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crypto

Top  10 Decentralized Exchanges in 2022

Decentralized finance has tremendously grown in the cryptocurrency market. The first decentralized exchange came to life in 2014, and there are more than 35 decentralized exchange platforms that are still growing. The growth of decentralized exchanges primarily impacts the exchanges sector where cryptocurrencies are traded. There is a massive demand for decentralized exchanges whose demand is growing and is expected to continue growing. Decentralized exchanges have become a significant threat to centralized exchanges for cryptocurrency. The growing demand for decentralized exchanges has brought uncertainties to centralized exchanges. Decentralized exchanges have numerous benefits, and that’s why many crypto traders are now preferring them to centralized ones.

In this article, we will be looking at the top 10 decentralized exchanges in 2022, but first, let us look at the benefits of decentralized exchanges.

Benefits of Decentralized exchanges

Cheaper Transaction Fees

Decentralized exchanges offer lower transacting fees when compared to centralized exchanges. Crypto traders continuously look for lower transaction rates when trading their crypto. In this case, DEX is always the primary choice because you have an option to check for lower rates to sell your assets. DEX has brought competition to the exchange market, and when there is competition, many will offer incentives such as lower trading prices to have a chance to compete in the market and attract more traders.

Lower Counter-Party Risks

DEX has more inferior to minimal chances of being hacked, and there is an ownership guarantee. Centralized exchanges lack ownership guarantee and have been severally hacked over the years. Decentralized exchanges are more protected as crypto trading is done between people in an automated process in decentralized exchanges without depending on intermediary institutions.

Financial Inclusiveness

Decentralized exchanges is a fair ecosystem and much more inclusive. Anyone and everyone across the globe can utilize this service and perform their trades.

Privacy

Too much data is collected on us, and privacy has become more critical. There is no requirement to provide personal information to third parties and no requirements to use the exchange.

Dex might not have gotten to its full potential, but more growth is potential over the years. You might want to know the top 10 decentralized exchanges to trade your crypto.

Top 10 Decentralized Exchanges in 2022

1.    Uniswap

These are the undisputed kings of decentralized exchanges. This was the first DEX to reach a popularity and trading volume level that some of the best-centralized exchanges have not achieved. The launch of Uniswap occurred in November 2018, and it has undergone several upgrades. Its third version is up and running, bringing multiple fees tiers, improved efficacy in the capital, and better oracles.

Uniswap is among the pioneer automated markets and allows its users to take up the role of liquidity providers through their contribution of assets to decentralized liquidity pools. The liquidity providers net a passive income because they share a fraction of the fees the collection generates. Since the launch of Uniswap, it has clocked over $800 billion in trading volume and hosted one of the most profitable airdrops.

2.    Pancake Swap

From its whimsical name, it sounds like a joke, but it is not. It is the most popular swap platform on Binance smart chain and has clocked over $300 million in daily trading volume. The Pancake swap team directly bootstrapped pancake swap without raising any money on ICO or IDO.

Currently, the platform is supported by the Pancake Swap treasury, which earns a commission of 12% on all trading fees. Pancake Swap accepts thousands of BEP-20 tokens and has its governance token, CAKE.PancakeSwap offers various yield farms, a Binance Coin prediction market, a lottery game, initial farm offerings, an NFT market, and more and its DEX capabilities.

3.    Curve

Michael Egorov formed a curve that uses highly efficient bonding curves that enable users to trade stable assets with little slippage. The platform offers a great exchange solution that allows users to sell stable coins at a minute fee of 0.04%. Curve was first deployed on Ethereum in 2017, but it has expanded to other blockchains such as polygon, avalanche, and fantom. It has risen in the DEX industry and clocks in billions of dollars in trading volume every month.

4.    Sushiswap

You might be a fan of sushi or not, but it has something that might interest you. The DEX is a fork of the renowned Uniswap protocol that permits dealers to trade assets across over a dozen blockchains and layer-2 platforms.

The platform was among the first DExs to launch on the Avalanche, Fantom, Harmony, and Celo blockchains and has earned a reputation for being one of the first DExs to embark on new chains.

Sushi Swap is an automatic market maker that allows users to make money by contributing liquidity to the site. It comprises a variety of features, such as a variety of yield pools, an on-chain lending solution, and a MISO launchpad. Sushi Swap, like most DEXs, has a utility token known as SUSHI. This token can be placed to receive a portion of the platform’s trading fees and partake in the platform’s governance.

5.   Spooky Swap

Halloween may be seasonal but Spooky Swap is here to stay. Spooky Swap is the most popular decentralized exchange on the Fantom opera blockchain, making it an essential feature in all fantom trader’s toolboxes. It allows the trader to liquidity their assets instantly or bid and wait for their order to be filled.

Analysis shows that spooky swap clocks in $300 million in daily trading pools and have assets worth up to $1.5 billion in its collections.

6.    1 inch

1inch collects decentralized exchanges and puts them together for the customers, and therefore you always get the best rate for Swap. It is available on numerous blockchain networks and does not charge additional fees. Anyone who receives a CHI token on 1inch also gets a massive reduction in the transaction cost.

7.    Kyber Swap

Kyber swap is similar to uniswap because it operates on liquidity pools provided by traders in return for a 0.3% trading fee when the pair is used. Kyber has its token called Kyber network crystal used in governance and in claiming the earned trading fees. Various decentralized financial applications depend on Kyber as their underlying protocol as it has among the deepest liquidity pools of the best-decentralized exchanges.

8.    WaveDEX

It operates on the wave blockchain. WaveDEX owns assets called waves, with which you can trade a supported asset for another supported asset, such as bitcoin for wave. A centralized matching service speeds up the exchange process, allowing you to get the best from centralized and decentralized worlds. This is an effective combination for mitigating slippage.

9.    IDEX

IDEX is another decentralized exchange, and it operates on the Ethereum blockchain. IDEX, a decentralized exchange, uses the Ethereum blockchain. IIDEX is a decentralized exchange running on the Ethereum blockchain. IDEX is the first Ethereum based decentralized innovative contract exchange for supporting present trading. IDEX is considered the most advanced Ethereum DEX. It helps control and sells orders, has the capacity to conduct many trades simultaneously, and gas-free cancels. The exchange comprises the trading engine, the smart contract, and a “transaction processing arbiter.” The smart contract is responsible for storing all assets and executing trade settlements. The user has to verify all trades using their private keys.

10.                      Airswap

Airswap is a cryptocurrency that runs on the Ethereum blockchain and has its token called Airswap Token (AST). AirSwap established the Swap Protocol to allow for transaction-free trading. The Swap Protocol leverages smart contracts on the Ethereum network to settle orders. The rest is taken care of off-chain. This is similar to 0x. AST, like Uniswap, primarily serves as a way for market makers to set markets on AirSwap, providing liquidity for the exchange.

How Decentralized exchanges work

 Most decentralized exchanges are open source initiatives based on the Ethereum blockchain that use smart contracts to carry out the customers’ requested digital asset trades. They attempt to be cross-chain interoperable to maximize the number of trading pairs so that you can trade any asset you want. Because there is no central authority supporting the transaction, trading costs are substantially cheaper, if they exist at all.

In general, making a trade is a simple process: you choose the asset you have and the one you want to trade for it, then follow the procedures, which typically entail sending your holdings to a smart contract and selecting a destination wallet address, and it handles the rest. Your new assets are delivered to the address of your choice.

What to look for in Decentralization Exchange

Ease of use, trading costs, trade volume/liquidity, anonymity, and trading pairings are the primary features of a decentralized exchange.

If the asset price fluctuates because the deal takes a long time to be fulfilled, or you’ve placed an enormous order, you may receive more or less of your desired asset, referred to as slippage.

The best-decentralized exchanges have low costs, many trading pairings, and simple point-and-click swaps that occur instantly, ensuring consistent deals.

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crypto

A Detailed Guide to Bitcoin and Cryptocurrency Trading Bots

The 24/7 cryptocurrency market is fast-paced and extremely volatile; managing your trading can be challenging. For this reason, many crypto traders who have limited free time to sit in front of a screen and monitor opportunities in the industry choose to use a cryptocurrency auto trading bot.

