Tag: Project Spotlight

NFT Project Spotlight: Alethea AI, the Intelligent Train-to-Earn NFT Hub

by Cryptobriefing

Key Takeaways

  • Alethea AI has created the world’s first intelligent NFTs.

  • The project uses AI to bring NFT avatars to life.

  • Owners can train their NFTs to earn rewards and participate in Alethea’s pioneering “train-to-earn” economy.


Share this article


Alethea AI is pioneering intelligent NFTs. Crypto Briefing sat down with the project’s CEO Arif Khan to learn about the technology behind intelligent NFTs, their use cases, and how owners can receive rewards in Alethea’s future train-to-earn economy. 

What Are Intelligent NFTs?

NFTs are everywhere these days, but less is said about intelligent NFTs. Alethea AI is one project that’s dedicated to helping the technology grow.

Intelligent NFTs—or iNFTs—are non-fungible tokens with individual AI engines that owners can train through real-time interactive conversations. Owners can create an iNFT by fusing one of Alethea’s Personality Pods with an Ethereum-based NFT avatar. This allows owners to bring their avatars to life. Currently, iNFTs can be created using avatars from 10 different projects, including Bored Ape Yacht Club, Pudgy Penguins, and FLUF World. 

iNFTs can perform simple functions like reciting prose or answering questions, all the way up to higher-order tasks such as creating poetry or engaging in debates. The tasks an iNFT can perform depend on its level, which can be increased by locking up Alethea’s ALI token in the iNFT. 

By training and leveling up an iNFT, owners can earn ALI token rewards for providing data to Alethea AI’s shared intelligence engine. Alethea is aiming to use this collective consciousness to build out a Metaverse populated by intelligent, individual, interactive characters that earn rewards for their owners by training and interacting with other iNFTs. 

The Tech Behind iNFTs

Alethea’s artificial intelligence is based on OpenAI’s GPT-3 language model. This language learning model allows developers to feed information into an AI engine, influencing and affecting how the AI behaves and responds to questions. When Alethea AI started in late 2019, it was one of the first companies to gain access to the GPT-3, which the company used to create Alice, its first intelligent NFT.  

Alice was partly modeled on the work of Lewis Caroll by feeding his literary works into Alice’s AI engine. However, Alethea also introduced Satoshi Nakamoto’s Bitcoin whitepaper to showcase the ability of the GPT-3 to create a dynamic personality from multiple inputs. When Alethea AI’s CEO Arif Khan sat down with Crypto Briefing to discuss the project, he spoke about how Alice’s personality changed after digesting the Bitcoin whitepaper, explaining: 

“Once, for example, we asked her, ‘where is she based right now?’ The normal answer from Alice only would be ‘I’m in a rabbit hole,’ but [because of the influence from the Bitcoin whitepaper] she answered, ‘I’m in a decentralized crypto rabbit hole.’”

Developing Alice was a landmark moment for Alethea and acted as a proof of concept for the company’s iNFT model. In June 2021, Alice sold for $478,800 at a Sotheby’s auction. 

Alice, the first intelligent NFT (Source: Sotheby’s)

However, using GPT-3 came with some setbacks. Alethea needed to get explicit permission from OpenAI every time it wanted to create an AI, which made it difficult to scale iNFTs and offer them to the public. Building from the GPT-3 software, Alethea developed its own AI engine catered toward character creation. With Alethea’s bespoke AI software, each iNFT is now composed of five different AI engines that govern how the iNFT talks, lip syncs, blinks, moves its shoulders, and responds in real-time. 



The first use for Alethea’s new AI engine was creating Revenants, the company’s first iNFT collection. Revenants is a collection of 100 pre-trained iNFTs representing cultural icons from human history. Notable Revenants include famous scientists and mathematicians such as Nikola Tesla and Ada Lovelace, as well as fictional characters like Frankenstein’s monster and Dracula. 

The Revenants collection was sold at auction through OpenSea in October 2021, raising 2,400 ETH worth around $10 million, breaking previous records for an OpenSea NFT collection drop. The Revenant NFTs command a high value in part because of their significance as some of the first iNFTs, but also because owners can use them to earn rewards for training Alethea’s AI engines. Khan gave one example of how Revenants are helping develop Alethea’s audio speech recognition for non-standard accents, stating:

“Our Revenants, when you talk with them, you can train the AI engine, and they will basically be what we call dedicated listeners. And every time they listen, they help transcribing occur, and the owners of those NFTs get rewarded for providing that service to the network.”

The ability to earn rewards in what Khan calls the “train-to-earn” model will not be limited just to Revenant owners. Following the success of Revenants, Alethea released its second collection, iNFT Personality Pods, which owners can fuse with NFT avatars, level up, and eventually participate in Alethea’s shared intelligence training to earn rewards. 

The Train-to-Earn Revolution

Building from the play-to-earn phenomenon established last summer by blockchain games like Axie Infinity, Alethea is developing its own token economy centered around the idea of train-to-earn. With train-to-earn, owners of iNFTs can train them once, then set them to work interacting with other iNFTs and users to passively earn ALI token rewards for contributing data to Alethea’s shared intelligence AI engine. 

Khan believes that Alethea’s train-to-earn model will prove to be a more scalable version of the current play-to-earn paradigm. He explained: 

“The users in play-to-earn are human, so you require human labor and time, and there are challenges around scale, speed, and efficiency for growing there. In train-to-earn, the users are actually AI agents that have been trained once and can go out and earn for you ad infinitum. They can provide rewards to their owners for specific tasks as long as it’s value-additive to the ecosystem.”

Khan also said that there would also be human participants in a train-to-earn economy, but that they will likely be the AI agent guild owners. According to him, these guilds will likely function similarly to how play-to-earn guilds such as Yield Guild Games and Merit Circle do for games like Axie Infinity. 

Alethea’s train-to-earn system hinges on the ALI token, a combined reward, governance, and utility token that will form the backbone of the economy. ALI has a fixed supply of 10 billion and is paid out to iNFT holders who provide data and participate in various initiatives to build Alethea’s shared intelligence engine. This creates an incentive to build Alethea’s AL engines, but in order to form a working economic structure, there also needs to be demand for the rewards that are distributed.

This is where token locking comes into play. For iNFTs to be able to participate in compute-intensive tasks that earn ALI tokens, owners must level up their Personality Pods by locking up ALI tokens. The more tokens an owner locks, the more complex tasks an iNFT can perform. Currently, Alethea has designated the abilities for levels one through five, with a future DAO deciding the abilities for levels six through ten.


The tasks each Personality Pod level can perform (Source: Alethea AI)

The amounts of ALI tokens needed to level up Personality Pods have also been set, tying together the price of the personality pods and the ALI token. This should help strengthen Alethea’s train-to-earn economy by allowing enterprising users to actively arbitrage the difference between leveled-up Personality Pods and the price of lower-level Pods plus the amount of token needed to upgrade them. 

The cost to upgrade Personality Pods at each level (Source: Alethea AI Discord)

The rewards for helping train Alethea’s AI engines are currently accumulated on an off-chain “Ali credits” system. However, the end goal is for Ali Credits to be converted to on-chain ALI tokens once Alethea has incorporated a more efficient way to distribute them. Khan explained that being able to reward contributors directly is a top priority and that Alethea is currently in talks with Polygon to find a lower-cost scaling solution than Ethereum, stating: 

“We want to reward people immediately for quality data submitted, and [to have] claiming the rewards not be more costly than getting the rewards themselves. That’s possible on Polygon, but not yet on Ethereum.”

Future Plans

Aside from kick-starting a train-to-earn economy, Alethea has other longer-term goals for its intelligent NFTs. Khan views iNFTs as building blocks that can be deployed in various use cases, potentially leading to the creation of an entire Metaverse populated by individually trained intelligent NFTs.

In this new world, iNFTs could become personal assistants akin to Apple’s Siri or Google’s Alexa, or even take on the role of Discord bots, as Alethea has done in its own Discord to greet newcomers. Another practical use case Khan highlighted is for iNFTs to help introduce and educate people who aren’t familiar with AI about the subject. 

According to Khan, one of Alethea’s biggest successes is that it lets anyone become an AI developer without knowing the technical details. “We have one community member who is a high-school teacher, and he’s bought pods to teach his students about AI,” Khan says. “Once you make AI accessible and democratize access to it, so much more is possible.”

Currently, iNFT development is in the hands of the Alethea AI community, and individual owners can train their iNFTs and create use cases for them. The next phase, Khan states, is forming partnerships with large intellectual property owners to help showcase the potential of iNFT technology. He explained: 

“If there was a new Netflix series that wants to create interactive intelligent NFTs, or if Marvel wants to create Spiderman, and wanted Spiderman to be in every home as an iNFT, you could talk to Peter Parker as if it was Siri or Alexa.”

Alethea has made good progress toward building out the presence of its iNFTs. The company recently launched a $1 billion Metaverse growth fund that received an investment from Binance Smart Chain and has also partnered with Yield Guild Games. 

However, the most important factor for Alethea’s growth will be raising awareness of its unique technology. As more money rushes into the NFT space, it will be increasingly difficult for innovative projects to stand out from all the noise. Time will tell whether Alethea’s planned train-to-earn revolution will make the same kind of impact as play-to-earn did before it. 

Disclosure: At the time of writing this feature, the author owned ETH and several other cryptocurrencies. 

Share this article


The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.

You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.

See full terms and conditions.



NFT Project Spotlight: Deathbats, Avenged Sevenfold’s NFT Fan Club

Avenged Sevenfold is entering the NFT space with a collection of 10,000 Deathbats. Holders will gain access to exclusive perks and unique experiences to connect with the band at shows…

NFT Project Spotlight: Quantum, the NFT Photography Launchpad 

Quantum is showcasing top talent from the art photography world through NFTs on Ethereum. While the platform is still in its infancy, demand for Quantum-curated collections is growing fast.  What…

NFT Project Spotlight: ThorGuards, the Avatars With Utility in THORCha…

ThorGuards is a collection of 9,999 NFT characters with art inspired by the THORChain ecosystem, Norse mythology, and Cyberpunk aesthetics. Learn about how the art and utility of ThorGuards set…

A Guide to Yield Farming, Staking, and Liquidity Mining

Yield farming is arguably the most popular way to earn a return on crypto assets. Essentially, you can earn passive income by depositing crypto into a liquidity pool. You can think of these liquidity…


Source

Tagged : / / / / / / /

DeFi Project Spotlight: Dopex, the Options Exchange Built for Simplicity

by Cryptobriefing

Key Takeaways

  • Dopex is a decentralized options exchange that uses option pools to let anyone buy or sell options in a capital efficient and simplified manner.

  • Its flagship product is Single Staking Option Vaults, which provide deep liquidity for option buyers and automated, passive income for option sellers.

  • Dopex’s options contracts are ERC-20 tokens, meaning they’re liquid, transferable, and composable.




Share this article


Dopex, which stands for “decentralized options exchange,” is a DeFi protocol that seeks to maximize liquidity and maximize returns for option buyers and sellers. 

A Quick Primer on Options

Dopex is a decentralized options exchange that uses option pools to let anyone buy or sell options contracts and passively earn yield. 

It offers advantages to both options buyers and sellers and the wider DeFi ecosystem by delivering a permissionless and composable options product that can be used in conjunction with other protocols. It ensures fair, optimized, and competitive option pricing and a simplified trading experience.

To understand the value proposition of Dopex, it’s worth explaining how options contracts work. Options are derivative financial instruments that let investors speculate or hedge against the volatility of an underlying asset like a stock, cryptocurrency, or another derivative or synthetic instrument representing, for instance, the volatility of interest rates.

There are two types of options contracts: call options and put options. Call options give buyers the right but not the obligation to buy the underlying asset at a specified price called a strike price, before or at a specific expiry date. Conversely, put options give contract holders the right but not the obligation to sell the underlying asset at the strike price before or at an expiry date. 

With call options, the buyers are betting on the underlying asset’s price increasing, while the sellers are betting on the price decreasing. Put options, on the other hand, are the opposite: the buyers are betting on the asset’s price decreasing, while the sellers are betting on the price increasing.  

Options also have a price or a premium that buyers pay upfront for the rights granted by the contract. For buyers, options contracts offer an opportunity to short assets, take on leverage, or hedge bets, while sellers can take the other side of those trades and simultaneously earn passive income by collecting premiums.

To make the concept more tangible, assume an investor would be happy to sell their Ethereum at $5,000, but the price is holding around $3,000. They believe that Ethereum will eventually reach the $5,000 mark but don’t know exactly when. They could use options to sell a covered call contract, giving someone else the right to purchase the Ethereum at $5,000. This would mean they forego any upside past the strike price in exchange for the premium they earn from selling the option. They could choose a contract that expires in March 2022 if they do not believe that Ethereum has the capacity to hit the $5,000 strike price before the expiry. 

