The state of cryptocurrency cybersecurity is being shaken up. As the cryptocurrency craze grips the world more than ever, cybercriminals are using the opportunity to scam people and increase their profits through fraud and cyberattacks. Bitcoin’s price climbed by nearly 400% between October 2020 and April 2021, and cyber scams followed closely, growing by 192% for the same period.
How are these attacks being carried out? Criminals have primarily been impersonating cryptocurrency applications and issuing fake security signals to attempt and steal login details from cryptocurrency holders.
But not all users are faced with the same risk. Some users are more exposed just because their fellow countrymen are also buying into the crypto craze.
As Bitcoin’s usage grew around the world, so did its price. More and more businesses announced that they accept Bitcoin as a mainstream payment method. So, as Tesla, Visa, PayPal, and JPMorgan announced that they were adopting Bitcoin, the price of this “digital gold” grew.
Naturally, cyberattacks followed, growing by 192%. India had one of the highest numbers of drive-by download attacks and mining activities, according to Microsoft’s findings for 2020. Criminals in India and broader find cryptocurrency attacks enticing since the decentralized nature of virtual coins makes criminal activities a bit easier.
That led to a booming ransomware economy worth billions, cyber-extortion, and phishing. Not only are private individuals targeted, but essential infrastructure, as well. Such things mean that a country’s defense can even be at stake.
A hacker contacts the potential victim, claiming to have compromising video or details on the person. The gist is – if you don’t pay me the sum I’m asking for, I’m going to make this information public. This type of extortion is as old as time itself. Still, as Bitcoin began growing in popularity and price, cyberattacks became more rampant, and criminals became more sophisticated in their methods.
We have already mentioned that phishing scams are on the rise, as well as compromising business emails. Over the last eight months, they have been on the rise. Hackers are imitating e-wallets and similar cryptocurrency applications. Just as criminals used to mimic banks to get your financial information, they are now stealing login details with the help of fake applications.
Cybercriminals have been eagerly using Bitcoin (BTC) as part of their business email attacks, compromising them and impersonating workers of different businesses. The criminals target and personalize emails to lure victims into buying BTC, donating Bitcoins to non-existing charities, and paying a fake vendor invoice using crypto!
And while awareness of cryptocurrency cybersecurity risks is at record-high levels, we are still facing many challenges in preventing attacks. One can say that we are all just patching up a leaking pipe. There are unlimited chances for making an attack, and many attackers face no repercussions for their attempted fraudulent actions. And in time, some successful attacks are bound to happen.
Making ransomware a criminal activity is not enough, which we know from the example of the Colonial Pipeline that occurred recently. This company was forced to pay a 5 million ransom in US dollars after its IT network got hacked. While the investigative forces could recover a part of the Bitcoin sum used in the payment, the attack still left a mark, signaling that the cryptocurrency cybersecurity sector has a long way to go.
Established in 1930, the BIS, or Bank for International Settlements for short, is a group of central banks. The main goal of the BIS is to help central banks accomplish and maintain financial and monetary stability through inter cooperation. Another important task of the BIS is to serve as a bank for various central banks.
The Bank for International Settlements is owned by 63 central banks that represent nations worldwide. Altogether, those countries account for around 95% of the world’s GDP. The headquarters are located in Basel, Switzerland. Also, it has two representative offices, one in Mexico City and the other one in Hong Kong SAR. Plus, the BIS has Innovation Hub Centres around the globe.
By analyzing banking services, they keep innovating their processes to pursue financial and monetary stability. Although, the concerns keep increasing about networks that offer DeFi services that might not be as “decentralized” as they claim. Since the DeFi sector is rapidly growing and many new investors are joining this trend, the BIS urges the regulation of DeFi networks.
The institution set a medium-term strategy called Innovation BIS 2025, aiming to leverage tech. The plan seeks to create new collaboration channels for the central banking community in these fast-changing times.
There’s a growing concern about DeFi platforms, the way they operate and advertise their products, but mainly the lack of regulation. They stated their preoccupation about DeFi being a “decentralization illusion” at the beginning of December. Decentralized finance is a fast-growing sector of the crypto economy. This particular sector promises to provide classic financial products such as savings accounts and loans without intermediaries such as banks.
