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Our DeFi experts demystify and explain decentralized finance, how it works, and how to capitalize on its growth potential.
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Decentralized finance4 Best Crypto Hot Wallets for 2023The 2022 year had a couple of devastating events in the crypto industry. In addition to the collapse of multiple projects, many exchanges also suffered great losses: some declared bankruptcy, while many faced disastrous cyber attacks. In fact, one estimate sets the total amount of money stolen from crypto hacks to be around $3 billion in 2022 alone. Even the biggest exchange, Binance, was a target of a $500 million attack in October 2022. Due to these attacks and collapses, many investors lost some or all of their assets at these exchanges, and will probably never get them back. So, with so much at stake, it's probably a good idea to start thinking about getting your own crypto DeFi wallet if you're an investor. Namely, DeFi wallets are cryptocurrency wallets that you are the sole owner of. This isn't the case with exchanges, as the keys to the wallets are never revealed to you, the investor. Regarding DeFi wallets, there are two primary types: crypto hot wallets and cold wallets. In this article, we will cover the details of different kinds of hot wallets, so you can find the right one for you. » Need more info about crypto wallets? Read our guides to crypto hot wallets and how they keep your crypto safe. 1. MetaMask MetaMask is the most popular hot wallet on the market and is primarily used to store, send, and receive Ethereum (ETH) and other ERC20 tokens. As you can already guess, MetaMask's default network is the Ethereum blockchain, but you can switch to other networks too, like Polygon, BSC, Avalanche, and more. In addition to being a wallet for storage, MetaMask also allows you to access decentralized applications (dApps) on the blockchain without running a full node. Moreover, the wallet is incredibly beginner-friendly and intuitive to use, though it can occasionally be slow. Overall, we would rate it as the best wallet for beginners that aren't looking for too many complex features. The wallet is available on all platforms, including PCs, iOS, and Android devices. » Confused about Ethereum's move to proof-of-stake? Read all about it here. 2. Coinbase Wallet The Coinbase Wallet is a hot wallet that was developed by the popular cryptocurrency exchange, Coinbase. The wallet supports a wide variety of cryptos, including: BTCBCHETHETCLTCAll ERC20 tokens Notably, the app allows you to buy, sell, and store cryptocurrencies, as well as track their prices in real-time. It's also worth mentioning that the Coinbase Wallet is quite rich with features, offering a lot more than your typical DeFi wallet. In addition to offering access to dApps, users of the Coinbase Wallet can take part in airdrops (free crypto giveaways) and acquire NFTs in the form of digital art. Just like Metamask, the wallet is available on all platforms, including PCs, iOS, and Android devices. However, the Coinbase Wallet is also more expensive to use than the other wallets on this list. Although there is no upfront fee or subscription required to use the wallet, conversion and trading fees vary from 2-4% per transaction, which can quickly add up. » Interested in NFTs? Be sure to choose from the best NFT marketplaces. 3. Trust Wallet Acquired by Binance in 2018, the Trust Wallet is a reliable and convenient DeFi wallet available on iOS and Android devices. In addition to being used for storage, the Trust Wallet can also be used to buy, sell, and trade over 1 million different coins and tokens with ease. Moreover, the wallet also has a unique "earn" feature, allowing you to stake your crypto for a modest return. Regarding the user experience of the app, the Trust Wallet is quite intuitive to use regarding its basic features. Additionally, downloading the app is free and the wallet has minimal fees and charges. Still, it's worth mentioning that the Trust Wallet isn't perfect, as it isn't available on PCs, so you can only manage your assets from a mobile device. Also, there is no concrete documentation for the app, so you'll have to resort to reading from external resources if you're a beginner in the crypto space. We can conclude that it's an overall reliable wallet as long as you have some experience in the crypto space. 4. Binance Wallet Developed by the largest cryptocurrency exchange, Binance, the Binance Wallet is built on the Binance Smart Chain (BSC). In addition to being used to buy, sell, and store cryptos on BSC, the wallet also has a cross-chain feature, allowing you to interact with other blockchains. Moreover, you can use it to interact with dApps and discover new projects, though this is limited only to projects on the BSC blockchain. Overall, the Binance Wallet is quite reliable and intuitive for experienced crypto users on both PCs and mobile devices. However, we wouldn't recommend it to absolute beginners as they can quickly get lost in the features the wallet offers. Conclusion To sum it up, the MetaMask Wallet, Coinbase Wallet, Trust Wallet, and Binance Wallet are currently the best hot wallets on the market. They all have their own unique features and benefits, so be sure to go with the right one for your needs.
