Blockchain Archives - Page 5 of 9 - Winklix

January 6, 2022

What Is an Initial DEX Offering (IDO) and Why Do We Need Them?

What Is an Initial DEX Offering (IDO)?

An initial DEX offering, or IDO, is a new and exciting type of decentralized and permissionless crowdfunding platform, which is opening up a new way of fundraising in the crypto space.

If a project is launching an IDO, it means the project is launching a coin or token via a decentralized liquidity exchange. This is a type of crypto asset exchange that depends on liquidity pools where traders can swap tokens, including crypto coins and stablecoins. For instance, USDT/ETH is a liquidity pair.

On CoinMarketCap’s ICO calendar, there is a list of upcoming, live and past projects that are fundraising. The projects are categorized based on the various stages of its fundraising – IDO, IEO, private sale, public sale and crowdloan. As of August 2021, the past few months of projects fundraising are IDOs, perhaps signalling its popularity as a fundraising method.

IDO – a Better Crypto Fundraising Model?

IDOs are the successor of other crypto fundraising models, including initial coin offerings (ICOs), security token offerings (STOs) and initial exchange offerings (IEOs). Offering better and immediate liquidity at every price level due to its mechanics, IDOs are an excellent choice for new projects and startups keen to launch a token and access immediate funds.

Unlike the aforementioned fundraising methods, IDOs are generally considered a fair way to launch a new cryptocurrency project by avoiding pre-mines, which is an issuance system that favors project founders over community members.

The first ICO was the Mastercoin ICO in July 2013. In 2014, Ethereum raised money with a token sale, raising 3,700 BTC in its first 12 hours, roughly equivalent to $2.3 million at the time.

The first IEO took place on April 17, 2019, launching on the Idax, BitForex, Bit-Z and Bit-M exchanges. Whereas, in June 2019, Raven Protocol announced that it was introducing the first-ever IDO, which would be listed on Binance DEX.

What Are Some Successful Projects Launched From IDOs?

Despite being the first, and even claiming in their blog that they didn’t know what an IDO was as it hadn’t been done at the time, Raven Protocol is considered a successful project.

Raven Protocol IDO

This is a decentralized and distributed deep-learning training protocol of deep neural networks. The Raven Protocol is working at providing cost-efficient and fast solutions that use the blockchain to transform the AI and machine learning industries, which are currently dominated by major corporations. With the aid of the native RAVEN token, contributors receive rewards by sharing their computer resources while the utility token is used for AI training.

Universal Market Access Protocol IDO

Another successful IDO project launch, even though its IDO had initial issues, is the Universal Market Access (UMA) protocol. This enables DeFi developers to build synthetic assets on Ethereum, which are collateral-backed tokens whose value changes. Last April, it launched its token sale via decentralized exchange Uniswap with a starting price of $0.26 per token. In order to get that price, UMA had to place $535,000 in Ethereum into a newly created liquidity pool.

Notably, though, because token pricing on Uniswap works with a bonding curve rather than order books, the UMA token price quickly ramped up as investors lined up to purchase the token. As a result, traders attempted to get ahead of others by paying higher gas costs, which, ultimately, led to UMA’s token price jumping more than $2 minutes after the launch. It eventually stabilized at just over $1, with some buyers complaining that they bought at a higher price than pre-sale investors. This, however, highlights the issue with Uniswap rather than UMA.

Despite this initial setback, UMA currently has a market capitalization worth over $1.5 billion, with one token costing more than $25.

SushiSwap IDO

Another similar example is that of SushiSwap, a decentralized crypto exchange built on Ethereum, which is attempting to take the place of Uniswap as the most popular Ethereum-based decentralized exchange. Last September, SushiSwap users reportedly migrated over $1.14 billion of Uniswap’s locked crypto assets to the SushiSwap platform.

Interestingly, rather than issuing an ICO for SushiSwap, the platform rewarded liquidity providers (LP) on Uniswap by staking their LP tokens on SushiSwap. For this, users were rewarded in SUSHI tokens. During SushiSwap’s first two weeks, 1,000 SUSHI tokens were issued every Ethereum block, roughly every 12 seconds, to users who staked their Uniswap LP tokens on SushiSwap’s initial protocol.

Why Do We Need IDOs?

