Projects weigh security risks, benefits of liquidity pool token collateral



Multiple decentralized finance (DeFi) projects are moving forward with plans to allow liquidity provider tokens as collateral for stablecoin and lending services — though experts caution that the security considerations associated with using LP tokens in this manner can be complex. 

LP tokens are distributed to liquidity providers on automated market makers (AMMs) to represent a provider’s stake in a liquidity pool. Providers are incentivized with trading and protocol fees that are paid out upon withdrawal.

While they’re often the last stop in a cycle of yield farming transactions, multiple DeFi platforms are now considering using them as collateral, including MakerDAO, Aave, and BadgerDAO — a move that would “keep the cycle going” for yield farmers, according to BadgerDAO’s Chris Spadafora.

Another step in the cycle

“When groups like us are able to say, “Oh, you can unlock this illiquid position, and borrow against it so you can go and take additional strategies […] that’s where it gets interesting,” he said in an interview with Cointelegraph last week. 

BadgerDAO is planning to release a stablecoin — current community speculation is that it will be named CLAWS — that liquidity providers will be able to claim against their LP collateral.

The potential benefits of unlocking this liquidity are significant — and not just for individual traders. Jordan Gustave, the COO at lending platform Aave says that it could expand the ecosystem and inflate figures like DeFi’s closely-watched total value locked (TVL).

“The DeFi TVL could grow as much as people are willing to lend out to LP tokens collateral users, meaning that if I have enough liquidity to use my ETH/WBTC as collateral, then one could go easily 3x long on the LP token and use the additional liquidity to farm UNI / Sushi / [Balancer],” he said.

Extra risks

However, according to Tarun Chitra, founder and CEO of DeFi risk analysis firm Gauntlet.Network, using LP tokens as collateral prompts specific considerations depositors and platform designers need to keep in mind. 

“It makes sense when the lender controls one of the assets (e.g. Maker allowing leverage on ETH/DAI LP shares), as the leverage ratio is transparently known the lender. It does also make sense when you want to make more complex derivatives, but you have to be much more careful.”

Chitra explained a worst-case scenario in which LP tokens could lead to cascading, deflationary liquidations across the DeFi ecosystem. In this case, “LP token debt defaults, LP tokens are liquidated, lowering liquidity in some pair, making direct liquidations more expensive” in a continuing cycle.

Spadafora and Gustave also both warned of additional risks surrounding oracle attacks, a topic that Aave explored in-depth when they chose to allow Uniswap v1 collateral, going so far as to develop a unique price discovery mechanism that values the underlying assets in the liquidity pool in Ether.

“Not all LP tokens are suitable (as collateral), the same way not all tokens are suitable. You just need to apply twice as much diligence as there is essentially two tokens to review in the process,” said Gustave.

Gustave added that an Aave community member, zer0dot, has accumulated enough proposition power in governance to push forward a Uniswap market that will support v2 tokens as collateral on Aave.

As with MakerDAO and Badger, the Aave proposals appear to be tremendously popular and will likely move to implementation shortly.

More liquidity, more security

Despite the additional layers of smart contract risk and accompanying security concerns, Spadafora thinks they can ultimately be managed with proper due diligence and community faith. 

“Yes it does increase risk but again it comes down to the platform. Longer tenor, security posture and reputation matter the most,” he said.

Meanwhile Chitra, who has researched the economics of liquidity provision extensively, urges caution and says that the rush of projects using LP tokens as collateral can be worrying.

“A lot of protocols seem to implement it haphazardly and that’s nerve-wracking. Maker is the only place that seems to be diligent about their LP share borrowing.”



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Economist: Ethereum To Repeat Bitcoin Rally To $20K, According To Metcalfe’s Law




Ethereum is now the second major cryptocurrency from the last bull run to break its former all-time high. One author and economist, however, claims that this is only the beginning of the top altcoin following in Bitcoin’s footsteps, and will soon rally to $20,000 mimicking the epic 2017 bull run. Here’s the theory behind the lofty price target more than 10 times the current price per token.

Economist Estimates The Long Term Value of Ethereum Using Metcalfe’s Law

Ethereum this week set a new all-time high, beating its peak set in 2017 amidst a flurry of initial coin offerings and widespread retail FOMO. The top ranked altcoin topped out at $1,419 on Coinbase back in January 2018 – weeks after Bitcoin set its then-record at $20,000.

