best-decentralized-crypto-exchanges-for-africans

Best Decentralized Crypto Exchanges for Africans

Decentralized exchanges have emerged as viable alternatives to centralized exchanges over the past few years. In this article, we go in-depth into what decentralized exchanges (DEX) are, and how they function.

best-decentralized-crypto-exchanges-for-africans

Summarily 

  • Decentralized Exchanges (DEXs) bring buyers and sellers together and allow them access to trade without intermediaries.
  • Due to the decentralized nature of DEXes, there are no central authorities to regulate transactions
  • There are lots more tradable coins on decentralized exchanges. This makes them the ideal platforms for most crypto enthusiasts.

Before the emergence of DEXes, Centralized Exchanges (CEXs) like Binance, Coinbase, and LocalBitcoins took the lead role in cryptocurrency exchanges. However, most centralized exchanges operate in a manner that is similar to a bank. Buying and selling digital assets on CEXes requires stringent measures.

As part of the operations of centralized exchanges, third-party services are employed to hold users’ assets during transactions, thus limiting their control during the trading process. Additionally, most CEXes hold users’ assets on their platforms. An identified problem with this approach is that constant hacks and malicious acts usually leave users at risk of losing their assets.

Then came Decentralized Exchanges (DEXes) which offered an alternative in terms of control over one’s assets. But what do DEXes stand for, and how do they operate?

Let’s dive deeper!

Decentralized Exchanges Explained

As the name suggests, Decentralized Exchanges (DEXs) operate in a decentralized manner, without any interference from a third party. In contrast to centralized exchanges (CEXes), decentralized platforms are non-custodial, meaning a user remains in control of their private keys when transacting on a DEX platform. 

Decentralized cryptocurrency exchanges allow users to conduct peer-to-peer (P2P) transactions. This process relies on automated smart contracts. It is also important to note that not all decentralized exchanges have the same infrastructure. DEX gives users the privilege of privacy as it is considered anonymous and comparatively cheap via the principles of automation and self-regulation. Another advantage of a DEX is that it makes the risk of hacking almost impossible. Additionally, on DEXes users have full control of their wallets and funds.

Here are some of the top cryptocurrency decentralized exchanges for Africans:

Our recommendation: Will Decentralized Finance Replace Banks?

dYdX

Founded by Antonio Juliano in 2018, dYdx stands out as a platform that provides decentralized peer-to-peer shorts, perpetuals, lending, and options trading for Ethereum-based tokens. Most popular for short selling and derivatives, dYdX is built on the Ethereum blockchain and runs on the layer-2 protocol of the Ethereum network.

Derived from the mathematical notation for a derivative, dYdx uses a combination of low fees, coin rewards and perpetual futures contracts to gain an edge over other similar decentralized crypto exchanges. dYdX momentarily became one of the leading decentralized exchanges (DEX) by 24-hr volumes following the launch of its governance token on September 8, 2021.

As of the time of this writing, dYdX is seeing over $2 billion in daily trading volumes. dYdX supports an array of trading strategies which include the following; 

  • Short sells allow investors to profit on price decreases and can be used for speculation or to hedge existing positions
  • Fully-collateralized low-risk loans for short sellers allow token holders to earn interest fees
  • Options can be used to hedge positions, manage volatility, increase leverage, and more

Uniswap

Launched in November 2018, Uniswap became the first widely-used permissionless Decentralized Exchange that enabled users to trade Ethereum-based tokens directly through a web 3.0 wallet; without any deposits or withdrawals to a centralized order book.

Uniswap provides a one-stop shop for exchanging any ERC20 token with a few clicks without having to worry about KYC, custody, or phishing. By leveraging smart contracts, Uniswap is able to offer autonomous on-chain transactions at marginal costs. Due to its underlying mechanisms, Uniswap’s liquidity pools also have little to no price impact for the vast majority of transactions.

How does it work? 

Uniswap removes the concept of order books in favor of an automated market maker or “AMM” for short. Rather than specifying what price to buy or sell at, users merely select an input and output token while Uniswap provides the best possible market rate. Simply connect a web 3.0 wallet like Metamask, select the asset you want to trade, and the asset you wish to receive. Uniswap automatically processes the transaction and updates your wallet balance.

PancakeSwap

PancakeSwap is a decentralized exchange for swapping BEP20 tokens on the Binance Smart Chain. It is regarded as one of the most popular decentralized applications (DApps) of all time. In less than a year, it has become by far the dominant DEX on Binance Smart Chain, even eclipsing Binance’s own Binance DEX, with over $100 million in 24-hour trading volume.

PancakeSwap uses an automated market maker (AMM) model where users trade against a liquidity pool. Such pools are filled with users’ funds. They deposit them into the pool, receiving liquidity provider (or LP) tokens in return. They can use those tokens to reclaim their share, plus a portion of the trading fees.

The LP tokens are called FLIP tokens. PancakeSwap also allows users to farm additional tokens – CAKE and SYRUP. On the farm, users can deposit LP tokens, locking them up in a process that rewards users with CAKE. Users can stake CAKE tokens to receive SYRUP, which will have further functionality as governance tokens (and as tickets in lotteries).