Now, if the options seller is right in their forecast and Ethereum hits $4,000 but does not break the $5,000 strike price before the March expiry, they would get to keep their coins plus a premium. On the other hand, if they’re wrong and Ethereum surpasses $6,000, for example, they would still have to sell at $5,000, meaning they would make some money on the premium but incur an opportunity cost of $1,000. 

The user interfaces for Deribit (left) and Dopex (right)

While options may sound rather straightforward in theory, they are complex financial instruments that few retail market participants understand or know how to trade profitably. 



that unsophisticated investors can hardly understand, let alone trade profitably. This is where Dopex comes in. Dopex abstracts all the nuances and intricacies that come with option writing and purchasing by optimizing for simplicity and efficiency.

Crypto Briefing caught up with a Dopex core team member who operates under the pseudonym Halko, and they explained that the project is hoping to make options more accessible to all DeFi users. “The idea is not to build another protocol for experienced options traders,” they said. “For that, people can just go and trade on Deribit or FTX. We wanted to build a product anyone can use, and we’re building based on the needs and wants of the community.”

Dopex Under The Hood

Dopex is building a decentralized and permissionless options exchange that aims to offer maximum liquidity, fair option pricing, high capital efficiency for sellers, cheaper options for buyers, and incentives for all protocol participants.

It runs on Arbitrum, a Layer 2 scaling solution that leverages Optimistic Rollup technology to process transactions faster and at a lower cost than Ethereum mainnet. “We launched on Layer 2 simply because Ethereum trading fees are too expensive. It’s really important for options trading to keep the costs really low to ensure profitability,” Halko said. “Arbitrum was the fastest [Layer 2 solution] to open its testnet to developers; to build on Optimism, you must be whitelisted.”

According to Halko, there was a potential risk to launching on other Layer 1 chains such as Solana, Avalanche, and NEAR, because they don’t have “Lindy.” The “Lindy Effect” argues that the life expectancy of technology or ideas is proportional to their current age. In other words, as Ethereum has been around for longer than most other blockchains, it may be more likely to survive. “We don’t know where [other Layer 1 blockchains] will be two to three years from now, while with rollups, we’re is still on Ethereum, so it’s also a security element,” they said.

One of the advantages of using decentralized or on-chain options protocols over centralized ones is that they offer greater efficiency. Halko explained that Dopex can charge considerably less than centralized exchanges for options products. This is because the products require less maintenance and are easier to scale once they are deployed on-chain. Hence, options on Dopex are typically a few dollars cheaper than on centralized exchanges like Deribit or FTX. Halko says the difference in price is enough to make them more attractive to users without incentivizing arbitrage. 

Dopex currently offers only one product called Single Staking Option Vaults, which represents a simplified way to buy and sell options. Discussing how the product works, Halko said:

“Single Staking Option Vaults allow us to bootstrap an options market very simply. We don’t want to overwhelm people, so we’re keeping it simple by offering only call options with a few strikes. Plus, building new vaults on new products is very easy, allowing us to expand the product line without introducing complexity. The vaults are also farming yield in the background. People love it; it helps us acquire more users and build a large community.”

Single Staking Option Vaults (Source: Dopex)

Dopex’s next core product, Option Pools, will be more complex and suited for more experienced options traders. “When they go live, option pools will very much be like options on FTX or Deribit, but on-chain,” Halko said. The code and frontend for the Option Pools are already finalized, but Dopex wants acquire more users before it launches them. In the meantime, the team is also working on an OTC portal where users will be able to trade options peer-to-peer on the secondary market.

That’s another one of Dopex’s advantages—all of the options contracts are ERC-20 tokens, meaning they’re liquid, transferable, and composable. Anyone building in DeFi on Ethereum can use Dopex’s options and integrate them into their protocols in some shape or form. One such project is Jones DAO, which is building vaults that will let users generate yield with sophisticated, actively managed, hedged options strategies on top of Dopex.


Single Staking Option Vaults Explained

Single Staking Option Vaults are Dopex’s flagship product. Similar to single-sided staking vaults on other protocols, they let users lock up tokens for a specified period and earn a passive yield on their staked assets. 

There are two sides to the product: stakers and option buyers. The stakers deposit and lock liquidity in base assets (ETH, gOHM, DPX, and rDPX) or quote assets (dollar-pegged stablecoins) into a vault at the beginning and for the duration of each monthly epoch. The vault contract then sells call options on the underlying assets to earn premiums and deposit the funds in single staking DeFi pools to generate additional yield. Dopex also incentivizes liquidity providers by paying rewards in DPX—one of its two native tokens. To stakers or option sellers, Single Staking Option Vaults provide boosted yields, capped upside, and partially mitigated downside risk—all on autopilot.

For buyers, Dopex offers a user experience for buying call options that rivals the likes of Robinhood. There are only three steps to take: select options size, select strike price, and purchase. The call options are European, meaning the buyer can exercise them only at the expiry date. If the options are “in the money” at expiry, the buyer profits at the cost of staker. By contrast, if the options are “out of the money” at expiry, the buyer lose what they paid, and the money or the premium stays with the staker or options seller. Single Staking Option Vaults represent a simple and relatively inexpensive way for buyers to permissionlessly purchase call options on a variety of crypto assets.

What’s Next for Dopex?

Dopex roadmap includes plans to expand its product line with Option Pools, add new types of Single Staking Option Vaults, offer options on networks like Binance Smart Chain, Avalanche, and Fantom, build the OTC marketplace, and revamp the tokenomics for its rDPX token.

Besides introducing put option vaults and new vaults for a variety of exotic tokens, perhaps the most interesting development is Dopex’s plan to launch options contracts for betting on the possibility of an Arbitrum token airdrop and interest rate options that would allow users to bet on the direction of the interest rate of a chosen Curve pool. 

Halko says the Arbitrum option contract is just for fun, but offering a way to bet on Curve pools could affect Ethereum’s entire DeFi landscape by empowering participants in the “Curve Wars.” The Curve Wars can be described as a game between DeFi protocols that centers on the largest decentralized exchange for stablecoins, Curve Finance. Protocols are increasingly making efforts to exert influence over Curve to ensure that their preferred pools are offering the highest liquidity incentives. The likes of Convex Finance and Yearn.Finance offer generous staking rewards on CRV tokens as a way of attracting liquidity and increasing their voting power by locking up tokens to convert them into veCRV. 

Using Dopex’s novel interest rate options, protocols like Redacted Cartel and Convex Finance could hedge their treasury portfolios or make directional bets on the interest rate volatility of different Curve pools, then leverage their outsized influence over the protocol to make their bets pay off. By introducing this novel primitive, Dopex will essentially be adding another weapon to the arsenal of participants in the Curve Wars. This could completely change the dynamics and outcome of the Curve Wars. 

Dopex is also in the process of overhauling the tokenomics of the rDPX token. It was initially designed as a rebate token to cover any losses incurred by pool participants. The team has since moved away from this model and will soon publish the new tokenomics. Meanwhile, the use cases for Dopex’s second native token, DPX, will stay the same—it will continue to be a vanilla governance and protocol fee accrual token.

Ultimately, Dopex wants to become the largest options trading platform in crypto. “Deribit is our end game boss,” Halko told Crypto Briefing. Dopex has reached a total value locked of around $500 million within seven months of launching—an impressive feat for a protocol hosted on a nascent ecosystem like Arbitrum. Whether it will manage to surpass established centralized options exchanges like Deribit or FTX remains to be seen. What is certain, however, is that Dopex has a clear product-market fit and an experienced team that continues to deliver.

Disclosure: At the time of writing, the author of this feature owned ETH and several other cryptocurrencies.



Share this article


The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.

You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.

See full terms and conditions.



DeFi Project Spotlight: Abracadabra.Money, DeFi’s Magic Money Sp…

Abracadabra.Money is a lending protocol that allows users to deposit interest-bearing assets as collateral to borrow a stablecoin called Magic Internet Money that can be used across multiple blockchains. Abracadabra.Money…

DeFi Project Spotlight: Tokemak, the Liquidity Black Hole

Tokemak is DeFi’s first Liquidity-as-a-Service product. It is designed to mitigate impermanent loss for liquidity providers and secure deep and sustainable liquidity for DeFi protocols. Tokemak reactors can help projects…

Web3 – What it is, What it Means, and How We’ll Transition

We are at the dawn of a new era of the internet. Bit by bit, this new digital world, and all that it enables, will slowly become a part of…

DeFi Project Spotlight: Orion Money, the Cross-Chain Stablecoin Bank

Orion Money is aiming to become a cross-chain stablecoin bank based on an innovative suite of DeFi products providing seamless and frictionless access to stablecoin saving, lending, and spending. Its…


Source

Tagged : / / / / /

DeFi Project Spotlight: Dopex, the Options Exchange Built for Simplicity

by Cryptobriefing

Key Takeaways

  • Dopex is a decentralized options exchange that uses option pools to let anyone buy or sell options in a capital efficient and simplified manner.

  • Its flagship product is Single Staking Option Vaults, which provide deep liquidity for option buyers and automated, passive income for option sellers.

  • Dopex’s options contracts are ERC-20 tokens, meaning they’re liquid, transferable, and composable.




Share this article


Dopex, which stands for “decentralized options exchange,” is a DeFi protocol that seeks to maximize liquidity and maximize returns for option buyers and sellers. 

A Quick Primer on Options

Dopex is a decentralized options exchange that uses option pools to let anyone buy or sell options contracts and passively earn yield. 

It offers advantages to both options buyers and sellers and the wider DeFi ecosystem by delivering a permissionless and composable options product that can be used in conjunction with other protocols. It ensures fair, optimized, and competitive option pricing and a simplified trading experience.

To understand the value proposition of Dopex, it’s worth explaining how options contracts work. Options are derivative financial instruments that let investors speculate or hedge against the volatility of an underlying asset like a stock, cryptocurrency, or another derivative or synthetic instrument representing, for instance, the volatility of interest rates.

There are two types of options contracts: call options and put options. Call options give buyers the right but not the obligation to buy the underlying asset at a specified price called a strike price, before or at a specific expiry date. Conversely, put options give contract holders the right but not the obligation to sell the underlying asset at the strike price before or at an expiry date. 

With call options, the buyers are betting on the underlying asset’s price increasing, while the sellers are betting on the price decreasing. Put options, on the other hand, are the opposite: the buyers are betting on the asset’s price decreasing, while the sellers are betting on the price increasing.  

Options also have a price or a premium that buyers pay upfront for the rights granted by the contract. For buyers, options contracts offer an opportunity to short assets, take on leverage, or hedge bets, while sellers can take the other side of those trades and simultaneously earn passive income by collecting premiums.

To make the concept more tangible, assume an investor would be happy to sell their Ethereum at $5,000, but the price is holding around $3,000. They believe that Ethereum will eventually reach the $5,000 mark but don’t know exactly when. They could use options to sell a covered call contract, giving someone else the right to purchase the Ethereum at $5,000. This would mean they forego any upside past the strike price in exchange for the premium they earn from selling the option. They could choose a contract that expires in March 2022 if they do not believe that Ethereum has the capacity to hit the $5,000 strike price before the expiry. 

Now, if the options seller is right in their forecast and Ethereum hits $4,000 but does not break the $5,000 strike price before the March expiry, they would get to keep their coins plus a premium. On the other hand, if they’re wrong and Ethereum surpasses $6,000, for example, they would still have to sell at $5,000, meaning they would make some money on the premium but incur an opportunity cost of $1,000. 

The user interfaces for Deribit (left) and Dopex (right)

While options may sound rather straightforward in theory, they are complex financial instruments that few retail market participants understand or know how to trade profitably. 



that unsophisticated investors can hardly understand, let alone trade profitably. This is where Dopex comes in. Dopex abstracts all the nuances and intricacies that come with option writing and purchasing by optimizing for simplicity and efficiency.

Crypto Briefing caught up with a Dopex core team member who operates under the pseudonym Halko, and they explained that the project is hoping to make options more accessible to all DeFi users. “The idea is not to build another protocol for experienced options traders,” they said. “For that, people can just go and trade on Deribit or FTX. We wanted to build a product anyone can use, and we’re building based on the needs and wants of the community.”

Dopex Under The Hood

Dopex is building a decentralized and permissionless options exchange that aims to offer maximum liquidity, fair option pricing, high capital efficiency for sellers, cheaper options for buyers, and incentives for all protocol participants.

