Your Cryptocurrency Newsletter for December 28, 2020

If you are interested in cryptocurrencies, this newsletter is for you. [img]  [Learn more about RevenueStripe...](   [Learn more about RevenueStripe...]( [img]( [FeedBinary Newsletter]( [Four Non-Bitcoin Cryptos to Watch in 2021]( While Bitcoin’s dramatic rise has dominated the crypto conversation in 2020, the coming year could see more developments from the industry’s lesser-known digital currencies While the biggest story in the crypto and blockchain space across 2020 has undoubtedly been the meteoric rise in the price of Bitcoin, which has seen its value balloon by over 220% since early January. However, investors may want to keep an eye on a selection of other, cheaper, digital currencies and tokens that have the potential to break new ground in the space in the coming year as the industry moves into the mainstream. Ripple Ripple is a coin attached to XRP, a blockchain that markets itself as a payments platform that allows faster and decentralised currency exchange and remittances compared to ordinary wire transfers. While Ripple is not mineable, with the tokens instead issued by human operators rather than awarded to computers resolving transactions through algorithms like Bitcoins are, it is touted by some in the industry as a viable alternative to the wire transfer payments system, particularly for transactions in very small quantities that are normally not handled by traditional exchanges. Ripple has also seen a sharp increase in value over the last month, rising around 107% since late November to US$0.60 each. Litecoin While Litecoin has lost some lustre following its emergence as the first altcoin in the early 2010s, the crypto has consistently attracted users to its platform as a faster transaction method compared to the more time-consuming nature of the Bitcoin blockchain.Litecoin also offers a cheaper entry point for new crypto investors than the pricier Bitcoin, as despite rising 167% this year it is still trading at around US$108, less than a tenth of Bitcoin’s current price tag. The crypto does not occupy the dominant position it used to, however, investors may want to take a second look, at the very least as a cheaper method of riding the bullish coattails of Bitcoin’s rally as institutions pour cash into the industry. Cosmos As blockchain technology continues to expand in popularity, more and more projects are springing up to take advantage of the system, one of which is Cosmos. However, unlike other altcoins on the market, Cosmos aims to resolve some of the issues surrounding the scalability of different blockchain platforms and their ability to interoperate. In short, Cosmos is aiming to create an ‘internet of blockchains’ allowing them to connect and interact in a similar manner to devices on the Internet of Things. While the token is currently on the cheaper side at around US$5 apiece, Cosmos could experience a wave of investor interest should it manage to pull of its end goal of linking blockchains together, potentially opening up whole new methods for how the technology operates and interacts with itself. Bitcoin Cash Despite the name being closely related with the original crypto, Bitcoin Cash is not correlated with Bitcoin itself, rather the crypto is an offshoot of the original as a result of debates between members of the crypto community on how to resolve some of the more pressing issues in the Bitcoin blockchain, namely a spike in transaction volumes slowing down their resolution speed. Bitcoin Cash is the product of one of these solutions, known as a ‘hard fork’, where the original blockchain architecture is used to build a new blockchain, and by extension, a new cryptocurrency. This means that Bitcoin Cash cannot be used for transactions on the original Bitcoin blockchain and vice versa. However, the offspring of Bitcoin may find itself in a similar position to Litecoin, able to piggyback off of the bullish sentiment in the industry as well as the added benefit of being able to steal some name recognition of its parent crypto. [Read Full News]( The post [Four Non-Bitcoin Cryptos to Watch in 2021]( first appeared on [Feed Binary](. [Read Full Story]( ------------------ You Might Like     [Learn more about RevenueStripe...]