Značka: DeFi

How low can Ethereum price drop versus Bitcoin amid the DeFi contagion?

Ethereum’s native token Ether (ETH) has declined by more than 35% against Bitcoin (BTC) since December 2021 with a potential to decline further in the coming months.ETH/BTC weekly price chart. Source: TradingViewETH/BTC dynamicsThe ETH/BTC pair’s bullish trends typically suggest an increasing risk appetite among crypto traders, where speculation is more focused on Ether’s future valuations versus keeping their capital long-term in BTC. Conversely, a bearish ETH/BTC cycle is typically accompanied by a plunge in altcoins and Ethereum’s decline in market share. As a result, traders seek safety in BTC, showcasing their risk-off sentiment within the crypto industry.Ethereum TVL wipe-outInterest in the Ethereum blockchain soared during the pandemic as developers started turning to it to create a wave of so-called decentralized finance projects, including peer-to-peer exchange and lending platforms.That resulted in a boom in the total value locked (TVL) inside the Ethereum blockchain ecosystem, rising from $465 million in March 2020 to as high as $159 billion in November 2021, up more than 34,000%, according to data from DeFi Llama.Ethereum TVL performance since 2019. Source: DeFi LlamaInterestingly, ETH/BTC surged 345% to 0.08, a 2021 peak, in the same period, given an increase in demand for transactions on the Ethereum blockchain. However, the pair has since dropped over 35% and was trading for 0.057 BTC on June 26.ETH/BTC’s drop coincides with a massive plunge in Ethereum TVL, from $159 billion in November 2021 to $48.81 billion in June 2022, led by a contagion fears in the DeFi industry.Also, institutions have withdrawn $458 million this year from Ethereum-based investment funds as of June 17, suggesting that interest in Ethereum’s DeFi boom has been waning.Bitcoin struggling but stronger than EtherBitcoin has faced smaller downsides compared to Ether in the ongoing bear market.BTC’s price has dropped nearly 70% to around $21,500 since November 2021, versus Ether’s 75% drop in the same period. Also, unlike Ethereum, Bitcoin-focused investment funds have seen inflows of $480 million year-to-date, showing that BTC’s drop has done little to curb its demand among institutional investors.Investment flows into/out of crypto funds by assets. Source: CoinSharesETH/BTC downside targetsCapital flows, coupled with an increasing distrust in the DeFi sector, could keep benefiting Bitcoin over Ethereum in 2022, resulting in more downside for ETH/BTC.Related: Swan Bitcoin CEO against crypto lenders: Users are way under-compensated for the riskFrom a technical perspective, the pair has been holding above a support confluence defined by a rising trendline, a Fibonacci retracement level at 0.048 BTC, and its 200-week exponential moving average (200-week EMA; the blue wave in the chart below) near 0.049 BTC.ETH/BTC weekly price chart. Source: TradingViewIn a rebound, ETH/BTC could test the 0.5 Fib line next near 0.062. Conversely, a decisive break below the support confluence could mean a decline toward the 0.786 Fib line at 0.027 in 2022, down more than 50% from today’s price.The ETH/BTC breakdown might coincide with an extended ETH/USD market decline, primarily due to the Federal Reserve’s quantitative tightenig that has recently pressured crypto prices lower against the U.S. dollar. $ETH historical Bear Markets correction depth:• -72% • -94%• -82% (and counting)Read more about #ETH Market Cycles here:https://t.co/5hIo7SC1n6#Crypto #Ethereum pic.twitter.com/7Ol0q3xM9G— Rekt Capital (@rektcapital) June 25, 2022Conversely, weaker economic data could prompt the Fed to cool down on its tightening spree. This could limit Ether and the other crypto assets’ downside bias in the dollar market, per Informa Global Markets.The firm noted:“Macroeconomic conditions need to improve and the Fed’s aggressive approach to monetary policy has to subside before crypto markets see a bottom.”But given Ethereum has never reclaimed its all-time high against Bitcoin since June 2017 despite a strong adoption rate, the ETH/BTC pair could remain under pressure with the 0.027-target in sight.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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Nonfungible airdrops: Could NFA become the next big acronym in the crypto space?

