November 29, 2020 View Online
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Good morning. With Thanksgiving being one week ahead, do you believe that people cash out their BTC for the Black Friday shopping rush, or that’s not the case this year because families are not allowed to celebrate together due to Covid-19? Let us know in the comments.

In today’s edition (sponsored by PrimeXBT): we review a Velvet Fork proposal for Litecoin and Cardano which would create interoperability between the two chains. Along with taking a first look at a Frontier Chain.

Litecoin and Cardano talk potential Velvet Fork

litecoin and cardano velvet fork
Speculation continues to grow over a potential partnership between Litecoin and Cardano towards achieving cross-chain compatibility. On the 17th of November, The Litecoin Foundation and Dionysis from IOHK discussed how a Velvet Fork could work for both chains. An upgrade to introduce several features to LTC such as cross-chain fund settlement, smart contracts, and improved scalability.

Litecoin and Cardano: Velvet Fork?

This upgrade mechanism for a blockchain is not a hard fork or a soft fork, because it is optional. Essentially, miners would keep securing the Litecoin network whether they choose to install the upgrade or not. As a result, there is no need for majority consensus when performing a velvet fork. Both teams have been actively discussing collaboration options for blockchain interoperability since July.

If the partnership moves ahead, the idea is to implement the Non-Interactive Proofs of Work. Because NiPoPoWs enable block verification across different blockchain networks. As a result, Cardano would be able to verify the NiPoPoW transaction from the Litecoin sidechain (where the velvet fork upgrade exists). And perform a smart contract function off the back of that action. To summarize, this technology enables blockchains to talk to each other much like APIs.

Bullish upgrade for Litecoin?

What's interesting about this proposal is that it has little to no impact on the main chain’s security. Yet it would bring various benefits to Litecoin in the form of additional cross-chain use cases and scalability. Furthermore, the discussion spoke of how NiPoPoWs could create interoperability between Litecoin and other smart contract capable chains. Meaning it would not lock Litecoin into working solely with Cardano in any way. Additionally, the code is lightweight (~100 lines) and exists open-source in Bitcoin Cash’s test net.

The catch is that if too few miners choose to update well then the new features would not work. So despite the proposal being an optional upgrade, for the tech to work, it needs community backing.

The proposal does face opposition from Litecoin’s community, with one commentator stating that “Projects that are going after hype and gimmicks don't last long in this space.” Ultimately, with hindsight, the argument of "DeFi economy is just hype" may prove to be a very narrow-minded one. So it seems plausible the Litecoin team might want to make a safe bet?

What is Frontier? A Chain-Agnostic DeFi Aggregation Platform

Frontier app multi chain DeFi opportunities
Frontier is a chain agnostic DeFi aggregation layer, meaning it can interact with apps across several networks. Users can access and monitor their DeFi strategies across multiple blockchains while earning rewards in FRONT tokens.

What is Frontier?

You can compare Frontier to a Decentralized Finance (DeFi) aggregation platform such as Zapper, however, it supports more than just Ethereum. Currently, the DeFi economy is growing rapidly but it is fragmented across multiple networks. Meaning users are often isolated to using a handful of products despite decentralization. Or locked into one DeFi product because of their wallet choice.
What is Frontier? A Chain-Agnostic DeFi Aggregation Platform
With Frontier, these barriers will break down through aggregation. Users can track their investments, manage to stake, execute token swaps, provide liquidity, access lending protocols, and much more. Currently, Frontier supports a range of DeFi products deployed on Ethereum, Binance Smart Chain, BandChain, Kava, Harmony, and Cosmos Network. Furthermore, the team is actively developing interoperability with Polkadot and Solana to access products such as PolkaStarter and Serum DEX. To summarize, Frontier believes users should easily have access to DeFi opportunities in many networks.

What is FRONT token?

FRONT is the platform’s native utility token with the following main use cases:
  • Liquidity Mining: liquidity providers can earn rewards in FRONT tokens.
  • Consensus: Frontier Chain will feature staking FRONT tokens to run a validator node and holders will be able to delegate tokens.
  • Governance: Platform decisions and parameter changes will be community-driven.
Additionally FRONT token will also power various platform key features such as:
  • Referrals: earn rewards for inviting your friends into the DeFi economy.
  • Gasless transactions: users will be able to lock tokens in the Frontier Vault as a way to subsidize transaction fees.
  • Non-fungible tokens: Frontier is also planning an NFT marketplace where creators can buy, sell, and mint NFTs.

Looking to the future

What’s interesting about Frontier is that it also introduces wallet composability to DeFi via TxLink. Essentially you can use the platform with any Web3 wallet (Trust Wallet, Coinbase Wallet, MetaMask, Fortmatic, etc…) which makes onboarding extremely smooth. As a result, you no longer need to download different wallets to access DeFi products on other chains.
Decentralized Key Management… Another fear in cryptocurrency that stops participants from entering is the thought of losing seed phrases and backup keys. Frontier is building a decentralized key management protocol to ensure your funds are always recoverable.
Deflationary… Adoption will drive the value of FRONT, as the team requires that a portion of any B2B integration fees are collected in tokens. As the demand for fluid on/off ramps between CeFi & DeFi products increases, Frontier’s position will strengthen!

Sponsored by PrimeXBT

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The information provided on this email should not be taken as investment advice, financial advice, trading advice, or any other sort of advice. dExplain does not recommend the use of any decentralized application nor that any cryptocurrency should be bought, sold, or held by you. You should do your own research and consult a financial advisor before making any investments.

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