Terra (LUNA) has been moving sideways during the past day but record impressive gains in the weekly chart with a 30.1% profit, at the time of writing. On the 1-year chart, the token has 8,794% in profits. The project has seen several partnerships. However, its core strength seems to be its tokenomics.
Researcher and investor Flood Capital have compared Terra’s stablecoin UST with Tether, USD Coin, DAI, to explained LUNA’s tokenomics. According to Flood Capital, part of the token’s supply must be burned with every UST minted on Terra’s ecosystem.
Tokens with burn mechanisms and deflationary pressure have seen tremendous appreciation during this cycle. Binance native token BNB and PancakeSwap’s CAKE amongst them. As the researcher said, $1 of UST minted equals $1 of LUNA burned.
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With a market cap estimated at $1.87 billion, UST is in the top 5 stablecoins behind DAI, Binance USD, and USDC with Tether in the highest positions. Flood Capital expects UST to increase in adoption and demand. Therefore, the token’s supply will be reduced. The researcher said:
UST is currently the 5th largest stable coin with a mcap over $1.87b and ~$100m daily trading volume, it has done this with only 7 exchange listings. The Luna ecosystem has generated massive demand for UST with no major listings, this indicates clear product market fit.
UST Demand Leads To LUNA’s Appreciation
Further data from Flood Capital indicates demand for UST has skyrocketed from January 25th to April 25th. During this period, UST’s supply has gone from less than $500 million to the current levels. On average, the stablecoin has grown by $18 million per day. Flood Capital added:
Thus $18m worth of Luna being burned. I expect this to accelerate with more protocol releases and cross chain composability with Columbus-5.
The token’s current circulating supply stands at 376 million with 254 million already staked. The researcher concluded there are only 122 million tokens available in the market. On average, the token’s supply is burned at .27% daily. Flood Capital said:
Companies like Apple and Exxon, renowned for their share buyback programs have bought back ~20-25% of their shares over 5-10 years! Luna is doing those same numbers in 100-125 days.
As shown in the chart below, the token could run out of “liquid coins” in around 122 days if UST demand continues to grow.
The researcher expects more projects to be launch on Terra’s ecosystem and possible further listings of UST in major exchanges. According to the co-founder of Terra Do Kwon, UST’s market cap could hit $10 billion by end of 2021. Flood Capital said:
The Luna ecosystem has just really started with only 2 major applications, yet this has caused the creation of over 1.5b UST in the past 3 months. As Luna continues to attract developers, new protocols and UST demand will explode, we are still early.
Decentralized finance (DeFi) has reshaped the face of the cryptocurrency market over the past year, attracting the attention of both institutional investors and retail traders alike as the traditional financial sector continues to warm up to blockchain technology.
While the majority of largest DeFi protocols that have a significant amount of volume and value locked in the platform operate on the Ethereum (ETH) network, high fees and slower transaction times have allowed projects like Serum (SRM), a decentralized exchange (DEX) that operates on the Solana (SOL) blockchain, to rise in popularity and gain market share.
Data from Cointelegraph Markets and TradingView shows that the price of SRM has rocketed 127% higher over the past two days from a low of $5 on April 24 to a new all-time high at $11.47 on April 26 thanks to a record $1.621 billion in 24-hour trading volume.
Solana network gains traction
A major factor in the growth of Serum is the rising prominence of the Solana blockchain, which has also seen its price surge to a new record high on April 26 as new users and projects continue to explore what the network has to offer.
The recent surge in the price of SRM is in part due to the growing number of front-end user interfaces like Bonfida (FIDA) and Raydium (RAY) that offer access to Serum’s trading books. This helped to boost the overall activity on the DEX and has lifted its token value in the eyes of investors.
Bonfida and Raydium have been so successful that they actually led to the depreciation of the original swap UI developed by the Serum team and are quickly becoming the interfaces of choice for the Solana community, with Bonfida experiencing a surge in unique visitors and API requests over the past 24-hours.
