Many people predicted 2022 to be the year of regulation for crypto. However, it looks like that’ll happen sooner than later. Regulators in Britain plan to regulate decentralized finance and the crypto industry in general.
Blockchain References to be Removed From Crypto?
Walter Bloomberg first broke the news on Twitter, stating there won’t be a universal regulatory framework for DeFi.
Instead, the regulator intends to develop rules for DeFi assets like Uniswap, Aave, etc, on a case-by-case basis. There are also plans to remove any reference to blockchain from the definition of cryptocurrencies.
BRITAIN SETS OUT PLANS FOR REGULATING CRYPTO ASSETS, PROPOSES TO REMOVE REFERENCE TO BLOCKCHAIN FROM THE DEFINITION OF CRYPTO ASSETS
While there is no additional information about the proposed regulations yet, there are obvious plans for a regulatory framework. Regulators in the United Kingdom appear to be at the forefront of calls for crypto regulations.
In November 2021, the Bank of England called for better legal and regulatory frameworks to deal with the fast-evolving market. It gave reasons why such regulatory frameworks would be beneficial while asking for changes at the local and global levels.
UK Regulators are at the Forefront of Crypto Regulations
The foremost financial regulator in the country, the Financial Conduct Authority (FCA) had also adopted a tough stance towards the industry before. Early last year, it released a publication warning consumers of the risk of losing all their assets if they invest in crypto.
Beyond talking about crypto regulations and risks, regulatory agencies in Britain have been taking action. At the forefront of this is the Advertising Standards Authority (Asa). The advertising watchdogs have cracked down on crypto ads significantly in the past year.
With the proposed rules, British regulators will now have more authority on cryptocurrency. According to reports, the rules are necessary because of consumer risks, lack of information, and misleading advertising.
While the regulatory framework will add more clarity and consumer protection to the crypto industry, several things remain unknown. For example, the idea of removing blockchain references for the definition of crypto assets would need more clarity.
Chinese authorities have arrested eight people involved in a crypto scam in its latest crackdown on crypto-related activities. It also froze 6 million yuan ($1 million) worth of crypto assets tied to the crime.
Despite the clear ban on cryptocurrency trading, mining, and related activities in China, many still appear to be involved in crypto activities, albeit illegally.
The Criminals Rug Pulled Crypto Investors
According to a report on Nikkei Asia, this DeFi rug pull was first uncovered by the Chizhou public security bureau and had the potential to be worth 50 million yuan ($7.8 million).
Investigations started after an investor lost 590,000 yuan in crypto assets in June 2021, and evidence pointed to the eight arrested people.
Apart from the frozen assets, authorities also seized luxury houses, cars, and other expensive items. All these assets are alleged to have been acquired with the stolen assets.
The unnamed scam project promised investors high returns for swapping their liquidity. But the scammers used anonymous pools to siphon the money while investors were left with nothing.
This event doesn’t just show the risks of crypto assets but also proves that banning cryptocurrencies won’t protect people from the risks. Instead, the ban might further give more opportunities for bad actors to exploit the people that the ban seeks to protect.
Rug pulls became the number one crypto scam in 2021 as it accounted for 37% of stolen assets. The nature of decentralized finance space further makes it possible to pull off this scam due to its unregulated and permissionless nature.
However, the potential of the space continues to attract many investors, including institutions.
Recently, Aavelaunched an institutional DeFi platform, Aave Arc. Despite the overall dip in the crypto market, DeFi tokens have been the least affected. Uniswap (UNI), Aave (AAVE), PancakeSwap (CAKE), and other DeFi tokens have all had a positive rise in value in the past seven days.
Available data on DeFiLlama would also show that the TVL of assets locked in the space is currently over $230 million.
However, like Chainalysis pointed out, crypto adoption growth might be hampered if solutions are not found for the risks attached to using digital assets.
2021 was undoubtedly the year the crypto industry matured. It saw the launch of new coins and exchanges as the sector recorded more investors than in previous years. Above all, it was the year we witnessed crypto adoption en masse.
While Bitcoin was the focal point of the market throughout 2021, hitting an ATH of $69k in November, altcoins’ dominance also recorded some level of substantial gains.
