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Second-Largest DeFi Liquidation Day Sees $24 Million Lost

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Well, it eventually happened. The 22nd of February marks a crypto DeFi market crash. In fact, the crash itself has caused enough liquidations to rank it the second-highest liquidation event within the DeFi space’s history. Within just 24 hours, $24.1 million in loans were liquidated.

Compound Accounting For 60% Of Liquidations

DeBank, one of the many crypto data aggregators out there, revealed that the majority of these losses, $13.7 million, comes from Compound, constituting almost 60% of the entire market crash. The only one being close to those losses is Aave, which saw a relatively small loss of $5.4 million in liquidations.

The only other liquidation event larger than this one, and that’s by more than three times, occurred back on the 26th of November, 2020. That crash, in particular, was thanks to the DAI suddenly and spectacularly increasing in price, which caused a whopping $93 million worth of margin calls.

On Coinbase Pro alone, DAI recorded a whopping 30% increase. This, in turn, caused over $88 million in crypto loans to be liquidated within the protocol itself.

Every Factor Worsened The Event

Another important metric measured by DeBank was the total value locked (TVL) within the crypto space. According to the crypto aggregator, this saw a significant drop from $44.5 billion to $38.8 billion within just 24 hours, amounting to a decrease of 12.8%.

The only other time the DeFi markets managed to lose more in terms of percentage was back in January, when the DeFi market shed caused a decrease of 15.4% in TVL.

DeFi

Another compounding factor comes from the Ethereum mainnet itself, primarily its staggering gas fees. Merchants are now reporting a total price tag of $30 just to enact a transaction of any kind. As one would imagine, that doesn’t really encourage small-scale operations.

Couple this with crypto traders being in a constant state of bidding war just to ensure that their transactions are pulled through, alongside tumbling token prices and massive network congestion, it’s easy to see why some traders couldn’t manage to close their positions in time.

Kraken In A Bit Of A Pickle

As is always the case in these matters, the ones most affected by this spectacular DeFi crash are the margin traders and DeFi users. Kraken, in particular, is having a rough time of it, as mass liquidations shot the price down to as little as $700 while it was trading at the $1,400 range on various other exchanges. Needless to say, more than a few customers have voiced their opinions that compensation must be given.

All those major corporations that invested so heavily into Bitcoin also saw multi-million USD worth of losses as they managed to buy at the peak just to see their assets tumble down in value. The 22nd of February saw $9,000 wiped out of a single Bitcoin’s value, reminding everyone just how insane the crypto market can be once you get too comfortable with it.

Second-Largest DeFi Liquidation Day Sees $24 Million Lost

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Ethereum Blockchain Hits New Momentum: ERC-20 and its Market Capitalization

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Wondering what are ERC-20 tokens? What are the benefits of using such tokens? How is the market capitalization of these tokens gaining momentum? What about the market cap of Ethereum itself? Well, this article has got you covered. 

So let’s get started!

Table of Contents

  • What is ERC-20?
  • Benefits of Using ERC-20 Tokens 
  • Market Capitalization: ERC-20 Vs. Ethereum
  • Concluding Lines 

What is ERC-20?

One of the popular Cryptocurrency and Blockchain, Ethereum, is based on the concept of tokens, which can be bought, sold, or traded. It is a standard which monitors the creation of Token based on Ethereum Blockchain. These tokens have similar functionality to other coins developed on different Blockchain such as Bitcoin, Ether, and Bitcoin Cash.ERC-20 stands for Ethereum Request for Comments and 20 denotes proposal identifier.

ERC-20 acts as a technical standard, as most of the  tokens follow this standard for the development of tokens using smart contracts. In comparison to other cryptocurrencies, ERC20 tokens are hosted on the Ethereum blockchain and are stored and sent using ethereum addresses, whereas other cryptocurrencies like Bitcoin and Bitcoin Cash are the native currencies of their respective blockchains.

In most simple words, ERC-20 is a protocol for introducing enhancements to the Ethereum network.

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Benefits of Using ERC-20 Tokens 

The ERC-20 token helps developers of all kinds to reliably predict how new tokens in the wider Ethereum framework will operate. This simplifies the task set out for developers; they can continue knowing that any new project will not have to be redone each time a new token is issued, as long as the Token follows the rules.

ERC20 regulations define a well-defined blueprint for developers to learn. Thus, instead of working from scratch, it becomes convenient for developers to come up with tokens.

There are various digital currencies that are issued as an ERC-20 token. All you need is a wallet that is compatible with these tokens. Since such tokens are well-recognized, there are several options for wallets as well. There are a number of popular digital currencies that use the ERC-20 standard, such as Maker, Basic Attention Token, Augur, etc.  