YUGEEE! 65k unique visitors to @Bonfida the most used Serum DEX frontend in the last 24 hours. https://t.co/aOf78QD8Gx
— Serum (@ProjectSerum) April 26, 2021
Serum also offers token holders the ability to stake their tokens to earn a yield from trading fees on the platform, and the token also has a buy and burn mechanism that further helps reduce the circulating supply to help increase token value.
VORTECS™ data from Cointelegraph Markets Pro began to detect a bullish outlook for SRM on April 24, prior to the recent price rise.
The VORTECS™ Score, exclusive to Cointelegraph, is an algorithmic comparison of historic and current market conditions derived from a combination of data points including market sentiment, trading volume, recent price movements and Twitter activity.
As seen in the chart above, the VORTECS™ Score for Serum rapidly rose from a low of 49 on April 23 to a high of 69 on April 24, just two hours before the price began to rally 130% over the next two days.
With decentralized finance still in its infancy and big money players only now dipping their toes into the cryptocurrency sector, networks like Solana and DEXs like Serum look to be the next generation protocols that help bring blockchain technology to the masses and usher in a new wave of growth for the cryptocurrency ecosystem.
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.
15-time Grammy award winner Marshall Bruce Matters III – better known by his stage name Eminem – has officially joined the NFT craze by dropping a collection of his own. The digital set, dubbed Shady Con, comes after a partnership with Nifty Gateway.
Stans Preparing to Buy Shady Con
CryptoPotato speculated with the idea of Eminem getting into the NFT game last week after a mysterious tweet by the legendary hip-hop artist. While the odds seemed somewhat slim, the Real Slim Shady has indeed jumped into the world of non-fungible tokens.
The announcement on the rapper’s website reads that the so-called Shady Con drop came out on Sunday with a “variety of Eminem-approved collectibles.”
Those include “original instrumental beats produced by Slim Shady himself specifically for this release.” The tracks will be available only as part of the “limited edition and one-of-a-kind NFTs.” The unique nature of non-fungible tokens will provide Eminem fans – known as Stans – one opportunity (pun intended) to “own a piece from this premier drop.”
“Born from the convergence of blockchain technology, creative enthusiasm, and pandemic doldrums, this drop was inspired by Eminem’s passion as a vintage toy, comic book, and trading card collector that traces back to his childhood days as just ‘plain old Marshall.’”
NFTs Resonate With Eminem’s Nature
Commenting on the launch of his NFT drop, the Oscar-winning rap icon outlined his affection for storing collections from “comic books to baseball cards to toys” ever since he was a child.
“Not much has changed for me as an adult. I have attempted to re-create some of those collections from that time in my life, and I know I’m not alone. I wanted to give this drop the same vibe of, ‘Oh, man, I gotta get just that one or maybe even the whole set!’ It’s been a lot of fun coming up with ideas from my own collecting passion.”
Nifty Gateway’s Senior Producer, Ashley Ramon, welcomed Eminem to the company’s platform and outlined the massive interest in NFTs from celebrities from various industries.
Featured Image Courtesy of Forbes
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This article is a collaboration byGlassnodeand Bitcoin Magazine to introduce Bitcoiners to the world of on-chain analysis. Our aim is to simplify, demystify and improve access to on-chain data, helping you take the first steps into using these powerful new tools.
Bitcoin is a free market for exponential, digital monetary technology. It has attracted interest from all manner of investors ranging from the individual right through to global institutions. Number go up technology has driven both speculation and investor conviction, as the thesis of digital sound money is tested, challenged, and ultimately proven through price performance and adoption.
Within that context, bitcoin has proven to be a cyclical asset, with extreme price run-ups and lengthy and significant draw-downs. At all stages in these cycles, there are pools of people buying, selling, holding, transacting and mining within the Bitcoin network. To fully understand the psychology and characteristics of these market cycles, there are few data sets more suitable to study than the Bitcoin ledger itself.
In this article, we will explore some select on-chain metrics that provide insight into the sentiment and macro-spending patterns of hodlers, speculators and miners. The objective is to equip readers with the tools needed to appreciate the progress and data patterns as they relate to the current bull market.
