This year, NFT has gone viral. While CryptoPunks remains popular, and the character NFT Loot has flourished. Loot was officially launched on Twitter on August 28. How popular is this project? Bo Feng, the founding partner of Ceyuan Ventures, bought Loot#1288 for 35 ETH, and even Ethereum co-founder Vitalik Buterin praised Loot as a game infrastructure. According to data from DappRadar, in the last two weeks, the turnover of Loot exceeded $230 million, and its daily turnover has surpassed that of Boring Ape.
18.88 ETH. Before this, Loot had been soaring. However, after September 4, the price plummeted. As of September 14, Loot bottomed out at 4.68 ETH, a 75% drop. How did this happen?


What is Loot?
Here is an example from the official Loot website:


Above is Loot#1337 illustrated on the official website. 8 lines of words? That’s it?
That’s exactly what Loot is, 8 lines of text. There are 8,000 Loot NFTs officially released, 223 of which are reserved by Loot developers and the rest are for free. As for its introduction, we can see no more than two lines of words on the official website: “Loot is randomized adventurer gear generated and stored on chain. Stats, images, and other functionality are intentionally omitted for others to interpret. Feel free to use Loot in any way you want.” Without any design or story, this simple text costs 4 to 5 ETH per item (just a week ago, the floor price of Loot stood at over 10 ETH). Once again, everyone has been impressed with NFT’s ability of rapid wealth generation.
Why are these 8-line texts so expensive and popular?
There are three mainstream explanations:

1) Loot created a new NFT paradigm.
Soon after the launch of Loot, Vitalik Buterin, co-founder of Ethereum, made an insightful comment on Loot: “I think the @lootproject philosophy has it right: pretty much anything that anyone creates ‘exists’, what matters is to what extent other people build upon it.” Loot is completely open. There is no artist and no core developers for ultimate construction. The 8-line words are building materials like brick and wood that Loot offers to the crypto community. Tapping into these building blocks, users can create whatever items they like, which may be a novel, a movie, or a game. Loot has created a brand new way of collaboration. Any individual or entity can develop its own story and create NFTs under Loot’s framework. This makes Loot an improved representation of what blockchain decentralization is. It is thus regarded as a new NFT paradigm, the infrastructure of NFT, and the Ethereum of NFTs.

2) Loot is a bottom-up NFT.
Before Loot came out, trending NFTs were organized. In other words, before NFT projects go viral, there are always entities masterminding the creation, design, and launch of projects. Some of these entities (e.g. Bored Ape Yacht Club) also participate in the promotion, maintenance, and community building of the NFT project to maintain its popularity. In short, the mechanism that sustains the popularity of other NFTs is top-down, which is why they are evaluated based on, first and foremost, the time of launch and innovation. Due to the lack of content in such JPG NFTs, most users can only use them as icons, spending all that money just for fun.
Loot, on the other hand, is completely different. Although the NFT contains only texts in black and white, without any production or design, Loot also leaves more room for imagination as it is simpler. Through the equipment provided by texts, users can innovate and create whatever they want. The mechanism of Loot is completely bottom-up. In the future, this new NFT paradigm may give rise to increasing creativity and content. It is noteworthy that Loot’s future value hinges on the creative efforts of its community, which drastically differs from previous NFT valuations.

3) Loot has the potential to become a universal asset of the metaverse.
Being programmable and fully open, Loot can be integrated with other protocols, making cross-protocol independence possible. Picture this: “Rings” programmed through Loot can travel from one chain to another. Isn’t it amazing? In the crypto community, even stablecoins that support conversions with other tokens have become a hit, not to mention a universal asset of the metaverse.
This is the reason behind the instant boom of Loot.

Given that Loot is so imaginative, should we invest in this project? Are there any flaws?
The most damning flaw of Loot lies in the fact that there are only a few direct stakeholders. There are 8,000 Loot items in total, 223 of which are reserved by Loot developers. That means the total supply stands at 7,777 and there are only 7,777 direct stakeholders. Upon its issuance, Loot did not create any incentive mechanism to attract more users for building its ecosystem. Not much can be built with only 7,777 users. Plus, as many users own multiple Loot NFTs, the total number of users can hardly reach that figure. To draw more stakeholders, Loot’s co-founder Will Papper launched AGLD, an ERC20 token based on Loot, with a total supply of 80 million. Early Loot participants can get an unconditional airdrop of 10,000 AGLD, which can be used for governance, future game scores, or creating a Lootproject mint, etc.

Moreover, on September 4, Loot’s founder Dom announced a new project called More Loot (MLoot) on Twitter. MLoot follows the same rules as the original Loot. Beginning from #8001, the supply of MLoot is significantly larger, with an annual issuance of 250,000 and an upper limit of approximately 1.316 million. The introduction of MLoot made Loot less rare. The day after Mloot was launched, the Loot price suffered a flash crash of almost 20%. Some Loot holders exited and sold all of their holdings. This is why the Loot price, soaring ever since its launch, fell dramatically after September 4. As such, it is difficult to say whether one should invest in Loot. Although Loot, born just two weeks ago, is clearly imaginative and promising, it may diminish at any time as the project is highly primitive. Furthermore, certain measures (such as the introduction of MLoot) adopted by the developer team also pose the project at great risk. Hence, think twice before any investment.