Ethereum is a decentralized blockchain with smart contract functionality created in 2015 by Vitalik Buterin and two other programmers. Bitcoin has been positioned as a digital currency and a store of value, on the other hand, the Ethereum blockchain is a platform for hosting decentralized applications.
This puts it in the nucleus of Web 3. According to the state of dApps, there are almost 3000 decentralized applications on Ethereum.
Although the crypto market is in a terrible bear phase currently, indicators suggest that altcoins, most especially Ethereum-based cryptos, will produce strong returns for investors this year amid a bull run.
Here, we bring you the top 3 Ethereum-based coins to watch out for in 2022:
We can’t talk about Ethereum-based coins without discussing the world’s second-largest cryptocurrency by market capitalization, Ether. ETH had good growth in 2021, gaining more than 500%. It began 2021 at $733 before soaring to an A.T.H. of $4.8k in November. As earlier mentioned, its growth outpaced Bitcoin throughout all the quarters of last year.
Although it currently trades below $3,500, the major altcoin still has room for growth. Ether has a greater relationship with DeFi and the metaverse than other coins, which will ultimately help boost its price in 2022.
The chain’s highly-anticipated ETH 2.0 will also play a massive role in the crypto’s value. Though the date of the implementation remains unknown, the upgrade will make the chain more scalable, less energy-intensive, and have reduced gas fees.
If this goes as anticipated, it would give room for more projects to be built on the network thereby boosting its price performance for the year. The asset is currently trading for $3,376 and has a market cap of over $400 billion.
Co-founded by India’s crypto billionaires Sandeep Nailwal, Jaynti Kanani, and Anurag Arjun, MATIC is the native currency of the Ethereum Layer2 scaling solution Polygon. It is a multi-chain ecosystem integrated into Ethereum to solve high gas fees and make the blockchain interoperable with other networks.
MATIC was amongst the top-performing cryptocurrencies of 2021, posting gains of more than 11,026% in one year. The crypto was valued at 2 cents at the beginning of the year, and in less than six months, surpassed $2, thanks to its increased activity on the network.
As of press time, Polygon is trading for $2.40 and it is the 14th largest crypto asset by market cap with a valuation of over $15 billion.
What makes Ethereum a superb network is the diversity of platforms running on its ecosystem. One of the best performing tokens on it is MANA, the native token of a virtual reality platform, Decentraland.
On the platform, users are able to buy virtual lands where they can build, navigate and monetize. The platform was created by Ariel Meilich and Esteban Ordino and launched in 2019 after an ICO in 2017. It became open to the public in 2020.
Decentraland has two tokens, LAND, a non-fungible token, and MANA, an ERC-20 Token. Users can use MANA to buy wearables, avatars, names, etc., on the platform.
MANA was one of the best-performing assets of last year, with over a 2000% increase in value. Given the renewed interest in NFT and metaverse-related projects, it doesn’t look like the growth will stop. It is currently valued at $3.09 and has a market cap of over $4 billion.
Uniswap is a decentralized exchange on Ethereum where users can swap ERC-20 tokens. It uses an automated market maker to enable crypto swapping without an order book.
In this model, the liquidity providers deposit their tokens into smart contracts. The liquidity pool automatically determines the price quote allowing the providers to earn 0.3% of trading fees.
Hayden Adams founded the protocol in 2018, and it has grown to become one of the biggest DeFi platforms. UNI is the governance Token and was introduced through an airdrop in September 2020. Token holders are the decision-makers on the platform and vote through their tokens.
At the start of 2021, UNI was worth less than $5, but by December, it was $17. This growth pattern only goes to show its long-term value. Even though it has dropped recently and currently trades at around $16, it’s still one of the top 25 Cryptocurrencies. It has a market cap of over $10 billion.
Chainlink is an oracle network created by Sergey Nazarov in 2017 to improve Ethereum smart contracts by integrating real-world data into online systems. Simply put, Chainlink is an Oracle data provider that uses LINK as its native currency.
The use of smart contracts is one thing that drives up the value of LINK. The more smart contracts are used, the higher the value of LINK. Although it is currently consolidating between $44 and $48, The crypto’s value has doubled from a year ago, hitting an A.T.H. of $51.17 attained in May. Its market cap is currently around $12 billion.
