decentralized finance

Jan 17 2021

IOHK, which Supports Cardano (ADA) Development, has Announced 11 Winning Proposals to Receive Funding, as part of Project Catalyst

IOHK (or Input Output Hong Kong), an organization focused on supporting open-source projects such as Cardano (ADA), a major platform for building decentralized applications (dApps), has announced the first winning proposals for Project Catalyst.

The community has spoken and 11 initiatives are now expected to acquire funding in order to further enhance the Cardano ecosystem.

As explained by IOHK, Project Catalyst is “an ongoing experiment” in exploring or looking into different ways that “decentralized” innovation and collaboration can be carried out “at its highest level.” As the initial stage in the Voltaire roadmap, it aims to challenge ecosystem participants to “pool their ingenuity, creativity and passion to identify ground-breaking projects that support Cardano’s growth,” the IOHK team noted.

Fund2 was reportedly the first time that Project Catalyst participants had the opportunity to pitch, debate, refine, and vote on various proposals using “real” ADA, which is the native cryptocurrency for Cardano’s distributed ledger technology (DLT) network. As confirmed by IOHK, this was “aimed at enhancing and bringing new value to Cardano.”

As mentioned in blog post published by IOHK:

“We challenged Fund2 participants to come up with ways to encourage Cardano ecosystem development in the next six months. With an available initial ADA fund worth $250,000, we are able to fund 11 proposals.”

The IOHK team confirmed the following funded proposals as part of Fund2:

PoolTool platform upgrade: This project aims to open up “avenues to build businesses and applications on Cardano that differentiate between stake pool operators by offering additional products.” This update is aimed at promoting infrastructure “diversity” across the Cardano ecosystem.

Ouroboros over RINA: Deploying a proof of concept (PoC) stake pool and relay solution of Ouroboros over RINA by using “Ethernet/WDM at two sites in Tokyo, Japan.”

Haskell/Plutus/Marlowe education: Developing educational material or content that aims to convey complex ideas and information in a structured manner, “supplemented with examples that inspire ideas.” This proposal aims to “make it easier for new developers and entrepreneurs.”

Create a message-signing standard: “Generating a message-signing standard to prove reserves, identity, and stake pool delegation. “

Liqwid: Cardano lending markets for decentralized finance or DeFi: Developing an open-source, non-custodial liquidity protocol to “earn interest on deposits and borrow assets on Cardano.”

Cardano for mobile (decentralized application) dApp developers: “Turning mobile platforms into the first-class citizens of the DApp world with mobile SDKs, mobile-first DApp experience and app store compatibility.”

GimbaLabs – starter kits and tools: GimbaLabs is a startup platform “providing free and open source APIs, lessons, and project-based learning resources to help people bring their ideas to life on Cardano and so drive adoption of the blockchain.”

Lovelace Academy for Marlowe and Plutus: Establishing an online academy “to attract, inspire and educate individuals and companies to create applications on Cardano’s smart contract and native assets platform.”

Sign Tx Arduino: Starting a library for code written in the C programming language that is “compatible with the Arduino development environment.” Sign local Cardano transactions in advance of smart contracts “being available to enable applications for the internet of things (IoT).”

Pet Registry DApp with ₳Pay: Helping developers “accept ADA payments on websites.” The Pet Registry DApp, built on ₳Pay, will “service a global audience in a cheaper, better way.” Devs are “inspired by successful apps and the tools needed to build them, By creating both, we can inspire and accelerate devs and their solutions.”

Japan Cardano Governance Association: Meetings & Communities & Podcasts: “supporting online/offline meetups, governance podcasts etc. for our Japanese community.”

As confirmed by IOHK, each funded team will get their ADA tokens by the end of this month, so that they’re able to start on their projects and hopefully bring them to life in the foreseeable future. IOHK also mentioned that they’re now looking forward to seeing the impact of these initiatives on the evolving Cardano ecosystem.

While 11 ideas or projects have acquired funding for now, there are several other legitimate contenders that managed to meet the community voting threshold. However, these initiatives still missed out on funding this time around. As noted by IOHK, certain projects were able to secure “community funding.” There were also some initiatives that had been approved for funding by the community, however, the treasury didn’t have enough funding needed to support their proposals for the time being.

