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Forget Ethereum, DeFi Is Being Built on Bitcoin



A few weeks ago a CoinDesk headline,”Why Hardnosed Bitcoiners Can Learn to Love DeFi,” caught my eye. The title was designed for controversy. Decentralized finance (DeFi) seems to be everything Bitcoiners reject: useless tokens created for haphazard projects and quick money-grabs driven by ponzinomics. All of this happening on Ethereum, Bitcoin’s unprincipled competitor.  

Yet, to dismiss the piece, and its author Matt Luongo, would be a mistake. Matt is an ardent Bitcoiner making an argument that to me seems obvious. As a long-time Bitcoiner, it has always been my dream to extend Bitcoin’s decentralization to the wider economy. That is precisely what Matt is saying: It is time for us to take our belief in decentralization to the next level. 

Edan Yago is a contributor to Sovryn and founder of CementDAO. Sovryn is a decentralized bitcoin trading and lending platform. CementDAO is a decentralized tool to unite the fragmented stablecoin ecosystem. 

We already have a decentralized currency; now we should decentralize the services through which we use that currency. I disagree, however, with Matt’s proposed solution. 

The same day Matt’s article came out, we learned BitMEX, where so many Bitcoiners have deposited their bitcoin, is under threat. Not only does this place users’ bitcoin and private information in jeopardy, it also threatens the availability of a type of  financial service that many Bitcoiners have found useful. 

Over time, all BitMEX-type services will find themselves under pressure to become regulated. They will demand users dox themselves through know-your-customer (KYC) rules. They will continue to become centralized chokepoints in the Bitcoin economy where authorities can exert pressure, control and extend their tentacles of surveillance. This is not how we build an uncensorable, permissionless economy around bitcoin. We need an alternative.

If we want to extend Bitcoin’s ethos of freedom and self-sovereignty beyond just hodling, then bitcoin services must become decentralized. That’s what DeFi is. Bottom line, nobody should be paying more attention and be more supportive of DeFi than Bitcoiners. 

There is simply no reason to build “Bitcoin DeFi” on Ethereum.

So where do Matt and I disagree? Matt suggests the way to accomplish that is by taking advantage of the DeFi services being built on Ethereum. To make this possible, he has been working hard on tBTC, a more decentralized way of tokenizing bitcoin on Ethereum. 

Ethereum, he argues, is where the action is, it is where the DeFi services are, it is where the network effects are being built. All of this is true. However, it is also true that on Ethereum, tokenized BTC, however well decentralized the token is, will always be a second-class citizen. The base currency is ether (ETH), the transaction fees are paid in ETH, the security assurances are those of Ethereum. 

For me, and I suspect for many, this is at best a major disadvantage and at worst a fatal flaw. There is simply no reason to build “Bitcoin DeFi” on Ethereum. Bitcoin layer 2 provides all the tools to do this in a bitcoin-native environment, with clearer security assurances, lower fees and without creating competing altcoins. 

See also: DeFi Dad – Five Years In, DeFi Now Defines Ethereum

The Bitcoin-sidechain called RSK is host to a growing number of Bitcoin DeFi services that provide the core financial functions. Money-on-Chain creates a bitcoin-backed stablecoin, giving Bitcoiners access to U.S. dollar-denominated funds, without having to touch fiat. Sovryn will soon provide permissionless and uncensorable spot trading, leveraged trading, borrowing and lending. 

As Matt suggests, Bitcoiners have a valuable asset and should be able to earn yield on it without going through a centralized service. That is possible today without Ethereum or any other altcoin. Bitcoin’s massive pool of users and asset value is the biggest network effect in crypto. People are waking up to the fact that Bitcoin, the original DeFi, now is gaining even more decentralized superpowers. 

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Money on Chain Launches New Bitcoin-based DEX




Money on Chain and RSK are further making the case for BTC being the hub around which defi revolves, the future is looking bright for Bitcoin.