Airdrops have become the bread and butter of the crypto world — for good reason.They’re an indispensable marketing tool for up-and-coming projects that want to create a buzz around their ecosystems.Done right, distributing free tokens to the public can help elevate demand — and unlock big benefits for recipients. After all, if these altcoins end up being listed on major exchanges at a later date, their value could explode.Unfortunately though, downsides have started to emerge. These campaigns aren’t just reaching enthusiasts who passionately believe in what a project has to offer, but “airdrop hunters” who are merely scouring for ways to turn a quick profit.Airdrop hunters typically want to sell off the tokens they’ve received for free — as soon as they can. And for cryptocurrency projects at their very early stages, this can be bad news — undermining carefully cultivated tokenomics and causing the value of a coin to fall.The current bear market has also unearthed another problem. Many projects are now postponing the schedules for unlocking new tokens — waiting until the economic climate improves slightly. And while this is usually in the best interests of a project and their investors in the long run, it can be disappointing news for those who won tokens in an airdrop. Why? Because they’re no longer able to freely trade or liquidate the digital assets they’re entitled to.So… what’s the answer? Can airdrops be revitalized, eliminating some of the downsides that have emerged in recent years? And is there a way for hodlers to benefit — even if they haven’t got their hands on tokens just yet?How NFTs can shake up airdropsRight now, projects are attempting to walk this tightrope between gaining publicity and engaging in marketing strategies that could damage their ecosystems. How can you get new users to follow a Telegram or Twitter account in order to be eligible for an airdrop, and incentivize them to stay involved with the community long term?Nonfungible airdrops — otherwise known as NFAs — could be the answer here. And, as you might expect, they incorporate some of the technology relied upon by NFTs to generate a “win-win” situation for projects and airdrop winners alike.NFAs aim to represent the true value of an airdrop reward when an initial DEX offering (otherwise known as an IDO) takes place. This is achieved through a model that’s not too dissimilar to a futures contract — an agreement to buy or sell assets that will be activated at a future date.The only difference is that the project owner releasing the NFA makes a promise to deliver the token or other digital assets on a future launch date. And as each airdrop winner ends up receiving different rewards under this model, there’s a one-of-a-kind gift that’s nonfungible.In this scenario, the nonfungible airdrop will boast a mechanism that allows holders to claim their tokens when a project launches — in effect, capturing the value of future tokens. Alternatively, it is possible to achieve instant returns by trading this NFA on a peer-to-peer marketplace. What makes this concept so compelling is that those who opt for an immediate transaction will miss out on perks in the long run.Nonfungible airdrops can be equipped with exclusive avatars and special benefits, such as discounts and free trials on the goods and services offered by a crypto project. Holders could also be granted exclusive early access to future features — and better still, their tokens will be waiting for them when they launch.Have your cake and eat itArken Finance says it is the mastermind of the world’s first nonfungible airdrop, a concept that has the potential to shake up the DeFi landscape immeasurably.The DeFi trading portal can be found across eight networks — and its goal is to arm investors with a greater number of trading tools, all while reducing friction.Arken had commenced an airdrop campaign back in November 2021, but this was postponed as the markets began to cool. Now, it’s pioneered NFAs as a way of igniting excitement about its future plans without falling into the common pitfalls of airdrops that have surfaced.Now, 2,000 winners of its trading competition have been rewarded with their very own NFA — each storing a different amount of tokens, and each with different benefits. They’ll be able to reclaim this cryptocurrency at a later date, but there’s plenty of exclusive advantages to keep them occupied in the meantime.”The team strongly believes in this application and is confident that this technology can be marketed to DeFi project owners in the future,” Arken said in a recent blog post.And while enthusiasts may have missed out on the chance to own one of the first-ever NFAs during the initial airdrop, the project says subsequent rounds are planned in the future.Some of the perks include an exemption from fees for the first 24 hours of a trading competition — and NFA holders will have their own special tier in the contest. On this mini-competitive track, they’ll subsequently be entitled to separate rewards. In addition, exclusive insights and fast-lane customer support is provided through a VIP Discord channel, and owners will have a front-row seat to the premium features that Arken Finance has in the pipeline.It’s a bold experiment, and one that could unleash new levels of loyalty in crypto projects that are getting off the ground for the first time. And for those who win airdrops, it delivers far more than tokens. Not only will they have a status symbol in the form of distinctive avatars that few members of the community own, but they’ll get an enhanced experience through VIP channels and front-of-the-line customer support. For those who really believe in a project’s potential, that’s gold dust in itself.There’s excitement as Arken Finance’s cutting-edge experiment continues — and the project’s hoping that “NFA” will be the next acronym to become prolific in cryptocurrency circles.Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you with all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor can this article be considered as investment advice.

