Altcoin roundup: There’s more to DeFi than just providing liquidity

Bitcoin price is down but crypto investors still have a plethora of yield opportunities thanks to DeFi.

The growth of the decentralized finance (DeFi) sector has been a recurrent headline throughout 2021 and to date, hundreds of billions of dollars in crypto assets are locked on protocols across numerous blockchain networks and earning a yield for their holders. 

What started off as a simple Ethereum-based swap interface that allowed ERC-20 tokens to be exchanged in a decentralized manner, called Uniswap, has exploded into a vast ecosystem full of decentralized exchanges, yield farms, lending protocols and staking platforms.

As development continues and older protocols become more established, newer projects have emerged to incorporate more pieces from the traditional financial realm into the DeFi arena as digital technology slowly transforms the global financial system.

Here’s a look at some ways for users to get involved with DeFi outside of simply staking in liquidity pools or depositing to a lending protocol.

Decentralized derivatives trading

Cryptocurrency derivatives exchanges have long been a target for regulators, and once defiant exchanges like BitMEX and Binance have found themselves bending to the will of the law and modifying their operating practices as they seek a more legitimate standing.

This has furthered the necessity for crypto traders to have a decentralized option and led to the creation of protocols like dYdX and Hegic, which offer similar services without the target that is a centralized structure for regulators to come after.

DYdX is a non-custodial perpetuals trading platform built on a layer-two protocol that operates on the Ethereum network and offers users access to up to ten times leverage on futures contracts for more than twenty cryptocurrencies.

Hegic is an on-chain options trading protocol that utilizes hedge contracts and liquidity pools to offer options contracts that last up to 90 days and can payout in Ether (ETH), Wrapped Bitcoin (WBTC) or USD Coin (USDC).

Both of these platforms offer users access to these advanced trading products without the need to divulge their identities, as is required on the centralized counterparts.

Bonding, rebase and ultra-high APY tokens

One topic that is increasingly popping up more in financial discussions is the concept of how to create a decentralized reserve currency that is free of the control of any government or centralized financial institution.

Olympus aims to address this issue through a decentralized autonomous organization (DAO) platform which offers staking and various bond offerings including the ability to bond Ether, MakerDAO (DAI), Liquidity USD (LUSD) and Frax (FRAX).

The bonding process on Olympus is basically a cross between a fixed income product, a futures contract and an option. Bonders are provided with a quote outlining terms for a trade at a future date and include a predetermined amount of the protocol’s native OHM token that the bonder will receive once the vesting period is complete.

Funds that are raised by bond offerings go into the Olympus treasury as collateral to back the OHM tokens that were minted, helping to provide the underlying value behind the OHM token which allows it to be used as a reserve currency or medium of exchange.

The only other projects that have a treasury that provides the underlying value for each token are stablecoins, but as the name implies their price is fixed whereas the price of OHM can increase, offering a new avenue of yield for users.

Once bonding is complete, users can sell their OHM on the open market or stake them on the Olympus protocol for a current yield of 7,299%.

Related: CFTC renewed: What Biden’s new agency picks hold for crypto regulation

Crowd loan participation on Polkadot and Kusama

Another way crypto holders can put their assets to work while also helping the cryptocurrency ecosystem expand is through participating in the parachain auctions in the Polkadot and Kusama ecosystems through a process known as a crowd loan.

In the auction process, different projects vie for one of the limited parachain slots that connect the project directly to the main Kusma or Polkadot network, facilitating the interconnection of all parachains in the ecosystem.

With crowdloans, users who hold the native KSM and DOT tokens can “contribute” them towards the pool that a project uses to secure a parachain slot, and they will have their tokens returned after a specified lock-up or bonding period that can last for up to one year.

In exchange for their contribution and inability to earn staking rewards for the period that the tokens are locked up, users receive a specified number of tokens for the new protocol which can then be used in the ecosystem or sold on the market.

This approach offers a less risky yield opportunity for token holders, as all principal contributions are locked in a smart contract and returned after the stipulated lock-up period. And by the nature of the parachain auction process, there have been well-developed projects with larger communities that have secured parachain slots, increasing the chance that their tokens will maintain or increase in value as long development for the protocols stays active.

Aside from the threat of regulation, the DeFi ecosystem is showing few signs of slowing its integration of the best parts of the traditional financial system and developing innovative protocols that level the playing field for retail investors.

Want more information about trading and investing in crypto markets?

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Here’s why Avalanche, OriginTrail and Coti hardly budged as Bitcoin fell to $40K

Market corrections are scary, but savvy altcoin traders also know it is an opportunity to secure hefty gains — here’s how.

