Source
It’s effectively July 2017 in the world of decentralized finance (DeFi), and as in the heady days of the initial coin offering (ICO) boom, the numbers are only trending up.
According to DeFi Pulse, there is $1.9 billion in crypto assets locked in DeFi right now. According to the CoinDesk ICO Tracker, the ICO market started chugging past $1 billion in July 2017, just a few months before token sales started getting talked about on TV.
Debate juxtaposing these numbers if you like, but what no one can question is this: Crypto users are putting more and more value to work in DeFi applications, driven largely by the introduction of a whole new yield-generating pasture, Compound’s COMP governance token.
Governance tokens enable users to vote on the future of decentralized protocols, sure, but they also present fresh ways for DeFi founders to entice assets onto their platforms.
That said, it’s the crypto liquidity providers who are the stars of the present moment. They even have a meme-worthy name: yield farmers.
​
https://preview.redd.it/lxsvazp1g9l51.png?width=775&format=png&auto=webp&s=a36173ab679c701a5d5e0aac806c00fcc84d78c1

Where it started

Ethereum-based credit market Compound started distributing its governance token, COMP, to the protocol’s users this past June 15. Demand for the token (heightened by the way its automatic distribution was structured) kicked off the present craze and moved Compound into the leading position in DeFi.
The hot new term in crypto is “yield farming,” a shorthand for clever strategies where putting crypto temporarily at the disposal of some startup’s application earns its owner more cryptocurrency.
Another term floating about is “liquidity mining.”
The buzz around these concepts has evolved into a low rumble as more and more people get interested.
The casual crypto observer who only pops into the market when activity heats up might be starting to get faint vibes that something is happening right now. Take our word for it: Yield farming is the source of those vibes.
But if all these terms (“DeFi,” “liquidity mining,” “yield farming”) are so much Greek to you, fear not. We’re here to catch you up. We’ll get into all of them.
We’re going to go from very basic to more advanced, so feel free to skip ahead.

What are tokens?

Most CoinDesk readers probably know this, but just in case: Tokens are like the money video-game players earn while fighting monsters, money they can use to buy gear or weapons in the universe of their favorite game.
But with blockchains, tokens aren’t limited to only one massively multiplayer online money game. They can be earned in one and used in lots of others. They usually represent either ownership in something (like a piece of a Uniswap liquidity pool, which we will get into later) or access to some service. For example, in the Brave browser, ads can only be bought using basic attention token (BAT).
If tokens are worth money, then you can bank with them or at least do things that look very much like banking. Thus: decentralized finance.
Tokens proved to be the big use case for Ethereum, the second-biggest blockchain in the world. The term of art here is “ERC-20 tokens,” which refers to a software standard that allows token creators to write rules for them. Tokens can be used a few ways. Often, they are used as a form of money within a set of applications. So the idea for Kin was to create a token that web users could spend with each other at such tiny amounts that it would almost feel like they weren’t spending anything; that is, money for the internet.
Governance tokens are different. They are not like a token at a video-game arcade, as so many tokens were described in the past. They work more like certificates to serve in an ever-changing legislature in that they give holders the right to vote on changes to a protocol.
So on the platform that proved DeFi could fly, MakerDAO, holders of its governance token, MKR, vote almost every week on small changes to parameters that govern how much it costs to borrow and how much savers earn, and so on.
Read more: Why DeFi’s Billion-Dollar Milestone Matters
One thing all crypto tokens have in common, though, is they are tradable and they have a price. So, if tokens are worth money, then you can bank with them or at least do things that look very much like banking. Thus: decentralized finance.

What is DeFi?

Fair question. For folks who tuned out for a bit in 2018, we used to call this “open finance.” That construction seems to have faded, though, and “DeFi” is the new lingo.
In case that doesn’t jog your memory, DeFi is all the things that let you play with money, and the only identification you need is a crypto wallet.
On the normal web, you can’t buy a blender without giving the site owner enough data to learn your whole life history. In DeFi, you can borrow money without anyone even asking for your name.
I can explain this but nothing really brings it home like trying one of these applications. If you have an Ethereum wallet that has even $20 worth of crypto in it, go do something on one of these products. Pop over to Uniswap and buy yourself some FUN (a token for gambling apps) or WBTC (wrapped bitcoin). Go to MakerDAO and create $5 worth of DAI (a stablecoin that tends to be worth $1) out of the digital ether. Go to Compound and borrow $10 in USDC.
(Notice the very small amounts I’m suggesting. The old crypto saying “don’t put in more than you can afford to lose” goes double for DeFi. This stuff is uber-complex and a lot can go wrong. These may be “savings” products but they’re not for your retirement savings.)
Immature and experimental though it may be, the technology’s implications are staggering. On the normal web, you can’t buy a blender without giving the site owner enough data to learn your whole life history. In DeFi, you can borrow money without anyone even asking for your name.
DeFi applications don’t worry about trusting you because they have the collateral you put up to back your debt (on Compound, for instance, a $10 debt will require around $20 in collateral).
Read more: There Are More DAI on Compound Now Than There Are DAI in the World
If you do take this advice and try something, note that you can swap all these things back as soon as you’ve taken them out. Open the loan and close it 10 minutes later. It’s fine. Fair warning: It might cost you a tiny bit in fees, and the cost of using Ethereum itself right now is much higher than usual, in part due to this fresh new activity. But it’s nothing that should ruin a crypto user.
So what’s the point of borrowing for people who already have the money? Most people do it for some kind of trade. The most obvious example, to short a token (the act of profiting if its price falls). It’s also good for someone who wants to hold onto a token but still play the market.

Doesn’t running a bank take a lot of money up front?

It does, and in DeFi that money is largely provided by strangers on the internet. That’s why the startups behind these decentralized banking applications come up with clever ways to attract HODLers with idle assets.
Liquidity is the chief concern of all these different products. That is: How much money do they have locked in their smart contracts?
“In some types of products, the product experience gets much better if you have liquidity. Instead of borrowing from VCs or debt investors, you borrow from your users,” said Electric Capital managing partner Avichal Garg.
Let’s take Uniswap as an example. Uniswap is an “automated market maker,” or AMM (another DeFi term of art). This means Uniswap is a robot on the internet that is always willing to buy and it’s also always willing to sell any cryptocurrency for which it has a market.
On Uniswap, there is at least one market pair for almost any token on Ethereum. Behind the scenes, this means Uniswap can make it look like it is making a direct trade for any two tokens, which makes it easy for users, but it’s all built around pools of two tokens. And all these market pairs work better with bigger pools.

Why do I keep hearing about ‘pools’?

To illustrate why more money helps, let’s break down how Uniswap works.
Let’s say there was a market for USDC and DAI. These are two tokens (both stablecoins but with different mechanisms for retaining their value) that are meant to be worth $1 each all the time, and that generally tends to be true for both.
The price Uniswap shows for each token in any pooled market pair is based on the balance of each in the pool. So, simplifying this a lot for illustration’s sake, if someone were to set up a USDC/DAI pool, they should deposit equal amounts of both. In a pool with only 2 USDC and 2 DAI it would offer a price of 1 USDC for 1 DAI. But then imagine that someone put in 1 DAI and took out 1 USDC. Then the pool would have 1 USDC and 3 DAI. The pool would be very out of whack. A savvy investor could make an easy $0.50 profit by putting in 1 USDC and receiving 1.5 DAI. That’s a 50% arbitrage profit, and that’s the problem with limited liquidity.
(Incidentally, this is why Uniswap’s prices tend to be accurate, because traders watch it for small discrepancies from the wider market and trade them away for arbitrage profits very quickly.)
Read more: Uniswap V2 Launches With More Token-Swap Pairs, Oracle Service, Flash Loans
However, if there were 500,000 USDC and 500,000 DAI in the pool, a trade of 1 DAI for 1 USDC would have a negligible impact on the relative price. That’s why liquidity is helpful.
You can stick your assets on Compound and earn a little yield. But that’s not very creative. Users who look for angles to maximize that yield: those are the yield farmers.
Similar effects hold across DeFi, so markets want more liquidity. Uniswap solves this by charging a tiny fee on every trade. It does this by shaving off a little bit from each trade and leaving that in the pool (so one DAI would actually trade for 0.997 USDC, after the fee, growing the overall pool by 0.003 USDC). This benefits liquidity providers because when someone puts liquidity in the pool they own a share of the pool. If there has been lots of trading in that pool, it has earned a lot of fees, and the value of each share will grow.
And this brings us back to tokens.
Liquidity added to Uniswap is represented by a token, not an account. So there’s no ledger saying, “Bob owns 0.000000678% of the DAI/USDC pool.” Bob just has a token in his wallet. And Bob doesn’t have to keep that token. He could sell it. Or use it in another product. We’ll circle back to this, but it helps to explain why people like to talk about DeFi products as “money Legos.”