And although it fell to $80 in the years following, and is only now trading at that former level, an economist, trader, and mathematician believes that Ethereum will follow Bitcoin’s steps to $20,000 eventually.

RELATED READING | IMF SURVEY OVERWHELMINGLY SUPPORTS CRYPTO AS “MONEY”

D. H. Taylor based the target on “Metcalf’s Law [sic] .” According to a summary, Metcalfe’s Law can map “the rate of growth of a network” using “the square of the number” of its users.

“Internet usage, Facebook, and Bitcoin can all be mapped using Metcalf’s Law [sic] , including the price moves of Bitcoin,” the summary continues.

Using Metcalfe’s Law, the author claims that Ethereum will repeat “what Bitcoin did” and move up to $20,000 per ETH.

Ethereum is following Bitcoin's steps fairly consistently thus far | Source: ETHUSD on TradingView.com

Repeating Bitcoin’s Meteoric Rise Or Outright Outperformance?

A rise from $1,400 per ETH to over $20,000 might sound implausible, but it’s only a 1400% gain from current prices. From May 2017 to January 2018 the altcoin did that much and then some, moving four times that amount during the entirety of 2017.

The report’s author appears to believe the Metcalfe’s Law should put the price per Ether at more than $20,000, following Bitcoin’s “meteoric rise” in 2017.

However, other well known economists, such as Claude Erb of the National Bureau of Economic Research in Cambridge, Massachusetts, have used the model to cap Bitcoin’s maximum price at only $73,000 per BTC. If that’s the ceiling on Bitcoin then a $20,000 target on Ethereum isn’t as realistic.

RELATED READING | ALTCOINS SOAR ALONGSIDE BITCOIN, CRYPTO MARKET CAP NEARS $1 TRILLION

The problem with Erb’s application of Metcalfe’s Law, is that he incorrectly relies on the total supply of BTC as the total number of “users.” That would suggest Ethereum’s value could go higher than Bitcoin’s based on the total number of tokens, but cryptocurrencies are far more decentralized. The former commodities portfolio manager and finance professor at Duke University lacks a deep enough understanding of the underlying technology.

Taylor, the author with the large target per ETH, does the technology justice and based on their usage of the methodology, expects Ethereum to outpace Bitcoin and eventually have a repeat performance of the cryptocurrency’s 2017 rally.

Featured image from Deposit Photos, Charts from TradingView.com



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Ethereum Hits Three-Year High as Bitcoin Volatility Dims; Record Highs Ahead?




Ethereum (ETH) reached levels it last tested in January 2018 as a less volatile Bitcoin kept creating upside opportunities in the $105 billion altcoin market.

Ethereum blasts upwards towards its record high levels from early-2018. Source: ETHUSD on TradingView.com

The second-largest cryptocurrency (by market cap) surged by roughly 10 percent on Monday to hit an intraday peak level of $1,391.82.

Its rally appeared in absence of any concrete catalysts, prompting observers to call the move entirely speculative. Meanwhile, some also noted that the coin merely benefited from a lack of wild fluctuations in the Bitcoin market that open attractive intraday opportunities for long/short traders.

Bitcoin Slowdown

The top cryptocurrency went on a corrective course after setting a record high of $41,986 on January 8. After a 30 percent decline, it started consolidating sideways, with each extension leading to dimming volumes and low volatility. Traders typically use the Bitcoin’s consolidation phase as a cue to long the altcoin market, leading to beginning of the so-called “altseason.”

“ETH/BTC retesting highs of current movement and sitting over .033 sats level Current level acted a strong resistance over the last 4/5 months, so looking for a flip and straight continuation to the 2020 highs (~20%),” said independent analyst Nico. “Overall, looks good and altseason can’t happen without ETH.”

To many, Ethereum’s upside move is also an effort to reach its January 2018 high of $1,419. Economist Alex Krüger envisioned the ETH/USD rates hitting $2,000 in the coming sessions. He tweeted:

“Ethereum will soon pass to the next level. These are the levels to watch beyond all time highs: $1,500, $1,600, $1,920, $2,000, $2,240, $2,500, and $2,750.”

