Author: Werner

Freelance crypto content editor, strategist and writer since the very top of 2017's bull run.  Based in Cape Town, SA and previously lived in Asia for a decade. I'm a big believer in the good that decentralized network technology and ethical AI can bring to make the world a more fair and transparent place.

$570 Million Stolen: Crypto Hacks Surge in Q2 2024

Posted on by Werner

Introduction

The cryptocurrency industry faced significant security challenges in Q2 2024 – and it failed some. Let’s look at the latest reports from the two leading crypto security firms: Immunefi and Hacken. The analyses paint a concerning picture of the current landscape, highlighting both familiar vulnerabilities and emerging trends. Data reveals a substantial increase in successful attacks which raises alarm bells about the need for improved security measures across the crypto ecosystem.

Overview of Q2 2024 Losses

Credit: TradingView

According to Immunefi, Q2 2024 saw a staggering $572.7 million lost to hacks and frauds across 72 incidents, representing a dramatic 112% increase compared to Q2 2023. Hacks continued to be the predominant cause of losses in the crypto space, with the vast majority of funds stolen through direct exploits rather than frauds or scams. This can be attributed to less awareness when markets trend upwards, which make it easier for bad actors to exploit newer users and stretched protocols.

Major Incidents

Two major incidents stood out in Q2, accounting for over 60% of total losses. The largest hack targeted DMM Bitcoin, a Japanese crypto exchange, resulting in a massive $305 million theft. This was followed by an attack on BtcTurk, Turkey’s largest cryptocurrency exchange, which suffered a $55 million loss in a cyberattack. These high-profile incidents highlight the potential vulnerabilities in even well-established exchanges and the devastating impact of successful attacks.

Shift in Attack Focus: CeFi vs. DeFi

Q2 2024 saw a significant shift in attacker focus, with Centralized Finance (CeFi) platforms bearing the brunt of attacks. CeFi losses totaled $401.4 million, accounting for 71% of all funds lost. This marks a massive 984% increase compared to Q2 2023. In contrast, Decentralized Finance (DeFi) platforms saw a 25% decrease in losses compared to the same period last year. This shift suggests that attackers may be finding centralized platforms to be more lucrative targets, possibly due to larger pools of concentrated funds.

Most Targeted Chains

Ethereum and BNB Chain remained the primary targets for attackers, with Ethereum suffering 34 incidents and BNB Chain experiencing 18.

Arbitrum, a layer-2 scaling solution for Ethereum, came in third with four incidents. 

Ethereum’s dominance as the most targeted chain highlights the ongoing need for heightened security measures in its ecosystem, especially as its total value locked (TVL) has grown significantly over the past year.

CeFi Accountable for the Biggest Losses (Credit: Hacken)

The types of attacks employed by malicious actors varied, but access control issues caused the highest losses at $397.2 million. Price oracle issues and flash loan attacks also contributed significantly to the overall losses. This breakdown helps identify areas where security measures need to be strengthened across the industry, providing valuable insights for both developers and security professionals.

Comparison to Previous Periods

The big increase in losses from Q2 2023 to Q2 2024 is worrying, especially considering the growth in total value locked across the crypto ecosystem. While the overall DeFi TVL tripled from about $50 billion to $150 billion by June 1, losses grew even faster. 

It’s worth noting that despite fewer individual hacks compared to Q1 2024, the severity and financial impact of Q2’s attacks were significantly higher, indicating a trend towards more sophisticated and damaging exploits.

Implications for the Industry

The major hacks targeting CeFi platforms highlight the need for enhanced security measures in centralized systems. As the crypto ecosystem grows, maintaining security becomes increasingly challenging, and it will get worse if and when the 2024/2025 bull market returns. Projects must balance the desire for rapid growth with the need for robust security measures. 

The industry may need to develop more comprehensive insurance solutions and standardized recovery protocols to soften the blows dealt by large-scale hacks. Additionally, these high-profile incidents may lead to increased regulatory scrutiny, potentially resulting in stricter oversight of crypto platforms, especially centralized exchanges.

Security Measures and Best Practices

Given the persistent threat of hacks and exploits, individual users and investors should take proactive steps to secure their assets. Some essential measures include:

  • Using hardware wallets for long-term storage
  • diversifying holdings across multiple platforms, 
  • enabling two-factor authentication
  • staying informed about the latest security best practices

By adopting these proactive steps, users can significantly reduce their risk exposure in the face of evolving security threats.

Positive Developments

Despite the concerning trends, there’s some good news in crypto security. The industry is showing an improved ability to recover stolen funds, with about 5% of the total losses in Q2 2024 being recovered. 

This represents a slight improvement from previous quarters and demonstrates the growing capability of the ecosystem to respond to and mitigate the impact of attacks. Additionally, despite Ethereum’s TVL growing by nearly 400% year-on-year, it only suffered $8 million in losses this quarter, indicating some improvement in DeFi defenses. This resilience in the face of rapid growth is an encouraging sign for the industry.

Credit: Tesfu Assefa

The Importance of Audits

The reports reveal a critical gap in security practices among many projects. Out of 41 hacked projects analyzed, only seven had undergone the relevant audits. This alarming statistic underscores the vital importance of thorough security measures in preventing large-scale exploits, including regular audits and robust bug bounty programs. 

History has shown that projects that prioritize these security measures are less likely to fall victim to attacks, signposting a clear path to better security.

Conclusion

As we move forward, a collaborative effort between developers, security researchers, and users will be crucial in building a more resilient and secure crypto ecosystem. The industry must prioritize security measures to protect users and maintain trust. By learning from these incidents, implementing stronger security protocols, and fostering a culture of vigilance, the crypto ecosystem can work towards a more secure future for all participants.

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Top Ten Crypto Cash Cows Analyzed

Posted on by Werner

It’s standard procedure that cryptocurrency projects come and go at a dizzying rate, as they often serve no real immediate purpose. However, some protocols have managed to establish themselves as revenue-generating powerhouses, demonstrating real-world utility, user adoption, and sustainable profits. 

Traditional Finance firms are chomping at the bits for the newly-approved Ethereum spot ETF to start trading. The Bitcoin ETF serves as a safe haven asset hedge, ETH is an asset class that Wall Street can engage with. TradFi firms can use metrics like new users, fees, revenue and total value locked (TVL) to measure network effect. With Ethereum clearing the way, other chains and protocols can eventually follow in its wake. 

We’ve used a recent study by Onchain Times and Token Terminal data to do a deep analysis of the top ten money spinners in crypto in mid-2024, comparing their business models, revenue streams, and key performance metrics.

1. Ethereum: The Undisputed Leader

Ethereum remains the giant of the crypto industry, generating an impressive $1.42 billion in revenue year-to-date (YTD). As the foundation for much of the decentralized finance (DeFi) ecosystem, Ethereum’s success stems from its widespread adoption and the high demand for block space on its network, as well as recent upgrades like the Merge and Proto Danksharding upgrade, which has moved it to proof-of-stake and slashed layer-2 chain costs.

 Key points

  • Highest revenue generator in the crypto space
  • Revenue primarily comes from transaction fees paid by users
  • Profitability fluctuates due to issuance rewards to validators
  • Q1 2024 was profitable, while Q2 saw a decline due to activity moving to layer-2 solutions

2. Tron: The Stablecoin Highway

Surprising many, Tron takes the second spot with approximately $852 million in revenue YTD (year to date). Tron’s success is largely attributed to its role as a major conduit for stablecoin transfers, particularly USDT in developing economies. It’s cheap, fast, and reliable. 

Key points

  • Second-largest stablecoin ecosystem after Ethereum
  • Popular in countries like Argentina, Turkey, and various African nations
  • Competes with Ethereum and Solana for highest stablecoin transfer volumes

3. Maker: The OG Stablecoin Protocol

Maker, the protocol behind the DAI stablecoin, comes in third with $176 million in revenue YTD. Its business model revolves around issuing DAI against crypto collateral and charging interest on these loans.

Key points

  • Total DAI supply is currently 5.2 billion, down from its all-time high of around 10 billion
  • It has diversified revenue streams, including holding real-world assets (RWA) at 25.6% of total revenue
  • Estimated earnings of $73 million annually after accounting for DAI Savings Rate and operating costs

4. Solana: The Phoenix Rising (Again)

Once written off as dead, Solana has made an impressive comeback since its 2023 Breakpoint conference, ranking fourth with $135 million in annualized revenues YTD. Its resurgence is attributed to increased activity in memecoins, NFTs, and DePIN (Decentralized Physical Infrastructure Networks) projects.

Key points

  • Revenue comes from transaction fees paid to validators
  • High token issuance costs make it challenging to assess profitability
  • Success driven by technological improvements and community-driven events like the JTO airdrop

5. Ethena: The New Stablecoin Contender

Launched in January 2024, Ethena has quickly become the fifth-largest revenue-generating protocol, with $93 million in annualized revenues. It’s backed by big names like Arthur Hayes, and while it’s conjured up some early Luna 2.0 fears due to its algorithmic stablecoin design, so far it’s doing well. Its USDe token, a synthetic dollar, has achieved a market cap of $3.6 billion in just a few months.

