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Newsletter #5

Markets are euphoric? Load the Korean FUD! Bitcoin dropped by 5% after news broke of Bithumb being investigating by Korean police causing numerous DeFi tokens to drop by 50%. Hope you survived.

Cardano building DeFi Stablecoin on Ergo

Cardano founder Charles Hoskinson recently hinted that there was a lot of DeFi development happening at IOHK. One of the big reveals was a partnership through IOHK, Emurgo and Ergo will launch an algorithmic stablecoin. With true Charles swagger, he immediately stated it would be significantly better than Maker DAO.

So what is the big deal?

The DeFi sector is going through a massive boom, with over $8 billion locked into various protocols on Ethereum. Cardano has been relatively silent on what they want to do in this space. Hoskinson confirmed that more announcements will come later, perhaps around yield farming. That this new stablecoin is just one of the many DeFi products being explored. This has excited the massive ADA community to quickly get behind Ergo.

Zoom in: A new oracle solution to power DeFi products is already live on Ergo’s blockchain. And it will be fully compatible with Cardano’s Goguen release. This is a new approach to data oracles using pools. Fundamentally, different from Chainlink, with no native token required as a means of payment. Essentially, financial barriers are lower for teams to use oracles on Cardano compared to Ethereum.
  • Even though ERG is tricky to buy without a mainstream exchange listing, that did not stop ADA whales moving in. ERG is now up by over 200% in the last 30 days, the token is listed on ViteX.
Zoom out: During the following month, ERG will integrate with the Yoroi wallet. Notably, it will be the first non-ADA asset in the the wallet.

As a result, ERG will then be accessible by the whole Cardano community and will receive a lot of attention. I am expecting the buying pressure on this coin to be massive. To the point that its current $26M market cap will more than triple.

Enter Ethverse where Minecraft meets Ethereum

ETHVerse is a virtual world game built on top of Minecraft, powered by Ethereum. The team aims to enable users to truly own their virtual assets, along with trading them through an in-game decentralized marketplace. Essentially, users will be able to monetize their imagination for building in Minecraft.

What does ETHVerse add to Minecraft?

Users will have an integrated on-chain wallet, enabling them to deposit, send, and receive tokens while playing. Blockchain-powered ownership of virtual land and assets is possible via non-fungible tokens. A marketplace dApp enables users to buy, sell or trade assets and services in a decentralized manner. There are also plans for community governance of ETHVerse via staking.

Zoom in: the team plans to allow users to collateralize their virtual assets, opening up the possibility for in-game DeFi products. A unique feature not seen in competitors such as Enjin, Decentraland, or Sand.
  • Competitors: ENJ, MANA, and SAND have a market cap of $200M, $130M, $30M respectively. Whereas ETHV has a $4M market cap, there is room to grow!
Zoom out: Building on Ethereum is a scalability concern for gaming, will people pay a $20 transaction fee to move ETHV around in-game? Games need a high throughput chain with a low cost such as Lamden or Chromia.

Not so fast cowboy… 31M tokens are going to unlock soon, and does the team have any vesting plans? The second wallet already has 1M tokens available to dump on you. We will need answers.

What is Lition? GDPR Compliant Sidechains

Lition aims to enable the commercial usage of dApps on Ethereum. To do this the Lition protocol will add on various features such as privacy, scalability and the ability to delete data. Essentially, the team is building a sidechain solution for Ethereum which allows companies to build dApps that follow GDPR compliance.
what is lition?

What is Lition?

Much like Loopring, the Lition protocol will leverage zero knowledge proofs to offer teams infinite scalability. Theoretically, block times will confirm and verify within 3 seconds which is fast enough to support real time payment applications. Furthermore, these side chains will secure through staking the native LIT tokens, where node operators can earn rewards.

I never heard of this team… Lition is already operating a P2P energy trading platform in Germany, supplying customers with green power and saving them money. As a result, institutions are taking notice: partnerships with Microsoft, N26, SAP, and TomoChain. 
  • LIT market cap is currently $8M, with big potential to grow given the use case. The risk here is the project does not have a high profile exchange listing, meaning low daily trading volumes. Watch announcements!
Real use case for enterprises… The ability for companies to control the data on their dApp’s sidechain is the real selling point here. Data that can be public or private, and features to delete it remove many headaches for companies to embrace blockchain. To summarize, being GDPR compliant is a very big deal for companies, especially those based in Europe. 

Loopring the Solution to high Ethereum gas fees?

As Ethereum users continued to cry about high transaction fees eating up their DeFi profits. Vitalik Buterin simply stated that the answer was already here. Use Looping! Essentially, the implication is that Layer 2 solutions with over 2500 TPS already exist for trading, we just have to embrace them.

What is Loopring?

Loopring is a decentralized exchange for trading tokens and making payments that use ZK-Rollups. Technology that can drastically lower transaction costs for end-users. As a result, the protocol can support 7000 trades per Ethereum block. To keep it simple, using zero-knowledge proofs takes all of the computation off the blockchain. It reduces the amount of data needed in a transaction.

Loopring also has a native token LRC, which holders can stake. This allows you to reduce fees, earn rewards, and help secure the protocol.

The solution to Eth scalability... With traders unhappy over the high gas fees to complete swaps on Uniswap. We should see Loopring DEX reaching new trading volume highs. The team is listing tokens with active communities such as YFI and BZRX. Along with, liquidity mining programs to support new markets.
  • LRC itself has enjoyed the summer DeFi craze, as investors sought to buy into Eth scalability solutions.
Upcoming releases...Wider adoption looks imminent with the release of their app which will enable easy trading via mobile. Furthermore, Loopring 3.6 release in Q4 will solve the main user complaint of long deposit and withdrawal times.

Also take note

  • Adoption: Pornhub now accepts Bitcoin and Litecoin to pay for premium services.
  • Vite Labs: The fifth hard fork for VITE is now complete, you can trade stablecoins with zero fees conversion on ViteX.
  • ERD to eGLD: Elrond token swap is underway, Binance has already completed the swap and trading will launch on September 3rd.
  • Ankr: supporting Binance Smart Chain launch, with one click node deployment.

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