The upside predictions also appeared in the wake of Ethereum’s long-term bullish prospects owing to a plethora of supportive fundamentals. They include the booming decentralized finance projects that operates atop the Ethereum blockchain, thereby increasing ETH adoption, and its switch from proof-of-work to proof-of-stake (read ETH 2.0) that effectively puts a considerable ETH supply out of circulation.

“Ethereum’s daily transaction volume is going parabolic. It now settles $12 billion in transactions daily – $3 billion more than Bitcoin. Imagine not being bullish,” asserted Ryan Watkins, researcher at Messari, a data aggregation portal.





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DeFi lending and borrowing, explained



Lending and borrowing, within the realm of traditional as well as crypto finance, entails the act of one party providing monetary assets — be it fiat or digital currencies — to someone else in exchange for a steady income stream.

The concept of “lending and borrowing” has been around for ages and is one of the core aspects of any financial system, especially the “fractional banking” setup that is predominantly used across the globe today. The idea is extremely straightforward — i.e., lenders provide funds to borrowers in return for a regular interest rate, and that’s quite literally it. Also, traditionally, such deals are usually facilitated by a financial institution such as a bank or an independent entity such as a peer-to-peer lender.

In the context of cryptocurrencies, lending and borrowing can be facilitated via two primary routes — via a centralized finance institution, such as BlockFi, Celsius, etc., or through the use of decentralized finance protocols such as Aave, Maker and so on.

CeFi platforms, though decentralized to a certain extent, work in pretty much the same way as most banks, whereby they take custody of one’s deposited assets, eventually loaning them out to third parties — such as market makers, hedge funds or other users of their platform — while providing the original depositor with steady returns. And though on paper this model looks and works quite well, it could be prone to a number of issues, such as thefts, hacks, insider jobs, etc.

DeFi protocols, on the other hand, allow users to become lenders or borrowers in a completely decentralized fashion, such that an individual has complete control over their funds at all times. This is made possible via the use of smart contracts that operate on open blockchain solutions such as Ethereum. In contrast to CeFi, DeFi platforms can be used by anyone, anywhere without them having to hand over their personal data to a central authority.





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Core contributors, investors debate Yearn token mint



What started as a simple governance proposal to build a war chest for the the Yearn.finance development team has now spilled over into a wider conversation about incentivization, sustainability, and fair project launches in the decentralized finance (DeFi) space. 

On Wednesday, Jan. 13 six Yearn community members including multiple core contributors proposed a “Buyback and Build” program that would divert protocol fees towards bolstering the treasury — a proposal that would alter the current system which distributes a dividend to governance participants. The proposal has since been nicknamed ‘BABY.’

In an interview with Cointelegraph, semi-anonymous Yearn core contributor and one of the co-authors of the proposal, Tracheopteryx, said that BABY is meant to allow for superior sustainability at Yearn’s current stage of growth.

“We are proposing to stop paying out protocol fees as dividends to YFI stakers in governance and instead use this revenue for an automated YFI buyback, reinvesting it into growing Yearn. Our core argument is pretty simple: 1) dividends don’t make sense for our early stage of development, and 2) there are better returns available for YFI elsewhere,” he said.

Mint more YFI?

Just a day before the BABY proposal was published, however, another proposal written by a lone community member which was also aimed at sustainability attracted far more debate on the Yearn governance forums. 

Titled “**[Proposal]** Developer Incentives,” it called for the minting of an additional 1000 YFI tokens on top of the original 30,000 — tokens which would be distributed among the core team at their sole discretion in order to incentivize ongoing development.

Core Yearn dev banteg posted a link to the proposal on Twitter on Thursday, setting off a flurry of impassioned debate that rippled out to the wider crypto community:

Both proponents and detractors of an additional mint accused the opposing side of being greedy, with skeptics saying developers should hew to the original quantity and supporters arguing that incentivization is more important than any potential dilution. Even Yearn founder Andre Cronje weighed in on the discussion:

The thread on the Yearn forums now sits at 209 replies, with an estimated read time of 40 minutes, and the debate on Twitter continues into Sunday evening unabated. 