Ethereum coin on a pile of other crypto coins
Decentralized financeWhat Ethereum’s Proof-Of-Stake Transfer Means for the World of CryptoIf you've been lurking in the tech space, you've probably heard of the Ethereum merge. Namely, this has been a milestone on the Ethereum development timeline for quite some time now, and it finally happened on September 15th, 2022. Namely, this upgrade is changing the crypto narrative and is poised to revolutionize the blockchain industry as a whole. So far, we've only touched the tip of the iceberg for the Ethereum merge. Now, let's dive deeper and uncover what really happened to Ethereum. What Is the Merge? The Ethereum merge was a long-awaited upgrade that changed the consensus algorithm used by Ethereum from proof-of-work (PoW) to proof-of-stake (PoS). This means that, instead of miners verifying transactions and being rewarded with ETH for their efforts, Ethereum users will now be able to validate transactions by staking. The merge is thought to be the single biggest event in blockchain history, as it's a major shift for Ethereum as a project. Not only does it make the network much more energy-efficient, but it also opens up new opportunities for users to earn a passive income for validators. After the protocol's consensus algorithm changed on September 15th, the upgrade is widely considered a success. Of course, this change didn't benefit the miners that bought expensive hardware to earn a profit while ETH was on proof-of-work. This is why a new version of Ethereum, called ETHC (ETH Classic), appeared, where miners can still use their hardware to mine coins for a profit. However, this new ETHC chain is not nearly as popular as the "merged" version of Ethereum, and at this rate, it might get discontinued altogether. Proof-Of-Stake vs. Proof-Of-Work: Why Switch? The primary reason for the switch from PoW to PoS was due to Ethereum's scalability and efficiency issues. The fact is, when a blockchain is powered by proof-of-work, it can only handle so many transactions per second before it starts to slow down. With proof-of-work as a consensus algorithm, the network was powered by thousands of GPUs mining simultaneously, which led to big energy wastage and scalability issues. With proof-of-stake, on the other hand, users can validate transactions by staking their ETH. This means that they won't need to use as much energy to power the network, which will lead to increased efficiency and scalability, one of the main advantages of proof-of-work vs. proof-of-stake. However, the PoS switch didn't come without any drawbacks. After the merge, Ethereum has sacrificed a bit of security, which might lead to certain issues down the road—one of which could be centralization. Does This Mean Ethereum Is More Centralized? The fact that users can now validate transactions by staking their ETH means that the network is now more centralized than it was before. This is because those who have more ETH will be able to validate more transactions and earn more rewards. Unfortunately, this could lead to big whales controlling the network and smaller users being left out. However, this is not an issue that's unique to Ethereum—it's a problem that all proof-of-stake blockchains face. Moreover, the team behind Ethereum is aware of this issue and is working on solutions to make sure that the network doesn't get too centralized. For example, they're planning on implementing a "slashing" mechanism that would penalize those who try to validate more blocks than they're supposed to. Moreover, new layer-2 Ethereum protocols have been appearing which seek to improve on Ethereum's aspect of centralization while maintaining or even improving scalability. What Does the Merge Mean for the World of Crypto? The fact that Ethereum has successfully switched from PoW to PoS is a big deal for the world of cryptocurrency. First of all, it shows that proof-of-stake can work on a large scale—something that many people were skeptical about. Moreover, it paves the way for other projects to switch to proof-of-stake, which could lead to big improvements in terms of efficiency and scalability. However, the merge came with one larger issue: it caught the attention of the SEC (the Securities and Exchange Commission). Namely, the SEC is a government agency that regulates the market and has the goal of protecting investors. After the merge, the SEC's chairman, Gary Gensler, proposed that Ethereum should be classified as a security, so it should be subject to federal securities law. This caused a lot of controversy in the crypto community, as many people believe that Ethereum is a decentralized platform that can't be classified as a security. The SEC has not made a final decision on the matter yet, but if they do classify Ethereum as a security, it could have big implications for the world of cryptocurrency. What Does the Merge Mean for You? If you're a miner, the switch to proof-of-stake will definitely have an impact on you. Namely, after the Merge, you'll no longer be able to mine ETH. Instead, you'll need to stake your ETH in order to validate transactions and earn rewards. So, if you don't want to sell your mining hardware, you should consider using it on other PoW blockchains, like Bitcoin, Ravencoin, Monero, or even the new Ethereum Classic. On the other hand, as a holder of Ethereum, the merge will probably have only positive implications for you down the road. Even though the Merge is still a relatively new upgrade, it has proven to be a success so far, as the team behind Ethereum has managed to ensure the security of the blockchain while improving its scalability. So, in the next market cycle, you'll probably reap the benefits of the Ethereum merge as long as the protocol retains its current levels of security. The merge shouldn't change your investment strategy, as it has proven to be a successful upgrade that will only prove to be beneficial down the road. Conclusion The Ethereum merge has been a big success so far as it has shown that proof-of-stake can work on a large scale. Moreover, it paves the way for other projects to switch to proof-of-stake, which could lead to big improvements in the blockchain world. If you're skeptical about the merge, you should consider looking into the best Ethereum alternatives. These projects, like Cardano and Solana, are aiming to improve on Ethereum's existing issues by implementing new features in the world of blockchain.