This is why you Should pay Attention to These Assets
All these Cryptocurrencies reflect the best functionalities of Ethereum. These include its smart contract, decentralized finance, and its metaverse capabilities.
Chainlink is integral to Ethereum and is further expanding to other blockchains. This will only increase the value of LINK. On its own, Uniswap has already established itself as a top dog in DeFi. But it’s also expanding and recently deployed its v3 on Polygon.
For Decentraland, the growing interest in metaverse will positively influence its token value. Judging by the use cases of these coins, we expect a huge return on investments for them this year.
Although 2022 started with the market correcting, the crypto industry still has much potential. The pandemic and increased regulations may swing the prices of these Ethereum-based coins, so invest wisely and only invest what you can afford to lose.
Venture Capital firms and cryptos have had a long-standing relationship and this is one that is unlikely to end anytime soon. Back in mid-2018, over 120 firms had made two or more investments in blockchain companies. While the relationship has been a long one, the level of VC interest in cryptos has surged in recent years.
Venture Capital, Cryptos, and 2021
According to Institutional Investor, VCs invested $32.8bn in crypto-based projects in 2021. The report highlighted that the total investment in 2021 was more than all previous years put together.
Some notable facts and figures from the report include:
43% of crypto funding went into companies involved in trading, exchange services, investment, and lending of crypto assets.
There were also investments in custody, infrastructure, and DeFi.
What is Andreessen Horowitz?
Andreessen Horowitz, also known as a16z, is considered one of the largest venture funds in the market. In 2021, a16z launched a fund dedicated to digital assets. At the time of writing, a16z had $26.2bn in assets under management. The assets under management of the Crypto funds stood at $3.1bn.
Notable active investments within the crypto portfolio include Dapper, diem, Near, OpenSea, Polychain Capital, and Uniswap. Recent exits include Coinbase (DPO: Coin).
Andreessen Horowitz Raises $9bn
Such is the position of Andreessen Horowitz in the VC space that it faces few difficulties in raising capital. News hit the wires overnight of Andreessen Horowitz raising $9bn to “further its involvement in both crypto and tech”.
Looking at the global VC investment breakdown in 2021, VCs may look to build their exposures to NFT start-ups, DAOs, Web3, and the Metaverse. Just last month, Venture Fund TGV4 reportedly invested $25m into Web3 blockchain companies. According to the report, “the firm seeks to invest in major verticals such as Infrastructure and Financial Services, including Play-To-Earn games (GameFi), metaverse, and NFTs”.
Looking at the Year Ahead
For start-ups, companies looking for late-stage investment, and investors it could be a big year ahead. Much, however, will depend upon the regulatory landscape. At the turn of the year, there has been plenty of regulator chatter and activity that suggests greater oversight is on the horizon.
China is one country that is looking to rein in growth in the Metaverse. Last month, we had reported on some well-known Chinese multinationals looking to enter the Metaverse amidst increasing government scrutiny.
COMP, the native token of the DeFi platform, Compound, is enjoying an uptick in price after a 1% increase in the last 24 hours, reaching a high of $242.94 within this timeframe.
Compound’s TVL Rises in Tandem With its Price
The cryptocurrency, which also serves as a governance token for the platform, has been in the green for the past seven days despite the overall dip in the market. With more than an 11% price increase in a week, it appears the COMP is enjoying a mini bull run in the largely bearish market.
The Compound protocol is one of the biggest decentralized finance platforms on Ethereum, and it offers borrowing and lending services. Users on Compound can lend or borrow several other digital assets.
For those lending on the platform, there’s the benefit of earning interests for the liquidity they provide, and borrowers also have to provide collateral when they borrow.
As one of the first DeFi platforms, the total value locked in Compound has also grown significantly and is currently over $8 billion.
COMP has a total supply of 10 million tokens and a current circulating supply of 6.3 million. It is an ERC-20 token and was first distributed in June 2020.
The coin is mainly used for protocol governance through discussions, suggestions, proposals, voting, and delegating voting rights to others. This has made it increasingly valuable as the platform itself grows.
What Could be Pushing Compound’s Recent Rise?