However, using trading bots in the financial industry is a long-established and legitimate activity – and it’s now accessible in the cryptocurrency markets. By harnessing bot trading in cryptocurrency, investors can access a wide range of trading strategies. HFT, for example, prompts the use of software because it involves high-speed trades.

This article gives you a detailed guide about Bitcoin and cryptocurrency trading bots – from what they are and how they work.

What are Crypto Trading Bots?

Cryptocurrency trading bots are software applications that automatically buy and sell digital assets according to preset parameters. Crypto trading bots use APIs (Application Programming Interfaces) to connect to exchanges and retrieve data to make trades. They can operate on different timeframes – from making multiple trades per day to holding positions for weeks or longer.

It’s not an entirely new development. After making a reported $150,000 profit using scripted trading bots to buy and sell Bitcoin, finance worker Joseph Lee launched the trading platform BTC.sx in 2013.

Lee’s first bot was straightforward: it scanned different trading platforms for price differences to exploit, and when it found one, it automatically bought Bitcoin on one platform and sold it on the other. Profits were minimal. Lee explained on a Bitcoin forum in 2012 that “profitability on overall trading volume is a few percent at best.”

How Do Crypto Trading Bots Work?

Today, the bots that take advantage of opportunities are more sophisticated. Some bots base their rules on an “exponential moving average.” They examine how markets typically behave over specific periods and take action when those thresholds are compromised.

For instance, if the value of Bitcoin falls further than usual, for example, a predictive algorithm would anticipate a quick rebound and place buy orders. On the other hand, a reactive algorithm would begin selling to reduce losses.

These strategies are legal, so while bots can alleviate some of the stress of rapid cryptocurrency trading, they cannot replace thought and analysis. The trader must still determine how the asset is likely to behave and whether they want to be defensive or aggressive.

Trading bots provide superior speed, efficiency, productivity (few errors), and emotionless trading. You must grant a trading bot access to your account via API keys (Application Program Interface).

Trading bots operate in three stages: signal creator, risk allocation, and execution.

  • The signal generator essentially does the trader’s job, predicting and identifying potential trades based on market data and technical analysis indicators.
  • As the name implies, risk allocation is the process by which the bot distributes risk based on a specific set of parameters and rules established by the trader, which typically includes how and to what extent capital gets allocated when trading.
  • It’s time to get started. Execution is how cryptocurrencies are purchased and sold based on the signals generated by the pre-configured trading system. The signals get converted into API key requests that the crypto exchange can understand and process at this point.

Additionally, some bots can employ more complex trading strategies. The algorithm can use the most recent historical data, indicators, and signals to navigate. While placing orders, high-quality crypto bots consider over a hundred parameters.

The algorithm in some programs does not change, but some bots can be connected or customized with different settings. This option is appropriate for experienced traders with their trading strategies and preferences.

Some bots also offer trading simulation features, which allow you to test out different strategies before putting real money on the line.

Advantages of Crypto Trading Bots

There are several advantages to using a bot for cryptocurrency trading. They include;

  • Speed– Bots can execute trades much faster than humans. Even seasoned traders require time to analyze the market. Beginners move at a much slower pace. As a result, traders can lose some trading opportunities. Many traders prefer to use bots to avoid such situations because they analyze everything and make decisions faster than humans. They can also place orders almost instantaneously after detecting a trading opportunity.
  • Error-free– In the process of market analysis, a person can make mistakes. This could be caused by the trader’s level of training or psychological state. But, bots operate within the parameters of the algorithm. If a signal is available, the bitcoin trading bot will use it. They strictly follow the trading plan. As a result, they rarely make mistakes.
  • Emotionless– bots do not experience human emotions such as greed, fear, or euphoria. They make decisions based on data and not emotions. This is very important in trading because emotions can cloud judgment.
  • Consistency– it can be challenging to stick to a trading plan in the heat of the moment. But, a bot will consistently execute the plan.
  • Trading 24/7– Bots never get tired and can work for prolonged periods without breaks. It is essential in fast-moving markets where opportunistic trades must be quickly made.
  • Managing several accounts– Crypto trading bots are also handy for managing multiple accounts simultaneously. Some bots can trade on various exchanges and with different currencies. So, if you have several accounts, the bot can handle all of them.

Disadvantages of Using Crypto Bots

There are a few drawbacks that you should be aware of before using a bot for trading. These include;

  • They require monitoring– Even though bots can trade automatically, they still need to be monitored. Things can go wrong, such as connection issues, power outages, and software updates.
  • They are not free– good crypto bots will usually come with a price tag. Some bots can be expensive, and you need to factor in the cost before using one.
  • They are not foolproof– despite their many advantages, bots are not perfect—developers program bots with specific codes and algorithms that allow them to function. During the development process, mistakes can occur, rendering the bot inefficient at particular points in time. So, you need to be aware of this before using a bot for trading.

How Can You Get a Crypto Bot

There are three ways to obtain bots for crypto trading coins:

Making a Bot From the Ground Up

This bot is best suited for those who are already familiar with programming. All bots are explicitly made for some exchange. As a result, the platform must provide an API– a collection of information about the current trading state and functions that allow you to begin trading based on user-defined parameters.

Using a Bot-building Platform

This technique is best suited for those who are not familiar with programming. Bot-building platforms allow you to create a bot without any coding. You can use the platform to test your bot and see how it performs on various exchanges.

Buying a Crypto Trading Bot

This is the quickest means to get a bot. You can find many bots for sale online. However, it’s essential to be careful when buying a bot because there are many scams. It would be best if you only purchased from a reputable source.

Downloading a Crypto Trading Bot

The final option is to obtain free bots. The benefits of this option include eliminating the need to invent anything, write programs, or pay money. However, you cannot be confident that the bot will not begin, for example, transferring all earnings to third-party internal accounts.

Crypto Trading Bots

With all that discussed, let’s look at some of the best crypto trading bots.

Pionex Trading Bot– Pionex is a fantastic cryptocurrency exchange with over 120+ cryptocurrencies and 16 free trading bots built-in. It is straightforward to use for beginners, with detailed tutorials on each bot so you can become acquainted with each one and determine which is best for your needs.

There is no need to connect the bots to any exchange because everything is ready to go when you open your free Pionex account. The only disadvantage of Pionex is that it does not accept fiat deposits or withdrawals.

Trality Trading BotTrality is a one-of-a-kind offering in the bot market. Rather than providing pre-programmed bots, Trality gives you the tools and flexibility to create and fine-tune your bots based on your preferred trading strategies. It is appropriate for both newcomers and advanced traders, those with no coding experience and Python coding gurus – and everyone in between.

Bitsgap Trading BotBitsgap is a more recent automated trading bot that demonstrates the enhanced functionality of a modern, well-designed bot. Bitsgap’s highly advanced, the in-built algorithm includes features that appeal to both new and experienced users: automated trading.

Suppose you want a more personalized experience with your trading strategies. In that case, the bot provides the necessary signals to keep users informed of potential investments with the highest chances of short-term and long-term returns.

Conclusion

Bot trading is not a one-and-done proposition. You don’t just leave it alone for long periods. You need to constantly monitor your bot’s activity and how it is performing. You also need to have a superb understanding of the market to succeed.

Whether you decide to robotize your trades or not, the primary rules apply: don’t trade more than you can afford to lose. Also, don’t make any investment unless you have a basic understanding of what you’re doing.

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crypto

Cryptocurrency Investing: Your Ultimate Guide to Investing in Cryptocurrencies

It has been more than a decade since cryptocurrency became a real investable asset. In that period, the media has been awash with various crypto-related stories. But despite the ebb and flow of the ecosystem, the cryptocurrency ecosystem continues to light up, and investors are lining up to get into action.

Bitcoin and altcoins like Ethereum and others exhibit high volatility levels. However, the most outstanding characteristic is that the coins are not your typical assets. To an extent, they play on the fringe of the investment world. For that reason, your financial advisor may not be helpful if you seek advice in this regard. What to do now? This article attempts to break down the sector so that you and other unsophisticated investors can onboard without much difficulty.