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Decentralized financeBoba Network: Revolutionary Layer-2 Scaling Solution for EthereumBlockchain technology is relatively new, having originated in 2009. Since then, it has come a long way, undergoing massive improvements, like decentralized apps, NFTs, multiple layers, and much more. As developers of different backgrounds started getting into blockchain, more features were implemented, primarily aiming to make the technology more efficient and easier to use. The Problem One of the most scalable blockchains is Ethereum, with the majority of modern blockchain features being implemented on it. Despite its positives, Ethereum has always had one critical flaw: exorbitant gas fees. Many believe this issue will be resolved with the transition to ETH 2.0 set to happen on 19 September 2022. However, many critics believe this won't solve the gas issue for Ethereum, which is why developers have started looking into Ethereum alternatives in 2022. Instead of the merge rectifying the gas issue, critics believe this problem will persist as Ethereum is a so-called "Layer-1 blockchain". This means that all transactions processed within a block are stored on one layer, and then everything is distributed appropriately. Consequently, developers have thought of a new blockchain model that might solve this issue, which is where Boba Network comes in. What Is Boba Network? Boba Network is a Layer-2 scaling solution for Ethereum. This means the blockchain has an additional protocol built on top of the main network—a second layer used to handle transactions. In addition to implementing a second layer, Boba Network also uses an Optimistic rollup model to scale Ethereum's transactions. In short, this rollup model ensures that the data doesn't necessarily have to be stored on the main chain. Instead, the data is stored off-chain, with only a small portion of it being stored on-chain. This way, the network can process a much larger volume of transactions without worrying about bloating the network. How Does Boba Network Work? Boba Network is a smart contract platform that runs atop Ethereum. It consists of two main components: Validator Manager Contract (VMC) This contract manages all the validators within the network. It is responsible for assigning transactions to different validators and keeping track of their activity. When transactions are properly assigned and distributed, there won't be an overloaded validator, meaning that all transactions will be managed accordingly. Rollup Contract (RUC) This is the contract that actually processes the transactions. It consists of two parts: the relay chain and the Rollup Chain. The relay chain is specifically responsible for processing deposits and withdrawals, while the Rollup Chain handles all other transactions. What Are the Advantages of Boba Network? Boba Network's primary benefit is its scalability. Thanks to its Optimistic rollup model, the network can process around 500 TPS (transactions per second). This number is set to increase in the future as more improvements are made to the network. Ethereum currently has a TPS of 13. In terms of security, Boba Network uses a combination of Proof-of-Stake and Plasma to secure its transactions. Proof-of-Stake consensus is used to validate all the transactions happening on the chain, while Plasma is used to prevent double-spending. This combination makes Boba Network one of the most secure Layer-2 scaling solutions available. Another big positive for Boba Network is that it's user-friendly and doesn't require any special software to be used. Instead, users only need a Web3-compatible wallet, like MetaMask. In addition, Boba Network has an easy-to-use interface that makes it perfect for those who are not too familiar with blockchain technology. What Are the Drawbacks of Boba Network? The main drawback of Boba Network is that it's still in its early stages of development. Even though the network officially launched in September 2021, it's still a relative newcomer compared to older players. Unfortunately, some bugs and glitches are inevitable, potentially leading to security issues. Additionally, the team behind Boba Network is relatively small, so it might take a while for all the planned features to be implemented. Another factor to keep in mind is that since Boba Network is built on Ethereum, it shares all of Ethereum's limitations. The Future of Blockchain Technology Boba Network seems to be a promising project that, if executed correctly, could revolutionize the way Ethereum currently works. If the Ethereum merge fails to solve the main issue of the network, developers and users alike might be forced to use alternative solutions like Boba Network. While Boba Network is not the first Layer-2 solution to be proposed, it still has significant advantages that should be considered for the future of blockchain technology.
