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StellarX Weigh In On The Problems With Running ICO’s On Ethereum

StellarX Weigh In On The Problems With Running ICO’s On Ethereum
StellarX is the looming crypto asset trading platform, developed by an affiliated branch of Stellar (you know, the XLM crypto project). As the StellarX platform continues to see its development, some of the team there have been carrying out side research into why the Ethereum blockchain is a bad place to launch an ICO, indeed, they share some interesting findings too. In a blog on the StellarX blog page, written by ‘Christian’ it’s made clear that the StellarX team think Ethereum is a bad idea for ICO’s, citing a number of different reasons that I’m going to share with you now. You can see the full article for yourself, here.   Their main justification for this is ‘The Great Filter’ which they believe will occur when high costs on the Ethereum blockchain and the slow performance of it all means the majority of projects on Ethereum are wiped out, they will be rendered useless. Performance is a key issue here, one that means the network is slow, laggy and often a little uncertain. An example given by Christian is as follows:
“We spun up the test, using ETH Gas Station’s “standard” estimates for gas, expecting a median confirmation time of about 30 seconds, and, lo and behold, 13 hours later, more than half of our transactions still hadn’t made it into a block. We stopped the test at 13h and 50m, and 50.1% of our transactions were missing. (Reminder: the raw data is in our GitHub, if you want to check our work.) We thought we’d messed up somehow, but, no. We had just created a bunch of long lines, and some jabroni transactions had stood there all day doing nothing.”
Not great if your ICO needs to issue funds to a large amount of investors, or if you need to access your investors funds quickly. Next up, it’s an expensive platform too. Extra expense means your end target will be harder to reach and thus, the chance of the ICO completing successfully is reduced somewhat. According to Christian:
“Ethereum is also unsuitable for the other kind of adoption, what you might see with an app like, I dunno, Etsy, where instead of a few people going deep, you have lots of people checking in every once in a while. That’s because an Ethereum app’s per-user costs go up quickly as it adds users, and that’s why you see stuff like 70x price spikes whenever anyone tries using the network across many accounts.”
Moreover:
‘One test cost us $1,445 for a single hour. It ran when gas prices were low, just ≈1 Gwei for standard speed, and it puttered along at just 8 transactions a second. To run a basic test, that’s $12.6m a year. If you apply that cost structure to a real business, you see that Ethereum’s fees are already unsustainably high. For example, PayPal does about 240 transactions a second. Put aside the performance fixes it would take to make that happen and put aside the rising-price dynamic I just documented. If PayPal had been built on Ethereum and paid our observed rate, they would’ve laid out $380m in network fees last year. That would’ve been 21% of their net income, and, again, that’s pretending that you could somehow freeze prices.”
It’s a good job PayPal didn’t start as an Ethereum ICO isn’t it. High fees and low speed make Ethereum tricky area for the running of ICO’s. Indeed, actually setting up an ICO within the Ethereum Blockchain is pretty easy so it’s a catch 22 and I suppose in many instances, Ethereum is a great place to start (look at the success of the likes of TRON for example). Still though, the research done by StellarX and ‘Christian’ is something worth thinking about, especially if your next plan is to run an ICO of your very own.

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How has the DeFi market changed in 2020?

How has the DeFi market changed in 2020?

Decentralized finance has become the # 1 hot topic in the cryptocurrency world in 2020. Users from all over the world have joined an alternative financial industry that offers lending, deposits, investments, trading, and a number of other instruments that were previously completely controlled by traditional financial institutions.

According to Google Trends, interest in DeFi has more than tripled this summer compared to previous years. Although this industry has been on the market for a long time, the real popularity came to it in 2020. We can say that Bitcoin became the first decentralized financial instrument. The second “restart” of the idea was implemented by Vitalik Buterin and his partners, who created Ethereum and smart contracts. The Ethereum network has shown how popular blockchain projects can be, and what tasks they can solve.

And now, in 2020, decentralization has reached financial services. When society saw the possible potential of DeFi in the implementation of classic financial instruments, the industry's success was irreversible. In a very short time, decentralized finance attracted billions of investments, and thousands of new projects appeared on the new market.

