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Whitepaper & Yellowpaper

By
underratedcrypto
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When researching a cryptocurrency project, you will come across a document called “White Paper”. This document is the team’s proposal. It must include the problem they’re seeing, the solution (their project), some technical details about the blockchain’s (or other types of DLT) architecture and the deployment plan.

The first white paper released in the cryptocurrency space is Satoshi Nakamoto’s document on Bitcoin. This document set a standard in the industry and was followed by almost all projects. During the ICO craze in 2017-2018, many white papers’ content were simply copied from others in order to seem like a legit project worthy of people’s capital. Therefore, these can a first step towards vetting a project.

Another document, that is rarer to see, is called a “Yellow Paper”. The latter contains all the technical details of the project. This was first yellow paper was written by Dr Gavin Wood for the Ethereum blockchain. Although the white paper usually contains some technical details about the protocol, the purely mathematical and algebraic details are omitted, as they would be too difficult to understand by typical consumers.

A third document can also be found on very rare occasions. It is called the “Beige Paper”, it simply simplifies the mathematical details included in the yellow paper and turns it into an “easier” to read format.

A white paper should always be presented and should state the points mentioned above. They are written in a simplified language for everyone to understand, however, one must have prior knowledge about different protocols and know each one’s strengths and weaknesses. This is important, as any protocol presented in any white paper will usually be presented subjectively and outline the strengths only. Yellow papers and beige papers are not a necessity, there is no “official” requirement stating that a team must produce them. It adds to their credibility in this rather “hard to trust” space.

What is Bitcoin?

By
underratedcrypto
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0

Bitcoin is both a new type of money–sometimes called digital or electronic money, or cryptocurrency–and being a new digital payment network free from the type of regulation financial institutions like banks and building societies face.

Bitcoin is not the only cryptocurrency, but it is the first and best known in the cryptocurrency market.

Who invented Bitcoin?

The origins of Bitcoin are shrouded in mystery, but it was invented by an individual using the name Satoshi Nakamoto in 2008, whose identity has never been released. The date is significant because 2008 was the year the global banking crisis hit, when banks had to be bailed out and many small-to-medium investors lost their money, homes and businesses.

As of March 2018, there were 1,658 cryptocurrencies–and the number is increasing. Bitcoin, however, is the original cryptocurrency and is still one of the most widely traded.

Some other cryptocurrencies are:

  • Ripple XRP
  • Monero
  • Litecoin
  • Ethereum
  • IOTA
  • NEO
  • EOS

Cryptocurrencies are now monitored for performance data and value.

What can Bitcoin be used for?

Bitcoin is a payment system which only exists in cyberspace and has no physical business premises. Because of this, the currency can be used freely to pay for online purchases–as well as being bought for investment. Other cryptocurrencies like Ethereum are used to buy assets–but cryptos, as they are often referred to, can buy anything, from services to goods and even property. The buyer pays a small fee for every transaction, but Bitcoin can be used globally, making international payments secure.

How are Bitcoin transactions recorded?

Payments are logged by a system called blockchain–each “block” in the chain of transactions is a piece of data recording an individual transaction. Because each transaction forms a new block in the chain and all the blocks are connected within the chain, using Bitcoin for online payments is very secure.

Is Bitcoin totally fraud-proof?

Because each block of data representing a new transaction is connected to the previous one and the subsequent one, any changes to the blockchain affect the whole chain.

Each transaction also has to be approved by users logged onto the chain, known as peer-to-peer technology. The blockchain data is available to everyone who is logged on, so if changes are made they will be visible, as each transaction is marked by a number and hashtag, as in #00001, #00002, etc. It is also impossible to use a Bitcoin more than once (double spend)–and fakes or copies of Bitcoins cannot be made.

Each computer on the network will also have a copy of the transaction, as it is recorded on blockchain.

Bitcoins are issued by the network and owners can remain anonymous, so the identity of Bitcoin owners remains confidential. This means it is not possible to see who owns quantities of Bitcoins, which are kept in digital “wallets”, which are also anonymous. Because of the anonymity of Bitcoins and the blockchain technology, committing identity fraud to get Bitcoins dishonestly is almost impossible.

Bitcoin can now also be tracked–there are companies specialising in this, which track how Bitcoins move about. This is mainly for law enforcement, however, as criminal networks have used Bitcoins because of their anonymity.