In bear markets, interest in Bitcoin the protocol typically wanes, and by the end of it, only Bitcoiners, smart money and miners remain standing. These are the buyers of last resort, and they all have one goal: to accumulate as much bitcoin as possible before everyone else works it out.
For on-chain data, the patterns and fractals we observe during bear markets are largely driven by these low time preference accumulators. The chart below shows supply accumulation by long-term holders and how it consistently peaks during the darkest times.
Bull markets on the other hand, are a very different beast. The dynamics between on-chain supply and demand are in constant flux as new speculators and old hodlers compete for blockspace, profitability and test their resolve to hodl through epic price rises. Old hands typically begin to distribute in bulls, transferring their expensive coins into the hands of new speculators (who return the favor in bears, selling cheap coins at a loss to hodlers).
As investors enter and exit this market, they leave behind on-chain footprints that capture the aggregate hodling conviction and spending patterns. Through study of Bitcoin cycles, we can establish sets of assumptions and fractals to describe the balance between supply and demand. With an appreciation for market cycles, and how different parties typically behave, we can use these patterns to better gauge the progress of bull and bear markets alike.
Bitcoiners and the Smart Money
Bitcoiners and the smart money tend to have a similar modus operandi. Their incentive is to accumulate sats as cheaply as possible and realize profits late in the bull cycle (if at all). As such, their total holdings grow during bear markets as sats are stacked and withdrawn to cold storage.
We can observe this in the HODL waves metric as older age bands (cool colors) increase in thickness, suggesting coins are maturing and are held by strong hands. The thicker these cool bands become, the more supply is owned by long-term holders.
Conversely, as old coins are spent, they are reclassified as young coins (warm colors) with a corresponding increase to young HODL wave thickness. Typically, smart money coins are spent only late in the bull market and when young age bands begin to swell in size, it may indicate a change in macro sentiment is underway. Note, coins older than five to six months are usually considered HODLed coins.
The Spent Output Age Bands provide a view on the age distribution for all coins spent that day. The chart below has been filtered to show only coins older than one year, indicative of hodlers. We can see that these old coins tend to be spent mostly during periods of high volatility, in particular:
In bull markets as old coins are distributed into market strength
In bear markets during capitulation events and bear market rallies
Note also how, in the current bull market, old coin spending has slowed down lately. This suggests that fewer old coins are on the move and that conviction to hold remains strong.
The older a coin is, the more coin days it will have accumulated, and when it is spent, these coin days are “destroyed.”. Coin Days Destroyed (CDD) tracks the total sum of coin days destroyed each day. We can use this metric to observe macro-spending patterns and changes in behavior for long-term holders.
When Bitcoiners are accumulating, few old coins are spent, and CDD tends to be low. During late-stage bull markets, old coins are increasingly spent to realize profits, leading to a spike in CDD. Applying a long-term moving average (e.g., 90DMA) can help to smooth out noise and identify these macro shifts and even approximate market tops and bottoms.
It is well known that bitcoin volatility specializes in shaking out weak hands. The market often rewards long-term holders who exercise patience and punishes more inexperienced market participants and late bull cycle entrants. Long-term holders recognize this and tend to wait for peak market hype before realizing profits on expensive coins.
This creates a cyclical transfer of bitcoin wealth.
As hodlers distribute coins into new hands, the supply of young coins will swell in volume. The Realized Cap HODL waves are an ideal tool for tracking this wealth transfer via the expansion of young coin supply. We can see in the chart below, during the late stages of the 2013 and 2017 bull markets, the height of young coin bands (warm colors) spiked in three distinct instances. These peaks generally corresponded with the major rallies and corrections.
In the current bull market, we have seen the first major spike in young coin supply. What is interesting is the warmest colors (youngest coins) have not spiked as high this cycle. This likely reflects two phenomena:
Increased conviction of coin holders (including new institutional buyers) as the Bitcoin thesis is tested and proved on the macro stage.
Greater access for speculation via off-chain derivatives leading to young coins having a smaller on-chain footprint.
