Our DeFi experts demystify and explain decentralized finance, how it works, and how to capitalize on its growth potential.
What Is TradFi
TradFi, short for traditional finance, refers to the mainstream financial system that consists of retail banks, commercial banks, investment banks, other financial institutions, and fintech companies. A few popular examples of TradFi institutions are Goldman Sachs, JP Morgan, Morgan Stanley, Bank of America, PayPal, and Wise. They are mostly brick-and-mortar organizations that offer banking and financial services which have been around for years. Although most TradFi providers have digitized their operations and services, they are characterized by a high degree of centralization, government regulations, compliance, KYC, and high barriers to entry. As a new wave of non-traditional finance emerges, it’s important to define TradFi and understand how it stands apart. How Is TradFi Regulated? TradFi is regulated by the government and the central bank in most countries. TradFi institutions have to comply with the rules and regulations mandated by the authorities. Depending on the sector and scale of business, the tax requirements vary. It is also mandatory for TradFi institutions to submit audit reports annually. While the red tape is often too stringent for new players to enter, it is also efficient in nurturing the growth of the economy in the desired course. This is given that the policymakers know what they’re doing. For example, the government wants to empower women in rural areas. As a means, the central bank can ask banks to offer loans to rural women at low-interest rates. The regulations help curb money laundering, corruption, and terrorism, among other illicit activities. How TradFi compares to other Finance DeFi vs. TradFi DeFi (decentralized finance) refers to the peer-to-peer financial infrastructure built on blockchains. DeFi uses a distributed ledger system to verify and authorize transactions, removing middlemen like banks and governments from the picture. Let’s take a quick look at the key differences between the two: In DeFi, a blockchain protocol or a community issues money. In TradFi, the central bank issues money.In DeFi, smart contracts authorize the transaction of money between two parties. In TradFi, banks facilitate the transactions. Anybody can give/get DeFi loans as long as they fulfill the collateralization requirements. Banks offer traditional sources of finance after checking the applicant’s financial statements and credit score. You can start investing on DeFi platforms in a few steps. With digitization, TradFi investing has opened up to a large section of people as well. But it still requires KYC and documentation. CeFi vs. TradFi CeFi (centralized finance) merges the yield benefits of DeFi with the user experience and security of TradFi. It offers opportunities to invest in cryptocurrencies and digital assets using crypto-based accounts that are similar to traditional savings accounts. However, the APYs vary significantly. On CeFi platforms, you can borrow money against your crypto holdings, just like how you would avail a collateral-backed loan from a bank. Unlike TradFi, this requires little to no paperwork. While TradFi deposits are sometimes eligible for government-backed insurance, that is not the case with CeFi deposits. Being a relatively new sector, it is riskier. Traditional Finance vs. Behavioral Finance Behavioral finance studies the psychological influences and biases behind the behavior of investors, financial practitioners, and other market participants. Traditional Finance and Entrepreneurial Finance Entrepreneurial finance consists of the resource allocation for new ventures, addressing some of the key challenges faced by entrepreneurs like fundraising and valuation. What Role Does TradFi Have In Cryptocurrency? Industries have to keep pace with the latest technology to prove themselves relevant in the long run. Blockchain and cryptocurrencies mark today’s biggest financial revolution. TradFi organizations and platforms, including banks, will have no choice but to adopt cryptocurrencies eventually, bringing them to the mainstream. Since TradFi is under the watch of the government, this will pave the way for the positive regulation of the crypto industry. In key sectors like insurance and lending, they can work together, blending innovation, accountability, and speed. Benefits of TradFi Only businesses with licenses and accreditation can provide TradFi services. In the event they lapse, customers can raise complaints and get compensation. The red tape makes it difficult for scammers and fraudulent participants to get in. TradFi cooperates with the government to track illegal spending and investments. In DeFi, this will be hard as transactions are anonymous. Governments can implement developmental policies by joining hands with TradFi institutions. TradFi has its set of limitations. The excess regulations and government intervention hamper growth and innovation in the industry. It also prevents a large section of people from accessing financial services. In the coming years, TradFi, blockchain technology, and cryptocurrencies will hopefully find a common ground to build an advanced financial infrastructure feasible for all.