It runs on Arbitrum, a Layer 2 scaling solution that leverages Optimistic Rollup technology to process transactions faster and at a lower cost than Ethereum mainnet. “We launched on Layer 2 simply because Ethereum trading fees are too expensive. It’s really important for options trading to keep the costs really low to ensure profitability,” Halko said. “Arbitrum was the fastest [Layer 2 solution] to open its testnet to developers; to build on Optimism, you must be whitelisted.”

According to Halko, there was a potential risk to launching on other Layer 1 chains such as Solana, Avalanche, and NEAR, because they don’t have “Lindy.” The “Lindy Effect” argues that the life expectancy of technology or ideas is proportional to their current age. In other words, as Ethereum has been around for longer than most other blockchains, it may be more likely to survive. “We don’t know where [other Layer 1 blockchains] will be two to three years from now, while with rollups, we’re is still on Ethereum, so it’s also a security element,” they said.

One of the advantages of using decentralized or on-chain options protocols over centralized ones is that they offer greater efficiency. Halko explained that Dopex can charge considerably less than centralized exchanges for options products. This is because the products require less maintenance and are easier to scale once they are deployed on-chain. Hence, options on Dopex are typically a few dollars cheaper than on centralized exchanges like Deribit or FTX. Halko says the difference in price is enough to make them more attractive to users without incentivizing arbitrage. 

Dopex currently offers only one product called Single Staking Option Vaults, which represents a simplified way to buy and sell options. Discussing how the product works, Halko said:

“Single Staking Option Vaults allow us to bootstrap an options market very simply. We don’t want to overwhelm people, so we’re keeping it simple by offering only call options with a few strikes. Plus, building new vaults on new products is very easy, allowing us to expand the product line without introducing complexity. The vaults are also farming yield in the background. People love it; it helps us acquire more users and build a large community.”

Single Staking Option Vaults (Source: Dopex)

Dopex’s next core product, Option Pools, will be more complex and suited for more experienced options traders. “When they go live, option pools will very much be like options on FTX or Deribit, but on-chain,” Halko said. The code and frontend for the Option Pools are already finalized, but Dopex wants acquire more users before it launches them. In the meantime, the team is also working on an OTC portal where users will be able to trade options peer-to-peer on the secondary market.

That’s another one of Dopex’s advantages—all of the options contracts are ERC-20 tokens, meaning they’re liquid, transferable, and composable. Anyone building in DeFi on Ethereum can use Dopex’s options and integrate them into their protocols in some shape or form. One such project is Jones DAO, which is building vaults that will let users generate yield with sophisticated, actively managed, hedged options strategies on top of Dopex.


Single Staking Option Vaults Explained

Single Staking Option Vaults are Dopex’s flagship product. Similar to single-sided staking vaults on other protocols, they let users lock up tokens for a specified period and earn a passive yield on their staked assets. 

There are two sides to the product: stakers and option buyers. The stakers deposit and lock liquidity in base assets (ETH, gOHM, DPX, and rDPX) or quote assets (dollar-pegged stablecoins) into a vault at the beginning and for the duration of each monthly epoch. The vault contract then sells call options on the underlying assets to earn premiums and deposit the funds in single staking DeFi pools to generate additional yield. Dopex also incentivizes liquidity providers by paying rewards in DPX—one of its two native tokens. To stakers or option sellers, Single Staking Option Vaults provide boosted yields, capped upside, and partially mitigated downside risk—all on autopilot.

For buyers, Dopex offers a user experience for buying call options that rivals the likes of Robinhood. There are only three steps to take: select options size, select strike price, and purchase. The call options are European, meaning the buyer can exercise them only at the expiry date. If the options are “in the money” at expiry, the buyer profits at the cost of staker. By contrast, if the options are “out of the money” at expiry, the buyer lose what they paid, and the money or the premium stays with the staker or options seller. Single Staking Option Vaults represent a simple and relatively inexpensive way for buyers to permissionlessly purchase call options on a variety of crypto assets.

What’s Next for Dopex?

Dopex roadmap includes plans to expand its product line with Option Pools, add new types of Single Staking Option Vaults, offer options on networks like Binance Smart Chain, Avalanche, and Fantom, build the OTC marketplace, and revamp the tokenomics for its rDPX token.

Besides introducing put option vaults and new vaults for a variety of exotic tokens, perhaps the most interesting development is Dopex’s plan to launch options contracts for betting on the possibility of an Arbitrum token airdrop and interest rate options that would allow users to bet on the direction of the interest rate of a chosen Curve pool. 

Halko says the Arbitrum option contract is just for fun, but offering a way to bet on Curve pools could affect Ethereum’s entire DeFi landscape by empowering participants in the “Curve Wars.” The Curve Wars can be described as a game between DeFi protocols that centers on the largest decentralized exchange for stablecoins, Curve Finance. Protocols are increasingly making efforts to exert influence over Curve to ensure that their preferred pools are offering the highest liquidity incentives. The likes of Convex Finance and Yearn.Finance offer generous staking rewards on CRV tokens as a way of attracting liquidity and increasing their voting power by locking up tokens to convert them into veCRV. 

Using Dopex’s novel interest rate options, protocols like Redacted Cartel and Convex Finance could hedge their treasury portfolios or make directional bets on the interest rate volatility of different Curve pools, then leverage their outsized influence over the protocol to make their bets pay off. By introducing this novel primitive, Dopex will essentially be adding another weapon to the arsenal of participants in the Curve Wars. This could completely change the dynamics and outcome of the Curve Wars. 

Dopex is also in the process of overhauling the tokenomics of the rDPX token. It was initially designed as a rebate token to cover any losses incurred by pool participants. The team has since moved away from this model and will soon publish the new tokenomics. Meanwhile, the use cases for Dopex’s second native token, DPX, will stay the same—it will continue to be a vanilla governance and protocol fee accrual token.

Ultimately, Dopex wants to become the largest options trading platform in crypto. “Deribit is our end game boss,” Halko told Crypto Briefing. Dopex has reached a total value locked of around $500 million within seven months of launching—an impressive feat for a protocol hosted on a nascent ecosystem like Arbitrum. Whether it will manage to surpass established centralized options exchanges like Deribit or FTX remains to be seen. What is certain, however, is that Dopex has a clear product-market fit and an experienced team that continues to deliver.

Disclosure: At the time of writing, the author of this feature owned ETH and several other cryptocurrencies.



Share this article


The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.

You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.

See full terms and conditions.



DeFi Project Spotlight: Abracadabra.Money, DeFi’s Magic Money Sp…

Abracadabra.Money is a lending protocol that allows users to deposit interest-bearing assets as collateral to borrow a stablecoin called Magic Internet Money that can be used across multiple blockchains. Abracadabra.Money…

DeFi Project Spotlight: Tokemak, the Liquidity Black Hole

Tokemak is DeFi’s first Liquidity-as-a-Service product. It is designed to mitigate impermanent loss for liquidity providers and secure deep and sustainable liquidity for DeFi protocols. Tokemak reactors can help projects…

A Guide to Yield Farming, Staking, and Liquidity Mining

Yield farming is arguably the most popular way to earn a return on crypto assets. Essentially, you can earn passive income by depositing crypto into a liquidity pool. You can think of these liquidity…

DeFi Project Spotlight: Orion Money, the Cross-Chain Stablecoin Bank

Orion Money is aiming to become a cross-chain stablecoin bank based on an innovative suite of DeFi products providing seamless and frictionless access to stablecoin saving, lending, and spending. Its…


Source

Tagged : / / / / /

NFT Project Spotlight: Deathbats, Avenged Sevenfold’s NFT Fan Club

by Cryptobriefing

Key Takeaways

  • Avenged Sevenfold is releasing a collection of 10,000 NFTs called Deathbats.

  • The NFTs will form the basis of a fan club that gives exclusive benefits. The band is also planning to turn the club into a DAO.

  • The band’s frontman says that the NFTs will provide true value to fans, but the challenge will be onboarding new entrants.




Share this article


Avenged Sevenfold is entering the NFT space with a collection of 10,000 Deathbats. Holders will gain access to exclusive perks and unique experiences to connect with the band at shows and in the Metaverse. 

The Deathbats Club

Avenged Sevenfold is the latest band to jump into the Metaverse.

The Huntington Beach rockers are releasing a collection of 10,000 Deathbats NFTs, pioneering the concept of an NFT-based fan club.

While other bands have previously released NFTs, Deathbats are set to be more than just JPEGs on a blockchain. Holding one will grant access to an exclusive community that gives members unique experiences to connect with the band. Those lucky enough to mint one of the rarer Deathbats can look forward to perks such as meet-and-greets at shows, free tickets for life, merch airdrops, and even the chance to spend the day with their favorite band member. 

Crypto Briefing spoke to Avenged Sevenfold frontman Matt “M. Shadows” Sanders about the upcoming collection and his crypto journey from buying Bitcoin to becoming a seasoned NFT collector. 

Buying “Internet Money”

The driving force behind Avenged Sevenfold’s foray into NFTs is the band’s frontman, Matt Sanders. Although Sanders doesn’t have a tech background, he jumped into crypto relatively early, buying his first Bitcoin in 2016. “I’d been hearing about “Internet money”—digital money, and it made sense to me because I was a gamer, and it made sense that eventually, we would have some kind of a digital currency,” he said, adding that he got involved with Ethereum shortly after. 

Through Ethereum, Sanders started learning about all of the possibilities of smart contracts. He was particularly drawn to NFTs. “I saw CryptoPunks, and I was thinking, if this is the first iteration of what the smart contracts are going to be, these are going to be relics of our time,” he explained. He took the plunge and bought his first CryptoPunk NFT for 29 ETH in early 2020. 

From then on, he was hooked. He went on to build an extension collection that included several more CryptoPunks and early generative art NFTs from collections like Fidenza and Ringers. However, the idea of launching an NFT collection for Avenged Sevenfold was not at the forefront of his mind at the time. While NFTs were all the rage with crypto nerds, they were still relatively niche—especially among rock music fans.

However, things were about to change. Sanders said that there was one moment where everything clicked. He explained: 

“The day that I figured out this was the future was when I was at a Lakers game with an investment guy, and he didn’t really understand NFTs, but his kids were there, and they did. They were like, “oh my God, you have CryptoPunks,” and were passing my phone around showing everyone. That’s when I realized this is the culture coming up, they are going to dictate that this is important, and they understand what it is.”

From then on, Sanders got more deeply involved in the NFT space, joining several communities and adding pieces from Bored Ape Yacht Club and Cryptoadz to his collection. Additionally, he led his band’s lead guitarist, Brian “Synyster Gates” Haner, down the NFT rabbit hole, inspiring him to start collecting his own pieces. 



Seeing how projects like the Bored Ape Yacht Club had organically grown a dedicated group of holders, the pair realized the power of NFT communities. That was when they started to think about how the phenomenon could benefit Avenged Sevenfold fans.

Creating Deathbats

Before committing to a larger NFT collection, the band needed to see where their fans stood on the technology (many musicians have faced a backlash from their fans after experimenting with NFTs this year). To do this, Avenged Sevenfold released an early collection of 101 NFT paintings in collaboration with artist Cam Rackam. The art was accompanied by a short clip of the band’s unreleased music. 

“We went out to everybody and said, “hey, if you send us your wallet, we’re gonna send you a free NFT—101 of them,”” Sanders explained. The band received 5,000 wallet addresses in response, which showed that the interest was there, even if the vast majority of addresses hadn’t interacted with NFTs before. 

For the upcoming Deathbats collection, the band wanted to ensure their fans understood what NFTs were and how to get them. To do this, Sanders started to promote NFTs on social media. He created a Discord server and conducted Reddit “AMA” sessions to educate fans. 

Source: Deathbats/Avenged Sevenfold

Sanders admitted that he had concerns with the speculative nature of the NFT market as this could prevent fans from getting access to the collection. As the space has exploded in 2021, many experienced collectors have rushed in to mint and “flip” pieces in sought-after collections. The best flippers can make the equivalent of thousands of dollars on one piece.

“The last thing I want is whales going in to buy, you know, as many as they can and then [start] flipping them to our fans. Once the fans catch on, you don’t want to be too late,” he explained. 

The Deathbats club will launch as a collection of 10,000 uniquely generated NFTs on Ethereum with two layers of rarity. Each NFT will have various attributes akin to CryptoPunks or Bored Apes, showing the NFT’s generative rarity. There will also be four additional, perk-yielding rarities that will be attached to a small number of pieces in the collection. The additional perks are as follows: 

Guests: Free tickets and meet-and-greets for life.

Ghosts: Free tickets for life.