PancakeSwap platform is designed to allow users to securely trade BNB and a massive variety of BEP-20 tokens without relying on centralized services or losing control over their private keys. As a decentralized exchange, all trades on PancakeSwap are automatically executed via smart contracts — completely eliminating counterparty risks.

Also read: Top Ten Peer-to-Peer Cryptocurrency Exchanges in Africa

SushiSwap

SushiSwap is an Ethereum-based automated market maker (AMM). SushiSwap relies on liquidity pools where users can lock up assets in smart contracts, from which traders can buy or sell assets. SushiSwap is a community-run project that relies on its native utility token, SUSHI, for governance and voting on major protocol developments.

SushiSwap sets itself apart from Uniswap, the original protocol from which SushiSwap copied its code in September of 2020. Since pseudonymous developer Chef Nomi started it as a direct clone of Uniswap, SushiSwap shares a nearly identical source code, except for notable “community-oriented” features that SushiSwap has added, such as staking rewards and a governance token.

Anyone can use SushiSwap’s user-facing web applications to swap tokens on the SushiSwap DEX. When exchanging tokens, a 0.3% fee is charged with 0.25% going back into the liquidity pool. This means that as more exchange transactions are performed, the total supply of tokens in each pool increases. The remaining 0.05% of SushiSwap’s exchange fee fuels the platform’s staking mechanism, SushiBar, providing yet another yield farming opportunity for platform users.

Overall, SushiSwap has made — and continues to make — significant and proactive efforts to prioritize the wants and needs of its community thereby differentiating itself from many other DEXs.

Curve Finance 

Curve Finance is one of the largest DeFi platforms in the world. It is headquartered in Switzerland. Founded by Michael Egorov in January 2020, Curve Finance is a decentralized exchange (DEX) built on the Ethereum cryptocurrency network. It focuses on exchanging stablecoins and other stable pairs at a low fee and minimum slippage using an Automated Market Maker (AMM) protocol.

With just under two years of existence, the ease of upping the ranks has portrayed the increasing potentials of Curve Finance in terms of usage, authenticity, and adoption. As of August 2020, with just months of operating, the exchange boasts over $1 billion worth in deposits, running a daily trade volume of over $60 million.

Curve Finance rewards you for crypto held in your wallet after you have made an exchange and also rewards users who provide liquidity to the decentralized token pool that it operates. Liquidity providers get a portion of the token exchange fees and claims of the native governance token, CRV. They also get an extra share of earnings from Curve Finance integrating their liquidity pool with some third-party DeFi projects.

Speed, efficiency, and continuity were instrumental to the success of Curve Finance as the use of a decentralized liquidity pool and an automated market maker (AMM) protocol was incorporated to swap between coins and reinforce the liquidity of its markets.

Featured article: Private Keys and Cold Storage

Which Blockchain is the most Decentralized?

According to the latest data from data aggregator Staking Rewards, Cardano is the most decentralized blockchain. 

Cardano, an ambitious blockchain platform created by IOHK, has been on a quest to become the world’s foremost blockchain platform, used for everything from dApps to digital identity and blockchain voting. Over 21.75 billion ADA is currently staked on Cardano, representing 69 percent of its total circulating supply.

Are Decentralized Exchanges Safe?

There are certain limitations to cryptocurrency exchanges such as hacking and scam activities. However, DEXes are trustless, meaning users’ funds, privacy, and personal data are well preserved. Decentralized exchange users can easily and securely access a DEX without needing to create an on-exchange account, undergo identity verification, or provide personal information.

How does a Decentralized Exchange work?

DEXes operate without an intermediary broker for clearing transactions. Decentralized exchanges rely instead on self-executing smart contracts to facilitate trading. In the absence of intermediaries (banks, brokers, payment processors), DEXes take on a non-custodial framework and fulfill one of crypto’s core possibilities – fostering financial transactions.

What is the Difference Between Centralized and Decentralized Exchanges?

The difference is in the structure of operation. Centralized Exchanges are regulated exchanges where the platform controls liquidity and regulates transactions. Meaning that users have less control over their assets and have to trust and rely on the exchange completely. However, transaction execution on centralized exchanges can be super fast since users do not need to provide access.

Decentralized Exchanges on the other hand allow users to control their crypto funds by retaining access to their wallets. Users have total control over their assets and do not need to provide any KYC-related information before trading on DEXes. Additionally, there are no restrictions on trade volume.

The disadvantage associated with CEXes is that, in the eventuality of a hack, lots of user funds will be lost. DEXes on the other hand are complicated to regulate and also take a long time to execute orders.

Conclusion

Decentralized exchanges have come to stay. The extra level of privacy that they give users and the freedom to trade without restriction have made them increasingly important to decentralized finance.

But choosing which is better between DEXes and CEXes is all up to user preference. We will be bringing you a comparison post on this subject soon. In the meantime, keep enjoying the benefits of a decentralized exchange.