There are concerns that hackers using quantum computers may access the network and change transactions before they are recorded on the system – and an article in the journal Nature predicts that within a decade, quantum computers may break the encrypted codes used by blockchain technology to secure Bitcoin transactions.

Is Bitcoin an excellent investment?

There has been scepticism towards Bitcoin – however, despite dire warnings from some market commentators, Bitcoin continues to thrive both as a payment system and an investment.

The security and ease of use of Bitcoin are its big advantages – and in just over a decade, the value of Bitcoin has risen to a current rate of around £3,330 per 1BTC, beating all the gloom-monger predictions that it was just a financial flash in the pan. There is also a Bitcoin obituary showing the amount of times people have declared Bitcoin dead.

Does the price of Bitcoin fall often?

The price of Bitcoin has fallen quite dramatically at times, only to rally fairly quickly. So volatility is very high compared to other more mature markets. Bitcoin is not subject to the usual market conditions FIAT currencies are subject to – and the cryptocurrency rate is usually based on data about daily usage of a cryptocurrency for transactions, as well as risk factors and the technology involved and user adoption of it, rather than traditional influences on money markets such as inflation rate, trade figures or a government policy.

This also serves to make cryptocurrency more stable in traditional market conditions – but occasionally, the value has fallen significantly. When choosing a cryptocurrency to invest in, it is important to take financial advice – but Bitcoin’s longevity has made it popular among users and investors (first mover advantage).

Where do I buy Bitcoin?

Bitcoin has become big business and there are now many digital currency gateways (exchanges) in Bitcoin and other cryptocurrencies. Prices of the different cryptocurrencies available can range from pennies up to pounds  – but Bitcoin has been hailed as the new “gold”, except it is a lot easier to store and use.

How do I store Bitcoin?

There are several storage options for the different cryptocurrencies, but most people store their Bitcoins in digital wallets – which can be “hot”, for when you use the Bitcoins for transactions and need them to be readily available; or “cold”, for when you want to keep your Bitcoins safe offline. It is possible to transfer your Bitcoins between the live wallet used for payments or to transfer money  – and the cold storage wallets, which are not live on the Internet and so cannot be accessed.

There are now companies online offering offline Cold Storage to cryptocurrency investors and Bitcoin users.

For security purposes, a private key is issued to Bitcoin users to enable them to access their online wallet to make a transaction, or to transfer Bitcoins to their cold storage wallet offline for security purposes. This private key can be used to sign digital transactions.

You can also transfer Bitcoin to payment platforms like Cash, which usually send the user a unique address for the Bitcoin transfer, making the process secure.

Deep Cold Storage

Physical means of storing Bitcoins – or, at least, the data needed to access them – is known as Deep Cold Storage and may involve using a memory card, USB stick or even paper records in a safe or locked security box to protect Bitcoin accounts.

Some people may think storing Bitcoins on a USB stick or memory card is a good idea – as well as using a paper wallet, where the key is written down.

There are obviously issues with this in case the physical storage is lost or stolen – or someone sees the private key and copies it. Printing out the private key giving access to Bitcoin accounts might be a useful back up, but potentially it increases the risk of fraud being committed and the Bitcoins being used dishonestly.

Even a private key stored in a folder on a computer is vulnerable if a computer crash occurs and data cannot be recovered.

However, in the case of large quantities of Bitcoins, back up is essential – just as you might leave a copy of important documents in a safety deposit box or with a solicitor, protecting the private key needed to access your Bitcoin wallets often means creating a paper wallet or using external hard drives to store the information.

How do I sell Bitcoin?

To sell your Bitcoins, you will need to set up an account with an exchange platform online. You will have an exchange wallet and can transfer your Bitcoins from your Bitcoin wallet and then place a sell order on the platform. The value of the Bitcoins can then be paid into a bank account.

Disclaimer: This article is for information only and does not constitute investment advice or recommendations – always seek the advice of a reputable financial adviser before investing, as the value of investments can go down as well as up.

What is Blockchain?

By
underratedcrypto
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0

Blockchain is the term used to describe an indelible ledger stored online, which records the details of every cryptocurrency transaction made globally in real time.

