In these days of early 2021, characterized by a roller coaster in the crypto-sphere, the most diverse opinions about the price of cryptocurrencies have been heard. On the one hand, the optimists who speak of incredible prices that exceed the lunar orbit, and, on the other, the pessimists, who think that all this is a huge lie and that it is going to explode "because there is not enough cash for some currencies to reach the price that is predicted”.
Imagen de StockSnap en Pixabay
I want to dwell a little on this last statement, worthy of the Greek sophist school.
The sophists belonged to a philosophical school in Ancient Greece. Its most prominent representatives were Protagoras, Gorgias, Prodico, and others (5th century BC). The sophists oscillated between materialism and idealism, but in general, their philosophy is distinguished by its subjectivism and denial of objective truth. Protagoras taught that "man is the measure of all things." Gorgias defended three theses: 1) nothing exists; 2) if something existed it would be inconceivable for man; 3) if it were conceivable, neither could it be transmitted or explained to others.
The sophists acted as masters of eloquence and the art of defeating the adversary in dispute by refuting his/her arguments, regardless of who was in possession of the truth.
A sophism is a clever play on words, a rhetorical philosophizing, apparently fair, but essentially false.
Sophistics is the use, in discussions and demonstrations, of false arguments, called sophisms, that is, subterfuges disguised under an appearance of truth. In opposition to dialectics, which demands that the concrete circumstances of an event have to be taken into account, sophistry invokes the external similarity of phenomena and belittles their interconnection.
Here's the key: interconnection.
Those who say that "there is not enough cash" are showing a concrete ignorance, always of course according to my criteria, of the chain of events that has been intertwined for 10 years, which inexorably leads to a paradigm shift in the assets value transfer, within an ecosystem.
Let us call these pessimists for the moment "negative maximalists." Their reasoning is based on the fact that economies will continue to refer to a “fiat” value, that is, to a promissory note issued by state bureaucrats in a Central Bank, following the designs of other bureaucrats, in this case sitting in Congress. When they say that there is not enough cash, what they are saying is that there is not enough amount of fiat, for example, dollars. But this is circular reasoning, or rather sophistry because according to the direction things are taking, nothing seems to indicate that there will be dollars, or retail banks, or central banks, or politicians for much longer. This is pure pragmatism, I am based on the facts. World events, especially the behavior of new generations with respect to the current deplorable financial system, clearly show us that there is no place for fiat money or for its uncontrolled issuance.
But these negative maximalists go further. They say that if all the goods in the world were sold, even so, the funds would not be enough to buy cryptocurrencies to make them rise to the forecasted values. And this is where the reasoning shows a bit of ignorance. Because the factor "unit of account” of a currency is not taken into account.
We know that the factors that define a currency are three, the reserve of value, the means of payment, and the unit of account. Well, the above reasoning may be true if a fiat currency printed by corrupt and inoperative governments is used as the unit of account. But precisely, what is changing is this concept in the new cryptographic currencies, the notion that the new unit of account is no longer in the hands of inoperative bureaucrats who print it at will, but in mathematical algorithms that run on a network distributed in thousands of computers all over the planet.
The new units of account are the sat and the wei. Not the dollar or the euro. These are the units to exchange value for the new generations. So, how much are all the goods on the planet worth in Bitcoin and/or Ether?
The new monetary base is not printed by a Central Bank. It is mined or staked in a network that cannot be seen, heard, or cut. It can be regulated, and, in fact, the centralized bodies on the eve of disappearing are going to do everything they can to get a part of it before they die. But how can you convince an 18-year-old to open an account at a retail bank, knowing that there is the possibility of being his/her own bank?
The differences between a cryptocurrency mined or produced in some way by an algorithm that does not respond to any intermediary, and the fiat printed by a political body is so great that wanting to compare the operation of the traditional economy with the crypto-sphere economy is like comparing pears with washing machines. And this is where the sophisticated reasoning of negative maximalists lies.
They think that a Bitcoin is going to be forever related to the dollar. And this must be seen as circumstantial, as transitional. In reality, things will change dramatically when young people begin to wonder not how much a Bitcoin is worth in dollars, but, exactly the opposite, how much a dollar is worth expressed in Bitcoin.
Of course, I do not deny the speculation that the crypto-sphere has intrinsic and that there are many who would like to market that prices are going to rise so that FOMOers enter to buy at the prices they want. Precisely, those are the ones who ignore the concatenation of events that decentralization has been producing for 10 years and only take cryptocurrencies as another asset to play the Wall Street or the London Stock Exchange’s game. Needless to say, there is nothing wrong with that. Only that cryptocurrencies, blockchain, web3.0, decentralization, distributed governance, DeFi, and the elimination of intermediaries, together with give the crypto-sphere an ethos far superior to the simple speculation.
Precisely, those who are dedicated to speculation are those who see bubbles and, coincidentally, they are the most afraid and see witches everywhere.
