DeFi

How to effectively manage DeFi risks

Published

7 months ago

14 June, 2024

Even though decentralized finance (DeFi) is on the right track in terms of growth and adoption, the space remains full of risks, uncertainty, and volatility. One of its biggest advantages over centralized finance is the availability and accessibility of financial data. Because transactions are public, blockchain provides a unique opportunity to understand market sentiment through data analysis.

This innovative perspective is known as on-chain analysis. Simply put, it is the practice of analyzing the fundamentals, utility, and transactional activity of a cryptocurrency and corresponding blockchains in order to predict future price action and a broader range of metrics. walk.

Iakov Levin is the founder and CEO of Midas.Investments, a CeDeFi (centralized decentralized finance) crypto-investment platform.

On-chain analytics provides a view of the digital financial system for better decision-making and helps answer critical questions: Who owns the majority of assets? Are holders of a specific token sitting on profits?

Why do we need on-chain analysis?

Any form of investment requires a thorough analysis of market sentiment and capital situation. Traditional business analysis always presents a challenge because market data is not always transparent.

On the other hand, the transparent nature of DeFi means that there is plenty of data accessible. However, for this data to be actionable, it must be refined, organized and transformed into understandable information.

The on-chain analysis approach fills this gap. It creates an effective practice for measuring the necessary data and metrics and potentially simplifying complex investment decisions.

Additionally, it can be a powerful practice for identifying protocols with high liquidity and security risks. We are only in the early stages of on-chain analysis. However, the emergence of more innovative data brokers and analytics solutions could enable next-generation on-chain analytics to bring more comprehensive visibility to the entire DeFi sector.

The negative side of on-chain analysis

It is important to remember that we should not rely solely on on-chain analysis. More often than not, this does not provide a complete picture of market transactions where we see the skeleton data of transactions without understanding their context. There is a risk that one cannot get the full picture of what is driving current market sentiment – and how long it might persist.

The crypto and DeFi spaces are highly strategic. Recently, we have seen tweets or announcements from influential public figures dramatically increasing specific tokens beyond their projected value, and small changes in regulation completely decimate a token’s floor price. These prospects are relatively common in the DeFi space, which cannot be predicted by on-chain analysis.

Focusing too granularly on micro-details can result in losing the larger strategic narrative. Even though such analytics effectively provide essential information about each transaction, they cannot provide broader context by linking each activity across the blockchain.

Nonetheless, these pitfalls of on-chain analytics may be resolved in the future when we see more and more wallets being tagged on exchanges, allowing investment decisions to be made in a much more balanced and efficient manner.

How to Use On-Chain Analytics Effectively

The most critical on-chain metrics that investors tend to rely on are liquidity indicators and how they change over time. On-chain analytics seeks to provide insights into how liquidity spreads from one protocol to another over time. For example, if a network experiences high liquidity, it can be predicted that certain protocols and associated tokens will lose value.

There are several different analysis tools, suitable for different levels of investors. The most basic is Nansen, which allows users to dig deeper into what’s happening in wallet addresses across the blockchain. Nansen helps identify token flows between major players, where money is moving and deposited, which non-fungible tokens (NFTs) are positioned for higher prices, and more.

Then there is Dune Dashboard, where users (usually advanced traders) can write SQL queries to identify and track required metrics and convert them into comprehensive visual charts. There are also other popular tools tailored to specific blockchains, such as Etherscan, Santiment, and Messari.

The Intense Demand for On-Chain Analytics and Its Future

On-chain analytics has become a powerful tool in recent years, especially for investment companies and venture capital funds. Many have built their own advanced on-chain analytics systems to identify deeper metrics and effectively manage their clients’ risk positions. Several startups have also entered the blockchain data analytics market, working as data brokers and providing actionable blockchain analytics data to major venture capitalists (VCs) and investors.

The future of on-chain analytics looks bright. This intense demand for on-chain analytics will continue to grow as Web3 services are expected to grow by 700% over the next five years. As more venture capital firms and hedge funds use these analytics to make sustainable decisions and more data brokers enter this space, the current on-chain analytics challenges will be raised through innovation.

Fuente

DeFi

If You Missed BONK and PEPE This Year, This Viral New Crypto Might Be Your Salvation

Published

6 months ago

29 July, 2024

CoinFlix Staff

If You Missed BONK and PEPE This Year, This Viral New Crypto Might Be Your Salvation

Bonk and Pepe appear set to net new investors 10x to 100x returns over the next 12 months. However, cryptocurrencies in the DeFi play-to-earn gaming sector could offer even greater returns. As August approaches, Rollblock is emerging as a standout DeFi play-to-earn gem with the potential to 100x-1000x gains in the fourth quarter and beyond.

