take huge amounts of transactional data and hash it into a manageable output. The output will be radically different if any information is changed in the input. For example, we could take the content of 100 books and input them into the SHA-256 hash function. It would then provide something like this as an output: 801a9be154c78caa032a37b4a4f0747f1e1addb397b64fa8581d749d704c12ea If we then changed a single character of the input (those 100 books), the hash would be completely different, like so: abc5d230121d93a93a25bf7cf54ab71e8617114ccb57385a87ff12872bfda410 That’s an important property of hash functions because it allows for easy verification of data accuracy. If anyone replicates the process of hashing those same 100 books using the SHA-256 algorithm, they will get the exact same hash as the output. If the output is different, we can affirm with certainty that the input was changed. This means there’s no need to individually or manually check for differences between the inputs, which can be labor-intensive. Merkle trees in the cryptocurrency world When storing transaction data on a blockchain, each new transaction is submitted through a hash function, which generates unique hash values. Imagine we have eight transactions (A to H) that we individually hash to get their hashed outputs. These are what we call the Merkle leaf nodes. In the image below, you can see the unique hash value of each letter: hA for A, hB for B, hC for C, etc. We can then take pairs of hashed outputs, combine them, and receive a new hashed output. The hashes of hA and hB hashed together, for example, would give us a new hashed output of hAB known as a Merkle branch. Note that each time a new output is generated, it comes with a fixed length and size, according to the hash function used. Now, we have the data of two transactions (e.g., A and B) combined in one hash (hAB). Note that if we change any information from A or B and repeat the process, our hashed output hAB would be completely different. The process continues as we combine new pairs of hashes to hash them again (see the image below). We hash hAB with hCD to get a unique hash hABCD and do the same with hEF and hGH to get hEFGH. In the end, we receive a single hash representing the hashed outputs of all previous transactions’ hashes. In other words, the hashed output hABCDEFGH represents all the information that came before it. The graph displayed above is called a Merkle tree, and the hashed output hABCDEFGH is the Merkle root. We use Merkle roots in block headers, as they cryptographically summarize all transaction data in a block in a succinct manner. We can also quickly verify if any data has been tampered with or changed within the block. The Limitations of Merkle Trees Let’s return to our CEX reserves example. A CEX wants to prove the 1:1 backing of all its customers’ assets and builds a Merkle tree that hashes together its customer UIDs with their net asset holdings (netting off assets and liabilities) at a token level. Once released (and signed to prove ownership over the Merkle root provided), an individual user would have no way of checking if the Merkle tree is valid without accessing all its inputs. An exchange may have missed including some inputs. It could also create fake accounts with negative balances to alter the total liability. For example, although customers’ assets may total $1,000,000, a fake account could be added with a balance of -$500,000. This would create a reserves target of only $500,000. The case for proof of reserves is different from a block’s Merkle root, as users can see all the transactions a block contains on a blockchain explorer. A CEX, however, won’t want to disclose each account balance for security and data privacy reasons. Customers too would not be happy with their account balances being made public. In this case, the CEX cannot prove that user balances add up to the correct total without making other user balances visible. One solution that exchanges may consider employing is using a trusted third-party auditor. The auditor can check the individual accounts and reserves before finally attesting to the validity of the Merkle root provided. However, for users, this method requires trust in the auditor and the data used for the audit. You don’t have to rely on a third party when you can trust the data. Combining zk-SNARKs With Merkle Trees The above issue is a perfect case for using zk-SNARKs. We want to prove that reserves fully cover user liabilities and aren’t falsified. However, for privacy and security reasons, we don’t want to show the verifier the exact makeup of user balances and reserves.  By using a zk-SNARK, a crypto exchange can prove that all Merkle tree leaf nodes’ balance sets (i.e., user account balances) contribute to the exchange’s claimed total user asset balance. Each user can easily access their leaf node as having been included in the process. The zk-SNARK also ensures any Merkle tree generated doesn’t contain users with a negative total net asset balance (which would imply falsification of data, as all loans are over-collateralized). Also used is a calculation of Binance’s global state, i.e., a list of the total net balance of each asset each Binance customer holds. Let’s take a look at how Binance approaches the situation. To begin, Binance defines the constraints of the computation it wishes to prove and defines them as a programmable circuit. Below is the set of three constraints Binance uses in its model.  For each user’s balance set (Merkle tree leaf node), our circuit ensures that: A user’s asset balances are included in the calculation of the sum of the total net user balances with Binance. The total net balance of the user is greater than or equal to zero. The change of Merkle tree root is valid (i.e., not using falsified information) after updating a user’s information to the leaf node hash. Binance can then generate a zk-SNARK proof for the Merkle tree’s construction according to the circuit. This entails the exchange executing the heavy computation of hashing users’ IDs and balances while ensuring the proof passes the constraints. A verifier will examine the proof (and its publicly released open-source code) to be convinced that the computation is executed with all constraints met. The verification computation takes an extremely short time compared to the proving time. At each Proof of Reserves release, the exchange will publish: 1. The Merkle proof for each user. 2. The zk-SNARK proof and public input (a hash of the list of the total net balance of each asset and Merkle root) of the circuit for all users. Interested parties can verify the Merkle proof, ensuring their individual balances contributed to the Merkle tree root. They can also verify the zk-SNARK proof to ensure the construction of the Merkle tree meets the constraints defined in the circuit. For a more detailed explanation of the zk-SNARK solution and its performance, refer to our How zk-SNARKs Improve Binance’s Proof-of-Reserves System blog. Closing Thoughts zk-SNARKs provide the technology needed to ensure both data integrity and privacy at the same time. Its application for proving reserves and increasing CEX transparency should help build trust in the blockchain industry. For many, a development like this has been long awaited and comes at a pivotal time for CEXs. This is the first version of our zk-SNARK, and we are looking forward to receiving community feedback so we can continue to improve the system. Further Reading (Blog) How zk-SNARKs Improve Binance’s Proof-of-Reserves System (Academy) Proof of Reserves (PoR) (Academy) What Is Proof of Reserves and How it Works on Binance (Announcement) Binance Releases Proof of Reserves System
EOS Offers Its Users Nearly Free Transactions

EOS Offers Its Users Nearly Free Transactions

Binance Academy Binance Academy 15.02.2023 13:42
TL;DR EOS is a Layer 1 blockchain designed to address scalability issues first-and second-generation blockchains face. As the longest-running blockchain after Bitcoin and Ethereum in the industry, it has been used by developers to build blockchain applications and ecosystems. This has, in turn, unlocked use cases in the supply chain, decentralized finance (DeFi), and gaming finance (GameFi) sectors, among others. Learn more on Binance.com Introduction EOS was launched in 2018 using open-source technology from Cayman Island-based company B1. In its early days, EOS was known to outperform other projects, thanks to its technical innovation. However, development slowed, and the venture capital pledged to community projects building on EOS fell through. Faced with these challenges, projects on EOS no longer had the resources needed to continue operating on the network. In solidarity, EOS Block Producers reached a consensus on creating a new entity called the EOS Network Foundation (ENF), which is now responsible for efficiently deploying capital and moving EOS forward. EOS Block Producers also passed a proposal to stop locking up tokens — or token vesting — for use by B1, and the EOS Network became a decentralized autonomous organization (DAO).  On September 21, 2022, to achieve absolute code independence, community engineers led by the ENF shifted away from EOSIO 2.0 to Leap 3.1, the C++ implementation of the new Antelope protocol. Today, with its new features, EOS continues to tackle scalability challenges faced by blockchains. What Is EOS? EOS token EOS uses Delegated proof-of-stake (DPoS) as its consensus mechanism. Its native token, EOS, is a utility token used on the network to purchase system resources, participate in EOS governance, transfer value on native applications, and account for value by investors and speculators. Token holders can also stake their idle EOS tokens to receive a percentage of the fees collected by users who wish to use EOS system resources through the EOS PowerUp Model. Introduction to the EOS Blockchain In many real-world situations, scalability is the most significant barrier to establishing public blockchains. Blockchains’ scalability issue typically emerges when a network grows and its transactions increase.  Commonly debated blockchain performance measures such as swaps per second, transaction throughput, and latency are have yet to achieve a sufficient quality-of-service level in many blockchains. Through its aforementioned ecosystem features, EOS aims to address these limitations without compromising network security or developer freedom. A WebAssembly C++ engine At the core of the EOS blockchain resides a high-performance WebAssembly (WASM) engine that executes smart contract code. This engine is designed to meet the demands of blockchain applications that require far more from a WASM engine than web browsers do. High throughput, faster confirmations, and low latency A good user experience demands reliable feedback with a delay of not more than a few seconds. EOS achieves high transaction throughput because its DPoS mechanism need not wait for all the nodes to complete a transaction to achieve finality. This asynchronous style of validation results in faster confirmations and lower latency, i.e., the time taken for a transaction to be confirmed as accurate after it has been initiated.  EVM integration EOS has an Ethereum-compatible Virtual Machine (EOS EVM) that allows Solidity developers on Ethereum to enjoy the EOS blockchain’s scalability and reliability. This includes nearly free transactions for their users, as well as access to the open-source code libraries and tooling to which they are already accustomed.  Permissions through access keys The underlying design of the EOS blockchain incorporates a comprehensive and highly flexible permissions system to create custom permission models for various use cases. Account owners can grant specific authorizations to third parties while having the power to revoke these permissions at any time. EOS supports hierarchical account structures, which enable any user to manage multiple smart contracts under a single parent account. Alternatively, an account owner can divide the authority required to modify a smart contract across various accounts. Flexibility Due to its protocol design, applications deployed on EOS are upgradeable. This means developers can deploy code fixes, add features, and change the application’s logic as long as they have the necessary authority to do so. EOS also allows developers to deploy smart contracts that cannot be modified. These decisions are left to the discretion of EOS developers rather than at the mercy of the protocol. Programmable resource allocation and governance Developers can modify system smart contracts to create customized economic models and governance rules. Since the core layer of code does not always have to be updated for changes to occur, this on-chain mechanism can be modified using system smart contracts. What Makes EOS Unique? Human-readable accounts EOS leverages human-readable accounts to make it easier for users to remember their own accounts, as well as those with which they interact. Instead of long strings of random characters, EOS accounts usually use recognizable addresses such as “Alice.gm”. Affordable transaction fees EOS offers its users nearly free transactions, making it ideal for sending or receiving micropayments. This addresses one of Web3’s greatest barriers to entry, since gas fees on other chains can add significant costs to a single purchase.  Near-instant finality In cryptocurrency transactions, finality refers to the assurance or guarantee that the transactions cannot be reversed or altered after completion. The speed of a blockchain will impact its finality rate, as it determines how quickly transactions are confirmed and finalized. Currently, EOS’s finality is approximately three minutes — much faster than Bitcoin’s 60 minutes and Ethereum’s six minutes.  In contrast with Web2’s finality, however, three minutes is still slow. Therefore, the ENF and its key technology partners — known as the Antelope coalition — launched the Instant Finality initiative to offer users instant and irreversible transaction settlement. Energy efficiency EOS’ DPoS mechanism allows its nodes to validate transactions more quickly and with fewer network resources. Because it does not involve mining like proof-of-work (PoW) networks, the EOS Network is one of the industry’s more energy-efficient blockchains. Base layer insurance  Recover+ (R+ for short) is a cybersecurity portal and rapid incident response program designed to safeguard EOS DeFi projects and their users with bug bounties and white-hat incentives. With a response program, stolen funds can be recovered swiftly in the event of malicious hacks.  On November 5, 2021, blockchain lending platform Pando Rings was exploited for over $70m. While Pando Rings is not an EOS-based application, the attacker stole over $2m in EOS tokens. Thanks to this program, the Recover+ team was able to intervene and freeze the stolen funds, thereby protecting EOS DeFi users. EOS Working Groups Since the ENF was established in 2021, it has funded several EOS Working Groups for ecosystem improvements. It has also recommended a course of actionable items through “Blue Papers”, which offer suggestions for enhancements in several areas, including core infrastructure, APIs, SDKs, DeFi, and security analysis tooling. EOS Network Ventures EOS Network Ventures (ENV) is a $100m venture capital fund whose mission is to attract capital investment and deploy it to benefit the EOS Network. It also makes strategic equity and token-based investments into tech start-ups in the Web3 space. ENV’s scope includes — but is not limited to — GameFi, the metaverse, eSports, NFTs, and fintech. EOS Network Foundation The EOS Network Foundation (ENF) is a community-led non-profit founded by Yves La Rose in September 2021. Its mission is to identify opportunities for investment, seed funding, and collaboration in pursuit of Web3 innovation. To do so, the ENF coordinates public goods funding and non-financial support for the growth, development, and worldwide adoption of the EOS Network. Since its establishment, multiple public goods programs have been organized and funded, contributing to key EOS developments. On November 9, 2022, the ENF announced that it had initiated a proposal to launch a $100m ecosystem fund to be managed by ENV. Closing Thoughts As the longest-running blockchain after Bitcoin and Ethereum, EOS has overcome past challenges and adapted to present demands since its inauguration. It continues to move towards a robust system, using its performance, flexibility, and scalability to create native Web3 GameFi experiences for both developers and end-users. Further Reading What Is Layer 1 in Blockchain? Proof of Work (PoW) vs. Proof of Stake (PoS) What Is Proof of Work (PoW)?
The Ethereum Is Currently Approaching The Monthly Highs

Ethereum Plans To Implement A Type Of Sharding That Will Help Lower Transaction Costs

Binance Academy Binance Academy 15.02.2023 13:36
EIP-4844, also known as proto-danksharding, is a proposed upgrade to the Ethereum protocol meant to reduce fees and increase transaction throughput. It intends to achieve these objectives by introducing a new transaction type that accepts “blobs” of data. A simple way to understand EIP-4844’s function is the following alliterative phrase: “EIP-4844 bolts blobs onto blocks”. It is a transitional upgrade that will ultimately lead to full danksharding in the future, thereby enabling Ethereum to manage the capacity for a global transaction network.  Introduction For years, Ethereum developers have been seeking solutions to cater to a growing user base. Through what’s known as The Ethereum Upgrades, major improvements like The Merge and rollups have been proposed. These changes have helped Ethereum increase transaction throughput and lower transaction costs. However, fees remain too expensive for many and throughput is not where it needs to be, which slows down the pace of mass adoption. To address this issue, Ethereum has made data sharding its long-term solution. Since deploying data sharding is a long and complex process, EIP-4844 is being proposed as a transitional solution. As such, it will prepare Ethereum for full danksharding that will reach a throughput of around 100,000 transactions per second (TPS) without compromising decentralization or security. Learn more on Binance.com What Is EIP-4844? EIP stands for Ethereum Improvement Proposal, a protocol that allows developers to propose new features and solutions to the Ethereum protocol. Proto-danksharding is named after two Ethereum researchers, Proto Lambda and Dankrad Feist.    To understand EIP-4844, it’s necessary to first understand what sharding is. Simply put, it’s a way of partitioning databases into smaller ones that manage specific data segments, thereby improving the efficiency and performance of these databases.  When applied to blockchain — and Ethereum in particular — sharding takes on some unique features. Ethereum plans to implement a type of sharding, called danksharding, that will help lower transaction costs and increase throughput. Labeled the “scalability killer”, danksharding is expected to increase Ethereum’s TPS to around 100,000.  In comparison, the Ethereum base layer processes around 15 TPS and its layer 2 rollups process around 100 TPS as of Q1 2023. While these numbers are rough estimates, the effect of danksharding is clear: it will allow Ethereum to increase scaling by an order of magnitude. Some of the main differences between danksharding and previous Ethereum and non-Ethereum sharding proposals is that danksharding will attempt to provide more space for blobs of data, rather than for transactions (more on this later).  Another innovation of danksharding is the so-called merged fee market, where only one proposer chooses transactions for all shards, instead of each shard having its own proposer.  To make this merged fee market work and to alleviate the issue of maximal extractable value (MEV), a method called proposer/builder separation will also be implemented. A proposer is a validator of the Ethereum protocol (called a miner before the Ethereum Merge) that chooses which transactions to include in the next block.   EIP-4844 (proto-danksharding) is the step that will come before full danksharding and will increase TPS to approximately 1,000. Most importantly, EIP-4844 will introduce a new transaction type that accepts “blobs” of data — an important element of making full danksharding possible. EIP-4844 is expected to be implemented in the second half of 2023, though there may be delays. How Does EIP-4844 Work? At its core, EIP-4844 will introduce a new transaction type called blob-carrying transactions, which are like regular transactions but with added pieces of information known as binary large objects or “blobs”.  Ethereum contributor Ben Edgington summarizes EIP-4844 with the memorable alliterative phrase, “EIP-4844 bolts blobs onto blocks”. It succinctly describes how blob-carrying transactions entail “blobs” attached to blocks, which increases the amount of data blob-carrying blocks can handle.  This may be confusing as it seems akin to increasing block sizes — a contradiction of Ethereum’s stance against arbitrarily large blocks that would require greater computing power and could thus lead to centralization.  However, there are some critical differences between blockspace and blobspace. Blobs: bounded storage costs and no execution costs, but every node bears a bandwidth cost. Source: Ben Edgington Blobs are large in size but unlike blocks that are stored forever and visible to the Ethereum Virtual Machine (EVM), blobs are only available for a short period of time and are not visible to the EVM. Additionally, blobs reside on the Ethereum consensus layer instead of on the computation-heavy execution layer. Most importantly, blobspace is much cheaper than blockspace.  Aside from introducing blob-carrying transactions, EIP-4844 will also implement execution-layer logic, verification rules, multi-dimensional fee markets, and other system changes required for full danksharding in the future. One thing to note is that even though EIP-4844 will implement most of the logic of full danksharding, it won’t implement any actual sharding. Nevertheless, apart from getting Ethereum one step closer to achieving the cost and throughput levels needed for mass adoption, EIP-4844 can still offer some scaling and cost-saving benefits.      How Will EIP-4844 Benefit Users? EIP-4844 is a protocol upgrade that’s part of Ethereum’s rollup-centric roadmap. Preparation for the implementation of EIP-4844 is moving rapidly, with some devnets having already been run and the specs for the upgrade almost finalized.  Users will see noticeable improvements after EIP-4844’s implementation, mainly in the form of faster transactions and lower fees. The successful implementation of EIP-4844 will also make Ethereum more competitive in the cryptocurrency space. Some users may wonder what they should do if they want to access old blob data that has been deleted. As explained earlier, blobs reside on the Ethereum consensus layer, whose purpose is to provide a highly secure real-time bulletin board for other protocols’ longer-term storage. So, even though blobs are deleted after weeks, their data should still be available in longer-term storage elsewhere. Closing Thoughts EIP-4844 is a highly complicated Ethereum protocol upgrade that’s part of a larger roadmap and that’s connected to other system upgrades, such as proposer/builder separation (PBS) and EIP-1559 blob fee adjustment. While an understanding of EIP-4844 will better prepare average users for the coming changes, one should note that most of that change will come in the form of lower costs and faster transactions. The Ethereum protocol is constantly evolving and improving. EIP-4844 is one of the critical near-future upgrades meant to enhance the network’s capabilities. Successful implementation of EIP-4844 will make Ethereum highly competitive as a global transaction network. Further Reading What Is the Ethereum Arrow Glacier Upgrade? The Merge Ethereum Upgrade: All You Need To Know What Is the Ethereum London Hard Fork? What Is the Ethereum Shanghai Upgrade and How Will It Affect Me? Disclaimer and Risk Warning: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial advice, nor is it intended to recommend the purchase of any specific product or service. Please read our full disclaimer here for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. Not financial advice. For more information, see our Terms of Use and Risk Warning.
Vega Protocol has seen an increase as the protocol is anticipated to go live

Blockchain: Layer 0 - what is it, how does it work, what problems can it solve?

Binance Academy Binance Academy 11.01.2023 12:57
TL;DR Layer 0 protocols are essentially the infrastructure upon which Layer 1 blockchains can be built. As a foundational layer to blockchain networks and applications, Layer 0 protocols are among many solutions aiming to fix the challenges the industry faces, such as scalability and interoperability.  Learn more on Binance.com Introduction What makes up a blockchain ecosystem? One way to categorize different parts of such an ecosystem is to classify them by layers, as if they were Internet protocols. A blockchain ecosystem can be classified according to the following layers:  Layer 0: The underlying infrastructure upon which multiple Layer 1 blockchains can be built. Layer 1: Base blockchains used by developers to build applications, such as decentralized applications (DApps). Layer 2: Scaling solutions that handle activities off Layer 1 blockchains to ease their transactional loads. Layer 3: Blockchain-based application layer, including games, wallets, and other DApps. However, not all blockchain ecosystems can be classified into these categories. Some ecosystems may miss certain layers, while others can be categorized as different layers, depending on the context.  Layer 0 protocols help to remedy the challenges faced by Layer 1 networks built with a monolithic architecture, such as the Ethereum network. By creating a more flexible base infrastructure and letting developers launch their own purpose-specific blockchains, Layer 0 hopes to more efficiently tackle problems such as scalability and interoperability.  What Problems Can Layer 0 Solve? Interoperability Interoperability refers to the ability of blockchain networks to communicate with one another. This property enables a more tightly interwoven network of blockchain-enabled products and services, which in turn offers a better user experience.  Blockchain networks built on the same Layer 0 protocol can interact with one another by default, without the need for dedicated bridges. Using different iterations of cross-chain transfer protocols, Layer 0 allows an ecosystem’s blockchains to build upon one another’s features and use cases. Some common outcomes of this are enhanced transaction speeds and greater efficiency. Scalability  A monolithic blockchain such as Ethereum is often congested because a single Layer 1 protocol is providing all the critical functions, such as transaction execution, consensus, and data availability. This creates a bottleneck for scaling that Layer 0 can alleviate by delegating these critical functions to different blockchains.  This design ensures that blockchain networks built upon the same Layer 0 infrastructure can each optimize certain tasks, thereby enhancing scalability. For example, execution chains can be optimized to handle high numbers of transactions per second.  Read next: API Key - what is it? Differences between API and API Key, best practices| FXMAG.COM Developer flexibility To encourage developers to build on them, Layer 0 protocols often provide easy-to-use software development kits (SDKs) and a seamless interface to ensure developers can easily launch their own purpose-specific blockchains.  Layer 0 protocols give developers great flexibility to customize their own blockchains, allowing them to define their own token issuance models and control the type of DApps they want built on their blockchains. How Does a Layer 0 Protocol Work? There are different ways in which Layer 0 protocols operate. Each differs in its design, features, and focuses. But generally, Layer 0 protocols serve as the main and primary blockchain backing up transaction data from various Layer 1 chains. While there are clusters of Layer 1 chains built on Layer 0 protocols, there are also cross-chain transfer protocols that enable tokens and data to be transferred across different blockchains.  The structures and relationships of these three components can differ greatly from one Layer 0 protocol to another. Here, we’ll look at some examples:  Polkadot Ethereum co-founder Gavin Wood designed Polkadot to allow developers to build their own blockchains. The protocol uses a main chain — called the Polkadot Relay Chain — and each independent blockchain built on Polkadot is known as a parallel chain, or parachain. The Relay Chain functions as a bridge between parachains to enable efficient data communication. It uses sharding, a method of splitting blockchains or other types of databases, to make transaction processing more efficient. Polkadot uses proof-of-stake (PoS) validation to ensure network security and consensus. Projects that want to build on Polkadot participate in auctions to bid for slots. Polkadot’s first parachain project was approved in an auction in December 2021. Avalanche Launched in 2020 by Ava Labs with a focus on DeFi protocols, Avalanche uses a tri-blockchain infrastructure consisting of three core chains: the Contract Chain (C-chain), the Exchange Chain (X-chain), and the Platform Chain (P-chain). These three chains are configured specifically to handle major functions within the ecosystem, in order to enhance security while aiming for low latency and high throughput. The X-Chain is used to create and trade assets, the C-Chain to create smart contracts, and the P-Chain to coordinate validators and subnets. Avalanche’s flexible structure also makes fast and cheap cross-chain swaps possible.   Cosmos Founded in 2014 by Ethan Buchman and Jae Kwon, the Cosmos network consists of a PoS blockchain mainnet called Cosmos Hub and customized blockchains known as Zones. Cosmos Hub transfers assets and data between the connected Zones and provides a shared layer of security.  Each Zone is highly customizable, allowing developers to design their own cryptocurrency, with custom block validation settings and other features. All Cosmos apps and services hosted in these Zones interact via the Inter-Blockchain Communication (IBC) protocol. This enables assets and data to be freely exchanged across independent blockchains. Closing thoughts Depending on how they are designed, Layer 0 blockchains can potentially address some of the industry’s challenges, such as interoperability and scalability. However, how successful Layer 0 blockchain adoption will be remains to be seen. There are many competing solutions aiming to achieve similar goals. How significant a role Layer 0 blockchains will play in solving the industry’s challenges will depend on their ability to attract developers to build on these protocols, and whether the applications hosted on them provide real value to users.  Further Reading What Is Layer 1 in Blockchain? Blockchain Layer 1 vs. Layer 2 Scaling Solutions What Is the Blockchain Trilemma?
API Key - what is it? Differences between API and API Key, best practices

API Key - what is it? Differences between API and API Key, best practices

Binance Academy Binance Academy 11.01.2023 12:43
TL;DR An application programming interface (API) key is a unique code used by an API to identify the calling application or user. API keys are used to track and control who is using an API and how they’re using it, as well as to authenticate and authorize applications — similar to how usernames and passwords work. An API key may come in the form of a single key or a set of multiple keys. Users should follow best practices to improve their overall security against API key theft and avoid the related consequences of their API keys being compromised. Learn more on Binance.com API vs API Key In order to understand what an API key is, you must first understand what an API is. An application programming interface or API is a software intermediary that allows two or more applications to share information. For example, CoinMarketCap’s API allows other applications to retrieve and use crypto data, such as price, volume, and market cap. An API key comes in many different forms — it can be a single key or a set of multiple keys. Different systems use these keys to authenticate and authorize an application, similar to how a username and password are used. An API key is used by an API client to authenticate an application calling the API.  For instance, if Binance Academy wants to use the CoinMarketCap API, an API key will be generated by CoinMarketCap and used to authenticate the identity of Binance Academy (the API client), which is requesting API access. When Binance Academy accesses CoinMarketCap’s API, this API key should be sent to CoinMarketCap along with the request.  This API key should only be used by Binance Academy and should not be shared with or sent to others. Sharing this API key will allow a third party to access CoinMarketCap as Binance Academy, and any actions by the third party will appear as if they come from Binance Academy. The API key can also be used by the CoinMarketCap API to confirm if the application is authorized to access the requested resource. Additionally, API owners use API keys to monitor API activity, such as the types, traffic, and volume of requests.  What Is an API Key?  An API key is used to control and track who is using an API and how they’re using it. The term “API key” can mean different things for different systems. Some systems have a single code but others can have multiple codes for a single “API key”.    As such, an “API key” is a unique code or a set of unique codes used by an API to authenticate and authorize the calling user or application. Some codes are used for authentication and some are used for creating cryptographic signatures to prove the legitimacy of a request.  These authentication codes are commonly referred to collectively as an “API key”, while the codes used for cryptographic signatures go by various names, such as “secret key”, “public key”, or “private key”. Authentication entails identifying the entities involved and confirming they are who they say they are. Authorization, on the other hand, specifies the API services to which access is permitted. The function of an API key is similar to that of an account username and password; it can also be connected to other security features to improve overall security.  Each API key is typically generated for a specific entity by the API owner (more details below) and each time a call is made to an API endpoint — which requires user authentication or authorization, or both — the relevant key is used. Read next: 2023 Predictions: EUR/USD will eventually fall once the penny drops that Fed rates will remain above 5% for the year. Ivan Brian talks cryptocurrencies and Forex in 2023 | FXMAG.COM Cryptographic Signatures Some API keys use cryptographic signatures as an additional layer of verification. When a user wants to send certain data to an API, a digital signature generated by another key can be added to the request. Using cryptography, the API owner can verify that this digital signature matches the data sent. Symmetric and Asymmetric Signatures  Data shared through an API can be signed by cryptographic keys, which fall under the following categories: Symmetric keys These involve the use of one secret key to perform both the signing of data and the verification of a signature. With symmetric keys, the API key and secret key are usually generated by the API owner and the same secret key must be used by the API service for signature verification. The main advantage of using a singular key is that doing so is faster and requires less computational power for signature generation and verification. A good example of a symmetric key is HMAC. Asymmetric keys These involve the use of two keys: a private key and a public key, which are different but cryptographically linked. The private key is used for signature generation and the public key is used for signature verification. The API key is generated by the API owner but the private key and public key pair is generated by the user. Only the public key needs to be used by the API owner for signature verification, so the private key can remain local and secret.  The main advantage of using asymmetric keys is the higher security of separating signature generation and verification keys. This allows external systems to verify signatures without being able to generate signatures. Another advantage is that some asymmetric encryption systems support adding a password to private keys. A good example is an RSA key pair.  Are API Keys Secure?  The responsibility of an API key rests with the user. API keys are similar to passwords and need to be treated with the same care. Sharing an API key is similar to sharing a password and as such, should not be done as doing so would put the user’s account at risk.  API keys are commonly targeted in cyberattacks because they can be used to perform powerful operations on systems, such as requesting personal information or executing financial transactions. In fact, there have been cases of crawlers successfully attacking online code databases to steal  API keys. The consequences of API key theft can be drastic and lead to significant financial loss. Furthermore, as some API keys don’t expire, they can be used indefinitely by attackers once stolen, until the keys themselves are revoked. Best Practices When Using API Keys Because of their access to sensitive data and their general vulnerability, using API keys securely is of paramount importance. You can follow these best practice guidelines when using API keys to improve their overall security:  Rotate your API keys often if possible. This means you should delete your current API key and make a new one. With multiple systems, it’s easy to generate and delete API keys. Similar to how some systems require you to change your password every 30 to 90 days, you should rotate your API keys with a similar frequency if possible. Use IP whitelisting: When you create an API key, draw up a list of IPs authorized to use the key (an IP whitelist). You can also specify a list of blocked IPs (an IP blacklist). This way, even if your API key is stolen, it still can’t be accessed by an unrecognized IP. Use multiple API keys: Having multiple keys and splitting responsibilities among them will lower security risk, as your security will not hinge on a single key with extensive permissions. You can also set different IP whitelists for each key, further lowering your security risk.  Store API keys securely: Don’t store your keys in public places, on public computers, or in their original plain text format. Instead, store each using encryption or a secret manager for better security, and be careful not to accidentally expose them.  Do not share your API keys. Sharing your API key is similar to sharing your password. In doing so, you give another party the same authentication and authorization privileges as you. If they are compromised, your API key can be stolen and used to hack into your account. An API key should only be used between you and the system that generates it. If your API key is compromised, you need to first disable it to prevent further damage. If there is any financial loss, take screenshots of key information related to the incident, contact the related entities, and file a police report. This is the best way to increase your chances of regaining any lost funds.  Closing Thoughts API keys provide core authentication and authorization functions, and users must manage and protect their keys carefully. There are many layers and aspects to ensuring the safe usage of API keys. Overall, an API key should be treated like a password to your account. Further Reading General Security Principles 5 Common Cryptocurrency Scams and How to Avoid Them
Binance Academy summarise year 2022 featuring The Merge, FTX and more

Binance Academy summarise year 2022 featuring The Merge, FTX and more

Binance Academy Binance Academy 27.12.2022 23:56
TL;DR As 2022 draws to a close, we wave goodbye to what will be remembered as a particularly challenging period for many players in the crypto and blockchain space. Crypto winter set in, but the turning of the seasons in trading markets did not diminish the adoption and development of blockchain technology. There is no doubt that the industry has made advances since 2021, despite some shrill voices that would prefer to focus on short-term drama. The crypto market entered 2022 off the back of an all time high and fought to hold its level until Terra fell apart in May, dragging crypto prices down in the process. Confidence remained shaky as the fallout took down hedge fund Three Arrows Capital and crypto lender Celsius Network.  Then in November, Coindesk reported a liquidity crisis at FTX, triggering a sell-off that culminated in FTX filing for bankruptcy amid reports of lax financial controls, dubious loans, and personal use of customer deposits by FTX execs. This time, the contagion took down crypto lenders BlockFi and Genesis Global Capital. Learn more on Binance.com In Context It is true that there has been a pullback from the all-time-highs in a 12-month window. That said, Chainalysis has nonetheless observed in its 2022 Crypto Adoption Index blog post, it is “important to note that global adoption remains well above its pre-bull market 2019 levels.” TVL in DeFi fell from a high of nearly $190 billion to $39 billion, with the collapse of Terra accounting for a single-event drop of about $75 billion. However, much of this loss of value may be attributable to the fall in crypto prices, so perhaps DeFi may still have its day in the sun again when the market recovers. NFT trading activities have also waned, with trading volumes falling back to 2021 levels. The highs of April and May 2022 had set a high bar, and journalists were quick to pounce on the stark contrast between those heady weeks and the comparatively muted trading towards the end of the year. However, it may be argued that there remains strong use cases and as-yet unexplored applications relating to NFT. Should these materialise, NFT adoption could potentially still continue to advance.   Bright Spots There were some rays of sunshine even through the tough parts of the year. Ethereum finally moved from its Proof-of-Work validation mechanism to Proof-of-Stake during the event known as “The Merge”. The transition went smoothly, ushering in a new era of more environmentally-friendly transactions and hope for lower network fees. Even though NFT trading activities have waxed and waned, it appears that NFT adoption continues to move forward, especially in the social space. Twitter allowed users to upload NFTs as profile pictures. Facebook and Instagram permitted users to post and share NFTs. Several million Reddit users signed up for NFT wallets and minted an NFT avatar as the social platform’s NFT collections shot up to be among the most popular collections to date. On the regulatory front, the European Union passed the Markets in Crypto Assets Regulation bill, providing clarity for crypto regulation in the EU. Even though the law only will come into force in 2024, it provides more guidance to centralized exchanges on custody requirements, the marketing of assets, and how risk is assessed and communicated to users. Regulation that protects the interests of investors will result in a net benefit for the industry. India started trials for their retail central bank digital currency (CBDC) in 4 cities, with the pilot program extending to 9 more cities in the future. This could potentially improve the lives of more than 1 billion people, many of whom are unbanked. That brings the total number of countries that have launched a CBDC up to 11, while over 100 are in some stage of rolling out a CBDC.  Most importantly, teams are still building beneath all the market noise. More layer 1 protocols were launched to create better Web3 infrastructures. New promising technologies like zero-knowledge (zk) proofs are making progress. BNB Chain launched its zero-knowledge scaling technology zkBNB testnet this year, and a number of other projects’ zk-EVMs are planned to be launched next year. These will significantly improve scalability and interoperability across blockchains. Great technological advances often emerge during downturns, and it won’t be a surprise if blockchain technology continues to advance regardless of the market sentiment.  Take Shelter With Binance Academy This Crypto Winter What better time than wintertime to brush up on your blockchain knowledge? We’ve launched the first of our free crypto education courses starting from November, and so far 200,000 people have invested into their blockchain knowledge and personal growth by completing a combined 8.3 years of blockchain course content (at an average of 22 minutes per user). By January, we will have more than 120 minutes of self-directed video education available for everyone to learn the basics of blockchain, Web3, and trading. Anyone with a Binance account can also claim a free NFT certificate when they complete the whole series of 6 beginner track courses. We’ve played host to 26 million unique visitors to our website in 2022, and our videos on YouTube and Binance Live have garnered 25 million views. We’ve also expanded our knowledge base to nearly 1000 articles and glossary entries. We gave away $7.3 million worth of rewards to over 6.5 million visitors through our Learn and Earn campaigns, where they were able to learn more about what makes different blockchain projects tick. Binance Academy built partnerships around the world, and brought crypto and web3 education to more than 75 universities in more than 20 countries worldwide. Over 5,500 students and guests attended these educational events, and we’ve received nearly a thousand requests from interested individuals in over 35+ countries (and growing!), who wish to be student ambassadors. Our Student Ambassador program was launched in the 4th quarter of 2022, investing in the next generation of blockchain industry leaders. Our selected student ambassadors will help organise and contribute to crypto education and literacy activities  on their campuses, foster interactions and knowledge sharing opportunities amongst the blockchain communities, and have access to Binance Academy networks - and maybe even internship opportunities! We have also deepened our cooperation at the national level with countries like Kazakhstan, where we will provide educational materials and support to develop and execute basic educational programs on blockchain and compliance for Universities across the nation.  What’s in Store for 2023? We’re looking forward to teaching more people more about blockchain next year. Our partnerships will continue to expand as we reach out to more schools, governments, and institutions to deliver in-person training, hackathons, and workshops. We’ve got partnerships in the works with some of the world’s leading education providers to make certified blockchain education available for those who want to pursue careers in the blockchain industry. For those of us who just want to keep exploring this fascinating new technology, we’ll also be extending our offering of free online Courses in 2023 by aiming to deliver more than 20 hours of intermediate and advanced level video education through our Courses product. We want to make sure that everyone is able to access free education that will enable them to benefit from a decentralized future powered by blockchain technology. Here’s to 2023 - hang in there!   Conclusions Looking back at 2022, it’s clear that the blockchain ecosystem has experienced significant growth and development. Despite facing its fair share of setbacks, the crypto community has persisted and will eventually emerge stronger and more experienced. It may also be said that every market cycle clears out market players who have unsustainable business models, and perhaps the crypto industry is no different.  So while it’s true that the crypto market has been volatile of late, the continued proliferation of new crypto protocols and increasing mainstream adoption of existing ones, could perhaps be reasons for us to remain optimistic about the prospects of this industry. In any case, it’s always important to engage in continuous life-long learning about the world and technologies around us (market conditions regardless!), so keep on learning about this rapidly evolving blockchain industry!  We look forward eagerly to the coming years, and can't wait to see what the next chapter holds for this industry.
Binance Academy: Behavioral biases and avoiding them

Binance Academy: Behavioral biases and avoiding them

Binance Academy Binance Academy 19.12.2022 23:43
TL;DR Behavioral biases are irrational beliefs that can influence our crypto trading decisions without our knowing. Common behaviors that can influence decisions include overconfidence, buying or selling at the wrong time to avoid regret, limited attention span, and trend-chasing. Traders and investors should be aware of such biases and avoid them to lower the risk of making illogical decisions. Here are four biases and how to tackle them. Introduction Behavioral biases, when left unchecked, can lead to poor crypto trading and investing decisions. In fact, there is an entire field of study called behavioral finance, which combines psychological theory with conventional financial economics. Biases are often unconscious, so you must pay close attention to your behavior to reduce bias-charged decision-making. Human behavior and pyschology has been extensively studied by Israeli-American psychologist and economist Daniel Kahneman and the late Israeli cognitive and mathematical psychologist Amos Tversky. Interested readers may check out Judgment Under Uncertainty: Heuristics and Biases for a better understanding of human biases. Learn more on Binance.com Overconfidence “The illusion that we understand the past fosters overconfidence in our ability to predict the future.”― Daniel Kahneman The overconfidence bias applies to traders who are too sure of their trading ability, causing them to make risky market decisions or overly frequent trades. You can also be overconfident in assets you have already invested heavily in, leading to a portfolio lacking in diversification. While there may be exceptions, a study led by Columbia University professor Dr. Kai Ruggeri concluded that the more active a retail investor is, the less money they make. Consider trading less and investing more, as investing often entails more fundamental research into the intrinsic value of a project or cryptocurrency. You can also consider diversifying your trades after doing proper research. This can help you to reduce the overall risk associated with holding a single token. Avoiding Regret A study published in the Journal of Economic Theory by Jie Qin, an economics professor at Ritsumeikan University, showed that traders were twice as likely to sell a profitable position too early and a losing position too late to avoid the regret of losing gains or capital. We are hardwired to avoid remorse, even if that leads us to make illogical moves.  To curb the urge to do so, you can stick to specific trading and investing strategies instead of making decisions during market fluctuations. A simple approach to this is to automate your trades with pre-determined conditions, such as price and quantity.  One such strategy is dollar cost averaging (DCA), a practice traders use to invest fixed amounts at regular intervals, regardless of the asset’s price.  You can also use a trailing stop order, which allows you to place a pre-set order at a specific percentage away from the market price. Apart from automatically tracking price direction, trailing stop orders can help to lock in profit while limiting loss, ultimately helping you to avoid mistiming the market due to regret. Limited Attention Span Given the variety of tokens on the market, there are countless crypto opportunities available. However, we only have a limited amount of attention to spare to properly understand each option before trading. Furthermore, there is often a lot of market noise surrounding different crypto opportunities. This could lead to trading decisions being made with incorrect or insufficient information. Don’t rush into any trade you have not first examined closely. Instead of spreading yourself too thin, do your own research (DYOR) and conduct proper fundamental and technical analyses before trading. In addition, it’s best not to rely on information from third-party influencers whose content revolves around potential crypto trading opportunities. Trend-Chasing Another study, conducted by Tulane University professor Prem C. Jain and University of Rochester professor Joanna Shuang Wu, found that 39% of all new capital committed to mutual funds went into 10% of the previous year’s top-performing funds, which is telling of our tendency to chase trends. This can lead to hasty trading moves instead of logical decisions backed by ample research.  Due to the volatile nature of the crypto market, traders may be misled by a token’s exponential price increase and neglect studying the fundamentals that support this spike. Instead of jumping on the bandwagon, consider assets trading below what you feel is their intrinsic value instead of just focusing on tokens that have performed spectacularly well. Like Warren Buffet once said, “Be fearful when others are greedy, and greedy when others are fearful.”  You can also try to perfect your trading strategy and stick to it instead of entering a trade every time a token is hyped up. For starters, there are dozens of trading strategy articles on Binance Academy, including our beginner’s guide to crypto trading strategies, day trading strategies, and how to backtest your trading strategy. Closing Thoughts As humans, it’s natural to want to lean on our instincts when making decisions. Monitor your behavior and strive to keep your behavioral biases in check and you’ll be less likely to make poor trading decisions. Further Reading Five Risk Management Strategies How to Manage Risk and Trade Responsibly | Binance Support Dollar-Cost Averaging (DCA) Explained Why and How to Do Your Own Research (DYOR) When Investing in Crypto
The Bears Of Bitcoin Made A New Local Low At The Level Of $21,488

Differences between centralized and decentralized exchanges explained by Binance

Binance Academy Binance Academy 19.12.2022 22:50
TL;DR A centralized exchange (CEX) offers cryptocurrency exchange services to registered users. Its primary service typically matches buyers and sellers with an order book, though a CEX may offer its verified users various crypto products. For beginners, a CEX provides the simplest way to get started without needing in-depth knowledge of blockchain infrastructure and tools. A decentralized exchange (DEX) uses on-chain smart contracts to run its exchange services. In most cases, will swap tokens from liquidity pools, with liquidity provided by other users in exchange for swap fees.  You don't need to register for a DEX, meaning they're open to anyone with a wallet and some crypto. DEXs are the gateway to the decentralized finance (DeFi) world and provide users with a lot of freedom. However, they lack the support a CEX can give, and it can be easy to make irreversible mistakes when using them. Introduction If you've been doing your crypto research, you'll likely have come across DEXs. Perhaps you're already a customer with a CEX like Binance but are interested in using a DEX, or maybe you're looking to purchase the latest DeFi coin not currently available on CEXs. No matter your story, you should know the crucial differences between a CEX and DEX before deciding which to use. Depending on what you want to do and your level of experience, each has its advantages and disadvantages. Learn more on Binance.com Why Are There Different Types of Exchanges? If you're a new trader or only have experience in traditional finance, the difference between a CEX and DEX can be confusing. A CEX works similarly to what you'd find in the world of stocks — a single entity operates using an order book in which market makers and takers place orders. The order book then matches buyers with sellers, taking a small cut of the transaction as a fee.  At the heart of the operation are the order book and exchange entity, making the model centralized. To use a CEX like Binance, you must create an account and verify your identity according to local regulations. The exchange will also take custody of the assets you want to trade on the CEX after you’ve deposited them into your CEX account. A DEX, however, is run through smart contracts, which are self-executing pieces of code on a blockchain. An entity or project may create and help run a DEX but it can, in theory, run itself as long as people provide liquidity to it. Unlike CEXs, DEXs typically don't use order books to facilitate trading. Instead, they mainly use the automated market maker (AMM) model. To use a DEX, you only need a crypto wallet and some crypto (including enough for any gas / transaction fees). Due to its decentralized nature, there's no registration or account required of its users. For newcomers, a CEX offers a more user-friendly experience and is an easier entry point. If anything goes wrong, you can contact the exchange's customer support team. A DEX also has several benefits but these are typically more attractive to experienced crypto users who value decentralization over ease of use. Centralized Exchanges: Pros User-friendly  A CEX like Binance focuses on providing user-friendly experiences for all kinds of users. Newcomers to crypto have access to simple conversion tools like Binance Convert, while experienced traders can use the Spot Exchange's TradingView tools. A CEX will also likely have detailed guides as part of its services (Binance Academy is one example). The process of registering with a CEX is similar to opening a bank account. Many of us are already familiar with this system, and technical knowledge is not a must-have. Most CEXs offer payment with credit or debit cards, making your first crypto investment as simple as possible. Support and protection One of the biggest hurdles for crypto beginners when using DEXs is getting used to decentralized tools. Crypto wallets, addresses, gas fees, and other aspects of blockchain can be unforgiving when you make mistakes. There are no system admins to offer assistance, so you're on your own if you lose your seed phrase or send crypto to the wrong wallet. You can avoid these pitfalls if you trade using a CEX. For example, customer support can help if you lose access to your Binance account, and there's no need to pay gas fees when moving your crypto around Binance's products. These measures support users and protect them from making the irreversible mistakes people sometimes make on DEXs. More integrated services A CEX can offer a wide range of products and integrated services, turning it into a one-stop crypto shop. On a CEX like Binance, you can access trading and staking services, an NFT marketplace, a launchpad, a P2P exchange, and more without leaving the platform. Moreover, moving funds among these different areas is simple. You can pay by card and even enjoy deals with partner merchants like Travala. Centralized Exchanges: Cons Susceptibility to attack As large centralized entities, CEXs are frequently the targets of attacks, which means any user funds stored on a CEX are susceptible to theft. While CEXs prioritize security, they cannot eliminate the risk of hacks and theft. Over the years, several high-profile hacks have occurred, such as the Mt. Gox hack. Additional transaction fees Almost every — if not every — service you use on a CEX will incur a transaction fee. Often, it may be hidden or "baked into" the service. Due to their higher operating costs, CEXs may struggle to compete with the low transaction fees offered by DEXs. However, a CEX’s additional transaction fees must be weighed against the gas fees of using a DEX, which can be considerable on some networks. No user custody of assets When using a CEX, you must deposit your crypto into its wallet. This means you relinquish custody of your funds by entrusting them to the CEX. As such, you may be unable to withdraw them whenever you please. This is problematic if an exchange becomes insolvent and can lead to you losing your funds entirely. This situation is similar to storing your cash with a bank — during a run on the bank, you may not be able to access your funds.  Decentralized Exchanges: Pros Custody of funds When using a DEX, you never lose custody of your funds until a trade or interaction is complete. This means you can move and store them as you wish. If your crypto is stored in a wallet whose seed phrase only you can access, you have total control over your assets. To decentralization advocates, this is one of the most critical factors. Data protection and privacy When using a DEX, there’s no need to supply personal, identifying information and trust it to be stored securely. This means your personal data is safe from bad actors who want to steal your identity. Note that when using an exchange, you are still bound by local regulations and laws.  Lower barriers to entry Using a DEX requires only a wallet and some crypto to trade and pay gas fees. This makes DEXs highly accessible to a larger group of people globally. For decentralization fans, this is a huge benefit, and many value the more private nature of a DEX. Of course, this should also be considered in the context of local legislation, as well as relevant debates on crypto regulation. Decentralized exchanges: Cons Complex to use and to enter For a first-time user, understanding how to navigate and use a DEX can be challenging. Gas fees, liquidity pools, wallets, and slippage are all possible hurdles to overcome. It takes time to grasp how a DEX works confidently, and to invest responsibly, you should always understand your tools. Lack of fiat on and off ramps Historically, buying your first coin or token was one of the most significant barriers to gaining crypto exposure. CEXs now, as a standard, offer credit and debit card options for buying crypto. Although some DEXs are beginning to offer this service with third-party providers, most still don't allow credit or debit card usage.  Liquidity struggles DEXs, on average, have smaller volumes and less liquidity than large CEXs. Market depth can be smaller, and large trades on a DEX may have a more significant price impact than if done on a CEX. Traders or investors making large volume orders can often find a better price doing over-the-counter (OTC) trades or using a CEX with deep order books, like Binance. Should I Use a DEX or a CEX? By far, the simplest experience for a crypto beginner is to use a CEX. It removes the initial learning curve associated with decentralized blockchain infrastructure. If you face any issues using a CEX, a support team will help and guide you as much as possible. Overall, the chances of making an irreversible mistake like losing access to your funds or transferring it to the wrong address are much lower with a CEX. So if it's your first time gaining crypto exposure or you prefer a more straightforward, digestible service, a CEX is for you. A DEX, on the other hand, is an excellent gateway to the world of DeFi. With a single Ethereum Virtual Machine (EVM) wallet, you can explore the vast DeFi universe. A DEX is a versatile option for crypto power users and offers a high degree of freedom. If you're looking to invest in an extensive range of new projects with low market caps, a DEX is also your best bet. While CEXs often launch new tokens, DEXs still facilitate most new token sales and liquidity. Considering the above, and to help you decide at a glance, refer to the following use cases for each exchange type:     CEX DEX Buy and sell crypto easily with fiat currencies Purchase low market cap coins and tokens that may not be on an exchange No need to manage and keep safe your private key(s) Have full custody of your crypto Gain access to high-liquidity markets with less slippage Opportunities to earn transaction fees by providing liquidity Access to support if you run into issues Decentralized services with typically lower fees Participate in a range of products without leaving the CEX Access a full range of DeFi products across multiple blockchains   Closing Thoughts If you’re considering trying out a DEX, you need to do your own research beyond what is mentioned this guide. Though the benefits sound appealing to some, we recommend making sure you fully understand how to use one and its associated tools. For more information on the topic, refer to our What Is a Decentralized Exchange (DEX)? article. If you’re happy with the services offered by the CEX you’re using, there’s no need to switch. For many, a CEX offers the right balance of ease of use and available support.
Binance Academy summarise year 2022 featuring The Merge, FTX and more

Binance explains crypto index fund - what is it?

Binance Academy Binance Academy 14.12.2022 23:55
TL;DR A crypto index fund simply takes the idea of a traditional index fund — an investment vehicle designed to track the performance of a designated market index — and replaces the underlying assets with crypto tokens instead of company shares. Introduction Understanding crypto index funds requires familiarity with market indexes. In short, a market index is a way of using data to track and measure the performance of a stock market, or a specified group of companies and their associated stocks. A crypto index fund simply takes the idea of a traditional index fund and replaces the underlying assets with cryptocurrency tokens instead of company shares. Crypto index funds, however, are still a new development, with very few currently available. Learn more on Binance.com What Is a Traditional Index Fund? Before looking at crypto index funds, it’s best to get a foundational understanding of traditional index funds. In the simplest of terms, an index fund is an investment portfolio designed to track a specified basket of underlying assets.  More specifically, a traditional index fund is usually described as a type of mutual fund structured to match the composition and performance of a particular financial market index, such as the S&P 500 or Dow Jones Industrial Average.  But what is a mutual fund? And what is a financial market index?  A mutual fund is a financial instrument for people to pool their money together into a managed fund, which then seeks to make a profit for those involved by investing in assets such as stocks and bonds. A mutual fund’s portfolio is set up to match certain investment objectives established by the fund and its manager.  A market index, meanwhile, is a way of using data to track and measure the performance of a stock market or section of the stock market. The S&P 500, Dow Jones Industrial Average, and FTSE 100 are all examples of market indexes. The S&P 500 tracks the stock performance of 500 large and important publicly traded companies in the US. The Dow Jones Industrial Average tracks the stock performance of 30 especially prominent companies listed in the US. The FTSE 100 tracks the stock performance of the 100 largest companies by market capitalization on the London Stock Exchange.   And so, in the case of an index fund, the investment portfolio is set up to mimic the composition of a specified market index (as designated by the fund). The objective of the fund is simply to match the performance of the market index as a whole. In comparison, a mutual fund is where the portfolio is designed by a fund manager based on their views of what to actively invest in — the goal being to outperform the market.   Advantages and Disadvantages of Traditional Index Funds Index funds are known as a passive investment strategy that provides returns in line with the wider stock market. The goal isn’t to beat market movements but simply to replicate the market index’s movements. Studies show that passive funds tend to perform better than active funds in the long term. As such, one of the main advantages of an index fund is that they’re thought to offer better long-term results compared to actively managed funds. For example, the average annualized return of the S&P 500 from 1957 (when the index was first extended to cover 500 stocks) through to the end of 2021 was 11.88%.  An index fund also diversifies portfolios as it is basically made up of many little slices of every company in the index. This means your investment isn’t reliant on the success of a single company but tracks the performance of the entire index as a whole. In short, an index fund offers broader market exposure.  Additionally, because an index fund simply replicates the composition of the index it is tracking, the make-up of your portfolio rarely changes, which leads to lower operating and trading costs, and lower fees. The downside, however, is that there’s very little flexibility. An actively managed fund can drop poorly performing stocks and, with good management, outperform the wider market. If the index goes down, an index fund will also deliver a loss, whereas an actively managed fund can still deliver profits during a downturn. What Is a Crypto Index Fund? Now that you know what a traditional index fund is, it's very easy to understand what a crypto index fund is. A lot of developments within crypto can be seen as Web3 updates on traditional markets and products and a crypto index fund is no exception. It simply takes the idea and structure of a traditional index fund and replaces the underlying assets with cryptocurrency tokens instead of company shares and bonds. For example: an S&P 500 Index Fund invests the pooled money placed into it in a basket of stocks representing the 500 companies on the S&P 500 market index. A crypto index fund, meanwhile, would invest money placed into it in a basket of different cryptos. Simply put, a crypto index fund is an investment vehicle where you can invest to a fund, which, in turn, invests that money into a specific index of cryptocurrencies. In doing so, the crypto index fund provides access to a diversified portfolio of digital assets without you having to buy each token in the fund individually. How Is a Crypto Index Fund Different? Of course, the main difference between a traditional index fund and a crypto index fund is the type of assets in which they invest.  Another key difference is that crypto markets can experience more volatility than traditional markets. The result is that crypto index funds may experience greater price movements than traditional index funds, so someone investing in a crypto index fund could make more profit but could also experience bigger losses. Aside from potentially higher risks and rewards, the other difference to note between traditional and crypto index funds is the number of products available and basic ease of accessibility for consumers. There are hundreds, if not thousands, of traditional index funds available, tracking all sorts of different market indexes. Crypto index funds, however, are still a relatively new development, with very few currently available to the general public.   Closing Thoughts As crypto continues to develop and mature, it’s likely that we will see more crypto index funds come into existence as investment opportunities for everyday users. These funds are popular in traditional trading and suit a wide range of traders. Crypto continues to reach new places and entice new users, so those who like the idea of trading index funds will likely push for crypto-based ones to become more common. Further Reading Binance Launches the Top 10 Equal-Weighted Index Explore the Binance CMC Cryptocurrency Top 10 Equal-Weighted Index Binance Launches the Auto-Invest Index-Linked Plan Glossary: Index Glossary: Passive Management  
Popular crypto bridges and the ways they work - Avalanche Bridge, Polygon Bridge and more

Popular crypto bridges and the ways they work - Avalanche Bridge, Polygon Bridge and more

Binance Academy Binance Academy 30.11.2022 23:11
TL;DR Crypto bridges are essential for facilitating interoperability among various blockchains. They connect previously isolated crypto ecosystems so that users can share data and transfer assets across separate blockchains which have their own individual technological and economic rules.  Crypto bridges can be categorized as trusted, trustless, uni-directional, and bi-directional. Solana Wormhole Bridge, Avalanche Bridge, and Polygon Bridge are some of the popular crypto bridges used to move assets around, and each bridge presents unique advantages. Introduction Generally, blockchains are not inherently interoperable, meaning that data and assets on one blockchain can’t be transferred to another blockchain. Many projects tackle this problem by building crypto bridges between them to facilitate data and asset transfers. However, each crypto bridge connects only specific blockchains and is therefore not a one-size-fits-all solution. If a team builds a bridge between ETH and BTC, for instance, that bridge cannot be used to move assets from XRP to ETH. Also, only users who have crypto wallets compatible with a particular bridge can use that bridge. Learn more on Binance.com What Is a Crypto Bridge? A crypto bridge is a protocol that enables two or more blockchains to work and share data with each other. It connects blockchains so users on one network can participate in the activities of another. This allows crypto users to utilize their holdings outside native chains. Blockchains differ in their tokens, consensus mechanisms, communities, and governance models. A crypto bridge facilitates blockchain interoperability, allowing data and crypto asset transfers across different chains. Crypto bridges also allow blockchains to build off one another’s strengths. For example, Bitcoin doesn't have to reconstruct its blockchain to incorporate smart contracts because other networks can fill that gap. Additionally, crypto bridges allow developers to communicate and collaborate regardless of which network they're working on. As such, protocols can more easily connect and build upon one another's features and use cases. Usually, crypto bridges port tokens from one network to another by wrapping them, a process whereby the bridge locks the original token in a smart contract and creates an equivalent amount of wrapped tokens, such as WETH for ETH or WBNB for BNB. There're also other technologies focusing on interoperability in the crypto ecosystem. One such example is Layer 0 protocols. Layer 0s allow other blockchains to build on top of them by offering the blockchains a common underlying layer. Therefore, a blockchain doesn't require bridges because each blockchain building on top of Layer 0 connects to other blockchains right from the start. Types of Bridges Trusted bridges Trusted bridges depend on a central entity or a system. They include external verifiers to safely facilitate the transfer of data and value. However, this also means they require users to give up control of their crypto assets, which contradicts the crypto ethos of self-custody. Trustless bridges Unlike trusted bridges, trustless bridges don’t rely on third-party entities. Instead, they operate in a decentralized manner by utilizing smart contracts that manage the interoperability process. As such, users can maintain ownership of their crypto. While trusted bridge users must rely on the bridge operators’ reputation, trustless bridge users look to the underlying code instead.  Uni-directional bridges Uni-directional (or one-way) bridges enable users to move their crypto to another network without the possibility of sending them back via the same route. This means they should be used only for one-way transactions. Bi-directional bridges Bi-directional bridges, on the other hand, allow the transfer of assets both ways. They provide a more seamless way to transfer data and crypto between two networks. And as such, might be more convenient for a user who frequently uses two networks to send and receive crypto. Solana Wormhole Bridge A bi-directional bridge, Wormhole seeks to facilitate the movement of quickly and cheaply tokenized assets across blockchains by tapping into Solana's high-speed and low-cost structural advantages. Solanas's goal for Wormhole was to solve common issues with decentralized finance (DeFi), such as high gas fees, price slippage, and network congestion. When it launched in 2020, it offered a decentralized way to bridge ERC-20 and SPL between Ethereum and Solana. Nowadays, Solana Wormhole allows crypto transfer among 17 chains. Wormhole was developed together with Certus One, a company running nodes for blockchains and providing infrastructure security services for proof-of-stake (PoS) blockchains. As developers can employ Wormhole to access the Solana network, there is no need for a crypto project to rewrite their own codebases for Solana.  The bridge is based on decentralized cross-chain oracles. These so-called "guardians" bring tokens from one chain to another by locking up or burning tokens on one chain and minting or releasing them on another. The “guardians” are run by node operators such as Solana validators and ecosystem stakeholders. Their aligned incentive structure with Solana may help to keep the bridge reliable. Avalanche Bridge Another bi-directional bridge, Avalanche Bridge (AB) was built especially for retail users and launched in July 2021 by Ava Labs. The bridge is a replacement of the previous bridge design, called Avalanche-Ethereum Bridge (AEB), and boasts fees that are approximately five times lower than those of its predecessor. In addition, AB strives to further improve the asset-bridging experience for users by focusing on security, faster finality, and lower fees. AB also connects Ethereum and Avalanche by enabling users to transfer Ethereum ERC-20 tokens to the Avalanche Mainnet.  The AB design consists of a private codebase (or "Inter SGX") and relayers (called wardens.) The Intel SGX application is a private enclave that creates a more secure computing environment by facilitating operations in a closed space and ensuring the bridge is tamper-proof. The warden's main job is to monitor the Avalanche and Ethereum blockchains. Whenever a warden sees an ERC-20 token coming to Avalanche Bridge's Ethereum, they register the transaction in the Intel SGX enclave. However, when tokens are sent from Avalanche to Ethereum, the enclave confirms that the wrapped ERC-20 coins are first burned to signal the transfer of the equivalent amount to Ethereum. Finally, when the transaction is confirmed, the token is either locked and minted or burned and released. Polygon Bridge The trustless Polygon Bridge was first proposed in early 2020 by the Polygon team to increase interoperability between the Polygon and Ethereum networks. The bridge went live later that same year. Nowadays, it allows users to transfer tokens and non-fungible tokens (NFTs) between Ethereum and Polygon. Now users can take advantage of Ethereum's popularity while utilizing Polygon’s lower fees and faster transaction times. Polygon has two bridges through which users can transfer assets: the Proof-of-Stake (PoS) bridge and Plasma bridge. The former secures its network by adopting the PoS consensus algorithm. While deposits are completed almost instantly on the PoS bridge, withdrawals may sometimes take longer. This bridge supports the transfer of ether and other common ERC tokens. The Plasma bridge uses the Ethereum Plasma scaling solution to offer increased security. Users can use the bridge to transfer Polygon's native token, MATIC, and certain Ethereum tokens (ETH, ERC-20, and ERC-721).  Bridging tokens using Polygon follows typical bridging logic. Tokens that leave the Ethereum network are locked, and the same number of tokens are automatically minted on Polygon at a one-to-one peg. Similarly, when bridging tokens to Ethereum, the pegged tokens on Polygon are burned and the Ethereum tokens are unlocked.   Closing thoughts While crypto bridges make the crypto ecosystem more interoperable, you should always do your research so you can pick the most suitable bridge to use. Remember that bridging doesn't change the circulating supply of the cryptocurrency you want to transfer. Bridges simply lock tokens on the sending network and mint new tokens on the receiving side, creating wrapped tokens. If the wrapped tokens are sent back to the native chain, they are burned before the original tokens are released on the other side. Further reading: How to Use the Polygon Bridge? Atomic Swaps Explained What Is Web 3.0 and Why Does It Matter? What Is Staking In Crypto? What Is Layer 1 in Blockchain?
Binance Academy summarise year 2022 featuring The Merge, FTX and more

Binance Academy: How does Proof of Reserves work? What is it?

Binance Academy Binance Academy 30.11.2022 11:16
TL;DR Crypto custodians use Proof of Reserves (PoR) audits to show they’re holding users' funds in full. Binance conducts and publicly publishes internal audits, whereupon third-party auditors help to verify them using cryptographic techniques to prove users’ funds are securely held in company reserves. Binance users can also independently verify that their account balances are included in these audits. Introduction Blockchain technology-enabled cryptographic proofs facilitate transparency of crypto exchanges’ financial transactions. Proof of Reserves (PoR) further increases this transparency by creating an authorized framework for auditing crypto custodians. However, while it's one step forward, PoR still needs improvements to make the ecosystem more transparent and trustworthy. Learn more on Binance.com What is Proof of Reserves (PoR)? A PoR audit is one that aims to ensure that custodians are holding their clients’ funds in full. Custodial businesses in cryptocurrency use PoR audits to prove to depositors and the public that their deposits match their balances. These audits are conducted by independent third parties to eliminate the possibility of reserve data being falsified. PoR is essential for several reasons. Firstly, it enables users to verify that the balances they hold on a cryptocurrency exchange, for instance, have absolute asset backing. Secondly, it drives businesses to meet transparency standards, making it difficult for them to engage in questionable or illegal financial activity.  Ideally, PoR should benefit both users and businesses. It protects users by minimizing security risks and safeguarding against harmful players. At the same time, it helps businesses retain users by increasing their trustworthiness. The ability to audit crypto exchanges creates a more transparent crypto ecosystem. For example, PoR prevents exchanges from acting as banks that loan deposited assets to third parties. Similarly, exchanges can't use deposits to invest in other protocols or businesses. In other words, PoR eliminates the risk of companies maximizing the yield and other possible returns from customer asset holdings.  With PoR, any entity can prove that a crypto exchange holds the entirety of its users’ deposits. Therefore, exchanges are naturally encouraged not to mishandle these balances as it would break user trust in them and affect their continuity. What does PoR verification do? In PoR verification, the auditor verifies the inclusion of each account’s balance using cryptography. There are a few key steps as to how this works. Firstly, the auditor takes a snapshot of all account balances. It then converts the fund data to a Merkle tree, which is used to structure large amounts of data for more straightforward processing.  User balance data is hashed into a "leaf". A group of these "leaves" are then hashed to form a "branch", and a group of "branches" are hashed to form the "root". Next, the auditor can use various methods to verify ownership of the user address. On Binanace, for example, an auditor has three ways to identify ownership. When the extraction process for this infomation is run by the exchange, it is also verified by the auditors. Cryptographic message signing: An auditor will provide the exchange a unique message to cryptographically sign using their associated private key(s).  Instructed movement of funds: The exchange is tasked with performing an “instructed movement of funds”, where the management will move a specific amount from a public key/address on a specific time and obtain the transactional hash to verify the instructed transaction on the respective blockchain. Search addresses on a blockchain explorer: The auditor can also search the ETH and BSC (in the case of Binance) address(es) on Etherscan and BSCScan, respectively to ensure that the addresses have been tagged as belonging to the exchange. If the balances match from these forms of discovery, the exchange has verified PoR and shown that it holds all deposited assets in totality. PoR: Limitations and potential improvements A crypto exchange’s balances change as users move their assets in and out. The issue with PoR is that it verifies the correctness of reserve balances only at the specified time of the audit. This can be problematic because any issues may appear too late and a custodian may even use this opportunity to obscure facts.  It is also important to note that third-party businesses conduct the audits, which means audit results may depend on each auditor's competence or whether they’re influenced by outside interests. But how can a crypto exchange improve its PoR audits to build and maintain users’ trust? It can start by shortening the intervals between audits to ensure there are no suspicious financial activities between cycles. An exchange could also use a reputable third-party firm with no financial interest in it or its related bodies. Crypto exchanges use PoR to offer more transparency, which is essential during financial turbulence. Because it uses mathematics and cryptography instead of merely trust and communication like the traditional banking system does, blockchain technology can offer an even better way to audit the financial market. Verifying that your account has been audited You can also verify the inclusion of your Binance account in the last PoR audit yourself. Simply follow the instructions below. Log into your Binance account and bring your cursor to "Wallet." Next, select the "Audits" tab. You will see all the recent audits in which your account balance was verified by the PoR process. Select a specific audit for which you want more information. There, you can also download the Merkle tree.   Closing thoughts You can access a PoR audit to see if a crypto custodian holds the entire reserves of your and other users' funds. The audits should deter crypto exchanges from mismanaging user funds and help improve transparency in the crypto space. PoR is the first step to regaining and maintaining the trust of the crypto users. Furthermore, it sets more requirements for exchanges, which will hopefully make user funds a priority and make the industry safer and more transparent for all.  Further reading What Is Fractional Reserve? A Beginner’s Guide to Security Tokens What Is Quantitative Easing (QE)? The Psychology of Market Cycles A Beginner's Guide to Cryptocurrency Trading Strategies
Buffer Finance And What Can Offer To Its Users

The Uniqueness Of The GMX System And How To Use It

Binance Academy Binance Academy 17.11.2022 13:28
TL;DR GMX is a decentralized, permissionless perpetual swap and spot exchange. Traders can use it to easily trade cryptocurrency on-chain just by connecting their wallets. GMX has a native token called GMX, which functions as a governance, utility, and value-accrual token for the GMX protocol. Users can stake GMX tokens and earn a portion of GMX’s protocol fees, plus benefit from other incentives. GMX currently supports the Arbitrum and Avalanche networks. Introduction Blockchain and its application to finance, cryptocurrency, enabled the development of decentralized finance (DeFi). The mainstream recognition of DeFi started in 2020 with what is called "DeFi summer." Now, GMX demonstrates that it's possible to do leveraged perpetual and spot exchange trading in a decentralized fashion. The trading experience resembles the functionalities of centralized exchanges, but it's done directly from a personal cryptocurrency wallet. Learn more on Binance.com What is GMX? GMX is a decentralized spot and perpetual exchange that enables users to trade BTC, ETH and other popular cryptocurrencies directly from their crypto wallets. The GMX user can do spot swaps and trade perpetual futures up to 30x leverage, similarly to how it's done on a centralized exchange. However, contrary to using a centralized exchange, they keep custody of their assets by utilizing a cryptocurrency wallet. GMX aims to provide a better trading experience with low swap fees and zero-price impact trades. The trading happens through its native multi-asset pool, GLP, which earns fees for liquidity providers. In addition, GMX uses Chainlink Oracles for dynamic pricing to aggregate prices from other high-volume exchanges. GMX first launched on the Arbitrum One blockchain when the network went live in September 2021. Arbitrum is an Ethereum layer-2 Rollup, a solution designed to boost the speed and scalability of Ethereum smart contracts. Later, in January 2022, the deployment of GMX continued on Avalanche, which is also a high-speed EVM-compatible blockchain. How Does GMX Work?  The trading on GMX is facilitated by a multi-asset pool called GLP. It consists of 50-55% stablecoins, 25% ETH, 20% BTC, and 5-10% other altcoins, such as Chainlink and Uniswap. The liquidity is added when users mint GMX Liquidity Provider Tokens (GLP). In exchange for minting GLP, they earn 70% of all fees generated on that particular blockchain. Contrary to some liquidity pools, GLP suffers no impermanent loss. Anyone can become a supplier of this liquidity pool and, in return, earn fees. And users who want to trade perpetual swaps or spot can do it using the assets provided. Moreover, the GLP pool is a counterparty to the traders; as GLP token holders provide the liquidity used for leverage trading, they profit when traders lose — and vice versa. The GLP token can be minted using any of its index assets and burnt to redeem any index asset. Unlike the GMX token, it is automatically staked and not transferable. GLP's price, rewards, and index composition differ between Arbitrum and Avalanche. What is the GMX Token?  The GMX token is a utility and governance token. Token holders can use it to vote on proposals to help decide the exchange's future direction. The token holders who stake their GMX also get three other rewards, which the protocol uses to reward users. Firstly, 30% of all generated protocol fees are distributed to GMX stakers. These fees are collected from market making, swap fees, and leverage trading, and are paid in ETH or AVAX. Secondly, the stakers earn escrowed GMX (esGMX) tokens. These esGMX tokens can be either staked for rewards as well, or vested. The tokens get converted back into GMX over 12 months when a user vests them. Therefore, esGMX emissions are a form of locked staking that prevents inflation and people from immediately selling their GMX. Lastly, stakers earn Multiplier Points that boost their yield and reward long-term holders without contributing to token inflation. These dual incentives stimulate commitment to GMX and further the platform's decentralized ownership. The GMX token has a maximum supply of 13.25 million, with 8.2 million circulating. More than 83% of the circulating tokens are currently staked. What Makes GMX Unique? The trading system GMX allows traders to open leveraged positions through a simple swap interface, which resembles traditional trading platforms. In addition, GMX is self-custodial and trustless, meaning anyone can trade cryptocurrency straight from their private wallet. Its dual exchange model supports both spot swaps and leveraged trading of perpetual swaps. This should improve capital efficiency due to the high asset utilization of the GLP pool, which lets user deposits generate extra yield and not sit idle. GMX allows entering and exiting trading positions with no price impact. This design may help traders get better entry prices than some order book-based exchanges, which might have issues with slippage. GMX also uses an aggregate of Chainlink Oracles and other price feeds to smooth out price fluctuations, which can keep positions safe from temporary liquidation wicks. The ecosystem GMX emphasizes the importance of community and has tried to foster the DeFi mindset of engagement and tool-building amongst its users. Its community-built tools include a Telegram positions bot, the gmx.house leaderboard, the gmxstats.com page, Dune Analytics Dashboards, and calculators that benefit traders, stakers, and liquidity providers. GMX has a growing list of collaborative projects building DeFi functionality with GMX's composable lego blocks. The community also takes care of communication about the GMX ecosystem. For example, the community-driven weekly newsletter The Blueberry Pulse highlights developments in the GMX ecosystem. The Blueberry Podcast does the same in audio format. How to use GMX   Trading GMX's trading interface displays alongside the price chart. To start a leveraged trade, click "Long" or "Short" to set your preference. Simple, low-fee spot swaps are also available on GMX. Click on the "Swap" tab to open the interface to swap between the tokens in the GLP pool. The first token is the collateral you supply, while the token below is the asset you trade. The leverage slider indicates how much you borrow from the GLP pool. Limit orders, as well as take profit and stop loss orders, are available.  Open trades will appear under "Positions." You can click on “Edit” to deposit or withdraw collateral. Opening and closing a leveraged trade costs a fee of 0.1 percent of your position size. Traders also pay a utilization-dependent hourly borrowing fee. For detailed instructions, visit their trading help page. Staking To stake your GMX tokens and earn rewards, you need to connect your wallet and press the "Stake" button. Once you confirm the transaction on-chain in your wallet, you will start earning 30% of all GMX’s protocol fees, plus esGMX and Multiplier Points incentives. You will clearly see the three types of rewards increase under "Total Rewards" in the GMX user interface. You can click the "Compound" button to stake your earned rewards and compound your yield. How to Buy GMX on Binance You can buy GMX on cryptocurrency exchanges like Binance.  1. Log into your Binance account and go to [Trade] -> [Spot].  2. Type “GMX” in the search bar to view the available trading pairs. We will use GMX/BUSD as an example. 3. Go to the [Spot] box and enter the amount of GMX you want to buy. In this example, we will use a market order. Click [Buy GMX] to confirm your order, and the purchased GMX will be credited to your Spot Wallet. What’s next for GMX GMX's own decentralized autonomous organization (DAO), GMX DAO, planned its roadmap through its internal governance process. The vision of GMX is to become an even more complete and user-friendly DEX for on-chain leverage trading. The current roadmap includes: Synthetics Synthetics are to be a new class of tokens that will become available on the exchange. Synthetic crypto assets derive their value from any underlying asset, such as stock, commodity, or digital currency. They are essentially digital representations of derivatives.  Better UI and UX GMX strives to further refine the user interface (UI) and user experience (UX) of the protocol for the users. For example, it's planning to integrate TradingView charts into the platform. X4: Protocol Controlled Exchange The longer time-frame vision of GMX is to become an advanced automated market maker (AMM) that allows other DeFi projects to build on top of its liquidity pools, and customize the functions of their pool entirely. These projects could then specify any custom behavior they would like on buying and selling tokens and for adding and removing liquidity. Network expansion GMX also plans to roll out the exchange on a third blockchain network, alongside Arbitrum and Avalanche. Closing thoughts Cryptocurrency trading has come a long way. GMX enables anyone with a cryptocurrency wallet to benefit from its transparent decentralized exchange services. Firstly, traders can use its perpetual swap and spot exchange platform. Secondly, users can enjoy various benefits and have a say in governance by owning GMX tokens. As we have learned, the GMX community decides about the platform's future; therefore, new services may still be added on top of what the exchange already offers.     
Binance Academy summarise year 2022 featuring The Merge, FTX and more

Binance Academy: Venus Protocol - what is it? How does it work?