It is thought to be the most secure way of logging cryptocurrency transactions, including daily use transactions to pay for services and goods – as well as investment transactions.

The system is known as peer-to-peer technology because every computer logged into the blockchain network approves each transaction and receives a copy of the details of that transaction, making the risk of fraud currently almost negligible.

Why is it called Blockchain?

Blockchain was the term used by the inventor of the original and first cryptocurrency, Bitcoin.

The inventor of Bitcoin and Blockchain is known as Satoshi Nakamoto, but the identity of this individual has never been revealed. However, they refer to Bitcoin and Blockchain as “A Peer-to-Peer Electronic Cash System.“

The system of payments being recorded in real time takes the form of a chain, with each new payment being given a hash number – for example, 00001#, 00002#, etc – so that each transaction refers to both the previous one and the subsequent one.

It is this digital chain of transactions which makes it extremely difficult to commit fraud, as if any changes are made, the number sequence is affected.

The fact that each payment transaction also has to be “approved” by every computer logged onto the network at the time also protects the chain from external interference.

Why is Blockchain different from normal banking transactions?

Whereas payments made via banks and other financial institutions are subject to the regulatory requirements of those institutions, as well as government interference, Blockchain is a completely autonomous and independent payment system existing only digitally – ie in cyberspace.

This allows users to make payments freely and cheaply without any potential blocks by the payment provider, such as a bank.Users choose when to make a payment using cryptocurrency and how much to pay – and are able to use different cryptocurrencies to pay for goods, services and even property.

Some of the existing cryptocurrencies on the market – and there are currently around 1,650-plus – are more compatible than others when it comes to making certain payments. For example, one of the most popularly used cryptocurrencies Ripple XRP (called so because it is managed by Ripple) is best positioned to compete with SWIFT – the global network for interbank money transfers.

Bitcoin remains the most popular cryptocurrency for daily user transactions, although cryptocurrencies are now subject to ratings, just as traditional currencies are, and there are many currencies proving popular with users for different purposes – including investments and buying assets with – such as Ethereum.

Is Blockchain secure?

Despite some grim forecasts about the future of Bitcoin and Blockchain technology, both have proved to be an easy and secure way of making payment quickly and cheaply.

The chain technology, in which each payment made refers to the previous payment and subsequent one – and which also has to be approved by all the computers on the network at the time – has proved to be highly secure, and possibly the most secure way of making payments online.

Users can also remain anonymous – cryptocurrency is stored in online “wallets” which are anonymous, so the identity of the user is not known. This causes concern because of law enforcement – and cryptocurrencies and Blockchain have attracted small criminal elements to the system simply because it is a secure and anonymous system.

However, it is so technically difficult to change the record of payments once they have been logged without attracting attention that Blockchain is considered one of the most secure – if not the most secure – payments system available.

Will Blockchain always be secure?

In the future, there is concern that quantum computers might be able to hack into the system and perhaps change payments as they are being made, but before they have been logged on the Blockchain ledger.

In this knowledge, it is likely that the technology itself will develop to prevent this – and it is estimated that the possibility of Blockchain being hacked by quantum computers would take at least another ten years before it becomes an actuality.

Using Artificial Intelligence (AI) to monitor Blockchain is also being developed, although there are concerns over its use. However, AI will eventually be developed to produce algorithms which can work with encrypted data. This should enable the technology to recognise fraudulent financial transactions that need investigation. Currently, such investigations are extremely time consuming because they entail vast amounts of complex data to be processed by humans.

However, the digital ledger created by Blockchain recording each payment made is permanently and publicly available for inspection, making the early detection of any suspicious activity or changes to the ledger more likely.

Is Blockchain faster than normal payments systems?

One of the major attractions of cryptocurrency payments and Blockchain for users is the fact that payments can be considered almost instantaneous, compared to traditional banking systems.

It is estimated that payments using cryptocurrency and Blockchain are around ten times faster than traditional banking payments–and with cryptocurrencies such as Ripple XRP positioned to compete with the SWIFT banking system; it is likely that the technology will become even more efficient and secure, as the technology and adoption rates by users grow.

Are there disadvantages to Blockchain?

There are still many who doubt that cryptocurrencies and Blockchain will be the new universal way of banking.