Money on Chain, known for its Bitcoin-collateralized, dollar-pegged stablecoin DoC, has announced the launch of a new decentralized token exchange called TEX. Built on Bitcoin smart contract sidechain RSK, TEX automates token swaps using smart contracts and gives traders access to assets such as DoC, defi token BPro, RSK’s RIF token, and bitcoin-pegged rBTC.

The DEX landscape is fiercely competitive, with the likes of Uniswap, Aave, 1inch, and Curve vying for market dominance, albeit all focused around the Ethereum ecosystem. With TEX, Money on Chain hopes to capture a piece of the action while providing traders with a high level of functionality and fair price discovery. The TEX will feature two types of orders, Limit Orders and Market Maker Orders, and is already available for trading.

Following the London Gold Fix Standard

The platform relies upon a unique trading mechanism inspired by the method favored at The London Gold Fix, which sets the value of gold twice daily. Order execution will occur on the basis of “ticks,” which occur every few minutes and enable the order book to facilitate price discovery before the match is made. The frequency of ticks is determined by market activity.

“The TEX is an important piece of the Money On Chain protocol,” says Max Carjuzaa, co-founder of Money On Chain. “The decentralized order book ensures a fair and transparent price discovery process and establishes a secondary market for tokens.”

“Decentralized exchanges, together with sovereign digital identities, will play a key role in Bitcoin’s future and provide the core tools for financial freedom,” added Diego Gutierrez Zaldivar, CEO of RSK’s parent company IOVlabs.

Bringing Defi to Bitcoin

Most of the projects focused on BTC-based defi have attempted to bring Bitcoin to decentralized finance by recreating it on Ethereum. This has entailed wrapping BTC (WBTC) or otherwise custodying it on the Bitcoin network (SBTC, renBTC, tBTC) before unlocking a corresponding amount represented on the Ethereum side. Money on Chain is taking a reverse approach, by recreating Ethereum services on Bitcoin, unlocking new capabilities for BTC-backed assets such as rBTC.

The demand for BTC as collateral for lending, borrowing, and stablecoin issuance is certainly high; almost $3 billion of BTC has been issued on Ethereum. If Money on Chain and RSK can capture even a fraction of that value within the BTC-anchored ecosystem they’ve constructed, it will strengthen the case for Bitcoin defi, and may lure Ethereum developers into the house that RSK has built.

Defi Loves BTC

The number of ways in which Bitcoin can be used to interact with defi protocols and generate yield continues to increase. From the long summer of yield farming, when WBTC was used to mint tokens on “dotfinance” projects, into the winter of reinvention, when only farming projects with the strongest fundamentals have survived, WBTC has been at the heart of the action. Money on Chain and RSK are further making the case for BTC being the hub around which defi revolves, the future is looking bright for Bitcoin.

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Having obtained a diploma in Intercultural Communication, Julia continued her studies taking a Master’s degree in Economics and Management. Becoming captured by innovative technologies, Julia turned passionate about exploring emerging techs believing in their ability to transform all spheres of our life.

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How to Answer Your Family’s Bitcoin Questions This Thanksgiving




Could bitcoin replace turkey as the object of everyone’s attention this Thanksgiving? 

It happened three years ago. The last time bitcoin went gangbusters, conversations in dining rooms across America were less about giving thanks than the fear of missing out. 

“Should I buy bitcoin?” your uncle may have asked. “And what’s this about icy ohs? (Can you pass the turnips, puh-lease.)” 

It’s evident things are different this time around – and not only because many will be clinking glasses over Zoom rather than their parents’ fancy china. Despite positively effervescent markets right now, it seems like the retail crowd isn’t buying. Or if they are, they’re being awful quiet about it. 

But that doesn’t mean Mom and Pop aren’t interested in your fixation with cryptocurrency. Bitcoin has made headlines in mainstream media for breaking a new market cap. Also, due to the relentless work of such Ethereum chroniclers as Cami Russo and Matt Leising, more people are familiar with terms like “the world computer.” 