With this wealth transfer in mind, we can observe the proportion of old coin supply (1y–2y, blue) and compare it to the young coin supply (1w–1m, orange).
At the end of bear markets (green zones): 1y–2y coin supply is at a maximum and 1w–1m coin supply is at a minimum. This is the hodler accumulation we discussed earlier.
At the end of bull markets (red zones): 1w–1m coin supply is relatively high (as more new speculators enter), while 1y–2y supply has declined significantly due to old coins selling into market strength.
Using this observation, we can construct the Realized HODL ratio metric (RHODL) which takes the ratio between the 1y–2y and 1w R.HODL waves, and creates a cyclical oscillator that closely tracks the macro market.
This metric describes the cyclical nature of wealth transfer events.
Bull market tops occur where old hands have transferred a large portion of their wealth to new hands, increasing liquid supply (max new holders, high RHODL).
Bear market bottoms occur where old hands have accumulated a large portion of coins from new hands, decreasing liquid supply (max strong hands, low RHODL).
Finally, we take a look at proof-of-work miners. Miners are some of the biggest bulls in the space, having sunk large amounts of capital into ASIC hardware, logistical setups and power consumption. Their compulsory selling of coins necessitates distribution to cover costs, which are typically denominated in fiat currencies.
As such, observing miner incomes and hodled balances is often useful to establish a gauge for their sentiment and conviction. The chart below shows the balance of miner coins since 2016 and we can see three typical phases:
Distribution and declining balances in late bull markets as miners take profits into market strength.
Reduced distribution in a bear market as miners cut costs, switch off ASICs or capitulate, leaving room for stronger miners to gain a larger share of the hash power.
Accumulation with increasing balances in early bull markets as miners return to profitability, prices trend higher and broader market excitement around the halving kicks in.
Lastly, we can analyze the income side of the miner equation, seeking periods of profitability or income stress. Miners generally operate with long-time horizons. Given volatility in coin price, miners will assess income streams using long-term averages to make economic decisions.
The Puell Multiple is a metric that builds off this observation, taking the ratio between current miner income and its 365-day average. This creates an oscillator based on aggregate miner profitability.
High profitability occurs when current income is significantly above the yearly average (high Puell Multiple). In this instance, miners are accumulating coins much cheaper than market price and have an incentive to sell at higher profit margins, releasing additional supply into the market.
Low profitability occurs when current income is significantly below the yearly average (low Puell Multiple). In this instance, miners are operating under relative income stress and must eventually switch off ASIC rigs. This generally leads to capitulation and the formation of bear market bottoms.
The supply and demand balance of the bitcoin market is an extremely dynamic system, despite being cyclical in nature. While the programmatic halving cycles may make it seem “obvious,” it remains difficult to pinpoint which stage of the bull market we are in. On-chain metrics provide tools and insights into macro changes in spending patterns and conviction of hodlers, speculators and miners.
When it comes to bull markets, there is an array of metrics and useful indicators, but a few patterns are important to pay attention to:
HODLers (old coins) distributing their wealth
New speculators (young coins) increasing their positions
Miners reaching peak profitability
All market cycles are unique, but the human response to profit, loss and incentives can be strangely predictable. The trick is knowing what to look for in the data, on-chain.
Disclaimer: This report does not provide any investment advice. All data is provided for information purposes only. No investment decision shall be based on the information provided here and you are solely responsible for your own investment decisions.
This is a guest post by Glassnode. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
Crypto saving app Coinseed’s customers report that their funds were switched to Dogecoin without their permission.
They also say they can’t withdraw funds.
The SEC and the NYAG have pressed charged against Coinseed.
Customers of crypto savings app Coinseed say that the company has converted their deposits to Dogecoin without their consent and won’t process their withdrawals. Powerless and unable to reach the firm, the users of the New York-registered firm can do nothing but watch the crashing Dogecoin market, which tanked by 30% in the past week, wipe away their savings.