Decentralized finance5 Best CryptoPunk NFTs to Buy in 2023Are you considering investing in CryptoPunk non-fungible tokens (NFTs) this year? If so, you're not alone. With the rapidly rising popularity of NFTs, more and more investors have been taking advantage of their solid potential for profits. But, with the countless number of options out there on various different marketplaces, it can be tough to know which CryptoPunks are worth the investment, and which ones should be ignored. To help you make an informed and precise decision, we've put together a list of the 5 best CryptoPunks for 2023 in no particular order that have the best cost-to-return ratio potential. Read on to discover what these gems could mean for your portfolio as a potential collector of rare digital art! » Learn how to buy a CryptoPunk NFT 1. CryptoPunk #9818 As of early 2023, CryptoPunk #9818 is the fourth most-viewed and the fourth most-favorited NFT on OpenSea from the entire CryptoPunk collection - and yet, it has never been sold. Snatching it up before someone else does seems like a good idea if you’re looking to make a solid buck down the road. Truth be told, the fact that so many potential investors have shown interest in it and no one actually bought it is amazing. The first buyer who gets it will get a great investment opportunity in their hands, as people are already lining up for it. 2. CryptoPunk #7523 There are only nine CryptoPunk alien NFTs, and CryptoPunk #7523 is one of them. More importantly, it has been viewed over 15k times on OpenSea, and it hasn’t been sold yet. Namely, alien CryptoPunks are known for their rarity, and the four that were already sold reached quite high prices. The cheapest one was sold for 605 ETH (approximately $700,000 - $800,000), while the most expensive one cost a whopping 8,000 ETH, which is more than $10 million. If you are interested in buying a CryptoPunk alien, CryptoPunk #7523 is the best choice at the moment - and a great investment opportunity overall. 3. CryptoPunk #2711 In addition to the CryptoPunk aliens, the CryptoPunk apes are also a rare bunch that tends to get their investors large profits. Specifically, the CryptoPunk #2711 seems to be quite an interesting opportunity because it is among the more popular apes available on the OpenSea market - yet, its last sale was only 1 ETH. Considering just how high the prices of other CryptoPunk ape NFTs get, 1 ETH is clearly significantly below its real value, so buying it can prove to be quite beneficial. 4. CryptoPunk #7224 Similarly to CryptoPunk #9818, there is data that indicates that CryptoPunk #7224 sparks interest among many investors, but for some reason, it hasn't been sold yet. It is also among the most favorited and most viewed NFTs on OpenSea from the entire CryptoPunk collection, so it is only a matter of time before someone buys it. Investing in this NFT would be a smart move because it wouldn’t take too long before you get a chance to sell it and make a solid amount of cash in the process. 5. CryptoPunk #1119 The last entry on our short list is only for big rollers who can afford making a hefty investment. CryptoPunk #1119 has been sold three times by now, and each consecutive purchase was at least 100 ETH more expensive than the last one. Considering that it is a zombie CryptoPunk, its last price of 400 ETH ($850,000) is not its final one, and there is still room for profit there. The sharks who can afford buying this NFT will surely turn a profit next time they sell it. Zombie NFTs usually sell at six-digit figures, and there is potential they even reach a 7-digit price, so the potential for profit on CryptoPunk #1119 is amazing. Key Takeaway CryptoPunk NFTs can be a great way to make a solid amount of money, and they represent one of the best digital art collections to invest in. The five CryptoPunks mentioned above have the best cost-to-return ratio potential, and if you are interested in investing in them, now is the time to do it before someone else does. » See more about why NFTs are a good investment
Decentralized financeTop 6 Crypto Venture Capital FirmsIn traditional finance, venture capitalist (VC) funding refers to a group of investors that invest in the early development stages of a company as a way to earn significant profits while it grows. Similarly, crypto VC refers to the process of investing in a cryptocurrency venture before it reaches the masses and grows in both popularity and value. Of course, these crypto VC firms evaluate the project's initiative and potential, while estimating their growth in the future to get a great return. VC firms continuously prosper and are always investing in new projects, so it can be quite beneficial to know who these firms are and their top picks. Being familiar with a VC firm's investment can make a world of difference for a retail investor, as following their steps might help you continuously outperform the market. Keep in mind that these are multi-billion dollar companies that have years of experience in the market, so it's safe to assume they understand how the market works. Now, with the basics out of the way, let's go over the top crypto VC firms in no particular order and learn more about them. 1. AU21 Capital Area of Focus—Cryptocurrency projects, artificial intelligence startups, and financial software solutions.Blockchain & Crypto Deals—$5 million in PaxWorld, $2 million in Satoshi Games, $1 million in the Cryption Network.Notable Investments—Aragon, Kadena, and Solana. Founded in 2017, AU21 Capital is one of the most active & profitable crypto VCs with investments in a variety of projects. With offices in San Francisco and London, this firm has invested in notable successful startups such as Aragon, Kadena, and Solana. Many of these startups have since then exploded into multi-billion dollar projects, making AU21 a ton of profits along the way. » Looking to invest? Learn about the best crypto DAO projects you could join 2. Andreesen Horowitz -a16z Area of Focus—Financial software solutions, social platforms, and Web3 & blockchain projects.Blockchain & Crypto Deals—Over $4 billion invested in a wide variety of crypto & Web3 companies.Notable Investments—Solana, Lido, MakerDAO, and Compound Andreesen Horowitz is a Silicon Valley venture capital firm founded back in 2009 that primarily invests in tech & crypto companies, but also in FinTech (financial technologies), iGaming, healthcare, and enterprises. This VC firm has been one of the largest investors in the crypto space, investing a total of $4.5 billion into a wide variety of projects in the space. Founded by two entrepreneurs Marc Andreessen and Ben Horowitz, the company has been successful for over a decade now. 3. Coinbase Ventures Area of Focus—Cryptocurrency projects and blockchain-based startups.Blockchain & Crypto Deals—$2 million in Compound, $3 million in DeFi Money Market, $10 million in TrustToken.Notable Investments—Dapper Labs, OpenSea, Uniswap, NEAR, and 0x Protocol Since it was founded in 2018, Coinbase Ventures has been the venture arm of Coinbase, which is one of the most popular crypto exchanges. This VC firm invests in projects that align with Coinbase's mission and vision of creating an open financial system for everyone. As such, it primarily focuses on cryptocurrency projects and blockchain-based startups that are revolutionizing the industry. » Read more about creating crypto exchanges 4. Binance Labs Area of Focus—Blockchain & cryptocurrency projects, security tokens, and blockchain-enabled software solutions.Blockchain & Crypto Deals—$1 million in PoolTogether, $2 million in Republic Protocol, $3 million in TrustToken.Notable Investments—DappRadar, CertiK, Neo Global Capital, and BakerySwap. Binance Labs is a venture arm of Binance, one of the largest cryptocurrency exchanges in the world. Founded in 2017, this VC firm focuses its investments on blockchain projects that will help drive mass adoption and further enhance the industry. It has invested in a variety of startups such as DappRadar, CertiK, Neo Global Capital, and BakerySwap. It has also invested in security tokens and blockchain-enabled software solutions. 5. Jump Crypto Area of Focus—Cryptocurrency projects, blockchain-based software solutions, and Web3 startups. Blockchain & Crypto Deals—$1 million in Kadena, $2 million in OpenLaw, $4 million in The Graph. Notable Investments—Algorand, Dapper Labs, Dharma Protocol, and Chainlink. Jump Capital is a venture capital firm founded in 2012 with offices in Chicago and San Francisco. This VC firm focuses its investments on cryptocurrency projects, blockchain-based software solutions, and Web3 startups. So far, it has invested over $20 million in various projects such as Algorand, Dapper Labs, Dharma Protocol, and Chainlink. 6. Digital Currency Group Area of Focus—Cryptocurrency & blockchain-based software solutions. Blockchain & Crypto Deals—$2 million in Blockstream, $4 million in Chainalysis, and $5 million in Ripple. Notable Investments—Bitpagos, OpenNode, Blockstream, and Genesis Trading. Digital Currency Group is a venture capital firm founded in 2015 that focuses on investments in cryptocurrency & blockchain-based software solutions. It has invested over $200 million into various startups such as Bitpagos, OpenNode, Blockstream, and Genesis Trading. It has also invested in Ripple with a $5 million investment in the company. This VC firm has also invested in some of the most promising projects in the industry, including Blockstream and Chainalysis. With its long history of investing in the industry, Digital Currency Group has become a leader in venture capital investment in cryptocurrency and blockchain technology. Final Thoughts Cryptocurrency and blockchain technology are changing the way people transact and view money. With more venture capital firms investing in these projects, there is bound to be a surge of new innovations and opportunities for entrepreneurs, investors, and users alike. Coinbase Ventures, Binance Labs, Jump Capital, and Digital Currency Group are just some of the many VC firms that are investing heavily in the industry. Each has its own areas of focus and notable investments, but they all share a common goal—to make cryptocurrency and blockchain technology accessible to everyone.
