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Blockchain Application in the Gambling and Sports-betting Industry

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Human beings have an inner instinct of always going for growth and success. Thus, in our everyday life, we are looking for ways to complete our tasks in the cheapest, fastest and most comfortable way possible. It for this reason the gambling industry is growing at an unfathomable rate.

In the year 2018, the global gambling industry recorded a growth of 4.1 (CAGR) reaching 449.3 billion compared to 2014. Further, market size estimates indicate this growth will continue to soar and will net $565.4 billion in revenues by the year 2022 which is a CAGR of 5.9 per cent.

Factors leading to this Growth

Several factors are likely to drive this expected growth in the gambling industry. Among these include; rapid urbanization, an expansion of the experience economy, growth of emerging markets and rise of mobile gambling. In fact, in coming years this growth will further be fuelled by increasing use of social media, countries looking into legalizing gambling, an attractive source of revenue for governments which they can no longer ignore. Otherwise, the lack of government intervention will only lead to the proliferation of underground gambling, which is worse due to certain risks. These uncertainties include losing your money either once authorities pounce on your illegal gambling or the risk of losing your money through the gambling company colluding against you. Away from that, perceived global economic growth and changing consumer gambling habits are other factors likely to drive future growth of this lucrative industry.

A Close Examination of the Gambling Market and its Future

The global gambling market is segmented into three different types and these include sports betting, lotteries, and casinos. Sports betting is the fastest-growing segment with a CAGR of 6.9 per cent while the lotteries in the period ending 2018 were the biggest gambling market with a revenue share of $207.3 billion which is 46.1 per cent of the entire global gambling market size. Each of these 3 main categories is further segmented into either offline, online and virtual reality (VR) which is categorization depending on the sales channel.

Going forward, online gambling is poised to be the leading segment in the gambling industry with a market size forecast of $102.97 billion by the year 2025. In fact, this growth is forecasted to happen between 2019 and 2025 with a CAGR of 11.5 per cent. Factors driving the growth of this segment include a surge in adoption and use of smartphones as well as improved access with ease to casino gaming platforms. Precisely, an increase in Internet penetration plus the availability of the affordable mobile application for betting will continue to spur the growth.

Globally, Asia-Pacific is the largest market with 32.7 per cent of the gambling market as of 2018. Regions closely following are America and Western Europe. An interesting market trend, Africa and Asia-Pacific will be the fastest-growing regions for the global gambling market at 7.7 and 7.9 respectively. South America and Eastern Europe will grow at CAGR of 6.13 % and 6.12 % respectively.

Interesting Fact: “Africa and Asia-Pacific will be the fastest-growing regions for the global gambling market at 7.7 and 7.9 respectively

Blockchain to Play a Key Role in the Gambling and Sports Betting industry

Gambling and sports betting especially those sold by online channels will continue to flourish as aforementioned. However, the gambling industry has its own set of bottlenecks, which could hinder or stall the anticipated growth. Some of these challenges include:

  1. Lack of Transparency and Trust
  2. Fraud
  3. Infective Payment Systems
  4. Lack of personal privacy
  5. Inaccessibility
  6. Huge costs
  7. Centralization of Prediction Markets

Blockchain technology is witnessing its application in almost all industries at a high growth rate. The technology has been successful in its application in the cryptocurrency domain owing to its important features including immutability, decentralization, transparency and improving data security and safety. Likewise, these features can or already being applied to transform the gambling industry. More so, blockchain technology is proving to be the silver bullet solving challenges listed above encountered in the gambling industry.

  1. Improving Transparency and Trust

I bet we all know of the statement “the house always wins” meaning online gambling users will lose in one way or another. Even if it means the house using tricks and scams to make more money. Online gambling businesses earn money by having players lose more often. Users are inclined to believe these companies do have a special switch that will occasionally turn the odds against their favour. Consequently, knowledge of these vices from casinos by players has led to many keeping away from gambling. As a result, online gambling sites end up losing money.

Online gambling companies using blockchain technology are harnessing this technology to bridge the gap initially eminent between users and operators. For instance, using blockchain smart contracts aid verification of records and this is available via a shared ledger. Hence, it is not possible to manipulate data the last minute to favour the house against the players, thus, increased transparency.