Key points

  • Innovative delta hedging strategy to maintain USDe peg
  • Currently the most profitable decentralized app (dAPP) YTD with $41 million in earnings
  • Business model designed to excel in bull markets, raising questions about long-term sustainability

6. Aerodrome: The Base Layer AMM

Aerodrome, an automated market maker (AMM) on the Base layer-2 network, has generated $85 million in revenue YTD. Launched in August 2023, it has quickly established itself as the top decentralized exchange (DEX) on Base.

Key points

  • Implements successful mechanisms from various DEX protocols
  • Uses vote-escrowed tokenomics to attract liquidity
  • Incorporates concentrated liquidity features to compete with Uniswap

7. Lido: The Liquid Staking Giant

Lido, a prominent liquid staking protocol, has generated $59 million in revenue year-to-date across Ethereum and Polygon proof-of-stake chains. Its popularity stems from making Ethereum staking more accessible to average users. 

Key points

  • Revenue comes from a 10% fee on users’ staking rewards
  • Profits of $22.5 million YTD after accounting for node operator payments and token incentives
  • Operates as a double-sided market, connecting ETH holders with professional node operators

8. Base: The Coinbase L2 Solution

Base, a fast-growing Ethereum layer-2 solution launched by Coinbase in Q3 2023, clocks in at $52 million in revenues YTD. As a relatively new entrant, its rapid growth is noteworthy, and its backing by Coinbase could see it reach the top of the food chain very quickly.

Key points

  • Revenue comes from user transaction fees
  • Impressive profitability with $35 million in earnings YTD
  • Benefited significantly from the implementation of EIP-4844 that reduced data availability costs

9. Uniswap Labs: The DEX Pioneer

Uniswap Labs, the company behind the popular decentralized exchange Uniswap, has generated $39.3 million in revenue YTD. Uniswap was the earliest DEX to gain real traction, and continues to play a crucial role in the DeFi ecosystem.

Key points

  • Revenue primarily comes from trading fees
  • Pioneered the automated market maker (AMM) model in DeFi
  • Continues to innovate, with features like concentrated liquidity in Uniswap V3

10. PancakeSwap: The BSC DeFi Leader

PancakeSwap, a leading DEX on the Binance Smart Chain (BSC), rounds out the top ten revenue-generators, with $36.3 million in revenue YTD. Its success highlights the growing importance of alternative blockchain ecosystems.

Key points

  • Largest DEX on Binance Smart Chain
  • Offers a wide range of DeFi services – including trading, yield farming, and NFTs
  • Lower transaction costs compared to Ethereum-based DEXs

Credit: Tesfu Assefa

Comparing the Ten Chains:

Revenue Generation (year-to-date)

  1. Ethereum: $1.42 billion
  2. Tron: $852 million
  3. Maker: $176 million
  4. Solana: $135 million
  5. Ethena: $93 million
  6. Aerodrome: $85 million
  7. Lido: $59 million
  8. Base: $52 million
  9. Uniswap Labs: $39 million
  10. PancakeSwap: $36 million

Ethereum’s revenue still dwarfs that of its competitors, emphasizing its dominant position. However, the presence of new entrants like Ethena, Base, and established DEXs like Uniswap and PancakeSwap shows that revenue is chain-agnostic and that investors will find it wherever they can. 

Remember the importance of understanding tokenomics; Lido, for example, still trades at under $2, the same price it had two years ago, despite its market cap growing 50x. When assessing a cryptocurrency, look at its fully diluted value (FDV) instead of current market cap. 

Profitability

Profitability varies significantly among these protocols due to differences in their business models and their running cost:

  • Ethena: leads in profitability with $41 million in earnings YTD.
  • Base: shows strong profitability with $35 million in earnings.
  • Maker: estimates $73 million in annualized earnings after costs.
  • Lido: reports $22.5 million in profits YTD.
  • Ethereum and Solana’s profitability is more complex due to token-issuance costs.
  • Profitability data for Uniswap Labs and PancakeSwap is not readily available.

Business Model Diversity

The top cash cows in crypto have diverse business models:

  • Infrastructure providers: Ethereum, Tron, Solana, Base
  • Stablecoin issuers: Maker, Ethena
  • DeFi protocols: Aerodrome, Lido, Uniswap, PancakeSwap

There is more than one way to skin a cat. Protocols in the crypto ecosystem can generate revenue in entirely different ways – from providing foundational infrastructure to offering specific financial services.

Market Position and Competition

  • Ethereum maintains its leadership position, but faces growing competition from layer-2 solutions and alternative layer-1 blockchains.
  • Tron has carved out a niche in stablecoin transfers, particularly in developing markets.
  • Maker continues to be a major player in the stablecoin space, but faces new competition from innovative protocols like Ethena.
  • Solana has shown resilience and adaptability, rebounding from near-collapse to generate healthy revenue.
  • Base and Aerodrome demonstrate the potential for new entrants to quickly gain market share with innovative features and strong backing.
  • Uniswap and PancakeSwap showcase the ongoing importance of decentralized exchanges, with each dominating their respective blockchains.

Sustainability and Future Outlook

When assessing these protocols, it’s crucial to consider the sustainability of their revenue models:

  • Ethereum’s shift to proof-of-stake and the growth of layer-2 solutions may impact its long-term revenue structure.
  • Tron’s reliance on stablecoin transfers could be vulnerable to regulatory changes or shifts in market dynamics.
  • Maker’s diversification into real-world assets may provide more stable revenue streams.
  • Ethena’s success in bull markets raises questions about its performance during market downturns.
  • Base and Aerodrome will need to maintain their innovative edge to continue attracting users and liquidity.
  • Uniswap and PancakeSwap face increasing competition from other DEXs, and may need to continue innovating to maintain their position in a competitive market.

Conclusion

The top ten cash cows in crypto are a mix of established giants, innovative newcomers, and specialized DeFi protocols. While Ethereum continues to dominate in terms of raw revenue, the success of newer protocols like Ethena and Base, as well as the continued relevance of DEXs like Uniswap and PancakeSwap, demonstrates the ongoing evolution and diversification of the crypto landscape.

The presence of both infrastructure providers and application-layer protocols in this list highlights the importance of a robust and diverse ecosystem. Investors and users should closely monitor these protocols, as their performance often serves as a barometer for broader trends in crypto. 

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Nada! How Cardano’s Community Thwarted DDoS Attack

Posted on by Werner

Introduction

The cryptocurrency sector recently witnessed an intriguing security event in the Cardano ecosystem – a distributed denial-of-service (DDoS) attack that was swiftly mitigated, showing the robustness of the blockchain and the ingenuity of its developer community, marking a victory for the collaborative spirit that defines the crypto space. 

Let’s delve into the details of this attack, its resolution, and the implications for Cardano’s future.

What is a DDoS attack?

DDoS (distributed denial of service) and DoS (denial of service) attacks have been a thorn in the side of Web2 businesses since 1996, causing billions of dollars of losses in the process. In the crypto world, there haven’t been many, although Electrum Wallet’s 2019 incident is a notable one: created a botnet of 152,000 hijacked wallets, and in 2020, two exchanges were shut down by DDoS attacks.

In short, DDoS (Distributed Denial of Service) attacks are malicious attempts to disrupt the normal operation of a cryptocurrency network, exchange, or service. Attackers flood the target with a massive amount of internet traffic from multiple sources, overwhelming its infrastructure and causing it to become unavailable to legitimate users. These attacks can have serious consequences: they can halt trading, block transactions, and cause financial assets to be lost.

Cardano DDoS Attack: Play-by-Play

On 24 June, 2024, the Cardano network experienced an unusual surge in activity. Fluid Token’s CTO reported that the attack commenced at block 10,487,530. 

The attacker’s strategy was to flood the network with transactions, each executing 194 smart contracts. At a cost of 0.9 ADA ($0.36) per transaction, the malicious actor attempted to congest the network by filling blocks with these spam transactions.

The intent behind this DDoS attack was twofold:

  • Primarily, it aimed to disrupt the network’s normal operations by overwhelming it with traffic. 
  • There was speculation that the attacker might have also been attempting to manipulate the fee structure to enable cheaper high-value transactions, or maybe to steal staked ADA tokens.

The attack resulted in a significant increase in network load, with chain utilization reaching peaks of 72% on average and up to 93% on an hourly basis. This heightened activity raised concerns among community members and developers who noticed the network’s sluggish performance.

Community Response and Investigation

As news of the attack spread, the Cardano community quickly mobilized. Developers, led by figures such as Philip Disarro from Anastasia Labs, began investigating the attack and formulating countermeasures.

Through on-chain analysis, community members traced the origin of the attack to addresses linked to the Kraken exchange. This discovery raised questions about the attacker’s identity and the potential for legal action. The transparency of blockchain technology was invaluable in this investigation, allowing for real-time tracking of the malicious transactions.

Interestingly, despite the attacker’s efforts to congest the network, their actions inadvertently contributed over 1,000 ADA in transaction fees to the Cardano treasury and stake pool operators. This unintended consequence showed how the Cardano network’s economic model can help keep it safe.

Technical Analysis and Vulnerability Discovery

As the community rallied to understand and counter the attack, developers like Mel from Harmonic Labs began dissecting the malicious transactions. By deserializing the UPLC (Untyped Plutus Core) of the attacking scripts, they discovered a critical flaw in the attacker’s strategy.