While there are no clear signs of what’s responsible for the recent surge in price, recent significant developments on Compound could have been a catalyst for the growth. In December, Coinbase announced offering access to DeFi yields for its users outside of the United States. It was revealed that the yield, in DAI, would be deposited on Compound.
The potential for wider adoption of DeFi this year is also another factor that could be causing the price to increase. Like COMP, the native tokens of other popular DeFi platforms such as Yearn.Finance, Aave, and Uniswap have also seen a significant increase in value in the past seven days.
However, COMP has lost some of its early gains at the time of writing, as it’s currently trading around $233 according to data from CoinMarketCap. Even with the increase, it is still a long way off from its ATH of $911 back in May 2021.
No matter how bearish the crypto market might be, there’ll always be digital assets that defy the odds. In the past 24 hours Secret (SCRT) has been one of those tokens.
Secret (SCRT) Rises by 6% in 24 Hours
The relatively unknown token has risen by more than 6% in the past 24 hours, going from $5.776 to as high as $6.876. While it’s already shed some of those gains, it’s still performing well with a current price of around $6.67 as of writing.
With this spike, SCRT is finally rebounding after the pullback that saw it fall from its ATH in late October until mid-December. The recent rise in price is likely due to a greater emphasis on privacy in the crypto community following several talks about more regulatory oversight this year.
Interestingly, available data on Coingecko shows that the asset has seen its value rise by over 30% in the last 30 days.
This green run has pushed SCRT into the top 100 Cryptocurrencies by market cap as it currently ranks 96 on CoinMarketCap.
Secret Blockchain is Enjoying Wider Adoption
SCRT is the native token of open-source blockchain, Secret. The network provides privacy features for the Ethereum blockchain and select ERC-20 tokens. Secret blockchain, which launched in late 2020, allows holders of Ether and other ERC-20 tokens to create Secret Tokens.
Secret tokens are programmable versions of their digital assets with privacy features, making such ERC-20 tokens similar to privacy coins such as Monero while still being programmable.
Uniswap (UNI) managed to consolidate above the 200-period simple moving average at the H4 chart following an impulsive structure formation from December’s lows. First, the price pierced $18 and looked forward to cracking above $20.
A floor around $14 has been formed where a confluence of buyers had been developed across the board, implying that the buying volume is high around that area.
$20 as the Next Critical Hurdle to the Upside
The scenario is being favored by the oscillators at the current timeframe that point towards the north.
Once UNI cracks above $20, doors will open for more gains that help to strengthen the bullish scenario for the near term, given that the cryptocurrency has been reluctant to plummet towards new monthly lows.
That said, the ground is prepared for the bulls to scale towards the $23 level, which favors the optimistic outlook. However, according to the readings given by the confluence of the moving averages, risks are worth keeping an eye on when looking for buys at this stage.
Bearish Below $17?
The support level of $17 could give up in favor of the bears to allow a lower extension and invalidate the bullish perspective for UNI. A reversal pattern will materialize for the crypto to fall towards the $14 level in a first degree if that happens.
Once that floor gives up, Uniswap could be looking for the $11 area, which converges with the strong decline it had at the beginning of the month. After clearing out the $11 level, we can find $8 and $7.20as the next tough nuts to crack to the downside.
In the meantime, the RSI indicator is nearing the neutral territory, which suggests a consolidation phase coming for UNI. In fact, it could be a preparation for the cryptocurrency ahead of the next hurdles in any direction to overcome it decides to take in the near term.
The cryptocurrency market has awakened from its stagnation mood and managed to break upside, with major coins such as Bitcoin (BTC) rallying over 4% and Ether (ETH) taking bids to rise over 3% across the board.
The world’s largest crypto by market capitalization pierced over the $50,000 handle, and now it targets the 200-period simple moving average at the H4 chart around $52,000, where a dynamic resistance lies.
Challenging Critical Levels After Sudden Rallies
Ether is now challenging such an SMA at the same timeframe around $4,100, targeting the $4,200 psychological area.
Other altcoins are following the lead, such as Dogecoin (DOGE), which had a slight rise to consolidate around $0.18, aiming to consolidate above the $0.19 level where it coincides with the 200-period SMA.