Binance Academy Binance Academy 14.11.2022 14:20
TL;DR Venus Protocol is an algorithm-based money market system on the BNB Chain. It aims to allow users to lend and borrow cryptocurrency in a decentralized and secure way. The protocol is permissionless, so anyone can start using it by connecting crypto wallets like MetaMask. Venus Protocol's community owns and controls the protocol through its native governance token, XVS, which can be staked in the Venus Protocol Vault to earn token rewards. Introduction Decentralized finance (DeFi) has begun to offer an increasing number of services typically associated with traditional finance. With Venus Protocol, users can permissionlessly lend or borrow from a pool of assets, and suppliers of collateral can benefit from their passive funds. However, instead of a centralized player handling transactions, the protocol automates the process using technologies such as smart contracts. Learn more on Binance.com What is Venus Protocol and how does it work? Venus Protocol is an algorithmic money market and synthetic stablecoin protocol. Traditionally, the money market is an essential part of the economy that deals with short-term loan needs. Now, however, Venus is bringing decentralized finance (DeFi) lending and borrowing onto the BNB chain. It also allows collateral suppliers to mint the platform's native synthetic stablecoins (VAI) by over-collateralizing positions. Venus Protocol is a fork of Compound and MakerDAO. Both are Ethereum-based, with the first being a money market protocol and the second, a stablecoin minting protocol. Venus integrates these functions into one, allowing users to utilize the same collateral within one ecosystem, regardless of which function they use. You can think of the Venus Protocol as a permissionless lending environment. Firstly, it allows BNB Chain users with idle cryptocurrency to supply collateral to the network. Secondly, users who need more can borrow by pledging over-collateralized cryptocurrency. Lenders then receive compounded annual interest rates, while borrowers pay interest on their respective loans. The interest rates for lending and borrowing are set by the protocol in a curve yield that varies based on utilization. These rates are automated according to the demands of the specific market, such as BNB or ETH. However, the protocol’s governance process also sets minimum and maximum interest rate levels. Synthetic stablecoin minting takes place using vTokens, from the collateral users provide to the Venus Protocol. vTokens represent deposited collateral — for example, users receive vUSDT for supplying USDT, which they can later redeem for the underlying collateral. Users can also borrow up to 50% of the collateral value they have on the protocol from their vTokens to mint VAI. Venus Protocol determines stablecoin interest rates differently from how it does lending and borrowing interest rates. The interest rates for minting are fixed and only the protocol’s governance process is allowed to lower and raise these rates. The history of Venus Protocol Venus Protocol was founded by a project development team from global cryptocurrency credit card issuer Swipe, with Venus (XVS) launching in 2020. From the beginning, it aimed to bridge the gap between traditional finance and DeFi on the BNB Chain and provide users with an alternative application free from the issues they’d experienced on Ethereum. Though Swipe supported the development of the Venus Protocol, there were no XVS token pre-mines for developers, or founders. As such, XVS holders have complete control over the protocol and token. Venus Protocol redefines its rules according to community preferences. For example, the Venus V2 upgrade included higher VAI liquidation penalties. It also introduced fees for VAI minting and platform withdrawals, both of which were added to the Venus Reserves Treasury. Additionally, the upgrade included an airdrop of the native Venus Reward Token (VRT) to current XVS holders as a reward. What is possible on Venus Protocol? Venus Protocol enables users to permissionlessly lend and borrow from a pool of assets. Users can also mint stablecoins (VAI) with over-collateralized positions and participate in the protocol's governance. Lending Users can lend and earn changing yield on the assets they supply. Venus Protocol creates pools of these loaned cryptocurrencies using a smart contract and periodically distributes vTokens to them. This way, the protocol unlocks unused value that is already on the BNB Chain but doesn't have a lending market like Bitcoin and Litecoin do. Borrowing Venus Protocol utilizes an over-collateralized loan system that requires borrowers to pledge collateral before borrowing. For example, if Ethereum has a collateral value of 50%, users can borrow up to 50% of the value of their own ETH. They can then have a say in the collateral ratio through the protocol’s governance process. However, according to Venus Protocol’s white paper, the collateral value is typically around 40% to 75%. Users must exercise caution because if the collateral value falls too low, their position will be liquidated.  Minting stablecoins The minting and redemption of the synthetic stablecoin VAI is fixed at 1 USD, though its price can still fluctuate according to the supply and demand.  Venus Protocol users can mint the stablecoin using remaining collateral from previous vToken deposits. Furthermore, anyone can mint stablecoins without central authorities and use newly minted stablecoins for purposes such as earning yield on other DeFi projects. Governance Users can also influence the future of the Venus Protocol. The protocol is completely controlled by the community through its governance token XVS, which is a BEP-20 token that can be used for voting. Users can vote on a number of protocol-related issues, including improvements, adding new tokens to the protocol, adjusting interest rates, and reserving distribution schedule delegations. Venus Protocol also plans to build a product called Venus Vault that will enable users to lock governance tokens to improve the protocol’s anti-risk ability and distribute staking rewards. What makes Venus Protocol unique? Venus Protocol helps to bring common financial lending services to blockchain-based decentralized protocols, though it is not the first to do so — there are Ethereum-based DeFi applications with assets worth billions of dollars locked into them. However, these applications have their pain points, such as high costs, low network speed, and a lack of cryptocurrencies from other blockchains (e.g., XRP and Litecoin). Venus Protocol differs from many other money market protocols in that it enables the use of supplied collateral for not only borrowing, but also for minting stablecoins. In addition, users can earn yield from minted tokens, as opposed to other protocols that lock such tokens up in smart contracts, with no benefits from underlying assets. Venus Protocol eliminates the need to remove one’s own assets from a money market to mint stablecoins. Unlike many prominent stablecoins, Venus Protocol’s synthetic stablecoins are not backed by traditional financial assets or fiat but by a basket of other cryptocurrencies. Moreover, BNB Chain makes transactions fast and low-cost while providing a network of wrapped tokens and liquidity.   Closing thoughts Venus Protocol combines the money market and stablecoin generation within the same protocol, which can benefit the crypto ecosystem by unlocking collateral. Furthermore, BNB Chain's speed and low transaction costs open these financial products to anyone who owns a cryptocurrency wallet. Now, people worldwide can borrow against, earn interest on, and supply collateral, as well as mint stablecoins on demand. Further reading What Is Qtum (QTUM)? What Is Band Protocol (BAND)? What Is NEXO (NEXO)? What Is BNB?
DPX Token Registered A 24-Hour Return Of 11.11%

The Venus Protocol Is Completely Controlled By The Community

Binance Academy Binance Academy 12.11.2022 10:52
TL;DR Venus Protocol is an algorithm-based money market system on the BNB Chain. It aims to allow users to lend and borrow cryptocurrency in a decentralized and secure way. The protocol is permissionless, so anyone can start using it by connecting crypto wallets like MetaMask. Venus Protocol's community owns and controls the protocol through its native governance token, XVS, which can be staked in the Venus Protocol Vault to earn token rewards. Introduction Decentralized finance (DeFi) has begun to offer an increasing number of services typically associated with traditional finance. With Venus Protocol, users can permissionlessly lend or borrow from a pool of assets, and suppliers of collateral can benefit from their passive funds. However, instead of a centralized player handling transactions, the protocol automates the process using technologies such as smart contracts. Learn more on Binance.com What is Venus Protocol and how does it work? Venus Protocol is an algorithmic money market and synthetic stablecoin protocol. Traditionally, the money market is an essential part of the economy that deals with short-term loan needs. Now, however, Venus is bringing decentralized finance (DeFi) lending and borrowing onto the BNB chain. It also allows collateral suppliers to mint the platform's native synthetic stablecoins (VAI) by over-collateralizing positions. Venus Protocol is a fork of Compound and MakerDAO. Both are Ethereum-based, with the first being a money market protocol and the second, a stablecoin minting protocol. Venus integrates these functions into one, allowing users to utilize the same collateral within one ecosystem, regardless of which function they use. You can think of the Venus Protocol as a permissionless lending environment. Firstly, it allows BNB Chain users with idle cryptocurrency to supply collateral to the network. Secondly, users who need more can borrow by pledging over-collateralized cryptocurrency. Lenders then receive compounded annual interest rates, while borrowers pay interest on their respective loans. The interest rates for lending and borrowing are set by the protocol in a curve yield that varies based on utilization. These rates are automated according to the demands of the specific market, such as BNB or ETH. However, the protocol’s governance process also sets minimum and maximum interest rate levels. Synthetic stablecoin minting takes place using vTokens, from the collateral users provide to the Venus Protocol. vTokens represent deposited collateral — for example, users receive vUSDT for supplying USDT, which they can later redeem for the underlying collateral. Users can also borrow up to 50% of the collateral value they have on the protocol from their vTokens to mint VAI. Venus Protocol determines stablecoin interest rates differently from how it does lending and borrowing interest rates. The interest rates for minting are fixed and only the protocol’s governance process is allowed to lower and raise these rates. The history of Venus Protocol Venus Protocol was founded by a project development team from global cryptocurrency credit card issuer Swipe, with Venus (XVS) launching in 2020. From the beginning, it aimed to bridge the gap between traditional finance and DeFi on the BNB Chain and provide users with an alternative application free from the issues they’d experienced on Ethereum. Though Swipe supported the development of the Venus Protocol, there were no XVS token pre-mines for developers, or founders. As such, XVS holders have complete control over the protocol and token. Venus Protocol redefines its rules according to community preferences. For example, the Venus V2 upgrade included higher VAI liquidation penalties. It also introduced fees for VAI minting and platform withdrawals, both of which were added to the Venus Reserves Treasury. Additionally, the upgrade included an airdrop of the native Venus Reward Token (VRT) to current XVS holders as a reward. What is possible on Venus Protocol? Venus Protocol enables users to permissionlessly lend and borrow from a pool of assets. Users can also mint stablecoins (VAI) with over-collateralized positions and participate in the protocol's governance. Lending Users can lend and earn changing yield on the assets they supply. Venus Protocol creates pools of these loaned cryptocurrencies using a smart contract and periodically distributes vTokens to them. This way, the protocol unlocks unused value that is already on the BNB Chain but doesn't have a lending market like Bitcoin and Litecoin do. Borrowing Venus Protocol utilizes an over-collateralized loan system that requires borrowers to pledge collateral before borrowing. For example, if Ethereum has a collateral value of 50%, users can borrow up to 50% of the value of their own ETH. They can then have a say in the collateral ratio through the protocol’s governance process. However, according to Venus Protocol’s white paper, the collateral value is typically around 40% to 75%. Users must exercise caution because if the collateral value falls too low, their position will be liquidated.  Minting stablecoins The minting and redemption of the synthetic stablecoin VAI is fixed at 1 USD, though its price can still fluctuate according to the supply and demand.  Venus Protocol users can mint the stablecoin using remaining collateral from previous vToken deposits. Furthermore, anyone can mint stablecoins without central authorities and use newly minted stablecoins for purposes such as earning yield on other DeFi projects. Governance Users can also influence the future of the Venus Protocol. The protocol is completely controlled by the community through its governance token XVS, which is a BEP-20 token that can be used for voting. Users can vote on a number of protocol-related issues, including improvements, adding new tokens to the protocol, adjusting interest rates, and reserving distribution schedule delegations. Venus Protocol also plans to build a product called Venus Vault that will enable users to lock governance tokens to improve the protocol’s anti-risk ability and distribute staking rewards. What makes Venus Protocol unique? Venus Protocol helps to bring common financial lending services to blockchain-based decentralized protocols, though it is not the first to do so — there are Ethereum-based DeFi applications with assets worth billions of dollars locked into them. However, these applications have their pain points, such as high costs, low network speed, and a lack of cryptocurrencies from other blockchains (e.g., XRP and Litecoin). Venus Protocol differs from many other money market protocols in that it enables the use of supplied collateral for not only borrowing, but also for minting stablecoins. In addition, users can earn yield from minted tokens, as opposed to other protocols that lock such tokens up in smart contracts, with no benefits from underlying assets. Venus Protocol eliminates the need to remove one’s own assets from a money market to mint stablecoins. Unlike many prominent stablecoins, Venus Protocol’s synthetic stablecoins are not backed by traditional financial assets or fiat but by a basket of other cryptocurrencies. Moreover, BNB Chain makes transactions fast and low-cost while providing a network of wrapped tokens and liquidity. Closing thoughts Venus Protocol combines the money market and stablecoin generation within the same protocol, which can benefit the crypto ecosystem by unlocking collateral. Furthermore, BNB Chain's speed and low transaction costs open these financial products to anyone who owns a cryptocurrency wallet. Now, people worldwide can borrow against, earn interest on, and supply collateral, as well as mint stablecoins on demand. Further reading What Is Qtum (QTUM)? What Is Band Protocol (BAND)? What Is NEXO (NEXO)? What Is BNB?
In Crypto, You Could Prove You Own A Private Key Without Revealing It

How To Manage The Risk Of A Cryptocurrency Portfolio

Binance Academy Binance Academy 07.11.2022 10:05
TL;DR Risk management is an essential part of investing and trading responsibly. Risk management strategies can reduce your portfolio's overall risk in various ways. For example, you may diversify your investments, hedge against financial events, or implement simple stop-loss and take-profit orders. Introduction It's a well-known fact that investors and traders look to minimize risk. Even if your risk tolerance is high, you'll still, in some way, weigh the risk of your investments versus the payoff. However, there's more to risk management than just choosing less risky trades or investments. A comprehensive toolset of risk management strategies is available, many of which are suitable for beginners, too. Learn more on Binance.com What is risk management? Risk management entails predicting and identifying financial risks involved with your investments to minimize them. Investors then employ risk management strategies to help them manage their portfolio's risk. A critical first step is assessing your current exposure to risks and then building your strategies and plans around them. Risk management strategies Risk management strategies are plans and strategic actions traders and investors implement after identifying investment risks. These strategies reduce risk and can involve a wide range of financial activities. Some examples include taking out loss insurance and diversifying your portfolio across asset classes. In addition to active risk management practices, it is important to understand general risk management planning. There are four general planning strategies you can work with. Risk Management planning stratergies Acceptance: Deciding to take on the risk of investing in an asset but not spending money to avoid it as the potential loss isn't significant. Transference: Transferring the risk of an investment to a third party at a cost. Avoidance: Not investing in an asset with potential risk. Reduction: Reducing the financial consequences of a risky investment by diversifying across your portfolio. This could be within the same asset class or even across industries and assets. Why is a risk management strategy important in crypto? It's common knowledge that crypto, as an asset class, is one of the higher-risk investments available to the average investor. Prices have proven to be volatile, projects can crash overnight, and the technology behind blockchain can be challenging for newcomers to understand. With crypto moving rapidly, it's imperative to employ sound risk management practices and strategies to reduce your exposure to potential risks. This is also an essential step to becoming a successful and responsible trader. Strategy #1: Consider the 1% rule The 1% rule is a simple risk management strategy that entails not risking more than 1% of your total capital on an investment or trade. If you have $10,000 to invest and want to adhere to the 1% rule, there are a few ways to do so.  One would be to purchase $1,000 worth of bitcoin (BTC) and set a stop-loss or stop-limit order to sell at $9,900. Here, you would cut your losses at 1% of your total investment capital ($100). You could also purchase $100 of ether (ETH) without setting a stop-loss order, as you would only lose a maximum of 1% of your total capital if the price of ETH were to drop to 0. The 1% rule doesn't affect the size of your investments but the amount you are willing to risk on an investment. The 1% rule is especially important for crypto users due to the market's volatility. It can be easy to get greedy, and some investors may put too much into one investment and even suffer heavy losses expecting their luck to turn. Strategy #2: ​​Setting stop-loss and take-profit points A stop-loss order sets a pre-determined price for an asset at which the position will close. The stop price is set below the current price and, when triggered, helps protect against further losses. A take-profit order works the opposite way, setting a price at which you want to close your position and lock in a certain profit. Stop-loss and take-profit orders help you manage your risk in two ways. First, they can be set up in advance and will be executed automatically. There's no need to be available 24/7, and your pre-set orders will be triggered if prices are particularly volatile. This also allows you to set realistic limits for the losses and profits you can take.  It’s better to set these limits in advance rather than in the heat of the moment. While it can be strange to think of take-profit orders as part of risk management, you shouldn't forget that the longer you wait to take profit, the higher the risk the market could fall again while waiting for an  additional upside. Strategy #3: Diversify and hedge Diversifying your portfolio is one of the most popular and fundamental tools to reduce your overall investment risk. A diversified portfolio won't be too heavily invested in any asset or asset class, minimizing the risk of heavy losses from one particular asset or asset class. For instance, you may hold a variety of different coins and tokens, as well as provide liquidity and loans. Hedging is a slightly more advanced strategy to protect gains or minimize losses by purchasing another asset. Usually, these assets are inversely correlated. Diversification can be a type of hedge, but perhaps the most well-known example is futures. A futures contract lets you lock in a price for an asset at a future date. Imagine, for instance, you believe bitcoin's price will tumble, so you decide to hedge against this risk and open a futures contract to sell BTC for $20,000 in three months. If bitcoin’s price does indeed fall to $15,000 three months later, you will profit from your futures position.  It's worth remembering that futures contracts are settled financially, and you don't have to deliver the coins physically. In this case, the person on the other side of your contract would pay you $5,000 (the difference between the spot price and the futures price), and you would have hedged against the risk of bitcoin’s price falling. As mentioned, the crypto world is a volatile one. However, there are still opportunities to diversify within this asset class and use hedging opportunities. Diversification in crypto is much more crucial than in more traditional financial markets with less volatility. Strategy #4: Have an exit strategy ready Having an exit strategy is a simple but effective method for minimizing the risk of heavy losses. By sticking to the plan, you can take profits or cut losses at a pre-determined point. Often, it's easy to want to keep going when making gains or to put too much faith in a cryptocurrency even when prices are falling. Getting caught up in hype, maximalism, or a trading community can also cloud your decision-making. One way of successfully implementing an exit strategy is to use limit orders. You can set them to automatically trigger at your limit price, whether you want to take profit or set a maximum loss.  Strategy #5: Do Your Own Research (DYOR) DYOR is an integral risk-reduction strategy for any investor. In the Internet age, it's easier than ever to conduct your own research. Before investing in a token, coin, project, or other asset, you must do your due diligence. It's key that you check essential information about a project, such as its white paper, tokenomics, partnerships, roadmap, community, and other fundamentals. However, misinformation spreads quickly, and anyone can submit their opinions or online as facts. When conducting research, consider where you're getting your information and the context in which it's presented. Shilling is commonplace, and projects or investors can spread false, biased, or promotional news as if it were sincere and factual. Closing thoughts With the five risk management strategies outlined, you'll have an effective tool kit to help reduce your portfolio's risk. Even employing simple methods that cover most areas will help you invest more responsibly. At the other end of the scale, there's potential to create risk management plans with more advanced, in-depth strategies.  To dive deeper into the topic, refer to the following articles: How to Manage Risk and Trade Responsibly | Binance Support What Is the Risk/Reward Ratio and How to Use It | Binance Academy  3 Reasons Why Binance Futures Is The Preferred Hedging Venue For Traders    
Stablecoins Could Be Used As A Way Of Storing Capital

The Polymesh Team Is Also Working On Stablecoin Infrastructure

Binance Academy Binance Academy 02.11.2022 15:26
TL;DR   Polymesh is a public permissioned layer 1 blockchain focused on improving the security token industry. Using its utility token POLYX, it rewards and fines actors in the blockchain ecosystem accordingly to increase blockchain security. POLYX also facilitates governance and staking within its ecosystem. Introduction   Securities are tradable financial instruments that hold real-world value. By tokenizing securities, the securities market — which is worth hundreds of trillions — has the potential to grow even more. This could improve the market’s efficiency and transparency, among other benefits.  Tokenized securities, or security tokens, are issued on blockchains such as Polymesh, which is an institutional-grade blockchain built specifically for regulated assets like security tokens.  Learn more on Binance.com What is Polymesh? Polymesh is a layer 1 public permissioned blockchain built for security tokens, which  are digital contracts for fractions of assets that hold real-world value.  As a public permissioned blockchain, anyone can view the network. However, you must complete an identity verification process to participate in it. This verification process applies to all actors on the chain, from issuers and investors to stakers and node operators.  Node operators in particular must be permissioned and licensed financial entities. This increases network security, since these entities face greater reputational risk than unidentifiable actors.  Polymesh enables market participants to enjoy the unique benefits of private and permissionless networks, offering trust in the network without compromising on transparency. How does Polymesh work?   Node operators and stakers work together to secure the layer 1 blockchain and validate blocks.  Node operators who successfully validate blocks are rewarded in POLYX, Polymesh’s utility token. Stakers stake their POLYX on node operators to increase the latter’s chance of being selected for the validator pool every 24 hours. After node operators collect a commission of up to 10%, stakers will receive POLYX. Securing Polymesh Polymesh employs a Nominated Proof-of-Stake (NPoS) consensus model, which was developed by Polkadot, to define the network's roles, rules, and incentives. This system is designed to help increase the blockchain’s security, as it makes harmful behavior costly and difficult to execute. Through this mechanism, node operators and stakers are rewarded or fined in POLYX, according to their performance.  Polymesh’s fee structure Many public permissionless blockchains have a fee market, where fees can vary greatly in a matter of seconds. For instance, if users compete for space on the blockchain to run code or store data (i.e., the blockspace), this would likely incur higher fees. Polymesh keeps transaction costs low and consistent by basing fees on the on-chain weight (in bytes) and complexity of the transaction, with Polymesh Governance having the authority to adjust the rate. Polymesh Governance is a democratic system consisting of a council of key stakeholders, the Polymesh Governing Council, and POLYX holders.  The Polymesh Governing Council sets and charges protocol fees for certain native functions, such as reserving a token ticker. Fee payment is split at a 4:1 ratio between the Network Treasury — maintained by Polymesh Governance — and node operators. Network Treasury funds are typically used for improving or securing the network.  What makes Polymesh unique?  Polymesh is one of the few layer 1 blockchains built for security tokens. Currently, most securities-focused projects are layer 2 initiatives built on pre-existing blockchains like Ethereum or Solana. Polymesh, however, is a standalone layer 1 blockchain. With its infrastructure, Polymesh hopes to improve the security token industry by solving governance, identity, compliance, confidentiality, and settlement challenges.  Governance  Built on the Substrate framework, Polymesh takes advantage of seamless upgrades to offer forkless architecture, so there will only ever be one version of the chain. An on-chain governance model featuring a council of key stakeholders can easily resolve any issues. Identity  Unlike most public blockchains that allow anyone to participate, Polymesh’s mandatory identity verification process generates an on-chain identity for every individual or entity participating in the network. On-chain interactions can be traced back to known, real-world entities. Compliance The ability to create and manage security tokens is built into the base layer of the blockchain. Additional characteristics like compliance and rules are optional and can be automated and enforced at the token level via smart contracts. Confidentiality Polymesh’s protocol MERCAT (Mediated, Encrypted, Reversible, SeCure Asset Transfers) enables confidential asset issuance and transfers. Users can maintain trade privacy, while Polymesh does not have to sacrifice compliance or transparency.  Settlement Instant settlement is possible for both on- and off-chain assets through Polymesh’s on-chain settlement engine, two-way transaction affirmation, and near-instant deterministic finality. What is POLYX?   POLYX is Polymesh’s native token. It is classified as a utility token under Swiss law, based on guidance from Swiss financial regulator FINMA. POLYX is used for governance, securing the chain through staking, and creating and managing security tokens. Governance  Governance is facilitated through Polymesh Governance. Any verified POLYX holder can influence Polymesh’s direction in two ways: submitting a Polymesh Improvement Proposal (PIP) or voting using POLYX. To submit a PIP, a user has to bond POLYX to it using Polymesh Governance. Once approved, PIPs are voted on by the Governing Council for implementation.  Staking  Any verified POLYX holder can participate in staking by bonding POLYX to a node operator of their choice to increase that operator’s chance of receiving rewards.  The Polymesh ecosystem Existing participants in Polymesh’s ecosystem include cryptocurrency exchanges, experienced players in the tokenization space (Polymath), and companies with sizable security token portfolios (RedSwan). The Polymesh Association aims to encourage further development through two programs:  The Grants Program for individuals and businesses building open-source functionality on Polymesh. The Ecosystem Development Fund for businesses with closed-source technology that integrate Polymesh. There is a wealth of information available for developers who want to integrate Polymesh, including the Polymesh SDK library and dedicated support channels for the community. How to buy POLYX on Binance?   You can buy POLYX on cryptocurrency exchanges like Binance.  1. Log into your Binance account and go to [Trade] -> [Spot].  2. Type “POLYX” in the search bar to view the available trading pairs. We will use POLYX/BUSD as an example. 3. Go to the [Spot] box and enter the amount of POLYX you want to buy. In this example, we will use a market order. Click [Buy POLYX] to confirm your order, and the purchased POLYX will be credited to your Spot Wallet. Closing thoughts   To build an improved security token space, the Polymesh team is also working on other areas, including stablecoin infrastructure, non-fungible token (NFT) implementation, confidentiality via the MERCAT protocol, and user onboarding.
The G20 And IMF Are Already Preparing Their Crypto Regulation

Cryptocurrency whitepaper explained by Binance Academy

Binance Academy Binance Academy 02.11.2022 15:12
TL;DR A cryptocurrency whitepaper enables projects to explain their products and goals to their audiences. Projects can freely choose what kind of information they want to provide, but whitepapers usually include an overview of the project’s goals, tokenomics, products, features, and information about the team. As such, whitepapers can be a good place to start when doing research on a specific project. Introduction A whitepaper summarizes, in a single document, the important information related to a blockchain or cryptocurrency project. It’s a popular way of explaining how a certain project works and what problems it’s aiming to solve. Learn more on Binance.com What is a whitepaper? Generally, a whitepaper is a report or guide that informs its readers about a specific topic or issue. For example, developers can create a whitepaper about their software to educate users on what they are building and why. In the blockchain space, a whitepaper is a document that helps outline the main features and technical specifications of a specific cryptocurrency or blockchain project. Although many whitepapers are focused on a coin or token, they can also be based on different types of projects, such as a decentralized finance (DeFi) platform or a play-to-earn game. A whitepaper may provide an overview of essential data in the form of statistics and diagrams. Also, a whitepaper could explain the governing structure of the project, who’s working on it, and the current and future development plans (i.e., their roadmap). However, there's no official way to make a whitepaper. Each project creates a whitepaper that fits its conditions best. Optimally, the whitepaper should be neutral and informative to clearly depict the project and its goals. Users should always be cautious with whitepapers that present persuasive language and projects that promise too much without giving enough information. Cryptocurrency whitepapers are often thought of as business plans for crypto projects. It's because they provide investors with a comprehensive project overview. But, unlike business plans, whitepapers are usually released before the cryptocurrency launch. So, a whitepaper is often a starting point in which a crypto project lays out the direction and intention of its idea. What information can you find in a whitepaper? Founders make whitepapers to provide an understanding of the goal of their project. For example, Bitcoin's whitepaper says: "A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution." While Ethereum's whitepaper describes its goal in the following way: "The intent of Ethereum is to create an alternative protocol for building decentralized applications." Whitepapers often give an idea about the real-world utility of the crypto project. For example, it could describe how it solves a specific problem or how it can improve certain aspects of our lives. Nevertheless, it's important to stay cautious about the promises. It's not a hard task to create a whitepaper. For example, the Initial Coin Offering (ICO) boom of 2017 gave rise to thousands of tokens with "innovative" ideas, but most projects failed to deliver. As a rule of thumb, remember that just attaching a cryptocurrency to a use case doesn't signify that it will be adopted and used. So, in addition to goals and promises, whitepapers can also show how the cryptocurrency will really work. For example, one of the things it could explain is what kind of consensus mechanism it uses to allow network participants to coordinate in a distributed way. A whitepaper could also give an in-depth look into tokenomics components, such as token burns, token allocations, and incentive mechanisms. Finally, a whitepaper could contain a roadmap informing users about the project timetable so that they would know when to expect the product releases. Whitepapers are often designed to be straightforward so that anyone can read them and get at least the basic idea about the cryptocurrency or blockchain project. However, a good whitepaper will also give technical explanations to confirm the project’s competence. Why are whitepapers important? Whitepapers are important for the crypto ecosystem. Even though there are no standards for creating them, whitepapers have become a framework for researching crypto projects. It's a general recommendation to start crypto research by reading the project's whitepaper. Users can use whitepapers to identify potential red flags or promising projects. In addition, they enable users to monitor if a project is sticking to its original plans and goals. Whitepapers can provide transparency and equality by making the project's key information public. Various parties can benefit from whitepapers. For example, while investors can make better investment decisions using them, developers can decide on their possible participation in the protocol. Similarly, a person interested in the idea can decide more confidently if he wants to join a particular community after reading it. Examples of whitepapers Bitcoin whitepaper The bitcoin whitepaper was published in 2008 by an anonymous individual or group known as Satoshi Nakamoto. The Bitcoin whitepaper is called "Bitcoin: A Peer-to-Peer Electronic Cash System." The whitepaper outlines how people could use Bitcoin as a more efficient form of money outside the traditional banking model. It gives technical explanations of how the Bitcoin network allows users to send digital currency on the peer-to-peer network without intermediaries. The whitepaper also explains how the Bitcoin network is protected against censorship and double-spending attacks. Ethereum whitepaper A young programmer called Vitalik Buterin published the Ethereum whitepaper in 2014. But, even before it, Vitalik proposed the idea of the whitepaper in 2013 in a blog post, "Ethereum: The Ultimate Smart Contract and Decentralized Application Platform." The post presented the idea of a Turing-complete blockchain, which is a type of decentralized computer that can run any application if given enough time and resources. The Ethereum whitepaper explains how its purpose differs from that of Bitcoin. Whereas Bitcoin has a specific function to provide digital peer-to-peer payments, the Ethereum whitepaper presented a platform that would enable developers to build and deploy all kinds of decentralized applications (DApps). This could be, for example, another cryptocurrency or a decentralized lending platform. The whitepaper also explains the technological solutions that made Ethereum possible, such as smart contracts and the Ethereum Virtual Machine. Closing thoughts Optimally, a whitepaper should provide you with a necessary understanding of what the cryptocurrency project plans to do and how. However, whitepapers are not regulated, and practically anyone can write one. So, if you are interested in a certain project, it’s important to analyze their whitepaper carefully, considering the potential red flags and risks. Further reading The Psychology of Market Cycles What Is an NFT? What Is GameFi and How Does It Work? Risk Warning: Digital asset prices are subject to high market risk and price volatility. The value of your investment can go down or up, and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance is not liable for any losses you may incur. Past performance is not a reliable predictor of future performance. You should only invest in products you are familiar with and where you understand the risks. You should carefully consider your investment experience, financial situation, investment objectives and risk tolerance and consult an independent financial adviser prior to making any investment. This material should not be construed as financial advice. For more information, see our Terms of Use and Risk Warning.
In Crypto, You Could Prove You Own A Private Key Without Revealing It

Blockchain And Cryptocurrencies Could Start The Web3 Revolution

Binance Academy Binance Academy 24.10.2022 13:34
TL;DR The internet has evolved from the “read-only” Web 1.0 to the current state of Web 2.0, which is often described as participatory and social-driven. Now, we are gradually moving toward the next phase of the internet, Web 3.0, often styled Web3 in the digital asset space. Web3 holds the promise of allowing people to own things digitally, easily transact online, and have more control of their personal data. Blockchain and crypto ecosystems already have working products for Web3. For example, users can make peer-to-peer (P2P) payments and collect digital items with crypto wallets. Many blockchain-based projects are decentralized by design and allow anyone to use them. Introduction Digital assets can become an intrinsic part of Web3 – a new internet that is expected to remedy the ills of the current Web such as the concentration of power at the hands of a few centralized social media platforms and exploitation of users’ personal data. The decentralized and permissionless nature of blockchains is instrumental in distributing communication power rather than granting it to central authorities. While digital assets bring native digital payments to Web3, they can also function as tokens programmed to play a wide range of roles in digital economic systems. Blockchain and crypto could also make Web3 more community-centered through decentralized autonomous organizations (DAOs).  Learn more on Binance.com How is Web3 different from Web2? The main evolutionary steps of the internet are often represented as the qualitatively different phases dubbed Web1, Web2, and Web3. In the Web1 era, users couldn't change online data or upload their own content to the websites they were interacting with. The internet back then consisted of static HTML pages that enabled simple, one-way experiences, such as reading information forums. Web2 allowed content consumption and simple interaction. Then, Web2 has gradually emerged as a more interactive internet where users were more involved in generating their own content. Since these modes of online interactions were mainly facilitated by social media platforms, Web2 saw the rise of new types of centralized tech giants. The current Web2 ecosystem is changing again as more of its failings get exposed. For example, internet users have become more concerned about data tracking and ownership, as well as censorship issues. The power of centralized companies has become especially noticeable when they began leveraging it to ban specific users and organizations form their platforms. Web2 companies also use the data to keep users on their websites and create targeted ads for third parties’ benefit. Such economic incentives can drive such companies to act not in users’ best interest. The vision of Web3 is that of the next step toward a better internet. Its central promises include making online platforms decentralized, trustless, and permissionless. It could also bring about digital ownership, digital-native payments, and censorship-resistance as a new standard of Web products and services. Blockchain and crypto are perfectly positioned to become essential technologies of Web3 because they are inherently decentralized, permitting anyone to record information on-chain, tokenize assets, and create digital identities.  How do blockchain and crypto fit into the Web3 ethos? Decentralization. As noted above, one of the central problems of Web2 is concentration of power and data at the hands of a few major players. Blockchain and crypto can decentralize Web3 by facilitating a wider distribution of information and power. Web3 could employ blockchain-powered public distributed ledgers to allow for greater transparency and decentralization. Permissionlessness: Blockchain-based projects replace proprietary systems of traditional companies with openly available code. The permissionless nature of the applications built on the blockchain allows anyone worldwide to access and interact with them without restrictions. Trustlessness: Blockchain and crypto eliminate the need to trust any third party, such as a bank or an individual intermediary. Web3 users can transact without the need to put trust in any entity but the network itself.  Payment rails: Cryptocurrencies could serve as the digitally native payments infrastructure of Web3. Digital assets can potentially improve the expensive and bulky payment infrastructure of Web2 because they are truly borderless and don't require intermediaries. Ownership: Crypto already offers tools like self-custodial crypto wallets that allow users to store their funds without intermediaries. Users can also connect wallets to decentralized apps to use their funds in a variety of ways or showcase their digital items. Anyone can verify ownership of these funds and items using a transparent public ledger. Censorship resistance: Blockchains are designed to be censorship-resistant, meaning that no party can unilaterally alter the record of transactions. Once the record has been added to the blockchain, it's nearly impossible to remove it. This feature could help preserve all manner of speech from government and corporate censorship. Are blockchain and crypto essential for Web3? Web3 may well rely on technologies that are not related to blockchain or cryptocurrency. For example, technologies such as augmented reality (AR), virtual reality (VR), the internet of things (IoT), and the metaverse may become essential to the new era of the internet as well. While the blockchain could operate more on the infrastructure side of Web3, these technologies and solutions could help make the internet more immersive and connected to the real world. IoT could connect various devices through the internet, while AR could embed digital visual elements into the real world, and VR could construct computer-generated environments populated by items represented as digital assets. Finally, scaling and bringing these technologies together could make a unified metaverse the reality of Web3. Crypto could provide digital-native payment rails and much more. Utility tokens can unlock a universe of use cases essential for Web3. Also, non fungible tokens (NFTs) could help verify identity and ownership within the digital realm in a way that does not compromise users’ control of their personal data. What will Web3 with crypto and blockchain look like? Blockchain technology can become one of the foundations of Web3, but users might not even notice it. If the applications built on blockchains are user-friendly and intuitive, people will not give the underlying infrastructure another thought – much like we rarely consider the data servers and internet protocols that are foundational to social media platforms that we use daily. NFTs could enable users to display digital collectible items to other users and help create and maintain their unique digital identities. They could also serve other functional purposes, such as underpinning many key processes in online gaming. Blockchain and crypto can transform the way Web3 users coordinate and enforce collective action through decentralized autonomous organizations (DAOs). DAOs empower people to organize around a shared interest without a central decision-making authority. Instead, token holders vote to determine the best course of action together. In addition, all the activity and votes are visible on a blockchain. Therefore, DAOs can drive Web3 to be more decentralized, transparent, and community-centered.  Closing thoughts Web3 may solve the big problems of today’s internet and minimize the power of the tech giants. However, it is still largely an aspirational vision rather than tangible reality. Still, the technologies that will likely underpin the next iteration of the Web are indeed already in development. Blockchain and crypto are often considered to be the among the technologies that are most likely to usher in the Web3 revolution because they are designed to facilitate decentralized, permissionless, and trustless interactions. In addition, blockchain technology and digital assets do not rival other key components of Web – such as AR, VR, and the internet of things – as they are likely to yield the most promising solutions when combined with one another.
Meta Is Cutting Discretionary Spendings And Extending Its Freeze On Hiring

Millions Invested In AR And VR Headsets At Metaverse

Binance Academy Binance Academy 24.10.2022 13:21
TL;DR The Internet is on the verge of a new era, with both crypto projects and public companies exploring the possibilities of the metaverse. Some companies have confidently entered the metaverse early, while others have been on the fence despite their technology being an obvious fit. Such companies usually work with immersive hardware, 3D, interactive platforms, connectivity, blockchain, semiconductors, and security, which are essential for making the metaverse a reality. Introduction The metaverse has the potential to be one of the technological trends to disrupt current market structures. The new technologies required to build the metaverse will also present opportunities for anyone to be part of this next step of the Internet, be they new projects, public companies, or even individual investors. Learn more on Binance.com The metaverse has gained massive popularity in a short time. Facebook's rebranding to Meta was may have established the metaverse as something more than a passing trend. Apart from crypto projects, numerous big companies have begun to recognize the metaverse as the next stage of Internet evolution. The Internet has undergone a series of major changes throughout its history — namely, Web1, Web2, and Web3. The first version of the Internet consisted mainly of static sites that could display only information. Today, in the Web2 era, users have social media platforms and dynamic websites that allow them to alter their data and upload their own content. We are currently anticipating the emergence of Web3, which could see the metaverse come to fruition. Web3 will consist of more open, connected, intelligent websites and web applications that will allow users to have greater ownership and control of their data and content. As such, Web3 could also weaken the power held by large, centralized Web2 enterprises today. Like the metaverse, Web3 doesn't actually exist yet. However, some of its essential technologies do. For instance, blockchain and cryptocurrency could bring decentralization and digital economies to Web3. In addition, virtual reality (VR) and augmented reality (AR) could enhance online social interactions on Web3 platforms. At the same time, artificial intelligence (AI) could improve language processing (such as for customer service bots) on Web3 due to its ability to link human-created content to machine-readable data. With the metaverse, everyone has a chance to be part of the next phase of the Internet. For example, new projects could build metaverse components and solve the Internet’s current problems. Additionally, companies that are less financially restricted could build vital technologies and explore how their current products and services could contribute to the metaverse. Even individual investors can participate in Web3 by buying stock in metaverse-related companies. Publicly listed companies have been exploring the metaverse to see how it may suit their needs. For instance, Microsoft is focusing on virtual offices and working environments in the metaverse, while Google is developing an AR solution that connects the digital and real worlds. Similarly, Fortnite producer Epic Games plans to connect AR, VR, and 3D content to its platforms. These developments give users a vision of what the companies behind them are trying to achieve. While there’s no way of knowing which companies will succeed in the metaverse, users can already buy their stocks — one way users can involve themselves in the metaverse ecosystem to aid its progress. Businesses risk losing their competitive advantage if they don't keep up with fundamental changes in the economy, such as technological development. These changes usually give rise to new dominant companies and can cause one-time market leaders to lose their positions or even vanish from the market. Growing interest in the metaverse may be the result of companies perceiving it as the next so-called secular trend. Secular trends are major changes in the industry that continue to develop over a long period of time, with prime examples including  personal computers, mobile devices, and e-commerce. Companies might therefore see involvement in the metaverse as necessary to support their future trajectory. There are various ways in which public companies can enter or support the metaverse. This article will dive into immersive hardware, 3D creation software, interactive platforms, connectivity, blockchain, semiconductors, and security. Immersive hardware The popular consumer products of today are limited to sight and sound. Even our view of future metaverse hardware usually incorporates only VR headsets. However, immersive hardware could bring the dimension of touch to the metaverse. For instance, potential haptic devices could allow people to have a physical connection with the virtual world.  3D creation software Creating digital environments that mimic the real world as closely as possible can be difficult and time-consuming. With 3D cameras, however, 3D creation software may be able to solve these problems. Developers would first capture natural environments on film, then feed the 3D spatial data to the relevant software. This software would then process and generate a virtual double that could be used in the metaverse as a base on which users can build. Interactive platforms Online shopping is huge in the Web2 era — with interactive tools, users can add things to their shopping carts and move between pages via links by clicking the correct spots on their screens. Similarly, native interactive tools and venues are needed to enable users to interact with the metaverse. Interactive platforms would make this a reality and drive activity in the metaverse.  Connectivity Fast connectivity has been indispensable since the advent of the Internet. The metaverse will likewise need lightning-fast connection to enable users to work, socialize, and play in real time. Computers must also be powerful enough to render 3D to ensure smooth connectivity. Blockchain Blockchain technology could become a foundational layer of the metaverse. It allows for a decentralized and transparent way to achieve digital proof of ownership, digital collectibility, and governance. It also promotes accessibility and interoperability.  In addition, cryptocurrency is built on the blockchain and enables users to transfer value while they work and socialize in the metaverse. Other blockchain applications for the metaverse include non-fungible tokens (NFTs) and decentralized finance (DeFi).  Semiconductors As mentioned above, the metaverse will have higher computing power requirements, thereby necessitating advancements in semiconductor technology. Furthermore, improved semiconductors are essential for the metaverse as it will generate a large amount of data to be stored. Security The metaverse will collect a vast amount of data from its users, many of whom would prefer to remain anonymous and not leave any trace of their identities, finances, or other sensitive data in the wrong hands. This is why the metaverse will require cybersecurity solutions. Unity Software Unity Software is the industry leader in 3D software, with half of all 3D content produced today using its software technology. It stands to reason, therefore, that Unity Software could be involved in creating metaverse content. Shopify, Inc. Shopify is one of the world’s largest e-commerce platforms. Its current software products are aimed at online retailers, assisting them with payments, analytics, and order completion. This gives it the potential to shape commerce relations in the metaverse. Shopify already has an NFT platform in beta that allows NFT sales using its storefront. It also has a token-gated commerce platform its clients can use to connect with fans and drive sales. Meta Platforms Inc. Since its rebranding from Facebook, Meta has invested billions of dollars in developing metaverse content, software, and AR and VR headsets. Match Group Inc. Match Group is the parent company of popular dating apps like Tinder and Hinge. It acquired leading South Korean social discovery and video technology company Hyperconnect in 2021 to create new digital channels through which people could meet and engage with new connections, regardless of borders and language barriers. CrowdStrike Holdings CrowdStrike Holdings is a cybersecurity technology company that offers cloud-delivered protection to stop breaches and as such, could meet the metaverse’s cybersecurity needs.   Closing thoughts The metaverse is a hot topic in the technology industry that has already attracted investments from many companies despite not actually existing yet. Web3’s potential to shift power from centralized Web2 giants to the people may well lead new projects, public companies, and even individual investors to invest in its critical infrastructure.
In Crypto, You Could Prove You Own A Private Key Without Revealing It

It All Started With Bitcoin, This Is Why BTC Indicates The State Of The Entire Cryptocurrency Market

Binance Academy Binance Academy 19.10.2022 14:07
TL;DR Bitcoin dominance is the share of the original cryptocurrency, BTC, in the entire crypto market’s capitalization. For quite some time since its inception in 2009, bitcoin remained the only digital asset in existence and thus, naturally, solely accounted for all the crypto market’s capitalization. However, over time, things started to change. The year 2013 saw the first wave of altcoins that added their value to the crypto market cap’s formula. 2015 was the birth of Ethereum — Bitcoin’s closest rival that spawned the currency ether — and then, in 2017, the ICO boom resulted in BTC dominance further diluted and hitting an all-time low, only to recover to above 50% in a few months. Today, BTC dominance faces its heaviest competition in DeFi, NFT and metaverse tokens, and over 20,000 non-bitcoin cryptocurrencies. Introduction Bitcoin, the world’s first cryptocurrency, was launched to the public in 2009 by an anonymous developer or group of developers known as Satoshi Nakomoto. Since then, despite the emergence of competition, bitcoin has remained the world's largest and most valuable cryptocurrency. Its underlying technology has also inspired the development of thousands of new cryptocurrencies collectively known as alternative coins, or altcoins.  Bitcoin’s standing against the rest of digital assets continues to be hugely important and indicative of the state of the overall crypto market. To measure bitcoin’s market cap relative to the larger crypto market, traders and analysts use a ratio called bitcoin dominance, also known as BTC dominance. Learn more on Binance.com What is BTC Dominance? BTC dominance is the share of bitcoin in the crypto market’s overall value. It is calculated by dividing BTC’s market cap by the total cryptocurrency market cap.  But why is it important? Historically, traders have used BTC dominance to help understand whether altcoins are on an up or downtrend against bitcoin. For example, one popular theory is that the crypto market is heading into a bull market if altcoins are trending up. In 2017, for instance, a significant decline in BTC dominance signaled altcoin prices skyrocketing (rather than BTC price declining), coinciding with the entire market entering a bull phase. From One Cryptocurrency to Thousands In 2011, the first altcoin, litecoin, was born, and in 2013 — dubbed “the year of the bitcoin” by Forbes magazine — the number of new altcoins entering the market began to rise quickly. By May 2013, the crypto market counted at least ten tokens, including litecoin (LTC) and Ripple’s XRP.  Concurrently, bitcoin’s price skyrocketed as more investors discovered the digital asset space for the first time. Yet, even with a few newcomers to compete against, BTC dominance remained at around 95% during this period.  The birth of Ethereum In 2015, Vitalik Buterin and a team of developers launched the Ethereum (ETH) network. It set to rival Bitcoin as a blockchain that allowed more use cases beyond financial services like the transfer of money. Unfazed by the competition in Ethereum’s native token, ether (ETH), bitcoin continued to account for around 90-95% of the crypto market. Things only started to change in 2017 — the start of the initial coin offering (ICO) boom. ICO fever  Initial coin offerings (ICOs), a popular crowdfunding method for early-stage crypto projects, became a prominent trend from 2017 to 2018. There were around 2000 unique ICOs during this period, with over $10 billion raised cumulatively. Funds began flowing from bitcoin into many of the newer altcoins that surfaced at that time. Some investors believed in the compelling, yet unproven, use cases, while some were more interested in profiting off dramatic price swings.  The unprecedented influx of altcoin competition resulted in bitcoin dominance experiencing its first major decline, dropping to an all-time low of around 37% in January 2018.  2018’s crypto winter While it had generated considerable attention toward crypto, the ICO boom was ultimately short-lived. Investors realized that many ICO projects lacked core fundamentals or had questionable business practices. Some projects even became the target of regulatory scrutiny by the U.S. and other authorities. This increase in negative sentiment eventually overtook the industry, sending the entire crypto market into a prolonged period of price decline and stagnation. Bitcoin’s recovery With many altcoins’ value tanking and investors’ general disillusionment in ICOs, BTC dominance gradually climbed back to over 50% by the final months of 2018.  In 2019, bitcoin’s price experienced a slight resurgence, trading at around $7,000 by the end of the year, while BTC dominance peaked at about 70% in September. The digital asset, however, would remain relatively still until the COVID-19 pandemic struck the world in 2020. The COVID market Beginning in 2020 — in the aftermath of a short, COVID-fulled dip — the crypto market would enter a record-breaking bull run. Simultaneously, BTC dominance would reach 72% in January 2021, its highest tally since 2017, before collapsing to 39% by mid-2021.  With the looming pandemic, many people, bored and stuck at home, turned to day trading and investing to pass the time. Meanwhile, to offset the pandemic’s economic downturn, governments around the world issued cash handouts to stimulate their struggling economies. Retail traders invested a considerable portion of these funds in stocks, forex, or the crypto market for the first time. Now, following all the media attention to crypto during the latter half of 2020, altcoins became an increasingly attractive, albeit risky, choice for retail investors, especially newcomers looking for quick gains. For example, shiba inu (SHIB) saw its price go up more than 40 million percent in 2021.  Further, the rapid growth of innovations like decentralized finance (DeFI) and NFTs, which primarily exist on competing blockchains like Ethereum and Solana (SOL), contributed to bitcoin losing more of its market share. Solana’s price, for example, increased from $1.50 to an all-time high of $250 in 2021 after gaining significant institutional and retail interest in its underlying technology.  Since then, BTC dominance has struggled to climb over 50%. BTC dominance’s recent slow growth may have something to do with ETH 2.0, Ethereum’s long-awaited switch to proof-of-stake, and the ongoing bear market.    Clothing Thoughts In recent years, the growth of the altcoin market has diluted bitcoin’s market share. Unlike the early years, when there were very few competitors, bitcoin now competes against DeFi tokens, the increasingly popular NFT sector, and thousands of other cryptocurrencies.  Even so, bitcoin is still the leading cryptocurrency in terms of market cap, with BTC dominance unlikely to go away anytime soon. For starters, many investors see bitcoin as a store of value because of its finite supply — hence the nickname “digital gold.” But most importantly, bitcoin’s status as the industry’s first-ever cryptocurrency has given it a competitive edge in the digital asset market. However, history has shown if something better comes along, that first-mover advantage won’t last very long. It remains to be seen if there’ll ever be another cryptocurrency to dominate the crypto market as much as bitcoin has so far.
Cross-Chain Interoperability Solutions Have The Potential To Significantly Improve

Decentralization And Security Are So Fundamental To Blockchain

Binance Academy Binance Academy 16.10.2022 09:26
TL;DR Blockchains can only handle a limited number of transactions per second. The Bitcoin network, for example, can process around seven transactions per second. If blockchain technology is to be adopted globally, it should be able to handle much more data, and at faster speeds, so that more people can use the network without it becoming too slow or expensive to use. However, the fundamental design of many decentralized networks means that increasing scalability tends to weaken decentralization or security. This is what’s known as the blockchain trilemma. Developers looking to solve this problem are experimenting with different consensus mechanisms and scalability solutions, such as sharding, sidechains, and state channels. Introduction In basic terms, a blockchain is a distributed digital database. Blocks of data are organized in chronological order. The blocks are linked and secured by cryptographic proofs. The implementation of this technology across different industries is already changing how we work and live.  The idea is that decentralized and secure blockchains allow for a world where we don’t need to rely on third parties for networks or markets to function. However, experts generally agree that if this tech is to be more widely adopted there’s a core problem that needs solving. The problem in question is known as the “blockchain trilemma”. This term was popularized by Ethereum co-founder Vitalik Buterin. For it to make sense, you need to be aware of three different elements that are desirable in a blockchain: decentralization, security, and scalability. The blockchain trilemma refers to the idea that it’s hard for blockchains to achieve optimal levels of all three properties simultaneously. Increasing one usually leads to a weakening of another. This article will examine all three elements in the trilemma and explain what each one is in more detail. Discussing each in more depth, and how they fit together, will result in a better understanding of how and why the blockchain trilemma exists. This article will also highlight some of the solutions that have been suggested by developers. Learn more on Binance.com What is decentralization? Bitcoin and similar blockchain networks are decentralized by design. The whole structure is such that there is no one person or organization in charge. Rather, it is decentralized. The network layer is open to anyone who wants to participate. As a result, control is fully distributed rather than held by one single entity. Everyone has access to the same data. If anyone tries to cheat the system by changing the records in their favor, then the rest of the participants will reject the faulty data. This can get quite technical, but let’s take the Bitcoin network as an example. There is no third party in control. Compare this with the need for banks in the financial system. The banks enforce trust between people transacting, and ensure all records are kept correctly. The Bitcoin blockchain, however, shares all that data with everyone on the network, so that it can be checked and confirmed, before being added to the digital database. The result is a system that can exist without the need for third parties. Decentralization offers the possibility of what is known as Web3. Right now we have Web2 — the internet of today. It’s full of sites and apps controlled by companies, but featuring content made by the users. Web3 is the next step. An internet where decentralized blockchain tech lets people control their own data and online lives.  One thing to note, however, is that because of how these distributed systems work — with a need for a wide range of participants to agree on the validity of any data — transaction times can be slow due to the way information needs to be shared and processed. And so, blockchains need to scale, which is to say be capable of handling more data at faster speeds. We’ll come back to this point when discussing scalability. Additionally, the decentralized dream only holds if the underlying blockchains are secure. If a blockchain lacks security, then a bad actor can take control and change the data in their favor. This leads to the second part of the trilemma: security. What is blockchain security? It doesn’t matter how decentralized a blockchain is if it lacks security. A good blockchain network should be resistant to attacks from malicious entities. Centralized systems derive their security from the fact that the system is closed. Whoever is in control can guarantee the data is free from interference. But how is this achieved in a decentralized system where anyone can take part? It’s a complicated topic, but we can return to Bitcoin as an example of decentralized blockchain security. The Bitcoin blockchain uses a combination of cryptography and a network consensus mechanism called Proof of Work (PoW). In terms of cryptography, each block has a kind of digital signature (or hash). Each block of data is connected in a way that can’t be tampered with because any changes would alter a block’s hash. Any attempt to change the data would be quickly identified by the rest of the network. The PoW consensus mechanism is another part of the puzzle. It helps secure the cryptocurrency’s ledger. Understanding Proof of Work is a whole article in itself, but for our purposes, note that members of the network can only verify new transactions and add them to the ledger through an activity known as mining. This involves using computational power to solve a mathematical puzzle. Part of the process requires these computers to perform numerous hashing functions. This plays into the issue of scalability, as the PoW mechanism is secure but relatively slow. Also note that the more participants (nodes) there are in the network, the more secure it is. The greater the number of parties, the harder it becomes for one bad actor to take control of the system. This relates to what is known as the 51% attack. As an overview: if a single entity (or group of bad actors) can control more than 50% of a blockchain’s total network hashing rate, then they would be able to override consensus and change the chain’s data to benefit themselves, such as double spending tokens.  In short, security is a fundamental requirement for a blockchain to be successful because, without it, attackers can take control of the chain, rendering it useless. What is scalability? Scalability refers to the goal of building a blockchain that can support more and more transactions per second. Scale is required if blockchain tech is to serve wider society and possibly billions of users. But this is where a lot of blockchains still struggle.  This is because decentralization and security are so fundamental to blockchain that they tend to be focused on first. Decentralization is so central to the ethos and goals of blockchain that it lies at the very heart of most recognized blockchains. Security, as we’ve discussed, is a core requirement for a blockchain to be successful and useful. However, by prioritizing decentralization and security, scalability becomes a challenge. The number of transactions a chain can handle can be severely limited. A centralized payment system such as Visa states that it’s able to support 24,000 transactions per second. This is because the network is closed, and free from considerations such as public nodes and consensus. Compare this with some of the best-known blockchains.  According to Bloomberg in 2022: “As of September, Bitcoin was unable to handle more than seven transactions per second and Ethereum, the second-most popular network, was limited to about 15 per second — a lifetime compared to conventional exchanges.” As mentioned, these blockchain transaction speeds are limited due to the way the information needs to be processed by the different participants that make up the decentralized network, and the nature of the PoW consensus mechanism itself. If more and more people in society begin to use blockchain technology, the networks will become jammed due to the limited number of transactions they can handle. Why the blockchain trilemma exists The most obvious and basic solution to the problem outlined above is to reduce the number of participants confirming and adding to the network data in exchange for greater scale and speed. But doing so would lead to a weakening of decentralization with control handed to a smaller number of participants. And it would also lead to a weakening of security as fewer players means a higher chance of attacks. So here lies the trilemma: given the connection between the desired properties of decentralization and security, the fundamental design of how blockchain works makes it hard to scale. Increase one, and you weaken another. How do you push scalability without damaging decentralization, security, or both?  Solving the blockchain trilemma There is no one golden solution to the trilemma. But given the importance of solving this problem, there have been a number of different approaches within the community with interesting results. Let’s run through an overview of some of the most popular developments to give you an understanding of what’s happening in the space: 1. Sharding This is a method of splitting blockchains (or other types of databases) into smaller, partitioned blockchains that manage specific data segments. This setup takes the stress off a single chain dealing with all transactions and interactions on a network. Each partitioned blockchain is known as a shard and has its specific ledger. These shards can then process their own transactions, but a beacon blockchain or main chain manages interactions between shards. This makes sharding a Layer 1 network scalability upgrade, as it’s a change to the mainnet of a blockchain. 2. Different consensus mechanism One of the reasons the trilemma exists in the Bitcoin network is because of the way PoW works to ensure security. The need for miners, crypto algorithms, and huge amounts of decentralized computing power leads to a secure system, but a slow one. Finding a different way to secure consensus is one approach to solving the trilemma. This was one of the reasons behind Ethereum's move from PoW to Proof of Stake (PoS). In PoS blockchains, participants involved in validating transactions must stake (lock) their tokens. There’s no need for highly specialized mining machines. Adding more validators to the network is simpler and more accessible. PoS is just one of many different approaches to consensus mechanisms with scalability in mind.  3. Layer-2 solutions Both sharding and different consensus mechanisms are what are known as Layer-1 solutions. They look to change the fundamental design of the underlying network. But other developers seeking to solve the trilemma have been working on solutions that build on top of an existing network structure. In other words, they think the answer lies in a second layer, or Layer 2. Examples of this include sidechains and state channels. A sidechain is basically a separate blockchain connected to the main chain. It’s set up in a way that assets can flow freely between the two. Importantly, the sidechain can operate under different rules, allowing for greater speed and scale. Similarly, state channels are another way of taking transactions off the main chain and easing pressure on Layer 1. A state channel uses a smart contract, rather than a separate chain, to enable users to interact with each other without publishing their transactions to the blockchain. The blockchain only records the start and end of the channel. Closing thoughts The scalability trilemma stands in the way of blockchain fulfilling its potential as a technology to change the world. If blockchain networks can only handle a small number of transactions per second in order to maintain decentralization and security, then it will be difficult to reach mass adoption. However, the solutions currently put forward by developers seeking to solve this problem suggest that the technological advances already made by blockchain will only continue, and these networks may well be able to handle much more data in the future.
WOOFi DEX Facilitates Spot Trading Of Popular Blue-Chip Assets (BTC,ETH)

WOOFi DEX Facilitates Spot Trading Of Popular Blue-Chip Assets (BTC,ETH)

Binance Academy Binance Academy 14.10.2022 12:15
TL;DR   WOOFi is an all-in-one decentralized application (DApp) built by WOO Network. The main goal of WOOFi is to enhance users’ experience with decentralized finance (DeFi) by providing reduced slippage, competitive swap fees, and other useful features. WOOFi users can swap popular digital assets and access income-earning opportunities like staking and providing liquidity to the network. One of the platform’s main value propositions for DeFi users is deep liquidity. Introduction Since 2020, decentralized exchanges (DEXes) have experienced rapid growth. In August 2022 alone, the monthly DEX total trading volume exceeded $66 billion. To meet the ever-growing demand for low-fee on-chain trading, WOO Network launched WOOFi in October 2021 and WOOFi DEX in June 2022. Together, WOOFi and WOOFi DEX offer a suite of tools from those enabling simple swaps all the way to professional trading interfaces. Learn more on Binance.com How does WOOFi work? WOOFi’s product offerings are designed to help DeFi users access competitive prices, low fees, tight bid-ask spreads, as well as a variety of yield-generating opportunities. The platform offers three main use cases: Swapping  By paying a minimal 0.025% fee with WOOFi Swap, users can swap popular, financially-sound, blue-chip assets within or across chains supported by WOOFi. Earning Anyone can deposit digital assets to earn competitive APYs through WOOFi’s single-sided staking solution, Supercharger Vaults. Single-sided staking requires users to stake only one type of token. This model incentivizes asset holders to provide liquidity to WOOFi, in turn enabling WOOFi to offer better liquidity to traders. Staking Token holders can stake their WOO tokens on the WOOFi platform to earn revenue from WOOFi’s minimal 0.025% swap fee. WOOFi Swap Unlike other DApps, WOOFi simulates the deep liquidity from WOO Network’s centralized exchange, WOO X, meaning users can enjoy DeFi services with more affordable, CeFi-grade prices. Other advantages of using this model include reduced slippage and increased resistance to sandwich attacks. Slippage refers to the difference between the asset’s market price and its actual price upon order execution. It is more likely to get wider when market conditions are volatile or when trading with low-liquidity assets, causing traders to buy or sell their assets for more or less than expected. WOOFi DEX Launched in June 2022, WOOFi DEX is WOO Network’s decentralized exchange powered by Orderly Network. The platform was designed to bring high liquidity, advanced trading tools, a customizable user interface (UI), and a transparent order book to NEAR protocol. WOOFi DEX helps connect traders with a platform that offers faster execution and lower fees, in addition to allowing traders to maintain custody of their assets.  WOOFi DEX facilitates spot trading of popular blue-chip assets like BTC, ETH, and NEAR. In the future, the platform is expected to expand its services and implement functionalities like margin trading, perpetual swaps, lending, and even borrowing. Bootstrapped by leading market makers like Kronos Research, AGBuild, and Ledger Prime, WOOFi DEX is positioned to deliver an improved DeFi trading experience that has the look and feel of a centralized exchange.  WOOFi Supercharger vaults WOOFi enables users to deposit a single token and earn competitive yields while maintaining complete exposure to their favorite assets. Up to 90% of the assets in the Supercharger vault can be borrowed by WOOFi’s liquidity provider at a fixed rate to provide liquidity to WOOFi. The remaining assets are deployed to third-party DeFi protocols for external yield farming. By hedging on WOO Network’s centralized exchange, WOO X, and therefore remaining market-neutral, WOOFi’s liquidity providers can ensure that there are always sufficient funds for users to withdraw upon request. This dual strategy enables depositors to directly benefit from two separate sources of revenue while providing liquidity to WOOFi. Users can request to withdraw their deposited assets with no fee or limit (except when the vault is under settlement) once the 7-day settlement cycle is complete. Ten percent of each Supercharger vault’s Total Value Locked (TVL) will be set aside each week for instant withdrawals, though a 0.3% withdrawal fee will be charged to prevent abuse of this system. What makes WOOFi unique? sPMM liquidity model Instead of adopting an automated market maker (AMM) model like most other DEXes, WOOFi leverages an innovative synthetic proactive market making (sPMM) approach to achieve deeper liquidity. The sPMM model aims to simulate the deep liquidity from WOO Network’s centralized exchange, WOO X, allowing the WOOFi Swap to offer lower slippage and competitive DeFi prices while staying decentralized. Protection against sandwich attacks A sandwich attack occurs when a malicious trader places one order before and one after a pending transaction on a DeFi protocol to manipulate asset prices. An exploiter thus pushes an asset price up by placing a bid at a higher price than a victim’s pending bid price. When the victim buys at the higher price, the attacker can sell their asset at the new, artificially inflated price.  Sandwich attacks are common among large traders who swap assets with AMM-based DEXes. Since AMM price discovery is driven by the token balances in the liquidity pool, attackers can take advantage of this transparency to inflate prices. In contrast, WOOFi’s sPMM price discovery is determined by the parameters of on-chain price feeds instead of pool liquidity. Bad actors will not be able to predict prices based on token balances. The DEX that pays for order flow Currently, WOOFi has a broker program in place, where it pays 0.5 basis points (bps) on the volume sent by third-party DApps as a rebate.  What is WOO?   WOO is the native token used by WOOFi and the larger suite of WOO products. It provides staking rewards, fee discounts, and governance rights across the WOO Network ecosystem.  How to buy WOO on Binance?   You can buy WOO on cryptocurrency exchanges like Binance.  1. Log in to your Binance account and go to [Trade] -> [Spot].  2. Type “WOO” on the search bar to see the available trading pairs. We will use WOO/BUSD as an example. 3. Go to the [Spot] box and enter the amount of WOO you want to buy. In this example, we will use a Market order. Click [Buy WOO] to confirm your order, and the purchased WOO will be credited to your Spot Wallet. Closing thoughts   The unique liquidity model that WOOFi uses was designed to mimic a traditional exchange’s order book to offer key benefits like deeper liquidity, more competitive prices, and overall a better DeFi trading experience. Those looking for reduced slippage can check out WOOFi and the larger WOO ecosystem for more information.
Cryptocurrency Mining - What Is It? How To Do It?

Cryptocurrency Mining - What Is It? How To Do It?

Binance Academy Binance Academy 13.10.2022 22:35
TL;DR Bitcoin and many other blockchain networks use the Proof of Work (PoW) consensus algorithm for cryptocurrency mining. There are many possible ways to mine cryptocurrency; it can be done alone, or in conjunction with others. You can use special mining computers or even the devices already found at home, like your personal computer. While anyone can become a miner, not everyone becomes profitable from it. Before starting, mining requires studying, choosing the correct devices and programs, and some practical tinkering. Introduction Before starting cryptocurrency mining, one should start with a bit of research. It's because different protocols may require unique hardware and software. While mining attracts various people to the cryptocurrency ecosystem due to its possible high rewards, it also enables them to partake in an integral role in making decentralized blockchains possible. Cryptocurrency mining is a highly technical topic, and there is more than one way to do it. This article will cut through the noise and give a more practical idea about it. Learn more on Binance.com What is cryptocurrency mining? Blockchain networks use mining to create and validate new blocks of transactions and secure the network. In the process, the so-called miners use significant amounts of computational resources to create new units of cryptocurrencies, increasing their existing circulating supply. Bitcoin, Litecoin (LTC), and many other blockchain networks use the Proof of Work (PoW) consensus algorithm for cryptocurrency mining. PoW determines how a blockchain network reaches consensus across all the distributed participants without third-party intermediaries. In addition, it solves the double-spend problem, preventing the network participants from using the same funds more than once. PoW promotes good network participation by design. Miners compete by solving complex cryptographic puzzles with mining hardware to win the right to mine the next block. The first miner to find a valid solution and confirm their block of transactions receive rewards. Therefore, the process requires effort and is expensive, but it offers compensation for the work. PoW mining also makes a blockchain network more decentralized. A blockchain can function as a decentralized ledger because countless distributed computers (nodes) worldwide maintain it. Therefore rather than having a single database, these interconnected computers maintain a copy of the blockchain data and communicate with each other to continuously ensure the correct state of the blockchain. However, it's also possible to disrupt a blockchain with a so-called 51% attack. While very unlikely, especially for the larger blockchain networks, a single entity or organization could, in theory, take over 50% of the network's computing power. That amount of mining power would let the attacker intentionally exclude or alter the ordering of transactions, also enabling them to reverse their own transactions. Another potential issue regarding cryptocurrency mining relates to its sustainability and expenses. Cryptocurrency mining requires significant investment, not only in hardware but also in energy. As a result, many miners, especially those that mine bitcoin (BTC), consume massive amounts of electricity. In addition, if a miner doesn't have access to several mining rigs and cheap electricity, the mining will unlikely ever turn into a profit. Types of cryptocurrency mining Miners receive a block reward when they validate a block successfully. The more computing power the miners contribute to the network, the better their possibilities to validate the next block. Yet, as more miners join the game, validating blocks begin to require more computing power. Therefore mining can become too expensive for individual miners. There is not just one way to mine cryptocurrency. So let's go through the major ones individually so that you can choose the right one regardless if you plan to mine as an individual or as part of a collective. ASIC mining Application-specific integrated circuits (ASIC) are computers designed for a single purpose. Some ASIC mining rigs are entirely dedicated to mining cryptocurrency. Keep in mind that new ASIC models can quickly cause older designs to become unprofitable. Also, the so-called ASIC-resistant cryptocurrencies cannot be mined using ASIC miners. GPU mining Unlike ASICs, graphics processing units (GPUs) can serve more than one purpose. Traditionally, their task in a computer is to process graphics and output them to a screen. GPU mining offers a lower entry to cryptocurrency mining because users can do it with affordable and more available hardware like standard laptops. Even though you can still mine some altcoins with GPUs, their efficiency depends on the mining difficulty and algorithm. CPU mining A central processing unit (CPU) is the primary component that operates computers. CPU mining lets you use the idle power from your computer to mine cryptocurrency. Even bitcoin was mined at the beginning using a CPU, but nowadays, CPUs are no longer the most efficient for cryptocurrency mining due to their power constraints. Mining pools Mining pools refer to a group of miners that join forces to combine their computing power (also known as hashing power or hash rate). As their probability of finding new blocks rises, they can earn more collectively and share the rewards. Many miners join mining pools to get a more steady and predictable outcome. Solo mining Solo mining is the opposite of mining pools because it doesn't require other participants. In solo mining, a miner executes the mining process alone. However, especially with major cryptocurrencies, it's harder for miners to succeed due to the increasing competition from the enormous combined processing power of mining pools. Cloud mining In cloud mining, you outsource computational work from a cloud-mining farm. It usually consists of you paying for someone else to mine on your behalf. Therefore, it can make the mining process easier to start because it doesn't require specialized hardware to mine cryptocurrency. In addition, miners rent computing power from a company that can be located anywhere in the world, which means there are no electricity bills or storage issues either. However, this option can be risky as there is no guarantee that you will receive the rewards of your investment. Many of these services have even turned out to be scams. How to mine crypto? Mining has the potential to become a passive income source. You can follow this step-by-step overview guide to start mining on your own. However, keep in mind there are various approaches and techniques to mining. Therefore, these steps might not be effective for some mining methods, and others might require extra measures. Also, note that mining is not always an easy or profitable endeavor as it can be at the mercy of fluctuating crypto prices and changing energy costs. It requires you to configure the mining devices correctly and demands some expenditures to keep the operation running on top of the initial investment.  1. Choose your crypto Cryptocurrencies differ in their mining difficulty. The difficulty refers to the effort the network requires to mine a block. The more miners join the network, the more the competition increases, resulting in rising hashing difficulty. On the other hand, when miners leave the network, the hashing difficulty goes down, making it less difficult to mine a new block. The biggest cryptocurrencies have conditions that are incredibly challenging to satisfy, and, therefore, it's harder for individual miners to earn revenue. For this reason, bitcoin miners use powerful ASICs and mining pools to increase their chances of getting rewarded. It’s common to mine Proof of Work (PoW) cryptocurrencies other than bitcoin, such as Dogecoin and Ethereum Classic. Altcoin networks might not be as congested and offer better chances for smaller miners. Altcoins might also offer higher growth potential due to their untapped potential. In addition, miners can use less energy-consuming mining options as they don't require so much computational power. However, take into consideration that altcoin mining can be more volatile. Or, in the worst case, the protocol can get hacked or abandoned, and the tokens could become worthless. Also, it may be that you will need to renew the mining rigs and spend more money than you initially planned due to the growing popularity of specific cryptocurrencies. For example, in the beginning, miners could use just their laptops to mine bitcoin, which is not the case anymore. 2. Choose your mining equipment Cryptocurrency mining is one kind of competition. In the mining competition, miners benefit from powerful mining hardware because their probability of mining the next block grows. As mentioned, ASIC miners are designed to serve a single specific purpose, which makes them often the best option for cryptocurrency mining. Nevertheless, GPUs are also still viable in some networks, but their efficiency depends on the cryptocurrency's mining difficulty and algorithm. There are also some cryptocurrencies that require mining rigs designed especially for them. For example, Helium's crypto miner uses radio technology – the device is installed in a place with an unrestricted view in order to provide wireless network coverage. Therefore, always ensure what kind of hardware is necessary for the cryptocurrency you intend to mine. 3. Set up a crypto wallet You'll also need a crypto wallet to store the keys for the cryptocurrency you earn from the mining efforts. Once you earn something from the mining process, the mining software will move the rewards to the crypto wallet address you specify. For example, you can use the Trust Wallet to securely store your crypto and connect to thousands of projects across blockchains.  4. Configure your mining device Cryptocurrency mining requires you to download specialized mining software. The best way to access the software is from the website of the cryptocurrency you intend to mine. This way, you can make sure that you will have the right software for a specific cryptocurrency and avoid fake programs. Most mining software are free to download and use. In addition, some cryptocurrencies have multiple software to choose from, and they are often available for various operating systems. It's always good to do your own research (DYOR) before choosing the mining software to understand their differences. Another helpful part of setting up the mining device is to create a strategy to monitor electricity costs. You can start by checking the previous electricity bills and evaluating how much the mining will cost. The unfortunate fact is that the energy consumption of a mining rig might result in you spending more money on electricity than the value earned from mining. In addition, remember that the mining rigs make noise and warm up. Therefore, consider placing them in a safe location where they are adequately cooled and notifying your neighbors about the possible extra hum. 5. Consider joining a mining pool Mining pools can help you as an individual miner in terms of hardware and electricity costs. As a block reward is granted to the first successful miner, it's very unlikely that you are the one to guess the correct hash. For example, even if you would run several high-powered ASICs, you would still be just a microscopic part of the total Bitcoin hashing power. Mining pools raise a bigger pool of mining power, so the chance of discovering the next block is increased. In other words, if you combine your hashing power with a mining pool,  you could possibly earn more than doing the mining alone. Mining pools typically have a coordinator who organizes the miners so they are less likely to make mistakes. For example, coordinators should ensure that miners use different nonce values to avoid wasting hash power. Often, coordinators are also responsible for splitting the mining rewards to each pool member.. Is cryptocurrency mining worth it? Mining is one of the possibilities that people can consider when trying to produce passive income streams. It can become low-effort once the miner setup functions correctly and is connected to the network. But, of course, it won’t be completely passive as it will demand tasks like hardware maintenance, software updates, paying electricity bills, etc. However, even though mining can be passive, it's not necessarily profitable. For example, the underlying cryptocurrency's volatility can result in smaller overall rewards than the miner's electricity costs. The profitability of a mining operation depends on its size and location. For example, the largest cryptocurrency mining farms are strategically located in countries with the lowest electricity costs. In addition, some places also have volatile electricity prices that can interfere with mining. Mining probably requires some time before you start profiting from it because of the initial investment in mining hardware. So, the first mining period may go into paying back the costs. In addition, as we learned before, the hardware can get old and inefficient, which may mean additional expenses. Therefore, cryptocurrency mining might require more investment into hardware after the initial investment. Some people choose to mine cryptocurrency purely to support the decentralization and security of blockchains. Sometimes, even without any goal of profit.   Closing thoughts Mining is essential for blockchains because it helps secure the network while creating and validating new blocks of transactions. While anyone can start cryptocurrency mining, it’s essential to consider the costs and risks.  Mining also requires a certain degree of technical knowledge, especially when acquiring and setting up your mining equipment. It’s important to do your own research and understand the specifics of the cryptocurrency you want to mine. You will also need to set up a crypto wallet to receive potential mining rewards. But, remember, the crypto ecosystem changes rapidly, so keep your eye on the project developments and updates because they can change how cryptocurrency mining happens.
US 20-City house prices decreased by 1.3% month-on-month