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will-defi-replace-banks

Will Decentralized Finance (DeFi) Replace Banks

Introduction

It is no longer secret that the new wave of financial innovation – Decentralized Finance (DeFi)  is upon us. This new wave has provided a solid foundation for new financial services to thrive in the crypto space and has often raised the question of – will DeFi replace banks?

will-defi-replace-banks

Summarily

  • Decentralized finance (DeFi) is the ecosystem of blockchain-enabled products and services that replace traditional financial intermediaries with freely accessible, autonomous, and transparent software.
  • DeFi brings about a variety of opportunities that involve a transparent and robust financial system that no single entity controls. It also allows projects to facilitate more functionalities in addition to just money transfer.
  • DeFi protocols such as yielding, staking, lending, and earning allow users’ deposits free from external interventions. It also enables every participant in the DeFi system to gain their own portion of financial sovereignty and control.

Here are some of DeFi protocols that have gained popularity in the DeFi ecosystem recently – Aave, yEarn, Sythentix, Compound, Uniswap, SushiSwap, Kyber Network, Project Serum, Maker, Alpha Finance, Balancer, Curve, and many more.

Although the world of cryptocurrency is steadily expanding and gaining popularity, traditional banks are hesitant to adopt their usage—believing that their inherent risks outweigh their potential benefits. However, regulatory agencies such as the Office of the Comptroller of the Currency (OCC) are working to change banks’ perception of digital assets, believing that these assets could positively drive financial institutions to a new era of innovation and efficiency.

Different views have been raised about the extensive growth of DeFi and how much of an impact it will have on banks. Will banks be forced to adapt their services? Will they create their own cryptocurrencies? Where does that leave the customers?

This post contains some in-depth knowledge about the situation and some of the most fascinating facts about banks and blockchain.

Join me on this trip!

Read: All you need to know about DEFI

What Exactly is DeFi?.

DeFi is an abbreviation of the phrase “Decentralized Finance” which generally refers to digital assets and financial smart contracts, protocols, and decentralized applications (DApps), most of which are built on Ethereum. In simpler terms, it is financial software built on the blockchain that can be pieced together like Money Legos via shared infrastructure.

DeFi, an umbrella term for a variety of applications and projects in the public blockchain space, is geared toward disrupting the traditional finance world. Inspired by blockchain technology, DeFi is referred to as financial applications built on the blockchain.

The origin of DeFi started on three major waves of blockchain innovation across the last decade. Each of which was first met with deep skepticism and has since progressed to acceptance and adoption.

The first era was defined by Bitcoin (invented in 2009), which gave us the distributed ledger technology (DLT), or blockchain, designed to facilitate peer-to-peer transfers of a non-sovereign digital asset. The second wave was defined by Ethereum, which drew from the same underlying distributed, censorship-resistant architecture. However, unlike Bitcoin, Ethereum’s native programming language (Solidity) can be used to create any conceivable application, transforming it into a globally accessible supercomputer.  The third wave was the initial coin offering boom of 2017, which financed a range of projects, some of which have started delivering on their promise of a decentralized financial ecosystem. 

DeFi is the fourth wave, and it builds on a combination of these innovations. The beauty of DeFi resides in the opportunity it offers to anyone in the world to lend, borrow, send, or trade blockchain-based assets using easily downloadable wallets without having to use a bank or broker.

DeFi consists of applications and peer-to-peer protocols developed on decentralized blockchain networks that require no access rights for easy lending, borrowing, or trading of financial tools. Most DeFi applications today are built using the Ethereum network, but many alternative public networks are emerging that deliver superior speed, scalability, security, and lower costs.

Moreso, there has never been a better time than now to be part of the DeFi revolution, as new players emerge from every part of the globe to compete for a slice of the multi-billion dollar pie created by crypto. Research Analysts have suggested that banks will need to consider how to utilize the technology behind cryptocurrencies. If they don’t, there is a possibility they will become outdated and redundant.

Also read: Top 5 Best Crypto Launchpad Platforms in 2021

The Emergence of Central Banks Digital Currencies (CBDC)

central-bank-digital-currencies

These days, central banks worldwide are fired up about the idea of digital currency. Specifically, they are increasingly intrigued by the idea of central bank digital currencies (CBDCs), which are essentially digital versions of traditional fiat currencies – think digital dollars.

CBDC is a digital form of currency that is backed by a Central Bank and has legal tender status. This definition means it is recognized by law as a means to settle debts or meet financial obligations such as tax payments. CBDC is reasonably similar to the money in your account only that it is a digital representation of that value which is much more convenient and efficient for transactions.

Banks adopting cryptocurrency have recognized the need to play a significant role in the crypto industry, adding some much-needed assurance and security to the largely unregulated environment. Adopting cryptocurrencies and blockchain technology overall helps streamline processes and take banking into the next generation of efficiency and innovation.

Digitalization has also greatly reduced the use of cash in several countries. CBDC would provide a payment media which has all the attributes of physical cash but is less subject to theft and loss. 

Some key factors driving interest in CBDC today include the following:

  • CBDC would increase financial inclusion for disadvantaged groups that do not have access to bank accounts (banking the unbanked). 
  • CBDC may head off the threat to monetary sovereignty from stablecoins issued by global digital services companies like Facebook, which would threaten central banks’ ability to create and regulate monetary policies. 
  • CBDC would provide a secure reliable and reguated currency, free from the dangers of fraud, hacking, money laundering and financing terrorism.

CBDC is a global innovation. Reason being that CBDC and stablecoins could challenge the international monetary system. Digitalization in money may as well promise to be the future.