So how much money do people make by putting money into these products?

It can be a lot more lucrative than putting money in a traditional bank, and that’s before startups started handing out governance tokens.
Compound is the current darling of this space, so let’s use it as an illustration. As of this writing, a person can put USDC into Compound and earn 2.72% on it. They can put tether (USDT) into it and earn 2.11%. Most U.S. bank accounts earn less than 0.1% these days, which is close enough to nothing.
However, there are some caveats. First, there’s a reason the interest rates are so much juicier: DeFi is a far riskier place to park your money. There’s no Federal Deposit Insurance Corporation (FDIC) protecting these funds. If there were a run on Compound, users could find themselves unable to withdraw their funds when they wanted.
Plus, the interest is quite variable. You don’t know what you’ll earn over the course of a year. USDC’s rate is high right now. It was low last week. Usually, it hovers somewhere in the 1% range.
Similarly, a user might get tempted by assets with more lucrative yields like USDT, which typically has a much higher interest rate than USDC. (Monday morning, the reverse was true, for unclear reasons; this is crypto, remember.) The trade-off here is USDT’s transparency about the real-world dollars it’s supposed to hold in a real-world bank is not nearly up to par with USDC’s. A difference in interest rates is often the market’s way of telling you the one instrument is viewed as dicier than another.
Users making big bets on these products turn to companies Opyn and Nexus Mutual to insure their positions because there’s no government protections in this nascent space – more on the ample risks later on.
So users can stick their assets in Compound or Uniswap and earn a little yield. But that’s not very creative. Users who look for angles to maximize that yield: those are the yield farmers.

OK, I already knew all of that. What is yield farming?

Broadly, yield farming is any effort to put crypto assets to work and generate the most returns possible on those assets.
At the simplest level, a yield farmer might move assets around within Compound, constantly chasing whichever pool is offering the best APY from week to week. This might mean moving into riskier pools from time to time, but a yield farmer can handle risk.
“Farming opens up new price arbs [arbitrage] that can spill over to other protocols whose tokens are in the pool,” said Maya Zehavi, a blockchain consultant.
Because these positions are tokenized, though, they can go further.
This was a brand-new kind of yield on a deposit. In fact, it was a way to earn a yield on a loan. Who has ever heard of a borrower earning a return on a debt from their lender?
In a simple example, a yield farmer might put 100,000 USDT into Compound. They will get a token back for that stake, called cUSDT. Let’s say they get 100,000 cUSDT back (the formula on Compound is crazy so it’s not 1:1 like that but it doesn’t matter for our purposes here).
They can then take that cUSDT and put it into a liquidity pool that takes cUSDT on Balancer, an AMM that allows users to set up self-rebalancing crypto index funds. In normal times, this could earn a small amount more in transaction fees. This is the basic idea of yield farming. The user looks for edge cases in the system to eke out as much yield as they can across as many products as it will work on.
Right now, however, things are not normal, and they probably won’t be for a while.

Why is yield farming so hot right now?

Because of liquidity mining. Liquidity mining supercharges yield farming.
Liquidity mining is when a yield farmer gets a new token as well as the usual return (that’s the “mining” part) in exchange for the farmer’s liquidity.
“The idea is that stimulating usage of the platform increases the value of the token, thereby creating a positive usage loop to attract users,” said Richard Ma of smart-contract auditor Quantstamp.
The yield farming examples above are only farming yield off the normal operations of different platforms. Supply liquidity to Compound or Uniswap and get a little cut of the business that runs over the protocols – very vanilla.
But Compound announced earlier this year it wanted to truly decentralize the product and it wanted to give a good amount of ownership to the people who made it popular by using it. That ownership would take the form of the COMP token.
Lest this sound too altruistic, keep in mind that the people who created it (the team and the investors) owned more than half of the equity. By giving away a healthy proportion to users, that was very likely to make it a much more popular place for lending. In turn, that would make everyone’s stake worth much more.
So, Compound announced this four-year period where the protocol would give out COMP tokens to users, a fixed amount every day until it was gone. These COMP tokens control the protocol, just as shareholders ultimately control publicly traded companies.
Every day, the Compound protocol looks at everyone who had lent money to the application and who had borrowed from it and gives them COMP proportional to their share of the day’s total business.
The results were very surprising, even to Compound’s biggest promoters.
COMP’s value will likely go down, and that’s why some investors are rushing to earn as much of it as they can right now.
This was a brand-new kind of yield on a deposit into Compound. In fact, it was a way to earn a yield on a loan, as well, which is very weird: Who has ever heard of a borrower earning a return on a debt from their lender?
COMP’s value has consistently been well over $200 since it started distributing on June 15. We did the math elsewhere but long story short: investors with fairly deep pockets can make a strong gain maximizing their daily returns in COMP. It is, in a way, free money.
It’s possible to lend to Compound, borrow from it, deposit what you borrowed and so on. This can be done multiple times and DeFi startup Instadapp even built a tool to make it as capital-efficient as possible.
“Yield farmers are extremely creative. They find ways to ‘stack’ yields and even earn multiple governance tokens at once,” said Spencer Noon of DTC Capital.
COMP’s value spike is a temporary situation. The COMP distribution will only last four years and then there won’t be any more. Further, most people agree that the high price now is driven by the low float (that is, how much COMP is actually free to trade on the market – it will never be this low again). So the value will probably gradually go down, and that’s why savvy investors are trying to earn as much as they can now.
Appealing to the speculative instincts of diehard crypto traders has proven to be a great way to increase liquidity on Compound. This fattens some pockets but also improves the user experience for all kinds of Compound users, including those who would use it whether they were going to earn COMP or not.
As usual in crypto, when entrepreneurs see something successful, they imitate it. Balancer was the next protocol to start distributing a governance token, BAL, to liquidity providers. Flash loan provider bZx has announced a plan. Ren, Curve and Synthetix also teamed up to promote a liquidity pool on Curve.
It is a fair bet many of the more well-known DeFi projects will announce some kind of coin that can be mined by providing liquidity.
The case to watch here is Uniswap versus Balancer. Balancer can do the same thing Uniswap does, but most users who want to do a quick token trade through their wallet use Uniswap. It will be interesting to see if Balancer’s BAL token convinces Uniswap’s liquidity providers to defect.
So far, though, more liquidity has gone into Uniswap since the BAL announcement, according to its data site. That said, even more has gone into Balancer.

Did liquidity mining start with COMP?