Metaverse Real Estate - What Is It? | Binance Academy

Binance Academy Binance Academy 13.10.2022 15:01
TL;DR A piece of metaverse real estate is an NFT that provides the holder with digital proof of ownership over land on a metaverse platform. The land can, in most cases, be built upon to create experiences that lend themselves to advertising, socializing, marketing, entertainment, and more. The value of each plot of land depends on these factors, as well as overall market sentiment, collectibility, and platform popularity. Introduction The concept of the metaverse and digital real estate go hand in hand. But like many crypto trends, media coverage hasn't provided sufficient clarity. Just as it is with any other investment, it’s crucial to grasp the idea of metaverse real estate before purchasing any digital land. Compared to purely artistic non-fungible tokens (NFTs), metaverse real estate is simpler to comprehend due to its plain-to-see utility and use cases. Learn more on Binance.com How does real estate exist in the metaverse? For newcomers to the metaverse, digital real estate can sound like an oxymoron. The idea of physical property and real estate are firmly intertwined. However, while blockchain-based real estate in the metaverse may not be physical, it offers the same — or perhaps even stronger — ownership rights over a plot of (digital) land. Land ownership in a game, community, or other platform is represented by an (NFT). As NFTs are non-fungible (i.e., each one is unique) and can securely prove digital ownership, they act much like property deeds in digital real estate. An NFT can be traded, bought, and sold according to its market value, which is derived from a range of factors.Your metaverse real estate might be in a popular area with lots of digital foot traffic, making it suitable as advertising space. Staking benefits and other utilities also boost the value of the land. The specific metaverse platform you're on will determine the value of your land. Some metaverse platforms allow you a considerable degree of personalization, so you can build and plan your own space, events, and experiences. Examples include The Snoopverse on The Sandbox and Netflix's content on Decentraland. The appeal of metaverse real estate To understand the appeal of metaverse real estate, it's worth taking a step back and looking at the appeal of NFTs as a whole. On a technological level, NFTs provide legitimate digital proof of ownership. This is valuable in a world where it’s all too easy to copy files without any discernable difference. Next, we need to look at the collectibility aspect. Humans have always been passionate about collecting items for a variety of reasons. Apart from enjoyment and collectibility, an NFT may provide tangible benefits such as increased utility on a game or platform. Another appeal of NFTs is their investment potential, which is why many people hold them speculatively. During strong markets, NFT prices have generally followed rising market prices. NFT bull runs have, in some respects, also been a result of celebrity and media hype over the technology. Many people purchase metaverse real estate NFTs because they follow all the abovementioned principles. JPMorgan, for example, has purchased land in Decentraland for its:  1. Utility: They can host virtual guests on their Sandbox property and create an immersive experience. 2. Collectibility: Metaverse real estate is a highly collectible piece of pop culture that can aid marketing efforts. 3. Speculative properties: It's unlikely that JPMorgan would have bought land without expecting to either sell it for profit or increase its revenue via customer acquisition. What can you do with metaverse real estate? Virtual real estate is limited only by the confines of the metaverse. This gives it vast potential in our social and professional lives. Beyond investment and trading, this potential will drive long-term technology adoption. Anything the metaverse can cover can also be experienced through metaverse real estate. The exact use cases and intricacies will depend on your platform but, in theory, the sky's the limit. Individual users, creatives, and brands can all design their own experiences based on what their specific real estate offers. Concerts, meetings, trade shows, art exhibitions, and brand launches have all taken place on plots of digital land. This makes metaverse real estate an incredibly important tool in socializing and marketing. Large brands currently experimenting with the format include: 1. HSBC: Purchased a piece of land in The Sandbox in the first quarter of 2022 with a plan to create new brand experiences. 2. Samsung: Created a virtual experience called Samsung 837X in Decentraland and hosted events such as the #RecycleUp Fashion Show. 3. The South China Morning Post: Developed a digital version of the Hong Kong Star Ferry Pier in The Sandbox. The growth of metaverse real estate A rapidly growing following and rising sales of metaverse real estate have caught the attention of the media, public, and investors worldwide. According to data from Influencer Marketing Hub, "the average price of a parcel in major metaverse platforms has increased from $1,265 to $12,684", demonstrating a tenfold increase from January 2021 to February 2022. McKinsey reports that "more than $120 billion has flowed into the metaverse space already in 2022 — more than double the $57 billion of 2021". For such a young industry, the numbers can be staggering. However, rapid growth in market capitalization isn't necessarily correlated with longevity or a healthy market. We'll likely have to wait beyond this hyper-growth phase to realize the actual value of metaverse land. Nevertheless, some early investors have already benefited from the metaverse's growth. For example, a plot of land neighboring Snoop Dogg's property sold for almost half a million dollars. What affects the price of NFT virtual land? We’ve briefly described the appeal of NFT virtual land, but let's dive further into the three key factors that determine its price: 1. Utility: Each metaverse platform, game, or universe has a defined utility for its virtual real estate. Some allow for high levels of customization, while others provide you with in-game benefits or stat boosts. If your NFT virtual land has a particularly desirable utility, it will be able to command a higher price on the open market.  2. Platform: As mentioned above, the platform your land is on will define its utility. Beyond that, a platform's brand name and reputation also influence the value of your NFT land. This is akin to Nike or Adidas being able to charge considerably more than a lesser-known brand with comparable product quality. 3. Speculation: The idea that your metaverse real estate may be more valuable in future is often enough to affect its price. If the whole market shares this sentiment and is bullish on metaverse land price, speculation becomes a significant factor in determining price. Closing thoughts The long-term adoption and uptake of metaverse real estate go beyond the hype: they rely on actual use cases and utility to succeed. Nevertheless, it's fascinating to see the journey metaverse real estate has already taken in such a short time. As the metaverse's popularity and building blocks continue to rise, so will its maturity. As such, becoming familiar with digital property is a sound idea for any potential user or investor who is interested in the future of the metaverse.
Binance Academy summarise year 2022 featuring The Merge, FTX and more

Altcoins: BENQI (QI) - What Is It? How Does It Work? | Binance Academy

Binance Academy Binance Academy 13.10.2022 13:59
TL;DR BENQI provides users with an Avalanche-based network that’s scalable, accessible, and decentralized. The BENQI ecosystem has established two main protocols – BENQI Liquid Staking and BENQI Liquidity Market. BENQI Liquid Staking (BLS) is a liquid staking solution that tokenizes staked AVAX to allow users to utilize the yield-bearing asset within DeFi applications. BENQI Liquidity Market (BLM) enables users to lend, borrow, and earn interest on their crypto assets effortlessly. Depositors providing liquidity to the protocol earn yield, while borrowers can borrow in an over-collateralized manner. Introduction Decentralized finance (DeFi) has grown significantly over the past few years. This important crypto sector provides users transparent, accessible, and permissionless platforms for accessing financial tools. Whether you’re using BNB Chain, Ethereum, Avalanche, or another network, a wealth of financial services is available with just a few clicks. With a focus on approachability, ease of use, and low fees, BENQI aims to democratize access to two fundamental financial products: liquid staking, an innovative financial product for unlocking the value of staked coins, and lending & borrowing. Learn more on Binance.com What is BENQI? BENQI is a Decentralized Finance (DeFi) protocol built on the Avalanche network. The BENQI protocol consists of BENQI Liquid Staking and BENQI Liquidity Market. BENQI Liquid Staking (BLS) is a liquid staking solution on Avalanche where users can utilize locked capital staked with Avalanche validators. This feature provides additional utility to their yield-bearing asset without lock-up periods or tedious cross-chain transfers. BENQI Liquidity Market (BLM) is BENQI’s lending and borrowing protocol. Users can lend and borrow crypto-assets listed in a permissionless manner via smart contracts with no human intermediaries involved. Users earn yield for depositing assets into the market, and borrowing is done in an overcollateralized manner. How does BENQI work? BENQI Liquid Staking (BLS) Users stake AVAX on BLS and receive a yield-bearing asset, sAVAX, that earns yield accrued from Avalanche validator rewards. sAVAX can be freely transferred, traded, or used within DeFi applications such as automated market makers (AMMs), lending & borrowing protocols, and yield aggregators. Through BLS, users stake AVAX on the EVM-compatible Avalanche C-Chain without needing to stake on the Avalanche P-Chain. This mechanism allows users to earn validating rewards from the P-Chain without running a full node, locking up AVAX on a validator node, or meeting the minimum staking threshold. Users can redeem the AVAX asset at any time with no fees through a 2-week unstaking cooldown period or instantly swap it via AMMs with an exchange fee. BENQI Liquidity Market (BLM) BLM is BENQI’s lending and borrowing protocol deployed on the Avalanche network. It enables users to effortlessly lend, borrow, and earn interest with their crypto assets. Unlike traditional lending and borrowing markets, BLM operates entirely via smart contracts with no human intermediaries. Through smart contracts, yield is calculated algorithmically based on lenders' supply against borrowers' demand on BLM. Depositors providing liquidity to the protocol earn yield based on the algorithm, and borrowers can borrow in an over-collateralized manner.  Third parties that liquidate borrowers’ assets earn a reward fee. These liquidations are based on parameters set within these smart contracts and the price feed of assets supplied to them. BLM sources these price feeds from a decentralized oracle network, Chainlink, that provides reliable and secure price data. What makes BENQI unique? BENQI prioritizes approachability, ease of use, and low fees. By deploying on the Avalanche network, users can enjoy the benefits of a highly scalable platform that is both decentralized and low in fees. The founding BENQI team works extensively with both the Avalanche and DeFi community to continuously review and improve the BENQI unique suite of protocols that includes: BENQI Liquid Staking (BLS) 1. A seamless staking experience - BLS offers users a seamless solution to stake AVAX. By staking with BLS, users bypass the tedious process of running an Avalanche validator or having to meet the minimum requirement for staking on the Avalanche P-Chain. 2. High levels of liquidity and integration - Users that stake AVAX with BLS receive a yield-bearing token, sAVAX, deeply integrated across major DeFi applications on Avalanche. 3. Utility - The veQI token provides the QI token utility. By staking QI for veQI, Avalanche validators can directly stake AVAX delegations from BLS to their validator of choice to earn additional delegation rewards. BENQI Liquidity Market (BLM) Universal access - Assets listed on BLM include most blue-chip assets, like wBTC, wETH, AVAX, sAVAX, and a variety of widely adopted stablecoins, including BUSD. Through BLM, users can easily earn a yield on their assets while borrowing in an over-collateralized manner. Deep liquidity and connectivity - BLM provides users with deep liquidity for borrowing. Users can easily borrow and transfer assets to top centralized exchanges or bridge borrowed assets to major Layer 1 networks, including BNB Chain, Ethereum, Polygon, Arbitrum, and more. The QI token QI is the native token for BENQI with two main functions: governance and utility. QI is BENQI’s governance token that oversees the improvements and changes of the BENQI protocol. QI is required to decide and vote on proposals set out by the BENQI DAO, steering the direction of the protocol. Key parameters proposed and voted on include economic proposals, security upgrades, and additional development of the BENQI protocol. Users can stake QI on BENQI Liquid Staking (BLS) to receive veQI, a novel utility token that enables additional AVAX staking delegations to high-performing Avalanche validators. Vote-escrowed QI, veQI, represents a user’s voting power for additional AVAX delegations from BLS.  Through veQI, users can vote for specific Avalanche validators to receive additional AVAX staking delegations from BLS’s pool of AVAX liquidity. The amount of delegations is based on the validator’s aggregate vote count of veQI. A total of 30% of delegations from BLS is open to veQI holders. To be eligible, validators must first meet the validator minimum criteria. Closing thoughts BENQI opens up a wealth of options for existing users of DeFi or users curious to try DeFi without the additional friction it previously brought. With a focus on usability and a protocol with deep integrations within other DeFi platforms, all users need is a web3 wallet, an internet connection, and some funds.
DPX Token Registered A 24-Hour Return Of 11.11%

NFT: Who Is Beeple? Where Are NFTs Used? | Binance Academy

Binance Academy Binance Academy 13.10.2022 13:25
TL;DR Beeple is an American graphic designer and world-famous digital artist. His NFT work has been sold in a legacy art house, and he is among the three most valuable living artists. Many believe Beeple proved that art can also be digital and doesn't necessarily have to have physical properties. Besides his work being aesthetically impressive to many, various other developments of the NFT space and market structural aspects might also have their role in growing his popularity. Introduction Beeple has brought lots of attention to non-fungible tokens (NFTs) through his digital art. Therefore he can be regarded as an important figure in the adoption of NFTs. Moreover, his creations are a living example of one of the NFT use cases, which can spark other creative professionals to the possibility of doing the same. Learn more on Binance.com Who is Beeple? Beeple, or Mike Winkelmann by his real name, is an American graphic designer and digital artist. Before he gained fame in NFT art, his work was displayed in concerts by famous personalities such as Justin Bieber, Nicki Minaj, and Childish Gambino. His fame didn't come from a long career in traditional art galleries or particular expertise in non-fungible tokens (NFTs). His way to NFTs was more of a sudden experiment as more and more people recommended he try the new way to publish art. Today, Beeple has over 2 million Instagram followers and is among the three most valuable living artists. Beeple's NFT art often uses references to politicians, pop-cultural icons, and the like to satirize current world events and create interpretations of modern politics and culture. Interestingly, he found a way to attract the attention of the traditional art sector with his animated art NFTs while providing a way to express visual political and social commentary. What made Beeple famous? Beeple started selling NFTs in February 2020. His earliest drops surprised the art and technology worlds, with digital art sales reaching tens of thousands of dollars. One of the first NFT pieces that Beeple sold is called Crossroad. It had been designed to change according to the result of the November 2020 U.S. presidential election. That blockchain-registered art piece sold for 66,666.66 US dollars and then resold for 6.7 million. Beeple's big moment came when the legacy auction house Christie's announced his NFT art piece for auction, making it the first major auction house to sell a purely digital NFT piece of art. In addition, this was the first time Christie's accepted ether as a payment method. The art piece was called Everydays – The First 5000 Days and was sold for over 69 million U.S. dollars. It looks like an assemblage of colorful pixels but, in reality, comprises 5,000 individual images, which Beeple created each day for over 13 years. Beeple's rise to prominence may be due to his timing. He entered the NFT space just when it started gaining momentum. Another systemic reason could be the massive socio-economic changes in the world like the COVID-19 epidemic. As a result, people started spending more time on digital devices, working from home, and getting attracted to new digital applications more easily. Beeple selling the Everydays NFT happened during the boom cycle of NFTs. Nevertheless, as with any hype cycle, the NFT craze wave has subsequently subsided. How Beeple changed people’s perception of NFTs Beeple has been attracting a lot of mainstream attention to digital art through various successful NFT projects. For example, Christie's public announcement about selling digital art showed how NFTs could become part of what has been considered elite culture. It also proved to the broader audience that art can also be digital and doesn't have to have physical properties. Also, it raised public awareness of the combination of art and blockchain technology and the new possibilities it allows. Many artists started considering NFTs during the pandemic because they enabled artists to make a living without performing physically. In addition, they offer a new way to demonstrate their creative pursuit. Not just small independent artists but celebrities such as Paris Hilton, Edward Snowden, and Eminem started publishing NFT projects. For example, Snoop Dogg announced his first NFT collection called "A Journey with the Dogg" to demonstrate his early memories in the form of NFT art. In addition, Canadian musician Grimes created an NFT art collection of 10 pieces that explore futuristic worlds and earned millions in a matter of seconds. With all the big names entering the space, Beeple's work may have been pivotal for NFTs coming to the mainstream. Firstly, he became one of the world’s highest-paid artists and showed that creators could earn without relying on traditional publishers and media. Secondly, his debut art pieces demonstrated art styles that were possible only in digital form. Finally, he had been creating art long before NFTs became a thing, his digital pivot thus demonstrating that this new space is not only about money but also discovering new ways for artists to showcase their work. What’s next for NFTs Beeple became world-famous because of his NFT art. However, the scarcity and uniqueness of NFTs make them a good fit for various other use cases such as gaming, music, and finance. For example, gaming NFTs enable users to prove the authenticity of unique in-game items like guns and plots of land. In addition, the so-called play-to-earn NFT games allow users to generate income by playing them. Also, similar to art, it's possible to attach audio to an NFT to create a collectible piece of music. It is widely known that only a minority of musicians can make enough from their music to make a living, and NFTs hold the potential to make the music industry’s business model more equitable. NFTs could solve this problem with blockchain-based streaming platforms or blockchain royalty tracking. An NFT can also act as an entrance ticket to concerts and events, creating a secondary market for NFTs based on the access they provide. Despite the NFT market and the attendant exuberance somewhat slowing down in 2022, the NFT space continues to develop and reinvent itself, and we will likely see many new iterations and use cases for NFTs. In fact, even you can become an NFT creator. If you are already an artist or creator of some sort, NFTs could enable you to earn royalties without needing an agency or manager. In addition, unlike traditional art galleries, many NFT marketplaces let everyone participate. Blockchain technology makes NFTs inclusive. Also, as NFTs are digital, you can show off your creations anywhere in the world. And, like Beeple, perhaps you could gain recognition overnight by publishing your art for everyone to see. Closing thoughts Beeple has showcased that NFTs are a viable medium to distribute and own art. In addition to digital art, NFTs offer a way to improve current industries such as gaming, music, and finance. The NFT ecosystem will likely witness new projects with unique use cases and approaches to generating value.
Franc Records 11th Consecutive Daily Decline Against the Dollar as US Economic Concerns Mount

Technical Analysis - Average True Range - What Is It? ATR Explained | Binance Academy

Binance Academy Binance Academy 13.10.2022 13:12
TL;DR Average True Range (ATR) is a commonly used technical analysis indicator for estimating market volatility over a given period. Used as a tool to determine volatility, ATR was created by technical analyst J. Welles Wilder Jr. in his book "New Concepts in Technical Trading Systems", published in 1978.  Within a 14-day period, ATR can be used to calculate and provide estimated price volatility across different true ranges to determine an average. While ATR has various benefits, including as an aid for traders to determine stop-loss prices, it does have some limitations.   Introduction Trading is well known for its volatility, especially with cryptocurrencies. Traders often look to take advantage of these price movements and attempt to predict them. One possible method is technical analysis and price volatility indicators like Average True Range (ATR). For many traders, it's a valuable tool to understand and add to their technical analysis toolkit.  Learn more on Binance.com What is Average True Range?  ATR was created by technical analyst J. Welles Wilder Jr. in 1978 as a tool to measure volatility. ATR has since become one of the most well-known forms of technical volatility indicators.  It's now a significant part of other indicators that identify the directional movement of markets, such as Average Directional Movement Index (ADX) and Average Directional Movement Index Rating (ADXR). With ATR, traders try to determine an optimal period to trade volatile swings. The indicator calculates the market's average price of assets within a 14-day range. ATR doesn't provide trend information or price direction but offers a view of price volatility during that period. A high ATR implies high price volatility during the given period, and a low ATR indicates low price volatility.  When determining if they want to buy or sell assets during the period, these low or high price volatilities are what traders consider. It's important to note that ATR only approximates price volatility and should be used solely as an aid. How do you calculate Average True Range? To calculate ATR, you must find a given period's greatest true range or TR. This means calculating three different ranges and picking the greatest of the three: The latest period's high subtracted by the latest period's low The absolute value (ignoring any negative sign) of the latest period's high minus the previous close price The absolute value of the latest period's low minus the previous close price The period can vary depending on the trader's focus period. For example, with crypto, the period could be 24 hours, while for stocks, it may be a single trading day. To determine the average true range over a period of time (typically 14 days), the true range is calculated for each period and summated, and a simple average is taken.  Determining the ATR of said period allows traders to learn about the volatility of asset prices during that time. Typically, a trader will see ATR displayed as a line on their charts. Below, you can see that the ATR line rises as volatility increases (in either price direction). Why do cryptocurrency traders use Average True Range? Cryptocurrency traders often use ATR to estimate price volatility during a period. ATR is particularly beneficial in crypto due to the high volatility seen in crypto markets. One common strategy is to use ATR to set take-profit and stop-loss orders. When using ATR in this way, you can avoid market noise affecting your trading strategies. If you're trying to trade a suspected long-term trend, you don't want daily volatility closing your positions early. A typical method is multiplying the ATR by 1.5 or 2, then using this figure to set the stop-loss under your entry price. The daily volatility shouldn't reach your stop-loss trigger price; if it does, it's a good indicator that the market is moving significantly downwards. What are the drawbacks of using Average True Range? While ATR provides benefits to its users for its adaptability and price change detection, it comes with two main disadvantages: 1. ATR is often open to interpretation. This can be a disadvantage as no single ATR value can clearly specify if a trend will be reversed or not.  2. As ATR only measures price volatility, it doesn't inform traders of the change in an asset's price direction. One example is when there is a sudden increase in ATR, some traders might believe it is confirming an old upwards or downwards trend, which can be false. Closing thoughts  ATR is vital in many traders' toolkits for understanding volatility patterns. As volatility is a key consideration in cryptocurrency trading, it’s particularly well-suited for digital crypto assets. Its strengths lie in its simplicity, but do take note of its limitations if you decide to experiment with it in your trading activities.
Unveiling the Hidden Giant: The Growing Dominance of Non-Bank Financial Institutions

Binance Academy: Web1, Web2 And Web3 - Features, Drawbacks And More

Binance Academy Binance Academy 13.10.2022 13:06
TL;DR While the current version of the Internet, Web2, is used by millions, it is not without its flaws. Issues regarding data ownership, censorship, and security continue to plague the Internet, spurring the conceptualization of a new and improved version called Web3. This future Internet seeks to include technologies like blockchain, artificial intelligence (AI), and augmented reality (AR). At its core, an ideal Web3 should offer benefits such as data ownership and confidentiality. Web3 is touted to be an improved version of Web2 but what exactly is it, and is it better? Introduction The World Wide Web, also known simply as the Internet or the web, has changed drastically since it was first introduced to the world as Web1. As technologies improve and user demands evolve, it’s no surprise that the web has transformed accordingly.  Web1 allowed for content consumption and simple interaction. Web2, partially shaped by the explosion of smartphones and mobile internet access, enabled users to consume and create their own content. Now, a new concept of a future web known as Web3 has emerged. This latest iteration of the Internet is expected to allow users to not only consume and create content and data but also own it.  Learn more on Binance.com A brief history of the Web While the web has seen numerous changes over the years, its two major phases can be classified as Web1 and Web2. Web1 Web1, also known as Web 1.0, is the original Internet. It was made up of pages of static HTML – the web’s formatting language at the time – that displayed information online. Web1 ran on a fully decentralized infrastructure – anyone could host a server, build applications, and publish information on the Internet without gatekeepers censoring them. Users of Web1 could search for information on the net via web browsers.  Drawbacks of Web1 Unfortunately, there was no way for people to change information and there were few opportunities for interaction with others. Users could only communicate via simple chat messengers and forums. As such, users interacted with Web1 mainly as observers, not participants. Web2 Unlike Web1, the current iteration of the Internet is centralized, focused on content creation, and largely monopolized by big, successful tech companies. In the late 1990s, databases, server-side processing, forms, and social media collectively formed a more interactive Internet known as Web2, or Web2.0. This is the current version of the Internet, which is a playground for content creation. Whether you’re an aspiring writer, photographer, or influencer, you can easily create and showcase your work to the Web2 world.  Service providers such as WordPress and Tumblr offer people a platform to create content, while social media companies like Facebook and Twitter allow people to connect and communicate with anyone anywhere in the world. Additionally, mobile internet access and the popularization of smartphones enable anyone to consume content easily. Web2-centric companies have reaped the benefits of this Internet revolution. Other than profits, companies have also built a large database of users. Bigger companies like Google and Facebook have bought over smaller ones, accumulating a central global network of users and their data. Drawbacks of Web2 Since the advent of Web2, big Internet companies have realized they can utlize user data to keep them in their respective ecosystems. By producing targeted ads for consumers or preventing communication among different platforms, users are often inclined to continue using their services.  In recent years, ethical issues like censorship, data tracking, and data ownership have gained the attention of many Internet users. Ironically, user data seems to belong to companies in Web2 rather than the users themselves. We’ve seen cases of unfair data control, whereby users had their accounts closed after unknowingly violating platform-internal community guidelines. In the 2010s, news of Facebook’s failure to protect its users’ data set off global outrage over personal data collected without users’ consent.  To address these problems, some have put forth a solution combining the benefits of Web1 and Web2: decentralization and user participation. While it’s not concrete, the core concepts of this version of the Internet, known as Web3, have largely been defined. What is Web3? If we look at the current problems of Web2, Web3 is the next logical step to improving the Internet for users. By leveraging peer-to-peer (P2P) technologies like blockchain, virtual reality (VR), the Internet of Things (IoT), and open-source software, Web3 aims to dilute the power held by huge Web2 companies. With decentralization, users can hopefully take back control of their content and ownership of their data.  Key features of Web3 Decentralized: As it is meant to tackle the root of the Web2 problem, i.e., centralization, decentralization is naturally a critical factor to Web3’s success. Besides returning data control to users, companies would have to pay to access their data. Decentralization would make native crypto payments accessible to anyone, and eliminate the need for the expensive intermediaries in the traditional Web2 payment infrastructure. Permissionless: Instead of a few large entities controlling participation or prohibiting inter-platform communication, anyone can freely interact with others in Web3. Trustless: The network Web3 is based on would allow users to participate without trusting anything but the network itself.  These ideals will be supported largely by blockchain and crypto. Potential benefits of Web3 Increased data security Data held by tech giants in centralized databases are vulnerable, as hackers would need to access only one system to compromise user data. With decentralized solutions to store and manage data, private information can be more securely held. True data ownership With one of the focuses of Web3 being data ownership, users will be able to regain control of their data and even monetize it if they wish to do so. Control over the truth Without a central power, users will not be subjected to unfair censorship. Without the power of censorship or the ability to erase specific content, it will be significantly harder for large companies to control the narrative of any discourse. There are other potential benefits that make Web3 superior to its predecessors. Financial freedom Web3 will empower users by allowing them to consume, create, and own their content and data. And because Web3 is based on blockchain technology, users will be able to easily access ecosystems facilitating decentralized finance (DeFi) and other tools to achieve financial freedom.  Enhanced social interactions Like its predecessors, Web3 will continue to incorporate technologies that emerge after blockchain technology. For instance, virtual reality (VR), augmented reality (AR), and artificial intelligence (AI) could add digital elements to Web3 applications to enhance online social interactions. Already, we’re seeing one such example in the form of the metaverse, a virtual 3D universe users can explore using avatars. Through immersive spaces like the metaverse, users can socialize online, buy virtual land, play games, and even work remotely.   Closing thoughts Web2 versus Web3 can be thought of as a variation of the age-old centralized versus decentralized debate. Because Web3 has yet to materialize, its purported superiority to Web2 is up for debate. However, with its decentralized infrastructure, Web3 could potentially tackle the data-related scandals we’ve seen with Web2, and return control to users.
Binance Academy summarise year 2022 featuring The Merge, FTX and more

Altcoins: How Does BurgerCities (BURGER) Work? What Is It?

Binance Academy Binance Academy 12.10.2022 15:18
TL;DR BurgerCities is a one-stop MetaFi platform featuring a wide range of features, including its native token BURGER, a decentralized exchange (DEX), and non-fungible tokens (NFTs). Within the BurgerCities ecosystem, users can participate in daily activities, such as socializing and playing games, while exploring DeFi and NFT features.  The token BURGER can be used in liquidity provision, single-token mining, and in-game trading. Users can get BURGER by playing games in BurgerCities or purchasing it on cryptocurrency exchanges like Binance.   Introduction The Metaverse has made its mark within the crypto industry, having grown the cryptocurrency market significantly. Now, in 2022, it has become far more accessible, with more people believing it might be the future.  In light of this growth, numerous projects have considered ways to tap into the infrastructures needed to power virtual economies that function parallel to the real world. That’s where MetaFi comes in, which ultimately leads to BurgerCities’ consistent presence within the crypto world. Learn more on Binance.com What is BurgerCities?  While it sounds like a new burger chain, BurgerCities is a lot more interesting than that. Evolved from Burgerswap, a DeFi product that first came to existence on BNB Chain, it blends DeFi and NFT as part of its goal to create a uniform and standardized Web3 metaverse. In the BurgerCities world, users can participate in daily activities, such as socializing and playing games, in order to enjoy various DeFi and NFT features with their own online avatars. With this new ecosystem, BurgerCities is set to further drive dynamic metaverse development, bringing new vitality to Web3. The BurgerCities Ecosystem The BurgerCities Ecosystem is made up of various features such as:    The BURGER token: BurgerCities is powered by its native token, BURGER. It has a total supply of 63,000,000 tokens, which can be used in liquidity provision, single-token mining, and trading in-game items like Hero NFTs.    The Aggregator (Black Market): BurgerCities integrates an aggregation protocol that sources liquidity from various DEXs and CEXs, and is able to reroute users’ trades to ensure they’re getting the best price.   The Pool (Energy Plant): Users can earn benefits by providing liquidity in the Energy Plant. They can withdraw their rewards at any time.   The Bank (Central Bank): The Central Bank is BurgerCities’ single-coin dual-mining revenue aggregator, which can maximize users’ single-coin mining returns. Meanwhile, BurgerCities distributes the mining proceeds to users in the form of USDT.   The Hero (Dining Room): Heroes are unique NFT assets with a variety of uses, one of which is BurgerCities’ core gameplay. Users can level them up and use them to earn BURGER by completing in-game tasks. Heroes can also be sold in the Dining Room to earn rewards.   The Land and Building: The Land and Building is part of BurgerCities’ gameplay, allowing users to construct and maintain their own towns. Users can take a break in buildings after completing tasks, or rent them to other users or projects.   How does it work? To understand how BurgerCities functions, here are some of the key terms and protocols within BurgerCities you should know to help get you started. Swapper: Users who aim for the best price when swapping tokens can go to the Black Market in BurgerCities. The Black Market has aggregation protocols in place that source liquidity from various other exchanges, ensuring the best price across numerous DEXs.  Liquidity Provider: Liquidity provision in BurgerCities can be extremely profitable for investors. BurgerCities incentivizes liquidity providers using token rewards.  Staker: BurgerCities allows its users to earn yield by staking tokens in the Central Bank, which matches all staking assets with high-yield pools. In doing so, the rewards of single-token stacking are maximized, meaning that the more assets users have in the vault, the more rewards they will receive.  Gamer: BurgerCities merges gameplay and earning, essentially allowing users to not only earn rewards through gameplay but also enjoying various gaming options, from quests to land management.  Central NFT — Heroes: Heroes is one of BurgerCities’ unique NFT assets and a central part its gameplay. While gamers do not need Heroes to swap, stake, or provide liquidity in BurgerCities, they can use these assets to participate in quests, fight in PvP battles, and engage in professions.  Business Simulation: Gamers are given a metaverse scenario where they can build their businesses through in-game decision-making. In comparison to traditional economic simulation games, BurgerCities allows gamers to rent, upgrade, and trade NFT assets, all while providing them with the opportunity to receive rewards outside the game.  Tactical Combat: As outwitting opponents on a tactical level is a key component of battle outcomes, gamers must outsmart opponents by summoning strong Heroes and using combat tactics.. PvP and PvE: There are a variety of PvP and PvE gameplay options available in a battle when the BurgerCities’ PvP and PvE games begin.  Land Management: In addition to selling digital assets like NFTs , gamers can also earn money from owning and selling land within BurgerCities for various reasons. One such reason is advertising, as projects may be interested in placing advertisements on the properties on such land.   What is the BURGER token? The most important aspect of BurgerCities is its native token, BURGER, which is native to the BNB Chain. There is a total of 63,000,000 BURGER tokens. As a BEP-20 token standard, BURGER is incredibly useful in the BurgerSwap ecosystem, as it gives its holders voting rights on updates and proposals to the protocol. It can also be used for liquidity rewards, single-token mining, and in-game trading. Additionally, it is used to reward users for completing in-game activities. At the same time, the total BURGER supply is distributed across different utilities, with 50% allocated to incentives, 10% to the project’s team, 10% to strategic financing, 10% to project operation and liquidity management, and 20% to ecology development and future growth. How to Buy BURGER on Binance The biggest question on your mind right now is probably how you can purchase BURGER and become a part of BurgerCities. You can purchase BURGER right here on Binance in two ways:  You can use credit / debit cards with selected fiat currencies. First, head to Binance’s Buy Crypto with Debit/Credit Card page, then select the currency of your choice and choose BURGER in the bottom field. Finally, click [Continue] to confirm your purchase. You can also trade other cryptocurrencies, such as USDT, BUSD, BNB, and ETH, for BURGER. First, head to the Trading View on Binance, then type BURGER in the trading pair search field that displays all available trading pairs. For more information on the TradingView, read our How to Use TradingView on the Binance Website guide.     What’s next for BurgerCities The future of the Metaverse and by extension, BurgerCities, undoubtedly looks bright. A new version of BurgerCities will soon be released, providing users with new gameplay functions. Additionally, the Metaverse’s land and house landscape will be completely refined.    Closing thoughts As MetaFi continues to grow, BurgerCities will focus an innovative lens on MetaFi with its combination of earning and gaming. With BurgerCities, players will be able to game while accessing the crypto world in a new and exciting way.
The Witcher's Geralt Of Rivia Drops Into Fortnite!

Binance Academy: Metaverse - What Is It? Is There Only One?

Binance Academy Binance Academy 12.10.2022 14:50
TL;DR The metaverse is an online, immersive space that connects its users' digital and real-world lives. By incorporating technologies like augmented reality (AR), virtual reality (VR), and blockchain, the metaverse offers new digital ways to work, socialize, and relax.  Projects like Decentraland and SecondLive are already experimenting with play-to-earn games and other blockchain applications, enabling communities to gather around, work, and build toward common goals. In addition, tech giants are building their metaverses to keep up with the trend. While there can be many metaverses, they would all benefit if they could connect with each other. Blockchain technology offers a unique way to metaverse interoperability. This could potentially enable users to move cryptocurrencies, items, and other digital assets between the metaverses. Introduction The metaverse is one of the words people mention when considering the future of technology, cryptocurrencies, and the Internet. The metaverse is not fully here yet, but it's noticeable that small projects and global companies are striving to build the future of digital spaces. Read more on Binance.com What is the metaverse? The metaverse is a concept of connected, virtual universes that are explorable via 3D avatars. You can think of it as the next evolution of the Internet, with more immersive and interactive online experiences. The metaverse incorporates technologies such as augmented reality (AR), virtual reality (VR), and blockchain. While AR enables users to morph digital visual elements into the real world using a camera, VR produces computer-generated virtual environments that users explore through VR headsets. Meanwhile, blockchain technology enables properties of digital proof of ownership, digital collectibility, and transfer of value. NFT platforms like the  Binance NFT Marketplace are also contributing to the development of the gaming metaverse by providing the link between gaming projects and crypto communities. In addition, the community-driven BNB Smart Chain (BSC) hosts various metaverse projects. Also, Fortnite has developed a metaverse platform that has connected over 350 million players in its virtual world. Even though the metaverse is still under development, it will likely expand beyond gaming platforms. For example, applications in digital identity, remote working, and decentralized governance are just some potential sectors that could benefit from the metaverse. What can be done in the metaverse? The metaverse creates shared virtual spaces that combine the physical and digital. For example, businesses could start using the metaverse for hosting mixed reality meetings using VR headsets or signing contracts without being physically in the same place. Similarly, you could do groceries by interacting with virtual aisles, showcase your NFT collections to virtual buddies, and visit art exhibitions without leaving the cozy of your home. Play-to-earn games like Axie Infinity and work socialization tools like Gather.town already prove working aspects of the virtual worlds possible. They invite users to have fun, meet people, transact using digital currencies, and even earn a living. Decentraland, on the other hand, is an online, digital world that successfully mixes social elements with cryptocurrencies and NFTs, representing anything from cosmetic collectibles to virtual real estate. For example, a player can use Decentraland's native cryptocurrency, MANA, to purchase 16x16 meter land parcels that are issued as NFTs (non-fungible tokens) on the Ethereum blockchain. Finally, the metaverse enables human collectives to gather around shared interests. For example, Fortnite famously hosted Travis Scott's virtual Astronomical concert with over 12 million listeners worldwide. In contrast to a regular concert, gamers could interact with the famous rapper with their avatars and enjoy animated, 3D visuals. Is there just one metaverse? The metaverse concept suggests that there is one common and shared virtual ground that everybody shares. But, as we have seen, there can be various metaverses that are separate from each other. Therefore each metaverse has a specific function in the collective of metaverses. In the same way, as each social media platform provides specific services to its users, metaverses offer distinct virtual possibilities. Likewise to earlier examples, one metaverse could concentrate on gaming while others on meetups or concerts. Crypto metaverse projects like Axie Infinity, Decentraland, and SecondLive each have their unique approach to building metaverse. In addition to blockchain-based metaverses, big tech is moving forward with the metaverse narrative. For example, Facebook changed its name to Meta and invested billions of dollars in developing metaverse content, software, and AR and VR headsets. Likewise, big companies like Microsoft, Google, and Tencent are building metaverse and are entering the space by developing new technologies. Ideally, the various metaverses should become interoperable. Metaverse interoperability means one or more metaverses could easily interact and exchange data. Interoperable metaverses would allow users to move assets from one metaverse to another, including NFTs and cryptocurrencies. Many developers and protocols are betting on blockchain technology to connect metaverses. Firstly, it’s decentralized and transparent. And secondly, it can offer digital proof of ownership, authenticity, transfer of value, and accessibility. For example, if two play-to-earn games were interoperable and built on the same blockchain, players could switch between them, and their virtual items could be established and secured in both games. In other words, users could use their guns, skins, and other in-game items in both virtual worlds. There is also the possibility of using blockchain bridges to move cryptocurrencies and other digital assets across different blockchain networks. The future web of metaverses The metaverse is still in the early phases of its development. No one knows how it will play out, but it's undoubtedly a technology sector that attracts capital and developers' attention. As mentioned, the metaverse will probably consist of several individual metaverses. Nevertheless, technologies like blockchain and cryptocurrencies will likely play a central role in connecting multiple virtual worlds. In the long run, we may see various metaverses with different purposes becoming part of a single metaverse. Creating a web of different metaverses could also encourage further adoption. Closing thoughts The metaverse continues to grow as new projects come to the market and the existing ones develop new functionalities and services. The crypto space already has successful metaverse projects, including blockchain-native ones like Decentraland, as well as players from the traditional markets like Fortnite and Meta. With the advancement of AR, VR, blockchain, and other technologies, we will likely see exciting new virtual, borderless metaverses rising.
Age Is The Dominant Factor In Cryptocurrency Investing

Binance Academy: Ethereum Merge - Important Facts, Pros And Cons

Binance Academy Binance Academy 12.10.2022 14:42
TL;DR Ethereum’s Merge is part of a transition Ethereum from a Proof of Work blockchain to a Proof of Stake. In general, Proof of Stake offers numerous benefits to scalability and sustainability.  As Ethereum moves to its new sharded structure, the original mainnet’s state will be transferred. This means that ETH holders won’t need to do anything with their coins and should be wary of scammers telling them they need to “transfer” their tokens.    Introduction Ethereum’s long-anticipated move to a Proof of Stake consensus mechanism has, for many HODLers, raised an important question: What do I need to do with my ETH? The question is a good one, as the safety of your funds can be at risk if you don’t fully understand the situation. First, let’s look at the reasons behind Ethereum’s move to Proof of Stake (PoS). Read more on Binance.com  What is Ethereum’s move to Proof of Stake? Since Ethereum’s (ETH) creation, it’s used the same system as Bitcoin (BTC) to generate consensus on new blocks of transactions: Proof of Work (PoW). This consensus mechanism allows miners to reach an agreement without a central authority, even in the face of malicious actors working against them.  Proof of Work, as implemented by Satoshi Nakamoto in the Bitcoin network, created an effective, reliable method for achieving consensus on decentralized networks. To this day, the Bitcoin network still hasn’t been successfully attacked. However, PoW has fallen out of favor with some developers and users. It is often seen as: Energy inefficient. PoW disincentivizes bad actors making large-scale attacks by making it costly in terms of energy. While this is one way of securing the network, staking is now seen as a more sustainable alternative. Inefficient for smart contracts. Using smart contracts can require a large number of network interactions. These have to be added to a block and confirmed to the network. PoW often experiences longer block times and higher transaction fees, making interacting with smart contracts often slower and more expensive. Difficult to independently mine. Becoming a miner on a popular PoW system can be challenging for an individual as the mining landscape is often dominated by a few large mining pools. This may lead to a centralization of mining power, making it hard for individual miners or smaller pools to compete. Difficult to scale. As the network becomes more popular, the number of pending transactions increases. PoW networks will have a limited block size that can only include so many transactions. Periods of high traffic can leave users waiting for hours and even days for their transaction to be added to a block and processed. With Ethereum 2.0, the network will move to PoS and remove the need for mining coins. The goal is to improve Ethereum’s scalability, as well as create additional benefits for users.   Why Proof of Stake? Proof of Stake has proven to be the most popular choice for new blockchain networks. It has several discernible advantages and leads the way in accessibility and scalability. Its drawbacks, while there are a few, are in most eyes minimal compared to the benefits gained.     Benefits Drawbacks An average PoS network user can take part in the validation process with just the network’s native token. Power can still be centralized around large token holders.  Less energy intensive.  Damages a profitable mining industry. Quicker transaction times and finalization. To some critics, PoS is less secure than using cryptographic puzzles to generate consensus.   The road to PoS Ethereum  Moving to PoS can’t be done in one go. Over a few years, Ethereum began a transition to move to its new sharded structure successfully. The journey can be split into a series of phases. Note that the Phase structure is no longer officially used by Ethereum, but is often referred to in this way by other media outlets. The Beacon Chain launch (Phase 0) Phase 0 will see the launch of Ethereum’s Beacon Chain, a PoS blockchain that will manage all Ethereum shards. More specifically, it will organize validators and the staking process, create validator committees, manage consensus generation, and run other key operations. Introduction of sharding (Phase 1) Phase 1 will take the single Ethereum blockchain and split it into 64 sharded blockchains. These blockchains will then be managed by the Beacon Chain launched in Phase 0. However, over time, Ethereum has instead concentrated on the Merge, which now will happen before sharding implementation. The Merge (Phase 1.5) Phase 1.5, also known as The Merge, will bridge the state of the Ethereum mainnet to the new Proof of Stake system. Smart contracts from the old Ethereum mainnet will be available on the new Ethereum network, and the Beacon Chain will be the official organizer of block production. Phase 2 Phase 2 will let shards create new transactions and smart contracts, meaning they’re fully functional. Phase 2 is the last phase with a predefined plan, as Phase 3 will be used to iron out any issues occurring from the launch of Ethereum 2.0   What will happen to my ETH? In short, your funds will be safe, and you won’t need to do anything. The complete Ethereum state will be transferred over to Ethereum 2.0. If you’re holding BETH because you’ve locked ETH in Binance’s Ethereum 2.0 staking product, you’ll soon be able to redeem it for ETH after the Merge. Vitalik has mentioned that the unlocking will take place roughly six months after the Merge. BETH is a wrapped token pegged 1:1 with ETH, distributed to users who locked their ETH with Binance. This gave stakers a liquid, ETH-like asset to use while their funds were locked. For users who wish to, they will be able to swap their BETH back to ETH.   Expectations from users and the community For many, Ethereum’s move to PoS has been eagerly anticipated. With almost every new blockchain now using PoS, there has been immense pressure on Ethereum to catch up. The network is also free from its previous limitations with the benefits of its new consensus mechanism. As PoS is more environmentally friendly, Ethereum will also remove the stigma associated with its previous energy usage. Overall, this may help improve the image of the blockchain world in general.     Closing thoughts The key message to take away from The Merge for HODLers is that you don’t need to do anything with your ETH holdings. So, be wary of anyone telling you that you need to “transfer” or “bridge” your ETH to the new network. Aside from this important fact, Ethereum’s move to Proof of Stake looks to have various benefits for users.
Mantra (OM). Introduction, OMniverse, OM Token, Mantra DAO And Mantra Chain

Mantra (OM). Introduction, OMniverse, OM Token, Mantra DAO And Mantra Chain

Binance Academy Binance Academy 31.08.2022 17:35
TL;DR MANTRA is a vertically-integrated blockchain ecosystem. The MANTRA OMniverse encompasses the DAO; MANTRA Nodes: a blockchain infrastructure-as-a-service business; MANTRA Chain: a protocol for various assets for the Cosmos ecosystem; and MANTRA Finance: a DeFi platform that brings the speed and transparency of DeFi to the world of TradFi.   Introduction Launched in 2020, MANTRA is a vertically-integrated blockchain ecosystem. Previously known as MANTRA DAO, the ecosystem carries a reputation for an open and honest approach to crypto trading, fund-building, and innovation, all part of its goal to make crypto-pioneering personal, safe and secure.   What is the OMniverse? With MANTRA’s rebrand also came the restructuring of MANTRA into the all-encompassing MANTRA ecosystem, otherwise known as the OMniverse. The OMniverse is made up of four stacks that comprise the wide variety of products and services MANTRA offers to both retail and institutional investors. The four stacks are MANTRA Nodes, MANTRA Chain, MANTRA Finance and MANTRA DAO, with each comprising a range of innovative products within MANTRA’s ecosystem.  MANTRA Nodes MANTRA Nodes is the cornerstone of the vertically integrated stack that is the foundation for the OMniverse. The primary function of the node operations is to generate revenue for the business and grow Sherpa community holdings by providing more yield-earning opportunities across multiple blockchains. Additionally, these validator nodes support MANTRA in building a presence on new and emerging blockchain networks and growing it into a larger institutional space as an ecosystem. It also opens up opportunities to expand MANTRA’s multi-chain DeFi ecosystem. MANTRA also offers Infrastructure as a Service (IaaS), meaning it can set up validator node operations for both institutions and individuals. The MANTRA Nodes service line also includes node management, retail staking (both on- and off-chain), institutional nodes, and cloud / white-label node development and deployment. MANTRA Chain MANTRA Chain is the protocol for the Cosmos ecosystem. It is interoperable with other blockchains in Cosmos with the IBC module, providing developer tools and an opportunity to build anything from games and web3 applications to secure and decentralized exchanges (DEXs). The network is also EVM-compatible, combining the flexibility and reliability of both the Cosmos and Ethereum ecosystems in a builder-friendly environment.  MANTRA Chain also utilizes a powerful decentralized identify (DID) module for all KYC & AML needs. The module facilitates the development of the products that utilize enhanced features and ecosystems. MANTRA Finance MANTRA Finance aims to be a platform that brings the speed and transparency of DeFi to the established yet opaque TradFi world. The platform will allow for users around the world to trade, issue, and earn from digital assets in a non-custodial and permissionless way. MANTRA DAO Since its inception, MANTRA has always focused on involving its community at every stage, and the transparent governance mechanism is the core that brings the people together. To reach a wider community outside of the OMniverse and Sherpas, M DAO strives to bring this narrative and structure to other projects and their many protocols. The stack offers DAO services that securely increase the efficiency of various DAOs’ business functions, from finance to HR management. For example, some DAO solutions include treasury management, DAO issuance and launchpads, and DAO governance and grants, as well as DAO staking and DeFi. Some successful DAO partnerships include HeliSwap, the first DEX & DAO on the Hedera network and ZENSTAR, the first substrate based money-market built on the Astar network on Polkadot. The OM Token $OM is the native token of the OMniverse and has various utility including:Governance: $OM stakers can issue proposals, participate in governance votes, and suggest developments in various products across the OMniverse.Staking: $OM can be staked directly on MANTRA’s web app or on Binance for passive yield earning.DAO Token Access/ Airdrop Incentives: $OM stakers get special access to new DAO token issuances as well as partnering DAO token airdrops. Now that you’re familiar with the essential stacks that make up MANTRA as an ecosystem, let’s look at how you can buy MANTRA’s tokens, $OM, on Binance.  How to buy $OM on Binance   1. Log in to your Binance account and go to [Trade] -> [Spot]. 2. Type “OM” in the search bar to view the available trading pairs. We will use OM/BUSD as an example. 3. Go to the [Spot] box and enter the amount of $OM you want to buy. In this example, we will use a market order. Click [Buy OM] to confirm your order, and the purchased $OM will be credited to your Spot Wallet. How to stake $OM on Binance? 1. Log in to your Binance account and go to [Earn] -> [Binance Earn]. 2. Type “OM” in the search bar to view the available staking period (30, 60 or 90 days) and click [Stake Now]. 4. Enter the amount of OM you would like to stake and click [confirm]. Closing thoughts While MANTRA aims to create a secure, safe, and personal ecosystem for its users, it’s always important to remember that the crypto industry is not free of risks. Familiarizing yourself with MANTRA’s infrastructure will help you understand the services provided within the OMniverse.   Source: What Is MANTRA (OM)?
What Is BitTorrent (BTTC)? Speed, File System, Rewards. How Does BitTorrent Work?

What Is BitTorrent (BTTC)? Speed, File System, Rewards. How Does BitTorrent Work?

Binance Academy Binance Academy 29.08.2022 10:33
TL;DR BitTorrent is one of the largest decentralized peer-to-peer (P2P) file-sharing platforms. It’s powered by the Tron blockchain and BTTC, a TRC-10 utility token. BTTC is used to incentivize users on the network to provide their local computer resources for fast download speed and secure decentralized storage. The BitTorrent ecosystem also features a community-based live streaming platform, where content creators and viewers can earn and stake BTTC rewards.   Introduction In the 2000s, a common way to download music and movies over the Internet for free was using peer-to-peer (P2P) platforms like BitTorrent. Despite its popularity, one of the biggest challenges for users was the long hours it took to find and download their desired content, as most users weren’t incentivized to continue sharing files to the network once they received their content.    What is BitTorrent?  BitTorrent is one of the largest and longest-standing P2P platforms for data and file sharing. Initially released in 2001 when the Internet was just starting to catch on, BitTorrent revolutionized the way users download and obtain entertainment media and other large files and data.  Later in 2018, BitTorrent was acquired by the Tron Foundation. It relaunched as a decentralized P2P platform on the Tron blockchain, featuring various new tools and integrated a TRC-10 token, BitTorrent (BTTC), to incentivize its network participants.   How does BitTorrent work? The original BitTorrent platform was founded by Bram Cohen and David Harrison to facilitate the interchange of entertainment media, such as movies and music, among Internet users. BitTorrent does not store content on a single server. Instead, the files and data are distributed and hosted across their users’ computers. When a user downloads a file, they will receive pieces of that file (the torrent) from multiple providers within the network, after which they can remain connected to the BitTorrent network and “seed” the file to other users. Within the BitTorrent network, anyone with the complete file can become a seeder. The more seeders support a file, the quicker the download speed. However, there was little incentive for users to remain connected to the network after downloading a file. To enhance the file transferring speed, BitTorrent launched an upgraded version of the BitTorrent protocol that adopts the native cryptocurrency BTTC.   BitTorrent Speed Powered by blockchain technology, BitTorrent Speed enables faster download speed through an incentive system. To request a file, users (“service requestors”) need to submit a bid to specify how many BTTC tokens they are willing to offer to those seeding the file. Once the other parties (“service providers”) accept their bid, the service requestor needs to transfer the agreed-upon BTTC amount into escrow in a payment channel on the Tron blockchain. The BTTC will be credited to the providers after the file is transferred, and the transaction will be logged on the Tron blockchain. BitTorrent Speed uses BTTC to incentivize users to continue seeding files, which can significantly increase the file-sharing efficiency and accelerate the download speed. With more readily-available files on the P2P network, this could also benefit users that are still using the free BitTorrent client to download files from their peers.    BitTorrent File System (BTFS) Beyond file sharing, BitTorrent also features a decentralized P2P file storage system called the BitTorrent File System (BTFS). BTFS aims to offer a scalable, censorship-proof, and cost-effective alternative to the traditional centralized cloud storage.  The BTFS network consists of millions of BTFS nodes called renters and hosts. Renters are users who rent storage on the network and hosts are those that share their idle disk space for BTTC rewards. When renters use the BTFS service, their files will be sharded and distributed to multiple reputable hosts on the network. Through advanced encoding methods and file repairing technologies, BTFS can guarantee the confidentiality and security of the files, and users can access them conveniently without interruptions.   DLive In 2020, BitTorrent acquired DLive, a community-based blockchain live streaming platform, to offer more decentralized services in the BitTorrent ecosystem. In contrast to traditional platforms, both creators and viewers are rewarded for their contributions to the platform. Users who watch, chat, gift, and share content can also earn BTTC rewards. In addition, the BTTC can be staked to earn more rewards and to unlock premium services on DLive.   What is BTTC? BTTC is a TRC-10 utility token of the BitTorrent ecosystem, with a total supply of 990 billion. It was launched to build a token-based economy for networking, sharing bandwidth, and storage resources on the BitTorrent network.  BTTC can be used as payment for P2P services on the network, including paying for decentralized storage space, bidding for file downloading bandwidth, rewarding those who provide these services, and more. BitTorrent plans to utilize BTTC beyond the current use cases, such as crowdfunding the creation of new content, purchasing downloadable assets directly from creators, and tipping live streaming content creators with BTTC gifts on DLive.   How to buy BTTC on Binance? You can buy the BitTorrent Chain token (BTTC) on cryptocurrency exchanges like Binance.  1. Log in to your Binance account and click [Trade] - [Spot]. 2. Search “BTTC” to see the available trading pairs. We’ll use BTTC/BUSD as an example. 3. Go to the [Spot] box and enter the amount of BTTC to buy. In this example, we will use a Market Order. Click [Buy BTTC] and the purchased tokens will be credited to your Spot Wallet. Closing thoughts BitTorrent is a unique project that uses blockchain technology and cryptocurrency to revolutionize its existing peer-to-peer file sharing platform. It offers a more decentralized, efficient, and cost-saving alternative to the traditional P2P file-sharing platform. In the future, the BitTorrent team is looking to add more use cases to the BTTC token and support more DApp functionalities, which could be an enticing tool for developers looking to launch their own DApps with file sharing and storing capabilities.    Source: What Is BitTorrent (BTTC)?
There Are Many Ways To Join A Crypto Community

Crypto: Livepeer. Video Protocol Built On Ethereum Blockchain. Is It Worth It?

Binance Academy Binance Academy 17.08.2022 13:50
TL;DR   Livepeer is a decentralized video protocol built on the Ethereum blockchain. It was designed for anyone to seamlessly integrate video content into applications in a decentralized manner and at a fraction of the cost of traditional solutions. Decentralization of video processing is accomplished by distributing the transcoding process to a network of node operators. Transcoding is an essential step in ensuring smooth delivery of video content to end users. It involves taking raw video files and converting them to the optimal state for each end user, based on factors such as device screen size or internet connection. Livepeer processes video content reliably and inexpensively using blockchain technology that utilizes game theory, cryptoeconomic incentives, and smart contracts to foster positive stakeholder interactions. Its native asset, the Livepeer token (LPT), is used to coordinate and distribute video processing tasks among network participants securely and reliably.    Introduction   With the increasing reliance on social media, especially amid the recent pandemic, as well as the massive growth of the creator economy, video-related content used more than 82% of the internet’s bandwidth in 2021.  The Livepeer network, powered by thousands of distributed nodes, gives video app developers and creators access to a secure, high-quality, affordable encoding architecture without a hefty price tag. Since its inception in 2017, the Livepeer network has processed over 150 million minutes of video.   How does Livepeer work?   Livepeer, built on Ethereum, is essentially a network that connects anyone seeking video processing with suppliers that provide this service. It uses its native token, LPT, to incentivize network participants to keep this video transcoding process reliable, secure, and affordable compared to current centralized solutions. There are two main stakeholders in the Livepeer network: orchestrators and delegators.  Orchestrators Anyone who owns video mining equipment can stake their LPT and perform video processing work on the Livepeer network. In exchange for providing this service, they receive a share of the video processing fee in the form of LPT and ETH. These network participants are called orchestrators.  Delegators Those who don’t have access to video mining tools or video processing experience can still participate in the network by delegating or assigning their LPT to a node operator with the right tools and expertise to process video via the Livepeer Explorer. These network participants are called delegators.   What is LPT? The network’s native asset, the Livepeer token (LPT), is an ERC-20 token used to provide security, distribute video processing tasks among network participants, and incentivize their active participation in the various roles on the Livepeer network. The more LPT tokens are committed to the network’s functioning, the more stable, secure, and robust it becomes.   Orchestrators are allocated work according to the amount of LPT they have staked — their own or those of delegators — along with their geographical location and reliability. Since more delegated tokens lead to more work, and more work equals more rewards, orchestrators compete to attract as many delegators as possible. At the end of each round, i.e. end of every day, the Livepeer protocol mints new Livepeer tokens according to a designated inflation rate. Livepeer is a “stake-based” protocol, which means rewards are allocated to each participating user in proportion to their contribution. Participants who have been active in a given round — either by running nodes or by staking tokens — receive a proportionate amount of the issued reward. Those who did not actively participate in a given round do not receive these rewards.  Orchestrators also earn an added benefit: they receive a portion of their delegators’ rewards as a commission for running the decentralized infrastructure.  With this system, active participants can grow their stake in the network. Meanwhile, transcoding rights of inactive users shrink with every round in which they do not participate. In other words, a larger LPT stake results in more allocated work, ultimately leading to more rewards.  The inflation rate used to determine the size of the issued rewards also motivates users to be active. The percentage of new LPT in each compensation round is determined by how many total LPT are committed to the network’s successful functioning. The higher this proportion, the lower the inflation rate and the more value existing tokens will retain. Thus, token holders are naturally motivated to stake more to earn more.   How to buy LPT on Binance?   You can buy LPT on cryptocurrency exchanges like Binance.  1. Log in to your Binance account and go to [Trade] -> [Spot].  2. Type “LPT” on the search bar to see the available trading pairs. We will use LPT/BUSD as an example. 3. Go to the [Spot] box and enter the amount of LPT you want to buy. In this example, we will use a Market order. Click [Buy LPT] to confirm your order, and the purchased LPT will be credited to your Spot Wallet. Closing thoughts Livepeer has designed a solution to delegate video processing tasks to reliable parties. With a  decentralized video protocol, Web3 projects and companies can avoid high, arbitrary video processing fees and censorship to provide better video content for their audiences.   Source: What Is Livepeer (LPT)?
UK PMIs Signal Economic Deceleration, Pound Edges Lower

Soulbound Token (SBT) : An Online Soul. How Can You Use It?

Binance Academy Binance Academy 17.08.2022 09:50
TL;DR Soulbound Tokens (SBTs) are digital identity tokens that represent the traits, features, and achievements that make up a person or entity. SBTs are issued by “Souls,” which represent blockchain accounts or wallets, and cannot be transferred.  Introduction Soulbound Tokens (SBT) is a concept proposed in May 2022 by Ethereum cofounder Vitalik Buterin, lawyer Puja Ohlhaver, and E. Glen Weyl, an economist and social technologist. The whitepaper, entitled “Decentralized Society: Finding Web3’s Soul,” lays out the foundation of a fully-decentralized society (DeSoc) governed by its users and how Soulbound tokens (SBTs) can function as the credentials we use in everyday life.  What are SBTs? Soulbound tokens (SBTs) are non-transferable tokens representing a person’s identity using blockchain technology. This could include medical records, work history, and any type of information that makes up a person or entity. The wallets that hold or issue these records are called “Souls.” People could have multiple wallets (or Souls) representing different parts of their lives. For example, someone could have a “Credentials Soul” for their work history and a “Medical Soul” for their health records. Souls and SBTs would allow people to build a verifiable, digital Web3 reputation based on their past actions and experiences. On the other hand, Souls can represent an entity that allocates SBTs. For example, companies can be Souls, issuing SBTs to each employee. A digital country club could issue SBTs to verify membership status. The logic behind soulbound originates from the popular online game World of Warcraft.  Players cannot sell or transfer soulbound items. Once picked up, soulbound items are forever “bound” to the player’s “soul.” Now, imagine this idea but applied to non-fungible tokens (NFTs). Today, most NFTs are ownership certificates for digital art or collectibles, such as Bored Ape Yacht Club. People will buy, trade, or show off NFTs as a symbol of status and wealth. SBTs aim to turn the NFT concept into something beyond money and bragging rights, a token that is both one-of-a-kind and non-transferable. While NFTs represent assets and property, an SBT represents a person or entity’s reputation. And unlike an NFT, SBTs hold zero monetary value and cannot be traded once issued to someone’s wallet.  How can SBTs be used? SBTs have a wide range of potential use cases. Here are some examples that could potentially find use in everyday life. 1. Education history – When people graduate from university, they receive a certificate proving completion of the required courses. The university could be a Soul issuing the SBTs, and the students would be Souls on the receiving end. The SBT would store the student’s credentials, proving they hold the relevant qualifications and are a member of the university. Simply put, the SBT would function as proof of attendance. 2. Job applications – In theory, job applicants could submit all their prior work history and professional certificates using official SBTs issued by previous companies and institutions. The SBTs would function as proof of skill certificates. 3. Health records – Switching doctors or healthcare providers could be accelerated using an SBT that holds a person’s medical records. Hypothetically, the SBT would replace the often slow process of filling out paperwork, verifying your medical history, and going back and forth with someone on the phone. How do SBTs work in Web3? Trust is one of the main challenges affecting the Web3 industry. How can you trust a person’s reputation in a system designed to be trustless? Let’s use lending money as an example. Similar to traditional bank credit scores, SBTs could track a user’s DeFi borrowing history as well as other metrics that determine their risk profile. SBTs are also a proposed alternative for decentralized autonomous organization (DAO) voting. Instead of the current governance model, which is based on how many tokens a member holds, DAOs could issue SBTs that assign voting power based on users’ interactions with the community. This model would prioritize voting power for the most dedicated users with a strong reputation. Besides creating a reputation-based voting system, SBTs may potentially improve the integrity of DAO voting — namely, defending against Sybil attacks — one of the biggest threats to the current DAO governance model. During a Sybil attack, an individual or a group of bad actors overthrow a DAO by purchasing the majority of governance tokens. Those with majority voting power can manipulate voting proposals and steer the project’s direction in their favor. The public and verifiable nature of SBTs could help detect and prevent bad actors from entering the DAO and, in turn, deter corruption and Sybil attacks from occurring.  What are examples of SBTs in action? As of August 2022, SBTs only exist on paper. Glen Weyl, one of the co-authors who contributed to the original SBT whitepaper, believes there will be early SBT use cases by the end of 2022. Binance also recently announced its own SBT called Binance Account Bound (BAB). The BAB token is non-transferable, has no monetary value, and is the first-ever SBT issued on the BNB Chain. BAB aims to tackle identity verification issues in Web3, serving as a digital verification tool for Binance users who have completed KYC. In addition to the Binance ecosystem, third-party protocols will be able to use BAB tokens to airdrop NFTs, prevent bot activity, and facilitate DAO governance voting, among other use cases. Closing thoughts SBTs have become a hot topic in Web3. In theory, SBTs could allow people to establish their own digital reputation and assess someone else’s on the blockchain. It remains to be seen if an SBT can function as Web3’s version of the “identity card.”   Source: What Are Soulbound Tokens (SBT)?
The Greeks Help Options Traders Make More Informed Decisions About Their Positions

Lisk (LSK): Introduction And Potential. How Does Lisk Work?

Binance Academy Binance Academy 16.08.2022 15:30
TL;DR Lisk is an open-source blockchain application platform that improves Web3 accessibility for developers and users. It offers a simple-to-use software development kit (SDK) that enables developers to build blockchain applications using JavaScript, one of the most widely used programming languages. Lisk is designed to eventually allow developers to deploy sidechains onto their network, so that their blockchain applications can scale while staying connected to the wider Lisk ecosystem.   Introduction One of the major challenges blockchain technology faces in the Web3 era is the lack of accessibility. Different blockchains use a variety of programming languages, which makes it difficult for developers to build applications that can be flexibly used across multiple platforms. What is Lisk? Lisk is an open-source, layer-1 blockchain application platform that aims to help projects onboard users into the crypto and Web3 space. Through its easy-to-use SDK, developers can build scalable blockchain applications easily. The metaverse projects, DAOs, NFT marketplaces, and many other applications they create can also offer faster transaction speed at lower fees for users.   How does Lisk work? Lisk was founded in 2016 by Max Kordek and Oliver Beddows. It focuses on improving Web3 accessibility for developers and users. Some of Lisk’s main features include:  Delegated Proof of Stake (DPoS) Lisk uses the Delegated Proof of Stake (DPoS) consensus algorithm to secure the blockchain. DPoS is considered a more efficient and democratic version of the popular Proof of Stake (PoS) mechanism. It allows validators to outsource the block validation through a voting system. On the Lisk blockchain, voters can use their LSK tokens to vote for a maximum of 10 delegators to secure the network on their behalf and share the LSK rewards among them. Generally, a delegator with more votes is more likely to be selected to generate the subsequent blocks. Since the process is distributed among 100+ delegated validators, Lisk can operate in a fairly decentralized manner. It also enables the network to achieve scalability and increase its transactions per second (TPS) rate.  The Lisk SDK A unique feature of Lisk is its software development kit based on JavaScript, one of the world’s most widely-used programming languages. Popular blockchain networks often rely on different languages. For example, Bitcoin (BTC) uses C++, while Ethereum is built on Solidity. Unless they have a strong command of several languages, it can be challenging for developers to interact with different blockchains.  Lisk’s solution to this is an open-source and modular SDK on JavaScript to make blockchain and Web3 universally accessible to a broader range of developers. Using a very common programming language removes the hurdle for those new to building blockchain applications. Newcomers can start building using JavaScript and TypeScript immediately, without having to invest time and effort in learning blockchain-specific languages.  Furthermore, after the launch of the prospective Lisk Platform, developers will be able to leverage the Lisk SDK to implement their applications on sidechains instead of smart contracts. The sidechains’ interoperability will enhance scaling and keep transaction fees minimal. The Lisk SDK is also expected to support the development of NFTs, P2P, and Proof-of-Authority (PoA) modules. Scalable sidechains To facilitate interoperability between all application-specific blockchains in the network, Lisk is building the Lisk Platform, which is designed to allow developers to build scalable applications with greater autonomy and flexibility on sidechains. Sidechains are separate blockchains that connect to the main chain. On Lisk, developers will be able to deploy their own sidechains to scale their blockchain applications and offer lower transaction fees and greater TPS. Sidechains will communicate with one another directly through cross-chain messages. This interoperability is expected to ensure smooth asset exchange between sidechains and the main Lisk blockchain.  The Lisk team is working on expanding its ecosystem by facilitating interoperability with other layer-1 blockchains and protocols, such as Ethereum (ETH), Polkadot (DOT), and Cosmos (ATOM). The vision is for users to benefit from a growing ecosystem of apps interconnected through Lisk bridges.   What is LSK? Lisk (LSK) is the native cryptocurrency and utility token of Lisk. It is used to pay transaction fees and reward delegators on the network. LSK holders can also use the token to secure the Lisk network through DPoS. They can stake their LSK tokens in the Lisk Desktop wallet to vote or delegate, and the tokens will be locked for as long as the user is performing either of these roles.  LSK’s utility is expected to grow, with more use cases emerging as the Lisk network achieves interoperability with other blockchains. For example, LSK could be used for registering blockchain applications or transferring messages between different applications.    How to buy LSK on Binance? You can buy the Lisk token (LSK) on cryptocurrency exchanges like Binance.  1. Log in to your Binance account and click [Trade] - [Spot]. 2. Search “LSK” to see the available trading pairs. We’ll use LSK/BUSD as an example. 3. Go to the [Spot] box and enter the amount of LSK to buy. In this example, we will use a Market Order. Click [Buy LSK] and the purchased tokens will be credited to your Spot Wallet. Closing thoughts Many believe that one of the key components to achieving the mass adoption of Web3 is to make blockchain technology more widely accessible. With projects like Lisk, more developers can build blockchain applications easily using coding languages they’re already familiar with. At the same time, users can benefit from a growing ecosystem of interconnected applications with faster transactions at lower fees. Source: What Is Lisk (LSK)?
Crypto: How To Estimate A Risk And Take A Profit?

Crypto: How To Estimate A Risk And Take A Profit?