You might be interested in: Top Ten Peer-to-Peer Cryptocurrency Exchanges in Africa 

Benefits of DEFI

As of February 2021, the total value locked (TVL) in the DeFi ecosystem amounted to a staggering $40 billion.

Decentralized finance has had a profound influence on the way banks operate and has introduced shifts in the general financial ecosystem. At present, there are many contradictory views regarding decentralized finance for the right reasons. Some perceive DeFi as a revolution, while others think of it as an opportunity. Also, there are people who consider it a scam.

Whatever the case may be, there are major advantages of using DeFi which include transaction cost reduction, speed, and security. Anyone with an internet connection has access to blockchains and cryptocurrencies. Users are able to make trades and move their assets whenever they want without having to wait on bank transfers or pay bank fees. 

DeFi is incredibly fast. 

Here are some advantages attributed to Decentralized finance:

  1. Permissionless

DeFi helps in reducing the need to depend on corporations and institutions for oversight, data storage, server space, and other factors. Blockchain networks are successful in achieving all these aspects by ensuring that specific transaction histories can be easily circulated throughout all members. The permissionless nature of blockchain in DeFi applications could also get the support of interoperability from the blockchain. As a result, it can ensure flexible options for ensuring different types of third-party integrations.

  1. Immutability

With the help of immutability, it is practically impossible to manipulate any record on the blockchain network. In addition to the features of decentralization, immutability offers an assurance of security. Interestingly, immutability ensures the integrity of DeFi solutions in carrying out financial transactions.

  1. Transparency

Transparency is yet another notable benefit of DeFi. Decentralization entails better transparency, and the distributed ledger features information about all activities on the blockchain network. The cryptographic principles for blockchain ensure the documentation of information only after verification of authenticity. This would help users in identifying and avoiding possible financial scams and negative business practices.

With a proper audit trail, DeFi applications could make it easier to identify who made changes to a transaction, at what point of time, and in which way. As a result, there would be little left to compromise the integrity of the decentralized financial ecosystems.

  1. Lending and Borrowing Applications

DeFi has helped foster the development of peer-to-peer lending and borrowing solutions. Such types of lending and borrowing solutions offer substantially promising benefits for end-users. At the same time, they also provide the assurance of smart contract integration. The facility of such functionalities ensures the elimination of intermediaries like banks which are generally responsible for the verification of parties in a transaction. As a result, DeFi enables a faster and easier verification process in lending and borrowing applications.

  1. Tokenization

Tokenization is one of the notable topics which have emerged recently in the blockchain sphere. Tokenization has different use cases. Real estate tokenization helps you achieve fractional ownership of physical properties. On the other hand, security tokens serve as digital shares . Most important, tokenization ensures better exposure to other assets, physical as well as digital. The assets could include digital currencies, fiat currencies, oil, or gold. You can read more about asset tokenization here.

Our recommendation: Top Ten NFT Marketplaces for Africans in 2021 and Beyond

Can banks use DeFi?

DeFi applications aim to recreate traditional financial systems, like banks and stock exchanges, with cryptocurrency. Most DeFi applications currently run on the Ethereum blockchain, although similar instances are emerging on the Polkadot, Solana, and Cardano networks.

As crypto becomes more mainstream, the success of challenger banks is now bringing about a revolution in the finance industry. Research shows that almost a quarter (23%) of insurance, banking, and trading companies have now tested services based around DeFi, while over half (55%) are already assessing it and its applications. 

The latest crypto announcements of large banks around the world and the recent authorization of bitcoin Futures trading in NYSE are confirmations.

Is DeFi a threat to Banks?

The answer to this is a big YES

According to Sifted, DeFi is not just another unwelcomed disruption for incumbent banks, it is an existential threat. This blockchain-enabled innovation has the potential to upend the global financial system by stripping transaction costs and stepping up the fight for next-level efficiency and speed. The transaction banking industry is beginning to see DeFi’s potential to overhaul the inflexibility of present processes. They now view DeFi as a potentially significant growth engine and disruptive force.

If banks want to embrace DeFi, they need to embrace this shift by acknowledging that crypto is here to stay, and there are trillions of dollars in value stored within it. A pivotal move would be to allow consumers wider access to that value via their banking services.

Does DeFi have a Future?

Cryptocurrency’s promise is to make money and payments universally accessible to anyone, no matter where they are in the world.

The Decentralized Finance movement takes that promise a step further. Imagine a global, open alternative to every financial service you use today — savings, loans, trading, insurance, and more — accessible to anyone in the world with a smartphone and internet connection.

It is safe to say that Decentralized Finance (DeFi) will make a game-changing impact on the world in dozens of different economic dimensions. DeFi can address many of the flaws in the existing financial systems, including giving the unbanked access to the financial system.

Conclusion 

DeFi has reached an important intermediate step to becoming a substitute for traditional finance solutions. While crypto-based finance solutions were merely capable of realizing efficient value transfers in the past, today, DeFi has become a force that is revolutionizing global finance.

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Top 5 Best Crypto Launchpad Platforms in 2021

best-crypto-launchpad-platforms

For anyone seeking to invest in young and most promising crypto projects, crypto launchpad platforms present some of the best opportunities for early investors. In recent years, crypto launchpads have become a mainstay in the cryptocurrency industry. They provide legitimacy to exciting projects and serve as a meeting ground between crypto project teams and eager investors.