The liquidity of these ERC20 tokens is an essential factor for the overall valuation of the Ethereum network. If the projects on top of Ethereum Blockchain are active and interact with each other, more projects and users can constantly use the network of Ethereum.

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Market Capitalization: ERC-20 Vs. Ethereum

According to the latest news, Ethereum’s economy hits new milestones in transfer value and ERC-20 market cap as compared to Ethereum. 

A platform Santiment that helps in exploring behavioral analytics for the crypto market found that the market cap for all ERC-20 based tokens has flipped even that of Ethereum Blockchain itself. In September 2020, the Ethereum Foundation announced that teams working on the Ethereum blockchain would be awarded over $3.8 million in grants.

As of September 11, 2020, the total market cap for all current ERC-20 assets was $46.7 billion, whereas that for Ethereum was just over $41 billion.

Santiment platform mentioned that since Black Thursday, the ERC-20 market capitalization had flipped the Ethereum itself. ERC-20 tokens after first crossing in mid-march again showed the rise on September 3. It was reported that “this is the highest market cap differential of ERC-20 coins over $ETH.”

According to the Tether Transparency Survey, Tether estimates for a notable share of the ERC-20 capitalization, with around $8.9 billion, or 60% of the entire USDT supply, currently on the Ethereum Blockchain network.

CoinMetrics analytics reported that the 7-day average adjusted transfer value of ETH hit $3.08B on September 5, compared with $3.01B for BTC.

Concluding Lines

From the above discussion, it is clear that Ethereum’s economic metrics are strengthening in terms of the transfer value and ERC-20 market capitalization. The spike in the Ethereum ecosystem is because of several reasons. Yearn Finance’s yETH vault is one of the potential factors for passive earning opportunities for Ethereum holders. Please note that Yearn.finance is a yield aggregating platform built on Ethereum Blockchain that utilizes decentralized finance protocols such as Compound, Aave, and others for optimizing token lending. In addition to this, SushiSwap, a completely decentralized on-chain token exchange protocol, is responsible for increasing both the value of Ethereum transfer and its network fees.

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 To get instant updates about Blockchain Technology and to learn more about online Blockchain Certifications, check out Blockchain Council.

Ethereum Blockchain Hits New Momentum: ERC-20 and its Market Capitalization

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Everything You Need to Know About Yearn Finance

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Wondering what Yearn Finance is? What are yTokens? Why is it gaining popularity? This article will answer all these questions. 

Table of Contents 

  • Yearn Finance: A Newly Launched Cryptocurrency 
  • Working Mechanism of yTokens 
  • Yearn. Finance’s Entire Ecosystem 
  • A Sudden Jump to YFI 
  • Concluding Lines 

Yearn Finance: A Newly Launched Cryptocurrency 

Yearn.finance, also known as yEarn, is a yield aggregating platform built on Ethereum Blockchain. It was officially introduced on July 17, 2020, by Andre Cronje, and since then, it has become one of the most valuable ‘decentralized finance coins. Its official website defines it as a decentralized platform that “automates yield-maximizing profit switching opportunities for liquidity providers and yield farmers.” It utilizes decentralized finance protocols such as Compound, Aave, and others for optimizing token lending.

As yEarn is getting mature and popular worldwide, it has grown its complete ecosystem that aims to maximize annual percentage yields, also known as APY for its prestigious users. 

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Working Mechanism of yTokens

yEarn holds a unique place in the crypto world and is recognized as one of the most decentralized projects. When a user deposits tokens, they are converted to yTokens such as yUSDC, yUSDT, and yDAI. What happens is when a user deposits their funds, the smart contract checks the APR, which operates similar to oracle but not identical; the major difference is that Oracle checks off-chain while here, you can consider everything as on-chain. When user deposits, yEarns allow users to earn lending fees and the trading fees off of Curve both. 

Let’s understand this differently. Consider there is a USDC pool. So when he deposits USDC tokens, the smart contract asks the APR Oracle where the highest APR is, and if it reports that it’s Aave, for example, it transfers such tokens to Aave, which helps him to earn Aave interest. 

Yearn. Finance’s Entire Ecosystem 

yEarn supports various stablecoins such as DAI, USDC, USDT, TUSD, and sUSD and moves these stablecoins between multiple supported DeFi protocols like Compound, Aave, dYdX, and Curve, on the basis of which asset pool is offering the highest yield. Without going in-depth, let’s see what all yearn.Finance ecosystem consists of:

  • yearn.finance – It is a profit switching lender that aims to enhance lending yields. 
  • ytrade.finance – Its purpose is to create leveraged stable coin trades.
  • yliquidate.finance – Zero capital automated liquidations for Aave protocol.
  • yswap.exchange – It is a single-sided automated market maker 
  • iborrow.finance – Credit delegation vaults for a smart contract to smart contract lending.