However, the main worry is that platforms may offer DeFi services or products that might not be as decentralized as they claim. The BIS urges the regulation of DeFi networks as they hope this will help stabilize the new economy.
The general manager of the BIS, Agustín Carstens, stated that they found that DeFi tends to be elusive. He also mentioned that there are some issues related to the fact that at some point, some agents playing a critical role might not be in it for the best interest of their users. The BIS urges the regulation of DeFi services so investors can be safe, which eventually could boost trust in the market.
The co-founder of Swarm Markets, Timo Lehes, stated that there are areas of opportunity to improve. However, he mentioned that many institutions in the crypto space are already working to fix the issues pointed out by the BIS.
Lehes said that even though the BIS urges the regulation of DeFi ultimately, each protocol will decide whether or not to transition to a compliant business model. DeFi could gain from operating within the framework that focuses on protecting investors while maintaining open access to the markets.
Many decentralized finance services work on top of Ethereum, which token’s Ether, one of the biggest crypto coins. The transactions are facilitated by smart contracts that automate processes through code lines. Currently, over $100 billion worth of funds sits on Ethereum-based decentralized finance protocols. Curve, Maker, and Compound are a few of the biggest platforms.
The Bank for International Settlements believes the risks surrounding DeFi have been contained to crypto markets. Although, their concern is that if it goes forward, the growth of DeFi might be a threat to financial stability.
It’s well known that DeFi platforms are luring new investors with the promise of big returns on their savings and loans. But one should keep in mind that there has been an increase in the number of fraudsters and hackers taking advantage. In 2021 there was a loss of over $10 billion in DeFi thefts and scams.
The BIS flagged “severe” vulnerabilities within the sector, including highly-leveraged trades, lack of shock absorbers, and liquidity issues. Although it’s not all bad, there may be safe aspects, but there are others that may not. DeFi, although it might be on its way to regulation, still has a long way to go. Meanwhile, all of these pros and cons should make us seriously think about it.
The world is already head over heels for cryptocurrency. Rumors about Amazon, the giant in the e-Commerce industry, are most likely going to end up being true. They seem to be almost ready to enter the crypto market. You probably heard something about it in the past few months. However, all indications suggest that Amazon will present its crypto token in 2022.
Amazon is thinking in the same direction as Tesla, exploring the possibility of letting customers use cryptocurrencies for their payments. Although these rumors have been out there, the details remain unclear.
It looks like Amazon is setting up a blockchain – Amazon Managed Blockchain, and at the same time preparing to launch its cryptocurrency. Also, an article published in one tech magazine confirms that the company is looking for a new Head of Digital Currency and Blockchain. More information leads to the same conclusion. Amazon is ready to enter the crypto void.
The company denied its cryptocurrency ambitions and explained that this is one of their many experiments, and the job postings, like the one mentioned above, mean nothing more than that.
The rumor itself has increased the value of Bitcoin, and at the same time, Amazon shares gained about 1% in New York.
Still, many believe that this is inevitable. They are convinced that Amazon will eventually accept Bitcoin payments and that this turn of events will probably happen by the end of the year. As for the introduction of its crypto coin, it might happen sometime in 2022.
Let’s look at the current trends: other tech giants are doing it, why not Amazon? Competitors like Facebook (Meta) create their blockchain concepts, and Amazon needs to respond. Google’s partnership with Bakkt is clearing the road for crypto payments in the Google Pay app, as well.
The game rules are changing, and Amazon must accept it, like all other prominent players in the industry, or at least prepare everything necessary when conversion to crypto takes place.
Currently, Amazon doesn’t accept Bitcoin or other cryptocurrencies directly as a means of payment. That can change in the near future, possibly in 2022, and customers will have the option to use Amazon Crypto Token for shopping on their platform. It is in the early stage of development, and many things are still unknown.
Many sources are coming to the same conclusion, and that is the acknowledgment of the fact that Amazon’s cryptocurrency is at the final stage of development, and it is arriving in 2022. When exactly, it’s still unknown.
Amazon is preparing crypto payment with Bitcoin and expanding its complete offer to eight other coins. This project has been under construction since 2019.
One of the concerns that can cross one’s mind is that this could mean too much power in one company’s hands. A company of that magnitude has the capacity to control the market, everything you buy or give, your refunds or loyalty points transferred into crypto money. For now, it is only a hypothesis. The year 2022 will reveal more.