( ------------------ [The Ethereum 2.0 Factor: Changing the Way DeFi Projects Operate]( Ethereum 2.0 is finally taking form after the beacon chain launch, so how has it affected the DeFi and Dapp ecosystems so far? The end of 2020 has been huge for the crypto community. Not only was there a spectacular price surge across digital assets, possibly signaling the beginning of another bull market, but there was also the launch of Ethereum 2.0 beacon chain, which has been in development for some time. The long-awaited update to the Ethereum blockchain transforms the network from a proof-of-work to a proof-of-stake consensus model and is intended to improve speed, security, lower transaction fees and fix the scalability issues that have been holding Ethereum back throughout 2020. Ethereum 2.0 is still in the very early stages of development – in phase 0, and there is still a very long way to go until a complete transfer from the old chain to the new one occurs. Despite this, its impact on the market has already been felt due to its fast paced development. This is true especially in the DeFi space as Dr. Octavius, co-founder of the OctoFi DeFi protocol told Cointelegraph:Most people misunderstand Eth2 and what it means for the industry as a whole, especially DeFi. While other chains are competing to solve some scaling issues on Ethereum, I think the network effects are quite profound and Ethereum is leaps and bounds above the others. If anything, the onset of 2.0 gives people confidence in Ethereum’s staying power. Booming DeFi The launch of Ethereum 2.0 caused significant price volatility. The price peaked at around $670 right after the launch on December 1, only to suffer a slight correction over the following days, in tune with the rest of the altcoins. But the hype was most felt in DeFi, as ETH 2.0 was a crucial element driving the growth of total value locked in the projects and, according to Octavius, this trend is likely to continue: “The effects are likely going to accelerate participation in DeFi markets as the DeFi builders will be able to improve their products by an order of magnitude.” TVL was just below $10 billion at the beginning of November and now sits at $13.4 billion after a slight correction from its all-time high of $14.1 billion, according to data from DeFiPulse. So it has grown significantly after November 27, several days before the launch of the Beacon chain. The growth is fueled by a newfound trust in the development efforts being put into Ethereum and the longevity of DeFi. Of course, the current bull run in crypto has also contributed to this substantial growth, along with other factors, including the merger of Yearn.Finance with decentralized exchange SushiSwap, which was just the latest in the list of partnerships secured by Yearn.Finance. Also, the liquidation of Uniswap’s yield farming occurred, which caused a big surge in TVL on other protocols such as SushiSwap and Bancor. Ilya Abugov – advisor at dApp statistics aggregator, DappRadar – told Cointelegraph that Eth2 may be crucial to staving off competitor blockchains in the DeFi space: It may become important when rival blockchains really start activating. With Polkadot and NEAR becoming more active, good news regarding Ethereum 2.0 may help keep projects anchored to the Ethereum ecosystem. But despite the significant growth in TVL, the total transaction volume showed a decline. Surpassing $41 billion in November, transaction volume registered a decrease of 12% compared with the previous month. This may be explained by users deciding not to move their funds and instead stake them on Eth2. This was one of the necessary steps for the launch of ETH 2.0, as 16,384 validators needed to stake 32 ETH each to signal the launch of the new chain. A total of 524,288 ETH locked up in the deposit contract can easily explain the November decrease in transaction volume. Another data point showing the dominance of DeFi, besides the billions, in TVL is the fact that 99% of Ethereum transaction volume comes about DeFi protocols. This means that users are still attracted to DeFi’s huge yields which are unlikely to be beaten by ETH 2.0 staking rewards. It is also likely that users will remain in Ethereum throughout this change if promising projects that run on the blockchain continue to perform well. Additionally, it’s also possible that the improvements created by the update will attract a more cautious institutional audience. Drawbacks of ETH 2.0 on DeFi Once Ethereum 2.0 is fully operational, the DeFi market will likely benefit from the faster and more scalable network. However, some industry participants argue that there may be some drawbacks.The move to a PoS consensus will impact the DeFi ecosystem. Stakers who hold ETH in their wallets will earn interest for their troubles. By essentially sharing very similar reward systems, it is possible that the compensation offered by staking may rival the rewards from yield farming and other DeFi products. Even though this may take some time to materialize, potential high rewards in Eth2 may create a conflict and a decreased incentive for DeFi usage. However, innovative solutions to this conflict are already being developed, including tokenized ETH 2.0 bonds. Validators