“This entire thing has made me pretty sick,” said Ace201613 on r/CoinseedSCAM, a subreddit that angry customers set up to log their fury and to coordinate a response.In a Facebook group of the same name, two customers report losses of over $100,000, and dozens for lesser sums. Incensed, around 50 Facebook users have expressed interest in a class-action lawsuit against Coinseed.A Coinseed spokesman could not be reached for comment.
The angry investors better get in line. In February, the US Securities and Exchange Commission and the New York Attorney Generalpressed charges against the firmfor allegedly defrauding investors into buying a worthless token and lying about the expertise of its executives. The NYAG claimed Coinseed fraudulently took $1 million from investors in a token sale. Coinseed’s social media feeds have gone dark since the filings, and its app is no longer listed on Apple’s or Google’s app stores.
The New York Attorney General started receiving complaints about the allegedly errant conversions to other cryptocurrencies on April 16,legal documentsfiled by Coinseed’s counsel, Morrison Cohen, show.
Coinseed’s lawyers want out of the cases. In a declaration filed last week, Morrison Cohen said that Coinseed’s founders haven’t responded to its communications, delaying “important decisions” about the upcoming cases. Morrison Cohen announced its intention to cut ties with Coinseed on April 21. “It is clear that the attorney-client relationship has broken down irreparably,” wrote Jason Gottlieb, a partner for Morrison Cohen. Gottlieb declined to comment about the case toDecrypt.
Coinseed’s app had allowed customers to invest their spare change in cryptocurrencies. Customers could allocate their money to any of 17 cryptocurrencies or crypto lending protocols, and Coinseed was supposed to handle the investments. “We are looking to build a bridge for the masses to adopt crypto in the most seamless way,” it said in an earlier SEC filing.
It seemed to be a successful model; several customers on the r/CoinseedSCAM site reported tenfold increases to their portfolios. But the balance in their accounts ultimately means nothing if the proceeds can’t be withdrawn.
According to a 2019 annual report filed with the SEC, Coinseed was $92,537 in debt by March of that year.
The firm was founded in 2017 by two Mongolians who studied in New York: CEO Delgerdalai Davaasambu, who wrote the code and holds 80% of the shares in the company, and CFO Sukhbat Lkhagvadorj, who handled the finances and holds the other 20%. In SEC filings, Coinseed said that Lkhagvadorj has worked at “multiple Wall St. firms including a fixed income broker-dealer and an economic consulting firm focusing on analyzing securities.”
However, the NY attorney general said that Lkhagvadorj “had never traded securities or commodities.”
Neither co-founder could be reached byfor comment. Morrison Cohen, the law firm that’s trying to get out of the case, thinks that Davaasambu returned to Ulaanbaatar, Mongolia. The lawyers indicated there was no forwarding address.
Tesla adding Bitcoin to its corporate treasury back in February was considered an inflection point for the cryptocurrency. A major corporation adopting BTC into its balance sheet seemed like a sign that the BTC has gone mainstream.
CEO and “Technoking of Tesla” Elon Musk was apparently convinced by MicroStrategy’s CEO Michael Saylor to follow a similar treasury strategy and incorporate BTC into their balance sheet. However, Tesla’s recent Q1 earnings report shows that the car manufacturer has followed a strategy of its own.
The company announced a $1.5 billion BTC purchase. Their earnings report shows that Tesla sold a portion. At least 9% of its BTC, according to the document, Tesla made a $272 million profit. The company still holds around $2.6 billion in the cryptocurrency. The company revealed the following:
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Year over year, positive impacts from volume growth, regulatory credit revenue growth, gross margin improvement driven by further product cost reductions and sale of Bitcoin ($101M positive impact, net of related impairments, in Restructuring & Other line), were mainly offset by a lower ASP, increased SBC, additional supply chain costs, R&D investments and other items.
Bitcoin’s Performance Takes A Hit After Tesla’s Disclosure
After showing signs of recovery during the past day. Bitcoin seems to be reacting negatively to Tesla’s report. When the company announced its BTC purchase, the cryptocurrency went from the high range at $38,000 to $53,000.