But the best crypto launchpads go further than that. In this article, I take you through the best DeFi launchpad communities you should join for the best crypto projects in 2021 and into 2022.

In this article I have covered:

  • What are Launchpads?
  • Best crypto launchpads in 2021
  • How to use crypto launchpads
  • Conclusion

Quickly, the best crypto launchpads in 2021 (and into 2022) are:

  • Binance Launchpad
  • Polkastarter
  • Launchpool
  • Kucoin Spotlight
  • Safelaunch

Now, let’s dive deep!

What is Launchpad in Cryptocurrency?

A cryptocurrency launchpad is a platform that serves as a ground where the most exciting best crypto projects meet with a community of investors. What launchpads do is to provide early access to their communities to invest in projects that have been verified and whose potentials are considered high.

Prior to 2017, cryptocurrency launchpads were not common, back then crypto projects will conduct token sales on their own platforms and interested investors can make purchases right there. Sooner it became evident that this mode of token sale was a means to scam lots of unknowing investors.

To solve this trust problem, crypto launchpads came to be. Launchpads usually verify the authenticity of crypto projects and weigh the value they bring to their communities.

Following verification, crypto launchpads then offer their communities early investor access through cryptocurrency presale. This presale is usually referred to as Initial Exchange Offering (on Centralized exchanges) and Initial Decentralized exchange offering (IDO) on decentralized exchanges.

It is worthy of note that launchpads can operate on centralized exchanges like Binance, and on decentralized, dedicated launch platforms like Safelaunch. Irrespective of the kind of exchange that a launchpad operates, the most important thing is that investors can invest at a cheaper asking price from the initial stage of a project. This way, the most promising crypto projects meet with the most eager investor communities.

In summary, any platform that presents new crypto projects to its community for early investment is a launchpad.

That been said, here are the best cryptocurrency ICO/IDO launchpads you should consider joining:

Also read: Top Ten Peer-to-Peer Cryptocurrency Exchanges in Africa

Binance Launchpad

Binance is undoubtedly the most popular crypto trading platform in the world. It also has one of the best crypto launchpads you can find around. Usually, the Binance launchpad unearths the most promising crypto projects built on the Binance Smart Chain (BSC).

Token sales on the Binance ICO Launchpad are usually done using Binance’s native token (BNB) and all potential participants are expected to hold it to be able to make token purchases. As expected, token issuance is mostly done in BEP.

Some of the most successful Binance launchpad projects to have recently emerged include Axie infinity, WazirX, Kava Labs, and Polygon.

Projects on the Binance incubator system will securely benefit from a dedicated community of investors, and as long as the project has huge potentials, it is almost guaranteed a large investment pull. Additionally, projects that successfully launch on Binance usually go on to become a huge crypto success.

PolkaStarter

Polkastarter is a launchpad that is focused on the Polkadot ecosystem. So, if you have a project that wants to run on Polkadot, Polkastarter is just the right place for your IDO. Although, the platform tends towards Polkadot, still, It is a decentralized launchpad for cross-chain token pools and auctions.

PolkaStarter currently supports decentralized offerings on the Ethereum network, Polygon, the Binance Smart Chain, and of course, Polkadot. 

You are required to hold the platform’s native token – POL – in order to successfully participate in IDOs. However, there are some project launches that only allow you to make a minimum deposit of 3000 POL.

To stay up to date on potential project investments, it is advisable you check the PolkaStarter website regularly for upcoming launchpad listings. You also get updated information on their Twitter and Telegram accounts.

Some of the crypto launchpad projects that have raised funds on the platform are TosDis, TENET, and MahaDAO.

LaunchPool

LaunchPool is one of the fastest-growing upcoming launchpads in the crypto space. Its pull is definitely not yet at the level of the Polkastarter and Binance Launchpad because the platform launched in February 2021. 

It operates as a decentralized platform where funds can be raised for different projects cross-chain. The project verification process on LaunchPool is strict and only the most promising projects are allowed on the platform.

Since its launch, LaunchPool has conducted more than 20 IDOs on its platform. It proudly announces itself as an egalitarian platform that provides its community with equal opportunity. To participate in any of its Allocation Mining Events (Initial offering), you are required to be an LPOOL token holder – the official token of Launchpool.

KuCoin Spotlight

The Spotlight is KuCoin’s version of crypto project launchpad. Spotlight helps blockchain projects raise funds by improving industrial influence and attracting market attention. Projects on Spotlight can easily raise funds from KuCoin’s large pool of regular traders/investors before ultimately getting listed on the KuCoin exchange.

All IDO participants are required to complete KYC verification in compliance with national regulations. It also requires investors to purchase its native token – KCS – to be qualified as a participant during IDOs. 

Some of the notable IDOs to have graced the platform are Hot Cross and Polkadex.

SafeLaunch

Safelaunch is a fully decentralized community venture capital and project incubator platform for promising projects on the Binance Smart Chain (BSC). The platform combines a launchpad, research-backed project incubator, liquidity mining platform, and world-class advisory team to help innovative BSC projects raise funds leveraging decentralized finance.