can receive funds in unlocked original Ether by transferring a token created by a fully collateralized smart contract to a creditor. In return, a promise is made that when the blockchain merger happens and the lockup ends, the creditor will automatically receive the original 32 ETH plus the accumulated staking rewards. Dr. Octavius is optimistic about such developments:This concept is interesting in terms of not only futures markets, but prediction markets and how they could be used to enhance project governance.But I’m also really interested in how something like EIP 1559 will influence stock to flow of ETH, giving it a better S2F than Bitcoin. I think there’s going to be a whole new dynamic when it comes to assessing investments, especially as DAOs and DeFi projects continue generating attractive revenues. Another major risk lies in both the old and the new Ethereum blockchains currently running simultaneously. With succeeding developmental milestones, the full transition to the new chain is scheduled to happen in 2022, but not without significant risks involved. DeFi protocols may undergo a smooth transition, but the potential for minor disruptions or even catastrophic losses is also a possibility. Dr. Octavius told Cointelegraph: “Of course we could see unexpected bugs, or perhaps the outcomes of Eth2 are underwhelming but if developers continue to choose to build on Ethereum, then that’s what really counts.” What the future holds for Ethereum There seems to be a consensus about the positive impact of Ethereum 2.0. However, like previously mentioned, some drawbacks may occur. From technical risks to a shift in dynamics around DeFi and liquidity. According to Abugov, the latter will not be felt in the near future:It doesn’t appear like Ethereum 2.0 will have a meaningful effect on liquidity in the next 9-12 months. It will pull away some ETH, but doubtful that it will be enough to alter the current economics of Ethereum 1.X. [Read Full News]( The post [The Ethereum 2.0 Factor: Changing the Way DeFi Projects Operate]( first appeared on [Feed Binary](. [Read Full Story]( ------------------ You Might Like     [Learn more about RevenueStripe...]( ------------------ [Chainlink’s Plans For Blockchain and Beyond in 2021]( In 2021, Chainlink wants to set blockchains humming with a cornucopia of data for maximum innovation, says cofounder Sergey Nazarov. In the past year, decentralized oracle provider Chainlink has been named one of 2020’s most outstanding technology pioneers by the World Economic Forum, been integrated by over 300 projects and seen its LINK token shoot into the top ten as one of the year’s best-performing crypto assets. If 2020 was Chainlink’s year, it’s fair to say that the company’s co-founder Sergey Nazarov has high expectations to meet for 2021. He told Decrypt that the startup has two ambitious goals for the coming year. The first is a continued focus on the security and reliability of Chainlink’s oracles, so that the network can scale to accommodate tens of billions of dollars in value. The second is to provide a data-rich environment “in which to build the smart contracts that will come to define our industry.” That, he said, will “seed ecosystems where developers can now build things that they couldn’t build before.” Data and DECO The oracle network, which enables smart contracts to securely access off-chain data feeds, web APIs, and traditional finance streams, is banking on bringing a wealth of verified data to the blockchain space in 2021.“You’re going to see a depth of data in DeFi; you’re going to see a breadth of data as well,” Nazarov told Decrypt. That ranges from sports data to insurance data covering weather, shipping, and enterprise use cases. “There’s going to be all these various datasets,” he added. “We can’t even predict how people are going to build around them. They’ll build fascinating things like prediction markets and all kinds of use cases that I’m extremely excited to see.” Instrumental in Chainlink’s plans is its 2020 acquisition of DECO, a verification protocol for oracles. Developed by Cornell University researchers, DECO can prove the authenticity of data, while ensuring privacy, and the startup is now in the process of integrating it. DECO, said Nazarov, is going to make all kinds of data available. Identity data, for example, can be verified, allowing a transaction to meet know-your-customer (KYC) or anti-money-laundering (AML) requirements, without exposing any sensitive information on-chain. Notably, he said, DECO has already attracted interest—even from outside the blockchain space. Diversifying DeFi 2021 will see Chainlink generating more verifiable proof of reserves, said Nazarov. The mechanism, developed by Chainlink, means that oracles update and provide information about reserve funds, such as those held by stablecoins, on-demand—which can then be used by other DeFi applications on Ethereum. The mechanism is already in use by stablecoin tUSD, and crypto custodian BitGo.