But before we get into the details of investing in cryptocurrencies, let’s learn a bit about the assets.

Understanding cryptocurrencies

Cryptocurrency is an encrypted data string hosted on a blockchain network, which denotes a currency unit on that network. In other words, it is a type of digital currency that relies on cryptography to create new units and verify transactions. For example, Bitcoin enables users within the bitcoin blockchain to trade without a central authority.

A cryptocurrency works thanks to blockchain technology. Blockchain technology refers to a system of recording information based on a ledger architecture. The ledger is distributed among peers or nodes in the network to ensure the recorded transactions are unalterable and impossible to duplicate.

While cryptocurrency enjoys the support of ingenious technology, what really is the reason for the explosion onto the global scene? It has to be peer-to-peer transactions. The peer-to-peer or P2P system enables anyone anywhere to receive or send payments. Unlike traditional finance, the cryptocurrency ecosystem does not require intermediaries like banks to ensure trust and security.

Since Bitcoin’s launch in 2009, many other cryptocurrencies have emerged. According to CoinMarketCap, a website that tracks crypto, there were 18,737 cryptos at writing, with a little over $2 trillion market capitalization. However, the most popular coins are a handful, including:

  • Bitcoin (BTC)
  • Ethereum (ETH)
  • Ripple (XRP)
  • Litecoin (LTC)
  • Tether (USDT)

How to select a cryptocurrency for investment

You cannot possibly invest in all of the over 18,000 cryptos. Even if the list is trimmed to the best ten, it would be impossible to make the right choice if you lack a proper selection mechanism. So, how do you select the best crypto to invest in?

Do exhaustive background research

All that begins from a position of knowledge has a better shot at success. Whether you are a newbie or a veteran investor, the cryptocurrency landscape requires extensive knowledge to grasp how it operates.

For starters, one must know that investing in a cryptocurrency is not similar to equity investment. On the one hand, buying stock gives you a share of ownership of the company. Contrarily, buying crypto merely grants you ownership of a digital asset.

While doing the background research, ensure you understand the factors influencing the cryptocurrency’s price. Is it supply and demand? A typical cryptocurrency has a limited supply. As such, its price goes up when demand increases. So, the most crucial question you should seek answers to is this: how does the crypto’s supply increase?

While at it, also find out the factors that affect the coin’s demand. It means looking for the areas of the coin’s potential. Thankfully, all reputable cryptocurrency projects have whitepapers.

A crypto whitepaper is a document that project developers release at launch. It explains the project’s purpose and vision and the technology supporting it. Additionally, it describes the project’s facts and statistics to potential investors. For example, Bitcoin’s whitepaper proposed the peer-to-peer system underlying today’s decentralized finance (DeFi) ecosystem.

Engage the community of people already investing in the crypto

Beside the whitepaper, the cryptocurrency’s following is another crucial aspect you shouldn’t miss to evaluate. The community’s sentiment is a critical indicator of the coin’s performance.

Most crypto projects with a solid following have subreddits and YouTube channels that convey essential feedback. Since a substandard project can’t create a following of loyal supporters, this should help you weed out wrong bets.

While at it, pay attention to what the followers are saying, particularly on investment. A careful evaluation of the feedback should make it possible to spot and avoid pump-and-dump hype.

Evaluate the team behind the project

Experience has shown that some actors are adept at forging whitepapers and creating fake communities using bots. However, such actors are often unable to get it right when revealing the team of developers and backers.

When researching the coin, ensure you vet each member of the team. Some of the things you could do include:

  • Assess the identity of the project’s backers.
  • Evaluate their expertise and ensure you trust their integrity.
  • Do they have any scams associated with them?

Evaluate the pricing history

It is critical to consider the amount of money that the coin has already attracted. Thankfully, there are plenty of websites, including CoinMarketCap and CoinDesk, where you can find crucial information like market cap and daily trading volume.

Depending on your investment philosophy, the market cap could help decide if the coin is a worthy asset or not. To some, a high market cap could indicate a small potential for further growth, making the coin unattractive.

Furthermore, this is the right time to perform market analysis research. Some issues to consider include:

  • Is the coin’s value too volatile?
  • Does the coin display resilience in the face of a big dip?
  • Where is the coin’s value at present? Is it at an all-time low or high?

These steps are not exhaustive, but they will get you somewhere. Specifically, they will prevent you from falling prey to dubious scams with fancy names and whitepapers.

Investing in cryptocurrencies

Selecting the right coin to invest in is only the beginning of the cryptocurrency investment journey. How do you invest in cryptocurrency? There are two answers to this question.

Firstly, you can invest in cryptocurrency by buying actual coins on a cryptocurrency exchange, storing them in a private crypti wallet, and selling them at a higher price. Secondly, you could take a position in cryptocurrency derivatives, such as contracts for difference (CFDs). The difference here is that you’ll get ownership of actual digital assets with the former, while with the latter, you’ll only get a claim to the assets. The claim is often settled in fiat currency.

Nonetheless, the onboarding process is usually similar whether you wish to buy actual coins or trade crypto derivatives. The following steps describe the typical onboarding process:

Step 1: Select the appropriate platform

Cryptocurrency exchanges like Coinbase and Gemini enable users to buy digital currency with fiat. However, you must open an account first. The typical registration process begins with providing personal information, including full name, email address, telephone number, and residential details.

It is worth mentioning that some crypto exchanges extend their services to crypto derivatives, although there are dedicated cryptocurrency brokers.

Step 2: Fund the account

The account funding process differs depending on the platform. For example, Coinbase accepts major currencies like the US dollar (USD) and the British pound (GBP), and others like Binance accept up to 18 fiat currencies. Additionally, some exchanges and brokers accept Bitcoin and a handful of altcoins.

Also, some platforms allow users to trade directly with credit cards and digital payment service providers, including PayPal and Skrill.

Step 3: Place an order

With your account funded, you can proceed to the marketplace and order your coins. Crypto exchanges operate similar to stock exchanges, where they match buy orders with sell orders at the market price. On order fulfillment, the exchange will hold the coins on your behalf in a custodial crypto wallet, although you are free to transfer them to a private wallet.

For a crypto derivatives trader, the process is different. Once you complete the funding process, the broker will direct you to the trading area, where you will open a position in the market. Unlike buying actual coins, crypto derivative trading allows customers to take positions on both sides of the market – you can open a buy or sell order.

Conclusion

Every investor is unique. For this reason, investors will always follow different patterns and routes when engaging in the cryptocurrency market. Most importantly, it is worth noting that the most crucial factors that should guide an investor are appetite for risk and investment goals.

When evaluating crypto investment opportunities, always take proper precautions to avoid falling into scammers’ hands. For example, ensure you conduct exhaustive background research on the potential digital asset. If you buy coins to store in a private wallet, take great care not to lose your keys or exposure to bad actors. Also, it is helpful to know that the crypto ecosystem is quite volatile, and thus, it is wise to avoid overexposure to a specific asset. Try investing in multiple coins to spread risk.

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How to Buy Bitcoin: A Beginners Guide to Investing in Cryptocurrency

When life throws you a curveball, it’s time to get innovative. Big banks knowingly gambled with their customers’ money in high-risk businesses in 2008, pushing the United States into a financial crisis. In the aftermath of this disruption, a crypto genius created blockchain, becoming a massive enabler of change to a broken system.

Blockchain is the system on which all cryptocurrencies and NFTs are built. Cryptocurrencies are digital currencies that use encryption and are stored on the blockchain, making them unchangeable, decentralized, and open to everyone.

Cryptocurrencies have become one of the most sought-after investment options because they enjoy high security, faster transaction times, scarcity, and potential for huge returns. The first significant blockchain innovation was Bitcoin, the first global currency. A worldwide currency that’s easily traded between countries without the need for exchange rates.

Understanding Bitcoin

Bitcoin is a digital currency that runs free of any central authority, oversight of banks, or government monitoring. Instead, it depends on peer-to-peer software and cryptography. Network nodes use cryptography to verify transactions, which are then stored in a public distributed ledger called a blockchain.