When ICOs and token sales became popular in 2017, raising an estimated $4.9 billion by the end of the year, many projects were attempting to solve problems using the blockchain. While many have gone on to succeed, with far more failing, it’s hard to avoid the fact that there are several issues with ICOs: they’re centralized and vulnerable. Other notable weaknesses of ICOs include third-party discrimination, vulnerability to theft and human error and a lack of privacy.

With the decentralized nature of IDOs, this new fundraising model is attempting to solve the issues of ICOs while adding new possibilities to the crypto market. By crowdfunding with IDOs, entrepreneurs can release a blockchain product that goes beyond malicious third-party influencers, while eliminating any issues regarding hackers and human error. Not only that, but token buyers and holders’ coins are instantly secured on their wallet and private keys.

Advantages of an IDO

An initial DEX offering has many clear advantages compared to initial exchange offerings (IEO) and initial coin offerings (ICO).

Let’s list a few of those here.

When raising funds for a project through an IEO or ICO, projects are first required to pay exchange fees and wait for a project to receive approval by the exchange before it’s listed. With IDOs, projects don’t have to pay high fees and don’t require anyone’s permission as it’s a completely decentralized offering.

Additionally, instead of waiting for an exchange to approve a project, vocal community members are the ones who vet projects and tokens, which opens the door for small projects and massive collaborations.

Compared to IEOs and ICOs, which involve an initial waiting period, IDOs provide immediate access to liquidity and trading. Added to that, IDOs help streamline users by delivering a secure wallet and trading platform support that’s built into one interface. It’s also possible for IDOs to support several types of wallets, thus simplifying the user’s experience.

Where Are IDOs Headed in the Future?

IDOs are the newest way for crypto projects to get their tokens out to the public, but just with ICOs, IEOs and STOs, improvements are still needed. This is evidenced by UMA’s IDO. With IDOs, though, a decentralized exchange means there is a lack of control mechanism. When it comes to fundraising, it’s important to have some form of control to remove token price changes or have KYC regulations, which are noted in ICOs, IEOs, and STOs.

Another improvement that should be focused on is scalability. Right now, only decentralized finance (DeFi) projects have raised money through IDOs; however, that’s not to say other projects within the crypto space can’t use this form of crowdfunding. Of course, for these projects to take off, they’ll need some interest from existing DeFi users to invest in a project’s token.

Why? Simply because using DeFi platforms is a learning curve, which may be a barrier to the average crypto trader. Another improvement would be to boost awareness and education of DeFi as this industry grows.

The concept behind crypto is to open the doors of finance by making it decentralized. IDOs are one step to making this happen, but who’s to say if a new project is the next best thing or a rug pull waiting to happen? Consequently, it’s difficult to say if a particular coin is worth X amount.

Another factor to consider is that despite the rising interest in IDOs, centralised exchanges such as Binance or Coinbase still have control over the market. Investors aren’t asking when the next IDO listing is taking place. Right now, they’re interested in when Coinbase is going to list a specific coin. Of course, this will most likely change as awareness grows around decentralized exchanges (DEXs) and DeFi in general.

The future of IDOs could be bright, but more awareness is needed. Not only that, but DeFi users are only a small fraction of the overall crypto market that is still a relatively niche field, but exponentially growing in size. That being said, as of August 2021, based on CoinMarketCap ICO calendar, the past few months of projects fundraising are largely IDOs.

November 30, 2021November 30, 2021

How Blockchain Spurs the Internet of Things?

IoT is a highly disruptive 21st-century technology that aims to deliver a connected world. Essentially, IoT connects people, places, and things, offering huge prospects for value creation and capture.

IoT promotes an interacted world where different things exchange measured data to create a fully connected ecosystem. The analytical capabilities of this technology use this data to gather valuable insights and convert them into action, impacting business processes and resulting in enhanced convenience.

That being said, there are still many security and technical concerns associated with IoT that remain unaddressed. And the most important ones are security and scalability. But many researchers have noted that “blockchain”, another breakthrough technology has the potential to address some of the greatest IoT security and scalability concerns. In fact, the convergence of these two technologies opens up a space of pretty unrestrained possibilities. Several mobile app development companies are experimenting with these two disruptive technologies to deliver unparalleled products.

Blockchain and IoT- An Overview

Blockchain is a quickly emerging technology that comes with unique benefits and capabilities. Also known as distributed ledger technology (DLT), it comprises distributed digital ledgers that reside on the internet and are shared between participants. Any events or transactions recorded in the ledger cannot be later removed or amended.