A while back, the NFT card game Splinterlands launched the governance token SPS and quietly became one of the top three DappRadar games. Now, the game has reappeared on the market’s radar. Players and investors who have seen the boom of Axie Infinity will never want to miss Splinterlands.
As a blockchain game that has been running on Steem for 3 years, Splinterlands’ design logic, gaming mechanism, impressive graphics, and diversified gameplay helped it gain plenty of loyal players. Blockchain games are very trending in 2019; however, at the time, due to restraints such as the low-performing blockchain technologies and the lack of developer teams, blockchain games launched over the past few years focused more on tokens rather than the game itself.

Simply put, Splinterlands is a collectible NFT card game. Previously known as Steemmonsters, the game was later renamed Splinterlands because of additional elements such as NFT and land auction. This improvement made Splinterlands a first-class blockchain game that allows for more imagination than Axie Infinity. Though its gameplay resembles Magic the Gathering and Hearthstone, Splinterlands essentially differs from games like Hearthstone.


Although players may trade their cards freely in Hearthstone, the cards are still locked in the game and accounts. Additionally, in this game, players have no idea of the specific supply of cards and cannot prevent Blizzard from issuing more cards.
In Splinterlands, players can also build up a collection of cards, which all have different stats and abilities, and use them to battle other players in skill-based matches. The difference is that by using blockchain technology, players own these crypto assets, and they can buy, sell, and trade their digital assets freely just as if they were physical cards. Furthermore, anyone can know exactly how many cards are remaining. Other than the NFT cards and land auctions, the game has also introduced new elements such as card combination and trading, adding more appealing gameplay to this blockchain version of Heartstone.
Splinterlands features cards of different editions. Before getting started, players must first purchase the Summoner’s Spellbook. According to the official website, the starter cards are priced at $10. Then, players can spend $2 buying Booster Packs, each of which contains 5 random cards from newer editions with at least one guaranteed to be rare or better.
The more Booster Packs you buy, the more likely you will get powerful epic or legendary cards. Apart from buying Booster Packs for an upgrade of cards, players can also buy cards sold by other players directly from the market. In addition, players winning a match will have their level upgraded in proportion to the opponent’s level. As players upgrade, they are entitled to leagues at higher levels and unlock better cards.

Of course, the rewards available to a player are also subject to his Splinterlands assets, including cards, packs, land, and crystals (DEC). Splinterlands will welcome an increasing number of players as the game becomes more popular. If new players want to win more matches, they will need better cards. As such, the purchase or borrow of cards by new players will drive up the market cap of the Splinterland NFT cards. Now, some rare gold cards go for $100,000, and even regular cards are becoming more expensive.


Splinterlands has launched two types of tokens in the game: the governance token SPS and the fuel token DEC (crystals). The two play different roles, and their values significantly differ.
The primary function of the DEC fuel token (crystals) is to buy game items and lift a player’s ranking. Players winning a match will receive crystal rewards. After playing a few matches, many players can get packs and crystal rewards and then earn profits by withdrawing the rewards through certain channels.

SPS is the governance token of Splinterlands that provides decision-making ability and control over the product for players, asset owners, and other stakeholders. The primary roles of SPS include community governance voting, game rewards, and staking rewards. Each staked SPS will be worth one vote, so the more SPS a player has staked, the more they will be able to influence the results of the votes. Furthermore, everyone can submit a governance proposal for voting provided that he pays a fee in SPS which will be burned.
The SPS governance rights cover Splinterlands-sponsored tournaments and prizes; quests; season and leaderboard rewards; battle settings (time limits, mana cap, rules, etc.); DEC pools, etc.

In other words, the value of SPS determines the value of the game.
It has been reported that the total supply of SPS is 3 billion, of which 400 million will be allocated to gamers and collectors. Right now, with investments from well-known institutional investors such as Animoca Brands, Splinterlands has continued to update the gaming platform. It is noteworthy that SPS is now listed on crypto exchanges such as Gate.io and CoinEx. Let’s wait and see whether Splinterlands can resume the success of Axie Infinity.

Why do young investors prefer cryptocurrencies? Or, to put it more plainly, why do young people like crypto speculation? In the public eye, the phrase “crypto speculation” is often associated with negative implications such as “radical”, “high-risk”, and the “ambition” for getting rich. However, the preference for cryptocurrency among the young seems to be unstoppable. According to the latest report released by Crypto.com, in January 2021, there were 106 million crypto holders worldwide, and the figure has surged to 221 million by August 2021, compared to only 66 million in May 2020. The doubling of holders during six months shows just how popular cryptocurrencies are.