All of the big tech companies are part of the crypto frenzy. A well-known example is Facebook experimentation with Libra (Diem) that faced so much criticism. Others encounter it will not stop Amazon, and many are impatient to witness Amazon’s crypto future.
Let’s start from the beginning; what is Polygon, and why is it so relevant for Ethereum? Polygon, known before as Matic Network, is a framework for scaling and interoperability designed to build blockchains compatible with Ethereum. The network has a token on its own, known as MATIC, which is utilized for staking, governance, and gas fees.
At the beginning of 2021, Ethereum made changes and rebranded the Matic Network, which was known as Polygon from that moment on. Now, the framework deals with some of the limitations that Ethereum has. Lack of high speed, delayed transactions, lack of community governance, and lousy throughput, to name a few. Unlike its predecessor, Polygon is designed to be a platform for launching interoperable blockchain technology.
With the new changes Ethereum is implementing, many experts are wondering about the future of Polygon after Ethereum 2.0. In this article, we’ll explain how Polygon is aiding Ethereum and what to expect after the launch of Ethereum 2.0.
Polygon works on a four-layer principle: Polygon’s layer, Ethereum layer, security layer, and execution layer. In fact, two of those layers are of mandatory nature – the Polygon layer and the execution layer. The first one is the layer of the network, the blockchain networks on Polygon. The second mandatory layer is the execution one, which executes smart contracts.
The Ethereum layer represents a group of smart contracts executed on Ethereum. Those contracts take care of tasks like staking, transaction finality, and the communication between Polygon chains and Ethereum.
The security layer works simultaneously as Ethereum, and it grants “validators as a service” status. That role enables chains to get benefits from an extra security layer. It’s important to mention that both Ethereum and the security layer are not mandatory.
Chains set on Polygon can communicate with the main chain of Ethereum thanks to Polygon’s capabilities. Therefore, this will open a variety of possibilities for decentralized apps and the exchange of value among different platforms.
As the Ethereum team announced, Ethereum 2.0 will fix the congestion problem that Ethereum currently faces. As the new launch will to deal with current issues Polygon was helping with, does it mean that Polygon will disappear? Not likely. Polygon has helped to ease the pressure of demand and lower fees. It is easy to conclude that Polygon still has big plans after Ethereum 2.0.
On December 9, 2021, at the ZK Day event, they announced the purchase of the Mir protocol. This platform utilizes “zero-knowledge proofs” for designing and building decentralized apps away from Ethereum’s network. Finally, they mentioned the transaction, according to Polygon, will be worth around $400 million in MATIC tokens.
The zero-knowledge proofs are based on the privacy principle. They are a way of verifying things without giving away any private information. It’s like having $100 in your wallet and having the ability to prove this without opening it. Mir uses that concept to run transactions so that developers can build privacy-compliant apps.
Polygon is planning to introduce a recursive proof system to be faster than anything else, and it’s practical to verify on Ethereum. What is most important about this is that it can translate to Ethereum 2.0. Vitalik Buterin, the creator of Ethereum, declared that the network would use it in conjunction with other solutions for scalability.
As the network stated before, there’s no apparent cause for concern. The future of Polygon after Ethereum 2.0 seems to be set as the platform plans to keep it close for much longer now. Although, crypto space keeps rapidly growing, evolving, innovating, the launch of Ethereum 2.0 is for sure one of the most anticipated events. Expectations are very high since experts believe it will set the bar to a new high while respecting users’ privacy. One thing is for sure. We can expect much more exciting news from crypto space in the future years. We’ll be eagerly waiting for the next new thing.
It seems that the last hearing at the Congress brought some light on the Democrats and Republicans Vote on Crypto legislation. During the hearing, major crypto companies stepped into the scrutiny of Congress for the first time. They argued that the booming industry requires federal supervision without the rigid policies that regulators advocate for.
One key discussion point was deciding if digital currencies are assets that the Securities and Exchange Commission should police. Alesia Haas, Chief Financial Officer of Coinbase Global Inc., testified that she strongly disagrees with that approach. Haas argues that rules that are decades old, designed specifically for different kinds of assets, like stocks, are not appropriate for digital currencies.