Then there are those who want "scientific evidence" or who say that cryptocurrencies "have no intrinsic value."
Continuing to reason with the logic of Modern Monetary Theory (MMT) can lead to reasoning like the sophists.
The “fiat” money is the result of acceptance, the most horrible form of acceptance, agreeing to pay the government. When you buy groceries, you go into debt in the fiat amount transferred. The currency acts like a promissory note. The grocer receives a debt paper which he/she can in turn exchange for other goods. This suggests that money has no intrinsic value, directly confronting the intrinsic desirable characteristics of cryptocurrencies such as Bitcoin and Ether.
For MMT, the Market IS NOT a place where goods and services are exchanged, but rather a vulgar “clearing house” to match debits with credits.
The decentralized nature of Bitcoin indicates that even if the state wants to destroy it, it would have to get involved in an incredibly difficult and very expensive project.
Bitcoin established a strong social contract with its users, with the following clauses:
- Only the owner of a coin can generate the signature to spend it (Resistance to confiscation)
- Anyone can trade and save value in bitcoins without asking anyone's permission (Resistance to censorship)
- Only 21 million bitcoins will be issued, with an established schedule (Resistance to inflation)
- All users can review and verify the rules of Bitcoin (Resistance to counterfeiting)
What other forms of money have been successful for long periods of time? Gold, snail shells, rare stones, all have some of the following characteristics in common: (intrinsic desirable characteristics):
- Difficult to be lost or stolen
- Scarce
- Difficult to be forged
- Easily measurable
- Divisible
MMT directly contradicts the fundamental notion that money has value because of its desired intrinsic characteristics. According to the MMT, money is "a creation of law" and derives its value from the state. MMT maintains that we "have evolved" from snail shells to gold coins and finally to "fiat" as a result of seeking more efficient ways to manage debt (?!)
Bitcoin, even when it is not legal tender, is in demand by millions of people around the World, precisely for its intrinsic desirable characteristics.
What scientific proof do you need?
Imagen de sandid en Pixabay
Guys, don't you think that Bitcoin, Ether, and so many other crypto projects, are an independent asset class that humanity has not known until now? The crypto-sphere is so much more than the price of its coins. Reducing the crypto sphere to a speculative game of traditional mercantilism seems to me to be very wrong, although I can admit that the profound disruptions caused by the interconnection of events that began 10 years ago are being ignored.
The logic and dynamics of the markets were altered, and still many do not understand it.
You cannot reason the dynamics of decentralization with the logic of centralization. If not, we fall into the dialogue at the beginning of this post between Zeus and Hera, Nobody exists, then neither do you.
It would be like trying to apply dial-up internet reasoning to explain a zkRollup. Our friends of Bankless say there are no more territorial nations, and no need for armed forces to control them. Now nations are distributed digital entities, and their citizens usually go by the name of cryptocurrencies. How difficult is this to understand?
Trying to refute a reality with false reasoning has been going on for about 25 centuries. The only difference is that now it does not have a Greek name.
With that said, let's move on to today's two tokens.
LRC
Loopring is a protocol for building decentralized exchanges. In addition to smart contracts, Loopring also offers a collection of open-source software to help you create decentralized exchanges. It is a platform that can be used to create the exchange itself.
Daniel Wang decided to revolutionize the financial industry and created an open-source protocol to save cryptocurrency investors from incidents like Mt Gox. Loopring is not itself an exchange, but rather a platform that can help decentralized exchanges use its code.
With the Loopring protocol, you don't have to rely on centralized exchanges to store your assets. Loopring saves you from sending your cryptocurrencies from your wallets to centralized exchanges. Centralized exchanges are extraordinarily prone to hacking.
The Loopring protocol helps you save cryptocurrencies in your wallet and trade them without sending them anywhere. Smart contracts will help you trade using Loopring tokens.
Following the launch of the Layer 2 High-Speed Automated Market Maker, Loopring is now in the process of launching liquidity mining incentives on the platform.
The Loopring order book-based exchange protocol was originally launched in November 2019, and the high-speed Layer 2-based decentralized exchange was rolled out at the end of 2020.
The latest DEX v3. went live in early December 2020 and introduced new features such as the ability to do gasless instant trades and instant add/remove of gasless liquidity as a liquidity provider in layer 2.
Loopring joined liquidity mining by enabling layer 2-based AMM liquidity mining.
The first liquidity mining campaign incentivized three liquidity pools: LRC/ETH, ETH/USDT, and WBTC/ETH, with rewards of 400,000 LRC for each pool.
Loopring's native LRC token reached its highest price of 2020 in mid-September when it hit $ 0.26. It is still below its all-time high in early 2018 of $ 2.40. With the bull run of early 2021, the price hovers around $ 0.44.
The Loopring project started in June 2017, and four main versions of the protocol have already been released.