Decentralized financeTop 5 Most Expensive CryptoPunk NFTsAre you a crypto-punk? If you've been following the crypto-world recently, you've probably noticed that there are quite a few digital assets out there—and some of them are pretty expensive. The most expensive crypto-punk NFTs on the market right now are worth millions of dollars. So if you're looking to make a quick buck on the blockchain, take inspiration from 5 of the most expensive CryptoPunk NFTs. » Learn more about NFTs in the metaverse 1. CryptoPunk #5822 (23.58M USD) Earlier in 2022, Deepak Thapliyal, the CEO of tech company Chain, purchased Punk #5822 for $23.58 million, the most ever paid for a digital avatar in CryptoKitties' history. The Alien Punk he bought is very rare—there are only nine such NFTs in existence among all players and collections on the platform. In addition, the avatar is wearing a bandana, a rare trait shared by 5% of collectible NFTs. This makes it even more valuable than its rarity would suggest. The value of the item, then, is not just in its rarity but also in its appeal to all players on CryptoKitties' platform who want to own one of these avatars. 2. CryptoPunk #7804 (7.56M USD) This Alien Punk, pricing around 7.56 million USD, is one of the rarest collectibles, with only 3% sharing its Cap Forward trait. In addition, it has Small Shades and a Pipe – both traits that are rarely seen on CryptoPunks NFTs. All of these traits combined make PFPs very desirable. This makes the cards even more valuable than they might be due solely to their rarity. 3. CryptoPunk #8857 (6.64M USD) This Punk NFT, with a price tag of 6.64 million USD, features the rare trait of 3D Glasses and Wild Hair, which look good on any Zombie, whether they are Deadhead or Brain Eater. Given that only 0.88% of NFT collectibles are Zombie types, it’s no wonder this CryptoPunk NFT was valued at 2,000 ETH by the previous owner, a price tag likely to be out of reach for most investors. However, if you have a few million dollars to spare and are looking for an investment opportunity that’s almost guaranteed to go up in value, then this is one of the best NFTs on the market today. 4. CryptoPunk #7252 (5.33M USD) This Zombie CryptoPunks NFT sold for 1,600 ETH back in August 2021 and is currently priced at around 5.33 million USD. The combination of Crazy Hair, a gold Earring, and Chinstrap traits make it visually compatible and thus more expensive than other collectible zombies with one or two traits. Zombie Punks are more expensive than other collectibles because they are very hard to find. They are the most sought-after of all the NFTs and do not come up for sale very often. If you want to get into the CryptoPunks game and want a chance to be one of the first people in your town to own a Zombie CryptoPunk, then this is your best bet. » Not sure where to find NFTs? Read about the best NFT marketplaces 5. CryptoPunk #2338 (4.35M USD) This Punk #2338, sold for a price of 1,500 ETH in August 2021, is a Zombie with Mohawk Thin accessories. This digital asset had three previous owners; however, none of those sales ever exceeded 3.5 ETH. It now prices at around 4.35 million USD. This NFT collectible is one of the most sought-after NFTs in the game and is a great investment if you want to get into the CryptoPunks game. Final Words The most expensive CryptoPunk NFTs are among the rarest collectibles on the market. The original collection, created by Larva Labs and now owned by Yuga Labs, is widely regarded as one of the best in NFT history. One of the first non-fungible tokens to gain such widespread attention, it is often referred to as the first proof-of-concept for Project Finance Platforms (PFP). CryptoPunks is, no doubt, among the most expensive and stable NFT collections. You can find some of the most iconic celebrities, whales (people with a large amount of cryptocurrency), and artists. In conclusion, CryptoPunks are worth investing in if you're okay with spending a little money. If you can spend more than that on individual collectibles, then your investment will be even better off when it comes time to sell them back. » Still wondering if you should invest? Read more about why NFTs are a good investment
Decentralized financeMoonbirds: The NFT Collector’s Latest ObsessionAs of early 2023, Moonbird NFTs have become the latest craze in the crypto world. These digital owls are causing a lot of hype, and there are many reasons why the demand for them is so big. In addition to being a part of an exclusive collection of only 10,000 unique pieces of art, Moonbirds also have some amazing features that make them stand out from the competition. The investors who grab hold of these amazing collectibles can look forward to a number of benefits, including access to PROOF Collective’s private Discord channel, early access to Project Highrise, and plenty of rewards through the unique “Nesting” system. Today’s article will provide you with all the necessary insights regarding Moonbirds, so stick around to learn more. » Learn more about some valuable utilities that come with Moonbirds Everything You Need to Know About Moonbirds The Moonbird collection consists of exactly 10,000 pixel-art owls, with each one being slightly different than the other. All of them have different colors and accessories that make them unique, and honestly - quite loveable. In addition to their authenticity and charm, the true value of these cute little birds comes from the unique "Nesting" mechanism. Namely, each Moonbird comes with a nest, which can be upgraded and filled with rewards or bonuses. The longer the owner keeps their Moonbird in their nest (in other words, holds on to their NFT), the greater the rewards become. Specifically, there are three tiers of the Nesting System, each with its own type of rewards. First, Tier 1 offers access to the PROOF Collective’s private Discord server as well as early access to Project Highrise. Tier 2 and 3 then provide even more exclusive rewards, such as special badges, the ability to design new owls, and even receive an NFT of their own design. If an owner one day decides it is time for the Moonbird to leave its nest, they can sell it. In that case, the background of the NFT is wiped clean, and it can carry on its new journey in someone else’s nest. Who Is Behind the Moonbirds? The Moonbird NFTs are the first of their kind, created by the PROOF Collective - a group of experienced developers, entrepreneurs, and artists. PROOF Collective is backed by some of the world’s leading venture capitalists and investors, meaning that there are plenty of resources at their disposal. It is their mission to turn digital artwork into a viable asset, and it would seem that the Moonbirds are taking them closer to fulfilling this goal. Besides the NFTs, PROOF Collective also has many other projects in the works, including Project Highrise and several virtual reality games. Right now, we can only speculate what the effects of their future projects will be, but it is safe to say that, with the Moonbirds, they are definitely on the right track. How are the 10,000 Moonbirds Distributed? The PROOF Collective team decided that each team member will get to keep two Moonbirds for themselves, while 7,875 Moobirds were distributed through a raffle. The team collected 19,687 ETH, or close to $60 million, in the initial public sale of the NFTs. After the first sales, the total amount