For SafeLaunch, increasing its venture community’s investment portfolio through verified and carefully assessed project listing, is its priority.

To be a part of its token offerings, you will need to buy SafeLaunch’s native token – SFEX. Upon purchase, you are entitled to investing in any new project on the platform. Safelaunch periodically makes announcements about upcoming IDOs via its website, telegram page, and Twitter account.

Some of the recent projects to have raised funds from the platform include Vikingschain, Privi Pix, and Flourishing Capital.

Also read: Top Ten NFT Marketplaces for Africans in 2021 and Beyond

How to Use Crypto Launchpads

To successfully use a crypto launchpad, there are a few steps you need to take.

First, you need to know the rules and regulations of the particular launchpad you want to use. Such rules might include token lock period (for native tokens), minimum token stakes, and Know Your Customer (KYC) rules. KYC rules are especially important if you are using a centralized exchange launchpad like Binance.

Second, you need to be part of the launchpad’s social network. Most launchpads these days keep their social media accounts active. They make up-to-date announcements on these platforms. Basically, social media platforms like Telegram and Twitter are useful tools to most launchpads.

Check websites often. Most launchpad platforms keep their community abreast by putting up details about upcoming IDOs and projects on their website. A typical example of such is Safelaunch. Once you read about the upcoming ICO/IDO you can be better prepared to invest early and complete all necessary procedures.

Once you have successfully followed these steps, you are on course to being a good crypto launchpad user and project investor.

Conclusion

I have walked you through some of the finest project launchpads in 2021 and going into 2022. I hope that you find this piece really useful as you seek to expand your cryptocurrency investment portfolio.

Watch out for my next post, and in the meantime make sure you enjoy this.

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ALL YOU NEED TO KNOW ABOUT DEFI

 What is DeFi? 

 DeFi is short for “decentralized finance,” a term used to describe financial applications in cryptocurrency or blockchain built for the disruption of financial intermediaries. It is important to note that they are financial services solutions. They are created on blockchain networks like the Ethereum and Bitcoin blockchain. 

The essence of this category of crypto is to recreate traditional financial instruments in a decentralized environment, outside of the control of governments and private entities or individuals. 

According to Alex Pack (Managing Partner at Dragonfly Capital) – “The goal of DeFi is to reconstruct the banking system for the whole world in this open, permissionless way,” 

DeFi is disparate because it redefines the use case of blockchain from painless value transfer to more convoluted financial use cases. Maker is credited as the first DeFi coin, after which we’ve had many others such as Chainlink, Uniswap, Dai, amongst others. 

To understand DeFi, we must discuss Smart Contracts and the Ethereum blockchain 

Smart contracts help you exchange value of any form in a conflict-free way without the use of a 3rd party. Most “DeFi” applications are built on top of Ethereum, the world’s second-largest cryptocurrency, and the complexity of financial applications that can be created on the ERC-20 blockchain is highlighted by Ethereum creator Vitalik Buterin back in 2013 in the original Ethereum white paper. 

Ethereum is flexible for the creation of smart contracts – which automatically executes transactions if certain conditions are met. Ethereum programming languages liike Solidity, are specially designed for creating and utilizing such smart contracts: rules governing under what conditions money can change hands. 

Importantly, smart contracts not only dictate the rules and penalties around an agreement in the same way that a traditional contract does, it also automatically enforces the rules of the contract, such that the required conditions are either met, or there’s no exchange of value. 

For instance, Flash Loans (an uncollaterized loan option) uses smart contracts to enforce a rule that the money won’t be loaned out unless the borrower pays all outstanding debt back; or that money can only be transferred at a certain temperature level based on figures from Weather.com. Pretty cool right?…haha..I know. 

With smart contracts at the core, dozens of DeFi applications are operating on Ethereum, some of which are explored in this writing. Although Ethereum has scalability challenges, it is expected that Ethereum 2.0, an upgrade to Ethereum’s current network provides lasting solution to the scalabity issues on its network. 

Bitcoin as a DeFi 

Bitcoin and Ethereum are the original DeFi applications. Both are controlled by large networks of computers, not centralized authorities. Ethereum stands apart from Bitcoin because of its ease of use in building other forms of decentralized applications beyond simple transactions. While Bitcoin is rather simpler in its use for payments and other straightforward transactions and a good number of investors use bitcoin as a store-of-value that protects against inflation (just like gold), Ethereum has been instrumental in helping startups crowdfund their business. 

This is not to say that Bitcoin cannot be flexed for complex transactions. For example, companies such as DG Labs – a remittance settlement company, and Suredbits, are working on a Bitcoin DeFi technology called Discreet Log Contracts (DLC) where through preset conditions, wealth can be distributed between two parties without revealing the conditions on the blockchain. 

Why Is DeFi Growing? 

Decentralized finance is becoming popular for several key reasons, which are the same reasons for the growing interest of the public in Bitcoin itself. Banks are not needed and neither is any other 3rd party, you don’t have to trust the other party, there is a 24/7 access, and settlements are comparatively rapid. 

