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DeFi Farmers Rush to Yam and Serum for Explosive Yields

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It seems that not a day goes by without another yield farming opportunity or DEX token hitting the DeFi scene. Today is no different, as offerings from Serum and Yam Finance are already making big moves.

The DeFi landscape today is largely analogous with the ICO boom of late-2017 when virtually any project could create a blockchain with a token and logo tacked on to attract millions in investments overnight. Fast forward to 2020 and the same principles are being applied to yield farming.

Two newly launched projects are already gaining traction just hours after their respective tokens have been launched.

Serum DEX Token Surges

Decentralized derivatives exchange Serum has just launched its SRM token across a range of exchanges and DeFi protocols. Launched late on Aug 11, SRM was priced at just $0.11 at the time of the IEO.

Within the first eight hours of trading, token prices had surged a monumental 1,700% to top out just under $2 at the time of press.

SRMUSD SRMUSD
SRMBUSD chart by TradingView

Since then, prices have pulled back slightly, settling in the $1.75 range, which is still an epic achievement for a token that is less than 24 hours old.

Prices and liquidity were boosted by Binance which also listed SRM from the get-go with four trading pairs against BTC, BNB, BUSD, and USDT. In addition to Binance, the token was also listed on Uniswap, BitMax, HBTC, Balancer, 1inch, and of course its partner FTX.

According to the world’s top crypto exchange, there are 10 billion tokens in total with an initial circulation of 10%. However, Etherscan reports the current circulating supply at 161 million which gives it a market capitalization of about $280 million.

With these figures in mind, in less than a day Serum has grown larger than Band Protocol, Ren, Augur, Yearn Finance, Ampleforth, and Bancor in terms of market cap.

The Serum Project is the result of a collaboration between centralized derivatives trading platform FTX and Solana, which is a low-fee, high-transaction rate, interoperable smart contract blockchain.

The DEX is governed by the SRM token which will be burnt each week to enable discounts on the platform for traders. In addition to staking, it also runs SerumBTC and a SerumUSD stablecoin that makes it possible to offer physically settled cross-chain contracts.

DeFi BlockchainDeFi Blockchain

In order to operate a staking node, one million SRM, or 1 MSRM is needed. At today’s rates, that works out to equal a whopping $1.75 million.

FTX and Alameda Research CEO, Sam Bankman-Fried [@SBF_Alameda], stated that it was the highest load its servers had experienced, adding;

We took a lot of preemptive steps to mitigate this, and it mostly kept things online, though there were pain points… Time to double FTX’s servers again.

The demand for DEX tokens is a testament to the popularity of this farming frenzy that has yet to cool off.

Yam Yield Farming Fruitful

Yam.Finance, also launched on Aug 11, promises to bring the fairness back into farming with a protocol and ‘zero-value token’ that aims to be totally democratic and decentralized. Yearn.Finance and Ampleforth have already made similar offerings and statements.

Yam is a little different though, offering an elastic supply token that can expand and contract depending on market conditions. The final aim for this economic experiment is eventual price stability and a peg to the U.S. dollar:

We have built Yam to be a minimally viable monetary experiment, and at launch there will be zero value in the YAM token.

The project has stated that it will be reallocating 10% of each supply expansion to a treasury which will buy a high-yield USD-denominated stablecoin called yCRV. These ‘rebases’ will occur after the initial token distribution has taken place, which happened a few hours ago.

There are 5 million YAM tokens in total with the first 2 million already distributed across eight staking pools. Holders of these eight tokens, which include COMP, MKR, LEND, YFI, LINK, SNX, wBTC, and an ETH/AMPL Uniswap pool, can deposit them as collateral on the Yam platform to earn tokens used to govern the platform.

A further 3 million tokens will enter the YAM/yCRV Uniswap v2 liquidity pool with 1.5 million distributed in the first week, decreasing by 50% each week thereafter. Users can only stake for the first week, after which they will need to deposit their earned YAM into the liquidity pool in order to earn more.

At the time of press, the token that was worth zero yesterday was trading at $100 after hitting a peak of $125.

An analytics provider for the platform has reported that total value locked into these staking pools is already at $280 million collectively just nine hours after launch.

YAM poolsYAM pools
YAM Staking Pools – Yam.Zippo.io

Too Good to be True?

Naturally, this type of scheme has attracted the attention of the crypto stalwarts on twitter that have largely expressed caution.

Compound Finance CEO, Robert Leshner [@rleshner], pointed out the security risks that could arise:

While Shapeshift CEO Erik Voorhees [@ErikVoorhees] held nothing back, labeling it as a ‘scam’ and ‘pump and dump nonsense.’