Memes versus reality

The core argument many of those opposed to minting more YFI have put forth is that it would violate the “fair launch” ethos that, in part, made Yearn popular in the first place. Additionally, skeptics of a mint argue that there were previous votes on burning the minting keys to prevent the creation of YFI beyond the initial 30,000. 

A thorough analysis, however, shows that governance never definitively decided on burning the keys that would allow a mint:

Additionally, Tracheopteryx says that while they can act as an inarguable value driver, memes shouldn’t be the primary consideration for a project. 

“Narratives are powerful, but they are also limiting. Just as the word “table” can never capture the rich multi-sensory experience of an actual hand-crafted wooden table, a meme or narrative compresses reality into easily transmissible meaning-chunks.”

In this case, the easily-transmitted chunks are too focused on a mythos built around YFI’s origin, and not on how the project will continue to create value. 

As a result, fealty to the narrative of YFI’s fair launch — a launch format which its founder has since said was a mistake — is now clouding its future. Because of YFI’s distribution, developers don’t own as significant a share of the governance token relative to platforms like Synthetix and Aave, potentially opening the developers up to being poached by other projects with lucrative offers or losing interest due to their lack of incentivization.

“A narrative is never equal to the on-the-ground reality and reduces optionality. Narratives have value for exactly this reason: they are simpler, easier to understand, easier to share, and due to this they can become focal points for coordination. And in DeFi they can also become conflated and mismatched,” Tracheopteryx added.

Forming consensus

Over the past two days the debate on Twitter has largely devolved into memes and namecalling, but conversations on Yearn’s governance forum and social media channels have been heartening both for their passion and their sophistication, says Tracheopteryx.

“It’s f—-ing awesome. I have been so energized by the community engagement. I am just blown away by how many people care, how many people want to help, and how many people actually do jump in and start working out of nowhere . . . it’s deeply meaningful for me,” he said.

Proposals include community crowdfunding a treasury in lieu of a mint, and a variety of debt instruments. Ultimately, however, while opposition to a mint remains, consensus is slowly forming in favor of one.

Major tokenholders seem to be rallying in support — so long as there’s an accounting of how the funds will be used, among other stipulations — auguring an eventual successful vote in favor of inflating YFI’s max supply.

While the exact details remain cloudy, Tracheopteryx believes finding the solution will be more of a process than an event.

“There is a lot of momentum emerging to properly compensate the yearn team and build out our treasury. I believe the conversation will continue and more proposals will emerge over the next week at least,” he said.

“Governance action seems to move in waves, we’re in one now.”





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BTC crash, DOT crushes XRP, man risks losing $262M: Hodler’s Digest, Jan. 10–16


Coming every Saturday, Hodler’s Digest will help you track every single important news story that happened this week. The best (and worst) quotes, adoption and regulation highlights, leading coins, predictions and much more — a week on Cointelegraph in one link.

Top Stories This Week

Bulls buy Bitcoin’s $35,000 support retest as altcoins push higher

Scream if you want to go faster. The crypto markets have been a rollercoaster ride this week — with Bitcoin’s price falling by more than $10,000 to lows of $30,549.60 on Monday.

Analysts maintained that the correction was “healthy and necessary,” with the sharp sell-offs prompting the total crypto market cap to fall by more than $200 billion

ExoAlpha CIO David Lifchitz said the crash “would purge the excessive growth of the past 10 days, allowing Bitcoin to build a new base toward $50,000 and above.”

And indeed, Bitcoin refused to die. Just three days after the sudden downturn, BTC reached $40,000 on Coinbase once again, amid fresh evidence of new large buys on exchanges. Tyler Winklevoss had a clear message: “Don’t listen to the noise, stay focused.”

Alas, it seems like $40,000 is now shaping up to be a tough nut to crack. Despite Joe Biden unveiling an eye-watering stimulus package worth $1.9 trillion, there was not a surge to be seen in Bitcoin’s price. Indeed, BTC actually fell under $35,000 at one point.

 

eToro warns users it is running out of crypto to trade due to unprecedented demand

An email sent out by eToro suggests that the exchange is struggling to keep up with users who are clamoring to snap up Bitcoin.

In a message to customers, it warned that “unprecedented demand for crypto coupled with limited liquidity” meant limits on crypto buy orders may need to be enforced over the weekend.