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DeFi summer 3.0? Uniswap overtakes Ethereum on fees, DeFi outperforms

Decentralized exchange (DEX) Uniswap has overtaken its host blockchain Ethereum in terms of fees paid over a seven-day rolling average.The surge appears part of a recent spate of high demand for DeFi amid the current bear market. Decentralized finance (DeFi) platforms such as AAVE and Synthetix have seen surges in fees paid over the past seven days, while their native tokens, and others such as Compound (COMP) have also boomed in price too.According to data from Crypto Fees, traders on Uniswap accounted for an average daily total of $4.87 million worth of fees between June 15 and June 21, overtaking the average fees from Ethereum users which accounted for $4.58 million. Uniswap’s most advanced V3 protocol (based on the Ethereum mainnet) accounted for the lion’s share of the total fees with $4.4 million, while the V2 variant also contributed a notable $336,556. During this period, Ethereum’s total fees only outpaced Uniswap’s on two days out of the seven. In terms of a peak day of fees generated, Uniswap topped out at $8.36 million on June 15, beating out Ethereum on the same day at $7.99 million. Top fees paid: Crypto Fees Uniswap enables peer-to-peer (P2P) swaps of Ethereum-based tokens without having a central authority to facilitate trades. This is achieved by automated smart contracts. Under Uniswap’s fee structure, fees are paid by traders to liquidity providers who receive 100% of the fees on the DEX.Related: Uniswap breaks $1T in volume — but has only been used by 3.9M addressesConsidering Ethereum is the blockchain home to the majority of DeFi, and is known for its expensive fee structure, a DEX such as Uniswap beating out the blockchain in fees over a week is notable. According to data from CoinGecko, UNI has pumped 17.4% over the past seven days to sit at $5.18 at the time of writing. Recent acquisitions of the NFT marketplace aggregator Genie and the appointment of the former president of the New York Stock Exchange Stacey Cunningham as an advisor at Uniswap Labs may have contributed to this. DeFi surgeUniswap is not the only platform to see a surge in its fees and token price of late, as data is also showing strong investor demand for several DeFi platforms despite the current bear market. Lending protocol AAVE and synthetic derivatives trading platform Synthetix in particular are ranked third and fifth in terms of average fees paid over the past seven days with $981,883 and $600,214 apiece. Much like Uniswap, AAVE saw a surge of fees on June 15, as its total increased by 69% to $1.44 million. Its native token AAVE has also pumped 22% since then. Sythentix’s rise has been the most notable. The platform saw a whopping 928% increase in fees paid between June 11 and June 13 as the figure rose to $843,297. The total fees then dropped to roughly $400,000 by June 17, before surging another 150% to roughly $1 million on June 19. The boom can also be seen by observing Synthetix’s native asset SNX, the price of which has gained 105% since June 19 to sit at $3.08 at the time of writing. A key reason behind this appears to be the Synthetix Improvement Proposal 120 that went live last week that enables users to “atomically exchange assets without fee reclamation” therefore increasing the speed of trading. Bucking this trend however, fees on lending platform Compound have been declining since April, and generated a mere seven day rolling average of $11,753 over the past week, though its native token COMP has increased 16.7% within that time frame to sit at $40.50.

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This is what's standing in the way of DeFi's 'NFTification'