“It proves that there’s collateral out there that is actually backed by real world assets that we consistently check to make sure that they are in existence; that they’re at a certain value,” said Nazarov. “That makes the off-chain world’s collateral acceptable to the onchain world,” he explained. Chainlink’s objective, he added, was to make DeFi “about different types of collateral so people have diversification of risk.”During the 2020 decentralized finance boom, hundreds of DeFi projects integrated Chainlink. The startup also launched its verifiable randomness mechanism for gaming applications, and collaborated with insurance providers enabling them to build new financial products. Nazarov is proud of the virtuous cycle that he said springs from Chainlink’s areas of focus. “The dynamic that we’re aiming for is that all of the DeFi market growth will create a market for gaming NFTs; it’s going to create a market for insurance products to be sold into the DeFi market, because once you have revenue from an insurance product, you can take that revenue, turn it into a smart contract and sell it as collateral into the DeFi market,” he explained. This, he said, will ensure that the DeFi market is “diversified, in terms of risk, because it has all these other types of collateral.” In 2020, the Associated Press, one of the world’s most trusted news agencies, integrated Chainlink in order to publish the results of the US election cryptographically on the blockchain. The agency is now running a Chainlink node, and Nazarov expects more data providers to come on board in 2021—either on their own, or with a partner. Prior to 2020, Chainlink had focused on the Ethereum blockchain; over the course of the year, though, it broadened its scope, with both Polkadot and Tezos integrating its technology. 2021 promises more non-Ethereum integrations, said Nazarov: “We’re already in the final stages of integration with many different chains.” The team is also ramping up its grants program, introduced in July 2020, and working on a new focus “beyond gaming and insurance,” which is yet to be announced. Nazarov noted that supply chain verticals “are going to be interesting,” adding that, “Supply chains are something that moves relatively slowly as a category and as an industry, but I think that blockchains have a lot of value to provide there.” He also hinted at growing interest from IT consultancies employing Chainlink in building solutions for their users. DeFi’s black cloud But Nazarov sees a “big dark cloud” on the horizon. In 2020, a series of outages, the result of what have become known as “flash loan attacks,” blighted a number of DeFi projects.In the past few months, Harvest Finance lost $34 million, Cheese Bank lost $3.3 million; Akropolis suffered a $2 million loss; Value DeFi lost $6 million; Pickle Finance lost $20 million; and Warp Finance lost $8 million.“These DeFi flash loan attacks are misnamed,” said Nazarov. “They make people think about a flash loan as something bad, whereas what they really are is price oracle attacks.” he only way to guard against them, he said, is to use a decentralized oracle service like Chainlink, which pulls price data from hundreds of exchanges, rather than using a single exchange as a price source. Otherwise, “someone without any understanding of how to code can simply go manipulate the market in that exchange and therefore change the price—triggering your contract.” At the end of 2020, Chainlink and the World Economic Forum proposed industry standards for decentralized oracles in a new academic paper. While flash loan attacks have been relatively small in size, to date, Nazarov warned that “tens of millions or hundreds of millions of dollars” is at stake, and “more people need to view oracle security as seriously as they take smart contract security.” Blockchain in and beyond in 2021 Without revealing names, Nazarov said he’d recently seen increased interest in Chainlink’s technology from traditional web companies—non-blockchain companies, wanting to use an oracle network to prove something to them. “What we might see in 2021 is more web and enterprise systems that aren’t using a blockchain, but are using Chainlink to prove things to them,” he said. “And the fact that Chainlink can prove something to them might be valuable separately from proving it to a blockchain.” [Read Full News]( The post [Chainlink's Plans For Blockchain and Beyond in 2021]( first appeared on [Feed Binary](. 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