The scripts used in the attack were designed to always return ‘true’, no matter what input they were fed. This oversight meant that the scripts could be easily manipulated, providing an opportunity for the defenders to turn the tables on the attacker.

The Counterattack: A Brilliant Solution

Philip Disarro of Anastasia Labs identified a clever way to not only stop the attack but also claim the attacker’s funds. The solution involved deregistering the stake credentials used by the attacker. This action would force the attacker to re-register their credentials at a cost of 400 ADA each time they wanted to continue the attack, significantly increasing the financial burden of their malicious activities.

Moreover, this countermeasure allowed defenders to claim the attacker’s ADA, effectively turning the attack into a donation to the Cardano ecosystem. 

As Disarro put it:

Thanks for the free money, moron.

The community quickly implemented this solution, deregistering approximately 200 stake contracts from the attacker, which did the trick. 

Credit: Tesfu Assefa

Lessons Learned and Network Resilience

The failed DDoS attack provided several valuable insights into Cardano’s capabilities:

1. Network Capacity: Despite the high transaction volume, Cardano’s network continued to function, processing legitimate transactions alongside the spam. This demonstrated the blockchain’s ability to handle significantly increased loads, suggesting room for future scaling.

2. Community Strength: The rapid response and clever solution showcased the strength of Cardano’s developer community. Their ability to quickly analyze, respond, and implement countermeasures highlights the importance of a robust and engaged team.

3. Economic Model: The attack inadvertently proved the effectiveness of Cardano’s economic model. The attacker’s funds were not only used to pay transaction fees, but were also claimed by the defenders, turning a potential threat into a net positive for Cardano.

4. Transparency: The ability to track and analyze the attack in real-time demonstrated the value of blockchain transparency in security and incident response.

Future Implications and Upgrades

In the aftermath of the attack, the Cardano development team, including organizations like Intersect, began working on node upgrades to bolster the network’s resilience against these attacks. The upgrades aim to address potential vulnerabilities without compromising the network’s performance or decentralization.

The incident also sparked discussions about potential parameter adjustments, such as increasing block sizes or reducing block times, to further improve the network’s capacity and resilience.

Comparison with Other Networks

This event provided an interesting contrast to how other blockchain networks handle similar attacks. As noted in the community discussions, when Solana faces attacks, it often results in network shutdowns. Ethereum, on the other hand, typically sees transaction fees skyrocket during periods of network congestion.

Cardano’s ability to withstand the attack with only mild degradation in performance, coupled with the community’s innovative response, proves it is a robust and resilient blockchain platform.

Conclusion

The recent DDoS attack on Cardano, while potentially disruptive, ultimately served to demonstrate the strength and resilience of the network and its community. The swift and clever response thwarted the attack – and even turned it into an opportunity for growth and improvement. While Cardano has had its share of criticism – including some undeserved ridicule – for its slow development, its security has now been battle-tested and is hard to criticize. 

As Cardano continues to evolve, incidents like these provide valuable lessons and drive innovation. They underscore the importance of ongoing development, community engagement, and the power of decentralized systems in facing security threats.

The crypto world will undoubtedly be watching Cardano’s continued development with interest, as it sets new standards for blockchain resilience and community-driven problem-solving.

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How The Trump Shooting Sparked Crypto Revival

Posted on by Werner

On Saturday, July 13, 2024, former U.S. President Donald Trump was the target of a shocking assassination attempt during a campaign rally in Pennsylvania. The incident, which saw Trump narrowly escape death, has sent shockwaves through the political landscape and financial markets, including the cryptocurrency sector, with Bitcoin and friends immediately surging in price in its wake. 

This article examines the events surrounding the assassination attempt and its subsequent immediate and long term impact on the crypto markets.

The Trump Assassination Attempt

During a campaign event in Butler, Pennsylvania, a gunman attempted to assassinate Donald Trump, the Republican nominee for the 2024 U.S. presidential election as he was addressing supporters. Trump was shot in the ear but survived the attack and was ushered off the stage waving a defiant fist in the air, which was captured by a photographer for an iconic image. His campaign reported that he was doing well following the incident. 

Public sentiment has shifted dramatically in favor of Trump since the incident. He is now the 60% favorite according to betting markets in the presidential election in November.  

Immediate Market Reaction

In the aftermath of the assassination attempt, cryptocurrency markets experienced a significant surge, after weeks of decline due several factors, including summer holidays, bearish market pressure caused by Germany selling seized Bitcoin, as well the announcement that Mt Gox would begin returning stolen BTC to victims of the 2014 hack. 

After dropping as low as $53k during early July, Bitcoin (BTC), the world’s leading cryptocurrency and the one that dictates the overall market confidence in digital assets, saw a sharp increase in value, rising by more than 25% to reach $66.4k by Friday, July 19. This marked its highest level in four weeks and represented a year-to-date gain of approximately 54%. Other cryptocurrencies also benefited from the market movement, with Ethereum (ETH) rising 12.1% to $3,488.

The surge in crypto prices was not isolated to major currencies. Meme tokens associated with Trump also experienced substantial gains. For instance, MAGA leapt from around $6.35 to a brief peak over $9.50, the satirical TREMP token is up 15$ this week. Conversely, BODEN, a joke asset named after President Joe Biden, has declined by about 18%. 

Hundreds of pro-Trump memecoins were launched in the days after the shooting, most pumping and dumping within hours. 

5 Reasons For The Trump Shooting Crypto Rally

Several factors contributed to the cryptocurrency market’s positive reaction to the assassination attempt:

1. Increased Trump Victory Odds

The incident appears to have bolstered Trump’s chances of winning the presidency. Betting markets and political analysts suggest that the attack may garner sympathy votes and mobilize his base to vote. On the Polymarket prediction platform, the probability of Trump winning the presidency jumped to an all-time high of 70% following the incident.

2. Trump’s Pro-Crypto Stance

After slamming crypto during his first term, Trump has made a remarkable recent U-turn on crypto after it became clear that the tens of millions of Americans owning crypto could ultimately decide the next president. As a result, Joe Biden flip flopped soon after to also embrace crypto and the SEC stunningly approved a spot Ethereum ETF. 

Throughout his campaign so far, Trump has positioned himself as a champion of cryptocurrency. He has hosted cryptocurrency industry executives at Mar-a-Lago, and expressed enthusiasm for Bitcoin mining in the USA. Trump’s campaign is also the first from a major U.S. political party to accept cryptocurrency payments, signaling a potential shift in the regulatory landscape if he were to win the election.

3. Anticipated Regulatory Changes

Investors speculate that a Trump presidency could lead to a more favorable regulatory environment for cryptocurrencies. Trump has criticized Democratic attempts to regulate the crypto sector through the SEC and the controversial Operation Chokepoint 2.0 which has seen an exodus of Web3 firms from the USA, leading many to believe his administration would adopt a lighter touch approach to oversight.

4. Economic Policy Expectations

Trump’s previous tenure was marked by tax cuts and deregulation. Investors anticipate similar policies in a potential second term, which could drive up deficits and inflation. Such economic conditions often lead investors to seek alternative assets like cryptocurrencies as a hedge.

5. Trump’s VP pick is pro-crypto

The crypto market rally gained further momentum on Monday, July 15, when Trump announced 39 year-old Senator J.D. Vance of Ohio as his running mate. Vance, known for his tech-savvy background and pro-crypto stance, has further energized the digital asset community. He previously declared $250k in Bitcoin holdings and is an outspoken critic of crypto’s arch-enemy, SEC chairman Gary Gensler.

Vance’s selection is seen as a strategic move to appeal to both traditional conservatives and the tech-oriented younger demographic. 

The Trump-Vance Ticket and What It Means for Crypto

Vance’s pro-crypto credentials include:

  • Personal investment in Bitcoin through Coinbase, valued between $100,001 and $250,000
  • Support for bills promoting cryptocurrency innovation in the Senate
  • Opposing increased regulatory scrutiny of the crypto industry
  • Drafting legislation to overhaul digital asset regulation

The Trump-Vance ticket is viewed favorably by many in the crypto and tech industries. Notable figures – such as Peter Thiel (a mentor of Vance), Marc Andreessen (who has now also endorsed Trump publicly), Ben Horowitz, and the Winklevoss twins – have expressed support for the candidates. This backing from influential tech personalities adds credibility to the ticket’s pro-crypto stance.

Credit: Tesfu Assefa

USA and Crypto: Potential Trump Policy Shifts

Experts anticipate several policy changes under a potential Trump-Vance administration that could benefit the cryptocurrency market:

1. Deregulation: A return to Trump’s previous deregulatory approach could create a more favorable environment for crypto entrepreneurs and investors.

2. Currency Devaluation: Vance has advocated for a weaker dollar, which could indirectly boost Bitcoin’s value proposition as a hedge against currency devaluation.

3. Crypto-Friendly Banking Reforms: Policies making it easier for traditional institutions to hold their clients crypto in custody could lead to broader adoption.

4. Redefining Crypto Assets: A potential shift in how cryptocurrencies are classified could impact their regulatory treatment. At present only Bitcoin and now Ethereum have been greenlit as non-securities.

5. Antitrust Actions Against Big Tech: Vance supports antitrust measures against major tech companies, and this could create opportunities for blockchain-based Web3 alternatives, which hold huge potential to disrupt the monopoly of Web2 giants.