Solana (SOL) is another crypto that had a strong rise in the last hour of over 6% to test the 200 SMA around the $191 level after gathering strength around the 50 SMA. Finally, Cardano (ADA), which is in the sixth place of CoinMarketCap’s ranking, rallied over $7% to stand at around $1.45.
Santa Rally is Coming
From a fundamental perspective, no major catalyst triggered the sudden spike across the sphere. However, it should be noted that as the Christmas and New Year Eve holidays loom, traders had a bullish’s shift in their mood – the so-called “Santa Rally.”
That said, it’s not strange to see further upside in the crypto markets, in the same way, that it often happens during this season in the traditional markets like forex and stocks.
Also, altcoins like Aave (AAVE), Compound (COMP), and Uniswap (UNI) followed the bullish sentiment across the board, even rallying double-digit numbers on a daily basis.
Moreover, Binance Coin (BNB) surged over 2% in a single hour following a dull session around the 50-period SMA at the H4 chart, and now it’s poised to break above the $550 level. If that happens, doors will open to test the $570 zone.
The cryptocurrency market is experiencing a mixed performance at the moment, with some coins performing excellently while others are underperforming. However, the total market cap is now closing in on the $2.3 trillion mark.
Uniswap Launches on Polygon Following Recent Approval
Uniswap, the leading decentralized exchange in the world, launched its services on the Polygon blockchain yesterday. This latest development comes after UNI holders approved the launch of the DEX on the Polygon network.
Uniswap is a decentralized exchange protocol built on the Ethereum blockchain. Unlike centralized exchanges, Uniswap is an automated liquidity protocol. It doesn’t operate with order books, and there is no centralized party required to approve trades. Traders can execute their trades without any intermediaries, giving it a high degree of decentralization.
The UNI token holders approved the launch of Uniswap on Polygon earlier this week. The DEX was launched on Polygon a few hours ago. In an interview, Mihailo Bjelic, co-founder of Polygon, said, “Ethereum introduced a noble vision of an open, borderless economic system accessible to everyone. With the increased usage, fees on Ethereum layer 1 have effectively ‘priced out’ most of the users. With this deployment, Uniswap as the flagship Ethereum application returns back to the original vision and again offers low fees and open access to everyone.”
MATIC Rallies to a New All-Time High
MATIC, the native coin of the Polygon ecosystem, raced to a new all-time high hours after the announcement. The coin reached an all-time high of $2.66 earlier today, making it one of the top performers in the market. However, the coin has slightly retraced and is now trading above $2.50 per coin.
MATIC’s MACD line is still in the positive zone, thanks to the coin’s recent performance. The RSI of 67 shows that MATIC is heading to the overbought zone. The coin could rally towards the $3 level over the next few hours if it can resume its upward movement. Year-to-date, MATIC’s value has grown by more than 14,000%.
UNI Rallies by More Than 10%
UNI, the native token of the Uniswap platform, is up by more than 11% in the past 24 hours. The coin has been rallying since Uniswap’s integration with Polygon a few hours ago. It could be set to soar higher if the market maintains its current momentum.
At the moment, UNI’s MACD line is below the neutral zone as the recent poor performance has affected its broader outlook. The RSI of 50 shows that UNI is getting out of the oversold region and could rally higher soon.
Venture capital is more bullish than ever on the cryptocurrency space. Crypto investment firm Paradigm has a history of backing high profile companies, such as Chainalysis, BlockFi and Coinbase, as well as decentralized trading protocol Uniswap, among others. Now the firm is gearing up to back the next generation of crypto and Web 3.0 startups and protocols.
Paradigm founders Fred Ehrsam and Matt Huang have raised $2.5 billion for their maiden VC fund, Paradigm One. It is the largest investment vehicle of its kind dedicated to the crypto and Web 3.0 space, according to the Financial Times. The fund ended up being twice as large as Paradigm expected. Reddit co-founder Alexis Ohanian, who runs VC firm 776, cheered the massive haul.
Huang, a former Sequoia partner, called crypto and Web 3.0 “the most exciting frontier in technology,” while Ehrsam, who co-founded Coinbase, said that it’s “just getting started.” They have made themselves approachable to what Huang described as “builders on the frontier” looking for backers.