No, but it was the most-used protocol with the most carefully designed liquidity mining scheme.
This point is debated but the origins of liquidity mining probably date back to Fcoin, a Chinese exchange that created a token in 2018 that rewarded people for making trades. You won’t believe what happened next! Just kidding, you will: People just started running bots to do pointless trades with themselves to earn the token.
Similarly, EOS is a blockchain where transactions are basically free, but since nothing is really free the absence of friction was an invitation for spam. Some malicious hacker who didn’t like EOS created a token called EIDOS on the network in late 2019. It rewarded people for tons of pointless transactions and somehow got an exchange listing.
These initiatives illustrated how quickly crypto users respond to incentives.
Read more: Compound Changes COMP Distribution Rules Following ‘Yield Farming’ Frenzy
Fcoin aside, liquidity mining as we now know it first showed up on Ethereum when the marketplace for synthetic tokens, Synthetix, announced in July 2019 an award in its SNX token for users who helped add liquidity to the sETH/ETH pool on Uniswap. By October, that was one of Uniswap’s biggest pools.
When Compound Labs, the company that launched the Compound protocol, decided to create COMP, the governance token, the firm took months designing just what kind of behavior it wanted and how to incentivize it. Even still, Compound Labs was surprised by the response. It led to unintended consequences such as crowding into a previously unpopular market (lending and borrowing BAT) in order to mine as much COMP as possible.
Just last week, 115 different COMP wallet addresses – senators in Compound’s ever-changing legislature – voted to change the distribution mechanism in hopes of spreading liquidity out across the markets again.

Is there DeFi for bitcoin?

Yes, on Ethereum.
Nothing has beaten bitcoin over time for returns, but there’s one thing bitcoin can’t do on its own: create more bitcoin.
A smart trader can get in and out of bitcoin and dollars in a way that will earn them more bitcoin, but this is tedious and risky. It takes a certain kind of person.
DeFi, however, offers ways to grow one’s bitcoin holdings – though somewhat indirectly.
A long HODLer is happy to gain fresh BTC off their counterparty’s short-term win. That’s the game.
For example, a user can create a simulated bitcoin on Ethereum using BitGo’s WBTC system. They put BTC in and get the same amount back out in freshly minted WBTC. WBTC can be traded back for BTC at any time, so it tends to be worth the same as BTC.
Then the user can take that WBTC, stake it on Compound and earn a few percent each year in yield on their BTC. Odds are, the people who borrow that WBTC are probably doing it to short BTC (that is, they will sell it immediately, buy it back when the price goes down, close the loan and keep the difference).
A long HODLer is happy to gain fresh BTC off their counterparty’s short-term win. That’s the game.

How risky is it?

Enough.
“DeFi, with the combination of an assortment of digital funds, automation of key processes, and more complex incentive structures that work across protocols – each with their own rapidly changing tech and governance practices – make for new types of security risks,” said Liz Steininger of Least Authority, a crypto security auditor. “Yet, despite these risks, the high yields are undeniably attractive to draw more users.”
We’ve seen big failures in DeFi products. MakerDAO had one so bad this year it’s called “Black Thursday.” There was also the exploit against flash loan provider bZx. These things do break and when they do money gets taken.
As this sector gets more robust, we could see token holders greenlighting more ways for investors to profit from DeFi niches.
Right now, the deal is too good for certain funds to resist, so they are moving a lot of money into these protocols to liquidity mine all the new governance tokens they can. But the funds – entities that pool the resources of typically well-to-do crypto investors – are also hedging. Nexus Mutual, a DeFi insurance provider of sorts, told CoinDesk it has maxed out its available coverage on these liquidity applications. Opyn, the trustless derivatives maker, created a way to short COMP, just in case this game comes to naught.
And weird things have arisen. For example, there’s currently more DAI on Compound than have been minted in the world. This makes sense once unpacked but it still feels dicey to everyone.
That said, distributing governance tokens might make things a lot less risky for startups, at least with regard to the money cops.
“Protocols distributing their tokens to the public, meaning that there’s a new secondary listing for SAFT tokens, [gives] plausible deniability from any security accusation,” Zehavi wrote. (The Simple Agreement for Future Tokens was a legal structure favored by many token issuers during the ICO craze.)
Whether a cryptocurrency is adequately decentralized has been a key feature of ICO settlements with the U.S. Securities and Exchange Commission (SEC).

What’s next for yield farming? (A prediction)

COMP turned out to be a bit of a surprise to the DeFi world, in technical ways and others. It has inspired a wave of new thinking.
“Other projects are working on similar things,” said Nexus Mutual founder Hugh Karp. In fact, informed sources tell CoinDesk brand-new projects will launch with these models.
We might soon see more prosaic yield farming applications. For example, forms of profit-sharing that reward certain kinds of behavior.
Imagine if COMP holders decided, for example, that the protocol needed more people to put money in and leave it there longer. The community could create a proposal that shaved off a little of each token’s yield and paid that portion out only to the tokens that were older than six months. It probably wouldn’t be much, but an investor with the right time horizon and risk profile might take it into consideration before making a withdrawal.
(There are precedents for this in traditional finance: A 10-year Treasury bond normally yields more than a one-month T-bill even though they’re both backed by the full faith and credit of Uncle Sam, a 12-month certificate of deposit pays higher interest than a checking account at the same bank, and so on.)
As this sector gets more robust, its architects will come up with ever more robust ways to optimize liquidity incentives in increasingly refined ways. We could see token holders greenlighting more ways for investors to profit from DeFi niches.
Questions abound for this nascent industry: What will MakerDAO do to restore its spot as the king of DeFi? Will Uniswap join the liquidity mining trend? Will anyone stick all these governance tokens into a decentralized autonomous organization (DAO)? Or would that be a yield farmers co-op?
Whatever happens, crypto’s yield farmers will keep moving fast. Some fresh fields may open and some may soon bear much less luscious fruit.
But that’s the nice thing about farming in DeFi: It is very easy to switch fields.

​
https://preview.redd.it/io0mkfpayel51.jpg?width=2560&format=pjpg&auto=webp&s=839666f628a9ae85fa3ef4ffb020c1c2ba598683
As the first country to industrialise in the 1760s, Britain’s manufacturing revolution set the world on one of the greatest practical and ubiquitous changes in human history. Even more extraordinary is the fact that Britain’s industrialisation remained way ahead of potential competition for decades. Only in the early 1900s did historians get to grips with the issues of causation. Max Weber’s pithy answer “the Protestant work ethic” pointed to Puritan seriousness, diligence, fiscal prudence and hard work. Others include the establishment of the Bank of England in 1694 as an essentially corollary by creating the necessary conditions for financial stability. In contrast, Continental Europe lurched from one national debt crisis to another, then through itself headlong into the Napoleonic wars. Unsurprisingly, it was not until after 1815 industrialisation took place on the European mainland where it was spearheaded by the new country of Belgium.
250 years latter with the launch of Bitcoin another revolution had begun; though this one more commercial in nature than industrial. Though the full impact has yet to be played out, the parallels between these two historical events are already striking. Bitcoin may not match the obviousness of industrialisation, but the underlying pragmatics touch on the very foundations of the non-barter economy. Like the establishment of the Bank of England, the creation of the cryptocurrency infrastructure has been prompted by ongoing and worsening threats to financial instability; systemic fault-lines created by macroeconomic challenges flowing from the 2008 crash.
For those who could “join the dots” in 2008, there was the realisation that central banks no longer existed as guardians and protectors of national currencies but the tools of creating politicised market distortions; abandoning their duty to preserve wealth in favour of creating the conditions for limitless, cheap government debt. While many of the underlying intentions were benign, inherently the process worked to punish savers and reward reckless debt.
This anticipation of on-going instability surrounding fiat currencies and the viability of crypto alternatives has proved more prescient than could have ever been previously imagined. Within a short space of time a wave of undercurrents gave rise to new vocabularies, outlooks and expectations which have impacted commercial and investment transactions, a change never more acutely observed than today, when even against the backdrop of the COVID crisis Central Banks are rushing to create their own “digital” krona, pound, dollar etc. “Digital” may represent a confusing nomenclature, however, as these are not cryptocurrencies in the true sense, and certainly not part of decentralised finance (DeFi). The digital krona does, however, manifest the increasingly powerful impact that the cryptocurrency ecosystem is having on mainstream banking and government behaviour.
As with Britain’s industrial revolution, it has taken time for the potential of cryptocoins to find more energetic traction. Over the past 12 years cryptocurrencies have moved from unknown, to novel, to significant and growing interest. As a result, profound changes are underway affecting the mechanics by which investors, the investment industry, wealth mangers and even the commercial banking sector is engaging with cryptocurrencies. This interest has quickened as we enter into a period of deep economic unknown and growing awareness that structural soundness is shifting away from traditional investment options.
Intelligent engagement requires cryptocurrency investors/wealth managers to accurately understand and correctly explicate the nature of these influences and assess their potential impact. This article suggests seven distinct elements (a non- exhaustive list) as currently ranking definitive importance:

