Autor Cointelegraph By Emi Lacapra

What is Robinhood, and how does it work

What is Robinhood, and how does it work

Uverejnil používateľ | jún 11, 2023 |

Robinhood’s business model sustains itself with multiple revenue streams, mainly through a practice known as payment for order flow. Order flow Order flow is a compensation structure widely used by Robinhood and other similar brokerages to process retail stocks, ETFs, options and crypto trades.  This is how it works: When customers place trades on the platform, their orders are routed to market makers or trading firms for execution and to make an order flow. These firms pay Robinhood fees for the opportunity to execute their trades and potentially profit from the bid-ask spread and other trading strategies.  While this practice allows Robinhood to offer zero-commission trades to its users, its order flow model has faced regulatory scrutiny and controversy due to concerns about potential conflicts of interest and the quality of trade execution.  Interest on cash balances When customers hold uninvested cash in their Robinhood balance, Robinhood directs such funds to pools and earns interest on them. The platform shares a portion of this interest revenue with its users, typically through a “Robinhood Cash Management” program that users must opt in to to earn a small percentage of interest on their uninvested cash balances.  The cash can be accessed with a Robinhood debit card. The company moves customers’ uninvested money into FDIC-insured partner banks that then pay Robinhood a fee, including a small share of the interchange fees from the debit card transactions.  Premium accounts While the basic trading services are commission-free, premium account subscriptions allow  investors to access various premium-tier tools. The subscription is called Robinhood Gold, and it provides additional features and benefits to users who pay a monthly fee. Such advantages include more significant instant deposit amounts, access to Level II market data provided by NASDAQ, professional research information from Morningstar and margin trading.  Robinhood API fees Robinhood allows developers and companies to access application programming interfaces (APIs) that they can integrate with their platform. Robinhood earns revenue from these partnerships and integrations by charging API access fees. Securities trading  Robinhood launched a lending program that entitles its customers to earn money on stocks. Users who opt for this solution allow the trading app to lend their shares to financial institutions that use such funds for different purposes, including covering deficits, facilitating trade settlements and executing short sales. Borrowers pay Robinhood interest on the loan they received, and a portion of that revenue is passed on to Robinhood users.

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How blockchain is revolutionizing the gaming industry?

How blockchain is revolutionizing the gaming industry?

Uverejnil používateľ | máj 16, 2023 |

As blockchain gaming continues to evolve and become more adopted in entertainment, it’s natural to contemplate the future of the industry.  The future of blockchain gaming is promising and will likely see significant growth in the coming years, including mainstream adoption as more businesses endorse blockchain technology. More traditional game developers may incorporate blockchain technology into their games, leading to increased mainstream adoption. One primary challenge for blockchain gaming will be overcoming entry barriers for players and organizations. Emerging market players like DeFi Kingdoms, 0xBattleGround and CryptoBeasts are built around DeFi models focusing on decentralization and players’ ownership of in-game assets. This leads to lower barriers to entry for new players and helps increase the overall participation and engagement in the gaming industry.  By granting users more power and ownership over their virtual assets, the use of blockchain-powered NFTs has the potential to influence the future of the gaming sector. Blockchain-based games can employ NFTs to verify players and eliminate bad actors — as demonstrated by 0xBattleGround — making the gaming experience safer and more transparent. Furthermore, having access to NFTs that stand in for in-game assets enables users to earn money from virtual goods outside the game environment. This might open up new revenue opportunities for users, promoting a more decentralized and fair gaming industry.  As blockchain continues to gain recognition, further technological advancements are expected, enabling even more innovation in the gaming experiences as well. This could include more sophisticated smart contracts, advanced token systems and better integration with other technologies like virtual reality. Increased interoperability may also be a focus in the future of blockchain-based gaming platforms to allow better communication between game networks. Players can use their assets across multiple games and platforms, creating a more seamless and integrated gaming experience. Greater integration of blockchain gaming with DeFi would benefit from including more advanced DeFi features in blockchain games, such as staking, yield farming and liquidity provision. There’s no doubt that the gaming industry has the potential to offer innovative and thrilling new experiences to players — all within a favorable sustainable environment. Will it rise to the challenge of replacing the traditional gaming industry? Only time will tell!