  • Renowned economist Nouriel Roubini points out that Blockchain “lacks the kind of basic common and universal protocols that made the Internet universally accessible (TCP-IP, HTML, and so forth).”
  • Other commentators cite the fact that Blockchain is not indestructible–or that the anonymity of the technology is actually a disadvantage. It is now possible to track cryptocurrency movements online–and some companies specialise in this for law enforcement purposes, so complete anonymity in the future might not be possible. In the same way that cookies track user engagement online and reveal patterns of behaviour, interests and associates, payment patterns might reveal information which could eventually reveal identity or location.
  • One of the major disadvantages to Blockchain is that it is energy inefficient, as creating each new block of data when a transaction is made is energy consuming. Some claim for this reason alone in the current climate debate, the technology may prove unsustainable.
  • Another disadvantage is that downloading the accumulated Blockchain data can take time and use up storage capacity on devices–and as more payments are made, the size of the data chain increases.
  • Other critics say that Blockchain operates in the same way other systems do–and that because established systems like Visa and Mastercard already have millions of users, the comparatively small number of people using cryptocurrencies and Blockchain worldwide means that it cannot compete with the global payment systems currently operating. However, ratings data show that the number of daily use transactions for cryptocurrencies and Blockchain are increasing by millions every year–and as the value of cryptocurrencies continues to rise, user numbers are likely to grow.

Compared to banking systems currently in place, Blockchain may still be in its infancy. The technology was only unveiled in 2008, but cryptocurrencies and Blockchain have so far defied the doubters to provide a new, secure and efficient way of handling digital payments globally–and with no regulation or government intrusion, paving the way for an innovative but decentralised peer-to-peer payments system that anyone with some computer skills can use.

Disclaimer: This article is for information only and does not make up investment advice or recommendations–always seek the advice of a reputable financial adviser before investing, as the value of investments can go down and up.

Crypto banter will give away over $500,000 to 10 eligible community members

    By
    underratedcrypto
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    0

    Cape Town, South Africa, 8th May 2021,

    Banter Bags is a unique project in the cryptocurrency world that aims to give back to its community. What initially started as a $10,000 community giveaway is now worth over $500.000. Ten eligible community members will be chosen randomly to receive their share of the spoils once the Crypto Banter YouTube channel surpasses 250,00 subscribers.

    The Banter Bags Giveaway is an event created by Ran Neuner, host of CNBC Crypto Trader and founder of Crypto Banter on YouTube. The initial aim was to reward active participation in the community and generate more engagement with the daily streams, but as the investments grew it became a mechanism to really change some community member lives.

    Speaking of pre-market allocations, the Crypto banter team initially put $10,000 in a public Ethereum address. That money was then invested into allocations, with more investments occurring daily to diversify the portfolio further. Several key investments have noted spectacular returns, including Shopx, Aioz, Refineable and Occam. These pre-market allocations have gone up in value by a factor of 100 or more.

    As the total value of the Banter Bags now exceeds $500,000, a golden opportunity is created for the community. Once the YouTube channel surpasses 250,000 subscribers, ten community members will earn a Banter Bag with the corresponding spoils. The only requirement to be eligible is to subscribe to Crypto Banter on YouTube and follow the Twitter account. Community members can amplify their chances by following @cryptomanran and @sheldon_sniper on Twitter, by liking/commenting on tweets, and engaging with the two daily streams.

    The Crypto Banter team adds:

    “It started off as a fun idea of giving $10000 to our community, and as we invested, we realized that the community loved the idea of investments in pre-market allocations that we previously off-limits for the average investor. With this in mind, we went all in using our influence to reward our community. It was supposed to be a cool $10,000 giveaway to reward the community, and it has landed up becoming an opportunity to change lives. The channel has exploded since we launched this initiative. We’re up by over 100% on every metric, we gained over 100k subscribers and got over 5m views in the last 28 days. More than that, our community has engaged more. They love the idea that we are giving back to them and that we may at any point change another life.”

    Five winners have been randomly selected so far, all of which have an amazing story to share. One winner, who goes by the name of Irfan, lost his job and was struggling financially. With a pregnant wife expected to give birth in two months, being announced the winner of a Banter Bag triggered a life-changing event for Irfan. Anyone can go through a similar experience once the remaining bags are given away to community members.

    We also announced that one bag will be given to a charity and we are currently looking for a viable option.