The project features an innovative revenue sharing model and exceptional accessibility, attracting players and investors. Additionally, Rollblock’s extensive game library of over 150 titles and enhanced sports betting are further driving excitement for the platform. Cryptocurrency analysts are expecting a sudden surge in demand. 800% a push for Rollblock from the beginning of September.

Bonk remains strong despite market fluctuations

While most well-known cryptocurrencies struggled throughout July, Bonk remained strong. As one of the highest-grossing meme cryptocurrencies of 2024, Bonk rose over 24% in July, while most cryptocurrencies experienced negative fluctuations.

Investors looking to add a relatively safe memecoin to their portfolio should consider Bonk. While Bonk is unlikely to generate explosive gains of 250x to 1,000x from here on out, Bonk could still theoretically provide returns in the 20x to 100x range.

Pepe should see a big rise in the next bull run

Alongside Bonk, Pepe has yet to go through a bull run. This means that there are still substantial gains to be made from Pepe over the next 12 months.

Pepe is down 4% in 30 days, but that shouldn’t worry Pepe investors in 2024. Experts believe Pepe’s best days are still ahead, with crypto analysts predicting a 10x to 50x surge in the next election cycle around November.

In the long term, Pepe could surpass the 100x mark for today’s investors. However, Pepe is a memecoin, and one should exercise caution when investing in purely speculative assets that have no utility.

Rollblock’s Unprecedented Hype Potential Could Push It Past 100x Valuation in Q4

Rollblock is a GambleFi Play-to-Earn token that integrates centralized and decentralized gambling on a single platform. By allowing players to earn rewards through active participation and gameplay, the platform creates a compelling incentive structure that appeals to both casual and competitive players.

With its cutting-edge blockchain technology, Rollblock offers top-notch security that keeps bets and transactions on the platform secure. The platform’s lack of KYC mandates appeals to both users who value anonymity and security.

Rollblock’s revenue sharing model, which allocates up to 30% of casino revenue to RBLK token holders, is a major draw for investors. The model involves burning half of the repurchased tokens and distributing the other half to stakers, increasing the token’s value and encouraging long-term investment.

The platform is also constantly evolving thanks to user feedback which has enabled updates such as the upcoming sports betting feature within the platform’s casino. This addition will complement Rollblock’s extensive game library of over 150 titles, ranging from traditional poker to innovative blockchain-based games.

RBLK is expected to emerge as one of the leading DeFi tokens in 2024. With a price of $0.0172 with impressive growth potential and over 140 million tokens sold recently, Rollblock is on track to enter the top 100 cryptocurrencies by Q4, making today a lucrative time to buy RBLK tokens.

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Fuente

DeFi

Cryptocurrency sector is experiencing ‘most misjudged moment’ since 2020, says venture capitalist Arthur Cheong

Published

6 months ago

29 July, 2024

CoinFlix Staff

Cryptocurrency sector is experiencing ‘most misjudged moment’ since 2020, says venture capitalist Arthur Cheong

Veteran cryptocurrency investor Arthur Cheong believes the digital asset sector offers long-term holders a golden opportunity.

Cheong, the founder of DeFiance Capital, tell His 171,700 followers on social media platform X indicate that he believes decentralized finance (DeFi) is hugely undervalued.

According to Cheong, DeFi projects are innovating at a rapid pace and leaving traditional financial (TradFi) companies in the dust.

“It’s been a long time since I’ve been this excited about the risk/reward and potential upside of DeFi. This is probably the most misjudged moment since the pre-DeFi summer of 2020, with extremely promising prospects.

I see opportunities not only in OG (original) DeFi, but also in some newer projects that are evolving rapidly and growing at a pace that fintech startups will do anything to match.

The veteran investor also believes that crypto is now here to stay following recent launch from the Ethereum spot market (ETH) exchange-traded funds (ETFs) last week.

“Overall, the floodgates are open and there is no turning back. TradFi asset managers will continue to launch new crypto products because, guess what: there is huge demand for them!”

I expect them to launch actively managed crypto ETFs [in the] coming years. ”

Earlier this month, Cheong laid that it might be a bad strategy for cryptocurrencies to seek mass adoption, believing that digital assets are designed to disrupt several key financial sectors.

“I think we should accept that cryptocurrencies may not be suited for mass adoption like Web2, but rather are optimized for some narrow but very high-impact use cases like stateless global money, cross-border payments, and decentralized finance.

Chasing mass adoption of normies may be chasing the wrong Grail from the start.

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