raised from the Moonbird NFTs reached over 100,000 ETH, or about $300 million. The remaining 125 Moonbirds are held by the PROOF Collective team for marketing and promotional activities. » Interested in NFT trading? Read more about the best NFT marketplaces So, Why Are Moonbirds so Popular? Besides their exclusivity and undeniable charm, the incentives and features Moonbird NFTs offer are hard to resist - and are frankly unmatched by the competition. In addition to the aforementioned “Nesting” system, there are many other benefits that make Moonbirds a force to be reckoned with. Here are some: Access to PROOF Collective’s Private Discord Channel In simple terms, this is the perfect place to share ideas, get exclusive content, and discuss strategies. Additionally, Moonbird owners can expect plenty of organized events to take place in this private channel, in which they can win airdrops and other valuable prizes. Early Access to Project Highrise This is an upcoming virtual reality game that will take place in the Metaverse. Moonbird owners will be one of the first in the world to see the game, and they will get to play it before anyone else. Unique “Nesting” System With Three Tiers of Rewards This includes special badges, the ability for holders to design their own NFTs, but also the chance to get merchandise, airdrops, and other valuable prizes. » Discover more about NFTs in the Metaverse Investing in Moonbird NFTs Even though the sales numbers of Moonbirds have been on the rise for a while now, they still haven't reached their peak. Statistics show that second-hand sales of Moonbird NFTs continue to grow with every passing day, which could indicate that the NFTs are still a good investment despite the recent bear market. According to recent reports, the total volume generated by the sales of Moonbirds has reached 175,811 ETH, or over $300 million. Considering that these figures keep growing each day, it's safe to assume that Moonbird NFTs are still a great investment opportunity. In early December 2022, a Moonbird NFT was sold for the 226th time and generated a total volume of over $2.5 million. So, if you're looking to invest in NFTs, Moonbirds are almost definitely worth your time and money. Key Takeaways Moonbird NFTs are unique digital assets created by the PROOF Collective, with each of them having its own story to tell. The Moonbirds have been gaining popularity over the last few months due to their exclusive features, such as the “Nesting” system and early access to Project Highrise. Furthermore, the figures generated by recent sales suggest that Moonbird NFTs are still a great investment opportunity. So, if you're looking for a way to invest in NFTs, Moonbirds are definitely worth your time and money. » Thinking about investing? Read more about why NFTs can be profitable
Decentralized financeAPT Token: What to Know About the New Kid on the BlockThe Aptos cryptocurrency program has gained a lot of media coverage. While some experts argue that blockchain technology has yet to find its "killer app," others believe that this platform is sustainable enough to play a significant role in future data security management. Whatever your position on the topic, it's impossible to deny that Aptos has caught the interest of crypto fans worldwide. The project has also already obtained funding from several venture capital firms, which is significant for any new coin, even though it is still in its early phases. This article will cover what APT is, the controversy it has caused, and the token's predictions. » Read more about tokens in cryptocurrency APT in Brief The layer 1 blockchain known as Aptos was created by Aptos Labs, which Mo Shaikh and Avery Ching founded. Both were previous employees of Meta. Shaikh and Ching spent years working as senior developers in the blockchain sector, and they built Aptos using the Move programming language. Scalability, dependability, safety, and upgradeability are the foundations of the Aptos blockchain. The program aims to integrate cutting-edge ideas for performance optimization, system security, consensus mechanisms—and smart contract designs—to change the layer 1 sector. Web3 is an all-inclusive blockchain system that APT is developing, intending to increase the adoption of this technology by the general public. Web2 is supported by cloud infrastructure that APT wants to recreate in a decentralized manner. Additionally, Aptos intends to create a DApp ecosystem that is geared at resolving real problems. Controversy Behind APT Aptos released an overview of its token distribution and reward programs following allegations of a weak start and community criticism concerning the percentage of its native APT tokens held by private investors. A total of 1 billion Aptos tokens were available at the mainnet's launch. The Aptos Foundation and private investors held the remaining tokens, of which 510 million were distributed to community members and 190 million to core developers. 410 million tokens have been secured by the Aptos Foundation, which will gradually distribute them over the next ten years. Initially, over 125 million APT will be made available to fund ecosystem projects, grants, and other community growth activities; the Foundation category will receive a reduced 5 million APT. Aptos Labs own 100 million of the 1 billion tokens in circulation. Private investors and current core contributors will have four years to sell their tokens, starting with the mainnet launch. According to Aptos, stakers who support the network can receive incentives. The reward rate will be adjusted at each epoch, or collection of blocks mined by miners and is currently listed at 7% annually. Until it hits a lower bound of 3.25%, the maximum reward rate is reduced by 1.5% annually. All transaction costs, though, are currently burned. This will change depending on the Aptos community's choices to influence its future development. Although most of the community had mixed feelings about the token strategy, many people criticized the number of tokens given to developers. Aptos Token Predictions Now that Aptos Token (APT) has been released, it's time to see what we can expect from this cryptocurrency. Here are some predictions to consider: At the end of December 2022, Aptos is predicted to be worth around 7 USD. 7.67 USD is the highest value Aptos will ever reach in this time frame.APT is expected to have a bullish year in 2023, establishing its true value. Its predicted price should fall between 5.44 USD to 14.61 USD.The cost of APT is then expected to rise dramatically in 2024. Once it starts heading upwards, the token is expected to see a 2.5X increase, with a predicted maximum and minimum price of 13.55 USD and 33, respectively. Final Words Although the APT Token is a newcomer to the field, its developers have extensive knowledge of blockchain technology. Aptos has generated a great deal of media interest while in its early phases. They have already received funding from several venture capital firms, partly because of Move's use in the project's development and partly due to the layer 1 blockchain technology. Aptos wants to build a blockchain platform that can handle lots of transactions and fast processing. This will make it possible for Aptos developers to create a wide range of decentralized applications that offer practical solutions.