Undead: Meet-and-greets for life.

Shook: Exclusive merchandise sent to token holders.


While the rare Deathbats are likely to be the most sought after pieces, the band wants to ensure everyone can get value from the NFTs. All holders Deathbats holders will gain entry into exclusive giveaways, movie and poker nights on the band’s Discord, as well as the ability to receive ticket stub NFTs for every Avenged Sevenfold show they attend. 

In addition to offering a wide range of perks for Deathbats holders, the band also wants to use the collection to build out its presence in the Metaverse. First on the agenda is creating games inside virtual worlds in The Sandbox, one of the most anticipated NFT games to date. As Sanders was early to NFTs, the band also acquired a large amount of land in The Sandbox months before the project grew popular. 

“We have enough land to build three or four games,” said Sanders, while also alluding to several other Metaverse applications for the Deathbats NFTs. One goal is to allow holders to use their NFTs as avatars in The Sandbox by creating 3D models or airdropping holders a new set of avatars, similar to how Larva Labs gave out Meebits to all CryptoPunk holders. 

Beyond virtual worlds, the Deathbats NFTs will form the basis for a DAO to break down the barrier between the group and its fans. In the future, Deathbats holders will be able to vote on various topics and dictate the future of the Deathbats NFT community. However, the band is also mindful that most of its fans won’t buy one of the NFTs, and they need to be considered too. “We have millions of fans that are not going to be in this club,” Sanders pointed out. “And we can’t have them be affected too much by the club, right?”

From a technical perspective, the band is pulling out all the stops to make Deathbats an enduring, high-quality collection. Sanders has recruited one of his childhood friends to do all the backend coding for the project’s smart contracts, meaning the band won’t have to give up any creative control or sign any contracts. 

Additionally, the band weighed up the pros and cons of different blockchains but decided to mint the NFTs on Ethereum as the network is currently the de facto home of NFTs in the crypto space. On the issue of using Ethereum, Sanders acknowledged the downsides, most notably the high gas fees. Ultimately, though, the network’s dominance gave the group confidence that it was a strong platform to launch on. Sanders said: 

“I believe with the money locked up in there that I can feel confident giving this to our fans, knowing that it has the best chance of still being around in the next 20 to 30 years.”

Sanders also alluded to fractionalizing the band’s music and distributing tokens to Deathbats holders to continue delivering value to the community years down the line. Additionally, as more bands follow Avenged Sevenfold’s example and launch their own NFTs, there’s the possibility of collaborations. “We want to do things like if Metallica does enter the space or somebody bigger does something, we can say “hey, if you have the Metallica token and our token, you can get something special,”” Sanders remarked. 

Preparing for Launch

To give Avenged Sevenfold fans the best possible chance to get a Deathbat, the band has introduced an open whitelist with a strict one mint per wallet rule. Fans can link their Discord and Ethereum wallets on the Deathbats website to automatically join the whitelist, making them eligible to mint a Deathbat for 0.08 ETH on Dec. 11. 

Once the drop commences, everyone on the whitelist will have 48 hours to mint, allowing them to choose when they want to mint so they can save on gas costs. After the whitelist mint time is up, the remaining Deathbats will be released conventionally, allowing anyone to mint up to three in one transaction. 

Deathbats will be the music industry’s first example of a fully-fledged NFT-based fan club. If fans can make the journey onto the blockchain, they should be rewarded with a premium fan experience, delivered seamlessly through NFTs. Sander seems confident that the collection will be a success. “We’re going to provide so much value fans won’t want to sell,” he insisted. However, the biggest challenge will be convincing the band’s adherents to take the leap. With NFTs gaining traction more and more outside of the crypto space, Avenged Sevenfold is hoping that the Deathbats will be received well by all their fans, not just those who already understand crypto. 

Disclosure: At the time of writing, the author of this feature owned ETH and several other cryptocurrencies. 

Share this article


The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.

You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.

See full terms and conditions.



NFT Project Spotlight: Quantum, the NFT Photography Launchpad 

Quantum is showcasing top talent from the art photography world through NFTs on Ethereum. While the platform is still in its infancy, demand for Quantum-curated collections is growing fast.  What…

Audience Survey: Win A $360 Subscription To Pro BTC Trader

We’re doing this because we want to be better at picking advertisers for Cryptobriefing.com and explaining to them, “Who are our visitors? What do they care about?” Answer our questions…

NFT Project Spotlight: ThorGuards, the Avatars With Utility in THORCha…

ThorGuards is a collection of 9,999 NFT characters with art inspired by the THORChain ecosystem, Norse mythology, and Cyberpunk aesthetics. Learn about how the art and utility of ThorGuards set…

How CryptoPunks Inspired a Wave of NFT Avatars

As one of the earliest examples of non-fungible tokens, CryptoPunks have become the most coveted NFT avatars in existence. Subsequent projects have sought to develop the concept of NFT avatars…


Source

Tagged : / / / / /

DeFi Project Spotlight: Tokemak, the Liquidity Black Hole

by Cryptobriefing

Key Takeaways

  • Tokemak is an emerging protocol that aims to offer deep and sustainable liquidity to DeFi projects.

  • Using Tokemak, DeFi projects can reduce the costs for securing and sourcing liquidity by three to four times.

  • For liquidity providers, Tokemak provides higher yields and impermanent loss protection through single-sided staking pools.




Share this article


Tokemak is DeFi’s first Liquidity-as-a-Service product. It is designed to mitigate impermanent loss for liquidity providers and secure deep and sustainable liquidity for DeFi protocols. Tokemak reactors can help projects reduce their costs for securing and spending liquidity by roughly three to four times.

DeFi’s Liquidity Problem

Since launching in the summer of 2021, Tokemak has quickly established itself as one of DeFi’s most promising projects. Its early success is thanks mainly to its unique value proposition and approach to capturing liquidity.

To understand how Tokemak functions, it’s worth looking into the issue of liquidity and liquidity management in crypto. In simple terms, liquidity refers to the quantity of crypto assets available for trading on a particular protocol or trading venue. Liquidity is important because it determines how easily an asset can be converted to cash or another another without affecting its market price. 

When a protocol or trading venue has deep or high liquidity, traders can efficiently execute high-value trades without incurring slippage—a market phenomenon referring to the price difference between the asset’s order price and the paid price of the trade. When liquidity on a particular exchange is low, the slippage is higher, meaning traders typically receive fewer tokens than they ordered with each trade. 

Markets cannot exist without liquidity, which is why Tokemak likes to think of liquidity as infrastructure. As Tokemak puts it, electrical grids allow for the transfer of energy, the Internet allows for the transfer of information, and blockchains like Ethereum allow for the transfer of value. Tokemak founder Carson Cook sat down with Crypto Briefing to discuss the project, and he explained that it was built with the aim of having “an additional layer that moves liquidity between blockchains.” 

Cook describes Tokemak’s service as a “liquidity utility.” Eventually, the project is aiming to become a fully-fledged liquidity sourcing and management protocol that allows developers to build their projects without worrying about liquidity. “In this new world of Web3, you basically have value flow replacing the data flow of Web2,” he said. “So in a world where value flow is moving around, liquidity really plays the role of bandwidth within the system.”

Source: Tokemak

Liquidity sourcing in crypto is currently suboptimal. Centralized exchanges rely on centralized market-makers, while decentralized exchanges rely on automated market-makers to secure and manage liquidity. For projects looking to source liquidity for their native tokens, the process can cost a significant amount of time and money. In DeFi today, the ability to solve the liquidity problem can make or break a project. Commenting on this problem, Carson said: 

“One of the main signals we saw for building Tokemak is that all of these builders were living and dying based on whether they’ve figured out liquidity or market-making, which seemed like a strange thing for a builder of a gaming token, for example—to have their vision live or die based on whether they figured out something as opaque sounding as liquidity or market-making.”

According to calculations Tokemak shared with Crypto Briefing, DeFi project founders can spend anywhere between 25% and 75% of their timeshare on issues concerning liquidity sourcing, management, and market-making. On top of that, projects pay an average of around $1.25 in their native tokens for every $1 of liquidity secured. With Tokemak’s sustainable, on-demand liquidity sourcing and management solution, Carson says that this figure could be reduced by three to four times.

Tokemak Explained

The three functions that traditional market-makers typically centralize are capital provision, strategic market knowledge as to what and where assets can be traded, and trading technology and expertise to price the assets.

Rather than centralizing these three functions, Tokemak disaggregates and crowdsources them across the blockchain. Tokemak is effectively a decentralized liquidity provider. Like centralized market-makers, it executes the same three functions, but it segregates the tasks to three separate participants. 

These three participants are the liquidity providers that bring capital into the system, the liquidity directors that manage where liquidity needs to flow, and the pricers that provide trading and asset pricing information when the liquidity needs to go to order book or request-for-quotation-based exchanges. Pricers are excluded from the process when liquidity goes to automated market maker-based exchanges as the protocols themselves use an algorithm to price the assets. 

From a systems architecture standpoint, Tokemak is split into two parts: the genesis pools and the reactors. The genesis pools represent single-sided, globalized pools where liquidity providers can add ETH or USDC, which the reactors draw upon to provide double-sided liquidity on different trading venues across the crypto market. These are called globalized pools because ETH and USDC are the most common assets paired with other tokens to bootstrap liquidity pools across automated market makers. 



The reactors, on the other hand, represent the liquidity balancing and directing pools. On one side, liquidity providers deposit assets like AAVE, SUSHI, or OHM, and on the other liquidity directors determine where that liquidity will go by depositing Tokemak’s native utility and governance token, TOKE. 

One simple way to understand how Tokemak works is to focus on single reactors. To provide $20 million worth of liquidity in the ETH/AAVE pool on Uniswap, for example, the Tokemak protocol would take $10 million worth of AAVE tokens from the AAVE reactor and match it with $10 million worth of ETH from the ETH genesis pool, then automatically deposit the liquidity on Uniswap.

Source: Tokemak

Liquidity directors are responsible for deciding whether that same liquidity should be paired with ETH or USDC, as well as the decentralized exchange it gets deposited to. Liquidity directors accrue voting power based on the amount of TOKE they’ve staked in the system. 

To improve its effectiveness as a liquidity utility, Tokemak leverages TOKE emissions as rewards for liquidity providers and liquidity directors to balance the reactors. When a significant amount of assets have been deposited to a reactor but there is only a minimal amount of TOKE directing the liquidity, the protocol allocates more TOKE rewards to the liquidity director side. This increases the annual percentage yield liquidity directors can earn, which encourages more participants to direct the liquidity. 

Source: Tokemak

Conversely, if there’s a significant amount of TOKE staked in a reactor relative to the assets deposited as liquidity, the protocol allocates more TOKE rewards to the asset side of the reactor to encourage liquidity provision. In essence, Tokemak uses TOKE rewards to incentivize a balance between the value of the assets deposited as liquidity and the TOKE staked by liquidity directors through variable rewards emissions. 

This disintermediated market-making approach benefits projects looking to source liquidity and users looking to provide liquidity. It helps projects outsource liquidity sourcing and management efficiently and inexpensively. In contrast, liquidity providers can provide single-sided liquidity passively and without the risk of incurring impermanent loss—a process in which liquidity providers temporarily lose funds when providing assets to a liquidity pool due to the price volatility of the assets deposited. 

While Tokemak’s design is undoubtedly beneficial for individual stakeholders, it could also be a game-changer for the broader DeFi space. This is because it is aiming to mitigate impermanent loss and move toward what it calls “The Singularity.” 

Mitigating Impermanent Loss

Liquidity provision across DeFi exchanges currently requires staking assets in dual token liquidity pools. Because of the way automated market makers function, liquidity providers risk losing money from market-making due to impermanent loss. 

Impermanent loss refers to the difference in value between depositing assets in dual token liquidity pools and the value liquidity providers would have had if they passively held onto their assets instead of staking them. It occurs due to the price volatility of assets deposited in a pool, and allows arbitrageurs to capture value from liquidity providers in order to profit. 

According to a recent Bancor-backed study, nearly 50% of liquidity providers on Uniswap V3—DeFi’s largest automated market maker—suffer negative returns due to impermanent loss. Consequently, many DeFi participants are reluctant to provide liquidity on decentralized exchanges unless they are confident that the rewards are big enough to cover any potential losses. DeFi projects often allocate large portions of their token supply as rewards to liquidity providers to secure sufficient liquidity, which dilutes the value of their tokens through inflation. 

As the model is flawed, Tokemak has taken measures to mitigate impermanent loss for liquidity providers. From the perspective of an individual liquidity provider, depositing assets in single-sided staking pools solves the impermanent loss problem as it allows liquidity providers to withdraw the same quantity of assets they deposited. 