Binance Academy Binance Academy 12.08.2022 09:20
TL;DR Stop-loss and take-profit levels are two fundamental concepts that many traders rely on to determine their trade exit strategies depending on how much risk they are willing to take. These thresholds are used in both traditional and crypto markets, and are especially popular among traders whose preferred approach is technical analysis. Introduction Timing the market is a strategy where investors and traders try to predict future market prices and find an optimal price level to buy or sell assets. Under this approach, figuring out when to exit the market is vital. That’s where stop-loss and take-profit levels come into play.  Stop-loss and take-profit levels are price targets that traders set for themselves in advance. Often used as part of a disciplined trader’s exit strategy, these predetermined levels are designed to keep emotional trading to a minimum and are essential to risk management.   Stop-loss and take-profit levels A stop-loss (SL) level is the predetermined price of an asset, set below the current price, at which the position gets closed in order to limit an investor’s loss on this position. Conversely, a take-profit (TP) level is a preset price at which traders close a profitable position. Instead of using market orders in real-time, traders can set these levels to trigger automatic selling without having to monitor the markets 24/7. Binance Futures, for example, has a Stop Order function that combines stop-loss and take-profit orders. The system decides if an order is stop-loss or take-profit based on trigger price levels and last price or mark price when the order is placed.  Why use stop-loss and take-profit levels? Exercise risk management SL and TP levels reflect the market’s current dynamics, and those who know how to properly identify their optimal values are essentially identifying favorable trading opportunities and acceptable levels of risk. Evaluating risk using SL and TP levels can play a crucial role in preserving and growing your portfolio. Not only are you systematically protecting your holdings by prioritizing less risky trades, but you are also preventing your portfolio from being wiped out completely. Therefore, many traders use SL and TP levels in their risk management strategies. Prevent emotional trading One’s emotional state at any given moment can heavily affect decision-making, and this is why some traders rely on a preset strategy to avoid trading under stress, fear, greed, or other powerful emotions. Learning to identify when to close a position can help you avoid trading on impulse, allowing you to manage your trades strategically rather than whimsically.   Calculate risk-to-reward ratio Stop-loss and take-profit levels are used to calculate a trade’s risk-to-reward ratio. Risk-to-reward is the measure of risk taken in exchange for potential rewards. Generally, it is better to enter trades that have a lower risk-to-reward ratio as it means that your potential profits outweigh potential risks.  You can calculate risk-to-reward ratio with this formula: Risk-to-reward ratio = (Entry price - Stop-loss price) / (Take-profit price - entry price) How to calculate stop-loss and take-profit levels There are various methods that traders can utilize to determine optimal stop-loss and take-profit levels. These approaches may be used independently or in combination with other methods, but the end goal is still the same: to use existing data to make more informed decisions about when to close a position. Support and resistance levels Support and resistance are core concepts familiar to any technical trader in both traditional and crypto markets.  Support and resistance levels are areas on a price chart that are more likely to experience increased trading activity, be it buying or selling. At support levels, downtrends are expected to pause due to increased levels of buying activity. At resistance levels, uptrends are expected to pause due to increased levels of selling activity. Traders who use this method typically set their take-profit level just above the support level and stop-loss level right below the resistance level they have identified. Here’s a detailed explanation of The Basics of Support and Resistance. Moving Averages This technical indicator filters market noise and smooths price action data out to present the direction of a trend.  Moving averages (MA) can be calculated over a shorter or longer period, depending on individual traders’ preferences. Traders monitor moving averages closely, looking out for opportunities to sell or buy presented in crossover signals, where two different MAs cross on a chart. You can read about Moving Averages in detail. Typically, traders using MA identify stop-loss levels below a longer-term moving average.  Percentage method Instead of a pre-specified level calculated using technical indicators, some traders use a fixed percentage to determine SL and TP levels. For instance, they may choose to close their position once an asset’s price is 5% above or below the price they entered. This is a straightforward approach that works well  for traders who are not very familiar with technical indicators. Other indicators We’ve mentioned a few common TA tools used to establish SL and TP levels, but traders use many other indicators. This includes Relative Strength Index (RSI), which is a momentum indicator that signals if an asset is overbought or oversold, Bollinger Bands (BB), which measures market volatility, and Moving Average Convergence Divergence (MACD), which uses exponential moving averages as data points.   Closing thoughts Many traders and investors use one or a combination of the approaches above to calculate stop-loss and take-profit levels. These levels serve as technical motivations for them to exit a trade, be it to abandon a losing position or realize potential profits. Note that these levels are unique to each trader and do not guarantee successful performance.  Instead, they guide decision-making, making it more systematic and robust. Thus, evaluating risk by identifying stop-loss and take-profit levels or using other risk management strategies is a good trading habit.   Source: What Are Stop-Loss and Take-Profit Levels and How to Calculate Them?
Cross-Chain Interoperability Solutions Have The Potential To Significantly Improve

STP (STPT) Coin - What Is It? - Binance Academy | Altcoins

Binance Academy Binance Academy 09.08.2022 15:32
TL;DR STP aims to optimize the current state of Decentralized Autonomous Organizations (DAOs). It offers solutions to streamline existing fragmented DAO tooling, create DAOs without coding knowledge, and manage DAOs more efficiently. Ultimately, a holistic DAO ecosystem would lower fees and increase transaction speed to promote adoption. Introduction Decentralized autonomous organizations (DAOs) are community-led, transparent, and fully independent entities that run on the blockchain. DAOs are typically built on layer-1 networks, and due to scalability limitations they inherit from these blockchains, activity on DAOs can often be slow and expensive. In addition, although there is an abundance of DAO tooling in the market, the crypto space remains fragmented across multiple chains and tools. As DAOs continue to gain traction, it’s important to ensure a smooth and efficient onboarding process for projects and users. In 2021, STP launched Verse Network, a full suite of native tools and infrastructures facilitating efficient decentralized decision-making for users, communities and organizations to streamline the creation and management of DAOs. Through Verse Network, users can access a suite of no-code DAO tools to launch and manage their DAOs on the blockchain.  Learn more on Binance.com How does STP work?  STP offers solutions for DAO creation, management, as well as governance using their all-in-one DAO tool, Clique. Clique helps alleviate the fragmentation of DAO tooling by providing a comprehensive dashboard for users to manage all their activity across multiple DAOs. It also helps to sync information & updates from multiple DAOs. As the number of DAOs continues to grow, members can streamline their workflow using Clique, maximizing their efficiency with a better user experience.  Here are some other ways Clique can be used: DAO creation Clique provides a full suite of no-code tools and infrastructure for projects to build DAOs in the Verse ecosystem. All aspects of DAO creation can be executed directly on Clique, including: Selection of a template for DAO creation, including Membership DAO, Project DAO, and Investment DAO Issuance of new tokens and bridging existing tokens for cross-chain capabilities Implementation of custom token distribution schedule with reserved token allocation  Customization and execution for whitelist and public sale Issuance of DAO token for governance Clique offers templates that work for DAOs across different use cases and industries while still providing users with options for additional customization. Using Clique, projects can maintain high flexibility in creating their on-chain DAO without the need to create smart contracts. Projects are able to have a say in token creation, token distribution, and public sale, as well as configure the governance structure of the DAO. This includes rules for minimum holdings for a variety of governance and DAO mananagent activities such as proposal creation and voting.  DAO management and governance ​​Once a DAO is created and launched on Clique, the decentralized app (DApp) also allows community members to browse, govern, and socially participate in their projects through an aggregated dashboard. Appointed managers can also oversee and track their DAO’s governance and social activity. Managers can analyze activity metrics in comparison to other DAOs. In turn, DAO members are able to view DAO contributions and track activity in the DAOs they chose to join.  Below are DAO management features on Clique accessible to DAO managers and members: Accessing an aggregated dashboard to manage all followed DAOs, created DAOs and asset holdings for the user. Browsing all featured or followed proposals and social posts. Browsing ongoing events across the universe of DAOs on the Verse, including pinned and attended events. Viewing DAO participation, including voting on proposals, social interaction through discussion forums, public profile tracking, etc. For managers, overseeing and tracking DAO governance and social activities across all members, and analyzing their activities compared to other DAOs. Monitoring active participation among members Apart from token holdings, Clique also allows members to observe how active other members are by tracking various key participation metrics. This includes voting frequency, number of proposals made, social posting, analytical work, token management, and so on. With Clique, DAO members can track all of these activities, as well as future DAO proposals and events in the streamlined dashboard.  Cross-chain governance with Data Bridge The Verse Network’s Data Bridge enables cross-chain governance for DAOs. The Data Bridge serves as a cross-chain synchronizer to communicate data and voting results between the DAO’s original chain (Ethereum) and Polygon, where Clique is located.  On the Polygon chain, the governance contract allows users to create and vote on proposals. The voting power of a user is determined by the snapshot of their token holdings at the time a proposal is created.  Validator nodes store historical data and snapshots from Ethereum as a certificate in order to deliver user signatures on Polygon. The certificate includes the corresponding token holdings of each user. Users can create and vote on proposals using their signature, with each unique signature being validated by the contract.  What is STPT? The native token of STP is called STPT. Token holders can use STPT to vote for governance proposals related to its ecosystem and future development. STPT is also used to access the full suite of tools on Verse including Clique and Data Bridge. Closing thoughts STP is working towards an inclusive DAO ecosystem that can be used by anyone. The suite of tools available on Verse Network allows for easy DAO creation and management as it aims to unify the DAO space and encourage adoption.
Binance Academy summarise year 2022 featuring The Merge, FTX and more

Tokenomics Explained - What Is It? | Binance Academy

Binance Academy Binance Academy 08.08.2022 13:26
TL;DR Tokenomics is a term that captures a token’s economics. It describes the factors that impact a token’s use and value, including but not limited to the token’s creation and distribution, supply and demand, incentive mechanisms, and token burn schedules. For crypto projects, well-designed tokenomics is critical to success. Assessing a project’s tokenomics before deciding to participate is essential for investors and stakeholders.   Introduction  A portmanteau of “token” and “economics,” tokenomics is a key component of doing fundamental research on a crypto project. Aside from looking at the white paper, founding team, roadmap, and community growth, tokenomics is central to evaluating the future prospects of a blockchain project. Crypto projects should carefully design their tokenomics to ensure sustainable long-term development.  Learn more on Binance.com Tokenomics at a glance  Blockchain projects design tokenomics rules around their tokens to encourage or discourage various user actions. This is similar to how a central bank prints money and implements monetary policies to encourage or discourage spending, lending, saving, and the movement of money, Note that the word “token” here refers to both coins and tokens. You can learn the difference between the two here. Unlike fiat currencies, the rules of tokenomics are implemented through code and are transparent, predictable, and difficult to change. Let’s look at bitcoin as an example. The total supply of bitcoin is pre-programmed to be 21 million coins. The way bitcoins are created and entered into circulation is by mining. Miners are given some bitcoins as a reward when a block is mined every 10 minutes or so.  The reward, also called block subsidy, is halved every 210,000 blocks. By this schedule, a halving takes place every four years. Since January 3, 2009, when the first block, or the genesis block, was created on the Bitcoin network, the block subsidy has been halved three times from 50 BTC to 25 BTC, 12.5 BTC, and 6.25 BTC currently. Based on these rules, it’s easy to calculate that around 328,500 bitcoins will be mined in 2022 by dividing the total number of minutes of the year by 10 (because a block is mined every 10 minutes) and then multiplying by 6.25 (because each block gives out 6.25 BTC as rewards). Therefore, the number of bitcoins mined each year can be predicted, and the last bitcoin is expected to be mined around the year 2140. Bitcoin’s tokenomics also include the design of transaction fees, which miners receive when a new block is validated. This fee is designed to increase as transaction size and network congestion rise. It helps prevent spam transactions and incentivizes miners to keep validating transactions even as block subsidies keep diminishing.  In short, the tokenomics of Bitcoin is simple and ingenious. Everything is transparent and predictable. The incentives surrounding Bitcoin keep participants compensated to keep the network robust and contribute to its value as a cryptocurrency.    Key elements of Tokenomics As a catch-all term for a wide range of factors influencing a cryptocurrency’s value, “tokenomics” refers first and foremost to the structure of a cryptocurrency’s economy as designed by its creators. Here are some of the most important factors to consider when looking at a cryptocurrency’s tokenomics.  Token supply Supply and demand are the primary factors impacting the price of any good or service. The same goes for crypto. There are several critical metrics measuring a token’s supply.  The first is called maximum supply. It means that there is a maximum number of tokens coded to exist in the lifetime of this cryptocurrency. Bitcoin has a maximum supply of 21 million coins. Litecoin has a hard cap of 84 million coins, and BNB has a maximum supply of 200 million. Some tokens don’t have a maximum supply. The Ethereum network’s supply of ether increases every year. Stablecoins like USDT, USD Coin (USDC), and Binance USD (BUSD) have no maximum supply as these coins are issued based on the reserves backing the coins. They theoretically can keep growing without limits. Dogecoin and Polkadot are two more cryptos with uncapped supply. The second is circulating supply, which refers to the number of tokens in circulation. Tokens can be minted and burned, or be locked up in other ways. This has an effect on the price of the token as well. Looking at the token supply gives you a good picture of how many tokens there will be ultimately. Token Utility Token utility refers to the use cases designed for a token. For example, BNB’s utility includes powering the BNB Chain, paying transaction fees and enjoying trading fee discounts on the BNB Chain, and serving as community utility token on the BNB Chain ecosystem. Users can also stake BNB with various products within the ecosystem to earn additional income. There are many other use cases for tokens. Governance tokens allow the holder to vote on changes to a token’s protocol. Stablecoins are designed to be used as a currency. Security tokens, on the other hand, represent financial assets. For instance, a company could issue tokenized shares during an Initial Coin Offering (ICO), granting the holder ownership rights and dividends. These factors can help you determine the potential use cases for a token, which is essential in understanding how the token’s economy will likely evolve. Analyzing token distribution  Aside from supply and demand, it’s essential to look at how tokens are distributed. Large institutions and individual investors behave differently. Knowing what types of entities hold a token will give you insight into how they are likely to trade their tokens, which will in turn impact the token’s value.  There are generally two ways to launch and distribute tokens: a fair launch and a pre-mining launch. A fair launch is when there is no early access or private allocations before a token is minted and distributed to the public. BTC and Dogecoin are examples of this category.  On the other hand, pre-mining allows a portion of the crypto to be minted and distributed to a select group before being offered to the public. Ethereum and BNB are two examples of this type of token distribution.  Generally, you want to pay attention to how evenly a token is distributed. A few large organizations holding an outsized portion of a token are typically considered riskier. A token held largely by patient investors and founding teams means stakeholders' interests are better aligned for long-term success.  You should also look at a token’s lock-up and release schedule to see if a large number of tokens will be placed into circulation, which puts downward pressure on the token’s value.  Examining token burns Many crypto projects regularly burn tokens, which means pulling tokens out of circulation permanently.  For example, BNB adopts coin-burning to remove coins from circulation and reduce the total supply of its token. With 200 million BNB pre-mined, BNB’s total supply is 165,116,760 as of June 2022. BNB will burn more coins until 50% of the total supply is destroyed, which means BNB’s total supply will be reduced to 100 million BNB. Similarly, Ethereum started to burn ETH in 2021 to reduce its total supply.  When the supply of a token is reduced, it’s considered deflationary. The opposite, when a token’s supply keeps expanding, is deemed inflationary.  Incentive mechanisms A token’s incentive mechanism is crucial. How a token incentivizes participants to ensure long-term sustainability is at the center of tokenomics. How Bitcoin designs its block subsidy and transaction fees is a perfect illustration of an elegant model. The Proof of Stake mechanism is another validation method that is gaining prevalence. This design lets participants lock their tokens in order to validate transactions. Generally, the more tokens are locked up, the higher the chance to be chosen as validators and receive rewards for validating transactions. It also means that if validators try to harm the network, the value of their own assets will be placed at risk. These features incentivize participants to act honestly and keep the protocol robust.  Many DeFi projects have used innovative incentive mechanisms to achieve rapid growth. Compound, a crypto lending and borrowing platform, lets investors deposit cryptos in the Compound protocol, collect interests on them, and receive COMP tokens as additional reward. Moreover, COMP tokens serve as a governance token for the Compound protocol. These design choices align the interests of all participants with that of Compound’s long-term prospects.   What’s next for tokenomics Since the genesis block of the Bitcoin network was created in 2009, tokenomics has evolved significantly. Developers have explored many different tokenomics models. There have been successes and failures. Bitcoin’s tokenomics model still remains enduring, having stood up to the test of time. Others with poor tokenomics designs have faltered. Non-fungible tokens (NFTs) provide a different tokenomics model based on digital scarcity. The tokenization of traditional assets such as real estate and artworks could generate new innovations of tokenomics in the future.   Closing thoughts Tokenomics is a fundamental concept to understand if you want to get into crypto. It’s a term capturing the major factors affecting the value of a token. It’s important to note that no single factor provides a magical key. Your assessment should be based on as many factors as possible and analyzed as a whole. Tokenomics can be combined with other fundamental analysis tools to make an informed judgment on a project’s future prospects and its token’s price. Ultimately, the economics of a token will have a major impact on how it is used, how easy it will be to build up a network, and whether there will be much interest in the use case of the token.
Nikkei, Taiex And Kospi Are Falling. Situation Of Markets In Asia Pacific

Crypto - Binance Academy: Comparing APY And APR - Differences Between Annual Percentage Yield And Annual Percentage Rate

Binance Academy Binance Academy 08.08.2022 13:07
TL;DR You have likely seen these two similar-sounding terms, APY and APR, when looking into decentralized finance (DeFi) products.  APY, or annual percentage yield, incorporates interest compounded quarterly, monthly, weekly, or daily, while APR, or annual percentage rate, doesn’t. This simple distinction can make a significant difference to the calculations for returns over a period of time. It is therefore important to understand how these two metrics are calculated and what it means for the returns that you can earn on your digital funds. Learn more on Binance.com     APR vs. APY   APR and APY are both fundamental for the purposes of personal finance. Let’s start with the simpler term, annual percentage rate (APR). It is the interest rate a lender earns on their money — and that a borrower pays for using it — over one year’s time. For example, if you put $10,000 into a bank savings account with a 20% APR, you will get $2,000 in interest after one year. Your interest is calculated by multiplying the principal amount ($10,000) and the APR (20%). So, after one year, you will have a total of $12,000. After two years, your capital will amount to $14,000. After three years, you will have $16,000, and so on. Before getting into annual percentage yield (APY), let’s first understand what compound interest is. Put simply, it means earning interest on the previous interest. In the example above, if the financial institution pays interest to your account monthly, your balance will look different during each of the twelve months of the year.  Instead of getting $12,000 at the end of the 12th month, you will receive some interest each month. That interest is added to the principal sum of your deposit, and the sum on which you earn interest goes up as the months go by. Each month, you will have more money earning interest. This effect is called compounding.  Let’s say that you put $10,000 into a bank account with a 20% APR, with the interest compounding monthly. Without getting into the complicated math, you will get $12,429 at the end of one year. That is $429 more in interest earned simply by adding the effect of compound interest. How much interest you’d earn with the exact 20% APR but with interest compounded daily? That would give you $12,452.  The power of compounding is more impressive over more extended periods. After three years, you would end up with $19,309 with the same 20% APR product with daily compounding. That’s $3,309 more interest earned than that same 20% APR product without compounding.  By simply incorporating compound interest, you’d earn a lot more on your money. Notice also that the interest differs according to the compounding frequency. You earn more when the compounding is more frequent. Daily compounding will give you more interest than monthly compounding.  How do you calculate how much you can earn when a financial product offers compound interest? That’s where annual percentage yield (APY) comes in. You can use a formula to convert an APR to APY depending on the frequency of compounding. A 20% APR with monthly compounding equals 21.94% in APY. With daily compounding, it would equal 22.13% APY. These APY numbers represent the annualized interest returns you earn after incorporating compound interest.  In sum, APR (annual percentage rate) is a simpler and more static metric: It’s always quoted as a fixed yearly rate. But APY (annual percentage yield) incorporates interest earned on interest, or compound interest. It changes according to the compounding frequency. One way to memorize the difference is to remember that “yield” has five letters (one more letter than “rate”) and also represents the more complex concept (and greater earnings).   How to compare different interest rates?   From the example above, you can see that more interest can be earned when interest is compounded. Different products may present their rates as either APR or APY. Because of this disparity, it’s essential to use the same term for comparison. Be mindful when you compare products,  as you may be comparing apples to oranges.  Products with a higher APY will not necessarily yield more interest than those with a lower APR. You can easily convert APR and APY using online tools if you know the frequency of compounding.  The same goes for DeFi and other kinds of crypto products. When looking at products that may advertise using crypto APY and APR, such as crypto savings and staking, make sure to convert them so that you can compare apples to apples.  Further, when comparing two DeFi products with APY, make sure that they have the same compounding periods. If they have the same APR, but one compounds monthly and the other daily, then the one that compounds daily may earn you more crypto interest. Another important point to note is what APY means in relation to the specific crypto product you are reviewing. Some product collaterals use the term “APY” to refer to the rewards that one can earn in cryptocurrency over the selected timeframe, and not the actual or predicted returns/yield in any fiat currency. This is an important distinction to appreciate because crypto asset prices can be volatile, and the value of your investment (in fiat terms) may go down or up. If the crypto asset prices fall drastically, the value of your investment (in fiat terms) may still be lower than the original fiat amount you had invested, even if you continue to earn an APY in crypto assets. It is therefore important that you review the relevant product terms and conditions carefully, and do your own research, to fully understand the investment risks involved and what APY means in that specific context.                 Closing thoughts APR and APY may seem confusing initially, but it’s easy to tell one from another by remembering that annual percentage yield (APY) is the more complex metric incorporating compound interest. Because of the effect of earning interest on interest, APY is always a higher number when interest is compounded more frequently than once a year. The bottom line is always to check which rate you are looking at when calculating the interest you’d earn.     Disclaimer and Risk Warning: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial advice, nor is it intended to recommend the purchase of any specific product or service. Please read our full disclaimer here for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance is not liable for any losses you may incur. Not financial advice. For more information, see our Terms of Use and Risk Warning.
Crypto: How To Estimate A Risk And Take A Profit?

Crypto: Binance Academy - Band Protocol (BAND) - What It Is? How Does It Work?

Binance Academy Binance Academy 08.08.2022 12:47
TL;DR Band Protocol (BAND) is a data oracle platform that provides services to multiple projects across different blockchains. It uses a Delegated Proof-of-Stake consensus mechanism where delegators, validators, and nodes stake the native token BAND to participate. Requests for off-chain information are gathered by validators, committed to the chain, and then distributed to the requesting DApps.   Introduction Blockchain and Decentralized Finance (DeFi) have changed the status quo of the world’s financial system within ten years. However, one significant obstacle Decentralized Application (DApp) developers face is accessing reliable, accurate real-world data. These data sources are located outside the blockchain and must be integrated on-chain. To try and solve this issue, oracles like Band Protocol have become commonplace in the crypto ecosystem.  Learn more on Binance.com What is Band Protocol? Band Protocol (BAND) is a cross-chain data oracle platform that aggregates real-world data and connects it to APIs and smart contracts. Founded in 2017, Band Protocol enables information exchange between on-chain and off-chain data sources for DApps. Originally built on the Ethereum (ETH) blockchain, the protocol transitioned to the Cosmos network in June 2020 to lower gas fees and optimize costs.  As an oracle network, Band Protocol is a middleman between real-world, off-chain data and blockchains. Their service allows smart contracts to execute based on actual off-chain events and information. Without reliable oracles, DApps struggle to operate in a trusted, decentralized manner with transparent information sources.   How does Band Protocol work? Band protocol uses the independent BandChain blockchain built using Cosmos SDK. Developers can use BandChain to develop customizable oracle scripts providing off-chain real data for DApps and smart contracts. Customizable oracle scripts include data, the data source, the number of validators required to report the data, and the methodology for aggregating the data. Executing an oracle script begins the following flow: 1. A DApp requests data according to its customized oracle script. 2. This request is received by a randomized set of validators, who respond by pulling data from the specified data source. 3. Data reports from the different validators are aggregated according to the customized oracle scripts. 4. This final aggregated data is permanently stored on BandChain, and an oracle data proof is produced. 5. The validated oracle data is transferred to the DApps or blockchains that made the request.   What consensus mechanism does Band Protocol use? Band Protocol uses its native BAND token and a Delegated Proof-of-Stake consensus mechanism to secure its oracle network. BandChain currently has over 90 professional and community node operators working on the blockchain. Each node operator must stake BAND tokens on the network to disincentivize malicious behavior. As a reward for successfully processing data requests, validators get a share of query fees and block rewards. As a BAND token holder, there are two ways to participate in the network: as a validator or a delegator. Validators on the BandChain are also required to stake BAND tokens to ensure data accountability. Token holders can either stake or delegate their tokens to validators to earn staking rewards and collected data request fees. Furthermore, BAND tokens are also used for the protocol’s governance mechanism.   What are Band Protocol’s key goals? Most of Band Protocol’s attractive qualities come from its transition from Ethereum to Cosmos. The project was created with three design goals: 1. Speed and scalability - Serving a large number of data requests with minimal latency. 2. Cross-chain compatibility - Being blockchain-agnostic and able to serve most publicly available blockchains. 3. Data flexibility - Supporting different methods of retrieving and aggregating data with a generic system. How does Band Protocol attempt to achieve these goals? The Cosmos network’s unique IBC (Inter-Blockchain Communication) protocol provides speedy interoperability and autonomy for blockchains. This feature allows Band Protocol to service and partner with projects built on different networks, including Ethereum, Fantom, Avalanche, and many more.  The Band Standard Dataset includes a collection of over 80 data feeds from a growing number of data sources. These decentralized price feeds allow DApp developers to be creative, agile, and flexible when developing and deploying on the blockchain network.   Closing thoughts Band Protocol is a growing oracle solution provider with a fixed focus on enabling Web3. Its aims of a fast, scalable, customizable and interoperable service should prove attractive to developers that are looking to become part of the Web3 ecosystem.
For What It Is Worthy To Pay Attention Next Week 23.01-29.01

Binance Academy: Optimistic Oralce UMA Explained - What Is It? How Does It Work?

Binance Academy Binance Academy 08.08.2022 12:11
TL;DR UMA is an optimistic oracle (OO) designed to record any knowable truth onto a blockchain.  Oracles are entities that connect blockchains to the outside world. An optimistic oracle is a type of oracle that feeds real-world data into a decentralized system; this data is assumed to be accurate if there are no disputes around it. The optimistic oracle, called a “human-powered truth machine,” aims to introduce flexibility and unlock Web3’s limitless potential with the objective of making global markets universally fair, accessible, secure and decentralized.   Introduction UMA was co-founded in 2017 by Hart Lambur. In December 2018, the UMA project white paper was unveiled, and shortly after, the developers announced an official launch of the UMA project and introduced the USStocks token as the first product on the core network. UMA held an initial liquidity offering in April 2021, the first-ever initial offering of a decentralized exchange on Uniswap.  UMA, which stands for Universal Market Access, is an optimistic oracle that secures markets and smart contracts across Web3. Due to imperfect or inaccurate information, off-chain data needed to meet conditions for smart contracts may be insufficient or incorrect. Current oracles are too rigid as they feed singular values and are unable to account for other forms of data. To accomodate imperfect information, OOs incentivize people to verify the accuracy of data, facilitating advanced data verification with a human element.     How does UMA work? There are three actors in UMA’s Optimistic Oracle system: the contract requesting the data, the participant offering the data, and a potential disputant, who can dispute data if they disagree. Request UMA’s OO incentivizes its network of token holders to ensure that accurate data is supplied on-chain. The OO can provide any data through its community of token holders, adding a human element to its data verification process.  Propose Typically, the contract asks for data and specifies a dispute period (which can range from a few minutes to a few days). The proposer posts a bond and offers a data point, which is up to being disputed. After the dispute period has passed, the data is assumed to be true and is delivered to the blockchain, and the proposer gets their bond back. Within the dispute period, someone  may feel that the data is inaccurate and challenge it. Dispute Sometimes, there may show up a disputer who disagrees with the proposer’s data. The disputer posts a bond as well, and the dispute goes to a vote. UMA token holders resolve the dispute within 48 hours. If the disputer is right, they get a portion of the proposer's deposit as a reward; if the disputer is wrong, they lose their deposit as a penalty, a portion of which goes to the proposer. Voting in the oracle has three phases:  Open voting: A 24-hour period when the vote is recorded. Voting confirmation: A period when users’ votes are revealed and the results are tallied. Reward claim: A period where users who voted “correctly” can claim the reward in UMA tokens generated by the protocol. Rewards will compound as they are claimed. Claiming the rewards places the tokens in users’ wallets, making them active voting tokens that will increase the user’s voting power with each successful vote. UMA’s smart contracts are designed primarily for developers building decentralized applications. However, all UMA token owners can participate in UMA’s optimistic oracle. UMA is a ERC-20 token built on Ethereum that can be held in wallets like Metamask, Trezor, or Ledger, which must be connected to the UMA DApp to enable voting.   What makes UMA unique? UMA's OO provides human-powered data dispute resolution between smart contracts. Unlike standard price-feed oracles that are rigid and only provide singular, repeatable values onto a blockchain, OOs provide a way to reconcile imperfect or ambiguous data between smart contracts. OOs are more flexible than other oracles because they can provide any kind of knowable truth from off-chain, like a sports score, weather conditions or election results, which makes such systems’ potential for Web3 limitless.    What is the UMA token? UMA is an ERC-20 token and the foundation of the UMA security model. As mentioned, holders of the token can take part in community voting on disputed data. UMA holders earn rewards when they participate in voting. An inflationary reward equal to 0.05% of the current UMA supply is distributed to active voters each time the network goes to vote.  Token holders are also involved in governance, protocol upgrades, and system changes. The initial supply of the token was 100 million. In April of 2021, UMA hosted the first ever initial decentralized exchange offering on Uniswap, with an initial price of 0.26 USD. Of the remaining 98 million tokens, 48.5 million were reserved for the founders of the project, 35 million tokens were allocated to the developers of the network, and 14.5 million tokens were put aside for future sales.  In 2021, Risk Labs, the foundation that had initiated UMA, transferred 35 million tokens to the UMA DAO, allowing UMA token holders to vote on when and where to deploy these funds for the ecosystem’s growth.   What’s next for UMA? UMA’s business development team is focusing on two industry segments: prediction markets and insurance.  Currently, risk management platform Sherlock uses UMA’s oracle as a backstop for their insurance policy dispute system. Polymarket, an information markets platform, will soon be able to ask UMA’s OO questions that other oracles could not trustlessly handle.  UMA is also expecting to see considerable growth in DAO tooling for governance and incentives. Outcome.Finance, powered by UMA, is offering DAOs ways to run trustless incentive programs. Risk Labs is the team and foundation behind UMA, as well as its partner organizations, Across Protocol and Outcome.Finance. UMA and its OO are currently supporting the Across cross chain bridge.   How to buy UMA on Binance?   You can buy UMA on cryptocurrency exchanges like Binance.  1. Log in to your Binance account and go to [Trade] -> [Spot].  2. Type “UMA” on the search bar to see the available trading pairs. We will use UMA/BUSD as an example. 3. Go to the [Spot] box and enter the amount of UMA you want to buy. In this example, we will use a Market order. Click [Buy UMA] to confirm your order, and the purchased UMA will be credited to your Spot Wallet.     Closing thoughts UMA’s Optimistic Oracle has secured hundreds of millions of dollars since its launch in 2018. As builders begin to understand and incorporate optimistic oracles, there may come a time when OOs are central to a variety of protocols, DAOs, integrations, and products.
Crypto: How To Estimate A Risk And Take A Profit?

Binance Academy: Kyber Network (KNC) - What Is It?

Binance Academy Binance Academy 26.07.2022 13:39
TL;DR Founded by Loi Luu and Victor Tran in 2017, Kyber Network is a multi-chain cryptocurrency liquidity hub that makes DeFi trading more efficient and cost-effective and ultimately enables DeFi for all in an easy, fast, cheap and secure way. Its flagship product, KyberSwap, is a DEX and aggregator aimed at being the best liquidity platform to swap and earn on all chains, equipped with tools and automation to help users make informed decisions and maximize their results. KyberSwap is deployed on over 11 chains, including Ethereum, Polygon, BNB Chain, and Avalanche. Kyber is a community-governed project, and the Kyber Network Crystal (KNC) token is an ERC-20 token used to align incentives for multiple stakeholders. KNC holders can stake tokens on KyberDAO to vote on proposals and earn KNC rewards. Kyber's reputation stems from 5 years in DeFi, bringing value to the ecosystem and prioritizing user safety with smart contract audits and blockchain insurance in place. The project's vision is to become the liquidity infrastructure and transaction layer for the decentralized economy. Learn more on Binance.com What is KyberSwap? KyberSwap.com is Kyber Network's flagship DEX aggregator and liquidity platform that aims to provide the best swap rates for traders while enabling liquidity providers to maximize earnings through capital efficiency.  As of June 2022, KyberSwap is deployed on over 11 chains, including Ethereum, Polygon, BNB Chain, Avalanche, Cronos, Fantom, Aurora, Velas, Oasis, Arbitrum, and BitTorrent, with over 60 DEXes integrated and 20,000+ tokens supported.   KyberSwap enables users to swap, earn and seamlessly participate in DeFi in each of the supported chains. KyberSwap is a decentralized and permissionless trading platform. This means users have complete control over their orders and funds. KyberSwap aims to solve the daily liquidity challenges that many DeFi Traders encounter while also maximizing rewards for liquidity providers with superior capital-efficient pools.   How does KyberSwap work? For Traders KyberSwap provides access to more than 20,000 tokens and $34B TVL across more than 60 DEXs on 11 chains, while it ensures the best swap rates by using an advanced router and gas-efficient smart contracts as well as exploring on-chain arbitrage opportunities. Users can get the best rates while enjoying an advanced, easy-to-use interface that offers live price charts, free pro-trader tools, and live trading route visualization. By dynamically routing through liquidity pools on each chain from more than 60 DEXes, KyberSwap enables users to access more than 20,000 tokens, without needing to check rates across multiple platforms or use different platforms on each chain. KyberSwap does not charge an additional fee during aggregation. Those looking to spot tokens in DeFi can enjoy KyberSwap's Discover page, a DeFi tool that helps users identify tokens that are likely to start trending soon. This is done based on on-chain data, trading volume, and price trendlines. For Liquidity Providers KyberSwap's protocol provides liquidity providers with capital-efficient pools with security, such as anti-sniping attacks, protecting LPs from bots that deposit and remove liquidity before large volumes of trades. Capital efficiency also means that smaller pool volumes can serve very large volumes of trade and transactions, providing superior returns to LPs. Additional automation provides increased user benefits, such as single token deposits (so LPs don't have to deposit two sets of tokens) and auto-compounding (pool fees compound automatically). These features extend to KyberSwap's 11 chains, providing DeFi users access to various existing pools or even creating pools themselves. KyberSwap adopts a Dynamic Market Maker (DMM) protocol, which is a modified version of the traditional Automated Market Maker (AMM) model used by Uniswap and other DEXes. When the market is too volatile, fees can dynamically increase to reflect better the risks involved in each trade. When the market is stable and volatility drops, fees decrease. The DMM automatically recalculates fees by analyzing on-chain volume data for each liquidity pool. This system is quite similar to ridesharing apps like Uber. During high-demand hours, such as rush hour, the price of Uber rides goes up. Likewise, prices decrease when there is a lower demand for rides. KyberSwap’s second feature is a “programmable price curve” called Amplification (AMP). This allows a liquidity pool to mimic higher levels of liquidity without needing more tokens. Liquidity providers can set their own AMP according to the type of token pair in the pool. Pairs with lower deviations, like stablecoins, will have higher AMP.  On the other hand, more volatile pairs will have lower AMP. Liquidity pools with AMP equal to one are pools that still work according to the dynamic fee model but with no amplification. This allows projects to turn $200k of liquidity into more than $1M effective liquidity for higher efficiency. Liquidity providers can also earn rewards through KyberSwap’s liquidity mining farms.   What makes KyberSwap unique?  A few attributes of KyberSwap that make it unique are: 1. Highly integrated aggregator and liquidity protocol. 2. Strong user benefits: best rates aggregator, automation, security, and free advanced tools. 3. KyberSwap’s liquidity protocol uses its DMM and Amplification to increase efficiency and reduce the risks of slippage and impermanent loss. Slippage is when a trade executes at a lower or higher price than desired due to low liquidity (thin order books). Impermanent loss can be defined as a price decrease experienced by a crypto asset after you put it in a liquidity pool.   What is the Kyber Network Crystal (KNC) token?  Kyber Network Crystal (KNC) is KyberSwap’s native token that fuels the Kyber Network ecosystem. Working on a Proof of Stake (PoS) consensus mechanism, KNC holders can participate in the DAO and vote on all the governance proposals related to the future of the network by staking their KNC assets or delegating their vote to a third-party platform. KNC holders can contribute KNC to eligible farming pools for liquidity mining rewards. For other activities such as Trading Contests, Gleam Giveaways, and AMAs, participants are also rewarded with KNC tokens. KNC is traded on DeFi exchanges like KyberSwap and on several centralized exchanges like Binance.   How to use KyberSwap If you’re looking to swap your crypto tokens on KyberSwap, follow the steps below to get started. 1. Visit KyberSwap.  2. Connect your DeFi wallet. KyberSwap supports MetaMask, Coin98, WalletConnect, Coinbase Wallet and Ledger. 3. Select your desired crypto token pair. You can check the details of your transaction under “More Information.”   4. Swap and confirm the transaction on your crypto wallet.  Apart from swaps, users can also provide liquidity by using one of KyberSwap’s pools or creating new pools. They can also stake their LP tokens in one of the eligible farms.   Closing Thoughts Kyber Network is the liquidity hub that powers KyberSwap, a decentralized exchange built on Ethereum. It’s a hub for decentralized services and a place where DeFi enthusiasts can build, exchange, and improve the crypto space. Kyber Network’s DEX, KyberSwap, is focused on improving the experience for liquidity providers and traders in the DeFi space.
Bitcoin Maintains A Steady Bullish Potential

Crypto: (BTC) Bitcoin ETF - What Is It? How Does It Work?

Binance Academy Binance Academy 21.07.2022 15:41
TL;DR Bitcoin is solidifying itself as a legitimate investment asset that anyone can invest in. Well, technically not anyone, as some institutions and individuals can only participate in a highly regulated manner. Many think a Bitcoin ETF could fulfill this purpose. Bitcoin ETFs already exist in Canada and the US, helping cryptocurrencies increase their mainstream adoption with investors. Let’s see what an ETF is and what it could mean for Bitcoin.   Introduction Bitcoin and the cryptocurrency markets have come a long way. Not more than a decade ago, this technology was only used by a small community of enthusiasts, while the price was around 10,000 BTC for two pizzas.  Fast forward a few years, and we’ve seen many successful businesses built on this industry, countless cryptocurrency projects, the birth of DeFi, and much more. Institutional adoption is also booming. MicroStrategy has converted more than 2 billion dollars of their balance sheet into Bitcoin, and you may soon be able to buy the latest Tesla with your BTC. But what building blocks are still missing before Bitcoin can become a major asset in the global macroeconomic environment? One of these could be a regulated way for institutions and more traditional players to get exposure to it. According to some, the best way to do that could be through an ETF. Learn more on Binance.com What is a Bitcoin ETF? First, a bit of an overview. An ETF is an exchange-traded fund, meaning an investment fund that tracks the price of an underlying asset. ETFs exist across many different industries and asset classes. For example, gold ETFs have existed for decades, and they track the price of gold. A Bitcoin ETF would work the same way – the price of the ETF would follow the price of Bitcoin. ETFs are regulated financial products – as such, they trade on traditional markets like the NASDAQ or NYSE and not on a cryptocurrency exchange. This, however, might change in the future as the borders between traditional finance and the cryptocurrency industry continue to blur.   Why is a Bitcoin ETF important? Well, Bitcoin isn’t the easiest asset to deal with. Custody, for example, can cause some serious headaches for a large institution. After all, Goldman Sachs won’t just plug a hardware wallet into a laptop and YOLO (transfer) $2B of Bitcoin on it. Large financial institutions don’t operate in the same way as individual investors, and they need a complex regulatory framework and financial plumbing to be able to participate in this space. This is why an ETF can go a long way to bring adoption and expand the potential investor base. It can give price exposure for participants in the traditional markets without them having to worry about all the nitty-gritty of physically owning the coins. A Bitcoin ETF could also hold assets other than Bitcoin. For example, a Bitcoin ETF could hold a basket of assets, like Bitcoin, Ethereum, Tesla stock, gold, and so on. This could provide some diversification benefits to investors.   A brief overview of Bitcoin ETFs Generally, when people talk about Bitcoin ETFs, they’re usually talking about ETFs on the US markets. However, ETFs exist in many different markets. For example, the first Bitcoin ETF was launched on the Canadian stock market. It’s called the Purpose Bitcoin ETF and trades on the Toronto Stock Exchange with the ticker BTCC. Even so, most eyes were on US regulators and whether they would allow for a US Bitcoin ETF. Finally, in October 2021, the SEC accepted an application to list the ProShares Bitcoin Strategy ETF (BITO) on the New York Stock Exchange (NYSE).  Historically, most applications had been rejected due to volatility, the unregulated nature of the Bitcoin markets, and their apparent liability to market manipulation. While these issues may be true to some extent, it’s probably also true for many other financial markets that already have ETFs. Much of the financial plumbing required for Bitcoin to be a legitimate macro asset class has been built in the last bear market. If MicroStrategy wanted to buy billions worth of Bitcoin just a few years ago, it probably would have been exceedingly difficult to do so. Now, however, both the infrastructure and the liquidity are there and ready to fulfill even such sizable investments. This ongoing maturation of the Bitcoin markets likely turned the tides for the regulators and eventually gave way to the US Bitcoin ETF we see today.     What is a Bitcoin futures ETF? Not all Bitcoin ETFs are actually backed up by BTC held in wallets, known as Bitcoin Physical ETFs. Many Bitcoin ETFs, like the BITO, use BTC futures contracts as their underlying asset.  The SEC has so far favored futures ETFs tied to the Chicago Mercantile Exchange’s (CME) Bitcoin futures, an already regulated financial security. A Bitcoin futures ETF uses the price of the CME’s Bitcoin Reference Rate (BRR), rather than the spot price. This means the only difference between a Bitcoin Physical ETF and a Bitcoin futures ETF is where their prices come from.   Should I invest in a Bitcoin ETF? Is a Bitcoin ETF the right financial instrument for you to invest in Bitcoin? Well, if you’re an individual who wants to protect their savings against the melting value of fiat, you may be better off just buying Bitcoin.  After all, Bitcoin is about democratizing finance. Well, actually, Bitcoin is many things for different people. But having direct custody of your savings can be powerful. Not to mention the countless ways you can earn yield or borrow against your Bitcoin.  With that said, there are advantages to investing in a Bitcoin ETF, so if those seem attractive to you, then an ETF can also be a good choice.   Closing thoughts Bitcoin ETFs let investors in the traditional markets get exposure to Bitcoin in a regulated way. It can be a good way to bring more institutional adoption to cryptocurrency as an asset class. With the building blocks now having fallen into place in the US, we can only wait to see how much investors will expose their portfolios to BTC.
Binance Academy summarise year 2022 featuring The Merge, FTX and more

Crypto: SKALE Crypto (SKL) - What Is It? How Does It Work? | Binance Academy

Binance Academy Binance Academy 19.07.2022 13:23
TL;DR SKALE is made up of a potentially unlimited number of blockchains that are modular, fast, and secure. It operates in an integrated manner with the Ethereum blockchain. Developers can take advantage of Ethereum’s security by migrating their DeFi projects to their own SKALE chains to achieve high throughput and low-to-zero gas fees.    Introduction Popular blockchains that see ever-increasing user and developer activity often hit their limits in speed and capacity. At the same time, a frictionless user experience is highly needed for the blockchain community to create a Web3 future. SKALE is one of the projects built to support the exponential growth of decentralized applications (DApps) on the Ethereum network.  Learn more om Binance.com What is SKALE? SKALE is a modular layer-1 and layer-2 hybrid network made up of scalable, interconnected blockchains. It enables developers to migrate their projects from the Ethereum network onto one of the SKALE-administered blockchains to achieve high throughput with minimal gas fees.  Founded in 2018 by Jack O’Holleran and Stan Kladko, SKALE was designed to improve the overall user experience in the blockchain space. Its vision is to make blockchain applications fast, easy, and free for all users. Through its EVM (Ethereum Virtual Machine)-compatible blockchains, SKALE creates a fast, gas-free ecosystem to support the development of NFTs, games, DApps, and more.    How does SKALE work? SKALE operates in an integrated manner with Ethereum while running its own consensus mechanism. This design takes advantage of ETH’s proof-of-stake (PoS) network and combines it with SKALE’s to offer high-speed, secure, and low-to-zero gas fee transactions. It also benefits Web3 and DeFi applications in terms of cost and performance, contributing to Ethereum's ability to scale for mass adoption.   Multichain  SKALE is a multichain network. There can be a potentially unlimited number of SKALE chains that can operate as independent blockchains. These blockchains are interoperable and EVM-compatible, meaning users can deploy their existing Ethereum-based smart contracts directly to the SKALE chains and enjoy high throughput and low latency. Developers can also use SKALE chains to run smart contracts, decentralized storage, execute rollup contracts, and much more. SKALE has also modified the existing EVM functionality to allow for more smart contract use cases. For example, users can deploy SKALE chains with a FileStorage smart contract to store larger files on network nodes. The interchain messaging ability also makes it possible to transfer tokens and NFTs across different SKALE chains.  On SKALE, each blockchain is highly configurable. Users can choose the chain size, consensus protocol, virtual machine, parent blockchain, and additional security measures according to their needs. The network is expected to grow to support blockchains other than Ethereum in the future. To use a SKALE chain, developers need to pay a network subscription fee, which is delivered through a smart contract on Ethereum. The fees will be shared with validators and the SKALE community.   The SKALE network SKALE utilizes a network of decentralized nodes to create a pooled security system. Each node provides resources to multiple SKALE chains, including storage, monitors uptime and latency, and provides node owners with an interface to withdraw, deposit, stake, or claim the native utility token, SKL. Each SKALE chain added to the network can create more capacity while pooling security resources with the other sidechains. The SKALE network consists of SKALE Manager and SKALE Nodes. SKALE Manager exists on the Ethereum mainnet. It is the entry point to all other smart contracts in the SKALE ecosystem, supporting the creation and destruction of SKALE chains.  SKALE Nodes are run by users that stake a predetermined amount of SKL tokens on Ethereum and fulfill the network hardware requirements. Once admitted to the network, they can support one or several SKALE chains. The SKALE Manager will randomly assign each node to a group of 24 peer validators to ensure decentralization. The peers will then audit the node’s uptime and latency. Based on their performance at the end of each network epoch, they will be rewarded with SKL tokens.  SKALE Nodes use a virtualized subnode architecture to allow each node to run multiple SKALE chains simultaneously. The Virtualized Subnodes are designed to be dynamic in size to facilitate the network’s elasticity. Virtualized Subnodes are also responsible for running the SKALE EVM, SKALE consensus, and interchain communication.    What is SKL? SKL is the native cryptocurrency and utility token of SKALE. It has a total supply of 4.27 billion tokens.  SKL is an ERC-777 token that is backward-compatible with the ERC-20 standard. It supports token-level delegation, a secure way of non-custodial staking. Instead of locking funds in a smart contract, users can stake SKL with a delegation key from their wallets. The SKALE token is used for payments on the network, including SKALE chain subscriptions. Token holders can stake SKL as validators or delegators and earn rewards. As validators, they can run nodes to validate transactions, execute smart contracts, and secure the SKALE network. This earns them SKL rewards derived from the SKALE chain subscriptions. If SKL holders choose to stake as delegators, they will only earn a portion of the validator’s rewards. In addition, SKL gives token holders the right to participate in the governance of the SKALE network. Through on-chain voting, they can determine SKALE’s economic parameters and the direction of future development.   How to buy SKL on Binance? You can buy the SKALE token (SKL) on cryptocurrency exchanges like Binance.  1. Log in to your Binance account and click [Trade] - [Spot]. 2. Search “SKL” to see the available trading pairs. We’ll use SKL/BUSD as an example. 3. Go to the [Spot] box and enter the amount of SKL to buy. In this example, we will use a Market order. Click [Buy SKL] and the purchased tokens will be credited to your Spot Wallet. Closing thoughts As DApps usage increases, SKALE has the potential to grow exponentially with its dynamic multichain network. By offering high throughput, low costs, and low latency of transactions, SKALE could be a viable scaling solution to the Ethereum blockchain.
Analysis of Gold for July 27,.2022 - Sideways regime, watch for the breakout

Altcoins: PAX Gold (PAXG) - What Is It? | Binance Academy

Binance Academy Binance Academy 11.07.2022 16:32
TL;DR PAX Gold (PAXG) is an ERC-20 stablecoin backed by physical gold reserves in secured London vaults. PAXG lowers the entry barrier to gold investment by allowing users to own fractions of physical gold without the burden of storage and transportation fees. Users can trade PAXG as a digital asset on centralized crypto exchanges and DEXs.    Introduction Gold has maintained its status as a valuable commodity for thousands of years. It’s used to make jewelry, store value, and even hedge against inflation. However, buying physical gold can be expensive and cumbersome for the average retail investor. For one, storing gold requires a safe location, such as a bank vault. Moreover, transporting gold from one location to another can be a complex task due to its heavy weight. Paxos Trust Company aims to address these challenges with PAX Gold (PAXG) — tokenized gold that lives on the blockchain.  Learn more on Binance.com What is PAX Gold (PAXG)? PAX Gold (PAXG) is an ERC-20 stablecoin backed by physical gold reserves, held in custody by the Paxos Trust Company. Each PAX Gold token equals one troy ounce of a 400-ounce London Good Delivery gold bar housed in secured gold vaults, such as Brink’s. Since PAXG represents physical gold, its value is tied directly to the real-time market value of that physical gold. PAXG is regulated and approved by the New York State Department of Financial Services. To ensure that Paxos maintains its reserves, a third-party auditing firm performs monthly checks to verify that Paxos’ gold reserve matches the supply of PAXG tokens, and these attestation reports are released on Paxos’ official website. PAXG’s developers conduct regular smart contract audits to identify potential bugs and vulnerabilities. In addition, all Paxos customers’ assets, including PAXG, are protected from bankruptcy and held separately from company assets.   How does PAXG work? PAX Gold runs on the Ethereum blockchain. As an ERC-20 token, PAXG is compatible with Ethereum-based wallets, can be integrated with DeFi DApps and DEXs on Ethereum, and can be traded on cryptocurrency exchanges like Binance.  Compared to owning physical gold bars, owning PAXG doesn’t require any vault storage or custody fees. Each PAXG transaction only incurs a small transaction fee of 0.02% and some ETH as gas fees. It lowers the entry barrier to gold investment by letting users own fractions of physical gold bars without the burden of fees, storage, or transportation costs.  PAXG tokens are allocated serial numbers that match those of individual gold bars. Holders can find their physical gold’s serial number, value, and other characteristics by entering their Ethereum wallet address on the PAXG lookup tool. They can also redeem their PAXG anytime for fiat currency, another crypto asset, or allocated and unallocated gold bullion bars from gold retailers at the current market price of gold.   What’s the difference between PAXG and gold ETFs? Gold exchange-traded funds (ETFs) track the value of the underlying gold. They only give investors exposure to the price of gold, but not the ownership of it. An investor in possession of a gold ETF shares is a party in a contract that represents the entitlement to a specific percentage of the pooled gold. Gold ETFs cannot substitute for full ownership of gold. For example, in times of crisis and volatility, the contract value could be lower than the underlying value of the gold it represents by the time of settlement. PAXG, in contrast, is a digital representation of gold. Each PAXG token represents one fine troy ounce of gold housed in secured London vaults that can be identified by serial numbers. Trading PAXG doesn’t take days to settle as could be the case when trading physical gold bars. As PAXG exists on Ethereum as a ERC-20 token, PAXG can be traded with a near-instant settlement.   How to buy PAXG on Binance? You can buy PAX Gold (PAXG) on crypto exchanges like Binance.  1. Log in to your Binance account and click [Trade] - [Spot]. 2. Search “PAXG” to see the available trading pairs, including PAXG/BUSD, PAXG/USDT, PAXG/BNB, and PAXG/BTC. 3. Go to the [Spot] box and enter the amount of PAXG to buy. In this example, we will use a Market order. Click [Buy PAXG], and the purchased PAXG will be credited to your Spot Wallet. Closing thoughts While various crypto investment options have gained popularity in recent years, physical commodities are still common in traditional investors’ portfolios. PAXG is looking to offer a blockchain-powered alternative to this established market by utilizing the speed and liquidity of crypto assets.
Binance Academy summarise year 2022 featuring The Merge, FTX and more

DeFi 2.0 - What Is It? | Binance Academy

Binance Academy Binance Academy 08.07.2022 18:40
TL;DR DeFi 2.0 is a movement of projects improving on the problems of DeFi 1.0. DeFi aims to bring finance to the masses but has struggled with scalability, security, centralization, liquidity, and accessibility to information. DeFi 2.0 wants to combat these and make the experience more user-friendly. If successful, DeFi 2.0 can help reduce the risk and complications that discourage crypto users from using it. We already have a variety of DeFi 2.0 use cases working today. Some platforms allow you to use your LP tokens and yield farm LP tokens as collateral for a loan. This mechanism lets you unlock extra value from them while still earning pool rewards. You can also take out self-repaying loans where your collateral generates interest for the lender. This interest pays off the loan without the borrower making interest payments. Other use cases include insurance against compromised smart contracts and impermanent loss (IL). A growing trend in DeFi 2.0 is DAO governance and decentralization. However, governments and regulators may eventually affect how many projects are run. Keep this in mind when investing, as offered services might have to change.   Introduction It's been almost two years since DeFi's (Decentralized Finance) rise in 2020. Since then, we've had incredibly successful DeFi projects like UniSwap, a decentralization of trading and finance, and new ways to earn interest in the crypto world. But just like we experienced with Bitcoin (BTC), there are still problems to solve in such a new field. As a response, the term DeFi 2.0 has become popular to describe a new generation of DeFi decentralized applications (DApps). As of December 2021, we're still waiting for the full flood of DeFi 2.0, but we can already see its beginnings. Understand what to look out for in this article and why DeFi 2.0 is needed to solve outstanding problems in the DeFi ecosystem.   Learn more on Binance.com   What is DeFi 2.0? DeFi 2.0 is a movement trying to upgrade and fix the problems seen in the original DeFi wave. DeFi was revolutionary in providing decentralized financial services to anyone with a crypto wallet, but it still has weaknesses. Crypto has already seen this process with second-generation blockchains like Ethereum (ETH) improving on Bitcoin. DeFi 2.0 also will need to react to new compliance regulations that governments plan to introduce, such as KYC and AML. Let's look at an example. Liquidity pools (LPs) have proved hugely successful in DeFi, as it allows liquidity providers to earn fees for staking pairs of tokens. However, if the price ratio of the tokens changes, liquidity providers risk losing money (impermanent loss). A DeFi 2.0 protocol could provide insurance against this for a small fee. This solution provides a greater incentive to invest in LPs and benefits users, stakers, and the DeFi space as a whole.   What are the limitations of DeFi? Before going deeper into DeFi 2.0 use cases, let's explore the problems it's trying to resolve. Many of the issues here are similar to the problems blockchain technology and cryptocurrencies face in general: 1. Scalability: DeFi protocols on blockchains with high traffic and gas fees often provide slow and expensive services. Simple tasks can take too long and become cost-inefficient. 2. Oracles and third-party information: Financial products depending on external details need higher quality oracles (third-party sources of data). 3. Centralization: An increasing amount of decentralization should be a goal in DeFi. However, many projects still don’t have DAO principles in place. 4. Security: Most users don't manage or understand the risks present in DeFi. They stake millions of dollars in smart contracts that they don't fully know are safe. While there are security audits in place, they tend to become less valuable as updates occur. 5. Liquidity: Markets and liquidity pools are spread across different blockchains and platforms, splitting liquidity. Providing liquidity also locks up funds and their total value. In most cases, tokens staked in liquidity pools can't be used anywhere else, creating capital inefficiency.   Why does DeFi 2.0 matter? Even for HODLers and experienced crypto users, DeFi can be daunting and challenging to understand. However, it aims to lower barriers to entry and create new earning opportunities for crypto holders. Users who might not get a loan with a traditional bank might do with DeFi. DeFi 2.0 matters because it can democratize finance without compromising on risk. DeFi 2.0 also attempts to solve the problems noted in the previous section, improving the user's experience. If we can do this and provide better incentives, then everyone can win.   DeFi 2.0 use cases We don't have to wait for DeFi 2.0 use cases. There are already projects providing new DeFi services across many networks, including Ethereum, Binance Smart Chain, Solana, and other smart contract capable blockchains. Here we’ll look at some of the most common: Unlocking the value of staked funds If you've ever staked a token pair in a liquidity pool, you will have received LP tokens in return. With DeFi 1.0, you can stake the LP tokens with a yield farm to compound your profits. Before DeFi 2.0, this was as far as the chain goes for extracting value. Millions of dollars are locked in vaults providing liquidity, but there is potential to further improve capital efficiency. DeFi 2.0 takes this a step further and uses these yield farm LP tokens as collateral. This could be for a crypto loan from a lending protocol or to mint tokens in a process similar to MakerDAO (DAI). The exact mechanism changes by project, but the idea is that your LP tokens should have their value unlocked for new opportunities while still generating APY. Smart contract insurance Doing enhanced due diligence on smart contracts is difficult unless you're an experienced developer. Without this knowledge, you can only partially evaluate a project. This creates a large amount of risk when investing in DeFi projects. With DeFi 2.0, it's possible to get DeFi insurance on specific smart contracts. Imagine you're using a yield optimizer and have staked LP tokens in its smart contract. If the smart contract is compromised, you could lose all your deposits. An insurance project can offer you a guarantee on your deposit with the yield farm for a fee. Note that this will only be for a specific smart contract. Typically you won't get a payout if the liquidity pool contract is compromised. However, if the yield farm contract is compromised but covered by the insurance, you will likely get a payout. Impermanent loss insurance If you invest in a liquidity pool and start liquidity mining, any change in the price ratio of the two tokens you locked may lead to financial losses. This process is known as impermanent loss, but new DeFi 2.0 protocols are exploring new methods to mitigate this risk. For example, imagine adding one token to a single-sided LP where you don’t need to add a pair. The protocol then adds their native token as the other side of the pair. You will then receive fees paid from swaps in the respective pair, and so will the protocol. Over time, the protocol uses their fees to build up an insurance fund to secure your deposit against the effects of impermanent loss. If there are not enough fees to pay off the losses, the protocol can mint new tokens to cover them. If there is an excess of tokens, they can be stored for later or burned to reduce supply. Self-repaying loans Typically, taking out a loan involves liquidation risk and interest payments. But with DeFi 2.0, this doesn't need to be the case. For example, imagine you take a loan worth $100 from a crypto lender. The lender gives you $100 of crypto but requires $50 as collateral. Once you provide your deposit, the lender uses this to earn interest to pay off your loan. After the lender has earned $100 with your crypto plus extra as a premium, your deposit is returned. There’s no risk of liquidation here either. If the collateral token depreciates in value, it just takes longer for the loan to be paid off.   Who's in control of DeFi 2.0? With all these features and use cases, it's worth asking who controls them? Well, there has always been a decentralization trend with blockchain technology. DeFi is no different. One of DeFi 1.0's first projects, MakerDAO (DAI), set a standard for the movement. Now, it's increasingly common for projects to offer their community a say.  Many platform tokens also work as governance tokens that give their holders voting rights. It's reasonable to expect that DeFi 2.0 will bring more decentralization to the space. However, the role of compliance and regulation is becoming more important as they catch up with DeFi.   What are the risks of Defi 2.0, and how to prevent them? DeFi 2.0 shares many of the same risks as DeFi 1.0. Here are some of the main ones and what you can do to keep yourself safe. 1. Smart contracts you interact with could have backdoors, weaknesses, or be hacked. An audit is never a guarantee of a project's safety either. Do as much research as possible on the project and understand that investing always involves risk. 2. Regulation could affect your investments. Governments and regulators worldwide are taking an interest in the DeFi ecosystem. While regulation and laws can bring security and stability to crypto, some projects may have to change their services as new rules as created. 3. Impermanent loss. Even with IL insurance, it still is a large risk for anyone who wants to get involved with liquidity mining. The risk can never be totally minimized. 4. You may find accessing your funds difficult. If you are staking through a DeFi project's website UI, it might be a good idea to locate the smart contract on a blockchain explorer as well. Otherwise, you won't be able to withdraw if the website goes down. However, you will need some technical expertise to interact directly with the smart contract.     Closing thoughts While we already have many successful projects in the DeFi space, we're yet to see the full potential of DeFi 2.0. The topic is still complicated to most users, and no one should use financial products they don't fully understand. There is still work to be done in creating a simplified process, especially for new users. We've seen success in new ways to reduce risk and earn APY, but we'll have to wait and see if DeFi 2.0 fully delivers on its promises.   Disclaimer: This article is for educational purposes only. Binance has no relationship to these projects, and there is no endorsement for these projects. The information provided through Binance does not constitute advice or recommendation of investment or trading. Binance does not take responsibility for any of your investment decisions. Please seek professional advice before taking financial risks.
Binance Academy summarise year 2022 featuring The Merge, FTX and more

Binance Academy: Investement DAOs - What Are They? DAO And Investement DAOs Explained

Binance Academy Binance Academy 06.07.2022 13:24
TL;DR An investment DAO is a decentralized organization that invests funds as a group. Anyone who owns the investment DAO’s governance token can participate in the decision-making process. The more of the token you hold, the larger your voting power. Investment DAOs fund their treasury through token sales, issuing NFTs, and rendering revenue-generating services. The legality of investment DAOs will depend on the laws of your jurisdiction.   Introduction With its decentralized capabilities, blockchain has undoubtedly changed the face of investing forever. Entrepreneurs and startups no longer need to solely rely on venture capital firms, seed rounds, and traditional fundraising models. It's relatively simple to create your own token and use one of the various on-chain methods for selling your project token.  It's not just fundraisers who have experienced a significant change either: Investors have too. With investment DAOs, we now have a new approach to funding projects that's easily accessible to even the smallest of investors. Learn more on Binance.com What is an investment DAO? An investment DAO allows its members to decide when and where to invest its funds. This could be in real estate, DeFi investment vehicles, or any other asset the DAO chooses to invest in. An investment DAO uses the Decentralized Autonomous Organization (DAO) model to democratize and decentralize the whole investment process.  Traditional models put investment power in the hands of a relatively small group of money managers of VC funds and family offices, and hedge funds. Alternatively, investment DAOs offer anyone holding its governance token the ability to make decisions regarding its investments. Instead of using the expertise of a narrow group of individuals, this model prioritizes the wisdom of the crowd when making investment decisions.   What is a DAO? A Decentralized Autonomous Organization (DAO) is an organization governed by smart contracts, self-executing pieces of code that run on a blockchain. DAO members deliberate and make decisions that are then executed using these smart contracts. A DAO, in effect, can function without human maintenance and run continuously. Even if DAO members lose interest or abandon the project, the DAO's framework will still live on due to its immutable nature. The most common way DAOs make decisions is through voting mechanisms based on governance tokens. The more of the governance token you own, the more voting power you have. Some DAOs allow any member to make a proposal, while others may limit this right to a specific group. DAOs are used commonly to manage DeFi (Decentralized Finance) projects, blockchains, and other protocols in the crypto world.   How do investment DAOs work? An investment DAO will usually have a general goal or principle it works by. Some invest in specific industry segments like GameFi or DeFi protocols for example. Investment decisions are made according to these principles using a proposal mechanism. Holders of the investment DAO's governance token have the ability to make proposals. Some DAOs will limit this to holders of a certain amount of token or some other subsection of the group. This could be to stop spam or only allow members with a high enough stake to suggest investment decisions. Once the proposal is made, users will either stake their tokens or use a snapshot mechanism to exercise their voting rights. Snapshot looks at the number of governance tokens in each wallet and distributes voting rights based on that without locking the tokens. This helps avoid users swaying the vote by buying more tokens once they've seen a proposal. Once voting is over, the decision is implemented according to the results. Profits from investments are distributed either via airdrops to governance token holders or through a staking mechanism. By staking your governance token, you’ll then receive a share of rewards that you can withdraw from the smart contract.   Investment DAOs often run active community channels on Discord and Telegram to help organize, inform, and facilitate their proposals. A DAO is only as successful as its community, so it needs to maintain a healthy and active membership.   Where does an investment DAO get its funds from? There are several ways an investment DAO can build up its treasury. The most common method is a governance token sale. A new DAO will mint its token and offer it to the market using one of the various sale mechanisms available. Investors will purchase it either for speculative purposes, voting rights, or both.  A DAO set up by experienced investors with a solid investment strategy would likely attract a large community of potential DAO members. After selling their governance token for a cryptocurrency like bitcoin (BTC), ether (ETH), BUSD, or other stablecoin, the DAO would then have funds in its treasury. They may also keep some governance tokens in the treasury for future sales. Another popular method is the issuance and sale of non-fungible tokens, or NFTs. These can be purely collectible or also offer some other utility. For example, an NFT could be issued that provides extra governance rights. Finally, some investment DAOs will already have treasury funds and digital assets from previous successes. For example, a DeFi project may already have revenue available from its services offered. Its DAO could then decide to invest the money. However, when we refer to investment DAOs, we usually mean ones that deal only with investments.   Are investment DAOs legal? The answer here will depend on your jurisdiction. You may also find that there are no specific regulations when it comes to investment DAOs, making their status challenging to determine. To get a rough idea, you should first look if the investment DAO's token is adequately regulated. It could perhaps be categorized as a security in your country and need specific licensing. It may also fall under some other crypto regulation. The concept of investing together as a collective isn't new, and many countries already have regulations for investment clubs. The IRS, for example, has specific requirements for groups who collectively invest in order to share the profits. Whether or not an investment DAO would be regulated the same must be taken up with your local regulator.   What are the risks of investment DAOs While investment DAOs successfully decentralize power according to token ownership, risks are still involved. Don't forget that holding any cryptocurrency has risks, and investment DAOs also have specific risks associated with them too: 1. Smart contract failure - The smart contracts running the DAO may fail due to a hack, exploit, or faulty code. This could break the mechanisms needed to run efficiently and manage the DAO's funds. 2. Bad investment decisions - The investment DAO could invest in projects that provide negative ROI (return on investment). After all, there is no guarantee that a majority decision is always the best one. 3. Fund mismanagement - Investment DAOs need to maintain their treasury properly. If they don't diversify their portfolio or manage it well, the DAO's investment funds could be at high risk.    Traditional VCs vs. investment DAOs There are a variety of advantages and disadvantages when comparing VCs and investment DAOs head-to-head. While an investment DAO has opened up a traditionally closed industry, its “gray” status makes it difficult for investors and projects raising funds to work with. Due to the stringent requirements in traditional investments, most investment DAOs would only be able to work with other crypto projects in practice. However, when it comes to Web3, investment DAOs have some significant advantages. Traditional VC firms have shown great interest in the potential of Web3 but typically demand a lot in return for their investment and expertise. But when it comes to Web3 and blockchain technology, VCs often don't know as much as their decentralized counterparts. Therefore, funding from an investment DAO could provide the same principle, crowdsourced expertise, and a more equitable deal. For more traditional industries, the value added that a VC can bring is huge. These firms often have established networks and a range of supportive services. Above all, they also have the legal and regulatory backing needed to operate with peace of mind. Closing thoughts Investment DAOs have become a hot topic since the last crypto boom in 2020/2021. The idea that the longstanding VC model can be disrupted is attractive to small investors and blockchain fans. We're yet to see how the relationship between the two types of players will develop as the concept is still a young one. As always, if you decide to experiment with investment DAOs, understand the risks fully and how that fits in with your portfolio strategy.
Worrisome Growth Signals in Eurozone PMI: Recession Risks Loom Amid Persistent Inflation Pressures

Binance Academy: Initial DEX Offering - IDO - What Is It?

Binance Academy Binance Academy 05.07.2022 23:14
TL;DR An IDO is a crypto token offering run on a Decentralized Exchange (DEX). Liquidity pools (LP) play an essential role in IDO's by creating liquidity post-sale. A typical IDO lets users lock funds in exchange for new tokens during the token generation event. Some of the raised funds are then added with the new token to an LP before being returned later to the project. IDOs provide a cheap and simple way for projects to distribute their tokens. IDOs have been around for a while, but they are still evolving and providing new models like the Initial Farm Offering (IFO). We may also see increasing KYC requirements as the area becomes more regulated. If you want to enter an IDO, you’ll need a digital wallet like MetaMask and some crypto to subscribe and pay transaction fees. Always do your own research on the project and invest via a trusted DEX. This includes looking closely at the IDO's mechanics and the project's team and tokenomics. As always, only invest what you are comfortable losing as token offerings involve high risk.   Introduction A token offering is usually an exciting opportunity for investors in the crypto ecosystem. The chance to buy a token at its launch price can be extremely rewarding. But this is just one side of the story. Looking back at the ICO (Initial Coin Offering) craze of 2017 on Ethereum (ETH), it wasn't all entirely positive. Scams and rug pulls were widespread, and investors often suffered big losses. Since then, the crypto community has developed alternative token offering methods, including the Initial Exchange Offering (IEO), Initial DEX Offering (IDO), and Security Token Offering (STO), among others. IDOs have become a popular choice, but how does this differ from an ICO, and is it safer for investors to use?   Learn more on Binance.com   What is a token offering? A token offering is a fundraising method where a project or startup supplies a new cryptocurrency for sale. Crowdfunding methods can vary, such as using a centralized crypto exchange platform to manage the process (IEO), working with a local financial regulator (STO), or simply doing it alone (ICO). Some investors purchase the coins for their utility, while others do it for speculation. For example, you might use the coin for farming, staking in a governance mechanism, or paying for transaction fees.   How does an IDO work? An IDO uses a decentralized exchange (DEX) to facilitate the token sale. A crypto project provides their tokens to the DEX, users commit their funds through the platform, and the DEX completes the final distribution and transfer. These processes are automated and occur via smart contracts on the blockchain. The rules and stages of an IDO depend on the DEX running it, but there are some common methods: 1. After a vetting process, a project is accepted to run an IDO on a DEX. They offer a supply of tokens for a fixed price, and users lock their funds in return for these tokens. Investors will receive the tokens during the token generation event (TGE) later.  2. Usually, there is an investor whitelist. You might have to complete marketing tasks to join the list or simply provide your wallet address. 3. Some of the funds raised are used to create a liquidity pool with the project's token. The rest of the funds are given to the team. Investors can then trade the token after the TGE. Typically, the provided liquidity is locked for a certain period. 4. At the TGE, the tokens are transferred to the user, and the LP opens for trading.   What’s the future of the IDO model? While the model above is a typical IDO, token offerings are always changing. For example, we also have the IFO (Initial Farm Offering) model, which is increasingly popular. It's hard to say whether it can be called a traditional IDO, but it depends on the same core concepts: liquidity pools and decentralized exchanges. Rather than lock their tokens directly, investors must first stake in a Decentralized Finance (DeFi) LP to earn LP tokens. For example, a project wanting to sell its token for BNB in an IFO on PancakeSwap will require investors to stake BNB and CAKE in the BNB-CAKE LP. BNB-CAKE LP tokens are then locked for the new tokens, and the project receives the BNB while the CAKE is burned. The number of tokens you get will depend on how many participants there are in the sale, and any excess funds staked will be returned to you. There may even be measures in place to make it fairer for small investors to get a share of the IDO, such as the [Basic Sale] and [Unlimited Sale] features on the PancakeSwap IFO below.     Another possible change to IDOs may be the requirement of KYC (Know Your Customer) and AML (Anti-Money Laundering) processes. Financial regulators worldwide are taking a bigger interest in DeFi and its regulatory status. AML and KYC are now standard for centralized exchanges, and DEXs may also be subject to the same rules in the future.   What are the advantages of an IDO? Over time, token offerings have mostly become fairer and more secure for investors. IDOs have some distinct advantages that support this: 1. You don't need to deal directly with a project and trust their smart contracts. A reliable IDO platform will have several successful sales completed. If the smart contracts are the same, you can have some trust in the offering. 2. Immediate liquidity provided post-sale. IDOs will lock up some of the funds raised in liquidity pools to create a liquid market post-sale. This helps reduce slippage and volatility. 3. No sign-ups are required. You only need a wallet and funds to participate in the sale, and personal details aren't required. This makes it open to all kinds of users. However, the lack of KYC or AML processes can also be seen as a disadvantage (more on this below). 4. IDOs are affordable and accessible for projects. It's often easier and cheaper for a small, less-known project to launch their token through a DEX than a large, centralized exchange. 5. IDOs often have anti-whale measures, meaning no single investor can buy a large number of tokens.   What are the disadvantages of an IDO? Some of the strengths of the IDO also bring about some of its weaknesses. These problems stem mainly from the decentralized and anonymous aspects of an IDO. 1. No KYC or AML. Investors and projects are protected when proper checks are completed. These measures help avoid the laundering of illegal funds and the evasion of economic sanctions. For example, certain countries may not legally participate in an IDO if the token counts as a security. 2. Less due diligence of projects. It's much easier for an unreputable project to distribute their token through an IDO than it is through an IEO with a large, regulated exchange.   What’s the difference between an IDO, IEO, and ICO? The methods used in an ICO, IDO, and IEO are quite different, even though the results are mainly the same. Here’s a quick overview of the key differences:   IDO IEO ICO Vetting process DEX vets the project CEX vets the project No vetting process as the project runs the sale themselves Fundraising DEX handles investors’ funds CEX handles investors’ funds The project handles investors’ funds Smart contracts DEX creates and runs smart contracts CEX creates and runs smart contracts The project creates and runs smart contracts Token listing Liquidity pools open on the DEX  Exchange lists the token The project has to find an exchange to list on KYC/AML No Yes No   Where can I find IDOs? The first place to find an IDO is from the project itself. Getting involved with the project’s community and following their social media channels is a good way to start. You can also check DEXs to see their list of upcoming IDOs, such as PancakeSwap or DODO. If you want an overview of all upcoming IDOs, CoinMarketCap has a list of token offerings available to view. Not all of these will be IDOs, but CoinMarketCap clearly labels which sales are.   How to enter an IDO? To enter an IDO, you will need a crypto wallet that can connect to DApps like MetaMask or Binance Chain Wallet. You will also need some crypto to buy the tokens and to pay for transaction fees. The exact crypto you'll need will depend on the sale, and could even be LP tokens if you’re taking part in an IFO. After you’ve prepared your wallet, you’ll need to connect to the IDO DApp using the connect button, usually found in the top right corner. Here’s an example of what one looks like:     You’ll now be given specific instructions on how to lock your funds in preparation for the token generation event. Make sure you also have enough funds to pay your transaction fees. In most cases, once the subscription period is over, the tokens will be transferred to your wallet. Some sales might, however, lock or stake your new tokens for a certain period. Make sure to read the details before participating in an IDO.   Tips to stay safe in an IDO Just like any investment, there are easy, practical tips to help keep yourself as safe as possible: 1. Use the correct link to subscribe to the IDO. Scammers will take advantage of the excitement and hype of an IDO and create fake subscription pages. Any crypto you transfer to a scam page will be permanently lost. 2. Use a trusted DEX Launchpad. There are already many trustworthy DEXs where you can participate in IDOs, including PancakeSwap and BakerySwap. Using these gives you the best chance of receiving your tokens successfully in the sale. 3. Research the project you're investing in. Is it from an already known and trusted team? Will the funds raised be vested? Is there already a product to use? Questions like these can help you determine the likelihood of a possible rug pull. 4. Check the IDO terms and conditions. There may be a delay in when you get your tokens, or they could even be staked and locked for some time. Almost anything is possible depending on the project's tokenomics, and you should thoroughly understand them. 5. Invest only what you can afford to lose. Token sales have a reputation for being hugely volatile. It can be easy to get carried away and invest more than you should. But don't forget, sales are still risky, and even with sound research, you could still be the victim of a scam, fraud, or rug pull.   Popular IDO launchpad platforms There’s a large number of DEXs across different blockchains who offer IDO services. A simple way to search through them is through CoinGecko’s list of Top Launchpad Coins by Market Capitalization. Any DEX that has its own coin, which is almost all of them, is present on the list. However, don’t forget that a large market capitalization doesn’t necessarily mean the DEX is reliable or trustworthy. You should use this information together with other fundamentals before choosing a DEX to use for an IDO.     Conclusion With their mix of ease-of-use, affordability, and accessibility, IDOs have become a standard fundraising model for many new projects in the crypto market. In fact, token offerings have become an industry in itself. To summarize, you're usually safer taking part in a sale through a Decentralized Liquidity Exchange than a project. Nevertheless, a huge part of success in an IDO is picking the right project. For this, nothing beats good, old-fashioned research in the crypto space.
Binance Academy summarise year 2022 featuring The Merge, FTX and more

Binance Academy: Sandbox (SAND), Decentraland (MANA) ENJIN (ENJ) And Bloktopia (BLOK) Explained

Binance Academy Binance Academy 29.06.2022 15:33
Disclaimer: This article is for educational purposes only. Binance has no relationship to these projects, and there is no endorsement for these projects. The information provided through Binance does not constitute advice or recommendation of investment or trading. Binance does not take responsibility for any of your investment decisions. Please seek professional advice before taking financial risks.   TL;DR The metaverse is growing at a rapid rate. Projects keep developing and connecting to help bring more aspects of our digital life together. Blockchain is already playing a critical role in this development. Binance Smart Chain is home to a large number of metaverse projects. These include RPG games like Cyber Dragon and Alien worlds, the metaverse universe SecondLive, and even a player-owned Casino called decentral.games. Collectible card games like TopGoal also have a place in the metaverse. On the Ethereum blockchain, Decentraland and the Sandbox provide similar metaverse experiences where users can create a digital identity, purchase land, and trade NFTs on NFT marketplaces. Their combination of work, life, and play even lets players take part in play-to-earn DeFi economies. By interacting with and playing the game, users have the potential to generate an income. Bloktopia provides a similar experience set across 21 floors of a digital skyscraper. Users can trade and rent real-estate space on each floor to generate an income. While the Enjin project doesn’t yet offer a 3D virtual reality universe to explore, it does provide the tools for creating in-game NFT assets. NFTs are another important part of the metaverse as they can create digital collectibility. Through Enjin, users create liquid NFTs that can be broken down into ENJ tokens at any point.   Introduction 2021 has been a massive year for blockchain and crypto. From meme coins to bull runs and NFTs, the industry has constantly made headlines. The year's final half has brought us another trend: the metaverse. With the goal of combining our real-world social lives, work, and immersive technology, the metaverse has captured the public's imagination. Even though the metaverse is still in its early days, crypto is already playing a central role. Let's dive into some of the blockchain projects helping bring about this new digital future.   Learn more on Binance   Why are crypto and blockchain important for the metaverse? To understand how important crypto and blockchain are for the metaverse, let's briefly recap what the metaverse is. The metaverse is a connected, online universe explorable via 3D avatars. Users can work, socialize, create, and learn all in one place. Think of it as the next evolution of the internet experience. While the web has PayPal and card payments, the metaverse has crypto to help create a digital economy. Blockchain has proven to be a useful technology for six key metaverse areas: digital proof of ownership, digital collectibility, transfer of value, governance, accessibility, and interoperability. Blockchain technology provides a transparent and cost-effective solution, making it an ideal fit for the metaverse. You can explore these six areas in more detail by heading to our What Is the Metaverse?. Let's take a look at how it's applied to metaverse projects across different blockchains.   Metaverse projects on Binance Smart Chain A huge amount of development has occurred on Binance Smart Chain when it comes to the metaverse. Projects range from collectible card games with real-life players like Top Goal to RPG-style universes in Cyber Dragon and Alien Worlds. There is even a player-owned casino, decentral.games, and a classic metaverse VR project hosting events called SecondLive. You can read our selection of 5 BSC Metaverse Projects You Should Know to find out more about what BSC has to offer.   What is The Sandbox (SAND)? The Sandbox is a blockchain game where users explore a virtual world containing NFTs (non-fungible tokens), user-created environments, and other content. Founded as a mobile game in 2011, The Sandbox has developed into a complex game on Ethereum using Ether (ETH), and the token SAND to power its in-game economy. Players create their own avatar and digital identity, a key concept for the metaverse. An avatar can be associated with a crypto wallet to manage a player's NFTs, SAND tokens, and other blockchain assets. A player can even create games and virtual items using the VoxEdit and Game Maker tools. These powerful programs can create complex and professional video game assets, which you can then turn into NFTs. As users can trade these items, this has developed a play-to-earn model where users can make extra income by playing The Sandbox.     What is Decentraland (MANA)? Decentraland is a 3D universe where players develop their plots of land, host events, create content, and engage in other social activities. The core economy of Decentraland is based on blockchain to establish digital identities, ownership, and rarity for unique items. It's one of the most famous and well-known projects predating the big metaverse craze in late 2021. Founded in 2016, Estaban Ordano and Ari Meilich took a basic 2D game and grew it into a large world with NFTs worth hundreds of thousands of dollars. The project also has its own ERC-20 utility token MANA. So how does Decentraland slot into the metaverse? Well, it ticks a lot of the metaverse boxes: a 3D interface, a digital economy, social elements, and in-game events. With more projects connecting to Decentraland, it also has the aspect of a metaverse hub. Decentraland is also particularly famous for its virtual real estate NFT called LAND. Along with providing voting power in Decentraland's decentralized autonomous organization (DAO), LAND has seen a huge rise in its price, making it popular among traders and investors.     What is Enjin (ENJ)? Enjin is a blockchain platform focused on the creation of NFTs used as in-game items. The project has released software development kits (SDKs) to make generating Ethereum-based NFTs simple for the average user. As NFTs have already become a key part of the metaverse, Enjin has looked to create a more secure way for people to mint them. A common complaint about NFTs is that they can be illiquid. You need to find a buyer for your NFT, which can take time. However, an Enjin NFT can always be melted in return for ENJ coins. This means that NFTs will always have some value, as long as the price of ENJ doesn’t reach zero. Since there's no need to wait for a buyer, converting NFTs to ENJ can provide instant liquidity. By helping support digital collectability and scarcity, Enjin looks to be a useful part of the metaverse.   What is Bloktopia (BLOK)? Bloktopia is another VR metaverse game set in a skyscraper with 21 floors. Similar to Decentraland and The Sandbox, Bloktopia aims to be a hub for events, socializing, work, and more. The 21 floors represent Bitcoin's maximum supply of 21 million BTC. The project uses the Polygon blockchain to support its four main aspects: learn, earn, play, create. 1. Learn - Bloktopia will act as a gateway for users to learn about blockchain and how it's helping power the metaverse. It provides a more accessible and interactive way to learn about crypto. 2. Earn - Bloktopia embraces the play-to-earn model with its native token BLOK, virtual real-estate known as Reblok, and advertising opportunities with Adblok. 3. Play - Users should be able to socialize with friends online and enjoy a wide variety of user-build games and content. 4. Create - Blocktopia provides the tools for its gamers to create environments and even digital ad spaces.     Play-to-earn has become a hot topic in the gaming metaverse. The idea of earning income through playing and interacting with games is hugely attractive. While Decentraland and The Sandbox present a simple method for selling real estate, Bloktopia takes it further. Each Reblok floor can be rented to tenants or hired for a single event. Users can also generate advertising revenue as other players spend time on their level.     Closing thoughts There is still a long way to go in the development of the metaverse. If you play the projects for yourself, you can see that the mechanics, look, and feel are quite basic. Many are still in the planning stages and not even available to test. However, one thing for certain is that the number of new projects keeps increasing. No matter if it’s a large gaming company or a small metaverse crypto project, development is happening rapidly. The projects mentioned above are only a starting place, so regularly check for updates and news to keep up to date with the evolving metaverse.   Disclaimer: This article is for educational purposes only. Binance has no relationship to these projects, and there is no endorsement for these projects. The information provided through Binance does not constitute advice or recommendation of investment or trading. Binance does not take responsibility for any of your investment decisions. Please seek professional advice before taking financial risks.
Cross-Chain Interoperability Solutions Have The Potential To Significantly Improve

Blockchain Bridge - What Is It?