Looking at things in a more positive light was Ethhub cofounder Anthony Sassano [@sassal0x], who stated that ‘bubbles are mathematically impossible’ in this new paradigm:

Surging DeFi Crop Prices

Good or bad, these new ‘Yam farms’ have had a direct impact on the prices of other DeFi tokens as farmers and yield hunters load up on tokens to stake in the eight new pools. It appears that collateral has been taken out of DeFi protocols to use these tokens since TVL across all markets has dropped 5% over the past 24 hours according to DeFi Pulse.

COMP has cranked over 30% on the day to top $240, while Maker has also spiked 12% as it closes in on $700. SNX has made an 8% gain, LEND is up 12%, and AMPL has pumped 18% as they’re planted on new digital fields to grow Yams in what has become the latest darling of DeFi.

Source: https://beincrypto.com/defi-farmers-rush-to-yam-and-serum-for-explosive-yields/

Blockchain

Ethereum: Is the HODLing in yet?

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When it comes to the altcoin market, the past few months have shown how important a cryptocurrency Ethereum is. With DeFi growing substantially in 2020, the gains have been felt by ETH in many ways. While ETH has miles to go before it can challenge the market cap and dominance of Bitcoin, its remarkable growth thanks to DeFi and the proposed ETH 2.0 shift cannot be overlooked. With Ethereum’s use cases diversifying, users and investors within the ecosystem are reaping its benefits too.

Source: Glassnode

According to recent network data provided by Glassnode, Ethereum balances on centralized exchanges have fallen substantially over the past few weeks. In fact, the aforementioned data showed a drop from over 18,750K to around 16,750K, resulting in Etherum balances on exchanges falling to their lowest level for the year 2020, at the time of writing.

While this drop may seem alarming to some, it also illustrates a silver lining of sorts for the cryptocurrency. A fewer number of users are now holding their Ethereum on exchanges. Instead, they are moving them to cold storage or cold wallets – a sign commonly associated with increased hodling sentiment. As more users hold on to their Ethereum, the price of the cryptocurrency is also likely to be positively impacted.

One of the reasons why many users are feeling inclined to do so can be due to its recent performance, as well as its ability to derive growth from a booming DeFi ecosystem that is based on its platform.

Source: Glassnode

In fact, it is also interesting to note that over the same timeframe, Ethereum addresses with greater than 10 ETH have also seen a significant rise. According to network data provider Glassnode, such addresses have risen from 275K to 283K in the last three months alone.

One of the key reasons behind the aforementioned drop in Ethereum stored on exchanges ties back to increased hodling sentiment within the Ethereum community, as highlighted above. This, coupled with a rise in Ethereum locked in smart contracts (Since investors are looking to generate greater returns at a time when Etherum’s price is consolidating on the charts), bodes well for the cryptocurrency’s ecosystem.

Source: https://eng.ambcrypto.com/ethereum-is-the-hodling-in-yet

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Brace for it – Bitcoin Futures may be nearing a tipping point

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What’s the tipping point for Bitcoin Futures on top derivatives exchanges like the CME, an exchange that has recorded a daily trading volume of over $300M and Open Interest of over $400M, consistently, for the past 3 months. 

Inching closer to the tipping point of Bitcoin Futures

Source: Skew

Well, a small shift in Open Interest or trading volume can have a cascading effect on Bitcoin Futures’ performance in the next 180 days. Such a shift will be influenced by several factors, and it begins at the tipping point. Three factors, to be more specific. 

In the current phase of Bitcoin’s market cycle, these factors are more relevant for traders on derivative exchanges. This becomes more evident when the Liquidations chart for BitMEX is observed. Over the past 3 months, sell liquidations have paid for buy liquidations. However, over the last few days, this trend has been reversed, and buy liquidations have covered for sell liquidations on BitMEX.

Inching closer to the tipping point of Bitcoin Futures

Source: Skew

The point here is to detect the source of the domino effect before the dominoes start falling. In the case of Bitcoin Futures, the tipping point may be closer than anticipated. 

One of the top factors influencing the tipping point is the Law of the Few. 

The Law of the Few states that “the success of any kind of social epidemic is heavily dependent on the involvement of people with a particular and rare set of social gifts.”

In the case of Bitcoin, institutional investors, derivatives traders, and whales fit the bill. The success of Bitcoin Futures in the global trading community heavily relies on institutional investors trading on CME. In fact, the daily trade volume and Open Interest on CME influence the trading sentiment across spot exchanges as well. 

The last time a cascading effect was witnessed was when BTC Futures’ Daily Trading Volume hit $445M on CME and there was a rally all the way up to $614M. At the time of writing, the Daily Trading Volume was up 63.3%, when compared to the figures 6 months ago, and it has the potential to hit $614M with one move in the right direction.