On a system-wide level, impermanent loss is still present, but Tokemak absorbs it on behalf of individual liquidity providers by reimbursing their losses. Reimbursements either come from drawing the assets in deficit from the Protocol Controlled Assets reserve, or in the rare instances that the assets in deficit don’t cover the losses, from liquidating the TOKE staked into the affected reactor. This means that liquidity directors are the last backstop for mitigating impermanent loss for liquidity providers. 

The Singularity

While both liquidity providers and liquidity directors earn high yields from TOKE emissions, the trading fees accrued from providing liquidity also need somewhere to go. 


All of the revenue the protocol makes on a whole-systems level go into Tokemak’s treasury pool, dubbed the “Protocol Controlled Assets.” This pool uses the same assets to further provide liquidity on different protocols and cover liquidity providers for impermanent loss. 

Over time, the goal is to grow the Protocol Controlled Assets pool reserve big enough for the protocol to tighten up the TOKE monetary supply and start paying out a portion of the revenue rather than TOKE as liquidity provider rewards. Commenting on the big picture idea behind this model, Carson explained:

“The goal is to get to what we call “The Singularity,” which is the moment that we have enough protocol-controlled assets that we don’t even need third-party liquidity providers. So at that point, you have this liquidity infrastructure that provides liquidity and already has enough assets itself to provide that liquidity bandwidth across DeFi.”

Carson anticipates that, in the future, Tokemak’s DAO could vote to pay out the yield generated from the Protocol Controlled Assets treasury pool to TOKE holders or use the yields to burn and redeem TOKE to put deflationary pressure on the token. In either outcome, as members of the Tokemak DAO, TOKE holders effectively have a pro-rata claim on the treasury, which indirectly gives them exposure to a diversified pool of revenue-generating assets.

Source: Tokemak

This is where the idea of seeing liquidity as infrastructure crystalizes. Tokemak effectively wants to become the sole decentralized liquidity provider across the decentralized finance ecosystem. Just as Amazon Web Services revolutionized data hosting by providing on-demand cloud computing to IT businesses, Tokemak hopes to revolutionize blockchain liquidity by providing Liquidity-as-a-Service to DeFi projects.

Tokemak offers a way for DeFi projects to subscribe to its Liquidity-as-a-Service product rather than paying for and managing their own liquidity. This outsourcing greatly reduces costs for projects. 

To better illustrate this point, it’s worth looking at how other specific DeFi projects could benefit. Alchemix, for example, could collapse its ALCX/ETH Sushi LP pool and ALCX governance pool into a single Tokemak pool and incentivize only one, which would reduce the costs for securing and sourcing liquidity. 

Tokemak estimates that its solution could lead to a three to four times reduction in what projects will need to pay for liquidity. Savings could be even higher as Tokemak approaches The Singularity. By spending less on liquidity incentives, projects can curb token emissions and inflation. Consequently, the token holders experience less dilution, leading to stronger incentives to invest for the long term. Lastly, Tokemak gets to keep collecting fees from its market-making services.

Final Thoughts 

With an actively expanding team of around 20 blockchain developers and crypto natives, Tokemak is aiming to disrupt the old, unsustainable paradigm of inflation-based liquidity.

So far, the protocol has been operating with limited capacity, having spun up only five reactors through its Collateralization of Reactors Events (C.O.R.E.), with an additional five already approved and in the process of bootstrapping. Over the next four to six weeks, Tokemak plans to enable permissionless reactors, which will allow DeFi projects to spin up their own reactors without approval from Tokemak’s DAO.

This is when Tokemak will start operating at full capacity and commence the race toward The Singularity. While it’s still unclear whether Tokemak will ever become a self-sustainable liquidity utility, its momentary benefits for both DeFi projects and liquidity providers are undeniable. It is one of very few DeFi protocols that has the potential to revolutionize the DeFi space and usher in a new era based on completely redefined liquidity sourcing and management dynamics.

Disclosure: At the time of writing, the author of this feature owned ETH and several other cryptocurrencies. 



Share this article


The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.

You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.

See full terms and conditions.



DeFi Project Spotlight: Abracadabra.Money, DeFi’s Magic Money Sp…

Abracadabra.Money is a lending protocol that allows users to deposit interest-bearing assets as collateral to borrow a stablecoin called Magic Internet Money that can be used across multiple blockchains. Abracadabra.Money…

What is Rarible: A DAO for NFTs

What was once dismissed as a silly and expensive sector, NFTs give creators access to global markets in a way that’s never been possible before, and it’s all thanks to blockchain.Those familiar…

DeFi Project Spotlight: Orion Money, the Cross-Chain Stablecoin Bank

Orion Money is aiming to become a cross-chain stablecoin bank based on an innovative suite of DeFi products providing seamless and frictionless access to stablecoin saving, lending, and spending. Its…

DeFi Project Spotlight: Raydium, Solana’s Top Automated Market M…

Raydium is a decentralized exchange on Solana that functions unlike any other exchange. It uses liquidity pools but also acts as the biggest market maker on Solana’s order book-based exchange,…


Source

Tagged : / / / / /

NFT Project Spotlight: Quantum, the NFT Photography Launchpad

by Cryptobriefing

Key Takeaways

  • Quantum is an art photography launchpad that helps artists mint their work as NFTs on Ethereum.

  • The platform focuses on accessibility, affordability, and creating a vibrant community around its curated collections.

  • Minting their work as NFTs is allowing artists to reach and engage with a wider audience than ever before.




Share this article


Quantum is showcasing top talent from the art photography world through NFTs on Ethereum. While the platform is still in its infancy, demand for Quantum-curated collections is growing fast. 

What Is Quantum? 

Quantum is an art photography launchpad that’s helping artists unlock value in their work through NFTs on the Ethereum blockchain. The platform focuses on accessibility and affordability, fostering community engagement around its curated collections and the NFT photography world as a whole. 

Quantum’s story dates back to January 2021 with artist and curator Justin Aversano. After encountering difficulties getting his photography displayed in traditional art galleries, Aversano started looking into other ways to promote his work. While browsing for alternative methods of promotion online he came into contact with a pseudonymous crypto native and NFT collector going by the name gmoney, who encouraged Aversano to mint his photography as NFTs on Ethereum. 

With help from gmoney and other members of the NFT community, Aversano made his blockchain debut with a collection of 100 twin portraits called “Twin Flames.” 

Twin Flames #83. Bahareh & Farzaneh Safarani (Source: OpenSea)

Although NFTs were relatively unknown at the time, all 100 Twin Flames sold out, netting Aversano around $50,000. However, it wasn’t until later in the year when NFTs exploded into the mainstream that “Twin Flames” really took off. A robust secondary market emerged for Aversano’s work, fueled in part by sales at prestigious auction houses such as Sotheby’s and Christie’s. The lowest-priced “Twin Flames” NFTs on OpenSea will set buyers back over $750,000 today. 

The success of “Twin Flames” showed proof of concept. Collectors were willing to pay for art photography NFTs, and the new medium allowed further reach than ever before, while also avoiding the gatekeeping associated with the traditional art world. “Twin Flames” started to take off at the height of what became known as “NFT summer,” a period of heightened market activity and frenzy for NFTs. After seeing the collection grow in popularity, Aversano and his three co-founders Kris Graves, Alexx Shadow, and Jonas Lamis launched Quantum in August to help pass on their knowledge and help other artists unlock the value in their work through NFTs.

How Quantum Works

In some senses, Quantum is not all that different to the generative art platform Art Blocks. Artists can apply to have their photography featured as a curated collection on the site. Pieces are minted as non-fungible tokens and bought and sold using ETH, Ethereum’s native token. 

When Crypto Briefing caught up with Jonas Lamis to hear about how the platform got started, he explained that every collection featured on the platform goes through a strict selection process. “We’re looking for sets that tell stories,” he said. Quantum aims to represent a diverse range of artists giving equal representation to women and people of color, who sometimes struggle to get their work featured in traditional galleries. Kris Graves heads curation at Quantum, drawing from his 20 years of experience curating photobooks and museum exhibitions. 


Once an artist has been chosen, the next step is figuring out the best way to launch their collection. Quantum has experimented with three different distribution models to find the most successful way to launch collections. 

For Amy Elkin’s “Anxious Pleasures,” the platform used a mint pass system, where passes were free to claim in a fair launch distribution prior to the collection’s release. Joey L’s “Ethiopia” launched through a Dutch auction format with the price to mint starting at 3 ETH and decreasing with every Ethereum block until all pieces were sold. A first-come-first-served model has also been trialled, but scrapped due to problems with botting and gas wars.

Ethiopia #2 – Fentale receives Kereyu hairstyle from Umer (Source: Quantum)

Quantum launches aim to make its drops accessible to as many collectors as possible. “Justin advocates [for] not overpricing art,” says Lamis. “He believes that making collections accessible is key to building a strong community around them.” As Quantum and its curated collections gain popularity, demand will inevitably rise, but the platform is committed to making its featured art accessible. So far, the majority of pieces on Quantum have minted for less than one ETH (one ETH trades at roughly $4,350 today).

As the art is accessible, a strong community has formed around Quantum and each of its curated collections. This community engagement is most apparent in Quantum’s “Rizzo Genesis Collection” by the late Alberto Rizzo. Apart from being the most traded collection on the secondary market, community curation has emerged surrounding attributes in the set. While no official rarity distribution exists, rarity has emerged organically as traits in certain pieces command higher market prices than others. 

Additionally, when minting through Quantum, buyers do not know exactly which piece from a collection they will receive until after the mint. This ensures that drops are fair and helps generate a buzz around highly-anticipated collections containing standout pieces. 

Collectors and fans can learn about and discuss collections on Quantum’s Discord server, where each collection has its own dedicated channel. On Discord, community members can engage with a collection’s artist, find out more about individual pieces, and organize trades with other collectors. 

Quantum’s Philanthropy 

Ethereum is currently crypto’s biggest NFT hub. The most sought-after NFTs are generally minted on Ethereum, and OpenSea, the leading NFT marketplace built on Ethereum, has handled over $10 billion worth of sales to date. However, while Ethereum is still a Proof-of-Work blockchain, its environmental impact is high. Currently, the Ethereum network uses around 89 terawatt hours per year to process transactions, about as much energy as Belgium. Many NFT skeptics have raised concerns surrounding Ethereum’s energy usage as the space has entered mainstream consciousness. 

Quantum is taking a pragmatic approach to the environmental concerns, donating 2.5% of the profits from every drop to carbon reduction initiatives. Additionally, every curated artist on Quantum agrees to donate a further 2.5% of their profits to a charity of their choice. Charities scheduled to receive donations so far include St Jude’s Hospital and WaterAid UK. 



For Quantum, using Ethereum to mint art NFTs is a means to an end, where the primary goal is to give artists exposure and a way to effectively monetize their work. “What we’re doing isn’t tied to any particular blockchain,” Lamis says, hinting that Quantum may be open to exploring chains other than Ethereum in the future. 

Plans for the Future

Going forward, Quantum is hoping to further increase community engagement through several initiatives. Quantum plans to introduce community curation, where holders of Quantum NFTs will get the chance to help decide which collections are featured on the platform next. Additionally, Quantum wants to break its collections into seasons, adding an element of finality to each period of curated drops. The first season of drops is planned to run until March 2022. 

For now, Quantum plans to stick to a schedule of one curated collection drop per week. Competition for a place in Quantum’s curated roster is high—Lamis says there is big demand from artists given that NFTs and blockchain technology are starting to disrupt the traditional art world.

Next, the platform will feature Julie Blackmon’s “Homegrown” as its special Black Friday drop, a 61-piece collection that Blackmon describes as “modern day images that would find their way onto the cover of the Saturday Evening Post, were it still published.” The Black Friday drop will mint for a fixed price of 0.75 ETH, and will try out a new whitelist drop model. Details on how to qualify for the whitelist will be announced prior to the sale. 

Quantum highlights the disruptive power of NFTs and the way blockchain technology has created real-world value. Artists can now reach and engage with a wider audience than ever before, and art enthusiasts have an opportunity to collect pieces without being priced out by middlemen or galleries. 

While NFTs are in vogue right now, there’s always the possibility of a market crash, in part because of their close price correlation with the cryptocurrency market. Whether the platform will be able to rival the traditional art world in the years to come is also not yet clear. But for now, Quantum appears to be laying the foundations for an enduring NFT photography market, providing a fresh new platform where artists can reach a wider audience of passionate collectors.

Disclosure: At the time of writing this feature, the author owned ETH and several other cryptocurrencies. 

