- No products in the cart.
BEST SELLING PRODUCTS
The world of decentralized finance (DeFi) is gradually expanding to encompass a significant share of the global financial lending space by virtue of the inherently trustless manner of operation and the ease of accessing capital. As the crypto ecosystem has grown to a $2-trillion industry by market capitalization, new products and offerings have emerged thanks to burgeoning innovation in blockchain technology.
Lending and borrowing have become an integral part of the crypto ecosystem, especially with the emergence of DeFi. Lending and borrowing are one of the core offerings of the traditional financial system, and most people are familiar with the terms in the form of mortgages, student loans, etc.
In traditional borrowing and lending, a lender provides a loan to a borrower and earns interest in exchange for taking the risk, while the borrower provides assets such as real estate, jewelry, etc., as collateral to obtain the loan. Such a transaction in the traditional financial system is facilitated by financial institutions such as a bank, which takes measures to minimize the risks associated with providing a loan by conducting background checks such as Know Your Customer and credit scores before a loan is approved.
In the blockchain ecosystem, lending and borrowing activities can be conducted in a decentralized manner wherein the parties involved in a transaction can deal directly with each other without an intermediary or a financial institution through smart contracts. Smart contracts are self-executing computer codes that have a certain logic where the rules of a transaction are embedded (coded) in them. These rules or loan terms can be fixed interest rates, the loan amount, or contract expiry date and are automatically executed when certain conditions are met.
Loans are obtained by providing crypto assets as collateral on a DeFi platform in exchange for other assets. Users can deposit their coins into a DeFi protocol smart contract and become a lender. In return, they are issued native tokens to the protocol, such as cTokens for Compound, aTokens for Have or Dai for MakerDao to name a few. These tokens are representative of the principal and the interest amount that can be redeemed later. Borrowers provide crypto assets as collateral in exchange for other crypto assets that they wish to borrow from one of the DeFi protocols. Usually, the loans are over-collateralized to account for unexpected expenses and risks associated with decentralized financing.
One can lend and borrow through various platforms in the decentralized world, but one way to gauge the performance of a protocol and select the right one is by observing the total value locked (TVL) on such platforms. TVL is a measure of the assets staked in smart contracts and is an important indicator used to evaluate the adoption scale of DeFi protocols as the higher the TVL, the more secure the protocol becomes.
Smart contract platforms have become a major part of the crypto ecosystem and make it easier to borrow and lend due to the efficiencies offered in the form of lower transaction cost, higher speed of execution and faster settlement time. Ethereum is used as a dominant smart contract platform and is also the first blockchain to introduce smart contracts. The TVL in DeFi protocols has grown by over 1,000% from just $18 billion in January 2021 to over $110 billion in May 2022.
Ethereum takes up more than 50% of the TVL at $114 billion as per DefiLlama. Many DeFi lending and borrowing protocols are built on top of Ethereum due to the first-mover advantage. However, other blockchains, such as Terra, Solana and Near Protocol, have also increased traction due to certain advantages over Ethereum such as lower fees, higher scalability and more interoperability.
Ethereum DeFi protocols such as Aave and Compound are some of the most prominent DeFi lending platforms. But one protocol that has grown significantly in the past year is Anchor, which is based on the Terra blockchain. The top DeFi lending protocols based on TVL can be seen in the graph below.
The transparency provided by DeFi platforms is unmatched by any traditional financial institution and also allows for permissionless access, implying that any user with a crypto wallet can access services from any part of the world.
Nevertheless, the potential for growth of the DeFi lending space is massive, and the use of Web3 crypto wallets additionally ensures that DeFi participants maintain a hold over their assets and have complete control over their data by virtue of the cryptographic security provided by blockchain architecture.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Neeraj Khandelwal is a co-founder of CoinDCX, an Indian crypto exchange. Neeraj believes that crypto and blockchain can bring about a revolution in the traditional finance space. He aims to build products that make crypto accessible to and easy for global audiences. His areas of expertise lie in the crypto macro space, and he also has a keen eye for global crypto developments such as CBDCs and DeFi, among others. Neeraj holds a degree in electrical engineering from the prestigious Indian Institute of Technology Bombay.
On May 17, United States Federal Reserve Chairman Jerome Powell told the Wall Street Journal that the 50-basis-point rate hikes would continue until inflation is under control. Powell’s emphasis on a hawkish policy suggests that monetary conditions are likely to remain tight in 2022, which could limit the upside in risky assets.