DaosThe Role of DAOs in Decentralizing Venture CapitalWith the crypto space embracing wider adoption and new projects appearing relatively often, it's apparent that decentralized autonomous organizations(DAO) are here to stay. Namely, the DAO market has grown significantly in recent years, with the number of participants increasing by over 400% since 2021. The estimations say that the approximate growth for 2022 would be around 300%. This influx of new investors has been driven by many factors, with the biggest ones being the recent technological advances, including artificial intelligence (AI) and the Internet of Things (IoT). These new technologies have made it much easier for people to access venture capital investments by significantly simplifying the process. As a result, DAOs have become increasingly important players in the world of venture capital. » Check out the best crypto DAO projects you could join in the future What are DAOs? A DAO is an autonomous entity that operates without any central authority or specific management structure. It is typically composed of a group of individuals who work together via smart contracts on decentralized platforms, like Ethereum, to facilitate various transactions and investments. The members are usually granted voting rights that allow them to decide how the DAO is managed and which investments it should pursue. Once a new idea is proposed, you can have a bigger or smaller influence on how the project will evolve depending on the size of your stake in the DAO. The primary purpose of a DAO is to eliminate the need for a centralized decision-making body, such as a board of directors or executive team. This allows for more distributed decision-making and can help reduce costs associated with having an intermediary. Moreover, DAOs can also provide investors with liquidity by allowing them to sell their holdings at any time without having to wait for traditional capital markets like banks or venture capitalists to open up again. Let's understand investment DAOs better by taking a look at an example. One of the most popular investment DAOs out there is BitDAO—a project that supports a broad range of assets in the crypto space, including cryptocurrencies, NFTs, and DeFi tokens. The members of the project facilitate the research and development of new projects that have the potential to grow. Then, they can provide liquidity and direct investments. As is the case with DAOs, the holders of the project's governance token BIT can vote on the projects the DAO should invest in and provide liquidity to, making it entirely community-driven and democratic. Investment DAOs Investment DAOs are specifically designed for investing in startups and other venture capital opportunities. These organizations use algorithms and smart contracts on blockchain platforms to evaluate potential investments and even offer investment advice. By using a distributed network of investors, these DAOs are able to reduce the costs associated with traditional venture capital investments and provide access to opportunities that may not have been available previously. 3 Benefits of Investment DAOs Over VCs Both traditional venture capital models and DAOs can be good for investing, but it's worth mentioning that a DAO has several benefits over its VC counterpart. Let's take a look at the three biggest ones: 1. They Are Decentralized Unlike traditional venture capitalist firms, which are bound by certain criteria and conditions before making an investment, members of a DAO operate without any centralized authority. This eliminates the need for cumbersome regulatory structures and also allows for much faster decision-making processes that are less influenced by human biases. There's a saying that, in DAOs, "code is law," so there can never be any conflicts of interest or external pressure. Thus, the result is a more efficient system with far fewer entry barriers for investors. 2. DAOs Are Open to All Traditional venture capital firms often have high minimum thresholds to enter, and they usually require potential investors to have deep pockets in order to participate. In contrast, the vast majority of investment DAOs don't have any requirements and are open to almost anyone looking to invest. As long as you have a crypto wallet with some assets, you can become a part of the project. This opens up opportunities for individuals with potentially limited resources to take part in venture capital investments. 3. Investment DAOs Enable Greater Liquidity Investment DAOs allow investors to easily sell their holdings at any time. This is a major advantage over traditional venture capitalist firms, which usually require investors to wait for certain conditions to be met before they can cash in on their investments. The result is a project with much higher liquidity, as the barriers for both entry and exit are non-existent. » Want to know more? Read about the advantages and disadvantages of DAOs 4 Risks to Consider Although a DAO offers many benefits over a traditional VC model, it's worth mentioning that DAOs aren't risk-free either. So, let's take a brief look at four potential risks of investing through an investment DAO: 1. Poorly Executed Smart Contracts Since "the code is law," investment DAOs rely heavily on smart contracts to facilitate their operations. If the code behind these contracts is flawed or buggy, it can significantly reduce the effectiveness of the organization. In some cases, it could result in security vulnerabilities. 2. Lack of Regulatory Oversight As investment DAOs operate without any centralized authority, they are not subject to traditional regulatory oversight or transparency standards. In rare cases, this can lead to potential issues such as fraud or the mismanagement of funds. 3. Limited Expertise It's worth mentioning that investment DAOs are still a relatively new concept. So, there may be limited expertise available to assess the viability and success of projects before investments are made. As of early 2023, the sector is only a couple of years old, so there hasn't been much time for the experts to gain the knowledge and experience needed to effectively evaluate and analyze projects before investing. 4. Rapid Market Changes Investment DAOs operate in a rapidly-evolving landscape, so they may not be able to keep up with the changes in the industry if their technology is outdated. Still, this usually isn't an issue, as DAOs are able to adapt quickly and overcome such barriers. How DAOs Contribute to the Decentralization of Venture Capital The impact of investment DAOs on the venture capital industry is significant. By providing access to a range of opportunities and enabling investors to quickly liquidate their holdings, they have significantly lowered the barrier for both entry and exit. As we mentioned above, these DAOs operate without a centralized authority, so they can eliminate certain biases that may exist in traditional venture capital investments. Most experts in the field believe that investment DAOs have the potential to revolutionize the venture capital industry by providing a much more democratic and efficient way for investors to access new opportunities. By allowing more people to participate in venture capital, these DAOs can provide a powerful tool for diversifying and distributing capital to businesses that may have otherwise been overlooked by traditional venture capitalists. Key Takeaways We can conclude that investment DAOs are a relatively new type of organization that enables investors to pool their resources together and invest in venture capital opportunities. This gives individuals with potentially limited resources a chance to participate in venture capital investments, provides better liquidity for investors, and eliminates certain biases present in traditional VCs. And with the modern accessibility of information, you can even learn how to start a DAO from the comfort of your home. Still, it's worth mentioning that there are some risks that should be taken into consideration before investing. So, it is important for potential investors to understand these risks fully and know how investment DAOs would fit into their portfolio strategy before participating. » Try these methods to find new DAO projects