  1. Reducing Fraud

Online fraud is a major concern for most gambling sites users. Moreover, it accounts for significant loses in the industry. One possible way of executing fraud is a player acting smart and decide to defraud an operator when withdrawing or even depositing money into the casino. Other possible existence of fraud in the gambling includes fraudsters who hack the gambling site’s system by accessing it through the servers’ back door. Worse still a lot of online gambling sites will require personal information of users and this may be an incentive for fraudsters to hack such systems to access the system and put their hands on such important data which online casinos cannot guarantee of its security.

Blockchain technology is best suited to solve this challenge for the industry through the implementation of high-level encryption used to secure transactions and data on gambling platforms. Further, having the blockchain’s distributed ledger renders it impossible to manipulate anything even by hackers in the system. One such platform with immense levels of encryption and has been successful in securing user’s funds and data is Playbetr.com with its winning automatically calculated and sent to winning users transparently and securely thanks to smart contracts.

  1. Effective Payment Systems

Traditional banking systems are a major hindrance to the flourishing of online gambling and sports betting platforms. This is because it is possible to withdraw money into a bank account or on a credit card only to have the bank confiscate or block the transaction. More worrisome is the fact a player using traditional money withdrawal options such as PayPal or banks they may have to part with a huge commission or unexpected fees. Again this may not be a guarantee that still the financial service providers will ensure processing of player’s payments. As a result, users have been left to wait for days or encounter other payment delays with no explanation given by the banks.

Gambling and sports betting platforms using blockchain technology such as Playbetr.com have the option of issuing own native cryptocurrency that will be used within their ecosystem. In fact, the Ethereum casino and sportsbook uses its native gaming coin known as Playbetr Coin (a stable coin pegged to the USD). Also, the online gambling platform supports other cryptocurrencies for deposit and withdrawals including Ether (ETH), Bitcoin (BTC), Litecoin (LTC) among others. Thus, allowing fast processing of payments when compared to the use of fiat money or traditional banking systems.

  1. Introduction of Anonymity

Conventional gambling companies are required by law depending on the country of operation to comply with certain regulations that may impede the realization of anonymity for players. For instance, it is common when creating an account and further during verification to face the challenge of having to supply numerous documents. Not only does this process make the whole exercise of creating account lengthy but also time-consuming this limiting number of players.

Implementing blockchain technology allows gambling platforms to introduce anonymity feature. This means users do not go through the rigorous process of sharing their personal information when creating accounts or transacting. This is an important feature to lock out hackers who may find it attractive to hack such platforms.

However, the need to have user’s enjoy anonymity is being undermined by government intervention through introduction of AML and KYC legal requirements for companies dealing with cryptocurrencies. Hence, lots of gambling platforms will request users to verify own identity before transacting on their platforms to comply with legal requirements.

  1. Increase Accessibility

A lot of countries around the world are yet to legalize online gambling thus prohibit betting and gambling activities. Therefore, denying gambling enthusiasts access to a game they love leads them to use illegal bookmakers. Eventually, players who use such illegal services end up losing their money often with illegal bookmakers failing to pay because it is not enforceable by law to have them honour player’s payments.

Blockchain technology solves this challenge by allowing gambling entrepreneurs to develop decentralized platforms with a feature of using cryptocurrencies. This use of digital currency makes the platforms accessible all-over the world. Besides, withdrawal is quick, no limits and payments are irreversible and automatic thus no cases of fraud or non-payment.

  1. Rewarding Loyal Customers

Conventional gambling platforms are known for not rewarding their loyal customers. If a player loses despite their loyalty they end up not receiving any compensation. Eventually, lots of traditional gambling companies are losing their customers whom they could retain with ease only if they leveraged on technology with an attractive incentive scheme.

Blockchain-based gambling companies significantly reduce their operational costs by eliminating the costs of intermediaries and losses initially incurred due to fraud. Therefore, they can use such savings to engage and retain loyal players by returning some portion of money lost to users monthly or even award the gamblers special bonuses.

Playbetr.com is one such company with an attractive loyalty reward program. Each time a user plays on the gambling site they earn certain loyalty rewards. For instance, the casino has VIP benefits namely rakeback, lossback and betback, which are all, based on the user’s status points and what’s more, all these are paid on all wagers.