Ask someone what an NFT is, and they’ll instinctively think of digital art — the CryptoPunks, Bored Apes and Ether Rocks that have sold for eye-watering sums.In some circles, nonfungible tokens have been dismissed as a vehicle for speculation, with critics lamenting that demand for such assets is fueled by greed.But this argument doesn’t give us the full picture. We’re barely scratching the surface of what these one-of-a-kind tokens can achieve — and new use cases are continually emerging.The music industry is tentatively exploring what NFTs have to offer. Live Nation, one of the world’s biggest entertainment companies, has started offering digital versions of ticket stubs — giving fans a virtual memento of the gigs they’ve attended. Other platforms are allowing consumers to invest in new music and receive a share of the royalties. TV shows and films are being funded through NFTs too — and despite a backlash from players, gaming brands are also dabbling in this technology.NFTs also have the potential to improve existing crypto services, with DeFi being one of them. What if this technology could be used to unlock access to specific permissioned services… and could we see popular crypto collectibles be widely used as collateral? While the “NFTification” of the decentralized sector is seen as inevitable in some crypto circles, there are some hurdles that need to be overcome. Let’s explain why.NFTs cost a mintInevitably, any discussion of what’s holding NFTs from playing a bigger role in the DeFi ecosystem needs to begin with the cost of minting such tokens.Even on a robust Layer 2 network, transaction fees mean it’s often uneconomical to create, distribute and trade NFTs. This particularly explains why these crypto collectibles are so exorbitantly priced — not to mention why new use cases for nonfungible tokens are only being explored at a glacial pace.As traders impatiently wait for Ethereum’s Proof-of-Stake network to launch, this blockchain has become unaffordable for many everyday users. While faster, cheaper and more scalable rivals have emerged in recent years, some have been blighted by repeated outages — bringing their reliability into question.But what if users could be offered a completely gas-free experience while transacting? Could this be the silver bullet that attracts tens or hundreds of millions of users to the space — people who would be drawn in by the development this would encourage?Such an approach would be beneficial for NFTs and the DeFi sector alike, giving crypto enthusiasts the freedom to transact how they wish without worrying about the cost. But from an infrastructure perspective, there are other issues that need to be taken into account.Innovating in DeFiRight now, high gas fees mean trading and farming is financially impractical for smaller users — while slow bridges that connect the Ethereum mainnet to Layer 2s cause frustration. A lack of stickiness has also emerged in the DeFi space — with users frequently moving from platform to platform in search of the best short-term opportunities.Of course, an even bigger barrier involves getting people to see what decentralized protocols and automated market makers (AMMs) have to offer. A poor user experience — and more sophisticated features on centralized platforms — often give investors little incentive to make the jump into DeFi. The downside here is consumers end up relinquishing control over their own crypto as a result.But it doesn’t have to be this way — and one team says it has built the first NFT-powered AMM that has been designed “from the ground up to solve a series of critical problems for DeFi.” A gem of a productRuby.Exchange is building its infrastructure on SKALE, which is described as a powerful, multi-chain solution for Ethereum. SKALE’s chains have zero gas costs — and boast a fast, decentralized and secure bridge to the mainnet where transfers in either direction can take minutes, rather than hours or even days.And while the value of NFTs can be uncertain, with limited ways they can be used, Ruby offers gemstones — “beautiful, generative artworks that drive loyalty by embodying real utility as well as artistic value.” These assets have a starring role within its AMM. This exchange says it delivers a feature rich and gamified user experience where NFTs are minted for user profiles, as vouchers for trading fee rebates, and to ensure customers can access the premium features they’ve come to expect — native charting and advanced analytics among them. Yield farming boosts are another use case.What’s more, a gamified trading and farming experience delivers that elusive “stickiness” that DeFi protocols currently lack — rewarding long-term engagement and benefitting all users by helping prevent capital from migrating elsewhere, which affects liquidity.Looking ahead, new classes of NFT gemstones are going to be created — and as Ruby’s analytics and liquidity provider management dashboard is established, ownership of nonfungible tokens will be key to unlocking access.NFTs and DeFi have shown so much promise in their early days, transforming the worlds of art and finance. Ruby.Exchange is now determined to show how powerful the “NFTification” of decentralized finance can be.Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you with all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor can this article be considered as investment advice.

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Avalanche (AVAX) price drops 45% in a month and data points to further downside

Avalanche (AVAX) is down 45% in 30 days and in the same time the cryptocurrencies’ total market capitalization shrank by 29%. Despite the recent downturn, this decentralized application (DApp) platform remains a top contender in the layer1 and layer2 race and it ranks high in terms of smart contract deposits and active addresses. Yet, the lackluster token price is still causing investors to rethink whether the network remains a “serious” competitor.AVAX token/USD at FTX. Source: TradingViewThe brutal sell-off on risk assets caused AVAX to test the $14.80 support multiple times, while the current market capitalization stands at $4.8 billion. It’s important to also note that the network’s total value locked (TVL) holds an impressive $3.2 billion.As a comparison, Solana (SOL) offers incredibly low network fees and holds a $2.1 billion TVL. Yet, SOL token’s market cap stands at $12.9 billion, which is almost 3 times larger than Avalanche’s valuation at the $14.8 price level.The TVL indicator is extremely relevant because it measures the deposits on the network’s smart contracts. If we use Polygon (MATIC), an Ethereum layer-2 solution, as a proxy, the network holds a $1.8 billion TVL while the token’s market capitalization stands at $3.5 billion.In short, Avalanche looks heavily discounted considering how similar networks’ market capitalization vastly exceed their respective TVL.Total value locked increased, but the number of users declinedAvalanche’s primary decentralized application metric strengthened in the last 60 days as the network’s TVL jumped to 184 million AVAX tokens. This suggests that even as AVAX price crashed, investors did not withdraw tokens from its decentralized applications. Avalanche network total value locked, AVAX. Source: DefiLlamaIn terms of AVAX tokens, the network’s TVL has effectively grown by 35% in two months. As a comparison, Ethereum’s TVL increased by 10% in Ether terms, while BNB Chain faced a 14% reduction in the same period. To confirm whether the TVL increase in Avalanche is encouraging, traders should analyze DApp usage metrics. Some applications, such as games and marketplaces, do not require large deposits, so the metric is irrelevant in those cases.Avalanche DApps 30-day data. Source: DappRadarAs shown by DappRadar, on June 21, the number of Avalanche network addresses interacting with decentralized applications declined by 42% versus the previous month. In comparison, the BNB Chain faced a 16% user decrease, while Polygon declined by 29%.Price follows fundamentals, which have gone downEven though Avalanche’s TVL has outperformed competing Dapp networks, the decrease in network use is concerning. For instance, Trader Joe’s 93,130 active addresses are smaller than Polygon’s leading DeFi application, QuickSwap, which holds 161,040 active users.The above data suggest Avalanche is in troubled waters and might explain why the AVAX price plunged 45% in 30 days. Investors will likely remain skeptical of the $14.80 support until the network usage metrics improve, especially the number of active addresses in DeFi.The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