Market Outlook and Expert Opinions

While the crypto market has responded positively to these political developments, opinions vary on the long-term implications:

Matthew Sigel, head of digital assets research at VanEck, believes the Trump-Vance ticket represents a significant shift toward a more crypto-friendly regulatory environment. He suggests their pro-business stance could pave the way for a more favorable environment for crypto entrepreneurs and investors.

Mark Cuban, billionaire entrepreneur and investor, posited on social media in a long post that the support from Silicon Valley for the Trump-Vance ticket might be motivated by potential benefits to Bitcoin. He argues that lower tax rates and tariffs, combined with global uncertainty about the USA’s geopolitical role, could accelerate Bitcoin’s price and potentially establish Bitcoin as a global ’safe haven’ currency.

Conclusion

The assassination attempt on Donald Trump and the subsequent selection of J.D. Vance as his running mate have provided an unlikely shot-in-the-arm for the cryptocurrency markets. The rally in Bitcoin and other digital assets reflects renewed investor optimism about the future of the space, which may soon be under more crypto-friendly regulations. 

There is a near-consensus opinion that the Fed will reduce interest rates by a quarter of a percentage point, or 25 basis points, for the first time since the end of 2021, so the stars seem to be aligning for Bitcoin and its children.

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ASI Merger Is Here: SingularityNET, Fetch.AI and Ocean Protocol’s Crypto AI Super Alliance Fights Back!

Posted on by Werner

The Decentralized Resistance joins forces and fights back. Our bid to keep artificial intelligence development democratic and open is about to get supercharged thanks to the merger of three of the biggest crypto AI projects: SingularityNET (AGIX), Fetch.ai (FET), and Ocean Protocol (OCEAN). 

It’s the hottest thing in crypto AI this year and it’s called the Artificial Superintelligence Alliance (ASI). Like its name suggests, it’s big and ready to fight. 

Fetch.ai, Ocean Protocol Foundation, and SingularityNET Foundation will continue operating independently but will collaborate closely within the ASI tokenomic ecosystem. The merger brings together the expertise of renowned AI pioneers, ensuring ethical and innovative AI development.

Together, the three ASI partners make up a market cap of nearly 3 billion dollar and represent some of the smartest and innovative minds in the space. It’s super-ambitious and is aiming for a 7.5 billion dollar market cap post-launch.

If this flew under your radar, fret not, but keep reading this article. Let’s take a look at the entities behind it, why it’s been created, what each party brings to the table, and what essential information that AGIX investors and supporters should know. 

Artificial General (AGI) vs Super Intelligence (ASI)

Artificial General Intelligence (AGI) and Artificial Superintelligence (ASI) are both advanced forms of artificial intelligence, but they differ in their capabilities and scope: the term ‘AGI’ emphasizes matching human intelligence in flexibility and generality, while the term ‘ASI’ emphasizes capabilities beyond the greatest human geniuses: a machine-mind that can whip up new theoretical physics in an hour,

  • AGI is a hypothetical AI system that can match human-level cognitive abilities, including self-teaching and problem-solving across various domains. It is considered strong AI, as it can perform any intellectual task that a human can. 
  • ASI however is a hypothetical AI system that surpasses human intelligence. A mind of superhuman genius. It would have thinking skills never before seen in the known universe: able to ingest millions of scientific data in seconds, and understand them with the nuance and common sense of a real intelligence. 

While AGI is focused on matching human intelligence, ASI aims to exceed it. 

What is the Artificial Superintelligence (ASI) Alliance?

ASI is a unified network aimed at accelerating the development of decentralized artificial superintelligence (ASI). The new partners had to put the merger proposal to a vote with their respective communities, and have now received the community greenlight to join forces. 

ASI wants to reshape the landscape of AI research and development, challenging the dominance of centralized tech giants and promoting an open, democratic, and ethical AI ecosystem.

The alliance is not a merger of the three technology platforms. It is a merger of their three tokens.

Overview of SingularityNET, Fetch.ai, and Ocean Protocol

SingularityNET

Founded by Dr. Ben Goertzel, SingularityNET is a decentralized marketplace for AI services. Its mission is to create inclusive, democratic, and beneficial Artificial General Intelligence (AGI), a concept coined or popularized by Dr. Goertzel. The platform allows companies and developers to trade algorithms at scale without a central controller, reducing costs and barriers to entry. SingularityNET is developing its own AGI system, the OpenCog Hyperon AGI framework, and using OpenCog Hyperon and the AI marketplace, SingularityNET aims to leverage its decentralized tools for emergent superintelligence.

Fetch.ai

Fetch.ai is building a decentralized machine learning network that enables users to access secure datasets and execute tasks using autonomous AI agents. This empowers consumers to create and deploy versatile AI for various tasks. The Fetch.ai tech stack includes a Cosmos-based Layer 1 network and a multi-agent framework, facilitating rapid deployment of commercial AI applications.

Ocean Protocol

Ocean Protocol provides a secure, privacy-preserving platform for trading tokenized data assets, giving a way to financially support AI models through their development lifecycle. One of its flagship tools is ‘Predictoor’ for crowdfunded predictions, which has gained traction in the crypto-finance community. Ocean Protocol aims to  manage data requirements for both small-scale and large-scale AI systems ethically and securely.

Credit: Tesfu Assefa

Why Is ASI Needed? 

In the race towards AGI and ASI, the choice is stark in 2024: a choice between either centralized control by Big Tech and the military, or else a decentralized, open network. As most new entrants have found, AI’s barriers to entry are now incredibly high, and a few Web2 behemoths like Microsoft, Alphabet and Amazon are very far ahead thanks to financial power. 

As a result, the leaders of SingularityNET, Ocean and Fetch had to make a necessary choice: adapt or die.

The mission of the ASI Alliance is to ensure that decentralized ASI is in the race, benefiting humanity as a whole. 

This alliance aims to make a real-world impact with decentralized AI, to guide the public and the industry towards decentralized AGI and ASI with continuously improving AI applications. By uniting their strengths, Fetch.ai, SingularityNET, and Ocean Protocol are poised to create synergies that exceed their individual capabilities.

This begins with the merger of AGIX, FET, and OCEAN tokens into the new ASI token. The total supply of ASI will be 2,630,547,141 dollar tokens, distributed among AGIX, FET, and OCEAN holders.

Leadership and Governance

A governing council will guide the Superintelligence Alliance, with Dr. Ben Goertzel as CEO and Humayun Sheikh as Chairman. Bruce Pon and Trent McConaghy will represent Ocean Protocol. 

Key Benefits of the Partnership

Here are five good reasons why the ASI alliance is a great idea:

  • The merger creates the largest open-source, decentralized player in AI research and development.
  • It provides an unprecedented opportunity to challenge Big Tech’s control over AI. 
  • It leaves the technology platforms and development operations of the three partners largely intact and independent, while merging their tokens on the market.
  • By combining their research, brands, technologies, and products, Fetch.ai, SingularityNET, and Ocean Protocol lay the foundation for a scalable decentralized AI infrastructure.
  • The merger facilitates the commercialization of each company’s technology, offering universal access to cutting-edge AI platforms and large databases.

Essential Q&A for AGIX Holders

1. Why are these tokens merging?

The merger aims to consolidate resources and accelerate the development of decentralized ASI. Rather than try to merge the technologies of the three platforms, it aims to merge their economic muscle.

2. How does this benefit token holders?

Tokenholders will benefit from a streamlined ecosystem, greater interoperability, and accelerated progress towards decentralized AGI and ASI.

3. How will this transaction work?

Existing AGIX, FET, and OCEAN tokens will be converted into ASI tokens at specified conversion rates.

4. What are the token conversion rates?

AGIX holders will receive 0.433350 ASI per AGIX token, FET holders will receive 1 ASI per FET token, and OCEAN holders will receive 0.433226 ASI per OCEAN token. This aligns pro-rata with their respective crypto asset prices at the time the announcement was made.

5. Do I need to do anything?

No immediate action is required. Conversion tools will be provided if necessary.

6. What does this mean for my AGIX tokens?

Your AGIX tokens will become ASI tokens, integrating into a larger new asset.

7. How do I exchange my AGIX token for a merged ASI token?

Conversion tools will be provided. Follow the instructions from official channels like the SingularityNET blog and Telegram.

8. My AGIX tokens are staked and I won’t have access to them to participate in the merger. What should I do?

A migration tool will be available. Tokens can be converted once they are unstaked.

9. What happens to my tokens on centralized exchanges?

Tokens on centralized exchanges will be automatically converted to ASI. Holders do not need to take any action.

Conclusion

The ASI merger certainly marks an exciting but challenging new chapter in the AI landscape and the battle for little guys to shape the development of Artificial Superintelligence. By merging Fetch.ai, SingularityNET, and Ocean Protocol, a multi-billion dollar alliance is created. This has the strength to drive progress towards decentralized AGI and ASI, ensuring ethical and trustworthy practices. 

ASI’s formation accelerates AI development but also democratizes access to AI technologies, challenging the dominance of centralized tech giants. As the world watches, the ASI Alliance stands ready to lead the next wave of innovation in decentralized AI.