Share this article


The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.

You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.

See full terms and conditions.



Fidenza Artist Sells $7M in NFTs That Aren’t Yet Minted

Fidenza artist Tyler Hobbs has sold $7M worth of digital art that is not scheduled to exist until December. Even then, buyers will have to be physically present to redeem…

What is a Crypto Airdrop: Why Projects Airdrop Crypto

Crypto airdrops occur when new tokens are freely distributed to different wallets in order to drive initial growth and build a community. They represent a popular marketing tactic that new projects use to spread…

A Pirate Bay Clone for NFTs Has Hit the Web

A critic of non-fungible tokens has created The NFT Bay, a site that mimics the Pirate Bay, in order to distribute NFT images in bulk. The NFT Bay Sets Sail…

Nike Filings Suggest It Is Ready to Explore NFTs

Nike has filed several requests with the U.S. Patent and Trademark Office for branded virtual goods, including shoes, clothing, and accessories.  Nike Prepares For the Metaverse Nike could be the…



Source

Tagged : / / / / / /

NFT Project Spotlight: ThorGuards, the Avatars With Utility in THORChain

by Cryptobriefing

Key Takeaways

  • ThorGuards is an upcoming project of 9,999 NFT avatars on the Ethereum blockchain.

  • The ThorGuards NFTs will provide several perks and benefits when using apps in the THORChain ecosystem.

  • The project is set to mint on Nov. 9.




Share this article



ThorGuards is a collection of 9,999 NFT characters with art inspired by the THORChain ecosystem, Norse mythology, and Cyberpunk aesthetics. Learn about how the art and utility of ThorGuards set it apart from many other NFT projects on the market today. 

ThorGuards Unpacked  

NFTs have exploded in 2021. ThorGuards is one of the most unique projects to enter the scene.

Arguably the most popular NFT trend today is the “avatar” format, which derives from the popular Larva Labs series CryptoPunks. Avatar collections share several common features. They’re algorithmically generated, they typically feature animals or other types of characters sharing some similarities, and each piece has different traits that differentiates it from others in the collection. Avatar collections are usually released in an edition of a few thousand pieces. Members of the NFT community frequently use avatar NFTs as their profile pictures on social media sites like Twitter, as if they are adopting a new persona. The most popular avatar collections have sold out in minutes this year.

Like CryptoPunks, ThorGuards is a collection of algorithmically generated avatars produced by combining base characteristics such as hairstyles and clothing to create 9,999 unique characters. The collection pays homage to THORChain, an independent liquidity protocol that serves as a cross-chain exchange, allowing users to easily trade assets from one chain to another. As the THORChain ecosystem uses elements of Norse mythology in its branding, ThorGuards has developed this theme in its NFTs. While the project is tied to the THORChain ecosystem, the ThorGuards NFTs will be minted on Ethereum due to the increased functionality of the ERC-721 NFT standard. 

The project bases its art generation on earlier avatar projects such as Bored Ape Yacht Club and Pudgy Penguins, making sure the number of attributes its characters have and how rare specific variations are feels natural compared to existing projects. Getting the rarity distribution right for ThorGuards was a top priority for ThorGuards core team member, 0xNguyen. He told Crypto Briefing that the rarity distribution is one of the most important factors to consider when building an avatar NFT project. “The stakes are pretty high, the rarity distribution can’t really make a project—it’s not something you can see while browsing OpenSea—but it can break a project,” he said. “You can have a collection where things are too complex and too many things are rare to where nothing is rare.”

To make sure the rarity distribution of the collection worked well, 0xNguyen settled on a model that smoothly transitions from common to rare, with a good amount of “ultra-rare” and “legendary” variations. 

Rarity distribution for one ThorGuards attribute. (Source: ThorGuards)

Perhaps the most important aspect of any NFT collection is its art, which is one area where ThorGuards sets itself apart from other projects. The ThorGuards avatars use a fresh, 3D-rendered style to create a fusion of old and new. The project draws from Norse mythology and Viking imagery, combining these themes with a futuristic Cyberpunk aesthetic, intended to represent crypto and Web3. The art has a unique style with few close comparisons in the NFT space.  

A ThorGuards NFT. (Source: ThorGuards)

Another way ThorGuards pushes the boundaries of NFT technology is by adding evolution. After they are minted, the ThorGuards NFTs will not yet be in their final form. The project plans to implement ThorGuards staking, which will allow owners to stake their NFT to evolve how it looks. The evolution will alter the background of the NFT and also level up the NFT character with weapons and accessories.  

Because ThorGuards are 3D-rendered, they can easily be adapted to future developments such as games, virtual reality, or integration with Metaverse applications. The team is hoping that the complexity of the art will act as a “moat” for the project, protecting it from future derivative copycats. Discussing the art generation, 0xNguyen said:


“The computing power that it takes to create ThorGuards is pretty impressive. It actually takes 10 minutes per character to render, meaning it will take 69 days of computing power to create all 9,999.”

To speed up the generation process, the ThorGuards team uses several virtual machines to render the characters in tandem, ensuring that all the NFTs will be ready and tested for the upcoming mint. 

NFTs With Utility

While NFTs have quickly become status symbols in the crypto space, the technology behind them has the potential to deliver much more to owners than a cool profile picture. This is where ThorGuards aims to build on the potential of NFTs with its THORChain ecosystem integration. 

Many of the developers behind ThorGuards have previously worked on other THORChain ecosystem projects such as RUNEBase and THORSwap. This has allowed the project to secure a host of partner applications that have agreed to integrate with the ThorGuards NFTs, offering a myriad of benefits and utility to owners.

Owning a ThorGuards NFT will grant benefits through a “Guard Pass” that can be used to access perks such as increased staking rewards on DefiSpot, discounted trading fees through Trust Wallet, and boosted yields and allocations on THORStarter. Additionally, ThorGuards will give owners access to future airdrops, token presales, and additional integrations with XDEFI Wallet, THORWallet, THORSwap, and others.

Variations of clothing and accessories for the ThorGuards NFTs will also include references to all ecosystem partners. So far, the project team has released variations for two partners: LP University and 0xVentures.

LP University graduation cap. (Source: ThorGuards)

0xNguyen commented on the integration with other THORChain ecosystem projects, explaining:

“There aren’t many NFT projects that have these deep relationships across a DeFi ecosystem. But it’s obvious to me, it’s more than just a JPEG, it’s a crypto token, and you can build all sorts of utility into that token. We think of it as a key or membership.”

ThorGuards aims to be a binding force for a multitude of applications in the THORChain ecosystem. In addition to the currently planned integrations, the project has a dedicated partnership coordinator whose job is to build more utility into the ThorGuards NFTs in the future. The utility in the THORChain ecosystem aims to provide enduring, long-term value to owners. 



Building a Strong Community

Like other avatar NFT projects, ThorGuards has placed a big emphasis on building a long-lasting community around the project. Community building focuses on involving active members, giving them the power to shape the community as it grows, and publicly recognizing their contributions.

Community-building initiatives such as meme competitions, trivia nights, and Easter egg hunts have come from members actively involved in the ThorGuards community through the project’s Discord server. 

While Discord is currently the community’s main hub, 0xNguyen says that expanding to other platforms is also a key priority. The ThorGuards team builds engagement on other platforms such as Twitter and Medium by running competitions and incentivizing content creators. Many of those who have produced explainers, how-to guides, and other THORChain related content have been given leadership positions in the community.

From a technical perspective, the ThorGuards NFTs will also function as governance tokens, allowing holders to vote on the future of the ThorGuards project. “Tokens and NFTs—they’re a mechanic,” 0xNguyen said. “For the first time ever, an audience, fanbase, or community can actually have ownership, as a vote through governance or a reward in terms of the project’s growth.”

As an extension of this idea, the ThorGuards developers are actively looking out for and implementing ideas and suggestions from the community while helping and incentivizing members to build their own community initiatives. Additionally, the ThorGuards team has rewarded active members and competition winners with RUNE tokens, whitelist spots, and free NFT mints for when the project goes live. 

ThorGuards minting will commence Nov. 9, with the price in Ethereum also due to be announced at the time. Raffle registration has already started, allowing the community to sign up for the chance to mint a ThorGuards NFT, avoiding potential gas wars. ThorGuards is also running several competitions on Discord and Twitter for the chance to win whitelist spots for those looking to avoid the raffle. 

On the surface, ThorGuards may look similar to dozens of other avatar NFT projects on the market. Few NFT enthusiasts would argue that the avatar trend reached a point of saturation months ago, but by offering added utility within the THORChain ecosystem, ThorGuards could bring a new dynamic to the format. If the avatar trend is to maintain popularity, newer projects may need to take a similar approach to ThorGuards.

Disclosure: At the time of writing this feature, the author owned ETH and several other cryptocurrencies. 

Share this article



The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.

You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.

See full terms and conditions.



How CryptoPunks Inspired a Wave of NFT Avatars

As one of the earliest examples of non-fungible tokens, CryptoPunks have become the most coveted NFT avatars in existence. Subsequent projects have sought to develop the concept of NFT avatars…

Fidenza Artist Sells $7M in NFTs That Aren’t Yet Minted

Fidenza artist Tyler Hobbs has sold $7M worth of digital art that is not scheduled to exist until December. Even then, buyers will have to be physically present to redeem…

ESL Gaming to Offer NFTs at Flagship E-Sports Event

ESL Gaming has partnered with Immutable X to offer NFT minting and trading on its e-sports platform.  Leading E-Sports Company to Offer NFTs ESL Gaming, one of the world’s biggest…

MDEX: Overlooked Decentralized Exchange That Pays You to Trade

Based on statistics from DeBank and dapp.com, one of the top-performing decentralized exchanges by TVL and trading volume this year is MDEX—an AMM-based DEX functioning across the Huobi Eco-chain (HECO), Binance Smart Chain…



Source

Tagged : / / / / /

NFT Project Spotlight: THORGuards, the Avatars With Utility in THORChain

by Cryptobriefing

Key Takeaways

  • ThorGuards is an upcoming project of 9,999 NFT avatars on the Ethereum blockchain.

  • The ThorGuards NFTs will provide several perks and benefits when using apps in the THORChain ecosystem.

  • The project is set to mint on Nov. 9.




Share this article



ThorGuards is a collection of 9,999 NFT characters with art inspired by the THORChain ecosystem, Norse mythology, and Cyberpunk aesthetics. Learn about how the art and utility of ThorGuards set it apart from many other NFT projects on the market today. 

ThorGuards Unpacked  

NFTs have exploded in 2021. ThorGuards is one of the most unique projects to enter the scene.

Arguably the most popular NFT trend today is the “avatar” format, which derives from the popular Larva Labs series CryptoPunks. Avatar collections share several common features. They’re algorithmically generated, they typically feature animals or other types of characters sharing some similarities, and each piece has different traits that differentiates it from others in the collection. Avatar collections are usually released in an edition of a few thousand pieces. Members of the NFT community frequently use avatar NFTs as their profile pictures on social media sites like Twitter, as if they are adopting a new persona. The most popular avatar collections have sold out in minutes this year.

Like CryptoPunks, ThorGuards is a collection of algorithmically generated avatars produced by combining base characteristics such as hairstyles and clothing to create 9,999 unique characters. The collection pays homage to THORChain, an independent liquidity protocol that serves as a cross-chain exchange, allowing users to easily trade assets from one chain to another. As the THORChain ecosystem uses elements of Norse mythology in its branding, ThorGuards has developed this theme in its NFTs. While the project is tied to the THORChain ecosystem, the ThorGuards NFTs will be minted on Ethereum due to the increased functionality of the ERC-721 NFT standard. 

The project bases its art generation on earlier avatar projects such as Bored Ape Yacht Club and Pudgy Penguins, making sure the number of attributes its characters have and how rare specific variations are feels natural compared to existing projects. Getting the rarity distribution right for ThorGuards was a top priority for ThorGuards core team member, 0xNguyen. He told Crypto Briefing that the rarity distribution is one of the most important factors to consider when building an avatar NFT project. “The stakes are pretty high, the rarity distribution can’t really make a project—it’s not something you can see while browsing OpenSea—but it can break a project,” he said. “You can have a collection where things are too complex and too many things are rare to where nothing is rare.”

To make sure the rarity distribution of the collection worked well, 0xNguyen settled on a model that smoothly transitions from common to rare, with a good amount of “ultra-rare” and “legendary” variations. 

Rarity distribution for one ThorGuards attribute. (Source: ThorGuards)

Perhaps the most important aspect of any NFT collection is its art, which is one area where ThorGuards sets itself apart from other projects. The ThorGuards avatars use a fresh, 3D-rendered style to create a fusion of old and new. The project draws from Norse mythology and Viking imagery, combining these themes with a futuristic Cyberpunk aesthetic, intended to represent crypto and Web3. The art has a unique style with few close comparisons in the NFT space.  