Binance Academy Binance Academy 27.06.2022 09:59
TL;DR A blockchain bridge is a protocol connecting two blockchains to enable interactions between them. If you own bitcoin but want to participate in DeFi activity on the Ethereum network, a blockchain bridge allows you to do that without selling your bitcoin. Blockchain bridges are fundamental to achieving interoperability within the blockchain space.   Introduction To understand what a blockchain bridge is, you need to first understand what a blockchain is. Bitcoin, Ethereum, and BNB Smart Chain are some of the major blockchain ecosystems, all relying on different consensus protocols, programming languages, and system rules.  A blockchain bridge is a protocol connecting two economically and technologically separate blockchains to enable interactions between them. These protocols function like a physical bridge linking one island to another, with the islands being separate blockchain ecosystems. Thus, blockchain bridges enable what is called interoperability, meaning that digital assets and data hosted on one blockchain can interact with another. Interoperability is the cornerstone of the internet: Machines worldwide use the same set of open protocols to talk to each other. In the blockchain space, where there are many distinct protocols, blockchain bridges are essential to enabling a similar ease of exchanging data and value.  What’s a Blockchain Bridge? | Binance Academy     Why do we need blockchain bridges?   As the blockchain space developed and expanded, one of the most significant limitations has been the lack of capacity of different blockchains to work together. Each blockchain has its own rules, tokens, protocols, and smart contracts. Blockchain bridges help break up these silos and bring the isolated crypto ecosystems together. An interconnected network of blockchains can allow tokens and data to be exchanged between them smoothly.  Aside from enabling cross-chain transfers, blockchain bridges provide other benefits. They allow users to access new protocols on other chains and enable developers from different blockchain communities to collaborate. In other words, blockchain bridges are a critical component of an interoperable future of the blockchain industry.   How do blockchain bridges work?  The most common use case for a blockchain bridge is token transfer. For example, you want to transfer your bitcoin (BTC) to the Ethereum network. One way is to sell your BTC and then purchase ether (ETH). However, this would incur transaction fees and expose you to price volatility.  Alternatively, you can achieve this objective by using a blockchain bridge without selling your crypto. When you bridge 1 BTC to an Ethereum wallet, a blockchain bridge contract will lock your BTC and create an equivalent amount of Wrapped BTC (WBTC), which is an ERC20 token compatible with the Ethereum network. The amount of BTC you want to port gets locked in a smart contract, and the equivalent tokens on the destination blockchain network are issued or minted. A wrapped token is a tokenized version of another cryptocurrency. It’s pegged to the value of the asset it represents and typically can be redeemed for it (unwrapped) at any point. From a user’s perspective, this process takes a few steps. To use the Binance Bridge, for example, you will first select the chain you’d like to bridge from and specify the amount. You will then deposit the crypto to an address generated by Binance Bridge. After the crypto is sent to the address during the time window, Binance Bridge will send you an equivalent amount of wrapped tokens on the other blockchain. If you want to convert your funds back, you simply go through the reverse process.   What types of blockchain bridges are there?  Blockchain bridges can be categorized according to their functions, mechanisms, and levels of centralization.  Custodial vs. non-custodial bridges One common categorization is to divide blockchain bridges into two kinds: custodial (centralized) and non-custodial (decentralized).  Custodial bridges require users to place their trust in a central entity to properly and safely operate the system. Users should do extensive research to ensure that this entity is trustworthy.  Non-custodial bridges operate in a decentralized manner, relying on smart contracts to manage the crypto locking and minting processes, removing the need to trust a bridge operator. In this case, the system’s security is as good as the underlying code. Blockchain bridges by functions Another classification is based on how a blockchain bridge functions. Some examples include wrapped asset bridges and sidechain bridges. Wrapped asset bridges enable crypto interoperability, for example, porting bitcoins to the Ethereum network via wrapping the BTC to Wrapped BTC (WBTC), an ERC20 token compatible with the Ethereum network. Sidechain bridges connect the parent blockchain to its child sidechain, enabling interoperability between the two. They are needed because the parent and sidechain may have different consensus mechanisms. One example is xDai Bridge, which connects the Ethereum mainnet to Gnosis Chain (formerly xDai blockchain), an Ethereum-based stable payment sidechain. xDai is secured by a set of validators different from those who maintain the Ethereum network. The xDai Bridge allows easy transfer of value between the two chains. Blockchain bridges by mechanisms  There are one-way (unidirectional) bridges and two-way (bidirectional) bridges. A one-way bridge means users can only bridge assets to one destination blockchain but not back to its native blockchain. Two-way bridges allow asset bridging in both directions.    Benefits of blockchain bridges The most important benefit of blockchain bridges is the ability to improve interoperability. They enable the exchange of tokens, assets, and data across different blockchains, whether between layer 1 and layer 2 protocols or various sidechains. For example, WBTC enables bitcoin users to explore the decentralized applications (dapps) and DeFi services of the Ethereum ecosystem. An interoperable blockchain sector is critical to the industry’s future success. Another advantage of blockchain bridges is to improve scalability. Some blockchain bridges can handle a large number of transactions, improving efficiency. For example, the Ethereum-Polygon Bridge is a decentralized two-way bridge that works as a scaling solution to the Ethereum network. As a result, users can benefit from faster transactions and lower transaction costs.   Risks of blockchain bridges At the same time, blockchain bridges have some limitations. Attackers have exploited the vulnerabilities of some blockchain bridges’ smart contracts. Massive amounts of crypto have been misappropriated by malicious actors from cross-chain bridges.  Custodial bridges may expose users to custodial risks. The centralized entity behind a custodial bridge could theoretically steal users’ funds. When using custodial bridges, go for established brands with long-term track records.  Another potential technical limitation is transaction rate bottlenecks. A single chain’s throughput capacity bottleneck could hinder large-scale blockchain interoperability.  While a bridge can alleviate congestion on a busy network, moving assets away to another chain doesn’t solve the scalability issue as users won’t always have access to the same suite of dapps and services. For example, some Ethereum dapps are not available on the Polygon Bridge, which limits its scaling efficacy.  Finally, blockchain bridges could expose the underlying protocols to risks related to the disparity in trust. Because blockchain bridges connect different blockchains, the overall security of the interconnected networks is as strong as the weakest link.    What’s the future of blockchain bridges?  The internet is a revolutionary system partly because of its high interoperability. Blockchain bridges are critical to enhancing the blockchain industry’s interoperability and mass adoption. They have enabled some essential innovations, allowing users to exchange assets between many blockchain protocols. Blockchain bridges have grown significantly in the number of bridges, users, and total transaction volume.   The need for blockchain bridges will likely continue to grow as the internet moves toward Web3. Future innovations may provide greater scalability and efficiency to users and developers. There could be innovative solutions to address the security risks associated with bridges. Blockchain bridges are integral to building an interoperable, open, and decentralized blockchain space.      Closing thoughts The development of the blockchain industry is driven by constant innovations. There are the pioneer protocols like the Bitcoin and Ethereum networks, followed by a myriad of alternative layer 1 and layer 2 blockchains. The number of crypto coins and tokens has grown exponentially.  With separate rules and technologies, they need blockchain bridges to be interconnected. A blockchain ecosystem linked by bridges is more cohesive and interoperable, opening up opportunities for better scalability and efficiency. With numerous attacks on cross-chain bridges, the search for a more secure and robust bridge design continues. 
The Developments In The Crypto Sector Made It Into The Record Books (The Guinness World Records)

Binance Academy: (BTC) Bitcoin Dominance - What Is It?

Binance Academy Binance Academy 23.06.2022 14:43
TL;DR   Bitcoin dominance, or BTC dominance, is measured as the ratio of the market capitalization of bitcoin to that of the rest of the cryptocurrency market. Some crypto investors and traders use bitcoin dominance as a guide to adjust their trading strategies and portfolio structures.    Introduction  While there are now thousands of altcoins out there, bitcoin, the original cryptocurrency, has remained the largest digital asset by market capitalization. Observing the dynamics of bitcoin’s share in the value of the overall crypto market, traders have spotted certain recurring patterns of market conditions. Some came to use BTC dominance as a guide for their trading behavior. In particular, BTC dominance is believed to offer insight into the current general market trend.    What Is BTC Dominance? | Binance Academy   BTC dominance and market capitalization In simple terms, market capitalization refers to the total value of a certain asset in circulation. For bitcoin, the market cap is calculated by multiplying the current price and the number of BTC that have been mined so far. You can calculate bitcoin dominance with this formula: Bitcoin dominance = Bitcoin market cap/ Total cryptocurrency market cap   Factors influencing BTC dominance Changing trends Before the explosion of altcoins, it was not uncommon for bitcoin dominance to hover above 90%. As altcoins collectively gained more user and investor interest, bitcoin lost some of this almost undivided attention to other assets with greater price swings and projects boasting new exciting use cases. While bitcoin was created to change how the transfer of value worked, crypto projects have evolved to do more. Unlike bitcoin, many altcoins are involved in different sectors, including gaming, art, and decentralized financial services beyond transferring money. Depending on the current trend, there may be more interest and trading around a particular type of crypto project. For instance, the explosion of NFTs may have caused BTC dominance to drop somewhat in favor of NFT-related tokens.  Over time, bitcoin has established itself as one of the more “stable” crypto assets. Traders’ interest in more dramatic price swings and associated profit opportunities that some newer altcoins offer can also affect bitcoin dominance, leading to funds flowing into riskier assets. In this case, the sectors these altcoins represent may not matter as much as the potential profits. Bull or bear market Over the last several years, there has been a general rise in the popularity of stablecoins, a trend that exerted sustained pressure on BTC dominance. More specifically, in a bear market or in times of volatility, stablecoins are often used to protect crypto investors’ funds amid falling prices. A stablecoin is an altcoin designed to maintain value equal to that of an asset with a more stable price, such as a fiat currency or commodity. Crypto investors and traders often use stablecoins to lock in profits without having to convert their crypto to fiat. When funds move out of the BTC market and into stablecoins, BTC dominance could go down. The inverse is likely in a bull market. When the market is up, traders can be incentivized to move value from stablecoins into more volatile assets that offer more trading opportunities, like bitcoin. However, emboldened traders may also choose riskier options and pump liquidity into altcoins that are even more volatile than BTC, so the overall effects of favorable market conditions on bitcoin dominance are highly context-dependent. On-ramping via stablecoins Stablecoins offer a convenient way to access a wide variety of cryptocurrencies compared to using fiat. This is because while there are fiat-to-crypto exchanges called gateway exchanges, they can be restrictive and only offer the more popular cryptocurrencies and stablecoins. Crypto-to-crypto exchanges, however, often provide a more comprehensive selection of cryptocurrencies tradable with select stablecoins. Hence, people who want to trade specific cryptocurrencies may enter the market via stablecoins. Naturally, if a significant amount of new funds enter the market through stablecoins and not bitcoin, the total value of the crypto market increases, causing a dilution in BTC dominance. Emergence of new coins Sometimes, new coins that enter the market can gain popularity quickly, causing BTC dominance to decrease. Remember that bitcoin is “fighting” with every other cryptocurrency in the market, so the emergence of several popular altcoins at once may affect it. However, there’s a chance that these altcoins may lose popularity after the hype dies down. If that happens and funds are moved from these altcoins to BTC or out of the crypto market entirely, BTC dominance may rise again.   Using BTC dominance in trading Wyckoff Method Developed in the early 1930s, the Wyckoff Method is a set of principles designed for traders and investors in traditional financial markets. Some of these principles, such as the law of cause and effect, can be applied when seeking profit opportunities using BTC dominance.  Many traders and investors use the Wyckoff Method to identify a market trend, estimate the likelihood of a trend reversal, and time trades. According to Wyckoff, trading behavior is organized into four phases: Accumulation, markup, distribution, and markdown. Identifying where and when funds flow can be important for some traders who rely on timing the market to make informed trading decisions.  Diversified traders and investors often use this approach to pick the stronger trend. Below are several scenarios where the Wyckoff Method is at play.  Using BTC dominance to spot altcoin season With the increasing number of altcoins in the market, it is unsurprising that bitcoin dominance is being diluted. In recent years, some altcoins have gained more popularity, causing the total market cap of all altcoins to briefly surpass that of bitcoin. Periods when altcoins steadily outperform bitcoin are known as “altcoin season” or “alt season.” Under the Wyckoff Method principles, such movement of funds from bitcoin to altcoins is cyclical. Because altcoins tend to perform better during an altcoin season, bitcoin may see its dominance weaken during this phase of the market cycle. Therefore, people who trade both bitcoin and altcoins may monitor bitcoin dominance to adjust their portfolios accordingly. Using BTC dominance with current bitcoin price Some people monitor bitcoin price along with bitcoin dominance to help them make trading decisions. Although they are not iron laws, here are some potential outcomes that various combinations of BTC price and dominance may be indicative of. When the price and dominance of BTC are rising, it could signal a potential bitcoin bull market.  When the price of BTC is rising but BTC dominance is falling, it could signal a potential altcoin bull market.  When the price of BTC is falling but BTC dominance is rising, it could signal a potential altcoin bear market. When the price and dominance of BTC are falling, it could signal a potential bear trend for the entire crypto market. While these two factors do not imply a definite bull or bear market, historical observations suggest a correlation.    Closing thoughts BTC dominance is a tool to help shed light on how the market cycles are changing. Some traders use it to adjust their trading strategies, while others use it to manage their diversified portfolios. Note that BTC dominance does not guarantee the performance of bitcoin or any other crypto but acts as a guide to help traders plan their trading approach.
Binance Academy summarise year 2022 featuring The Merge, FTX and more

Governance Tokens - What Are They? | Binance Academy

Binance Academy Binance Academy 21.06.2022 12:53
TL;DR Governance tokens give holders the right to vote on issues that govern the development and operations of a blockchain project. It’s a method for projects to distribute the decision-making power to their communities. This decentralized governance model helps align the interests of the token holders with that of the project.   Introduction Many traditional companies are governed by a board of directors or a small group of people, in what can be categorized as centralized governance. The average size of the biggest companies’ boards is around 10 people. They hold enormous power over how companies are run. The directors can nominate or fire key executives, decide which projects to invest in, and set the company’s strategy. Governance tokens represent a different way to govern organizations. Common for decentralized autonomous organizations (DAOs) and decentralized finance (DeFi), the model that governance tokens represent offers a more equitable, decentralized, and transparent governance method. In most cases, one token equals one vote. These tokens are designed to bind the communities together to ensure blockchain projects can develop healthily.   What Are Governance Tokens? | Binance Academy How do governance tokens work?  Governance tokens are the core method to realize decentralized governance in DAO, DeFi, and decentralized application (DApp) projects. They are often awarded to active users for their loyalty and contributions to the community. In turn, token holders vote on major issues to ensure the projects’ robust development. Typically, voting takes place via smart contracts, in which case the results are automatically implemented. One of the earliest governance tokens was issued by MakerDAO, an Ethereum-based DAO that underpins the crypto-collateralized stablecoin DAI. The Maker Protocol is governed by holders of its governance token called MKR. One MKR token equals one vote, and the decision with the most votes is adopted. Token holders vote on a variety of issues, such as appointing team members, adjusting fees, and adopting new rules. The objective is to ensure the stability, transparency, and efficiency of MakerDao’s stablecoin. Another example is Compound, a DeFi protocol that allows users to lend and borrow cryptocurrencies. It issues a governance token called COMP to allow its community of users to vote on key decisions. The tokens are allocated in proportion to users’ on-chain activity. In other words, the more you lend and borrow on Compound, the more COMP tokens you receive.  Similar to MakerDAO, one COMP token equals one vote. Users can also delegate their tokens to others to vote on their behalf. Notably, Compound relinquished control of the network’s admin key in 2020. It means the project became completely governed by its token holders without any substitute governance methods. Other notable governance tokens include those issued by decentralized exchange Uniswap and PancakeSwap, DeFi lending platform Aave, Web3 NFT community ApeCoin DAO, and virtual world platform Decentraland.  Each project sets different rules about how their governance tokens work. Tokens are distributed to stakeholders, including the founding team, investors, and users, according to different calculation models. Some governance tokens only vote on a certain set of governance issues, while others vote on most things. Some governance tokens can earn financial dividends, while others don’t.     Pros and cons of governance tokens Governance tokens have some great benefits. They can eliminate the misalignment of interests often seen in centralized governance. Decentralized governance enabled by governance tokens transfers that management power to a broad community of stakeholders, aligning the interests of users and the organization itself. Another advantage of governance tokens is the ability to build active, collaborative, and close communities. Every token holder is incentivized to vote and improve the project. Because one token mostly equals one vote, it can lay the groundwork for fair and more equitable decision-making. Every token holder can initiate a proposal to be voted on. The details of each vote are open for everyone to see, which lowers the chance of cheating. The biggest challenge of government tokens is the so-called whales problem. Whales are people who hold a large percentage of a certain crypto. If the biggest whales of a crypto project hold a significant portion of the overall supply of its governance token, they could swing the voting process to their favor. Projects need to make sure token ownership is truly decentralized and evenly distributed. But even if governance tokens are distributed fairly and broadly, there is no guarantee that the majority decisions are always the best for the projects. One-person, one-vote election systems have a long history and their track record is mixed. There have been cases when governance token holders vote to benefit the founding teams and large investors at the expense of the wider community.   What's next for governance tokens?  As an innovation born out of the crypto space, governance tokens could find wider usage in more sectors. The Web3 movement is a place where governance tokens can help build a decentralized internet. As DeFi and DAOs gain momentum, other industries such as gaming could adopt this governance model. Governance tokens will continue to evolve to fix problems as they emerge. There might be new mechanisms to deal with the whale problem or other ways to enhance the voting process. Novel methods of delegating votes could appear. This space is likely to become more complex, while new innovations continue to take place.  Another major factor impacting the future of governance tokens is potential regulatory changes. Some governments may deem these tokens as securities. That could subject them to strict regulations and impact how they can function.      Closing thoughts Governance tokens are still in the early stages of development. They have facilitated the robust growth of many DeFi and DAO projects. With voting power to determine the projects’ management, these tokens are the cornerstone of decentralization.  The principle of one token, one vote places users and the community at the center as long as the tokens are distributed relatively equally among the members of the community. Governance tokens may continue to expand in the future. User-owned networks, Web3 projects, and games could adopt governance tokens to build more vibrant decentralized ecosystems.
Crypto: How To Estimate A Risk And Take A Profit?

Blockchain: (DApps) Explained By Binance Academy. Decentralized Applications - What Are They?

Binance Academy Binance Academy 17.06.2022 13:42
TL;DR Decentralized applications (DApps) are applications that run on top of blockchain networks. There is a great variety of DApps with different use cases, such as gaming, finance, social media, and more.  Although DApps can look similar to regular mobile apps on your phone, their backend system is different. DApps rely on smart contracts on a distributed network instead of a centralized system to function. It makes them more transparent, decentralized, and resistant to attacks, but also introduces some new challenges.   Introduction Since the birth of Bitcoin (BTC) more than a decade ago, blockchains have evolved to unlock a host of new functionalities and use cases beyond currency. One of these new avenues is building decentralized applications (DApps) to use blockchain technology to enhance many traditional sectors and services.      What are decentralized applications (DApps)? Decentralized applications (DApps) are smart contract-powered digital applications or programs that run on blockchains rather than centralized servers. They look and feel similar to regular mobile apps on your smartphone and offer a wide variety of services and functions from gaming to finance, social media, and much more.  As the name suggests, DApps run on decentralized peer-to-peer networks. One early report suggested that DApps have the following features: Open-source: The source code of DApps is available to the public, meaning that anyone can verify, use, copy, and modify them. There is no single entity controlling the majority of its coins or tokens. Users can propose and vote on changes to the DApp too.  Decentralized and cryptographically secure: To ensure data safety, all information of the DApp is cryptographically secured and stored on a public, decentralized blockchain, maintained by multiple users (or nodes). A tokenized system: DApps can be accessed with a cryptographic token. They can adopt cryptocurrencies like ETH, or generate a native token using a consensus algorithm, such as Proof of Work (PoW) or Proof of Stake (PoS). The token can also be used to reward contributors like miners and stakers. Under this broad definition, the Bitcoin blockchain can be defined as a DApp — and arguably the first DApp ever. It’s open-source, with all data live on its decentralized blockchain, relies on a crypto token, and uses the PoW consensus algorithm. The same applies to other blockchains that have the above features.  However, today the term “DApps” generally refers to all applications that have smart contract functionalities and run on blockchain networks. The Bitcoin blockchain does not support smart contracts, so most people wouldn’t consider it a DApp.  As of June 2022, most DApps exist on the Ethereum network. It offers a robust infrastructure for DApp developers to expand the existing use cases. But as DApps mature, developers have started building them on other blockchains, including BNB Smart Chain (BSC), Solana (SOL), Polygon (MATIC), Avalanche (AVAX), EOS, etc.   How do DApps work? DApps are applications powered by smart contracts. Their backend code runs on distributed peer-to-peer networks. A smart contract works as a set of predefined rules enforced by computer code. When and if certain conditions are met, all network nodes will execute the tasks that the contract specifies. Once a smart contract is deployed on the blockchain, it is hard to change the code or destroy it. Therefore, even if the team behind the DApp has disbanded, users can still access the DApp.    Benefits of DApps While the interfaces of DApps and traditional applications can look similar, DApps offer multiple benefits compared to their centralized counterparts. Web apps store data on centralized servers. A single compromised server may take down the entire network of the app, making it temporarily or permanently unusable. Centralized systems may also suffer from data leakages or theft, putting the companies and individual users at risk. DApps, in contrast, are built on distributed networks with no central authority. With no single point of failure, DApps are less vulnerable to attacks, making it very difficult for malicious actors to hijack the network. The P2P network can also ensure the DApp continues to work with minimal downtime, even if individual computers or parts of the network malfunction.  The decentralized nature of DApps also means that users can have more control over the information they share. With no companies controlling users’ personal data, they don’t need to provide real-world identity to interact with a DApp. Instead, they can use a crypto wallet to connect to DApps and fully control what information they share.   Another benefit of DApps is that developers can easily integrate cryptocurrencies into their basic functionalities by leveraging smart contracts. For example, DApps on Ethereum can adopt ETH as payment without integrating third-party payment providers.     Limitations of DApps DApps hold the potential to become an important part of a censorship-free future, but every coin has two sides. Decentralized applications are still in the early stages of development, and the industry is yet to resolve limitations such as scalability, code modifications, and a low user base.  DApps require significant computing power to operate, which could overload the networks they run on. For example, to achieve the security, integrity, transparency, and reliability that Ethereum aspires to, it requires every validator to run and store every transaction executed on the network. This could hurt the system’s transaction per second (TPS) rate and lead to network congestion and inflated gas fees.  Making modifications to a DApp is also challenging. To enhance user experience and security, a DApp will likely need ongoing changes to fix bugs, update the user interface, and add new functionalities. However, once a DApp is deployed on the blockchain, it is hard to modify its backend code. It would require a majority consensus from the network’s nodes to approve any changes or improvements, which could take a long time to implement. The abundance of DApps on the market makes it difficult for one to stand out and attract many users. For a DApp to operate effectively, it needs to achieve a network effect — the more users a DApp has, the more effective it is at providing services. A larger number of users can also make the DApp more secure and protect it from hackers meddling with the open-source code.   Popular DApp use cases DApps offer a fresh approach for businesses across many industries to reach more users. Some popular DApp use cases include GameFi, decentralized finance (DeFi), entertainment, and governance.   GameFi GameFi DApps have been growing in popularity, which is exemplified by the rise of Axie Infinity, a play-to-earn game on the Ethereum blockchain. According to DappRadar, blockchain gaming activity in 2022 Q1 saw a 2,000% increase from 2021. It also attracted 1.22 million unique active wallets (UAW) in March 2022, with over 50% of the activity coming from gaming DApps.  Unlike traditional video games, most gaming DApps give players full control over their in-game assets. They also offer players opportunities to monetize these items outside of the game. Axie Infinity, for example, features game characters, virtual land, and gaming items in the form of NFTs. Players can store them in crypto wallets, transfer them to other Ethereum addresses, or trade with other players on NFT marketplaces. Within the ecosystem, players can compete with each other to collect ERC-20 tokens that can be traded on exchanges. Typically, the longer they play, the more in-game rewards they can earn.    DeFi and DEXs Traditional finance relies on financial institutions to act as middlemen. Through DApps, everyone can use financial services without any central authority and maintain full control of their assets. DeFi can also benefit low-income individuals, offering them access to a broad range of financial services at significantly lower costs.  Borrowing and lending are the most popular types of financial services that decentralized applications provide. DeFi DApps offer instant transaction settlement, minimal-to-none credit checks, and the ability to use digital assets as collateral. Users can have more flexibility on DApp lending marketplaces. For example, lenders have more control over their loans by choosing which token to lend and on what platform. Users can also potentially earn 100% of the interest generated from the loan since they don’t have to pay any intermediary fees.  Decentralized exchanges (DEXs) are another crucial example of financial DApps. Such platforms facilitate peer-to-peer trading by eliminating intermediaries such as centralized crypto exchanges. Users do not need to give up custody of their funds. Instead of transferring their assets into an exchange, they trade with another user directly with the help of smart contracts. Orders are executed on-chain and directly between the users’ wallets. Since DEXs require less maintenance, they typically have lower trading fees compared to centralized exchanges. Some popular DEXs include Uniswap, SushiSwap, and PancakeSwap.    Entertainment Entertainment is an integral part of our lives. With DApps, daily activities that people enjoy are being transformed into digital experiences that can also generate economic incentives. For example, Audius, a blockchain-based decentralized music streaming platform, removes the intermediaries that exist in the traditional music industry to connect artists and fans directly. It allows music curators to better monetize their content and produce immutable records of their work on the blockchain. DApps are also tackling issues that social media platform users face. Centralized social media giants like Twitter and Facebook are often criticized for censoring posts and mishandling user data. With decentralized social DApps like Steemit, the community can interact freely and express their opinions with fewer restrictions and censorship while enjoying greater control of their personal information.    Governance DApps can empower users to play a greater role in the governance of online organizations by introducing a more community-centric decision-making mechanism. With the help of smart contracts, users that hold governance tokens of a particular blockchain project can create proposals for the community to vote on and cast their votes on others’ proposals anonymously.  One of the decentralized governance models is Decentralized Autonomous Organizations (DAOs). DAOs can be considered fully autonomous DApps that use smart contracts to make decisions without a central authority. They have no hierarchy. Instead, it is economic mechanisms that align the interests of the organization with those of individual DAO members.   How to connect to DApps? To interact with a DApp, you’ll first need a compatible browser extension wallet like MetaMask, Trust Wallet, or Binance Chain Wallet. They only take a few minutes to set up. Some even offer mobile versions for easy access. Let’s use Trust Wallet as an example to see how to connect it to PancakeSwap on BNB Smart Chain (BSC). If you don’t have a Trust Wallet yet, check out this Academy article on how to install it on your smartphone.    Depositing BNB to Trust Wallet To use DApps on BSC, you’ll need some BNB to pay transaction fees. For example, you can withdraw BNB from your Binance Spot Wallet.  Go to your Trust Wallet and tap [BNB Smart Chain]. Do not click [BNB Beacon Chain]. This option is for BEP-2 BNB on the BNB Beacon Chain and cannot be used to pay transaction fees on BSC.     Tap [Receive] to view your BNB deposit address. You can then copy and paste this address into your withdrawing wallet or scan the QR code to make the transfer.     After the transaction is confirmed on the blockchain, you will see the BNB amount on your Trust Wallet homepage.    Adding CAKE to your Trust Wallet list Trust Wallet's default list of tokens does not include DApp tokens like PancakeSwap (CAKE). To make CAKE visible in your wallet, you need to add it to the list first. Tap [Add Tokens] and search “PancakeSwap”. You will see CAKE on different blockchains. As we’re using BSC, tap to toggle on the button next to [BEP-20 CAKE].     You should now see CAKE on your Trust Wallet token list.      The next step is connecting your Trust Wallet to PancakeSwap. You can connect through the built-in mobile browser on Trust Wallet or a desktop.    Connecting to PancakeSwap via the Trust Wallet browser 1. Tap [Broswer] from the Trust Wallet homepage and go to the PancakeSwap website.      2. You’ll be prompted to connect your Trust Wallet. Tap [Connect].     Connecting to PancakeSwap via a desktop browser 1. Go to the PancakeSwap website and click [Connect Wallet].      2. Click on the [Trust Wallet] icon and you’ll see a QR code on the screen.      3. Open your Trust Wallet app and go to [Settings] - [WalletConnect].      4. Tap [New Connection] and scan the QR code.      5. You’ll be prompted on the app to allow the connection. Tap [Connect].         Closing thoughts DApps are expanding the functionality of the Web by enhancing conventional applications with blockchain technology. Decentralized applications could bring even more innovative use cases to the market in the future. As DappRadar reported, DApps recorded almost 2.4 million daily active users by Q1 2022, and user interest is expected to grow continuously. However, DApp developers and the blockchain networks they build on are yet to address the current limitations before reaching mass adoption.
Binance Academy summarise year 2022 featuring The Merge, FTX and more

Crypto Faucet - What Is It? | Binance Academy

Binance Academy Binance Academy 15.06.2022 23:53
TL;DR A crypto faucet lets users earn small crypto rewards by completing simple tasks. The metaphor is based on how even one drop of water from a leaky faucet could eventually fill up a cup. There are various kinds of crypto faucets, including bitcoin (BTC), Ethereum (ETH), and BNB faucets.   Introduction The earliest crypto faucet may be a bitcoin faucet created in 2010 by the then-lead developer of the Bitcoin network named Gavin Andresen. It gave 5 BTC for free to each user who completed a simple captcha. This bitcoin faucet eventually gave out 19,715 BTC in total, helping to distribute early BTC ownership widely. It was instrumental in educating the initial network of bitcoin users, leading to the cryptocurrency’s healthy growth later on.  Naturally, no crypto faucets would deliver such massive payouts today as bitcoin and other cryptocurrencies’ prices have increased significantly. But emerging crypto projects still need to attract new users, and there are many people out there who want to learn about crypto. Crypto faucets play a role in connecting the supply and demand. You can think of faucets as coupons you sometimes get for downloading a new app to your phone or enrolling into a new online service. But with crypto faucets, you need to complete tasks to earn the reward in tiny pieces. As such, using faucets is a good way for beginners to start their journey with crypto.   Source: What Is A Crypto Faucet? | Binance Academy   How do crypto faucets work?  Crypto faucets are generally made to be simple and user-friendly. Users usually need to register an account with the digital asset service first. There are also dedicated crypto faucet sites and apps that specialize in offering free crypto to users who complete simple tasks. In both cases, users should have their crypto wallets to receive the rewards and may sometimes be asked to verify their identity. Users are offered to complete tasks that can include watching videos, reading articles, watching ads, playing games, and taking quizzes or surveys. The service can also ask users to refer friends to it. These tasks are relatively straightforward, and most people would have no problem completing them. But, in some cases, the tasks can be rather time-consuming. Upon completing the required tasks, users are rewarded with small amounts of crypto. However, if you use a faucet consistently, the rewards can compound over time and reach more meaningful amounts. Note that some websites and apps may require users to accumulate their rewards to a minimum amount before they can cash out (for example, $5 worth of crypto at a minimum).   What types of crypto faucets are there?  One way to categorize crypto faucets is by the token paid out as a reward. There are bitcoin, Ethereum, BNB faucets, and many more. For example, when using bitcoin faucets, users can earn rewards denominated in satoshis, the smallest unit of BTC. There are also crypto faucet aggregation websites that offer users multiple options depending on which token they prefer to claim their rewards in. Crypto faucets are different from airdrops in that the latter follow a predetermined schedule of reward distribution. Airdrops are usually given to those holding a specific token or using a crypto wallet to raise awareness of a particular project.  Crypto faucets are also different from bounties, which refer to a list of reward-earning tasks published by a blockchain project. Bounties are a way for a blockchain project to ask the public for community assistance and offer one-time crypto rewards for anyone who can complete specific tasks.   What are the risks of crypto faucets?   You must be extremely careful when using crypto faucets as scams and fraud are common among such offerings. Some websites or apps posing as crypto faucets could infect your computer with malware that can harm your machine and the data stored on it. It’s always a good idea to DYOR and rely on established brands that you trust. Another potential downside is that the rewards you get could be too small or the tasks too time-consuming to make them worthwhile. In some cases, users reported that a week of active participation in crypto faucets has only led to less than $1 worth of crypto in rewards. Ideally, you should find crypto faucets with a good reputation and that are most likely to generate enough crypto rewards to justify your time and efforts.     Closing thoughts Crypto faucets have become more sophisticated and diverse compared to their early days of giving out free bitcoins for solving simple captchas. To get started with crypto faucets, remember that extensive and careful research should be the first step.  Be mindful of lofty promises and suspicious-looking websites. Rely on reputable and established brands that you trust. If you use crypto faucets correctly and consistently, tiny drops of crypto could eventually become a meaningful amount, especially if the market value of the tokens you’ve accumulated goes up.
Binance Academy summarise year 2022 featuring The Merge, FTX and more

Binance Academy: Liquidity Pool (LP) Tokens - What Are They?

Binance Academy Binance Academy 14.06.2022 23:42
TL;DR Liquidity pool tokens (sometimes known as liquidity provider tokens) are given to users who provide liquidity in liquidity pools. These tokens act as a receipt, allowing you to claim your original stake and interest earned. You can also use your LP tokens to compound interest in a yield farm, take out crypto loans, or transfer ownership of the staked liquidity. However, it is important to understand that you don't actually own the associated liquidity once you give up custody of your LP tokens.   Introduction While most DeFi users know about liquidity pools, LP tokens are often an afterthought. However, these crypto assets have their own use cases apart from unlocking your provided liquidity. So, while there are risks in utilizing your LP tokens in other applications, there are viable strategies for extracting more value from these unique assets.     What does providing liquidity mean? At its most basic, liquidity is the ability to trade an asset easily without causing significant price changes. A cryptocurrency like Bitcoin (BTC), for example, is a highly liquid asset. You can trade it across thousands of exchanges in almost any amount without actively affecting its price. However, not every token is lucky enough to have this level of liquidity. When it comes to decentralized finance (DeFi) and smaller projects, liquidity can be low. For example, the coin may only be available on one exchange. You may also find it challenging to find a buyer or seller to match your order. The liquidity pool model (sometimes known as liquidity mining) can be a solution to this problem. A liquidity pool contains two assets users can swap between. There's no need for market makers, takers, or an order book, and the price is determined by the ratio of the assets in the pool. Users who deposit the pair of tokens into the pool to enable trading are known as liquidity providers. They charge a small fee for users who swap using their tokens. So while providing liquidity means offering your assets to a market, we are explicitly talking about DeFi liquidity pools in the case of LP tokens. Note that just because there is a liquidity pool for an asset pair, it doesn't mean there is much liquidity. However, you’ll always be able to trade using the pool and won’t need to rely on someone matching your order   How do liquidity pool (LP) tokens work? After depositing a pair of tokens in a liquidity pool, you'll receive LP tokens as a "receipt". Your LP tokens denote your share of the pool and allow you to retrieve your deposit, plus any interest gained. Therefore, part of the safety and security of your deposit depends on you holding onto your LP tokens. If you lose them, then you will lose your share. You'll find your LP tokens in the wallet you used when providing liquidity. You may need to add the LP token’s smart contract address to see it in your crypto wallet. Most LP tokens in the DeFi ecosystem can be transferred between wallets, thereby transferring ownership. However, you should always check with the liquidity pool service provider, as this isn't always the case. Transferring the tokens may, in some cases, cause a permanent loss of the liquidity provided.   Where can I get liquidity pool tokens? LP tokens are only granted to liquidity providers. To receive them, you will need to use a DeFi DApp to provide liquidity, such as PancakeSwap or Uniswap. The LP token system is common to many blockchains, DeFi platforms, automated market makers (AMMs), and decentralized exchanges (DEXs).  However, if you use liquidity pool services in a centralized finance (CeFi) setting on an exchange, you likely won’t receive LP tokens. These will instead be held in custody by the custodial service provider. Your LP token will typically have the name of the two tokens you're supplying liquidity in. For example, CAKE and BNB provided in a PancakeSwap liquidity pool will give you a BEP-20 token called CAKE-BNB LP. On Ethereum, LP tokens are usually ERC-20 tokens.   What can I do with liquidity pool (LP) tokens? While LP tokens act much like a receipt, that's not all you can do with them. In DeFi, there's always the opportunity to use your assets across multiple platforms and stack services like lego. Use them as a transfer of value Perhaps the simplest use case for LP tokens is to transfer ownership of their associated liquidity. Some LP tokens are tied to specific wallet addresses, but most allow for the free transfer of the tokens. For example, you could send BNB-wBNB LP tokens to someone who could then remove the BNB and wBNB from the liquidity pool. However, calculating the exact amount of tokens you have in the pool is difficult to do manually. In this case, you can use a DeFi calculator to calculate the amount of staked tokens associated with your LP tokens. Use them as collateral in a loan As your LP tokens provide ownership of an underlying asset, there is a good use case for using them as collateral. Like when you provide BNB, ETH, or BTC as collateral for a crypto loan, some platforms allow you to offer your LP tokens as collateral. Typically, this will enable you to borrow for a stablecoin or other large market cap asset. In these cases, the loan is overcollateralized. If you cannot keep up a certain collateral ratio, the lender will use your LP tokens to claim the underlying assets and liquidate them. Compound their yield One of the most common things to do with your LP tokens is to deposit them in a yield compounder (sometimes known as a yield farm). These services will take your LP tokens, regularly harvest the rewards, and purchase more of the token pair. Then, the compounder will stake these back in the liquidity pool, allowing you to compound your interest. While the process can be done manually, a yield farm can, in most cases, compound more efficiently than human users. Expensive transaction fees can be shared across users, and compounding can be done multiple times a day, depending on the strategy.   What are the risks of LP tokens? Just like with any other token, there are risks associated with LP tokens. These include: 1. Loss or theft: If you lose your LP token, then you lose your share of the liquidity pool and any interest gained. 2. Smart contract failure: If the liquidity pool you're using is compromised due to a smart contract failure, your LP tokens will no longer be able to return your liquidity to you. Similarly, if you stake your LP tokens with a yield farm or loan provider, their smart contracts could also fail. 3. Difficulty in knowing what they represent: When looking at your LP tokens, it's almost impossible to guess exactly what they're worth. If token prices have diverged, you will also have incurred impermanent loss. You also have interest to factor in as well. These uncertainties can make it challenging to make an informed decision about when to exit your liquidity position. 4. Opportunity risk: By providing your tokens as liquidity, there’s an associated opportunity cost. In some cases, you may be better off investing your tokens elsewhere or use them in a different opportunity.     Closing thoughts Next time you provide crypto liquidity to a liquidity pool on a DeFi protocol, it's worth considering if you also want to put your LP tokens to use. Depositing into a liquidity pool can be just the first part of a DeFi strategy. So apart from just HODLing, take a look at your investment plans and risk tolerance to decide whether further investment is suitable for you.
The Bitcoin Market Is Now Developing The Corrective Cycle To The Downside

Wrapped Tokens (e.g. WETH, WBTC) - What Are They? | Binance Academy

Binance Academy Binance Academy 09.06.2022 13:35
TL;DR A wrapped token is a cryptocurrency token pegged to the value of another crypto. It’s called a wrapped token because the original asset is put in a wrapper, a kind of digital vault that allows the wrapped version to be created on another blockchain. What’s the point? Well, different blockchains offer different functionality. And they can’t talk to each other. The Bitcoin blockchain doesn’t know what’s happening on the Ethereum blockchain. However, with wrapped tokens, there can be more bridges between different blockchains.   Introduction Ever found it frustrating that you can’t use BTC on Ethereum? ETH on Binance Smart Chain? Coins that exist on a given blockchain can’t be simply transferred to another. Wrapped tokens are a way to circumvent this limitation and use non-native assets on a blockchain. Learn more on Binance.com What is a wrapped token? A wrapped token is a tokenized version of another cryptocurrency. It’s pegged to the value of the asset it represents and typically can be redeemed for it (unwrapped) at any point. It usually represents an asset that doesn’t natively live on the blockchain that it’s issued on. You could think of a wrapped token as being similar to a stablecoin in that it derives its value from another asset. In a stablecoin's case, that’s usually fiat currency. In a wrapped token’s case, it’s usually an asset natively living on another blockchain. As blockchains are distinct systems, there isn’t a good way to move information between them. Wrapped tokens increase interoperability between different blockchains – the underlying tokens can, in essence, go cross-chain. It’s worth noting that if you’re an ordinary user, you don’t have to worry about the wrapping and unwrapping process; you can just trade these wrapped tokens like any other cryptocurrency. For example, this is the WBTC/BTC market on Binance.   How do wrapped tokens work? Let’s use Wrapped Bitcoin (WBTC) as our example, a tokenized version of Bitcoin on Ethereum. WBTC is an ERC-20 token that’s supposed to hold a one-to-one peg to the value of Bitcoin, allowing you to effectively use BTC on the Ethereum network. Wrapped tokens typically require a custodian – an entity that holds an equivalent amount of the asset as the wrapped amount. This custodian can be a merchant, a multisig wallet, a DAO, or even a smart contract. So, in WBTC’s case, the custodian needs to hold 1 BTC for each 1 WBTC that is minted. Proof of this reserve exists on-chain.  But how does the wrapping process work? A merchant sends BTC for the custodian to mint. The custodian then mints WBTC on Ethereum according to the amount of BTC sent. When the WBTC needs to be exchanged back to BTC, the merchant puts in a burn request to the custodian, and the BTC is released from the reserves. You can think of the custodian as the wrapper and unwrapper. In WBTC’s case, adding and removing custodians and merchants is performed by a DAO. While some in the community may refer to Tether (USDT) as a wrapped token, this isn’t exactly the case. While USDT generally trades one-for-one with USD, Tether does not hold the exact amount of physical USD for each USDT circulating in their reserves. Instead, this reserve is made up of cash and other real-world cash equivalents, assets, and receivables from loans. However, the idea is very similar. Each USDT token acts as a kind of wrapped version of a fiat USD.   Wrapped tokens on Ethereum Wrapped tokens on Ethereum are tokens from other blockchains that are made to be compliant with the ERC-20 standard. This means that you can use assets that are not native to Ethereum on Ethereum. As you’d expect, wrapping and unwrapping tokens on Ethereum costs gas. The implementations of these tokens can be very different. We wrote about them in more detail in our tokenized Bitcoin article.  An interesting example of a wrapped token on Ethereum is wrapped ether (WETH). A quick recap – ETH (ether) is required to pay for transactions on the Ethereum network, while ERC-20 is a technical standard for issuing tokens on Ethereum. For example, Basic Attention Token (BAT) and OmiseGO (OMG) are ERC-20 tokens. However, since ETH was developed before the ERC-20 standard, it isn’t compliant with it. This creates a problem, as many DApps require you to convert between ether and an ERC-20 token. This is why wrapped ether (WETH) was created. It’s a wrapped version of ether that is compliant with the ERC-20 standard. It’s basically a tokenized version of ether on Ethereum!   Wrapped tokens on Binance Smart Chain (BSC) Just like wrapped tokens on Ethereum, you can wrap Bitcoin and many other cryptos for use on the Binance Smart Chain (BSC).   The Binance Bridge allows you to wrap your crypto assets (BTC, ETH, XRP, USDT, BCH, DOT, and many more) for use on the Binance Smart Chain in the form of BEP-20 tokens. Once you’ve brought your assets to BSC, you can trade them or use them in various yield farming applications. The wrapping and unwrapping cost gas; however, as far as BSC is concerned, you can expect significantly lower gas costs than other blockchains. You can read more about Binance Bridge in our detailed article.   Benefits of using wrapped tokens Even though many blockchains have their own token standards (ERC-20 for Ethereum or BEP-20 for BSC), these standards can’t be used across multiple chains. Wrapped tokens allow non-native tokens to be used on a given blockchain. In addition, wrapped tokens can increase liquidity and capital efficiency both for centralized and decentralized exchanges. The ability to wrap idle assets and use them on another chain can create more connection between otherwise isolated liquidity. And lastly, a great benefit is transaction times and fees. While Bitcoin has some fantastic properties, it isn’t the fastest and can sometimes be expensive to use. While that’s fine for what it is, it can cause some headaches sometimes. These issues can be mitigated by using a wrapped version on a blockchain with faster transaction times and lower fees.   ➟ Looking to get started with cryptocurrency? Buy Bitcoin (BTC) on Binance!   Limitations of using wrapped tokens Most of the current implementations of wrapped tokens require trust in the custodian holding the funds. As for the currently available technology, wrapped tokens can’t be used for true cross-chain transactions – they usually need to go through a custodian.  However, some more decentralized options are in the works and may be available in the future for completely trustless wrapped token minting and redemption. The minting process can also be relatively costly thanks to high gas fees and can incur some slippage.   Closing thoughts Wrapped tokens help with creating more bridges between different blockchains. A wrapped token is a tokenized form of an asset that natively lives on another blockchain. This helps interoperability in the cryptocurrency and Decentralized Finance (DeFi) ecosystem. Wrapped tokens open up a world where capital is more efficient, and applications can easily share liquidity with each other.
Short Squeeze - What Is It? | Binance Academy

Short Squeeze - What Is It? | Binance Academy

Binance Academy Binance Academy 08.06.2022 15:06
Introduction Short selling allows traders to profit off an asset’s price decline. It’s a very common way to manage downside risk, hedge existing holdings, or simply express a bearish outlook on the market.  However, shorting can be an exceptionally high-risk trading strategy at times. Not only because there is no upper limit for the price of an asset, but also due to short squeezes. A short squeeze can be described as a sudden price increase. When it occurs, many short sellers get “trapped” and quickly rush to the exit to try and cover their positions. Naturally, if you’d like to understand what a short squeeze is, you’ll need to understand what shorting is first. If you’re not familiar with shorting and how it works, check out What is Shorting In the Financial Markets?. In this article, we’ll discuss what a short squeeze is, how you can prepare for it, and even profit off it in a long position.   What is a short squeeze? A short squeeze happens when the price of an asset sharply increases due to a lot of short sellers being forced out of their positions. Short sellers are betting that the price of an asset will decline. If the price rises instead, short positions start to amass an unrealized loss. As the price goes up, short sellers may be forced to close their positions. This can occur via stop-loss triggers, liquidations (for margin and futures contracts). It can also happen simply because traders manually close their positions to avoid even greater losses. So, how do short sellers close their positions? They buy. This is why a short squeeze results in a sharp price spike. As short sellers close their positions, a cascading effect of buy orders adds more fuel to the fire. As such, a short squeeze is typically accompanied by an equivalent spike in trading volume. Here’s something else to consider. The larger the short interest is, the easier it is to trap short sellers and force them to close their positions. In other words, the more liquidity there is to trap, the greater the increase in volatility may be thanks to a short squeeze. In this sense, a short squeeze is a temporary increase in demand while a decrease in supply. The opposite of a short squeeze is a long squeeze – though it’s less common. A long squeeze is a similar effect that happens when longs get trapped by cascading selling pressure, leading to a sharp downward price spike.   How does a short squeeze happen? A short squeeze happens when there is a sudden increase in buying pressure. If you’ve read our article about shorting, you know that shorting can be a high-risk strategy. However, what makes a short squeeze a particularly volatile event is the sudden rush to quickly cover short positions (via buy orders). This includes many stop-loss orders triggering at a significant price level, and many short sellers manually closing their positions at the same time. A short squeeze can happen in essentially any financial market where a short position can be taken. At the same time, the lack of options to short a market can also lead to large price bubbles. After all, if there’s no good way to bet against an asset, it may keep going up for an extended period. A prerequisite of a short squeeze can be a majority of short positions over long positions. Naturally, if there are significantly more short positions than long positions, there’s more liquidity available to fuel the fire. This is why the long/short ratio can be a useful tool for traders who want to keep an eye on market sentiment. If you’d like to check the real-time long/short ratio for Binance Futures, you can do it on this page. Some advanced traders will look for potential short squeeze opportunities to go long and profit off the quick spike in price. This strategy will include accumulating a position before the squeeze happens and using the quick spike to sell at a higher price.   ➟ Looking to get started with cryptocurrency? Buy Bitcoin on Binance!   Short squeeze examples Short squeezes are very common in the stock market. This usually entails low sentiment around a company, a perceived high stock price, and a large number of short positions. If, say, some unexpected positive news comes out, all those short positions are forced to buy, leading to an increase in the price of the stock. Even so, a short squeeze is more of a technical pattern rather than a fundamental event. According to some estimates, Tesla (TSLA) stock had been one of the most shorted stocks in history. Even so, the price has gone through a number of sharp rises, likely trapping a lot of short sellers. Short squeezes are also quite common in the cryptocurrency markets, most notably in the Bitcoin markets. The Bitcoin derivatives market uses high-leverage positions, and these can be trapped or liquidated with relatively small price moves. As such, short and long squeezes happen frequently in the Bitcoin markets. If you’d like to avoid getting liquidated or trapped in such moves, carefully consider the amount of leverage you’re using. You should also adopt a proper risk management strategy. Take a look at this Bitcoin price range below from early 2019. The price was contained in a range after a sharp move to the downside. Market sentiment was likely quite low, as many investors would be looking for short positions, expecting the continuation of the downtrend.   Potential short squeeze on the BTC/USD market.   However, price flew through the range with such haste that the area didn’t even get retested for a long time. It only got a retest years later, during the coronavirus pandemic (also known as “Black Thursday”). This rapid move was quite likely due to extensive short covering.   Closing thoughts Summing up, a short squeeze happens when short sellers get trapped and are forced to cover their positions, leading to a sharp price increase.  Short squeezes can be especially volatile in highly levered markets. When many traders and investors use high leverage, the price moves also tend to be sharper, since cascading liquidations can lead to a waterfall effect. Make sure you understand the implications of a short squeeze before you enter a short position. Otherwise, you could end up with huge losses. If you’d like to learn more about shorting and many other trading techniques, check out A Complete Guide to Cryptocurrency Trading for Beginners. Do you still have questions about how to short Bitcoin and cryptocurrencies? Check out our Q&A platform, Ask Academy, where the Binance community will answer your questions.
Steady BoE Rate Expectations Amid Empty Event Calendar in the UK

Every Trader And Investor Should Know Them! Options Contracts - What Are They? | Binance Academy

Binance Academy Binance Academy 07.06.2022 19:52
An options contract is an agreement that gives a trader the right to buy or sell an asset at a predetermined price, either before or at a certain date. Although it may sound similar to futures contracts, traders that buy options contracts are not obligated to settle their positions.  Options contracts are derivatives that can be based on a wide range of underlying assets, including stocks, and cryptocurrencies. These contracts may also be derived from financial indexes. Typically, options contracts are used for hedging risks on existing positions and for speculative trading. Learn more on Binance.com How do options contracts work? There are two basic types of options, known as puts and calls. Call options give contract owners the right to buy the underlying asset, while put options confer the right to sell. As such, traders usually enter into calls when they expect the price of the underlying asset to increase, and puts when they expect the price to decrease. They may also use calls and puts hoping for prices to remain stable - or even a combination of the two types - to bet in favor or against market volatility. An options contract consists of at least four components: size, expiration date, strike price, and premium. First, the size of the order refers to the number of contracts to be traded. Second, the expiration date is the date after which a trader can no longer exercise the option. Third, the strike price is the price at which the asset will be bought or sold (in case the contract buyer decides to exercise the option). Finally, the premium is the trading price of the options contract. It indicates the amount an investor must pay to obtain the power of choice. So buyers acquire contracts from writers (sellers) according to the value of the premium, which is constantly changing, as the expiration date gets closer. Basically speaking, if the strike price is lower than the market price, the trader can buy the underlying asset at a discount and, after including the premium into the equation, they may choose to exercise the contract to make a profit. But if the strike price is higher than the market price, the holder has no reason to exercise the option, and the contract is deemed useless. When the contract is not exercised, the buyer only loses the premium paid when entering the position. It is important to note that although the buyers are able to choose between exercising or not their calls and puts, the writers (sellers) are dependent on the buyers’ decision. So if a call option buyer decides to exercise his contract, the seller is obligated to sell the underlying asset. Similarly, if a trader buys a put option and decides to exercise it, the seller is obligated to buy the underlying asset from the contract holder. This means that writers are exposed to higher risks than buyers. While buyers have their losses limited to the premium paid for the contract, writers can lose much more depending on the asset’s market price. Some contracts give traders the right to exercise their option anytime before the expiration date. These are usually referred to as American option contracts. In contrast, the European options contracts can only be exercised at the expiration date. It is worth noting, however, that these denominations have nothing to do with their geographical location.   Options premium The value of the premium is affected by multiple factors. To simplify, we may assume that the premium of an option is dependent on at least four elements: the underlying asset’s price, the strike price, the time left until the expiration date, and the volatility of the corresponding market (or index). These four components present different effects on the premium of calls and put options, as illustrated in the following table.     Call options premium Put options premium Rising asset’s price Increases Decreases Higher strike price Decreases Increases Decreasing time Decreases Decreases Volatility Increases Increases   Naturally, the asset’s price and strike price influence the premium of calls and puts in an opposing way. In contrast, less time usually means lower premium prices for both types of options. The main reason for that is because traders would have a lower probability of those contracts turning in their favor. On the other hand, increased levels of volatility usually cause premium prices to rise. As such, the option contract premium is a result of those and other forces combined.   Options Greeks Options Greeks are instruments designed to measure some of the multiple factors that affect the price of a contract. Specifically, they are statistical values used to measure the risk of a particular contract based on different underlying variables. Following are some of the primary Greeks and a brief description of what they measure: Delta: measures how much the price of an options contract will change in relation to the underlying asset’s price. For instance, a Delta of 0.6 suggests that the premium price will likely move $0.60 for every $1 move in the asset’s price. Gamma: measures the rate of change in Delta over time. So if Delta changes from 0.6 to 0.45, the option’s Gamma would be 0.15. Theta: measures price change in relation to a one-day decrease in the contract’s time. It suggests how much the premium is expected to change as the options contract gets closer to expiration. Vega: measures the rate of change in a contract price in relation to a 1% change in the implied volatility of the underlying asset. An increase in Vega would normally reflect an increase in the price of both calls and puts. Rho: measures expected price change in relation to fluctuations in interest rates. Increased interest rates generally cause an increase in calls and a decrease in puts. As such, the value of Rho is positive for call options and negative for put options.   Common use cases Hedging Options contracts are widely used as hedging instruments. A very basic example of a hedging strategy is for traders to buy put options on stocks they already hold. If the overall value is lost in their main holdings due to price declines, exercising the put option can help them mitigate losses. For example, imagine that Alice bought 100 shares of a stock at $50, hoping for the market price to increase. However, to hedge against the possibility of stock prices falling, she decided to buy put options with a strike price of $48, paying a $2 premium per share. If the market turns bearish and the stock declines to $35, Alice can exercise her contract to mitigate losses, selling each share for $48 instead of $35. But if the market turns bullish, she doesn’t need to exercise the contract and would only lose the premium paid ($2 per share). In such a scenario, Alice would break even at $52 ($50 + $2 per share), while her losses would be limited to -$400 ($200 paid for the premium and $200 more if she sells each share for $48).     Speculative trading Options are also widely used for speculative trading. For instance, a trader who believes that an asset's price is about to go up can buy a call option. If the price of the asset moves above the strike price, the trader can then exercise the option and buy it at a discount. When an asset's price is above or below the strike price in a way that makes the contract profitable, the option is said to be "in-the-Money." Likewise, a contract is said to be "at-the-Money" if on its breakeven point, or "out-of-the-Money" if in a loss.   Basic strategies When trading options, traders can employ a wide range of strategies, which are based on four basic positions. As a buyer, one can buy a call option (right to buy) or put option (right to sell). As a writer, one can sell call or put options contracts. As mentioned, writers are obligated to buy or sell the assets if the contract holder decides to exercise it. The different options trading strategies are based on the various possible combinations of call and put contracts. Protective puts, covered calls, straddle, and strangle are some basic examples of such strategies. Protective put: involves buying a put option contract of an asset that is already owned. This is the hedging strategy used by Alice in the previous example. It is also known as portfolio insurance as it protects the investor from a potential downtrend, while also maintaining their exposure in case the asset’s price increases. Covered call: involves selling a call option of an asset that is already owned. This strategy is used by investors to generate additional income (options premium) from their holdings. If the contract is not exercised, they earn the premium while keeping their assets. However, if the contract is exercised due to an increase in the market price, they are obligated to sell their positions. Straddle: involves buying a call and a put on the same asset with identical strike prices and expiration dates. It allows the trader to profit as long as the asset moves far enough in either direction. Simply put, the trader is betting on market volatility. Strangle: involves buying both a call and a put that are “out-of-the-Money” (i.e., strike price above market price for call options and below for put options). Basically, a strangle is like a straddle, but with lower costs for establishing a position. However, a strangle requires a higher level of volatility to be profitable.   Advantages Suitable for hedging against market risks. More flexibility in speculative trading. Allow for several combinations and trading strategies, with unique risk/reward patterns. Potential to profit from all the bull, bear, and side-way market trends. May be used for reducing costs when entering positions. Allow multiple trades to be performed simultaneously.   Disadvantages Working mechanisms and premium calculation not always easy to understand. Involves high risks, especially for contract writers (sellers) More complex trading strategies when compared to conventional alternatives. Options markets are often plagued with low levels of liquidity, making them less attractive for most traders. The premium value of options contracts is highly volatile and tends to decrease as the expiration date gets closer.   Options vs. futures Options and futures contracts are both derivative instruments and, as such, present some common use cases. But despite their similarities, there is a major difference in the settlement mechanism between the two. Unlike options, futures contracts are always executed when the expiration date is reached, meaning that the contract holders are legally obligated to exchange the underlying asset (or respective value in cash). Options, on the other hand, are only exercised at the discretion of the trader who holds the contract. If the contract holder (buyer) exercises the option, the contract writer (seller) is obligated to trade the underlying asset.   Closing thoughts As the name suggests, options give an investor the choice to buy or sell an asset in the future, regardless of the market price. These type of contracts are very versatile and can be used in various scenarios - not only for speculative trading but also for performing hedging strategies.  Yet, it is worth noting that trading options, as well as other derivatives, involves many risks. So before making use of this type of contract, traders should have a good understanding of how it works. It is also important to have a good understanding of the different combinations of calls and puts and the potential risks involved in each strategy. Also, traders should also consider employing risk management strategies along with technical and fundamental analyses to limit the potential losses.
Bitcoin Is Showing The Potential For The Further Downside Rotation

Is It Possible To Make A Bitcoin Price Prediction? Bitcoin Price (BTC/USD) Over The Years | Binance Academy

Binance Academy Binance Academy 06.06.2022 23:27
TL;DR Bitcoin has experienced five significant peaks in price since its creation in 2009. So far, the cryptocurrency has had an all-time high of roughly 64,000 US dollars and increased mainstream adoption. The journey has been volatile, often reacting to political, economic, and regulatory happenings. Bitcoin has experienced, on average, 200% growth per year. As of August 2021, Bitcoin’s market cap is roughly $710,000,000,000 and its crypto market dominance is just under 50%. Events like the Mt. Gox exchange hack of 2014 and the 2020 stock market crash can explain some short and mid-term price behavior. In the long run, you can get a macro view by looking at models that use technical, fundamental, and sentiment analysis. For technical analysis, Bitcoin’s Logarithmic Growth Curve and the Hyperwave Theory are two interesting models. The Hyperwave Theory also ties price into investor sentiment in cyclical phases. When it comes to fundamental analysis, the Stock to Flow and Metcalfe models track Bitcoin’s price reasonably well. Ultimately, you could use a combination of all of these methods to get a balanced view. Learn more on Binance.com Introduction Bitcoin (BTC) has captured the world’s imagination with its massive rise in value since 2009. However, it has not all been bull runs and gains. Bitcoin has experienced dips and bear markets too. Despite its volatility, the cryptocurrency has so far outperformed all traditional assets. A combination of multiple factors makes up the Bitcoin price history, and you can study them with different techniques and viewpoints.     How to analyze Bitcoin’s price history Before we get into the data, let’s look at how you can analyze Bitcoin’s price history. There are three different methods: technical, fundamental, and sentiment analysis. Each type has its strengths and weaknesses but can be combined to form a clearer picture. 1. Technical analysis (TA): The use of historical price and volume data to try and predict future market behavior. For example, you could create a 50-day Simple Moving Average (SMA) by taking the last 50 days’ prices and averaging them. You can make inferences with the SMA by plotting it on your asset’s price chart. For example, imagine Bitcoin has been trading under the 50-day SMA for a few weeks but then breaks through it. This movement could be seen as a sign of a possible recovery. 2. Fundamental analysis (FA): The use of data representing the fundamental, intrinsic value of a project or cryptocurrency. This type of research concentrates on external and internal factors to try and establish an asset’s actual value. For example, you could look at Bitcoin’s daily transactions to measure the network’s popularity. If this number rises over time, it might suggest the project has value, and the price could increase. 3. Sentiment analysis (SA): The use of market sentiment to predict price movements. Market sentiment includes the feelings and mood of investors towards an asset. You can typically categorize these into bullish or bearish sentiments. For example, a significant increase in trending Google searches about purchasing Bitcoin could suggest positive market sentiment.   Which factors influenced early Bitcoin trading? Next up is to explore the factors that influence trading and affect prices. These have changed over time from Bitcoin’s beginning. In 2009, Bitcoin was an extremely niche asset with low liquidity. Trades were made Over-the-Counter (OTC) between users on BitcoinTalk and other forums who saw Bitcoin’s value as a decentralized currency. The speculation that we see today played much less of a role. Satoshi Nakamoto mined the first block on January 03, 2009, with a reward of 50 bitcoins. He then sent 10 BTC to Hal Finney nine days later in the first-ever Bitcoin transaction. On May 22, 2010, Bitcoin still had a price of less than $0.01. That day also saw the first commercial Bitcoin transaction with Laszlo Hanyecz purchasing two pizzas for 10,000 BTC. At the time, users on the Bitcointalk forums saw the purchase as a novelty. This trade contrasts with current use, where you can purchase everyday goods easily with a Binance Visa Card. As Bitcoin’s price and popularity rose, a small, unregulated industry became increasingly involved in facilitating transactions and trading. These included cryptocurrency exchanges and deep web markets. Bitcoin’s price was often significantly affected as these markets and exchanges were hacked, closed, or regulated. Some hacked exchanges held substantial Bitcoin supplies, causing significant price shocks and a lack of market confidence. We’ll explore this topic further later on.   Which factors influence Bitcoin trading now? Bitcoin now shares more in common with traditional assets than in its early days. Increased adoption in retail, finance, and politics means even more factors affect Bitcoin’s price and trading. Institutional investment in virtual currencies is also growing, giving speculation a bigger role. These points mean that the factors that affect Bitcoin's trading today are often different from those in its early days. Let's discuss some of the largest ones. 1. Regulation is now much more present than in Bitcoin’s earlier days. As governments begin to understand cryptocurrencies and blockchain technology more, their control and regulatory input tend to increase. Both the tightening and loosening of regulations have their impacts. Some changes in Bitcoin’s price are related to the banning of BTC in one country or its popularity in another. 2. The state of the global economy is now a direct factor in Bitcoin’s price and trading. For example, people living in countries with hyperinflation have turned to cryptocurrencies as a hedge against inflation. As a result of Venezuela’s economic crisis beginning in 2016, we’ve seen record-high trading volume on LocalBitcoins in Venezuelan Bolivar. The 2020 stock market crash saw the beginning of the Bitcoin bull run that lasted over a year. Bitcoin is now seen as a store of value, much like gold. When confidence is low in other parts of the economy, people purchase these assets.     3. Increasing mainstream adoption from large companies can trigger rallies in Bitcoin’s price. Paypal, Square, Visa, and Mastercard have all shown some support for cryptocurrencies, giving investors confidence. Retailers have even started accepting Bitcoin payments. The withdrawal of support can also trigger selloffs, such as Elon Musk’s announcement on May 17, 2021, of Tesla halting Bitcoin payments. In this case, the price went from just under $55,000 per BTC to roughly $48,500 that day.     4. Increased speculation and derivatives such as Bitcoin futures have driven extra demand in the market. Rather than invest and hold BTC for its fundamental value, traders and speculators in the futures market short BTC for profit, causing downward pressure on the price. This means that Bitcoin’s price is no longer solely based on its utility.   Bitcoin’s price history Since 2009, Bitcoin’s price has been subject to large volatility. The factors mentioned above have all contributed to its journey so far. Although the price has had its ups and downs, the price is still dramatically higher than when it began.  When we compare Bitcoin to the NASDAQ 100 and gold, you can see it has vastly outpaced these two traditionally strong-performing assets. You can also see its volatility, as Bitcoin’s yearly losses are also greater in percentage terms than any losses experienced by gold or the NASDAQ 100 (data from @CharlieBilello).   2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Bitcoin 1473% 186% 5507% -58% 35% 125% 1331% -73% 95% 301% Gold 9.6% 6.6% -28.3% -2.2% -10.7% 8.0% 12.8% -1.9% 17.9% 24.8% NASDAQ 100 3.4% 18.1% 36.6% 19.2% 9.5% 7.1% 32.7% -0.1% 39.0% 48.6%   According to CaseBitcoin, BTC has shown a 10-year CAGR (compound annual growth rate) of 196.7%. CAGR measures an asset’s annual growth rate taking into account compounding. There have been five significant peaks in Bitcoin’s price, rising from only $1 in 2011 to an all-time high of $65,000 in May 2021. Let’s break down the history so far into five distinct peaks.       1. June 2011: From a price measured in just cents the year before, Bitcoin made a meteoric rise to $32. Bitcoin experienced its first bull run followed by a moderate crash down to $2.10. 2. April 2013: After beginning the year at roughly $13, Bitcoin experienced its first bull run of the year, rising to $260 on April 10, 2013. The price then crashed over the next two days down to $45. 3. December 2013: By the end of the year, Bitcoin experienced an almost 10-times price increase between October and December. At the beginning of October, BTC was trading at $125 before reaching its peak of $1,160. By December 18, the price had once again crashed to $380. 4. December 2017: After starting at roughly $1,000 in January 2017, Bitcoin saw a meteoric rise in price to just under $20,000 by December 17, 2017. This bull run cemented Bitcoin’s position in the mainstream, catching the attention of institutional investors and governments. 5. April 2021: Crashes in the stock market and crypto market in March 2020 led to a sustained price rise up to $63,000 by April 13, 2021. With economic instability from the Coronavirus pandemic, Bitcoin was seen by some as a store of value. BTC and the crypto market then saw a significant selloff in May 2021 before stagnating in price.     Short-term price events The fundamental and technical models we’ll use later can’t always describe the price behavior we see. External factors, including political and economic events, play large roles that you can analyze individually. One interesting example to look at is a famous hack that took place in Bitcoin’s early days. The Mt. Gox exchange hack The Mt. Gox Bitcoin exchange hack was a significant event in 2014 that led to a temporary drop in Bitcoin’s price. At the time, the Tokyo-based crypto exchange was the largest on the market, with a trading volume of roughly 70% of Bitcoin’s total supply. Since its creation in 2010, Mt. Gox had been the victim of numerous hacks but had continued to survive. However, 2014’s hack saw roughly 850,000 BTC stolen, wiping out most of the exchange’s digital assets. Mt. Gox suspended withdrawals on February 14, 2014, leading to an approximately 20% decrease in Bitcoin’s price to around $680 after trading at $850 for most of the week. Ultimately, hackers took $450,000,000 (USD) of user’s funds, and Mt. Gox went bankrupt. Some former users claim there were issues with the website’s code that were not fixed in time. The reasons behind the hack are still not clear to this day, leading to multiple ongoing lawsuits and legal action against the exchange’s CEO Mark Karpelès.   How do we explain Bitcoin’s long-term price history? In the long run, smaller, less-important events have a minor impact on price. For this reason, it’s interesting to look at other ways to explain Bitcoin’s overall positive trajectory. One option is to study analytical models that use the techniques we already mentioned above. Fundamental analysis: Stock to Flow model The Stock-to-Flow model uses Bitcoin’s limited supply as a possible indicator of price. At a basic level, Bitcoin is somewhat similar to gold or diamonds. Over time, these two commodities’ prices have risen due to their scarcity. This factor lets investors use them as stores of value. If you take the total circulating global supply (stock) and divide it by the total amount produced by year (flow), you can use this ratio to model Bitcoin’s price over time. We already know the exact amount of new bitcoins miners will generate and roughly when they will receive them. Put simply, mining returns are decreasing, and this creates an increasing stock-to-flow ratio. Stock to Flow has proven popular due to its accuracy so far in modeling Bitcoin’s price history. You can see below a 365-day SMA and Bitcoin’s historical price data and the prediction it gives going into the future.     The model does have some drawbacks. Over time, when Bitcoin’s flow reaches zero, the model will eventually break as you can’t divide by zero. This calculation gives implausible price predictions that tend to infinity. You can read more about Stock to Flow’s advantages and disadvantages in our Bitcoin and the Stock to Flow Model article.   Fundamental analysis: Metcalfe’s Law Metcalfe’s law is a general computing principle that you can also apply to the Bitcoin network. It states that the value of a network is proportional to the square of the number of connected users. What does this mean exactly? An easy-to-understand example is the phone network. The more people who own phones, the more exponentially valuable the network becomes.  With Bitcoin, you can calculate a Metcalfe value by using the number of active Bitcoin wallet addresses and other public information on the blockchain. If you plot the Metcalfe value against price, you can see a reasonably good fit. You can also extrapolate the trend to predict possible future prices, as Timothy Peterson has done in his graph below.     The Network Value to Metcalfe ratio (NVM) provides another use of Metcalfe’s law. You can calculate the ratio by taking Bitcoin’s market cap and dividing it by a formula approximating Metcalf’s law. The formula uses the number of active unique addresses on a specific day as a stand-in for the network’s users. Unique addresses are defined as having a non-zero balance and also making a transaction that day. A value over one indicates the market is overvalued and below one that it’s undervalued. You can see how this looks visually with the following graph from Cryptoquant. The NVM ratio is the left axis, while the network value is on the right.     Technical analysis: Bitcoin’s Logarithmic Growth Curve Bitcoin’s Logarithmic Growth Curve is a 2019 technical analysis model created by Cole Garner. Standard Bitcoin price charts display the logarithmic (log) price against linear time on the x-axis. However, if you also log time, you can draw simple trend lines that match the tops of the last three bull runs and Bitcoin market support levels.     These lines can be transformed back onto our original log price graph, providing us with a growth curve that has fairly accurately matched Bitcoin’s price history so far, as seen in the following chart from LookIntoBitcoin.com.     Technical Analysis: Hyperwave Theory Hyperwave Theory was developed by Tyler Jenks and attempts to explain prices through investor emotions. The theory suggests that market sentiment repeatedly moves between pessimism and optimism. These feelings often lead to a Hyperwave where the price climbs over time before reversing into a bearish trend. Although Jenks theorizes the pattern arises from market sentiment, the graph only uses technical analysis with price data to draw its trend lines. According to the Hyperwave Theory, there are seven phases in each market cycle.     In phases 1, 5, and 7, the asset’s price should stay below the resistance line. In phases 2, 3, 4, and 6, the price should remain above the support lines. Not every asset will stick to the rules completely, but there is evidence of the pattern existing in some markets. You can see below a rough example of the NASDAQ Composite 2000, graphically demonstrated by Leah Wald (CEO of Valkyrie Investments Inc.).     Let’s take a look at the Bitcoin bull run of 2017. If you apply the Hyperwave theory trends, you can see that it has a relatively good fit apart from phase one. You can also see the price rising at increasing speed, followed by a large crash that mainly follows the phases set out above.     Closing thoughts  It’s obvious to see that there are a lot of theories out there that try to explain Bitcoin’s price history. But no matter the answer, Bitcoin’s almost 200% 10-year CAGR has shown the incredible rise of digital currencies. Even within cryptocurrencies, Bitcoin shows a market dominance of just under 50% as of August 2021, with a market cap of roughly $710,000,000,000. The reasons behind this monumental growth include the crypto’s fundamentals, market feeling, and economic events. However, past performance is not indicative of future results. It’s helpful to understand why Bitcoin has had such a high price trajectory, but it doesn’t tell us what will happen in the future. When we look at the bigger picture, Bitcoin has matured incredibly well for a new asset class that’s only 12 years old.
Cross-Chain Interoperability Solutions Have The Potential To Significantly Improve

What Is Layer 1? What Is Layer 2? Blockchain: Layer 1 And Layer 2 Scalling Explained | Binance Academy

Binance Academy Binance Academy 03.06.2022 16:36
TL;DR The popularity of crypto and blockchain is growing exponentially, and so is the number of users and transactions. While it's easy to see how revolutionary blockchain is, scalability – a system’s capacity to grow while accommodating increasing demand – has always been a challenge. Public blockchain networks that are highly decentralized and secure often struggle to achieve high throughput.  This is often described as the Blockchain Trilemma, which states that it’s virtually impossible for a decentralized system to simultaneously achieve equally high levels of decentralization, security, and scalability. Realistically, blockchain networks can only have two out of three factors.  Fortunately, however, thousands of enthusiasts and experts are working on scaling solutions. Some of these solutions are designed to tweak the architecture of the main blockchain (Layer 1), while others target Layer 2 protocols that operate on top of the underlying network.   Introduction With a large number of blockchains and cryptocurrencies available, you might not know if you’re using a Layer 1 or Layer 2 chain. There are benefits in hiding blockchain complexity, but it’s worth getting to understand a system you’re investing in or using. With this article, you’ll understand the differences between Layer 1 and Layer 2 blockchains and various scalability solutions.     What is a blockchain Layer 1 vs. Layer 2? The term Layer 1 refers to the base level of a blockchain architecture. It’s the main structure of a blockchain network. Bitcoin, Ethereum, and BNB Chain are examples of Layer 1 blockchains. Layer 2 refers to networks built on top of other blockchains. So if Bitcoin is a Layer 1, the Lightning Network that runs on top of it is an example of a Layer 2.  Blockchain network scalability improvements can be categorized into Layer 1 and Layer 2 solutions. A Layer 1 solution will change the rules and mechanisms of the original blockchain directly. A Layer 2 solution will use an external, parallel network to facilitate transactions away from the mainchain.   Why is blockchain scalability important? Imagine a new highway being built between a major city and its fast-growing suburb. As the amount of traffic passing through the highway increases and congestion becomes common – especially during rush hours – the average time to get from A to B can increase significantly. No wonder, given that road infrastructure has its limited capacity and the demand is ever-growing. Now, what can the authorities do to help more commuters travel via this route faster? One solution would be to improve the highway itself, adding extra lanes to each side of the road. This, however, is not always practical as it is an expensive solution that would cause considerable trouble to those already using the highway. An alternative is to get creative and consider various approaches not associated with making changes to the core infrastructure, such as building additional service roads or even launching a light rail transit line along the highway. In the world of blockchain technology, the primary highway would be a Layer 1 (the main network), while the additional service roads would be Layer 2 solutions (secondary network to improve the overall capacity). Bitcoin, Ethereum, and Polkadot are all considered Layer 1 blockchains. They are the base-layer blockchains that process and record transactions for their respective ecosystems, featuring a native cryptocurrency – typically used to pay fees and provide broader utility. Polygon is one example of a Layer 2 scaling solution for Ethereum. The Polygon network regularly commits checkpoints to the Ethereum mainnet to update it of its status. The throughput capability is a vital element of a blockchain. It’s a measure of speed and efficiency that shows how many transactions can be processed and recorded within a specific timeframe. As the number of users increases and the number of simultaneous transactions goes up, a Layer 1 blockchain can become slow and expensive to use. This is especially true of Layer 1 blockchains which use a Proof of Work mechanism as opposed to Proof of Stake.    Current Layer 1 issues Bitcoin and Ethereum are good examples of Layer 1 networks with scaling issues. Both secure the network through a distributed consensus model. This means that all transactions are verified by multiple nodes before being validated. The so-called mining nodes all compete to solve a complex computational puzzle, and the successful miners are rewarded in the network’s native cryptocurrency.  In other words, all transactions require the independent verification of several nodes before getting confirmed. This is an efficient way of logging and recording correct, verified data to the blockchain while mitigating the risk of attack by bad actors. However, once you have a network as popular as Ethereum or Bitcoin, the throughput demand becomes an ever-increasing issue. In times of network congestion, users will face slower confirmation times and higher transaction fees.   How do Layer 1 scaling solutions work? There are several options available to Layer 1 blockchains that can increase throughput and overall network capacity. In the case of blockchains using Proof of Work, a transition to Proof of Stake could be an option to increase transactions per second (TPS) while reducing processing fees. Still, there are mixed views in the crypto community regarding the benefits and long-term implications of Proof of Stake. Scaling solutions on Layer 1 networks are typically introduced by the project’s development team. Depending on the solution, the community will need to hard fork or soft fork the network. Some small changes are backward compatible, such as Bitcoin’s SegWit update.  Larger changes, like increasing the Bitcoin’s block size to 8MB, require a hard fork. This creates two versions of the blockchain, one with the update and one without. Another option to increase a network’s throughput is sharding. This splits a blockchain’s operations across multiple smaller sections that can process data simultaneously rather than sequentially.   How do Layer 2 scaling solutions work? As discussed, Layer 2 solutions rely on secondary networks that work in parallel or independent of the main chain. Rollups Zero-knowledge rollups (the most common kind) bundle off-chain Layer 2 transactions and submit them as one transaction on the main chain. These systems use validity proofs to check the integrity of transactions. Assets are held on the original chain with a bridging smart contract, and the smart contract confirms the rollup is functioning as intended. This provides the security of the original network with the benefits of a less resource-intensive rollup.  Sidechains Sidechains are independent blockchain networks with their own sets of validators. This means the bridging smart contract on the main chain doesn’t verify the validity of the sidechain network. Therefore, you need to trust the sidechain is operating correctly as it’s able to control assets on the original chain.  State channels A state channel is a two-way communication environment between the transacting parties. The parties seal off a part of the underlying blockchain and connect it to an off-chain transaction channel. This is usually done via a pre-agreed smart contract or a multi-signature. The parties then execute a transaction or a batch of transactions off-chain, without immediately submitting transaction data to the underlying distributed ledger (i.e., the main chain). Once all transactions in the set are complete, the final “state” of the channel is broadcasted to the blockchain for validation. This mechanism allows to improve transaction speed and increases the overall capacity of the network. Solutions like the Bitcoin Lightning Network and Ethereum's Raiden operate based on state channels. Nested blockchains This solution relies on a set of secondary chains that sit on top of the main, “parent” blockchain. Nested blockchains operate according to the rules and parameters set by the parent chain. The main chain doesn’t participate in executing transactions and its role is limited to dispute resolution when necessary. The day-to-day work is delegated to “child” chains that return the processed transactions to the main chain upon completion off the main chain. OmiseGO’s Plasma project is an instance of a Layer 2 nested blockchain solution.   Limitations of Layer 1 and Layer 2 scaling solutions Both Layer 1 and Layer 2 solutions have unique advantages and disadvantages. Working with Layer 1 can provide the most effective solution for large-scale protocol improvements. However, this also means that validators must be convinced to accept changes through a hard fork. One possible example where validators may not want to do this is changing from Proof of Work to Proof of Stake. Miners will lose income by this switch to a more efficient system, disincentivizing them from improving scalability. Layer 2 provides a much quicker way to improve scalability. However, depending on the method used, you can lose a lot of the security of the original blockchain. Users trust networks like Ethereum and Bitcoin for their resilience and track record of security. By taking aspects off the Layer 1, you often have to rely on the Layer 2 team and network for efficiency and security.   What’s next after Layer 1 and Layer 2? One key question is whether we will even need Layer 2 solutions as Layer 1s become more scalable. Existing blockchains see improvements, and new networks are created with good scalability already. However, it will take a long time for major systems to improve their scalability, and it’s not guaranteed. The most likely option is for Layer 1s to focus on security, and allow Layer 2 networks to tailor their services to specific use cases.  In the near future, there’s a good chance large chains like Ethereum will still dominate due to their large user and developer community. However, its large, decentralized validator set and trusted reputation creates a solid base for targeted Layer 2 solutions.     Closing thoughts Since crypto began, the hunt for improved scalability has created a two-pronged approach with Layer 1 improvements and Layer 2 solutions. If you’ve got a diverse crypto portfolio, there’s a good chance you already have exposure to both Layer 1 and Layer 2 networks. Now, you understand the differences between the two as well as the different approaches to scaling that they offer.
Altcoins: (SNX) Synthetix - What Is It? How Does SNX Work? | Binance Academy