Admittedly, the last few days have not been not the most pleasant time for crypto traders as the price of Bitcoin (BTC) price fell short of breaking the $50,000 threshold, then slid to the low-$40,000 range and pulled the majority of altcoins down with it.

Despite this sharp downturn, a handful of tokens seemed to do much better than the rest of the market by posting weekly gains in their BTC and U.S. dollar-denominated pairs.

Some traders looking to rack up their Bitcoin holdings cannot be bothered to follow an altcoins’ price dynamics against the dollar. For them, BTC slumps like the recent one can be seen as a profit opportunity, but how does one tell what coins are likely to perform well when BTC is on its way down?

AVAX: Powered by the news

Avalanche (AVAX) has added 28.19% in its dollar pair and 43.46% against BTC over the past week. Furthermore, on Sept. 17, the price of AVAX rose from 128,600 satoshis (sats) to 153,600 sats on the news of a partnership between the Avalanche Foundation and DeFi liquidity hub Kyber Network.

AVAX price vs. VORTECS™ Score. Source: Cointelegraph Markets Pro

As AVAX’s price was coming down from this first peak, the pattern of market and social conditions around the asset’s price movement, trading volume, tweet volume and sentiment began to strongly resemble the patterns observed in previous dramatic price increases.

This was indicated by the coin’s algorithmic VORTECS™ Score — an indicator exclusively available to CT Markets Pro subscribers — going above 80, which can be seen on the dark green line marked by a red circle on the chart.

Scores of 80 and above indicate the model’s high confidence that the pattern is consistent.

Indeed, several hours after the VORTECS™ Score line had turned dark green, AVAX’s rally resumed. It was undercut by the market-wide slump in the early hours of Sept. 20, but the token’s individual bullish momentum was so strong that it rebounded in less than a day, trading at 156,900 sats on Sept. 22.

TRAC: A long turnaround

In the last seven days, OriginTrail’s Trace (TRAC) token has been up 6.02% against the U.S. dollar and 18.11% against Bitcoin.

TRAC price vs. VORTECS™ Score. Source: Cointelegraph Markets Pro

On Sept. 16, social and market variables around TRAC formed a historically favorable arrangement, and the coin’s VORTECS™ Score reached the value of 85 against the price of 852 sats. The algorithm is trained to detect conditions that have consistently preceded previous rallies by 12 to 72 hours, so sometimes price movement action can come days after a favorable score is registered.

This turned out to be the case with TRAC’s price action this week. Roughly 70 hours after the peak VORTECS™ Score showed up, the coin soared from 740 to 1088 sats in 24 hours. The Sept. 20 market flash crash took its toll on TRAC, but it recovered quicker and harder than most and secured positive weekly returns against both BTC and the dollar.

COTI: Enough momentum to weather the storm

COTI generated an extra 12.55% against the dollar and 26.51% versus BTC this past week.

COTI price vs. VORTECS™ Score. Source: Cointelegraph Markets Pro

The coin’s VORTECS™ Score briefly went beyond 80 briefly on Sept. 17 in the middle of a rally that took it from 668 to 926 Sats. COTI’s momentum began to recede before the Sept. 20 rout, with the asset trading at around 800 sats early that day. Yet, the robust market and social outlook detected earlier ensured that the asset’s recovery was smooth: The coin recouped much of the losses over the next two days.

While the VORTECS™ Score is by no means a prediction of future price movement, it can alert investors to historical trends that can be profitably incorporated into a trading strategy. 

Cointelegraph is a publisher of financial information, not an investment adviser. We do not provide personalized or individualized investment advice. Cryptocurrencies are volatile investments and carry significant risks including the risk of permanent and total loss. Past performance is not indicative of future results. Figures and charts are correct at the time of writing or as otherwise specified. Live-tested strategies are not recommendations. Consult your financial advisor before making financial decisions.

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Bitcoin is great, but real crypto innovation has moved elsewhere

Bitcoin will always be the boss, but the real innovative and groundbreaking developments are happening in layer-2 solutions, DAOs, NFTs with utility and the emerging Metaverse.

Something is brewing, and those with finely tuned noses can smell it. As traders have come to expect, Bitcoin (BTC) is doing “Bitcoin things” by bouncing around between the usual “key” support and resistance levels, and to be honest, it’s all starting to feel a bit boomerish.

Bitcoin’s long-awaited “moon” depended on institutional investor buy-in, breaking the previous all-time high at $19,000, and a set of other firmly held beliefs. Well, all that happened, and the run to $64,900 exceeded many investors’ wildest dreams. But despite this, the entire BTC situation just feels predictable and boring if you are of the opinion that the top-ranked cryptocurrency will eventually top out around $100,000 in the current bull market.