1. Cryptocurrencies comprise account for only a tiny fraction of the global economy. At an estimated value of $375 billion, this is several orders of magnitude smaller than a world GDP of $35 trillion (2019). Assuming other factors are favourable, there is clearly room for growth.
2. Cryptocurrency success will mark the end of critical aspects of Central Banking monopoly; by revealing the fictitious nature of fiat currencies as a principle; by offering a more competitive vehicle for facilitating commercial transactions; and providing a more stable medium to store monetised assets. Apart from stability, cryptocurrencies offer real returns on “cash” deposits, something which the fiat banking system has long since abandoned. (The reasons for the latter are deeply significant and will be followed up in a subsequent article).
3. Cryptocurrency success will hasten the end of the dollar monopoly in global commerce. Indeed, at current trending, changes in trading mechanics may speedily evolve to the point that such “reserve currencies” no longer have a function at all. Analysts once speculated that it was only a matter of time before the Chinese yuan displaced the dollar, in the same way that the dollar displaced the pound. The edifice which supports the concept of a “global reserve currency” is weakening. The latter’s demise will have significant implications regarding reducing political influence over global finance, as well as nations’ abilities to run longterm balance of payments deficits, current account deficits and borrow at little or no interest.
4. Cryptocurrencies as an ecosystem—assuming the current direction of evolution continues—will increasingly constrain, redirect and set the parameters to government macroeconomic policies. Certainly sound alternatives to fiat currencies will drive the latter to the periphery of commercial life, concomitantly reducing the number of tools the nation state has at its disposal to regulate or respond to changing economic conditions. This especially means setting meaningful interest rates. Above all, it means that government financial engagement can no longer be a rule unto itself, it will have to engage by the same principles as everyone else. A level playing field here has dramatic implications—and will again be picked up in a subsequent article.
5. Cryptocurrencies represent a wider range of disruptive elements affecting the commercial ecosystem. Among the most direct is the ability to raise finance or enter into other commercial transactions with little to no red tape, intrusive regulation or political interference. In short it de-politicises, de-institutionalises and de-centralises investment and payment options, while retaining many of the protective and other beneficial aspects present in traditional finance.
6. Cryptocurrencies offer rapid commercial advances enfranchising the one- third of the global population who do not have a bank account—but do have a mobile phone—and concomitantly enable business that currently cannot accept electronic forms of payment to move into digital commerce. In the way that cellular communication revolutionised sub-saharan Africa in the early 2000s, so we may anticipate some parallel here as regards ease and ubiquity of payment “wallets” and their positive impact on developing economy dynamics.
7. Cryptocurrency potential increasingly offers a route to security and liquid asset preservation/growth in a world where fundamentals are being shifted out of all recognition; driven by economic policies predicated firstly on the priority of COVID management and secondly on the move away from rules-based multilateralism towards bilateralism. Global cooperation is yielding to the demands of national integrity, security of supply and highly aggressive competition in key enabling technologies such as 5G, AI, quantum computing and encryption, which themselves will have as profound impact on cryptocurrency evolution as the creation of the bitcoin itself.

Against the backdrop of the essential limits of fiat currencies, current geo- macroeconomic policies and a new emerging world order, cryptocurrencies offer vast potential:

• An efficiency facilitating frictionless commerce/investment.
• A medium of stability against the backdrop of uncertainty and inflation.
• Increased security in value transfer and wealth management.
• Optimum autonomy in an increasing intrusive climate.
• “Cash” asset preservation/growth in a world of negative interest rates.

In all this we may well have come full circle to 1694 and the stability and security that the establishment of the Bank of England was intended to entrench—but now it is now de-centralised finance that will get us there.
Article source: https://www.finxflo.com/news/detail/5127