It seems the company has been a victim of its own success. The email came a day after eToro marketing manager Brad Michelson revealed that 380,000 users had opened accounts in the first 11 days of January — with crypto trading volumes running 25 times higher than they were last year.

Quantum Economics founder Mati Greenspan — formerly a market analyst for eToro — told Cointelegraph that the warning notice was “a symptom of a potential upcoming liquidity crunch” and advised users against trying to move funds off the platform.

An eToro spokesperson told Cointelegraph: “Our experience of the 2017 crypto rally means that we understand the possible consequences of extreme volatility in crypto markets. We want to ensure that our clients fully understand the possible risks.”

DOT flip: Polkadot overtakes XRP to become the fourth-largest cryptocurrency

There have been some big movers as the crypto market rally resumes and Polkadot’s DOT token is among them.

DOT has flipped Ripple’s XRP in terms of market capitalization following a massive gain of 29% over the past 24 hours. This makes it the new fourth-largest cryptocurrency, with a market cap of $15.6 billion at the time of writing. Over the past week, DOT has surged by an impressive 83.26%.

Polkadot is a fully interoperable platform that allows other blockchains to connect to the network, and it has been described as an “Ethereum killer” because of how it can process thousands of transactions per second.

The most recent update, which may be driving momentum, was the launch of its Rococo parachain testnet, which went live in late December.

Other factors driving momentum include the issues with DeFi on Ethereum as demand for scaling intensifies.

 

Programmer has two password guesses left to avoid losing $262 million in Bitcoin

Two gut-wrenching stories emerged this week — both with a similar theme.

One man told The New York Times that he has forgotten the password to a hard drive holding 7,002 BTC — a crypto haul that’s worth a jaw-dropping $262 million at the time of writing.

Stefan Thomas has just 10 guesses before the hard drive is encrypted forever… and so far, he has used eight of these attempts to no avail.

Meanwhile, on the other side of the Atlantic, a Welshman is offering the city of Newport a staggering $72 million for help in tracking down a hard drive storing 7,500 BTC. There’s just one problem: It was thrown away several years ago and is languishing in a landfill. Unfortunately for James Howells, the council has said it isn’t prepared to help over concerns that the search would be damaging for the environment. That means he’s going to miss out on a $280-million fortune.

Thankfully, it isn’t all bad news. A student has claimed that they have found private keys that they accidentally Hodled as early as 2011, unlocking $4 million in the process.

 

ECB president Lagarde renews calls for global regulation of Bitcoin

The president of the European Central Bank has doubled down on calls for Bitcoin to be regulated globally.

Speaking at the Reuters Next conference, Christine Lagarde said: “[Bitcoin] is a highly speculative asset, which has conducted some funny business and some interesting and totally reprehensible money laundering activity.”

During the interview, Lagarde did not reportedly refer to any specific instances of money laundering involving Bitcoin but alluded to her awareness of criminal investigations into illegal activities connected with its use. 

She told reporters: “There has to be regulation. This has to be applied and agreed upon […] at a global level because if there is an escape that escape will be used.”

 

Winners and Losers

 

At the end of the week, Bitcoin is at $37,271.25, Ether at $1,255.16 and XRP at $0.28. The total market cap is at $1,038,320,969,138.

Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are HedgeTrade, Voyager Token and IOST. The top three altcoin losers of the week are Bitcoin SV, EOS and Verge.

For more info on crypto prices, make sure to read Cointelegraph’s market analysis

 

Most Memorable Quotations

“They said #Bitcoin died on Monday, but now it’s above 37k. Don’t listen to the noise, stay focused.”

Tyler Winklevoss, Gemini co-founder

 

“Did nocoiners really think #Bitcoin wouldn’t bounce back? This is the year of the Metal Bull. $100k is inevitable.”

Samson Mow, Blockstream CSO

 

“This whole idea of being your own bank — let me put it this way: Do you make your own shoes? The reason we have banks is that we don’t want to deal with all those things that banks do.”

Stefan Thomas, locked out of 7,002 BTC 

 

“The unprecedented demand for crypto, coupled with limited liquidity, presents challenges to our ability to support BUY orders over the weekend.”

eToro

 

“[Bitcoin] is a highly speculative asset, which has conducted some funny business and some interesting and totally reprehensible money laundering activity.”