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Decentralized financeFat Protocol Theory: Is It Outdated and Becoming Obsolete?In the years after its development, the blockchain model caught the attention of many professionals. The technology behind this model was widely thought to be revolutionary, as it would be a fully decentralized communication model. Moreover, its use cases would also be massive, potentially revolutionizing how many industries function. However, certain analysts immediately developed theories regarding how the blockchain will develop. One of the most popular ones is the Fat Protocol theory or thesis (FTP), which we will cover below. Difference Between the Traditional Network Model and the Blockchain Model To understand this theory, a distinction needs to be made between traditional network protocols and blockchain technology. Unlike traditional network protocols, like TCP/IP and HTTP, the blockchain network model works quite differently. With traditional network models, the dynamic works in a client-server manner—the client requests data from the server, the server processes it, and then sends it back to the client after the validity of the data in question has been verified. With blockchain technology, there is no such thing as a client and a server. Instead, every node that joins the network can act as both. As a result, the nodes in the blockchain model can process and send data to another node in the server, allowing for much more transparent communication. In a traditional network model, data's validity is verified from the server, but in the blockchain model, the data is verified by other nodes in the network. What Is the Fat Protocol Theory? Joel Monegro first proposed the Fat Protocol theory in 2016. In his original post, Monegro argues that the value of a network will be determined primarily by its underlying protocol layer rather than the applications built on top of it. Let's take a look at his statement in simpler terms. With the way most networks work, they have a so-called "application layer" on top. For the world wide web (WWW), the application layer is where all the apps we use daily are stored—like Facebook, Instagram, LinkedIn, etc. Underneath this application layer is a "protocol layer", which defines how the network works. Regarding the internet we use today, the network consists of a "fat" application layer and a "thin" protocol layer. Monegro believes the blockchain network will have the opposite model—a "fat" protocol layer and a "thin" application layer. The reasoning behind this is that, with traditional networks, the app developers don't have to worry about how the network works—they just develop their app and launch it on the app store. But with blockchain technology, every developer who wants to launch an app will first have to create their own blockchain. Thus, the "fat" protocol layer will be much more valuable than the "thin" application layer. Shortfalls of the Fat Protocol Theory The Fat Protocol theory is controversial for a few reasons. Firstly, it goes against the way all networks have developed so far. As we've seen, with the internet, the application layer is much more valuable than the protocol layer. The dApps built on top of the network are what drive users to use it, and thus, they are what create value. The second flaw in the theory is that it doesn't take into account the fact that the blockchain is still in its early stages of development. At this point, it's still very hard to create a functional blockchain, and most people that want to do so don't have the necessary technical expertise. Moreover, it's also hard to launch an app on a blockchain, as there are very few users that actually have the required cryptocurrency to use it. These factors make it very unlikely that the Fat Protocol theory will play out in reality. For now, it seems much more likely that the value of a blockchain network will be determined by the applications built on top of it rather than the protocol layer. As more and more developers start seeing the benefits that blockchain technology offers over traditional network models, we'll likely see more apps being built on the blockchain. Cloaked in Controversy We can conclude that the Fat Protocol theory is a controversial one, and it's doubtful that it will come to fruition. The main reason for this is that the theory doesn't take into account the fact that blockchain technology is still in its early stages of development. As previously highlighted, creating a blockchain is complex, and most people don't have the technical expertise required. However, as the industry grows, we'll likely see more blockchains being built with an extensive application layer, which is what gives a network its actual value.
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Decentralized finance6 Best NFT Marketplaces to Invest in Right Now (2022)If you're looking to get involved in the world of NFTs, then you’ll need some knowledge of the best places to buy, sell, and trade them—and reputable blue-chip NFT marketplaces are a great place to begin! Furthermore, if you're planning on creating your own NFTs down the road, these marketplaces can be a potential way to make some money. However, choosing an NFT marketplace with the best collections and prices for your needs and preferences can be challenging. In this article, we're going to list down some of the best NFT marketplaces for safe, secure, and easy transactions. We'll also give you an overview of what each marketplace offers so that you can make an informed decision about which one best suits you. 1. OpenSea Even newbies to NFTs are aware that OpenSea tops the list. It's one of the top NFT marketplaces globally, with a wide range of collections from digital art to in-game items, and everything in between. One of the best things about OpenSea is its easy-to-use interface that makes buying, selling, and trading NFTs a breeze. Transaction fees are also quite affordable at 2.5% of every sale. This fee is charged to the creator/seller, while the buyer pays the gas fee. The marketplace also supports more than 150 different payment tokens, allowing users to pay with the cryptocurrency of their choice. 2. Bored Ape Yacht Club The BAYC is a project that focuses on delivering high-quality NFTs and providing a unique experience for its users. You can invest in one of the 10,000 Bored Ape NFTs, a collection of digital art that comes with access to members-only perks. The project has also launched its new meme token, the Ape Coin, which is a token for utility and governance. Holders of the Ape Coin have voting rights on the Ape Coin Decentralized Autonomous Organization—the DAO—and can earn rewards for participating in the community. 3. Rarible Rarible is also a popular choice among NFT enthusiasts and is among the top marketplaces in terms of transaction volume. It has a wide range of collections, including digital art, photography, in-game items, and more. Rarible is a community-based marketplace, which means that anyone can create and mint their own NFT on the platform. Trading fees are also quite low at just 2.5%. Rarible also has an easy-to-use interface and supports several blockchains, including Ethereum, Polygon, Flow, TezEthereum, Tezos, and Polygonos. 