So, back to what else is brewing…

Decentralized autonomous organizations (DAOs) are hot, nonfungible tokens (NFTs) are hot, play-to-earn gaming is hot and the Metaverse is hot.

This is where the real heads are right now — speculating, building, pondering, networking and doing shit that actually matters. And what is unique about those who are really putting in work in the trenches of crypto is that this grassroots approach and bottom-up building trend is leading to some of the space’s most groundbreaking projects.

Take Dom Hofmann’s “Loot” project as an example, or the recent Good Bridging and BridgeLoot drops in the Avalanche ecosystem.

Rather than putting on a suit, throwing together some c-suite-friendly presentation and chasing after venture capital dollars, Loot was minted for free by interested participants willing to pay the gas costs, and the community ascribed value to the NFTs via OpenSea sales.

The value of new ideas was agreed upon by a flurry of discussions in Discord, and anyone with an idea was free to launch their own derivative contract where Loot holders could then replicate the minting and listing cycle again.

Will Papper’s airdrop of 10,000 Adventure Gold (AGLD) to Loot NFT holders, soon became worth over $50,000 and catapulted the entire project to stardom and into the history books. It was essentially the “YFI” of NFTs, some would say.

There’s a seismic shift at hand

What’s unique and intriguing about Loot is that it has set the precedent for what is becoming a new drop model in the space. The process involves creating a product (whether it be an NFT or a protocol), mentioning it to an interested community, and allowing them to mint tokens for free within the 7,777 to 10,000 supply range. After that, creators let the community, speculators, believers and OpenSea do the rest.

Hofmann encouraged the entire fam to do what they wanted with the project — he essentially said, “This is yours! Go and build, my children!” The anon genius behind the Good Bridging (GB) token drop also did the same but with even less guidance.

Basically, 16,000 early users of Avalanche’s Ethereum-to-Avalanche bridge got an 895 GB token airdrop, which at its peak price of $2.60 per GB was worth about $2,300. Not too shabby, eh?

To add to this, GB holders who didn’t immediately liquidate the drop were eligible to mint a gasless BridgeLoot NFT as a reward, and a few hours later, the Avalanche-based NFT marketplace Snowflake verified and listed BridgeLoot, where many holders listed their NFTs for 20 to 100 AVAX.

From a markets perspective, money chases after money. Investors chase after liquidity, and that’s part of what drives price action within markets.

We see this happening with all the layer-one incentive launches where hundreds of millions of dollars are shifting from ETH to Fantom, or ETH to Arbitrum, or ETH to AVAX, or ETH to LUNA, or ETH and USDC to Web3-based decentralized exchanges like dYdX and GMX.

The point is that crypto is driven by liquidity and trends. The whole Loot phenomenon let the cat out of the bag and enlightened builders on a feature that has always been present but only recently uncovered.

Bottom-up fundraises, NFTs with utility in the Metaverse, DAOs and the great liquidity suck into layer-2 ecosystem are here to stay.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Avalanche (AVAX) just hit a new ATH, but what’s really behind the price surge?

AVAX price soared to a record high as heavy inflows enter the protocol through its cross-chain bridge and institutional investors pledge $230 million in funding for the rapidly expanding Avalanche ecosystem.

On Sept.16 Avalanche (AVAX) price hit a new all-time high at $68.89 and over the last few months the project has risen to challenge the Ethereum (ETH) network’s dominance among smart contract platforms. According to the project’s website, the layer-one protocol capable of surpassing 4,500 transactions per second (TPS) with a time to finality of less than 2 seconds.

Data from Cointelegraph Markets Pro and TradingView shows that since hitting a low of $32.10 on Sept. 7, the price of AVAX has rallied 111% to establish a new all-time high on Sept. 16 as its 24-hour trading volume spiked 200% to $2.8 billion.

AVAX/USDT 4-hour chart. Source: TradingView

Three reasons for the surging price of AVAX include the recent completion of a $230 investment round by large capital funds, the continued migration of liquidity to the Avalanche network and new integrations and protocol upgrades that help improve the user experience.

Big funds back Avalanche

The jump in momentum seen in AVAX price on Sept. 16 came following the announcement that a handful of large funds including Polychain Capital, Three Arrows Capital and Dragonfly capital took part in a $230 million funding round for the project.

This marks the largest investment into the Avalanche ecosystem to date and indicates that larger institutional players are starting to take a keen interest in the Ethereum competitor.