Altcoins: (SNX) Synthetix - What Is It? How Does SNX Work? | Binance Academy

Binance Academy Binance Academy 02.06.2022 15:05
TL;DR Synthetix is a DeFi protocol for synthetic crypto assets. Born from the ashes of the 2018 bear market along with Maker, Compound, Uniswap, and a few others, it has paved the way for decentralized finance to become a major sector in the cryptocurrency space.   Introduction Synthetix started as a stablecoin project called Havven, before doing a major pivot during the crypto bear market to become a protocol for synthetic assets. The community behind Synthetix pioneered many of the mechanisms that are now considered to be a standard in the DeFi landscape. Continuing to be one of the core building blocks of DeFi on Ethereum, and with an impending launch on a layer 2 scaling solution, Synthetix will likely remain a key part of DeFi for the foreseeable future. Learn more on Binance.com What is Synthetix? Synthetix is a synthetic asset protocol that allows for the issuance of synthetic assets on Ethereum. You could think of a synthetic asset as a kind of derivative product. It gives you a way to get exposure to an asset without having to own it. But what can be a synthetic asset, or “Synth”? Well, almost anything that has a reliable price feed. Some examples are cryptocurrencies like BTC or ETH, commodities like gold and silver, and fiat currencies like USD. Even inverse Synths exist that track the inverse of the underlying asset, giving traders an easy way to get short exposure or hedge existing holdings and yield farming positions. The idea is that by using Synthetix, traders can get exposure to certain assets that don’t exist on-chain. Synthetix also allows for the creation of indexes like the DeFi index, which tracks the price of a basket of multiple DeFi assets.   How does Synthetix work? Synths use decentralized price oracles to track the prices of the underlying assets. It’s important to note that a Synth is different from a cryptocurrency backed by a reserve, like a stablecoin. Instead of a more conventional reserve, what gives a Synth value is various complicated on-chain mechanisms and smart contracts. For example, BUSD is a stablecoin where each BUSD represents 1 USD in reserve. Similarly, Paxos’ Pax Gold (PAXG) is backed by physical gold bars. In a way, if you own PAXG, you own an equivalent amount in the underlying gold reserve. In other words, PAXG is a token that represents the ownership of gold. Synths are different. They track the price of assets through a complex mechanism of smart contracts. Owning sXAU doesn’t mean that you own any underlying gold. It just means you have exposure to the price of gold. So why would you want to hold such an asset? As we’ve mentioned before, it’s a good way to get price exposure to an asset without actually having to own it. What also makes Synths useful is that since they are ERC-20 tokens on Ethereum, other DeFi protocols can easily integrate them. Synths can be deposited to places like Uniswap, Sushi, or Curve, and you can provide liquidity and earn trading fees just like with other ERC-20 tokens.   Synthetix Network Token (SNX) So, if they aren’t backed by the underlying asset, what are they collateralized by then? Primarily, by the platform’s token – SNX. More recently, Synthetix also added ETH as supported collateral. Synthetix works with overcollateralization – that is, each synthetic asset is collateralized by more value than it represents. Synths are created by users staking collateral (SNX) and minting a synthetic asset against it. In other words, each Synth is essentially debt against the posted collateral. Each debt position needs to maintain a certain collateralization ratio. This ratio is determined by governance. It aims to ensure that Synths are sufficiently collateralized and there is no deficit in the system even during outlier events such as a big market crash. Stakers must manually manage this ratio by minting and burning Synths (debt) or adding more collateral to ensure they can continue to earn staking rewards.   Infinite liquidity and no slippage Synthetix markets itself as an exchange with “infinite liquidity” since there isn’t an order book or slippage in the traditional sense. Pricing is rather determined by an algorithmic mechanism, more similar to how an automated market maker (AMM) works than a central limit order book (CLOB). In essence, when you make a trade on Synthetix, you don’t trade against an individual or market maker. Instead, you repay part of your debt from the debt pool and borrow the same amount of debt in another Synth. It’s a complicated mechanism with many nuances, but the important thing to understand is that trading on Synthetix isn’t the same as trading on Binance’s order book or Uniswap’s liquidity pools.   Synthetix & Optimism So why isn’t the entire NASDAQ onboarded to Synthetix exchange already? Well, the fees and execution guarantees on the Ethereum mainnet aren’t exactly suitable for most traders and trading styles. This is why the Synthetix contracts will be deployed on a layer 2 solution called an optimistic rollup – specifically, an implementation of it by the company Optimism. Rollups are a great way to scale blockchains. Unlike other scaling solutions like sidechains, which are responsible for their own security using a distinct validator set, rollups get security from the Ethereum blockchain. This is a key distinction. Rollups can get the same scaling benefits as sidechains (e.g., increased transaction throughput and lower transaction fees), without compromising much on security. The Synthetix contracts, however, are one of the more complex smart contracts out there. Porting them to such cutting-edge technology in the most secure way possible isn’t an easy feat. Optimism has been working with Synthetix for a while in the background, and the deployment is expected to happen on mainnet sometime in summer 2021.   Closing thoughts Synthetix is a synthetic asset protocol on Ethereum. Synths track the price of an underlying asset without users actually having to own the asset itself. Synthetix is one of the oldest DeFi projects out there that has a decentralized governance structure through the SynthetixDAO. Although not the easiest project to understand, Synthetix may experience increased adoption as it gets deployed on Optimism’s rollup implementation.
Energy and Metals Decline, Wheat Rallies Amid Disappointing Chinese Growth

Supporting EUR, USD And Others - What Is Interest Rate? What Is A Negative Interest Rate | Binance Academy

Binance Academy Binance Academy 01.06.2022 16:55
TL;DR It doesn’t make much sense to lend money for free. If Alice wants to borrow $10,000 from Bob, Bob will need a financial incentive to loan it to her. That incentive comes in the form of interest – a kind of fee that gets added on top of the amount Alice borrows. Interest rates profoundly impact the broader economy, as raising or lowering them greatly affects people’s behavior. Broadly speaking: Higher interest rates make it attractive to save money because banks pay you more for storing your money with them. It’s less attractive to borrow money because you need to pay higher amounts on the credit you take out. Lower interest rates make it attractive to borrow and spend money – your money doesn’t make much by sitting idle. What’s more, you don’t need to pay huge amounts on top of what you borrow. Learn more on Binance.com Introduction As we’ve seen in How Does the Economy Work?, credit plays a vital role in the global economy. In essence, it’s a lubricant for financial transactions – individuals can leverage capital that they don’t have available and repay it at a later date. Businesses can use credit to purchase resources, use those resources to turn a profit, then pay the lender. A consumer can take out a loan to purchase goods, then return the loan in smaller increments over time. Of course, there needs to be a financial incentive for a lender to offer credit in the first place. Often, they’ll charge interest. In this article, we’ll take a dive into interest rates and how they work.   What is an interest rate? Interest is a payment owed to a lender by a borrower. If Alice borrows money from Bob, Bob might say you can have this $10,000, but it comes with 5% interest. What that means is that Alice will need to pay back the original $10,000 (the principal) plus 5% of that sum by the end of the period. Her total repayment to Bob is, therefore, $10,500. So, an interest rate is a percentage of interest owed per period. If it’s 5% per year, then Alice would owe $10,500 in the first year. From there, you might have: a simple interest rate – subsequent years incur 5% of the principal or  a compounded interest rate – 5% of the $10,500 in the first year, then 5% of $10,500 + $525 = $11,025 in the second year, and so on.   Why are interest rates important? Unless you transact exclusively in cryptocurrencies, cash, and gold coins, interest rates affect you, like most others. Even if you somehow found a way to pay for everything in Dogecoin, you’d still feel their effects because of their significance within the economy. Take a commercial bank – their whole business model (fractional reserve banking) revolves around borrowing and lending money. When you deposit money, you’re acting as a lender. You receive interest from the bank because they lend your funds to other people. In contrast, when you borrow money, you pay interest to the bank. Commercial banks don’t have much flexibility when it comes to setting the interest rates – that’s up to entities called central banks. Think of the US Federal Reserve, the People’s Bank of China, or the Bank of England. Their job is to tinker with the economy to keep it healthy. One function they perform to these ends is raising or lowering interest rates. Think about it: if interest rates are high, then you’ll receive more interest for loaning your money. On the flip side, it’ll be more expensive for you to borrow, since you’ll owe more. Conversely, it isn’t very profitable to lend when interest rates are low, but it becomes attractive to borrow. Ultimately, these measures control the behavior of consumers. Lowering interest rates is generally done to stimulate spending in times when it has slowed, as it encourages individuals and businesses to borrow. Then, with more credit available, they’ll hopefully go and spend it. Lowering interest rates might be a good short-term move to rejuvenate the economy, but it also causes inflation. There’s more credit available, but the amount of resources remains the same. In other words, the demand for goods increases, but the supply doesn’t. Naturally, prices begin to rise until an equilibrium is reached. At that point, high interest rates can serve as a countermeasure. Setting them high cuts the amount of circulating credit, since everyone begins to repay their debts. Because banks offer generous rates at this stage, individuals will instead save their money to earn interest. With less demand for goods, inflation decreases – but economic growth slows.   ➟ Looking to get started with cryptocurrency? Buy Bitcoin on Binance!   What is a negative interest rate? Often, economists and pundits speak of negative interest rates. As you can imagine, these are sub-zero rates that require you to pay to lend money – or even to store it at a bank. By extension, it makes it costly for banks to lend. Indeed, it even makes it costly to save. This may seem like an insane concept. After all, the lender is the one assuming the risk that the borrower may not repay the loan. Why should they pay?  This is perhaps why negative interest rates are something of a last resort to fix struggling economies. The idea comes from a fear that individuals may prefer to hold onto their money during an economic downturn, preferring to wait until it recovers to engage in any economic activity.  When rates are negative, this behavior doesn’t make sense – borrowing and spending appear to be the most sensible choices. This is why negative interest rates are considered to be a valid measure by some, under extraordinary economic conditions.   Closing thoughts On the surface, interest rates appear to be a relatively straightforward concept to grasp.  Nevertheless, they’re an integral part of modern economies – as we’ve seen, adjusting them can fundamentally alter the behavior of individuals and businesses. This is why central banks take such a proactive role in using them to keep nations’ economies on track. Do you have more questions about interest rates and the economy? Check out our Q&A platform, Ask Academy, where the Binance community will answer your questions.
The Forex Market Is Under Strong Pressure From Geopolitical Events And Statistics

Inflation - What Is It? What Causes Inflation? Is Inflation Good For Us!? | Binance Academy

Binance Academy Binance Academy 31.05.2022 11:48
Introduction Ever hear your grandmother talk about how everything was cheaper when she was younger? That’s because of inflation. It’s caused by irregularities in supply and demand for products and services, leading to an increase in prices. It has its advantages, but overall, too much inflation is a bad thing: why would you want to save your money if it’s going to be worth less tomorrow? To control inflation when it gets too high, governments deploy policies that aim to reduce spending.  Learn more on Binance.com Contents Introduction Causes of inflation Demand-pull inflation Cost-push inflation Built-in inflation Remedies to inflation Higher interest rates Altering fiscal policy Measuring inflation with a price index Pros and cons of inflation Pros of inflation Cons of inflation Closing thoughts   Introduction Inflation can be defined as the reduction of the purchasing power of a given currency. It’s the sustained increase in the price of goods and services in an economy. While “relative-price change” usually means just one or two goods have increased in price, inflation refers to an increase in costs of nearly all items in the economy. Also, inflation is a long-term phenomenon – the increase in prices has to be sustained, and not just a sporadic event. Most countries perform annual measurements of inflation rates. Generally, you’ll see inflation expressed as a percentage change: its growth or decline relative to the previous period. In this article, we’ll go over the different causes of inflation, ways to measure it, and the impacts (both positive and negative) that it can have on the economy.   Causes of inflation On a basic level, we can describe two common causes of inflation. First, a rapid increase in the amount of actual currency in circulation (supply). For instance, when European conquistadors subjugated the western hemisphere in the 15th century, gold and silver bullion flooded into Europe and caused inflation (the supply was too high). Second, inflation can occur due to a supply shortage in a specific good that is in high demand. This can then spark a rise in the price of that good, which may ripple through the rest of the economy. The result can be a general rise in prices across nearly all goods and services. But if we dive deeper, we can describe different kinds of events that may lead to inflation. Here, we’ll distinguish between demand-pull inflation, cost-push inflation, and built-in inflation. There are other variations, but these are the major ones in the “triangle model” proposed by economist Robert J. Gordon.   Demand-pull inflation Demand-pull inflation is the most common kind of inflation, caused by an increase in spending. In this instance, demand outweighs the supply of goods and services – a phenomenon that causes prices to rise. To illustrate this, let’s consider a marketplace where a baker sells his goods. He can produce approximately 1,000 loaves of bread per week. This works well, as he sells roughly that amount every week. But suppose then that there’s a massive increase in the demand for bread. Perhaps economic conditions have improved, meaning that consumers have more to spend. As such, we’re likely to see the price of the baker’s loaves increase. Why? Well, our baker is operating at full capacity when he makes the 1,000 loaves. Neither his staff nor his ovens can physically produce more than that number. He could build more ovens and hire more staff, but this takes time. Until then, we have too many customers and not enough bread. Some customers will be willing to pay higher prices for a loaf, so it’s only natural that the baker increases his pricing accordingly. Now, apart from the increased demand for bread, imagine that the improved economic conditions also led to a higher demand for milk, oil, and several other products. This is what defines demand-pull inflation. People are buying more and more goods in a way that demand outpaces supply – causing prices to rise.   Cost-push inflation Cost-push inflation occurs when price levels rise as a result of increased raw material or production costs. As the name suggests, those costs are “pushed” to the consumer. Let’s revisit the baker from earlier. He’s built his new ovens and hired additional staff to produce 4,000 loaves of bread a week. For the moment, the supply caters to the demand, and everybody’s happy. One day, the baker gets some unfortunate news. The wheat harvest has been particularly bad this season, meaning that there’s not enough supply to go around all the bakeries in the region. The baker must pay more for the wheat needed to produce the loaves. With this added expenditure, he needs to raise the prices he charges, even though consumer demand hasn’t increased. Another possibility is that the government increases the minimum wage. This adds to the baker’s production costs, so, once again, he must raise the prices of the completed loaves. On the grand scale, cost-push inflation is often caused by shortages in resources (like wheat or oil), increased government taxation on goods, or falling exchange rates (resulting in imports costing more).   Built-in inflation Built-in inflation (or hangover inflation) is a type of inflation that arises from past economic activity. As such, it can be triggered by the previous two forms of inflation if they persist over time. Built-in inflation is closely related to the concepts of inflationary expectations and price-wage spiral.  The first describes the idea that – after periods of inflation – individuals and businesses expect inflation to persist in the future. If there was inflation in the previous years, employees are more likely to negotiate higher salaries, causing businesses to charge more for their products and services. The price-wage spiral is a concept that illustrates the tendency of built-in inflation to cause more inflation. It may occur when employers and workers can’t reach an agreement on the value of their wages. While workers demand higher wages to protect their wealth from expected inflation, employers are forced to increase the costs of their products. This may lead to a self-reinforcing cycle, where workers demand for even higher salaries in response to the increased costs of goods and services – and the cycle continues.   Remedies to inflation     Unchecked inflation can be damaging to the economy, so it stands to reason that governments take a proactive stance in limiting its impact. They can do this by tweaking the money supply and making changes to monetary and fiscal policy. Central banks (like the United States Federal Reserve) have the power to alter the fiat money supply by increasing or decreasing the amount in circulation. A common example of this is quantitative easing (QE), where central banks purchase bank assets to infuse the economy with freshly-printed money. This measure can actually aggravate inflation, so it isn’t used when inflation is the issue. The opposite of QE is quantitative tightening (QT), which is a monetary policy that can reduce inflation by decreasing the money supply. However, there is little evidence that supports QT as a good remedy to inflation. In practice, most central banks control inflation by raising the interest rates.   Higher interest rates Higher interest rates make it more expensive to borrow money. As a result, credit becomes less attractive to consumers and businesses. At the consumer level, increased interest rates will discourage spending, causing demand for goods and services to decrease. It becomes attractive to save during these periods, and even better for those that lend money to earn interest. However, the economy’s growth might get constrained, as businesses and individuals are more cautious of taking out credit to invest or spend.   Altering fiscal policy While most countries make use of monetary policies to control inflation, altering fiscal policy is also an option. Fiscal policy refers to the governments’ spending and adjustment of taxes to influence the economy.  If governments increase the income tax they collect, for example, then individuals once again have less disposable income. In turn, there’s less demand in the market, which should theoretically reduce inflation. However, this is a dangerous route to take, as the public might react unfavorably to higher taxes.   Measuring inflation with a price index So we’ve outlined the measures to combat inflation, but how do we actually know that it needs combatting in the first place? The first step, evidently, is to measure it. Typically, this is done by tracking an index over a set period of time. In many nations, a Consumer Price Index (or CPI) is the go-to measure of inflation. A CPI takes into account the prices of a wide variety of consumer products, using a weighted average to value a basket of items and services bought by households. This is done every so often, and the score can then be compared with historical ones. Entities like the US’s Bureau of Labor Statistics (BLS) collect this data from stores all around the country to ensure their calculations are as accurate as possible.  You might look at a CPI score of 100 for the “base year” in your calculation, and then at a score of 110 two years later. You could then reach the conclusion that, over two years, prices have increased by 10%. A small amount of inflation isn’t necessarily a bad thing. It’s a natural occurrence in the fiat currency systems of today and is somewhat beneficial as it encourages spending and borrowing. Keeping a close eye on the rate of inflation is important, however, to ensure that it doesn’t have any negative effects on the economy.   ➟ Looking to get started with cryptocurrency? Buy Bitcoin on Binance!   Pros and cons of inflation At first glance, inflation may appear to be something worth avoiding altogether. But it remains part and parcel of modern economies, so it’s a much more nuanced subject in reality. Let’s look at some of the advantages and disadvantages.   Pros of inflation Increased spending, investment, and borrowing As we touched on earlier, a low rate of inflation can benefit the economy by stimulating spending, investment, and borrowing. It makes more sense to acquire goods or services immediately, as inflation makes it so that the same amount of cash will have reduced purchasing power in the future.   Higher profits Inflation prompts companies to sell their goods and services at higher prices, so as to protect themselves from the effects of inflation. They can justify these increases, but they can also raise prices a bit higher than needed to pocket additional profits.   It’s better than deflation As you might guess from the name, deflation is the opposite of inflation, marked by a decrease in prices over time. Since prices are falling, delaying purchases makes more sense to consumers, as they can get better prices in the near future. This can negatively impact the economy, as there isn’t as much demand for goods and services.  Historically, periods of deflation have resulted in higher unemployment rates and a shift towards saving instead of spending. While not necessarily a bad thing for the individual, deflation tends to hinder economic growth.   Cons of inflation Currency devaluation and hyperinflation Finding the right rate of inflation is difficult, and failing to control it can yield catastrophic consequences. Ultimately, it erodes the wealth that individuals hold: if you store $100,000 in cash under your mattress today, it won’t have the same purchasing power in ten years. High inflation can lead to hyperinflation, which is said to occur when prices rise by more than 50% in one month. Paying $15 for a basic necessity that only cost $10 weeks prior isn’t ideal, but it rarely stops there. In periods of hyperinflation, prices often far exceed the 50% rate, essentially destroying the currency and the economy.   Uncertainty If inflation rates are high, uncertainty can take hold. Individuals and businesses are unsure of where the economy is heading, so they’ll be more cautious with their money – leading to less investment and less economic growth.   Government interventionism Some are opposed to the idea of the government attempting to control inflation, citing free-market principles. They argue that the government’s ability to “create new money” (or Brrrrr, as it’s popularly known in cryptocurrency circles) undermines natural economic principles.   Closing thoughts The effects of inflation are such that we witness prices increase over time, causing the cost of living to rise. It’s a phenomenon that we’ve come to accept – after all, if it’s controlled correctly, inflation can be beneficial to the economy. In today’s world, the best remedies appear to lie in flexible fiscal and monetary policies, which allow governments to adapt to keep rising prices in check. However, these policies must be very carefully implemented, or they could end up causing further damage to the economy.
What's The Difference Between Cryptocurrencies [Bitcoin (BTC), ETH, XRP] And Stocks? | Binance Academy

What's The Difference Between Cryptocurrencies [Bitcoin (BTC), ETH, XRP] And Stocks? | Binance Academy

Binance Academy Binance Academy 30.05.2022 15:49
TL;DR Cryptocurrencies are digital assets that run on cryptographically secured distributed networks. They can be used as a medium of exchange and store of value. Stocks represent fractional ownership of shares in a company. While they are different asset classes, both crypto and stocks are tradeable and can be seen as investment vehicles.    Introduction Stocks are a long-established asset class that can yield both long and short-term returns. Crypto is a newer financial instrument that is prone to higher price volatility and risk. While both instruments attract traders and investors, cryptocurrencies are often seen as an alternative to more traditional assets. That said, there can be profitable strategies in both markets. This article breaks down the key differences between the two assets as well as their pros and cons.      What is cryptocurrency?  In simple terms, cryptocurrencies are digital currencies powered by blockchain technology. They rely on cryptographic techniques to secure and verify transactions and are typically used as a medium of exchange and a store of value. Most cryptocurrencies run on decentralized networks, and their market value is driven by supply and demand. What is a stock? Stocks represent partial ownership of equity in a business, and they reflect the value of a functioning company. Sometimes, the owner of a stock is also entitled to a share of the company's profits in the form of a dividend. The value of a stock can move according to the company’s performance and other factors such as relevant news announcements.    What are the main differences between cryptocurrencies and stocks? Both cryptocurrencies and stocks can be used by investors to build wealth. Yet, investing in stocks is different from investing in crypto.  Unlike stocks, investment in crypto doesn’t come with ownership of a share of a company. Crypto investors also don’t receive dividends in the traditional sense. Instead, one can lend or stake their crypto tokens for passive income.  There are also major differences in how crypto and stocks are traded. You can buy crypto at any digital currency exchange at any time of day and night, while stock exchanges operate with limited opening hours on weekdays.    Should I invest in cryptocurrency or stocks? Both asset classes have their advantages and limitations. The decision depends on your risk tolerance and other preferences. Ultimately, what drives the success of your investment is your ability to weigh the risks and rewards and not the investment vehicles that you use. Many experienced investors diversify their portfolios, getting exposure to both cryptocurrency and stocks.   Pros and cons of investing in cryptocurrency Pros  Accessible: Crypto is borderless, and anyone with an internet connection can use it.  Decentralized: Most cryptocurrency systems don’t rely on a central authority, making crypto resistant to censorship and centralized control. Inflation-resistant: Cryptocurrencies aren’t directly influenced by central banks’ monetary policies, so their prices are less malleable to inflation. However, cryptocurrencies are not all the same, so it’s important to consider the issuance rate and supply of each crypto asset. Flexible: Compared to stocks, there are more ways for investors to grow their crypto holdings besides trading. Crypto investors can get profit from yield farming, staking, and providing liquidity. Products such as Binance Earn are a great example of how you can increase your crypto holdings.  Varied: The value of many tokens is not just monetary. For one, Fan Tokens can provide token holders exclusive benefits and privileges with their favorite sports teams or brands. Some cryptocurrencies are governance tokens, which give holders the right to participate in the development of a respective project or protocol. Cons Price volatility: The crypto market is famously prone to dramatic price swings. The potential for quick gains can be very attractive to new investors. However, they should be aware that its flipside is the potential for equally dramatic losses. Imperfect regulation: Cryptocurrencies are legal in many countries, but they're not fully and universally regulated. Investors should be mindful of potential compliance issues and do legal research according to their location.  Custody risks: Cryptocurrencies like Bitcoin require a private key to access the tokens stored in a digital crypto wallet. Forgetting a seed phrase or losing a physical crypto wallet could result in losing access to your crypto forever. Returns not guaranteed: Like any financial market, there are no guaranteed returns with crypto. While Bitcoin and other altcoins performed well in the long term, there is no guarantee that they will continue going up in the future, and there is always a chance they may not do well during a shorter investment period.    Pros and cons of investing in stocks Pros Increasingly accessible: It is becoming easier to invest in stocks, with many online platforms and mobile apps emerging in the market. Many such offerings have intuitive interfaces and are integrated with other financial services. Regulated: Many governments heavily regulate the stock market. For example, in the US, publicly traded companies must disclose information that can impact their stock value to the Securities and Exchange Commission (SEC) — a government oversight agency in charge of investor protection.  (Somewhat) inflation-resistant: Certain types of stocks, such as Treasury inflation-protected securities (TIPS), can act as a hedge against inflation. Variety: There is a wide selection of stocks across different industries and sectors that are available to retail investors. Traders can choose equity based on a large number of criteria, from the company’s business model and location to whether or not they pay dividends. Cons Volatility: The stock market, too, isn't immune to sudden changes in prices in the short term. If a company is doing well, its stock prices will likely go up. Similarly, if a company reports losses or receives bad press, the stock value will likely go down. Furthermore, some stocks may be more volatile than others. For example, the value of growth stocks tends to fluctuate more than that of blue-chip stocks that represent shares in established companies with flawless reputations. Higher fees: In most cases, the fees associated with stock exchange transactions are relatively high, and there are more of them compared to cryptocurrency trading. On top of brokerage fees and commissions, there are also other charges when you purchase or sell your stocks. Returns not guaranteed: Like any financial market, there are no guaranteed returns with stocks. While there are stocks that often outperform alternative investments in the long term, there is a chance that they may not do well during a shorter investment period.     Closing thoughts  Although there are clear differences between crypto and stocks, they also have similarities. Both crypto and stocks are valid investment choices, and they can serve different purposes in your portfolio. Regardless of which one you choose, always make sure you're aware of the associated risks and DYOR.
Binance Academy: Coin Burn - What Is It?

Binance Academy: Coin Burn - What Is It?

Binance Academy Binance Academy 27.05.2022 10:56
Note: The first section of this article explains the previous burn function of Binance Coin while it was on the Ethereum network. Binance Coin is now on the Binance Chain, so the burn function behaves differently. However, the discussion still applies to all current ERC-20 tokens that support the burn function.   Coin burning is the process of permanently removing cryptocurrencies from circulation, reducing the total supply. To explain how this works, we will be using Binance Coin (the old BNB ERC-20) as an example. The previous contract for BNB, while it was on the Ethereum network, can be found here. When the Binance Coin was still part of the Ethereum network, Binance performed periodic Coin Burn events using a smart contract function known as burn function. The BNB burning events are scheduled to occur every quarter until 100,000,000 BNB are finally destroyed, which represents 50% of the total BNB ever issued (200,000,000 BNB). The amount of BNB coins to be burned is based on the number of trades performed on the exchange within a 3-months period. So after each quarter, Binance burns BNB according to the overall trading volume. However, it seems that a considerable amount of people still fail to understand how Coin Burns are executed. The present article aims to provide relevant information in regards to the burn function and the quarterly BNB Coin Burn events. Learn more on Binance.com How does it work? Basically speaking, a token burn event happens in the following order: A cryptocurrency holder will call the burn function, stating that they want to burn a nominated amount of coins. The smart contract will then verify that the person has the coins in their wallet and that the number of coins stated is valid. The burning mechanism only allows positive numbers. If the person doesn’t have enough coins, or if the stated number is invalid (e.g., 0 or -5), the burn function won’t be executed. If they do have enough, then the coins will be subtracted from that wallet. The total supply of that coin will then be updated, meaning that the coins were permanently burned. If you execute the burn function to burn your coins, they will be destroyed forever. It's impossible to recover coins after they are burned, and thanks to blockchain technology, the proof of burn can be easily verified on a blockchain explorer.   In other words, the Binance Coin contract has a function known as burn function, which is available to anyone at any time. By calling this function, you can permanently remove a nominated amount of coins from the circulating supply of a blockchain network. As mentioned, every token burning event is recorded as a transaction on the blockchain. The burning mechanism is transparent, and anyone is able to verify that the coins have been destroyed. As soon as a quarterly Coin Burn takes place, Binance makes an official announcement that specifies the amount of BNB coins that were burned (based on the trading volume for that quarter). You can verify all BNB ERC-20 Coin Burn transactions on an Ethereum blockchain explorer, such as Etherscan. The burning transactions are public, irreversible, and permanently recorded on the blockchain. On Etherscan, you can see the details about a burning transaction on the Input Data box.   If you click Decode Input Data, you can check the amount of BNB that was burned. The number includes the 18 decimals, so in this example, 1,623,818 BNB were burned.     The current Binance Burn function Since the launch of the Binance Chain, the BNB ERC-20 tokens were gradually swapped by the native Binance Coins (BNB BEP-2). This means that the Coin Burn events now take place on the Binance Chain and not on the Ethereum network. It’s worth noting that all BNB ERC-20 coin burns were “replicated” on the Binance Chain to ensure that the total supply is the same. As such, the 11,654,397 BNB ERC-20 tokens that were previously burned on the Ethereum network were also burned on the Binance Chain (right after the mainnet launch). You can check this specific burning transaction on the Binance Chain Explorer. You can also check the total supply of BNB. The current BNB coin burn mechanism doesn’t rely on a smart contract anymore but on a specific command executed on the Binance Chain. You can find more details on the Binance Chain Docs page. As of April 2022, Binance completed 19 BNB Coin Burn events. In total, 36,723,852.37 BNB coins were burned, reducing 18.36% of the Total Supply (now at 163,292,674.61 BNB). Coin Burn BNB Burned Approx. BNB Price Approx. USD Value % of Total Supply #1 (Oct 2017) 986,000 $1.52 $1,500,000 0.49% #2 (Jan 2018) 1,821,586 $21.96 $40,000,000 0.91% #3 (Apr 2018) 2,220,314 $13.52 $30,000,000 1.11% #4 (Jul 2018) 2,528,767 $12.93 $32,700,000 1.26% #5 (Oct 2018) 1,643,986 $10.34 $17,000,000 0.82% #6 (Jan 2019)  1,623,818 $5.83 $9,400,000 0.81% #7 (Apr 2019) 829,888 $18.79 $15,600,000 0.41% #8 (July 2019) 808,888 $29.47 $23,800,000 0.40% #9 (Oct 2019) 2,061,888 $17.80 $36,700,000 1.03% #10 (Jan 2020) 2,216,888 $17.50 $38,800,000 1.11% #11 (April 2020) 3,373,988 $15.55 $52,466,000 1.69% #12 (July 2020) 3,477,388 $17.40 $60,500,000 1.74% #13 (Oct 2020) 2,253,888 $30.17 $68,000,000 1.13% #14 (Jan 2021) 3,619,888 $45.80 $165,791,000 1.81% #15 (Apr 2021) 1,099,888 $541.25 $595,314,380 0.55% #16 (Jul 2021) 1,296,728 $303.59 $393,673,653 0.65% #17 (Oct 2021) 1,335,888 $478.68 $639,462,868 0.66% #18 (Jan 2022) 1,684,387.11 $474 $798,399,490 0.84% #19 (Apr 2022) 1,839,786.26 $403.22 $741,840,738 0.91% TOTAL 36,723,852.37 - $3,760,948,130 18.36% BNB Destruction History (Quarterly Coin Burn).
The Developments In The Crypto Sector Made It Into The Record Books (The Guinness World Records)

Blockchain - What Is It And How Does It Work? | Binance Academy

Binance Academy Binance Academy 26.05.2022 15:36
What is blockchain? In short, a blockchain is a list of data records that works as a decentralized digital ledger. The data is organized into blocks, which are chronologically arranged and secured by cryptography.  The earliest model of a blockchain was created in the early 1990s when computer scientist Stuart Haber and physicist W. Scott Stornetta employed cryptographic techniques in a chain of blocks as a way to secure digital documents from data tampering.  The work of Haber and Stornetta certainly inspired the work of many other computer scientists and cryptography enthusiasts - which eventually led to the creation of Bitcoin as the first decentralized electronic cash system (or simply the first cryptocurrency).   Although blockchain technology is older than cryptocurrencies, it was only after the creation of Bitcoin in 2008 that its potential started to be recognized. Since then, the interest in blockchain technology has been growing gradually, and cryptocurrencies are now being acknowledged on a larger scale. Blockchain technology is mostly used to record cryptocurrency transactions, but it suits many other kinds of digital data and can be applied to a wide range of use cases. The oldest, safest, and largest blockchain network is Bitcoin, which was designed with a careful and balanced combination of cryptography and game theory. Learn more on Binance.com How does blockchain work? In the context of cryptocurrencies, a blockchain consists of a stable chain of blocks, each one storing a list of previously confirmed transactions.  Since the blockchain network is maintained by a myriad of computers spread around the world, it functions as a decentralized database (or ledger). This means that each participant (node) maintains a copy of the blockchain data, and they communicate with each other to ensure that they are all on the same page (or block). Therefore, blockchain transactions occur within a peer-to-peer global network and this is what makes Bitcoin a decentralized digital currency that is borderless, and censorship-resistant. In addition, most blockchain systems are considered trustless because they do not require any kind of trust. There is no single authority in control of Bitcoin. A central part of almost every blockchain is the process of mining, which relies on hashing algorithms. Bitcoin uses the SHA-256 algorithm (Secure hash algorithm 256 bits). It takes an input of any length and generates an output that will always have the same length. The output produced is called a "hash" and, in this case, is always made of 64 characters (256bits). So the same input will result in the same output, no matter how many times the process is repeated. But if a small change is made to the input, the output will change completely. As such, hash functions are deterministic, and in the cryptocurrency world, most of them are designed as a one-way hash function. Being a one-way function means that it is almost impossible to calculate what was the input from the output. One can only guess what the input was, but the odds of guessing it right are extremely low. This is one of the reasons why Bitcoin's blockchain is secure. Now that we know what the algorithm does, let's demonstrate how a blockchain works with a simple example of a transaction. Imagine that we have Alice and Bob along with their Bitcoin balance. Let's say Alice owes Bob 2 Bitcoins. Read next: Altcoins: What Is Monero? Explaining XMR. Untraceable Cryptocurrency!? | FXMAG.COM For Alice to send Bob that 2 bitcoin, Alice broadcasts a message with the transaction that she wants to make to all the miners in the network. In that transaction, Alice gives the miners Bob's address and the amount of Bitcoins she would like to send, along with a digital signature and her public key. The signature is made with Alice's private key, and the miners can validate that Alice, in fact, is the owner of those coins. Once the miners are sure that the transaction is valid, they can put it in a block along with many other transactions and attempt to mine the block. This is done by putting the block through the SHA-256 algorithm. The output needs to start with a certain amount of 0's in order to be considered valid. The amount of 0's needed depends on what's called the "difficulty," which changes depending on how much computing power there is on the network. In order to produce an output hash with the desired amount of 0's in the beginning, the miners add what's called a "nonce" into the block before running it through the algorithm. Since a small change to the input completely changes the output, the miners try random nonces until they find a valid output hash. Once the block is mined, the miner broadcasts that newly mined block to all the other miners. They then check to make sure that the block is valid so that they can add it to their copy of the blockchain and the transaction is complete. But in the block, the miners also need to include the output hash from the previous block so that all blocks are tied together, hence the name blockchain. This is an important part because of the way trust works in the system. Read next: Altcoins: Tether (USDT), What Is It? - A Deeper Look Into The Tether Blockchain| FXMAG.COM Every miner has their own copy of the blockchain on their computer, and everyone trusts whichever blockchain that has the most computational work put into it, the longest blockchain. If a miner changes a transaction in a previous block, the output hash for that block will change, which leads to all the hashes after it changing as well due to the blocks being liked with hashes. The miner would have to redo all of the work in order to make anyone accept his blockchain as the right one. So if a miner wanted to cheat, he would need more than 50% of the network's computing power, which is very unlikely. Network attacks like this are thereby called 51% attacks. The model of making computers work in order to produce blocks is called Proof-of-Work (PoW) there are also other models like Proof-of-Stake (PoS) which do not require as much computing power and are meant to require less electricity while being able to scale to more users.   Follow FXMAG.COM on Google News
Binance Academy: NFT - Virtual Land - What Is It?

Binance Academy: NFT - Virtual Land - What Is It?

Binance Academy Binance Academy 25.05.2022 10:53
TL;DR NFT virtual land is an ownable area of digital land on a metaverse platform. Popular NFT land projects include Decentraland, The Sandbox, and Axie Infinity. NFTs are suited to representing land ownership as each one is unique and easily proves digital ownership. You can use NFT land for advertising, socializing, gaming, and work, among other use cases. The landowner can normally use their plot to host online experiences, display content, or gain benefits in a game. Large brands and celebrities, including Adidas and Snoop Dogg, are also beginning to invest in and use NFT land. The value of a plot is affected by its utility, project, and market speculation. You can purchase NFT land from a project in a land sale or on the secondary market via an NFT exchange, such as the Binance NFT Marketplace or OpenSea. Before purchasing, make sure you understand the risks and use cases of the land and its associated project. In some cases, it might be better to rent instead of buying an NFT land. Introduction The metaverse's development has rapidly created interesting new blockchain use cases. As 2020 was such a massive year for the metaverse and Non-Fungible Tokens (NFTs), it's no wonder that virtual land has become a hot topic. Some NFT sales of land have reached prices greater than properties in the physical world, making the concept difficult to grasp for some. In fact, there are actually a lot of similarities between NFT land and typical real estate. But as a digital asset on the blockchain, NFT land has some unique features to explore. What is the metaverse? The metaverse is an online, virtual world that will combine multiple aspects of our digital and real lives, including work, socializing, and recreation. 2021 saw many tech giants, including Meta (previously Facebook), Microsoft, and Epic Games, begin developing and exploring the space. Blockchain technology plays a crucial role in the metaverse as digital ownership, identity, and economies are central concepts. For a deeper explanation, read our introduction article to the metaverse. What is NFT virtual land? As mentioned, metaverse projects are digital worlds that users can usually explore with 3D avatars. SecondLive, for example, provides areas and venues for concerts, conferences, and expositions. While projects like SecondLive don't let users purchase a permanent virtual reality space, other metaverse worlds do. Developers create large maps of land divided into small parcels to sell on the market. To represent the unique ownership of the area, users purchase NFTs linked to a particular plot of land. You can purchase these plots through a land sale directly from the project or on the secondary market. Exactly what you can do with NFT land depends on each project. Read next: Altcoins: Cardano (ADA) What Is It? - A Deeper Look Into Cardano (ADA) | FXMAG.COM What are the use cases of metaverse land? Apart from speculation, landowners can use their virtual space in various use cases: 1. Advertising - If your plot is in a popular area or district and attracts many visitors, you can charge for advertising space.  2. Socializing -You can host events on your digital land, including concerts, conferences, and community meetups. 3. Gaming - Your NFT land might have a use in an NFT video game. For example, land in Axie Infinity can provide extra resources, tokens, crafting ingredients. 4. Work - Land that can be explored with a 3D avatar can be used as a virtual office space or to provide digital services. PwC Hong Kong will use The Sandbox land in their Web 3.0 advisory services. Are global companies purchasing metaverse land? Prominent celebrities and brands have already begun to purchase land in the metaverse. For example, Snoop Dogg is creating his own Snoop Dogg Metaverse Experience on The Sandbox. Adidas has also purchased space on the platform for their own AdiVerse metaverse experience. Apart from joining in the metaverse and NFT hype, brands and companies will offer users the chance to interact with them by accessing metaverse services, games, and products.     NFT land has even made the jump from retail investors to institutional investors. For example, The Metaverse Group has made headlines purchasing large amounts of digital real estate, which we'll dive into later. The group is even virtually headquartered in Decentraland's Crypto Valley. The consultancy firm PwC also bought plots in Decentraland in December 2021 as part of their web 3.0 advisory services. What affects the price of NFT virtual land? The price of a plot of virtual land is determined similarly to other non-fungible tokens or cryptocurrencies. There are three main factors to examine: 1. Utility - Virtual land differs from many other NFTs as it usually has a variety of use cases. These will differ depending on the platform they're on. For example, digital worlds like Decentraland allow users to customize and create on their land. If your land is in a popular area or receives many visitors, you could charge for advertising. Your land might also provide you benefits in a blockchain video game. You could have improved staking bonuses or experience unique in-game events like in Axie Infinity. 2. The platform - Popular platforms like Decentraland, The Sandbox, or the upcoming My Neighbour Alice tend to have higher prices for their NFT land. This is due to market supply and demand. The user base and interest of these platforms are much higher than smaller projects. 3. Speculation - Large sales of NFT lands in the past have led to an increasing amount of speculation. For example, the NFT real estate company Metaverse Group spent roughly $2.43 million in November 2021 purchasing a parcel of 116 plots of land in Decentraland. Each plot is 16 meters squared, giving them a total area of 1,856 meters squared of land in the Fashion Street district. Read next: Stablecoins In Times Of Crypto Crash. What is Terra (UST)? A Deep Look Into Terra Altcoin. Terra - Leading Decentralised And Open-Source Public Blockchain Protocol | FXMAG.COM Where to buy land in the metaverse There are two main methods for purchasing Metaverse NFT land. You can take part in a land sale and purchase it directly from the project, or you can buy land from other users through a marketplace. An NFT land sale is a good way of buying your land at a lower price than on the secondary market. Most large metaverse projects with NFT land have seen rising prices, meaning buying land in a sale tends to be better. Some projects sell all their plots in one go, while others sell them in rounds.  An NFT exchange is the safest and most reliable way to purchase land on the secondary market. This way, both the buyer and seller are protected by a smart contract that ensures the trades occur smoothly for both parties. Binance NFT Marketplace and OpeaSea are two of the most popular options to use. Binance NFT Marketplace supports Ethereum and Binance Smart Chain, while OpeanSea supports Ethereum, Polygon, and Klaytn.   Tips before buying your first metaverse land Buying NFT land in the metaverse should be treated like any other investment or financial transaction. Make sure to do your own research and consider the points below: 1. Buy your NFT land from a reputable source. If you purchase the land through a project's sale, make sure you have the correct official link. If you buy land from someone else, never make any transfers directly to their wallet. You should always make the sale through a trusted, reputable marketplace or crypto exchange. Binance NFT Marketplace and OpenSea are two possible choices, as previously mentioned. 2. Decide if you want to buy or rent your NFT land. Depending on your needs, you might not need to purchase a piece of land. For example, you might want to host a single event in a popular district. If the platform you're using supports rentals, then the price you pay depends on the plot's traffic, closeness to other important plots, and its size. 3. Consider the NFT land's project carefully. The project you choose will determine the utility and partly the cost of the NFT. If you want to speculate and resell your land, look at the project's fundamentals, such as popularity, number of users, and team. If you're going to sell advertising space or take part in another use case, research which metaverse platforms are most suited to your needs. Not all NFT projects will succeed, so make sure to consider the financial risk before buying NFT lands. If you buy land that has no use or demand, you might end up holding it forever. Closing thoughts To many, the idea of virtual land sales might seem far-fetched. However, you only need to look at the rise of NFTs, digital collectibles, and the metaverse to understand how NFT land has developed.  The idea isn't much different from owning a website or other virtual space. For example, popular domain names have sold for hundreds of thousands of dollars. However, the way NFT lands guarantee ownership is where we see a difference. With the tech world preparing itself for a metaverse future, we shouldn't be surprised to see even more metaverse NFT land for sale soon.
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Binance Academy: Buying Land In Metaverse Explained

Binance Academy Binance Academy 24.05.2022 23:31
TL;DR NFT metaverse land is a plot of virtual real estate represented by a non-fungible token. Depending on the platform, the owner can use their land for socializing, advertising, work, gaming, and other use cases. You can buy NFT metaverse land through the land sale of a project or using an NFT marketplace to buy directly from landowners. You will need a digital wallet and crypto to purchase the land. Land can also be sold to other users on various platforms, and there will be renting mechanisms available in the future. When buying your NFT land, always purchase it from a project in a land sale or securely on the secondary market via a trusted NFT exchange. Make sure you fully understand the land's associated project and consider the financial risk involved.   Introduction The metaverse has become increasingly popular with tech fans, investors, and crypto enthusiasts. The demand for virtual land in the 3D digital world has grown hugely, and the market has similarities with real-world real estate. Purchasing and selling metaverse NFT land is a fairly simple process that you can easily follow with our guide.     What is virtual NFT metaverse land? NFT land is a purchasable plot of digital space in a metaverse project. The Non-Fungible Token (NFT) owner can use the land for various purposes or purely for speculation. Typically, a metaverse project divides its map into smaller areas and sells them in a single or multiple land offerings. The payments are usually made in cryptocurrency, but some projects also accept fiat. Once purchased, the space normally offers a 3D virtual experience for the owner and visitors to explore. Because the lands are NFTs, it’s easy to prove authenticity and ownership over these digital assets. The owner can sell their land on the secondary market with a third-party exchange or through the metaverse project ecosystem.   What are the use cases of NFT virtual land? While some investors might simply speculate, other buyers may want to use the land for its intended purpose. The project you choose will affect exactly what you can do with your land. It’s common for spaces to host events, conferences, and even rent advertising space if the land gets enough traffic. Some companies, including PwC, have also implemented their land into their offered services. If you have purchased land from an NFT game, it’s likely that you’ll receive in-game benefits from the plot.   How to buy land in the metaverse Buying NFT land follows the same process as purchasing any other NFT. All you need is a wallet and some cryptocurrency to get started. As with any investment, make sure to do your own research before taking risks. Step 1: Choose a metaverse platform Before buying metaverse property, you need to pick a metaverse platform. Your reasons for buying the land will affect your chosen project, which we will cover later in our tips section. We'll use The Sandbox on Ethereum as an example for this tutorial, but Decentraland is another popular option. Step 2: Set up your wallet You'll need to create a wallet that will give you access to the cryptocurrencies you own. You can use either a mobile or browser-based wallet, depending on your preference. Using a browser-based wallet, however, will typically run into fewer problems. MetaMask or Binance Chain Wallet are both suitable options as they support multiple blockchains but always double-check the wallet you use supports the NFT land's blockchain. When you set up your wallet, you'll receive a string of words known as your seed phrase. Keep it in a safe place, as this is how you'll be able to recover your wallet if you lose access. You're best off storing it somewhere that is always offline. Step 3: Connect your wallet to the Sandbox marketplace On The Sandbox's map, you can see plots of land available to bid on. Some of these you can do directly through The Sandbox marketplace, while others are hosted on external exchanges like OpenSea. Let's look at one we can bid on through The SandBox to keep it simple. Before you can bid on anything, you need to connect your wallet. On The Sandbox map, click [Sign In] in the top right corner. Make sure your wallet is also set to the correct blockchain as the project, in this case, Ethereum.     Next, click [MetaMask].     MetaMask will display a pop-up asking you to connect. Click [Next].     Click the [Connect] button to continue connecting your wallet.     The Sandbox will now ask you to add an email address and create a nickname. Click [Continue] to finish setting up your account. You can also voluntarily provide a password if you would like to use the SandBox editor.     Click [Sign] on the MetaMask signature request to complete your account.     Once you're successfully connected, you'll see your account balance and profile picture in the top right of the website.     Step 4: Buy SAND or ETH on Binance and transfer it to your wallet To purchase or bid on land, you'll need either SAND or Ether (ETH) in your wallet. Buying ETH will likely be more useful as most The Sandbox land sales only accept ETH. You can purchase SAND or ETH via a credit or debit card with your Binance account. For more information on doing this, see our How to Buy Cryptocurrency guide.     Once you've purchased your crypto, you'll need to transfer it to your crypto wallet. Copy the public address from your crypto wallet and use this as your withdrawal address. Follow our How to Withdraw from Binance guide for exact steps.       Step 5: Select a parcel of LAND You can easily sort through available land to bid on or purchase in The Sandbox with the filters below. Most The Sandbox land has already been purchased, meaning that you will usually only find land available on OpenSea. However, you can still bid on these sales through The Sandbox map. The SandBox map is also the best way to verify that you purchase a legitimate NFT plot, as OpenSea links are embedded in the UI.     After finding some land you want to purchase, you can click either the [Bid] button to place an offer or buy it for a fixed price by clicking the ETH amount. Let's look at making an offer by clicking [Bid].     You'll now see a pop-up that will allow you to make an offer. Input the bid amount and click [Place Bid] before confirming the transaction with your wallet. If the seller rejects your bid or the sale ends, the crypto will be returned back to your wallet.     If you click on the fixed price, you'll be taken to OpenSea to complete the transaction. You'll need to connect your wallet to the marketplace before you can purchase the land. You can also use OpenSea to make an offer if you don't want to do it through The Sandbox.   How to sell land in the metaverse There are usually two options when selling your NFT Land. You can either sell it via the metaverse project's marketplace or on a secondary marketplace. With The Sandbox, only third-party marketplaces can currently be used for sales. In the future, landowners will be able to sell directly via The Sandbox for a 5% transaction fee in SAND.  If you want to sell your land on OpenSea, simply go to your profile and click the [Sell] button on your NFT. You'll then be able to create a fixed price or timed auction.   How to rent land in the metaverse Some projects, like The Sandbox, will offer the chance for landowners to rent their land to third parties. However, there is no official system in place for doing this. If you decide to rent the land to someone, you will need to come to a private arrangement, making the process fairly risky. When renting, you should never transfer ownership of your NFT to the renter. It’s safer to wait for an official, secure renting system to be launched.   Tips before buying NFT virtual land You should always follow best practices when investing in NFT land, just like you would with any other investment. Make sure to use the official project link to buy your NFT land or choose a reputable third-party marketplace. Before buying, carefully research the platform you're investing in and check its fundamentals. And don't forget, buying isn't the only option, you may possibly be able to rent some land in the future if you need it for a specific purpose.     Closing thoughts The digital real estate ecosystem has become massively popular in the cryptocurrency world. As you can see, it's relatively easy to buy and sell land. However, current prices sometimes make it more expensive than an actual physical real estate investment. If you do purchase NFT metaverse land, make sure to consider the risks and follow safe crypto practices.
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Is Stagflation A Global Issue? Stagflation - What Is It? | Binance Academy

Binance Academy Binance Academy 23.05.2022 09:58
TL;DR Stagflation happens when an economy experiences high unemployment rates combined with stagnation or negative growth (recession) and rising prices (inflation). There are strategies to combat recession and inflation individually, but since these are conflicting effects, the combination of both makes stagflation challenging to control. Introduction On one side, economic stagnation or negative growth can be addressed by increasing the money supply, making it cheaper for companies to borrow money (lower interest rates). More money available leads to expansion and higher employment rates, which can effectively prevent or combat a recession. In contrast, economists and policymakers often try to control rising inflation by reducing the money supply to slow the economy down. This can be done by raising interest rates, making it more expensive to borrow money. Businesses and consumers borrow and spend less, and the reduced demand causes prices to stop rising. However, when an economy experiences stagflation, we have the worst of both sides: a recession combined with high inflation. Let’s dive deeper to understand what stagflation is, its common causes, and potential solutions.  Learn more on Binance.com What is stagflation? Stagflation is a macroeconomic concept first mentioned in 1965 by Iain Macleod, a British politician and Chancellor of the Exchequer. The name is a combination of stagnation and inflation, describing an economy experiencing minimal or negative economic growth and high unemployment combined with rising consumer prices (inflation). The typical economic controls used to combat each condition individually can worsen the other, making stagflation tricky for a government or central bank to deal with. Usually, high levels of employment and growth positively correlate with inflation, but that’s not the case with stagflation.  Economic growth is often measured by a nation’s gross domestic product (GDP), which is directly related to employment rates. When GDP is not performing well, and inflation is rising, severe stagflation can lead to a broader financial crisis. Stagflation vs. inflation Stagflation, as we have seen, is the combination of inflation and economic stagnation or negative growth. While inflation can be defined in different ways, it often refers to an increase in the prices of goods and services. We could also describe inflation as a decrease in the purchasing power of a currency.  Read next: Altcoins: Ripple Crypto - What Is Ripple (XRP)? Price Of XRP | FXMAG.COM Why does stagflation occur? In short, stagflation occurs when the purchasing power of money decreases at the same time the economy slows down and the supply of goods and services decreases. The exact causes of stagflation vary depending on the historical context and the different economic views. There are a variety of theories and opinions that explain stagflation differently, including the monetarist, Keynesian, and new classical models. Let’s see some examples. Clashing monetary and fiscal policy Central banks like the US Federal Reserve manage the supply of money to affect the economy. These controls are known as monetary policy. Governments also directly affect the economy with spending and tax policies known as fiscal policy. However, a clashing combination of fiscal and monetary policy can lead to runaway inflation and slow economic growth. Any combination of policies that reduce consumer expenditure while increasing the money supply could eventually lead to stagflation. For example, a government may raise taxes leaving its population with less disposable income. The central bank simultaneously may be engaged in quantitative easing ("printing money") or reducing interest rates. The government's policy will negatively affect growth while the central bank increases the supply of money, which often leads to inflation. The introduction of fiat currency Previously, most major economies pegged their currencies to an amount of gold. This mechanism was known as the gold standard but was widely abandoned after World War II. The removal of the gold standard and its replacement with fiat currency removed any limits on the supply of the money. While this might facilitate the work of central banks in controlling the economy, it also risks damaging inflation levels, causing higher prices. Increases in supply costs A sharp increase in the production costs of goods and services can also cause stagflation. This relationship is especially true for energy and is known as a supply shock. Consumers also suffer from a rise in energy prices, typically stemming from oil prices. If goods cost more to produce and prices rise, and consumers have less disposable income due to heating, transport, and other energy-related costs, stagflation is more likely to occur. How do you combat stagflation? Combating stagflation is achieved through fiscal and monetary policy. However, the exact policies enacted depend on the economic school of thought.  Monetarists Monetarists (economists who believe controlling the supply of money is the most key) will argue that inflation is the most crucial factor to be controlled.  In this scenario, a monetarist would first reduce the money supply, which reduces overall spending. This leads to less demand and a fall in the prices of goods and services. The downside, however, is that this policy doesn't encourage growth. Growth would have to be tackled later through loose monetary policy combined with fiscal policy. Supply-side economists Another school of thought is to increase supply in the economy by reducing costs and improving efficiency. Price controls on energy (if possible), efficiency investments, and production subsidies will help reduce costs and increase the economy's aggregate supply. This lowers prices for consumers, stimulates economic output, and reduces unemployment. Free-market solution Some economists believe the best cure for stagflation is to leave it to the free market. Supply and demand will ultimately settle rising prices as consumers cannot afford goods. This fact will lead to a reduction in demand and lower inflation.  The free market will also efficiently allocate labor and reduce unemployment. However, this plan could take years or decades to work successfully, leaving the population in unfavorable living conditions. As Keynes once said, "in the long run, we're all dead." How could stagflation affect the crypto market? The exact effects of stagflation on crypto are difficult to define fully. However, we can make some basic assumptions if we assume other market conditions stay the same. Minimal or negative growth A barely growing or shrinking economy leads to stagnating income levels or even a reduction. In this case, consumers have less money to invest. This could lead to a reduction in purchasing crypto and an increase in sales as retail investors need access to money for daily expenses. The slow or negative economic growth also encourages big investors to reduce their exposure to higher-risk assets, including stocks and cryptocurrencies. Government measures against stagflation Typically a government will try to control inflation first and then deal with the growth and unemployment problem. Inflation can be curbed by reducing the money supply, with one method being a raise in interest rates. This reduces liquidity as people keep their money in banks, and borrowing becomes more expensive. With a rise in rates, high-risk and high-return investments are less appealing. Crypto, therefore, may see a reduction in demand and prices during periods of rising interest rates and lower money supply. Once a government has inflation under control, it will likely want to stimulate growth. This is typically done through quantitative easing and a reduction in the interest rate. In such a scenario, the effects on crypto markets will likely be positive due to the increase in the money supply. A rise in inflation Many investors argue that Bitcoin can be a good hedge against rising inflation rates. With higher, rising inflation, keeping your wealth in fiat without earning interest reduces its real value. To avoid this, many have turned to Bitcoin to preserve their long-term purchasing power and even make profits. This is due to investors seeing BTC as a good store of value due to its limited issuance and supply. Historically, this hedging strategy might have worked well for investors that accumulated Bitcoin and other cryptocurrencies over the years. In particular, during or after periods of inflation and economic growth. However, using crypto as a hedge against inflation might not work well in shorter time frames, especially during periods of stagflation. It’s also worth noting that there are other factors in play, such as the increased correlation between crypto and stock markets. Stagflation in the 1973 oil crisis In 1973, the Organization of Arab Petroleum Exporting Countries (OPEC) declared an oil embargo on a select group of countries. This decision was a reaction to support for Israel in the Yom Kippur war. With a dramatic decrease in the oil supply, oil prices rose, leading to supply chain shortages and higher consumer prices. This led to a huge increase in the rate of inflation. In countries like the USA and UK, central banks cut interest rates to encourage growth in their economies. Lower interest rates make it cheaper to take out loans and provide an incentive to spend rather than save. However, the typical mechanism to reduce inflation is cutting interest rates and encouraging consumers to save. With oil and energy costs making up a large part of consumer expenditure, and the cut in interest rates not stimulating enough growth, many western economies experienced high inflation and a stagnant economy. Follow FXMAG.COM on Google News Conclusion Stagflation presents a unique situation for economists and policymakers as inflation and negative growth don’t usually occur together. The tools to combat stagnation often cause inflation, while strategies to control inflation can lead to slow or negative economic growth. So, in times of stagflation, it's worth considering the macroeconomic context and its multiple factors, such as money supply, interest rates, supply and demand, and employment rate.
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Binance Academy: Crypto Cards Explained

Binance Academy Binance Academy 18.05.2022 16:22
TL;DR A typical crypto card lets you earn crypto rewards or instantly convert your crypto to fiat currency to pay for goods and services. Both Mastercard and Visa issue crypto cards, meaning you can use your crypto in millions of locations globally. A prepaid crypto card is similar to a debit card in that it has to be pre-loaded with crypto to spend. You can get a crypto card from a licensed issuer such as a crypto exchange or bank. However, crypto cards aren't without risk. Your funds stored on the card can still lose their market value, and any transactions you make with your card are likely to be taxable. Crypto credit cards work more like standard credit cards with crypto rewards. You can pay your credit card bill with fiat cash but receive crypto bonuses on the money you spend.  Binance offers a Binance Visa Card for KYC and AML verified customers. You can complete the sign-up process in under a few minutes and enjoy zero administration or transaction fees, cashback, and other benefits.   Introduction While much of crypto's interest is in its investment potential, it still has a use case in transferring value. Satoshi Nakamoto didn't create Bitcoin to make people billionaires. It was, however, designed as a global, digital payments system. One way to achieve this goal is with crypto cards. This payment method is now helping people use crypto and digital assets in their daily lives and even receive crypto rewards as well.   Learn more on Binance.com   What is a crypto card? A typical crypto card acts in a similar way to your debit card. You can pay for items or services that accept the card provider. While it might sound like you are paying a vendor directly with digital currencies, this isn't actually what happens. The vendor receives fiat cash into their account and not crypto. Your crypto card takes the cryptocurrency in your linked account, converts this into the local currency you're paying in, and then uses this cash to pay. We'll explain this with an example later on. Both Visa and MasterCard offer crypto cards with partner companies who apply for a license. These are the two most commonly used payment providers globally, making crypto cards almost universally accepted by retailers. Some crypto cards only offer crypto rewards on the money spent with the card. These cards are usually credit cards that require a credit check to sign up for.   How does a crypto card work? As we mentioned, a crypto card doesn't actually pay the vendor with crypto. It conveniently converts your crypto into cash which you can spend with the vendor through the card.  For example, imagine you have $500 (US dollars) of BNB in your Binance Card's Funding Wallet. At a restaurant, you go to pay the $100 bill with your crypto card. Once you have inserted your card and agreed to the payment, Binance sells $100 of BNB and loads the fiat onto the card. The restaurant then gets paid $100, and you're left with $400 of BNB in your Funding Wallet. All of this happens within the few seconds it takes to use your crypto card. You can also use crypto cards for ATM withdrawals if your service provider supports them. The same method above is used to withdraw your physical cash.   What are the differences between a crypto card and a credit or debit card? There are a few minor differences between credit and debit cards and crypto cards. For the most part, they function in the same way when it comes to paying. The most significant difference between a crypto card and a credit/debit card is that you load your typical crypto card with cryptocurrencies. A debit card is pre-loaded with fiat currencies, and a credit card's transactions are paid off later with fiat. A prepaid crypto card works similarly to a traditional debit card. You must have the funds in your account before you can spend them. You cannot load your cards with fiat cash but only with crypto. When you make a payment, your funds are converted immediately in your crypto wallet. On the other hand, Crypto credit cards extend a line of credit that lets you purchase now and pay later. Gemini and BlockFi both have released crypto credit cards with crypto cashback. Your credit card bill is payable in normal fiat currency, meaning that the crypto credit card is basically a rewards credit card. To order a card, you will have to be a customer with a company that already provides a crypto card, such as a crypto exchange or crypto-supporting bank that supports crypto. The process will involve you completing Know Your Customer (KYC) and Anti-Money Laundering procedures before you can order your crypto card, just like with any regular credit or debit card. With a crypto credit card, you will also need to pass a credit check.   What are the benefits of using a crypto card? The key benefit of a prepaid crypto card is the ability to use your crypto for everyday purchases. This has traditionally been difficult to do unless a vendor directly accepts crypto. Even then, some coins like Bitcoin can take 30 minutes for a transaction to confirm. The price is also volatile, meaning you may actually pay more or less than expected. Many crypto cards also come with benefits like cashback rewards or discounts with certain subscriptions like Spotify or Netflix. These benefits lure you towards a specific card provider and are similar to those offered with standard debit/credit cards. Make sure to compare what each card offers to find the best benefits for you. Don’t also forget to look out for possible exchange fees you might have to pay in the conversion process.   Do crypto cards have any risks? Having a crypto card provides all the same risks as holding crypto. If you have loaded up your account with Bitcoin (BTC) or Ether (ETH), your account’s fiat value will constantly change. This means you may not have the exact amount of money in your account as you think, depending on exchange rates. You should also remember that in many tax jurisdictions, the spending of crypto is a taxable event. This doesn't matter if you're spending a few dollars on a coffee or thousands of dollars on a car. If you have made any gains or losses on your crypto before you use it to purchase something with your crypto card, you'll have to pay or write off the appropriate taxable amount. You can avoid this problem by purchasing stablecoins to use with your crypto card, as the price very rarely changes from its pegged value.   What is Binance Card? Binance Card is a Visa debit card connected to your Binance account. By loading up your Card's Funding Wallet, you can spend crypto anywhere that Visa is accepted. It acts in the same way as the prepaid crypto debit cards mentioned above.   Which countries is Binance Card available in? Binance card is available only to users from selected countries, including:  Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Gibraltar, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, and Sweden.   How to apply for a Binance Card Getting a card is simple if you've already got a Binance account and live in an eligible country. If you aren't yet registered with Binance, you can follow our Binance Beginner's Guide and be set up in minutes. You will need to complete all relevant KYC and AML processes before successfully applying for a Binance Card. To order your card, make sure you're logged in and go to the Binance Card page. You can also navigate to this page by hovering over [Finance] on the Binance homepage and clicking [Binance Visa Card].     Next, click [Get Started] followed by [Order Card]. You'll now see some KYC information and an agreement to confirm.     After confirming, you will land on the Order Card page. Here you can choose the format of your name to appear on the card. Once you have confirmed your choice, click [Continue].       You will now find your details pre-filled out with extra missing information for you to fill in. Finally, agree to the Privacy Policy, Terms of Use, and Cardholder Agreement before clicking [Order Your Binance Card]. Once you've ordered your card, you'll also have access to a virtual card to use before your physical one comes. You can add this card to Google Pay Send, or even use it for online purchases. If you prefer to use the Binance mobile app, you can also order your card there. For more details on how to order a Binance Card, head to our FAQ.   Benefits of using Binance Card Apart from allowing you to spend your crypto in stores, restaurants, and VISA acceptors worldwide, Binance Card also has some unique benefits and perks. 1. Zero Fees - A Binance Visa Card is free for any Binance user. There are no Binance administrative, processing, or annual fees, but you may occasionally be subject to third-party fees. 2. You can keep holding your crypto - There's no need to exchange your crypto into fiat in preparation for purchasing something. Binance converts it exactly when you need to, which means that your crypto can still earn possible market gains.  3. Up to 8% cashback - Depending on your BNB monthly average balance, you will get up to 8% cashback on all your purchases. This cashback is given to you in BNB in your Binance account. You can read more details on the cashback program here. 4. Safe funds - Your crypto funds are SAFU and protected by Binance. Binance has a high level of safety and uses robust security standards.     Closing thoughts If you have some crypto that you no longer want to HODL, a crypto card makes converting to fiat simple. Without using a crypto card, you'd need to go through the conversion process and transfer the fiat manually to your bank account. This can take days to do, depending on your bank and cryptocurrency exchange. A crypto card really is one of the fastest ways to use your crypto for purchasing things and is a welcome development. However, always make sure that you keep accounts of what you spend for tax reasons.
How could ongoing World Cup help Web3? Sorare, FIFA+ Collect and more explained

Binance Academy: FC Porto Fan Token - What Is It? PORTO Explained. Crypto And Football?

Binance Academy Binance Academy 17.05.2022 13:48
TL;DR FC Porto Fan Token (PORTO) is a BEP-20 utility token of the FC Porto football club. PORTO was launched in 2021 via a Binance Launchpad sale, and it gives fans and token holders exclusive experiences and privileges.  PORTO holders can participate in voting polls for club-related decisions, such as choosing the warm-up song and the welcome message to display in the next match. PORTO can also be used to purchase FC Porto’s NFT Mystery Boxes, and the NFTs can then be used for staking to earn extra PORTO rewards on the Binance Fan Token Platform.   Introduction Dedicated fans can now interact with their favorite sports teams and celebrities in a more innovative and direct way in the crypto world. Fan tokens are the latest trend that leverages blockchain technology to create exclusive experiences for sports enthusiasts and fans alike.   Learn more on Binance.com   What are Binance Fan Tokens? Binance Fan Tokens are utility tokens associated with sports clubs, teams, celebrities, or brands with a large fan base. Fan token holders can enjoy unique fan privileges, such as accessing exclusive pre-sales for event tickets and collecting special Non-Fungible Tokens (NFTs). In some cases, they can also influence club-related decisions like choosing new team uniforms, entrance music, and more. The Binance Fan Token Platform is the official partner of several football teams, including the S.S. Lazio (LAZIO), FC Porto (PORTO), and Santos FC (SANTOS). Unlike NFTs, Binance Fan Tokens are completely fungible tokens. Just like BNB, Bitcoin (BTC), Ethereum (ETH), and other cryptocurrencies. Being fungible means that every token unit holds the same value and utility.   What is FC Porto Fan Token (PORTO) and how does it work? Founded in 1893, the FC Porto football club has won the most international titles in the Portuguese Premier League and many other impressive achievements across Europe, such as the UEFA Champions League. To incentivize its worldwide supporters, the club partnered with Binance in 2021 to release the FC Porto Fan Token (PORTO). PORTO is the second sports fan token released through a token sale on the Binance Launchpad. It is a BEP-20 utility token on the BNB Chain (former Binance Smart Chain, BSC), with a total token supply of 40 million. PORTO has several fan-engagement use cases within the Binance ecosystem. As a utility token, PORTO gives holders governance rights to participate in voting polls related to the Portuguese football club. The more fan tokens they hold, the greater influence their vote will have on these fan-related decisions. For example, PORTO holders can choose the team's warm-up song for an upcoming match, as well as the welcome message to display during a match. Apart from governance rights, token holders can use their PORTO to purchase FC Porto’s NFT Mystery Boxes. These mystery boxes contain neutral, rare, or super rare NFTs from a unique collection. For example, the first PORTO NFT collection featured the team’s legendary goalkeepers. The PORTO NFTs are more than digital collectibles. They can also be used for staking on the NFT PowerStation, an innovative gamification feature on the Binance Fan Token Platform. By charging the required NFTs, fans can power up their fandom and claim extra PORTO rewards. The longer their NFTs are charged, the better their fan rewards. The NFTs can also be traded on the Binance NFT Marketplace. In the future, token holders will be able to use their PORTO for loyalty subscriptions, such as earning special rewards and fan badges, going to “meet and greet” events with team players, and receiving free merchandise. Fans can also use PORTO to purchase match tickets and pay for memberships on FC Porto’s e-commerce platform via Binance Pay.   How to buy PORTO on Binance? You can buy PORTO on crypto exchanges like Binance. 1. Log into your Binance account and go to [Trade] to select either the [Classic] or [Advanced] trading mode. 2. Click on [BTC/USDT] to open the search bar. Enter “PORTO'' to view available trading pairs. We will use PORTO/USDT for this example. 3. Go to the [Spot] box on the right and select your order type. For example, a market order. Enter the amount of PORTO you would like to buy, then click [Buy PORTO] to place the order. Your purchased PORTO will be credited to your Spot Wallet.         Closing thoughts Fan tokens are fuelling a new era of fan experiences by offering an innovative channel for fans to interact with their favorite teams. With the Binance Fan Token Platform adding new use cases to fan tokens, PORTO is expected to bring more exciting experiences to holders in the future.
Unveiling the Hidden Giant: The Growing Dominance of Non-Bank Financial Institutions

Binance Academy: What Is TPunk? 10 NFTs Which Costs Millions - Part II

Binance Academy Binance Academy 16.05.2022 14:10
Learn more on Binance.com Part I: Binance Academy: Non-fungible Tokens: $69 Millions For An NFT!? NFT - What Is It?| FXMAG.COM 6. TPunk #3442 - $10.5 million Some people consider TPunks as Tron’s version of CryptoPunks, with the familiar pixelated faces that carry different rarity and attributes. One of the rarest is this joker-face TPunk #3442. It was sold for 120 million TRX in August 2021 to Justin Sun, CEO of Tron. This was the most expensive NFT ever sold on the Tron blockchain. Sun didn’t keep the TPunk, though. He donated it to APENFT right after the purchase.      7. CryptoPunk #4156 - $10.26 million Yes, another CryptoPunk among the most expensive NFTs. CryptoPunk #4156 is an ape with a blue bandana. Its previous owner was someone with a matching pseudonym “Punk 4156,” who acquired the NFT at $1.25 million in February 2021. However, he sold the NFT for $10.26 million in December of the same year.     8. CryptoPunk #5577 - $7.7 million At #8 sits another ape-like CryptoPunk, this time with a cowboy hat. CryptoPunk #5577 was sold for 2,501 ETH in February 2022. Although not confirmed, many believe that the buyer was Robert Leshner, CEO of Compound Finance, who tweeted a “Yeehaw” after the purchase happened.     9. CryptoPunk #3100 - $7.58 million Sold at $7.58 million in March 2021, CryptoPunk #3100 is also one of the nine rare alien punks and it also wears a headband. As of May 2022, this Punk is listed for 35,000 ETH. If it ever gets sold, it will be the biggest NFT sale in the history of CryptoPunks.     10. CryptoPunk #7804 - $7.57 million CryptoPunk #7804 is the sixth CryptoPunk in our list. It’s a pipe-smoking alien with a cool cap and sunglasses. #7804 was owned by the CEO of the designer software company Figma, who proudly referred to it as the “digital Mona Lisa.” The NFT was sold for $7.57 million in March 2021.     Where can I buy NFTs? You can get your first NFT at various NFT marketplaces. Depending on the blockchain network, you’ll need a compatible wallet and the supported cryptocurrencies for the purchase. For example, NFT prices on Binance Smart Chain (BSC) are almost always in BNB or BUSD, while NFTs on the Ethereum blockchain typically use ether (ETH).  You can buy the cryptocurrencies needed on the Binance exchange and transfer them to a wallet that can be connected to the NFT Marketplace. If you’re purchasing NFTs on the Binance NFT Marketplace, you can simply move your funds to the Funding Wallet. Select the desired NFT and click [Buy Now] or [Make Offer]. Check out our NFT Marketplace guide for more details.     If you’re looking to buy NFTs on other marketplaces, browser extension wallets like Binance Chain Wallet and MetaMask are good options. After transferring your funds from Binance to your wallet, connect it to the NFT marketplace to get started. Don’t forget to check the URL you are visiting to ensure that you’re on the official website. If you connect your wallet to fake or suspicious websites, your funds might be stolen. Closing thoughts It’s no doubt that NFTs are growing in popularity and continuously creating new record-high sales. While most NFTs are simply collectible artworks, we have an increasing number of NFTs created with a variety of use cases. As NFTs mature, we can expect to see more utilities and adoptions than simply digital collectibles and possibly even higher sales.
Binance Academy: Non-fungible Tokens: $69 Millions For An NFT!? NFT - What Is It?