Why is this the case? The elder always tell young people to be patient, but what they don’t realize is that if young folks took the advice, they may never get the same returns, no matter how hard they work.
Here is a real-world example. During the past 20 years, house prices in China’s first-tier cities skyrocketed. For example, in Shenzhen, the average house price back in 2001 stood at RMB 5,500, which soared to RMB 60,000 twenty years later. On the face of it, the more than ten-fold growth spread over 20 years does not seem so impressive, but real estate investment is not simply buying and waiting. In 2015, house prices in Shenzhen grew by 40%, that is, within 12 months, a house originally valued at RMB 2 million is now worth RMB 2.8 million. Moreover, a house purchase is almost always leveraged, generally with a down payment of only 30%. In other words, the buyer only pays RMB 600,000 principal plus 12-month mortgage payments of less than RMB 700,000 in exchange for a two-million-yuan house which is now worth RMB 2.8 million. According to this calculation, the buyer makes a profit of 114%, instead of merely 40%. Yet, this is not the end of the story.
Easy real estate credits allowed these profit-makers to buy more houses by re-mortgaging their house for more loans (the price increase and the down payment) from the bank. Now, the buyer now only bears a loan of RMB 1.4 million for the RMB 2.8 million house. Through other channels, the buyer could borrow another RMB 1 million from the bank to buy a three-million-yuan house. In 2016, house prices in Shenzhen increased by another 20%.

By now, the buyer originally with a principal of RMB 600,000 owns RMB 6.8 million in real estate assets. Here is a rough calculation of his profit: Deducting the RMB 1.4 million mortgage (the first house) and the RMB 3 million loan (the second house), the buyer stands to make an earning of RMB 2.4 million, a 400% surge in two years. Though it sounds exaggerated, that was exactly what countless buyers and investors did during the last two decades of sustained real estate boom in China’s first-tier cities. Further, the surge in 2020 once again doubled the property price. Who says returns are always proportional to the risks?
In the face of sky-high house prices, young people living in first-tier cities may never afford to buy a house, let alone invest in one. When house prices rise, all profits will be reaped by big investors.
Apart from China’s real estate market, the same also applies to the US stock market. In the past century, old money has made huge profits in the US stock market. During the same period, the market also witnessed the rise of Warren Buffett. Can there be another Warren Buffett in the 21st century? Almost impossible. Essentially, the so-called winning track and rules for success are nothing more than dividends offered by a specific historical period.

Why do young investors prefer cryptocurrencies? One straight answer is that they have stopped playing by the rule set by the old money and invented a new game. That said, are cryptocurrencies the dividend the world offers to this generation of young investors?
Data is often the most authentic and reliable evidence. According to statistics from AssetDash, the 2021 market cap rankings of global assets are as follows:


As can be seen, Bitcoin ranked as the 7th most valuable asset, beating the young electric vehicle maker Tesla and the 20-year-old Chinese Internet titan Tencent. In comparison, it has only been 12 years since the creation of Bitcoin.
Established in 2015, Ethereum ranked among the top 20 with a market cap of more than $411 billion. It only took the crypto platform 6 years to outrank the global retail giant Walmart.
Other than the market cap, there are also rankings of the annual return of the major global assets in the past decade:


Bitcoin shot up by 5,500% and 1,300% in 2013 and 2017, respectively. In addition to the staggering annual growth, the 10-year performance of Bitcoin is equally impressive: In 8 years, Bitcoin topped the global investment markets with yields leaps and bounds ahead of all other assets. This cryptocurrency is slightly inferior to the large-cap stock market indexes and the Nasdaq 100 index of the United States only in terms of “no-loss” years and drawdowns. As for gold, the global safe-haven asset, you can barely find its name on the above list.
If you are still not convinced, let us look at the compound growth rate. As the world’s most valued stock, Apple is probably the finest listed company. Still, how did Apple perform in terms of the compound growth rate? On December 12, 1980, Apple went public. The market cap was $1,778 million at the end of its first day of trading. Since then, Apple’s market cap has grown to $2,655.2 billion as of September 9, 2021, which translates to a 40-year compound growth rate of 19.94%. As the ultimate beneficiary of America’s prosperity and the stock market boom, Warren Buffett frequently records the highest return among all investors. Similar to Apple, his compound annual growth rate stands at 20%. This means that in the conventional mainstream investment markets, the compound annual growth rate achieved by the best investor of the world’s greatest listed companies goes no higher than 20%.

In the crypto space, the compound growth rate of the most valued token Bitcoin stood at over 200% in the past 12 years, which is more than 10 times that of investments in listed companies.
From these data, higher returns are clearly why young investors prefer cryptocurrencies to the traditional mainstream investment market.

The last two years have witnessed a crypto boom. Against the growing demand for crypto assets, an increasing number of institutional and individual investors now hold cryptocurrencies. According to a report by Bernstein, the market value of cryptocurrencies has exceeded $2 trillion. As the number of crypto holders continues to grow, the role of crypto assets is becoming more critical. However, compared with the conventional financial sector, the crypto market is still in its infancy. For instance, there is plenty of room for improvement in terms of infrastructure, and among them, crypto asset custody is one of the most crucial.

The emergence of cryptocurrency as an asset class has drawn attention to the importance of its security and credibility. Moreover, the need for more regulation and operation standards in the crypto market is also growing. Right now, the regulatory oversight of both centralized and decentralized exchanges is getting more stringent. The storage and management of digital assets also remain a concern. As hedge funds, high-net-worth individual investors, and financial institutions expand their crypto holdings, their demand for custodial infrastructures have been growing. At the moment, there are 150 active crypto hedge funds with more than $1 billion AUM, of which 52% are managed by independent custodians.