To utilize the Yearn Finance ecosystem, users can choose either of the following categories. These are ‘Earn,’ ‘Zap,’ ‘APR,’ and ‘Vaults.’ 

‘Earn’ allows users to connect a wallet and find out the best returns. ‘Zap’ allows access to the stablecoin lending facilities through Curve Finance. 

APR helps in cross-reference interest rates(as already discussed). ‘Vaults’ optimize pool liquidity by depositing digital assets that will be managed in the most efficient system.

A Sudden Jump to YFI 

According to Buy Shares, on September 8, it was reported that its token market capitalization hit $690.1 million at the beginning of this week, indicating a high jump of 435% in a single month. Statistics have been identified, showing that the price of the YFI token was 127 percent higher than the price of Bitcoin.

In comparison to Bitcoin, whose price was $10,130.73, the market price for Yearn reached $23,031.37. It was announced on July 30 that the YFI token’s market cap was $123 million. This price soared to $985.7 million by more than 700 percent in August and topped over 1002 million on September 1. However, the price fell by $311.9 million shortly after a week, on September 7.

On the other hand, YFI token’s weekly trading volume was reported to be more than $2.2bn.

Concluding Lines 

Yearn Finance is the latest cryptocurrency that is gaining a lot of public eyes. As it allows regular people to access advanced strategies, it is pretty sure that it holds a promising future in the crypto world.

To get instant updates about Blockchain Technology and to learn more about online Blockchain certifications, check out Blockchain Council.

Saket for your reference https://academy.ivanontech.com/blog/a-closer-look-what-is-yearn-finance-and-yfi

Everything You Need to Know About Yearn Finance

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NEO Founder Predicts Bigger DeFi Boom

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The decentralized finance (DeFi) space has grown significantly in the past year, moving from a billion-dollar market to almost $10 billion in assets locked in just a few months. While many would believe that this year’s growth levels are astronomical, to say the least, some believe that things are just getting started.

Enhanced Integrations to Drive More Users

Joining the latter is Da Hongfei, the founder of blockchain project NEO. In a live stream on China’s Hub over the weekend, Hongfei explained that DeFi had expedited the process of establishing a market – something that traditional finance couldn’t do for hundreds of years. With even greater functionality and an enabling environment for everyone, the sub-industry could grow even more.

In particular, Hongfei praised DeFi and its ability to incorporate different financial products and services. He explained:

“Lending and borrowing, decentralized exchanges, insurance, and all kinds of derivatives are on the rise in DeFi. The initial stage DeFi infrastructure has a solid good start, and now it is time to see more and more applications to be built and innovated on DeFi.”

The tech mogul added that with more possibilities, DeFi could replace traditional banks and deliver a future where people take more control of their financial lives. He pointed out that citizens make most of their payments with processors in China – particularly, WeChat Pay and Alipay. As DeFi continues to grow and add more financial services, people could eventually ditch banks altogether and digitally move their finances.

DeFi: Bubble or Not?

The growth of the DeFi space has invited both optimism and scrutiny from various parties. While Hongfei appears to be a bull, several notable people have voiced their concerns with it.

Most prominent is perhaps Nouriel Roubini, a famed economist and even more famous crypto pessimist. Roubini has been critical of anything crypto-related for years. Last week, he took to Twitter to bash DeFi, explaining that it has been “vaporware” from the onset. A slang, vaporware is used to depict a product or concept with great hype but little to no substance to back it up.

“DeFi was vaporware from its onset. Now totally faltering as blockchain was always the most over-hyped technology in human history,” Roubini said.

Changpeng Zhao, the founder and CEO of top exchange Binance, has also sounded off some warnings. In a recent interview with Cointelegraph, he explained that he has always believed in DeFi from the start and still does. Regardless, there appears to be a large number of projects with empty promises that are barely doing anything right now.

Zhao explained that many of these “two-week projects” tend to fizzle out quickly and take investors down with them. However, the core principles of DeFi – which include decentralized staking and lending – are still strong.

Opinions regularly vary as far as DeFi is concerned. It certainly holds, given that several projects have shown differing performances. While projects like Compound and Uniswap have shown long-term potential, others haven’t been so lucky and have either been plagued by volatility and security issues.

