Binance Academy

Binance Academy

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

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.
Blockchain Bridge - What Is It?

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. 
BTC update for June 27,.2022 - Potential for the drop due to broken rising wedge

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

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.
Binance Academy: What Are Decentralized Applications (DApps)?

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

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

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.
Uncertain Rebound and Inflation Data: How Likely Is Bitcoin To Fall Again?

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

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.
(BTC) Bitcoin – Sinking fast | Oanda

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.
Blockchain Bridge - What Is It?

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.
EURUSD rejected at Kumo (cloud) resistance

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.
US Stocks: S&P 500 (-2.01%), Nasdaq (-2.98%) And Dow Jones (DJI) (-1.58%) Decreased. Japan: Nikkei 225 Has Gone Down

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).
BTC update for June 27,.2022 - Potential for the drop due to broken rising wedge

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.
Binance Academy: Crypto Cards Explained

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

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.
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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.       
Binance Academy: What Are Decentralized Applications (DApps)?

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.
Uncertain Rebound and Inflation Data: How Likely Is Bitcoin To Fall Again?

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.
Binance Academy: Crypto Fear And Greed Index Explained

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.
Trading plan for Litecoin for June 29, 2022

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.
Binance Academy: What Are Decentralized Applications (DApps)?

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

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.
US Close – Stock rebound in volatile trade, Crude prices crumble, Gold falls, Bitcoin follows Nasdaq rally

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

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

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

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

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

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 errors can lead to huge sums of money being stolen. For example, the DAO hack on the Ethereum blockchain took roughly 60 million dollars worth of ETH and even led to a hard fork of the Ethereum network. Since blockchain transactions are irreversible, making sure that a project's code is secure is essential. Blockchain technology's highly secure nature makes it difficult to retrieve funds and resolve issues after the fact, so it’s better to prevent vulnerabilities at all costs.   How do smart contract audits work? The process of a smart contract audit is fairly standard among audit providers. While each auditor's approach may differ slightly, the typical process is as follows: 1. Determine the scope of the audit. The smart contract and project specifications are defined by the project (their intended purpose) and the overall architecture. A specification helps the audit team understand the project's goals when writing and using the code. 2. Provide an initial quote based on the amount of work needed. 3. Run tests. Their exact nature will change depending on the auditing team, their analysis tools, and their methods. Usually, both manual and automated tests are carried out. 4. Create a first draft of the report with errors found and provide it to the project team for feedback and follow-up fixes. 5. Publish the final report, considering any action taken by the team to address raised issues.   Smart contract audit methods Gas efficiency  Smart contract audits don't focus only on blockchain security. They also look at efficiency and optimization. Some contracts make a complicated series of transactions to complete their intended function. With gas fees on networks like Ethereum being relatively costly, efficient contracts can save a lot on transaction costs. Optimizing their performance is also an indicator of the developer's skill. Inefficient steps provide more points for failure and should be avoided. When gas costs are high, smart contracts may fail to execute, even more so when a low gas limit is used. Contract vulnerabilities Most of the work in audits involves checking contracts for security vulnerabilities. While some issues can be easy to see, many exploits involve advanced techniques and strategies to drain funds. For example, market manipulation can be used with weak smart contracts to conduct flash loan attacks. To find these issues, auditors start the break testing process and simulate malicious attacks on the smart contract. Common vulnerabilities include: 1. Reentrancy issues: When a smart contract makes an external call to another external contract before any effects are resolved. The external contract can then recursively call the original smart contract and interact with it in ways it shouldn't be able to, as the original contract’s balance hasn't yet been updated. 2. Integer overflows and underflows: When a smart contract carries out an arithmetic operation, but the output exceeds the storage capacity (usually 18 decimal places). This can lead to incorrect amounts being calculated. 3. Front running opportunities: Badly structured code can provide forewarning of market purchases or sales. This, in turn, can allow others to use the information and trade on it for their own benefit. Platform security flaws Most audits include looking at the network hosting the contracts and even the API used to interact with the DApp. A project may be vulnerable to a DDoS attack or have its website UI compromised, meaning users will actually connect their wallets to malicious blockchain applications.   What is an audit report? The audit report is provided at the end of the audit process. For transparency, projects are expected to share their findings with the community. Most reports categorize issues by severity, such as critical, major, minor, etc. The report will also list the issue's status, as projects are given time to resolve them before the final report's release. Along with an executive summary, a standard report will contain recommendations, examples of redundant code, and a full breakdown of where coding errors exist. Time is given to the project to act on the report's findings before the final version is released.   Where can I get a smart contract audit? A number of smart contract audit services have become well-known for their service. Two are particularly popular, and getting an audit from them will require an initial quote and handover of information, CertiK CertiK is an industry leader when it comes to smart contract audits. Hundreds of projects have audited their smart contracts with them. PancakeSwap, BSC's largest Automated Market Maker (AMM) is one example. Below is a section of Certik’s audit on PancakeSwap.     Also, the vast majority of projects supported by Binance Labs have audited their contracts with CertiK. CertiK releases a leaderboard of audited projects that allows you to compare each one, along with a safety score. Note that, apart from Ethereum, CertiK also covers BSC and Polygon projects.     ConsenSys Diligence Run by Joseph Lubin, a co-founder of Ethereum, ConsenSys is one of the cryptocurrency industry's biggest names in blockchain development. Under ConsenSys Diligence, the company offers Ethereum smart contract audits. They also provide an automated service that checks Ethereum Virtual Machine (EVM) contracts for commonly found mistakes.   How much does a smart contract audit cost? The exact cost of an audit depends on the number of smart contracts to be checked. Typically, an audit will run into thousands of dollars. A particular large project can easily cost over $10,000. The audit company running your audit and its reputation will also affect how much you pay.     Closing thoughts Fortunately for investors and users, smart contract audits have become a golden standard. However, when every project has one, it’s no longer an easy indicator of value. This is why it’s incredibly important to read the audit yourself. Even if you don’t have the technical knowledge, it’s helpful to take a look at the comments and severity of potential issues. When you do come across an audit, you should now at least have an easier time understanding its contents. As always, make sure that any investment decision looks at the whole picture and takes all information into account.
Decentralized Autonomous Organisation - Another Addition To Our Personal Dictionaries

Decentralized Autonomous Organisation - Another Addition To Our Personal Dictionaries

Binance Academy Binance Academy 23.02.2022 14:33
TL;DR A DAO is a type of governance commonly used for DApps, projects, and crypto-investment funds. DAOs are popular for their openness and decentralization, as well as their ability to work with self-executing smart contracts. Creating a DAO needs a technical solution to manage your proposals and votes. There’s a variety of open-source options available based on your needs.   Introduction With crypto’s roots in decentralization, DAOs are a popular governance model in the blockchain space. Using a bit of technical knowledge and some tools, you can get a DAO up and running quickly. But first, you better have a good plan and a community to support you. Let’s run through the very basics of what’s needed and how you can set up your DAO.     What is a DAO? DAO stands for Decentralized Autonomous Organization. As the name suggests, a DAO is an organization automated by computer code and open for anyone to participate (as long as they meet some basic requirements). Being autonomous means that smart contracts help run the majority of the processes without human interference. A DAO is created and managed by a community, which collectively manages its funds and projects. DAOs became well-known with Ethereum’s 2016 venture capital fund “The DAO”. Unfortunately, by three weeks into the token sale, the project suffered an attack due to a vulnerability in the code. The funds were later restored due to a hard fork. Despite the early challenges, the DAO concept has improved over the years, and is now one of the most popular governance models for Decentralized Finance (DeFi) projects. Each DAO is different, but most follow the same basic principles. Anyone holding the DAO’s governance token has voting power proportional to the number of tokens they own. Holders can also make proposals for changes in how the DAO operates.   Why should I create a DAO? For crypto projects, DAO’s have some significant advantages. Perhaps the most important is the model’s reliance on smart contracts. These on-chain pieces of code make DAOs less reliant on human input to operate. For example, a proposal could have its results posted on-chain and automatically trigger a proposed change. A new proposal can’t be censored, and votes cannot be technically rigged. DAOs are useful ways to organize communities, especially if they are mostly anonymous. There is often no accountability to a real identity, and you have to trust people you don’t know. A DAO allows them to organize themselves efficiently with technology that guarantees integrity. It’s also easier than creating a traditional organization or entity as many projects have international teams. Finally, a DAO is a cheap option for its functionality in organizing people. You can set one up for free or pay a small fee to do so. Understand carefully that a DAO will hold you accountable for its decisions. By decentralizing power, you no longer will have total control over your project. If you decide to ignore governance decision-making, there will almost always be negative consequences.   What does a DAO need? Among other things, a successful DAO should cover at least the five points below: 1. A DAO needs a purpose. DAO’s are simply a way of organizing projects or funds. Without a good underlying project and reason, your DAO will have nothing to run. 2. A DAO needs a voting mechanism. This is the primary way people interact with the DAO and make changes. There are multiple ways to do this. You could create your own voting mechanism or use a third-party provider, as we discuss later. Your DAO may even vote to change the mechanism later, but you need to start with something. 3. A DAO needs a governance token or share system. How will people prove their right to an opinion in the DAO? A governance token is very common, and the token often might also be a utility token. A shares system is more common to funds where users deposit cryptocurrencies with the DAO to be invested. 4. A DAO needs a community. Decentralization gets stronger as more people join and participate in the governance of your DAO. This way, power is spread across more stakeholders. 5. A DAO needs a way to manage its funds. Most DAOs will have a treasury or access to some crowdfunding. This is usually held in a multi-signature wallet, which can only be used if all key participants agree.   How do I create my DAO?  On the technical side, you’ll need a mechanism for handling votes and proposals. There is a selection of open-source solutions available to use. Aragon is one popular choice for the Ethereum blockchain. Snapshot is another that works over multiple blockchains. All of them will provide roughly the same structure, but the ways they do it can differ. Some DAO systems work with on-chain polling and others off-chain. The exact one to choose will depend on what your DAO deems important. Don’t forget to have enough crypto to cover your transaction fees when deploying your DAO to a blockchain.   Aragon Aragon allows you to create a DAO organization on Ethereum, Polygon, Andromeda, or Harmony. The project provides open-source software through its Aragon client enabling the creation of customized DAOs. The project is also run via a DAO and has its own non-profit organization to manage Aragon’s raised funds. Creating an Aragon-based DAO is quite simple. You’ll need to: 1. Own an Ethereum Name Service domain. 2. Make sure you have enough crypto to pay the DAO creation fee (0.2 ETH plus gas fees). 3. Create an organization linked to the ENS domain through the Aragon DApp. There are several preset organization structures you can use. 4. Configure your settings, such as vote duration and percentage support needed, and then launch the DAO. You can find further information in Aragon’s FAQ.   Snapshot Snapshot is a customizable off-chain voting mechanism. It uses digital signatures via wallets to cast votes based on a snapshot of token owners. A certain block is chosen, and all token holders and/or stakers have their holdings noted. This stops users from purchasing more tokens to influence an open vote. Keeping votes off-chain works well for multi-chain projects where users have governance tokens across many blockchains. To create your voting system on Snapshot, you’ll need to: 1. Own an ENS domain. This must be on the Ethereum mainnet regardless of what blockchain your project operates on. 2. Link Snapshot to your ENS domain. 3. Customize your space’s settings, such as admins, voting power strategies, terms, etc. 4. Verify your space. This will include having at least 1,000 members and proof of ownership of the related project. You can find full instructions on Snapshot’s docs.   DAOstack Alchemy DAOstack Alchemy is a tool for creating DAOs on Ethereum and Gnosis Chain (formerly known as xDAI). Through their UI, you can create a fairly simple DAO, add DAO members, and open your organization. As of writing, the fee for setting up a DAO on Ethereum is roughly 0.2 Ether (ETH), but you don’t need an ENS in this case. To create a DAOstack DAO, connect your wallet to their DApp, go through the four steps shown, and pay your fee. You will need roughly 0.2 ETH to successfully deploy the DAO.   Examples of successful DAOs If you need some inspiration on the rules and set-ups that work best, take a look at some of the established DAOs in crypto. Some run incredibly detailed and open organizations that operate like large businesses. A few examples to look at include: MakerDAO MakerDAO is one of the oldest, most successful DAOs on the market. The organization manages the crypto-collateralized DAI stablecoin. They split proposals into Governance Polls for non-technical decisions and Executive Votes for smart-contract changes. Anyone holding MKR, the project’s governance DAO token, can participate.  Aave Aave is a DeFi lending platform on Ethereum that lets holders of the ERC-20 token AVVE or staked AAVE participate in its DAO. Along with project changes, Aave governance also votes on new projects built on the protocol and Aave Grants to fund ideas. Uniswap Uniswap is a multi-chain Automated Market Maker (AMM) that has inspired a generation of DeFi projects. It’s one of the largest decentralized exchanges, and UNI holders can vote on and create proposals. To submit a new proposal, you need to hold at least 0.25% of the UNI’s total supply. To encourage healthy discussion, there is a governance forum for community members to debate changes.     Conclusion Creating your own DAO is easy to do technically, but running one successfully is difficult. As you’ve seen, many simple tools exist to get you running quickly. However, the key to creating your DAO will be your project and community.
SolScan - Many Of Investors Probably Don't Know This Term

SolScan - Many Of Investors Probably Don't Know This Term

Binance Academy Binance Academy 22.02.2022 11:46
TL;DR SolScan is an alternative Solana blockchain explorer. It gives you access to blockchain data regarding transactions, contracts, accounts, and more. If you regularly use Solana or do any troubleshooting, understanding how to use a blockchain explorer is extremely useful. SolScan also has DeFi and NFT dashboards and an analytics platform to browse. You can also use their API to create customized feeds for yourself. All of these are found in the header of the website.   Introduction Solana is a Proof of Stake (PoS) blockchain where project developers can build DApps, tokens, and smart contracts. Like any other active chain, users need an intuitive way to access the blockchain data. Similar to BscScan and EtherScan, Solana also has a dedicated block explorer called SolScan. Let's run through its most important features and a few basic tutorials.     What is SolScan? SolScan is a blockchain explorer used to search through information on the Solana blockchain. It’s a popular alternative to the official Solana explorer. SolScan turns complex transactional data into something that can be easily read. The block explorer provides access to anything recorded on-chain, including crypto transactions, addresses, smart contracts, blocks, tokens, and more. It’s free to use and doesn’t require an account, but you can create one and log in for enhanced functionality.   Why should I use SolScan? Using a blockchain explorer is essential for anyone transacting with a network. If you aren’t sure where your staked funds have gone, or perhaps a transaction is still pending, you can use SolScan to find out what’s happened. All information on SolScan comes directly from the Solana blockchain, so you can be sure it’s accurate. Using SolScan or any blockchain explorer will help you understand the mechanics of DApps you interact with and the transactions you make. SolScan uses the same format as EtherScan, making it easier to understand. Many users prefer its layout to SolScan’s official explorer. It’s all free to use and contains several useful tools, lists, and analytical graphs. The explorer also contains a set of public APIs that can leverage real-time data from SolScan into custom, third-party applications, and tools.   How to look up transactions and addresses on SolScan? One of SolScan’s most-used features is the search function for transactions and addresses. With the correct hash, you can quickly access a large amount of information. This includes transaction fees, confirmations, timestamps, addresses involved, and more. Transactions 1. Every Solana transaction is recorded on the Solana mainnet with a signature. This is a long string of numbers and letters that looks like this:  5JLcGJQfZjEEuh1bSDqyw2iEfLuFRoYRJY1paoSwrZC8c8zZFW3VqvxsJgjW3bsUjTrpEUDEtvs83PxsuR6hUWqz 2. Copy and paste the signature into SolScan’s search bar and hit enter.     3. You’ll now see all available information about the transaction you searched. This is divided into three categories: [Overview], [SOL Balance Change], and [Token Balance Change].     4. The [Overview] category will have most of the details you need. Let’s go through the list: Signature An alphanumeric string uniquely assigned to each transaction. It’s an identifier similar to Ethereum’s Transaction Hash or TxID. Block The block number your transaction was processed in. These numbers are sequential and indicate your transaction’s placement within the blockchain’s history. Timestamp The timestamp associated with the block in which your transaction was processed. Result The transaction’s confirmation status. Signer The wallet address that initiated the transaction. Fee The fee paid for the transaction. Main Actions An overview of the activities associated with the transaction. Previous Block Hash The alphanumeric hash to identify the previous block. Instruction Details A detailed log of the transaction’s actions. Program Log A detailed log of the instructions/actions results.   5. For further information, the [SOL Balance Change] and [Token Balance Change] tabs provide data on the transaction’s token balance changes for all parties involved. Addresses A similar method can be used to find out more about an individual address. You can then check a detailed history of the address's activities. This can give you an overview of the transactions and smart contract interactions of a particular wallet. 1. Find the Solana address you want to look at. It’s shorter than a signature and looks something like this:  138KHwTqKNWGLoo8fK5i8UxYtwoC5tC8o7M9rY1CDEjT 2. Copy and paste the address into SolScan’s search bar and hit Enter.     3. You’ll now see all available information about the account you searched for. The [Overview] section shows current account balances, while the bottom tabs deal mainly with transaction history.     How to find tokens on SolScan? Tokens are easily verifiable on SolScan and you can get a full display of their details. You just need to: 1. Copy and paste the token address into SolScan’s search bar and hit enter. In this example, we’ve used a wrapped version of Bitcoin (BTC), but you can also use a wrapped version of Ethereum (ETH) or any other SPL-token in the Solana network. The token address looks like this:  9n4nbM75f5Ui33ZbPYXn59EwSgE8CGsHtAeTH5YFeJ9E 2. If you entered the address correctly, you would see the following information.     Tokens Fully Diluted Market Cap This is the max total supply multiplied by the token’s current price. It’s called diluted because it also includes locked tokens. Max Total Supply The total number of tokens that will ever exist for a particular cryptocurrency, whether previously mined or issued in the future. Holders The number of addresses holding the token. Social Channels Links to the token’s official social media channels. Token name The name and ticker of the token in the format: [token name (TICKER)]. Token address Unique alphanumeric address assigned as an identifier for each token. Owner Program A class type and unique ID indicating the specific owner program responsible for reading and writing data to the blockchain. Authority The account (usually multi-signature) that has authority to validate transactions within the network. Decimals How divisible a single token is (the number of decimals allowed). Tags Descriptive tags used to indicate the nature of the token. It can be used to find similarly categorized tokens. Transactions A complete and sequentially ordered list of all token transactions. Holders A full list of all accounts holding the token ordered by total quantity held and percentage share. Analysis Graphs on token distribution and holders. Markets A list of all known markets and pairs supporting the token.   How do I find Solana’s active accounts? 1. You can find out the number of active accounts and other key blockchain metrics by clicking [Analytics].     2. The SolScan analytics page has a wide range of information about network nodes, transactions per second (TPS), new tokens, new NFTs, and more. Under the [Accounts] header, you can find the number of daily active wallets.     3. Note that you can select different periods at the top right corner.     How to access DeFi dashboards on SolScan 1. Some of the largest DEXs in the Solana ecosystem have dashboards built into the Solana block explorer. You can find them quickly under the [Defi] tab.     2. Let’s take a look at Orca. This dashboard shows basic information on Total Value Locked (TVL), volume, and active trading pairs available in their liquidity pools.     How to access the NFT dashboard on SolScan 1. SolScan makes it easy to see new NFTs, trades, and collections with the NFT dashboard. You can find the section in the website header.     2. The NFT dashboard will let you search through any NFT available on Solana. The [Collections] tab will give you a list of NFT projects based on volume. The [Trades] tab will show the most recent sales, while the [New NFTs] will list the most recent mints.       Closing thoughts Whether you want to inspect your latest Metaverse NFTs, investigate a node, or check the wallets of a new startup, you will need a Solana block explorer. This tool is an integral part of any blockchain network’s ecosystem. SolScan has become one of the most used within the Solana community, so understanding its layout and UI can certainly help.
(WETH) Wrapped Ether Explained. What Is It?

