Weekly Blockchain Insights (CW 33-2020)

Weekly BC Insights

New demand for Bitcoin, YAM & crypto exchanges


blockchain insights YAM, Bitcoin & Defi

This week’s blockchain insights introduce the full life-cycle of the YAM project, new demand for Bitcoin and crypto exchanges & indicators to consider when evaluating Defi projects.

If you come across great insights or an interesting crypto tweet in the future, please reach out or tag us on Twitter: @BCComparison. Don’t forget to join our Telegram group where we collect insights from all blockchain ecosystems: @BCinsights.


YAM Finance: Launch, growth, death & rebirth

YAM finance launched its token & liquidity mining program last weekend. It was built within 10 days and introduced as a “high-risk experiment” with its unaudited contracts & non-standard ERC20 templates. Nonetheless, it attracted more than 50 million USD in locked funds within one hour and more than 500 million USD within 2 days. This experiment was very interesting due to the evolving governance in the hands of the community and the liquidity mining incentives for all major Defi projects.

YAM finance included interesting mechanisms from Ampleforth and YFI that further incentivized the staking of tokens in the protocol and holding of YAMs. Before the rebasing, a bug in the rebase contract was discovered. This led to yCRV being at risk of being stuck if governance could not pass proposals. A flaw prevented proposal execution. This was an essential part of the protocol and the YAM price dropped significantly (and may stay between 0-1).

Since then, the YAM core team and the community have taken huge steps towards YAM 2.0. An audit was funded with more than 75K USD. A migration plan towards YAM 2 and YAM 3 was created and the community is getting organized in a Discord channel.


Blockchain insights and rising demand for Bitcoin & exchanges

Here’s a new introduction to token economics, how they evolved, and the future of incentivized mechanism design.

The cooperation among protocols and symbiotic network effects are quickly taking off in Defi and crypto.

The time to market of blockchain projects is getting reduced to a minimum. YFI tests in production, releases new products on the go; YAM launched unaudited after 10 days; project Serum was launched on major exchanges 6 weeks after coming up with the idea. Many of the projects are either started by a community or directly by a few Defi-insider investors – leveraging existing communities & reputable advisors. “Traditional crypto investors/funds” are not consulted and struggling to get into the most exciting projects.

The first “normal companies” (MicroStrategy) started investing in Bitcoin as part of a capital allocation strategy to maximize long-term value for shareholders & benefit from better appreciation potential than holding cash.

Coinlist couldn’t handle the significant load during the Near protocol token sale. They had to delay the sale one day.

DEX aggregator 1inchExchange announced another AMM protocol called Mooniswap.

In this bullish market, it’s good to reming oneself of the “shitcoin waterfall” and steps a project and its investors go through. In Defi, especially fair-launched Defi projects, the actors changed slightly but the game is still the same. For example, big insider whales provide a lot of liquidity early on, get more tokens and dump later on retail/less informed people.

In 2017/18, there were already in-depth discussions on whether insiders and large holders had to disclose their token sales in advance – similar to regulated capital markets.


DeFi investment indicators

Most investment discussions in DeFi circle around the total value locked. This is just one indicator and in some cases, the same values have been counted multiple times.

Spencer Noon shared 7 indicators DeFi investors should consider when evaluating projects.

We believe revenues should be the ultimate KPI per Defi protocol but it may be worth looking into 4 more “soft metrics” as well in the current market environment to identify risks & potential of being quickly adopted.

  1. Total Value Locked / Fully-Diluted Marketcap
  2. Marketcap / Revenue
  3. % of Token Supply on Exchanges
  4. Unique Address Growth
  5. Token Balance Change on Exchanges
  6. Non-Speculative Usage
  7. Liquid Inflation Rate
  8. Community support (# leaders, communities, people)
  9. Virality (clear narrative, meme-ability)
  10. Attractiveness of liquidity mining program
  11. Management of technical risk (Audits)

We hope you enjoyed this weekly update. We’ll be sharing a comprehensive list of DeFi indicators and what to look for in Defi projects in the coming weeks. Make sure to sign up for the newsletter below and join us on Twitter (@BCComparison) and Telegram (@BCinsights) for more updates & insights from all blockchain ecosystems.

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