    SEC Chair Gary Gensler testify on gamestop trading saga, talks about regulating crypto market

      By
      underratedcrypto
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      0

      SEC chairman Gary Gensler along with several other financial experts testified before the Financial Services Committee about the recent GameStop fiasco that led to the involvement of Congress in February this year. Gensler talked about the need for better regulations to counter social-media-fueled trading activity and ensure consider protection. The SEC chief in his testimony also raised concerns regarding new age mobile trading platforms such as Robinhood that was at the center of the GameStop trading saga, as it decided to halt retail trading for $GME at its peak.

      In late January this year, GameStop ($GME) stocks started an unprecedented rise even when the company was on the verge of declaring bankruptcy. The soaring price was traced back to a Reddit group by the name of wallstreerbets, which has discovered that a Wall Street hedge fund has heavily bought short positions against $GME. Following which, the group gathered a lot of streams from the retail side and asked everyone to buy as many stocks of the dying company as they can. Robin Hood, the mobile trading company halted $GME trading for retail traders while allowing OTC trades for rich clients creating a lot of outrage and controversy.

      Gensler has reiterated the same stance over the need for regulating the retail trade to ensure better investor protection.

      Gensler advocates for crypto regulations

      The SEC chair also talked about the need of regulating the $2 trillion crypto market during the same testimony, something which he has advocated in his first TV appearance since taking over the SEC command.

      Gensler is pro-crypto because of his understanding of blockchain technology and crypto-assets as he taught the same to MIT students in his earlier stint as a professor. In his recent interview, Gensler talked about the need to regulate the crypto market as most of the crypto currencies qualify as a security.

      BSC based De-Fi value exploited for $11M by hackers

        By
        underratedcrypto
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        0

        Valdez, a Binance Smart Chain based De-Fi protocol, has become the latest protocol on BSC to face exploit as scammers exploited its automated market maker (AMM) known as vSwap to steal $11 million worth of crypto assets from non 50/50 pools. This is the second exploit on the De-Fi Value within a week as they lost another $6 million due to contract reinitialization.

        A total of 9 out of the 16 pools were exploited by the scammers and stole the following amounts of different digital assets in the exploited pools,

        • BNB – 2.7k
        • FARM – 1.7k
        • BASv2 – 8.5m
        • BDO – 68.3k
        • BUSD – 41.4k
        • MDG – 945k
        • VBOND – 1.2m
        • BAC – 11k FIRO

        The attackers exploited the Bancor formula where they sent a small amount of a second token to pair addresses and then swapped it for the digital asset in which they wanted to withdraw a small amount of the first token and a lot of the second token. Since Uniswap doesn’t accept pools with a non 50/50 asset ratio, ValueDefi was making use of the Bancor formula.

        Because of incorrect use of the Bancor formula, pair contracts consider a swap to be successful The attacker swaps the first tokens for the second in the same pool and repeats this operation until the exploit allows it.

        BSC Based Defi Protocol Exploitation on the Rise Amid Surging Popularity

        Binance Smart Chain (BSC) has grown in leap and bounds this bull season with hundreds of new Defi projects choosing BSC over ETH, and even the older ones have created cross-chain support. The growing popularity can be understood from the fact that the total value locked in Defi on BSC has crossed the $45 billion mark compared to the TVL of Defi on ETH is just over $60 billion. However, the centralized nature of the chain makes it a primary target for scammers and multiple protocols have faced an exploitation over the past couple of months.

        Many have also accused the Binance team responsible for approving project listing of not doing a thorough analysis of the projects and giving a simple pass for BSC-based listings.

        Earning Interest on 30X

          By
          underratedcrypto
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          0

          In this journal, we outline how this token can accrue interest (yield) in detail. We go through the available options as well as explain the risks associated with taking part in this endeavour.

          Disclaimer: NOT FINANCIAL NOR INVESTMENT ADVICE. Only you are responsible for any capital-related decisions you make and only you are accountable for the results.

          Introduction

          The highly anticipated launch of Multi-Chain ChaosNet (MCCN) on Tuesday 13th April has come and gone, but we have seen a few people asking what this exactly means for THORChain, RUNE and the wider DeFi economy.