​
https://preview.redd.it/mnxeb74hk4j51.jpg?width=990&format=pjpg&auto=webp&s=32d152a7495971c10e1af12185abe5e77b61fd14
​
How popular is DeFi?
Link, known as the leader of the oracle machine, has increased by 305.19% for the past three months, with an investment return of 17,052%, climbing to the fifth spot in the cryptocurrency ranking list by market value in the short term;
Since its issuance, YFI, which has soared 350 times all the way, has attracted 630 million US dollars of investment in 5 days, and was even dubbed the next Bitcoin in this circle;
From Comp for lending, KNC and BAL, governance tokens for decentralized exchanges, to SNX which is a stable currency payment network, various governance tokens of the DeFi ecosystem have emerged in an endless stream, stirring the blood in the market.
Such a boom is not only reflected in the currency price, but also pushes the brand new DEX based on the AMM (automated market making) model an overnight hit. UniSwap, known as the next-generation casino, has surpassed the world's first-tier centralized exchanges such as Binance, OKex, and Huobi in user activity, daily trading volume, and daily turnover.
With the rapid rise of UniSwap, the DEX threat theory has once again triggered heated discussions among the media and communities in the blockchain industry.
DEX on the Rise
The success of UniSwap is by no means something accidental. As early as 2018 when centralized exchanges suffered the hacker theft one after another, Vitalik Buterin, founder of Ethereum, predicted that the future lay in decentralized exchanges and that Ethereum, by developing a "better" decentralized platform, could empower the cryptocurrency community to regain the dominance from the centralized cryptocurrency exchange.
To realize the decentralized concept of returning to users their asset ownership, geeks in the blockchain industry have made many attempts.
Kyber Network, Bancor, Balancer, 0X, Curvefi, etc. are all DEXs based on Ethereum blocks. For a long time, affected by the performance of Ethereum and cross-chain issues, these DEXs were once stagnant.
With the lessons learned from Ethereum DEX, newcomers to the DEX have focused on high performance, high TPS, and rich assets as the ultimate goal for product development.
Amid the DEX threat theory, major exchanges have deployed their own public chain DEX products in a response to their respective development strategies: Binance launched Binance DEX on its Binance Chain, and Bittrex Exchange unveiled Ethfinex on the Ethereum and EOSfinex on the EOS blockchain, two platforms where users can exchange for fiat currencies; last year, CoinEx officially launched CoinEx Chain, a public chain dedicated to decentralized transactions, followed by CoinEx DEX.
Since the birth of the DEX in the blockchain world, this field has never run out of competition.
By independent development or other’s advantage?
From 2017 when it was established to 2019 as it stabilized, DEX has witnessed its annual trading volume skyrocketing from less than US$5 million to over US$2.5 billion. As DeFi gains fame and grows rapidly, DEX has grown into the most popular source of money, attracting a flood of speculators. In the past month, the trading volume of the global cryptocurrency market DEX has exceeded US$ 4 billion, more than twice the figure across 2019.
In the past two years, despite the increasingly in-depth exploration in the DEX, the cross-chain issue remains a stumbling block in its development path. DEX will not outperform CEX in the trading experience until a cross-chain solution is worked out.
The concept of DeFi went viral in 2019. With the continuous improvement of the DeFi ecosystem, the current Ethereum blockchain has developed into a complete decentralized financial system, covering mortgage lending, interest from deposit, leveraged trading, token exchange, identity authentication, and other infrastructure essential to traditional financial systems.
In addition to the mouth-watering profit, the DeFi ecosystem has also brought along explosive growth in both the type and quantity of digital assets, making DEX a market favorite. Compared with the DEX dedicated to public chains, the Ethereum-based DEX has been equipped with more possible functions and thus become more attractive thanks to the comprehensive supplementary infrastructure on Ethereum.
This also presents DEX pioneers with new opportunities. Dubbed “Swap’s summer”, the summer of 2020 has seen a market rush in Swap development after UniSwap became a hit.
Miniswap, Justswap, and btswap are no more innovative than UniSwap according to their product structures and white papers.
By comparison, OneSwap has injected unique essence into its product design and governance model based on UniSwap's automated market making.
Upgraded UniSwap
OneSwap, which has a double mining model + order book, has received an investment of tens of millions from CoinEx even before the product is launched. It is known that OneSwap is jointly developed by a group of technology geeks who have engaged in the cryptocurrency community for many years. The project was initiated by a member of the team in an attempt to upgrade UniSwap after he experienced the convenient AMM enabled by UniSwap.
Without limit orders, users have to trade in the price set by the platform, which, however, compromised their experience. In addition, the lack of liquidity mining and transaction mining rewards cannot reduce the losses of liquidity providers caused by unilateral market conditions.
"DEX still has much room for perfection, and could even surpass CEX in trading experience"
The OneSwap development team always believes that UniSwap still has a long way to go before it becomes the strongest DEX in the DeFi ecosystem. They have endeavored to, relying on their abundant experience in exchange product development and digital currency trading, create the most powerful DEX product in the DeFi ecosystem based on smart contracts.
OneSwap is called the “upgraded UniSwap” in the community. By the combination of the Constant Product Market Maker (CPMM) model in the Uniswap project and the on-chain order book, it reduces restrictions on users’ trading, and, through its OneSwap Wallet, improves user interaction methods and further enhances their experience in trading and product usage.
OneSwap boasts one-click token issuance and listing essential to DEX. Unlike the listing review mechanism on Binance DEX, the setting of OneSwap is more consistent with the concept of decentralization. Anyone can put his or her good projects and ideas, if any, into practice through OneSwap without permission.
In terms of product design, OneSwap will add to its function menu the Candlestick chart, order form, and depth chart according to user habits, apart from limit orders. These functions will offer OneSwap users an experience as smooth, easy-to-use, and convenient as in the CEX.
A new source of money? A two-pronged platform with transaction mining + liquidity mining
To support on-chain governance, OneSwap will issue a ERC20 governance token called ONES. The total number of ONES remains constant at 100 million, 50% of which will be used as community funds to support the construction of the OneSwap ecosystem and 50% will be owned by the OneSwap team. Community funds can be applied for through on-chain governance. 5% of the part held by the team will be unlocked initially, and the rest will be unlocked at a rate of 5% every six months until all is unlocked after four and a half years.
After the OneSwap product was launched, the OneSwap team will take part of the initially unlocked tokens as airdrop rewards for the open beta. Then OneSwap will officially start liquidity mining and transaction mining, and the governance token ONES will also be simultaneously launched on centralized trading platforms across the world. The first round of mining activities will last for one month, and mining rewards are yet to be made public.
Liquidity mining is a popular way of obtaining governance tokens in the DeFi ecosystem. Well-known DeFi projects including COMP, Cure, and Banner have all enabled liquid mining.
Transaction mining could date back to 2018 when Fcoin grew popular.
The transaction mining model initiated by Fcoin in 2018 once set off a bull market that year, pushing many investors into financial freedom in the rush of transaction mining. In addition, transaction mining based on the DeFi ecosystem is still a blue ocean, which is not common in the current market. The success of OneSwap's double mining model, if possible, would surely start a craze in the cryptocurrency market.
The OneSwap team has not yet announced specific mining rules, but disclosed that it has developed the smart contract code. To ensure the product security, OneSwap will invite three well-known security agencies in the blockchain industry to audit the code and announce the auditing results in early September at the soonest.
Conclusion
DeFi did not rise to fame without reason in 2020. Such overnight popularity is an inevitable result of Ethereum's efforts to build a decentralized consensus mechanism and improve infrastructure in the past few years. Ethereum has almost become the only public chain in the DeFi circle and the only construction base for well-known DEX. If OneSwap succeeds, it means a huge breakthrough for both DeFi and Ethereum, and decentralization in its true sense is around the corner.

[Today's Hot Tips]
1. [Vitalik Buterin: The upper limit of supply is a security flaw of the blockchain]
In the morning of August 8, Samson Mow, Chief Strategy Officer of Blockstream, interacted with Vitalik Buterin on Twitter. Samson Mow asked Vitalik Buterin, "Do you think the upper limit of supply is a security flaw of the blockchain?" To this, Vitalik Buterin responded that it was yes. The supply cap will prevent people from receiving guaranteed rewards, thereby preventing people from obtaining any particular level of assurance of blockchain security.
2. [Ethereum core developers: a significant increase in block confirmation time does not apply to Ethereum]
According to CoinPost's news on August 8, the two 51% attacks on ETC also triggered discussions in the Ethereum community. Among them, some members believe that measures to greatly increase the block confirmation time can also be applied to Ethereum. But the core developer of Ethereum, Peter Szilagyi, said it was unnecessary. He believes that the current Ethereum chain has already run many DeFi projects. If the number of confirmed blocks is large, it will take a lot of time to confirm the approval, which will reduce the usefulness of the Ethereum chain.
3. [Tether company newly issued 120 million USDT]
Whale Alert data shows that at 01:28 on August 8, Beijing time, Tether issued 120 million USDT. The transaction hash is: 0xb4c7a4f05dd14248aa01e4e5f05bf3d9aeefdbe12dc1b15e4566410e15e14ca2.
[Today's market analysis]
Bitcoin (BTC)BTC continued to fluctuate downwards since the early morning. After it fell to a minimum of 11322.1 USDT around 2:30, it began to rebound continuously. At present, the overall BTC has rebounded to around 11,600 USDT. Most mainstream currencies followed the market trend in the early morning and rebounded slightly after a shock drop. BTC is currently reported 11609.2 USDT on LOEx Global, a decrease of 0.21% in 24H.
https://preview.redd.it/irxklav9fqf51.png?width=554&format=png&auto=webp&s=010fb168a5b2714c64705a8b79a6ff397cfdb0fc
I think it is similar to the market last year and this year. Bitcoin is rising steadily. There is an active and representative mainstream currency that has increased more than Bitcoin, and altcoins and sub-mainstream currencies have achieved sector rotation. In fact, if you want to talk about the sector market, it has not stopped since the market awakening in 2019. The middle of 2019 is the platform currency, the latter is staking, and then there is the halving carnival in the first part of 2020, and then it will be the DeFi carnival after March 12.
The above are all the market quotations of a whole sector, at least two or three typical mainstream and sub-mainstream are flying with a lot of altcoins. So in fact, if you look at it from this dimension, the cryptocurrency market has actually begun to mature, and it is no longer that all currencies only follow the rise and fall of Bitcoin. It is almost done now, that is, coins other than Bitcoin can bring traffic to the circle by themselves, then this market becomes.
Many people asked me which tracks I should pay attention to if the bull market continues in the second half of the year. Actually, I think the sector rotation will definitely continue to happen, but investing in this kind of thing is something that everyone knows, it is not so easy to make money. However, it is estimated that there will be shocks in the second half of the year, but there are opportunities. This market should become more and more mature, in addition to Bitcoin, there are also sector rotations.
Operation suggestions:
Support level: the first support level is 11000 points, the second support level is 10800 integers;
Resistance level: the first resistance level is 12000 points, the second resistance level is 12500 points.
LOEx is registered in Seychelles. It is a global one-stop digital asset service platform with business distribution nodes in 20 regions around the world. It has been exempted from Seychelles and Singapore Monetary Authority (MAS) digital currency trading services. Provide services and secure encrypted digital currency trading environment for 2 million community members in 24 hours.