Christine Lagarde, European Central Bank president

 

“I look at the asset value of Bitcoin versus the asset value of all things traded and Bitcoin is still a nothing burger — a giant nothing burger.”

Kevin O’Leary, businessman

 

 

Prediction of the Week

Pantera Capital CEO doubles down on $115,000 Bitcoin prediction for 2021

Dan Morehead has maintained his bullish prediction for 2021, with the Pantera Capital CEO claiming that Bitcoin is on track to have surged 800% by August and hit $115,000.

The exec initially made this prediction in August 2020, when Bitcoin was trading at about $11,600. At the time of writing, it is now worth $37,000.

Setting out why Bitcoin has plenty of room for growth, he added: “Is Bitcoin overvalued? I would say no. […] Bitcoin has spent three years well below its long-term compound annual growth trend line, it’s still below it, and although Bitcoin has rallied a great deal over the last six months, I think it is fairly valued.”

 

FUD of the Week 

 

British financial adviser calls on the government to ban crypto transactions

A veteran financial advisor has called on the British government to ban crypto transactions.

Neil Liversidge started a petition urging local financial authorities to stop Bitcoin payments in the United Kingdom.

He argued that digital assets have no intrinsic value, adding they can have a “destabilizing influence on society, and are often used for criminal activity.”

In an interview with Professional Adviser, Liversidge urged retail investors to cash out immediately, adding: “If the UK government takes a lead by banning transactions on cryptos as my petition requests, that will set off a chain reaction, crashing cryptos overnight.”

Liversidge needs 10,000 signatures for a response from the government. At the time of writing, he’s got just 112.

Ledger owners report chilling threats after 20,000 more records leaked

Ledger users are receiving threatening emails in the wake of the hardware wallet manufacturer reporting that 20,000 more of its customers have been affected by another massive data breach.

One Reddit user said his father, who owns a Ledger wallet, received a message including his name, home address and phone number. The extortionist demanded 0.3 BTC or 10 ETH, worth roughly $12,000, or he would face physical violence.

The Redditor wrote: “I know that those scammers sending emails by hundreds are just trying their luck by creating fear, but when it comes to the safety of your family it’s another story.”

In another email, the scammer wrote: “Are you able to imagine all the possible consequences that can occur to you and your loved ones? I hope you do not ruin every little thing for yourself by making the wrong choice.”

Bitcoin payments are the “second stupidest idea I’ve heard,” says Stephen Colbert

Stephen Colbert, the charismatic host of CBS’ The Late Show, isn’t holding back his punches or his jokes when it comes to Bitcoin.

He referenced a recent Vice report that revealed how hackers had taken control of internet-connected chastity cages — devices worn by men to prevent them from engaging in any sort of sexual activity — and demanded Bitcoin to unlock them.

With a wry smile, he said: “Getting paid in Bitcoin? That’s the second stupidest idea I’ve heard.”

Colbert first covered Bitcoin on his show in April 2014 when Bitcoin was fluctuating between $50 and $300. Since then, BTC has risen by more than 40,000%.

 

Best Cointelegraph Features

Bitcoin has become nothing but the new Che Guevara T-shirt

Cassio Gusson argues Bitcoin promised to create a new normal in finance, but it turned out to be nothing but the old normal with a new face.

Here’s how institutional investors ignited Bitcoin’s rally to $40,000

In this article by Benjamin Pirus, experts weigh in on the main events from 2020 that impacted Bitcoin’s price the most.

Strap in: New institutions wait for Bitcoin price rollercoaster to end

Bitcoin market volatility is scaring off new institutional investors, but meanwhile, old ones continue to buy up the BTC dips. Here’s Shiraz Jagati.



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Ethereum competitor Near Protocol (NEAR) gains 106% as DeFi heats up


Near Protocol (NEAR) is a smart contract platform that uses parallel processing to scale the network. This technique, known as sharding, resembles what Eth2 is aiming to achieve and Near’s proof-of-stake consensus mechanism also allows token holders to stake their coins. 

In the past month, NEAR has rallied by 107% and this raises questions on whether the project is making significant strides in what has become an ultra-competitive smart contract industry.

