Weekly BC Insights (CW 26-2020)

Weekly BC Insights

DeFi, liquidity farming, new ICO bubble


Defi & Liquidity Farming

In Weekly Blockchain Insights, we share the most interesting Blockchain Tweets, discussions about crypto from all blockchain ecosystems and various research and use case insights from the past week. Make sure to sign up for the newsletter below and get all blockchain insights to your inbox.

This week’s blockchain insights focus largely on DeFi since it started to heat up last week with Compound’s COMP governance token release and a few other projects following up with governance token issuances. In fact, the FOMO reminded us already of ICOs in 2017.

You can always stay up-to-date by following us on Twitter @BCComparison and Telegram @BCinsights. On Twitter, we share interesting research and Blockchain-Twitter discussions (Tag us whenever you find a great Tweet!). In our Telegram channel, insights & important updates from various blockchain ecosystems are shared!


Blockchain Market Overview

Electric Capital shared a great overview of the crypto market. Due to the crypto bear market and Covid 19, some companies and projects are struggling but many more are joining and thriving.

The derivatives market has been very small in DeFi even though it’s among the biggest in traditional finance. With a growing DeFi market, it might be worth checking out. Ryan Tian and Nicholas Krapels shared a good comparison of decentralized options platforms and introduced 8 projects.

The blockchain industry has significantly changed over the past years. The ICO hype decreased while serious businesses and regulators have become much more active. The progress can also be seen in the financial opportunities: Early-on you could only invest but now you can replicate traditional finance through (decentralized) protocols & there are even a few crypto-specific solutions.


General blockchain insights

A nice and simple introduction to blockchain “A Beginner’s Guide to Crypto” was issued by Women in Blockchain Boston (WiBB) and she256. It’s a decent collection of introductory blockchain content.

A never-ending story is maximalism in crypto. Maximalism in the crypto industry creates confusion and unnecessary barriers to entry for outsiders. At the same time, it’s important to mention that there are definitely projects that one should stay away from.

Countries are competing for the best talent, finance and tech. Many countries have already been working on central bank digital currencies (CBDC) for 3+ years. Now, we are witnessing more and more experts that urge their governments to step up the game in the EU & in the US.

A good community that is aligned around the core values and supporting the growth of an ecosystem is just as important as the core technology. In fact, open-source technology can be copied but an ecosystem with supporters not that easily.

Bitcoin is still the dominant leader in crypto – a niche industry. The Bitcoin community and other crypto communities need to create awareness, interest, and desire which should consequently lead to actions. The term “Bitcoin” is already well-known in society and many Bitcoin people provide in-depth insights. However, there remains a large gap between “normal people”, crypto & technology.

DeFi is a niche industry in this niche industry. It’s growing but people look for ways to accelerate this.


DeFi & Liquidity farming

Compound released the COMP token to decentralize the protocol and enable people to engage in the governance process. Each day a specified number of COMP tokens is released to active users of the protocol. The more funds a users adds either directly or through other protocols, the higher is the share of the rewards. This can be called “liquidity farming”.

DeFi insiders and supporters shared decent guides to enable others to join the new DeFi gold digger movement – “liquidity farming”. The improved UX could indeed help non-crypto people get into DeFi and start earning interest by using one of the lending protocols out of an easy-to-use mobile wallet.

Dan Elitzer is one of the DeFi pioneers. He shared a great insight into what’s going on currently and what might be coming next in DeFi. Assets in DeFi can be used for multiple purposes that are symbiotic at the same time: “Aquaponic systems provide farmers with two sources of revenue, both increasing and diversifying their potential income.”

Soon, all in DeFi have started talking about the best short-term yield opportunities and how the yield could be optimized through the use of multiple protocols, leverage, flash loans and more. No matter how sustainable liquidity farming is, these token issuances and clever economics are a great growth hack.

DEXs are a central part of DeFi. Their usage and volume levels have been rising significantly. The annualized liquidity provider fees are also growing substantially.

Investing is becoming much easier. However, it is an incredibly complex topic, risks are not fully understood and, admittedly, mainstream is still years away from adopting this.

Great insights. No noise. Weekly Newsletter.

In our newsletter we introduce great blockchain solutions and share a collection of the best blockchain insights from the past week.

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