(WETH) Wrapped Ether Explained. What Is It?

Binance Academy Binance Academy 21.02.2022 11:58
TL;DR Wrapped Ether (WETH) is a token pegged to Ether (ETH). WETH is used in several platforms and DApps that support ERC-20 tokens. While ETH is used to pay for network transaction fees, it doesn't have the same functionality as ERC-20 tokens.  You can easily convert ETH into WETH through a process known as wrapping. You can also convert WETH back into ETH at any time. Both wrapping and unwrapping follow a 1:1 ratio, meaning there are no extra costs apart from transaction fees.  You can wrap your ETH manually by interacting with the WETH smart contract, which will store your ETH and give you back the exact same amount of WETH. Ethereum's DeFi ecosystem is large, and using WETH provides more opportunities for staking and investing. There are many versions of WETH, but some are more popular than others. You can even find wrapped ETH on other blockchains to use in their ecosystems. Popular uses for WETH include NFTs trading, providing liquidity to liquidity pools, and crypto lending.   Introduction If you use Ethereum, most tokens you trade and invest with are likely to use the ERC-20 token standard. Using this technical standard has become a popular option for Decentralized Applications, wallets, and projects as it offers practicality to most users. However, this fact has presented a problem for Ethereum's native coin, Ether.  Ether doesn't follow the same rules as ERC-20 tokens, but there is a demand to use it in ERC-20 DApps too. Wrapped Ether is the solution to this problem, and you may have already come across it. Let's see why it's become a useful tool for investors and holders across so many projects and DApps.     What is wrapped Ether (WETH)? WETH is an ERC-20 token on Ethereum pegged to the price of Ether (ETH). While Ethereum's native token, ETH, can be used to pay gas fees, WETH can't. However, WETH has a wider range of use cases than ETH and is very popular in the Decentralized Finance (DeFi) ecosystem. MetaMask, TrustWallet, and pretty much any wallet in the Ethereum network will support WETH. Let's explore some of its use cases.   Why do we need to wrap ETH? At first, it might seem confusing why we have a token like WETH. Don't we already have ETH on the Ethereum blockchain anyway? The first thing to understand is that not every token on Ethereum is technically alike. The network allows developers to create new rules and standards for cryptocurrencies.  One example would be the ERC-721 format that gives us Non-Fungible Tokens (NFTs). These act very differently from Ether or ERC-20 tokens. Developers have a lot of room for customization when creating these digital assets. So while ETH can be used to pay for gas fees on Ethereum, ETH can't be used in every DApp. Most DeFi DApps nowadays accept ERC-20 tokens for investment and staking opportunities. If we want to add ETH to a liquidity pool or use it as collateral, it's much easier to have it in an ERC-20 version. This provides the most compatibility across the blockchain and saves time developing new smart contracts.   How to wrap Ether (ETH)? The process of generating WETH is simple - you send your ETH to a smart contract that then provides WETH in return. This means that all WETH created is backed up completely by ETH reserves. Your ETH is locked in the smart contract and can be exchanged back at any time for WETH. When your ETH is returned, the contract burns the supplied WETH. To wrap Ether, you can interact directly with the WETH smart contract, so that it takes your ETH and credits your wallet with WETH at a 1:1 ratio (you still have to pay for transaction fees). Converting back requires another smart contract interaction, but the process is pretty much the same.  However, it's much easier to swap another token for WETH using a crypto exchange. Let’s see how you can swap your ETH for WETH using the Uniswap DEX or directly through your Metamask wallet.   Wrapping ETH on Uniswap 1. Open Uniswap and connect your wallet. Make sure Ethereum is also selected as your network.       2. Select ETH in the top field and WETH in the bottom. If you click [Select a token], you should see WETH above the list.     3. Input the amount of ETH you want to convert to WETH and click the [Swap] button.      4. You’ll now need to confirm the transaction in your crypto wallet. Don’t forget that you’ll also need to pay gas fees, so make sure to have extra ETH at hand. Check the details of the transaction and click [Confirm].     5. Now you just need to wait for the transaction to be confirmed in the blockchain. The waiting time will depend on the current network traffic. If you are in a hurry, you can speed up the transaction (i.e., pay higher fees) to have it confirmed faster.   Wrapping ETH on MetaMask 1. Open your MetaMask wallet and make sure your network is [Ethereum Mainnet]. Next, click [Swap].     2. In the [Swap to] field, search for WETH.     3. Input the amount of ETH you want to swap and click [Review Swap].     4. You’ll now see a quote showing the conversion rate (which should be 1:1). Click [Swap] to finalize your transaction.     How to unwrap Ether (WETH)? As mentioned before, you can unwrap Ether manually by interacting with a smart contract. However, it’s simpler and safer to swap WETH for ETH. To do this, follow our previous Uniswap or MetaMask instructions, but make sure you are changing from WETH to ETH. You can also use Binance to convert your WETH. 1. Head to the Binance Convert & OTC Portal. Select WETH in the [From] field and ETH in the [To] field, and then click [Preview Conversion].     2. You’ll now see the details of the trade. Make sure to confirm them before accepting the swap. Note that Binance does not allow you to swap ETH for WETH using this method.   Can you wrap ETH on other blockchains? Other wrapped versions of ETH exist across major blockchains, which increases ETH’s interoperability. Using wrapped ETH on the BNB Smart Chain (BSC), for example, allows you to trade or use WETH within the BSC DeFi ecosystem. To do this, you'll need to withdraw ETH from Binance or another exchange into your BSC wallet. Make sure that your exchange supports the conversion from ETH to WETH before making the withdrawal. Alternatively, you can use a bridging service. These are third-party DApps that take crypto and store it on the origin blockchain, and then mint wrapped tokens at a 1:1 ratio on the destination blockchain. Bridging tokens often works fine, but note that moving tokens across blockchains may involve risks. There were cases where some bridges had their smart contracts compromised. If you want to bridge wrapped Bitcoin, wrapped Ethereum, or another token, carefully research the platform you use before using their bridging services.   How does wrapped ETH stay the same price as ETH? The key to maintaining WETH's peg with ETH is its 1:1 convertibility. If WETH were cheaper, people would buy it and convert it to the more expensive ETH to make a profit. This opportunity would increase WETH's demand and, therefore, price. If WETH were more expensive, people would purchase ETH and convert it to WETH to sell, increasing WETH's supply and lowering its price. These principles of supply and demand ensure that the peg remains relatively stable.   Which DeFi apps can I use WETH with? Ethereum has many DeFi DApps to explore that accept ERC-20 tokens. One option is to add WETH to a liquidity pool available on a Decentralized Exchange (DEX) like Uniswap. After providing liquidity, you'll begin to earn fees from users who swap their tokens using the pool. However, impermanent loss is always a possible risk that can lead to a decrease in the number of your deposited tokens. Using a pool with larger amounts of liquidity will reduce this risk. You could also begin lending out your WETH on a platform like Aave. Other users can borrow your tokens but must first provide collateral covering their loan. In return, you'll receive interest until you decide to remove your deposit.     Conclusion Ethereum has one of the oldest and most developed DApp ecosystems out there. This makes WETH a necessity, as many ETH holders want to use their ETH in DeFi projects. If you decide to start experimenting with WETH, we recommend buying it with ETH or other tokens, as it’s simpler and more convenient than interacting with the wrapping smart contracts.
Technical Analysis: Moving Averages - Did You Know This Tool?

Technical Analysis: Moving Averages - Did You Know This Tool?

Binance Academy Binance Academy 17.02.2022 07:46
Technical analysis (TA) is nothing new in the world of trading and investing. From traditional portfolios to cryptocurrencies like Bitcoin and Ethereum, the use of TA indicators has a simple goal: use existing data to make more informed decisions that will likely lead to desired outcomes. As markets grow increasingly more complicated, the last decades have produced hundreds of different types of TA indicators, but few have seen the popularity and consistent usage of moving averages (MA). Although there are different variations of moving averages, their underlying purpose is to drive clarity in trading charts. This is done by smoothing out the graphs to create an easily decipherable trend indicator. Because these moving averages rely on past data, they are considered to be lagging or trend following indicators. Regardless, they still have great power to cut through the noise and help determine where a market may be heading.   Different types of moving averages There are various different types of moving averages that can be utilized by traders not only in day trading and swing trading but also in longer-term setups. Despite the various types, the MAs are most commonly broken down into two separate categories: simple moving averages (SMA) and exponential moving averages (EMA). Depending on the market and desired outcome, traders can choose which indicator will most likely benefit their setup.   The simple moving average The SMA takes data from a set period of time and produces the average price of that security for the data set. The difference between an SMA and a basic average of the past prices is that with SMA, as soon as a new data set is entered, the oldest data set is disregarded. So if the simple moving average calculates the mean based on 10 days worth of data, the entire data set is constantly being updated to only include the last 10 days. It's important to note that all data inputs in an SMA are weighted equally, regardless of how recently they were inputted. Traders who believe that there's more relevance to the newest data available often state that the equal weighting of the SMA is detrimental to the technical analysis. The exponential moving average (EMA) was created to address this problem.   The exponential moving average EMAs are similar to SMAs in that they provide technical analysis based on past price fluctuations. However, the equation is a bit more complicated because an EMA assigns more weight and value to the most recent price inputs. Although both averages have value and are widely used, the EMA is more responsive to sudden price fluctuations and reversals. Because EMAs are more likely to project price reversals faster than SMAs, they are often especially favored by traders who are engaged in short-term trading. It is important for a trader or investor to choose the type of moving average according to his personal strategies and goals, adjusting the settings accordingly.   How to use moving averages Because MAs utilize past prices instead of current prices, they have a certain period of lag. The more expansive the data set is, the larger the lag will be. For example, a moving average that analyzes the past 100 days will respond more slowly to new information than an MA that only considers the past 10 days. That's simply because a new entry into a larger dataset will have a smaller effect on the overall numbers. Both can be advantageous depending on the trading setup. Larger data sets benefit long-term investors because they are less likely to be greatly altered due to one or two large fluctuations. Short-term traders often favor a smaller data set that allows for more reactionary trading. Within traditional markets, MAs of 50, 100 and 200 days are the most commonly used. The 50-day and the 200-day moving averages are closely watched by stock traders and any breaks above or below these lines are usually regarded as important trading signals, especially when they are followed by crossovers. The same applies to cryptocurrency trading but due to its 24/7 volatile markets, the MA settings and trading strategy may vary according to the trader profile.   Crossover signals Naturally, a rising MA suggests an upward trend and a falling MA indicates a downtrend. However, a moving average alone is not a really reliable and strong indicator. Therefore, MAs are constantly used in combination to spot bullish and bearish crossover signals. A crossover signal is created when two different MAs crossover in a chart. A bullish crossover (also known as a golden cross) happens when the short-term MA crosses above a long-term one, suggesting the start of an upward trend. In contrast, a bearish crossover (or death cross) happens when a short-term MA crosses below a long-term moving average, which indicates the beginning of a downtrend.    Other factors worth considering The examples so far have all been in terms of days, but that's not a necessary requirement when analyzing MAs. Those engaged in day trading may be much more interested in how an asset has performed over the past two or three hours, not two or three months. Different time frames can all be plugged into the equations used to calculate moving averages, and as long as those time frames are consistent with the trading strategy, the data can be useful. One major downside of MAs is their lag time. Since MAs are lagging indicators that consider previous price action, the signals are often too late. For instance, a bullish crossover may suggest a buy, but it may only happen after a significant rise in price.  This means that even if the uptrend continues, potential profit may have been lost in that period between the rise in price and the crossover signal. Or even worse, a false golden cross signal may lead a trader to buy the local top just before a price drop. These fake buy signals are usually referred to as a bull trap.   Closing thoughts Moving Averages are powerful TA indicators and one of the most widely used. The ability to analyze market trends in a data-driven manner provides great insight into how a market is performing. Keep in mind, however, that MAs and crossover signals should not be used alone and it is always safer to combine different TA indicators in order to avoid fake signals.
Smooth Love Potion - A Mysterious Token Explained

Smooth Love Potion - A Mysterious Token Explained

Binance Academy Binance Academy 16.02.2022 07:51
TL;DR Smooth Love Potion (SLP) is an ERC-20 gaming token in the popular NFT game Axie Infinity. It has an unlimited supply and is the primary source of income for Axie Infinity gamers. Within the Axie Infinity ecosystem, players can use SLP to breed digital pets called Axies, which can then be sold on the marketplace as NFTs to other players. SLP can also be traded on crypto exchanges like Binance. To earn SLP, players can complete daily quests, battle other players in the Arena (PvP), or fight in the Adventure mode (PvE). There is a limited amount of SLP players can earn per day, and the SLP used for breeding will be burned once a new Axie is created. Learn more on Binance.com   Introduction Amidst the boom of NFTs, blockchain technology has opened up a whole new world of possibilities. More companies are creating their gaming metaverses on the blockchain, and many of these allow players to earn money while playing. One of them is Axie Infinity, which has been growing in popularity since 2018. Axie Infinity rewards consist of its own ERC-20 token, Smooth Love Potion (SLP). As a cryptocurrency, users can buy and sell SLP tokens on crypto markets. Within the game, SLP can be used for breeding new Axies, which can be traded as NFTs on the Axie Infinity marketplace.     What is Axie Infinity? Axie Infinity is a play-to-earn NFT game where players battle with each other using the unique game characters called Axies. You can think of an Axie as a Pokémon. Each has a different class, body parts, and stats. They are non-fungible tokens (NFTs) that can be stored in an Ethereum wallet or a Ronin Wallet. The Axie Infinity ecosystem is built on the Ethereum blockchain. To play the game, you need to assemble a team of Axies. You can purchase Axies on the marketplace or borrow from other players in a scholarship program. You can also breed new Axies using Smooth Love Potion tokens (SLP). SLP tokens can be earned by playing Axie Infinity, and the top-ranked players are also rewarded with AXS tokens. In addition, AXS holders can participate in the governance of the Axie Infinity ecosystem.   What is Smooth Love Potion (SLP) and how does it work? As mentioned, Smooth Love Potion (SLP) is the native cryptocurrency of the Axie Infinity game. Previously known as “Small Love Potion”, SLP is an ERC-20 gaming token with an unlimited supply. As of November 2021, SLP’s market cap reached $197 million USD with a circulating supply of over 3 billion. SLP can be earned through completing daily quests or engaging in battles or adventures in the game. After attaining a certain amount of SLP coins, gamers can start to breed their unique Axies. The cost for breeding each Axie differs, as it depends on the breed counts of the pre-existing Axies (the parents). Axies can breed a maximum of 7 times each. As the breed count gets higher, more SLP is required. SLP is an altcoin that has a burning mechanism. After each Axie breeding, the SLP tokens used will be burned forever. As players can only farm a limited amount of SLP in the game per day, the token demand is expected to grow as players try to get ahead of the breeding game. The SLP price varies according to the forces of supply and demand. It reached an all-time high of $0.41 in July 2021. Within the Axie Infinity metaverse, SLP is more than just a game currency for breeding new digital pets. It is also a reward token for players when they reach new levels or win fights with their Axies. On the other hand, holders can speculate on the SLP price and trade it on crypto exchanges like Binance. SLP is also available on the Uniswap liquidity pools. SLP is now part of the play-to-earn movement that lets players earn an income by playing Axie Infinity.   How to earn SLP on Axie Infinity? SLP can be obtained by completing daily quests, competing with players in Arena matches (PvP), or battling monsters in the Adventure mode (PvE). 1. Complete daily quests As of November 2021, the daily quest gives an extra 25 SLP to players that perform the daily check-in, complete 10 adventure mode levels, and win 5 arena matches.     2. Battle in Arena (PvP) Arena (PvP) is the main source of SLP rewards in the game. The PvP Arena matches players against each other based on their rankings (MMR). Every Arena match will use one energy, and every win will provide an SLP reward, according to the player’s MMR. The higher your ranking, the more SLP you get per win. Note that you need an MMR above 800 to get SLP rewards.     If the energy is depleted, players can still play PvP to raise their MMR, but they won’t get SLP rewards. You can check how much energy you have from the main menu at the top left of the screen. The amount of energy you have depends on the number of Axies you hold: From 3 to 9 Axies: 20 energies. From 10 to 19 Axies: 40 energies. 20 Axies or more: 60 energies.   3. Battle in the Adventure Mode (PvE) Adventure is a single-player mode in the game. It consists of 36 levels with increasing difficulty and SLP rewards. You can earn up to 50 SLP daily from adventures. It doesn’t require energy to start in adventure mode, you’ll only need them if you wish to gain experience points for your Axies. Compared to PvP, PvE requires less time and effort to farm SLP. However, you can only receive one-time SLP rewards for each adventure level. you can play the same level again to fulfill the daily quest SLP reward requirement, but you won’t receive any extra SLP rewards. To earn more SLP, you can also defeat the bosses in certain levels for one-time SLP rewards.     How to claim SLP from Axie Infinity to Ronin Wallet? After earning SLP from the game, you’ll be able to claim it manually every 14 days.  1. Log in to your Axie Infinity account and connect your Ronin Wallet. Click [Claim Tokens] from the menu to see the amount of SLP you can claim and when you’ll be able to do it. Then, click [Claim SLP] to transfer the SLP to your Ronin Wallet. 2. Go back to your Axie Infinity account dashboard and make sure your Ronin Wallet is connected. Click [Claim Tokens] - [Claim SLP]. You will see the claimed SLP in your Ronin Wallet.     3. If you want to sell the SLP, you can transfer it to your MetaMask or another Ethereum wallet using the Roning Bridge. Alternatively, you can send the SLP directly to your Binance Ronin Wallet through the RON network. This will save you some money as you can avoid paying ether (ETH) gas fees. Note that you can also trade your SLP for other cryptocurrencies using the Katana decentralized exchange. As of writing, the swap function supports AXS, WETH, USDC, and SLP.   How to buy SLP on Binance? To breed more Axies, you’ll probably need to acquire more SLP tokens. Apart from earning by playing Axie Infinity, you can also buy SLP from crypto exchanges like Binance. Then you can transfer them to your Ronin Wallet via the Ronin (RON) network. 1. Log in to your Binance account and go to [Trade]. Choose either the [Classic] or [Advanced] trading mode to start. In this tutorial, we will select [Classic]. 2. Next, type “SLP” on the search bar to see a list of the available SLP trading pairs on Binance. We will use SLP/BUSD as an example.     3. Under [Spot], choose the order type and enter the amount you want to buy. Click [Buy SLP] to place the order and you will see the purchased SLP in your Spot Wallet. From there, you can hit [Withdraw] to transfer it to an external wallet.       Closing thoughts Axie Infinity is one of the most popular DeFi projects nowadays. As a gaming token in a play-to-earn blockchain game, SLP offers players a simple and interactive way to earn extra income. In fact, the SLP rewards have enabled many communities in countries like the Philippines to improve their fiat income amidst the COVID-19 economic crisis.
Polkadot (DOT) Explained - A Pinch Of Origins And History