The hearing lasted for almost five hours, and companies expect it to help legitimize the crypto industry. On the other hand, it revealed the difficulties that the federal government faces in trying to regulate the industry.
The leaders of significant crypto projects, such as Circle Internet Financial Inc., and Coinbase, were questioned. Interviewers wanted to know how their businesses should be overseen, to which the executives answered clearly.
The lawmakers raised clear divisions that demonstrated that the prospects for approving the legislation are not clear. However, the hearing allowed crypto companies to assert that this could be a milestone for the industry.
Millions of Americans have dived into investing in cryptocurrency assets; the market value is nearly $2.4 trillion. The regulators and lawmakers are struggling with how to monitor the securities.
The executives’ testimonies provided some light on the learning curve that the government officials at the capital will have. Some members of the democratic party expressed their concerns about fraud and other abuses of such nature. Meanwhile, republicans focused on the fact that too much regulation will slow down the natural innovation process.
Maxine Waters cautioned that the industry is vulnerable to manipulation, fraud, or abuse without federal supervision. People in the US keep making financial investments in digital assets by the hour. Without the proper regulation, officials expect for fraud to increase too.
On the other hand, Patrick McHenry, from the republican party, argues that the Democrats first need to understand tokens. He also stated that Congress should embrace digital assets, like cryptocurrencies, to make sure investment grows in the US.
Some Democrats in the panel stated their concerns as executives mentioned that tokens could help people without access to banks. Jeremy Allaire from Circle pointed out that it’s an open financial system. The system allows anyone with a mobile device to exchange value with another person anywhere in the world.
The committee of democrats kept questioning the protection provided for investors on tokens. Moreover, they allege that they notice extreme volatility in this market and question the possibility of a bubble.
There have been a lot of people working in the creation of something new that could potentially bring technology to the masses. We’ve been witnesses to the evolution of the crypto industry. We have seen the advantages as well as the areas of opportunity for it. Unfortunately, it seems clear that it will take a few more attempts to get some of this progress done before the Democrats and Republicans vote on crypto can favor the industry.
Elliptic, a risk management firm, declared that users of DeFi lost billions to scams and hacks. The number goes around $10.5 billion. The number is significantly higher when compared to the $1.5 billion from 2020.
Decentralized finance stands for apps based on blockchain that enable people to go around the traditional banking system. With DeFi, it’s possible to bypass financial intermediaries to borrow, lend, save, or trade with other users. This is an option due to making use of automated smart contracts connected to protocols.
This particular sector of the crypto space currently has more than $250 billion in assets. Back in June 2020, its worth was less than $1 billion. A successful cycle was created by the rising prices of the coins, governance tokens, and increased use of protocols. People invested in the crypto space are seizing the moment and fast-growing their earnings.
As networks like Binance and Solana keep growing, they become more popular by the day. Although DeFi networks experienced growth in acceptance, subsequently, it also brought more theft. As the sector keeps riding the wave of popularity, many projects struggle to keep up with the industry.
For thieves, all of this new boom in the industry translates to the possibility of stealing more funds. The firm Elliptic, an expert in risk management, stated that the core of this problem is poor cybersecurity. The issue with DeFi projects is that many startups don’t put enough resources into reinforcing the security.
Another issue is that once the theft is done, recovering the funds is almost mission impossible. Crypto transactions are of irreversible nature, which makes the process of taking them back a challenging one. Which makes it one of the main reasons why DeFi lost billions in a short amount of time.
New projects are not the only one to blame. It is also the pressure of trying to keep up with this fast-paced industry. To satisfy the high demand for new products, the security of these protocols is exposed to threats. The mix of the named factors makes these startups the most attractive victims for attackers. When we say attackers, we mean of all kinds, from hackers working alone to nation-states.
Although a third party is the culprit behind the attacks in most cases, sometimes that’s not the case. Mistakes in cybersecurity can result in inserted “backdoors” by developers that lead to stealing the users’ funds.
Just in the last couple of years, over $2 billion were stolen straight from DeFi applications. Elliptic also attributes $10 billion in losses as the value of some tokens declined due to theft or fraud. Although it’s a complex number to pin down, it’s even harder to calculate its total impact. Usually, when news breaks about some new theft, it translates to decreased confidence in the asset.