Decentralized financeHow CBDCs & Stablecoins Can Coexist in the Crypto WorldThe world of cryptocurrencies has expanded beyond just having volatile digital assets like Bitcoin, Ethereum, or Litecoin. The introduction of stablecoins (i.e., assets that are pegged to a real-world asset) has driven a lot of traction to the space, making it easier for users to send and receive money without worrying about the underlying volatility of traditional cryptocurrencies. However, with the introduction of stablecoins, CBDCs also got introduced. Known as central bank digital currencies, CBDCs are digital tokens that are in many ways similar to stablecoins, but unlike them, they are issued by central banks instead of decentralized autonomous organizations (DAOs). Although they're built on a similar idea, they offer slightly different features and functions. Nevertheless, the question of whether one might replace the other always persists. So, can these two types of assets coexist in our future financial world? Let's find out. » Thinking about getting into stablecoins? They can be a great way to make money. Key Considerations Stablecoins are cryptocurrencies pegged to real-world assets, like USDT and USDC are pegged to the US Dollar. They are issued by decentralized autonomous organizations (DAOs), and they are mostly community-driven. CBDCs, or central bank digital currencies, also exist only digitally, but they are issued by centralized banks and regulated by government authorities. As of early 2023, they are being explored and developed by many governments worldwide. Many financial experts believe in the future of both stablecoins and CBDCs, but their future impact on the financial system is not yet known. 3 Main Differences Between Stablecoins & CBDCs Although CBDCs and stablecoins are both forms of digital money that represent another asset, there are three significant differences between them. 1. Security Stablecoins and CBDCs have different levels of security. Usually, stablecoins are thought of as much more secure since they guarantee total anonymity and privacy. On the other hand, CBDCs are more centralized and regulated by governments, which means that the users' personal details may be exposed. 2. Scalability When it comes to scalability, both asset classes offer different advantages. Stablecoins have an advantage in terms of speed, as they can be transferred between wallets almost instantly. On the other hand, CBDCs have the advantage of being backed by governments, potentially making them more reliable and trustworthy. 3. Governance As previously mentioned, the governance of stablecoins and CBDCs is quite different. Stablecoins are decentralized and issued by DAOs, while CBDCs are centralized and regulated by governments. This means that CBDC users will benefit from the support of government regulations, but their privacy may not be as protected as it would be with stablecoins. It's also worth mentioning that, as an asset class, CBDCs always represent the country's fiat currency. The Bahamas and Sweden are among the first countries to develop and implement CBDCs, with the Bahamian "Sand Dollar" and the Swedish e-Krona. Stablecoins, on the other hand, can represent both fiat cash and other assets—as is the case with PAX Gold and KAG Silver Token, which are digital assets pegged to precious metals. » If you're not sure which stablecoin to invest in, the most popular stablecoins are a good place to start. Understanding the Relationship Between Stablecoins & CBDCs It's clear that CBDCs and stablecoins are two different types of assets with distinct qualities. But how do they interact with one another in the financial world? Well, it's difficult to explicitly describe their current relationship in the financial world, primarily because they're both in the early stages of development. So, we can break down their current interaction and future by answering three key questions: 1. Are CBDCs on the Blockchain? Unlike stablecoins, CBDCs are not on the blockchain. Instead, they're a part of the traditional financial system (TradFi), which is run by centralized banks. This means that the privacy and security of CBDCs are much lower than those of stablecoins. However, this doesn't necessarily mean that CBDCs won't be integrated into blockchain systems in the future. 2. Are CBDCs Stablecoins? No, CBDCs are not stablecoins or cryptocurrencies. Like stablecoins, they are digital assets that represent a real-world asset (fiat money), but unlike stablecoins, they are issued and governed by central and legal bodies. 3. How Can CBDCs and Stablecoins Coexist? Both CBDCs and stablecoins have their advantages and drawbacks, but there is potential for them to coexist in the financial system. For example, some experts believe that CBDCs could be used as a bridge between traditional finance and digital assets like stablecoins. This would allow users to transfer funds between each asset class without having to incur the price volatility of crypto-assets. What Does the Future Hold for CBDCs & Stablecoins? Overall, it's difficult to predict the future of CBDCs and stablecoins. However, most experts agree that both asset classes have the potential to benefit the global economy in different ways. If, for example, CBDCs start implementing blockchain technology, we could see them coexisting with stablecoins, effectively creating a connection between digital and real assets. It's also worth mentioning that stablecoins are slightly more risky assets, as shown by the collapse of the Luna and UST tokens in May 2022. This begs the question—is buying stablecoins worth it? While the recent bear market might discourage users from buying stablecoins, they're still a relatively safe and practical digital asset. However, this is true only if you're buying and holding reputable stablecoins, like USDT (Tether) and USDC (USD Coin). These coins are audited and backed by reserves, which wasn't the case with algorithmic stablecoins like UST. » If you're interested in how stablecoins work, reading about the Fei protocol could offer some answers. Bottom Line Although they have some similarities, the truth is that CBDCs and stablecoins are two different asset classes with distinct qualities and drawbacks. While CBDCs are backed by governments and represent fiat currency, stablecoins can represent any type of asset—including commodities like gold and silver. The truth is that there is some potential for these two assets to coexist in the global financial system, but it's still too early to tell how they will eventually interact with each other. For now, we'll just have to wait and see.