NEO Founder Predicts Bigger DeFi Boom

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Centralized Oracles Vs. Decentralized Oracles

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Wondering what are blockchain oracles? What are centralized and decentralized oracles? What makes them different? Which one is better? This article will provide answers to all your questions.

Table of Contents 

  • What is Blockchain Oracle, and Why Do We Need it?
  • Centralized Vs. Decentralized Oracles: Which is Better?
  • How Oracles Help DeFi Protocols  
  • Concluding Lines 

What is Blockchain Oracle, and Why Do We Need it?

Blockchain oracles are known to be third-party services that enable smart contracts to send data from outside their network. This is because smart contracts are unable to access external information. Such oracles allow smart contracts to access data in real-time, which is not available on the blockchain network. Oracles act as data sources, but actually, they are not. Basically, they are layers that verify on-chain data and then submit the aggregate data to smart contracts.

Blockchain oracles are vital as they have the potential to expand the scope in which smart contracts can operate. In simple words, we can say that they provide a link between off-chain and on-chain data. They facilitate communication between smart contracts and the outside world hence vital for the global adoption of blockchains.

As the oracle landscape is evolving, there is an active trend from centralized oracles to decentralized ones. 

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Centralized Vs. Decentralized Oracles: Which is Better?

Blockchain oracles can be categorized based on various factors, including source and direction of information and the degree of trust. Many companies and businesses that consider VCP implementation struggle to choose between two types of oracles. This decision is crucial mainly for an operational perspective. Let’s see how both types of oracles differ. 

Centralized Oracles 

Centralized oracles act as a single entity that provides data from an external source to a smart contract operating with a set of security features. Such oracles are controlled by a single entity and the only provider of information for smart contracts. Since it works similarly to the traditional financial system where a single entity is responsible for everything, it suffers from a bottleneck problem, or we can say a single point of failure. These oracles have a simple architecture with lesser investment in terms of infrastructure and maintenance. Although they provide protection against game theory attacks, these are still prone to vulnerabilities to being corrupted and attacked.

Decentralized Oracles

Decentralized oracles do not rely on a single source of truth; thereby, such oracles increase the authenticity of the information provided to smart contracts. Unlike centralized oracles, such oracles rely on multiple external sources and aim at achieving trustlessness. It utilizes the ShellingCoin mechanism, where all the independent sources report the data without coordinating with one another. But this mechanism is vulnerable to various problems like collusion between parties, signaling, and even bribing. 

Such oracles are considered to be ideal for businesses with multiple plans running at different times but require higher investment in infrastructure and maintenance.

Now to state which is better, remember that decentralized oracles are faster in operations, but they are insecure. Centralized oracles, on the other hand, are slower but secured. Thus, this is the reason why many of the DeFi applications choose to run on centralized oracles while others on decentralized oracles. 

DeFi Protocols Running Oracles 

Decentralized Finance takes the promise of blockchain a step further and aims to transform traditional financial products into trustless and transparent protocols that run without involving any intermediaries.

Various DeFi protocols run decentralized despite the fact that such oracles are insecure. The DeFi ecosystem needs decentralized oracles because centralized oracles go against the ethos of DeFi applications and products. Such applications and products discourage using centralized oracles as their oracle of choice because of the fact that they are comparatively much slower. 

Several known DeFi protocols such as Compound, MakerDao, Uniswap, and Aave use Oracles for fetching external data while running on the Ethereum Blockchain network. 

MakerDAO utilizes oracle to determine the price of assets in real-time. What oracle does is it sends price updates periodically to an aggregator that defines a median price, which can then be used as a reference price on the platform. Similarly, Compound uses oracle to gather information about the price, which is then forwarded to its price feed, managed and controlled by administrators.

Concluding Lines 

Thus from the above discussion, it is clear that decentralized oracles are a must for the DeFi ecosystem. But Blockchain developers and experts have to figure out the problems associated with oracles. The well-known ‘oracle problem’ ( trust conflict that centralized third-party systems bring to smart contracts) and lower latency rates are the major risks of running oracles on a blockchain.

 To get instant updates about Blockchain Technology and to learn more about online Blockchain Certifications, check out Blockchain Council.  

Centralized Oracles Vs. Decentralized Oracles

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Bitcoin and Ethereum: From Unstable Assets to Mainstream Adoption

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Are you planning to buy or invest in cryptocurrencies? Finding difficulty in deciding the best cryptocurrency? Wondering why Bitcoin and Ethereum are always under the limelight? Why will the market of BTC and ETH will explode? This article will cover everything. So let’s get started. 