​
https://preview.redd.it/f9f8sdabmm851.png?width=1200&format=png&auto=webp&s=c035a14edf1bffeceee3db7dba24e28bb6cdc653
The currency founding block was born on January 3, 2009. Satoshi Nakamoto designs that the miners can obtain 50 BTC rewards with the packaging of one block. The number of bitcoins created about every 10 minutes which has halved every four years from 2012. Since the maximum supply of bitcoins is 21 million, halving means it will take longer for all bitcoins to circulation. But it also means there will be limited bitcoins over time. Historically, halving bitcoin has proven to be an important catalyst for a new bull market in the currency.
On November 28, 2012, bitcoin been halved for the first time, alongside with block awards reduced from 50 BTCS per 10 minutes to 25. The total issued amount of BTC is 21 million, with the improvement of people’s cognition and consensus on Bitcoin, the scarcity of Bitcoin shows obvious after halved. While other factors in the market remain stable, the relationship between supply and demand will determine the price of goods.
In 2012, before the halving, the price of Bitcoin was around $12. After November 28, the price rose to the peak of $1,175. On December 4, 2013, the price doubled by 100 times and set an all-time high for Bitcoin at that time. This has helped the earlier bitcoin owners to achieve wealth freedom and increased the public awareness of the value of bitcoin.
On July 9, 2016, the 420,000th bitcoin block was completed, and the block reward was halved for the second time, which reduced from 25 BTC in 10 minutes to 12.5. This halving increased the scarcity of Bitcoin and alongside with the bull market of Bitcoin again.
At the second halving, the price of bitcoin was around $660, after the halving, the price firstly experienced more than three months of backtracking, then suffered over seven months of sideways trading, eventually skyrocketed. By December 16, 2017, the price of Bitcoin reached $19,991 at its peak, a new record with an increase of nearly 30 times.
After twice time of bull markets in which bitcoin was halved, many institutions stepped into the market, countless investors saw the infinite possibilities of its future. Image how long would it take a traditional industry to multiply its capital 30 times? But in the currency circle, it only takes one year, which is why institutions and retail investors are unanimously bullish on Bitcoin, and many even use it as a tool to avoid risks.
This year marks the third time that bitcoin has halved. On May 12, the number of bitcoin block awards was reduced from 12.5 to 6.25. According to the results of the previous halving, where does the price will go?
​
https://preview.redd.it/9hgnln2emm851.png?width=900&format=png&auto=webp&s=ce37be510e643d9aa2daa690ec4a2b569b771508
Through the halving, numerous investors have seen the huge business opportunity behind Bitcoin. In earlier 2020, many large organization institutions started to lay out BTC. According to a recent report released by Glassnode, the number of whales that holding more than 1,000 bitcoins has increased sharply since 2016. This data reflects a strong bullish signal after Bitcoin halved for the third time.
After the first time of halving, the price of Bitcoin increased more than 100 times, and after the first time of halving, the price of Bitcoin increased more than 30 times. History doesn’t repeat itself — but it often rhymes. According to Lucian, the chief analyst at BitOffer Exchange, said that the bitcoin will have a bull market within a few months after the halving, with the increase of at least 10 times, that is, it is expected to break the $100,000 price.
Therefore, it is the best time to buy Bitcoin. However, rather than buying Bitcoin, it is better to trade Bitcoin ETF at BitOffer, which starts with a minimum yield of 3 times. Besides, it also includes the intelligent dynamic warehousing mechanism and the calculation of fund compound interest, with a maximum yield of 17 times. If the price of bitcoin goes up more than 10 times, the ETF will go up as much as 170 times. Without a doubt, the Bitcoin ETF is the best investment choice.

We come again from the point of view of other male chain, from the etheric fang this half a year's trends, is indeed is in front of the chain, by comparison, EOS has quick near the bottom, compared two archduke chain, it is easy to see that gap, and more fire such as BSV, because Mr Ben chung regular things, so pull up plate to fairly quickly.
So what are the factors driving ethereum up?

1. Bitcoin halving hotspot follows the market. This year, bitcoin has halved every four years, leading to a mini-bull market and a decent rally. Ethereum's price swings are particularly relevant to Bitcoin, so ethereum has had a pretty bad run. While 312 intervened and Ethereum's DeFi project was de-leveraged within a day, prices plummeted, but with the recent correction and the effect of halve Bitcoin, they quickly rose back.
   
2. Rise of DeFi Project. Ethereum is by far the most promising of all the public chains, with a large DeFi project running on it, and the funding is getting bigger and bigger, with the lock up approaching $1 billion so far. A lot of Ethereum has been locked up as collateral, which has helped the price quite a bit, and the DeFi project has also helped the price a bit.
   

https://preview.redd.it/qbo9z80bn0551.png?width=831&format=png&auto=webp&s=2edaffdb459cac5c3114abed021b54f591f32902

1. Expectations for Ethereum 2.0. The biggest hype this year has been about the prospect of Ethereum 2.0, but the reality is that ethereum 2.0 is likely to be around for four more years, and is currently in phase zero of the beacon chain. Phase 1 will be completed in 2021 and Phase 2 in 2023. Ethereum's core developer Gavin Wood left to work on Boca, resulting in a project that was extremely slow and too heavy to start at will. But it is a good thing that such expectations can drive up prices.

https://preview.redd.it/5by38dhin0551.png?width=800&format=png&auto=webp&s=a8570f349501879626f92bbe110457e3b920cb11
The first is that the rally in US stocks after the outbreak of the virus has now almost run its course, and any subsequent fall in US stocks will lead to falls in other financial products. Currency circle word actually can from another Angle, such as the incremental capital is small, the market now is a stock fund, the currency is currently out of state sideways shock, as long as a touch 10000 u are soon, higher kinetic energy is insufficient, so as long as a drop could be carried forward, the etheric fang at present with the linkage of the COINS is quite large, so it would probably have to be together is brought down.
The second reason, which has no scientific basis, is the kind of analyst who either has a boom or a bust today and cannot rule out a sideways move.
The third reason is that it is better to flip a coin according to this idea. The point of view is to support one's own point of view, relying on superstitious words, and what is the difference from those "masters".
The fourth reason is wrong and does not specify a specific time period. ETH has done well in the past, and has produced a bunch of latches, which makes no logical sense and it is doubtful that any of these reasons are arbitrary. After 312, for example, there is very little hanging around, and when you look at this, it feels like these reasons are particularly loose.
The fifth reason, USDT secondary does not enter the coin circle, which I believe many people want to see curse. So is USDT, with a market value of 65.2 billion yuan, for decoration?
Conclusion: After reading the above five reasons, Tesla felt that this person was a magic stick, who could really say little and many things were illogical. More like that kind of bull market teacher, everyone is a great god, a bear market down did not see a few. So we have to look very carefully at what someone else is saying to see if it's on top of the point, if there's something serious to back up his argument. In the short term, the price of a currency is a question of God. In the long term, the price of a currency is more likely to see a moving trend than a broken line. In addition, currency investors encounter such information that clearly tells you the trend of the market, and there are quite a few people in the message, must pay attention to, do not look at the surface, many are conformity, to dig into the inner things. Listen to others, make your own decisions, and have your own judgment is better than listening to others.
And then another thing, the hot area this year is DeFi, most of the DeFi projects are exploding, the biggest jump is Lend, nearly 30 times so far, and other projects and derivatives have gone up quite a bit.
https://preview.redd.it/ud0gvnmwn0551.png?width=587&format=png&auto=webp&s=a390f0c7f2d6af3bda256a2b19472d1b6cbdb59b
There is plenty of room for improvement, judging from the steady growth of users and funding for DeFi's projects. Especially in the place closest to the landing of blockchain, there are a lot of stories to tell, but at present, the danger level is further increasing, especially if the market is not ideal in the next six months. DeFi's biggest problem at the moment is the fear that markets will suddenly fall off a cliff, ethereum's network will be blocked, resulting in massive mortgage liquidations and a pile of dead bodies.
Although this track is still a great possibility, but those smart people layout very early, now it is time to ship the point, to layout the next direction. There are limited funds on the floor, the DeFi project is overvalued, the entry risk rate is now high, the yield is very low, so it is certain that some people will come in after the lag of the market information and get caught at the high point.
So the question is, if DeFi doesn't work, what else does? So far we know about Dex, DeFi, games, cloud storage, cross-chain, payments, anonymity, and more.