Satoshi Nakamoto, a pseudonym for an unknown individual or group of people, created the cryptocurrency in 2008, but the developers put the currency in use in 2009.

Bitcoin is by far the most well-known and most prominent cryptocurrency. But there are many others like Ethereum, Litecoin, Ripple, and Dash among the top ten cryptocurrencies in terms of market capitalization.

Bitcoin has undergone dramatic growth since its introduction in 2009. For instance, its value surged by about 30,000 percent from October 2013 to early June 2021. While this is impressive in and of itself, some analysts believe Bitcoin’s value will continue to rise as cryptocurrencies and the blockchain technology that underpins them become more prominent and integrated into people’s daily lives.

Investing in highly volatile assets such as cryptocurrency can be quite profitable, especially over time. Cryptocurrencies with a high utility, such as Bitcoin, tend to increase in value as their adoption and demand increase. However, while Bitcoin has seen incredible highs, it has also experienced devastating lows.

For example, after reaching nearly $20,000 in 2017, its value dropped and did not rise above half of that until 2020. Although it’s been trending upward since then, it’s still a highly risky investment.

What you Need to Know Before Investing In Cryptocurrency

Are you itching to buy Bitcoin but don’t understand how cryptocurrencies work?? Hold your horses and do your homework well! Digital currencies can be an exciting investment prospect, but inexperienced investors risk losing money if they are duped by scammers or invest in a cryptocurrency that has no history.

If you’ve decided to invest in the cryptocurrency market, you should do your homework first, just like any other investment. We’ll go through what you should know before investing your life savings in BTC.

Consider Why You Want to Invest

Are you interested in cryptocurrencies simply because it is popular? Is there a more substantial reason for investing in one or more specific digital tokens? Of course, different investors have different financial objectives, and for some, investigating the cryptocurrency space makes more sense than others.

But one key takeaway is that you should never invest in a digital currency without understanding its underlying technology and the market conditions.

Understand Crypto Investing and Trading

Although they appear identical, these are two different strategies for purchasing and selling cryptocurrency.

  • Crypto Investing– Buying crypto to profit over a more extended period, such as months or years, or when values have risen significantly. Investing in cryptocurrencies is highly similar to stock, currency, and other financial assets.
  • Crypto Trading– To benefit from the crypto market, crypto traders take advantage of the lower price increases. This is a more complex technique of crypto investment, held for expert traders with a thorough understanding of the volatile crypto market and trading tools such as Bots.

Understand the Blockchain

When most people think about Bitcoin or other cryptocurrencies, they only think about the currency aspect. However, blockchains are much more than just currencies. In fact, blockchains are so versatile that you can use them to create anything from digital assets (like cryptocurrencies) to decentralized applications.

So, if you’re not familiar with blockchain technology, you must take the time to learn about it. Doing so will help give you a better understanding of why some cryptocurrencies are worth more than others and how they work.

Read the White Paper

Most projects offer crucial information on their websites, such as their vision, team members, tokenomics, and social media accounts, but reading their white paper can be beneficial. The white paper is an excellent guide for fundamental research.

Every project should include a white paper that explains the specific problem the project is attempting to tackle and how it intends to do so.

Understand the Risks

Cryptocurrencies are incredibly volatile and risky investments. Prices can rise and fall dramatically in a short period, so you must understand the risks before investing. Additionally, most cryptocurrencies don’t have a backup of physical assets, so they’re not as stable as traditional investments.

Invest What You Can Afford To Lose

Don’t invest more money into cryptocurrencies than you’re willing to lose. Cryptocurrencies, like stocks, are highly volatile, and the value of tokens can collapse in a matter of hours due to supply and demand pressures.

Other variables that can cause the value of cryptocurrencies to rise include government regulations, media frenzy, and investor sentiments. Remember, this is a high-risk investment, and there’s always the potential for you to lose everything.

Use a Reputable Exchange

When buying Bitcoin or any other cryptocurrency, you must use a reputable exchange. There are many scams in the cryptocurrency world, so be sure to research before selecting an exchange.

With that stated, if you still want in on the game, here’s how to get your hands on some Bitcoin.

How to Buy Bitcoin in 4 Simple Ways

Here’s a guide on how to buy Bitcoin in four simple ways.

1.    Choose the Right Crypto Exchange

You’ll need a crypto exchange to acquire Bitcoin or any other cryptocurrency. This is where buyers and sellers meet to trade money for coins.

There are hundreds of exchanges to choose from, but as a beginner, you’ll want to go with one that offers a good combination of ease of use, minimal fees, and excellent security.

If you don’t already have a crypto exchange in mind, check out the top selections, including Coinbase, Gemini, and Binance.

Check if your exchange platform has a Bitcoin wallet. If it doesn’t, you’ll need to create your own. You can also buy crypto on a platform like Robinhood, Paypal, or Venmo, though buying crypto this way means you won’t be able to withdraw or move your coins to another platform. You’ll need to sell your crypto and then repurchase it on a different exchange if you want to keep it in a separate wallet.

  • Select a Payment Method

Before you can start investing in Bitcoin, you must first fund your account with funds from an exchange. Depending on the exchange, you can finance your account with bank transfers from a checking or savings account, wire transfers, PayPal, a cryptocurrency wallet, or even a credit or debit card.

However, keep in mind that specific funding methods may incur additional transaction fees. When you make an electronic transfer from a bank account, Coinbase doesn’t charge a fee. It does, however, charge $10 for wire transfers and 2.5 percent for PayPal transactions.

  • Make a Purchase

You can place your first order to acquire Bitcoin onceyou finance your account. Depending on the platform you’re using, you might be able to buy it simply by hitting a button, or you might have to type in Bitcoin’s ticker symbol (BTC). After that, you’ll need to enter the amount you want to invest.

You will own a fraction of a Bitcoin once the transaction is complete. This is because purchasing a single Bitcoin today necessitates a sizable initial commitment. To buy a Bitcoin at the current price of $38,000, you’d need to invest $38,000. If you put in less money, say $1,000, you’ll obtain a percentage of a Bitcoin, in this case, 0.026 percent.

  • Choose a Secure Storage Option

Your crypto exchange most likely includes an integrated Bitcoin wallet or, at the very least, a favored partner where you may store your Bitcoin safely. On the other hand, some users are wary about leaving their crypto connected to the internet, where it could be taken more easily by hackers.

Most large exchanges have private insurance in place to reimburse customers in a breach, and they’re gradually holding the majority of user assets in offline “cold” storage. You can store your Bitcoin in an online or offline Bitcoin wallet of your choice if you want the highest level of protection. However, keep in mind that you may be charged a modest withdrawal fee if you withdraw cryptocurrency from an exchange.

Conclusion

Investing in a popular cryptocurrency can be tempting significantly when its price increases. However, even though it has the potential to be a profitable investment, you should proceed with caution: It’s a very volatile investment that experts advise against putting a large portion of your money into.

Categories
crypto

Where to Buy Bitcoin: A Guide to The Top 10 Cryptocurrency Exchanges

After suffering one of its worst-ever starts to a year, Bitcoin surged back to prominence in March with a 9% gain, nearly reversing losses from earlier in 2022 and beating U.S. stocks while spearheading a rise across broader digital-asset markets.

Now, suddenly, a day cannot pass without hearing about Bitcoin. Look one way, and there, Larry David and Matt Damon are advertising crypto firms. Swivel your head– oh, hey, it’s the mayors of New York City and Miami debating who loves Bitcoin more.

More and more individuals are interested in Bitcoin these days; after all, it’s the world’s leading cryptocurrency. Whether you’re a financial institution, an everyday investor, or just curious about all the fuss, you may want to know where to buy Bitcoin.

Cryptocurrency exchanges are one of the simplest ways to buy bitcoin, and this article will guide you to the 10 top cryptocurrency exchanges for buying Bitcoin.

What is a Cryptocurrency Exchange?