Polkadot (DOT) Explained - A Pinch Of Origins And History

Binance Academy Binance Academy 15.02.2022 14:19
TL;DR Polkadot positions itself as the next-generation blockchain protocol, capable of connecting multiple specialized chains into one universal network. With a strong focus on building infrastructure for Web 3.0 – and founded by the Web3 Foundation – Polkadot aims to disrupt Internet monopolies and empower individual users.  Learn more on Binance.com   Introduction Blockchain has been around since the inception of Bitcoin. While it has been called a groundbreaking technology, there are also certain drawbacks to take into account. Individual blockchains are unable to communicate with another. Introducing interoperability between different chains could lead to the exchange of data, and ultimately more powerful applications and services. Developers have tried to "bridge" blockchains in the past. Doing so allows chain A to work with chain B and vice versa. However, connecting many (think hundreds or thousands) blockchains at the same time remains a pressing issue. Polkadot's team, and by extension, the Web3 Foundation, is confident that an elegant solution can be created over the coming years.   What is Polkadot? Described as an open-source protocol built for everyone, Polkadot claims to be the next step in the evolution of blockchain technology. It’s a concept initially envisioned by Dr. Gavin Wood, co-founder of Ethereum. The team wants to focus its efforts on security, scalability, and innovation. To do so, the necessary infrastructure needs to be created to not only support new ideas and concepts but also ensure that proper interoperability can be achieved. An individual blockchain in the Polkadot ecosystem is called a parachain (parallel blockchain), while the main chain is called the Relay Chain. The idea is that parachains and the Relay Chain can easily exchange information at all times. You could think of parachains as being similar to individual shards in the planned implementation of ETH 2.0. Any developer, company, or individual can spin up their custom parachain through Substrate, a framework for creating cryptocurrencies and decentralized systems. Once the custom chain is connected to the Polkadot network, it becomes interoperable with all other parachains on the network.  Building cross-chain applications, products, and services should become a lot more straightforward with this design. Cross-blockchain transfers of either data or assets have not been possible on a large scale before. Securing and validating the data across these different parachains is done through network validators, where a small set of these validators can secure multiple parachains. These validators will also ensure transactions can be spread across multiple parachains to improve scalability.   The benefits of Polkadot There can be many reasons for developers to explore the Polkadot ecosystem. Due to the limited nature of current blockchains, it’s evident there are a few core issues to address: scaling, customization, interoperability, governance, and upgradeability. On the scaling front, Polkadot checks a lot of boxes. It acts as a multichain network, allowing it to process transfers in parallel across different individual chains. This removes one of the biggest roadblocks associated with blockchain technology today. Parallel processing is a significant improvement and can pave the way for broader global blockchain adoption. Those who seek out customization can tap into some other features provided by Polkadot. As of now, there is no "one blockchain infrastructure to rule them all". Every project has its individual needs and requirements, and Polkadot allows every individual chain to have its design optimized for that specific functionality. With the help of Substrate, developers can efficiently adapt their individual chains to suit the needs of the project. On the interoperability front, having projects and applications share data seamlessly is a big factor. While it remains to be seen what type of products and services this will create, there are many possible use cases. It can create an entirely new financial ecosystem, with every individual parachain taking care of one particular aspect at a time. Any community associated with a specific parachain will be able to govern their network as they see fit. Moreover, all communities are crucial to the future governance of Polkadot as a whole. Gathering feedback from the community can yield valuable insights that evolve projects over time. Also, Polkadot makes it very easy to upgrade individual parachains. There is no need for hard forks, as this can splinter communities. Instead, the native chain can be upgraded in a frictionless manner.   The DOT token explained Similar to most other blockchain infrastructure projects, Polkadot has its own native token. Known as DOT, it serves as the network token, just like ETH is the token for Ethereum and BTC is the token of Bitcoin. Several use cases exist for this token. First of all, it grants token holders with governance rights of the entire Polkadot platform. This includes determining network fees, voting on overall network upgrades, and the deployment or removal of parachains. DOT is also designed to facilitate network consensus through staking. Similar to other networks that involve staking, all DOT holders are incentivized to play by the rules at all times. How come? Well, if they don’t, they could lose their stake. The third option is to use DOT for bonding. This is required when new parachains are added to the Polkadot ecosystem. During a bonding period, the bonded DOT is locked. It’s released once the bond duration has ended and the parachain is removed from the ecosystem.    Staking and bonding on Polkadot Polkadot's approach to interoperability goes well beyond just the exchange of data and assets. It is also a way to introduce new concepts, such as incentivizing honest token staking and bonding tokens. Staking tokens on a blockchain network is not a new concept. Known as Proof of Stake (PoS), this consensus model works by rewarding users for staking coins on the network. With Polkadot, honest stakers are rewarded, while bad actors can lose their entire stake. As we’ve mentioned, every new parachain is added by bonding DOT tokens. Bonding refers to committing tokens to the network for a specific period of time. Chains that aren’t useful or projects that are no longer maintained will be removed, and their bonded tokens returned.   Closing thoughts On paper, there are many things that can make Polkadot attractive to developers. It’s an ecosystem capable of catering to individual coders, as well as small businesses and large corporations. Being able to deploy custom blockchains to suit specific needs, and upgrade them without hassle is a novel concept that could be valuable for the entire crypto space. That being said, Polkadot remains a very young ecosystem. While dozens of projects may be under development, it will take some time until the first big projects launch. According to PolkaProject, there are hundreds of projects being developed, spanning from wallets to infrastructure projects, tooling, DApps, and more. As far as DOT is concerned, the Polkadot creators have claimed this is not a token designed for speculation. Although it has a monetary value on exchanges, it’s primarily designed for the purposes outlined above. Got more questions about Polkadot and blockchain? Check out our Q&A platform, Ask Academy, where the Binance community will answer your questions.
US IPO Activity Chart

RSI Indicator - A Very Popular "Tool" Linked With Technical Analysis

Binance Academy Binance Academy 14.02.2022 12:41
The Relative Strength Index Indicator Technical analysis (TA) is, essentially, the practice of examining previous market events as a way to try and predict future trends and price action. From traditional to cryptocurrency markets, most traders rely on specialized tools to perform these analyses, and the RSI is one of them. The Relative Strength Index (RSI) is a TA indicator developed in the late 1970s as a tool that traders could use to examine how a stock is performing over a certain period. It is, basically, a momentum oscillator that measures the magnitude of price movements as well as the speed (velocity) of these movements. The RSI can be a very helpful tool depending on the trader profile and their trading setup. The Relative Strength Index indicator was created by J. Welles Wilder in 1978. It was presented in his book New Concepts in Technical Trading Systems, along with other TA indicators, such as the Parabolic SAR, the Average True Range (ATR), and the Average Directional Index (ADX). Before becoming a technical analyst, Wilder worked as a mechanical engineer and real estate developer. He started trading stocks around 1972 but wasn't very successful. A few years later, Wilder compiled his trading research and experience into mathematical formulas and indicators that were later adopted by many traders around the world. The book was produced in only six months, and despite dating back to the 1970s, it is still a reference to many chartists and traders today. Learn more on Binance.com   How does the RSI indicator work?  By default, the RSI measures the changes in an asset's price over 14 periods (14 days on daily charts, 14 hours on hourly charts, and so on). The formula divides the average gain the price has had over that time by the average loss it has sustained and then plots data on a scale from 0 to 100.  As mentioned, the RSI is a momentum indicator, which is a type of technical trading tool that measures the rate at which the price (or data) is changing. When momentum increases and the price is rising, it indicates that the stock is being actively bought in the market. If momentum increases to the downside, it is a sign that the selling pressure is increasing. The RSI is also an oscillating indicator that makes it easier for traders to spot overbought or oversold market conditions. It evaluates the asset price on a scale of 0 to 100, considering the 14 periods. While an RSI score of 30 or less suggests that the asset is probably close to its bottom (oversold), a measurement above 70 indicates that the asset price is probably near its high (overbought) for that period. Although the default settings for RSI is 14 periods, traders may choose to modify it in order to increase sensitivity (fewer periods) or decrease sensitivity (more periods). Therefore, a 7-day RSI is more sensitive to price movements than one that considers 21 days. Moreover, short-term trading setups may adjust the RSI indicator to consider 20 and 80 as oversold and overbought levels (instead of 30 and 70), so it is less likely to provide false signals.   How to use RSI based on divergences Besides the RSI scores of 30 and 70 - which may suggest potentially oversold and overbought market conditions - traders also make use of the RSI to try and predict trend reversals or to spot support and resistance levels. Such an approach is based on the so-called bullish and bearish divergences. A bullish divergence is a condition where the price and the RSI scores move in opposite directions. So, the RSI score rises and creates higher lows while the price falls, creating lower lows. This is called a "bullish" divergence and indicates that the buying force is getting stronger despite the price downtrend. In contrast, bearish divergences may indicate that despite a rise in price, the market is losing momentum. Therefore, the RSI score drops and creates lower highs while the asset price increases and creates higher highs. Keep in mind, however, that RSI divergences are not that reliable during strong market trends. This means that a strong downtrend may present many bullish divergences before the actual bottom is finally reached. Because of that, RSI divergences are better suited for less volatile markets (with sideways movements or subtle trends).   Closing thoughts There are several important factors to consider when using the Relative Strength Index indicator, such as the settings, the score (30 and 70), and the bullish/bearish divergences. However, one should always keep in mind that no technical indicator is 100% efficient - especially if it is used alone. Therefore, traders should consider using the RSI indicator along with other indicators in order to avoid false signals.
Technical Analysis: Moving Averages - Did You Know This Tool?

Candlestick Charts Explained. How To Read Them?

Binance Academy Binance Academy 14.02.2022 08:49
Introduction As a newcomer to trading or investing, reading charts can be a daunting task. Some rely on their gut feeling and make their investments based on their intuition. While this strategy might temporarily work in a bullish market environment, it most likely won’t in the long run.  Essentially, trading and investing are games of probabilities and risk management. So, being able to read candlestick charts is vital to almost any investment style. This article will explain what candlestick charts are and how to read them.   Learn more on Binance.com   What is a candlestick chart? A candlestick chart is a type of financial chart that graphically represents the price moves of an asset for a given timeframe. As the name suggests, it’s made up of candlesticks, each representing the same amount of time. The candlesticks can represent virtually any period, from seconds to years.  Candlestick charts date back to about the 17th century. Their creation as a charting tool is often credited to a Japanese rice trader called Homma. His ideas were likely what provided the foundation for what is now used as the modern candlestick chart. Homma’s findings were refined by many, most notably by Charles Dow, one of the fathers of modern technical analysis. While candlestick charts could be used to analyze any other types of data, they are mostly employed to facilitate the analysis of financial markets. Used correctly, they’re tools that can help traders gauge the probability of outcomes in the price movement. They can be useful as they enable traders and investors to form their own ideas based on their analysis of the market.   How do candlestick charts work? The following price points are needed to create each candlestick: Open — The first recorded trading price of the asset within that particular timeframe. High — The highest recorded trading price of the asset within that particular timeframe. Low — The lowest recorded trading price of the asset within that particular timeframe. Close — The last recorded trading price of the asset within that particular timeframe.       Collectively, this data set is often referred to as the OHLC values. The relationship between the open, high, low, and close determines how the candlestick looks. The distance between the open and close is referred to as the body, while the distance between the body and the high/low is referred to as the wick or shadow. The distance between the high and low of the candle is called the range of the candlestick.    How to read candlestick charts Many traders consider candlestick charts easier to read than the more conventional bar and line charts, even though they provide similar information. Candlestick charts can be read at a glance, offering a simple representation of price action.  In practice, a candlestick shows the battle between bulls and bears for a certain period. Generally, the longer the body is, the more intense the buying or selling pressure was during the measured timeframe. If the wicks on the candle are short, it means that the high (or the low) of the measured timeframe was near the closing price. The color and settings may vary with different charting tools, but generally, if the body is green, it means that the asset closed higher than it opened. Red means that the price moved down during the measured timeframe, so the close was lower than the open.  Some chartists prefer to use black-and-white representations. So instead of using green and red, the charts represent up movements with hollow candles and down moves with black candles.   What candlestick charts don’t tell you While candlesticks are useful in giving you a general idea of price action, they may not provide all you need for a comprehensive analysis. For instance, candlesticks don’t show in detail what happened in the interval between the open and close, only the distance between the two points (along with the highest and lowest prices). For example, while the wicks of a candlestick do tell us the high and low of the period, they can't tell us which one happened first. Still, in most charting tools, the timeframe can be changed, allowing traders to zoom into lower timeframes for more details.   Candlestick charts can also contain a lot of market noise, especially when charting lower timeframes. The candles can change very quickly, which can make them challenging to interpret.   Heikin-Ashi candlesticks So far, we have discussed what is sometimes referred to as the Japanese candlestick chart. But, there are other ways to calculate candlesticks. The Heikin-Ashi Technique is one of them. Heikin-Ashi stands for “average bar” in Japanese. Such candlestick charts rely on a modified formula that uses average price data. The main goal is to smooth out price action and filter out market noise. As such, Heikin-Ashi candles can make it easier to spot market trends, price patterns, and possible reversals. Traders often use Heikin-Ashi candles in combination with Japanese candlesticks to avoid false signals and increase the chances of spotting market trends. Green Heikin-Ashi candles with no lower wicks generally indicate a strong uptrend, while red candles with no upper wicks may point to a strong downtrend. While Heikin-Ashi candlesticks can be a powerful tool, like any other technical analysis technique, they do have their limitations. Since these candles use averaged price data, patterns may take longer to develop. Also, they don’t show price gaps and may obscure other price data.   Closing thoughts Candlestick charts are one of the most fundamental tools for any trader or investor. They not only provide a visual representation of the price action for a given asset, but also offer the flexibility to analyze data in different timeframes. An extensive study of candlestick charts and patterns, combined with an analytical mindset and enough practice may eventually provide traders with an edge over the market. Still, most traders and investors agree that it’s also important to consider other methods, such as fundamental analysis.
Crypto Airdrop - Explanation - How Does It Work?

Crypto Airdrop - Explanation - How Does It Work?

Binance Academy Binance Academy 11.02.2022 15:28
TL;DR Crypto airdrop is a marketing strategy adopted by crypto startups to promote the project and their new token. It involves distributing their native cryptocurrency to current or potential users' for free. Sometimes, users have to complete simple promotional activities before they can claim, such as following the project's social media account and sharing their posts. There are different types of airdrops, and each crypto project has its own requirements. But most airdrops share the same goal: increase awareness and overall interest in the project. Some are done directly into users' wallets, while others require a manual claim. Anyone with a cryptocurrency wallet can receive or claim an airdrop, but you should always be careful with scammers. There are many fraudulent airdrops that can steal your wallet funds when you claim or transfer the free tokens. Make sure to confirm the legitimacy of the project before claiming an airdrop. You should be particularly careful when it requires you to connect your wallet to an airdrop website. Learn more on Binance.com Introduction With the ever-growing number of new coins, it's difficult for crypto investors and traders to keep track of all the new projects. As such, some crypto projects offer airdrops as a way to stand out and increase awareness. While everyone loves free crypto, airdrops are not always legit. Let's see how they work and what you can do to protect yourself against airdrop scams.     What is a crypto airdrop? A crypto airdrop refers to the transfer of digital assets from a crypto project to multiple wallets. The idea is to distribute coins or tokens to current or potential users to increase awareness of the project. These tokens are given out for free, but some airdrops require users to perform certain tasks before claiming. Crypto airdrops became popular during the initial coin offering (ICO) boom of 2017, but are still used as a marketing strategy by many crypto projects today.   How do crypto airdrops work? There are different types of crypto airdrops, but they usually consist of a small amount of cryptocurrency being distributed to several wallets (usually on Ethereum or Binance Smart Chain). Although less common, there are also projects that giveaway NFTs instead of regular crypto. Some projects will do the distribution without asking for anything, while others will ask you to perform certain tasks before claiming. These tasks often include following social media accounts, subscribing to a newsletter, or holding a minimum amount of coins in your wallet. However, you are not always guaranteed to get the airdropped tokens. In some cases, the airdrops are given only to wallets that interacted with the project's platform before a certain date. 1INCH and Uniswap are popular examples that used this method to support early adopters. But unlike common airdrops, those were worth thousands of dollars.   Why do crypto projects perform airdrops? As mentioned, blockchain projects give out free tokens in an attempt to gain wider adoption and grow their network. A higher number of holders is often seen as a positive metric, which also makes the project more decentralized in terms of token ownership. Crypto airdrops also motivate recipients to use and promote the project. This can help cultivate an initial user base before the project lists on crypto exchanges. On the other hand, airdrops might also give a false impression of growth. So, it's important to consider other factors when evaluating adoption. For example, if hundreds of thousands of addresses are holding a certain token, but no one is really using it, then the project is either a scam or simply failed to captivate the community.   Are crypto airdrop and ICO the same thing? Crypto airdrops and ICOs are different concepts, even though they both involve new cryptocurrency projects. While airdrops don't require any investment from participants, an ICO is a method of crowdfunding. In an ICO, the project team conducts a token sale to collect funds from investors. ICOs started to become popular in 2014, when Ethereum performed a crowdfunding event to support its development. In 2017, the crypto space had an ICO boom, with hundreds of new projects adopting the method. If you want to learn more about ICOs, check out What Is an ICO (Initial Coin Offering)?   Types of airdrop As we've seen, there are different ways to conduct a cryptocurrency airdrop. Apart from the standard airdrop that simply transfers crypto to several wallets, we have a few other types. Common examples include bounty, exclusive, and holder airdrops.   Bounty airdrop A bounty airdrop requires users to complete certain tasks, such as sharing a post about the project on Twitter, joining the project's official Telegram, or creating a post and tagging a few friends on Instagram. To claim a bounty airdrop, you'll likely be asked to fill out a form with your wallet address and provide proof that you completed the tasks.   Exclusive airdrop An exclusive airdrop only sends crypto to designated wallets. Typically, the recipients have an established history with the project, such as being an active community member or an early supporter of the project. In September 2020, decentralized exchange (DEX) Uniswap airdropped 400 UNI to every wallet that had interacted with their protocol before a certain date. The governance token gives holders the right to vote on decisions related to the project's development in the future.   Holder airdrop Holder airdrops distribute free tokens to those that hold a certain amount of digital currencies in their wallet. The project team usually takes a snapshot of users' crypto holdings on a specific date and time. If the wallet balance meets the minimum requirement, recipients can claim free tokens according to their holdings at the time of the snapshot. Many new projects airdrop tokens to bitcoin (BTC), ether (ETH), or BSC wallet holders, as they have the largest communities in the space. For example, Stellar Lumens (XLM) airdropped 3 billion XLM to BTC holders in 2016, and the airdrop was exclusive to users in the Bitcoin network.   How to claim an airdrop? As mentioned, the process will vary from project to project. But the most important thing you need for claiming an airdrop is a cryptocurrency wallet. MetaMask is a popular and easy to use crypto wallet. After that, you can check if your wallet received free tokens. If not, you will likely have to interact with a website to claim the airdrop.   How to avoid airdrop scams? It can be challenging to tell whether an airdrop is legit or a scam. You should always DYOR before signing up for any airdrop, especially when you need to connect your wallet to a website. Sometimes, scammers will airdrop tokens into several wallets, but when you try to transfer these tokens to a crypto exchange or another wallet, you will have your wallet drained out. In other cases, scammers will announce a fake airdrop that leads to a phishing website. They will trick you into connecting your wallet into a website that looks very similar to the original one. As soon as you connect your wallet and sign a transaction, you will have other tokens taken out of your wallet. This often happens with fake Twitter and Telegram accounts that look very similar to the official ones. Some airdrop scams include asking you to send crypto to an unknown wallet address to unlock your free tokens in return. Legitimate airdrops will never ask for your funds or seed phrase. Be careful with airdrop emails or direct messages. To avoid being scammed, make sure to look into the project's official website and social media channels. Bookmark the official links and double check if they are really doing an airdrop event. If you don't know anything about the project, you should do extra research to find out what the crypto community is saying. If you can't find enough information, it's probably better to just ignore the airdrop.  For extra protection, you can set up a new wallet and new email address dedicated to receiving airdrops only. This can ensure that the funds in your personal wallet are safe from airdrop-related phishing attempts. And most importantly, never share your private keys with anyone.       Closing thoughts Crypto airdrops allow crypto projects to stand out and gain traction in the crypto space. It can also be a good way for crypto enthusiasts to grow their portfolio with up-and-coming tokens. However, there are likely more scam airdrops than legitimate ones around, so be careful and make sure to do your own research before participating.
Trend Lines - Well Known, Less Understood