A ThorGuards NFT. (Source: ThorGuards)

Another way ThorGuards pushes the boundaries of NFT technology is by adding evolution. After they are minted, the ThorGuards NFTs will not yet be in their final form. The project plans to implement ThorGuards staking, which will allow owners to stake their NFT to evolve how it looks. The evolution will alter the background of the NFT and also level up the NFT character with weapons and accessories.  

Because ThorGuards are 3D-rendered, they can easily be adapted to future developments such as games, virtual reality, or integration with Metaverse applications. The team is hoping that the complexity of the art will act as a “moat” for the project, protecting it from future derivative copycats. Discussing the art generation, 0xNguyen said:


“The computing power that it takes to create ThorGuards is pretty impressive. It actually takes 10 minutes per character to render, meaning it will take 69 days of computing power to create all 9,999.”

To speed up the generation process, the ThorGuards team uses several virtual machines to render the characters in tandem, ensuring that all the NFTs will be ready and tested for the upcoming mint. 

NFTs With Utility

While NFTs have quickly become status symbols in the crypto space, the technology behind them has the potential to deliver much more to owners than a cool profile picture. This is where ThorGuards aims to build on the potential of NFTs with its THORChain ecosystem integration. 

Many of the developers behind ThorGuards have previously worked on other THORChain ecosystem projects such as RUNEBase and THORSwap. This has allowed the project to secure a host of partner applications that have agreed to integrate with the ThorGuards NFTs, offering a myriad of benefits and utility to owners.

Owning a ThorGuards NFT will grant benefits through a “Guard Pass” that can be used to access perks such as increased staking rewards on DefiSpot, discounted trading fees through Trust Wallet, and boosted yields and allocations on THORStarter. Additionally, ThorGuards will give owners access to future airdrops, token presales, and additional integrations with XDEFI Wallet, THORWallet, THORSwap, and others.

Variations of clothing and accessories for the ThorGuards NFTs will also include references to all ecosystem partners. So far, the project team has released variations for two partners: LP University and 0xVentures.

LP University graduation cap. (Source: ThorGuards)

0xNguyen commented on the integration with other THORChain ecosystem projects, explaining:

“There aren’t many NFT projects that have these deep relationships across a DeFi ecosystem. But it’s obvious to me, it’s more than just a JPEG, it’s a crypto token, and you can build all sorts of utility into that token. We think of it as a key or membership.”

ThorGuards aims to be a binding force for a multitude of applications in the THORChain ecosystem. In addition to the currently planned integrations, the project has a dedicated partnership coordinator whose job is to build more utility into the ThorGuards NFTs in the future. The utility in the THORChain ecosystem aims to provide enduring, long-term value to owners. 



Building a Strong Community

Like other avatar NFT projects, ThorGuards has placed a big emphasis on building a long-lasting community around the project. Community building focuses on involving active members, giving them the power to shape the community as it grows, and publicly recognizing their contributions.

Community-building initiatives such as meme competitions, trivia nights, and Easter egg hunts have come from members actively involved in the ThorGuards community through the project’s Discord server. 

While Discord is currently the community’s main hub, 0xNguyen says that expanding to other platforms is also a key priority. The ThorGuards team builds engagement on other platforms such as Twitter and Medium by running competitions and incentivizing content creators. Many of those who have produced explainers, how-to guides, and other THORChain related content have been given leadership positions in the community.

From a technical perspective, the ThorGuards NFTs will also function as governance tokens, allowing holders to vote on the future of the ThorGuards project. “Tokens and NFTs—they’re a mechanic,” 0xNguyen said. “For the first time ever, an audience, fanbase, or community can actually have ownership, as a vote through governance or a reward in terms of the project’s growth.”

As an extension of this idea, the ThorGuards developers are actively looking out for and implementing ideas and suggestions from the community while helping and incentivizing members to build their own community initiatives. Additionally, the ThorGuards team has rewarded active members and competition winners with RUNE tokens, whitelist spots, and free NFT mints for when the project goes live. 

ThorGuards minting will commence Nov. 9, with the price in Ethereum also due to be announced at the time. Raffle registration has already started, allowing the community to sign up for the chance to mint a ThorGuards NFT, avoiding potential gas wars. ThorGuards is also running several competitions on Discord and Twitter for the chance to win whitelist spots for those looking to avoid the raffle. 

On the surface, ThorGuards may look similar to dozens of other avatar NFT projects on the market. Few NFT enthusiasts would argue that the avatar trend reached a point of saturation months ago, but by offering added utility within the THORChain ecosystem, ThorGuards could bring a new dynamic to the format. If the avatar trend is to maintain popularity, newer projects may need to take a similar approach to ThorGuards.

Disclosure: At the time of writing this feature, the author owned ETH and several other cryptocurrencies. 

Share this article



The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.

You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.

See full terms and conditions.



How CryptoPunks Inspired a Wave of NFT Avatars

As one of the earliest examples of non-fungible tokens, CryptoPunks have become the most coveted NFT avatars in existence. Subsequent projects have sought to develop the concept of NFT avatars…

MDEX: Overlooked Decentralized Exchange That Pays You to Trade

Based on statistics from DeBank and dapp.com, one of the top-performing decentralized exchanges by TVL and trading volume this year is MDEX—an AMM-based DEX functioning across the Huobi Eco-chain (HECO), Binance Smart Chain…

Fidenza Artist Sells $7M in NFTs That Aren’t Yet Minted

Fidenza artist Tyler Hobbs has sold $7M worth of digital art that is not scheduled to exist until December. Even then, buyers will have to be physically present to redeem…

ESL Gaming to Offer NFTs at Flagship E-Sports Event

ESL Gaming has partnered with Immutable X to offer NFT minting and trading on its e-sports platform.  Leading E-Sports Company to Offer NFTs ESL Gaming, one of the world’s biggest…



Source

Tagged : / / / / /

DeFi Project Spotlight: Yield Guild Games, GameFi’s DAO Titan

by Cryptobriefing

Key Takeaways

  • Yield Guild Games is the biggest play-to-earn gaming guild in crypto, with over 87,000 guild members.

  • It’s structured as a DAO that invests in revenue-generating in-game NFT assets.

  • It purchases in-game NFT assets and rents them out to players for a percentage share of the revenue earned from playing crypto games.




Share this article



Yield Guild Games is a play-to-earn blockchain gaming guild structured as a decentralized autonomous organization. It focuses on investing in revenue-generating NFT assets used in virtual worlds and blockchain games.

What Is Yield Guild Games?

A GameFi and DAO revolution is unfolding, and Yield Guild Games (YGG) is at the forefront of the movement.

The raw economic potential unlocked by merging gaming with cryptocurrencies can not be overstated. Video gaming is a $160 billion industry with an estimated 3.24 billion gamers around the world. Many passionate gamers dream of getting paid to play games. However, until now, that dream has only been achievable for an extremely small subset of players—the cream of the crop professionals that win tournaments. Most games are too small to even attract professional players. 

NFTs and play-to-earn games like Axie Infinity have exploded in popularity in 2021. Collectively dubbed “GameFi,” these Web3-native projects represent the cross-section between gaming and DeFi. For the first time, they have made the dream of making a salary from gaming accessible to anyone with an Internet connection and the inclination to get started, including casual gamers that wouldn’t otherwise stand a chance at earning any money. Axie’s rise in 2021 has revealed a huge demand for crypto-based, player-owned games where the actual financial beneficiaries are not the game developers or publishers, but the players themselves. 

Being able to own and freely trade in-game NFT assets for crypto and fiat currencies means that players can now capitalize on their time and skills by playing games. As a result, the crypto space has seen gamers and crypto natives begin to organize in communities to leverage the power of groups and supercharge their earnings. Presently, the largest of these communities is Yield Guild Games (YGG), a gaming guild structured as a DAO focused on investing in yield-generating NFT assets used in virtual worlds and play-to-earn games.

Alexei Udall, head of partnerships at YGG, says that the idea for the project evolved out of the Axie Infinity scene, which grew exponentially in the Philipines during the COVID-19 crisis. “Initially, we were building out these Axie scholarships, which are yield-generating game assets that could be distributed among communities for the shared benefits of the community and the underlying guild,” Udall tells Crypto Briefing.

Seeing the potential of the play-to-earn trend early on, and how it could change people’s lives, Gabby Dizon, Beryl Li, and a team member who goes by the name Owl of Moistness, co-founded YGG in order to organize gamers into a powerful cross-game gaming guild that could leverage its collectively-owned game assets to become a dominant force in the booming play-to-earn scene.


The value proposition of YGG is straightforward. The DAO invests in-game assets that allow it to earn some form of revenue. For example, in virtual worlds like The Sandbox or games like Ember Sword and Splinterlands, YGG functions like a traditional real estate investment trust (REIT)—only in the Metaverse, where it buys virtual properties like LAND in The Sandbox and rents them out to generate cash flows for the shared benefit of the DAO.

Source: Yield Guild Games

In the case of Axie Infinity, in addition to owning virtual property, YGG generates revenue by breeding and renting large numbers of Axies to players. The players then use Axies in-game to earn Smooth Love Potion (SLP) tokens. The income from SLP is shared between the guild, scholarship providers, and players, with 70%, 20%, and 10% going to each respectively. With games like Guild of Guardians, YGG plans to buy Mythic Guild and Legendary Heroes NFTs and then rent them out to guild members for a portion of the in-game revenue generated from them.

DAO Structure and Revenue Share

YGG is best described as a hybrid decentralized entity that is part cross-game gaming guild and part community-governed investment fund.

Traditionally, gaming guilds have always represented in-game groups consisting of players united over a common in-game goal. For example, in multi-player role-playing games like World of Warcraft, players join in-game guilds to improve their chances of successfully raiding the most challenging instances, killing the toughest bosses, and acquiring the best gear. 

YGG innovates on this idea by constituting a decentralized, “supragame” guild spanning many play-to-earn games. “We share a resemblance to traditional guilds in the gaming space,” says Udall, “but we’re less centric to one game and more open to a wide array of games.” The common goal of the guild is to leverage guild-owned NFT assets to generate as much revenue for itself as possible.

To achieve this goal, YGG is structured as a DAO, whereby guild members can make proposals and vote on the organization’s direction, including how investments are made or how revenue is shared. YGG will also implement various staking vaults, where each vault will accrue income streams from one or more games. For example, one of the vaults could be dedicated to income from breeding and selling Axies, while another to the revenue from renting virtual real estate NFTs in The Sandbox or Ember Sword. YGG will eventually also implement a vault stewarding the full range of revenue streams collected by the DAO, suitable for more passive investors seeking broad exposure to the play-to-earn market.

Yield Guild Games Vaults
Source: Yield Guild Games

YGG has become the largest community in the play-to-earn gaming space since the guild launched in the first half of 2021. YGG’s core team currently totals more than 30 people, while the community counts over 87,000 members and 5,500 Axie scholars. According to Udall, this is only the beginning. YGG wants to build a global economy of play-to-earn games and become the largest guild the gaming community has ever seen. He says:



“We’re expanding across many different verticals simultaneously: investing heavily into new games, partnering with upcoming projects, building out guild mechanics, and growing our esports community, amongst other things. We’re aiming to become an extremely global operation, with subDAOs deployed across many different geographies.”

The subDAOs Udall refers to represent smaller, more tight-knit organizations operating under the YGG umbrella that will either specialize in specific games or be governed by distinct local communities. The idea is to boost the operational effectiveness of the YGG DAO by introducing compartmentalization and specialization. For example, the Filipino play-to-earn gaming community could organize and semi-autonomously operate as a separate YGG subDAO, coordinating with and siphoning a portion of its revenues to the core YGG DAO.

The Future for YGG

As the first global gaming guild and DAO operating as an NFT investment fund amid an explosion in play-to-earn gaming, YGG is in a strong position. The virtual real estate in play-to-earn games like Axie Infinity is scarce, meaning that if the games see wider adoption, the real estate could become more valuable in the future. 

Additionally, in-game guilds could prove to be powerful as the Metaverse expands, especially if they include skilled players with significant backing. It’s worth noting that play-to-earn also often means pay-to-win. In other words, the reward dynamics of play-to-earn games are skewed towards guilds and players that have the means to invest the most in in-game purchases.