  1. Huge Costs

Casinos do take a certain average percentage share (house edge costs) from their players as a strategy of ensuring the survival of the platforms. Incomes realized by casinos using this approach are used to pay employees and profits that go to shareholders.

Gambling platforms using blockchain technology can cut down house edge costs by leveraging on their other operational costs, which are at the minimum because of using this technology.

  1. Decentralized Prediction Markets

Prediction markets have always been in existence but with centralized structures. Therefore, this centralization leads to many limitations and risks such as lack of global access, a limitation on types of markets to trade or create and having the players place their trust on market operators to resolve markets correctly and not to steal funds. Centralized prediction markets are also costly with some charging fees as high as 10 per cent of profit while others have limited betting options.

Integrating blockchain technology onto a gambling platform improves the opportunity of users to access decentralized prediction markets. As a result, gamblers can use a betting arena to place bets on almost everything. Betting choice range from sports to elections with players also have access to the most accurate data leading to the most probable outcome of events without market operators interfering.

 

 

 

 

 

 

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Blockchain

As DeFi Grows, Do Institutional Investors See ETH as Store-of-Value?

  A lot of the discussion about Bitcoin over the last year has been about its establishment as a store-of-value. As institutional investors continue to take positions in Bitcoin–some even explicitly describing BTC as a “hedge against inflation”–the narrative is stronger than ever. Earlier this month, Coinbase published a report with an interesting finding: indeed, … Continued

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A lot of the discussion about Bitcoin over the last year has been about its establishment as a store-of-value. As institutional investors continue to take positions in Bitcoin–some even explicitly describing BTC as a “hedge against inflation”–the narrative is stronger than ever.

Earlier this month, Coinbase published a report with an interesting finding: indeed, the exchange’s institutional clients said that Bitcoin’s evolving role as a store of value was an important part of their reason for investing in it. However, Coinbase also noted that the same group of investors were starting to view another large-cap asset as a possible store of value: Ether (ETH), the native asset of the Ethereum network.

Indeed, “the case for owning Ethereum we hear most frequently from our clients is a combination of i) its evolving potential as a store of value, and ii) its status as a digital commodity that is required to power transactions on its network,” a summary of the year-end report explained.

“While our institutional clients predominantly bought Bitcoin in 2020, a growing number also took positions in Ethereum, the second-largest crypto asset by market capitalization,” the report said.

“Ethereum performed well against USD in 2020, outpacing Bitcoin to finish the year up 487% at $745.” Since then, the price of ETH has climbed even further: at press time, the price of ETH was ~$1,275; earlier in the year, ETH climbed as high as $1,470. According to data from Messar.io, ETH was up more than 75 percent since the start of the year, while the price of BTC was up just under 6 percent.

Could institutional investors be the source of some of these gains? And if institutional investors are really seeing Ether as a store-of-value asset? And, if so, what are the implications that this may have for the Ethereum network and the DeFi space as a whole?

BTC is fundamentally different than ETH

Let’s back up for a moment: while both Bitcoin (BTC) and Ether may be perceived by some investors as stores-of-value, there are some very important differences between the two assets. For example, Bitcoin’s value is its functionality; in the earlier days of Bitcoin, Bitcoin was discussed as a transactional network–a “digital cash.” However, as the network has grown, scalability issues have caused the network to be seen as a sort of “digital gold”: a store of value.

Ether, on the other hand, has multi-faceted functionality. Sure, ETH tokens hold value, but the tokens are also used in practical ways on the Ethereum network. While other tokens (called ERC20 tokens) have also been launched on the Ethereum network, ETH is the currency in which transactional fees on the network must be paid. As such, ETH is the “facilitator” of the network: it is the currency that allows transactions, smart contracts, and decentralized applications (dApps) to operate.

Doug Schwenk, Chairman of DAR (Digital Asset Research), explained to Finance Magnates that therefore, “perhaps in the short term, ETH may be seen as a store-of-value,” but over the longer-term, “it’s correctly seen as valuable for its utility.”

Doug Schwenk, Chairman and chief executive of Digital Assets Research (DAR).

The growth of the DeFi ecosystem is pushing Ether up

Mr. Schwenk also explained that there are other fundamental differences between the two assets that make their status as stores-of-value quite different over the long term: “Bitcoin, similar to gold, has a limited supply, which contributes to the store-of-value narrative,” he said.