4. SuperRare SuperRare is your go-to marketplace for curated NFT artworks. It's an exclusive, invite-only NFT marketplace, which means they only deal with NFT artists they know and trust. This makes SuperRare one of the best places to find high-quality NFT artworks (hence the name). SuperRare maintains its goal to preserve the culture of art collection and remains the pioneer in the exclusive NFT art space. The platform has a very strict vetting and approval process, which also makes it one of the most trustworthy NFT marketplaces. As expected, transaction fees can be quite steep compared to other platforms, starting at 15% on primary sales. However, if you're into collecting physical art and would like to add some digital art to your collection, then SuperRare is definitely the marketplace for you. 5. Axie Infinity Marketplace If you know of the popular blockchain-based game Axie Infinity, you may also be aware that it also functions as an NFT marketplace. The Axie Infinity marketplace is one of the top NFT game marketplaces dedicated to in-game assets. Players can buy, sell, and mint Axies, as well as other in-game items. If you're a buyer, there are no fees for purchasing. However, if you're a seller, then you'll be charged a marketplace fee of 5.25%. If you have a creator code, 4.25% is sent to the Community Treasury, while 1% goes to you (the NFT creator). Without a code, the platform will charge the full 5.25%. That said, if you're looking to buy, sell, or mint in-game assets, then the Axie Infinity marketplace is definitely worth checking out. 6. Foundation Another top platform for minting, buying, and selling NFTs is Foundation. The platform used to be invite-only, like SuperRare, but has since opened up its doors to the general public. Foundation is best known for its wide collection of digital art and is popular among crypto natives, collectors, and artists alike. If you're on the hunt for art NFTs ranging from images to videos and 3D pieces, then Foundation is the marketplace for you. The platform has a user-friendly interface and is well-designed, making navigation easier. In terms of transaction fees, Foundation charges creators a 5% marketplace fee per sale, plus an additional 10% for each secondary sale. Buyers do not have to pay fees outside of the purchase amount. The Takeaway These are just some of the best NFT marketplaces to invest in right now. As the world of NFTs continues to grow, so too will the number of marketplaces. The key to finding a good marketplace is to find one that best suits your needs. Whether you're looking for a particular type of NFT or just want to browse a wide selection, there's definitely an NFT marketplace out there for you.
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Decentralized financeTop 5 Reliable Sites For Purchasing Stablecoins SafelyAs the world of cryptocurrency continues to grow, so does the need for more reliable ways to purchase digital assets. One such asset that investors are turning to more and more is the stablecoin. Stablecoins are digital tokens that are designed to maintain a stable value, regardless of the volatility of the cryptocurrency market. This makes them an ideal choice for investors who want to protect their portfolios from market fluctuations. Stablecoin yield farming allows users to borrow and exchange stablecoins on both DEX vs CEX platforms. However, with so many different stablecoins on the market, it can be difficult to know which ones are the most reliable—and where they can be purchased safely. We look at five of the most trusted sites in this article, all of which have been vetted by our team of experts and are known for their dependability and security. » Are stablecoins safe? Discover the safest stablecoins of September 2022 1. Binance Binance is one of the largest cryptocurrency exchanges in the world, offering a wide variety of digital assets for investors to purchase. This includes several of the most popular stablecoins, such as Tether (USDT) Pax Dollar (USDP), Dai (DAI), and more. Binance is known for its user-friendly interface and robust security features, including two-factor authentication to protect user accounts, as well as API access control, device management, and whitelisting. Additionally, all digital assets are stored in offline cold wallets. Investors can purchase stablecoins on Binance using either fiat currency or other cryptocurrencies. The platform also offers a mobile app for users who want to trade on the go, making it a great option for beginners and advanced traders alike. 2. Coinbase Coinbase is a popular option for investors, because it's considered one of the most user-friendly exchanges in the industry, with an easy-to-use platform and educational tools for beginners. Coinbase is one of the most secure exchanges in operation, with multiple layers of security to protect user accounts. The platform also uses advanced encryption techniques to ensure the safety of digital assets, such as two-factor authentication, multi-approval withdrawals, and password protection. Coinbase offers a wide range of stablecoins for investors to choose from, including USD Coin (USDC), Dai (DAI), and Pax Dollar (USDP). 3. Gemini Gemini is owned by the Winklevoss twins, who are also early investors in Bitcoin. The exchange is regulated by the New York State Department of Financial Services (NYDFS) and is compliant with all applicable laws and regulations. One of its strongest features is its industry-leading security protocol, which includes two-factor authentication, wallet address whitelisting, and device management. The platform also has its own hot wallet, which is backed by digital asset insurance. This means that in case of a hack or security breach, users' funds stored in wallets are covered. Needless to say, it's one of the most reliable places to buy and store stablecoins. 4. Kraken Kraken is one of the oldest cryptocurrency exchanges in operation, having been founded in 2011. The platform is known for its high security standards, with multiple layers of protection to keep user accounts safe. This includes two-factor authentication, withdrawal email confirmation, strict surveillance, air-gapped cold storage, SSL encryption, and precise API key permission control. The Kraken exchange's servers are also kept in secured cages with armed guards and video cameras on watch 24 hours a day, seven days a week. As a result, no major hacking incidents have been reported in Kraken's almost 10-year history. Kraken offers a wide range of stablecoins for investors to purchase, as well as over 100 cryptocurrencies. Kraken has a simple user interface and is a high liquidity exchange, making it a great choice for someone looking to buy or sell stablecoins quickly. 5. Nexo Nexo is a bit different from the other exchanges on this list, as it's not strictly an exchange. Rather, Nexo is a lending platform that allows investors to borrow against their digital assets as collateral. This includes stablecoins, which can be used to take out loans in fiat currency or other cryptocurrencies. The platform also offers industry-grade security features to protect user accounts, including two-factor authentication, biometric identification, whitelisting, and a host of other measures. Nexo is also insured by Lloyd's of London, meaning that users' digital assets are protected in case of a hack or security breach. Conclusion These are just a few of the many exchanges where you can buy stablecoins. When choosing an exchange, be sure to consider factors like security, fees, liquidity, and user experience. By doing so, you'll be able to find the best platform for your needs and be well on your way to investing in stablecoins.