One might then wonder why DeFi are ever needed when Bitcoin already exists. Direct purchases isn’t the only type of financial solution needed. There are other finance needs such as loans, insurance, crowdfunding, derivatives, betting and more, all of which are to be chiefly tackled by various DeFi coins as a result of the limitations birthed by the relative simplicity of the Bitcoin blockchain. As an addition, DeFi is permissionless, censorship resistant, immutable, programmable and offering minimal counterparty risk. 

The total valuation of DeFi coins as of February 2021 is around $35billion which signals the market’s expectation of the future performances of these projects. So, if you are looking to make some cool cash from DeFi, below, we discuss some of the most common use cases for DeFi coins. 

Lending and borrowing 

Lending services appear to be the most adopted DeFi projects with coins like Dharma Lever, Compound and Celsius Network rising as pace setters for decentralized lending services. The term “Yield farming” has suddenly become a crypto lingua which means not only receiving interests in return for lending, but also receiving digital tokens as compensation. Although DeFi lending coins are not there yet, it is expected that the future of DeFi would be such that would have a big impacts on lives of people. The creators’ and users’ dream is that one would be able to buy a house or property on a DeFi platform under a mortgage agreement where repayment is made over a period of years. The deeds of the property would be put up in tokenized form on a blockchain ledger as collateral and, where there is default repayment, the deeds would mechanically shift to the lender. This process will require no lawyers or banks and could positively affect the price of properties since service charges would be excluded. 

Derivatives, Margin Trading, & Prediction Markets 

dYdX and Nuo as of the time of this article can allow users to leverage up to 4x and 3x respectively, thus encouraging shorts, hedging and margin trades. Financial solutions are also springing up for Prediction markets, with Augur (decentralized betting platform with no limits attached) being the most relevant example. One key factor held constant among all these financial solutions, is that they require no third party, bank or clearing house, and usually are entirely permissionless. DeFi for Prediction markets can be used for betting on the outcome of future events like elections, and are able to do this without intermediaries. 

Decentralized exchanges (DEXs) 

Online exchanges such as (Uniswap, Sushiswap, Venus, Ox protocol) provide platforms for users to swap currencies for other currencies; for example, U.S. dollars for bitcoin, ether for DAI. DEXs are the next big step in the cycle of exchanges, which link users directly so they can trade cryptocurrencies with one another without having to trust any intermediary with their money. 

Stable coins 

Although some have argued that stable coins do not typify DeFi because they do not offer any special financial solution other than being the equivalent of a 

particular fiat, it is actually one of the simplest forms of DeFi, as they can be used as a safe haven backed by a more stable currency than that of the user’s environment. Initiating lending contracts and other financial products in a volatile asset such as bitcoin, is impractical, therefore most DeFi contracts integrate stablecoins (such as DAI) at the depth of their functionality. Other more known stablecoins trading today include USDT, USDC, TrueUSD, and Paxos. 

Banking the Unbanked and Saving 

DeFi potentially offers much higher returns to savers than high-street institutions: Compound, for example, which is popular for saving, lending and “Yield farming”, has been offering an annual interest rate of 6.75% for those who save with the Tether stablecoin. Not only do you get interest, you also receive Comp tokens, which is an added attraction. With two-thirds of people without bank accounts in possession of a smartphone, DeFi has the potential and capacity to bank them, such that the local traditional banking institutions are wholly replaced by DeFi projects. 

Potential systematic risks of decentralized finance 

We have discussed extensively about DeFi in all its glory, but this is not all that there is to DeFi. The technology and the social development is not perfect yet and some of the reservations we have are briefly discussed here. 

As of now, it is difficult for newcomers – noobs to separate the good projects from the not-so-good ones. And, there has been quite a number of terrible DeFi projects. 

Even as the popularity of DeFi burgeoned in 2020, a number of DeFi applications, such as meme coin YAM, has crash-landed and become valueless, with its market cap going from $60 million to $0 in 35 minutes. Other DeFi projects, such as Hotdog and Pizza, have suffered the same fate, and many investors lost a lot of money. 

DeFi bugs are regrettably still a main-stay in the space. Smart contracts are very powerful tools, but they can’t be changed after the rules are set into the protocol. Therefore if there was a bug while setting the rules of a smart contract, it becomes a permanent part of the project since rules are irreversible. 

Other risks of DeFi applications could also include hacking. Pack says that “The smart contracts could be hacked. There could be a backdoor that allows someone to steal all of your keys. But you’re trusting in open-source code—over time, many eyes are looking at it.” 

Thus, we urge all who are hoping to make some money by investing in DeFi projects to tread cautiously and DYOR. 

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How to Create Liquidity Pool Token

What you will learn from this article

  • What is a Liquidity Pool
  • Liquidity Pools vs Order books
  • Advantages of Liquidity Pool
  • Liquidity pool exchanges: Uniswap and Bancor
  • Creating a Liquidity pool token

You must have heard about liquidity pools, swaps and liquidity pool tokens and wondered how to contribute to a pool and earn some tokens too. You are definitely in the right place if you’re looking for some answers.

What is a Liquidity pool?

A liquidity pool is a cluster of funds locked in a smart contract for the facilitation of decentralized trading and many more functions. Therefore, Liquidity providers are users that add an equal worth of two tokens (trading pair) in a pool to form a market. Whenever liquidity is channeled into a pool, distinctive tokens known as liquidity tokens are minted and transferred to the liquidity provider’s address. These tokens are a representation of a given liquidity provider’s contribution to a pool. The proportion of the pool’s liquidity provided determines the number of liquidity tokens the provider receives.