Last year, most of the losses came from DeFi Ethereum, with $8.6 billion. The protocol started lending decentralized exchanges, derivatives products, and protocols. Uniswap, Synthetic, and MakerDAO are only some examples of this. Protocols of Binance Smart Chain are also responsible for $2.5 billion in losses since last year.
According to Elliptic metrics, users should be more careful when dealing with lending protocols. This mechanism enables people to borrow crypto from pools of other users. The protocols are highly vulnerable to economic exploits, just as they are to code exploits. As the crypto space becomes more mature, attacks will eventually be happening only at risky platforms. Until then, users should keep their eyes wide open and guard up. One thing is undeniable, as numbers show, DeFi has become an alluring paradise for hackers.
Crypto enthusiasts, get excited! Now it’s possible to start earning Helium token rewards if you plan on helping the expansion of Dish Network. The cryptocurrency startup, Helium, which provides wireless networks, is joining forces with the Dish company. Now, Dish customers have the option to deploy a 5G node to share a connection and earn token rewards.
The Helium startup made it official that a wireless network run by users is now linked to token rewards. Nowadays, their Internet of Things network possesses over a quarter of a million active nodes. Their next step is to try to do the same with a 5G connection, in collaboration with FreedomFi as the provider of infrastructure. All the focus is set on the TV and mobile service provider Dish Network, who just joined the project.
On October 26th, Dish Network announced the contract with Helium, making it official to the rest of the world. The deal enables Dish users to share 5G by managing a node of Helium in exchange for HNT tokens as a reward.
COO of Helium, Frank Mong, declared that Dish Network understands the vast possibilities that blockchain technology can have paired with the wireless industry. The partnership is definite proof that the Helium model of incentivization with tokens can be a potent tool.
By rewarding users with HNT tokens more people will be drawn to participate in the expansion. The goal of Helium 5G is to have a wider reach while the user also benefits from the tokens and the apps it offers.
The first LongFi network of Helium was planned only to power Internet of Things devices like trackers and sensors. Currently, it has over 250,000 nodes operated by users, as mentioned before. Helium stated that 500,000 more are ordered, which translates to a more relevant scale coming soon.
However, the network was not planned to handle other kinds of devices such as smartphones, laptops, and tablets. On the other hand, the 5G network built with FreedomFi will be able to do it. The tokens that users get as a reward can naturally be exchanged for any other crypto of choice.
Mong declared that the first batch of 5G wireless nodes for the network of Helium would soon be shipped by FreedomFi. The expansion plan establishes that by the end of 2022, around 40,000 of Helium’s network nodes will be already deployed. However, some experts think that that scenario is optimistic, others that it will be more. In the end, it all depends on the demand. This project is not the only one working on 5G nodes. Other producers of hardware are also working on it. It’s expected that more plans like this will be announced shortly.
Although in the crypto space, anything can happen, Helium’s token has shown great promise. Throughout 2021, it went from $1.36, and it’s currently at $43.41 a token. Back in August of the same year, the project announced funding of $111 million. The main goal of such financing is to scale the plans of the decentralized project. The following month, Helium made public knowledge of its partnership with the City of San Jose in California. The association is for a pilot program that will fund internet access for households with low-income. All of that will be raised by nodes of LongFi that volunteers will operate.
It is still unknown what the future holds, especially when we talk about crypto-related news. Although it can seem to be promising in theory, you should also keep in mind that anything can happen. In this fast-changing world, what might seem certain today might change tomorrow.
Be sure to consider all the factors involved in the crypto world, not only what the protocols make public. It’s always a good idea to make a decision when you’re well informed, and as mentioned before, invest only what you can afford to lose.
In the world of crypto, sudden shifts are the only thing you can count on. The mass popularization of crypto technology leads to entire countries changing their financial course and leaning towards crypto. The newest addition to the crypto team is Singapore.
The latest news gave us a clear insight into Singapore’s determination to become one of the leading crypto forces out there. Crypto-related businesses around the world keep wrestling with one of the fastest-growing fields in finance.
Compared to countries like China that are clamping down on crypto to sustain fraudulent activity, some countries embrace crypto, making way for new solutions that might give better long-term results. Crypto Digest covers the story of Singapore and its newly found crypto plan.