Binance Academy: Non-fungible Tokens: $69 Millions For An NFT!? NFT - What Is It?

Binance Academy Binance Academy 16.05.2022 14:06
TL;DR Non-fungible tokens (NFTs) are unique crypto assets generally used to represent crypto art and digital collectibles. The rise of NFTs created scarcity for digital objects and generated great value for creators and investors alike.  In this article, we’ll take a look at some of the most expensive NFTs sold to date, such as Beeple’s Everydays: The First 5000 Days ($69.3 million) and a bunch of CryptoPunks that dominated the list with ultra-high price tags. Introduction NFTs saw exponential growth in 2021, with tens and thousands of investors flocking to collect digital arts in different forms. Some NFT sales even generated record-breaking prices. What are NFTs, and why do they have value? Learn more on Binance.com What is an NFT? A non-fungible token (NFT) is a token issued on a blockchain to represent a unique asset, which could be a document, piece of art, music, or even real estate. An NFT is not fungible because each one is a unique digital asset with a unique identifier.  Even if two NFTs look very similar, they are not interchangeable. So while one bitcoin is equal to and tradable to another bitcoin, an NFT is not. That’s why NFT technology is used to generate proof of authenticity and ownership on the blockchain. NFTs can be entire digital assets like play-to-earn gaming items and metaverse land or tokenized versions of real-world assets.   What gives NFTs value? An NFT’s value is defined by market supply and demand. It’s usually easier to evaluate an NFT when it’s created as a representation of a physical asset. But most NFTs only exist on-chain, in the digital world. Each NFT collection has a different supply, and each NFT unit can have a different rarity. But there are several other factors that can determine how much an NFT is worth. For example, limited series NFTs with specific use cases tend to be more valuable. The founding team, along with the artists and community, can also affect the demand for NFTs. In other words, the value of an NFT could be related to who created it, its value in play-to-earn games, or simply community and market sentiment. There are many cases of successful NFT projects, but there are even more that have failed. Make sure to DYOR before trading or investing in NFTs and don’t use money you can’t afford to lose.   The most expensive NFTs ever sold Let’s look at some of the most expensive NFTs ever sold as of May 2022. The prices mentioned below are based on the time of the sale.   1. Everydays: The First 5000 Days - $69.3 million Everydays: The First 5000 Days is a digital artwork by American graphic designer Mike Winkelmann, better known as Beeple. This NFT was sold for $69.3 million in February 2021, purchased by NFT investor Metakovan through an auction sale at Christie’s. The NFT is a collage of Beeple’s 5,000 earlier artworks. Since 2007, Beeple started uploading a new image to his Instagram feed every day for 13 years. His “everydays” art pieces are often set in post-apocalyptic landscapes, and usually have some relation to the current news or pop culture. This NFT collage can be considered a representation of Beeple’s development as a digital artist.     2. Clock - $52.7 million Clock depicts a dynamic timer that counts the number of days Julian Assange, the founder of WikiLeaks, has spent in prison. Assange is involved in a highly controversial case. He’s facing extradition from Britain to the US for multiple espionage charges and up to 175 years behind bars.  The NFT was curated by the digital artist Pak and Assange himself to support his legal bills. It was auctioned for 16,953 ETH in February 2022 to AssangeDAO, a decentralized organization (DAO) established to crowdfund the NFT sale. Apart from the ETH they used to acquire Clock, AssangeDAO still holds 17,422 ETH they initially raised to purchase the NFT.  Pak and Assange not only curated Clock, they also allowed anyone to create their own NFTs. They can tokenize a censored message for any price they want or for free. The message will turn into an image showing the words struck through, as though it was being censored. The proceedings for this NFT series will go to pro-freedom organizations Assange and Pak choose.      3. HUMAN ONE - $28.9 million Another recond-smashing NFT by Beeple, HUMAN ONE is the first physical artwork he creates. It was auctioned at Christie’s for $28.9 million in November 2021.  HUMAN ONE is a 3D moving sculpture with 4 digital screens. It displays an endless video of an astronaut journeying through places at different times of the day. The hybrid artwork reflects Beeple’s artistic ambitions beyond the digital realm.      4. CryptoPunk #5822 - $23.7 million As one of the first famous NFT projects, these pixelated CryptoPunks continue to make the list of the most expensive NFTs ever sold. CryptoPunk #5822 was sold for 8,000 ETH in February 2022 to the CEO of a blockchain technology startup. It comes from the rarest alien edition — there’re only 9 of them in the entire NFT collection. What makes it extra special is that it’s also one of the 333 with a bandana.      5. CryptoPunk #7523 - $11.75 million The next most valuable NFT comes from the CryptoPunk family as well. Before the #5822 sale, #7523 was the most expensive CryptoPunk ever sold.  CryptoPunk #7523 was auctioned at Sotheby's for $11.75 million during the COVID pandemic in June 2021. Not only it’s part of the extremely rare alien edition, but it’s also the only mask-wearing alien, which is what the buyer loved about this particular CryptoPunk.       
Crypto: How To Estimate A Risk And Take A Profit?

Binance Academy: Investing Strategy - Buying The Dips And Taking Profits Are Not The Only Options!

Binance Academy Binance Academy 13.05.2022 15:36
TL;DR With Dual Investment, there’s an opportunity to employ different strategies depending on your market view.  For less-experienced investors, you can easily take profits, buy dips, and earn interest on your crypto and stablecoin holdings.  For experienced investors, it’s possible to enter multiple Dual Investment positions and take advantage of a short-term volatile market. Introduction For users looking to diversify their investments, Binance Earn’s products are a good place to start. Dual Investment is one of the more advanced ways to earn and provides a way to buy or sell a cryptocurrency at your desired price at your desired date in the future. Regardless of your position, you’ll earn a high-interest income no matter which direction the market goes. So now we understand the basic concept, how exactly do we start earning? There are, in fact, many ways to use Dual Investment. Each one can complement your trading strategies and predictions for the market. Let’s get stuck in! Learn more on Binance.com 1. Taking profits Although it can be easy to get carried away, it’s always good to take some profits when you can. With this particular Dual Investment strategy, you can benefit from additional returns and realize some of your crypto gains in the future. 1. Select the Sell High Dual Investment product on Binance Earn. In this example, we’ll look at an Ether (ETH) product. The current ETH price is $2,900 (all prices given in BUSD). 2. We’ll set a Target Price of $3,500 and the Settlement Date for a week’s time.  3. We’ll then have the chance to sell the deposited ETH at the Target Price if it’s reached on the Settlement Date in a week. If ETH is 3,500 BUSD or above on the Settlement Date, it will be sold for BUSD. This removes the situation of forgetting to take your profits or not doing so due to greed! At the same time, you’ll also be earning APY. 4. If your Target Price isn’t reached on the Settlement Date, you’ll still earn APY on the deposited ETH and receive the ETH back.   2. Buying the dips Buying the dip is another common trading strategy that allows you to take advantage of a market downturn. By purchasing at a lower price, you anticipate a later market upturn when you can sell for a profit. With Dual Investment, it’s simple to plan for potential future dips while earning an additional interest income. 1. Select the Buy Low Dual Investment product on Binance Earn. In this example, we’ll look at a BTC product purchasable with Tether (USDT) . BTC’s current price is $39,000. 2. We’ll choose a Target Price of $36,500 for BTC with a Settlement Date in one week. 3. If the Market Price is $36,500 or lower on our Settlement Date, for example $36,000, BTC will be purchased at our Target Price. You’ll also get your earned interest too.  4. If your Target Price ($36,500) isn’t reached on the Settlement Date, you’ll still earn APY on the deposited USDT before receiving it back.   3. Growing your HODLed crypto When entering into Dual Investment, you don’t always have to be betting on market movements. In fact, you can make good use of the product even when the price remains relatively stable or doesn’t reach your Target Price. Here, we’re just looking to make returns on crypto through interest. 1. Select the Sell High Dual Investment product on Binance Earn. In this example, we’ll look at a BTC product. BTC’s current price is $39,000. 2. We’ll choose a Target Price of $40,000 for BTC with a Settlement Date in one week. 2. To simply earn APY, we hope that Bitcoin’s price remains stable or decreases and doesn’t meet the Target Price. 3. At the Settlement Date, BTC’s price is $38,000. This means you keep your deposited BTC and receive all earned interest. This provides an easy way to earn high interest on your crypto holdings.   4. Growing your stablecoin stash Many of us keep stablecoins as a way to keep captured profits in the blockchain ecosystem. But that doesn’t mean that we can’t make them start earning too. This strategy is similar to the previous one, in that we hope the Target Price isn’t reached. 1. Subscribe to a Buy Low Dual Investment product on Bina nce Earn. In this example, we’ll look at a MATIC product purchasable with USDT. MATIC’s current price is $1.20. 2. We’ll choose a Target Price of $1.10 for MATIC with a Settlement Date in one week. 2. To earn stablecoin APY, we hope that MATIC’s price remains stable or increases and doesn’t meet the Target Price. 3. At the Settlement Date, MATIC’s price is $1.22. This means you keep your deposited USDT and receive all earned stablecoin interest. This provides a simple way to earn high interest on your stablecoin holdings.   5. Compound earning in a short-term volatile market Our previous four strategies have provided simple ways to earn interest and buy or sell at preset prices according to your strategy. However, there’s also the opportunity for more advanced plays with Dual Investment. As always, investing has an inherent risk. This strategy should only be used by experienced investors who feel comfortable in volatile markets. With this application, we expect market volatility but have no clear view of whether the market is bullish or bearish. To take advantage of this situation, we need to use a combination of Buy Low and Sell High products. Let’s look at an example. 1. Select the Sell High Dual Investment product on Binance Earn. In this case, we’ll look at a BNB product. BNB’s current price is $395. 2. We’ll choose a Target Price of $420 for BNB with a Settlement Date in one week. 3. The market is volatile, meaning two things may happen.  If the Target Price isn’t met, you’ll keep your BNB and earned interest. You can create a new Sell High order, allowing you to earn more interest or sell for a higher price.  If the Target Price is met, you’ll sell your BNB at $420 per unit and gain interest. You can now place a Buy Low order, giving you the chance to purchase crypto at a lower price.  4. Every time your Target Price is met, go for Dual Investment products in the other direction. If the Target Price is not met, continue on with the same direction until the Target Price is met.  4. Playing the market in this way lets you keep on buying lower and selling higher, all while compounding your returns.   6. Double-sided positions Our final strategy has similarities with the previous one, but in this case we open two positions simultaneously. To do this, you’ll need to hold two types of tokens: one in crypto (like BNB) and one in stablecoin (like USDT). Let’s see how it works if the price of BNB is currently $390.  1. Use BNB to subscribe to a Sell High BNB Dual Investment product with a Target Price of $420 and a Settlement Date in one week. 2. Use USDT to subscribe to a Buy Low BNB Dual Investment product. Set your Target Price to $360 with a Settlement Date in one week. 3. The market is volatile leading to three possible outcome:  The Target Price of both positions isn’t met as the price stays between $360 and $420. In this case, you’ll keep your original BNB and USDT deposits, as well as earned interest in both currencies.  The price of BNB reaches $420 or above, meaning the Sell High position’s Target Price is reached. Your BNB and accumulated interest will be sold for $420 per unit, and you’ll also keep your Buy Low USDT deposit plus earned interest. In conclusion, you get to take profit from selling BNB and also accumulate interest in USDT. The price of BNB reaches $360 or above, meaning the Buy Low position’s Target Price is reached. You’ll purchase BNB at your desired price and receive your interest, and you’ll also keep your Sell High BNB deposit plus earned interest. In conclusion, you get to buy BNB at a lower price while also accumulating interest in BNB. Closing thoughts There’s a lot more to Dual Investment than just earning interest and buying or selling. You can use the product as a way of planning your trading strategies with the added bonus of APY. So, if you’re looking for a way to diversify your investments, Dual Investment is a great product to explore. Disclaimer: Dual Investment is not a principal-guaranteed product. Subscribed assets are locked and users are not able to cancel or redeem before the Settlement Date. If the market price goes far below your Target Price to buy on the Settlement Date, you will be buying at a relatively higher price than the market price, and vice-versa. Binance does not assume liability for any losses incurred from price fluctuations. Please read through the product terms carefully before subscribing.
The Bitcoin Market Is Now Developing The Corrective Cycle To The Downside

Binance Academy: Value Of (BTC) Bitcoin Explained. Fiat Money - What Is It?

Binance Academy Binance Academy 12.05.2022 17:36
TL;DR Bitcoin derives its value from a variety of different attributes. Ultimately, both crypto and fiat currencies have value because of trust. As long as society believes in the fiat system, money will continue to have value. We can say the same for Bitcoin: it has value because users believe it does, but there is more to consider. Unlike fiat, Bitcoin has no central bank, and its decentralized structure allowed for the creation of a unique financial system. Blockchain technology offers a great deal of security, utility, and other benefits. It also provided a revolutionary way of dealing with the transfer of value globally. In many ways, Bitcoin can also act as a store of value similar to gold. Introduction One of the biggest struggles for newcomers to crypto is grasping how and why a cryptocurrency like Bitcoin (BTC) can have value. The coin is digital, has no physical asset backing it up, and the concept of mining can be very confusing. In a sense, mining creates new bitcoins out of thin air. In practice, though, successful mining requires a very costly investment. But how can all of this make BTC valuable? Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM Think about the money we all use daily. There’s no longer gold or assets backing up our banknotes. Money that we borrow often exists only as numbers on a screen, thanks to fractional reserve banking. Governments and central banks like the Federal Reserve can create new money and increase its supply through economic mechanisms. Although there are remarkable differences, BTC, as a digital form of money, shares some similarities with the fiat money we are all used to. So, let’s discuss first the value of fiat money before we dive into the cryptocurrency ecosystem. Learn more on Binance.com Why does money have value? In short, what gives money value is trust. Essentially, money is a tool used to exchange value. Any object could be used as money, as long as the local community accepts it as payment for goods and services. In the early days of human civilization, we had all kinds of objects being used as money - from rocks to seashells. What is fiat money? Fiat money is the one issued and officialized by a government. Today, our society exchanges value through the use of paper notes, coins, and digital numbers on our bank accounts (which also define how much credit or debt we have).   Read next: Stablecoins In Times Of Crypto Crash. What is Terra (UST)? A Deep Look Into Terra Altcoin. Terra - Leading Decentralised And Open-Source Public Blockchain Protocol | FXMAG.COM In the past, people could go to the bank to exchange their paper money for gold or other precious metals. Back then, this mechanism ensured that currencies like the U.S. dollar had their value tied to an equivalent amount in gold. However, the gold standard was abandoned by the majority of nations and is no longer the basis of our monetary systems.  After removing a currency's ties to gold, we now use fiat money without any backing. This uncoupling gave governments and central banks more freedom to adopt monetary policies and affect the money supply. Some of the main characteristics of fiat are: It’s issued by a central authority or government. It has no inherent value. It’s not backed by gold nor any other commodity. It has an unlimited potential supply. Why does fiat have value? With the removal of the gold standard, we seemingly have a currency without value. Money does, however, still pay for our food, bills, rent, and other items. As we discussed, money derives its value from collective trust. Therefore, a government needs to firmly back and successfully manage a fiat currency to succeed and maintain a high level of trust. It’s easy to see how this breaks down when faith in a government or central bank is lost due to hyperinflation and inefficient monetary policies, as seen in Venezuela and Zimbabwe. Why does crypto have value? Cryptocurrencies have some things in common with our standard idea of money, but there are some remarkable differences. Although some crypto like PAXG are pegged to commodities like gold, most cryptocurrencies have no underlying asset. Instead, trust once again plays a significant role in the value of a cryptocurrency. For example, people see value in investing in Bitcoin, knowing that others also trust Bitcoin and accept BTC as a payment system and medium of exchange. For some cryptocurrencies, utility is also an important factor. To access certain services or platforms, you may need to use a utility token. A service in high demand will therefore provide value to its utility token. Not all cryptocurrencies are the same, so their value really depends on the features of each coin, token, or project.   Read next: Binance Academy: Crypto Fear And Greed Index Explained| FXMAG.COM When it comes to Bitcoin, we can narrow it down to six features that we’ll discuss in more detail later: utility, decentralization, distribution, systems of trust, scarcity, and security. What is intrinsic value? A lot of the discussion regarding Bitcoin’s worth is whether it has any intrinsic value. But what does this mean? If we look at a commodity like oil, it has intrinsic value in producing energy, plastics, and other materials. Stocks also have intrinsic value, as they represent equity in a company producing goods or services. In fact, many investors perform fundamental analysis in an attempt to calculate an asset’s intrinsic value. On the other hand, fiat money has no intrinsic value because it’s just a piece of paper. As we’ve seen, its value derives from trust. The traditional financial system has many investment options that carry intrinsic value, from commodities to stocks. Forex markets are an exception as they deal with fiat currencies, and traders often profit from short or mid-term exchange rate swings. But what about Bitcoin? Why is Bitcoin valuable? The value of Bitcoin is a subjective topic with many differing opinions. Of course, one could say that the market price of Bitcoin is its value. However, that doesn’t exactly answer our question. What’s more important is why people judge it to have value in the first place. Let’s dig a bit deeper into some of the characteristics that make Bitcoin valuable. Bitcoin’s value in utility One of the major benefits of Bitcoin is its ability to quickly transfer large amounts of value worldwide without the need for intermediaries. While it can be relatively expensive to send a small amount of BTC due to fees, it’s also possible to send millions of dollars cheaply. Here, you can see a Bitcoin transaction worth around $45,000,000 (USD) sent with a fee of just under $50 (as of June 2021).     While Bitcoin isn’t the only network that makes this possible, it’s still the largest, safest, and most popular. The Lightning Network also makes small transactions possible as a layer two application. But regardless of the amount, being able to make borderless transactions is certainly valuable. Bitcoin’s value in decentralization Decentralization is one of the key features of cryptocurrencies. By cutting out central authorities, blockchains give more power and freedom to the community of users. Anyone can help improve the Bitcoin network due to its open-source nature.  Even the cryptocurrency’s monetary policy works in a decentralized manner. The work of miners, for example, involves verifying and validating transactions, but it also ensures that new bitcoins are added into the system at a predictable, steady rate. Bitcoin’s decentralization gives it a very robust and secure system. No single node on the network can make decisions on everyone’s behalf. Transaction validation and protocol updates all need to have group consensus, protecting Bitcoin from mismanagement and abuse. Bitcoin’s value in distribution By allowing as many people as possible to participate, the Bitcoin network improves its overall security. The more nodes connected to Bitcoin's distributed network, the more value it gets. In distributing the ledger of transactions across different users, there’s no need to rely on a single source of truth. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM Without distribution, we can have multiple versions of the truth that are difficult to verify. Think about a document sent via email that a team is working on. As the team sends the document among themselves, they create different versions with different states that can be difficult to track. Also, a centralized database is more susceptible to cyber-attacks and outages than a distributed one. It’s not uncommon to have issues using a credit card because of a server issue. A cloud-based system like the one of Bitcoin is maintained by thousands of users around the world, making it much more efficient and secure. Bitcoin’s value in systems of trust Bitcoin’s decentralization is a huge network benefit, but it still needs some safeguarding. Getting users to cooperate on any large, decentralized network is always a challenge. To solve this problem, known as the Byzantine General’s Problem, Satoshi Nakamoto implemented a Proof of Work consensus mechanism that rewards positive behavior.  Trust is an essential part of any valuable item or commodity. Losing trust in a central bank is disastrous for a nation's currency. Likewise, to use international money transfers, we have to trust the financial institutions involved. There is more inbuilt trust in Bitcoin's operations than other systems and assets we use daily. Read next: Stablecoins In Times Of Crypto Crash. What is Terra (UST)? A Deep Look Into Terra Altcoin. Terra - Leading Decentralised And Open-Source Public Blockchain Protocol | FXMAG.COM However, Bitcoin users don't need to trust each other. They only need to trust Bitcoin's technology, which has proven to be very reliable and secure and the source code is open for anyone to see. Proof of Work is a transparent mechanism that anyone can verify and check themselves. It’s easy to see the value here in generating consensus that is almost always error-free. Bitcoin’s value in scarcity Inbuilt within Bitcoin's framework is a limited supply of 21,000,000 BTC. No more will be available once Bitcoin miners mine the last coin around 2140. While traditional commodities like gold, silver, and oil are limited, we find new reserves every year. These discoveries make it difficult to calculate their exact scarcity.  Once we have mined all BTC, Bitcoin should, in theory, be deflationary. As users lose or burn coins, the supply will decrease and likely cause an increase in price. For this reason, holders see a lot of value in Bitcoin's scarcity. Bitcoin's scarcity has also led to the popular Stock to Flow model. The model attempts to predict BTC's future value based upon Bitcoin mining per year and the overall stock. When back-tested, it quite accurately models the price curve that we have seen so far. According to this model, the main driving force in Bitcoin's price is its scarcity. By having a possible relationship between price and scarcity, holders find value in using Bitcoin as a store of value. We'll dive further into this concept at the end of the article.   Bitcoin’s value in security In terms of keeping your invested funds safe, there aren’t many other options that provide as much security as Bitcoin. If you follow the best practices, then your funds are incredibly secure. In developed countries, you can easily take for granted the security offered by banks. But for many people, financial institutions cannot provide them the protection they need, and holding large amounts of cash can be very risky. Malicious attacks to the Bitcoin network require owning more than 51% of current mining power, making coordination on this scale almost impossible. The probability of a successful attack on Bitcoin is extremely low, and even if it happens, it won’t last long. The only real threats to the storage of your BTC are: Fraud and phishing attacks Losing your private key Storing your BTC in a compromised custodial wallet where you don’t own the private key By following best practices to make sure the above doesn’t happen, you should have a level of security that exceeds even your bank. The best part is that you don’t even have to pay to keep your crypto safe. And unlike banks, there are no daily or monthly limits. Bitcoin allows you to have full control over your money. Bitcoin as a store of value Most of the characteristics already described also make Bitcoin a good fit as a store of value. Precious metals, U.S. dollars, and government bonds are more traditional options, but Bitcoin is gaining a reputation as a modern alternative and digital gold. For something to be a good store of value, it needs: Durability: So long as there are still computers maintaining the network, Bitcoin is 100% durable. BTC cannot be destroyed like physical cash and is, in fact, more durable than fiat currencies and precious metals. Portability: As a digital currency, Bitcoin is incredibly portable. All you need is an Internet connection and your private keys to access your BTC holdings from anywhere. Divisibility: Each BTC is divisible into 100,000,000 satoshis, allowing users to make transactions of all sizes. Fungibility: Each BTC or satoshi is interchangeable with another. This aspect allows the cryptocurrency to be used as an exchange of value with others globally. Scarcity: There will only ever be 21,000,000 BTC in existence, and millions are already lost forever. Bitcoin’s supply is much more limited than inflationary fiat currencies, where the supply increases over time. Acceptability: There's been widespread adoption of BTC as a payment method for individuals and companies, and the blockchain industry just continues to grow every day. If you want to explore the topic a bit more, check out Is Bitcoin a Store of Value?. Closing thoughts There is, unfortunately, no single and neat answer as to why Bitcoin has value. The cryptocurrency has the key aspects of many assets with worth, like precious metals and fiat, but doesn't fit into an easily identifiable box. It acts like money without government backing and has scarcity like a commodity even though it's digital.  A general lack of knowledge and misunderstanding has led some to question whether Bitcoin has any value at all. With words like "scam" and "Ponzi scheme" used, it's easy to see that some people have unfounded fears. But, ultimately, Bitcoin runs on a very secure network and the cryptocurrency has a considerable amount of value placed on it by its community, investors, and traders.
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Binance Academy: Crypto Fear And Greed Index Explained

Binance Academy Binance Academy 11.05.2022 20:39
TL;DR The Crypto Fear and Greed Index provides a score of 0 to 100 for crypto market sentiment. It’s based on the CNNMoney Fear and Greed Index for analyzing the stock market.  Fear (a score of 0 to 49) indicates undervaluation and excess supply in the market. Greed (a score of 50 to 100) suggests an overvaluation of cryptocurrencies and a possible bubble. Noticing changes in the level of fear and greed can become part of your trading strategy when choosing to enter or exit the crypto market.   Introduction When deciding if you should buy in or sell out of the crypto market, a good trader or investor will always look for supportive data. There are charts to look at, fundamentals to analyze, and market sentiment to tap into. However, studying every metric and index available isn't the most efficient use of time. With the Crypto Fear and Greed Index, a combination of sentiment and fundamental metrics provide a glimpse of market fear and greed. While you should not rely on this indicator alone, it can help you figure out the overall feeling of the cryptocurrency markets.    Learn more on Binance.com What is an index? Traditionally, an index takes multiple data points and combines them into a single statistical measure. You might have already heard of the Dow Jones Industrial Average (DJIA), a famous index that tracks the stock market. The DJIA is a price-weighted combination of 30 large companies listed on numerous stock exchanges in the U.S. Traders and investors can buy DJIA to get a combined exposure to these companies' stocks. The Crypto Fear and Greed Index is also a weighted measure of market data, but that's where the similarities end. The Crypto Fear and Greed Index is not something you can purchase nor any kind of financial instrument. It’s just a market indicator that can complement your analysis.   What is a market indicator? Market indicators make it easier for traders and investors to analyze market data. Indicators exist in all forms of market analysis: technical analysis, fundamental analysis, and sentiment analysis. If you've experimented already with technical analysis (TA), you've probably already got some experience with indicators. These range from simple moving averages to complex chart patterns like Ichimoku Clouds. TA indicators are concerned with analyzing prices, trading volume, and other statistical trends. Fundamental analysis indicators take a different approach. When you research a token or stock, you’re essentially trying to determine the underlying fundamental value of the project. For example, your research could include the number of users and total market value combined into an indicator. In addition, we have market sentiment indicators that measure the feelings and thoughts of investors and traders. The Crypto Fear and Greed Index is just one of many. Other examples include The Bull & Bear Index from Augmento and WhaleAlert that tracks large transfers from whales in crypto markets. To an extent, crypto research relies heavily on analyzing social media, the community, and public opinion. For this reason, sentiment analysis can come in handy for this asset class.   What exactly is a Fear and Greed Index? CNNMoney originally created the Fear and Greed Index to analyze market sentiment for stocks and shares. Alternative.me have since then made their version tailored to the crypto market.  The Crypto Fear and Greed Index analyzes a basket of different trends and market indicators to determine whether the market participants are feeling greedy or fearful. A score of 0 indicates extreme fear, while 100 suggests extreme greed. A score of 50 shows the market is somewhat neutral. A fearful market could be an indication that cryptocurrencies are undervalued. Too much fear in a market can lead to overselling and excess panic. Fear doesn't necessarily mean that the market has entered into a long-term bearish trend. Instead, you can think of it as a short or mid-term reference to overall market sentiment. Greed in the market is the opposite situation. If investors and traders are greedy, there's a possibility for overvaluation and a bubble. Imagine a situation where FOMO (fear of missing out) causes investors to pump the markets, overvaluing Bitcoin’s price. In other words, the increased greed may lead to excess demand, artificially inflating the price.   How does the Crypto Fear and Greed Index work? Each day, Alternate.me calculates a new value from 0 to 100. As of July 2021, the Crypto Fear and Greed Index only uses Bitcoin-related information. The reason behind this is BTC's significant correlation with the crypto market as a whole when it comes to price and sentiment. There are plans in the future to cover other large coins, presumably including Ether (ETH) and BNB.     You can divide the index's scale into the following categories: 0-24: Extreme fear (orange) 25-49: Fear (amber/yellow) 50-74: Greed (light green) 75-100: Extreme greed (green) The index calculates the value by combining five different weighted market factors. Let's take a look: 1. Volatility (25% of the index). Volatility measures the current value of Bitcoin with averages from the last 30 and 90 days. Here, the index uses volatility as a stand-in for uncertainty in the market. 2. Market momentum/volume (25% of the index). Bitcoin's current trading volume and market momentum are compared with the previous 30 and 90-day average values and then combined. Constant high-volume buying suggests positive or greedy market sentiment. 3. Social media (15% of the index). This factor looks at the number of Twitter hashtags related to Bitcoin and, specifically, its interaction rate. Typically, a constant and unusually high amount of interactions relates more to market greed than fear. 4. Bitcoin dominance (10% of the index). This input measures BTC's dominance of the market. Increased market dominance shows new investment into the coin and the possible reallocation of funds from altcoins. 5. Google Trends (10% of the index). By looking at Google Trends data for Bitcoin-related search queries, the index can provide insights into market sentiment. For example, a rise in "Bitcoin Scam" searches would indicate more fear in the market. 6. Survey results (15% Index Score). This input is currently paused and has been for some time.   Why is the Crypto Fear and Greed Index useful? The Crypto Fear and Greed Index can be a valuable tool for checking market sentiment changes. Large swings may provide an opportunity to enter or exit before the rest of the market follows the trend. We can see a brief example of this by checking the last three months of total cryptocurrency market cap versus the index figures.     Point 1 shows April 26, 2021, the bottom of a significant swing in the index value from 73 (Greed) to 27 (fear). Point 2 shows the start of another slide on May 12, 2021, from 68 (greed) to 26 (fear). We can see if this has matched with the crypto market by comparing these changes with the overall crypto market capitalization.     Point 1 again shows April 26 starting at $1.78 trillion (USD) before climbing up to a peak of $2.53 trillion on May 12. If you combine this with what we see above, you see a large swing in sentiment from greed to fear coinciding with a local bottom in the crypto market cap. As the market becomes more greedy, the overall market cap rises until it reaches its maximum. At the maximum, sentiment once again sharply drops. With our example, the index has proven helpful in finding a buying opportunity and predicting a sell-off in the market. Using the index, you can check whether your emotional reactions are overblown or in line with the market. But will it always be helpful for every situation? More than likely, no.   Can I use the index for long-term analysis? The indicator doesn’t work as well on long-term analysis of crypto market cycles. Within a bull or bear run, there are multiple cycles of fear and greed. These switches are useful for swing traders to take advantage of. However, for investors who want to hold, it will be difficult to predict the change from a bull to a bear market just from the index. You will need to analyze other market aspects to get a long-term perspective. As always, recommended advice is that you don't rely solely on one indicator or style of analysis. Make sure to do your own research (DYOR) before investing any money and only invest what you can afford to lose.     Closing thoughts The Crypto Fear and Greed Index is a simple way to gather and summarize a whole range of fundamental and market sentiment metrics. Rather than have to do this yourself, you can rely on the indicator to track social media, Google Trends, and other statistics. If you want to include it in your analysis, consider complementing it with other metrics and indicators to get a more balanced view.
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Binance Academy: Adding Arbitrum To Crypto Wallet (MetaMask)

Binance Academy Binance Academy 10.05.2022 12:20
TL;DR MetaMask is a crypto wallet that connects by default to the Ethereum mainnet. You can find the extension and mobile app on the official MetaMask website. To connect to networks like Arbitrum, you'll need to add some blockchain information to MetaMask. This includes a chain ID, custom RPC URL, and network name. To add an Arbitrum token, you’ll also need to import the correct token address. Adding new blockchains to MetaMask is a transferable skill, and you can apply the skill to add other EVM networks like BNB Smart Chain (formerly Binance Smart Chain) and Polygon.   Introduction To use the Arbitrum blockchain, you’ll need a compatible crypto wallet like MetaMask. However, MetaMask doesn’t automatically have Arbitrum added as a default blockchain. Setting up your wallet to connect to Arbitrum is a simple process and can be done quickly.    Learn more on Binance.com Installing and setting up MetaMask 1. MetaMask is available for Chrome, iOS, or Android on the MetaMask website. Make sure to check you’re using the official website and downloading the legitimate extension.     2. After installing the extension, you’ll see the MetaMask welcome page. Click [Get Started] to begin.     3. If you want a new wallet, click the [Create a Wallet] button. You can also import an existing wallet with its seed phrase using the [Import wallet] option.     4. If you’d like to share anonymous usage data with Metamask, you can do so at this stage. Accepting or refusing this will not affect your wallet usage.     5. Create a secure password for your wallet. Note this isn’t your seed phrase. The password simply prevents people from accessing your wallet through your device. If you forget your password, you can always retrieve your crypto with your seed phrase.     6. After choosing your password, MetaMask will provide some useful information regarding your wallet’s seed phrase. Read through it carefully if you’re not familiar with how crypto wallets work.     7. You’ll now see with your seed phrase. Click the lock to view the phrase and take note of the words in the correct order. Store the phrase securely (preferably offline) and never share it with anyone. This string of words is the final backup of your wallet’s contents. Click [Next] to continue.     8. You’ll need to repeat your seed phrase by selecting the words in the correct order. Click [Confirm] once finished.     9. Your MetaMask wallet will now be ready to use. Click [All Done] to view your new wallet.     10. You can pin Metamask to your Chrome browser by clicking the puzzle icon and selecting it. MetaMask will initially only be connected to Ethereum. Next, we’ll look at how to connect Metamask to Arbitrum.     Configuring the wallet 1. Adding Arbitrum functionality to your wallet involves adding some simple network details to Metamask. First, open Metamask and click the network dropdown menu.     2. Now, click [Add Network] on the pop-up.     3. You’ll need to add the following details on the [Add a network] page that will open. Click [Save] when you’re finished. Network Name Arbitrum One New RPC URL https://arb1.arbitrum.io/rpc  Chain ID 42161 Currency Symbol ETH Block Explorer URL https://arbiscan.io/        4. You’ll now successfully be connected to the Arbitrum network.   Adding Arbitrum tokens to MetaMask For Arbitrum tokens to appear on the wallet UI, you need to manually add them. Note your wallet will still receive tokens that haven’t been imported, but they just won’t show up natively. 1. First, head to Arbiscan and find the token contract and details of the token you want to add. If the token isn’t on Arbiscan, get the contract address from the project’s official website. You should always be careful of fake contracts created by scammers.     2. Return to MetaMask and click [Import tokens].     3. Paste in the token’s contract address and MetaMask should fill in the rest of the details. If not, manually add them. To finish, click [Add Custom Token].     4. Click [Import Tokens].     5. Your wallet will now display the balance of the token you just added.         Closing thoughts After setting up the Arbitrum mainnet in MetaMask, you’re free to start sending crypto, collecting NFTs, and using DeFi DApp smart contracts. You can even swap tokens within the extension. Make sure, however, to have ETH in your wallet to pay your transaction costs. You can get this by using an Arbitrum bridge for your ETH on the Ethereum mainnet.  MetaMask isn't just for Ethereum and Arbitrum as well. The wallet actually supports the whole Ethereum Virtual Machine (EVM) ecosystem, including BNB Smart Chain. With the skills in this tutorial, you’ll now be able to add more chains and begin using them with the correct details.
Binance Academy: "How to Add Fantom to MetaMask?"

Binance Academy: (FTM) Fantom And MetaMask - Adding Crypto To The Wallet

Binance Academy Binance Academy 09.05.2022 08:41
TL;DR MetaMask is a crypto wallet app and browser extension that primarily interacts with the Ethereum mainnet. To download the extension, you can visit the official MetaMask website. Besides Ethereum, Metamask can also interact with other networks like Fantom. To do this, you’ll need to provide some information to MetaMask. This includes a custom RPC URL, chain ID, and network name. Then, you’ll be able to add Fantom tokens once you import the token address. Adding new blockchains to MetaMask is an important crypto skill that applies to other EVM networks like Binance Smart Chain.   Introduction To get started, you’ll first need a supported crypto wallet like MetaMask. Note that Fantom is not a default network on MetaMask. However, you can easily set up your browser wallet to connect to Fantom in just a few minutes.     Learn more on Binance.com   Installing and setting up MetaMask 1. Download and install MetaMask on Chrome, iOS, or Android through the MetaMask website. To ensure you download the real version, double-check you are on the official MetaMask website.      2. Once you have downloaded and installed the extension, click [Get Started] on the MetaMask welcome page.     3. For new wallet users, click [Create a Wallet]. If you already have a wallet, you can import it using the seed phrase with the [Import wallet] option.     4. MetaMask will ask if you would like to help improve the extension by sharing anonymous usage data. Accepting or refusing this will not affect your MetaMask experience.     5. Create a secure password. This will be used to log in to your wallet. Note that your password is not your seed phrase. The password safeguards your wallet from anyone using your device. The seed phrase allows you to access your crypto even if you forget your password.     6. Now that you have created your password, MetaMask will provide important information about your seed phrase. If you’re new to crypto wallets, make sure to read through this section and watch the video before continuing.      7. Next, click the lock to receive your 12-word seed phrase. Write the words down in the correct order and store them in a safe location (preferably offline). Do not share your seed phrase with anyone. If you lose access, the seed phrase is the last backup to your account. Click [Next] to continue.     8. Confirm your seed phrase by selecting the words at the bottom of the screen in the right order. Once complete, click [Confirm].     9. You have completed setting up your MetaMask wallet. To start using your wallet, click [All Done].     10. For easy access, click the puzzle icon on the Chrome browser to pin MetaMask on your toolbar. By default, Metamask is only connected to Ethereum. In the following section, you will learn how to connect MetaMask to Fantom.     Configuring the wallet 1. You will need to provide some network details to add Fantom support to your MetaMask wallet. First, open MetaMask and click the network dropdown menu.     2. Click [Add Network] on the pop-up.     3. On the [Add a network] page, add the following details. Click [Save] when you’re finished. Network Name Fantom New RPC URL Choose any of the following: https://rpc.ftm.tools https://rpc.fantom.network https://rpc2.fantom.network https://rpc3.fantom.network Chain ID 250 Currency Symbol FTM Block Explorer URL https://ftmscan.com/       4. You have successfully connected to the Fantom network.   Adding Fantom tokens to MetaMask To add Fantom tokens other than FTM, you will need to do this manually. Your wallet can still receive tokens that aren’t imported. 1. Visit FTMScan and find the token contract and details of the token you’d like to add. For tokens not on FTMScan, always look for the contract address from the project’s official website or social media channels. Users should be wary of fake contracts created by scammers.     2. Return to MetaMask and click [Import tokens].     3. Copy and paste the token’s contract address, and MetaMask should automatically fill in the rest of the details. Add them manually if the information is not filled in. Click [Add Custom Token] to finish.     4. Click [Import Tokens].     5. Your wallet will now display the token you added with the correct balance.           Closing thoughts Once Fantom is set up on your MetaMask, you can start transacting, collecting NFTs, interacting with DeFi DApps, and managing your crypto. Plus, you can also swap tokens within the extension. MetaMask isn’t exclusive to the Ethereum network or Fantom. It can also be connected to other networks that are compatible with the entire Ethereum Virtual Machine (EVM). These include the BNB Smart Chain, Polygon, Avalanche, Harmony, and many more. With our step-by-step guide, you’re now ready to add more chains and start exploring.
Binance Academy: THORChain (RUNE) - What Is It?

Binance Academy: THORChain (RUNE) - What Is It?

Binance Academy Binance Academy 29.04.2022 10:16
TL;DR THORChain is a decentralized liquidity protocol that allows users to swap assets in a permissionless setting. It enables the exchange of native layer-1 assets like BTC by acting as a vault manager. To secure its network, THORChain uses Tendermint and Cosmos-SDK. It also utilizes Threshold Signature Schemes (TSS) for its leaderless primary vault.   Introduction THORChain was conceptualized in 2018 by a team participating in a Binance Dexathon (decentralized exchange coding competition). THORChain facilitates cross-chain liquidity and reduce the need for centralized exchanges and third parties within the DeFi space. It enables cross-chain swaps and yield generation on crypto-assets like Bitcoin and Ethereum.     How does THORChain work? THORChain is a layer-1 network based on the Cosmos SDK and Tendermint. THORChain works as a cross-chain permissionless Decentralized Exchange (DEX). It also uses Threshold Signature Schemes (TSS) to secure its leaderless asset vault. Tendermint and TSS provide a layered Byzantine Fault Tolerance (BFT) consensus mechanism, and a two-thirds majority consensus is required for funds to enter and exit the primary TSS vault. There are four key types of users in the THORChain ecosystem:  Swappers who use liquidity pools to swap assets. Liquidity providers who add liquidity to pools and earn rewards. Node operators who provide bonds and are paid to secure the system. Traders who monitor and rebalance pools with the intention of making profits. Unlike other cross-chain protocols, THORChain doesn’t wrap assets before swapping. Instead, it uses native assets on THORChain to perform autonomous, transparent asset swaps. Asset swaps are enabled by liquidity pools. These pools are made up of assets contributed by Liquidity Providers and are secured by a network of node operators. Liquidity providers deposit their assets in THORChain’s liquidity pools to earn yield, made of swap fees and system rewards. Anyone can add liquidity to an existing pool, making THORChain permissionless. In addition, THORChain is non-custodial because only the original depositor can withdraw the assets that they have deposited in the pool. Liquidity providers can also propose new asset pools, provided these assets are tokens of a supported chain in the ecosystem.  Node operators, called THORNodes, are independent and communicate with each other to form a cross-chain swapping network. In exchange for securing the network, they will receive rewards in the form of fees for every swap made. Before becoming a node operator, a user has to provide a bond of RUNE. These bonds are held as collateral to ensure that node operators behave in the best interest of THORChain. The total bonded needs to be twice as big as the RUNE pooled. During an asset swap, swappers will send their assets to THORChain and receive another asset. For instance, when swapping BTC to ETH, swappers will send their BTC to THORChain. When BTC enters the network, there will be a BTC to RUNE swap and then a RUNE to ETH swap. ETH will then be sent to the swapper from a THORChain vault. This process allows THORChain to perform native swaps without wrapping assets. Market prices on THORChain are regulated by arbitrage traders, which in turn defines the value of asset swaps. These traders look for assets that are mispriced between markets to make profits from the price differences. This mechanism allows THORChain market prices to be regulated naturally, without the need for oracles. With this liquidity pool model, THORChain is able to determine how much any asset is worth in any other asset simply by using pool balances. In effect, THORChain acts as a vault manager that monitors deposits and withdrawals while using pool ratios to price assets. This helps create decentralized liquidity, removing centralized intermediaries.   What makes THORChain unique? THORChain is a DEX that doesn’t require wrapping for asset swaps. Other benefits of THORChain include: Swappers and traders Have the ability to swap layer-1 native assets across multiple blockchains. Are not required to be registered – anyone can send a transaction and THORChain will execute the swap. Do not need to wrap their assets – THORChain uses its vaults of native assets to perform swaps. Can access transparent, fair prices without relying on centralized third parties or oracles. Enjoy liquidity on demand at any time. Liquidity providers Earn yield on idle assets like native BTC, ETH, BNB, and LUNA. Enjoy impermanent loss (IL) protection of up to 100% after they have been in the pool for 100 days. Not subjected to lock-in periods. Not required to be registered. Do not have to deal with third-parties. Node operators Earn rewards when they secure the network. Encouraged to remain anonymous to increase decentralization. Not required to be registered.   What is RUNE? RUNE is the native coin of THORChain. Within the network, it acts as a base pair for users to swap RUNE for any other supported asset. It has a supply of 500 million and four main use cases: settlement, security, governance and incentives. RUNE as a settlement asset RUNE is the settlement asset for all liquidity pools, facilitating swaps between two pools. A 1:1 ratio of RUNE:ASSET is required for each pool. For example, a pool with $100,000 in BTC will need to hold $100,000 worth of RUNE. RUNE for security To ensure security, node operators have to bond twice as many RUNE as the amount they added to a pool. The RUNE bonds are held as collateral to ensure that the node operators behave in the best interest of the network. RUNE for governance RUNE token holders can choose which asset or chain they want to give priority to. They do so by voting with their liquidity. For instance, a pool that has the most RUNE committed will enjoy higher priority. RUNE for incentives Block rewards and swap fees are paid to liquidity providers and node operators in RUNE on a set emission schedule. RUNE can also be used to pay for gas fees. The smallest denomination of RUNE, called a Tor, is eight decimal points. RUNE aims to move towards a predictable deterministic value. By design, RUNE’s market cap should be minimally three times the total value of non-RUNE assets in the ecosystem’s liquidity pools.    How to buy RUNE on Binance? You can buy RUNE on cryptocurrency exchanges like Binance.  1. Log in to your Binance account and click [Trade]. You can use either the classic or advanced trading mode to buy RUNE. 2. Type “RUNE” on the search bar to see the available trading pairs. We will use RUNE/BUSD as an example. 3. Go to the [Spot] box and enter the amount of RUNE you want to buy. In this example, we will use a Market order. Click [Buy RUNE] to confirm your order, and the purchased RUNE will be credited to your Spot Wallet.     Closing thoughts As a cross-chain DEX in DeFi, THORChain is paving the way for autonomous asset swaps. The design of RUNE as a settlement, security asset, governance, and incentive tool allows THORChain’s native swap model to be used in a decentralized environment and across multiple blockchains.
Crypto: How To Estimate A Risk And Take A Profit?

Altcoins: Reef Coin (REEF) What Is It?

Binance Academy Binance Academy 28.04.2022 16:43
TL;DR Reef is a layer 1 blockchain built using Parity’s Substrate technology. Launched in 2019 by Denko Mancheski, it's undergone a significant transformation from a DeFi platform to a fully-functioning blockchain. The network uses Nominated Proof of Stake (NPoS) to process valid blocks of transactions. Nominators stake REEF behind validators with hopes of being selected into the active validator set. When a validator successfully processes a block, a reward is shared between them and 64 nominators. For network upgrades, a Technical Council nominated via a Proof of Commitment (PoC) consensus mechanism proposes changes. The blockchain's native cryptocurrency, REEF, is used to take part in governance and pay network transaction fees. You can purchase REEF on Binance with a debit/credit card or by trading for it with other cryptocurrencies.   Introduction Reef is a Substrate-based, layer 1 blockchain founded in 2019 by Denko Mancheski. In November 2021, the project rebranded from Reef Finance to reflect its development from a Decentralized Finance (DeFi) platform to a fully functioning blockchain.  Like other networks, Reef offers use cases for NFTs, DeFi, smart contract development, and GameFi. Reef also provides liquidity bridges to move ERC-20 tokens between Reef and Ethereum, and BEP-20 tokens between Reef and the BNB Chain.     The Reef blockchain Reef was developed using Parity’s Substrate software development kit. This aspect makes it interoperable with Polkadot parachains and part of a larger Web3 network of chains. Reef is Ethereum Virtual Machine (EVM) compatible, making it easy to port EVM Decentralized Applications (DApps) and build on, especially for users experienced with Solidity (Ethereum’s primary coding language). The blockchain uses a NPoS consensus mechanism for block production and Proof of Commitment (PoC) for electing members to a Technical Council. Reef burns all fees on the network (including for smart contracts), and Validators are paid from a fixed rewards pool. This removes any economic incentive to create inefficient contracts with high fees, which can cause congestion on a network.   How Reef governance works Compared to Bitcoin (BTC) and Ethereum (ETH), Reef has implemented a governance model that provides direct methods for upgradeability. Bitcoin and Ethereum rely on their Proof of Work (PoW) miners to decide which upgrades to accept. This method leads to stagnation and an unwillingness to improve scalability, harming mining profits. Reef, however, allows two groups to work together in implementing changes to the network: a Technical Council and Validators. The Technical Council The Technical Council approves and reviews network updates. These members are elected via the PoC consensus mechanism. PoC has similarities with Delegated Proof of Stake but incorporates a long bonding period of at least a year. Anyone, therefore, who stakes Reef to nominate a Technical Council member is incentivized to vote for competent members with longevity. Technical Council members make decisions on block size, block time, throughput, and other technical parameters. Making these changes on-chain is possible through a majority approval from the Technical Council. Validators Validators process blocks of legitimate transactions and run a node. These are elected using the NPoS consensus mechanism. As previously mentioned, all transaction fees are burned on the Reef. This means that validators are paid rewards from a yearly inflation pool (set roughly at 8%).  Validators are selected by nominators, which we'll discuss shortly. If a validator acts maliciously or misbehaves, they will have their stake slashed.   Staking on Reef Both validators and nominators in NPoS must stake REEF to take part. By staking REEF, nominators earn more REEF by picking good validator candidates. If the validator is elected into the active set and successfully processes blocks, the nominator can share their rewards. If the validator misbehaves, the nominator will lose some of their stake, and the validator will be slashed. Staked REEF is locked until the nominator decides to remove their validator nomination, which becomes effective in the next era (roughly 24 hours). The nominator must then wait 28 days for their stake to be returned. Active validator set and rewards Not every nominated validator will make it into the active set of validators. In most cases, an algorithm will only allow you to actively support one successful validator per era. This is the case even if you staked behind multiple ones chosen for the active set. Each validator can only support payouts to 64 nominators. If a validator has more nominators than this, they are oversubscribed. Only the top 64 nominators by the amount staked will receive rewards.  Even if they don't receive rewards, the other nominators' stakes will still count towards the total staked behind a validator. The set of validators is computed off-chain, with some nominators eliminated according to the size of their stake.   The Reef ecosystem Reef isn’t only made up of its blockchain. It has an ecosystem of tools and services that complement its layer 1 network. Reef Web Wallet Reef Web Wallet is a crypto wallet, Decentralized Exchange (DEX), and token creator on Reef. You can swap, send, and pool tokens here, much like on ReefSwap. You'll need to download and install the Reef Browser Extension to use the app.     ReefScan ReefScan is a blockchain explorer where users can browse transactions, wallet IDs, smart contracts, and other on-chain information. It uses a similar format to Etherscan or BscScan, making it simple to use. You can also interact with Reef smart contracts via Reefscan.     ReefSwap ReefSwap is a DEX offering a swapping service for Reef tokens. It uses the familiar Uniswap V2 model and requires users to access it via the Reef browser extension. This is due to Reef being Substrate-based. Users can also claim an EVM wallet address and assign it to their Reef Account.     What is REEF? The REEF token is Reef's native cryptocurrency. It can be used to pay transaction fees on the network using its gas system and in on-chain governance. This includes both the NPoS and PoC consensus mechanisms.  REEF was originally minted as an ERC-20 token on Ethereum and BEP-20 on BNB Smart Chain. However, you can now convert it 1:1 on Reef.   Where can I buy REEF? Binance offers two ways to purchase REEF. First, you can buy REEF with a credit or debit card in selected fiat currencies. Visit Binance's [Buy Crypto with Debit/Credit Card] page, choose the currency you want to pay in, and select REEF in the bottom field.  Click [Continue] to confirm your purchase and follow the instructions given.     You can also trade cryptocurrencies for REEF, including BUSD, BTC, USDT, and TRY. Navigate to Binance's Spot view and type REEF in the trading pair search field. This will display all the available trading pairs. For more information on using the Exchange view, visit our How to Use TradingView on the Binance Website guide.       Conclusion For many, Reef is still well-known for its original DeFi business model. However, Reef has made significant development changes and has grown into a more developed ecosystem and fully functioning blockchain. The blockchain’s new developments are still young, giving it great potential for growth in the number of smart contracts and Decentralized Applications (DApps) that can be deployed on the network.
What Is BitTorrent (BTTC)? Speed, File System, Rewards. How Does BitTorrent Work?

Formula 1 Fan, You Should Check It Out! (ALPINE) Alpine F1® Team Fan Token - What Is It?

Binance Academy Binance Academy 27.04.2022 10:33
TL;DR Alpine F1® Team Fan Token (ALPINE) is a BEP-20 utility token of the BWT Alpine F1® Team. Fans of the BWT Alpine F1® Team can purchase ALPINE Fan Tokens to enjoy exclusive benefits and enrich their personal fan experience. By issuing the token, Alpine F1® is exploring new methods of fan engagement powered by blockchain technology. Introduction The BWT Alpine F1® Team made its debut at the start of the 2021 Formula One World Championship in the Formula 1 Gulf Air Bahrain Grand Prix. The team, headed up by CEO Laurent Rossi,  is the spiritual successor to the Renault F1® Team. This new venture promotes Renault Group’s classic racing and sports car brand, Alpine.  Learn more on Binance.com The team competes in the F1® Formula One World Championship with race winner Estaban Ocon and two-time world champion Fernando Alonso. Alpine also celebrated its maiden win at the Formula 1 Rolex Magyar Nagydij 2021. Racing fans of the BWT Alpine F1® Team can use the ALPINE Fan Tokens launched on the Binance Launchpad to participate in the fun, engaging ecosystem and get rewarded in the process.   What is the Alpine F1® Team Fan Token ecosystem? The digital fan base of BWT F1® Team currently exceeds 6 million across social media platforms. Powered by the Alpine F1® Team Fan Token, the BWT Alpine F1® Team brand identity can be boosted with increased fan engagement facilitated by the fan token. Simply put, the ALPINE Fan Tokens allow millions of fans to take part in exclusive experiences and access exclusive merchandise. With the fan token model, the ecosystem will grow with the increasing fan base and fan offerings. What is ALPINE? Named after the racing team, ALPINE was first launched on the Binance Launchpad in February 2022 as the third Fan Token Launchpad project by Binance. The total token supply of ALPINE is 40 million, with 10% of the supply sold during the Binance Launchpad Sale. ALPINE Fan Tokens are native BEP-20 tokens issued on the BNB Smart Chain (formerly BSC). This means that the BEP-20 ALPINE tokens will be able to connect with other BSC-based decentralized exchanges (DEX) and decentralized applications (dApps). As a BEP-20 token, ALPINE enables users to enjoy low transaction fees and a 3-second block time. Unlike NFTs, all Binance Fan tokens, including ALPINE, are fungible. This means that they can be exchanged for something else of the same value. ALPINE was designed to be fungible so that fans can exchange them for merchandise and experiences. However, ALPINE can also be exchanged for exclusive NFTs. What can ALPINE tokens do? ALPINE token holders can participate in fan engagement-related voting sessions on the Binance Fan Token platform. These voting sessions allow users to influence the decisions of the team they support. Previous voting sessions include voting for the 2022 Alpine Esports jersey worn by drivers like Nicolas Longuet and voting for the Binance Alpine Esports livery and circuit used on the team’s simulator. Holders have also been able to collect the exclusive Slipstream into the Future Mystery Box available in exchange for 3 ALPINE. This Mystery Box included a series of posters to collect, allowing holders to later stake in the NFT PowerStation for exclusive prizes. ALPINE token holders also have access to other forms of engagement with the BWT Alpine F1® Team on the Binance Fan Token Platform, including receiving signed merchandise, meet-and-greet sessions with the team drivers, and other fan-related events. Apart from its engagement and voting opportunities, holders can also stake ALPINE in the NFT PowerStation. Through staking, they’ll be able to access digital collectibles and fan rewards. In the future, ALPINE token holders will also be able to access multiple gamification features on the Binance Fan Token Platform. A donation feature, where ALPINE token holders can directly donate to the team in exchange for a Proof-of-Loyalty badge, is also in the pipeline. ALPINE can be accessed by both the BWT Alpine F1® Team fan base and the larger Binance user base. As such, ALPINE can be withdrawn from Binance like other BEP-20 tokens. How to buy ALPINE on Binance? You can buy Alpine F1® Team Fan Token (ALPINE) on cryptocurrency exchanges like Binance.  1. Log in to your Binance account and click [Trade]. Select either the classic or advanced trading mode to start. 2. Type “ALPINE” on the search bar to see the available trading pairs. We will use ALPINE/BUSD as an example. 3. Go to the [Spot] box and enter the amount of ALPINE you want to buy. In this example, we will use a Market order. Click [Buy ALPINE] to confirm your order, and the purchased ALPINE will be credited to your Spot Wallet.   Closing thoughts The Alpine F1® Team Fan Token is Binance’s first F1® Fan Token. As its fan base grows, the community can expect an expansion of ALPINE to include the following: Donations in ALPINE, Team Games, the currency for tickets and merchandise following the Fan Shop launch, and further integration of Fan Tokens into the BWT Alpine F1® Team ecosystem in different forms including membership and an e-commerce platform.
The British Pound Faces Further Breakdown Amidst Dollar Strength and Government Shutdown Risks

Easy Money - Play To Earn Games!? Binance Academy: Yield Guild Games (YGG) - What Is It?

Binance Academy Binance Academy 26.04.2022 11:39
TL;DR Yield Guild Games (YGG) is a gaming guild focused on blockchain play-to-earn games. It’s a community that invests in NFT assets and connects blockchain gamers around the world. Their goal is to build a network of players and investors who help each other get started and grow in the NFT gaming space. Introduction Since the success of Axie Infinity, the space of play-to-earn (P2E) blockchain games has been growing rapidly. While the P2E trend has attracted millions of people around the world, gaming NFTs are not affordable for many players, especially in developing countries. Yield Guild Games is building a P2E community and offering a solution to these players, so they can get started with NFT gaming. Learn more on Binance.com What is Yield Guild Games (YGG)? Yield Guild Games (YGG) is a Decentralized Autonomous Organization (DAO) that invests in non-fungible tokens (NFTs) used in blockchain games. These games are part of a broader concept known as the metaverse. The term metaverse refers to the many elements of blockchain-based digital worlds, including digital land, digital assets, and more. Read next: Binance Academy: Meme Coins - What Are They? Dogelon Mars (ELON), Dogecoin (DOGE), Shiba Inu (SHIB), SafeMoon (SAFEMOON), Kishu Inu (KISHU) And AKITA| FXMAG.COM The idea of creating a global play-to-earn gaming community arose in 2018. Gabby Dizon, the YGG co-founder and CEO, noticed that blockchain gaming was trending in Southeast Asia. At that time, many gamers were looking to get started in the popular NFT game Axie Infinity, but they lacked the money to buy the in-game NFT characters called Axies. Understanding that blockchain gaming can be an empowering tool for those living in developing countries, Dizon started lending his Axies to other players who couldn’t afford to buy their own. This inspired him to co-found Yield Guild Games with Beryl Li in 2020 to help gamers thrive in the world of NFTs and blockchain gaming. How does Yield Guild Games work? Yield Guild Games combines Decentralized Finance (DeFi) and NFTs to create a metaverse economy on the Ethereum blockchain. The YGG DAO is an open-source protocol with rules enforced by smart contracts. It serves many different purposes, such as carrying out governance decisions voted by the community, issuing rewards, and facilitating NFT rentals. YGG is made up of multiple SubDAOs, which consist of groups of players from a specific NFT game or geographical location. Each SubDAO has its own set of rules to manage the activity and assets of the respective play-to-earn game. Read next: Binance Academy: Immutable X Token (IMX) - What Is It? IMX Explained. How To Buy IMX?| FXMAG.COM This model allows players of the same NFT game to work together to maximize their in-game profits. It also enables guild members to rent and use the community-owned NFT assets to earn in-game rewards. In return, those that lend their NFTs via the DAO can share a portion of the gamers’ earnings. On YGG, all NFTs and digital assets are stored within the YGG Treasury, which is controlled by the community. The treasure provides the NFTs to each SubDAO, and it includes P2E assets from multiple blockchain games. YGG Scholarships To maximize the value and utility of gaming NFTs, the YGG DAO uses an NFT rental program known as scholarships. The idea was initially introduced by the Axie Infinity community to benefit both NFT owners and play-to-earn gamers.  In Axie Infinity, Axie owners can lend their gaming assets to help new players get started in return for a percentage of their in-game rewards. The process is done through blockchain smart contracts in a way that scholars can only use the NFTs in-game. Only the manager (owner) can trade or transfer the NFTs. Similarly, YGG provides scholarships to new players under a revenue-sharing model, where they can get NFT assets to start playing and earn in-game rewards. The scholars don’t need to invest any money upfront, but they share a portion of their earnings with their managers. Apart from NFTs, new players will also receive training and guidance from community managers. YGG scholarships are not limited to NFTs in Axie Infinity. The YGG Treasury also owns virtual lands in The Sandbox and League of Kingdoms, virtual cars in F1 Delta Time, among other play-to-earn games.  SubDAOs As mentioned, the YGG DAO is primarily composed of SubDAOs. You can think of SubDAOs as localized communities within the main YGG DAO. These local communities consist of players from a specific P2E game or location. For example, there is a SubDAO dedicated to Axie Infinity players, a SubDAO for The Sandbox players, another SubDAO for Southeast Asian players, and so on. By grouping players into different SubDAOs, they can discuss gaming strategies and help each other maximize performance. Read next: (APE) ApeCoin - What Is It? BAYC, MAYC And BAKC Explained| FXMAG.COM Each SubDAO manages its respective game’s activities and assets under its own set of rules and conditions, but they still contribute earnings to the YGG DAO. In a SubDAO, there is a community lead, a wallet, and a SubDAO token. Token holders can share the yields generated from the gameplay based on their contributions. They also get to make suggestions and vote on governance decisions related to the SubDAO, such as whether to purchase more in-game NFTs, or how to manage their assets. What is the YGG token? Yield Guild Games (YGG) is an ERC-20 token that gives holders the right to participate in the governance of the YGG DAO. It has a total supply of 1 billion tokens, and 25 million YGG was sold via an Initial DEX Offering (IDO) on SushiSwap in 2021. To support the community, YGG has set aside 45% of the total supply to be distributed to users gradually over four years.  As the platform’s native token, YGG is used to pay for services on the network. It can also be staked to earn rewards in the YGG vaults or used to unlock exclusive content on the YGG Discord channel. In addition, YGG holders can submit proposals and vote on decisions regarding the guild’s technology, products, projects, token distribution, and overall governance structure. The winning suggestions that eventually get implemented on the DAO will be rewarded YGG tokens. YGG Vault The YGG DAO adopts a different approach to yield farming than most DeFi staking platforms. Typically, tokens are staked to earn fixed-rate interest. On YGG, each vault represents a token reward program for a specific activity that YGG operates. For example, one vault may provide yields based on the performance of a scholarship program, while another vault rewards stakers based on the Axie breeding program. YGG also plans to develop an all-in-one super index vault that represents all yield-generating activities in its ecosystem. This vault will reward stakers based on the guild’s revenue from subscriptions, merchandise, rentals, treasury growth, and SubDAO index performance. Token holders can stake for the activity they support, and rewards will be distributed proportionally to the amount of YGG they stake via smart contracts. Depending on how the vault is programmed, rewards might also include YGG tokens, Ether (ETH), or stablecoins.  How to buy YGG on Binance? You can buy Yield Guild Games (YGG) on cryptocurrency exchanges like Binance.  Log in to your Binance account and click [Trade]. Select either the classic or advanced trading mode to start. Click on [BTC/USDT] to open the search bar and type “YGG” to see the available trading pairs. We will use YGG/BUSD as an example. Go to the [Spot] box on the right and enter the amount of YGG to buy. In this example, we will use a Market order. Click [Buy YGG] to confirm your order, and the purchased YGG will be credited to your Spot Wallet.   Closing thoughts Through a unique revenue-sharing model, YGG is building a decentralized community in the real world. It offers participants an opportunity to thrive in these virtual worlds through an innovative gaming economy. As metaverse projects are on the rise, NFT guilds like Yield Guild Games could benefit from the influx of newcomers and crypto enthusiasts looking to explore play-to-earn NFT games for an alternative source of income.
Binance Academy: Meme Coins - What Are They? Dogelon Mars (ELON), Dogecoin (DOGE), Shiba Inu (SHIB), SafeMoon (SAFEMOON), Kishu Inu (KISHU) And AKITA

Binance Academy: Meme Coins - What Are They? Dogelon Mars (ELON), Dogecoin (DOGE), Shiba Inu (SHIB), SafeMoon (SAFEMOON), Kishu Inu (KISHU) And AKITA

Binance Academy Binance Academy 22.04.2022 10:22
Disclaimer: This article is for educational purposes only. Binance has no relationship to these projects, and there is no endorsement for these projects. The information provided through Binance does not constitute advice or recommendation of investment or trading. Binance does not take responsibility for any of your investment decisions. Please seek professional advice before taking financial risks.   TL;DR In 2021, the meme coin market saw exponential growth, especially the dog-themed meme coins. As of November 2021, one of the most popular “breeds” is Dogecoin (DOGE) and its rival Shiba Inu (SHIB).  Meme coins are meme-inspired cryptocurrencies. They tend to be highly volatile compared to major cryptocurrencies like bitcoin (BTC) and ether (ETH). This is likely because meme coins are heavily community-driven tokens. Their prices are usually influenced by social media and online community sentiments. This often brings a lot of hype but also FOMO and financial risk. While it’s true that some traders became rich with meme coins, many lost money due to market volatility. Binance Academy: (APE) ApeCoin - What Is It? BAYC, MAYC And BAKC Explained| FXMAG.COM Introduction Some say 2021 was the year of “dogs” for crypto. The doggy duo Dogecoin (DOGE) and Shiba Inu (SHIB) led the meme coin pack and skyrocketed in price and market capitalization. As of November 2021, DOGE has gained over 8,000% since the beginning of the year and is ranking #9 by market capitalization on CoinMarketCap. Its competitor, SHIB, has pumped more than 60,000,000% since January. Learn more on Binance.com What are meme coins? Meme coins are cryptocurrencies inspired by memes or jokes on the Internet and social media. The first meme coin created was Dogecoin (DOGE). Launched in 2013 as a parody, DOGE was inspired by the popular Doge meme of a Japanese Shiba Inu dog. Meme coins tend to be highly volatile. They are mainly community-driven and can gain popularity overnight due to online community endorsements and FOMO. Still, their price can also slump unexpectedly when traders turn their attention to the next meme coin. Another characteristic of meme coins is that they often have a huge or unlimited supply. For example, Shiba Inu (SHIB) has a total supply of 1 quadrillion tokens, while DOGE has no maximum supply, and over 100 billion tokens are already in circulation. As meme tokens generally do not have a coin-burning mechanism, the huge supply explains their relatively low prices. With just $1 USD, you can buy millions of meme tokens. Why are meme coins so popular? While it’s hard to define specific reasons, some say that during the COVID-19 pandemic, the crypto market grew as retail investors wanted to hedge against inflation. Meme coins also boomed amidst the hype, growing both in market capitalization and variety. Read next: Binance Academy: Immutable X Token (IMX) - What Is It? IMX Explained. How To Buy IMX?| FXMAG.COM It all started after the “meme stock” saga of GameStop (GME) and AMC Entertainment (AMC) in late 2020, where the Reddit community pumped up the prices of these shares to as much as 100 times in a few months. In January 2021, a Reddit group joked about pumping up the price of DOGE to create a crypto equivalent of GME. The trend caught on, and along with the influence of Tesla CEO Elon Musk’s tweets, DOGE price rallied. Dogecoin reached a new all-time high of $0.73 USD, with an increase of over 2,000% in five days. In May 2021, Elon Musk joked about DOGE publicly on TV, and many say it was the cause of the following price drop However, in May 2021, Elon Musk joked about DOGE publicly on TV, and many say it was the cause of the following price drop. Several traders then turned to other meme coins on the market, such as the “Dogecoin killer” SHIB. At the same time, retail investors were FOMOing into meme coins hoping to become millionaires overnight, sparking yet another meme coin rally. Another reason why retail investors find meme coins attractive is that they typically only cost a few cents or even a fraction of a cent. Technically, the low price doesn’t mean much because these coins have huge supplies. Still, holding millions of a certain meme coin feels different than holding a fraction of ETH or BTC. Traders can get thousands or even millions of DOGE, SHIB, or Akita Inu (AKITA) tokens with just a few dollars. Binance Academy: Polkadot (DOT) Explained - A Pinch Of Origins And History| FXMAG.COM Apart from the potential profits, the meme coin frenzy is also driven by their respective community sentiments. As mentioned, meme coins are inspired by popular Internet memes, intended to be fun and sometimes considered an “insider joke” for a community. Buying meme coins, in a way, is showing support for their respective community. Following the GME stock market saga, meme coin traders inspired by the Reddit group SatoshiStreetBets started a “David vs. Goliath” battle to bet against the mainstream cryptocurrencies. The crypto market in 2021 was therefore flooded with community-driven meme coins. Potential risks of investing in meme coins Meme coins might have seen exponential growth in 2021, but like all cryptocurrencies, trading and investing in meme coins carries high financial risk. First of all, the tokenomics of meme coins can be concerning. Take Bitcoin as an example. It has its blockchain, a well-written whitepaper, an established ecosystem, and a deflationary nature. We are seeing more institutional adoption of bitcoin in recent years as well. Compared to BTC, most meme coins are inflationary with no maximum supply. Their ecosystem, use cases, and fundamentals are often defined by the collective jokes of the community. Only a few meme coins were built on the technology of major cryptocurrencies. For example, DOGE’s technology was derived from Litecoin (LTC), and SHIB was built on the Ethereum blockchain.  As the meme coin market continues to grow, you should be aware that there might be projects taking advantage of the hype to scam traders Another potential risk is that meme coins are heavily community-driven and are more speculative than the larger market capitalization cryptocurrencies. This volatility constantly leads to unexpected pump and dump. The lifecycle of meme coins is generally short-lived. Their prices can rocket thousands of times from celebrity shilling or FOMO, or crash unexpectedly when the community decides to move on to the next meme coin. As the meme coin market continues to grow, you should be aware that there might be projects taking advantage of the hype to scam traders. For example, Squid Game (SQUID), a meme coin inspired by the popular Netflix show of the same name, surged over 86,000% in a week. However, the development team rug-pulled suddenly and caused the price to plummet by 99%. What’s worse is that holders were not allowed to sell their SQUID tokens. Therefore, you should always be careful and DYOR before trading or investing in meme coins. An overview of the popular meme coins Leading the meme coin market with the highest market capitalization are Dogecoin (DOGE) and Shiba Inu (SHIB). After the success of DOGE and SHIB, a large number of dog-themed meme coins entered the market and gained traction within the second half of 2021. Dogecoin (DOGE) Dogecoin (DOGE) was created in 2013 by software engineers Billy Markus and Jackson Palmer. It was inspired by the meme of a Shiba Inu dog and was intended to be a joke cryptocurrency to attract mainstream attention. As a fork of Litecoin (LTC), DOGE adopts the same Proof of Work (POW) mechanism, and it has no maximum supply. For a more comprehensive overview of DOGE, check out What Is Dogecoin?. Shiba Inu (SHIB) Shiba Inus (SHIB) is the rival of DOGE and is often referred to as the “Dogecoin killer”. SHIB is also named after a Japanese dog breed. It was created by an anonymous developer named Ryoshi in August 2020. The main difference between DOGE and SHIB is that the latter has a limited supply of 1 quadrillion tokens, of which 50% were burnt and donated to charity. SHIB’s ecosystem also includes a decentralized exchange, an NFT art incubator, NFTs, and an NFT game. To learn more about SHIB and its ecosystem, check out What Is Shiba Inu (SHIB)?. Dogelon Mars (ELON) Dogelon Mars (ELON) closely follows the doggy duo in terms of popularity. As the name suggests, ELON is named after Tesla CEO Elon Musk and his passion for his company SpaceX. ELON is a fork of Dogecoin and has a circulating supply of 557 trillion tokens. As of November 2021, ELON has surged over 3,780% since its launch in April 2021. Akita Inu (AKITA) There are many other meme coins using Japanese dog breeds as their mascots, such as Akita Inu (AKITA), Kishu Inu (KISHU), and Floki Inu (FLOKI). AKITA was heavily inspired by DOGE. It was launched on Uniswap as an ERC-20 token in February 2021. Its tokenomics is very similar to SHIB. Like SHIB’s developer Ryoshi, the AKITA team locked 50% of its total supply on Uniswap, while the remaining 50% was sent to Ethereum co-founder Vitalik Buterin. However, AKITA only has a total supply of 100 trillion tokens, which is 1/10 of the total supply of SHIB. AKITA gained traction alongside its fellow doggy coins in May 2021 and is seen by some community members as another “Dogecoin killer”. Samoyedcoin (SAMO) Samoyedcoin (SAMO) is a dog meme coin project built on the Solana blockchain. At launch, 13% of SAMO supply was airdropped to members of the community. According to their website, SAMO roadmap includes burning events, airdrop tools, a decentralized exchange (DEX), and the creation of NFTs. Samoyedcoin recently gained popularity due to a sudden increase in price. SAMO grew over 4,300% within a month. In October 2021, the price went from $0.005 to over $0.22 in roughly 30 days. Read next: Solana (SOL) - Let's Have A Look At This Altcoin| FXMAG.COM Kishu Inu (KISHU) Kishu Inu (KISHU), another canine-themed meme coin, has grown exponentially since it launched in April 2021. KISHU includes participation rewards for active users, non-fungible tokens (NFTs), and a DEX called Kishu Swap. It has been growing in popularity and recorded over 100,000 holders and 2 billion dollars market capitalization within one month after its launch. SafeMoon (SAFEMOON) Another meme coin newcomer that capitalized on the rally was SafeMoon (SAFEMOON). It is a BEP-20 token launched on the Binance Smart Chain (BSC) in March 2021. SAFEMOON rewards long-term holders by penalizing those who sell the token with a 10% exit fee, of which half of the fees will be distributed to existing SAFEMOON holders, and the other half will be burnt. It attracted retail investors’ attention after it soared in April. As of November 2021, SAFEMOON has a 9418.54% ROI, according to CoinMarketCap. How to buy meme coins on Binance? You can buy the more popular meme coins, such as DOGE and SHIB, on cryptocurrency exchanges like Binance. For other less prominent meme coins, you can go to decentralized exchanges.  Let’s take DOGE as an example. 1. Log in to your Binance account. Then, head to [Trade] at the top bar to select the classic or advanced trading page. 2. On the right side of the screen, type “DOGE” on the search bar to see a list of the available trading pairs. We will use DOGE/BUSD as an example. Click “DOGE/BUSD” to open its trading page.   3. Scroll down to the [Spot] box and enter the amount of DOGE to purchase. You can select different order types to buy DOGE. We will use a Market order in this example. Click [Buy DOGE] to confirm the order, and you will see the DOGE you purchased in the Spot Wallet.   Closing thoughts With new meme coins entering the market every day and traders hoping to replicate the profits posted by DOGE and SHIB, it is important to DYOR before committing to any meme coins. Keep in mind that meme coins are highly volatile compared to other digital currencies. Trading or investing in cryptocurrencies involves high risk. Meme coins are largely community-driven and might crash unexpectedly, so you should never invest what you cannot afford to lose. Read next: Litecoin (LTC) Explained - The Way It Works, Terms Associated With LTC| FXMAG.COM
Binance Academy: Immutable X Token (IMX) - What Is It? IMX Explained. How To Buy IMX?

Binance Academy: Immutable X Token (IMX) - What Is It? IMX Explained. How To Buy IMX?