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BlackRock’s RWA Vision: Pioneering the Future of Tokenized Assets and Securities

Posted on by Werner

BlackRock, the world’s largest asset manager with over $10 trillion in assets under management, first stirred the crypto pot in August 2022 when it announced that it would use Coinbase to service its Aladdin clients. In late 2023, it came to the rescue when the SEC besieged the crypto industry by announcing its iShares spot Bitcoin ETF application. That sent BTC on a rocket ride from $25,000 to nearly $75,000 this year, as I predicted last year.

The ETF approvals in January 2024 finally made the world’s biggest cryptocurrency an accessible mainstream investment that anyone and their grandmother could own without fear of security or regulatory risks. 

Almost immediately after the SEC greenlit Bitcoin spot ETFs, BlackRock execs began to endorse Ethereum and unveiled plans for an ETH spot ETF, which has now also come to fruition and will start trading imminently (2 July) if analysts are to be believed. 

The ETFs are all roads however that legitimize blockchain and smart contract technology to lead to BlackRock’s Grand Plan: 

Tokenizing the world’s assets, or real world assets (RWA). Why trade Monday to Friday in US office hours only, if you could allow the whole globe to trade the US stock market and treasuries anywhere, anytime? 

BlackRock goes all out on RWAs

To that effect, BlackRock already announced in April 2024 that it would be launching a new RWA fund called the BlackRock USD Institutional Digital Liquidity Fund (BUIDL) that will invest in tokenized treasuries and repos. Coinbase, yet again, will play an important role as a key infrastructure provider. 

The TradFi behemoth doubled down on RWAs by investing $47 million into Securitize, an RWA tokenization firm. With a significant portion of its portfolio dedicated to real estate assets, approximately $39 billion, the potential impact of tokenizing property investment is immense. 

Larry Fink, CEO of BlackRock (and of Bitcoin as well? just kidding maxis, put down the pitchforks) sees the big picture very clearly:

I believe the next generation for markets, the next generation for securities will be tokenization of securities, and if we could have a distributed ledger that we know every beneficial owner, every beneficial seller, we all have our code of who’s buying, who’s selling – instantaneous settlement – think about it! It changes the whole ecosystem!

What exactly are Real World Assets (RWAs), and why is this significant for BlackRock?

Credit: Tesfu Assefa

What are RWAs?

As we discussed in a previous article, Real World Assets (RWAs) is a very hot new crypto narrative about converting ownership rights of various tangible and intangible assets into digital tokens using blockchain technology. These assets can be bonds, equity, and real estate, or even cultural assets like art and collectibles. 

Tokenizing RWAs offers several compelling benefits:

  1. Enhanced liquidity: Traditional assets, particularly real estate and fine art, are often illiquid. Tokenization allows these assets to be broken down into smaller, tradable units, increasing their liquidity.
  2. Transparency: Blockchain technology provides a transparent and immutable ledger, ensuring that ownership and transaction histories are easily verifiable.
  3. Access to investment opportunities: By lowering the barriers to entry, tokenization makes it possible for a broader range of investors to participate in markets that were previously inaccessible.

BlackRock USD Institutional Digital Liquidity Fund (BUIDL Fund)

The launch of the BUIDL fund in March 2024 on the Ethereum blockchain represents BlackRock’s first tokenized offering, and is a crucial component of its broader strategy. The BUIDL fund attracted $245 million in its first week of operations, showing massive investor interest and confidence in tokenized assets.

The fund is represented by the BUIDL token, which is fully backed by cash, U.S. Treasury bills, and repurchase agreements to ensure its stability and confidence among investors.

Token holders receive daily yield payouts via blockchain rails, providing a seamless and efficient way to distribute earnings. 

BlackRock’s partnership with Coinbase is notable because it represents a collaboration between a traditional financial institution and a cryptocurrency exchange. Cross-industry collaboration between crypto and TradFi is crucial for growing and developing the RWA market, bringing together the traditional financial world and the emerging world of digital assets.

Secondly, BlackRock’s involvement is likely to get RWAs adopted into the mainstream quicker. With its vast network of institutional clients and its reputation as a trusted asset manager, BlackRock has the potential to bring significant capital and credibility to the RWA market, helping to drive growth and attract new investors.

BlackRock’s Partnerships and Ecosystem

BlackRock’s strategy is to create a robust ecosystem through strategic partnerships, ensuring the seamless operation and security of its tokenized assets. Partners include:

  • Securitize: As the transfer agent and tokenization platform for the BUIDL fund, Securitize plays a pivotal role in managing the token issuance and lifecycle. BlackRock’s investment in Securitize, coupled with Joseph Chalom’s appointment to Securitize’s board, underscores its commitment to this partnership.
  • BNY Mellon: Serving as the custodian of the BUIDL fund’s assets, BNY Mellon ensures the safekeeping and proper management of the underlying assets.
  • Other Key Participants: The fund’s ecosystem includes prominent names like Anchorage Digital Bank, BitGo, and Fireblocks, each contributing to the security and functionality of the tokenized assets.
  • Circle’s Smart Contract Feature: This feature enables BUIDL holders to exchange shares for the USDC stablecoin, adding another layer of flexibility and liquidity.
  • Ondo Finance’s OUSG Token: By moving $95 million of assets to BlackRock’s BUIDL fund, Ondo Finance’s OUSG token achieves instant settlement, showcasing the efficiency of tokenized assets.

Future of Tokenized MMFs and RWAs

The future of tokenized Money Market Funds (MMFs) and other securities is not confined to centralized platforms. BlackRock envisions a broader distribution across various trading platforms and decentralized finance (DeFi) protocols. 

This decentralized approach can unlock numerous opportunities:

  • Collateral for lending: Tokenized MMFs can serve as collateral in smart contract loans, providing additional security for borrowers and lenders.
  • Liquidity pool deposits: These tokens can be deposited into the liquidity pools of automated market makers, enhancing market efficiency and liquidity.

What is the ERC-3643 Token Standard?

Compliance with existing regulations is key to the success of tokenized assets. The ERC-3643 token standard is designed to address this requirement by embedding compliance at the token level.

ERC-3643 ensures that tokens adhere to regulatory requirements, providing a level of assurance that is crucial for institutional investors.The standard is being spearheaded by a non-profit community, and has been presented to regulators worldwide. It’s steadily gaining recognition for its ability to uphold security laws while facilitating innovation.

Cogito Moves Into RWA Space

Cogito, Mindplex’s partner in the SingularityNET ecosystem, is making waves in the RWA market with its innovative approach. The platform recently obtained a tokenized fund license from CIMA, allowing it to offer fully regulated RWA investment products. 

Cogito’s unique offerings include TFUND (tokenized treasury bonds), GFUND (tokenized green bonds), and XFUND (an AI-managed basket of tech stocks), catering to various investor preferences. 

By leveraging AI to manage investments and providing crypto and fiat on-ramps, Cogito is making RWAs accessible to a wide range of investors, driving adoption and growth in the market.

Conclusion

No matter what you think about their powerful financial and political influence in our world, BlackRock’s involvement in crypto has so far helped to champion the sector to new regulatory and market highs. Its vision for the RWA market is a forward-thinking strategy that promises to revolutionize the investment landscape and bring crypto and TradFi closer together than ever before. 

By tokenizing a significant portion of its assets, BlackRock is enhancing liquidity and transparency, and also opening access to traditionally exclusive investment opportunities. The successful launch of the BUIDL fund and the strong assembly of partners will give it a precedence that other traditional firms will find irresistible. 

BlackRock, as usual, can never be counted out.

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Real World Assets (RWAs) Primer: Crypto’s Ultimate Use Case?

Posted on by Werner

Introduction

With the Bitcoin Halving and Bitcoin and Ethereum spot ETF approval in the rear view mirror in mid 2024, crypto investors’ are now asking what’s next for the world of Decentralized Finance (DeFi).

The recent regulatory approval of Ethereum can help spread one of the biggest crypto narratives for 2024, known as Real World Assets, or RWAs in short. These hybrid financial assets are offering investors a unique opportunity to diversify their portfolios and tap into the potential of tokenizing traditional financial assets. 

The RWA market is expected to experience significant growth in the coming years; some predict a 5-10 trillion USD market cap by 2030. As more investors seek to bridge the gap between traditional finance and the digital realm, RWAs are emerging as an attractive option for those looking to invest in tangible assets while enjoying the benefits of blockchain technology. It’s easier to understand, less volatile and can unlock all the benefits that come with decentralized networks. 

Let’s dive in with a primer on RWAs. 

What are RWAs?

RWAs are physical or non-physical assets from the real world that are tokenized and represented on a blockchain. This can include a wide range of assets, such as

  • real estate, 
  • precious metals, 
  • stocks, 
  • bonds, 
  • commodities, 
  • art, and 
  • collectibles

When these assets become tokens, they become more accessible, tradable, and divisible within the crypto ecosystem, opening up new opportunities for investors who may have previously been excluded from certain markets by high barriers to entry, or by lack of liquidity. They can be traded 24/7 from anywhere in the world, without geographical or technological barriers. 

How are Real World Assets tokenized?

The process of tokenizing real-world assets can get very complex, but these are the broad strokes:

  • First, the asset must be appraised to determine its value. 
  • Next, a legal framework is established to define the rights and responsibilities of token holders. 
  • The token is then issued on a blockchain platform, making it available for trading. 