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Ethereum risks another 60% drop after breaking below $1K to 18-month lows

The price of Ethereum’s native token, Ether (ETH), careened below $1,000 on June 18 as the ongoing sell-off in the crypto market continued despite the weekend.Ether reached $975, its lowest level since January 2021, losing 80% of its value from its record high in November 2021. The decline appeared amid concerns about the Federal Reserve’s 75 basis points rate hike, a move that pushed both cryptocurrencies and stocks into a strong bear market.”The Federal Reserve has barely started raising rates, and for the record, they haven’t sold anything on their balance sheet either,” noted Nick, an analyst at data resource Ecoinometrics, warnings that “there is bound to be more downside coming.”ETH/USD weekly price chart. Source: TradingViewEthereum’s implosion continuesInvestors and traders have been anxiously watching Ether’s price in recent days, fearing a decisive breakdown below $1,000 would trigger the forced liquidations of massively leveraged bets. In turn, that would put more downside pressure on Ethereum.The fears appear due to Babel Finance and Celsius Network, a pair of crypto lending platforms that halted withdrawals citing market volatility. They intensified further after Three Arrow Capital, a crypto hedge fund managing $10 billion worth of assets as of May, failed to shore up its collateral to cover pungent bets. This came less than a month after Terra, a $40 billion “algorithmic stablecoin” project, collapsed.These events have coincided with a massive capital withdrawal from Ethereum’s blockchain ecosystem. The total value locked (TLV) unwind occurred in two parts. First, Ethereum’s TVL across DeFi projects fell by $94 billion after the Terra debacle in May and then by another $30 billion by mid-June.Ethereum total value locked in DeFi. Source: Glassnode”The deleveraging event that is underway is observably painful, and is akin to a form of mini-financial crisis,” noted CheckMate and CryptoVizArt, a pair of analysts at Glassnode, an on-chain analytics platform, adding:”However, with this pain comes the opportunity to flush excessive out leverage, and allow for a healthier rebuild on the other side.”How low can ETH price go?Fed’s hawkish policies and the ongoing DeFi market implosion suggest extended bearish moves in the Ether market.From a technical perspective, ETH’s price must regain $1,000 as its psychological support, which, if broken to the downside, could have the token eye the $830 as its next target. The same level served as resistance in February 2018, which preceded a 90% decline to around $80 in December 2018.ETH/USD weekly price chart. Source: TradingViewMeanwhile, as Cointelegraph covered earlier, ETH/USD can fall to as low as $420 if Ether’s correction turns out to be anything like its 2018 bear cycle when the drawdown reached over 90%.Related: 72 of the top 100 coins have fallen 90% or more: Here are the holdoutsInterestingly, the $420-downside target was instrumental as support in April-July 2018 and resistance in August-September 2020.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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High-profile BAYC collector denies allegations of wrongdoing brought by DeFi detective