IOHK added:

“We’ll be encouraging these proposers to resubmit their ideas for the just-launched Fund3 where relevant (with its focus on the DApp ecosystem) and we hope to see the best of these funded by the community next time. We have bold and ambitious plans for Project Catalyst in 2021, with ADA worth millions of dollars being made available to fund innovation on Cardano. Submission for proposals for Fund3 [reportedly opened on January 13, 2021].”

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Jan 15 2021

Africa to bring 100 million users to DeFi in three years from now, says founder of Cardano

Charles Hoskinson predicts that the Decentralized Finance sector will acquire 100 million users within the next three years by tapping into the developing world’s market potential.

“Who’s actually going to do peer-to-peer loans? Who’s actually going to do peer-to-peer insurance? Who’s actually gonna do peer-to-peer payments? I got news for you, not a guy living in New York”, pointed out Hoskinson in an exclusive interview with Cointelegraph.

Cardano, the decentralized cryptocurrency network founded by Hoskinson, intends to take the lead in the DeFi space by developing partnerships in the African continent.

According to Hoskinson, DeFi products lack a significant customer base and the field has no chance at gaining traction in the West because of a cumbersome regulatory environment.

On the contrary, developing countries offer a much more flexible regulatory framework which facilitates crypto innovation.

“There’s no JPMorgan Chase. There’s no big massive legacy financial system that dominates and controls”, he pointed out.

Ultimately, according to Hoskinson, DeFi can “create liquidity for the poorest people in the world and allow them to build wealth and protect the wealth that they’ve acquired”.

“We built Cardano for this purpose”, he concluded.

To find out more about our conversation with Charles Hoskinson, check out the full interview on our Youtube channel and remember to subscribe!

Africa to bring 100 million users to DeFi in three years from now, says founder of Cardano

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Jan 15 2021

Bitcoin vs. Altcoins: A Lopsided Battle

Investors often ask me why I focus so much on bitcoin instead of altcoins.

I get why people ask this question. Bitcoin is already huge. And many investors assume they’ve already missed the boat, so they want to find the next bitcoin.

Here’s the thing. Most people still don’t realize just how far ahead bitcoin is in this race. Bitcoin was built to serve as an alternative financial system. It is already fulfilling this purpose.

People around the world buy bitcoin as a hedge against inflation and reckless monetary policy. In Venezuela, where hyperinflation runs rampant, bitcoin has become a major part of the economy. Many citizens choose to store their savings in bitcoin rather than the bolivar. And they only convert bitcoin to bolivars when they need to buy something.

The map below, which is part of an excellent piece of research by Coindesk, shows volume on peer-to-peer bitcoin trading platform LocalBitcoins compared to GDP (the larger the bubble, the more peer-to-peer trading volume, adjusted for size of the overall economy).

As you can see, Venezuela leads the world in peer-to-peer bitcoin trading volume (adjusted for GDP). It’s no coincidence that the country also has the highest inflation rate.

And if you haven’t read the 2019 New York Times article “Bitcoin Has Saved My Family” yet, I recommend it. Here’s an excerpt:

I keep all of my money in Bitcoin. Keeping it in bolívars would be financial suicide: The last time I checked, the rate of daily inflation was around 3.5 percent.

So bitcoin’s usefulness is not hypothetical. It’s very real.

Now let’s briefly talk about liquidity. Bitcoin is by far the most liquid cryptocurrency around the world. In almost every country, you can convert bitcoin into local currency through either official exchanges or peer-to-peer platforms. Its impressive trading volume is what makes institutional buying possible (more on that here).

And when it comes to security, the bitcoin network also stands apart. No other coin has nearly as much computing power securing it. Some estimate that the Bitcoin network currently uses around .21% of the world’s electricity. Yes, that’s a lot. But securing a decentralized financial system is no small task.