Trend Lines - Well Known, Less Understood

Binance Academy Binance Academy 11.02.2022 13:27
What are trend lines? In financial markets, trend lines are diagonal lines drawn on charts. They connect specific data points, making it easier for chartists and traders to visualize price movements and identify market trends.  Trend lines are considered one of the most basic tools in technical analysis (TA). They are widely used in stock, fiat currency, derivatives, and cryptocurrency markets.  Essentially, trend lines work like support and resistance levels but are made of diagonals instead of horizontal lines. As such, they can have either a positive or negative slope. In general, the greater the slope of the line, the stronger the trend is. We can divide trend lines into two basic categories: ascending (uptrend) and descending (downtrend). As the name suggests, an uptrend line is drawn from a lower to a higher chart position. It connects two or more low points, as illustrated in the image below. Learn more on Binance.com     In contrast, a downtrend line is drawn from a higher to a lower position in the chart. It connects two or more high points.     So, the difference between the two types of lines is the selection of the points that are used to draw them. In an uptrend, the lines will be drawn using the lowest points in the chart (i.e., candlestick bottoms forming higher lows). On the other hand, downtrend lines are drawn using the highest values (i.e., candlestick tops forming lower highs).   How to use trend lines Based on the highs and lows of a chart, trend lines indicate where the price briefly challenged the prevailing trend, tested it, and then turned back in its favor. The line can then be extended to try and predict important levels in the future. The trend line may be tested several times, but as long as it isn’t broken, it is considered valid. While trend lines can be used in all kinds of data charts, they are usually applied to financial charts (based on market prices). They provide insights into the market supply and demand. Naturally, upward trend lines indicate an increasing buying force (demand is higher than supply). Downward trend lines are associated with consistent price drops, suggesting the opposite (supply is higher than demand). However, the trading volume should also be considered in such analyses. For instance, if the price is increasing, but the volume is decreasing or is relatively low, it may give a false impression of increased demand. As mentioned, trend lines are used to identify support and resistance levels, which are two basic but very important concepts of technical analysis. An uptrend line shows support levels below which the price is unlikely to drop. In contrast, the downtrend line highlights resistance levels above which the price is unlikely to rise. In other words, the market trend may be considered invalid when the support and resistance levels are broken, either to the downside (for an uptrend line) or to the upside (for a downtrend line). In many cases, when these key levels fail to hold the trend, the market tends to change direction. Still, technical analysis is a subjective field, and each person may present a completely different method for drawing trend lines. Thus, it may be worth combining multiple TA techniques, as well as fundamental analysis to reduce risks.   Drawing valid trend lines Technically, trend lines can connect any two points in a chart. But, most chartists agree that using three points or more is what makes a trend line valid. In some cases, the first two points can be used to define a trend in potential, and the third point (extended in the future) can be used to test its validity. So, when the price touches the trend line three or more times without breaching it, the trend can be considered valid. Testing the trend line multiple times indicates that maybe the trend is not a mere coincidence caused by price fluctuations.   Scale settings In addition to choosing enough points to create a valid trend line, it’s important to consider proper settings when drawing them. Among the most important chart settings is the scale settings. In financial charts, the scale relates to the manner in which the change in price is displayed. The two most popular scales are arithmetic and semi-logarithmic (semi-log). On an arithmetic chart, change is expressed evenly as the price moves up or down the Y-axis. In contrast, semi-log charts express variations in terms of percentage.  For example, a price change from $5 to $10 would cover the same distance on an arithmetic chart as one from $120 to $125. On a semi-log chart, however, the 100% gain ($5 to $10) would occupy a much larger portion of the chart, as opposed to the 4% increase of the $120 to $125  move. It’s important to consider the scale settings when drawing trend lines. Each type of chart may result in different highs and lows and, thus, slightly different trend lines.   Closing thoughts While they are useful tools for technical analysis, trend lines are far from foolproof. The choice of points used to draw trend lines will affect the degree to which they accurately represent market cycles and real trends, making them somewhat subjective.  For instance, some chartists draw trend lines based on the body of the candlesticks, disregarding the wicks. Others prefer to draw lines according to the highs and lows of the wicks.  So, it’s important to use trend lines in conjunction with other charting tools and indicators. Notable examples of other TA indicators include the Ichimoku Clouds, Bollinger Bands (BB), MACD, Stochastic RSI, RSI, and moving averages.
Tezos (XTZ) - Project We All Should Know

Tezos (XTZ) - Project We All Should Know

Binance Academy Binance Academy 11.02.2022 09:18
TL;DR Tezos is a blockchain project that stands out due to its built-in mechanisms for upgrading the network. Changes to the Tezos blockchain are code proposals made by people who own a certain amount of XTZ, which are then voted on by peers. Because Tezos is self-amending, there is never any need for any of that pesky hard forking business.  Learn more on Binance.com Introduction Smart contract platforms make up one of the most crowded and competitive sectors in the crypto industry. While solving the current technological problems is crucial for the space to mature, there are many different approaches to fulfill the high demand for base-layer smart contract infrastructure. Useful for decentralized finance applications and digital asset management, Tezos, with its associated XTZ token, is one of the prominent players in this sector.   What is Tezos (XTZ)? Tezos is a blockchain built to support and run smart contracts. Initially designed in 2014, the Tezos mainnet went live in 2018 and has gone on to achieve moderate success as a rival to the Ethereum network. Tezos is overseen by The Tezos Foundation, a Swiss entity that is responsible for promotion, grants, strategic partnerships, and other activities that raise awareness of the Tezos ecosystem. Developed initially by Arthur Breitman alongside his wife, Kathleen Breitman, the project suffered various delays thanks to a dispute between them and Tezos Foundation president Johann Gevers. After the rocky start, however, Tezos successfully launched and survived the bear market. Tezos conducted an Initial Coin Offering (ICO) in July 2017, raising $232 million. This makes it one of the largest ICOs ever.   How Tezos (XTZ) works Tezos operates like many of its blockchain competitors, as a platform for creating and running decentralized applications (DApps), as well as exchanging assets. Smart contracts on Tezos are written in the Michelson programming language, designed specifically for the protocol. To perform transactions on the network, you use gas, which is converted into fees in the Tezos cryptocurrency, XTZ. Tezos is a Proof of Stake (PoS) blockchain. Technically, it uses a variant of PoS called Delegated Proof of Stake (DPoS), although the implementation is unique to Tezos.  Participants who hold over 8,000 Tezos can become delegates and run the network through baking and endorsing. Baking means creating new blocks (essentially another word for staking), while endorsing means “agreeing” on a block created by a baker. Alternatively, if a token holder doesn’t have 8,000 XTZ or doesn’t want to set up the required hardware themselves, they can delegate these tasks to someone else.   Why Tezos (XTZ) is important Tezos has a few key differences from the other smart contract platforms in the blockchain space. Tezos uses self-amendment, which allows for network upgrades without having to fork into two different blockchains. Think of what happened with Bitcoin’s famous hard fork, Bitcoin Cash. Tezos aims to prevent these scenarios. Because of self-amendment, Tezos is easily adaptable to the ever-changing regulatory and technological landscape. While Ethereum 2.0 is a big leap for Ethereum, it requires spinning up what is essentially a new and separate blockchain. Tezos, however, should be able to make amendments and continue without much disruption in cases like this.   Tezos (XTZ) governance Changes to Tezos follow an on-chain governance model. Changes to the blockchain are submitted by delegates through code updates. Stakeholders can then vote on whether they approve or deny the changes. Thanks to this on-chain governance model, radical disruption can happen at any time – if the delegates approve of the proposed changes to the blockchain. This can involve system changes like amendments to fees or the process of baking, or anything really! This also results in a thriving community to discuss changes and new rules to make the system better. For example, in November 2020, Tezos went through the Delphi update, which decreased gas consumption by around 75%. An upgrade like this can be significant for DeFi development on the Tezos blockchain, and it also shows how on-chain governance can be nimble to adapt to new directions.       Tezos (XTZ) use cases Like other blockchain networks, Tezos is a fast way to verify financial transactions with minimized trust.  In September 2019, Gendarmerie’s cybercrime division (C3N) became one of the first governmental agencies to use Tezos for the validation of their judicial expenses. Tezos can also be used to transfer ownership of illiquid assets, such as real estate, art, and jewelry. For instance, a company called MountX is leveraging Tezos for tokenization of real estate in Mexico.   How to store Tezos (XTZ) The XTZ token (aka Tez or Tezzie token) can be stored using the usual suspects when it comes to wallets, including many software wallets such as Trust Wallet. You can also store XTZ on either the Ledger or the Trezor hardware wallets via third-party software.  If you’re interested in staking your XTZ tokens, check out the Locked Staking product on Binance Earn.   Closing thoughts While Tezos hasn’t seen the same amount of network activity and rush of DApp building as Ethereum, it’s not because this blockchain is without merit. The unique approach to upgrading and voting may make it a more agile platform than some of its competitors, which can turn into a big advantage over the long run. With a rocky road to launch, Tezos has provided some utility and can be appealing to both governmental and industry customers. Have more questions about the Tezos network? Check out our Q&A platform, Ask Academy, where the Binance community will answer your questions.
DXY, GBPUSD And Others Acompany Luke Suddards In "The Weekly Close Out"

Avoid Mistakes In Technical Analysis! What Are "The Most Popular" Ones?

Binance Academy Binance Academy 09.02.2022 09:38
TL;DR Breaking news, TA is hard! If you’ve been trading for at least a little while, you’ll know that making mistakes is part of the game. In fact, losses are impossible to avoid for any trader – even experienced ones who make fewer errors. With that said, there are some trivial mistakes that almost every beginner makes when starting out. The best traders always remain open-minded, rational, calm. They understand their gameplan, and simply keep reading what the market is telling them. This is what you also need to do if you want to succeed! If you develop these qualities, you can manage risk, analyze your mistakes, play to your strengths, and constantly keep improving. Try to be the calmest person in the room, especially when things are looking rough.  Let’s see how you can avoid the most obvious mistakes! Learn more on Binance.com   Introduction Technical analysis (TA) is one of the most used ways to analyze the financial markets. TA can be applied to essentially any financial market, whether that’s stocks, forex, gold, or cryptocurrencies. While the basic concepts of technical analysis are relatively easy to grasp, it’s a difficult art to master. When you’re learning any new skill, it’s natural to make a lot of mistakes on the way. This can be especially harmful when it comes to trading or investing. If you are not being careful and learning from your mistakes, you risk losing a significant portion of your capital. Learning from your mistakes is great, but avoiding them as much as possible is even better.  This article will introduce you to some of the most common mistakes in technical analysis. If you’re new to trading, why not go through some technical analysis basics first? Check out our article on What is Technical Analysis? and 5 Essential Indicators Used in Technical Analysis. So, what are the most common mistakes beginners make when trading with technical analysis?     1. Not cutting your losses Let’s start with a quote from commodities trader Ed Seykota: "The elements of good trading are: (1) cutting losses, (2) cutting losses, and (3) cutting losses. If you can follow these three rules, you may have a chance.” This seems like a simple step, but it’s always good to emphasize its importance. When it comes to trading and investing, protecting your capital should always be your number one priority.  Starting out with trading can be a daunting undertaking. A solid approach to consider when you’re starting out is the following: the first step isn’t to win, it’s to not lose. This is why it can be favorable to start with smaller position sizing, or not even risk real funds. Binance Futures, for example, has a testnet where you can try out your strategies before risking your hard-earned funds. This way, you can protect your capital, and risk it only once you’re consistently producing good results. Setting a stop-loss is simple rationality. Your trades should have an invalidation point. This is where you “bite the bullet” and accept that your trade idea was wrong. If you don’t apply this mindset to your trading, you likely won’t be doing well over the long-term. Even one bad trade can be very detrimental to your portfolio, and you might end up holding a losing bag, hoping for the market to recover.   2. Overtrading When you’re an active trader, it’s a common mistake to think you always need to be in a trade. Trading involves a lot of analysis and a lot of, well, sitting around, patiently waiting! With some trading strategies, you may need to wait a long time to get a reliable signal to enter a trade. Some traders may enter less than three trades per year and still produce outstanding returns. Check out this quote from trader Jesse Livermore, one of the pioneers of day trading: “Money is made by sitting, not trading.” Try to avoid entering a trade just for the sake of it. You don’t always have to be in a trade. In fact, in some market conditions, it’s actually more profitable to do nothing and wait for an opportunity to present itself. This way, you preserve your capital and have it ready to deploy once the good trading opportunities show up again. It’s worth keeping in mind that the opportunities will always come back, you just have to wait for them. A similar trading mistake is an overemphasis on lower time frames. Analysis done on higher time frames will generally be more reliable than analysis done on lower time frames. As such, low time frames will produce a lot of market noise and may tempt you to enter trades more often. While there are many successful scalpers and short-term profitable traders, trading on lower time frames usually brings a bad risk/reward ratio. As a risky trading strategy, it’s certainly not recommended for beginners.   3. Revenge trading It’s quite common to see traders trying to immediately make back a significant loss. This is what we call revenge trading. It doesn’t matter if you want to be a technical analyst, a day trader, or a swing trader – avoiding emotional decisions is crucial. It’s easy to stay calm when things are going well, or even when you make small mistakes. But can you stay calm when things go completely wrong? Can you stick to your trading plan, even when everyone else is panicking? Notice the word “analysis” in technical analysis. Naturally, this implies an analytical approach to the markets, right? So, why would you want to make hasty, emotional decisions in such a framework? If you want to be among the best traders, you should be able to stay calm even after the biggest mistakes. Avoid emotional decisions, and focus on keeping a logical, analytical mindset. Trading immediately after suffering a big loss tends to lead to even more losses. As such, some traders may not even trade at all for a period of time following a big loss. This way, they can get a fresh start and get back to trading with a clear mind.       4. Being too stubborn to change your mind If you’d like to become a successful trader, don’t be afraid to change your mind. A lot. Market conditions can change really quickly, and one thing’s a certainty. They will keep changing. Your job as a trader is to recognize those changes and adapt to them. One strategy that works really well in a specific market environment may not work at all in another. Let’s read what legendary trader Paul Tudor Jones had to say about his positions: “Every day I assume every position I have is wrong.” It’s good practice to try to take the other side of your arguments to see their potential weaknesses. This way, your investment theses (and decisions) can become more comprehensive. This also brings up another point: cognitive biases. Biases can heavily affect your decision-making, cloud your judgment, and limit the range of possibilities you’re able to consider. Make sure to at least understand the cognitive biases that may affect your trading plans, so you can mitigate their consequences more effectively.   5. Ignoring extreme market conditions There are times when the predictive qualities of TA become less reliable. These can be black swan events or other kinds of extreme market conditions that are heavily driven by emotion and mass psychology. Ultimately, the markets are driven by supply and demand, and there can be times when they are extremely imbalanced to one side. Take the example of the Relative Strength Index (RSI), a momentum indicator. Generally, if the reading is below 30, the charted asset may be considered oversold. Does this mean that it’s an immediate trade signal when the RSI goes below 30? Absolutely not! It just means that the momentum of the market is currently dictated by the seller side. In other words, it just indicates that sellers are stronger than buyers. The RSI can reach extreme levels during extraordinary market conditions. It might even drop to single digits – close to the lowest possible reading (zero). Even such an extreme oversold reading may not necessarily mean that a reversal is imminent.    Blindly making decisions based on technical tools reaching extreme readings can lose you a lot of money. This is especially true during black swan events when the price action can be exceptionally hard to read. During times like these, the markets can keep going in one direction or the other, and no analytical tool will stop them. This is why it’s always important to consider other factors as well, and not rely on a single tool.   6. Forgetting that TA is a game of probabilities Technical analysis doesn’t deal with absolutes. It deals with probabilities. This means that whatever technical approach you’re basing your strategies on, there’s never a guarantee that the market will behave as you expect. Maybe your analysis suggests that there’s a very high probability of the market moving up or down, but that’s still not a certainty. You need to take this into account when you’re setting up your trading strategies. No matter how experienced you are, it’s never a great idea to think the market will follow your analysis. If you do that, you’re prone to oversizing and betting too big on one outcome, risking a big financial loss.   7. Blindly following other traders Constantly improving your craft is essential if you want to master any skill. This is especially true when it comes to trading the financial markets. In fact, changing market conditions make it a necessity. One of the best ways to learn is to follow experienced technical analysts and traders. However, if you’d like to become consistently good, you also need to find your own strengths and build on them. We can call this your edge, the thing that makes you different from others as a trader. If you read many interviews with successful traders, you’ll surely notice that they’ll have quite different strategies. In fact, one strategy that works perfectly for one trader may be deemed completely unfeasible by another. There are countless ways to profit off of the markets. You just need to find which one suits your personality and trading style the best. Entering a trade based on someone else’s analysis might work out a few times. However, if you just blindly follow other traders without understanding the underlying context, it most definitely won’t work over the long-term. This, of course, doesn’t mean that you shouldn’t follow and learn from others. The important thing is whether you agree with the trade idea and whether it fits into your trading system. You should not be blindly following other traders, even if they are experienced and reputable.   Closing thoughts We went through some of the most fundamental mistakes you should avoid when using technical analysis. Remember, trading isn’t easy, and it’s generally more feasible to approach it with a longer-term mindset. Becoming consistently good at trading is a process that takes time. It requires a lot of practice in refining your trading strategies and learning how to formulate your own trade ideas. This way, you can find your strengths, identify your weaknesses, and be in control of your investment and trading decisions. If you’d like to read more about chart analysis, check out 12 Popular Candlestick Patterns Used in Technical Analysis.
SolScan - Many Of Investors Probably Don't Know This Term