Decentralized finance5 Undeniably Valuable Utilities Moonbird Holders Will LoveMoonbirds are the latest NFT collection of 10,000 unique collectibles that took the crypto world by storm. This exclusive, and for many “adorable,” collection was created by the popular artist and digital sculptor Kevin Rooke. Each Moonbird looks slightly different than the next, but they are all equally artistically valuable, making them highly collectible. While the majority of investors buy Moonbirds for their artistic value, it’s worth mentioning that these non-fungible tokens offer their holders an array of benefits, from exclusive access to content and rewards to enhanced customization options. With their presence on the Ethereum blockchain, Moonbird holders can rest assured they own tangible digital assets with real value that are secure and unique. So, let’s take a look at the top five undeniably valuable utilities Moonbird holders will enjoy. » Learn more about how NFTs are used in DeFi. 1. Access to PROOF’s Exclusive Discord Community After receiving ownership, Moonbird holders are granted exclusive access to the PROOF Discord community. This is a highly active and vibrant community with knowledgeable members who are always available to answer any questions you may have about Moonbirds. They also regularly host discussions about new NFTs on the market, industry updates, and events. Moreover, the owners of these exclusive NFTs can expect plenty of organized events in which they can participate and connect with fellow Moonbird holders. Of course, these also come with valuable rewards, such as airdrops and physical goods. 2. Access to the Upcoming Project Highrise In addition to being an exclusive NFT collection, the Moonbirds project is widely thought to be the first step towards a new blockchain-based game called Project Highrise. This game will involve real-time trading and personalization of Moonbirds, as well as the ability to build structures in the digital world—all taking part in the metaverse. The game will be a great way for holders of Moonbirds to truly experience the power and value of their assets, as they can trade them with other players, create buildings with them, and customize them to their own preferences. 3. Passive Income Opportunity Moonbirds are also valuable in offering holders a unique passive income opportunity. With the introduction of the PROOF smart contract, holders of Moonbirds can stake their tokens and earn rewards in ETH. This is an excellent way to generate additional income from the passive ownership of Moonbirds, and it allows the holders to diversify their portfolio. The passive income part is primarily done through the Moonbird’s “nesting” process, which allows holders to stake their tokens. The rewards they then collect can be reinvested into new Moonbirds or used to purchase more from the open market. By “nesting” their Moonbirds, holders can increase their returns significantly, as the more Moonbirds they own, the higher their staking rewards are. This provides a significant incentive for holders to collect and trade more Moonbirds, allowing them to take full advantage of this opportunity. 4. Nests Upgrades The longer a Moonbird owner holds on to their NFT, the higher their level of ownership gets. As they progress through the levels, they will gain access to exclusive rewards and content. Some of those rewards include extra customization options for their Moonbirds, and in some cases, rare skins and similar goodies. Moonbird holders also have the option to “upgrade their nests.” This grants them access to higher rewards, such as enhanced drops, the ability to personalize their Moonbirds with unique features, and even acquire rare pieces of art. » Check out the best NFT marketplaces. 5. PROOF Collective Membership Background Moonbird NFTs have a special attribute that makes them different from any other NFT on the market—their background changes based on the holder’s level of ownership. So, when a Moonbird holder purchases the token, they will receive a basic background. As they progress through the levels of ownership, this background will evolve and become more complex. When the holder sells their Moonbird, the background will reset to its original form. This ensures that each token is unique and provides an incentive to hold on to their Moonbird for a longer period of time. Final Thoughts Overall, Moonbirds are an incredibly attractive asset to own, and the potential rewards make them a great investment opportunity for anyone looking to diversify their portfolio. They can be used to generate passive income through staking, in addition to offering exclusive features such as customization options and rare skins. And just like any other NFT collection, they can be traded with other holders in the metaverse. With their tremendous value, Moonbird NFTs are the perfect way to enter the rapidly-rising blockchain gaming industry. »Wondering if NFTs are a good investment? We think so, and here's why.