          THORChain is the first (and currently the only) protocol that facilitates asset swaps between chains in a permission-less, trust-less and non-custodial environment. This is impressive, but even more so when you consider that to facilitate the swaps THORChain does not use a pegged or representative asset – direct Layer 1 to Layer 1 swaps via automated market-making through balanced liquidity pools.

          The successful launch of MCCN combined with the funding available to developers through THORChain will no doubt attract talented individuals, and bring more applications to the protocol over the coming weeks and months.


          What you need to know

          Although multi-chain is now live, it has several safeguards in place to allow time for the developers to fix any bugs, test the integrity of the network and generally iron out any teething problems:

          • Liquidity is currently hard-capped at 450,000 RUNE combined for all liquidity providers and will gradually be increased over the coming weeks.
          • Early users have been advised to use smaller amounts when interacting with the interfaces (THORSwap and ASGARDEX), providing liquidity, as well as when swapping assets to native THOR and using the wallets during this safeguard period.
          • RUNE holders should be patient before upgrading their RUNE to native THOR.RUNE for the first couple of weeks.
          • Incentives will be kept higher on the single-chain chaosnet (SCCN) until confidence in MCCN grows. BEPSWAP will coexist with THORSwap for a while until the limitations imposed on MCCN are gradually lifted and all funds are withdrawn from BEPSWAP.

          ThorFi

          Thorfi Ecosystem

          Over the next few weeks/months THORChain will be adding additional features to further expand the THORChain ecosystem:

          • THOR Synthetics will be added, enabling secured base layer (L1) assets. THORChain synths are unique they are 50% backed by their own asset, and 50% backed by RUNE through the use of the liquidity pools to collateralise the synth.
          • Composites –THOR.USD, THOR.CRYPTO, THOR.TEN, THOR.ALTCOIN etc.
          • Collateralised loans, with auto-serviced debt.
          • Additional chains – currently only 5 chains are supported (BTC, ETH, LTC, BCH and BNB), however more will be added over time.
          • The Mimir purge will eventually remove all safeguards such as the liquidity cap etc. as well as increase decentralisation. Mimir is a current administrative feature of THORChain that allows admins to change constants in the chain, such as minimum bond etc. When Mimir is destroyed THORChain will be uncapped and officially in main-net.

          The development of ThorFi will further accelerate the growth of THORChain as more and more users are attracted by the rewards and investment opportunities. We will be releasing further information regarding ThorFi as the various additional features outlined above are implemented; however as of right now the majority of these components are still in development and the limited information available may change over the course of the coming weeks.

          Providing Liquidity

          We have seen a lot of interest from members in the Discord with respect to earning yield on their assets. Unless you have 1,000,000 RUNE to set up a node, currently the only way to earn with RUNE is through providing liquidity (LPing) into one of the pools on SCCN (BEPSWAP) or MCCN (ASGARDEX/THORSwap). This will change once ThorFi lending and synths become available, however in the meantime let’s have a look at LPing!

          How does it work?

          With the launch of MCCN, pooling and swap functionality are now available through the THORSwap and ASGARDEX interfaces. As stated previously this is limited at the moment; however single-chain chaosnet LPing is still available through BEPSWAP and both MCCN and SCCN work in exactly the same way in terms of operation. Here is a rundown:

          • Liquidity Providers must have both RUNE and a second asset to stake (eg. BTC, ETH, USDT).
          • Funds can be deposited in one of 2 ways: a symmetrical deposit is where assets are deposited in an equal amount (eg. $1000 worth of RUNE and $1000 worth of ETH) or an asymmetrical deposit where assets are deposited in an unequal amount (eg.$2000 worth of RUNE and $0 worth of ETH).
          • Asymmetrical deposits are only recommended if the pool is already unbalanced, however the vast majority of the time Liquidity Providers should deposit symmetrically.
          • Providers are adding assets to a pool in order to provide the liquidity required for the automated market making and operation of the peer-to-contract system utilised by the DEX, as opposed to the peer-to-peer system and centralised market making on CEXs.
          • The rewards described below are given out continuously and automatically added to the stakers funds, paid in both RUNE and the second asset.

