If I said Kimchi, would the first thing that
comes to your mind be DeFi, probably not because
those two things had nothing to do with each
other before a few days ago. Stick around
as we dive into the latest DeFi crazes as
well as take a look at how it’s affecting
the ETH prices, what the Fed’s new policy
on inflation could mean for your crypto, and
more on this week’s Exodus Crypto news.
Welcome back everyone, thanks for joining us for our
weekly dive into the highlights of this world
we call the crypto-verse, or in the case of
this episode DeFi land.
We’ve all known for a while that DeFi was
going to be the next big thing in crypto,
bringing traditional financial tools such
as interest bearing accounts to the blockchain,
all powered by smart contracts. What we didn’t
know back then
was what it would look like or how it would
impact the ETH Network.
The DeFi space changes so rapidly it’s hard
to keep up so we still don’t have any idea
what it will look like in the future, however
what we can see is the impact it’s having
on the Ethereum network right now. Mainly
in the rising costs of transaction fees.
If you thought the network fees were high
a couple of weeks ago, round two, or is it
three began this week as ETH transaction fees
reached another all time high on Sept 1st.
When the avg. fee hit $10.33 on the ETH network
and ETH mining profits doubled in one day
as miners raked in over $800,000 in just an
hour.
This rise in fees though has not correlated
to the ETH price which seems to have plateaued
at $485 a few days ago before dipping to just
above $400 at the time of this recording.
The demand for new DeFi products is the fuel
behind the ETH fee ascent and they are coming
fast and furious. Hang on because we’re
going to try to cover the highlights faster
than new DeFi products are introduced.
Earlier in the week we saw the launch, on
the Uniswap Decentralized exchange platform,
of another new farming scheme called Kimchi,
paying massive Yields of 120,000% APY with
an incredible influx of money in the 1st 24
hrs, However, Twitter user SeanDoctor.ETH
discovered that the Kimchi contract had an
identical infinite minting function as the
“rug pull” scam Yuno. finance, this allows
the contract owner to mint as many tokens
as they please, which in turn would allow
them to deposit Kimchi and then drain all
the paired assets. Apparently there is a time
lock function on the minted coins but this
has already happened in the past, so as always,
do your own research before jumping in to
an almost too good to be true pool.
The flavor of Kimchi did not last long though
and was taken over by a DeFi project. “Sushi”
does not run on Uniswap a 100% community-owned
DEX, “Sushi” could pose a real threat
to the Uniswap platform. Sushi is the main
protagonist in the current ETH network congestion
and insane gas fees as people have been moving
all their funds from Uniswap into Sushi.
Uniswap still remains the DeFi king. however,
thanks to yearn.finance. The yETH vault from
Yearn launched less than 48 hours ago and
already has over 2.3 million ETH locked up
with a value in USD of almost 1 billion dollars.
Lots of YFI forks have also been doing well,
and by well I mean going from $0 to $hundreds/$thousands
within days or a couple of weeks.
Uniswap has also passed Coinbase in 24hr trading
volume, not an easy feat to accomplish! We’re
talking over a billion dollars in volume on
Uniswap compared to 780 million on Coinbase
during the same 24hour period. Uniswap has
also surpassed Maker in the total value locked
up in smart contracts.
While there can indeed be a ton of money to
be made by playing these markets, there is
also an extreme amount of risk contained in
the complicated multi-step/ platform lending
schemes and their smart contracts. Please
do your homework! You’ll want to make sure
your parachute is strapped on and working
before jumping off any cliffs with your capital
in hand.
For those of you more familiar with futures
markets, DeFi now has a hook into those as
well. Binance recently launched futures trading
and in Aug. saw 195 billion dollars spread
across it’s futures markets with the rise
of DeFi being the catalyst in the rising futures
contracts for altcoins.
What’s your take on DeFi? Can you keep up,
and is it something that you would like to
know more about? Please let us know in the
comments below and share your favorite DeFi
educational links.
The US Federal Reserve last week made some
big news by announcing a significant change
to its inflation policy which had a previous
target of under 2%. Fed Chair Jerome Powell
said “the central bank’s existing target
for inflation, of 2%, should henceforth be
an average: in the face of persistently low
inflation, the Fed may pursue efforts to push
inflation above the target.”
Changes in monetary policy are typically forged
during crisis. There is always a balance between
keeping people employed and keeping inflation
in check. We’re not going to get into an
economics lesson here -- this basically means
that interest rates for borrowed money could
remain low for longer than normal so the economy
can recover.
This change also represents a significant
shift in how the global central-bank principle
of inflation targeting, widely adopted over
the last quarter-century, might have outlived
its usefulness in a world of lower interest
rates.
So what does this mean for your crypto? Let’s
take a quick look at the effect from a similar
store of value: Gold.
So, the money supply is constantly increasing,
the US dollar is weakening, and it’s cheap
to borrow money. Safe haven investors are
increasingly looking to Gold to maintain their
value, because bond markets are very unattractive
for buyers in these conditions. Gold hit an
all-time high at $2000 this month because
of negative interest rates, expansion of government
debt, and very few stocks that continue to
lead the traditional markets.
Why are we making this comparison? Because
Bitcoin has been called digital Gold with
a fixed supply and a hedge against inflation.
Overall I see this particularly good for Bitcoin
and what’s good for Bitcoin trickles down
into what’s good for the rest of the crypto-verse.
If you would like a wallet to store and exchange
your Bitcoin you can use Exodus. Exodus is
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Before we go, we’re going to give another
high five to Bitcoin as it has become, by
market cap, the world’s 6th largest currency.
That’s right Bitcoin’s market cap is now
larger than 107 different fiat currencies
including the Russian ruble.
Bitcoin’s total market cap is around 216
billion dollars making about half the size
of the Indian Rupee and just over one-tenth
the size of the US dollar.
At the peak market cap of 330 billion in 2017,
Bitcoin would have been the 5th largest world
currency. Will it ever be number one? Will
it outlast the Dollar? Leave your Bitcoin
price predictions in the comments below and
share your vision of our crypto future. We
would love to hear how you see Crypto in 10
years.
We’ve come to the end of another episode
and if you liked this video please give it
a thumbs up and subscribe to the channel for
more crypto content from Exodus.
Until next time, HODL on!