While Paradigm only launched in 2018, it has racked up an impressive portfolio. They are active in backing DeFi protocols, Bitcoin mining, stablecoin protocols, and Layer 2 scaling solutions on Ethereum.
Their first fund amassed $400 million, which generated an IRR of over 200% in the first six months of 2021, according to the Financial Times. A couple of Paradigm’s successful exits include Coinbase and DeFi protocol Compound, as per Crunchbase.
The gigantic size of Paradigm’s new fund is a testament both to the burgeoning pace of innovation in the crypto and Web 3.0 spaces as well as the demand among venture capital and LPs to be a part of it. The next largest VC fund focused on crypto is run by Andreessen Horowitz, at $2.2 billion.
While cryptocurrency has come a long way, it still remains early innings in many ways. According to Paradigm, less than 10% of the world’s population owns some crypto. And while the DeFi market has more than $250 billion in total value locked, it still pales in comparison to the size of the “traditional financial system,” Huang argues. Web 3.0 similarly has a long way to go before it reaches wide-scale adoption.
Cryptocurrencies have already won over tech-savvy millennials. Now there is a cryptocurrency that targets “the next generation of investors” and aims to help teach them about investing and overall financial health. Saitama Inu (SAITAMA) was launched in May 2021 on the Ethereum network.
The brand was inspired by “the legend of a mysterious ghost dog that is said to be roaming the mountains in the region of Saitama in Japan,” according to the project’s whitepaper. Saitama it is gaining some momentum thanks to a couple of key exchange listings and an ambitious roadmap.
Saitama scored listings on a couple of popular cryptocurrency exchanges recently, including Bitmart in the SAITAMA/USDT trading pair and Gate.IO. Investors can also find Saitama on decentralized exchange (DEX) Uniswap. Based on social media commentary, a handful of users described having to pay higher gas fees on Uniswap most recently and have opted to use centralized exchanges instead.
The Saitama community, which calls themselves the Wolf Pack, is hopeful that the added liquidity and attention will drop a few zeros from the token price.
The new cryptocurrency is coming from a low base, and as a result triple-digit percentage gains in a short period of time are not unheard of. Crypto bulls will be looking to see if Saitama can keep the momentum going and get on the radar of more altcoin investors. There are a couple of upcoming catalysts that could help.
The Saitama team is gearing up for the launch of the Saitamask, a smart wallet, in November. Saitamask has a lot of features for a typical digital wallet and can be used in the following ways:
Saitama plans to play a major role in the NFT market. The project has the support of Willie D, a founding member of rap group Geto Boys. Saitama named Willie D as president of NFT curation and talent acquisition in a $50 million-plus deal. The celebrity was brought on to secure “high level partnerships” in the entertainment industry.
From15th October, IC Markets will be offering digital currency CFDs on Binance Coin (BNBUSD), Cardano (ADAUSD), Dogecoin (DOGEUSD), Tezos (XTZUSD) and Uniswap (UNIUSD) across its MT4 and MT5 platforms. This brings the total number of cryptocurrency coin CFDs available on the platforms to 17.
The new cryptocurrencies offered by IC Markets are all highly liquid and well supported across multiple exchanges. Traders also benefit from tight exchange pricing and no commissions.
IC Markets General Manager, Andrew Taylor, commented “Cryptocurrency CFDs are an exciting product for aggressive and experienced day traders. There is nothing else like this for retail speculators and no other markets they can trade seven days a week. With this opportunity comes the need for a platform that gives traders the best trading conditions to fully take advantage of these prospects. We are committed to delivering this for traders.”
About IC Markets
Built by traders for traders, IC Markets is the world’s largest Forex CFD broker dedicated to offering ultra-tight variable spreads, phenomenal order execution speeds of under 40ms, unrivalled liquidity and exceptional 24/7 service clients around the world in over 200 countries.
Since our launch in 2007, IC Markets has bridged the gap between retail and institutional clients, by offering a trading solution previously only available to investment banks and high net worth individuals.
As a result, IC Markets is the destination of choice for active traders worldwide who are seeking a trading environment that supports them to become a more confident and capable trader, delivering intuitive trading platforms with value-added tools and support for all trading strategies and styles.