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Blockchain has three fundamental properties: distribution, decentralization, and immutability. And all these properties can benefit IoT. Let’s understand this with an example.

Here, we will talk about a jewelry store that is monitored by surveillance cameras that act as IoT devices. Now for an intruder, hacking into the database where all videos from the camera are stored is easy. Thus, the security aspect is not so strong and can be easily compromised.

However, with the distributed aspect of blockchain, the data is replicated across several computer systems. This makes hacking very challenging since there are many target devices to hack. In other words, blockchain technology creates redundancy in storage that adds an added layer of protection and addresses the security challenges associated with IoT devices.

Moving on, let’s assume that the intruder is captured and he tries to plead innocent in court. He claims that the recorded video is fake evidence. Here, the immutability characteristic of blockchain comes into play. Essentially, this implies that if any change is made to the stored data, then it will be automatically detected. Thus, if anyone tries to tamper with the data, blockchain technology will detect it.

Now coming to the decentralization aspect of blockchain, it must be noted that although this is a major issue when storing data from IoT devices, it can still be used to one’s benefit.

Decentralization means that the data from IoT devices is stored across computers that may belong to different entities. And this may risk the leak of sensitive data that is vital to your organization.

The best alternative to this is to store all sensitive data in a central data warehouse and using blockchain technology while permitting access to the different parties. This will help you find out who accessed your data from the warehouse and for how long. Furthermore, any outsider requesting access to your data will go through you, thereby enhancing privacy and confidentiality.

The Benefits of Blockchain and IoT

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The convergence of blockchain and IoT opens up many new possibilities for businesses and ultimately helps to minimize inefficiencies, reinforce security, and improve transparency for all involved parties. Here, we will look at the different ways in which blockchain can accelerate the Internet of Things and address the various concerns associated with it.

No Scope for Data Tampering

As mentioned above, blockchain comprises distributed digital ledgers which are tamper-resistant. Thus, none of the involved parties can tamper with the data at any cost. This helps to improve trust among the parties.

Enhanced Security

Security is a prime concern with IoT devices. However, using blockchain to store IoT data is an excellent way to add an enhanced layer of protection, dissuading hackers from getting access to the network. Also, blockchain adds encryption while the data is being transmitted and stored. It removes a single point of failure and ensures to quickly locate the weak link in the entire network.

High Level of Transparency

Blockchain technology brings in a great level of transparency by rigorously verifying and allowing transactions originated only by trusted parties. It offers transparency by determining who has access to the data, who is transacting, and a clear record of all past transactions. Thus, if there is any kind of data leakage, its source can be easily tracked down.

Seamless Coordination

Blockchain enables better coordination among the billions of IoT-connected devices. The distributed ledger technology makes it easy to process a large number of transactions at the same time, and thus, improves synchronization among the interconnected devices.

Reduction in Costs

Blockchain technology enables IoT app development companies to reduce their processing overhead costs. By automating the entire task of transaction validation and processing, the companies can move towards a more proactive ecosystem with diminished costs.

Blockchain is secure and encrypted by design. It involves several independent nodes that verify the updates to the chain much before the update itself. And this prevents harmful and nefarious actions from occurring. Furthermore, blockchain helps to create a transparent ecosystem that promotes trust and reduces costs.

Things to Consider Before Merging Blockchain and IoT

It is no doubt that blockchain and IoT are an incredible combination. However, the two technologies are not evolving at a similar pace. And this has led to some challenges in their adoption.

For instance, most IoT devices come with limited battery life. Unlike others, they are not run on Wi-Fi or any other power source at all times. And thus, it is not feasible to have an intensive blockchain transaction system running on such a small and vulnerable device. Apart from this, few other aspects need to be considered before using these two technologies in conjunction.

Scalability

The number of IoT devices is on the rise. And this translates to humongous amounts of data collected by a network of sensors on a regular basis. However, managing this massive data is a big challenge, especially due to lower transaction processing speeds. Thus, before merging blockchain with IoT, you must devise a strong data model that can save time and prevent hassles when bringing the solution into production.

Network Privacy

Blockchain works on the principle of decentralization. This means that the computers that store the data from IoT devices may be under the control of different entities. So, if not implemented properly, there is a huge risk of losing the user’s sensitive data to third parties.