On-chain market intelligence firm Glassnode said that historically, Bitcoin (BTC) has bottomed out when the price breaks below the realized price. However, barring the 2019 to 2020 bear market, during previous bear cycles, Bitcoin’s price stayed below the realized price for anywhere between 114 to 299 days. This suggests that if macro situations are not favorable, a quick recovery is unlikely.
While the current decline in U.S. equity markets and Bitcoin has similarities with the crash in March 2020, the recovery may not follow the same trajectory because market conditions are different. In 2020, the Fed supported the markets with an unprecedented stimulus, but in 2022 the focus will remain on reducing inflation and monetary tightening.
Could Bitcoin and altcoins resume their downtrend or will lower levels attract buying? Let’s study the charts of the top-10 cryptocurrencies to find out.
Bitcoin’s recovery failed to rise above the 38.2% Fibonacci retracement level at $31,721 suggesting that the trend remains negative and traders are selling on minor rallies.
The BTC/USDT pair could drop to the immediate support at $28,630. If the price rebounds off this level, the pair could consolidate between $28,630 and $31,721 for some time.
A break and close above the 20-day exponential moving average (EMA) ($32,979) will be the first sign of a potential change in trend. The pair could then rally to the 61.8% retracement level at $34,823.
On the other hand, if the price slips below $28,630, the bears will try to cement their position by pulling the pair below $26,700. If that happens, the negative momentum could pick up and the pair may slide to $25,000 and thereafter to $21,800.
Ether’s (ETH) failure to rise above the overhead resistance at $2,159 may have tempted short-term traders to book profits. That pulled the price below $1,940 but the bulls are attempting to defend the level.
If the price rebounds off $1,940 with strength, the ETH/USDT pair could again rise to $2,159. The bulls will have to push and sustain the price above $2,159 to clear the path for a rally to the 20-day EMA ($2,353). A break and close above this resistance will suggest that the markets have rejected the lower levels.
Conversely, if bears sustain the price below $1,940, the pair could decline to the crucial support at $1,700. This is an important level to keep an eye on because a break below it could result in panic selling. The pair could then slump to $1,500 and later to $1,300.
The bulls have not been able to push BNB above the overhead resistance at $320. This suggests that bears have not given up and they continue to sell at higher levels.
If the price slips below $290, the BNB/USDT pair could drop to $265. This level is likely to act as a strong support but if bears pull the price below it, the next stop could be the critical level at $211. The bears will have to break this level to signal the start of the next leg of the downtrend.
Alternatively, if the price rebounds off $265, it will suggest that bulls are attempting to form a bottom. That could keep the pair stuck between $320 and $265 for a few days. A break and close above $320 could suggest that the pair may have bottomed out.
Ripple’s (XRP) recovery failed to sustain above $0.45, indicating a lack of demand at higher levels. The bears will now attempt to pull the price below the immediate support zone at $0.40 to $0.38.
If they do that, the XRP/USDT pair could drop to $0.33. This is an important level to keep an eye on because a break and close below it could signal the resumption of the downtrend. The XRP/UDST pair could then plunge to the next support at $0.24.
On the other hand, if the price rises from $0.38 or $0.33, the bulls will again try to push the pair above $0.45. If they succeed, the pair could rise to the stiff overhead resistance zone at $0.50 to $0.55. The bulls will have to clear this hurdle to suggest that the downtrend may be over.
Cardano (ADA) has been stuck in a tight range between $0.61 and $0.51 for the past few days. This suggests a tough battle between the bulls and the bears.
If the price slips below $0.51, the ADA/USDT pair could slide to the support zone between $0.46 and $0.40. The bulls may mount a strong defense in this zone. If the price rebounds off this zone, the buyers will again try to push the pair above the 20-day EMA. If they succeed, the pair could rise to $0.74.
Conversely, if the price breaks below $0.40, the selling could pick up momentum and the pair may extend its decline to $0.33 and then to $0.28.
Solana (SOL) is facing strong resistance near the 38.2% Fibonacci retracement level at $59, suggesting that the sentiment remains negative and bears are selling on minor rallies.
If the price breaks below the psychological level at $50, the pair could slip to $43 and thereafter to $37. The bulls are likely to defend this level with all their might because if the support gives way, the downtrend could resume. The next stop on the downside may be $32.