Traders trust IC Markets because we are a global market leader. As a leading global exchange and trading platform, we also have a rapidly expanding offering of commodities, stocks, indices, bonds, and digital currency instruments.
IC Markets is dedicated to innovation, constant improvement, and utilising cutting edge technology for the benefit for our clients.
Ethereum has come a long way since it launched in 2015. The network has been behind some of the biggest crazes in the cryptocurrency industry, from ICOs to CryptoKitties to non-fungible tokens (NFTs) and decentralized finance (DeFi).
While ICOs in their original form have fallen by the wayside, the DeFi segment, in particular, has taken the financial industry by storm. DeFi gives users a way to generate passive income through activities such as lending and staking and bolster their returns.
The total value locked (TVL) in DeFi currently hovers at USD 99 billion, according to DeFi Llama. The Ether price has benefited from the rise of DeFi, with the price soaring 657% over the past 12-month period.
DeFi and Beyond
Vitalik Buterin, the co-founder of Ethereum, believes that Ethereum’s use cases could go far beyond financial applications, according to his recent keynote speech at the Ethereum Community Conference 4 (EthCC) event in Paris. He pointed to DeFi protocols such as Compound, Aave and Uniswap, for example, that have all experienced great success. Vitalik is a fan of DeFi, though he is quick to point out:
‘But this isn’t all that Ethereum was trying to do.”
Vitalik admits that “price is nice,” but he is quick to add that it should “only ever come as a consequence of utility.” He wants the common denominator among Ethereum users to be utility, not just price.
The reasons why financial applications have thrived on Ethereum are two-pronged, according to Vitalik. First, centralized technology in finance is abysmal. And secondly, fees are so high, a problem that is being solved.
Considering that Ethereum is addressing fees and scalability with the emergence of sharding and Eth 2.0, he says that now’s the time to start building and go beyond financial applications.
NFTs R’ Us
NFTs, which are digital assets containing a component such as art, music, video, etc., are helping Vitalik’s cause by expanding Ethereum’s use cases beyond finance. These digital tokens have caught on like wildfire and have helped to attract outsiders to the cryptocurrency and blockchain space. Vitalik said,
“NFTs are interesting, they’re this interesting cultural phenomenon. And they really have attracted a different kind of people to the Ethereum space that are interested more in the art side than in the finance side.”
Vitalik wants to bring Ethereum further beyond DeFi. He defines the near-term goals as something that drums up enough support in the Ethereum community and “something that is useful for people to do.”
Now that EtherLite has introduced its blockchain platform, the project’s ecosystem is beginning to take shape. EtherLite is a hard fork of the Ethereum network, and as such seeks to tackle some of the issues its much larger peer has faced surrounding scalability and speed, for instance.
Not surprisingly, there are some parallels between Ethereum and newcomer EthereumLite. For example, Ethereum has a foundation that supports the project as well as “related technologies.” EtherLite similarly has a foundation that is there to support projects that want to build on the EtherLite blockchain.
Most recently, a decentralized exchange (DEX) and automated market maker called Etherlite Exchange has launched on the EtherLite network. The DEX is one of the projects being supported by the EtherLite Foundation through a recently introduced SmartGrant investment fund, according to the EtherLite website. Other projects being supported by the foundation include Noften, which appears to be dedicated to non-fungible tokens (NFTs), and Battleship, a blockchain-fueled lottery system.
The Etherlite DEX is already live, where users can trade ETL, the native cryptocurrency of the EtherLite network. The DEX team also has several additions in the works, including the following:
Rewards system featuring the DEX’s goverance token, ELX
“Alpha-hunting tools” such as charts and market data
While the EtherLite ecosystem is shaping up to resemble that of Ethereum in some ways and is even compatible with the Ethereum Virtual Machine, it has some catching up to do. Ethereum is the leading platform in the decentralized finance (DeFi) space, where the total value locked (TVL) currently exceeds USD 107 billion, according to Defi Llama.
Other DEXs such as PancakeSwap and Uniswap boast USD 3.76 billion and USD 3.69 billion in TVL, respectively.
The bitcoin market downturn has taken altcoins along for the ride, and Ethereum has not gone unscathed. The second-biggest cryptocurrency has shaved 10% off its value in the month of July so far.