Sensors

Sometimes, sensors may be affected or altered by external interventions. Consequently, they may lose their integrity and reliability. It is important to ensure a safe and secure environment for recording data and transactions.

Key Takeaway

Both IoT and blockchain are evolving technologies that hold immense potential. However, due to some security and technical concerns, they are still lacking widespread adoption. That said, there are adequate use cases of the union of two technologies in supply chain, truck leasing, and oil operations industries that are yielding immense benefits.

Companies should start considering the implementation of IoT and blockchain in their business to address significant business issues and enhance productivity. You can easily find a reputed IoT app development to get started today.

September 20, 2021September 20, 2021

NFT: The Fintech Hype in 2021

NFT, or Non-Fungible Token, is a unique cryptocurrency. On a high level, the majority of NFTs are part of the Ethereum Blockchain. As an NFT, anything which exist in digital environment may be sold. And it was in this sector that they first saw use, as representations of distinct, one-of-a-kind digital goods, such as in-game treasures.The use in the blockchain gaming project CryptoKitties is especially well-known. Renowned painters, singers, and digital artists are capitalising on the new craze and selling out.

The most prominent NFT platforms estimate that the typical retail price of an NFT is several thousand dollars.

“Most NFT sites will recommend you to set your sale price at 0.5 ETH, which was around USD 894 on March 19th,” Parker writes (thanks to the cryptocurrency’s extreme volatility, it’s currently nearly $1,300). “A staggering 1.8 percent of Primary Sales ended up selling at the suggested price.”

According to NonFungible, the monthly amount of NFTs exchanged has increased from a few million to $241 million till September 2020. The NFT frenzy is a movement that is causing havoc in the conventional art, game, sports, and insurance industries. Anyone who is has access to an Ethereum wallet and connect to the blockchain network can access the markets with ease .

Non-fungible tokens are abbreviated as NFT. It is created by development firms using the same technology that is used to create cryptocurrencies like Ethereum , Bitcoin or any other currency . As digital money, liquid money, or cryptocurrency is fungible, you may compare the two values. A one-dollar bill can be used in place of a one-dollar bill. The values of one Bitcoin are always the same as the values of other Bitcoin.

The core of NFTs is a transaction protocol or a smart contract. Take a closer look at this phrases . A smart warranty is a self-executing contract that specifies the agreement between the client and the supplier in lines of code. Data is dispersed and decentralised over a network.

To ensure safety, each one has particular information recorded in a contract and blockchain. These contracts interact with blockchain technology and self-generate to their full capacity.

When it comes to NFT marketplace development, the most common NFT tools include OpenSea SDK. Companies may also select third-party providers for developing such services from the pool of vendors available in marketplace .

An expertise blockchain development agency is a tried-and-true way of creating a market that can help you meet all of their requirements. A skilled development team will often give you an end-to-end solution. This method helps you to scale your project in order to attract a larger number of visitors.

Ahead of Time

The burgeoning blockchain and NFT industries have opened numerous doors to digital transformation that we had all of us have never been thought of . However, there are several reasons why the realm of technology has not yet captured the imagination of the masses. Scalability, security, transaction speed, and cost have all been concerns in numerous situations. Several rival implementations are still looking for answers to these problems.

NFT is still a relatively new idea in the world of financial institutions and digital world .

On the other hand, the reach of NFT is expanding for artists and digital producers all around the world. When an artist mints a painting on a blockchain and then transforms it into an NFT, the artwork is validated online as the artist’s original drawing.

If someone downloads it from there, they totally own the piece, with copyrights to the creator. This manner of work is both accessible and verified on a publicly accessible platform.

NFTs allow everyone to participate, providing a fantastic platform for people to explore with their art and more. The early tests began with colourful coins and have already progressed to illusory images.

However, the NFT bubble has spread quicker, and celebrities are getting in on the fun. Rob Gronkowski, a well-known football player, sold NFT playing cards featuring Super Bowl highlights for more than $1.6 million.

Overall, collectors of all kinds are purchasing, fueling the buzz. A new generation of digital artists is banding together to establish new communities centred on NFT markets, converting the buzz into a new element of independence in the art and music scenes. NFT producers tokenize their popularity in the same way as Instagram influencers do.