Table of Contents

  • Cryptocurrencies Revisiting 2020
  • Bitcoin and Ethereum Shows No Sign of Stopping 
  • Why are BTC & ETH Exploding?
  • The Verdict 

Cryptocurrencies Revisiting 2020

Cryptocurrencies are digital currencies, also known as virtual currencies, that control the generation and transfer of funds by utilizing encryption techniques. In comparison to conventional fiat currencies, cryptocurrencies allow counterfeiting or double-spending almost impossible. 

As the world is getting ready for financial and banking transformations., crypto experts, blockchain developers, and technocrats are working hard together to bring cryptocurrencies for general usage. The concept of cryptocurrency aims to transform banking as there will be no purpose to pay banks a few percent every time they swipe his/her credit cards. Few consider cryptocurrencies as an excellent long-term, albeit high-risk investment; on the other hand, few cryptocurrency traders consider it a future. Thus, in a world full of failed financial intermediaries, cryptocurrencies can be considered to bring a revolutionary change. 

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Bitcoin and Ethereum Shows No Sign of Stopping 

If you are a crypto investor or a crypto enthusiast and planning to participate in the crypto market, there is a sign of relief. According to crypto specialists and experts, 2020 is going to be a booming year and for the years to come, especially for Bitcoin(BTC) and Ethereum(ETH).

Talking about the first-ever cryptocurrency, Bitcoin is the most used cryptocurrency to date. Bitcoin’s main aim is to become global, P2P, fully decentralized, digital cash that’s isolated from any central authority. The reason why it is still the most likable cryptocurrency is because of the reason that it has the highest liquidity in the crypto space. The higher the liquidity ratio, the easier it is to sell a cryptocurrency at market price.

A recent, detailed study has projected that bitcoin’s price will hit nearly $20K this year and continue to grow to nearly $400K by 2030. According to Bitcoin.com, BTC touched a top on September 1, as prices touched $12,044 per coin. 

June edition of the Crypto Research Report (CRR) predicts the price of various cryptocurrencies, including Bitcoin, Ethereum, and others. They expect the price of bitcoin to rise to $19,044 in 2020, $341,000 in 2025, and $397,727 in 2030. Ethereum’s price is expected to reach $331, $3,549, and $3,644, respectively, while bitcoin cash’s price should climb to $414, $6,690, and $13,016 during the same time periods.

Why are BTC & ETH Exploding 

Let’s figure out the reasons why their prices are rising. 

Bitcoin’s Boom

Talking about Bitcoin, the introduction of bitcoin crypto debit cards is a significant factor for the rise of Bitcoin worldwide. Such credit cards aim to transform financial services while introducing major improvements in transaction speed, privacy, and cost. Blockchain developers also believe that active use of the Lightning Network may also change the BTC ecosystem. Lightning Network is a proposed solution by blockchain developers and experts to increase the Bitcoin network’s scalability by allowing “off-chain” transactions. 

Reason for Ethereum’s Boom

DeFi: The Biggest Catalyst 

The introduction of DeFi protocols, such as COMPOUND, Maker, Aave, and others have witnessed a substantial increase in users. DeFi is gaining a lot of public attention because it encompasses all facets of financial services, including lending, borrowing, and trading under decentralized infrastructure, and provides consumers with an open financial service ecosystem that is accessible to everyone and operates without any central authority being involved.

As users use DeFi services, they ought to send data in the form of smart contracts and transactions, and mostly, users have to utilize decentralized exchanges(DEXs) to buy different tokens. With the advent of DeFi, the Ethereum network was overcrowded, and as the network clogs, consumers are forced to pay higher gas to process their purchases. 

Positive Progress of Ethereum 2.0

ETH 2.0, also known as Serenity, is the latest update in the Ethereum community to boost the efficiency and functionality of Ethereum in various ways. ETH 2.0 will not only improve transaction rates, but it will also increase the blockchain’s own scalability and programmability, without any security compromises. The latest version is expected to increase transaction speed from 15TPS to thousands of TPS, and with Eth 2.0, staking enables the users to gain incentives when miners are removed from the ethereum blockchain network.  

The introduction of Eth 2.0 has opened the door of opportunities for the entire Ethereum community and Ethereum Developers. 

The Verdict 

From the above discussion, it is clear that BTC and ETH are here to stay. If you want to know all the ins and outs of cryptocurrencies and learn trading strategies, get enrolled in Blockchain Council and become a Certified Cryptocurrency Trader today! 

 To get instant updates about Blockchain Technology and to learn more about online Blockchain Certifications, check out Blockchain Council.  

Bitcoin and Ethereum: From Unstable Assets to Mainstream Adoption

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