Loopring 1.0 introduced the Ring-Matching concept, whereby two or more orders can circularly swap crypto assets in the form of rings. This characteristic is unique and offers the possibility to discover the best price and the best trading volume.
Loopring 1.5 introduced another unique feature called Dual Authoring to prevent front-running. It is very useful in cases where orders can be matched by more than one exchange/relayer.
Loopring 2.0 introduced the removal of the need for traders to pay relayers with LRC as a trading fee.
Trading fees can be paid using any ERC-20 token specified by the relayer.
Loopring 3.0 is the latest. It can perform more than 2025 trades per second while ensuring the same level of security as the underlying Ethreum blockchain. This is possible by applying a method called zkRollup, and by a feature called On-Chain Data Availability (OCDA). If OCDA is disabled, Loopring's throughput can reach 16,400 trades per second, but security is greatly reduced.
The visible faces of the Loopring project are Daniel Wang, its founder, and Jay Zhou.
Conclusion. A platform that allows you to create exchanges is a very revolutionary project. Imagine that any community can make its own decentralized exchange to operate independently. With a simple protocol, you could set up an exchange and operate regionally, for specific products or simply among members of a specific industry, and in a decentralized way. It is necessary to understand that Loopring is not a physical exchange, but the code that runs behind the exchange. Loopring does not compete with exchanges, but rather improves them, reducing risk and increasing liquidity and fairness for all parties involved. Let's look at Loopring as an exchange as a service code, and this can be a gamechanger.
HEGIC
HEGIC ($ HEGIC) is the first option AMM protocol without KYC. It is a mechanism that integrates the "pool" model for liquidity providers who want to improve trustless options trading. The platform is based on Ethereum and is where traders can participate for profit or participate directly as liquidity providers for a part of the commissions on transactions. All contracts are created, maintained, and settled in a decentralized way without third parties.
Options are derivative instruments that give the owner the right, but not the obligation, to buy or sell the underlying asset. In this case, HEGIC seeks to offer ETH options in which the option holder can choose to essentially buy or sell based on established conditions.
In a previous post, I made a description of what the call and put options are.
HEGIC offers good liquidity, something its predecessors did not achieve. Traders can finally take advantage of all the benefits of decentralized options trading. With great liquidity for calls and puts in ETH and WBTC.
Holders of the native HEGIC token receive 1% of the size of each option to bet.
HEGIC has everything it takes to be a Uniswap of options in the DeFi ecosystem.
HEGIC is an ERC-20 token and is used to distribute 100% of the settlement fee among all token holders on a quarterly basis.
The HEGIC token also has several functions:
- Governance - Owners can participate in governance to determine things like fees, size of settlement fees, actual price ratios, or supported asset types.
- The holder token is entitled to a 30% discount when purchasing contracts, excluding gas rates.
- HEGIC rewards for liquidity providers.
- Staking, to collect the payment fees of the platform.
HEGIC users can choose to act as liquidity providers to sell options and earn premiums. The platform interface also allows users to customize the terms of the options they want to buy, such as the strike price and the expiry date. The price is automatically calculated once the terms are selected, including the 1% settlement fee on the option size purchased. Users can exercise the option at any time since liquidity is locked in the option contract.
The HEGIC token can be staked in “lots” to receive fees from option buyers. To acquire a staking lot you need 888,000 HEGIC, although any amount of HEGIC can also be staked through third parties such as zLot or Hegic Staking.
The prices of the underlying assets are provided by Chainlink. Option holders pay premiums and settlement fees with Ether. You can get HEGIC by purchasing it on the HEGIC bonding curve. It can also be purchased on Binance or Uniswap, and other centralized and decentralized exchanges.
Overall, the HEGIC token has a very positive growth outlook. The group behind the protocol is totally anonymous. All that is known is that it was developed by a pseudonym named Molly Wintermute.
Conclusion. One of the most attractive features of Defi is trading derivatives in a decentralized way, without centralized bodies that set rules and commissions. This is especially true on untrusted and non-custodial sites where users can simply plug in their wallets without KYC and be the owner of their assets.
HEGIC has made a lot of noise in the DeFi space. The price of the token and the volume of transactions are also increasing, which shows that the project is generating a lot of interest in the crypto-sphere. The HEGIC concept turns the sale of options into an investment that produces a passive return. Options are a huge market in traditional finance. The volume of crypto options trading is expected to increase a lot in the short term. HEGIC has a unique opportunity to lead this market.
As usual, none of the things written in this post are financial advice and are not intended to replace personal research.
I am interested in showing in this blog the fundamentals of crypto-sphere projects that may mean a paradigm shift in the near and not so near future. This approach may be different and complementary to the posts of other talented colleagues at Publish0x that show shorter-term variables and which I follow with great interest, since I, of course, am also interested in the short term and in putting together a solid portfolio.
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