          Rewards

          Liquidity Providers earn yield through swap fees and system rewards:

          • Fees are paid by swappers and traders.
          • Every time a swap is carried out the ratio of assets in the liquidity pool diverges slightly from the market rate – this event is called ‘slip’. A portion of each slip stays in the pool and is allocated to liquidity providers, forming a part of their staking yield.
          • THORChain reward emissions curve provides some rewards, as well as rewards paid out long-term from the token reserve which is filled up through network fees and allows for continuous income even when exchange volumes are low.
          • Yield is affected by % ownership of a pool, volume and size of swaps, the incentive pendulum (as described in the 30x token report) and the natural variance in asset prices.

          Risks

          As with any asset your capital is at risk through natural price action. However, when providing liquidity through chaosnet this can also lead to something called ‘Impermanent Loss’. Impermanent Loss is a phenomenon unique to liquidity pools whereby liquidity providers can sometimes end up with less value than what could have been realised by simply HODLing the staked assets. Here’s a simplified example for the BTC/RUNE pool:

          1. A liquidity pool has 10 BTC and 37,500 RUNE. This implies a Bitcoin price of 3,750 RUNE. For this example, we’ll assume Carlo came as liquidity provider with $100,000 (1 BTC & 3,750 RUNE) which gives him a 10% share in the pool.
          2. After 100+ days, BTC goes up 5X while RUNE goes up 15X, the pool ratio would be out of balance and gets rebalanced by arbitrage traders. Now the price of BTC would turn to 1,250 RUNE (RUNE has 3Xd against BTC in this example 15/5=3). Since the liquidity doesn’t change in the pool, arbitrage traders bring the ratio back to 50/50 by withdrawing RUNE and adding BTC. In this case, they bring the assets in the pool to 17.3 BTC and 21,650 RUNE.
          3. The LP funds are determined by their share in the pool, not the number of coins they provided so Carlo’s 10% share is 1.73 BTC and 2,165 RUNE. They amount to a total of 1.73 * 1,250 + 2,165 = 4,327.5 RUNE
          4. Had Carlo simply HODLed his 1 BTC and 3,750 RUNE he would now have 1 * 1,250 + 3,750 = 5,000 RUNE
          5. This 672.50 RUNE (5,000-4,327.5) difference is called an Impermanent Loss.

          ‘Impermanent Loss’ implies that the loss is temporary, and indeed is only realised when the liquidity provider decides to remove their funds from the pool. The idea is that any short term loss caused by this phenomenon will be made up longer term through the yields and rewards paid out for providing liquidity.

          It is important to understand this mechanism before making any decisions on allocating capital to a pool. Liquidity providers should consider the length of time they would be holding their stake, the volatility of both assets and how closely they correlate with each other in order to minimise the chance of realising Impermanent Loss.

          Impermanent Loss Protection

          Impermanent Loss Protection (IL Protection) aims to mitigate the risk described above by compensating liquidity providers with funds taken from the reserve pool. It is not only the LPer that benefits; THORChain benefits from providing this insurance as it is necessary at this early stage in development to incentivise and give people the peace of mind they need to invest their capital into the pools with as little risk as possible. Here’s how it works:

          • THORChain tracks a member’s deposit values.
          • When the member goes to redeem their assets their loss is calculated against their original deposit value and the loss is subsidised in RUNE from the reserve.
          • The member will only receive 100% of the loss if they have been LPing for 100 days. It is a linear system meaning that if you only hold for 50 days you will only receive 50% of the loss, 75 days for 75% and so on.
          • IL Protection is only available for the portion that is not covered by protocol fee collections – in the example above if fees generated 300RUNE for Carlo then the protocol will cover 672.50-300 = 372.50 RUNE only (this assumes he provided liquidity for 100 days+)

          Other important points:

          • Subsidies are paid for both full withdrawals as well as partial withdrawals.
          • If additional assets are added to the pool by the member the value of the new deposit is taken into account and will also be covered in the event of further loss.
          • In the event of a single-sided withdrawal, and not in RUNE, the subsidy will be converted in price to the second asset and taken from the corresponding pool. The protection value in RUNE is then added to the pool in order to re-balance the pool.

          ThorStarter

          Few details are known at the moment as it was only announced in the last few hours, but you can guarantee will be all over this in the coming weeks so keep your eyes peeled!