Platforms like Cogito, a SingularityNET ecosystem partner, are simplifying this process for investors, providing user-friendly interfaces and streamlined workflows for creating and managing RWA tokens.

Why are RWAs Gaining Popularity?

While they’re not as sexy as other crypto trends such as AI cryptocurrencies, GameFi and memecoins (and even DePIN), there are several reasons why RWAs are touted as the ultimate use case for blockchain technology.  

  1. They’re stable

RWAs introduce real, tangible value into the often volatile crypto market, providing a level of stability that pure cryptocurrencies may lack.

  1. They bridge the gap with TradFi 

The involvement of major players like BlackRock is bringing massive growing institutional interest in RWAs, potentially leading to mainstream adoption.

  1. They bring liquidity to assets

Tokenization allows previously illiquid assets to be traded 24/7 on crypto exchanges, giving investors greater flexibility and liquidity.

  1. They make TradFi assets more accessible

RWAs lower the barriers to entry for high-value investments by enabling fractional ownership, making these assets more accessible to a wider range of investors.

BlackRock’s RWA Plans

Earlier this year, BlackRock, the world’s largest asset manager, doubled down on its long-term plans for crypto by announcing it was entering the RWA market. Through a partnership with Coinbase, BlackRock launched BUIDL (BlackRock’s USD Institutional Digital Liquidity Fund) a fund investing in tokenized treasuries and repos.

This move validates RWAs as a viable investment opportunity, and could potentially accelerate mainstream adoption. In previous years US regulators like the SEC have come down hard on previous attempts to tokenize securities, such as securitized token offerings (STOs), and prosecuted exchanges like Binance and Kraken.

With BlackRock’s vast network and massive influence on Capitol Hill, the company could bring significant capital and credibility to the space, driving growth and attracting new investors. The collaboration between a traditional financial giant and a crypto exchange is crucial to bridging the gap between the two worlds.

In fact, with the Ethereum spot ETF now approved, many crypto experts believe that BlackRock’s real ambitions for crypto stretch far beyond just ETFs – that they ultimately aim to tokenize all real world assets! Just listen to how their CEO Larry Fink waxes lyrical on tokenization here.

Credit: Tesfu Assefa

Top RWA Projects in 2024

Several notable projects and platforms are leading the way in the RWA space, each offering unique features and benefits for investors.

Ondo Finance: Tokenizing Traditional Assets

Ondo Finance is currently the biggest player in the RWA space with a market cap of $1.7 billion. It leads the pack thanks to its ability to bridge TradFi and DeFi. Ondo’s partner with established financial institutions to help ensure the security and stability of tokenized assets. 

Ondo focuses on tokenizing traditional assets like corporate bonds and treasuries, and works with BlackRock, moving nearly $100 million over to the BUIDL network. The platform aims to provide investors with access to these assets through a user-friendly interface, making it easier for them to diversify their portfolios. 

Mantle: Bringing Real Estate to the Blockchain

Mantle is a platform that focuses on tokenizing real estate assets, allowing investors to gain exposure to this traditionally illiquid market through fractional ownership. The platform uses blockchain technology to ensure the security and transparency of these investments, providing investors with a new way to participate in the real estate market without the large upfront capital or extensive paperwork that would be required to buy houses or commercial buildings.

RealT

RealT is another platform that tokenizes real estate, turning ownership of properties into digital tokens, allowing people to invest in fractional ownership, and trade with less friction. Like Mantle, RealT is making it easier for investors to access the real estate market without the need for large upfront investments or lengthy paperwork processes.

Pendle: Unlocking Yield Opportunities

Pendle is a platform that is focused on unlocking yield opportunities in the RWA market. The platform achieves this by tokenizing future yield, allowing investors to buy and sell the rights to future cash flows from various assets. 

This innovative approach provides investors with a new way to generate passive income and potentially earn higher returns than traditional fixed-income investments. Pendle’s platform is designed to be user-friendly and accessible, making it easier for investors to participate in the RWA market and take advantage of the unique yield opportunities it offers.

MakerDAO

Stablecoins are a core component of a resilient RWA market. As such, MakerDAO is playing an important role by using RWAs as collateral to stabilize the value of its DAI stablecoin. 

By accepting real-world assets as collateral, MakerDAO is able to create a more stable and reliable stablecoin that is backed by tangible value. This innovative approach has helped to establish MakerDAO as a leader in both the RWA and stablecoin spaces, paving the way for other projects to follow suit. MakerDAO has restored much-needed trust in algorithmic stablecoins following the brutal 2022 demise of Terra Luna that wiped tens of billions from investor accounts. 

Centrifuge

Centrifuge is another notable player in the RWA market, offering a platform for tokenizing and financing real-world assets like invoices and loans. It unlocks liquidity and provides new financing options for businesses and investors alike.

SingularityNET’s Cogito Gets RWA License

Cogito, a SingularityNET ecosystem partner, is another sleeping giant in the RWA market that is starting to wake up, making huge strides in tokenizing real-world assets in 2024. Recently, Cogito obtained a tokenized fund license from the Cayman Islands Monetary Authority (CIMA), becoming one of the first companies to offer fully regulated RWA investment products.

Cogito is committed to making RWAs accessible to a wide range of investors, including both institutional and retail investors. The platform offers both crypto and fiat on-ramps, making it easy for investors to purchase RWA tokens using their preferred currency. This accessibility is key to driving adoption and growing the overall market for RWAs.

Cogito’s approach to RWAs is unique in several ways:

  • The platform offers a range of innovative investment products, including the TFUND (tokenized treasury bonds), GFUND (tokenized green bonds), and XFUND (an AI-managed basket of tech stocks). 
  • These products are designed to cater to different investor preferences and risk profiles, providing a diverse range of options for those looking to invest in RWAs.
  • Importantly, Cogito is leveraging the power of artificial intelligence to help manage and optimize its RWA investments. By using AI algorithms to analyze market data and identify investment opportunities, Cogito is able to make more informed decisions and potentially generate higher returns for its investors.

Conclusion

There’s no room left for doubt: Real World Assets are here to stay. In fact, they might dominate the crypto sector by the end of the decade. With the potential to introduce real, tangible value into the digital asset ecosystem, RWAs offer investors a compelling opportunity to diversify their portfolios and gain exposure to a wide range of assets.

As more institutional behemoths like BlackRock enter the market and innovative platforms like Cogito continue to develop new investment products and services, the future looks bright for RWAs. While there are certainly challenges and risks to be aware of, such as regulatory uncertainty and the need for robust security measures, the potential benefits of RWAs are simply too great to ignore.

Let us know your thoughts! Sign up for a Mindplex account now, join our Telegram, or follow us on Twitter. 

Ten Key Crypto Technical Indicators for Beginners To Know in 2024

Posted on by Werner

Note from the editor: This is not financial advice. The claim that technical indicators predict future price movements better than chance has not been validated by Mindplex.

The Bitcoin halving has come and gone, and crypto markets are in the doldrums of summer. Explosive growth has settled into a cruise, presenting the perfect opportunity to master an important component of crypto investment success: technical indicators, which are tools used to perform technical analysis (TA).

Are you new to the world of cryptocurrency trading and feeling overwhelmed by the sheer number of technical indicators available? Or you’re an inexperienced investor that just can’t figure out what’s going to happen next? That’s because the crypto market is dominated by short-term trading, mostly with bot trading tools, that look at specific indicators to devise an optimal strategy. Therefore, while you don’t have to be a pro trader, you should at least know the rules of the trading game before you invest in shorter time frames. 

In this article, I’ll cover ten important crypto trading indicators that any crypto trader can try and master in 2024 to manage their Bitcoin and Ethereum. These indicators (which I’ll explain in descending order of importance) will help you make more informed trading decisions in the dynamic crypto market.

It’s important to note that no single indicator should be viewed in isolation. Instead, traders should use a combination of indicators to confirm signals and make more informed decisions. By using multiple indicators together, you can gain a more comprehensive understanding of market trends, potential entry and exit points, and overall market sentiment. 

Credit: Tesfu Assefa

1. Moving Averages

What is a Moving Average?

A moving average is a technical analysis tool that smooths out price data by creating a constantly updated average price over a specific period.

Moving Average Indicator (Credit: Werner Vermaak’s image from TradingView)

What does it do?

Moving averages help identify trends and potential support and resistance levels. They can also serve as a foundation for other technical indicators.

How it works

The two most common moving averages are the simple moving average (SMA) and the exponential moving average (EMA). An SMA is calculated by taking the average price over a set number of periods – while an EMA gives more weight to recent prices.

2. Relative Strength Index (RSI)

What is a RSI?

The Relative Strength Index (RSI) is an unmissable momentum indicator that measures the speed and magnitude of price changes. Its stochastic RSI variant is said to provide an easy visual way to see whether prices are bottoming or topping. 

RSI Indicator. (Credit: Werner Vermaak’s image from TradingView)

What does it do?

RSI helps identify overbought and oversold conditions, which can signal potential reversals or trend confirmations.

How it works

RSI oscillates between 0 and 100. Readings above 70 suggest an overbought condition, while readings below 30 indicate an oversold condition.

3. Bollinger Bands

What are Bollinger Bands?