Alternatively, if the price turns up from the current level and rises above $59, the SOL/USDT pair could rally to the overhead resistance zone between the 20-day EMA ($67) and $75. A break and close above this zone could suggest that the downtrend may be over.
Dogecoin (DOGE) continues to trade below the breakdown level of $0.10. This suggests a lack of urgency to buy at higher levels. Generally, sharp declines are followed by consolidations as bulls and bears battle it out for supremacy.
The failure of the bulls to push the price above $0.10 may attract another round of selling by the bears who will attempt to resume the downtrend. If the price dips below $0.08, the DOGE/USDT pair could drop to $0.06. If this support cracks, the decline could extend to the next support at $0.04.
On the contrary, if the price rebounds off $0.08, the pair may rise to $0.10 and remain stuck inside this range for a few days. The bulls will have to push and sustain the price above the 20-day EMA ($0.10) to suggest that the downward momentum may be weakening.
The bulls defended the $10.37 support on May 17 but the shallow rebound suggested a lack of demand at higher levels. The bears resumed their selling on May 18 and pulled the price below $10.37. Polkadot (DOT) could now drop to $8.
The buyers are expected to aggressively defend the zone between $8 and $7.30. If the price rebounds off this zone, the DOT/USDT pair could again attempt a relief rally. The recovery could pick up momentum on a break above the 20-day EMA ($12.53).
Alternatively, if bears sink the price below $7.30, the selling could accelerate and the pair may signal the resumption of the downtrend. The pair could then plummet toward psychological support at $5.
The buyers could not push Avalanche (AVAX) above the immediate resistance at $38. This suggests that demand dries up at higher levels.
The bears will now fancy their chances and attempt to pull the price below the critical support at $29. If they succeed, the AVAX/USDT pair could retest the May 12 intraday low at $23.51. A break and close below this level could open the doors for a further decline to $20 and later to $18.
Contrary to this assumption, if the price rebounds off $29, the bulls will again try to push the pair above $38. If that happens, the relief rally could reach the 20-day EMA ($45). The bears may again pose a strong challenge at this level.
Shiba Inu (SHIB) has been consolidating inside the tight range between $0.000011 and $0.000014 for the past four days. Usually, such tight ranges resolve in a strong trending move.
If the price breaks below $0.000011, the bears will try to pull the SHIB/USDT pair to $0.000009. This is an important level for the bulls to defend because a break below it could signal the resumption of the downtrend. The pair could then decline to $0.000007 and later to $0.000005.
Contrary to this assumption, if the price turns up and breaks above the 38.2% Fibonacci retracement level at $0.000014, the bulls will attempt to push the pair to the breakdown level at $0.000017.
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.
Market data is provided by HitBTC exchange.
Ahead of Ethereum’s highly anticipated switch to proof-of-stake (PoS), cyber security firm Cloudflare is set to launch and fully stake Ethereum validator nodes over the next few months.
It aims to study energy efficiency, consistency management, and network speed of the PoS network as part of its commitment to environmental sustainability and to help “build a better internet.”
Cloudflare was founded in 2010 and provides web security services such as distributed denial-of-service (DDoS) mitigation to protect clients from DDoS attacks.
Cloudflare said it was experimenting with the “next generation of Web3 networks that are embracing proof of stake,” with Ethereum being the first in line for the company.
At this stage, it appears the Merge and transition to a PoS consensus mechanism is slated to go live by Q3 or early Q4, barring any further delays, with Cloudflare noting that this will lead to “significant energy efficiency improvements” for the network.
According to a May 16 blog post, the firm will launch and fully stake Ethereum validator nodes (32 Ether required per node) over the next few months. It did not specify how many nodes, or a specific start date.
“Cloudflare is going to participate in the research and development of the core infrastructure that helps keep Ethereum secure, fast, as well as energy-efficient for everyone.”
“These nodes will serve as a testing ground for research on energy efficiency, consistency management, and network speed,” the blog post adds.
The firm said the tests relate to its commitment to the environment and helping pave a path “that balances the clear need to drastically reduce the energy consumption of Web3 technologies and the capability to scale the Web3 networks by orders of magnitude.”
Cloudflare noted that Ethereum’s upcoming upgrades will significantly reduce its energy consumption as it shifts away from the environmentally “challenging” proof-of-work model, which has been at the forefront at Web3 adoption but does “not scale well with the usage rates we see today.”