Presuming your wallet is in profit, the folks may even want to hear more about this “Mr. Nakamoto” you’ve been working for. And just what is causing the value of this bitcoin to increase?

See also: What Is Ethereum?

“Paul Tudor Jones and Michael Saylor caused the value to increase,” Matthew Graham, an actual investor and chief executive at Sino Global Capital, said. “We control speculative buying through judicious use of such tools as FOMO and FUD.”

Meltem Demirors, the chief strategy officer of CoinShares, is crypto’s own caffeine-addicted, fun-loving bomb-thrower. Your parents may recognize her as a key figure in getting the colloquial (and scatological) synonym for small-capped cryptos added to the Congressional Record. 

Ouriel Ohayon, chief executive of ZenGo, a non-custodial wallet startup that produces research reports known to grind gears among bitcoin maximalists, started his career as a tech journalist, attempting to explain the French startup scene to the world. 

Kathleen Breitman is one of the co-founders of the community-governed, smart-contract-friendly blockchain Tezos. 

Matthew Graham is CEO of Sino Global Capital, a decentralized tech investment firm based in China. He will eat your hot pot

Ahead of this autumnal feast, we convened a panel of industry experts to answer the vital questions you might expect from family and friends who haven’t thought about bitcoin since they opened a Coinbase account in December 2017. 

Is Satoshi Nakamoto the Bitcoin CEO?

Demirors: No leaders. No rulers. No CEO.

Ohayon: To be the CEO, there needs to be a company. And Bitcoin is not a company, it’s a protocol. That’s point number one. Point number two is that it does not matter, at least, anymore. Ten years in, Bitcoin is widely decentralized enough to exist without a CEO … even if it is a company. 

Breitman: Is Moses the CEO of Judaism? 

Isn’t bitcoin illegal? If it isn’t, it should be.

Demirors: No. Software and math are not illegal, although governments are trying to change that … [F]unny story: Cryptography – the reason why you can securely use the internet – was briefly banned and considered a weapon. Did not last long for, ahem, obvious reasons.

Ohayon: Like everything in life, bitcoin can be used for legal or illegal purposes. A knife could be used to cut a tomato, but also to kill someone. Because every transaction on the Bitcoin network is public, it is a very bad idea to use BTC for illegal purposes. So actually, bitcoin is the best anti-illegal currency on the planet. 

Breitman: That would really increase its street cred.

Why would I need a world computer if my desktop works just fine?

Demirors: You won’t even know you’re using it. Do you really even know how your computer works?

If people can go around spending satoshis, why can’t I go around passing Monopoly money?

Demirors: You can, BUT, it will only work if people are willing to exchange goods and services for Monopoly money. Money is just collective fiction, even the dollar. 

Ohayon: It’s the difference between paper and math. With satoshis is that you can’t print as much as you want. No one is keeping count of the amount of Monopoly paper in circulation or where they end up. Satoshis are just the opposite, mathematically proven scarce, and therefore attributable and spendable.  

Breitman: I would encourage you to try that and see how far you get.

Graham: Why would you want to buy something with bitcoin?

Why are there so many coins? Dimes, pennies, nickels, quarters and the old half-pence will do.

Ohayon: Asking why there are so many coins is like asking why there are so many websites. It’s because every protocol brings a different utility and aspect to the digital economy. 

I always keep my wallet in my front left pocket. Aren’t you asking for trouble uploading it to the internet?

Demirors: Why have a physical wallet in the first place?

Ohayon: Money has been electronic for many years now. Banks, PayPal, credit cards and many other monetary intermediaries have gone digital. But now, with blockchain, money can not only be electronic, but digitally native. The advantage is that you have a more secure protocol and proof of ownership, so you know that your money is your money. 

Breitman: I bet you can fit two Ledgers in your front pocket!

Graham: You can try a safe deposit box but actually it’s a hard wallet.

I lost all my savings betting on bitcoin in 2017! My family didn’t eat for months. Now you want me to try again?