Daos8 Types of DAOs You Can Create Using MoralisDAOs, or decentralized autonomous organizations, are one of the most important cornerstones of decentralized projects. With them, the control of a project is taken away from centralized institutions and individuals, and is then given in the hands of the users. This is because every member of a DAO has at least some power in the decision-making process of a project, allowing them to participate in the project by voting and proposing new features. However, not all DAOs are created equal, as there are many different types of DAOs that can be created using Moralis—a platform for creating and managing decentralized organizations. Moralis is one of the most popular services that allow teams to create a decentralized autonomous organization with any blockchain features, like smart contracts or dApps. So, let's take a look at the types of DAOs you can create with Moralis. » Learn all about creating DAO smart contracts A Quick Look at the Types of DAOs You Can Create Using Moralis Protocol DAOsVenture DAOsGrant DAOsSocial DAOsPhilanthropy DAOsCollector DAOsMedia DAOsSubDAOs 1. Protocol DAOs Protocol DAOs are decentralized autonomous organizations designed to facilitate the implementation of a protocol (a network with a specific set of rules on how data is transmitted). These DAOs are typically used to oversee and maintain projects such as open-source blockchain networks, stablecoins, and other protocols that rely on distributed ledgers. With a protocol DAO, users can vote on upgrades and changes to the project without requiring any third-party intermediaries. There are many protocol DAOs in the blockchain space right now, but the most popular ones are financial protocols like Aave, UniSwap, and SushiSwap. 2. Venture DAOs Venture DAOs are decentralized autonomous organizations made to facilitate venture capital projects. With a venture DAO, teams can manage their funds and business decisions in a secure, transparent way by leveraging smart contracts to automate the process. This ensures that all investors’ funds are distributed and managed accordingly while also allowing users to participate in the decision-making process by voting. It's worth noting that venture DAOs aren't incredibly popular, as investors still haven't caught up on the potential use cases of blockchain technology in venture capitalism and funding. Some examples of venture DAOs include Bessemer DAO and Krause House DAO. 3. Grant DAOs Grant DAOs are decentralized autonomous organizations designed to provide grants for projects. This type of DAO allows users to create and fund projects with the support of a larger community by voting on proposals. Through this process, members can decide which projects and startups should receive funding, allowing them to keep track of how funds are being used. In the majority of cases, this type of DAO is ideal for open-source projects, but in some cases, it could also be used for philanthropic initiatives (we'll further discuss philanthropic DAOs below). A key aspect to point out is that a grand DAO can effectively be a part of a larger decentralized autonomous organization. An example of a grant DAO is the Aave Grants DAO, which is a SubDAO of Aave's Protocol DAO (more on SubDAOs later). 4. Social DAOs As you can probably already guess, social DAOs are decentralized autonomous organizations designed to create and manage social networks. This type of DAO allows users to create a platform where they can interact with one another, share content, and discuss ideas in an open and secure environment. With a social DAO, users can control their own data while also preventing malicious actors from taking advantage of the network. And unlike traditional social networks, no central authority will be able to oversee the data of the users, allowing for a much higher level of privacy and security. Recently, the number of social DAOs appearing in the space has been drastically rising. The most popular example of a social DAO is the Bored Apes Yach Club, which is made up of people who own Bored Ape NFTs. » Discover all about the advantages and disadvantages of DAOs 5. Philanthropy DAOs Philanthropy DAOs are decentralized autonomous organizations developed to facilitate charitable projects. Just like with any DAO, users can vote on proposals and direct funds to support different philanthropic causes. However, unlike other types of DAOs which serve to benefit the users, these DAOs are made purely for charitable reasons. The benefit of using a DAO for philanthropic causes rather than a centralized organization (like the Red Cross) is that a DAO also allows for much greater transparency. This means better transparency when it comes to tracking the use of funds, effectively ensuring that money isn’t being misused. Additionally, philanthropy DAOs can help foster greater collaboration between individuals and organizations in order to further their causes. Some of the most popular philanthropic DAOs include Charity DAO—an organization that manages fundraisers and campaigns; and Big Green DAO—a non-profit organization that organizes grantmaking for food in the US. 6. Collector DAOs Collector DAOs are decentralized autonomous organizations created to facilitate the buying and selling of rare digital collectibles (often in the form of an NFT). This type of DAO allows users to securely buy and sell these assets without requiring any third-party help. Additionally, members can vote on proposals related to the buying and selling of these assets, ensuring that all transactions are secure and transparent. Typical examples of collector DAOs include Arts DAO and Davinci DAO, which both are used as funding projects for collectors looking to invest in NFTs and other forms of digital art. 7. Media DAOs Media DAOs are decentralized autonomous organizations designed to support the creation of media-related projects. With a media DAO, users can vote on proposals related to film and TV projects, music, art, and other types of creative works. By creating a transparent and secure platform for these projects, users can ensure that their ideas are properly funded and brought to life, while the profits are kept to the users instead of corporate organizations. Additionally, members can benefit from the collective knowledge of the entire community when participating in such projects. For example, BanklessDAO is one of the most popular media DAOs out there, seeking to drive the adoption of decentralized finance by offering educational material and coordinating media. 8. SubDAOs SubDAOs are decentralized autonomous organizations that effectively serve as an extension of a larger DAO. Namely, they allow teams to create and manage their own projects while remaining connected to the main DAO. In the majority of cases, this type of DAO is used by businesses looking to decentralize part of their operations without completely restructuring their entire organization. SubDAOs provide a secure and transparent platform for users to collaborate while still allowing the main organization to maintain control over the project. A typical example of a SubDAO is the one we mentioned above—Aave's Grants DAO. It counts as a SubDAO because it's a part of a larger ecosystem (Aave's decentralized protocol), effectively extending it and offering different features. Final Words In conclusion, Moralis allows users to create a variety of different decentralized autonomous organizations (DAOs) depending on their individual needs. From venture DAOs that facilitate fund management to media DAOs that support creative projects, users can create a variety of different DAOs to best suit their needs. With Moralis, users have the power to create secure and transparent DAOs that will help them reach their goals. » Read more about how to start a DAO