Bitcoin is also far more decentralized than 99% of altcoin projects. There are hundreds of thousands of mining machines and nodes operating around the world. There’s no central authority controlling the supply. I believe this will become increasingly important as the market digests the SEC’s recent actions against Ripple (XRP).

Altcoins: (Mostly) Unrealized Potential, For Now

Altcoins, meanwhile, are still speculative investments without much real world utility. There’s nothing wrong with that — but we should recognize it. None comes close to bitcoin in terms of fulfilling their stated purpose.

Ethereum — the second largest crypto — does have a fair amount of real world utility. The Ethereum network has serious potential to provide decentralized finance (DeFi) applications in the future. But today, it’s still mostly used to facilitate the creation of and investment in other coins/tokens.

Eventually, whether it’s in five years or 30, it’s likely that some new coin will come and give bitcoin a real run for its money. But I don’t expect it to happen any time soon. I see bitcoin continuing to build on its lead in liquidity, utility, security and infrastructure for years to come.

To be clear, I’m not saying altcoins aren’t worth researching and investing in. There’s certainly money to be made in altcoins in this environment. And some altcoins will inevitably outperform BTC for periods. But there’s a heck of a lot more risk with alts. When bitcoin “crashes,” altcoins often go down 2x as much, or more.

Bitcoin should form the core of any crypto portfolio. It’s the most likely, by far, to see continued upward momentum. It’s the only crypto I see as a true inflation hedge. If you want to add in some high quality altcoins, great. Just be careful, do your research and limit your position sizing.

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Jan 11 2021

Kava DeFi Platform to Release Robo-Advisor Service to Automate Strategies for Financial Services and Other 2021 Updates

The Kava decentralized finance (DeFi) platform is “coming out the gates swinging” in 2021 with a “feature-packed” product roadmap – which includes two new native apps and crypto tokens, “decentralized bridges” to onboard major cross-chain digital assets, and several other features to “reinforce the safety and security measures already enjoyed by all users of Kava’s DeFi applications and services,” according to Scott Stuart, who works on Product at Kava Labs Inc.

As noted by Stuart, Kava’s 4-month “major release cycles are targeted for Kava 2021 Development.” The platform’s HARD Protocol Version 2 will include “borrowing with variable interest rates and a distribution of HARD [tokens] to both asset suppliers and borrowers.” As confirmed by the Kava team, HARD Governance will be enhanced to include “more protocol parameters quickly by the HARD community.”

The DeFi platform’s developers revealed:

“Kava has seen significant usage in 2020, as such a number of software optimizations are needed to be made in order for validators to validate blocks in a timely manner, there are also consensus tweaks to improve system performance based on production data.”

They further noted:

“Kava services including cross-chain claim and refund bots, app front-ends, price reference software, Full nodes, historical nodes, REST and API endpoints, and others are run on Kava Cloud infrastructure. Significant enhancements in standardization, security, monitoring and alerting tools have been added to Kava Cloud services that drive infrastructural and end-user services.”

An Autonomous Market Making (AMM) service and application will reportedly be launched and will operate as an on-chain liquidity pool for Kava users so that they can swap different assets on the platform for use in other financial services.

The Kava SAFU fund will be proposed in order to provide more protection to Kava users by insuring and underwriting “some portion of infrastructure and cross-chain activities on Kava.”

As noted in the announcement, the KAVA staking derivative is an asset “derived from KAVA that is staked for POS security.” KAVA staking derivatives “allow more KAVA (derivative) liquidity to be used in various financial services on Kava while not foregoing the security and rewards offered by KAVA POS staking.”

The platform’s developers claim that the safety of Kava users’ assets is “the number one objective which guides development of the Kava DeFi platform.” The Kava team further noted that risk management optimizations such as the enhanced Tendermint mempool queuing and “prioritization of critical services in the mempool will improve transaction safety.”

As confirmed in the update:

“A Robo Advisor service and application will be released to help automate strategies amongst the various financial services offered on Kava, and will increase user onboarding by opening up a larger pool of less hands-on Kava users to participate in yield generating strategies.”