Decentralized finance has a capitalization of more than $ 12.4 billion, according to DeFi Pulse. And at its peak, this figure almost reached 15 billion. But even more surprising is the dynamics of decentralized finance capitalization: a year ago it did not exceed $ 700 million, and over the past 5 months it has grown 12 times!

According to Defi Dapp Review, about 70% of all blocked funds are in projects that specialize in lending and loans. It can be argued that this is the mainstream of the industry with the highest popularity.

Among the startups that hit the market in 2020, there were many "unicorns" whose price increased by thousands of percent, and then also plummeted downward. The reason for this was the usual speculation, as it once happened with cryptocurrencies.

Another major achievement of DeFi was the development of DEX - decentralized exchanges. The main difference between such trading platforms from centralized ones is the absence of the exchange's role as an intermediary between the seller and the buyer. In fact, all asset exchange operations take place directly between users, and the exchange is only a platform for such deals.

The rise in popularity of DEX has led centralized cryptocurrency exchanges to lose trading volume in favor of decentralized ones. In early autumn 2020, the aggregate trading volume of the 10 largest decentralized exchanges exceeded $ 30 billion. These are very serious indicators for such a young industry. However, DEX still have some problems with market making.

It's no secret that many experts and people just following the news compare the BOOM of DeFi's popularity to the 2017 cryptocurrency market rally. It's no secret that many experts and people just following the news compare the BOOM of DeFi's popularity to the 2017 cryptocurrency rally. And these two processes have a lot in common. First, DeFi is also a fledgling industry that attracts a lot of "easy money lovers". You can really make money on this, but just as quickly you can lose. DeFi is also attracting a lot of scammers, just like cryptocurrencies in the “Age of ICO”. Along with really high-quality projects that solve urgent problems, thousands of one-day projects appear on the market, the main task of which is to make money. In most cases, the team of such a project does not care about its future.

And the last similarity is the technical imperfection of decentralized finance. There are several reasons for this, among them: the novelty of the technology, which implies many early bugs; limited development budgets; the inexperience of the creators and developers of DeFi startups. It turns out that technical imperfection limits the potential of truly great technology.

To solve all of the above problems, we can use the experience of cryptocurrency startups. When professional teams work on decentralized projects, when the budget is enough to develop a quality product, then even skeptics will believe in the industry. It is fair to assume that getting large companies involved in decentralized finance can take DeFi to a whole new level. And there is already some progress in this direction.

The information about the launch of the project on decentralized finance xSigma, which is being prepared by the public company ZK International Group, has been confirmed. First of all, the xSigma DeFi department is going to solve the biggest problem in the industry - problems with market making on decentralized exchanges. The new DEX from xSigma should unleash the potential of the decentralized trading idea, providing users with not only a technically high-quality platform but also a user-friendly interface. 

The launch of the decentralized exchange will be only the first stage in the development of the xSigma's DeFi ecosystem. In the future, the company plans to expand the list of services, as well as create new financial instruments. In 2 years, the xSigma team plans to release a stablecoin that will become part of their ecosystem.

xSigma’s product team is led by Alex Lebed, a software engineer with career stops at Facebook, Amazon, 1Inch, and also the founder of Stableunit.org. The team also features Harvard graduate and former Google engineer Kamal Obbad, and Daniel Garay, a project manager formerly of Ripple Labs and Google.

We have high hopes that such a serious approach will significantly improve the fledgling decentralized finance industry. Of course, the importance of pioneer DeFi startups to the industry is undeniable. After all, it was they who made the whole world talk about decentralized finance. However, for this technology to develop and improve, a lot of work still needs to be done. And I want to believe that the community will succeed!

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Adam back: Bitcoins bullish trajectory isn’t over yet

Adam back: Bitcoins bullish trajectory isn’t over yet

Quick Take

1 minute read

  • Currently priced above $19,000 at the time of writing, bitcoin is on a trajectory that is very exciting. 
  • So passing numerous key resistance levels over the course of this year in the last few months, the leading cryptocurrency and its adoption rates are rising consistently. 

Currently priced above $19,000 at the time of writing, bitcoin is on a trajectory that is very exciting. Surpassing numerous key resistance levels over the course of this year in the last few months, the leading cryptocurrency and its adoption rates are rising consistently. Even making its way back into the news bitcoin has seen more than 140% in gains this year. 