Despite YGG’s huge promise, stewarding such organizations is not all fun and games. Udall says that the rapid proliferation of play-to-earn projects dilutes the quality of the games being built and attracts nefarious actors to the space. Gamers can often become emotionally invested in the games they play even if no money is involved. In some cases, developers have scammed players and investors, causing damage to the entire scene. 

Udall also thinks that regulation is a potential risk for the sector. “Intrinsically there’s nothing really wrong with regulation, as long as it’s done in a way that doesn’t destroy the whole ecosystem,” he says, explaining that while he’s not particularly worried, he remains cautious of possible regulatory developments. 

Yield Guild Games is the first project of its kind in the space, but it’s unlikely to be the last. As the play-to-earn gaming scene evolves, gamers and investors will also start to evolve, finding more innovative ways to win and earn from gaming. It’s currently the largest DAO and gaming guild in the play-to-earn scene. However, as competition ramps up, it’s not unlikely that other communities will adopt the same mindset and iterate on YGG”s idea to compete for ultra-scarce real estate in the Metaverse. Let the games begin.

Share this article



The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.

You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.

See full terms and conditions.



Five Play-to-Earn Crypto Games to Look Out For

The rise of NFT-powered blockchain games has transformed the gaming industry by making the players the primary financial beneficiaries and decision-makers in the ecosystem. Play-to-earn gaming looks set to be…

DeFi Project Spotlight: Abracadabra.Money, DeFi’s Magic Money Sp…

Abracadabra.Money is a lending protocol that allows users to deposit interest-bearing assets as collateral to borrow a stablecoin called Magic Internet Money that can be used across multiple blockchains. Abracadabra.Money…

DeFi Project Spotlight: Orion Money, the Cross-Chain Stablecoin Bank

Orion Money is aiming to become a cross-chain stablecoin bank based on an innovative suite of DeFi products providing seamless and frictionless access to stablecoin saving, lending, and spending. Its…



Source

Tagged : / / / / / /

DeFi Project Spotlight: Trading On-Chain Ethereum Derivatives With Oiler Network

by Cryptobriefing

Key Takeaways

  • Oiler is an on-chain trading protocol for blockchain parameters like gas fees or network hashrate.

  • Oiler’s clients will most likely be Ethereum power-users like exchanges, wallet operators, or Layer 2 providers.

  • Oiler functions without oracles. All information they use is available directly on the blockchain, thus limiting oracle attack risks.




Share this article



By offering on-chain derivatives, Oiler Network allows companies to hedge the risks of adverse network events. For most users, fluctuating gas prices or a blockchain’s hashrate is not of the utmost concern; for companies, exchanges, or whales, however, Oiler provides stability and insurance around what they can’t control.

Hedging Gas Fees and Network Shocks

Oiler Network provides insurance for heavy blockchain users such as exchanges, institutional clients, Layer 2 (L2) providers, miners, and DeFi power users. To do so, it has built an options trading platform of blockchain-native derivatives. These derivatives could be the total hashrate of the network (the computing power currently supporting the Ethereum blockchain), the cost of gas fees, or the state of any other blockchain parameter.

In practice, exchanges are some of the most gas-hungry participants in blockchain networks. 

Very often, they will pay millions to subsidize withdrawals from their custody to on-chain addresses. With the rise of gas prices in the last year, exchanges like FTX have decided to stop allowing free withdrawals on the Ethereum blockchain after paying more than $20 million to subsidize these withdrawals.


Any entity that needs to use the Ethereum blockchain is exposed to these changing parameters. While a retail investor might choose to wait for lower gas prices before reorganizing their on-chain portfolios, this is not a luxury that large entities can afford. 

This is where Oiler’s on-chain derivatives options come in.

Hedging is a necessity for many businesses. In essence, hedging is purchasing insurance on the future of undecided outcomes. A farmer, for example, might hedge his next crop by buying an option from a market maker granting him a significant sum if no rain falls in the next year. If rain does fall and he has a successful harvest, the option’s price can be seen as insurance. In the unlikely case it doesn’t, the money he makes from his option will cover his losses.

Oiler Network will provide a marketplace for these options to help hedge against network shocks.

 Anyone will be able to write and trade options to hedge high gas fees, suddenly falling hashrate and protect their businesses from unpredictable events. These options will be traded on-chain, providing guarantees of equality, availability, and trustless transfer that traditional finance can’t match.

Removing Oracles

One of Oiler’s key design decisions was to forgo oracles. Oracles are third-party services that provide external information to smart contracts. This could be price information, payment completion, the sale of a physical asset, outside temperature, or even the number of votes a political candidate received. These oracles relay information to a smart-contract program which then executes its code.

Visual representation of Oracle data feeds informing smart contracts on various blockchains. Source: Chainlink.
Visual representation of Oracle data feeds informing smart contracts on various blockchains. Source: Chainlink.

Oracles are key to improving the utility of smart contracts and help bridge DeFi to the real world. However, their data feeds can be corrupted and can quickly become a dangerous vulnerability for smart contracts. 


The Oracle Problem refers to the issue created by the potential falsification of data in the real world influencing an otherwise well-functioning smart contract. 

These can be exploited for profit by savvy traders, as when a user manipulated the feed of bZx’s price oracle by crashing the price of WBTC after opening a BTC short on their platform. But oracles can also be hacked, as when more than $100 million worth of assets were liquidated on Compound following an oracle exploit.

In an interview with Crypto Briefing’s team, the founder of Oiler Network Tomasz Stanczak explained that the vision for Oiler, at the moment, does not include oracles. As Oiler offers options on blockchain parameters, they do not need to use an oracle to keep smart contracts informed of current gas prices. Parameters can all be retrieved directly from the Ethereum blockchain without the need for an oracle.

This design decision removes the risk of oracle exploits and improves the value proposition of Oiler for their bigger clients. Exchanges, L2 providers, or any entity spending large sums regularly on gas fees can’t expose themselves to the same kinds of risk retail users do. 

Managing Risks: A Whale Game

In many ways, Oiler Network is a niche product. For most users, hedging gas prices or network shocks is not worth their time as they enjoy greater flexibility in the market. Oiler’s main clients are those who can’t. Wallet operators, for example, pay high gas fees every time they create a new wallet. In the case of Argent, this cost is reflected in the first deposit a user makes in their new wallets.

Layer 2 providers pay high gas fees for any transfer of funds between the Ethereum blockchain and their sidechain. Polygon partly subsidizes these transfer fees and, depending on gas prices, spends a fortune on them. Perhaps no single centralized entity is as affected by these high prices as exchanges like Binance or FTX. If they subsidize any withdrawal to addresses on the Ethereum blockchain, they’re vulnerable to high gas prices.

Average transaction fee on Ethereum in USD. Source: Ycharts.
Average transaction fee on Ethereum in USD. Source: Ycharts.

The current bull run has been dominated by a new variety of investors, led by the likes of MicroStrategy or Tesla. Companies like this need much more robust insurance in case of drastic changes in the health of the blockchain. 

These late entrants to the blockchain space will be more risk-averse than the current DeFi community, which prides itself on being true “degens.” The more they can offset risks beyond their control, the more likely they are to invest in blockchain technology.

When Visa declared they would settle digital currency transactions on the Ethereum blockchain, they accepted the risk of a sudden surge in gas fees or a drop in the hashrate securing Ethereum. The instruments developed by Oiler Network could allow a company like Visa to continue in this direction and remove some of the risks associated with the new system.

Oiler isn’t the only project who understands the risks posed by high gas fees and network changes.

Oiler’s main competitor when it comes to hedging high gas prices is the famous gas tokens. These gas tokens store gas inside smart contracts, which, when destroyed, allow users to make transactions on the blockchain. This is another option to hedge high gas prices, but Ethereum founder Vitalik Buterin recently proposed to remove the possibility for gas refunds using these tokens. 

EIP 1559: Providing New Parameters for Oiler

Oiler Network is a very technical product whose foundation is blockchain parameters. If Oiler can know something about the blockchain directly, then they can offer trading for it. One of the main features of EIP 1559, the upgrade to Ethereum’s network expected in July, will be to provide many more visible blockchain parameters.

Most importantly, the introduction of gas-burning will remove the possibility for miners to manipulate gas prices and offer a new indicator. This base fee will be burned with every transaction. While miners can still manipulate prices right now by artificially driving the price of gas up and recuperating it, gas-burning will provide a fixed-per-block base fee which will truthfully attest to the current network usage.

This will be another blockchain parameter for which Oiler can provide a market. Ethereum 2.0, the much-expected transition to Proof-of-Stake, could also be a catalyst for Oiler’s growth.

“Gas prices will stay in Ethereum 2.0. Ethereum 2.0 will be a more complex protocol, so that makes Oiler more exciting. The more blockchain parameters we can check, the more options we can create for our users,” said founder Tomasz Stanczak.

Stanczak is well-placed to bring this project to fruition. Before joining the crypto space, he worked as a software developer at the Chicago Mercantile Exchange (CME) and as a technology lead at CitiBank. Unlike many crypto-natives, these experiences offer insight into how larger organizations assess risk before investing in products. This also explains Oiler’s commitment to such a specific type of crypto user. 

He has also worked closely with the Ethereum network itself. In 2017, Stanczak and his team began building Nethermind. It doubles as an Ethereum client to help developers build on top of the network and a data marketplace for interested parties. 


After Nethermind, he has also contributed research and code to the Flashbots research group. Flashbots is a small group of researchers and technologists working to shed light on the “Dark Forest” of on-chain activity. They are specifically focused on the subject of Miner Extractable Value (MEV) and its “negative externalities.” 

The Flasbots team provides the following as just one example of MEV: 

“One example of such structural arbitrage opportunities are Uniswap price arbitrage trades: when a Uniswap pool’s assets become mispriced, a profit opportunity is created to arbitrage the Uniswap pool back to parity with other trading venues. Of course, rather than letting the trader pay them a transaction fee for the privilege of collecting the arb profit, a miner could simply decide to run this strategy themselves.”

For a deeper dive into MEV, readers are advised to read Crypto Briefing’s feature on ArcherDAO. 

From traditional finance to mitigating the impact of MEV, all of these experiences suggest that Stanczak has a firm grasp of the niche he and his team are exploring. Whether the market agrees, however, remains to be seen. 

The project already enjoys support from many long-time crypto users, developers, and investors. 


Final Thoughts: Oiler Network

Retail users are acutely aware of the prohibitive costs of using the Ethereum network. 

Still, they are relatively shielded from these costs. Instead of rebalancing when the network is expensive, they can wait for costs to drop or risk sending a slow transaction. In either case, the stakes are much lower. 

For larger users, this is not the case. If one’s business model hinges on performing on-chain operations at will, then gas costs become a much more important issue. This challenge is not lost on many emerging projects. 

Like Oiler Network, gas tokens, synthetic gas futures, and other varieties of hedging mechanisms have emerged. One of the key differences between Oiler and its competition is that it does not rely on an oracle. Crypto-specific businesses are as aware of oracle vulnerabilities as they are gas costs. Thus a solution that removes this vulnerability may be extremely enticing.

In theory, this makes Oiler a promising solution for this demographic. The project is, however, still very nascent. They have only recently launched their native OIL token and a staking feature for interested users. 

The project’s success hinges on the continued growth of Ethereum, whether its technical differences are seen as an advantage by its target market, and, of course, execution. 

Disclosure: Both authors of this piece held ETH at the time of writing. 

This news was brought to you by ANKR, our preferred DeFi Partner.


Share this article



The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.

You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.

See full terms and conditions.



DeFi Project Spotlight: Archer DAO and Ethereum’s “Dark Forest”

Archer DAO is building a community of on-chain analysts to generate new revenue streams for Ethereum miners. Though nascent, the project has already gained attention within the DeFi community due…

DeFi Project Spotlight: Degenerative Finance and uGas Ethereum Futures

uGas is the first project launched by Degenerative Finance, itself a partnership between last summer’s popular DeFi platform, YAM Finance, and UMA Protocol. The uGas offering will be the focus…

What Are Non-Fungible Tokens (NFTs)?

Tokenization is well-suited for commodities like fiat currencies, gold, and physical land. A fungible asset’s representation on blockchain makes commodities tradable 24/7 via borderless and frictionless transactions. Fungible goods are…

DeFi Protocol Oiler Network Releases Token OIL on Balancer

The blockchain native derivatives platform is distributing 2% of its overall supply through a Balancer declining auction, often referred to as liquidity bootstrapping pool or LBP. Over the next 48…



Source

Tagged : / / / / / /
Bitcoin (BTC) $ 26,598.13 0.08%
Ethereum (ETH) $ 1,597.11 0.39%
Litecoin (LTC) $ 64.85 0.48%
Bitcoin Cash (BCH) $ 209.07 0.32%