Solana (SOL) - Let's Have A Look At This Altcoin

Binance Academy Binance Academy 08.02.2022 13:43
TL;DR Solana is a blockchain network focused on fast transactions and high throughput. It uses a unique method of ordering transactions to improve its speed. Users can pay their transaction fees and interact with smart contracts with SOL, the network’s native cryptocurrency. Introduction When it comes to blockchain technology, scalability is one of the biggest challenges out there. As these networks grow, they often face limitations in terms of transaction speed and confirmation times. Solana aims to tackle these limitations without compromising security or decentralization. Founded in 2017 by Anatoly Yakovenko from Solana Labs, the Solana blockchain adopts a new method of verifying transactions. Bitcoin, Ethereum, and many other projects suffer from scalability and speed issues. Using a method known as Proof of History (PoH), the Solana blockchain can handle thousands of transactions per second. Learn more on Binance.com     How does Solana work? Solana is a third-generation, Proof of Stake blockchain. It has implemented a unique way of creating a trustless system for determining the time of a transaction called Proof of History. Keeping track of the order of transactions is hugely vital for cryptocurrencies. Bitcoin does this by bundling transactions into blocks with a single timestamp. Each node has to validate these blocks in consensus with other nodes. This process adds in a significant waiting time for nodes to confirm a block across the network. Solana instead takes a different approach. Let’s take a closer look. What is Proof of History? Solana events and transactions are all hashed using the SHA256 hash function. This function takes an input and produces a unique output that is extremely difficult to predict. Solana takes the output of a transaction and uses it as the input for the next hash. The order of the transactions is now inbuilt into the hashed output. This hashing process creates a long, unbroken chain of hashed transactions. This feature makes a clear, verifiable order of transactions that a validator adds to a block, without the need for a conventional timestamp. Hashing also requires a certain amount of time to complete, meaning validators can easily verify how much time has passed. Proof of History differs from the process Bitcoin uses as part of its Proof of Work consensus mechanism. Blocks on Bitcoin are large groups of unordered transactions. Each BTC miner adds the time and date to the block they mine based on their local clock. The time may differ according to other nodes or even be false. Nodes then have to figure out if the timestamp is valid. By ordering the transactions in a chain of hashes, validators process and transmit less information in each block. Using a hashed version of the latest state of transactions greatly reduces the time of confirming a new block. It’s important to understand that Proof of History is not a consensus mechanism. It is instead a way of improving the time spent confirming the order of transactions. When combined with proof of stake, selecting the next validator for a block is much easier. Nodes need less time to validate the order of transactions, meaning the network chooses a new validator quicker.   Solana’s key features According to their blog, the Solana team has developed eight core technical features to help the blockchain match the capabilities of a centralized system. Proof of History is perhaps the most notable one, but there are also: Tower BFT — a PoH-optimized version of Practical Byzantine Fault Tolerance Turbine — a block propagation protocol Gulf Stream — Mempool-less transaction forwarding protocol Sealevel — Parallel smart contracts run-time Pipelining — a Transaction Processing Unit for validation optimization Cloudbreak — Horizontally-Scaled Accounts Database Archivers — Distributed ledger storage These features create a high-performance network that has 400ms block times and operates thousands of transactions per second. To put this in perspective, the block time of Bitcoin is around 10 minutes, and Ethereum roughly 15 seconds. SOL holders can stake their tokens as part of the blockchain’s PoS consensus mechanism. With a compatible crypto wallet, you can stake your tokens with validators who process the network’s transactions. A successful validator then shares some rewards with those who have staked. This reward mechanism incentivizes validators and delegators to act in the network’s interest. As of May 2021, Solana has around 900 validators, which makes it a fairly decentralized network. What is SOL token? SOL is Solana’s native cryptocurrency, which works as a utility token. Users need SOL to pay transaction fees when making transfers or interacting with smart contracts. The network burns SOL as part of its deflationary model. SOL holders can also become network validators. Like Ethereum, Solana allows developers to build smart contracts and create projects based on the blockchain. SOL uses the SPL protocol. SPL is the token standard of the Solana blockchain, similar to ERC20 on Ethereum. The SOL token has two main use cases: Paying for transaction fees incurred when using the network or smart contracts. Staking tokens as part of the Proof of Stake consensus mechanism. DApps building on Solana are also creating new SOL use cases. For example, Chainvote is creating a (decentralized finance) DeFi voting app for corporate governance using SOL tokens to vote. Solana’s price saw an almost 30 times increase in the first two quarters of 2021, making it a popular pick with investors and speculators.   How to store SOL? You can store SOL tokens on the sollet.io crypto wallet (developed by Serum Academy), Trust Wallet for mobile devices, and other SPL-supporting wallets. If you wish to stake your SOL, you will need to use a wallet that supports staking. You could use SolFlare wallet or use Solana command-line tools. Your wallet will allow you to create a stake account and delegate your SOL tokens to a validator. Closing thoughts As a relatively new project, Solana has provided the benefits it promises in speed and scalability. Its token price has also performed well, piquing the interest of investors. Nevertheless, the adoption and usage of the network itself are still in their infancy. Until we see heavy traffic and more use cases of Solana, we won’t know whether its speed makes much difference to the cryptocurrency world. Having a quick network is good, but the benefits of that only come when more people start to use it more and we see more use cases.
European Rate Surge Continues

Fundamental Analysis Explained

Binance Academy Binance Academy 07.02.2022 08:09
Contents Introduction What is fundamental analysis? Fundamental analysis (FA) vs. technical analysis (TA) Popular indicators in fundamental analysis Earnings per share (EPS) Price-to-earnings (P/E) ratio Price-to-book (P/B) ratio Price/earnings-to-growth (PEG) ratio Fundamental analysis and cryptocurrencies Network value-to-transactions (NVT) ratio Active addresses Price-to-mining breakeven ratio Whitepaper, team, and roadmap  Pros and cons of fundamental analysis Closing thoughts   Introduction When it comes to trading – whether you’re dealing with century-old stocks or nascent cryptocurrencies – there’s no exact science involved. Or, if there is, Wall Street’s top players ensure that the formula remains a well-kept secret. What we have instead is a vast array of tools and methodologies employed by traders and investors. For the most part, you can sort these techniques into two categories: fundamental analysis (FA) and technical analysis (TA). In this article, we’ll dive into the basics of fundamental analysis. Learn more on Binance.com   What is fundamental analysis? Fundamental analysis is a method used by investors and traders to attempt to establish the intrinsic value of assets or businesses. To value these accurately, they’ll rigorously study internal and external factors to determine whether the asset or business in question is overvalued or undervalued. Their conclusions can then help to better formulate a strategy that will be more likely to yield good returns. For instance, if you took an interest in a company, you might first study things like the company’s earnings, balance sheets, financial statements, and cash flow to get a feel for its financial health. You might then zoom out of the organization to look at the market or industry it’s operating in. Who are the competitors? What demographics is the company targeting? Is it expanding its reach? You could zoom out even further to take into account the economic considerations like interest rates and inflation, to name just a couple of factors. The above is what’s known as a bottom-up approach: you start with a company you’re interested in and work your way up to understand its place in the broader economy. But you could equally adopt a top-down approach, where you narrow down your picks by first examining the bigger picture. The end goal with this type of analysis is to generate an expected share price and to compare it with the current price. If the number is higher than the current price, you might conclude that it’s undervalued. If it’s lower than the market price, then you could assume that it’s presently overvalued. Armed with the data from your analysis, you can make informed decisions about whether to buy or sell that particular company’s stock.   Fundamental analysis (FA) vs. technical analysis (TA) Traders and investors new to the cryptocurrency, forex, or stock markets are often confused over which approach to take. Fundamental analysis and technical analysis stand in stark contrast and rely on significantly different methodologies to analyze different things. And yet, both provide data relevant to trading. So which one is best? In fact, it might make more sense to question what each brings to the table. In essence, fundamental analysts believe that stock price is not necessarily indicative of the stock’s true value – an ideology that underpins their investment decisions.  Conversely, technical analysts believe that future price movement can be somewhat predicted from past price action and volume data. They don’t concern themselves with studying external factors, preferring instead to focus on price charts, patterns, and trends in markets. They aim to identify ideal points for entering and exiting positions. Proponents of the efficient market hypothesis (EMH) believe that it’s impossible to consistently outperform the market with technical analysis (TA). The theory suggests that financial markets represent all known information about assets (that they are “rational”) and that they already take into account historical data. “Weaker” versions of the EMH do not discredit fundamental analysis, but “stronger” forms argue that it’s impossible, even with rigorous research, to gain a competitive edge. Understandably, there is no objectively better strategy out of the pair, as both can present valuable insights into different areas. Some may lend themselves better to certain trading styles, and, in practice, many traders use a combination of both to observe the bigger picture. This is true for short-term trades as it is for long-term investments.   Popular indicators in fundamental analysis We don’t look to candlesticks, MACD, or RSI for insights in fundamental analysis – there are a handful of FA-specific indicators that are used instead. In this section, we’ll discuss some of the most popular ones.   Earnings per share (EPS) Earnings per share is an established measure of a company’s profitability, telling us how much profit it makes for each outstanding share. It’s calculated using the following formula: (net income - preferred dividends) / number of shares   Suppose that a company doesn’t pay out dividends, and its profit is $1 million. With 200,000 shares issued, the formula gives us an EPS of $5. The calculation is not a particularly complex one, but it can provide us with some insight into potential investments. Businesses with higher (or growing) EPS are typically more attractive to investors. Diluted earnings per share is favored by some, as it also takes into account factors that could increase the total number of shares. In the case of stock options, for example, employees are given the option to purchase company stock. Because this generally gives a higher number of shares to divide the net income, we would expect to see a lower value for diluted EPS versus simple EPS. As with all indicators, earnings per share should not be the sole metric used to value a prospective investment. That said, it’s a handy tool when used alongside others.   Price-to-earnings (P/E) ratio The price-to-earnings ratio (or, simply, P/E ratio) values a business by comparing share price with its EPS. It’s calculated with the following formula: share price / earnings per share   Let’s reuse the same company from the previous example, which had an EPS of $5. Let’s say that each share trades at $10, which would give us a P/E ratio of 2. What does that mean? Well, it depends largely on what the rest of our research shows.  Many use the profit-to-earnings ratio to determine whether a stock is overvalued (if the ratio is higher) or undervalued (if the ratio is lower). It’s a good idea to take the number into account by comparing it with the P/E ratio of similar businesses. Again, this rule doesn’t always hold true, so it’s best used alongside other quantitative and qualitative analysis techniques.   Price-to-book (P/B) ratio The price-to-book ratio (also known as the price-to-equity ratio or the P/B ratio) can tell us about how investors value the company in relation to its book value. The book value is a business’s value as defined in its financial reports (typically, assets minus liabilities). The calculation looks like this: price per share / book value per share   Let’s once again revisit our company from previous examples. We’ll assume that it has a book value of $500,000. Each share trades at $10, and there are 200,000 of them. Our book value per share is, therefore, $500,000 divided by 200,000, which gives us $2.5.  Plugging the numbers into the formula, $10 divided by $2.5 gives us a price-to-book ratio of 4. On the surface, this doesn’t look too good. It tells us that shares are currently trading for four times what the company is actually worth on paper. It could suggest that the market is overvaluing the business, perhaps by expecting huge growth. If we had a ratio of less than 1, it would point to the business having more value than the market currently recognizes. A limitation of the price-to-book ratio is that it’s better suited to the assessment of “asset-heavy” businesses. After all, companies with little physical assets are not well-represented.   Price/earnings-to-growth (PEG) ratio Price/earnings-to-growth ratio (PEG) is an extension to the profit-to-earnings ratio, expanding its scope to take growth rates into account. It uses the following formula: price-to-earnings ratio / earnings growth rate   The earnings growth rate is an estimate of the predicted growth in earnings for the company in a set time frame. We express it as a percentage. Suppose that we’ve estimated average growth of 10% over the next five years for our aforementioned company. We take the price-to-earnings ratio (2) and divide it by 10 to reach a ratio of 0.2. That ratio would suggest that the company is a good investment as it’s heavily undervalued when we factor in future growth. Any business with a ratio of less than 1, generally speaking, is undervalued. Any above could be overvalued. The PEG ratio is favored over the P/E one by many, as it considers a fairly important variable that P/E omits.   ➟ Looking to get started with cryptocurrency? Buy Bitcoin on Binance!   Fundamental analysis and cryptocurrencies The aforementioned metrics aren’t really applicable in cryptocurrency. Instead, you might look to other factors to assess a project’s viability. In the following section are a handful of indicators used by cryptocurrency traders.   Network value-to-transactions (NVT) ratio Often regarded as the P/E ratio equivalent of the cryptocurrency markets, the NVT ratio is fast becoming a staple in crypto FA. It can be calculated as follows: network value / daily transaction volume   NVT attempts to interpret a given network’s value based on the value of transactions it processes. Suppose that you have two projects: Coin A and Coin B. Both have a market capitalization of $1,000,000. However, Coin A has a daily transaction volume worth $50,000, whereas Coin B’s is worth $10,000. The NVT ratio for Coin A is 20, and the NVT for Coin B is 100. Generally speaking, assets with lower NVT ratios are considered undervalued, while those with higher ratios may be considered overvalued. These merits alone suggest that Coin A is undervalued compared to Coin B.   Active addresses Some look to the number of active addresses on a network to gauge how much it’s being used. While not reliable as a standalone indicator (the metric can be gamed), it can nonetheless reveal information about network activity. You might factor that into your true valuation of a given digital asset.   Price-to-mining-breakeven ratio The price-to-mining-breakeven ratio is a metric for valuing Proof of Work coins, which are mined by network participants. It takes into account the costs associated with this process: namely, electricity and hardware expenditure. coin market price / cost to mine a coin   The price-to-mining-breakeven ratio can reveal a lot about the current state of a blockchain network. The breakeven refers to the cost of mining a coin – for instance, if it’s at $10,000, then miners typically spend $10,000 to generate a new unit. Suppose that Coin A trades at $5,000 and Coin B at $20,000, and both have a breakeven point of $10,000. Coin A’s ratio will be 0.5, while Coin B’s will be 2. Since Coin A’s ratio is under 1, it tells us that miners are operating at a loss to mine the coin. Mining Coin B is profitable as, for every $10,000 spent mining, you would expect to make $20,000. Because of the incentives, you might anticipate that the ratio would trend towards 1 over time. For Coin A, those mining at a loss would likely leave the network unless the price increased. Coin B has an attractive reward, so you’d expect more miners to join to take advantage of it until it’s no longer profitable. The effectiveness of this indicator is disputed. Still, it gives you an idea of the mining economics, which you can factor into your overall assessment of a digital asset.   Whitepaper, team, and roadmap The most popular method for establishing the value of cryptocurrencies and tokens involves some good old-fashioned research into the project. Reading a whitepaper, you can understand a project’s goals, its use cases, and its technology. The track records of team members give you an idea of their ability to build and scale the product. Lastly, a roadmap tells you whether the project is on track. It can be supplemented with additional research to determine the likelihood that the project will hit its milestones.   Pros and cons of fundamental analysis Pros of fundamental analysis Fundamental analysis is a robust methodology for assessing businesses in a way that technical analysis simply cannot compete with. To investors worldwide, studying a range of qualitative and quantitative factors is a crucial starting point for any trade. Anyone can conduct fundamental analysis as it relies on tried-and-tested techniques and readily-available business data. Or at least, this is the case in traditional markets. Indeed, if we look to cryptocurrency (still a small industry), data is not always available, and a heavy correlation between assets means that FA might not be as effective. Done correctly, it provides a foundation for identifying stocks currently undervalued and poised to appreciate over time. Top investors like Warren Buffett and Benjamin Graham have consistently demonstrated that rigorous research into businesses in this manner can yield tremendous results.   Cons of fundamental analysis It’s easy to do fundamental analysis, but it’s tougher to do good fundamental analysis. Determining the “intrinsic value” of a stock is a time-consuming process that requires a lot more work than just plugging numbers into a formula. Many factors need to be assessed, and the learning curve for doing so effectively can be steep. What’s more, it’s better suited to long-term trades than short-term ones. This type of analysis also overlooks powerful market forces and trends that technical analysis can identify. As economist John Maynard Keynes once said:  The market can stay irrational longer than you can remain solvent. Stocks that appear undervalued (by every metric) are not guaranteed to increase in value in the future.   Closing thoughts Fundamental analysis is an established practice that some of the most successful traders swear by. By refining a strategy, investors can not only learn to better estimate the true value of stocks, cryptocurrencies, and other assets but also understand businesses and industries better as a whole. Combined with technical analysis, fundamental analysis can give traders and investors a well-rounded understanding of which assets and businesses they could profit from. The combination of FA and TA is favored by many in both the legacy and cryptocurrency markets. Given the nascency of the crypto markets, however, you should understand that FA may not be as effective. Always Do Your Own Research and ensure that you have a solid risk management strategy in place.   ➟ Questions about Fundamental Analysis? Head over to Ask Academy to discuss them with the community!
Bear - A Second Symbol Of Markets? What Does Bear Market Mean?

Bear - A Second Symbol Of Markets? What Does Bear Market Mean?