Crypto asset custody is the latest product of fund custody in the conventional financial sector, so what is fund custody?

Fund custody refers to the flow of funds in third-party custodians instead of platforms, which eliminates the investment risk of platform misappropriation. Generally speaking, the need for custody services among institutional investors stems from risk reduction and compliance requirements. Figure 1 briefly illustrates the relationship between individual investors, fund companies, and custodians in the conventional financial sector. Individual investors first invest in a fund, and then the fund deposits the amount in a third-party custodian (brokers, trusts, etc.), which allows the custody and transaction of the fund to be separate and independent and eliminates a wide range of risks, such as non-transparent internal trades and the misappropriation of funds.

Compared with assets like cash, securities, or physical valuables, the custody of crypto assets requires a new type of infrastructure that drastically differs from conventional custody. For instance, special considerations are needed for the storage security of cryptocurrencies. The chief strategy officer of Onchain Custodian believes that “third-party crypto asset custody has become part of the crypto community. Like conventional finance, cryptocurrency will also have to adapt to regulatory oversight, and it will also need third-party custodians to ensure fund security.” In the context of increasing token holders and market value, the demand for crypto asset custody is on the rise. The target users of crypto asset custody mainly include:

1) Individuals
The only key of on-chain crypto assets is the private key. The possession of a private key represents ownership of the assets in the relevant account. However, as most individuals are not professional custodians, the private key is susceptible to frequent loss, disclosure, and hacking. For holders of large crypto assets, working with professional custodians is far more secure.

2) Companies and institutions
For institutional clients, before entrusting anyone with the private key, scrutinous risk control measures are required to oversee the transfer of crypto assets. Working with a professional custodian ensures the secure internal storage and access of assets.

3) Exchanges
During the past few years, a large number of exchanges have been hacked, including many well-established ones. Exchanges are there to provide a credible platform for secure transactions involving huge amounts of crypto assets. Once they are hacked, both exchanges and users will suffer significant losses. Therefore, the collaboration with a reliable third-party custodian not only addresses the trust issue but also alleviates the risk of hacking.

The three solutions of crypto asset custody

To respond to different demands, crypto asset custody offers several solutions. For example, for retail investors who want full control over their crypto assets, a preferred choice is autonomous storage of crypto assets using hardware wallets or through complex settings for the storage, printing, copy, and backup of the private key.

Some high-net-worth individual investors holding large crypto assets want a certain degree of institutional protection while reserving the control of their assets. Yet, they do not want a third party to manage all of their assets. These investors often choose partial custody.

For institutions such as asset management companies, hedge funds, and family funds, the most secure type of custody is to work with third-party custodians for the holding and management of all assets. There are two common third-party custodial solutions: the hot wallet and the cold wallet. The fundamental difference between the two lies in whether the storage system is online or whether it supports remote access. Hot wallet is the storage of the signature and key in an online system or a hardware device with online access. On the other hand, the cold wallet or cold storage refers to an offline wallet for storing crypto assets. Cold wallets feature storage on an offline platform, which protects the wallet from losses incurred by hacking, unauthorized access, or other vulnerabilities.

The security mechanism of custodians

Most of the custodians have adopted the security mechanism of multi-signature (X of Y), which means the execution of a transaction requires two or more signatures. X refers to the number of signatures required for the transaction to take effect, whereas Y means the total number of parties related to the transaction. More specifically, X of Y means when there are Y individuals holding Y private keys: if X individuals agree to provide signatures, then the funds stored in a shared address can be used for the transaction.

Why do we need multi-signature? If a conventional single-signature mechanism is adopted, once the user loses the private key, he loses the funds in the relevant address. This places holders of large crypto assets at great risk. In such cases, using multi-signature technology can: 1) avoid the loss of the private key (the multi-signature mechanism avoids the loss of funds and spreads the risks); 2) fend off hacking (for a multi-signature address, the hacking of multiple private keys is more difficult); and 3) prevent internal theft (entrusting the private key to one person may lead to internal theft, whereas entrusting it to the majority can prevent such incidents).

Existing custodians

To date, there are 28 providers of crypto asset custody for institutional clients. Among the 28 custodians, 22 were established in 2017 or later. Of these, Coinbase Custody and BitGo are the two largest. Bitstamp, one of the largest crypto exchanges in Europe, announced that BitGo will provide custody for its crypto assets. For BitGo, the Bitstamp contract is a huge business. Coinbase Custody is the biggest crypto custodian in terms of custody volume. Its clients include the well-known crypto trust Grayscale. More than $1.6 billion funds are flowing to institutional custodians. As competition in the custody industry intensifies, some custodians have launched additional services like stake mining, governance, and large-sum OTC.


How to choose a suitable custodian

Legislative institutions and regulatory authorities might establish a full set of laws, regulations and regulatory requirements some day to ensure the security of crypto asset custody, but for the time being, when choosing a custodian, customers have to consider its security and functions.

As a customer, you can assess a custodian from the following aspects:

Liquidity: If the custodian quickly responds to requests for asset transfer, can it be sufficiently offline to ensure asset security? Is there a minimum amount for withdrawal?