A cryptocurrency exchange is a market-house where you can buy and sell cryptos, like Ether or Bitcoin using different traditional fiat money options or other digital currencies. Cryptocurrency exchanges function similarly to other trading platforms you might be familiar with. They set up accounts for you where you can generate various order types to buy, sell, and speculate in the cryptocurrency market.

Advanced trading features like futures trading and margin accounts are accessible on some crypto exchanges, but they are less common for users in the United States. Others include crypto staking or crypto lending, which allow you to earn money on your cryptocurrency holdings. The leading exchanges provide educational resources to keep you informed on all things crypto.

In general, there are two categories of cryptocurrency exchanges: centralized and decentralized exchanges.

·        Centralized Exchanges

In a centralized exchange, a central authority handles all the order books and transactions. Users can transfer their fiat cash, such as dollars, directly into cryptocurrency on centralized exchanges, making it simple to get started with crypto trading.

Some bitcoin enthusiasts believe that centralized exchanges conflict with the decentralized nature of cryptocurrencies. Centralized exchanges may demand users fulfill Know Your Customer (KYC) standards— to reveal their identity to combat money laundering and fraud, like when applying for a bank account.

The downside to centralized exchanges is that they are prone to hacks. In January 2018, the popular centralized exchange Coincheck was hacked, losing $530 million worth of NEM. Following this incident, Centralized crypto exchanges have strengthened their security to counter breaches in recent years. They now store most customer funds offline and have insurance coverage in place to cover crypto losses in the event of a hacking, among other things.

·        Decentralized Exchanges

Network nodes handle order books and transactions in decentralized exchanges rather than a central authority. Anyone who joins a DEX network can certify transactions, similar to how bitcoin blockchains function. This may improve accountability and transparency while also ensuring that exchange can continue to operate regardless of the firm’s state.

The problem is that decentralized exchanges are far less user-friendly in terms of U.I. and currency conversion. Users can’t always deposit dollars and exchange them for crypto on decentralized exchanges. This implies you must either have cryptocurrency or utilize a centralized exchange to obtain crypto that you can use on a DEX.

You’ll undoubtedly be doing direct peer-to-peer exchanges as well. This implies it may take longer to locate someone interested in buying what you’re selling, and you may have to accept price concessions to purchase or sell low-volume crypto swiftly if liquidity is low.

The Best Cryptocurrency Exchanges

You can trade bitcoin and other digital assets on nearly 600 cryptocurrency exchanges worldwide. However, prices, quality, and safety differentiate them. Experts recommend that it’s best to stick with well-known, high-volume exchanges. Below is the best list of the top 10 cryptocurrency exchanges.

1.   Binance

Binance is the largest cryptocurrency exchange globally in terms of the daily trading volume of cryptocurrencies. It is a safe and solid marketplace for buying and selling cryptocurrencies, with a simple buy/sell process.

You can trade bitcoin or other cryptocurrencies using various payment methods, including bank transfer, credit or debit card, and cash. To give you a secure and flawless crypto-buying experience, Binance only works with verified and trustworthy partners.

Binance accepts several currencies and makes it simple to buy crypto with USD, AUD, EUR, and other fiat currencies. To acquire crypto, you can use a variety of accepted stablecoins like Binance USD (BUSD), Coinbase USD Coin (USDC), and Tether (USDT).

2.   Coinbase Exchange

Coinbase is a popular cryptocurrency exchange in the U.S. Fortunately; you can purchase Bitcoin using the Coinbase app wherever Coinbase is available. It’s quick, simple, and safe.

Notably, 98 percent of customer assets are held in cold storage in a global network of safe deposit boxes backed by digital and paper backups. Bank-level encryption and security protect its website. All accounts must also use two-factor authentication, which helps prevent anyone from accessing your account unless they have physical access to your phone. Coinbase makes it easy for investors to buy crypto with USD, AUD, EUR, INR, and RUB,

3.   FTX

This cryptocurrency exchange is ideal for experienced investors looking for low fees and advanced features. FTX offers margin trading, short selling, and a variety of order types. It also has a special feature that permits users to trade a basket of cryptocurrencies as if it were a single asset.

FTX accepts USD, EUR, GBP, JPY, and CNY payments. You can buy bitcoin or other cryptos on FTX with various payment methods, including bank transfers, debit cards, and credit cards. Every cryptocurrency exchange must prioritize security, and FTX.US is no exception. It offers a custom-built hot and cold wallet for holding customer crypto funds and agreements with industry-leading custodians and complete external backing of all hot wallet funds. Users can also utilize two-factor authentication (2FA) for logins and withdrawals to protect their accounts.

4.   Kraken

Kraken is a cryptocurrency exchange that authorizes users to buy and sell Bitcoin and Ethereum. Kraken is one of the first Bitcoin exchanges, and it offers over 120 different coins for buying, selling, and trading at low costs. It’s notable for supporting spot trading and cryptocurrency futures at current market rates. Kraken offers users margin accounts and futures trading, riskier products beneficial for particular trading strategies. There’s also a feature to secure your account from any changes if you’re concerned that hackers could breach it.

5.   KuCoin

KuCoin’s extensive features, cheap fees, and a wide choice of coins are ideal for experienced cryptocurrency traders. However, KuCoin does not have a license to operate in the United States, lowering its ranking.

KuCoin also has a mobile app that permits you to recruit trading bots. Trading bots can trade your cryptocurrencies, so you don’t have to keep track of the market. To secure the crypto assets stored on its exchange, KuCoin has teamed with Onchain Custodian. This includes Lockton insurance against crimes like hacking. It also has a bug bounty system to encourage ethical hackers to report system flaws.

6.   Huobi Global

Huobi Global provides an all-encompassing ecosystem for experienced crypto traders and investors, allowing them to buy, sell, stake, and borrow various cryptos, including Bitcoin. However, the exchange has yet to attain regulatory compliance in substantial areas, and beginners may struggle to use the platform’s numerous tools and features. It is not also available in the U.S.

Huobi secures client assets in multi-signature cold wallets and has a 20,000 BTC Security Reserve Fund to deal with serious security incidents to ensure its users’ safety.

7.   Gate.io

Gate.io will most certainly overwhelm inexperienced investors or those just getting started. They will be dissatisfied by the inability to deposit fiat currency, such as U.S. dollars, to buy crypto directly on the platform. If you don’t already have coins, you’ll need to buy them on another exchange and transfer them to the platform to start trading.

The Gate.io platform provides real-time market data to its consumers. You can view information like the current price, trading volume, liquidity, and price trends of all supported altcoins on the platform. Despite Gate.io’s hack in 2019, Cryptocurrency Exchange Ranking (CER), a third-party that reviews crypto exchange cyber security, ranked the platform as the best in August 2020.

8.   Bitfinex

Bitfinex is a famous cryptocurrency exchange globally known for its low fees. It’s also linked to the Tether stablecoin, which has caused the exchange to run into regulatory issues. The minimal costs on Bittfinex are favorable, but its shaky history may concern future customers.

To keep user accounts safe, Bitfinex uses different industry-standard security measures. Two-factor authentication, powerful APIs for linking third-party services, withdrawal protection mechanisms, and cold storage of customer assets are just a couple of the features available.

9.   Crypto.com Exchange

Crypto.com is a cryptocurrency exchange that offers trading, investment, staking, wallets, and non-fungible tokens (NFTs). This exchange has over 250 different currencies, low fees, and discounts for individuals in a significant position in Crypto.com Coin (CRO). Its ecosystem of crypto-related items may be a suitable fit for people trying to get the most out of their coin.

Crypto.com utilizes various security procedures to keep user accounts safe, including multi-factor authentication (MFA) and whitelisting.

10.               Binance.US

Binance.US is a cryptocurrency exchange for citizens of the United States. While Binance.US boasts lower trading costs than its competitors, it has a limited variety of digital assets to buy, sell, and trade. It isn’t available in every state in the United States.

Binance.US provides its users with industry-standard security features. To buy, sell, or exchange cryptocurrency, users must also authenticate their identity. Although the verification process is time-consuming, it is in place to prevent fraud and other illicit actions.