Mr. Ravi Menon, the Monetary Authority of Singapore (MAS) managing director, explains that the “clamp-down” approach isn’t the correct way to handle things. Instead of banning crypto, MAS is planning to enforce solid regulations. Subsequently, businesses, companies, and firms that comply with these requirements and face multiple risks regarding crypto can operate freely.
The broader liberalization in the financial sector brings Singapore’s plans of building a digital infrastructure based on crypto technology. The country sees significant economic possibilities in crypto’s tokenized economy. Eventually, cross-border payments will come at a lower price, and hard physical assets will be traded differently.
Not everyone had the same ideas regarding crypto. As we briefly mentioned, some countries had different, more restricting approaches. We have China cracking down on almost all crypto activities in the past couple of months, while Japan only allowed crypto investment funds recently.
On the other hand, El Salvador legalized Bitcoin as legal tender and embraced crypto in a completely opposite way. The United States has a variety of digital investment options with the ever-expanding asset class. However, regulators are worried about everything related to crypto, from yield-generating products to stablecoins.
Singapore is taking a somewhat optimistic yet cautious approach. MAS believes that all crypto activity is a profitable future investment, a future that’s not clear at the moment.
As Ravi Menon explains, not getting into the game early on means instant disqualification. He believes that the country would be left behind if it had taken another route. Having a strong head start is the way to go. Therefore, if the new crypto technology is faced right at the beginning, it will be easier to spot the benefits, along with risks.
Singapores’ stakes are high, as it has already established itself as one of the leading global wealth hubs. Raising safeguard is the primary action step. Counter risk measures will surely battle illicit flows that are highly possible in the crypto space.
Singapore and its plans to develop crypto technology, understand blockchain and smart contracts are only a preparation for a 3.0 Web version of the world, as Mr. Menon said. It is important to note that Singapore is not alone in its crypto plans. Various locations include Miami, El Salvador, Dubai, Malta, and Switzerland.
Ultimately, Singapore’s plans give us a rather interesting picture regarding the third generation of online services. With multiple countries having various approaches to this new technology, we have yet to see how the crypto future will unfold. One thing is certain, though; we will have a solid case study. If we know that crypto is here to stay, the only thing left to do is watch, learn and implement.
Litecoin, also known as LTC, is a crypto altcoin explicitly designed to make payments in a secure, fast, and low-cost way. The token was created by taking advantage of the qualities of blockchain technology. The project is based on the BTC protocol, although it is different regarding the algorithm and the times of block transactions, among other factors. LTC transaction fees are low, and its block time is only 2.5 min.
On October 13, 2011, the network went live, and an open-source client launched it. Since the day it went live, it exploded due to its high acceptance among different merchants. This token has been in the top ten positions capitalization-wise in the markets for most of the time since its creation.
A former employee of Google, Charlie Lee, is responsible for the Litecoin project. The initial idea was to create a “lite version of BTC,” therefore the mentioned similarities between the two coins. Charlie Lee, aka “Chocobo”, has been a BTC miner since the early beginnings of the cryptocurrency. Lee, the former director of engineering at Coinbase, was also an engineer for Google. He was working for other companies until 2017, when he decided to work on other projects. He’s an advocate and supporter of the crypto industry and the director of the Foundation of Litecoin. It’s an organization that helps keep developing LTC and other projects alike.
When it comes to cryptocurrencies, Litecoin is the second most wanted, only after Bitcoin. It’s not hard to understand that its success is due to its utility benefits and simplicity. As of this year, LTC has been one of the most popular cryptocurrencies. It is accepted broadly; over 2,000 stores and merchants around the world welcome LTC. Litecoin transactions are typically confirmed within minutes, plus the fees are meager. These are all solid reasons it’s an appealing option in developing countries, where the transaction fee is a factor to consider when choosing which crypto to support.
Like most PoW crypto, the circulation of LTC grows as they mine blocks. On January 21, the amount of LTC already mined was up to 66,245 million, out of a total of 84 million. It was recently estimated that it might be until 2142 when Litecoin gets total dilution.
LTC uses the PoW algorithm to make sure that transactions are confirmed without mistakes and with incredible speed. The LTC mining network avoids double-spends and other attacks while still ensuring the network has 100% uptime.