Scale: Does the custodian have any sub-account tools that support multi-account operations? Does it offer whitelist functions? How are new account holders authenticated? Are there background checks, KYC, and other authentication measures?

Fees: Are there any minimum asset requirements for custody? How does the fee change in line with the custody scale?

Management authorities: Does the management of the custodian have the right to transfer funds? Can the management alter the governance process at its discretion?

Monitoring and updates: What mechanisms are available for website access and equipment review? How does the custodian carry out system upgrades and staff rotations? What are the control procedures for performance tests and authentication applications?

Compliance and audit: Is the custodian compliant with local requirements for capital reserve and bank standards? Does it comply with the relevant AML (anti-money laundering) and CFT (countering the financing of terrorism) regulations? Is it regularly audited by a third-party auditing firm?

Insurance: Does the custodian offer insurance for offline storage (the cold wallet) or the hot wallet, and what is the amount covered? If the coverage is limited, how will the compensation be allocated in the event of asset loss? Figure 3 lists the amount and coverage of insurance offered by some custodians.


Crypto asset as an asset class is rapidly maturing. When choosing a third-party custodian, investors should consider what the custodian can offer over the long term. Everyone in the crypto market should adapt to the fast growth of the field. Here, we listed four considerations:
1) Latency and speed: Though fast access to funds may become increasingly more important for low-latency transactions, high liquidity should not be the only requirement for a custodian. Instead, we should focus on whether the custodian could complete the full authentication and withdrawal process through an offline mechanism while ensuring fast transactions.
2) Support of new tokens: There are new tokens launched every day, and not all custodians can support them. Figure 4 illustrates the types of tokens supported by some custodians.
3) Staking for “interests”: In traditional finance like banking, customers receive interest by making asset deposits. In crypto asset custody, “interests” are offered to customers in the form of earnings through staking;
4) Regulatory oversight/compliance: Crypto asset custody is constantly evolving and iterating, and the legal and regulatory requirements for custodians are also taking shape. As such, for investors, it is vital to choose a custodian that is compliant and regularly audited by third parties.

When asked what stablecoins are, both crypto newbies and veterans would give a straightforward answer — easy, the stablecoin is a token with stable prices, that’s it. However, there is a very interesting story behind the creation of stablecoins.

The cryptocurrency was created to give rise to a “decentralized” and “free-flowing” currency. How did it turn out? Though a global consensus was put into place, cryptocurrencies suffer from severe volatility as they lack intrinsic value, endorsement, regulatory intervention, and circulation adjustment. Nearly every holder of cryptocurrency sees it as a store of value rather than a means of payment. Additionally, there is much room for speculation in the crypto market. Stable token prices elude most cryptocurrencies, including the first cryptocurrency Bitcoin, the smart contract backed Ethereum, and the new payment method Ripple.

This brings a major paradox: Despite their purpose of becoming global currencies, cryptocurrencies may never achieve extensive circulation because as it gains more recognition and usage, the token price will inevitably rise and fluctuate, or in the opposite scenario, approach zero. In short, cryptocurrencies can never maintain stable prices. Instead, stablecoins anchored to fiat currencies are needed to achieve price stability. It seems a bit absurd, doesn’t it?

Such is the current dilemma facing the crypto community. However, this paradox has also reflected the huge prospects of stablecoin, which is why it was created. That said, how many stablecoins are there? What is their stability mechanism? Are they all safe?

The crypto market abounds with stablecoins, such as USDT, DAI, and lesser-known tokens like PAX, TUSD, HUSD, GUSD, etc. To sum up, stablecoins fall into three categories: fiat-backed stablecoins, crypto-collateralized stablecoins, and non-collateralized algorithmic stablecoins.

1) Fiat-backed stablecoins (e.g. USDT)

Fiat-backed stablecoins refer to stablecoins anchored to fiat currencies at a 1:1 ratio, with real fiat currency to back them up and stabilize the prices. Are these stablecoins secure?

In the case of USDT, if Tether plans to issue 1 USDT, ideally, it must make a bank deposit of $1. As investors buy USDT, Tether can deposit their payment and issue more USDT, and so on and so forth. In such a virtuous circle, the market cap of USDT grows together with the number of users. Meanwhile, Tether charges certain fees for USDT transactions, and the payment for USDT deposited into banks also generates interest. This model of stablecoins is secure as along as Tether brings convenience to users and the market while acting by the rules.

Yet, as a private company, Tether lacks third-party oversight and sound mechanisms for transparency. For users, there is no definite way to confirm whether their payments are really deposited to cope with on-demand redemption. The transparency of Tether has been repeatedly questioned. In February, it was alleged that Tether used $900 million worth of USDT to make up for the losses of its affiliated company Bitfinex.

In light of such risks, the market has been in search of more secure, decentralized, and transparent stablecoins, which brought about the second type of stablecoins — crypto-collateralized stablecoins.

2) Crypto-collateralized stablecoins (e.g. DAI)

To avoid the misappropriation of funds, these stablecoins collateralize tokens through smart contracts. For instance, to issue stablecoins, DAI collateralizes crypto assets through smart contracts running on Ethereum and allows users to create collateralized debt positions (CDP). Since it was launched in 2017, DAI has been anchored to the US dollar at a 1:1 ratio. How did DAI achieve this?