Demirors: Bitcoin isn’t betting. Please don’t bet on bitcoin. Be reasonable. Ish. (This is NOT financial advice, I’m required to say that.)

Ohayon: 2017 was definitely not a great time to speculate on bitcoin, if that was your intention. When investing, I would not bet more than you can afford to lose. 

Breitman: Absolutely not! 

If I buy bitcoin, am I not just funding terrorists?

Demirors: No. The paper dollars in your wallet fund terrorism. The banks you hold your money with fund terrorism. Your own government funds terrorism with your tax dollars. When you own bitcoin in a non-custodial wallet, only you can spend that bitcoin. 

Ohayon: Bitcoin does not belong to anyone, so you’re not funding anyone. You are usually buying it from services like exchanges and wallets that are usually regulated companies. 

Breitman: No, sending money to terrorists is funding terrorists. 

Graham: I asked Tether but on the advice of legal counsel they have chosen not to answer.

How do you own part of a bitcoin?

Graham: The same way you can own part of a dollar. Only it’s a religion.  

See also: Still Don’t Get Bitcoin? Here’s an Explanation Even a 5-Year-Old Will Understand

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TSLA Stock Down 2% Now, Elon Musk Suggests Tesla Hatchback Model for Europe




Speaking at a virtual conference on batteries hosted by the German government, Tesla CEO Elon Musk suggested that the company could launch a hatchback model for Europe.

Tesla Inc (NASDAQ: TSLA) stock is down approximately 2% during Wednesday’s pre-market after closing yesterday at $555.38, up 6.43%. All these movements come at the time of distributing the news that the company could launch a Tesla hatchback model in Europe.

Tesla stock has been among the best performing traditional stocks during the pandemic, whereby it has experienced over fivefold rally. Notably, the company has just surpassed the $500 billion market capitalization and stands at $526.24 billion at the time of writing.

With 947.9 million outstanding shares, Tesla has been able to raise substantial capital to fund its global market venture. Hereby capable of competing with Chinese EV companies that are not only springing up fats but also growing globally tremendously.

Nevertheless, Tesla investors are very optimistic that the company will emerge among the top winners in the post-COVID period. Supported by past performance, Tesla shares are likely to reach $600 according to different analysts’ predictions.

According to the metrics provided by MarketWatch, Tesla shares have rallied over 744% in the past twelve months. In addition, they have managed to add over 563% year to date, and are now up 37.26%, 30.78%, and 25.76% in the past three months, one month and five days respectively.

There are several fundamentals that are likely to affect Tesla stocks in the near future. One is the awaited ruling if Tesla shares will be added to the S&P 500 index by next month. If this happens, it will be a huge bull confirmation that will push Tesla stock beyond the current gains.

However, Tesla stocks have had a blick past history with whale investors that might cause its shrinking in the near future. Notably, sometime last month nearly 48 million Tesla stock shares, approximately 5% of the outstanding shares – worth more than $25 billion at current prices – were sold short. Whether this was a risk mitigation method as we approach the end of year holidays or not, it is a call for alarm in the Tesla stock near-future prospects.

Possible Tesla Hatchback Model for Europe

Speaking at a virtual conference on batteries hosted by the German government, Tesla CEO Elon Musk suggested that the company could launch a compact hatchback model for Europe. “Possibly in Europe it would make sense to do, I guess, a compact car, perhaps a hatchback or something like that,” Musk noted.

He further highlighted that a small compact model has a higher demand in Europe than in the United States that most people prefer bigger cars.

If Tesla manages to significantly penetrate the European market, its shareholders will greatly benefit. Apparently, Tesla’s rising market valuation continues to shrink the gap between it and Berkshire Hathaway.

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A financial analyst who sees positive income in both directions of the market (bulls & bears). Bitcoin is my crypto safe haven, free from government conspiracies.
Mythology is my mystery!
“You cannot enslave a mind that knows itself. That values itself. That understands itself.”

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