On Thursday, ZachXBT, a cyber detective in the decentralized finance, or DeFi, realm, accused prominent Taiwanese musician and blockchain personality Jeff Huang, also known as Machi Big Brother, of misconduct in 10 different cryptocurrency projects. Machi Big Brother is known outside of Taiwan as an avid collector of Bored Ape Yacht Club nonfungible tokens (NFTs) and possessed a collection worth an estimated $8.26 million at the peak of the crypto bull market last year. This is misinformation. If he wasn’t anon I’d sue him for defamation.— Machi Big Brother (@machibigbrother) June 16, 2022Though numerous, the main spearhead of the allegations was directed toward Huang’s alleged involvement in the whereabouts of 22,000 Ether (ETH) raised during the initial coin offering for tokens of Formosa Financial (FMF), a Taiwanese treasury management platform built for blockchain companies, in 2018.After the ICO, FMF tokens quickly plunged in price, partly due to the severe cryptocurrency bear market at the time. Jeff Huang had served as an advisor for the company before eventually relinquishing his role. In 2019, Taiwanese news outlet Block Tempo reported that Formosa Financial merged with the Philippines-based crypto exchange CEZEX and ICO crowdfund syndicate Katalyse.io. As told by ZachXBT, on June 22, 2018, just three weeks after the FMF ICO, two withdraws of 11,000 ETH were made out of Formosa Financial’s treasury wallet. At the same time, multiple executives at Formosa Financial allegedly authorized a share buyback of the company.There is significant uncertainty regarding the outflows of the said 22,000 ETH. ZachXBT alleged that the funds went first to George Hsieh, Formosa Financial’s former CEO, and Jeff Huang, and then to wallet addresses allegedly linked to their associates. However, the DeFi detective did not back up their claims with evidence as to how they came to associate the said addresses with Jeff and George.On-chain data can only confirm that two withdrawals of 11,000 ETH took place from what appears to be Formosa Financial treasury on June 22, 2018. To establish a connection between a blockchain transaction and a real-world recipient, either additional know-your-customer (KYC) information or that of doxing would be required. For example, such a link can be established by comparing the recipient’s address with that of a Twitter Verified (where I.D. confirmation is generally required) user’s profile displaying the said address. However, such evidence was not present in ZachXBT’s analysis. Huang, whose public wallet came online only about two years ago, has denounced ZachXBT’s allegations as misinformation. Cointelegraph was not able to independently verify Huang’s alleged role in other projects as the DeFI detective’s report did not present the needed KYC information linking wallet addresses to Huang. However, Huang did give the following remarks regarding Mithril and Cream Finance — both of which are projects mentioned in ZachXBT’s report — in an interview with local news outlet Heaven Raven earlier this year. The excerpt was translated by Cointelegraph: “In 2018, I started out with [decentralized social media platform] Mithril. We even rolled out community mining, encouraging users to upload pictures or videos of their mining rigs. But it was too ahead of the times, and additionally, we were ignorant about many details. As a result, the token price collapsed. It was a pity, but we gained much experience and then moved on to Cream Finance.”Cream Finance is a major DeFi lending platform that suffered a series of flash loan exploits last year. It has vowed to repay users with protocol fees until their lost principal have been recouped. Regarding his involvement in the project, Huang said: “At the time, we lost nearly $140 million during the exploit. But afterwards, we tried to reimburse the clients. And now Cream is steadily profitable. In November 2020, I passed on control of Cream Finance to Andre Cronje. After that, due to the coronavrius pandemic, I mostly stayed at home and began focusing on nonfungible tokens.” Jeff Huang outright denied the allegations against him via a Twitter post on Thursday stating, “This is misinformation. If he wasn’t anon, I’d sue him for defamation.”

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SOL price trending toward yearly low as Solana TVL drops $870M in three days

Solana (SOL) tumbled on June 16 amid a broader retreat across the top cryptocurrencies, led by the Federal Reserve’s 0.75% interest rate hike a day before.Solana price rebound fizzlesNotably, SOL/USD plunged nearly 17% to $30 a token, wiping almost all the gains from the day before. The SOL price volatility liquidated almost $10 million worth of contracts in the past 24 hours across multiple crypto exchanges, data from Coinglass shows. SOL liquidation record since May 17. Source: Coinglass The latest declines come as an extension to SOL’s broader correction, where it dropped by more than 90% after peaking out near $267 in November 2021. SOL also fell to its lowest level since July 2021 near $25.In addition, a higher interest rate environment and the collapse of high-profile crypto projects like Terra have strengthened SOL’s downside prospects. SOL paints “ascending triangle”Solana’s pullback move on June 16 began after testing a horizontal trendline resistance near $34 that constitutes what appears to be an “ascending triangle” pattern.Ascending triangles are continuation patterns, i.e., they tend to send the price in the direction of their previous trend. As a rule, breaking out of a triangle pattern in a bearish market, for example, sends the price down by as much as the structure’s maximum height.If SOL breaks below its ascending triangle’s lower trendline then the bearish profit target will come below $22.50, as shown in the chart below.SOL/USD four-hour price chart featuring “ascending triangle” pattern. Source: TradingViewSolana’s downside target is about 25% below today’s price and could be achieved by June. Nonetheless, if SOL bounces after testing the triangle’s lower trendline as support, it would eye the $34-36 range as its interim upside target.Massive SOL exitOver 27 million Solana tokens have exited its smart contract ecosystem since June 13. The total value locked (TVL) inside Solana smart contracts dropped to 74.65 million SOL (~$2.25 billion) on June 16, down 27% in the last three days, according to data tracked by DeFi Llama. That amounts to nearly $840 million of withdrawals from the ninth-largest blockchain ecosystem by market cap.Solana TVL performance since April 2021. Source: DeFi LlamaSolend, a lending platform functioning atop the Solana ledger, witnessed a 26.5% decline in its TVL in the last three days and was holding 9.66 million SOL (~$290 million) as of June 16. Nevertheless, it remains the leading platform by TVL within the Solana ecosystem.Related: Liquidity provider asks platforms to freeze 3AC funds to recover assets after litigationThe outflows indicate that depositors do not want to keep their SOL locked in DeFi protocols, a sentiment common across the sector after Terra, an “algorithmic stablecoin” project, collapsed last month.Contagion, another yield ponzi going down. Seriously get your coins off anything like Celsius and BlockFi before they aren’t your coins anymore. LFG, 3AC, Celcius etc all spread risk to each other and you pay the price for it https://t.co/cemFCvAeAz— Pentoshi Powell Jr (@Pentosh1) June 16, 2022Therefore, Solana’s path of least resistance remains skewed to the downside in the near term, particularly with no improvement in terms of macro and fundamentals. 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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NEXO price drops 40% in three days on rumors of ties to 'insolvent' crypto fund