“ETH, on the other hand, does not have a fixed cap. The price of ETH may be more directly related to its utility to process transactions which are used in many applications,” including a number of decentralized finance (DeFi) dApps.

Token-based fundraising advisor Eloisa Marchesoni explained to Finance Magnates that “decentralized finance” is a set of decentralized platforms that provide traditional financial services, including loans and investments.

However, the DeFi ecosystem is still in its very early stages: “[DeFi is] a new financial ‘wild-west’ that takes place largely on Ethereum and which according to some experts could give rise to a new ‘digital gold rush’ similar to the ICO boom of late 2017,” Ms. Marchesoni explained.

Unlike the ICO era, however, analysts see much more potential in many DeFi projects to continue to grow for years to come: Doug Schwenk told Finance Magnates that “as more mature applications are built on Ethereum that provide greater value to the end-user, the value of the asset should naturally increase.”

“If ETH grows, the price of tokens in the Ethereum ecosystem also increases.”

Therefore, while Ether may not be a store-of-value in the same way that Bitcoin is, ETH does have a kind of correlative-value relationship with the decentralized finance ecosystem. As the number of applications build on top of the Ethereum network continues to grow, so too does the amount of capital flowing through that ecosystem. As more transactions take place on the network, the greater the usage of Ether.

Indeed, “DeFi tokens’ core movement takes place on decentralized exchanges like Uniswap, Mooniswap, Sushiswap, et cetera,” Doug Schwenk told Finance Magnates. “The main trading pair to which these tokens are traded is respectively ETH. As a result, if ETH grows, the price of tokens in the Ethereum ecosystem also increases.”

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“It’s not directly correlated, but it is the leading driving factor besides the hype of DeFi,” he added.

However, while the growth of the DeFi ecosystem may have increased Ether’s value in the short-term, Eloisa Marchesoni also explained to Finance Magnates that while “the high demand for Ether in DeFi applications is expected to have a long-term impact on the price of Ethereum,” ETH’s price is still subject to market sentiment in the short-term.

“Ethereum prices are currently following the current market sentiment and have fallen by 17.7% over the past seven days,” Ms. Marchesoni explained.

The Transition to Eth2.0

While this growth of Ethereum’s DeFi ecosystem has caused some repeated instances of slow transaction speeds and high transaction fees, the team responsible for developing the technology behind the Ethereum network has recently led Ethereum community through the first step toward Eth2.0, a software upgrade that is slated to fix some of the network’s scalability problems.

This could have very important implications for the future of the Ethereum network–and for the price of Ether.

Eloisa Marchesoni explained to Finance Magnates that “without going into the very complicated technical details” regarding the transition to Eth2.0, “it is enough to know that thanks to a mechanism known as sharding and the transition to proof-of-stake, it will be possible to process thousands of transactions per second consuming very little energy.”

Eloisa Marchesoni, Token-based fundraising advisor.

“These innovations will allow Ethereum to solve the age-old ‘blockchain trilemma,’ which states that it’s not possible to have security, speed and decentralization at the same time,” she said. “Ethereum, if all goes well, will therefore be efficient and sustainable.”

Ms. Marchesoni also explained that the developments toward Eth2.0 seem to have been embraced by investors: “the value of Ethereum’s cryptocurrency has more than quadrupled from its 2018 lows,” she said. Additionally, the amount of Ether currently staked in the Eth2.0 smart contract has climbed to more than $3 billion since December 1st, when Eth2.0’s so-called “beacon chain” was launched.

Additionally, Ms. Marchesoni pointed out that since the launch of the beacon chain, “[the number of transactions on] the Ethereum blockchain has surpassed that of bitcoin,” which was previously the most-used cryptocurrency network.

via BitInfoCharts

Therefore, Ether isn’t a store of value in the same way that Bitcoin is. However, that doesn’t mean that it isn’t valuable, and won’t continue to grow over the long-term.

Konstantin Boyko-Romanovsky, CEO and Founder of Allnodes, told Finance Magnates that he believes that “sooner or later, the majority of institutional investors will turn their attention to Ethereum, which, as we know, has many more applications than the number one currency, [Bitcoin].”