          Conclusion

          As exciting as the ChaosNet launch is, caution should be applied when interacting with the native functionality as it is still essentially in BETA and things could go wrong. So far the launch has been successful with only a couple of issues on the day, and we have seen recognition of this in the recent RUNE price action. We will be sure to keep you updated as the ecosystem develops, limitations are reduced, decentralisation is gradually increased, and new features are released!

          LarvaLabs’s Meetbit Collection Exploited to Mint $700,000 NFT Collectible

            By
            underratedcrypto
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            0

            Larva Labs, a popular NFT developer, was at the receiving end of an exploit that could have cost it nearly $700,000. An attacker minted a rare NFT from the Meetbit collection estimated to be worth $700,000 and offered to sell it for 300 ETH on OpenSea. Interestingly, the exploiter even continued to offer hints on the Meetbits Discord server and Twitter.

            The attacker offered multiple hints during the exploit and said he expects making $300,000 per hour and later deleted those tweets as well. The attacker used “rerolling” to mint an expensive rare collectible where the contract offered him the rare one after 345 total transactions. The Ether scan address gave the first hint about the exploit after it showed multiple absurd transactions.

            Meetbit Pause Trading Function to Stop Further Exploits

            The contract is safe, all Meebits are safe, and trading is working just fine. Minting has an exploit because the identity of the remaining unminted Meebits has leaked. So this allows somebody with mints remaining to mint & revert until they get a mint number that they like. Trading is only paused because it gets paused automatically when minting is paused.

            The NFT developer explained the exploit was not because of any shortcomings in their smart contract, but the IDs got known because of being on IPFS while the contract is fine. However, the community went into discussion mode and also the impact of the current exploit on the price of the collectibles in the meetbit collection.

            Safe Haven (SHA)

              By
              underratedcrypto
              -
              0

              Safe Haven is a platform built on the VeChainThor Blockchain that provides solutions for digital inheritance.

              Safe Haven is building multiple asset management solutions focused on B2B2C clients. With inheritance solutions being the primary product of SafeHaven, value will be created through exchanges, wallets, and individuals who seek to protect their digital assets should an unforeseeable event occur.

              Whitepaper: click here

              Current Price: $0.01072288

              You can purchase it on Kucoin
              Disclaimer: NOT FINANCIAL NOR INVESTMENT ADVICE. Only you are responsible for any capital-related decisions you make and only you are accountable for the results. Past performance is no guarantee of future results

              Ethereum eyes new ATH above $3600 as VanEck files for first U.S. ether ETF

              By
              underratedcrypto
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              0

              The world’s second-largest cryptocurrency Theory (ETH) is holding up confidently above $3500 and is eyeing a new all-time high above $3600. At press time, ETH is trading 4% up at $3553 with a market cap of $409 billion.

              The recent ETH price surge comes as, on Friday, May 7, asset manager VanEck filed for the first Ethereum exchange-traded-fund (ETF) in the U.S. market. This is the first filing for an Ether ETF in the U.S. by any big financial giant.

              Having filed its Bitcoin ETF, which is already under the SEC consideration, VanEck seems to take the first-mover advantage in the case of Ethereum. The SEC recently delayed its approval decision on VanEck Bitcoin ETF, citing more time for decision making.

              VanEck said that it will hold real ETH against the shares of its VanEck Ether ETF. Thus, retail and institutional investors can gain exposure to the world’s second-largest crypto without directly investing in it. The value of these shares will be reported live using the MVIS CryptoCompare Ethereum Benchmark Rate. The VanEck Ether ETF is currently under the review of the U.S. SEC.

              VanEck shall work with the CBOE BZX exchange on its Ether ETF offering. Apart from the U.S., VanEck is also expanding its crypto offerings in overseas markets. Earlier this week, VanEck launched the first crypto ETH in the European market.

              Ethereum is showing solid fundamental

              There has been trading at 5x year-to-date returns with its massive rally over the last week. As Carnap reported, the Ethereum fundamentals are showing strength. A lot of ETH is moving off exchanges and into smart contracts, DeFi and ETH 2.0 Deposit contracts.

              As Glassnode reports, ETH supply at exchanges has dropped 12% while that in smart contracts has jumped 22%.

              Source: Glassnode

              As we have seen, the Ethereum institutional interest also remains intact with every rise. Earlier this week, Nasdaq-listed Canadian firm Mogo purchased $400K worth of ETH from its corporate books.

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