Terra is a protocol for blockchain that uses stablecoins to enhance the price-stable payments system around the world. It claims to mix the resistance of BTC with the adoption and the stability of prices of fiat currencies. Therefore, it’s allowed to offer settlements that are affordable as well as fast. The development of the protocol that would end up being called Terra began in early 2018, and it was launched in April of the following year. To the day of writing this article, the protocol offers different stablecoins pegged to various fiat currencies.
Some of the fiat currencies pegged to those stablecoins are the USD, the Mongolian tugrik, the South Korean won, and it plans to keep adding options. Naturally, it has a token called LUNA, which is used to stabilize the price of the stablecoins of the protocol. The holders of the token can also vote as well as submit governance proposals.
Terra was founded in January 2018, with Daniel Shin and Do Kwon in charge of developing the project. They conceived the protocol’s project as a way to ride the wave of the fast adoption of crypto and blockchain technology. They did that with a particular focus on the stability of price and usability. Do Kwon was the one to take the CEO position of the company behind Terra, called Terraform Labs. Before getting involved in the Terra project, Shin was involved in other tech projects, such as TMON and Fast Track Asia. As for Kwon, he had founded Anyfi and worked in Apple and Microsoft as a software engineer.
Terra’s primary goal is to be different by using stablecoins that are pegged to fiat currencies. They aim to do that by combining the benefits of crypto with the stability that fiat currencies have at their prices. Their algorithm keeps the 1:1 peg that adjusts the stablecoin supply automatically based on the demand. In mid-2019, they announced that they were partnering with Chai, a mobile app for payments based in South Korea. For every transaction, the trader is charged 2-3 percent fee on average.
As of the day of writing this article, Terra had 1 billion coins in circulation. Firstly, in case that amount is exceeded, the token is burned until it goes back to its supply level of equilibrium. All new LUNA coins get issued through the algorithm to keep the stability on the price of stablecoins in Terra.
The blockchain is secured by a PoS consensus algorithm that is based on Tendermint. The holders of the token can delegate other users to validate transactions by sharing the generated revenue. Not long after the mainnet of Terra went live, the firm CertiK performed a security audit of the network. What they do, in simple terms, is to examine the economic model and test it against manipulation of the market, the coding language, and its architecture. The results from the said audit were positive in general.
When we talk about Solana, we’re talking about an exceptionally functional project of open source based on blockchain technology. In simple terms, it relies on the technology’s nature of being permissionless to supply solutions to DeFi. Its protocol is meticulously outlined to make the creation process of decentralized applications easier. Its main goal is to upgrade scalability by using the PoH and PoS of the blockchain. Due to its hybrid design, it got the attention of new traders and institutional investors. Also, the central focus of the Foundation of Solana is to make DeFi accessible on a more significant scale.
Even when the idea of it and the first efforts on the project began back in 2017, it was until March 2020 it was launched. The headquarters of the Solana Foundation was established in Switzerland, in the city of Geneva.
The most significant person behind the project is Anatoly Yakovenko, who started his career at Qualcomm. There, in 2015 he moved fast up the ranks and got to the position of Senior Staff Engineer Manager. After that, he got a new job at Dropbox, this time as a Software Engineer. By 2017, Yakovenko was already working on a project that would later be known as Solana. It was with Greg Fitzgerald with whom he chose to team up; together they founded Solana Labs. While working on it, they attracted more former colleagues from Qualcomm and finally released the protocol and the SOL token to the public in 2020.
One of the most significant differences to the game is the PoH consensus that Anatoly Yakovenko developed. The concept enables higher scalability, which at the same time improves usability. The protocol is well known in the crypto space due to its fantastic fast time to process blockchain offers. Being hybrid allows a remarkable decrease in the time of validation for the execution of contracts and transactions.
It’s been announced by the Solana Foundation that a total of 489 million tokens (SOL) would be put in circulation. A bit more than 206 million of those have been released to the market already. Its distribution goes as follows:
The rest of the coins were already distributed for private, and public sales or are about to be released.
The protocol relies on a mix of PoH and PoS mechanisms of consensus. The first being the one responsible for the number of transactions processed. The second is used to monitor the PoH process and validate the sequences of blocks created by it. The mix of both mechanisms is what makes it so unique in the industry.