“This, of course, creates positive expectations for investors in terms of possible earnings. Currently, there are no discussions in the crypto community on ‘flippening’, a term used to describe the possibility of Ethereum surpassing Bitcoin as the leading cryptocurrency. However the fact remains the same, Ethereum is currently more vigorous than ever.”

Konstantin Boyko-Romanovsky, CEO and Founder of Allnodes.

Growth of the DeFi ecosystem is positive for both BTC and ETH

Interestingly, though, is the fact that the growth of the DeFi ecosystem isn’t only good for the growth of Ether and the Ethereum network–it’s also good for Bitcoin.

Indeed, “BTC has certainly been an important part of the DeFi ecosystem, primarily as collateral,” Doug Schwenk told Finance Magnates. In other words, the more that DeFi grows, the more Bitcoin that is used within DeFi. For example, at press time, the total value locked (TVL) in the DeFi ecosystem had reached $25.49 billion; $5.02 billion of DeFi’s TVL is comprised of Bitcoin.

However, as Finance Magnates previously reported, “the amount of Bitcoin that is currently being used in the DeFi ecosystem may not be enough to have a significant effect on the price of Bitcoin. Currently, the amount of Bitcoin used in the DeFi ecosystem is just under 1% of Bitcoin’s circulating supply.”

Additionally, Doug Schwenk believes that a healthy Bitcoin price could also feed into further growth of the DeFi ecosystem: “if the BTC price continues to grow and with time becomes more stable, it could facilitate a robust DeFi ecosystem,” he explained. “The DeFi ecosystem will ultimately be held back if there is not an asset of sufficient market cap that can be seen as reliable collateral.”

Continue Reading

Blockchain

As DeFi Grows, Do Institutional Investors See ETH as Store-of-Value?

  A lot of the discussion about Bitcoin over the last year has been about its establishment as a store-of-value. As institutional investors continue to take positions in Bitcoin–some even explicitly describing BTC as a “hedge against inflation”–the narrative is stronger than ever. Earlier this month, Coinbase published a report with an interesting finding: indeed, … Continued

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A lot of the discussion about Bitcoin over the last year has been about its establishment as a store-of-value. As institutional investors continue to take positions in Bitcoin–some even explicitly describing BTC as a “hedge against inflation”–the narrative is stronger than ever.

Earlier this month, Coinbase published a report with an interesting finding: indeed, the exchange’s institutional clients said that Bitcoin’s evolving role as a store of value was an important part of their reason for investing in it. However, Coinbase also noted that the same group of investors were starting to view another large-cap asset as a possible store of value: Ether (ETH), the native asset of the Ethereum network.

Indeed, “the case for owning Ethereum we hear most frequently from our clients is a combination of i) its evolving potential as a store of value, and ii) its status as a digital commodity that is required to power transactions on its network,” a summary of the year-end report explained.

“While our institutional clients predominantly bought Bitcoin in 2020, a growing number also took positions in Ethereum, the second-largest crypto asset by market capitalization,” the report said.

“Ethereum performed well against USD in 2020, outpacing Bitcoin to finish the year up 487% at $745.” Since then, the price of ETH has climbed even further: at press time, the price of ETH was ~$1,275; earlier in the year, ETH climbed as high as $1,470. According to data from Messar.io, ETH was up more than 75 percent since the start of the year, while the price of BTC was up just under 6 percent.

Could institutional investors be the source of some of these gains? And if institutional investors are really seeing Ether as a store-of-value asset? And, if so, what are the implications that this may have for the Ethereum network and the DeFi space as a whole?

BTC is fundamentally different than ETH

Let’s back up for a moment: while both Bitcoin (BTC) and Ether may be perceived by some investors as stores-of-value, there are some very important differences between the two assets. For example, Bitcoin’s value is its functionality; in the earlier days of Bitcoin, Bitcoin was discussed as a transactional network–a “digital cash.” However, as the network has grown, scalability issues have caused the network to be seen as a sort of “digital gold”: a store of value.

Ether, on the other hand, has multi-faceted functionality. Sure, ETH tokens hold value, but the tokens are also used in practical ways on the Ethereum network. While other tokens (called ERC20 tokens) have also been launched on the Ethereum network, ETH is the currency in which transactional fees on the network must be paid. As such, ETH is the “facilitator” of the network: it is the currency that allows transactions, smart contracts, and decentralized applications (dApps) to operate.