As trader Luke Martin reported, on February 8th, when Tesla’s purchase was made public, Bitcoin has its “largest candle in history”. The cryptocurrency went from a low at $38,058 to a high at $46,929 with an $8,871 increase in less than 24-hours. Martin said the following in the report:
Bitcoin price is still higher than where Elon got in. It doesn’t really matter if he sells 10% of his stack. There will be corporate whales like Saylor that hold forever and whales like Elon that sell on a double. It’s still bullish that this new type of buyer is here at all.
Other members of the crypto community believe Tesla is “trading” Bitcoin and could create selling pressure on the market. Lawyer Collins Belton said Tesla must still follow a corporate treasury management plan.
According to the expert, the company could have commitments and must still stick to an investment policy. Therefore, Tesla’s finance department must still achieve “certain targets” which take BTC’s volatility into account. Belton added:
They could be losing hope, but I’m pretty skeptical that they’d have gone through that much legal diligence to immediately flip a few months later.
BTC is trading at $53.396 with a 12.5% profit in the daily chart. In the weekly and monthly chart, BTC shows a 3% and 5% loss, respectively. The market cap stands at $998 billion.
A pseudonymous on-chain analyst and market cyclist is exposing the behavior of old and new whales amid the continued Bitcoin correction.
In the new tweetstorm, the analyst known as Dilution-proof highlights a certain group of whales who he believes is responsible for igniting the big Bitcoin sell-off from its all-time high of about $64,000.
“The market turnaround started last Sunday (April 18th), when price broke through $60,000 with increased volume. As can be seen in this whale outflows chart, a lot of Bitcoin moved that day that was bought by whales on August 3rd, 2020 for ~$11,000.”
According to Dilution-proof, whales who bought BTC around $10,000-$11,000 last year saw the move above $60,000 as a chance to take profits and lock in gains of about 445%.
As Bitcoin’s upward momentum lost steam, the on-chain analyst says that whales who bought BTC when it broke out of $20,000 in December 2020 took the chance to take profits.
“On Thursday (April 22nd), price also broke down the ~$1 trillion market cap price. On that day, a lot of whale-owned Bitcoin that were bought on December 22nd, 2020, for ~$23,800 moved. Looks again like >100% profit-taking. This time by a slightly newer market participant.”
As the corrective move intensified, pushing Bitcoin below $50,000, Dilution-proof says that a new breed of whales succumbed to BTC’s downward spiral.
“The Bitcoin price also broke through $50,000 in what felt like a mini-capitulation event. Zooming in on whale movements again, this time there was a lot less action – only some by one-month-old whales that bought around $60,000 and apparently accepted a ~20% loss.”
Dilution-proof adds that the Spent Output Profit Ratio (SOPR), which calculates the net profit or loss of market participants, is at a level where Bitcoin may start carving out a bottom.
“This dip started with older whales taking profit, creating a cascading effect of profit-taking all the way to capitulation by newbie whales. The good news: the Spent Output Profit Ratio (SOPR) has completely reset, which means that profit-taking is now neutral (which is bullish).”
Dilution-proof also highlights that new whales have entered the BTC market in the last few months, creating a new base of buyers where Bitcoin could stage the next phase of its bull rally.
“The price action over the past week has created new clusters of large whale addresses with a fresh new realized price and profit status that may be the whale HODL’ers of the next leg up – and/or beyond.”
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Cryptocurrency investors breathed a sigh of relief on April 26 as the sharp reversal in the price of Bitcoin (BTC) was accompanied by a market-wide recovery that has a majority of altcoins seeing green. It’s likely that the breakout was aided by bullish assessments from JPMorgan analysts and PayPal’s announcement that demand for purchasing cryptocurrencies had surpassed expectations.
Data from Cointelegraph Markets and TradingView shows that after bouncing off a low near $47,000 on Sunday evening, Bitcoin roared back above the $50,000 support level in the early trading hours on Monday and climbed above $53,500 by mid-day while Ether (ETH) reclaimed $2,500.