For the average investor planning to rely on DAI as a stablecoin, they can simply make a purchase on exchanges. However, thanks to CDP, there are more advanced uses of DAI.

For example, what would you do if you want more liquid assets without selling your ETH holdings? The answer is to deposit ETH using DAI’s smart contracts. Considering the high volatility of crypto assets, DAI has set a risk parameter: the asset to loan ratio must be higher than 1.5:1. In other words, if a user plans to generate 1,000 DAI, then he must deposit at least $1,500 worth of ETH. Once the DAI tokens are generated, the user will be able to use them for investments, and if he wishes to redeem the DAI into ETH, the 1,000 DAI should be repaid together with certain interests.

The above process resembles real estate mortgages. The difference is that the DAI repayments are burned to keep the supply-demand balance of DAI. The key question here is how DAI keeps token prices stable. Here is how:

I. DAI is fully collateralized. When the ETH price drops, if the borrower fails to make more deposits or repay DAI in time, the smart contract will sell the ETH automatically when its value plunges below the liquidation ratio of 150%.

II. DAI manages supply and demand through interest rates. When the demand rises, the DAI price will also increase, which means that DAI can lower the interest rate to motivate more users to generate DAI by depositing collateral.

On the other hand, when faced with declining demand, DAI can discourage users from generating DAI by raising the interest rate. Additionally, for stablecoins like DAI whose value is 1:1 pegged to the dollar, arbitrageurs will flatten the price curve in times of fluctuations. Hence, the DAI approach is a secure mechanism that keeps the price stable, decentralizes, and avoids the misappropriation of funds by centralized institutions. If the crypto-collateralized stablecoin DAI holds all these merits, why does it have a much lower market cap than the centralized fiat-backed stablecoin USDT?

The answer is that despite all these merits, the cost of issuing DAI and arbitrage is too high due to the 150% deposit rate.

3) Non-collateralized algorithmic stablecoins

These stablecoins have far lower market shares and popularity. The only non-collateralized algorithmic stablecoin worth mentioning is AMPL, the first-generation algorithmic stablecoin. At the time of writing, the market cap of AMPL stands at $112 million, ranking 269th among all tokens. How does AMPL work? The answer is simple — AMPL regulates its holding through Rebase. In other words, when the AMPL price exceeds $1, it increases the holding; and when the price is less than $1, it reduces the holding. In this way, AMPL can adjust its supply and demand and keep the price stable.

However, when we look at the long-term price changes of AMPL:



It is clearly too volatile to be categorized as a stablecoin that meets the expected stability. In addition to AMPL, other algorithmic stablecoins include ESD, BASIS, FRAX, etc. To address the issue of the 1:1 exchange ratio with the U.S. dollar, these stablecoins developed more tools, including additional issuance, deflation, bonds, and dividends. However, none of them have made it. Why is that?

Because though maintaining the token price through adjustments of supply seems reasonable, in reality, algorithmic stablecoins are founded on “consensus” just like other cryptocurrencies. When there is more consensus (more users), the token price will go up. It is easy to cope with an increase in the token price: issue more tokens to lower the price. However, raising the token price after a decline is hard.

A decline undermines the market confidence for holding the token. Without the support of physical assets or value, the token price may drop to zero even if the supply is reduced. Therefore, confronted with market sentiments and human emotions, the seemingly logical algorithmic stablecoins have a tough time controlling the token price, let alone keeping it stable.

Though plenty of stablecoins have been launched due to concerns for fiat-backed stablecoins, all of them are flawed to some extent. In comparison, fiat-backed stablecoins remain the most reliable, convenient, and common out there. This might be the reason why USDT, a fiat-backed stablecoin, gained increasing momentum — When all stablecoins are more or less flawed, users tend to choose the most prominent one as it is more credible.

[Торговля Бессрочными Контрактами для Новичков. Получите Награду в 1500 CET]

В крипто-мире существует бесчисленное множество возможностей заработать деньги. Однако, многие ли могут ими воспользоваться? CoinEx предоставляет всем шанс на выигрыш, вы готовы присоединиться?

С 17 ноября по 30 ноября 2020 года (UTC) CoinEx проведет 2 мероприятия по торговле бессрочными контрактами. Если вы являетесь активным пользователем CoinEx и впервые попробуете торговлю бессрочными контрактами, вы можете получить CET в качестве вознаграждения. Кроме того, у вас будет шанс разделить 20 000 USDT, участвуя в турнире, который проводится как для новых, так и для постоянных пользователей CoinEx.

Торговля Бессрочными Контрактами для Новичков. Получите Награду в 1500 CET

CoinEx подготовила специальные награды на сумму 1500 CET для каждого, кто никогда раньше не торговал бессрочными контрактами. Если вы зарегистрировались на CoinEx до этого мероприятия и имеете совокупный торговый объем более 100 долларов США, а также никогда не проводили бессрочную торговлю на нашей платформе, вы имеете право присоединиться к этому мероприятию.

Получите 500 CET в качестве вознаграждения за торговлю бессрочными контрактами на любых рынках при совокупном объеме торговли более чем 500 контрактов.