Doug Schwenk, Chairman of DAR (Digital Asset Research), explained to Finance Magnates that therefore, “perhaps in the short term, ETH may be seen as a store-of-value,” but over the longer-term, “it’s correctly seen as valuable for its utility.”

Doug Schwenk, Chairman and chief executive of Digital Assets Research (DAR).

The growth of the DeFi ecosystem is pushing Ether up

Mr. Schwenk also explained that there are other fundamental differences between the two assets that make their status as stores-of-value quite different over the long term: “Bitcoin, similar to gold, has a limited supply, which contributes to the store-of-value narrative,” he said.

“ETH, on the other hand, does not have a fixed cap. The price of ETH may be more directly related to its utility to process transactions which are used in many applications,” including a number of decentralized finance (DeFi) dApps.

Token-based fundraising advisor Eloisa Marchesoni explained to Finance Magnates that “decentralized finance” is a set of decentralized platforms that provide traditional financial services, including loans and investments.

However, the DeFi ecosystem is still in its very early stages: “[DeFi is] a new financial ‘wild-west’ that takes place largely on Ethereum and which according to some experts could give rise to a new ‘digital gold rush’ similar to the ICO boom of late 2017,” Ms. Marchesoni explained.

Unlike the ICO era, however, analysts see much more potential in many DeFi projects to continue to grow for years to come: Doug Schwenk told Finance Magnates that “as more mature applications are built on Ethereum that provide greater value to the end-user, the value of the asset should naturally increase.”

“If ETH grows, the price of tokens in the Ethereum ecosystem also increases.”

Therefore, while Ether may not be a store-of-value in the same way that Bitcoin is, ETH does have a kind of correlative-value relationship with the decentralized finance ecosystem. As the number of applications build on top of the Ethereum network continues to grow, so too does the amount of capital flowing through that ecosystem. As more transactions take place on the network, the greater the usage of Ether.

Indeed, “DeFi tokens’ core movement takes place on decentralized exchanges like Uniswap, Mooniswap, Sushiswap, et cetera,” Doug Schwenk told Finance Magnates. “The main trading pair to which these tokens are traded is respectively ETH. As a result, if ETH grows, the price of tokens in the Ethereum ecosystem also increases.”

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“It’s not directly correlated, but it is the leading driving factor besides the hype of DeFi,” he added.

However, while the growth of the DeFi ecosystem may have increased Ether’s value in the short-term, Eloisa Marchesoni also explained to Finance Magnates that while “the high demand for Ether in DeFi applications is expected to have a long-term impact on the price of Ethereum,” ETH’s price is still subject to market sentiment in the short-term.

“Ethereum prices are currently following the current market sentiment and have fallen by 17.7% over the past seven days,” Ms. Marchesoni explained.

The Transition to Eth2.0

While this growth of Ethereum’s DeFi ecosystem has caused some repeated instances of slow transaction speeds and high transaction fees, the team responsible for developing the technology behind the Ethereum network has recently led Ethereum community through the first step toward Eth2.0, a software upgrade that is slated to fix some of the network’s scalability problems.

This could have very important implications for the future of the Ethereum network–and for the price of Ether.

Eloisa Marchesoni explained to Finance Magnates that “without going into the very complicated technical details” regarding the transition to Eth2.0, “it is enough to know that thanks to a mechanism known as sharding and the transition to proof-of-stake, it will be possible to process thousands of transactions per second consuming very little energy.”

Eloisa Marchesoni, Token-based fundraising advisor.

“These innovations will allow Ethereum to solve the age-old ‘blockchain trilemma,’ which states that it’s not possible to have security, speed and decentralization at the same time,” she said. “Ethereum, if all goes well, will therefore be efficient and sustainable.”

Ms. Marchesoni also explained that the developments toward Eth2.0 seem to have been embraced by investors: “the value of Ethereum’s cryptocurrency has more than quadrupled from its 2018 lows,” she said. Additionally, the amount of Ether currently staked in the Eth2.0 smart contract has climbed to more than $3 billion since December 1st, when Eth2.0’s so-called “beacon chain” was launched.