Binance Academy Binance Academy 19.04.2022 12:53
TL;DR Immutable X is a layer-2 scaling solution for NFTs on Ethereum. It offers instant trade confirmation and near-zero gas fees for minting and trading NFTs. Users can easily create and trade NFTs without compromising the security of their assets. Immutable X uses an engine called Zero-Knowledge Rollup to achieve scalability. It can facilitate up to 9,000 transactions per second. Immutable X’s shared global NFT order book can efficiently enhance NFT liquidity and increase their trading volume. NFTs can be bought and sold on any marketplaces built on Immutable X. IMX is an ERC-20 utility and governance token. It’s used to pay for transaction fees and incentivize users and developers on Immutable X. Token holders can earn rewards through staking and participating in the platform's governance. Learn more on Binance.com Introduction Trading and minting NFTs on Ethereum can be expensive, especially during times of high traffic. Users need to pay higher gas fees to have their transactions confirmed quickly. It’s also common for minting transactions to fail, causing significant losses. Article By Binance: (APE) ApeCoin - What Is It? BAYC, MAYC And BAKC Explained| FXMAG.COM What is Immutable X? Immutable X is a layer-2 scaling solution for non-fungible tokens (NFTs) on Ethereum. It aims to improve Ethereum’s scalability and user experience. Immutable X was founded in 2018 by James Ferguson, Robbie Ferguson, and Alex Connolly. It offers instant transaction confirmation and near-zero gas fees for minting and trading NFTs. Users can easily create and trade ERC-721 and ERC-20 tokens at lower costs without compromising the security of their assets. How does it work? At the core of Immutable X is a scaling technology called Zero-Knowledge Rollup (ZK-Rollup), which is a layer-2 protocol for validating transactions on the Ethereum blockchain. Instead of adding every transaction data to the blockchain, ZK-Rollup batches hundreds of transactions into a single zero-knowledge proof known as the zk-STARK proof. Zk-STARK stands for zero-knowledge succinct transparent arguments of knowledge. It’s a verification method used to prove possession of certain knowledge without revealing any information about it. It can provide Immutable X transactions with increased levels of privacy and security.  After batching the transactions, the proof is submitted to the blockchain and verified by a smart contract. The ZK-Rollup smart contract maintains all transaction details on layer 2, so that the proof can be quickly verified as they don’t contain the complete data of every transaction. The computing and storage resources required for validating a block will be lower too. This is how Immutable X can facilitate up to 9,000 transactions per second (TPS) with significantly reduced gas fees. For the end-users, Immutable X transactions have zero gas fees. Another unique feature of Immutable X is a set of powerful REST APIs that can simplify complex blockchain interactions NFTs users trade or mint on Immutable X are 100% carbon-neutral. For example, minting 8 million NFT trading cards for the play-to-earn game Gods Unchained would consume approximately 490 million kWh (490 MWh) on Ethereum. With ZK-Rollup compressing the data required for minting, Immutable X only used 1,030 kWh to mint the same amount of NFTs, which is 475,000 times less energy consumption. The minuscule energy consumption remaining is offset with carbon credits. Article By Binance: Altcoins: Harmony (ONE) - A Blockchain Project Explained| FXMAG.COM Another unique feature of Immutable X is a set of powerful REST APIs that can simplify complex blockchain interactions. Users can create and transfer NFTs easily via API calls without having to interact directly with smart contracts. Combined with Immutable X’s simple software development kits (SDKs), developers can integrate the APIs and Wallet to their platforms easily. This will allow them to build NFT projects, such as play-to-earn games, in just a few hours rather than weeks.  To facilitate a third-party NFT marketplace ecosystem, Immutable X provides a global order book that allows NFTs to be bought and sold on any marketplace that implements their scaling solutions. This means that orders created in one marketplace can be filled in another, effectively increasing the trading volume and liquidity of NFTs. Immutable X also supports all desktop Ethereum wallets. Users can seamlessly trade NFTs on different NFT-enabled crypto wallets without moving their assets across networks. What is IMX? IMX is the native token of Immutable X. It’s an ERC-20 utility and governance token with a 2 billion total supply. IMX is used to pay for transaction fees and incentivize users and developers on Immutable X. They can earn IMX tokens by contributing to the platform’s growth, such as trading NFTs and building applications.  As a utility token, IMX allows token holders to earn rewards through staking in reward pools. They can also participate in the governance of Immutable X by submitting and voting on community proposals. The more IMX coins they hold, the greater their voting power.  Read next: (UKOIL) Brent Crude Oil Spikes to Highest Price For April, (NGAS) Natural Gas Hitting Pre-2008 Prices, Cotton Planting Has Begun How to buy IMX on Binance? You can buy Immutable X (IMX) on cryptocurrency exchanges like Binance.  1. Log in to your Binance account and click [Trade]. Select either the classic or advanced trading mode to start. 2. Search “IMX” to see the available trading pairs. We will use IMX/BUSD as an example. 3. Go to the [Spot] box and enter the amount of IMX you want to buy. In this example, we will use a Market order. Click [Buy IMX] to confirm, and the purchased IMX will be credited to your Spot Wallet.     Closing thoughts Immutable X leverages layer-2 scaling technology to bridge the gaps in trading NFTs on Ethereum. It creates a platform for NFT businesses to grow, including play-to-earn games and marketplaces.
Apecoin (APE) Makes Five Attempts at Breaking out From Descending Resistance Line | BeInCrypto

(APE) ApeCoin - What Is It? BAYC, MAYC And BAKC Explained

Binance Academy Binance Academy 04.04.2022 11:49
Use Cases NFT Altcoin TL;DR ApeCoin (APE) is an ERC-20 utility and governance token of the APE ecosystem. It empowers the decentralized APE community building at the forefront of Web 3.0. APE is governed by the ApeCoin DAO and supported by the APE Foundation. With APE, token holders can vote on governance proposals on the DAO and access exclusive features of the APE ecosystem, such as games, events, and services. Yuga Labs, the creator of the popular Bored Ape Yacht Club (BAYC) NFT collections, has also adopted APE as the primary token for all new products and services.    Introduction Since its launch in April 2021, Bored Ape Yacht Club (BAYC) has become one of the most popular NFT collections. BAYC is well-known for having a vibrant and active community of supporters.   Learn more on Binance.com What is ApeCoin (APE)? ApeCoin (APE) is the governance and utility token of the APE ecosystem. It is a decentralized protocol layer that supports the APE community building at the forefront of Web 3.0.  APE is an ERC-20 token with a total supply of 1 billion tokens. It is controlled and built on by the community. The ApeCoin DAO is a decentralized organization that allows all APE holders to vote on governance decisions related to the token.  In addition, APE is adopted by Yuga Labs as the primary token for all new products and services. Yuga Labs is the creator of the trending Bored Ape Yacht Club (BAYC) NFT collections. It also owns the IP of another two popular NFT projects, CryptoPunks and Meebits.   How does APE work? APE was founded to be used within the growing APE ecosystem. It is governed by the ApeCoin DAO and supported by the APE Foundation. ApeCoin DAO is a decentralized autonomous organization (DAO) for all APE token holders to participate in governance decisions. They can decide how to allocate the Ecosystem Fund, make governance rules, select projects, partnerships, etc. After the DAO members vote on the proposals, the APE Foundation will proceed to carry out the community-led governance decisions.  The APE Foundation is the legal steward of the DAO. It facilitates the growth and development of the APE ecosystem in a fair and inclusive way. At the Foundation, there is a special council called the Board. It is tasked with ensuring that the community's visions are implemented. The Board consists of 5 members from the tech and crypto community, including Reddit co-founder Alexis Ohanian. As a decentralized Board, the initial Board members will serve for 6 months before APE holders vote for new Board members on an annual basis.   What is the APE ecosystem? The APE ecosystem is made up of the community holders of ApeCoin, and all products & services utilizing APE. Yuga Labs is a web3 company best known for the creation of the Bored Ape Yacht Club. It will be a community member in the ApeCoin DAO and adopt APE as the primary token across new projects. Upon the launch of ApeCoin, holders of Bored Ape Yacht Club and Mutant Ape Yacht Club NFTs were entitled to collectively claim 15% of the ApeCoin supply (150 million tokens of the 1 billion total tokens in supply). Let’s look at the NFT collections that are related to the APE ecosystem.   Bored Ape Yacht Club (BAYC) Launched in April 2021, Bored Ape Yacht Club (BAYC) is the first NFT collection of the APE ecosystem. It features 10,000 unique Apes on the Ethereum blockchain. Each Ape has a unique look, style, and rarity.   Mutant Ape Yacht Club (MAYC) Mutant Ape Yacht Club (MAYC) is an NFT collection of up to 20,000 mutated versions of the original BAYC Apes. 10,000 mutant serums were airdropped to the original BAYC NFT holders, with three tiers of serums that added to the rarity of traits. With the different tiers of serum they received, BAYC holders could create different types of mutant Apes. Each BAYC can only generate a single mutant from a single serum type, and the serum disappears after use. The MAYC was also a means to welcome more new members to the APE community. This is why 10,000 mutant Apes were also minted for a public sale in August 2021 following the mutant serum airdrop.   Bored Ape Kennel Club (BAKC) Bored Ape Kennel Club (BAKC) is a collection of dog NFTs that were made available to every single member of the BAYC. For each Bored Ape NFT they own, holders could “adopt” a random Club Dog NFT for free, only paying a gas fee. Like the Apes, the 10,000 BAKC NFTs have various attributes and rarities.   What can APE tokens do? The ApeCoin token serves several purposes in the APE ecosystem. It allows holders to participate in the ApeCoin DAO as a governance token. APE holders can also access exclusive features of the APE ecosystem, including games, merch, events, and services. APE is also a tool for third-party developers to participate in the APE ecosystem. They can incorporate the token into their services, games, and other projects as incentives. For example, APE is adopted as incentives for players in Benji Bananas, a play-to-earn mobile game developed by Animoca Brands. Benji Bananas offers a Membership Pass (‘Benji Pass’), an NFT that will enable its owners to earn special tokens when playing Benji Bananas, and that will also allow those tokens to be swapped for ApeCoin.   How to buy APE on Binance? You can buy ApeCoin (APE) on cryptocurrency exchanges like Binance.  1. Log in to your Binance account and click [Trade]. Select either the classic or advanced trading mode to start. 2. Type “APE” on the search bar to see the available trading pairs. We will use APE/BUSD as an example. 3. Go to the [Spot] box and enter the amount of APE you want to buy. In this example, we will use a Market order. Click [Buy APE] to confirm your order, and the purchased APE will be credited to your Spot Wallet.       Closing thoughts With Yuga Labs adopting ApeCoin as the fundamental token, the community expects more utilities to be added to the token in the future. For example, a staking function for APE HODLers to earn passive income, more GameFi applications, or even collaborations with the other NFT IPs Yuga Labs owns.
4 Cryptocurrencies To Keep A Watch On: Elrond (EGLD), Geojam (JAM), Alpine F1 Team Fan Token (ALPINE), QTUM Token (QTUM)

Qtum (QTUM) What Is It? Another Blockchain Project Explained

Binance Academy Binance Academy 04.04.2022 11:38
Trading Blockchain Altcoin TL;DR Qtum is a blockchain network founded in 2016 that combines Ethereum's smart contract capabilities with Bitcoin's UTXO accounting system. It achieves this through a technology called Account Abstraction Layer, which gives Qtum the benefit of implementing updates from both Bitcoin and Ethereum. Qtum is decentralized, meaning there is no permission required to validate transactions. Anyone can run a node, needing only a device and internet connection. Qtum uses a Mutualized Proof of Stake consensus mechanism to disincentivize junk contract attacks. Rewards are split among multiple successful validators and partly delayed for 500 blocks.  Qtum has native support for token standards such as QRC-20, QRC-1155, and QRC-721. The QTUM cryptocurrency is the network's native token, used for transaction fees, staking (which can even be done offline), and governance. You can purchase QTUM on Binance with a credit or debit card or trade for it using other cryptocurrencies. Qtum is based in Singapore, with offices in Miami and Stockholm. Introduction We've moved a long way from Bitcoin when it comes to blockchain technology. Most new Layer 1 platforms use innovations far beyond the original Bitcoin model. Qtum, however, has taken desirable elements from Ethereum and Bitcoin. This combination makes it a particularly interesting project due to its unique architecture. So, if you've ever wondered what makes Qtum special, Academy is here to run you through its unique aspects together.     Learn more on Binance.com   What is Qtum? Qtum (pronounced Quantum) was founded in 2016 by Ashley Houston, Neil Mahl, and Patrick Dai. The project ran an ICO (Initial Coin Offering) in 2017, raising $15.6 million before launching its mainnet in September of that year. The Qtum network's primary concept is to combine aspects of Ethereum (ETH) and Bitcoin's (BTC) networks. The team has taken Bitcoin's unspent transaction output (UTXO) model and combined it with Ethereum's smart contract capabilities while leveraging the upstream benefits of both chains.   How does Qtum work? There are four significant aspects to the Qtum network: 1. A UTXO model for accounting. 2. A Solidity smart contract platform. 3. An Account Abstraction Layer. 4. A Proof of Stake consensus mechanism. To create this mix, Qtum has used a modified Bitcoin Core client software to complete the transaction base of their network. The network is also Ethereum Virtual Machine (EVM) compatible and uses Solidity as its coding language. This means you can easily port code and DeFi (Decentralized Finance) projects from Ethereum onto Qtum. Also, its custom Proof of Stake (PoS) consensus mechanism has been made to target critical security issues.   What is a UTXO? UTXOs are Unspent Transaction Outputs and a common concept in the cryptocurrency world. On some networks, cryptocurrency transactions are made of outputs and inputs. Sending 1 BTC, for example, requires you to use UTXOs as inputs to then "send" as an output. These UTXOs are then marked as spent, and the output becomes a new UTXO. Imagine you're sending 0.6 BTC. This actually will be made up of 0.4 BTC and 0.2 BTC outputs from previous transactions. However, if you only wanted to send 0.3 BTC, you would need to split the 0.4 BTC UTXO into 0.3 for your friend and 0.1 for yourself. This leaves 0.4 BTC entirely spent and two new UTXOs of 0.3 and 0.1. This system of accounting may seem odd, but it has its benefits: 1. It's easy to combat double-spending as you can see if an output is already spent. 2. A network can process transactions in parallel as every transaction contains independent outputs. Ethereum, on the other hand, uses an account transaction model similar to what you would find with a bank account. This particular model maintains a global state of all balances on the network.   What is the Account Abstraction Layer? Blockchains with smart contract capacity don't normally use the UTXO accounting system for technical reasons. Qtum's answer is to use an Account Abstraction Layer (AAL). As the name suggests, Ethereum's accounts system is abstracted from its technical implementation. With an accounts model, smart contracts work with an address or smart contract's end balance. However, with UTXO, a smart contract must decide which UTXOs to use, often across several public and private addresses. Internal transactions between contracts also provide a similar problem. A UTXO blockchain must record all transactions, making the process difficult. AAL works by using a UTXO transaction's output to create a smart contract. It then sends the transaction to the contract account to trigger the contract's execution. The AAL processes the results and adapts them to UTXO. The AAL technology allows Qtum to take advantage of both Ethereum and Bitcoin updates. For example, when non-fungible token support was added to Ethereum, Qtum had the ability to adopt it quickly. Notable Bitcoin updates were Segregated Witness (SegWit) and Taproot. Being UTXO-based also allows Qtum to benefit from the Lightning Network and other technologies.   What is Proof of Stake? Mutualized Proof of Stake is Qtum's custom consensus mechanism. The Qtum team designed it to combat junk contract spam attacks by increasing their cost. The mechanism shares block rewards between block-producing nodes and also delays the payment. Each reward is split equally between the successful validator and the previous nine successful validators. A portion of the rewards is also delayed for 500 blocks. This system makes it difficult for attackers to calculate the exact rewards from a potential attack.   What is offline staking? In August 2020, Qtum introduced a new offline staking mechanism for QTUM holders. Rather than give up custody of your QTUM tokens, you only need to provide your wallet address. Your coins stay in your wallet and can be spent or undelegated at any time. The consensus mechanism has two actors: Super Stakers (validators) and delegators. Delegators send their wallet address via a smart contract to a Super Staker. A fee is agreed on that the delegator will pay, and the Super Staker can decide to accept the delegation. The Super Staker can then stake the delegator's UTXOs. If a Super Staker successfully validates a block, they will share a reward with their delegators and charge a fee. Once delegated behind a Super Staker, you passively earn QTUM. You don't need to be locked into a smart contract, and you can work with an offline solution such as a hardware wallet. Super Stakers can then win block rewards for the delegates and charge a fee for staking. But after the delegation, the delegator's wallet does not need to be kept connected to the network. In other words, delegates receive rewards in passive mode.   What is QTUM? QTUM is Qtum's native cryptocurrency, which is distributed to users via the network’s consensus mechanism. You can use the QTUM coin to: 1. Pay transaction fees on the network. QTUM uses an Ethereum-like model for calculating gas fees. 2. Participate in Qtum's on-chain governance protocol by voting on proposals. These could include changing the block size or network fees. During times of high usage, the cost of gas can be lowered, and the block size increased to handle layer 1 transactions up to 1,100 TPS. If required, a layer 2 solution like Lightning Network can be used to increase this throughput. 3. Stake as either a delegator or Super Staker to validate blocks. Each new block provides rewards to delegators and Super Stakers. Qtum halves the rewards periodically using a method similar to Bitcoin’s halving. This mechanism will ultimately create a finite QTUM supply which will take decades to achieve. At this point, stakers will be rewarded with transaction fees only.   Where can I buy QTUM? Binance offers two ways to purchase QTUM. First of all, you can buy QTUM with a credit or debit card in selected fiat currencies. Visit Binance's [Buy Crypto with Debit/Credit Card] page, choose the currency you want to pay in, and select QTUM in the lower field. Click [Continue] to confirm your purchase's detail and follow the further instructions.     You can also trade a selection of cryptocurrencies for QTUM, including BUSD, BTC, and ETH. Navigate to Binance's Exchange view and type QTUM in the trading pair search field. This will display all the available trading pairs. For more information on using the Exchange view, visit our How to Use TradingView on the Binance Website guide.       Conclusion As a solution, the Qtum blockchain is quite unique. It removes the problems seen with Proof of Work (PoW) by implementing a PoS system with upgrades. It allows for smart contracts and Decentralized Applications (DApps) while also using UTXO accounting. While many blockchain platforms in the ecosystem develop brand new methods, Qtum has taken successful functionality from previous ones. So, if you've been considering Qtum as an altcoin, you now can make a more informed decision based on its use cases.
The Trade Off - 31/03/22

Technical Analysis - Hammer Candle Stick Patterns

Binance Academy Binance Academy 29.03.2022 11:44
TL;DR Hammer candlestick patterns are one of the most used patterns in technical analysis. Not only in crypto but also in stocks, indices, bonds, and forex trading. Hammer candles can help price action traders spot potential reversals after bullish or bearish trends. Depending on the context and timeframe, these candle patterns may suggest a bullish reversal at the end of a downtrend or a bearish reversal after an uptrend. Combined with other technical indicators, hammer candles may give traders good entry points for long and short positions. The bullish hammer candles include the hammer and inverted hammer, which appear after a downtrend. The bearish variations of hammer candles include the hanging man and the shooting star, which occur after an uptrend.   Introduction  The hammer candlestick is a pattern that works well with various financial markets. It is one of the most popular candlestick patterns traders use to gauge the probability of outcomes when looking at price movement. Combined with other trading methods such as fundamental analysis and other market analysis tools, the hammer candlestick pattern may provide insights into trading opportunities. This article will take you through what hammer candlestick patterns are and how to read them.   Learn more on Binance.com  How do candlesticks work? In a candlestick chart, every candle relates to one period, according to the timeframe you select. If you look at a daily chart, every candle represents one day of trading activity. If you look at a 4-hour chart, every candle represents 4 hours of trading. Each candlestick has an open price and close price that form the candle body. They also have a wick (or shadow), which indicates the highest and lowest prices within that period. If you’re new to candlestick charts, we recommend reading our Beginner’s Guide to Candlestick Charts first.   What is a hammer candlestick pattern? A hammer candlestick is formed when a candle shows a small body along with a long lower wick. The wick (or shadow) should have at least twice the size of the candle body. The long lower shadow indicates that sellers pushed the price down before buyers pushed it back up above the open price. Below you can see the opening price (1), the closing price (2), and the highs and lows that form the wick or shadow (3).     Bullish hammers Hammer candlestick pattern A bullish candlestick hammer is formed when the closing price is above the opening price, suggesting that buyers had control over the market before the end of that trading period.     Inverted hammer candlestick pattern An inverted hammer is formed when the opening price is below the closing price. The long wick above the body suggests there was buying pressure trying to push the price higher, but it was eventually dragged back down before the candle closed. While not as bullish as the regular hammer candle, the inverted hammer is also a bullish reversal pattern that appears after a downtrend.     Bearish hammers Hanging man candlestick The bearish hammer candlestick is known as a hanging man. It occurs when the opening price is above the closing price, resulting in a red candle. The wick on a bearish hammer indicates that the market experienced selling pressure, which suggests a potential reversal to the downside.     Shooting star candlestick The bearish inverted hammer is called a shooting star candlestick. It looks just like a regular inverted hammer, but it indicates a potential bearish reversal rather than a bullish one. In other words, shooting stars candlesticks are like inverted hammers that occur after an uptrend. They are formed when the opening price is above the closing price, and the wick suggests that the upward market movement might be coming to an end.     How to use hammer candlestick patterns to spot potential trend reversals Bullish hammer candles appear during bearish trends and indicate a potential price reversal, marking the bottom of a downtrend. In the example below, we have a bullish hammer candlestick (image from TradingView).     A bearish hammer candlestick can be either a hanging man or a shooting star. These appear after bullish trends and indicate a potential reversal to the downside. In the example below, we have a shooting star (image from TradingView).   As such, to use hammer candlesticks in trading, you need to consider their position in relation to previous and next candles. The reversal pattern will either be discarded or confirmed depending on the context. Let’s take a look at each type of hammer.   The strengths and weaknesses of the hammer candlestick patterns Every candlestick pattern has its pros and cons. After all, no technical analysis tool or indicator can guarantee a 100% profit in any financial market. The hammer candlestick chart patterns tend to work better when combined with other trading strategies, such as moving averages, trendlines, RSI, MACD, and Fibonacci. Strengths The hammer candlestick pattern can be used to spot trend reversals in any financial market. Traders can use hammer patterns in multiple timeframes, making them useful in both swing trading and day trading. Weakness Hammer candlestick patterns depend on the context. There is no guarantee that the trend reversals will occur. Hammer candlestick patterns are not very reliable by themselves. Traders should always combine them with other strategies and tools to increase the chance of success.   Hammer candlestick vs Doji: what’s the difference Dojis are like hammers without a body. A Doji candlestick opens and closes at the same price. While a hammer candlestick indicates a potential price reversal, a Doji usually suggests consolidation, continuation or market indecision. Doji candles are often neutral patterns, but they can precede bullish or bearish trends in some situations. The Dragonfly Doji looks like a hammer or hanging man without the body.      The Gravestone Doji is similar to an inverted hammer or a shooting star.   Still, hammers and Dojis don’t say much on their own. You should always consider the context, such as the market trend, surrounding candles, trading volume, and other metrics.     Closing thoughts Although the hammer candlestick pattern is a useful tool that helps traders spot potential trend reversals, these patterns alone aren't necessarily a buy or sell signal. Similar to other trading strategies, hammer candles are more useful when combined with other analysis tools and technical indicators. You should also make use of proper risk management, evaluating the reward ratio of your trades. You should also use stop-loss orders to avoid big losses in moments of high volatility.
Unveiling the Hidden Giant: The Growing Dominance of Non-Bank Financial Institutions

How Does GameFi Work And What Is It? GameFi Explanation

Binance Academy Binance Academy 28.03.2022 11:47
TL;DR GameFi refers to play-to-earn blockchain games that offer economic incentives to players. Typically, players can earn cryptocurrency and NFT rewards by completing tasks, battling other players, and progressing through the different game levels. Unlike traditional video games, most blockchain games let players transfer the gaming items out of the game’s virtual world. This allows players to trade their items on NFT marketplaces and their crypto earnings on crypto exchanges.   Introduction GameFi has been rapidly taking over the traditional gaming industry since the rise of Axie Infinity. It attracts gamers by offering them an opportunity to make money while having fun. What is GameFi, and how is it different from the video games we’re familiar with?   Learn more on Binance.com   What is GameFi? GameFi is a fusion of the words game and finance. It refers to play-to-earn blockchain games that offer economic incentives to players. The GameFi ecosystem uses cryptocurrencies, non-fungible tokens (NFTs), and blockchain technology to create a virtual gaming environment. Typically, players can earn in-game rewards by completing tasks, battling other players, and progressing through the different game levels. They can also transfer their assets outside of the game to trade on crypto exchanges and NFT marketplaces.   How does GameFi work? In GameFi, the reward can come in different forms, such as cryptocurrencies or in-game assets like virtual land, avatars, weapons, and costumes. Each GameFi project will adopt a different model and game economy. In most cases, the in-game assets are NFTs running on the blockchain, meaning they can be traded on NFT marketplaces. In other cases, however, the in-game assets need to be converted into an NFT before players can trade or sell them. Typically, the in-game assets will provide certain benefits to the players, allowing them to make more rewards. But, some games also feature avatars and cosmetics that are purely visual and have no impact on the gameplay and earnings. Depending on the game, players can earn rewards by completing tasks, battling with other players, or building monetized structures on their plot of land. Some games also let players generate passive income without playing the game, either through staking or by lending their gaming assets to other players. Let’s take a look at some of the common features in GameFi.   Play-to-earn model (P2E) At the core of GameFi projects, we have play-to-earn (P2E) as a revolutionary gaming mode. It’s quite different from the pay-to-play model adopted by traditional video games. Pay-to-play requires gamers to invest before they can start playing. For example, video games like Call of Duty need players to purchase licenses or recurring subscriptions. In most cases, traditional video games won’t generate any financial returns to players, and their in-game assets are controlled and held by the gaming company. In contrast, P2E games can give players full control over their in-game assets while also offering opportunities for them to make money. However, keep in mind that it all depends on the model and game design adopted by the GameFi projects. Blockchain technology can (and should) give players full control over their in-game assets, but that’s not always the case. Make sure you understand how the game works and who is behind the project before getting into a P2E game. Another thing to note is that P2E games can be free-to-play and still generate financial rewards to players, but some GameFi projects require you to purchase NFTs or cryptoassets before you can play. As such, it’s always important to DYOR and evaluate the risks. If a P2E game requires a big investment to start and the rewards are small, you are more likely to lose your initial investment. One of the most popular play-to-earn games is Axie Infinity. It’s an Ethereum-based NFT game that has been growing in popularity since 2018. Gamers can use their NFT pets (Axies) to earn SLP tokens by completing daily quests and battling other players.  They can also get AXS rewards if they manage to achieve a certain PvP rank. In addition, AXS and SLP can be used to breed new Axies, which can be used in-game or traded in their official NFT marketplace. Apart from buying and selling Axies, players can lend their Axies to other players, which gives owners an opportunity to earn without playing the game. This lending model is known as scholarship. It allows scholars to use the borrowed Axies to play and earn rewards.  In other words, Axie owners can make a passive income while scholars can play the game without making any investment. The earned rewards are then split between scholars and Axies owners.   Digital asset ownership As we’ve discussed, blockchain technology allows for digital asset ownership, meaning that players can monetize their in-game assets in many different ways. Similar to video games, players can own avatars, pets, houses, weapons, tools, and much more. But in GameFi, these assets can be issued or created as NFTs in the blockchain (also known as NFT minting). This allows players to have full control over their assets, with authenticity and verifiable ownership. Some popular metaverse games, such as Decentraland and The Sandbox, focus on the concept of land ownership. They allow players to monetize their virtual land. In The Sandbox, gamers can purchase digital pieces of real estate and develop them to generate revenue. For instance, they can charge other players visiting their land, earn token rewards by hosting content and events, or rent their customized land to other players.   DeFi applications Some GameFi projects also offer DeFi products and features, such as staking, liquidity mining, and yield farming. Typically, players can stake their in-game tokens to earn rewards, unlock exclusive items, or access new gaming levels. Introducing DeFi elements can also make crypto gaming more decentralized. Unlike traditional game studios that centralized control over their game updates, some GameFi projects allow the community to participate in their decision-making process. They can propose and vote for future updates via decentralized autonomous organizations (DAOs). For example, Decentraland players can vote on in-game and organizational policies by locking their governance tokens (MANA) in the DAO. The more tokens they lock, the higher their voting power. This allows gamers to communicate directly with game developers and influence the development of the game.   Are video games considered GameFi?  Traditional video game players can also earn in-game currency and collect digital assets to upgrade their characters. Still, these tokens and items can’t (or aren’t supposed to) be traded outside of the game. In most cases, they don’t even carry any value beyond the scope of the game. Even when they do, players are often prohibited from monetizing or trading their assets in the real world. In blockchain games, the in-game tokens and assets are usually cryptocurrencies and NFTs. There are some blockchain games that use virtual tokens rather than crypto or NFTs, but players should still be able to convert their in-game assets into NFTs if they wish. This means that gamers can transfer their earnings to crypto wallets and trade their assets on crypto exchanges or NFT marketplaces. They can then convert their crypto profits into fiat money too.   How to get started with GameFi games? There are thousands of blockchain games in the market, and they each work differently. Be careful with scam projects and fake websites. Connecting your wallet or downloading games from random websites can be dangerous. Ideally, you should create a new crypto wallet specifically for this purpose and only use funds you can afford to lose. If you are confident the game you found is safe, follow these steps to get started.   1. Create a crypto wallet To access the GameFi world, you need a compatible cryptocurrency wallet, such as Trust Wallet or MetaMask. Depending on the game you’re playing, you might need to use different wallets or connect to different blockchain networks. For example, if you want to play blockchain games on the BNB Smart Chain (former Binance Smart Chain), you will need to connect your MetaMask to the BSC network first. You can also use Trust Wallet or any other supported crypto wallet. Check the game’s official website to find out the ones they support. You can also connect your crypto wallet to the Ethereum blockchain and access most games running on the Ethereum network. Still, some games like Axie Infinity and Gods Unchained will build their own wallet to reduce costs and improve performance. Axie Infinity is built on Ethereum, but their team developed the Ronin network as a sidechain. As such, you need to use the official Ronin Wallet to interact with the Axie Infinity ecosystem. As a sidechain, the Ronin network makes it much cheaper to trade and breed Axies, reducing the costs of playing.   2. Connect your wallet to the game To play a blockchain game, you will need to connect your wallet. Make sure you are connecting to their official website and not a fake copy. Head over to the game’s website and look for the option to connect your crypto wallet. Unlike traditional online games that require you to set up a username and password, most blockchain games use your crypto wallet as a gaming account, so you will likely be asked to sign a message on your wallet before you can connect to the game.   3. Check the requirements to play  Most GameFi projects will require you to purchase their cryptocurrency token or in-game NFTs to get started. The requirements vary from game to game, but you should always consider the earning potential and overall risks. Make sure to estimate how long it might take to get your initial investment back and start making profits. If you want to play Axie Infinity, you need 3 Axies in your game wallet. You can purchase them from the Axie Marketplace. To purchase Axies, you need wrapped ETH (WETH) in your Ronin Wallet. You can buy ETH from crypto exchanges like Binance and use the Ronin bridge to transfer them to your Ronin Wallet. For more information, please check out How to Use the Ronin Wallet? If you don't have any money or don't want to take risks, consider looking for a scholarship program. They allow you to borrow NFTs to play, but you will have to share your earnings with the NFT owners.   The future of GameFi The number of GameFi projects has boomed in 2021 and will likely continue to grow in the coming years. As of March 2022, there are more than 1,400 blockchain games listed in DappRadar. We now have popular games across multiple blockchains, such as Ethereum, BNB Smart Chain (BSC), Polygon, Harmony, Solana, and many more. As blockchain technology continues to develop, the GameFi growing trend is expected to continue at a fast pace. The ability to own in-game assets and make money from games makes GameFi very attractive, especially in developing countries.     Closing thoughts Since the early days of Bitcoin, we have had people trying their luck with simple browser games, hoping to make BTC profits. While BTC games are still around, the rise of Ethereum and smart contracts certainly changed the blockchain gaming world, which is now able to offer much more elaborate and interesting experiences. It’s easy to see how GameFi attracts gamers by combining entertainment with financial incentives. With the growing popularity of blockchain games, we will most likely see an increasing number of big companies building up the metaverse.
Binance Academy summarise year 2022 featuring The Merge, FTX and more

Polkastarter (POLS) Explained - What Is It?

Binance Academy Binance Academy 22.03.2022 10:36
TL;DR Polkastarter is a decentralized fundraising platform that allows blockchain teams and companies to fund and launch their projects. It empowers projects to create multi-chain token pools while raising funds and growing their communities. POLS is the platform’s utility and governance token. To participate in an IDO on Polkastarter, users need to hold or stake POLS to boost their POLS Power.   Introduction IDO (Initial DEX Offering) is a popular crowdfunding method in the blockchain space. Among the various IDO platforms, Polkastarter is gaining popularity for its scalability and interoperability. By choosing Polkastarter, blockchain projects can increase their exposure, grow their communities, and tap into a pool of advisers and partners.     What is Polkastarter? Polkastarter is an IDO launchpad for decentralized and multi-chain token pools. It allows crypto startups to raise capital in a fixed-swap pool and distribute their new tokens to early investors. Polkastarter was founded in 2020 by Daniel Stockhaus, Tiago Martins, and Miguel Leite.  As of Q1 2022, it has already assisted more than 100 projects to raise $45 million through public and private sales. Apart from IDOs, the platform also supports GameFi launchpads, metaverse land sales, and other NFT sales.   Key features of Polkastarter Polkastarter is a multi-chain decentralized fundraising platform that offers low transaction fees. With Polkastarter, new projects can launch on different blockchains, including Ethereum, BNB Chain, Polygon, Celo, and Avalanche. They can also accept any tokens that are compatible with these networks during the IDO sales. Let’s take a closer look at the key features Polkastarter offers.   Fixed Swap Pools Fixed Swap Pools are one of the core features of Polkastarter. Unlike the Automated Market Maker (AMM) model adopted by Uniswap and other decentralized exchanges (DEXs), Polkastarter’s liquidity pools execute swap orders at a fixed price. Typically with the DeFi AMM pools, token prices will be adjusted dynamically based on supply and demand, often leading to volatile price swings. To stabilize prices, Polkastarter allows projects to list their new tokens at predetermined prices. The fixed price will be maintained for as long as there are tokens remaining in the original supply. Projects can also set up pools with additional parameters to exercise more control over their fundraisings. For example, they can control the maximum investment per user or the number of investors allowed in the pool. The entire process is controlled by smart contracts, which ensure a fair and transparent token distribution.   IDO farming Typically, IDO participants tend to withdraw their tokens immediately after the initial distribution to sell on the market, leading to volatile price swings. To address this, the Polkastarter V3 upgrade will introduce IDO farming, a feature that encourages IDO participants to stake their newly acquired tokens to earn additional rewards.  IDO farming is designed to lower the selling pressure, and it works similarly to other staking farms. The longer they stake, the higher the rewards they can get. And with every user that withdraws their stake, the APY of the pool will go up, giving the remaining stakers an even higher yield.   KYC Polkastarter also includes an allowlist model for added security benefits. It’s a KYC function that only allows verified users to participate in IDOs. Projects can design what KYC requirements users need to complete before they are eligible for the IDOs. They can also restrict participants from certain geographical locations, giving the team more flexibility and control over the allowlisting process.   Polkastarter gaming Polkastarter launched the Polkastarter Gaming Guild to accommodate the rising popularity of play-to-earn (P2E) games. It aims to connect GameFi projects and gaming enthusiasts around the globe. Polkastarter Gaming has launched a $2 million fund to support up-and-coming metaverse projects. In addition, the Polkastarter Gaming Guild (PGG) was established to provide scholarships to help new play-to-earn users navigate the metaverse. Users can expect more gaming IDOs and the launch of an NFT marketplace in the future.   What is POLS? POLS is the utility token of the Polkastarter ecosystem. It’s an ERC-20 token with a maximum supply of 100 million. POLS is running mainly on the Ethereum blockchain, but there is also a BEP-20 version available on the BNB Smart Chain. POLS is used as a governance token that will give holders the right to vote and submit proposals related to Polkastarter development. These include proposals on new features, token utility, tokens listed on the platform, and more. Polkastarter plans to move to a fully automated DAO governance structure in the future.   What is POLS Power? POLS Power determines your chance of participating in an IDO and NFT sale. It’s an aggregator that calculates the eligible POLS balance users have across the platform, including POLS in their wallet and the POLS that they’re staking. To gain access to an IDO, users need to get their wallet addresses on the “allowlist”. It’s a lottery system that rewards users 1 ticket for every 250 POLS. During an IDO, addresses are chosen at random.  With more tickets their chances of being selected will be higher. With more POLS, the value of the tickets will also increase. There are 5 tiers of POLS Power, which can increase the value of each ticket by up to 25%. The top tier (30,000+ POLS) will also grant users the “No Cooldown” status, meaning they can participate in as many IDOs as they wish, provided they pass KYC.   How to gain POLS Power 1. Hold POLS in a wallet. This is the easiest way to obtain POLS Power. You can buy POLS from cryptocurrency exchanges like Binance or on a DEX like Uniswap and transfer them to a MetaMask. The POLS will turn into POLS Power after 7 days if the user doesn’t move or sell them. 2. Stake POLS. Instead of just holding POLS in a crypto wallet, you can stake them on Ethereum or BNB Chain to increase their POLS Power. Staking POLS will immediately grant access to all open and future IDOs, and the staked tokens will be locked on-chain for the next 7 days before they can be withdrawn.   How to participate in an IDO or NFT sale on Polkastarter? 1. Head to the [Projects] page on Polkastarter to check the upcoming NFT and token sales. Click on the project you want to participate in. 2. Click [Apply Now] and fill in some basic information to join the allowlist.  3. The project team will process all applications, and the allowlist lottery will be generated based on all applicants’ POLS Power. It’s up to the projects to determine how many users they allowlist, so your chance of successfully participating in the sale will vary. 4. If you’re lucky and get allowlisted, you’ll need to complete KYC verification. Also, make sure you have sufficient funds in your respective chain wallet before the sale. 5. On the day of the launch, go to the project page and click [Join], enter the amount you want to contribute and click [Join Pool]. Once the transaction is confirmed, you’ll see a confirmation on the [Allocations] page. You can then claim your tokens after the IDO ends, according to the vesting schedule.    How to buy POLS on Binance? You can buy POLS on crypto exchanges like Binance.  1. Log in to your Binance account and go to [Trade]. Select either the classic or advanced trading mode. 2. Click on [BTC/USDT] and search for “POLS” to see all the available trading pairs, such as POLS/BUSD. 3. Go to the [Spot] box on the right and enter the amount of POLS you want to buy. You can use different order types, such as a Market order. Click [Buy POLS] and the tokens will be credited to your Spot Wallet.       Closing thoughts Polkastarter is a great platform for new businesses and startups to raise capital and start their crypto projects. It can also provide investors easy access to the newest blockchain projects. In addition to Fixed Swap Pools, POLS staking, NFT sales, multi-chain support, and all the existing features, Polkastarter is also planning to upgrade its governance model, so users can get more involved in the decision-making process and overall development.
WOOFi DEX Facilitates Spot Trading Of Popular Blue-Chip Assets (BTC,ETH)

WOO Network Explained - What Is It? How Does It Work?

Binance Academy Binance Academy 17.03.2022 13:25
TL;DR WOO Network is a deep liquidity network incubated by Kronos Research. It connects traders, exchanges, institutions, and DeFi platforms with democratized access to best-in-class liquidity, trading execution, and yield generation strategies at a lower or even zero cost.  WOO Network offers both centralized and decentralized exchanges as part of a liquidity network. WOO X (the CEX) provides low-cost trading, customizable workspaces, and deep liquidity. WOOFi (the DEX) offers a new Synthetic Proactive Market Making model that mimics a traditional exchange's order book. The trading platform's users can swap, earn, and stake WOO, the project's native token. You can purchase WOO on Binance with a credit or debit card or trade it for other cryptocurrencies. WOO can also be staked for rewards on WOOFi.   Introduction Since the creation of Bitcoin, the blockchain space has continued to grow rapidly, and it’s easy to see how important cryptocurrency exchanges are today. But, if we go back to 2016, the options were slim. Binance only launched in July 2017, and there was no Uniswap or other Automated Market Makers (AMM) out there. Many people purchased Bitcoin (BTC) and other digital assets directly from other individuals in peer-to-peer (P2P) markets or through over-the-counter (OTC) trades. Now there are hundreds (if not thousands) of crypto exchanges to choose from. WOO Network is part of this ecosystem, but it offers unique features that go beyond the traditional crypto exchange model. If you want to hear more about one of Binance Lab's investments, you've come to the right place.     What is WOO Network? WOO Network is a deep liquidity network connecting traders, exchanges, institutions, and DeFi platforms. It provides democratized access to market liquidity, trading execution, and yield generation strategies at lower or even zero cost. WOO Network was incubated by Kronos Research in 2019, a quantitative trading firm that has long been a leading market maker across all major exchanges, generating $5-10 billion in daily volume. Through these years of experience in crypto, the Kronos team noticed a key shortcoming - insufficient and unaffordable liquidity across many crypto exchanges, both centralized and decentralized. Subsequently, Kronos helped launch WOO Network, which now offers a suite of products that bring users better liquidity with lower or even zero fees. Binance Labs led WOO Network’s Series A+ funding round with a $12M investment in January 2022. The WOO Network splits most of its services between WOO X, a centralized exchange (CEX), and WOOFi, a decentralized exchange (DEX) and staking platform. WOO Network offers WOO Trade for institutional clients, allowing partner exchanges to integrate WOO Network's liquidity into their services via API.   How does WOO Network work? WOO Network works with Kronos Research to aggregate and integrate liquidity using quantitative trading and hedging strategies. Liquidity is aggregated from a number of leading centralized and institutional trading platforms and, more recently, through DeFi networks such as Ethereum, BNB Chain, Polygon, and Avalanche. Clients connect directly to the network via API or through the GUI on WOO X and WOOFi. Others connect indirectly via DeFi platforms like 1inch, 0x, or Paraswap. Market makers from other platforms, such as on dYdX, can also use WOO Network as a venue to hedge exposure. The zero-fee model and favorable terms towards taker orders are ideal for low-cost hedging. Volumes have been growing steadily, and in the middle of September 2021, the 24hr trading volume reached $2.5B, fueled by the exponential growth of popular platforms, such as dYdX.   What makes WOO Network unique? The team at WOO Network has had significant financial and technical experience across many companies such as Citadel, Virtu, Allston, Deutsche Bank, and BNP Paribas. Also, WOO Network’s product offering includes: WOO Network - a gateway for institutional clients to upgrade their order books to a depth competitive with top exchanges and tighten their bid-ask spread. WOO X is a zero-fee or even negative fee trading platform providing professional and institutional traders with the best-in-class liquidity and execution. It features fully customizable modules for workspace customization. WOOFi is a suite of products that aim to expand WOO Network's liquidity network to DeFi and help DeFi users get the best pricing, the lowest fees, tightest bid-ask spreads, and rewarding but safe yield-generating opportunities. WOO Ventures is the investment arm of WOO Network, which seeks to form strategic partnerships with projects and ecosystems. 50% of the returns from all investments are distributed back to WOO token holders.   What is WOO X? WOO X is WOO Network's primary product offering Centralized Finance (CeFi) trading services. The exchange boasts low-fee trading, deep liquidity, and customizable workspaces. Low-fee trading Fees are an important part of any trader's choice when choosing a platform. Users who trade on WOO X manually (without using an API) can reduce their maker and taker fees by gaining Tier 2 status. Tier 2 is available to those who stake 1800 WOO on WOO X, and the CEX occasionally applies additional benefits to Tier 2 users. Deep liquidity Key to any exchange's success is the ability for buyers and sellers to complete their orders efficiently. Ideally, there should be little to no slippage for large orders and a small bid-ask spread, and this is only possible with deep liquidity. This simply means that many people supply crypto to buy and sell on the order book, and the exchange can easily meet demand.  WOO Network sources its liquidity from traders using the platform and professional liquidity providers, exchanges, market makers, and institutions. WOO X's most significant provider is Kronos Research, a trading firm that engages in market making. By providing a deep liquidity base through Kronos Research, WOO X can attract even more liquidity to the network. Customizable workspaces WOO X allows users to customize their trading view with widgets, charts, and other personalizable elements. For more experienced traders, this gives them access to the information and tools they need. TradingView also provides advanced charting tools for creating indicators for technical analysis.     What is WOOFi? WOOFi is a BSC-based Automated Market Market that uses the Synthetic Proactive Market Making (sPMM) model for determining prices. Most typical AMMs use the more straightforward, classic Constant Product Market Market (CPMM). WOOFi offers three main features: 1. Swapping - Users can swap between token pairs in WOOFi's liquidity pools. The sPMM model has more similarities with a traditional exchange's order book than AMMs like Uniswap on Ethereum (ETH). sPMM relies on WOO Network’s market data oracles to scan order book prices from centralized exchanges like Binance and calculate a suitable trade price. Liquidity comes from single pools rather than the traditional dual asset liquidity pool (LP) system. WOOFi manages and rebalances these assets by providing incentives to investors who provide assets with low liquidity. 2. Earning - Users can deposit LP tokens from other DEXs and individual assets to begin farming yield with them. These vaults reinvest profits automatically and efficiently, allowing you to compound your interest. 3. Staking - WOO holders can stake their tokens to share in the revenue generated by swapping and earning on WOOFi.   The WOO token WOO is the native token of the WOO Network, serving as the unifying force for all DeFi and CeFi products and services provided. It has a max supply of 3 billion tokens, which gradually decreases with monthly token burns until 50% of the max supply is burned. WOO is a utility token that exists on multiple blockchains through bridges such as BNB Chain, Ethereum, Avalanche, Polygon, Solana, Arbitrum, Fantom, and NEAR. It’s embedded within prominent DEXes on various chains: Bancor, SushiSwap, Uniswap, PancakeSwap, QuickSwap, and SpookySwap. The WOO token provides access to WOO X zero-fee trading, trading rebates (Trade-to-Earn), staking, discounts, WOO Ventures airdrops, and governance utilities. Let’s take a closer look at its current and upcoming use cases. 1. Governance - WOO stakers on both WOOFi and WOO X, as well as anyone holding at least 1,800 WOO in an on-chain wallet, can participate in decentralized governance by creating proposals or voting in the WOO DAO (Decentralized Autonomous Organization). 2. Staking - By staking WOO tokens, you can lower your trading fees and even enjoy zero-fee trading on WOO X. Traders with large volumes on WOO X can also stake WOO to increase their trading limits and reduce fees. 3. Distributing yield - A portion of tokens received from WOO Ventures early-stage project investments are distributed to WOO token stakers on WOO X. You can also stake your WOO on WOOFi and earn yields from the fees of both Swap and Earn products. 4. Providing liquidity and yield farming - You can use your WOO to enter liquidity pools and farms on exchanges such as SushiSwap, Uniswap, PancakeSwap, and more. These provide opportunities across multiple blockchains. 5. Lending and borrowing - You can use your WOO as collateral for crypto loans and lend it to other users. 6. Social trading - In the future, WOO stakers will be able to emulate highly professional trading strategies from top-performing traders. 7. WOO token burn - The WOO Network uses 50% of the platform revenue to buy back and burn WOO every month.   Where can I buy WOO? You can purchase WOO on Binance in two ways. First, you can use a credit or debit card with selected fiat currencies. Head to Binance's [Buy Crypto with Debit/Credit Card] page, select the currency you want to use and choose WOO in the bottom field. Click [Continue] to confirm your purchase and further instructions.     You can also trade cryptocurrencies like BUSD and BNB for WOO. Head to the Exchange view and type WOO in the trading pair search field to find a list of all available trading pairs. For more information on the Exchange view, head to How to Use TradingView on the Binance Website.     How do I stake WOO on WOOFi? You can stake WOO on BNB Smart Chain's WOOFi platform to begin earning yield. After staking, you'll receive xWOO as a receipt of your share of the pool. Swap fees on WOOFi purchase WOO daily and are then shared with the pool. After removing your stake, your xWOO is burned, and you'll receive your initial deposit plus earned interest. Don't forget you will need BEP-20 BNB to pay your transaction fees. 1. To begin, connect your wallet containing WOO to the WOOFi platform with the [Connect Wallet] button.     2. Input the amount you want to stake and click [APPROVE].     Note that there's a 7-day lock-in period with a 5% penalty for withdrawing before the end of this period.     Closing thoughts WOO Network is a convenient option if you want a CEX's security and access to unlisted tokens on DeFi platforms. Their liquidity focus is essential to blockchain users who want to avoid slippage at all costs. Overall, the project is one of the rare options out there combining CEX and DEX services.As WOO Network’s liquidity continues growing in the DeFi and CeFi space, WOO token’s utility also expands. Its mix of a veteran team, support from industry leaders like Binance, and a suite of essential products have helped create its position in the industry today. To continue this growth, WOO Network also plans to expand its extensive list of products, features, and partnerships.
Binance Academy summarise year 2022 featuring The Merge, FTX and more

Web 3.0: Ankr (ANKR) - Explained. What Is It? How Does It Work?

Binance Academy Binance Academy 14.03.2022 12:41
TL;DR Ankr is a decentralized Web3 infrastructure provider that helps developers, decentralized applications, and stakers interact easily with an array of blockchains. You can access APIs and RPCs to build DApps easily, stake on Ankr Earn, and get custom solutions for blockchain enterprise needs.  The project’s token, ANKR, facilitates all activity on Ankr Protocol. It is used to pay for requests to blockchains, reward independent node providers for serving requests, and reward ANKR holders for staking their ANKR to full nodes. You can purchase ANKR on Binance with a credit or debit card on the exchange.  Learn more on Binance.com Introduction Cross-chain and multi-chain opportunities have become hugely popular with investors and users. Previously complicated cross-chain activity is now much easier with a developing Web3 ecosystem. Ankr is a large part of this movement and is made for users looking for a streamlined method of interacting with multiple blockchains. Whether you're a developer or crypto investor, Ankr has something to offer.     What is Ankr? Ankr was founded in 2017 by Chandler Song and Ryan Fang, with a mainnet launch in 2019. It offers a suite of Web3 (AKA Web 3.0) tools that help developers, applications, and stakers access multiple blockchains' infrastructure through one decentralized platform. Anyone can provide a node to the Ankr Protocol and earn rewards for serving requests to blockchains from all over the world. On the other hand, developers and projects who don’t want to set up and run their own nodes can pay to utilize the decentralized node infrastructure available on Ankr Protocol. Users who want to stake or become validators across various blockchains can also use Ankr to easily manage the process.  Ankr currently supports staking on Polygon (MATIC), Ethereum (ETH), BNB Smart Chain (BNB), Avalanche (AVAX), Polkadot (DOT), and Kusama (KSM). You can also use ANKR to run Ethereum 2.0 nodes by paying a monthly fee for a simplified validator experience.   How does Ankr work? It's important to understand that Ankr is not a blockchain. It operates as a suite of tools for builders, stakers, and enterprises. Its main features include: Decentralized node infrastructure services Ankr’s decentralized infrastructure benefits DeFi platforms, NFT projects, blockchain games, and DApps of all kinds. Having so many high-performance independent nodes all around the world serving requests means all of these applications can receive faster, more scalable, and more affordable access to blockchains.  Setting up a blockchain node requires technical knowledge, time, and effort. Not everyone has the skills to manage node deployment themselves. If you need a dedicated node, Ankr can launch one for you to access remotely. Ankr Protocol is comprised of independently run nodes all around the world that you can request data from at any time.  Premium API and RPC endpoints for developers Developers deploying smart contracts and DApps to a blockchain need to work with specific APIs (Application Programming Interfaces). However, this typically requires running your own node and spending hours synchronizing it to the blockchain's current state. Ankr Protocol removes the need to run your own nodes entirely by providing instant API services and RPC access via their network of decentralized node providers. Having dedicated Application Programming Interfaces (APIs) and Remote Procedure Calls (RPCs) means that you and your project can interact with blockchains without competing traffic from other users on shared servers. By using an API endpoint at Ankr, you'll have access to the whole chain's data without doing the setup work yourself. The API will supply your DApp with all the information it needs to run successfully and give a better user experience. Liquid staking A common DeFi (Decentralized Finance) issue is losing liquidity when you stake funds. In addition to offering staking across multiple chains, Ankr also provides reward-earning tokens that represent your staked funds. You can then use these new “liquid staking tokens” to trade or use in DeFi for additional earning strategies like liquidity mining, yield farming, lending, and more. This mechanism helps unlock the value of your staked investments to earn in more places. To begin with staking, you'll need to connect your wallet to the platform. Because you can stake multiple cryptocurrencies through Ankr, the platform supports a range of wallets. Let's look at staking ETH as an example. Once you have gone through the staking process (which we go through later in this guide), you'll receive reward-earning aETHb, or reward-bearing aETHc tokens in return. As your ETH is locked in preparation for Ethereum 2.0, aETHb and aETHc provide a liquid way to access the value of your staked assets. Enterprise Ankr offers a Web3 Infrastructure-as-a-Service model for businesses that require flexible, custom-made solutions. Organizations dealing with multiple blockchain networks can use Ankr's API and RPC services accessible through a monitoring platform. As business needs usually differ from those of smaller projects, DApps, and users, this enterprise solution caters more specifically to business use cases.   What is ANKR? ANKR is the Ankr platform's utility token. ANKR is an ERC-20 and BEP-20 token that can be used in both the Ethereum and Binance Smart Chain ecosystems. The ANKR token has a max supply of 10,000,000,000 and plays a core function in Ankr Protocol’s decentralized infrastructure marketplace: 1. Ankr Protocol users pay for Premium services with ANKR.  2. Independent node providers stake ANKR and serve traffic to earn ANKR rewards.  3. Token holders can stake ANKR to help secure the protocol and share in the rewards. 4. Pay ANKR for remote access to your own Ankr-run node. 5. Use ANKR to vote with Ankr's governance mechanism. As such, ANKR can be used both as a utility token and a governance token within the Ankr network. ANKR is a payment method for all Ankr products and a crucial part of the Ankr Protocol for users, providers, and stakers. This makes ANKR more similar to PancakeSwap's CAKE than native cryptocurrencies with their own network like BTC or ETH.   Where can I buy ANKR? You can easily purchase ANKR on Binance with two methods. Firstly, you can purchase the token with a credit or debit card using selected fiat currencies. Simply visit the [Buy Crypto with Debit/Credit Card] page, select your desired fiat currency to pay, and then choose ANKR in the [Receive] field. Click [Continue] for further instructions and confirmation of your purchase.     ANKR can also be traded with a selection of other cryptocurrencies. Head to the Exchange view and type ANKR in the trading pair search field to find a list of available trading pairs.     How do I stake using Ankr? 1. One of Ankr's key features is an easy way to stake across multiple chains in one client. To do this, first head to the Ankr Earn website and select the crypto you want to stake. Here, we've chosen BNB, so we need to click [Stake]. Note that BNB staking on the Binance Beacon Chain requires you to use the Binance Chain Wallet.     2. Now, click the large [Grant Access] button.     3. Select your account.     4. You'll now be able to choose the amount you want to stake. Make sure to have BNB to pay your transaction fees, and remember to return to Ankr if you want to remove your stake.     Closing thoughts No matter what kind of blockchain user you are, there will likely be an Ankr service you're interested in. Users can stake with different blockchains in a suite that can manage all funds in one place. Builders can access decentralized multi-chain development tools with the ability to expand quickly onto other networks. And enterprises can get any custom solutions they need to integrate staking products, infrastructure, and more with their platforms. So far, Ankr has positioned itself among the fastest growing providers of decentralized infrastructure, and it continues to add more services for Web3 developers and users.
NEAR - Blockchain Project Launched In 2020. What Is It?

NEAR - Blockchain Project Launched In 2020. What Is It?

Binance Academy Binance Academy 14.03.2022 12:34
TL;DR NEAR Protocol is a layer-1 blockchain that uses Nightshade, a unique sharding technology, to achieve scalability. It was launched in 2020 as a decentralized cloud infrastructure to host decentralized applications (DApps).  NEAR offers cross-chain interoperability through the Rainbow Bridge and a layer-2 solution called Aurora. Users can bridge ERC-20 tokens and assets from the Ethereum blockchain to the NEAR Protocol network, which gives them access to higher throughput and lower transaction fees. NEAR is the native token of the NEAR Protocol. It’s used for paying transaction and data storage fees. NEAR token holders can also stake their tokens on the NEAR wallet to receive rewards or use them to vote for governance proposals.  Learn more on Binance.com Introduction As cryptocurrencies and blockchain technology became more popular, Bitcoin, Ethereum, and other networks started facing scalability challenges due to increased demand. The growing interest in decentralized applications and non-fungible tokens (NFTs) make these challenges particularly noticeable on the Ethereum blockchain. The network often faces increased gas prices and transaction costs due to heavy traffic, which can be discouraging for many users and developers.  While there are several teams exploring different scaling solutions for blockchain networks, the NEAR Protocol (NEAR) team is focused on addressing the limitations through sharding.     What is NEAR Protocol? NEAR Protocol is a layer 1 blockchain that uses sharding technology to achieve scalability. NEAR uses smart contracts and adopts the Proof of Stake (PoS) consensus mechanism to secure its network. Built by the NEAR Collective, the NEAR Protocol was co-founded by Alex Skidanov and Illia Polosukhin in 2020. The project is being developed as a community-operated cloud infrastructure for hosting decentralized applications (DApps). The NEAR platform contains a wide range of programming tools and languages, as well as smart contracts with cross-chain functionality to help developers build DApps. The platform counts with a simplified onboarding process and features human-readable account names instead of cryptographic wallet addresses. As a PoS blockchain, NEAR was awarded the Climate Neutral Product Label in 2021 for being carbon neutral.    How does NEAR Protocol work? To compete with other smart contract-enabled blockchains like Ethereum, EOS, and Polkadot, NEAR implements several features in its ecosystem to enhance its performance.   Nightshade Sharding Nightshade is the core technology of the NEAR blockchain. It is a sharding technology for processing data more efficiently. Sharding refers to splitting the work of processing transactions across many validator nodes. This way, each node will handle only a fraction of the network’s transactions, which allows for a higher number of transactions per second (TPS). On NEAR, Nightshade utilizes block producers and validators to process transaction data in parallel across multiple shards. Each shard will produce a fraction of the next block. Each fraction is called a chunk. These chunks are then processed and stored on the NEAR Protocol blockchain to finalize the transactions they contain. In theory, Nightshade may allow NEAR to handle millions of transactions per second without affecting its performance. Depending on the network condition, it will dynamically split and merge shards based on network traffic and use of resources. When the network is at a high capacity, the number of nodes will increase. The overall efficiency can be maintained, and transaction fees can be kept low. Unlike other PoS networks, validators do not compete for the next block based on the size of their stake. NEAR uses an election mechanism called the Thresholded Proof of Stake (TPoS) to select validators. TPoS is similar to an auction, where a large pool of prospective validators indicates how much NEAR token they’re willing to stake via a signed transaction. TPoS will then determine the minimum threshold for becoming a validator in each epoch (typically, a 12-hour interval). Those that have staked above that threshold will have a chance to be selected as validators, proportional to the amount they staked.    Rainbow Bridge Rainbow Bridge is an application on NEAR that allows users to transfer ERC-20 tokens, stablecoins, wrapped tokens, and even NFTs between the Ethereum and NEAR blockchains. This lets developers and users take advantage of the higher throughput and lower fees on the NEAR Protocol.  The Rainbow Bridge is fully permissionless and decentralized. To bridge tokens, users can send ERC-20 assets directly from MetaMask or other Web3 wallets to the NEAR Wallet and vice-versa. First, they need to deposit the token in an Ethereum smart contract. Since direct token transfer is not possible between networks, the tokens will be locked and taken out of circulation on Ethereum. New tokens will be created on NEAR to represent the original ones. In this way, the total circulating supply of the token remains constant across both blockchains.  In most cases, transactions on NEAR will confirm in 1-2 seconds and cost under $1. However, if the user wishes to move the token back to Ethereum, the procedure can cost more and take longer to process. The final value will depend on the current Ethereum traffic and gas prices.    Aurora Aurora is a layer-2 solution on the NEAR Protocol blockchain. It aims to help developers expand their apps on an Ethereum-compatible platform that offers low transaction costs for their users. According to NEAR, Aurora is able to host thousands of transactions per second, with only approximately 2 seconds of block confirmation time. Aurora is composed of the Aurora Engine and the Aurora Bridge. Aurora Engine is an Ethereum Virtual Machine (EVM) on the NEAR Protocol, meaning that it is compatible with Ethereum and supports all tools available in the Ethereum ecosystem. This makes it easier for developers to get started on NEAR without having to rewrite their DApps or learn how to work with new development tools. They can also use the Aurora Bridge (the same technology as the Rainbow Bridge) to seamlessly bridge their smart contracts and ERC-20 tokens between the Ethereum and NEAR Protocol blockchains. Users can also pay transaction fees with ETH on Aurora.   What is the NEAR token? NEAR Protocol (NEAR) is the native token of the NEAR ecosystem. It’s an ERC-20 token with a max supply of 1 billion. NEAR can be used for paying transaction and storage fees on the network. Also, smart contract developers can receive a portion of the transaction fees their contract generates. To keep NEAR scarce, the remaining transaction fees will be burned. Token holders can stake on the NEAR Wallet to earn rewards too. They stake NEAR to run validating nodes for rewards that amount to 4.5% of the total NEAR supply. They can also participate in the governance of the NEAR network by voting on decisions and submitting proposals related to the platform and products.   How to buy NEAR on Binance? You can buy NEAR Protocol (NEAR) on cryptocurrency exchanges like Binance.  1. Log in to your Binance account and click [Trade]. Select either the classic or advanced trading interface. 2. Click on [BTC/USDT] to open the search bar. Enter “NEAR” and you’ll see the available trading pairs. In this example, we’ll use NEAR/BUSD. 3. Go to the [Spot] box on the right and enter the amount of NEAR you wish to buy. You can use different order types to place the order. Select an order type, such as Market order, and click [Buy NEAR]. The NEAR tokens will be credited to your Spot Wallet.       Closing thoughts As the blockchain space grows, platforms that can offer lower transaction costs and increased throughput will likely play an important role in mainstream adoption. NEAR’s scaling solutions can attract developers looking to build more efficient DeFi products and decentralized applications (DApps). The NEAR roadmap includes further sharding developments and layer-2 cross-chain solutions to further scale its blockchain and ultimately benefit developers and end-users.
Binance Academy summarise year 2022 featuring The Merge, FTX and more

Blockchain Projects: COTI Explained. What Is It?

Binance Academy Binance Academy 14.03.2022 12:31
TL;DR COTI is a decentralized payment solution that aims to address the blockchain scalability issue. Unlike traditional blockchains, COTI doesn’t rely on Proof of Work (PoW) or Proof of Stake (PoS) to validate transactions. It adopts a unique consensus algorithm called Proof of Trust (PoT), which combines directed acyclic graph (DAG) data structure with PoW. PoT can lower transaction costs and increase throughput to up to 100,000 TPS. Its native token COTI is a cryptocurrency that operates on three different mainnets. COTI is used for paying transaction fees and can be staked to earn rewards in the Treasury. You can also use COTI and other cryptocurrencies to pay for goods and services with the COTI Visa debit card. Learn more on Binance.com   Introduction COTI is a decentralized payment solution that facilitates fast and secure transactions with low fees. It aims to revolutionize traditional finance by eliminating the intermediaries and empowering organizations to build their own payment solutions and digital currencies or stablecoins.     What is COTI? COTI stands for “Currency of the Internet”. Designed by Samuel Falkon in 2016, it was built to support both fiat currency and cryptocurrency for everyday transactions. COTI is the native cryptocurrency of the COTI ecosystem.   How does COTI work? Scalability has been a challenge for major blockchains, such as Bitcoin (BTC) and Ethereum (ETH). They process transactions using blocks, which are added periodically to a growing chain of blocks. However, there’s a waiting period for the blocks to be accepted, which could take a long time to confirm the transactions. For example, Bitcoin can only handle around 20 transactions per second, compared to Visa’s 65,000 TPS. The COTI network is built on Trustchain, a layer-1 blockchain protocol with a directed acyclic graph (DAG) data structure. It can significantly lower transaction costs and increase throughput to up to 100,000 transactions per second (TPS).   Proof of Trust (PoT) To address scalability issues, COTI combines Trustchain, a DAG-based data structure, and Proof of Work (PoW) to create the Proof of Trust consensus mechanism. The COTI DAG is called “the Cluster”, a distributed ledger for recording transactions on the network. Instead of gathering transactions into blocks, transactions are placed in sequence, one after the other. For a new transaction to be acknowledged, the validating nodes must link it to two prior transactions. But which transactions should they link? It depends on their Trust Score. In the PoT system, validators are selected based on their trustworthiness. Each user and node on the Cluster are rated according to their Trust Scores, calculated by their historical behavior and payment statistics. The higher the Trust Score, the quicker their transactions can be processed and the lower the fees. When a user initiates a transaction on COTI, the Source Selection Algorithm will randomly assign two validating nodes with similar Trust Scores. As a result, transactions from trusted users will be confirmed much faster. As transactions with different Trust Scores will be processed in parallel, it can achieve scalability and network security. In COTI, PoW isn’t adopted in the way we’re accustomed to. It doesn’t rely on mining to achieve trust. PoW is only used to protect COTI from spamming attempts and incentivize network participants. Completing PoW tasks allow validators to attach their transactions to the Cluster, but it doesn’t guarantee that they can do so. It all depends on their Trust Scores, which are also used for setting the PoW levels that can indirectly affect transaction fee levels. With no mining required, COTI can operate with very low transaction fees.   A MultiDAG ecosystem The COTI MultiDAG ecosystem is similar to that of Ethereum. There are several independent DAGs on the network with different purposes. They each maintain fully customized tokens and applications, but all run simultaneously on the same infrastructure to make the whole network more efficient. Smart contracts on the COTI DAG are on-chain and decentralized, and the fees for executing them are more affordable than the gas fees on Ethereum. They also allow merchants to create high-performance digital currencies and stablecoins on Trustchain. Users can create their own fiat-collateralized, crypto-collateralized, or even non-collateralized stablecoins with the MultiDAG. For example, COTI is the official issuer of Cardano (ADA)’s stablecoin Djed and the payment system ADA Pay.   COTI Pay COTI Pay is a decentralized payment network that can process both crypto and fiat payments. Users can make nearly instant payments to friends and merchants via COTI Pay wallets, all with very low transaction fees. In addition, COTI Pay supports offline payment with crypto-friendly bank accounts and physical Visa debit cards. They can store fiat currency balances and facilitate in-store payments without having to pay currency exchange fees to third-party service providers. Similar to other online payment systems like PayPal, the COTI Universal Payment System (UPS) offers buyers-seller protections with an arbitration system. This dispute resolution mechanism works with the Trust Score algorithm to safeguard against user errors and fraud and maintain the payment system’s security. The COTI Pay network has its currency exchange (COTI-X) and a stablecoin (COTI Dime). COTI-X functions as a foundational layer for COTI Pay’s applications and services. It’s an internal liquidity pool that powers cross-currency payments, meaning that the COTI network can process instant on-chain settlements on any crypto. This is a competitive advantage for merchants planning to accept cryptocurrencies as payment methods. COTI-X helps the network process millions of dollars in transactions every month. Not only does it speed up the confirmation time for transactions, it also protects merchants from market volatility.   What is the COTI token? COTI coin is the native token of the COTI ecosystem. It is a DAG-based cryptocurrency with a total supply of 2 billion. COTI doesn’t require PoW mining to secure the network. COTI operates on three different mainnets: Trustchain, Ethereum, and BNB Chain. Trustchain: COTI’s native mainnet; Ethereum: COTI also exists as an ERC-20 token on the Ethereum network. It’s traded on some crypto exchanges and used in DeFi DApps ; BNB Beacon Chain (formerly Binance Chain): a BEP-2 version of COTI. COTI token holders can use the COTI Bridge to interoperate between the different networks (mainnets). Apart from paying for services within the ecosystem, COTI can be deposited into the COTI Treasury for DeFi staking. The Treasury will then allocate COTI as incentives for arbitrators and node operators within COTI Pay.   How to buy COTI on Binance? You can buy COTI on cryptocurrency exchanges like Binance.  1. Log in to your Binance account and go to [Trade]. Select either the classic or advanced trading mode. 2. Click on [BTC/USDT] on the top left and search for “COTI”. It will display all the available trading pairs, such as COTI/BUSD. 3. Go to the [Spot] box on the right and enter the amount of COTI to buy. You can use different order types, such as a Market order. Click [Buy COTI] and the tokens will be credited to your Spot Wallet.           Closing thoughts As the online payment industry develops, there will be an increased demand for a highly scalable platform, for both crypto and fiat transactions. According to the team, COTI is looking to expand partnerships with more projects and merchants and is expected to bring more use cases to the platform in the near future.
Altcoins: Harmony (ONE) - A Blockchain Project Explained

Altcoins: Harmony (ONE) - A Blockchain Project Explained

Binance Academy Binance Academy 03.03.2022 15:10
TL;DR Harmony is a layer-1 blockchain using sharding and Effective Proof of Stake to achieve scalability, security, and decentralization. The network was launched in 2019 and features trustless cross-chain bridges and four shards, which process transactions in parallel. Effective Proof of Stake encourages decentralization of validators, and sharding shares the network's load among validators, delegators, and users. Its native token ONE is used for transaction fees, governance, and staking. You can purchase ONE on Binance with a credit or debit card or trade it for another cryptocurrency. Once purchased, you can store ONE on EVM-compatible wallets like MetaMask and Binance Chain Wallet.   Introduction Exploring different altcoin projects can be a good idea if you're looking for new opportunities or crypto use cases. You might have already noticed the Harmony network or heard about it in the crypto media. To help you understand more about the project, we've outlined its background, key points, and some ways you can get involved.     What is the Harmony blockchain? Harmony is an Effective Proof of Stake (EPoS) blockchain founded in 2018 by Stephen Tse with a mainnet launch in 2019. Like most post-Ethereum networks, it claims to solve the blockchain trilemma of decentralization, scalability, and security. Harmony's answer to the problem is sharding and its Effective Proof of Stake consensus mechanism. Another key Harmony platform feature is its Cross-Chain Finance model. The popularity of cross-chain and multi-chain capabilities has increased dramatically, and Harmony caters to this. The blockchain offers bridging services between BNB Smart Chain (BNB), Ethereum (ETH), Bitcoin (BTC), and other networks. Harmony completed its 2019 IEO via Binance Launchpad. Harmony's main vision for scaling Web3 relies on zero-knowledge proofs and Decentralized Autonomous Organizations (DAOs).   How does sharding in Harmony work? One of Harmony's keys to providing security, scalability, and decentralization is sharding. The Harmony sharding splits the network into four sections that work in parallel. Users can choose the shard they want, which distributes the network's workload. Validation, transactions, block creation, and staking are all done separately on each shard. Sharding is beneficial for Harmony because: 1. A validator doesn't need to maintain a full copy of the entire blockchain's transaction history. 2. Validators are randomly assigned to shards to prevent hostile shard takeovers. After every Epoch, validators will likely move to a new shard, and leaders rotate. Harmony currently has a limit of 250 validators slots per shard known as BLS Keys. If needed, the number of shards and validators can increase to meet network demand in the future. Shard 0 is the Beacon Chain and acts as an information relay between shards 1, 2, and 3. No matter the shard used, transaction times will be roughly two seconds.  Currently, most activity takes place on the Beacon Chain. Full cross-shard implementation isn't yet fully developed but is on the roadmap. In the future, cross-shard communication will allow for smart contracts to operate across shards by transmitting messages between nodes directly.   How does Effective Proof of Stake work? Effective Proof of Stake (EPoS) is similar to the standard Proof of Stake (PoS) validator and delegator model. Validators stake ONE (Harmony's native token) to run a node and possibly process transactions through an election process. Delegators stake their ONE behind a validator in return for a percentage of future block rewards and transaction fees. Once elected and assigned a shard, the validator creates blocks and shares its rewards with delegators. EPoS’s reward distribution is what makes it different. Most PoS systems consolidate rewards and power behind a small number of validators. The more you stake, the more you earn and validate. In contrast, EPoS reduces rewards and penalizes validators who stake too much in a single node. Nodes with smaller stakes actually receive more favorable rewards in relation to their size, encouraging large validators to decentralize. This system also helps avoid single points of failure. Besides offering a secure method for validating transactions, EPoS provides low gas fees. This makes it an attractive alternative to Ethereum's high gas fees or Bitcoin's scalability issues with Proof of Work (PoW).   What is ONE? The Harmony protocol's native token ONE is used for: 1. Paying network transaction fees. 2. Staking as a delegator or validator in return for block rewards. 3. Taking part in Harmony's open governance mechanism. Harmony provides a constant reward to validators of 441 million ONE annually. Transaction fees are burned with an end goal of creating a net-zero state, offsetting the ONE provided for block rewards.   Where can I buy ONE? ONE can be purchased on Binance in a few ways. First, you can buy with a credit or debit card using selected fiat currencies. Head to the [Buy Crypto with Debit/Credit Card] page, select the currency you want to pay in, and then select ONE in the [Receive] field. Click [Continue] to follow the instructions for your purchase.     You can also trade other cryptocurrencies for ONE. By heading to the Exchange view and typing ONE in the trading pair search field, you can find a list of available trading pairs. For more information on using the trading view, head to How to Use TradingView on Binance Website. You can also purchase ONE on decentralized cryptocurrency exchanges (DEX) and marketplaces like SushiSwap.     How do I stake ONE? You can stake ONE on the Harmony blockchain as a validator or delegator. The simplest option is to stake as a delegator, which requires finding a validator to delegate your tokens. 1. To start staking, head to the Harmony Staking Explorer and choose a validator by clicking on their name.     2. Click the [Delegate] button.     3. You'll then be asked to sign in. You can choose to either create a new wallet address with Harmony or use an existing one, such as your MetaMask.  4. Once logged in, click the [Delegate] button again and choose the amount you want to stake. If the validator you have chosen is elected, you and other delegators will start receiving a portion of their block rewards. 5. Staking as a validator requires running a node, which is a more complicated process. You can find more details on this in the Harmony docs.   How do I store ONE? As Harmony is an EVM-compatible blockchain network, it's simple to add it to your MetaMask or Binance Chain Wallet. If you're using another extension wallet that allows you to add additional EVM (Ethereum Virtual Machine) networks, you can also use it with Harmony. You can follow our Connecting MetaMask to BNB Smart Chain guide and use the mainnet information below: Network Name Harmony Mainnet New RPC URL (Use only URL in italics) Shard 0: https://api.harmony.one Shard 1: https://s1.api.harmony.one Shard 2: https://s2.api.harmony.one Shard 3: https://s3.api.harmony.one Chain ID (Use only the number in italics) Shard 0: 1666600000 Shard 1: 1666600001 Shard 2: 1666600002 Shard 3: 1666600003 Currency Symbol ONE Block Explorer URL https://explorer.harmony.one/   Don't forget that Harmony is made up of multiple shards. You must use the correct RPC URL and Chain ID pair when connecting to a specific shard. You should use Shard 0 for transacting with exchanges, staking, or using smart contracts until shards 1, 2, and 3 become more active.     Closing thoughts Whether you're an investor, DeFi DApp user, or staker, Harmony has a solid ecosystem to explore and get involved with. Even at its current roadmap stage, there’s a lot to use and discover. With more cross-shard capabilities coming in the future, make sure to keep up to date with Harmony’s progress on their website.
Smart Contract Security Audit Explained. How Does It Work?

Smart Contract Security Audit Explained. How Does It Work?

Binance Academy Binance Academy 02.03.2022 09:23
TL;DR A smart contract security audit provides a detailed analysis of a project's smart contracts. These are important to safeguard funds invested through them. As all transactions on the blockchain are final, funds cannot be retrieved should they be stolen. Typically, auditors will examine the code of smart contracts, produce a report, and provide it to the project for them to work with. A final report is then released, detailing any outstanding errors and the work already done to address performance or security issues.   Introduction Smart contract security audits are very common in the Decentralized Finance (DeFi) ecosystem. If you've invested in a blockchain project, your decision might have been partly based on the results of a smart contract code review. While most people understand the importance of audits for cybersecurity, not many dive into the lines of code. Let's take a look at the methods, tools, and results typically seen in smart contract security audits so that you can make more informed decisions.     What is a smart contract audit? A smart contract security audit examines and comments on a project's smart contract code. Typically, these contracts are written in Solidity programming language and provided via GitHub. Security audits are particularly valuable for DeFi projects that expect to handle blockchain transactions worth millions of dollars or a huge amount of players. The audits usually follow a four-step process: 1. Smart contracts are provided to the audit team for initial analysis. 2. The audit team presents their findings to the project for them to act upon. 3. The project team makes changes based on the issues found. 4. The audit team releases their final report, considering any new changes or outstanding errors. For many crypto users, smart contract audits are essential when investing in new DeFi projects. It's become a standard for projects that want to be taken seriously. Certain audit providers are also seen as industry leaders, making their audits more valuable in investors' eyes.   Why do we need smart contract audits? With vast amounts of value transacted through or locked in smart contracts, they become attractive targets for malicious attacks from hackers. Minor coding