Получите 1000 CET в качестве дополнительного вознаграждения за более чем три активных дня при совокупном объеме торговли более чем 50,000 контрактов.

Но 1500 СET ведь недостаточно? Конечно, нет! Поэтому CoinEx дополнительно разыграет 20,000 USDT!

Если за период мероприятия вы совершили сделки на любом рынке с совокупным объемом торговли, превышающим 500 контрактов, вы будите включены в рейтинг, основанный на объеме торговли. Топ 1000 пользователей разделят 20,000 USDT.

Пошаговое руководство, как получить награду.

• После регистрации в CoinEx и успешного входа в систему нажмите кнопку “Perpetual” на верхней панели навигации;
• Внимательно прочтите “Risk Reminder”, установите флажок под ““I have read and agree to accept these risks and liability”, а затем нажмите кнопку “Confirm”;
• Нажмите кнопку “Transfer”, а затем перенесите свой актив с спотового счета на бессрочный счет.

Теперь вы можете торговать на рынке, который вам нравится, и зарабатывать деньги!

Для получения более подробной информации нажмите https://www.coinex.com/activity/perpetual-contest?%20channel=media&lang=en_US

[CoinEx Will First Launch ONES Worldwide]

We are glad to announce that OneSwap, a decentralized trading platform strategically invested by us will be first officially launched on our platform on September 18, 2020, along with its token ONES. To reward our users, we will initiate an “Initial Trade Offering” (ITO) event, where users can get corresponding mining reward from conducting an effective transaction. The details are as follows.

CoinEx Will First Launch ONES Worldwide
1. Deposit: 8:00 September 17 (UTC)
2. Withdrawal: 8:00 September 17 (UTC)
3. Trading pair: ONES/USDT
4. Opening time: 2:00 September 18 (UTC)
(1) ONES issuance will be divided into two phases, respectively countdown and official trading.
(2) In countdown phase, placing order is not supported. In order to provide users with better trading experience, we will inject 750,000 ONES into ONES/USDT market for liquidity provision by using the "constant product market maker formula" algorithm.
(3) To ensure normal users’ interests, we will set up a special trading time slot for ONES/USDT market. From 2:00 to 2:30 (UTC), normal users can place orders while API users cannot. After this period ends, trading will be resumed and all users can conduct trading (including API users).

CoinEx Will Launch “Initial Trade Offering” (ITO) Event
1. Duration: 0:00 September 19 - 0:00 October 9, 2020 (UTC)
2. Rules: Users can get ONES as a reward by trading on CoinEx (no limit on tokens, trading pairs or markets). The total daily reward is 25,000 ONES, of which 20,000 ONES is for spot trading (including margin trading) and 5,000 ONES goes to perpetual contract trading.

3. Notes
(1)Only users who have submitted application for this event will be deemed as qualified participants. Click HERE to apply.
(2)Normal users' main accounts and sub-accounts are eligible to join mining, while market makers and users of special fee rate are excluded from this event.
(3)Participants can use CET as fees and enjoy VIP fees discount at the same time.
(4)During the event, participants' buy or sell value of the corresponding trading pair will be regarded as effective value (sub-account's value will be calculated into main account). Participant's mining income = Participant's effective tx value / CoinEx's effective tx value ) * Daily output
(5)Yesterday’s mining earnings will be automatically calculated at 0:00 (UTC) every day and allocated to participants' spot accounts. There might be a delay of the actual arrival time.
(6)Due to reasons like market change, fraud risk, etc., CoinEx reserves the right of adjusting event rules at anytime.
(7)OneSwap will launch ONES market and officially support yield farming and order mining simultaneously. For more details, please refer to:《OneSwap Initial Mining Officially Goes Live
Yield Farming and Order Mining Rules Unveiled》

[Le programme Ambassadeur CoinEx]

Si vous êtes un grand fan de la blockchain ou de la crypto-monnaie, désireux de participer au développement, à la création de marque et à la promotion de CoinEx, vous êtes invités à rejoindre l'équipe Ambassadeur CoinEx!

Le programme Ambassadeur CoinEx est mis en place pour reconnaître et soutenir les dirigeants et influenceurs actifs et engagés qui contribueront à la communauté CoinEx. Il propose un généreux système de récompense exclusif, comprenant un salaire mensuel jusqu'à 10,000 USD, un taux de commission élevé pouvant atteindre 40% des frais de transaction, des fonds de promotion, des certificats et cadeaux personnalisés, des formations haut de gamme, ainsi que des tests internes de nouveaux produits.

"CoinEx a fait un effort conscient pour se connecter davantage avec notre communauté, donc ce programme Ambassadeur est notre prochaine étape logique", a déclaré Haipo Yang, PDG de CoinEx. "Nous apprécions hautement les précieuses contributions et contributions des ambassadeurs, qui élargiront l'exposition de notre marque et aideront CoinEx à se développer en une plate-forme d'échange plus internationale."