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What is Google’s Bard, and how does it work?

What is Google’s Bard, and how does it work?

Uverejnil používateľ | máj 10, 2023 |

AI chatbots’ latest trending services have raised various security, privacy and efficiency queries. However, the first question everyone has in mind is if Google Bard is better than ChatGPT. Similarly, both Google Bard and OpenAI’s ChatGPT are AI chatbots designed to interact with people through natural language models and machine learning to generate conversational text.  However, this is where their similarities end. Here are some of the main differences between the two services. Bard’s use of a lighter version of LaMDA enables it to operate with less computing power and handle a larger number of concurrent users. This provides an advantage over ChatGPT, which has been known to struggle with efficiency during times of high demand. ChatGPT produces content based on generative AI, a type of AI system capable of generating text, images or other media in response to prompts. However, such a system makes it more vulnerable to cyberattacks and deep fakes due to its regular use of digital images or videos to create content. On the other hand, Bard is trained around searching and providing conversational inputs that sound more natural and contextual instead of offering a set list of possible answers and easily forgeable files. Still, ChatGPT is trying to help refine searches and offer more naturally sounding conversational search results, in line with Google’s Bard. In January, OpenAi signed a $10-billion deal with Microsoft to incorporate ChatGPT into its Bing search engine and provide more conversational search results. The main difference between the two services is that ChatGPT’s data sets are as up-to-date as 2021, while Bard is based on newer information. Whether this will change in the near future is to be seen; in the meantime, Bard has an advantage over ChatGPT because it relies on Google’s highly updated search results. Plagiarism and intellectual property are one of the main concerns for AI chatting. OpenAI offers a plagiarism detection tool that helps teachers catch their students in case they use it for homework tasks. On the other hand, Bard has yet to reveal any plans to include a plagiarism tool within its offering.

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What are liquidity provider (LP) tokens, and how do they work?

What are liquidity provider (LP) tokens, and how do they work?

Uverejnil používateľ | máj 8, 2023 |

Other than representing a claim of one’s assets, LP tokens can be used across multiple DeFi platforms in ways that can accrue the investment’s value. How do LP tokens gain value? They gain value as a fundamental component of DeFi, contributing to the smooth operation of the DEXs and AMMs used by these DApps.  One primary source of passive income for liquidity providers is the share of transaction-generated fees earned by the liquidity pool in proportion to their investment share. There are other use cases and streams of revenue for LP tokens. Here’s an overview of the main ones. Collateral in a loan Some cryptocurrency platforms, like Aave, allow liquidity providers to use their LP tokens as collateral to secure a crypto loan. Crypto lending has become a substantial component of DeFi, allowing borrowers to use their crypto as collateral and lenders to earn interest from their borrowers.  LP tokens used as collateral are still an emerging trend, and only a few platforms offer the service. Such a financial tool is highly risky, and if a certain collateral ratio is not kept, borrowers may lose their assets by being liquidated. Yield farming Yield farming is the practice of depositing LP tokens in a yield farm or compounder to earn rewards. Investors can move their tokens manually using different protocols and receive LP tokens when they deposit them on another platform.  Alternatively, they can use the liquidity pools of protocols like Aave or Yearn.finance, which help liquidity providers earn compounded interest more efficiently than humans. Such a system allows users to share expensive transaction fees and use different compound strategies according to the effort and time they want to dedicate to this type of investment. One example of a compound strategy is lending out cryptocurrency on a platform that pays interest, and then reinvesting that interest back into the original cryptocurrency to potentially increase returns. Another example is using an algorithmic trading strategy to automate buying and selling of assets to generate profits that can be reinvested. LP staking Liquidity providers can stake their LP tokens to gain extra profit. It occurs when users transfer their LP assets to an LP staking pool in exchange for rewards of new tokens, just like how the bank pays interest on a savings account. It also incentivizes tokenholders to provide liquidity. Early stakers in a project can earn a very high annual percentage yield (APY), which decreases as more LP tokens are staked in the pool.  Where to stake LP tokens  LP tokens function the same way as other tokens supported by a blockchain network. For example, tokens issued on an Ethereum-based platform like Uniswap is an ERC-20 token and can be staked like any other token of the same kind. 

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