“The energy required to operate a Proof of Stake validator node is magnitudes less than a Proof of Work miner. Early estimates from the Ethereum Foundation estimate that the entire Ethereum network could use as little as 2.6 megawatts of power. Put another way, Ethereum will use 99.5% less energy post-merge than today.”
While the firm did not outline which project it will focus on next, it teased that it will be working with partners across “cryptography, Web3, and infrastructure communities” moving forward.
Its been a rough couple of weeks for the cryptocurrency market. Bitcoin (BTC) price is nowhere near the price estimates of most analysts, multiple stablecoins lost their peg and the demise of one of the top decentralized finance (DeFi) platforms sparked an event that resulted in $900 billion vanishing from the total crypto market capitalization.
In the midst of the widespread fallout, MakerDAO (MKR) managed to turn crisis into opportunity and the collapse of TerraUSD (UST) has brought renewed attention to DAI, the longest-running decentralized stablecoin.
Data from Cointelegraph Markets Pro and TradingView shows that as the collapse of Terra (LUNA) price accelerated from May 9 to May 12, MKR climbed 66.2% from a low of $952 on May 12 to its current value of $1,587.
Three possible reasons for the MKR’s reversal in momentum include DAI maintaining its peg during the recent market turmoil, the use of a MakerDAO vault to finance supply chain shipments and the addition of staked Ether (ETH) as a form of collateral to mint DAI.
One of the most significant factors giving investors more confidence in the MakerDAO ecosystem is the fact that DAI held its dollar peg during a shaky market that saw a handful of the most popular stablecoins lose their pegs.
Over the past few days DAI demand has violently contracted by 25%, but the peg is still rock solid due to the Peg Stability Modules.
Stacking DAI demand into the PSMs during the bull market gives DAI holders peace of mind during even the roughest of weeks. pic.twitter.com/XGEYndBP05
— hexonaut.eth @ Permissionless (@hexonaut) May 12, 2022
During the height of volatility, the price of DAI oscillated from a low of $0.9961 on May 11 to a high of $1.0046 on May 12 and is currently priced at $0.9994.
DAI holding steady despite a supply decrease of more than 2.2 billion DAI may have given investors more confidence, especially after Tether (USDT) briefly saw its price hit a low of $0.9704.
Another factor providing a boost to MKR is its growing real world adoption. Recently, the MakerDAO vault was used to finance a shipment of Australian beef and additional “use cases” are being planned.
A Maker Vault was used to finance a shipment of Australian Beef from Brisbane to Hong Kong.
On top of that, the entire operation is currently being tracked using @Mastercard Provenance, a blockchain traceability solution.
This is how it was possible
— Maker (@MakerDAO) May 10, 2022
On May 9, a MakerDAO vault was utilized in conjunction with the decentralized asset financing protocol Centrifuge to allow the trade finance provider ConsolFreight to mint DAI that was used to finance the transaction.
A nonfungible token (NFT) that contained the shipment and invoice data was also minted in the process for tracking purposes and to help keep a record of the transaction. The shipment is also being tracked using Provenance, Mastercard’s blockchain traceability solution.
This transaction helped to demonstrate one application of smart contracts and stablecoins in the supply chain industry.
Another factor building momentum for MakerDAO is the addition of support for staked Ether as a form of collateral on the protocol.
sETH2 allows those participating in staking on the Ethereum BNB Chain to gain access to funds that would be otherwise locked up for an unknown amount of time and put them to use earning a yield in DeFi.
The collapse of UST, its knock-on effects and the addition of Ether as collateral positions MakerDAO as the top-ranked DeFi protocol by total value locked (TVL), according to data from Defi Llama.
MakerDAO claiming the top spot comes after Curve, another popular stablecoin liquidity protocol, saw its TVL fall from $19.32 billion on May 5 to $8.71 billion on May 16.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
About Google Data Analytics Professional Certification | Includes my opinion
‘Selling Sunset’ Star Christine Quinn And Tech Entrepreneur Husband Have Plans To Disrupt The Real Estate Industry
Everything You Need to Know About the Solana Blockchain and NFTs
Location, celebrity partners unveiled for $150M sports destination coming to Miami-Dade
NYC Amazon Workers Vote Against Unionizing; Warren Buffett Reveals Big Investments | NTD Business
22 Rising NFT Artists to Watch in 2022
Apple marks Black History Month with a ‘Black Unity’ Watch strap
Business News | Stock and Share Market News | Finance News