Binance Academy Binance Academy 07.02.2022 07:50
Introduction Financial markets move in trends. It’s important to understand the differences between these trends to be able to make better investment decisions. How come? Well, different market trends can lead to wildly different market conditions. If you don’t know what the underlying trend is, how are you going to adapt to changing conditions? A market trend is the overall direction that the market is going. In a bear market, prices are generally declining. Bear markets can be a challenging time to trade or invest in, especially for beginners.  Most crypto traders and technical analysts agree that Bitcoin has been in a macro bull trend throughout its existence. Even so, there have been several relentless cryptocurrency bear markets. These generally bring more than an 80% decline in the price of Bitcoin, while altcoins can easily experience more than 90% declines. What can you do during these times? In this article, we’ll discuss what a bear market is, how you should prepare for it, and how you may be able to profit in it. If you’d like to read about bull markets first, check out What Is A Bull Market?.   What is a bear market? A bear market can be described as a period of declining prices in a financial market. Bear markets can be extremely risky and difficult to trade for inexperienced traders. They can easily lead to great losses and scare investors from ever returning to the financial markets. How come?  There’s this saying among traders: “Stairs up, elevators down.” This means that moves to the upside may be slow and steady, while moves to the downside tend to be more sharp and violent. Why is that? When the price starts crashing, many traders rush to exit the markets. They do that to either stay in cash or lock in profits from their long positions. This can quickly result in a domino effect where sellers rushing to the exit leads to even more sellers exiting their positions, and so on. The drop can be amplified even more if the market is highly leveraged. Mass liquidations will have an even more pronounced cascading effect, resulting in a violent sell-off. With that said, bull markets can also have phases of euphoria. During these times, prices are increasing at an extreme rate, correlations are higher than usual, and a majority of assets are going up in tandem. Typically, investors are “bearish” in a bear market, meaning that they expect prices to decline. This also means that market sentiment is generally quite low. However, this may not mean that all market participants are in active short positions. This just means that they expect prices to decline and may be looking to position themselves accordingly if the opportunity presents itself.   Bear market examples As we’ve discussed, many investors think that Bitcoin has been in a macro bull trend since it started trading. Does that mean there aren’t bear markets contained in that bull run? No. After Bitcoin’s move to around $20,000 in December 2017, it’s had quite a brutal bear market.   Bitcoin price crashes after the 2017 bull market.   And before the 2018 bear market, Bitcoin experienced an 86% drop in 2014.   Bitcoin price crashes 86% from the 2013 top.    As of July 2020, the range of the previous bear market low around $3,000 have been retested but never broken. If that low would have been breached, a stronger argument could be made that a multi-year Bitcoin bear market is still underway.   Bitcoin retesting the range of its previous bear market low.   Since that level has not been broken, the argument can be made that the crash following COVID-19 fears was merely a retest of the range. Still, there are no certainties when it comes to technical analysis, only probabilities. Other notable bear market examples come from the stock market. The Great Depression, the 2008 Financial Crisis, or the 2020 stock market crash due to the coronavirus pandemic are all noteworthy examples. These events have all caused great damage on Wall Street and impacted stock prices across the board. Market indexes such as the Nasdaq 100, the Dow Jones Industrial Average (DJIA), or the S&P 500 index can experience significant price declines during times like these.   Bear market vs. bull market – what’s the difference? The difference is fairly straightforward. In a bull market, prices are going up, while in a bear market, prices fall. One notable difference may be that bear markets can have long periods of consolidation, i.e., sideways or ranging price action. These are times when market volatility is quite low, and there’s little trading activity happening. While the same may be true in bull markets, this kind of behavior tends to be more prevalent in bear markets. After all, prices going down for an extended period isn’t very attractive for most investors. Something else to consider is whether it’s possible to enter a short position on an asset in the first place. If there’s no ability to short an asset on margin or using derivatives, traders can only express a bearish view on the market by selling for cash or stablecoins. This can lead to a longer, drawn-out downtrend with little buying interest, resulting in a slow and uneventful sideways price action.   ➟ Looking to get started with cryptocurrency? Buy Bitcoin on Binance!   How to trade in a bear market One of the simplest strategies traders can use in a bear market is to stay in cash (or stablecoins). If you’re not comfortable with prices declining, it may be better to simply wait until the market gets out of bear market territory. If there’s an expectation that a new bull market may come at some point in the future, you can take advantage of it when it does. At the same time, if you’re long-term HODLing with an investment time horizon of many years or decades, a bear market isn’t necessarily a direct signal to sell. When it comes to trading and investing, it’s generally a better idea to trade with the direction of the market trend. This is why another lucrative strategy in bear markets could be to open short positions. This way, when asset prices are going down, traders can profit off the decline. These can be day trades, swing trades, position trades – the main intention is simply to trade in the direction of the trend. With that said, many contrarian traders will look for “counter-trend” trades, meaning trades that are against the direction of the major trend. Let’s see how that works. In the case of a bear market, this would be entering a long position on a bounce. This move is sometimes called a “bear market rally” or a “dead cat bounce”. These counter-trend price moves can be notoriously volatile, as many traders may jump on the opportunity to long a short-term bounce. However, until the overall bear market is confirmed to be over, the assumption is that the downtrend will resume right after the bounce.  This is why successful traders will take profits (around the recent highs) and exit before the bear trend resumes. Otherwise, they could be stuck in their long position while the bear market continues. As such, it’s important to note that this is a highly risky strategy. Even the most advanced traders can incur significant losses when trying to catch a falling knife.    Closing thoughts We’ve discussed what a bear market is, how traders may protect themselves and profit off bear markets. In summary, the most straightforward strategy is to stay in cash in a bear market – and wait for a safer opportunity to trade. Alternatively, many traders will look for opportunities to build short positions. As we know, it’s wise to follow the direction of the market trend when it comes to trading.
Having A Look At The Markets Considering Tensions, COVID-19 And National Banks Decisions

One Of The Most Trending Topics - Interest Rates - What Are They?

Binance Academy Binance Academy 07.02.2022 07:45
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.   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.
Technical Analysis - Support And Resistance - Terms You Should Know

Technical Analysis - Support And Resistance - Terms You Should Know

Binance Academy Binance Academy 03.02.2022 14:50
Introduction The concepts of support and resistance are some of the most fundamental topics related to the technical analysis of financial markets. They apply to essentially any market, whether that’s stocks, forex, gold, or cryptocurrencies. While they’re simple concepts to understand, they’re actually quite difficult to master. Identifying them can be entirely subjective, they’ll work differently in changing market conditions, and you’ll need to understand their different types. But above all, you’ll need to study a lot of charts, and this guide will help you get started. Learn more on Binance.com   What are support and resistance? On the most fundamental level, support and resistance are simple concepts. The price finds a level that it’s unable to break through, with this level acting as a barrier of some sort. In the case of support, price finds a “floor,” while in the case of resistance, it finds a “ceiling.” Basically, you could think of support as a zone of demand and resistance as a zone of supply. While more traditionally, support and resistance are indicated as lines, the real-world cases are usually not as precise. Bear in mind; the markets aren’t driven by some physical law that prevents them from breaching a specific level. This is why it may be more beneficial to think of support and resistance as areas. You can think of these areas as ranges on a price chart that will likely drive increased activity from traders. Let’s look at an example of a support level. Note that the price continually entered an area where the asset was bought up. A support range was formed as the area was retested multiple times. And since the bears (sellers) were unable to push the price further down, it eventually bounced – potentially starting a new uptrend.   Price bouncing in an area of support before a breakout.   Now let’s look at a resistance level. As we can see, the price was in a downtrend. But after each bounce, it failed to break through the same area multiple times. The resistance level is formed because the bulls (buyers) were unable to gain control of the market and drive the price higher, causing the downtrend to continue.     Price unable to break an area of resistance.   How traders can use support and resistance levels Technical analysts use support and resistance levels to identify areas of interest on a price chart. These are the levels where the likelihood of a reversal or a pause in the underlying trend may be higher.  Market psychology plays a huge part in the formation of support and resistance levels. Traders and investors will remember the price levels that previously saw increased interest and trading activity. Since many traders may be looking at the same levels, these areas might bring increased liquidity. This often makes the support and resistance zones ideal for large traders (or whales) to enter or exit positions. Support and resistance are key concepts when it comes to exercising proper risk management. The ability to consistently identify these zones can present favorable trading opportunities. Typically, two things can happen once the price reaches an area of support or resistance. It either bounces away from the area or breaks through it and continues in the direction of the trend – potentially to the next support or resistance area. Entering a trade near a level of support or resistance area may be a beneficial strategy. Mainly because of the relatively close invalidation point – where we usually place a stop-loss order. If the area is breached and the trade is invalidated, traders can cut their loss and exit with a small loss. In this sense, the further the entry is from the zone of supply or demand, the further the invalidation point is. Something else to consider is how these levels may react to changing context. As a general rule, a broken area of support may turn into an area of resistance when broken. Conversely, if an area of resistance is broken, it may turn into a support level later, when it’s retested. These patterns are sometimes called a support-resistance flip.   Area of support breaks and turns into resistance when retested.   The fact that the previous support zone acts as resistance now (or vice versa) confirms the pattern. As such, the retest of the area may be a favorable place to enter a position. Another thing to consider is the strength of a support or resistance area. Typically, the more times the price drops and retests a support area, the more likely it is to break to the downside. Similarly, the more times the price increases and retests a resistance area, the more likely it is to break to the upside. So, we’ve gone through how support and resistance works when it comes to price action. But what other types of support and resistance are out there? Let’s go over a few of them.   Psychological support and resistance The first type we’ll discuss is called psychological support and resistance. These areas don’t necessarily correlate with any technical pattern but exist because of how the human mind tries to make sense of the world. In case you haven’t noticed, we live in a staggeringly complex place. As such, we inadvertently try to simplify the world around us so we can make more sense of it – and this includes rounding numbers up. Have you ever thought to yourself that you have a craving for 0.7648 of an apple? Or asked a merchant for 13,678,254 grains of rice? A similar effect is at play in the financial markets. It’s especially true for cryptocurrency trading, which involves easily divisible digital units. Buying an asset at $8.0674 and selling it at $9.9765 just isn’t processed the same as buying it at $8 and selling at $10. This is why round numbers can also act as support or resistance on a price chart. Well, if only it’d be that simple! This phenomenon has become well-known over the years. As such, some traders might try to “frontrun” obvious psychological support or resistance areas. Frontrunning, in this case, means placing orders just above or below an anticipated support or resistance area. Take a look at the example below. As the DXY approaches 100, some traders place sell orders just below that level to make sure those orders are filled. Because so many traders expect a reversal at 100 and many frontrun the level, the market never reaches it and reverses just before.   US Dollar Index (DXY) reverses before reaching 100.   Trend line support and resistance If you’ve read our classical chart patterns article, you’ll know that patterns will also act as barriers for price. In the example below, an ascending triangle keeps the price contained until the pattern breaks to the upside.   Trendlines acting as support and resistance for the S&P 500.   You can use these patterns to your advantage and identify areas of support and resistance that coincide with trend lines. They can be especially useful if you manage to spot them early, before the pattern is fully developed.   Moving average support and resistance Many indicators may also provide support or resistance when they interact with the price.  One of the most straightforward examples of this are moving averages. As a moving average acts as support or resistance for the price, many traders use it as a barometer for the overall health of the market. Moving averages may also be useful when trying to spot trend reversals or pivot points.   200-week moving average acting as support for the price of Bitcoin.   Looking to get started with cryptocurrency? Buy Bitcoin on Binance!   Fibonacci support and resistance Levels outlined by the Fibonacci retracement tool may also act as support and resistance. In our example below, the 61.8% Fibonacci level acts as support multiple times, while the 23.6% level acts as resistance.   Fibonacci levels acting as both support and resistance for the price of Bitcoin.   What is confluence in technical analysis? So far, we’ve discussed what support and resistance are, and some of their different types. But what’s the most effective way to build trading strategies around them? A key thing to understand is a concept called confluence. Confluence is when a combination of multiple strategies are used together to create one strategy. Support and resistance levels tend to be the strongest when they fall into multiple of these categories that we’ve discussed. Let’s consider this through two examples. Which potential support zone do you think has a higher chance to actually act as support?   Support 1 coincides with: a previous resistance area an important moving average a 61.8% Fibonacci level a round number in the price   Support 2 coincides with: a previous resistance area a round number in the price   If you’ve been paying attention, you’ll correctly guess that Support 1 has a higher chance of holding the price. While this may be true, the price could also fly through it. The point here is that the probability of it acting as support is higher than it is for Support 2. With that said, there are no guarantees when it comes to trading. While trading patterns can be helpful, past performance does not imply future performance, so you should be prepared for all possible outcomes. Historically, the setups that are confirmed by multiple strategies and indicators tend to provide the best opportunities. Some successful confluence traders might be very picky about what setups they enter – and it often involves a lot of waiting. However, when they do enter trades, their setups tend to work out with a high probability. Even so, it’s always essential to manage risk and protect your capital from unfavorable price movements. Even the strongest looking setups with the best entry points have a chance of going the other way. It’s important to consider the possibility of multiple scenarios, so you don’t fall into false breakouts or bull and bear traps.   Closing thoughts Regardless if you’re day trading or swing trading, support and resistance are fundamental concepts to understand when it comes to technical analysis. Support acts as a floor for price, while resistance acts as a ceiling. Different forms of support and resistance can exist, and some are based on the interaction of price with technical indicators. The most reliable support and resistance areas tend to be the ones that are confirmed by multiple strategies. If you’d like to read more about chart analysis, check out 12 Popular Candlestick Patterns Used in Technical Analysis.
Meaning Of The Bull Market - The Opposition To The Bear One

Bull Market - Meaning Which Everybody Wants To Know

Binance Academy Binance Academy 03.02.2022 12:18
Introduction Market trends are among the most fundamental aspects of financial markets. We can define a market trend as the overall direction that an asset or a market is going. As such, market trends are closely watched by both technical analysts and fundamental analysts. Bull markets tend to be relatively straightforward to trade, as they can allow for some of the easiest trading and investment strategies. Even inexperienced traders may do well in really favorable bull market conditions. With that said, it’s also crucial to understand how markets move in cycles. So, what should you know about bull markets? How can traders take advantage of bull markets? We’ll explain it all in this article. Learn more on Binance.com   What is a bull market? A bull market (or bull run) is a state of a financial market where prices are rising. The term bull market is often used in the context of the stock market. However, it can be used in any financial market – including Forex, bonds, commodities, real estate, and cryptocurrencies. Besides, a bull market may also refer to a specific asset such as Bitcoin, Ethereum, or BNB. It could even refer to a sector, such as utility tokens, privacy coins, or biotech stocks. You may have heard traders from Wall Street use the terms “bullish” and “bearish.” When a trader says they are bullish on a market, it means that they expect prices to rise. When they are bearish, they expect prices to decline. Being bullish can often mean that they are also long that market, though that may not necessarily be the case. Being bullish may not necessarily mean that a long trade opportunity is present right now, just that prices are rising or are expected to rise. It’s also worth noting that a bull market doesn’t mean that prices don’t fall or fluctuate. This is why it’s more sensible to consider bull markets on larger time frames. In this sense, bull markets will contain periods of decline or consolidation without breaking the major market trend. Take a look at the Bitcoin chart below. While there are periods of decline, and a few violent market crashes, it has been in a major uptrend since its inception.   The Bitcoin price chart (2010-2020).   So, in this sense, the definition of a bull market depends on what time frame we’re talking about. Generally, when we’re using the term bull market, we are talking about a time frame of months or years. As with other market analysis techniques, higher time frame trends will have more validity than lower time frame trends.  As such, there may be prolonged periods of decline in a high timeframe bull market. These counter-trend price movements have a notoriety for being especially volatile – though this can vary greatly.   Bull market examples Some of the most well-known examples of bull markets come from the stock market. These are the times when stock prices and market indexes (such as the Nasdaq 100) are continually rising. As far as the global economy is concerned, it fluctuates between bull and bear markets. These economic cycles can last years, even decades. Some say that the bull market starting from the aftermath of the 2008 Financial Crisis and lasting until the coronavirus pandemic was “the longest bull market in history.” This may or may not be true – as we’ve said, high time frame bull markets can be a matter of perspective.   Even so, let’s take a look at the long-term performance of the Dow Jones Industrial Average (DJIA). We can see that it basically has been in a century-long bull market. Certainly, there are periods of decline that can last for years, such as 1929 or 2008, but the overall trend is still pointing upwards.   Performance of the DJIA since 1915.   Some argue that we could see a similar trend with Bitcoin. But we can’t really tell if and when Bitcoin will face a multi-year bear market. It’s also worth noting that most other cryptocurrencies (i.e., altcoins) will probably never experience similar price appreciation, so be extremely aware of what you invest in.   Bull market vs. bear market – what’s the difference? These are opposite concepts, so the difference isn’t particularly difficult to guess. Prices are continuously going up in a bull market, while prices are continually going down in a bear market. This also results in differences in how it may be best to trade them. In a bull market, traders and investors will generally want to be long. While in a bear market, they either want to be short or stay in cash. In some cases, staying in cash (or stablecoins) may also mean shorting the market, since we’re expecting prices to decline. The main difference is that staying in cash is more about preserving capital while shorting is about profiting off the decline in asset prices. But if you sell an asset expecting to buy it back lower, you’re essentially in a short position – even if you are not directly profiting from the drop. One additional thing to consider is fees. Staying in stablecoins will likely not incur any fees, as there typically isn’t a cost to custody. However, many short positions will require a funding fee or interest rate to keep the position open. This is why quarterly futures may be ideal for long-term short positions, as there is no funding fee associated with them.       How traders can take advantage of bull markets The main idea behind trading bull markets is relatively simple. Prices are going up, so going long and buying dips is generally a reasonable strategy. This is why the buy and hold strategy and dollar-cost averaging are generally well-suited for long-term bull markets. There’s a saying that goes like this: “The trend is your friend, until it’s not.” This just means that it makes sense to trade with the direction of the market trend. At the same time, no trend will last forever, and the same strategy may not perform well in other parts of a market cycle. The only certainty is that the markets can and will change. As we’ve seen with the COVID-19 outbreak, multi-year bull markets can be wiped out in a matter of weeks. Naturally, most investors will be bullish in a bull market. This makes sense since prices are going up, so the overall sentiment should also be bullish. However, even during a bull market, some investors will be bearish. If their trading strategy accommodates for it, they may even be successful with short-term bearish trades, such as shorting. As such, some traders will try to short the recent highs in a bull market. However, these are advanced strategies and are generally more suitable for professional traders. As a less experienced trader, it’s usually more sensible to trade according to the trend. Many investors get trapped trying to short bull markets. After all, stepping in front of a raging bull or a locomotive can be a dangerous undertaking.   Closing thoughts We’ve discussed what a bull market is, and how traders may approach trading in bull market conditions. Typically, the most straightforward trading strategy in any market trend is to follow the direction of the overall trend.  As such, bull markets may present good trading opportunities, even for beginners or first-time investors. However, it’s always essential to manage risk properly and keep learning to avoid mistakes as much as possible. Do you still have questions about market trends, bull markets, or trading? Check out our Q&A platform, Ask Academy, where the Binance community will answer your questions.
Litecoin (LTC) Explained - The Way It Works, Terms Associated With LTC