Additionally, Ms. Marchesoni pointed out that since the launch of the beacon chain, “[the number of transactions on] the Ethereum blockchain has surpassed that of bitcoin,” which was previously the most-used cryptocurrency network.

via BitInfoCharts

Therefore, Ether isn’t a store of value in the same way that Bitcoin is. However, that doesn’t mean that it isn’t valuable, and won’t continue to grow over the long-term.

Konstantin Boyko-Romanovsky, CEO and Founder of Allnodes, told Finance Magnates that he believes that “sooner or later, the majority of institutional investors will turn their attention to Ethereum, which, as we know, has many more applications than the number one currency, [Bitcoin].”

“This, of course, creates positive expectations for investors in terms of possible earnings. Currently, there are no discussions in the crypto community on ‘flippening’, a term used to describe the possibility of Ethereum surpassing Bitcoin as the leading cryptocurrency. However the fact remains the same, Ethereum is currently more vigorous than ever.”

Konstantin Boyko-Romanovsky, CEO and Founder of Allnodes.

Growth of the DeFi ecosystem is positive for both BTC and ETH

Interestingly, though, is the fact that the growth of the DeFi ecosystem isn’t only good for the growth of Ether and the Ethereum network–it’s also good for Bitcoin.

Indeed, “BTC has certainly been an important part of the DeFi ecosystem, primarily as collateral,” Doug Schwenk told Finance Magnates. In other words, the more that DeFi grows, the more Bitcoin that is used within DeFi. For example, at press time, the total value locked (TVL) in the DeFi ecosystem had reached $25.49 billion; $5.02 billion of DeFi’s TVL is comprised of Bitcoin.

However, as Finance Magnates previously reported, “the amount of Bitcoin that is currently being used in the DeFi ecosystem may not be enough to have a significant effect on the price of Bitcoin. Currently, the amount of Bitcoin used in the DeFi ecosystem is just under 1% of Bitcoin’s circulating supply.”

Additionally, Doug Schwenk believes that a healthy Bitcoin price could also feed into further growth of the DeFi ecosystem: “if the BTC price continues to grow and with time becomes more stable, it could facilitate a robust DeFi ecosystem,” he explained. “The DeFi ecosystem will ultimately be held back if there is not an asset of sufficient market cap that can be seen as reliable collateral.”

Continue Reading

Blockchain

TomoChain Launches LuaSwap: Attempts to Fight High ETH Gas Fees

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Ever since last summer, the DeFi space is booming. The total value locked in various protocols has surged to more than $24 billion, up some 4000% in less than a year. But there’s one challenge that many believe is hampering the further growth of the space – sky-high ETH gas fees.

The Booming DeFi Space

The massive increase in popularity of decentralized finance (DeFi) led to the creation of hundreds of projects, each one battling to garner the user’s trust. One of the more successful ones is Uniswap – an automated market maker and a decentralized exchange for ERC20 tokens. This, however, created an issue.

Ethereum’s suffering from congestion: with so many apps and people using the network, gas fees are high and transactions can be slow. In fact, gas fees have been so high lately that many started to question whether DeFi is actually only profitable for larger holders.

TomoChain proposes a solution to this with its Proof of Stake Voting (PoSV) consensus algorithm which incentivizes all token holders to be active in staking across a network of over 150 Masternodes. In essence, the goal is to help Ethereum’s network function more efficiently.

Enters LuaSwap

Put simply, LuaSwap is a coin-swapping platform which enables users to trade various cryptocurrencies. The main benefit of using it compared to other similar solutions such as Uniswap or SushiSwap, for instance, is that it’s cheap – it runs on TomoChain, not on Ethereum.

The promise is for near-zero gas fees and quicker transactions thanks to the 2-second block confirmation and the ability of TomoChain to handle up to 2,000 transactions per second.

It’s worth noting that the fees on Ethereum’s network have been so high lately, that they’ve eclipsed Bitcoin’s network by a factor of 3x. Over the past seven days alone, Ethereum saw around $10 million in fees, while Bitcoin’s network – only about $3 million. Interestingly enough, Uniswap’s V2 lines up third with $2.4 million in weekly fees.

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Source: https://cryptopotato.com/tomochain-launches-luaswap-attempts-to-fight-high-eth-gas-fees/

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