Categories
crypto

DeFi: Your Window to The Next Financial Revolution

The world of Finance is rapidly evolving. With the rise of blockchain, the technology is going through another revolutionary phase. This is effectively cementing the transformation of the internet from being one of information to one of value. DeFi, or Decentralized Finance, is at the forefront of this transformation. To many, it’s just about providing liquidity, but it’s far more than that.

Since the legendary Medici Bank’s establishment in 1397, the financial structure has stayed intact. On the other hand, financial services remain unchanged despite software developments and the internet. While consumer expectations are shifting, financial institutions have responded with cosmetic innovations such as improved user interfaces and more excellent online products.

In contrast, several other businesses have seen complete disruption, including retail commerce, media, and hospitality. In the generation of rapid innovation, we will also see the traditional finance model giving way to new and better-operating methods: DeFi.

DeFi, or open finance innovation, is the game-changer in financial history. It is the new paradigm for how institutions should deliver financial products and services.

What is DeFi

Decentralized Finance, also known as (DeFi), describes financial applications built on top of public blockchains geared toward disrupting financial intermediaries.

DeFi automates centralized manual, inefficient financial services by converting them into smart contracts, which are blockchain-based applications. For the first time in history, markets do not require centralized financial intermediaries, as smart contracts connect buyers and sellers directly.

Several devastating historical incidents have demonstrated the effects of financial centralization, including the 1929 Black Friday, the 1989 S&L Scandal, the GameStop Stock Scandal, and the 2002.com crash.

Most of us can testify to this from our personal experience with the 2008 financial crisis, triggered by centralized Wall Street goliaths controlling the banking sector and refusing to keep their end of the bargain.

Do you notice the pattern here? Out of greed, centralized organizations have deceived the public, pushing us to invest our hard-earned money only to haul the rug out from under us. This concentration of power creates victims, obstructs accountability, and slows down evolution and innovation.

In a nutshell, the goal of decentralized finance networks is to distribute power among users. It’s a platform that makes financial products easily accessible to everybody without the corruption that comes with a centralized agency. Decentralized money is a game-changing and vital step toward actual financial freedom for the people.

The next step is to create an ecosystem that enables people to use their money the way they want. Imagine a world where you can borrow and lend without going through a centralized authority. This is what DeFi offers: A fair, open, and accessible financial system to all.

Why is DeFi Scaling so Fast?

We have seen an emergence of fintech businesses in the last decade, but they are all built on top of the existing finance system. Financial product and service development have historically been a top-down process dominated by a few large financial institutions such as asset management agencies, commercial banks, and insurance corporations.

DeFi is a bottom-up innovation that takes the component of centralized Finance and substitutes human trust with math-based trust, paperwork with smart contracts, legal enforcement with cryptographic enforcement, and third-party audit with open source code and a public ledger.

Additionally, there is the issue of collateralized lending services. DeFi members can borrow up to 85 percent of the value of their deposited crypto instantly, with no credit check and no interest. When you examine the annual rise of premium cryptocurrencies such as Bitcoin or Ethereum and overlay DeFi services, you can grasp the magnitude of the disruption that lies ahead. DeFi promises to be 10x better, faster, and cheaper than today’s financial services.

Decentralized Finance will do to centralized Finance what the internet did to information. Consider how quickly information is shared on social media today around the world. What if money is transmitted at the same rate as trades get executed and settled?

How Does DeFi Work?

Users interact with DeFi through dapps (“decentralized apps“) software. Most decentralized finance applications are built on Ethereum, the world’s second-largest cryptocurrency platform, which sets itself apart from Bitcoin by allowing users to create and execute smart contracts.

Dozens of DeFi applications run on Ethereum, with smart contracts at their core. Ethereum 2.0, a forthcoming upgrade to Ethereum’s underlying network, may help these apps by addressing Ethereum’s scalability issues.

Let’s look at DeFi’s most popular applications and how they work.

  • Lending platforms– one of the first and most popular DeFi applications, decentralized lending platforms allow users to borrow and lend cryptocurrencies without a third party. DeFi lending is collateral-based, which means that to get a loan, a user must put up collateral, which is frequently ether, the Ethereum token. That means users don’t have to reveal their identity or credit score to get a loan, which is how traditional loans work.
  • Stablecoins– stablecoins are cryptocurrencies designed to maintain a stable value. The most popular stablecoin is Tether, a coin pegged to the US dollar. Tether has been controversial because of its close relationship to Bitfinex, a cryptocurrency exchange accused of fraud. Other stablecoins include Dai, which is pegged to the value of the Swiss franc, and USD Coin, also pegged to the US dollar.
  • Decentralized exchanges (DEXs)– decentralized exchanges allow users to trade cryptocurrencies without a third party. DEX is an algorithm (computer code!) that enables traders to trade 24 hours a day, seven days a week. Users not only trade or obtain liquidity through DEXs, but they can also seed this liquidity pool with their assets.
  • Wrapped” bitcoins (WBTC)- wrapped bitcoins are Bitcoin tokens backed by ether and used directly on the DeFi system. WBTCs allow users to earn interest on the bitcoin they lend out through decentralized lending networks.

New DeFi concepts have sprung up around these apps, such as “DeFi Credit,” a way of earning interest on your cryptocurrencies without locking them up in a lending platform. Other DeFi concepts include;

  • Yield farminghere, users scan through multiple DeFi tokens in search of prospects for more significant returns like charging interest when they lend idle their assets. In short, it’s a way to make more crypto with your crypto. This is for experienced traders who are willing to risk their assets.
  • Composability– DeFi apps are open source, which means that anyone is free to look at the code that powers them. As a result, anyone can use these apps to “assemble” new apps with the code as building blocks.
  • Liquidity pools– Any user can deposit their tokenized assets (assets converted into a smart contract) in this pool and earn fees as a liquidity provider, no matter how modest the amount is. Liquidity providers can make benefit from the underlying DeFi platform in addition to fees, such as the interest for lending or governance tokens for the protocol, which have a tradable value.

What are the Benefits of DeFi?

One of the notable benefits of DeFi is that it enables the development of interoperable financial applications on public blockchains. This means developers can build products that work with any blockchain rather than being restricted to a single platform. As a result, DeFi is seeing rapid growth as developers race to create new products and services. Other benefits include;

  • Pseudonymous -You don’t have to give your name, email address, or other personal information.
  • Flexible– You can relocate your assets anywhere at any moment without obtaining authorization, waiting for lengthy transfers to complete, or paying high costs.
  • Increased security– Decentralized applications are much more difficult to hack or steal since there is no central point of failure. This makes them perfect for storing valuable assets such as cryptocurrency.
  • Reduced fees– DeFi applications are often cheaper than traditional financial services since they do not rely on centralized intermediaries.
  • Increased transparency– DeFi applications are transparent and auditable due to their use of public blockchains. This makes them ideal for financial transactions that require trust.

Why Should You Invest in DeFi?

With global markets volatile and traditional finance institutions giving lower monthly yields, it’s only a matter of time until DeFi becomes a go-to investment option for individuals and businesses alike.

Being an early investor in a large-scale disruption pays out handsomely. Revix (a Cape Town-based investment platform sponsored by JSE-listed Sabvest) has created an easy-to-use and customer-friendly interface to all things crypto to facilitate this early access.

Revix announced a new themed DeFi Bundle on Friday, March 25th, giving customers access to the cryptocurrencies shaping the future of Finance.

The DeFi Bundle encompasses a number of the world’s most popular DeFi tokens into a single, convenient investment. The DeFi Bundle gives you access to cryptocurrencies from the world’s leading decentralized exchanges, loan services, and payment networks.

The Bundle automatically rebalances on the 1st of every month. It buys and sells each commodity to take advantage of the opportunities offered by the most recognized DeFi coins.

This dynamic, fully automated strategy makes investing simple, allowing you to maximize your returns while conserving time.

Conclusion

For many people, decentralized Finance is unsettling since it contradicts traditional government structures. However, the truth is that DeFi is inevitable and will play a significant role in the future of our economy.