NEAR/USDT (Binance). Source: TradingView

Compared to its competitors, NEAR is a relatively new project as the mainnet only launched in April 2020. Unlike Ethereum, NEAR’s consensus mechanism works towards fee stabilization and according to its website, the protocol aims to accelerate the development of decentralized applications.

Interestingly, Near’s ICO took place four months after its mainnet launch. A possible reason for this is that the team raised $35 million in private funding rounds held in July 2019 and May 2020. Among its investors are Andreessen Horowitz’s a16z Crypto Investments, Pantera Capital, Electric Capital, and Ripple’s incubator Xpring.

Over the past three months, Near Protocols’ network activity has increased significantly and information on the Near Blog shows there are a couple of exciting applications already live.

Near Protocol daily number of transactions. Source: explorer.near.org

One is Berry Club, a yield arming app/game that lets players draw with pixels and earn collectible tokens. Another application called Paras also allows users to interact with a NFT digital art card marketplace.

DeFi integration accelerates

On Nov. 24, 2020, 1inch.exchange-backed project Mooniswap revealed their plan to build Automated Market Making (AAM) features on NEAR.The decentralized exchange’s aggregator is designed to roll liquidity and pricing from all significant DEXs into one platform.

Sergej Kunz, CEO and co-founder of 1inch, stated: “By building on NEAR, we’ll be able to experiment with sharding and be prepared for the arrival of Ethereum 2.0.

On Jan. 19, Crypto.com also intends to launch a new pool offering $250,000 worth of NEAR tokens at 50% below the market price. Clients will need to stake CRO tokens and also meet the set trading volume requirements on the exchange.

One area of concern is there are open questions regarding how the community treasury is governed. A substantial number of NEAR tokens are being managed by a handful of people who are not required to abide by clear guidelines and rules.

NEAR Twitter user activity vs. price (USD). Source: TheTie

Data from TheTie, an alternative social analytics platform, shows that the recent price spike was accompanied by increased social network activity. Nevertheless, transfers and transactions on the Near Protocol mainnet began only three months ago.

Compared to its competitors NEAR protocol appears to be in an early development stage. Effectively delivering the Mooniswap integration will likely be an important milestone for the project and if successful, NEAR token could possibly see further upside.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.





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Gamers are still Nvidia’s masters, but Ether miners could change that



Gaming hardware giant Nvidia has addressed the ongoing shortage of its new RTX 3000 product line after high demand from gamers, and to a lesser extent, cryptocurrency miners, pushed up prices and cut availability.

Nvidia chief financial officer Colette Kress said the company didn’t have good visibility into how much demand came solely from cryptocurrency miners, but she doesn’t believe it’s a big part of the business at this time.

That’s despite reports of some Ether (ETH) miners constructing rigs comprised of 78 of Nvidia’s Geforce RTX 3080 graphics cards, estimated to net their owner profits of $122,000 per year.

Kress did suggest that any future spikes in demand from miners could present a good opportunity to restart the company’s CMP product line. CMP refers to a range of Nvidia graphics cards created specifically for cryptocurrency mining, which ship without the display outputs unnecessary for the task in question.

Speaking at the 19th Annual J.P. Morgan Tech/Auto Forum Conference on Jan. 12 via Seeking Alpha, Kress told an audience of investors that should the firm observe any demand from would-be miners, they would consider manufacturing more mining-specific graphics cards.

“So, in summary, if crypto demand begins or if we see a meaningful amount, we can also use that opportunity to restart the CMP product line to address ongoing mining demand,” said Kress.

The chief financial officer believes the majority of demand still comes from a primarily gaming-focused user base, adding that gaming demand alone outpaced the company’s supply capacity.

Kress said cryptocurrency mining was one of the many unique applications resulting from the programmable nature of Nvidia’s cards, and one that had helped drive market growth in the past:

“Yes. So, cryptocurrency is interesting. So GPUs, as you know, have been programmable for many, many years, and it allows a constantly discovering capability for new applications to use the overall GPUs, and that has driven our overall growth in the market. Cryptocurrency mining is one of those such applications.”

According to Kress, Nvidia’s supply capacity would remain diminished until at least the start of Q2, and revenues are expected to remain flat until that time.



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