Importance of Liquidity Pool to Decentralized Finance

Liquidity pools are one of the fundamental technologies behind the present DeFi ecosystem. They are an important component of the automated market makers (AMM), as well as borrow-lend protocols, synthetic assets, yield farming, decentralized insurance, and gaming. Decentralized exchanges (DEX) such as Uniswap and Bancor use liquidity pools as the venue for ERC 20 token pairings. In exchange for funding an equal value of two tokens in a pool to initiate a market, Liquidity providers earn trading fees from the trades that happen in their pool, which is proportional to their share of the total liquidity, i.e sharing of trading fees is on a pro-rata basis. Uniswap, for example, charges a 0.3% trade fee. Other exchanges that use liquidity pools against the traditional order books are Binance Smart Chain exchanges such as PancakeSwap, BurgerSwap, and BakerySwap containing BEP-20 tokens.

Liquidity pools vs. Order books

To fully examine what Liquidity pools are, there is a need to compare them to the alternative: Order book.

An order book is a list of orders that present offers from buyers and sellers for security. It is a collection of open orders for a particular market.

The system that matches buy orders with sell orders is called the matching engine. A Centralized exchange (CEX) would make use of the Order book. This design is great for facilitating systematic exchange and enables the creation of complex financial markets. Since Decentralized trading involves executing trades on-chain, without a centralized party getting involved by holding the funds, this idea negates the use of order books and necessitates Liquidity pools.

Advantages of liquidity pool

Compared to the traditional order book model, liquidity pools have the following advantages:

Assured liquidity at every price level

Liquidity pool is an automated market maker in the form of a smart contract that automatically matches traders’ buy and sell orders based on predefined parameters. So long as investors have deposited assets into the pool, liquidity is constant and traders do not need to be matched directly with other traders.

Ideal for an environment with low liquidity

When liquidity is low, it becomes challenging for the order book to match orders. They aren’t ideal for an ecosystem where anyone can create their own token and those tokens usually have low liquidity. Whereas, Liquidity pools thrive better in such circumstances.

Automated pricing enables passive market making

Instead of market makers having to constantly adjust their bids and asks on order books as asset prices move, Liquidity providers simply deposit their assets into the pool and the smart contract takes care of the pricing.

Anyone can become a liquidity provider

Anyone can invest in an existing liquidity pool or create a new exchange pair for any token, at any time. When an investor wants to supply liquidity into a pool, they deposit the equivalent value of both assets. For example, Supplying $1000 of liquidity into an ETH/LINK pool requires a deposit of $1000 worth of ETH and $1000 LINK, which is $2000 in total.

In return, the investor receives liquidity pool tokens which represent their proportional share of the pool and allows them to withdraw that share at any time. Liquidity pools require no listing fees, KYC, or other barriers characteristic of centralized exchanges.

Intermediary infrastructure is not required

Unlike order books that require intermediary infrastructure to host order books and match orders, Liquidity pools don’t. This avoids points of control and removes additional layers of complexity.

Lower gas fees

Due to the efficiencies of price calculations and fee distributions within the pool, gas costs are reduced. Decentralized exchanges like Uniswap have a forthright smart contract architecture that reduces gas costs.

With the above being said, it is also worth noting that decentralized exchanges such as Binance DEX work just fine with on-chain order books. Binance DEX is built on Binance Chain, and it’s specifically designed for fast and cheap trading.

Even so, since much of the assets in the crypto space are on Ethereum, you can’t trade them on other networks unless you use some kind of cross-chain bridge that allows data and tokens to flow freely by taking down the walls between chains.

You could think of an order book exchange as peer-to-peer and Liquidity pool and AMM as peer-to-contract.

Liquidity pool exchanges: Uniswap and Bancor

Below, we will be discussing two of the most popular Liquidity pool exchanges briefly; you want to know why?

Uniswap

Uniswap is a decentralized ETH and ERC-20 token exchange that charges a 0.3% trading fee on all its pools. Direct token-token pools are not yet supported, so token-token trades occur in two separate steps: first a sell transaction of the sold token for ETH, followed by an ETH sell transaction to buy the second token.

Bancor

Bancor supports liquidity pools (called Bancor Relays) between their native BNT token and Ethereum or EOS tokens, as well as between Bancor’s stable coin (USDB) and any Ethereum or EOS token. In this article, we focus on Bancor’s liquidity pools on Ethereum. Similar to Uniswap, investors are required to supply equivalent values of each token. Unlike Uniswap, Bancor’s trading fees vary between pools as they are set by the first user to add liquidity to a Bancor Relay. Current fees are in the range of 0.1–0.5%.

To conclude, If you’re providing liquidity to the pool, you are buying a percentage ownership of that pool, depending on what others contribute to the pool. When you decide to redeem your partial ownership you are compensated with the liquidity pool tokens and your compensation is measured by the percentage of the pool that is your contribution. In essence, by adding two tokens of equal value, you’ll get tokens back that represents your share in the pool. You may be able to deposit those tokens into another pool and earn a return.