Always keep in mind that cryptocurrencies are high-risk investments. You should not invest more than you can afford to lose. You should evaluate your level of experience and investment objectives and, if necessary, seek independent financial advice before investing.

DeFi: Your Window to The Next Financial Revolution

The world of Finance is rapidly evolving. With the rise of blockchain, the technology is going through another revolutionary phase. This is effectively cementing the transformation of the internet from being one of information to one of value. DeFi, or Decentralized Finance, is at the forefront of this transformation. To many, it’s just about providing liquidity, but it’s far more than that.

Since the legendary Medici Bank’s establishment in 1397, the financial structure has stayed intact. On the other hand, financial services remain unchanged despite software developments and the internet. While consumer expectations are shifting, financial institutions have responded with cosmetic innovations such as improved user interfaces and more excellent online products.

In contrast, several other businesses have seen complete disruption, including retail commerce, media, and hospitality. In the generation of rapid innovation, we will also see the traditional finance model giving way to new and better-operating methods: DeFi.

DeFi, or open finance innovation, is the game-changer in financial history. It is the new paradigm for how institutions should deliver financial products and services.

What is DeFi

Decentralized Finance, also known as (DeFi), describes financial applications built on top of public blockchains geared toward disrupting financial intermediaries.

DeFi automates centralized manual, inefficient financial services by converting them into smart contracts, which are blockchain-based applications. For the first time in history, markets do not require centralized financial intermediaries, as smart contracts connect buyers and sellers directly.

Several devastating historical incidents have demonstrated the effects of financial centralization, including the 1929 Black Friday, the 1989 S&L Scandal, the GameStop Stock Scandal, and the 2002.com crash.

Most of us can testify to this from our personal experience with the 2008 financial crisis, triggered by centralized Wall Street goliaths controlling the banking sector and refusing to keep their end of the bargain.

Do you notice the pattern here? Out of greed, centralized organizations have deceived the public, pushing us to invest our hard-earned money only to haul the rug out from under us. This concentration of power creates victims, obstructs accountability, and slows down evolution and innovation.

In a nutshell, the goal of decentralized finance networks is to distribute power among users. It’s a platform that makes financial products easily accessible to everybody without the corruption that comes with a centralized agency. Decentralized money is a game-changing and vital step toward actual financial freedom for the people.

The next step is to create an ecosystem that enables people to use their money the way they want. Imagine a world where you can borrow and lend without going through a centralized authority. This is what DeFi offers: A fair, open, and accessible financial system to all.

Why is DeFi Scaling so Fast?

We have seen an emergence of fintech businesses in the last decade, but they are all built on top of the existing finance system. Financial product and service development have historically been a top-down process dominated by a few large financial institutions such as asset management agencies, commercial banks, and insurance corporations.

DeFi is a bottom-up innovation that takes the component of centralized Finance and substitutes human trust with math-based trust, paperwork with smart contracts, legal enforcement with cryptographic enforcement, and third-party audit with open source code and a public ledger.

Additionally, there is the issue of collateralized lending services. DeFi members can borrow up to 85 percent of the value of their deposited crypto instantly, with no credit check and no interest. When you examine the annual rise of premium cryptocurrencies such as Bitcoin or Ethereum and overlay DeFi services, you can grasp the magnitude of the disruption that lies ahead. DeFi promises to be 10x better, faster, and cheaper than today’s financial services.

Decentralized Finance will do to centralized Finance what the internet did to information. Consider how quickly information is shared on social media today around the world. What if money is transmitted at the same rate as trades get executed and settled?

How Does DeFi Work?

Users interact with DeFi through dapps (“decentralized apps“) software. Most decentralized finance applications are built on Ethereum, the world’s second-largest cryptocurrency platform, which sets itself apart from Bitcoin by allowing users to create and execute smart contracts.

Dozens of DeFi applications run on Ethereum, with smart contracts at their core. Ethereum 2.0, a forthcoming upgrade to Ethereum’s underlying network, may help these apps by addressing Ethereum’s scalability issues.

Let’s look at DeFi’s most popular applications and how they work.

  • Lending platforms– one of the first and most popular DeFi applications, decentralized lending platforms allow users to borrow and lend cryptocurrencies without a third party. DeFi lending is collateral-based, which means that to get a loan, a user must put up collateral, which is frequently ether, the Ethereum token. That means users don’t have to reveal their identity or credit score to get a loan, which is how traditional loans work.
  • Stablecoins– stablecoins are cryptocurrencies designed to maintain a stable value. The most popular stablecoin is Tether, a coin pegged to the US dollar. Tether has been controversial because of its close relationship to Bitfinex, a cryptocurrency exchange accused of fraud. Other stablecoins include Dai, which is pegged to the value of the Swiss franc, and USD Coin, also pegged to the US dollar.
  • Decentralized exchanges (DEXs)– decentralized exchanges allow users to trade cryptocurrencies without a third party. DEX is an algorithm (computer code!) that enables traders to trade 24 hours a day, seven days a week. Users not only trade or obtain liquidity through DEXs, but they can also seed this liquidity pool with their assets.
  • Wrapped” bitcoins (WBTC)- wrapped bitcoins are Bitcoin tokens backed by ether and used directly on the DeFi system. WBTCs allow users to earn interest on the bitcoin they lend out through decentralized lending networks.

New DeFi concepts have sprung up around these apps, such as “DeFi Credit,” a way of earning interest on your cryptocurrencies without locking them up in a lending platform. Other DeFi concepts include;

  • Yield farminghere, users scan through multiple DeFi tokens in search of prospects for more significant returns like charging interest when they lend idle their assets. In short, it’s a way to make more crypto with your crypto. This is for experienced traders who are willing to risk their assets.
  • Composability– DeFi apps are open source, which means that anyone is free to look at the code that powers them. As a result, anyone can use these apps to “assemble” new apps with the code as building blocks.
  • Liquidity pools– Any user can deposit their tokenized assets (assets converted into a smart contract) in this pool and earn fees as a liquidity provider, no matter how modest the amount is. Liquidity providers can make benefit from the underlying DeFi platform in addition to fees, such as the interest for lending or governance tokens for the protocol, which have a tradable value.

What are the Benefits of DeFi?

One of the notable benefits of DeFi is that it enables the development of interoperable financial applications on public blockchains. This means developers can build products that work with any blockchain rather than being restricted to a single platform. As a result, DeFi is seeing rapid growth as developers race to create new products and services. Other benefits include;

  • Pseudonymous -You don’t have to give your name, email address, or other personal information.
  • Flexible– You can relocate your assets anywhere at any moment without obtaining authorization, waiting for lengthy transfers to complete, or paying high costs.
  • Increased security– Decentralized applications are much more difficult to hack or steal since there is no central point of failure. This makes them perfect for storing valuable assets such as cryptocurrency.
  • Reduced fees– DeFi applications are often cheaper than traditional financial services since they do not rely on centralized intermediaries.
  • Increased transparency– DeFi applications are transparent and auditable due to their use of public blockchains. This makes them ideal for financial transactions that require trust.

Why Should You Invest in DeFi?

With global markets volatile and traditional finance institutions giving lower monthly yields, it’s only a matter of time until DeFi becomes a go-to investment option for individuals and businesses alike.

Being an early investor in a large-scale disruption pays out handsomely. Revix (a Cape Town-based investment platform sponsored by JSE-listed Sabvest) has created an easy-to-use and customer-friendly interface to all things crypto to facilitate this early access.

Revix announced a new themed DeFi Bundle on Friday, March 25th, giving customers access to the cryptocurrencies shaping the future of Finance.

The DeFi Bundle encompasses a number of the world’s most popular DeFi tokens into a single, convenient investment. The DeFi Bundle gives you access to cryptocurrencies from the world’s leading decentralized exchanges, loan services, and payment networks.

The Bundle automatically rebalances on the 1st of every month. It buys and sells each commodity to take advantage of the opportunities offered by the most recognized DeFi coins.

This dynamic, fully automated strategy makes investing simple, allowing you to maximize your returns while conserving time.

Conclusion

For many people, decentralized Finance is unsettling since it contradicts traditional government structures. However, the truth is that DeFi is inevitable and will play a significant role in the future of our economy.