Litecoin (LTC) Explained - The Way It Works, Terms Associated With LTC

Binance Academy Binance Academy 02.02.2022 09:37
TL;DR Litecoin (LTC) is an altcoin founded in 2011 by former Google engineer Charlie Lee. It aimed to be the lite version of Bitcoin that enables nearly instant and low-cost payments. Litecoin adopted the code and certain features of Bitcoin in its blockchain, but it prioritizes transaction confirmation speed to facilitate a higher transaction per second (TPS) and a shorter block generation time. Due to its similarity with Bitcoin, the Litecoin blockchain has been used as a testing ground for developers to experiment with technologies they want to implement on Bitcoin. For example, Segregated Witness (SegWit) and Lightning Network were run on the Litecoin blockchain before Bitcoin. Litecoin has a total supply of 84 million. Similar to Bitcoin, it is deflationary in nature and halves every 840,000 blocks (approximately every 4 years). The next halving is expected to happen in August 2023. Litecoin can be purchased on various cryptocurrency exchanges, including Binance.  Learn more on Binance.com   Introduction Litecoin (LTC) is one of the oldest of all altcoins on the market. When it was first introduced in 2011, Litecoin was branded as “the silver to bitcoin’s gold” for its blockchain was largely based on Bitcoin’s code. While some crypto investors view Bitcoin as a good store of value, Litecoin is often seen as a better option for peer-to-peer payments due to its lower confirmation time and transaction fees.     What is Litecoin (LTC)? Litecoin (LTC) is one of the first altcoins. Created by former Google engineer Charlie Lee in 2011, its blockchain was developed based on Bitcoin’s open-source codes. But Litecoin introduced certain modifications, such as a faster block generation rate and a different Proof of Work (PoW) mining algorithm called Scrypt.  Litecoin has a limited total supply of 84 million. Similar to Bitcoin, Litecoin can be obtained from mining and has a halving mechanism that occurs every 840,000 blocks (roughly 4 years). The last LTC halving was in August 2019, where the block rewards were halved from 25 LTC to 12.5 LTC. The next halving is expected to take place in August 2023.   How does Litecoin work? As a modified version of Bitcoin, Litecoin was designed to facilitate cheaper and more efficient transactions than the Bitcoin network. Like Bitcoin, Litecoin adopts the Proof of Work mechanism to enable miners to earn new coins by adding new blocks to its blockchain. However, Litecoin doesn’t use Bitcoin’s SHA-256 algorithm. Instead, LTC uses Scrypt, a hashing algorithm that can generate new blocks roughly every 2.5 minutes, while the Bitcoin block confirmation time takes 10 minutes on average.  Scrypt was initially developed by the Litecoin development team to grow its own decentralized mining ecosystem away from Bitcoin’s system and make the 51% attack on LTC more difficult. In the early days, Scrypt allowed for more easily accessible mining to those that used the traditional GPU and CPU cards. The goal was to prevent ASIC miners from dominating LTC mining. However, ASIC miners were later developed to mine LTC efficiently, causing GPU and CPU mining to become obsolete. As Bitcoin and Litecoin are somewhat similar, Litecoin was often used as a “testing ground” for developers to experiment with the blockchain technologies to be adopted on Bitcoin. For example, Segregated Witness (SegWit) was adopted on Litecoin before Bitcoin in 2017. Proposed for Bitcoin in 2015, SegWit aims to scale the blockchain by segregating out the digital signature from each transaction to better utilize the limited space on a block. This allowed the blockchains to process more transactions per second (TPS). Another scaling solution, the Lightning Network, was also implemented on Litecoin before Bitcoin. Lightning Network is one of the key components that makes Litecoin transactions more efficient. It is a layer 2 protocol created on top of Litecoin’s blockchain. It consists of micropayment channels generated by users, allowing for lower transaction fees. In addition, Litecoin is aiming to tackle the transaction privacy problem by adopting a privacy-oriented protocol called MimbleWimble Extension Block (MWEB). It’s named after the tongue-tying spell from the Harry Potter books, which prevents the victim from revealing information. Similar to the spell, MimbleWimble allows transaction information, including the sender and receiver’s addresses and the amount of crypto sent, to remain completely anonymous. At the same time, MWEB eliminates unnecessary transaction information, and the block sizes are more compact and scalable. As of December 2021, the Litecoin MWEB protocol is still under development.   Litecoin Use Cases As one of the first altcoins, Litecoin improved upon Bitcoin’s code to increase its scalability for faster transactions and lower fees. Despite not being able to compete with Bitcoin in terms of market cap, it has a competitive advantage as a peer-to-peer payment system. In fact, the Litecoin Foundation announced in November 2021 that LTC could be used as a payment method via the Litecoin VISA debit card by converting LTC into USD in real-time. In addition, certain businesses have added Litecoin as a payment method, spanning across travel companies, convenience stores, property agencies, and online stores.  Another thing to note is the highly-anticipated MimbleWimble release on the Litecoin network. MimbleWimble not only can obfuscate the wallet addresses in a transaction, but it could also potentially double Litecoin’s TPS. If successfully implemented, the upgrade can further enhance the privacy and fungibility of LTC transactions. However, there is no set release date on the mainnet as of December 2021.   How to buy Litecoin on Binance? You can buy Litecoin from crypto exchanges like Binance.  1. Log in to your Binance account and go to [Trade]. Choose either the [Classic] or [Advanced] trading mode to start. In this tutorial, we will select [Classic]. 2. Next, type “LTC” on the search bar to see a list of the available trading pairs on Binance. We will use LTC/BUSD as an example.     3. Under [Spot], choose the order type and enter the amount to buy. Click [Buy LTC] to place the order, and you will see the purchased LTC in your Spot Wallet.         Closing thoughts Litecoin has shown an ongoing development effort to be “the silver to bitcoin’s gold” since its debut in 2011. While it isn’t as popular as Bitcoin or Ethereum (ETH) in terms of market capitalization, the Litecoin community is expecting further development that can bring enhanced features and use cases.
What is Metaverse Powered By? It's Not Only About Blockchain

What is Metaverse Powered By? It's Not Only About Blockchain

Binance Academy Binance Academy 02.02.2022 08:17
TL;DR The metaverse is a concept of a 3D digital world. It consists of virtual spaces that you can explore using an avatar you create. In the metaverse, you can play games, go shopping, hang out with friends at a virtual coffee shop, work with your colleagues in a virtual office, and much more. Some video games and work socialization tools have already implemented certain metaverse elements into their ecosystems. Cryptocurrency projects like Decentraland and The Sandbox already have their digital world up and running. However, the metaverse concept is relatively new, so most of its functionalities are still under development. Companies like Facebook (now Meta), Microsoft, and Nvidia have also started creating their versions of the metaverse. To offer an immersive metaverse virtual experience, tech companies are incorporating cutting-edge technologies to power the 3D world’s development. Such technologies include blockchain, augmented reality (AR) and virtual reality (VR), 3D reconstruction, artificial intelligence (AI), and the Internet of things (IoT).   Learn more on Binance.com Introduction The idea of a metaverse originated from Neal Stephenson in 1992. His science fiction novel Snow Crash envisioned an online world where people could use digital avatars to explore and escape from the real world. Decades later, big technology companies have started to build their own versions of a futuristic metaverse. What is the metaverse, and how are big companies approaching it on the technology front?     What is the metaverse? The metaverse is a concept of an online 3D digital world with virtual land and objects. Imagine a world in which you can work remotely, visit virtual museums to see the latest artworks, or join your fellow rock band fans at a virtual concert, all from the comfort of your home. Axie Infinity, The Sandbox, Decentraland have already incorporated certain aspects of the metaverse to bring multiple elements of our lives into online worlds. However, the metaverse is still under development. No one knows whether there will be just one big all-encompassing metaverse or multiple metaverses that you can travel around.  As the idea continues to develop, it’s expected to expand beyond video games and social media platforms. Remote working, decentralized governance, and digital identity are just some of the potential features the metaverse can support. It can also become more multi-dimensional via connected VR headsets and glasses, so users can actually walk around physically to explore the 3D spaces.   The latest development of the metaverse With Facebook changing its name to Meta in October 2021, the metaverse became the new favorite buzzword. To cater for its rebranding, the social media giant poured resources into a new division called Reality Labs to spend at least 10 billion dollars in 2021. The idea is to develop metaverse content, software, as well as AR and VR headsets, as CEO Mark Zuckerberg believes will be as widespread as smartphones in the future. The COVID-19 pandemic has also accelerated the interest in developing metaverses. There is an increased demand for more interactive ways to connect with others as more people have started working remotely. Virtual 3D spaces that let coworkers join meetings, catch up, and collaborate are on the rise. The Microsoft Mesh unveiled in November 2021 is an example. It features immersive spaces for users to mingle and collaborate using their avatars, making remote team meetings more engaging and fun. Some online games are embracing the metaverse as well. The AR mobile game Pokémon Go was among the first to tap into the concept by allowing players to hunt virtual Pokémons in the real world using a smartphone app. Fortnite, another popular game, has expanded its product to different activities inside its digital world, including hosting brand events and concerts.  Apart from social media and gaming platforms, tech companies like Nvidia have opened new opportunities in virtual worlds. Nvidia Omniverse is an open platform designed to connect 3D spaces into a shared universe to facilitate virtual collaboration between engineers, designers, and creators. It's currently being used across different industries. For instance, the BMW Group is using the Omniverse to reduce production time and improve product quality by smart manufacturing.   Key technologies that power the metaverse To make the metaverse experience more immersive, companies are using cutting-edge technologies like blockchain, augmented reality (AR) and virtual reality (VR), 3D reconstruction, artificial intelligence (AI), and the Internet of things (IoT) to power the 3D world.   Blockchain and cryptocurrency Blockchain technology provides a decentralized and transparent solution for digital proof of ownership, digital collectibility, transfer of value, governance, accessibility, and interoperability. Cryptocurrencies enable users to transfer value while they work and socialize in the 3D digital world.  For example, crypto can be used to buy virtual lands in Decentraland. Players can purchase 16x16 meter land parcels in the form of non-fungible tokens (NFTs) with the game’s cryptocurrency MANA. With the support of blockchain technology, the ownership of these virtual lands can be established and secured. In the future, crypto can potentially incentivize people to actually work in the metaverse. As more companies take their offices online for remote working, we might see metaverse-related jobs being offered. For a more in-depth exploration of these areas, check out What Is the Metaverse?.    Augmented reality (AR) and virtual reality (VR) Augmented reality (AR) and virtual reality (VR) can give us an immersive and engaging 3D experience. These are our entry points to the virtual world. But what’s the difference between AR and VR? AR uses digital visual elements and characters to morph the real world. It’s more accessible than VR and can be used on almost any smartphone or digital device with a camera. Through AR applications, users can view their surroundings with interactive digital visuals, similar to what we have in the mobile game Pokémon GO. When players open the camera on their phones, they can see Pokémons in the real-world environment. VR works differently. Much like the metaverse concept, it produces an entirely computer-generated virtual environment. Users can then explore it using VR headsets, gloves, and sensors. The way AR and VR work shows an early model of the metaverse. VR is already creating a digital world that incorporates fictional visual content. As its technology becomes more mature, VR can expand the metaverse experience to involve physical simulations with VR equipment. Users will be able to feel, hear and interact with people from other parts of the world. Considering the hype around the metaverse, we can expect more metaverse companies to invest in AR and VR equipment development in the near future.   Artificial intelligence (AI) Artificial intelligence (AI) has been widely applied in our lives in recent years: business strategy planning, decision making, facial recognition, faster computing, and more. More recently, AI experts have been studying the possibilities of applying AI to the creation of immersive metaverses.  AI has the potential to process a lot of data at lightning speed. Combined with machine learning techniques, AI algorithms can learn from previous iterations, taking into account historical data to come up with unique outputs and insights.  Within the metaverse, AI can be applied to the non-player characters (NPCs) in different scenarios. NPCs exist in almost every game; they are a part of the gaming environment designed to react and respond to players’ actions. With AI’s processing abilities, NPCs can be placed across the 3D spaces to facilitate lifelike conversations with users or perform other specific tasks. Unlike a human user, an AI NPC can run on its own and be used by millions of players at the same time. It can also work in several different languages. Another potential application for AI is in the creation of metaverse avatars. AI engines can be used to analyze 2D images or 3D scans to generate avatars that look more realistic and accurate. To make the process more dynamic, AI can also be used to create different facial expressions, hairstyles, clothes, and features to enhance the digital humans we create.   3D reconstruction While this is not new technology, the use of 3D reconstruction has been rising during the pandemic, especially in the real estate industry, as lockdowns prevented potential buyers from visiting properties in person. Therefore, some agencies adopted 3D reconstruction technology to generate virtual property tours. Much like the metaverse we imagined, buyers could look around potential new homes from anywhere and make purchases without even having stepped foot inside. One of the challenges for the metaverse is to create a digital environment that appears as close to our real world as possible. With the help of 3D reconstruction, it can create realistic and natural-looking spaces. Through special 3D cameras, we can take our world online by rendering accurate 3D photorealistic models of buildings, physical locations, and objects. The 3D spatial data and 4K HD photography are then passed to computers to process and generate a virtual replica in the metaverse for users to experience. These virtual replicas of physical world objects can also be referred to as digital twins.   Internet of things (IoT) The concept of the Internet of things (IoT) was first introduced in 1999. Simply put, IoT is a system that takes everything in our physical world and connects them to the Internet through sensors and devices. After connecting to the Internet, these devices will have a unique identifier and the ability to send or receive information automatically. Today, IoT is connecting thermostats, voice-activated speakers, medical devices, and much more to a wide range of data. One of the applications of IoT on the metaverse is to collect and provide data from the physical world. This would increase the accuracy of the digital representations. For example, IoT data feeds could change the way certain metaverse objects function based on the current weather or other conditions.  Implementing IoT can seamlessly connect the 3D world to a large number of real-life devices. This enables the creation of real-time simulations in the metaverse. To further optimize the metaverse environment, IoT could also use AI and machine learning to manage the data it collects.   Challenges of the metaverse The metaverse is still in its early stages of development. Some challenges include identity authentication and privacy control. In the real world, it's often not difficult to identify someone. But as people traverse the digital world in their avatars, it will be difficult to tell or prove who the other person is. For example, malicious actors or even bots could enter the metaverse pretending to be someone else. They could then use this to damage their reputation or to scam other users. Another challenge is privacy. The metaverse relies on AR and VR devices to offer an immersive experience. These technologies with camera capabilities and unique identifiers could eventually lead to undesirable leaks of personal information.     Closing thoughts While the metaverse is still under development, many companies are already exploring its potential. In the crypto space, Decentraland and The Sandbox are notable projects, but big companies like Microsoft, Nvidia, and Facebook are also getting involved. As AR, VR, and AI technologies advance, we will likely see exciting new features in these virtual, borderless worlds.
Metaverse Meaning and Facts. Some Would Say It's Like A Virtual Life

Metaverse Meaning and Facts. Some Would Say It's Like A Virtual Life

Binance Academy Binance Academy 01.02.2022 14:08
TL;DR The metaverse is a concept of a persistent, online, 3D universe that combines multiple different virtual spaces. You can think of it as a future iteration of the internet. The metaverse will allow users to work, meet, game, and socialize together in these 3D spaces. The metaverse isn’t fully in existence, but some platforms contain metaverse-like elements. Video games currently provide the closest metaverse experience on offer. Developers have pushed the boundaries of what a game is through hosting in-game events and creating virtual economies. Although not required, cryptocurrencies can be a great fit for a metaverse. They allow for creating a digital economy with different types of utility tokens and virtual collectibles (NFTs). The metaverse would also benefit from the use of crypto wallets, such as Trust Wallet and MetaMask. Also, blockchain technology can provide transparent and reliable governance systems. Blockchain, metaverse-like applications already exist and provide people with liveable incomes. Axie Infinity is one play-to-earn game that many users play to support their income. SecondLive and Decentraland are other examples of successfully mixing the blockchain world and virtual reality apps. When we look to the future, big tech giants are trying to lead the way. However, the decentralized aspects of the blockchain industry is letting smaller players participate in the metaverse’s development as well. Learn more on Binance.com   Introduction The connections between the financial, virtual, and physical worlds have become increasingly linked. The devices we use to manage our lives give us access to almost anything we want at the touch of a button. The crypto ecosystem hasn't escaped this either. NFTs, blockchain games, and crypto payments aren't just limited to crypto geeks anymore. They're now all easily available as part of a developing metaverse.     What’s the definition of a metaverse? The metaverse is a concept of an online, 3D, virtual space connecting users in all aspects of their lives. It would connect multiple platforms, similar to the internet containing different websites accessible through a single browser.  The concept was developed in the science-fiction novel Snow Crash by Neal Stephenson. However, while the idea of a metaverse was once fiction, it now looks like it could be a reality in the future. The metaverse will be driven by augmented reality, with each user controlling a character or avatar. For example, you might take a mixed reality meeting with an Oculus VR headset in your virtual office, finish work and relax in a blockchain-based game, and then manage your crypto portfolio and finances all inside the metaverse. You can already see some aspects of the metaverse in existing virtual video game worlds. Games like Second Life and Fortnite or work socialization tools like Gather.town bring together multiple elements of our lives into online worlds. While these applications are not the metaverse, they are somewhat similar. The metaverse still doesn’t exist yet.  Besides supporting gaming or social media, the metaverse will combine economies, digital identity, decentralized governance, and other applications. Even today, user creation and ownership of valuable items and currencies help develop a single, united metaverse. All these features provide blockchain the potential to power this future technology.   Why are video games linked to the metaverse? Because of the emphasis on 3D virtual reality, video games offer the closest metaverse experience currently. This point isn’t just because they are 3D, though. Video games now offer services and features that cross over into other aspects of our lives. The video game Roblox even hosts virtual events like concerts and meetups. Players don't just play the game anymore; they also use it for other activities and parts of their lives in "cyberspace". For example, in the multiplayer game Fortnite, 12.3 million players took part in Travis Scott's virtual in-game music tour.   How does crypto fit into the metaverse? Gaming provides the 3D aspect of the metaverse but doesn’t cover everything needed in a virtual world that can cover all aspects of life. Crypto can offer the other key parts required, such as digital proof of ownership, transfer of value, governance, and accessibility. But what do these mean exactly? If, in the future, we work, socialize, and even purchase virtual items in the metaverse, we need a secure way of showing ownership. We also need to feel safe transferring these items and money around the metaverse. Finally, we will also want to play a role in the decision-making taking place in the metaverse if it will be such a large part of our lives. Some video games contain some basic solutions already, but many developers use crypto and blockchain instead as a better option. Blockchain provides a decentralized and transparent way of dealing with the topics, while video-game development is more centralized. Blockchain developers also take influence from the video game world too. Gamification is common in Decentralized Finance (DeFi) and GameFi. It seems there will be enough similarities in the future that the two worlds may become even more integrated. The key aspects of blockchain suited to the metaverse are: 1. Digital proof of ownership: By owning a wallet with access to your private keys, you can instantly prove ownership of activity or an asset on the blockchain. For example, you could show an exact transcript of your transactions on the blockchain while at work to show accountability. A wallet is one of the most secure and robust methods for establishing a digital identity and proof of ownership. 2. Digital collectibility: Just as we can establish who owns something, we can also show that an item is original and unique. For a metaverse looking to incorporate more real-life activities, this is important. Through NFTs, we can create objects that are 100% unique and can never be copied exactly or forged. A blockchain can also represent ownership of physical items. 3. Transfer of value: A metaverse will need a way to transfer value securely that users trust. In-game currencies in multiplayer games are less secure than crypto on a blockchain. If users spend large amounts of time in the metaverse and even earn money there, they will need a reliable currency. 4. Governance: The ability to control the rules of your interaction with the metaverse should also be important for users. In real life, we can have voting rights in companies and elect leaders and governments. The metaverse will also need ways to implement fair governance, and blockchain is already a proven way of doing this. 5. Accessibility: Creating a wallet is open to anyone around the world on public blockchains. Unlike a bank account, you don't need to pay any money or provide any details. This makes it one of the most accessible ways to manage finances and an online, digital identity. 6. Interoperability: Blockchain technology is continuously improving compatibility between different platforms. Projects like Polkadot (DOT) and Avalanche (AVAX) allow for creating custom blockchains that can interact with each other. A single metaverse will need to connect multiple projects, and blockchain technology already has solutions for this.   What is a metaverse job? As we mentioned, the metaverse will combine all aspects of life in one place. While many people already work at home, in the metaverse, you will be able to enter a 3D office and interact with your colleagues’ avatars. Your job may also be metaverse related and provide you with income directly usable in the metaverse. In fact, these kinds of jobs already exist in a similar form. GameFi and play-to-earn models now provide steady income streams for people worldwide. These online jobs are great candidates for metaverse implementation in the future, as they show that people are willing to spend their time living and earning in virtual worlds. Play-to-earn games like Axie Infinity and Gods Unchained don’t even have 3D worlds or avatars. However, it’s the principle that they could be part of the metaverse as a way to earn money entirely in the online world.   Metaverse examples While we don't yet have a single, linked metaverse, we have plenty of platforms and projects similar to the metaverse. Typically, these also incorporate NFTs and other blockchain elements. Let's look at three examples: SecondLive ‌SecondLive is a 3D virtual environment where users control avatars for socializing, learning, and business. The project also has an NFT marketplace for swapping collectibles. In September 2020, SecondLive hosted Binance Smart Chain's Harvest Festival as part of its first anniversary. The virtual expo showcased different projects in the BSC ecosystem for users to explore and interact with.     Axie Infinity Axie Infinity is a play-to-earn game that’s provided players in developing countries an opportunity to earn consistent income. By purchasing or being gifted three creatures known as Axies, a player can start farming the Smooth Love Potion (SLP) token. When sold on the open market, someone could make roughly $200 to $1000 (USD) depending on how much they play and the market price. While Axie Infinity doesn't provide a singular 3D character or avatar, it gives users the opportunity for a metaverse-like job. You might have already heard the famous story of Filipinos using it as an alternative to full-time employment or welfare.     Decentraland Decentraland is an online, digital world that combines social elements with cryptocurrencies, NFTs, and virtual real estate. On top of this, players also take an active role in the governance of the platform. Like other blockchain games, NFTs are used to represent cosmetic collectibles. They're also used for LAND, 16x16 meter land parcels that users can purchase in the game with the cryptocurrency MANA. The combination of all of these creates a complex crypto-economy.     What's the future of the metaverse? Facebook is one of the loudest voices for the creation of a unified metaverse. This is particularly interesting for a crypto-powered metaverse due to Facebook's Diem stablecoin project. Mark Zuckerberg has explicitly mentioned his plans to use a metaverse project to support remote work and improve financial opportunities for people in developing countries. Facebook’s ownership of social media, communication, and crypto platforms give it a good start combining all these worlds into one. Other large tech companies are also targeting the creation of a metaverse, including Microsoft, Apple, and Google. When it comes to a crypto-powered metaverse, further integration between NFT marketplaces and 3D virtual universes seems like the next step. NFT holders can already sell their goods from multiple sources on marketplaces like OpenSea and BakerySwap, but there isn’t yet a popular 3D platform for this. At a bigger scale, blockchain developers might develop popular metaverse-like applications with more organic users than a large tech giant.     Closing thoughts While a single, united metaverse is likely a long way off, we already can see developments that may lead to its creation. It looks to be yet another sci-fi use case for blockchain technology and cryptocurrencies. If we will ever really reach the point of a metaverse is unsure. But in the meantime, we can already experience metaverse-like projects and continue to integrate blockchain more into our daily lives.
NFTs - What Are They? How Do They Work? What You Can Do With NFT?