Various cryptocurrencies held in a person's cupped hands
Decentralized finance6 Safest Stablecoins in September 2022—Top Investors' ChoiceStablecoins provide crypto investors with an opportunity to ride the crypto waves amid high volatility—while still maintaining the value of their portfolios. As their name suggests, stablecoins are designed to remain stable in price, usually pegged to a fiat currency or other less volatile assets. This makes them ideal for use in commerce and trading, as well as for holding as a long-term investment. With so many stablecoins on the market, it can be hard to know which ones are the safest to invest in. We take a look at six of the best stablecoins to invest in based on stability, market capitalization, and liquidity. » Where can stablecoins be bought safely? Explore the best sites to buy stablecoins 1. Tether (USDT) Tether (USDT) is one of the oldest and most popular stablecoins in the market. USDT has been in the crypto market since 2014 and is pegged to the US dollar at a 1:1 ratio. It has a market cap of $67.92B, making it the largest stablecoin as well by far. Tether adheres to world-class compliance measures for anti-money laundering (AML), know your customer (KYC), and countering the financing of terrorism (CFT) rules regulations—making it one of the most trusted stablecoins in the market. 2. USD Coin (USDC) USD coin (USDC) is another popular stablecoin pegged to the US dollar. Built on Ethereum, USDC is compatible with all Ethereum wallets and decentralized applications (dApps). Every online digital dollar of USDC is 100% backed by real cash and short-dated U.S. treasuries, ensuring that it's always redeemable in equal amounts of US dollars. Its market cap is $50.19B. USDC is also one of the few stablecoins that undergo regular audits to ensure that it's backed 1:1 by US dollar reserves. These audits are conducted by the top five independent firms, including the likes of Grant Thornton LLP. The statements and reports are published monthly on the center's website for full transparency. 3. Binance (BUSD) Binance (BUSD) is a stablecoin issued by one of the world’s largest cryptocurrency exchanges, Binance, in partnership with Paxos. BUSD is a dollar-backed stablecoin that always holds its value at 1:1 with the US dollar. This means that BUSD can always be bought and sold at the same rate of 1 BUSD to 1 USD. BUSD is ERC-20 compliant and hence compatible with Ethereum-based wallets and applications. It's also regulated by the New York State Department of Financial Services, providing investors with an additional layer of protection. BUSD has a market cap of $20.52B. » Want to stay updated on Binance? Catch up on the evolutions of the BNB chain 4. Dai (DAI) DAI is a cryptocurrency that was created by MakerDAO and is intended to be a stablecoin free of any centralizing authority, as opposed to other stablecoins, which are vulnerable to censorship. DAI is pegged to the US dollar and uses collateralized debt in the form of Ether (ETH). What makes this stablecoin different from others is that it doesn't require collateral held by a company. The process is regulated through smart contracts associated with Collateral Debt Positions taken out with MakerDAO. The stablecoin has a market cap of $6.88B. » Does DAI have tokens? Discover how DAI tokens work 5. TrueUSD (TUSD) TrueUSD (TUSD) is a dollar-backed stablecoin that was created to provide its users with a more trustworthy and transparent alternative to other stablecoins in the market. All TUSD in circulation is backed 1:1 by US dollars held in escrow accounts with verified US banks, making it one of the most stable and reliable stablecoins. TrueUSD claims to be the first regulated stablecoin in the market. It's fully collateralized, legally protected, and transparently audited at regular intervals. These audits are conducted by top-tier accounting firms such as Cohen & Company. TUSD has a market cap of $1.08B. 6. Pax Dollar (USDP) Pax Dollar (USDP) is a dollar-backed stablecoin created by Paxos, a New York State chartered trust company. USDP is always backed 1:1 with US dollars held in reserve by Paxos, making it a reliable and trustworthy stablecoin. Paxos is a regulated financial institution, providing an additional layer of protection to investors. Paxos also conducts regular audits of its US dollar reserve, which are then published on its website. The current market cap is $ 945.39M. Conclusion There are many different types of stablecoins in the market, each with its own unique features and benefits. However, all stablecoins share one common goal: to provide a more stable and reliable alternative to other cryptocurrencies. When looking to invest in and to make money with stablecoins, it's always helpful to research each option thoroughly to find the one that best suits your needs.