The Avalanche network is cross-chain compatible with Ethereum meaning any tokens or projects that operate on Ethereum can fully migrate to the Avalanche ecosystem and take advantage of its higher throughput capabilities and lower transaction costs.

With no definitive date on when Eth2.0 will be fully operational or what its final capabilities will be, networks like Avalanche now have an opportunity to make the case for why they are a better choice, which could lead to an increase in their market share.

Liquidity migration and rising TVL

A second reason for the building strength seen in AVAX has been the continual migration of assets from networks like Ethereum to Avalanche to participate in its growing decentralized finance ecosystem.

Evidence of the asset migration can be found in the total value locked (TVL) data provided by Defi Llama, which shows that the TVL on Avalanche has been climbing rapidly since Aug. 19 and reached a new record high of $2.17 billion on Sept. 16.

Total value locked on Avalanche. Source: Defi Llama

The rise in TVL is largely due to the launch and growth of several successful decentralized finance (DeFi) protocols on Avalanche including Benqi (QI), Trader Joe (JOE) and Pangolin (PNG).

Related: Bull flag breakout pushes Avalanche toward $80 as AVAX price hits another record high

Partnerships and crypto-related integrations

A third factor that has helped boost the value of AVAX has been a series of partnership and integration announcements that have excited investors and put the spotlight on the project.

The Avalanche NFT ecosystem has seen an influx of interest thanks to a partnership with the sports card and memorabilia company Topps, which launched its “Inception” NFT digital collectibles series on the network.

There is also a vote underway in the Aave community, one of the top DeFi protocols in the cryptocurrency ecosystem, to see if investors want to see AAVE launch on the Avalanche network. A vote of approval could lead to a further increase in TVL on Avalanche as assets held in AAVE on Ethereum have the potential to be migrated to AAVE on Avalanche.

According to data from Cointelegraph Markets Pro, market conditions for AVAX have been favorable for some time.

The VORTECS™ Score, exclusive to Cointelegraph, is an algorithmic comparison of historical and current market conditions derived from a combination of data points including market sentiment, trading volume, recent price movements and Twitter activity.

VORTECS™ Score (green) vs. AVAX price. Source: Cointelegraph Markets Pro

As seen in the chart above, the VORTECS™ Score for AVAX spiked into the green and reached a high of 86 on Sept. 13, around 24 hours before the price increased 40% over the next two days.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Hedera Hashgraph rallies 150% in a week as its ecosystem expands

New partnerships, NFT integration and a market-wide surge in altcoin prices back HBAR’s recent 150% rally.

Real-world adoption and blockchain integration is the ultimate goal of any serious fintech protocol looking to offer workable solutions to some of the biggest challenges in finance and data transmission.

Hedera Hashgraph, a public network that uses a distributed ledger technology known as Hashgraph to increase scalability and lower transaction costs.

HBAR/USDT 4-hour chart. Source: TradingView

Two of the main reasons for the recent rise in HBAR include a growing list of ecosystem partners and the introduction of NFT minting capabilities to the network.

Hedera partnerships expand HBAR’s availability

The Hedera partnership program is an offshoot of the Hedera community that aims to roll more integrators, technology partners and enterprise applications to Hedera’s blockchain.

A scroll through the project’s Twitter feed shows that the partnership program lured new partners like the London School of Economics and Political Science and the Indian Institute of Technology Madras to the Hedera governing council.

Other recent partnership announcements include collaborations with Fobi, Dropp, and Filecoin, which has launched a $200,000 developer grant project in conjunction with Hedera designed to help advance Web3 interoperability.

Related: Indian university joins Hedera decentralized governance council

NFTs come to the Hedera network

The second source of excitement for the Hedera protocol has been the introduction of nonfungible token (NFT) minting capabilities on the network.

The NFT sector has been one of the hottest trends in 2021 and while the price action and trading activity for NFTs have declined significantly from their August highs, the sector is likely to expand in the near future.

VORTECS™ data from Cointelegraph Markets Pro began to detect a bullish outlook for HBAR on Sept. 4, prior to the recent price rise.

The VORTECS™ Score, exclusive to Cointelegraph, is an algorithmic comparison of historical and current market conditions derived from a combination of data points including market sentiment, trading volume, recent price movements and Twitter activity.

VORTECS™ Score (green) vs. HBAR price. Source: Cointelegraph Markets Pro

As seen in the chart above, the VORTECS™ Score for HBAR climbed into the green zone on Sept. 4 and reached a high of 72 around 72 hours before its price increased 147% over the next seven days.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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