Always keep in mind that cryptocurrencies are high-risk investments. You should not invest more than you can afford to lose. You should evaluate your level of experience and investment objectives and, if necessary, seek independent financial advice before investing.

Categories
crypto

What are NFTs: All You Need to Know About Non-Fungible Tokens

Last weekend, an outfit called Afterparty set out to establish that NFTs have real-world utility. They held an event named Afterparty NFT Art & Music Festival in Las Vegas, gathering nearly 6,000 people. According to reports, 40 musical acts, DJs, and digital artists were on the line-up. What does that tell you?

NFTs are still gaining notoriety since they exploded out of ether earlier this year. These digital assets sell like the 17th-century exotic Dutch tulips on anything from art and music to tacos and toilet paper for millions of dollars.

The developers of NFTs typically used the same programming like that of cryptocurrency. So why is everyone so eager to jump on the NFT bandwagon? Is it worth the hype, or is it a bubble poised to pop? Here is all you need to know about non-fungible tokens.

What Are NFTs?

Non-fungible tokens (NFTs) are digital assets that are not interchangeable. These digital assets represent real-world objects such as art, music, in-game items, and films. You can buy and trade them online, often using cryptocurrency since they’re usually encoded with the same software as many other cryptos. NFTs include a unique code string kept on a digital ledger known as a blockchain, and their value changes depending on the demand.

In the digital world, NFTs are “one-of-a-kind” assets that may be purchased and sold like any other piece of property but have no physical form of their own. But, anyone can still check out the artists’ work online. So why are people willing to spend millions on an item they could easily download?

Buyers want to claim ownership of the original item, which was previously impossible with digital art before the invention of NFTs in the mid-2010s.

Today, each token comes with built-in authentication, which acts as proof of ownership. The “digital bragging rights” are almost as valuable as the item itself to collectors.

Even though they’ve been there since 2014, NFTs are currently gaining popularity as a popular means to buy and sell digital artwork. Since November 2017, a whopping $174 million has gone into NFTs.

Dieter Shirley, CTO of Dapper Labs, the company behind numerous popular blockchain platforms, told CBS News that “NFTs are the first-way blockchain technology has engaged with many people. With NFTs, we can have meaningfully scarce or unique treasures as part of our digital lives for the first time.”

This stands in sharp contrast to most digital products, which are nearly always available in endless quantities. If a particular asset is in demand, cutting the supply should theoretically increase its value. In short, creators of these types of NFT collections incorporate different traits of varying degrees of rarity further to increase the value and scarcity of their pieces.

Artists worldwide are ecstatic: NFTs allow them to earn significant money from their work, reach a global audience, and link a digital file to its creator, guaranteeing authenticity.

For example, acclaimed digital artist Mike Winklemann, better known as “Beeple,” created a composite of 5000 daily drawings to create “EVERYDAYS: possibly the most famous NFT today, which sold at Christie’s for a record-breaking $69.3 million.

According to Max Moore, who oversaw the first NFT auction at Sotheby’s, “As contemporary society absorbs and integrates technology into every part of life, it’s only natural for artists who are commentators on society to respond and use the media at their disposal to explain what’s going on.” He adds, “I believe it is simply a part of natural evolution.”

Other Summarized Features of NFTs

Non-fungible – blockchain-based cryptographic assets with unique identifying codes and metadata that separate them. Users cannot trade or exchange them for equivalency, unlike cryptocurrencies.

Indestructible– Each token cannot be destroyed, withdrawn, or reproduced because the platform saves all NFT data on the blockchain via smart contracts. The ownership of these tokens is likewise unchangeable, implying that players and collectors own their NFTs rather than the firms that create them.

Verifiable– Another advantage of maintaining historical ownership data on the blockchain is that buyers can trace items like digital artwork back to their original creator, eliminating third-party verification.

How Do NFTs Work?

NFTs get stored on a blockchain, a decentralized public ledger that keeps track of transactions. Most people are familiar with blockchain as the underlying technology that allows cryptocurrencies to exist without a centralized authority.

NFTs are essentially digital versions of tangible collector’s artifacts. As a result, the customer receives a digital file rather than receiving an actual oil painting to put on the wall.

When an NFT is transferred, the blockchain updates to reflect the new ownership. This makes it possible to track the movement of digital assets and prevents them from being double-spent. Each token also has its unique metadata, including the description of the asset, title of a work, and artist’s name.

This data is stored on the blockchain in a tamper-proof way, meaning it can’t be changed or removed without being detected. This makes it possible to verify the authenticity of an NFT and track its ownership history.

NFTs, unlike all other cryptocurrencies, cannot directly be listed on centralized or decentralized exchanges. Instead, users must participate in the listing and selling these assets through custom-built NFT marketplaces. OpenSea and Rarible are two of the most popular. However, other options are available depending on which NFT collection you’re interested in.

Why Do NFTs Matter?

The comparatively basic concept of cryptocurrency has evolved into non-fungible tokens. Modern financial systems include complex trading and lending systems for various asset categories, including real estate, lending contracts, and artwork. NFTs are a step ahead in the reinvention of this infrastructure since they enable digital representations of physical assets.

Artists and content creators have a one-of-a-kind opportunity to monetize their work thanks to blockchain technology and NFTs. Artists, for example, no longer have to sell their work through galleries or auction houses. Instead, the artist can sell it as an NFT straight to the consumer, allowing them to keep a larger portion of the profit.

Additionally, artists can integrate royalties into their programs to receive a share of sales when their work gets sold to a new owner. This is a desirable feature because most artists do not receive subsequent proceeds after their first sale.

William Shatner, who played Captain Kirk in “Star Trek,” entered the digital collectibles market in 2020, issuing 90,000 digital cards on the WAX blockchain with various photos of himself. Each card initially went for around $1 and now generates passive royalty income for Shatner every time one gets a new buyer.

Making money using NFTs isn’t limited to art. For instance, brands like Taco Bell and Charmin auctioned off themed NFT art to raise funds for charity. Taco Bell’s NFT art sold out in minutes, with the highest bids at 1.5 wrapped ether (WETH)—equal to $3,723.83. On the other hand, NBA Top Shot generated more than $500 million in sales in March.

How Do You Buy NFTs?

You can purchase NFTs on Ether, but you’ll need to buy a digital wallet that can hold both NFTs and cryptocurrencies. After that, you can buy NFTs from any online NFT marketplaces, such as OpenSea, Rarible, or SuperRare. When researching your alternatives, keep fees in mind. Most exchanges charge at least a percentage of your transaction when purchasing crypto.

NFT Market Places

The largest NFT marketplaces include;

  • Opensea– This peer-to-peer marketplace offers to sell “rare digital products and collectibles.” To get started, create an account and browse the NFT collections. You may also sort pieces by sales volume to find new artists.
  • Foundation– In this platform, artists must get “upvotes” or an invitation from other creators to upload their work. Because of the community’s exclusivity and high admission cost—artists must also acquire “gas” to mint NFTs—it is likely to attract higher-quality work.
  • Rarible– Rarible is a democratic, open marketplace that lets artists and producers issue and sell NFTs. RARI tokens allow members to select features such as fees and community regulations.

Note: The verification methods for creators and NFT listings vary by platform, some being more strict than others. For NFT listings, OpenSea and Rarible, for example, do not require owner verification. Buyer safeguards appear to be limited at best. Therefore, it’s wise to remember the adage “let the buyer beware” when buying NFTs.

The Future Of NFTs

NFT technology is still in its early stages, and companies and projects are now “throwing things at the wall to see what sticks.” Various situations have employed NFTs, which is essential for any technology’s development. Soon, we should have a clearer understanding of how humans will use NFTs in the future. But, for the time being, we’ll have to settle for NFTs getting utilized in as many projects and industries as possible.

Final Thoughts

NFTs are risky because their future is unknown, and there isn’t enough data to gauge their performance. As a result, treat NFTs the same way you would any other investment. So, do your homework, be aware of the hazards, and proceed with caution if you decide to take the plunge.