Bollinger Bands are volatility indicators that consist of a middle band (typically a 20-day SMA), plus two outer bands set two Standard Deviations above and below that middle band.

What does it do?

Bollinger Bands help identify potential overbought and oversold conditions, as well as potential breakouts when the price moves outside the bands.

How it works

When the price touches the upper band, it’s considered overbought, and when it touches the lower band, it’s considered oversold. A squeeze in the bands often precedes a breakout.

4. Fibonacci Retracement

What is a Fibonacci Retracement?

Degen traders’ favorite tool of choice, Fibonacci retracement levels are based on the controversial Fibonacci sequence and are used to identify potential support and resistance levels.

What does it do?

Fibonacci retracement levels allegedly help traders set price targets and determine entry and exit points.

How it works

Credit: Werner Vermaak

The most commonly used Fibonacci retracement levels are 23.6%, 38.2%, 50%, 61.8%, and 78.6%. These levels are plotted on a chart by drawing a line from a swing high to a swing low (or vice versa) and then dividing the vertical distance by the key Fibonacci ratios.

5. On-Balance-Volume (OBV)

What is an OBV?

On-Balance-Volume (OBV) is a volume-based indicator that helps confirm price trends and predict potential reversals.

What does it do?

OBV can help identify divergences between price and volume, which can signal a potential trend reversal.

How it works

Credit: Werner Vermaak

OBV adds or subtracts volume based on whether the price closes higher or lower than the previous day. If OBV is rising while the price is flat or declining, technical analysts claim that suggests a potential price increase, and vice versa.

6. Moving Average Convergence Divergence (MACD)

What is a MACD?

    The Moving Average Convergence Divergence (MACD) is a trend-following momentum indicator that shows the relationship between two moving averages.

    What does it do?

    MACD helps identify trend changes, momentum, and potential buy and sell signals.

    How it works

    Credit: Werner Vermaak

    MACD consists of a MACD line (the 12-day EMA minus the 26-day EMA) and a signal line (a 9-day EMA of the MACD line). When the MACD line crosses above the signal line, it’s a bullish signal, and when it crosses below, it’s a bearish signal.

    7. Stochastic Oscillator

    What is a Stochastic Oscillator?

    The Stochastic Oscillator is a momentum indicator that compares the closing price of an asset to its price range over a specific period.

    What does it do?

    The Stochastic Oscillator helps identify overbought and oversold conditions and potential reversals.

    How it works

    Credit: Werner Vermaak

    The indicator consists of two lines: %K and %D. When %K crosses above %D, it’s a bullish signal, and when it crosses below, it’s a bearish signal. Readings above 80 suggest an overbought condition, while readings below 20 indicate an oversold condition.

    8. Ichimoku Cloud

    What is an Ichimoku Cloud?

    The Ichimoku Cloud is a comprehensive indicator that provides a quick overview of an asset’s price action, trend direction, and potential support and resistance levels.

    What does it do?

    The Ichimoku Cloud helps traders identify the prevailing trend, gauge momentum, and spot potential buy and sell signals.

    How it works

    Credit: Werner Vermaak

    The Ichimoku Cloud consists of five lines: the Tenkan-sen, Kijun-sen, Senkou Span A, Senkou Span B, and the Chikou Span. When the price is above the cloud, it’s considered bullish, and when it’s below the cloud, it’s considered bearish.

    9. Aroon Indicator

    What is the Aroon Indicator?

    The Aroon Indicator is designed to identify trend changes and measure the strength of a trend.

    What does it do?

    The Aroon Indicator can help traders spot trend changes and potential entry and exit points.

    How it works

    Credit: Werner Vermaak

    The indicator consists of two lines: the Aroon Up and the Aroon Down. When the Aroon Up is above the Aroon Down, it indicates an uptrend, and when the Aroon Down is above the Aroon Up, it indicates a downtrend.

    10. On-Chain Metrics

    What are On-Chain Metrics?

    On-chain metrics provide valuable insights into the fundamental health and activity of a cryptocurrency network. Looking at data such as total market cap, circulating supply, fully diluted value, total value locked, dApp activity, transaction count, user activity and more can help you see through all the smoke and mirrors in a bull market. 

    What do they do?

    By monitoring on-chain metrics, traders can gauge the overall sentiment and growth potential of a particular cryptocurrency.

    How it works

    Credit: Werner Vermaak

    Some important on-chain metrics include transaction volume, active addresses, network value to transaction ratio (NVT), and realized cap. These metrics can be tracked using various blockchain explorers and analytics platforms.

    Conclusion

    In conclusion, these ten essential crypto technical indicators provide a powerful foundation for beginner traders in 2024, but it’s good to keep in mind that it barely scratches the surface of what’s possible in technical analysis. 

    You can test out applying these indicators for yourself, and see if they help you make more informed trading decisions or improve your chances of success in the dynamic crypto market.

    However, it’s crucial to remember that no single indicator is perfect, and relying on just one can lead to suboptimal results. Maybe using a combination of indicators to confirm signals will help you gain a more comprehensive understanding of market trends and sentiment.

    As you continue your trading journey, stay committed to continuous learning and adapting to the ever-changing crypto landscape. With dedication and practice, you’ll be well on your way to becoming a proficient trader in the exciting world of cryptocurrencies.

    Let us know your thoughts! Sign up for a Mindplex account now, join our Telegram, or follow us on Twitter. 

    W’ETH Done It! Ethereum Spot ETF Approval Opens World to Web3

    Posted on by Werner

    Introduction

    While the traditional crypto wisdom is to sell in May and go away, Ethereum had other plans. On 23 May 2024, the U.S. Securities and Exchange Commission (SEC) surprisingly greenlit spot Ethereum (ETH) exchange-traded funds (ETFs) in principle. This has sent its price skyrocketing and turned its future very bright. Most crypto investors thought this would never come, due to the United States’ onslaught on cryptocurrency technology, or would require a multi-year political struggle.

    It marked a pivotal and triumphant moment for the cryptocurrency market that will boost its development even further and bolster a beleaguered US crypto sector dragged down by heavy-handed regulation the last few years. It also again showed that politics and finance always intertwine, coming soon after Donald Trump’s embrace of crypto in the US essentially forced that country’s Democrat party to make a dramatic U-turn on the sector in what will be a tough election year to keep Joe Biden in power.

    In this article, we’ll explore the implications of this approval, the impact its had on Ethereum and the broader crypto market, and the potential benefits for retail investors.

    What is an Ethereum ETF?

    An Ethereum ETF is a financial product that allows investors to buy shares representing a stake in Ethereum, without needing to directly purchase or manage the cryptocurrency itself. ETFs are traded on traditional stock exchanges, making them accessible to a wider range of investors. The approval of these ETFs means institutional and retail investors can now gain exposure to Ethereum through regulated financial products.

    The Road to Approval

    The journey to the approval of Ethereum ETFs has been long and difficult, and fraught with regulatory hurdles since Vitalik Buterin – with co-founders including Cardano’s Charles Hoskinson and Polkadot’s Gavin Wood – launched Ethereum in 2015 as a novel application of blockchain technology. 

    The SEC’s approval of Bitcoin ETFs earlier in the year laid a path down for Ethereum ETFs to follow. This path was studded with rigorous analysis and a public comment period, during which stakeholders provided feedback on various aspects of the proposed ETFs, including custodianship, sponsor fees, and creation and redemption models.

    Market Reactions and Expectations

    Impact on Ethereum’s Price

    A tweet from influential analysts Eric Balchunas and James Seyffart increased the estimated odds of an Ethereum ETF to 75%. The result: the price of ETH spiked within hours to nearly $4,000, before retracing. 

    Following the announcement, the price of Ethereum remained largely unchanged, soon dropping to as low as $3,500 in typical “sell the news” behavior. A number of other factors also impacted the ETH price blowoff. Notably, additional hurdles must be cleared first before an actual Ethereum ETF is approved, such as the final filing of amended S1 applications for each issuer (BlackRock is pushing for a July 4th launch) as well as another round of Mt Gox FUD. And of course, there’s also the question of whether we’ll see another huge sell-off from Grayscale holders. 

    Onchain deposits & withdrawals of addresses identified as custodians of Grayscale’s ETHE Ethereum Trust (Credit: Dune)

    This price movement is reminiscent of the initial reactions seen with Bitcoin ETFs, suggesting a pattern of bullish sentiment following regulatory endorsements. However, investors had more time to ladder into their BTC buys, knowing that it was almost certainly coming, whereas Ethereum went into the ETF battle as an underdog. 

    What does an Ethereum ETF mean longterm for crypto? 

    Regulatory Greenlight

    The SEC’s decision brings Ethereum closer to being classified as a commodity, like Bitcoin. The devastation of being labeled a security has been hanging like a sword over its head for years, despite earlier statements by both the SEC’s William Hinson in 2018 and the CFTC in 2022 that it was not a security. Classification as a commodity will simplify regulation for Ethereum, providing clearer guidelines for future developments and investments in the ecosystem. Additionally, the recent crypto-friendly legislative movements in Congress have created a more supportive environment for digital assets.