Pour utiliser au mieux les forces personnelles de chaque ambassadeur, il existe quatre catégories d'ambassadeurs CoinEx aux responsabilités différentes. Les parties intéressées peuvent postuler pour toutes les catégories qui leur conviennent le mieux:

Ambassadeur référent: invitez de nouveaux utilisateurs à s’inscrire et à échanger sur CoinEx pour augmenter le trafic de la plateforme;

Ambassadeur du marketing: promouvoir CoinEx à travers des activités de marketing en ligne et hors ligne pour accroître la notoriété de la marque;

Ambassadeur Opération: fournir un support client pour CoinEx et aider à créer des contenus dans différentes langues;

Ambassadeur d'affaires: fournissez des rapports de recherche sur les crypto-monnaies ou recommandez des ressources de coopération à CoinEx.

CoinEx travaillera en partenariat étroit avec les ambassadeurs et se consacre pleinement à être une ressource complète qui soutient les ambassadeurs avec une large plate-forme pour réaliser leur vision personnelle, établir des liens et poursuivre de nouvelles compétences, tout en encadrant et en servant les membres de la communauté CoinEx.

Si vous êtes intéressé, veuillez visiter https://www.coinex.com/activity/ambassador pour plus de détails et soumettre des candidatures.

[CoinEx Program Veleposlanika]

Ako ste veliki obožavatelj blockchaina ili kripto valute, spremni sudjelovati u razvoju, izgradnji robne marke i promociji CoinExa, dobrodošli ste pridružiti se CoinEx timu Ambasadora!

CoinEx Program Veleposlanika uspostavljen je kako bi prepoznao i podržao one aktivne i predane vođe i utjecaje koji će pridonijeti CoinExovoj zajednici. Sadrži velikodušan ekskluzivni sustav nagrađivanja, uključujući mjesečnu plaću do 10.000 USD, visok omjer provizije do 40% transakcijskih naknada, promotivne fondove, prilagođene certifikate i poklone, vrhunske obuke, kao i interno testiranje novih proizvoda.

"CoinEx se svjesno trudi povezati više s našom zajednicom, tako da je ovaj program veleposlanika naš sljedeći logični korak", rekao je Haipo Yang, izvršni direktor CoinEx-a. "Izuzetno cijenimo dragocjene doprinose i doprinose veleposlanika, što će proširiti izloženost naše marke i pomoći CoinExu da preraste u međunarodniju platformu za razmjenu."

Kako bi se najbolje iskoristile osobne prednosti svakog veleposlanika, postoje četiri kategorije CoinExovog ambasadora s različitim odgovornostima. Zainteresirane strane mogu se prijaviti za sve kategorije koje im najbolje odgovaraju:

Preporuka Veleposlanik: Pozovite nove korisnike da se registriraju i trguju na CoinEx-u kako bi povećali promet na platformi;

Marketinški Veleposlanik: Promovirajte CoinEx putem mrežnih i izvanmrežnih marketinških aktivnosti za širenje svijesti o marki;

Operativni Veleposlanik: Pružiti korisničku podršku za CoinEx i pomoći u stvaranju sadržaja na različitim jezicima;

Poslovni Veleposlanik: Pružite izvještaje o istraživanju kriptovaluta ili preporučite CoinEx resurse za suradnju.

CoinEx će usko surađivati ​​s ambasadorima i potpuno je posvećen tome da je sveobuhvatan resurs koji podržava ambasadore širokom platformom za realizaciju njihove osobne vizije, uspostavljanje veza i ostvarivanje novih vještina, uz mentorstvo i služenje članovima CoinEx-ove zajednice.

Ako ste zainteresirani, posjetite https://www.coinex.com/activity/ambassador?tab=Intro za više detalja i pošaljite prijave.

[The CoinEx Ambassador Program]

If you are a big fan of the blockchain or cryptocurrency, willing to participate in the development, brand building and promotion of CoinEx, you are welcome to join the CoinEx Ambassador Team!

The CoinEx Ambassador Program is set up to acknowledge and support those active and committed leaders and influencers who will contribute to the CoinEx’s community. It features a generous exclusive reward system, including monthly salary up to $10,000 USD, high commission ratio up to 40% of the transaction fees, promotion funds, custom certificates and gifts, high-end trainings, as well as internal testing of new products.

“CoinEx has been making a conscious effort to connect more with our community, so this Ambassador Program is our next logical step,” said Haipo Yang, CEO of CoinEx. “We highly regard ambassadors’ valuable contributions and inputs, which will expand our brand’s exposure and help CoinEx grow into a more international exchange platform.”

To best utilize each ambassador’s personal strengths, there are four categories of CoinEx Ambassador with different responsibilities. Interested parties can apply for any categories that suit them best:

Referral Ambassador: Invite new users to register and trade on CoinEx to increase the platform’s traffic;

Marketing Ambassador: Promote CoinEx through online and offline marketing activities to expand the brand awareness;

Operation Ambassador: Provide customer service support for CoinEx and assist in creating contents in different languages;

Business Ambassador: Provide cryptocurrency research reports or recommend cooperation resources to CoinEx.

CoinEx will partner closely with ambassadors and is fully dedicated to being a comprehensive resource that supports ambassadors with a broad platform to realize their personal vision, establish connections and pursue new skills, while mentoring and serving CoinEx’s community members.

If you’re interested, please visit https://www.coinex.com/activity/ambassador for more details and submit applications.