A bunch of bright pink Polkadot coins laying in a pile.
Decentralized financeEverything You Need to Know About PolkadotBlockchain technology has evolved and changed a lot since its inception. In the past, it was limited to just a couple of big cryptocurrencies, each with its own network, features, and functionalities. However, with this growth of the space, the market effectively became a bunch of divided blockchains that would benefit from interacting with each other, which is why multi-chain solutions like Polkadot have started arising. Polkadot is both a protocol and cryptocurrency, designed with the primary goal of connecting unrelated blockchains. Still, we've only touched the tip of the iceberg for Polkadot, so let's dive deeper. What Is Polkadot? Polkadot was created by the Web3 Foundation, a non-profit organization from Switzerland that develops decentralized technologies on the blockchain. The project was led by Gavin Wood, who is also one of the co-founders of Ethereum. In order for Polkadot to act as a multi-chain solution aiming to connect different blockchains, it uses so-called parachains (also known as parallel blockchains) to connect different networks like Bitcoin and Ethereum and make them interoperable. A cross-chain protocol like Polkadot makes it possible to buy ETH with BTC without having to exchange them for USD, for example. How Does Polkadot Work? Polkadot is a heterogeneous multi-chain network that can support multiple blockchains with different characteristics, functionalities, and purposes. As mentioned above, it utilizes parachains to connect networks and make them interoperable with each other. The point of all this is to make it easier for developers to build decentralized applications (dApps) that can interact with multiple blockchains. Having this feature means that developers don't need to create a new blockchain from scratch every time they want to connect it to another one. Instead, they can just launch a parachain and be good to go. DOT Governance Token The Polkadot Network has a native cryptocurrency called the DOT token, which is primarily used for governance. Since Polkadot is fully decentralized, the community (i.e., the holders of the token) get to vote on how the protocol is governed. Additionally, the DOT token can also be used for staking. As a blockchain, Polkadot uses an NPoS (nominated proof-of-stake) consensus algorithm, which is how the transactions are verified. » Interested in more details on Polkadot's inner workings? Gain an overview of Polkadot's ecosystem Benefits of Using Polkadot Polkadot is a pretty innovative project with a lot of potential. Below we go into more detail about the benefits of the protocol and why you should consider using it. Scalability The first big benefit of Polkadot is that it's highly scalable. Theoretically, the network can support thousands of parachains, each with its own blockchain. In comparison, Ethereum can only support around 100 dApps at a time before it starts slowing down. This scalability is made possible by the relay chain that Polkadot uses. The relay chain is the main backbone of the network, which is where all the transaction data from the parachains is processed. This data is then bundled up and sent to the validators (i.e., those who stake DOT tokens) to be verified. The relay chain uses a kind of "sharding" technique where different parts of the network can process transactions in parallel, which makes it much faster than Ethereum's main blockchain. » Why is scalability important? Understand the scalability trilemma Interoperability Another big advantage of Polkadot is that it's fully interoperable. As we've said, the network connects different blockchains and allows them to interact with each other. This is a really big feature, as it opens up a whole world of possibilities for dApp developers. For example, let's say you're developing a dApp that needs to interact with a blockchain that's not compatible with Ethereum. With Polkadot, you can launch a parachain for that blockchain and connect it to the network. This way, your dApp can still interact with the other blockchain without any issues. Efficiency Since Polkadot offers a lot of unique features, you might think that it's much more expensive to use than other blockchains. However, this isn't the case as Polkadot is much cheaper to use than other scalable blockchains like Ethereum, because the network only needs to process the data that's relevant to the parachains that you're using. So, if you're not using a particular parachain, the network won't waste any resources processing its data. This efficiency is made possible by the "collators" who are responsible for collecting and packaging the data from the parachains. The collators only need to collect the data that's relevant to the parachains that you're using, which makes the network incredibly efficient. Final Thoughts Overall, we think that Polkadot is an innovative project with a lot of potential. Its ability to connect different blockchains, allowing interoperability between networks, coupled with its efficiency makes it an intriguing prospect for both users and developers. We'll be sure to keep an eye on it and see how it develops in the future.
A blue screen with various items in a digital map featuring red dots, with 'DeFi' in the centre of the map.