    This regulatory clarity helps to clear the way for the network to scale and become the world’s computer. Ethereum’s ongoing technological upgrades – such as the implementation of zero knowledge roll-up technology and sharding – are poised to increase the network’s transaction capacity and efficiency which will help maintain Ethereum’s competitiveness against rivals such as Solana, Sui and Cardano and support its growing ecosystem of layer-2 networks such as Arbitrum, Optimism, Base, Linea, Stark and ZkSync. On all these networks in turn reside hundreds of thousands of decentralized applications (dApps). 

    Web3 Stays Free

    Classifying Ethereum as a security would significantly impact the Web3 industry, affecting dApps, DeFi, and NFTs that rely on Ethereum’s layer-2 solutions. With Ethereum leading the DeFi space, holding over 60% market share and $100 billion in total value locked, regulatory challenges could arise that could kill any other crypto layer-1 and layer-2 network, especially proof-of-stake ones. 

    Benefits for Retail Investors

    One of the primary benefits of Ethereum ETFs for retail investors is the ease of access. Investing in ETFs does not require the digital know-how or cybersecurity measures needed for direct cryptocurrency investments. There’s no private key management, no hacking and scam risks, which cost crypto investors billions each year. This accessibility can encourage more widespread participation in the crypto market.

    ETFs offer a diversified investment option: they can include a range of assets within a single product. For retail investors, this means a more balanced exposure to Ethereum, potentially reducing the volatility risks of individual cryptocurrency investments, and also means insured investments. 

    On the downside though, ETF investors will not earn any ETH staking rewards yield (at least not initially). This reward is around 5%. Ethereum’s Shanghai upgrade last year kicked off a liquid staking (LST) and Eigenlayer restaking frenzy that has rejuvenated its struggling DeFi sector. 

    Credit: Tesfu Assefa

    Trading Strategies Around Ethereum ETFs

    With the approval of several Ethereum ETFs now just over the horizon, traders can adopt various strategies to navigate the evolving market landscape. We won’t speculate on the future price of Ethereum, as there are too many variables at play, both on an industry and macro-economic level. However, market sentiment is quite bullish for the next year, especially if the bull market resumes and ETH can turn deflationary again thanks to its EIP-1559 upgrade.

    Conclusion

    The approval of Ethereum ETFs is a transformative event for the cryptocurrency market that could unlock a new era of mainstream crypto adoption. This regulatory milestone validates Ethereum’s role in the financial ecosystem, and opens the door for increased institutional investment and greater market liquidity. It also boosts the development of Web3 technology and infrastructure, particularly in the USA. 

    For retail investors, Ethereum ETFs offer a convenient and regulated way to participate in the growth of the crypto market, providing opportunities for diversification and risk management. As Ethereum continues to innovate and evolve, ETFs will shape its future trajectory and solidify its position as a leading digital asset.

    Let us know your thoughts! Sign up for a Mindplex account now, join our Telegram, or follow us on Twitter. 

    Bittensor (TAO): The Crypto Neural Network for AI and ML Model Development

    Posted on by Werner

    As we never tire of saying at Mindplex and SingularityNET, progress in developing advanced AI and ML models is tainted by the chances of centralized institutions gaining undue control over one of the most important technological evolutions in human history. 

    The race is afoot: key players in AI are under the thumb of institutions, even if they started off as non-profit and open-source projects. Decentralized AI proposes free-roaming AIs to combat fortress-style AI solutions; it uses protocols and facilities built on the blockchain to promote multi-point control systems for AI infrastructures. 

    Bittensor, a decentralized AI project with a native cryptocurrency called TAO, has recorded exponential growth in 2024, growing an ecosystem of applications on its network, and gathering a community of contributors advancing the AI revolution.

    Let’s discuss the key elements of Bittensor, and how they work in synergy to create a distributed network for the development of AI and ML models and algorithms.

    What is Bittensor?

    Bittensor is a decentralized network designed for peer-based commodity development and provisioning of computing resources. 

    Bittensor is basically a marketplace for compute resources (storage space etc.), with a collaborative network for developing AI and Machine Learning models. Bittensor embraces competition as a strategy to ensure that commodities, resources, and models developed on its network are top-notch. It is a mesh consisting of computers performing different roles and collectively controlling a distributed network.

    The Bittensor network has a more pronounced role in AI and ML model development. However, it is capable of doing even more. It is a modular network, built for flexibility. Key concepts of the network can be applied to many sectors. Other digital commodities that can be built using the Bittensor network include financial market prediction tools, marketplaces for computing power, and algorithms for protein folding experiments. Bittensor is a multi-purpose decentralized network. Requests are posted to a ‘request and solution’ network with advanced data intelligence for the development of AI tools. The Bittensor network is an enterprise-grade tool, opening doors to industry-level adoption for getting. It is also stable for micro implementations by individuals and small organizations.

    Operational schema for Bittensor network (Credit: Bittensor)

    The Bittensor network consists of harmonized subnets designed to share data on AI and ML models and provide digital resources. The key role players on the Bittensor network are –

    • The Bittensor Subnets
    • The Bittensor API
    • Bittensor blockchain (Known as a subtensor) and 
    • The Yuma Consensus.

    Understanding Bittensor subnets

    Bittensor subnets are neural networks of advanced knowledge and data-sharing nodes. Nodes on the network are called ‘Neurons’, and can be Miner or Validator nodes. Validators are the input layer of the network: they create a communication portal between the external environment and the rest of the network. 

    First, Validators communicate with the hidden layer (miners) via the Synapse module, feeding them information on the task(s) to be done. Next, Miners compete on who provides the best answer or results for the task. Then, Validators assess the results provided by the Miners and feed the rest of the network with their evaluations. Miners are only in communication with the validators, hence, isolated from the rest of the network. There are about 36 subnets on the Bittensor network at the time of writing.

    The Bittensor API connects the Subnets to the subtensor. Validators’ evaluations are processed as separate inputs and transported through the API to the Subtensor for consensus. 

    Understanding Bittensor subtensors

    The subtensor is the final validation layer for results from the subnets. The Subtensor is a blockchain operating the Yuma Consensus. The Yuma consensus uses a weighted algorithm to compute validator evaluations and decide which model (developed by subnet miners) is best. The network rewards miners with TAO tokens as specified by the subnet’s incentive mechanism. Validators are also rewarded for their input. 

    Bittensor operates two subtensors, the Nakamoto and the Kusanagi blockchain. Each of these subtensors can perform final validations.

    The Bittensor network is a supernet, housing several subnets created to solve different tasks. Subnets operate a network of validators who feed miners with information on the tasks to be done and assess their results for quality. Validators mediate between subnets, the external environment, and the subtensor to ensure a steady flow of information on the network. This way, Bittensor creates a network where participants can trustlessly share intelligence.

    Making a case for the Bittensor network

    The Bittensor is, first, an attempt to lower the barrier to developing AI Models. Bittensor caters for resource-intensive digital ventures. Through a collaborative network, it splits the financial burden across various participants, making it cheaper to develop digital facilities.

    The network uses input from several network contributors and a decentralized assessment system to promote more efficient models and solutions. Unlike the siloed systems used by centralized organizations, the collaborative environment makes for more efficient products.

    But even more important is trying to promote decentralization in developing and managing these tools. Blockchain technology gives Bittensor a multiple-point-of-control system that easily resists censorship attempts and taps the power of the community.

    Credit: Tesfu Assefa

    Bittensor (TAO) tokenomics

    TAO is the Bittensor Network utility token. With TAO, Bittensor is creating an economy to keep the network in operation, promote adoption, and oversee its security.

    TAO use cases

    Incentivization: TAO is used to reward miners and validators on the network for their contributions to providing computing resources and developing AI and ML models. Subnet owners define the reward system for their subnets. Miners whose solution emerges the best are rewarded with TAO according to the subnet’s incentive mechanism. Validators also receive TAO rewards.

    Network consensus: To create a value layer for the network’s security facility, validators stake TAO to their hotkeys to run a node on the network. Other TAO holders can also delegate their assets to their desired validator. The Validator stake is a commitment to the network.

    Governance: TAO holders decide on project improvement through community voting. Proposed additions to the projects must be approved by a majority of the community before they are implemented.

    TAO distribution

    • Total TAO supply is 21 million coins, just like with Bitcoin. 
    • TAO block rewards also halve every four years
    • New TAO tokens are generated through mining and validating
    • One TAO is generated per block.
    • The circulating TAO supply is about 6.8 million. 
    • TAO can be traded on centralized exchanges like Binance and Kucoin.

    Who uses Bittensor?

    Anyone can use the Bittensor network as a client or a participant in the network. Enterprises and individuals who wish to create a task on the network can set up their own subnet and define their incentive mechanism based on the TAO economy. Anyone can also plug their facility into the network as a Miner to help problem-solving, or as a Validator to contribute to assessing solutions. The incentive system ensures participants always have a point of attraction, keeping the network operational.

    Conclusion

    Bittensor’s neural network builds a base for developing decentralized intelligence systems, and a marketplace of AI solutions. The economy built on the TAO token ensures that this network stays in charge of the finance that fuels it. Advanced AI facilities are delicate and almost unlimited in ability.

    A centralized administration is a bottleneck for developing and using AI. As a network that supports the development of AI models, Bittensor promotes the development of battle-tested models powered by a censorship-resistant system.

    Let us know your thoughts! Sign up for a Mindplex account now, join our Telegram, or follow us on Twitter.