The price of Nexo (NEXO) continued to fall on June 15 as crypto lending firms continue to be shaken by the falling cryptocurrency market.Meanwhile, Nexo has denied rumors of exposure to Three Arrows Capital (3AC), a Dubai-based crypto fund facing insolvency risks.NEXO price suffers on DeFi contagion fears NEXO, which serves as a security token at a cryptocurrency lending platform of the same name, fell nearly 25% to $0.61 a unit, its lowest price reading since January 2021. The massive intraday decline came as a part of a broader downside move this week, which stretched NEXO’s losses to 40%.NEXO/USDT weekly price chart. Source: TradingViewAn ongoing contagion in the crypto lending sector contributed to NEXO’s underperformance. Traders fear that most DeFi/CeFi firms, which offer high yields to clients on their cryptocurrency deposits, will default on their debts due to the wipeout of nearly $1.5 trillion from the crypto market in 2022. The concerns continue to mount after the collapse of Terra, a $40 billion algorithmic stablecoin project, in May.A month later, Celsius Network, which offers clients up to 18% yields, paused withdrawals due to “extreme market conditions.” Its clients have pulled almost half of their assets out of the platform since October 2021, thus leaving it about $12 billion as of May 17 to meet debt obligations.I am definitely rooting for Celsius not to get liquidated. That is customer money. And fuck the funds who are hunting this stop loss. I hope they get rekt. #bitcoin— Lark Davis (@TheCryptoLark) June 14, 2022Meanwhile, 3AC, a crypto hedge fund, has witnessed liquidations of at least $400 million. In addition, on-chain data reveals that the firm may also have a minimum debt of $183 million against a collateral position of $235 million (derived in Staked Ether).The address uses USDT/USDC to repay the debt and withdraws ETH, and then converts ETH to USDT/USDC through “sinofate.eth” and repays it, and so on. In almost 24 hours, the address has sold about 50kETH. https://t.co/TUzqXBXBwF— Wu Blockchain (@WuBlockchain) June 15, 2022

The fund could transfer the economic risks to its lenders if it becomes insolvent.”The lenders will bear the PnL [profit and loss] difference between how much they are owed versus what they get in liquidating their collateral,” noted Degentrading, a market commentator known for highlighting the Celsius Network’s liquidation issues.He added:”That means defaults will cause SIGNIFICANT EQUITY erosion […] Not all lenders are made equal. Celsius is the worst. It has gone under. Nexo, I don’t know. BlockFi is pretty bad as well.”However, Nexo says it currently has no exposure to 3AC despite partnering with the fund over a nonfungible token (NFT) lending product in December 2021. The firm asserts that the partnership with 3AC did not take off.All Nexo has ever done with Three Arrows Capital is sign a partnership with their NFT fund, but it did not take off and we currently have $0 business and exposure with them.— Nexo (@Nexo) June 15, 2022

What’s next for the NEXO token?Nexo has 100% liquidity to meet its $4.96 billion worth of debt obligations, according to U.S.-based audit firm Armanino. That raises the firm’s potential to avoid a liquidity crisis in the event of a rising withdrawal rate, unlike Celsius.Nonetheless, NEXO price treads ahead under persistent bearish risks, primarily due to the crypto market’s dire state in a high interest rate environment. The NEXO/USD pair now eyes the $0.58-$0.69 range as its interim support due to its historical significance from December 2020-January 2021.NEXO/USD weekly price chart. Source: TradingViewA rebound from the $0.58-0.69 range could have NEXO bulls eye $0.883 as their interim upside target. This level was instrumental as support during the early-May price crash; it now coincides with the 0.786 Fibonacci retracement graph drawn from the $0.11-swing low to the $3.71-swing high.Related: Is the bottom in? Raoul Pal, Scaramucci load up, Novogratz and Hayes weigh inConversely, a decline below the $0.58-$0.69 range could have NEXO watch December 2020’s support level near $0.43, down around 35% from today’s price.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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Ethereum price falls below $1.1K and data suggests the bottom is still a ways away