Decentralized financeMapping the DeFi Ecosystem in 2022DeFi, or decentralized finance, is a new financial technology that's revolutionizing how we think about future finance. The term "DeFi" was initially coined in 2018 by a team of developers working on Ethereum with the simple goal of improving existing financial systems. The DeFi space seeks to do this by implementing blockchain technology—the same technology behind cryptocurrencies. This space has been rapidly growing in the last couple of years, and with this growth, has split into multiple segments referred to as layers. Let's explore this further. Layers of the DeFi Ecosystem The DeFi space consists of four main layers. Let's cover them in a bit more depth. User Layer Also known as the front-end layer, this is the part of DeFi that most crypto enthusiasts interact with daily. This first layer consists of wallets and DeFi Hubs, which make the features of blockchain technology available to the users. Some of the most popular wallets are MetaMask, Phantom, and the Coinbase Wallet. They allow you to buy and sell crypto while interacting with other users on the blockchain. Alternatively, DeFi Hubs like Zapper are platforms that allow you to actively engage in the world of decentralized finance by staking, yield farming, and providing liquidity. » Want to explore more about wallets? Discover the different types of crypto wallets Chain Layer The second layer holds the basic infrastructure of the DeFi ecosystem, and as the name says, it consists of multiple chains. Some of the most popular ones are Ethereum, the Binance Smart Chain, and Polkadot. These chains provide the essential infrastructure for DeFi applications to run on top of them. So, why is the chain layer important? Well, this layer allows different DeFi protocols to communicate with each other and interact with each other's data. Without it, the DeFi ecosystem would consist of a bunch of isolated blockchains with very restricted communication. Primitive Layer On top of the chain layer is the primitive layer, consisting of multiple protocols with unique features. The protocols in question are the building blocks of the DeFi ecosystem that provide different services to users. Decentralized exchanges (DEX), derivate platforms, and lending protocols are the main components of this layer. Some of the most popular protocols in the primitive layer are Maker, Compound, and Uniswap. Almost all of the protocols in the primitive layer offer a unique service that's essential for the DeFi ecosystem as a whole. For example, if you want to buy some crypto but don't want to do it at a centralized platform like Binance, you can head over to Uniswap (a DEX) and get the job done. Aggregation Layer Being built on both the primitive and chain layer, the aggregation layer is often seen as one of the main catalysts for wide-scale adoption of crypto and DeFi. Since the layer is already built on two other layers, it's designed for optimized experience and usability. However, the aggregation layer doesn't consist of only one segment—it has supply-side protocols and demand-side aggregators. Supply-side protocols are the ones that aggregate (i.e., combine) the funds from multiple protocols and properly distribute them. Demand-side aggregators receive requests from users (like trades or buy orders) and disperse them with optimized efficiency as the primary goal. Key Features of DeFi Let's go over the main features of DeFi and see what it offers to its users. Borrowing and Lending Unlike traditional finance (TradFi), DeFi has made it easy for people to borrow and lend funds, which is one of the main reasons for its popularity. Thanks to protocols built on the blockchain, users can lend out their crypto to others on the blockchain and earn passive income while doing it. Alternatively, DeFi also features borrowing, meaning that you can get quick access to crypto in case you need it without going through tedious processes like with TradFi. » What is Tradfi? Read up on all the essentials Staking Staking is often used in conjunction with lending, but they're usually not the same thing. Lending refers to lending out your crypto to other users on the same protocol. When they use your funds for a transaction, you'll receive a small fee as passive income. However, staking refers to locking your funds on the protocol for any reason (usually to improve liquidity or security). It's also worth mentioning that staking is often done on a much longer timeframe (usually no less than three months), while lending could be a one-time thing. » Want to know more? Discover the difference between staking vs yield farming Synthetic Assets Synthetic assets are cryptocurrencies that represent real-world assets. Often called synths, these assets mimic the price of any asset you can imagine—gold, silver, stocks, bonds, fiat currencies, and much more. They make it easy for newcomers to invest in any market with the practicality and decentralization that crypto offers and still enjoy the same returns. » Curious about synthetic assets? Here's what you need to know NFTs Non-fungible tokens (NFTs) have rapidly expanded on the market in the last few years. NFTs are both immutable and verifiable, which are the two main features why new investors keep coming to them as an asset class. On top of that, NFTs are not only used as a store of value or for investment purposes—they're also used to represent art, real estate, files, etc. » Are NFTs worth it? Discover whether NFTs are a good investment What Is Next For DeFi? All things considered, the DeFi ecosystem is still in its early days, which is precisely why it's so hard to predict the future. Even though we've seen a lot of growth in the last few years, it's still not enough for mass adoption. In order for that to happen, we need more protocols, deeper integration between layers, and better awareness. This is why in the next few years, we can expect to see a lot more interoperability between protocols, meaning that users will be able to move their funds between different protocols with ease. Additionally, we can also expect to see more NFTs being used in DeFi for lending, borrowing, and other financial services. All in all, the DeFi ecosystem is still in its early days, but it has a lot of potential. In the next few years, we can expect to see more growth and wider adoption from it.