NFTs - What Are They? How Do They Work? What You Can Do With NFT?

Binance Academy Binance Academy 28.01.2022 14:09
Introduction The creation of Bitcoin introduced the concept of trustless, digital scarcity. Before it, the cost of digitally copying something was next to nothing. With the advent of blockchain technology, programmable digital scarcity has become possible – letting us map the digital world to the real world. Non-fungible tokens (NFTs), often referred to as crypto-collectibles, expand this idea. Unlike cryptocurrencies, where each token is equal, non-fungible tokens are unique and limited in quantity.  NFTs are a key building block in a new, blockchain-powered digital economy. Numerous projects have experimented with NFTs in a variety of use cases, including gaming, digital identity, licensing, certificates, and fine art. What’s more, NFTs even allow for fractional ownership of high-value items.  NFTs have become much easier to issue, and we’re seeing increasing amounts minted daily.  This article will dive into what NFTs are, what they can be used for, and how a game called CryptoKitties congested the Ethereum blockchain in late 2017. Learn more on Binance.com     What is a non-fungible token (NFT)? A non-fungible token (NFT) is a type of cryptographic token on a blockchain that represents a unique asset. These can either be entirely digital assets or tokenized versions of real-world assets. As NFTs aren’t interchangeable with each other, they may function as proof of authenticity and ownership within the digital realm. Fungibility means that an asset’s individual units are interchangeable and essentially indistinguishable from each other. For example, fiat currencies are fungible because each unit is interchangeable with any other equivalent individual unit. A ten-dollar bill is interchangeable with any other genuine ten-dollar bill. This is imperative for an asset that aims to act as a medium of exchange.  Fungibility is a desirable property for currency because it enables free exchange, and theoretically, there is no way to know the history of each individual unit. However, that isn’t a beneficial trait for collectible items.  What if we could create digital assets similar to Bitcoin but instead add a unique identifier to each unit? This would make each of them different from all the other units (i.e., non-fungible). Essentially, this is what an NFT is.     How do NFTs work? There are various frameworks for the creation and issuance of NFTs. The most prominent of these is ERC-721, a standard for the issuance and trading of non-fungible assets on the Ethereum blockchain. A more recent, improved standard is ERC-1155. It enables a single contract to contain both fungible and non-fungible tokens, opening up a whole new range of possibilities. The standardization of the issuance of NFTs allows a higher degree of interoperability, which ultimately benefits the users. It basically means that unique assets can be transferred between different applications with relative ease.  Binance Smart Chain (BSC) has its own NFT standards: BEP-721 and BEP-1155. These two provide similar functionality to the previously mentioned Ethereum standards. Both have become attractive for creators looking to mint NFTs as the cost is substantially lower than Ethereum.  If you are looking to store and gaze upon the beauty of your NFTs, you can do that in Trust Wallet. Just like other blockchain tokens, your NFT will exist on an address. It’s worth noting that NFTs can’t be replicated or transferred without the owner’s permission – even by the issuer of the NFT. NFTs can be traded in open marketplaces, including  Treasureland, BakerySwap, and Juggerworld on BSC, and OpenSea on Ethereum. These markets connect buyers with sellers, and the value of each token is unique. Naturally, NFTs are prone to price changes in response to market supply and demand.  But how can such things have value? Just like with any other valuable item, the value isn’t inherent to the object itself but is rather assigned by people who deem it valuable. In essence, value is a shared belief. It doesn’t matter if it’s fiat money, precious metals, or a vehicle – these things have value because people believe they do. This is how every valuable item becomes valuable, so why not digital collectibles?   What can NFTs be used for? NFTs can be used by decentralized applications (DApps) to issue unique digital items and crypto-collectibles. These tokens can either be a collectible item, an investment product, or something else.  Gaming economies are nothing new. And since many online games have already had their own economies, using blockchain to tokenize gaming assets is taking only a step further. In fact, the use of NFTs could potentially solve or mitigate the common problem of inflation that many games have. While virtual worlds are already flourishing, another exciting use of NFTs is the tokenization of real-world assets. These NFTs can represent fractions of real-world assets that can be stored and traded as tokens on a blockchain. This could introduce some well-needed liquidity to many markets that otherwise wouldn’t have much, such as fine art, real estate, rare collectible items, and many more. Digital identity is also a sector that can benefit from the properties of NFTs. Storing identification and ownership data on the blockchain would increase privacy and data integrity for many people around the world. At the same time, easy and trustless transfers of these assets could reduce friction in the global economy.   How do I make NFTs? Creating your own NFTs on either BSC or Ethereum is a simple process offered by numerous platforms and NFT exchanges. All you need to get started is some crypto to pay your minting fee and something to turn into an NFT. You’ll also need to choose between minting your NFT on Ethereum or Binance Smart Chain. Ethereum has traditionally been the home of NFTs and their development. It has a large user base and well established NFT community, but transaction fees are very costly. This makes small purchases, sales, and transactions costly for users. BSC is a newer blockchain but has already seen a lot of growth in its NFT markets. Transactions are also much cheaper. Our guide on How to Make Your Own NFTs will teach you the process of turning your creations into non-fungible tokens.   How do I buy NFTs? As we mentioned, NFT marketplaces are the first place you should look if you want to buy non-fungible tokens. But that’s not all the information you need. You can’t just buy NFTs with a credit card or PayPal. A crypto wallet and some crypto are essential to the process. For Binance Smart Chain NFTs, prices will almost always be in BNB. Ethereum NFTs will typically use ether (ETH). Both of these cryptocurrencies are available to buy on the Binance exchange. Once you’ve purchased your chosen crypto, move the funds to a wallet that can interact with NFT marketplaces. Binance Chain Wallet and MetaMask are good options for browser extension wallets. Both can be connected to an NFT marketplace. You just need to transfer your crypto from Binance to your wallet, go to the marketplace’s website, and connect your wallet (the connect button is usually in the top right corner). Be careful with fake or suspicious websites. Double-check the URL and consider bookmarking if you use it often. If you prefer a mobile experience, take a look at Trust Wallet. It’s available for both iOS and Android and also supports multiple blockchains. Don’t forget that interacting with Ethereum and BSC isn’t free! It’s always worth having some extra crypto for paying transaction fees.   The story of CryptoKitties and Ethereum  One of the first NFT projects to gain significant traction was CryptoKitties, a game built on Ethereum that allows players to collect, breed, and exchange virtual cats.     Each CryptoKitty can have a combination of several different properties, such as age, breed, or color. As such, each of them is unique, and they can’t be interchanged with each other. Also, they are indivisible, meaning that there’s no way to divide a CryptoKitty token into smaller parts (such as the gwei for ether). CryptoKitties gained some notoriety after it congested the Ethereum blockchain due to the high activity it stirred up on the network. An estimated 25% of Ethereum’s traffic in December 2017 was related to these collectible cats. It’s clear that the game caused a big impact on the Ethereum network, but other factors also contributed to it, including the Initial Coin Offering (ICO) boom. CryptoKitties is an early example of a blockchain use case that isn’t a currency, but something used for recreation and leisure. Collectively, these virtual cats moved millions of dollars, and some of the rare units were sold for hundreds of thousands of dollars each.   Popular projects using NFTs and crypto collectibles Many different projects already use NFTs as collectible and tradable items. Let’s go through a selection of some of the most popular ones.   Decentraland Decentraland is a decentralized virtual reality world where players can own and exchange pieces of virtual land and other in-game NFT items. Cryptovoxels is a similar game where players can build, develop, and exchange virtual property.     PancakeSwap PancakeSwap is BSC’s most used automated market maker by volume, and it has one of the most popular NFTs. The project releases collectible bunnies in giveaways and competitions to the platform’s users. Some are purely decorative, and others are exchangeable for CAKE, the platform’s native token.     Gods Unchained Gods Unchained is a digital collectible card game where cards are issued as NFTs on the blockchain. Since each digital card is unique, players can own and trade them with the same level of ownership as if they were physical cards.     CryptoPunks CryptoPunks are collectible pieces of digital art, each one depicting a unique, 8-bit-style NFT character. The project was an inspiration for the ERC-721 token standard and was one of the first examples of a crypto art craze. CryptoPunks have since sold for millions of dollars and inspired many similar projects around the world.     Binance Collectibles & NFTs Binance gives out NFTs in special giveaways, as well as to users based on their Binance activity. From trading futures to Pizza Day NFTs, you can regularly get your hands on Binance collectibles that are also tradeable.     Binance Collectibles is another example. These are NFTs issued in collaboration with Enjin. If you’d like to get your hands on one, make sure to follow Binance on Twitter and look for the next giveaways! If you’d like to participate in an NFT giveaway, follow these short steps: 1. Download a wallet that supports Ethereum, such as Trust Wallet.  2. Copy your Ethereum address and provide it according to the giveaway rules. You might have to submit it through a form or leave it as a Twitter comment. Be sure to double-check the rules to know what you need to do to enter. 3. If you’ve won an NFT and it’s been distributed, you’ll see it under the Collectibles tab in Trust Wallet. From then on, you can choose to either HODL or sell at a P2P marketplace.     The Binance NFT Marketplace allows users to mint and trade NFTs of their own creation. It includes exclusive NFTs from famous creatives around the world, such as the musician Lewis Capaldi and crypto artist Trevor Jones. The platform also offers royalties to creators for any subsequent sales through the marketplace.   Crypto Stamps Crypto Stamps are issued by the Austrian Postal Service and connect the digital world to the real world. These stamps are used to transport mail like any other stamp. But, they are also saved as digital images on the Ethereum blockchain, making them a tradable digital collectible.     Closing thoughts Digital collectibles open up blockchain technology to whole new avenues outside of conventional financial applications. By representing physical assets in the digital world, NFTs can be a vital part of the blockchain ecosystem and the wider economy. The use cases are vast, and it’s quite likely that many developers will come up with new and exciting innovations for this promising technology.
Altcoins to Watch: Algorand (ALGO) explained - What is ALGO?

Altcoins to Watch: Algorand (ALGO) explained - What is ALGO?

Binance Academy Binance Academy 26.01.2022 08:58
TL;DR Algorand was founded in 2017 before launching its mainnet and ALGO token in June 2019. The blockchain deals with the common scalability and consensus mechanism issues common to first and second-generation blockchains. Algorand's main feature is its Pure Proof of Stake consensus protocol that randomly selects validators weighted by their staked ALGO coin. Users who stake their ALGO have the chance of being selected to propose and validate a new block, which is then verified by a randomly-selected committee. Once the block is added to the blockchain, all transactions are considered confirmed. If the block is deemed bad, a new user is selected as a validator, and the process starts again. Learn more on Binance.com The system's main strength is its decentralization of power, as every single staker has the chance to be a validator. Apart from consensus, ALGO is also used for network transaction fees and to earn block rewards. If you want to buy or sell ALGO, you can easily do so through Binance's convert feature or exchange view. Introduction Algorand is a fairly new blockchain focused on improving scalability without sacrificing decentralization. This problem is common to many of the first and second-generation blockchains, such as Bitcoin and Ethereum. To achieve this, Algorand developed perhaps its most notable feature: the Pure Proof of Stake (PPoS) consensus mechanism. Along with its passive staking, both of these features have made Algorand a large market cap project popular with users seeking rewards. What is Algorand? Algorand is a blockchain network and project founded in 2017 by Professor Silvio Micali, a computer scientist from MIT. The mainnet network launched in June 2019 along with its native cryptocurrency, ALGO. As mentioned, the blockchain focuses on improved scalability and also supports smart contracts. The Algorand network is a public, decentralized, Pure Proof-of-Stake blockchain with support for customized layer-1 blockchains. These can be used to create blockchains tailored for specific uses. The project claims its technology is particularly useful for financial services, Decentralized Finance (DeFi), fintech, and institutions.   What is the Algorand Foundation? The Algorand Foundation is a non-profit organization launched in 2019 that funds and develops the Algorand network. It also carries out important work in the blockchain's community, research, and governance.  For example, the Foundation has educated developers in universities and supported Algorand projects in its ecosystem with accelerator programs. However, technical development work is carried out by the private company Algorand Inc. The Algorand Foundation is also a large holder of ALGO, which it uses to fund its activities. How does Algorand work? The key to Algorand's scalability comes from its Pure Proof of Stake consensus mechanism. This protocol allows it to process many transactions quickly without sacrificing decentralization. Proof of Stake (PoS) blockchains are scalable but often at the cost of a small number of validators who have large stakes dominating block approvals. Proof of Work (PoW) has the same issue as large mining pools almost always win the race to create new blocks. In contrast, Alogrand's PPoS consensus mechanism chooses validators and block proposers randomly from anyone who has staked and generated a participation key. The chance of being chosen is directly related to the proportion of the participant’s stake of the overall amount staked.  Naturally, a small holder will have lower chances of being selected than a big holder. But unlike PoS blockchains, Algorand doesn’t require a minimum stake, which is a significant barrier to entry for the average user. With every staker who runs a node being a possible validator, the network's security is more decentralized than with a chosen set of validators, such as in Delegated Proof of Stake (DPoS). Proposal step Once users have staked and generated their participation key, they become participation nodes. Communication between these nodes happens through Algorand relay nodes. The block proposal phase then selects multiple block proposers using a Verifiable Random Function (VRF), considering the proportion of each validator's stake. Once block proposers are chosen, their identity is kept secret until the new block is proposed. This improves network security as bad actors cannot maliciously target the chosen validator. However, a proposer can demonstrate their VRF output along with their proposed block to prove their legitimacy. Soft vote stage Once a block is submitted, participation nodes are selected randomly to join the soft vote committee. This stage filters proposals, so only one candidate can add to the blockchain. Voting power on the soft committee is proportional to the amount each node has staked, and votes are used to select a proposed block with the lowest VRF hash. This means that it will be impossible to preemptively attack the proposer of a block, as the lowest VRF hash is a value that is impossible to predict. Certify vote stage Next, a new committee is created to check for double-spending and the integrity of transactions in the block from the soft vote stage. If the committee deems the work valid, the block is added. If not, the block is rejected, the blockchain enters recovery mode, and a new block is selected. There’s no slashing penalty for the leader who proposes a bad block, making it a controversial part of the PPoS consensus mechanism. The chance of a fork with Algorand is extremely rare, as only one block proposal reaches the certify stage at a time. Once the block is added, all transactions are then treated as final.   What is ALGO? ALGO is the native coin of Algorand and has a maximum total supply of 10 billion coins to be distributed by 2030. New ALGO is sent to specific ALGO-holding wallets with each newly forged block. You need to hold at least 1 ALGO in a non-custodial wallet to receive these ALGO rewards. This reward can generate an APY of around 5-8% for ALGO holders and is distributed roughly every 10 minutes. This mechanism makes the ALGO coin one of the simplest cryptocurrencies to generate a passive income with, as you can "passively stake" the token. What are ALGO’s use cases? Like many other native coins, ALGO has three primary use cases: 1. ALGO can be used to pay transaction fees on the Algorand Network. Compared to networks like Ethereum (ETH) and Bitcoin (BTC), Algorand has minimal fees. As of January 2022, it costs only $0.0014 per transaction. 2. ALGO can be staked to have a chance of being selected as a block proposer or validator. 3. ALGO can be held in a non-custodial wallet to earn rewards with every block that is successfully added to the chain. The third use case provides a large incentive for the average user investing in ALGO. There's no need to deal with a Decentralized Application (DApp) to stake your coins or a lock-up period to begin earning. It’s all automatically handled by smart contracts. Algorand also publishes a list of projects adopting the blockchain's technology, many of which require ALGO to be used. How to Buy ALGO on Binance You can purchase ALGO on Binance in just two steps with a credit or debit card. If you already have crypto in your account, you may be able to swap directly for ALGO if it's in a pair with the coin you hold. To begin, let's look at using a credit or debit card. As ALGO is not directly purchasable with fiat, you'll need to purchase another token in an ALGO trading pair. BUSD is a good option, as its price is stable. You can see a complete list of available pairs further down this guide. 1. Log in to your Binance account and hover over the [Buy Crypto] header at the top left of the homepage. In the drop-down menu, select [Credit/Debit Card].     2. Next, select the fiat currency you'll pay with your card in the top field. In the bottom field, choose your desired cryptocurrency. Make sure that it is in a pair with ALGO to trade for it directly. 3. Click [Continue] and accept any terms and conditions if it's your first time purchasing with fiat.     4. Click [Add new card] or select a card already added to your account, and then follow the instructions for completing your payment.         5. Now, you'll need to swap your BUSD for ALGO. You can do this easily with the [Convert] feature accessible under the [Trade] header.       6. Select the crypto you want to convert from in the top field and ALGO in the bottom. If you cannot see ALGO in the bottom field, it is not in a trading pair with your chosen crypto. Click [Preview Conversion] after entering the amount you want to swap.     7. You'll now see a preview of the amount of ALGO you'll receive with clear instructions on how to proceed. Once you have swapped, the ALGO will be in your Spot Wallet.       8. You can also trade using the Classic or Advanced exchange view. By hovering over the currently displayed pair, you can search for all available ALGO pairs.         How to Sell ALGO on Binance 1. To sell ALGO, you can use the Convert feature again. This time, select ALGO in the top field and the cryptocurrency you want to convert to at the bottom. Click [Preview Conversion] to check the exchange rate.       2. Once you've confirmed the amount you'll receive, follow the instructions given to finalize your trade.       3. You can then convert to fiat using the same process so long as the coin you traded your ALGO for is in a fiat pair.   Conclusion Like other alternative blockchains to Bitcoin and Ethereum, Algorand has focused heavily on scalability and decentralization. Its Pure Proof of Stake consensus mechanism provides a unique solution with VRFs, and many find this blockchain technology attractive for its success in decentralizing power.