Written by the CoinEx Institution, this series of jocular and easy to understand articles will show you everything you need to know about major cryptocurrencies, making you fully prepared before jumping into crypto!
​
https://preview.redd.it/ryvcznqspe451.jpg?width=720&format=pjpg&auto=webp&s=5fa91e26288d7b0a624113ed21172cc9fd5624a3
Monero, or XMR for short, is an open-source cryptocurrency that is safe, reliable, private, and untraceable. It can run on Windows, Mac, Linux, and FreeBSD, and is known as one of the most private cryptocurrencies. In 2018, Monero already ranked 10th in terms of trading volume, with its market value beyond 1 billion US dollars, an evidence for its great fame in this field.
By a special method in cryptography, Monero ensures that all transactions remain 100% irrelevant and untraceable. Perhaps after reading this article, you will understand why it is so special and popular in the increasingly transparent and traceable cryptocurrency circle (After all privacy comes first!).
In fact, many large cryptocurrencies in the world are not anonymous. All transactions on Bitcoin and Ethereum are made public and traceable, which means that anyone can eavesdrop on transactions flowing into and out of the wallet. That has given rise to a new type of cryptocurrency called “privacy currency”! These “privacy currencies” hide encrypted transactions by adopting specific types of passwords. One typical example is Monero, one of the largest privacy cryptocurrencies in the world.
Monero was created on April 18, 2014 under the name BitMonero, literally the combination of Bit (Bitcoin) and Monero (the “coin” in Esperanto). In five days, the community decided to change its name to Monero.
Interestingly, Monero’s creators valued personal privacy and tried to behave in a low-key manner with pseudonyms instead of the real names. It is said that the Monero major contributor’s nickname is “thankful for today”, yet this guy has gradually disappeared from public view as Monero developed day by day.
Unlike many cryptocurrencies derived from BTC, Monero is based on the CryptoNote protocol. It is also the first branch based on the Bytecoin of CryptoNote currency. Here is some information about Bytecoin: BCN, for short, is a decentralized cryptocurrency with a high degree of privacy; it has open-source codes that allow everyone to contribute to the development of the Bytecoin network; and the Bytecoin network provides global users with instant private transactions that are not traceable and at no additional cost.
Yet, as a branch of BCN, Monero outshines its parent in reputation by being different in two ways. First, Monero’s target block time was reduced from 120 seconds to 60 seconds; second, the issuance speed was cut by 50% (which reverted to 120-second residence later, with the issuance time maintained and the reward for each new block doubled). By the way, during the fork, the Monero developers also found a lot of low-quality codes and then refactored them. (That is exactly what geeks will do)
Monero’s modular code structure was also highly appreciated by Wladimir J. van der Laan, one of the core maintainers of Bitcoin.
Monero values privacy, decentralization and scalability, and there are significant algorithm differences in blockchain fuzzification, which sets it apart from its peers. How private is it? Here are more details.
1. Safe and reliable
For a decentralized cryptocurrency, decentralization means that its network is operated by users; transactions are confirmed by decentralized consensus and then recorded on the blockchain irrevocably. Monero needs no third party to guarantee the safety of funds;
2. Privacy protection
Monero confuses all transaction sources, amounts, and recipients through ring signatures, ring confidential transactions, and invisible addresses. Apart from all the advantages of a decentralized cryptocurrency, it is by no means inferior in safeguarding privacy;
3. Unable to track
The sender, the receiver and the transaction amount of all Monero transactions must be anonymous by default. The information on the Monero Blockchain cannot be matched with physical individuals or specific users, so there is no trace to track;
4. Scalable
Everyone knows that Bitcoin’sability to process transactions has always been limited by the scalability issue; as we have mentioned before in the introduction of Bitcoin, the block size of 1MB makes things difficult. But Monero’s developers have created a system that allows the network to process more transactions when needed; what’s more, Monero does not have any “pre-set” restrictions on block size.
Of course, this also means that some malicious miners may block the system with large blocks. To prevent this from happening, Monero has worked out countermeasures: the block reward penalty of the system.
On October 18, 2018, Monero’s latest hard fork changed the consensus mechanism algorithm to CrypotoNight V8. In this hard fork, it introduced the BulletProff bulletproof protocol, which can also effectively reduce the transaction fee of miners without disclosing transactions
It is said that Monero will issue about 18.4 million XMR in around 8 years. Moreover, it eclipses its counterparts in distribution — with no pre-mining or pre-sale, all block rewards will be left to miners by means of the POW mechanism.
Here is the reward scheme of Monero in two stages:

1. Acceleration: mine 18132000 XMR before May 2022;
   
2. Deceleration: Deceleration starts right after 18132000 XMR are mined, and there will be a reward of 0.6XMR for each block mined afterwards. In this way, the overall supply will be kept on a small scale and decelerated.
   

Monero is also excellent in its development concept that is designed to be anti-ASIC from the very beginning. Here is a brief introduction to ASIC (Special Application Integrated Circuit).
Due to the specificity of ASICs, specially designed ASICs can usually have much higher hashrate than general CPUs, GPUs, and even FPGAs — that makes hashrate excessively centralized and makes it vulnerable to the monopoly of single centralized institutions. Yet the cryptonight algorithm used by Monero allows most CPUs and even FPGAs to get involved and get mining rewards, instead of making GPU the only one that can efficiently mine.
In other words, Monero’s core development team will modify the consensus mechanism algorithm and have a hard fork after some time to ensure its strength against ASIC and the monopoly of hashrate.
However, although Monero has been designed against ASICs to avoid centralization, nearly 43% of its hashrate is still owned by 3 mining pools; in addition, it is not a BTC-based currency, making it even harder to introduce some elements. Of course, Monero is not that newbie-friendly, and thus has not been widely accepted.
Yet each cryptocurrency has its own features. As long as Monero keeps improving its privacy, it will definitely attract increasing followers. If you are interested in Monero, welcome to CoinEx for exchange or trade.

About CoinEx

As a global and professional cryptocurrency exchange service provider, CoinEx was founded in December 2017 with Bitmain-led investment and has obtained a legal license in Estonia. It is a subsidiary brand of the ViaBTC Group, which owns the fifth largest BTC mining pool, which is also the largest of BCH mining, in the world.
CoinEx supports perpetual contract, spot, margin trading and other derivatives trading, and its service reaches global users in nearly 100 countries/regions with various languages available, such as Chinese, English, Korean and Russian.
Website: https://www.coinex.com/
Twitter: https://twitter.com/coinexcom
Telegram: https://t.me/CoinExOfficialENG
Click here to register on CoinEx!