The EtherLite price had a rocky weekend and is down roughly 25% in the last 24-hour period alone. Investors who are focused on the building out of the EtherLite ecosystem do not appear fazed, based on social media comments. Others are finding the latest declines tough to ignore, and are looking to the EtherLite team for answers.
Its’ been about a week since EtherLite started trading on crypto exchanges, but apparently, there is much more ahead for this burgeoning project. EtherLite, which was created from a hard fork of the larger Ethereum network, has already started trading on several exchanges, including HitBTC, but an eager community is clamoring for more.
Fortunately for them, the project is quick to engage with users on social media, including their Telegram channel, where the team has revealed some details. And while the ETL market is active, investors are waiting for the next big thing involving decentralized exchanges (DEXs) and decentralized applications (Dapps) in hopes of driving up the price further.
The EtherLite price is volatile, as is the case with many cryptocurrencies, especially newer ones. But ETL has managed to surpass its pre-ICO price.
DEX and Dapps
One thing investors want to know is when they will be able to trade on DEX Uniswap and stake their ETL tokens. Along these lines, they have their sights set on swapping tokens to wrapped ETL (WETL), which is needed in order to trade on the DEX.
EtherLite has yet to tip its hand as to the steps that will be involved in the process, nor has it sent the contract to wrapped ETL. While ETL is live on Uniswap, investors can’t trade it until liquidity is added. They are preparing for users to both “hold and stake EtherLite” in the hopes of reaching wide-scale adoption.
The EtherLite team is currently in negotiations to list ETL on “major to exchanges,” according to the community leader on Telegram. They are also looking to raise EtherLite’s profile for Dapps, a use case for which Ethereum is currently out front. EtherLite is targeting more than 100 Dapps on its platform including at least “three large scale” ones. The community lead hinted that Dapps will be revealed in the next few weeks.
While it was born from Ethereum, EtherLite has set out to solve all of the larger network’s issues surrounding scalability and fees, to name a couple. The project has captured the attention of South African cricketer David Miller, who recently tweeted that the EtherLite blockchain “looks interesting.”
Uniswap, whose logo is a unicorn, is a decentralized trading protocol built on the Ethereum blockchain. Another way to look at it is as a decentralized exchange or DEX, which are growing in popularity in the cryptocurrency space. For its part, Uniswap boasts the highest trading volume of any DEX. Ryan Watkins, who is in research at Messari, tweeted in recent days about how Uniswap’s V3, the latest version of the protocol, is seeing a volume of USD 6.5 billion and is inching closer to Uniswap V2.
Uniswap’s native token, (UNI), is up by a double-digit percentage today, gaining 12% at last check and outperforming all of the top-10 cryptocurrencies. Twitter account Crypto Dream, which provides technical analysis on bitcoin and altcoins, published a chart on UNI, saying that while it scares some, the “chart is bullish.” Indeed, there are a couple of reasons to be excited about Uniswap. It is important to note, however, that cryptocurrencies remain a nascent asset class and can be more volatile (and riskier) than most other investments.
Uniswap received a bump after mainstream financial publication The Wall Street Journal on May 24 featured the DEX in an article about crypto exchanges that compete with Coinbase (Nasdaq: COIN). Uniswap has been gobbling up market share at its centralized peer Coinbase’s expense.
The Journal cites Messari data that shows Uniswap’s trading volume last month surpassed USD 36 billion vs. Coinbase’s USD 110 billion. The appeal of DEXs like Uniswap to crypto traders is that they get to maintain control of their coins rather than leave them on the trading platform, which is the model of centralized exchanges like Coinbase. Uniswap’s decentralized nature removes the risk of the protocol being shut down by any entity.
DeFi has emerged as one of the hottest trends in the cryptocurrency and blockchain space, and Uniswap is at the center of it. Uniswap is where thousands of DeFi tokens are traded. Uniswap’s popularity seems to grow commensurate with the rise of the DeFi market.
With more than USD 55 billion in total value locked in the DeFi market, representing the value of assets that are locked in a DeFi protocol, Uniswap has the wind at its back for the foreseeable future. One thing to keep in mind is that the swift rise of the DeFi market has also placed a target on this segment’s back by the regulators.