Ether (ETH) price nosedived below $1,100 in the early hours of June 14 to prices not seen since January 2021. The downside move marks a 78% correction since the $4,870 all-time high on Nov. 10, 2021.More importantly, Ether has underperformed Bitcoin (BTC) by 33% between May 10 and June 14, 2022, and the last time a similar event happened was mid-2021.ETH/BTC price at Binance, 2021. Source: TradingViewEven though Bitcoin oscillated in a narrow range two weeks before the 0.082 ETH/BTC peak, this period marked the “DeFi summer” peak when Ethereum’s total value locked (TVL) catapulted to $93 billion from $42 billion two months earlier.What’s behind Ether’s 2021 underperformance?Before jumping to conclusions, a broader set of data is needed to understand what led to the 31% correction in the ETH/BTC price in 2021. Looking at the number of active addresses is a good place to start.Ethereum network daily active addresses, 7-day average. Source: CoinMetricsData shows steady growth in active addresses, which increased from 595,620 in mid-March to 857,520 in mid-May. So, not only did the TVL growth take investors by surprise, but so did the number of users.The 31% Ether underperformance versus Bitcoin back in June 2021 reflected a cool-off period after unprecedented growth in the Ethereum ecosystem. The consequence for Ether’s price was devastating and a 56% correction followed that “DeFi summer.”Ether/USD price at Coinbase, 2021. Source: TradingViewOne must compare recent data to understand whether Ether is heading to a similar outcome. In that sense, those who waited for the 31% miss versus Bitcoin’s price bought the altcoin at a cycle low near $1,800 on June 27, 2021 and the price increased 83% in 50 days.Is Ether flashing a buy signal right now?This time, there is no DeFi Summer and before this year’s 33% negative performance versus Bitcoin, the active address indicator was already slightly bearish.Ethereum network daily active addresses, 7-day average. Source: CoinMetricsBy May 10, 2022, Ethereum had 563,160 active addresses, in the lower range from the past couple of months. This is the exact opposite of the mid-2021 movement that occurred as Ether price accelerated its losses in BTC terms.One might still think that despite a relatively flat number of users, the Ethereum network had been growing by presenting a higher TVL.Ethereum network total value locked, USD. Source: DefillamaData shows that on May 10, 2022, the Ethereum network TVL held $87 billion in deposits, down from $102 billion a month prior. Therefore, there is no correlation between the mid-2021 cool-off after “DeFi summer” and the current 33% Ether price downturn versus BTC.These metrics show no evidence of similarity between the two periods, but $1,200 might as well be a cycle low, and this will depend on other factors apart from the network’s use. Considering how weak active addresses and TVL data were before the recent price correction, investors should be extra careful when trying to predict a market bottom.The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

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Crypto crash wreaking havoc on DeFi protocols, CEXs

On Monday, a heavy cryptocurrency sell-off in the markets caused significant ripples for projects and entities alike. On popular decentralized finance, or DeFi, lending protocol Aave, utilization rates have fallen across nearly all stablecoin borrowings. Most notably, borrowings for Binance USD (BUSD) now stand at a mere 30% compared to a high of 80% back in May. Utilization rate is the ratio of borrowed funds to deposited funds. Since borrowers are required to post digital asset collateral before taking out a loan on Aave, users are likely withdrawing en mass in light of today’s sell-off to prevent liquidation. Data from DeFi Llama indicates that Aave’s total value locked has fallen from $33.51 billion last October to $8.11 billion.According to CryptoRank Platform, TVL in overall DeFi protocols have fallen by 55% since the end of April, driven in part by capital flight and a decrease in the value of digital assets. Currently, there is $115.7 billion worth of funds remaining, with $72 billion of them located on the Ethereum (ETH) blockchain. It represents a fraction of the $303.9 billion in peak TVL witnessed in November 2021. Over the weekend, cryptocurrency exchange Crypto.com announced that it was laying off 260, or 5% of its corporate workforce, citing difficult market conditions. Just last month, the company also stated that it was significantly cutting back rewards for its popular crypto-backed debit card. Annual cash-back APYs for spending have reportedly been scaled back from 2% to 8% to just 0% to 2% for cardholders with unstaked assets. Monday morning, in an emotional message posted by founders, BlockFi also announced that it was laying off 20% of its 850-strong staff. The firm cites the need to achieve profitability goals for the long haul in making the decision. Similarly, cryptocurrency exchange Coinbase has decided to extend a hiring freeze and rescinded job offers to hundreds of new hires. Though Brian Armstrong, its CEO, has said that “funds are safe” amidst bankruptcy protection fears surrounding the exchange. Other major crypto firms are reportedly cutting 10% of their staff amidst the ongoing bear market. 

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