​
https://preview.redd.it/d3ugwduba7451.png?width=530&format=png&auto=webp&s=3997304a338cb011088d157d32f88ebfba6d4551
I am a faithful believer in bitcoin. Over the past ten years, countless counterfeit coins have been rising and falling. Only mainstream digital currencies such as bitcoin and Ethereum have stood firm and looked at the situation in the currency circle.
Nowadays, the ecological chain of the currency circle has been monopolized by the vast majority of giants, and there are too few opportunities for small retail investors to participate. The first opportunity to make money is mining and the second is exchange. The exchange is now a foregone conclusion, and for ordinary investors, the threshold for mining is too high. In addition to the lack of access to cheap electricity prices, expensive mining machines and excellent technology, individuals who want to mine will also face risks such as "insolvency" of the currency mined out by the elimination of mining machines. Can small retail investors never participate in mining?
In fact, there has been "cloud mining". The so-called cloud mining is the remote mining by purchasing the cloud computing power based on the miner, and the mining of digital currency issued by the workload certification mechanism, including bitcoin, ether, litecoin, etc.
Among them, the platform is responsible for purchasing, setting up and maintaining mining machines. You only need to purchase basic costs such as computing power and pay for electricity, and you can share mining revenue every day. It's very simple, that's what attracted me at first. In the early days, when I bought 10 mining machines to dig in my own home, the noise, heat dissipation and renewal made me almost collapse.
https://preview.redd.it/hpl3zk7ha7451.png?width=640&format=png&auto=webp&s=f35c34f27cc14a365b3a627222fad20136d89db3
But I took part in the "cloud mining" and found that there were many big holes, such as:
1、 The platform may be a liar.
Some platforms don't have mining machines at all, and so-called mines are all scams. The so-called computing power you buy on the platform and the increasing balance of account mining are just numbers. Finally, the platform runs away, losing nothing.
2、 The platform is sold in disguised form to eliminate mining machines.
In order to sell the out of date mining machines improperly, some platforms will package the out of date mining machines as cloud computing power, sell them through cloud computing power, and pass the risk on to users. After Xiaobai bought cloud computing power, he found that it was impossible to recover the cost. Because the efficiency of the miner is too low, the recovery of the cost is far away. When the revenue is not enough for the electricity fee, it will automatically stop mining, and the user's money will also drift.
3、 A staggering price of electricity.
There are also platforms that take advantage of users' ignorance to do something about electricity bills. For example, at present, the cost of mining electricity in large mines is about 2-3 gross, but the platform charges more than 6 gross. The miners know that electricity is the biggest cost of mining. In the end, it may appear that the revenue is not as high as the electricity fee, and the users suffer huge losses.
To be honest, the "cloud mining" is not as beautiful as I thought. The platforms I participated in not only didn't make money, but even returned the original cost is a problem. These blood lessons let me deeply understand that only when I really catch the cost in my own hands and see the real mining machine and income, can mining really make money.
This year, on the recommendation of my friend, I noticed a project called Forbes. The project itself is a blockchain cross chain technology, but its mining business also serves the mortgage nodes behind it. They made a "miner Alliance Plan". They studied and found that this model overturned my cognition of the mining circle. I was very excited to find that the project had been completed before the investment After passing on the risk, if you are also a believer in blockchain technology, you can discuss the highlights of this mode with me.
https://preview.redd.it/66qmycaua7451.png?width=558&format=png&auto=webp&s=1a92de15a3e4448e49d8f304d07adc78d53874ac
First, the cost of the mining machine is fully returned in the form of smart contract.
During a period of time when Forbes main network goes online, users can use collateral parallel chain assets (such as usdt, BTC, etc.) to lease computing power to deploy mining machines in global mines. During the lease term, the deposit is returned through smart contract according to the number of days. Forbes started the plan of Forbes miner alliance, used market funds to realize the rapid scale of the mining pool, and realized the stable growth of mining profits.
To tell you the truth, my heart is about to crack. Many cloud mining platforms I have participated in, I can't return the money for buying the mining machine to you without telling the quality of the mining machine, but the cost for buying the mining machine on Forbes is returned to you through the smart contract. We all know that smart contracts are automatically enforced. Even if the mining revenue is 0, your cost will be 100% returned!
Of course, when all the cost money is returned to you, the miner is owned by the platform. It's easy to understand that the platform is not for charity, which means that you have recovered your miner at the same price, and you can still place an order to buy it again. Secretly, when you buy it again, you can choose a new generation of mining machines with higher mining efficiency. Isn't it beautiful!
Second, the miner alliance plans to accumulate consensus, thick deposit and thin release Bureau GFS miner
In the early days, users took part in mining 0 cost to make profits, but Forbes actually did not only make profits through mining. As we all know, bitcoin mining is a node of bitcoin network, contributing to the stability of the node. Similarly, Forbes initiated the miner Alliance Plan in the early stage, in order to let more nodes join in at a low threshold and accumulate a broader consensus. After the Forbes network becomes more robust and stable, Forbes will launch its own exclusive miner and dig the token GFS of the chain.
As a representative project of blockchain 4.0, the appreciation of GFS is inevitable. At present, the trading of GFS secondary market has increased by more than 10 times in a week. With the continuous extension of parallel chain and the continuous exploration of financial business, there is almost no doubt that the growth of GFS exceeds that of bitcoin in a year. If you want to obtain GFS, you must participate in the mining of Forbes.
Participating in bitcoin mining is actually to accumulate consensus for Forbes, and in fact, to contribute to Forbes nodes.
Therefore, early users who participate in bitcoin mining are likely to get the reward of GFS earlier.
Here, I think the most conscientious part of the project is to launch its own project token GFS in the later stage with great confidence. Many of the swindler projects I know are all about publicizing "one machine, more digging". Some of them can only dig out their own tokens. However, the tokens dug out are all air. Once the project party runs away, it will lose its life. Forbes can only dig bitcoin at first, only bitcoin is the real digital gold. If you want to dig Forbes' GFS coin, you have to wait until the project is robust and ecological! So to put it another way, even if the Forbes project fails, you can still make money by digging bitcoin!
With the development of Forbes project, you will see that with the expansion of the mining pool and the continuous landing of the ecology, I believe that after the main network goes online, you will make a decision whether to really invest in GFS!
Third, income can be converted into stable currency to lock in profits
As a small leek in a mining circle, I am deeply aware of some platform routines. Many so-called cloud mining platforms, the BTC dug out is not sent to users at the first time, but directly goes to the exchange to smash the market, and finally settles the income according to the falling price. After 19 years of brutal bear market, I want to cry without tears. The Forbes project party deeply understood these pain points, so it launched the stable currency kusd. The digital currency dug up by users can be converted into the stable currency kusd through the smart contract at the first time, and the profits can be locked at the first time to reduce the losses caused by the falling currency price.
https://preview.redd.it/unbfq1ybb7451.png?width=750&format=png&auto=webp&s=b8587f2befedbbd854874780f36a891020310348
Some people may ask, after the research, it turns out that this is a risk-free, zero cost business. Where is the pie falling in the world? So where is the revenue coming from? How is the Forbes project profitable? In fact, this is the charm of mining. Forbes purchases the top-level mining machines with the support of the world's top mining pools through the user's early purchase money.
The more mining machines are purchased, the less the marginal cost is. Therefore, the cost of mining machines is actually lower than the average cost of all users. This cost difference is one of the benefits of Forbes.
Second, when the smart contract returns all the user's costs, the mining machine belongs to the Forbes project party. Even if some of the mining machines are damaged, the remaining mining machines can continue to produce for Forbes. These benefits are sufficient to sustain the cost of maintaining the pool.
Third, Forbes is going to do more decentralized financial ecology in the future. When the community is built, more and more people will participate in this ecology, "where there is traffic, there will be benefits." this is the eternal truth of the Internet era.
Having said so much, you must be interested in the Forbes project, but what I know about Forbes is not only the mining business, but also the first piece of their big game in the field of cloud mining. "Forbes miner alliance" is only the first step. With the launch of the main network, many node ecology gathered through mining will suddenly have a place to play, which to play, invincible. As we all know, the most popular concept of blockchain is difi (decentralized Finance), which is also the field that Ethereum 2.0 will further explore in the future. What Forbes really wants to build in the future is to win the crown of decentralized finance and become the "UnionPay" of the currency circle. Of course, because of the limited space, there is not much overview here. If you want to know more about this project, you can go to their official website to research it on your own Research.
​
Official website address: http://forbeschain.io