Weekly Blockchain Insights (CW 35-2020)

31. Aug 2020Weekly BC Insights

Defi special: Meme coins, liquidity migration & the future of crypto

 

Blockchain Insights Defi, Ethereum & future of crypto

This week’s blockchain insights include valuable blockchain stories, perspectives on the future of crypto and especially a deep look into the emergence of Defi governance, MEME coins & “Uniswap killers”.

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.

 

Kickoff: Showcasing Blockchain Solutions

This week, we’ve also started showcasing blockchain projects and solution providers. We shared an in-depth introduction to Blockchain-Comparison.com and our value proposition to kick this off. The first companies we showcased on Blockchain-Comparison were Kairon Labs and Nyctale.

Kairon Labs is a market maker that is specialized on cryptocurrencies and utility tokens and integrated with 120+ exchanges. Nyctale is a Business Intelligence SaaS startup that provides advancing modelling tools to monitor investment and usage-behaviour around crypto assets.

Crypto projects: If you need market-making, check out Kairon Labs or get in touch per email.

Crypto investors: Try Nyctale with a free trial or get in touch per email.

 

Blockchain Insights

Blockchains & decentralized applications cannot be censored and will remain available to people all over the globe when they are truly decentralized. (Note: Currently, blockchains do not yet scale for global usage.)

Bitcoin is becoming part of many professional investment portfolios because Bitcoin can be used as a hedge against the US Dollar. While many crypto investors engage in technical analyses, short-lived pumps and dumps & the Defi craze, Bitcoin remains the safe alternative in that field as well.

Arthur Hayes, CEO of BitMex, shared his view on the cryptocurrency market and touches on various important crypto developments in perspective to the macroeconomy. He explains the demand for crypto credit, borrowing & lending of crypto & FIAT stablecoins, intermediaries such as exchanges & lending platforms as well as the Defi-protobank & shitcoin-farming.

Here’s a very interesting (technical) insight mixed with a dramatic story of recovering potentially lost funds from a smart contract when knowing that attackers may wait in the dark to exploit any mistake.

Tokens can be used to coordinate the distribution of cash flows. This is now very popular since on-chain protocols make real revenues. 2 years ago this was unimaginable and people focused on bringing securities on the blockchain. Some people are still excited about regulated tokenized securities and this may play out in the coming years due to certain efficiency gains but the current frontier is in internet-native businesses such as digital finance, digital collectibles, online gaming & gambling.

JP Morgan invested in Consensys. The JP Morgan Quorum open-source codebase will now be maintained by ConsenSys and will be made compatible with other enterprise products. This is a big step for Consensys and the industry towards enterprise & bank adoption.

 

Defi, governance & fair token launches

Aave received an e-money license in the UK after working for more than 2 years on it. Their full electronic money institution license was granted by the U.K. Financial Conduct Authority in July. This will enable Aave to create FIAT-Crypto gateways and onboard more users to Defi.

Aave is also pioneering cross-protocol governance and integrations. Aave founder Stani Kulechov made a proposal to yearn finance and the YFI community.

Defi protocol governance is in general rapidly evolving with experiments and exploits by short-term incentivized, yield focused investors. Especially on-chain governance is prone to attacks:

One example is Curve’s governance which was taken over by a Compound whale. A Curve founder delegated his stake to fight this off and reached more than 70% of the voting power. This contradicts decentralization and shows that a lot of the processes are just developing.

Here’s a good overview of on-chain voting power distribution for major Defi protocols. Due to partially low-participation rates, this can change quickly:

The launch of blockchain protocols and inherent (un)fair distribution of tokens is a major issue. After the fair launch of Bitcoin and various experiments and ICO variants, we’ve seen new “fair launches” emerge in Defi where all participants are able to get into projects at the same prices and stake with existing tokens. In practice, there are no security audits before public launch due to lack of funds & large whales still get a majority of tokens/power from staking. Here’s an interesting concept to enable more secure “fair launches”.

 

Uniswaps, forks & liquidity migration

Uniswap launched a great new feature called “lists”. This improves the discoverability of tokens and provides more security for DEX users without gatekeeping.

Larry Cermak asked one week ago what could Uniswap do if a competitor forked the project and added a token.

Martina Krung wrote about this in more depth in “Vampire Attack” & “Migration Mining”. Defi protocols that don’t have a token yet might be replaced by new protocols with a token & liquidity mining incentives.

One week earlier, 1inch, a DEX aggregator, had announced the 1inch Token, a liquidity mining campaign and the launch of a direct Uniswap fork called Mooniswap as well as simple ways to migrate from Uniswap to Mooniswap. It attracted a lot of liquidity instantly without sharing detailed tokenomics yet.

This weekend, another Uniswap fork “Sushiswap” launched its stake farming campaign. Sushiswap is very similar to Uniswap but instead of giving 0.3% to liquidity providers, only 0.25% are given to liquidity providers and the rest to Sushi token holders (& the developer). Sushiswap is going one step further than Mooniswap with an actual liquidity migration smart contract. By now, only 3 days after launch, more than 70% (700M USD) of all Uniswap liquidity (1B USD) is farming Sushi.

Uniswap increased its liquidity provider pools from 300M USD to 1B USD (See Uniswap.info) and passed centralized exchanges. In the short-term Sushiswap attracted a lot of liquidity to Uniswap and it will be very interesting to see how much investors will dump Sushi before the migration and how much of the liquidity will move to Sushiswap. Uniswap had already announced a version 3 of their protocol and they are likely to announce a token soon but it’s not easy to compete with a fair-launched community-owned protocol when you have obligations with existing investors.

 

Below, we’ve curated new “Meme”-coins. All of them fork parts from existing projects and add or change just a few components that may (or may not) create real value in the long-term. Most of the value-creation depends on the community that is attracted, well-incentivized and starts contributing to the project. We hope you enjoyed this weekly update. Make sure to sign up for the newsletter below and join us on Twitter (@BCComparison) and Telegram (@BCinsights) for the most recent insights from all blockchain ecosystems.

 

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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