Adam Back believes that the good times are yet to be over though as it will eventually fully succumb into a digital world.

Writing in a tweet earlier this week, the chief executive officer of Blockstream gave the opinion that bitcoin and its power as a form of digital gold can make it a game-changer in the future and the world of financial solutions.

This all came about when Adam was replying to a comment from the well-known crypto analyst Willy Woo who compared the spike in bitcoin to the relationship between early technologies and the successes that followed.

Bitcoin has been compared to digital gold on numerous occasions over the years. Many people see bitcoin though as a much more secure and faster option to the precious-metals as a credible store of value. Critics of the leading cryptocurrency would say differently however but many people have projected that the digital asset will soon overtake gold and become the dominant store of value asset in the future.

For more news on this and other crypto updates, keep it with CryptoDaily!

© 2020 CryptoDaily All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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The biggest bank in Russia is getting ready to launch its own blockchain platform

The biggest bank in Russia is getting ready to launch its own blockchain platform

Quick take

1 minute read

  • The largest bank in Russia is getting ready to launch a new blockchain platform for trading as well as a native token. 
  • As a new law comes into effect in the country, Sberbank is getting ready to jump in the deep end for cryptocurrency in 2021 when the new law “on digital financial assets“ comes into effect in Russia.

The largest bank in Russia is getting ready to launch a new blockchain platform for trading as well as a native token. As a new law comes into effect in the country, Sberbank is getting ready to jump in the deep end for cryptocurrency in 2021 when the new law “on digital financial assets“ comes into effect in Russia.

The chief executive officer of the Russian bank, Sberbank revealed the news earlier this week and with over 96 million clients, this makes the bank the biggest one in the country.

Earlier this year, there were rounds of rumours and speculation as to whether the bank was looking to issue its own stablecoin cryptocurrency. Given that the DFA law does not allow for a number of crypto-related activities, it didn’t seem that a stablecoin would be backed by the ruble in Russia.

There have been news reports in regards to Russia creating its own central-bank digital currency though and it will be very exciting to see where this goes in the future. Russia has had a rough history with cryptocurrency in the past but now it seems that things are about to change in 2021.

For more news on this and other crypto updates, keep it with CryptoDaily!

© 2020 CryptoDaily All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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Should the US follow in China's footsteps when it comes to CBDCs & online remittance services?

Should the US follow in China's footsteps when it comes to CBDCs & online remittance services?

Quick take

1 minute read

  • Niall Ferguson, a historian on economics and finances in Britain has said that the United States needs to discover its own path when it comes to adopting cryptocurrency.
  • This comes as many countries all around the world, including the US, are going off what China has done when it comes to creating its own electronic payment system.

Niall Ferguson, a historian on economics and finances in Britain has said that the United States needs to discover its own path when it comes to adopting cryptocurrency. This comes as many countries all around the world, including the US, are going off what China has done when it comes to creating its own electronic payment system.

Over the weekend, Ferguson wrote in an opinion piece for Bloomberg that the pandemic has been nothing but good news for the world of crypto adoption and has really sped up the monetary revolution all over the world. But he did come on to highlight that China has been quickly advancing when it comes to the rule out of its digital yuan and the increasing use of mobile payments such as WeChat and Alipay. They allegedly deal with $40 trillion worth of transactions on a yearly basis.

Ferguson goes on to note that the measures put in by China are being used as a template for many other countries all over the world when it comes to developing a cross-border payments system and remittance payments. But he interestingly advised the United States not to follow suit, saying:

“Even governments that are resisting Chinese financial penetration, such as India, are essentially building their own versions of China’s electronic payments systems. Rather than seeking to create a Chinese-style digital dollar, Joe Biden’s nascent administration should recognize the benefits of integrating Bitcoin into the U.S. financial system.”

It will be interesting as to whether anyone in the United States will pay attention to what Ferguson has said. Following in the footsteps of China could prove successful but may not be any different from what China is actually doing when it comes to creating a central-bank digital currency or online remittance service.

For more news on this and other crypto updates, keep it with CryptoDaily!

© 2020 CryptoDaily All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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