A direct Ethereum bridge to Kava will also be introduced in order to onboard native Ethereum-based assets such as ETH and ERC-20 tokens including LINK and DAI. A fairly large number of users have reportedly requested that they should be able to transfer Ethereum assets directly to Kava and “this bridge should be their service of choice.”

As noted in the announcement, Kava is currently evaluating assets which will use Kava’s “audited Issuance module for USDT, USDC, WBTC, and HBTC amongst others, and will continue to do so through the first half of 2021.”

Kava has moved more than $100 million in asset value “automatically between Binance Chain and Kava.” There have reportedly been many requests to “apply a similar technology to Ethereum assets and Kava will deliver this in Kava 6, such that any project partners built on Ethereum will have access to Kava decentralized financial applications and services,” the update confirmed.

Kava remains focused on helping more users join the DeFi space. The Kava API will be launched as a standardized plugin for application developers and financial institutions to “unlock DeFi services for their users initially including borrowing, lending, and trading.” Prototypes have been integrated with partners such as Binance and Bitmax.io with “many more business integrations to come in 2021.”

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Jan 11 2021

Crypto Market Plummets, Sheds Off $170 Billion in 24 Hours

The crypto market has been on a tear for the past few weeks, with Bitcoin leading the charge and surging past one milestone after another. However, the market now appears to be cooling off, much to investors’ and traders’ dismay.

Losses Across the Board

At press time, the crypto market capitalization stands at $917.41 billion. This is a 17 percent drop in the past 24 hours alone, down from the record $1.1 trillion levels recorded on Monday. Top cryptocurrencies are also trading down on the day, with many fearing that the rally sustained over the past month might finally be coming to an end.

As expected, Bitcoin had led the rally and is now dragging other coins. The leading cryptocurrency crossed the $40,000 mark in the middle of last week, surging past $41,500 for good measure. However, its price eventually stabilized around $39,000 to end the week. While many investors hoped to see the rally continue, things haven’t exactly panned out.

Bitcoin is now trading lower than $34,000. Instead of another staggering run above $40,000, a drop to possibly the high $20,000s now seems like a more imminent possibility. Data from Coinmarketcap also shows that Bitcoin’s market cap had dropped by 16.08 percent. It currently stands at $584.7 billion.

Ether, the second-largest cryptocurrency, is also witnessing a notable fall. The asset started 2021 on a tear, reaching the $1,000 price peg for the first time since January 2018. Many attributed the asset’s growth to the frenzy in the decentralized finance (DeFi) space and its Ethereum 2.0 staking.

Sadly, the asset has dropped 15.38 percent in the last 24 hours and now trades at $936. Its market cap has plunged by 19.29 percent as well, dropping to $110 billion.

XRP, the third-largest cryptocurrency, is not any different. Last month, the Securities and Exchange Commission (SEC) slammed XRP’s developers, Ripple Labs, with a suit alleging that it violated the Securities Act of 1993 via its 2013 XRP Initial Coin Offering (ICO).

The lawsuit alleges that XRP is a security, setting the stage for a possible paradigm shift. Between the suit’s filing and January 6, XRP’s price plunged by 55.6 percent. The asset climbed after then, gaining over 20 percent before entering the weekend’s bloodbath. XRP’s $12.15 billion market cap is also an 18 percent drop over the past 24 hours.

Several other large-cap cryptos are also down. The ten largest cryptocurrencies have dropped by an average of 14.03 percent in the past day. Their market caps have also plunged by 13.67 on average.

Investors Hanging On

Price drops like these – especially those seen in Bitcoin – tend to make investors antsy. However, many institutional investors remain bullish on cryptocurrencies in the long term. Last week, investment banking firm Morgan Stanley increased its ownership in business intelligence firm MicroStrategy to ten percent.

MicroStrategy was one of last year’s big crypto winners, purchasing $425 million in Bitcoin when the leading asset traded around $10,000. Factoring in the gains from the past two months, the company should be sitting on a Bitcoin stash worth well over $1 billion.

With Wall Street getting more interested in crypto, we could see a repeat of 2020 where institutional players prop up the market. This correction could then be seen as a momentary blip.

Crypto Market Plummets, Sheds Off $170 Billion in 24 Hours

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