Last week’s market pullback did little to slow the mainstream adoption of cryptocurrencies as stories like NFL draft prospect Trevor Lawrence signing an endorsement deal with crypto portfolio-tracking platform Blockfolio and hotels in Nigeria announcing plans to accept Bitcoin as payment emerge on a daily basis.
Data from Glassnode shows that on-chain transfer volume and the average transaction fees for the Bitcoin network hit new all-time highs in the previous week as the network continues to recover from mempool congestion due to the drop in hashrate that occurred as the result of a power outage in China.
Analysis of the Spent Output age bands, which detail how long BTC has been sitting in a wallet, indicates that newer token holders were shaken out by the recent dip while wallets that have been holding longer than 1 month saw a decline in transaction activity.
The data also shows that wallets that have been holding for longer than 6 months have not seen a notable increase in spending since the market pullback in February.
Further bullishness can be found when looking at miner accumulation which, according to Glassnode, is at its highest level since mid-2018.
Overall, analysis shows that it was the newer hands in the market that were shaken out by last week’s correction, while the more experienced crypto traders were happy to accumulate BTC from those worried about a further price drop.
Altcoins rise as Bitcoin finds its footing
Bitcoin’s struggles over the past week have allowed altcoins to step forward and gain market share with a number of coins breaking out to new all-time highs and trading volume on decentralized exchanges on the uptrend.
The Ethereum-based DeFi lending platform Compound (COMP) spiked 17% overnight to reach a new record high at $671 while the layer-2 solution Polygon (MATIC) surged 68% to a new all-time high at $0.576.
The Solana-based decentralized exchange Serum (SRM) saw its native token price break out to a new high at $11.47 thanks to increased activity on the Solana (SOL) blockchain network.
Solana price gained over 120% in the past week and reached a new high of $48.46 on April 25 as its ecosystem continues to expand and new projects launch on this layer-1 Ethereum competitor.
The overall cryptocurrency market cap now stands at $2.004 trillion and Bitcoin’s dominance rate is 50.3%.
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.
Despite the popularity of liquidity mining, Aave has never implemented a liquidity mining program.
Thanks to a user proposal, it’s begun a three-month program starting today.
In the “DeFi Summer” of 2020, Compound brought the heat by pulling out an old concept, liquidity mining. Its willingness to reward lenders and borrowers in its COMP governance tokens helped make it thebiggest lenderin all of Ethereum.
Now, in an effort to keep pace, decentralized finance (DeFi) competitor Aave is trying out its own liquidity mining program. Starting today, the platform will pay its users in Staked Aave (stkAAVE) when they lend or borrow Ethereum, Wrapped Bitcoin, or stablecoins DAI, GUSD, USDC, and USDT. And we’re not talking about a few extra pennies.
Decentralized finance is the blanket title given to blockchain-based protocols that remove financial intermediaries, making lending and borrowing possible without loan officers or credit checks.
Liquidity mining, also known as “yield farming,” involves pooling your cryptocurrency into a fund so it can be lent out to others—not much different from a savings account or certificate of deposit (the latter of which pays more in exchange for an inability to move it). In exchange for providing the exchange or protocol with liquidity, it rewards you with another type of token.
Aave users already earn staking rewards for staking (ie, locking up) Aave’s native token as well as interest on their deposits. This program allows them to earn additional rewards in stkAAVE. Staked Aave is equivalent in value to AAVE, which is currentlypricednear $400, according to Nomics. Toconvertit to the AAVE governance token, they must wait 10 days after receiving it.
In case you’ve ever wondered what comes out of DeFi governance, which places theusers in chargeof guiding the protocol, this was one of those things. Aave Improvement Proposal (AIP) 16, put forth by venture capitalist and AAVE user Anjan Vinod, called for liquidity mining as a way to attract capital and ensure borrowers can get the loans they need. Moreover, he argued, it would get people to switch to Aave’s version 2, introduced in December 2020. Much of the protocol’s capital is still locked up in v1, the proposal suggested, because of high gas fees on the Ethereum blockchain, which the protocol is built on top of; users didn’t have enough reasons to move the funds.