This effect heavily relies on another key factor – The Stickiness Factor.

Back in 2017, when Google search results for “Bitcoin” and “Crypto” broke the record, the trading community witnessed a historic Bitcoin bull run and altcoin rally. Institutional interest and growth of Bitcoin derivative products ensued. A similar event transpired when Bitcoin Futures’ aggregated daily volume hit $184B on 27 July 2020. This event was a unique occurrence, and it made Bitcoin Futures stick in the portfolio of the average institutional investor and the derivatives trader.

Inching closer to the tipping point of Bitcoin Futures

Source: Skew

The aggregate trade volume hasn’t dropped to pre-July 2020 levels since then. Despite drops in Bitcoin’s price on spot exchanges, Futures contracts continue to trade at a premium and there is more optimism. Volume is not directly impacted by Bitcoin’s price and when the spot market is riddled with bearish sentiment, long contracts continue feeding shorts on BitMEX. This stickiness is a driver of the aforementioned tipping point. 

Inching closer to the tipping point, the powerful context is the rise of stablecoins and their instrumental role in lowering the barrier to entry on spot and fiat-crypto exchanges.

Over the past three months, stablecoins like USDT have added $100M in volume every day and their market capitalization and dominance have risen tremendously. In fact, Tether has also crossed a market capitalization of $15B.

This directly influences the tipping point for Bitcoin Futures as it makes Futures trading more accessible to traders. Bitcoin held on exchanges has nearly doubled over the past month, corresponding to an increase in Tether’s market capitalization and circulation. This resonates with derivatives traders who opt for physically-settled Bitcoin Futures contracts on exchanges like Bakkt. In fact, on Bakkt, the daily trade volume was upwards of $80M for the past week, while the Open Interest has been consistently above $10M.

Inching closer to the tipping point of Bitcoin Futures

Source: Skew

All of these factors are highlighting a shift in derivatives traders’ strategy, while also underlining increased activity on derivatives exchanges. The race to the tipping point has begun – An increase in aggregate trading volume on physically-settled Futures contracts or CME may trigger the much-awaited domino effect.

Source: https://eng.ambcrypto.com/brace-for-it-bitcoin-futures-may-be-nearing-a-tipping-point

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Tron, Synthetix, VeChain Price Analysis: 19 September

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Tron was observed to have hit a strong zone of resistance, before being rejected and pushed to the downside, at the time of writing. In fact, such bearish momentum appeared likely to continue for TRX. At a time when Ethereum was increasingly being criticized for high Gas fees and a congested network, it could have been Tron’s moment to shine, but things didn’t pan out that way at all.

Further down the charts, Synthetix continued making lower highs in its downtrend while VeChain broke out upwards after a few days of relative calm.

Tron [TRX]

Tron, Synthetix, VeChain Price Analysis: 19 September

Source: TRX/USDT on TradingView

TRX was seeing oversold conditions a few days ago when its RSI hit a low of 23, before ascending just past 50. However, the RSI was unable to remain above 50, and its drop beneath the level highlighted the fact that TRX’s recent 12% surge from $0.263 to $0.296 was merely a bounce.

TRX found a zone of strong resistance at $0.3 and looked likely to drop towards the support at $0.265.

Interestingly, a recent Reddit post has raised questions about JustSwap’s vetting process, claiming that the Tron Foundation has whitelisted a DeFi project that has since pulled a $2 million exit scam. This, despite DappRadar listing the project as “high-risk.”

Synthetix [SNX]

Tron, Synthetix, VeChain Price Analysis: 19 September

Source: SNX/USD on TradingView

Synthetix underlined the possibility of dropping lower on the charts. The Directional Movement Index did not yet show a strong trend, but ADX (yellow) was inching towards 20 and could move further north. Also, the rising -DMI (pink) denoted a bearish trend.

Over the past week, every SNX bounce off the level of support has been overwhelmed by selling pressure. This can be expected to continue. With the price registering lower highs, the way down remained the path of least resistance for SNX.

The next level of support after $4.23 lay at $3.36, representing a 20% depreciation.

VeChain [VET]

Tron, Synthetix, VeChain Price Analysis: 19 September

Source: VET/USD on TradingView

VeChain showed bullishness in the market after a period of consolidation. The Bollinger Bands expanded to indicate heightened volatility, while the price broke out towards the upper band. At the time of writing, the price was staying above the 20-period moving average, a moving average that could be tested as support as VET steadily climbs toward its resistance around the $0.158 zone.

The breakout was also accompanied by high trading volumes, legitimizing the breakout.

Source: https://eng.ambcrypto.com/tron-synthetix-vechain-price-analysis-19-september

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