“By introducing liquidity mining rewards only on Aave v2, liquidity providers and borrowers will naturally migrate toward the more optimized version,” wrote Vinod.
That’s because the rewards on v2 are supercharged. Right now, AAVE v2 is advertising lenders a variable interest rate of 18% on Tether stablecoin, while borrowers get up to 36%. In v1, those rates are 1% and 7%, respectively.
As for the nitty gritty, liquidity mining rewards are split equally between lenders and borrowers; for ETH and WBTC, the lenders take 95%. The platform will distribute 2,200 stkAAVE (worth around $1 million) each day proportionally to the six liquidity markets based on their size. The program will run until July 15, at which point Aave users can vote to renew, discontinue, or amend it.
Aave is playing catch up. Uniswap experimented with liquidity mining in October and November of last year. Compound, meanwhile, has been running its program since June. According to a Messari report, Compound had more than $5 billion in outstanding loans by the end of the first quarter of 2021, compared to between $1.5 and $2 billion for Aave.
For this episode of Bitcoin Magazine’s “Meet The Taco Plebs,” I was joined by Hodlberry (@hodlberry), a faithful, honest and hardworking pleb.
This conversation started off with Hodlberry sharing his Bitcoin rabbit hole story. He went into detail on some fun things he was doing at the time he found Bitcoin, like hosting a gun-related podcast. Then he shared how when he first got into the space he bought some shitcoins, but ended his shitcoin phase early as he already understood Austrian economics. From my own personal experience and seeing others as well, having/learning Austrian economic teachings is crucial to getting a firm understanding of Bitcoin. Because of this understanding of Austrian economics, he was already into gold and silver, but dropped those for more bitcoin eventually.
Before Bitcoin, Hodlberry was living above his means and not saving a lot of money. Now with Bitcoin, he has adopted a lower time preference which is causing him to live below his means, and save more in bitcoin. He shared his thoughts on the book “Human Action” by Ludwig von Mises and why it’s so important. This is a book I’ve yet to read, but I have read similar books, such as “The Theory of Money And Credit” by Ludwig von Mises and the lessons you learn in these books are life changing.
We also got into topics like home schooling children, how Bitcoin solved the problem of triple entry accounting, what Hodlberry wants to see moving forward with the Lightning Network and more.
Below are some of Hodlberry’s most interesting thoughts shared during the interview. And be sure to check out the full episode for more.
How Did You Find Bitcoin And Fall Down The Rabbit Hole?
I don’t remember how I heard about Bitcoin, but I started with alts in February of 2017 with Ethereum. I was doing what a lot of people are doing today with the alt casinos. It was a crazy time, you made money on everything and anything you bought. It just went up and up. During early 2017, I started to learn more about maximalism from guys like Saife, Pierre, Bitstein, Marty and Stephan Livera. I watched lectures on how bitcoin actually worked and was hooked. I consumed a lot of content and was orange pilled pretty early in my journey.
How Has Bitcoin Changed Your Life?
I’ve saved more money than I ever have in my life. I have confidence that building things for the future won’t be a waste of time because they are no longer on the sandy foundation of fiat. The low time preference aspect of Bitcoin touches so many areas of life. In short, it’s made me an adult.
What Is The Most Amazing Thing About Bitcoin To You?
Bitcoin is like a beautiful diamond with many wondrous facets. You look at it one way, and it shines like a beautiful piece of computer science engineering. You look at it another way, and it’s a perfectly designed game theory machine that keeps everyone in consensus. I personally love the sound money aspect, because it allows humans to create civilization on solid footing.
What Are You Most Looking Forward To In The Bitcoin Space?
I’d like to see the circular economy grow a little more. I love HODLing, but when we can spend in bitcoin only for most transactions, that will be an exciting day. I want to cash in my last dollar, forever.
What Is Your Price Prediction For The End Of 2021 And The End Of 2030?
I’m predicting $150,000 to $250,000 by the end of the year and $10,000,000 by the end of the decade. I think that’s a reasonable expectation for the most sound money ever created.